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

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

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

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

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

On ~~October 17, 2014,~~July 20, 2015, the registrant had outstanding ~~38,899,710~~38,007,081 shares of common stock, par value $0.10 per share.

	(Unaudited)			(Audited)			(Unaudited)			(Audited)
	As of September 30,			As of December 31,			As of June 30,			As of December 31,
	2014			2013			2015			2014
ASSETS
Current assets:
Cash and cash equivalents	$	24,838		$	22,326		$	29,935		$	20,812
Accounts receivable, less allowance for doubtful accounts of $20,168 in 2014 and $20,608 in 2013		749,415			643,379
Accounts receivable, less allowance for doubtful accounts of $18,157 in 2015 and $19,725 in 2014								667,062			702,527
Inventories		796,325			830,295			875,465			926,809
Assets related to held for sale disposal group								7,880			-
Other current assets		20,599			29,255			29,595			30,042
Total current assets		1,591,177			1,525,255			1,609,937			1,680,190
Property, plant and equipment, net		133,076			143,050			130,216			138,217
Goodwill		381,687			356,811			402,545			398,042
Intangible assets, net		72,499			65,502			88,622			111,958
Other long-term assets		24,372			25,576			48,439			41,810
Total assets	$	2,202,811		$	2,116,194		$	2,279,759		$	2,370,217
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	515,350		$	476,113		$	465,953		$	485,241
Accrued liabilities		189,224			191,531			190,257			192,792
Liabilities related to held for sale disposal group								7,169			-
Current maturities of long-term debt		894			373			28			851
Total current liabilities		705,468			668,017			663,407			678,884
Deferred income taxes		28,265			29,552			12,362			17,763
Long-term debt		545,009			533,324			661,143			713,058
Other long-term liabilities		60,500			59,787			102,577			104,394
Total liabilities		1,339,242			1,290,680			1,439,489			1,514,099
Stockholders’ equity:
Common stock, $0.10 par value; authorized - 100,000,000 shares, issued - 74,435,628 shares in 2014 and 2013		7,444			7,444
Common stock, $0.10 par value; authorized - 100,000,000 shares, issued - 74,435,628 shares in 2015 and 2014								7,444			7,444
Additional paid-in capital		410,303			411,954			411,504			412,291
Treasury stock, at cost – 35,562,874 shares in 2014 and 34,714,083 shares in 2013		(1,035,570	)		(998,234	)
Treasury stock, at cost – 36,349,375 shares in 2015 and 35,719,041 shares in 2014								(1,070,183	)		(1,042,501	)
Retained earnings		1,521,230			1,444,238			1,557,281			1,541,675
Accumulated other comprehensive loss		(39,838	)		(39,888	)		(65,776	)		(62,791	)
Total stockholders’ equity		863,569			825,514			840,270			856,118
Total liabilities and stockholders’ equity	$	2,202,811		$	2,116,194		$	2,279,759		$	2,370,217

	For the Three Months Ended				For the Nine Months Ended				For the Three Months Ended				For the Six Months Ended
	September 30,				September 30,				June 30,				June 30,
	2014		2013		2014		2013		2015		2014		2015		2014
Net sales	$	1,419,947	$	1,336,676	$	3,994,123	$	3,861,655	$	1,341,799	$	1,320,037	$	2,674,174	$	2,574,176
Cost of goods sold		1,208,919		1,133,015		3,396,552		3,267,533		1,129,737		1,120,577		2,257,662		2,187,633
Gross profit		211,028		203,661		597,571		594,122		212,062		199,460		416,512		386,543
Operating expenses:
Warehousing, marketing and administrative expenses		146,560		136,265		437,595		442,558		158,159		142,186		356,531		291,035
Operating income		64,468		67,396		159,976		151,564		53,903		57,274		59,981		95,508
Interest expense, net		3,992		2,734		11,199		8,703		4,778		3,833		9,617		7,207
Income before income taxes		60,476		64,662		148,777		142,861		49,125		53,441		50,364		88,301
Income tax expense		22,307		24,161		55,420		53,816		18,864		20,110		24,095		33,113
Net income	$	38,169	$	40,501	$	93,357	$	89,045	$	30,261	$	33,331	$	26,269	$	55,188
Net income per share - basic:									$	0.80	$	0.86	$	0.69	$	1.41
Net income per share - basic	$	0.99	$	1.03	$	2.41	$	2.24
Average number of common shares outstanding - basic		38,450		39,468		38,817		39,732		37,765		38,816		37,939		39,004
Net income per share - diluted:									$	0.79	$	0.85	$	0.69	$	1.40
Net income per share - diluted	$	0.98	$	1.01	$	2.38	$	2.21
Average number of common shares outstanding - diluted		38,884		40,031		39,244		40,331		38,106		39,226		38,317		39,435
Dividends declared per share	$	0.14	$	0.14	$	0.42	$	0.42	$	0.14	$	0.14	$	0.28	$	0.28

	For the Three Months Ended					For the Six Months Ended
	June 30,					June 30,
	2015		2014			2015			2014
Net income	$	30,261	$	33,331		$	26,269		$	55,188
Other comprehensive income, net of tax
Unrealized translation adjustment		209		562			(4,421	)		17
Minimum pension liability adjustments		932		580			1,864			1,161
Unrealized interest rate swap adjustments		48		(626	)		(428	)		(785	)
Total other comprehensive gain (loss), net of tax		1,189		516			(2,985	)		393
Comprehensive income	$	31,450	$	33,847		$	23,284		$	55,581

For the Three Months Ended

For the Nine Months Ended

September 30,

September 30,

2014

2013

2014

2013

Net income
$
38,169

$
40,501

$
93,357

$
89,045

Other comprehensive income, net of tax

       Unrealized translation adjustment

(1,395
)

(111
)

(1,378
)

(751
)
       Minimum pension liability adjustments

606

994

1,767

2,982

       Unrealized interest rate swap adjustments

446

(1,152
)

(339
)

2,150

Total other comprehensive income, net of tax

(343
)

(269
)

50

4,381

Comprehensive income
$
37,826

$
40,232

$
93,407

$
93,426

	For the Nine Months Ended						For the Six Months Ended
	September 30,						June 30,
	2014			2013			2015			2014
Cash Flows From Operating Activities:
Net income	$	93,357		$	89,045		$	26,269		$	55,188
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		29,699			29,236			24,198			19,430
Share-based compensation		5,935			7,526			3,268			4,294
Loss (gain) on the disposition of property, plant and equipment		97			(108	)
Loss on the disposition of property, plant and equipment								57			96
Amortization of capitalized financing costs		657			687			451			460
Excess tax benefits related to share-based compensation		(1,166	)		(3,223	)		(433	)		(638	)
Asset impairment charges								24,034			-
Deferred income taxes		(7,618	)		(8,214	)		(8,365	)		(5,317	)
Changes in operating assets and liabilities (net of acquisitions):
Increase in accounts receivable, net		(104,540	)		(36,855	)
Decrease (increase) in accounts receivable, net								28,330			(17,650	)
Decrease in inventory		46,591			40,936			44,984			39,290
Decrease in other assets		10,000			1,612
Increase (decrease) in accounts payable		24,663			(24,677	)
Increase in other assets								(10,173	)		(2,765	)
Increase in accounts payable								3,152			21,961
Decrease in checks in-transit		(2,679	)		(835	)		(19,240	)		(28,545	)
Increase (decrease) in accrued liabilities		3,438			(7,569	)
Decrease (increase) in accrued liabilities								4,794			(1,106	)
Decrease in other liabilities		(4,768	)		(8,120	)		(478	)		(5,809	)
Net cash provided by operating activities		93,666			79,441			120,848			78,889
Cash Flows From Investing Activities:
Capital expenditures		(15,431	)		(22,822	)		(11,931	)		(10,335	)
Proceeds from the disposition of property, plant and equipment		872			3,522			18			869
Acquisition, net of cash acquired		(26,725	)		-			(532	)		(26,161	)
Net cash used in investing activities		(41,284	)		(19,300	)		(12,445	)		(35,627	)

Cash Flows From Financing Activities:
Net repayments under revolving credit facility		(12,094	)		(66,891	)		(52,738	)		(14,489	)
Borrowings under Receivables Securitization Program		9,300			50,000			-			9,300
Repayment of debt		(135,000	)		-			-			(135,000	)
Proceeds from the issuance of debt		150,000			-			-			150,000
Net (disbursements) proceeds from share-based compensation arrangements		(3,142	)		18,143
Net disbursements from share-based compensation arrangements								(759	)		(1,788	)
Acquisition of treasury stock, at cost		(43,037	)		(46,984	)		(31,227	)		(31,152	)
Payment of cash dividends		(16,407	)		(16,764	)		(10,699	)		(10,991	)
Excess tax benefits related to share-based compensation		1,166			3,223			433			638
Payment of debt issuance costs		(623	)		(1,680	)		(36	)		(615	)
Net cash used in financing activities		(49,837	)		(60,953	)		(95,026	)		(34,097	)
Effect of exchange rate changes on cash and cash equivalents		(33	)		36			(135	)		4
Transfer of cash to held for sale								(4,119	)		-
Net change in cash and cash equivalents		2,512			(776	)		9,123			9,169
Cash and cash equivalents, beginning of period		22,326			30,919			20,812			22,326
Cash and cash equivalents, end of period	$	24,838		$	30,143		$	29,935		$	31,495
Other Cash Flow Information:
Income tax payments, net	$	55,867		$	60,342		$	31,618		$	25,236
Interest paid		9,838			9,806			9,451			4,621

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

The accompanying Condensed Consolidated Financial Statements are unaudited, except for the Condensed Consolidated Balance Sheet as of December 31, ~~2013,~~2014, which was derived from the December 31, ~~2013~~2014 audited financial statements. The Condensed Consolidated Financial Statements have been prepared in accordance with the rules and regulations of the United States Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements, prepared in accordance with accounting principles generally accepted in the United States, have been condensed or omitted pursuant to such rules and regulations. Accordingly, the reader of this Quarterly Report on Form 10-Q should refer to the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2013~~2014 for further information.

In the opinion of management, the accompanying unaudited consolidated financial statements reflect all adjustments, consisting only of normal recurring adjustments, necessary to present fairly the financial position of ~~United~~Essendant at ~~September~~June 30, ~~2014~~2015 and the results of operations and cash flows for the ~~nine~~six months ended ~~September~~June 30, ~~2014~~2015 and ~~2013.~~2014. The results of operations for the three ~~months~~ and ~~nine~~six months ended ~~September~~June 30, ~~2014~~2015 should not necessarily be taken as indicative of the results of operations that may be expected for the entire year.

