Getty Images (GYI) 8-K Industry Leader Grows Revenue, Operating Margin and Net Income to Record Levels and Raises Guidance for 2005

Exhibit 99.1

GETTY IMAGES REPORTS FINANCIAL RESULTS FOR THE FOURTH QUARTER AND

FULL YEAR OF 2004

Industry Leader Grows Revenue, Operating Margin and Net Income to Record Levels and Raises Guidance for 2005

SEATTLE, January 27, 2005 – Getty Images, Inc. (NYSE:GYI), the world’s leading imagery company, today reported results for the fourth quarter and the year ended December 31, 2004.

Quarterly Highlights

• Revenue grew 21 percent over the fourth quarter of 2003

• Operating margin improved to 27 percent

• Earnings per diluted share increased 53 percent (excluding a credit to income tax expense in the fourth quarter of 2003) over the fourth quarter of 2003

• Net cash provided by operating activities was $63.8 million

“A strong December capped another record-setting year for Getty Images — we achieved the highest level of revenue, operating margin and net income in our ten-year history, for both the fourth quarter and full year,” said Jonathan Klein, Getty Images’ co-founder and CEO. “We met or exceeded every 2004 target we set for the company, including achieving significant growth in our editorial business, launching the first fully localized e-commerce site in Japan and achieving a 27 percent operating margin, two full percentage points ahead of our target.”

For the fourth quarter, revenue grew 20.6 percent to $162.1 million, compared to $134.4 million in the fourth quarter of 2003. Excluding the effects of changes in currency exchange rates, revenue grew 15.5 percent. Operating income for the fourth quarter of 2004 grew 54.1 percent to $43.8 million, or 27.0 percent of revenue, compared to $28.4 million, or 21.1 percent of revenue, in the same quarter last year.

Net income was $28.7 million, or $0.46 per diluted share, compared to $28.2 million, or $0.48 per diluted share for the fourth quarter of 2003. Results for the fourth quarter of 2003 included a credit to income tax expense of $10.2 million, or $0.18 per share, to reflect a reduction in the balance of the valuation allowance on deferred tax assets. Excluding the effect of the reduction in the valuation allowance, net income grew 60.0 percent to $28.7 million from $17.9 million and diluted EPS grew 53.3 percent to $0.46 from $0.30 in the fourth quarter of 2003.

Gross margin for the quarter rose to 72.4 percent from 72.0 in the fourth quarter of 2003. Selling, general & administrative expenses (SG&A) totaled $61.3 million, compared to $53.3 million in the year ago quarter. As a percentage of revenue, SG&A declined to 37.8 percent from 39.7 percent in the fourth quarter of 2003. Fourth quarter 2004 SG&A includes costs associated with the convertible debt exchange of approximately $1.5 million.

For the fourth quarter, net cash provided by operating activities was $63.8 million, compared to $54.9 million for the same quarter last year. The acquisition of property and equipment was $11.0 million for the fourth quarter compared to $12.8 million for the same quarter last year.

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Getty Images, Inc.

Fourth Quarter and Full Year 2004 Financial Results

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Full Year Highlights

• Revenue grew 19 percent over 2003

• Operating margin reached 27 percent

• Net income grew 75 percent and earnings per diluted share increased 65 percent over 2003 (excluding the net effect of one-time charges in 2003)

• Net cash provided by operating activities was $202.6 million

For 2004, revenue grew 19.0 percent to $622.4 million compared to $523.2 million in the prior year. Excluding the effects of changes in currency exchange rates, revenue rose 12.7 percent compared to 2003. Operating income for the full year of 2004 rose 62.9 percent to $168.3 million, or 27.0 percent of revenue. In 2003, operating income totaled $103.3 million, or 19.7 percent of revenue.

For 2004, net income was $106.7 million, or $1.72 per diluted share, compared to $64.0 million, or $1.11 per diluted share for 2003. Results for 2003 included a $10.2 million credit to income tax expense, equating to $0.20 per diluted share on a full-year basis. In addition, 2003 results included debt extinguishment costs of $11.8 million, or $0.12 per diluted share. Excluding the effect of the credit to income tax expense and the debt extinguishment costs, net income grew 75.0 percent to $106.7 million from $61.0 million and earnings per diluted share grew 65.3 percent to $1.72 from $1.04 in 2003.

