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 June 30, 2002

[ ]  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             (IRS Employer Identification Number)
 Incorporation or Organization)

                              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 ____

As of August 9, 2002, there were 53,261,967 shares of the Registrant's Common
Stock outstanding.



PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

                          VALASSIS COMMUNICATIONS, INC.
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                             (DOLLARS IN THOUSANDS)



                                                                       JUNE 30,         DECEMBER 31,
ASSETS                                                                   2002               2001
------                                                             ----------------    --------------
                                                                      (unaudited)
                                                                                 
Current assets:
 Cash and cash equivalents                                         $         51,469    $       10,615
 Accounts receivable (less allowance for doubtful
  accounts of $1,794 at June 30, 2002 and
  $1,051 at December 31, 2001)                                              103,524           131,777
 Inventories:
  Raw materials                                                              12,020            13,965
  Work in progress                                                            9,339            13,935
 Prepaid expenses and other                                                   6,543             7,499
 Deferred income taxes                                                        1,479             1,479
 Refundable income taxes                                                      2,060             4,277
                                                                   ----------------    --------------

                       Total current assets                                 186,434           183,547
                                                                   ----------------    --------------

Property, plant and equipment, at cost:
 Land and buildings                                                          27,968            22,960
 Machinery and equipment                                                    117,010           120,548
 Office furniture and equipment                                              34,686            31,674
 Automobiles                                                                    984               900
 Leasehold improvements                                                       1,956             1,954
                                                                   ----------------    --------------
                                                                            182,604           178,036

 Less accumulated depreciation and amortization                            (112,641)         (113,967)
                                                                   ----------------    --------------

                Net property, plant and equipment                            69,963            64,069
                                                                   ----------------    --------------

Intangible assets:
 Goodwill                                                                   115,756           115,756
 Other intangibles                                                           85,591            85,347
                                                                   ----------------    --------------
                                                                            201,347           201,103

 Less accumulated amortization                                             (123,513)         (123,408)
                                                                   ----------------    --------------

                       Net intangible assets                                 77,834            77,695
                                                                   ----------------    --------------

Equity investments and advances to investees                                 41,870            33,955
Other assets                                                                  2,950             3,759
                                                                   ----------------    --------------
                           Total assets                            $        379,051    $      363,025
                                                                   ================    ==============




                          VALASSIS COMMUNICATIONS, INC.
                CONDENSED CONSOLIDATED BALANCE SHEETS, CONTINUED
                  (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)



                                                                                  JUNE 30,         DECEMBER 31,
LIABILITIES AND STOCKHOLDERS' DEFICIT                                               2002              2001
-------------------------------------                                           -------------      ------------
                                                                                 (unaudited)
                                                                                             
Current liabilities:
 Current portion long-term debt                                                 $           -      $      2,600
 Accounts payable                                                                      74,570            82,750
 Accrued interest                                                                       3,096             3,105
 Accrued expenses                                                                      29,804            32,846
 Progress billings                                                                     36,834            51,766
                                                                                -------------      ------------

                                Total current liabilities                             144,304           173,067
                                                                                -------------      ------------

Long-term debt                                                                        254,689           252,383
Deferred income taxes                                                                   3,259             3,259

Commitments and contingencies

Stockholders' deficit:
 Preferred stock of $.01 par value. Authorized 25,000,000 shares; no shares
  issued or outstanding at June 30, 2002 and December 31, 2001
 Common stock of $.01 par value. Authorized 100,000,000 shares; issued
  63,041,116 at June 30, 2002 and 62,992,763 at December 31, 2001; outstanding
  53,208,740 at June 30, 2002 and 53,698,382 at December 31, 2001                         630               630
 Additional paid-in capital                                                           104,744            99,116
 Deferred compensation                                                                 (1,358)           (1,342)
 Retained earnings                                                                    258,180           191,822
 Foreign currency translations                                                           (460)             (560)
 Treasury stock, at cost (9,832,376 shares at June 30, 2002
  and 9,294,381 shares at December 31, 2001)                                         (384,937)         (355,350)
                                                                                -------------      ------------

                           Total stockholders' deficit                                (23,201)          (65,684)
                                                                                -------------      ------------

                           Total liabilities and stockholders' deficit          $     379,051      $    363,025
                                                                                =============      ============


See accompanying notes to condensed consolidated financial statements.



