<PAGE>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                 ----------------------------------------------


                                    FORM 10-Q

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

                  FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1998

                                       OR

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

                   COMMISSION FILE NUMBER: 000-23747


                               GETTY IMAGES, INC.
             (Exact name of Registrant as specified in its charter)

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


                 ----------------------------------------------


           2101 FOURTH AVENUE                        101 BAYHAM STREET
              FIFTH FLOOR                             LONDON, ENGLAND
       SEATTLE, WASHINGTON 98121                          NW1 OAG
            (206) 695 3400                         (001 44 171) 544 3456

   (Addresses, including zip code, and telephone numbers, 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 x No

        As of August 10, 1998, there were 30,459,117 shares of the Registrant's
                  common stock, par value $0.01 per share, outstanding.

<PAGE>



                               GETTY IMAGES, INC.

                     INDEX TO QUARTERLY REPORT ON FORM 10-Q
                                     FOR THE
                        THREE MONTHS ENDED JUNE 30, 1998


<TABLE>
<CAPTION>

                                                                                                              PAGE
<S>                                                                                                           <C>
PART I  -  FINANCIAL INFORMATION
     Item 1.  Financial Statements                                                                              3
     Item 2.  Management's Discussions and Analysis of Financial Condition 
              and Results of Operations                                                                        16

PART II - OTHER INFORMATION
     Item 1.  Legal Proceedings                                                                                26
     Item 2.  Changes in Securities and Use of Proceeds                                                        26
     Item 6.  Exhibits and Reports on Form 8-K                                                                 27
</TABLE>



                                       2

<PAGE>



                               GETTY IMAGES, INC.

                                     PART I.
                              FINANCIAL INFORMATION


ITEM 1.  FINANCIAL STATEMENTS

                               GETTY IMAGES, INC.
                 UNAUDITED CONSOLIDATED STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
                                                                                            THREE MONTHS ENDED
                                                                           -----------------------------------------------------
                                                                                 JUNE 30, 1998            JUNE 30, 1997(1)
                                                                                       $                          $
                                                                                (IN THOUSANDS)             (IN THOUSANDS)
<S>                                                                             <C>                       <C>
Sales                                                                                48,126                     25,737
Cost of sales                                                                        13,909                      9,695
                                                                                    -------                     ------
Gross profit                                                                         34,217                     16,042
                                                                                    -------                     ------
Selling, general and administrative expenses                                         25,837                     11,381
Amortization of intangibles                                                          10,007                        713
Depreciation                                                                          3,547                      1,833
Non-recurring integration/restructuring costs                                         9,137                          -
                                                                                    -------                     ------
                                                                                     48,528                     13,927
                                                                                    -------                     ------

Operating (loss)/income                                                             (14,311)                     2,115
Net interest (expense)/income                                                          (768)                       446
Exchange gain/(loss)                                                                    296                       (240)
                                                                                    -------                     ------

(Loss)/income before income taxes                                                   (14,783)                     2,321
Income taxes                                                                            712                     (1,140)
                                                                                    -------                     ------

Net (loss)/income before extraordinary items                                        (14,071)                     1,181
Extraordinary items                                                                    (830)                         -
                                                                                    -------                     ------
Net (loss)/income                                                                   (14,901)                     1,181
                                                                                    -------                     ------
                                                                                    -------                     ------

Basic (loss)/earnings per share (2)                                                 $(0.49)                      $0.03
Diluted earnings per share (2)                                                        N/A                        $0.03
Basic earnings per ADS (2)                                                            N/A                        $0.06
Diluted earnings per ADS (2)                                                          N/A                        $0.06
</TABLE>

(1)  Reflects the unaudited consolidated statement of operations of Getty 
     Communications plc (the predecessor company) for the quarter ended 
     June 30, 1997.

(2)  The comparatives for the quarter ended June 30, 1997 reflect the share 
     structure of Getty Communications plc (the predecessor company). Each 
     American Depositary Share (ADS) represented two ordinary shares.

The accompanying notes are an integral part to these consolidated financial
statements.

                                       3

<PAGE>

                               GETTY IMAGES, INC.

                 UNAUDITED CONSOLIDATED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
                                                                                    SIX MONTHS ENDED
                                                                      -------------------------------------------
                                                                      JUNE 30, 1998(1)           JUNE 30, 1997(2)
                                                                              $                          $
                                                                       (IN THOUSANDS)             (IN THOUSANDS)
<S>                                                                   <C>                        <C>
Sales                                                                        86,057                     48,718
Cost of sales                                                                25,516                     18,337
                                                                            -------                     ------
Gross profit                                                                 60,541                     30,381
                                                                            -------                     ------
Selling, general and administrative expenses                                 45,585                     21,364
Amortization of intangibles                                                  16,903                      1,349
Depreciation                                                                  6,445                      3,623
Non-recurring integration/restructuring costs                                 9,137                          -
                                                                            -------                     ------
                                                                             78,070                     26,336
                                                                            -------                     ------

Operating (loss)/income                                                     (17,529)                     4,045
Net interest (expense)/income                                                (1,319)                       782
Exchange loss                                                                   (59)                      (312)
                                                                            -------                     ------

(Loss)/income before income taxes                                           (18,907)                     4,515
Income taxes                                                                   (369)                    (2,078)
                                                                            -------                     ------

Net (loss)/income before extraordinary items                                (19,276)                     2,437
Extraordinary items                                                            (830)                         -
                                                                            -------                     ------
Net (loss)/income                                                           (20,106)                     2,437
                                                                            -------                     ------
                                                                            -------                     ------

Basic (loss)/earnings per share (3)                                         $(0.72)                      $0.06
Diluted earnings per share (3)                                                N/A                        $0.06
Basic earnings per ADS (3)                                                    N/A                        $0.13
Diluted earnings per ADS (3)                                                  N/A                        $0.13
</TABLE>

(1)  Reflects the combination of the unaudited consolidated statement of 
     operations of Getty Communications plc (the predecessor company) for the 
     period January 1, 1998 through February 9, 1998 and the unaudited 
     consolidated statement of operations of Getty Images, Inc. for the 
     period February 10, 1998 through June 30, 1998.

(2)  Reflects the unaudited  consolidated  statement of operations of Getty  
     Communications plc (the predecessor company) for the six month period ended
     June 30, 1997.

(3)  The comparatives for the six month period ended June 30, 1997 reflect 
     the share structure of Getty Communications plc (the predecessor 
     company). Each American Depository Share (ADS) represented two ordinary 
     shares.

The accompanying notes are an integral part to these consolidated financial
statements.

                                       4

<PAGE>

                               GETTY IMAGES, INC.