Gross margin for the year increased to 72.3 percent from 71.6 percent for 2003. SG&A in 2004 totaled $225.1 million, or 36.2 percent of revenue, compared to $210.0 million, or 40.1 percent of revenue in 2003.

Cash and short-term investment balances were $520.7 million at December 31, 2004, up from $307.6 million at December 31, 2003.

For 2004, net cash provided by operating activities was $202.6 million, compared to $158.1 million for 2003. The acquisition of property and equipment was $36.7 million for 2004, compared to $35.3 million for 2003.

Business Outlook

The following forward-looking statements reflect Getty Images’ expectations as of January 27, 2005. The company currently does not intend to update or revise these forward-looking statements until the next quarterly results announcement.

For the first quarter of 2005, the company expects to report revenue in the range of $175 million to $180 million and earnings per diluted share of $0.51 to $0.54.

For 2005, the company is raising guidance and expects revenue in the range of $705 million to $715 million and earnings per diluted share of $2.10 to $2.20. The number of fully diluted shares assumed in the guidance is approximately 64 million for both the first quarter and full year. Guidance for 2005 does not include the impact of expensing share-based compensation, which becomes mandatory in the company’s quarter ending September 30, 2005 pursuant to Financial Accounting Standards Board Statement No.123R.

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Fourth Quarter and Full Year 2004 Financial Results

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Webcast information

The company will host a conference call today at 2:00 pm PT. The dial-in number is 800.967.7185 (North America) or 719.457.2634 (international), confirmation number 341685. There will be a live webcast of the conference call, which can be accessed from the Investors page in the About Us section of the Getty Images Web site at www.gettyimages.com. The company will also provide a replay of the conference call at 888.203.1112 (North America) or 719.457.0820 (international), confirmation number 341685, until January 28, at 9:00 pm PT. The webcast will be archived on the Getty Images Web site and will be available until January 27, 2006.

Some of the statements in this press release may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management’s expectations, assumptions and projections about Getty Images and its industry as of the time the statements are made. These forward-looking statements are not guarantees of future performance and are subject to certain risks and uncertainties 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. These risks and uncertainties include, among others, the risks associated with currency fluctuations, changes in the economic, political, competitive and technological environments, and the risks associated with system security, upgrades, updates and service interruptions. The foregoing list of risks and uncertainties is illustrative, but by no means exhaustive. For more information on factors that may affect future performance, please review the reports filed by Getty Images with the Securities and Exchange Commission, in particular our Form 10-Q for the quarter ended September 30, 2004 and Annual Report on Form 10-K for the year ended December 31, 2003. Except as required by law, Getty Images undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future developments or other events.

About Getty Images

Getty Images is the world’s leading imagery company, creating and providing the largest and most relevant collection of still and moving images to communication professionals around the globe. From news and sports photography to contemporary and archival imagery, Getty Images’ products are found each day in newspapers, magazines, advertising, films, television, books and Web sites. Gettyimages.com is the first place customers turn to search, purchase and download powerful imagery. Seattle-headquartered Getty Images is a global company with customers in more than 100 countries.

Contacts:
Investors:	Media:
Liz Huebner	Deb Trevino
Senior Vice President and CFO	Vice President, Communications
206.925.6003	206.925.6474
liz.huebner@gettyimages.com	deb.trevino@gettyimages.com

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Fourth Quarter and Full Year 2004 Financial Results

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CONSOLIDATED STATEMENTS OF INCOME

(unaudited)

	THREE MONTHS ENDED DECEMBER 31,						YEARS ENDED DECEMBER 31,
	2004			2003			2004			2003
(In thousands, except per share amounts)
Revenue	$	162,100		$	134,383		$	622,427		$	523,196
Cost of sales		44,745			37,643			172,684			148,343
Gross profit		117,355			96,740			449,743			374,853
Selling, general and administrative expenses		61,337			53,308			225,128			210,011
Depreciation		12,246			13,785			52,976			57,348
Amortization		1,199			1,054			4,559			4,052
Other operating (income) expenses		(1,197	)		190			(1,187	)		173
Operating expenses		73,585			68,337			281,476			271,584
Income from operations		43,770			28,403			168,267			103,269
Interest expense		(941	)		(909	)		(3,828	)		(9,765	)
Investment income		2,667			965			9,133			3,847
Exchange gains, net		1,083			474			467			2,142
Debt extinguishment costs		—			—			—			(11,777	)
Income before income taxes		46,579			28,933			174,039			87,716
Income tax expense		(17,898	)		(754	)		(67,389	)		(23,699	)
Net income	$	28,681		$	28,179		$	106,650		$	64,017
Earnings per share
Basic	$	0.48		$	0.50		$	1.81		$	1.16
Diluted		0.46			0.48			1.72			1.11
Shares used in computing earnings per share
Basic		60,343			56,711			59,006			55,412
Diluted		62,908			58,869			62,031			57,514

Getty Images, Inc.

