Getty Images Inc. burned through a third of its cash in the last three months of 2014 as declining earnings limit the Carlyle Group LP-controlled photo archiver’s ability to invest and curb its access to credit, according to two people with knowledge of the company’s finances.

Getty, which doesn’t publish its financials, told holders of its $2.46 billion of debt this week that it depleted a third of its cash during the last three months of 2014, leaving it with $27 million, said the people, who asked not to be identified because they weren’t authorized to speak about the private report. It had almost $41 million three months earlier.

“Their free-cash flow is challenged or muted by the high debt service and therefore they have to be prudent in their investments,” Carl Salas, an analyst at Moody’s Investors Service, said in a telephone interview. “They don’t have as much capacity as Moody’s would like to see for them to be more competitive” against rivals such as Shutterstock Inc., he said.

The announcement sent prices of the company’s debt tumbling.

Its term loan, due in October 2019, dropped 4 cents to a record-low 86.8 cents on the dollar, according to prices compiled by Bloomberg. Getty’s $550 million of unsecured 7 percent notes maturing in October 2020 have fallen 6.25 cents to 63.25 in the past two days and traded at a record-low 57.75 cents Tuesday, according to the Financial Industry Regulatory Authority’s Trace price-reporting system.

Earnings Decline

Sarah Lochting, a spokeswoman for Seattle-based Getty Images, declined to comment about the company’s performance, as did Randy Whitestone, a spokesman for Washington-based Carlyle.

The company’s fourth-quarter earnings before interest, taxes, depreciation and amortization, known as Ebitda, dropped 7 percent from a year earlier to $68.7 million, according to the people with knowledge of the Feb. 23 disclosure. Executives of the company also discussed the earnings on Tuesday with investors at an invitation-only conference in Miami hosted by JPMorgan Chase & Co.

The weak performance is squeezing Getty’s access to credit because of terms of its $1.9 billion loan that limit borrowing when debt is more than six times its Ebitda. That ratio was already eight times as of Sept. 30, according to a Dec. 16 Moody’s report.

The company can’t draw more than $30 million on its $150 million revolving credit line due October 2017 because doing so would run over the leverage test, Moody’s said in the report. Tripping the covenant would trigger a breach of its debt terms and risk a technical default.

Challenged Business

Getty Images took on almost $2.6 billion in debt to finance Carlyle’s $3.3 billion purchase of the business from Hellman & Friedman LLC in October 2012.

Carlyle’s Eliot Merrill, a managing director, said when his firm announced the purchase that it would “help take Getty Images to the next stage of product innovation and global growth.”

The company is a successor to Getty Communications Plc, which was controlled by the Getty family that made a fortune in the energy industry. It acquired PhotoDisc Inc. for $160 million in 1998 and changed its name. Hellman & Friedman bought the company for $2.1 billion a decade later.

Getty Images’s most challenging segment is its midstock business, which sells photographs to websites and small businesses, because of competition from companies including Shutterstock and Adobe System Inc.’s Fotolia LLC, Salas said. Profit from that business fell 17 percent in the fourth quarter, compared with the similar period last year, the people with knowledge of the financial results said.

Getty Images told its investors that it used up $2.3 million of free cash in the quarter, said the people. Free cash is money available to be reinvested in the business or for shareholder rewards such as dividends and stock buybacks.