                          VALASSIS COMMUNICATIONS, INC.
                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                  (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
                                   (UNAUDITED)



                                                     QUARTER ENDED                SIX MONTHS ENDED
                                                JUNE 30,        JUNE 30,      JUNE 30,        JUNE 30,
                                                  2002            2001          2002            2001
                                             -------------    -----------    -----------    -----------
                                                                                
REVENUES:
 Net sales                                   $     202,569    $   217,192    $   406,341    $   444,921
 Other                                                 766             84          1,769            165
                                             -------------    -----------    -----------    -----------
 Total revenues                                    203,335        217,276        408,110        445,086
                                             -------------    -----------    -----------    -----------
COSTS AND EXPENSES:
 Cost of products sold                             124,587        133,845        251,403        278,905
 Selling, general and administrative                22,289         23,130         44,466         46,728
 Loss on equity investments                            678            687          1,709          1,312
 Amortization of intangible assets                      52            858            105          1,714
 Interest                                            3,347          4,819          6,569         10,532
                                             -------------    -----------    -----------    -----------
 Total costs and expenses                          150,953        163,339        304,252        339,191
                                             -------------    -----------    -----------    -----------
Earnings before income taxes                        52,382         53,937        103,858        105,895

Income taxes                                        18,600         20,200         37,500         39,700
                                             -------------    -----------    -----------    -----------
      Net earnings                           $      33,782    $    33,737    $    66,358    $    66,195
                                             =============    ===========    ===========    ===========
Net earnings per common share, basic         $        0.63    $      0.63    $      1.24    $      1.24
                                             =============    ===========    ===========    ===========
Net earnings per common share, diluted       $        0.62    $      0.62    $      1.22    $      1.22
                                             =============    ===========    ===========    ===========

Shares used in computing net earnings per
 share, basic                                   53,345,996     53,430,534     53,606,538     53,477,624
                                             =============    ===========    ===========    ===========

Shares used in computing net earnings per
 share, diluted                                 54,061,755     54,418,567     54,316,744     54,423,829
                                             =============    ===========    ===========    ===========


See accompanying notes to condensed consolidated financial statements.



                          VALASSIS COMMUNICATIONS, INC.
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (DOLLARS IN THOUSANDS)
                                   (UNAUDITED)

                                                          SIX MONTHS ENDED
                                                      -------------------------
                                                       JUNE 30,       JUNE 30,
                                                         2002           2001
                                                      ----------     ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
 Net earnings                                         $   66,358     $   66,195
 Adjustments to reconcile net earnings to net cash
  provided by operating activities:
   Depreciation and amortization of intangibles            5,138          6,572
   Amortization of bond discount                           2,306            368
   Provision for losses on accounts receivable               743            739
   Gain on sale of property, plant and equipment            (793)           (88)
   Losses on equity investments                            1,709          1,312
   Stock-based compensation charge                           903          1,288
   Changes in assets and liabilities which increase
    (decrease) cash flow:
      Accounts receivable                                 27,510         10,226
      Inventories                                          6,541           (290)
      Prepaid expenses and other                             170          3,835
      Other liabilities                                        -         (1,681)
      Other assets                                           565         (1,486)
      Accounts payable                                    (8,181)       (15,420)
      Accrued expenses and interest                        5,766         (7,394)
      Income taxes                                         6,677          6,646
      Progress billings                                  (14,932)       (14,770)
                                                      ----------     ----------
              Total adjustments                           34,122        (10,143)
                                                      ----------     ----------
   Net cash provided by operating activities             100,480         56,052
                                                      ----------     ----------

CASH FLOWS FROM INVESTING ACTIVITIES:
 Additions to property, plant and equipment              (11,068)        (8,092)
 Proceeds from sale of property, plant and equipment         934            192
 Investments in and advances to affiliated companies      (9,624)       (15,840)
 Payments of additional purchase price for
  acquisition of PreVision                                (8,000)             -
 Other                                                        99           (102)
                                                      ----------     ----------
   Net cash used in investing activities                 (27,659)       (23,842)
                                                      ----------     ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
 Borrowings of long-term debt                                  -        150,000
 Net payments under revolving line of credit              (2,600)      (163,850)
 Repurchase of common stock                              (52,184)       (27,513)
 Proceeds from the issuance of common stock               22,817          8,921
                                                      ----------     ----------
   Net cash used in financing activities                 (31,967)       (32,442)
                                                      ----------     ----------
Net increase/(decrease) in cash                           40,854           (232)
Cash at beginning of period                               10,615         11,140
                                                      ----------     ----------
Cash at end of period                                 $   51,469     $   10,908
                                                      ==========     ==========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
 Cash paid during the period for interest             $    3,418     $    8,135
 Cash paid during the period for income taxes         $   30,838     $   33,135
 Non-cash financing activities:
   Stock issued under stock-based compensation plan   $    1,138     $    1,585

See accompanying notes to condensed consolidated financial statements



                          VALASSIS COMMUNICATIONS, INC.
              Notes to Condensed Consolidated Financial Statements

1.   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 ("generally accepted accounting principles") 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 generally accepted accounting 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
Company's Annual Report on Form 10-K for the year ended December 31, 2001.
Certain amounts for 2001 have been reclassified to conform to current period
classifications.