                      UNAUDITED CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
                                                                     JUNE 30, 1998             DECEMBER 31, 1997(1)
                                                                           $                             $
                                                                     (IN THOUSANDS)               (IN THOUSANDS)

                            ASSETS
<S>                                                                  <C>                       <C>
CURRENT ASSETS
           Cash and cash equivalents                                      36,163                          29,234
           Accounts receivable                                            34,109                          23,431
           Prepaid expenses and other assets                              14,622                           7,839
           Inventories                                                     3,070                               -
                                                                         -------                         -------

TOTAL CURRENT ASSETS                                                      87,964                          60,504
Fixed assets, net                                                         52,919                          39,853
Intangible assets                                                        344,189                          66,870
Deferred assets                                                            6,574                           4,411
                                                                         -------                         -------

TOTAL ASSETS                                                             491,646                         171,638
                                                                         -------                         -------
                                                                         -------                         -------

             LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES
           Accounts payable                                               31,915                          21,461
           Accrued expenses                                               20,072                          10,305
           Income taxes payable                                            4,149                           3,580
           Current portion of long-term debt                                 260                           2,096
                                                                         -------                         -------

TOTAL CURRENT LIABILITIES                                                 56,396                          37,442
Long term debt                                                            72,014                          14,657
                                                                         -------                         -------

TOTAL LIABILITIES                                                        128,410                          52,099
                                                                         -------                         -------

SHAREHOLDERS' EQUITY
           Common stock                                                      299                             608
           Additional paid-in capital                                    365,139                         108,049
           Retained (losses)/earnings                                    (11,734)                          8,124
           Cumulative translation adjustments                              9,532                           2,758
                                                                         -------                         -------

TOTAL SHAREHOLDERS' EQUITY                                               363,236                         119,539
                                                                         -------                         -------

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                               491,646                         171,638
                                                                         -------                         -------
                                                                         -------                         -------
</TABLE>

(1)  Extracted from the audited consolidated balance sheet of Getty 
     Communications plc (the predecessor company) at December 31, 1997.

The accompanying notes are an integral part to these consolidated financial
statements.

                                       5

<PAGE>


                               GETTY IMAGES, INC.
            UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                        SIX MONTHS ENDED
                                                                           -------------------------------------------
                                                                           JUNE 30, 1998(1)           JUNE 30, 1997(2)
                                                                                   $                          $
                                                                            (IN THOUSANDS)             (IN THOUSANDS)
<S>                                                                        <C>                        <C>
Net cash flows from operating activities                                          5,220                      7,334
                                                                                -------                    -------

Cash flows from investing activities
           Business acquisitions, net of cash acquired                          (75,172)                    (7,166)
           Purchase of fixed assets                                              (8,495)                    (6,553)
                                                                                -------                    -------

Net cash used in investing activities                                           (83,667)                   (13,719)
                                                                                -------                    -------

Cash flows from financing activities
           Proceeds from debt                                                   119,569                          -
           Payments of principal balance of debt                                (67,093)                    (2,119)
           Proceeds from issuance of ordinary shares                             32,477                          -
                                                                                -------                    -------

Net cash provided by/(used in) financing activities                              84,953                     (2,119)
                                                                                -------                    -------

Net increase/(decrease) in cash and cash equivalents                              6,506                     (8,504)
Exchange rate differences arising from translation of foreign
  currency balances                                                                 423                     (1,737)
Cash and cash equivalents
-     beginning of period                                                        29,234                     58,938
                                                                                -------                    -------
-     end of period                                                              36,163                     48,697
                                                                                -------                    -------
                                                                                -------                    -------
</TABLE>

(1)  Reflects the combination of the unaudited condensed consolidated 
     statement of cash flows of Getty Communications plc (the predecessor 
     company) for the period January 1, 1998 through February 9, 1998 and the 
     unaudited condensed consolidated statement of cash flows of Getty 
     Images, Inc. for the period February 10, 1998 through June 30, 1998.

(2)  Reflects the unaudited condensed consolidated statement of cash flows of 
     Getty Communications plc (the predecessor company) for the six month period
     ended June 30, 1997.

The accompanying notes are an integral part to these consolidated financial
statements.

                                       6

<PAGE>

                               GETTY IMAGES, INC.

                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


EXPLANATORY NOTE

On February 9, 1998, the entire issued share capital of Getty Communications 
plc ("Getty Communications") was acquired via a Scheme of Arrangement by 
Getty Images, Inc. ("Getty Images" or the "Company"), a company incorporated 
in Delaware and whose principal executive offices are located in Seattle, 
Washington and London, England. Under the Scheme of Arrangement, each issued 
Getty Communications Class B Ordinary Share was converted into one Getty 
Communications Class A Ordinary Share and each holder of Getty Communications 
"A" Ordinary Shares was issued one share of Getty Images Common Stock, par 
value $0.01 ("Common Stock") for every two Getty Communications "A" Ordinary 
Shares held.

The Scheme of Arrangement was accounted for as a transaction between entities 
under common control, therefore purchase accounting has not been applied.

On February 9, 1998, a wholly owned subsidiary of Getty Images merged with 
PhotoDisc, Inc., a Washington corporation ("PhotoDisc"). The purchase 
consideration was $244.6 million, including expenses, which included the 
issue of 8,083,831 shares of Getty Images Common Stock, at a total market 
value of $171.8 million.

On February 10, 1998, Getty Images purchased the entire issued and 
outstanding share capital of Allsport Photographic plc, a public limited 
company organized under the laws of England & Wales ("Allsport"). The 
purchase consideration was $51.1 million, including expenses, which included 
the issue of 1,137,916 shares of Getty Images Common Stock, at a total market 
value of $24.2 million.

Descriptions of these transactions were included in (i) the Current Report on 
Form 8-K dated February 9, 1998 and the Current Report on Form 8-K dated 
February 24, 1998 (as amended by the Amendment to Current Report on Form 
8-K/A dated April 27, 1998), filed with the Securities and Exchange 
Commission (the "Commission") by Getty Images (collectively, the "Reports") 
and (ii) the Registration Statement on Form S-4 (No.333-38777) that the 
Company filed with the Commission (as amended, the "Registration Statement") 
in connection with the meetings of shareholders of Getty Communications and 
the special meetings of the shareholders of PhotoDisc that were required to 
approve the transactions and the offering of securities in connection 
therewith.

As a result of such transactions, Getty Images became the successor to Getty 
Communications. Trading in Getty Communications American Depository Shares 
("ADSs") on the Nasdaq National Market (NASDAQ-GETTY) terminated on February 
9, 1998 and trading subsequently commenced in shares of Getty Images Common 
Stock on the Nasdaq National Market (NASDAQ-GETY). Registration of the Getty 
Communications Ordinary Shares and ADSs under the Securities Exchange Act of 
1934, as amended, has been terminated.

                                       7

<PAGE>


                               GETTY IMAGES, INC.

           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   (UNAUDITED)


Also as described in the Reports, on February 9, 1998, Getty Investments 
L.L.C. ("Getty Investments") completed a subscription for 1,518,644 shares of 
Getty Images Common Stock at a purchase price of $18.4375 per share or an 
aggregate of $28 million (the "Getty Investments Subscription").

1.  BASIS OF PREPARATION

The unaudited consolidated financial statements presented herein have been 
prepared in accordance with the instructions to Form 10-Q and do not include 
all the information and note disclosures required by generally accepted 
accounting principles. The statements should be read in conjunction with the 
consolidated financial statements and notes thereto included in the Company's 
Annual Report on Form 10-K for the year ended December 31, 1997 (the "Annual 
Report"), Commission file No. 000-23747, that was filed with the Commission 
on March 31, 1998 (as amended by the Company's Report on Form 10-K/A that was 
filed with the Commission on April 28,1998). In the opinion of management, 
the accompanying consolidated financial statements include all adjustments 
(consisting only of normal recurring adjustments) necessary to present fairly 
the Company's financial position and results of operations. The results of 
the operations for the three and six month periods ended June 30, 1998 may 
not be indicative of the results that may be expected for the full fiscal 
year.

