UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q



x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended ~~June 30, 2017~~March 31, 2018



o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to .

Commission File Number 001-08454

ACCO Brands Corporation

(Exact Name of Registrant as Specified in Its Charter)



Delaware	36-2704017
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification Number)

Four Corporate Drive

Lake Zurich, Illinois 60047

(Address of Registrant’s Principal Executive Office, Including Zip Code)

(847) 541-9500

(Registrant’s Telephone Number, Including Area Code)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

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

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



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

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

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

As of ~~July 27, 2017,~~April 24, 2018, the registrant had outstanding ~~108,843,911~~107,206,084 shares of Common Stock.

Cautionary Statement Regarding Forward-Looking Statements

Certain statements ~~included~~contained in this Quarterly Report on Form 10-Q other than statements of historical fact, particularly those anticipating future financial performance, business prospects, growth, operating strategies and similar matters are "forward-looking statements" within the meaning of ~~Section 21E of the Securities Exchange Act of 1934, as amended. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in~~ the Private Securities Litigation Reform Act of ~~1995, and are including this statement for purposes of invoking these safe harbor provisions.~~1995. These ~~forward-looking~~ statements, which are ~~based on certain assumptions and describe future plans, strategies and expectations of the ACCO Brands Corporation (the "Company"), are~~ generally identifiable by the use of the words "will," "believe," "expect," "intend," "anticipate," "estimate," "forecast," "project," "plan," and similar expressions, are subject to certain risks and uncertainties, are made as of the date hereof, and we undertake no duty or ~~similar expressions. In particular, our business outlook is based on certain assumptions, which we believe~~obligation to be reasonable under the circumstances. These include, without limitation, assumptions regarding the timing, costs and synergies expected from the integration of acquisitions, changes in the macro environment, fluctuations in foreign currency rates, changes in the competitive landscape and consumer behavior and the effect of consolidation in the office products industry, as well as other factors described below.

~~Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain.~~update them. Because actual results may differ materially from those ~~predicted~~suggested or implied by such forward-looking statements, you should not place undue reliance on them when deciding whether to buy, sell or hold the ~~Company’s~~Company's securities. ~~Our forward-looking statements are made as of the date hereof and we undertake no obligation to update these forward-looking statements in the future, except as may be required by law.~~

Some of the factors that could affect our results or cause plans, actions and results to differ materially from current expectations are detailed in "Part I, Item 1. Business" and "Part I, Item 1A. Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, ~~2016,~~2017, and the financial statement line item discussions set forth in "Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations" of this Quarterly Report on Form 10-Q and from time to time in our other Securities and Exchange Commission (the "SEC") filings.

Website Access to Securities and Exchange Commission Reports

The Company’s Internet website can be found at www.accobrands.com. The Company makes available free of charge on or through its website its Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 as soon as practicable after the Company files them with, or furnishes them to, the SEC.

TABLE OF CONTENTS

PART I — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

ACCO Brands Corporation and Subsidiaries

Condensed Consolidated Balance Sheets


	June 30, 2017			December 31, 2016			March 31, 2018			December 31, 2017
(in millions of dollars)	(unaudited)						(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	102.2		$	42.9		$	122.7		$	76.9
Accounts receivable, net	419.0			391.0			316.1			469.3
Inventories	332.4			210.0			294.5			254.2
Other current assets	48.1			26.8			51.5			29.2
Total current assets	901.7			670.7			784.8			829.6
Total property, plant and equipment	632.5			528.0			657.1			645.2
Less: accumulated depreciation	(350.3		)	(329.6		)	(376.8		)	(366.7		)
Property, plant and equipment, net	282.2			198.4			280.3			278.5
Deferred income taxes	138.8			27.3			132.9			137.9
Goodwill	687.3			587.1			667.9			670.3
Identifiable intangibles, net	841.9			565.7			838.1			839.9
Other non-current assets	31.4			15.3			50.7			42.9
Total assets	$	2,883.3		$	2,064.5		$	2,754.7		$	2,799.1
Liabilities and Stockholders' Equity
Current liabilities:
Notes payable	$	—		$	63.7		$	0.7		$	—
Current portion of long-term debt	29.1			4.8			42.0			43.2
Accounts payable	229.0			135.1			188.6			178.2
Accrued compensation	40.8			42.8			40.4			60.9
Accrued customer program liabilities	102.1			94.0			98.5			141.1
Accrued interest	2.1			1.3			6.8			1.2
Other current liabilities	94.2			64.7			112.1			113.8
Total current liabilities	497.3			406.4			489.1			538.4
Long-term debt, net	1,067.2			627.7			908.4			889.2
Deferred income taxes	240.9			146.7			174.8			177.1
Pension and post-retirement benefit obligations	265.9			98.0			268.3			275.5
Other non-current liabilities	95.0			77.0			149.1			144.8
Total liabilities	2,166.3			1,355.8			1,989.7			2,025.0
Stockholders' equity:
Common stock	1.1			1.1			1.1			1.1
Treasury stock	(26.3		)	(17.0		)	(33.9		)	(26.4		)
Paid-in capital	2,018.8			2,015.7			1,999.1			1,999.7
Accumulated other comprehensive loss	(432.9		)	(419.4		)	(467.4		)	(461.1		)
Accumulated deficit	(843.7		)	(871.7		)	(733.9		)	(739.2		)
Total stockholders' equity	717.0			708.7			765.0			774.1
Total liabilities and stockholders' equity	$	2,883.3		$	2,064.5		$	2,754.7		$	2,799.1

See Notes to Condensed Consolidated Financial Statements (Unaudited).

ACCO Brands Corporation and Subsidiaries

Consolidated Statements of Income

(Unaudited)


	Three Months Ended June 30,						Six Months Ended June 30,						Three Months Ended March 31,
(in millions of dollars, except per share data)	2017			2016			2017			2016			2018			2017
Net sales	$	490.0		$	410.1		$	849.8		$	688.2		$	405.8		$	359.8
Cost of products sold	321.5			275.3			570.5			471.0			278.3			248.9
Gross profit	168.5			134.8			279.3			217.2			127.5			110.9
Operating costs and expenses:
Advertising, selling, general and administrative expenses	101.8			79.6			193.8			150.8
Selling, general and administrative expenses													101.8			94.2
Amortization of intangibles	9.0			5.4			17.0			10.1			9.3			8.0
Restructuring charges	12.3			4.4			13.8			4.4			4.7			1.5
Total operating costs and expenses	123.1			89.4			224.6			165.3			115.8			103.7
Operating income	45.4			45.4			54.7			51.9			11.7			7.2
Non-operating expense (income):
Interest expense	10.8			12.8			20.6			23.5			9.4			9.8
Interest income	(2.0		)	(1.9		)	(3.3		)	(3.3		)	(1.0		)	(1.3		)
Equity in earnings of joint-venture	—			(0.8		)	—			(2.1		)
Other income, net	(1.5		)	(36.6		)	(0.8		)	(35.5		)
Non-operating pension income													(2.2		)	(2.1		)
Other (income) expense, net													(0.6		)	0.7
Income before income tax	38.1			71.9			38.2			69.3			6.1			0.1
Income tax expense	14.6			10.0			11.1			2.6
Income tax benefit													(4.3		)	(3.5		)
Net income	$	23.5		$	61.9		$	27.1		$	66.7		$	10.4		$	3.6

Per share:
Basic income per share	$	0.21		$	0.58		$	0.25		$	0.63		$	0.10		$	0.03
Diluted income per share	$	0.21		$	0.57		$	0.24		$	0.61		$	0.09		$	0.03

Weighted average number of shares outstanding:
Basic	109.5			107.1			108.9			106.6			106.8			108.3
Diluted	111.9			109.0			112.1			108.6			110.0			112.4

Dividends per common share													$	0.06		$	—

See Notes to Condensed Consolidated Financial Statements (Unaudited).

ACCO Brands Corporation and Subsidiaries

Consolidated Statements of Comprehensive Income ~~(Loss)~~

(Unaudited)

Three Months Ended June 30, Six Months Ended June 30,
(in millions of dollars) 2017 2016 2017 2016
Net income $ 23.5
$ 61.9
$ 27.1
$ 66.7
Other comprehensive income (loss), net of tax:
Unrealized (loss) income on derivative instruments, net of tax benefit (expense) of $0.6 and $(0.3) and $1.3 and $0.9, respectively (1.6 ) 0.4
(3.5 ) (2.1 )

Foreign currency translation adjustments, net of tax benefit (expense) of $4.2 and $0.0 and $4.2 and $0.0, respectively (19.3 ) 12.9
(6.8 ) 40.3

Recognition of deferred pension and other post-retirement items, net of tax benefit (expense) of $0.7 and $(1.8) and $0.8 and $(2.7), respectively (2.7 ) 4.9
(3.2 ) 7.3
Other comprehensive (loss) income, net of tax (23.6 ) 18.2
(13.5 ) 45.5

Comprehensive (loss) income $ (0.1 ) $ 80.1
$ 13.6
$ 112.2



	Three Months Ended March 31,
(in millions of dollars)	2018			2017
Net income	$	10.4		$	3.6
Other comprehensive (loss) income, net of tax:
Unrealized income (loss) on derivative instruments, net of tax (expense) benefit of $(0.3) and $0.7, respectively	0.6			(1.9		)

Foreign currency translation adjustments, net of tax (expense) benefit of $(2.7) and $0.0, respectively	(4.3		)	12.5

Recognition of deferred pension and other post-retirement items, net of tax benefit of $0.9 and $0.1, respectively	(2.6		)	(0.5		)
Other comprehensive (loss) income, net of tax	(6.3		)	10.1

Comprehensive income	$	4.1		$	13.7

See Notes to Condensed Consolidated Financial Statements (Unaudited).

ACCO Brands Corporation and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(Unaudited)


	Six Months Ended June 30,						Three Months Ended March 31,
(in millions of dollars)	2017			2016			2018			2017
Operating activities
Net income	$	27.1		$	66.7		$	10.4		$	3.6
Gain on revaluation of previously held joint-venture equity interest	—			(35.2		)
Amortization of inventory step-up	0.9			0.2			—			0.9
Loss on disposal of assets	—			0.2			0.1			—
Depreciation	17.8			15.5			9.0			9.0
Amortization of debt issuance costs	1.9			1.8			0.5			1.4
Amortization of intangibles	17.0			10.1			9.3			8.0
Stock-based compensation	7.8			7.9			3.2			2.4
Equity in earnings of joint-venture, net of dividends received	—			(1.6		)
Changes in balance sheet items:
Accounts receivable	51.2			60.6			162.0			165.3
Inventories	(75.0		)	(70.7		)	(43.5		)	(31.2		)
Other assets	(13.7		)	(8.7		)	(8.0		)	(0.8		)
Accounts payable	40.2			24.4			8.8			(4.3		)
Accrued expenses and other liabilities	(58.5		)	(65.4		)	(78.7		)	(73.4		)
Accrued income taxes	(8.8		)	(4.1		)	(12.7		)	(15.5		)
Net cash provided by operating activities	7.9			1.7			60.4			65.4
Investing activities
Additions to property, plant and equipment	(13.0		)	(6.9		)	(8.0		)	(5.2		)
Proceeds from the disposition of assets	0.2			0.1			—			0.1
Cost of acquisitions, net of cash acquired	(292.6		)	(85.4		)	—			(292.6		)
Net cash used by investing activities	(305.4		)	(92.2		)	(8.0		)	(297.7		)
Financing activities
Proceeds from long-term borrowings	473.8			187.4			21.5			412.0
Repayments of long-term debt	(104.8		)	(90.3		)	(11.6		)	(94.4		)
Borrowings of notes payable, net	—			32.8			0.7			—
Payments for debt issuance costs	(3.5		)	(0.8		)	—			(3.4		)
Dividends paid							(6.4		)	—
Repurchases of common stock	(6.0		)	—			(9.1		)	—
Payments related to tax withholding for stock-based compensation	(9.2		)	(5.0		)	(7.4		)	(9.2		)
Proceeds from the exercise of stock options	2.8			1.6			5.3			1.4
Net cash provided by financing activities	353.1			125.7
Net cash (used) provided by financing activities							(7.0		)	306.4
Effect of foreign exchange rate changes on cash and cash equivalents	3.7			5.6			0.4			1.3
Net increase in cash and cash equivalents	59.3			40.8			45.8			75.4
Cash and cash equivalents
Beginning of the period	42.9			55.4			76.9			42.9
End of the period	$	102.2		$	96.2		$	122.7		$	118.3

See Notes to Condensed Consolidated Financial Statements (Unaudited).

ACCO Brands Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)

1. Basis of Presentation

As used in this Quarterly Report on Form 10-Q for the quarter ended ~~June 30, 2017~~March 31, 2018, the terms "ACCO Brands," "ACCO," the "Company," "we," "us," and "our" refer to ACCO Brands Corporation and its consolidated subsidiaries.

The management of ACCO Brands Corporation is responsible for the accuracy and internal consistency of the preparation of the condensed consolidated financial statements and notes contained in this Quarterly Report on Form 10-Q.

The condensed consolidated interim financial statements have been prepared pursuant to the rules and regulations of the SEC. Although the Company believes the disclosures are adequate to make the information presented not misleading, certain information and note disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles in the U.S. ("GAAP") have been condensed or omitted pursuant to those rules and regulations. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2016~~2017.

The Condensed Consolidated Balance Sheet as of ~~June 30, 2017,~~March 31, 2018, the related Consolidated Statements of Income and the Consolidated Statements of Comprehensive Income ~~(Loss)~~ for the three ~~and six~~ months ended ~~June 30,~~March 31, 2018 and 2017 ~~and 2016~~ and Condensed Consolidated Statements of Cash Flows for the ~~six~~three months ended ~~June 30,~~March 31, 2018 and 2017 ~~and 2016~~ are unaudited. The December 31, ~~2016~~2017 Condensed Consolidated Balance Sheet data was derived from audited financial statements, but does not include all annual disclosures required by GAAP. The above referenced financial statements included herein were prepared by management ~~on the same basis as the Company's audited consolidated financial statements for the year ended December 31, 2016~~ and reflect all adjustments (consisting solely of normal recurring items unless otherwise noted) which are, in the opinion of management, necessary for the fair presentation of results of operations and cash flows for the interim periods ended ~~June 30,~~March 31, 2018 and 2017, ~~and 2016,~~ and the financial position of the Company as of ~~June 30, 2017.~~March 31, 2018. Interim results may not be indicative of results for a full year.

On January 31, 2017, the Company completed the acquisition (the "Esselte Acquisition") of Esselte Group Holdings AB ("Esselte"). Accordingly, the financial results of Esselte are included in the Company's condensed consolidated financial statements as of February 1, 2017, and are ~~reported~~reflected in all three of the Company's ~~segments, from February 1, 2017 forward.~~reportable segments. See "Note 3. Acquisition" for details on the Esselte Acquisition.

~~On May 2, 2016,~~In accordance with the adoption of the accounting standard ASU No. 2017-07, Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, the Company ~~completed~~has retrospectively revised the ~~acquisition of Australia Stationery Industries, Inc. (the "PA Acquisition"), which indirectly owned the 50%~~presentation of the ~~Pelikan Artline joint-venture and the issued capital stock~~non-service components of ~~Pelikan Artline Pty Limited (collectively, "Pelikan Artline") that was not already owned by the Company. Prior~~periodic pension income/cost to the PA Acquisition, the Pelikan Artline joint-venture was accounted for using the equity method. From the date of the PA Acquisition, May 2, 2016, the results of the Pelikan Artline joint-venture are included"Non-operating pension income" in the ~~Company's condensed consolidated financial statements and are reported in the ACCO Brands International segment. Accordingly, we no longer report any joint-venture income.~~

~~Effective in the first quarter~~Consolidated Statements of 2017, as a result of the Esselte Acquisition, the Company realigned its operating structure, which impacted its determination of its business segments for financial reporting purposes. As a result, the Company no longer reports the results of its Computer Products Group as a separate segment. Prior year amounts included herein have been restated to conform to the current year presentation.Income. See "Note ~~15. Information on Business Segments"~~2. Recent Accounting Pronouncements" for details on the ~~realigned segments.~~new standard.

The preparation of financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported assets and liabilities at the date of the financial statements and the reported revenues and expenses during the reporting periods. Actual results could differ from those estimates.

2. Recent Accounting Pronouncements

In ~~March 2017,~~February 2018, the Financial Accounting Standards Board (the "FASB") issued ASU No. ~~2017-07, "Compensation~~2018-02, Income Statement - ~~Retirement Benefits~~Reporting Comprehensive Income (Topic ~~715): Improving~~220). In December 2017, the ~~Presentation~~Tax Cuts and Jobs Act (the "U.S. Tax Act") was signed into law. Prior to ASU 2018-02, GAAP required deferred tax assets and deferred tax liabilities to be adjusted for the effect of ~~Net Periodic Pension Cost~~a change in tax laws or rates with the effect included in income from continuing operations in the reporting period including the enactment date. The U.S. Tax Act reduces the historical U.S corporate tax rate and ~~Net Periodic Post-retirement Benefit Cost." The~~the effect of that change is required to be included in income from continuing operations, even if the original tax effects were recorded in Accumulated Other Comprehensive Income ("AOCI"). This could cause some tax effects to become stranded in AOCI as they are not updated to reflect the new tax rate. This new standard ~~requires employers~~allows a company to ~~disaggregate~~elect to reclass the ~~service cost component~~stranded tax effects resulting from the ~~other components~~U.S. Tax Act from AOCI to retained earnings. The adoption of ~~net benefit cost and disclose~~ the ~~amount of net benefit cost that is included~~new standard may be applied in the ~~income statement~~period of adoption or ~~capitalized in assets,~~retrospectively to each period(s) effected by ~~line item. The standard requires employers to report~~ the ~~service cost component~~change in the ~~same line item(s) as other compensation costs~~corporate tax rate. The Company is currently in the process of evaluating the impact of adoption of ASU 2018-02 on the Company’s consolidated financial statements. ASU 2018-02 is effective for fiscal years and ~~to report other pension-related costs (which include interest costs, amortization~~interim periods within those fiscal years beginning after December 15, 2018. Early adoption of ~~pension-related costs from prior periods, and~~ the ~~gains~~standard is permitted including adoption in any interim period for which financial statements have not been issued.

ACCO Brands Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)

~~or losses on plan assets) separately~~In August 2017, the FASB issued ASU No. 2017-12, Derivative and ~~exclude them from~~Hedging (Topic 815), Targeted Improvements to Accounting for Hedging Activities. The new standard improves certain aspects of the ~~subtotal of operating income. The standard also allows only the service cost component to be~~hedge accounting model, including making more risk management strategies eligible for ~~capitalization when applicable.~~hedge accounting and simplifying the assessment of hedge effectiveness. The guidance requires application on a retrospective basis for the presentation of the service cost component and the other components of net periodic pension cost and net periodic post-retirement benefit costCompany is currently in the ~~income statement and~~process of assessing the impact of adoption of ASU 2017-12 on ~~a prospective basis for~~ the capitalization of the service cost component of net periodic pension cost and net periodic post-retirement benefit in assets. ASU No. 2017-07 is effective for fiscal years beginning after December 15, 2017, and interim periods within those years. Early adoption is permitted as of the beginning of an annual period for which interimCompany's consolidated financial ~~statements have not been issued.~~statements. The Company will adopt ASU ~~2017-07 at the beginning of~~2017-12 effective with its ~~2018~~2019 fiscal year. The adoption of ASU No. 2017-07 is not expected to have a material effect on the Company's net income, but it is expected to have a material effect on its operating income. If the Company uses the practical expedient that permits an employer to use the amounts disclosed in its pension and other retiree benefits footnote, included in our ~~Annual Report on Form 10-K~~ ~~for the year ended December 31, 2016~~, for the prior comparative periods as the estimation basis for applying the retrospective presentation requirements, the Company's operating income would be reduced by approximately $8 million for 2016.

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). This ~~new~~ASU amends the existing accounting standard ~~will require the~~for leases. The amendments are intended to increase transparency and comparability among organizations by requiring recognition of lease assets and lease liabilities on the balance sheet and disclosure of most leases as lease assets (right-of-use assets) and lease liabilities by lessees for those leases classified as operating leases under current GAAP. Lease expense on the income statement is similar in manner to current accounting. Thiskey information about leasing arrangements. The new standard ~~also includes increased disclosures to meet the objective of enabling users of financial statements to understand more about the nature of an entity’s leasing activities. ASU 2016-02 is~~will be effective for ~~fiscal years~~annual periods beginning after December 15, 2018, including interim periods within ~~those fiscal years. Early adoption~~that reporting period, and early application is ~~permitted~~permitted. The Company is currently evaluating the new guidance to determine the impact it will have on its consolidated financial statements and disclosures, but expects the impact to the Company’s Consolidated Balance Sheets to be significant. At this time, the Company does not expect adoption of ASU 2016-02 is to ~~be done~~have a material impact on ~~a modified retrospective basis.~~its Consolidated Statements of Income as the majority of its leases will remain operating in nature. The Company is ~~currently~~ in the process of ~~evaluating the impact of adoption of ASU 2016-02 on the Company’s consolidated financial statements~~analyzing existing leases, practical expedients, and ~~it currently expects that most of~~deploying its operating lease commitments will be subject to the new standard and will be recognized as operating lease liabilities and right-of-use assets upon the adoption of ASU 2016-02. It is expected that these changes will be material to the Company's consolidated financial statements.implementation strategy. The Company will adopt ASU 2016-02 at the beginning of its 2019 fiscal year.

~~In May 2014,~~Other than the ~~FASB~~items mentioned above, there are no other recently issued accounting standards that are expected to have a material effect on the Company’s financial condition, results of operations or cash flow.