2.   RECENT ACCOUNTING PRONOUNCEMENTS

     In August 2001, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards SFAS No. 143, "Accounting for Asset
Retirement Obligations," which requires an entity to record the fair value of a
liability for an asset retirement obligation in the period in which it is
incurred and a corresponding increase in the related long-lived asset. SFAS No.
143 is effective for fiscal years beginning after June 15, 2002. The Company
does not expect the adoption of SFAS No. 143 to have a material effect on its
financial position or results of operations.

     During October 2001, the FASB issued SFAS No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets," which replaces SFAS No. 121 and
provisions of APB Opinion No. 30 for the disposal of segments of a business. The
statement creates one accounting model, based on the framework established in
Statement No. 121, to be applied to all long-lived assets including discontinued
operations. SFAS No. 144 is effective for fiscal years beginning after December
15, 2001. The Company adopted the provisions of SFAS No. 144 as of January 1,
2002, and it did not have an effect on the Company's financial statements.



3.   ADOPTION OF SFAS NO. 141 AND 142

     During July 2001, the FASB issued two statements, SFAS No. 141, "Business
Combinations", and SFAS No. 142, "Goodwill and Other Intangible Assets", that
amend APB Opinion No. 16, "Business Combinations," and supersede APB Opinion No.
17, "Intangible Assets." The two statements modify the method of accounting for
business combinations and address the accounting for intangible assets. As of
January 1, 2002, the Company adopted the provisions of both SFAS No. 141 and
SFAS No. 142. The adoption of SFAS No. 141 did not have any effect on the
Company's financial statements.

     The provisions of SFAS No. 142 allow the Company to cease amortization of
goodwill and other intangible assets with indefinite lives. However, goodwill
and other intangibles are subject to annual impairment tests in which impairment
is defined as fair market value less than the carrying value of the asset on the
financial statements. SFAS No. 142 requires the Company to test all goodwill and
other intangible assets with indefinite lives for impairment within six months
of implementation. The Company has performed the first step of testing for
impairment by utilizing the discounted cash flow method which does not indicate
any impairment of goodwill or intangible assets with indefinite lives.

Intangible assets as of June 30, 2002 are comprised of (dollars in thousands):



                                                                ACCUMULATED       UNAMORTIZED       WEIGHTED
                                                INTANGIBLE      AMORTIZATION       BALANCE AT       AVERAGE
                                                ASSETS AT        AT JUNE 30,        JUNE 30,      USEFUL LIFE
                                                   COST             2002              2002         (IN YEARS)
                                              --------------   --------------    -------------    -----------
                                                                                             
Amortizable intangible assets                 $       52,455   $      (50,709)   $       1,746           11.9

NON-AMORTIZABLE INTANGIBLE ASSETS:
  Goodwill:
   FSI                                                65,401          (47,145)          18,257
   Cluster-Targeted                                    4,195             (209)           3,986
   All Others                                         47,196           (4,692)          42,505
  The Valassis name and other                         32,100          (20,759)          11,341

                                              ------------------------------------------------
Total non-amortizable intangible assets              148,892          (72,805)          76,089
                                              --------------   --------------    -------------
                        Total                 $      201,347   $     (123,514)   $      77,835
                                              ==============   ==============    =============


Amortizable intangible assets include a non-compete agreement, corporate logos
and a fully amortized pressroom operating system. The associated amortization
expense for the six months ended June 30, 2002 was $105,000. Amortization
expense is expected to be $210,000 for each of the next five succeeding years
including the current year.



