Exhibit 99.1

Risk Factors Relating to Our Business

Increased competition could reduce the demand for our services, which could have a material
adverse effect on our business, financial condition, results of operations and business prospects.

Competition in the promotions and
marketing services business is intense and includes many competitors. We compete for CPG and pharmaceutical manufacturer advertising, education and awareness, and consumer promotion budgets with a wide range of media including television, radio,
print and direct mail advertising, as well as several alternative in-store and point-of-sale programs and new technologies. While we believe we provide unique, cost-effective targeted marketing services, there are many parameters on which a CPG
manufacturer, pharmaceutical manufacturer or retailer may base its decision to allocate advertising or promotional expenditures, and there can be no assurance that our services will continue to compete effectively against other formats or that CPG
and pharmaceutical manufacturers and retailers will continue to use our marketing services. We also expect our competitors to continue to improve the performance of their current products or services, to reduce sales prices of their existing
products and services and to introduce new products, services or technologies that may offer greater performance and improved pricing. In addition, changes and advances in technology or product offering from competitors and other solutions providers
may enable merchants and retail companies to implement or install their own proprietary point-of-sale systems or provide other solutions for the distribution of communications.

A shift in consumer purchasing trends for certain categories of products from traditional retail supermarkets may cause a decrease in the utilization of our services.

Significant retailers including mass marketers and value chains have not installed our networks and/or do not use us for their marketing services for the
distribution of point-of-sale communications. Many retailers utilize our competitors and other solutions for such services and some conduct such services in-house or otherwise allocate their marketing dollars to other media outlets and marketing
strategies. Mass marketers and value chains have significantly increased their presence in the grocery business and retail industry over the last several years. Many mass marketers and value chains, including Wal-Mart, have not installed our network
or are not our clients. As mass marketers and value chains, such as Wal-Mart, increase their presence in the grocery business, the percentage of retail grocery purchases that occur in stores where our networks are installed may decrease. The impact
of the increased presence of mass marketers and value chains is particularly pronounced in certain product categories. If consumers continue to shift to alternative shopping channels, like club stores, mass merchandisers and value chains, the
ability and effectiveness of the Catalina Marketing Network® to reach retail shoppers, particularly in certain product categories, may decline. Any such change in shopping behavior could have a material adverse effect on our results of operations or financial condition.

Our business is dependent on the promotional spending of our manufacturer and retail partners, which may be effected by seasonal, economic, regulatory
and other factors over which we have no control.

In general, we expect our revenues to be greater during periods of increased
promotional activity by manufacturers. As a result, the pattern of promotion distribution can be irregular and may change from period to period depending on various factors, including the economy, competition, the timing of new product introductions
and the timing of manufacturers promotion planning and implementation. In addition, this pattern may be affected by seasonal factors such as holiday-related promotions and annual budgeting processes affecting when our clients use promotional
and consumer-related expenditure budgets. With respect to CHR, spending by our pharmaceutical manufacturer clients may be impacted by a variety of factors over which we have no control including the rate of introduction of new drugs to the market,
the timing of drugs coming off patent protection and other factors which limit the sale, distribution or application of certain pharmaceutical products. These factors, as well as the overall changes in the number of contracts we have with retailer
and manufacturer clients, the timing of changes of the installed store base and access to revenue producing transactions, may impact our revenues and profits in any particular period.

Our success depends on our relationships with retailers and pharmacies that provide access to consumers in their retail locations and we rely on data provided from retailers and pharmacies to trigger and report on
the delivery of our services.

We depend on retail stores and pharmacies to provide access to transactions with consumers and allow us
to install the Catalina Marketing Network® and
Health Resource Network on their premises. We believe that our relationships with our current retail and pharmacy clients are strong; however, in the past, some retailers and pharmacies have required us to remove our network from their stores or
negotiate significantly different or less advantageous terms



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in order for us to maintain networks in their stores. Should any of our significant retailers or pharmacy chains reduce in size, cease to exist, not renew
our agreements, require us to remove our network equipment or negotiate terms with us which are less advantageous than our current agreements, the ability and effectiveness of the Catalina Marketing Network® or Health Resource Network to reach retail shoppers and access transactions could be
reduced and/or the profitability of our operations could be reduced.

Consolidations between our current retail and pharmacy network
partners and companies that do not utilize our networks may decrease the installation base of our networks and reduce the utilization of our services or increase our operating costs. Internationally, certain value chains and mass marketers continue
to make acquisitions in the retail industry. Further significant acquisitions and consolidations could have a material impact on our ability to maintain and expand our international operations.

