Comcast Reports Third Quarter 2003 Results

Consolidated Revenue Increased to $4.546 Billion; Consolidated Operating Income Increased to $493 Million; Consolidated Operating Cash Flow Increased to $1.632 Billion; Comcast Cable Reports Pro Forma Operating Cash Flow; Growth of 35.3% to $1.6 Billion; Cable Operating Cash Flow Margin Reached 37%; Cable Operating Income Increased to $534 Million; Comcast Increases Guidance for High-Speed Internet Subscriber Additions for 2003 to 1.7 Million From 1.6 Million; High-Speed Internet Subscribers Increased 472,700 to 4.9 Million; Digital Cable Subscribers Increased 318,300 to 7.3 Million; Exceptional Progress Made In Debt Reduction; Debt Reduced by Nearly $5 Billion Year to Date

Comcast Corporation (Nasdaq: CMCSA, CMCSK) today reported results for the quarter ended September 30, 2003. Comcast will discuss third quarter results on a conference call and webcast today at 10:30 AM Eastern Time. A live broadcast of the conference call will be available on the investor relations website at www.cmcsa.com or www.cmcsk.com.

Brian L. Roberts, president and CEO of Comcast Corporation said, "As we approach the one year anniversary of our acquisition of AT&T Broadband we cannot be more excited about the progress we have made in integrating the new cable systems and the potential for continued growth from our unparalleled cable footprint. We delivered another quarter of exceptional financial and operational results. Operating cash flow from our cable business exceeded $1.6 billion this quarter, a 35% increase over the prior year and our operating cash flow margin continues its rapid improvement from 30% last year to 37% this quarter. Our business strategy is producing better than expected results.

"Demand for our high-speed Internet service is stronger than ever. In the third quarter, we added more than 472,000 new high-speed Internet customers, a terrific result representing an over 39% increase from last year's third quarter. We had more new customer additions during the first nine months of this year than in the entire year of 2002. We are, once again, increasing our guidance for high-speed Internet subscribers for 2003, from 1.6 million to 1.7 million net additions and expect to end 2003 with approximately 5.3 million high speed Internet subscribers."

Mr. Roberts continued, "Our video business is also strong as we continue to add basic subscribers and to enhance our video offering with digital services such as video on demand, high-definition television and soon, digital video recorders. We added more than 318,000 Comcast Digital Cable customers in the quarter, nearly doubling the number of new digital customer additions from the second quarter of 2003."

Mr. Roberts concluded, "While the performance of our operating team has been impressive, we have also made significant progress in strengthening our balance sheet and accelerating our debt reduction plan, primarily as a result of the sale of our interest in QVC. With the upgrade of our networks almost complete, we have set the stage for continued growth in revenue and operating cash flow and for significant free cash flow generation."

Comcast Cable Results

Comcast Cable results for the quarter ended September 30, 2003 are presented on a pro forma basis. Pro forma cable results adjust only for acquisitions and are presented as if the acquisition of AT&T Broadband completed in November 2002 was effective on January 1, 2002. Please refer to Table 7-A and B for reconciliation of historical and pro forma data.

Pro forma cable revenue for the quarter ended September 30, 2003 was $4.374 billion, representing an 8.4% increase over the $4.035 billion in the third quarter of 2002. This increase reflected a 10.9% increase in Comcast's historical systems and a more modest 6.8% increase in the acquired cable systems. Pro forma operating income before depreciation and amortization (Operating Cash Flow) for the quarter was $1.620 billion, an increase of 35.3% over the $1.198 billion for the same period of 2002. Pro forma results include $107 million of acquisition and employee termination-related costs incurred by AT&T Broadband in the third quarter of 2002. Excluding these costs, pro forma cable operating cash flow grew 24.2%. Pro forma operating cash flow margin reached 37.0% this quarter, up significantly from the 29.7% in the third quarter of 2002. Pro forma cable operating income was $534 million in the third quarter compared to pro forma operating income of $112 million in the third quarter of 2002.