Recently Adopted Accounting Standards ~~Update (ASU)~~

On January 1, 2018, we adopted the accounting standard ASU No. 2017-07, Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. The new standard requires presentation of all components of net periodic pension and postretirement benefit costs, other than service costs, in an income statement line item outside of a subtotal of income from operations. The service cost component will continue to be presented in the same line item as other employee compensation costs. The Company used the practical expedient which permits an employer to use the amounts disclosed in its pension disclosures as the basis for applying the retrospective presentation requirements. On this basis, the Company restated its operating income which was reduced by $8.5 million for the year ended December 31, 2017 and $2.1 million for the three months ended March 31, 2017.

On January 1, 2018, we adopted the accounting standard ASU 2014-09, Revenue from Contracts with Customers and all the related amendments (Topic 606), and applied it to contracts which supersedes substantially all existing revenue recognition requirements, including most industry-specific guidance. The new standard requires a company to recognize revenue when it transfers goods or services to customers in an amount that reflects the consideration that the company expects to receive for those goods or services. The FASB has subsequently issued the following amendments to ASU 2014-09, which have the same effective date and transition datewere not completed as of January 1, ~~2018:~~

~~In August 2015,~~2018 using the ~~FASB issued ASU No. 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral~~modified retrospective method. A completed contract is one where all (or substantially all) of the ~~Effective Date, which delayed~~revenue was recognized in accordance with the ~~effective~~revenue guidance that was in effect before the date of initial application of ASU 2014-09. We recognized the ~~new standard from January 1, 2017~~cumulative effect of $1.6 million, net of tax, upon adopting ASU 2014-09 as an addition to opening retained earnings as of January 1, 2018. The ~~FASB also agreed~~comparative information has not been restated and continues to ~~allow entities to choose to adopt~~be reported under the ~~standard as of the original effective date.~~accounting standards in effect for those periods.

~~In March 2016,~~The majority of our revenue is recognized at a point in time, when control is transferred to our customer, which is usually when products are shipped or delivered based upon the ~~FASB issued ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations, which clarifies~~specific terms contained within the ~~implementation guidance on principal versus agent considerations.~~agreement. Our general payment terms are usually within 30-90 days. We do not have any significant financing components.

In April 2016, the FASB issued ASU No. 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing, which clarifies certain aspects of identifying performance obligations and licensing implementation guidance.

In May 2016, the FASB issued ASU No. 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients related to disclosures of remaining performance obligations, as well as other amendments to guidance on collectability, non-cash consideration and the presentation of sales and other similar taxes collected from customers.

In December 2016, the FASB issued ASU No. 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers, which amends certain narrow aspects of the guidance issued in ASU 2014-09 including guidance related to the disclosure of remaining performance obligations and prior-period performance obligations, as well as other amendments to the guidance on loan guarantee fees, contract costs, refund liabilities, advertising costs and the clarification of certain examples

There are two methods of adoption allowed, either a "full" retrospective adoption or a "modified" retrospective adoption. The Company currently expects to use the modified retrospective method of adoption on January 1, 2018. The Company has hired outside consultants to assist in the process of evaluating the potential impact of ASU 2014-09, including a review of customer

ACCO Brands Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)

~~contracts, and has completed its initial review.~~ The ~~Company plans~~cumulative effect of the changes on our January 1, 2018 opening Condensed Consolidated Balance Sheet due to ~~begin~~ the ~~process to quantify the effect~~adoption of ASU 2014-09 were as follows:



(in millions of dollars)	Balance at December 31, 2017			Adjustments due to ASU 2014-09			Balance at January 1, 2018
Assets:
Inventories	$	254.2		$	(3.5	)	$	250.7
Other current assets	29.2			6.9			36.1

Liabilities and stockholders' equity:
Accrued customer program liabilities	141.1			1.1			142.2
Other current liabilities	113.8			0.1			113.9
Deferred income taxes	177.1			0.6			177.7
Accumulated deficit	(739.2		)	1.6			(737.6		)

The impact of the adoption of ASU 2014-09 inon our Consolidated Statements of Income and Condensed Consolidated Balance Sheet for the ~~third quarter of 2017, but it does not expect it will have a material impact on the Company’s consolidated financial statements in any one annual period.~~three-month period ended March 31, 2018 was as follows:



	Three Months Ended March 31, 2018
(in millions of dollars)	As Reported			Balances without adoption of ASU 2014-09			Effect of Change Higher/(Lower)
Consolidated Statements of Income:
Net sales	$	405.8		$	405.7		$	0.1
Cost of products sold	278.3			278.4			(0.1		)
Net income	10.4			10.2			0.2

Condensed Consolidated Balance Sheet:
Assets:
Accounts receivable, net	316.1			313.8			2.3
Inventories	294.5			297.3			(2.8		)
Other current assets	51.5			44.4			7.1

Liabilities and stockholders' equity:
Accrued customer program liabilities	98.5			97.9			0.6
Other current liabilities	112.1			108.5			3.6
Deferred income taxes	174.8			174.2			0.6
Accumulated deficit	(733.9		)	(735.7		)	1.8

~~Recently Adopted Accounting Standards~~

~~In March 2016,~~See "Note 5. Revenue Recognition" for the FASB issued ASU No. 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. This new standard simplifies the accounting for employee share-based payments and involves several aspects of the accounting for share-based transactions, including the potential timing of expenses, the income tax consequences, classification of awards as either equity or liabilities and classification on the statement of cash flows. ASU 2016-09 is effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. The Company has adopted ASU 2016-09 effective with the first quarter of 2017. The Company has made the allowed accounting policy election to account for forfeitures as they occur, which will affect the timing of stock compensation expense, but not the overall expense. The change in accounting of forfeitures, along with the changesrequired disclosures related to how excess tax benefits are recognized, has been done using a modified retrospective transition method by means of a cumulative-effect adjustment to equity as of the beginning of the first quarter of 2017, which was not material. An effect of the change was to require recognition of excess tax benefits in our "Consolidated Statements of Income" rather than as a component of equity under the previous standard, therefore, for the six months ended June 30, 2017, a tax benefit of $5.5 million was recorded to the Company's income statement.ASU 2014-09.

3. Acquisition

On January 31, 2017, ACCO Europe Limited ("ACCO Europe"), an indirect wholly-owned subsidiary of the Company, completed the Esselte Acquisition. The Esselte Acquisition was made pursuant to the share purchase agreement dated October 21, 2016, as amended (the "Purchase Agreement"), among ACCO Europe, the Company and an entity controlled by J. W. Childs (the "Seller").

With the acquisition of Esselte, ACCO Brands is a leading European manufacturer and marketer of branded ~~business~~consumer and

ACCO Brands Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)

office products. Esselte takes products to market under the Leitz^®, Rapid^® and Esselte^® brands in the storage and organization, stapling, ~~and punch,~~punching, business machines and do-it-yourself tools product categories. The combination ~~improves~~improved ACCO Brands’ scale and ~~enhances~~enhanced its position as an industry leader in Europe.

The purchase price paid at closing was €302.9 million (US$326.8 million based on January 31, 2017 exchange rates) and was subject to a working capital adjustment that reduced it by $0.3 million. The purchase price, net of cash acquired of $34.2 million, was $292.3 million. A portion of the purchase price (€8.1 million (US$8.7 million based on January 31, 2017 exchange rates)) is being held in an escrow account for a period of up to two years after closing as ACCO Europe’s sole recourse against Seller in the event of any claims against Seller under the Purchase Agreement. A warranty and indemnity insurance policy held by the Company and ACCO Europe insures certain of Seller’s contractual obligations to ACCO Europe under the Purchase Agreement for up to €40.0 million (US$43.2 million based on January 31, 2017 exchange rates) for a period of up to seven years, subject to certain deductibles and limitations set forth in the policy.

The Esselte Acquisition and related expenses were funded through a term loan of €300.0 million (US$320.8 million based on January 27, 2017 exchange rates) and cash on ~~hand, see "Note 4. Long-term Debt and Short-term Borrowings" for details.~~hand.

For accounting purposes, the Company is the acquiring enterprise. The Esselte Acquisition is being accounted for as a purchase ~~business~~ combination and Esselte's results are included in the Company’s condensed consolidated financial statements ~~from~~as of February 1, ~~2017 forward. Esselte's results for the~~ ~~three and six~~ ~~months ended~~ ~~June 30, 2017~~ ~~include $98.2 million and $166.8~~2017. Esselte contributed approximately $44.2 million of net sales ~~respectively, and operating income (loss) of ($2.5) million and $2.1 million, respectively. Operating income (loss) is inclusive of restructuring and integration charges.~~

~~ACCO Brands Corporation and Subsidiaries~~

~~Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)~~

for the month ended January 31, 2018.

The following table presents the ~~preliminary~~ allocation of the consideration given to the fair values of the assets acquired and liabilities assumed at the date of acquisition.


(in millions of dollars)	At January 31, 2017		At January 31, 2017
Calculation of Goodwill:
Purchase price, net of working capital adjustment	$	326.5	$	326.5

Plus fair value of liabilities assumed:
Accounts payable and accrued liabilities	122.6		121.9
Deferred tax liabilities	85.3		83.6
Pension obligations	171.5		174.1
Other non-current liabilities	5.1		5.8
Fair value of liabilities assumed	$	384.5	$	385.4

Less fair value of assets acquired:
Cash acquired	34.2		34.2
Accounts receivable	60.3		60.0
Inventory	41.9		41.9
Property, plant and equipment	83.6		75.6
Identifiable intangibles	274.0		277.0
Deferred tax assets	96.5		106.3
Other assets	9.8		10.4
Fair value of assets acquired	$	600.3	$	605.4

Goodwill	$	110.7	$	106.5

~~We are continuing our review~~In the fourth quarter of 2017, we finalized our fair value estimate of assets acquired and liabilities assumed ~~during the measurement period, which will conclude as soon as we receive the information we are seeking about facts and circumstances that existed~~ as of the acquisition ~~date or learn that more information is not available. This measurement period~~date. No additional adjustments to the goodwill related to the Esselte Acquisition will ~~not exceed one year from the acquisition date.~~ be recognized.

ACCO Brands Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)

The excess of the purchase price over the fair value of net assets acquired iswas allocated to goodwill. The goodwill of ~~$110.7~~$106.5 million is primarily attributable to synergies expected to be realized from facility integration, headcount reduction and other operational streamlining activities, and from the existence of an assembled workforce.

Our fair value estimate of assets acquired and liabilities assumed is pending the completion of several elements, including the finalization of an independent appraisal and valuations of the fair value of the assets acquired and liabilities assumed and final review by our management. The primary areas that are not yet finalized relate to, intangible assets, property, plant and equipment, contingent liabilities and income taxes. Accordingly, there could be material adjustments to our condensed consolidated financial statements, including changes in our amortization and depreciation expense related to the valuation of intangible assets and property and equipment acquired and their respective useful lives, among other adjustments.

In addition, the previously estimated values for property, plant and equipment, have also been refined, which resulted in reductions in value of $1.1 million and we revised the depreciable life of certain assets. The impact to net income from this refinement in the first quarter of 2017 would have been immaterial.

~~The final determination of the purchase price, fair values and resulting goodwill may differ significantly from what is reflected in these condensed consolidated financial statements.~~

During the three months ended ~~June 30,~~March 31, 2017, ~~and 2016,~~ transaction costs related to the Esselte Acquisition were ~~$1.3 million and $2.0 million, respectively. During the six months ended June 30, 2017 and 2016, transaction costs were $3.4 million and $2.0 million, respectively.~~$2.1 million. For the year ended December 31, ~~2016,~~2017, transaction costs totaled ~~$9.2~~$5.0 million. These costs were reported as ~~advertising,~~ selling, general and administrative expenses.

~~ACCO Brands Corporation and Subsidiaries~~

~~Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)~~

~~Unaudited Pro Forma Consolidated Results~~

The accounting literature establishes guidelines regarding, and requires the presentation of, the following unaudited pro forma information. Therefore, the unaudited pro forma information presented below is not intended to represent, nor do we believe it is indicative of, the consolidated results of operations of the Company that would have been reported had the Esselte Acquisition been completed on January 1, 2016. Furthermore, the unaudited pro forma information does not give effect to the anticipated synergies or other anticipated benefits of the Esselte Acquisition.

~~Had the Esselte Acquisition occurred on January 1, 2016, unaudited pro forma consolidated results for the three and six months ended June 30, 2017 and 2016 would have been as follows:~~

Three Months Ended June 30, Six Months Ended June 30,
(in millions of dollar, except per share data) 2017 2016 2017 2016
Net sales $ 490.0
$ 517.9
$ 885.8
$ 900.7
Net income 26.6
60.5
36.9
48.8
Net income per common share (diluted) $ 0.24
$ 0.56
$ 0.33
$ 0.45

The pro forma amounts are based on the Company's historical results of operations and the historical results of operations for the acquired Esselte business, which have been translated at the average foreign exchange rates for the presented periods. The pro forma results of operations have been adjusted for amortization of finite-lived intangibles, and other charges related to the Esselte Acquisition accounting. The pro forma results of operations for the six months ended June 30, 2016 have also been adjusted to include transaction costs related to the Esselte Acquisition of $12.6 million and amortization of the purchase accounting step-up in inventory cost of $0.9 million.

~~ACCO Brands Corporation and Subsidiaries~~

~~Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)~~

4. Long-term Debt and Short-term Borrowings

Notes payable and long-term debt, listed in order of ~~their~~the priority of security interests in assets of the Company, consisted of the following as of ~~June 30, 2017~~March 31, 2018 and December 31, ~~2016~~2017:


(in millions of dollars)	June 30, 2017		December 31, 2016		March 31, 2018		December 31, 2017
Euro Senior Secured Term Loan A, due January 2022 (floating interest rate of 2.00% at June 30, 2017)	$	332.8	$	—
U.S. Dollar Senior Secured Term Loan A, due April 2020 (floating interest rate of 2.27% at December 31, 2016)	—		81.0
Australian Dollar Senior Secured Term Loan A, due January 2022 (floating interest rate of 3.78% at June 30, 2017)	60.6		—
Australian Dollar Senior Secured Term Loan A, due April 2020 (floating interest rate of 3.25% at December 31, 2016)	—		70.3
U.S. Dollar Senior Secured Revolving Credit Facility, due January 2022 (floating interest rate of 3.35% at June 30, 2017)	217.0		—
U.S. Dollar Senior Secured Revolving Credit Facility, due April 2020 (floating interest rate of 2.59% at December 31, 2016)	—		63.7
Australian Dollar Senior Secured Revolving Credit Facility, due January 2022 (floating interest rate of 3.78% at June 30, 2017)	92.9		—
Australian Dollar Senior Secured Revolving Credit Facility, due April 2020 (floating interest rate of 3.27% at December 31, 2016)	—		87.9
Euro Senior Secured Term Loan A, due January 2022 (floating interest rate of 1.50% at March 31, 2018 and 1.50% at December 31, 2017)					$	350.6	$	345.0
Australian Dollar Senior Secured Term Loan A, due January 2022 (floating interest rate of 3.44% at March 31, 2018 and 3.29% at December 31, 2017)					58.3		60.0
U.S. Dollar Senior Secured Revolving Credit Facility, due January 2022 (floating interest rate of 3.57% at March 31, 2018 and 3.53% at December 31, 2017)					56.5		48.9
Australian Dollar Senior Secured Revolving Credit Facility, due January 2022 (floating interest rate of 3.40% at March 31, 2018 and 3.28% at December 31, 2017)					91.4		85.0
Senior Unsecured Notes, due December 2024 (fixed interest rate of 5.25%)	400.0		400.0		400.0		400.0
Other borrowings	0.7		0.6		1.2		0.6
Total debt	1,104.0		703.5		958.0		939.5
Less:
Current portion	29.1		68.5		42.8		43.2
Debt issuance costs, unamortized	7.7		7.3		6.8		7.1
Long-term debt, net	$	1,067.2	$	627.7	$	908.4	$	889.2

In connection with ~~the consummation of~~ the Esselte Acquisition, the Company entered into a Third Amended and Restated Credit Agreement (the "2017 Credit Agreement"), dated as of January 27, 2017, among the Company, certain subsidiaries of the Company, Bank of America, N.A., as administrative agent, and the other agents and various lenders party thereto. The 2017 Credit Agreement amended and restated the Company’s Second Amended and Restated Credit Agreement, dated April 28, 2015, as amended, among the Company, certain subsidiaries of the Company, Bank of America, N.A., as administrative agent, and the other lenders party thereto (the "2015 Credit Agreement").

~~The 2017 Credit Agreement~~ provides for a five-year senior secured credit facility, which consists of a €300.0 million (US$320.8 million based on January 27, 2017 exchange rates) term loan facility, ~~(the "Euro Term Loan A"),~~ a A$80.0 million (US$60.4 million based on January 27, 2017 exchange rates) term loan facility, ~~(the "AUD Term Loan A") and together with the Euro Term Loan A (the "2017 Term A Loan Facility"),~~ and a US$400.0 million multi-currency revolving credit facility (the "2017 Revolving Facility").

~~Maturity and amortization~~

~~Borrowings~~As of March 31, 2018, there were $147.9 million in borrowings outstanding under the 2017 Revolving ~~Facility and~~Facility. The remaining amount available for borrowings was $239.5 million (allowing for $12.6 million of letters of credit outstanding on that date).

As more fully described in the Company's 2017 ~~Term A Loan Facility mature~~Annual Report on ~~January 27, 2022. Amounts~~Form 10-K, we must meet certain restrictive debt covenants under the ~~2017 Revolving Facility are non-amortizing. Beginning June 30,~~senior secured credit facilities. The indenture governing our outstanding senior unsecured notes also contains certain covenants. As of and for the periods ended March 31, 2018 and December 31, 2017, the ~~outstanding principal~~Company was in compliance with all applicable loan covenants.

5. Revenue Recognition

On January 1, 2018, the Company adopted the accounting standard ASU 2014-09, Revenue from Contracts with Customers and all related amendments (Topic 606), applying the modified retrospective transition method to all contracts that were not completed as of January 1, 2018. Results for reporting periods beginning after December 31, 2017 are presented under ASU 2014-09, while prior period amounts are not adjusted and continue to be reported under the ~~2017 Term A Loan Facility are payable~~accounting standards in ~~quarterly installments in an amount representing, on an annual basis, 5.0%~~effect for the prior period. The Company recorded a net increase to beginning retained earnings of ~~the initial aggregate principal amount~~$1.6 million as of ~~such loan facility and increasing~~January 1, 2018 due to ~~12.5% on an annual basis by June 30, 2020.~~

~~Interest rates~~

~~Amounts outstanding under~~ the 2017 Credit Agreement bear interest at a rate per annum equal to the Euro Rate with a 0% floor, the Australian BBSR Rate, the Canadian BA Rate or the Base Rate, as applicable and as each such rate is defined in the 2017

ACCO Brands Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)

~~Credit Agreement, plus an "applicable rate." For~~cumulative impact of adopting ASU 2014-09. The impact to revenues for the ~~first fiscal quarter~~three months ended March 31, 2018 was immaterial as a result of 2017, the applicable rate was 2.00% per annum for Euro and Australian and Canadian dollar denominated loans, and 1.00% per annum for Base Rate loans. Thereafter, the applicable rate applied to outstanding Euro and Australian and Canadian dollar denominated loans and Base Rate loans will be based on the Company’s Consolidated Leverage Ratio (as defined in the 2017 Credit Agreement) as follows:

Consolidated
Leverage Ratio Applicable Rate on Euro/AUD/CDN Dollar Loans Applicable Rate on Base Rate Loans
> 4.00 to 1.00 2.50% 1.50%
≤ 4.00 to 1.00 and > 3.50 to 1.00 2.25% 1.25%
≤ 3.50 to 1.00 and > 3.00 to 1.00 2.00% 1.00%
≤ 3.00 to 1.00 and > 2.00 to 1.00 1.50% 0.50%
≤ 2.00 to 1.00 1.25% 0.25%
adopting ASU 2014-09.

As June 30, 2017, the applicable rate on Euro/AUD/CDN Dollar Loans was 2.00% and the applicable rate on Base rate loans was 1.00%. Undrawn amounts under the 2017 Revolving Facility are subject to a commitment fee rate of 0.25% to 0.40% per annum, depending on the Company’s Consolidated Leverage Ratio. As of June 30, 2017, the commitment fee rate was 0.35%.

~~Prepayments~~

Subject to certain conditions and specific exceptions, the 2017 Credit Agreement requires the Company to prepay outstanding amounts under the 2017 Credit Agreement under various circumstances, including (a) if sales or dispositions of certain property or assets in any fiscal year results in the receipt of net cash proceeds of $12.0 million, then an amount equal to 100%Revenue is recognized when control of the ~~net cash proceeds received in excess of such $12.0 million, and (b) with respect~~promised goods or services is transferred to ~~the AUD Term Loan A,~~our customers in an amount ~~equal to 100%~~reflective of the ~~net cash proceeds received~~consideration we expect to be receive in exchange for those goods or services. Taxes we collect concurrent with revenue producing activities are excluded from revenue. Incidental items incurred that are immaterial in the ~~disposition~~context of ~~any real property located in Australia.~~the contract are expensed. We have elected the practical expedient to not disclose contracts that have a term of 1 year or less.

Performance Obligations

At the inception of each contract, the Company assesses the products and services promised and identifies each distinct performance obligation. To identify the performance obligations, the Company considers all products and services promised regardless of whether they are explicitly stated or implied within the contract or by standard business practices.