In addition, we rely on data provided by our retailers and pharmacies to trigger and report on the delivery of our services on behalf of our manufacturer
clients as well as provide a database to target transactions based on purchase history. Any change, interruption or inaccuracy of the data provided by our retailers and pharmacies could adversely impact the services we offer to our clients as well
as the data we utilize to report on transactions.

We may not succeed in our effort to develop new services or enter new retail channels and achieve
future growth.

A key element of our growth strategy is the development and sale of new products, services and technologies and entry
into new retail channels. To retain and attract manufacturers, retailers and pharmacies, we believe that we must continue to introduce additional successful services; the development and deployment of which may require significant expenditures.
While new products, services and technologies are currently under development, there can be no assurance that we will be able to successfully develop and market them to our clients and retailers. In addition, while we have dedicated significant
resources to expanding our CMS business into new retail channels beyond our foundation in the grocery channel, including installations in drug stores and mass merchandisers and pilot tests in convenience stores, there is no guaranty that we will be
able to successfully operate in these retail channels, or that we will achieve revenue growth from these channels. Our inability or failure to enter new retail channels, devise new marketing services or to complete the development or implementation
of particular services for use on a large scale, or the failure of such services to achieve market acceptance, could adversely affect our ability to achieve a significant part of our growth strategy. The absence of such growth could have a material
adverse effect on our business, results of operations and financial condition.

Our enhanced and expanded service offerings, including the deployment of
color printers, have and will continue to require significant capital expenditures.

We have announced that we are currently working on
the deployment of color ink jet printers in our existing retail grocery network in place of certain of our existing thermal black-and-white printers, and that we have and continue to pursue agreements to install our networks in new retail channels,
including retail drug stores and mass merchandisers. In addition, we have and continue to pursue other opportunities in new and existing retail channels to deploy color printers. These efforts have and may continue to require significant capital
expenditures. In addition, these efforts differ to some degree from our historical business and, as a result, carry additional risks.

The
deployment of color ink jet printers in our existing retail network will require substantial expenditures to acquire and install such printers and, in some instances, will replace existing thermal black-and-white printers that may not have reached
the end of their useful lives, which we plan to redeploy elsewhere. Color printers will require new and additional efforts and potential costs to be expended by our retailers, including the use and management of additional consumables, such as ink
and non-thermal paper, changes in software, network and bandwidth requirements, hardware and wiring and other logistical steps not required by our current network of thermal black-and-white printers. While we are working with Epson and other vendors
to try to simplify the use, servicing and supply of such printers and the required consumables, we cannot provide assurance that difficulties will not be encountered in installing, using and servicing such printers and the consumables. In addition,
while we believe the design of the printers and consumables will operate effectively and efficiently when fully deployed and operated in the field, due to the fact that the printers are highly customized and have not been tested for an extended
period of operation, there can be no assurance that the ongoing manufacture and delivery of the printers and consumables will move forward as currently planned, that the printers and consumables will operate in accordance with specifications, that
we will experience operating reliability consistent with our current thermal black-and-white printers or that we will not experience a significant number of failures resulting from design, manufacture, operation or other causes. Furthermore, while
we expect color printing to enhance the effectiveness of our clients marketing efforts or increase the redemption rates of incentives printed on our network over an extended period of time, a long term track record verifying such goal has not
yet been established.



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Hence, the deployment of color printers will involve the use of a substantial amount of capital and other expenditures with a risk that difficulties will be
encountered in installing and operating them and that they may not gain the acceptance we desire from retailers and our manufacturer clients. Such outcome could have a material adverse effect on our results of operations and financial condition.

The deployment and expansion of our existing networks in new retail channels and markets that we have not historically served, including
the retail drug store market, will require a significant amount of capital and other expenditures. Manufacturer clients using our services for new retail channels may differ, to some extent, from our historical client base due to the nature and
quantity of items carried in these retail channels. While we expect the deployment of our network in new retail channels to enhance the effectiveness of our clients marketing efforts, a track record verifying such goal has not yet been
established. As a result, the deployment of our network in new retail channels will involve the use of a substantial amount of capital and other expenditures with a risk that it may not gain the acceptance we desire from our clients. Such result
could have a material adverse effect on our results of operations and financial condition.

Significant anticipated new initiatives, including the
deployment of color printers, will impact our resources and management.

