FORM 10-Q (Mark One) (X) Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the Quarterly Period Ended: SEPTEMBER 30, 2003 OR ( ) Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the Transition Period from ________ to ________.

COMCAST HOLDINGS CORPORATION ~~(Exact~~
(Exact name of registrant as specified in its charter) PENNSYLVANIA 23-1709202 - ------------------------------------------------------------------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.)

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

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12-b2 of the Exchange Act). Yes oNo ~~X --- ---~~ý

As of September 30, ~~2003,~~2004, there were 21,591,115 shares of Class A Common Stock, 916,198,519 shares of Class A Special Common Stock and 9,444,375 shares of Class B Common Stock outstanding. ~~__________________________~~

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

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

This Quarterly Report on Form 10-Q is for the three and nine months ended September 30, ~~2003.~~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, "Comcast Holdings," "we," ~~"us,"~~"us" and "our" ~~and the "Company"~~ refer to Comcast Holdings Corporation and its subsidiaries, and "Comcast" refers to Comcast Corporation.

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. ~~Actual events or results may differ materially.~~ In evaluating those statements, you should specifically consider various factors, including the risks and uncertainties outlined ~~below. Those factors may cause~~below and in other reports we file with the SEC. Actual events or our actual results tomay differ materially from any of our forward-looking statements. ~~Factors Affecting Future Operations As more fully described elsewhere in this Quarterly Report, on September 17, 2003, we sold~~

Among other things, our approximate 57% interest in QVC, Inc., our electronic retailing subsidiary, to Liberty Media Corporation. The results of QVC have been reported as discontinued operations for all periods presented in the accompanying condensed consolidated financial statements. In addition, factors thatbusinesses may ~~cause our actual results to differ materially from any of our forward-looking statements presented in this Quarterly Report include, but are not limited to: o~~ be affected by:

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 our approximate 57% interest in QVC, Inc., which markets a wide variety of products directly to consumers primarily on merchandise-focused television programs, to Liberty Media Corporation. Accordingly, financial information related to QVC is presented as a discontinued operation in our financial statements.

COMCAST HOLDINGS CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, ~~2003~~ 2004

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

		Three Months Ended September 30,						Nine Months Ended September 30,
		2004			2003			2004			2003
		(Dollars in millions)
REVENUES		$	2,148		$	1,882		$	6,385		$	5,703
COSTS AND EXPENSES
	Operating (excluding depreciation)		767			661			2,267			2,054
	Selling, general and administrative		604			491			1,705			1,469
	Depreciation		333			330			967			965
	Amortization		55			49			146			136

			1,759			1,531			5,085			4,624

OPERATING INCOME			389			351			1,300			1,079
OTHER INCOME (EXPENSE)
	Interest expense		(147	)		(161	)		(452	)		(500	)
	Interest income (expense) on affiliate notes, net		54			(10	)		136			2
	Investment income (loss), net		96			(166	)		190			(198	)
	Equity in net losses of affiliates		(14	)		(15	)		(33	)		(45	)
	Other income (expense)		82			(1	)		86			1

			71			(353	)		(73	)		(740	)

INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES AND MINORITY INTEREST			460			(2	)		1,227			339
INCOME TAX (EXPENSE) BENEFIT			(219	)		84			(555	)		(48	)

INCOME FROM CONTINUING OPERATIONS BEFORE MINORITY INTEREST			241			82			672			291
MINORITY INTEREST			(2	)		(14	)		(21	)		(33	)

INCOME FROM CONTINUING OPERATIONS			239			68			651			258
INCOME FROM DISCONTINUED OPERATIONS, net of tax						39						168
GAIN ON DISCONTINUED OPERATIONS, net of tax						3,290						3,290

NET INCOME		$	239		$	3,397		$	651		$	3,716

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

COMCAST HOLDINGS CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 2004
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

We have prepared these unaudited condensed consolidated financial statements based upon Securities and Exchange Commission ("SEC") rules that permit reduced disclosure for interim periods. ~~The Company is~~We are an indirect wholly owned subsidiary of Comcast Corporation ("Comcast"). Our presentation differs from the consolidated financial statements of Comcast by excluding both Comcast's corporate operations and certain cable operations, primarily those acquired from AT&T in November 2002 (the "Broadband acquisition"). Subsequent to the Broadband acquisition, all of our and Comcast's cable operations are operated as a single integrated cable business unit. Our condensed consolidated financial statements reflect the assets, liabilities, revenues and expenses directly attributable to us, as well as allocations deemed reasonable by management, to present our financial position, results of operations and cash flows on a stand-alone basis. These allocations are further described in Note 10. All significant intercompany accounts and transactions within our financial statements have been eliminated.

These financial statements include all adjustments that are necessary for a fair presentation of ~~the Company's~~our financial condition and 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 ~~the Company's~~our accounting policies and certain other information, refer to ~~the~~our annual financial statements ~~included in the Company's Annual Report on Form 10-K~~ for the preceding fiscal year ~~ended December 31, 2002.~~as filed with the SEC.

On September 17, 2003, ~~the Company~~we completed the sale of ~~its~~our approximate 57% interest in QVC, Inc. ~~("QVC").~~ 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" (see Note 3).~~ Assets."

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

	Three Months Ended September 30, 2003
Revenues	$	752	$	2,915
Income before income taxes and minority interest	$	123	$	496
Income tax expense	$	47	$	184

Both periods presented above include QVC's operations through August 31, 2003, as reported to us by QVC.

Certain reclassifications have been made to the prior year financial statements to conform to those classifications used in ~~2003.~~ 2004.

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

In January 2003, the Financial Accounting Standards Board ("FASB") issued SFAS No. 143, "Accounting for Asset Retirement Obligations," in June 2001. SFAS No. 143 addresses financial accounting and reporting for obligations associated with the retirement of tangible long-lived assets and the associated asset retirement costs. The Company adopted SFAS No. 143 on January 1, 2003, in accordance with the new statement. The adoption of SFAS No. 143 had no impact on the Company's financial condition or results of operations. SFAS No. 148 The FASB issued SFAS No. 148, "Accounting for Stock-Based Compensation - Transition and Disclosure," in December 2002. SFAS No. 148 amends SFAS No. 123 to provide alternative methods of transition for an entity that voluntarily changes to the fair value based method of accounting for stock-based employee compensation. SFAS No. 148 also amends the disclosure provisions of SFAS No. 123 to require disclosure about the effects on reported net income of an entity's stock-based employee compensation in interim financial statements. SFAS No. 148 is effective for fiscal years beginning after December 31, 2002. The Company adopted SFAS No. 148 on January 1, 2003. The Company did not change to the fair value based method of accounting for stock-based employee compensation. Accordingly, the adoption of SFAS No. 148 would only affect the Company's financial condition or results of operations if Comcast elects to change to the fair value method specified in SFAS No. 123. The adoption of SFAS No. 148 requires the Company to disclose the effects of its stock-based employee compensation in interim financial statements beginning with the first quarter of 2003 (see Note 7). SFAS No. 149 In April 2003, the FASB issued SFAS No. 149, "Amendment of Statement 133 on Derivative Instruments and Hedging Activities." The Statement amends and clarifies accounting for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities under SFAS No. 133. SFAS No. 149 is effective for contracts entered into or modified after June 30, 2003, for hedging relationships designated after June 30, 2003, and to certain preexisting contracts. The Company adopted SFAS No. 149 on July 1, 2003 on a 5 COMCAST HOLDINGS CORPORATION AND SUBSIDIARIES FORM 10-Q QUARTER ENDED SEPTEMBER 30, 2003 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED (Unaudited) prospective basis in accordance with the new statement. The adoption of SFAS No. 149 had no material impact on the Company's financial condition or results of operations. SFAS No. 150 In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity." This Statement establishes standards for how an issuer classifies and measures certain financial instruments with characteristics of both liabilities and equity. SFAS No. 150 requires that an issuer classify a financial instrument that is within its scope as a liability or, in some circumstances, as an asset, with many such financial instruments having been previously classified as equity. SFAS No. 150 is effective for financial instruments entered into or modified after May 31, 2003, and otherwise was effective July 1, 2003. The adoption of SFAS No. 150 did not have a material impact on the Company's financial condition or results of operations. The FASB is addressing certain implementation issues associated with the application of SFAS No. 150. On October 29, 2003, the FASB decided to defer certain provisions of SFAS No. 150 related to mandatorily redeemable financial instruments representing noncontrolling interests in subsidiaries included in consolidated financial statements. The Company will monitor the actions of the FASB and assess the impact, if any, that these actions may have on its financial statements. FIN 45 In November 2002, the FASB issued Interpretation No. 45, "Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others" ("FIN 45"). FIN 45 expands on the accounting guidance of SFAS No.'s 5, 57, and 107 and supercedes FIN 34. FIN 45 clarifies that a guarantor is required to disclose in its interim and annual financial statements its obligations under certain guarantees that it has issued, including the nature and terms of the guarantee, the maximum potential amount of future payments under the guarantee, the carrying amount, if any, for the guarantor's obligations under the guarantee, and the nature and extent of any recourse provisions or available collateral that would enable the guarantor to recover the amounts paid under the guarantee. FIN 45 also clarifies that, for certain guarantees, a guarantor is required to recognize, at the inception of a guarantee, a liability for the fair value of the obligation undertaken in issuing the guarantee. FIN 45 does not prescribe a specific approach for subsequently measuring the guarantor's recognized liability over the term of the related guarantee. The initial recognition and initial measurement provisions of FIN 45 apply on a prospective basis to certain guarantees issued or modified after December 31, 2002. The disclosure requirements in FIN 45 are effective for financial statements of interim or annual periods ending after December 15, 2002. The Company adopted the disclosure provisions of FIN 45 in the fourth quarter of 2002 and adopted the initial recognition and measurement provisions of FIN 45 on January 1, 2003, as required by the Interpretation. The impact of the adoption of FIN 45 will depend on the nature and terms of guarantees entered into or modified by the Company in the future. The adoption of FIN 45 in the first quarter of 2003 did not have a material impact on the Company's financial condition or results of operations (see Note 9). FIN 46 The Company adopted the provisions of FASB 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, clarifies the application of Accounting Research Bulletin 51 to certain entities, defined as variable interest entities ("VIEs"), in which equity investors do not have characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated support from other parties. At the time of the initial application, FIN 46 had no impact on the Company's financial condition or results of operations because the Company previously consolidated all VIEs in which it was the primary beneficiary. Since the Company's initial application, the FASB ~~has been addressing~~addressed various implementation issues ~~that could potentially broaden~~regarding the application of FIN 46 to entities outside its originally interpreted scope, ~~and has issued and proposed several~~focusing on Special Purpose Entities, or SPEs. In December 2003, the FASB ~~Staff Positions.~~revised FIN 46 ("FIN 46R"), which delayed the required implementation date until March 31, 2004 for entities that are not SPEs. The ~~Company does~~adoption of FIN 46R did not ~~expect that these FASB Staff Positions will~~ have a material impact on ~~its~~our financial ~~statements. 6~~ condition or results of operations.

