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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



---



Form 10-Q



xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2003

OR

 ̈TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 000-23747



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GETTY IMAGES, INC.



(Exact name of registrant as specified in its charter)



|DELAWARE                 |  | 98-0177556                          
|------------------------ |  | ------------------------------------
|(State of Incorporation) |  | (I.R.S. Employer Identification No.)



601 N. 34TH
STREET

SEATTLE, WASHINGTON 98103

(206) 925-5000

(Address, including zip code, and telephone number,

including area code, of principal executive offices)



---



Indicate by check mark whether the
registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding twelve months (or for such shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past ninety days. Yes xNo  ̈



Indicate by check mark whether the registrant is an accelerated filer (as defined in
Rule 12b-2 of the Exchange Act). Yes xNo  ̈



As of April 30, 2003 there were 54,433,240 shares of the registrants common
stock, par value $0.01 per share, outstanding.



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| |  |  |  | GETTY IMAGES, INC. |  |  |  | Q1  2003 |  |  |  | FORM 10-Q |  |  |  |  |  | 
| |  |  |  | ------------------ |  |  |  | -------- |  |  |  | --------- |  |  |  |  |  | 





TABLE OF CONTENTS



|                                 |  |                                                                                                                                |  | PAGE
|-------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------ |  | ----
|                                
|PART I.    FINANCIAL INFORMATION |  |                                                                                                                               
|                                
|ITEM 1.                          |  | Financial Statements (unaudited):                                                                                              |  |     
|                                
|                                 |  | Condensed Consolidated Statements of Incomefor the three months ended March 31, 2003 and 2002                                 |  | 1   
|                                
|                                 |  | Condensed Consolidated Balance Sheetsas of March 31, 2003 and December 31, 2002                                               |  | 2   
|                                
|                                 |  | Condensed Consolidated Statement of Stockholders Equityas of December 31, 2002 and for the three months ended March 31, 2003 |  | 3   
|                                
|                                 |  | Condensed Consolidated Statements of Cash Flowsfor the three months ended March 31, 2003 and 2002                             |  | 4   
|                                
|                                 |  | Notes to Condensed Consolidated Financial Statements                                                                           |  | 5   
|                                
|ITEM 2.                          |  | Managements Discussion and Analysis of Financial Condition and Results of Operations (MD&A)                                   |  | 10  
|                                
|ITEM 3.                          |  | Quantitative and Qualitative Disclosures about Market Risk                                                                     |  | 18  
|                                
|ITEM 4.                          |  | Controls and Procedures                                                                                                        |  | 19  
|                                
|PART II.    OTHER INFORMATION    |  |                                                                                                                               
|                                
|ITEM 1.                          |  | Legal Proceedings                                                                                                              |  | 20  
|                                
|ITEM 2.                          |  | Changes in Securities and Use of Proceeds                                                                                      |  | 20  
|                                
|ITEM 3.                          |  | Defaults Upon Senior Securities                                                                                                |  | 20  
|                                
|ITEM 4.                          |  | Submission of Matters to a Vote of Security Holders                                                                            |  | 20  
|                                
|ITEM 5.                          |  | Other Information                                                                                                              |  | 20  
|                                
|ITEM 6.                          |  | Exhibits and Reports on Form 8-K                                                                                               |  | 20  
|                                
|SIGNATURE                        |  | 21                                                                                                                            
|                                
|CERTIFICATIONS                   |  | 22                                                                                                                            
|                                
|EXHIBIT INDEX                    |  | 24                                                                                                                            



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|1 |  |  |  | GETTY IMAGES, INC. |  |  |  | Q1  2003 |  |  |  | FORM 10-Q |  | PART I |  |  |  | ITEM 1
|- |  |  |  | ------------------ |  |  |  | -------- |  |  |  | --------- |  | ------ |  |  |  | ------



PART I. FINANCIAL INFORMATION



ITEM 1. FINANCIAL STATEMENTS



CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(unaudited)



|                                                    |  |      |         |   |      |  
|--------------------------------------------------- |  | ---- | ------- | - | ---- | -
|THREE MONTHS ENDED MARCH 31,                        |  | 2003 |         |   | 2002 |  
|                                                    |  |      |         |   |      |  
|(In thousands, except per share amounts)            |  |      |         |   |      |  
|                                                   
|Sales                                               |  | $    | 130,317 |   |      | $
|Cost of sales                                       |  |      | 37,315  |   |      |  
|                                                    |  |      |         |   |      |  
|Gross profit                                        |  |      | 93,002  |   |      |  
|                                                    |  |      |         |   |      |  
|Selling, general and administrative expenses        |  |      | 53,365  |   |      |  
|Depreciation                                        |  |      | 14,934  |   |      |  
|Amortization                                        |  |      | 934     |   |      |  
|(Gain) loss on disposition of assets and a business |  |      | (160    | ) |      |  
|                                                    |  |      |         |   |      |  
|Operating expenses                                  |  |      | 69,073  |   |      |  
|                                                    |  |      |         |   |      |  
|Income from operations                              |  |      | 23,929  |   |      |  
|Interest expense                                    |  |      | (3,758  | ) |      |  
|Interest income                                     |  |      | 602     |   |      |  
|Exchange gains (losses), net                        |  |      | 915     |   |      |  
|Other income (expense), net                         |  |      | 5       |   |      |  
|                                                    |  |      |         |   |      |  
|Income before income taxes                          |  |      | 21,693  |   |      |  
|Income tax expense                                  |  |      | (8,463  | ) |      |  
|                                                    |  |      |         |   |      |  
|Net income                                          |  | $    | 13,230  |   |      | $
|                                                    |  |      |         |   |      |  
|                                                   
|Earnings per share                                  |  |      |         |   |      |  
|Basic                                               |  | $    | 0.25    |   |      | $
|Diluted                                             |  |      | 0.23    |   |      |  
|                                                    |  |      |         |   |      |  
|                                                   
|Shares used in computing earnings per share         |  |      |         |   |      |  
|Basic                                               |  |      | 53,989  |   |      |  
|Diluted                                             |  |      | 56,782  |   |      |  
|                                                   



The accompanying notes are an
integral part of these Condensed Consolidated Financial Statements.



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|2 |  |  |  | GETTY IMAGES, INC. |  |  |  | Q1  2003 |  |  |  | FORM 10-Q |  | PART I |  |  |  | ITEM 1
|- |  |  |  | ------------------ |  |  |  | -------- |  |  |  | --------- |  | ------ |  |  |  | ------



CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)



|                                           |  |                |           |   |                   |  
|------------------------------------------ |  | -------------- | --------- | - | ----------------- | -
|                                           |  | MARCH 31, 2003 |           |   | DECEMBER 31, 2002 |  
|                                           |  |                |           |   |                   |  
|(In thousands)                             |  |                |           |   |                   |  
|                                          
|ASSETS                                     |  |                |           |   |                   |  
|Current assets                             |  |                |           |   |                   |  
|Cash and cash equivalents                  |  | $              | 78,336    |   |                   | $
|Short-term investments                     |  |                | 55,288    |   |                   |  
|Accounts receivable, net                   |  |                | 79,132    |   |                   |  
|Inventories                                |  |                | 1,221     |   |                   |  
|Prepaid expenses                           |  |                | 8,301     |   |                   |  
|Deferred income taxes, net                 |  |                | 11,144    |   |                   |  
|Other current assets                       |  |                | 4,059     |   |                   |  
|                                           |  |                |           |   |                   |  
|Total current assets                       |  |                | 237,481   |   |                   |  
|Property and equipment, net                |  |                | 133,806   |   |                   |  
|Goodwill                                   |  |                | 606,994   |   |                   |  
|Identifiable intangible assets, net        |  |                | 17,729    |   |                   |  
|Deferred income taxes, net                 |  |                | 38,142    |   |                   |  
|Other long-term assets                     |  |                | 4,554     |   |                   |  
|                                           |  |                |           |   |                   |  
|Total assets                               |  | $              | 1,038,706 |   |                   | $
|                                           |  |                |          
|                                          
|LIABILITIES AND STOCKHOLDERS EQUITY       |  |                |           |   |                   |  
|Current liabilities                        |  |                |           |   |                   |  
|Accounts payable                           |  | $              | 59,575    |   |                   | $
|Accrued expenses                           |  |                | 37,973    |   |                   |  
|Income taxes payable                       |  |                | 7,549     |   |                   |  
|                                           |  |                |           |   |                   |  
|Total current liabilities                  |  |                | 105,097   |   |                   |  
|Long-term debt                             |  |                | 245,065   |   |                   |  
|Other long-term liabilities                |  |                | 2,208     |   |                   |  
|                                           |  |                |           |   |                   |  
|Total liabilities                          |  |                | 352,370   |   |                   |  
|                                           |  |                |           |   |                   |  
|Commitments and contingencies (Note 3)     |  |                |           |   |                   |  
|Stockholders equity                       |  |                |           |   |                   |  
|Common stock                               |  |                | 542       |   |                   |  
|Additional paid-in capital                 |  |                | 1,011,906 |   |                   |  
|Deferred compensation                      |  |                | (791      | ) |                   |  
|Accumulated deficit                        |  |                | (326,040  | ) |                   |  
|Accumulated other comprehensive income     |  |                | 719       |   |                   |  
|                                           |  |                |           |   |                   |  
|Total stockholders equity                 |  |                | 686,336   |   |                   |  
|                                           |  |                |           |   |                   |  
|Total liabilities and stockholders equity |  | $              | 1,038,706 |   |                   | $
|                                          



The accompanying notes are an
integral part of these Condensed Consolidated Financial Statements.