~~Approximately 74% and 76% of total inventory as of September 30, 2014 and December 31, 2013, respectively has been valued under~~The Company used the last-in, first-out (“LIFO”) ~~accounting method.~~method for valuing approximately 77% and 74% of its total inventory as of June 30, 2015 and December 31, 2014, respectively. The remaining inventory iswas valued under the first-in, first-out (“FIFO”) accounting method. An actual valuation of inventory under the LIFO method can be made only at the end of each fiscal year based on the inventory levels and costs at that time. Interim LIFO calculations are based on management’s estimates of expected year-end inventory levels and costs, and are subject to the final year-end LIFO inventory valuation. Inventory valued under the FIFO and LIFO accounting methods iswas recorded at the lower of cost or market. If the Company had valued its entire inventory under the lower of FIFO cost or market, inventory would have been ~~$117.3~~$124.2 million and ~~$112.4~~$118.6 million higher than reported as of ~~September~~June 30, ~~2014~~2015 and December 31, ~~2013,~~2014, respectively.

The ~~nine-month~~six-month change in the LIFO reserve as of ~~September~~June 30, ~~2014~~2015 resulted in a ~~$4.9~~$5.6 million increase in cost of goods sold related to 2015 inflation. The six-month change in the LIFO reserves as of June 30, 2014 resulted in a $1.6 million increase in costs of goods sold which included a LIFO ~~liquidation~~liquidations relating to decrements in the Company’s office products and furniture ~~pools. These decrements~~pools which resulted in a $3.4 million liquidation of LIFO inventory quantities carried at lower costs in prior years as compared with the cost of ~~current year purchases.~~purchases in 2014. This liquidation ~~resulted in LIFO income of $3.4 million, which~~ was more than offset by LIFO expense of ~~$8.3~~$5.0 million related to ~~current~~2014 inflation.

In ~~June 2014, the FASB issued ASU No. 2014-12,~~ ~~Compensation—Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved After the Requisite Service Period~~. The standard requires that a performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition, and compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved. This ASU is effective for fiscal years beginning after December 15,April 2015, and for interim periods within those fiscal years. This new standard will not have an effect on the Company’s consolidated financial statements as it is in alignment with the Company’s current accounting policies for equity based compensation.

~~In May 2014,~~ the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2015-03, Interest- Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs, that simplifies the presentation of debt issuance costs by requiring that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The ASU does not affect the recognition and measurement guidance for debt issuance costs. The ASU will be effective for Essendant financial statements issued for fiscal years beginning after December 15, 2015, and early application is permitted. The Company is currently evaluating the timing of implementation of the new guidance but expect it will have an immaterial impact on its consolidated financial statements.

In April 2015, the FASB issued ASU No. 2015-05, “Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement”, that provides guidance to customers about whether a cloud computing arrangement includes a software license. If such an arrangement includes a software license, then the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If the arrangement does not include a software license, the customer should account for it as a service contract. This ASU will be effective for Essendant for annual periods beginning after December 15, 2015, and early application is permitted. The Company is currently evaluating the new guidance to determine the impact it will have on its consolidated financial statements.

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

~~In July 2013, the FASB issued Accounting Standards Update No. 2013-11,~~ ~~Income Taxes (Topic 740) - Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists~~ (ASU 2013-11). This ASU requires that an unrecognized tax benefit, or a portion of an unrecognized tax benefit, be presented in the financial statements as either a reduction to a deferred tax asset or separately as a liability depending on the existence, availability and/or use of an operating loss carry forward, a similar tax loss, or a tax credit carry forward. This ASU was effective for the Company beginning in the first quarter of 2014. There was no impact on the Company’s financial condition or results of operations due to the adoption of this standard.2. Acquisitions and Dispositions

On May 30, 2014, ~~USSC~~Essendant Co. completed the acquisition of CPO, ~~Commerce, Inc. (“CPO”),~~ a leading online retailer of brand name power tools and equipment. The acquisition of CPO ~~will~~ significantly ~~expand~~expanded the Company’s digital resources and capabilities to support ~~customers~~resellers as they transition to an increasingly online environment. CPO’s expertise will strengthen Essendant’s ability to offer features like improved product content, real-time access to inventory and ~~supplier~~pricing, digital marketing and merchandising, and an enhanced digital platform to our resellers and manufacturing partners.

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

The fair value of the assets and liabilities acquired were determined using various valuation methods including selling price, a market approach, and discounted cash flows using both an income and cost approach.

The final allocation of the purchase price was ~~$37.4~~as follows (amounts in thousands):

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

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

The purchase price was $150.4 million, including ~~$5.1~~$4.7 million related to the estimated fair value of contingent consideration. The contingent consideration ~~which is~~ultimately paid will be determined based ~~upon the achievement of certain~~on MEDCO’s sales ~~targets~~and EBITDA during a three-year period immediately following the acquisition date. Additionally, $6.0 million was reserved as a payable upon completion of an eighteen month indemnification period. The final payments related to the contingent consideration ~~are~~will be determined by actual achievement in the earn-out periods and ~~range from~~will be between zero ~~to $10.0~~and $10 million. ~~After the finalization of the contingent consideration, any~~Any changes to the estimated fair value after the original purchase accounting is completed will be recorded in “warehousing, marketing and administrative expenses” in the period in which a change occurs. This acquisition was funded through a combination of cash on hand and cash available under the Company’s committed bank facilities.

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

At ~~September~~June 30, ~~2014,~~2015, the preliminary allocation of the purchase price iswas as follows (amounts in thousands):

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

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

	Total		Estimated Life	Total		Estimated Life
Customer relationships	$	5,200	3 years	$	36,920	4-15 years
Trademark		7,600	15 years
Trademarks					2,410	1.5-15 years
Total	$	12,800		$	39,330

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

On February 10, 2015, the Company approved a plan to sell its subsidiary in Mexico, which is not strategic to the Company. The ~~impact~~Company plans to dispose of ~~CPO~~the entity in 2015. As of the approval date, in accordance with Accounting Standards Codification (ASC) 360-10-45-9 Property, Plant, and Equipment, the Mexican subsidiary met all of the criteria to be classified as a held-for-sale asset disposal group. In accordance with ASC 350-20-40, Intangibles – Goodwill and Other, the Company allocated a proportionate share of the goodwill balance from the office product and janitorial and breakroom supply reporting unit based on the ~~Company’s third-quarter 2014 net financial sales~~subsidiary’s relative fair value to the reporting unit and performed an impairment test for the allocated goodwill utilizing the cost approach to value the entity. Based upon the impairment test, the $3.3 million of goodwill allocated to the subsidiary was ~~immaterial. Had~~determined to be fully impaired. Additionally, in conjunction with classifying the ~~CPO acquisition been completed~~subsidiary as a held-for-sale asset disposal group, the Company revalued the subsidiary to fair value using the cost-approach method less the estimated cost to sell. The carrying value, including a $10.1 million cumulative foreign currency translation adjustment, of the ~~beginning~~disposal group was then compared to the fair value less the estimated cost to sell, resulting in a pre-tax impairment loss of ~~2013,~~$10.1 million. The goodwill impairment of $3.3 million, the ~~Company’s unaudited pro forma net sales~~held-for-sale impairment of $10.1 million and ~~net income for~~ the ~~three-month~~$0.1 million estimated cost to sell were recorded in the first quarter of 2015 within “warehousing, marketing and ~~nine-month periods ending September~~administrative expenses.” During the second quarter, the Company recorded an additional $1.4 million within “warehousing, marketing and administrative expenses.” Additional financial statement impacts may occur during the remainder of 2015 as this transaction is completed.

As of June 30, ~~2014~~2015, the carrying amounts, excluding intercompany accounts, of the Mexican subsidiary by major classes of assets and ~~2013 would not have been materially impacted.~~liabilities included in the Consolidated Balance Sheet were as follows (in thousands):

On ~~September 11, 2014, USSC~~July 14, 2015, Essendant Co signed an agreement to acquire ~~Liberty Bell Equipment Corp.,~~Nestor Sales LLC, a ~~United States~~leading wholesaler and distributor of ~~automotive aftermarket~~ tools, equipment and supplies ~~and its affiliates (collectively, “MEDCO”) including G2S Equipment de Fabrication et d'Entretien ULC, a Canadian wholesaler.~~to the transportation industry. The all cash purchase price is ~~$130.0~~$38.5 million, subject to closing ~~adjustments, with up~~adjustments. This acquisition accelerates the Company’s growth in the automotive aftermarket, complements the Company’s existing industrial offerings while providing access to ~~an additional $10 million~~new customer segments, and advances a key strategic pillar to ~~be paid over three years based on performance.~~diversify into higher growth and margin channels and categories. The acquisition is expected to be completed in the ~~fourth~~third quarter of ~~2014 and is~~2015, subject to customary closing conditions. This acquisition will be funded through a combination of cash on hand and cash available under our revolving credit facility.

As of ~~September~~June 30, ~~2014,~~2015, the Company has two active equity compensation plans. ~~Under~~On May 20, 2015 the Company’s stockholders approved certain amendments to the Amended and Restated 2004 Long-Term Incentive Plan (“LTIP) which included the renaming of the LTIP to the “2015 Long-Term Incentive Plan” (as amended and restated, the “2015 Plan”). Under the 2015 Plan, award vehicles include, but are not limited to, stock options, restricted stock awards, restricted stock units (“RSUs”), and performance-based awards. Associates and non-employee directors of the Company are eligible to become participants in the plan. The Nonemployee Directors’ Deferred Stock Compensation Plan allows non-employee directors to elect to defer receipt of all or a portion of their retainer and meeting fees.

The Company granted ~~229,477~~206,479 shares of restricted stock ~~176,717~~and 145,552 RSUs during the first six months of 2015. No stock options were granted during the first six months of 2015. During the first six months of 2014, the Company granted 62,594 shares of restricted stock, 147,725 RSUs, and 5,538 stock ~~options during the first nine months of 2014. During the first nine months of 2013, the Company granted 181,916 shares of restricted stock, 166,348 RSUs, and 585,189 stock~~ options.

During the ~~first~~second quarter of ~~2013,~~2015, the Company recorded a ~~$14.4~~$0.1 million pre-tax reversal of expense relating to facility consolidations. During the first quarter of 2015, the Company recorded a $6.0 million pre-tax charge ~~related~~relating to a workforce reduction and ~~facility closures. The~~a $0.4 million pre-tax charge ~~is comprised of certain OKI~~relating to facility ~~closure expenses of $1.2 million and severance and workforce reduction-related expenses of $13.2 million which~~consolidations. These charges were included in ~~operating~~“warehousing, marketing and administrative expenses.” Cash outflows for these actions ~~occurred~~will occur primarily ~~during 2013~~in 2015 and ~~have continued into 2014. Cash outlays associated with these charges in the nine months ended September 30, 2014~~ were ~~$3.6 million. During 2013, the Company reversed a portion of these charges totaling $1.4 million. Additionally, the Company reversed a portion of these charges totaling $0.3~~approximately $2.4 million in the ~~first quarter of 2014.~~six months ended June 30, 2015. As of ~~September~~June 30, ~~2014 and December 31, 2013,~~2015, the Company ~~had~~has accrued liabilities for these actions of ~~$0.5~~$3.9 million. The Company estimated an additional $2.7 million ~~and $4.4 million, respectively.~~will be incurred in the remainder of 2015 due to facility closures related to this action, for a total 2015 expense of approximately $9.0 million.

