<PAGE>

--------------------------------------------------------------------------------
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                    FORM 10-K

(Mark One)
     /X/  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
          EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 1996
                                       or

          TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
          EXCHANGE ACT OF 1934  (No Fee Required) For the transition period
          from  __________  to  ____________

          Commission file numbers:      United Stationers Inc.:  0-10653
                                        United Stationers Supply Co.:  33-59811


                             UNITED STATIONERS INC.
                          UNITED STATIONERS SUPPLY CO.
             (Exact name of Registrant as specified in its charter)

UNITED STATIONERS INC.:  DELAWARE       UNITED STATIONERS INC.:  36-3141189
UNITED STATIONERS SUPPLY CO.: ILLINOIS  UNITED STATIONERS SUPPLY CO.: 36-2431718
(State or Other Jurisdiction of           (I.R.S. Employer Identification No.)
 Incorporation or Organization)


                               2200 EAST GOLF ROAD
                        DES PLAINES, ILLINOIS  60016-1267
                                 (847)  699-5000


    (Address, Including Zip Code and Telephone Number, Including Area Code,
                  of Registrants' Principal Executive Offices)

           SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

                                                       Name of Each Exchange
   Title of Each Class                                  on Which Registered
         NONE                                                   N/A
   -------------------                                 ---------------------

           SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
              United Stationers Inc.:  Common Stock $0.10 par value
                                (Title of Class)


INDICATE BY CHECK MARK WHETHER EACH REGISTRANT: (1) HAS FILED ALL REPORTS
REQUIRED TO BE FILED BY SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
1934 DURING THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE
REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH
FILING REQUIREMENTS FOR THE PAST 90 DAYS.
UNITED STATIONERS INC.:     YES  ( X )      NO  (   )
UNITED STATIONERS SUPPLY CO.:     YES  ( X )     NO  (   )

INDICATE BY CHECK MARK IF DISCLOSURE OF DELINQUENT FILERS PURSUANT TO ITEM 405
OF REGULATION S-K IS NOT CONTAINED HEREIN, AND WILL NOT BE CONTAINED, TO THE
BEST OF REGISTRANT'S KNOWLEDGE, IN DEFINITIVE PROXY OR INFORMATION STATEMENT
INCORPORATED BY REFERENCE IN PART III OF THIS FORM 10-K OR ANY AMENDMENT TO THIS
FORM 10-K. ( X )

AGGREGATE MARKET VALUE OF THE VOTING STOCK (WHICH CONSISTS SOLELY OF SHARES OF
COMMON STOCK) HELD BY NON-AFFILIATES OF UNITED STATIONERS INC. AS OF MARCH 11,
1997, BASED ON THE LAST SALE PRICE OF THE COMMON STOCK AS QUOTED BY THE NASDAQ
NATIONAL MARKET SYSTEM ON SUCH DATE: $61,807,011.  UNITED STATIONERS SUPPLY CO.
HAS NO SHARES OF VOTING STOCK OUTSTANDING HELD BY NON-AFFILIATES.

ON MARCH 11, 1997,  UNITED STATIONERS INC. HAD OUTSTANDING 11,446,306 SHARES OF
COMMON STOCK, PAR VALUE $0.10 PER SHARE, AND 758,994 SHARES OF NONVOTING COMMON
STOCK, $0.01 PAR VALUE PER SHARE.  ON MARCH 11, 1997, UNITED STATIONERS SUPPLY
CO. HAD 880,000 SHARES OF COMMON STOCK, $1.00 PAR VALUE PER SHARE OUTSTANDING.

                      DOCUMENTS INCORPORATED BY REFERENCE:


PART OF FORM 10-K
Part III  Portions of United Stationers Inc.'s definitive Proxy Statement
          relating to the 1997 Annual Meeting of Stockholders of United
          Stationers Inc., to be filed within 120 days of the fiscal year end of
          United Stationers Inc.

--------------------------------------------------------------------------------


<PAGE>

                     UNITED STATIONERS INC. AND SUBSIDIARIES

                          UNITED STATIONERS SUPPLY CO.

              FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996


                       CONTENTS AND CROSS REFERENCE SHEET
           FURNISHED PURSUANT TO GENERAL INSTRUCTION G(4) OF FORM 10-K


 
FORM 10-K  FORM 10-K                                                   FORM 10-K
PART NO.   ITEM NO.   DESCRIPTION                                       PAGE NO.
---------  ---------  -----------                                      ---------

    I                 Explanatory Note                                        1
              1       Business                                                1
                         General                                              1
                         Products                                           1-2
                         Customers                                            2
                         Marketing and Customer Support                       3
                         Distribution                                         4
                         Purchasing and Merchandising                         4
                         Competition                                        4-5
                         Employees                                            5
              2       Properties                                              5
              3       Legal Proceedings                                       6
              4       Submission of Matters to a Vote of Security
                        Holders                                               6

   II         5       Market for Registrant's Common Equity
                         and Related Stockholder Matters                      6
                      Quarterly Stock Price Data                              7
              6       Selected Consolidated Financial Data                 7-10
              7       Management's Discussion and Analysis of
                         Financial Condition and Results of
                         Operations                                       11-18
              8       Financial Statements and Supplementary Data         18-54
              9       Changes in and Disagreements with Accountants
                         on Accounting and Financial Disclosure              55
  III        10       Directors and Executive Officers of the
                        Registrant                                        55-57
             11       Executive Compensation                                 58
             12       Security Ownership of Certain Beneficial
                         Owners and Management                               58
             13       Certain Relationships and Related Transactions         58
   IV        14       Exhibits, Financial Statements, Schedules and
                         Reports on Form 8-K                              58-64

Signatures                                                                   65


<PAGE>

                                     PART I


EXPLANATORY NOTE

THIS INTEGRATED FORM 10-K IS FILED PURSUANT TO THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED, FOR EACH OF UNITED STATIONERS INC., A DELAWARE CORPORATION,
AND ITS WHOLLY OWNED SUBSIDIARY, UNITED STATIONERS SUPPLY CO., AN ILLINOIS
CORPORATION (COLLECTIVELY, THE "COMPANY").  UNITED STATIONERS INC. IS A HOLDING
COMPANY WITH NO OPERATIONS SEPARATE FROM ITS OPERATING SUBSIDIARY, UNITED
STATIONERS SUPPLY CO. AND ITS SUBSIDIARIES.  NO SEPARATE FINANCIAL INFORMATION
FOR UNITED STATIONERS SUPPLY CO. AND ITS SUBSIDIARIES HAS BEEN PROVIDED HEREIN
BECAUSE MANAGEMENT FOR THE COMPANY BELIEVES SUCH INFORMATION WOULD NOT BE
MEANINGFUL BECAUSE (i) UNITED STATIONERS SUPPLY CO. IS THE ONLY DIRECT
SUBSIDIARY OF UNITED STATIONERS INC., WHICH HAS NO OPERATIONS OTHER THAN THOSE
OF UNITED STATIONERS SUPPLY CO. AND (ii) ALL ASSETS AND LIABILITIES OF UNITED
STATIONERS INC. ARE RECORDED ON THE BOOKS OF UNITED STATIONERS SUPPLY CO.  THERE
IS NO MATERIAL DIFFERENCE BETWEEN UNITED STATIONERS INC. AND UNITED STATIONERS
SUPPLY CO. FOR THE DISCLOSURES REQUIRED BY THE INSTRUCTIONS TO FORM 10-K AND
THEREFORE, UNLESS OTHERWISE INDICATED, THE RESPONSES SET FORTH HEREIN APPLY TO
EACH OF UNITED STATIONERS INC. AND UNITED STATIONERS SUPPLY CO.


ITEM 1.   BUSINESS


GENERAL

On March 30, 1995, Associated Holdings, Inc., ("Associated"), was merged with
and into United Stationers Inc., ("United"), with United surviving (the
"Merger").  Immediately thereafter, Associated Stationers, Inc. ("ASI"), the
wholly owned subsidiary of Associated, was merged with and into United
Stationers Supply Co. ("USSC"), the wholly owned subsidiary of United, with USSC
surviving.  Although United was the surviving corporation in the Merger, the
transaction was treated as a reverse acquisition for accounting purposes with
Associated as the acquiring corporation.