The following table presents actual results of operations for the second quarter
2002 and six months ended June 30, 2002 and a reconciliation of reported net
income to the adjusted net income for the same periods of 2001:



                                                   QUARTER ENDED                SIX MONTHS ENDED
                                             JUNE 30,        JUNE 30,       JUNE 30,       JUNE 30,
                                               2002            2001           2002           2001
                                           ------------    -----------    -----------    ------------
                                                                             
Net income:
  Reported net income                      $     33,782    $    33,737    $    66,358    $     66,195
  Add back: goodwill and
   intangible amortization, after tax                 -            504              -           1,006
                                           ------------    -----------    -----------    ------------
                                           $     33,782    $    34,241    $    66,358    $     67,201
                                           ============    ===========    ===========    ============

Basic earnings per share:
  Reported net income                      $       0.63    $      0.63    $      1.24    $       1.24
  Add back: goodwill and
   intangible amortization                            -           0.01              -            0.02
                                           ------------    -----------    -----------    ------------
                                           $       0.63    $      0.64    $      1.24    $       1.26
                                           ============    ===========    ===========    ============
Diluted earnings per share:
  Reported net income                      $       0.62    $      0.62    $      1.22    $       1.22
  Add back: goodwill and
   intangible amortization                            -           0.01              -            0.02
                                           ------------    -----------    -----------    ------------
                                           $       0.62    $      0.63    $      1.22    $       1.24
                                           ============    ===========    ===========    ============


4.   CONTINGENCIES

     On July 27, 2001 a federal court jury returned a verdict against Dennis D.
Garberg & Associates, Inc. d/b/a The Sunflower Group (Sunflower) awarding the
Company $16.6 million which included damages for past and future lost profits.
The lawsuit, brought by the Company against Sunflower in February of 1999,
asserted that Sunflower wrongfully obtained proprietary information from the
Company's newspaper delivered sampling business. On April 5, 2002, after a
series of post-trial motions, the Court entered a total judgment of
approximately $5.4 million. A reasonable estimation of the Company's ultimate
recovery can not be made at this time and the Company has not recorded any
amount in its financial statements.

     The Company is 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 adverse effect on the
Company's financial position, results of operations or liquidity.



5.   SEGMENT REPORTING

     The Company's products are broken into three types, as follows:

  1. Mass-Distributed Products - products which provide mass reach at low cost,
     including:
     .  Free-standing inserts (FSI) - four color booklets containing promotions
        from multiple advertisers distributed through Sunday newspapers
     .  Run-of-press (ROP) - on-page newspaper advertising and promotions
  2. Cluster-Targeted Products - products targeted around geographic and
     demographic clusters, including:
     .  Solo newspaper inserts
     .  Newspaper-delivered product sampling/advertising
  3. One-to-One Products - products and services that pinpoint individuals to
     build loyalty to a brand, including:
     .  Customer Relationship Marketing (which includes PreVision)
     .  Promotion Watch - security consulting
     .  Non-consolidated investments in one-to-one promotion companies

     The Company has two reportable segments, Free-Standing Inserts (FSIs) and
Cluster-Targeted Products and three segments which do not meet the quantitative
thresholds for reporting separately -- ROP, Customer Relationship Marketing and
Promotion Watch. These segments are strategic business units that offer
different products and services. They are managed separately because each
business requires different marketing strategies and caters to a different
customer base.



(IN MILLIONS)                                               THREE MONTHS ENDED JUNE 30
-------------                          ----------------------------------------------------------------
                                                           CLUSTER-
                                            FSI            TARGETED        ALL OTHERS*        TOTAL
                                       -------------     -------------     -----------     ------------
                                                                               
       2002

Revenues from external customers       $       141.6     $        45.2     $      15.8     $      202.6
Intersegment revenues                              -                 -               -                -
Depreciation/amortization                        2.0               0.5               -              2.5
Segment profit                                  45.9               4.2             1.3             51.4

       2001

Revenues from external customers       $       147.6     $        51.7     $      17.9     $      217.2
Intersegment revenues                              -                 -               -                -
Depreciation/amortization                        2.3               0.5             0.5              3.3
Segment profit                                  46.2               7.4             0.2             53.8


*  Segments below the quantitative thresholds are primarily attributable to
   three segments of the Company. Those include a customer relationship
   marketing business, a run-of-press business, and a promotion security
   service. None of these segments has met any of the quantitative thresholds
   for determining reportable segments.