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

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

	September 30, 2014								December 31, 2013								June 30, 2015								December 31, 2014
								Weighted								Weighted								Weighted								Weighted
								Average								Average								Average								Average
	Gross					Net		Useful	Gross					Net		Useful	Gross					Net		Useful	Gross					Net		Useful
	Carrying		Accumulated			Carrying		Life	Carrying		Accumulated			Carrying		Life	Carrying		Accumulated			Carrying		Life	Carrying		Accumulated			Carrying		Life
	Amount		Amortization			Amount		(years)	Amount		Amortization			Amount		(years)	Amount		Amortization			Amount		(years)	Amount		Amortization			Amount		(years)
Intangible assets subject to amortization
Customer relationships and other intangibles	$	89,632	$	(41,145	)	$	48,487	17	$	84,470	$	(36,232	)	$	48,238	17	$	121,766	$	(46,228	)	$	75,538	16	$	125,761	$	(41,123	)	$	84,638	16
Non-compete agreements		4,679		(2,108	)		2,571	4		4,700		(1,952	)		2,748	4		4,660		(2,981	)		1,679	4		4,672		(2,364	)		2,308	4
Trademarks		10,433		(1,292	)		9,141	14		2,890		(674	)		2,216	5		12,112		(2,307	)		9,805	14		14,428		(1,716	)		12,712	13
Total	$	104,744	$	(44,545	)	$	60,199		$	92,060	$	(38,858	)	$	53,202		$	138,538	$	(51,516	)	$	87,022		$	144,861	$	(45,203	)	$	99,658
Intangible assets not subject to amortization
Trademarks		12,300		-			12,300	n/a		12,300	-				12,300	n/a		1,600		-			1,600	n/a		12,300		-			12,300	n/a
Total	$	117,044	$	(44,545	)	$	72,499		$	104,360	$	(38,858	)	$	65,502		$	140,138	$	(51,516	)	$	88,622		$	157,161	$	(45,203	)	$	111,958

~~Based upon~~In the ~~preliminary purchase price allocation for the acquisition~~first quarter of ~~CPO,~~2015, the Company ~~has~~ recorded ~~$5.2~~a pre-tax non-cash impairment charge of $10.2 million to write-down the trademarks of ~~customer relationships~~ORS Nasco and certain OKI brands to their fair value related to the corporate name change that was effective June 1, 2015. This impairment charge was recorded in “warehousing, marketing and administrative expenses.” The Company utilized the discounted cash flow method to determine the fair value of these trademarks based upon management’s current forecasted future revenues from the trademarks. The trademarks had a total value of $1.0 million at June 30, 2015.

The following table summarizes the amortization expense to be ~~amortized~~incurred in 2015 and over ~~a period of 3~~the next four years ~~and a $7.6 million trademark to be amortized over a period of 15 years. See Note 1 “Basis of Presentation” for further discussion of the acquisition.~~on intangible assets (in thousands):

The change in Accumulated Other Comprehensive Income (Loss) (“AOCI”) by component, net of tax, for the period ended ~~September~~June 30, ~~2014 is~~2015 was as follows (amounts in thousands):

	Foreign Currency Translation			Cash Flow Hedges			Defined Benefit Pension Plans			Total			Foreign Currency Translation			Cash Flow Hedges			Defined Benefit Pension Plans			Total
AOCI, balance as of December 31, 2013	$	(6,661	)	$	871		$	(34,098	)	$	(39,888	)
AOCI, balance as of December 31, 2014													$	(11,923	)	$	274		$	(51,142	)	$	(62,791	)
Other comprehensive (loss) income before reclassifications		(1,378	)		(573	)	—				(1,951	)		(4,421	)		(864	)		-			(5,285	)
Amounts reclassified from AOCI	—				234			1,767			2,001			-			436			1,864			2,300
Net other comprehensive (loss) income		(1,378	)		(339	)		1,767			50			(4,421	)		(428	)		1,864			(2,985	)
AOCI, balance as of September 30, 2014	$	(8,039	)	$	532		$	(32,331	)	$	(39,838	)
AOCI, balance as of June 30, 2015													$	(16,344	)	$	(154	)	$	(49,278	)	$	(65,776	)

The following table details the amounts reclassified out of AOCI into the income statement during the three-month and ~~nine-month periods~~six-month period ending ~~September~~June 30, ~~2014~~2015 respectively (in thousands):

	Amount Reclassified From AOCI							Amount Reclassified From AOCI
	For the Three			For the Nine				For the Three			For the Six
	Months Ended			Months Ended				Months Ended			Months Ended
	September 30,			September 30,			Affected Line Item In The Statement	June 30,			June 30,			Affected Line Item In The Statement
Details About AOCI Components	2014			2014			Where Net Income is Presented	2015			2015			Where Net Income is Presented
Gain on interest rate swap cash flow hedges, before tax	$	339		$	376		Interest expense, net	$	339		$	703		Interest expense, net
		(128	)		(142	)	Tax provision		(129	)		(267	)	Tax provision
	$	211		$	234		Net of tax	$	210		$	436		Net of tax
Amortization of defined benefit pension plan items:
Prior service cost and unrecognized loss	$	992		$	2,892		Warehousing, marketing and administrative expenses	$	1,525		$	3,050		Warehousing, marketing and administrative expenses
		(386	)		(1,125	)	Tax provision		(593	)		(1,186	)	Tax provision
		606			1,767		Net of tax		932			1,864		Net of tax
Total reclassifications for the period	$	817		$	2,001		Net of tax	$	1,142		$	2,300		Net of tax

Basic earnings per share (“EPS”) is computed by dividing net income by the weighted-average number of common shares outstanding during the period. Diluted EPS reflects the potential dilution that could occur if dilutive securities were exercised into common stock. Stock options, restricted stock, restricted stock units and deferred stock units are considered dilutive securities. For the three-month and six-month periods ending ~~September~~June 30, 2015 and 2014, ~~and 2013, 0.5~~0.3 million and 0.6 million shares of such securities, respectively, were outstanding but were not included in the computation of diluted earnings per share because the effect would be antidilutive. For the nine-month periods ending September 30, 2014 and 2013, 0.5 ~~million and 0.7~~ million shares of such securities, respectively, were outstanding but were not included in the computation of diluted earnings per share because the effect would be antidilutive. The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share data):

	For the Three Months Ended				For the Nine Months Ended				For the Three Months Ended				For the Six Months Ended
	September 30,				September 30,				June 30,				June 30,
	2014		2013		2014		2013		2015		2014		2015		2014
Numerator:
Net income	$	38,169	$	40,501	$	93,357	$	89,045	$	30,261	$	33,331	$	26,269	$	55,188
Denominator:
Denominator for basic earnings per share -
weighted average shares		38,450		39,468		38,817		39,732		37,765		38,816		37,939		39,004
Effect of dilutive securities:
Employee stock options and restricted units		434		563		427		599		341		410		378		431
Denominator for diluted earnings per share -
Adjusted weighted average shares and the effect of dilutive
securities		38,884		40,031		39,244		40,331
Adjusted weighted average shares and the effect of dilutive securities										38,106		39,226		38,317		39,435
Net income per share:
Net income per share - basic	$	0.99	$	1.03	$	2.41	$	2.24	$	0.80	$	0.86	$	0.69	$	1.41
Net income per share - diluted	$	0.98	$	1.01	$	2.38	$	2.21	$	0.79	$	0.85	$	0.69	$	1.40

As of December 31, ~~2013,~~2014, the Company had Board authorization to repurchase ~~$93.0~~$42.4 million of ~~USI~~common stock. In February 2015, the Board of Directors authorized the Company to purchase an additional $100.0 million of common stock. During the three-month periods ended ~~September~~June 30, ~~2014~~2015 and ~~2013,~~2014, the Company repurchased ~~283,283~~378,462 and ~~166,570~~459,922 shares of ~~USI’s~~the Company’s common stock at an aggregate cost of ~~$11.4~~$15.2 million and ~~$6.5~~$17.9 million, respectively. During the ~~nine-month~~six-month periods ended ~~September~~June 30, ~~2014~~2015 and ~~2013,~~2014, the Company repurchased ~~1,074,574~~781,141 and ~~1,353,020~~791,291 shares of ~~USI’s~~the Company’s common stock at an aggregate cost of ~~$43.0~~$31.5 million and ~~$47.5~~$31.7 million, respectively. Depending on market and business conditions and other factors, the Company may continue or suspend purchasing its common stock at any time without notice. Acquired shares are included in the issued shares of the Company and treasury stock, but are not included in average shares outstanding when calculating earnings per share data. During the first ~~nine~~six months of ~~2014~~2015 and ~~2013,~~2014, the Company reissued ~~225,783~~150,807 and ~~1,014,554~~91,904 shares, respectively, of treasury stock to fulfill its obligations under its equity incentive plans.

~~USI~~ESND is a holding company and, as a result, its primary sources of funds are cash generated from operating activities of its direct operating subsidiary, ~~USSC,~~Essendant Co., and from borrowings by ~~USSC.~~Essendant Co. The 2013 Credit Agreement, the 2013 ~~Note Purchase Agreement, the 2007~~ Note Purchase Agreement, and the Receivables Securitization Program (each as defined in Note 9 of the Company’s Form 10-K for the year ended December 31, ~~2013) contain restrictions on the use of~~2014) restrict Essendant Co.’s ability to transfer cash ~~transferred from USSC~~ to ~~USI.~~ESND.

	As of		As of		As of		As of
	September 30, 2014		December 31, 2013		June 30, 2015		December 31, 2014

2013 Credit Agreement	$	195.0	$	206.8	$	311.1	$	363.0
2013 Note Purchase Agreement		150.0		-		150.0		150.0
2007 Note Purchase Agreement		-		135.0
Receivables Securitization Program		200.0		190.7		200.0		200.0
Mortgage & Capital Lease		0.9		1.2		0.1		0.9
Total	$	545.9	$	533.7	$	661.2	$	713.9

As of ~~September~~June 30, ~~2014, 72.4%~~2015, 77.3% of the Company’s outstanding debt, excluding capital leases, iswas priced at variable interest rates based primarily on the applicable bank prime rate or London InterBank Offered Rate (“LIBOR”).

