Valassis Communications (VCI) 8-K Regulation FD Disclosure

®

Delivering Value to Consumers –

how, when and where they want

J.P. Morgan SMid

Cap Conference

December 5, 2008

Exhibit 99.1

2

®

Safe Harbor

Certain

statements

found

in

this

document

constitute

“forward-looking

statements”

within

the

meaning

of

the

Private

Securities

Litigation

Reform

Act

of

1995.

Such

forward-looking

statements

involve

known

and

unknown

risks

and

uncertainties

and

other

factors

which

may

cause

the

actual

results,

performance

or

achievements

of

the

Company

to

be

materially

different

from

any

future

results,

performance

or

achievements

expressed

or

implied

by

such

forward-looking

statements.

Such

factors

include,

among

others,

the

following:

price

competition

from

the

Company’s

existing

competitors;

new

competitors

in

any

of

the

Company’s

businesses;

a

shift

in

client

preference

for

different

promotional

materials,

strategies

or

coupon

delivery

methods,

including,

without

limitation,

as

a

result

of

declines

in

newspaper

circulation;

an

unforeseen

increase

in

the

Company’s

paper

or

postal

costs;

changes

which

affect

the

businesses

of

the

Company’s

clients

and

lead

to

reduced

sales

promotion

spending,

including,

without

limitation,

a

decrease

of

marketing

budgets

which

are

generally

discretionary

in

nature

and

easier

to

reduce

in

the

short-term

than

other

expenses;

the

Company’s

substantial

indebtedness,

and

ability

to

refinance

such

indebtedness,

if

necessary;

and

its

ability

to

incur

additional

indebtedness,

may

affect

the

Company’s

financial

health;

the

financial

condition

of

the

Company’s

clients,

suppliers

or

other

counterparties;

the

adverse

impact

of

the

ongoing

economic

downturn

on

the

marketing

expenditures

and

activities

of

the

Company’s

clients

and

prospective

clients;

the

Company’s

ability

to

comply

with

or

obtain

modifications

or

waivers

of

the

financial

covenants

contained

in

the

Company’s

debt

documents;

certain

covenants

in

the

Company’s

debt

documents

could

adversely

restrict

the

Company’s

financial

and

operating

flexibility;

fluctuations

in

the

amount,

timing,

pages,

weight

and

kinds

of

advertising

pieces

from

period

to

period,

due

to

a

change

in

the

Company’s

clients’

promotional

needs,

inventories

and

other

factors;

the

Company’s

failure

to

attract

and

retain

qualified

personnel

may

affect

its

business

and

results

of

operations;

a

rise

in

interest

rates

could

increase

the

Company’s

borrowing

costs;

the

outcome

of

ADVO’s

pending

shareholder

lawsuits;

possible

governmental

regulation

or

litigation

affecting

aspects

of

the

Company’s

business;

and

general

economic

conditions,

whether

nationally

or

in

the

market

areas

in

which

the

Company

conducts

its

business,

may

be

less

favorable

than

expected.

These

and

other

risks

and

uncertainties

related

to

the

Company’s

business

are

described

in

greater

detail

in

its

filings

with

the

United

States

Securities

and

Exchange

Commission,

including

the

Company’s

reports

on

Forms

10-K

and

10-Q

and

the

foregoing

information

should

be

read

in

conjunction

with

these

filings.

The

Company

disclaims

any

intention

or

obligation

to

update

or

revise

any

forward-looking

statements,

whether

as

a

result

of

new

information,

future

events

or

otherwise.

®

Client

Client

Relationships &

Relationships &

Value-oriented

Value-oriented

Content

Content

Valassis is one of the world leaders in delivering value-oriented

content to consumers…how, when and where they want.

