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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(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~~JUNE 30, ~~2004~~2005
OR
o	Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the Transition Period from to .

Commission File Number 001-15471

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

PENNSYLVANIA
(State or other jurisdiction of
incorporation or organization)

23-1709202
(I.R.S. Employer
Identification No.)

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

Registrant's telephone number, including area code: (215) 665-1700

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding twelve months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such requirements for the past 90 days.

Yes ý No o

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

As of ~~September~~June 30, ~~2004,~~2005, 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~~JUNE 30, ~~2004~~2005

TABLE OF CONTENTS

			Page Number
PART I. FINANCIAL INFORMATION
	ITEM 1.	Financial Statements	2
		Condensed Consolidated Balance Sheet as of ~~September~~June 30, ~~2004~~ 2005 and December 31, ~~2003~~2004 (Unaudited)	2
		Condensed Consolidated Statement of Operations for the Three and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2004~~2005 and ~~2003~~2004 (Unaudited)	3
		Condensed Consolidated Statement of Cash Flows for the ~~Nine~~Six Months Ended ~~September~~June 30, ~~2004~~2005 and ~~2003~~2004 (Unaudited)	4
		Notes to Condensed Consolidated Financial Statements (Unaudited)	5
	ITEM 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	1617
	ITEM 3.	Quantitative and Qualitative Disclosures about Market Risk	2023
	ITEM 4.	Controls and Procedures	2023
PART II. OTHER INFORMATION
	ITEM 1.	Legal Proceedings	2023
	ITEM 6.	Exhibits	2023
	SIGNATURES		2124

This Quarterly Report on Form 10-Q is for the three and ~~nine~~six months ended ~~September~~June 30, ~~2004.~~2005. This Quarterly Report modifies and supersedes documents filed prior to this Quarterly Report. The SEC allows us to "incorporate by reference" information that we file with them, which means that we can disclose important information to you by referring you directly to those documents. Information incorporated by reference is considered to be part of this Quarterly Report. In addition, information that we file with the SEC in the future will automatically update and supersede information contained in this Quarterly Report. InThroughout this Quarterly Report, "Comcast Holdings," "we," "us" and "our" 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~~these so-called "forward-looking statements" by words such as "may," "will," "should," "expects," "plans," "anticipates," "believes," "estimates," "predicts," "potential," or ~~"continue"~~"continue," or the negative of ~~those~~these words, and other comparable words. You should be aware that ~~those~~these statements are only our predictions. In evaluating ~~those~~these statements, you should specifically consider various factors, including the risks and uncertainties outlined ~~below and in other reports we file with the SEC.~~below. Actual events or our actual results may differ materially from any of our forward-looking statements.

~~Among other things, our~~Our businesses may be affected ~~by:~~by, among other things, the following:

•: ~~changes in laws and regulations,~~All of the services offered by our cable systems face a wide range of competition that could adversely affect our future results of operations
•: ~~changes in the competitive environment,~~Programming costs are increasing, which could adversely affect our future results of operations
•: ~~changes in technology,~~We are subject to regulation by federal, state and local governments, which may impose costs and restrictions
•: ~~industry consolidation~~We may face increased competition because of technological advances and ~~mergers,~~new regulatory requirements, which could adversely affect our future results of operations
•: ~~franchise related~~We face risks arising from the outcome of various litigation matters
•: ~~market conditions that may adversely affect the availability of debt~~Comcast's Chairman and ~~equity financing for working capital, capital expenditures or other purposes,~~
•: ~~demand for the programming content we distribute or the willingness of other video program distributors to carry~~CEO has considerable influence over our ~~content, and~~
•: ~~general economic conditions.~~operations

AsFor a more ~~fully described elsewhere~~detailed explanation of the factors affecting our businesses, please refer to the Risk Factors section in ~~this Quarterly Report and in~~Item 1 of our ~~Annual Report on~~2004 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.10-K.

COMCAST HOLDINGS CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED ~~SEPTEMBER~~JUNE 30, ~~2004~~2005

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CONDENSED CONSOLIDATED BALANCE SHEET
(Unaudited)

			September 30, 2004			December 31, 2003					(Dollars in millions)
			(Dollars in millions, except share data)								June 30, 2005		December 31, 2004
ASSETS	ASSETS								ASSETS
CURRENT ASSETS	CURRENT ASSETS								CURRENT ASSETS
	Cash and cash equivalents		$	685		$	1,509		Cash and cash equivalents		$	1,193	$	428
	Investments			81			139		Investments			61		87
	Accounts receivable, less allowance for doubtful accounts of $66 and $74			470			453		Accounts receivable, less allowance for doubtful accounts of $69 and $65			548		500
	Other current assets			209			179		Other current assets			207		265

		Total current assets		1,445			2,280			Total current assets		2,009		1,280

NOTES RECEIVABLE FROM AFFILIATES	NOTES RECEIVABLE FROM AFFILIATES			4,851			3,310		NOTES RECEIVABLE FROM AFFILIATES			5,930		5,450
DUE FROM AFFILIATES, net	DUE FROM AFFILIATES, net			1,970			943		DUE FROM AFFILIATES, net			1,349		1,756
INVESTMENTS	INVESTMENTS			2,165			3,363		INVESTMENTS			2,532		2,488
PROPERTY AND EQUIPMENT, net of accumulated depreciation of $5,201 and $4,456				6,485			6,571
PROPERTY AND EQUIPMENT, net of accumulated depreciation of $5,950 and $5,410									PROPERTY AND EQUIPMENT, net of accumulated depreciation of $5,950 and $5,410			6,604		6,557
FRANCHISE RIGHTS	FRANCHISE RIGHTS			16,617			16,620		FRANCHISE RIGHTS			16,609		16,613
GOODWILL	GOODWILL			5,750			5,663		GOODWILL			5,870		5,736
OTHER INTANGIBLE ASSETS, net of accumulated amortization of $1,196 and $1,022				1,881			1,350
OTHER INTANGIBLE ASSETS, net of accumulated amortization of $1,470 and $1,295									OTHER INTANGIBLE ASSETS, net of accumulated amortization of $1,470 and $1,295			1,621		1,771
OTHER NONCURRENT ASSETS, net	OTHER NONCURRENT ASSETS, net			273			302		OTHER NONCURRENT ASSETS, net			290		291

			$	41,437		$	40,402				$	42,814	$	41,942

LIABILITIES AND STOCKHOLDERS' EQUITY	LIABILITIES AND STOCKHOLDERS' EQUITY								LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES	CURRENT LIABILITIES								CURRENT LIABILITIES
	Accounts payable		$	376		$	303		Accounts payable and accrued expenses related to trade creditors		$	1,264	$	1,236
	Accrued expenses and other current liabilities			1,992			2,014		Accrued expenses and other current liabilities			983		985
	Deferred income taxes			5			26		Current portion of long-term debt			1,348		732
	Current portion of long-term debt			27			373
										Total current liabilities		3,595		2,953
		Total current liabilities		2,400			2,716

LONG-TERM DEBT, less current portion	LONG-TERM DEBT, less current portion			7,487			7,828		LONG-TERM DEBT, less current portion			6,163		6,826
NOTES PAYABLE TO AFFILIATES	NOTES PAYABLE TO AFFILIATES			648			61		NOTES PAYABLE TO AFFILIATES			771		735
DEFERRED INCOME TAXES	DEFERRED INCOME TAXES			8,321			8,288		DEFERRED INCOME TAXES			8,505		8,284
OTHER NONCURRENT LIABILITIES	OTHER NONCURRENT LIABILITIES			2,637			2,289		OTHER NONCURRENT LIABILITIES			2,861		2,836
MINORITY INTEREST	MINORITY INTEREST			384			316		MINORITY INTEREST			457		396
COMMITMENTS AND CONTINGENCIES (NOTE 8)
COMMITMENTS AND CONTINGENCIES (NOTE 7)									COMMITMENTS AND CONTINGENCIES (NOTE 7)
STOCKHOLDERS' EQUITY	STOCKHOLDERS' EQUITY								STOCKHOLDERS' EQUITY
	Preferred stock—authorized, 20,000,000 shares; issued, zero								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 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 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		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		Additional capital			12,359		12,355
	Retained earnings			6,268			5,623		Retained earnings			7,155		6,609
	Accumulated other comprehensive loss			(14	)		(19	)	Accumulated other comprehensive income			1		1

		Total stockholders' equity		19,560			18,904			Total stockholders' equity		20,462		19,912

			$	41,437		$	40,402				$	42,814	$	41,942

See notes to condensed consolidated financial statements.