Pursuant to the 2013 Note Purchase Agreement, on January 15, 2014 USSC issued an aggregate of $150 million of senior secured notes due January 15, 2021 (the “2014 Notes”). USSC used the proceeds from the sale of the 2014 Notes to repay the Series 2007-A Notes issued under the 2007 Note Purchase Agreement and to reduce the borrowings under the 2013 Credit Agreement. The parties to the 2007 Note Purchase Agreement have satisfied their obligations under that agreement. The Company will not issue any new debt under the 2007 Note Purchase Agreement.13

The Company had outstanding letters of credit of $11.1 million under the 2013 Credit Agreement as of ~~September~~June 30, ~~2014~~2015 and December 31, ~~2013.~~2014.

Borrowings under the 2013 Credit Agreement bear interest at LIBOR for specified interest periods or at the Alternate Base Rate (as defined in the 2013 Credit Agreement), plus, in each case, a margin determined based on the Company’s permitted debt to EBITDA ratio calculated as provided in Section 6.20 of the 2013 Credit Agreement (the “Leverage Ratio”). Depending on the Company’s Leverage Ratio, the margin on LIBOR-based loans ranges from 1.00% to 2.00% and on Alternate Base Rate loans ranges from 0% to 1.00%. As of ~~September~~June 30, ~~2014,~~2015, the applicable margin for LIBOR-based loans was ~~1.25%~~1.375% and for Alternate Base Rate loans was ~~0.25%~~0.375%. ~~USSC~~Essendant Co. is required to pay the lenders a fee on the unutilized portion of the commitments under the 2013 Credit Agreement at a rate per annum between 0.15% and 0.35%, depending on the Company’s Leverage Ratio.

On June 26, 2015, the Company and its subsidiaries Essendant Co., Essendant Financial Services LLC (“EFS") and Essendant Receivables LLC ("ESR") entered into a Third Omnibus Amendment to Transaction Documents (the “Omnibus Amendment”) with The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch ("BTMU") and PNC Bank, National Association (“PNC Bank”). The Omnibus Agreement amended the transaction documents of the Receivable Securitization Program to reflect rebranded legal entity names. On June 29, 2015, Lagasse, LLC, a subsidiary of Essendant Co. merged into Essendant Co. All accounts receivable originated by Lagasse prior to the merger are excluded from the Program. The Omnibus Agreement amended the Transaction Documents to also exclude “Excluded Receivables” from the Receivables Securitization Program, which are defined as “any receivable which, at the time of such Receivable’s origination, was processed on the [enterprise resource planning system previously used by Lagasse, LLC].”

As of ~~September~~June 30, ~~2014~~2015 and December 31, ~~2013, $427.6~~2014, $380.3 million and ~~$355.4~~$360.3 million, respectively, of receivables had been sold to the Investors (as defined in Note 9 of the Company’s Form 10-K for the year ended December 31, ~~2013)~~2014). ~~As of September 30, 2014, United Stationers Receivables, LLC (“USR”)~~ESR had $200.0 million outstanding under the Receivables Securitization ~~Program. As~~Program as of June 30, 2015 and December 31, ~~2013, USR had $190.7 million outstanding under the Receivables Securitization Program.~~2014.

For additional information about the 2013 Credit Agreement, the 2013 Note Purchase Agreement, and the Receivables Securitization Program, see Note 9 of the Company’s Form 10-K for the year ended December 31, ~~2013.~~2014.

The Company maintains pension plans covering union and certain non-union employees. For more information on the Company’s retirement plans, see Note 11 to the Company’s Consolidated Financial Statements in the Form 10-K for the year ended December 31, ~~2013.~~2014. A summary of net periodic pension cost related to the Company’s pension plans for the three and ~~nine~~six months ended ~~September~~June 30, 2015 and 2014 ~~and 2013 is~~was as follows (dollars in thousands):

	Pension Benefits
	For the Three Months Ended September 30,						For the Nine Months Ended September 30,						For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2014			2013			2014			2013			2015			2014			2015			2014
Service cost - benefit earned during the period	$	147		$	304		$	802		$	911		$	400		$	327		$	800		$	655
Interest cost on projected benefit obligation		2,235			2,097			6,720			6,292			2,270			2,242			4,540			4,485
Expected return on plan assets		(2,599	)		(2,842	)		(7,714	)		(8,525	)		(2,805	)		(2,557	)		(5,610	)		(5,115	)
Amortization of prior service cost		47			48			137			143			75			45			150			90
Amortization of actuarial loss		945			1,577			2,755			4,731			1,450			905			2,900			1,810
Net periodic pension cost	$	775		$	1,184		$	2,700		$	3,552		$	1,390		$	962		$	2,780		$	1,925

The Company made cash contributions of $2.0 million ~~and $13.0 million~~ to its pension plans during each of the ~~first nine months~~six month periods ended ~~September~~June 30, ~~2014~~2015 and ~~2013, respectively.~~2014. Additional contributions, if any, for ~~2014~~2015 have not yet been determined. As of ~~September~~June 30, ~~2014~~2015 and December 31, ~~2013,~~2014, respectively, the Company had accrued ~~$18.6~~$48.0 million and ~~$20.8~~$50.3 million of pension liability within “Other Long-Term Liabilities” on the Condensed Consolidated Balance Sheets.

The Company has defined contribution plans covering certain salaried associates and non-union hourly paid associates (the “Plan”). The Plan permits associates to defer a portion of their pre-tax and after-tax salary as contributions to the Plan. The Plan also provides for Company-funded discretionary contributions as well as matching associates’ salary deferral contributions, at the discretion of the Board of Directors. The Company recorded expense of ~~$1.4~~$1.5 million and ~~$4.2~~$2.9 million for the Company match of employee contributions to the Plan for the three and ~~nine~~six months ended ~~September~~June 30, ~~2014.~~2015. During the same periods last year, the Company recorded expense of $1.3 million and ~~$4.2~~$2.7 million to match employee contributions.

~~Interest rate movements create a degree of risk to the Company’s operations by affecting the amount of interest payments. Interest rate swap agreements are used~~The Company uses derivative instruments to manage ~~the Company’s exposure~~a portion of exposures to fluctuations in interest rate changes. The Company designates its floating-to-fixed interest rate swaps as cash flow hedges of the variability of future cash flows at the inception of the swap contract to support hedge accounting.

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

~~As of September 30, 2014, approximately 27.5% ($150.0 million) of the Company’s current outstanding debt had its interest payments designated as hedged forecasted transactions.~~

The Company’s outstanding swap transaction is accounted for as a cash flow hedge and is recorded at fair value on the Condensed Consolidated Balance Sheet as of September 30, 2014 and December 31, 2013, at the following amounts (in thousands):

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

The hedged transactions described above qualify as cash flow hedges in accordance with accounting guidance on derivative instruments. This guidance requires companies to recognize all of their derivative instruments as either assets or liabilities in the statement of financial position at fair value.rates. The Company does not ~~offset~~enter into derivative financial instruments for trading or speculative purposes. The fair values of these instruments are determined by using quoted market forward rates (level 2 inputs) and reflect the present value of the amount that the Company would pay for contracts involving the same notional amounts and maturity dates. These instruments qualify for hedge accounting and the changes in fair value ~~amounts recognized for interest rate swaps executed with the same counterparty.~~

~~For derivative instruments that~~ are ~~designated and qualify as a cash flow hedge, the effective portion of the gain or loss on the derivative instrument is~~ reported as a component of other comprehensive ~~income~~earnings (losses) net of tax effects.

As of June 30, 2015 and ~~reclassified into earnings~~December 31, 2014, the fair value of the Company's interest rate swap included in the ~~same line item associated with the forecasted transaction in the same period or periods during which the hedged transaction affects earnings.~~

In connection with the pricing of the 2013 Note Purchase Agreement the Company terminated the June 2013 Swap Transaction. The gain of $0.9 million realized by the Company on the termination has been recordedCompany’s Condensed Consolidated Balance Sheet as a component of ~~Other Comprehensive Income on the Company’s consolidated balance sheet as of December 31, 2013~~“Other long-term liabilities” was $0.9 million and ~~will be reclassified into earnings over the term~~$0.3 million respectively. The purpose of the ~~2014 Notes. During the nine-month period ending September 30, 2014, the Company recognized $0.1 million into earnings from AOCI.~~

~~This~~interest rate swap ~~reduces the exposure~~is to ~~variability in interest rates between the date the Company entered into the hedge and the date the Company priced the 2014 Notes.~~

~~The July 2012 Swap Transaction effectively converts~~convert a portion of the Company’s ~~future~~ floating-rate debt to a fixed-rate basis. ~~This~~The swap transaction reduces the impact of interest rate changes on future interest expense. By using such derivative financial instruments, the Company exposes itself to credit risk and market risk. Credit risk is the risk that the counterparty to the interest rate swap (as noted above) will fail to perform under the terms of the agreement.matures in July 2017. The Company attempts to minimize the credit risk in these agreements by only entering into transactions with counterparties the Company determines are creditworthy. The market risk is the adverse effect on the value of ahad no other derivative ~~financial instrument that results from a change in interest rates.~~

The Company’s agreement with its derivative counterparty provides that if an event of default occurs on any Company debt of $25 million or more, the counterparty can terminate the swap agreement. If an event of default had occurred and the counterparty had exercised early termination right under the outstanding swap transactioninstruments as of ~~September~~June 30, ~~2014, the Company would have been required to pay the aggregate fair value net asset of $0.1 million plus accrued interest to the counterparty.~~

~~The swap transaction that was in effect as of September 30, 2014 and the swap transaction that was in effect as of September 30, 2013 contained no ineffectiveness; therefore, all gains~~2015 or losses on those derivative instruments were reported as a component of other comprehensive income (“OCI”) and reclassified into earnings as “interest expense” in the same period or periods during which they affected earnings.

The following table depicts the effect of these derivative instruments on the statements of income and comprehensive income for the three and nine month periods ended September 30, 2014 and September 30, 2013 (in thousands).

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

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

For the Three
Months Ended
September 30,
2014

For the Nine
Months Ended
September 30,
2014

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

For the Three
Months Ended
September 30,
2014

For the Nine
Months Ended
September 30,
2014

July 2012 Swap Transaction
$
748

$
(1
)

   Interest expense, net

$
281

$
281

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

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

For the Three
Months Ended
September 30,
2013

For the Nine
Months Ended
September 30,
2013

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

For the Three
Months Ended
September 30,
2013

For the Nine
Months Ended
September 30,
2013

November 2007 Swap Transaction
$
-

$
(77
)

   Interest expense, net

$
-

$
(228
)
   July 2012 Swap Transaction

(574
)

878

   Interest expense, net

-

-

June 2013 Swap Transaction

(578
)

1,121

Interest expense, net

-

-

The Company measures certain financial assets and liabilities, including interest rate swap derivatives, at fair value on a recurring basis, ~~including interest rate swap derivatives,~~ based on ~~the mark-to-market position~~market rates of the Company’s positions and other observable interest rates (see Note 910 “Derivative Financial Instruments”, for more information on these interest rate swaps).