Reconciliations to consolidated financial statement totals are as follows:

                                  THREE MONTHS ENDED JUNE 30,
                                  ---------------------------
                                    2002              2001
                                  ---------        ----------
Profit for reportable segments    $    50.1        $     53.6
Profit for other segments               1.3               0.2
Unallocated amounts:
  Interest income                       0.2               0.1
  Other income                          0.8                 -
                                  ---------        ----------
Earnings before taxes             $    52.4        $     53.9
                                  =========        ==========

Domestic and foreign revenues for each of the three-month periods ended June 30
were as follows:

                                    2002              2001
                                  ---------        ----------
United States                     $   201.7        $    215.7
Canada                                  1.6               1.6
                                  ---------        ----------
Total                             $   203.3        $    217.3
                                  =========        ==========



(IN MILLIONS)                                  SIX MONTHS ENDED JUNE 30
------------                      ------------------------------------------------
                                               CLUSTER-
                                    FSI        TARGETED     ALL OTHERS*     TOTAL
                                  ---------    ---------    -----------    -------
                                                               
     2002

Revenues from external customers  $   289.9    $    83.0    $      33.4    $ 406.3
Intersegment revenues                     -            -              -          -
Depreciation/amortization               4.0          1.0            0.1        5.1
Segment profit                         92.1          8.0            1.7      101.8

     2001

Revenues from external customers  $   306.6    $   106.3    $      32.1    $ 445.0
Intersegment revenues                     -            -              -          -
Depreciation/amortization               4.6          1.0            1.0        6.6
Segment profit/(loss)                  92.4         13.5           (0.1)     105.8


*  Segments below the quantitative thresholds are primarily attributable to
   three segments of the Company. Those include a customer relationship
   marketing business, a run-of-press business, and a promotion security
   service. None of these segments has met any of the quantitative thresholds
   for determining reportable segments.



Reconciliations to consolidated financial statement totals are as follows:

                                   SIX MONTHS ENDED JUNE 30,
                                  --------------------------
                                     2002            2001
                                  ---------       ----------
Profit for reportable segments    $   100.1       $    105.9
(Loss)/Profit for other segments        1.7             (0.1)
Unallocated amounts:
 Interest income                        0.3              0.1
 Other income                           1.8                -
                                  ---------       ----------
Earnings before taxes             $   103.9       $    105.9
                                  =========       ==========

Domestic and foreign revenues for each of the six-month periods ended June 30
were as follows:

                                     2002            2001
                                  ----------      ----------
United States                     $   405.4       $    442.3
Canada                                  2.7              2.8
                                  ----------      ----------
Total                             $   408.1       $    445.1
                                  ==========      ==========

6.   EARNINGS PER SHARE

Earnings per common share ("EPS") data were computed as follows:

                                                    THREE MONTHS
                                                   ENDED JUNE 30,
                                               ----------------------
                                                 2002          2001
                                               ---------     --------
Net Earnings                                   $  33,782     $ 33,737
                                               =========     ========
Basic EPS:
  Weighted average common shares outstanding      53,346       53,431
                                               =========     ========
Earnings per common share - basic              $    0.63     $   0.63
                                               =========     ========
Diluted EPS:
  Weighted average common shares outstanding      53,346       53,431
  Weighted average shares purchased on
   exercise of dilutive options                    4,882        4,602
  Shares purchased with proceeds of options       (4,224)      (3,664)
  Shares contingently issuable                        58           50
                                               ---------     --------
  Shares applicable to diluted earnings           54,062       54,419
                                               =========     ========

Earnings per common share - diluted            $    0.62     $   0.62
                                               =========     ========





                                                                                  SIX MONTHS
                                                                                 ENDED JUNE 30,
                                                                           -------------------------
                                                                              2002           2001
                                                                           -----------    ----------
                                                                                    
Net Earnings                                                               $    66,358    $   66,195
                                                                           ===========    ==========
Basic EPS:
  Weighted average common shares outstanding                                    53,607        53,478
                                                                           ===========    ==========
Earnings per common share - basic                                          $      1.24    $     1.24
                                                                           ===========    ==========

Diluted EPS:
  Weighted average common shares outstanding                                    53,607        53,478
  Weighted average shares purchased on exercise of dilutive options              5,381         4,525
  Shares purchased with proceeds of options                                     (4,729)       (3,629)
  Shares contingently issuable                                                      58            50
                                                                           -----------    ----------
  Shares applicable to diluted earnings                                         54,317        54,424
                                                                           ===========    ==========
Earnings per common share - diluted                                        $      1.22    $     1.22
                                                                           ===========    ==========


7.   SUBSEQUENT EVENTS

     On July 1, 2002, the Company exercised its option to acquire the remaining
shares of Relationship Marketing Group, Inc. ("RMG"). As a result, the Company's
interest in Valassis Relationship Marketing Systems, LLC ("VRMS") was increased
to 87.9%. Effective July 1, 2002, the Company's consolidated financial
statements will include the results of VRMS.