The terms "Associated" and "United" will be used to refer to either the
respective pre-Merger corporations or specific aspects of the post-Merger
Company's business.  United is the parent company of its direct wholly owned
subsidiary, USSC.  Except where the context clearly indicates otherwise,
including references to the capital structure of United Stationers Inc., the
term "Company" hereinafter used includes United Stationers Inc. together with
its subsidiary

On October 31, 1996, USSC acquired all of the capital stock of Lagasse Bros.,
Inc. ("Lagasse"), an $80 million wholesaler of janitorial and sanitary supplies.
Lagasse operates as a subsidiary of USSC.

The Company is the largest general line business products wholesaler in the
United States with 1996 net sales of $2.3 billion.  The Company sells its
products through a single national distribution network to more than 15,000
resellers, who in turn sell directly to end users.  These products are
distributed through a computer-based network of warehouse facilities and truck
fleets radiating from 41 distribution centers and 14  Lagasse distribution
centers.


PRODUCTS

The Company markets the broadest product line in the industry, including
traditional office products, computer supplies, office furniture, and facilities
and maintenance supplies. As part of the Company's business strategy to acquire
incremental sales and increase market share through complementary product
offerings, the Company began to focus on specialty product segments in 1991 and
has expanded steadily upon this concept since then. The Company's product
offerings, comprised of more than 30,000 items, may be divided into four primary
categories:


                                        1
<PAGE>


TRADITIONAL OFFICE PRODUCTS.   The Company's core business continues to be
traditional office products, which include both brand-name products and the
Company's private brand products. Traditional office products include writing
instruments, paper products, organizers and calendars and various office
accessories. Traditional office products constituted the majority of the
Company's 1996 net sales.

COMPUTERS AND RELATED SUPPLIES.   The Company sells brand name computer
supplies, peripherals and hardware  to computer resellers and office products
dealers. Such office technology constituted approximately 25% of the Company's
1996 net sales.

OFFICE FURNITURE.   The Company's sale of office furniture including leather
chairs, wooden and steel desks and computer furniture has enabled it to become
the nation's largest office furniture wholesaler, with the Company currently
offering nearly 3,000 furniture items from 70 different manufacturers. Office
furniture constituted approximately 14% of the Company's 1996 net sales. The
Company's "Pro-Image" program enables resellers with no previous expertise to
provide high-end furniture and office design services to end-users. The Company
offers national delivery and product "set-up" capabilities to resellers.

OTHER PRODUCTS.   The Company's newest product categories encompass the
facilities management supplies market, which includes janitorial and sanitation
supplies, specialty mailroom and warehouse items, kitchen and cafeteria items,
first aid products and ergonomic products designed to enhance worker
productivity, comfort and safety. Additionally, the Company offers its
"Signature Image" program, which provides resellers with access into the
advertising specialties market (such as imprinted and logo items).


CUSTOMERS

The Company sells exclusively to resellers of business products.  Its 15,000
customers include commercial, contract and retail office products dealers;
members of affiliated groups; members of buying cooperatives; mega-dealers
linked through common ownership; contract and retail office furniture dealers,
office products superstores; mass merchandisers; computer products resellers;
mail order companies; and sanitary supply distributors. No single reseller
accounted for more than 6% of the Company's net sales in 1996.


Commercial dealers and contract stationers are the most significant reseller
channel for office products distribution and typically serve large businesses,
institutions and government agencies. Through industry consolidation, the number
of such dealers has decreased, with the remaining dealers getting larger. Net
sales to these commercial dealers and contract stationers as a group are growing
rapidly.

The number of retail dealers has been declining for some time as the result of
individual retail dealers' inability to compete successfully with the growing
number of superstores and, more recently, as a result of dealerships being
acquired and brought under an umbrella of common ownership. However, many retail
office products dealers have adapted to this highly competitive environment.
Many retail dealers, commercial dealers and contract stationers have joined
forces in marketing or buying groups in order to increase purchasing leverage.
The Company believes it is the leading wholesale source for many of these
groups, providing not only merchandise but also special programs that enable
these dealers to take advantage of their combined strengths.

While the Company maintains and builds its business with commercial dealers,
contract stationers (including the contract stationer divisions of national
office product superstores) and retail dealers, it has also initiated
relationships with most major office products superstore chains. In addition,
the Company supplies inventory and other fulfillment services to the retail
operations of certain superstores, including their direct-to-business delivery
programs.


                                        2
<PAGE>

MARKETING AND CUSTOMER SUPPORT

Substantially all of the Company's 30,000 products are sold through its
comprehensive office products catalogs and flyers. These materials include
general line catalogs, promotional pieces and specialty catalogs for the office
products, office furniture, facilities management supplies and other specialty
markets. The Company produces numerous catalogs for placement with dealers' end-
user customers, including the following annual catalogs: General Line Catalog;
Office Furniture Catalog featuring furniture and accessories; Universal Catalog
promoting the Company's private-brand merchandise; Computer Products Catalog
offering hardware, supplies, accessories and furniture; Facilities and
Maintenance Supplies Catalog featuring janitorial, maintenance, food service,
warehouse and mailroom supplies and a Lagasse catalog offering janitorial and
sanitary supplies. In addition, the Company produces the following quarterly
promotional catalogs:  Action 2000 and Office Saver, each featuring over 1,000
high-volume commodity items, and Computer Concepts, featuring computer supplies,
peripherals, accessories and furniture. The Company also produces separate 8-
page quarterly flyers covering general office supplies, office furniture and
Universal-TM-products. Because commercial dealers, contract stationers and
retail dealers typically distribute only one wholesaler's catalogs in order to
streamline and concentrate order entry, the Company attempts to maximize the
distribution of its catalogs by offering advertising credits to resellers, which
can be used to offset the cost of catalogs.  The Company also offers an
electronic catalog available on CD-Rom and through the Company's web site.  This
catalog features 24,000 business products.

In addition to marketing its products and services through the use of its
catalogs, the Company employs a sales force of approximately 160 salespersons.
The sales force is responsible for sales and service to resellers with which the
Company has an existing relationship, as well as for establishing new
relationships with additional resellers. The Company supplements the efforts of
its sales force through telemarketing.

The Company concentrates its marketing efforts on providing value-added services
to resellers. The Company distributes products that are generally available at
similar prices from multiple sources, and most of its customers purchase their
products from more than one source. As a result, the Company seeks to
differentiate itself from its competitors through a broader product offering, a
higher degree of product availability, a variety of high quality customer
services and prompt distribution capabilities. In addition to emphasizing its
broad product line, extensive inventory, computer integration and national
distribution capabilities, the Company's marketing programs have relied upon two
additional major components. First, the Company produces an extensive array of
catalogs for commercial dealers, contract stationers and retail dealers that are
usually custom imprinted with each reseller's name and sold to these resellers
who, in turn, distribute the catalogs to their customers. Second, the Company
provides its resellers with a variety of dealer support and marketing services,
including business management systems, promotional programs and pricing
services. These services are designed to aid resellers in differentiating
themselves from their competitors by addressing the steps in the end-user's
procurement process.

To assist its resellers with pricing, the Company offers matrix pricing
software. Traditionally, many resellers have priced products on a discount from
the manufacturer's suggested retail price, but recently pricing has shifted
toward a net pricing approach, whereby resellers sell certain products at
significant discounts, assuming that it can recapture the discounts through the
sale of other higher margin products. The Company's matrix pricing program
provides resellers with a resource to assist them in identifying the optimum
pricing mix between high and low margin items and, as a result, enables
resellers to more efficiently manage their gross margins.

The Company offers to its resellers a variety of electronic order entry systems
and business management and marketing programs which enhance the resellers'
ability to manage their businesses profitably. For instance, the Company
maintains EDI systems that link the Company to selected resellers, and
interactive order systems that link the Company to selected resellers and such
resellers to the ultimate end-user. In addition, the Company's electronic order
entry systems allow the reseller to seamlessly forward its customers' orders to
the Company, resulting in the delivery of pre-sold products to the reseller or
directly to its customers. The Company estimates that in 1996, approximately 90%
of its orders were received electronically.