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

Determining which level to apply to an asset or liability requires significant judgment. The Company evaluates its hierarchy disclosures each quarter. The following table summarizes the financial instruments measured at fair value in the accompanying Condensed Consolidated Balance Sheets as of ~~September~~June 30, ~~2014~~2015 and December 31, ~~2013~~2014 (in thousands):

Fair Value Measurements as of September 30, 2014

Quoted Market
Prices in Active
Markets for
Identical Assets or
Liabilities

Significant Other
Observable
Inputs

Significant
Unobservable
Inputs

Total

Level 1

Level 2

Level 3

Assets

Interest rate swap asset
$
138

$
-

$
138

$
-

Fair Value Measurements as of December 31, 2013

Quoted Market
Prices in Active
Markets for
Identical Assets or
Liabilities

Significant Other
Observable
Inputs

Significant
Unobservable
Inputs

Total

Level 1

Level 2

Level 3

Assets

Interest rate swap asset
$
599

$
-

$
599

$
-

	Fair Value Measurements as of June 30, 2015
			Quoted Market Prices in Active Markets for Identical Assets or Liabilities		Significant Other Observable Inputs		Significant Unobservable Inputs
	Total		Level 1		Level 2		Level 3
Liabilities
Interest rate swap liability		872		-		872		-
Total	$	872	$	-	$	872	$	-

	Fair Value Measurements as of December 31, 2014
			Quoted Market Prices in Active Markets for Identical Assets or Liabilities		Significant Other Observable Inputs		Significant Unobservable Inputs
	Total		Level 1		Level 2		Level 3
Liabilities
Interest rate swap liability		253		-		253		-
Total	$	253	$	-	$	253	$	-

The carrying amount of accounts receivable at ~~September~~June 30, ~~2014,~~2015, including ~~$427.6~~$380.3 million of receivables sold under the Receivables Securitization Program, approximates fair value because of the short-term nature of this item.

As of June 30, 2015, the held for sale assets and liabilities ~~measured at fair value on a recurring basis, as noted above, from those~~detailed in Note 2 “Acquisitions and Dispositions” were measured at fair value on a nonrecurring basis. ~~As of September 30, 2014, no~~No other assets or liabilities ~~are~~were measured at fair value on a nonrecurring basis.

~~The Company had receivables~~Receivables related to supplier allowances totaling ~~$95.4~~$86.4 million and ~~$103.2~~$124.4 million were included in “Accounts receivable” in the Condensed Consolidated Balance Sheets as of ~~September~~June 30, ~~2014~~2015 and December 31, ~~2013,~~2014, respectively.

Accrued customer rebates of ~~$57.4~~$51.7 million and ~~$52.6~~$63.2 million as of ~~September~~June 30, ~~2014~~2015 and December 31, ~~2013,~~2014, respectively, were included in “Accrued liabilities” in the Condensed Consolidated Balance Sheets.

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

For the three and six months ended June 30, 2015, the Company recorded income tax expense of $18.9 million and $24.1 million on pre-tax income of $49.1 million and $50.4 million, for an effective tax rate of 38.4% and 47.8%, respectively. For the three months and six months ended June 30, 2014, the Company recorded income tax expense of $20.1 million and $33.1 million on pre-tax income of $53.4 million and $88.3 million, respectively, for an effective tax rate of 37.6% and 37.5%, respectively.

The Company's U.S. statutory rate is 35.0%. The most significant factor impacting the effective tax rate for the three and six months ended June 30, 2015 was the discrete tax impacts of the impairment charges for financial reporting purposes related to placing a non-strategic business for sale in the first quarter. There were no significant discrete items for the three and six months ended June 30, 2014.

The Company has been named as a defendant in an action filed before the United States District Court for the Central District of California on May 1, 2015. The complaint alleges that the Company sent unsolicited fax advertisements to two named plaintiffs, as well as thousands of other persons and entities, in violation of the Telephone Consumer Protection Act of 1991, as amended by the Junk Fax Prevention Act of 2005 ("TCPA"). After filing the complaint, the plaintiff filed a motion asking the Court to certify a class of plaintiffs comprised of persons and entities who allegedly received fax advertisements from the Company. Under the TCPA, recipients of unsolicited fax advertisements can seek damages of $500 per fax for inadvertent violations and up to $1,500 per fax for knowing and willful violations. Other reported TCPA lawsuits have resulted in a broad range of outcomes, with each case being dependent on its own unique set of facts and circumstances. The Company is vigorously contesting class certification and liability. Litigation of this kind, however, is likely to lead to settlement negotiations, including negotiations prompted by pre-trial civil court procedures. Regardless of whether the litigation is resolved at trial or through settlement, the Company believes that a loss associated with resolution of pending claims is probable. However, the amount of any such loss, which could be material, cannot be reasonably estimated because the Company is continuing to evaluate its defenses based on its internal review and investigation of prior events, new information and future circumstances.

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

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Exchange Act. Forward-looking statements often contain words such as “expects,” “anticipates,” “estimates,” “intends,” “plans,” “believes,” “seeks,” “will,” “is likely,” “scheduled,” “positioned to,” “continue,” “forecast,” “predicting,” “projection,” “potential” or similar expressions. Forward-looking statements include references to goals, plans, strategies, objectives, projected costs or savings, anticipated future performance, results or events and other statements that are not strictly historical in nature. These forward-looking statements are based on management’s current expectations, forecasts and assumptions. This means they involve a number of risks and uncertainties that could cause actual results to differ materially from those expressed or implied here. These risks and uncertainties include, without limitation, those set forth in “Item 1A. Risk Factors” in the Company’s Annual Report on Form 10-K for the year-ended December 31, ~~2013.~~2014.

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

Essendant Inc. (formerly known as United Stationers Inc.) is a leading supplier of ~~business~~workplace essentials, with ~~2013~~2014 net sales of approximately ~~$5.1~~$5.3 billion. ~~United~~Essendant Inc. stocks over ~~140,000~~160,000 items from over 1,600 manufacturers. These items include a broad spectrum of manufacturer-branded and private ~~brand~~branded technology products, traditional office products, office furniture, janitorial and breakroom supplies, and industrial supplies. ~~United~~Essendant sells ~~its products~~ through a network of 6574 distribution centers to ~~its~~ approximately ~~25,000~~30,000 reseller customers, who in turn sell directly to end-consumers. The Company’s customers include independent office products dealers; contract stationers; office products superstores; computer products resellers; office furniture dealers; mass merchandisers; mail order companies; sanitary supply, paper and foodservice distributors; drug and grocery store chains; healthcare distributors; e-commerce merchants; oil field, welding supply and industrial/MRO distributors; and other independent distributors. Additionally, newly acquired CPO Commerce, LLC (“CPO”) is an e-retailer of brand name power tools and equipment who sells directly to end consumers.

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

2) Win online by growing our business-to-business (B2B) sales with major e-commerce players and by enabling the online success of our resellers by providing digital capabilities and tools to support them; and

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

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

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

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

For a further discussion of selected trends, events or uncertainties the Company believes may have a significant impact on its future performance, readers should refer to “Key Trends and Recent Results” under Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report on Form 10-K for the year-ended December 31, ~~2013.~~2014.

During the first ~~nine~~six months of ~~2014,~~2015, there were no significant changes to the Company’s critical accounting policies, judgments or estimates from those disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2013.~~2014.

The following ~~table~~tables presents Adjusted Operating Expenses, Adjusted Operating Income, Adjusted Net Income, and Adjusted Diluted Earnings Per Share for the ~~nine-month~~three and six-month periods ended ~~September~~June 30, ~~2014~~2015 and ~~2013~~2014 (in thousands, except per share data) excluding the effects of ~~$14.4 million~~the pre-tax ~~charge~~charges related to workforce reductions and facility ~~closures in~~consolidations, intangible asset impairment charge and accelerated amortization related to rebranding efforts, and an impairment charge, certain transaction costs, and foreign currency volatility related to the ~~first quarter~~held-for-sale classification of ~~2013.~~our Mexican subsidiary. Generally Accepted Accounting Principles require that the effects of these items be included in the Condensed Consolidated Statements of Income. Management believes that excluding these items is an appropriate comparison of its ongoing operating and to the results toof last year. It is helpful to provide readers of its financial statements with a reconciliation of these items to its Condensed Consolidated Statements of Income reported in accordance with Generally Accepted Accounting Principles.

	For the Nine Months Ended September 30,												For the Three Months Ended June 30,
	2014						2013						2015						2014
				% to						% to						% to					% to
	Amount			Net Sales			Amount			Net Sales			Amount			Net Sales			Amount		Net Sales
Net Sales	$	3,994,123			100.0	%	$	3,861,655			100.0	%	$	1,341,799			100.0	%	$	1,320,037		100.0	%
Gross profit	$	597,571			15.0	%	$	594,122			15.4	%	$	212,062			15.8	%	$	199,460		15.1	%
Operating expenses	$	437,595			11.0	%	$	442,558			11.5	%	$	158,159			11.8	%	$	142,186		10.8	%
Workforce reduction and facility closure charge		-			0.0	%		(14,432	)		(0.4	%)
Workforce reduction and facility consolidation charge														138			0.0	%		-		-
Rebranding - intangible asset amortization														(512	)		0.0	%		-		-
Asset held for sale related costs														(1,361	)		(0.1	%)		-		-
Adjusted operating expenses	$	437,595			11.0	%	$	428,126			11.1	%	$	156,424			11.7	%	$	142,186		10.8	%
Operating income	$	159,976			4.0	%	$	151,564			3.9	%	$	53,903			4.0	%	$	57,274		4.3	%
Operating expense item noted above		-			0.0	%		14,432			0.4	%
Operating expense items noted above														1,735			0.1	%		-		-
Adjusted operating income	$	159,976			4.0	%	$	165,996			4.3	%	$	55,638			4.1	%	$	57,274		4.3	%
Net income	$	93,357					$	89,045					$	30,261					$	33,331
Operating expense item noted above, net of tax		-						8,948
Operating expense items noted above, net of tax														942						-
Adjusted net income	$	93,357					$	97,993					$	31,203					$	33,331
Diluted earnings per share	$	2.38					$	2.21					$	0.79					$	0.85
Per share operating expense item noted above		-						0.22
Per share operating expense items noted above														0.03						-
Adjusted diluted earnings per share	$	2.38					$	2.43					$	0.82					$	0.85
Adjusted diluted earnings per share - change over the prior year period		(2.1	%)											(3.5	%)
Weighted average number of common shares - diluted		39,244						40,331						38,106						39,226