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 are 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. We adopted EITF 03-16 on July 1, 2004. The adoption of EITF 03-16 did not have a material impact on our financial condition or results of operations.

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, funded with borrowings under a note payable to affiliate. 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, our wholly-owned subsidiary, and TechTV began operating as one network called G4techTV, which is available to approximately 44 million cable and satellite homes nationwide. We have classified G4techTV as part of our content business segment (see Note 9).

On July 28, 2004, we exchanged approximately 120 million shares of Liberty Media Corporation ("Liberty") Series A common stock that we held (see Note 4), valued at approximately $1.022 billion based upon the price of Liberty common stock on the closing date of the transaction, with Liberty for 100% of the stock of Liberty's subsidiary, Encore ICCP, Inc. ("Encore"). Encore's assets consisted of cash of approximately $547 million, a 10.4% interest in E! Entertainment Television, Inc. ("E!") and 100% of the International Cable Channels Partnership, Ltd. ("International Channel Networks"). We also received all of Liberty's rights, benefits and obligations under the TCI Music contribution agreement (an agreement between another Comcast cable subsidiary and Liberty), which resulted in the resolution of all pending litigation between Liberty and Comcast regarding the contribution agreement. The Liberty exchange increased our portfolio of programming investments because we now own 60.5% of E! and 100% of International Channel Networks. The exchange was structured as a tax free transaction. We allocated the value of the shares exchanged in the transaction between cash, our additional investment in E!, International

COMCAST HOLDINGS CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, ~~2003~~ 2004
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ~~- CONTINUED~~ (Continued)

(Unaudited) ~~3. ACQUISITIONS AND OTHER SIGNIFICANT EVENTS Sale of QVC On September 17, 2003,~~

Channel Networks and the ~~Company completed the sale to Liberty Media Corporation ("Liberty") of all shares of QVC common stock held by a number of indirect wholly-owned subsidiaries~~resolution of the ~~Company, for an aggregate amount~~Comcast litigation related to the contribution agreement. The values of approximately $7.7 billion, consisting of $4 billion principal amount of Liberty's Floating Rate Senior Notes due 2006 (the "Liberty Notes"), $1.35 billion in cash and approximately 218 million shares of Liberty Series A common stock. The shares had a fair value on the closing date of $10.73 per share. The consideration received, net of transaction costs, over the Company's carrying value of the net assets of QVC resulted in a gain of approximately $3.290 billion, net of approximately $2.865 billion of related income taxes. The Liberty Notes and shares of Liberty Series A common stock received in the transaction have been registered with the SEC. On September 24, 2003, the Company, through its wholly-owned indirect subsidiaries, sold an aggregate of $3.0 billion principal amount of the Liberty Notes for net proceeds of approximately $3.0 billion. The remaining Liberty Notes held by the Company, which bear interest at LIBOR plus 1.5%, are classified as available for sale and the shares of Liberty Series A common stock received by the Company in connection with the sale of QVC are classified as trading securities (see Note 4). The current and noncurrentcertain assets and liabilities are based on preliminary valuations and are subject to adjustment as the valuation reports and any additional information are obtained. The effects of ~~QVC included within~~our acquisition of the ~~related discontinued~~additional interest in E! and the acquisition of International Channel Networks have been reflected in our consolidated statement of operations captions are as follows (in millions): December 31, 2002 ----------- Cash............................................................. $276 Accounts receivable, less allowance for doubtful accounts........ 569 Inventories, net................................................. 479 Other current assets............................................. 157 ----------- Total current assetsfrom the date of discontinued operations............. $1,481 =========== Property and equipment, net of accumulated depreciation.......... $485 Goodwill......................................................... 835 Other intangible assets, net of accumulated amortization......... 170 Other noncurrent assets, net..................................... 105 ----------- Total noncurrent assets of discontinued operations.......... $1,595 =========== Accounts payable................................................. $367 Accrued expenses and other current liabilities................... 449 ----------- Total current liabilities of discontinued operations........ $816 =========== Minority interest................................................ $867 Other noncurrent liabilities..................................... 56 ----------- Total noncurrent liabilities and minority interest of discontinued operations................................. $923 =========== 7 COMCAST HOLDINGS CORPORATION AND SUBSIDIARIES FORM 10-Q QUARTER ENDED SEPTEMBER 30, 2003 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED (Unaudited)the transaction. The results of ~~operations~~International Channel Networks and the impact of ~~QVC prior to its disposition~~our additional interest in E! are ~~included within income from discontinued operations, net of tax in the following periods (in millions):~~

The 2003 periods include QVC operations through August 31, 2003 as reported to the Company by QVC. The amount of income from discontinued operations and gain on discontinued operations is subject to reallocation as additional information is obtained from QVC, which will have no effect on net income. not material for pro forma presentation.

4. INVESTMENTS

		September 30, 2004		December 31, 2003
		(in millions)
Fair value method
	Liberty Media Corporation	$	872	$	2,644
	Liberty Media International		366
	Sprint		574		349
	Other		43		41

			1,855		3,034
Equity method			260		331
Cost method			131		137

	Total investments		2,246		3,502
Less, current investments			81		139

Noncurrent investments		$	2,165	$	3,363

We hold unrestricted equity investments, ~~in certain publicly traded companies,~~ which ~~it accounts~~we account for as available for sale or trading ~~securities.~~securities, in certain publicly traded companies. The net unrealized pre-tax gains on investments accounted for as available for sale securities as of September 30, ~~2003~~2004, and December 31, ~~2002~~2003, of ~~$29~~$10 million and ~~$70~~$42 million, respectively, have been reported in ~~the Company's~~our consolidated balance sheet principally as a component of accumulated other comprehensive ~~income (loss),~~loss, net of related deferred income taxes of ~~$10~~$4 million and ~~$25~~$15 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 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. 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.

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

The cost, fair value and unrealized gains and losses related to ~~the Company's~~our available for sale securities are as follows (in millions): September 30, December 31, 2003 2002 ----------- ----------- Cost...................................... $1,024 $269 Unrealized gains.......................... 34 71 Unrealized losses......................... (5) (1) ----------- ----------- Fair value................................ $1,053 $339 =========== =========== 8 COMCAST HOLDINGS CORPORATION AND SUBSIDIARIES FORM 10-Q QUARTER ENDED SEPTEMBER 30, 2003 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED (Unaudited)

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

Three Months Ended Nine Months Ended September 30, September 30, 2003 2002 2003 2002 -------- -------- ---------- -------- Interest and dividend income.................................... $4 $6 $12 $19 Gains (losses) on sales and exchanges of investments, net....... 22 (101) Investment impairment losses.................................... (6) (69) (227) Unrealized losses on trading securities......................... (167) (181) (98) (1,621) Mark to market adjustments on derivatives related to trading securities...................................... (1) 139 (66) 1,310 Mark to market adjustments on derivatives and hedged items...... (2) (5) 1 (82) -------- -------- ---------- -------- Investment loss, net............................................ ($166) ($47) ($198) ($702) ======== ======== ========== ========

Three Months Ended
September 30,
Nine Months Ended
September 30,

2004
2003
2004
2003

Interest, dividend and other investment income (expense) $ (4 ) $ 5 $ (12 ) $ 13
Gains on sales and exchanges of investments, net 35 34 23
Investment impairment losses (7 ) (10 ) (69 )
Mark to market adjustments on trading securities (59 ) (166 ) (113 ) (98 )
Mark to market adjustments on derivatives related to trading securities 139 (1 ) 297 (66 )
Mark to market adjustments on derivatives and hedged items (8 ) (4 ) (6 ) (1 )

Investment income (loss), net $ 96 ($166 ) $ 190 ($198 )

Other Income
On September 30, 2004, we sold our 20% interest in DHC Ventures, LLC (Discovery Health Channel) to Discovery Communications, Inc. for approximately $149 million in cash and recognized a gain on the sale of approximately $94 million to other income.
5. GOODWILL The changes in the carrying amount of goodwill by business segment (see Note 10) for the periods presented are as follows (in millions): Corporate Cable and Other Total ------------ ------------ ------------ Balance, December 31, 2002...................... $4,693 $918 $5,611 Intersegment transfers...................... 20 (20) ------------ ------------ ------------ Balance, September 30, 2003..................... $4,713 $898 $5,611 ============ ============ ============
6. LONG-TERM DEBT

To simplify Comcast's capital structure, ~~effective with its acquisition of AT&T Corp.'s broadband business ("Broadband") on November 18, 2002,~~ Comcast and certain of its cable holding company subsidiaries, including ~~the Company's~~our wholly owned subsidiary Comcast Cable Communications, ~~Inc.~~LLC ("Comcast Cable"), ~~fully and~~have unconditionally guaranteed each other's debt securities ~~(the "Cross-Guarantee Structure").~~and indebtedness for borrowed money. As of September 30, 2004, $20.588 billion of Comcast's debt securities were entitled to the benefits of the cross-guarantee structure, including $6.350 billion of Comcast Cable's debt securities.

