10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_______________________________________

FORM 10-Q

_______________________________________

(Mark One)

x Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the Quarterly Period Ended March 31, 2012

¨ Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Commission File Number: 1-10991

_______________________________________

VALASSIS COMMUNICATIONS, INC.

(Exact Name of Registrant as Specified in its Charter)

_______________________________________

Delaware	38-2760940
(State or Other Jurisdiction of Incorporation or Organization)	(IRS Employer Identification Number)

19975 Victor Parkway

Livonia, Michigan 48152

(Address of Principal Executive Offices)

Registrant’s Telephone Number: (734) 591-3000

_______________________________________

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 12 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 90 days:    Yes  x   No  o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files):     Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act (check one):

Large accelerated filer	x		Accelerated filer	o
Non-accelerated filer	o	(Do not check if a smaller reporting company)	Smaller reporting company	o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act):    Yes  ¨    No  x

As of May 1, 2012 there were 42,759,940 shares of the Registrant’s Common Stock outstanding.

VALASSIS COMMUNICATIONS, INC.

Index to Quarterly Report on Form 10-Q

Quarter Ended March 31, 2012

		Page
	PART I – FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)
	Condensed Consolidated Balance Sheets at March 31, 2012 and December 31, 2011	1
	Condensed Consolidated Statements of Income for the Three Months Ended March 31, 2012 and 2011	2
	Condensed Consolidated Statements of Comprehensive Income for the Three Months Ended March 31, 2012 and 2011	3
	Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2012 and 2011	4
	Notes to Condensed Consolidated Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	31
Item 4.	Controls and Procedures	32
	PART II – OTHER INFORMATION
Item 1.	Legal Proceedings	32
Item 1A.	Risk Factors	32
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	33
Item 3.	Defaults Upon Senior Securities	33
Item 4.	Mine Safety Disclosures	33
Item 5.	Other Information	33
Item 6.	Exhibits	34
Signature		35

PART I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

VALASSIS COMMUNICATIONS, INC.

Condensed Consolidated Balance Sheets

(U.S. dollars in thousands)

(unaudited)

	March 31, 2012			December 31, 2011
Assets
Current assets:
Cash and cash equivalents	$	107,199		$	101,971
Accounts receivable, net (Note 1)	417,010			448,320
Inventories (Note 1)	33,936			41,120
Prepaid expenses and other	26,853			37,655
Total current assets	584,998			629,066
Property, plant and equipment, net (Note 1)	146,689			148,905
Goodwill (Note 2)	636,471			636,471
Other intangible assets, net (Note 2)	210,457			213,613
Other assets	15,062			16,392
Total assets	$	1,593,677		$	1,644,447
Liabilities and Stockholders’ Equity
Current liabilities:
Current portion long-term debt (Note 3)	$	15,000		$	15,000
Accounts payable	281,873			334,378
Progress billings	44,131			39,975
Accrued expenses (Note 4)	65,291			98,409
Total current liabilities	406,295			487,762
Long-term debt (Note 3)	583,810			587,560
Deferred income taxes	67,154			67,404
Other non-current liabilities	52,264			52,187
Total liabilities	1,109,523			1,194,913
Commitments and contingencies (Note 5)
Stockholders’ equity:
Preferred stock ($0.01 par value; 25,000,000 shares authorized; no shares issued or outstanding at March 31, 2012 and December 31, 2011)	—			—
Common stock ($0.01 par value; 100,000,000 shares authorized; 65,394,999 and 65,398,539 shares issued at March 31, 2012 and December 31, 2011, respectively; 42,904,300 and 42,347,368 shares outstanding at March 31, 2012 and December 31, 2011, respectively)	654			654
Additional paid-in capital	113,577			123,881
Retained earnings	1,047,987			1,021,566
Accumulated other comprehensive income	2,721			2,775
Treasury stock, at cost (22,490,699 and 23,051,171 shares at March 31, 2012 and December 31, 2011, respectively	(680,785		)	(699,342		)
Total stockholders’ equity	484,154			449,534
Total liabilities and stockholders’ equity	$	1,593,677		$	1,644,447

See accompanying notes to condensed consolidated financial statements.

1

VALASSIS COMMUNICATIONS, INC.

Condensed Consolidated Statements of Income

(U.S. dollars in thousands, except per share data)

(unaudited)

	Three Months Ended
	March 31,
	2012			2011
Revenues	$	518,585		$	546,979
Costs and expenses:
Cost of sales	388,894			408,577
Selling, general and administrative	77,617			78,427
Amortization expense	3,156			3,156
Total costs and expenses	469,667			490,160
Earnings from operations	48,918			56,819
Other expenses and income:
Interest expense	7,054			9,775
Interest income	(58		)	(139		)
Loss on extinguishment of debt (Note 3)	—			13,352
Other income, net	(697		)	(876		)
Total other expenses, net	6,299			22,112
Earnings before income taxes	42,619			34,707
Income tax expense (Note 1)	16,198			13,296
Net earnings	$	26,421		$	21,411
Net earnings per common share, basic (Note 7)	$	0.63		$	0.43
Net earnings per common share, diluted (Note 7)	$	0.60		$	0.41
Weighted-average common shares outstanding, basic (Note 7)	42,114			49,929
Weighted-average common shares outstanding, diluted (Note 7)	44,045			52,333

See accompanying notes to condensed consolidated financial statements.

2

VALASSIS COMMUNICATIONS, INC.

Condensed Consolidated Statements of Comprehensive Income

(U.S. dollars in thousands)

(unaudited)

	Three Months Ended
	March 31,
	2012			2011
Net earnings	$	26,421		$	21,411
Other comprehensive income, net of tax:
Unrealized changes in fair value of cash flow hedges	(404		)	(137		)
Unrealized changes in fair value of available-for-sale securities	—			(150		)
Realized losses on cash flow hedges reclassified from AOCI into earnings	—			779
Foreign currency translation adjustment	350			865
Total other comprehensive income (loss)	$	(54	)	$	1,357
Comprehensive income	$	26,367		$	22,768

See accompanying notes to condensed consolidated financial statements.

3

VALASSIS COMMUNICATIONS, INC.

Condensed Consolidated Statements of Cash Flows

(U.S. dollars in thousands)

(unaudited)

	Three Months Ended
	March 31,
	2012			2011
Cash flows from operating activities:
Net earnings	$	26,421		$	21,411
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization	14,710			15,729
Amortization of debt issuance costs	518			478
Provision for losses on accounts receivable	543			931
Loss on extinguishment of debt	—			2,782
Gain (loss) on derivatives, net	(178		)	1,076
(Gain) loss on sale of property, plant and equipment	(79		)	40
Stock-based compensation expense	2,287			1,912
Deferred income taxes	1,004			1,944
Changes in assets and liabilities:
Accounts receivable, net	30,767			53,429
Inventories	7,184			2,334
Prepaid expenses and other	10,939			1,351
Other assets	873			(1,352		)
Accounts payable	(52,505		)	(43,914		)
Progress billings	4,156			(7,255		)
Accrued expenses	(31,629		)	(30,610		)
Other non-current liabilities	(637		)	(2,320		)
Total adjustments	(12,047		)	(3,445		)
Net cash provided by operating activities	14,374			17,966
Cash flows from investing activities:
Additions to property, plant and equipment	(9,265		)	(5,024		)
Proceeds from sale of property, plant and equipment	79			20
Proceeds from sale of available-for-sale securities	—			1,494
Net cash used in investing activities	(9,186		)	(3,510		)
Cash flows from financing activities:
Borrowings of long-term debt	—			260,000
Repayments of long-term debt	(3,750		)	(243,989		)
Debt issuance costs	—			(4,880		)
Repurchases of common stock	(1,366		)	(45,530		)
Proceeds from issuance of common stock	5,685			3,133
Net cash provided by (used in) financing activities	569			(31,266		)
Effect of exchange rate changes on cash and cash equivalents	(529		)	1,066
Net increase (decrease) in cash and cash equivalents	5,228			(15,744		)
Cash and cash equivalents at beginning of period	101,971			245,935
Cash and cash equivalents at end of period	$	107,199		$	230,191
Supplemental disclosure of cash flow information:
Cash paid during the period for interest	$	11,192		$	12,819
Cash paid during the period for income taxes	$	7,630		$	8,445
Non-cash financing activities:
Stock issued under stock-based compensation plans	$	—		$	1,193

See accompanying notes to condensed consolidated financial statements.

4

VALASSIS COMMUNICATIONS, INC.

Notes to Condensed Consolidated Financial Statements

(unaudited)

1. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP principles for complete financial statements. In the opinion of management, the information contained herein reflects all adjustments necessary for a fair presentation of the information presented. All such adjustments are of a normal recurring nature. The results of operations for the interim periods are not necessarily indicative of results to be expected for the fiscal year. For further information, refer to the consolidated financial statements and footnotes thereto included in the Valassis Communications, Inc. (“Valassis,” “we,” and “our”) Annual Report on Form 10-K for the year ended December 31, 2011 (the “2011 Form 10-K”).

Significant Accounting Policies

Accounts Receivable

The allowance for doubtful accounts was $7.3 million and $6.9 million as of March 31, 2012 and December 31, 2011, respectively.

Income Taxes

We are required to adjust our effective tax rate each quarter to be consistent with our estimated annual effective tax rate. We are also required to record the tax impact of certain unusual or infrequently occurring items, including the effects of changes in tax laws or rates, in the interim period in which they occur. The effective tax rate during a particular quarter may be higher or lower as a result of the timing of actual earnings versus annual projections.

Inventories

Inventories are accounted for at the lower of cost, determined on a first in, first out (“FIFO”) basis, or market. Inventories included on the condensed consolidated balance sheets consisted of:

(in thousands of U.S. dollars)	March 31, 2012		December 31, 2011
Raw materials	$	24,935	$	28,075
Work in progress	9,001		13,045
Inventories	$	33,936	$	41,120

Property, Plant and Equipment

The following table summarizes the costs and ranges of useful lives of the major classes of property, plant and equipment and the total accumulated depreciation related to property, plant and equipment, net included on the condensed consolidated balance sheets:

	Useful Lives	March 31, 2012			December 31, 2011
	(in years)	(in thousands of U.S. dollars)
Land, at cost	N/A	$	7,186		$	7,167
Buildings, at cost	10 - 30	37,793			37,511
Machinery and equipment, at cost	3 - 20	225,175			217,764
Office furniture and equipment, at cost	3 - 10	238,512			236,994
Leasehold improvements, at cost	5 - 10	28,672			28,563
		537,338			527,999
Less accumulated depreciation		(390,649		)	(379,094		)
Property, plant and equipment, net		$	146,689		$	148,905

5

VALASSIS COMMUNICATIONS, INC.

Notes to Condensed Consolidated Financial Statements

(unaudited)

2. GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill included on the condensed consolidated balance sheets consisted of:

(in thousands of U.S. dollars)	March 31, 2012		December 31, 2011
Shared Mail	$	534,184	$	534,184
Neighborhood Targeted	5,325		5,325
Free-standing Inserts	22,357		22,357
International, Digital Media & Services	74,605		74,605
Goodwill	$	636,471	$	636,471

The components of other intangible assets, net included on the condensed consolidated balance sheets consisted of:

	March 31, 2012								December 31, 2011
(in thousands of U.S. dollars)	Gross Amount		Accumulated Amortization			Net Amount		Weighted Average Remaining Useful Life (in years)	Gross Amount		Accumulated Amortization			Net Amount		Weighted Average Remaining Useful Life (in years)
Finite-lived intangible assets:
Mailing lists, non compete agreements and other	$	40,457	$	(10,399	)	$	30,058	14.9	$	40,457	$	(9,894	)	$	30,563	15.1
Customer relationships	140,000		(47,242		)	92,758		8.7	140,000		(44,591		)	95,409		9.0
Total	$	180,457	(57,641		)	122,816			$	180,457	(54,485		)	125,972
Indefinite-lived intangible assets:
Valassis name, tradenames, trademarks and other						87,641								87,641
Other intangible assets, net						$	210,457							$	213,613

3. LONG-TERM DEBT

Long-term debt included on the condensed consolidated balance sheets consisted of:

(in thousands of U.S. dollars)	March 31, 2012		December 31, 2011
Senior Secured Revolving Credit Facility	$	50,000	$	50,000
Senior Secured Term Loan A	288,750		292,500
Senior Secured Convertible Notes due 2033, net of discount	60		60
6 5/8% Senior Notes due 2021	260,000		260,000
Total debt	598,810		602,560
Current portion long-term debt	15,000		15,000
Long-term debt	$	583,810	$	587,560

Senior Secured Credit Facility

General

On June 27, 2011, we entered into a senior secured credit facility with JPMorgan Chase Bank, N.A., as administrative agent, and a syndicate of lenders jointly arranged by J.P. Morgan Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated and RBS Securities Inc. (the “Senior Secured Credit Facility”). The Senior Secured Credit Facility and related loan documents replaced and terminated our prior credit agreement, dated as of March 2, 2007, as amended (the “Prior Senior Secured Credit Facility”), by and among Valassis, Bear Stearns Corporate Lending Inc., as Administrative Agent, and a syndicate of lenders jointly arranged by Bear, Stearns & Co. Inc. and Banc of America Securities LLC. In connection with the termination of the

6

VALASSIS COMMUNICATIONS, INC.

Notes to Condensed Consolidated Financial Statements

(unaudited)

Prior Senior Secured Credit Facility, all obligations and rights under the related guarantee, security and collateral agency agreement, dated as of March 2, 2007, as amended (the “Prior Security Agreement”), by Valassis and certain of its domestic subsidiaries signatory thereto, as grantors, in favor of Bear Stearns Corporate Lending Inc., in its capacity as collateral agent for the benefit of the Secured Parties (as defined in the Prior Security Agreement), were also simultaneously terminated.

The Senior Secured Credit Facility consists of:

• a five-year term loan A in an aggregate principal amount equal to $300.0 million, with principal repayable in quarterly installments at a rate of 5.0% during each of the first two years from issuance, 10.0% during the third year from issuance, 15.0% during the fourth year from issuance and 11.25% during the fifth year from issuance, with the remaining 53.75% due at maturity (the “Term Loan A”);

• a five-year revolving credit facility in an aggregate principal amount of $100.0 million (the “Revolving Line of Credit”), including $15.0 million available in Euros, Pounds Sterling or Canadian Dollars, $50.0 million available for letters of credit and a $20.0 million swingline loan subfacility, of which $50.0 million was drawn at closing and remains outstanding as of March 31, 2012 (exclusive of outstanding letters of credit described below); and

• an incremental facility pursuant to which, prior to the maturity of the Senior Secured Credit Facility, we may incur additional indebtedness in an amount up to $150.0 million under the Revolving Line of Credit or the Term Loan A or a combination thereof, subject to certain conditions, including receipt of additional lending commitments for such additional indebtedness. The terms of the incremental facility will be substantially similar to the terms of the Senior Secured Credit Facility, except with respect to the pricing of the incremental facility, the interest rate for which could be higher than that for the Revolving Line of Credit and the Term Loan A.

We used the initial borrowing under the Revolving Line of Credit, the proceeds from the Term Loan A and existing cash of $120.0 million to repay the $462.2 million outstanding under our Prior Senior Secured Credit Facility (reflecting all outstanding borrowings thereunder), to pay accrued interest with respect to such loans and to pay the fees and expenses related to the Senior Secured Credit Facility.

All borrowings under our Senior Secured Credit Facility, including, without limitation, amounts drawn under the Revolving Line of Credit, are subject to the satisfaction of customary conditions, including absence of a default and accuracy of representations and warranties. As of March 31, 2012, we had approximately $40.1 million available under the Revolving Line of Credit portion of our Senior Secured Credit Facility (after giving effect to the reductions in availability pursuant to $9.9 million in standby letters of credit outstanding as of March 31, 2012).

Interest and Fees

Borrowings under our Senior Secured Credit Facility bear interest, at our option, at either the alternate base rate (defined as the higher of the prime rate announced by the Administrative Agent, the federal funds effective rate or one-month LIBOR, in each case, plus an applicable interest rate margin) (the “Base Rate”) or at the Eurodollar Rate (one-, two-, three- or six-month LIBOR, at our election, as defined in the credit agreement governing the Senior Secured Credit Facility), except for borrowings made in alternate currencies which may not accrue interest based upon the alternate base rate, in each case, plus an applicable interest rate margin. The applicable margins are currently 0.75% per annum for Base Rate loans and 1.75% per annum for Eurodollar Rate loans. The margins applicable to the borrowings under our Senior Secured Credit Facility may be adjusted based on our consolidated leverage ratio, with 1.00% being the maximum Base Rate margin and 2.00% being the maximum Eurodollar Rate. See Note 7, Derivative Financial Instruments and Fair Value Measurements, for discussion regarding our various interest rate swap agreements.

Guarantees and Security

Our Senior Secured Credit Facility is guaranteed by certain of our existing and future domestic restricted subsidiaries pursuant to a Guarantee and Collateral Agreement. In addition, our obligations under our Senior Secured Credit Facility and the guarantee obligations of the subsidiary guarantors are secured by first priority liens on substantially all of our and our subsidiary guarantors’ present and future assets and by a pledge of all of the equity interests in our domestic subsidiary guarantors and 65% of the capital stock of certain of our existing and future foreign subsidiaries.

The Guarantee and Collateral Agreement also secures our Senior Secured Convertible Notes due 2033 on an equal and ratable basis with the indebtedness under our Senior Secured Credit Facility to the extent required by the indenture governing such notes.

7

VALASSIS COMMUNICATIONS, INC.

Notes to Condensed Consolidated Financial Statements

(unaudited)

Prepayments

The Senior Secured Credit Facility also contains a requirement that we make mandatory principal prepayments on the Term Loan A and Revolving Line of Credit in certain circumstances, including, without limitation, with 100% of the aggregate net cash proceeds from certain asset sales, casualty events or condemnation recoveries (in each case, to the extent not otherwise used for reinvestment in our business or related business and subject to certain other exceptions). The Senior Secured Credit Facility further provides that, subject to customary notice and minimum amount conditions, we may make voluntary prepayments without payment of premium or penalty.

Covenants

Subject to customary and otherwise agreed upon exceptions, our Senior Secured Credit Facility contains affirmative and negative covenants, including, but not limited to:

• the payment of other obligations;

• the maintenance of organizational existences, including, but not limited to, maintaining our property and insurance;

• compliance with all material contractual obligations and requirements of law;

• limitations on the incurrence of indebtedness;

• limitations on creation and existence of liens;

• limitations on certain fundamental changes to our corporate structure and nature of our business, including mergers;

• limitations on asset sales;

• limitations on restricted payments, including certain dividends and stock repurchases and redemptions;

• limitations on capital expenditures;

• limitations on any investments, provided that certain “permitted acquisitions” and strategic investments are allowed;

• limitations on optional prepayments and modifications of certain debt instruments;

• limitations on modifications to organizational documents;

• limitations on transactions with affiliates;

• limitations on entering into certain swap agreements;

• limitations on negative pledge clauses or clauses restricting subsidiary distributions;

• limitations on sale-leaseback and other lease transactions; and

• limitations on changes to our fiscal year.

Our Senior Secured Credit Facility also requires us to comply with:

• a maximum consolidated leverage ratio, as defined in our Senior Secured Credit Facility (generally, the ratio of our consolidated total debt to consolidated earnings before interest, taxes, depreciation and amortization, or EBITDA, for the most recent four quarters), of 3.50:1.00; and

• a minimum consolidated interest coverage ratio, as defined in our Senior Secured Credit Facility (generally, the ratio of our consolidated EBITDA to consolidated interest expense for the most recent four quarters), of 3.00:1.00.

The following table shows the required and actual financial ratios under our Senior Secured Credit Facility as of March 31, 2012:

	Required Ratio	Actual Ratio
Maximum consolidated leverage ratio	No greater than 3.50:1.00	1.92:1.00
Minimum consolidated interest coverage ratio	No less than 3.00:1.00	10.58:1.00

In addition, we are required to give notice to the administrative agent and the lenders under our Senior Secured Credit Facility of defaults under the facility documentation and other material events, make any new wholly-owned domestic subsidiary (other than an immaterial subsidiary) a subsidiary guarantor and pledge substantially all after-acquired property as collateral to secure our and our subsidiary guarantors’ obligations in respect of the facility.

8

VALASSIS COMMUNICATIONS, INC.

Notes to Condensed Consolidated Financial Statements

(unaudited)

Events of Default

Our Senior Secured Credit Facility contains customary events of default, including upon a change in control. If such an event of default occurs, the lenders under our Senior Secured Credit Facility would be entitled to take various actions, including in certain circumstances increasing the effective interest rate and accelerating the amounts due under our Senior Secured Credit Facility.

8 ¹/4% Senior Notes due 2015

On January 13, 2011, we commenced a cash tender offer and consent solicitation to purchase any and all of our outstanding 8 ¹/4% Senior Notes due 2015 (the “2015 Notes”) and to amend the indenture governing the 2015 Notes (the "2015 Indenture") to eliminate substantially all of the restrictive covenants and certain events of default. We used the net proceeds from the 2021 Notes (described below) to fund the purchase of the 2015 Notes, the related consent payments pursuant to the tender offer and consent solicitation, and the subsequent redemption of the 2015 Notes that were not tendered and remained outstanding after the expiration of the tender offer and consent solicitation. We recognized a pre-tax loss on extinguishment of debt of $13.4 million during the three months ended March 31, 2011, which represents the difference between the aggregate purchase price and the aggregate principal amount of the 2015 Notes purchased and the write-off of related capitalized debt issuance costs.

6 ⁵/8% Senior Notes due 2021

On January 28, 2011, we issued in a private placement $260.0 million aggregate principal amount of our 6 ⁵/8% Senior Notes due 2021 (the “2021 Notes”). The net proceeds were used to fund the purchase of the outstanding 2015 Notes and the related consent payments in a concurrent tender offer and consent solicitation as described above and the redemption of the remaining outstanding 2015 Notes. We capitalized related debt issuance costs of approximately $5.1 million, which are being amortized over the term of the 2021 Notes.

Interest on the 2021 Notes is payable every six months on February 1 and August 1. The 2021 Notes are fully and unconditionally guaranteed, jointly and severally, by substantially all of our existing and future domestic restricted subsidiaries on a senior unsecured basis.

In July 2011, in accordance with the terms of the registration rights agreement between us and the initial purchasers of the 2021 Notes, we completed an exchange offer to exchange the original notes issued in the private placement for a like principal amount of exchange notes registered under the Securities Act of 1933, as amended. An aggregate principal amount of $260.0 million, or 100%, of the original notes were exchanged for exchange notes in the exchange offer. The exchange notes are substantially identical to the original notes, except that the exchange notes are not subject to certain transfer restrictions.

The 2021 Notes were issued under an indenture with Wells Fargo Bank, National Association, as trustee (the “2021 Indenture”). Subject to a number of exceptions, the 2021 Indenture restricts our ability and the ability of our restricted subsidiaries (as defined in the 2021 Indenture) to incur or guarantee additional indebtedness, transfer or sell assets, make certain investments, pay dividends or make distributions or other restricted payments, create certain liens, merge or consolidate, repurchase stock, create or permit restrictions on the ability of our restricted subsidiaries to pay dividends or make other distributions to us and enter into transactions with affiliates.

We may redeem all or a portion of the 2021 Notes at our option at any time prior to February 1, 2016, at a redemption price equal to 100% of the principal amount of 2021 Notes to be redeemed, plus a make-whole premium as described in the 2021 Indenture, plus accrued and unpaid interest to the redemption date, if any. At any time on or after February 1, 2016, we may redeem all or a portion of the 2021 Notes at our option at the following redemption prices (expressed as percentages of the principal amount thereof) if redeemed during the twelve-month period commencing on February 1 of the years set forth below:

Year	Percentage
2016	103.313%
2017	102.208%
2018	101.104%
2019 and thereafter	100.000%

9

VALASSIS COMMUNICATIONS, INC.