Freight and distribution activities performed before the customer obtains control of the goods are not considered promised services under customer contracts and therefore are not distinct performance obligations. The Company ~~also would be required~~has chosen to make ~~prepayments~~an accounting policy election to account for shipping and handling activities that occur after the customer obtains control of the goods as a fulfillment activity, and therefore accrues the expense of freight and distribution in Cost of products sold when product is shipped.

Nature of our Products and Services

Products: For our products, we transfer control and recognize a sale when we either ship the product from our manufacturing facility or distribution center, procure the product from one of our vendors or upon delivery to a customer specified location depending upon the terms in the ~~event it receives amounts related~~customer agreement. For consignment arrangements, revenue is not recognized until the products are sold to the end customer. The amount of consideration we receive and revenue we recognize is impacted by incentives ("Customer Program Costs"), including sales rebates; which are generally tied to achievement of certain ~~property insurance or condemnation awards, from additional debt~~sales volume levels, in-store promotional allowances, shared media and customer catalog allowances and other ~~than debt permitted under~~cooperative advertising arrangements; and freight allowance programs, offered to our customers; and allowance for returns and discounts. We generally recognize Customer Program Costs as a deduction to gross sales at the ~~2017 Credit Agreement~~time that the associated revenue is recognized. We estimate discounts based upon an analysis of historical trends and ~~from excess cash flow~~record as ~~determined under~~reductions to "Net sales" and "Accounts receivable, net". We estimate and record a returns reserve, on a gross basis, as a reduction to "Net sales" and "Cost of products sold" with increases to "Other current liabilities" and "Inventories." We adjust our estimate of revenue when the ~~2017 Credit Agreement. The 2017 Credit Agreement also contains other customary prepayment obligations and provides for voluntary commitment reductions and prepayment~~most likely amount of ~~loans, subject~~consideration we expect to ~~certain conditions and exceptions.~~receive changes.

~~Dividends~~Service or Extended Maintenance Agreements ("EMAs"): Depending on the terms of a customer agreement, we may defer recognition of a portion of the consideration received because we have to satisfy a future obligation (e.g. EMAs). We use an observable price to determine the stand-alone selling price for separate performance obligations or a cost plus margin approach, for our separately priced service/maintenance agreements that extend mechanical and ~~share repurchases~~maintenance coverage beyond our base warranty coverage to our Print Finishing Solutions ("PFS") customers. These agreements range in duration from three months to 60 months, but are primarily one year or less. We receive payment at inception of the EMAs and recognize revenue over the term of the agreement on a straight line basis or bill on a monthly/quarterly basis. As of January 1, 2018, $5.2 million of unearned revenue associated with outstanding contracts was primarily reported in "Other current liabilities". $3.9 million of unearned revenue was recognized during the three months ended March 31, 2018. As of March 31, 2018, the amount of unearned revenue was $5.0 million. We expect to recognize approximately $4.3 million of the unearned amount in the next 12 months and $0.7 million in future periods beyond the next 12 months.

~~Under the 2017 Credit Agreement, the Company may pay dividends and/or repurchase shares in an aggregate amount not to exceed the sum of: (i) the greater~~Disaggregation of $30.0 million and 1.00% of the Company’s Consolidated Total Assets (as defined in the 2017 Credit Agreement); plus (ii) an additional amount not to exceed $75.0 million in any fiscal year (provided the Company’s Consolidated Leverage Ratio after giving pro forma effect to the restricted payment would be greater than 2.50:1.00 and less than or equal to 3.75:1.00); plus (iii) an additional amount so long as the Consolidated Leverage Ratio after giving pro forma effect to the restricted payment would be less than or equal to 2.50:1.00; plus (iv) any Net Equity Proceeds (as defined in the 2017 Credit Agreement).Revenues

~~Financial Covenants~~

In accordance with ASU 2014-09, the following table disaggregates revenue from contracts with customers into regional geographies. The ~~Company’s Consolidated Leverage Ratio as~~Company has determined that disaggregating revenue into these categories provides appropriate disclosure and achieves associated objectives to depict how the nature, amount, timing and uncertainty of ~~the end of any fiscal quarter may not exceed 3.75:1.00; provided that following the consummation of a Material Acquisition (as defined in the 2017 Credit Agreement),~~revenue and as of the end of the fiscal quarter in which such Material Acquisition occurred and as of the end of the three fiscal quarters thereafter, the maximum Consolidated Leverage Ratio level above will increasecash flows are affected by ~~0.50:1.00, provided that no more than one such increase can be in effect at any time. The Esselte Acquisition qualified as a Material Acquisition under the 2017 Credit Agreement.~~

The 2017 Credit Agreement requires the Company to maintain a Consolidated Fixed Charge Coverage Ratio (as defined in the 2017 Credit Agreement) as of the end of any fiscal quarter at or above 1.25 to 1.00.economic factors.

ACCO Brands Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)

~~Other Covenants~~The following table presents our revenue disaggregated by regional geography⁽¹⁾, based upon our reporting segments for the three months ended March 31, 2018 and ~~Restrictions~~2017:



	Three Months Ended March 31,
(in millions of dollars)	2018		2017
United States	$	144.4	$	154.7
Canada	21.2		20.2
ACCO Brands North America	165.6		174.9

ACCO Brands EMEA⁽²⁾	154.5		96.5

Australia/N.Z.	39.8		43.2
Latin America	33.5		33.2
Asia-Pacific	12.4		12.0
ACCO Brands International	85.7		88.4
Net sales	$	405.8	$	359.8

(1) Net sales are attributed to geographic areas based on the location of the selling subsidiaries.

(2) ACCO Brands EMEA is comprised largely of Europe, but also includes export sales to the Middle East and Africa.

The ~~2017 Credit Agreement contains customary affirmative and negative covenants as well as events~~following table presents our revenue disaggregated by the timing of default, including payment defaults, breach of representations and warranties, covenant defaults, cross-defaults, certain bankruptcy or insolvency events, certain ERISA-related events, changes in control or ownership and invalidity of any loan document. The 2017 Credit Agreement also establishes limitations on the aggregate amount of Permitted Acquisitions and Investments (each as defined in the 2017 Credit Agreement) that the Company and its subsidiaries may make during the term of the 2017 Credit Agreement.

~~As of and~~revenue recognition for the ~~periods~~three months ended ~~June 30, 2017 and December~~March 31, ~~2016, the Company was in compliance with all applicable loan covenants.~~2018:



	Three Months Ended March 31,
(in millions of dollars)	2018
Product and Services transferred at a point in time	$	391.4
Product and Services transferred over time	14.4
Net sales	$	405.8

~~Guarantees and Security~~

Generally, obligations under the 2017 Credit Agreement are guaranteed by certain of the Company’s existing and future subsidiaries, and are secured by substantially all of the Company’s and certain guarantor subsidiaries’ assets, subject to certain exclusions and limitations.

~~Incremental facilities~~

The 2017 Credit Agreement permits the Company to seek increases in the size of the 2017 Revolving Facility and the 2017 Term A Facility prior to maturity by up to $500.0 million in the aggregate, subject to lender commitment and the conditions set forth in the 2017 Credit Agreement.

As of June 30, 2017, there were $309.9 million in borrowings outstanding under the 2017 Revolving Facility. The remaining amount available for borrowings was $76.7 million (allowing for $13.4 million of letters of credit outstanding on that date).

5.6. Pension and Other Retiree Benefits

The components of net periodic benefit (income) cost for pension and post-retirement plans for the three ~~and six~~ months ended ~~June 30, 2017~~March 31, 2018 and ~~2016~~2017 were as follows:


	Three Months Ended June 30,																		Three Months Ended March 31,
	Pension												Post-retirement						Pension												Post-retirement
	U.S.						International												U.S.						International
(in millions of dollars)	2017			2016			2017			2016			2017			2016			2018			2017			2018			2017			2018			2017
Service cost	$	0.4		$	0.3		$	0.5		$	0.2		$	—		$	—		$	0.4		$	0.3		$	0.5		$	0.3		$	—		$	—
Interest cost	1.7			1.8			3.5			2.7			0.1			0.1			1.7			1.8			3.4			2.9			—			—
Expected return on plan assets	(3.0		)	(3.0		)	(5.6		)	(4.6		)	—			—			(2.9		)	(3.1		)	(5.9		)	(4.9		)	—			—
Amortization of net loss (gain)	0.5			0.5			0.8			0.6			(0.1		)	(0.1		)	0.6			0.5			0.9			0.7			(0.1		)	(0.1		)
Amortization of prior service cost	0.1			0.1			—			—			—			—
Net periodic benefit (income) cost	$	(0.3	)	$	(0.3	)	$	(0.8	)	$	(1.1	)	$	—		$	—

	Six Months Ended June 30,
	Pension Benefits												Post-retirement
	U.S.						International
(in millions of dollars)	2017			2016			2017			2016			2017			2016
Service cost	$	0.7		$	0.6		$	0.8		$	0.4		$	—		$	—
Interest cost	3.5			3.6			6.4			5.4			0.1			0.2
Expected return on plan assets	(6.1		)	(6.0		)	(10.5		)	(9.2		)	—			—
Amortization of net loss (gain)	1.0			1.0			1.5			1.2			(0.2		)	(0.2		)
Amortization of prior service cost	0.2			0.2			—			—			—			—
Net periodic benefit (income) cost	$	(0.7	)	$	(0.6	)	$	(1.8	)	$	(2.2	)	$	(0.1	)	$	—
Amortization of prior service cost (credit)																			0.1			0.1			—			—			—			—
Net periodic benefit (income) expense⁽¹⁾																			$	(0.1	)	$	(0.4	)	$	(1.1	)	$	(1.0	)	$	(0.1	)	$	(0.1	)


(1)	The components, other than service cost, are included in the line "Non-operating pension income" in the Consolidated Statements of Income.

We expect to contribute approximately $20.3 million to our defined benefit plans in 2018. For the three months ended March 31, 2018, we have already contributed $11.3 million to these plans.

ACCO Brands Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)

~~We expect to contribute approximately~~ ~~$19.8 million~~ ~~to our defined benefit plans in~~ ~~2017, which includes approximately $8.6 million for Esselte defined benefit plans. For the~~ ~~six~~ ~~months ended~~ ~~June 30, 2017, we contributed~~ ~~$10.8 million~~ ~~to these plans.~~

The Esselte Acquisition added $171.5 million in pension obligations, as of January 31, 2017. The obligations under the acquired German pension plan represent $133.7 million of this amount. German pension law does not require pre-funding of pension obligations and thus the plan is not funded.

6.7. Stock-Based Compensation

The following table summarizes our stock-based compensation expense (including stock options, restricted stock units ("RSUs") and performance stock units ("PSUs")) for the three ~~and six~~ months ended ~~June 30, 2017~~March 31, 2018 and ~~2016~~2017:


	Three Months Ended June 30,				Six Months Ended June 30,				Three Months Ended March 31,
(in millions of dollars)	2017		2016		2017		2016		2018		2017
Stock option compensation expense	$	0.6	$	0.7	$	1.2	$	1.6	$	0.5	$	0.6
RSU compensation expense	1.7		1.6		2.7		2.6		0.9		1.0
PSU compensation expense	3.1		2.3		3.9		3.7		1.8		0.8
Total stock-based compensation expense	$	5.4	$	4.6	$	7.8	$	7.9	$	3.2	$	2.4

~~During the~~ ~~second~~ ~~quarter of 2017, the Company's Board of Directors approved the annual stock compensation grant to eligible non-employee directors, which consisted of 69,424 RSUs.~~

We generally recognize compensation expense for stock-based awards ratably over the vesting period. ~~Stock-based~~During the first quarter of 2018, the Company's Board of Directors approved a stock compensation ~~expense for each~~grant which consisted of ~~the three~~769,477 stock options, 387,789 RSUs and ~~six months ended June 30, 2017 and 2016 includes $0.8 million of expense related to stock awards granted to eligible non-employee directors, which were fully vested on the grant date.~~ 747,996 PSUs.

The following table summarizes our unrecognized compensation expense and the weighted-average period over which the expense will be recognized as of ~~June 30, 2017:~~March 31, 2018:


	June 30, 2017		March 31, 2018
	Unrecognized	Weighted Average	Unrecognized	Weighted Average
	Compensation	Years Expense To Be	Compensation	Years Expense To Be
(in millions of dollars, except weighted average years)	Expense	Recognized Over	Expense	Recognized Over
Stock options	$4.0	2.0	$5.0	2.6
RSUs	$6.8	2.2	$8.6	2.4
PSUs	$15.0	1.9	$17.8	2.1

7.8. Inventories

~~Inventories are stated at the lower of cost or net realizable value.~~ The components of inventories were as follows:


(in millions of dollars)	June 30, 2017		December 31, 2016		March 31, 2018		December 31, 2017
Raw materials	$	44.0	$	30.3	$	45.3	$	38.2
Work in process	4.5		3.0		4.5		4.1
Finished goods	283.9		176.7		244.7		211.9
Total inventories	$	332.4	$	210.0	$	294.5	$	254.2

8.9. Goodwill and Identifiable Intangible Assets

Goodwill

As more fully described in the Company’s ~~2016~~2017 Annual Report on Form 10-K, we test goodwill for impairment at least annually and on an interim basis if an event or circumstance indicates that it is more likely than not that an impairment loss has

~~ACCO Brands Corporation and Subsidiaries~~

~~Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)~~

been incurred. The Company performed this annual assessment, on a qualitative basis, as allowed by GAAP, in the second quarter of 2017 and concluded that no impairment existed.

Effective in the first quarter of 2017, as a result of the Esselte Acquisition, the Company realigned its operating structure, which impacted its determination of its business segments for financial reporting purposes. As a result, the Company no longer reports the results of its Computer Products Group as a separate segment. See "Note 15. Information on Business Segments" for further details on the realigned segments. The Company's three realigned segments are as follows:



~~Operating Segment~~		~~Geography~~
~~ACCO Brands North America~~		~~United States and Canada~~
~~ACCO Brands EMEA~~		~~Europe, Middle East and Africa~~
~~ACCO Brands International~~		~~Australia, Latin America and Asia-Pacific~~

~~Goodwill was re-allocated between the realigned segments based on their relative fair values. There were no impairment charges recognized as a result of this change.~~

~~We have recast our reportable segments for the period presented below to reflect this change.~~

~~Changes in the net carrying amount of goodwill by segment were as follows:~~

(in millions of dollars) ACCO
Brands
North America ACCO
Brands
EMEA ACCO
Brands
International Total

Balance at December 31, 2016 $ 380.7
$ 39.5
$ 166.9
$ 587.1
Esselte Acquisition (3.4 ) 115.5
(1.4 ) 110.7
Translation —
(10.5 ) —
(10.5 )
Balance at June 30, 2017 $ 377.3
$ 144.5
$ 165.5
$ 687.3

~~The goodwill balance includes $215.1 million of accumulated impairment losses, which occurred prior to December 31, 2016.~~

Goodwill has been recorded on our balance sheet related to the Esselte Acquisition and represents the excess of the cost of the Esselte Acquisition when compared to the fair value estimate of the net assets acquired on January 31, 2017 (the date of the Esselte Acquisition). See "Note 3. Acquisition," for details on the preliminary calculation of the goodwill acquired in the Esselte Acquisition.

~~Identifiable Intangible Assets~~

The identifiable intangible assets of $274.0 million acquired in the Esselte Acquisition include amortizable customer relationships, indefinite lived and amortizable trade names and patents, which have been recorded at their preliminary estimated fair values. We are continuing our review of our fair value estimate of assets acquired and liabilities assumed during the measurement period, which will conclude as soon as we receive the information we are seeking about facts and circumstances that existed as of the acquisition date, or learn that more information is not available. The fair value of the trade names and patents was determined using the relief from royalty method, which is based on the present value of royalty fees derived from projected revenues. The fair value of the customer relationships was determined using the multi-period excess earnings method which is based on the present value of the projected after-tax cash flows.

ACCO Brands Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)

Amortizable customer relationships, trade names and patents are expected to be amortized over lives ranging from 10 to 30 years from the Esselte Acquisition date of January 31, 2017. The customer relationships will be amortized on an accelerated basis. The preliminary allocations of the acquired identifiable intangibles acquiredChanges in the ~~Esselte Acquisition are~~net carrying amount of goodwill by segment were as follows:

(in millions of dollars) Fair Value Remaining Useful Life Ranges
Trade name - indefinite lived $ 117.0
Indefinite
Trade names - amortizable 52.0
15-30 Years
Customer relationships 100.4
15 Years
Patents 4.6
10 Years
Total identifiable intangibles acquired $ 274.0



(in millions of dollars)	ACCO Brands North America		ACCO Brands EMEA			ACCO Brands International		Total
(in millions of dollars)	ACCO Brands North America		ACCO Brands EMEA			ACCO Brands International		Total
Balance at December 31, 2017	$	375.6	$	129.4		$	165.3	$	670.3
Translation	—		(2.4		)	—		(2.4		)
Balance at March 31, 2018	$	375.6	$	127.0		$	165.3	$	667.9

The goodwill balance is net of $215.1 million of accumulated impairment losses.

Identifiable Intangible Assets

The gross carrying value and accumulated amortization by class of identifiable intangible assets as of ~~June 30, 2017~~March 31, 2018 and December 31, ~~2016~~2017 were as follows:


	June 30, 2017								December 31, 2016								March 31, 2018								December 31, 2017
(in millions of dollars)	Gross Carrying Amounts		Accumulated Amortization				Net Book Value		Gross Carrying Amounts		Accumulated Amortization				Net Book Value		Gross Carrying Amounts		Accumulated Amortization				Net Book Value		Gross Carrying Amounts		Accumulated Amortization				Net Book Value
Indefinite-lived intangible assets:
Trade names	$	594.5	$	(44.5	)	⁽¹⁾	$	550.0	$	483.3	$	(44.5	)	⁽¹⁾	$	438.8	$	603.1	$	(44.5	)	⁽¹⁾	$	558.6	$	599.5	$	(44.5	)	⁽¹⁾	$	555.0
Amortizable intangible assets:
Trade names	190.6		(54.0		)		136.6		121.2		(48.8		)		72.4		196.6		(62.1		)		134.5		195.3		(59.4		)		135.9
Customer and contractual relationships	236.7		(86.8		)		149.9		127.5		(73.8		)		53.7		245.4		(105.7		)		139.7		243.0		(99.3		)		143.7
Patents	5.6		(0.2		)		5.4		0.8		—				0.8		5.9		(0.6		)		5.3		5.8		(0.5		)		5.3
Subtotal	432.9		(141.0		)		291.9		249.5		(122.6		)		126.9		447.9		(168.4		)		279.5		444.1		(159.2		)		284.9
Total identifiable intangibles	$	1,027.4	$	(185.5	)		$	841.9	$	732.8	$	(167.1	)		$	565.7	$	1,051.0	$	(212.9	)		$	838.1	$	1,043.6	$	(203.7	)		$	839.9


(1)	Accumulated amortization prior to the adoption of authoritative guidance on goodwill and indefinite-lived intangible assets, at which time further amortization ceased.

The Company’s intangible amortization expense was ~~$9.0~~$9.3 million and ~~$5.4~~$8.0 million for the three months ended ~~June 30,~~March 31, 2018 and 2017, ~~and 2016, respectively, and $17.0 million and $10.1 million for the six months ended June 30, 2017 and 2016,~~ respectively.

Estimated amortization expense for amortizable intangible assets as of ~~June 30, 2017~~March 31, 2018 for the current year and the next five years are as follows:


(in millions of dollars)	2017		2018		2019		2020		2021		2022		2018		2019		2020		2021		2022		2023
Estimated amortization expense⁽²⁾	$	33.9	$	31.9	$	28.6	$	25.2	$	21.9	$	18.5	$	34.3	$	30.8	$	27.3	$	23.8	$	20.3	$	18.2


(2)	Actual amounts of amortization expense may differ from estimated amounts due to changes in foreign currency exchange rates, additional intangible asset acquisitions, impairment of intangible assets, accelerated amortization of intangible assets and other events.

We test indefinite-lived intangibles for impairment at least annually and on an interim basis if an event or circumstance indicates that it is more likely than not that an impairment loss has been incurred. We performed this annual assessment, on a qualitative basis, as allowed by GAAP, for the majority of indefinite-lived trade names in the second quarter of 2017 and concluded that no impairment existed. For ~~two of our indefinite-lived trade names that are not substantially above their carrying values,~~the Mead^® ~~and Hilroy~~^®,indefinite-lived trade name that is not substantially above its carrying values, we performed a quantitative ~~tests (Step 1)~~test in the second quarter of 2017. ~~The following~~A 1.5% long-term growth ~~rates~~rate and a 10.5% discount ~~rates~~rate were ~~used: 1.5% and 10.5% for~~used. We concluded that the Mead^® ~~and 1.5% and 11.0% for Hilroy~~^®~~, respectively. We concluded that neither~~trade name was not impaired. The fair value of the Mead^® ~~nor Hilroy~~trade name was less than 30% above its carrying value as of the second quarter of 2017 test. As of March 31, 2018, the carrying value of the Mead^® trade name was ~~impaired.~~$113.3 million.

ACCO Brands Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)

As of June 1, 2017, we changed the indefinite-lived Hilroy trade name to an amortizable intangible asset. The change was made as a result of decisions regarding the Company's future use of the trade name. The Company commenced amortizing the Hilroy trade name June 1, 2017 on a straight-line basis over a life of 30 years.

