Common use of Operating Income Clause in Contracts

Operating Income. 217.3 156.4 138.4 OTHER (INCOME) EXPENSE Interest expense, including intercompany interest, net..... 231.2 263.6 214.6 Equity in net losses (income) of affiliates and other...... 238.6 (16.3) (7.6) 469.8 247.3 207.0 LOSS BEFORE INCOME TAX BENEFIT AND EXTRAORDINARY ITEMS........................................ (252.5) (90.9) (68.6) INCOME TAX BENEFIT............................................ (16.6) (37.4) (25.3) LOSS BEFORE EXTRAORDINARY ITEMS............................... (235.9) (53.5) (43.3) EXTRAORDINARY ITEMS........................................... (2.8) (0.6) NET LOSS...................................................... (238.7) (53.5) (43.9) ACCUMULATED DEFICIT Beginning of year.......................................... (2,127.1) (1,914.3) (1,827.6) Retirement of common stock................................. (17.7) (133.3) (20.4) Cash dividends, $.0933 per share per year.................. (32.4) (26.0) (22.4) End of year................................................ ($2,415.9)========= ($2,127.1)========= ($1,914.3)========= - 88 - COMCAST CORPORATION AND SUBSIDIARIES SCHEDULE I -- CONDENSED FINANCIAL INFORMATION OF REGISTRANT UNCONSOLIDATED (PARENT ONLY) (In millions) 1997 Year Ended December 31, 1996 1995 ERATING ACTIVITIES Net loss................................................... ($238.7) ($53.5) ($43.9) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization............................ 7.0 8.9 6.5 Non-cash interest expense, net........................... 106.8 136.2 105.5 Equity in net losses (income) of affiliates.............. 275.2 (15.2) (2.7) Extraordinary items...................................... 2.8 0.6 Deferred income taxes and other.......................... 88.9 68.4 41.1 242.0 144.8 107.1 Increase in other current assets......................... (Decrease) increase in accrued interest and other current liabilities.............................. (0.2) (79.9) (1.5) 42.8 (1.2) 36.7 Net cash provided by operating activities............ 161.9 186.1 142.6 OP FINANCING ACTIVITIES Proceeds from borrowings................................... 800.9 Retirement and repayment of debt .......................... (59.5) (300.9) Issuance of preferred stock................................ 500.0 Issuances (repurchases) of common stock, net............... 470.2 (175.9) (7.1) Dividends.................................................. (34.0) (26.8) (22.4) Other...................................................... 12.7 43.0 52.5 Net cash provided by (used in) financing activities.. 889.4 (159.7) 523.0 INVESTING ACTIVITIES Net transactions with affiliates........................... (1,026.4) 9.5 (641.7) Capital expenditures....................................... (18.6) (20.8) (11.9) Other...................................................... (3.2) (13.0) (15.7) Net cash used in investing activities................ (1,048.2) (24.3) (669.3) INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS........................................... 3.1 2.1 (3.7) CASH AND CASH EQUIVALENTS, beginning of year.................. 9.7 7.6 11.3 CASH AND CASH EQUIVALENTS, end of year........................ $12.8 $9.7 $7.6 ======== ======= ====== - 89 - COMCAST CORPORATION AND SUBSIDIARIES SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995 (In millions) Balance at Beginning Effect of QVC Additions Charged to Costs and Deductions from Balance at End of Year Acquisition Expenses Reserves(A) of Year 1997..................................... $97.1 $ $65.4 $47.5 $115.0 1996..................................... 81.3 65.1 49.3 97.1 1995..................................... 11.3 57.8 51.4 39.2 81.3 Allowance for Obsolete Electronic Retailing Inventories 1997..................................... $34.7 $ $37.0 $27.2 $44.5 1996..................................... 28.5 29.7 23.5 34.7 1995..................................... 18.4 28.4 18.3 28.5 Allowance for Doubtful Accounts <FN>