Notes to Condensed Consolidated Financial Statements

(unaudited)

In addition, we must pay accrued and unpaid interest to the redemption date, if any. On or prior to February 1, 2014, we may also redeem at our option up to 35% of the principal amount of the outstanding 2021 Notes with the proceeds of certain equity offerings at the redemption price specified in the 2021 Indenture, plus accrued and unpaid interest to the date of redemption, if any. Upon the occurrence of a change of control, as defined in the 2021 Indenture, we must make a written offer to purchase all of the 2021 Notes for cash at a purchase price equal to 101% of the principal amount of the 2021 Notes, plus accrued and unpaid interest to the date of repurchase, if any.

Additional Provisions

The indenture governing the Senior Secured Convertible Notes due 2033 contains a cross-default provision which becomes applicable if we default under any mortgage, indenture or instrument evidencing indebtedness for money borrowed by us and the default results in the acceleration of such indebtedness prior to its express maturity, and the principal amount of any such accelerated indebtedness aggregates in excess of $25.0 million. The 2021 Indenture contains a cross-default provision which becomes applicable if we (a) fail to pay the stated principal amount of any of our indebtedness at its final maturity date, or (b) default under any of our indebtedness and the default results in the acceleration of indebtedness, and, in each case, the principal amount of any such indebtedness, together with the principal amount of any other such indebtedness under which there has been a payment default or the maturity of which has been so accelerated, aggregates $50.0 million or more. Our credit agreement contains a cross-default provision which becomes applicable if we (a) fail to make any payment under any indebtedness for money borrowed by us (other than the obligations under such credit agreement) in an aggregate outstanding principal amount of at least $50.0 million or, (b) otherwise default under any such indebtedness, or trigger another event which causes such indebtedness to become due or to be repurchased, prepaid, defeased or redeemed or become subject to an offer to repurchase, prepay, defease or redeem such indebtedness prior to its stated maturity.

Subject to applicable limitations in our Senior Secured Credit Facility and indentures, we may from time to time repurchase our debt in the open market, through tender offers, through exchanges for debt or equity securities, by exercising rights to call, by satisfying put obligations, or in privately negotiated transactions or otherwise.

Covenant Compliance

As of March 31, 2012, we were in compliance with all of our indenture and Senior Secured Credit Facility covenants.

4. ACCRUED EXPENSES

Accrued expenses included on the condensed consolidated balance sheets consisted of:

(in thousands of U.S. dollars)	March 31, 2012		December 31, 2011
Accrued interest	$	2,998	$	7,205
Accrued compensation and benefits	30,117		55,030
Other accrued expenses	32,176		36,174
Accrued expenses	$	65,291	$	98,409

5. COMMITMENTS AND CONTINGENCIES

The application and interpretation of applicable state sales tax laws to certain of our products is uncertain. Accordingly, we may be exposed to additional sales tax liability to the extent various state jurisdictions determine that certain of our products are subject to such jurisdictions’ sales tax. As of March 31, 2012, we have recorded a liability of $7.5 million, reflecting our best estimate of our potential sales tax liability.

In addition to the above matter, we are involved in various claims and legal actions arising in the ordinary course of business. In the opinion of management, the ultimate disposition of these matters will not have a material effect on our financial position, results of operations or liquidity.

10

VALASSIS COMMUNICATIONS, INC.

Notes to Condensed Consolidated Financial Statements

(unaudited)

6. EARNINGS PER SHARE

Earnings per common share data were as follows:

	Three Months Ended
	March 31,
(in thousands, except per share data)	2012			2011
Net earnings	$	26,421		$	21,411
Weighted-average common shares outstanding, basic	42,114			49,929
Shares issued on exercise of dilutive options	4,894			6,693
Shares purchased with assumed proceeds of options and unearned restricted shares	(2,965		)	(4,293		)
Shares contingently issuable	2			4
Weighted-average common shares outstanding, diluted	44,045			52,333
Net earnings per common share, diluted	$	0.60		$	0.41
Anti-dilutive options excluded from calculation of weighted-average common shares outstanding, diluted	3,486			2,565

7. DERIVATIVE FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS

We are exposed to market risks arising from adverse changes in foreign exchange rates and interest rates. We manage these risks through a variety of strategies which include the use of derivatives. Certain derivatives are designated as cash flow hedges and qualify for hedge accounting treatment, while others do not qualify or have not been designated as hedges and are marked to market through earnings. The notional amounts of derivative financial instruments and related fair values measured on a recurring basis and included in the condensed consolidated balance sheets were as follows:

	Notional Amounts				Fair Values
(in millions of U.S. dollars)	March 31, 2012		December 31, 2011		March 31, 2012			December 31, 2011			Balance Sheet Location
Derivatives designated as cash flow hedging instruments:
Interest rate swap contract	$	186.3	$	186.3	$	(5.3	)	$	(4.6	)	Other non-current liabilities
Derivatives not receiving hedge accounting treatment:
Interest rate swap contract	100.0		140.0		(0.4		)	(0.8		)	Accrued expenses
Foreign exchange contracts	9.8		11.7		0.1			(1.0		)	Prepaid expenses and other/Accrued expenses
Total derivative financial instruments	$	296.1	$	338.0	$	(5.6	)	$	(6.4	)

The fair values of our interest rate swap contracts and foreign exchange contracts are determined based on third-party valuation models and observable foreign exchange forward contract rates, respectively, both of which represent Level 2 fair value inputs.

11

VALASSIS COMMUNICATIONS, INC.

Notes to Condensed Consolidated Financial Statements

(unaudited)

The following table summarizes the impact of derivative financial instruments on the condensed consolidated financial statements for the indicated period:

	Three Months Ended
	March 31,
	2012			2011		2012		2011		2012		2011
(in millions of U.S. Dollars)	Amount of Pre-tax Gain (Loss) Recognized in Earnings*					Amount of Pre-tax Loss Recognized in OCI				Amount of Pre-tax Loss Reclassified from AOCI into Earnings*
Derivatives designated as cash flow hedging instruments:
Interest rate swap contract	$	—		$	—	$	0.7	$	0.2	$	—	$	(1.3	)
Derivatives not receiving hedge accounting treatment:
Interest rate swap contracts	$	(0.1	)	$	—	$	—	$	—	$	—	$	—
Foreign exchange contracts	1.1			0.2		—		—		—		—
	$	1.0		$	0.2	$	0.7	$	0.2	$	—	$	(1.3	)

 * Amounts recognized in earnings related to interest rate swap contracts are included in interest expense in the unaudited condensed consolidated statements of income and amounts recognized in earnings related to foreign exchange contracts are included in cost of sales in the unaudited condensed consolidated statements of income.

Interest Rate Swaps

On December 17, 2009, we entered into an interest rate swap agreement with an initial notional amount of $300.0 million to fix three-month LIBOR at 2.005%, for an effective rate of 4.255%, including the applicable margin, for an equivalent portion of our variable rate debt under our Prior Senior Secured Credit Facility. The effective date of this agreement was December 31, 2010. The notional amount of $300.0 million amortizes by $40.0 million at the end of every quarter until it reaches $100.0 million for the quarter ending June 30, 2012, the expiration date. The swap was designated as, and qualified as, a cash flow hedge through the termination of the Prior Senior Secured Credit Facility on June 27, 2011. This interest rate swap remains in effect and changes in the fair value of this swap subsequent to the termination of hedge accounting have been, and will continue to be recognized in earnings as a component of interest expense until the swap expires.

On July 6, 2011, we entered into an interest rate swap agreement with an initial notional amount of $186.3 million. The effective date of this agreement is June 30, 2012, the expiration date of our existing interest rate swap. Under the swap agreement, we are required to make quarterly payments at a fixed interest rate of 1.8695% per annum to the counterparty on an amortizing notional amount in exchange for receiving variable payments based on the three-month LIBOR interest rate for the same notional amount. After giving effect to the swap agreement, our effective interest rate for the notional amount, based on the current applicable margin under our Senior Secured Credit Facility, will be 3.6195% per annum. The initial notional amount of $186.3 million. amortizes quarterly by (i) $2,812,500 from the effective date through the quarter ending September 30, 2013, (ii) $5,625,000 from September 30, 2013 through the quarter ending September 30, 2014, and (iii) $8,437,500 from September 30, 2014 until June 30, 2015, the expiration date of the agreement. The swap is designated as and qualifies as a cash flow hedge.

Foreign Currency

Currencies to which we have exposure are the Mexican peso, Canadian dollar, British pound, Polish zloty and Euro. Currency restrictions are not expected to have a significant effect on our cash flows, liquidity, or capital resources. We purchase the Mexican peso and Polish zloty under two to twelve-month forward foreign exchange contracts to stabilize the cost of production. As of March 31, 2012, we had a commitment to purchase $9.0 million in Mexican pesos and $0.8 million in Polish zlotys over the next year.

12

VALASSIS COMMUNICATIONS, INC.

Notes to Condensed Consolidated Financial Statements

(unaudited)

Long-Term Debt

The estimated fair market value of our long-term debt was $3.0 million above carrying value as of March 31, 2012 and $25.0 million below carrying value as of December 31, 2011. Our 2021 Notes are traded in an active market with the fair value determined based on quoted active market prices. Borrowings under our Senior Secured Credit Facility are not traded in an active market and are valued based on an implied price derived from industry averages and relative loan performance.

Cash and Cash Equivalents

The carrying amounts of cash and cash equivalents and accruals approximate fair value due to the near-term maturity of these instruments.

8. REPURCHASES OF COMMON STOCK

The following table summarizes our repurchases of common stock during the indicated periods:

	Three Months Ended
	March 31,
in thousands, except per share data	2012		2011
Shares repurchased	59		1,623
Aggregate repurchase price	$	1,366	$	45,530
Average price paid per share	$	23.10	$	28.06

As of March 31, 2012, we had authorization to repurchase an additional 1.4 million shares of our common stock under the share repurchase program approved by our Board of Directors.

9. SEGMENT REPORTING

Our segments meeting the quantitative thresholds to be considered reportable are Shared Mail, Neighborhood Targeted and Free-standing Inserts (“FSI”). All other lines of business fall below a materiality threshold and are, therefore, combined together in an “other” segment named International, Digital Media & Services. These business lines include NCH Marketing Services, Inc., Valassis Canada, Inc., Promotion Watch, direct mail, analytics, digital and in-store. Our reportable segments are strategic business units that offer different products and services and are subject to regular review by our chief operating decision-maker. They are managed separately because each business requires different executional strategies and caters to different client marketing needs.

The accounting policies of the segments are the same as those described in the 2011 Form 10-K and Note 1, Basis of Presentation and Significant Accounting Policies. We evaluate reportable segment performance based on segment profit, which we define as earnings from operations excluding unusual or infrequently occurring items. Assets and nonoperating expenses are not allocated to reportable segments and are not used to assess the performance of a reportable segment.

13

VALASSIS COMMUNICATIONS, INC.

Notes to Condensed Consolidated Financial Statements

(unaudited)

The following table sets forth, by segment, revenues, depreciation/amortization and segment profit for the indicated periods:

	Three Months Ended
	March 31,
(in millions of U.S. dollars)	Shared Mail		Neighborhood Targeted			FSI		International, Digital Media & Services		Total
2012
Revenues from external customers	$	328.1	$	72.2		$	76.3	$	42.0	$	518.6
Intersegment revenues	$	4.5	$	13.0		$	10.0	$	—	$	27.5
Depreciation/amortization	$	8.3	$	1.1		$	3.2	$	2.1	$	14.7
Segment profit (loss)1	$	42.4	$	(1.6	)	$	5.4	$	2.7	$	48.9
2011
Revenues from external customers	$	322.6	$	90.1		$	89.2	$	45.1	$	547.0
Intersegment revenues	$	4.5	$	9.3		$	9.8	$	0.1	$	23.7
Depreciation/amortization	$	10.0	$	1.0		$	3.0	$	1.7	$	15.7
Segment profit1	$	42.1	$	1.9		$	7.4	$	5.4	$	56.8
1 Total segment profit is equivalent to Earnings from operations for the three months ended March 31, 2012 and 2011.

Domestic and foreign revenues were as follows:

	Three Months Ended
	March 31,
(in millions of U.S. dollars)	2012		2011
United States	$	506.2	$	534.9
Foreign	12.4		12.1
Revenues	$	518.6	$	547.0

Domestic and foreign long-lived assets (property, plant and equipment, net) were as follows:

(in millions of U.S. dollars)	March 31, 2012		December 31, 2011
United States	$	138.4	$	140.7
Foreign	8.3		8.2
Property, plant and equipment, net	$	146.7	$	148.9

14

VALASSIS COMMUNICATIONS, INC.

Notes to Condensed Consolidated Financial Statements

(unaudited)

10. GUARANTOR AND NON-GUARANTOR CONDENSED CONSOLIDATING FINANCIAL STATEMENTS

The following information is presented in accordance with Rule 3-10 of Regulation S-X. The operating and investing activities of the separate legal entities included in the consolidated financial statements are fully interdependent and integrated. Revenues and operating expenses of the separate legal entities include intercompany charges for management and other services. The 2021 Notes issued by Valassis (referred to for purposes of this note only as the “Parent Company”) are guaranteed by substantially all of the Parent Company’s domestic wholly-owned subsidiaries (collectively, the “Guarantor Subsidiaries”) on a senior unsecured basis. Each of the Guarantor Subsidiaries is 100% owned, directly or indirectly, by the Parent Company and has guaranteed the 2021 Notes on a joint and several, full and unconditional basis, subject to certain customary exceptions. Pursuant to the terms of the 2021 Indenture, the Guarantor Subsidiaries are subject to release under certain customary conditions as described below. Non-wholly-owned subsidiaries, joint ventures, partnerships and foreign subsidiaries (collectively, the “Non-Guarantor Subsidiaries”) are not guarantors of these obligations. Substantially all of the Guarantor Subsidiaries also guarantee the Parent Company’s Senior Secured Credit Facility.

The 2021 Indenture provides for a Guarantor Subsidiary to be automatically and unconditionally released and discharged from its guarantee obligations in certain circumstances, including:

• The sale or other transfer or disposition of all of the Guarantor Subsidiary's capital stock to any person that is not an affiliate of the Parent Company;

• The sale or other transfer of all or substantially all the assets or capital stock of a Guarantor Subsidiary, by way of merger, consolidation or otherwise, to any person that is not an affiliate of the Parent Company;

• If a Guarantor Subsidiary ceases to be a “Domestic Restricted Subsidiary” for purposes of the indenture covenants; and

• Legal defeasance or covenant defeasance of the indenture obligations when provision has been made for them to be fully satisfied.

15

VALASSIS COMMUNICATIONS, INC.

Notes to Condensed Consolidated Financial Statements

(unaudited)

Condensed Consolidating Balance Sheet

March 31, 2012

(in thousands of U.S. dollars)

	Parent Company			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Adjustments			Consolidated Total
Assets
Current assets:
Cash and cash equivalents	$	77,346		$	5,936		$	23,917		$	—		$	107,199
Accounts receivable, net	105,446			287,803			23,761			—			417,010
Inventories	26,060			7,873			3			—			33,936
Prepaid expenses and other (including intercompany)	1,080,077			2,379,564			1,457			(3,434,245		)	26,853
Total current assets	1,288,929			2,681,176			49,138			(3,434,245		)	584,998
Property, plant and equipment, net	21,947			123,093			1,649			—			146,689
Goodwill	27,684			601,798			6,989			—			636,471
Other intangible assets, net	11,552			198,905			—			—			210,457
Investments	569,779			24,225			—			(590,982		)	3,022
Intercompany note receivable (payable)	357,635			(357,499		)	(136		)	—			—
Other assets	9,152			5,030			(2,142		)	—			12,040
Total assets	$	2,286,678		$	3,276,728		$	55,498		$	(4,025,227	)	$	1,593,677
Liabilities and Stockholders’ Equity
Current liabilities:
Current portion, long-term debt	$	15,000		$	—		$	—		$	—		$	15,000
Accounts payable and intercompany payable	1,126,693			2,578,120			11,305			(3,434,245		)	281,873
Progress billings	20,390			10,798			12,943			—			44,131
Accrued expenses	30,140			27,967			7,184			—			65,291
Total current liabilities	1,192,223			2,616,885			31,432			(3,434,245		)	406,295
Long-term debt	583,810			—			—			—			583,810
Deferred income taxes	(3,091		)	74,241			(3,996		)	—			67,154
Other non-current liabilities	29,582			17,914			4,768			—			52,264
Total liabilities	1,802,524			2,709,040			32,204			(3,434,245		)	1,109,523
Stockholders’ equity	484,154			567,688			23,294			(590,982		)	484,154
Total liabilities and stockholders’ equity	$	2,286,678		$	3,276,728		$	55,498		$	(4,025,227	)	$	1,593,677

16

VALASSIS COMMUNICATIONS, INC.

Notes to Condensed Consolidated Financial Statements

(unaudited)

Condensed Consolidating Balance Sheet

December 31, 2011

(in thousands of U.S. dollars)

	Parent Company			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Adjustments			Consolidated Total
Assets
Current assets:
Cash and cash equivalents	$	68,887		$	7,543		$	25,541		$	—		$	101,971
Accounts receivable, net	123,558			302,096			22,666			—			448,320
Inventories	32,159			8,958			3			—			41,120
Prepaid expenses and other (including intercompany)	1,157,263			1,993,450			23,217			(3,136,275		)	37,655
Total current assets	1,381,867			2,312,047			71,427			(3,136,275		)	629,066
Property, plant and equipment, net	24,790			122,565			1,550			—			148,905
Goodwill	23,584			605,898			6,989			—			636,471
Other intangible assets, net	11,558			202,055			—			—			213,613
Investments	547,366			21,385			—			(565,261		)	3,490
Intercompany note receivable (payable)	359,649			(333,683		)	(25,966		)	—			—
Other assets	9,710			5,271			(2,079		)	—			12,902
Total assets	$	2,358,524		$	2,935,538		$	51,921		$	(3,701,536	)	$	1,644,447
Liabilities and Stockholders’ Equity
Current liabilities:
Current portion, long-term debt	$	15,000		$	—		$	—		$	—		$	15,000
Accounts payable and intercompany payable	1,210,296			2,246,381			13,976			(3,136,275		)	334,378
Progress billings	15,952			10,358			13,665			—			39,975
Accrued expenses	52,675			38,543			7,191			—			98,409
Total current liabilities	1,293,923			2,295,282			34,832			(3,136,275		)	487,762
Long-term debt	587,560			—			—			—			587,560
Deferred income taxes	(2,840		)	74,241			(3,997		)	—			67,404
Other non-current liabilities	30,347			20,887			953			—			52,187
Total liabilities	1,908,990			2,390,410			31,788			(3,136,275		)	1,194,913
Stockholders’ equity	449,534			545,128			20,133			(565,261		)	449,534
Total liabilities and stockholders’ equity	$	2,358,524		$	2,935,538		$	51,921		$	(3,701,536	)	$	1,644,447

17

VALASSIS COMMUNICATIONS, INC.

Notes to Condensed Consolidated Financial Statements

(unaudited)

Condensed Consolidating Statement of Comprehensive Income

Three Months EndedMarch 31, 2012

(in thousands of U.S. dollars)

	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Consolidated Total
Revenues	$	171,291		$	430,014		$	17,382		$	(100,102	)	$	518,585
Costs and expenses:
Cost of sales	145,142			283,095			11,928			(51,271		)	388,894
Selling, general and administrative	20,370			102,794			3,284			(48,831		)	77,617
Amortization expense	6			3,150			—			—			3,156
Total costs and expenses	165,518			389,039			15,212			(100,102		)	469,667
Earnings from operations	5,773			40,975			2,170			—			48,918
Other expenses and income:
Interest expense	7,054			—			—			—			7,054
Interest income	(22		)	—			(36		)	—			(58		)
Intercompany interest	(8,967		)	8,967			—			—			—
Other expenses (income), net	(144		)	(616		)	63			—			(697		)
Total other expenses (income), net	(2,079		)	8,351			27			—			6,299
Earnings before income taxes	7,852			32,624			2,143			—			42,619
Income tax expense	2,418			13,360			420			—			16,198
Equity in net earnings of subsidiaries	20,987			1,723			—			(22,710		)	—
Net earnings	$	26,421		$	20,987		$	1,723		$	(22,710	)	$	26,421
Other comprehensive income (loss)	(54		)	350			350			(700		)	(54		)
Comprehensive income	$	26,367		$	21,337		$	2,073		$	(23,410	)	$	26,367

18

VALASSIS COMMUNICATIONS, INC.

Notes to Condensed Consolidated Financial Statements

(unaudited)

Condensed Consolidating Statement of Comprehensive Income

Three Months EndedMarch 31, 2011

(in thousands of U.S. dollars)

	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Consolidated Total
Revenues	$	198,166		$	429,268		$	17,369		$	(97,824	)	$	546,979
Costs and expenses:
Cost of sales	166,337			277,832			12,319			(47,911		)	408,577
Selling, general and administrative	24,514			100,378			3,448			(49,913		)	78,427
Amortization expense	6			3,150			—			—			3,156
Total costs and expenses	190,857			381,360			15,767			(97,824		)	490,160
Earnings from operations	7,309			47,908			1,602			—			56,819
Other expenses and income:
Interest expense	9,775			—			—			—			9,775
Interest income	(118		)	—			(21		)	—			(139		)
Intercompany interest	(11,197		)	11,197			—			—			—
Loss on extinguishment of debt	13,352			—			—			—			13,352
Other expenses (income), net	(227		)	(789		)	140			—			(876		)
Total other expenses, net	11,585			10,408			119			—			22,112
Earnings (loss) before income taxes	(4,276		)	37,500			1,483			—			34,707
Income tax expense	325			12,464			507			—			13,296
Equity in net earnings of subsidiaries	26,012			976			—			(26,988		)	—
Net earnings	$	21,411		$	26,012		$	976		$	(26,988	)	$	21,411
Other comprehensive income	1,357			865			865			(1,730		)	1,357
Comprehensive income	$	22,768		$	26,877		$	1,841		$	(28,718	)	$	22,768

19

VALASSIS COMMUNICATIONS, INC.

Notes to Condensed Consolidated Financial Statements

(unaudited)

Condensed Consolidating Statement of Cash Flows

Three Months EndedMarch 31, 2012

(in thousands of U.S. dollars)

	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments		Consolidated Total
Net cash provided by (used in) operating activities	$	35,072		$	(19,760	)	$	(938	)	$	—	$	14,374
Cash flows from investing activities:
Additions to property, plant and equipment	(2,372		)	(6,736		)	(157		)	—		(9,265		)
Proceeds from sale of property, plant and equipment	79			—			—			—		79
Net cash used in investing activities	(2,293		)	(6,736		)	(157		)	—		(9,186		)
Cash flows from financing activities:
Cash provided by (used in) intercompany activity	(24,889		)	24,889			—			—		—
Repayments of long-term debt	(3,750		)	—			—			—		(3,750		)
Repurchases of common stock	(1,366		)	—			—			—		(1,366		)
Proceeds from issuance of common stock	5,685			—			—			—		5,685
Net cash provided by (used in) by financing activities	(24,320		)	24,889			—			—		569
Effect of exchange rate changes on cash and cash equivalents	—			—			(529		)	—		(529		)
Net increase (decrease) in cash and cash equivalents	8,459			(1,607		)	(1,624		)	—		5,228
Cash and cash equivalents at beginning of period	68,887			7,543			25,541			—		101,971
Cash and cash equivalents at end of period	$	77,346		$	5,936		$	23,917		$	—	$	107,199

20

VALASSIS COMMUNICATIONS, INC.