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|3 |  |  |  | GETTY IMAGES, INC. |  |  |  | Q1  2003 |  |  |  | FORM 10-Q |  | PART I |  |  |  | ITEM 1
|- |  |  |  | ------------------ |  |  |  | -------- |  |  |  | --------- |  | ------ |  |  |  | ------



CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY

(unaudited)



|                                               |  | No. of Shares of Common Stock $0.01 Par Value |  | No. of Shares of Exchangeable Preferred Stock Without Par Value |   |  | Common Stock |     | Additional Paid-In Capital |   | Deferred Compensation |  |   | Accumulated Deficit |   |  | Accumulated Other Comprehensive Income |          |   | Total |  
|---------------------------------------------- |  | --------------------------------------------- |  | --------------------------------------------------------------- | - |  | ------------ | --- | -------------------------- | - | --------------------- |  | - | ------------------- | - |  | -------------------------------------- | -------- | - | ----- | -
|                                               |  |                                               |  |                                                                 |   |  |              |     |                            |   |                       |  |   |                     |   |  |                                        |          |   |       |  
|(In thousands)                                 |  |                                               |  |                                                                 |   |  |              |     |                            |   |                       |  |   |                     |   |  |                                        |          |   |       |  
|                                              
|Balance at December 31, 2002                   |  | 53,887                                        |  | 35                                                              |   |  | $            | 539 |                            | $ | 1,007,015             |  | $ | (906                | ) |  | $                                      | (339,270 | ) |       | $
|Comprehensive income                           |  |                                               |  |                                                                 |   |  |              |     |                            |   |                       |  |   |                     |   |  |                                        |          |   |       |  
|Net income                                     |  |                                              |  |                                                                |   |  |              |    |                            |   |                      |  |   |                    |   |  |                                        | 13,230   |   |       |  
|Translation adjustments                        |  |                                              |  |                                                                |   |  |              |    |                            |   |                      |  |   |                    |   |  |                                        |         |   |       |  
|Unrealized loss on short-term investments, net |  |                                              |  |                                                                |   |  |              |    |                            |   |                      |  |   |                    |   |  |                                        |         |   |       |  
|Deferred taxes on net unrealized loss          |  |                                              |  |                                                                |   |  |              |    |                            |   |                      |  |   |                    |   |  |                                        |         |   |       |  
|                                               |  |                                               |  |                                                                 |   |  |              |     |                            |   |                       |  |   |                     |   |  |                                        |          |   |       |  
|Total comprehensive income                     |  |                                              |  |                                                                |   |  |              |    |                            |   |                      |  |   |                    |   |  |                                        |         |   |       |  
|                                               |  |                                               |  |                                                                 |   |  |              |     |                            |   |                       |  |   |                     |   |  |                                        |          |   |       |  
|Amortization of deferred compensation          |  |                                              |  |                                                                |   |  |              |    |                            |   |                      |  |   | 115                 |   |  |                                        |         |   |       |  
|Exchange of shares                             |  | 5                                             |  | (5                                                              | ) |  |              |    |                            |   |                      |  |   |                    |   |  |                                        |         |   |       |  
|Stock options exercised                        |  | 277                                           |  |                                                                |   |  |              | 3   |                            |   | 4,891                 |  |   |                    |   |  |                                        |         |   |       |  
|                                               |  |                                               |  |                                                                 |   |  |              |     |                            |   |                       |  |   |                     |   |  |                                        |          |   |       |  
|Balance at March 31, 2003                      |  | 54,169                                        |  | 30                                                              |   |  | $            | 542 |                            | $ | 1,011,906             |  | $ | (791                | ) |  | $                                      | (326,040 | ) |       | $
|                                              



The accompanying notes are an
integral part of these Condensed Consolidated Financial Statements.



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|4 |  |  |  | GETTY IMAGES, INC. |  |  |  | Q1  2003 |  |  |  | FORM 10-Q |  | PART I |  |  |  | ITEM 1
|- |  |  |  | ------------------ |  |  |  | -------- |  |  |  | --------- |  | ------ |  |  |  | ------



CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)



|THREE MONTHS ENDED MARCH 31,                                                      |  | 2003 |         |   | 2002 |  
|--------------------------------------------------------------------------------- |  | ---- | ------- | - | ---- | -
|                                                                                  |  |      |         |   |      |  
|(In thousands)                                                                    |  |      |         |   |      |  
|                                                                                 
|Cash flows from operating activities                                              |  |      |         |   |      |  
|Net income                                                                        |  | $    | 13,230  |   |      | $
|Adjustments to reconcile net income to net cash provided by operating activities: |  |      |         |   |      |  
|Depreciation                                                                      |  |      | 14,934  |   |      |  
|Amortization                                                                      |  |      | 934     |   |      |  
|Deferred income taxes                                                             |  |      | 6,924   |   |      |  
|Bad debt expense                                                                  |  |      | 1,315   |   |      |  
|Amortization of debt issuance costs                                               |  |      | 313     |   |      |  
|Other items                                                                       |  |      | (34     | ) |      |  
|Changes in assets and liabilities, net of effects of business acquisitions:       |  |      |         |   |      |  
|Accounts receivable                                                               |  |      | (6,724  | ) |      |  
|Accounts payable                                                                  |  |      | 1,467   |   |      |  
|Accrued expenses                                                                  |  |      | (8,941  | ) |      |  
|Income taxes                                                                      |  |      | (723    | ) |      |  
|Other                                                                             |  |      | (733    | ) |      |  
|                                                                                  |  |      |         |   |      |  
|Net cash provided by operating activities                                         |  |      | 21,962  |   |      |  
|                                                                                  |  |      |         |   |      |  
|Cash flows from investing activities                                              |  |      |         |   |      |  
|Acquisition of available-for-sale investments                                     |  |      | (14,664 | ) |      |  
|Acquisition of property and equipment                                             |  |      | (8,194  | ) |      |  
|Acquisition of a business, net of cash acquired                                   |  |      | (2,383  | ) |      |  
|Proceeds from disposition of assets                                               |  |      | 300     |   |      |  
|                                                                                  |  |      |         |   |      |  
|Net cash used in investing activities                                             |  |      | (24,941 | ) |      |  
|                                                                                  |  |      |         |   |      |  
|Cash flows from financing activities                                              |  |      |         |   |      |  
|Proceeds from issuance of common stock                                            |  |      | 4,894   |   |      |  
|Repayment of debt                                                                 |  |      |        |   |      |  
|                                                                                  |  |      |         |   |      |  
|Net cash provided by financing activities                                         |  |      | 4,894   |   |      |  
|                                                                                  |  |      |         |   |      |  
|Effects of exchange rate differences                                              |  |      | 316     |   |      |  
|                                                                                  |  |      |         |   |      |  
|Net increase in cash and cash equivalents                                         |  |      | 2,231   |   |      |  
|Cash and cash equivalents, beginning of period                                    |  |      | 76,105  |   |      |  
|                                                                                  |  |      |         |   |      |  
|Cash and cash equivalents, end of period                                          |  | $    | 78,336  |   |      | $
|                                                                                 



The accompanying notes are an
integral part of these Condensed Consolidated Financial Statements.



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|5 |  |  |  | GETTY IMAGES, INC. |  |  |  | Q1  2003 |  |  |  | FORM 10-Q |  | PART I |  |  |  | ITEM 1
|- |  |  |  | ------------------ |  |  |  | -------- |  |  |  | --------- |  | ------ |  |  |  | ------



NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)



NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES



Estimates and Assumptions

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (U.S.) requires management to
make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the Condensed Consolidated Financial Statements and revenues and expenses reported during
the period. Some of the estimates and assumptions that require managements most difficult judgments include: a) the appropriateness of the valuation and useful lives, if applicable, of long-lived assets, including goodwill and identifiable
intangible assets, b) determining the appropriate level of deferred tax asset valuation allowances, c) the designation of certain intercompany balances with foreign subsidiaries as long-term investments and d) the sufficiency of the allowance for
doubtful accounts. These judgments are difficult as matters that are inherently uncertain directly impact their valuation and accounting. Actual results may vary from managements estimates and assumptions.



Reclassifications

Certain prior year amounts have been reclassified to conform to the current years presentation with no effect on previously reported: net assets; net cash flows from operating, investing or financing
activities; or net income.



Principles of Consolidation

The Condensed Consolidated Financial Statements and notes thereto include the accounts of Getty Images, Inc. and its subsidiaries, from the
respective dates of acquisition. Significant intercompany balances and transactions have been eliminated.



Quarterly Results

Certain information and footnote disclosures normally included in annual financial
statements, prepared in accordance with accounting principles generally accepted in the U.S., have been condensed or omitted in accordance with the rules and regulations of the Securities and Exchange Commission. Management believes that the
Condensed Consolidated Financial Statements include all adjustments, which are of a normal and recurring nature, necessary to a fair statement of the results of operations, financial position and cash flows for the interim periods presented. The
condensed information should be read in conjunction with the Consolidated Financial Statements and notes thereto included in our latest Annual Report on Form 10-K.