Operating Income. 217.3 156.4 138.4 OTHER (INCOME418) EXPENSE ---------- 639,802 ---------- 568,999 (1,014) --------- 536,220 --------- 419,873 (35,122) -------- 397,939 -------- 213,491 Other income (expense): Interest income.......................................... 30,565 19,379 879 Interest expense, including intercompany interest......................................... (14,487) (10,270) (2,326) Other, net..... 231.2 263.6 214.6 Equity in net losses ............................................... Income before income tax expense........................... 5,154 ---------- 590,231 1,079 --------- 430,061 661 -------- 212,705 Income tax expense......................................... Net income................................................. Net income per share: (income206,572) of affiliates and other...... 238.6 ---------- $ 383,659 ========== (16.3151,456) --------- $ 278,605 ========= (66,317) -------- $146,388 ======== Basic.................................................... Diluted.................................................. Weighted average shares outstanding: $ 2.78 ========== $ 2.66 ========== $ 2.01 ========= $ 1.93 ========= $ 1.18 ======== $ 1.18 ======== Common shares............................................ 138,020 138,560 124,462 Dilutive potential common shares......................... Total weighted average shares outstanding........ 9,876 ---------- 147,896 ========== 8,929 --------- 147,489 ========= -- -------- 124,462 ======== 30 DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (IN THOUSANDS, EXCEPT NUMBER OF SHARES) RETAINED OTHER COMMON STOCK ADDITIONAL EARNINGS COMPREHENSIVE TREASURY STOCK --------------------- PAID-IN (ACCUMULATED GAINS -------------------- SHARES AMOUNT CAPITAL DEFICIT) (7.6LOSSES) 469.8 247.3 207.0 LOSS BEFORE INCOME TAX BENEFIT AND EXTRAORDINARY ITEMS........................................ SHARES AMOUNT December 31, 1995............ 50,000,000 $ 500 $ 665,107 $(252.5171,444) $(1,269) -- $ -- Net income................. -- -- -- 146,388 -- -- -- Merger with Arethusa....... 17,893,344 179 550,507 -- -- -- -- Stock options exercised.... 460,065 5 4,418 -- -- -- -- Exchange rate changes, net...................... -- -- -- -- 341 -- -- December 31, 1996............ 68,353,409 684 1,220,032 (25,056) (90.9928) (68.6) INCOME TAX BENEFIT............................................ (16.6) (37.4) (25.3) LOSS BEFORE EXTRAORDINARY ITEMS............................... (235.9) (53.5) (43.3) EXTRAORDINARY ITEMS........................................... (2.8) (0.6) NET LOSS...................................................... (238.7) (53.5) (43.9) ACCUMULATED DEFICIT Beginning of year.......................................... (2,127.1) (1,914.3) (1,827.6) Retirement -- -- Net income................. -- -- -- 278,605 -- -- -- Issuance of common stock................................. ... 1,250,000 12 82,270 -- -- -- -- Two-for-one stock split.... 69,649,474 696 -- (17.7696) -- -- -- Dividends to stockholders............. -- -- -- (133.319,503) -- -- -- Stock options exercised.... 57,065 1 410 -- -- -- -- Exchange rate changes, net...................... -- -- -- -- (20.4894) Cash dividends-- -- Loss on investments, $.0933 per share per year.................. net... -- -- -- -- (32.4106) (26.0) (22.4) End of year................................................ ($2,415.9)========= ($2,127.1)========= ($1,914.3)========= - 88 - COMCAST CORPORATION AND SUBSIDIARIES SCHEDULE I -- CONDENSED FINANCIAL INFORMATION OF REGISTRANT UNCONSOLIDATED (PARENT ONLY) (In millions) 1997 Year Ended -- December 31, 1996 1995 ERATING ACTIVITIES 1997............ 139,309,948 1,393 1,302,712 233,350 (1,928) -- -- Net loss................................................... income................. -- -- -- 383,659 -- -- -- Treasury stock purchases... -- -- -- -- -- 3,518,100 ($238.788,726) Dividends to stockholders............. -- -- -- ($53.569,226) ($43.9) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization............................ 7.0 8.9 6.5 Non-cash interest expense-- -- -- Stock options exercised.... 23,687 -- 94 -- -- -- -- Exchange rate changes, net........................... 106.8 136.2 105.5 Equity in net losses ...................... -- -- -- -- (income291) of affiliates.............. 275.2 (15.2) (2.7) Extraordinary items...................................... 2.8 0.6 Deferred income taxes and other.......................... 88.9 68.4 41.1 242.0 144.8 107.1 Increase in other current assets......................... (Decrease) increase in accrued interest and other current liabilities.............................. (0.2) (79.9) (1.5) 42.8 (1.2) 36.7 Net cash provided by operating activities............ 161.9 186.1 142.6 OP FINANCING ACTIVITIES Proceeds from borrowings................................... 800.9 Retirement and repayment of debt .......................... (59.5) (300.9) Issuance of preferred stock................................ 