Overview

We are the nation's leading provider of cable services, offering a variety of entertainment, information and communications services to residential and commercial customers. As of March 31, 2009, our cable systems served approximately 24.1 million video customers, 15.3 million high-speed Internet customers and 6.8 million phone customers and passed over 50.7 million homes in 39 states and the District of Columbia. We report the results of these operations as our Cable segment, which generates approximately 95% of our revenue. Our Cable segment generates revenue primarily through subscriptions to our video, high-speed Internet and phone services ("cable services"). Other Cable segment revenue sources include advertising and the operation of our regional sports networks. Our other reportable segment, Programming, consists primarily of our consolidated national programming networks, including E!, Golf Channel, VERSUS, G4 and Style. Revenue from our Programming segment is generated primarily from the sale of advertising, from monthly per subscriber license fees paid by multichannel video providers and from licensing our programming internationally.

Highlights and business developments for the three months ended March 31, 2009 include the following:

• an increase in consolidated revenue of 5.3% to approximately $8.8 billion and an increase in consolidated operating income of 16.5% to approximately $1.8 billion compared to the same period in 2008

• an increase in Cable segment revenue of 5.5% to approximately $8.3 billion and an increase in operating income before depreciation and amortization of 8.4% to approximately $3.4 billion compared to the same period in 2008

• the addition of approximately 288,000 digital video customers, approximately 329,000 high-speed Internet customers, approximately 298,000 digital phone customers and a decrease of approximately 78,000 video customers during the three months ended March 31, 2009

• a reduction in Cable segment capital expenditures of 16.6% to approximately $1.1 billion compared to the same period in 2008

Consolidated Operating Results



                                                         Three Months Ended            Increase/
                                                              March 31                 (Decrease)
(in millions)                                          2009              2008
Revenue                                             $    8,835        $    8,389              5.3 %
Costs and Expenses:
Operating, selling, general and administrative
(excluding depreciation and amortization)                5,391             5,215              3.4
Depreciation                                             1,380             1,390             (0.7 )
Amortization                                               253               229             10.2
Operating income                                         1,811             1,555             16.5
Other income (expense) items, net                         (572 )            (309 )           85.1
Income before income taxes                               1,239             1,246             (0.6 )
Income tax expense                                        (461 )            (508 )           (9.3 )
Net income from consolidated operations                    778               738              5.4
Less: Net income (loss) attributable to
noncontrolling interests                                     6                 6                -
Net income attributable to Comcast Corporation      $      772        $      732              5.5 %

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

Consolidated Revenue

Our Cable segment accounted for substantially all of the increase in consolidated revenue for the three months ended March 31, 2009 compared to the same period in 2008. The remaining increase related to our other business activities, primarily from growth in our Comcast Interactive Media business and from Comcast Spectacor. Cable segment revenue and Programming segment revenue are discussed separately in "Segment Operating Results."

Consolidated Operating, Selling, General and Administrative Expenses

Our Cable segment accounted for substantially all of the increase in consolidated operating, selling, general and administrative expenses for the three months ended March 31, 2009 compared to the same period in 2008. The remaining increase related to our other business activities, primarily from growth in our Comcast Interactive Media business and from Comcast Spectacor. Cable segment and Programming segment operating, selling, general and administrative expenses are discussed separately in "Segment Operating Results."

Consolidated Depreciation and Amortization

Depreciation expense for the three months ended March 31, 2009 compared to the same period in 2008 remained relatively stable primarily due to a decrease in the rate of capital expenditures.

The increase in amortization expense for the three months ended March 31, 2009 compared to the same period in 2008 was primarily due to an increase in software intangibles.

