Cut Hits Time Warner

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New York -- After a prominent media analyst downgraded Time
Warner Inc. last Monday, the company issued a statement saying that it expects to deliver
cash-flow growth of 13 percent to 15 percent this year.

Chairman Gerald Levin said in a prepared statement that
budgets were still being prepared for 2000, but "we remain confident with respect to
the solid short-term and long-term outlook for our company."

Merrill Lynch & Co. analyst Jessica Reif Cohen,
according to reports, cut the intermediate stock rating to "accumulate" from
"buy," citing tough comparisons early next year with strong financial
performance this year. Longer-term, Merrill still rates the stock a "buy."

A report said Merrill maintains a cash-flow-growth
projection for 2000 of 13 percent to 15 percent, but that growth rate will be challenged
in the first half of the year because of the high growth rates Time Warner hit in the
first half of 1999.

If Time Warner Entertainment is restructured, that could be
a near-term positive for the stock, Merrill said. Efforts to restructure that cable-system
and programming partnership between Time Warner and MediaOne Group Inc. failed in the
past, but this could change given the fact that AT&T Corp. is buying MediaOne.

As of late last Monday, Time Warner's share price was
$62.06, down $4.75, or 7 percent.

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