500.0 Issuances (repurchases) of common stock-- -- Loss on investments, net............... 470.2 ... -- -- -- -- (175.95,779) -- -- December 31, 1998............ 139,333,635 $1,393 $1,302,806 $ 547,783 $(7.17,998) Dividends.................................................. 3,518,100 $(34.088,726) (26.8) (22.4) Other...................................................... 12.7 43.0 52.5 Net cash provided by (used in) financing activities.. 889.4 (159.7) 523.0 INVESTING ACTIVITIES Net transactions with affiliates........................... (1,026.4) 9.5 (641.7) Capital expenditures....................................... (18.6) (20.8) (11.9) Other...................................................... (3.2) (13.0) (15.7) Net cash used in investing activities................ (1,048.2) (24.3) (669.3) INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS........................................... 3.1 2.1 (3.7) CASH AND CASH EQUIVALENTS, beginning of year.................. 9.7 7.6 11.3 CASH AND CASH EQUIVALENTS, end of year........................ $12.8 $9.7 $7.6 =========== ====== ========== ========= ======= ========= - 89 - COMCAST CORPORATION ======== TOTAL STOCKHOLDERS' EQUITY December 31, 1995............ $ 492,894 Net income 146,388 Merger with Arethusa 550,686 Stock options exercised.... 4,423 Exchange rate changes, net...................... 341 December 31, 1996 1,194,732 Net income 278,605 Issuance of common stock... 82,282 Two-for-one stock split.... -- Dividends to stockholders (19,503) Stock options exercised.... 411 Exchange rate changes, net...................... (894) Loss on investments, net... (106) December 31, 1997 1,535,527 Net income 383,659 Treasury stock purchases (88,726) Dividends to stockholders (69,226) Stock options exercised.... 94 Exchange rate changes, net...................... (291) Loss on investments, net... (5,779) December 31, 1998 $1,755,258 ========== The accompanying notes are an integral part of the consolidated financial statements. DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS YEARS CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME YEAR ENDED DECEMBER 31, 1998 1997 1996 Net income.................................................. $383,659 $278,605 $146,388 Other comprehensive gains (losses), net of tax: Reclassification adjustment for losses included in net Comprehensive income........................................ $377,589 $277,605 $146,729 ======== ======== ======== The accompanying notes are an integral part of the consolidated financial statements. DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS YEAR ENDED DECEMBER 31, 1998 1997 1996 Operating activities: Net income.............................................. $ 383,659 $ 278,605 $ 146,388 by operating activities: Depreciation and amortization........................ 130,271 108,335 75,767 Gain on sale of assets............................... (418) (1,014) (35,122) Gain on sale of investment securities................ (1,116) (1,529) -- Deferred tax provision............................... 61,403 34,650 17,278 Accretion of discount on investment securities....... (14,568) (10,505) (159) Amortization of debt issuance costs.................. 521 456 2,570 Changes in operating assets and liabilities: Accounts receivable.................................. (26,153) (32,959) (64,715) Rig inventory and supplies and other current assets............................................. (21,911) (3,319) (2,789) Other assets, non-current............................ (705) 949 (1,747) Accounts payable and accrued liabilities............. 40,534 15,256 22,155 Taxes payable........................................ (3,867) 3,893 46,149 Other liabilities, non-current....................... 835 3,885 4,093 Other, net.............................................. (1,301) (335) 365 Net cash provided by operating activities....... 547,184 396,368 210,233 Investing activities: Cash acquired in the merger with Arethusa............... -- -- 20,883 Capital expenditures.................................... (224,474) (281,572) (267,000) Acquisition of drilling rigs and related equipment...... -- (80,990) -- Proceeds from sale of assets............................ 1,011 8,277 40,589 Net change in marketable securities..................... (167,818) (351,682) 5,200 Net cash used in investing activities........... (391,281) (705,967) (200,328) Financing activities: Reacquisition of common stock........................... (88,726) -- -- Payment of dividends.................................... (69,226) (19,503) -- Issuance of common stock................................ -- 82,282 -- Debt (repayments) borrowings, net....................... -- (73,000) 5,523 Issuance of convertible subordinated notes.............. -- 400,000 -- Debt issuance costs..................................... -- (6,062) (2,570) Proceeds from stock options exercised................... 289 660 5,016 Net cash (used in) provided by financing activities.................................... (157,663) 384,377 7,969 Net change in cash and cash equivalents................... (1,760) 74,778 17,874 Cash and cash equivalents, beginning of year 102,958 28,180 10,306 Cash and cash equivalents, end of year.................. $ 101,198========= $ 102,958========= $ 28,180========= The accompanying notes are an integral part of the consolidated financial statements. DIAMOND OFFSHORE DRILLING, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization and Business Diamond Offshore Drilling, Inc. (the "Company") was incorporated in Delaware on April 13, 1989. Loews Corporation ("Loews"), a Delaware corporation of which the Company had been a wholly owned subsidiary prior to the initial public offering in October 1995 (the "Common Stock Offering"), owns 51.6 percent of the outstanding common stock of the Company (see Note 3). The Company, through wholly owned subsidiaries, engages in the worldwide contract drilling of offshore oil and gas xxxxx and is a leader in deep water drilling. The fleet is comprised of 30 semisubmersible rigs, 15 xxxx-up rigs, and one drillship. Principles of Consolidation The consolidated financial statements include the accounts of the Company after elimination of significant intercompany transactions and balances. Cash and Cash Equivalents Short-term, highly liquid investments that have an original maturity of three months or less which are considered part of the Company's cash management activities, rather than part of its investing activities, are considered cash equivalents. Marketable Securities The Company's investments are classified as available for sale and stated at fair value under the terms of Statement of Financial Accounting Standards ("SFAS") No. 115, "Accounting for Certain Investments in Debt and Equity Securities." Accordingly, any unrealized gains and losses, net of taxes, are reported in the Consolidated Balance Sheets in "Accumulated other comprehensive losses" until realized. The cost of debt securities is adjusted for amortization of premiums and accretion of discounts to maturity and such adjustments are included in the Consolidated Statements of Income in "Interest income." The cost of debt securities sold is based on the specific identification method and the cost of equity securities sold is based on the average cost method. Realized gains or losses and declines in value, if any, judged to be other than temporary are reported in the Consolidated Statements of Income in "Other income (expense)." Supplementary Cash Flow Information Cash payments made for interest on long-term debt, including commitment fees, during the years ended December 31, 1998, 1997 and 1996 were $15.0 million, $8.7 million and $3.5 million, respectively. Cash payments made for income taxes during the years ended December 31, 1998, 1997, and 1996 AND 1995 were $151.3 million, $112.1 million, and $3.9 million, respectively. Non-cash financing activities for the year ended December 31, 1996 included $550.7 million for the issuance of 35.8 million shares of common stock and the assumption of stock options for the purchase of 1.0 million shares in connection with the merger between the Company and Arethusa (In millionsOff-Shore) Limited ("Arethusa"). Non-cash investing activities for the year ended December 31, 1996 included $532.9 million of net assets acquired in the merger with Arethusa (see Note 2). Rig Inventory and Supplies Inventories primarily consist of replacement parts and supplies held for use in the operations of the Company. Inventories are stated at the lower of cost or estimated value. 