                                        3
<PAGE>


DISTRIBUTION

The Company has a network of 41 regional distribution centers located in 36
metropolitan areas in 25 states, most of which carry the Company's full line of
inventory.  In addition, the Company serves sanitary supply distributors through
14 Lagasse distribution centers.  The Company supplements its regional
distribution centers with 24 local distribution points throughout the United
States that serve as reshipment points for orders filled at the regional
distribution centers. The Company utilizes more than 350 trucks, substantially
all of which are contracted for by the Company, to enable direct delivery from
the regional distribution centers and local distribution points to resellers.

The Company's distribution capabilities are augmented by its proprietary,
computer-driven system. If a reseller places an order for an item that is out of
stock at the Company location which usually serves the particular reseller, the
Company's system will automatically search for the item at alternative
distribution centers. If the item is available at an alternative location, the
system will automatically forward the order to that alternate location, which
will then coordinate shipping with the primary facility and, for the majority of
resellers, provide a single on-time delivery. The system effectively provides
the Company with added inventory support, which enables it to provide higher
service levels to the reseller, to reduce back orders and to minimize time spent
searching for merchandise substitutes, all of which contribute to the Company's
high order fill rate and efficient levels of inventory balances.

Another service offered by the Company to resellers is its "wrap and label"
program, which allows resellers the option to receive orders in accordance with
the specifications of particular end-users. For example, when a reseller
receives orders from a number of separate end-users, the Company groups and
wraps the items individually by end-user so that the reseller need only deliver
the package. The "wrap and label" program is attractive to resellers because it
eliminates the need to break down case shipments and to repackage the orders
before delivering them to the end-user.


PURCHASING AND MERCHANDISING

As the largest national business products wholesaler in the United States, the
Company has substantial purchasing power and can realize significant economies
of scale.  The Company obtains products from over 500 manufacturers. For many of
its manufacturers, the Company believes that it is a significant customer. In
1996, no supplier accounted for more than 11% of the Company's aggregate
purchases. As a centralized corporate function, the Company's merchandising
department interviews and selects suppliers and products for inclusion in the
catalogs. Selection is based upon end-user acceptance and demand for the product
and the manufacturer's total service, price and product quality offering.



COMPETITION

The Company competes with business products manufacturers and with other
national, regional and specialty wholesalers of office products, office
furniture, computer supplies and facility management supplies. Competition
between the Company and manufacturers is based primarily upon net pricing,
minimum order quantity and product availability. Although manufacturers may
provide lower prices to resellers than the Company does, the Company's marketing
and catalog programs, combined with speed of delivery and its ability to offer
resellers a broad line of business products from multiple manufacturers on a
"one-stop shop" basis and with lower minimum order quantities, are important
factors in enabling the Company to compete effectively. See "Marketing and
Customer Support" and "Distribution." Manufacturers typically sell their
products through a variety of distribution channels, including wholesalers and
resellers.


                                        4
<PAGE>

Competition between the Company and other wholesalers is based primarily on net
pricing to resellers, breadth of product lines, availability of products, speed
of delivery to resellers, order fill rates and the quality of its marketing and
other services. The Company believes it is competitive in each of these areas.
Most wholesale distributors of business  products conduct operations regionally
and locally, sometimes with limited product lines such as writing instruments or
computer products. Only one other national wholesaler carries a full line of
office products.

Consolidation has occurred in recent years at all levels of the business
products industry. Consolidation of commercial dealers and contract stationers
has resulted in an increased ability of those resellers to buy goods directly
from manufacturers. In addition, over the last decade, office products
superstores (which largely buy directly from manufacturers) have entered
virtually every major metropolitan market.

Increased competition in the business products industry, together with increased
advertising, has heightened price awareness among end-users. As a result,
purchasers of commodity type office products have become extremely price
sensitive, and therefore the Company has increased its efforts to market to
resellers the continuing advantages of its competitive strengths (as compared to
those of manufacturers and other wholesalers), such as marketing and catalog
programs, speed of delivery, and the ability to offer resellers a "one-stop
shop" for a broad line of business products from multiple manufacturers with
lower minimum order quantities. In addition, such heightened price awareness has
led to margin pressure on commodity office products. In the event that such
trend continues, the Company's profit margins could be adversely affected.


EMPLOYEES

At December 31, 1996, the Company employed approximately 4,900 persons.

The Company considers its relationship with its employees to be good.
Approximately 900 of the shipping, warehouse and maintenance employees at
certain of the Chicago, Detroit, Philadelphia, Baltimore, Los Angeles,
Minneapolis and New York City facilities are covered by collective bargaining
agreements. The agreements expire at various times during the next three years.


ITEM 2.   PROPERTIES

The Company considers its properties to be suitable and adequate for their
intended uses.  These properties consist of the following:

EXECUTIVE OFFICES.  The Company's office facility in Des Plaines, Illinois has
approximately 135,800 square feet of office and storage space.  In September
1993, approximately 47,000 square feet of office space located in Mt. Prospect,
Illinois was leased by the Company.  This lease expires in September of 1999
with an option to renew for two five-year terms.

USSC REGIONAL DISTRIBUTION CENTERS.  The Company presently operates 41
distribution centers in 25 states.  These centers represent, in total,
approximately 7.1 million square feet, of which approximately 4.3 million is
owned and the balance is leased.

LOCAL DISTRIBUTION POINTS.  The Company also operates 24 local distribution
points.  Two are leased by the Company; the other local distribution points are
operated through cross-docking arrangements with third party distribution
companies.

LAGASSE DISTRIBUTION CENTERS.  Lagasse operates 14 leased distribution centers,
specifically serving janitorial and sanitary supply distributors.  These centers
represent, in total, approximately 400,000 square feet.  Its New Orleans
distribution center also includes 22,000 square feet of executive office space.


                                        5
<PAGE>

ITEM 3.   LEGAL PROCEEDINGS

The Company is involved in legal proceedings arising in the ordinary course of
its business.  The Company is not involved in any legal proceeding that it
believes will result, individually or in the aggregate, in a material adverse
effect upon its financial condition or results of operations.


ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

There were no matters submitted to a vote of security holders through the
solicitation of proxies in the fourth quarter of 1996.


                                     PART II

ITEM 5.   MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

QUARTERLY FINANCIAL DATA (DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)(UNAUDITED)

THE COMPANY/ASSOCIATED

<TABLE>
<CAPTION>

                                                                      Income                      Income (Loss)
                                                                      (Loss)                        Per Share
                                                                      Before            Net          Before        Net Income
                                         Net           Gross        Extraordi-        Income      Extraordinary      (Loss)
                                        Sales       Profit (1)       nary Item        (Loss)       Item (2)(5)     Per Share (2)(5)
                                    ------------    ----------      ----------        ------      -------------    ----------------
<S>                                 <C>             <C>             <C>             <C>           <C>              <C>
Year Ended
DECEMBER 31, 1996
First Quarter                       $   586,881       $102,526        $ 8,209        $ 8,209          $0.51          $0.51
Second Quarter                          535,690         87,212          5,273          5,273           0.32           0.32
Third Quarter                           576,254         98,207          8,781          8,781           0.56           0.56
Fourth Quarter                          599,345        103,016          9,730          9,730           0.63           0.63
                                     ----------       --------         ------         ------
Totals                               $2,298,170       $390,961        $31,993        $31,993           2.03           2.03
                                     ----------       --------         ------         ------
                                     ----------       --------         ------         ------

Year Ended
DECEMBER 31, 1995
First Quarter (3)                      $   134,997      $  24,978        ($4,233)(4)    ($5,682)        ($0.72)        ($0.94)
Second Quarter                             529,429         90,563          1,524          1,524           0.07           0.07
Third Quarter                              537,624         93,818          4,173          4,173           0.27           0.27
Fourth Quarter                             549,412         95,154          4,779          4,779           0.29           0.29
                                        ----------       --------         ------         ------
Totals                                  $1,751,462       $304,513         $6,243         $4,794           0.33           0.22
                                        ----------       --------         ------         ------
                                        ----------       --------         ------         ------
</TABLE>


(1)  Gross profit is net of delivery and occupancy costs.  See Note 3
     (Reclassification) to the Consolidated Financial Statements of the Company
     included elsewhere herein.
(2)  Historical earnings per share amounts have been restated to reflect the
     share conversion resulting from the Merger and the 100% stock dividend
     effective November 9, 1995.  Earnings per share are net of preferred stock
     dividends.
(3)  Reflects the results of Associated only.
(4)  The extraordinary item reflects the write-off of financing costs and
     original issue discount relating to the retired debt which was being
     amortized over the life of the original debt.
(5)  As a result of changes in the number of common and common equivalent shares
     during the year, the sum of four quarters' earnings per share will not
     equal earnings per share for the total year.


