(Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant’s Principal Executive Offices)

Indicate by check mark whether 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 registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

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

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

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

On April ~~20, 2015,~~18, 2016, the registrant had outstanding ~~38,317,621~~37,153,988 shares of common stock, par value $0.10 per share.

	(Unaudited)			(Audited)			(Unaudited)
	As of March 31,			As of December 31,			As of March 31,			As of December 31,
	2015			2014			2016			2015
ASSETS
Current assets:
Cash and cash equivalents	$	23,631		$	20,812		$	35,430		$	29,983
Accounts receivable, less allowance for doubtful accounts of $18,043 in 2015 and $19,725 in 2014		665,426			702,527
Accounts receivable, less allowance for doubtful accounts of $17,686 in 2016 and $17,810 in 2015								741,625			716,537
Inventories		871,310			926,809			894,350			922,162
Assets held for sale		15,799			-
Other current assets		31,226			30,042			35,153			27,310
Total current assets		1,607,392			1,680,190			1,706,558			1,695,992
Property, plant and equipment, net		133,640			138,217			132,452			133,751
Goodwill		394,186			398,042			299,147			299,355
Intangible assets, net		96,797			111,958			93,657			96,413
Other long-term assets		49,440			41,810			54,004			37,348
Total assets	$	2,281,455		$	2,370,217		$	2,285,818		$	2,262,859
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	467,657		$	485,241		$	521,132		$	531,949
Accrued liabilities		175,770			192,792			178,858			177,472
Liabilities held for sale		6,956			-
Current maturities of long-term debt		41			851			48			51
Total current liabilities		650,424			678,884			700,038			709,472
Deferred income taxes		13,985			17,763			7,508			11,901
Long-term debt		684,238			713,058			753,854			716,264
Other long-term liabilities		104,413			104,394			89,904			101,488
Total liabilities		1,453,060			1,514,099			1,551,304			1,539,125
Stockholders’ equity:
Common stock, $0.10 par value; authorized - 100,000,000 shares, issued - 74,435,628 shares in 2015 and 2014		7,444			7,444
Common stock, $0.10 par value; authorized - 100,000,000 shares, issued - 74,435,628 shares in 2016 and 2015								7,444			7,444
Additional paid-in capital		413,546			412,291			411,485			410,927
Treasury stock, at cost – 36,089,975 shares in 2015 and 35,719,041 shares in 2014		(1,057,955	)		(1,042,501	)
Treasury stock, at cost – 37,312,864 shares in 2016 and 37,178,394 shares in 2015								(1,105,119	)		(1,100,867	)
Retained earnings		1,532,325			1,541,675			1,475,216			1,463,821
Accumulated other comprehensive loss		(66,965	)		(62,791	)		(54,512	)		(57,591	)
Total stockholders’ equity		828,395			856,118			734,514			723,734
Total liabilities and stockholders’ equity	$	2,281,455		$	2,370,217		$	2,285,818		$	2,262,859

	For the Three Months Ended					For the Three Months Ended
	March 31,					March 31,
	2015			2014		2016		2015 (Revised)*
Net sales	$	1,332,375		$	1,254,139	$	1,352,296	$	1,332,375
Cost of goods sold		1,127,925			1,067,056		1,152,214		1,131,980
Gross profit		204,450			187,083		200,082		200,395
Operating expenses:
Warehousing, marketing and administrative expenses		198,372			148,849		167,678		197,581
Operating income		6,078			38,234		32,404		2,814
Interest expense, net		4,839			3,374		5,897		4,839
Income before income taxes		1,239			34,860
Income (loss) before income taxes							26,507		(2,025	)
Income tax expense		5,231			13,003		9,977		3,982
Net (loss) income	$	(3,992	)	$	21,857
Net (loss) income per share - basic:	$	(0.10	)	$	0.56
Net income (loss)						$	16,530	$	(6,007	)
Net income (loss) per share - basic:						$	0.45	$	(0.16	)
Average number of common shares outstanding - basic		38,115			39,194		36,593		38,115
Net (loss) income per share - diluted:	$	(0.10	)	$	0.55
Net income (loss) per share - diluted:						$	0.45	$	(0.16	)
Average number of common shares outstanding - diluted		38,534			39,655		36,875		38,115
Dividends declared per share	$	0.14		$	0.14	$	0.14	$	0.14

* During the third quarter of 2015, the Company elected a change in accounting principle for the valuation method of certain inventories to the last-in, first-out (“LIFO”) method from the first-in, first out method (“FIFO”). This change required retrospective application. As such, the financial statements presented for prior periods are titled “Revised”.

For the Three Months Ended

March 31,

2015

2014

Net (loss) income
$
(3,992
)

$
21,857

Other comprehensive (loss) income, net of tax

       Unrealized translation adjustment

(4,630
)

(545
)

       Minimum pension liability adjustments

932

581

       Unrealized interest rate swap adjustments

(476
)

(159
)

Total other comprehensive loss, net of tax

(4,174
)

(123
)

Comprehensive (loss) income
$
(8,166
)

$
21,734

	For the Three Months Ended
	March 31,
	2016			2015 (Revised)*
Net income (loss)	$	16,530		$	(6,007	)
Other comprehensive income (loss), net of tax
Translation adjustments		2,691			(4,630	)
Minimum pension liability adjustments		915			932
Cash flow hedge adjustments		(527	)		(476	)
Total other comprehensive income (loss), net of tax		3,079			(4,174	)
Comprehensive income (loss)	$	19,609		$	(10,181	)

	For the Three Months Ended						For the Three Months Ended
	March 31,						March 31,
	2015			2014			2016			2015 (Revised)*
Cash Flows From Operating Activities:
Net (loss) income	$	(3,992	)	$	21,857
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Net income (loss)							$	16,530		$	(6,007	)
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities:
Depreciation and amortization		12,223			9,523			11,731			12,223
Share-based compensation		2,640			3,225			2,911			2,640
Gain on the disposition of property, plant and equipment		(15	)		(4	)		(167	)		(15	)
Amortization of capitalized financing costs		272			287			166			272
Excess tax benefits related to share-based compensation		(262	)		(494	)
Excess tax cost (benefit) related to share-based compensation								133			(262	)
Asset impairment charges		23,610			-			-			23,610
Deferred income taxes		(1,858	)		(2,450	)		(1,881	)		(1,469	)
Changes in operating assets and liabilities (net of acquisitions):
Decrease (increase) in accounts receivable, net		26,217			(15,583	)
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable, net								(24,819	)		26,217
Decrease in inventory		42,759			81,714			28,018			46,023
Increase in other assets		(10,126	)		(1,041	)		(24,774	)		(10,751	)
Increase (decrease) in accounts payable		645			(47,191	)
Increase in accounts payable								9,571			645
Decrease in checks in-transit		(13,613	)		(31,751	)		(20,294	)		(13,613	)
Decrease in accrued liabilities		(16,521	)		(13,654	)
Increase (decrease) in other liabilities		743			(2,948	)
Net cash provided by operating activities		62,722			1,490
Increase (decrease) in accrued liabilities								1,997			(17,534	)
(Decrease) increase in other liabilities								(9,943	)		743
Net cash (used in) provided by operating activities								(10,821	)		62,722
Cash Flows From Investing Activities:
Capital expenditures		(5,490	)		(6,390	)		(9,877	)		(5,490	)
Proceeds from the disposition of property, plant and equipment		18			458			281			18
Net cash used in investing activities		(5,472	)		(5,932	)		(9,596	)		(5,472	)

Cash Flows From Financing Activities:
Net (repayments) borrowings under revolving credit facility		(29,630	)		4,562
Borrowings under Receivables Securitization Program		-			9,300
Repayment of debt		-			(135,000	)
Proceeds from the issuance of debt		-			150,000
Net disbursements from share-based compensation arrangements		(875	)		(1,704	)
Net borrowing (repayments) under revolving credit facility								37,388			(29,630	)
Net proceeds (disbursements) from share-based compensation arrangements								339			(875	)
Acquisition of treasury stock, at cost		(16,028	)		(12,491	)		(6,839	)		(16,028	)
Payment of cash dividends		(5,396	)		(5,509	)		(5,160	)		(5,396	)
Excess tax benefits related to share-based compensation		262			494
Excess tax (cost) benefit related to share-based compensation								(133	)		262
Payment of debt issuance costs		(36	)		(605	)		-			(36	)
Net cash (used in) provided by financing activities		(51,703	)		9,047
Net cash provided by (used in) financing activities								25,595			(51,703	)
Effect of exchange rate changes on cash and cash equivalents		(1,758	)		33			269			(1,758	)
Transfer of cash to held for sale		(970	)		-			-			(970	)
Net change in cash and cash equivalents		2,819			4,638			5,447			2,819
Cash and cash equivalents, beginning of period		20,812			22,326			29,983			20,812
Cash and cash equivalents, end of period	$	23,631		$	26,964		$	35,430		$	23,631
Other Cash Flow Information:
Income tax payments, net	$	3,183		$	2,236		$	1,027		$	3,183
Interest paid		6,213			2,424			7,292			6,213

The accompanying Condensed Consolidated Financial Statements represent ~~United Stationers~~Essendant Inc. (“~~USI”~~ESND”) with its wholly owned subsidiary ~~United Stationers Supply~~Essendant Co. (“~~USSC”~~ECO”), and ~~USSC’s~~ECO’s subsidiaries (collectively, ~~“United”~~“Essendant” or the “Company”). The Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States and include the accounts of ~~USI~~ESND and its subsidiaries. All intercompany transactions and balances have been eliminated. The Company operates in a single reportable segment as a leading distributor of ~~business~~workplace essentials.

During the first quarter of 2015, the Company approved a plan to change its corporate name to Essendant Inc., effective in June of 2015. See footnote 5, “Goodwill and Intangible Assets” for further disclosure.

The accompanying Condensed Consolidated Financial Statements are ~~unaudited, except for the~~unaudited. The Condensed Consolidated Balance Sheet as of December 31, ~~2014, which~~2015, was derived from the December 31, ~~2014~~2015 audited financial statements. The Condensed Consolidated Financial Statements have been prepared in accordance with the rules and regulations of the United States Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements, prepared in accordance with accounting principles generally accepted in the United States, have been condensed or omitted pursuant to such rules and regulations. Accordingly, the reader of this Quarterly Report on Form 10-Q should refer to the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2014~~2015 for further information.

