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COMCAST CORPORATION 6/30/04 FORM 10-Q

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:

JUNE 30, 2004
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 000-50093

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

PENNSYLVANIA 27-0000798

(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
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     

_________________

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12-b2 of the Exchange Act). Yes   X       No     

As of June 30, 2004, there were 1,358,616,278 shares of our Class A Common Stock, 866,778,108 shares of our Class A Special Common Stock and 9,444,375 shares of our Class B Common Stock outstanding.


COMCAST CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 2004
TABLE OF CONTENTS

Page Number
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
Condensed Consolidated Balance Sheet as of June 30, 2004 and December 31, 2003 (Unaudited) 2
Condensed Consolidated Statement of Operations for the Three and Six Months Ended June 30, 2004 and 2003 (Unaudited) 3
Condensed Consolidated Statement of Cash Flows for the Three and Six Months Ended June 30, 2004 and 2003 (Unaudited) 4
Notes to Condensed Consolidated Financial Statements (Unaudited) 5
ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 28
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk 35
ITEM 4. Controls and Procedures 35
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings 35
ITEM 2. Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities 35
ITEM 4. Submission of Matters to a Vote of Security Holders 36
ITEM 6. Exhibits and Reports on Form 8-K 38
SIGNATURES 39

_________________

        This Quarterly Report on Form 10-Q is for the three and six months ended June 30, 2004. This Quarterly Report modifies and supersedes documents filed prior to this Quarterly Report. Information that we file with the SEC in the future will automatically update and supersede information contained in this Quarterly Report. In this Quarterly Report, we refer to Comcast Corporation as “Comcast”; Comcast and its consolidated subsidiaries as “we,” “us” and “our”; and Comcast Holdings Corporation as “Comcast Holdings.”

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

        Our businesses may be affected by, among other things:

 

changes in laws and regulations,

 

changes in the competitive environment,

 

changes in technology,

 

industry consolidation and mergers,

 

franchise related matters,

 

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

 

the demand for the programming content we distribute or the willingness of other video program distributors to carry our content, and

 

general economic conditions.

As more fully described elsewhere in this Quarterly Report and in our Annual Report on Form 10-K for the year ended December 31, 2003, on September 17, 2003, we sold to Liberty Media Corporation our approximate 57% interest in QVC, Inc., which markets a wide variety of products directly to consumers primarily on merchandise-focused television programs. Accordingly, financial information related to QVC is presented as a discontinued operation in our financial statements.


COMCAST CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 2004

PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS

CONDENSED CONSOLIDATED BALANCE SHEET
(Unaudited)

(Dollars in millions,
except share data)
June 30,
2004
December 31,
2003


ASSETS      
CURRENT ASSETS 
   Cash and cash equivalents  $594   $1,550  
   Investments  2,481   2,493  
   Accounts receivable, less allowance for doubtful accounts of $142 and $146  925   907  
   Other current assets  418   453  


       Total current assets  4,418   5,403  


 
INVESTMENTS  14,204   14,818  
 
PROPERTY AND EQUIPMENT, net of accumulated depreciation of $7,949 and $6,563  18,615   18,473  
 
FRANCHISE RIGHTS  51,070   51,050  
 
GOODWILL  14,816   14,841  
 
OTHER INTANGIBLE ASSETS, net of accumulated amortization of $2,810 and $2,182  4,322   3,859  
 
OTHER NONCURRENT ASSETS, net  636   715  


   $108,081   $109,159  


LIABILITIES AND STOCKHOLDERS’ EQUITY

 
CURRENT LIABILITIES 
   Accounts payable  $988   $1,251  
   Accrued expenses and other current liabilities  4,194   4,563  
   Deferred income taxes  657   679  
   Current portion of long-term debt  2,792   3,161  


       Total current liabilities  8,631   9,654  


LONG-TERM DEBT, less current portion  22,985   23,835  
 
DEFERRED INCOME TAXES  26,644   25,900  
 
OTHER NONCURRENT LIABILITIES  7,922   7,816  
 
MINORITY INTEREST  384   292  
 
COMMITMENTS AND CONTINGENCIES (NOTE 9) 
 
STOCKHOLDERS' EQUITY 
   Preferred stock - authorized 20,000,000 shares; issued, zero 
   Class A common stock, $0.01 par value - authorized, 
     7,500,000,000 shares; issued, 1,602,256,778 and 1,601,161,057; 
     outstanding, 1,358,616,278 and 1,357,520,557  16   16  
   Class A special common stock, $0.01 par value - authorized, 
     7,500,000,000 shares; issued 914,067,951 and 931,732,876; 
     outstanding, 866,778,108 and 884,443,033  9   9  
   Class B common stock, $0.01 par value - authorized, 75,000,000 shares; 
     issued, 9,444,375 
   Additional capital  44,484   44,742  
   Retained earnings  4,653   4,552  
   Treasury stock, 243,640,500 Class A common shares and 47,289,843 Class A special 
     common shares  (7,517 ) (7,517 )
   Accumulated other comprehensive loss  (130 ) (140 )


       Total stockholders' equity  41,515   41,662  


   $108,081   $109,159  


See notes to condensed consolidated financial statements.

2


COMCAST CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 2004
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)

           
    (Dollars in millions, except per share data)
    Three Months Ended
June 30,
Six Months Ended
June 30,
    2004   2003   2004   2003  




REVENUES  $5,066   $4,594   $9,974   $9,060  
 
COSTS AND EXPENSES 
    Operating (excluding depreciation)  1,794   1,753   3,663   3,564  
    Selling, general and administrative  1,320   1,229   2,626   2,456  
    Depreciation  813   816   1,611   1,596  
    Amortization  287   371   563   725  




   4,214   4,169   8,463   8,341  




OPERATING INCOME  852   425   1,511   719  
 
OTHER INCOME (EXPENSE) 
    Interest expense  (484 ) (490 ) (984 ) (1,014 )
    Investment income (loss), net  151   (6 ) 142   (229 )
    Equity in net (losses) income of affiliates  (20 ) 1   (37 ) (16 )
    Other income  12   22   19   35  




   (341 ) (473 ) (860 ) (1,224 )




INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES AND 
    MINORITY INTEREST  511   (48 ) 651   (505 )
 
INCOME TAX (EXPENSE) BENEFIT  (234 ) (13 ) (310 ) 128  




INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE MINORITY INTEREST  277   (61 ) 341   (377 )
 
MINORITY INTEREST  (15 ) (32 ) (14 ) (71 )




INCOME (LOSS) FROM CONTINUING OPERATIONS  262   (93 ) 327   (448 )
 
INCOME FROM DISCONTINUED OPERATIONS, net of tax    71     129  




NET INCOME (LOSS)  $262   ($22 ) $327   ($319 )




BASIC EARNINGS (LOSS) FOR COMMON STOCKHOLDERS PER COMMON SHARE 
    Income (loss) from continuing operations  $0.12   ($0.04 ) $0.14   ($0.20 )
    Income from discontinued operations    0.03     0.06  




        Net income (loss)  $0.12   ($0.01 ) $0.14   ($0.14 )




DILUTED EARNINGS (LOSS) FOR COMMON STOCKHOLDERS PER COMMON SHARE 
    Income (loss) from continuing operations  $0.12   ($0.04 ) $0.14   ($0.20 )
    Income from discontinued operations    0.03     0.06  




        Net income (loss)  $0.12   ($0.01 ) $0.14   ($0.14 )




See notes to condensed consolidated financial statements.

3


COMCAST CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 2004
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)

(Dollars in millions)
Six Months Ended June 30,
2004 2003


OPERATING ACTIVITIES 
   Net income (loss)  $327   ($319 )
   Income from discontinued operations    (129 )


   Income (loss) from continuing operations  327   (448 )
 
Adjustments to reconcile net income (loss) from continuing operations to net cash 
provided by operating activities from continuing operations: 
     Depreciation  1,611   1,596  
     Amortization  563   725  
     Non-cash interest (income) expense, net  25   (61 )
     Equity in net losses of affiliates  37   16  
     Losses (gains) on investments and other income, net  (125 ) 257  
     Non-cash contribution expense  23  
     Minority interest  14   20  
     Deferred income taxes  155   (226 )
     Proceeds from sales of trading securities    85  
 
Changes in operating assets and liabilities, net of effects of acquisitions and divestitures: 
       Change in accounts receivable, net  (8 ) (6 )
       Change in accounts payable  (263 ) (183 )
       Change in other operating assets and liabilities  274   (64 )


       Net cash provided by operating activities from continuing operations  2,633   1,711  


FINANCING ACTIVITIES 
   Proceeds from borrowings  1,058   8,848  
   Retirements and repayments of debt  (1,617 ) (11,543 )
   Repurchases of common stock  (511 )
   Other  46   (3 )


       Net cash used in financing activities from continuing operations  (1,024 ) (2,698 )


INVESTING ACTIVITIES 
   Acquisitions, net of cash acquired  (336 ) (22 )
   Proceeds from sales (purchases) of short-term investments, net  (15 ) (20 )
   Proceeds from sales and restructuring of investments and assets held for sale  51   3,592  
   Purchases of investments  (106 ) (130 )
   Capital expenditures  (1,732 ) (2,012 )
   Additions to intangible and other noncurrent assets  (453 ) (110 )
   Proceeds from settlement of contract of acquired company  26  


       Net cash (used in) provided by investing activities from continuing operations  (2,565 ) 1,298  


(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS  (956 ) 311  
 
CASH AND CASH EQUIVALENTS, beginning of period  1,550   505  


CASH AND CASH EQUIVALENTS, end of period  $594   $816  


See notes to condensed consolidated financial statements.

4


COMCAST CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 2004
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Basis of Presentation
We have prepared these unaudited condensed consolidated financial statements based upon Securities and Exchange Commission (“SEC”) rules that permit reduced disclosure for interim periods.

These financial statements include all adjustments that are necessary for a fair presentation of our results of operations and financial condition for the interim periods shown, including normal recurring accruals and other items. The results of operations for the interim periods presented are not necessarily indicative of results for the full year.

Effective in the first quarter of 2004, we changed the unit of accounting used for testing impairment of our indefinite-lived franchise rights to geographic regions and performed impairment testing of our cable franchise rights. We did not record any impairment charges in connection with this impairment testing.

For a more complete discussion of our accounting policies and certain other information, refer to the financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2003.

On September 17, 2003, we completed the sale of our approximate 57% interest in QVC, Inc. Accordingly, QVC has been presented as a discontinued operation pursuant to Statement of Financial Accounting Standards (“SFAS”) No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets.”

The results of operations of QVC included within income from discontinued operations, net of tax are as follows (in millions):

Three Months
Ended
June 30, 2003
Six Months
Ended
June 30, 2003
Revenues  $1,101   $2,163  
Income before income taxes and minority interest  $199   $371  
Income tax expense  $64   $137  

Reclassifications
Certain reclassifications have been made to the prior year financial statements to conform to those classifications used in 2004.

2. RECENT ACCOUNTING PRONOUNCEMENTS

FIN 46/FIN 46R
In  January 2003, the Financial Accounting Standards Board (“FASB”) issued Interpretation No. 46, “Consolidation of Variable Interest Entities” (“FIN 46”). We adopted the provisions of FIN 46 effective January 1, 2002. Since our initial application of FIN 46, the FASB addressed various implementation issues regarding the application of FIN 46 to entities outside its originally interpreted scope, focusing on Special Purpose Entities, or SPEs. In December 2003, the FASB revised FIN 46 (“FIN 46R”), which delayed the required implementation date until March 31, 2004 for entities that are not SPEs. The adoption of FIN 46R did not have a material impact on our financial condition or results of operations.

5


COMCAST CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 2004
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(Unaudited)

EITF 03-16
In March 2004, the Emerging Issues Task Force (“EITF”) reached a consensus regarding Issue No. 03-16, “Accounting for Investments in Limited Liability Companies” (“EITF 03-16”).  EITF 03-16 requires investments in limited liability companies (“LLCs”) that have separate ownership accounts for each investor to be accounted for similar to a limited partnership investment under Statement of Position No. 78-9, “Accounting for Investments in Real Estate Ventures.”  Investors would be required to apply the equity method of accounting to their investments at a much lower ownership threshold than the 20% threshold applied under Accounting Principles Board (“APB”) No. 18, “The Equity Method of Accounting for Investments in Common Stock.”  EITF 03-16 is effective for the first period beginning after June 15, 2004. The adoption of EITF 03-16 will not have a material impact on our financial condition or results of operations.

3. EARNINGS PER SHARE

Earnings (loss) per common share (“EPS”) is computed by dividing net income (loss) from continuing operations for common stockholders by the weighted average number of common shares outstanding during the period on a basic and diluted basis.

Our potentially dilutive securities include potential common shares related to our stock options, restricted stock and Comcast exchangeable notes (see Note 6). Diluted earnings for common stockholders per common share (“Diluted EPS”) considers the impact of potentially dilutive securities except in periods in which there is a loss because the inclusion of the potential common shares would have an antidilutive effect. Diluted EPS excludes the impact of potential common shares related to our stock options in periods in which the option exercise price is greater than the average market price of our common stock for the period. Diluted EPS for the interim periods in 2004 excludes the impact of potential common shares related to our Class A Special common stock held in treasury because it is our intent to settle the related Comcast exchangeable notes using cash.

Diluted EPS for the three and six months ended June 30, 2004 excludes approximately 108 million and 93 million potential common shares, respectively, related to our stock option plans because the option exercise price was greater than the average market price of our Class A common stock and our Class A Special common stock for the period. Diluted EPS for the three and six months ended June 30, 2003 excludes approximately 197 million and 190 million potential common shares, respectively, primarily related to our stock option and restricted stock plans and our common stock held in treasury because the assumed issuance of such potential common shares is antidilutive in periods in which there is a loss.

The following table reconciles the numerator and denominator of the computations of Diluted EPS for common stockholders from continuing operations for the interim periods presented:

6


COMCAST CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 2004
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(Unaudited)

(Amounts in millions, except per share data)
Three Months Ended June 30,
2004 2003


Income Shares Per Share
Amount
Loss Shares Per Share
Amount






Basic EPS for common 
  stockholders  $262   2,257   $0.12   ($93 ) 2,255 ($0.04 )
Effect of Dilutive 
Securities 
  Assumed exercise of 
   stock option and 
   restricted stock plans    10          






Diluted EPS  $262   2,267   $0.12   ($93 ) 2,255 ($0.04 )






(Amounts in millions, except per share data)
Six Months Ended June 30,
2004 2003


Income Shares Per Share
Amount
Loss Shares Per Share
Amount






Basic EPS for common 
  stockholders  $327   2,257   $0.14   ($448 ) 2,255 ($0.20 )
Effect of Dilutive 
Securities 
  Assumed exercise of 
   stock option and 
   restricted stock plans    11          






Diluted EPS  $327   2,268   $0.14   ($448 ) 2,255 ($0.20 )







4. ACQUISITIONS AND OTHER SIGNIFICANT EVENTS

Acquisition of Broadband
On November 18, 2002, we completed the acquisition of AT&T Corp.‘s (“AT&T”) broadband business, which we refer to as “Broadband.” The acquisition created the largest cable operator in the United States by combining Broadband’s and our cable networks.

The application of purchase accounting under SFAS No. 141, “Business Combinations,” requires that the total purchase price of an acquisition be allocated to the fair value of the assets acquired and liabilities assumed based on their fair values at the acquisition date. During 2003, we finalized the Broadband purchase price allocation, except for certain litigation contingencies relating to our share of AT&T’s potential liability associated with the At Home Corporation litigation (see Note 9). We are waiting for additional information to complete the Broadband purchase price allocation, which we have arranged with AT&T to obtain and expect to receive during 2004.

Liabilities associated with exit activities recorded in the purchase price allocation consist of $602 million associated with accrued employee termination and related costs and $929 million associated with either the cost of terminating contracts or the present value of remaining amounts payable under non-cancelable contracts. Amounts paid, adjustments made against these accruals and interest accretion during the six months ended June 30, 2004 were as follows (in millions):

7


COMCAST CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 2004
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(Unaudited)

Employee
Termination and
Related Costs
Contract
Exit
Costs


  Balance, December 31, 2003  $135   $461  
  Payments  (38 ) (12 )
  Interest accretion    2  


  Balance, June 30, 2004  $97   $451  


Gemstar
On March 31, 2004, we entered into a long-term, non-exclusive patent license and distribution agreement with Gemstar-TV Guide International (“Gemstar”) in exchange for a one-time payment of $250 million to Gemstar. This amount is included in other intangible assets in our condensed consolidated balance sheet and is being amortized based on a preliminary allocation of value. This agreement allows us to utilize Gemstar’s intellectual property and technology and the TV Guide brand and content on our interactive program guides. In addition, we formed an entity along with Gemstar to develop and enhance interactive programming guides.

TechTV
On May 10, 2004, we completed the purchase of TechTV, Inc. (“TechTV”) by acquiring all outstanding common and preferred stock of TechTV from Vulcan Programming, Inc. for approximately $300 million in cash. Substantially all of the purchase price has been recorded as an intangible asset pending the completion of a formal valuation.  The results of TechTV are not material for pro forma presentation. On May 28, 2004, G4 and TechTV began operating as one network called G4techTV, which is available to approximately 42 million cable and satellite homes nationwide. We have classified G4techTV as part of our content business segment (see Note 10). 

5. INVESTMENTS

June 30,
2004
December 31,
2003


(in millions)
Fair value method      
          Cablevision  $815   $970  
          Liberty Media Corporation  1,981   2,644  
          Liberty Media International  407  
          Microsoft  1,334   1,331  
          Sprint  515   349  
          Vodafone  871   1,245  
          Other  45   44  


   5,968   6,583  


Equity Method 
          Cable related  2,183   2,145  
          Other  238   242  


   2,421   2,387  


     Cost method, principally Time Warner Cable and Time Warner  8,296   8,341  


          Total investments  16,685   17,311  
     Less, current investments  2,481   2,493  


     Non-current investments  $14,204   $14,818  


8


COMCAST CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 2004
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(Unaudited)

Fair Value Method
We hold unrestricted equity investments, which we account for as available for sale or trading securities, in certain publicly traded companies. The net unrealized pre-tax gains on investments accounted for as available for sale securities as of June 30, 2004 and December 31, 2003 of $49 million and $65 million, respectively, have been reported in our consolidated balance sheet principally as a component of accumulated other comprehensive loss, net of related deferred income taxes of $17 million and $23 million, respectively.

On June 7, 2004, we received approximately 11 million shares of Liberty Media International, Inc. (“Liberty International”) Series A common stock in connection with the spin-off by Liberty Media Corporation (“Liberty”) of Liberty International. In the spin-off, each share of Liberty Series A and Series B common stock received 0.05 shares of the new Liberty International Series A common stock. As of June 30, 2004, we have classified all of the shares of Liberty International Series A common stock that we received as trading securities recorded at fair value within noncurrent investments. Approximately 5 million of these shares collateralize a portion of the ten year prepaid forward sale of Liberty common stock that we entered into in December 2003.

The cost, fair value and unrealized gains and losses related to our available for sale securities are as follows (in millions):

June 30,
2004
December 31,
2003


Cost  $78   $92  
Unrealized gains  49   66  
Unrealized losses      (1 )


Fair value  $127   $157  



Investment Income (Loss), Net
Investment income (loss), net for the interim periods includes the following (in millions):

           
    Three Months Ended
June 30,
Six Months Ended
June 30,
    2004   2003   2004   2003  




Interest and dividend income  $26   $49   $43   $83  
Gains (losses) on sales and exchanges of investments, net  (1 ) 1   1   23  
Investment impairment losses  (3 ) (15 ) (3 ) (70 )
Mark to market adjustments on trading securities  (53 ) 307   (227 ) 292  
Mark to market adjustments on derivatives related 
     to trading securities  200   (296 ) 255   (306 )
Mark to market adjustments on derivatives and hedged items  (18 ) (52 ) 73   (251 )




     Investment income (loss), net  $151   ($6 ) $142   ($229 )





9


COMCAST CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 2004
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(Unaudited)

6. LONG-TERM DEBT

June 30,
2004
December 31,
2003


(in millions)
Notes exchangeable into common stock  $3,360   $4,318  
Bank and public debt  21,959   22,193  
Other, including capital lease obligations  458   485  


     Total debt  $25,777   $26,996  



The Cross-Guarantee Structure
To simplify our capital structure, we and a number of our wholly-owned subsidiaries that hold substantially all of our cable communications assets have unconditionally guaranteed each other’s debt securities and indebtedness for borrowed money, including amounts outstanding under the new credit facility (see below). As of June 30, 2004, $20.675 billion of our debt was included in the cross-guarantee structure.

Comcast Holdings is not a guarantor and none of its debt is guaranteed under the cross-guarantee structure. As of June 30, 2004, $981 million of our debt was outstanding at Comcast Holdings.

New Credit Facility
In January 2004, we entered into a new $4.5 billion, five-year revolving bank credit facility. Interest rates on this facility vary based on an underlying base rate (“Base Rate”), chosen at our option, plus a borrowing margin. The Base Rate is either LIBOR or the greater of the prime rate or the Federal Funds rate plus 0.5%. The borrowing margin is based on our senior unsecured debt ratings. The interest rate for borrowings under this revolver is LIBOR plus 0.625% based on our current credit ratings.

Comcast Exchangeable Notes
In May and June 2004, we redeemed an aggregate of $533 million face amount of Comcast exchangeable notes due December 2004 and 2005 (covering approximately 14.9 million shares of our Class A Special common stock) by paying $400 million in cash and by exercising our options to put the underlying equity collar agreements to the counterparty. Interest expense for the three and six months ended June 30, 2004 includes $29 million related to the early redemption of these obligations. As of June 30, 2004, an aggregate of $441 million of Comcast exchangeable notes, which are due in November 2004 and 2005, remain outstanding. The remaining outstanding Comcast exchangeable notes are collateralized by approximately 16 million shares of our Class A Special common stock held in treasury.

Repayments of Senior Notes
On March 31, 2004, we repaid all $250 million principal amount of our 8.875% senior notes due 2007. On May 1, 2004, we repaid all $300 million principal amount of our 8.125% senior notes due 2004. The repayments were both financed with available cash.

Notes Exchangeable into Common Stock
We hold exchangeable notes (the “Exchangeable Notes”) that are mandatorily redeemable at our option into shares of Cablevision NY Group (“Cablevision”) Class A common stock or its cash equivalent, Microsoft Corporation (“Microsoft”) common stock or its cash equivalent, (i) Vodafone ADRs, (ii) the cash equivalent, or (iii) a combination of cash and Vodafone ADRs, and Comcast Class A Special common stock or its cash equivalent. The maturity value of the Exchangeable Notes varies based upon the fair market value of the security to which it is indexed. Our Exchangeable Notes are collateralized by our investments in Cablevision, Microsoft and Vodafone, respectively, and the Comcast Class A Special common stock held in treasury.

During the three and six months ended June 30, 2004, we settled an aggregate of $176 million and $352 million, respectively, of our obligations relating to our Vodafone exchangeable notes by delivering the underlying ADRs to

10


COMCAST CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 2004
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(Unaudited)

the counterparty upon maturity of the instruments, and the equity collar agreements related to the underlying ADRs expired. The Vodafone transactions represented non-cash investing and financing activities and had no effect on our statement of cash flows due to their non-cash nature. 

As of June 30, 2004, the securities we hold collateralizing the Exchangeable Notes were sufficient to satisfy the debt obligations associated with the outstanding Exchangeable Notes (see Notes 5 and 8).

Commercial Paper
In June 2004, we entered into a new commercial paper program to provide a lower cost borrowing source of liquidity to fund our short-term working capital requirements. The program allows for a maximum of $2.25 billion of commercial paper to be issued at any one time. Our revolving bank credit facility supports this program. As of June 30, 2004, amounts outstanding under the program totaled $304 million with a weighted average interest rate of 1.74%. Amounts outstanding under the program are classified as long-term in our consolidated balance sheet as we have both the ability and the intent to refinance these obligations, if necessary, on a long-term basis with amounts available under our revolving bank credit facility.

ZONES
At maturity, holders of our 2.0% Exchangeable Subordinated Debentures due 2029 (the “ZONES”) are entitled to receive in cash an amount equal to the higher of the principal amount of the ZONES or the market value of Sprint common stock. Prior to maturity, each ZONES is exchangeable at the holders’ option for an amount of cash equal to 95% of the market value of Sprint common stock. As of June 30, 2004, the number of Sprint shares we held exceeded the number of ZONES outstanding.

We separated the accounting for the Exchangeable Notes and the ZONES into derivative and debt components. We record the change in the fair value of the derivative component of the Exchangeable Notes and the ZONES and the change in the carrying value of the debt component of the Exchangeable Notes and the ZONES as follows (in millions):

Exchangeable Notes ZONES


Six Months Ended
June 30,
Six Months Ended
June 30,
Balance at Beginning of Period: 2004 2003 2004 2003




     Debt component  $5,030   $6,981   $515   $491  
     Derivative component  (712 ) (1,522 ) 268   208  




         Total  4,318   5,459   783   699  
Decrease in debt component due to maturities 
     and redemptions  (887 ) (176 )
Change in debt component to interest expense  (44 ) (55 ) 13   12  
Change in derivative component to investment 
     income (loss), net  (27 ) 385   (56 ) 65  
Balance at End of Period: 
     Debt component  4,099   6,750   528   503  
     Derivative component  (739 ) (1,137 ) 212   273  




         Total  $3,360   $5,613   $740   $776  





11


COMCAST CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 2004
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(Unaudited)

Interest Rates
Excluding the derivative component of the Exchangeable Notes and the ZONES whose changes in fair value are recorded to investment income (loss), net, our effective weighted average interest rate was 7.08% as of June 30, 2004 and December 31, 2003.

Derivatives
We use derivative financial instruments to manage our exposure to fluctuations in interest rates and securities prices. We have issued indexed debt instruments and prepaid forward sale agreements whose value, in part, is derived from the market value of certain publicly traded common stock.

Lines and Letters of Credit
As of June 30, 2004, we and certain of our subsidiaries had unused lines of credit of $3.898 billion under our respective credit facilities.

As of June 30, 2004, we and certain of our subsidiaries had unused irrevocable standby letters of credit totaling $422 million to cover potential fundings under various agreements.

7. STOCKHOLDERS' EQUITY

Stock-Based Compensation
We account for stock-based compensation in accordance with APB Opinion No. 25, “Accounting for Stock Issued to Employees,” and related interpretations, as permitted by SFAS No. 123, “Accounting for Stock-Based Compensation,” (“SFAS No. 123”) as amended. Compensation expense for stock options is measured as the excess, if any, of the quoted market price of our stock at the date of the grant over the amount an employee must pay to acquire the stock. We record compensation expense for restricted stock awards based on the quoted market price of our stock at the date of the grant and the vesting period. We record compensation expense for stock appreciation rights based on the changes in quoted market prices of our stock or other determinants of fair value.

The following table illustrates the effect that applying the fair value recognition provisions of SFAS No. 123 to stock-based compensation would have had on net income (loss) and earnings (loss) per share. Upon further analysis during 2003, it was determined that the expected option lives for options granted in prior years should have been 7 years rather than the 8 years used previously. The amounts in the table reflect this revision for all periods presented. Total stock-based compensation expense was determined under the fair value method for all awards using the accelerated recognition method as permitted under SFAS No. 123 (dollars in millions, except per share data):

12


COMCAST CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 2004
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(Unaudited)

           
    Three Months Ended
June 30,
Six Months Ended
June 30,
    2004   2003   2004   2003  




Net income (loss), as reported  $262   ($22 ) $327   ($319 )
Add: Total stock-based compensation expense 
  included in net income (loss), as reported above  10   2   15   4  
Deduct: Total stock-based compensation expense determined 
  under fair value based method for all awards relating to 
  continuing operations, net of related tax effects  (48 ) (41 ) (81 ) (76 )
Deduct: Total stock-based compensation expense determined 
  under fair value based method for all awards relating to 
  discontinued operations, net of related tax effects    (4 )   (7 )




Pro forma, net income (loss)  $224   ($65 ) $261   ($398 )




Basic earnings (loss) from continuing operations for common 
stockholders per common share: 
          As reported  $0.12 ($0.04 ) $0.14 ($0.20 )
          Pro forma  $0.10 ($0.06 ) $0.12 ($0.23 )
 
Diluted earnings (loss) from continuing operations for common stockholders per common share: 
          As reported  $0.12 ($0.04 ) $0.14 ($0.20 )
          Pro forma  $0.10 ($0.06 ) $0.12 ($0.23 )
 
Basic earnings (loss) for common stockholders per common share: 
          As reported  $0.12 ($0.01 ) $0.14 ($0.14 )
          Pro forma  $0.10 ($0.03 ) $0.12 ($0.18 )
 
Diluted earnings (loss) for common stockholders per common share: 
          As reported  $0.12 ($0.01 ) $0.14 ($0.14 )
          Pro forma  $0.10 ($0.03 ) $0.12 ($0.18 )

The pro forma effect on net income (loss) and net income (loss) per share for the interim periods by applying SFAS No. 123 may not be indicative of the effect on net income (loss) in future years because additional awards in future years are anticipated.

13


COMCAST CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 2004
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(Unaudited)

The following table summarizes the activity of our option plans during the six months ended June 30, 2004 (options in thousands):

Class A
Common Stock
Class A Special
Common Stock


Options Weighted-
Average
Exercise
Price
Options Weighted-
Average
Exercise
Price




Outstanding at beginning of period  85,151   $39.28 60,464   $29.43
Granted  15,117   29.93
Exercised  (530 ) 23.03 (1,057 ) 11.57
Canceled  (2,748 ) 38.08 (695 ) 35.25


Outstanding at end of period  96,990   37.98 58,712   29.68


Exercisable at end of period  55,202   44.78 34,824   27.19



Share Repurchase Program
Based on the trade date for stock repurchases, during the three and six months ended June 30, 2004, we repurchased approximately 17.8 million shares and 18.5 million shares, respectively, of our Class A Special common stock for aggregate consideration of $499 million and $523 million, respectively, pursuant to our Board authorized repurchase program.

Comprehensive Income (Loss)
Our total comprehensive income (loss) for the interim periods was as follows (in millions):

           
    Three Months Ended
June 30,
Six Months Ended
June 30,
    2004   2003   2004   2003  




Net income (loss)  $262   ($22 ) $327   ($319 )
Unrealized gains (losses) on marketable securities  (11 ) 3   (9 ) (28 )
Reclassification adjustments for losses 
   included in net income (loss)  11   3   19   27  
Foreign currency translation gains    9     15  




Comprehensive income (loss)  $262   ($7 ) $337   ($305 )




8. STATEMENT OF CASH FLOWS - SUPPLEMENTAL INFORMATION

We made cash payments for interest and income taxes during the interim periods as follows (in millions):

           
    Three Months Ended
June 30,
Six Months Ended
June 30,
    2004   2003   2004   2003  




Interest  $376   $449   $981   $1,016  
Income taxes  $89   $38   $150   $53  

The three and six month interim periods in 2004 include a federal income tax refund of approximately $536 million. During the three and six months ended June 30, 2004, we entered into non-cash financing and investing activities

14


COMCAST CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 2004
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(Unaudited)

related to certain of our Exchangeable Notes (see Note 6). During the three months ended June 30, 2004, we acquired cable systems through the assumption of $68 million of debt, which is considered a non-cash financing and investing activity. Also during the three months ended June 30, 2004, in connection with the acquisition of TechTV (see Note 4), we issued shares in G4techTV with a value of approximately $70 million, which is also considered a non-cash financing and investing activity.

9. COMMITMENTS AND CONTINGENCIES

Commitments
Certain of our subsidiaries support debt compliance with respect to obligations of certain cable television partnerships and investments in which we hold an ownership interest (see Note 5). The obligations expire between May 2008 and September 2010. Although there can be no assurance, we believe that we will not be required to meet our obligations under such commitments. The total notional amount of our commitments was $1.021 billion as of June 30, 2004, at which time there were no quoted market prices for similar agreements.