Notes to Condensed Consolidated Financial Statements

(unaudited)

Condensed Consolidating Statement of Cash Flows

Three Months EndedMarch 31, 2011

(in thousands of U.S. dollars)

	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments		Consolidated Total
Net cash provided by operating activities	$	1,048		$	16,834		$	84		$	—	$	17,966
Cash flows from investing activities:
Additions to property, plant and equipment	(2,703		)	(2,285		)	(36		)	—		(5,024		)
Proceeds from sale of property, plant and equipment	20			—			—			—		20
Proceeds from sale of available-for-sale securities	1,494			—			—			—		1,494
Net cash used in investing activities	(1,189		)	(2,285		)	(36		)	—		(3,510		)
Cash flows from financing activities:
Cash provided by (used in) intercompany activity	17,594			(17,594		)	—			—		—
Borrowings of long-term debt	260,000			—			—			—		260,000
Repayments of long-term debt	(243,989		)	—			—			—		(243,989		)
Debt issuance costs	(4,880		)	—			—			—		(4,880		)
Repurchases of common stock	(45,530		)	—			—			—		(45,530		)
Proceeds from issuance of common stock	3,133			—			—			—		3,133
Net cash used in financing activities	(13,672		)	(17,594		)	—			—		(31,266		)
Effect of exchange rate changes on cash and cash equivalents	—			—			1,066			—		1,066
Net increase (decrease) in cash and cash equivalents	(13,813		)	(3,045		)	1,114			—		(15,744		)
Cash and cash equivalents at beginning of period	211,933			8,026			25,976			—		245,935
Cash and cash equivalents at end of period	$	198,120		$	4,981		$	27,090		$	—	$	230,191

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

Forward-Looking Statements

This document contains "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 our actual results, performance or achievements 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 our existing competitors; new competitors in any of our businesses; a shift in client preferences for different promotional materials, strategies or coupon delivery methods, including, without limitation, as a result of declines in newspaper circulation and/or increased competition from new media formats including digital; an unforeseen increase in paper or postal costs; changes which affect the businesses of our 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; our substantial indebtedness, and ability to refinance such indebtedness, if necessary, and our ability to incur additional indebtedness, may affect our financial health; the financial condition, including bankruptcies, of our clients, suppliers, senior secured credit facility lenders or other counterparties; certain covenants in our debt documents could adversely restrict our 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 our clients' promotional needs, inventories and other factors, including, without limitation, high levels of coupon redemption rates; our failure to attract and retain qualified personnel may affect our business and results of operations; a rise in interest rates could increase our borrowing costs; possible governmental regulation or litigation affecting aspects of our business; clients experiencing financial difficulties, or otherwise being unable to meet their obligations as they become due, could affect our results of operations and financial condition; uncertainty in the application and interpretation of applicable state sales tax laws may expose us to additional sales tax liability; and general economic conditions, whether nationally, internationally, or in the market areas in which we conduct our business, including the adverse impact of the ongoing economic downturn on the marketing expenditures and activities of our clients and prospective clients as well as our vendors, with whom we rely on to provide us with quality materials at the right prices and in a timely manner. We disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law. Additional risks include, but are not limited to, those risk factors described in our Annual Report on Form 10-K for the year ended December 31, 2011, or the 2011 Form 10-K, and other filings by us with the United States Securities and Exchange Commission, or the SEC.

Overview

Valassis is one of the nation’s leading media and marketing services companies, offering unparalleled reach and scale to more than 15,000 advertisers. Our RedPlum^® media portfolio delivers value on a weekly basis to over 100 million shoppers across a multi-media platform – in-home, in-store and in-motion. Through our digital offering, including redplum.com and save.com, consumers can find compelling national and local deals online.

Our products and services are positioned to help our clients reach their customers through mass-delivered or targeted programs. We provide our clients with blended media solutions, including shared mail, newspaper, in-store and digital delivery. We offer the only national shared mail distribution network in the industry. We utilize a proprietary patent pending targeting tool that provides our clients with multi-media recommendations and optimization. We are committed to providing innovative marketing solutions to maximize the efficiency and effectiveness of promotions for our clients and to deliver value to consumers how, when and where they want.

Our results for the three months endedMarch 31, 2012 were adversely impacted by the continuation of reduced advertising spending by clients in the consumer packaged goods (“CPG”) vertical, which began in the third quarter of 2011, across many of our products (the “reduction in CPG programs”). This reduction has occurred in response to the $500 million increase in 2011 in the cost of coupon redemptions paid by CPGs to retailers as compared to 2010.

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Consolidated Results of Operations

The following table sets forth our consolidated results of operations for the periods indicated:

	Three Months Ended
	March 31,
(in millions of U.S. dollars, except per share data)	2012			2011
Revenues:
Shared Mail	$	328.1		$	322.6
Neighborhood Targeted	72.2			90.1
Free-standing Inserts	76.3			89.2
International, Digital Media & Services	42.0			45.1
Total revenues	518.6			547.0
Cost of sales	388.9			408.6
Gross profit	129.7			138.4
Selling, general and administrative	77.6			78.4
Amortization expense	3.2			3.2
Earnings from operations	48.9			56.8
Other expenses and income:
Interest expense, net	7.0			9.6
Loss on extinguishment of debt	—			13.4
Other income, net	(0.7		)	(0.9		)
Total other expenses, net	6.3			22.1
Earnings before income taxes	42.6			34.7
Income tax expense	16.2			13.3
Net earnings	$	26.4		$	21.4
Net earnings per common share, diluted	$	0.60		$	0.41
Weighted-average common shares outstanding, diluted	44,045			52,333

Revenues

We reported revenues of $518.6 million and $547.0 million for the three months endedMarch 31, 2012 and 2011, respectively, a decrease of 5.2%. This decline in revenues was due primarily to an approximately $28.0 million aggregate reduction in CPG programs affecting many of our products and the absence of custom co-op programs within our Free-standing Inserts ("FSI") segment during the three months ended March 31, 2012.

Cost of Sales

Cost of sales was $388.9 million and $408.6 million for the three months endedMarch 31, 2012 and 2011, respectively. Gross profit as a percentage of revenues was 25.0% and 25.3% for the three months endedMarch 31, 2012 and 2011, respectively. The decrease in gross profit as a percentage of revenues resulted primarily from the decline in revenues discussed above.

Selling, General and Administrative (“SG&A”) Expenses

SG&A expenses were $77.6 million and $78.4 million for the three months endedMarch 31, 2012 and 2011, respectively, which included non-cash stock-based compensation expense of $2.3 million and $1.9 million, respectively.

Loss on Extinguishment of Debt

On January 13, 2011, we commenced a cash tender offer and consent solicitation to purchase any and all of our outstanding 8 ¹/4% Senior Notes due 2015 (the “2015 Notes”) and to amend the indenture governing the 2015 Notes (the "2015 Indenture") to eliminate substantially all of the restrictive covenants and certain events of default. We used the net proceeds from the 2021 Notes (described below) to fund the purchase of the 2015 Notes, the related consent payments pursuant to the tender offer and

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consent solicitation, and the subsequent redemption of the 2015 Notes that were not tendered and remained outstanding after the expiration of the tender offer and consent solicitation. We recognized a pre-tax loss on extinguishment of debt of $13.4 million during the three months ended March 31, 2011, which represents the difference between the aggregate purchase price and the aggregate principal amount of the 2015 Notes purchased and the write-off of related capitalized debt issuance costs.

Interest Expense, Net

Interest expense, net was $7.0 million and $9.6 million for the three months endedMarch 31, 2012 and 2011, respectively. The decrease in interest expense, net was due to the following:

• The $112.2 million reduction in outstanding indebtedness that resulted from the replacement and termination of our Prior Senior Secured Credit facility with the Senior Secured Credit Facility (both as defined below) on June 27, 2011; and

• The reduced interest rate associated with the 2021 Notes (as defined below) as compared to the 2015 Notes and the reduced margins associated with the Senior Secured Credit Facility as compared to the Prior Senior Secured Credit Facility.

Income Tax Expense

Income tax expense represented 38.0% and 38.3% of earnings before income taxes for the three months endedMarch 31, 2012 and 2011, respectively. We are required to adjust our effective tax rate each quarter to be consistent with our estimated annual effective tax rate. We are also required to record the tax impact of certain unusual or infrequently occurring items, including the effects of changes in tax laws or rates, in the interim period in which they occur. The effective tax rate during a particular quarter may be higher or lower as a result of the timing of actual earnings versus annual projections.

Net Earnings and Net Earnings per Common Share, Diluted

Net earnings were $26.4 million and $21.4 million for the three months endedMarch 31, 2012 and 2011, respectively, or $0.60 and $0.41, respectively, per common share, diluted ("diluted EPS"). As further discussed above, net earnings and diluted EPS for the three months endedMarch 31, 2012 increased as compared to net earnings and diluted EPS for the three months endedMarch 31, 2011 as result of the non-recurrence during the three months endedMarch 31, 2012 of the loss on extinguishment of debt recognized during the three months endedMarch 31, 2011, which more than offset the reduction in gross profit associated with the decline in revenues. The aforementioned factor affects the comparability of net earnings and diluted EPS for the three months endedMarch 31, 2012 and 2011. In Non-GAAP Financial Measures below, we compare net earnings and diluted EPS for the three months endedMarch 31, 2012 and 2011 excluding this item. In addition, diluted EPS was positively impacted by the repurchases of our common stock in 2011 and during the three months ended March 31, 2012, which was the primary driver in reducing our weighted-average common shares outstanding, diluted ("diluted shares outstanding") to 44.0 million shares from 52.3 million shares for the three months endedMarch 31, 2012 and 2011, respectively.

Non-GAAP Financial Measures

We define adjusted net earnings and adjusted diluted EPS as net earnings excluding the loss on extinguishment of debt, net of tax. We present adjusted net earnings and adjusted diluted EPS because we believe these measures are useful to investors as they provide measures of our profitability on a more comparable basis to historical periods because they exclude items we do not believe are indicative of our core operating performance. In addition, we exclude these items when we internally evaluate our company's performance.

Adjusted net earnings and adjusted diluted EPS are not calculated or presented in accordance with U.S. GAAP and have limitations as analytical tools and should not be considered in isolation from, or as alternatives to, operating income, net income, cash flow, EPS or other income or cash flow data prepared in accordance with GAAP. We compensate for these limitations by relying primarily on our GAAP results and using these non-GAAP financial measures only supplementally. Further, other companies, including companies in our industry, may calculate adjusted net earnings and adjusted diluted EPS differently and as the differences in the way two different companies calculate these measures increase, the degree of their usefulness as comparative measures correspondingly decreases.

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The following table reconciles net earnings and diluted EPS for the three months endedMarch 31, 2012 and 2011 to adjusted net earnings and adjusted diluted EPS:

	Three Months Ended
	March 31,
	2012				2011
	U.S. Dollars in Millions		Per Common Share, Diluted		U.S. Dollars in Millions		Per Common Share, Diluted
Net earnings	$	26.4	$	0.60	$	21.4	$	0.41
Excluding:
Loss on extinguishment of debt, net of tax	—		—		8.2		0.16
Adjusted net earnings	$	26.4	$	0.60	$	29.6	$	0.57

The decrease in adjusted net earnings in adjusted diluted EPS for the three months endedMarch 31, 2012 as compared to the three months endedMarch 31, 2011 reflect, as further discussed above, reduced gross profit associated with the decline in revenues. In addition, adjusted diluted EPS was favorably impacted by the repurchases of our common stock in 2011 and during the three months ended March 31, 2012, which was the primary driver in reducing our diluted shares outstanding to 44.0 million shares from 52.3 million shares for the three months endedMarch 31, 2012 and 2011, respectively.

.

Segment Results

We currently operate our business in the following reportable segments:

• Shared Mail – Products that have the ability to reach 9 out of 10 U.S. households through shared mail distribution. Our Shared Mail programs combine the individual print advertisements of various clients into a single shared mail package delivered primarily through the United States Postal Service (“USPS”).

• Neighborhood Targeted – Products that are targeted to specific newspaper zones or neighborhoods based on geographic and demographic characteristics.

• Free-standing Inserts – Four-color booklets that contain promotions, primarily coupons, from multiple advertisers (cooperative), which we publish and distribute to approximately 60 million households through newspapers and shared mail, as well as customized FSIs (custom co-ops) featuring multiple brands of a single client.

In addition, all other lines of business that are not separately reported are captioned as International, Digital Media & Services, which includes our coupon clearing and analytics business, NCH Marketing Services, Inc. (“NCH”), Valassis Canada, Inc., Promotion Watch, direct mail, analytics, digital and in-store.

We evaluate reportable segment performance based on segment profit, which, for the three months endedMarch 31, 2012 and 2011, was equivalent, in total, to consolidated earnings from operations. For additional information, see Note 9 to the condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.

Shared Mail

Shared Mail revenues were $328.1 million and $322.6 million for the three months ended March 31, 2012 and 2011, respectively, an increase of 1.7%. Revenues for the three months ended March 31, 2012 were favorably impacted by the postal rate increase effective in January 2012 and increased revenues per package, which were partially offset by decreased RedPlum^® wrap product revenues due to lower sell-through rates and an overall volume decline in inserts.

Shared Mail pieces decreased 2.7% to 8.9 billion pieces for the three months ended March 31, 2012 as compared to 9.2 billion pieces for the three months ended March 31, 2011. Shared Mail packages delivered were 901 million and 892 million for the three months ended March 31, 2012 and 2011, respectively, an increase of 1.0%. As a result of the slight package growth and the decrease in pieces, average pieces per package were 9.6 pieces for the three months ended March 31, 2012, decreasing 3.7% from 10.0 pieces for the three months ended March 31, 2011.

Gross margin as a percentage of revenues was 27.6% and 28.2% for the three months ended March 31, 2012 and 2011, respectively. Gross margin as a percentage of revenues was unfavorably impacted by the reduction in RedPlum^® wrap product revenues and the decrease in average pieces per package, which resulted in increased unused postage. Unused postage as a percentage of base postage increased 2.1 percentage points to 17.0% for the three months ended March 31, 2012, as compared

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to 14.9% for the three months ended March 31, 2011.

Segment profit was $42.4 million and $42.1 million for the three months ended March 31, 2012 and 2011, respectively, an increase of 0.7%. Segment profit as a percentage of revenues was 12.9% and 13.1% for the three months ended March 31, 2012 and 2011, respectively. The relatively flat segment profit as a percentage of revenues was the result of decreased SG&A costs offset by the decline in gross margin as a percentage of revenues.

Neighborhood Targeted

Neighborhood Targeted revenues were $72.2 million and $90.1 million for the three months endedMarch 31, 2012 and 2011, respectively, a decrease of 19.9%. Segment loss was $1.6 million for the three months endedMarch 31, 2012 as compared to segment profit of $1.9 million for the three months endedMarch 31, 2011. Neighborhood Targeted revenues and segment profit were negatively impacted by the reduction in CPG programs.

Free-standing Inserts

FSI revenues were $76.3 million and $89.2 million for the three months endedMarch 31, 2012 and 2011, respectively, a decrease of 14.5%. FSI segment profit was $5.4 million and $7.4 million for the three months endedMarch 31, 2012 and 2011, respectively, a decrease of 27.0%. These declines in revenues and segment profit reflect the reduction in CPG programs and the absence of custom co-op business.

International, Digital Media & Services

International, Digital Media & Services revenues were $42.0 million and $45.1 million for three months endedMarch 31, 2012 and 2011, respectively, a decrease of 6.9%. Segment profit was $2.7 million and $5.4 million for the three months endedMarch 31, 2012 and 2011, respectively, a decrease of 50.0%. The decreases in revenues and segment profit reflect the negative impact of the reduction in CPG programs on our in-store and solo direct mail businesses, which were offset, in part, by strong performance from NCH, driven by the continued strength in the volume of U.S. coupon redemptions and continued growth in our digital business.

Financial Condition, Liquidity and Sources of Capital

Our operating cash flows are our primary source of liquidity. We believe we will generate sufficient cash flows from operating activities and will have sufficient existing cash balances and lines of credit available to meet currently anticipated liquidity needs, including the working capital requirements of our operations, interest and required repayments of indebtedness and capital expenditures necessary to support growth and productivity improvement. We may consider other uses for our cash flows from operating activities and other sources of cash (such as additional borrowings under our Senior Secured Credit Facility), including, without limitation, future acquisitions and repurchases of our common stock.

The following table presents our available sources of liquidity as of March 31, 2012:

(in millions of U.S. dollars)	Facility Amount		Amount Outstanding		Available
Cash and cash equivalents					$	107.2	(a)
Debt facilities:
Senior Secured Revolving Credit Facility	$	100.0	59.9	(b)	40.1
Total Available					$	147.3

(a) The foreign subsidiaries for which we have elected to permanently reinvest earnings outside of the U.S. held $23.9 million of cash and cash equivalents as of March 31, 2012. In the event we alter our current position and repatriate funds in the future, we may be required to accrue and pay U.S. taxes on a portion thereof.

(b) Represents $50 million outstanding under our Revolving Line of Credit (as defined below) and $9.9 million in outstanding letters of credit.

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Sources and Uses of Cash and Cash Equivalents

The following table summarizes the increase in cash and cash equivalents for the indicated period:

	Three Months Ended
(in millions of U.S. dollars)	March 31, 2012
Net cash provided by operating activities	$	14.4
Net cash used in investing activities	(9.2		)
Net cash provided by financing activities	0.6
Effect of exchange rate changes on cash and cash equivalents	(0.5		)
Net increase in cash and cash equivalents	5.2
Cash and cash equivalents at beginning of period	102.0
Cash and cash equivalents at end of period	$	107.2

Operating Activities – Net cash provided by operating activities was $14.4 million for the three months endedMarch 31, 2012. In addition to cash received related to our net earnings, the following changes in assets and liabilities affected cash from operating activities for the three months endedMarch 31, 2012:

• a net cash inflow of $30.8 million associated with the decrease in accounts receivable, net, which was offset, by net cash outflows of $52.5 million related to the decrease in accounts payable; and

• a decrease of $31.6 million in accrued expenses due primarily to accrued incentive and profit sharing payments made during the three months endedMarch 31, 2012.

Investing Activities – Net cash used in investing activities was $9.2 million for the three months endedMarch 31, 2012, which primarily reflects capital acquisitions of property, plant and equipment.

Financing Activities – Net cash provided by financing activities was $0.6 million for the three months endedMarch 31, 2012, which resulted from $5.7 million of proceeds from stock option exercises, offset, in part, by $3.8 million of principal payments of long-term debt and the repurchase of $1.4 million, or 59,122 shares of our common stock at an average price of $23.10 per share.

Current and Long-term Debt

As of March 31, 2012, we had outstanding $598.8 million in aggregate indebtedness, which consisted of $260.0 million of our unsecured 6 ⁵/8% Senior Notes due 2021, or the 2021 Notes, $288.7 million and $50.0 million under the Term Loan A and Revolving Line of Credit portions of our Senior Secured Credit Facility, respectively, and $0.1 million of our Senior Secured Convertible Notes due 2033, or the 2033 Secured Notes. As of March 31, 2012, we had total outstanding letters of credit of approximately $9.9 million.

Senior Secured Credit Facility

General – On June 27, 2011, we entered into a senior secured credit facility with JPMorgan Chase Bank, N.A., as administrative agent, and a syndicate of lenders jointly arranged by J.P. Morgan Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated and RBS Securities Inc. (the “Senior Secured Credit Facility”). The Senior Secured Credit Facility and related loan documents replaced and terminated our prior credit agreement, dated as of March 2, 2007, as amended (the “Prior Senior Secured Credit Facility”), by and among Valassis, Bear Stearns Corporate Lending Inc., as Administrative Agent, and a syndicate of lenders jointly arranged by Bear, Stearns & Co. Inc. and Banc of America Securities LLC. In connection with the termination of the Prior Senior Secured Credit Facility, all obligations and rights under the related guarantee, security and collateral agency agreement, dated as of March 2, 2007, as amended (the “Prior Security Agreement”), by Valassis and certain of its domestic subsidiaries signatory thereto, as grantors, in favor of Bear Stearns Corporate Lending Inc., in its capacity as collateral agent for the benefit of the Secured Parties (as defined in the Prior Security Agreement), were also simultaneously terminated.

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The Senior Secured Credit Facility consists of:

• a five-year term loan A in an aggregate principal amount equal to $300.0 million, with principal repayable in quarterly installments at a rate of 5.0% during each of the first two years from issuance, 10.0% during the third year from issuance, 15.0% during the fourth year from issuance and 11.25% during the fifth year from issuance, with the remaining 53.75% due at maturity (the “Term Loan A”);

• a five-year revolving credit facility in an aggregate principal amount of $100.0 million (the “Revolving Line of Credit”), including $15.0 million available in Euros, Pounds Sterling or Canadian Dollars, $50.0 million available for letters of credit and a $20.0 million swingline loan subfacility, of which $50.0 million was drawn at closing and remains outstanding as of March 31, 2012 (exclusive of outstanding letters of credit described below); and

• an incremental facility pursuant to which, prior to the maturity of the Senior Secured Credit Facility, we may incur additional indebtedness in an amount up to $150.0 million under the Revolving Line of Credit or the Term Loan A or a combination thereof, subject to certain conditions, including receipt of additional lending commitments for such additional indebtedness. The terms of the incremental facility will be substantially similar to the terms of the Senior Secured Credit Facility, except with respect to the pricing of the incremental facility, the interest rate for which could be higher than that for the Revolving Line of Credit and the Term Loan A.

We used the initial borrowing under the Revolving Line of Credit, the proceeds from the Term Loan A and existing cash of $120.0 million to repay the $462.2 million outstanding under our Prior Senior Secured Credit Facility (reflecting all outstanding borrowings thereunder), to pay accrued interest with respect to such loans and to pay the fees and expenses related to the Senior Secured Credit Facility.

All borrowings under our Senior Secured Credit Facility, including, without limitation, amounts drawn under the Revolving Line of Credit, are subject to the satisfaction of customary conditions, including absence of a default and accuracy of representations and warranties. As of March 31, 2012, we had approximately $40.1 million available under the Revolving Line of Credit portion of our Senior Secured Credit Facility (after giving effect to the reductions in availability pursuant to $9.9 million in standby letters of credit outstanding as of March 31, 2012).

Interest and Fees – Borrowings under our Senior Secured Credit Facility bear interest, at our option, at either the alternate base rate (defined as the higher of the prime rate announced by the Administrative Agent, the federal funds effective rate plus 0.5% or one-month LIBOR plus 1%) (the “Base Rate”) or at the Eurodollar Rate (one-, two-, three- or six-month LIBOR, at our election, as defined in the credit agreement governing the Senior Secured Credit Facility), except for borrowings made in alternate currencies which may not accrue interest based upon the alternate base rate, in each case, plus an applicable interest rate margin. The applicable margins are currently 0.75% per annum for Base Rate loans and 1.75% per annum for Eurodollar Rate loans. The margins applicable to the borrowings under our Senior Secured Credit Facility may be adjusted based on our consolidated leverage ratio, with 1.00% being the maximum Base Rate margin and 2.00% being the maximum Eurodollar Rate. See Note 7 to the condensed consolidated financial statements included in this Quarterly Report on Form 10-Q for discussion regarding our various interest rate swap agreements.

Guarantees and Security – Our Senior Secured Credit Facility is guaranteed by certain of our existing and future domestic restricted subsidiaries pursuant to a Guarantee and Collateral Agreement. In addition, our obligations under our Senior Secured Credit Facility and the guarantee obligations of the subsidiary guarantors are secured by first priority liens on substantially all of our and our subsidiary guarantors’ present and future assets and by a pledge of all of the equity interests in our domestic subsidiary guarantors and 65% of the capital stock of certain of our existing and future foreign subsidiaries.