COMCAST HOLDINGS CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED ~~SEPTEMBER~~JUNE 30, ~~2004~~2005
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)

		Three Months Ended September 30,						Nine Months Ended September 30,							(Dollars in millions)
		2004			2003			2004			2003				Three Months Ended June 30,						Six Months Ended June 30,
		(Dollars in millions)													2005			2004			2005			2004
REVENUES	REVENUES	$	2,148		$	1,882		$	6,385		$	5,703		REVENUES	$	2,376		$	2,148		$	4,641		$	4,237
COSTS AND EXPENSES	COSTS AND EXPENSES													COSTS AND EXPENSES
	Operating (excluding depreciation)		767			661			2,267			2,054		Operating (excluding depreciation)		819			709			1,606			1,500
	Selling, general and administrative		604			491			1,705			1,469		Selling, general and administrative		620			553			1,228			1,101
	Depreciation		333			330			967			965		Depreciation		345			302			684			635
	Amortization		55			49			146			136		Amortization		43			43			106			90

			1,759			1,531			5,085			4,624				1,827			1,607			3,624			3,326

OPERATING INCOME	OPERATING INCOME		389			351			1,300			1,079		OPERATING INCOME		549			541			1,017			911
OTHER INCOME (EXPENSE)	OTHER INCOME (EXPENSE)													OTHER INCOME (EXPENSE)
	Interest expense		(147	)		(161	)		(452	)		(500	)	Interest expense		(155	)		(147	)		(309	)		(305	)
	Interest income (expense) on affiliate notes, net		54			(10	)		136			2		Interest income on affiliate notes, net		90			41			166			82
	Investment income (loss), net		96			(166	)		190			(198	)	Investment income, net		123			146			110			94
	Equity in net losses of affiliates		(14	)		(15	)		(33	)		(45	)	Equity in net losses of affiliates		(6	)		(11	)		(5	)		(19	)
	Other income (expense)		82			(1	)		86			1		Other income, net		7			10			33			5

			71			(353	)		(73	)		(740	)			59			39			(5	)		(143	)

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 BEFORE INCOME TAXES AND MINORITY INTEREST														INCOME BEFORE INCOME TAXES AND MINORITY INTEREST		608			580			1,012			768
INCOME TAX EXPENSE														INCOME TAX EXPENSE		(257	)		(250	)		(438	)		(337	)

INCOME FROM CONTINUING OPERATIONS BEFORE MINORITY INTEREST			241			82			672			291
INCOME BEFORE MINORITY INTEREST														INCOME BEFORE MINORITY INTEREST		351			330			574			431
MINORITY INTEREST	MINORITY INTEREST		(2	)		(14	)		(21	)		(33	)	MINORITY INTEREST		(19	)		(16	)		(38	)		(19	)

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	NET INCOME	$	239		$	3,397		$	651		$	3,716		NET INCOME	$	332		$	314		$	536		$	412

See notes to condensed consolidated financial statements.

COMCAST HOLDINGS CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED ~~SEPTEMBER~~JUNE 30, ~~2004~~2005
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)

				Nine Months Ended September 30,								(Dollars in millions)
				2004			2003					Six Months Ended June 30,
				(Dollars in millions)								2005			2004
OPERATING ACTIVITIES	OPERATING ACTIVITIES									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
Net income										Net income		$	536		$	412
Adjustments to reconcile net income to net cash provided by operating activities:										Adjustments to reconcile net income to net cash provided by operating activities:
		Amortization			146			136		Depreciation			684			635
		Non-cash interest expense, net			33			22		Amortization			106			90
		Non-cash interest (income) expense on affiliate notes, net			(136	)		(2	)	Non-cash interest expense, net			21			23
		Equity in net losses of affiliates			33			45		Non-cash interest income on affiliate notes, net			(166	)		(82	)
		Losses (gains) on investments and other (income) expense, net			(217	)		213		Equity in net losses of affiliates			5			19
		Non-cash contribution expense			23					Losses (gains) on investments and other non-cash (income) expense, net			(117	)		(70	)
		Minority interest			21			33		Non-cash contribution expense			6			23
		Deferred income taxes			423			128		Minority interest			38			19
		Proceeds from sales or exchanges of trading securities			553			85		Deferred income taxes			201			264
		Changes in operating assets and liabilities, net of effects of acquisitions and divestitures								Changes in operating assets and liabilities, net of effects of acquisitions and divestitures:
			Change in accounts receivable, net		(4	)		32			Change in accounts receivable, net		(47	)		(3	)
			Change in accounts payable		70			(176	)		Change in accounts payable and accrued expenses related to trade creditors		21			(25	)
			Change in other operating assets and liabilities		7			327			Change in other operating assets and liabilities		40			8

			Net cash provided by operating activities from continuing operations		2,570			2,066			Net cash provided by operating activities		1,328			1,313

FINANCING ACTIVITIES	FINANCING ACTIVITIES									FINANCING ACTIVITIES
	Proceeds from borrowings				4			1,260		Proceeds from borrowings			—			4
	Retirements and repayments of debt				(573	)		(2,293	)	Retirements and repayments of debt			(16	)		(570	)
	Net transactions with affiliates				(1,659	)		(1,598	)	Net transactions with affiliates			120			(704	)
	Other				2					Other			16			—

			Net cash used in financing activities from continuing operations		(2,226	)		(2,631	)		Net cash provided by (used in) financing activities		120			(1,270	)

INVESTING ACTIVITIES	INVESTING ACTIVITIES									INVESTING ACTIVITIES
	Acquisitions, net of cash acquired				(296	)		(22	)	Acquisitions, net of cash acquired			—			(304	)
	Proceeds from sales (purchases) of short-term investments, net				(6	)		4		Proceeds from sales of (purchases of) short-term investments, net			(3	)		3
	Proceeds from sales of investments and assets held for sale				197			4,563		Proceeds from sales of investments			100			48
	Purchases of investments				(62	)		(68	)	Purchases of investments			(13	)		(55	)
	Capital expenditures				(928	)		(1,038	)	Capital expenditures			(681	)		(618	)
	Additions to intangible and other noncurrent assets				(73	)		(61	)	Additions to intangible and other noncurrent assets			(86	)		(48	)

			Net cash (used in) provided by investing activities from continuing operations		(1,168	)		3,378			Net cash used in investing activities		(683	)		(974	)

(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS					(824	)		2,813
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS										INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS			765			(931	)
CASH AND CASH EQUIVALENTS, beginning of period	CASH AND CASH EQUIVALENTS, beginning of period				1,509			400		CASH AND CASH EQUIVALENTS, beginning of period			428			1,509

CASH AND CASH EQUIVALENTS, end of period	CASH AND CASH EQUIVALENTS, end of period			$	685		$	3,213		CASH AND CASH EQUIVALENTS, end of period		$	1,193		$	578

See notes to condensed consolidated financial statements.