~~In the fourth quarter of 2015, we performed a quantitative test, as we identified the recession in Brazil as a triggering event related to the trade name for Tilibra~~^®, our brand primarily used in Brazil. We concluded that while no impairment existed, the trade name's fair value has been significantly reduced. Key financial assumptions utilized to determine the fair value of Tilibra^® ~~included a long-term growth rate of 6.5% and a 14.5% discount rate. In 2016, the Tilibra~~^® trade name performed in line with the forecast used in the fourth quarter of 2015 quantitative test; however, the economic conditions in Brazil could deteriorate further triggering additional future reviews. We continue to evaluate, at least annually, on a qualitative basis and have concluded that no impairment exists. The discount rate has now fallen to 12.5% as of the second quarter of 2017.

~~The fair values of Mead~~^®~~and Tilibra~~^® ~~trade names were less than 30% above their carrying values as of their last quantitative tests (Step 1). As of June 30, 2017 the carrying values of those trade names were as follows: Mead~~^® ~~($113.3 million) and Tilibra~~^®~~($65.4 million).~~

9.10. Restructuring

~~The~~During the first quarter of 2018, the Company recorded restructuring expenses of ~~$12.3~~$4.7 million, ~~for the three months ended June 30, 2017, and $13.8 million for six months ended June 30, 2017,~~ primarily related to ~~the consolidation and integration of ACCO Brands and Esselte operations worldwide. The remaining charges relate~~additional changes to ~~the integration of ACCO Brands and Pelikan Artline operations in Australia, and the change in~~ the operating structure inof the ACCO Brands North America ~~including~~segment and the continued integration of Esselte within the ACCO Brands EMEA segment. Not included in these numbers are exit costs and liabilities associated with exiting a leased facility of $2.4 million and a contract related termination of $0.1 million that were not recorded yet, pursuant to GAAP rules.

During 2017, cost savings initiatives undertaken by the Company in 2016 to further enhance its operations in the ACCO Brands North America segment were expanded to include the realignment of the operating structure of our former Computer Products ~~Group.~~Group and other projects to enhance the future long-term performance of the North America business.

~~During 2016,~~For the ~~Company initiated cost savings plans related to the consolidation~~three months ended March 31, 2018 and ~~integration~~2017, we recorded restructuring charges of ~~the acquired Pelikan Artline business into the Company's existing Australian~~$4.7 million and New Zealand business. In addition, the Company initiated additional cost savings plans to further enhance its North American operations. Expenses were recorded in association with these actions of $4.4$1.5 million, ~~during the first six months of 2016.~~respectively.

The summary of the activity in the restructuring ~~accounts~~account for the ~~six~~three months ended ~~June 30, 2017~~March 31, 2018 was as follows:


(in millions of dollars)	Balance at December 31, 2016		Provision		Cash Expenditures			Esselte Acquisition		Non-cash Items/ Currency Change		Balance at June 30, 2017		Balance at December 31, 2017		Provision		Cash Expenditures			Non-cash Items/ Currency Change			Balance at March 31, 2018
Employee termination costs⁽¹⁾	$	1.4	$	11.6	$	(1.8	)	$	1.4	$	0.3	$	12.9	$	12.0	$	3.8	$	(2.6	)	$	0.3		$	13.5
Termination of lease agreements⁽²⁾	0.1		1.3		(0.7		)	2.0		0.1		2.8		0.8		0.9		(0.7		)	—			1.0
Other(3)	—		0.9		(0.2		)	0.1		—		0.8		0.5		—		(0.1		)	(0.1		)	0.3
Total restructuring liability	$	1.5	$	13.8	$	(2.7	)	$	3.5	$	0.4	$	16.5	$	13.3	$	4.7	$	(3.4	)	$	0.2		$	14.8

(1) We expect the remaining ~~$12.9~~$13.5 million of employee termination costs to be substantially paid in the next ~~twelve~~fifteen months.

(2) We expect the remaining ~~$2.8~~$1.0 million termination of lease ~~termination~~ costs to be substantially paid in the next ~~twenty-four~~twelve months.

(3) We expect the remaining $0.3 million of other costs, principally contract exit costs, to be substantially paid in the next nine months.

The summary of the activity in the restructuring ~~accounts~~account for the ~~six~~three months ended ~~June 30, 2016~~March 31, 2017 was as follows:


(in millions of dollars)	Balance at December 31, 2015		Provision		Cash Expenditures			Esselte Acquisition		Non-cash Items/ Currency Change		Balance at June 30, 2016		Balance at December 31, 2016		Esselte Acquisition (4)		Provision		Cash Expenditures			Balance at March 31, 2017
Employee termination costs	$	0.9	$	4.4	$	(3.3	)	$	—	$	0.1	$	2.1	$	1.4	$	1.4	$	1.3	$	(0.4	)	$	3.7
Termination of lease agreements	0.1		—		(0.1		)	—		—		—		0.1		2.0		0.2		(0.1		)	2.2
Other														—		0.1		—		(0.1		)	—
Total restructuring liability	$	1.0	$	4.4	$	(3.4	)	$	—	$	0.1	$	2.1	$	1.5	$	3.5	$	1.5	$	(0.6	)	$	5.9

(4) Restructuring liabilities assumed in the Esselte Acquisition.

ACCO Brands Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)

~~10.~~11. Income Taxes

The reconciliation of income taxes for the three ~~and six~~ months ended ~~June 30,~~March 31, 2018 and 2017, ~~and 2016,~~ computed at the U.S. federal statutory income tax rate, compared to our effective income tax rate, was as follows:


	Three Months Ended June 30,						Six Months Ended June 30,						Three Months Ended March 31,
(in millions of dollars)	2017			2016			2017			2016			2018			2017
Income tax expense computed at U.S. statutory income tax rate (35%)	$	13.3		$	25.2		$	13.3		$	24.3
Income tax expense computed at U.S. statutory income tax rate (21% and 35%, respectively)													$	1.3		$	—
Interest on Brazilian Tax Assessment	0.6			0.7			1.3			1.3			0.3			0.7
Realized foreign exchange net loss on intercompany loans	—			(3.3		)	—			(10.7		)
Partial release of reserve for the Brazilian Tax Assessment													(5.6		)	—
Excess tax benefit from stock-based compensation	(0.2		)	—			(5.5		)	—			(2.5		)	(5.3		)
Revaluation of previously held equity interest	—			(14.2		)	—			(14.2		)
Net operating losses not benefited													1.0			0.4
Miscellaneous	0.9			1.6			2.0			1.9			1.2			0.7
Income tax expense as reported	$	14.6		$	10.0		$	11.1		$	2.6
Income tax benefit as reported													$	(4.3	)	$	(3.5	)
Effective tax rate	38.3		%	13.9		%	29.1		%	3.8		%	NM			NM

For the ~~six~~three months ended ~~June 30,~~March 31, 2018, we recorded an income tax benefit of $4.3 million on income before taxes of $6.1 million. The net tax benefit for the three months ended March 31, 2018 was primarily due to (1) the partial release of $5.6 million of the reserve for the Brazil Tax Assessment (see below) due to the expiration of the statute of limitations, and (2) excess tax benefit of $2.5 million from the realization of stock-based compensation related tax deductions. Additionally, the low effective tax rate for 2018 includes tax impacts attributable to the U.S. Tax Act, which was signed into law on December 22, 2017.

For the three months ended March 31, 2017, we recorded an income tax ~~expense~~benefit of ~~$11.1~~$3.5 million on income before taxes of ~~$38.2~~$0.1 million. The low effective tax rate for the ~~six~~three months ended ~~June 30,~~March 31, 2017 was primarily due to the excess tax benefit of ~~$5.5~~$5.3 million from the realization of stock-based compensation related tax ~~deductions, associated with the adoption of ASU No. 2016-09. See "Note 2. Recent Accounting Pronouncements" for details on the adoption of this new standard.~~

For the six months ended June 30, 2016, we recorded an income tax expense of $2.6 million on income before taxes of $69.3 million. The low effective tax rate in 2016 was primarily due to the following: 1) under Australian tax laws, there is no income tax on the gain arising from the PA Acquisition due to the revaluation of the Company's previously held equity interest to fair value; and 2) tax losses on foreign exchange on the repayment of intercompany loans, for which the pre-tax effect was recorded in equity.deductions.

The U.S. federal statute of limitations remains open for the year ~~2013~~2014 and forward. Foreign and U.S. state jurisdictions have statutes of limitations generally ranging from 2 to 5 years. Years still open to examination by foreign tax authorities in major jurisdictions include Australia (2013 forward), Brazil ~~(2011~~(2012 forward), Canada (2009 forward), Germany ~~(2010~~(2011 forward), Sweden ~~(2010~~(2011 forward) and the U.K. ~~(2015~~(2016 forward). We are currently under examination in certain foreign jurisdictions.

Tax Reform

On December 22, 2017, the U.S. Tax Act was signed into law. The ~~Esselte Acquisition added $85.3~~U.S. Tax Act makes broad and complex changes to the U.S. tax code, including, but not limited to: (i) reducing the future U.S. federal corporate tax rate from 35 percent to 21 percent; (ii) requiring companies to pay a one-time transition tax on certain undistributed earnings of foreign subsidiaries (the "Transition Toll Tax"); and (iii) bonus depreciation that will allow for full expensing of qualified property.

The U.S. Tax Act also established new tax laws that will affect 2018, including, but not limited to: (i) the reduction of the U.S. federal corporate tax rate discussed above; (ii) a general elimination of U.S. federal income taxes on dividends from foreign subsidiaries; (iii) a new provision designed to tax global intangible low-taxed income ("GILTI"); (iv) the repeal of the domestic production activity deductions; (v) limitations on the deductibility of certain executive compensation; (vi) limitations on the use of foreign tax credits to reduce the U.S. income tax liability; and (vii) a new provision that allows a domestic corporation an immediate deduction for a portion of its foreign derived intangible income ("FDII").

The SEC staff issued Staff Accounting Bulletin ("SAB") 118, which provides guidance on accounting for the tax effects of the U.S. Tax Act. SAB 118 provides a measurement period that should not extend beyond one year from the enactment date for companies to complete the related accounting under ASC 740, Accounting for Income Taxes. In accordance with SAB 118, a company must reflect the income tax effects of those aspects of the U.S. Tax Act for which the accounting under ASC 740 is complete. To the extent that a company’s accounting for a certain income tax effect of the U.S. Tax Act is incomplete, but it is able to determine a reasonable estimate, it must record a provisional estimate in the financial statements. If a company cannot determine a provisional estimate to be included in the financial statements, it should continue to apply ASC 740 on the basis of the provisions of the tax laws that were in effect immediately before the enactment of the U.S. Tax Act.

ACCO Brands Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)

The Company’s accounting for certain components of the U.S. Tax Act is not complete. However, the Company was able to make reasonable estimates of the effects and recorded provisional estimates for these items. Changes in tax rates and tax laws are accounted for in the period of enactment. Therefore, during the year ended December 31, 2017, we recorded a net tax benefit totaling $25.7 million related to our provisional estimate of the impact of the U.S. Tax Act. The benefit consists of an expense of $24.0 million, net of foreign tax credit carryforwards of $14.0 million, for the one-time Transition Toll Tax and a net benefit of $49.7 million in ~~additional deferred tax liabilities and $96.5 million in additional~~connection with the revaluation of the deferred tax assets asand liabilities resulting from the decrease in the U.S. corporate tax rate.

During the three months ended March 31, 2018, we have made no adjustments to the provisional amounts recorded at December 31, 2017. However, the ultimate impact of ~~January~~the U.S. Tax Act may differ from the current estimates, possibly materially, due to changes in interpretations and assumptions the Company has made, future guidance that may be issued by the U.S. Treasury Department, the Internal Revenue Service, and other standard-setting bodies, or actions the Company may take. Adjustments to the provisional amounts may materially affect our provision for income taxes and effective tax rate in the period in which the adjustments are made. Accounting for the tax effects of the U.S. Tax Act will be completed prior to December 31, ~~2017.~~2018.

Income Tax Assessment - Tilibra

In connection with our May 1, 2012 acquisition of the Mead Consumer and Office Products Business ("Mead C&OP"), we assumed all of the tax liabilities for the acquired foreign operations including Tilibra Produtos de Papelaria Ltda. ("Tilibra"). In December of 2012, the Federal Revenue Department of the Ministry of Finance of Brazil ("FRD") issued a tax assessment (the "Brazilian Tax Assessment") against Tilibra, which challenged the tax deduction of goodwill from Tilibra's taxable income for the year ~~2007.~~2007 (the "First Assessment"). A second assessment challenging the deduction of goodwill from Tilibra's taxable income for the years 2008, 2009 and 2010 was issued by FRD in October ~~2013.~~

2013 (the "Second Assessment"). Tilibra is disputing both of the tax ~~assessments~~assessments.

Recently, the final administrative appeal of the Second Assessment was decided against the Company. We intend to challenge this decision in court. In connection with the judicial challenge, we are required to post security to guarantee payment of the Second Assessment, which represents $24.6 million of the current reserve, should we not prevail. The First Assessment is still being challenged through established administrative procedures.

We believe we have meritorious defenses and intend to vigorously contest these matters; however, there can be no assurances that we will ultimately prevail. ~~We are still in the administrative stages of the process to challenge the FRD's tax assessments, and the~~The ultimate outcome will not be determined until the Brazilian tax appeal process is complete, which is expected to take a number of years. In addition, Tilibra's ~~2011-2012~~2012 tax ~~years remain~~year remains open and subject to audit, and there can be no assurances that we will not receive additional tax assessments regarding the goodwill for ~~one or both of those years.~~2012. The time limit for issuing an assessment for ~~2011 expires~~2012 will expire in January ~~2018.~~2019. If the FRD's initial position is ultimately sustained, the amount assessed would materially and adversely affect our cash flow in the year of settlement.

~~ACCO Brands Corporation and Subsidiaries~~

~~Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)~~

Because there is no settled legal precedent on which to base a definitive opinion as to whether we will ultimately prevail, we consider the outcome of this dispute to be uncertain. Since it is not more likely than not that we will prevail, in 2012, we recorded a reserve in the amount of $44.5 million (at December 31, 2012 exchange rates) in consideration of this contingency, of which $43.3 million was recorded as an adjustment to the purchase price and which included the 2007-2012 tax years plus penalties and interest through December 2012. Included in this reserve is an assumption of penalties at 75%, which is the standard penalty. While there is a possibility that a penalty of 150% could be imposed in connection with the First Assessment, based on the facts in our case and existing precedent, we believe the likelihood of a 150% penalty ~~being imposed~~ is not more likely than ~~not. In the meantime, we~~not as of March 31, 2018. We will continue to actively monitor administrative and judicial court decisions and evaluate their impact, if any, on our legal assessment of the ultimate outcome of our case. In addition, we will continue to accrue interest related to this contingency until such time as the outcome is known or until evidence is presented that we are more likely than not to prevail. The time limit for issuing an assessment for 2011 expired in January 2018 and we did not receive an assessment; we have therefore reversed $5.6 million of reserves related to 2011. During the three months ended ~~June 30,~~March 31, 2018 and 2017, ~~and 2016,~~ we accrued additional interest as a charge to current income tax expense of ~~$0.6~~$0.3 million and $0.7 ~~million, respectively and for the six months ended June 30, 2017 and 2016, we accrued additional interest of $1.3 million and $1.3~~ million, respectively. At current exchange rates, our accrual through ~~June 30, 2017,~~March 31, 2018, including tax, penalties and interest is ~~$38.0~~$33.4 million.

~~11.~~ACCO Brands Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)

12. Earnings per Share

Total outstanding shares as of ~~June 30, 2017~~March 31, 2018 and ~~2016~~2017 were ~~109.2~~107.8 million and ~~107.2~~109.5 million, respectively. Under our stock repurchase program, for the three ~~and six~~ months ended ~~June 30, 2017~~March 31, 2018 we repurchased and retired ~~0.5~~0.8 million shares. No shares were repurchased during the three ~~and six~~ months ended ~~June 30, 2016.~~March 31, 2017. For each of the ~~six~~three months ended ~~June 30,~~March 31, 2018 and 2017, ~~and 2016,~~ we acquired 0.6 million and 0.7 million shares, ~~of treasury shares~~respectively related to tax withholding for share-based compensation. The calculation of basic earnings per share of common ~~share~~stock is based on the weighted average number of shares of common ~~shares~~stock outstanding in the year, or period, over which they were outstanding. Our calculation of diluted earnings per share of common ~~share~~stock assumes that any shares of common ~~shares~~stock outstanding were increased by shares that would be issued upon exercise of those stock units for which the average market price for the period exceeds the exercise price less the shares that could have been purchased by the Company with the related proceeds, including compensation expense measured but not yet recognized.


	Three Months Ended June 30,		Six Months Ended June 30,		Three Months Ended March 31,
(in millions)	2017	2016	2017	2016	2018	2017
Weighted-average number of common shares outstanding — basic	109.5	107.1	108.9	106.6
Weighted-average number of shares of common stock outstanding - basic					106.8	108.3
Stock options	1.4	0.8	1.4	0.5	1.2	1.5
Restricted stock units	1.0	1.1	1.8	1.5	2.0	2.6
Adjusted weighted-average shares and assumed conversions — diluted	111.9	109.0	112.1	108.6	110.0	112.4

Awards of potentially dilutive shares of common stock, which have exercise prices that were higher than the average market price during the period, are not included in the computation of dilutive earnings per share as their effect would have been anti-dilutive. For the three ~~and six~~ months ended ~~June 30,~~ March 31, 2018 and 2017 ~~these~~, the number of anti-dilutive shares were approximately ~~3.3~~2.8 million and ~~3.0~~2.3 million, respectively. ~~For the three and six months ended June 30, 2016. these shares were approximately 3.8 million and 6.4 million, respectively.~~

~~12.~~13. Derivative Financial Instruments

We are exposed to various market risks, including changes in foreign currency exchange rates and interest rate changes. We enter into financial instruments to manage and reduce the impact of these risks, not for trading or speculative purposes. The counterparties to these financial instruments are major financial institutions. We continually monitor our foreign currency exposures in order to maximize the overall effectiveness of our foreign currency hedge positions. Principal currencies hedged include the U.S. dollar, Euro, Australian dollar, Canadian dollar, Swedish krona, British pound and Japanese ~~Yen.~~yen. We are subject to credit risk, which relates to the ability of counterparties to meet their contractual payment obligations or the potential non-performance by counterparties to financial instrument contracts. Management continues to monitor the status of our counterparties and will take action, as appropriate, to further manage our counterparty credit risk. There are no credit contingency features in our derivative financial instruments.

When hedge accounting is applicable, on the date we enter into a derivative, the derivative is designated as a hedge of the identified exposure. We measure the effectiveness of our hedging relationships both at hedge inception and on an ongoing basis.

~~ACCO Brands Corporation and Subsidiaries~~

~~Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)~~

Forward Currency Contracts

We enter into forward foreign currency contracts with third parties to reduce the effect of fluctuating foreign currencies, primarily on foreign denominated inventory purchases and intercompany loans. The majority of the Company’s exposure to local currency movements is in Europe ~~(both~~(the Euro, the ~~Euro~~Swedish krona and the British pound), Australia, Canada, Brazil, ~~Mexico~~ and ~~Japan.~~Mexico.

Forward currency contracts are used to hedge foreign denominated inventory purchases for Europe, Australia, Canada and Japan, and are designated as cash flow hedges. Unrealized gains and losses on these contracts ~~for inventory purchases~~ are deferred in accumulated other comprehensive income (loss) ("AOCI") until the contracts are settled and the underlying hedged transactions relating to inventory purchases are recognized, at which time the deferred gains or losses will be reported in the "Cost of products sold" line in the "Consolidated Statements of Income." As of ~~June 30, 2017~~March 31, 2018 and December 31, ~~2016,~~2017, we had cash-flow-designated foreign exchange contracts outstanding with a U.S. dollar equivalent notional value of ~~$71.8~~$119.9 million and ~~$76.5~~$93.5 million, respectively.

Forward currency contracts used to hedge foreign denominated intercompany loans are not designated as hedging instruments. Gains and losses on these derivative instruments are recognized within "Other ~~income,~~(income) expense, net" in the "Consolidated

ACCO Brands Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)

Statements of Income" and are largely offset by the change in the current translated value of the hedged item. The periods of the forward foreign exchange contracts correspond to the periods of the hedged transactions, and do not extend beyond ~~June 2018,~~March 2019, except for one relating to intercompany loans which extends to December 2020. As of ~~June 30, 2017~~March 31, 2018 and December 31, ~~2016,~~2017, we had undesignated foreign exchange contracts outstanding with a U.S. dollar equivalent notional value of ~~$301.7~~$96.1 million and ~~$52.1~~$95.0 million, respectively.