In the opinion of management, the accompanying unaudited consolidated financial statements reflect all adjustments, consisting only of normal recurring adjustments, necessary to present fairly the financial position of ~~United~~Essendant at March 31, ~~2015~~2016 and the results of operations and cash flows for the ~~three months~~three-month periods ended March 31, ~~2015~~2016 and ~~2014.~~2015. The results of operations for the three months ended March 31, ~~2015~~2016 should not necessarily be taken as indicative of the results of operations that may be expected for the entire year.

The Company uses the last-in, first-out (“LIFO”) method for valuing approximately 75% and 74% of its total inventory as of March 31, 2015 and December 31, 2014, respectively. The remaining inventory is valued under the first-in, first-out (“FIFO”) accounting method. An actual valuation of inventory under the LIFO method can be made only at the end of each fiscal year based on the inventory levels and costs at that time. Interim LIFO calculations are based on management’s estimates of expected year-end inventory levels and costs, and are subject to the final year-end LIFO inventory valuation. Inventory valued under the FIFO and LIFO accounting methods is recorded at the lower of cost or market. If the Company had valued its entire inventory under the lower of FIFO cost or market, inventory would have been $120.9 million and $118.6 million higher than reported as of March 31, 2015 and December 31, 2014, respectively.

The quarterly change in the LIFO reserve as of March 31, 2015 resulted in a $2.3 million increase in cost of goods sold related to 2015 inflation. The change in the LIFO reserves as of March 31, 2014 resulted in a $0.5 million decrease in costs of goods sold which included LIFO liquidations relating to decrements in the Company’s office products and furniture pools which resulted in a $4.0 million liquidation of LIFO inventory quantities carried at lower costs in prior years as compared with the cost of purchases in the year. This liquidation was partially offset by LIFO expense of $3.5 million related to 2014 inflation.

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue ~~From~~from Contracts ~~With~~with Customers,, that outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The ASU is based on the principle that an entity should recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The ASU also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to fulfill a contract. Entities have the option of using either a full retrospective or a modified retrospective approach for the adoption of the new standard. In August 2015, the FASB issued ASU No. 2015-14, Revenue from Contracts with Customers, which deferred the effective date of ASU No. 2014-09. This standard is effective for fiscal years beginning after December 15, ~~2016,~~2017, including interim periods within that reporting period. The Company is currently evaluating the new guidance to determine the impact it will have on its consolidated financial statements.

In May 2015, he FASB issued ASU No. 2015-07, Fair Value Measurement (Topic 820): Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent). Under the standard, investments for which fair value is measured at net asset value ("NAV") per share (or its equivalent) using the practical expedient will no longer be categorized in the fair value hierarchy. The Company adopted this standard on January 1, 2016, which had no impact on the quarterly financial statements.

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), that requires lessees to recognize right-of-use assets and lease liabilities for all leases other than those that meet the definition of short-term leases. For short-term leases, lessees may elect an accounting policy by class of underlying asset under which these assets and liabilities are not recognized and lease payments are generally recognized over the lease term on a straight-line basis. This standard will be effective for annual periods beginning after December 15, 2018, including interim periods within that reporting period, and early application is permitted. The Company is currently evaluating the new guidance to determine the impact it will have on its consolidated financial statements.

In March 2016, the FASB issued ASU No. 2016-09, Compensation – Stock Compensation (Topic 718), Improvements to Employee Share-Based Payment Accounting, the objective of which is to identify, evaluate, and improve areas of generally accepted accounting principles (GAAP) for which cost and complexity can be reduced while maintaining or improving the usefulness of the information provided to users of financial statements. This standard will be effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods, and early adoption is permitted. The Company is currently evaluating the new guidance to determine the impact it will have on its consolidated financial statements.

During the third quarter of 2015, the Company elected a change in accounting principle for the valuation method of certain inventories to the last-in, first-out (“LIFO”) method from the first-in, first out method (“FIFO”). This change required retrospective application. As such, the financial statements presented for prior periods are titled “Revised”. Refer to the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 for further information.

Approximately 98.5% and 98.4% of total inventory as of March 31, 2016 and December 31, 2015, respectively, has been valued under the LIFO method. An actual valuation of inventory under the LIFO method can be made only at the end of each fiscal year based on the inventory levels and costs at that time. Interim LIFO calculations are based on management’s estimates of expected year-end inventory levels and costs, and are subject to the final year-end LIFO inventory valuation. Inventory valued under the LIFO accounting method is recorded at the lower of cost or market. If the Company had valued its entire inventory under the lower of FIFO cost or market, inventory would have been $148.6 million and $147.8 million higher than reported as of March 31, 2016 and December 31, 2015, respectively.

On ~~May 30, 2014, USSC~~July 31, 2015, Essendant Co. completed the acquisition of ~~CPO,~~100% of the capital stock of Nestor Sales LLC (“Nestor”), a leading ~~online retailer~~wholesaler and distributor of ~~brand name power~~ tools, equipment and ~~equipment. The~~supplies to the transportation industry. This acquisition ~~of CPO significantly expanded~~accelerates the Company’s digital resources and capabilities to support resellers as they transition to an increasingly online environment. CPO’s expertise will strengthen United’s ability to offer features like improved product content, real-timegrowth in the automotive aftermarket, complements the Company’s existing industrial offerings while providing access to ~~inventory~~new customer segments, and ~~pricing, digital marketing~~advances a key strategic pillar to diversify into channels and ~~merchandising, and an enhanced digital platform to~~categories that leverage our ~~resellers and manufacturing partners.~~common platform.

The purchase price was $37.8 million, including $5.5 million related to the estimated fair value of contingent consideration which is based upon the achievement of certain sales targets during a three-year period immediately following the acquisition date. The final payments related to the contingent consideration will be determined by actual achievement in the earn-out periods and will be between zero and $10$41.8 million. Any changes to the estimated fair value after the original purchase accounting is completed will be recorded in “warehousing, marketing and administrative expenses” in the period in which a change occurs. The Company financed the 100% stock acquisition with borrowings under the Company’s available committed bank facilities.

The Company has developed a preliminary estimate of the fair value of assets acquired and liabilities assumed for purposes of allocating the purchase price. This estimate is subject to change as the valuation activities are completed. The fair value of the assets and liabilities acquired were estimated using various valuation methods including estimated selling price, a market approach, and discounted cash flows using both an income and cost approach.

~~At March 31, 2015, the preliminary allocation of the purchase price is as follows (amounts in thousands):~~

~~The purchased identifiable intangible assets are as follows (amounts in thousands):~~

~~Any changes to the preliminary estimates of the fair value of assets acquired and liabilities assumed, some of which may be material, will be allocated to residual goodwill.~~

On October 31, 2014, USSC completed the acquisition of all of the capital stock of Liberty Bell Equipment Corp., a United States wholesaler of automotive aftermarket tools and equipment, and its affiliates (collectively, MEDCO) including G2S Equipment de Fabrication et d’Entretien ULC, a Canadian wholesaler. MEDCO advances a key pillar of the Company’s strategy, which is to diversify into higher growth and margin channels and categories. It also brings expanded categories and services to customers.

The purchase price was $149.9 million, including $4.7 million related to the estimated fair value of contingent consideration which is based upon the achievements of certain sales and EBITDA targets over the next three years as well as $6.0 million reserved as a payable upon completion of an eighteen month indemnification period. The final payments related to the contingent consideration will be determined by actual achievement in the earn-out periods and will be between zero and $10 million. Any changes to the estimated fair value after the original purchase accounting is completed will be recorded in “warehousing, marketing and administrative expenses” in the period in which a change occurs. This acquisition was funded through a combination of cash on hand and cash available under the Company’s ~~committed bank facilities.~~revolving credit facility.

The Company has developed a preliminary ~~estimate~~estimates of the fair ~~value~~values of assets acquired and liabilities assumed for purposes of allocating the purchase price. The ~~estimate is~~estimates are subject to change as the valuation activities are completed. The fair ~~value~~values of the assets and liabilities ~~acquired~~ were estimated using various valuation methods including estimated selling ~~price, a~~prices, market approach, and discounted cash flows using both an income and cost approach.

~~At March 31, 2015, the preliminary allocation of the purchase price is as follows (amounts in thousands):~~

~~The purchased identifiable intangible assets are as follows (amounts in thousands):~~

Any changes to the preliminary ~~allocation~~allocations of the purchase price, some of which may be material, will be allocated to residual goodwill.

~~Assets Held for Sale~~At March 31, 2016, the preliminary allocation of the purchase price was as follows (amounts in thousands):

The purchased identifiable intangible assets were as follows (amounts in thousands):

On February ~~10, 2015,~~16, 2016, the Company ~~approved a plan~~announced an agreement to ~~sell its operations~~purchase from Staples, Inc. contracts and related assets representing more than $550 million in ~~Mexico as the subsidiary~~annual sales to minority and woman-owned office supply resellers and their large corporate and other enterprise customers. The transaction is ~~not strategic~~subject to the ~~Company’s long-term business plan. The Company plans to dispose~~successful completion of the ~~entity in 2015. As~~proposed merger of Staples and Office Depot, as well as other regulatory and customary closing conditions. A court ruling on the preliminary injunction action brought by the Federal Trade Commission to block the proposed merger is expected during the second quarter of 2016. Under the terms of the approval date, in accordance with Accounting Standards Codification (ASC) 360-10-45-9, the Mexican subsidiary met all of the criteria to be classified as a held-for-sale asset. In accordance with ASC 350-20-40, the Company allocated a proportionate share of the goodwill balance from the office product and janitorial and breakroom supply reporting unit based on the subsidiary’s relative fair value to the reporting unit and performed an impairment test for the allocated goodwill utilizing the cost approach to value the entity. Based upon the impairment test, the $3.3 million of goodwill was determined to be fully impaired. Additionally, in conjunction with classifying the subsidiary as a held-for-sale asset disposal group, the Company revalued the disposal group to fair value using the cost-approach method less the estimated cost to sell. The carrying value, including a $10.1 million cumulative foreign currency translation adjustment, of the disposal was then compared to the fair value less the estimated cost to sell resulting in a pre-tax impairment loss of $10.1agreement, Essendant will pay Staples approximately $22.5 million. The goodwill impairment of $3.3 million, the held-for-sale impairment of $10.1 million and the $0.1 million estimated cost to sell are recorded in the first quarter of 2015 within “warehousing, marketing and administrative expenses.” The Company anticipates additional financial statement impacts during the remainder of 2015 related to transaction costs, foreign exchange volatility, and operating results.