                                        6
<PAGE>

QUARTERLY STOCK PRICE DATA

The common stock is quoted through the NASDAQ National Market System under
the symbol "USTR."  The following table sets forth on a per share basis,
for the periods indicated, the high and low closing sale prices per share
for the common Stock as reported by the NASDAQ National Market System.  All
stock price information has been restated to reflect the 100% stock dividend
effective November 9, 1995.

                                                  High                Low
     1995
          First Quarter                              *                   *
          Second Quarter                          $9  5/16            $ 8  9/16
          Third Quarter                           $15 1/2             $ 8 11/16
          Fourth Quarter                          $27 3/4             $13  3/4
     1996
          First Quarter                           $30 1/4             $21 1/2
          Second Quarter                          $24 1/2             $19 1/2
          Third Quarter                           $24 1/2             $17 1/2
          Fourth Quarter                          $23                 $19 1/2

*    Due to the significant changes in the Company's capital structure 
     resulting from the Merger, stock price information for the period prior 
     to the Merger has not been included as it is not comparable to the 
     stock price information since the Merger.

On February 28, 1997, there were approximately 1,020 holders of record of common
stock.

The Company does not currently intend to pay any cash dividends on the common 
stock.  Furthermore, as a holding company, the ability of United to pay 
dividends in the future is dependent upon the receipt of dividends or other 
payments from its operating subsidiary, USSC.  The payment of dividends by 
USSC is subject to certain restrictions imposed by the Company's debt 
agreements. See Note 5 to the Consolidated Financial Statements of the 
Company included elsewhere herein.

ITEM 6.   SELECTED CONSOLIDATED FINANCIAL DATA

Set forth below and on the following pages is selected historical consolidated
financial data for the Company and its predecessors.  Although United was the
surviving corporation in the Merger, the Acquisition was treated as a reverse
acquisition for accounting purposes, with Associated as the acquiring
corporation.  Therefore, the income statement and operating and other data for
the year ended December 31, 1995 reflect the financial information of Associated
only for the three months ended March 30, 1995, and the results of the Company
for the nine months ended December 31, 1995.  The balance sheet data at
December 31, 1996 and 1995 reflects the consolidated balances of the Company,
including various Merger-related adjustments.  Income statement data for all
periods presented reflects a reclassification of delivery and occupancy costs
to cost of goods sold from operating expenses.

THE COMPANY/ASSOCIATED

The selected consolidated financial data of Associated's predecessor (the
wholesale division of Boise Cascade Office Products Corporation "BCOP") set
forth below for the one-month period ended January 31, 1992 (when Associated
purchased the wholesale division of BCOP (the "Associated Transaction")) are
derived from the unaudited financial statements of Associated's predecessor for
such period.  Associated accounted for the Associated Transaction using the
purchase method of accounting.  There are material operational and accounting
differences between Associated's predecessor and Associated resulting from the
Associated Transaction.  Accordingly, the historical financial data of
Associated's predecessor may not be comparable in all material respects with
data of Associated.


                                        7
<PAGE>

The selected consolidated financial data of Associated set forth below for the
period from January 31, 1992 to December 31, 1992 and for the years ended
December 31, 1993 and 1994 has been derived from the Consolidated Financial
Statements of Associated which have been audited by Arthur Andersen LLP,
independent public accountants.  The selected consolidated financial data of the
Company for the years ended December 31, 1996 and 1995 (which for Income
Statement and Operating and Other Data includes Associated only for the three
months ended March 30, 1995 and the results of the Company for the nine months
ended December 31, 1995) has been derived from the Consolidated Financial
Statements of the Company which have been audited by Ernst & Young LLP,
independent auditors.  All selected consolidated financial data set forth below
should be read in conjunction with, and is qualified in its entirety by,
"Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Historical Results of Operations of the Company/Associated,"
"Liquidity and Capital Resources of the Company/Associated" and the Consolidated
Financial Statements of the Company included elsewhere in this Form 10-K.

<TABLE>
<CAPTION>

                                                                                                                     PREDECES-
                                                                      THE COMPANY                                    SOR(1)(2)
                                       -----------------------------------------------------------------------      ----------
                                        YEAR ENDED     YEAR ENDED     YEAR ENDED     YEAR ENDED      JAN 31 TO      JAN. 1 TO
                                          DEC. 31,       DEC. 31,       DEC. 31,       DEC. 31,       DEC. 31,       JAN. 31,
                                              1996           1995           1994           1993           1992        1992 (3)
                                        ----------     ----------     ----------     ----------      ---------      ---------
                                                              (dollars in thousands, except per share data)
<S>                                     <C>            <C>            <C>            <C>             <C>            <C>

Income Statement Data:
Net sales. . . . . . . . . . . . .      $2,298,170     $1,751,462       $470,185       $455,731       $359,779        $39,016
Cost of goods sold . . . . . . . .       1,907,209      1,446,949        382,299        375,226        295,668         31,612
                                        ----------     ----------       --------       --------       --------        -------
   Gross profit. . . . . . . . . .         390,961        304,513         87,886         80,505         64,111          7,404
Operating expenses . . . . . . . .         277,957        246,956 (4)     69,765         69,527         53,758          5,985
                                        ----------     ----------       --------       --------       --------        -------
   Income from operations. . . . .         113,004         57,557         18,121         10,978         10,353        $ 1,419
                                                                                                                      -------
                                                                                                                      -------
Interest expense, net. . . . . . .          57,456         46,186          7,725          7,235          5,626
                                        ----------     ----------       --------       --------       --------
   Income before income taxes
      and extraordinary item . . .          55,548         11,371         10,396          3,743          4,727
Income taxes . . . . . . . . . . .          23,555          5,128          3,993            781          1,777
                                        ----------     ----------       --------       --------       --------
   Income before extraordinary
      item . . . . . . . . . . . .          31,993          6,243       $  6,403          2,962          2,950
Extraordinary item - loss on
      early retirement of debt, net
      of tax benefit of $967 . . .              - -        (1,449)           - -            - -            - -
                                        ----------     ----------       --------       --------       --------
Net income . . . . . . . . . . . .      $   31,993     $    4,794       $  6,403       $  2,962       $  2,950
                                        ----------     ----------       --------       --------       --------
                                        ----------     ----------       --------       --------       --------
Net income attributable to
   common stockholders . . . . . .      $   30,249     $    2,796       $  4,210       $    915       $  1,501
                                        ----------     ----------       --------       --------       --------
                                        ----------     ----------       --------       --------       --------
Net income per common and
   common equivalent share
      Income before
         extraordinary item. . . .           $2.03          $0.33          $0.51          $0.11          $0.19
      Extraordinary item . . . . .             - -          (0.11)           - -            - -            - -
                                             -----          -----          -----          -----           ----
      Net income . . . . . . . . .           $2.03          $0.22          $0.51          $0.11          $0.19
                                             -----          -----          -----          -----           ----
                                             -----          -----          -----          -----           ----
Cash dividends declared per
   common share. . . . . . . . . .             - -            - -            - -            - -            - -

Operating and Other Data:
EBITDA (5) . . . . . . . . . . . .      $  139,046     $   81,241       $ 23,505       $ 16,481       $ 14,875        $ 1,661
EBITDA margin (6). . . . . . . . .             6.1%           4.6% (7)       5.0%           3.6%           4.1%           4.3%
Depreciation and
   amortization (8). . . . . . . .      $   26,042     $   23,684       $  5,384       $  5,503       $  4,522        $   242
Capital expenditures . . . . . . .          (2,886)(9)      8,017            554          3,273          4,289            (36)

</TABLE>

                                        8
<PAGE>

<TABLE>
<CAPTION>

                                                                                        THE COMPANY
                                                       ----------------------------------------------------------------------
                                                                                      AT DECEMBER 31,
                                                       ----------------------------------------------------------------------
                                                             1996           1995           1994           1993           1992
                                                             ----           ----           ----           ----           ----
                                                                                (dollars in thousands)
<S>                                                    <C>            <C>             <C>            <C>            <C>

BALANCE SHEET DATA:
Working capital. . . . . . . . . . . . . . . . . .     $  404,973     $  355,465      $  56,454      $  57,302      $  46,396
Total assets . . . . . . . . . . . . . . . . . . .      1,109,867      1,001,383        192,479        190,979        179,069
Total debt and capital leases (10) . . . . . . . .        600,002        551,990         64,623         86,350         78,297
Redeemable preferred stock . . . . . . . . . . . .         19,785         18,041         23,189         20,996         18,949
Redeemable warrants. . . . . . . . . . . . . . . .         23,812         39,692          1,650          1,435          1,435
Total stockholders' equity . . . . . . . . . . . .         75,820         30,024         24,775         11,422         10,466

</TABLE>

 (1) The capital structure and accounting basis of the assets and liabilities
     of Associated's predecessor differ from those of Associated (i.e. the 
     Company).  Accordingly, certain financial information for the period before
     January 31, 1992 is not comparable to that for periods after
     January 31, 1992 and therefore is not presented in this table.