The following table summarizes the fair value of our derivative financial instruments as of ~~June 30, 2017~~March 31, 2018 and December 31, ~~2016~~:2017:


	Fair Value of Derivative Instruments										Fair Value of Derivative Instruments
	Derivative Assets					Derivative Liabilities					Derivative Assets					Derivative Liabilities
(in millions of dollars)	Balance Sheet Location	June 30, 2017		December 31, 2016		Balance Sheet Location	June 30, 2017		December 31, 2016		Balance Sheet Location	March 31, 2018		December 31, 2017		Balance Sheet Location	March 31, 2018		December 31, 2017
Derivatives designated as hedging instruments:
Foreign exchange contracts	Other current assets	$	0.3	$	4.0	Other current liabilities	$	2.0	$	—	Other current assets	$	1.8	$	0.5	Other current liabilities	$	0.7	$	0.5
Derivatives not designated as hedging instruments:
Foreign exchange contracts	Other current assets	0.1		0.4		Other current liabilities	0.4		0.3		Other current assets	0.4		0.4		Other current liabilities	1.2		0.7
Foreign exchange contracts	Other non-current assets	12.7		—		Other non-current liabilities	12.7		—		Other non-current assets	32.2		24.2		Other non-current liabilities	32.2		24.2
Total derivatives		$	13.1	$	4.4		$	15.1	$	0.3		$	34.4	$	25.1		$	34.1	$	25.4

The following tables summarize the pre-tax effect of our derivative financial instruments on the condensed consolidated financial statements for the three months ended March 31, 2018 and 2017:



	The Effect of Derivative Instruments in Cash Flow Hedging Relationships on the Consolidated Financial Statements
	Amount of Gain (Loss) Recognized in AOCI (Effective Portion)						Location of (Gain) Loss Reclassified from AOCI to Income	Amount of (Gain) Loss Reclassified from AOCI to Income (Effective Portion)
	Three Months Ended March 31,							Three Months Ended March 31,
(in millions of dollars)	2018			2017				2018		2017
Cash flow hedges:
Foreign exchange contracts	$	(0.3	)	$	(1.5	)	Cost of products sold	$	1.2	$	(1.1	)



	The Effect of Derivatives Not Designated as Hedging Instruments on the Consolidated Statements of Operations
	Location of (Gain) Loss Recognized in Income on Derivatives	Amount of (Gain) Loss Recognized in Income
		Three Months Ended March 31,
(in millions of dollars)		2018		2017
Foreign exchange contracts	Other (income) expense, net	$	0.4	$	(0.8	)

ACCO Brands Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)

~~The following tables summarize the pre-tax effect of our derivative financial instruments on the condensed consolidated financial statements for the~~ ~~three and six~~ ~~months ended~~ ~~June 30, 2017~~ ~~and~~ ~~2016~~:

The Effect of Derivative Instruments in Cash Flow Hedging Relationships on the Condensed Consolidated Financial Statements
Amount of Gain (Loss) Recognized in OCI (Effective Portion) Location of (Gain) Loss Reclassified from OCI to Income Amount of (Gain) Loss
Reclassified from AOCI to Income (Effective Portion)
Three Months Ended June 30, Three Months Ended June 30,
(in millions of dollars) 2017 2016 2017 2016
Cash flow hedges:
Foreign exchange contracts $ (1.7 ) $ (0.8 ) Cost of products sold $ (0.5 ) $ 1.5

The Effect of Derivative Instruments in Cash Flow Hedging Relationships on the Condensed Consolidated Financial Statements
Amount of Gain (Loss) Recognized in OCI (Effective Portion) Location of (Gain) Loss Reclassified from OCI to Income Amount of (Gain) Loss
Reclassified from AOCI to Income (Effective Portion)
Six Months Ended June 30, Six Months Ended June 30,
(in millions of dollars) 2017 2016 2017 2016
Cash flow hedges:
Foreign exchange contracts $ (3.2 ) $ (3.8 ) Cost of products sold $ (1.6 ) $ 0.8

The Effect of Derivatives Not Designated as Hedging Instruments on the Condensed Consolidated Statements of Operations
Location of (Gain) Loss Recognized in
Income on Derivatives Amount of (Gain) Loss
Recognized in Income Amount of (Gain) Loss
Recognized in Income
Three Months Ended June 30, Six Months Ended June 30,
(in millions of dollars) 2017 2016 2017 2016
Foreign exchange contracts Other income, net $ (0.6 ) $ (2.2 ) $ (1.4 ) $ (1.6 )

~~13.~~14. Fair Value of Financial Instruments

In establishing a fair value, there is a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The basis of the fair value measurement is categorized in three levels, in order of priority, as described below:



Level 1	Unadjusted quoted prices in active markets for identical assets or liabilities
Level 2	Unadjusted quoted prices in active markets for similar assets or liabilities, or
	Unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or
	Inputs other than quoted prices that are observable for the asset or liability
Level 3	Unobservable inputs for the asset or liability

We utilize the best available information in measuring fair value. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

~~ACCO Brands Corporation and Subsidiaries~~

~~Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)~~

We have determined that our financial assets and liabilities described in "Note 13. Derivative Financial Instruments" are Level 2 in the fair value hierarchy. The following table sets forth our financial assets and liabilities that were accounted for at fair value on a recurring basis as of ~~June 30, 2017~~March 31, 2018 and December 31, ~~2016:~~2017:


(in millions of dollars)	June 30, 2017		December 31, 2016		March 31, 2018		December 31, 2017
Assets:
Forward currency contracts	$	13.1	$	4.4	$	34.4	$	25.1
Liabilities:
Forward currency contracts	$	15.1	$	0.3	$	34.1	$	25.4

Our forward currency contracts are included in "Other current assets," "Other non-current ~~assets'~~assets," "Other current liabilities" or "Other non-current liabilities" and do not extend beyond ~~June 2018,~~March 2019, except for one which extends to December 2020. The forward foreign currency exchange contracts are primarily valued based on the foreign currency spot and forward rates quoted by ~~the~~ banks or foreign currency dealers. As such, these derivative instruments are classified within Level 2.

The fair values of cash and cash equivalents, notes payable to banks, accounts receivable and accounts payable approximate carrying amounts due principally to their short maturities. The carrying amount of total debt was ~~$1,104.0~~$958.0 million and ~~$703.5~~$939.5 million and the estimated fair value of total debt was $~~1,118.0~~960.0 million and $~~708.4~~951.5 million at ~~June 30, 2017~~March 31, 2018 and December 31, ~~2016~~2017, respectively. The fair values are determined from quoted market prices, where available, and from investment bankers using current interest rates considering credit ratings and the remaining time to maturity.

~~14.~~15. Accumulated Other Comprehensive Income (Loss)

Accumulated Other Comprehensive ~~income~~Income (Loss) is defined as net income (loss) and other changes in stockholders’ equity from transactions and other events from sources other than stockholders. The components of, and changes in, accumulated other comprehensive income (loss), net of tax were as follows:


(in millions of dollars)	Derivative Financial Instruments			Foreign Currency Adjustments			Unrecognized Pension and Other Post-retirement Benefit Costs			Accumulated Other Comprehensive Income (Loss)			Derivative Financial Instruments			Foreign Currency Adjustments			Unrecognized Pension and Other Post-retirement Benefit Costs			Accumulated Other Comprehensive Income (Loss)
Balance at December 31, 2016	$	2.5		$	(285.9	)	$	(136.0	)	$	(419.4	)
Balance at December 31, 2017													$	0.2		$	(305.4	)	$	(155.9	)	$	(461.1	)
Other comprehensive loss before reclassifications, net of tax	(2.5		)	(6.8		)	(4.9		)	(14.2		)	(0.3		)	(4.3		)	(3.8		)	(8.4		)
Amounts reclassified from accumulated other comprehensive income (loss), net of tax	(1.0		)	—			1.7			0.7			0.9			—			1.2			2.1
Balance at June 30, 2017	$	(1.0	)	$	(292.7	)	$	(139.2	)	$	(432.9	)
Balance at March 31, 2018													$	0.8		$	(309.7	)	$	(158.5	)	$	(467.4	)

ACCO Brands Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)

The reclassifications out of accumulated other comprehensive income (loss) for the three ~~and six~~ months ended ~~June 30,~~March 31, 2018 and 2017 ~~and~~ ~~2016~~ were as follows:


	Three Months Ended June 30,						Six Months Ended June 30,							Three Months Ended March 31,
	2017			2016			2017			2016				2018			2017
(in millions of dollars)	Amount Reclassified from Accumulated Other Comprehensive Income						Amount Reclassified from Accumulated Other Comprehensive Income						Location on Income Statement	Amount Reclassified from Accumulated Other Comprehensive Income						Location on Income Statement
Details about Accumulated Other Comprehensive Income Components													Location on Income Statement							Location on Income Statement
Gain on cash flow hedges:
(Loss) gain on cash flow hedges:
Foreign exchange contracts	$	0.5		$	(1.5	)	$	1.6		$	(0.8	)	Cost of products sold	$	(1.2	)	$	1.1		Cost of products sold
Tax expense	(0.2		)	0.4			(0.6		)	0.2			Income tax expense
Tax benefit (expense)														0.3			(0.4		)	Income tax benefit
Net of tax	$	0.3		$	(1.1	)	$	1.0		$	(0.6	)		$	(0.9	)	$	0.7
Defined benefit plan items:
Amortization of actuarial loss	$	(1.2	)	$	(1.0	)	$	(2.3	)	$	(2.0	)	(1)	$	(1.4	)	$	(1.1	)	(1)
Amortization of prior service cost	(0.1		)	(0.1		)	(0.2		)	(0.2		)	(1)	(0.1		)	(0.1		)	(1)
Total before tax	(1.3		)	(1.1		)	(2.5		)	(2.2		)		(1.5		)	(1.2		)
Tax benefit	0.5			0.4			0.8			0.8			Income tax expense	0.3			0.3			Income tax benefit
Net of tax	$	(0.8	)	$	(0.7	)	$	(1.7	)	$	(1.4	)		$	(1.2	)	$	(0.9	)

Total reclassifications for the period, net of tax	$	(0.5	)	$	(1.8	)	$	(0.7	)	$	(2.0	)		$	(2.1	)	$	(0.2	)


(1)	These accumulated other comprehensive income components are included in the computation of net periodic benefit cost for pension and post-retirement plans (See "Note 5.6. Pension and Other Retiree Benefits" for additional details).

~~15.~~16. Information on Business Segments

Effective in the first quarter of 2017, as a result of the Esselte Acquisition, the Company realigned its operating structure, which impacted its determination of its business segments for financial reporting purposes. The Company has three operating business segments ~~that now comprise regional~~each of which is comprised of different geographic markets, and as a result, the Company no longer reports the results of its Computer Products Group as a separate segment. Results of the former Computer Products Group are reflected in the appropriate geographic segment based on the region in which sales are made.regions. The Company's three ~~realigned~~ segments are as follows:



Operating Segment		Geography
ACCO Brands North America		United States and Canada
ACCO Brands EMEA		Europe, Middle East and Africa
ACCO Brands International		~~Australia,~~Australia/N.Z., Latin America and Asia-Pacific

~~We have recast our reportable segments for each of the periods presented to reflect this change.~~

Each of the Company's three operating segments designs, markets, sources, manufactures and sells recognized consumer and end-user demanded brands used in businesses, schools and homes. Product designs are tailored based on end-user preferences in each geographic region.

Our product categories include storage and organization; stapling; punching; laminating, binding and shredding machines and related consumable supplies; whiteboards; notebooks; calendars; computer accessories; and do-it-yourself tools, among others. Our portfolio of consumer and end-user demanded brands includes both globally and regionally recognized brands.

ACCO Brands Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)

ACCO Brands North America

The ACCO Brands North America segment is comprised of the United States and Canada where the Company is a leading branded supplier of consumer and business ~~segments design, market, source, manufacture and sell academic, consumer, business and computer accessory products. The Company uses name~~products under brands such as ~~Artline~~^®, AT-A-GLANCE^®~~, Derwent~~^®~~, Esselte~~^®, Five Star^®, GBC^®, Hilroy^®, Kensington^®,, Mead^®, Quartet^®, and Swingline^®.The ACCO Brands North America segment designs, sources or manufactures and distributes school notebooks, calendars, whiteboards, storage and organization products (such as three-ring binders, sheet protectors and indexes), stapling, punching, laminating, binding and shredding products, and computer accessories, among others, which are primarily used in schools, homes and businesses. The majority of revenue in this segment is related to consumer and home products and is associated with the "back-to-school" season and calendar year-end purchases; we expect sales of consumer products to become an increasingly greater percentage of our revenue as they are faster growing than most business-related products.

ACCO Brands EMEA

The ACCO Brands EMEA segment is comprised largely of Europe, but also includes export sales to the Middle East and Africa. The Company is a leading branded supplier of consumer and business products under brands such as Derwent^®, Esselte^®, GBC^®, Kensington^®, Leitz^®, NOBO^®, Rapid^®, and Rexel^®.The ACCO Brands EMEA segment designs, manufactures or sources and distributes storage and organization products (such as lever-arch binders, sheet protectors and indexes), stapling, punching, laminating, binding and shredding products, do-it-yourself tools, and computer accessories, among others, which are primarily used in businesses, homes and schools.

ACCO Brands International

The ACCO Brands International segment is comprised of Australia/N.Z., Latin America and Asia-Pacific where the Company is a leading branded supplier of consumer and business products under brands such as Artline^®, GBC^®, Kensington^®, Marbig^®, ~~Mead~~^®~~, NOBO~~^®, Quartet^®~~, Rapid~~^®, Rexel^®, ~~Swingline~~^®, Tilibra^®, and Wilson Jones^®, among others. The ACCO Brands International segment designs, sources or manufactures and ~~many others. Products~~distributes school notebooks, calendars, whiteboards, storage and ~~brands~~organization products (such as three-ring binders, sheet protectors and indexes), stapling, punching, laminating, binding and shredding products, writing instruments, and janitorial supplies, among others, which are ~~not confined~~primarily used in businesses, schools and homes. The majority of revenue in this segment is related to ~~one channel or product category~~consumer products and is associated with the "back-to-school" season and calendar year-end purchases; we expect sales of consumer products to become an increasingly greater percentage of our revenue as they are ~~sold based on end-user preference in each geographic region.~~faster growing than most business-related products.

~~Our business~~Customers

We distribute our products ~~include stapling, punching, organizational~~through a wide variety of retail and commercial channels to ensure that our products ~~desktop accessories, binding~~are readily and laminating equipment and related consumable supplies, shredders and whiteboards. Our academic products include notebooks, folders, calendars and stationery products. Our computer accessories primarily include security products, input devices such as presenters, mice and trackballs, ergonomic aids such as foot and wrist rests, docking stations,conveniently available for purchase by consumers and other PCend-users, wherever they prefer to shop. These channels include mass retailers; e-tailers; discount, drug/grocery and ~~tablet accessories.~~variety chains; warehouse clubs; hardware and specialty stores; independent office product dealers; office superstores; and contract stationers. We also sell directly to commercial and consumer end-users through our e-commerce platform and our direct sales organization.

Net sales by business segment for the three months ended March 31, 2018 and 2017 were as follows:



	Three Months Ended March 31,
(in millions of dollars)	2018		2017
ACCO Brands North America	$	165.6	$	174.9
ACCO Brands EMEA	154.5		96.5
ACCO Brands International	85.7		88.4
Net sales	$	405.8	$	359.8

ACCO Brands Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)

Our customers are primarily large global and regional resellers of our products including retailers, on-line retailers and traditional office supply resellers and wholesalers, information technology value-added resellers and original equipment manufacturers, among others. We also sell directly to the consumer.

~~Net sales by business segment for the three and six months ended June 30, 2017 and 2016 were as follows:~~

Three Months Ended June 30, Six Months Ended June 30,
(in millions of dollars) 2017 2016 2017 2016
ACCO Brands North America $ 280.6
$ 295.4
$ 455.5
$ 474.7
ACCO Brands EMEA 128.5
41.3
225.0
80.2
ACCO Brands International 80.9
73.4
169.3
133.3
Net sales $ 490.0
$ 410.1
$ 849.8
$ 688.2

Operating income by business segment for the three ~~and six~~ months ended ~~June 30,~~March 31, 2018 and 2017 ~~and 2016~~ was as follows:


	Three Months Ended June 30,						Six Months Ended June 30,						Three Months Ended March 31,
(in millions of dollars)	2017			2016			2017			2016			2018			2017
ACCO Brands North America	$	52.5		$	53.0		$	59.1		$	63.0		$	2.9		$	5.8
ACCO Brands EMEA	0.7			1.6			5.5			1.8			14.1			3.6
ACCO Brands International	4.0			3.1			14.1			8.7			5.8			10.1
Segment operating income	57.2			57.7			78.7			73.5			22.8			19.5
Corporate	(11.8		)	(12.3		)	(24.0		)	(21.6		)	(11.1		)	(12.3		)
Operating income⁽¹⁾	45.4			45.4			54.7			51.9			11.7			7.2
Interest expense	10.8			12.8			20.6			23.5			9.4			9.8
Interest income	(2.0		)	(1.9		)	(3.3		)	(3.3		)	(1.0		)	(1.3		)
Equity in earnings of joint-venture	—			(0.8		)	—			(2.1		)
Other income, net	(1.5		)	(36.6		)	(0.8		)	(35.5		)
Non-operating pension income													(2.2		)	(2.1		)
Other (income) expense, net													(0.6		)	0.7
Income before income tax	$	38.1		$	71.9		$	38.2		$	69.3		$	6.1		$	0.1


(1)	Operating income as presented in the segment table above is defined as i) net sales; ii) less cost of products sold; iii) less advertising, selling, general and administrative expenses; iv) less amortization of intangibles; and v) less restructuring charges.

~~16. Joint-Venture Investment~~

Summarized below is the financial information for the Pelikan Artline joint-venture, in which we owned a 50% non-controlling interest, through May 1, 2016, which was accounted for using the equity method. Accordingly, we recorded our proportionate share of earnings or losses on the line entitled "Equity in earnings of joint-venture" in the "Consolidated Statements of Income."

On May 2, 2016, the Company completed the PA Acquisition and accordingly, the results of the Pelikan Artline joint-venture are included in the Company's condensed consolidated financial statements from the date of the PA Acquisition, May 2, 2016.

Three Months Ended June 30, Six Months Ended June 30,
(in millions of dollars) 2016 2016
Net sales $ 8.9
$ 34.9
Gross profit 4.3
14.1
Net income 1.6
4.1

~~ACCO Brands Corporation and Subsidiaries~~

~~Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)~~

17. Commitments and Contingencies

Pending Litigation - Brazil Tax Assessment

In connection with our May 1, 2012 acquisition of the Mead C&OP business, we assumed all of the tax liabilities for the acquired foreign ~~operations. See~~operations including Tilibra Produtos de Papelaria Ltda. ("Tilibra"). For further information see, "Note ~~10.~~11. Income Taxes - Income Tax ~~Assessment"~~Assessment - Tilibra" for details on tax assessments issued by the FRD against ~~our acquired indirect subsidiary,~~ Tilibra, which challenged the tax deduction of goodwill from Tilibra's taxable income for the years 2007 through 2010.

Other Pending Litigation

~~There~~We are party to various ~~other claims,~~ lawsuits and ~~pending actions against us~~regulatory proceedings, primarily related to alleged patent infringement and employee terminations as well as other claims incidental to our business. In addition, we may be unaware of third party claims of intellectual property infringement relating to our technology, brands or products and we may face other claims related to business operations. Any litigation regarding patents or other intellectual property could be costly and time-consuming and might require us to pay monetary damages or enter into costly license agreements. We also may be subject to injunctions against development and sale of certain of our products.

It is the opinion of management that (other than the Brazilian Tax Assessment) the ultimate resolution of ~~these~~currently outstanding matters will not have a material adverse effect on our ~~consolidated~~ financial condition, results of operations or cash flow. However, there is no assurance that we will ultimately be successful in our defense of any of these matters or that an adverse outcome in any matter will not affect our results of operations, financial condition or cash flow. Further, future claims, lawsuits and legal proceedings could materially and adversely affect our business, reputation, results of operations and financial condition.

Environmental

We are subject to national, state, provincial and/or local environmental laws and regulations concerning the discharge of materials into the environment and the handling, disposal and clean-up of waste materials and otherwise relating to the protection of the environment. This includes environmental laws and regulations that affect the design and composition of certain of our products. It is not possible to quantify with certainty the potential impact of actions regarding environmental matters, particularly remediation and other compliance efforts that we may undertake in the future. In the opinion of our management, compliance with the present environmental protection laws, before taking into account estimated recoveries from third parties, will not have a material adverse effect upon our capital expenditures, financial condition and results of operations or competitive position.

ACCO Brands Corporation and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited) (Continued)

18. Subsequent Events

On May 1, 2018, the Company's Board of Directors declared a cash dividend of $0.06 per share on its common stock. The dividend is payable on June 20, 2018 to stockholders of record as of the close of business on June 1, 2018. The declaration and payment of future dividends will be at the discretion of the Board of Directors and will be dependent upon, among other things, the Company's financial position, results of operations, cash flows, debt covenant compliance, anticipated liquidity needs, and other factors.

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

INTRODUCTION

Management’s Discussion and Analysis of Financial Condition and Results of Operations for the three ~~and six~~ months ended ~~June 30, 2017~~March 31, 2018 and ~~2016~~2017, should be read in conjunction with the unaudited condensed consolidated financial statements of ACCO Brands Corporation and the accompanying notes contained therein.

Overview of the Company

ACCO Brands is ~~one~~a designer, marketer and manufacturer of ~~the world's largest designers, marketers and manufacturers of branded academic,~~recognized consumer and ~~business products~~end-user demanded brands used in businesses, schools, ~~offices~~ and homes. Our widely ~~recognized~~known brands include ~~Artline~~^®, AT-A-GLANCE^®, Derwent^®, Esselte^®, Five Star^®, GBC^®, Hilroy^®, Kensington^®,Leitz^®, Marbig^®, Mead^®, NOBO^®, Quartet^®, Rapid^®, Rexel^®, Swingline^®, Tilibra^®, and Wilson Jones^® ~~and many others.~~. More than 80% of our net sales come from brands that occupy the ~~number one~~number-one or ~~number two~~number-two positions in the select product categories in which we compete. We ~~seek~~distribute our products through a wide variety of retail and commercial channels to ~~develop new~~ensure that our products ~~that meet the needs of our~~are readily and conveniently available for purchase by consumers and ~~commercial end-users. We compete through a balance of~~other end-users, wherever they prefer to shop. These channels include mass retailers, e-tailers, discount, drug/grocery and variety chains; warehouse clubs; hardware and specialty stores; independent office product ~~innovation, category management, a low-cost operating model~~dealers; office superstores; and ~~an efficient supply chain. We sell our products to consumers and end-users primarily through resellers, including retailers, on-line retailers and traditional office supply resellers and wholesalers.~~contract stationers. Our products are sold primarily ~~to markets located~~ in the U.S., Europe, Australia, Canada, Brazil and Mexico. ~~As a~~For the year ended December 31, 2017, approximately 55% of our sales were outside the U.S., up from 43% in 2016. This increase was the result of the Esselte and ~~PA Acquisitions, the portion of the Company's business conducted in foreign currencies has substantially increased. For 2016, on a pro forma basis (as if we had acquired Esselte and~~ Pelikan Artline ~~on January 1, 2016), approximately 55% of the Company's revenues would be in foreign currencies as compared to 43% before the Esselte and PA Acquisitions.~~acquisitions, which further extended our geographic reach.