           RECENTLY ISSUED ACCOUNTING STANDARDS

In July 1997, the FASB issued SFAS No. 131, Disclosures About Segments of 
Enterprise and Related Information. SFAS No. 131 requires certain financial 
and supplementary information to be disclosed on an annual and interim basis 
for each reportable segment of an enterprise. SFAS No. 131 is effective for 
fiscal years beginning after December 15, 1997, but interim reporting is not 
required until interim periods beginning after December 15, 1998. Unless 
impracticable, companies would be required to restate prior period 
information upon adoption. Management does not expect the adoption of this 
standard to have a material impact on the Company and its operations.

SOP 98-1 "Accounting for the Costs of Computer Software Developed or Obtained 
for Internal Use" was issued in March 1998 and is effective for financial 
statements for periods beginning after December 15, 1998. This statement 
identifies the characteristics of internal-use software and provides guidance 
on when costs incurred for internal use computer software are and are not 
capitalized. Costs incurred prior to initial application will not be 
retrospectively adjusted to comply with the provision of this SOP. The 
Company is evaluating the impact of SOP 98-1.

                                       8

<PAGE>

                               GETTY IMAGES, INC.

           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   (UNAUDITED)


2.  PRINCIPLES OF CONSOLIDATION

The accompanying consolidated financial statements include Getty Images, Inc. 
and its subsidiaries, all of which are 100% owned, from the date of 
acquisition. All material intercompany amounts and transactions have been 
eliminated in the consolidated financial statements.

3.  NON-RECURRING INTEGRATION AND RESTRUCTURING CHARGES

During the three month period ended June 30, 1998, the Company approved and 
commenced its program to integrate the businesses of the Group following the 
acquisitions of PhotoDisc and Allsport in February 1998. This has resulted in 
integration and restructuring charges, which are incremental and 
non-recurring, being incurred.

Integration charges in the three month period ended June 30, 1998 amounted to 
$1.3 million and are associated with the activities of teams responsible for 
integrating the various businesses of the Group for the benefit of future 
operations and include items such as consulting and professional fees, 
systems and process integration costs and contract renegotiation costs. These 
costs are expensed as incurred.

The provision for restructuring costs, amounting to $7.8 million in the three 
month period ended June 30, 1998, is for estimated exit costs associated with 
the closure of certain facilities operated by the Group, including property 
related exit costs and asset writedowns and the termination of employees.

Non-recurring integration and restructuring costs have been incurred as follows:


<TABLE>
<CAPTION>
                                                                                     $'000
<S>                                                                            <C>
Total charges                                                                        9,137
Cash expenditure                                                                      (253)
Non-cash write offs                                                                 (3,437)
                                                                                    ------

Provision at June 30, 1998                                                           5,447
                                                                                    ------
                                                                                    ------
</TABLE>

The balance at June 30, 1998 relates  principally to employee  termination 
and premises  closure costs that will be  substantially  paid in the 
remainder of 1998.

                                        9

<PAGE>

                               GETTY IMAGES, INC.

           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   (UNAUDITED)


In accordance with US GAAP, further costs associated with the integration and 
restructuring program, which the Company anticipates will amount to up to 
$2.4 million, will be recognized when the appropriate recognition criteria 
have been met. These costs are expected to be incurred in the next quarter. 
It is anticipated that the integration and restructuring program will be 
substantially complete by December 31, 1998.

4.  EXTRAORDINARY ITEMS

On May 20, 1998, the Company completed the issue of $75 million 4.75% 
convertible subordinated notes, the proceeds of which were partially applied 
to the repayment of $49 million of term debt due to Midland Bank plc. The 
early payment of such debt resulted in an extraordinary charge of $830,000 
consisting of the following:

<TABLE>
<CAPTION>
                                                    $'000
<S>                                                <C>
Write off of unamortized loan costs                 1,238
Income tax benefit                                   (408)

                                                    -----
                                                      830
                                                    -----
                                                    -----
</TABLE>

5.  PROVISION FOR INCOME TAXES

In accordance with generally accepted accounting principles, the Company 
provides for income taxes on an interim basis using its estimated annual 
income tax rate. The Company is providing for income taxes in 1998 at an 
effective tax rate of 36.1% of net income before amortization of goodwill, 
non-recurring integration and restructuring charges and extraordinary items, 
which are largely non-tax deductible. The comparative rate for the year ended 
December 31, 1997 was 35.4%.

6.  EARNINGS PER SHARE

Basic and diluted earnings per share (EPS) are computed in accordance with 
FAS No. 128, "Earnings per Share", which is effective for fiscal periods 
ending after December 15, 1997. Prior periods have been restated to conform 
with the provisions of this standard.

Diluted earnings per share are not given for the three month period ended 
June 30, 1998 and the six month period ended June 30, 1998 due to the loss 
incurred in those periods. Basic loss per share for the three month period 
ended June 30, 1998 and six month period ended June 30, 1998 are computed on 
the basis of weighted average number of shares in issue respectively.

                                       10

<PAGE>

                               GETTY IMAGES, INC.

           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   (UNAUDITED)


The numerators and denominators of the basic and diluted per share 
computations are reconciled below:

<TABLE>
<CAPTION>
                                             THREE MONTHS ENDED JUNE 30, 1997               THREE MONTHS ENDED JUNE 30, 1998
                                           INCOME                                     INCOME                          
                                        (NUMERATOR)         SHARES     PER SHARE    (NUMERATOR)            SHARES       PER SHARE
                                             $          (DENOMINATOR)   AMOUNT           $             (DENOMINATOR)      AMOUNT 
                                       (IN THOUSANDS)   (IN THOUSANDS)     $      (IN THOUSANDS)       (IN THOUSANDS)       $    
<S>                                    <C>              <C>            <C>        <C>                  <C>              <C>       
BASIC EPS
Income available to common
stockholders                                 1,181           37,699       0.03         (14,901)            30,352           (0.49)
EFFECT OF DILUTIVE SHARES
Share options                                    -              900                          -                N/A
                                     ---------------------------------------------------------------------------------------------

DILUTED EPS
Income available to common
stockholders and assumed option
exercises                                    1,181           38,599       0.03             N/A                N/A             N/A
                                     ---------------------------------------------------------------------------------------------
                                     ---------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
                                             SIX MONTHS ENDED JUNE 30, 1997                   SIX MONTHS ENDED JUNE 30, 1998
                                           INCOME                                      INCOME                           
                                        (NUMERATOR)         SHARES      PER SHARE    (NUMERATOR)            SHARES      PER SHARE
                                             $          (DENOMINATOR)    AMOUNT           $             (DENOMINATOR)     AMOUNT
                                       (IN THOUSANDS)   (IN THOUSANDS)      $       (IN THOUSANDS)      (IN THOUSANDS)       $   
<S>                                    <C>              <C>            <C>        <C>                  <C>              <C>       
BASIC EPS
Income available to common
stockholders                                 2,425           37,572        0.06        (20,106)            27,787           (0.72)
EFFECT OF DILUTIVE SHARES
Share options                                    -              903                          -                N/A
                                     ----------------------------------------------------------------------------------------------