 (2) Associated's predecessor operated as a segment of a company which did not
     allocate income tax or interest expense to the predecessor. Accordingly,
     actual operating results for Associated's predecessor reflect only income
     from operations before interest expense and income taxes.

 (3) Derived from the unaudited financial statements of Associated's predecessor
     for the one month ended January 31, 1992.

 (4) Includes a restructuring charge of $9.8 million.

 (5) EBITDA is defined as earnings before interest, taxes, depreciation and
     amortization and extraordinary item and is presented because it is commonly
     used by certain investors and analysts to analyze and compare companies on
     the basis of operating performance and to determine a company's ability to
     service and incur debt.  EBITDA should not be considered in isolation from
     or as a substitute for net income, cash flows from operating activities or
     other consolidated income or cash flow statement data prepared in
     accordance with generally accepted accounting principles or as a measure of
     profitability or liquidity.

 (6) EBITDA margin represents EBITDA as a percent of net sales.

 (7) EBITDA margin would have been 5.2% if adjusted to exclude the restructuring
     charge.

 (8) Excludes amortization of deferred financing costs.

 (9) Includes $11.1 million of proceeds from the sale of property, plant and
     equipment.

(10) Total debt and capital leases include current maturities.


UNITED

The selected consolidated financial data of United (a predecessor of the
Company) set forth below for the seven months ended March 30, 1995 (at which
time United and Associated merged to create the Company) has been derived from
the Consolidated Financial Statements of United which have been audited by Ernst
& Young LLP, independent auditors. The  selected financial data at and for the
seven-month period ended March 31, 1994 is unaudited and in the opinion of
management reflects all adjustments considered necessary for a fair presentation
of such data. The selected consolidated financial data of United for each of the
three fiscal years ended August 31, 1994, 1993 and 1992 have been derived from
the Consolidated Financial Statements of United which have been audited by
Arthur Andersen LLP, independent public accountants. All selected consolidated
financial data set forth


                                        9
<PAGE>

below should be read in conjunction with, and is qualified in its entirety by,
"Management's Discussion and Analysis of Financial Condition and Results of
Operations - Historical Results of Operations of United" and "Historical
Liquidity and Capital Resources of United" and the Consolidated Financial
Statements of United, together with the related notes thereto, included
elsewhere herein.

<TABLE>
<CAPTION>

                                                           SEVEN MONTHS ENDED                   YEAR ENDED AUGUST 31,
                                                        ------------------------     ----------------------------------------
                                                        MARCH 30,      MARCH 31,
                                                        ---------      ---------
                                                             1995           1994           1994           1993           1992
                                                             ----           ----           ----           ----           ----
                                                                        (DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)
<S>                                                     <C>            <C>           <C>            <C>            <C>


INCOME STATEMENT DATA:
Net sales. . . . . . . . . . . . . . . . . . . . .      $ 980,575      $ 871,585     $1,473,024     $1,470,115     $1,094,275
Cost of sales. . . . . . . . . . . . . . . . . . .        814,780        717,546      1,220,245      1,197,664        887,418
                                                        ---------      ---------     ----------     ----------     ----------
Gross profit on sales. . . . . . . . . . . . . . .        165,795        154,039        252,779        272,451        206,857
Operating expenses . . . . . . . . . . . . . . . .        133,098        128,594        216,485        226,337        180,455
Merger-related costs . . . . . . . . . . . . . . .         27,780(1)         - -            - -            - -            - -
                                                        ---------      ---------     ----------     ----------     ----------
Income from operations . . . . . . . . . . . . . .          4,917         25,445         36,294         46,114         26,402
Interest expense, net. . . . . . . . . . . . . . .          7,500          5,837         10,461          9,550          6,503
Other income, net. . . . . . . . . . . . . . . . .             41            117            225            355            364
                                                        ---------      ---------     ----------     ----------     ----------
Income (loss) before income taxes. . . . . . . . .         (2,542)        19,725         26,058         36,919         20,263
Income taxes.. . . . . . . . . . . . . . . . . . .          4,692          8,185         10,309         15,559          8,899
                                                        ---------      ---------     ----------     ----------     ----------
Net income (loss). . . . . . . . . . . . . . . . .      $  (7,234)     $  11,540     $   15,749     $   21,360     $   11,364
                                                        ---------      ---------     ----------     ----------     ----------
                                                        ---------      ---------     ----------     ----------     ----------

Net income (loss) per common share . . . . . . . .      $   (0.39)     $    0.62     $     0.85     $     1.15     $     0.71

Cash dividends declared per share. . . . . . . . .           0.30           0.30           0.40           0.40           0.40

OPERATING AND OTHER DATA:
EBITDA(2). . . . . . . . . . . . . . . . . . . . .         17,553         37,665         57,755         67,712         46,645
EBITDA margin(3) . . . . . . . . . . . . . . . . .            1.8%           4.3%           3.9%           4.6%           4.3%
Depreciation and amortization. . . . . . . . . . .      $  12,595      $  12,103     $   21,236     $   21,243     $   19,879
Net capital expenditures . . . . . . . . . . . . .          7,764          4,287         10,499         29,958          8,291

BALANCE SHEET DATA (AT PERIOD END):
Working capital. . . . . . . . . . . . . . . . . .        257,600        297,099        239,827        216,074        214,611
Total assets . . . . . . . . . . . . . . . . . . .        711,839        608,728        618,550        634,786        601,465
Total debt and capital leases(4) . . . . . . . . .        233,406        227,626        155,803        150,251        150,728
Stockholders' investment.. . . . . . . . . . . . .        233,125        243,636        246,010        237,697        223,387

</TABLE>

(1)  In connection with the Merger, United incurred approximately $27.8 million
     of Merger-related costs, consisting of severance payments under employment
     contracts ($9.6 million); insurance benefits under employment contracts
     ($7.4 million); legal, accounting and other professional services fees
     ($5.2 million); retirement of stock options ($3.0 million); and fees for
     letters of credit related to employment contracts and other costs ($2.6
     million).

(2)  EBITDA is defined as earnings before interest, taxes, depreciation and
     amortization and is presented because it is commonly used by certain
     investors and analysts to analyze and compare companies on the basis of
     operating performance and to determine a company's ability to service and
     incur debt. EBITDA should not be considered in isolation from or as a
     substitute for net income, cash flows from operating activities or other
     consolidated income or cash flow statement data prepared in accordance with
     generally accepted accounting principles or as a measure of profitability
     or liquidity.

(3)  EBITDA margin represents EBITDA as a percentage of net sales.

(4)  Total debt and capital leases include current maturities.


                                       10
<PAGE>

ITEM 7.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
          RESULTS OF OPERATIONS


The following discussion should be read in conjunction with the Consolidated
Financial Statements and related notes thereto appearing elsewhere in this Form
10-K.

Certain information presented in this Form 10-K includes forward-looking
statements regarding the Company's future results of operations.  The Company is
confident that its expectations are based on reasonable assumptions given its
knowledge of its operations and business.  However, there can be no assurance
that the Company's actual results will not differ materially from its
expectations.  The matters referred to in forward-looking statements may be
affected by the risks and uncertainties involved in the Company's business
including, among others, competition with business products manufacturers and
other wholesalers, consolidation of the business products industry, the ability
to maintain gross profit margins, the ability to achieve future cost savings,
changing end-user demands, changes in manufacturer pricing, service
interruptions and availability of liquidity and capital resources.