Comcast Holdings Corporation is not a guarantor, and none of its debt is guaranteed. As of September 30, ~~2003, $22.568 billion~~2004, $905 million of ~~Comcast's~~ debt ~~securities were entitled to the benefits~~was outstanding at Comcast Holdings Corporation.

On March 31, 2003, in connection with the closing of the restructuring of Time Warner Entertainment Company L.P., an investment accounted for under the cost method by Comcast, Comcast received $2.1 billion in cash which was used to repay debt, including $8002004, we repaid all $250 million ~~of amounts outstanding under Comcast Cable's revolving credit facility. In May 2003, the Company redeemed, at its scheduled redemption price, the $154 million outstanding~~ principal amount of ~~its 8 1/4%~~our 8.875% senior ~~subordinated~~ notes due ~~2008. The Company~~2007. On May 1, 2004, we repaid all $300 million principal amount of our 8.125% senior notes due 2004. These repayments were both financed ~~the redemption~~ with ~~amounts~~ available ~~under its existing credit facilities. 9~~ cash.

COMCAST HOLDINGS CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, ~~2003~~ 2004
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ~~- CONTINUED~~ (Continued)

(Unaudited) Repayments of Debt with Proceeds from Sales of QVC and Liberty Notes In September 2003, in connection with the sale of QVC and the sale of the Liberty Notes, the Company received an aggregate of approximately $4.35 billion in cash (see Note 3). In September 2003, the Company used a portion of the cash proceeds to repay $550 million on the Comcast Cable revolving credit facility due 2005 and also repaid $1.130 billion outstanding on certain of Comcast's bank credit facilities.

At maturity, holders of ~~the Company's~~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 of $1.807 billion or the market value of Sprint ~~PCS~~ 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 ~~PCS Stock. As of September 30, 2003, the number of Sprint PCS shares held by the Company exceeded the number of ZONES outstanding. The Company split~~common stock.

We separated the accounting for the ZONES into derivative and debt components. ~~The Company records~~We record the change in the fair value of the derivative component of the ZONES ~~(see Note 4)~~ and the change in the carrying value of the debt component of the ZONES as follows (in millions): Nine Months Ended September 30, 2003 2002 ----------- ----------- Balance at Beginning of Period: Debt component................................ $491 $468 Derivative component.......................... 208 1,145 ----------- ----------- Total 699 1,613 Increase in debt component to interest expense........................... 18 17 Increase (decrease) in derivative component to investment loss, net....................... 64 (1,053) Balance at End of Period: Debt component................................ 509 485 Derivative component.......................... 272 92 ----------- ----------- Total $781 $577 =========== ===========

			ZONES
			Nine Months Ended September 30,
			2004			2003
Balance at Beginning of Period:
	Debt component		$	515		$	491
	Derivative component			268			208

		Total		783			699
Change in debt component to interest expense				19			18
Change in derivative component to investment income (loss), net				(139	)		64
Balance at End of Period:
	Debt component			534			509
	Derivative component			129			272

		Total	$	663		$	781

Excluding the derivative component of the ZONES whose changes in fair value are recorded to investment ~~loss,~~income (loss), net, ~~the Company's~~our effective weighted average interest rate ~~on its total debt outstanding~~ was ~~7.49%~~7.48% and ~~7.07%~~7.56% as of September 30, ~~2003~~2004 and December 31, ~~2002,~~2003, respectively.

We use derivative financial instruments to manage ~~its~~our exposure to fluctuations in interest rates and securities prices. ~~The Company has~~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.

As of September 30, ~~2003,~~2004, we and certain ~~subsidiaries~~ of ~~the Company~~our subsidiaries had unused lines of credit of ~~$2.508 billion~~$287 million under ~~their~~our respective credit facilities.

As of September 30, ~~2003, the Company~~2004, we and certain of ~~its~~our subsidiaries had unused irrevocable standby letters of credit totaling ~~$42~~$13 million to cover potential fundings under various agreements. 10

COMCAST HOLDINGS CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, ~~2003~~ 2004
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ~~- CONTINUED~~ (Continued)

We account for stock-based compensation in accordance with ~~Accounting Principles Board~~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 the stock at the date of the grant over the amount an employee must pay to acquire the stock. ~~The Company records~~We record compensation expense for restricted stock awards based on the quoted market price of the stock at the date of the grant and the vesting period. ~~The Company records~~We record compensation expense for stock appreciation rights based on the changes in quoted market prices of the stock or other determinants of fair value.

The following table illustrates the effect ~~on net income (loss) if the Company had applied~~that applying the fair value recognition provisions of SFAS No. 123 to stock-based compensation ~~(dollars~~would have had on net income. Upon further analysis during 2003, it was determined that the expected option lives for options granted in ~~millions):~~

prior years should have been seven years rather than the eight 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 based method for all awards using the accelerated recognition method as permitted under SFAS No. ~~123. Had the Company applied the fair value recognition provisions of SFAS No.~~ 123 using the straight-line rather than the accelerated recognition method of its stock options, total stock-based compensation expense relating to continuing operations, net of related tax effects, would have been $21 million and $26 million for the three months ended September 30, 2003 and 2002, respectively, and $55 million and $75 million for the nine months ended September 30, 2003 and 2002, respectively. The weighted-average fair value at date of grant of a Class A common stock option granted under Comcast's option plan during the three and nine months ended September 30, 2003 was $12.94 and $10.76, respectively. The weighted-average fair value at date of grant of a Class A Special common stock option granted under the Company's option plans during the three and nine months ended September 30, 2002 was $10.33 and $15.50, respectively. The fair value of each option granted during the interim periods in 2003 and 2002 was estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions: 11

(in millions):

The pro forma effect on net income ~~(loss)~~ for the interim periods by applying SFAS No. 123 may not be indicative of the effect on net income or loss in future years ~~since SFAS No. 123 does not take into consideration pro forma compensation expense related to awards made prior to January 1, 1995 and since~~because additional awards in future years are anticipated.

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

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

~~8. STATEMENT OF CASH FLOWS - SUPPLEMENTAL INFORMATION The Company~~

	Three Months Ended September 30,						Nine Months Ended September 30,
	2004			2003			2004			2003
Net income	$	239		$	3,397		$	651		$	3,716
Unrealized losses on marketable securities		(1	)		(19	)		(2	)		(44	)
Reclassification adjustments for losses (gains) included in net income		(8	)		(14	)		7			7
Unrealized losses on the effective portion of cash flow hedges					1						1
Foreign currency translation gains					3						5

Comprehensive income	$	230		$	3,368		$	656		$	3,685

7. STATEMENT OF CASH FLOWS—SUPPLEMENTAL INFORMATION

We made cash payments for interest and income taxes related to continuing operations during the interim periods as follows (in millions): Three Months Ended Nine Months Ended September 30, September 30, 2003 2002 2003 2002 --------- ---------- --------- ---------- Interest............................................. $90 $101 $420 $441 Income taxes......................................... $12 $2 $56 $11

~~The Liberty shares~~ and ~~Liberty Notes~~income taxes during the interim periods as follows (in millions):

	Three Months Ended September 30,		Nine Months Ended September 30,
	2004		2003		2004	2003
Interest	$	86		$	90	$	374	$	420
Income taxes	$	39		$	12	$	141	$	56

During the nine months ended September 30, 2004, Comcast received a federal income tax refund of approximately $536 million.

During the nine months ended September 30, 2004, property, plant and equipment allocations were made with another Comcast subsidiary through non-cash intercompany transactions resulting in net transfers out of $57 million. During the nine months ended September 30, 2004, we recorded additional liabilities of approximately $35 million relating to a subsidiary of Comcast, a transaction that is considered a non-cash financing activity. This additional liability resulted in a corresponding increase to due from affiliates, net, in our consolidated balance sheet.

During the nine months ended September 30, 2004, in connection with the ~~sale~~acquisition of ~~QVC are~~TechTV (see Note 3), we issued shares in G4techTV with a value of approximately $70 million, which is considered a non-cash financing and investing activity.