DILUTED EPS
Income available to common
stockholders and assumed option
exercises                                    2,425           38,475        0.06            N/A                N/A             N/A
                                     ----------------------------------------------------------------------------------------------
                                     ----------------------------------------------------------------------------------------------
</TABLE>

                                       11

<PAGE>

7.  ACQUISITIONS

On February 9, 1998, a wholly owned subsidiary of Getty Images merged with 
PhotoDisc. The purchase consideration was $244.6 million including expenses, 
which included the issue of 8,083,831 shares of Getty Images Common Stock, at 
a total market value of $171.8 million.                                       

<TABLE>
<CAPTION>
                                                                                                              $
                                                                                                       (IN THOUSANDS)
<S>                                                                                                    <C>
PURCHASE PRICE OF PHOTODISC

Cash consideration to holders of PhotoDisc Common Stock and Series A
  Preferred Stock                                                                                            34,076
Getty Images' transaction expenses                                                                            9,000
                                                                                                            -------
Cash costs of the acquisition                                                                                43,076

Stock consideration - Shares of Getty Images Common Stock issued
  (8,083,831 @ $21.25)                                                                                      171,781
Fair value of options over shares of PhotoDisc Common Stock converted to options
  over shares of Getty Images Common Stock                                                                   29,701
                                                                                                            -------
Total purchase price                                                                                        244,558
PhotoDisc net assets at February 9, 1998                                                                     (5,216)
                                                                                                            -------
Excess of purchase price over net assets acquired                                                           239,342
                                                                                                            -------
                                                                                                            -------
Amount allocated to specific intangibles (amortized over 2 to 3 years)                                       46,387
Amount allocated to goodwill (amortized over 20 years)                                                      192,955
                                                                                                            -------
                                                                                                            239,342
                                                                                                            -------
                                                                                                            -------
</TABLE>
                                       12
<PAGE>

                               GETTY IMAGES, INC.

           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   (UNAUDITED)


On February 10, 1998 Getty Images purchased the entire issued share capital 
of Allsport. The purchase consideration was $51.1 million, including 
expenses, which included the issue of 1,137,916 shares of Getty Images Common 
Stock at a total market value of $24.2 million.

<TABLE>
<CAPTION>
                                                                                                              $
                                                                                                        (IN THOUSANDS)
<S>                                                                                                     <C>
PURCHASE PRICE OF ALLSPORT

Cash consideration to holders of Allsport Ordinary Shares at closing                                         26,998
Getty Images' transaction expenses                                                                              900
                                                                                                           --------
Cash costs of the acquisition                                                                                27,898

Stock consideration - Shares of Getty Images Common Stock issued
  (691,899 @ $21.25) (1)                                                                                     14,703
Fair value of options for Allsport Ordinary Shares, which  
shares were held by an Employee Benefit Trust, converted 
to options over shares of Getty Images Common Stock(1)
                                                                                                              8,511

                                                                                                           --------
Total purchase price                                                                                         51,112
Allsport net assets at February 10, 1998                                                                       (631)
                                                                                                           --------

Excess of purchase price over net assets acquired                                                            50,481
                                                                                                           --------
                                                                                                           --------

Amount allocated to specific intangibles (amortized over 1 to 3 years)                                        4,571
                                                                                                           --------
Amount allocated to goodwill (amortized over 20 years)                                                       45,910
                                                                                                           --------
                                                                                                             50,481
                                                                                                           --------
                                                                                                           --------
</TABLE>


(1)  Of the stock consideration of 1,137,916 shares of Getty Images Common 
     Stock, 446,017 were issued to an Employee Benefit Trust established on 
     behalf of certain employees of Allsport. Such shares of Getty Images 
     Common Stock have not been valued for the purpose of calculating the 
     stock consideration, but the underlying options over Allsport Ordinary 
     Shares, which converted into options over shares of Getty Images Common 
     Stock, have been valued by reference to the Black-Scholes option pricing 
     model.

                                       13

<PAGE>

                               GETTY IMAGES, INC.

           NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                   (UNAUDITED)


8.  ADDITIONAL PAID IN CAPITAL

Additional paid in capital includes the following adjustments relating to the 
conversion of options for shares of PhotoDisc Common Stock and Allsport 
Ordinary Shares into options for shares of Getty Images Common Stock and the 
acquisition of the entire issued share capital of Getty Communications.

<TABLE>
<CAPTION>
                                                                                                                 $
                                                                                                          (IN THOUSANDS)

<S>                                                                                                       <C>
Fair value of options for Allsport Ordinary Shares less market value of Getty Images
  Common Stock issued to the Employee Benefit Trust                                                              (967)
Elimination  of Getty  Communications  Ordinary  Shares at par, net of the  
  conversion to shares of Getty Images Common Stock                                                               416
Elimination of additional paid-in capital of Getty Communications                                             108,049
Fair value of options over shares of PhotoDisc Common Stock converted to options
  over shares of Getty Images Common Stock                                                                     29,701
                                                                                                              -------

                                                                                                              137,199
                                                                                                              -------
                                                                                                              -------
</TABLE>

9.  REFINANCING

On May 20, 1998, the Company completed the issue of $75 million convertible 
notes. These notes carry a coupon of 4.75% and are convertible into 2.6 
million shares of Getty Images Common Stock, subject to adjustment. These 
notes are general unsecured subordinated obligations of the Company. The 
proceeds from the sale of the notes were partially applied to the repayment 
of $49 million of term debt, of which $17 million existed at December 31, 
1997.

10. STOCK OPTIONS

Under the Scheme of Arrangement, the existing stock options granted by Getty 
Communications were vested immediately, with the right to exercise the 
options for a period of three months from February 17, 1998, which was 
subject to extension at the discretion of the Company. As an alternative to 
exercising options, option holders had the right to exchange their existing 
options for Getty Communications Class "A" Ordinary Shares for new options 
over Getty Images Common Stock at a ratio of 2 for 1.

Pursuant to the acquisition of PhotoDisc,  1.8 million  options for Getty 
Images Common Stock were granted to existing  holders of options over 
PhotoDisc Common Stock.

On February 9, 1998, Getty Images granted 3.1 million options to acquire 
Getty Images Common Stock at $20.91 per share. Further options were granted 
on April 1 and June 2, 1998 of 81,000 at $25.88 and 255,000 at $19.22, 
respectively. These options are exercisable within one to ten years from date 
of grant.

                                       14

<PAGE>

REPORT ON UNAUDITED INTERIM FINANCIAL INFORMATION

To the Board of Directors of Getty Images, Inc.

We have reviewed the accompanying interim consolidated financial statements of 
Getty Images, Inc. and consolidated subsidiaries as of June 30, 1998, and for 
the three-month and six-month period then ended as set out on pages 3 to 14. 
These interim financial statements are the responsibility of the company's 
management.

We conducted our review in accordance with standards established by the 
American Institute of Certified Public Accountants. A review of interim 
financial information consists principally of applying analytical procedures 
to financial data and making inquiries of persons responsible for financial 
and accounting matters. It is substantially less in scope that an audit 
conducted in accordance with generally accepted auditing standards, the 
objective of which is the expression of an opinion regarding the financial 
statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that 
should be made to the accompanying interim financial statements for them to 
be in conformity with generally accepted accounting principles.