34 Drilling and Other Property and Equipment Drilling and other property and equipment is carried at cost. Maintenance and repairs are charged to income currently while replacements and betterments are capitalized. Costs incurred for major rig upgrades are accumulated in construction work in progress, with no depreciation recorded on the additions, until the month the upgrade is completed and the rig is placed in service. Upon retirement or other disposal of fixed assets, the cost and related accumulated depreciation are removed from the respective accounts and any gains or losses are included in the results of operations. Depreciation is provided on the straight-line method over the remaining estimated useful lives from the date the asset is placed in service. The Company believes that certain offshore drilling rigs, due to their upgrade and design capabilities and their maintenance history, have an operating life in excess of their depreciable life as originally assigned. For this reason, a change in accounting estimate, effective January 1, 1996, increased the estimated useful lives for certain classes of offshore drilling rigs. As compared to the original estimate of useful lives, the effect of such change reduced depreciation expense and increased net income for the year ended December 31, 1996 by approximately $8.5 million and $5.5 million ($0.04 per share), respectively. The estimated useful lives of the Company's offshore drilling rigs, after the change in estimate, range from 10 to 25 years. Other property and equipment is estimated to have useful lives ranging from 3 to 10 years. Capitalized Interest Interest cost for construction and upgrade of qualifying assets is capitalized. During the years ended December 31, 1998, 1997, and 1996, the Company incurred interest cost, including amortization of debt issuance costs, of $15.5 million, $14.7 million, and $6.3 million, respectively. Interest cost capitalized during 1998, 1997, and 1996 was $1.0 million, $4.4 million, and $4.0 million, respectively. Impairment of Long-Lived Assets The Company reviews its long-lived assets for impairment when changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Goodwill Goodwill from the merger with Arethusa (see Note 2) is amortized on a straight-line basis over 20 years. Amortization charged to operating expense during the years ended December 31, 1998, 1997, and 1996 totaled $6.5 million, $6.6 million, and $4.5 million, respectively. Debt Issuance Costs Debt issuance costs are included in the Consolidated Balance at Beginning Effect Sheets in "Other assets" and are amortized over the term of QVC Additions Charged the related debt. Deferred Income Taxes Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Except for selective dividends, the Company's practice prior to Costs 1997 was to reinvest the unremitted earnings of its non-U.S. subsidiaries and Deductions from Balance at End postpone their remittance indefinitely. Thus, no additional U.S. taxes were provided on earnings of Year Acquisition Expenses Reserves(A) these non-U.S. subsidiaries. However, beginning in 1997, the Company changed its practice and intends to repatriate its post-1996 earnings in the foreseeable future. As a result, beginning January 1, 1997, the Company has accrued U.S. taxes on all its post-1996 undistributed non-U.S. earnings. The Company's non-U.S. income tax liabilities are based upon the results of Year 1997..................................... $97.1 $ $65.4 $47.5 $115.0 1996..................................... 81.3 65.1 49.3 97.1 1995..................................... 11.3 57.8 51.4 39.2 81.3 Allowance for Obsolete Electronic Retailing Inventories 1997..................................... $34.7 $ $37.0 $27.2 $44.5 1996..................................... 28.5 29.7 23.5 34.7 1995..................................... 18.4 28.4 18.3 28.5 Allowance for Doubtful Accounts <FN>operations of the various subsidiaries and foreign branches in those jurisdictions in which they are subject to taxation.

Operating Income. 217.3 156.4 138.4 OTHER 728,623 ---------- 79,341 45,089 ---------- 732,126 ---------- 69 ------------ 690,407 ---------- 79,143 Other income (INCOME) EXPENSE expenses): Interest expense, including intercompany interest......................... (21,618) (17,603) (19,721) Other, net..... 231.2 263.6 214.6 Equity in ............................... Income (loss) before income taxes.......... 4,084 ---------- 61,807 6,337 ---------- (11,197) 7,297 ---------- 66,719 Provision for (benefit from) income taxes.. 22,816 ---------- (3,865) ---------- 22,362 ---------- Income (loss) before extraordinary item and cumulative effect of accounting change.... 