As of March 31, 2015, the carrying amounts, excluding intercompany accounts, of the Mexican subsidiary by major classes of assets and liabilities included in the Consolidated Balance Sheet are as follows (in thousands):

As of March 31, ~~2015,~~2016, the Company has two active equity compensation plans. Under the ~~Amended and Restated 2004~~2015 Long-Term Incentive Plan (as amended and restated), award ~~vehicles~~instruments include, but are not limited to, stock options, restricted stock awards, restricted stock units (“RSUs”), and performance-based awards. Associates and non-employee directors of the Company are eligible to become participants in the plan. The Nonemployee Directors’ Deferred Stock Compensation Plan allows non-employee directors to elect to defer receipt of all or a portion of their annual retainer ~~and meeting fees.~~in deferred stock units.

The Company granted 120,376 shares of restricted stock and 247,510 RSUs during the first three months of 2016, compared to 46,229 shares of restricted stock and 145,552 RSUs during the first three months of 2015. ~~No stock options were granted during the first quarter of 2015. During the first three months of 2014, the Company granted 56,451 shares of restricted stock, 145,355 RSUs, and 5,538 stock options.~~

Commencing in the first quarter of 2015, the Company began certain restructuring actions which included workforce reductions and facility closures. In the first quarter of 2015, the Company recorded a $6.0 million of pre-tax ~~charge~~expense relating to a workforce ~~reduction~~reductions. During the first quarter of 2016 and a2015, the Company recorded $0.3 million and $0.4 million, respectively, of pre-tax ~~charge~~expense relating to facility ~~consolidations that was~~consolidations. These charges were included in “warehousing, marketing and administrative expenses.” Cash ~~outflows~~outlays for these actions ~~will occur~~occurred primarily in 2015 and were approximately $0.7 million and $0.5 million, inrespectively, for the three months ended March 31, 2016 and 2015. As of March 31, ~~2015,~~2016, the Company has accrued liabilities for these actions of $5.9 million. The Company is estimating an additional $2.6 million to be incurred in the remainder of 2015 due to facility closures related to this action for a total 2015 expense of approximately $9.0$1.8 million.

Commencing in the fourth quarter of 2015, the Company executed actions to reduce costs through management delayering in order to achieve broader functional alignment of the organization. In the fourth quarter of 2015, the Company recorded an $11.9 million pre-tax charge relating to this workforce reduction included in “warehousing, marketing and administrative expenses.” Cash outlays associated with these charges were approximately $3.1 million in the three months ended March 31, 2016. As of March 31, 2016, the Company has accrued liabilities for these actions of $7.9 million.

The changes in the carrying amount of goodwill are noted in the following table (in thousands):

The following table summarizes the intangible assets of the Company by major class of intangible assets and the cost, accumulated amortization, net carrying amount, and weighted average life, if applicable (in thousands):

	March 31, 2015								December 31, 2014								March 31, 2016								December 31, 2015
								Weighted								Weighted								Weighted								Weighted
								Average								Average								Average								Average
	Gross					Net		Useful	Gross					Net		Useful	Gross					Net		Useful	Gross					Net		Useful
	Carrying		Accumulated			Carrying		Life	Carrying		Accumulated			Carrying		Life	Carrying		Accumulated			Carrying		Life	Carrying		Accumulated			Carrying		Life
	Amount		Amortization			Amount		(years)	Amount		Amortization			Amount		(years)	Amount		Amortization			Amount		(years)	Amount		Amortization			Amount		(years)
Intangible assets subject to amortization
Customer relationships and other intangibles	$	124,697	$	(43,813	)	$	80,884	16	$	125,761	$	(41,123	)	$	84,638	16	$	138,422	$	(54,140	)	$	84,282	16	$	137,938	$	(51,357	)	$	86,581	16
Non-compete agreements		4,658		(2,675	)		1,983	4		4,672		(2,364	)		2,308	4		4,654		(4,260	)		394	4		4,644		(4,260	)		384	4
Trademarks		13,728		(1,398	)		12,330	14		14,428		(1,716	)		12,712	13		13,734		(4,753	)		8,981	14		13,688		(4,240	)		9,448	14
Total	$	143,083	$	(47,886	)	$	95,197		$	144,861	$	(45,203	)	$	99,658		$	156,810	$	(63,153	)	$	93,657		$	156,270	$	(59,857	)	$	96,413
Intangible assets not subject to amortization
Trademarks		1,600		-			1,600	n/a		12,300		-			12,300	n/a
Total	$	144,683	$	(47,886	)	$	96,797		$	157,161	$	(45,203	)	$	111,958

During the first quarter of 2015, the Company approved a plan to change its corporate name in order to more accurately reflect its purpose and vision. The corporate names of the Company and several of its operating subsidiaries, including USSC and ORS Nasco, LLC, will change in the second quarter of the year. Accordingly, inIn the first quarter of 2015, the Company recorded a pre-tax non-cash impairment charge of $10.2 million to write-down the trademarks of ORS Nasco and certain OKI brands to their fair ~~value. It~~value related to the corporate name change that was ~~also determined that the useful lives did not extend past~~approved in February 2015 and effective June 1, 2015. This impairment charge was recorded in “warehousing, marketing and administrative expenses.” The Company utilized the discounted cash flow method to determine the fair value of ~~the intangibles~~these trademarks based upon management’s current forecasted future revenues from the trademarks. The ~~Company determined the useful lives of these intangibles based upon management’s timeline for rebranding. The~~ trademarks ~~had a total value of $1.5 million at March 31, 2015 and will be~~were fully amortized byas of December 31, 2015. ~~The Company is evaluating how it will utilize these assets in the future.~~

The following table summarizes the amortization expense to be incurred in ~~2015 and over the next four years~~2016 through 2020 on intangible assets (in thousands):

Year	Amount		Amount
2015	$	11,355
2016		12,785	$	12,314
2017		10,805		10,855
2018		7,452		8,111
2019		5,679		6,993
2020				6,990

The change in Accumulated Other Comprehensive Income (Loss) (“AOCI”) by component, net of tax, for the period ended March 31, ~~2015 is~~2016 was as follows (amounts in thousands):

	Foreign Currency Translation			Cash Flow Hedges			Defined Benefit Pension Plans			Total			Foreign Currency Translation			Cash Flow Hedges			Defined Benefit Pension Plans			Total
AOCI, balance as of December 31, 2014	$	(11,923	)	$	274		$	(51,142	)	$	(62,791	)
AOCI, balance as of December 31, 2015													$	(9,866	)	$	146		$	(47,871	)	$	(57,591	)
Other comprehensive (loss) income before reclassifications		(4,630	)		(702	)		-			(5,332	)		2,691			(753	)		-			1,938
Amounts reclassified from AOCI		-			226			932			1,158			-			226			915			1,141
Net other comprehensive (loss) income		(4,630	)		(476	)		932			(4,174	)		2,691			(527	)		915			3,079
AOCI, balance as of March 31, 2015	$	(16,553	)	$	(202	)	$	(50,210	)	$	(66,965	)
AOCI, balance as of March 31, 2016													$	(7,175	)	$	(381	)	$	(46,956	)	$	(54,512	)

The following table details the amounts reclassified out of AOCI into the income statement during the three-month period ending March 31, ~~2015 respectively~~2016 (in thousands):

Basic earnings per share (“EPS”) is computed by dividing net income by the weighted-average number of common shares outstanding during the period. Diluted EPS reflects the potential dilution that could occur if dilutive securities were exercised into common stock. Stock options, restricted stock, restricted stock units and deferred stock units are considered dilutive securities. For the three-month periods ~~ending~~ended March 31, 2016 and 2015, ~~and 2014, 0.4~~0.3 million and ~~0.5~~0.4 million shares of such securities, respectively, were outstanding but were not included in the computation of diluted earnings per share because the effect would be antidilutive. An additional 0.4 million shares of common stock outstanding at March 31, 2015 were excluded from the computation of diluted earnings per share due to the net loss. The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share data):

For the Three Months Ended

March 31,

2015

2014

Numerator:

Net (loss) income
$
(3,992
)

$
21,857

Denominator:

Denominator for basic earnings per share -

weighted average shares

38,115

39,194

Effect of dilutive securities:

Employee stock options and restricted units

419

461

Denominator for diluted earnings per share -

Adjusted weighted average shares and the effect of dilutive

securities

38,534

39,655

Net income per share:

Net (loss) income per share - basic
$
(0.10
)

$
0.56

Net (loss) income per share - diluted
$
(0.10
)

$
0.55

	For the Three Months Ended
	March 31,
	2016		2015
Numerator:
Net income (loss)	$	16,530	$	(6,007	)
Denominator:
Denominator for basic earnings per share -
weighted average shares		36,593		38,115
Effect of dilutive securities:
Employee stock options and restricted stock		282		-
Denominator for diluted earnings per share -
Adjusted weighted average shares and the effect of dilutive securities		36,875		38,115
Net income (loss) per share:
Net income (loss) per share - basic	$	0.45	$	(0.16	)
Net income (loss) per share - diluted⁽¹⁾	$	0.45	$	(0.16	)

As of ~~December~~March 31, ~~2014,~~2016 , the Company had Board authorization to repurchase ~~$42.4 million of USI common stock. In February 2015, the Board of Directors authorized the Company to purchase an additional $100.0~~$68.2 million of common stock. During the three-month periods ended March 31, ~~2015~~2016 and ~~2014,~~2015, the Company repurchased ~~402,679~~241,270 and ~~331,369~~402,679 shares of ~~USI’s~~the Company’s common stock at an aggregate cost of ~~$16.3~~$6.8 million and ~~$13.7~~$16.3 million, respectively. Depending on market and business conditions and other factors, the Company may continue or suspend purchasing its common stock at any time without notice. Acquired shares are included in the issued shares of the Company and treasury stock, but are not included in average shares outstanding when calculating earnings per share data. During the first three months of ~~2015~~2016 and ~~2014,~~2015, the Company reissued ~~31,745~~106,800 and ~~73,750~~31,745 shares, respectively, of treasury stock to fulfill its obligations under its equity incentive plans.

~~USI~~ESND is a holding company and, as a result, its primary sources of funds are cash generated from operating activities of its direct operating subsidiary, ~~USSC,~~ECO, and from borrowings by ~~USSC.~~ECO. The 2013 Credit Agreement, the 2013 Note Purchase Agreement, and the Receivables Securitization Program (each as defined in Note 911 of the Company’s Form 10-K for the year ended December 31, ~~2014)~~2015) contain restrictions on the use of cash transferred from ~~USSC~~ECO to ~~USI.~~ESND.