During the nine months ended September 30, 2004, in connection with the Liberty Exchange Agreement (see Note 3), we received non-cash consideration of approximately $475 million, which is considered a non-cash investing ~~activities (see Note 3). 12~~ activity.

COMCAST HOLDINGS CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, ~~2003~~ 2004
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ~~- CONTINUED~~ (Continued)

Litigation has been filed against ~~the Company~~us as a result of our alleged conduct ~~of the Company~~ with respect to ~~its~~our investment in and distribution relationship with At Home Corporation. At Home was a provider of high-speed Internet services ~~which~~that filed for bankruptcy protection in September 2001. Filed actions are: (i) class action lawsuits against ~~the Company,~~us, Brian L. Roberts ~~(the Company's~~(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 ~~on the part of the Company and the other defendants~~ in connection with transactions agreed to in March 2000 among At Home, ~~the Company,~~ AT&T, ~~and~~ 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, ~~Inc.,~~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; and (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 ~~the Company,~~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~~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. 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. 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 ~~the Company~~us and Mr. Roberts, leaving only a claim ~~against them~~ 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.~~York, and we have moved to dismiss the Section 16(b) claims. The ~~Company denies~~court dismissed the Section 16(b) claims against us, leaving only the claim for breach of fiduciary duty.

We deny any wrongdoing in connection with the claims ~~which~~that have been made directly against ~~the Company, its~~us, our subsidiaries and Brian L. Roberts, and ~~intends~~intend to defend all of these claims vigorously. ~~In management's opinion, the~~The final disposition of these claims is not expected to have a material adverse effect on ~~the Company's~~our consolidated financial position, but could possibly be material to ~~the Company's~~our consolidated results of operations of any one period. Further, no assurance can be given that any adverse outcome would not be material to ~~such~~our consolidated financial position. ~~Starz Encore. - ------------- Some of the entities formerly attributed to Broadband which~~

We are now subsidiaries of Comcast were parties to a 1997 affiliation term sheet with Starz Encore Group LLC ("Starz Encore"), an affiliate of Liberty, which was the subject of a lawsuit by Starz Encore against Broadband in Colorado State Court that preceded Comcast's acquisition of Broadband. In November 2002, the Company and Comcast filed suit against Starz Encore in the United States District Court for the Eastern District of Pennsylvania relating to that term sheet. In January 2003, Starz Encore filed an amended complaint in its lawsuit against Broadband in Colorado state court. The amended complaint added the Company and Comcast as defendants and added new claims against the Company, Comcast and Broadband asserting alleged breaches of, and interference with, a standstill agreement relating to the lawsuit filed by the Company and Comcast in federal District Court in Pennsylvania. On September 19, 2003, Comcast, Starz Encore and certain of their affiliates entered into a confidential settlement agreement that provided for the dismissal with prejudice of both the Colorado lawsuit and the Pennsylvania lawsuit, subject to the execution of a contemporaneous amendment to an existing affiliation agreement between Comcast and Starz Encore 13 COMCAST HOLDINGS CORPORATION AND SUBSIDIARIES FORM 10-Q QUARTER ENDED SEPTEMBER 30, 2003 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED (Unaudited) that originally applied only to the cable systems of the Company. The amended affiliation agreement now applies to all Comcast owned and operated systems, including the former Broadband systems, and provides for: (i) payment on a per-subscriber basis rather than the flat fee arrangement that formerly existed under the 1997 term sheet between Broadband and Starz Encore; (ii) elimination of the pass-through of any of Starz Encore's incremental programming costs, such as there had been under the 1997 term sheet between Broadband and Starz Encore; and (iii) enhanced joint marketing efforts promoting Starz Encore products. The parties have filed stipulations of dismissal of both the Colorado and Pennsylvania lawsuits with prejudice. Other. - ------ The Company is subject to other legal proceedings and claims ~~which~~that arise in the ordinary course of ~~its~~our business. ~~In the opinion of management, the~~The amount of ultimate liability with respect to such actions is not expected to materially affect ~~the~~our financial ~~condition,~~position, results of operations or ~~liquidity~~liquidity.

Our reportable segments consist of ~~the Company. In connection with a license awarded to an affiliate, the Company is contingently liable~~our cable and content businesses. Beginning in the ~~event~~first quarter of ~~nonperformance by the affiliate~~2004, we elected to ~~reimburse~~disclose our content businesses separately as a bank which has provided a performance guarantee. The amount of the performance guarantee is approximately $165 million; however the Company's current estimate of the amount of expenditures (principally in the form of capital expenditures) that will be made by the affiliate necessary to comply with the performance requirements will not exceed $50 million. 14 reportable segment even though they do

COMCAST HOLDINGS CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, ~~2003~~ 2004
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ~~- CONTINUED~~ (Continued)

not meet the quantitative disclosure requirements "Cable." The Company's other business segments, operations, do not meet the quantitative guidelines Three Months Ended September 30, 2003 - ------------------------------------- Revenues (2)......................................... Operating income (loss) before depreciation and amortization (3)............................ Depreciation and amortization........................ Operating income (loss).............................. Interest expense..................................... Capital expenditures................................. Three Months Ended September 30, 2002 - ------------------------------------- Revenues (2)......................................... Operating income (loss) before depreciation and amortization (3)............................ Depreciation and amortization........................ Operating income (loss).............................. Interest expense..................................... Capital expenditures................................. Nine Months Ended September 30, 2003 - ------------------------------------- Revenues (2)......................................... Operating income before depreciation and amortization (3)............................ Depreciation and amortization........................ Operating income (loss).............................. Interest expense..................................... Capital expenditures................................. Nine Months Ended September 30, 2002 - ------------------------------------- Revenues (2)......................................... Operating income before depreciation and amortization (3)............................ Depreciation and amortization........................ Operating income (loss).............................. Interest expense..................................... Capital expenditures................................. As of September 30, 2003 - ------------------------------------- Assets............................................... Long-term debt, less current portion................. As of December 31, 2002 Assets............................................... Long-term debt, less current portion................. _______________ 15 of SFAS No. 131, "Disclosures About Segments of an Enterprise and Related Information." Our content segment consists of our national networks E! Entertainment, Style Network, The Golf Channel, Outdoor Life Network, G4techTV and International Channel Networks. As a result of this change, we have presented the ~~sale of QVC,~~comparable 2003 content segment amounts. In evaluating our segments' profitability, the ~~Company's only reportable segment is including the Company's content for segment reporting. The~~ components of net income (loss) below operating income (loss) before depreciation and amortization are not separately evaluated by ~~the Company's~~our management ~~on a segment basis (in~~(amounts in millions).

Corporate and Cable Other (1) Total ----- ------------- ----- $1,718 $164 $1,882 742 (12) 730 333 46 379 409 (58) 351 130 31 161 324 19 343 $1,548 $150 $1,698 645 (3) 642 309 62 371 336 (65) 271 140 32 172 322 7 329 $5,079 $624 $5,703 2,155 25 2,180 957 144 1,101 1,198 (119) 1,079 405 95 500 1,009 29 1,038 $4,558 $544 $5,102 1,896 35 1,931 900 191 1,091 996 (156) 840 428 107 535 1,011 24 1,035 $29,754 $10,589 $40,343 6,634 1,307 7,941 $29,844 $5,845 $35,689 7,908 1,348 9,256

Cable(1)
Content
Corporate
and
Other(2)
Total
Three Months Ended September 30, 2004
Revenues(3) $ 1,889 $ 207 $ 52 $ 2,148
Operating income (loss) before depreciation and amortization(4) 777 62 (62 ) 777
Depreciation and amortization 333 42 13 388
Operating income (loss) 444 20 (75 ) 389
Capital expenditures 304 4 2 310

Three Months Ended September 30, 2003

Revenues(3) $ 1,718 $ 158 $ 6 $ 1,882
Operating income (loss) before depreciation and amortization(4) 742 58 (70 ) 730
Depreciation and amortization 333 32 14 379
Operating income (loss) 409 26 (84 ) 351
Capital expenditures 324 3 16 343

Nine Months Ended September 30, 2004

Revenues(3) $ 5,609 $ 582 $ 194 $ 6,385
Operating income (loss) before depreciation and amortization (4) 2,362 208 (157 ) 2,413
Depreciation and amortization 956 116 41 1,113
Operating income (loss) 1,406 92 (198 ) 1,300
Capital expenditures 899 14 15 928

Nine Months Ended September 30, 2003

Revenues(3) $ 5,079 $ 462 $ 162 $ 5,703
Operating income (loss) before depreciation and amortization(4) 2,155 155 (130 ) 2,180
Depreciation and amortization 957 96 48 1,101
Operating income (loss) 1,198 59 (178 ) 1,079
Capital expenditures 1,009 10 19 1,038

As of September 30, 2004

Assets $ 36,880 $ 2,549 $ 2,008 $ 41,437

As of December 31, 2003

Assets $ 34,952 $ 2,048 $ 3,402 $ 40,402
(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.