Segment Operating Results

Our segment operating results are presented based on how we assess operating performance and internally report financial information. To measure the performance of our operating segments, we use operating income before depreciation and amortization, excluding impairments related to fixed and intangible assets, and gains or losses from the sale of assets, if any. This measure eliminates the significant level of noncash depreciation and amortization expense that results from the capital-intensive nature of our businesses and from intangible assets recognized in business combinations. Additionally, it is unaffected by our capital structure or investment activities. We use this measure to evaluate our consolidated operating performance and the operating performance of our operating segments and to allocate resources and capital to our operating segments. It is also a significant performance measure in our annual incentive compensation programs. We believe that this measure is useful to investors because it is one of the bases for comparing our operating performance with that of other companies in our industries, although our measure may not be directly comparable to similar measures used by other companies. Because we use this metric to measure 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 in the United States ("GAAP") in the business segment footnote to our consolidated financial statements (see Note 10 to our condensed consolidated financial statements). This measure should not be considered a substitute for operating income (loss), net income (loss) attributable to Comcast Corporation, net cash provided by operating activities, or other measures of performance or liquidity we have reported in accordance with GAAP.

Cable Segment Operating Results



                                                 Three Months Ended
                                                      March 31               Increase/(Decrease)
(in millions)                                     2009         2008           $               %
Video(a)                                       $    4,929    $   4,778    $     151             3.2 %
High-speed Internet                                 1,909        1,750          159             9.1
Phone                                                 777          587          190            32.2
Advertising(a)                                        262          346          (84 )         (24.5 )
Other(a)                                              238          231            7             3.9
Franchise fees                                        234          224           10             4.5
Revenue                                             8,349        7,916          433             5.5
Operating expenses(a)                               3,345        3,163          182             5.7
Selling, general and administrative
expenses(a)                                         1,598        1,611          (13 )          (0.8 )
Operating income before depreciation and
amortization                                   $    3,406    $   3,142    $     264             8.4 %

(a) Reclassifications have been made to 2008 amounts to conform to classifications used in 2009.

Cable Segment Revenue

Video

Our video revenue increased during the three months ended March 31, 2009 compared to the same period in 2008 primarily due to rate adjustments and customer upgrades to digital and advanced services, offset by a decline in video customers. During the three months ended March 31, 2009, we added approximately 288,000 digital video customers. As of March 31, 2009, approximately 72% of our 24.1 million video customers subscribed to at least one of our digital video services. During the three months ended March 31, 2009, the number of video customers decreased by approximately 78,000 primarily due to increased competition in our service areas, as well as the weakness in the economy. Our average monthly video revenue per video customer increased to approximately $68 at March 31, 2009 from approximately $64 at March 31, 2008. Continued competition and weak economic conditions are expected to result in further declines in the number of video customers.

High-Speed Internet

The increase in high-speed Internet revenue for the three months ended March 31, 2009 compared to the same period in 2008 was primarily due to an increase in the number of customers. During the three months ended March 31, 2009, we added approximately 329,000 high-speed Internet customers. Average monthly revenue per high-speed Internet customer has remained relatively stable. The rate of customer and revenue growth has slowed due to the market maturing, increased competition and weak economic conditions.

Phone

Our phone revenue increased for the three months ended March 31, 2009 compared to the same period in 2008 due to an increase in the number of phone customers. During the three months ended March 31, 2009, we added approximately 298,000 digital phone customers. Average monthly revenue per phone customer has remained relatively stable due to customers receiving service as part of a promotional offer or in a bundled service offering. The rate of customer and revenue growth has slowed due to increased competition and weak economic conditions.

Advertising

Advertising revenue decreased for the three months ended March 31, 2009 compared to the same period in 2008 primarily due to a decline in political advertising and a decline in the overall television advertising market, including the automotive and housing sectors.

Other

We also generate revenue from our regional sports networks, our digital media center, on-screen guide advertising, commissions from electronic retailing networks and fees for other services.

Franchise Fees

The increase in franchise fees collected from our cable customers for the three months ended March 31, 2009 compared to the same period in 2008 was primarily due to the increase in the revenue on which the fees apply.