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

Certain statements under the caption "Management's Discussion and Analysis of
Financial Condition and Results of Operations," constitute "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. Such forward-looking statements involve known and unknown risks and
uncertainties and other factors which may cause the actual results, performance
or achievements of the Company to be materially different from any future
results, performance or achievements expressed or implied by such
forward-looking statements and to cause future results to differ from our
operating results in the past. Such factors include, among others, the
following: a new competitor in the Company's core free-standing insert business
and consequent price war, which has occurred in the past when a new competitor
entered the market; new technology that would make free-standing inserts less
attractive; a shift in customer preference for different promotional materials,
promotional strategies or coupon delivery methods, including in-store
advertising systems and other forms of coupon delivery; an increase in the
Company's paper costs, a significant cost component of the Company's business;
or economic disruptions caused by terrorist activity, armed conflict or changes
in general economic conditions, or economic changes which affect the business of
our customers and lead to reduced sales promotion spending. The Company
disclaims any intention or obligation to update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise.

RESULTS OF OPERATIONS

THREE MONTHS ENDED JUNE 30, 2002 AND JUNE 30, 2001

Net sales decreased 6.7% from $217.2 million for the second quarter of 2001 to
$202.6 million for the second quarter of 2002. Free-standing insert (FSI)
revenues were down from $147.6 million for the quarter ended June 30, 2001 to
$141.6 million for the same quarter 2002. The decrease is primarily a result of
lower market share and pricing after the Company's earlier attempted price
increase did not take hold. However, this percentage decrease is less than that
of the first quarter of 2002, and market share improved as well. Revenues for
cluster-targeted products decreased 12.6% to $45.2 million for the quarter. The
decrease is primarily caused by continued weak demand for sampling/advertising
polybag programs. Net sales included a 5.5% increase in ROP (run-of-press)
sales. This increase is attributable to enhanced capabilities and expansion in
business with both new and existing customers.

Gross profit margin increased to 38.7% in the second quarter of 2002, up from
38.4% in the second quarter of 2001. The increase is largely due to a decrease
in paper costs for the current quarter. The Company has successfully placed the
majority of its paper requirements under multi-year contracts, providing
long-term cost stability.

Selling, general and administrative expenses decreased 3.6% from $23.1 million
in the second quarter of 2001 to $22.3 million in the second quarter of 2002.
This decrease is primarily the result of the Company's continued cost
containment program implemented in the second half of 2001.

Amortization expense of intangible assets and goodwill decreased from $858,000
to $52,000 in the second quarter ended June 30, 2002. The reduction is the
result of the Company's adoption of SFAS No. 142 for which the effect on
earnings per share was an increase of $0.01 in the three months ended June 30,
2002.



Net earnings were $33.8 million for the second quarter of 2002 versus $33.7
million for the same period last year.

SIX MONTHS ENDED JUNE 30, 2002 AND JUNE 30, 2001

For the six months ended June 30, 2002, net sales decreased 8.7% to $406.3
million from $444.9 million for the comparable period in 2001. Free-standing
insert (FSI) revenues were down from $306.6 million for the first six months of
2001 to $289.9 million for the first six months of 2002. This decrease is
primarily the result of a reduction of market share and price as compared to the
first half of 2001. However, market share improved in the second quarter versus
the first quarter and is expected to be approximately 50% for the year.
Cluster-targeted revenues decreased 21.9% to $83.0 million for the six months
ended June 30, 2002. The decrease is driven primarily by decreases in new
product introductions in the sampling/advertising polybag programs and continued
competition from commercial printers in solo inserts. Net sales included a 36.7%
increase in ROP (run-of-press) sales. This increase is attributable to enhanced
capabilities and increased demand.

Gross margin increased to 38.4% for the first six months of 2002, from 37.3% for
the same period in 2001. The increase is largely due to decreases in paper costs
for the first half of the year. The Company has successfully placed the majority
of its paper requirements under multi-year contracts, providing long-term cost
stability.

Selling, general and administrative expenses decreased 4.8% from $46.7 million
in 2001 to $44.5 million for the six months ended June 30, 2002. This decrease
is primarily the result of the Company's cost containment program implemented in
the second half of 2001.