Foreign Currency Translation and Revaluation of Long-Term Intercompany Balances

Foreign exchange losses of $0.6 million and $3.6 million for the three months ended March 31, 2003 and 2002, respectively, arose from the revaluation of foreign
currency denominated intercompany balances that are of a long-term investment nature, for which settlement is not planned or anticipated in the foreseeable future. These unrealized foreign exchange losses are reported and accumulated in other
comprehensive income in the Condensed Consolidated Balance Sheets in the same manner as translation adjustments. Total accumulated translation adjustments, including amounts arising from the revaluation of long-term intercompany balances, were $0.7
million and $0.5 million at March 31, 2003 and December 31, 2002, respectively.



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|6 |  |  |  | GETTY IMAGES, INC. |  |  |  | Q1  2003 |  |  |  | FORM 10-Q |  | PART I |  |  |  | ITEM 1
|- |  |  |  | ------------------ |  |  |  | -------- |  |  |  | --------- |  | ------ |  |  |  | ------





Earnings Per Share

Basic earnings per share are calculated based upon the weighted average number of common shares outstanding during each period. Diluted earnings per share are
calculated based on the shares used to calculate basic earnings per share plus the effect of dilutive stock options and restricted stock awards.



|THREE MONTHS ENDED MARCH 31,                                               |  | 2003 |        | 2002
|-------------------------------------------------------------------------- |  | ---- | ------ | ----
|                                                                           |  |      |        |     
|(In thousands, except per share amounts)                                   |  |      |        |     
|                                                                          
|Basic Earnings Per Share                                                   |  |      |        |     
|Income available to common stockholders (numerator)                        |  | $    | 13,230 |     
|Weighted average common shares outstanding (denominator)                   |  |      | 53,989 |     
|Basic earnings per share                                                   |  | $    | 0.25   |     
|                                                                          
|Diluted Earnings Per Share                                                 |  |      |        |     
|Income available to common stockholders (numerator)                        |  | $    | 13,230 |     
|                                                                           |  |      |        |     
|Weighted average common shares outstanding                                 |  |      | 53,989 |     
|Effect of dilutive securities                                              |  |      |        |     
|Stock options                                                              |  |      | 2,791  |     
|Restricted stock                                                           |  |      | 2      |     
|                                                                           |  |      |        |     
|Total weighted average common shares and dilutive securities (denominator) |  |      | 56,782 |     
|                                                                           |  |      |        |     
|Diluted earnings per share                                                 |  | $    | 0.23   |     
|                                                                          



Approximately 2.2 million and 3.9
million other common shares potentially issuable from stock options for the three months ended March 31, 2003 and 2002, respectively, are excluded from the computation of diluted earnings per share because they are anti-dilutive. Also excluded
because they are anti-dilutive are 4.1 million common shares in 2003 and 4.5 million common shares in 2002 potentially issuable from convertible subordinated notes.



Short-Term Investments

|                                         |  | MARCH 31, 2003 |        | DECEMBER 31, 2002
|---------------------------------------- |  | -------------- | ------ | -----------------
|                                         |  |                |        |                  
|(In thousands)                           |  |                |        |                  
|                                        
|Available-for-sale debt securities       |  | $              | 34,541 |                  
|Held-to-maturity corporate bonds         |  |                | 16,849 |                  
|Held-to-maturity certificates of deposit |  |                | 3,898  |                  
|                                         |  |                |        |                  
|Total short-term investments             |  | $              | 55,288 |                  
|                                        



Available-for-sale securities are
carried at market value with associated unrealized holding gains and losses recorded in other comprehensive income, while held-to-maturity securities are carried at amortized cost. All held-to-maturity securities mature in 2003, while
available-for-sale securities mature between 2003 and 2007. Available-for-sale securities with contractual maturities beyond one year are classified as current because they represent the investment of cash that is available for current operations.
Unamortized bond premium at March 31, 2003 and December 31, 2002 was nominal.



Accounts Receivable

Accounts receivable represent trade receivables, net of allowances for doubtful accounts of $12.8 million
and $12.6 million at March 31, 2003 and December 31, 2002, respectively. The provisions recorded during the three months ended March 31, 2003 and 2002 were $1.3 million in each period. Approximately 14% of the companys recorded investment in
trade receivables, net of allowances for doubtful accounts, was past due 90 days or more as of March 31, 2003 and December 31, 2002.



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|7 |  |  |  | GETTY IMAGES, INC. |  |  |  | Q1  2003 |  |  |  | FORM 10-Q |  | PART I |  |  |  | ITEM 1
|- |  |  |  | ------------------ |  |  |  | -------- |  |  |  | --------- |  | ------ |  |  |  | ------





Property and Equipment

Property and equipment is stated at cost, net of accumulated depreciation of approximately $252.2 million and $237.1 million at March 31, 2003 and
December 31, 2002, respectively.



Goodwill

Goodwill is the excess of the purchase price (including liabilities assumed and direct costs) over the fair value of tangible and identifiable intangible assets
acquired in purchase business combinations. As of January 1, 2002, goodwill is no longer amortized but is reviewed for impairment annually on August 31 and between annual periods in certain circumstances.



Goodwill changed during the period as follows:



|                                       |  |   |        
|-------------------------------------- |  | - | -------
|                                       |  |   |        
|(In thousands)                         |  |  
|                                      
|Goodwill at December 31, 2002          |  | $ | 603,011
|Acquisition of a business (see Note 7) |  |   | 3,938  
|Effect of translation adjustments      |  |   | 45     
|                                       |  |   |        
|Goodwill at March 31, 2003             |  | $ | 606,994
|                                      



Identifiable Intangible Assets

Identifiable intangible assets are assets that do not have physical representation, but that arise from contractual or other legal rights or are
capable of being separated or divided from the company and sold, transferred, licensed, rented or exchanged. Identifiable intangible assets are amortized on a straight-line basis over their estimated useful lives, ranging from two to 10 years. The
gross carrying amounts and related accumulated amortization of identifiable intangible assets at the reported balance sheet dates were as follows:



|                                      |  | MARCH 31, 2003 |        | DECEMBER 31, 2002       
|------------------------------------- |  | -------------- | ------ | ------------------------
|                                      |  |                |        |                         
|                                      |  | Gross Amount   |        | Accumulated Amortization
|                                      |  |                |        |                         
|(In thousands)                        |  |                |        |                         
|                                     
|Customer lists                        |  | $              | 14,935 |                         
|Trademarks, tradenames and copyrights |  |                | 11,368 |                         
|Other identifiable intangible assets  |  |                | 1,983  |                         
|                                      |  |                |        |                         
|Totals                                |  | $              | 28,286 |                         
|                                     



Amortization of identifiable
intangible assets was $0.9 million and $1.4 million for the three months ended March 31, 2003 and 2002, respectively. Based on balances at March 31, 2003, expected amortization of identifiable intangible assets for the next five years is as follows:



|FISCAL YEAR    |  |  
|-------------- |  | -
|               |  |  
|(In thousands) |  |  
|              
|2003           |  | $
|2004           |  |  
|2005           |  |  
|2006           |  |  
|2007           |  |  
|              



We are required to reassess the
remaining useful lives of our identifiable intangible assets each reporting period to determine whether events and circumstances warrant revisions to the remaining periods of amortization. No revisions were determined to be necessary during the
periods presented. Any future revisions would be applied prospectively.



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Stock-Based Compensation

We apply the intrinsic value provisions of Accounting Principles Board (APB) Opinion No. 25, Accounting for Stock Issued to Employees
and related interpretations in accounting for stock-based compensation. Accordingly, we do not recognize compensation expense when granting employee stock options, as we do not grant options below the market price of our common stock on the date of
the grant. The only compensation expense we recognize in relation to stock options is upon infrequent modification of the terms of outstanding options. There were no modifications that resulted in compensation expense during the periods presented.



Statement of Financial Accounting Standards (SFAS) No. 123,
Accounting for Stock-Based Compensation, requires the disclosure of pro forma information as if we had adopted the fair-value method of accounting for stock-based compensation. Under this method, compensation cost is measured on all
awards based on the fair value of the awards at the grant date. The pro forma effect on our net income (loss) and earnings (loss) per share of applying SFAS No. 123 would have been as follows:



|THREE MONTHS ENDED MARCH 31,                                       |  | 2003 |        |   | 2002 |  
|------------------------------------------------------------------ |  | ---- | ------ | - | ---- | -
|                                                                   |  |      |        |   |      |  
|(In thousands, except per share amounts)                           |  |      |        |   |      |  
|                                                                  
|Net income (loss)                                                  |  |      |        |   |      |  
|As reported                                                        |  | $    | 13,230 |   |      | $
|Add: APB No. 25 stock-based compensation, net of income taxes      |  |      |       |   |      |  
|Deduct: SFAS No. 123 stock-based compensation, net of income taxes |  |      | (1,535 | ) |      |  
|                                                                   |  |      |        |   |      |  
|Pro forma                                                          |  | $    | 11,695 |   |      | $
|                                                                   |  |      |        |   |      |  
|Basic earnings (loss) per share                                    |  |      |        |   |      |  
|As reported                                                        |  | $    | 0.25   |   |      | $
|Pro forma                                                          |  |      | 0.22   |   |      |  
|                                                                   |  |      |        |   |      |  
|Diluted earnings (loss) per share                                  |  |      |        |   |      |  
|As reported                                                        |  | $    | 0.23   |   |      | $
|Pro forma                                                          |  |      | 0.21   |   |      |  
|                                                                  



A Black-Scholes multiple option
valuation model was utilized in calculating these figures, with forfeitures recognized as they occur and the following assumptions:



|THREE MONTHS ENDED MARCH 31,           |  | 2003                |  | 2002               
|-------------------------------------- |  | ------------------- |  | -------------------
|                                       |  |                     |  |                    
|                                      
|Expected future share price volatility |  | 71%                 |  | 73%                
|Risk free rate of return               |  | 4.09%               |  | 5.17%              
|Expected life of option                |  | 11/2years from vest |  | 11/2years from vest
|Expected rate of dividends             |  | None                |  | None               
|                                      



Catalogs

As part of our marketing efforts, we produce and distribute catalogs containing images offered through our creative professional, press and editorial collections.
The costs of producing these catalogs through September 30, 2001, were deferred and amortized over the period during which revenue was generated by the catalog images.