Cable Segment Operating Expenses



                                   Three Months Ended
                                        March 31              Increase/(Decrease)
      (in millions)                 2009         2008          $               %
      Video programming          $    1,775    $   1,619   $     156             9.6 %
      Technical labor costs             573          523          50             9.6
      High-speed Internet               120          138         (18 )         (13.0 )
      Phone                             169          200         (31 )         (15.5 )
      Other                             708          683          25             3.7
      Total operating expenses   $    3,345    $   3,163   $     182             5.7 %

Video programming expenses increased primarily due to rate increases, additional digital customers and additions to the number of programming options we offer. Technical labor increased primarily due to growth in the

number of customers, including the activity associated with the transition by broadcasters from analog to digital transmission, and the transition of more of our programming to digital transmission. High-speed Internet expenses and phone expenses include certain direct costs identified by us for providing these services, but do not fully reflect the amounts for operating expenses that would be necessary to provide these services on a stand-alone basis. Other related costs associated with providing these services are generally shared among all our cable services and are not allocated to these captions. High-speed Internet and phone expenses decreased primarily due to lower support service costs that were the result of operating efficiencies and our entering into new contracts with lower cost providers and renegotiating existing contracts. Other expenses increased primarily due to the continued expansion of our cable services to small and medium-sized businesses.

Cable Segment Selling, General and Administrative Expenses



                                                 Three Months Ended
                                                      March 31                 Increase/(Decrease)
(in millions)                                   2009           2008             $                %
Customer service                             $      478     $       442     $      36              8.1 %
Marketing                                           369             399           (30 )           (7.5 )
Administrative and other                            751             770           (19 )           (2.5 )
Total selling, general and
administrative expenses                      $    1,598     $     1,611     $     (13 )           (0.8 )%

Customer service expenses increased primarily due to the growth in activity associated with the transition by broadcasters from analog to digital transmission and the transition of more of our programming to digital transmission. Marketing expenses decreased primarily due to the timing of our marketing campaigns and lower costs for media advertising. Administrative and other expenses declined slightly primarily due to the impact of the divisional reorganization and other cost reduction programs implemented in 2008.

Programming Segment Operating Results



                                                Three Months Ended
                                                     March 31                Increase/(Decrease)
(in millions)                                   2009          2008           $               %
Revenue                                       $     361     $     363     $    (2 )            (0.8 )%
Operating, selling, general and
administrative expenses                             249           250          (1 )            (0.4 )
Operating income before depreciation and
amortization                                  $     112     $     113     $    (1 )            (1.5 )%

Programming Segment Revenue

Programming segment revenue decreased slightly for the three months ended March 31, 2009 compared to the same period in 2008 primarily due to a decline in advertising revenue. For the three months ended March 31, 2009 and 2008, advertising accounted for approximately 40% and 43%, respectively, of total Programming revenue. For both the three months ended March 31, 2009 and 2008, approximately 13% of our Programming segment revenue was generated by our Cable segment. These amounts are eliminated in our consolidated financial statements but are included in the amounts presented in the table above.

Consolidated Other Income (Expense) Items



                                                           Three Months Ended
                                                                March 31
    (in millions)                                        2009             2008
    Interest expense                                   $    (570 )     $     (621 )
    Investment income (loss), net                             13               79
    Equity in net income (losses) of affiliates, net         (14 )            (35 )
    Other income (expense)                                    (1 )            268
    Total                                              $    (572 )     $     (309 )

Interest Expense

The decrease in interest expense for the three months ended March 31, 2009 compared to the same period in 2008 was primarily due to the effects of our debt repurchases, as well as to the effects of decreases in interest rates on our variable rate debt and on debt subject to variable interest rate swap agreements.

Investment Income (Loss), Net

The components of investment income (loss), net for the three months ended March 31, 2009 and 2008 are presented in a table in Note 4 to our condensed consolidated financial statements.

Other Income (Expense)

For the three months ended March 31, 2008, other income included a gain of approximately $235 million on the sale of our 50% interest in the Insight asset pool in connection with the Insight transaction.