COMCAST HOLDINGS CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED ~~SEPTEMBER~~JUNE 30, ~~2004~~2005
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

~~(Unaudited)~~

1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Basis of Presentation

We have prepared these unaudited condensed consolidated financial statements based upon Securities and Exchange Commission ("SEC") rules that permit reduced disclosure for interim periods. We are an indirect, ~~wholly owned~~wholly-owned subsidiary of Comcast Corporation ("Comcast"). Our presentation differs from the condensed 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.~~9. All significant intercompany accounts and transactions ~~within~~between entities consolidated in our financial statements have been eliminated.

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

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

For a more complete discussion of our accounting policies and certain other information, refer to our annual financial statements for the preceding fiscal year as filed with the SEC.

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

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

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

	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.~~

Reclassifications

Certain reclassifications have been made to the prior year financial statements to conform to those classifications used in ~~2004.~~2005.

2. RECENT ACCOUNTING PRONOUNCEMENTS

SFAS No. 123R

In December 2004, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards ("SFAS") No. 123 (revised 2004), "Share-Based Payment" ("SFAS No. 123R"), which replaces SFAS No. 123, "Accounting for Stock-Based Compensation" ("SFAS No. 123") and supersedes Accounting Principles Board ("APB") Opinion No. 25, "Accounting for Stock Issued to Employees" ("APB No. 25"). SFAS No. 123R requires all share-based payments to employees, including grants of employee stock options, to be recognized in the financial statements based on their fair values, beginning with the next fiscal year that begins after June 15, 2005, with early adoption encouraged. In addition, SFAS No. 123R will cause unrecognized expense (based on the amounts in our pro forma footnote disclosure) related to options vesting after the date of initial adoption to be recognized as a charge to results of operations over the remaining vesting period. We are required to adopt SFAS No. 123R beginning January 1, 2006. Under SFAS No. 123R, we must determine the appropriate fair value model to be used for valuing share-based payments, the amortization method for compensation cost and the transition method to be used at the date of adoption. The transition alternatives include prospective and retroactive adoption methods. Under the retroactive methods, prior periods may be retroactively adjusted either as of the beginning of the year of adoption or for all

COMCAST HOLDINGS CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED ~~SEPTEMBER~~JUNE 30, ~~2004~~2005
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)

~~(Unaudited)~~

~~2. RECENT ACCOUNTING PRONOUNCEMENTS~~

~~FIN 46/FIN 46R~~

~~In January 2003,~~periods presented. The prospective method requires that compensation expense be recorded for all unvested stock options and share awards at the ~~Financial Accounting Standards Board ("FASB") issued Interpretation No. 46, "Consolidation~~beginning of ~~Variable Interest Entities" ("FIN 46"). We adopted~~ the ~~provisions~~first quarter of FIN 46 effective January 1, 2002. Since our initial application of FIN 46, the FASB addressed various implementation issues regarding the application of FIN 46 to entities outside its originally interpreted scope, focusing on Special Purpose Entities, or SPEs. In December 2003, the FASB revised FIN 46 ("FIN 46R"), which delayed the required implementation date until March 31, 2004 for entities that are not SPEs. The adoption of ~~FIN 46R did not~~SFAS No. 123R, while the retroactive methods would record compensation expense for all unvested stock options and share awards beginning with the first period retroactively adjusted. We are evaluating the requirements of SFAS No. 123R, and we expect that the adoption of SFAS No. 123R will have a material impact on our ~~financial condition or~~consolidated results of operations. We have not determined the date or method of adoption or the effect of adopting SFAS No. 123R.

~~EITF 03-16~~FIN No. 47

In March ~~2004,~~2005, the ~~Emerging Issues Task Force~~FASB issued FASB Interpretation ("~~EITF"~~FIN") ~~reached a consensus regarding Issue~~ No. ~~03-16,~~47 "Accounting for ~~Investments in Limited Liability Companies"~~Conditional Asset Retirement Obligations—an Interpretation of FASB Statement No. 143, ("~~EITF 03-16"~~FIN No. 47"). ~~EITF 03-16 requires investments in limited~~FIN No. 47 clarifies the timing of liability ~~companies ("LLCs") that have separate ownership accounts~~recognition for ~~each investor to be accounted for similar to~~legal obligations associated with the retirement of a ~~limited partnership investment under Statement of Position No. 78-9, "Accounting for Investments in Real Estate Ventures." Investors are required to apply~~tangible long-lived asset when the ~~equity~~timing and/or method of ~~accounting to their investments at~~settlement are conditional on a ~~much lower ownership threshold than the 20% threshold applied under Accounting Principles Board ("APB")~~future event. FIN No. ~~18, "The Equity Method of Accounting for Investments in Common Stock." EITF 03-16~~47 is effective for ~~the first period beginning after June 15, 2004.~~us no later than December 31, 2005. We ~~adopted EITF 03-16 on July 1, 2004. The~~do not expect that the adoption of ~~EITF 03-16 did not~~FIN No. 47 will have a material impact on our consolidated financial condition or results of operations.

~~3. ACQUISITIONS AND OTHER SIGNIFICANT EVENTS~~

~~TechTV~~SFAS No. 153

~~On May 10,~~In December 2004, ~~we completed~~ the ~~purchase~~FASB issued SFAS No. 153, "Exchanges of ~~TechTV Inc.~~Nonmonetary Assets—an amendment of APB Opinion No. 29" ("~~TechTV"~~SFAS No. 153") ~~by acquiring all outstanding common and preferred stock of TechTV from Vulcan Programming Inc.~~. The guidance in APB Opinion No. 29, "Accounting 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, whichNonmonetary Transactions" ("APB Opinion No. 29"), 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).~~

~~Liberty Exchange Agreement~~

~~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~~principle that exchanges of nonmonetary assets should be measured based on 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 thefair value of the ~~shares exchanged~~assets exchanged. The guidance in APB Opinion No. 29, however, included certain exceptions to that principle. SFAS No. 153 amends APB Opinion No. 29 to eliminate the exception for nonmonetary exchanges of similar productive assets and replaces it with a general exception for exchanges of nonmonetary assets that do not have commercial substance. SFAS No. 153 is effective for such exchange transactions occurring in fiscal periods beginning after June 15, 2005.

SFAS No. 154

In May 2005, the FASB issued SFAS No. 154, "Accounting Changes and Error Corrections—a replacement of APB Opinion No. 20 and FASB Statement No. 3" ("SFAS No. 154"). This Statement replaces APB Opinion No. 20, "Accounting Changes" and FASB Statement No. 3, "Reporting Accounting Changes in Interim Financial Statements," and changes the requirements for the accounting for and reporting of a change in accounting principle. SFAS No. 154 applies to all voluntary changes in an accounting principle. It also applies to changes required by an accounting pronouncement in the ~~transaction between cash, our additional investment~~unusual instance that the pronouncement does not include specific transition provisions. When a pronouncement includes specific transition provisions, those provisions should be followed. SFAS No. 154 is effective for accounting changes and error corrections occurring in ~~E!, International~~fiscal years beginning after December 15, 2005.