Contingencies

At Home
Litigation has been filed against us as a result of our alleged conduct with respect to our investment in and distribution relationship with At Home Corporation. At Home was a provider of high-speed Internet services that filed for bankruptcy protection in September 2001. Filed actions are: (i) class action lawsuits against us, Brian L. Roberts (our President and Chief Executive Officer and a director), AT&T (the former controlling shareholder of At Home and also a former distributor of the At Home service) and other corporate and individual defendants in the Superior Court of San Mateo County, California, alleging breaches of fiduciary duty in connection with transactions agreed to in March 2000 among At Home, AT&T, Cox Communications, Inc. (Cox is also an investor in At Home and a former distributor of the At Home service) and us; (ii) class action lawsuits against Comcast Cable Communications, LLC, AT&T and others in the United States District Court for the Southern District of New York, alleging securities law violations and common law fraud in connection with disclosures made by At Home in 2001; (iii) a lawsuit brought in the United States District Court for the District of Delaware in the name of At Home by certain At Home bondholders against us, Brian L. Roberts, Cox and others, alleging breaches of fiduciary duty relating to the March 2000 transactions and seeking recovery of alleged short-swing profits of at least $600 million pursuant to Section 16(b) of the Securities Exchange Act of 1934 purported to have arisen in connection with certain transactions relating to At Home stock effected pursuant to the March 2000 agreements; and (iv) a lawsuit brought in the United States Bankruptcy Court for the Northern District of California by certain At Home bondholders against Comcast Cable Holdings, LLC and Comcast Cable Communications Holdings, Inc., as well as AT&T, AT&T Credit Holdings, Inc. and AT&T Wireless Services, Inc., seeking to avoid and recover certain alleged “preference” payments in excess of $89 million allegedly made to the defendants prior to the At Home bankruptcy filing. The actions in San Mateo County, California have been stayed by the United States Bankruptcy Court for the Northern District of California, the court in which At Home filed for bankruptcy, as violating the automatic bankruptcy stay. The preference action in U.S. Bankruptcy Court has also been stayed by agreement of the parties. In the Southern District of New York actions, the court ordered the actions consolidated into a single action. All of the defendants served motions to dismiss on February 11, 2003. The court dismissed the common law claims against us and Mr. Roberts, leaving only a claim for “control person” liability under the Securities Exchange Act of 1934. In a subsequent decision, the court limited the remaining claim against us and Mr. Roberts to disclosures that are alleged to have been made by At Home prior to August 28, 2000. The Delaware case has been transferred to the United States District Court for the Southern District of New York, and we have moved to dismiss the Section 16(b) claims.

Under the terms of the Broadband acquisition, we are generally contractually liable for 50% of any liabilities of AT&T relating to At Home, including most liabilities resulting from any pending or threatened litigation, with the exception, among other things, of liabilities arising out of contracts between At Home and AT&T (or its affiliates) for the benefit of the businesses retained by AT&T following its divestiture of Broadband. In those situations that we are contractually liable for 50% of any liabilities, AT&T will be liable for the other 50% of these liabilities. In addition to the actions against AT&T described above, in which we are also a defendant, there are two additional

15


COMCAST CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 2004
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(Unaudited)

actions brought by At Home’s bondholders’ liquidating trust against AT&T not naming us: (i) a lawsuit filed against AT&T and certain of its senior officers in Santa Clara, California state court alleging various breaches of fiduciary duties, misappropriation of trade secrets and other causes of action in connection with the transactions in March 2000 described above, and prior and subsequent alleged conduct on the part of the defendants, and (ii) an action filed against AT&T in the District Court for the Northern District of California, alleging that AT&T infringes an At Home patent by using its broadband distribution and high-speed Internet backbone networks and equipment. Both of these actions are in the discovery stage.

We deny any wrongdoing in connection with the claims that have been made directly against us, our subsidiaries and Brian L. Roberts, and intend to defend all of these claims vigorously. In our opinion, the final disposition of these claims is not expected to have a material adverse effect on our consolidated financial position, but could possibly be material to our consolidated results of operations of any one period. Further, no assurance can be given that any adverse outcome would not be material to our consolidated financial position.

We are currently waiting to obtain additional information, and, therefore, are unable to determine what impact, if any, the final resolution of our share of these AT&T At Home potential liabilities would have on our consolidated financial position or results of operations. No assurance can be given that any adverse outcome would not be material.

AT&T - Wireless and Common Stock Cases
We, in connection with our acquisition of Broadband, are potentially responsible for a portion of the liabilities arising from two purported securities class action lawsuits brought against AT&T and others and consolidated for pre-trial purposes in the United States District Court for the District of New Jersey. These lawsuits assert claims under Section 11, Section 12(a)(2) and Section 15 of the Securities Act of 1933, as amended, and Section 10(b) and Section 20(a) of the Securities Exchange Act of 1934, as amended. The first lawsuit, for which our portion of the exposure is up to 15%, alleges, among other things, that AT&T made material misstatements and omissions in the Registration Statement and Prospectus for the AT&T Wireless initial public offering (“Wireless Case”). The second lawsuit, for which our portion of the exposure is up to 50%, alleges, among other things, that AT&T knowingly provided false projections relating to AT&T common stock (“Common Stock Case”). The complaints seek damages in an unspecified amount, but, because the trading activity during the purported class periods was extensive, the amounts ultimately demanded may be significant. We and AT&T believe that AT&T has meritorious defenses and these actions are being vigorously defended.

In March 2004, AT&T and the other defendants moved for summary judgment in both the Common Stock and Wireless Cases, and the plaintiffs moved for summary judgment in the Wireless Case. In June 2004, the Court granted in part and denied in part the motion for summary judgment in the Common Stock Case. The Court held that the plaintiffs could not prove that the alleged misrepresentation caused the decline in shareholder value with regard to any of their claims except for the December 1999 projections concerning AT&T Business Services and AT&T Consumer Services. This decision is ultimately subject to appeal, although such an appeal is unlikely until after a final judgment is entered in the case. The Court allowed the plaintiffs’ Section 20(a) claim to go forward. The trial on the remaining claims in the Common Stock Case is set to commence on October 5, 2004. No trial date has been set in the Wireless Case. In connection with the Broadband acquisition, we recorded an estimate of the fair value of the potential liability associated with these cases. We have not adjusted the amount recorded pending both the appeals process described above and final resolution of these cases.

AT&T-TCI
On June 24, 1998, the first of a number of purported class action lawsuits was filed by then-shareholders of Tele-Communications, Inc. (“TCI”) Series A TCI Group Common Stock (“Common A”) against AT&T and the directors of TCI relating to the acquisition of TCI by AT&T. A consolidated amended complaint combining the various different actions was filed on February 10, 1999 in the Delaware Court of Chancery. The consolidated amended complaint alleges that former members of the TCI board of directors breached their fiduciary duties to Common A shareholders by agreeing to transaction terms whereby holders of the Series B TCI Group Common Stock received a 10% premium over what Common A shareholders received in connection with the transaction. The complaint further

16


COMCAST CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 2004
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(Unaudited)

alleges that AT&T aided and abetted the TCI directors’ breach.

In connection with the TCI acquisition, which was completed in early 1999, AT&T agreed under certain circumstances to indemnify TCI’s former directors for certain losses, expenses, claims or liabilities, potentially including those incurred in connection with this action. In connection with the Broadband acquisition, Broadband agreed to indemnify AT&T for certain losses, expenses, claims or liabilities. Those losses and expenses potentially include those incurred by AT&T in connection with this action, both as a defendant and in connection with any obligation that AT&T may have to indemnify the former TCI directors for liabilities incurred as a result of the claims against them in this action.

On September 8, 1999, AT&T moved to dismiss the amended complaint for failure to state a cause of action against AT&T. On July 7, 2003, the Delaware Court of Chancery granted AT&T’s motion to dismiss on the ground that the complaint failed to adequately plead AT&T’s “knowing participation,” as required to state a claim for aiding and abetting a breach of fiduciary duty. The other claims made in the complaint remain outstanding. Discovery in this matter is now closed.

In our opinion, the final disposition of these AT&T related claims is not expected to have a material adverse effect on our consolidated financial position, but could possibly be material to our consolidated results of operations of any one period. Further, no assurance can be given that any adverse outcome would not be material to our consolidated financial position.

Liberty Digital
On January 8, 2003, Liberty Digital, Inc. filed a complaint in Colorado state court against us and Comcast Cable Holdings, LLC. The complaint alleges that Comcast Cable Holdings breached a 1997 “contribution agreement” between Liberty Digital and Comcast Cable Holdings and that we tortiously interfered with that agreement. The complaint alleges that this purported agreement obligates Comcast Cable Holdings to pay fees to Liberty Digital totaling $18 million (increasing at CPI) per year through 2017. Liberty Digital seeks, among other things, compensatory damages, specific performance of the purported agreement, a declaration that the agreement is valid and enforceable going forward, and an unspecified amount of exemplary damages from us based on the alleged intentional interference claim. We and Comcast Cable Holdings filed our answer to the complaint on March 5, 2003, in which we denied the essential allegations of the complaint and asserted various affirmative defenses.

On July 20, 2004, we and certain of our affiliates entered into an exchange agreement with Liberty (the parent company of Liberty Digital) and certain of its affiliates. The closing of the transactions in the exchange agreement on July 28, 2004 resolved all claims in the litigation. Pursuant to the terms of the exchange agreement, the parties submitted to the court a stipulation of dismissal that, upon approval by the court, will dismiss the litigation with prejudice.

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

17


COMCAST CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 2004
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(Unaudited)

10. FINANCIAL DATA BY BUSINESS SEGMENT

Our reportable segments consist of our Cable and Content businesses. Beginning in the first quarter of 2004, although they do not meet the quantitative disclosure requirements of SFAS No. 131, “Disclosures About Segments of an Enterprise and Related Information,” we elected to disclose our content businesses separately as a reportable segment. Our content segment consists of our national networks E! Entertainment, Style Network, The Golf Channel, Outdoor Life Network and G4techTV. As a result of this change, we have presented the comparable 2003 Content segment amounts. In evaluating our segments’ profitability, the components of net income (loss) below operating income (loss) before depreciation and amortization are not separately evaluated by our management (amounts in millions).

Cable (1) Content Corporate and
Other (2)
Total




Three Months Ended March 31, 2004          
     Revenues (3)  $4,838   $199   $29   $5,066  
     Operating income (loss) before depreciation and   
          amortization (4)  1,920   77   (45 ) 1,952  
     Depreciation and amortization  1,043   39   18   1,100  
     Operating income (loss)  877   38   (63 ) 852  
     Capital expenditures  893   6   5   904  
  
Three Months Ended June 30, 2003 
     Revenues (3)  $4,379   $159   $56   $4,594  
     Operating income (loss) before depreciation and   
          amortization (4)  1,597   56   (41 ) 1,612  
     Depreciation and amortization  1,133   32   22   1,187  
     Operating income (loss)  464   24   (63 ) 425  
     Capital expenditures  1,047   4   3   1,054  
  
Six Months Ended June 30, 2004 
     Revenues (3)  $9,485   $375   $114   $9,974  
     Operating income (loss) before depreciation and   
          amortization (4)  3,639   146   (100 ) 3,685  
     Depreciation and amortization  2,060   74   40   2,174  
     Operating income (loss)  1,579   72   (140 ) 1,511  
     Capital expenditures  1,707   10   15   1,732  
  
Six Months Ended June 30, 2003 
     Revenues (3)  $8,611   $304   $145   $9,060  
     Operating income (loss) before depreciation and   
          amortization (4)  3,018   97   (75 ) 3,040  
     Depreciation and amortization  2,213   64   44   2,321  
     Operating income (loss)  805   33   (119 ) 719  
     Capital expenditures  2,000   7   5   2,012  
  
As of June 30, 2004 
     Assets  $105,486   $2,460   $135   $108,081  
  
As of December 31, 2003 
     Assets  $105,316   $2,110   $1,733   $109,159  

_____________

(1)

Our regional programming networks Comcast SportsNet, Comcast SportsNet Mid-Atlantic, Comcast SportsNet Chicago, Cable Sports Southeast and CN8-The Comcast Network are included in our cable segment.


(2)

Corporate and other includes corporate activities, elimination entries and all other businesses not presented in our cable or content segments. Assets included in this caption consist primarily of our investments (see Note 5).


18


COMCAST CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 2004
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(Unaudited)

(3)

Non-US revenues were not significant in any period. No single customer accounted for a significant amount of our revenue in any period.


(4)

Operating income (loss) before depreciation and amortization is defined as operating income before depreciation and amortization, impairment charges, if any, related to fixed and intangible assets and gains or losses from the sale of assets, if any. As such, it eliminates the significant level of non-cash depreciation and amortization expense that results from the capital intensive nature of our businesses and intangible assets recognized in business combinations, and is unaffected by our capital structure or investment activities. Our management and Board of Directors use this measure in evaluating our consolidated operating performance and the operating performance of all of our operating segments. This metric is used to allocate resources and capital to our operating segments and is a significant component of our annual incentive compensation programs. We believe that this measure is also useful to investors as it is one of the bases for comparing our operating performance with other companies in our industries, although our measure may not be directly comparable to similar measures used by other companies. This measure should not be considered as a substitute for operating income (loss), net income (loss), net cash provided by operating activities or other measures of performance or liquidity reported in accordance with generally accepted accounting principles.


19


COMCAST CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 2004
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(Unaudited)

11. CONDENSED CONSOLIDATING FINANCIAL INFORMATION

We and five of our cable holding company subsidiaries, Comcast Cable Communications, LLC (Comcast Cable or “CCCL”), Comcast Cable Communications Holdings, Inc. (Comcast Cable Communications Holdings or “CCCH”), Comcast MO Group, Inc. (“Comcast MO Group”), Comcast Cable Holdings, LLC (Comcast Cable Holdings or “CCH”), and Comcast MO of Delaware, LLC (“Comcast MO of Delaware”) fully and unconditionally guarantee each other’s debt securities. Comcast MO Group, CCH and Comcast MO of Delaware are collectively referred to as the “Combined CCHMO Parents.” Our condensed consolidating financial information is as follows (in millions):

Comcast Corporation
Condensed Consolidating Balance Sheet
As of June 30, 2004
 
Comcast
Parent
CCCL
Parent
CCCH
Parent
Combined
CCHMO
Parents
Non-
Guarantor
Subsidiaries
Elimination
and
Consolidation
Adjustments
Consolidated
Comcast
Corporation







ASSETS                
   Cash and cash equivalents  $   $   $   $   $594   $   $594  
   Investments  2,481   2,481  
   Accounts receivable, net  925   925  
   Other current assets  13   405   418  







     Total current assets  13   4,405   4,418  







   INVESTMENTS  14,204   14,204  
   INVESTMENTS IN AND AMOUNTS DUE
     FROM SUBSIDIARIES ELIMINATED
     UPON CONSOLIDATION
  46,653   26,652   33,539   40,224   20,108   (167,176 )
   PROPERTY AND EQUIPMENT, net  8   3   18,604   18,615  
   FRANCHISE RIGHTS  51,070   51,070  
   GOODWILL  14,816   14,816  
   OTHER INTANGIBLE ASSETS, net  47   4,275   4,322  
   OTHER NONCURRENT ASSETS, net  48   36   29   523   636  







 
   Total Assets  $46,769   $26,688   $33,571   $40,224   $128,005   ($167,176 ) $108,081  







 
LIABILITIES AND STOCKHOLDERS' EQUITY 
   Accounts payable  $   $   $   $   $988   $   $988  
   Accrued expenses and other current 
     liabilities  395   212   211   279   3,097   4,194  
   Deferred income taxes  657   657  
   Current portion of long-term debt  404   2,388   2,792  







     Total current liabilities  395   212   211   683   7,130   8,631  







   LONG-TERM DEBT, less current portion  4,254   6,317   3,698   6,002   2,714   22,985  
   DEFERRED INCOME TAXES  26,644   26,644  
   OTHER NONCURRENT LIABILITIES  605   51   7,266   7,922  
   MINORITY INTEREST  384   384  
 
STOCKHOLDERS' EQUITY 
   Common stock  25   25  
   Other stockholders' equity  41,490   20,108   29,662   33,539   83,867   (167,176 ) 41,490  







     Total Stockholders' Equity  41,515   20,108   29,662   33,539   83,867   (167,176 ) 41,515  







 
     Total Liabilities and Stockholders' 
         Equity  $46,769   $26,688   $33,571   $40,224   $128,005   ($167,176 ) $108,081  







20


COMCAST CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 2004
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(Unaudited)

Comcast Corporation
Condensed Consolidating Balance Sheet
As of December 31, 2003
 
Comcast
Parent
CCCL
Parent
CCCH
Parent
Combined
CCHMO
Parents
Non-
Guarantor
Subsidiaries
Elimination
and
Consolidation
Adjustments
Consolidated
Comcast
Corporation







ASSETS                
   Cash and cash equivalents  $   $   $   $   $1,550   $   $1,550  
   Investments  50   2,443   2,493  
   Accounts receivable, net  907   907  
   Other current assets  15   438   453  







     Total current assets  65   5,338   5,403  







   INVESTMENTS  14,818   14,818  
   INVESTMENTS IN AND AMOUNTS DUE  
     FROM SUBSIDIARIES ELIMINATED  
     UPON CONSOLIDATION  46,268   26,643   33,138   39,919   19,678   (165,646 )
   PROPERTY AND EQUIPMENT, net  7   4   18,462   18,473  
   FRANCHISE RIGHTS  51,050   51,050  
   GOODWILL  14,841   14,841  
   OTHER INTANGIBLE ASSETS, net  3,859   3,859  
   OTHER NONCURRENT ASSETS, net  87   43   30   555   715  







 
     Total Assets  $46,427   $26,686   $33,172   $39,919   $128,601   ($165,646 ) $109,159  







 
LIABILITIES AND STOCKHOLDERS' EQUITY 
   Accounts payable  $   $   $   $   $1,251   $   $1,251  
   Accrued expenses and other current 
     liabilities  391   99   76   316   3,681   4,563  
   Deferred income taxes  679   679  
   Current portion of long-term debt  303   314   2,544   3,161  







     Total current liabilities  391   402   76   630   8,155   9,654  







   LONG-TERM DEBT, less current portion  3,994   6,606   3,498   6,151   3,586   23,835  
   DEFERRED INCOME TAXES  25,900   25,900  
   OTHER NONCURRENT LIABILITIES  380   7,436   7,816  
   MINORITY INTEREST  292   292  
 
STOCKHOLDERS' EQUITY 
   Common stock  25   25  
   Other stockholders' equity  41,637   19,678   29,598   33,138   83,232   (165,646 ) 41,637  







     Total Stockholders' Equity  41,662   19,678   29,598   33,138   83,232   (165,646 ) 41,662  







 
     Total Liabilities and Stockholders' 
        Equity  $46,427   $26,686   $33,172   $39,919   $128,601   ($165,646 ) $109,159  







21


COMCAST CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 2004
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(Unaudited)

Comcast Corporation
Condensed Consolidating Statement of Operations
For the Three Months Ended June 30, 2004
 
Comcast
Parent
CCCL
Parent
CCCH
Parent
Combined
CCHMO
Parents
Non-
Guarantor
Subsidiaries
Elimination
and
Consolidation
Adjustments
Consolidated
Comcast
Corporation







REVENUES                
   Service revenues  $   $   $   $   $5,066   $   $5,066  
   Management fee revenue  104   40   64   64   (272 )







   104   40   64   64   5,066   (272 ) 5,066  







 
COSTS AND EXPENSES 
   Operating (excluding depreciation)  1,794   1,794  
   Selling, general and administrative  49   40   64   64   1,375   (272 ) 1,320  
   Depreciation  813   813  
   Amortization  287   287  







   49   40   64   64   4,269   (272 ) 4,214  







 
OPERATING INCOME  55   797   852  
 
OTHER INCOME (EXPENSE) 
   Interest expense  (61 ) (115 ) (77 ) (100 ) (131 ) (484 )
   Investment income, net  151   151  
   Equity in net (losses) income of 
      affiliates  266   339   77   142   258   (1,102 ) (20 )
   Other income  12   12  







   205 224 42 290 (1,102 ) (341 )







 
INCOME (LOSS) BEFORE INCOME TAXES 
   AND MINORITY INTEREST  260   224   42   1,087   (1,102 ) 511  
 
INCOME TAX (EXPENSE) BENEFIT  2   41   27   35   (339 ) (234 )







 
INCOME (LOSS) BEFORE MINORITY INTEREST  262   265   27   77   748   (1,102 ) 277  
 
MINORITY INTEREST  (15 ) (15 )







 
NET INCOME (LOSS)  $262   $265   $27   $77   $733   ($1,102 ) $262  







22


COMCAST CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 2004
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(Unaudited)

Comcast Corporation
Condensed Consolidating Statement of Operations
For the Three Months Ended June 30, 2003
 
Comcast
Parent
CCCL
Parent
CCCH
Parent
Combined
CCHMO
Parents
Non-
Guarantor
Subsidiaries
Elimination
and
Consolidation
Adjustments
Consolidated
Comcast
Corporation







REVENUES                
   Service revenues  $   $   $   $   $4,594   $   $4,594  
   Management fee revenue  92   34   58   58   (242 )







   92   34   58   58   4,594   (242 ) 4,594  







 
COSTS AND EXPENSES 
   Operating (excluding depreciation)  1,753   1,753  
   Selling, general and administrative  38   34   58   58   1,283   (242 ) 1,229  
   Depreciation  816   816  
   Amortization  371   371  







   38   34   58   58   4,223   (242 ) 4,169  







 
OPERATING INCOME  54   371   425  
 
OTHER INCOME (EXPENSE) 
   Interest expense  (79 ) (139 ) (93 ) (77 ) (102 ) (490 )
   Investment loss, net  (6 ) (6 )
   Equity in net (losses) income of
      affiliates
  (5 ) 272   (70 ) (20 ) 183   (359 ) 1  
   Other income  22   22  







   (84 ) 133   (163 ) (97 ) 97   (359 ) (473 )







 
INCOME (LOSS) FROM CONTINUING  
   OPERATIONS BEFORE INCOME TAXES  
   AND MINORITY INTEREST  (30 ) 133   (163 ) (97 ) 468   (359 ) (48 )
 
INCOME TAX (EXPENSE) BENEFIT  8   49   32   27   (129 ) (13 )







 
INCOME (LOSS) FROM CONTINUING  
OPERATIONS BEFORE MINORITY
INTEREST
  (22 ) 182   (131 ) (70 ) 339   (359 ) (61 )
 
MINORITY INTEREST  (32 ) (32 )







 
INCOME (LOSS) FROM  
CONTINUING OPERATIONS  (22 ) 182   (131 ) (70 ) 307   (359 ) (93 )
 
INCOME FROM DISCONTINUED  
   OPERATIONS, net of tax  71   71  







 
NET INCOME (LOSS)  ($22 ) $182   ($131 ) ($70 ) $378   ($359 ) ($22 )







23


COMCAST CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 2004
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(Unaudited)

Comcast Corporation
Condensed Consolidating Statement of Operations
For the Six Months Ended June 30, 2004
 
Comcast
Parent
CCCL
Parent
CCCH
Parent
Combined
CCHMO
Parents
Non-
Guarantor
Subsidiaries
Elimination
and
Consolidation
Adjustments
Consolidated
Comcast
Corporation







REVENUES                
   Service revenues  $   $   $   $   $9,974   $   $9,974  
   Management fee revenue  202   79   125   125   (531 )







   202   79   125   125   9,974   (531 ) 9,974  







 
COSTS AND EXPENSES 
   Operating (excluding depreciation)  3,663   3,663  
   Selling, general and administrative  93   79   125   125   2,735   (531 ) 2,626  
   Depreciation  1,611   1,611  
   Amortization  563   563  







   93   79   125   125   8,572   (531 ) 8,463  







 
OPERATING INCOME  109   1,402   1,511  
 
OTHER INCOME (EXPENSE) 
   Interest expense  (163 ) (242 ) (153 ) (201 ) (225 ) (984 )
   Investment income, net  142   142  
   Equity in net (losses) income of 
      affiliates  362   607   170   301   413   (1,890 ) (37 )
   Other income  19   19  







   199   365   17   100   349   (1,890 ) (860 )







 
INCOME (LOSS) BEFORE INCOME TAXES 
   AND MINORITY INTEREST  308   365   17   100   1,751   (1,890 ) 651  
 
INCOME TAX (EXPENSE) BENEFIT  19   85   54   70   (538 ) (310 )







 
INCOME (LOSS) BEFORE MINORITY INTEREST  327   450   71   170   1,213   (1,890 ) 341  
 
MINORITY INTEREST  (14 ) (14 )







 
NET INCOME (LOSS)  $327   $450   $71   $170   $1,199   ($1,890 ) $327  







24


COMCAST CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 2004
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(Unaudited)

Comcast Corporation
Condensed Consolidating Statement of Operations
For the Six Months Ended June 30, 2003
 
Comcast
Parent
CCCL
Parent
CCCH
Parent
Combined
CCHMO
Parents
Non-
Guarantor
Subsidiaries
Elimination
and
Consolidation
Adjustments
Consolidated
Comcast
Corporation







REVENUES                
   Service revenues  $   $   $   $   $9,060   $   $9,060  
   Management fee revenue  187   71   116   116   (490 )







   187   71   116   116   9,060   (490 ) 9,060  







 
COSTS AND EXPENSES 
   Operating (excluding depreciation)  3,564   3,564  
   Selling, general and administrative  76   71   116   116   2,567   (490 ) 2,456  
   Depreciation  1,596   1,596  
   Amortization  725   725  







   76   71   116   116   8,452   (490 ) 8,341  







 
OPERATING INCOME  111   608   719  
 
OTHER INCOME (EXPENSE) 
   Interest expense  (123 ) (274 ) (206 ) (192 ) (219 ) (1,014 )
   Investment loss, net  (229 ) (229 )
   Equity in net (losses) income of 
      affiliates  (310 ) 501   (407 ) (282 ) 307   175   (16 )
   Other income  35   35  







   (433 ) 227   (613 ) (474 ) (106 ) 175   (1,224 )







INCOME (LOSS) FROM CONTINUING  
OPERATIONS BEFORE INCOME TAXES
AND MINORITY INTEREST
  (322 ) 227   (613 ) (474 ) 502   175   (505 )
 
INCOME TAX (EXPENSE) BENEFIT  3   96   72   67   (110 ) 128  







 
INCOME (LOSS) FROM CONTINUING  
OPERATIONS BEFORE MINORITY
INTEREST
  (319 ) 323   (541 ) (407 ) 392   175   (377 )
 
MINORITY INTEREST  (71 ) (71 )







 
INCOME (LOSS) FROM CONTINUING 
   OPERATIONS  (319 ) 323   (541 ) (407 ) 321   175   (448 )
 
INCOME FROM DISCONTINUED OPERATIONS, 
   net of tax  129   129  







 
NET INCOME (LOSS)  ($319 ) $323   ($541 ) ($407 ) $450   $175   ($319 )







25


COMCAST CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 2004
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(Unaudited)

Comcast Corporation
Condensed Consolidating Statement of Cash Flows
For the Six Months Ended June 30, 2004
 
Comcast
Parent
CCCL
Parent
CCCH
Parent
Combined
CCHMO
Parents
Non-
Guarantor
Subsidiaries
Elimination
and
Consolidation
Adjustments
Consolidated
Comcast
Corporation







OPERATING ACTIVITIES                
Net income (loss)  $327   $450   $71   $170   $1,199   ($1,890 ) $327  
Adjustments to reconcile net income (loss) 
  to net cash provided by (used in) 
  operating activities: 
   Depreciation  1,611   1,611  
   Amortization  563   563  
   Non-cash interest (income) expense, net  54   7   (52 ) 16   25  
   Equity in net (income) losses of 
     affiliates  (362 ) (607 ) (170 ) (301 ) (413 ) 1,890   37  
   Losses (gains) on investments and other 
     (income) expense, net  (125 ) (125 )
   Non-cash contribution expense  23   23  
   Minority interest  14   14  
   Deferred income taxes  155   155  
 
   Changes in operating assets and 
    liabilities, net of effects of 
    acquisitions and divestitures 
     Change in accounts receivable, net  (8 ) (8 )
     Change in accounts payable  (263 ) (263 )
     Change in other operating assets and 
       liabilities  125   120   136   (37 ) (70 ) 274  







 
     Net cash provided by (used in) operating 
       activities  144   (30 ) 37   (220 ) 2,702   2,633  







 
FINANCING ACTIVITIES 
   Proceeds from borrowings  654   400   4   1,058  
   Retirements and repayments of debt  (350 ) (561 ) (200 ) (6 ) (500 ) (1,617 )
   Repurchase of common stock  (511 ) (511 )
   Other  8   38   46  







     Net cash provided by (used in) 
       financing activities  (199 ) (561 ) 200   (6 ) (458 ) (1,024 )







 
INVESTING ACTIVITIES 
Net transactions with affiliates  55   591   (237 ) 226   (635 )
Acquisitions, net of cash acquired  (336 ) (336 )
Proceeds from sales (purchases) of short-term 
   investments, net  (15 ) (15 )
Proceeds from sales of investments  51   51  
Purchases of investments  (106 ) (106 )
Capital expenditures  (1,732 ) (1,732 )
Additions to intangible and other noncurrent
   assets
  (453 ) (453 )
Proceeds from settlement of contract of
   acquired company
  26   26  







   Net cash (used in) provided by investing 
     activities  55   591   (237 ) 226   (3,200 ) (2,565 )







 
DECREASE IN CASH AND CASH 
     EQUIVALENTS  (956 ) (956 )
CASH AND CASH EQUIVALENTS,
     beginning of period
  1,550   1,550  







CASH AND CASH EQUIVALENTS,
     end of period
  $   $   $   $   $594   $   $594  







26


COMCAST CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 2004
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONCLUDED
(Unaudited)

Comcast Corporation
Condensed Consolidating Statement of Cash Flows
For the Six Months Ended June 30, 2003
 
Comcast
Parent
CCCL
Parent
CCCH
Parent
Combined
CCHMO
Parents
Non-
Guarantor
Subsidiaries
Elimination
and
Consolidation
Adjustments
Consolidated
Comcast
Corporation







OPERATING ACTIVITIES                
Net income (loss)  ($319 ) $323   ($541 ) ($407 ) $450   $175   ($319 )
Income from discontinued operations  (129 ) (129 )







Income (loss) from continuing operations  (319 ) 323   (541 ) (407 ) 321   175   (448 )
 
Adjustments to reconcile net income (loss) 
from continuing operations to net cash 
provided by (used in) operating 
activities from continuing operations: 
   Depreciation  1,596   1,596  
   Amortization  725   725  
   Non-cash interest (income) expense, net  3   (88 ) 24   (61 )
   Equity in net (income) losses of 
      affiliates  310   (501 ) 407   282   (307 ) (175 ) 16  
   Losses (gains) on investments and other 
     (income) expense, net  257   257  
   Minority interest  20   20  
   Deferred income taxes  (226 ) (226 )
   Proceeds from sales of trading securities  85   85  
   Changes in operating assets and 
    liabilities, net of effects of 
    acquisitions and divestitures: 
     Change in accounts receivable, net  (6 ) (6 )
     Change in accounts payable  (183 ) (183 )
     Change in other operating assets and 
       liabilities  62   (8 ) 29   (160 ) 13   (64 )







     Net cash provided by (used in) operating 
       activities from continuing operations .  53   (186 ) (102 ) (373 ) 2,319   1,711  







 
FINANCING ACTIVITIES 
   Proceeds from borrowings  8,138   600   110   8,848  
   Retirements and repayments of debt  (2,050 ) (1,554 ) (6,250 ) (1,764 ) 75   (11,543 )
   Other  (3 ) (3 )







     Net cash provided by (used in) 
       financing activities from continuing 
       operations  6,088   (954 ) (6,250 ) (1,764 ) 182   (2,698 )







 
INVESTING ACTIVITIES 
Net transactions with affiliates  (6,141 ) 1,140   6,352   2,137   (3,488 )
Acquisitions, net of cash acquired  (22 ) (22 )
Proceeds from sales (purchases) of short-term 
   investments, net  (20 ) (20 )
Proceeds from sales, settlements and 
   restructuring of investments and 
   assets held for sale  3,592   3,592  
Purchases of investments  (130 ) (130 )
Capital expenditures  (2,012 ) (2,012 )
Additions to intangible and other noncurrent 
   assets  (110 ) (110 )







   Net cash (used in) provided by investing 
     activities from continuing operations  (6,141 ) 1,140   6,352   2,137   (2,190 ) 1,298  







 
INCREASE IN CASH AND CASH
    EQUIVALENTS
  311   311  
CASH AND CASH EQUIVALENTS, 
    beginning of period  505   505  







 
CASH AND CASH EQUIVALENTS, 
    end of period  $   $   $   $   $816   $   $816  







27


COMCAST CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 2004

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

Overview

        We are principally involved in the management and operation of broadband communications networks (our cable segment) and in the management of programming content over cable and satellite television networks (our content segment). During the six months ended June 30, 2004, we received over 95% of our revenue from our cable segment, primarily through monthly subscriptions to our video, high-speed Internet and phone services, as well as from advertising. Subscribers typically pay us monthly, based on rates and related charges that vary according to their chosen level of service and the type of equipment they use. Revenue from our content segment is derived from the sale of advertising time and affiliation agreements with cable and satellite television companies.