Income Tax Expense

Income tax expense for the three months ended March 31, 2009 and 2008 reflects income tax rates that differ from the federal statutory rate primarily due to state income taxes and interest on uncertain tax positions. Income tax expense for the three months ended March 31, 2009 was reduced by approximately $48 million related to accrued interest associated with the settlement of an uncertain tax position. We expect our 2009 annual effective tax rate to be in the range of 40% to 45%.

Liquidity and Capital Resources

Our businesses generate significant cash flows from operating activities. We believe that we will be able to meet our current and long-term liquidity and capital requirements, including fixed charges, through our cash flows from operating activities; through existing cash, cash equivalents and investments; through available borrowings under our existing credit facilities; and through our ability to obtain future external financing. We anticipate that we will continue to use a substantial portion of our cash flows to fund our capital expenditures, to invest in business opportunities, to meet our debt repayment obligations and to return capital to shareholders.

Operating Activities

Details of net cash provided by operating activities are presented in the table
below.



                                                                   Three Months Ended
                                                                        March 31
(in millions)                                                    2009              2008
Operating income                                              $    1,811        $    1,555
Depreciation and amortization                                      1,633             1,619
Operating income before depreciation and amortization              3,444             3,174
Noncash share-based compensation and contribution expense             54                62
Changes in operating assets and liabilities                         (188 )            (279 )
Cash basis operating income                                        3,310             2,957
Payments of interest                                                (664 )            (708 )
Payments of income taxes                                            (161 )             (20 )
Proceeds from interest and dividends received                         27                31
Excess tax benefit under SFAS No. 123R presented in
financing activities                                                   -                (1 )
Net cash provided by operating activities                     $    2,512        $    2,259

The decrease in interest payments for the three months ended March 31, 2009 compared to the same period in 2008 was primarily due to the effects of decreases in interest rates on debt subject to variable interest rate swap agreements and to the maturity in 2008 of certain of our higher rate debt. The increase in income tax payments for the three months ended March 31, 2009 compared to the same period in 2008 was primarily due to a $140 million tax payment made in 2009 that related to 2008. We did not make any comparable payments during the three months ended March 31, 2008.

Financing Activities

Net cash used in financing activities for the three months ended March 31, 2009 consisted primarily of debt repurchases and repayments of $352 million and dividend payments of $180 million. These cash outflows were partially offset by cash proceeds from borrowings of $20 million.

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

Available Borrowings Under Credit Facilities

We traditionally maintain significant availability under our lines of credit and commercial paper program to meet our short-term liquidity requirements. As of March 31, 2009, amounts available under our facilities totaled approximately $5.5 billion.

Share Repurchases and Dividends

As of March 31, 2009, we had approximately $4.1 billion of availability remaining under our share repurchase authorization. Although we did not repurchase any shares under our Board-authorized share repurchase program during the three months ended March 31, 2009, we may repurchase stock from time to time subject to market conditions.

In February 2009, our Board of Directors approved a quarterly dividend of $0.0675 per share as part of our planned annual dividend of $0.27 per share.

Investing Activities

Net cash used in investing activities for the three months ended March 31, 2009 consisted primarily of cash paid for capital expenditures of $1.2 billion and cash paid for intangible assets of $133 million. Capital expenditures have been our most significant recurring investing activity and we expect that this will continue in the future.

Critical Accounting Judgments and Estimates

The preparation of our consolidated financial statements requires us to make estimates that affect the reported amounts of assets, liabilities, revenue and expenses, and the related disclosure of contingent assets and contingent liabilities. We base our judgments on historical experience and on various other assumptions that we believe are reasonable under the circumstances, the results of which form the basis for making estimates about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

We believe our judgments and related estimates associated with the valuation and impairment testing of our cable franchise rights and the accounting for income taxes are critical in the preparation of our consolidated financial statements.

For a full discussion of the accounting judgments and estimates that we have identified as critical in the preparation of our consolidated financial statements, please refer to our 2008 Annual Report on Form 10-K.