Catalina Marketing Provides Update on Color Printer Project

In advance of several meetings with the investment
community this week, Catalina Marketing Corporation (NYSE: POS) today
provided an update on the progress of Catalina Marketing Services'
project to install approximately 140,000 color printers for targeted
communications in its U.S. retail store network.
   Dick Buell, chief executive officer, said, "We are pleased with
the early progress made in the project and tests of the inkjet
printers at pilot retail locations are yielding encouraging results.
Preliminary testing in ten pilot stores indicates that the color
communications created with the new printers improved average
redemption rates by more than 25% over Catalina's current
black-and-white coupons. In addition, we are implementing a price
increase of two cents per standard, color communication for CMS
programs. The increase in price reflects the improved value and
effectiveness of our communications."
   National rollout of the printers and associated software is
expected to begin in mid-2006 and be complete by the end of 2007. When
the printer rollout is complete, color communications are estimated to
account for more than 85% of CMS distribution.
   Catalina Marketing anticipates investing approximately $100
million, primarily in capital expenditures, through the completion of
the installation of the project. The anticipated increase in capital
expenditures in Fiscal 2007 will increase depreciation expense in
Fiscal 2007 and future periods. The color printers will be depreciated
over a seven year life.
   Rick Frier, Catalina Marketing executive vice president and chief
financial officer, said, "Although it is still difficult to forecast
the full impact of the project because we are so early in the rollout,
our current models for the color printer project forecast that
Catalina Marketing Corporation will maintain a consolidated return on
invested capital of over 30%. As I mentioned on our third quarter
conference call, we expect that the significant capital investment in
the rollout will utilize our free cash flow in Fiscal 2007."
   Frier continued, "We previously mentioned the new investment in
the color printer project will likely put pressure on CMS operating
margins, with the largest impact in the initial year of roll out.
Recently, CMS operating margins have been favorably impacted by lower
than normal depreciation expense as a result of the continuing
operation of fully depreciated assets. With the elimination of this
effect due to the significant increase in capital expenditures for the
new color printers, as well as other expenses related to the
implementation of the color printer project, CMS operating margins
could be negatively impacted by five to seven percentage points in
Fiscal 2007. On a consolidated basis, primarily as a result of the
color printer project, Catalina Marketing Corporation (CMC) operating
margins are expected to decline by three to four percentage points in
Fiscal 2007, returning to more historical levels in Fiscal 2008."

   Summary of Color Print Commercialization Metrics

   The following table summarizes the status and estimates of certain
metrics associated with the color printing project. These metrics are
based on preliminary results from a multi-store pilot program, certain
assumptions and estimates regarding the timing of installation,
capital expenditures and expenses related to the project, and the
performance of the color printers once installed in stores. Further
these metrics are subject to the cautionary language set forth below
and the risk factors included in Item 7 of the Company's Annual Report
on form 10-K for the fiscal year ended March 31, 2005.
-0-
*T
            Metric                          Status / Estimate
---------------------------------- -----------------------------------
Stores in current pilot program                    20
---------------------------------- -----------------------------------
Installation time frame              Mid 2006 through December 2007
---------------------------------- -----------------------------------
Printers scheduled to be replaced         Approximately 140,000
---------------------------------- -----------------------------------
Standard Price Increase                $0.02 per standard, color
                                              communication
---------------------------------- -----------------------------------
Preliminary Redemption (10 store     25%+  higher than black & white
 test)
---------------------------------- -----------------------------------
Speed of Color Printer             Equivalent to the current thermal
                                                 printers
---------------------------------- -----------------------------------
Investment in Color Initiative         Approximately $100 million
---------------------------------- -----------------------------------
Depreciable Life of Printers                     7 Years
---------------------------------- -----------------------------------
FY 2007 Operating Margin Impact -   Decline approximately 5.0 to 7.0
 CMS                                               ppts
---------------------------------- -----------------------------------
FY 2007 Operating Margin Impact -   Decline approximately 3.0 to 4.0
 CMC                                               ppts
---------------------------------- -----------------------------------
Return on Capital                   Over 30% for Catalina Marketing
                                               Corporation
---------------------------------- -----------------------------------
*T

   Investor Conferences Scheduled

   Dick Buell, chief executive officer, will present at the Bear
Stearns Investment Conference in Palm Beach, Florida today. Mr. Buell
will also present at Baird's 2006 Business Solutions Conference in
Boston on Wednesday, March 1, 2006. The presentations will be web cast
and will be accessible through the Investor Relations Calendar of
Events section of the company's web site
(http://www.catalinamarketing.com).

   About Catalina Marketing Corporation

   Based in St. Petersburg, Fla., Catalina Marketing Corporation
(www.catalinamarketing.com) was founded over 20 years ago based on the
premise that targeting communications based on actual purchase
behavior would generate more effective consumer response. Today,
Catalina Marketing combines unparalleled insight into consumer
behavior with dynamic consumer access. This combination of insight and
access provides marketers with the ability to execute behavior-based
marketing programs, ensuring that the right consumer receives the
right message at exactly the right time. Catalina Marketing offers an
array of behavior-based promotional messaging, loyalty programs and
direct-to-patient information. Personally identifiable data that may
be collected from the company's targeted marketing programs, as well
as its research programs, are never sold or provided to any outside
party without the express permission of the consumer.

   Certain statements in the preceding paragraphs are
forward-looking, and actual results may differ materially. Statements
not based on historic facts involve risks and uncertainties,
including, but not limited to, potential complications, hardware and
software issues and delays related to the schedule, installation and
operation of color printers, the effectiveness of color printers to
increase sales and redemption rates or provide a more effective
advertising medium, the changing market for promotional activities,
especially as it relates to policies and programs of packaged goods
and pharmaceutical manufacturers and retailers, government and
regulatory statutes, rules, regulations and policies, the effect of
economic and competitive conditions and seasonal variations, actual
promotional activities and programs with the company's customers, the
pace of installation of the company's store network including as it
relates to the installation of color printers in existing and future
retail channels, the acceptance by the company's manufacturer clients
and retailers of color printers and related new and additional terms
and conditions, the success of new services and businesses and the
pace of their implementation, the company's ability to maintain
favorable client and retailer relationships, the outcome and impact of
an ongoing SEC investigation into certain of the company's prior
fiscal years, and the outcome and impact of the pending shareholder
class action and derivative lawsuits.