        Highlights for the six months ended June 30, 2004 included the following:

 

Revenue growth of 10.1% in our cable segment compared to the same period in 2003, driven by continued growth in our new services, such as digital cable and high-speed Internet;

 

Operating income before depreciation and amortization growth of 20.6% in our cable segment compared to the same period in 2003, resulting from our revenue growth and efficiencies achieved through integration of the Broadband operations;

 

Refinancing three of our previously existing revolving credit facilities with a new $4.5 billion, five-year revolving bank credit facility; and

 

Repurchases of approximately 18.5 million shares of our Class A Special common stock for aggregate consideration on a trade date basis of $523 million pursuant to our Board authorized repurchase program.


        The following provides the details of these highlights and insights into our financial statements, including discussions of our results of operations and our liquidity and capital resources.

Business Developments

        On July 28, 2004, we and Liberty Media Corporation (“Liberty”) completed our previously announced agreement in which Liberty redeemed 120.3 million shares of its Series A common stock we held in exchange for 100% of the stock of a Liberty subsidiary that held Liberty’s 10% ownership interest in E! Entertainment Television, Inc., its 100% ownership interest in International Channel Networks, all of Liberty’s rights, benefits and obligations under a TCI Music contribution agreement, and approximately $545 million of cash (the “Liberty transaction”). The Liberty transaction also resolved all litigation pending between us and Liberty regarding the TCI Music contribution agreement, which we assumed as part of our acquisition of Broadband in November 2002.

        Refer to Note 4 to our financial statements included in Item 1 for a discussion of our acquisitions and other significant events.

Results of Continuing Operations

        Revenues

        Consolidated revenues for the three and six month interim periods in 2004 increased $472 million and $914 million, respectively, from the same periods in 2003. Of these increases, $459 million and $874 million relate to our cable segment, which is discussed separately below. The remaining increases are primarily the result of our content segment, which achieved combined revenue growth of 25.3% and 23.4%, respectively, during the three and six month interim periods in 2004 compared to the same periods in 2003. These increases in our content segment were the result of increases in distribution revenue and advertising revenue.

        Operating, selling, general and administrative expenses

        Consolidated operating, selling, general and administrative expenses for the three and six month interim periods in 2004 increased $132 million and $269 million, respectively, from the same periods in 2003. Of these increases, $136 million and $253 million, respectively, relate to our cable segment, which is discussed separately below.

        Depreciation

        Depreciation expense decreased $3 million and increased $15 million, respectively, for the three and six month interim periods in 2004 compared to the same periods in 2003. The slight changes for the interim periods are primarily related to our cable segment and are principally due to the higher level of disposals associated with our cable network upgrade program in 2003.

28


COMCAST CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 2004

        Amortization

        Amortization expense decreased $84 million and $162 million, respectively, for the three and six month interim periods in 2004 compared to the same periods in 2003. These decreases are primarily related to our cable segment and are principally due to decreases in the amortization of our franchise related customer relationship intangible assets. In the fourth quarter of 2003, we reduced the value of these intangible assets as a result of obtaining updated valuation reports, which resulted in lower amortization expense.

_________________

Cable Segment Operating Results

The following table presents our cable segment operating results (dollars in millions):

Three Months Ended
June 30,
Increase/(Decrease)
2004 2003 $ %




Video  $3,247   $3,037   $210   6.9 %
High-speed Internet  763   548   215   39.2
Phone  177   205   (28 ) (13.7 )
Advertising sales  330   285   45   15.8
Other  158   153   5   3.3
Franchise fees  163   151   12   7.9




     Revenues  4,838   4,379   459   10.5
Operating, selling, general and administrative expenses  2,918   2,782   136   4.9




Operating income before depreciation and amortization (a)  $1,920   $1,597   $323   20.2 %




 
Six Months Ended
June 30,
Increase/(Decrease)
2004 2003 $ %




Video  $6,428   $6,018   $410   6.8 %
High-speed Internet  1,461   1,040   421   40.5
Phone  355   430   (75 ) (17.4 )
Advertising sales  599   521   78   15.0
Other  320   300   20   6.7
Franchise fees  322   302   20   6.7




     Revenues  9,485   8,611   874   10.1
Operating, selling, general and administrative expenses  5,846   5,593   253   4.5




Operating income before depreciation and amortization (a)  $3,639   $3,018   $621   20.6 %





29


COMCAST CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 2004

        The following tables present our subscriber and monthly average revenue statistics on a pro forma basis. The pro forma adjustments reflect the addition of approximately 109,000 subscribers acquired in various small acquisitions between June 2003 and June 2004. The impact of these acquisitions on our segment operating results was not material (subscribers in thousands).

June 30, Increase/(Decrease)
2004 2003 # %




Video subscribers  21,477   21,467   10   -  
High-speed Internet subscribers  6,005   4,389   1,616   36.8 %
Phone subscribers  1,225   1,367   (142 ) (10.4 %)
 
Three Months Ended
June 30,
Increase/(Decrease)
2004 2003 $ %




Monthly average revenue per video subscriber  $50.31 $47.22 $3.09 6.5 %
Monthly average revenue per high-speed Internet subscriber  $43.52 $43.33 $0.19 0.4 %
Monthly average revenue per phone subscriber  $47.71 $49.17 ($1.46 ) (3.0 %)
 
Six Months Ended
June 30,
Increase/(Decrease)
2004 2003 $ %




Monthly average revenue per video subscriber  $49.85 $46.85 $3.00 6.4 %
Monthly average revenue per high-speed Internet subscriber  $43.13 $43.26 ($0.13 ) (0.3 %)
Monthly average revenue per phone subscriber  $47.55 $51.05 ($3.50 ) (6.9 %)

(a)

Operating income before depreciation and amortization is defined as operating income before depreciation and amortization, impairment charges, if any, related to fixed and intangible assets and gains or losses from the sale of assets, if any. As such, it eliminates the significant level of non-cash depreciation and amortization expense that results from the capital intensive nature of our businesses and intangible assets recognized in business combinations, and is unaffected by our capital structure or investment activities. Our management and Board of Directors use this measure in evaluating our consolidated operating performance and the operating performance of all of our operating segments. This metric is used to allocate resources and capital to our operating segments and is a significant component of our annual incentive compensation programs. We believe that this measure is also useful to investors as it is one of the bases for comparing our operating performance with other companies in our industries, although our measure may not be directly comparable to similar measures used by other companies. Because we use operating income before depreciation and amortization as the measure of our segment profit or loss, we reconcile it to operating income, the most directly comparable financial measure calculated and presented in accordance with Generally Accepted Accounting Principles (GAAP), in the business segment footnote to our financial statements. This measure should not be considered as a substitute for operating income (loss), net income (loss), net cash provided by operating activities or other measures of performance or liquidity reported in accordance with GAAP.


30


COMCAST CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 2004

        Revenues

        Video revenue consists of our basic, expanded basic, premium, pay-per-view, equipment and digital cable services. The increases in video revenue for the interim periods from 2003 to 2004 are primarily due to increases in monthly average revenue per subscriber as a result of rate increases in our traditional video service, growth in digital subscribers, and repricing and repackaging of the digital and premium channel services in the Broadband systems. From June 30, 2003 to June 30, 2004, we added approximately 10,000 basic subscribers and approximately 1.1 million digital subscribers, or a 15.8% increase in digital subscribers. We expect continued growth in our video services revenue.

        The increases in high-speed Internet revenue for the interim periods from 2003 to 2004 are primarily due to the addition of approximately 1.6 million high-speed Internet subscribers from June 30, 2003 to June 30, 2004, or a 36.8% increase in high-speed Internet subscribers, offset by a slight decrease in monthly average revenue per subscriber during the six month interim period. We expect continued high-speed Internet revenue growth as overall demand for our services continues to increase.

        The decreases in phone revenue for the interim periods from 2003 to 2004 are primarily as a result of our focus on operating efficiencies to drive profitability in the phone business, rather than focusing on subscriber growth. As a result, from June 30, 2003 to June 30, 2004, our phone subscribers decreased by approximately 142,000 subscribers.

        The increases in advertising sales revenue for the interim periods from 2003 to 2004 are primarily due to the effects of growth in regional/national advertising as a result of the continuing success of our regional interconnects and a stronger local advertising market.

        Other revenue includes installation revenues, guide revenues, commissions from electronic retailing, revenue from our regional programming networks, commercial data services and revenue from other product offerings.

        Expenses

        Total operating, selling, general and administrative expenses increased for the interim periods from 2003 to 2004 primarily as a result of increases in labor and other volume related operating expenses associated with the growth in our high-speed Internet and digital cable services. Offsetting these increases were cost efficiencies generated from the integration of Broadband.  Additionally, customer service expenses slightly declined because we no longer outsource Broadband’s customer service operations.

Consolidated Income (Expense) Items

        Interest Expense

        The decreases in interest expense for the interim periods from 2003 to 2004 are due to our decreased amount of debt outstanding as a result of our debt reduction during 2003. The decreases for the interim periods from 2003 to 2004 were offset somewhat by the effects of the write-off of unamortized debt issue costs to interest expense in connection with the refinancing of our previously existing revolving credit facilities and by the early redemption of certain of the Comcast exchangeable notes. The cost associated with the refinancing totaled $38 million during the six months ended June 30, 2004 and the cost associated with the redemption totaled $29 million during the three and six months ended June 30, 2004. The decrease for both interim periods from 2003 to 2004 was also offset by the effects of our adoption of SFAS No. 150, “Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity,” on July 1, 2003 on a prospective basis. As a result of the adoption of SFAS No. 150, interest expense for the three and six months ended June 30, 2004 includes $25 million and $50 million, respectively, of dividends on a subsidiary’s preferred stock, previously classified as minority interest.


_________________

31


COMCAST CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 2004

        Investment Income (Loss), Net
        Investment income (loss), net for the interim periods includes the following (in millions):

           
    Three Months Ended
June 30,
Six Months Ended
June 30,
    2004   2003   2004   2003  




Interest and dividend income  $26   $49   $43   $83  
Gains (losses) on sales and exchanges of investments, net  (1 ) 1   1   23  
Investment impairment losses  (3 ) (15 ) (3 ) (70 )
Mark to market adjustments on trading securities  (53 ) 307   (227 ) 292  
Mark to market adjustments on derivatives related 
     to trading securities  200   (296 ) 255   (306 )
Mark to market adjustments on derivatives and hedged items  (18 ) (52 ) 73   (251 )




     Investment income (loss), net  $151   ($6 ) $142   ($229 )





        We have entered into derivative financial instruments that we account for at fair value and which economically hedge the market price fluctuations in the common stock of certain of our investments accounted for as trading securities. Investment income (loss), net includes the fair value adjustments related to our trading securities and derivative financial instruments. The change in the fair value of our investments accounted for as trading securities was substantially offset by changes in the fair value of the related derivatives, except for the mark to market adjustments on our investment in Sprint, 116 million shares of Liberty and 6 million shares of Liberty International for the three and six months ended June 30, 2004. 

        During the three months ended June 30, 2004, investment income (loss), net includes $224 million of investment income related to the decrease in the fair value of the derivative component of the ZONES debt. This fair value adjustment results principally from the change in the common stock underlying the ZONES debt from the non-dividend paying Sprint PCS tracking stock to the dividend paying Sprint FON common stock as a result of the elimination by Sprint of its tracking stock in April 2004. In the future, we expect that changes in the fair value of the derivative component of the ZONES debt will be substantially offset by changes in the fair value of the Sprint FON common stock we hold and account for as a trading security.

        We are exposed to changes in the fair value of approximately 116 million shares of Liberty common stock through the closing date of the Liberty transaction and we will continue to be exposed to changes in the fair value of approximately 6 million shares of Liberty International common stock we hold and account for as trading securities because we have not entered into a corresponding derivative to hedge either of these market exposures.

        We are also exposed to changes in the fair value of the derivative component of the Comcast exchangeable notes we have outstanding since the underlying 16 million shares of Comcast Class A Special common stock we hold in treasury are carried at our historical cost and are not adjusted for changes in fair value.

        Accordingly, our investment income (loss), net is affected by fluctuations in the fair values of the Liberty common stock, the Liberty International common stock and the derivative component of the Comcast exchangeable notes. Investment income (loss), net for the three and six months ended June 30, 2004 includes losses of $16 million and $45 million, respectively, related to these financial instruments compared to losses of $57 million and $254 million, respectively, during the same periods in 2003.

        Income Tax (Expense) Benefit

        The changes in income tax (expense) benefit for the interim periods from 2003 to 2004 are primarily the result of the effects of changes in our income (loss) from continuing operations before taxes and minority interest.

        Minority Interest

        The changes in minority interest for the interim periods from 2003 to 2004 are attributable to the effects of our adoption of SFAS No. 150 on July 1, 2003, upon

32


COMCAST CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 2004

which we now record our subsidiary preferred dividends, previously included within minority interest, to interest expense.

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

Liquidity and Capital Resources

        We believe that we will be able to meet our current and long-term liquidity and capital requirements, including fixed charges, through our cash flows from operating activities, existing cash, cash equivalents and investments, through available borrowings under our existing credit facilities, and through our ability to obtain future external financing.

        Cash and Cash Equivalents

        We have traditionally maintained significant levels of cash and cash equivalents to meet our short-term liquidity requirements. As of June 30, 2004, our cash and cash equivalents were $594 million, substantially all of which is unrestricted.

        Investments

        We consider investments that we determine to be non-strategic, highly-valued, or both, to be a significant source of liquidity. We consider our investments in the following to be potential sources of liquidity:

 

$1.5 billion in Time Warner Inc. common equivalent preferred stock,

 

21% interest in Time Warner Cable Inc., and

 

interests in certain cable television partnerships.

        We do not have any significant contractual funding commitments with respect to any of our investments.

        Refer to Note 5 to our financial statements included in Item 1 for a discussion of our investments.

        Available Borrowings Under Credit Facilities

        We have traditionally maintained significant availability under our lines of credit to meet our short-term liquidity requirements. In January 2004, we refinanced three of our existing revolving credit facilities with a new $4.5 billion, five-year revolving bank credit facility due January 2009. As of June 30, 2004, amounts available under our lines of credit totaled $3.898 billion. Refer to Note 6 to our consolidated financial statements included in Item 1 for further discussion about our new credit facility.

        Commercial Paper

        In June 2004, we entered into a new commercial paper program to provide a lower cost borrowing source of liquidity to fund our short-term working capital requirements. The program allows for a maximum of $2.25 billion of commercial paper to be issued at any one time. Our revolving bank credit facility supports this program. As of June 30, 2004, amounts outstanding under the program totaled $304 million with a weighted average interest rate of 1.74%.

        Financing

        As of June 30, 2004 and December 31, 2003, our debt, including capital lease obligations, was $25.777 billion and $26.996 billion, respectively. The $1.219 billion decrease from December 31, 2003 to June 30, 2004 results principally from the effects of our net debt repayments during the six months ended June 30, 2004. Included in our debt as of June 30, 2004 and December 31, 2003 was current portion of long-term debt of $2.792 billion and $3.161 billion, respectively.

        Excluding the effects of interest rate risk management instruments, 9.2% and 8.2% of our total debt as of June 30, 2004 and December 31, 2003, respectively, was at variable rates.

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

        Refer to Note 6 to our financial statements included in Item 1 for a discussion of our long-term debt.

_________________


33


COMCAST CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 2004

Statement of Cash Flows

        Cash and cash equivalents decreased $956 million as of June 30, 2004 from December 31, 2003. The decrease in cash and cash equivalents resulted from cash flows from operating, financing and investing activities, as explained below.

        Net cash provided by operating activities from continuing operations amounted to $2.633 billion for the six months ended June 30, 2004, due principally to our operating income before depreciation and amortization (see “Results of Continuing Operations”), the effects of interest and income tax payments, changes in operating assets and liabilities as a result of the timing of receipts and disbursements, and a federal income tax refund of approximately $536 million.

        Net cash used in financing activities from continuing operations was $1.024 billion for the six months ended June 30, 2004 and consists primarily of retirements and repayments of debt and repurchases of common stock of $511 million.

        During the six months ended June 30, 2004, we repaid $1.617 billion of our debt, consisting of:

 

$567 million of our senior and medium term notes,

 

$500 million on certain of our revolving credit facilities,

 

$400 million of our Comcast exchangeable notes,

 

$50 million under our commercial paper program and

 

$100 million of capital leases and other.

        Net cash used in investing activities from continuing operations was $2.565 billion for the six months ended June 30, 2004. During this period, net cash used in investing activities from continuing operations includes capital expenditures of $1.732 billion, additions to intangible and other noncurrent assets of $453 million and acquisitions, net of cash acquired, of $336 million.

34


COMCAST CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 2004

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no significant changes to the information required under this Item from what was disclosed in our 2003 Form 10-K.

ITEM 4. CONTROLS AND PROCEDURES

Our chief executive officer and our co-chief financial officers, after evaluating the effectiveness of our disclosure controls and procedures (as defined in the Securities Exchange Act of 1934 Rules 13a-15(e) or 15d-15(e)) as of the end of the period covered by this report, have concluded, based on the evaluation of these controls and procedures required by paragraph (b) of Exchange Act Rules 13a-15 or 15d-15, that our disclosure controls and procedures were effective to ensure that material information relating to us and our consolidated subsidiaries would be made known to them by others within those entities.

Changes in internal control over financial reporting. There were no changes in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Exchange Act Rules 13a-15 or 15d-15 that occurred during our last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

        Refer to Note 9 to our condensed financial statements included in Item 1 of this Quarterly Report on Form 10-Q for a discussion of recent developments related to our legal proceedings.

ITEM 2. CHANGES IN SECURITIES, USE OF PROCEEDS AND ISSUER PURCHASES OF EQUITY SECURITIES

        A summary of our repurchases during the quarter under the $1 billion repurchase program, authorized by our Board of Directors in December 2003, are as follows:

PURCHASES OF EQUITY SECURITIES

Period Total Number of
Shares Purchased
Average Price
per Share
Total Number of Shares
Purchased as Part of
Publicly
Announced Program
Maximum Dollar Value
Shares that May Yet
Be Purchased
Under the Program
April 1-30, 2004  225,081   $29.61   225,000   $943,336,937  
May 1-31, 2004  5,421,558   $27.77   5,102,435   $801,614,102  
June 1-30, 2004  12,901,463   $28.23   12,445,100   $450,587,186




Total  18,548,102   $28.11   17,772,535   $450,587,186




        The total number of shares purchased includes approximately 776,000 shares received in the administration of employee equity compensation plans. On July 20, 2004, our Board of Directors authorized a $1 billion increase to our stock repurchase program. The table above does not reflect this additional authorization.

35


COMCAST CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 2004

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

At our Annual Meeting of Shareholders on May 26, 2004, the shareholders approved, or did not approve, the following proposals, in each case consistent with the unanimous recommendations of our Board of Directors (numbers represent the aggregate votes cast, with holders of our Class A Common Stock entitled to 0.2086 votes per share and holders of our Class B Common Stock entitled to 15 votes per share):

To elect the following nominees to serve as our directors for one-year terms.

Director For Withheld
          Ralph J. Roberts 367,456,483 16,962,357
          C. Michael Armstrong 366,855,778 17,563,062
          Brian L. Roberts 363,982,792 20,436,048
          Julian A. Brodsky 367,699,589 16,719,251
          S. Decker Anstrom 353,974,488 30,444,352
          Kenneth J. Bacon 374,282,825 10,136,015
          Sheldon M. Bonovitz 364,936,244 19,482,596
          Joseph L. Castle, II 371,091,789 13,327,051
          J. Michael Cook 374,075,868 10,342,972
          Dr. Judith Rodin 370,333,671 14,085,169
          Michael I. Sovern 370,974,391 13,444,449

To ratify the appointment of Deloitte & Touche LLP as our independent auditors for the 2004 fiscal year.

For Against Abstain
376,522,645 5,463,804 2,432,391

To approve the 2002 Restricted Stock Plan.

For Against Abstain
330,987,385 11,873,290 3,161,168

To approve an amendment to our Articles of Incorporation.

For Against Abstain
365,142,269 14,601,258 4,675,313

36


COMCAST CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 2004

To approve a shareholder proposal to have independent directors constitute two-thirds of our Board of Directors.

For Against Abstain
85,955,317 256,518,690 3,547,836

        To approve a shareholder proposal to disclose political contributions.

For Against Abstain
14,881,932 310,703,163 20,436,748

To approve a shareholder proposal to nominate two directors for every open directorship.

For Against Abstain
20,742,968 321,538,971 3,739,904

To approve a shareholder proposal to limit compensation for senior executives.

For Against Abstain
17,476,392 324,942,538 3,602,913

To approve a shareholder proposal to adopt a recapitalization plan.

For Against Abstain
105,704,421 234,902,481 5,414,941

37


COMCAST CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 2004

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)

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


3.1

Restated Articles of Incorporation of Comcast Corporation.


3.2

Restated By-Laws of Comcast Corporation.


10.1

Consulting Agreement between Comcast Corporation and C. Michael Armstrong, dated as of May 26, 2004.


10.2

First Amendment to Consulting Agreement between Comcast Corporation and C. Michael Armstrong, dated as of May 26, 2004.


31

Certifications of Chief Executive Officer and Co-Chief Financial Officers pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.


32

Certifications of Chief Executive Officer and Co-Chief Financial Officers pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.


(b)

Reports on Form 8-K:


(i)

We filed a Current Report on Form 8-K under Items 5 and 7 (c) on April 28, 2004 announcing the withdrawal of our proposal to merge with The Walt Disney Company.


(ii)

We filed a Current Report on Form 8-K under Items 5 and 7 (c) on May 13, 2004 announcing that our President and Chief Executive Officer, Brian L. Roberts, sent a letter to Institutional Shareholder Services stating his intention to abstain from participation in the Governance and Directors Nominating Committee of the Board of Directors.


38


COMCAST CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 2004

SIGNATURES

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

COMCAST CORPORATION

 
/s/ Lawrence J. Salva

Lawrence J. Salva
Senior Vice President, Chief Accounting Officer
and Controller (Principal Accounting Officer)


Date: July 30, 2004







39




--------------------------------------------------------------------------------
                        PENNSYLVANIA DEPARTMENT OF STATE
                               CORPORATION BUREAU
--------------------------------------------------------------------------------
                   Articles of Amendment-Domestic Corporation
                                  (15 Pa.C.S.)
         
         
  ------------------------
  |      Entity Number   |     __X__  Business Corporation (ss. 1915)
  |         3039985      |     _____  Nonprofit Corporation (ss. 5915)
  ------------------------
  ------------------------------------------------         
  |Name                                          | Document will be returned to
  |                                              | the name and address you
  |--------------------------------------------  | enter to the left.
  |Address:                                      | <---
  |                                              | 
  |--------------------------------------------  |
  |City                    State      Zip Code   |
  |                                              |
  |--------------------------------------------  |
  ------------------------------------------------
 
--------------------------------------------------------------------------------
Fee:  $52                 ----------------------------------------------------
                          |                                                  |
                          | Filed in the Department of State on May 28, 2004 |
                          |                                    --------------|
                          |      /s/ Pedro A. Cortes                         |
                          |--------------------------------------------------|
                          |         Secretary of the Commonwealth            |
                          ----------------------------------------------------

         In compliance with the requirements of the applicable  provisions of 15
Pa.C.S. ss.1915 (relating to articles of amendment),  the undersigned,  desiring
to amend its articles, hereby states that:

--------------------------------------------------------------------------------
1.   The name of the corporation is: 
      Comcast Corporation   
     ------------------------------------------
--------------------------------------------------------------------------------
2.   The (a) address of this corporation's current registered office in this
     Commonwealth or (b) name of its commercial registered office provider and
     the county of venue is (the Department is hereby authorized to correct the
     following information to conform to the records of the Department):

         (a) Number and Street       City     State   Zip          County
   1500 Market  Street, 35th Floor   Phila.,  PA.     19102-2148   Phila.
         (b) Name of Commercial Registered Office Provider         County
   ---------------------------------------------------------------------------
   c/o
   ---------------------------------------------------------------------------
--------------------------------------------------------------------------------
3.   The statute by or under which it was incorporated:
       Pennsylvania Business Corporation Law of 1988, as amended, 15 Pa.C.S. 
        ss.ss.1101 et
 seq.
       ---------------------------------------------------------------------
--------------------------------------------------------------------------------
4.   The date of its incorporation:
         December 7, 2001
     ---------------------------------
--------------------------------------------------------------------------------
5.   Check, and if appropriate, complete one of the following:

__X__ The amendment shall be effective upon filing these Articles of Amendment 
in the Department of State.

        The amendment shall be effective on _________ at  _________
                                            Date          Hour
--------------------------------------------------------------------------------





<PAGE>


DSCB:15-1915/5915-2
--------------------------------------------------------------------------------
6.   Check one of the following:
   ___ The amendment was adopted by the shareholders or members pursuant to 15 
Pa.C.S. ss. 1914(a) and (b) or ss. 5914(a).

 -----------------------------------------------------------------------------
__X___  The amendment was adopted by the board of directors pursuant to 15 Pa. 
C.S. ss. 1914(c) or ss. 5914(b).
 -----------------------------------------------------------------------------
--------------------------------------------------------------------------------
7.   Check, and if appropriate, complete one of the following:

_____ The amendment adopted by the corporation, set forth in full, is as follows



  X__ The amendment adopted by the corporation is set forth in full in Exhibit A
attached hereto and made a part hereof.
--------------------------------------------------------------------------------
8.   Check if the amendment restates the Articles:

  X_  The restated Articles of Incorporation supersede the original articles and
all amendments thereto.
--------------------------------------------------------------------------------

                --------------------------------------------------------------
                |IN TESTIMONY WHEREOF, the undersigned corporation has caused|
                |these Articles of Amendment to be signed by a duly          |
                |authorized officer thereof this                             |
                |                                                            |
                |Twenty-Eighth day of May, 2004.                             |
                |                                                            |
                |                                                            |
                |                  Comcast Corporation                       |
                |----------------------------------------------------------- |
                |                  Name of Corporation                       |
                |                                                            |
                |          /s/ Arthur R. Block                               |
                |----------------------------------------------------------- |
                |                      Signature                             |
                |                                                            |
                |                   Arthur R. Block                          |
                |   Senior Vice President, General Counsel and Secretary     |
                |----------------------------------------------------------- |
                |                        Title                               |
                |                                                            |
                --------------------------------------------------------------
                                                                             




<PAGE>


                                     

                                                                       Exhibit A

            Restated Articles of Incorporation of Comcast Corporation

     The Articles of Incorporation of the Corporation are restated in their
                       entirety so as to read as follows:

     FIRST:   The  name  of  the   Corporation  is  Comcast   Corporation   (the
"Corporation").

     SECOND:  The location and post office address of the Corporation's  current
registered office in this Commonwealth is:

         1500 Market Street, 35th Floor
         Philadelphia, PA 19102-2148

     THIRD: The Corporation is incorporated under the provisions of the Business
Corporation  Law of 1988.  The purpose or purposes for which the  Corporation is
organized are:

         To have unlimited power to engage in and to do any lawful act
concerning any or all lawful business for which corporations may be incorporated
under the Business Corporation Law.

     FOURTH: The term of its existence is perpetual.

     FIFTH: A. The aggregate  number of shares which the Corporation  shall have
authority to issue is SEVEN BILLION FIVE HUNDRED MILLION  (7,500,000,000) shares
of Class A Common Stock,  par value $0.01 per share,  SEVEN BILLION FIVE HUNDRED
MILLION  (7,500,000,000) shares of Class A Special Common Stock, par value $0.01
per share, SEVENTY FIVE MILLION (75,000,000) shares of Class B Common Stock, par
value  $0.01 per share,  and TWENTY  MILLION  (20,000,000)  shares of  Preferred
Stock,  which the Board of Directors may issue,  in one or more series,  without
par value, with full, limited,  multiple,  fractional,  or no voting rights, and
with such designations,  preferences,  qualifications,  privileges, limitations,
restrictions, options, conversion rights and other special or relative rights as
shall be fixed by the Board of Directors.

     B. The descriptions, preferences, qualifications, limitations, restrictions
and the  voting,  special  or  relative  rights in respect of the shares of each
class of Common Stock are as follows:

          1. (a) Subject to  paragraph  (B)(1)(c) of this  Article  FIFTH,  each
     share of Class A Common  Stock  shall  entitle  the  holder  thereof to the
     number of votes equal to a quotient the numerator of which is the excess of
     (i) the Total  Number of Votes (as defined  below) over (ii) the sum of (A)
     the Total Number of B Votes (as defined  below) and (B) the Total Number of
     Other Votes (as defined  below) and the  denominator of which is the number
     of outstanding shares of Class A Common Stock (provided that if at any time
     there are no  outstanding  shares of Class B Common  Stock,  each  share of
     Class A Common Stock shall entitle the holder  thereof to one (1) vote) and
     each share of Class B Common  Stock  shall  entitle  the holder  thereof to
     fifteen (15) votes. Holders of shares of Class A Special Common Stock shall
     not be entitled to vote for the election of Directors  (as defined below in
     Article  SIXTH) or any other matter except as may be required by applicable
     law, in which case each share of Class A Special Common Stock shall entitle
     the  holder  thereof to the same  number of votes to which  each  holder of
     Class A Common Stock is entitled for each of such holder's  shares of Class
     A Common  Stock.  "Total  Number of Votes" on any record date is equal to a
     quotient  the  numerator  of which is the  Total  Number of B Votes on such
     record date and the  denominator  of which is the B Voting  Percentage  (as
     defined below) on such record date. "Total Number of B Votes" on any record
     date is equal to the  product of (i) 15 and (ii) the number of  outstanding
     shares of Class B Common Stock on such record date.  "Total Number of Other
     Votes" on any  record  date  means the  aggregate  number of votes to which
     holders  of all  classes  of capital  stock of the  Corporation  other than
     holders of Class A Common  Stock and Class B Common  Stock are  entitled to
     cast on such record date in an election of Directors. "B Voting Percentage"
     on any record date means the portion  (expressed  as a  percentage)  of the
     total  number of votes  entitled to be cast in an election of  Directors by
     the  holders of capital  stock of the  Corporation  to which all holders of
     Class B





<PAGE>



     Common  Stock are  entitled  to cast on such  record date in an election of
     Directors,  as specified and determined  pursuant to paragraph (B)(1)(c) of
     this Article FIFTH.

          (b) Except as  provided in Article  SEVENTH or required by  applicable
     law,  only the  holders  of Class A Common  Stock,  the  holders of Class B
     Common Stock and the holders of any other class or series of Common  Stock,
     Preferred Stock or other class of capital stock of the Corporation (if any)
     with  voting  rights  shall be  entitled to vote and shall vote as a single
     class on all matters  with respect to which a vote of the  shareholders  of
     the  Corporation  is required or  permitted  under  applicable  law,  these
     Articles  of  Incorporation,  or the By-Laws of the  Corporation.  Whenever
     applicable  law,  these  Articles  of  Incorporation  or the By-Laws of the
     Corporation  provide for a vote of the  shareholders  of the Corporation on
     any matter, approval of such matter shall require the affirmative vote of a
     majority of the votes cast by the holders  entitled to vote thereon  unless
     otherwise  expressly  provided  under  applicable  law,  these  Articles of
     Incorporation or the By-Laws of the Corporation.