In the fourth quarter of 2001, we began the implementation of new financial information systems. These new systems are not capable of
directly associating image revenue with specific catalogs. Accordingly, as required by the American Institute of Certified Public Accountants Statement of Position No. 93-7 Reporting on Advertising Costs, catalog production costs are
expensed upon initial distribution of each catalog effective October 1, 2001. Deferred catalog costs were fully amortized at December 31, 2002.



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Direct catalog production costs and
amortization of any such costs that were deferred, and their impact on our Condensed Consolidated Statements of Income are as follows:



|THREE MONTHS ENDED MARCH 31,           |  | Selling, general and administrative expenses |       | Amortization
|-------------------------------------- |  | -------------------------------------------- | ----- | ------------
|                                       |  |                                              |       |             
|(In thousands)                         |  |                                              |       |             
|                                      
|2003                                   |  |                                              |       |             
|Direct catalog production costs        |  | $                                            | 1,734 |             
|                                       |  |                                              |       |             
|                                      
|2002                                   |  |                                              |       |             
|Direct catalog production costs        |  | $                                            | 1,426 |             
|Amortization of deferred catalog costs |  |                                              |      |             
|                                       |  |                                              |       |             
|                                       |  | $                                            | 1,426 |             
|                                       |  |                                              |       |             



Recent Accounting
Pronouncements

Effective January 1, 2003, we adopted SFAS No. 143, Accounting for Asset Retirement Obligations. This statement
requires that the fair value of a liability for an asset retirement obligation, such as an obligation to return leased property to its original condition, be recognized in the period in which the obligation is incurred if a reasonable estimate of
the fair value of the obligation can be made. We do not have any material asset retirement obligations.



Effective July 1, 2003, we will adopt Emerging Issues Task Force Issue No. 00-21 Revenue Arrangements with Multiple Deliverables effective for all arrangements entered into on or after that date.
Adoption of this pronouncement is not expected to have a material impact on our consolidated financial statements.



NOTE 2. ACCRUED EXPENSES



Accrued expenses at the reported balance sheet dates are summarized below, with balances comprising 5% or more of total current liabilities at either date shown
separately:



|                 |  | MARCH 31, 2003 |        | DECEMBER 31, 2002
|---------------- |  | -------------- | ------ | -----------------
|                 |  |                |        |                  
|(In thousands)   |  |                |        |                  
|                
|Accrued bonuses  |  | $              | 2,452  |                  
|Other            |  |                | 35,521 |                  
|                 |  |                |        |                  
|Accrued expenses |  | $              | 37,973 |                  
|                 |  |                |        |                  



NOTE 3. COMMITMENTS AND
CONTINGENCIES



Following are future minimum payments under operating
leases, receipts under non-cancelable subleases, and payments and receipts under minimum royalty guarantee agreements, all committed at March 31, 2003:



|COMMITMENTS                        |  | 2003 |        |   | 2004 |   |        | 2005 |  |   | 2006   |   |  | 2007 |        |   | THEREAFTER |   | TOTAL  |  
|---------------------------------- |  | ---- | ------ | - | ---- | - | ------ | ---- |  | - | ------ | - |  | ---- | ------ | - | ---------- | - | ------ | -
|                                   |  |      |        |   |      |   |        |      |  |   |        |   |  |      |        |   |            |   |        |  
|(In thousands)                     |  |      |        |   |      |   |        |      |  |   |        |   |  |      |        |   |            |   |        |  
|                                  
|Operating lease payments           |  | $    | 19,944 |   |      | $ | 19,048 |      |  | $ | 18,759 |   |  | $    | 18,566 |   |            | $ | 17,850 |  
|Sublease receipts                  |  |      | (5,680 | ) |      |   | (5,332 | )    |  |   | (5,225 | ) |  |      | (5,230 | ) |            |   | (833   | )
|Minimum royalty guarantee payments |  |      | 5,409  |   |      |   | 6,068  |      |  |   | 5,267  |   |  |      | 2,905  |   |            |   | 325    |  
|Minimum royalty guarantee receipts |  |      | (1,500 | ) |      |   | (2,188 | )    |  |   | (2,250 | ) |  |      | (562   | ) |            |   |       |  
|                                   |  |      |        |   |      |   |        |      |  |   |        |   |  |      |        |   |            |   |        |  
|Net commitments                    |  | $    | 18,173 |   |      | $ | 17,596 |      |  | $ | 16,551 |   |  | $    | 15,679 |   |            | $ | 17,342 |  
|                                  



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NOTE 4. BUSINESS SEGMENTS AND
GEOGRAPHIC AREAS



As a provider of visual content, we operate in one
business segment. Due to the nature of our operations, sales are made to a diverse client base and there is no reliance on a single customer or group of customers. Sales are reported in the geographic area where they originate. The U.S. dollar value
of sales reported below reflects both the sales performance of each country and the impact of the change in each countrys currency relative to the U.S. dollar. Sales to customers by geographic area, with countries experiencing 5% or more of
sales in a reportable period shown separately, are summarized below:



|THREE MONTHS ENDED MARCH 31, |  | 2003 |         | 2002
|---------------------------- |  | ---- | ------- | ----
|                             |  |      |         |     
|(In thousands)               |  |      |         |     
|                            
|United States                |  | $    | 62,076  |     
|United Kingdom               |  |      | 17,179  |     
|Germany                      |  |      | 10,142  |     
|France                       |  |      | 7,710   |     
|Rest of world                |  |      | 33,210  |     
|                             |  |      |         |     
|Total sales                  |  | $    | 130,317 |     
|                            



NOTE 5. LOSS ON DISPOSITION OF
A BUSINESS



During the first quarter of 2002, we entered into an
agreement to dispose of a subsidiary, American Royal Arts (ARA), a provider of animation art, and accrued a loss of $0.8 million. The assets and liabilities of ARA were written off against the accrued loss upon consummation of the transaction on
April 2, 2002. The net assets, results of operations and cash flows of ARA were not significant to the company as a whole for any period presented.



NOTE 6. INCOME TAXES AND NET DEFERRED TAX ASSETS



The effective tax rates used to calculate income tax expense for the first quarter of 2003 and 2002 were 39.0% and 39.8%, respectively. The decrease in the
effective tax rate was primarily due to increased book income compared to permanent differences, principally non-deductible expenses, which did not increase. At March 31, 2003, we had $49.3 million in net deferred tax assets, net of a valuation
allowance of $18.5 million. This is compared to $56.1 million in net deferred tax assets, net of a valuation allowance of $17.5 million at December 31, 2002.



NOTE 7. ACQUISITION



During the first quarter of 2003, we acquired ImageDirect, Inc., an editorial photography agency, for a purchase price (including liabilities assumed) of $4.4 million. The acquisition was accounted for using the
purchase method of accounting and, accordingly, the results of operations since the date of acquisition are included in those of the consolidated company. The portion of the purchase price allocated to goodwill was $3.9 million. This allocation is
preliminary as we are currently in the process of identifying, and determining the fair value of, identifiable intangible assets acquired. This acquisition was not significant to the company as a whole for any period presented.



ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (MD&A)



The Private Securities Litigation Reform Act of 1995 provides a safe harbor for forward-looking statements made by or on behalf of Getty Images, Inc. We may,
from time to time, make written or oral statements that are forward-looking, including statements contained in this Quarterly Report on Form 10-Q, the documents incorporated herein by reference, and other filings with the Securities and
Exchange Commission. These statements are based on managements current expectations, assumptions and projections about Getty Images, Inc. and its industry, and are made on the basis of managements views as of the time the statements are
made. All statements, analyses and other information contained in this report relative to trends in sales, gross margin, anticipated expense levels, and liquidity and capital resources, as well as other statements including, but not limited to,
words such as anticipate, believe, plan, estimate, expect, seek, intend and other similar expressions, constitute forward-looking statements. These forward-looking
statements are not guarantees of future performance and are subject to certain risks



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and uncertainties that are difficult to predict and that could cause our actual results to differ materially from our past performance and our
current expectations, assumptions and projections. Differences may result from actions taken by the company as well as from risks and uncertainties beyond the companys control. Potential risks and uncertainties include, among others, those set
forth herein under Factors That May Affect the Business, as well as in Part II, Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations of our Annual Report on Form 10-K for the year
ended December 31, 2002. Except as required by law, the company undertakes no obligation to update any forward-looking statement, whether as a result of new information, future developments or otherwise. Readers should carefully review the factors
set forth in other reports or documents that the company files from time to time with the Securities and Exchange Commission.