As consumer preferences

change, we will repurpose

content to match their

preferences

Shared Mail

Free-standing

insert

(FSI)

-

Co-op

newspaper

inserts

Coupon and promotion clearing

European and Canadian media operations

Sweepstakes/security consulting

In-store partnerships

China: minority interest in point-of-sale marketing company

Direct mail sampling/advertising

Loyalty marketing software

Internet-delivered promotions

Preprinted inserts

On-page newspaper advertising (ROP)

Newspaper polybag sampling/advertising

Door hanger sampling/advertising (Direct-to-Door)

Shared mail wrap

Targeted inserts

Saturation mail

List services

MailCoups/Mail Marketing Systems, Inc. (MMSI)

Neighborhood Targeted

Market Delivered

International, Digital

Media & Services

$480.5M

$401.2M

$177.1M

$1,406.8M

2007 Revenue

2007 Total Revenue

$2,465.6M

*Includes ADVO Jan & Feb

‘07 pre-acquisition revenue.

$315.5M

$278.7M

$127.8M

$1,033.7M

YTD Revenue

(as of 9/30/08)

YTD Total Revenue

$1,755.7M

-2.7% vs. YTD 2007

The segments previously known as International and Services and Household Targeted were aggregated into one segment, International, Digital Media

and Services, due to their immateriality versus the remaining segments. Also as of Jan. 1, 2008, the ADVO Canada business previously accounted for in

the

Shared

Mail

segment

was

merged

into

Valassis

Canada

and

is

now

included

in

International,

Digital

Media

and

Services.

Prior

year

pro

forma

revenue has been reclassified here for comparison purposes.

+0.5% YTD vs. 2007

-6.7% YTD vs. 2007

-10.4% YTD vs. 2007

+0.7% YTD vs. 2007

5

®

Diversification -

2007

Revenue by Product

Revenue by Client

6

®

2009 Strategy

•

Successful management of 2009 Profit Maximization Plan

•

Improved execution of cross selling and new client

acquisition

•

Further adoption of Integrated Media Optimization

•

Marketers need to move product and consumers seek deals

–

Valassis products drive traffic and move product

–

We believe the current economic environment will have a more

permanent effect on consumer behavior

–

72% of consumers are using more coupons

1

–

Coupon usage has increased 46%

2

–

Comparison shopping with ad circulars has increased 26%

2

1

Prospectiv Study, August 2008

2

Big Research,

Consumer

Intentions

&

Actions

Survey,

October

2006

-

2008

7

®

Long-term Growth Strategy

•

Maintain and grow our core products and innovate with new

offerings

•

As newspaper coverage declines, migrate newspaper-

delivered content to Shared Mail and online

•

Value Proposition:

The only company to blend a one-of-a-

kind national shared mail network and newspaper

distribution

–

Leverage our proprietary targeting system (IMO) for effective  

media optimization

Execution = Long-term Profitable Revenue Growth

8

®

Assumptions

(1)

Flat to down

slightly

Down 6-7%

Down 6-7%

Revenue Assumption

2H 2009

vs.

2H 2008

1H 2009

vs.

1H 2008

2H 2008

vs.

2H 2007

$215.0 million

$219.3 million

$65.0 million

Adjusted EBITDA

(2)

Assumption

2009**

2008

4Q 2008*

(1)

These assumptions by management are based on the current economic environment and the volatility in the marketplace may effect

future performance.

(2)

Important information regarding operating results and reconciliations of non-GAAP financial measures to the most comparable GAAP

measures may

be

found

in

the

“Reconciliation

of

Non-GAAP

measures”

on

slide

21.

**Provides a minimum covenant cushion of approximately 20% rising to nearly 30% by December 31, 2009.

*Does not

include

$4

million

of

one-time

costs

associated

with

the

implementation

of

the

2009

Profit

Maximization

Plan.

9

2009 Profit Maximization Plan

2008 acquisition cost synergies are on track to meet our target of $38 million

$57.5 million

Total Profit Maximization Plan

$25.0 million

26.0 million

6.5 million

SG&A Reductions

Production Cost Savings

Underperforming Businesses

Note:

The $11 million of additional acquisition cost synergies projected for 2009 compared to 2008

($49M vs. $38M) is included in the profit maximization plan.

