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Time Warner Inc. gave investors an early taste of how it anticipates the rest of the year to play out for the media conglom, saying it expects to increase its cash flow at double-digit rates this year due in part from its music, film and TV production arms.

The media conglom highlighted its revenue growth, cost-cutting and plans to limit capital spending Monday at the 29th annual Bank of America Securities investors conference in San Francisco.

Time Warner senior veep Joan Sumner said the company is currently growing cash flow at mid-teen percentages compared with last year.

Sumner said Warner Bros. will move increasingly toward co-financing its productions with other studios, though it intends to retain all international rights.

The studio expects to co-finance about 15 productions this year while fully financing about nine.

Music is “experiencing softness,” Sumner said, but the company’s other segments offset the problem.

Strength training

The projections reflect Time Warner’s attempt to strengthen its financial position by paying down debt and buying back shares even as it upgraded its cable-TV systems with digital technology and new features, including high-speed Internet access, which Time Warner has targeted as an important source of future growth.

Time Warner has cut operating costs this year by $800 million compared with 1996. Savings should rise to about $1 billion in 2000, Sumner said.

“Capital expenditures will be flat through 2000 and declining thereafter,” Sumner said.

Sumner said the company’s cable networks, which include HBO and CNN, should grow cash flow by 20% year-over-year and that the entertainment segment should grow cash flow by double-digit percentages.

The company’s cable systems, which are the largest in the U.S. with about 12.9 million subscribers, should increase cash flow by 10% year-over-year. Nearly 85% of these cable systems will be digital-ready by the end of this year.

RoadRunner, the company’s cable-based high-speed Internet access service, should have 500,000 customers by the end of this year.

Publishing cash flow should grow 12% to 14%.

Time Warner defines cash flow as earnings before interest, taxes and amortization. Cash flow is often used by analysts and investors to measure the performance of indebted companies, because it excludes interest payments and focuses on the underlying operations.

Time Warner had $17.5 billion in long-term debt as of March 31.

Shares of Time Warner rose $1.75 on the projections to close at $60.88, a gain of 3%.