We have announced that we are currently working on several
significant initiatives including the deployment of color printers in our CMS grocery network, pursuit of new retail channels both domestically and internationally and further international expansion. As a result of these initiatives, subject to the
timing and success of these initiatives, we will experience an increased demand on our resources and management.

We are subject to risks which can
disrupt our operations, cause loss of data center capacity or interruption of telecommunication links that could adversely affect our business.

Our ability to protect our data centers against damage from fire, power loss, telecommunications failure, hurricanes or other disasters is critical to our future. We believe we have taken reasonable precautions to protect our data centers
and telecommunication links from events that could interrupt our operations. Any damage to our data centers or any failure of our telecommunications links that causes interruptions in our operations could materially adversely affect our ability to
meet our clients requirements, which could result in a material adverse effect on our results of operations and financial condition.

We are
subject to risks associated with the selection, availability and cost of insurance.

We have recently observed rapidly changing
conditions in certain areas of the traditional commercial insurance markets, in particular related to property and business interruption insurance for hazards related to severe storms, hurricanes and flooding. Such conditions have and may continue
to result in higher premium costs, higher policy deductibles, lower coverage limits and may also result in certain policy exclusions. As a result of the conditions in the insurance markets and the cost and/or availability of insurance, we retain
some portion or all of our insurable risks with respect to these hazards. Any unforeseen or catastrophic losses in excess of insured limits or risks and hazards for which we do not carry insurance may have a material adverse affect on our results of
operations or financial condition.

A breach of our network security could result in liability to us and deter customers from using our services.

Our networks may be vulnerable to unauthorized access, computer viruses and other disruptive problems. Any of the foregoing problems
could result in liability to us, decrease the confidence of our manufacturer and retail client base and deter customers from using our services. Unauthorized access could jeopardize the security of confidential information related to our Company
stored in our computer systems. Eliminating computer viruses and alleviating other security problems may require interruptions, delays or cessation of service, cause us to incur significant costs to remedy the problem and divert managements
attention. We can provide no assurance that the security measures we have implemented will not be circumvented or that any failure of these measures will not have a material adverse effect on our ability to obtain and retain customers. Any of these
factors could have a material adverse effect on our business.

Failure to defend our intellectual property rights may harm our competitive position, and
litigation to protect our intellectual property rights could be costly.

We hold United States and foreign patents on various aspects of
our business including the process of promotion and communication distribution, and have applied for additional patents. In addition, we regard certain computer software and each service application as proprietary and attempt to protect them through
copyright and trade secret laws and internal non-disclosure agreements and similar safeguards. In addition, we are working to expand into



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certain foreign markets where we do not currently hold patent protection or where we have limited patent coverage which may subject us to increased
competition in these markets. As a result of the foregoing, certain aspects of our services may not be adequately protected from infringement or copying. Further, there can be no assurance that our patents or trademarks would be upheld if challenged
or that competitors might not develop similar or superior processes or services outside the protection of any patents issued to us.

Third
parties may infringe or misappropriate our patents or other intellectual property rights, which could have a material adverse effect on our business, financial condition or operating results. The actions we take to protect our patents and other
proprietary rights may not be adequate. Litigation may be necessary to enforce our intellectual property rights, protect our trade secrets or determine the validity and scope of the proprietary rights of others. We cannot provide assurance that we
will be able to prevent infringement of our intellectual property rights or misappropriation of our proprietary information. In addition, litigation is time-consuming and expensive to defend and could result in the diversion of our time and
resources. Any claims from third parties may also result in limitations on our ability to use the intellectual property subject to these claims.

Intellectual property litigation against us could be costly and could result in the loss of significant rights.

We expect
that, as we continue to expand our service offerings and the number of competitors in targeted marketing grows, we may be increasingly subject to intellectual property infringement, unfair competition and related claims against us. Third parties may
also seek to invalidate certain of our patents. In addition, competitors and third parties may, in the future, name our clients as defendants in lawsuits, which may cause these clients to terminate their relationships with us. Our efforts to defend
these actions may not be successful. Our failure to prevail in this type of litigation could result in our paying monetary damages (which could be tripled if the infringement is found to have been willful); an injunction requiring us to stop
offering our services in their current form; our having to redesign our technology and business methods, which could be costly and time-consuming, even where a redesign is feasible; or our having to pay fees to license intellectual property rights,
which may result in unanticipated or higher operating costs. Any third-party claims, with or without merit, could be time consuming, result in costly litigation and damages, cause us to reduce or alter our services, delay or prevent service
enhancements or require us to enter into royalty or licensing agreements.

