Comcast Portfolio Generates Net Gains


Gains in digital cable and a new focus on high-speed
Internet services helped to drive revenue and cash flow at Comcast Corp. for the fourth
quarter of 1999 and the year.

But one of the major drivers of new wealth for the company
is coming from an unlikely source -- venture-capital investments.

Comcast for the first time released detailed information on
those investments, including some from Comcast Interactive Capital Group (CIC), a
venture-capital fund that primarily invests in Internet start-ups. The returns opened some
analysts' eyes.

Comcast has major investments in closely related cable and
communications companies such as Excite@Home Corp. ($918 million), AT&T Corp. ($2.03
billion), Sprint Corp. ($4.2 billion) and the former Motorola Inc. ($53 million).

But the real high-flying investment was its $30 million
stake in Internet Capital Group, which has ballooned in value to $4.13 billion.

ICG is a holding company that invests in Internet
companies. Its stock, which had traded as low as $12 per share last year, closed at
$105.75 Feb. 29. Comcast bought in at about 50 cents per share.

As a whole, Comcast's portfolio more than tripled in value
between December 1998 and December 1999, from $4.3 billion to $13.2 billion.

"They've had some phenomenal investments," SG
Cowen Securities Corp. analyst Gary Farber said. "It's important to highlight them.
Longer-term, who's to say it isn't a currency they can spin off?"

In a conference call with analysts regarding Comcast's
fourth-quarter results, executive vice president and treasurer John Alchin said the
company added $7 billion to $8 billion in incremental value through its investments. He
added that Comcast plans to monetize some of those holdings -- about $300 million worth --
through a series of small trades in the first few months of this year.

Comcast isn't the only cable company that invests in
companies in and outside of the industry. Others, including Cablevision Systems Corp., are
also beginning to tout some of those deals that have done well. "They've had more
hits than misses," Farber said of Comcast.

By the way, Comcast's core cable business also had a decent
quarter and year. Revenue and cash flow rose by about 16 percent each in the fourth
quarter on a pro forma basis.

For the full year -- assuming all acquisitions and
divestitures were effective Jan. 1, 1998 -- revenue rose 14.5 percent and operating cash
flow rose 16.2 percent.

At the cable division, revenue rose 8.9 percent in the
quarter to $802.2 million, while pro forma operating cash flow rose 10 percent to $372.3

As usual, QVC performed well. Quarterly revenue at the
electronic retailer rose 17.8 percent to $888.3 million and operating cash flow rose 13.4
percent to $161.7 million.

Comcast executives told analysts last Monday that they plan
an all-out push to double cable-modem subscribers in 2000. "Comcast@Home will be the
focal point for cable this year," Alchin said.

Comcast finished the year with 142,000 cable-modem
subscribers, up from 81,000 at the end of 1998.

Revenue and cash-flow gains in 1999 were aided by the push
behind digital-cable sales. The MSO's digital-subscriber count rose from 355,000 in the
third quarter to 515,000 in the fourth quarter.

New services like telephony also have great potential for
the company. President Brian Roberts said such recent events as the pending mergers
between America Online Inc. and Time Warner Inc. and between AT&T Corp. and MediaOne
Group Inc. put Comcast in an enviable position.

"The world got more complicated [with the AOL/Time
Warner deal], but I can't see anything that is not good for Comcast." Roberts said
during the analyst call. "It is more critical than less that AT&T [Corp.] and/or
AOL have a business relationship with Comcast."

Roberts said Comcast is no closer to a telephony deal with
AT&T -- part of its settlement with AT&T to drop out of the running for MediaOne
last year was that Comcast would get "most-favored-nation" status in a future
telephony deal.

Although it still expects to do a telephony deal with
AT&T, Comcast has begun its own Internet-protocol-telephony trials, and it has
received a commitment from Cisco Systems Inc. to provide telephony-ready cable modems.

"Time doesn't stop because corporate intrigue is
playing itself out," Roberts said.