	For the Six Months Ended June 30,
	2015						2014
				% to					% to
	Amount			Net Sales			Amount		Net Sales
Net Sales	$	2,674,174			100.0	%	$	2,574,176		100.0	%
Gross profit	$	416,512			15.6	%	$	386,543		15.0	%
Operating expenses	$	356,531			13.3	%	$	291,035		11.3	%
Workforce reduction and facility consolidation charge		(6,295	)		(0.2	%)		-		-
Rebranding - intangible asset impairment and amortization		(10,975	)		(0.4	%)		-		-
Asset held for sale impairment and related costs		(14,927	)		(0.6	%)		-		-
Adjusted operating expenses	$	324,334			12.1	%	$	291,035		11.3	%
Operating income	$	59,981			2.2	%	$	95,508		3.7	%
Operating expense items noted above		32,197			1.2	%		-		-
Adjusted operating income	$	92,178			3.4	%	$	95,508		3.7	%
Net income	$	26,269					$	55,188
Operating expense items noted above, net of tax		24,837						-
Adjusted net income	$	51,106					$	55,188
Diluted earnings per share	$	0.69					$	1.40
Per share operating expense items noted above		0.64						-
Adjusted diluted earnings per share	$	1.33					$	1.40
Adjusted diluted earnings per share - change over the prior year period		(5.0	%)
Weighted average number of common shares - diluted		38,317						39,435

Results of Operations—Three Months Ended ~~September~~June 30, ~~2014~~2015 Compared with the Three Months Ended ~~September~~June 30, ~~2013~~2014

Net Sales. Net sales for the ~~third~~second quarter of ~~2014~~2015 were ~~$1.42~~$1.34 billion. The following table summarizes net sales by product category for the three-month periods ended ~~September~~June 30, ~~2014~~2015 and ~~2013~~2014 (in thousands):

	Three Months Ended September 30,				Three Months Ended June 30,
	2014		2013⁽¹⁾		2015		2014⁽¹⁾
Janitorial and breakroom supplies					$	368,343	$	357,242
Technology products	$	381,210	$	381,580		349,702		369,700
Janitorial and breakroom supplies		386,060		344,459
Traditional office products (including cut-sheet paper)		360,353		355,222		293,800		330,175
Industrial supplies		163,514		131,462		214,990		145,151
Office furniture		84,512		85,098		78,499		78,631
Freight revenue		33,302		29,222		30,299		29,638
Services, Advertising and Other		10,996		9,633		6,166		9,500
Total net sales	$	1,419,947	$	1,336,676	$	1,341,799	$	1,320,037

Sales in the janitorial and breakroom supplies product category increased 3.1% in the second quarter of 2015 compared to the second quarter of 2014. This category accounted for 27.5% of the Company’s second quarter 2015 consolidated net sales. Sales increased from being named the primary supplier for Office Depot’s janitorial business and e-tail growth.

Sales in the technology products category (primarily ink and toner) decreased 5.4% from the second quarter of 2014. This category accounted for 26.1% of net sales for the second quarter of 2015. This decline is primarily attributable to the loss of business with large

national customers and lower sales at our Mexican subsidiary. These were partially offset by growth in e-tail customers and technology resellers.

Sales of traditional office products decreased in the second quarter of 2015 by 11.0% versus the second quarter of 2014. Traditional office supplies represented 21.9% of the Company’s consolidated net sales for the second quarter of 2015. This decline was driven by a decline in cut-sheet paper sales as we exit low margin business and losing the first-call supplier status with Office Depot. The traditional office products decline was partially offset by continued growth in e-tailers and a rebound in government spending. Net of incremental sales in janitorial products to Office Depot, we estimate the impact of the 2014 changes to our relationship to be a $0.14 to $0.22 reduction in earnings per share in 2015.

Industrial supplies sales in the second quarter of 2015 increased by 48.1% compared to the same prior-year period. Sales of industrial supplies accounted for 16.0% of the Company’s net sales for the second quarter of 2015 and reflected solid sales momentum from our acquisitions, which contributed $86.7 million in incremental sales and positively impacted earnings per share. Without the acquisitions, industrial sales declined 11.6% over the prior-year quarter. Approximately 25% of our core industrial business is exposed to energy sector resellers which have been impacted by the decline in oil prices resulting in sales declines in our general industrial and energy channels. We expect this impact to continue throughout the year.

Office furniture sales in the second quarter of 2015 decreased 0.2% compared to the second quarter of 2014. Office furniture accounted for 5.9% of the Company’s second quarter of 2015 consolidated net sales. Within this category, the loss of sales at Office Depot was mostly offset by growth in other large customers and e-tailers.

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

Gross Profit and Gross Margin Rate. Gross profit for the second quarter of 2015 was $212.1 million, compared to $199.5 million in the second quarter of 2014. The gross margin rate of 15.8% was up 69 basis points (bps) from the prior-year quarter gross margin rate of 15.1%. Our acquisitions added an incremental 29 basis points to our gross margin rate in the quarter. Excluding the impact of our acquisitions, our gross margin rate benefited from a favorable product mix.

Operating Expenses. Operating expenses for the second quarter were $158.2 million or 11.8% of sales, including $1.7 million related to repositioning actions. Adjusted operating expenses were $156.4 million or 11.7% of sales compared with $142.2 million or 10.8% of sales in the same period last year. The $14.2 million increase was driven by $12.8 million of incremental expenses from acquisitions.

Interest Expense, net. Interest expense, net for the second quarter of 2015 was $4.8 million compared to $3.8 million in the second quarter of 2014. This was driven by higher debt outstanding related to our acquisition in the fourth quarter of 2014. Interest expense is expected to be higher in 2015 than in the prior year.

Income Taxes. Income tax expense was $18.9 million for the second quarter of 2015, compared with $20.1 million for the same period in 2014. The Company’s effective tax rate was 38.4% for the current-year quarter and 37.6% for the same period in 2014.

Net Income. Net income for the second quarter of 2015 totaled $30.3 million or $0.79 per diluted share, including $0.9 million after-tax, or $0.03 per diluted share, of costs related to repositioning actions. Adjusted net income was $31.2 million, or $0.82 per diluted share, compared with net income of $33.3 million or $0.85 per diluted share for the same three-month period in 2014.

Results of Operations—Six Months Ended June 30, 2015 Compared with the Six Months Ended June 30, 2014

Net Sales. Net sales for the first six months of 2015 were $2.67 billion. The following table summarizes net sales by product category for the six-month periods ended June 30, 2015 and 2014 (in thousands):

Sales in the technology products category (primarily ink and toner) were flat to the third quarter of 2013. This category accounted for 26.8% of net sales for the third quarter of 2014. Sales declines in this category mainly resulted from a new distribution policy by our largest product line manufacturer that limits our sales to certain authorized resellers. This negative impact was offset by sales to certain large customers during the quarter and the addition of new business.

Sales in the janitorial and breakroom supplies product category increased ~~12.1%~~5.6% in the ~~third quarter~~first six months of ~~2014~~2015 compared to the ~~third quarter~~first six months of ~~2013.~~2014. This category accounted for ~~27.2%~~27.1% of the Company’s ~~third quarter 2014~~first six months of 2015 consolidated net sales. Sales growth in this category was driven by ~~enhanced product line launches which increased breakroom sales through our traditional channels as well as 2.4% of incremental sales from~~ being named the primary supplier for Office Depot’s janitorial ~~and breakroom business.~~

Sales of traditional office products increased in the third quarter of 2014 by 1.4% versus the third quarter of 2013. Traditional office supplies represented 25.4% of the Company’s consolidated net sales for the third quarter of 2014. Within this category, we saw continued double-digitbusiness, growth in ~~e-tailers, a rebound in government spending,~~e-tail and ~~growth with certain larger customers. These were partially offset by lower sales of cut-sheet paper and the continued effects of workplace digitization which is lowering overall consumption.~~

Industrial supplies sales in the third quarter of 2014 increased by 24.4% compared to the same prior-year period. Sales of industrial supplies accounted for 11.5% of the Company’s net sales for the third quarter of 2014 and reflected solid sales momentum in the general industrial channel and double-digit growth in the safety and e-commerce channels. We also saw moderate growth in the oilfield-pipeline and welding channels. The acquisition of CPO contributed $21.9 million in incremental sales which benefited the quarterly growth rate. Without CPO, industrial sales increased 7.7% over the prior-year quarter.

Office furniture sales in the third quarter of 2014 decreased 0.7% compared to the third quarter of 2013. Office furniture accounted for 6.0% of the Company’s third quarter of 2014 consolidated net sales. Declines in this category are due to lower sales in national accounts offset by increased sales to ~~e-commerce~~independent dealer customers.

~~The remainder of the Company’s third quarter 2014 net sales was composed of freight and other revenues.~~

~~Gross Profit and Gross Margin Rate.~~ Gross profit for the third quarter of 2014 was $211.0 million, compared to $203.7 million in the third quarter of 2013. The gross margin rate of 14.9% was down 37 basis points (bps) from the prior-year quarter gross margin rate of 15.2%. This decline was due primarily from higher freight costs (55 bps) and higher inventory related costs (15 bps). This decline was partially offset by favorable product margins (30 bps), which was driven by increased supplier allowances, and lower advertising expenses. CPO had a favorable impact (15 bps) on the gross margin rate in the quarter. Gross margin is expected to be volatile as we diversify and invest in the business.

~~Operating Expenses.~~ Operating expenses for the third quarter were $146.6 million or 10.3% of sales, compared with $136.3 million or 10.2% of sales in the same period last year. Operating expenses were unfavorably impacted by the addition of CPO (25 bps) and increased bad debt expense (10 bps). Current quarter operating expenses were also impacted by savings from favorable capitalization

of purchase, storage, and handling costs (20 bps). The Company incurred approximately $0.5 million in incremental expenses in the quarter in addition to the internal resources deployed to the initiative to combine the Company’s office product and janitorial platforms.

~~Interest Expense, net.~~ Interest expense, net for the third quarter of 2014 was $4.0 million compared to $2.7 million in the third quarter of 2013. This was driven by higher debt outstanding as well as the issuance of seven-year notes in January 2014, which replaced floating rate debt with long term, fixed rate debt. Interest expense is expected to be higher in 2014 than in the prior year.

~~Income Taxes.~~ Income tax expense was $22.3 million for the third quarter of 2014, compared with $24.2 million for the same period in 2013. The Company’s effective tax rate was 36.9% for the current-year quarter and 37.4% for the same period in 2013. The current quarter tax rate was favorably impacted by net favorable permanent differences, a favorable federal return to provision adjustment, and a decrease in state reserves.

~~Net Income.~~ Net income for the third quarter of 2014 totaled $38.2 million or $0.98 per diluted share, compared with net income of $40.5 million or $1.01 per diluted share for the same three-month period in 2013.