	As of		As of		As of			As of
	March 31, 2015		December 31, 2014		March 31, 2016			December 31, 2015

2013 Credit Agreement	$	334.2	$	363.0	$	405.8		$	368.4
2013 Note Purchase Agreement		150.0		150.0		150.0			150.0
Receivables Securitization Program		200.0		200.0		200.0			200.0
Mortgage & Capital Lease		0.1		0.9		0.1			0.1
Transaction Costs						(2.0	)		(2.2	)
Total	$	684.3	$	713.9	$	753.9		$	716.3

As of March 31, ~~2015, 78.1%~~2016, 80.2% of the Company’s outstanding debt, excluding capital leases isand transaction costs, was priced at variable interest rates based primarily on the applicable bank prime rate or London InterBank Offered Rate (“LIBOR”).

The Company had outstanding letters of credit of ~~$11.1~~$11.6 million under the 2013 Credit Agreement as of March 31, ~~2015~~2016 and December 31, ~~2014.~~2015.

Borrowings under the 2013 Credit Agreement bear interest at LIBOR for specified interest periods or at the Alternate Base Rate (as defined in the 2013 Credit Agreement), plus, in each case, a margin determined based on the Company’s permitted debt to EBITDA ratio calculated as provided in Section 6.20 of the 2013 Credit Agreement (the “Leverage Ratio”). Depending on the Company’s Leverage Ratio, the margin on LIBOR-based loans ranges from 1.00% to 2.00% and on Alternate Base Rate loans ranges from 0%0.00% to 1.00%. As of March 31, ~~2015,~~2016, the applicable margin for LIBOR-based loans was ~~1.375%~~1.50% and for Alternate Base Rate loans was ~~0.375%~~0.50%. ~~USSC~~Effective in April 2016, the applicable margin for LIBOR-based loans was 1.75% and for Alternate Base Rate loans was 0.75%. ECO is required to pay the lenders a fee on the unutilized portion of the commitments under the 2013 Credit Agreement at a rate per annum between 0.15% and 0.35%, depending on the Company’s Leverage Ratio.

As of March 31, ~~2015~~2016 and December 31, ~~2014, $380.7~~2015, $524.1 million and ~~$360.3~~$448.6 million, respectively, of receivables had been sold to the Investors (as defined in Note 911 of the Company’s Form 10-K for the year ended December 31, ~~2014)~~2015). ~~United Stationers Receivables, LLC (“USR”)~~ESR had $200.0 million outstanding under the Receivables Securitization Program as of March 31, ~~2015~~2016 and December 31, ~~2014.~~2015.

For additional information about the 2013 Credit Agreement, the 2013 Note Purchase Agreement, and the Receivables Securitization Program, see Note 911 of the Company’s Form 10-K for the year ended December 31, ~~2014.~~2015.

The Company maintains pension plans covering union and certain non-union employees. For more information on the Company’s retirement plans, see Note 1113 to the Company’s Consolidated Financial Statements in the Form 10-K for the year ended December 31, ~~2014.~~2015. A summary of net periodic pension cost related to the Company’s pension plans for the ~~three months~~three-month periods ended March 31, 2016 and 2015 ~~and 2014 is~~was as follows (dollars in thousands):

	For the Three Months Ended March 31,						For the Three Months Ended March 31,
	2015			2014			2016			2015
Service cost - benefit earned during the period	$	400		$	328		$	317		$	400
Interest cost on projected benefit obligation		2,270			2,243			2,343			2,270
Expected return on plan assets		(2,805	)		(2,558	)		(2,718	)		(2,805	)
Amortization of prior service cost		75			45			74			75
Amortization of actuarial loss		1,450			905			1,419			1,450
Net periodic pension cost	$	1,390		$	963		$	1,435		$	1,390

The Company made cash contributions of $10.0 million and $2.0 million to its pension plans during ~~each of~~ the ~~quarters~~three-month periods ended March 31, 2016 and 2015, ~~and 2014.~~respectively. Additional contributions, if any, for ~~2015~~2016 have not yet been determined. As of March 31, ~~2015~~2016 and December 31, ~~2014,~~2015, respectively, the Company had accrued ~~$48.2~~$38.4 million and ~~$50.3~~$48.4 million of pension liability within “Other ~~Long-Term Liabilities”~~long-term liabilities” on the Condensed Consolidated Balance Sheets.

In February 2016, as a result of an amendment to the Essendant Pension Plan, the Company announced a limited-time voluntary lump-sum pension offering to eligible, terminated, vested plan participants. The lump-sum settlement payments will be made on May 16, 2016, using assets from the Essendant Pension Plan.

The Company has defined contribution plans covering certain salaried associates and non-union hourly paid associates (the “Plan”). The Plan permits associates to defer a portion of their pre-tax and after-tax salary as contributions to the Plan. The Plan also provides for Company-funded discretionary contributions as well as matching associates’ salary deferral contributions, at the discretion of the Board of Directors. The Company recorded expense of $1.8 million and $1.4 million, respectively, for the Company match of employee contributions to the Plan for the ~~three months~~three-month periods ended March 31, ~~2015~~2016 and ~~2014.~~2015.

~~Interest rate movements create a degree~~The Company selectively uses derivative financial instruments to reduce its exposure to changes in interest rates and foreign currency exchange rates. Under Company policy, the Company does not enter into derivative financial instruments for trading or speculative purposes. A description of ~~risk to~~each type of derivative utilized by the ~~Company’s operations by affecting the amount of interest payments. Interest rate swap agreements are used~~Company to manage risk is included in the ~~Company’s exposure to interest rate changes.~~ following paragraphs.

The Company ~~designates its floating-to-fixed~~selectively uses interest rate swaps ~~as cash flow hedges of~~to reduce market risk associated with changes in interest rates for its debt arrangements. In July 2012, the ~~variability of future cash flows at the inception of the swap contract to support hedge accounting.~~

~~USSC has~~Company entered into ~~various separate swap transactions to mitigate USSC’s floating rate risk on the noted aggregate notional amount of LIBOR-based~~ an interest rate ~~risk noted in the table below. These~~ swap ~~transactions occurred as follows:~~

~~As of March 31, 2015, approximately 21.9% ($150.0 million) of the Company’s current outstanding debt had its interest payments designated as hedged forecasted transactions.~~

The Company’s outstanding swap transaction is accounted for as a cash flow hedge and is recorded at fair value on the Condensed Consolidated Balance Sheet as of March 31, 2015 and December 31, 2014, at the following amounts (in thousands):

~~Under the terms of the July 2012 Swap Transaction, USSC will be required~~ to make monthly fixed rate payments to the counterparty calculated based on the notional amounts noted in the table above at a fixed rate also noted in the table above, while the counterparty will be obligated to make monthly floating rate payments to USSC based on the one-month LIBOR on the same referenced notional amount.

The hedged transactions described above qualify as cash flow hedges in accordance with accounting guidance on derivative instruments. This guidance requires companies to recognize all of their derivative instruments as either assets or liabilities in the statement of financial position at fair value. The Company does not offset fair value amounts recognized for interest rate swaps executed with the same counterparty.

For derivative instruments that are designated and qualify as a cash flow hedge, the effective portion of the gain or loss on the derivative instrument is reported as a component of other comprehensive income and reclassified into earnings in the same line item associated with the forecasted transaction in the same period or periods during which the hedged transaction affects earnings.

~~The July 2012 Swap Transaction effectively converts~~convert a portion of the Company’s ~~future~~ floating-rate debt to a fixed-rate basis. The fair value is determined by using quoted market forward rates (level 2 inputs) and reflects the present value of the amount that the Company would pay for contracts involving the same notional amount and maturity date. The changes in fair value of this instrument is reported in AOCI and reclassified into earnings in interest expense in the same periods during which the related interest payments on the hedged debt affect earnings. This swap ~~transaction reduces~~matures in July 2017.As of March 31, 2016 and December 31, 2015, the ~~impact~~fair value of ~~interest rate changes on future interest expense. By using such derivative financial instruments,~~ the ~~Company exposes itself to credit risk and market risk. Credit risk is the risk that the counterparty to the~~Company's interest rate swap ~~(as noted above) will fail to perform under~~included in the terms of the agreement. The Company attempts to minimize the credit risk in these agreements by only entering into transactions with counterparties the Company determines are creditworthy. The market risk is the adverse effect on the value of a derivative financial instrument that results from a change in interest rates.

~~The~~ Company’s agreement with its derivative counterparty provides that if an event of default occurs on any Company debt of $25 million or more, the counterparty can terminate the swap agreement. If an event of default had occurred and the counterparty had

exercised early termination right under the outstanding swap transaction as of March 31, 2015, the Company would have been required to pay the aggregate fair value net liability of $1.0 million plus accrued interest to the counterparty.

The swap transaction that was in effect as of March 31, 2015 and the swap transaction that was in effect as of March 31, 2014 contained no ineffectiveness; therefore, all gains or losses on those derivative instruments were reportedCondensed Consolidated Balance Sheet as a component of ~~other comprehensive income (“OCI”)~~“Other long-term liabilities” was $0.9 million and $0.5 million respectively.

The Company maintains a foreign currency cash flow hedge program in order to manage the volatility in exchange rates and the related impacts on the operations of its Canadian functional currency subsidiaries. The Company uses foreign currency exchange contracts to hedge certain of its foreign exchange rate exposures related to inventory purchases. The Company has currently hedged approximately 50%, or $8.1 million, of its Canadian subsidiaries’ US dollar denominated inventory purchases for the next two quarters. The fair value of the foreign currency cash flow hedge is determined by using quoted market spot rates (level 2 inputs). The changes in fair value of ASC 815 designated hedges are reported in AOCI and reclassified into earnings ~~as “interest expense”~~in cost of goods sold in the same ~~period or~~ periods during which ~~they affected~~the related inventory is sold and affects earnings.As of March 31, 2016, the fair value of these cash flow hedges were included in the Company’s Condensed Consolidated Balance Sheet as a component of “Accrued liabilities” totaling $0.3 million. As of December 31, 2015, the fair value of these cash flow hedges were included in the Company’s Condensed Consolidated Balance Sheet as a component of “Other current assets” totaling $0.1 million.

The following table depicts the effect of these derivative instruments on the statements of income and comprehensive income for the ~~three~~three-month periods ended March 31, ~~2015~~2016 and ~~March 31, 2014~~2015 (in thousands).