The Guarantee and Collateral Agreement also secures our Senior Secured Convertible Notes due 2033 on an equal and ratable basis with the indebtedness under our Senior Secured Credit Facility to the extent required by the indenture governing such notes.

Prepayments – The Senior Secured Credit Facility also contains a requirement that we make mandatory principal prepayments on the Term Loan A and Revolving Line of Credit in certain circumstances, including, without limitation, with 100% of the aggregate net cash proceeds from certain asset sales, casualty events or condemnation recoveries (in each case, to the extent not otherwise used for reinvestment in our business or related business and subject to certain other exceptions). The Senior Secured Credit Facility further provides that, subject to customary notice and minimum amount conditions, we may make voluntary prepayments without payment of premium or penalty.

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Covenants – Subject to customary and otherwise agreed upon exceptions, our Senior Secured Credit Facility contains affirmative and negative covenants, including, but not limited to:

• the payment of other obligations;

• the maintenance of organizational existences, including, but not limited to, maintaining our property and insurance;

• compliance with all material contractual obligations and requirements of law;

• limitations on the incurrence of indebtedness;

• limitations on creation and existence of liens;

• limitations on certain fundamental changes to our corporate structure and nature of our business, including mergers;

• limitations on asset sales;

• limitations on restricted payments, including certain dividends and stock repurchases and redemptions;

• limitations on capital expenditures;

• limitations on any investments, provided that certain “permitted acquisitions” and strategic investments are allowed;

• limitations on optional prepayments and modifications of certain debt instruments;

• limitations on modifications to organizational documents;

• limitations on transactions with affiliates;

• limitations on entering into certain swap agreements;

• limitations on negative pledge clauses or clauses restricting subsidiary distributions;

• limitations on sale-leaseback and other lease transactions; and

• limitations on changes to our fiscal year.

Our Senior Secured Credit Facility also requires us to comply with:

• a maximum consolidated leverage ratio, as defined in our Senior Secured Credit Facility (generally, the ratio of our consolidated total debt to consolidated earnings before interest, taxes, depreciation and amortization, or EBITDA, for the most recent four quarters), of 3.50:1.00; and

• a minimum consolidated interest coverage ratio, as defined in our Senior Secured Credit Facility (generally, the ratio of our consolidated EBITDA to consolidated interest expense for the most recent four quarters), of 3.00:1.00.

The following table shows the required and actual financial ratios under our Senior Secured Credit Facility as of March 31, 2012:

	Required Ratio	Actual Ratio
Maximum consolidated leverage ratio	No greater than 3.50:1.00	1.92:1.00
Minimum consolidated interest coverage ratio	No less than 3.00:1.00	10.58:1.00

In addition, we are required to give notice to the administrative agent and the lenders under our Senior Secured Credit Facility of defaults under the facility documentation and other material events, make any new wholly-owned domestic subsidiary (other than an immaterial subsidiary) a subsidiary guarantor and pledge substantially all after-acquired property as collateral to secure our and our subsidiary guarantors’ obligations in respect of the facility.

Events of Default – Our Senior Secured Credit Facility contains customary events of default, including upon a change in control. If such an event of default occurs, the lenders under our Senior Secured Credit Facility would be entitled to take various actions, including in certain circumstances increasing the effective interest rate and accelerating the amounts due under our Senior Secured Credit Facility.

8 ¹/4% Senior Notes due 2015

On January 13, 2011, we commenced a cash tender offer and consent solicitation to purchase any and all of our outstanding 2015 Notes and to amend the 2015 Indenture to eliminate substantially all of the restrictive covenants and certain events of default. We used the net proceeds from the 2021 Notes to fund the purchase of the 2015 Notes, the related consent payments pursuant to the tender offer and consent solicitation, and the subsequent redemption of the 2015 Notes that were not tendered and remained outstanding after the expiration of the tender offer and consent solicitation.

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6 ⁵/8% Senior Notes due 2021

On January 28, 2011, we issued in a private placement $260.0 million aggregate principal amount of our 2021 Notes. The net proceeds were used to fund the purchase of the outstanding 2015 Notes and the related consent payments in a concurrent tender offer and consent solicitation as described above and the redemption of the remaining outstanding 2015 Notes.

Interest on the 2021 Notes is payable every six months on February 1 and August 1. The 2021 Notes are fully and unconditionally guaranteed, jointly and severally, by substantially all of our existing and future domestic restricted subsidiaries on a senior unsecured basis.

In July 2011, in accordance with the terms of the registration rights agreement between us and the initial purchasers of the 2021 Notes, we completed an exchange offer to exchange the original notes issued in the private placement for a like principal amount of exchange notes registered under the Securities Act of 1933, as amended. An aggregate principal amount of $260.0 million, or 100%, of the original notes were exchanged for exchange notes in the exchange offer. The exchange notes are substantially identical to the original notes, except that the exchange notes are not subject to certain transfer restrictions.

The 2021 Notes were issued under an indenture with Wells Fargo Bank, National Association, as trustee (the “2021 Indenture”). Subject to a number of exceptions, the 2021 Indenture restricts our ability and the ability of our restricted subsidiaries (as defined in the 2021 Indenture) to incur or guarantee additional indebtedness, transfer or sell assets, make certain investments, pay dividends or make distributions or other restricted payments, create certain liens, merge or consolidate, repurchase stock, create or permit restrictions on the ability of our restricted subsidiaries to pay dividends or make other distributions to us and enter into transactions with affiliates.

We may redeem all or a portion of the 2021 Notes at our option at any time prior to February 1, 2016, at a redemption price equal to 100% of the principal amount of 2021 Notes to be redeemed, plus a make-whole premium as described in the 2021 Indenture, plus accrued and unpaid interest to the redemption date, if any. At any time on or after February 1, 2016, we may redeem all or a portion of the 2021 Notes at our option at the following redemption prices (expressed as percentages of the principal amount thereof) if redeemed during the twelve-month period commencing on February 1 of the years set forth below:

Year	Percentage
2016	103.313%
2017	102.208%
2018	101.104%
2019 and thereafter	100.000%

In addition, we must pay accrued and unpaid interest to the redemption date, if any. On or prior to February 1, 2014, we may also redeem at our option up to 35% of the principal amount of the outstanding 2021 Notes with the proceeds of certain equity offerings at the redemption price specified in the 2021 Indenture, plus accrued and unpaid interest to the date of redemption, if any. Upon the occurrence of a change of control, as defined in the 2021 Indenture, we must make a written offer to purchase all of the 2021 Notes for cash at a purchase price equal to 101% of the principal amount of the 2021 Notes, plus accrued and unpaid interest to the date of repurchase, if any.

Additional Provisions

The indenture governing the Senior Secured Convertible Notes due 2033 contains a cross-default provision which becomes applicable if we default under any mortgage, indenture or instrument evidencing indebtedness for money borrowed by us and the default results in the acceleration of such indebtedness prior to its express maturity, and the principal amount of any such accelerated indebtedness aggregates in excess of $25.0 million. The 2021 Indenture contains a cross-default provision which becomes applicable if we (a) fail to pay the stated principal amount of any of our indebtedness at its final maturity date, or (b) default under any of our indebtedness and the default results in the acceleration of indebtedness, and, in each case, the principal amount of any such indebtedness, together with the principal amount of any other such indebtedness under which there has been a payment default or the maturity of which has been so accelerated, aggregates $50.0 million or more. Our credit agreement contains a cross-default provision which becomes applicable if we (a) fail to make any payment under any indebtedness for money borrowed by us (other than the obligations under such credit agreement) in an aggregate outstanding principal amount of at least $50.0 million or, (b) otherwise default under any such indebtedness, or trigger another event which causes such indebtedness to become due or to be repurchased, prepaid, defeased or redeemed or become subject to an offer to repurchase, prepay, defease or redeem such indebtedness prior to its stated maturity.

30

Subject to applicable limitations in our Senior Secured Credit Facility and indentures, we may from time to time repurchase our debt in the open market, through tender offers, through exchanges for debt or equity securities, by exercising rights to call, by satisfying put obligations, or in privately negotiated transactions or otherwise.

Other Indebtedness

We have entered into various interest rate swap agreements. For further detail regarding these agreements, see Note 7 to the unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q.

Covenant Compliance

As of March 31, 2012, we were in compliance with all of our indenture and Senior Secured Credit Facility covenants.

Off-balance Sheet Arrangements

As of March 31, 2012, we did not have any off-balance sheet arrangements, as defined in Item 303(a)(4)(ii) of SEC Regulation S-K.

Capital Expenditures

Capital expenditures were $9.3 million for the three months endedMarch 31, 2012, and are expected to be an aggregate amount of $32.0 million or less for the 2012 fiscal year. It is expected these expenditures will be made using funds provided by operations.

Critical Accounting Policies and Estimates

The preparation of financial statements in conformity with generally accepted accounting principles in the United States requires management to make estimates and assumptions that in certain circumstances affect amounts reported in the accompanying unaudited condensed consolidated financial statements. The SEC has defined a company’s most critical accounting policies as the ones that are most important to the portrayal of the company’s financial condition and results of operations, and which require the company to make its most difficult and subjective judgments, often as a result of the need to make estimates of matters that are inherently uncertain. Our critical accounting policies have not changed materially from those disclosed in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations in our 2011 Form 10-K.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our principal market risks are interest rates on various debt instruments and foreign exchange rates at our international subsidiaries.

Interest Rates

As of March 31, 2012, $338.8 million of aggregate indebtedness remained outstanding under our Senior Secured Credit Facility and was subject to variable interest rates. However, in December 2009, we entered into an interest rate swap agreement with an effective date of December 31, 2010 and an initial notional amount of $300.0 million, which amortizes by $40.0 million at the end of each quarter subsequent to the effective date until it reaches $100.0 million for the quarter ending June 30, 2012, the expiration date of the interest rate swap agreement. This interest rate swap agreement effectively fixes, at 3.755% (including the current applicable margin), the interest rate for the portion of our variable rate debt outstanding under our Senior Secured Credit Facility equal to the outstanding notional amount of the interest rate swap agreement, which was $100.0 million as of March 31, 2012. In addition, on July 6, 2011, we entered into an interest rate swap agreement with an initial notional amount of $186.3 million. The effective date of this agreement is June 30, 2012. Once effective, this interest rate swap agreement will effectively fix, at 3.6195% (including the current applicable margin), the interest rate for the portion of our variable rate debt outstanding under our Senior Secured Credit Facility equal to the outstanding notional amount of the interest rate swap agreement. The initial notional amount of $186.3 million amortizes quarterly by (i) $2.8 million from the effective date through the quarter ending September 30, 2013, (ii) $5.6 million from September 30, 2013 through the quarter ending September 30, 2014, and (iii) $8.4 million from September 30, 2014 until June 30, 2015, the expiration date of the agreement.

As of March 31, 2012, the variable rate indebtedness outstanding under our Senior Secured Credit Facility in excess of the outstanding notional amount of the effective interest rate swap agreement described above was an aggregate principal amount of $238.8 million, and is subject to interest rate risk, as our interest payments will fluctuate as the underlying interest rate changes. If there is a 1% increase in the Eurodollar Rate, the interest rate currently applicable to this variable rate indebtedness,

31

and we do not alter the terms of our current interest rate swap agreements or enter into a new interest rate swap agreement, our debt service obligations on our variable rate indebtedness would increase by a total of $5.9 million between April 1, 2012 and June 27, 2016, the maturity date of the Senior Secured Credit Facility, which would affect our cash flows and results of operations. If we borrow additional amounts under the Revolving Line of Credit portion of our Senior Secured Credit Facility, our interest rate risk may increase.

Foreign Currency

Currencies to which we have exposure are the Mexican peso, Canadian dollar, Polish zloty, British pound and Euro. Currency restrictions are not expected to have a significant effect on our cash flows, liquidity, or capital resources. Actual exchange losses or gains are recorded against production expense when the contracts are executed. As of March 31, 2012, we had commitments to purchase $9.0 million in Mexican pesos and $0.8 million in Polish zlotys over the next 12 months.

ITEM 4. CONTROLS AND PROCEDURES

As of the end of the period covered by this Quarterly Report on Form 10-Q, we carried out an evaluation, under the supervision and with the participation of our Disclosure Committee, including our Chief Executive Officer and Chief Financial Officer, of our disclosure controls and procedures pursuant to Rule 13a-15 of the Securities Exchange Act of 1934, as amended, or the Exchange Act. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of the end of such period, the disclosure controls and procedures are effective in ensuring that the information required to be disclosed in the reports that we file or submit under the Exchange Act (i) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

There has been no change in our internal control over financial reporting during the three months endedMarch 31, 2012 that has materially affected, or is likely to materially affect, internal control over financial reporting.

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

We are involved in various claims and legal actions arising in the ordinary course of business. In the opinion of management, the ultimate disposition of these matters will not have a material effect on our financial position, results of operations or liquidity.

ITEM 1A. RISK FACTORS

In addition to the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the factors discussed in Part I, “Item 1A. Risk Factors” in our 2011 Form 10-K, which could materially affect our business, financial condition and future results. The risks described in our 2011 Form 10-K are not the only risks facing our Company. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

32

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

The following table reflects our repurchases of our common stock during the three months endedMarch 31, 2012:

Period	Total Number of Shares Purchased	Average Price Paid per Share (including broker commissions)		Total Number of Shares Purchased as Part of Publicly Announced Plan (a)	Maximum Number of Shares that May Yet be Purchased under the Plan (b)
January 1, 2012 to January 31, 2012	—	$	—	—	1,487,935
February 1, 2012 to February 29, 2012	—	$	—	—	1,487,935
March 1, 2012 to March 31, 2012	59,122	$	23.10	59,122	1,428,813
	59,122	$	23.10	59,122

(a) On August 25, 2005, our Board of Directors approved the repurchase of 5 million shares of our common stock. This share repurchase plan was suspended in February 2006. On May 6, 2010, our Board of Directors reinstated this share repurchase plan. In May 2011, our Board of Directors approved an increase of 6 million shares to this share repurchase plan. In May 2012, our Board of Directors approved an additional increase of 6 million shares to this share repurchase plan.

(b) Our ability to make share repurchases may be limited by the documents governing our indebtedness.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

33

ITEM 6. EXHIBITS

Exhibit Number	Description
31.1	Section 302 Certification of Robert A. Mason
31.2	Section 302 Certification of Robert L. Recchia
32.1	Section 906 Certification of Robert A. Mason
32.2	Section 906 Certification of Robert L. Recchia
101.INS*	XBRL Instance Document
101.SCH*	XBRL Taxonomy Extension Schema
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase
101.DEF*	XBRL Taxonomy Extension Definition Linkbase
101.LAB*	XBRL Taxonomy Extension Label Linkbase
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase

______________

* Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files included as Exhibits 101 hereto (i) shall not be deemed “filed” or part of a registration statement or prospectus for purposes of Section 11 or 12 of the Securities Act of 1933, as amended, (ii) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and (iii) otherwise are not subject to liability under those sections.

34

SIGNATURE

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

Dated: May 8, 2012

Valassis Communications, Inc. (Registrant)
By:	/s/ Robert L. Recchia
Robert L. Recchia
Executive Vice President and Chief Financial Officer
Signing on behalf of the Registrant and as principal financial and accounting officer.

35

EXHIBIT INDEX

Exhibit Number	Description
31.1	Section 302 Certification of Robert A. Mason
31.2	Section 302 Certification of Robert L. Recchia
32.1	Section 906 Certification of Robert A. Mason
32.2	Section 906 Certification of Robert L. Recchia
101.INS*	XBRL Instance Document
101.SCH*	XBRL Taxonomy Extension Schema
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase
101.DEF*	XBRL Taxonomy Extension Definition Linkbase
101.LAB*	XBRL Taxonomy Extension Label Linkbase
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase

______________

* Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files included as Exhibits 101 hereto (i) shall not be deemed “filed” or part of a registration statement or prospectus for purposes of Section 11 or 12 of the Securities Act of 1933, as amended, (ii) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and (iii) otherwise are not subject to liability under those sections.

36

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Robert A. Mason, certify that:

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

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

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

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

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

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation;

d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: May 8, 2012

/s/ Robert A. Mason

Robert A. Mason

Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Robert L. Recchia, certify that:

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

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

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

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

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

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation;

d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: May 8, 2012

/s/ Robert L. Recchia

Robert L. Recchia

Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. 1350

(SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002)

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of Valassis Communications, Inc. (the “Company”), does hereby certify, to the best of his knowledge and belief that:

(1) The Quarterly Report on Form 10-Q for the quarter ended March 31, 2012 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated:	May 8, 2012	/s/ Robert A. Mason
		Robert A. Mason Chief Executive Officer

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. 1350

(SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002)

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of Valassis Communications, Inc. (the “Company”), does hereby certify, to the best of his knowledge and belief that:

(1) The Quarterly Report on Form 10-Q for the quarter ended March 31, 2012 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated:	May 8, 2012	/s/ Robert L. Recchia
		Robert L. Recchia Chief Financial Officer

XML

Notional Amounts of Derivative Financial Instruments and Related Fair Values Measured on Recurring Basis (Detail) (USD $) In Millions, unless otherwise specified	Mar. 31, 2012	Dec. 31, 2011
Derivatives, Fair Value [Line Items]
Total derivative financial instruments, notional amounts	$ 296.1	$ 338.0
Total derivative financial instruments, fair value (net)	(5.6)	(6.4)
Designated as Hedging Instrument | Interest rate swap contract
Derivatives, Fair Value [Line Items]
Notional Amounts of Derivative Instruments, Liability	186.3	186.3
Designated as Hedging Instrument | Interest rate swap contract | Other non-current liabilities
Derivatives, Fair Value [Line Items]
Fair value of Derivative Instruments, Liability	5.3	4.6
Not Designated as Hedging Instrument | Interest rate swap contract
Derivatives, Fair Value [Line Items]
Notional Amounts of Derivative Instruments, Liability	100.0	140.0
Not Designated as Hedging Instrument | Interest rate swap contract | Accrued expense
Derivatives, Fair Value [Line Items]
Fair value of Derivative Instruments, Liability	0.4	0.8
Not Designated as Hedging Instrument | Foreign exchange contracts
Derivatives, Fair Value [Line Items]
Notional Amounts of Derivative Instruments, Liability		11.7
Notional Amounts of Derivative Instruments, Asset	9.8
Not Designated as Hedging Instrument | Foreign exchange contracts | Accrued expense
Derivatives, Fair Value [Line Items]
Fair value of Derivative Instruments, Liability		1.0
Not Designated as Hedging Instrument | Foreign exchange contracts | Prepaid expenses and other
Derivatives, Fair Value [Line Items]
Fair value of Derivative Instruments, Asset	$ 0.1

XML

Condensed Consolidating Statement of Income (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Schedule of Condensed Consolidating Statement of Operations [Line Items]
Revenues	$ 518,585	$ 546,979
Costs and expenses:
Cost of sales	388,894	408,577
Selling, general and administrative	77,617	78,427
Amortization expense	3,156	3,156
Total costs and expenses	469,667	490,160
Earnings (loss) from operations	48,918	56,819
Other expenses and income:
Interest expense	7,054	9,775
Interest income	(58)	(139)
Intercompany interest	0	0
Loss on extinguishment of debt (Note 3)	0	13,352
Other income, net	(697)	(876)
Total other expenses (income), net	6,299	22,112
Earnings (loss) before income taxes	42,619	34,707
Income tax (benefit) expense	16,198	13,296
Equity in net earnings (loss) of subsidiaries	0	0
Net earnings	26,421	21,411
Other Comprehensive Income (Loss), Net of Tax	(54)	1,357
Comprehensive income	26,367	22,768
Parent Company
Schedule of Condensed Consolidating Statement of Operations [Line Items]
Revenues	171,291	198,166
Costs and expenses:
Cost of sales	145,142	166,337
Selling, general and administrative	20,370	24,514
Amortization expense	6	6
Total costs and expenses	165,518	190,857
Earnings (loss) from operations	5,773	7,309
Other expenses and income:
Interest expense	7,054	9,775
Interest income	(22)	(118)
Intercompany interest	(8,967)	(11,197)
Loss on extinguishment of debt (Note 3)		13,352
Other income, net	(144)	(227)
Total other expenses (income), net	(2,079)	11,585
Earnings (loss) before income taxes	7,852	(4,276)
Income tax (benefit) expense	2,418	325
Equity in net earnings (loss) of subsidiaries	20,987	26,012
Net earnings	26,421	21,411
Other Comprehensive Income (Loss), Net of Tax	(54)	1,357
Comprehensive income	26,367	22,768
Guarantor Subsidiaries
Schedule of Condensed Consolidating Statement of Operations [Line Items]
Revenues	430,014	429,268
Costs and expenses:
Cost of sales	283,095	277,832
Selling, general and administrative	102,794	100,378
Amortization expense	3,150	3,150
Total costs and expenses	389,039	381,360
Earnings (loss) from operations	40,975	47,908
Other expenses and income:
Interest expense	0	0
Interest income	0	0
Intercompany interest	8,967	11,197
Loss on extinguishment of debt (Note 3)		0
Other income, net	(616)	(789)
Total other expenses (income), net	8,351	10,408
Earnings (loss) before income taxes	32,624	37,500
Income tax (benefit) expense	13,360	12,464
Equity in net earnings (loss) of subsidiaries	1,723	976
Net earnings	20,987	26,012
Other Comprehensive Income (Loss), Net of Tax	350	865
Comprehensive income	21,337	26,877
Non-Guarantor Subsidiaries
Schedule of Condensed Consolidating Statement of Operations [Line Items]
Revenues	17,382	17,369
Costs and expenses:
Cost of sales	11,928	12,319
Selling, general and administrative	3,284	3,448
Amortization expense	0	0
Total costs and expenses	15,212	15,767
Earnings (loss) from operations	2,170	1,602
Other expenses and income:
Interest expense	0	0
Interest income	(36)	(21)
Intercompany interest	0	0
Loss on extinguishment of debt (Note 3)		0
Other income, net	63	140
Total other expenses (income), net	27	119
Earnings (loss) before income taxes	2,143	1,483
Income tax (benefit) expense	420	507
Equity in net earnings (loss) of subsidiaries	0	0
Net earnings	1,723	976
Other Comprehensive Income (Loss), Net of Tax	350	865
Comprehensive income	2,073	1,841
Consolidating Adjustments
Schedule of Condensed Consolidating Statement of Operations [Line Items]
Revenues	(100,102)	(97,824)
Costs and expenses:
Cost of sales	(51,271)	(47,911)
Selling, general and administrative	(48,831)	(49,913)
Amortization expense	0	0
Total costs and expenses	(100,102)	(97,824)
Earnings (loss) from operations	0	0
Other expenses and income:
Interest expense	0	0
Interest income	0	0
Intercompany interest	0	0
Loss on extinguishment of debt (Note 3)		0
Other income, net	0	0
Total other expenses (income), net	0	0
Earnings (loss) before income taxes	0	0
Income tax (benefit) expense	0	0
Equity in net earnings (loss) of subsidiaries	(22,710)	(26,988)
Net earnings	(22,710)	(26,988)
Other Comprehensive Income (Loss), Net of Tax	(700)	(1,730)
Comprehensive income	$ (23,410)	$ (28,718)