In this Quarterly Report, Getty Images, the company, we, us, and our refer to Getty Images, Inc. and
its consolidated subsidiaries, unless the context otherwise dictates.



GENERAL



Overview

We are a leading provider of high quality, relevant imagery and related services to creative professionals at advertising agencies, graphic design firms,
corporations, and film and broadcasting companies; press and editorial customers involved in newspaper, magazine, book, CD-ROM and online publishing; and corporate communications departments and other business customers.



Revenue

We generate our revenue from licensing rights to use imagery and from providing related services. Revenue is principally derived from a large number of relatively small transactions involving licensing rights to
use single still images, film clips or pre-packaged CD-ROM products containing multiple images. We also generate revenue from subscription or bulk purchase agreements under which customers are provided access to imagery online.



STILL IMAGERY

The majority of the still imagery that the company licenses can be broken down into three portfolios: rights-managed, royalty-free, and editorial. Rights-managed
images are licensed by customers on a use-by-use basis and generally have higher license fees based on the intended use of the image, including type of media, geographical distribution, image size, license duration, circulation and level of rights
protection. Approximately 56% of our sales for the first quarter of 2003 were for rights-managed imagery, with an average net license fee for a single rights-managed image of approximately $545, and an average gross margin of approximately 66%.



Royalty-free images are licensed by customers on a nonexclusive basis and
can be used for multiple projects over an unlimited time period. License fees for pre-packaged royalty-free CD-ROM products are generally the same for each licensee, while license fees for single royalty-free images differ depending on the file size
of the selected image. Approximately 28% of our sales for the first quarter of 2003 were for royalty-free imagery, with an average net license fee for a single royalty-free image of approximately $125, and an average gross margin of approximately
78%.



Editorial imagery is generally not for resale, trade, packaging,
promotion or advertising and is licensed on a single image or subscription basis. Approximately 7% of our sales for the first quarter of 2003 were for editorial imagery. Because many of these images are licensed on a subscription basis, average
license fee is not meaningful. Average gross margin for all editorial images licensed in the first quarter of 2003 was approximately 87%.



MOVING IMAGERY

We also
license moving imagery, or film, which may be rights-managed or royalty-free, with license fees based on the intended use of the imagery, including market, geographic area and duration of use. Approximately 5% of our sales for the first quarter of
2003 were for film, with an average net price for a rights-managed film clip in North America of approximately $580, and an average gross margin for all film licensed of approximately 75%.



Cost of Sales

Our cost of sales primarily consists of commission payments to contributing photographers, cinematographers and third-party image providers (collectively referred to as contributors). These contributors are
under contract with the company and typically receive payments of up to 50% of the sales value, depending on the portfolio (as discussed above), and where the imagery is licensed (licenses outside a contributors home territory result in lower
commissions). We own a significant number of the images in our collections, and these images do not require commission payments.



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Aside from direct licensing to
customers, we license imagery through distributors worldwide. Licenses through distributors comprised approximately 7% of our sales for the first quarter of 2003. Distributors typically earn and retain 35 to 40% of the license fee, and we recognize
the remaining 60 to 65% as revenue. Commissions paid to contributors on distributor sales are generally 50% of the companys share of the license fee (generally 30 to 32.5% of the total license fee). This results in an average gross margin of
approximately 50% on distributor sales.



Critical Accounting Policies
and Estimates and Assumptions

There have been no material changes in our critical accounting policies and estimates and assumptions since December
31, 2002.



MATERIAL CHANGES IN RESULTS OF OPERATIONS



Following is managements discussion of material changes in our
results of operations with respect to the most recent interim period and the corresponding interim period in the prior year. Income from operations and operating margin should not be considered alternatives to net income as indicators of our
operating performance, but should be considered supplemental indicators. All figures in tables are shown in thousands, except percentages.



SALES



|      |  | THREE MONTHS ENDED MARCH 31, |         | YEAR OVER YEAR
|----- |  | ---------------------------- | ------- | --------------
|      |  |                              |         |               
|      |  | 2003                         |         | % of sales    
|      |  |                              |         |               
|     
|Sales |  | $                            | 130,317 |               
|     



Sales increased due mainly to:
the introduction of additional third-party image collections to the gettyimages.com website; pricing discipline, including selective price increases and reduced levels of discounting; and a $7.4 million positive impact of changes in foreign currency
exchange rates on the translation of sales denominated in foreign currencies.



Geographically, sales increased year over year in many countries, particularly the United States of America (U.S.), France, Germany and the United Kingdom (U.K.). Sales increased year over year across multiple image collections,
including previously-introduced and newly-introduced third-party imagery and nearly all rights-managed collections. Sales growth in these collections resulted from the same factors as overall sales growth.



GROSS PROFIT AND GROSS MARGIN



|                        |  | THREE MONTHS ENDED MARCH 31, |        | YEAR OVER YEAR
|----------------------- |  | ---------------------------- | ------ | --------------
|                        |  |                              |        |               
|                        |  | 2003                         |        | % of sales    
|                        |  |                              |        |               
|                       
|Gross profit and margin |  | $                            | 93,002 |               
|                       



Despite an increase in the
companys gross profit year over year, gross margin declined to 71.4% principally due to an increase in licenses of lower margin images, mainly third-party imagery.



AMORTIZATION



|             |  | THREE MONTHS ENDED MARCH 31, |     | YEAR OVER YEAR |    
|------------ |  | ---------------------------- | --- | -------------- | ---
|             |  |                              |     |                |    
|             |  | 2003                         |     | % of sales     |    
|             |  |                              |     |                |    
|            
|Amortization |  | $                            | 934 |                | 0.7
|            



Amortization decreased year over
year mainly due to the cessation of catalog amortization, which was $4.6 million in the first quarter of 2002. Catalog production costs are expensed upon initial distribution of each catalog effective October 1, 2001, and all deferred catalog costs
were fully amortized in 2002.



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INCOME
FROM OPERATIONS



|                       |  | THREE MONTHS ENDED MARCH 31, |        | YEAR OVER YEAR
|---------------------- |  | ---------------------------- | ------ | --------------
|                       |  |                              |        |               
|                       |  | 2003                         |        | % of sales    
|                       |  |                              |        |               
|                      
|Income from operations |  | $                            | 23,929 |               
|                      



Income from operations increased
as a result of higher sales and the cessation of catalog amortization, offset in part by lower gross margin, all of which are discussed above.



INCOME TAXES



|                   |  | THREE MONTHS ENDED MARCH 31, |       | YEAR OVER YEAR     
|------------------ |  | ---------------------------- | ----- | -------------------
|                   |  |                              |       |                    
|                   |  | 2003                         |       | % of pre-tax income
|                   |  |                              |       |                    
|                  
|Income tax expense |  | $                            | 8,463 |                    
|                  



Income tax expense increased over
the prior year due to higher income before taxes, offset in part by a decrease in the companys effective tax rate from 39.8% to 39.0%. The decrease in the effective tax rate was primarily due to increased book income compared to permanent
differences, principally non-deductible expenses, which did not increase.



As of March 31, 2003, we had net deferred tax assets of $49.3 million, net of a valuation allowance of $18.5 million. Although realization is not assured, management believes, based on its current estimates of near-term future
taxable income for the companys U.S. operations and tax-planning strategies, that it is more likely than not that the net deferred tax assets will be realized within a reasonable period of time and substantially prior to the expiration of the
net operating loss carryforwards between 2018 and 2021.



MATERIAL
CHANGES IN FINANCIAL CONDITION



Liquidity

There has been no material change since December 31, 2002 in our sources of liquidity, the factors likely to impact these sources or the adequacy of these sources
to meet our needs. Cash and short-term investments increased 14% during the first quarter of 2003 due to cash flows from operations and proceeds from the issuance of common stock, offset in part by capital expenditures and the acquisition of a
business.



Capital Expenditures, Commitments and Guarantees

There have been no material changes in our capital expenditure plans and guarantees since December 31, 2002.