COMCAST HOLDINGS CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, ~~2003~~ 2004
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ~~- CONTINUED~~ (Continued)
(Unaudited) ~~(1) Other includes segments not meeting certain quantitative guidelines for reporting and elimination entries related to the segment presented.~~
(2)
Corporate and other ~~assets~~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 ~~the Company's~~our investments ~~and intangible assets related to the Company's content operations and, as of December 31, 2002, $3.076 billion of assets associated with discontinued operations~~ (see ~~Notes 3, 4 and 5)~~Note 4). ~~(2)~~

(3)
Non-US revenues were not significant in any period. No single customer accounted for a significant amount of ~~the Company's revenues~~our revenue in any period. ~~(3)~~

(4)
Operating income (loss) before depreciation and amortization is defined as operating income (loss) before depreciation and amortization and impairment charges, if any, related to fixed and intangible assets. As such, it eliminates the significant level of non-cash depreciation and amortization expense that results from the capital intensive nature of the Company's businesses and intangible assets recognized in business combinations, and is unaffected by the Company's capital structure or investment activities. The Company's management and Board of Directors use this measure in evaluating the Company's consolidated operating performance and the operating performance of all of its operating segments. This metric is used to allocate resources and capital to the Company's operating segments and is a significant component of the Company's annual incentive compensation programs. This measure is also useful to investors as it is one of the bases for comparing the Company's operating performance with other companies in its industries, although the Company's 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. 16 COMCAST HOLDINGS CORPORATION AND SUBSIDIARIES FORM 10-Q QUARTER ENDED SEPTEMBER 30, 2003 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED (Unaudited) 11. RELATED PARTY TRANSACTIONS QVC has an affiliation agreement with Comcast Cable Communications Holdings, Inc. ("CCCH"), a wholly owned subsidiary of Comcast, to carry QVC's programming. In return for carrying QVC programming, QVC pays CCCH an allocated portion, based upon market share, of a percentage of net sales of merchandise sold to QVC customers located in CCCH's service area. These amounts, which are included in income from discontinued operations in the Company's consolidated statement of operations, totaled $3 million and $11 million during the three and nine months ended September 30, 2003, respectively. Amounts related to a similar affiliation agreement between QVC and Comcast Cable, which are included in service revenues and income from discontinued operations in the Company's consolidated statement of operations, totaled $4 million and $13 million during the three and nine months ended September 30, 2003, respectively. The Company's content businesses generate a portion of their revenues through the sale of subscriber services to CCCH under affiliation agreements. These amounts, which are included in service revenues in the Company's consolidated statement of operations, totaled $9 million and $26 million during the three and nine months ended September 30, 2003, respectively. Amounts related to similar affiliation agreements between the Company's content businesses and Comcast Cable are eliminated in the Company's consolidated financial statements. Effective January 1, 2003, Comcast has entered into management agreements with the Company's cable subsidiaries. The management agreements generally provide that Comcast supervise the management and operations of the cable systems and arrange for and supervise certain administrative functions. As compensation for such services, the agreements provide for Comcast to charge management fees based on a percentage of gross revenues. These charges, which are included in selling, general and administrative expenses in the Company's consolidated statement of operations, totaled $39 million and $109 million during the three and nine months ended September 30, 2003, respectively. During the 2002 interim periods, similar management agreements existed between Comcast Cable and its subsidiaries. Accordingly, amounts related to those agreements were eliminated in the Company's consolidated financial statements during the 2002 interim periods. Effective January 1, 2003, Comcast Cable reimburses Comcast Cable Communications Management, LLC ("CCCM"), a wholly owned subsidiary of Comcast but not of the Company, for certain costs under a cost sharing agreement. These charges, which are included in selling, general and administrative expenses in the Company's consolidated statement of operations, totaled $47 million and $129 million during the three and nine months ended September 30, 2003, respectively. During the 2002 interim periods, similar costs were included in selling, general and administrative expenses in the Company's consolidated statement of operations. Effective upon the closing of Comcast's acquisition of Broadband on November 18, 2002, the Company purchases certain other services, including insurance and employee benefits, from Comcast under cost sharing arrangements on terms that reflect Comcast's actual cost. These charges, which are included in selling, general and administrative expenses in the Company's consolidated statement of operations, totaled $40 million and $116 million during the three and nine months ended September 30, 2003, respectively. During the 2002 interim periods, similar cost sharing agreements existed between Comcast Holdings and Comcast Cable. Accordingly, amounts related to those agreements were eliminated in the Company's consolidated financial statements during the 2002 interim periods. Comcast Financial Agency Corporation ("CFAC"), an indirect wholly owned subsidiary of the Company, provides cash management services to Comcast and CCCH. Under this arrangement, Comcast's and CCCH's cash receipts are deposited with and held by CFAC, as custodian and agent, which invests and disburses such funds at the direction of the Company. Interest income related to cash deposited by Comcast and CCCH in CFAC was not significant during the 2003 interim periods. Due from affiliates in the Company's consolidated balance sheet as of September 30, 2003 primarily consists of amounts due from Comcast, CCCH and CCCM for advances made by the Company for working capital and capital expenditures in the ordinary course of business. Due to affiliates in the Company's consolidated balance sheet as 17 COMCAST HOLDINGS CORPORATION AND SUBSIDIARIES FORM 10-Q QUARTER ENDED SEPTEMBER 30, 2003 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED (Unaudited) of December 31, 2002 primarily consists of amounts due to Comcast and its affiliates under the cost sharing arrangements described above and amounts payable to Comcast and its affiliates as reimbursements for costs incurred, in the ordinary course of business, by such affiliates on behalf of the Company. As of September 30, 2003 and December 31, 2002, notes receivable from affiliates consist of an aggregate of $843 million and $191 million principal amount, respectively, of notes receivable from Comcast and from a subsidiary of CCCH. The notes receivable bear interest at rates ranging from 5.0% to 7.5% and are due between 2012 and 2013. As of September 30, 2003, notes receivable from affiliates includes $10 million of interest receivable related to the notes. As of September 30, 2003 and December 31, 2002, notes payable to affiliates consist of an aggregate of $47 million and $22 million principal amount, respectively, of notes payable to subsidiaries of CCCH. The notes payable bear interest at 7.5% and are due between 2012 and 2013. As of September 30, 2003, notes payable to affiliates includes $2 million of interest payable related to the notes. 18 COMCAST HOLDINGS CORPORATION AND SUBSIDIARIES FORM 10-Q QUARTER ENDED SEPTEMBER 30, 2003 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Information for this item is omitted pursuant to SEC General Instruction H to Form 10-Q, except as noted below. We are an indirect wholly owned subsidiary of Comcast Corporation ("Comcast"). Business Developments We have grown significantly in recent years through both strategic acquisitions and growth in our existing businesses. We have historically met our cash needs for operations through our cash flows from operating activities. We have generally financed our acquisitions and capital expenditures through issuances of our common stock, borrowings of long-term debt, sales of investments and from existing cash, cash equivalents and short-term investments. As more fully described in Note 3 to our financial statements included in Item 1 (see Sale of QVC), on September 17, 2003 we sold to Liberty Media Corporation ("Liberty") our approximate 57% interest in QVC, Inc. ("QVC") for approximately $7.7 billion under a stock purchase agreement. We received from Liberty three-year senior unsecured notes (the "Liberty Notes") bearing interest at LIBOR plus 1.5%, approximately 218 million shares of Liberty Series A common stock and cash. The values of the notes, shares and cash received were approximately $4.0 billion, $2.339 billion and $1.35 billion, respectively. In accordance with Statement of Financial Accounting Standards No. 144 ("SFAS 144"), QVC's operations are presented as a discontinued operation in our financial statements. Our summarized financial information for the interim periods is as follows (dollars in millions, "NM" denotes percentage is not meaningful):
Three Months Ended September 30, Increase / (Decrease) 2003 2002 $ % --------- --------- ---------- --------- Service revenues............................................. $1,882 $1,698 $184 10.8% Operating, selling, general and administrative expenses...... 1,152 1,056 96 9.1 Depreciation................................................. 330 321 9 2.8 Amortization................................................. 49 50 (1) (2.0) --------- --------- ---------- --------- Operating income............................................. 351 271 80 29.5 --------- --------- ---------- --------- Interest expense............................................. (161) (172) (11) (6.4) Interest expense on affiliate notes, net..................... (10) 10 NM Investment loss, net......................................... (166) (47) 119 253.2 Equity in net losses of affiliates........................... (15) (9) 6 66.7 Other income (expense)....................................... (1) 5 (6) NM Income tax benefit (expense)................................. 84 (27) 111 NM Minority interest............................................ (14) 3 (17) NM --------- --------- ---------- --------- Income from continuing operations............................ $68 $24 $44 183.3% ========= ========= ========== =========
19 ~~COMCAST HOLDINGS CORPORATION AND SUBSIDIARIES FORM 10-Q QUARTER ENDED SEPTEMBER 30, 2003~~
Nine Months Ended September 30, Increase / (Decrease) 2003 2002 $ % --------- --------- ---------- --------- Service revenues............................................. $5,703 $5,102 $601 11.8% Operating, selling, general and administrative expenses...... 3,523 3,171 352 11.1 Depreciation................................................. 965 957 8 0.8 Amortization................................................. 136 134 2 1.5 --------- --------- ---------- --------- Operating income............................................. 1,079 840 239 28.5 --------- --------- ---------- --------- Interest expense............................................. (500) (535) (35) (6.5) Interest income on affiliate notes, net...................... 2 2 NM Investment loss, net......................................... (198) (702) (504) (71.8) Equity in net losses of affiliates........................... (45) (55) (10) (18.2) Other income (expense)....................................... 1 (12) 13 NM Income tax benefit (expense)................................. (48) 123 (171) NM Minority interest............................................ (33) (23) 10 43.5 --------- --------- ---------- --------- Income (loss) from continuing operations..................... $258 ($364) $622 NM% ========= ========= ========== =========
Consolidated Operating Results Revenues Consolidated revenues for the three and nine month interim periods increased $184 million and $601 million, respectively. Of these increases, $170 million and $521 million, respectively, relate to our cable segment, which is discussed separately below. The remaining increases are primarily the result of our content businesses, which achieved combined revenue growth of 17.5% and 16.2%, respectively, for the three and nine month interim periods. Such increases were primarily the result of increases in distribution revenues and in advertising. Operating, selling, general and administrative expenses Consolidated operating, selling, general and administrative expenses for the three and nine month interim periods increased $96 million and $352 million, respectively. Of these increases, $73 million and $262 million, respectively, relate to our cable segment, which is discussed separately below. The remaining increases for the interim periods are primarily attributable to costs associated with management agreements between Comcast and the Company's cable subsidiaries during the 2003 interim periods that had been eliminated in consolidation in 2002 and to increased expenses in our content operations. These increases were offset, in part, by the effects of reduced corporate overhead which, upon closing of Comcast's acquisition of Broadband on November 18, 2002, are recorded by the Comcast parent rather than by the Comcast Holdings parent. Cable Operating Results The following represents the operating results of our Cable segment. The remaining components of our operations are not independently significant to our consolidated financial condition or results of operations (dollars in millions). 20 COMCAST HOLDINGS CORPORATION AND SUBSIDIARIES FORM 10-Q QUARTER ENDED SEPTEMBER 30, 2003 Cable The following table presents financial information for our Cable segment (dollars in millions).
Three Months Ended September 30, Increase 2003 2002 $ % --------- --------- --------- -------- Video....................................................... $1,249 $1,180 $69 5.8% High-speed Internet......................................... 244 156 88 56.4 Advertising sales........................................... 102 93 9 9.7 Other....................................................... 71 70 1 1.4 Franchise fees.............................................. 52 49 3 6.1 --------- --------- --------- -------- Revenues............................................... $1,718 1,548 170 11.0 Operating, selling, general and administrative expenses..... 976 903 73 8.1 --------- --------- --------- -------- Operating income before depreciation and amortization (a)................................... $742 $645 $97 15.0% ========= ========= ========== ========== Nine Months Ended September 30, Increase 2003 2002 $ % --------- --------- --------- -------- Video....................................................... $3,735 $3,516 $219 6.2% High-speed Internet......................................... 677 415 262 63.1 Advertising sales........................................... 304 274 30 10.9 Other....................................................... 206 202 4 2.0 Franchise fees.............................................. 157 151 6 4.0 --------- --------- --------- -------- Revenues................................................ $5,079 4,558 521 11.4 Operating, selling, general and administrative expenses...... 2,924 2,662 262 9.8 --------- --------- --------- -------- Operating income before depreciation and amortization (a).................................... $2,155 $1,896 $259 13.7% ========= ========= ========== ==========
~~____________ (a) Operating income~~ before depreciation and amortization is defined as operating income before depreciation and amortization, ~~and~~ impairment charges, if any, related to fixed and intangible ~~assets.~~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.
10.    RELATED PARTY TRANSACTIONS
        Our related party transactions for the interim periods presented are as follows (in millions):