OVERVIEW

On March 30, 1995, Associated merged with and into United. Although the Company
was the surviving corporation in the Merger, the transaction was treated as a
reverse acquisition for accounting purposes, with Associated as the acquiring
corporation. Therefore, the results of operations for the year ended December
31, 1995 reflects the financial information of Associated only for the three
months ended March 30, 1995 and the results of the Company for the nine months
ended December 31, 1995. As a result of the Merger, the results of operations of
the Company for the year ended December 31, 1995 are not comparable to those of
previous and subsequent periods.

To facilitate a meaningful comparison, the following supplemental discussion and
analysis is based on certain components of the combined historical results of
operations without any pro forma adjustments for Associated and United for the
year ended December 31, 1994 and on the pro forma results of operations for the
Company for the year ended December 31, 1995. The pro forma and combined
historical results of operations do not purport to be indicative of the results
that would have been obtained had such transactions been completed for the
periods presented or that may be obtained in the future.


GENERAL INFORMATION

GROSS PROFIT MARGINS.  In recent years, a number of factors have adversely
affected gross profit margins in the office products industry, including those
of the Company. These factors reflect the increasingly competitive nature of the
industry. Competitive pressures have increased due in part to the growth of
large resellers such as national office products superstores that have
heightened price awareness at the end-user level. The increasing price
sensitivity of end-users has contributed to the decline in industrywide gross
profit margins. These pressures are expected to continue in the future.

The Company's gross profit margins vary across product categories, so that
material changes in its product mix can impact the Company's overall margin. For
example, the gross profit margin on the Company's sales of commodity products,
such as copier paper and laser printer toner--product categories that have grown
over the past few years--tend to be lower than the gross profit margins on most
other product categories. While the recent increase in sales of these types of
products have adversely affected the Company's overall gross profit margin, they
have contributed to higher operating income. The Company expects such sales to
increase as a percentage of revenues in the future.


                                       11
<PAGE>

RESTRUCTURING CHARGE. The historical results for the twelve months ended
December 31, 1995 include a restructuring charge of $9.8 million ($5.9 million
net of tax benefit of $3.9 million). The restructuring charge included severance
costs totaling $1.8 million.  The Company's consolidation plan specified that
330 distribution, sales and corporate positions, 180 of which related to pre-
Merger Associated, were to be eliminated substantially within one year following
the Merger. The Company has achieved its target, with the related termination
costs of approximately $1.8 million charged against the reserve.  The
restructuring charge also included distribution center closing costs totaling
$6.7 million and stockkeeping unit reduction costs totaling $1.3 million.  The
consolidation plan called for the closing of eight redundant distribution
centers, six of which related to pre-Merger Associated, and the
elimination of overlapping inventory items from the Company's catalogs
substantially within the one-year period following the Merger.  Estimated
distribution center closing costs included (i) the net occupancy costs of leased
facilities after they are vacated until expiration of leases and (ii) the losses
on the sale of owned facilities and the facilities' furniture, fixtures, and
equipment.  Estimated stockkeeping unit reduction costs included losses on the
sale of inventory items which have been discontinued solely as a result of the
Acquisition.  As of December 31, 1996, five of the six redundant pre-Merger
Associated distribution centers have been closed with $5.5 million charged
against the reserve and $2.0 million related to stockkeeping unit reduction
costs have also been charged against the reserve.  As of December 31, 1996, the
Company's consolidation plan has been substantially completed.  Seven of the
eight redundant distribution centers have been closed.  The restructuring
reserve balance at December 31, 1996 of $0.5 million is expected to be adequate
to cover the remaining estimated expenditures related to integration and
transition costs.  See Note 4 to the Consolidated Financial Statements of the
Company included elsewhere herein.

EMPLOYEE STOCK OPTIONS. In September 1995, the Board of Directors approved an
amendment to the Company's employee stock option plan (the "Plan") that allows
for the issuance of employee stock options to key management employees of the
Company exercisable for up to approximately 2.2 million additional shares of
Common Stock. The Plan was designed to build increased employee commitment
through participation in the growth and performance of the Company.
Subsequently, employee stock options exercisable for an aggregate of
approximately 2.2 million shares of Common Stock were granted  to key management
employees. Some of the employee stock options were granted at an exercise price
below the then fair market value of the Common Stock. The exercise price of
certain options increases by $0.625  on a quarterly basis effective April 1, 
1996.

The employee stock options granted under the Plan do not vest to the employee 
until the occurrence of an event (a "Vesting Event") that causes the present 
non-public equity investors to have received at least a full return of their 
investment (at cost) in cash, fully tradable marketable securities or the 
equivalent. A Vesting Event will cause the Company to recognize compensation 
expense based upon the difference between the fair market value of the Common 
Stock and the exercise prices of the employee stock options. Based upon a 
stock price of $19.50 and options outstanding as of December 31, 1996, the 
Company would recognize a nonrecurring noncash charge of $18.4 million in 
compensation expense ($10.6 million net of tax benefit of $7.8 million), if a 
Vesting Event were to occur.  Each $1.00 change in the fair market value of 
Common Stock could result in a maximum adjustment to such compensation 
expense of approximately $2.5 million ($1.4 million net of tax effect of $1.1 
million).

CHANGE IN ACCOUNTING METHOD.  Effective January 1, 1995, Associated changed its
method of accounting for the cost of inventory from the FIFO method to the LIFO
method. Associated made this change in contemplation of its acquisition of
United (accounted for as a reverse acquisition) so that its method would conform
to that of United. Associated believed that the LIFO method provides a better
matching of current costs and current revenues, and that earnings reported under
the LIFO method are more easily compared to that of other companies in the
wholesale industry where the LIFO method is common. In 1995, this change
resulted in the reduction of pre-tax income of the Company of approximately
$8.8 million ($5.3 million net of tax benefit of $3.5 million). See Note 3 
(Inventories) to the Consolidated Financial Statements of the Company included 
elsewhere herein.

RECLASSIFICATION OF DELIVERY AND OCCUPANCY COSTS.

During the fourth quarter of 1996, the Company reclassified its delivery and
occupancy costs from operating expenses to cost of goods sold to conform the
Company's presentation to others in the business products industry.  See Note 3 
(Reclassification) to the Consolidated Financial Statements included elsewhere 
herein.

                                       12
<PAGE>

ACTUAL, PRO FORMA AND COMBINED RESULTS OF OPERATIONS

The following table of summary actual, pro forma (see Note 4 to the Consolidated
Financial Statements of the Company included elsewhere herein) and combined
historical financial data is intended for informational purposes only and is not
necessarily indicative of either financial position or results of operations in
the future, or that would have occurred had the events described in the first
paragraph under "Overview" occurred on January 1, 1995.  The following
information should be read in conjunction with, and is qualified in its entirety
by, the historical Consolidated Financial Statements of the Company and its
predecessors, including the related notes thereto, included elsewhere herein.

The following table also presents unaudited summary combined historical
financial data for Associated and United for the year ended December 31, 1994.
This data has not been prepared in accordance with generally accepted accounting
principles, which do not allow for the combination of financial data for
entities that are not under common ownership.  Nevertheless, management believes
that this combined historical financial data, when read in conjunction with the
separate historical financial statements of Associated and United prepared in
accordance with generally accepted accounting principles and included elsewhere
herein, may be helpful in understanding the past operations of the companies
that were combined in the Merger.  This combined historical financial data for
1994 represents a combination of the historical financial data for Associated
and United for the periods indicated without any pro forma adjustments, and is
supplemental to the historical financial data of Associated and United included
elsewhere herein.