The following table illustrates payments and receipts associated with significant
contractual obligations and rights, including future minimum payments under operating leases, receipts under non-cancelable subleases, and payments and receipts under minimum royalty guarantee agreements, all committed at March 31, 2003. The table
assumes that the subordinated notes are repaid upon maturity and there are no borrowings under the senior credit facility, which may or may not reflect future events.



|CONTRACTUAL OBLIGATIONS AND RIGHTS      |  | 2003 |        |   | 2004 |   |        | 2005 |  |   | 2006   |   |  | 2007 |        |   | THEREAFTER |   | TOTAL   |  
|--------------------------------------- |  | ---- | ------ | - | ---- | - | ------ | ---- |  | - | ------ | - |  | ---- | ------ | - | ---------- | - | ------- | -
|                                        |  |      |        |   |      |   |        |      |  |   |        |   |  |      |        |   |            |   |         |  
|(In thousands)                          |  |      |        |   |      |   |        |      |  |   |        |   |  |      |        |   |            |   |         |  
|                                       
|Subordinated notes  principal payments |  | $    |       |   |      | $ |       |      |  | $ |       |   |  | $    |       |   |            | $ | 250,000 |  
|Subordinated notes  interest payments  |  |      | 12,500 |   |      |   | 12,500 |      |  |   | 12,500 |   |  |      | 12,500 |   |            |   | 6,250   |  
|Operating lease payments                |  |      | 19,944 |   |      |   | 19,048 |      |  |   | 18,759 |   |  |      | 18,566 |   |            |   | 17,850  |  
|Sublease receipts                       |  |      | (5,680 | ) |      |   | (5,332 | )    |  |   | (5,225 | ) |  |      | (5,230 | ) |            |   | (833    | )
|Minimum royalty guarantee payments      |  |      | 5,409  |   |      |   | 6,068  |      |  |   | 5,267  |   |  |      | 2,905  |   |            |   | 325     |  
|Minimum royalty guarantee receipts      |  |      | (1,500 | ) |      |   | (2,188 | )    |  |   | (2,250 | ) |  |      | (562   | ) |            |   |        |  
|                                        |  |      |        |   |      |   |        |      |  |   |        |   |  |      |        |   |            |   |         |  
|Net obligations                         |  | $    | 30,673 |   |      | $ | 30,096 |      |  | $ | 29,051 |   |  | $    | 28,179 |   |            | $ | 273,592 |  
|                                       



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RECENT ACCOUNTING PRONOUNCEMENTS



Effective January 1, 2003, we adopted Statement of Financial
Accounting Standards No. 143, Accounting for Asset Retirement Obligations. This statement requires that the fair value of a liability for an asset retirement obligation, such as an obligation to return leased property to its original
condition, be recognized in the period in which the obligation is incurred if a reasonable estimate of the fair value of the obligation can be made. We do not have any material asset retirement obligations.



Effective July 1, 2003, we will adopt Emerging Issues Task Force Issue No. 00-21
Revenue Arrangements with Multiple Deliverables effective for all arrangements entered into on or after that date. Adoption of this pronouncement is not expected to have a material impact on our consolidated financial statements.



FACTORS THAT MAY AFFECT THE BUSINESS



WE MAY NOT BE ABLE TO COMPETE EFFECTIVELY AGAINST
EXISTING OR POTENTIAL COMPETITORS

The visual content industry is highly competitive. We compete directly with a number of large and small visual
content companies, news-wire services, and commissioned photographers to provide imagery to businesses. We believe that the principal competitive factors in the visual content industry are: name recognition; company reputation; the quality,
timeliness, relevance and diversity of the creative and editorial images in a companys collections; effective use of developing technology; customer service; pricing; accessibility of imagery; distribution capability and speed of fulfillment.
Some of our existing and potential competitors may have or may develop resources superior to ours, or other such competitive advantages.



OUR QUARTERLY FINANCIAL RESULTS AND STOCK PRICE MAY FLUCTUATE

Our revenues and operating results are expected to vary from quarter to quarter due to a number of factors, both within and outside of our control, including, but not limited to the following:



| |  |  | demand for our existing and new content, products and services, and those of our competitors;
| | - |  | ---------------------------------------------------------------------------------------------

| |  |  | changes in our pricing policies and practices;
| | - |  | ----------------------------------------------

| |  |  | changes in the sales mix of our products and services, including the mix of licensed uses, company owned and licensed imagery, and the geographic distribution of such
licenses;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | our ability to attract customers to our websites and the frequency of repeat licensing by our customers;
| | - |  | --------------------------------------------------------------------------------------------------------

| |  |  | shifts in the nature and amount of publicity about us, our competitors or the visual content industry;
| | - |  | ------------------------------------------------------------------------------------------------------

| |  |  | the effect of fluctuations in foreign exchange rates on the results of our operations;
| | - |  | --------------------------------------------------------------------------------------

| |  |  | costs related to potential acquisitions and development of technology, services, or businesses; and
| | - |  | ---------------------------------------------------------------------------------------------------

| |  |  | changes in U.S. and global capital markets and economies, or in applicable tax laws and regulations.
| | - |  | ----------------------------------------------------------------------------------------------------



Because of these risks and others, it is possible that some future quarterly results
may be below or above the expectations of analysts and investors and our stock price may fluctuate.



THIRD-PARTY IMAGE PROVIDERS ARE IMPORTANT TO OUR BUSINESS

We have entered into commercial agreements with other businesses to host and license their imagery on the gettyimages.com website. These arrangements require resource and personnel commitments by Getty Images,
limiting the number of third-party images we may host or integrate during a given period. Additionally, if there are problems with the relevancy, technical quality, or market and customer acceptance of this third-party imagery, our revenues and
operating results may be adversely affected.



IMPAIRMENT OF THE VALUE OF SIGNIFICANT ASSETS COULD HAVE AN ADVERSE IMPACT ON OUR OPERATING RESULTS

Our operating results and
earnings in future periods may be adversely affected as a result of impairments to the reported value of certain significant assets, the valuation of which requires managements most difficult judgments as a result of the need to make estimates
and assumptions about the effects of matters that are inherently uncertain.



Goodwill and Identifiable Intangible Assets    Goodwill is the excess of the purchase price (including liabilities assumed and direct costs) over the fair value of tangible and identifiable intangible
assets acquired in purchase business combinations. We test goodwill



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for impairment annually on August 31 and between annual tests in certain circumstances. When assessing impairment, the company must estimate the
implied fair value of its goodwill. This fair value is based on a discounted cash flow model that involves significant assumptions and estimates based on managements best judgments of current and future circumstances, including currently
enacted tax laws, future risk free rates of return, and the companys future financial performance. As circumstances change, it is reasonably possible that future goodwill impairment tests could result in a charge to earnings. Any impairment
would be recognized as a loss on impairment of assets, which would be included in the calculation of income from operations. The net balance of goodwill at March 31, 2003 was $607.0 million.



Identifiable intangible assets are assets that do not have physical representation, but
that arise from contractual or other legal rights or are capable of being separated or divided from the company and sold, transferred, licensed, rented or exchanged. For the company, these assets consist mostly of customer lists, covenants not to
compete and trademarks, tradenames and copyrights. Identifiable intangible assets are generally valued based on discounted estimated future cash flows, which are inherently uncertain and therefore require managements most difficult judgments.
Should future cash flows associated with these assets not meet managements current expectations, it is reasonably possible that the company would be required to accelerate the amortization, or write off the impaired portion, of the unamortized
balance of such assets. Identifiable intangible assets are amortized on a straight-line basis over their estimated useful lives (two to 10 years), which are determined in most cases based on contractual or other legal terms. The net balance of
identifiable intangible assets at March 31, 2003 was $17.7 million.



Certain Long-Lived Assets      The useful lives of certain of the companys long-lived assets, including capitalized image content, hardware and software costs (included within property and
equipment in the Condensed Consolidated Balance Sheets), are based on the estimated period over which the assets are expected to provide benefit to the company. Should we determine at some point in the future that the useful lives of these assets
are shorter than previously determined, the company would be required to accelerate the depreciation, or possibly write off the impaired portion, of the undepreciated balance of such assets.



The estimated useful lives of image content, ranging from generally four years for
contemporary content to 40 years for archival content, are determined based on sales history. Historical sales may not be indicative of future sales, and therefore, these estimated lives are inherently uncertain and require managements most
difficult judgments. The balance of capitalized image content costs, net of accumulated depreciation, was $60.1 million at March 31, 2003.



The three-year estimated useful life of hardware and software is determined based on prior experience with related technology and the expected future utility of the
assets to the company. As hardware and software providers future support of todays technology and the future of technology in general are inherently uncertain, these estimated lives require managements most difficult judgments. The
balance of hardware and software, net of accumulated depreciation, was $40.5 million at March 31, 2003.



Deferred Income Taxes    Deferred income taxes, reflecting the impact of temporary differences between financial and tax reporting and of tax loss carryforwards, are based on currently
enacted tax laws. Deferred tax assets are reduced by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. As of March 31, 2003, we
had net deferred tax assets of $49.3 million, net of a valuation allowance of $18.5 million. Although realization is not assured, management believes, based on its current estimates of near-term future taxable income for the companys U.S.
operations and tax-planning strategies, that it is more likely than not that the net deferred tax assets will be realized within a reasonable period of time and substantially prior to the expiration of the net operating loss carryforwards between
2018 and 2021.



In the event that actual results differ from
managements current expectations, the valuation allowance could materially change, directly impacting our Condensed Consolidated Financial Statements. Management will reevaluate the valuation allowance at least annually, most likely early in
the fourth quarter. This timing is appropriate, as it will coincide with completion of our tax filings for the prior year, updating of estimated results of operations for the current year, and preparation of the budget for the following year. If
such evaluation indicates that we are able to utilize more of the deferred tax asset than the net balance, all or a portion of the valuation allowance will be credited to income tax expense or additional paid-in capital in the period that such a
determination is made. If the evaluation indicates that we are unable to utilize all or a portion of the net deferred tax asset balance, a greater valuation allowance will be recorded and charged to income tax expense in the period of that
determination.