COMCAST HOLDINGS CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED ~~SEPTEMBER~~JUNE 30, ~~2004~~2005
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)

~~(Unaudited)~~

Channel Networks and the resolution of the Comcast litigation related to the contribution agreement. The values of certain 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 our acquisition of the additional interest in E! and the acquisition of International Channel Networks have been reflected in our consolidated statement of operations from the date of the transaction. The results of International Channel Networks and the impact of our additional interest in E! are not material for pro forma presentation.

4.3. INVESTMENTS

		September 30, 2004		December 31, 2003				(Dollars in millions)
		(in millions)						June 30, 2005		December 31, 2004
Fair value method	Fair value method					Fair value method
	Liberty Media Corporation	$	872	$	2,644	Liberty Media Corporation		$	1,019	$	1,098
	Liberty Media International		366			Liberty Global			362		366
	Sprint		574		349	Sprint			660		656
	Other		43		41	Other			88		24

			1,855		3,034				2,129		2,144
Equity method	Equity method		260		331	Equity method			285		268
Cost method	Cost method		131		137	Cost method			179		163

	Total investments		2,246		3,502		Total investments		2,593		2,575
Less, current investments	Less, current investments		81		139	Less, current investments			61		87

Noncurrent investments	Noncurrent investments	$	2,165	$	3,363	Noncurrent investments		$	2,532	$	2,488

Fair Value Method

We hold unrestricted equity investments, which we account for as available for sale or trading securities, in ~~certain~~ publicly traded companies. Our investments in Liberty Media Corporation, Liberty Global, Inc. formerly known as Liberty Media International, Inc. ("Liberty Global") and Sprint are accounted for as trading securities. The net unrealized pre-tax gains on investments accounted for as available for sale securities as of ~~September~~June 30, ~~2004, and December 31, 2003,~~2005, of ~~$10~~$14 million, ~~and $42 million, respectively, have~~has been reported in our consolidated balance sheet ~~principally~~ as a component of accumulated other comprehensive ~~loss,~~income, net of related deferred income taxes of ~~$4 million~~$5 million.

The cost, fair value and ~~$15 million, respectively.~~unrealized gains related to our available for sale securities are as follows (dollars in millions):

	June 30, 2005		December 31, 2004
Cost	$	71	$	19
Unrealized gains		14		—

Fair value	$	85	$	19

~~On June 7, 2004,~~In February 2005, we ~~received~~entered into a 10 year prepaid forward sale of approximately 112.7 million shares of Liberty ~~Media International, Inc. ("Liberty International")~~Global Series A common stock for proceeds of $99 million.

The increase in our other fair value method investments relates principally to non-cash additions during 2005 in connection with the ~~spin-off by Liberty~~exchange of ~~Liberty International. In the spin-off, each share~~one 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 noncurrentour equity method 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~~JUNE 30, ~~2004~~2005
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)

~~(Unaudited)~~

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

September 30,
2004
December 31,
2003

Cost $ 20 $ 44
Unrealized gains 10 43
Unrealized losses (1 )

Fair value

$
30

$
86

Investment Income, ~~(Loss),~~ Net

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

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 )

		Three Months Ended June 30,						Six Months Ended June 30,
		2005			2004			2005			2004
Interest, dividend and other investment income (expense)		$	—		$	(2	)	$	(3	)	$	(8	)
Gains (losses) on sales and exchanges of investments, net			—			(1	)		—			(1	)
Investment impairment losses			(3	)		(3	)		(3	)		(3	)
Unrealized gains (losses) on trading securities and hedged items			65			(38	)		(70	)		(55	)
Mark to market adjustments on derivatives related to trading securities and hedged items			60			200			189			159
Mark to market adjustments on derivatives			1			(10	)		(3	)		2

	Investment income, net	$	123		$	146		$	110		$	94

~~Other Income~~4. GOODWILL

~~On September 30, 2004, we sold our 20% interest~~The changes in ~~DHC Ventures, LLC (Discovery Health Channel) to Discovery Communications, Inc.~~the carrying amount of goodwill by business segment (see Note 8) for ~~approximately $149 million~~the period presented are as follows (dollars in ~~cash and recognized a gain on the sale of approximately $94 million to other income.~~millions):

	Cable		Content		Corporate and Other		Total
Balance, December 31, 2004	$	4,714	$	824	$	198	$	5,736
Adjustments		—		73		—		73
Acquisitions		—		—		61		61

Balance, June 30, 2005	$	4,714	$	897	$	259	$	5,870

5. LONG-TERM DEBT

The Cross-Guarantee Structure

~~To simplify Comcast's capital structure,~~ Comcast and certain of its cable holding company subsidiaries, including our ~~wholly owned~~wholly-owned subsidiary Comcast Cable Communications, LLC ("Comcast Cable"), have unconditionally guaranteed each other's debt securities and indebtedness for borrowed money. As of ~~September~~June 30, ~~2004, $20.588~~2005, $21.450 billion of Comcast's debt securities were entitled to the benefits of the cross-guarantee structure, including ~~$6.350~~$6.336 billion of Comcast Cable's debt securities.

Comcast Holdings Corporation is not a guarantor, and none of its debt is guaranteed. As of ~~September~~June 30, ~~2004, $905~~2005, $906 million of debt was outstanding at Comcast Holdings Corporation.

~~Repayments~~Letters of ~~Senior Notes~~Credit

~~On March 31, 2004, we repaid all $250 million principal amount~~As of June 30, 2005, certain of our ~~8.875% senior notes due 2007. On May 1, 2004, we repaid all $300~~subsidiaries had unused irrevocable standby letters of credit totaling $13 million ~~principal amount of our 8.125% senior notes due 2004. These repayments were both financed with available cash.~~to cover potential fundings under various agreements.

COMCAST HOLDINGS CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED ~~SEPTEMBER~~JUNE 30, ~~2004~~2005
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)

~~(Unaudited)~~

ZONES

At maturity, holders of our 2.0% Exchangeable Subordinated Debentures due 2029 (the "ZONES") are entitled to receive in cash an amount equal to the higher of the principal amount of the ZONES of $1.807 billion or the market value of Sprint common stock. Prior to maturity, each ZONES is exchangeable at the ~~holders'~~holder's option for an amount of cash equal to 95% of the market value of Sprint common stock.

We separated the accounting for the ZONES into derivative and debt components. We record the change in the carrying value of the debt component of the ZONES (see Note 3) and the change in the fair value of the derivative component of the ZONES ~~and the change in the carrying value of the debt component of the ZONES~~ as follows ~~(in~~(dollars in millions):

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

			ZONES
			Six Months Ended June 30,
			2005			2004
Balance at beginning of period:
	Debt component		$	540		$	515
	Derivative component			168			268

		Total		708			783
Change in debt component to interest expense				14			13
Change in derivative component to investment income, net				(51	)		(56	)
Balance at end of period:
	Debt component			554			528
	Derivative component			117			212

		Total	$	671		$	740

Interest Rates

Excluding the derivative component of the ZONES whose changes in fair value are recorded to investment income, ~~(loss),~~ net, our effective weighted average interest rate on our total debt outstanding was ~~7.48%~~7.49% and ~~7.56%~~7.48% as of ~~September~~June 30, ~~2004~~2005, and December 31, ~~2003,~~2004, respectively. As of June 30, 2005, and December 31, 2004, accrued interest was $113 million and $111 million, respectively.