Fourth Quarter and Full Year 2004 Financial Results

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CONSOLIDATED BALANCE SHEETS

(unaudited)

DECEMBER 31,	2004			2003
(In thousands)
ASSETS
Current assets
Cash and cash equivalents	$	290,352		$	140,058
Short-term investments		230,358			167,525
Accounts receivable, net		89,272			75,781
Prepaid expenses		10,651			9,693
Deferred income taxes, net		8,335			13,206
Other current assets		2,894			1,246
Total current assets		631,862			407,509
Property and equipment, net		112,501			123,268
Goodwill		628,717			603,024
Identifiable intangible assets, net		13,874			16,615
Deferred income taxes, net		54,652			62,567
Other long-term assets		9,978			11,101
Total assets	$	1,451,584		$	1,224,084
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	67,362		$	64,454
Accrued expenses		42,810			42,459
Income taxes payable		3,608			8,170
Total current liabilities		113,780			115,083
Long-term debt		265,000			265,011
Other long-term liabilities		9,692			8,184
Total liabilities		388,472			388,278
Stockholders’ equity
Preferred stock		—			—
Common stock		607			573
Additional paid-in capital		1,210,203			1,098,249
Unearned compensation		—			(448	)
Accumulated deficit		(168,603	)		(275,253	)
Accumulated other comprehensive income		20,905			12,685
Total stockholders’ equity		1,063,112			835,806
Total liabilities and stockholders’ equity	$	1,451,584		$	1,224,084

Getty Images, Inc.

Fourth Quarter and Full Year 2004 Financial Results

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CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

YEARS ENDED DECEMBER 31,	2004			2003
(In thousands)
Cash flows from operating activities
Net income	$	106,650		$	64,017
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation		52,976			57,348
Deferred income taxes		51,197			20,569
Amortization of identifiable intangible assets		4,559			4,052
Bad debt expense		3,239			4,058
Reduction of income taxes paid due to the tax benefit from employee stock option exercises		3,233			—
Amortization of debt issuance costs		1,915			1,837
Debt extinguishment costs		—			11,777
Reversal of deferred tax asset valuation allowance relating to net operating losses		—			(10,249	)
Other changes in long-term assets and liabilities		3,607			1,359
Changes in current assets and liabilities, net of effects of business acquisitions
Accounts receivable		(16,006	)		(914	)
Accounts payable		(530	)		2,585
Accrued expenses		(2,510	)		(6,979	)
Income taxes payable		(4,039	)		3,314
Changes in other current assets and liabilities		(1,709	)		5,280
Net cash provided by operating activities		202,582			158,054
Cash flows from investing activities
Acquisition of available-for-sale investments		(242,661	)		(158,636	)
Proceeds from the sale of available-for-sale investments		176,948			10,898
Acquisition of property and equipment		(36,723	)		(35,347	)
Acquisition of businesses, net of cash acquired		(25,611	)		(5,496	)
Proceeds from the maturity of held-to-maturity investments		—			20,388
Other investing activities		46			309
Net cash used in investing activities		(128,001	)		(167,884	)
Cash flows from financing activities
Proceeds from the issuance of common stock		73,998			70,866
Debt issuance and exchange costs paid		(1,429	)		(7,965	)
Repayment of debt		—			(250,000	)
Proceeds from the issuance of long-term debt		—			265,000
Payment of debt premium		—			(7,142	)
Net cash provided by financing activities		72,569			70,759
Effects of exchange rate differences		3,144			3,024
Net increase in cash and cash equivalents		150,294			63,953
Cash and cash equivalents, beginning of period		140,058			76,105
Cash and cash equivalents, end of period	$	290,352		$	140,058