~~The majority~~Over the past several years we have transformed our business by: divesting certain non-core commercially-oriented product lines; acquiring companies with consumer and end-user demanded brands, and continuing to diversify our distribution channels. In 2012, we acquired the Mead Consumer and Office Products business ("Mead C&OP"), which substantially increased our presence in North America and Brazil in school and calendar products with well-known consumer brands. In 2016, we purchased the remaining equity interest in Pelikan Artline from our joint venture partner, which enhanced our competitive position in school and business products in Australia and New Zealand and added new consumer categories, including writing instruments and janitorial supplies. In early 2017, we acquired Esselte Group Holdings AB ("Esselte"), which more than doubled our presence in Europe and added several iconic business brands, a significant base of independent dealer customers, and a new product category of do-it-yourself hardware tools. Together these three acquisitions have meaningfully expanded our portfolio of well-known end-user demanded brands, enhanced our competitive position from both a product and channel perspective, and added scale to our business operations.

Today our Company is a global enterprise focused on developing innovative branded consumer products for use in businesses, schools and homes. We believe our leading product category positions provide the scale to enable us to invest in marketing and product innovation to drive profitable growth. We expect to derive much of our ~~revenue is concentrated~~growth, over the long term, in faster-growing emerging geographies ~~where~~such as Latin America and parts of Asia, the Middle East and Eastern Europe, which exhibit stronger demand for our product categories isthan in ~~mature stages, but~~developed markets. In all of our markets we see opportunities to grow sales through share gains, channel expansion and ~~new~~innovative products. Over the long-term we expect to derive growth in faster-growing emerging geographies where demand in the product categories in which we compete is strong, such as in Latin America and parts of Asia, the Middle East and Eastern Europe. We plan to ~~grow organically supplemented by~~supplement organic growth globally with strategic acquisitions in both existing and adjacent categories. Historically, key drivers of demand for our products have included trends in white-collar employment levels, education enrollment levels, gross domestic product (GDP), growth in the number of small businesses and home offices, as well as consumer usage trends for our product categories.

We believe our leading product positions provide the scale to enable us to invest in product innovation and drive growth across our product categories. We manufacture approximately half of our products locally where we operate, and source approximately half of our products, primarily from China.

Key factors that affect our profitability are sales volume, sales prices compared to product cost and foreign exchange rates (see "Part I, Item 1A. Risk Factors" in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 for further information regarding these and other risk factors).

Esselte Group Holdings AB Acquisition ~~and Refinancing~~

On January 31, 2017, the Company completed the acquisition (the "Esselte Acquisition") of ~~Esselte Group Holdings AB ("Esselte").~~Esselte. Accordingly, the results of Esselte are included in the Company's condensed consolidated financial statements from February 1, 2017 forward and are reported in all three of the Company's segments, ~~from February 1, 2017 forward.~~but primarily in the ACCO Brands EMEA segment. The acquisition of Esselte ~~enhances~~made ACCO ~~Brands' position as~~Brands a leading European manufacturer and marketer of branded consumer and office products and ~~improves~~improved ACCO Brands' scale. Esselte products are primarily marketed under the Leitz^®, Rapid^® and Esselte^® brands in the storage and organization, stapling, punching, binding and ~~punch, business machines~~laminating equipment and do-it-yourself tools product categories. ~~Esselte results are included primarily in the ACCO Brands EMEA segment.~~

~~The cash purchase price paid, net of cash acquired of $34.2 million, was $292.3 million.~~

In connection with the consummation of the Esselte Acquisition, the Company entered into a Third Amended and Restated Credit Agreement (the "2017 Credit Agreement"), dated as of January 27, 2017. The 2017 Credit Agreement provided for a five-year senior secured credit facility, which consists of a €300.0 million (US$320.8 million) term loan facility (the "Euro Term Loan A"), a A$80.0 million (US$60.4 million) term loan facility (the "AUD Term Loan A"), and a US$400.0 million multi-currency revolving credit facility (the "2017 Revolving Facility").

For further information on the Esselte Acquisition, see "Note 3. Acquisition" to the condensed consolidated financial statements contained in Item 1. of this report. For information on the financing of the Esselte Acquisition, see "Note 4. Long-term Debt and Short-term Borrowings" to the condensed consolidated financial statements contained in Item 1. of this report.

~~Pelikan Artline Joint-Venture Acquisition~~

On May 2, 2016, the Company completed the acquisition of Australia Stationery Industries, Inc. (the "PA Acquisition"), which indirectly owned the 50% of the Pelikan Artline joint-venture and the issued capital stock of Pelikan Artline Pty Limited (collectively, "Pelikan Artline") that was not already owned by the Company. Prior to the PA Acquisition, the Pelikan Artline joint-venture was accounted for using the equity method. From the date of the PA Acquisition, May 2, 2016, the results of the Pelikan Artline joint-venture are included in the Company's condensed consolidated financial statements and are reported in the ACCO Brands International segment. Accordingly, we no longer report any joint-venture income. Pelikan Artline is a premier distributor of academic, consumer and business products in Australia and New Zealand.

~~Realigned Business Segments~~

Effective in the first quarter of 2017, as a result of the Esselte Acquisition, the Company realigned its operating structure, which impacted its determination of its business segments for financial reporting purposes. The Company has three operating business segments that now comprise regional geographic markets, and as a result, the Company no longer reports the results of its Computer Products Group as a separate segment. Results of the former Computer Products Group are reflected in the appropriate geographic segment based on the region in which sales are made. The Company's three realigned segments are as follows:



~~Operating Segment~~		~~Geography~~
~~ACCO Brands North America~~		~~United States and Canada~~
~~ACCO Brands EMEA~~		~~Europe, Middle East and Africa~~
~~ACCO Brands International~~		~~Australia, Latin America and Asia-Pacific~~

~~See also "Note 15. Information on Business Segments" to the condensed consolidated financial statements contained in Item 1. of this report.~~

~~Overview of Performance~~

Our second quarter results reflect the significant impacts of two acquisitions, the Esselte Acquisition, which primarily impacts our EMEA segment, and to a lesser extent the PA Acquisition, which impacts our International segment. All of our reported financial statement lines are impacted by these acquisitions from the date of the acquisitions, as are all three of our reported segments. Esselte’s financial results outside of the EMEA region have been incorporated into the ACCO Brands North America and International segments based upon geographic sales.

The Company's cash flow from operations, effective tax rate and interest payments have been impacted by refinancing our senior unsecured notes in December 2016, to obtain a lower interest rate, and increasing our bank debt in January 2017, to finance the Esselte Acquisition.

~~Foreign Currency~~OVERVIEW OF PERFORMANCE

Our financial results for the three months ended March 31, 2018 reflect the significant benefit of the Esselte Acquisition, which was completed on January 31, 2017. The inclusion of the Esselte January 2018 results are largely reflected in our EMEA segment.

Foreign ~~exchange, which has been a significant headwind for many quarters, had only a modest overall effect on~~currency translation also impacted our ~~results in the second quarter of 2017, and was immaterial~~consolidated financial statements favorably for the ~~six-month period. For the quarter, the impact of foreign exchange was favorable to some segments and adverse to others. Our international business units have increased their local currency~~three months ended March 31, 2018. Where necessary we adjust sales prices ~~in both 2016 and 2017~~ to ~~recover the~~cover inflationary impacts of currency ~~fluctuations~~fluctuation on ~~their~~our cost of products sold.

~~The quarter and year-to-date average foreign exchange rates have moved as follows for our major currencies relative to the U.S. dollar:~~

2017 QTR Average Versus 2016 QTR Average 2017 YTD Average Versus 2016 YTD Average
Currency Increase/(Decline) Increase/(Decline)
Euro (3)% (3)%
Australian dollar 1% 3%
Canadian dollar (4)% —%
Brazilian real 9% 16%
British pound (11)% (12)%
Mexican peso (3)% (7)%
Japanese yen (3)% (1)%

~~Three months ended~~ ~~June 30, 2017~~ ~~versus three months ended~~ ~~June 30, 2016~~

~~The following table presents the Company’s results~~Consolidated Results of Operations for the ~~three months ended~~Three Months Ended ~~June 30, 2017~~March 31, 2018 and ~~2016~~March 31, 2017:


	Three Months Ended June 30,						Amount of Change						Three Months Ended March 31,						Amount of Change
(in millions of dollars, except per share data)	2017			2016			$			%			2018			2017			$			%/pts
Net sales	$	490.0		$	410.1		$	79.9		19	%		$	405.8		$	359.8		$	46.0		13	%
Cost of products sold	321.5			275.3			46.2			17	%		278.3			248.9			29.4			12	%
Gross profit	168.5			134.8			33.7			25	%		127.5			110.9			16.6			15	%
Gross profit margin	34.4		%	32.9		%				1.5		pts	31.4		%	30.8		%				0.6		pts
Advertising, selling, general and administrative expenses	101.8			79.6			22.2			28	%
Selling, general and administrative expenses													101.8			94.2			7.6			8	%
Amortization of intangibles	9.0			5.4			3.6			67	%		9.3			8.0			1.3			16	%
Restructuring charges	12.3			4.4			7.9			180	%		4.7			1.5			3.2			213	%
Operating income	45.4			45.4			—			-			11.7			7.2			4.5			63	%
Operating income margin	9.3		%	11.1		%				(1.8)		pts	2.9		%	2.0		%				0.9		pts
Interest expense	10.8			12.8			(2.0		)	(16	)%		9.4			9.8			(0.4		)	(4	)%
Interest income	(2.0		)	(1.9		)	0.1			5	%		(1.0		)	(1.3		)	(0.3		)	(23	)%
Equity in earnings of joint venture	—			(0.8		)	(0.8		)	(100	)%
Other income, net	(1.5		)	(36.6		)	(35.1		)	(96	)%
Income tax expense	14.6			10.0			4.6			46	%
Non-operating pension income													(2.2		)	(2.1		)	0.1			5	%
Other (income) expense, net													(0.6		)	0.7			1.3			NM
Income tax benefit													(4.3		)	(3.5		)	0.8			23	%
Effective tax rate	38.3		%	13.9		%				24.4		pts	NM			NM						NM		pts
Net income	23.5			61.9			(38.4		)	(62	)%		10.4			3.6			6.8			189	%
Weighted average number of diluted shares outstanding:	111.9			109.0			2.9			3	%		110.0			112.4			(2.4		)	(2	)%
Diluted income per share	$	0.21		$	0.57		(0.36		)	(63	)%		$	0.09		$	0.03		$	0.06		200	%

Net Sales

Net sales ~~increased$79.9~~of $405.8 million, including $44.2 million from the additional month of sales of Esselte, were up $46.0 million, or 13%, or ~~19%, to~~ ~~$490.0~~from $359.8 million ~~from~~ ~~$410.1 million~~ in the prior-year period. ~~The Esselte and PA Acquisitions contributed sales of $105.6 million, or 26%.~~ Foreign currency translation ~~decreased~~increased sales by ~~$2.5~~$17.0 million ~~or 1%.~~in the current-year period. Comparable net sales, excluding the one month of sales from Esselte and foreign currency translation, decreased ~~primarily~~4% driven by declines in the North America segment primarily due to ~~the expected declines with office superstore customers, lower sales~~customer inventory reductions and lost placement, mostly of low-margin commodity ~~items, and the later timing of certain back-to-school shipments compared to the prior-year period.~~products.

Cost of Products Sold

Cost of products sold includes all manufacturing, product sourcing and distribution costs, including depreciation related to assets used in the manufacturing, procurement and distribution process, allocation of certain information technology costs supporting those processes, inbound and outbound freight, shipping and handling costs, purchasing costs associated with materials and packaging used in the production processes, and inventory valuation adjustments. Cost of products sold ~~increased $46.2~~of $278.3 million was up $29.4 million, or ~~17%~~12%, ~~to $321.5 million~~ from ~~$275.3~~$248.9 million in the prior-year period. ~~The Esselte and PA Acquisitions added $71.8 million to the cost of products sold.~~ Foreign currency translation ~~decreased~~increased cost of products sold by ~~$1.8~~$11.0 million ~~or 1%. The underlying decrease was driven~~in the current-year period. Underlying cost of products sold, excluding foreign currency translation, increased due to the inclusion of the results of Esselte for the month of January, partially offset by lower ~~sales volume, a favorable customer/product mix, and cost savings and productivity improvements.~~comparable net sales.

Gross Profit

~~Management believes~~We believe that gross profit and gross profit margin provide enhanced shareholder understanding of our underlying operating profit drivers. Gross profit ~~increased $33.7~~of $127.5 million was up $16.6 million, or ~~25%~~15%, ~~to $168.5 million~~ from ~~$134.8~~$110.9 million in the prior-year period. ~~The Esselte and PA Acquisitions contributed gross profit of $33.8 million.~~ Foreign currency translation ~~decreased~~increased gross profit by ~~$0.7~~$6.0 million ~~or 1%. The underlying~~in the current-year period. Underlying gross profit, ~~was flat as lower volume was~~excluding foreign currency translation, increased due to the inclusion of the results of Esselte for the month of January, partially offset by ~~a favorable customer/product mix and cost savings and productivity improvements.~~lower comparable net sales.

Gross profit ~~margin~~as a percent of net sales increased to ~~34.4%~~31.4% from ~~32.9%~~30.8%. The increase was primarily due to higher pricing in the ~~prior-year period primarily driven by a favorable customer/product mix and cost savings and productivity improvements.~~EMEA segment.

~~Advertising,~~ Selling, General and Administrative Expenses

~~Advertising, selling,~~Selling, general and administrative expenses ("SG&A") include advertising, marketing, selling (including commissions), research and development, customer service, depreciation related to assets outside the manufacturing and distribution processes and all other general and administrative expenses outside the manufacturing and distribution functions (e.g., finance, human resources, and information technology). SG&A ~~increased $22.2~~of $101.8 million was up $7.6 million, or ~~28%~~8%, ~~to $101.8 million~~ from ~~$79.6~~$94.2 million in the prior-year period. ~~The Esselte and PA Acquisitions~~Foreign currency translation increased SG&A by ~~$25.5~~$3.8 million ~~including $2.3~~in the current-year period. The current-year period includes $1.6 million of integration costs related to the Esselte ~~and PA Acquisitions and $1.3~~Acquisition. The prior-year period included $4.4 million in integration and transaction costs related primarily to the Esselte Acquisition. ~~The prior year-period included $3.1 million in~~Underlying SG&A, excluding transaction and integration costs, ~~related~~and foreign currency translation, increased due to the inclusion of the results of Esselte for the month of January, partially offset by cost and PA Acquisitions. Foreign currency translation decreased SG&A by $1.0 million, or 1%. The underlying increase was due to higher go-to-market spending and higher management incentive compensation expenses.synergy savings.

As a percentage of net sales, SG&A ~~increased~~decreased to ~~20.8%~~25.1% from ~~19.4%~~26.2% in the prior-year period, primarily ~~driven by~~due to lower integration and transaction costs incurred in the ~~Esselte Acquisition~~current-year period and ~~higher go-to-market spending.~~restructuring and synergy savings.

Amortization of Intangibles

Amortization of intangibles ~~increased $3.6~~was $9.3 million, up $1.3 million, or ~~67%~~16%, ~~to $9.0 million~~ from ~~$5.4~~$8.0 million in the prior-year period. The increase was due to the inclusion of the results of Esselte ~~and PA Acquisitions.~~for the month of January.

Restructuring Charges

Restructuring charges in the ~~current~~current-year period of ~~$12.3~~$4.7 million, primarily related ~~primarily~~to additional changes to the operating structure of the ACCO Brands North America segment and the continued integration of Esselte ~~and Pelikan Artline.~~within the ACCO Brands EMEA segment. Restructuring charges in the prior-year period of ~~$4.4~~$1.5 million related primarily to the ~~integration~~realignment of ~~Pelikan Artline.~~the operating structure of our former Computer Products Group and other projects to enhance the future long-term performance of the North America business.

Operating Income

Operating income of $11.7 million was ~~flat at $45.4 million.~~up $4.5 million, or 63%, from $7.2 million in the prior-year period. Foreign currency translation increased operating income by ~~$0.5~~$1.6 million, or ~~1%.~~

22%, in the current-year period. Underlying operating income, excluding transaction and integration costs and foreign currency translation, increased primarily due to the inclusion of the results of Esselte for the month of January.

Interest Expense ~~Equity in Earnings of Joint Venture~~ and Other ~~Income,~~(Income) Expense, Net

Interest expense ~~decreased $2.0~~of $9.4 million was down $0.4 million, or ~~16%~~4%, ~~to $10.8 million~~ from ~~$12.8~~$9.8 million in the prior-year period. The decrease was primarily due to ~~the refinancing of the senior unsecured notes completed during the fourth quarter of 2016, which lowered our interest rates, and was partially offset by increased~~lower average debt ~~related to the Esselte Acquisition. The prior-year period also included $0.9 million in refinancing costs associated with the PA Acquisition.~~

~~Equity in earnings of joint venture declined from $0.8 million~~outstanding in the ~~prior-year~~current-year period ~~to zero because the Company completed the PA Acquisition on May 2, 2016. Accordingly, the results of the Pelikan Artline joint-venture have been included~~resulting from principal repayments primarily in the ~~Company's consolidated results from that date forward. Historically the Pelikan Artline joint-venture was accounted for using the equity method.~~second half of 2017.

Other (income) expense, net was income ~~net decreased $35.1~~of $0.6 million compared to ~~$1.5 million from $36.6~~an expense of $0.7 million in the prior-year period. The ~~current period included a $2.3 million foreign currency gain related to the settlement of certain intercompany transactions. The~~ prior-year period included ~~a $35.2~~$0.3 million ~~gain arising~~ from the ~~PA Acquisition due to the revaluation~~write-off of debt issuance costs and other costs associated with the Company's ~~previously held equity interest to fair value and $1.6 million related to~~refinancing in connection with the ~~reversal~~Esselte Acquisition in the first quarter of ~~the mark-to-market of a forward currency contract.~~2017.

Income Taxes

For the current-year period, income tax ~~expense~~benefit was ~~$14.6~~$4.3 million on income before taxes of ~~$38.1~~$6.1 million. The current-year period includes a $5.6 million with an effective tax rate of 38.3%. For the prior-year period, income tax expense was $10.0 million on income before taxes of $71.9 million, with an effective tax rate of 13.9%. The lower effective tax rate in the prior-year period was primarily due to a $35.2 million gain arisingbenefit resulting from the ~~PA Acquisition~~partial release of the reserve for the Brazilian Tax Assessment due to the ~~revaluation~~expiration of the ~~previously held equity interest to fair value, which was not subject to tax.~~

~~Net Income~~

Net income decreased $38.4 million, or 62%, to $23.5 million, or $0.21 per diluted share, from $61.9 million, or $0.57 per diluted share, in the prior-year period. Foreign currency translation increased net income by $1.1 million, or 2%. The prior-year period included a $35.2 million gain arising from the PA Acquisition due to the revaluation to fair valuestatute of ~~the company's previously held equity investment in Pelikan Artline, as well as higher income tax expense.~~

~~Segment Discussion~~

Three Months Ended June 30, 2017 Amount of Change
Net Sales Segment Operating Income (A) Operating Income Margin Net Sales Net Sales Segment Operating Income Segment Operating Income Margin Points

(in millions of dollars) $ % $ %
ACCO Brands North America $ 280.6
$ 52.5
18.7 % $ (14.8 ) (5)% $ (0.5 ) (1 )% 80
ACCO Brands EMEA 128.5
0.7
0.5 % 87.2
211% (0.9 ) (56 )% (340 )
ACCO Brands International 80.9
4.0
4.9 % 7.5
10% 0.9
29 % 70
Total $ 490.0
$ 57.2
$ 79.9
$ (0.5 )

Three Months Ended June 30, 2016
Net Sales Segment Operating Income (A) Operating Income Margin

(in millions of dollars)
ACCO Brands North America $ 295.4
$ 53.0
17.9 %
ACCO Brands EMEA 41.3
1.6
3.9 %
ACCO Brands International 73.4
3.1
4.2 %
Total $ 410.1
$ 57.7

~~(A) Segment operating income excludes corporate costs: "Interest expense," "Interest income," "Equity in earnings of joint-venture," and "Other income, net." See "Part I, Item 1.Note 15. Information on Business Segments," for a reconciliation of total "Segment operating income" to "Income before income tax."~~

~~ACCO Brands North America~~

ACCO Brands North America net sales decreased $14.8 million, or 5%, to $280.6 million from $295.4 million in the prior-year period. The Esselte Acquisition contributed sales of $3.8 million, or 1%. Foreign currency translation decreased sales by $1.4 million, or 0.5%. The comparable sales decrease was due to expected declines with office superstore customers, lower sales of commodity items, and the later timing of back-to-school shipments compared to the prior-year period; more back-to-school orders were shipped in July rather than June in the prior year.