Derivatives

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

~~Lines and Letters of Credit~~

~~As of September 30, 2004, we and certain of our subsidiaries had unused lines of credit of $287 million under our respective credit facilities.~~

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

COMCAST HOLDINGS CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED ~~SEPTEMBER~~JUNE 30, ~~2004~~2005
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)

~~(Unaudited)~~

6. STOCKHOLDERS' EQUITY

Stock-Based Compensation

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

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

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

2004
2003
2004
2003

Net income, as reported $ 239 $ 3,397 $ 651 $ 3,716
Add: Total stock-based compensation expense included in net income, as reported above 2 2 10 4
Deduct: Total stock-based compensation expense determined under fair value based method for all awards relating to continuing operations, net of related tax effects (20 ) (23 ) (59 ) (64 )
Deduct: Total stock-based compensation expense determined under fair value based method for all awards relating to discontinued operations, net of related tax effects (5 ) (12 )

Pro forma, net income $ 221 $ 3,371 $ 602 $ 3,644

	Three Months Ended June 30,						Six Months Ended June 30,
	2005			2004			2005			2004
Net income, as reported	$	332		$	314		$	536		$	412
Add: Stock-based compensation expense included in net income, as reported above, net of related tax effects		6			6			7			8
Deduct: Stock-based compensation expense determined under fair value-based method for all awards, net of related tax effects		(17	)		(21	)		(31	)		(39	)

Pro forma, net income	$	321		$	299		$	512		$	381

The pro forma effect on net income for the interim periods by applying SFAS No. 123 may not be indicative of the effect on net income or loss in future years ~~because~~since SFAS No. 123 does not take into consideration additional awards that may be granted in future ~~years are anticipated.~~years.

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

~~(Unaudited)~~

Comprehensive Income

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

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

	Three Months Ended June 30,						Six Months Ended June 30,
	2005			2004			2005		2004
Net income	$	332		$	314		$	536	$	412
Unrealized gains (losses) on marketable securities		(4	)		(1	)		—		(1	)
Reclassification adjustments included in net income		1			7			1		15

Comprehensive income	$	329		$	320		$	537	$	426

~~7. STATEMENT OF CASH FLOWS—SUPPLEMENTAL INFORMATION~~

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

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

2004
2003
2004
2003
Interest $ 86 $ 90 $ 374 $ 420
Income taxes $ 39 $ 12 $ 141 $ 56

	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 acquisition of 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 activity.

COMCAST HOLDINGS CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED ~~SEPTEMBER~~JUNE 30, ~~2004~~2005
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)

~~(Unaudited)~~

8.7. COMMITMENTS AND CONTINGENCIES

Contingencies

At Home

Litigation has been filed against us as a result of our alleged conduct with respect to our investment in and distribution relationship with At Home Corporation. At Home was a provider of high-speed Internet services that filed for bankruptcy protection in September 2001. Filed actions are: (i) class action lawsuits against us, Brian L. Roberts (our President and Chief Executive Officer and a director), AT&T (the former controlling shareholder of At Home and also a former distributor of the At Home service) and ~~other corporate and individual defendants~~others in the Superior Court of San Mateo County, California, alleging breaches of fiduciary duty in connection with transactions agreed to in March 2000 among At Home, AT&T, Cox Communications, Inc. (Cox is also an investor in At Home and a former distributor of the At Home service) and us; (ii) class action lawsuits against Comcast, ~~Cable Communications, LLC,~~ AT&T and others in the United States District Court for the Southern District of New York, alleging securities law violations and common law fraud in connection with disclosures made by At Home in 2001; 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 us, Brian L. Roberts, Cox and others, alleging breaches of fiduciary duty relating to the March 2000 transactions and seeking recovery of alleged short-swing profits of at least $600 million, pursuant to Section 16(b) of the Securities Exchange Act of 1934, as amended, 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 (item (i) above), have been stayed by the United States Bankruptcy Court for the Northern District of California, the court in which At Home filed for bankruptcy, as violating the automatic bankruptcy stay. The decision to stay the actions was affirmed by the District Court, and an appeal to the Court of Appeals for the Ninth Circuit is pending. In the Southern District of New York actions (item (ii) above), the court ~~ordered the actions consolidated into a single action. All of the defendants served motions to dismiss on February 11, 2003. The court~~has dismissed the common law fraud claims against ~~us and Mr. Roberts,~~all defendants, leaving only ~~a claim for "control person" liability under~~ the ~~Securities Exchange Act of 1934.~~securities law claims. In a subsequent decision, the court limited the remaining ~~claim~~claims against us and Mr. Roberts to disclosures that are alleged to have been made by At Home prior to August 28, 2000. On March 10, 2005, the court certified a class of all purchasers of publicly-traded At Home stock between March 28, 2000, and September 28, 2001. Plaintiffs have moved to amend the complaint so as to move the commencement of the class period back to November 9, 1999. We are opposing this amendment. The Delaware case ~~has been~~(item (iii) above), was transferred to the United States District Court for the Southern District of New ~~York, and we have moved to dismiss the Section 16(b) claims.~~York. The court dismissed the Section 16(b) claims against us ~~leaving only~~for failure to state a claim and the ~~claim for~~ breach of fiduciary ~~duty.~~duty claim for lack of federal jurisdiction. The plaintiffs have appealed the decision dismissing the Section 16(b) claims and have indicated that they intend to recommence the breach of fiduciary duty claim. In the meantime, we have entered into an agreement with plaintiffs tolling the statute of limitations for the breach of fiduciary duty claim.

We deny any wrongdoing in connection with the claims that have been made directly against us, our subsidiaries and Brian L. Roberts, and ~~intend to defend~~are defending all of these claims vigorously. The final disposition of these claims is not expected to have a material adverse effect on our consolidated financial position but could possibly be material to our consolidated results of operations of any one

COMCAST HOLDINGS CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 2005
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)

period. Further, no assurance can be given that any adverse outcome would not be material to our consolidated financial position.

Acacia.

In June 2004, Acacia Media Technologies Corporation ("Acacia") filed a lawsuit against us and others in the United States District Court for the Northern District of California. The complaint alleges infringement of certain United States patents that allegedly relate to systems and methods for transmitting and/or receiving digital audio and video content. The complaint seeks injunctive relief and damages in an unspecified amount. In the event that a Court ultimately determines that we infringe on any of the patents, we may be subject to substantial damages, which may include treble damages and/or an injunction that could require us to materially modify certain products and services that we currently offer to subscribers. We believe that the claims are without merit and intend to defend the action vigorously.

The final disposition of this claim is not expected to have a material adverse effect on our consolidated financial position but could possibly be material to our consolidated results of operations of any one period. Further, no assurance can be given that any adverse outcome would not be material to our consolidated financial position.

Other

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

~~9. FINANCIAL DATA BY BUSINESS SEGMENT~~

Our reportable segments consist of our cable and content businesses. Beginning in the first quarter of 2004, we elected to disclose our content businesses separately as a reportable segment even though they do

COMCAST HOLDINGS CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED ~~SEPTEMBER~~JUNE 30, ~~2004~~2005
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)

~~(Unaudited)~~8. FINANCIAL DATA BY BUSINESS SEGMENT

~~not meet the quantitative disclosure requirements~~Our reportable segments consist of ~~SFAS No. 131, "Disclosures About Segments of an Enterprise~~our Cable and ~~Related Information."~~Content businesses. Our content segment consists of our national networks E! Entertainment and Style Network, The Golf Channel, Outdoor Life Network, ~~G4techTV~~G4 and AZN Television (formerly known as International ~~Channel Networks. As a result of this change, we have presented the comparable 2003 content segment amounts.~~Channel). In evaluating the profitability of our ~~segments' profitability,~~segments, the components of net income (loss) below operating income (loss) before depreciation and amortization are not separately evaluated by our management ~~(amounts~~(dollars in millions).