Amount of Gain (Loss)
Recognized in
OCI on Derivative
(Effective Portion)

Amount of Gain (Loss)
Reclassified
from Accumulated OCI into Income
(Effective Portion)

For the Three
Months Ended
March 31,
2015

For the Three
Months Ended
March 31,
2014

Location of Gain (Loss)
Reclassified from
Accumulated OCI into
Income (Effective
Portion)

For the Three
Months Ended
March 31,
2015

For the Three
Months Ended
March 31,
2014

July 2012 Swap Transaction
$
(124
)

$
(159
)

Interest expense, net

$
331

$
-

	Amount of Gain (Loss) Recognized in OCI on Derivative (Effective Portion)							Amount of Gain (Loss) Reclassified from AOCI into Income (Effective Portion)
Derivatives in ASC 815 Cash Flow Hedging Relationships	For the Three Months Ended March 31, 2016			For the Three Months Ended March 31, 2015			Location of Gain (Loss) Reclassified from AOCI into Income (Effective Portion)	For the Three Months Ended March 31, 2016		For the Three Months Ended March 31, 2015
Interest Rate Swap	$	(121	)	$	(124	)	Interest expense, net	$	242	$	331
Foreign Exchange Hedges		(195	)		-		Cost of goods sold		89		-

The Company measures certain financial assets and liabilities, including interest rate swap and foreign currency derivatives, at fair value on a recurring basis, ~~including interest rate swap derivatives,~~ based on ~~the mark-to-market position~~market rates of the Company’s positions and other observable interest rates (see Note 10 “Derivative Financial Instruments”, for more information on these interest rate ~~swaps)~~swaps and foreign currency derivatives).

Accounting guidance on fair value establishes a hierarchy for those instruments measured at fair value which distinguishes between assumptions based on market data (observable inputs) and the Company’s own assumptions (unobservable inputs). The hierarchy consists of three levels:

Determining which level to apply to an asset or liability requires significant judgment. The Company evaluates its hierarchy disclosures each quarter. The following table summarizes the financial instruments measured at fair value in the accompanying Condensed Consolidated Balance Sheets as of March 31, ~~2015~~2016 and December 31, ~~2014~~2015 (in thousands):

Fair Value Measurements as of March 31, 2015

Quoted Market
Prices in Active
Markets for
Identical Assets or
Liabilities

Significant Other
Observable
Inputs

Significant
Unobservable
Inputs

Total

Level 1

Level 2

Level 3

Liabilities

Interest rate swap liability

982

-

982

-

Total
$
982

$
-

$
982

$
-

Fair Value Measurements as of December 31, 2014

Quoted Market
Prices in Active
Markets for
Identical Assets or
Liabilities

Significant Other
Observable
Inputs

Significant
Unobservable
Inputs

Total

Level 1

Level 2

Level 3

Liabilities

Interest rate swap liability

253

-

253

-

Total
$
253

$
-

$
253

$
-

	Fair Value Measurements as of March 31, 2016
			Quoted Market Prices in Active Markets for Identical Assets or Liabilities		Significant Other Observable Inputs		Significant Unobservable Inputs
	Total		Level 1		Level 2		Level 3
Liabilities
Interest rate swap	$	832	$	-	$	832	$	-
Foreign exchange hedges	$	288	$	-	$	288	$	-


	Fair Value Measurements as of December 31, 2015
			Quoted Market Prices in Active Markets for Identical Assets or Liabilities		Significant Other Observable Inputs		Significant Unobservable Inputs
	Total		Level 1		Level 2		Level 3
Assets
Foreign exchange hedges	$	91	$	-	$	91	$	-

Liabilities
Interest rate swap	$	469	$	-	$	469	$	-

The carrying amount of accounts receivable at March 31, ~~2015,~~2016, including ~~$380.7~~$524.1 million of receivables sold under the Receivables Securitization Program, approximates fair value because of the short-term nature of this item.

As of March 31, 2015, the held for sale assets and liabilities detailed in Note 2 “Acquisitions and Dispositions” and the values of the impaired trademark assets detailed in Note 5 “Goodwill and Intangible Assets” were measured at fair value on a nonrecurring basis. No ~~other~~ assets or liabilities ~~are~~were measured at fair value on a nonrecurring basis.

~~The Company had receivables~~Receivables related to supplier allowances totaling ~~$76.9~~$92.1 million and ~~$124.4~~$111.0 million were included in “Accounts receivable” in the Condensed Consolidated Balance Sheets as of March 31, ~~2015~~2016 and December 31, ~~2014,~~2015, respectively.

Accrued customer rebates of ~~$45.7~~$47.2 million and ~~$63.2~~$63.6 million as of March 31, ~~2015~~2016 and December 31, ~~2014,~~2015, respectively, were included in “Accrued liabilities” in the Condensed Consolidated Balance Sheets.

The Company's tax provision for interim periods is determined using an estimate of its annual effective tax rate, adjusted for discrete items.

For the three months ended March 31, 2016, the Company recorded income tax expense of $10.0 million on pre-tax income of $26.5 million, for an effective tax rate of 37.6%. For the three months ended March 31, 2015, the Company recorded income tax expense of ~~$5.2~~$4.0 million on pre-tax ~~income~~loss of ~~$1.2~~$2.0 million, for an effective tax rate of ~~422.2%~~(196.6)%.

The Company’s U.S. statutory rate is 35.0%. ~~For~~There were no significant discrete items impacting the effective tax rate for the three months ended March 31, ~~2014, the Company recorded income tax expense of $13.0 million on pre-tax income of $34.9 million, for an effective tax rate of 37.3%.~~

~~The Company's U.S. statutory rate is 35.0%.~~2016. The most significant factor impacting the effective tax rate for the three months ended March 31, 2015 ~~were~~was the discrete ~~tax impacts~~impact of the impairment charges for financial reporting purposes related to placing a non-strategic business for sale in the quarter. ~~There were no significant discrete items~~

The Company has been named as a defendant in two lawsuits alleging that the Company sent unsolicited fax advertisements to the named plaintiffs, as well as other persons and entities, in violation of the Telephone Consumer Protection Act of 1991, as amended by the Junk Fax Prevention Act of 2005 ("TCPA"). One lawsuit was initially filed in the United States District Court for the ~~three months ended March 31, 2014.~~Central District of California on May 1, 2015 and has been refiled in an Illinois state court, subject to a motion to dismiss the California case without prejudice. The other lawsuit was filed in the United States District Court for the Northern District of Illinois on January 14, 2016. In both lawsuits the plaintiffs filed a motion asking the Court to certify a class of plaintiffs comprised of persons and entities who allegedly received fax advertisements from the Company. Under the TCPA, recipients of unsolicited fax advertisements can seek damages of $500 per fax for inadvertent violations and up to $1,500 per fax for knowing and willful violations. Other reported TCPA lawsuits have resulted in a broad range of outcomes, with each case being dependent on its own unique set of facts and circumstances. In each lawsuit, the Company is vigorously contesting class certification and denies that any violations occurred. Litigation of this kind, however, is likely to lead to settlement negotiations, including negotiations prompted by pre-trial civil court procedures. Regardless of whether the lawsuits are resolved at trial or through settlement, the Company believes that a loss associated with resolution of pending claims is probable. However, the amount of any such loss, which could be material, cannot be reasonably estimated because the Company is continuing to evaluate its defenses based on its internal review and investigation of prior events, new information and future circumstances.

The Company is also involved in other legal proceedings arising in the ordinary course of or incidental to its business. The Company has established reserves, which are not material, for potential losses that are probable and reasonably estimable that may result from those proceedings. In many cases, however, it is difficult to determine whether a loss is probable or even possible or to estimate the amount or range of potential loss, particularly where proceedings may be in relatively early stages or where plaintiffs are seeking substantial or indeterminate damages. Matters frequently need to be more developed before a loss or range of loss can reasonably be estimated. The Company believes that such ordinary course legal proceedings will be resolved with no material adverse effect upon its financial condition or results of operations.

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Exchange Act. Forward-looking statements often contain words such as “expects,” “anticipates,” “estimates,” “intends,” “plans,” “believes,” “seeks,” “will,” “is likely,” “scheduled,” “positioned to,” “continue,” “forecast,” “predicting,” “projection,” “potential” or similar expressions. Forward-looking statements include references to goals, plans, strategies, objectives, projected costs or savings, anticipated future performance, results or events and other statements that are not strictly historical in nature. These forward-looking statements are based on management’s current expectations, forecasts and assumptions. This means they involve a number of risks and uncertainties that could cause actual results to differ materially from those expressed or implied here. These risks and uncertainties include, without limitation, those set forth in “Item 1A. Risk Factors” in the Company’s Annual Report on Form 10-K for the year-ended December 31, ~~2014.~~2015.

Readers should not place undue reliance on forward-looking statements contained in this Quarterly Report on Form 10-Q. The forward-looking information herein is given as of this date only, and the Company undertakes no obligation to revise or update it.

~~United~~Essendant Inc. is a leading supplier of workplace essentials, with ~~2014~~2015 net sales of approximately ~~$5.3~~$5.4 billion. ~~United~~Essendant Inc. stocks over ~~160,000~~180,000 items ~~from over 1,600 manufacturers.~~and is a leading national wholesale distributor of workplace items including traditional office products and office furniture, janitorial, sanitation and breakroom supplies, technology products, industrial supplies, and automotive aftermarket tools and equipment. These items include a broad spectrum of manufacturer-branded and private branded ~~technology products, traditional office products, office furniture, janitorial and breakroom supplies, and industrial supplies. United~~products. Essendant sells ~~its products~~ through a network of 7774 distribution centers to ~~its~~ approximately 30,000 reseller customers, who in turn sell directly to ~~end-consumers.~~end consumers. The Company’s customers include independent office products dealers; contract stationers; office products superstores; computer products resellers; office furniture dealers; mass merchandisers; mail order companies; sanitary supply, paper and foodservice distributors; drug and grocery store chains; healthcare distributors; e-commerce merchants; oil field, welding supply and industrial/MRO distributors; automotive aftermarket dealers and wholesalers; and other independent distributors. Additionally, United’s subsidiary,Company also operates CPO Commerce ~~LLC (“CPO”), is an e-retailer of brand name power~~which sells tools and do-it-yourself equipment ~~that sells directly~~online to ~~end consumers.~~the consumer market.

~~1) Strengthen our core office, janitorial, and breakroom business with a common operating and IT platform, an aligned customer care and sales team, and advanced digital services;~~

~~2) Win online by growing our business-to-business (B2B) sales with major e-commerce players, and by enabling~~Essendant will focus on the ~~online success of our resellers by providing digital capabilities and tools to support them; and~~following five key objectives over the next two years:

~~3) Expand and diversify our business into higher growth and higher margin channels and categories.~~

Execution on these priorities will help us achieve our goal of becoming the fastest and most convenient solution for workplace essentials.

The following is a summary of selected trends, events or uncertainties that the Company believes may have a significant impact on its future performance.

~~As previously announced, we are taking decisive actions to reposition our business, provide enhanced customer service, and generate sustained long-term success. These actions are as follows:~~

The Company reaffirms its previously announced outlook regarding 2016, and currently expects the following:

The guidance above excludes the impact of assets acquired in the proposed Staples transaction, any new acquisitions and any unusual charges, such as impacts from our pension lump-sum offer described in Note 9.