XML

Domestic and Foreign Long-Lived Assets (Property, Plant and Equipment, Net) (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2012	Dec. 31, 2011
Revenues from External Customers and Long-Lived Assets [Line Items]
Property, plant and equipment, net (Note 1)	$ 146,689	$ 148,905
UNITED STATES
Revenues from External Customers and Long-Lived Assets [Line Items]
Property, plant and equipment, net (Note 1)	138,400	140,700
Foreign
Revenues from External Customers and Long-Lived Assets [Line Items]
Property, plant and equipment, net (Note 1)	$ 8,300	$ 8,200

XML

Long-Term Debt - Additional Information (Detail) (USD $)	3 Months Ended					3 Months Ended										3 Months Ended								3 Months Ended						3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011	Dec. 31, 2011	Jun. 27, 2011 Incremental Credit Facility	Jun. 27, 2011 Term Loan A	Mar. 31, 2012 Term Loan A Principal repayable during the first year	Mar. 31, 2012 Term Loan A Principal repayable during the second year	Mar. 31, 2012 Term Loan A Principal repayable during the fourth year	Mar. 31, 2012 Term Loan A Principal repayable during the fifth year	Mar. 31, 2012 Term Loan A Principal repayable at maturity	Mar. 31, 2012 Senior Secured Revolving Credit Facility	Jun. 27, 2011 Senior Secured Revolving Credit Facility	Jun. 27, 2011 Senior Secured Revolving Credit Facility Foreign Denominated	Jun. 27, 2011 Senior Secured Revolving Credit Facility Letter of Credit	Jun. 27, 2011 Senior Secured Revolving Credit Facility Revolving Line of Credit	Jun. 30, 2011 Prior Senior Secured Credit Facility	Mar. 31, 2012 Senior Secured Credit Facility	Jun. 27, 2011 Senior Secured Credit Facility	Mar. 31, 2012 Senior Secured Credit Facility Base Rate	Mar. 31, 2012 Senior Secured Credit Facility Euro Dollar Rate	Mar. 31, 2012 Senior Secured Revolving Credit Facility	Dec. 31, 2011 Senior Secured Revolving Credit Facility	Jan. 28, 2011 Senior Secured Revolving Credit Facility	Mar. 31, 2012 Senior Notes due 2021	Dec. 31, 2011 Senior Notes due 2021	Jan. 28, 2011 Senior Notes due 2021	Jan. 28, 2011 Senior Notes due 2021 Senior Notes Redeemable Prior to February 1, 2014 [Member]	Jan. 28, 2011 Senior Notes due 2021 Senior Notes Redeemable Prior To February 1, 2016 Member	Jan. 28, 2011 Senior Notes due 2021 Senior Notes Redeemable Upon Change in Control [Member]	Mar. 31, 2012 Senior Notes due 2033
Debt Outstanding [Line Items]
Principal Redeemable with Equity Offering Proceeds																											35.00%
Debt Instrument, Redemption Price																												100.00%	101.00%
Cross-Default Accelerated Indebtedness Amount																	$ 50,000,000							$ 50,000,000						$ 25,000,000
Debt Instrument, Interest Rate, Stated Percentage																								6.625%	6.625%
Debt Instrument, Face Amount					300,000,000
Principal repayment, percentage						5.00%	10.00%	15.00%	11.25%	53.75%
Line of credit, aggregate principal amount												100,000,000	15,000,000	50,000,000	20,000,000
Line of credit, outstanding amount											40,100,000	50,000,000
Line of credit, incremental facility				150,000,000
Cash used to repay outstanding debt																120,000,000
Repayments of long-term debt	3,750,000	243,989,000														462,200,000
Standby letters of credit outstanding	9,900,000
Senior secured debt, applicable margin rate																			0.75%	1.75%
Senior secured debt, maximum applicable margin rate																			1.00%	2.00%
Percentage of capital stock of foreign subsidiaries pledged as a guarantee																		65.00%
Mandatory principal prepayments from aggregate net cash proceeds from certain asset sales, casualty events or condemnation recoveries, percentage																							100.00%
Pre-tax loss on extinguishment of debt	0	(13,352,000)
Long-term Debt	598,810,000		602,560,000																		50,000,000	50,000,000		260,000,000	260,000,000
Capitalized debt issuance costs																										$ 5,100,000

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SEGMENT REPORTING (Tables)

3 Months Ended

Mar. 31, 2012

Revenues, Depreciation/Amortization and Segment Profit

The following table sets forth, by segment, revenues, depreciation/amortization and segment profit for the indicated periods:

	Three Months Ended
	March 31,
(in millions of U.S. dollars)	Shared Mail		Neighborhood Targeted			FSI		International, Digital Media & Services		Total
2012
Revenues from external customers	$	328.1	$	72.2		$	76.3	$	42.0	$	518.6
Intersegment revenues	$	4.5	$	13.0		$	10.0	$	—	$	27.5
Depreciation/amortization	$	8.3	$	1.1		$	3.2	$	2.1	$	14.7
Segment profit (loss)1	$	42.4	$	(1.6	)	$	5.4	$	2.7	$	48.9
2011
Revenues from external customers	$	322.6	$	90.1		$	89.2	$	45.1	$	547.0
Intersegment revenues	$	4.5	$	9.3		$	9.8	$	0.1	$	23.7
Depreciation/amortization	$	10.0	$	1.0		$	3.0	$	1.7	$	15.7
Segment profit1	$	42.1	$	1.9		$	7.4	$	5.4	$	56.8
1 Total segment profit is equivalent to Earnings from operations for the three months ended March 31, 2012 and 2011.

Domestic and Foreign Revenues

Domestic and foreign revenues were as follows:

	Three Months Ended
	March 31,
(in millions of U.S. dollars)	2012		2011
United States	$	506.2	$	534.9
Foreign	12.4		12.1
Revenues	$	518.6	$	547.0

Domestic and Foreign Long-Lived Assets (Property, Plant and Equipment, Net)

Domestic and foreign long-lived assets (property, plant and equipment, net) were as follows:

(in millions of U.S. dollars)	March 31, 2012		December 31, 2011
United States	$	138.4	$	140.7
Foreign	8.3		8.2
Property, plant and equipment, net	$	146.7	$	148.9

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Repurchase of Common Stock (Detail) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Equity, Class of Treasury Stock [Line Items]
Shares repurchased	59	1,623
Aggregate repurchase price	$ 1,366	$ 45,530
Average price paid per share	$ 23.10	$ 28.06

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COMMITMENTS AND CONTINGENCIES - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	Mar. 31, 2012
Commitments and Contingencies Disclosure [Line Items]
Contingent sales tax liability	$ 7.5

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Condensed Consolidating Balance Sheets (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2012	Dec. 31, 2011	Mar. 31, 2011	Dec. 31, 2010
Current assets:
Cash and cash equivalents	$ 107,199	$ 101,971	$ 230,191	$ 245,935
Accounts receivable, net	417,010	448,320
Inventories	33,936	41,120
Prepaid expenses and other (including intercompany)	26,853	37,655
Total current assets	584,998	629,066
Property, plant and equipment, net	146,689	148,905
Goodwill	636,471	636,471
Other intangible assets, net	210,457	213,613
Investments	3,022	3,490
Intercompany note receivable (payable)	0	0
Other assets	12,040	12,902
Total assets	1,593,677	1,644,447
Current liabilities:
Current portion, long-term debt	15,000	15,000
Accounts payable and intercompany payable	281,873	334,378
Progress billings	44,131	39,975
Accrued expenses	65,291	98,409
Total current liabilities	406,295	487,762
Long-term debt	583,810	587,560
Deferred income taxes	67,154	67,404
Other non-current liabilities	52,264	52,187
Total liabilities	1,109,523	1,194,913
Stockholders' equity	484,154	449,534
Total liabilities and stockholders' equity	1,593,677	1,644,447
Parent Company
Current assets:
Cash and cash equivalents	77,346	68,887	198,120	211,933
Accounts receivable, net	105,446	123,558
Inventories	26,060	32,159
Prepaid expenses and other (including intercompany)	1,080,077	1,157,263
Total current assets	1,288,929	1,381,867
Property, plant and equipment, net	21,947	24,790
Goodwill	27,684	23,584
Other intangible assets, net	11,552	11,558
Investments	569,779	547,366
Intercompany note receivable (payable)	357,635	359,649
Other assets	9,152	9,710
Total assets	2,286,678	2,358,524
Current liabilities:
Current portion, long-term debt	15,000	15,000
Accounts payable and intercompany payable	1,126,693	1,210,296
Progress billings	20,390	15,952
Accrued expenses	30,140	52,675
Total current liabilities	1,192,223	1,293,923
Long-term debt	583,810	587,560
Deferred income taxes	(3,091)	(2,840)
Other non-current liabilities	29,582	30,347
Total liabilities	1,802,524	1,908,990
Stockholders' equity	484,154	449,534
Total liabilities and stockholders' equity	2,286,678	2,358,524
Guarantor Subsidiaries
Current assets:
Cash and cash equivalents	5,936	7,543	4,981	8,026
Accounts receivable, net	287,803	302,096
Inventories	7,873	8,958
Prepaid expenses and other (including intercompany)	2,379,564	1,993,450
Total current assets	2,681,176	2,312,047
Property, plant and equipment, net	123,093	122,565
Goodwill	601,798	605,898
Other intangible assets, net	198,905	202,055
Investments	24,225	21,385
Intercompany note receivable (payable)	(357,499)	(333,683)
Other assets	5,030	5,271
Total assets	3,276,728	2,935,538
Current liabilities:
Current portion, long-term debt	0	0
Accounts payable and intercompany payable	2,578,120	2,246,381
Progress billings	10,798	10,358
Accrued expenses	27,967	38,543
Total current liabilities	2,616,885	2,295,282
Long-term debt	0	0
Deferred income taxes	74,241	74,241
Other non-current liabilities	17,914	20,887
Total liabilities	2,709,040	2,390,410
Stockholders' equity	567,688	545,128
Total liabilities and stockholders' equity	3,276,728	2,935,538
Non-Guarantor Subsidiaries
Current assets:
Cash and cash equivalents	23,917	25,541	27,090	25,976
Accounts receivable, net	23,761	22,666
Inventories	3	3
Prepaid expenses and other (including intercompany)	1,457	23,217
Total current assets	49,138	71,427
Property, plant and equipment, net	1,649	1,550
Goodwill	6,989	6,989
Other intangible assets, net	0	0
Investments	0	0
Intercompany note receivable (payable)	(136)	(25,966)
Other assets	(2,142)	(2,079)
Total assets	55,498	51,921
Current liabilities:
Current portion, long-term debt	0	0
Accounts payable and intercompany payable	11,305	13,976
Progress billings	12,943	13,665
Accrued expenses	7,184	7,191
Total current liabilities	31,432	34,832
Long-term debt	0	0
Deferred income taxes	(3,996)	(3,997)
Other non-current liabilities	4,768	953
Total liabilities	32,204	31,788
Stockholders' equity	23,294	20,133
Total liabilities and stockholders' equity	55,498	51,921
Consolidating Adjustments
Current assets:
Cash and cash equivalents	0	0	0	0
Accounts receivable, net	0	0
Inventories	0	0
Prepaid expenses and other (including intercompany)	(3,434,245)	(3,136,275)
Total current assets	(3,434,245)	(3,136,275)
Property, plant and equipment, net	0	0
Goodwill	0	0
Other intangible assets, net	0	0
Investments	(590,982)	(565,261)
Intercompany note receivable (payable)	0	0
Other assets	0	0
Total assets	(4,025,227)	(3,701,536)
Current liabilities:
Current portion, long-term debt	0	0
Accounts payable and intercompany payable	(3,434,245)	(3,136,275)
Progress billings	0	0
Accrued expenses	0	0
Total current liabilities	(3,434,245)	(3,136,275)
Long-term debt	0	0
Deferred income taxes	0	0
Other non-current liabilities	0	0
Total liabilities	(3,434,245)	(3,136,275)
Stockholders' equity	(590,982)	(565,261)
Total liabilities and stockholders' equity	$ (4,025,227)	$ (3,701,536)

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LONG-TERM DEBT

3 Months Ended

Mar. 31, 2012

LONG-TERM DEBT

LONG-TERM DEBT

Long-term debt included on the condensed consolidated balance sheets consisted of:

(in thousands of U.S. dollars)	March 31, 2012		December 31, 2011
Senior Secured Revolving Credit Facility	$	50,000	$	50,000
Senior Secured Term Loan A	288,750		292,500
Senior Secured Convertible Notes due 2033, net of discount	60		60
6 5/8% Senior Notes due 2021	260,000		260,000
Total debt	598,810		602,560
Current portion long-term debt	15,000		15,000
Long-term debt	$	583,810	$	587,560

Senior Secured Credit Facility

General

On June 27, 2011, we entered into a senior secured credit facility with JPMorgan Chase Bank, N.A., as administrative agent, and a syndicate of lenders jointly arranged by J.P. Morgan Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated and RBS Securities Inc. (the “Senior Secured Credit Facility”). The Senior Secured Credit Facility and related loan documents replaced and terminated our prior credit agreement, dated as of March 2, 2007, as amended (the “Prior Senior Secured Credit Facility”), by and among Valassis, Bear Stearns Corporate Lending Inc., as Administrative Agent, and a syndicate of lenders jointly arranged by Bear, Stearns & Co. Inc. and Banc of America Securities LLC. In connection with the termination of the Prior Senior Secured Credit Facility, all obligations and rights under the related guarantee, security and collateral agency agreement, dated as of March 2, 2007, as amended (the “Prior Security Agreement”), by Valassis and certain of its domestic subsidiaries signatory thereto, as grantors, in favor of Bear Stearns Corporate Lending Inc., in its capacity as collateral agent for the benefit of the Secured Parties (as defined in the Prior Security Agreement), were also simultaneously terminated.

The Senior Secured Credit Facility consists of:

• a five-year term loan A in an aggregate principal amount equal to $300.0 million, with principal repayable in quarterly installments at a rate of 5.0% during each of the first two years from issuance, 10.0% during the third year from issuance, 15.0% during the fourth year from issuance and 11.25% during the fifth year from issuance, with the remaining 53.75% due at maturity (the “Term Loan A”);

• a five-year revolving credit facility in an aggregate principal amount of $100.0 million (the “Revolving Line of Credit”), including $15.0 million available in Euros, Pounds Sterling or Canadian Dollars, $50.0 million available for letters of credit and a $20.0 million swingline loan subfacility, of which $50.0 million was drawn at closing and remains outstanding as of March 31, 2012 (exclusive of outstanding letters of credit described below); and

• an incremental facility pursuant to which, prior to the maturity of the Senior Secured Credit Facility, we may incur additional indebtedness in an amount up to $150.0 million under the Revolving Line of Credit or the Term Loan A or a combination thereof, subject to certain conditions, including receipt of additional lending commitments for such additional indebtedness. The terms of the incremental facility will be substantially similar to the terms of the Senior Secured Credit Facility, except with respect to the pricing of the incremental facility, the interest rate for which could be higher than that for the Revolving Line of Credit and the Term Loan A.

We used the initial borrowing under the Revolving Line of Credit, the proceeds from the Term Loan A and existing cash of $120.0 million to repay the $462.2 million outstanding under our Prior Senior Secured Credit Facility (reflecting all outstanding borrowings thereunder), to pay accrued interest with respect to such loans and to pay the fees and expenses related to the Senior Secured Credit Facility.

All borrowings under our Senior Secured Credit Facility, including, without limitation, amounts drawn under the Revolving Line of Credit, are subject to the satisfaction of customary conditions, including absence of a default and accuracy of representations and warranties. As of March 31, 2012, we had approximately $40.1 million available under the Revolving Line of Credit portion of our Senior Secured Credit Facility (after giving effect to the reductions in availability pursuant to $9.9 million in standby letters of credit outstanding as of March 31, 2012).

Interest and Fees

Borrowings under our Senior Secured Credit Facility bear interest, at our option, at either the alternate base rate (defined as the higher of the prime rate announced by the Administrative Agent, the federal funds effective rate or one-month LIBOR, in each case, plus an applicable interest rate margin) (the “Base Rate”) or at the Eurodollar Rate (one-, two-, three- or six-month LIBOR, at our election, as defined in the credit agreement governing the Senior Secured Credit Facility), except for borrowings made in alternate currencies which may not accrue interest based upon the alternate base rate, in each case, plus an applicable interest rate margin. The applicable margins are currently 0.75% per annum for Base Rate loans and 1.75% per annum for Eurodollar Rate loans. The margins applicable to the borrowings under our Senior Secured Credit Facility may be adjusted based on our consolidated leverage ratio, with 1.00% being the maximum Base Rate margin and 2.00% being the maximum Eurodollar Rate. See Note 7, Derivative Financial Instruments and Fair Value Measurements, for discussion regarding our various interest rate swap agreements.

Guarantees and Security

Our Senior Secured Credit Facility is guaranteed by certain of our existing and future domestic restricted subsidiaries pursuant to a Guarantee and Collateral Agreement. In addition, our obligations under our Senior Secured Credit Facility and the guarantee obligations of the subsidiary guarantors are secured by first priority liens on substantially all of our and our subsidiary guarantors’ present and future assets and by a pledge of all of the equity interests in our domestic subsidiary guarantors and 65% of the capital stock of certain of our existing and future foreign subsidiaries.

The Guarantee and Collateral Agreement also secures our Senior Secured Convertible Notes due 2033 on an equal and ratable basis with the indebtedness under our Senior Secured Credit Facility to the extent required by the indenture governing such notes.

Prepayments

The Senior Secured Credit Facility also contains a requirement that we make mandatory principal prepayments on the Term Loan A and Revolving Line of Credit in certain circumstances, including, without limitation, with 100% of the aggregate net cash proceeds from certain asset sales, casualty events or condemnation recoveries (in each case, to the extent not otherwise used for reinvestment in our business or related business and subject to certain other exceptions). The Senior Secured Credit Facility further provides that, subject to customary notice and minimum amount conditions, we may make voluntary prepayments without payment of premium or penalty.

Covenants

Subject to customary and otherwise agreed upon exceptions, our Senior Secured Credit Facility contains affirmative and negative covenants, including, but not limited to:

• the payment of other obligations;

• the maintenance of organizational existences, including, but not limited to, maintaining our property and insurance;

• compliance with all material contractual obligations and requirements of law;

• limitations on the incurrence of indebtedness;

• limitations on creation and existence of liens;

• limitations on certain fundamental changes to our corporate structure and nature of our business, including mergers;

• limitations on asset sales;

• limitations on restricted payments, including certain dividends and stock repurchases and redemptions;

• limitations on capital expenditures;

• limitations on any investments, provided that certain “permitted acquisitions” and strategic investments are allowed;

• limitations on optional prepayments and modifications of certain debt instruments;

• limitations on modifications to organizational documents;

• limitations on transactions with affiliates;

• limitations on entering into certain swap agreements;

• limitations on negative pledge clauses or clauses restricting subsidiary distributions;

• limitations on sale-leaseback and other lease transactions; and

• limitations on changes to our fiscal year.

Our Senior Secured Credit Facility also requires us to comply with:

• a maximum consolidated leverage ratio, as defined in our Senior Secured Credit Facility (generally, the ratio of our consolidated total debt to consolidated earnings before interest, taxes, depreciation and amortization, or EBITDA, for the most recent four quarters), of 3.50:1.00; and

• a minimum consolidated interest coverage ratio, as defined in our Senior Secured Credit Facility (generally, the ratio of our consolidated EBITDA to consolidated interest expense for the most recent four quarters), of 3.00:1.00.

The following table shows the required and actual financial ratios under our Senior Secured Credit Facility as of March 31, 2012:

	Required Ratio	Actual Ratio
Maximum consolidated leverage ratio	No greater than 3.50:1.00	1.92:1.00
Minimum consolidated interest coverage ratio	No less than 3.00:1.00	10.58:1.00

In addition, we are required to give notice to the administrative agent and the lenders under our Senior Secured Credit Facility of defaults under the facility documentation and other material events, make any new wholly-owned domestic subsidiary (other than an immaterial subsidiary) a subsidiary guarantor and pledge substantially all after-acquired property as collateral to secure our and our subsidiary guarantors’ obligations in respect of the facility.

Events of Default

Our Senior Secured Credit Facility contains customary events of default, including upon a change in control. If such an event of default occurs, the lenders under our Senior Secured Credit Facility would be entitled to take various actions, including in certain circumstances increasing the effective interest rate and accelerating the amounts due under our Senior Secured Credit Facility.

8 ¹/4% Senior Notes due 2015

On January 13, 2011, we commenced a cash tender offer and consent solicitation to purchase any and all of our outstanding 8 ¹/4% Senior Notes due 2015 (the “2015 Notes”) and to amend the indenture governing the 2015 Notes (the "2015 Indenture") to eliminate substantially all of the restrictive covenants and certain events of default. We used the net proceeds from the 2021 Notes (described below) to fund the purchase of the 2015 Notes, the related consent payments pursuant to the tender offer and consent solicitation, and the subsequent redemption of the 2015 Notes that were not tendered and remained outstanding after the expiration of the tender offer and consent solicitation. We recognized a pre-tax loss on extinguishment of debt of $13.4 million during the three months ended March 31, 2011, which represents the difference between the aggregate purchase price and the aggregate principal amount of the 2015 Notes purchased and the write-off of related capitalized debt issuance costs.

6 ⁵/8% Senior Notes due 2021

On January 28, 2011, we issued in a private placement $260.0 million aggregate principal amount of our 6 ⁵/8% Senior Notes due 2021 (the “2021 Notes”). The net proceeds were used to fund the purchase of the outstanding 2015 Notes and the related consent payments in a concurrent tender offer and consent solicitation as described above and the redemption of the remaining outstanding 2015 Notes. We capitalized related debt issuance costs of approximately $5.1 million, which are being amortized over the term of the 2021 Notes.

Interest on the 2021 Notes is payable every six months on February 1 and August 1. The 2021 Notes are fully and unconditionally guaranteed, jointly and severally, by substantially all of our existing and future domestic restricted subsidiaries on a senior unsecured basis.

In July 2011, in accordance with the terms of the registration rights agreement between us and the initial purchasers of the 2021 Notes, we completed an exchange offer to exchange the original notes issued in the private placement for a like principal amount of exchange notes registered under the Securities Act of 1933, as amended. An aggregate principal amount of $260.0 million, or 100%, of the original notes were exchanged for exchange notes in the exchange offer. The exchange notes are substantially identical to the original notes, except that the exchange notes are not subject to certain transfer restrictions.

The 2021 Notes were issued under an indenture with Wells Fargo Bank, National Association, as trustee (the “2021 Indenture”). Subject to a number of exceptions, the 2021 Indenture restricts our ability and the ability of our restricted subsidiaries (as defined in the 2021 Indenture) to incur or guarantee additional indebtedness, transfer or sell assets, make certain investments, pay dividends or make distributions or other restricted payments, create certain liens, merge or consolidate, repurchase stock, create or permit restrictions on the ability of our restricted subsidiaries to pay dividends or make other distributions to us and enter into transactions with affiliates.

We may redeem all or a portion of the 2021 Notes at our option at any time prior to February 1, 2016, at a redemption price equal to 100% of the principal amount of 2021 Notes to be redeemed, plus a make-whole premium as described in the 2021 Indenture, plus accrued and unpaid interest to the redemption date, if any. At any time on or after February 1, 2016, we may redeem all or a portion of the 2021 Notes at our option at the following redemption prices (expressed as percentages of the principal amount thereof) if redeemed during the twelve-month period commencing on February 1 of the years set forth below:

Year	Percentage
2016	103.313%
2017	102.208%
2018	101.104%
2019 and thereafter	100.000%

In addition, we must pay accrued and unpaid interest to the redemption date, if any. On or prior to February 1, 2014, we may also redeem at our option up to 35% of the principal amount of the outstanding 2021 Notes with the proceeds of certain equity offerings at the redemption price specified in the 2021 Indenture, plus accrued and unpaid interest to the date of redemption, if any. Upon the occurrence of a change of control, as defined in the 2021 Indenture, we must make a written offer to purchase all of the 2021 Notes for cash at a purchase price equal to 101% of the principal amount of the 2021 Notes, plus accrued and unpaid interest to the date of repurchase, if any.