Amortization expense of intangible assets and goodwill decreased from $1.7
million to $105,000 in the six months ended June 30, 2002. The reduction is the
result of the Company's adoption of SFAS No. 142 for which the effect on
earnings per share was an increase of $0.02 in the six months ended June 30,
2002.

Net earnings were $66.4 million for the six months ended June 30, 2002 versus
$66.2 million for the same period last year.

FINANCIAL CONDITION, LIQUIDITY AND SOURCES OF CAPITAL

The Company's liquidity requirements arise mainly from its working capital
needs, primarily accounts receivable, inventory and debt service requirements.
The Company does not offer financing to its customers. FSI customers are billed
for 75% of each order eight weeks in advance of the publication date and are
billed for the balance immediately prior to the publication date. The Company
inventories its work in progress at cost while it accrues progress billings as a
current liability at full sales value. Although the Company receives
considerable payments from its customers prior to publication of promotions,
revenue is recognized only upon publication dates. Therefore, the progress
billings on the balance sheet include any profits in the related receivables and
accordingly, the Company can operate with low, or even negative, working
capital.

Cash and cash equivalents totaled $51.5 million at June 30, 2002 versus $10.6
million at December 31, 2001. This was the result of cash provided by operating
activities of $100.5 million, and cash used in investing activities and
financing activities of $27.7 million and $32.0 million, respectively, during
the first six months of 2002.



Cash flow from operating activities increased from $56.1 million at June 30,
2001 to $100.5 million at June 30, 2002, primarily due to a $27.5 million
decrease in accounts receivable and a $6.5 million decrease in inventories. The
decrease in accounts receivable represents a return to a normalized receivable
balance as of June 30, 2002, as compared to a relatively higher balance as of
December 31, 2001. Inventories decreased as of June 30, 2002, primarily due to a
decrease in the cost of paper.

Net cash used in investing activities was $27.7 million up from $23.8 million in
2001. Capital expenditures increased $3.0 million due to timing of payments on
the addition of a new printing press. Additionally, the Company paid $8.0
million in a contingent purchase price payment for PreVision in the first
quarter of 2002. The Company made advances to and investments in VRMS of $9.6
million during the first half of 2002. On July 1, 2002, the Company exercised
its option to acquire the remaining shares of RMG for $4.5 million which will be
reflected in the next quarter's cash flows from investing activities.

As of June 30, 2002, the Company's debt has been reduced to $254.7, which
consists of $100.0 million of its 6-5/8% Senior Notes due 2009 and $154.7
million of Zero Coupon Convertible Notes due 2021. The Company has $125.0
million available under its revolving credit facility which expires in October
2002. The Company is currently in discussions to replace the facility.

The Company intends to use cash generated by operations to meet interest and
principal repayment obligations, for general corporate purposes, to reduce its
indebtedness, make acquisitions and from time to time to repurchase stock
through the Company's stock repurchase program.

As of June 30, 2002, the Company had authorization to repurchase an additional
4.1 million shares of its common stock under its existing share repurchase
program.

Management believes that the Company will generate sufficient funds from
operations and will have sufficient lines of credit available to meet currently
anticipated liquidity needs, including interest and required payments of
indebtedness.

CAPITAL EXPENDITURES - The Company operates three printing facilities. Capital
expenditures were $11.1 million for the six month period ended June 30, 2002,
largely representing the addition of a new printing press. Management expects
future capital expenditure requirements of approximately $15 million over each
of the next three to five years to meet increased capacity needs and to replace
or rebuild equipment as required. It is expected that equipment will be
purchased 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 consolidated financial statements. The U.S. Securities and Exchange
Commission ("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. Based on this definition, we
have identified the critical accounting policies and estimates addressed below.
We also have other key accounting policies, which involve the use of estimates,
judgments and assumptions. For additional information see Note 2, "Significant
Accounting Policies", of our Annual Report on Form 10-K for the year ended
December 31, 2001. The Company does not believe there is a great likelihood that
materially different amounts would be reported under different conditions or
using different assumptions related to the accounting policies described below.
However, application of these accounting policies involves the exercise of
judgment and use of assumptions as to future uncertainties and, as a result,
actual results could differ from these estimates.