<TABLE>
<CAPTION>

                                                              ACTUAL                  PRO FORMA                 COMBINED
                                                       ---------------------    ---------------------    ---------------------
                                                                               YEAR ENDED DECEMBER 31,
                                                       -----------------------------------------------------------------------
                                                               1996                    1995                       1994
                                                       ---------------------    ---------------------    ---------------------
                                                                               (dollars in thousands)
<S>                                                    <C>            <C>       <C>            <C>       <C>            <C>

Net sales                                              $2,298,170     100.0%    $2,201,860     100.0%    $1,990,363     100.0%
Gross profit                                              390,961      17.0        381,270      17.3        344,542      17.3
Operating expenses                                        277,957      12.1        299,861      13.6        285,500      14.3
Income from operations                                    113,004       4.9         81,409       3.7         59,042       3.0

</TABLE>

COMPARISON OF ACTUAL RESULTS FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996 AND PRO
FORMA RESULTS FOR THE FISCAL YEAR ENDED DECEMBER 31, 1995

NET SALES.  Net sales increased 4.4% to $2,298.2 million for 1996 from $2,201.9
million for 1995.  This increase is primarily the result of higher unit sales in
all product categories.  In addition, our Micro United division continues to
report strong growth resulting from the underlying strength in the marketplace.
The Company's year-long focus on improving the consistency and reliability of
its service has led to increased sales and higher customer and consumer
satisfaction.  The Company's core strengths, coupled with the strategic
initiatives already under way, position it to deliver continued growth in both
sales and earnings.

GROSS MARGIN.  Gross margin declined to 17.0% in 1996 from 17.3% in 1995.  This
decrease reflects a shift in our product mix, the continuing consolidation of
our dealer base and deflation across our product mix.

OPERATING EXPENSES.  Operating expenses decreased as a percent of net sales 
to 12.1% in 1996, compared with 13.6% in 1995.  This decrease is primarily 
due to the realization of merger synergies, cost containment, productivity 
improvements and leveraging of fixed expenses.  The Company's operating 
efficiency allows it to join forces with its customers to produce high levels 
of customer and consumer satisfaction.  The Company's management believes 
there is further room for improvement, primarily through warehouse and 
systems efficiencies.

INCOME FROM OPERATIONS.  Income from operations as a percent of net sales
increased to 4.9% in 1996 from 3.7% in 1995.


                                       13
<PAGE>

COMPARISON OF PRO FORMA RESULTS FOR THE FISCAL YEAR ENDED DECEMBER 31, 1995 AND
COMBINED RESULTS FOR THE FISCAL YEAR ENDED DECEMBER 31, 1994

NET SALES.  Net sales were $2,201.9 million for 1995, a 10.6% increase over net
sales of $1,990.4 million in 1994. The increase in net sales was primarily the
result of changes in unit volume rather than changes in prices. Sales grew in
all geographic regions. In addition, the sales growth was attributable to an
increase in the sale of computer-related products through the Company's Micro
United division.

GROSS MARGIN.  Gross profit as a percent of net sales was 17.3% in 1995 and
1994. The gross profit margin in 1995 reflects a shift in product mix and a
larger LIFO charge due to Associated's change in its method of accounting for
inventory from the FIFO method to the LIFO method. Also, gross profit was
adversely affected in 1995 by higher sales of computer-related products and
commodity items which typically carry lower gross profit margins, offset by
lower freight and occupancy costs.

OPERATING EXPENSES.  Operating expenses as a percent of net sales decreased to
13.6% in 1995 from 14.3% in 1994. The decrease in operating expenses as a
percent of net sales was primarily due to increased operating efficiencies,
improved productivity and increased economies of scale as a result of a higher
sales base.

INCOME FROM OPERATIONS.  Income from operations as a percent of net sales was
3.7% in 1995 compared with 3.0% in 1994.

HISTORICAL RESULTS OF OPERATIONS

COMPARISON OF HISTORICAL FISCAL YEARS ENDED DECEMBER 31, 1996 AND 1995

NET SALES.  Net sales increased 31.2% to $2,298.2 million for 1996 from $1,751.5
million for 1995.  This increase was primarily the result of the Merger for a
full twelve months in 1996.  Sales in 1995 include only nine months of United's
sales.

GROSS MARGIN.  Gross margin declined to 17.0% in 1996 from 17.4% in 1995.  This
decrease reflects a shift in our product mix, the continuing consolidation of
our dealer base and deflation across our product mix.

OPERATING EXPENSES.  Operating expenses decreased as a percent of net sales
to 12.1% in 1996, compared with 14.1% in 1995.  The results for 1995 include the
impact of a restructuring charge of $9.8 million ($5.9 million net of tax
benefit of $3.9 million).  The decline in the operating expense ratio before the
restructuring charge (12.1% in 1996 versus 13.5% in 1995) was primarily due to
the realization of merger synergies, cost containment, productivity improvements
and leveraging of fixed expenses.

INCOME FROM OPERATIONS.  Income from operations as a percent of net sales
increased to 4.9% in 1996 from 3.3% in 1995.

INTEREST EXPENSE.  Interest expense as a percent of net sales was 2.5% in
1996, compared with 2.6% in 1995.  This reduction reflects the leveraging of
fixed interest costs against higher sales, partially offset by funding required
to acquire Lagasse Bros., Inc. (see Note 1 to the Consolidated Financial
Statements of the Company included elsewhere herein).

INCOME BEFORE INCOME TAXES AND EXTRAORDINARY ITEM.  Income before income taxes
and extraordinary item as a percent of net sales increased to 2.4% in 1996 from
0.7% in 1995.

NET INCOME.  Net income as a percent of net sales increased to 1.4% in 1996 from
0.3% in 1995 resulting from the aforementioned reasons.  Net income in 1995
includes an extraordinary item, loss on the early retirement of debt related to
the Merger of $2.4 million ($1.4 million net of tax benefit of $1.0 million) or
0.1% of net sales.


                                       14
<PAGE>

FOURTH QUARTER RESULTS.  Certain expense and cost of sale estimates are recorded
throughout the year including inventory shrinkage, required LIFO reserve,
manufacturers' allowances, advertising costs and various expense items.  During
the fourth quarter of 1996, the Company recorded approximately $3.0 million of
additional net income relating to the refinement of estimates recorded in the
prior three quarters.

COMPARISON OF HISTORICAL FISCAL YEARS ENDED DECEMBER 31, 1995 AND 1994

NET SALES.  Net sales were $1,751.5 million for 1995 compared with $470.2 
million in 1994. The increase is primarily the result of the Merger. Sales in 
1995 include nine months of United's sales.

GROSS MARGIN.  Gross profit as a percent of net sales decreased to 17.4% in 
1995 from 18.7% in 1994. The lower gross profit margin reflects a shift in 
product mix, the Acquisition and the change in the method of accounting for 
inventory from the FIFO method to the LIFO method. See Note 3 (Inventories) 
to the Consolidated Financial Statements of the Company included elsewhere 
herein.

OPERATING EXPENSES.  Operating expenses as a percent of net sales decreased 
to 14.1% in 1995 from 14.8% in 1994. The actual results for 1995 include the 
impact of a restructuring charge of $9.8 million ($5.9 million net of tax 
benefit of $3.9 million) in the first quarter of 1995. Operating expenses 
before the restructuring charge were 13.5% in 1995. The decrease in operating 
expenses as a percent of net sales before the restructuring charge was 
primarily due to increased operating efficiencies and improved productivity, 
partially offset by Merger-related compensation expense relating to an 
increase in the value of employee stock options of approximately $1.5 million 
($0.9 million net of tax benefit of $0.6 million).

INCOME FROM OPERATIONS.  Income from operations as a percent of net sales was
3.3% in 1995 (after the restructuring charge) compared with 3.9% in 1994. Before
such restructuring charge, income from operations in 1995 was 3.9%.

INTEREST EXPENSE.  Interest expense as a percent of net sales was 2.6% in 1995
compared to 1.7% in 1994. The increase reflects additional debt needed to
consummate the  Merger and higher interest rates in 1995.

INCOME BEFORE INCOME TAXES AND EXTRAORDINARY ITEM.  Income before income taxes
and extraordinary item as a percent of net sales was 0.7% in 1995 compared with
2.2% in 1994.

INCOME BEFORE EXTRAORDINARY ITEM.  Income before extraordinary item was $6.2
million in 1995 compared with $6.4 million in 1994. An extraordinary item, the
loss on early retirement of debt related to the Merger of $2.4 million ($1.4
million net of tax benefit of $1.0 million), was recognized in the first quarter
of 1995.

NET INCOME.  Net income was $4.8 million in 1995 compared with $6.4 million in
1994. Excluding the extraordinary item, net income would have been $6.2 million.

FOURTH QUARTER RESULTS.  Certain interim expense and inventory estimates are
recorded throughout the year relating to shrinkage, inflation and product mix.
The results of the year-end close and physical inventory reflected a favorable
adjustment with respect to such estimates, resulting in approximately $0.9
million of additional net income, which is reflected in the fourth quarter of
1995.