~~Results of Operations—Nine Months Ended September 30, 2014 Compared with the Nine Months Ended September 30, 2013~~

~~Net Sales.~~ Net sales for the first nine months of 2014 were $3.99 billion. The following table summarizes net sales by product category for the nine-month periods ended September 30, 2014 and 2013 (in thousands):

Sales in the technology products category (primarily ink and toner) decreased in the first ~~nine~~six months of ~~2014~~2015 by ~~1.6%~~3.0% versus the first ~~nine~~six months of ~~2013.~~2014. This category ~~which continues to represent the largest percentage of the Company’s consolidated net sales on a year to date basis,~~ accounted for ~~27.6%~~26.3% of net sales for the first ~~nine~~six months of ~~2014.~~2015. Sales ~~declines in this category were partially~~declined due to ~~a new distribution policy by~~the loss of business with Office Depot, lower sales at our ~~largest product line manufacturer that limits~~Mexican subsidiary and reduced demand in our independent channel. The sales ~~to certain authorized resellers. This negative impact~~decline was partially offset by ~~new business with certain large customers.~~

Sales in the janitorial and breakroom supplies product category increased 7.4% in the first nine months of 2014 compared to the first nine months of 2013. This category accounted for 27.0% of the Company’s first nine months of 2014 consolidated net sales. Sales growth in ~~this category was driven by gains in breakroom as we launched an enhanced product line as well as incremental sales from now being the primary supplier for Office Depot’s janitorial~~e-tailers and ~~breakroom business.~~technology resellers.

Sales of traditional office products ~~increased~~decreased in the first ~~nine~~six months of ~~2014~~2015 by ~~1.7%~~9.8% versus the first ~~nine~~six months of ~~2013.~~2014. Traditional office supplies represented ~~25.4%~~22.1% of the Company’s consolidated net sales for the first ~~nine~~six months of ~~2014. Within~~2015. The decline in this category ~~higher sales~~was primarily driven by the decline of cut-sheet paper ~~continued double-digit growth in sales to e-tailers,~~as we exited low margin business and ~~a rebound in government spending were partially offset by~~ the ~~continued effects~~loss of ~~workplace digitization which is lowering overall consumption.~~first call supplier status with Office Depot.

Industrial supplies sales in the first ~~nine~~six months of ~~2014~~2015 increased by ~~12.2%~~52.4% compared to the same prior-year ~~period. Sales of industrial supplies~~period and accounted for ~~11.1%~~15.9% of the Company’s net sales for the first ~~nine~~six months of ~~2014. Increases in the general industrial, oilfield-pipeline and safety channels were partially offset by the continued decline in welding. CPO~~2015. Our acquisitions contributed ~~$30.1~~$176.8 million in incremental ~~sales which benefited the growth rate.~~sales. Excluding sales from ~~CPO,~~acquisitions, industrial supplies sales ~~increased 4.6%~~declined 11.0% over the same period last year, due to declines in our general industrial and energy channels. We expect this impact to continue throughout the year.

Office furniture sales in the first ~~nine~~six months of ~~2014 decreased 0.7%~~2015 increased 1.9% compared to the first ~~nine~~six months of ~~2013.~~2014. Office furniture accounted for 5.9% of the Company’s first ~~nine~~six months of ~~2014~~2015 consolidated net sales. ~~Sales~~Improved sales with a large national customer and growth in ~~this category were down slightly due~~e-tail and independent resellers more than offset lost sales to ~~lower sales in independent channel dealers and national accounts offset by growth with e-tailer customers.~~Office Depot.

The remainder of the Company’s first ~~nine~~six months of ~~2014~~2015 net sales was composed of freight and other revenues.

Gross Profit and Gross Margin Rate. Gross profit for the first ~~nine~~six months of ~~2014~~2015 was ~~$597.6~~$416.5 million, compared to ~~$594.1~~$386.5 million in the first ~~nine~~six months of ~~2013.~~2014. The gross margin rate of ~~15.0%~~15.6% was ~~down 40~~up 56 basis points (bps) from the prior-year period gross margin rate of ~~15.4%~~15.0%. This ~~decline~~increase was due ~~primarily~~ to lower product margin (15 bps) which included a shifting product and customer mix compared to the prior-year period, offset by favorable supplier allowances. Gross margin was also unfavorably affected by higher freight costs (20acquisitions (37 bps) and ~~higher inventory-related adjustments driven by inflation (5 bps).~~a favorable product mix.

Operating Expenses. Operating expenses for the first ~~nine~~six months of ~~2014~~2015 were ~~$437.6~~$356.5 million or ~~11.0%~~13.3% of sales, compared with ~~$442.6~~$291.0 million or ~~11.5%~~11.3% of sales in the same period last year. ~~Excluding the $14.4 million network optimization and cost reduction charge in the first nine months of 2013, adjusted operating expenses were $428.1 million or 11.1% of sales in 2013.~~ Current period operating expenses were affected by ~~lower employee-related expenses (15 bps) offset by investments~~acquisitions which added an incremental $30.3 million in ~~the business.~~operating expenses. The Company incurred approximately ~~$2.5~~$2.4 million in the first ~~nine~~six months of ~~2014~~2015 related to the initiative to combine the Company’s office product and janitorial platforms.

Interest Expense, net. Interest expense, net for the first ~~nine~~six months of ~~2014~~2015 was ~~$11.2~~$9.6 million compared to ~~$8.7~~$7.2 million in the first ~~nine~~six months of ~~2013. This was driven primarily by higher borrowings in the period as well as the issuance of seven-year notes in January 2014 which replaced floating rate debt with long-term, fixed rate debt.~~2014.

Income Taxes. Income tax expense was ~~$55.4~~$24.1 million for the first ~~nine~~six months of ~~2014,~~2015, compared with ~~$53.8~~$33.1 million for the same period in ~~2013.~~2014. The Company’s effective tax rate was ~~37.3%~~47.8% for the current-year period and ~~37.7%~~37.5% for the same period in ~~2013.~~2014.

Net Income. Net income for the first ~~nine~~six months of ~~2014~~2015 totaled ~~$93.4~~$26.3 million or ~~$2.38~~$0.69 per diluted share, including $24.8 million after-tax, or $0.64 per diluted share, of costs related to repositioning actions. Adjusted net income was $51.1 million, or $1.33 per diluted share, compared with net income of ~~$89.0~~$55.2 million or ~~$2.21~~$1.40 per diluted share for the same ~~nine-month~~six-month period in ~~2013. Adjusted for the impact of the network optimization and cost reduction charge in the first nine months of 2013, net income was $98.0 million or $2.43 per diluted share in the prior-year period.~~2014.

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

Net cash provided by operating activities for the ~~nine~~six months ended ~~September~~June 30, ~~2014~~2015 totaled ~~$93.7~~$120.8 million, compared with ~~$79.4~~$78.9 million in the same ~~nine-month~~six-month period of ~~2013.~~2014. The current nine-month period cash flow was positively affected by a reduction in inventory levels from December 31, 2013 and a favorable change in accounts payable, partially offset by higher accounts receivables. Additionally in53% improvement over the ~~first quarter of 2013, the Company paid a cash contribution~~prior year demonstrates our commitment to ~~its pension plans totaling $13.0 million. The cash contribution to the pension plan in the first quarter of 2014 was $2.0 million.~~effectively manage working capital.

Net cash used in investing activities for the first ~~nine~~six months of ~~2014~~2015 was ~~$41.3~~$12.4 million, compared with ~~$19.3~~$35.6 million for the ~~nine~~six months ended ~~September~~June 30, ~~2013. This included the $26.7 million acquisition, net of cash acquired, of CPO in May~~ 2014. For the full year ~~2014,~~2015, the Company expects capital spending, excluding acquisitions, to be approximately ~~$20.0~~$30.0 million to ~~$25.0~~$35.0 million. On July 14, 2015, the Company’s Board of Directors approved the payment of a $0.14 per share dividend payable to stockholders of record as of September 15, 2015 to be paid on October 15, 2015.

Net cash used in financing activities for the ~~nine~~six months ended ~~September~~June 30, ~~2014~~2015 totaled ~~$49.8~~$95.0 million, compared with ~~$61.0~~$34.1 million in the prior-year period. Net cash used in financing activities during the first ~~nine~~six months of ~~2014~~2015 was impacted by ~~$12.2~~$52.7 million in net ~~borrowings~~repayments under debt arrangements, ~~offset by $43.0~~$31.2 million in share repurchases and ~~$16.4~~$10.7 million in payments of cash dividends.

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

Financing available from debt and the sale of accounts receivable as of ~~September~~June 30, ~~2014,~~2015, is summarized below (in millions):

Maximum financing available under:
2013 Credit Agreement	$	700.0			$	700.0
2013 Note Purchase Agreement		150.0				150.0
Receivables Securitization Program ⁽¹⁾		200.0				200.0
Maximum financing available			$	1,050.0			$	1,050.0
Amounts utilized:
2013 Credit Agreement		195.0				311.1
2013 Note Purchase Agreement		150.0				150.0
Receivables Securitization Program ⁽¹⁾		200.0				200.0
Outstanding letters of credit		11.1				11.1
Total financing utilized				556.1				672.2
Available financing, before restrictions				493.9				377.8
Restrictive covenant limitation				78.0				-
Available financing as of September 30, 2014			$	415.9
Available financing as of June 30, 2015							$	377.8

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

We believe that our operating cash flow and financing capacity, as described, provide adequate liquidity for operating the business for the foreseeable future. Refer to Note 7,8, “Debt”, for further descriptions of the provisions of our financing facilities as well as Note 9 “Debt” in our Annual Report on Form 10-K for the year-ended December 31, ~~2013.~~2014.

During the ~~nine-month~~six-month period ended ~~September~~June 30, ~~2014,~~2015, contractual obligations have increased ~~$18.0~~$78.2 million from those disclosed in our Annual Report on Form 10-K for the year ended December 31, ~~2013, primarily~~2014, driven by ~~a new software license~~the renewed corporate office building lease and ~~maintenance agreement and renewed building leases.~~other facility lease renewals.

The Company is subject to market risk associated principally with changes in interest rates and foreign currency exchange rates. There were no material changes to the Company’s exposures to market risk during the first ~~nine~~six months of ~~2014~~2015 from those disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2013.~~2014.

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

During the fiscal quarter ended ~~September~~June 30, ~~2014,~~2015, there have been no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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

For information regarding risk factors, see “Risk Factors” in Item 1A of Part I of the Company’s Form 10-K for the year ended December 31, ~~2013.~~2014. There have been no material changes to the risk factors described in such Form 10-K.