PricewaterhouseCoopers
Chartered Accountants
LONDON
England


August 14, 1998

                                      15


<PAGE>


ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND 
RESULTS OF OPERATIONS.

THE FOLLOWING SHOULD BE READ IN CONJUNCTION WITH THE UNAUDITED CONSOLIDATED 
FINANCIAL STATEMENTS OF GETTY IMAGES, INC. AND THE NOTES THERETO, AND OTHER 
FINANCIAL INFORMATION CONTAINED ELSEWHERE IN THIS REPORT ON FORM 10-Q.

THE STATEMENTS IN THIS SECTION THAT ARE NOT HISTORICAL FACTS ARE 
FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF SECTION 27A OF THE 
SECURITIES ACT OF 1933, AS AMENDED, AND SECTION 27E OF THE SECURITIES 
EXCHANGE ACT OF 1934, AS AMENDED, THAT INVOLVE RISKS AND UNCERTAINTIES, SUCH 
AS STATEMENTS OF THE COMPANY'S PLANS, OBJECTIVES, EXPECTATIONS AND 
INTENTIONS. THE CAUTIONARY STATEMENTS MADE IN THIS QUARTERLY REPORT SHOULD BE 
READ AS BEING APPLICABLE TO ALL RELATED FORWARD-LOOKING STATEMENTS AS A 
RESULT OF A VARIETY OF FACTORS, INCLUDING THOSE SET FORTH UNDER "ITEM 1: 
BUSINESS - H. BUSINESS RISK FACTORS" IN THE ANNUAL REPORT.

THE FOLLOWING DISCUSSION INCORPORATES THE POST-MERGER AND POST-ACQUISITION 
RESULTS OF PHOTODISC AND ALLSPORT, WHICH WERE ACQUIRED BY GETTY IMAGES ON 
FEBRUARY 9, 1998 AND FEBRUARY 10, 1998, RESPECTIVELY.

OVERVIEW

Getty Images commenced operations on February 9, 1998 following the Scheme of 
Arrangement with Getty Communications and the acquisition of PhotoDisc. On 
February 10, 1998 the Company acquired Allsport.

Getty Images' sales are primarily derived from the marketing of image 
reproduction and broadcasting rights to a range of business customers. Sales 
generally comprise a large number of relatively small transactions involving 
the sale either of single images, video and film clips or of CD-ROM products 
containing between 100 and 300 images. Getty Images utilizes a variety of 
digital and analog distribution platforms, including electronic commerce via 
the Internet, CD-ROMS, 35mm film, video and traditional analog 
transparencies. Prices are determined by the extent of rights granted over 
the use of the image or clip and can vary significantly across geographic 
markets and customer groups. Sales are also generated from subscription or 
bulk purchase deals where customers are provided access to imagery on-line.

Getty Images' cost of sales consists primarily of payments to contributing 
photographers and cinematographers. These suppliers are under contract to the 
Company and receive payments of up to 50% of sales depending on the product 
sold and the location of the sale. Minimal payments are due for sales of 
Hulton Getty's and Allsport's imagery as sales of most of the images in these 
collections do not require commission payments. This is also the case

                                       16

<PAGE>

with approximately 25% of the footage at Energy Film Library.  Also included 
in cost of sales is the cost of CD-ROM production at PhotoDisc.

Getty Images' selling, general and administrative expenses include salaries 
and related staff costs, premises and utility costs and marketing and catalog 
costs. These costs have increased recently largely as a result of 
acquisitions and also to support the growth of the business. In the case of 
Allsport, staff costs include salaries of photographers who are employed 
directly by the Company.

Getty Images amortizes goodwill and other intangibles and depreciates the 
cost of the investment in dupes, digital files, the archival picture 
collection, computer systems and other fixed assets over their expected 
useful lives. The acquisition of PhotoDisc and Allsport generated $239 
million of goodwill that will be amortized over twenty years and $51 million 
of other intangibles that will be amortized over periods varying from one to 
three years.

As a result of Getty Images' various acquisitions and their consequential 
financial and accounting effects on net income, Getty Images believes that 
EBITDA provides investors and analysts with an appropriate measure of the 
operating performance of Getty Images. Getty Images defines EBITDA as 
earnings before interest, taxes, exchange gains/(losses), depreciation, 
amortization, non-recurring and extraordinary costs.

The Company experienced an increase in the rate of demand for the digital 
search, selection and fulfillment of imagery during 1997 and the first two 
quarters of 1998, particularly in North America, and believes this trend will 
continue, especially in more developed markets. As a result, the Company 
intends to increase the rate of capital expenditures in digitization in 1998 
and 1999, building on the significant investment made in 1997.

At the same time, the Company is integrating various parts of the business 
following the acquisitions of PhotoDisc and Allsport. It is anticipated that 
non-recurring integration and restructuring costs of up to $11.5 million will 
be incurred in the three month periods ended June 30 and September 30, 1998. 
$9.1 million of this charge was incurred in the three month period ended June 
30, 1998. The charge will cover the one-time charges arising from the 
acquisitions of PhotoDisc and Allsport and their integration and the related 
reorganization of the Company's businesses, as well as exit costs associated 
with the closure of certain facilities operated by the Group.

                                       17

<PAGE>

BASIS OF PRESENTATION

Getty Images reports in U.S. dollars. Getty Communications previously 
reported in pounds sterling. To facilitate comparison of the results of Getty 
Images with the historical results of Getty Communications, the historical 
results of Getty Communications have been translated into U.S. dollars using 
the exchange rates set out below.

Noon Buying rates for pounds sterling expressed in U.S. dollars per pound 
sterling:

<TABLE>
<CAPTION>
           <S>                                                                     <C>
           Average for period ended June 30, 1997:                                 1.6335
           Period end rate at June 30, 1997:                                       1.6650
           Average for period ended June 30, 1998:                                 1.6504
           Period end rate of June 30, 1998                                        1.6685
</TABLE>

                                       18

<PAGE>



UNAUDITED RESULTS OF OPERATIONS:
<TABLE>
<CAPTION>
                                                                                SIX MONTHS ENDED JUNE 30
                                                       --------------------------------------------------------------------------
                                                                               % OF                                  % OF
                                                              1997         NET REVENUES             1998         NET REVENUES
                                                                              (IN THOUSANDS, EXCEPT PERCENTAGES)
<S>                                                          <C>           <C>                    <C>            <C>             
INCOME STATEMENT DATA:
Sales                                                        $48,718           100.0%             $86,057             100.0%
Gross profit                                                  30,381            62.4%              60,541              70.3%
Non-recurring integration and restructuring costs                  -             -                 (9,137)            (10.6%)
Amortization and depreciation                                 (4,972)          (10.2%)            (23,348)            (27.0%)
Operating income/(loss)                                        4,045             8.3%             (17,529)            (20.4%)
Net interest income/(expense)                                    782             1.6%              (1,319)             (1.5%)
Extraordinary item                                                 -             -                   (830)             (1.0%)
Net income/(loss)                                              2,437             5.0%             (20,106)            (23.4%)

OPERATING DATA:
EBITDA(1)                                                      9,017            18.5%              14,956              17.4%
</TABLE>