10

®

Capital Structure

($ in millions)

Cash and equivalents                                            

$147.6

Senior Secured Debt:

Senior Notes

$100.0

6-5/8%

1/15/2009

fixed rate

Senior

Secured

Credit

Facility

–

fixed

portion

480.0

6.80%

3/31/2014

swaps expire 12/31/10

Senior

Secured

Credit

Facility

–

floating

portion

132.3                4.04%

(1)

3/31/2014 

LIBOR

+175

Senior Convertible Notes

.1

1-5/8%

5/22/2033

fixed rate

Senior

Secured

Revolving

Credit

Facility

–

$120mm

(2)

0.0

4.54%

(1)

3/31/2012

LIBOR

+225

Total Secured Debt

$712.3

Senior Unsecured Notes

540.0

8-1/4%

3/31/2015

fixed rate

Total Debt

$1,252.3

Total Net Debt

$1,104.7

Current Market Capitalization

$70.9

47.88 mm shares at 11/28/08

Total Capitalization

$1,175.6

As of

9/30/08

Rate

Due

Comments

closing price of $1.48

(1) Based on three-month LIBOR as of 11/7/08 of 2.29% plus spread.

(2) $120 million less approximately $10.5 million in letters of credit is current available credit.

11

®

Covenant Analysis

As of 9/30/08

Consolidated Senior Secured Leverage Ratio:

Senior Secured Debt

$712.3

Adjusted

EBITDA

(LTM)

(1)

$223.9

Covenant

Ratio

Level

(2)

4.00x

Consolidated Senior Secured Leverage Ratio

3.18x

Test

Pass

Covenant EBITDA Cushion %

20.5%

Consolidated Interest Coverage Ratio:

As of 9/30/08

Consolidated Interest Expense (LTM)

$92.5

Adjusted

EBITDA

(LTM)

(1)

$223.9

Covenant

Ratio

Level

(3)

1.60x

Consolidated Interest Coverage Ratio

2.42x

Test

Pass

Covenant EBITDA Cushion %

33.9%

(1) Calculated pursuant to the terms of the senior secured credit facility for the trailing twelve-month period ended September 30, 2008.  Adjusted EBITDA

under the senior secured credit facility is calculated differently than the Company’s publicly disclosed Adjusted EBITDA because the senior

secured

credit

facility

definition

does

not

permit

certain

adjustments

the

Company

has

included

in

its

publicly

disclosed

Adjusted

EBITDA.

(2) Ratio decreases to 3.75x on Dec. 31, 2008.

(3) Ratio increases to 1.75x on Dec. 31, 2008.

($ in millions)

12

®

Why Invest in Valassis?

•

Consumer demand for value-oriented media

•

Value proposition

–

shared mail and newspaper blended solution

–

one-of-a-kind shared mail distribution

–

long-term newspaper coverage declines = shift to shared mail

(improved margins)

•

Cross-sell opportunity

–

extensive product portfolio

–

expansive client base

•

Outperforming print media peers

•

Capital structure

•

Cash flow

•

Experienced, results-oriented management team

®

Questions

®

Appendix

We have relationships with more than 15,000 advertisers worldwide in various industries.

“Blue Chip”

Client Base

16

®

Unique Value Proposition

Mail

Shared Mail

Loyalty Mail

Newspaper

Preprinted Inserts             

Run of Press                     

Polybag/Sampling              

Co-op FSI

Direct-to-Door

Internet

(Value-oriented Content)              

In Store

In Aisle

Perimeter                           

Point-of-Sale (POS)

Ad

Agencies

Large Metro

Newspapers

We

offer

the

only

industry

turnkey

solution

including

targeting,

media

optimization

and

placement,

printing

and

back-end

analytics.