          (c)   Notwithstanding   any  other  provision  of  these  Articles  of
     Incorporation,  including  paragraph  (B)(1)(a) of this Article FIFTH,  but
     subject to Article SEVENTH, with respect to any matter on which the holders
     of Class B Common Stock and the holders of one or more classes or series of
     Common  Stock,  Preferred  Stock or any other class of capital stock of the
     Corporation  (if any) vote as a single class,  each share of Class B Common
     Stock shall entitle the holder thereof to the number of votes  necessary so
     that,  if all holders of Class B Common  Stock and all holders of each such
     other class or series of Common Stock,  Preferred  Stock and other class of
     capital stock of the  Corporation  (if any) were to cast all votes they are
     entitled to cast on such matter, the holders of the Class B Common Stock in
     the  aggregate  would cast thirty three and  one-third (33 1/3) per cent of
     the total votes cast by all such holders, subject to reduction as set forth
     in the following sentence.  If at any time after the Effective Time for any
     reason  whatsoever the number of shares of Class B Common Stock outstanding
     at such time is reduced  below the number of shares of Class B Common Stock
     outstanding  at the Effective  Time  (appropriately  adjusted for any stock
     dividend paid in Class B Common Stock, stock splits or reverse stock splits
     of  the  Class  B  Common   Stock  or   combinations,   consolidations   or
     reclassifications of the Class B Common Stock), the percentage specified in
     the  preceding  sentence  shall be  reduced  to a  percentage  equal to the
     product of (i) thirty  three and  one-third  (33 1/3) and (ii) the fraction
     obtained  by  dividing  the  number  of  shares  of  Class B  Common  Stock
     outstanding  at such time by the  number of shares of Class B Common  Stock
     outstanding  at the Effective  Time  (appropriately  adjusted for any stock
     dividend paid in Class B Common Stock, stock splits or reverse stock splits
     of  the  Class  B  Common   Stock  or   combinations,   consolidations   or
     reclassifications  of the  Class  B  Common  Stock).  No  reduction  in the
     percentage of the voting power of the Class B Common Stock  pursuant to the
     preceding  sentence  shall be  reversed  by any  issuance of Class B Common
     Stock that occurs after such reduction.

          2. The holders of Class A Common Stock, the holders of Class A Special
     Common  Stock and the holders of Class B Common  Stock shall be entitled to
     receive,  from time to time, when and as declared, in the discretion of the
     Board of Directors,  such cash dividends as the Board of Directors may from
     time  to  time  determine,  out of  such  funds  as are  legally  available
     therefore,   in   proportion   to  the  number  of  shares  held  by  them,
     respectively, without regard to class.

          3. The holders of Class A Common Stock, the holders of Class A Special
     Common Stock,  and the holders of Class B Common Stock shall be entitled to
     receive, from time to time, when and as declared by the Board of Directors,
     such  dividends of stock of the  Corporation or other property as the Board
     of  Directors  may  determine,  out of such funds as are legally  available
     therefore.  Stock  dividends  on, or stock  splits  of, any class of Common
     Stock  shall not be paid or issued  unless paid or issued on all classes of
     Common Stock,  in which case they shall be paid or issued only in shares of
     that class; provided, however, that stock dividends on, or stock splits of,
     Class B Common  Stock  may be paid or  issued  in shares of Class A Special
     Common  Stock.  Any decrease in the number of shares of any class of Common
     Stock  resulting  from a combination  or  consolidation  of shares or other
     capital  reclassification  shall not be permitted unless parallel action is
     taken with respect to each other class of Common Stock,  so that the number
     of shares of each  class of Common  Stock  outstanding  shall be  decreased
     proportionately. Notwithstanding anything to the contrary contained herein,
     in  the  event  of  a   distribution   of  property,   plan  of  merger  or
     consolidation,  plan of asset transfer, plan of division, plan of exchange,
     or recapitalization  pursuant to which the holders of Class A Common Stock,
     the  holders  of Class A Special  Common  Stock and the  holders of Class B
     Common Stock would be entitled to



                                      -2-




<PAGE>




     receive equity interests of one or more  corporations  (including,  without
     limitation,  the Corporation) or other entities,  or rights to acquire such
     equity  interests,  then the Board of  Directors  may, by  resolution  duly
     adopted,  provide that the holders of Class A Common Stock,  the holders of
     Class A Special  Common  Stock,  and the  holders of Class B Common  Stock,
     respectively and as separate  classes,  shall receive with respect to their
     Class A Common Stock, Class A Special Common Stock, or Class B Common Stock
     (whether by distribution, exchange, redemption or otherwise), in proportion
     to the  number of  shares  held by them,  equity  interests  (or  rights to
     acquire  such  equity  interests)  of  separate  classes  or series  having
     substantially     equivalent    relative     designations,     preferences,
     qualifications,  privileges,  limitations,  restrictions  and rights as the
     relative    designations,    preferences,    qualifications,    privileges,
     limitations,  restrictions and rights of the Class A Common Stock,  Class A
     Special Common Stock and Class B Common Stock. Except as provided above, if
     there  should  be any  distribution  of  property,  merger,  consolidation,
     purchase or acquisition  of property or stock,  asset  transfer,  division,
     share exchange,  recapitalization or reorganization of the Corporation, the
     holders of Class A Common  Stock,  the  holders  of Class A Special  Common
     Stock,  and the holders of Class B Common Stock shall receive the shares of
     stock,  other  securities or rights or other assets as would be issuable or
     payable  upon  such  distribution,   merger,  consolidation,   purchase  or
     acquisition  of such property or stock,  asset  transfer,  division,  share
     exchange, recapitalization or reorganization in proportion to the number of
     shares held by them, respectively, without regard to class.

          4. Each  share of Class B Common  Stock  shall be  convertible  at the
     option of the holder  thereof into one share of Class A Common Stock or one
     share of Class A Special  Common Stock.  Each share of Class B Common Stock
     shall be cancelled after it has been converted as provided herein.

          5.  Subject to Article  SEVENTH and except as  otherwise  permitted by
     applicable  law, each and any provision of these Articles of  Incorporation
     may from time to time,  when and as desired,  be amended by a resolution of
     the Board of Directors and the affirmative  vote of a majority of the votes
     cast  by all  shareholders  entitled  to vote  thereon,  as  determined  in
     accordance  with the  provisions of this Article  FIFTH.  There shall be no
     class voting on any such  amendments or on any other matter except as shall
     be required by Article  SEVENTH or by  applicable  law, in which case there
     shall be required the  affirmative  vote of a majority of the votes cast by
     the  holders of the  outstanding  shares of each class  entitled to vote by
     Article SEVENTH or by applicable law, voting as a separate class.

          6.  If  there  should  be  any  merger,  consolidation,   purchase  or
     acquisition of property or stock, separation,  reorganization,  division or
     share  exchange,  the Board of  Directors  shall take such action as may be
     necessary to enable the holders of the Class B Common Stock to receive upon
     any subsequent conversion of their stock into Class A Common Stock or Class
     A Special  Common Stock (as the case may be), in whole or in part,  in lieu
     of any shares of Class A Common  Stock or Class A Special  Common Stock (as
     the case may be) of the Corporation,  the shares of stock,  securities,  or
     other   assets  as  would  be  issuable  or  payable   upon  such   merger,
     consolidation,  purchase, or acquisition of property or stock,  separation,
     reorganization, division or share exchange in respect of or in exchange for
     such  share or  shares of Class A Common  Stock or Class A  Special  Common
     Stock (as the case may be).

          7. In the event of any liquidation,  dissolution or winding up (either
     voluntary or involuntary) of the Corporation, the holders of Class A Common
     Stock, the holders of Class A Special Common Stock and the holders of Class
     B Common  Stock  shall be  entitled  to receive the assets and funds of the
     Corporation   in   proportion  to  the  number  of  shares  held  by  them,
     respectively, without regard to class.

          8. At all times  the  Board of  Directors  shall  take such  action to
     adjust the conversion privileges of the Class B Common Stock and the number
     of shares of Class B Common Stock to be  outstanding  after any  particular
     transaction to prevent the dilution of the conversion rights of the holders
     of Class B Common Stock.

          9. Except as expressly  set forth in these  Articles of  Incorporation
     (including,  without  limitation,  this Article FIFTH and Article SEVENTH),
     the  rights  of the  holders  of Class A Common  Stock,  the  rights of the
     holders of Class A Special  Common  Stock and the rights of the  holders of
     Class B Common Stock shall be in all respects identical.



                                      -3-





<PAGE>




          10. Neither the holders of the Class A Common Stock nor the holders of
     the Class B Common  Stock nor the  holders of any other  class or series of
     Common  Stock,  Preferred  Stock or other  class  of  capital  stock of the
     Corporation,  whether  issued prior to or after the Effective  Time,  shall
     have cumulative voting rights.

     C. Pursuant to the authority granted to the Board of Directors in paragraph
A of this  Article  FIFTH,  the Board of  Directors  has fixed and  designated a
Series A Participating  Cumulative  Preferred Stock having the voting rights and
designations,    preferences,    qualifications,     privileges,    limitations,
restrictions,  and other  special and  relative  rights as are  hereinafter  set
forth:

          1.  The  shares  of such  series  shall be  designated  as  "Series  A
     Participating Cumulative Preferred Stock" (the "Series A Preferred Stock"),
     and the number of shares constituting such series shall be 2,500,000.  Such
     number of shares  of the  Series A  Preferred  Stock  may be  increased  or
     decreased  by  resolution  of the  Board  of  Directors;  provided  that no
     decrease shall reduce the number of shares of Series A Preferred Stock to a
     number less than the number of shares then  outstanding  plus the number of
     shares issuable upon exercise or conversion of outstanding rights,  options
     or other securities issued by the Corporation.

          2. (a) The  holders  of shares of Series A  Preferred  Stock  shall be
     entitled to receive, when, as and if declared by the Board of Directors out
     of funds legally available for the purpose,  quarterly dividends payable on
     March 31,  June 30,  September  30 and  December 31 of each year (each such
     date being  referred to herein as a  "Quarterly  Dividend  Payment  Date"),
     commencing  on the first  Quarterly  Dividend  Payment Date after the first
     issuance of any share or  fraction of a share of Series A Preferred  Stock,
     in an amount per share  (rounded to the nearest  cent) equal to the greater
     of (i) $10.00 and (ii) subject to the provision for adjustment  hereinafter
     set forth,  1000 times the aggregate per share amount of all cash dividends
     or other distributions and 1000 times the aggregate per share amount of all
     non-cash  dividends  or other  distributions  (other  than  (A) a  dividend
     payable  in shares of Common  Stock,  par  value  $0.01 per  share,  of the
     Corporation  (the "Common  Stock") or (B) a subdivision of the  outstanding
     shares of Common Stock (by  reclassification or otherwise)) declared on the
     Common Stock since the immediately  preceding  Quarterly  Dividend  Payment
     Date, or, with respect to the first Quarterly  Dividend Payment Date, since
     the  first  issuance  of any  share  or  fraction  of a share  of  Series A
     Preferred  Stock. If the  Corporation,  at any time after November 18, 2002
     (the "Rights  Declaration Date"), pays any dividend on Common Stock payable
     in shares of Common Stock or effects a subdivision  or  combination  of the
     outstanding shares of Common Stock (by  reclassification or otherwise) into
     a greater  or lesser  number of shares of Common  Stock,  then in each such
     case the amount to which holders of shares of Series A Preferred Stock were
     entitled immediately prior to such event under clause (ii) of the preceding
     sentence  shall be adjusted by  multiplying  such amount by a fraction  the
     numerator  of which is the  number of shares  of Common  Stock  outstanding
     immediately  after such event and the denominator of which is the number of
     shares of Common  Stock  that were  outstanding  immediately  prior to such
     event.

          (b) The  Corporation  shall declare a dividend or  distribution on the
     Series A Preferred Stock as provided in paragraph (C)(2)(a) of this Article
     FIFTH  immediately  after it  declares a dividend  or  distribution  on the
     Common Stock (other than as described in clauses (ii)(A) and (ii)(B) of the
     first  sentence of paragraph  (C)(2) (a) of this Article  FIFTH);  provided
     that if no dividend or distribution  shall have been declared on the Common
     Stock during the period between any Quarterly Dividend Payment Date and the
     next subsequent  Quarterly  Dividend  Payment Date (or, with respect to the
     first  Quarterly  Dividend  Payment  Date,  the  period  between  the first
     issuance of any share or  fraction  of a share of Series A Preferred  Stock
     and such first Quarterly  Dividend  Payment Date), a dividend of $10.00 per
     share on the Series A Preferred Stock shall nevertheless be payable on such
     subsequent Quarterly Dividend Payment Date.

          (c) Dividends  shall begin to accrue and be cumulative on  outstanding
     shares of Series A Preferred Stock from the Quarterly Dividend Payment Date
     next  preceding  the date of  issuance of such shares of Series A Preferred
     Stock,  unless  the date of  issuance  of such  shares is on or before  the
     record date for the first  Quarterly  Dividend  Payment Date, in which case
     dividends on such shares shall begin to accrue and be  cumulative  from the
     date of issue of such  shares,  or unless the date of issue is a date after
     the  record  date for the  determination  of  holders of shares of Series A
     Preferred  Stock entitled to receive a quarterly  dividend and on or before
     such Quarterly  Dividend  Payment Date, in which case dividends shall begin
     to accrue and be  cumulative  from such  Quarterly  Dividend  Payment Date.
     Accrued but unpaid  dividends  shall not bear  interest.  Dividends paid on
     shares of Series A Preferred  Stock in an amount less than the total amount
     of such dividends at the time



                                      -4-




<PAGE>




     accrued  and  payable  on such  shares  shall  be  allocated  pro rata on a
     share-by-share  basis  among all such shares at the time  outstanding.  The
     Board of Directors may fix a record date for the  determination  of holders
     of shares of Series A  Preferred  Stock  entitled  to receive  payment of a
     dividend or distribution  declared thereon,  which record date shall not be
     more than 60 days prior to the date fixed for the payment thereof.

          3. In addition to any other voting rights required by law, the holders
     of shares of Series A  Preferred  Stock  shall  have the  following  voting
     rights:

          (a) Each share of Series A Preferred  Stock  shall  entitle the holder
     thereof to a number of votes equal to 1000 (as adjusted as described below,
     the  "Adjustable  Factor")  times  the  number  of votes a share of Class A
     Common  Stock is  entitled to cast on all  matters  submitted  to a vote of
     stockholders of the Corporation.  For purposes of calculating the number of
     votes a share of Class A Common  Stock is  entitled  to cast on all matters
     submitted to a vote of stockholders of the Corporation, as set forth in the
     Corporation's  articles of  incorporation,  votes  represented by shares of
     Series A Preferred  Stock  shall be included in the "Total  Number of Other
     Votes" (as defined in the Corporation's articles of incorporation).  If the
     Corporation  shall at any time  after the Rights  Declaration  Date pay any
     dividend  on Common  Stock  payable  in shares of Common  Stock or effect a
     subdivision or combination  of the  outstanding  shares of Common Stock (by
     reclassification or otherwise) into a greater or lesser number of shares of
     Common Stock, then in each such case the number of votes per share to which
     holders of shares of Series A  Preferred  Stock were  entitled  immediately
     prior to such event shall be adjusted by multiplying the Adjustable  Factor
     by a  fraction  the  numerator  of which is the  number of shares of Common
     Stock outstanding immediately after such event and the denominator of which
     is the number of shares of Common Stock that were  outstanding  immediately
     prior to such event.

          (b) Except as  otherwise  provided  herein or by law,  the  holders of
     shares of Series A  Preferred  Stock  and the  holders  of shares of Common
     Stock shall vote  together as a single class on all matters  submitted to a
     vote of stockholders of the Corporation.

          (c) (i) If at any time dividends on any Series A Preferred Stock shall
     be in arrears in an amount equal to six quarterly  dividends  thereon,  the
     occurrence of such contingency shall mark the beginning of a period (herein
     called a "default  period")  which  shall  extend  until such time when all
     accrued and unpaid  dividends for all previous  quarterly  dividend periods
     and for the  current  quarterly  dividend  period on all shares of Series A
     Preferred Stock then  outstanding  shall have been declared and paid or set
     apart for  payment.  During each default  period,  all holders of Preferred
     Stock and any other series of Preferred  Stock then  entitled as a class to
     elect directors, voting together as a single class, irrespective of series,
     shall  have the right to elect  two  additional  Directors  to the Board of
     Directors.

          (ii) During any default  period,  such voting  right of the holders of
     Series A Preferred  Stock may be exercised  initially at a special  meeting
     called pursuant to paragraph (C)(3)(c)(iii) of this Article FIFTH or at any
     annual  meeting of  stockholders,  and  thereafter  at annual  meetings  of
     stockholders;  provided that neither such voting right nor the right of the
     holders of any other series of  Preferred  Stock,  if any, to increase,  in
     certain cases, the authorized number of Directors shall be exercised unless
     the holders of 10% in number of shares of Preferred Stock outstanding shall
     be  present  in person or by proxy.  The  absence of a quorum of holders of
     Common Stock shall not affect the exercise by holders of Preferred Stock of
     such voting right.  If at any meeting at which  holders of Preferred  Stock
     shall  initially  exercise  such  voting  right the  number  of  additional
     Directors  which may be so elected does not amount to the required  number,
     the  holders  of the  Preferred  Stock  shall  have the  right to make such
     increase in the number of  Directors  as shall be  necessary  to permit the
     election by them of the required number. After the holders of the Preferred
     Stock shall have  initially  exercised  their right to elect two additional
     Directors in any default period and during the  continuance of such period,
     the number of Directors shall not be increased or decreased  except by vote
     of the  holders of  Preferred  Stock as herein  provided or pursuant to the
     rights of any equity  securities  ranking  senior to or pari passu with the
     Series A Preferred Stock.

          (iii)  Unless the holders of  Preferred  Stock  shall have  previously
     exercised their right to elect Directors during an existing default period,
     the Board of Directors may order, or any stockholder or stockholders owning
     in the  aggregate  not less  than 10% of the  total  number  of  shares  of
     Preferred  Stock  outstanding,  irrespective  of series,  may request,  the
     calling of a special meeting of holders of Preferred  Stock,  which meeting
     shall




                                      -5-




<PAGE>



     thereupon be called by the Chief Executive Officer,  the President,  a Vice
     President or the Secretary of the  Corporation.  Notice of such meeting and
     of any annual  meeting at which holders of Preferred  Stock are entitled to
     vote pursuant to this paragraph (C)(3)(c) (iii) of this Article FIFTH shall
     be given to each holder of record of  Preferred  Stock by mailing a copy of
     such  notice to him at the  address of such  holder  shown on the  registry
     books of the  Corporation.  Such  meeting  shall be  called  for a time not
     earlier than 20 days and not later than 60 days after such order or request
     or in default  of the  calling  of such  meeting  within 60 days after such
     order or  request,  such  meeting  may be called on  similar  notice by any
     stockholder  or  stockholders  owning in the aggregate not less than 10% of
     the total number of shares of Preferred Stock outstanding,  irrespective of
     series. Notwithstanding the provisions of this paragraph (C)(3)(c) (iii) of
     this Article  FIFTH , no such special  meeting  shall be called  during the
     period  within 60 days  immediately  preceding  the date fixed for the next
     annual meeting of stockholders.

          (iv) In any default  period,  the holders of Common  Stock,  and other
     classes of stock of the  Corporation  if  applicable,  shall continue to be
     entitled  to elect  the whole  number of  Directors  until the  holders  of
     Preferred  Stock shall have  exercised  their right to elect two  Directors
     voting as a class,  after the exercise of which right (x) the  Directors so
     elected by the holders of  Preferred  Stock shall  continue in office until
     their  successors  shall  have been  elected  by such  holders or until the
     expiration  of the  default  period,  and (y) any  vacancy  in the Board of
     Directors  may  (except as  provided  in  paragraph  (C)(3)(c)(ii)  of this
     Article  FIFTH) be filled by vote of a majority of the remaining  Directors
     theretofore  elected by the holders of the class of stock which elected the
     Director  whose  office  shall  have  become  vacant.  References  in  this
     paragraph  (C)(3)(c)  of this  Article  FIFTH to  Directors  elected by the
     holders of a particular class of stock shall include  Directors  elected by
     such Directors to fill vacancies as provided in clause (y) of the foregoing
     sentence.

          (v) Immediately upon the expiration of a default period, (x) the right
     of the  holders  of  Preferred  Stock as a class to elect  Directors  shall
     cease,  (y) the term of any  Directors  elected by the holders of Preferred
     Stock as a class shall terminate,  and (z) the number of Directors shall be
     such number as may be provided  for in the  articles  of  incorporation  or
     by-laws  irrespective  of any increase made  pursuant to the  provisions of
     Section 3(c)(ii) (such number being subject,  however, to change thereafter
     in any  manner  provided  by law or in the  articles  of  incorporation  or
     by-laws).  Any  vacancies  in  the  Board  of  Directors  effected  by  the
     provisions of clauses (y) and (z) in the  preceding  sentence may be filled
     by a majority of the remaining Directors.

          (d) The  articles of  incorporation  of the  Corporation  shall not be
     amended in any manner  (whether by merger or  otherwise) so as to adversely
     affect the powers,  preferences or special rights of the Series A Preferred
     Stock  without  the  affirmative  vote of the  holders of a majority of the
     outstanding  shares of Series A Preferred  Stock,  voting  separately  as a
     class.

          (e) Except as otherwise provided herein, holders of Series A Preferred
     Stock shall have no special voting  rights,  and their consent shall not be
     required for taking any corporate action.

          4.  (a)   Whenever   quarterly   dividends   or  other   dividends  or
     distributions  payable  on the  Series A  Preferred  Stock as  provided  in
     paragraph (C)(2) of this Article FIFTH are in arrears, thereafter and until
     all  accrued  and  unpaid  dividends  and  distributions,  whether  or  not
     declared, on outstanding shares of Series A Preferred Stock shall have been
     paid in full, the Corporation shall not:

          (i) declare or pay dividends on, or make any other  distributions  on,
     any  shares  of  stock  ranking  junior  (either  as to  dividends  or upon
     liquidation, dissolution or winding up) to the Series A Preferred Stock;

          (ii) declare or pay dividends on, or make any other  distributions on,
     any shares of stock  ranking on a parity  (either as to  dividends  or upon
     liquidation,  dissolution or winding up) with the Series A Preferred Stock,
     except  dividends paid ratably on the Series A Preferred Stock and all such
     other  parity  stock  on which  dividends  are  payable  or in  arrears  in
     proportion to the total amounts to which the holders of all such shares are
     then entitled;

          (iii)  redeem,  purchase or otherwise  acquire for value any shares of
     stock  ranking  junior  (either  as  to  dividends  or  upon   liquidation,
     dissolution or winding up) to the Series A Preferred  Stock;  provided that
     the  Corporation  may at any time  redeem,  purchase or  otherwise  acquire
     shares of any such junior stock in



                                      -6-




<PAGE>



     exchange  for  shares of stock of the  Corporation  ranking  junior  (as to
     dividends and upon dissolution,  liquidation or winding up) to the Series A
     Preferred Stock; or

          (iv)  redeem,  purchase or  otherwise  acquire for value any shares of
     Series A  Preferred  Stock,  or any  shares  of stock  ranking  on a parity
     (either as to dividends  or upon  liquidation,  dissolution  or winding up)
     with the Series A Preferred  Stock,  except in  accordance  with a purchase
     offer made in  writing or by  publication  (as  determined  by the Board of
     Directors)  to all holders of Series A  Preferred  Stock and all such other
     parity stock upon such terms as the Board of Directors, after consideration
     of the  respective  annual  dividend  rates and other  relative  rights and
     preferences of the respective  series and classes,  shall determine in good
     faith will  result in fair and  equitable  treatment  among the  respective
     series or classes.

          (b) The Corporation shall not permit any subsidiary of the Corporation
     to  purchase  or  otherwise  acquire  for value any  shares of stock of the
     Corporation unless the Corporation could, under paragraph 4(a), purchase or
     otherwise acquire such shares at such time and in such manner.

          5. Any  shares of Series A  Preferred  Stock  redeemed,  purchased  or
     otherwise  acquired by the  Corporation in any manner  whatsoever  shall be
     retired and  canceled  promptly  after the  acquisition  thereof.  All such
     shares shall upon their cancellation  become authorized but unissued shares
     of Preferred Stock without  designation as to series and may be reissued as
     part of a new series of  Preferred  Stock to be created  by  resolution  or
     resolutions  of the Board of  Directors  as  permitted  by the  articles of
     incorporation or as otherwise permitted under Pennsylvania Law.

          6. Upon any liquidation, dissolution or winding up of the Corporation,
     no distribution shall be made (a) to the holders of shares of stock ranking
     junior (either as to dividends or upon liquidation,  dissolution or winding
     up) to the Series A Preferred Stock unless,  prior thereto,  the holders of
     shares of Series A Preferred  Stock shall have  received  $10.00 per share,
     plus an amount  equal to accrued  and unpaid  dividends  and  distributions
     thereon,  whether or not declared,  to the date of such  payment;  provided
     that the holders of shares of Series A Preferred Stock shall be entitled to
     receive  an  aggregate  amount  per share,  subject  to the  provision  for
     adjustment  hereinafter set forth, equal to 1000 times the aggregate amount
     to be  distributed  per share to  holders  of Common  Stock,  or (b) to the
     holders  of stock  ranking  on a parity  (either  as to  dividends  or upon
     liquidation,  dissolution or winding up) with the Series A Preferred Stock,
     except  distributions  made ratably on the Series A Preferred Stock and all
     such other parity  stock in  proportion  to the total  amounts to which the
     holders of all such shares are entitled upon such liquidation,  dissolution
     or  winding  up. If the  Corporation  shall at any time  after  the  Rights
     Declaration  Date pay any  dividend  on Common  Stock  payable in shares of
     Common Stock or effect a  subdivision  or  combination  of the  outstanding
     shares of Common Stock (by reclassification or otherwise) into a greater or
     lesser  number  of  shares  of  Common  Stock,  then in each  such case the
     aggregate  amount to which  holders of shares of Series A  Preferred  Stock
     were entitled  immediately  prior to such event under the proviso in clause
     (a) of the preceding  sentence shall be adjusted by multiplying such amount
     by a  fraction  the  numerator  of which is the  number of shares of Common
     Stock outstanding immediately after such event and the denominator of which
     is the number of shares of Common Stock that were  outstanding  immediately
     prior to such event.

          7. If the  Corporation  shall  enter into any  consolidation,  merger,
     combination  or other  transaction  in which the shares of Common Stock are
     exchanged for or changed into other stock or securities,  cash or any other
     property,  then in any such case the  shares of  Series A  Preferred  Stock
     shall at the same time be similarly exchanged for or changed into an amount
     per share,  subject to the provision for adjustment  hereinafter set forth,
     equal to 1000 times the aggregate amount of stock, securities,  cash or any
     other  property,  as the case may be, into which or for which each share of
     Common Stock is changed or exchanged.  If the Corporation shall at any time
     after the Rights  Declaration Date pay any dividend on Common Stock payable
     in shares of Common Stock or effect a  subdivision  or  combination  of the
     outstanding shares of Common Stock (by  reclassification or otherwise) into
     a greater  or lesser  number of shares of Common  Stock,  then in each such
     case the amount set forth in the  preceding  sentence  with  respect to the
     exchange or change of shares of Series A Preferred  Stock shall be adjusted
     by  multiplying  such amount by a fraction  the  numerator  of which is the
     number of shares of Common Stock  outstanding  immediately after such event
     and the  denominator  of which is the number of shares of Common Stock that
     were outstanding immediately prior to such event.




                                      -7-




<PAGE>




          8. The Series A Preferred Stock shall not be redeemable.

          9. The Series A Preferred Stock shall rank junior (as to dividends and
     upon  liquidation,  dissolution  and winding up) to all other series of the
     Corporation's  preferred stock except any series that specifically provides
     that such  series  shall  rank  junior to or on a parity  with the Series A
     Preferred Stock.

          10.  Series A Preferred  Stock may be issued in  fractions  of a share
     which shall entitle the holder,  in proportion to such holder's  fractional
     shares,  to exercise  voting  rights,  receive  dividends,  participate  in
     distributions  and to have the  benefit  of all other  rights of holders of
     Series A Preferred Stock.

     SIXTH: Governance

     A. Definitions

          1.  "Additional  Independent  Director"  has the meaning  specified in
     paragraph (B)(1) of this Article SIXTH.

          2. "AT&T" means AT&T Corp., a New York corporation.

          3. "AT&T Directors"  means (i) those five (5) Directors  designated by
     AT&T  to  serve  as  members  of  the  Board  of  Directors  pursuant  to a
     contractual  right  of  AT&T to  designate  such  Directors  and  (ii)  any
     Replacement AT&T Director.

          4.  "Board  of  Directors"   means  the  Board  of  Directors  of  the
     Corporation.

          5. "CEO" means the Chief Executive Officer of the Corporation.

          6. "Chairman" means the Chairman of the Board of Directors.

          7. "Class of Director" means the Comcast Directors, the AT&T Directors
     or the Independent Directors, as the case may be.

          8. "Comcast" means Comcast Corporation, a Pennsylvania corporation.

          9. "Comcast  Directors" means (i) those five (5) Directors  designated
     by  Comcast to serve as members  of the Board of  Directors  pursuant  to a
     contractual  right of  Comcast to  designate  such  Directors  and (ii) any
     Replacement Comcast Director.

          10. "Director" means a director of the Corporation.

          11.  "Effective  Time" means the date and time at which these  Amended
     and Restated Articles of Incorporation become effective with the Department
     of State of the Commonwealth of Pennsylvania.

          12.  "Holiday" has the meaning  specified in paragraph  (B)(6) of this
     Article SIXTH.

          13. "Independent Director" means (i) those two (2) Independent Persons
     jointly  designated by AT&T and Comcast to serve as members of the Board of
     Directors  pursuant to a contractual right of AT&T and Comcast to designate
     such  Directors,  (ii) any  Additional  Independent  Director and (iii) any
     Replacement Independent Director.

          14.  "Independent  Person" means an independent  person (determined in
     accordance  with the rules of the principal  stock  exchange or interdealer
     quotation  system on which the class of  Corporation  common stock with the
     greatest  aggregate market  capitalization  (as determined in good faith by
     the Board of  Directors)  is  traded),  it being  understood  that (i) each
     individual  who  was a  member  of the  Board  of  Directors  of AT&T as of
     December 19, 2001 (other than Mr. C. Michael Armstrong) was deemed to be an
     Independent Person as of



                                      -8-




<PAGE>





     December  19,  2001,  (ii)  subject  to  clauses  (iii)  and  (iv)  of this
     definition,  none of the members of the Board of Directors of Comcast as of
     December 19, 2001 was deemed to be an Independent Person as of December 19,
     2001, (iii) Mr. Decker Anstrom was deemed to be an Independent Person as of
     December 19, 2001,  (iv) for any period during which Mr. Decker  Anstrom is
     not a Director,  one person (other than Mr. Ralph J. Roberts,  Mr. Brian L.
     Roberts,  Mr. Julian A. Brodsky or Mr. Sheldon M.  Bonovitz)  designated by
     the CEO (which designation may be changed at any time by the CEO) who was a
     member of the Board of  Directors  of Comcast on December  19, 2001 and who
     would qualify as an  Independent  Person under this  definition  not taking
     into  account  clause  (ii) of this  definition  shall be  deemed  to be an
     Independent  Person;  provided that such person shall not be eligible to be
     an AT&T Director or an Independent  Director (any such designee, a "Comcast
     Independent  Designee")  and (v)  none of the  spouse,  parents,  siblings,
     lineal descendants,  aunts,  uncles,  cousins and other close relatives (or
     their  respective   spouses)  of  Mr.  Brian  L.  Roberts  will  be  deemed
     Independent Persons at any time.

          15.  "Initial  Term" means the period  beginning at the Effective Time
     and ending at the 2004 annual meeting of shareholders of the Corporation.

          16. "Replacement AT&T Director" has the meaning specified in paragraph
     (B)(3) of this Article SIXTH.

          17.  "Replacement  Comcast  Director"  has the  meaning  specified  in
     paragraph (B)(3) of this Article SIXTH.

          18.  "Replacement  Director"  has the meaning  specified  in paragraph
     (B)(3) of this Article SIXTH.

          19.  "Replacement  Independent  Director" has the meaning specified in
     paragraph (B)(3) of this Article SIXTH.

          20.  "Specified  Period"  means the period  beginning at the Effective
     Time  and  ending  at  the  2005  annual  meeting  of  shareholders  of the
     Corporation  or, if  earlier,  the date on which Mr. C.  Michael  Armstrong
     ceases to be the Chairman.

          21. "2004 Term" means the period  beginning at the 2004 annual meeting
     of shareholders of the Corporation and ending at the 2005 annual meeting of
     shareholders of the Corporation.