For a further discussion of selected trends, events or uncertainties the Company believes may have a significant impact on its future performance, readers should refer to “Key Trends and Recent Results” under Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report on Form 10-K for the year-ended December 31, ~~2014.~~2015.

~~During~~In the first ~~three months~~quarter of ~~2015,~~2016, there were no significant changes to the Company’s critical accounting policies, judgments or estimates from those disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2014.~~2015

Adjusted Operating Expenses, Adjusted Operating Income, Adjusted EBITDA, Adjusted Net Income and Adjusted Earnings Per Share

The following table presents Adjusted Operating Expenses, Adjusted Operating Income, Adjusted Net Income, and Adjusted Diluted Earnings Per Share for the three-month periods ended March 31, ~~2015~~2016 and ~~2014~~2015 (in thousands, except per share data), excluding the effects of the ~~$6.4 million~~ pre-tax ~~charge~~charges related to workforce reduction and facility consolidations in the first three months of 2016, and workforce reductions and facility consolidations, ~~$10.5 million pre-tax~~ intangible asset impairment charge and accelerated amortization related to rebranding ~~efforts,~~ and ~~$13.6 million pre-tax~~asset held for sale impairment ~~charge related to the held-for-sale classification of our Mexican subsidiary~~ in the first ~~quarter~~three months of 2015. Generally Accepted Accounting Principles require that the effects of these items be included in the Condensed Consolidated Statements of Income. Management believes that excluding these items is an appropriate comparison of its ongoing operating results and to the results of last year. It is helpful to provide readers of its financial statements with a reconciliation of these items to its Condensed Consolidated Statements of Income reported in accordance with Generally Accepted Accounting Principles.

	For the Three Months Ended March 31,											For the Three Months Ended March 31,
	2015						2014					2016			2015 (Revised)
				% to					% to
	Amount			Net Sales			Amount		Net Sales
Net Sales	$	1,332,375			100.0	%	$	1,254,139		100.0	%
Gross profit	$	204,450			15.3	%	$	187,083		14.9	%
Operating expenses	$	198,372			14.9	%	$	148,849		11.9	%	$	167,678		$	197,581
Workforce reduction and facility consolidation charge		(6,433	)		(0.5	%)		-		-
Rebranding - intangible asset impairment and amortization		(10,462	)		(0.8	%)		-		-
Workforce reduction and facility closure charge													(254	)		(6,433	)
Intangible asset impairment charge and accelerated amortization related to rebranding													-			(10,462	)
Asset held for sale impairment		(13,566	)		(1.0	%)		-		-			-			(13,566	)
Adjusted operating expenses	$	167,911			12.6	%	$	148,849		11.9	%	$	167,424		$	167,120

Operating income	$	6,078			0.5	%	$	38,234		3.0	%	$	32,404		$	2,814
Operating expense items noted above		30,461			2.3	%		-		-			254			30,461
Adjusted operating income	$	36,539			2.7	%	$	38,234		3.0	%	$	32,658		$	33,275
Net (loss) income	$	(3,992	)				$	21,857
Depreciation and amortization												$	10,489		$	10,711
Equity compensation													2,911			2,640
Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA)												$	46,058		$	46,626

Net income (loss)												$	16,530		$	(6,007	)
Operating expense items noted above, net of tax		23,896						-					155			23,896
Adjusted net income	$	19,904					$	21,857				$	16,685		$	17,889
Diluted (loss) earnings per share	$	(0.10	)				$	0.55

Diluted net income (loss) per share⁽¹⁾												$	0.45		$	(0.16	)
Per share operating expense items noted above		0.62						-					0.00			0.62
Adjusted diluted earnings per share	$	0.52					$	0.55
Adjusted diluted earnings per share - change over the prior year period		(5.5	%)
Weighted average number of common shares - diluted		38,534						39,655
Adjusted diluted net income per share												$	0.45		$	0.46

Results of Operations—Three Months Ended March 31, ~~2015~~2016 Compared with the Three Months Ended March 31, ~~2014~~2015

Net Sales. Net sales for the first quarter of ~~2015~~2016 were ~~$1.33~~$1.35 billion. The following table summarizes net sales by product category for the three-month periods ended March 31, ~~2015~~2016 and ~~2014~~2015 (in thousands):

	Three Months Ended March 31,				Three Months Ended March 31,
	2015		2014⁽¹⁾		2016		2015⁽¹⁾
Janitorial and breakroom supplies	$	357,721	$	330,261
Janitorial and breakroom supplies (JanSan)					$	362,387	$	358,677
Technology products		353,016		354,716		351,113		353,047
Traditional office products (including cut-sheet paper)		296,221		323,943		308,055		296,177
Industrial supplies		210,258		133,779		139,764		149,074
Automotive						79,408		60,240
Office furniture		78,053		74,948		74,158		78,053
Freight revenue		31,959		29,180		33,201		31,959
Services, Advertising and Other		5,147		7,312		4,210		5,148
Total net sales	$	1,332,375	$	1,254,139	$	1,352,296	$	1,332,375

~~Sales~~Net sales in the janitorial and breakroom supplies (JanSan) product category increased ~~8.3%~~1.0% in the first quarter of ~~2015~~2016 compared to the first quarter of ~~2014.~~2015. This category accounted for 26.8% of the Company’s first quarter ~~2015~~2016 consolidated net sales. ~~Sales~~Net sales increased due to new e-tail growth, partially offset by a decline in ~~this category was driven by~~ sales ~~growth across all channels. Sales also increased approximately 3.0% from being named~~to the ~~primary supplier for Office Depot’s janitorial business.~~independent dealer channel.

~~Sales~~Net sales in the technology products category (primarily ink and toner) decreased 0.5% from the first quarter of ~~2014.~~2015. This category accounted for ~~26.5%~~26.0% of net sales for the first quarter of ~~2015. This decline is attributable to reduced demand in our independent channel, the loss of business with a large national customer, and lower sales at~~2016. Excluding our Mexican ~~subsidiary. These were partially offset~~subsidiary, which was sold in the third quarter of 2015, net sales in this category increased 4.8% compared to the prior year quarter, which was driven by ~~growth in our e-tail dealers, purchases by certain large customers during the quarter, and the addition of~~sales to new ~~business.~~customers.

~~Sales~~Net sales of traditional office products ~~decreased~~increased in the first quarter of ~~2015~~2016 by ~~8.6%~~4.0% versus the first quarter of ~~2014.~~2015. Traditional office supplies represented ~~22.2%~~22.8% of the Company’s consolidated net sales for the first quarter of ~~2015. This decline~~2016. The sales increase was driven by ~~a $26.6 million decline~~increases in cut-sheet paper sales ~~as we exit low margin business~~ and losing the first-call supplier status with Office Depot. We continue to estimate this impact, net of incremental sales in janitorial products, to be a $0.14 to $0.22 reduction in earnings per share in 2015. This was partially offset by continued double-digit growth in e-tailers, a rebound inhigher government ~~spending, and growth with certain larger customers.~~spending.

Industrial supplies net sales in the first quarter of ~~2015 increased~~2016 decreased by ~~57.2%~~6.2% compared to the same prior-year period. ~~Sales~~Net sales of industrial supplies accounted for ~~15.8%~~10.3% of the Company’s net sales for the first quarter of 2015 and reflected solid sales momentum from our acquisitions, which contributed $90.2 million in incremental sales and positively impacted earnings per share. Without the acquisitions, industrial sales declined 10.2% over the prior-year quarter. Approximately 25% of our core industrial business is exposed to oilfield and other energy sector resellers which have been impacted by the2016. The decline in ~~oil prices resulting~~industrial supplies net sales was primarily due to challenges in ~~sales declines~~the oilfield sector and macro-economic environment. This decline was partially offset by growth in ~~our general industrial and oilfield channels. We expect this impact to continue throughout the year.~~retail channel sales.

~~Office furniture~~Automotive net sales in the first quarter of ~~2015~~2016 increased ~~4.1%~~31.8% compared to the first quarter of ~~2014. Office furniture accounted for~~2015. Automotive net sales represented 5.9% of the Company’s first quarter of ~~2015~~2016 net sales. This increase was primarily due to the acquisition of Nestor which contributed $16.9 million in net sales.

Office furniture net sales in the first quarter of 2016 decreased 5.0% compared to the first quarter of 2015. Office furniture accounted for 5.5% of the Company’s first quarter of 2016 consolidated net sales. ~~Within this category we saw continued increased~~This decline was due to declines in sales toin national accounts and independent ~~resellers, e-commerce customers, and certain larger customers which more than offset lost sales to a large national customer.~~dealer channels.

The remainder of the Company’s first quarter ~~2015~~2016 net sales was composed of freight and other revenues.

Gross Profit and Gross Margin Rate. Gross profit for the first quarter of ~~2015~~2016 was ~~$204.4~~$200.1 million, compared to ~~$187.1~~$200.4 million in the first quarter of ~~2014.~~2015. The gross margin rate of ~~15.3%~~14.8% was ~~up 40~~down 20 basis points (bps) from the prior-year quarter gross margin rate of ~~14.9%~~15.0%. Our ~~acquisitions added 40 basis points to our~~ gross margin ~~rate in the quarter. Excluding the impact of our acquisitions, our gross margin rate~~ was ~~flat to the prior year as product margins improved (31 bps) from higher purchase-related allowances offset partially~~impacted by ~~a shift in the customer and product mix. Higher LIFO expense (20~~lower inflation (22 bps) and higher ~~inventory related reserves (11~~freight (22 bps) ~~in the quarter~~, partially offset ~~the product margin increase.~~by increased sales.

Operating Expenses. Operating expenses for the first quarter of 2016 were ~~$198.4~~$167.7 million or ~~14.9%~~12.4% of net sales, compared to $197.6 million in the prior year, including $30.5 million related to ~~repositioning actions.~~the first quarter of 2015 Repositioning Actions. Adjusted operating expenses were ~~$167.9~~$167.4 million or ~~12.6%~~12.4% of net sales compared with ~~$148.8~~$167.1 million or ~~11.9%~~12.5% of net sales in the same period last year. The ~~$19.1~~$0.3 million increase was driven by ~~$17.5 million from acquisitions and $1.6 million from operating investments.~~incremental costs related to the common platform project (22 bps).