Distribution Channel

®

Strong Execution Dictates Success –

Elasticity Within Ad Recession

Sources:

Industry Ad Spend, TNS 2007

Valassis Revenue, Internal Tracking

2001 Ad Recession

Industry:  -3.2%

Valassis:  +1.0%

$0

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

$140,000

$160,000

1998

1999

2000

2001

2002

2003

2004

2005

2006

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

Industry Ad Spending Total (millions)

Valassis

Revenue (millions)

18

®

Media Multiples Have Been Significantly Constricted

Over the Last Five Quarters

Source:  Wall Street research

Note:  FV data as of 10/09/08

Cable: VIA, DISCA, SNI

Outdoor: CCO, LAMR

Radio: CCU, CXR, CDL, ETM, CMLS, ROIA, EMMS, SBSA

TV: HTV, SBGI, BLC, TVL, GTN, CBS

Newspaper: GCI, NYT, MNI, MEG, LEE, SSP, AHC

Interactive: GOOG, YHOO, IACI

* Interactive Multiple based on EV / EBITDA

13.0x

14.4x

11.2x

12.7x

8.1x

8.4x

6.3x

5.3x

3.8x

7.6x

29.9x

13.6x

Cable

Outdoor

Radio

TV

Newspapers

Interactive*

July '07 FV/EBITDA

Oct '08 FV/EBITDA

19

®

Valassis Outperforming the Print Media Industry in 2008

Print Media includes: Media General, McClatchy, Harte-

Hanks, RH Donnelley, New York Times, Gannett,

Meredith, Washington Post, News Corp. and Vertis

-8.4%

-2.7%

-10.9%

-6.2%

-8.9%

2.1%

-2.8%

-7.2%

-12%

-8%

-4%

0%

4%

Q1

'08

Q2

'08

Q3

'08

YTD

'08

Print Media

Valassis

20

®

Net Earnings to Adjusted EBITDA and Cash Flow

from Operations

($ in millions)

Three Months Ended

Nine Months Ended

9/30/2008

9/30/2008

Net

Earnings

(loss)

-

GAAP

(5.2)

$                 

14.5

$                  

plus:Income taxes

(3.7)

9.1

Interest and other expense, net

23.3

67.8

Depreciation and amortization

17.4

52.2

EBITDA

31.8

$                

143.6

$              

Stock-based compensation expense (SFAS No. 123R)

1.9

5.4

Amortization of customer contract incentive

-

2.4

Restructuring costs

1.4

2.9

Adjusted EBITDA

35.1

$                

154.3

$              

Interest and other expense, net

(23.3)

(67.8)

Income taxes

3.7

(9.1)

Restructuring costs, cash

(0.4)

(1.9)

Changes in operating assets and liabilities

(31.4)

(10.8)

Cash Flow from Operations

(16.3)

$              

64.7

$                  

21

®

Reconciliation of Non-GAAP Measures

($ in millions)

Reconciliation of Net Earnings to Company Publicly Disclosed Projected Adjusted EBITDA

4Q 2008

2008

2009

Net Earnings

13.4

$      

27.9

$      

36.2

$      

plus:

Income taxes

8.5

17.6

23.1

Interest and other expense, net

22.6

90.4

82.0

Depreciation and amortization

18.0

70.2

65.0

EBITDA

62.5

$      

206.1

$    

206.3

$    

plus:

FAS123r expense

2.1

7.5

8.7

Contract incentive amortization

-

2.4

-

Restructuring Costs

0.4

3.3

-

Company Publicly Disclosed Projected Adjusted EBITDA

65.0

$      

219.3

$    

215.0

$    

22

®

Reconciliation of Non-GAAP Measures

(cont’d)

*We

define

adjusted

EBITDA

as

earnings

before

net

interest

and

other

expenses,

income

taxes,

depreciation,

amortization,

stock-based

compensation

expense

associated

with

SFAS

No.

123R

and

amortization

of

a

client

contract

incentive.

We

define

adjusted

cash

EPS

as

net

earnings

plus

depreciation,

amortization,

stock-based

compensation

expense

associated

with

SFAS

No.