Three Months Ended
September 30,
Nine Months Ended
September 30,

2004
2003
2004
2003
Content affiliation agreement revenue $ 13 $ 9 $ 41 $ 26
Comcast management fees 41 39 120 109
Comcast cost sharing charges:
Cable-related costs 56 47 161 129
Other costs 48 40 145 116
Software licensing fees 2 5
Interest income (expense) on affiliate notes, net 54 (10 ) 136 2
        Our content businesses generate a portion of their revenues through the sale of subscriber services under affiliation agreements with cable subsidiaries of Comcast. These amounts are included in service revenues in our consolidated statement of operations. Amounts related to similar affiliation agreements between our content businesses and our wholly owned subsidiaries are eliminated in our consolidated financial statements.
        Comcast has entered into management agreements with our cable subsidiaries. The management agreements generally provide that Comcast supervise the management and operations of the cable systems and arrange for and supervise certain administrative functions. As compensation for such services, the agreements provide for Comcast to charge management fees based on a percentage of gross revenues. These charges are included in selling, general and administrative expenses in our consolidated statement of operations.
        We reimburse Comcast for certain cable-related costs under a cost sharing agreement. These charges are included in selling, general and administrative expenses in our consolidated statement of operations.

COMCAST HOLDINGS CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 2004
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Concluded)
(Unaudited)
        We purchase certain other services from Comcast under cost sharing arrangements on terms that reflect Comcast's actual cost. These charges are included in selling, general and administrative expenses in our consolidated statement of operations.
        Comcast has purchased long-term, non-exclusive patent and software licenses to use on Comcast's and our interactive program guides. Comcast charges us a licensing fee for use of this software. This charge is included in selling, general and administrative expenses in our consolidated statement of operations.
        Comcast Financial Agency Corporation ("CFAC"), an indirect wholly owned subsidiary of ours, provides cash management services to certain cable subsidiaries of Comcast. Under this arrangement, Comcast's and these subsidiaries' cash receipts are deposited with and held by CFAC, as custodian and agent, which invests and disburses such funds at our direction. Interest income related to this cash was not significant during the 2004 or 2003 interim periods.
        With the exception of cash payments related to interest and income taxes, we consider all of our transactions with Comcast or its affiliates to be financing transactions, which are presented as net transactions with affiliates in our consolidated statement of cash flows. Our significant financing transactions with Comcast and its affiliates are described below.
        As of September 30, 2004 and December 31, 2003, due from affiliates, net in our consolidated balance sheet primarily consists of amounts due from Comcast and from certain cable subsidiaries of Comcast for advances we made for working capital and capital expenditures in the ordinary course of business. Also, included within accrued expenses and other current liabilities as of September 30, 2004 and December 31, 2003 is approximately $603 million and $568 million, respectively, related to other Comcast subsidiaries.
        QVC, a discontinued operation, has an affiliation agreement with certain cable subsidiaries of Comcast to carry QVC's programming. In return for carrying QVC programming, QVC pays these Comcast subsidiaries an allocated portion, based upon market share, of a percentage of net sales of merchandise sold to QVC customers located in their service areas. These amounts are not significant and are included in income from discontinued operations in our consolidated statement of operations. Amounts related to a similar affiliation agreement between QVC and our wholly owned subsidiaries are not significant and are included in service revenues and income from discontinued operations in our consolidated statement of operations.
        As of September 30, 2004 and December 31, 2003, notes receivable from affiliates and notes payable to affiliates consist of notes receivable from and notes payable to Comcast and certain cable subsidiaries of Comcast. Our notes receivable and notes payable, whose interest receivable and payable are included in our condensed consolidated balance sheet, have the following characteristics (amounts in millions):

September 30, 2004
December 31, 2003

Notes Receivable
Notes Payable
Notes Receivable
Notes Payable
Principal balance $4,799 $627 $3,284 $58
Interest receivable (payable) $52 ($21) $26 ($3)
Interest rate range 5.0% to 7.5% 5.0% to 7.5% 5.0% to 7.5% 5.0% to 7.5%
Maturity date range 2009-2014 2012-2014 2012-2013 2012-2013

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

ITEM 2.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
        Information for this item is omitted pursuant to SEC General Instruction H to Form 10-Q, except as noted below.
Overview
        We are an indirect wholly owned subsidiary of Comcast Corporation ("Comcast"). 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 nine months ended September 30, 2004, we received over 87% of our revenue from our cable segment, primarily through monthly subscriptions to our video and high-speed Internet 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.
        We have historically met our cash needs for operations through our cash flows from operating activities. We have generally financed our acquisitions and capital expenditures through issuances of common stock, borrowings of long-term debt, sales of investments and from existing cash, cash equivalents and short-term investments.
Business Developments
        On July 28, 2004, we exchanged approximately 120 million shares of Liberty Media Corporation ("Liberty") Series A common stock that we held, valued at approximately $1.022 billion, with Liberty for 100% of the stock of Liberty's subsidiary, Encore ICCP, Inc. ("Encore"). Encore's assets consisted of cash of $547 million, a 10.4% interest in E! Entertainment Television, Inc. ("E!") and 100% of International Cable Channels Partnership, Ltd. ("International Channel Networks"). We also received all of Liberty's rights, benefits and obligations under the TCI Music contribution agreement, which resulted in the resolution of all litigation pending between Liberty and Comcast regarding the contribution agreement.
        Comcast and Time Warner have agreed to work together to explore submitting a joint proposal to acquire cable assets of Adelphia Communications Corporation, the fifth-largest cable television company in the United States.
        Refer to Note 3 to our financial statements included in Item 1 for a discussion of this transaction.
Results of Continuing Operations
Revenues
        Consolidated revenues for the three and nine month interim periods in 2004 increased $266 million and $682 million, respectively, from the same periods in 2003. Of these increases, $171 million and $530 million relate to our cable segment, which is discussed separately below. The remaining increases are the result of our content segment, which achieved combined revenue growth of 30.6% and 26.0%, respectively, during the three and nine 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, as well as to our acquisition of TechTV. The remaining increases are the result of our corporate and other segment, which includes the operating results of Comcast-Spectacor.
Operating, selling, general and administrative expenses
        Consolidated operating, selling, general and administrative expenses for the three and nine month interim periods in 2004 increased $219 million and $449 million, respectively, from the same periods in 2003. Of these increases, $136 million and $323 million, respectively, relate to our cable segment, which is discussed separately below. The remaining increases are the result of growth in our content segment, principally due to