Legislation relating to consumer privacy and changes in government
regulations or the interpretation of such regulations could affect our ability to deliver targeted communications and collect data that we use in providing our marketing services, which could negatively affect our ability to satisfy our
clients needs.

The enactment of legislation related to consumer privacy issues could have a material adverse impact on our
marketing services. Any such legislation could place restrictions upon the collection and use of information that is currently legally available or the manner in which we collect, manage and store this data or could materially increase our cost of
managing or collecting some data. Legislation or industry regulation could also prohibit us from collecting or disseminating certain types of data, coupons, promotions, messages or newsletters, which could adversely affect our ability to meet our
clients requirements.

With respect to CHRs Health Resource Network, our ability to provide consumers with condition-specific
health information and direct-to-patient communications may be adversely affected by concerns over heath regulatory guidelines, interpretation by the Food and Drug Administration of regulations related to the promotion of pharmaceutical products and
laws, regulations and publicity regarding a patients right to privacy. Regulatory changes in some jurisdictions have increased manufacturer and retailer sensitivity and selectiveness as to what types of messages they will distribute in these
jurisdictions. In addition, changes in the laws and regulations or manner of enforcement of such laws and regulations could negatively impact our business and cause us to change our services or systems. While we are currently working with our
manufacturer and retailer clients to find an adequate solution to these concerns, there is no guarantee that we will be able to continue to distribute prints for these clients or that there will not be additional changes in the laws and regulations
in these and other jurisdictions that will further impact our operations.

Due to inherent limitations, there can be no assurance that our system of
disclosure and internal controls and procedures will be successful in preventing all errors or fraud, or in informing management of all material information in a timely manner.

Our management, including our CEO and CFO, does not expect that our disclosure controls and internal controls and procedures will prevent all error and
all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there
are resource constraints, and the benefits of controls must



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be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance
that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or
mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control.

The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under
all potential future conditions. Over time, a control may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of these inherent limitations, misstatements due to
error or fraud may occur and may not be detected.

There are inherent uncertainties involved in estimates, judgments and assumptions used in the
preparation of financial statements in accordance with U. S. GAAP. Any changes in estimates, judgments and assumptions could have a material adverse effect on our business, financial position and results of operations.

The consolidated and condensed consolidated financial statements included in the periodic reports we file with the SEC are prepared in accordance with
accounting principles generally accepted in the United States of America (U.S. GAAP). The preparation of financial statements in accordance with U.S. GAAP involves making estimates, judgments and assumptions that affect reported amounts
of assets, liabilities, revenues, expenses and income. Estimates, judgments and assumptions are inherently subject to change in the future, and any such changes could result in corresponding changes to the amounts of assets, liabilities, revenues,
expenses and income. Any such changes could have a material adverse effect on our financial position and results of operations.

Changes to financial
accounting standards may affect our reported results of operations.

A change in accounting standards could have a significant effect on
our reported results and may affect our previously reported transactions. New pronouncements and varying interpretations of existing pronouncements have occurred and may occur in the future. Changes to existing accounting rules or the application of
existing U. S. GAAP may adversely affect our reported financial results, which could result in a decrease in the value of our stock price.

Risks
Related to Shareholder Lawsuits

The Company and certain of our current and former directors and former officers are defendants in several
stockholder class action and derivative lawsuits.

Certain current and former directors and former officers of the Company and CHR, and
Catalina Marketing, as a nominal defendant, have been named in two shareholder derivative actions. The plaintiffs seek unspecified compensatory damages, restitution of improper salaries, insider trading profits and payments from us, and disgorgement
under the Sarbanes-Oxley Act of 2002. We have agreed in principle to settle the derivative litigation actions and have received preliminary approval from the Court on the settlement. While the terms of the settlement relative to the two pending
derivative actions are on terms that do not adversely affect the Company and involve no admission of liability by the Company or any of the current and former directors and former officers named in the lawsuit, the settlement is not final and is
subject to various conditions including court approval and other customary conditions.