<TABLE>
<CAPTION>
                                                                              THREE MONTHS ENDED JUNE 30
                                                       --------------------------------------------------------------------------
                                                                               % OF                                 % OF
                                                              1997         NET REVENUES            1998         NET REVENUES
                                                                                (IN THOUSANDS, EXCEPT PERCENTAGES)
<S>                                                          <C>           <C>                    <C>            <C>             
INCOME STATEMENT DATA:
Sales                                                        $25,737           100.0%             $48,126             100.0%
Gross profit                                                  16,042            62.3%              34,217              71.1%
Non-recurring integration and restructuring costs                  -             -                 (9,137)            (19.0%)
Amortization and depreciation                                 (2,546)           (9.9%)            (13,554)            (28.2%)
Operating income/(loss)                                        2,115             8.2%             (14,311)            (29.7%)
Net interest income/(expense)                                    446             1.7%                (768)             (1.6%)
Extraordinary item                                                 -             -                   (830)             (1.7%)
Net income/(loss)                                              1,181             4.6%             (14,901)            (31.0%)

OPERATING DATA:
EBITDA(1)                                                      4,661             18.1%               8,380          17.4%
</TABLE>

(1)  "EBITDA" is defined as earnings before interest, taxes, exchange 
     gains/(losses), depreciation, amortization, non-recurring and 
     extraordinary charges. EBITDA should not be considered as an alternative 
     to operating income as an indicator of Getty Image's operating 
     performance or to cash flows as a measure of Getty Images' liquidity.

                                       19

<PAGE>



SALES

Getty Images' sales increased from $48.7 million in the six month period 
ended June 30, 1997 to $86.1 million in the six month period ended June 30, 
1998, an increase of 77%, and from $25.7 million in the three month period 
ended June 30, 1997 to $48.1 million in the three month period ended June 30, 
1998, an increase of 87%. The increase was attributable mainly to $30.2 
million and $19.1 million in sales in the six and three month periods ended 
June 30, 1998 respectively from the acquisitions in February 1998 of 
PhotoDisc and Allsport.

Excluding the contribution from the acquisitions made in the six and three 
month periods ended June 30, 1998, reported sales of the existing businesses 
grew by 15% and 13% respectively over the corresponding periods in 1997. Had 
the 1997 equivalent exchange rates been applied to the 1998 non-US dollar 
currency revenues, sales growth for the six and three month periods ended 
June 30, 1998, excluding the contributions from the acquisitions, would have 
been 18% and 15% respectively over the corresponding periods in 1997.

All the major businesses of Getty Images reported growth compared with the 
equivalent period of 1997:

Tony Stone Images has performed within management's expectations in the six 
and three month periods ended June 30, 1998, and generated growth by 
increases in both volume and price. Growth was strong in the advertising and 
magazine publishing markets and has benefited by the continuing economic 
strength of the leading economies. In addition to the macroeconomic factors, 
this continued growth has been the result of a mixture of initiatives, 
including focused sales development programs and the continued success of the 
catalogs.

Growth in digital sales continued during the year, accounting for 
approximately 28% and 32% of the Company's sales in the six and three month 
periods ended June 30, 1998 at $23.9 million and $15.3 million respectively. 
PhotoDisc's on-line sales of $8.5 million and $4.6 million in the six and 
three month periods ended June 30, 1998, represented growth of 224% and 203% 
over the equivalent periods of 1997. While growth to date in web sales has 
predominantly been in North America, web sales in Europe and Asia are 
accelerating as a result of the introduction of websites for these particular 
markets.

Allsport's strong sales growth in the quarter was driven by a number of major 
sporting events in the period, particularly the soccer World Cup. 
Subscription revenue has been strong on the completion of a number of deals 
with some prestigious clients, including Pinnacle, the market leader in the 
trading card industry in the USA.

COST OF SALES

Getty Images' cost of sales, which largely comprises amounts payable to 
contributing photographers and cinematographers, increased from $18.3 million 
in the six month period ended June 30, 1997 to $25.5 million, in the six 
month period ended June 30, 1998 and from $9.7 million in the three month 
period ended June 30, 1997 to $13.9 million in the three month period ended 
June 30, 1998. As a percentage of sales, cost of sales declined from 38% in 
the six month period ended June 30, 1997 to 30% in the six month period ended 
June 

                                       20

<PAGE>

30, 1998 and from 38% in the three month period ended June 30, 1997 to 29% in 
the three month period ended June 30, 1998.

The reduction in cost of sales as a percentage of sales primarily reflected 
the higher proportion of sales of owned imagery following the acquisition of 
Allsport, (where a substantial part of the image collection does not give 
rise to payments to photographers), and the addition of PhotoDisc sales into 
the mix (where cost of sales is lower as a result of a larger percentage of 
on-line sales). A similar situation exists in respect of most of Hulton 
Getty's imagery and approximately 25% of Energy Film Library's footage. In 
line with the Company's strategy of increasing its sales of wholly owned 
content, the proportion of sales of wholly owned imagery increased from 
approximately 5% in both the three and six month periods ended June 30, 1997 
to approximately 16% and 19% in the six and three month periods ended June 
30, 1998 respectively.

Within Tony Stone Images, new contracts with contributing photographers have 
been endorsed by the Photographers' Advisory Groups, consultative but 
non-binding groups of US and European contributing photographers. This new 
contract includes a new rate for on-line sales: 40% for in-territory sales 
and 30% for out-of-territory sales, which compares to the rate for analog 
sales of 50% for in-territory sales and 30% for out-of-territory sales. 
Management expects this agreement to improve gross margin as a higher 
proportion of sales move to the web. The principal cost of entering into this 
new contract is a change to the cash payment terms to the photographers which 
will result in a one-time cash payment of approximately $5 million in the 
fourth quarter of 1998. This sum represents purely an acceleration of the 
payments due to them and hence will not affect EBITDA or operating income.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

Getty Images' selling, general and administrative expenses increased from 
$21.4 million in the six month period ended June 30, 1997 to $45.6 million in 
the six month period ended June 30, 1998 and from $11.4 million in the three 
month period ended June 30, 1997 to $25.8 million in the three month period 
ended June 30, 1998. As a percentage of sales, selling, general and 
administrative expenses increased from 43.9% in the six month period ended 
June 30, 1997 to $53.0% in the six month period ended June 30, 1998 and from 
44.2% in the three month period ended June 30, 1997 to 53.7% in the three 
month period ended June 30, 1998.

The increase in selling, general and administrative expenses as a percentage 
of sales was mainly attributable to the inclusion of PhotoDisc and Allsport. 
These businesses have substantially higher selling, general and 
administrative expenses than the existing businesses. Both businesses have 
been making substantial investment in sales, marketing and information 
technology infrastructure to allow the companies to grow at accelerated rates 
into new markets and, in PhotoDisc's case, to develop the web business. As 
these businesses mature, this cost, as a percentage of sales, is expected to 
diminish. In addition, management expects that the application of existing 
businesses cost management disciplines should result in further savings over 
the long term.

Excluding PhotoDisc and Allsport, selling, general and administrative 
expenses increased moderately as a percentage of sales principally as a 
result of investments in management 

                                       21

<PAGE>

and new business systems, including those required for the new Tony Stone 
Images' e-commerce site. Management expect these investments will give rise 
to enhanced sales and allow these businesses to become more competitive. 
Benefits have started to be realized within Tony Stone Images on "Compass", 
the advanced internal search and selection software, and "Client Preview" 
which allows customers to review the results of a Compass search through the 
web. Further service improvements are expected as a result of Tony Stone 
Images website, which management expects will become fully operational in the 
fourth quarter of 1998.