IMPAIRMENT OF LONG-LIVED ASSETS - Long-lived assets historically have been
reviewed for impairment whenever events or changes in circumstances indicate
that the carrying amount of the asset may not be recoverable. Recoverability of
assets to be held and used is measured by a comparison of the carrying amount of
the assets to future net cash flows estimated to be generated by such assets. If
such assets are considered to be impaired, the impairment to be recognized is
the amount by which the carrying amount of the assets exceeds the fair value of
the assets. There are no events or changes in circumstances of which management
is aware indicating that the carrying value of the Company's long-lived assets
may not be recoverable. As described in Note 3, "Adoption of SFAS No. 141 and
142" of this Form 10-Q, the accounting treatment for goodwill and other
intangible assets changed effective January 1, 2002.

OTHER MATTERS - The Company does not have off-balance sheet arrangements,
financings, or other relationships with unconsolidated entities or other
persons, also known as "special purpose entities."



PART II - OTHER INFORMATION

Item 4.  Submission of Matters to a Vote of Security Holders

a.       The Company voted on the following proposals described in (b), (c) and
         (d) below at its Annual Meeting of Stockholders on May 14, 2002.

b.       The election of the nominees for directors who will serve for a term to
         expire at the next Annual Meeting of Stockholders or until their
         respective successors have been duly elected and qualified was voted on
         by the stockholders. The nominees, all of whom were elected were:
         Patrick F. Brennan, Kenneth V. Darish, Seth Goldstein, Barry P.
         Hoffman, Brian J. Husselbee, Robert L. Recchia, Marcella A. Sampson,
         Alan F. Schultz and Faith Whittlesey. Votes were cast for election of
         directors as follows:

        Director                  For           Withheld       Broker Non-Votes
        --------               ----------       ---------      -----------------

   Patrick F. Brennan          46,669,822         233,193              0
   Kenneth V. Darish           46,669,822         233,193              0
   Seth Goldstein              46,669,822         233,193              0
   Barry P. Hoffman            40,899,114       6,003,901              0
   Brian J. Husselbee          46,669,822         233,193              0
   Robert L. Recchia           40,899,114       6,003,901              0
   Marcella A. Sampson         46,669,822         233,193              0
   Alan F. Schultz             40,899,114       6,003,901              0
   Faith Whittlesey            46,669,822         233,193              0

c.       The proposal to approve the Company's 2002 Long-Term Incentive Plan was
         approved as follows:

                       For           Against       Abstain    Broker Non-Votes
                    ----------     ----------      -------    ----------------
                    31,919,837     11,869,189       16,351           0

d.       The proposal to ratify the selection of Deloitte & Touche LLP, as
         independent auditors of the Company for the 2002 fiscal year was
         approved as follows:

                       For          Against        Abstain    Broker Non-Votes
                    ----------     ----------      -------    ----------------
                    44,422,019      2,462,904       18,092           0



Item 6.  Exhibits and Reports on Form 8-K

a.   Exhibits

     10.3(g)    Amendment to Employment Agreement of Robert L. Recchia dated
                July 8, 2002

     10.4(g)    Amendment to Employment Agreement of Barry P. Hoffman dated
                June 26, 2002

     10.5(i)    Amendment to Employment Agreement of Richard P. Herpich dated
                May 13, 2002

     10.5(j)    Amendment to Employment Agreement of Richard P. Herpich dated
                July 8, 2002

     10.11(g)   Amendment to Employment Agreement of Alan F. Schultz dated
                June 26, 2002

     10.23      Employment Agreement dated March 18, 1992, between
                William F. Hogg, Jr. and Valassis Communications, Inc.

     10.23(a)   Amendment to Employment Agreement of William F. Hogg, Jr.
                dated December 22, 1995

     10.23(b)   Amendment to Employment Agreement of William F. Hogg, Jr.
                dated January 20, 1997

     10.23(c)   Amendment to Employment Agreement of William F. Hogg, Jr.
                dated December 23, 1998

     10.23(d)   Amendment to Employment Agreement of William F. Hogg, Jr.
                dated January 5, 2001

     10.23(e)   Amendment to Employment Agreement of William F. Hogg, Jr.
                dated January 11, 2002

     10.23(f)   Amendment to Employment Agreement of William F. Hogg, Jr.
                dated July 8, 2002

     10.24      Valassis Communications, Inc. Supplemental Benefit Plan dated
                September 15, 1998

     10.24(a)   First Amendment to Valassis Communications, Inc. Supplemental
                Benefit Plan dated June 25, 2002

b.   Form 8-K

     The Company filed a report on Form 8-K, dated May 14, 2002, announcing that
the Board of Directors had agreed to increase its share repurchase allocation to
a target of 75% of free cash flow for the balance of 2002.




SIGNATURES

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:  August 14, 2002

                                   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.