     B. Directors

          1. From the  Effective  Time  until the  expiration  of the 2004 Term,
     subject to the fourth  sentence of this  paragraph  (B)(1) of Article SIXTH
     and the second to last sentence of paragraph  (B)(3) of Article SIXTH,  the
     Board of Directors  shall  consist of five (5) Comcast  Directors (at least
     one (1) of whom shall be an  Independent  Person),  five (5) AT&T Directors
     and two (2) Independent Directors. If the size of the Board of Directors is
     increased as described in the fourth  sentence of this paragraph  (B)(1) of
     Article  SIXTH  or there  is a  vacancy  in the  Comcast  or AT&T  Class of
     Directors that pursuant to the second to last sentence of paragraph  (B)(3)
     of Article SIXTH the applicable Class of Directors is not required to fill,
     the  size of the  Board of  Directors  shall  be  fixed  at the  number  of
     Directors in place after such increase or vacancy and shall remain fixed at
     such number  unless  subsequently  increased  again  pursuant to the fourth
     sentence  of this  paragraph  (B)(1) of  Article  SIXTH or such  vacancy is
     filled  pursuant to  paragraph  (B)(3) of Article  SIXTH (in either of such
     events the size of the Board of Directors  shall be fixed at such increased
     number until subsequently  changed as provided in this paragraph (B)(1) and
     paragraph  (B)(3)  of this  Article  SIXTH).  At all  times,  the  Board of
     Directors  shall  consist of a majority of  Independent  Persons.  From the
     Effective  Time until the  expiration  of the 2004 Term,  a majority of the
     Directors  may increase the size of the Board of Directors by up to two (2)
     members.  The Board of Directors shall take all action  necessary to ensure
     that any vacancy on the Board of Directors  created as a result of any such
     increase shall be filled promptly by an Independent Person nominated by the
     governance and directors nominating committee of the Board of Directors and
     approved by the Board of Directors (an "Additional  Independent Director").
     After the election of an Additional  Independent Director,  such Additional
     Independent Director shall be considered an Independent Director for



                                      -9-




<PAGE>




     all purposes of this Article SIXTH.  After the expiration of the 2004 Term,
     the size of the Board of Directors  shall be determined in accordance  with
     the By-Laws of the  Corporation  and the  provisions  of these  Articles of
     Incorporation relating to Classes of Directors shall no longer apply.

          2.  Following  the  occurrence  of a vacancy on the Board of Directors
     that results in the absence of one or more of (i) a majority of Independent
     Persons on the Board of Directors,  (ii) at least one Comcast  Director who
     is an  Independent  Person,  (iii) the then required  number of Independent
     Directors,  (iv) four (4) Comcast Directors or (v) four (4) AT&T Directors,
     and  notwithstanding  the  occurrence  of  such  vacancy,   the  applicable
     Directors  specified  in paragraph  (B)(3) of this  Article  SIXTH shall be
     authorized to take the actions contemplated by such paragraph to permit the
     Board of Directors to fill such vacancy  (which  vacancy shall be filled by
     an  Independent  Person in the case of clauses (i), (ii) and (iii)) and the
     Board of Directors  shall be  authorized  to fill the vacancy in accordance
     with such  paragraph.  In addition to the foregoing and subject to the last
     sentence of paragraph (B)(3) of Article SIXTH, for a ninety (90) day period
     following  the  occurrence  of a  vacancy  in the Board of  Directors  that
     results in one or more of the circumstances described in clauses (i), (ii),
     (iii), (iv) and (v) of the preceding sentence, the Directors then in office
     shall have and may  exercise all of the powers of the Board of Directors to
     the extent provided under these Articles of  Incorporation,  the By-Laws of
     the Corporation and applicable law.

          3. From the Effective  Time until the expiration of the 2004 Term, the
     Board of Directors shall take all action  necessary to ensure that any seat
     on the Board of  Directors  held by (i) a Comcast  Director  which  becomes
     vacant is filled  promptly  by a person  designated  by a  majority  of the
     Comcast  Directors  remaining on the Board of  Directors  (such  person,  a
     "Replacement Comcast Director"), (ii) an AT&T Director which becomes vacant
     is  filled  promptly  by a  person  designated  by a  majority  of the AT&T
     Directors  remaining on the Board of Directors (such person, a "Replacement
     AT&T  Director") and (iii) an Independent  Director which becomes vacant is
     filled promptly by an Independent  Person  designated by the governance and
     directors  nominating  committee of the Board of Directors (such person,  a
     "Replacement  Independent  Director"  and,  together  with any  Replacement
     Comcast  Director  and  any  Replacement  AT&T  Director,   a  "Replacement
     Director");  provided that the designation of any  Replacement  Independent
     Director by the governance and directors  nominating committee of the Board
     of  Directors  shall be subject to the  approval of the Board of  Directors
     prior  to  such  person  becoming  a  Replacement   Independent   Director.
     Notwithstanding  anything to the contrary  contained herein,  the remaining
     Comcast  Directors or the  remaining  AT&T  Directors,  as the case may be,
     shall be under no obligation to designate a person to fill a vacancy in its
     Class of  Directors  (and during the pendency of any such vacancy the Board
     of  Directors  shall  continue to exercise  all of its powers to the extent
     provided  under  these  Articles  of  Incorporation,  the  By-Laws  of  the
     Corporation and applicable law),  except to the extent such vacancy results
     in fewer than four (4) Directors in the affected  Class of Directors or, in
     the case of the Comcast Directors,  the absence of one Comcast Director who
     is an  Independent  Person.  In the absence of a designation by the Comcast
     Directors,  the AT&T Directors or the  governance and directors  nominating
     committee  of the  Board of  Directors,  as the case may be, of a person to
     fill a vacancy in the relevant  Class of Directors,  the Board of Directors
     shall  have no  authority  to fill a  vacancy  in the  applicable  Class of
     Directors.

          4. Subject to  paragraph  (B)(7) of this  Article  SIXTH,  each of the
     Comcast  Directors,   AT&T  Directors  and  Independent  Directors  at  the
     Effective Time, and each  Replacement  Director and Additional  Independent
     Director  elected to the Board of Directors in accordance with this Article
     SIXTH during the Initial  Term,  shall hold office until the  expiration of
     the Initial Term and until such Director's  successor has been selected and
     qualified or until such Director's earlier death, resignation or removal.

          5. Subject to  paragraph  (B)(7) of this  Article  SIXTH,  each of the
     Comcast  Directors,  AT&T Directors and Independent  Directors  immediately
     after the annual meeting of  shareholders  of the  Corporation in 2004, and
     each Replacement  Director and Additional  Independent  Director elected to
     the Board of Directors  in  accordance  with this Article  SIXTH during the
     2004 Term,  shall hold  office  until the  expiration  of the 2004 Term and
     until such  Director's  successor  has been selected and qualified or until
     such Director's earlier death, resignation or removal.

          6. The first (or in the event the Board of  Directors  calls an annual
     meeting of  shareholders  pursuant to the last  sentence of this  paragraph
     (B)(6), the second) annual meeting of shareholders of the Corporation after



                                      -10-




<PAGE>


     the Effective  Time shall occur on such date and at such time in April 2004
     as the Board of Directors may determine, or if the Board of Directors fails
     to set a date and  time,  on the  second  Thursday  of  April  2004 at 9:00
     o'clock a.m., if, in either case, not a holiday on which national banks are
     or may elect to be closed ("Holiday"),  and if such day is a Holiday,  then
     such  meeting  shall be held on the next  business  day at such  time.  The
     second (or in the event the Board of Directors  calls an annual  meeting of
     shareholders  pursuant to the last sentence of this paragraph  (B)(6),  the
     third)  annual  meeting  of  shareholders  of  the  Corporation  after  the
     Effective  Time shall  occur on such date and at such time in April 2005 as
     the Board of Directors may determine, or if the Board of Directors fails to
     set a date and time,  on the second  Thursday of April 2005 at 9:00 o'clock
     a.m., if, in either case, not a Holiday, and if such day is a Holiday, then
     such  meeting  shall be held on the next  business  day at such  time.  The
     Corporation may, at the election of the Board of Directors,  call an annual
     meeting  of  shareholders  of the  Corporation  in 2003 for the  purpose of
     conducting  such  business,  other than the election of  Directors,  as the
     Board of Directors shall determine.

          7. In  addition to the events set forth in each of  paragraphs  (B)(4)
     and  (B)(5)  of this  Article  SIXTH,  the term of  office  of any  Comcast
     Director or AT&T Director,  in either case who was an Independent Person on
     the date of such  Director's  designation,  appointment  or  election  as a
     member of the Board of Directors,  or of any  Independent  Director,  shall
     terminate  on  any  date  on  which  such  Director  shall  cease  to be an
     Independent  Person  if as a  result  of  such  Director  ceasing  to be an
     Independent  Person the Board of Directors shall not include (i) a majority
     of  Independent  Persons and (ii) at least one Comcast  Director  who is an
     Independent Person.

     C. Office of the Chairman

          1. At the Effective Time and during the Specified Period,  there shall
     be an Office of the  Chairman  which shall be comprised of the Chairman and
     the CEO.

          2. The Office of the  Chairman  shall be the  Corporation's  principal
     executive  deliberative body with  responsibility  for corporate  strategy,
     policy  and   direction,   governmental   affairs  and  other   matters  of
     significance to the Corporation.  The Chairman and the CEO shall advise and
     consult with each other with respect to each of the foregoing matters.

     D. Officers

          1. Chairman.

          (a) At the  Effective  Time  and  during  the  Specified  Period,  the
     Chairman  shall be Mr. C. Michael  Armstrong if he is willing and available
     to serve;  provided  that from and after  April 1, 2004,  if the  Specified
     Period has not expired,  Mr. C. Michael  Armstrong  shall be non- executive
     Chairman for the  remainder of the  Specified  Period.  After the Specified
     Period,  the  Chairman  shall be Mr.  Brian L. Roberts if he is willing and
     available to serve.

          (b) The Chairman shall preside at all meetings of the  shareholders of
     the  Corporation  and of the  Board of  Directors.  In the  absence  of the
     Chairman,  if the  Chairman  and the CEO are not the same  person,  the CEO
     shall chair such meetings.

          (c) The Chairman shall have the authority to call special  meetings of
     the Board of  Directors,  in the  manner  provided  by the  By-Laws  of the
     Corporation.

          (d) Removal of the Chairman shall require the  affirmative  vote of at
     least 75% of the entire  Board of  Directors  until the earlier to occur of
     (i) the date on which  neither Mr. C.  Michael  Armstrong  nor Mr. Brian L.
     Roberts is the Chairman and (ii) the sixth anniversary of the expiration of
     the Initial Term.

          2. Chief Executive Officer and President.




                                      -11-




<PAGE>




          (a) At the Effective Time, the CEO shall be Mr. Brian L. Roberts if he
     is willing and  available  to serve.  For so long as Mr.  Brian L.  Roberts
     shall be the CEO, he shall also be the President of the Corporation.

          (b) The powers,  rights,  functions  and  responsibilities  of the CEO
     shall include,  without limitation,  the following,  subject to the control
     and direction of the Board of Directors:

               (i)  the   supervision,   coordination   and  management  of  the
          Corporation's business, operations, activities, operating expenses and
          capital allocation;

               (ii) matters  relating to officers  (other than the Chairman) and
          employees,   including,   without  limitation,   hiring,  terminating,
          changing  positions and allocating  responsibilities  of such officers
          and employees;  provided that, if the Chairman and the CEO are not the
          same person,  the CEO shall  consult  with the Chairman in  connection
          with the  foregoing  as it  relates to the  senior  executives  of the
          Corporation; provided, further, that following the initial designation
          of officers by the CEO (in consultation with the Chairman) as provided
          herein,  the election of officers  shall be as provided in the By-Laws
          of the Corporation;

               (iii) all of the powers,  rights,  functions and responsibilities
          typically  exercised by a chief  executive  officer and president of a
          corporation; and

               (iv) the  authority  to call  special  meetings  of the  Board of
          Directors, in the manner provided by the By-Laws of the Corporation.

          (c) Removal of the CEO shall require the affirmative  vote of at least
     75% of the entire Board of Directors  until the earlier to occur of (i) the
     date on which Mr. Brian L. Roberts  ceases to be the CEO and (ii) the sixth
     anniversary of the expiration of the Initial Term.

     E. Executive  Committee.  If the Board of Directors decides to establish an
Executive  Committee,  if he is willing  and able to serve and for so long as he
shall be a member of the Board of  Directors,  Mr. Ralph J. Roberts shall be the
Chairman of the Executive Committee.

     F.  Amendment.  Subject to paragraph (G) of this Article  SIXTH,  until the
earlier  to occur of (i) the date on which  Mr.  Brian L.  Roberts  is no longer
serving  as the  Chairman  or the CEO and  (ii)  the  sixth  anniversary  of the
expiration  of the Initial  Term,  the  provisions of this Article SIXTH and the
provisions of Article 9 of the By-Laws may not be amended,  altered, repealed or
waived in any respect  without the prior  approval of at least 75% of the entire
Board of Directors.

     G.  Termination.  If Mr.  Brian L.  Roberts  is no  longer  serving  as the
Chairman or the CEO, the provisions of this Article SIXTH (other than paragraphs
(A) and (B)(2) (but only insofar as such  paragraph  relates to the  requirement
that a majority of the Directors be Independent Persons) and the second sentence
of  paragraph  (B)(1),  in each  case of this  Article  SIXTH)  shall  terminate
automatically  without  any  further  action  of the Board of  Directors  or the
shareholders of the Corporation; provided that notwithstanding the foregoing, in
the event that Mr. Brian L.  Roberts  ceases to serve as the Chairman or the CEO
prior to the  2005  annual  meeting  of  shareholders  of the  Corporation,  the
provisions of paragraphs (A), (B), (C) and  (D)(1)(a)-(c)  of this Article SIXTH
shall survive through the close of such annual meeting.

     SEVENTH:  In  addition  to any other  approval  required by law or by these
Articles of Incorporation,  and  notwithstanding any provision of Article FIFTH,
the  approval of the holders of Class B Common  Stock,  voting  separately  as a
class,  shall be  necessary  to approve (i) any merger or  consolidation  of the
Corporation  with  another  entity or any other  transaction,  in each case that
requires the approval of the shareholders of the Corporation pursuant to the law
of the  Commonwealth  of  Pennsylvania  or other  applicable  law,  or any other
transaction that would result in any person or group (as such term is defined in
Section  13(d)(3) of the  Securities  Exchange Act of 1934,  as amended)  owning
shares  representing  in  excess  of 10% of the  combined  voting  power  of the
resulting or surviving  corporation,  or any issuance of securities  (other than
pursuant to  director  or officer  stock  option or  purchase  plans)  requiring
shareholder  approval  under the applicable  rules and  regulations of any stock
exchange or



                                      -12-




<PAGE>




quotation  system,  (ii) any  issuance of shares of Class B Common  Stock or any
securities exercisable or exchangeable for or convertible into shares of Class B
Common  Stock  or  (iii)  any  amendment  to  these  Articles  of  Incorporation
(including,   without  limitation,  any  amendment  to  elect  to  have  any  of
Subchapters E, F, G, H, I and J or Section 2538 of Subchapter D, in each case of
Chapter  25 of the  Business  Corporation  Law of  1988,  be  applicable  to the
Corporation  or any  amendment  to this  Article  SEVENTH) or the By-Laws of the
Corporation or any other action (including,  without  limitation,  the adoption,
amendment or redemption of a  shareholder  rights plan) that would,  in any such
case,  limit the rights of the holders of Class B Common Stock or any subsequent
transferee  of Class B Common  Stock to  transfer,  vote or  otherwise  exercise
rights  with  respect to capital  stock of the  Corporation.  In addition to any
other  approval  required  by law or by these  Articles  of  Incorporation,  and
notwithstanding  any provision of Article  FIFTH,  the approval of the holder of
any class or series of shares of the  Corporation  shall be necessary to approve
any amendment to these Articles of Incorporation  which would make any change in
the  preferences,  limitations  or rights of the  shares of such class or series
adverse to such class or series.

     EIGHTH: Special meetings of shareholders may be called only by the Board of
Directors and may not be called by shareholders of the Corporation.

     NINTH: The shareholders of the Corporation shall not be permitted to act by
written  consent  in  lieu  of a  meeting;  provided  that  notwithstanding  the
foregoing,  the  holders  of a  majority  of the Class B Common  Stock  shall be
permitted  to act by written  consent in lieu of a meeting  in the  exercise  of
their approval rights under Article SEVENTH.

     TENTH:  The Board of Directors shall have the power to amend the By-Laws to
the extent  provided  therein,  subject only to applicable law. Any amendment to
the By-Laws approved by the shareholders of the Corporation  shall not be deemed
to have been adopted by the Corporation  unless it has been previously  approved
by the Board of Directors.

     ELEVENTH: No person who is or was a Director shall be personally liable, as
such,  for  monetary  damages  (other  than under  criminal  statutes  and under
federal, state and local laws imposing liability on directors for the payment of
taxes) unless the person's conduct constitutes self-dealing,  willful misconduct
or recklessness.  No amendment or repeal of this Article ELEVENTH shall apply to
or have any effect on the liability or alleged liability of any person who is or
was a Director  for or with  respect to any acts or  omissions  of the  Director
occurring  prior to the  effective  date of such  amendment  or  repeal.  If the
Business Corporation Law of 1988 is amended to permit a Pennsylvania corporation
to provide greater protection from personal liability for its directors than the
express terms of this Article ELEVENTH, this Article ELEVENTH shall be construed
to provide for such greater protection.

     TWELFTH:  No person who is or was an officer  of the  Corporation  shall be
personally  liable,  as such,  for monetary  damages  (other than under criminal
statutes and under federal, state and local laws imposing liability on directors
for the payment of taxes) unless the person's conduct constitutes  self-dealing,
willful  misconduct  or  recklessness.  No  amendment  or repeal of this Article
TWELFTH shall apply to or have any effect on the liability or alleged  liability
of any person who is or was an officer of the Corporation for or with respect to
any acts or omissions of the officer  occurring  prior to the effective  date of
such amendment or repeal. If the Business  Corporation Law of 1988 is amended to
permit a Pennsylvania  corporation to provide  greater  protection from personal
liability for its officers than the express terms of this Article TWELFTH,  this
Article TWELFTH shall be construed to provide for such greater protection.

     THIRTEENTH: Any or all classes and series of shares of the Corporation,  or
any part thereof,  may be  represented  by  uncertificated  shares to the extent
determined  by the Board of  Directors,  except  that  shares  represented  by a
certificate  that is issued and  outstanding  shall  continue to be  represented
thereby  until the  certificate  is  surrendered  to the  Corporation.  Within a
reasonable  time after the issuance or transfer of  uncertificated  shares,  the
Corporation  shall  send  to the  registered  owner  thereof  a  written  notice
containing the information  required to be set forth or stated on  certificates.
The rights and obligations of the holders of shares  represented by certificates
and the rights and  obligations of the holders of  uncertificated  shares of the
same class and series shall be identical.

     FOURTEENTH:  Subchapters E, F, G, H, I and J and Section 2538 of Subchapter
D, in each case of Chapter 25 of the Business Corporation Law of 1988, shall not
be applicable to the Corporation.



                                      -13-





<PAGE>




     FIFTEENTH:  Henceforth,  these Articles supersede the original Articles and
all amendments filed thereto.







                                      -14-



<PAGE>









                                    RESTATED


                                     BY-LAWS

                                       OF

                               COMCAST CORPORATION

                                    * * * * *
                                  May 26, 2004

                                    * * * * *

         The By-Laws of the Corporation are restated in their entirety to read
as follows:

                                    ARTICLE 1
                                     OFFICES

         Section 1.01 . Registered Office. The registered office of the
Corporation shall be located within the Commonwealth of Pennsylvania at such
place as the Board of Directors (hereinafter referred to as the "Board of
Directors" or the "Board") shall determine from time to time.

         Section 1.02 . Other Offices. The Corporation may also have offices at
such other places, within or without the Commonwealth of Pennsylvania, as the
Board of Directors may determine from time to time.

                                   ARTICLE 2
                            MEETINGS OF SHAREHOLDERS

         Section 2.01 . Place of Meetings of Shareholders. Meetings of
shareholders may be held at such geographic locations, within or without the
Commonwealth of Pennsylvania, as may be fixed from time to time by the Board of
Directors. If no such geographic location is so fixed by the Board of Directors
or the Board of Directors does not determine to hold a meeting by means of
electronic technology (as provided in the next sentence) rather than at a
geographic location, meetings of the shareholders shall be held at the executive
office of the Corporation. If a meeting
 of the shareholders is held by means of
the Internet or other electronic communications technology in a fashion pursuant
to which the shareholders have the opportunity to read or hear the proceedings
substantially concurrently with their occurrence, vote on matters submitted to
the shareholders and pose questions to the Directors, the meeting need not by
held at a particular geographic location.




<PAGE>



         Section 2.02 . Annual Meetings of Shareholders.

         (a) Time. Subject to Article SIXTH of the Articles of Incorporation, a
meeting of the shareholders of the Corporation shall be held in each calendar
year, on such date and at such time as the Board of Directors may determine, or
if the Board of Directors fails to set a date and time, on the second Thursday
of June at 9:00 o'clock a.m., if not a holiday on which national banks are or
may elect to be closed ("Holiday"), and if such day is a Holiday, then such
meeting shall be held on the next business day at such time.

         (b) Election of Directors. At each such annual meeting commencing with
the annual meeting held in 2004, there shall be held an election of Directors to
serve for the ensuing year and until their successors shall have been selected
and qualified or until their earlier death, resignation or removal.

         Section 2.03 . Special Meetings of Shareholders. Special meetings of
the shareholders may be called at any time by the Board of Directors. Special
meetings of the shareholders may not be called by shareholders. Upon the written
instruction of the Board of Directors, which instruction specifies the general
nature of the business to be transacted at such meeting as well as the date,
time and place of such meeting, it shall be the duty of the Secretary to give
due notice thereof as required by Section 2.04 hereof.

         Section 2.04 . Notices of Meetings of Shareholders. Written notice,
complying with Article 6 of these By-Laws, of any meeting of the shareholders,
shall be given to each shareholder of record entitled to vote at the meeting,
other than those excepted by Section 1707 of the Pennsylvania Business
Corporation Law of 1988, as amended (the "Pennsylvania BCL"), at least twenty
days prior to the day named for the meeting, except as provided in Section 6.07.
Such notices may be given by, or at the direction of, the Secretary or other
authorized person.

         Section 2.05 . Quorum of and Action by Shareholders.

         (a) General Rule. A meeting of shareholders duly called shall not be
organized for the transaction of business unless a quorum is present, in person
or by proxy, as to at least one of the matters to be considered. Except as
provided in subsections (c), (d) and (e) of this Section 2.05, the presence, in
person or by proxy, of shareholders entitled to cast at least a majority of the
votes that all shareholders are entitled to cast on a particular matter to be
acted upon at the meeting shall constitute a quorum for the purpose of
consideration of and action on the matter. To the extent that a quorum is
present with respect to consideration of and action on a particular matter or
matters but a quorum is not present as to another matter or matters,
consideration of and action on the matter or matters for which a quorum is
present may occur, and, after such consideration and action, 



                                       2



<PAGE>



the meeting may be adjourned for purposes of the consideration of and action on
the matter or matters for which a quorum is not present.

         (b) Action by Shareholders. Except as otherwise specifically provided
by law, all matters coming before a meeting of shareholders shall be determined
by a vote of shares. Except as otherwise provided by a resolution adopted by the
Board of Directors, by the Articles of Incorporation, by the Pennsylvania BCL or
by these By-Laws, whenever any corporate action is to be taken by vote of the
shareholders of the Corporation at a duly organized meeting of shareholders, it
shall be authorized by a majority of the votes cast at the meeting by the
holders of shares entitled to vote with respect to such matter; provided that in
no event may the required shareholder vote be reduced below that provided above.

         (c) Continuing Quorum. The shareholders present at a duly organized
meeting can continue to do business until adjournment, notwithstanding the
withdrawal of enough shareholders to leave less than a quorum.

         (d) Election of Directors at Adjourned Meetings. Those shareholders
entitled to vote who attend a meeting called for the election of Directors that
has been previously adjourned for one or more periods aggregating at least 5
days for lack of a quorum (whether with respect to a particular matter or all
matters to be considered and acted upon at such meeting), although less than a
quorum as fixed in subsection (a), shall nevertheless constitute a quorum for
the purpose of electing Directors at such reconvened meeting.

         (e) Conduct of Other Business at Adjourned Meetings. Those shareholders
entitled to vote who attend a meeting of shareholders that has been previously
adjourned for one or more periods aggregating at least 15 days because of an
absence of a quorum (whether with respect to a particular matter or all matters
to be considered and acted upon at such meeting), although less than a quorum as
fixed in subsection (a), shall nevertheless constitute a quorum for the purpose
of acting upon any matter set forth in the notice of meeting if the notice
states that those shareholders who attend the adjourned meeting shall
nevertheless constitute a quorum for the purpose of acting upon the matter.

         Section 2.06 . Adjournments.

         (a) General Rule. Adjournments of any regular or special meeting of
shareholders, including one at which Directors are to be elected, may be taken
for such periods as the shareholders present and entitled to vote shall direct.

         (b) Lack of Quorum. Without limiting the generality of Section 2.06(c),
if a meeting cannot be organized because a quorum has not attended, those
present may, except as otherwise provided in the Pennsylvania BCL, adjourn the
meeting to such time and place as they may determine. To the extent, as set
forth in Section 2.05(a), that a quorum was not present with respect to
consideration of and action on a particular matter at a duly called and
organized meeting, 



                                       3



<PAGE>



consideration of and action on such matter may be adjourned to such date, time
and place as those present may determine, and the balance of the matters to be
considered at such meeting for which a quorum was present may be considered and
acted upon at the initial meeting.

         (c) Notice of an Adjourned Meeting. When a meeting of shareholders is
adjourned, it shall not be necessary to give any notice of the adjourned meeting
or of the business to be transacted at an adjourned meeting, other than by
announcement at the meeting at which the adjournment is taken, unless the Board
fixes a new record date for the adjourned meeting or the Pennsylvania BCL
requires notice of the business to be transacted and such notice has not been
previously given.

         Section 2.07 . Voting List, Voting and Proxies.

         (a) Voting List. The officer or agent having charge of the transfer
books for shares of the Corporation shall make a complete list of the
shareholders entitled to vote at any meeting of shareholders, arranged in
alphabetical order, with the address of and the number of shares held by each.
The list shall be produced and kept open at the date, time and place of the
meeting and shall be subject to the inspection of any shareholder during the
whole time of the meeting for the purposes thereof except that, if the
Corporation has 5,000 or more shareholders, in lieu of the making of the list
the Corporation may make the information therein available at the meeting by any
other means.

         (b) Method of Voting. At the discretion of the presiding officer of a
meeting of shareholders, (i) in elections for directors voting need not be by
ballot but may be taken by voice, show of hands or such other method determined
by the presiding officer unless it is required by vote of the shareholders,
before the vote begins, that the vote be taken by ballot and (ii) with respect
to any other action to be taken by vote at the meeting, as set forth in Section
2.05(b), voting need not be by ballot but may be taken by voice, show of hands
or such other method determined by the presiding officer to the fullest extent
permitted by applicable law (including the Pennsylvania BCL).

         (c) Proxies. At all meetings of shareholders, shareholders entitled to
vote may attend and vote either in person or by proxy. Every proxy shall be
executed or authenticated by the shareholder or by such shareholder's duly
authorized attorney-in-fact and shall be filed with, or transmitted to, the
Secretary of the Corporation or its designated agent. A shareholder or such
shareholder's duly authorized attorney-in-fact may execute or authenticate in
writing or transmit an electronic message authorizing another person to act for
such shareholder by proxy. A proxy, unless coupled with an interest (as defined
in Section 1759(d) of the Pennsylvania BCL), shall be revocable at will,
notwithstanding any other agreement or any provision in the proxy to the
contrary, but the revocation of a proxy shall not be effective until notice
thereof has been given to the Secretary of the Corporation or its designated
agent in writing or by electronic transmission. 



                                       4



<PAGE>



An unrevoked proxy shall not be valid after three years from the date of its
execution unless a longer time is expressly provided therein. A proxy shall not
be revoked by the death or incapacity of the maker unless, before the vote is
counted or the authority is exercised, notice of the death or incapacity is
given to the Secretary of the Corporation or its designated agent in writing or
by electronic transmission.

         (d) Judges of Election. In advance of any meeting of shareholders of
the Corporation, the Board of Directors may appoint one or three Judges of
Election, who need not be shareholders and who will have such duties as provided
in Section 1765(a)(3) of the Pennsylvania BCL, to act at the meeting or any
adjournment thereof. If one or three Judges of Election are not so appointed,
the presiding officer of the meeting may, and on the request of any shareholder
shall, appoint one or three Judges of Election at the meeting. In case any
person appointed as a Judge of Election fails to appear or refuses to act, the
vacancy may be filled by appointment made by the Board of Directors in advance
of the convening of the meeting or at the meeting by the presiding officer. A
person who is a candidate for office to be filled at the meeting shall not act
as a Judge of Election. Unless the Pennsylvania BCL permits otherwise, this
Section 2.07(d) may be modified only by a By-Law amendment adopted by the
shareholders.

         (e) No Action by Written Consent in Lieu of a Meeting. Subject to
Article NINTH of the Articles of Incorporation, the shareholders shall not be
permitted to act by written consent in lieu of a meeting.

         Section 2.08 . Participation in Meetings by Electronic Means. The Board
of Directors may permit, by resolution with respect to a particular meeting of
the shareholders, or the presiding officer of such meeting may permit, one or
more persons to participate in that meeting, count for the purposes of
determining a quorum and exercise all rights and privileges to which such person
might be entitled were such person personally in attendance, including the right
to vote, by means of conference telephone or other electronic means, including,
without limitation, the Internet. Unless the Board of Directors so permits by
resolution, or the presiding officer of such meeting so permits, no person may
participate in a meeting of the shareholders by means of conference telephone or
other electronic means.

         Section 2.09 . Business at Meetings of Shareholders. Except as
otherwise provided by law (including but not limited to Rule 14a-8 promulgated
under the Securities and Exchange Act of 1934, as amended, or any successor
provision thereto) or in these By-Laws, the business which shall be conducted at
any meeting of the shareholders shall (a) have been specified in the written
notice of the meeting (or any supplement thereto) given by the Corporation, or
(b) be brought before the meeting at the direction of the Board of Directors, or
(c) be brought before the meeting by the presiding officer of the meeting unless
a majority of the Directors then in office object to such business being
conducted at the meeting, or (d) in the case of any matters intended to be
brought by a 


                                       5



<PAGE>



shareholder before an annual meeting of shareholders for specific action at such
meeting, have been specified in a written notice given to the Secretary of the
Corporation, by or on behalf of any shareholder who shall have been a
shareholder of record on the record date for such meeting and who shall continue
to be entitled to vote thereat (the "Shareholder Notice"), in accordance with
all of the following requirements:

                  (i) Each Shareholder Notice must be delivered to, or mailed
         and received at, the principal executive offices of the Corporation (A)
         in the case of an annual meeting that is called for a date that is
         within 30 days before or after the anniversary date of the immediately
         preceding annual meeting of shareholders, not less than 60 days nor
         more than 90 days prior to such anniversary date, and (B) in the case
         of an annual meeting that is called for a date that is not within 30
         days before or after the anniversary date of the immediately preceding
         annual meeting, not later than the close of business on the tenth day
         following the day on which notice of the date of the meeting was mailed
         or public disclosure of the date of the meeting was made, whichever
         occurs first; and

                  (ii) Each such Shareholder Notice must set forth: (A) the name
         and address of the shareholder who intends to bring the business before
         the meeting; (B) the general nature of the business which such
         shareholder seeks to bring before the meeting and the text of the
         resolution or resolutions which the proposing shareholder proposes that
         the shareholders adopt; and (C) a representation that the shareholder
         is a holder of record of the stock of the Corporation entitled to vote
         at such meeting and intends to appear in person or by proxy at the
         meeting to bring the business specified in the notice before the
         meeting. The presiding officer of the meeting may, in his or her sole
         discretion, refuse to acknowledge any business proposed by a
         shareholder not made in compliance with the foregoing procedure.

         Section 2.10 . Conduct Of Meetings Of Shareholders.

         (a) Presiding Officer. There shall be a presiding officer at every
meeting of the shareholders. Subject to Article SIXTH of the Articles of
Incorporation, the presiding officer shall be appointed by the Board of
Directors or in the manner authorized by the Board of Directors; provided that
if a presiding officer is not designated by the Board of Directors or in the
manner authorized by the Board of Directors, the Chairman of the Board shall be
the presiding officer.

         (b) Authority of Presiding Officer. Except as prescribed by the Board
of Directors, the presiding officer shall determine the order of business and
shall have the authority to establish rules for the conduct of the meeting of
the shareholders.