AMORTIZATION OF INTANGIBLES

Amortization of intangibles was $16.9 million and $10.0 million in the six 
and three month periods ended June 30, 1998 respectively compared to $1.3 
million and $0.7 million in the six and three month periods ended June 30, 
1997. These increases in amortization arise from the inclusion of 
amortization relating to the acquisitions of PhotoDisc and Allsport. 
Intangibles of $239 million and $51 million, respectively, arose on 
consolidation of these acquisitions. A substantial part of these intangibles, 
$239 million, has been attributed to goodwill which is being amortized over 
20 years. Other intangibles of $51 million are being amortized over periods 
varying from one to three years.

DEPRECIATION

Depreciation increased from $3.6 million and $1.8 million in the six and 
three month periods ended June 30, 1997 respectively to $6.4 million and $3.5 
million in the six and three month periods ended June 30, 1998. These 
increases primarily arose from the acquisitions, together with continued 
investment in capital expenditure. The merger with PhotoDisc has provided the 
opportunity to accelerate Getty Images' digital strategy, which management 
anticipates will require capital expenditures both in 1998 and 1999 of 
approximately $28 million in the aggregate. Depreciation charges are 
therefore expected to increase in the medium term.

NON-RECURRING INTEGRATION AND RESTRUCTURING COSTS

During the three month period ended June 30, 1998, Getty Images approved and 
commenced its program to integrate the business of the Group. This has 
resulted in non-recurring integration and restructuring costs of $9.1 million 
in the quarter.

Integration costs in the quarter amounted to $1.3 million and were associated 
with the activities of teams responsible for integrating the various 
businesses of the Group for the benefit of future operations and include 
items such as consulting and professional fees, systems and process 
integration costs and contract renegotiation costs.

The provision for restructuring costs, amounting to $7.8 million in the three 
month period ended June 30, 1998 were for estimated exit costs associated 
with the closure of certain facilities operated by the Group, including asset 
writedowns and termination costs. The largest element of the asset writedown 
comprises systems assets, namely hardware and software, which have shortened 
lives as a result of the restructuring plans. The termination costs arise in 
relation to property related exit costs, agents and photographer contracts and

                                       22

<PAGE>

employees. The property related lease costs arise from the consolidation of 
offices where the Company has multiple sites in one location and the 
terminated employees mainly relate to certain senior managers who have now 
departed. Management changes in the quarter include the appointment of Group 
Services Director, Don Smith, as the new Managing Director of Tony Stone 
Images. Stephen Warshaw, Managing Director of Tony Stone Images, has left the 
company. Bob Chamberlain, Co-President of PhotoDisc, has also left the 
company. Sally von Bargen remains as President of PhotoDisc.

In accordance with US GAAP, further costs associated with the non-recurring 
integration and restructuring programs, which the management anticipates will 
amount to up to $2.4 million, will be recognized in the three month period 
ended September 30, 1998. It is anticipated that the non-recurring 
integration and restructuring program will be substantially complete by 
December 31, 1998. Management expects that the total cash outlay will amount 
to approximately $8 million.

NET INTEREST INCOME/(EXPENSE)

Net interest expense was $1.3 million and $768,000 in the six and three month 
period ended June 30, 1998 respectively compared with interest income of 
$782,000 and $446,000 in the six and three month periods ended June 30, 1997 
respectively.

Interest has arisen in 1998 on $30 million of interest bearing term debt 
drawn down to meet the cash consideration of the acquisitions of PhotoDisc 
and Allsport and on the $75 million convertible notes issued on May 20, 1998, 
part of the proceeds of which were used to repay the term debt.

NET EXCHANGE GAINS/(LOSSES)

Getty Images had net exchange losses of $59,000 in the six month period ended 
June 30, 1998 and net exchange gains of $296,000 in the three month period 
ended June 30, 1998 and net exchange losses of $312,000 and $240,000 in the 
six and three month periods ended June 30, 1997 respectively. These credits 
and costs are largely unrealized and arise from revaluation of currency 
balances residing in Getty Images' subsidiaries' books.

Getty Images hedges a majority of contracted net receivables and payables 
using a combination of internal hedging, forward exchange contracts and 
foreign currency term loans.

INCOME TAXES

In the six month period ended June 30, 1998 and 1997, Getty Images had tax 
charges of $369,000 and $2.1 million respectively. In the three month period 
ended June 30, 1998, Getty Images had an income tax credit of $712,000, 
compared to a tax charge of $1.1 million in the three month period ended June 
30, 1997. Excluding the tax credit of $2.2 million arising on the 
non-recurring integration and restructuring costs and the amortization of 
intangibles, which is largely non-tax deductible, Getty Images had effective 
tax rates of 36.1% and 35.2% for the six and three month periods ended June 
30, 1998 and 35.4% and 37.6% for the six and three month periods ended June 
30, 1997.

The changes in the effective rate of tax, excluding the impact of 
amortization of intangibles, was due to a variation in profit mix and tax 
rates in the countries in which Getty Images operates.

                                       23

<PAGE>

EXTRAORDINARY ITEMS

The repayment of the term debt due to Midland Bank plc from the proceeds of 
the $75 million 4.75% convertible subordinated notes resulted in an 
extraordinary charge of $0.8 million in the three month period ended June 30, 
1998 comprising the write off of unamortized loan arrangement costs net of 
the associated income tax benefit.

NET (LOSS)/INCOME

As a result of the foregoing, the net losses for the six and three month 
periods ended June 30, 1998 were $20.1 million and $14.9 million respectively 
compared to net income of $2.4 million and $1.2 million respectively in the 
six and three month periods ended June 30, 1997.

EBITDA

EBITDA  increased  from $9.0 million and $4.7 million in the six and three 
month periods ended June 30, 1997 to $15.0 million and  $8.4 million in the 
six and three month periods ended June 30, 1998 respectively, an increase of 
66% and 80%.

"EBITDA" is defined as earnings before interest, taxes, exchange 
gains/(losses), depreciation, amortization, non-recurring and extraordinary 
charges. Thus, EBITDA with respect to Getty Images comprises sales less cost 
of sales and selling, general and administrative expenses. Getty Images 
believes that EBITDA provides a measure of operating income unaffected by the 
financing of the business and the accounting effects of acquisitions and 
assists in explaining trends in the operating performance of Getty Images. 
EBITDA should not be considered as an alternative to operating income as an 
indicator of Getty Images' operating performance or to cash flows as a 
measure of Getty Images' liquidity.

LIQUIDITY AND CAPITAL RESOURCES

<TABLE>
<CAPTION>
                                                                     SIX MONTHS ENDED JUNE 30
                                                               1997                           1998
                                                          (IN THOUSANDS)                 (IN THOUSANDS)
<S>                                                <C>                             <C>
Net cash provided by/(used in):
           Operating activities                               $7,334                          $5,220
           Investing activities                              (13,719)                        (83,667)
           Financing activities                               (2,119)                         84,953
           Exchange differences                               (1,737)                            423
                                                  ------------------------------------------------------------
Net increase/(decrease) in cash and cash
  equivalents                                                (10,241)                          6,929
                                                  ------------------------------------------------------------
                                                  ------------------------------------------------------------
</TABLE>

                                       24

<PAGE>

Getty Images' cash resources increased by $6.9 million in the six month 
period ended June 30, 1998 compared to a decrease of $10.2 million in the six 
month period ended June 30, 1997.