Additional Provisions

The indenture governing the Senior Secured Convertible Notes due 2033 contains a cross-default provision which becomes applicable if we default under any mortgage, indenture or instrument evidencing indebtedness for money borrowed by us and the default results in the acceleration of such indebtedness prior to its express maturity, and the principal amount of any such accelerated indebtedness aggregates in excess of $25.0 million. The 2021 Indenture contains a cross-default provision which becomes applicable if we (a) fail to pay the stated principal amount of any of our indebtedness at its final maturity date, or (b) default under any of our indebtedness and the default results in the acceleration of indebtedness, and, in each case, the principal amount of any such indebtedness, together with the principal amount of any other such indebtedness under which there has been a payment default or the maturity of which has been so accelerated, aggregates $50.0 million or more. Our credit agreement contains a cross-default provision which becomes applicable if we (a) fail to make any payment under any indebtedness for money borrowed by us (other than the obligations under such credit agreement) in an aggregate outstanding principal amount of at least $50.0 million or, (b) otherwise default under any such indebtedness, or trigger another event which causes such indebtedness to become due or to be repurchased, prepaid, defeased or redeemed or become subject to an offer to repurchase, prepay, defease or redeem such indebtedness prior to its stated maturity.

Subject to applicable limitations in our Senior Secured Credit Facility and indentures, we may from time to time repurchase our debt in the open market, through tender offers, through exchanges for debt or equity securities, by exercising rights to call, by satisfying put obligations, or in privately negotiated transactions or otherwise.

Covenant Compliance

As of March 31, 2012, we were in compliance with all of our indenture and Senior Secured Credit Facility covenants.

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Repurchase of Common Stock - Additional Information (Detail) In Millions, unless otherwise specified	Mar. 31, 2012
Equity, Class of Treasury Stock [Line Items]
Repurchase of common stock, additional authorized shares	1.4

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Summary of Costs and Ranges of Useful Lives of the Major Classes of Property, Plant and Equipment and Total Accumulated Depreciation related to Property, Plant and Equipment, Net (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended	12 Months Ended
	Mar. 31, 2012	Dec. 31, 2011
Property, Plant and Equipment [Line Items]
Property, plant and equipment	$ 537,338	$ 527,999
Less accumulated depreciation	(390,649)	(379,094)
Property, plant and equipment, net	146,689	148,905
Land, at cost
Property, Plant and Equipment [Line Items]
Property, plant and equipment	7,186	7,167
Buildings, at cost
Property, Plant and Equipment [Line Items]
Property, plant and equipment	37,793	37,511
Property, plant and equipment, Minimum useful lives	10	10
Property, plant and equipment, Maximum useful lives	30	30
Machinery and equipment, at cost
Property, Plant and Equipment [Line Items]
Property, plant and equipment	225,175	217,764
Property, plant and equipment, Minimum useful lives	3	3
Property, plant and equipment, Maximum useful lives	20	20
Office furniture and equipment, at cost
Property, Plant and Equipment [Line Items]
Property, plant and equipment	238,512	236,994
Property, plant and equipment, Minimum useful lives	3	3
Property, plant and equipment, Maximum useful lives	10	10
Leasehold improvements, at cost
Property, Plant and Equipment [Line Items]
Property, plant and equipment	$ 28,672	$ 28,563
Property, plant and equipment, Minimum useful lives	5	5
Property, plant and equipment, Maximum useful lives	10	10

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Inventories (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2012	Dec. 31, 2011
Schedule of Inventory [Line Items]
Raw materials	$ 24,935	$ 28,075
Work in progress	9,001	13,045
Inventories	$ 33,936	$ 41,120

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Revenues, Depreciation/Amortization and Segment Profit by Segment (Detail) (USD $)	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Segment Reporting Information [Line Items]
Revenues from external customers	$ 518,585,000	$ 546,979,000
Intersegment revenues	27,500,000	23,700,000
Depreciation and amortization	14,710,000	15,729,000
Segment profit (loss)	48,900,000	56,800,000
Shared Mail
Segment Reporting Information [Line Items]
Revenues from external customers	328,100,000	322,600,000
Intersegment revenues	4,500,000	4,500,000
Depreciation and amortization	8,300,000	10,000,000
Segment profit (loss)	42,400,000	42,100,000
Neighborhood Targeted
Segment Reporting Information [Line Items]
Revenues from external customers	72,200,000	90,100,000
Intersegment revenues	13,000,000	9,300,000
Depreciation and amortization	1,100,000	1,000,000
Segment profit (loss)	(1,600,000)	1,900,000
Free Standing Inserts (FSI)
Segment Reporting Information [Line Items]
Revenues from external customers	76,300,000	89,200,000
Intersegment revenues	10,000,000	9,800,000
Depreciation and amortization	3,200,000	3,000,000
Segment profit (loss)	5,400,000	7,400,000
International, Digital Media and Services
Segment Reporting Information [Line Items]
Revenues from external customers	42,000,000	45,100,000
Intersegment revenues	0	100,000
Depreciation and amortization	2,100,000	1,700,000
Segment profit (loss)	$ 2,700,000	$ 5,400,000

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Goodwill (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2012	Dec. 31, 2011
Goodwill [Line Items]
Goodwill	$ 636,471	$ 636,471
Shared Mail
Goodwill [Line Items]
Goodwill	534,184	534,184
Neighborhood Targeted
Goodwill [Line Items]
Goodwill	5,325	5,325
Free Standing Inserts (FSI)
Goodwill [Line Items]
Goodwill	22,357	22,357
International, Digital Media and Services
Goodwill [Line Items]
Goodwill	$ 74,605	$ 74,605

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Components of Other Intangible Assets, Net (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended	12 Months Ended
	Mar. 31, 2012	Dec. 31, 2011
Intangible Assets by Major Class [Line Items]
Finite-lived intangible assets, Gross Amount	$ 180,457	$ 180,457
Finite-lived intangible assets, Accumulated Amortization	(57,641)	(54,485)
Finite-lived intangible assets, Net Amount	122,816	125,972
Indefinite-lived intangible assets, Net Amount	87,641	87,641
Other intangible assets, Net Amount	210,457	213,613
Mailing lists, non compete agreements and other
Intangible Assets by Major Class [Line Items]
Finite-lived intangible assets, Gross Amount	40,457	40,457
Finite-lived intangible assets, Accumulated Amortization	(10,399)	(9,894)
Finite-lived intangible assets, Net Amount	30,058	30,563
Weighted average remaining useful life	14.9	15.1
Customer relationships
Intangible Assets by Major Class [Line Items]
Finite-lived intangible assets, Gross Amount	140,000	140,000
Finite-lived intangible assets, Accumulated Amortization	(47,242)	(44,591)
Finite-lived intangible assets, Net Amount	$ 92,758	$ 95,409
Weighted average remaining useful life	8.7	9.0

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GOODWILL AND OTHER INTANGIBLE ASSETS

3 Months Ended

Mar. 31, 2012

GOODWILL AND OTHER INTANGIBLE ASSETS

GOODWILL AND OTHER INTANGIBLE ASSETS

Goodwill included on the condensed consolidated balance sheets consisted of:

(in thousands of U.S. dollars)	March 31, 2012		December 31, 2011
Shared Mail	$	534,184	$	534,184
Neighborhood Targeted	5,325		5,325
Free-standing Inserts	22,357		22,357
International, Digital Media & Services	74,605		74,605
Goodwill	$	636,471	$	636,471

The components of other intangible assets, net included on the condensed consolidated balance sheets consisted of:

	March 31, 2012								December 31, 2011
(in thousands of U.S. dollars)	Gross Amount		Accumulated Amortization			Net Amount		Weighted Average Remaining Useful Life (in years)	Gross Amount		Accumulated Amortization			Net Amount		Weighted Average Remaining Useful Life (in years)
Finite-lived intangible assets:
Mailing lists, non compete agreements and other	$	40,457	$	(10,399	)	$	30,058	14.9	$	40,457	$	(9,894	)	$	30,563	15.1
Customer relationships	140,000		(47,242		)	92,758		8.7	140,000		(44,591		)	95,409		9.0
Total	$	180,457	(57,641		)	122,816			$	180,457	(54,485		)	125,972
Indefinite-lived intangible assets:
Valassis name, tradenames, trademarks and other						87,641								87,641
Other intangible assets, net						$	210,457							$	213,613

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Long-Term Debt (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2012	Dec. 31, 2011
Debt Instrument [Line Items]
Total Debt	$ 598,810	$ 602,560
Current portion, long-term debt	15,000	15,000
Long-term debt	583,810	587,560
Senior Secured Revolving Credit Facility
Debt Instrument [Line Items]
Total Debt	50,000	50,000
Senior Secured Term Loan A
Debt Instrument [Line Items]
Total Debt	288,750	292,500
Senior Secured Convertible Notes due 2033, net of discount
Debt Instrument [Line Items]
Total Debt	60	60
Senior Notes due 2021
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	6.625%	6.625%
Total Debt	$ 260,000	$ 260,000

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Impact of Derivative Financial Instruments on Condensed Consolidated Financial Statements (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Pre-tax Gain (Loss) Recognized in Earnings	$ 1.0	$ 0.2
Amount of Pre-tax (Loss) Recognized in OCI	0.7	0.2
Amount of Pre-tax Loss Reclassified from AOCI into Earnings	0	(1.3)
Designated as Hedging Instrument | Interest rate swap contract
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Pre-tax Gain (Loss) Recognized in Earnings	0	0
Amount of Pre-tax (Loss) Recognized in OCI	0.7	0.2
Amount of Pre-tax Loss Reclassified from AOCI into Earnings	0	(1.3)
Not Designated as Hedging Instrument | Interest rate swap contract
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Pre-tax Gain (Loss) Recognized in Earnings	(0.1)	0
Amount of Pre-tax (Loss) Recognized in OCI	0	0
Amount of Pre-tax Loss Reclassified from AOCI into Earnings	0	0
Not Designated as Hedging Instrument | Foreign exchange contracts
Derivative Instruments, Gain (Loss) [Line Items]
Amount of Pre-tax Gain (Loss) Recognized in Earnings	1.1	0.2
Amount of Pre-tax (Loss) Recognized in OCI	0	0
Amount of Pre-tax Loss Reclassified from AOCI into Earnings	$ 0	$ 0

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Condensed Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Mar. 31, 2012	Dec. 31, 2011
Current assets:
Cash and cash equivalents	$ 107,199	$ 101,971
Accounts receivable, net (Note 1)	417,010	448,320
Inventories (Note 1)	33,936	41,120
Prepaid expenses and other	26,853	37,655
Total current assets	584,998	629,066
Property, plant and equipment, net (Note 1)	146,689	148,905
Goodwill (Note 2)	636,471	636,471
Other intangible assets, net (Note 2)	210,457	213,613
Other assets	15,062	16,392
Total assets	1,593,677	1,644,447
Current liabilities:
Current portion long-term debt (Note 3)	15,000	15,000
Accounts payable	281,873	334,378
Progress billings	44,131	39,975
Accrued expenses (Note 4)	65,291	98,409
Total current liabilities	406,295	487,762
Long-term debt (Note 3)	583,810	587,560
Deferred income taxes	67,154	67,404
Other non-current liabilities	52,264	52,187
Total liabilities	1,109,523	1,194,913
Commitments and contingencies (Note 5)
Stockholders' equity:
Preferred stock ($0.01 par value; 25,000,000 shares authorized; no shares issued or outstanding at March 31, 2012 and December 31, 2011)	0	0
Common stock ($0.01 par value; 100,000,000 shares authorized; 65,394,999 and 65,398,539 shares issued at March 31, 2012 and December 31, 2011, respectively; 42,904,300 and 42,347,368 shares outstanding at March 31, 2012 and December 31, 2011, respectively)	654	654
Additional paid-in capital	113,577	123,881
Retained earnings	1,047,987	1,021,566
Accumulated other comprehensive income	2,721	2,775
Treasury stock, at cost (22,490,699 and 23,051,171 shares at March 31, 2012 and December 31, 2011, respectively)	(680,785)	(699,342)
Total stockholders' equity	484,154	449,534
Total liabilities and stockholders' equity	$ 1,593,677	$ 1,644,447

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Domestic and Foreign Revenues (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Segment Reporting Information [Line Items]
Revenues	$ 518,585	$ 546,979
UNITED STATES
Segment Reporting Information [Line Items]
Revenues	506,200	534,900
Foreign
Segment Reporting Information [Line Items]
Revenues	$ 12,400	$ 12,100

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Condensed Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Cash flows from operating activities:
Net earnings	$ 26,421	$ 21,411
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization	14,710	15,729
Amortization of debt issuance costs	518	478
Provision for losses on accounts receivable	543	931
Loss on extinguishment of debt	0	2,782
(Gain) loss on derivatives, net	(178)	1,076
Gain (loss) on sale of property, plant and equipment	(79)	40
Stock-based compensation expense	2,287	1,912
Deferred income taxes	(1,004)	(1,944)
Changes in assets and liabilities:
Accounts receivable, net	30,767	53,429
Inventories	7,184	2,334
Prepaid expenses and other	10,939	1,351
Other assets	873	(1,352)
Accounts payable	(52,505)	(43,914)
Progress billings	(4,156)	7,255
Accrued expenses	31,629	30,610
Other non-current liabilities	637	2,320
Total adjustments	(12,047)	(3,445)
Net cash provided by (used in) operating activities	14,374	17,966
Cash flows from investing activities:
Additions to property, plant and equipment	(9,265)	(5,024)
Proceeds from sale of property, plant and equipment	79	20
Proceeds from sale of available-for-sale securities	0	1,494
Net cash used in investing activities	(9,186)	(3,510)
Net Cash Provided by (Used in) Financing Activities [Abstract]
Proceeds from Issuance of Debt	0	260,000
Repayments of long-term debt	(3,750)	(243,989)
Debt issuance costs	0	(4,880)
Repurchases of common stock	(1,366)	(45,530)
Proceeds from issuance of common stock	5,685	3,133
Net cash provided (used in) by financing activities	569	(31,266)
Effect of exchange rate changes on cash and cash equivalents	(529)	1,066
Net increase (decrease) in cash and cash equivalents	5,228	(15,744)
Cash and cash equivalents at beginning of period	101,971	245,935
Cash and cash equivalents at end of period	107,199	230,191
Supplemental disclosure of cash flow information:
Cash paid during the period for interest	11,192	12,819
Cash paid during the period for income taxes	7,630	8,445
Non-cash financing activities:
Stock issued under stock-based compensation plans	$ 0	$ 1,193

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Redemption Prices (Expressed as Percentages of the Principal Amount Thereof) (Detail) (Senior Notes due 2021)	Jan. 28, 2011
2016
Debt Instrument [Line Items]
Debt Instrument Redemption Price	103.313%
2017
Debt Instrument [Line Items]
Debt Instrument Redemption Price	102.208%
2018
Debt Instrument [Line Items]
Debt Instrument Redemption Price	101.104%
2019 and Thereafter
Debt Instrument [Line Items]
Debt Instrument Redemption Price	100.00%

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EARNINGS PER SHARE (Tables)

3 Months Ended

Mar. 31, 2012

Earnings Per Common Share Data

Earnings per common share data were as follows:

	Three Months Ended
	March 31,
(in thousands, except per share data)	2012			2011
Net earnings	$	26,421		$	21,411
Weighted-average common shares outstanding, basic	42,114			49,929
Shares issued on exercise of dilutive options	4,894			6,693
Shares purchased with assumed proceeds of options and unearned restricted shares	(2,965		)	(4,293		)
Shares contingently issuable	2			4
Weighted-average common shares outstanding, diluted	44,045			52,333
Net earnings per common share, diluted	$	0.60		$	0.41
Anti-dilutive options excluded from calculation of weighted-average common shares outstanding, diluted	3,486			2,565

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Accrued Expenses (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2012	Dec. 31, 2011
Schedule of Accrued Liabilities [Line Items]
Accrued interest	$ 2,998	$ 7,205
Accrued compensation and benefits	30,117	55,030
Other accrued expenses	32,176	36,174
Accrued expenses	$ 65,291	$ 98,409

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REPURCHASES OF COMMON STOCK (Tables)

3 Months Ended

Mar. 31, 2012

REPURCHASES OF COMMON STOCK

The following table summarizes our repurchases of common stock during the indicated periods:

	Three Months Ended
	March 31,
in thousands, except per share data	2012		2011
Shares repurchased	59		1,623
Aggregate repurchase price	$	1,366	$	45,530
Average price paid per share	$	23.10	$	28.06

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BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

3 Months Ended

Mar. 31, 2012

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP principles for complete financial statements. In the opinion of management, the information contained herein reflects all adjustments necessary for a fair presentation of the information presented. All such adjustments are of a normal recurring nature. The results of operations for the interim periods are not necessarily indicative of results to be expected for the fiscal year. For further information, refer to the consolidated financial statements and footnotes thereto included in the Valassis Communications, Inc. (“Valassis,” “we,” and “our”) Annual Report on Form 10-K for the year ended December 31, 2011 (the “2011 Form 10-K”).

Significant Accounting Policies

Accounts Receivable

The allowance for doubtful accounts was $7.3 million and $6.9 million as of March 31, 2012 and December 31, 2011, respectively.

Income Taxes

We are required to adjust our effective tax rate each quarter to be consistent with our estimated annual effective tax rate. We are also required to record the tax impact of certain unusual or infrequently occurring items, including the effects of changes in tax laws or rates, in the interim period in which they occur. The effective tax rate during a particular quarter may be higher or lower as a result of the timing of actual earnings versus annual projections.

Inventories

Inventories are accounted for at the lower of cost, determined on a first in, first out (“FIFO”) basis, or market. Inventories included on the condensed consolidated balance sheets consisted of:

(in thousands of U.S. dollars)	March 31, 2012		December 31, 2011
Raw materials	$	24,935	$	28,075
Work in progress	9,001		13,045
Inventories	$	33,936	$	41,120

Property, Plant and Equipment

The following table summarizes the costs and ranges of useful lives of the major classes of property, plant and equipment and the total accumulated depreciation related to property, plant and equipment, net included on the condensed consolidated balance sheets:

	Useful Lives	March 31, 2012			December 31, 2011
	(in years)	(in thousands of U.S. dollars)
Land, at cost	N/A	$	7,186		$	7,167
Buildings, at cost	10 - 30	37,793			37,511
Machinery and equipment, at cost	3 - 20	225,175			217,764
Office furniture and equipment, at cost	3 - 10	238,512			236,994
Leasehold improvements, at cost	5 - 10	28,672			28,563
		537,338			527,999
Less accumulated depreciation		(390,649		)	(379,094		)
Property, plant and equipment, net		$	146,689		$	148,905

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Condensed Consolidated Balance Sheets (Parenthetical) (USD $)	Mar. 31, 2012	Dec. 31, 2011
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, shares authorized	25,000,000	25,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	65,394,999	65,398,539
Common stock, shares outstanding	42,904,300	42,347,368
Treasury stock, shares	22,490,699	23,051,171

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BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Policies)

3 Months Ended

Mar. 31, 2012

Accounts Receivable

Accounts Receivable

The allowance for doubtful accounts was $7.3 million and $6.9 million as of March 31, 2012 and December 31, 2011, respectively.

Income Taxes

Income Taxes

We are required to adjust our effective tax rate each quarter to be consistent with our estimated annual effective tax rate. We are also required to record the tax impact of certain unusual or infrequently occurring items, including the effects of changes in tax laws or rates, in the interim period in which they occur. The effective tax rate during a particular quarter may be higher or lower as a result of the timing of actual earnings versus annual projections.

Inventories

Inventories

Inventories are accounted for at the lower of cost, determined on a first in, first out (“FIFO”) basis, or market. Inventories included on the condensed consolidated balance sheets consisted of:

(in thousands of U.S. dollars)	March 31, 2012		December 31, 2011
Raw materials	$	24,935	$	28,075
Work in progress	9,001		13,045
Inventories	$	33,936	$	41,120

Property, Plant and Equipment

Property, Plant and Equipment

The following table summarizes the costs and ranges of useful lives of the major classes of property, plant and equipment and the total accumulated depreciation related to property, plant and equipment, net included on the condensed consolidated balance sheets:

	Useful Lives	March 31, 2012			December 31, 2011
	(in years)	(in thousands of U.S. dollars)
Land, at cost	N/A	$	7,186		$	7,167
Buildings, at cost	10 - 30	37,793			37,511
Machinery and equipment, at cost	3 - 20	225,175			217,764
Office furniture and equipment, at cost	3 - 10	238,512			236,994
Leasehold improvements, at cost	5 - 10	28,672			28,563
		537,338			527,999
Less accumulated depreciation		(390,649		)	(379,094		)
Property, plant and equipment, net		$	146,689		$	148,905

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Document and Entity Information	3 Months Ended
	Mar. 31, 2012	May 01, 2012
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q1
Trading Symbol	VCI
Entity Registrant Name	VALASSIS COMMUNICATIONS INC
Entity Central Index Key	0000883293
Document Period End Date	Mar. 31, 2012
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		42,759,940

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BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES (Tables)

3 Months Ended

Mar. 31, 2012

Inventories

Inventories included on the condensed consolidated balance sheets consisted of:

(in thousands of U.S. dollars)	March 31, 2012		December 31, 2011
Raw materials	$	24,935	$	28,075
Work in progress	9,001		13,045
Inventories	$	33,936	$	41,120

Summary of Costs and Ranges of Useful Lives of the Major Classes of Property, Plant and Equipment and Total Accumulated Depreciation related to Property, Plant and Equipment, Net

The following table summarizes the costs and ranges of useful lives of the major classes of property, plant and equipment and the total accumulated depreciation related to property, plant and equipment, net included on the condensed consolidated balance sheets:

	Useful Lives	March 31, 2012			December 31, 2011
	(in years)	(in thousands of U.S. dollars)
Land, at cost	N/A	$	7,186		$	7,167
Buildings, at cost	10 - 30	37,793			37,511
Machinery and equipment, at cost	3 - 20	225,175			217,764
Office furniture and equipment, at cost	3 - 10	238,512			236,994
Leasehold improvements, at cost	5 - 10	28,672			28,563
		537,338			527,999
Less accumulated depreciation		(390,649		)	(379,094		)
Property, plant and equipment, net		$	146,689		$	148,905

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Condensed Consolidated Statements of Income (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Revenues	$ 518,585	$ 546,979
Costs and expenses:
Cost of sales	388,894	408,577
Selling, general and administrative	77,617	78,427
Amortization expense	3,156	3,156
Total costs and expenses	469,667	490,160
Earnings (loss) from operations	48,918	56,819
Other expenses and income:
Interest expense	7,054	9,775
Interest income	(58)	(139)
Loss on extinguishment of debt (Note 3)	0	13,352
Other income, net	(697)	(876)
Total other expenses (income), net	(6,299)	(22,112)
Earnings (loss) before income taxes	42,619	34,707
Income tax expense (Note 1)	16,198	13,296
Net earnings	$ 26,421	$ 21,411
Net earnings per common share, basic (Note 7)	$ 0.63	$ 0.43
Net earnings per common share, diluted (Note 7)	$ 0.60	$ 0.41
Weighted-average common shares outstanding, basic (Note 7)	42,114	49,929
Weighted-average common shares outstanding, diluted (Note 7)	44,045	52,333

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EARNINGS PER SHARE

3 Months Ended

Mar. 31, 2012

EARNINGS PER SHARE

EARNINGS PER SHARE

Earnings per common share data were as follows:

	Three Months Ended
	March 31,
(in thousands, except per share data)	2012			2011
Net earnings	$	26,421		$	21,411
Weighted-average common shares outstanding, basic	42,114			49,929
Shares issued on exercise of dilutive options	4,894			6,693
Shares purchased with assumed proceeds of options and unearned restricted shares	(2,965		)	(4,293		)
Shares contingently issuable	2			4
Weighted-average common shares outstanding, diluted	44,045			52,333
Net earnings per common share, diluted	$	0.60		$	0.41
Anti-dilutive options excluded from calculation of weighted-average common shares outstanding, diluted	3,486			2,565

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COMMITMENTS AND CONTINGENCIES

3 Months Ended

Mar. 31, 2012

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

The application and interpretation of applicable state sales tax laws to certain of our products is uncertain. Accordingly, we may be exposed to additional sales tax liability to the extent various state jurisdictions determine that certain of our products are subject to such jurisdictions’ sales tax. As of March 31, 2012, we have recorded a liability of $7.5 million, reflecting our best estimate of our potential sales tax liability.