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SYSTEMS SECURITY RISKS AND CONCERNS MAY HARM OUR BUSINESS

A significant barrier to e-commerce and online communications is the
secure transmission of confidential information and the transaction of commerce over public networks. Developments in computer capabilities, viruses, or other events could result in compromises or breaches of our systems or those of other websites
and networks, jeopardizing our proprietary and confidential information, or causing potentially serious interruptions in our services, sales or operations. We may be required to expend significant additional resources to protect against the threat
of security breaches or to alleviate problems caused by such breaches. Additionally, any well-publicized compromises of our security system or the Internet may generally reduce our customers desire to transact business over the Internet.



WE MAY EXPERIENCE SYSTEM FAILURES AND
SERVICE INTERRUPTIONS

The digitization and Internet distribution of our visual content is a key component of our business and growth strategy. As
a result, our revenues are dependent on the ability of our customers to access our website. In the past, we have experienced infrequent system interruptions that made our website unavailable or prevented us from efficiently taking or fulfilling
orders. While we continue to make improvements in this area, we cannot guarantee that we can prevent future interruptions. Additionally, we have certain dependencies on third-party software and system providers for the processing and distribution of
our imagery and related products. System failures or interruptions, whether as a result of our internally developed systems or those of the third party providers, may inconvenience our customers, result in negative publicity, reduce the volume of
images we license online and deliver digitally, and damage the attractiveness of our online products and services to our customers.



We have focused significant resources and attention on the installation and development of enterprise systems for technology, business processes, sales and
marketing systems, finance and royalty systems, customer interfaces, and other corporate administrative functions. We will need to continue upgrading these enterprise systems as well as our network infrastructure to accommodate increased traffic on
our website, sales volume, and the processing of the resulting information. Without continued focus on the integration of and improvement to our enterprise systems and network infrastructure, we may face system interruptions, poor response times,
diminished customer service, impaired quality and speed of order fulfillment, and delays in and potential problems with our financial reporting. Additionally, because we cannot project the precise rate or timing of any increases in traffic or sales
volume on our website, the integration, effectiveness, timing and cost of these upgrades are uncertain.



The computer and communications hardware necessary to operate our corporate functions are located in metropolitan areas worldwide. Any of these systems and operations could be damaged or interrupted by fire,
flood, power loss, telecommunications failure, earthquake and similar events. We do not have full redundancy for all of our network and telecommunications facilities.



OUR ABILITY TO SERVICE OUR INDEBTEDNESS WILL DEPEND ON OUR FUTURE PERFORMANCE

Our level of indebtedness may pose substantial risks to our security holders, including the risk that we may not be able to generate sufficient cash flow to satisfy
our obligations under our indebtedness or to meet our capital requirements. A portion of our cash flow will be dedicated to the payment of principal and interest on any amounts outstanding under our senior credit facility and on our 5.0% convertible
subordinated notes due in 2007. Our ability to service our indebtedness will depend on our future performance, which will be affected by general economic conditions and financial, business and other factors, many of which are beyond our control.



OUR INDEBTEDNESS COULD REDUCE OUR
FLEXIBILITY

Restrictive covenants in our senior credit facility may limit our flexibility in planning for, or reacting to, changes in our business
and competitive environment. While we currently anticipate that our available sources of liquidity will be sufficient to meet our needs for working capital and capital expenditures for at least the next 12 months, changes in U.S. and global capital
markets and economies, including significant fluctuations in interest rates and the price of our equity securities, or fluctuations in the results of our operations may impede our access to, or increase the cost of, external financing for our
operations and any acquisitions.



CERTAIN OF OUR STOCKHOLDERS CAN EXERCISE SIGNIFICANT INFLUENCE OVER OUR BUSINESS AND AFFAIRS

Some of our stockholders own
substantial percentages of the outstanding shares of our common stock.



The Getty Group collectively owned approximately 20% of the outstanding shares of our common stock as of March 31, 2003, and comprises the following persons and entities: Getty Investments L.L.C.; The October 1993 Trust; The JD Klein
Family Settlement; Mr. Mark H. Getty, our Executive Chairman; and Mr. Jonathan D. Klein, our Chief Executive Officer.



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|17 |  |  |  | GETTY IMAGES, INC. |  |  |  | Q1  2003 |  |  |  | FORM 10-Q |  | PART I |  |  |  | ITEM 2
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The Torrance Group collectively owned
approximately 4% of the outstanding shares of our common stock as of March 31, 2003, and comprises the following persons and entities: PDI, L.L.C.; Mr. Mark Torrance; Ms. Wade Ballinger (the former wife of Mr. Torrance); and certain of their family
members.



As a result of their share ownership, the Getty Group and the
Torrance Group each have significant influence over all matters requiring approval of our stockholders, including the election of directors and the approval of business combinations. The substantial percentage of our stock held by the Getty Group
and the Torrance Group could also make us a less attractive acquisition candidate or have the effect of delaying or preventing a third party from acquiring control over us at a premium over the then-current price of our common stock. In addition to
ownership of common stock, certain members of the Getty Group and the Torrance Group have management and/or director roles within our company that increase their influence over us.



WE MAY NOT SUCCEED IN PROTECTING THE GETTY IMAGES BRAND

We have consolidated our companys image collections and the associated product offerings, technology platforms and business practices under the Getty
Images brand name. We believe that brand positioning is important to our future success. Securing the Getty Images trademark in relevant markets is an important part of our branding strategy, and barriers arising from third parties or
trademark officials in various countries may hinder our effort to secure those trademarks.



OUR RIGHT TO USE THE GETTY IMAGES TRADEMARKS IS SUBJECT TO FORFEITURE IN THE EVENT WE EXPERIENCE A CHANGE OF CONTROL

We own trademarks and trademark applications for the name Getty Images. We use Getty Images as a corporate identity, as do certain
of our subsidiaries, and we use Getty Images as a product and service brand. We refer to the above as the Getty Images Trademarks. In the event that a third party or parties not affiliated with the Getty family acquires control of Getty
Images, Getty Investments L.L.C. (Getty Investments) has the right to call for an assignment to it, for a nominal sum, of all rights to the Getty Images Trademarks. In the event of an assignment, we will have 12 months to continue to use the Getty
Images Trademarks, after which time we no longer would have the right to use them. Getty Investments right to cause such an assignment might have a negative impact on the amount of consideration that a potential acquirer would be willing to
pay to acquire our common stock.



Getty Investments owns approximately 18%
of the outstanding shares of our common stock as of March 31, 2003. Mr. Mark H. Getty, our Executive Chairman serves as the Chairman of the Board of Directors of Getty Investments, while Mr. Jonathan D. Klein, our Chief Executive Officer, and Mr.
Andrew S. Garb, a member of our Board of Directors, serve on the Board of Directors of Getty Investments.



CERTAIN PROVISIONS OF OUR CORPORATE DOCUMENTS AND DELAWARE CORPORATE LAW MAY DETER A THIRD PARTY FROM ACQUIRING OUR COMPANY

Our Board of Directors has the authority to issue up to 5 million shares of preferred stock and to fix the rights, preferences, privileges and
restrictions of such shares without any further vote, approval or action by our stockholders. This authority, together with certain provisions of our restated certificate of incorporation, may have the effect of making it more difficult for a third
party to acquire, or of discouraging a third party from attempting to acquire, control of our company. This could occur even if our stockholders consider such change in control to be in their best interests. In addition, the concentration of
beneficial ownership of our common stock in the Getty Group and the Torrance Group, along with certain provisions of Delaware law, may have the effect of delaying, deterring or preventing a takeover of our company.



AN INCREASE IN GOVERNMENT REGULATION OF THE
INTERNET AND E-COMMERCE COULD HAVE A NEGATIVE IMPACT ON OUR BUSINESS

We are subject to a number of regulations applicable to businesses generally,
as well as laws and regulations directly applicable to e-commerce. Although existing laws and regulations affecting e-commerce are not unduly burdensome, state, federal and foreign governments have and may continue to adopt legislation regulating
the Internet and e-commerce. Such legislation or regulation could both increase our cost of doing business and impede the growth of the Internet while decreasing its acceptance or effectiveness as a communications and commerce medium. If a decline
in the use of the Internet occurs, existing or potential customers may decide not to license or use our online products and services.



Existing or future laws and regulations that may impact our business include, but are not limited to, those that govern or restrict:



| |  |  | privacy issues and data processing, retention and transmission;
| | - |  | ---------------------------------------------------------------

| |  |  | pricing and taxation of goods and services offered over the Internet;
| | - |  | ---------------------------------------------------------------------

| |  |  | website content, the quality of products and services offered over the Internet or the manner in which those products and services may be offered; and
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |  | sources of liability for companies involved in the Internet or e-commerce.
| | - |  | --------------------------------------------------------------------------



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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK



Interest Rate Risk

As our level of cash and short-term investments increased during the quarter, our exposure to
interest rate risk increased. Following are investment cash flows and weighted average interest rates by stated maturity dates.



|                                   |  | STATED MATURITY DATE |        |   | FAIR VALUE
|---------------------------------- |  | -------------------- | ------ | - | ----------
|                                   |  |                      |        |   |           
|                                   |  | 2003                 |        |   | 2004      
|                                   |  |                      |        |   |           
|(In thousands, except percentages) |  |                      |        |   |           
|                                  
|ASSETS                             |  |                      |        |   |           
|Short-term investments             |  |                      |        |   |           
|Fixed rate                         |  | $                    | 32,164 |   |           
|Weighted average interest rate     |  |                      | 4.95   | % |           
|                                  



Foreign Currency Exchange Rate
Risk



FOREIGN CURRENCY TRANSLATION

For reporting purposes, revenues and expenses are translated into U.S. dollars at the prior months average daily exchange rate as provided
by Bloomberg LLC. If revenues had been translated into U.S. dollars at the weighted average monthly exchange rates used for translation in the corresponding period of the prior year, sales for the first quarter of 2003 would have been $122.9 million
rather than $130.3 million.