123R

and

amortization

of

a

client

contract

incentive,

less

capital

expenditures,

divided

by

weighted

shares

outstanding.

We

define

adjusted

cash

flow

as

earnings

before

depreciation,

amortization,

stock-based

compensation

expense

and

amortization

of

a

client

contract

incentive

less

capital

expenditures.

Adjusted

EBITDA,

adjusted

cash

EPS

and

adjusted

cash

flow

are

non-GAAP

financial

measures

commonly

used

by

financial

analysts,

investors,

rating

agencies

and

other

interested

parties

in

evaluating

companies,

including

marketing

services

companies.

Accordingly,

management

believes

that

adjusted

EBITDA,

adjusted

cash

EPS

and

adjusted

cash

flow

may

be

useful

in

assessing

our

operating

performance

and

our

ability

to

meet

our

debt

service

requirements.

In

addition,

adjusted

EBITDA

is

used

by

management

to

measure

and

analyze

our

operating

performance

and,

along

with

other

data,

as

our

internal

measure

for

setting

annual

operating

budgets,

assessing

financial

performance

of

business

segments

and

as

a

performance

criteria

for

incentive

compensation.

However,

these

non-GAAP

financial

measures

have

limitations

as

analytical

tools

and

should

not

be

considered

in

isolation

from,

or

as

an

alternative

to,

operating

income,

cash

flow

or

other

income

or

cash

flow

data

prepared

in

accordance

with

GAAP.

Some

of

these

limitations

are:

•

adjusted

EBITDA

does

not

reflect

our

cash

expenditures

for

capital

equipment

or

other

contractual

commitments;

•

although

depreciation

and

amortization

are

non-cash

charges,

the

assets

being

depreciated

or

amortized

may

have

to

be

replaced

in

the

future,

and

adjusted

EBITDA

does

not

reflect

cash

capital

expenditure

requirements

for

such

replacements;

•

adjusted

EBITDA

does

not

reflect

changes

in,

or

cash

requirements

for,

our

working

capital

needs;

•

adjusted

EBITDA

does

not

reflect

the

significant

interest

expense

or

the

cash

requirements

necessary

to

service

interest

or

principal

payments

on

our  

indebtedness;

•

adjusted

EBITDA

does

not

reflect

income

tax

expense

or

the

cash

necessary

to

pay

income

taxes;

•

adjusted

EBITDA

does

not

reflect

the

impact

of

earnings

or

charges

resulting

from

matters

we

consider

not

to

be

indicative

of

our

ongoing

operations;

•

management

believes

adjusted

cash

EPS

is

also

a

relevant

measure

of

the

performance

of

the

business

in

addition

to

GAAP

EPS.

The

primary

reason

for

this

is

because

depreciation

and

amortization

charged

against

earnings

to

calculate

GAAP

EPS

are

expected

to

be

in

excess

of

capital

expenditures

by

approximately

$44.2

million

in

2008;

•

adjusted

cash

flow

does

not

reflect

the

residual

cash

flow

available

for

discretionary

expenditures

since

certain

non-discretionary

expenditures

are

not

deducted

from

the

measure;

•

other

companies,

including

companies

in

our

industry,

may

calculate

these

measures

differently

and

as

the

number

of

differences

in

the

way

two

different

companies

calculate

these

measures

increases,

the

degree

of

their

usefulness

as

a

comparative

measure

correspondingly

decreases.

Because

of

these

limitations,

adjusted

EBITDA,

adjusted

cash

EPS

and

adjusted

cash

flow

should

not

be

considered

as

measures

of            

discretionary

cash

available

to

us

to

invest

in

the

growth

of

our

business

or

reduce

indebtedness.

We

compensate

for

these

limitations

by                

relying

primarily

on

our

GAAP

results

and

using

these

non-GAAP

financial

measures

only

supplementally.

Further

important

information           

regarding

operating

results

and

reconciliations

of

these

non-GAAP

financial

measures

to

the

most

comparable

GAAP

measures

can

be                      

found

below.