Interest Expense, net. Interest expense, net for the first quarter of ~~2015~~2016 was ~~$4.8~~$5.9 million compared to ~~$3.4~~$4.8 million in the first quarter of ~~2014.~~2015. This was driven by higher debt outstanding related to ~~the acquisition of MEDCO~~our acquisitions in the ~~fourth quarter of 2014.~~past year. Interest expense is expected to be higher in ~~2015~~2016 than in the prior year.

Income Taxes. Income tax expense was ~~$5.2~~$10.0 million for the first quarter of ~~2015,~~2016, compared with ~~$13.0~~$4.0 million for the same period in ~~2014.~~2015. The Company’s effective tax rate was ~~422.2%~~37.6% for the current-year quarter and ~~37.3%~~(196.6)% for the same period in ~~2014. The current quarter tax rate was impacted~~2015, driven by unfavorable discrete tax impacts of placing a non-strategic business for sale in the ~~quarter.~~first quarter of 2015.

Net ~~Income.~~Income (Loss). ~~The net loss~~Net income for the first quarter of ~~2015~~2016 totaled ~~$4.0~~$16.5 million or ~~$0.10~~$0.45 per diluted share, ~~including~~compared to $(6.0) million in the prior year, which included $23.9 million after-tax, or $0.62 per diluted share, of costs related to ~~repositioning actions.~~the first quarter charges. Adjusted net income was ~~$19.9~~$16.7 million, or ~~$0.52~~$0.45 per diluted share, compared with adjusted net income of ~~$21.9~~$17.9 million or ~~$0.55~~$0.46 per diluted share for the same three-month period in ~~2014.~~2015.

In February 2016, as a result of plan amendment, the Company announced a limited-time voluntary lump-sum pension offering to eligible, terminated, vested plan participants of the Essendant Pension Plan. The Company estimates approximately 1,400 plan participants took this offering during the election period which terminated on April 12, 2016. The lump-sum settlement payments will be made on May 16, 2016, using assets from the Essendant Pension Plan. The settlement payments will result in a remeasurement of the Essendant Pension Plan’s assets and obligations in the second quarter of 2016. The remeasurement will result in a non-cash settlement charge in the second quarter of 2016 and will reduce net income and retained earnings, with a partial offset to accumulated other comprehensive income in shareholders’ equity. The amount of the remeasurement will depend on a variety of factors, including plan assets values and discount rates at the date of valuation.

The following discussion focuses on information included in the accompanying Condensed Consolidated Statements of Cash Flows.

Net cash ~~provided by~~used in operating activities for the three months ended March 31, ~~2015~~2016 totaled ~~$62.7~~$10.8 million, compared with ~~$1.5~~$62.7 million cash provided by operating activities in the ~~same three-month period of 2014.~~three months ended March 31, 2015. The ~~increase~~$73.5 million decrease over the prior year was primarily driven by ~~declines~~a $24.8 million increase in accounts receivable ~~and~~in the current year versus a ~~lower decline~~$26.2 million decrease in accounts ~~payable and accrued liabilities, as we proactively manage cash flow.~~receivable in the prior year. Also, inventory decreased $28.0 million in the first quarter of 2016, compared with a decrease of $46.0 million in the prior year quarter.

Net cash used in investing activities for the first three months of ~~2015~~2016 was ~~$5.5~~$9.6 million, compared with ~~$5.9~~$5.5 million for the three months ended March 31, ~~2014. For the full year 2015, the Company expects capital spending to be approximately $30.0 million to $35.0 million.~~2015.

Net cash ~~used in~~provided by financing activities for the three months ended March 31, ~~2015~~2016 totaled ~~$51.7~~$25.6 million, compared with ~~$9.0~~$51.7 million ~~provided by~~cash used in financing activities in the prior-year period. Net cash ~~used in~~provided by financing activities during the first three months of ~~2015~~2016 was impacted by ~~$29.6~~$37.0 million in net ~~repayments~~borrowing under ~~debt arrangements, $16.0~~our revolving credit facility, $6.8 million in share repurchases and ~~$5.4~~$5.2 million in payments of cash dividends.

On February 10, 2016, the Board of Directors approved a dividend of $0.14 which was paid on April 15, 2016 to shareholders of record as of March 15, 2016.

In the first quarter of 2016, the Company had a Leverage Ratio, as defined in its 2013 Credit Agreement, 2013 Note Purchase Agreement and the Amended and Restated Transfer and Administration Agreement, that exceeds the 3.00 to 1.00 maximum per the agreements and, therefore, is currently limited in its ability to repurchase its stock.

~~United’s~~Essendant’s growth has historically been funded by a combination of cash provided by operating activities and debt financing. We believe that our cash from operations and collections of receivables, coupled with our sources of borrowings and available cash on hand, are sufficient to fund currently anticipated requirements. These requirements include payments of interest and dividends, scheduled debt repayments, capital expenditures, working capital needs, restructuring activities, the funding of pension plans, and funding for additional share repurchases and acquisitions, if any. Due to our credit profile over the years, external funds have been available at an acceptable cost. We believe that current credit arrangements are sound and that the strength of our balance sheet affords us the financial flexibility to respond to both internal growth opportunities and those available through acquisitions.

Financing available from debt and the sale of accounts receivable as of March 31, ~~2015,~~2016, is summarized below (in millions):

Maximum financing available under:
2013 Credit Agreement	$	700.0			$	700.0
2013 Note Purchase Agreement		150.0				150.0
Receivables Securitization Program ⁽¹⁾		200.0				200.0
Maximum financing available			$	1,050.0			$	1,050.0
Amounts utilized:
2013 Credit Agreement		334.2				405.8
2013 Note Purchase Agreement		150.0				150.0
Receivables Securitization Program ⁽¹⁾		200.0				200.0
Outstanding letters of credit		11.1				11.6
Total financing utilized				695.3				767.4
Available financing, before restrictions				354.7				282.6
Restrictive covenant limitation				-				94.3
Available financing as of March 31, 2015			$	354.7
Available financing as of March 31, 2016							$	188.3

The Company’s ~~outstanding debt~~total capitalization consisted of the following amounts (in millions):

	As of			As of			As of			As of
	March 31,			December 31,			March 31,			December 31,
	2015			2014			2016			2015
2013 Credit Agreement	$	334.2		$	363.0		$	405.8		$	368.4
2013 Note Purchase Agreement		150.0			150.0			150.0			150.0
Receivables Securitization Program		200.0			200.0			200.0			200.0
Mortgage & Capital Lease		0.1			0.9			0.1			-
Debt		684.3			713.9			755.9			718.4
Stockholders’ equity		828.4			856.1			734.5			723.7
Total capitalization	$	1,512.7		$	1,570.0		$	1,490.4		$	1,442.1

Debt-to-total capitalization ratio		45.2	%		45.5	%		50.7	%		49.8	%

We believe that our operating cash flow and financing capacity, as described, provide adequate liquidity for operating the business for the foreseeable future. Refer to Note 8, “Debt”, for further descriptions of the provisions of our financing facilities as well as Note 911 “Debt” in our Annual Report on Form 10-K for the year-ended December 31, ~~2014.~~

~~During the three-month period ended March 31, 2015, contractual obligations have not materially changed from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2014.~~2015.

The Company is subject to market risk associated principally with changes in interest rates and foreign currency exchange rates. There were no material changes to the Company’s exposures to market risk during the first three months of ~~2015~~2016 from those disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2014.~~2015.

We maintain disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934. Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Based upon this evaluation, the principal executive officer and the principal financial officer concluded that our disclosure controls and procedures are effective in providing reasonable assurance that material information required to be disclosed in our reports filed with or submitted to the Securities and Exchange Commission under the Securities Exchange Act is made known to management, including the principal executive officer and the principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

During the fiscal quarter ended March 31, ~~2015,~~2016, there have been no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

The Company has been named as a defendant in two lawsuits alleging that the Company sent unsolicited fax advertisements to the named plaintiffs, as well as other persons and entities, in violation of the Telephone Consumer Protection Act of 1991, as amended by the Junk Fax Prevention Act of 2005 ("TCPA"). One lawsuit was initially filed in the United States District Court for the Central District of California on May 1, 2015 and has been refiled in an Illinois state court, subject to a motion to dismiss the California case without prejudice. The other lawsuit was filed in the United States District Court for the Northern District of Illinois on January 14, 2016. In both lawsuits the plaintiffs filed a motion asking the Court to certify a class of plaintiffs comprised of persons and entities who allegedly received fax advertisements from the Company. Under the TCPA, recipients of unsolicited fax advertisements can seek damages of $500 per fax for inadvertent violations and up to $1,500 per fax for knowing and willful violations. Other reported TCPA lawsuits have resulted in a broad range of outcomes, with each case being dependent on its own unique set of facts and circumstances. In each lawsuit, the Company is vigorously contesting class certification and denies that any violations occurred. Litigation of this kind, however, is likely to lead to settlement negotiations, including negotiations prompted by pre-trial civil court procedures. Regardless of whether the lawsuits are resolved at trial or through settlement, the Company believes that a loss associated with resolution of pending claims is probable. However, the amount of any such loss, which could be material, cannot be reasonably estimated because the Company is continuing to evaluate its defenses based on its internal review and investigation of prior events, new information and future circumstances.

The Company is also involved in other legal proceedings arising in the ordinary course of or incidental to its business. The Company has established reserves, which are not material, for potential losses that are probable and reasonably estimable that may result from those proceedings. In many cases, however, it is difficult to determine whether a loss is probable or even possible or to estimate the amount or range of potential loss, particularly where proceedings may be in relatively early stages or where plaintiffs are seeking substantial or indeterminate damages. Matters frequently need to be more developed before a loss or range of loss can reasonably be estimated. The Company believes that ~~pending~~such ordinary course legal proceedings will be resolved with no material adverse effect upon its financial condition or results of operations.

For information regarding risk factors, see “Risk Factors” in Item 1A of Part I of the Company’s Form 10-K for the year ended December 31, ~~2014.~~2015. There have been no material changes to the risk factors described in such Form 10-K.

During the three-month periods ended March 31, ~~2015~~2016 and ~~2014,~~2015, the Company repurchased ~~402,679~~241,270 and ~~331,369~~402,679 shares of ~~USI’s~~ common stock at an aggregate cost of $6.8 million and $16.3 million, ~~and $13.7 million,~~ respectively. ~~On February 11, 2015, the Board of Directors authorized the Company to purchase an additional $100.0 million of common stock.~~ The Company ~~repurchased 0.5 million~~did not repurchase any additional shares ~~for $18.7 million year-to-date~~ through April ~~20, 2015.~~18, 2016. As of that date, the Company had approximately ~~$123.7~~$68.2 million remaining of existing share repurchase authorization from the Board of Directors.