In addition to the above matter, we are involved in various claims and legal actions arising in the ordinary course of business. In the opinion of management, the ultimate disposition of these matters will not have a material effect on our financial position, results of operations or liquidity.

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DERIVATIVE FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Tables)

3 Months Ended

Mar. 31, 2012

Notional Amounts of Derivative Financial Instruments and Related Fair Values Measured on Recurring Basis

The notional amounts of derivative financial instruments and related fair values measured on a recurring basis and included in the condensed consolidated balance sheets were as follows:

	Notional Amounts				Fair Values
(in millions of U.S. dollars)	March 31, 2012		December 31, 2011		March 31, 2012			December 31, 2011			Balance Sheet Location
Derivatives designated as cash flow hedging instruments:
Interest rate swap contract	$	186.3	$	186.3	$	(5.3	)	$	(4.6	)	Other non-current liabilities
Derivatives not receiving hedge accounting treatment:
Interest rate swap contract	100.0		140.0		(0.4		)	(0.8		)	Accrued expenses
Foreign exchange contracts	9.8		11.7		0.1			(1.0		)	Prepaid expenses and other/Accrued expenses
Total derivative financial instruments	$	296.1	$	338.0	$	(5.6	)	$	(6.4	)

Impact of Derivative Financial Instruments on Condensed Consolidated Financial Statements

The following table summarizes the impact of derivative financial instruments on the condensed consolidated financial statements for the indicated period:

	Three Months Ended
	March 31,
	2012			2011		2012		2011		2012		2011
(in millions of U.S. Dollars)	Amount of Pre-tax Gain (Loss) Recognized in Earnings*					Amount of Pre-tax Loss Recognized in OCI				Amount of Pre-tax Loss Reclassified from AOCI into Earnings*
Derivatives designated as cash flow hedging instruments:
Interest rate swap contract	$	—		$	—	$	0.7	$	0.2	$	—	$	(1.3	)
Derivatives not receiving hedge accounting treatment:
Interest rate swap contracts	$	(0.1	)	$	—	$	—	$	—	$	—	$	—
Foreign exchange contracts	1.1			0.2		—		—		—		—
	$	1.0		$	0.2	$	0.7	$	0.2	$	—	$	(1.3	)

 * Amounts recognized in earnings related to interest rate swap contracts are included in interest expense in the unaudited condensed consolidated statements of income and amounts recognized in earnings related to foreign exchange contracts are included in cost of sales in the unaudited condensed consolidated statements of income.

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GOODWILL AND OTHER INTANGIBLE ASSETS (Tables)

3 Months Ended

Mar. 31, 2012

Goodwill

Goodwill included on the condensed consolidated balance sheets consisted of:

(in thousands of U.S. dollars)	March 31, 2012		December 31, 2011
Shared Mail	$	534,184	$	534,184
Neighborhood Targeted	5,325		5,325
Free-standing Inserts	22,357		22,357
International, Digital Media & Services	74,605		74,605
Goodwill	$	636,471	$	636,471

Components of Other Intangible Assets, Net

The components of other intangible assets, net included on the condensed consolidated balance sheets consisted of:

	March 31, 2012								December 31, 2011
(in thousands of U.S. dollars)	Gross Amount		Accumulated Amortization			Net Amount		Weighted Average Remaining Useful Life (in years)	Gross Amount		Accumulated Amortization			Net Amount		Weighted Average Remaining Useful Life (in years)
Finite-lived intangible assets:
Mailing lists, non compete agreements and other	$	40,457	$	(10,399	)	$	30,058	14.9	$	40,457	$	(9,894	)	$	30,563	15.1
Customer relationships	140,000		(47,242		)	92,758		8.7	140,000		(44,591		)	95,409		9.0
Total	$	180,457	(57,641		)	122,816			$	180,457	(54,485		)	125,972
Indefinite-lived intangible assets:
Valassis name, tradenames, trademarks and other						87,641								87,641
Other intangible assets, net						$	210,457							$	213,613

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SEGMENT REPORTING

3 Months Ended

Mar. 31, 2012

SEGMENT REPORTING

SEGMENT REPORTING

Our segments meeting the quantitative thresholds to be considered reportable are Shared Mail, Neighborhood Targeted and Free-standing Inserts (“FSI”). All other lines of business fall below a materiality threshold and are, therefore, combined together in an “other” segment named International, Digital Media & Services. These business lines include NCH Marketing Services, Inc., Valassis Canada, Inc., Promotion Watch, direct mail, analytics, digital and in-store. Our reportable segments are strategic business units that offer different products and services and are subject to regular review by our chief operating decision-maker. They are managed separately because each business requires different executional strategies and caters to different client marketing needs.

The accounting policies of the segments are the same as those described in the 2011 Form 10-K and Note 1, Basis of Presentation and Significant Accounting Policies. We evaluate reportable segment performance based on segment profit, which we define as earnings from operations excluding unusual or infrequently occurring items. Assets and nonoperating expenses are not allocated to reportable segments and are not used to assess the performance of a reportable segment.

The following table sets forth, by segment, revenues, depreciation/amortization and segment profit for the indicated periods:

	Three Months Ended
	March 31,
(in millions of U.S. dollars)	Shared Mail		Neighborhood Targeted			FSI		International, Digital Media & Services		Total
2012
Revenues from external customers	$	328.1	$	72.2		$	76.3	$	42.0	$	518.6
Intersegment revenues	$	4.5	$	13.0		$	10.0	$	—	$	27.5
Depreciation/amortization	$	8.3	$	1.1		$	3.2	$	2.1	$	14.7
Segment profit (loss)1	$	42.4	$	(1.6	)	$	5.4	$	2.7	$	48.9
2011
Revenues from external customers	$	322.6	$	90.1		$	89.2	$	45.1	$	547.0
Intersegment revenues	$	4.5	$	9.3		$	9.8	$	0.1	$	23.7
Depreciation/amortization	$	10.0	$	1.0		$	3.0	$	1.7	$	15.7
Segment profit1	$	42.1	$	1.9		$	7.4	$	5.4	$	56.8
1 Total segment profit is equivalent to Earnings from operations for the three months ended March 31, 2012 and 2011.

Domestic and foreign revenues were as follows:

	Three Months Ended
	March 31,
(in millions of U.S. dollars)	2012		2011
United States	$	506.2	$	534.9
Foreign	12.4		12.1
Revenues	$	518.6	$	547.0

Domestic and foreign long-lived assets (property, plant and equipment, net) were as follows:

(in millions of U.S. dollars)	March 31, 2012		December 31, 2011
United States	$	138.4	$	140.7
Foreign	8.3		8.2
Property, plant and equipment, net	$	146.7	$	148.9

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DERIVATIVE FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS

3 Months Ended

Mar. 31, 2012

DERIVATIVE FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS

DERIVATIVE FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS

We are exposed to market risks arising from adverse changes in foreign exchange rates and interest rates. We manage these risks through a variety of strategies which include the use of derivatives. Certain derivatives are designated as cash flow hedges and qualify for hedge accounting treatment, while others do not qualify or have not been designated as hedges and are marked to market through earnings. The notional amounts of derivative financial instruments and related fair values measured on a recurring basis and included in the condensed consolidated balance sheets were as follows:

	Notional Amounts				Fair Values
(in millions of U.S. dollars)	March 31, 2012		December 31, 2011		March 31, 2012			December 31, 2011			Balance Sheet Location
Derivatives designated as cash flow hedging instruments:
Interest rate swap contract	$	186.3	$	186.3	$	(5.3	)	$	(4.6	)	Other non-current liabilities
Derivatives not receiving hedge accounting treatment:
Interest rate swap contract	100.0		140.0		(0.4		)	(0.8		)	Accrued expenses
Foreign exchange contracts	9.8		11.7		0.1			(1.0		)	Prepaid expenses and other/Accrued expenses
Total derivative financial instruments	$	296.1	$	338.0	$	(5.6	)	$	(6.4	)

The fair values of our interest rate swap contracts and foreign exchange contracts are determined based on third-party valuation models and observable foreign exchange forward contract rates, respectively, both of which represent Level 2 fair value inputs.

The following table summarizes the impact of derivative financial instruments on the condensed consolidated financial statements for the indicated period:

	Three Months Ended
	March 31,
	2012			2011		2012		2011		2012		2011
(in millions of U.S. Dollars)	Amount of Pre-tax Gain (Loss) Recognized in Earnings*					Amount of Pre-tax Loss Recognized in OCI				Amount of Pre-tax Loss Reclassified from AOCI into Earnings*
Derivatives designated as cash flow hedging instruments:
Interest rate swap contract	$	—		$	—	$	0.7	$	0.2	$	—	$	(1.3	)
Derivatives not receiving hedge accounting treatment:
Interest rate swap contracts	$	(0.1	)	$	—	$	—	$	—	$	—	$	—
Foreign exchange contracts	1.1			0.2		—		—		—		—
	$	1.0		$	0.2	$	0.7	$	0.2	$	—	$	(1.3	)

 * Amounts recognized in earnings related to interest rate swap contracts are included in interest expense in the unaudited condensed consolidated statements of income and amounts recognized in earnings related to foreign exchange contracts are included in cost of sales in the unaudited condensed consolidated statements of income.

Interest Rate Swaps

On December 17, 2009, we entered into an interest rate swap agreement with an initial notional amount of $300.0 million to fix three-month LIBOR at 2.005%, for an effective rate of 4.255%, including the applicable margin, for an equivalent portion of our variable rate debt under our Prior Senior Secured Credit Facility. The effective date of this agreement was December 31, 2010. The notional amount of $300.0 million amortizes by $40.0 million at the end of every quarter until it reaches $100.0 million for the quarter ending June 30, 2012, the expiration date. The swap was designated as, and qualified as, a cash flow hedge through the termination of the Prior Senior Secured Credit Facility on June 27, 2011. This interest rate swap remains in effect and changes in the fair value of this swap subsequent to the termination of hedge accounting have been, and will continue to be recognized in earnings as a component of interest expense until the swap expires.

On July 6, 2011, we entered into an interest rate swap agreement with an initial notional amount of $186.3 million. The effective date of this agreement is June 30, 2012, the expiration date of our existing interest rate swap. Under the swap agreement, we are required to make quarterly payments at a fixed interest rate of 1.8695% per annum to the counterparty on an amortizing notional amount in exchange for receiving variable payments based on the three-month LIBOR interest rate for the same notional amount. After giving effect to the swap agreement, our effective interest rate for the notional amount, based on the current applicable margin under our Senior Secured Credit Facility, will be 3.6195% per annum. The initial notional amount of $186.3 million. amortizes quarterly by (i) $2,812,500 from the effective date through the quarter ending September 30, 2013, (ii) $5,625,000 from September 30, 2013 through the quarter ending September 30, 2014, and (iii) $8,437,500 from September 30, 2014 until June 30, 2015, the expiration date of the agreement. The swap is designated as and qualifies as a cash flow hedge.

Foreign Currency

Currencies to which we have exposure are the Mexican peso, Canadian dollar, British pound, Polish zloty and Euro. Currency restrictions are not expected to have a significant effect on our cash flows, liquidity, or capital resources. We purchase the Mexican peso and Polish zloty under two to twelve-month forward foreign exchange contracts to stabilize the cost of production. As of March 31, 2012, we had a commitment to purchase $9.0 million in Mexican pesos and $0.8 million in Polish zlotys over the next year.

Long-Term Debt

The estimated fair market value of our long-term debt was $3.0 million above carrying value as of March 31, 2012 and $25.0 million below carrying value as of December 31, 2011. Our 2021 Notes are traded in an active market with the fair value determined based on quoted active market prices. Borrowings under our Senior Secured Credit Facility are not traded in an active market and are valued based on an implied price derived from industry averages and relative loan performance.

Cash and Cash Equivalents

The carrying amounts of cash and cash equivalents and accruals approximate fair value due to the near-term maturity of these instruments.

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REPURCHASES OF COMMON STOCK

3 Months Ended

Mar. 31, 2012

REPURCHASES OF COMMON STOCK

REPURCHASES OF COMMON STOCK

The following table summarizes our repurchases of common stock during the indicated periods:

	Three Months Ended
	March 31,
in thousands, except per share data	2012		2011
Shares repurchased	59		1,623
Aggregate repurchase price	$	1,366	$	45,530
Average price paid per share	$	23.10	$	28.06

As of March 31, 2012, we had authorization to repurchase an additional 1.4 million shares of our common stock under the share repurchase program approved by our Board of Directors.

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GUARANTOR AND NON-GUARANTOR CONDENSED CONSOLIDATING FINANCIAL STATEMENTS

3 Months Ended

Mar. 31, 2012

GUARANTOR AND NON-GUARANTOR CONDENSED CONSOLIDATING FINANCIAL STATEMENTS

GUARANTOR AND NON-GUARANTOR CONDENSED CONSOLIDATING FINANCIAL STATEMENTS

The following information is presented in accordance with Rule 3-10 of Regulation S-X. The operating and investing activities of the separate legal entities included in the consolidated financial statements are fully interdependent and integrated. Revenues and operating expenses of the separate legal entities include intercompany charges for management and other services. The 2021 Notes issued by Valassis (referred to for purposes of this note only as the “Parent Company”) are guaranteed by substantially all of the Parent Company’s domestic wholly-owned subsidiaries (collectively, the “Guarantor Subsidiaries”) on a senior unsecured basis. Each of the Guarantor Subsidiaries is 100% owned, directly or indirectly, by the Parent Company and has guaranteed the 2021 Notes on a joint and several, full and unconditional basis, subject to certain customary exceptions. Pursuant to the terms of the 2021 Indenture, the Guarantor Subsidiaries are subject to release under certain customary conditions as described below. Non-wholly-owned subsidiaries, joint ventures, partnerships and foreign subsidiaries (collectively, the “Non-Guarantor Subsidiaries”) are not guarantors of these obligations. Substantially all of the Guarantor Subsidiaries also guarantee the Parent Company’s Senior Secured Credit Facility.

The 2021 Indenture provides for a Guarantor Subsidiary to be automatically and unconditionally released and discharged from its guarantee obligations in certain circumstances, including:

• The sale or other transfer or disposition of all of the Guarantor Subsidiary's capital stock to any person that is not an affiliate of the Parent Company;

• The sale or other transfer of all or substantially all the assets or capital stock of a Guarantor Subsidiary, by way of merger, consolidation or otherwise, to any person that is not an affiliate of the Parent Company;

• If a Guarantor Subsidiary ceases to be a “Domestic Restricted Subsidiary” for purposes of the indenture covenants; and

• Legal defeasance or covenant defeasance of the indenture obligations when provision has been made for them to be fully satisfied.

Condensed Consolidating Balance Sheet

March 31, 2012

(in thousands of U.S. dollars)

	Parent Company			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Adjustments			Consolidated Total
Assets
Current assets:
Cash and cash equivalents	$	77,346		$	5,936		$	23,917		$	—		$	107,199
Accounts receivable, net	105,446			287,803			23,761			—			417,010
Inventories	26,060			7,873			3			—			33,936
Prepaid expenses and other (including intercompany)	1,080,077			2,379,564			1,457			(3,434,245		)	26,853
Total current assets	1,288,929			2,681,176			49,138			(3,434,245		)	584,998
Property, plant and equipment, net	21,947			123,093			1,649			—			146,689
Goodwill	27,684			601,798			6,989			—			636,471
Other intangible assets, net	11,552			198,905			—			—			210,457
Investments	569,779			24,225			—			(590,982		)	3,022
Intercompany note receivable (payable)	357,635			(357,499		)	(136		)	—			—
Other assets	9,152			5,030			(2,142		)	—			12,040
Total assets	$	2,286,678		$	3,276,728		$	55,498		$	(4,025,227	)	$	1,593,677
Liabilities and Stockholders’ Equity
Current liabilities:
Current portion, long-term debt	$	15,000		$	—		$	—		$	—		$	15,000
Accounts payable and intercompany payable	1,126,693			2,578,120			11,305			(3,434,245		)	281,873
Progress billings	20,390			10,798			12,943			—			44,131
Accrued expenses	30,140			27,967			7,184			—			65,291
Total current liabilities	1,192,223			2,616,885			31,432			(3,434,245		)	406,295
Long-term debt	583,810			—			—			—			583,810
Deferred income taxes	(3,091		)	74,241			(3,996		)	—			67,154
Other non-current liabilities	29,582			17,914			4,768			—			52,264
Total liabilities	1,802,524			2,709,040			32,204			(3,434,245		)	1,109,523
Stockholders’ equity	484,154			567,688			23,294			(590,982		)	484,154
Total liabilities and stockholders’ equity	$	2,286,678		$	3,276,728		$	55,498		$	(4,025,227	)	$	1,593,677

Condensed Consolidating Balance Sheet

December 31, 2011

(in thousands of U.S. dollars)

	Parent Company			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Adjustments			Consolidated Total
Assets
Current assets:
Cash and cash equivalents	$	68,887		$	7,543		$	25,541		$	—		$	101,971
Accounts receivable, net	123,558			302,096			22,666			—			448,320
Inventories	32,159			8,958			3			—			41,120
Prepaid expenses and other (including intercompany)	1,157,263			1,993,450			23,217			(3,136,275		)	37,655
Total current assets	1,381,867			2,312,047			71,427			(3,136,275		)	629,066
Property, plant and equipment, net	24,790			122,565			1,550			—			148,905
Goodwill	23,584			605,898			6,989			—			636,471
Other intangible assets, net	11,558			202,055			—			—			213,613
Investments	547,366			21,385			—			(565,261		)	3,490
Intercompany note receivable (payable)	359,649			(333,683		)	(25,966		)	—			—
Other assets	9,710			5,271			(2,079		)	—			12,902
Total assets	$	2,358,524		$	2,935,538		$	51,921		$	(3,701,536	)	$	1,644,447
Liabilities and Stockholders’ Equity
Current liabilities:
Current portion, long-term debt	$	15,000		$	—		$	—		$	—		$	15,000
Accounts payable and intercompany payable	1,210,296			2,246,381			13,976			(3,136,275		)	334,378
Progress billings	15,952			10,358			13,665			—			39,975
Accrued expenses	52,675			38,543			7,191			—			98,409
Total current liabilities	1,293,923			2,295,282			34,832			(3,136,275		)	487,762
Long-term debt	587,560			—			—			—			587,560
Deferred income taxes	(2,840		)	74,241			(3,997		)	—			67,404
Other non-current liabilities	30,347			20,887			953			—			52,187
Total liabilities	1,908,990			2,390,410			31,788			(3,136,275		)	1,194,913
Stockholders’ equity	449,534			545,128			20,133			(565,261		)	449,534
Total liabilities and stockholders’ equity	$	2,358,524		$	2,935,538		$	51,921		$	(3,701,536	)	$	1,644,447

Condensed Consolidating Statement of Comprehensive Income

Three Months EndedMarch 31, 2012

(in thousands of U.S. dollars)

	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Consolidated Total
Revenues	$	171,291		$	430,014		$	17,382		$	(100,102	)	$	518,585
Costs and expenses:
Cost of sales	145,142			283,095			11,928			(51,271		)	388,894
Selling, general and administrative	20,370			102,794			3,284			(48,831		)	77,617
Amortization expense	6			3,150			—			—			3,156
Total costs and expenses	165,518			389,039			15,212			(100,102		)	469,667
Earnings from operations	5,773			40,975			2,170			—			48,918
Other expenses and income:
Interest expense	7,054			—			—			—			7,054
Interest income	(22		)	—			(36		)	—			(58		)
Intercompany interest	(8,967		)	8,967			—			—			—
Other expenses (income), net	(144		)	(616		)	63			—			(697		)
Total other expenses (income), net	(2,079		)	8,351			27			—			6,299
Earnings before income taxes	7,852			32,624			2,143			—			42,619
Income tax expense	2,418			13,360			420			—			16,198
Equity in net earnings of subsidiaries	20,987			1,723			—			(22,710		)	—
Net earnings	$	26,421		$	20,987		$	1,723		$	(22,710	)	$	26,421
Other comprehensive income (loss)	(54		)	350			350			(700		)	(54		)
Comprehensive income	$	26,367		$	21,337		$	2,073		$	(23,410	)	$	26,367

Condensed Consolidating Statement of Comprehensive Income

Three Months EndedMarch 31, 2011

(in thousands of U.S. dollars)

	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Consolidated Total
Revenues	$	198,166		$	429,268		$	17,369		$	(97,824	)	$	546,979
Costs and expenses:
Cost of sales	166,337			277,832			12,319			(47,911		)	408,577
Selling, general and administrative	24,514			100,378			3,448			(49,913		)	78,427
Amortization expense	6			3,150			—			—			3,156
Total costs and expenses	190,857			381,360			15,767			(97,824		)	490,160
Earnings from operations	7,309			47,908			1,602			—			56,819
Other expenses and income:
Interest expense	9,775			—			—			—			9,775
Interest income	(118		)	—			(21		)	—			(139		)
Intercompany interest	(11,197		)	11,197			—			—			—
Loss on extinguishment of debt	13,352			—			—			—			13,352
Other expenses (income), net	(227		)	(789		)	140			—			(876		)
Total other expenses, net	11,585			10,408			119			—			22,112
Earnings (loss) before income taxes	(4,276		)	37,500			1,483			—			34,707
Income tax expense	325			12,464			507			—			13,296
Equity in net earnings of subsidiaries	26,012			976			—			(26,988		)	—
Net earnings	$	21,411		$	26,012		$	976		$	(26,988	)	$	21,411
Other comprehensive income	1,357			865			865			(1,730		)	1,357
Comprehensive income	$	22,768		$	26,877		$	1,841		$	(28,718	)	$	22,768

Condensed Consolidating Statement of Cash Flows

Three Months EndedMarch 31, 2012

(in thousands of U.S. dollars)

	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments		Consolidated Total
Net cash provided by (used in) operating activities	$	35,072		$	(19,760	)	$	(938	)	$	—	$	14,374
Cash flows from investing activities:
Additions to property, plant and equipment	(2,372		)	(6,736		)	(157		)	—		(9,265		)
Proceeds from sale of property, plant and equipment	79			—			—			—		79
Net cash used in investing activities	(2,293		)	(6,736		)	(157		)	—		(9,186		)
Cash flows from financing activities:
Cash provided by (used in) intercompany activity	(24,889		)	24,889			—			—		—
Repayments of long-term debt	(3,750		)	—			—			—		(3,750		)
Repurchases of common stock	(1,366		)	—			—			—		(1,366		)
Proceeds from issuance of common stock	5,685			—			—			—		5,685
Net cash provided by (used in) by financing activities	(24,320		)	24,889			—			—		569
Effect of exchange rate changes on cash and cash equivalents	—			—			(529		)	—		(529		)
Net increase (decrease) in cash and cash equivalents	8,459			(1,607		)	(1,624		)	—		5,228
Cash and cash equivalents at beginning of period	68,887			7,543			25,541			—		101,971
Cash and cash equivalents at end of period	$	77,346		$	5,936		$	23,917		$	—	$	107,199