	Cable(1)		Content		Corporate and Other(2)			Total		Cable(1)		Content		Other(2)			Eliminations(3)			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
Three Months Ended June 30, 2005
Revenues(4)										$	2,083	$	234	$	71		$	(12	)		2,376
Operating income (loss) before depreciation and amortization(5)											898		97		(57	)		(1	)		937
Depreciation and amortization		333		42		13			388		346		29		16			(3	)		388
Operating income (loss)		444		20		(75	)		389		552		68		(73	)		2			549
Capital expenditures		304		4		2			310		336		3		10			—			349
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
Three Months Ended June 30, 2004
Revenues(4)										$	1,902	$	199	$	63			(16	)	$	2,148
Operating income (loss) before depreciation and amortization(5)											846		77		(43	)		6			886
Depreciation and amortization		333		32		14			379		294		39		16			(4	)		345
Operating income (loss)		409		26		(84	)		351		552		38		(59	)		10			541
Capital expenditures		324		3		16			343		334		6		3			—			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
Six Months Ended June 30, 2005
Revenues(4)										$	4,066	$	447	$	155		$	(27	)		4,641
Operating income (loss) before depreciation and amortization(5)											1,740		174		(104	)		(3	)		1,807
Depreciation and amortization		956		116		41			1,113		692		74		34			(10	)		790
Operating income (loss)		1,406		92		(198	)		1,300		1,048		100		(138	)		7			1,017
Capital expenditures		899		14		15			928		660		7		14			—			681
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
Six Months Ended June 30, 2004
Revenues(4)										$	3,721	$	375	$	169			(28	)	$	4,237
Operating income (loss) before depreciation and amortization(5)											1,585		146		(98	)		3			1,636
Depreciation and amortization		957		96		48			1,101		623		74		37			(9	)		725
Operating income (loss)		1,198		59		(178	)		1,079		962		72		(135	)		12			911
Capital expenditures		1,009		10		19			1,038		595		10		13			—			618
As of September 30, 2004
As of June 30, 2005
Assets	$	36,880	$	2,549	$	2,008		$	41,437	$	39,648	$	2,530	$	760		$	(124	)	$	42,814
As of December 31, 2003
As of December 31, 2004
Assets	$	34,952	$	2,048	$	3,402		$	40,402	$	38,480	$	2,533	$	942		$	(13	)	$	41,942

COMCAST HOLDINGS CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 2005
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)

(1): Our regional ~~programming~~sports and news 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, 2004~~
~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(Unaudited)~~

(2)

~~Corporate~~Other includes Comcast-Spectacor, other businesses and ~~other includes corporate~~ activities ~~elimination entries and all other businesses~~ not presented in our cable or content ~~segments. Assets included in this caption consist primarily of our investments (see Note 4).~~segments, and Comcast management fees and allocations.

(3)

~~Non-US~~Included in the Eliminations column are intersegment transactions that our segments enter into with one another. The most common types of transactions are the following:

•: our content segment generates affiliate revenue by selling cable network programming to our cable segment, which represents a substantial majority of the revenue elimination amount
•: our cable segment receives incentives offered by our content segment when negotiating programming contracts that are recorded as a reduction of programming costs
•: our cable segment generates revenue by selling the use of satellite feeds to our content segment
•: our cable segment generates revenue by selling the use of its fiber-optic lines and site conditioning to business activities included in the Other caption, who pay our cable segment a lump sum and hold the property and the related depreciation expense and accumulated depreciation. Our cable segment's revenue is generated through the amortization of the deferred revenue recorded for the lump sum payment.
•: revenue included in the Other caption is generated by selling long-distance services to our cable segment.

(4)

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

~~(4)~~(5)

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

~~10.~~
COMCAST HOLDINGS CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 2005
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)

9. RELATED PARTY TRANSACTIONS

Our related party transactions for the interim periods presented are as follows ~~(in~~(dollars in millions):

		Three Months Ended September 30,					Nine Months Ended September 30,					Three Months Ended June 30,				Six Months Ended June 30,
		2004		2003			2004		2003			2005		2004		2005		2004
Content affiliation agreement revenue	Content affiliation agreement revenue	$	13	$	9		$	41	$	26	Content affiliation agreement revenue	$	10	$	15	$	20	$	28
Comcast management fees	Comcast management fees		41		39			120		109	Comcast management fees		44		40		86		79
Comcast cost sharing charges:	Comcast cost sharing charges:										Comcast cost sharing charges:
	Cable-related costs		56		47			161		129	Cable-related costs		60		52		139		105
	Other costs		48		40			145		116	Other costs		42		49		99		97
Software licensing fees	Software licensing fees		2					5			Software licensing fees		5		3		10		3
Interest income (expense) on affiliate notes, net			54		(10	)		136		2
Interest income on affiliate notes, net											Interest income on affiliate notes, net		90		41		166		82

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~~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~~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~~2005 or ~~2003~~2004 interim periods.

COMCAST HOLDINGS CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 2005
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Concluded)
(Unaudited)

With the exception of cash payments related to interest and state 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~~June 30, ~~2004~~2005, and December 31, ~~2003,~~2004, 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,~~We act as the paying agent for all programming payments for all of Comcast's cable subsidiaries, including ours. Programming payments related to Comcast's other cable subsidiaries are recorded as due from affiliates. As a result, included ~~within~~in accounts payable and accrued expenses ~~and other current liabilities~~related to trade creditors as of ~~September~~June 30, ~~2004~~2005, and December 31, ~~2003~~2004, is approximately ~~$603~~$656 million and ~~$568~~$600 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~~June 30, ~~2004~~2005, and December 31, ~~2003,~~2004, 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~~(dollars in millions):

	September 30, 2004		December 31, 2003		June 30, 2005		December 31, 2004
	Notes Receivable	Notes Payable	Notes Receivable	Notes Payable	Notes Receivable	Notes Payable	Notes Receivable	Notes Payable
Principal balance	$4,799	$627	$3,284	$58	$5,817	$717	$5,378	$704
Interest receivable (payable)	$52	($21)	$26	($3)	$113	$(54)	$72	$(31)
Interest rate range	5.0% to 7.5%	5.0% to 7.5%	5.0% to 7.5%	5.0% to 7.5%	6.75% to 7.5%	2.78% to 7.5%	6.25% to 7.5%	6.25% to 7.5%
Maturity date range	2009-2014	2012-2014	2012-2013	2012-2013	2009-2014	2012-2015	2009-2014	2012-2014

COMCAST HOLDINGS CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED ~~SEPTEMBER~~JUNE 30, ~~2004~~2005

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~~wholly-owned subsidiary of ~~Comcast Corporation ("Comcast").~~Comcast. We are principally involved in the management and operation of broadband communications networks (our cable segment) and in the management of programming content that is distributed over national cable ~~and satellite~~ television networks (our content segment). ~~During~~For the ~~nine~~six months ended ~~September 30, 2004,~~in 2005, we received ~~over 87%~~nearly 88% of our revenue from our cable segment, primarily through monthly subscriptions to our video, ~~and~~ high-speed Internet and phone services, as well as from advertising. Subscribers typically pay us monthly, based on rates and related charges that vary according to their chosen level of service and the type of equipment they use. Revenue from our content segment is derived from the sale of advertising time and affiliation agreements with cable and satellite television companies.