2015 Fiscal Month

Total Number
of Shares
Purchased

Average Price
Paid per Share

Total Number of
Shares Purchased as
Part of a Publicly
Announced Program

Approximate Dollar
Value of Shares that
May Yet Be
Purchased Under
the Program

January 1, 2015 to January 31, 2015

104,115

$
40.44

104,115

$
38,235,430

February 1, 2015 to February 28, 2015

88,454

41.63

88,454

134,552,953

March 1, 2015 to March 31, 2015

210,110

39.79

210,110

126,192,695

Total First Quarter

402,679

$
40.62

402,679

$
126,192,695

2016 Fiscal Month	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of a Publicly Announced Program		Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program
January 1, 2016 to January 31, 2016		-	$	-		-	$	75,000,020
February 1, 2016 to February 29, 2016		178,278		27.80		178,278		70,044,065
March 1, 2016 to March 31, 2016		62,992		29.90		62,992		68,160,702
Total Third Quarter		241,270	$	28.85		241,270	$	68,160,702

This Quarterly Report on Form 10-Q includes as exhibits certain documents that the Company has previously filed with the SEC. Such previously filed documents are incorporated herein by reference from the respective filings indicated in parentheses at the end of the exhibit descriptions (all made under the Company’s file number of 0-10653). Each of the management contracts and compensatory plans or arrangements included below as an exhibit is identified as such by a double asterisk at the end of the related exhibit description.

Exhibit No.		Description
3.1		~~Second~~Third Restated Certificate of Incorporation of Essendant Inc. (“ESND” or the ~~Company,~~“Company”), dated as of ~~March 19, 2002~~June 1, 2015 (Exhibit 3.1 to the ~~Company’s Annual Report on~~ Form ~~10-K for the year ended December 31, 2013,~~10-Q, filed on ~~February 19, 2014)~~July 23,2015)

3.2		Amended and Restated Bylaws of ~~the Company,~~Essendant Inc., dated as of ~~July 21, 2014 (Company’s current report on~~June 1, 2015 (Exhibit 3.2 to the Form ~~8-K,~~10-Q, filed on July ~~24, 2014)~~23, 2015)

4.1		Note Purchase Agreement, dated as of November 25, 2013, among ~~USI, USSC,~~ESND, Essendant Co. (“ECO”), and the note purchasers identified therein (the “2013 Note Purchase Agreement”) (Exhibit 4.4 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2013, filed on February 19, 2014 (the “2013 Form 10-K”))

~~4.2~~4.2*		Amendment No. 1 to Note Purchase Agreement, dated as of January 27, 2016, among ECO, ESND and the holders of Notes issued by the Company that are parties thereto.

4.3		Parent Guaranty, dated as of November 25, 2013, by ~~USI~~ESND in favor of the holders of the promissory notes identified therein (Exhibit 4.5 to the 2013 Form 10-K)

~~4.3~~4.4		Subsidiary Guaranty, dated as of November 25, 2013, by all of the domestic subsidiaries of ~~USSC~~ECO (Exhibit 4.6 to the 2013 Form 10-K)

10.1*		Essendant Inc. 2016 Annual Cash Incentive Award Plan For Section 16 Officers**

10.2*		Form of Performance Based Restricted Stock Unit Award Agreement ~~under~~Under the ~~2004~~2015 Long-Term Incentive Plan**

10.3*		Form of 2016 Restricted Stock Award Agreement with EPS Minimum Under the 2015 Long-Term Incentive Plan**

10.4*		Amendment No. 1 to Fourth Amended and Restated Five-Year Revolving Credit Agreement, dated as of January 27, 2016, among ECO, ESND, the financial institutions that are parties theret,o and JPMorgan Chase Bank, National Association, as agent

10.5*		Fifth Amendment to Amended and Restated Transfer and Administration Agreement, dated as of March 30, 2016 among Essendant Receivables LLC, ECO, Essendant Financial Services LLC, PNC Bank, National Association and The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch

10.6*		Amendment to the Amended and Restated Transfer and Administration Agreement, dated as of January 22, 2016

18.1		Preferability Letter on Change in Accounting Principle

31.1*		Certification of Chief Executive Officer, dated as of April ~~23, 2015,~~20, 2016, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2*		Certification of Chief Financial Officer, dated as of April ~~23, 2015,~~20, 2016, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1*		Certification of Chief Executive Officer and Chief Financial Officer, dated as of April ~~23, 2015,~~20, 2016, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101*		The following financial information from ~~United Stationers~~Essendant Inc.’s Quarterly Report on Form 10-Q for the period ended March 31, ~~2015,~~2016, filed with the SEC on April ~~23, 2015,~~20, 2016, formatted in Extensible Business Reporting Language (XBRL): (i) the Condensed Consolidated Statement of Income for the three-month periods ended March 31, ~~2015~~2016 and ~~2014,~~2015, (ii) the Condensed Consolidated Balance Sheet at March 31, ~~2015~~2016 and December 31, ~~2014,~~2015, (iii) the Condensed Consolidated Statement of Cash Flows for the three-month periods ended March 31, ~~2015~~2016 and ~~2014,~~2015, and (iv) Notes to Condensed Consolidated Financial Statements.

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.

Large accelerated filer	x	Accelerated filer	¨

Non-accelerated filer	¨ (Do not check if a smaller reporting company)	Smaller reporting company	¨

		Page No.
PART I — FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets as of March 31, ~~2015~~2016 and December 31, ~~2014~~2015		3
Condensed Consolidated Statements of Income for the Three Months Ended March 31, ~~2015~~2016 and ~~2014~~2015		4
Condensed Consolidated Statements of Comprehensive Income for the Three Months Ended March 31, ~~2015~~2016 and ~~2014~~2015		5
Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, ~~2015~~2016 and ~~2014~~2015		6
Notes to Condensed Consolidated Financial Statements		7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		1916
Item 3. Quantitative and Qualitative Disclosures About Market Risk		2524
Item 4. Controls and Procedures		2524
PART II — OTHER INFORMATION
Item 1. Legal Proceedings		2624
Item 1A. Risk Factors		2624
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		2625
Item 6. Exhibits		2726
SIGNATURES		2827

Purchase price, net of cash acquired				$	32,225
Accounts receivable	$	(2,658	)
Inventories		(13,051	)
Other current assets		(307	)
Property, plant and equipment, net		(488	)
Intangible assets		(12,800	)
Total assets acquired					(29,304	)
Accounts payable		17,131
Accrued liabilities		2,139
Deferred income taxes		3,453
Other long-term liabilities		51
Total liabilities assumed					22,774
Goodwill				$	25,695

	Total		Estimated Life
Customer relationships	$	5,200	3 years
Trademark		7,600	15 years
Total	$	12,800

Purchase price, net of cash acquired				$	145,340
Accounts receivable	$	(44,815	)
Inventories		(54,656	)
Other current assets		(1,299	)
Property, plant and equipment, net		(4,408	)
Deferred income tax assets		(1,101	)
Other assets		(442	)
Intangible assets		(44,070	)
Total assets acquired					(150,791	)
Accounts payable		32,383
Accrued liabilities		3,976
Other long-term liabilities		52
Total liabilities assumed					36,411
Goodwill				$	30,960

Purchase price, net of cash acquired	$	39,983

Accounts receivable		9,230
Inventories		10,542
Other current assets		338
Property, plant and equipment, net		1,251
Other assets		752
Intangible assets		17,580
Total assets acquired		39,693

Accounts payable		4,992
Accrued liabilities		1,943
Deferred income taxes		3,175
Other long-term liabilities		76
Total liabilities assumed		10,186
Goodwill	$	10,476

	Amount
Assets held for sale:
Cash and cash equivalents	$	970
Accounts receivable, less allowance for doubtful accounts		10,980
Inventories		12,753
Other current assets		573
Net property, plant equipment		112
Other assets		658
Held-for-sale valuation allowance		(10,247	)
Total assets held for sale	$	15,799

Liabilities held for sale:
Accounts payable		4,618
Accrued liabilities		1,782
Other long-term liabilities		556
Total liabilities held for sale	$	6,956

Goodwill, balance as of December 31, 2014	$	398,042
Impairment		(3,319	)
Purchase accounting adjustments		1,034
Currency translation adjustment		(1,571	)
Goodwill, balance as of March 31, 2015	$	394,186

	Amount Reclassified From AOCI
	For the Three
	Months Ended
	March 31,			Affected Line Item In The Statement
Details About AOCI Components	2015			Where Net Income is Presented
Gain on interest rate swap cash flow hedges, before tax	$	364		Interest expense, net
		(138	)	Tax provision
	$	226		Net of tax
Amortization of defined benefit pension plan items:
Prior service cost and unrecognized loss	$	1,525		Warehousing, marketing and administrative expenses
		(593	)	Tax provision
		932		Net of tax
Total reclassifications for the period	$	1,158		Net of tax

	Amount
	Reclassified
	From AOCI
	For the Three
	Months Ended
	March 31,			Affected Line Item In The Statement
Details About AOCI Components	2016			Where Net Income is Presented
Realized and unrealized gains (losses) on cash flow hedges
Gain on interest rate swap, before tax	$	275		Interest expense, net
Gain on foreign exchange hedges, before tax		89		Cost of goods sold
		(138	)	Tax provision
	$	226		Net of tax

Defined benefit pension plan items
Amortization of prior service cost and unrecognized loss	$	1,493		Warehousing, marketing and administrative expenses
		(578	)	Tax provision
		915		Net of tax
Total reclassifications for the period, net of tax	$	1,141

	Amount of Gain (Loss) Recognized in OCI on Derivative (Effective Portion)							Amount of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)
	For the Three Months Ended March 31, 2015			For the Three Months Ended March 31, 2014			Location of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)	For the Three Months Ended March 31, 2015		For the Three Months Ended March 31, 2014
July 2012 Swap Transaction	$	(124	)	$	(159	)	Interest expense, net	$	331	$	-

2015 Fiscal Month	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of a Publicly Announced Program		Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program
January 1, 2015 to January 31, 2015		104,115	$	40.44		104,115	$	38,235,430
February 1, 2015 to February 28, 2015		88,454		41.63		88,454		134,552,953
March 1, 2015 to March 31, 2015		210,110		39.79		210,110		126,192,695
Total First Quarter		402,679	$	40.62		402,679	$	126,192,695

			~~UNITED STATIONERS~~ESSENDANT INC.
			(Registrant)

Date: April ~~23, 2015~~20, 2016			/s/ ~~Todd A. Shelton~~Earl C. Shanks
			~~Todd A. Shelton~~Earl C. Shanks
			Senior Vice President and Chief Financial Officer