Pro forma video revenue increased 5.4% in the third quarter of 2003 compared with the prior year quarter driven by increases in average monthly revenue per basic subscriber and growth in Digital Cable revenue, offset by basic subscriber losses in the acquired systems during 2002. In the third quarter, Comcast Cable added 800 basic cable subscribers, a significant improvement over the combined loss of 133,700 subscribers in the third quarter of 2002. This increase reflects continued gains in the acquired cable systems of 22,700 - a marked turnaround from the third quarter of 2002 when those systems lost 131,100 subscribers. Our Digital Cable customer base grew by 16.6% and average monthly revenue per digital subscriber was $15.09 during the third quarter of 2003 compared to $14.57 in the third quarter of 2002 as a result of re-pricing and repackaging of the digital products in the acquired systems. Pro forma high-speed Internet service revenue for the third quarter of 2003 increased 48.1% over the prior year quarter to $586 million, reflecting a nearly 50% increase in the customer base and average revenue per subscriber of $42.25 in the third quarter, up slightly from $42.22 in the prior-year period. Pro forma cable phone revenue declined 11.5% from the third quarter of 2002 to $189 million, reflecting a decrease in subscribers and average monthly revenue per subscriber as a result of our reduced marketing efforts. At the same time, Comcast has been successful in achieving profitability for this product line. Pro forma advertising revenue increased 7.2% over the prior year quarter to $276 million, reflecting 18.7% growth in regional/national advertising as a result of the continuing success of our regional interconnects, and growth of 1.5% in a soft local advertising market.

Comcast Cable added over 318,000 Digital Cable subscribers to end the third quarter with 7.273 million Digital Cable subscribers, a pro forma increase of 16.6% over the same prior year period, representing a subscriber penetration rate of 34.0%. Comcast Cable continued to enhance its Digital Cable offering by expanding availability of video-on-demand (VOD) and high- definition television (HDTV). VOD is now available to 31% of our subscribers including customers in Philadelphia, Boston, Baltimore and Los Angeles. VOD availability is expected to increase to over 50% of our subscribers by the end of this year. Comcast Cable's HDTV deployment is ahead of schedule, having already reached the year-end goal to have HDTV available to 65% of our subscribers. Comcast now plans to have HDTV available to nearly 75% of subscribers by the end of this year. To further enhance Digital Cable, Comcast plans to roll out Digital Video Recorder (DVR) service beginning in the fourth quarter of 2003 and to have DVRs available to all of the Company's subscribers by the end of 2004.

In the third quarter, Comcast Cable added 472,700 high-speed Internet customers, a pro forma increase in net additions of 39.4% over the same prior year period and nearly 35% above the second quarter of 2003, to finish the third quarter with 4.861 million subscribers, representing a penetration rate of 14.5%. More than 84% of the homes in Comcast's footprint, or over 33 million homes, now have access to high-speed Internet service. This represents the addition of over 1.3 million homes to the service's footprint during the third quarter. Subscriber growth during the fourth quarter is expected to be driven by continuing increases in penetration, expansion of the service's footprint to 34 million homes, and expanded retail distribution to more than 4,000 retail outlets.

In the third quarter, cable capital expenditures totaled $1.045 billion as Comcast Cable completed the rebuild of over 14,800 miles of plant to end the quarter with nearly 92% of its footprint upgraded to provide two-way digital and high-speed Internet services. The acquired systems are now 89% upgraded to deliver two-way digital cable and high-speed Internet service, up from 85% at June 30, 2003. With nearly 43,000 miles upgraded by September 30, 2003, the rebuild is well ahead of schedule and the company now expects to upgrade approximately 53,000 miles of plant this year. By the end of the year, Comcast will have 95% of its network upgraded, 15% ahead of its original goal. This accelerated rebuild will be accomplished while maintaining our original capital expenditure guidance of $4 billion. Comcast expects to complete its network upgrade in 2004.

Content and Other

Comcast's content businesses include E! Networks (E! Entertainment and Style), Comcast-Spectacor, The Golf Channel, Outdoor Life Network, and G4. In the third quarter, Comcast's content businesses reported revenue of $173 million, a 17.5% increase over the third quarter of 2002 and operating cash flow of $50 million, an increase of 48.8% from the $33 million reported in the third quarter of 2002. Operating cash flow reflected increases in distribution and advertising revenues at each of the cable channels offset by continued funding for expansion of Outdoor Life and G4.

Other primarily includes corporate overhead and eliminations between our businesses and reported an operating cash flow loss of $38 million in the third quarter of 2003.

Consolidated Results

The Company's consolidated results include all acquisitions as of the date of their closing. The Company acquired AT&T Broadband in November 2002 adding over 13 million cable subscribers to our customer base. Comcast sold its 57% ownership interest in QVC in September 2003. QVC's results are presented as discontinued operations for all periods presented.