2014 Fiscal Month

Total Number
of Shares
Purchased

Average Price
Paid per Share

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

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

July 1, 2014 to July 31, 2014

176,499

$
40.08

176,499

$
54,301,155

August 1, 2014 to August 31, 2014

106,784

40.28

106,784

50,000,029

September 1, 2014 to September 30, 2014

-

-

-

50,000,029

Total Third Quarter

283,283

$
-

283,283

$
50,000,029

2015 Fiscal Month	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of a Publicly Announced Program		Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program
April 1, 2015 to April 30, 2015		86,793	$	41.98		86,793	$	122,548,958
May 1, 2015 to May 31, 2015		115,048		39.81		115,048		117,968,784
June 1, 2015 to June 30, 2015		176,621		39.57		176,621		110,979,546
Total Second Quarter		378,462	$	40.45		378,462	$	110,979,546

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

Exhibit No.		Description
~~3.1~~3.1*		Third Restated Certificate of Incorporation of the Company, dated as of ~~March 19, 2002~~June 1, 2015

3.2*		Amended and Restated Bylaws of the Company, dated as of June 1, 2015

4.1		Note Purchase Agreement, dated as of November 25, 2013, among USI, USSC, and the note purchasers identified therein (the “2013 Note Purchase Agreement”) (Exhibit ~~3.1~~4.4 to the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2001,~~2013, filed on ~~April 1, 2002)~~

~~3.2~~		~~Amended and Restated Bylaws of the Company, dated as of July 21,~~February 19, 2014 ~~(Company’s current report on~~(the “2013 Form ~~8-K, filed on July 24, 2014)~~

~~4.1~~		~~Master Note Purchase Agreement, dated as of October 15, 2007, among United Stationers Inc. (“USI”~~10-K”)~~, United Stationers Supply Co. (“USSC”~~)~~, and the note Purchasers identified therein (Exhibit 4.1 to the Company’s Form 10-Q for the quarter ended June 30, 2010, filed on August 6, 2010)~~

4.2		Parent Guaranty, dated as of ~~October 15, 2007,~~November 25, 2013, by USI in favor of the holders of the promissory notes identified therein (Exhibit ~~4.4~~4.5 to the ~~Company’s~~2013 Form ~~10-Q for the quarter ended September 30, 2007, filed on November 7, 2007)~~10-K)

4.3		Subsidiary Guaranty, dated as of ~~October 15, 2007,~~November 25, 2013, by ~~Lagasse, Inc., United Stationers Technology Services LLC (“USTS”) and United Stationers Financial Services LLC (“USFS”) in favor~~all of the ~~holders~~domestic subsidiaries of ~~the promissory notes identified therein~~USSC (Exhibit ~~4.5~~4.6 to the ~~Company’s~~2013 Form ~~10-Q for the quarter ended September 30, 2007, filed on November 7, 2007)~~10-K)

10.1*10.1		~~Third Amendment to Amended and Restated Transfer and Administration Agreement, dated~~Essendant Inc. 2015 Long-Term Incentive Plan effective as of ~~July 25, 2014, by United Stationers Receivables, LLC, USSC, USFS, PNC Bank, National Association and~~May 20, 2015 (Appendix A to the ~~Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch.~~2015 DEF 14-A Proxy Statement)**

10.2*10.2		~~Equity Purchase~~Letter Agreement dated June 4, 2015 among Essendant Inc., Essendant Co. and Robert B. Aiken, Jr. (Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed on June 9, 2015)**

10.3		Third Omnibus Amendment to Transaction Documents dated as of ~~September 10, 2014, by USSC, Richard Bell, Lauren R. Bell, Alison R. Bell Keim, Andrew Keim, Chant Tobi, Donald R. Bernhardt,~~June 26, 2015 between Essendant Co., Essendant Receivables LLC, Essendant Financial Services LLC, The ~~Bell Family Trust for Lauren Bell, The Bell Family Trust for Alison (Bell) Keim, 6772731 Canada Inc.~~Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch, and ~~Logistics Resource Group, L.P. In accordance with Item 601(b)(2) of Regulation S-K, the schedules and exhibit~~PNC Bank, National Association (Exhibit 10.1 to the Agreement are not being filed. The Agreement contains a list briefly identifying the contents of all omitted schedules and exhibits and the Company hereby agrees to furnish supplementally a copy of any omitted schedule and exhibits to the Securities and Exchange Commission upon request.Company’s Current Report on Form 8-K, filed on July 2, 2015)

31.1*		Certification of Chief Executive Officer, dated as of ~~October~~July 23, ~~2014,~~2015, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2*		Certification of Chief Financial Officer, dated as of ~~October~~July 23, ~~2014,~~2015, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1*		Certification of Chief Executive Officer and Chief Financial Officer, dated as of ~~October~~July 23, ~~2014,~~2015, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101*		The following financial information from ~~United Stationers~~Essendant Inc.’s Quarterly Report on Form 10-Q for the period ended ~~September~~June 30, ~~2014,~~2015, filed with the SEC on ~~October~~July 23, ~~2014,~~2015, formatted in Extensible Business Reporting Language (XBRL): (i) the Condensed Consolidated Statement of Income for the ~~three-~~three-month and ~~nine-month~~six-month periods ended ~~September~~June 30, ~~2014~~2015 and ~~2013,~~2014, (ii) the Condensed Consolidated Balance Sheet at ~~September~~June 30, ~~2014~~2015 and December 31, ~~2013,~~2014, (iii) the Condensed Consolidated Statement of Cash Flows for the ~~nine-month period~~six-month periods ended ~~September~~June 30, ~~2014~~2015 and ~~2013,~~2014, and (iv) Notes to Condensed Consolidated Financial Statements.

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Large accelerated filer	x	Accelerated filer	¨

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

		Page No.
PART I — FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets as of ~~September~~June 30, ~~2014~~2015 and December 31, ~~2013~~2014		3
Condensed Consolidated Statements of Income for the Three Months and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2014~~2015 and ~~2013~~2014		4
Condensed Consolidated Statements of Comprehensive Income for the Three Months and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2014~~2015 and ~~2013~~2014		5
Condensed Consolidated Statements of Cash Flows for the ~~Nine~~Six Months Ended ~~September~~June 30, ~~2014~~2015 and ~~2013~~2014		6
Notes to Condensed Consolidated Financial Statements		7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		1817
Item 3. Quantitative and Qualitative Disclosures About Market Risk		25
Item 4. Controls and Procedures		25
PART II — OTHER INFORMATION
Item 1. Legal Proceedings		2625
Item 1A. Risk Factors		2625
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		26
Item 6. Exhibits		27
SIGNATURES		28

Purchase price, net of cash acquired				$	32,225
Accounts receivable	$	(2,956	)
Inventories		(13,051	)
Other current assets		(269	)
Property, plant and equipment, net		(488	)
Intangible assets		(12,800	)
Total assets acquired					(29,564	)
Accounts payable		16,911
Accrued liabilities		2,580
Deferred income taxes		3,453
Other long-term liabilities		90
Total liabilities assumed					23,034
Goodwill				$	25,695

Purchase price, net of cash acquired				$	145,873
Accounts receivable	$	(44,815	)
Inventories		(55,491	)
Other current assets		(1,299	)
Property, plant and equipment, net		(4,408	)
Other assets		(442	)
Intangible assets		(39,330	)
Total assets acquired					(145,785	)
Accounts payable		32,383
Accrued liabilities		5,254
Deferred income taxes		1,333
Other long-term liabilities		52
Total liabilities assumed					39,022
Goodwill				$	39,110

Purchase price, net of cash acquired				$	31,825
Inventories	$	(13,051	)
Accounts receivable		(2,658	)
Other current assets		(307	)
Property, plant and equipment, net		(488	)
Intangible assets		(12,800	)
Total assets acquired					(29,304	)
Accounts payable		17,124
Accrued liabilities		2,130
Other long-term liabilities		51
Deferred income taxes		3,233
Total liabilities assumed					22,538
Goodwill				$	25,059

	Amount
Assets held for sale:
Cash and cash equivalents	$	4,119
Accounts receivable, less allowance for doubtful accounts		6,720
Inventories		6,527
Other current assets		418
Net property, plant equipment		110
Other assets		657
Held-for-sale valuation allowance		(10,671	)
Total assets held for sale	$	7,880

Liabilities held for sale:
Accounts payable		3,447
Accrued liabilities		3,184
Other long-term liabilities		538
Total liabilities held for sale	$	7,169

Goodwill, balance as of December 31, 2013	$	356,811
Acquisition of CPO		25,059
Currency translation adjustment		(183	)
Goodwill, balance as of September 30, 2014	$	381,687

Goodwill, balance as of December 31, 2014	$	398,042
Impairment		(3,319	)
Purchase accounting adjustments		9,184
Currency translation adjustment		(1,362	)
Goodwill, balance as of June 30, 2015	$	402,545

	Amount of Gain (Loss) Recognized in OCI on Derivative (Effective Portion)							Amount of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)
	For the Three Months Ended September 30, 2014			For the Nine Months Ended September 30, 2014			Location of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)	For the Three Months Ended September 30, 2014		For the Nine Months Ended September 30, 2014
July 2012 Swap Transaction	$	748		$	(1	)	Interest expense, net	$	281	$	281

	Amount of Gain (Loss) Recognized in OCI on Derivative (Effective Portion)							Amount of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)
	For the Three Months Ended September 30, 2013			For the Nine Months Ended September 30, 2013			Location of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)	For the Three Months Ended September 30, 2013		For the Nine Months Ended September 30, 2013
November 2007 Swap Transaction	$	-		$	(77	)	Interest expense, net	$	-	$	(228	)
July 2012 Swap Transaction		(574	)		878		Interest expense, net		-		-
June 2013 Swap Transaction		(578	)		1,121		Interest expense, net		-		-

	Six Months Ended June 30,
	2015⁽¹⁾		2014⁽¹⁾
Janitorial and breakroom supplies	$	725,318	$	686,668
Technology products		703,083		724,780
Traditional office products (including cut-sheet paper)		590,305		654,434
Industrial supplies		425,262		279,009
Office furniture		156,635		153,656
Freight revenue		62,258		58,818
Services, Advertising and Other		11,313		16,811
Total net sales	$	2,674,174	$	2,574,176

	Nine Months Ended September 30,
	2014⁽¹⁾		2013⁽¹⁾
Technology products	$	1,102,085	$	1,120,372
Janitorial and breakroom supplies		1,076,679		1,002,715
Traditional office products (including cut-sheet paper)		1,016,260		999,356
Industrial supplies		441,580		393,463
Office furniture		237,591		239,359
Freight revenue		92,120		79,896
Services, Advertising and Other		27,808		26,494
Total net sales	$	3,994,123	$	3,861,655

2014 Fiscal Month	Total Number of Shares Purchased		Average Price Paid per Share		Total Number of Shares Purchased as Part of a Publicly Announced Program		Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program
July 1, 2014 to July 31, 2014		176,499	$	40.08		176,499	$	54,301,155
August 1, 2014 to August 31, 2014		106,784		40.28		106,784		50,000,029
September 1, 2014 to September 30, 2014		-		-		-		50,000,029
Total Third Quarter		283,283	$	-		283,283	$	50,000,029

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

Date: ~~October~~July 23, ~~2014~~2015			/s/ Todd A. Shelton
			Todd A. Shelton
			Senior Vice President and Chief Financial Officer

Year	Amount
2015	$	14,863
2016		11,910
2017		9,801
2018		7,248
2019		5,477