COMCAST HOLDINGS CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 2004
our acquisition of TechTV. The remaining increases are the result of our corporate and other segment, which includes the operating results of Comcast-Spectacor.
Depreciation
        Depreciation expense for the three and nine month interim periods in 2004 is consistent with the amounts reported for the same periods in 2003.
Amortization
        Amortization expense increased $6 million and $10 million, respectively, for the three and nine month interim periods in 2004 compared to the same periods in 2003. These increases are primarily attributable to amortization associated with intangibles acquired in the TechTV and Liberty exchange transactions.
Cable Segment Operating Results
        The following table presents our cable segment operating results (dollars in millions):

Three Months Ended
September 30,
Increase/(Decrease)

2004
2003
$
%

Video $ 1,316 $ 1,249 $ 67 5.4 %
High-speed Internet 325 244 81 33.2
Advertising sales 121 102 19 18.6
Other 70 71 (1 ) (1.4 )
Franchise fees 57 52 5 9.6

Revenues 1,889 1,718 171 10.0
Operating, selling, general and administrative expenses 1,112 976 136 13.9

Operating income before depreciation and amortization(a) $ 777 $ 742 $ 35 4.7 %

Nine Months Ended
September 30,
Increase

2004
2003
$
%

Video $ 3,945 $ 3,735 $ 210 5.6 %
High-speed Internet 925 677 248 36.6
Advertising sales 355 304 51 16.8
Other 212 206 6 2.9
Franchise fees 172 157 15 9.6

Revenues 5,609 5,079 530 10.4
Operating, selling, general and administrative expenses 3,247 2,924 323 11.0

Operating income before depreciation and amortization(a) $ 2,362 $ 2,155 $ 207 9.6 %

(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.

COMCAST HOLDINGS CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 2004
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 ~~this measure~~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.
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 ~~2002~~2003 to ~~2003~~2004 are primarily due to ~~the effects of~~ increases in monthly average ~~monthly~~ revenue per ~~basic~~ subscriber as a result of rate increases in our traditional ~~analog~~ video service and growth in digital ~~subscribers.~~subscribers, reflecting increased consumer demand for new digital features. From September 30, ~~2002~~2003 to September 30, ~~2003,~~2004, we added approximately ~~437,000~~428,000 digital subscribers, or a ~~20.7%~~16.8% increase in digital subscribers. ~~During the three and nine months ended September 30, 2003, we added approximately 133,000 and 304,000 digital subscribers respectively.~~We expect continued growth in our video services revenue.
        The increases in high-speed Internet revenue for the interim periods from ~~2002~~2003 to ~~2003~~2004 are primarily due to the addition of approximately ~~733,000~~595,000 high-speed Internet subscribers from September 30, ~~2002~~2003 to 21 ~~COMCAST HOLDINGS CORPORATION AND SUBSIDIARIES FORM 10-Q QUARTER ENDED SEPTEMBER 30, 2003~~ September 30, ~~2003,~~2004, or a ~~54.8%~~28.7% increase in high-speed Internet subscribers. ~~During the three and nine months ended September 30, 2003, we added approximately 190,000 and 546,000~~We expect continued high-speed Internet ~~subscribers, respectively.~~revenue growth as overall demand for our services continues to increase.
        The increases in advertising sales revenue for the interim periods from ~~2002~~2003 to ~~2003~~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 growth in~~ a ~~soft~~stronger local advertising ~~market.~~market and an increase in political advertising.
        Other revenue includes ~~phone revenues,~~ installation revenues, guide revenues, commissions from electronic retailing, ~~revenues of~~revenue from our regional ~~sports~~ programming networks, ~~and~~commercial data revenue, revenue from other product ~~offerings. The increases in~~offerings and phone revenues.
Expenses
        Total operating, selling, general and administrative ~~expense~~expenses increased for the interim periods from ~~2002~~2003 to ~~2003 are~~2004 primarily due to the effects of increases in the costs of cable programming, high-speed Internet subscriber growth, and, to a lesser extent, increases in labor costs and other volume related expenses. Our cost of programming increases as a result of ~~changes~~higher operating and marketing expenses associated with the growth in ~~rates, subscriber growth, additional channel offerings~~our high-speed Internet and ~~our acquisitions. We anticipate the cost of~~digital cable ~~programming will increase~~services, and increases in ~~the future as cable programming rates increase and additional sources of cable programming become available.~~ charges from cost-sharing arrangements.
Consolidated ~~Analysis~~ Income (Expense) Items
Interest Expense
        The decreases in interest expense for the interim periods from ~~2002~~2003 to ~~2003~~2004 are ~~primarily attributable~~due to ~~the effects of~~ our ~~lower~~decreased amount of debt outstanding ~~debt~~ as a result of our ~~net~~ debt ~~repayments. We anticipate that,~~reduction during 2003 and 2004.
Interest Income (Expense) on Affiliate Notes, Net
        The changes in interest income (expense) on affiliate notes, net for the ~~foreseeable future, interest expense will be significant. We believe we will continue~~interim periods from 2003 to ~~be able~~2004 are principally due to ~~meet~~an increase in our ~~obligations through our ability both to generate cash flow~~notes receivable from ~~operations~~affiliates during 2003 and ~~to obtain external financing. _______________________~~ 2004.

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

Investment ~~Loss,~~Income (Loss), Net
        Investment ~~loss,~~income (loss), net for the interim periods includes the following (in millions):
Three Months Ended Nine Months Ended September 30, September 30, 2003 2002 2003 2002 --------- ---------- --------- --------- Interest and dividend income................................... $4 $6 $12 $19 Gains (losses) on sales and exchanges of investments, net...... 22 (101) Investment impairment losses................................... (6) (69) (227) Unrealized losses on trading securities........................ (167) (181) (98) (1,621) Mark to market adjustments on derivatives related to trading securities............................. (1) 139 (66) 1,310 Mark to market adjustments on derivatives and hedged items..... (2) (5) 1 (82) --------- ---------- --------- --------- Investment loss, net...................................... ($166) ($47) ($198) ($702) ========= ========= ========== =========

Three Months Ended September 30,
Nine Months Ended
September 30,

2004
2003
2004
2003

Interest, dividend and other investment income (expense) $ (4 ) $ 5 $ (12 ) $ 13
Gains on sales and exchanges of investments, net 35 34 23
Investment impairment losses (7 ) (10 ) (69 )
Mark to market adjustments on trading securities (59 ) (166 ) (113 ) (98 )
Mark to market adjustments on derivatives related to trading securities 139 (1 ) 297 (66 )
Mark to market adjustments on derivatives and hedged items (8 ) (4 ) (6 ) (1 )

Investment income (loss), net $ 96 ($166 ) $ 190 ($198 )

        We have entered into derivative financial instruments ~~which~~that we account for at fair value and which ~~limit our exposure to and benefits from~~economically hedge the market price fluctuations in the common stock of certain of our investments accounted for as trading securities. Investment ~~loss,~~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 ~~with the exception of the Liberty Series A common shares,~~ was substantially offset by the changes in the fair ~~values~~value of the related ~~derivatives. The~~derivatives, except for the mark to market adjustments on our investment in Sprint and on 6 million shares of Liberty ~~Series A common~~International for the three and nine months ended September 30, 2004, on 116 million shares ~~we received~~of Liberty for the three and nine months ended September 30, 2004, until they were exchanged with Liberty on July 28, 2004, and on 218 million shares of Liberty for the three and nine months ended September 30, 2003. See Note 3 to our consolidated financial statements included in Item 1 for further discussion about the Liberty exchange.
        During the three and nine months ended September 30, 2004, investment income (loss), net includes $83 and $139 million, respectively, of investment income related to the decrease in the ~~sale~~fair value of ~~QVC have been classified~~the derivative component of the ZONES debt. A portion of the fair value adjustment in the nine month interim period results 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 partially offset by changes in the fair value of the Sprint FON common stock we hold and account for as a trading security.
        We were exposed to changes in the fair value of 218 million shares and 116 million shares of Liberty common stock during the 2003 and 2004 interim periods (through July 28, 2004), respectively. We will continue to be exposed to changes in the fair value of 6 million shares of Liberty International common stock we hold and account for as trading ~~securities; however, currently there is no~~securities because we have not entered into a corresponding derivative to hedge this market exposure. ~~As such,~~
        Investment income (loss), net for the ~~decline~~three and nine months ended September 30, 2004, includes losses of $80 million and $198 million, respectively, related to these financial instruments compared to losses of $165 million during each of the same periods in ~~value in these shares during the quarter is included in investment 22~~ 2003.