38,991 (7,332) 44,357 Extraordinary loss on early extinguishment of debt, net losses of taxes..................... Cumulative effect of accounting change, net of taxes.................................. (income11,810) 3,819 -- -- -- -- Net income (loss).......................... Earnings (loss) per share: ---------- $ 31,000 ========== ---------- $ (7,332) ========== ---------- $ 44,357 ========== Income (loss) before extraordinary item and cumulative effect of affiliates and other...... 238.6 accounting change.................................. $ 1.05 $ (16.3.17) $ 1.01 Extraordinary loss on early extinguishment of debt, net of taxes.... (7.6.32) 469.8 247.3 207.0 LOSS BEFORE INCOME TAX BENEFIT AND EXTRAORDINARY ITEMS........................................ -- -- Cumulative effect of accounting change, net of taxes............................ Net income (252.5loss).......................... Average common shares outstanding.......... .11 ---------- $ .84 ========== 37,125,569 ========== -- ---------- $ (.17) ========== 43,901,767 ========== -- ---------- $ 1.01 ========== 44,095,057 ========== See accompanying notes. CONSOLIDATED BALANCE SHEET (90.9DOLLARS IN THOUSANDS) (68.6) INCOME TAX BENEFIT............................................ (16.6) (37.4) (25.3) LOSS BEFORE EXTRAORDINARY ITEMS............................... (235.9) (53.5) (43.3) EXTRAORDINARY ITEMS........................................... (2.8) (0.6) NET LOSS...................................................... (238.7) (53.5) (43.9) ACCUMULATED DEFICIT Beginning of year.......................................... (2,127.1) (1,914.3) (1,827.6) Retirement of common stock................................. (17.7) (133.3) (20.4) Cash dividends, $.0933 per share per year.................. (32.4) (26.0) (22.4) End of year................................................ ($2,415.9)========= ($2,127.1)========= ($1,914.3)========= - 88 - COMCAST CORPORATION AND SUBSIDIARIES SCHEDULE I -- CONDENSED FINANCIAL INFORMATION OF REGISTRANT UNCONSOLIDATED (PARENT ONLY) (In millions) 1997 Year Ended December DECEMBER 31, 1996 1995 ERATING ACTIVITIES Net loss................................................... ($238.7) ($53.5) ($43.9) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation ------------------ 1994 1993 -------- -------- ASSETS Property, plant and amortization............................ 7.0 8.9 6.5 Non-cash interest expenseequipment, net........................... 106.8 136.2 105.5 Equity in net losses (income) of affiliates.............. 275.2 (15.2) (2.7) Extraordinary items...................................... 2.8 0.6 Deferred income taxes and other.......................... 88.9 68.4 41.1 242.0 144.8 107.1 Increase in other current ......................... 175,057 184,809 Other assets......................... (Decrease) increase in accrued interest and other current liabilities.............................. (0.2) (79.9) (1.5) 42.8 (1.2) 36.7 Net cash provided by operating activities............ 161.9 186.1 142.6 OP FINANCING ACTIVITIES Proceeds from borrowings................................... 800.9 Retirement and repayment of debt .......................... (59.5) (300.9) Issuance of preferred stock................................ 500.0 Issuances (repurchases) of common stock, net............... 470.2 (175.9) (7.1) Dividends.................................................. (34.0) (26.8) (22.4) Other...................................................... 12.7 43.0 52.5 Net cash provided by (used in) financing activities.. 889.4 (159.7) 523.0 INVESTING ACTIVITIES Net transactions with affiliates........................... (1,026.4) 9.5 (641.7) Capital expenditures....................................... (18.6) (20.8) (11.9) Other...................................................... (3.2) (13.0) (15.7) Net cash used in investing activities................ (1,048.2) (24.3) (669.3) INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS........................................... 3.1 2.1 (3.7) CASH AND CASH EQUIVALENTS, beginning of year.................. 9.7 7.6 11.3 CASH AND CASH EQUIVALENTS, end of year........................ ............................................... 72,946 75,787 -------- -------- $12.8 501,964 $9.7 $7.6 562,663 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Short-term borrowings and current portion of long-term Long-term debt............................................. 190,336 172,429 Deferred income taxes...................................... 28,482 27,948 Other long-term liabilities................................ 