ACCO Brands North America operating income decreased $0.5 million, or 1%, to $52.5 million from $53.0 million in the prior-year period, but operating income margin increased to 18.7% from 17.9%. The decrease in operating income was due to lower sales, higher go-to-market spending and $2.8 million in restructuring charges, partially offset by favorable customer/product mix, and cost savings and productivity improvements. The restructuring charges result from a plan to enhance the future long-term performance of the business and integrate Esselte. The operating income margin increase was driven by higher gross margins, primarily due to the favorable customer/product mix.

~~ACCO Brands EMEA~~

ACCO Brands EMEA net sales increased $87.2 million, or 211%, to $128.5 million from $41.3 million in the prior-year period. The Esselte Acquisition contributed sales of $92.7 million, or 225%. Foreign currency translation decreased sales by $2.1 million, or 5%. The comparable sales decrease was due to volume declines, primarily in the U.K., in part due to share loss.

ACCO Brands EMEA operating income decreased $0.9 million to $0.7 million from $1.6 million in the prior-year period, and operating income margin decreased to 0.5% from 3.9%. The Esselte Acquisition, including restructuring costs of $6.1 million and integration costs of $2.3 million, contributed a loss of $1.7 million. Foreign currency translation increased operating income by $0.8 million. The underlying operating income was flat as lower sales volume was offset by lower SG&A.

~~ACCO Brands International~~

ACCO Brands International net sales increased $7.5 million, or 10%, to $80.9 million from $73.4 million in the prior-year period. The PA and the Esselte Acquisitions contributed sales of $9.1 million, or 12%. Foreign currency translation increased sales by $1.0 million, or 1%. The comparable sales decrease was primarily due to channel and economic softness in Australia, partially offset by higher volume in Brazil.

ACCO Brands International operating income increased $0.9 million, or 29%, to $4.0 million from $3.1 million in the prior-year period, and operating income margin increased to 4.9% from 4.2%. The acquisitions contributed operating income of $0.2 million. Restructuring charges and integration costs in the current-year period were $3.4 million and $0.5 million, respectively. The prior-year period included restructuring costs of $3.3 million, integration costs of $0.3 million and the amortization of step-up in the value of finished goods inventory of $0.2 million. The underlying increase was driven by Brazil, due to a $0.9 million recovery of an indirect tax in Brazil, and higher gross margins, partially offset by lower sales volume.

~~Six~~ ~~months ended~~ ~~June 30, 2017~~ ~~versus~~ ~~six~~ ~~months ended~~ ~~June 30, 2016~~

~~The following table presents the Company’s results~~limitations for the ~~six~~ ~~months ended~~ ~~June 30, 2017~~2011 tax year, and ~~2016~~:

Six Months Ended June 30, Amount of Change
(in millions of dollars, except per share data) 2017 2016 $ %
Net sales $ 849.8
$ 688.2
$ 161.6
23 %
Cost of products sold 570.5
471.0
99.5
21 %
Gross profit 279.3
217.2
62.1
29 %
Gross profit margin 32.9 % 31.6 % 1.3
pts
Advertising, selling, general and administrative expenses 193.8
150.8
43.0
29 %
Amortization of intangibles 17.0
10.1
6.9
68 %
Restructuring charges 13.8
4.4
9.4
214 %
Operating income 54.7
51.9
2.8
5 %
Operating income margin 6.4 % 7.5 % (1.1)
pts
Interest expense 20.6
23.5
(2.9 ) (12 )%
Interest income (3.3 ) (3.3 ) —
-

Equity in earnings of joint venture —
(2.1 ) (2.1 ) (100 )%
Other income, net (0.8 ) (35.5 ) (34.7 ) (98 )%
Income tax expense 11.1
2.6
8.5
327 %
Effective tax rate 29.1 % 3.8 % 25.3
pts
Net income 27.1
66.7
(39.6 ) (59 )%
Weighted average number of diluted shares outstanding: 112.1
108.6
3.5
3 %
Diluted income per share $ 0.24
$ 0.61
$ (0.37 ) (61 )%

~~Net Sales~~

Net sales increased $161.6 million, or 23%, to $849.8 million from $688.2 million in the prior-year period. The Esselte and PA Acquisitions contributed sales of $198.7 million, or 29%. The underlying sales decrease was primarily due to declines at office superstore customers, lost product listings and the timing of orders compared to the prior-year period.

~~Cost of Products Sold~~

Cost of products sold increased $99.5 million, or 21%, to $570.5 million from $471.0 million in the prior-year period. The Esselte and PA Acquisitions added $133.4 million to the cost of products sold. The underlying decline was due to lower sales volume (primarily in North America and EMEA), cost savings and productivity improvements.

~~Gross Profit~~

Gross profit increased $62.1 million, or 29%, to $279.3 million from $217.2 million in the prior-year period. The Esselte and PA Acquisitions contributed gross profit of $65.3 million. The underlying decline was due to lower sales volume, partially offset by cost savings and productivity improvements, and higher pricing.

~~Gross profit margin increased to 32.9% from 31.6%. The increase was primarily due to cost savings and productivity improvements and higher pricing.~~

~~Advertising, Selling, General and Administrative Expenses~~

SG&A increased $43.0 million, or 29%, to $193.8 million from $150.8 million in the prior-year period. The Esselte and PA Acquisitions increased SG&A by $47.6 million, including $8.1 million of integration and transaction costs related to the Esselte and PA Acquisitions. The prior-year period included $3.7 million in transaction and integration costs related to the Esselte and PA Acquisitions. Foreign currency translation reduced SG&A by $1.2 million, or 1%. The underlying SG&A was comparable to the prior-year period.

~~As a percentage of sales, SG&A increased to 22.8% from 21.9% in the prior-year period, primarily due to higher integration and transaction costs incurred in the current-year period.~~

~~Amortization of Intangibles~~

~~Amortization of intangibles increased $6.9 million, or 68%, to $17.0 million from $10.1 million in the prior-year period. The increase was due to the Esselte and PA Acquisitions.~~

~~Restructuring Charges~~

Restructuring charges in the current period of $13.8 million related primarily to the integration of Esselte and Pelikan Artline. Restructuring charges in the prior-year period of $4.4 million related primarily to the integration of Pelikan Artline.

~~Operating Income~~

Operating income increased $2.8 million, to $54.7 million from $51.9 million in the prior-year period. Foreign currency translation increased operating income by $1.2 million, or 2.3%. The underlying increase was due to the Esselte and PA Acquisitions, partially offset by restructuring charges.

~~Interest Expense, Equity in Earnings of Joint Venture and Other Income, Net~~

~~Interest expense~~ ~~decreased $2.9 million, or 12%, to~~ ~~$20.6 million~~ ~~from~~ ~~$23.5 million~~ in the prior-year period. The decrease was due to the refinancing of the senior unsecured notes completed during the fourth quarter of 2016, which lowered our interest rates, and was partially offset by increased debt related to the Esselte Acquisition. The prior-year period also included $0.9 million in refinancing costs associated with the PA Acquisition.

Equity in earnings of joint venture declined from $2.1 million in the prior-year period to zero because the Company completed the PA Acquisition on May 2, 2016. Accordingly, the results of the Pelikan Artline joint-venture have been included in the Company's consolidated results from that date forward. Historically the Pelikan Artline joint-venture was accounted for using the equity method.

Other income, net decreased $34.7 million to $0.8 million from $35.5 million in the prior-year period. The current period included a $2.3 million foreign currency gain related to the settlement of certain intercompany transactions. The prior-year period included a $35.2 million gain arising from the PA Acquisition due to the revaluation of the Company's previously held equity interest to fair value and $1.0 million gain on the settlement of an intercompany loan, previously deemed permanently invested.

~~Income Taxes~~

~~For the current-year period, income tax expense was $11.1 million on income before taxes of $38.2 million, with an effective tax rate of 29.1%. The current-year period included $5.5~~$2.5 million of excess tax benefits from stock-based ~~compensation related to the adoption of ASU No. 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting.~~compensation. See "Note ~~2. Recent Accounting Pronouncements"~~11. Income Taxes -Income Tax Assessment - Tilibra" to the condensed consolidated financial statements contained in Item 1. of this report for additional details on the ~~adoption of this new standard.~~Brazilian Tax Assessment. For the prior-year period, income tax ~~expense~~benefit was ~~$2.6~~$3.5 million on income before taxes of ~~$69.3~~$0.1 million ~~with an effective~~and included $5.3 million of excess tax ~~rate of 3.8%. The lower effective tax rate in the prior-year period was primarily due to the following: 1) the $35.2 million gain arising~~benefits from the PA Acquisition due to the revaluation of the previously held equity interest to fair value, which was not subject to tax, and 2) tax losses on foreign exchange on the repayment of intercompany loans, for which the pre-tax effect was recorded in equity.

stock-based compensation.

Net Income

Net income ~~decreased $39.6~~of $10.4 million was up $6.8 million, or ~~59%~~189%, ~~to $27.1~~from $3.6 million in the prior-year period. Diluted income per share was $0.09, up $0.06, or ~~$0.24 per diluted share,~~200% from ~~$66.7 million, or $0.61~~$0.03 per diluted share in the prior-year period. ~~Foreign currency translation increased~~The increase in net income was primarily driven by ~~$1.0 million, or 1%. The prior-year period included a $35.2 million gain arising from~~ the ~~PA Acquisition due to the revaluation to fair value~~inclusion of the ~~company's previously held equity investment in Pelikan Artline, as well as higher income tax expense.~~results of Esselte for the month of January.

Segment ~~Discussion~~Net Sales and Operating Income for the Three Months Ended March 31, 2018 and March 31, 2017:


	Six Months Ended June 30, 2017									Amount of Change															Three Months Ended March 31, 2018											Amount of Change Compared to the Three Months Ended March 31, 2017
	Net Sales		Segment Operating Income (A)				Operating Income Margin			Net Sales				Net Sales		Segment Operating Income				Segment Operating Income			Margin Points		Net Sales				Segment Operating Income (A)				Segment Operating Income Margin			Net Sales				Net Sales		Segment Operating Income				Segment Operating Income		Margin Points

(in millions of dollars)						$							%			$				%												$				%		$				%
ACCO Brands North America	$	455.5				$			59.1			13.0	%		$	(19.2	)		(4)%		$	(3.9	)		(6	)%		(30			)	$			165.6			$	2.9			1.8	%		$	(9.3	)	(5)%		$	(2.9	)	(50	)%	(150	)
ACCO Brands EMEA	225.0				5.5						2.4	%		144.8				181%		3.7				206	%		20		154.5				14.1				9.1	%		58.0				60%		10.5			292	%		540
ACCO Brands International	169.3		14.1				8.3	%		36.0				27%		5.4				62	%		180		85.7				5.8				6.8	%		(2.7		)		(3)%		(4.3		)		(43	)%	(460	)
Total	$	849.8	$	78.7						$	161.6					$	5.2								$	405.8			$	22.8						$	46.0					$	3.3

	Six Months Ended June 30, 2016																								Three Months Ended March 31, 2017
	Net Sales		Segment Operating Income (A)				Operating Income Margin																		Net Sales				Segment Operating Income (A)				Segment Operating Income Margin

(in millions of dollars)
ACCO Brands North America	$	474.7			$	63.0					13.3	%																			$	174.9					$	5.8			3.3	%
ACCO Brands EMEA	80.2				1.8						2.2	%																			96.5						3.6				3.7	%
ACCO Brands International	133.3		8.7				6.5	%																		88.4					10.1				11.4	%
Total	$	688.2	$	73.5																						$	359.8				$	19.5

(A) Segment operating income excludes corporate ~~costs; "Interest expense," "Interest income," "Equity in earnings of joint-venture" and "Other income, net~~."costs. See "Part I, Item 1. Note ~~15.~~16. Information on Business Segments," for a reconciliation of total Segment operating income to "Income before income tax."

ACCO Brands North America

ACCO Brands North America net sales ~~decreased $19.2~~of $165.6 million, including $0.9 million from the additional month of sales of Esselte, were down $9.3 million, or 4%5%, to ~~$455.5~~from $174.9 million ~~from~~ ~~$474.7 million~~ in the prior-year period. ~~The Esselte Acquisition contributed~~Foreign currency translation increased sales ~~of $6.7~~by $0.9 million, or 1%~~. The comparable~~, in the current-year period. Comparable net sales, ~~decrease was~~excluding Esselte and foreign currency translation, decreased 6% primarily due to ~~continued declines with office superstore customers,~~customer inventory reductions and lost ~~product listings with certain customers and the timing~~placement, mostly of ~~orders compared to the prior-year period.~~low-margin commodity products.

ACCO Brands North America operating income ~~decreased $3.9~~of $2.9 million was down $2.9 million, or 6%50%, ~~to $59.1 million~~ from ~~$63.0~~$5.8 million in the prior-year period, and operating income margin decreased to ~~13.0%~~1.8% from ~~13.3%~~3.3%. ~~The decreases were~~Operating income decreased due to lower sales and ~~$4.1~~gross margins and higher restructuring charges ($1.8 million in ~~restructuring charges,~~the current-year period compared to $1.3 million in the prior-year period), partially offset by ~~favorable customer~~cost savings.

During the first quarter we began to see rising commodity costs, in part from increased tariffs in the U.S., which impact our purchase costs for paper, wire, steel and ~~product mix,~~aluminum, together with increases in fuel and carrier rates. While these cost ~~savings and productivity improvements. The restructuring charges related~~increases have not affected current reported performance, we plan to raise our prices to help offset the ~~realigned operating structure for our former Computer Products Group and other projects to enhance the~~potential future ~~long-term performance of the business and the Esselte integration.~~impact.

ACCO Brands EMEA

ACCO Brands EMEA net sales ~~increased $144.8~~of $154.5 million, including $42.7 million from the additional month of sales of Esselte, were up $58.0 million, or ~~181%~~60%, ~~to $225.0 million~~ from ~~$80.2~~$96.5 million in the prior-year period. ~~The Esselte Acquisition contributed sales of $157.2 million, or 196%.~~ Foreign currency translation ~~decreased~~increased sales by ~~$4.2~~$13.7 million, or ~~5.2%. The comparable~~14%, in the current-year period. Comparable net sales, ~~decrease was~~excluding Esselte and foreign currency translation, increased 2% due to ~~volume~~higher customer purchases as customers built inventory, growth in computer products and sales synergies from the Esselte Acquisition. Negatively impacting comparable net sales was the earlier timing of the Easter holiday, which occurred at the end of the first quarter of 2018 versus in the second quarter of 2017. The underlying Esselte business was flat for the quarter as growth in January was offset by declines in ~~part due to share loss and in part due to inventory reductions~~March that were largely driven by ~~certain customers in transition.~~the Easter holiday.

ACCO Brands EMEA operating income ~~increased $3.7~~of $14.1 million was up $10.5 million, or ~~206%~~292%, ~~to $5.5 million~~ from ~~$1.8~~$3.6 million in the prior-year period, and operating income margin increased to ~~2.4%~~9.1% from ~~2.2%~~3.7%. The Esselte Acquisition contributed operating income of $2.9 million, including restructuring costs of $6.1 million, integration costs of $3.4 million and the amortization of step-up in the value of finished goods inventory of $0.8 million. Foreign currency translation increased operating income by ~~$1.7 million. The underlying decrease was driven primarily~~$1.3 million, or 36%, in the current-year period. Underlying operating income, excluding foreign currency translation, increased due to the inclusion of the results of Esselte for the month of January and higher gross margins and synergy savings, partially offset by ~~lower sales volume.~~

increased restructuring charges and integration costs in the current-year period ($3.3 million in the current-year period compared to $1.1 million in the prior-year period).

ACCO Brands International

ACCO Brands International net sales ~~increased $36.0~~of $85.7 million, including $0.6 million from the additional month of sales of Esselte, were down $2.7 million, or ~~27%~~3%, ~~to $169.3 million~~ from ~~$133.3~~$88.4 million in the prior-year period. ~~The PA and the Esselte Acquisitions contributed sales of $34.8 million, or 26%.~~ Foreign currency translation increased sales by ~~$4.6~~$2.4 million, or ~~4%. The comparable~~3%, in the current-year period. Comparable net sales, ~~decrease~~excluding Esselte and foreign currency translation, decreased 7% as growth in Brazil was ~~primarily~~offset by declines in Australia/N.Z., due to ~~channel~~lost listings and ~~economic softness~~the effect of the merger of two large customers during the quarter, as well as declines in Australia, partially offset by pricing in most regions, which benefited sales by 2% as we raised prices to recover our gross margin following foreign-exchange-related increases to our cost of products sold.Mexico and Asia-Pacific.

ACCO Brands International operating income ~~increased $5.4~~of $5.8 million was down $4.3 million, or ~~62%~~43%, ~~to $14.1 million~~ from ~~$8.7~~$10.1 million in the prior-year period and operating income margin ~~increased~~decreased to ~~8.3%~~6.8% from ~~6.5%~~11.4%. ~~The acquisitions contributed~~Foreign currency translation increased operating income ~~of $3.4 million. Restructuring charges and integration costs~~by $0.3 million in the current-year ~~period~~period. Underlying operating income, excluding foreign currency translation, decreased due to lower comparable net sales and gross margins resulting from higher distribution costs associated with warehouse and IT system consolidation in Australia/N.Z. These factors were $3.6 million and $0.9 million, respectively. The prior-year period included restructuring costs of $3.3 million and integration costs of $0.3 million and the amortization of step-up in the value of finished goods inventory of $0.2 million. The underlying increase was drivenpartially offset by ~~improved profitability in Brazil.~~synergy savings.

SUPPLEMENTAL NON-GAAP FINANCIAL MEASURE

To supplement our consolidated financial statements presented in accordance with generally accepted accounting principles in the U.S. ("GAAP"), we provide investors with the non-GAAP financial measure "Comparable Net Sales Change at Constant Currency."

Comparable Net Sales Change at Constant Currency

We provide comparable net sales change at constant currency in order to facilitate comparisons of our historical sales results as well as highlight the underlying sales trends in our business. We use this non-GAAP financial measure in the internal evaluation and management of our business. We believe this measure provides management and investors with a more complete understanding of our underlying sales results and trends, and enhances the overall understanding of our past sales performance and our future prospects.

We calculate comparable net sales by excluding the effect of acquisitions and by translating the current-period foreign operation net sales at prior-year currency rates.

The following table provides a reconciliation of GAAP net sales change as reported to non-GAAP comparable net sales at constant currency:



	Amount of Change - Three Months Ended March 31, 2018 compared to the Three Months Ended March 31, 2017
	$ Change - Sales
		Non-GAAP
	GAAP				Comparable
	Net Sales		Currency		Net Sales
	Change		Translation	Acquisition	Change
ACCO Brands North America	$(9.3)		$0.9	$0.9	$(11.1)
ACCO Brands EMEA	58.0		13.7	42.7	1.6
ACCO Brands International	(2.7)		2.4	0.6	(5.7)
Total	$46.0		$17.0	$44.2	$(15.2)

	% Change - Sales
		Non-GAAP
	GAAP				Comparable
	Net Sales		Currency		Net Sales
	Change		Translation	Acquisition	Change
ACCO Brands North America	(5)%		1%	1%	(6)%
ACCO Brands EMEA	60%		14%	44%	2%
ACCO Brands International	(3)%		3%	1%	(7)%
Total	13%		5%	12%	(4)%

Liquidity and Capital Resources

Our primary liquidity needs are to service indebtedness, fund capital and support working capital requirements. Our principal sources of liquidity are cash flows from operating activities, cash and cash equivalents held and seasonal borrowings under our 2017 Revolving Facility. As of ~~June 30, 2017~~,March 31, 2018, there were ~~$309.9~~$147.9 million in borrowings under our $400.0 million 2017 Revolving Facility and the amount available for borrowings was ~~$76.7~~$239.5 million (allowing for ~~$13.4~~$12.6 million of letters of credit outstanding on that date).

We maintain adequate financing arrangements at market rates. Because of the seasonality of our business, we typically generate much of our cash flow in the first, third and fourth quarters, as accounts receivables are collected, and use cash in the second quarter to fund working capital in order to support the North America back-to-school season. Our Brazilian business is highly seasonal due to the timing of ~~its~~the back-to-school season, which coincides with the calendar year-end in the fourth quarter. Due to various tax laws, it is costly to transfer short-term working capital in and out of Brazil; therefore, our normal practice is to hold seasonal cash requirements in Brazil, and invest it in short-term Brazilian government securities. Consolidated cash and cash equivalents was ~~$102.2~~$122.7 million as of ~~June 30, 2017,~~March 31, 2018, approximately ~~$68~~$84 million of which was held in Brazil.

On February 12, 2018, the Company's Board of Directors approved the initiation of a cash dividend program under which the Company will pay a regular quarterly cash dividend of $0.06 per share on its common stock ($0.24 per share on an annualized basis). The first dividend was payable on March 21, 2018 to stockholders of record as of the close of business on March 1, 2018. The declaration and payment of future dividends will be at the discretion of the Board of Directors and will be dependent upon, among other things, the Company's financial position, results of operations, cash flows and other factors.

In addition, on February 14, 2018, the Company announced that its Board of Directors had approved an authorization to repurchase up to an additional $100 million in shares of its common stock. As of March 31, 2018, the Company had $174.7 million remaining of its authorizations.

Our priorities for cash flow use over the near term, after funding business operations, including restructuring expenditures, are debt reduction, dividends, stock repurchases and ~~stock repurchases.~~to fund strategic acquisitions. Additionally, income tax payments are anticipated to increase to $52 million for the 2018 year, versus $35 million paid in the 2017 year, largely as the U.S. has exhausted the benefit of net operating loss generated tax assets.