                                       6



<PAGE>




         (c) Procedural Standard. Any action by the presiding officer in
adopting rules for, and in conducting, a meeting of the shareholders shall be
fair to the shareholders. The conduct of the meeting need not follow Robert's
Rules of Order or any other published rules for the conduct of a meeting.

         (d) Closing of the Polls. The presiding officer shall announce at the
meeting of the shareholders when the polls close for each matter voted upon. If
no announcement is made, the polls shall be deemed to have closed upon the final
adjournment of the meeting. After the polls close, no ballots, proxies or votes,
nor any revocations or changes thereto, may be accepted.

                                   ARTICLE 3
                               BOARD OF DIRECTORS

         Section 3.01 . Board of Directors.

         (a) General Powers. Except as otherwise provided by law, the Articles
of Incorporation or these By-Laws, all powers of the Corporation shall be
exercised by or under the authority of, and the business and affairs of the
Corporation shall be managed under the direction of, the Board of Directors.
Unless the Pennsylvania BCL permits otherwise, this Section 3.01(a) may be
modified only by a By-Law amendment adopted by the shareholders.

         (b) Number. Subject to Article SIXTH of the Articles of Incorporation,
the number of Directors shall be as determined by the Board of Directors from
time to time.

         (c) Vacancies. Each Director shall hold office until the expiration of
the term for which such person was selected and until such person's successor
has been selected and qualified or until such person's earlier death,
resignation or removal. Subject to Article SIXTH of the Articles of
Incorporation, any vacancies on the Board of Directors, including vacancies
resulting from an increase in the number of Directors, may be filled by a
majority vote of the remaining members of the Board of Directors, though less
than a quorum, or by a sole remaining Director, or, if there are no remaining
Directors, by the shareholders, and each person so selected shall be a Director
to serve for the balance of the unexpired term.

         (d) Removal. The entire Board of Directors or any individual Director
may be removed from office only for cause by the vote of the shareholders
entitled to elect directors.

         (e) Qualification. A Director must be a natural person at least 18
years of age.



                                       7





<PAGE>





         Section 3.02 . Place of Meetings. Meetings of the Board of Directors
may be held at such place within or without the Commonwealth of Pennsylvania as
the Board of Directors may appoint from time to time or as may be designated in
the notice of the meeting.

         Section 3.03 . Regular Meetings. A regular meeting of the Board of
Directors shall be held immediately following each annual meeting of the
shareholders, at the place where such meeting of the shareholders is held or at
such other place and time after the annual meeting of shareholders as the Board
of Directors may designate. Subject to Article SIXTH of the Articles of
Incorporation, at such meeting, the Board of Directors shall elect officers of
the Corporation. In addition to such regular meeting, the Board of Directors
shall have the power to fix by resolution the place, date and time of other
regular meetings of the Board of Directors.

         Section 3.04 . Special Meetings. Special meetings of the Board of
Directors shall be held whenever ordered by the Chairman of the Board, the Chief
Executive Officer, by the Board of Directors or by any officer of the
Corporation authorized by Article SIXTH of the Articles of Incorporation to call
special meetings of the Board of Directors for so long as such officer is also a
Director of the Corporation.

         Section 3.05 . Participation in Meetings by Electronic Means. Any
Director may participate in any meeting of the Board of Directors or of any
committee (provided such Director is otherwise entitled to participate), be
counted for the purpose of determining a quorum thereof and exercise all rights
and privileges to which such Director might be entitled were such Director
personally in attendance, including the right to vote, or any other rights
attendant to presence in person at such meeting, by means of conference
telephone or other electronic technology by means of which all persons
participating in the meeting can hear each other.

         Section 3.06 . Notices of Meetings of Board of Directors.

         (a) Regular Meetings. No notice shall be required to be given of any
regular meeting, unless the same is held at other than the place, date or time
for holding such meeting as fixed in accordance with Section 3.03 of these
By-Laws, in which event 48 hours' notice shall be given of the place and time of
such meeting complying with Article 6 of these By-Laws.

         (b) Special Meetings. Written notice stating the place, date and time
of any special meeting of the Board of Directors shall be sufficient if given at
least 48 hours, as provided in Article 6, in advance of the date and time fixed
for the meeting.

         Section 3.07 . Quorum; Action by the Board of Directors. A majority of
the Directors in office shall be necessary to constitute a quorum for the


                                       8




<PAGE>




transaction of business and, subject to Article SIXTH of the Articles of
Incorporation and these By-Laws, the acts of a majority of the Directors present
and voting at a meeting at which a quorum is present shall be the acts of the
Board of Directors. If there is no quorum present at a duly convened meeting of
the Board of Directors, the majority of those present may adjourn the meeting
from place to place and from time to time.

         Section 3.08 . Informal Action by the Board of Directors. Any action
required or permitted to be taken at a meeting of the Board of Directors may be
taken without a meeting if, prior or subsequent to the action, a written consent
or consents thereto by all of the Directors in office is filed with the
Secretary of the Corporation. In addition to other means of filing with the
Secretary, insertion in the minute book of the Corporation shall be deemed
filing with the Secretary regardless of whether the Secretary or some other
authorized person has actual possession of the minute book. Written consents by
all the Directors, executed pursuant to this Section 3.08, may be executed in
any number of counterparts and shall be deemed effective as of the date set
forth therein.

         Section 3.09 . Committees.

         (a) Establishment and Powers. The Board of Directors of the Corporation
may, by resolution adopted by a majority of the Directors in office, establish
one or more committees to consist of one or more Directors of the Corporation.
Any committee, to the extent provided in the applicable resolution of the Board
of Directors or in the By-Laws, shall have and may exercise all of the powers
and authority of the Board of Directors, except that a committee shall not have
any power or authority as to the following:

                  (i) The submission to shareholders of any action requiring
         approval of shareholders under the Pennsylvania BCL.

                  (ii) The creation or filling of vacancies in the Board of
         Directors.

                  (iii) The adoption, amendment or repeal of the By-Laws.

                  (iv) The amendment or repeal of any resolution of the Board of
         Directors that by its terms is amendable or repealable only by the
         Board of Directors.

                  (v) Action on matters committed by the Articles of
         Incorporation, the By-Laws or resolution of the Board of Directors to
         another committee of the Board of Directors.

         (b) Alternate Members. The Board of Directors may designate one or more
Directors otherwise eligible to serve on a committee of the Board as alternate
members of any committee who may replace any absent or disqualified 



                                       9



<PAGE>



member at any meeting of the committee or for the purpose of any written action
by the committee. In the absence or disqualification of a member and alternate
member or members of a committee, the member or members thereof present at any
meeting and not disqualified from voting, whether or not such member or members
constitute a quorum, may unanimously appoint another Director to act at the
meeting in the place of the absent or disqualified member.

         (c) Term. Each committee of the Board of Directors shall serve at the
pleasure of the Board of Directors.

         (d) Status of Committee Action. The term "Board of Directors" or
"Board", when used in any provision of these By-Laws relating to the
organization or procedures of or the manner of taking action by the Board of
Directors, shall be construed to include and refer to any committee of the Board
of Directors. Any provision of these By-Laws relating or referring to action to
be taken by the Board of Directors or the procedure required therefor shall be
satisfied by the taking of corresponding action by a committee of the Board of
Directors to the extent authority to take the action has been delegated to the
committee in accordance with this Section.

         Section 3.10 . Nomination. Nominations for the election of Directors
may be made only (A) by the Board of Directors or (B) by any shareholder of
record entitled to vote in the election of Directors generally at the record
date of the meeting and also on the date of the meeting at which Directors are
to be elected. However, any shareholder entitled to vote in the election of
Directors generally may nominate one or more persons for election as Directors
at a meeting only if written notice of such shareholder's intention to make such
nomination or nominations has been delivered personally to, or been mailed to
and received by the Corporation at, the principal executive offices of the
Corporation, addressed to the attention of the President, (a) with respect to an
election to be held at an annual meeting that is called for a date that is
within 30 days before or after the anniversary date of the immediately preceding
annual meeting of shareholders, not less than 90 days nor more than 120 days
prior to such anniversary date, and (b) with respect either to an election to be
held at an annual meeting that is called for a date that is not within 30 days
before or after the anniversary date of the immediately preceding annual
meeting, or to a special meeting of shareholders called for the purpose of
electing Directors, not later than the close of business on the tenth day
following the day on which notice of the date of the meeting was mailed or
public disclosure of the date of the meeting was made, whichever occurs first.
Each such notice shall set forth: (i) the name and address of the shareholder
intending to make the nomination and of the person or persons to be nominated;
(ii) a representation that the shareholder is a holder of record of shares of
the Corporation entitled to vote at such meeting and intends to appear in person
or by proxy at the meeting to nominate the person or persons specified in the
notice; (iii) a description of all arrangements or understandings between the
shareholder and each nominee and any other person or persons (naming such person
or persons) pursuant to which the nomination or nominations are to be 



                                       10




<PAGE>




made by the shareholder; (iv) such other information regarding each nominee
proposed by such shareholder as would have been required to be included in a
proxy statement filed pursuant to the proxy rules of the Securities and Exchange
Commission had the nominee been nominated by the Board of Directors; and (v) the
written consent of each nominee to serve as a Director of the Corporation if so
elected. The presiding officer of the meeting may, in his or her sole
discretion, declare invalid or refuse to acknowledge any nomination not made in
compliance with the foregoing procedure.

                                    ARTICLE 4
                                    OFFICERS

         Section 4.01 . Election and Office. The Corporation shall have a
Chairman of the Board, a Chief Executive Officer, a President, a Secretary and a
Treasurer who, subject to Article SIXTH of the Articles of Incorporation, shall
be elected by the Board of Directors. Subject to Article SIXTH of the Articles
of Incorporation, the Board of Directors may create the positions of, define the
powers and duties of and elect as additional officers one or more Vice Chairmen
of the Board, one or more Vice Presidents, and one or more other officers or
assistant officers. Any number of offices may be held by the same person. The
Chairman of the Board and any Vice Chairman of the Board must be a Director of
the Corporation. The initial officers of the Corporation (other than the
Chairman of the Board) shall be selected by the Chief Executive Officer in
consultation with the Chairman of the Board.

         Section 4.02 . Term. Each officer of the Corporation shall hold office
until his successor is selected and qualified or until his earlier death,
resignation or removal. Subject to Article SIXTH of the Articles of
Incorporation, any officer may be removed by a vote of a majority of the
Directors then in office. The terms of the Chairman of the Board and the Chief
Executive Officer are fixed pursuant to Article SIXTH of the Articles of
Incorporation.

         Section 4.03 . Powers and Duties of the Chairman of the Board. The
Chairman of the Board shall have such powers and shall perform such duties as
are provided in Article SIXTH of the Articles of Incorporation.

         Section 4.04 . Powers and Duties of the Chief Executive Officer . The
Chief Executive Officer shall have such powers and shall perform such duties as
are provided in Article SIXTH of the Articles of Incorporation.

         Section 4.05 Powers and Duties of the President. The President shall
have such powers and shall perform such duties as may, subject to Article SIXTH
of the Articles of Incorporation, from time to time be assigned to the President
by the Board of Directors.


                                       11



<PAGE>



         Section 4.06 . Powers and Duties of the Secretary. Unless otherwise
determined by the Board of Directors, the Secretary shall be responsible for the
keeping of the minutes of all meetings of the shareholders, the Board of
Directors, and all committees of the Board, in books provided for that purpose,
and for the giving and serving of all notices for the Corporation. The Secretary
shall perform all other duties ordinarily incident to the office of Secretary
and shall have such other powers and perform such other duties as may be
assigned to the Secretary by the Board of Directors. The minute books of the
Corporation may be held by a person other than the Secretary.

         Section 4.07 . Powers and Duties of the Treasurer. Unless otherwise
determined by the Board of Directors, the Treasurer shall have charge of all the
funds and securities of the Corporation. When necessary or proper, unless
otherwise determined by the Board of Directors, the Treasurer shall endorse for
collection on behalf of the Corporation checks, notes and other obligations, and
shall deposit the same to the credit of the Corporation to such banks or
depositories as the Board of Directors may designate and may sign all receipts
and vouchers for payments made to the Corporation. The Treasurer shall be
responsible for the regular entry in books of the Corporation to be kept for
such purpose of a full and accurate account of all funds and securities received
and paid by the Treasurer on account of the Corporation. Whenever required by
the Board of Directors, the Treasurer shall render a statement of the financial
condition of the Corporation. The Treasurer shall have such other powers and
shall perform the duties as may be assigned to such officer from time to time by
the Board of Directors. The Treasurer shall give such bond, if any, for the
faithful performance of the duties of such office as shall be required by the
Board of Directors.

         Section 4.08 . Powers and Duties of the Vice Chairmen, Vice Presidents
and Assistant Officers. Unless otherwise determined by the Board of Directors
and subject to Article SIXTH of the Articles of Incorporation, each Vice
Chairman, Executive Vice President, Senior Vice President, Vice President and
each assistant officer shall have the powers and perform the duties of his or
her respective superior officer, except to the extent such powers and duties are
limited by such superior officer or by the Board of Directors. Executive Vice
Presidents, Senior Vice Presidents, Vice Presidents and assistant officers shall
have such rank as may be designated by the Board of Directors, with Executive
Vice Presidents serving as superior officers to Senior Vice Presidents and
Senior Vice Presidents serving as superior officers to Vice Presidents.
Executive Vice Presidents, Senior Vice Presidents and Vice Presidents may be
designated as having responsibility for a specific area of the Corporation's
affairs, in which event such Executive Vice Presidents, Senior Vice Presidents
or Vice Presidents shall be superior to the other Executive Vice Presidents,
Senior Vice Presidents or Vice Presidents, respectively, in relation to matters
within his or her area. The President shall be the superior officer of the
Executive Vice Presidents, Senior Vice Presidents, Vice Presidents and all other
officer positions created by the Board of Directors unless 



                                       12



<PAGE>



the Board of Directors provides otherwise. The Treasurer and Secretary shall be
the superior officers of the Assistant Treasurers and Assistant Secretaries,
respectively.

         Section 4.09 . Vacancies. Subject to Article SIXTH of the Articles of
Incorporation, the Board of Directors shall have the power to fill any vacancies
in any office occurring for any reason.

         Section 4.10 . Delegation of Office. Subject to Article SIXTH of the
Articles of Incorporation, the Board of Directors may delegate the powers or
duties of any officer of the Corporation to any other person from time to time.

                                   ARTICLE 5
                                  CAPITAL STOCK

         Section 5.01 . Share Certificates.

         (a) Execution. Except as otherwise provided in Section 5.05, the shares
of the Corporation shall be represented by certificates. Unless otherwise
provided by the Board of Directors, every share certificate shall be signed by
two officers and sealed with the corporate seal, which may be a facsimile,
engraved or printed, but where such certificate is signed by a transfer agent or
a registrar, the signature of any corporate officer upon such certificate may be
a facsimile, engraved or printed. In case any officer who has signed, or whose
facsimile signature has been placed upon, any share certificate shall have
ceased to be such officer because of death, resignation or otherwise, before the
certificate is issued, it may be issued with the same effect as if the officer
had not ceased to be such at the date of its issue. The provisions of this
Section shall be subject to any inconsistent or contrary agreement at the time
between the Corporation and any transfer agent or registrar.

         (b) Designations, Voting Rights, Preferences, Limitations and Special
Rights. To the extent the Corporation is authorized to issue shares of more than
one class or series, every certificate shall set forth upon the face or back of
the certificate (or shall state on the face or back of the certificate that the
Corporation will furnish to any shareholder upon request and without charge) a
full or summary statement of the designations, voting rights, preferences,
limitations and special rights of the shares of each class or series authorized
to be issued so far as they have been fixed and determined and the authority of
the Board of Directors to fix and determine the designations, voting rights,
preferences, limitations and special rights of the classes and series of shares
of the Corporation.

         (c) Fractional Shares. Except as otherwise determined by the Board of
Directors, shares or certificates therefor may be issued as fractional shares
for shares held by any dividend reinvestment plan or employee benefit plan
created or approved by the Corporation's Board of Directors, but not by any
other person.



                                       13




<PAGE>



         Section 5.02 . Transfer of Shares. Transfer of shares shall be made on
the books of the Corporation only upon surrender of the share certificate, duly
endorsed or with duly executed stock powers attached and otherwise in proper
form for transfer, which certificate shall be canceled at the time of the
transfer

         Section 5.03 . Determination of Shareholders of Record.

         (a) Fixing Record Date. The Board of Directors of the Corporation may
fix a time prior to the date of any meeting of shareholders as a record date for
the determination of the shareholders entitled to notice of, or to vote at, the
meeting, which time, except in the case of an adjourned meeting, shall be not
more than 90 days prior to the date of the meeting of shareholders. Only
shareholders of record on the date fixed shall be so entitled notwithstanding
any transfer of shares on the books of the Corporation after any record date
fixed as provided in this subsection. The Board of Directors may similarly fix a
record date for the determination of shareholders of record for any other
purpose. When a determination of shareholders of record has been made as
provided in this Section 5.03 for purposes of a meeting, the determination shall
apply to any adjournment thereof unless the Board of Directors fixes a new
record date for the adjourned meeting.

         (b) Determination when No Record Date Fixed. If a record date is not
fixed:

                  (i) The record date for determining shareholders entitled to
         notice of or to vote at a meeting of shareholders shall be at the close
         of business on the day next preceding the day on which notice is given
         or, if notice is waived, at the close of business on the day
         immediately preceding the day on which the meeting is held.

                  (ii) The record date for determining shareholders for any
         other purpose shall be at the close of business on the day on which the
         Board of Directors adopts the resolution relating thereto.

         (c) Certification by Nominee. The Board of Directors may adopt a
procedure whereby a shareholder of the Corporation may certify in writing to the
Corporation that all or a portion of the shares registered in the name of the
shareholder are held for the account of a specified person or persons. The
resolution of the Board of Directors may set forth:

                  (i) the classification of shareholder who may certify;

                  (ii) the purpose or purposes for which the certification may
         be made;

                  (iii) the form of certification and information to be
         contained therein;



                                       14



<PAGE>




                  (iv) if the certification is with respect to a record date,
         the time after the record date within which the certification must be
         received by the Corporation; and

                  (v) such other provisions with respect to the procedure as are
         deemed necessary or desirable.

         Upon receipt by the Corporation of a certification complying with the
procedure, the persons specified in the certification shall be deemed, for the
purposes set forth in the certification, to be the holders of record of the
number of shares specified in place of the shareholder making the certification.

         Section 5.04 . Lost Share Certificates. Unless waived in whole or in
part by the Board of Directors or any of the Chairman, any Vice Chairman, the
President, any Senior Vice President, Secretary or Treasurer, unless the Board
of Directors prohibits such waiver by such officer, any person requesting the
issuance of a new certificate in lieu of an alleged lost, destroyed, mislaid or
wrongfully taken certificate shall (a) give to the Corporation his or her bond
of indemnity with an acceptable surety, and (b) satisfy such other requirements
as may be imposed by the Corporation. Thereupon, a new share certificate shall
be issued to the registered owner or his or her assigns in lieu of the alleged
lost, destroyed, mislaid or wrongfully taken certificate; provided that the
request therefor and issuance thereof have been made before the Corporation has
notice that such shares have been acquired by a bona fide purchaser.

         Section 5.05 . Uncertificated Shares. Notwithstanding anything herein
to the contrary, any or all classes and series of shares, or any part thereof,
may be represented by uncertificated shares to the extent determined by the
Board of Directors, except that shares represented by a certificate that is
issued and outstanding shall continue to be represented thereby until the
certificate is surrendered to the Corporation. Within a reasonable time after
the issuance or transfer of uncertificated shares, the Corporation shall send to
the registered owner thereof a written notice containing the information
required to be set forth or stated on certificates. The rights and obligations
of the holders of shares represented by certificates and the rights and
obligations of the holders of uncertificated shares of the same class and series
shall be identical. Notwithstanding anything herein to the contrary, the
provisions of Section 5.02 shall be inapplicable to uncertificated shares and in
lieu thereof the Board of Directors shall adopt alternative procedures for
registration of transfers.

                                   ARTICLE 6
                         NOTICES; COMPUTING TIME PERIODS

         Section 6.01 . Contents of Notice. Whenever any notice of a meeting of
the Board of Directors or of shareholders is required to be given pursuant to
these By-Laws or the Articles of Incorporation of the Corporation, as the same
may be 



                                       15




<PAGE>



amended from time to time, or otherwise, the notice shall specify the geographic
location, if any, date and time of the meeting; in the case of a special meeting
of shareholders or where otherwise required by law or the By-Laws, the general
nature of the business to be transacted at such meeting; and any other
information required by law.

         Section 6.02 . Method of Notice. Any notice required to be given to any
person under the provisions of the Articles of Incorporation or these By-Laws
shall be given to the person either personally or by sending a copy thereof (i)
by first class or express mail, postage prepaid, or courier service, charges
prepaid, to such person's postal address appearing on the books of the
Corporation, or, in the case of a Director, supplied by such Director to the
Corporation for the purpose of notice or (ii) by facsimile transmission, e-mail
or other electronic communication to such person's facsimile number or address
for e-mail or other electronic communication supplied by such person to the
Corporation for purposes of notice. Notice delivered pursuant to clause (i) of
the preceding sentence shall be deemed to have been given to the person entitled
thereto when deposited in the United States mail or with a courier service for
delivery to that person, and notice pursuant to clause (ii) of the preceding
sentence shall be deemed to have been given to the person entitled thereto when
sent. Except as otherwise provided in these By-Laws, or as otherwise directed by
the Board of Directors, notices of meetings may be given by, or at the direction
of, the Secretary.

         Section 6.03 . Computing Time Periods.

         (a) Days to be Counted. In computing the number of days for purposes of
these By-Laws, all days shall be counted, including Saturdays, Sundays and any
Holiday; provided, however, that if the final day of any time period falls on a
Saturday, Sunday or Holiday, then the final day shall be deemed to be the next
day which is not a Saturday, Sunday or Holiday. In computing the number of days
for the purpose of giving notice of any meeting, the date upon which the notice
is given shall be counted but the day set for the meeting shall not be counted.

         (b) One Day Notice. In any case where only one day's notice is being
given, notice must be given at least 24 hours in advance of the date and time
specified for the meeting in question by delivery in person or by telephone,
telex, telecopier or similar means of communication.

         Section 6.04 . Waiver of Notice. Whenever any notice is required to be
given under the provisions of the Pennsylvania BCL or other applicable law or
the Articles of Incorporation or these By-Laws, a waiver thereof in writing,
signed by the person or persons entitled to the notice, whether before or after
the time stated therein, shall be deemed equivalent to the giving of the notice.
Except as otherwise required by law or the next sentence, neither the business
to be transacted at, nor the purpose of, a meeting need be specified in the
waiver of notice of the meeting. In the case of a special meeting of
shareholders, the waiver 



                                       16



<PAGE>




of notice shall specify the general nature of the business to be transacted.
Attendance of a person at any meeting shall constitute a waiver of notice of the
meeting except where a person attends a meeting for the express purpose of
objecting, at the beginning of the meeting, to the transaction of any business
because the meeting was not lawfully called or convened.

         Section 6.05 . Modification of Proposal Contained in Notice. Whenever
the language of a proposed resolution is included in a written notice of a
meeting required to be given under the provisions of the Pennsylvania BCL or the
Articles of Incorporation or these By-Laws, the meeting considering the
resolution may without further notice adopt it with such clarifying or other
amendments as do not enlarge its original purpose.

         Section 6.06 . Bulk Mail. Notice of any regular or special meeting of
the shareholders, or any other notice required by the Pennsylvania BCL or by the
Articles of Incorporation or these By-Laws to be given to all shareholders or to
all holders of a class or a series of shares, may be given by any class of
post-paid mail if the notice is deposited in the United States mail at least 20
days prior to the day named for the meeting or any corporate or shareholder
action specified in the notice.

         Section 6.07 . Shareholders Without Forwarding Addresses. Notice or
other communications need not be sent to any shareholder with whom the
Corporation has been unable to communicate for more than 24 consecutive months
because communications to the shareholder have been returned unclaimed or the
shareholder has otherwise failed to provide the Corporation with a current
address. Whenever the shareholder provides the Corporation with a current
address, the corporation shall commence sending notices and other communications
to the shareholder in the same manner as to other shareholders.

                                    ARTICLE 7
           LIMITATION OF DIRECTORS' LIABILITY AND INDEMNIFICATION OF
                      DIRECTORS, OFFICERS AND OTHER PERSONS

         Section 7.01 . Limitation of Directors' Liability. No Director of the
Corporation shall be personally liable for monetary damages as such for any
action taken or any failure to take any action unless: (a) the Director has
breached or failed to perform the duties of his or her office under Subchapter B
of Chapter 17 of the Pennsylvania BCL (relating to standard of care and
justifiable reliance), and (b) the breach or failure to perform constitutes
self-dealing, wilful misconduct or recklessness; provided, however, that the
provisions of this Section shall not apply to the responsibility or liability of
a Director pursuant to any criminal statute, or to the liability of a Director
for the payment of taxes pursuant to local, state or federal law.



                                       17




                                       

<PAGE>




         Section 7.02 . Indemnification and Insurance.

         (a) Indemnification of Directors and Officers.

                  (i) Each Indemnitee (as defined below) shall be indemnified
         and held harmless by the Corporation for all actions taken by him or
         her and for all failures to take action (regardless of the date of any
         such action or failure to take action) to the fullest extent permitted
         by Pennsylvania law against all expense, liability and loss (including
         without limitation attorneys fees, judgments, fines, taxes, penalties,
         and amounts paid or to be paid in settlement) reasonably incurred or
         suffered by the Indemnitee in connection with any Proceeding (as
         defined below). No indemnification pursuant to this Section shall be
         made, however, in any case where the act or failure to act giving rise
         to the claim for indemnification is determined by a court to have
         constituted wilful misconduct or recklessness.

                  (ii) The right to indemnification provided in this Section
         shall include the right to have the expenses incurred by the Indemnitee
         in defending any Proceeding paid by the Corporation in advance of the
         final disposition of the Proceeding to the fullest extent permitted by
         Pennsylvania law; provided that, if Pennsylvania law continues so to
         require, the payment of such expenses incurred by the Indemnitee in
         advance of the final disposition of a Proceeding shall be made only
         upon delivery to the Corporation of an undertaking, by or on behalf of
         the Indemnitee, to repay all amounts so advanced without interest if it
         shall ultimately be determined that the Indemnitee is not entitled to
         be indemnified under this Section or otherwise.

                  (iii) To the extent that an Indemnitee has been successful on
         the merits or otherwise in defense of any Proceeding or in defense of
         any claim, issue or matter therein, the Corporation shall indemnify
         such person against expenses (including attorneys' fees) actually and
         reasonably incurred by such person in connection therewith.

                  (iv) Indemnification pursuant to this Section shall continue
         as to an Indemnitee who has ceased to be a Director or officer and
         shall inure to the benefit of his or her heirs, executors and
         administrators.

                  (v) For purposes of this Article, (A) "Indemnitee" shall mean
         each Director and each officer of the Corporation who was or is a party
         to, or is threatened to be made a party to, or is otherwise involved
         in, any Proceeding, by reason of the fact that he or she is or was a
         Director or officer of the Corporation or is or was serving in any
         capacity at the request or for the benefit of the Corporation as a
         Director, officer, employee, agent, partner, or fiduciary of, or in any
         other capacity for, another corporation or any partnership, joint
         venture, trust, employee benefit plan, or other enterprise; and (B)
         "Proceeding" shall mean any 



                                       18




                                       

<PAGE>




         threatened, pending or completed action, suit or proceeding (including
         without limitation an action, suit or proceeding by or in the right of
         the Corporation), whether civil, criminal, administrative or
         investigative.

         (b) Indemnification of Employees and Other Persons. The Corporation
may, by action of its Board of Directors and to the extent provided in such
action, indemnify employees and other persons, and provide for advancement of
expenses to such persons in the manner set forth in (a)(ii), above, as though
they were Indemnitees, except that, if Pennsylvania law continues to so require,
to the extent that an employee or agent of the Corporation has been successful
on the merits or otherwise in defense of any Proceeding or in defense of any
claim, issue or matter therein, the Corporation shall indemnify such person
against expenses (including attorneys' fees) actually and reasonably incurred by
such person in connection therewith. Directors and officers of entities that
have merged into, or have been consolidated with, or have been liquidated into,
the Corporation shall not be Indemnitees with respect to Proceedings involving
any action or failure to act of such Director or officer prior to the date of
such merger, consolidation or liquidation, but such persons may be indemnified
by the Board of Directors pursuant to the first sentence of this Section
7.02(b).

         (c) Non-Exclusivity of Rights. The rights to indemnification and to the
advancement of expenses provided in or pursuant to this Article shall not be
exclusive of any other rights that any person may have or hereafter acquire
under any statute, provision of the Articles of Incorporation or By-Laws,
agreement, vote of shareholders or Directors, or otherwise.

         (d) Insurance. The Corporation may purchase and maintain insurance, at
its expense, for the benefit of any person on behalf of whom insurance is
permitted to be purchased by Pennsylvania law against any expense, liability or
loss, whether or not the Corporation would have the power to indemnify such
person under Pennsylvania or other law. The Corporation may also purchase and
maintain insurance to insure its indemnification obligations whether arising
hereunder or otherwise.

         (e) Fund For Payment of Expenses. The Corporation may create a fund of
any nature, which may, but need not be, under the control of a trustee, or
otherwise may secure in any manner its indemnification obligations, whether
arising hereunder, under the Articles of Incorporation, by agreement, vote of
shareholders or Directors, or otherwise.

         Section 7.03 . Amendment. The provisions of this Article 7 relating to
the limitation of Directors' and officers' liability, to indemnification and to
the advancement of expenses shall constitute a contract between the Corporation
and each of its Directors and officers which may be modified as to any Director
or officer only with that person's consent or as specifically provided in this
Section. Notwithstanding any other provision of these By-Laws relating to their
amendment generally, any repeal or amendment of this Article 7 which is adverse



                                       19






<PAGE>




to any Director or officer shall apply to such Director or officer only on a
prospective basis, and shall not reduce any limitation on the personal liability
of a Director of the Corporation, or limit the rights of an Indemnitee to
indemnification or to the advancement of expenses with respect to any action or
failure to act occurring prior to the time of such repeal or amendment.
Notwithstanding any other provision of these By-Laws, no repeal or amendment of
these By-Laws shall affect any or all of this Article so as either to reduce the
limitation of Directors' liability or limit indemnification or the advancement
of expenses in any manner unless adopted by (a) the unanimous vote of the
Directors of the Corporation then serving, or (b) the affirmative vote of
shareholders entitled to cast at least eighty percent (80%) of the votes that
all shareholders are entitled to cast in the election of Directors; provided
that no such amendment shall have retroactive effect inconsistent with the
preceding sentence.

         Section 7.04 . Changes in Pennsylvania Law. References in this Article
to Pennsylvania law or to any provision thereof shall be to such law, as it
existed on the date this Article was adopted or as such law thereafter may be
changed; provided that (a) in the case of any change which expands the liability
of Directors or limits the indemnification rights or the rights to advancement
of expenses which the Corporation may provide, the rights to limited liability,
to indemnification and to the advancement of expenses provided in this Article
shall continue as theretofore to the extent permitted by law; and (b) if such
change permits the Corporation without the requirement of any further action by
shareholders or Directors to limit further the liability of Directors (or limit
the liability of officers) or to provide broader indemnification rights or
rights to the advancement of expenses than the Corporation was permitted to
provide prior to such change, then liability thereupon shall be so limited and
the rights to indemnification and the advancement of expenses shall be so
broadened to the extent permitted by law.

                                   ARTICLE 8
                                   FISCAL YEAR

         Section 8.01 . Determination of Fiscal Year. Determination of Fiscal
Year. The Board of Directors shall have the power by resolution to fix the
fiscal year of the Corporation. If the Board of Directors shall fail to do so,
the Chief Executive Officer shall fix the fiscal year.

                                   ARTICLE 9

                            ARTICLES OF INCORPORATION

         Section 9.01 . Inconsistent Provisions. In the event of any conflict
between the provisions of these By-Laws and the provisions of the Articles of
Incorporation, including, but not limited to, Article SIXTH of the Articles of



                                       20




                                       

<PAGE>




Incorporation, the provisions of the Articles of Incorporation shall govern and
control.