26,740 29,056 Stockholders' equity: Preferred stock, $1.00 par value, authorized: 5,000,000 shares; none issued..................................... -- -- Common stock, $.01 par value, ($1.00 par value--1993) authorized: 100,000,000 shares; issued: 1994 37,193,217 shares; 1993--46,414,317 shares......................... 372 46,414 Capital in excess of par value........................... 7,382 6,389 Retained earnings........................................ 111,150 161,297 -------- -------- 118,904 214,100 Net unrealized losses.................................... (21,222) (21,632) Less: Cost of shares held in treasury: 1994--2,486,057 shares; 1993--2,774,672 shares.......................... (24,502) (27,142) -------- -------- Total stockholders' equity............................. 73,180 165,326 -------- -------- $501,964 $562,663 ======== ======== - 89 - COMCAST CORPORATION AND SUBSIDIARIES SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS YEARS See accompanying notes. AMETEK, INC. CONSOLIDATED STATEMENT OF CASH FLOWS YEAR ENDED DECEMBER 31, 1997----------------------------- 1994 1993 1992 -------- -------- Cash provided by (used for): Net income (loss)............................. Adjustments to reconcile net income (loss) to net cash provided by operating activities: Extraordinary loss on early extinguishment of debt........................................ $ 31,000 11,810 $ (7,332) -- $ 44,357 -- Cumulative effect of accounting change....... (3,819) -- -- Depreciation and amortization................ 37,279 35,907 37,263 Deferred income taxes........................ 4,833 (19,970) 1,814 Resizing, 1996 AND 1995 restructuring and other unusual charges..................................... -- 50,898 -- Proceeds from sale of trading securities..... 31,566 -- -- Changes in operating working capital: (In millionsIncrease) Balance at Beginning Effect of QVC Additions Charged to Costs decrease in receivables.......... (8,590) (633) 2,940 (Increase) decrease in inventories and Deductions from Balance at End of Year Acquisition Expenses Reserves(Aother current assets............................. (9,944) of Year 1997..................................... $97.1 $ $65.4 $47.5 $115.0 1996..................................... 81.3 65.1 49.3 97.1 1995..................................... 11.3 57.8 51.4 39.2 81.3 Allowance for Obsolete Electronic Retailing Inventories 1997..................................... $34.7 $ $37.0 $27.2 $44.5 1996..................................... 28.5 29.7 23.5 34.7 1995..................................... 18.4 28.4 18.3 28.5 Allowance for Doubtful Accounts <FN>(1,035) 2,969 Increase (decrease) in payables, accruals and income taxes........................... 22,423 8,704 (5,228)

Operating Income. 217.3 156.4 138.4 OTHER Other income (INCOMEexpense): -------- 94,972 -------- 44,086 -------- -------- 116,899 -------- 1,976 -------- -------- 71,167 -------- 20,400 -------- Interest income....................... 441 325 275 Gain on sale of land.................. 1,329 -- -- Other income.......................... Income (loss) EXPENSE Interest expense, including intercompany interest, netbefore income taxes..... 231.2 263.6 214.6 Equity in net losses 1,123 -------- (income22,726) -------- 21,360 596 -------- (2,294) -------- (318) 600 -------- (1,892) -------- 18,508 Income tax expense (note 3)............. Net income (loss)..................... 8,208 -------- 13,152 3,246 -------- (3,564) 6,992 -------- 11,516 Less: Dividends on and accretion of affiliates and other...... 238.6 preferred stocks..................... (16.310,966) (7.657) 469.8 247.3 207.0 LOSS BEFORE INCOME TAX BENEFIT AND EXTRAORDINARY ITEMS........................................ -- Net income (252.5loss) available to common -------- -------- -------- shareholders......................... Net income (90.9loss) (68.6) INCOME TAX BENEFIT............................................ (16.6) (37.4) (25.3) LOSS BEFORE EXTRAORDINARY ITEMS............................... (235.9) (53.5) (43.3) EXTRAORDINARY ITEMS........................................... (2.8) (0.6) NET LOSS...................................................... (238.7) (53.5) (43.9) ACCUMULATED DEFICIT Beginning of year.......................................... (2,127.1) (1,914.3) (1,827.6) Retirement of per common stock................................. (17.7) (133.3) (20.4) Cash dividends, $.0933 per share per year.................. (32.4) (26.0) (22.4) End of year................................................ ($2,415.9)========= ($2,127.1)========= ($1,914.3)========= - 88 - COMCAST CORPORATION AND SUBSIDIARIES SCHEDULE I -- CONDENSED FINANCIAL INFORMATION OF REGISTRANT UNCONSOLIDATED (PARENT ONLY) (In millions) 1997 Year Ended December 31, 1996 1995 ERATING ACTIVITIES Net loss................................................... ($238.7) ($53.5) ($43.9) Adjustments to reconcile net loss to net cash provided by operating activitiesshare: Depreciation and amortization............................ 7.0 8.9 6.5 Non-cash interest expense, net........................... 106.8 136.2 105.5 Equity in net losses (income) of affiliates.............. 275.2 (15.2) (2.7) Extraordinary items...................................... 2.8 0.6 Deferred income taxes and other.......................... 88.9 68.4 41.1 242.0 144.8 107.1 Increase in other current assets......................... (Decrease) increase in accrued interest and other current liabilities.............................. (0.2) (79.9) (1.5) 42.8 (1.2) 36.7 Net cash provided by operating activities............ 161.9 186.1 142.6 OP FINANCING ACTIVITIES Proceeds from borrowings................................... 800.9 Retirement and repayment of debt .......................... (59.5) (300.9) Issuance of preferred stock................................ 500.0 Issuances (repurchases) of common stock, net............... 470.2 (175.9) (7.1) Dividends.................................................. (34.0) (26.8) (22.4) Other...................................................... 12.7 43.0 52.5 Net cash provided by (used in) financing activities.. 889.4 (159.7) 523.0 INVESTING ACTIVITIES Net transactions with affiliates........................... (1,026.4) 9.5 (641.7) Capital expenditures....................................... (18.6) (20.8) (11.9) Other...................................................... (3.2) (13.0) (15.7) Net cash used in investing activities................ (1,048.2) (24.3) (669.3) INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS........................................... 3.1 2.1 (3.7) CASH AND CASH EQUIVALENTS, beginning of year.................. 9.7 7.6 11.3 CASH AND CASH EQUIVALENTS, end of year........................ $12.8 $9.7 $7.6 $ 2,186 ======== $ (3,621) ======== $ 11,516 ======== - 89 - COMCAST (notes 2 & 16) Basic................................. Diluted............................... Weighted average number of common shares $ .58 ======== $ .55 ======== (1.49) ======== (1.49) ======== .13 ======== .12 ======== and common share equivalents outstanding: Basic................................. 3,767 9,342 9,348 Diluted............................... 3,975 9,342 9,772 TUESDAY MORNING CORPORATION AND SUBSIDIARIES SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS YEARS ENDED DECEMBER CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY Years ended December 31, 1998, 1997, and 1996 AND 1995 (In millionsthousands) Junior Perpetual Preferred Common Stock Additional Stock Retained Treasury Stock Total --------------- Paid-In ------------- Earnings -------------- Shareholders' Shares Amount Capital Shares Amount (Deficit) Shares Amount Equity ------ ---------- ------ ------ --------- ------ ------- ------------- Balance at Beginning Effect of QVC Additions Charged to Costs and Deductions from December 31, 1995................... 12,216 $ 122 $18,236 Net income.............. -- -- -- Shares exercised in connection with Employee Stock Option 382 -- -- -- -- -- 383 (19) -- -- -- -- -- (19) ------- --- ------ --------- ---- ------- --------- 18,599 -- -- 58,834 (412) (2,028) 75,528 -- -- -- (3,564) -- -- (3,564) Plan................... 56 1 Treasury shares sold in connection with Stock Purchase Plan.......... -- -- (412) $(2,028) $ 63,648 -- $ -- $ 47,318 -- -- 11,516 -- -- 11,516 Balance at End of Year Acquisition Expenses Reserves(A) of Year 1997..................................... $97.1 $ $65.4 $47.5 $115.0 December 31, ------- ----- 1996..................................... 81.3 65.1 49.3 97.1 1995..................................... 11.3 57.8 51.4 39.2 81.3 Allowance for Obsolete Electronic Retailing Inventories 1997..................................... $34.7 $ $37.0 $27.2 $44.5 1996..................................... 28.5 29.7 23.5 34.7 1995..................................... 18.4 28.4 18.3 28.5 Allowance for Doubtful Accounts <FN>................... 12,272 123 Net loss................ -- -- 77 1 519 -- -- -- -- -- 520 86 1 416 -- -- -- -- -- 417