In connection with the consummation of the Esselte Acquisition, the Company entered into the 2017 Credit Agreement, dated as of January 27, 2017, which amended and restated the 2015 Credit Agreement. The 2017 Credit Agreement provides for a five-year senior secured credit facility, which consists of a €300.0 million (US$320.8 million based on January 27, 2017 exchange rates) term loan facility, a A$80.0 million (US$60.4 million based on January 27, 2017 exchange rates) term loan facility and a US$400.0 million multi-currency 2017 Revolving Facility.

The current senior secured credit facilities have a weighted average interest rate of ~~3.69%~~2.23% as of ~~June 30, 2017~~March 31, 2018 and our senior unsecured notes have a fixed interest rate of 5.25%.

Restructuring and Integration Activities

From time to time the Company may implement restructuring, realignment or cost-reduction plans and activities, including those related to integrating acquired businesses.

During the three ~~and six~~ months ended ~~June 30, 2017,~~March 31, 2018, the Company recorded an aggregate ~~$12.3~~$4.7 million ~~and $13.8 million, respectively,~~ in restructuring expenses primarily related to additional changes to the ~~integration~~operating structure of the ACCO Brands North America segment and ~~Esselte operations worldwide. The remaining charges relate to~~ the continued integration of Esselte within the ACCO Brands ~~and Pelikan Artline operations in Australia, and the change in the operating structure in North America, including integration of our former Computer Products Group.~~EMEA segment. For additional details, see "Note 9.10. Restructuring" to the condensed consolidated financial statements contained in Item 1. of this report.

In addition, during the three ~~and six~~ months ended ~~June 30, 2017,~~March 31, 2018, the Company recorded an aggregate ~~$1.9~~$1.6 million ~~and $3.8 million, respectively,~~ in non-restructuring ~~integrations~~integration expenses related to the integration of the ACCO Brands and Esselte operations.

Consistent with our previous communications about the Esselte Acquisition, the Company currently expects it will record approximately $5$4 million for integration activities and ~~$17~~$2.5 million in additional restructuring expenses over the balance of ~~2017 and 2018.~~2018 that were not recorded yet, pursuant to GAAP rules. As integration plans are still being ~~formulated, most notably in relation to the recent Esselte Acquisition,~~finalized, it is not possible to reasonably estimate the nature or timing of these restructuring and integration charges or the timing orof their associated cash outflows.

Cash Flow for the ~~six months ended June 30,~~Three Months Ended March 31, 2018 and March 31, 2017 ~~versus six months ended June 30, 2016~~

Cash Flow from Operating Activities

Cash provided by operating activities during the ~~six~~three months ended ~~June 30, 2017~~March 31, 2018 of ~~$7.9~~$60.4 million was generated principally from net working capital (accounts receivable, inventories, accounts payable) ~~and improved operating profits, primarily due to~~which was only slightly less than the ~~Esselte and PA Acquisitions, offset by professional fees and other payments associated with~~prior year. The overall decrease of $5.0 million from the ~~Esselte Acquisition. This compares to the $1.7~~$65.4 million provided in the comparable ~~2016 period. The relatively small cash inflow generated through the first six months is typical for our business as we invest~~2017 period, was partly driven by pension contributions in ~~the "back-to-school" season, primarily in North America. Accounts receivable contributed $51.2~~2018 of $11.3 million which ~~was lower~~were higher than the ~~prior year of $60.6~~$6.8 million ~~due to lower sales and collections. Cash provided by accounts payable of $40.2 million~~contributed in 2017 ~~which compared to $24.4 million in the prior year, was higher~~ primarily due to a decision to accelerate payments of contributions for the ~~timing of acquisitions~~2018 year to maximize tax deductibility. Regarding working capital, accounts receivable contributed $162.0 million, which reflects our seasonally strong fourth quarter sales, and ~~inventory purchases.~~was slightly less than was collected in the prior-year period. The use of cash for inventory of ~~$75.0~~$43.5 million was ~~marginally~~ higher than the ~~prior year~~prior-year period of ~~$70.7~~$31.2 million due to the timing of seasonal inventory builds for certain commodity materials and ~~acquisitions. Partially offsetting~~ the timing of customer purchases in the prior year. The source of cash ~~generated from net working capital were,~~provided by accounts payable of $8.8 million in 2018, which compared to a use of $4.3 million in the prior-year period, was due to higher inventory levels in 2018 and a higher than normal level of post-acquisition payments in 2017 following the acquisition of Esselte. In addition, significant employee annual incentive payments made in the first quarter, ~~(including Esselte payroll taxes related to transaction bonuses paid by the seller),~~which, along with interest and ~~interest~~tax payments, ~~which~~ were broadly in line with those made during the prior year. Other significant cash fluctuations included tax payments of $20.5 million in 2017, which were higher than the $6.9 million paid in 2016, and increased pension contributions of $10.8 million in 2017, compared to $3.1 million in 2016.

The table below shows our cash flow from accounts receivable, inventories and accounts payable for the ~~six~~three months ended ~~June 30, 2017~~March 31, 2018 and ~~2016:~~2017:


	Six Months Ended						Three Months Ended
(in millions of dollars)	June 30, 2017			June 30, 2016			March 31, 2018			March 31, 2017
Accounts receivable	$	51.2		$	60.6		$	162.0		$	165.3
Inventories	(75.0		)	(70.7		)	(43.5		)	(31.2		)
Accounts payable	40.2			24.4			8.8			(4.3		)
Cash flow provided by net working capital	$	16.4		$	14.3		$	127.3		$	129.8

Cash Flow from Investing Activities

Cash used by investing activities was ~~$305.4~~$8.0 million and ~~$92.2~~$297.7 million for the ~~six~~three months ended ~~June 30,~~March 31, 2018 and 2017, ~~and 2016,~~ respectively. The 2017 cash outflow reflects $292.6 million of purchase price, net of cash acquired, in connection with the Esselte Acquisition. ~~See~~For further details, see "Note 3. Acquisition" to the condensed consolidated financial statements contained in Item 1. of this ~~report for details on the Esselte Acquisition.~~report. Capital expenditures were ~~$13.0~~$8.0 million and ~~$6.9~~$5.2 million for the ~~six~~three months ended ~~June 30,~~March 31, 2018 and 2017, ~~and 2016,~~ respectively, with the increase ~~due to~~versus the prior-year period driven by information technology systems-related investments.

Cash Flow from Financing Activities

Cash ~~provided~~used by financing activities was ~~$353.1~~$7.0 million for the ~~six~~three months ended ~~June 30, 2017,~~March 31, 2018, compared to ~~$125.7~~$306.4 million provided for the same period of ~~2016.~~2017. Cash ~~provided~~used in ~~2017 reflects long-term borrowings~~2018 includes $11.2 million for repurchases of $473.8 million, consisting of €300.0 million (US$320.8 million based on January 27, 2017 exchange rates) in the form of an incremental Term Loan A to fund the Esselte Acquisition, along with additional borrowings of US$91.4 million under the Company’s 2017 Revolving Facility, primarily to repay the U.S. Dollar Senior Secured Term Loan A. Repayments of long-term debt of $104.8 million include the repayment of the U.S. Dollar Senior Secured Term Loan A in the amount of $81.0 millionour common stock and ~~repayments on the Australian Dollar Senior Secured Term Loan A. Additionally, we used cash of $12.4 million for~~ payments related to tax withholding for stock-based compensation, ~~and repurchases of common stock,~~ net of proceeds received from the exercise of stock options, and ~~3.5~~$6.4 million for payment of dividends, partially offset by incremental net borrowings of $9.9 million.

Cash provided in 2017 reflects proceeds from net long-term borrowings of $317.6 million largely in connection with the Esselte Acquisition. Additionally, we used cash of $7.8 million for payments related to tax withholding for stock-based compensation, net of proceeds received from the exercise of stock options, and $3.4 million of debt issuance costs associated with the ~~financing of~~first quarter 2017 debt refinancing in connection with the Esselte Acquisition. ~~The cash provided in 2016 primarily reflects net borrowings in association with the PA Acquisition which occurred during the second quarter of 2016.~~

Credit Facilities and Notes Covenants

As of and for the ~~period~~periods ended ~~June 30,~~March 31, 2018 and December 31, 2017, the Company was in compliance with all applicable ~~covenants under the senior secured credit facilities and indenture governing the senior unsecured notes.~~loan covenants.

Guarantees and Security

Generally, obligations under ~~our~~the 2017 Credit Agreement ~~and debt instruments~~ are guaranteed by certain of the ~~Company's~~Company’s existing and future ~~domestic~~ subsidiaries, and are secured by substantially all of the ~~Company's~~Company’s and certain guarantor ~~subsidiaries'~~subsidiaries’ assets, subject to certain exclusions and limitations.

Adequacy of Liquidity Sources

We believe that cash flow from operations, our current cash balance and other sources of liquidity, including borrowings available under the 2017 Revolving Facility, will be adequate to support our requirements for working capital, capital and restructuring expenditures and to service indebtedness for the foreseeable future.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

See "Part II, Item 7A. Quantitative and Qualitative Disclosures about Market Risk" of the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2016.~~

~~Foreign Exchange Risk Management~~

As discussed in Item 7A of the Company's Annual Report on Form 10-K for the year ended December 31, 2016, the Company is exposed to various market risks, including changes in foreign currency exchange rates and interest rate changes. For the Esselte Acquisition, completed on January 31, 2017, we took on €300.0 million in debt. For more information see "Note 3. Acquisition" and "Note 4. Long-term Debt and Short-term Borrowings" to the condensed consolidated financial statements contained in Item 1. of this report.

As a result of the Esselte and PA Acquisitions, the portion of the Company's business conducted in foreign currencies has substantially increased. For 2016, on a pro forma basis (as if we had acquired Esselte and Pelikan Artline on January 1, 2016), approximately 55% of the Company's revenues would be in foreign currencies as compared to 43% before the Esselte and PA Acquisitions. Except as described herein, there were2017. There have been no material changes to ~~our~~ Foreign Exchange Risk ~~Management.~~

Management or Interest Rate Risk Management

~~As discussed~~ in ~~"Note 4. Long-term Debt and Short-term Borrowings" to~~ the ~~condensed consolidated financial statements contained in Item 1.~~quarter ended March 31, 2018 or through the date of this ~~report, our bank debt has been refinanced in conjunction with the Esselte Acquisition.~~

Amounts outstanding under the 2017 Credit Agreement bear interest at a rate per annum equal to the Euro Rate with a 0% floor, the Australian BBSR Rate, the Canadian BA Rate or the Base Rate, as applicable and as each such rate is defined in the 2017 Credit Agreement, plus an "applicable rate." For the first fiscal quarter of 2017, the applicable rate was 2.00% per annum for Euro and Australian and Canadian dollar denominated loans, and 1.00% per annum for Base Rate loans. Thereafter, the applicable rate applied to outstanding Euro and Australian and Canadian dollar denominated loans and Base Rate loans is based on the Company’s Consolidated Leverage Ratio (as defined in the 2017 Credit Agreement).report.

ITEM 4. CONTROLS AND PROCEDURES

(a) Evaluation of Disclosure Controls and Procedures.

As of the end of the period covered by this Quarterly Report on Form 10-Q, we carried out an evaluation, under the supervision and with the participation of, our Disclosure Committee, including the Chief Executive Officer and the Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended). Based upon that evaluation, the Chief Executive Officer and the Chief Financial Officer have concluded that our disclosure controls and procedures were effective.

(b) Changes in Internal Control over Financial Reporting.

In January 2017, we completed the Esselte Acquisition, which represented $98.2 million of our consolidated net sales for the quarter ended June 30, 2017 and $703.7 million of our consolidated assets as of June 30, 2017. As the Esselte Acquisition occurred in the first quarter of 2017, the scope of our evaluation of the effectiveness of internal control over financial reporting does not include Esselte. This exclusion is in accordance with the SEC's general guidance that an assessment of a recently acquired business may be omitted from our scope, but not for more than one year from the date of acquisition.

In May 2017, we implemented two new enterprise resource planning (“ERP”) systems in our Australian and Mexican operations and accordingly we have updated our internal control over financial reporting, as necessary, to accommodate modifications to our business processes.

There were no changes in our internal control over financial reporting that occurred during the quarter ended ~~June 30, 2017~~March 31, 2018 that ~~has~~have materially affected, or isare reasonably likely to materially affect, the Company's internal control over financial ~~reporting, except as mentioned above.~~reporting.

PART II — OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

There are various claims, lawsuits and pending actions against us incidental to our operations, including the income tax assessment against our Brazilian subsidiary, Tilibra Produtos de Papelaria Ltda (the "Brazilian Tax Assessment"), which is more fully described in our Annual Report on Form 10-K for the year ended December 31, ~~2016~~2017 and in "Part I, Item 1. Note ~~10.~~11. Income Taxes - Income Tax ~~Assessment"~~Assessment - Tilibra" to the Condensed Consolidated Financial Statements contained in this Quarterly Report on Form 10-Q. It is the opinion of management that (other than the Brazilian Tax Assessment) the ultimate resolution of these matters will not have a material adverse effect on our consolidated financial condition, results of operations or cash flow. However, there is no assurance that we will ultimately be successful in our defense of any of these matters or that an adverse outcome in any matter will not affect our results of operations, financial condition or cash flow.

ITEM 1A. RISK FACTORS

There have been no material changes in our risk factors from those disclosed in "Part I, Item 1A. Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, ~~2016.~~2017.

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

(a) Not applicable.

(b) Not applicable.

The following table provides information about our purchases of equity securities during the quarter ended ~~June 30, 2017:~~March 31, 2018:

Period Total Number of Shares Purchased Average Price Paid per Share
Total Number of Shares Purchased as Part of Publicly Announced Plan or Program⁽¹⁾

Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program⁽¹⁾
April 1, 2017 to April 30, 2017 —
$ —
—
$ 120,571,849
May 1, 2017 to May 31, 2017 440,905
11.34
440,905
115,571,896
June 1, 2017 to June 30, 2017 154,238
11.51
154,238
113,796,556
Total 595,143
$ 11.38
595,143
$ 113,796,556



Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plan or Program⁽¹⁾	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program⁽¹⁾
January 1, 2018 to January 31, 2018	184,282	$	12.27	184,282	$	81,703,514
February 1, 2018 to February 28, 2018	465,756	11.62		465,756	176,290,730
March 1, 2018 to March 31, 2018	122,414	12.85		122,414	174,718,137
Total	772,452	$	11.97	772,452	$	174,718,137

(1) On ~~August 21, 2014,~~October 28, 2015, the Company announced that its Board of Directors had approved the repurchase of up to $100 million in shares of its common stock. ~~Subsequently on October 28, 2015,~~On February 14, 2018, the Company announced that its Board of Directors had approved an authorization to repurchase up to an additional $100 million in shares of its common stock.

The number of shares to be purchased, if any, and the timing of purchases will be based on the Company's stock price, leverage ratios, cash balances, general business and market conditions, and other factors, including alternative investment opportunities and working capital needs. The Company may repurchase its shares, from time to time, through a variety of methods, including open-market purchases, privately negotiated transactions and block trades or pursuant to repurchase plans designed to comply with the Rule 10b5-1 of the Securities Exchange Act of ~~1934.~~1934, as amended. Any stock repurchases will be subject to market conditions, SEC regulations and other considerations and may be commenced or suspended at any time or from time to time, without prior notice. Accordingly, there is no guarantee as to the number of shares that will be repurchased or the timing of such repurchases.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

Exhibit

Number Description of Exhibit


31.1	Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 *


31.2	Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 *


32.1	Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 **


32.2	Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 **



*	Filed herewith.



**	Furnished herewith.

SIGNATURES

Pursuant to the requirements of the Section 13 or 15(d) 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.



REGISTRANT:

ACCO BRANDS CORPORATION

By:	/s/ Boris Elisman
Boris Elisman
Chairman, President and Chief Executive Officer (principal executive officer)

By:	/s/ Neal V. Fenwick
Neal V. Fenwick
Executive Vice President and Chief Financial Officer (principal financial officer)

By:	/s/ Kathleen D. Schnaedter
Kathleen D. Schnaedter
Senior Vice President ~~Corporate Controller~~ and Chief Accounting Officer (principal accounting officer)

Date: ~~August 3, 2017~~May 1, 2018

~~EXHIBIT INDEX~~

~~Exhibit~~

~~Number~~ ~~Description of Exhibit~~


~~31.1~~	~~Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002~~ *


~~31.2~~	~~Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002~~ *


~~32.1~~	~~Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002~~ **


~~32.2~~	~~Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002~~ **

~~101~~

The following financial statements from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2017 formatted in XBRL (eXtensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets, (ii) the Consolidated Statements of Income, (iii) the Consolidated Statements of Comprehensive Income (Loss), (iv) the Condensed Consolidated Statements of Cash Flows and (v) related notes to those financial statements*



*	~~Filed herewith.~~



**	~~Furnished herewith.~~

4537



PART I — FINANCIAL INFORMATION	4
Item 1. Financial Statements	4
Condensed Consolidated Balance Sheets	4
Consolidated Statements of Income	5
Consolidated Statements of Comprehensive Income ~~(Loss)~~	6
Condensed Consolidated Statements of Cash Flows	7
Notes to Condensed Consolidated Financial Statements	8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	2827
Item 3. Quantitative and Qualitative Disclosures About Market Risk	3934
Item 4. Controls and Procedures	3934
PART II — OTHER INFORMATION	4135
Item 1. Legal Proceedings	4135
Item 1A. Risk Factors	4135
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	4135
Item 3. Defaults Upon Senior Securities	4135
Item 4. Mine Safety Disclosures	4136
Item 5. Other Information	4236
Item 6. Exhibits	4336
SIGNATURES	4437



	Three Months Ended June 30,				Six Months Ended June 30,
(in millions of dollar, except per share data)	2017		2016		2017		2016
Net sales	$	490.0	$	517.9	$	885.8	$	900.7
Net income	26.6		60.5		36.9		48.8
Net income per common share (diluted)	$	0.24	$	0.56	$	0.33	$	0.45



Consolidated Leverage Ratio	Applicable Rate on Euro/AUD/CDN Dollar Loans	Applicable Rate on Base Rate Loans
> 4.00 to 1.00	2.50%	1.50%
≤ 4.00 to 1.00 and > 3.50 to 1.00	2.25%	1.25%
≤ 3.50 to 1.00 and > 3.00 to 1.00	2.00%	1.00%
≤ 3.00 to 1.00 and > 2.00 to 1.00	1.50%	0.50%
≤ 2.00 to 1.00	1.25%	0.25%



(in millions of dollars)	Fair Value		Remaining Useful Life Ranges
Trade name - indefinite lived	$	117.0	Indefinite
Trade names - amortizable	52.0		15-30 Years
Customer relationships	100.4		15 Years
Patents	4.6		10 Years
Total identifiable intangibles acquired	$	274.0



	The Effect of Derivative Instruments in Cash Flow Hedging Relationships on the Condensed Consolidated Financial Statements
	Amount of Gain (Loss) Recognized in OCI (Effective Portion)						Location of (Gain) Loss Reclassified from OCI to Income	Amount of (Gain) Loss Reclassified from AOCI to Income (Effective Portion)
	Three Months Ended June 30,							Three Months Ended June 30,
(in millions of dollars)	2017			2016				2017			2016
Cash flow hedges:
Foreign exchange contracts	$	(1.7	)	$	(0.8	)	Cost of products sold	$	(0.5	)	$	1.5

	The Effect of Derivative Instruments in Cash Flow Hedging Relationships on the Condensed Consolidated Financial Statements
	Amount of Gain (Loss) Recognized in OCI (Effective Portion)						Location of (Gain) Loss Reclassified from OCI to Income	Amount of (Gain) Loss Reclassified from AOCI to Income (Effective Portion)
	Six Months Ended June 30,							Six Months Ended June 30,
(in millions of dollars)	2017			2016				2017			2016
Cash flow hedges:
Foreign exchange contracts	$	(3.2	)	$	(3.8	)	Cost of products sold	$	(1.6	)	$	0.8



	2017 QTR Average Versus 2016 QTR Average	2017 YTD Average Versus 2016 YTD Average
Currency	Increase/(Decline)	Increase/(Decline)
Euro	(3)%	(3)%
Australian dollar	1%	3%
Canadian dollar	(4)%	—%
Brazilian real	9%	16%
British pound	(11)%	(12)%
Mexican peso	(3)%	(7)%
Japanese yen	(3)%	(1)%



	Three Months Ended June 30, 2017						Amount of Change
	Net Sales		Segment Operating Income (A)		Operating Income Margin		Net Sales			Net Sales	Segment Operating Income			Segment Operating Income		Margin Points
							Net Sales			Net Sales	Segment Operating Income			Segment Operating Income
(in millions of dollars)							$			%	$			%
ACCO Brands North America	$	280.6	$	52.5	18.7	%	$	(14.8	)	(5)%	$	(0.5	)	(1	)%	80
ACCO Brands EMEA	128.5		0.7		0.5	%	87.2			211%	(0.9		)	(56	)%	(340	)
ACCO Brands International	80.9		4.0		4.9	%	7.5			10%	0.9			29	%	70
Total	$	490.0	$	57.2			$	79.9			$	(0.5	)

	Three Months Ended June 30, 2016
	Net Sales		Segment Operating Income (A)		Operating Income Margin

(in millions of dollars)
ACCO Brands North America	$	295.4	$	53.0	17.9	%
ACCO Brands EMEA	41.3		1.6		3.9	%
ACCO Brands International	73.4		3.1		4.2	%
Total	$	410.1	$	57.7