Condensed Consolidating Statement of Cash Flows

Three Months EndedMarch 31, 2011

(in thousands of U.S. dollars)

	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments		Consolidated Total
Net cash provided by operating activities	$	1,048		$	16,834		$	84		$	—	$	17,966
Cash flows from investing activities:
Additions to property, plant and equipment	(2,703		)	(2,285		)	(36		)	—		(5,024		)
Proceeds from sale of property, plant and equipment	20			—			—			—		20
Proceeds from sale of available-for-sale securities	1,494			—			—			—		1,494
Net cash used in investing activities	(1,189		)	(2,285		)	(36		)	—		(3,510		)
Cash flows from financing activities:
Cash provided by (used in) intercompany activity	17,594			(17,594		)	—			—		—
Borrowings of long-term debt	260,000			—			—			—		260,000
Repayments of long-term debt	(243,989		)	—			—			—		(243,989		)
Debt issuance costs	(4,880		)	—			—			—		(4,880		)
Repurchases of common stock	(45,530		)	—			—			—		(45,530		)
Proceeds from issuance of common stock	3,133			—			—			—		3,133
Net cash used in financing activities	(13,672		)	(17,594		)	—			—		(31,266		)
Effect of exchange rate changes on cash and cash equivalents	—			—			1,066			—		1,066
Net increase (decrease) in cash and cash equivalents	(13,813		)	(3,045		)	1,114			—		(15,744		)
Cash and cash equivalents at beginning of period	211,933			8,026			25,976			—		245,935
Cash and cash equivalents at end of period	$	198,120		$	4,981		$	27,090		$	—	$	230,191

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Required and Actual Financial Ratios Under Senior Secured Credit Facility (Detail) (Senior Secured Credit Facility)	Mar. 31, 2012
Required Ratio | Maximum
Debt Disclosure [Line Items]
Maximum consolidated leverage ratio	3.50
Required Ratio | Minimum
Debt Disclosure [Line Items]
Minimum consolidated interest coverage ratio	3.00
Scenario, Actual [Member] | Maximum
Debt Disclosure [Line Items]
Maximum consolidated leverage ratio	1.92
Scenario, Actual [Member] | Minimum
Debt Disclosure [Line Items]
Minimum consolidated interest coverage ratio	10.58

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ACCRUED EXPENSES (Tables)

3 Months Ended

Mar. 31, 2012

Accrued Expenses

Accrued expenses included on the condensed consolidated balance sheets consisted of:

(in thousands of U.S. dollars)	March 31, 2012		December 31, 2011
Accrued interest	$	2,998	$	7,205
Accrued compensation and benefits	30,117		55,030
Other accrued expenses	32,176		36,174
Accrued expenses	$	65,291	$	98,409

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GUARANTOR AND NON-GUARANTOR CONDENSED CONSOLIDATING FINANCIAL STATEMENTS (Tables)

3 Months Ended

12 Months Ended

Mar. 31, 2012

Mar. 31, 2011

Dec. 31, 2011

Condensed consolidating balance sheet

Condensed Consolidating Balance Sheet

March 31, 2012

(in thousands of U.S. dollars)

	Parent Company			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Adjustments			Consolidated Total
Assets
Current assets:
Cash and cash equivalents	$	77,346		$	5,936		$	23,917		$	—		$	107,199
Accounts receivable, net	105,446			287,803			23,761			—			417,010
Inventories	26,060			7,873			3			—			33,936
Prepaid expenses and other (including intercompany)	1,080,077			2,379,564			1,457			(3,434,245		)	26,853
Total current assets	1,288,929			2,681,176			49,138			(3,434,245		)	584,998
Property, plant and equipment, net	21,947			123,093			1,649			—			146,689
Goodwill	27,684			601,798			6,989			—			636,471
Other intangible assets, net	11,552			198,905			—			—			210,457
Investments	569,779			24,225			—			(590,982		)	3,022
Intercompany note receivable (payable)	357,635			(357,499		)	(136		)	—			—
Other assets	9,152			5,030			(2,142		)	—			12,040
Total assets	$	2,286,678		$	3,276,728		$	55,498		$	(4,025,227	)	$	1,593,677
Liabilities and Stockholders’ Equity
Current liabilities:
Current portion, long-term debt	$	15,000		$	—		$	—		$	—		$	15,000
Accounts payable and intercompany payable	1,126,693			2,578,120			11,305			(3,434,245		)	281,873
Progress billings	20,390			10,798			12,943			—			44,131
Accrued expenses	30,140			27,967			7,184			—			65,291
Total current liabilities	1,192,223			2,616,885			31,432			(3,434,245		)	406,295
Long-term debt	583,810			—			—			—			583,810
Deferred income taxes	(3,091		)	74,241			(3,996		)	—			67,154
Other non-current liabilities	29,582			17,914			4,768			—			52,264
Total liabilities	1,802,524			2,709,040			32,204			(3,434,245		)	1,109,523
Stockholders’ equity	484,154			567,688			23,294			(590,982		)	484,154
Total liabilities and stockholders’ equity	$	2,286,678		$	3,276,728		$	55,498		$	(4,025,227	)	$	1,593,677

Condensed Consolidating Balance Sheet

December 31, 2011

(in thousands of U.S. dollars)

	Parent Company			Guarantor Subsidiaries			Non- Guarantor Subsidiaries			Consolidating Adjustments			Consolidated Total
Assets
Current assets:
Cash and cash equivalents	$	68,887		$	7,543		$	25,541		$	—		$	101,971
Accounts receivable, net	123,558			302,096			22,666			—			448,320
Inventories	32,159			8,958			3			—			41,120
Prepaid expenses and other (including intercompany)	1,157,263			1,993,450			23,217			(3,136,275		)	37,655
Total current assets	1,381,867			2,312,047			71,427			(3,136,275		)	629,066
Property, plant and equipment, net	24,790			122,565			1,550			—			148,905
Goodwill	23,584			605,898			6,989			—			636,471
Other intangible assets, net	11,558			202,055			—			—			213,613
Investments	547,366			21,385			—			(565,261		)	3,490
Intercompany note receivable (payable)	359,649			(333,683		)	(25,966		)	—			—
Other assets	9,710			5,271			(2,079		)	—			12,902
Total assets	$	2,358,524		$	2,935,538		$	51,921		$	(3,701,536	)	$	1,644,447
Liabilities and Stockholders’ Equity
Current liabilities:
Current portion, long-term debt	$	15,000		$	—		$	—		$	—		$	15,000
Accounts payable and intercompany payable	1,210,296			2,246,381			13,976			(3,136,275		)	334,378
Progress billings	15,952			10,358			13,665			—			39,975
Accrued expenses	52,675			38,543			7,191			—			98,409
Total current liabilities	1,293,923			2,295,282			34,832			(3,136,275		)	487,762
Long-term debt	587,560			—			—			—			587,560
Deferred income taxes	(2,840		)	74,241			(3,997		)	—			67,404
Other non-current liabilities	30,347			20,887			953			—			52,187
Total liabilities	1,908,990			2,390,410			31,788			(3,136,275		)	1,194,913
Stockholders’ equity	449,534			545,128			20,133			(565,261		)	449,534
Total liabilities and stockholders’ equity	$	2,358,524		$	2,935,538		$	51,921		$	(3,701,536	)	$	1,644,447

Condensed consolidating statement of comprehensive income

Condensed Consolidating Statement of Comprehensive Income

Three Months EndedMarch 31, 2012

(in thousands of U.S. dollars)

	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Consolidated Total
Revenues	$	171,291		$	430,014		$	17,382		$	(100,102	)	$	518,585
Costs and expenses:
Cost of sales	145,142			283,095			11,928			(51,271		)	388,894
Selling, general and administrative	20,370			102,794			3,284			(48,831		)	77,617
Amortization expense	6			3,150			—			—			3,156
Total costs and expenses	165,518			389,039			15,212			(100,102		)	469,667
Earnings from operations	5,773			40,975			2,170			—			48,918
Other expenses and income:
Interest expense	7,054			—			—			—			7,054
Interest income	(22		)	—			(36		)	—			(58		)
Intercompany interest	(8,967		)	8,967			—			—			—
Other expenses (income), net	(144		)	(616		)	63			—			(697		)
Total other expenses (income), net	(2,079		)	8,351			27			—			6,299
Earnings before income taxes	7,852			32,624			2,143			—			42,619
Income tax expense	2,418			13,360			420			—			16,198
Equity in net earnings of subsidiaries	20,987			1,723			—			(22,710		)	—
Net earnings	$	26,421		$	20,987		$	1,723		$	(22,710	)	$	26,421
Other comprehensive income (loss)	(54		)	350			350			(700		)	(54		)
Comprehensive income	$	26,367		$	21,337		$	2,073		$	(23,410	)	$	26,367

Condensed Consolidating Statement of Comprehensive Income

Three Months EndedMarch 31, 2011

(in thousands of U.S. dollars)

	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments			Consolidated Total
Revenues	$	198,166		$	429,268		$	17,369		$	(97,824	)	$	546,979
Costs and expenses:
Cost of sales	166,337			277,832			12,319			(47,911		)	408,577
Selling, general and administrative	24,514			100,378			3,448			(49,913		)	78,427
Amortization expense	6			3,150			—			—			3,156
Total costs and expenses	190,857			381,360			15,767			(97,824		)	490,160
Earnings from operations	7,309			47,908			1,602			—			56,819
Other expenses and income:
Interest expense	9,775			—			—			—			9,775
Interest income	(118		)	—			(21		)	—			(139		)
Intercompany interest	(11,197		)	11,197			—			—			—
Loss on extinguishment of debt	13,352			—			—			—			13,352
Other expenses (income), net	(227		)	(789		)	140			—			(876		)
Total other expenses, net	11,585			10,408			119			—			22,112
Earnings (loss) before income taxes	(4,276		)	37,500			1,483			—			34,707
Income tax expense	325			12,464			507			—			13,296
Equity in net earnings of subsidiaries	26,012			976			—			(26,988		)	—
Net earnings	$	21,411		$	26,012		$	976		$	(26,988	)	$	21,411
Other comprehensive income	1,357			865			865			(1,730		)	1,357
Comprehensive income	$	22,768		$	26,877		$	1,841		$	(28,718	)	$	22,768

Condensed consolidating statement of cash flows

Condensed Consolidating Statement of Cash Flows

Three Months EndedMarch 31, 2012

(in thousands of U.S. dollars)

	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments		Consolidated Total
Net cash provided by (used in) operating activities	$	35,072		$	(19,760	)	$	(938	)	$	—	$	14,374
Cash flows from investing activities:
Additions to property, plant and equipment	(2,372		)	(6,736		)	(157		)	—		(9,265		)
Proceeds from sale of property, plant and equipment	79			—			—			—		79
Net cash used in investing activities	(2,293		)	(6,736		)	(157		)	—		(9,186		)
Cash flows from financing activities:
Cash provided by (used in) intercompany activity	(24,889		)	24,889			—			—		—
Repayments of long-term debt	(3,750		)	—			—			—		(3,750		)
Repurchases of common stock	(1,366		)	—			—			—		(1,366		)
Proceeds from issuance of common stock	5,685			—			—			—		5,685
Net cash provided by (used in) by financing activities	(24,320		)	24,889			—			—		569
Effect of exchange rate changes on cash and cash equivalents	—			—			(529		)	—		(529		)
Net increase (decrease) in cash and cash equivalents	8,459			(1,607		)	(1,624		)	—		5,228
Cash and cash equivalents at beginning of period	68,887			7,543			25,541			—		101,971
Cash and cash equivalents at end of period	$	77,346		$	5,936		$	23,917		$	—	$	107,199

Condensed Consolidating Statement of Cash Flows

Three Months EndedMarch 31, 2011

(in thousands of U.S. dollars)

	Parent Company			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Consolidating Adjustments		Consolidated Total
Net cash provided by operating activities	$	1,048		$	16,834		$	84		$	—	$	17,966
Cash flows from investing activities:
Additions to property, plant and equipment	(2,703		)	(2,285		)	(36		)	—		(5,024		)
Proceeds from sale of property, plant and equipment	20			—			—			—		20
Proceeds from sale of available-for-sale securities	1,494			—			—			—		1,494
Net cash used in investing activities	(1,189		)	(2,285		)	(36		)	—		(3,510		)
Cash flows from financing activities:
Cash provided by (used in) intercompany activity	17,594			(17,594		)	—			—		—
Borrowings of long-term debt	260,000			—			—			—		260,000
Repayments of long-term debt	(243,989		)	—			—			—		(243,989		)
Debt issuance costs	(4,880		)	—			—			—		(4,880		)
Repurchases of common stock	(45,530		)	—			—			—		(45,530		)
Proceeds from issuance of common stock	3,133			—			—			—		3,133
Net cash used in financing activities	(13,672		)	(17,594		)	—			—		(31,266		)
Effect of exchange rate changes on cash and cash equivalents	—			—			1,066			—		1,066
Net increase (decrease) in cash and cash equivalents	(13,813		)	(3,045		)	1,114			—		(15,744		)
Cash and cash equivalents at beginning of period	211,933			8,026			25,976			—		245,935
Cash and cash equivalents at end of period	$	198,120		$	4,981		$	27,090		$	—	$	230,191

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Condensed Consolidating Statement of Cash Flows (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Schedule of Condensed Consolidating Statement of Cash Flows [Line Items]
Net cash provided by (used in) operating activities	$ 14,374	$ 17,966
Cash flows from investing activities:
Additions to property, plant and equipment	(9,265)	(5,024)
Proceeds from sale of property, plant and equipment	79	20
Proceeds from sale of available-for-sale securities	0	1,494
Net cash used in investing activities	(9,186)	(3,510)
Cash flows from financing activities:
Cash provided by (used in) intercompany activity	0	0
Proceeds from Issuance of Debt	0	260,000
Repayments of long-term debt	(3,750)	(243,989)
Debt issuance costs	0	(4,880)
Repurchases of common stock	(1,366)	(45,530)
Proceeds from issuance of common stock	5,685	3,133
Net cash provided (used in) by financing activities	569	(31,266)
Effect of exchange rate changes on cash and cash equivalents	(529)	1,066
Net increase (decrease) in cash and cash equivalents	5,228	(15,744)
Cash and cash equivalents at beginning of period	101,971	245,935
Cash and cash equivalents at end of period	107,199	230,191
Parent Company
Schedule of Condensed Consolidating Statement of Cash Flows [Line Items]
Net cash provided by (used in) operating activities	35,072	1,048
Cash flows from investing activities:
Additions to property, plant and equipment	(2,372)	(2,703)
Proceeds from sale of property, plant and equipment	79	20
Proceeds from sale of available-for-sale securities		1,494
Net cash used in investing activities	(2,293)	(1,189)
Cash flows from financing activities:
Cash provided by (used in) intercompany activity	(24,889)	17,594
Proceeds from Issuance of Debt		260,000
Repayments of long-term debt	(3,750)	(243,989)
Debt issuance costs		(4,880)
Repurchases of common stock	(1,366)	(45,530)
Proceeds from issuance of common stock	5,685	3,133
Net cash provided (used in) by financing activities	(24,320)	(13,672)
Effect of exchange rate changes on cash and cash equivalents	0	0
Net increase (decrease) in cash and cash equivalents	8,459	(13,813)
Cash and cash equivalents at beginning of period	68,887	211,933
Cash and cash equivalents at end of period	77,346	198,120
Guarantor Subsidiaries
Schedule of Condensed Consolidating Statement of Cash Flows [Line Items]
Net cash provided by (used in) operating activities	(19,760)	16,834
Cash flows from investing activities:
Additions to property, plant and equipment	(6,736)	(2,285)
Proceeds from sale of property, plant and equipment	0	0
Proceeds from sale of available-for-sale securities		0
Net cash used in investing activities	(6,736)	(2,285)
Cash flows from financing activities:
Cash provided by (used in) intercompany activity	24,889	(17,594)
Proceeds from Issuance of Debt		0
Repayments of long-term debt	0	0
Debt issuance costs		0
Repurchases of common stock	0	0
Proceeds from issuance of common stock	0	0
Net cash provided (used in) by financing activities	24,889	(17,594)
Effect of exchange rate changes on cash and cash equivalents	0	0
Net increase (decrease) in cash and cash equivalents	(1,607)	(3,045)
Cash and cash equivalents at beginning of period	7,543	8,026
Cash and cash equivalents at end of period	5,936	4,981
Non-Guarantor Subsidiaries
Schedule of Condensed Consolidating Statement of Cash Flows [Line Items]
Net cash provided by (used in) operating activities	(938)	84
Cash flows from investing activities:
Additions to property, plant and equipment	(157)	(36)
Proceeds from sale of property, plant and equipment	0	0
Proceeds from sale of available-for-sale securities		0
Net cash used in investing activities	(157)	(36)
Cash flows from financing activities:
Cash provided by (used in) intercompany activity	0	0
Proceeds from Issuance of Debt		0
Repayments of long-term debt	0	0
Debt issuance costs		0
Repurchases of common stock	0	0
Proceeds from issuance of common stock	0	0
Net cash provided (used in) by financing activities	0	0
Effect of exchange rate changes on cash and cash equivalents	(529)	1,066
Net increase (decrease) in cash and cash equivalents	(1,624)	1,114
Cash and cash equivalents at beginning of period	25,541	25,976
Cash and cash equivalents at end of period	23,917	27,090
Consolidating Adjustments
Schedule of Condensed Consolidating Statement of Cash Flows [Line Items]
Net cash provided by (used in) operating activities	0	0
Cash flows from investing activities:
Additions to property, plant and equipment	0	0
Proceeds from sale of property, plant and equipment	0	0
Proceeds from sale of available-for-sale securities		0
Net cash used in investing activities	0	0
Cash flows from financing activities:
Cash provided by (used in) intercompany activity	0	0
Proceeds from Issuance of Debt		0
Repayments of long-term debt	0	0
Debt issuance costs		0
Repurchases of common stock	0	0
Proceeds from issuance of common stock	0	0
Net cash provided (used in) by financing activities	0	0
Effect of exchange rate changes on cash and cash equivalents	0	0
Net increase (decrease) in cash and cash equivalents	0	0
Cash and cash equivalents at beginning of period	0	0
Cash and cash equivalents at end of period	$ 0	$ 0

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DERIVATIVE FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS - Additional Information (Detail) (USD $)			3 Months Ended							3 Months Ended
	Mar. 31, 2012	Dec. 31, 2011	Mar. 31, 2012 Currency, Mexican Pesos	Mar. 31, 2012 Currency, Polish Zloty	Mar. 31, 2012 Interest Rate Swap with Three Month LIBOR at 2.005% Plus Applicable Margin	Jun. 30, 2012 Interest Rate Swap with Three Month LIBOR at 2.005% Plus Applicable Margin	Dec. 17, 2009 Interest Rate Swap with Three Month LIBOR at 2.005% Plus Applicable Margin	Mar. 31, 2012 Interest Rate Swap with Three Month LIBOR at 1.8695% Plus Applicable Margin	Jul. 06, 2011 Interest Rate Swap with Three Month LIBOR at 1.8695% Plus Applicable Margin	Mar. 31, 2012 Interest Rate Swap with Three Month LIBOR at 1.8695% Plus Applicable Margin July 2011 Through September 2013	Mar. 31, 2012 Interest Rate Swap with Three Month LIBOR at 1.8695% Plus Applicable Margin September 2013 Through September 2014	Mar. 31, 2012 Interest Rate Swap with Three Month LIBOR at 1.8695% Plus Applicable Margin September 2014 Through June 2015
Derivative [Line Items]
Notional amount of derivatives							$ 300,000,000		$ 186,300,000
Fixed interest rate under swap agreement					2.005%			1.8695%
Effective Interest Rate of Variable Rate Debt					4.255%			3.6195%
Amortization of Notional Amount					40,000,000					2,812,500	5,625,000	8,437,500
Minimum notional amount of interest rate swap at the date of expiration						100,000,000
Purchase commitment to be settled with foreign currency, dollar value			9,000,000	800,000
Fair value of long term debt in excess of carrying value	3,000,000
Fair value of long term debt below carrying value		$ (25,000,000)

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Condensed Consolidated Statements of Comprehensive Income (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Net earnings	$ 26,421	$ 21,411
Other comprehensive income, net of tax:
Unrealized changes in fair value of cash flow hedges	(404)	(137)
Unrealized changes in fair value of available-for-sale securities	0	(150)
Realized losses on cash flow hedges reclassified from AOCI into earnings	0	779
Foreign currency translation adjustment	350	865
Total other comprehensive income (loss)	(54)	1,357
Comprehensive income	$ 26,367	$ 22,768

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ACCRUED EXPENSES

3 Months Ended

Mar. 31, 2012

ACCRUED EXPENSES

ACCRUED EXPENSES

Accrued expenses included on the condensed consolidated balance sheets consisted of:

(in thousands of U.S. dollars)	March 31, 2012		December 31, 2011
Accrued interest	$	2,998	$	7,205
Accrued compensation and benefits	30,117		55,030
Other accrued expenses	32,176		36,174
Accrued expenses	$	65,291	$	98,409

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BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	Mar. 31, 2012	Dec. 31, 2011
Accounts, Notes, Loans and Financing Receivable [Line Items]
Allowance for doubtful accounts	$ 7.3	$ 6.9

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Earnings Per Common Share Data (Detail) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2012	Mar. 31, 2011
Earnings Per Share Disclosure [Line Items]
Net earnings	$ 26,421	$ 21,411
Weighted-average common shares outstanding, basic	42,114	49,929
Shares issued on exercise of dilutive options	4,894	6,693
Shares purchased with assumed proceeds of options and unearned restricted shares	2,965	4,293
Shares contingently issuable	2	4
Weighted-average common shares outstanding, diluted	44,045	52,333
Net earnings per common share, diluted	$ 0.60	$ 0.41
Anti-dilutive options excluded from calculation of weighted-average common shares outstanding, diluted	3,486	2,565

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LONG-TERM DEBT (Tables)

3 Months Ended

Mar. 31, 2012

Long-Term Debt

Long-term debt included on the condensed consolidated balance sheets consisted of:

(in thousands of U.S. dollars)	March 31, 2012		December 31, 2011
Senior Secured Revolving Credit Facility	$	50,000	$	50,000
Senior Secured Term Loan A	288,750		292,500
Senior Secured Convertible Notes due 2033, net of discount	60		60
6 5/8% Senior Notes due 2021	260,000		260,000
Total debt	598,810		602,560
Current portion long-term debt	15,000		15,000
Long-term debt	$	583,810	$	587,560

Required and Actual Financial Ratios Under Senior Secured Credit Facility

The following table shows the required and actual financial ratios under our Senior Secured Credit Facility as of March 31, 2012:

	Required Ratio	Actual Ratio
Maximum consolidated leverage ratio	No greater than 3.50:1.00	1.92:1.00
Minimum consolidated interest coverage ratio	No less than 3.00:1.00	10.58:1.00

Redemption Prices (Expressed as Percentages of the Principal Amount Thereof)

At any time on or after February 1, 2016, we may redeem all or a portion of the 2021 Notes at our option at the following redemption prices (expressed as percentages of the principal amount thereof) if redeemed during the twelve-month period commencing on February 1 of the years set forth below:

Year	Percentage
2016	103.313%
2017	102.208%
2018	101.104%
2019 and thereafter	100.000%