FOREIGN
CURRENCY REVALUATION

Foreign exchange gains of $0.9 million and losses of $0.2 million for the three months ended March 31, 2003 and 2002,
respectively, arose from the revaluation of foreign-currency denominated balances, other than long-term intercompany balances. Foreign-currency denominated balances, other than long-term intercompany balances, in excess of $3.0 million individually
are summarized below by the functional currency of the operation or subsidiary where the balances are recorded. Changes in balances since December 31, 2002 are principally due to sales, cash settlements, and foreign currency revaluation. All March
31 balances are expected to settle within 12 months in the currencies listed.



|                  |  | MARCH 31, 2003 |        |   | DECEMBER 31, 2002 |  
|----------------- |  | -------------- | ------ | - | ----------------- | -
|                  |  |                |        |   |                   |  
|(In thousands)    |  |                |        |   |                   |  
|                 
|British Pound     |  |                |        |   |                   |  
|Receivables       |  |                |        |   |                   |  
|U.S. Dollar       |  | $              | 19,712 |   |                   | $
|Australian Dollar |  |                | 5,821  |   |                   |  
|Payables          |  |                |        |   |                   |  
|Euro              |  | $              | (802   | ) |                   | $
|                 
|Euro              |  |                |        |   |                   |  
|Receivables       |  |                |        |   |                   |  
|British Pound     |  | $              | 5,994  |   |                   | $
|                 
|U.S. Dollar       |  |                |        |   |                   |  
|Receivables       |  |                |        |   |                   |  
|British Pound     |  | $              | 15,966 |   |                   | $
|Euro              |  |                | 14,043 |   |                   |  
|Payables          |  |                |        |   |                   |  
|Canadian Dollar   |  | $              | (3,348 | ) |                   | $
|                 



Foreign exchange losses of $0.6
million and $3.6 million for the three months ended March 31, 2003 and 2002, respectively, arose from the revaluation of long-term intercompany balances. Foreign-currency denominated long-term intercompany balances in excess of $3.0 million
individually, are summarized below by the functional currency of the operation or subsidiary where the balances are recorded. Changes in balances since December 31, 2002 represent the netting of offsetting balances and foreign currency revaluation.



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|                |  | MARCH 31, 2003 |          |   | DECEMBER 31, 2002 |  
|--------------- |  | -------------- | -------- | - | ----------------- | -
|                |  |                |          |   |                   |  
|(In thousands)  |  |                |          |   |                   |  
|               
|British Pound   |  |                |          |   |                   |  
|Receivables     |  |                |          |   |                   |  
|Euro            |  | $              | 9,763    |   |                   | $
|Payables        |  |                |          |   |                   |  
|U.S. Dollar     |  | $              | (164,844 | ) |                   | $
|               
|Canadian Dollar |  |                |          |   |                   |  
|Payables        |  |                |          |   |                   |  
|U.S. Dollar     |  | $              | (11,091  | ) |                   | $
|British Pound   |  |                |         |   |                   |  
|               
|Euro            |  |                |          |   |                   |  
|Receivables     |  |                |          |   |                   |  
|U.S. Dollar     |  | $              | 4,131    |   |                   | $
|British Pound   |  |                | 3,004    |   |                   |  
|               
|U.S. Dollar     |  |                |          |   |                   |  
|Receivables     |  |                |          |   |                   |  
|Euro            |  | $              | 23,096   |   |                   | $
|Payables        |  |                |          |   |                   |  
|British Pound   |  | $              |         |   |                   | $
|Canadian Dollar |  |                | (5,190   | ) |                   |  
|               



There have been no other material
changes in our exposure to market risk or associated risk mitigation policies and procedures since December 31, 2002.



ITEM 4. CONTROLS AND PROCEDURES



EVALUATION OF
DISCLOSURE CONTROLS AND PROCEDURES

Under the supervision and with the participation of management, including the Chief Executive Officer and Chief
Financial Officer, the company has evaluated the effectiveness of its disclosure controls and procedures (as defined in Rule 13a-14(c) under the Securities Exchange Act of 1934) within 90 days of the filing date of this quarterly report. Based upon
that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that these disclosure controls and procedures are effective.



CHANGES IN INTERNAL CONTROLS

There have been no significant
changes in the companys internal controls or in other factors that could significantly affect internal controls subsequent to the date of their evaluation.



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|20 |  |  |  | GETTY IMAGES, INC. |  |  |  | Q1  2003 |  |  |  | FORM 10-Q |  | PART II |  |  |  | ITEM 1
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PART II. OTHER INFORMATION



ITEM 1. LEGAL PROCEEDINGS



We have been, and may
continue to be, subject to legal claims from time to time in the ordinary course of our business, including those related to alleged infringement of the intellectual property rights of third parties, such as the failure to secure model and property
releases. Claims may also include those brought by photographers and cinematographers relating to our handling of images submitted to us or to the companies we have acquired. We have accrued a liability for the estimated costs of defending,
adjudicating or settling claims for which we believe a loss is probable. There are no pending legal proceedings to which we are a party or to which any of our property is subject that, either individually or in the aggregate, are expected to have a
material adverse effect on our Condensed Consolidated Financial Statements.



ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS



None



ITEM 3. DEFAULTS UPON SENIOR SECURITIES



None



ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS



None



ITEM 5. OTHER INFORMATION



None



ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K



(A)
EXHIBITS:



Reference is made to the Index of Exhibits beginning on page 24
for a list of all exhibits filed as part of this report.



(B) REPORTS ON
FORM 8-K:



No reports on Form 8-K were filed during the quarter ended
March 31, 2003.



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|21 |  |  |  | GETTY IMAGES, INC. |  |  |  | Q1  2003 |  |  |  | FORM 10-Q |  |  |  | SIGNATURE
|-- |  |  |  | ------------------ |  |  |  | -------- |  |  |  | --------- |  |  |  | ---------



SIGNATURE



Pursuant to the requirements of the
Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



GETTY IMAGES, INC.By:

/s/    ELIZABETH J. HUEBNERElizabeth J. Huebner Senior Vice President and Chief Financial Officer




May 9, 2003



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|22 |  |  |  | GETTY IMAGES, INC. |  |  |  | Q1  2003 |  |  |  | FORM 10-Q |  | CERTIFICATIONS |  | 
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CERTIFICATION PURSUANT TO RULE 13a-14 OR 15d-14 OF THE SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002



I, Jonathan D. Klein, Chief Executive Officer, certify that:



1. I have reviewed this quarterly report on Form 10-Q of Getty Images, Inc.;



2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly
report;



3. Based on my knowledge, the financial
statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this
quarterly report;



4. The registrants other
certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:



a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;



b) evaluated the effectiveness of the registrants disclosure
controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the Evaluation Date); and



c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as
of the Evaluation Date;



5. The registrants other
certifying officers and I have disclosed, based on our most recent evaluation, to the registrants auditors and the audit committee of registrants board of directors (or persons performing the equivalent function):



a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrants ability to record, process, summarize and report financial data and have identified for the registrants auditors any material weaknesses in internal controls; and



b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrants internal controls; and



6. The registrants other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly
affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.



By:

/s/    JONATHAN D. KLEINJonathan D. Klein Co-Founder and Chief Executive Officer




May 9, 2003



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CERTIFICATION PURSUANT TO RULE 13a-14 OR 15d-14 OF THE SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO
SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002



I, Elizabeth J. Huebner,
Chief Financial Officer, certify that:



1. I have reviewed
this quarterly report on Form 10-Q of Getty Images, Inc.;



2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this quarterly report;



3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;



4. The registrants other certifying officers and I are responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:



a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;



b) evaluated the effectiveness of the registrants disclosure controls and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the Evaluation Date); and



c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;



5. The registrants other certifying officers and I have disclosed, based on our most recent evaluation, to the
registrants auditors and the audit committee of registrants board of directors (or persons performing the equivalent function):



a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrants ability to
record, process, summarize and report financial data and have identified for the registrants auditors any material weaknesses in internal controls; and



b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal
controls; and



6. The registrants other certifying
officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant deficiencies and material weaknesses.



By:

/s/    ELIZABETH J.
HUEBNERElizabeth J. Huebner Senior Vice President and Chief Financial Officer




May 9, 2003



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##### Table of Contents



|24 |  |  |  | GETTY IMAGES, INC. |  |  |  | Q1  2003 |  |  |  | FORM 10-Q |  | PART II |  |  |  | ITEM 6
|-- |  |  |  | ------------------ |  |  |  | -------- |  |  |  | --------- |  | ------- |  |  |  | ------





EXHIBIT INDEX



|Exhibit Number |   |  | Description of Exhibit                    
|-------------- | - |  | ------------------------------------------
|               |   |  |                                           
|              
|99.1           | * |  | Certification by Jonathan D. Klein, CEO   
|              
|99.2           | * |  | Certification by Elizabeth J. Huebner, CFO



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|* |  | Filed herewith.
|- |  | ---------------