                                   ARTICLE 10
                                   AMENDMENTS

         Section 10.01 . Amendments. Except as otherwise provided in these
By-Laws or in the Articles of Incorporation, including Article SIXTH, Article
SEVENTH and Article TENTH of the Articles of Incorporation:

         (a) Shareholders. The shareholders entitled to vote thereon shall have
the power to alter, amend or repeal these By-Laws, by the vote of a majority of
the votes cast at a duly organized meeting of shareholders by the holders of
shares entitled to vote thereon, at any regular or special meeting, duly
convened after notice to the shareholders of such purpose. In the case of a
meeting of shareholders to amend or repeal these By-Laws, written notice shall
be given to each shareholder that the purpose, or one of the purposes, of the
meeting is to consider the adoption, amendment or repeal of the By-Laws.

         (b) Board of Directors. The Board of Directors (but not a committee
thereof) shall have the power to alter, amend and repeal these By-Laws,
regardless of whether the shareholders have previously adopted the By-Law being
amended or repealed, subject to the power of the shareholders to change such
action; provided, however, that the Board of Directors shall not have the power
to amend these By-Laws on any subject that is expressly committed to the
shareholders by the express terms hereof, by the Pennsylvania BCL or otherwise.

                                   ARTICLE 11
                     INTERPRETATION OF BY-LAWS; SEPARABILITY

         Section 11.01 . Interpretation. All words, terms and provisions of
these By-Laws shall be interpreted and defined by and in accordance with the
Pennsylvania BCL.

         Section 11.02 . Separability. The provisions of these By-Laws are
independent of and separable from each other, and no provision shall be affected
or rendered invalid or unenforceable by virtue of the fact that for any reason
any other or others of them may be invalid or unenforceable in whole or in part.




                                       21







<PAGE>




                                   ARTICLE 12
                           DETERMINATIONS BY THE BOARD

         Section 12.01 . Effect of Board Determinations. Any determination
involving interpretation or application of these By-Laws made in good faith by
the Board of Directors shall be final, binding and conclusive on all parties in
interest.



                                       22



<PAGE>




                              CONSULTING AGREEMENT

         CONSULTING AGREEMENT ("Agreement"), made as of May 26, 2004, by and
between Comcast Corporation, a Pennsylvania corporation (together with its
successors and assigns permitted under this Agreement, the "Company"), and C.
Michael Armstrong (the "Consultant").

                                   WITNESSETH:

         WHEREAS, the Consultant is employed by the Company pursuant to the
Employment Agreement (as defined herein); and

         WHEREAS, the Consultant has elected to retire from his position as
Non-Executive Chairman of the Board and to retire from employment with the
Company, effective May 26, 2004; and

         WHEREAS, the Company desires to retain the benefit of the Consultant's
knowledge and experience by retaining the Consultant, and the Consultant desires
to accept such position, for the term and upon the other conditions hereinafter
set forth; and

         WHEREAS, in connection with Consultant's retirement from his position
as Non-Executive Chairman of the Board and retirement from employment with the
Company, the parties desire to supersede and replace the Employment Agreement
with this Agreement; and

         WHEREAS, concurrent with the execution of this Agreement, the parties
shall also execute the First Amendment to the Consulting Agreement,
 dated as of
the date hereof (the "First Amendment"), which shall govern the terms under
which Consultant may defer certain compensation received under this Agreement,
as more fully provided for in the First Amendment.

         NOW, THEREFORE, in consideration of the mutual promises and agreements
contained herein and for other good and valuable consideration, the receipt of
which is mutually acknowledged, the Company and the Consultant (individually a
"Party" and together the "Parties") agree as follows:

         Section 1 . Definitions.

         (a) "Affiliate" of a person or other entity shall mean a person or
other entity that directly or indirectly controls, is controlled by, or is under
common control with the person or other entity specified.

         (b) "AT&T" shall mean AT&T Corp., a New York corporation.

         (c) "Board" shall mean the Board of Directors of the Company.





<PAGE>



         (d) "Broadband" shall mean AT&T Broadband Corp., a Delaware
corporation.

         (e) "Cause" shall mean:

                  (i) the Consultant is convicted of a felony involving the
         Consultant's moral turpitude; or

                  (ii) the Consultant is guilty of willful gross neglect or
         willful gross misconduct in carrying out his duties under this
         Agreement, resulting, in either case, in material economic harm to the
         Company, unless the Consultant believed in good faith that such act or
         nonact was in the best interests of the Company.

         (f) "Change in Control" shall mean the occurrence of any of the
following events:

                  (i) An acquisition by any individual, entity or group (within
         the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange
         Act of 1934 (the "Exchange Act")) (an "Entity") of beneficial ownership
         (within the meaning of Rule 13d-3 promulgated under the Exchange Act)
         of 20% or more of either (A) the then outstanding shares of common
         stock of the Company (the "Outstanding Company Stock") or (B) the
         combined voting power of the then outstanding voting securities of the
         Company entitled to vote generally in the election of directors (the
         "Outstanding Company Voting Securities"); excluding, however, the
         following: (1) any acquisition directly from the Company, other than an
         acquisition by virtue of the exercise of a conversion privilege unless
         the security being so converted was itself acquired directly from the
         Company, (2) any acquisition by the Company, (3) any acquisition by any
         employee benefit plan (or related trust) sponsored or maintained by the
         Company or any corporation controlled by the Company, or (4) any
         acquisition by any corporation pursuant to a transaction which complies
         with clauses (A), (B) and (C) of subsection (iii) of this Section 1(f);

                  (ii) A change in the composition of the Board such that the
         individuals who, as of the effective date of this Agreement, constitute
         the Board (such Board shall be hereinafter referred to as the
         "Incumbent Board") cease for any reason to constitute at least a
         majority of the Board; provided, however, that for purposes of this
         definition, any individual who becomes a member of the Board subsequent
         to the effective date of this Agreement, whose election, or nomination
         for election, by the Company's shareholders was approved by a vote of
         at least a two-thirds majority of those individuals who are members of
         the Board and who were also members of the Incumbent Board (or deemed
         to be such pursuant to this 


                                       2


<PAGE>


         proviso) shall be considered as though such individual were a member of
         the Incumbent Board; and provided, further however, that any such
         individual whose initial assumption of office occurs as a result of or
         in connection with either an actual or threatened election contest (as
         such terms are used in Rule 14a-11 of Regulation 14A promulgated under
         the Exchange Act) or other actual or threatened solicitation of proxies
         or consents by or on behalf of an Entity other than the Board shall not
         be so considered as a member of the Incumbent Board;

                  (iii) A merger, reorganization or consolidation to which the
         Company is a party or a sale or other disposition of all or
         substantially all of the assets of the Company (each, a "Corporate
         Transaction"); excluding however, such a Corporate Transaction pursuant
         to which (A) all or substantially all of the individuals and entities
         who are the beneficial owners, respectively, of the Outstanding Company
         Stock and Outstanding Company Voting Securities immediately prior to
         such Corporate Transaction will beneficially own, directly or
         indirectly, more than 60% of, respectively, the outstanding shares of
         common stock, and the combined voting power of the then outstanding
         voting securities entitled to vote generally in the election of
         directors, as the case may be, of the corporation resulting from such
         Corporate Transaction (including, without limitation, a corporation or
         other person which as a result of such transaction owns the Company or
         all or substantially all of the Company's assets either directly or
         through one or more subsidiaries (a "Parent Company")) in substantially
         the same proportions as their ownership, immediately prior to such
         Corporate Transaction, of the Outstanding Company Stock and Outstanding
         Company Voting Securities, as the case may be, (B) no Entity (other
         than the Company, any employee benefit plan (or related trust) of the
         Company, such corporation resulting from such Corporate Transaction
         (or, if reference was made to equity ownership of any Parent Company
         for purposes of determining whether clause (A) above is satisfied in
         connection with the applicable Corporate Transaction, such Parent
         Company) will beneficially own, directly or indirectly, 20% or more of,
         respectively, the outstanding shares of common stock of the corporation
         resulting from such Corporate Transaction (or, if reference was made to
         equity ownership of any Parent Company for purposes of determining
         whether clause (A) above is satisfied in connection with the applicable
         Corporate Transaction, such Parent Company) or the combined voting
         power of the outstanding voting securities of such corporation entitled
         to vote generally in the election of directors unless such ownership
         resulted solely from ownership of securities of the Company prior to
         the Corporate Transaction, and (C) individuals who were members of the
         Incumbent Board will immediately after the consummation of the
         Corporate Transaction constitute at least a two-thirds majority of the


                                       3




<PAGE>


         members of the board of directors of the corporation resulting from
         such Corporate Transaction (or, if reference was made to equity
         ownership of any Parent Company for purposes of determining whether
         clause (A) above is satisfied in connection with the applicable
         Corporate Transaction, of the Parent Company); or

                  (iv) The approval by the shareholders of the Company of a plan
         of complete liquidation or dissolution of the Company.

         (g) "Code" shall mean the Internal Revenue Code of 1986, as amended.

         (h) "Constructive Termination Without Cause" shall mean termination by
the Consultant of his service at his initiative following the occurrence of any
of the following events without his consent:

                  (i) a reduction in the Consultancy Fee or the termination or
         material reduction of any benefits provided under this Agreement (other
         than as part of an across-the-board reduction applicable to all
         executive officers of the Company);

                  (ii) prior to the 2005 Annual Meeting, the failure to elect or
         reelect the Consultant to the Board or the removal of him from the
         Board;

                  (iii) the failure to provide Home Office Support (as defined
         herein) to the Consultant;

                  (iv) the failure of the Company to obtain the assumption in
         writing of its obligation to perform this Agreement by any successor to
         all or substantially all of the assets of the Company within 15
         calendar days after a merger, consolidation, sale or similar
         transaction; or

                  (v) any breach of this Agreement by the Company.

                  Following written notice from the Consultant, as described
         above, the Company shall have 15 calendar days in which to cure. If the
         Company fails to cure, the Consultant's termination shall become
         effective on the 16th calendar day following the written notice.

         (i) "Disability" shall mean the Consultant's inability, due to physical
or mental incapacity, to substantially perform his duties and responsibilities
under this Agreement as determined by a medical doctor selected by the Company
and the Consultant. If the Parties cannot agree on a medical doctor, each Party
shall select a medical doctor and the two doctors shall select a third who shall
be the approved medical doctor for this purpose.


                                       4


<PAGE>


         (j) "EBA" shall mean the Employee Benefits Agreement by and between
AT&T and Broadband dated as of December 19, 2001.

         (k) "Employment Agreement" shall mean the Employment Agreement entered
into as of November 18, 2002 by and between the Company and the Consultant.

         (l) "Fair Market Value" shall mean the value of a share of Stock or a
share of AT&T stock, as the case may be, as traded on the Nasdaq Stock Market or
the New York Stock Exchange, as the case may be, on the date in question, based
on the respective closing prices.

         (m) "Merger Agreement" shall mean the Agreement and Plan of Merger
dated as of December 19, 2001, as amended, by and among AT&T, Broadband, Comcast
Corporation, AT&T Broadband Acquisition Corp., Comcast Acquisition Corp. and the
Company.

         (n) "Stock" shall mean Class A Common Stock of the Company.

         (o) "Term" shall mean the period specified in Section 3 below.

         (p) "Termination Date" shall mean the date that is one year after the
2005 Annual Meeting.

         (q) "2004 Annual Meeting" shall mean the regularly scheduled 2004
annual meeting of the shareholders of the Company.

         (r) "2005 Annual Meeting" shall mean the regularly scheduled 2005
annual meeting of the shareholders of the Company.

         Section 2 . Retirement as Chairman.

         Consultant hereby retires from employment with the Company and from his
position as Non-Executive Chairman of the Board effective as of the close of
business on May 26, 2004 (the "Effective Date").

         Section 3 . Term.

         The Term shall begin on the Effective Date and end on the Termination
Date. Notwithstanding the foregoing, after the Effective Date, the Term may be
earlier terminated by either Party in accordance with the provisions of Section
8.

         Section 4 . Positions, Duties and Responsibilities.

         (a) During the Term, Consultant shall be a senior advisor and
consultant to the Company and, upon reasonable request of the Chief Executive
Officer, or 


                                       5



<PAGE>

an Executive Vice President of the Company mutually designated by the Chief
Executive Officer and the Consultant, make himself available to perform
consulting and advisory services with respect to strategic issues concerning the
Company. Such consulting and advisory services shall be related to such matters
as the Chief Executive Officer of the Company, or an Executive Vice President of
the Company so mutually designated, and Consultant may mutually agree. During
the Term, the Consultant shall accommodate reasonable requests for the
Consultant's consulting and advisory services, by making himself reasonably
available, by phone or otherwise, to perform such services, but in no event
shall Consultant be required to devote more than eighty hours per month to his
services hereunder. Notwithstanding the foregoing, during the time that the
Consultant serves as a director of the Company, he shall devote such time as is
necessary to satisfy his fiduciary duties as a director. In addition, the
Company shall use its reasonable best efforts to ensure that the Consultant
shall serve as a director of the Company through the 2005 Annual Meeting.

         (b) Nothing herein shall preclude the Consultant from (i) serving on
the boards of directors of a reasonable number of other corporations subject to
the approval of the Board in each case (which approval has been given as to the
boards listed in Exhibit A attached hereto), which approval shall not be
unreasonably withheld, (ii) serving on the boards of a reasonable number of
trade associations and/or charitable organizations, (iii) engaging in any
charitable or business activities and community affairs, and (iv) managing his
personal investments and affairs, provided that such activities set forth in
this Section 4(b) do not materially interfere with the proper performance of his
duties and responsibilities under Section 4(a).

         Section 5 . Compensation.

         (a) As soon as practicable after the Effective Date, in recognition of
the Consultant's retirement from employment with the Company and from his
position as Non-Executive Chairman of the Board, the Company shall pay to the
Consultant an amount in cash equal to the sum of (i) the base salary under the
Employment Agreement as in effect immediately prior to the Effective Date,
payable from the Effective Date through April 15, 2005, which shall not be less
than one year's base salary, (ii) the Target Bonus under the Employment
Agreement for calendar year 2004, and (iii) a pro-rata portion of the Target
Bonus under the Employment Agreement for calendar year 2005, equal to such
Target Bonus, multiplied by a fraction, the numerator of which is the number of
days from January 1, 2005 until April 15, 2005 and the denominator of which is
365.

         (b) During the Term, the Consultant shall be paid consultancy fees at
the rate of $900,000 per year (the "Consultancy Fee"). The Consultancy Fee shall
be paid in equal monthly installments on the last day of each month. In no event
shall the Consultancy Fee be decreased.


                                       6



<PAGE>


         Section 6 . Outstanding Long-term Incentive Awards.

         (a) Existing Performance Awards. Subject to the provisions of Section
8, Exhibit B attached hereto sets forth the treatment of outstanding
equity-based awards held by the Consultant as of the Effective Date.

         (b) Options. Except as otherwise provided in Exhibit B, all options
held by the Consultant as of the Effective Time shall continue to vest during
the Term as if he had remained employed by the Company. On the Termination Date,
all options held by the Consultant shall become fully vested and shall remain
exercisable for the remainder of their original ten-year terms.

         Section 7 . Benefit Programs; Reimbursement of Business and Other
Expenses.

         (a) The Consultant shall not be entitled to participate in any employee
benefit plans or other benefits or conditions of employment available to the
employees of the Company, except as provided in Section 6, Section 7 or
elsewhere in this Agreement.

         (b) During the Term, the Consultant shall be entitled to those home
office and secretarial support arrangements in effect as of the date hereof with
respect to his home offices in Connecticut and Florida (with such changes as may
be mutually agreed to by the Company and the Consultant, "Home Office Support").

         (c) From the Effective Date until the 2005 Annual Meeting, the
Consultant shall be entitled to participate in each of the Company's executive
services in accordance with the terms and conditions of such arrangements as
they are in effect from time to time for the Company's Chief Executive Officer
(except for the executive services as set forth below). During the Term, the
Consultant shall be entitled to (i) primary personal use of an airplane on the
same economic terms as the Chief Executive Officer of the Company and (ii) tax
preparation and financial counseling services (plus a gross-up for applicable
taxes payable in connection with the provisions of such services, but only if
such gross-up is provided to a senior executive of the Company). In addition,
the Company shall pay the dues for the Consultant's membership in each of the
Business Roundtable, the G-100 and the Business Council through the 2004 Annual
Meeting.

         (d) During the Term, the Company shall pay when due the premiums for
the Consultant's Senior Management Universal Life Insurance Policy (as in effect
as of the Effective Date), and a gross-up for all federal taxes payable by the
Consultant in connection with the payment of such premiums.



                                       7



<PAGE>


         (e) The Consultant is authorized to incur reasonable expenses in
carrying out his duties and responsibilities under this Agreement and the
Company shall promptly reimburse him for all business expenses incurred in
connection with carrying out the business of the Company, subject to
documentation in accordance with the Company's policy.

         Section 8 . Termination.

         (a) Termination Due to Death. In the event that the Consultant's
performance of consulting services is terminated due to his death, his estate or
his beneficiaries, as the case may be, shall be entitled to the following
benefits:

                  (i) the Consultancy Fee through the end of the month in which
         his death occurs;

                  (ii) all outstanding options, whether or not then exercisable,
         shall become exercisable and shall remain exercisable until the end of
         their originally scheduled ten-year terms; and

                  (iii) all outstanding performance shares and other
         equity-based awards shall vest and be paid out (at target, with respect
         to the performance shares) in a single installment promptly after his
         death.

         (b) Termination Due to Disability. In the event that the Consultant's
service is terminated due to his Disability, he shall be entitled to the
following benefits:

                  (i) the Consultancy Fee through the end of the month in which
         disability benefits commence;

                  (ii) all outstanding options, whether or not then exercisable,
         shall become exercisable and shall remain exercisable until the end of
         their originally scheduled ten-year terms; and

                  (iii) all outstanding performance shares and other
         equity-based awards shall vest and be paid out (at target, with respect
         to the performance shares) in a single installment promptly after his
         termination.

                  In no event shall a termination of the Consultant's service
         for Disability occur until the Party terminating his service gives
         written notice to the other Party in accordance with Section 23 below.


                                       8



<PAGE>


         (c) Termination by the Company for Cause.

                  (i) A termination for Cause shall not take effect unless the
         provisions of this paragraph (i) are complied with. The Consultant
         shall be given written notice by the Board, authorized by a vote of no
         less than 75% of the Board, of the intention to terminate him for
         Cause, such notice (A) to state in detail the particular act or acts or
         failure or failures to act that constitute the grounds on which the
         proposed termination for Cause is based and (B) to be given within six
         months of the Board learning of such act or acts or failure or failures
         to act. The Consultant shall have ten calendar days after the date that
         such written notice has been given to the Consultant in which to cure
         such conduct, to the extent such cure is possible. If he fails to cure
         such conduct, the Consultant shall then be entitled to a hearing before
         the Board. Such hearing shall be held within 15 calendar days of such
         notice to the Consultant, provided he requests such hearing within ten
         calendar days of the written notice from the Board of the intention to
         terminate him for Cause. If, within five calendar days following such
         hearing, the Consultant is furnished written notice by the Board
         confirming that, in its judgment, grounds for Cause on the basis of the
         original notice exist, he shall thereupon be terminated for Cause.

                  (ii) In the event the Company terminates the Consultant's
         service for Cause:

                           (A) the Consultant shall be entitled to the
                  Consultancy Fee through the date of the termination; and

                           (B) all outstanding options which are not exercisable
                  shall be forfeited; exercisable options shall remain
                  exercisable until the earlier of the ninetieth day after the
                  date of termination or the originally scheduled expiration
                  date of the options unless the Board determines otherwise.

         (d) Termination without Cause or Constructive Termination without
Cause. In the event the Consultant's service is terminated by the Company
without Cause, other than due to Disability or death, or in the event there is a
Constructive Termination without Cause, the Consultant shall be entitled to the
following benefits:

                  (i) the Consultancy Fee through the date of termination;

                  (ii) a cash payment of $1,800,000, payable in a single
         installment promptly after his termination;


                                       9


<PAGE>



                  (iii) all outstanding options, whether or not then
         exercisable, shall become exercisable and shall remain exercisable
         until the end of their originally scheduled ten-year terms;

                  (iv) all outstanding performance shares and other equity-based
         awards shall vest and be paid out (at target, with respect to the
         performance shares) in a single installment promptly after his
         termination; and

                  (v) if such termination occurs on or prior to the second
         anniversary of the effective date of the Employment Agreement, the
         Consultant shall be entitled to receive a lump sum cash amount equal to
         the greater of (A) (X) the product of three multiplied by the sum of
         (1) the Base Salary (as defined in the Employment Agreement), (2) the
         annual incentive award, equal to the target bonus established by AT&T
         for 2002, which was 150% of such Base Salary, and (3) the long-term
         performance share award, equal to the performance share target set by
         AT&T for 2002 and (B) the product of four multiplied by the sum of Base
         Salary (as defined in the Employment Agreement), at the annualized rate
         in effect on the date of termination of employment under the Employment
         Agreement, and the Target Bonus (as defined in the Employment
         Agreement) for the year in which the termination of employment under
         the Employment Agreement occurs. If such termination occurs after the
         second anniversary of the effective date of the Employment Agreement,
         the Consultant shall be entitled to receive the payment set forth in
         clause (B) of this Section 8(d)(v).

         (e) Gross-up Payment.

                  (i) If the aggregate of all payments or benefits made or
         provided to the Consultant under this Agreement and under all other
         plans and programs of the Company (the "Aggregate Payment") is
         determined to constitute a Parachute Payment within the meaning of
         Section 280G(b)(2) of the Code, the Company shall pay to the
         Consultant, prior to the time any excise tax imposed by Section 4999 of
         the Code ("Excise Tax") is payable with respect to such Aggregate
         Payment, an additional amount (the "Gross-Up Payment") which, after the
         imposition of all income, employment, excise and other taxes thereon,
         is equal to the Excise Tax on the Aggregate Payment. The determination
         of whether the Aggregate Payment constitutes a Parachute Payment and,
         if so, the amount to be paid to the Consultant and the time of payment
         pursuant to this Section 8(e)(i) shall be made by an independent
         auditor (the "Auditor") selected by the Parties and paid by the
         Company. The Auditor shall be a nationally recognized United States
         public accounting firm which has not, during the two years preceding
         the date of its selection, acted in any way 


                                       10


<PAGE>


         on behalf of the Company or any Affiliate thereof. If the Consultant
         and the Company cannot agree on the firm to serve as the Auditor, then
         the Consultant and the Company shall each designate one accounting firm
         and those two firms shall jointly select the accounting firm to serve
         as the Auditor. All fees and expenses of the Auditor shall be borne
         solely by the Company. Any Gross-Up Payment shall be paid by the
         Company to the Consultant within five calendar days of the receipt of
         the Auditor's determination. Any determination by the Auditor shall be
         binding upon the Company and the Consultant.

                  (ii) As a result of uncertainty in the application of Sections
         280G and 4999 of the Code at the time of the initial determination by
         the Auditor hereunder, it is possible that the Gross-Up Payment made
         will have been an amount more than the Company should have paid
         pursuant to Section 8(e)(i) (the "Overpayment") or that the Gross-Up
         Payment made will have been an amount less than the Company should have
         paid pursuant to Section 8(e)(i) (the "Underpayment"). In the event
         that there is a final determination by the Internal Revenue Service, or
         a final determination by a court of competent jurisdiction, that an
         Overpayment has been made, any such Overpayment shall be treated for
         all purposes as a loan to the Consultant which the Consultant shall
         repay to the Company together with interest at the applicable Federal
         rate provided for in Section 7872(f)(2) of the Code. In the event that
         there is a final determination by the Internal Revenue Service, a final
         determination by a court of competent jurisdiction or a change in the
         provisions of the Code or regulations pursuant to which an Underpayment
         arises under this Agreement, any such Underpayment shall be promptly
         paid by the Company to or for the benefit of the Consultant together
         with interest at the applicable Federal rate provided for in Section
         7872(f)(2) of the Code.

                  (iii) The Consultant shall notify the Company in writing of
         any claim by the Internal Revenue Service that, if successful, would
         result in an Underpayment and would require the payment by the Company
         of an additional Gross-Up Payment. Such notification shall be given as
         soon as practicable but no later than 10 business days after the
         Consultant is informed in writing of such claim and shall apprise the
         Company of the nature of such claim and the date on which such claim is
         requested to be paid. The Consultant shall not pay such claim prior to
         the expiration of the 30 calendar day period following the date on
         which the Consultant gives such notice to the Company (or such shorter
         period ending on the date that any payment of taxes with respect to
         such claim is due). If the Company notifies the Consultant in writing
         prior to the expiration of such period that it desires to contest such
         claim, the Consultant shall:


                                       11


<PAGE>



                           (A) give the Company any information reasonably
                  requested by the Company relating to such claim,

                           (B) take such action in connection with contesting
                  such claim as the Company shall reasonably request in writing
                  from time to time, including, without limitation, accepting
                  legal representation with respect to such claim by an attorney
                  reasonably selected by the Company,

                           (C) cooperate with the Company in good faith in order
                  effectively to contest such claim, and

                           (D) permit the Company to participate in any
                  proceeding relating to such claim;

provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold the Consultant harmless, on an
after-tax basis, for any Excise Tax or income or employment tax (including
interest and penalties with respect thereto) imposed as a result of such
proceeding and payment of costs and expenses. Without limitation on the
foregoing provisions of this Section 8(e), the Company shall control all
proceedings taken in connection with such contest, provided that the Company's
control of the contest shall be limited to issues with respect to which a
Gross-Up Payment would be payable hereunder and Consultant shall be entitled to
settle or contest, as the case may be, any other issue raised by the Internal
Revenue Service or any other taxing authority.

         (f) Other Termination Benefits. In the case of any of the foregoing
terminations the Consultant or his estate shall also be entitled to:

                  (i) the balance of any incentive awards due for performance
         periods which have been completed, but which have not yet been paid;

                  (ii) any expense reimbursements due the Consultant;

                  (iii) with respect to the Consultant only, (A) tax preparation
         and financial counseling services for the period beginning on the date
         of termination and ending on the Termination Date (plus a gross-up for
         all applicable taxes payable in connection with the provisions of such
         services, but only if such gross-up is provided to a senior executive
         of the Company); (B) primary personal use of the Company airplane, on
         the economic terms set forth in Section 7(c), for the period beginning
         on the date of termination and ending on the Termination Date; and (C)
         continued payment by the Company when due of the premiums for the


                                       12



<PAGE>


         Senior Management Universal Life Insurance Policy provided under
         Section 7 of this Agreement, and a gross-up for all federal taxes
         payable in connection with the payment of such premiums, for the period
         beginning on the date of termination and ending on the Termination
         Date;

                  (iv) with respect to the Consultant only, Home Office Support
         for the period beginning on the date of termination and ending on the
         date that is two years after the Termination Date; and

                  (v) other benefits, if any, in accordance with applicable
         plans and programs of the Company and this Agreement.

         (g) No Mitigation; No Offset. In the event of any termination of
service under this Section 8, the Consultant shall be under no obligation to
seek other employment and there shall be no offset against amounts due the
Consultant under this Agreement on account of any remuneration attributable to
any subsequent employment that he may obtain.

         (h) Nature of Payments. Any amounts due under this Section 8 are in the
nature of severance payments considered to be reasonable by the Company and are
not in the nature of a penalty.

         Section 9 . Confidential Information; Prohibited Public Statements;
Publicity.

         (a) The Company (as hereinafter specially defined for purposes of
Sections 9 through 11 hereof), pursuant to the Consultant's performance of
consulting services hereunder, provides the Consultant access to and confides in
him business methods and systems, techniques and methods of operation developed
at great expense by the Company ("Trade Secrets") and which the Consultant
recognizes to be unique assets of the Company's business. The Consultant shall
not, during or at any time after the Term, directly or indirectly, in any manner
utilize or disclose to any person, firm, corporation, association or other
entity, except (i) where required by law, (ii) to directors, consultants or
employees of the Company in the ordinary course of his duties or (iii) during
his performance of consulting services as a consultant or serving as a member of
the Board for such use and disclosure as he shall reasonably determine to be in
the best interest of the Company: (A) any such Trade Secrets, (B) any sales
prospects, customer lists, products, research or data of any kind, or (C) any
information `relating to strategic plans, sales, costs, profits or the financial
condition of the Company or any of its customers or prospective customers, which
are not generally known to the public or recognized as standard practice in the
industry in which the Company shall be engaged. The Consultant further covenants
and agrees that he will promptly deliver to the Company all tangible evidence of
the knowledge and information described in (A), (B) and (C), above, prior to or
at the 



                                       13



<PAGE>


termination of the Consultant's service. For purposes of Sections 9, 10 and 11
hereof the term "Company" shall mean Comcast Corporation ("Comcast") as well as
(1) each of its more than fifty percent (50%) owned subsidiaries and (2) each
other entity in which Comcast directly or indirectly has a greater than ten
percent (10%) equity interest, the fair market value of which interest is in
excess of $50,000,000. In determining Comcast's equity interest for purposes of
this definition, any equity interest which Comcast has an option to purchase
shall be considered as owned by Comcast.

         (b) Neither the Consultant nor the Company, its officers or directors
(collectively, the "Company Affiliated Entities") shall, either during or at any
time after the Term, directly or indirectly make any public statement (including
a private statement reasonably likely to be repeated publicly) reflecting
adversely on the Company Affiliated Entities or the Consultant, as the case may
be, or the business prospects of the Company, except for (i) such statements
which the Consultant may be required to make in the ordinary course of his
position as senior consultant to the Company or (ii) with respect to each of the
Consultant and the Company Affiliated Entities, as otherwise required by
applicable law.

         (c) Neither the Consultant nor the Company Affiliated Entities shall
comment (including private statements reasonably likely to be repeated publicly)
on, or discuss the circumstances surrounding, this Agreement, except as mutually
agreed or as required by applicable law.

         Section 10 . Noncompetition, Noninterference and Nonsolicitation.

         (a) Subject to the geographic limitation of Section 10(b) hereof, the
Consultant, for the period beginning on the Effective Date and ending on the
Termination Date, shall not, directly or indirectly, on his behalf or on behalf
of any other person, firm, corporation, association or other entity, as an
employee or otherwise, engage in, or in any way be concerned with or negotiate
for, or acquire or maintain any ownership interest in any business or activity
which is the same as or competitive with that conducted by the Company at the
termination of his employment, or which was engaged in or developed by the
Company at any time during the term of the Employment Agreement for specific
implementation in the immediate future by the Company.

         (b) The Consultant acknowledges that the Company is engaged in business
throughout the United States and in various foreign countries and that the
Company intends to expand the geographic scope of its activities. Accordingly
and in view of the nature of his position and responsibilities, the Consultant
agrees that the provisions of this Section shall be applicable to each state and
each foreign country, possession or territory in which the Company may be
engaged in business during the Term or the term of the Employment Agreement, or,
with respect to the Consultant's obligations following termination of his
employment 


                                       14




<PAGE>



under the Employment Agreement, at the termination of his service or at any time
within the twelve-month period following the effective date of his termination
of employment under the Employment Agreement.

         (c) The Consultant agrees that, for the period beginning on the
Effective Date and ending on the Termination Date, the Consultant will not,
directly or indirectly, for himself or on behalf of any third party at any time
in any manner, request or cause any of the Company's customers to cancel or
terminate any existing or continuing business relationship with the Company;
solicit, entice, persuade, induce, request or otherwise cause any employee,
officer or agent of the Company (other than clerical employees of the Company)
to refrain from rendering services to the Company or to terminate his or her
relationship, contractual or otherwise, with the Company; induce or attempt to
influence any supplier to cease or refrain from doing business or to decline to
do business with the Company; divert or attempt to divert any supplier from the
Company; or induce or attempt to influence any supplier to decline to do
business with any businesses of the Company as such businesses are constituted
immediately prior to the termination of employment under the Employment
Agreement.

         (d) The Consultant agrees that, for the period beginning on the
Effective Date and ending on the Termination Date, the Consultant will not
directly or indirectly, for himself or on behalf of any third party, solicit for
business in competition with the business of the Company, accept any business in
competition with the business of the Company from or otherwise do, or contract
to do, business in competition with the business of the Company with any person
or entity who, at the time of, or any time during the twelve (12) months
preceding such termination, was an active customer or was actively solicited by
the Company according to the books and records of the Company and within the
knowledge, actual or constructive, of the Consultant.

         (e) Notwithstanding anything to the contrary in this Section 10, the
prohibitions and agreements contained in subsections 10(a), 10(c), and 10(d)
shall terminate immediately upon any termination of Consultant's service
hereunder following a Change in Control.

         (f) Notwithstanding the foregoing, if, following the Term, the
Consultant engages in any behavior that would be prohibited under this Section,
as determined by the Company in its sole discretion, the Company shall be
relieved of its obligations under Section 8(f)(iv) of this Agreement.