In addition, in March, 2007, the Company, its board
of directors and ValueAct Capital, were named as defendants in a complaint purporting to be a class action captioned Brad Wind, Individually and On Behalf of All Others Similarly Situated v. Catalina Marketing Corporation, Frederick W. Beinecke,
Eugene P. Beard, Robert Gray Tobin, Evelyn V. Follit, Jeffrey W. Ubben, Edward S. Dunn, Jr., Peter T. Tattle, L. Dick Buell, and ValueAct Capital (Case No. UCN.52200-CA00 2380 xx CICL 07-2380-CI 20) which was filed in The Circuit Court of the Sixth
Circuit in and for Pinellas County, Florida alleging claims of breach of fiduciary duty of due care, loyalty and good faith and breach of the duty of candor against the members of our board of directors and ValueAct, and a claim against the Company
for aiding and abetting our board members breach of fiduciary duty.

To the extent that we do not settle these lawsuits, we intend to
vigorously defend against them. Furthermore, to the extent any of these lawsuits proceed in litigation, we cannot currently predict the impact or resolution of these litigations or reasonably estimate a range of possible loss, which could be
material, and the resolution of these lawsuits may harm our business, delay, change the terms or result in the termination of the merger agreement with H&F or otherwise have a material adverse impact on our financial condition. In addition,
securities lawsuits may result in



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substantial costs, divert managements attention and other resources, and have a material and adverse effect on our financial condition and the results
of our operations in the future.

Risks Related to the Acquisition of the Company

The Company entered into a definitive merger agreement to be acquired by the private equity firm Hellman & Friedman Capital Partners VI, L.P.

On March 8, 2007, we entered into a definitive agreement to be acquired by an affiliate of ValueAct Capital whereby ValueAct Capital would acquire
by merger 100% of the outstanding equity interests of the company that it does not already own for $32.10 per share in cash. Jeffrey W. Ubben, who has served as a director of Catalina since May 2006, is the co-founder, managing partner and principal
owner of ValueAct Capital. Thereafter, on April 17, 2007, we announced that we had entered into a definitive merger agreement to be acquired by the private equity firm H&F in an all-cash transaction valued at $1.7 billion, including the
assumption of approximately $136 million of current indebtedness pursuant to which H&F will acquire by merger 100% of the outstanding equity interests of the Company for $32.50 per share in cash. Prior to entering into the merger agreement with
H&F, the Company terminated its merger agreement with ValueAct Capital and paid the $8.4 million termination fee as required by the terms of that agreement. Under the terms of the merger agreement with H&F, the Company has agreed to pay a
termination fee of $50.6 million in the event it chooses to accept a competing bid prior to the vote of the stockholders with regard to the H&F agreement.

There is no assurance that our shareholders will approve the merger agreement or that other closing conditions will be satisfied. We are subject to several risks as a result of this merger agreement, including the
following:



| |  |  | the occurrence of any event, change or other circumstance that could give rise to the termination of the merger agreement;
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| |  |  | if the proposed merger is not completed, the share price of our common stock may change to the extent that the current market price of our common stock reflects an
assumption that the proposed merger will be completed;
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| |  |  | the outcome of any legal proceedings that have been or may be instituted against the Company and others relating to the merger agreement;
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| |  |  | the inability to complete the merger due to the failure to obtain stockholder approval or the failure to satisfy other conditions to consummation of the merger;
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| |  |  | the failure to obtain the necessary financing arrangements set forth in commitment letters received by H&F, Parent or Merger Sub in connection with the merger
agreement and the risk that the terms of the financing for the proposed merger may change;
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| |  |  | the failure of the merger to close for any reason;
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| |  |  | the risk that the proposed transaction disrupts current plans and operations and that our management and employees attention may be diverted from day-to-day
operations;
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| |  |  | the potential difficulties in employee retention as a result of the pending merger;
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| |  |  | the effect of the announcement of the merger on our client and retailer relationships, operating results and business generally;
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| |  |  | the ability to recognize the benefits of the merger;
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| |  |  | the amount of the costs, fees, expenses and charges related to the merger and the actual terms of certain financings that will be obtained for the merger and the
risk that certain costs related to the proposed merger, including the fees and/or expenses of our legal, accounting and financial advisors, must be paid even if the proposed merger is not completed;
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| |  |  | under circumstances defined in the merger agreement, we may be required to pay a termination fee of up to $50.6 million and reimburse out-of-pocket fees and
expenses incurred with respect to the transactions contemplated by the merger agreement, up to a maximum of $7,500,000, if the merger agreement is terminated;
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| |  |  | a failed merger may result in unfavorable publicity and/or a negative impression of us in the investment community.
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