COMCAST HOLDINGS CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, ~~2003 loss, net. Accordingly,~~2004
Other Income
        On September 30, 2004, we sold our ~~future results of operations may be affected by fluctuations~~20% interest in ~~the fair value of the Liberty Series A common stock~~DHC Ventures, LLC to Discovery Communications, Inc. for approximately $149 million in future periods. Equity in Net Losses of Affiliates The increase in equity in net losses of affiliates for the three month interim period from 2002 to 2003 is primarily attributable to the effects of our additional investmentscash and to changes in the net income or loss of our equity method investees. The decrease in equity in net losses of affiliates for the nine month interim period from 2002 to 2003 is primarily attributable to decreases in the net losses of certain of our international equity method investees, offset, in part, by the effects of our additional investments and to changes in the net income or loss of our equity method investees. Other Income (Expense) The change in other income (expense) for the nine month interim period from 2002 to 2003 is attributable to the lossrecognized a gain on the sale of ~~one of our equity method investees in the first quarter of 2002.~~ approximately $94 million to other income.
Income Tax ~~Benefit (Expense)~~Expense
        The changes in income tax ~~benefit (expense)~~expense for the interim periods from ~~2002~~2003 to ~~2003~~2004 are primarily the result of the effects of changes in our income (loss) from continuing operations before taxes and minority ~~interest and the effects of the resolution of certain tax contingencies.~~ interest.
Minority Interest
        The changes in minority interest for the interim periods from ~~2002~~2003 to ~~2003~~2004 are attributable to the effects of changes in the net income or loss of our less than wholly owned consolidated ~~subsidiaries. Discontinued Operations The decrease in income from discontinued operations for the three month interim period from 2002 to 2003 is primarily attributable~~subsidiaries and to the ~~2003 period including QVC's results through August 31, while the 2002 period includes results for the full three month interim period. The increase~~minority interests in income from discontinued operations for the nine month interim period from 2002 to 2003 is primarily attributable to a decrease in investment loss, net, offset in part by the 2003 period including results through August 31, while the 2002 period includes results for the full nine month interim period. As a result of the sale, we recognized a $3.290 billion gain, net of approximately $2.865 billion of related income taxes.certain subsidiaries acquired or formed during 2004.
        We believe that our operations are not materially affected by inflation. 23 ~~COMCAST HOLDINGS CORPORATION~~

ITEM 3.    QUANTITATIVE AND ~~SUBSIDIARIES FORM 10-Q QUARTER ENDED SEPTEMBER 30,~~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 ~~quarterly~~ 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 ~~adequate and designed to ensure that material information relating to us and our consolidated subsidiaries would be made known to them by others within those entities.~~ effective.
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 isare reasonably likely to materially affect, our internal control over financial reporting.

PART II.    OTHER INFORMATION ~~- ------- -----------------~~
ITEM 1.    LEGAL PROCEEDINGS
Refer to Note 98 to our condensed consolidated 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 6.    EXHIBITS ~~AND REPORTS ON FORM 8-K (a)~~
        Exhibits required to be filed by Item 601 of Regulation S-K: 10.1 Amended and Restated Stock Purchase Agreement dated as of June 30, 2003 among Comcast QVC, Inc., Comcast Corporation, Liberty Media Corporation, and QVC, Inc. (incorporated by reference to Exhibit 10.1 to Comcast Corporation's Current Report on Form 8-K filed on October 1, 2003).
31
Certifications of Chief Executive Officer and Co-Chief Financial Officers pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32
Certification 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: None. 24~~

COMCAST HOLDINGS CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, ~~2003~~ 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 HOLDINGS CORPORATION ------------------------------------- /S/ LAWRENCE J. SALVA ------------------------------------- Lawrence J. Salva Senior Vice President and Controller (Principal Accounting Officer)
COMCAST HOLDINGS CORPORATION

/S/  LAWRENCE J. SALVA
Lawrence J. Salva
Senior Vice President, Chief Accounting Officer and Controller
(Principal Accounting Officer)
Date: November ~~13, 2003 25~~ 12, 2004

			September 30, 2004			December 31, 2003
			(Dollars in millions, except share data)
ASSETS
CURRENT ASSETS
	Cash and cash equivalents		$	685		$	1,509
	Investments			81			139
	Accounts receivable, less allowance for doubtful accounts of $66 and $74			470			453
	Other current assets			209			179

		Total current assets		1,445			2,280

NOTES RECEIVABLE FROM AFFILIATES				4,851			3,310
DUE FROM AFFILIATES, net				1,970			943
INVESTMENTS				2,165			3,363
PROPERTY AND EQUIPMENT, net of accumulated depreciation of $5,201 and $4,456				6,485			6,571
FRANCHISE RIGHTS				16,617			16,620
GOODWILL				5,750			5,663
OTHER INTANGIBLE ASSETS, net of accumulated amortization of $1,196 and $1,022				1,881			1,350
OTHER NONCURRENT ASSETS, net				273			302

			$	41,437		$	40,402

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
	Accounts payable		$	376		$	303
	Accrued expenses and other current liabilities			1,992			2,014
	Deferred income taxes			5			26
	Current portion of long-term debt			27			373

		Total current liabilities		2,400			2,716

LONG-TERM DEBT, less current portion				7,487			7,828
NOTES PAYABLE TO AFFILIATES				648			61
DEFERRED INCOME TAXES				8,321			8,288
OTHER NONCURRENT LIABILITIES				2,637			2,289
MINORITY INTEREST				384			316
COMMITMENTS AND CONTINGENCIES (NOTE 8)
STOCKHOLDERS' EQUITY
	Preferred stock—authorized, 20,000,000 shares; issued, zero
	Class A common stock, $1.00 par value—authorized, 200,000,000 shares; issued, 21,591,115			22			22
	Class A special common stock, $1.00 par value—authorized, 2,500,000,000 shares; issued, 916,198,519			916			916
	Class B common stock, $1.00 par value—authorized, 50,000,000 shares; issued, 9,444,375			9			9
	Additional capital			12,359			12,353
	Retained earnings			6,268			5,623
	Accumulated other comprehensive loss			(14	)		(19	)

		Total stockholders' equity		19,560			18,904

			$	41,437		$	40,402

				Nine Months Ended September 30,
				2004			2003
				(Dollars in millions)
OPERATING ACTIVITIES
	Net income			$	651		$	3,716
	Income from discontinued operations							(168	)
	Gain on discontinued operations							(3,290	)

	Income from continuing operations				651			258
	Adjustments to reconcile net income from continuing operations to net cash provided by operating activities from continuing operations:
		Depreciation			967			965
		Amortization			146			136
		Non-cash interest expense, net			33			22
		Non-cash interest (income) expense on affiliate notes, net			(136	)		(2	)
		Equity in net losses of affiliates			33			45
		Losses (gains) on investments and other (income) expense, net			(217	)		213
		Non-cash contribution expense			23
		Minority interest			21			33
		Deferred income taxes			423			128
		Proceeds from sales or exchanges of trading securities			553			85
		Changes in operating assets and liabilities, net of effects of acquisitions and divestitures
			Change in accounts receivable, net		(4	)		32
			Change in accounts payable		70			(176	)
			Change in other operating assets and liabilities		7			327

			Net cash provided by operating activities from continuing operations		2,570			2,066

FINANCING ACTIVITIES
	Proceeds from borrowings				4			1,260
	Retirements and repayments of debt				(573	)		(2,293	)
	Net transactions with affiliates				(1,659	)		(1,598	)
	Other				2

			Net cash used in financing activities from continuing operations		(2,226	)		(2,631	)

INVESTING ACTIVITIES
	Acquisitions, net of cash acquired				(296	)		(22	)
	Proceeds from sales (purchases) of short-term investments, net				(6	)		4
	Proceeds from sales of investments and assets held for sale				197			4,563
	Purchases of investments				(62	)		(68	)
	Capital expenditures				(928	)		(1,038	)
	Additions to intangible and other noncurrent assets				(73	)		(61	)

			Net cash (used in) provided by investing activities from continuing operations		(1,168	)		3,378

(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS					(824	)		2,813
CASH AND CASH EQUIVALENTS, beginning of period					1,509			400

CASH AND CASH EQUIVALENTS, end of period				$	685		$	3,213

(Mark One)
ý	Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the Quarterly Period Ended:
SEPTEMBER 30, 2004
OR
o	Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the Transition Period fromto.

			Page Number ~~-----------~~
PART I. FINANCIAL INFORMATION
	ITEM 1.	Financial Statements
		Condensed Consolidated Balance Sheet as of September 30, ~~2003~~ 2004 and December 31, ~~2002~~2003 (Unaudited)~~......................................................2~~	2
		Condensed Consolidated Statement of Operations for the Three and Nine Months Ended September 30, 2004 and 2003 ~~and 2002~~ (Unaudited)~~..........................................3~~	3
		Condensed Consolidated Statement of Cash Flows for the Nine Months Ended September 30, 2004 and 2003 ~~and 2002~~ (Unaudited)~~..........................................4~~	4
		Notes to Condensed Consolidated Financial Statements (Unaudited)~~.......................5~~	5
	ITEM 2.	Management's Discussion and Analysis of Financial Condition and Results of ~~Operations.............................................................19~~ Operations	16
	ITEM 3.	Quantitative and Qualitative Disclosures about Market Risk	20
	ITEM 4.	Controls and ~~Procedures...............................................................24~~ Procedures	20
PART II. OTHER INFORMATION
	ITEM 1.	Legal ~~Proceedings.....................................................................24~~ Proceedings	20
	ITEM 6.	Exhibits and Reports on Form 8-K......................................................24 SIGNATURES.......................................................................................25 ___________________________________	20
	SIGNATURES		21

	September 30, 2004		December 31, 2003
Cost	$	20	$	44
Unrealized gains		10		43
Unrealized losses				(1	)

Fair value	$	30	$	86