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 Comcast 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.

April 20, 2005, Comcast and Time Warner ~~have agreed to work together to explore submitting a joint proposal~~reached definitive agreements to acquire ~~cable~~substantially all the assets of Adelphia Communications Corporation for a total of $12.7 billion in cash and 16% of the ~~fifth-largest~~common stock of Time Warner's cable ~~television company~~subsidiary, Time Warner Cable Inc. ("TWC"). Comcast also will exchange certain of its cable systems with TWC for certain TWC cable systems. In addition, TWC will redeem Comcast's 17.9% interest in TWC and Time Warner Entertainment Company, L.P. ("TWE") will redeem Comcast's 4.7% interest in TWE (together an effective 21% economic ownership of TWC). As a result of these transactions, Comcast will add approximately 1.8 million basic subscribers for a net cash investment of approximately $1.5 billion. Following these transactions, Comcast will serve a total of approximately 23.2 million basic subscribers. These transactions are subject to customary regulatory review and approvals, including Hart-Scott-Rodino, Federal Communications Commission and local franchise approvals, as well as the Adelphia bankruptcy process, which involves approvals by the bankruptcy court having jurisdiction of Adelphia's Chapter 11 case and Adelphia's creditors. Closing is expected to occur in the ~~United States.~~

~~Refer to Note 3 to our financial statements included in Item 1 for a discussion~~first or second quarter of ~~this transaction.~~2006.

Results of Continuing Operations

Revenues

Consolidated revenues for the three and ~~nine~~six month interim periods in ~~2004~~2005 increased ~~$266~~$228 million and ~~$682~~$404 million, or 10.6% and 9.5% respectively, from the same periods in ~~2003.~~2004. Of these increases, ~~$171~~$181 million and ~~$530~~$345 million relate to our cable segment and $35 million and $72 million relate to our content segment which isare 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 aschanges relate to our ~~acquisition of TechTV. The remaining increases are~~other business activities, primarily Comcast-Spectacor, whose revenues were negatively affected by the ~~result of our corporate and other segment, which includes the operating results of Comcast-Spectacor.~~National Hockey League ("NHL") lockout.

COMCAST HOLDINGS CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 2005

Operating, selling, general and administrative expenses

Consolidated operating, selling, general and administrative expenses for the three and ~~nine~~six month interim periods in ~~2004~~2005 increased ~~$219~~$177 million and ~~$449~~$233 million, or 14.0% and 9.0%, respectively, from the same periods in ~~2003.~~2004. Of these increases, ~~$136~~$129 million and ~~$323~~$190 million ~~respectively,~~ relate to our cable segment, and $15 million and $44 million relate to our content segment, which isare discussed separately below. The remaining ~~increases are~~changes relate to our other business activities, primarily Comcast-Spectacor, whose operating expenses were positively affected by the ~~result of growth in our content segment, principally due to~~NHL lockout.

~~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~~six month interim periods in ~~2004 is consistent with the amounts reported for~~2005 increased $43 million and $49 million, or 14.2% and 7.7%, respectively, from 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~~2004. The increases are primarily attributable to our cable segment, principally due to the level of our recent capital expenditures.

Amortization

Amortization expense for the three month period remained unchanged from the same period in 2004, primarily due to a non-recurring adjustment reducing our intangible amortization associated with ~~intangibles acquired~~obtaining updated valuation reports for an acquisition. The $16 million or 17.8% increase in the ~~TechTV~~six month interim period in 2005 from the same 2004 period is primarily attributable to our recent acquisitions and ~~Liberty exchange transactions.~~intangible additions.

~~Cable~~ Segment Operating Results

~~The following table presents~~Operating income before depreciation and amortization is the primary basis we use to measure the operational strength and performance of 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)~~: segments. 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 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)~~("GAAP"), in the business segment footnote to our condensed consolidated 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.

All percentages are calculated based on actual amounts. Minor differences may exist due to rounding.

COMCAST HOLDINGS CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 2005

Cable Segment Operating Results

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

	Three Months Ended June 30,				Increase
	2005		2004		$		%
Video	$	1,391	$	1,330	$	61	4.6	%
High-speed Internet		386		314		72	22.9
Advertising sales		138		129		9	7.0
Other		108		71		37	52.1
Franchise fees		60		58		2	3.4

Revenues		2,083		1,902		181	9.5
Operating, selling, general and administrative expenses		1,185		1,056		129	12.2

Operating income before depreciation and amortization	$	898	$	846	$	52	6.1	%

	Six Months Ended June 30,				Increase
	2005		2004		$		%
Video	$	2,749	$	2,630	$	119	4.5	%
High-speed Internet		751		601		150	25.0
Advertising sales		250		234		16	6.8
Other		197		142		55	38.7
Franchise fees		119		114		5	4.4

Revenues		4,066		3,721		345	9.3
Operating, selling, general and administrative expenses		2,326		2,136		190	8.9

Operating income before depreciation and amortization	$	1,740	$	1,585	$	155	9.8	%

Revenues

Video revenue consists of our basic, expanded basic, premium, pay-per-view ~~equipment~~ and digital cable ~~services.~~services, as well as equipment rentals. The increases in video revenue for the interim periods from ~~2003~~2004 to ~~2004~~2005 are primarily due to ~~increases in monthly average revenue per subscriber as a result of~~ rate increases and subscriber growth in our ~~traditional~~digital video ~~service and growth in digital subscribers, reflecting increased consumer demand for new digital features.~~service. From ~~September~~June 30, ~~2003~~2004, to ~~September~~June 30, ~~2004,~~2005, we added approximately ~~428,000~~445,000, net, digital subscribers, or a ~~16.8%~~15.7% increase in digital subscribers. We expect continued growth in our video ~~services~~ revenue.

The increases in high-speed Internet revenue for the interim periods from ~~2003~~2004 to ~~2004~~2005 are primarily due to the addition of approximately ~~595,000~~560,000, net, high-speed Internet subscribers ~~from September 30, 2003 to September~~since June 30, 2004, or a ~~28.7%~~22.6% increase in high-speed Internet subscribers. We expect continued growth in our high-speed Internet ~~revenue growth as overall demand for our services continues to increase.~~revenue.

The increases in advertising sales revenue for the interim periods from ~~2003~~2004 to ~~2004~~2005 are primarily due to the effects of growth in regional/national advertising as a result of the continuing success of our regional interconnects and a stronger local advertising market, ~~and an increase~~offset, in part, by a decrease in political ~~advertising.~~advertising during 2005. We expect continued growth in our advertising sales revenue.

COMCAST HOLDINGS CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 2005

Other revenue includes installation revenues, revenue from our regional sports and news networks, guide revenues, commissions from electronic retailing, revenue from ~~our regional programming networks,~~ commercial data ~~revenue,~~services and revenue from other ~~product offerings~~service offerings. The increases in other revenue for the interim periods from 2004 to 2005 are primarily due to the launch of our regional sports network in Chicago.

The increases in franchise fees collected from our cable subscribers for the interim periods from 2004 to 2005 are primarily attributable to the increases in our revenues upon which the fees apply.

Operating, Selling, General and ~~phone revenues.~~

Administrative Expenses

~~Total operating,~~Operating, selling, general and administrative expenses increased $129 million and $190 million respectively, for the three and six months ended June 30, 2005 compared to the same periods in 2004. The increases occurred in multiple expense categories and are primarily a result of growth in our high-speed Internet, digital cable services, the launch of Comcast Digital Voice and increases in management fees and allocations.