For the three months ended September 30, 2003, the Company reported consolidated revenues of $4.546 billion, as compared to $1.698 billion reported in the third quarter of 2002. Consolidated operating cash flow increased to $1.632 billion from the $642 million reported in the third quarter of 2002. Increases in revenue, operating cash flow, depreciation and amortization and interest expense primarily reflect the acquisition of AT&T Broadband in November 2002. For the three months ended September 30, 2003, the Company reported operating income of $493 million compared to operating income of $271 million in the third quarter of 2002. The Company reported a consolidated net loss from continuing operations of $153 million or $0.07 per share as compared to net income from continuing operations of $24 million or $0.03 per share in the third quarter of 2002. Contributing to the net loss in 2003 was the impact of the acquisition of AT&T Broadband and $182 million in investment losses primarily related to the Company's position in Liberty Media. Please refer to Table 7-A, B and C of this release for a reconciliation of historical and pro forma data and for details regarding non-operating items. For the three months ended September 30, 2003, the Company reported net income of $3.176 billion or $1.41 per share, driven by the gain on the sale of our 57% stake in QVC.

Pro forma consolidated results are presented as if the acquisition of AT&T Broadband was effective on January 1, 2002. For the third quarter of 2003, the Company reported pro forma consolidated revenues of $4.546 billion, an 8.8% increase from the $4.177 billion in the third quarter of 2002. Pro forma consolidated operating cash flow for the third quarter of 2003 was $1.632 billion, a 36.9% increase from the $1.192 billion in the prior year quarter. Included in the third quarter of 2002 is $107 million of acquisition and employee termination related costs incurred by AT&T Broadband in the third quarter of 2002. Excluding these costs, pro forma consolidated operating cash flow grew 25.7%. Pro forma consolidated operating income was $493 million, as compared to operating income of $44 million in the third quarter of 2002.

Balance Sheet and Liquidity

During the third quarter, Comcast continued to make significant progress to strengthen its balance sheet and liquidity position. At September 30, 2003, Comcast's total debt was $30.4 billion, including $5.4 billion of exchangeable notes collateralized by equity securities that the Company owns, resulting in debt excluding exchangeables reaching $25.0 billion at September 30, 2003. The Company reduced total debt by $1.7 billion during the quarter primarily through the use of cash proceeds from the sale of QVC. On September 17, 2003 Comcast completed the sale of QVC, receiving 217.7 million shares of Liberty Media common stock and, after a series of transactions, $4.35 billion in cash and $1 billion of Liberty Media notes. The remaining cash proceeds from the sale of QVC will be used to pay income taxes and to further reduce the amount of debt outstanding.

Financial Guidance 2003

The Company is increasing its guidance for high-speed Internet subscriber net additions to 1.7 million from 1.6 million net additions to finish 2003 with approximately 5.3 million high-speed Internet subscribers. As a result of the Company's reduced marketing efforts and focus on telephone service profitability Comcast now expects to lose approximately 175,000 Comcast Cable phone customers this year, a modest adjustment from the original expectation of up to a 150,000 telephone customer decline. The Company reaffirms all other guidance for 2003 for its cable and content businesses.

This press release contains forward-looking statements. Readers are cautioned that such forward-looking statements involve risks and uncertainties that could significantly affect actual results from those expressed in any such forward-looking statements. Readers are directed to Comcast's Annual Report on Form 10-K for a description of such risks and uncertainties.

Comcast Corporation will host a conference call with the financial community today, October 30, 2003 at 10:30 a.m. Eastern Time (ET). The conference call will be broadcast live on the Company's Investor Relations website at www.cmcsa.com or www.cmcsk.com. A recording of the call will be available on the Investor Relations websites starting at 12:30 p.m. ET on October 30, 2003.

Those parties interested in participating via telephone should dial (847) 619-6818. A telephone replay will begin immediately following the call until October 31, 2003 at midnight ET. To access the rebroadcast, please dial (630) 652-3000 and enter passcode number 7746406.

To automatically receive Comcast financial news by email, please visit www.cmcsa.com or www.cmcsk.com and subscribe to e-mail Alerts.

Comcast Corporation (www.comcast.com) is principally involved in the development, management and operation of broadband cable networks and in the provision of programming content. The Company is the largest cable company in the United States, serving more than 21 million cable subscribers. The Company's content businesses include majority ownership of Comcast Spectacor, Comcast SportsNet, E! Entertainment Television, Style, The Golf Channel, Outdoor Life Network and G4. Comcast Class A common stock and Class A Special common stock trade on The NASDAQ Stock Market under the symbols CMCSA and CMCSK, respectively.