         (g) Nothing in this Section 10 shall prohibit the Consultant from being
a passive owner of not more than one percent of the outstanding common stock,
capital stock and equity of any firm, corporation, or enterprise so long as the
Consultant has no active participation in the management of the business of such
firm, corporation or enterprise.


                                       15



<PAGE>



         Section 11 . Equitable Remedies.

         The Consultant acknowledges that his compliance with the covenants in
Sections 9 and 10 of this Agreement is necessary to protect the good will and
other proprietary interests of the Company and that, in the event of any
violation by the Consultant of the provisions of Section 9 or 10 of this
Agreement, the Company will sustain serious, irreparable and substantial harm to
its business, the extent of which will be difficult to determine and impossible
to remedy by an action at law for money damages. Accordingly, the Consultant
agrees that, in the event of such violation or threatened violation by the
Consultant, the Company shall be entitled to any injunction before trial from
any court of competent jurisdiction as a matter of course and upon the posting
of not more than a nominal bond in addition to all such other legal and
equitable remedies as may be available to the Company. The Consultant further
agrees that, in the event any of the provisions of Sections 9 and 10 of this
Agreement are determined by a court of competent jurisdiction to be contrary to
any applicable statute, law or rule, or for any reason to be unenforceable as
written, such court may modify any of such provisions so as to permit
enforcement thereof as thus modified.

         Section 12 . Resolution of Disputes.

         Except as provided in Section 11, any disputes arising under or in
connection with this Agreement shall be resolved by third party mediation of the
dispute and, failing that, by binding arbitration, to be held in a location
mutually agreed to by the Parties, in accordance with the rules and procedures
of the American Arbitration Association. Judgment upon the award rendered by the
arbitrator(s) may be entered in any court having jurisdiction thereof. Each
Party shall bear his or its own costs of the mediation, arbitration or
litigation, except that the Company shall bear all such costs if the Consultant
prevails in such mediation, arbitration or litigation on any material issue.

         Section 13 . Indemnification.

         (a) The Company agrees that if the Consultant is made a party, or is
threatened to be made a party, to any action, suit or proceeding, whether civil,
criminal, administrative or investigative (a "Proceeding"), by reason of the
fact that he is or was a director, officer or employee of the Company or is or
was serving at the request of the Company as a director, officer, member,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, including service with respect to employee benefit plans,
whether or not the basis of such Proceeding is the Consultant's alleged action
in an official capacity while serving as a director, officer, member, employee
or agent, the Consultant shall be indemnified and held harmless by the Company
to the fullest extent legally permitted or authorized by the Company's
certificate of incorporation or bylaws or resolutions of the Board or, if
greater, by the laws of the Commonwealth of 


                                       16



<PAGE>


Pennsylvania, against all cost, expense, liability and loss (including, without
limitation, attorney's fees, judgments, fines, ERISA excise taxes or other
liabilities or penalties and amounts paid or to be paid in settlement)
reasonably incurred or suffered by the Consultant in connection therewith, and
such indemnification shall continue as to the Consultant even if he has ceased
to be a director, member, employee or agent of the Company or other entity and
shall inure to the benefit of the Consultant's heirs, executors and
administrators. The Company shall advance to the Consultant all reasonable costs
and expenses incurred by him in connection with a Proceeding within 20 calendar
days after receipt by the Company of a written request for such advance. Such
request shall include an undertaking by the Consultant to repay the amount of
such advance if it shall ultimately be determined that he is not entitled to be
indemnified against such costs and expenses.

         (b) Neither the failure of the Company (including its board of
directors, independent legal counsel or shareholders) to have made a
determination prior to the commencement of any Proceeding concerning payment of
amounts claimed by the Consultant under Section 13(a) above that indemnification
of the Consultant is proper because he has met the applicable standard of
conduct, nor a determination by the Company (including its board of directors,
independent legal counsel or shareholders) that the Consultant has not met such
applicable standard of conduct, shall create a presumption that the Consultant
has not met the applicable standard of conduct.

         (c) The Company agrees to continue and maintain a directors' and
officers' liability insurance policy covering the Consultant which is no less
favorable than the policy covering senior officers of the Company.

         Section 14 . Assignability; Binding Nature. This Agreement shall be
binding upon and inure to the benefit of the Parties and their respective
successors, heirs (in the case of the Consultant) and assigns. Rights or
obligations of the Company under this Agreement may be assigned or transferred
by the Company pursuant to a merger or consolidation in which the Company is not
the continuing entity, or the sale or liquidation of all or substantially all of
the assets of the Company, provided that the assignee or transferee is the
successor to all or substantially all of the assets of the Company and such
assignee or transferee assumes the liabilities, obligations and duties of the
Company, as contained in this Agreement, either contractually or as a matter of
law. The Company further agrees that, in the event of a sale of assets or
liquidation as described in the preceding sentence, it shall take whatever
action it reasonably can in order to cause such assignee or transferee to
expressly assume the liabilities, obligations and duties of the Company
hereunder. No rights or obligations of the Consultant under this Agreement may
be assigned or transferred by the Consultant other than his rights to
compensation and benefits, which may be transferred only by will or operation of
law.


                                       17



<PAGE>


         Section 15 . The Consultant's Independence and Discretion.

         (a) Nothing herein contained shall be construed to constitute the
Parties hereto as partners or as joint venturers, or either as agent of the
order, or as employer and employee. By virtue of the relationship described
herein the Consultant's relationship to the Company during the Term shall only
be that of an independent contractor and the Consultant shall perform all
services pursuant to this Agreement as an independent contractor. The Consultant
shall not provide any services under the Company's business name, except as
requested hereunder, and shall not present himself as an employee of the
Company.

         (b) Subject only to such specific limitations as are contained in this
Agreement, the manner, means, details or methods by which the Consultant
performs his obligations under this Agreement shall be solely within the
discretion of the Consultant. The Company shall not have the authority to, nor
shall it, supervise, direct or control the manner, means, details or methods
utilized by the Consultant to perform his obligations under this Agreement and
nothing in this Agreement shall be construed to grant the Company any such
authority.

         (c) To the extent consistent with applicable law, the Company will not
withhold any amounts as federal income tax withholding from wages or as employee
contributions under the Federal Insurance Contributions Act or any other state
or federal laws. The Consultant shall be solely responsible for payment of any
required employment taxes or contributions.

         Section 16 . Representation. The Company represents and warrants that
it is fully authorized and empowered to enter into this Agreement and that the
performance of its obligations under this Agreement will not violate any
agreement between it and any other person, firm or organization. The Consultant
represents that the performance of his obligations under this Agreement will not
violate any agreement between him and any other person, firm or organization
that would be violated by the performance of his obligations under this
Agreement.

         Section 17 . Entire Agreement. This Agreement, together with the First
Amendment, contains the entire understanding and agreement between the Parties
concerning the subject matter hereof and supersedes all prior agreements,
understandings, discussions, negotiations and undertakings, whether written or
oral, between the Parties with respect thereto, except, without duplication, for
those provisions of the Employment Agreement that would otherwise survive the
termination of such Employment Agreement. The Consultant acknowledges that,
except as provided herein, he shall not be entitled to any other payment,
benefits or prerequisites from the Company or any of its subsidiaries on account
of his former employment by, or his retirement from, the Company, except that
the 



                                       18



<PAGE>



Consultant shall be entitled to any benefits due to him as a retired employee
under the Company's employee benefit plans.

         Section 18 . Amendment or Waiver. No provision in this Agreement may be
amended unless such amendment is agreed to in writing and signed by the
Consultant and an authorized officer of the Company. No waiver by either Party
of any breach by the other Party of any condition or provision contained in this
Agreement to be performed by such other Party shall be deemed a waiver of a
similar or dissimilar condition or provision at the same or any prior or
subsequent time. Any waiver must be in writing and signed by the Consultant or
an authorized officer of the Company, as the case may be.

         Section 19 . Severability. In the event that any provision or portion
of this Agreement shall be determined to be invalid or unenforceable for any
reason, in whole or in part, the remaining provisions of this Agreement shall be
unaffected thereby and shall remain in full force and effect to the fullest
extent permitted by law so as to achieve the purposes of this Agreement.

         Section 20 . Survivorship. Except as otherwise expressly set forth in
this Agreement, the respective rights and obligations of the Parties hereunder
shall survive any termination of the Consultant's service. This Agreement itself
(as distinguished from the Consultant's service) may not be terminated by either
Party without the written consent of the other Party.

         Section 21 . References. In the event of the Consultant's death or a
judicial determination of his incompetence, reference in this Agreement to the
Consultant shall be deemed, where appropriate, to refer to his beneficiary,
estate or other legal representative.

         Section 22 . Governing Law; Jurisdiction. This Agreement shall be
governed in accordance with the laws of the State of New York without reference
to principles of conflict of laws.

         Section 23 . Notices. All notices and other communications required or
permitted hereunder shall be in writing and shall be deemed given when (a)
delivered personally, (b) sent by certified or registered mail, postage prepaid,
return receipt requested or (c) delivered by overnight courier (provided that a
written acknowledgment of receipt is obtained by the overnight courier) to the
Party concerned at the address indicated below or to such changed address as
such Party may subsequently give such notice of:

If to the Company:               Comcast Corporation
                                 1500 Market Street
                                 Philadelphia, PA 19102
                                 Attention: General Counsel


                                       19



<PAGE>


If to the Consultant:            Mr. C. Michael Armstrong
                                 c/o Comcast Corporation
                                 1114 Avenue of the Americas
                                 New York, NY 10036

         Section 24 . Headings. The headings of the sections contained in this
Agreement are for convenience only and shall not be deemed to control or affect
the meaning or construction of any provision of this Agreement.

         Section 25 . Counterparts. This Agreement may be executed in
counterparts.


                                       20




<PAGE>



         IN WITNESS WHEREOF, the undersigned have executed this Agreement on May
26, 2004 as of the date first written above.

                               COMCAST CORPORATION
                                 
                                 By: /s/Arthur R. Block
                                    -----------------------------------------
                                    Name:    Arthur R. Block
                                    Title:   Senior Vice President,
                                             General Counsel and
                                             Secretary


                                      /s/ C. Michael Armstrong
                                     -----------------------------------------
                                      C. Michael Armstrong



                                       21



<PAGE>


                                                                       EXHIBIT A
                                                                       ---------


                                  DIRECTORSHIPS

Citigroup, Inc.

HCA, Inc.




                                       22



<PAGE>


                                                                       EXHIBIT B
                                                                       ---------


1.       Performance Shares: The 2002 grant of performance shares was converted
         into Company performance shares and AT&T stock units, pursuant to the
         terms of the EBA and the Merger Agreement. Company performance shares
         and AT&T stock units will vest on the Effective Date. Company
         performance shares will be paid out at target as soon as practicable
         after the Effective Date. The form of payout will be at least 50% in
         cash, based on the Fair Market Value of Stock on the day immediately
         preceding the Effective Date, and the remaining portion of the payment
         will be in Stock. The AT&T stock unit portion of the award will be paid
         out in cash based on the Fair Market Value of AT&T common stock on the
         day immediately preceding the Effective Date.

2.       Stock Options: Unvested options granted to the Consultant prior to
         November 18, 2002 shall vest in full on the Effective Date and all
         options granted prior to November 18, 2002 shall remain exercisable
         until the end of their originally scheduled ten-year terms.

3.       Change in Control: Options granted to the Consultant on or after
         November 18, 2002 shall vest upon a Change in Control.




                                       23



<PAGE>




                     FIRST AMENDMENT TO CONSULTING AGREEMENT

         FIRST AMENDMENT (the "Amendment"), dated as of May 26, 2004, to the
CONSULTING AGREEMENT (the "Agreement"), made as of May 26, 2004, by and between
Comcast Corporation, a Pennsylvania corporation (together with its successors
and assigns permitted under this Agreement, the "Company") and C. Michael
Armstrong (the "Consultant").

                                   WITNESSETH:

         WHEREAS, the Consultant is employed by the Company pursuant to the
Employment Agreement;

         WHEREAS, the Consultant has elected to retire from his position as
Non-Executive Chairman of the Board and to retire from employment with the
Company, effective May 26, 2004;

         WHEREAS, the Agreement reflects the Company's desire to retain the
benefit of the Consultant's knowledge and experience by retaining the
Consultant, and the Consultant's desire to accept such position, for the term
and upon the other conditions set forth in the Agreement;

         WHEREAS, the Company and the Consultant wish to supplement the
conditions stated in the Agreement to permit Consultant to defer the receipt of
Consultant Compensation on the same basis as if the Consultant's employment were
continuing through the term of the Agreement;

         NOW, THEREFORE, pursuant to Section 18 of the
 Agreement, and in
consideration of the mutual promises and agreements contained herein and for
other good and valuable consideration, the receipt of which is mutually
acknowledged, the Company and the Consultant hereby amend the Agreement as
follows:

         SECTION 1. Definitions. All capitalized terms shall have the same
meanings as set forth in the Agreement, or as defined in this Amendment as
follows:

         (a) "Account" means the bookkeeping account established and maintained
by the Company in the name of the Consultant, to which all amounts deferred and
earnings allocated under the Amendment shall be credited, and from which all
amounts distributed pursuant to the Amendment shall be debited.

         (b) "Applicable Interest Rate" means:

                  (i) Except as otherwise provided in Section 1(b)(ii), the
interest rate that, when compounded daily pursuant to rules established under
the Deferred Compensation Plan from time to time, is mathematically equivalent
to 12% per annum, compounded annually, or such other rate as generally applies
to active participants in the Deferred Compensation Plan as in effect from time
to time.




<PAGE>




                  (ii) Effective for the period beginning at the end of the Term
until the date the Account is distributed in full, the Prime Rate plus one
percent.

         (c) "Consultant Compensation" means the amounts described in Section 5
of the Agreement.

         (c) "Deferred Compensation Plan" means the Comcast Corporation 2002
Deferred Compensation Plan, as amended from time to time.

         (d) "Income Fund" means a hypothetical investment fund pursuant to
which income, gains and losses are credited to the Account as if the Account
were credited with interest at the Applicable Interest Rate.

         (c) "Initial Election" means a written election on a form provided by
the Company, pursuant to which the Consultant may:

                  (i) Elect to defer all or any portion of the Consultant
Compensation earned following the time that such election is filed; and

                  (ii) Designate the time of payment of the deferred Consultant
Compensation to which the Initial Election relates.

         (d) "Prime Rate" means, for any calendar year, the interest rate that,
when compounded daily pursuant to rules established under the Deferred
Compensation Plan from time to time, is mathematically equivalent to the prime
rate of interest (compounded annually) as published in the Eastern Edition of
The Wall Street Journal on the last business day preceding the first day of such
calendar year, and as adjusted as of the last business day preceding the first
day of each calendar year beginning thereafter.

         (e) "Subsequent Election" means a written election on a form provided
by the Company, pursuant to which the Consultant (or his beneficiaries) may
elect to defer (or, in limited cases, accelerate) the time of payment or to
change the manner of payment of amounts previously deferred in accordance with
the terms of a previously made Initial Election or Subsequent Election.

         SECTION 2. Election to Defer Receipt of Compensation..

         (a) Elections.

                  (i) Initial Elections. Notwithstanding Section 5 of the
Agreement, the Consultant shall have the right to defer all or any portion of
the Consultant Compensation that he would otherwise be entitled to receive in a
calendar year by filing an Initial Election at the time and in the manner
described in this Section 2. The Consultant Compensation for a calendar year
shall be reduced in an amount equal to the portion of the Consultant
Compensation deferred by the Consultant for such calendar year pursuant to the
Consultant's Initial Election.


                                      -2-



<PAGE>


                  (ii) Subsequent Elections. The Consultant shall have the right
to elect to defer the time of payment or to change the manner of payment of
amounts previously deferred in accordance with the terms of a previously made
Initial Election by filing a Subsequent Election at the time, to the extent, and
in the manner described in this Section 2.

         (b) Filing of Initial Election.

                  (i) The Consultant may make an Initial Election on a form
provided by the Company for this purpose. An Initial Election with respect to
Consultant Compensation earned in calendar year 2004 shall be effective only if
it is made within 30 days after the commencement of the Term of the Agreement
(and may apply only with respect to Consultant Compensation payable after the
Consultant files the Initial Election with the Company). An Initial Election
with respect to Consultant Compensation earned in any calendar year beginning
after 2004 shall be effective only if it is made on or before December 31 of the
calendar year preceding the calendar year to which the Initial Election applies.

                  (ii) Contemporaneously with an Initial Election, the
Consultant shall also elect the time of payment of the amount of the deferred
Consultant Compensation to which such Initial Election relates; provided,
however, that except as otherwise provided in this Amendment, no distribution
may commence earlier than January 2nd of the second calendar year beginning
after the date the Initial Election is filed with the Company, nor later than
January 2nd of the eleventh calendar year beginning after the date the Initial
Election is filed with the Company. Further, the Consultant may select with each
Initial Election the manner of distribution in accordance with Section 3 of this
Amendment.

         (c) Subsequent Elections.

                  (i) During the Term. Following an Initial Election or
Subsequent Election, and during the Term, the Consultant may elect to change the
manner of distribution or defer the time of payment of any part or all of the
Account for a minimum of two and a maximum of ten additional years from the
previously-elected payment date, by filing a Subsequent Election with the
Company on or before the close of business on June 30 of the calendar year
preceding the calendar year in which the lump-sum distribution or initial
installment payment would otherwise be made. The Consultant may not make any
Subsequent Elections after the Term.

                  (ii) Following the Consultant's Death: Surviving Spouse as
Beneficiary. If the Consultant designates his surviving spouse as the
beneficiary of all or a portion of the Account, the surviving spouse may elect
to change the time and manner of distribution of the portion of the Account
subject to the beneficiary designation on the same basis and subject to the same
rules as if the Account were held under the Deferred Compensation Plan and the
surviving spouse were named as the Consultant's beneficiary thereunder.

                  (iii) Following the Consultant's Death: Beneficiary Other Than
the Surviving Spouse. If the Consultant designates an individual other than his
surviving spouse as the beneficiary of all or a portion of the Account, such
individual may elect to change the time and manner of distribution of the
portion of the Account subject to the beneficiary designation on 



                                      -3-



<PAGE>



the same basis and subject to the same rules as if the Account were held under
the Deferred Compensation Plan and such individual were named as the
Consultant's beneficiary thereunder.

                  (iv) Most Recently Filed Initial Election or Subsequent
Election Controlling. Unless the distribution of the Account is subject to
acceleration pursuant to Section 2(c)(ii) or Section 2(c)(iii), no distribution
of the amounts credited to the Account shall be made before the payment date
designated by the Consultant (or his beneficiary) on the most recently filed
Initial Election or Subsequent Election.

         SECTION 3. Manner of Distribution.

                  (a) Manner of Distribution. Amounts credited to an Account
shall be distributed, pursuant to an Initial Election or Subsequent Election in
either (i) a lump sum payment or (ii) substantially equal annual installments
over a five (5), ten (10) or fifteen (15) year period or (iii) substantially
equal monthly installments over a period not exceeding fifteen (15) years.

                  (b) Small Balances. Notwithstanding any Initial Election or
Subsequent Election to the contrary:

                           (i) Distributions pursuant to Initial Elections or
Subsequent Elections shall be made in one lump sum payment unless the portion of
the Account subject to distribution, as of both the date of the Initial Election
or Subsequent Election and the benefit commencement date, has a value of more
than $10,000; and

                           (ii) Following the end of the Term, if the amount
credited to the Account has a value of $25,000 or less, the Company may, in its
sole discretion, direct that such amount be distributed to the Consultant (or
his beneficiary, as applicable) in one lump sum payment.

         SECTION 4. Crediting of Income, Gains and Losses on Account. The
Company shall credit income, gains and losses with respect to the Account as if
it were invested in the Income Fund.

         SECTION 5. Status of Deferred Amounts. All Consultant Compensation
deferred under this Amendment shall continue for all purposes to be a part of
the general funds of the Company.

         SECTION 6. Consultant's and Beneficiaries' Status as General Creditors.
The Account shall at all times represent a general obligation of the Company.
The Consultant (and his beneficiaries) shall be general creditors of the Company
with respect to this obligation, and shall not have a secured or preferred
position with respect to the Accounts. Nothing contained herein shall be deemed
to create an escrow, trust, custodial account or fiduciary relationship of any
kind. Nothing contained herein shall be construed to eliminate any priority or
preferred position of a the Consultant (or his beneficiaries) in a bankruptcy
matter with respect to claims for wages.



                                      -4-




<PAGE>


                  SECTION 7. No Alienation of Benefits. Except as otherwise
required by applicable law, the right of the Consultant (and his beneficiaries)
to any benefit or interest under any of the provisions of this Amendment shall
not be subject to encumbrance, attachment, execution, garnishment, assignment,
pledge, alienation, sale, transfer, or anticipation, either by the voluntary or
involuntary act of the Consultant (or the Consultant's beneficiaries) or by
operation of law, nor shall such payment, right, or interest be subject to any
other legal or equitable process.

                  SECTION 8.        Death of Consultant.

                  (a) Death of Consultant. The Consultant's Account shall be
distributed in accordance with the last Initial Election or Subsequent Election
made by the Consultant before his death, unless the Consultant's surviving
spouse or other beneficiary timely elects to accelerate or defer the time or
change the manner of payment pursuant to Section 2(c)(ii) or Section 2(c)(iii).

                  (b) Designation of Beneficiaries. The Consultant (and his
beneficiaries) shall have the right to designate one or more beneficiaries to
receive distributions in the event of the Consultant's (or his beneficiaries')
death by filing with the Company a beneficiary designation on the form provided
by the Company for such purpose. The designation of a beneficiary or
beneficiaries may be changed by the Consultant or his beneficiaries at any time
prior to their death by the delivery to the Company of a new beneficiary
designation form.

                  SECTION 9. Interpretation; Notices. The purpose of this
Amendment is to permit the Consultant to defer the receipt of his Consultant
Compensation on substantially the same basis as if the Consultant Compensation
constituted "compensation" eligible for deferral under the terms and conditions
of the Comcast Corporation 2002 Deferred Compensation Plan, and the Amendment
shall be construed consistent with such purpose. If the Consultant or his
beneficiaries do not receive timely payment of benefits to which such individual
believes he or she is entitled under the Amendment, such individual may make a
claim for benefits to the Company which shall be administered on substantially
the same basis as would apply if such claim were a claim for benefits under the
Deferred Compensation Plan. Claims for benefits under the Amendment, and all
other filings referenced in the Amendment, shall be treated as notices pursuant
to the Agreement.

                  SECTION 10. Withholding of Taxes. Whenever the Company is
required to credit deferred Consultant Compensation to the Account, the Company
shall have the right to require the Consultant to remit to the Company an amount
sufficient to satisfy any federal, state and local withholding tax requirements
prior to the date on which the deferred Consultant Compensation shall be deemed
credited to the Account, or take any action whatever that it deems necessary to
protect its interests with respect to tax liabilities. The Company's obligation
to credit deferred Consultant Compensation to the Account shall be conditioned
on the Consultant's compliance, to the Company's satisfaction, with any
withholding requirement. To the maximum extent possible, the Company shall
satisfy all applicable withholding tax requirements by withholding tax from
other Consultant Compensation or other compensation payable by the Company to
the Consultant, or by the Consultant's delivery of cash to the Company in an
amount equal to the applicable withholding tax, as determined by the Company in
good faith.



                                      -5-



<PAGE>



                  SECTION 11.       Miscellaneous Provisions.

                  (a) Effect of Amendment. This Amendment is intended only to
amend Section 5 of the Agreement, relating to the timing of payment of
Consultant Compensation, as provided in this Amendment. Each other provision of
the Agreement shall continue in full force and effect.

                  (b) Tax Matters. The Consultant acknowledges that:

                           (i) The Company has advised him to consult his tax
advisor with respect to the federal, state and local income tax consequences of
making Initial Elections and Subsequent Elections pursuant to the Amendment.

                           (ii) The Company has delivered to him a copy of the
Prospectus for the Deferred Compensation Plan and he has read the provisions of
the Prospectus relating to tax consequences.

                  (c) Counterparts. This Amendment may be executed in
counterparts.



                                      -6-




<PAGE>



                  IN WITNESS WHEREOF, the undersigned have executed this
Amendment on May 26, 2004.

                                           COMCAST CORPORATION



                        By:/s/ Arthur R. Block
                           --------------------------------------------
                           Name:    Arthur R. Block
                           Title:   Senior Vice President, 
                                    General Counsel and 
                                    Secretary


                           /s/ C. Michael Armstrong
                           --------------------------------------------
                           C. Michael Armstrong




<PAGE>


                                                                      Exhibit 31

                                 CERTIFICATIONS

I, Brian L. Roberts, certify that:

1.   I have reviewed this quarterly report on Form 10-Q of Comcast Corporation;

2.   Based on my knowledge, this report does not contain any untrue statement of
     a material fact or omit to state a material fact necessary to make the
     statements made, in light of the circumstances under which such statements
     were made, not misleading with respect to the period covered by this
     report;

3.   Based on my knowledge, the financial statements, and other financial
     information included in this report, fairly present in all material
     respects the financial condition, results of operations and cash flows of
     the registrant as of, and for, the periods presented in this report;

4.   The registrant's other certifying officers and I are responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

     a)  designed such disclosure controls and procedures, or caused such
         disclosure controls and procedures to be designed under our
         supervision, to ensure that material information relating to the
         registrant, including its consolidated subsidiaries, is made known to
         us by others within
 those entities, particularly during the period in
         which this report is being prepared;

     b)  [Paragraph omitted pursuant to SEC Release Nos. 33-8238 and 34-47986.]

     c)  evaluated the effectiveness of the registrant's disclosure controls and
         procedures and presented in this report our conclusions about the
         effectiveness of the disclosure controls and procedures, as of the end
         of the period covered by this report based on such evaluation; and

     d)  disclosed in this report any change in the registrant's internal
         control over financial reporting that occurred during the registrant's
         most recent fiscal quarter (the registrant's fourth fiscal quarter in
         the case of an annual report) that has materially affected, or is
         reasonably likely to materially affect, the registrant's internal
         control over financial reporting; and

5.   The registrant's other certifying officers and I have disclosed, based on
     our most recent evaluation of internal control over financial reporting, to
     the registrant's auditors and the audit committee of the registrant's board
     of directors (or persons performing the equivalent functions):

     a)  all significant deficiencies and material weaknesses in the design or
         operation of internal control over financial reporting which are
         reasonably likely to adversely affect the registrant's ability to
         record, process, summarize and report financial information; and

     b)  any fraud, whether or not material, that involves management or other
         employees who have a significant role in the registrant's internal
         control over financial reporting.


Date: July 30, 2004



/s/ Brian L. Roberts
--------------------------------------------
Name: Brian L. Roberts
Chief Executive Officer




<PAGE>






I, Lawrence S. Smith, certify that:

1.   I have reviewed this quarterly report on Form 10-Q of Comcast Corporation;

2.   Based on my knowledge, this report does not contain any untrue statement of
     a material fact or omit to state a material fact necessary to make the
     statements made, in light of the circumstances under which such statements
     were made, not misleading with respect to the period covered by this
     report;

3.   Based on my knowledge, the financial statements, and other financial
     information included in this report, fairly present in all material
     respects the financial condition, results of operations and cash flows of
     the registrant as of, and for, the periods presented in this report;

4.   The registrant's other certifying officers and I are responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

     a)  designed such disclosure controls and procedures, or caused such
         disclosure controls and procedures to be designed under our
         supervision, to ensure that material information relating to the
         registrant, including its consolidated subsidiaries, is made known to
         us by others within those entities, particularly during the period in
         which this report is being prepared;

     b)  [Paragraph omitted pursuant to SEC Release Nos. 33-8238 and 34-47986.]

     c)  evaluated the effectiveness of the registrant's disclosure controls and
         procedures and presented in this report our conclusions about the
         effectiveness of the disclosure controls and procedures, as of the end
         of the period covered by this report based on such evaluation; and

     d)  disclosed in this report any change in the registrant's internal
         control over financial reporting that occurred during the registrant's
         most recent fiscal quarter (the registrant's fourth fiscal quarter in
         the case of an annual report) that has materially affected, or is
         reasonably likely to materially affect, the registrant's internal
         control over financial reporting; and

5.   The registrant's other certifying officers and I have disclosed, based on
     our most recent evaluation of internal control over financial reporting, to
     the registrant's auditors and the audit committee of the registrant's board
     of directors (or persons performing the equivalent functions):

     a)  all significant deficiencies and material weaknesses in the design or
         operation of internal control over financial reporting which are
         reasonably likely to adversely affect the registrant's ability to
         record, process, summarize and report financial information; and

     b)  any fraud, whether or not material, that involves management or other
         employees who have a significant role in the registrant's internal
         control over financial reporting.

Date: July 30, 2004


/s/ Lawrence S. Smith
--------------------------------------------
Name: Lawrence S. Smith
Co-Chief Financial Officer





<PAGE>




I, John R. Alchin, certify that:

1.   I have reviewed this quarterly report on Form 10-Q of Comcast Corporation;

2.   Based on my knowledge, this report does not contain any untrue statement of
     a material fact or omit to state a material fact necessary to make the
     statements made, in light of the circumstances under which such statements
     were made, not misleading with respect to the period covered by this
     report;

3.   Based on my knowledge, the financial statements, and other financial
     information included in this report, fairly present in all material
     respects the financial condition, results of operations and cash flows of
     the registrant as of, and for, the periods presented in this report;

4.   The registrant's other certifying officers and I are responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

     a)  designed such disclosure controls and procedures, or caused such
         disclosure controls and procedures to be designed under our
         supervision, to ensure that material information relating to the
         registrant, including its consolidated subsidiaries, is made known to
         us by others within those entities, particularly during the period in
         which this report is being prepared;

     b)  [Paragraph omitted pursuant to SEC Release Nos. 33-8238 and 34-47986.]

     c)  evaluated the effectiveness of the registrant's disclosure controls and
         procedures and presented in this report our conclusions about the
         effectiveness of the disclosure controls and procedures, as of the end
         of the period covered by this report based on such evaluation; and

     d)  disclosed in this report any change in the registrant's internal
         control over financial reporting that occurred during the registrant's
         most recent fiscal quarter (the registrant's fourth fiscal quarter in
         the case of an annual report) that has materially affected, or is
         reasonably likely to materially affect, the registrant's internal
         control over financial reporting; and

5.   The registrant's other certifying officers and I have disclosed, based on
     our most recent evaluation of internal control over financial reporting, to
     the registrant's auditors and the audit committee of the registrant's board
     of directors (or persons performing the equivalent functions):

     a)  all significant deficiencies and material weaknesses in the design or
         operation of internal control over financial reporting which are
         reasonably likely to adversely affect the registrant's ability to
         record, process, summarize and report financial information; and

     b)  any fraud, whether or not material, that involves management or other
         employees who have a significant role in the registrant's internal
         control over financial reporting.

Date: July 30, 2004


/s/ John R. Alchin
--------------------------------------------
Name: John R. Alchin
Co-Chief Financial Officer



                                                                      Exhibit 32





         Certification Pursuant to Section 906 of the Sarbanes-Oxley Act

                                                                   July 30, 2004

Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549

Ladies and Gentlemen:

The certification set forth below is being submitted in connection with the
quarterly report on Form 10-Q of Comcast Corporation (the "Report") for the
purpose of complying with Rule 13a-14(b) or Rule 15d-14(b) of the Securities
Exchange Act of 1934 (the "Exchange Act") and Section 1350 of Chapter 63 of
Title 18 of the United States Code.

Brian L. Roberts, the Chief Executive Officer, Lawrence S. Smith, the Co-Chief
Financial Officer and John R. Alchin, the Co-Chief Financial Officer of Comcast
Corporation, each certifies that, to the best of his knowledge:

     1.   the Report fully  complies with the  requirements  of Section 13(a) or
          15(d) of the Exchange Act; and

     2.   the  information  contained  in the  Report  fairly  presents,  in all
          material respects,  the financial  condition and results of operations
          of Comcast Corporation.


                     /s/ Brian L. Roberts
                     --------------------------------------
                     Name: Brian L. Roberts
                     Chief Executive Officer


                     /s/ Lawrence S. Smith
                     --------------------------------------
                     Name: Lawrence S. Smith
                     Co-Chief Financial Officer


                     /s/ John R. Alchin
                     --------------------------------------
                     Name: John R. Alchin
                     Co-Chief Financial Officer