Content Segment Operating Results

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

Three Months Ended
June 30,
Six Months Ended
June 30,

2005
2004
2005
2004
Revenues $ 234 $ 199 $ 447 $ 375
Operating, selling, general and administrative expenses 137 122 273 229

Operating income before depreciation and amortization $ 97 $ 77 $ 174 $ 146

Our content segment consists of the national networks E! Entertainment and Style Network, The Golf Channel, Outdoor Life Network, G4 and AZN Television (formerly known as International Channel).

Revenues

Our content segment revenue increased $35 million and $72 million, or 17.7% and 19.2% respectively, for the three and six month interim periods in 2005, from ~~2003 to~~the same periods in 2004. The increases reflect increases in distribution and advertising revenue for all of the networks and the effects of the acquisitions of TechTV and AZN Television in May 2004 ~~primarily~~and July 2004, respectively.

Operating, Selling, General and Administrative Expenses

Operating, selling, general and administrative expenses increased $15 million and $44 million, or 12.3% and 19.2% respectively, for the three and six month interim periods in 2005, from the same periods in 2004. Expenses increased in the 2005 interim periods as a result of higher ~~operating~~development and marketing expenses ~~associated with~~for signature events and other original programming in all of our networks, as well as due to the ~~growth~~effects of the acquisitions of TechTV and AZN Television in ~~our high-speed Internet~~May 2004 and ~~digital cable services, and increases in charges from cost-sharing arrangements.~~July 2004, respectively.

COMCAST HOLDINGS CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 2005
Consolidated Income (Expense) Items
Interest Expense
The ~~decreases~~increases in interest expense for the ~~interim~~three and six month periods from ~~2003~~2004 to ~~2004~~2005 are principally due to ~~our decreased amount~~the effects of ~~debt outstanding as a result~~the increase in short term interest rates offset by the effects of our net debt ~~reduction during 2003 and 2004.~~repayments.
Interest Income ~~(Expense)~~ on Affiliate Notes, Net
The ~~changes~~increases in interest income ~~(expense)~~ on affiliate notes, net for the ~~interim~~three and six month periods from ~~2003~~2004 to ~~2004~~2005 are principally due to an increase in our notes receivable from ~~affiliates during 2003 and 2004.~~affiliates.

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

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

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 )

Three Months Ended
June 30,
Six Months Ended
June 30,

2005
2004
2005
2004

Interest, dividend and other investment income (expense) $ — $ (2 ) $ (3 ) $ (8 )
Gains (losses) on sales and exchanges of investments, net — (1 ) — (1 )
Investment impairment losses (3 ) (3 ) (3 ) (3 )
Unrealized gains (losses) on trading securities and hedged items 65 (38 ) (70 ) (55 )
Mark to market adjustments on derivatives related to trading securities and hedged items 60 200 189 159
Mark to market adjustments on derivatives 1 (10 ) (3 ) 2

Investment income, net $ 123 $ 146 $ 110 $ 94

We have entered into derivative financial instruments that we account for at fair value and which economically hedge the market price fluctuations in the common stock of ~~certain~~most (as of our investments accounted for as trading securities. Investment income (loss), net includes the fair value adjustments related to our trading securities and derivative financial instruments. The change in the fair valueJune 30, 2005) of our investments accounted for as trading securities ~~was substantially offset by~~and hedged securities. The differences between the unrealized gains (losses) on trading securities and hedged items and the mark-to-market adjustments on derivatives related to trading securities and hedged items, as presented in the table above, result from one or more of the following:
•
We did not maintain an economic hedge for our entire investment in the security during some portion or for all of the period.

•
There were changes in the ~~fair value~~derivative valuation assumptions such as interest rates, volatility and dividend policy.

•
The magnitude of the ~~related derivatives, except for~~difference between the ~~mark~~market price of the underlying security to ~~market adjustments on our investment in Sprint~~which the derivative relates and ~~on 6 million shares~~the strike price of ~~Liberty International for~~ the three and nine months ended September 30, 2004, on 116 million shares 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~~derivative.

•
The change in the ~~fair~~time value component of 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 because we have not entered into a corresponding derivative to hedge this market exposure.
        Investment income (loss), net for the 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 2003.
period.

COMCAST HOLDINGS CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED ~~SEPTEMBER~~JUNE 30, ~~2004~~2005
•
The security to which the derivative relates changed due to a corporate reorganization of the issuing company to a security with a different volatility rate.

•
The issuing company paid a new or an increased dividend to the shareholders of the security.
Other Income
        ~~On September 30,~~The increase in other income for the six month period from 2004 ~~we sold our 20% interest in DHC Ventures, LLC~~ to ~~Discovery Communications, Inc. for approximately $149~~2005 is primarily due to a $24 million ~~in cash and recognized a~~ gain on the ~~sale~~exchange of ~~approximately $94 million to other income.~~one of our equity method investments.
Income Tax Expense
        ~~The changes in~~Our income tax ~~expense for~~rate differs from the ~~interim periods from 2003~~statutory rate primarily due to ~~2004 are primarily the result of~~ the effects of ~~changes in our~~state income ~~(loss) from continuing operations before~~ taxes and ~~minority interest.~~adjustments to prior year accruals.
Minority Interest
The changes in minority interest for the three and six month interim periods from ~~2003~~2004 to ~~2004~~2005 are attributable to the effects of changes in the net income or loss of our less than wholly owned consolidated subsidiaries and to the minority interests in certain subsidiaries acquired or formed during 2004.

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

COMCAST HOLDINGS CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED JUNE 30, 2005

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
There have been no significant changes to the information required under this Item from what was disclosed in our ~~2003~~2004 Form 10-K.

ITEM 4. CONTROLS AND PROCEDURES
Conclusion regarding disclosure controls and procedures.Our chief executive officer and ~~our~~ co-chief financial officers, after evaluating the effectiveness of our disclosure controls and procedures (as defined in the Securities Exchange Act of 1934 Rules 13a-15(e) or 15d-15(e)) as of the end of the period covered by this report, have concluded, based on the evaluation of these controls and procedures required by paragraph (b) of Exchange Act Rules 13a-15 or 15d-15, that our disclosure controls and procedures were effective.
Changes in internal control over financial reporting.    There were no changes in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Exchange Act Rules 13a-15 or 15d-15 that occurred during our last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II.    OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Refer to Note 87 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
Exhibits required to be filed by Item 601 of Regulation S-K:
31
Certifications of Chief Executive Officer and Co-Chief Financial Officers pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32
~~Certification~~Certifications of Chief Executive Officer and Co-Chief Financial Officers pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

COMCAST HOLDINGS CORPORATION AND SUBSIDIARIES
FORM 10-Q
QUARTER ENDED ~~SEPTEMBER~~JUNE 30, ~~2004~~2005

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~~there unto duly authorized.
COMCAST HOLDINGS CORPORATION

/S/  s/  LAWRENCE J. SALVA
Lawrence J. Salva
Senior Vice President, Chief Accounting Officer
and Controller
~~(Principal~~ (Principal Accounting Officer)
Date: ~~November 12, 2004~~August 11, 2005

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

Fair value	$	30	$	86

		COMCAST HOLDINGS CORPORATION
		/S/ s/ LAWRENCE J. SALVA Lawrence J. Salva Senior Vice President, Chief Accounting Officer and Controller ~~(Principal~~ (Principal Accounting Officer)