Net cash provided by operating activities amounted to $5.2 million in the six 
month period ended June 30, 1998 compared to $7.3 million in the six month 
period ended June 30, 1997. The cash generated was less in 1998 as a result 
of adverse movements in working capital arising from timing differences 
between the two periods. In particular, substantially more deferred 
expenditure in the six month period ended June 30, 1998 due to the timing and 
production of catalogs than occurred in the six month period ended June 30, 
1997. In the six month period ended June 30, 1998, Getty Images invested $8.5
million in fixed assets compared to $6.5 million in the six month period 
ended June 30, 1997.

The acquisitions of PhotoDisc and Allsport in February 1998 resulted in a 
cash outflow of $75.2 million, including expenses. To fund this, Getty Images 
raised a net additional $30 million of debt and Getty Investments L.L.C. 
subscribed for an additional 1.5 million shares, providing $28 million of 
additional capital. On May 20, the Company raised $75 million from the issue 
of 4.75% convertible subordinated notes. $49 million of this was applied to 
the repayment of term debt and costs of approximately $3.6 million were 
incurred. Also in the six month period ended June 30, 1998 the Company raised 
$4 million from the exercise of options.

At June 30, 1998, Getty Images had outstanding long term debt of $75.9 
million and cash of $36.2 million.

FACTORS THAT MAY AFFECT FUTURE RESULTS AND FINANCIAL CONDITION

The Company operates in a rapidly changing business that involves a number of 
uncertainties, some of which are beyond the Company's control. In addition to 
the uncertainties described elsewhere in this report, there are many factors 
that will affect the Company's future results and business which may cause 
the actual results to differ from those currently expected. Potential risks 
and uncertainties that could affect the Company's future operating results 
and financial condition include, among other things, the developmental nature 
of the visual content industry, rapid technological change in the visual 
content industry, competition in the visual content industry, potential 
difficulties in integrating the operations of PhotoDisc and Allsport and 
other acquired companies and in managing any growth and expansion, risks 
related to the Company's acquisition strategy, risks related to the Company's 
recognition of goodwill pursuant to its acquisitions of PhotoDisc and 
Allsport, the influence of certain principal stockholders of the Company, the 
Company's levels of indebtedness, risks related to electronic image delivery 
systems, the impact in changes in foreign exchange rates, the potential loss 
of rights to Getty trademarks, the possible volatility of the Company's stock 
price and the impact of future sales of substantial number of shares on the 
market price of the Company's stock and certain antitakeover considerations.

For a discussion of these and other factors affecting the Company's future 
results and financial condition, see "Item 1 - Business, in the Company's 1997 
Form 10-K.


                                       25

<PAGE>

                                    PART II.

                                OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

The Company has and may continue to be subject to legal claims from time to 
time in the ordinary course of business, including those related to the 
alleged infringement by the Company of the trademarks and other intellectual 
property rights of third parties, such as failure to secure model releases. 
Presently, there are no pending legal proceedings to which the Company is a 
party or to which any of its property is subject which, either individually 
or in the aggregate, are expected by the Company to have a material adverse 
effect on its consolidated financial position or results of the operations or 
its liquidity.

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS

On May 20, 1998, the Company completed the sale of a new issue of $75 million 
aggregate principal amount of 4.75% Convertible Subordinated Notes due 2003 
(the "Notes"). The Notes are convertible into the Company's common stock at a 
conversion price of $28.5075 per share, subject to adjustments in certain 
events. The Notes were sold by the Company to BT Alex. Brown International, 
BancAmerica Robertson Stephens, Donaldson, Lufkin & Jenrette Securities 
Corporation and Hambrecht & Quist LLC, as initial purchasers (collectively, 
the "Initial Purchasers") in an unregistered private placement. The Company 
was advised by the Initial Purchasers that the Notes were resold only to 
qualified institutional buyers (as defined in Rule 144A under the Securities 
Act) in compliance with Rule 144A and to a limited number of institutional 
accredited investors (as defined in Rule 501(a)(1), (2), (3) or (7) under the 
Securities Act.

The Company has used approximately $49 million of the net proceeds to prepay 
the Company's term loan facilities with Midland Bank plc, and has used or 
expects to use the balance for general corporate purposes, including capital 
expenditures, the ongoing digitization of portions of its visual images 
collections and working capital requirements or the possible acquisition of 
complementary businesses, products or technologies.

                                       26

<PAGE>

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.

(a)   Exhibits.

      Reference is made to the Index of Exhibits beginning on page 28 for a
      list of all exhibits filed as part of this report.

(b)   Reports on Form 8-K.

      Form 8-K/A filed on April 27,1998, amending Item 7 to the Current
      Report on Form 8-K filed on February 24, 1997. 
      Form 8-K filed on April 29, 1998, reporting Item 5 and 7.
      Form 8-K filed on May 6, 1998, reporting Item 5 and 7. 
      Form 8-K filed on May 8, 1998, reporting Item 5, 7 and 9. 
      Form 8-K filed on May 13, 1998, reporting Item 5 and 7.
      Form 8-K filed on August 13, 1998, reporting Item 5 and 7.

                                       27

<PAGE>



                                   SIGNATURES

Pursuant to the requirements of the Securities and 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.


DATE: August 14, 1998                    BY: /s/ Lawrence Gould
                                            -------------------------------
                                                   LAWRENCE GOULD
                                               CHIEF FINANCIAL OFFICER


*  Signing on the behalf of the Registrant as a principal financial officer

                                       28

<PAGE>


                               GETTY IMAGES, INC.
                          QUARTERLY REPORT ON FORM 10-K
                    FOR THE THREE MONTHS ENDED JUNE 30, 1998

                                INDEX TO EXHIBITS

<TABLE>
<CAPTION>

  NUMBER ASSIGNED IN
REGULATION S-K, ITEM 601                              DESCRIPTION OF EXHIBIT
------------------------                              ----------------------
<S>                          <C>

       (1)3.1                Amended and Restated Certificate of Incorporation of Getty Images (3.1)

       (1)3.2                Bylaws of Getty Images (3.2)

          4.1                Indenture relating to the Company's 4.75% Convertible Subordinated Notes
                             due 2003, dated as of May 27, 1998, between Getty Images, Inc. and
                             The Bank of New York, as Trustee.

         10.1                Registration Rights Agreement, dated as of May 27, 1998, among
                             Getty Images, Inc. and BT Alex. Brown Incorporated, BancAmerica
                             Robertson Stephens, Donaldson, Lufkin & Jenrette Securities 
                             Corporation and Hambrecht & Quist LLC.

         27.1                Financial Data Schedule
</TABLE>

--------------------------------------------------------
(1)  Incorporated by reference from the Exhibits to the Form S-4 Registration 
     Statement No. 333-38777 of the Registrant.  (Exhibit number in the Form 
     S-4 is set forth in italics.)

                                       29