HISTORICAL RESULTS OF OPERATIONS OF UNITED

COMPARISON OF THE SEVEN MONTHS ENDED MARCH 30, 1995 AND 1994

NET SALES.  Net sales were $980.6 million in the seven months ended March 30,
1995, a 12.5% increase from net sales of $871.6 million in the comparable period
in 1994. The primary reason for the increase is growth in unit volume.


                                       15
<PAGE>

GROSS PROFIT ON SALES.  Gross profit as a percent of net sales was 16.9% for the
seven months ended March 30, 1995, compared with 17.7% in the comparable period
in 1994. This lower gross profit margin is primarily the result of a shift in
the sale of computer related products that have lower gross profit margins and
is consistent with the gross profit margins achieved in the latter half of
United's fiscal year ended August 31, 1994.

OPERATING EXPENSES.  Operating expenses as a percent of net sales increased to
16.4% in the seven-month period ended March 30, 1995 from 14.8% in the
comparable period in 1994. The increase is primarily attributable to $27.8
million ($18.5 million net of tax benefit of $9.3 million) of non-recurring
Merger-related costs consisting of severance payments under employment
contracts; insurance benefits under employment contracts; legal, accounting and
other professional services fees; the repurchase of stock options; and fees for
letters of credit related to employment contracts and other costs. Operating
expenses as a percent of net sales prior to the Merger-related costs were 13.6%
for the seven-month period ended March 30, 1995. This decline from the
comparable period in 1994 is due to a reduction in payroll expense.

INCOME FROM OPERATIONS   Income from operations as a percent of net sales was
0.5% in the seven-month period ended March 30, 1995, compared with 2.9% in the
comparable period in 1994. The decrease was attributable to the Merger-related
costs discussed under "Operating Expenses" above. Income from operations as a
percent of net sales was 3.3% in the seven-month period ended March 30, 1995,
excluding the Merger-related costs.

INTEREST EXPENSE.  Interest expense was $7.6 million for the seven-month period
ended March 30, 1995, compared with $6.1 million for the same period in 1994.
The increase was due to higher interest expense from increased debt to meet
working capital and other capital expenditure needs and higher interest rates on
borrowings.

INCOME (LOSS) BEFORE INCOME TAXES.  Income (loss) before income taxes as a
percent of net sales was a loss of 0.3% in the seven-month period ended March
30, 1995, compared to income of 2.3% in the comparable period of 1994. The
decrease in income before income taxes was attributable to the factors stated
above.

INCOME TAXES.  The effective tax rate for the seven-month period ended March 30,
1995 was (184.6%), compared with 41.5% for the seven-month period ended March
31, 1994. The increase is primarily due to non-deductible Merger-related costs
and non-deductible amortization of goodwill.

NET INCOME (LOSS).  Net income (loss) was a loss of $7.2 million for the seven-
month period ended March 30, 1995, compared with income of $11.5 million for the
same period in 1994. The loss was primarily due to $27.8 million ($18.5 million
net of tax benefit of $9.3 million) of non-recurring Merger-related costs
discussed under "Operating Expenses" above. Net income (loss) per share was a
loss of $0.39 in the seven-month period ended March 30, 1995, compared with
income of $0.62 for the same period in 1994.


LIQUIDITY AND CAPITAL RESOURCES OF THE COMPANY/ASSOCIATED

As of December 31, 1996, the credit facilities under the Amended and Restated
Credit Agreement (the "Credit Agreement") consisted of $209.1 million of term
loan borrowings (the "Term Loan Facilities"), and up to $325.0 million of
revolving loan borrowings (the "Revolving Credit Facility").  This agreement was
amended to provide funding for the acquisition of Lagasse Bros., Inc., to extend
the maturities, to adjust the pricing and to revise certain covenants.  In
addition, the Company has $150.0 million of 12-3/4% Senior Subordinated Notes
due 2005.

The Term Loan Facilities consist of a $144.4 million Tranche A term loan
facility (the "Tranche A Facility") and a $64.7 million Tranche B term loan
facility (the "Tranche B Facility).  Quarterly payments under the Tranche A
facility range from $5.63 million at December 31, 1996 to $8.30 million at
September 30, 2001.  Quarterly payments under the Tranche B Facility range from
$0.25 million at December 31, 1996 to $6.64 million at September 30, 2003.  On
March 31, 1997, principal payments of $15.9 million and $7.4 million are
required to be paid from Excess Cash Flow (as defined) at December 31, 1996 for
the Tranche A and Tranche B Facilities, respectively.


                                       16
<PAGE>

The Revolving Credit Facility is limited to the lesser of $325.0 million or a
borrowing base equal to: 80% of Eligible Receivables (as defined); plus 50% of
Eligible Inventory (as defined) (provided that no more than 60% or, during
certain periods 65%, of the Borrowing Base may be attributable to Eligible
Inventory); plus the aggregate amount of cover for Letter of Credit Liabilities
(as defined). In addition, for each fiscal year, the Company must repay
revolving loans so that for a period of 30 consecutive days in each fiscal year
the aggregate revolving loans do not exceed $250.0 million.  The Revolving
Credit Facility matures on October  31, 2001.

The Term Loan Facilities and the Revolving Credit Facility are secured by first
priority pledges of the stock of USSC, all of the stock of the domestic direct
and indirect subsidiaries of USSC, certain of the stock of all of the foreign
direct and indirect subsidiaries of USSC and security interests in, and liens
upon, all accounts receivable, inventory, contract rights and other certain
personal and certain real property of USSC and its domestic subsidiaries.

The loans outstanding under the Term Loan Facilities and the Revolving Credit
Facility bear interest as determined within a set range with the rate based on
the ratio of total debt (excluding any undrawn amounts under any letters of
credit) to EBITDA.  The Tranche A Facility and the Revolving Credit Facility
bear interest at prime plus 0.25% to 1.25% or, at the Company's option, LIBOR
plus 1.50% to 2.50%.  The Tranche B Facility bears interest at prime plus 1.25%
to 1.75% or, at the Company's option, LIBOR plus 2.50% to 3.00%.

The Credit Agreement contains representations and warranties, affirmative and
negative covenants and events of default customary for financings of this type.
As of December 31, 1996 the Company was in compliance with all covenants
contained in the Credit Agreement.

The Credit Agreement permits capital expenditures for the Company of up to $15.0
million for its fiscal year ending December 31, 1997, plus $6.2 million of
unused capital expenditures, approximately $7.8 million of unused Excess Cash
Flow (as defined), and $11.1 million of proceeds from the disposition of certain
property, plant and equipment from the Company's fiscal year ended December 31,
1996. Capital expenditures will be financed from internally generated funds and
available borrowings under the Credit Agreement. The Company expects gross
capital expenditures to be approximately $14.0 million to $18.0 million in 1997.

Management believes that the Company's cash on hand, anticipated funds generated
from operations and available borrowings under the Credit Agreement, will be
sufficient to meet the short-term (less than twelve months) and long-term
operating and capital needs of the Company as well as to service its debt in
accordance with its terms. There is, however, no assurance that this will be
accomplished.

United is a holding company and, as a result, its primary source of funds is
cash generated from operating activities of its operating subsidiary, USSC, and
bank borrowings by USSC. The Credit Agreement and the indenture governing the
Notes contain restrictions on the ability of USSC to transfer cash to United.

The statements of cash flows for the Company for the periods indicated is
summarized below:

<TABLE>
<CAPTION>
                                                                                                 THE COMPANY
                                                                             -------------------------------------------------
                                                                                            YEAR ENDED DECEMBER 31,
                                                                             -------------------------------------------------
                                                                                 1996                1995                1994
                                                                                 ----                ----                ----
                                                                                            (dollars in thousands)
<S>                                                                          <C>                <C>                  <C>

     Net cash provided by operating activities                               $  1,609           $  26,329            $ 14,088
     Net cash used in investing activities                                    (49,871)           (266,291)               (554)
     Net cash provided by (used in) financing activities                       47,221             249,773             (12,676)

</TABLE>

Net cash provided by operating activities for 1996 declined to $1.6 million from
$26.3 in 1995.  This reduction was due to an increased investment in inventory
and a decrease in accrued liabilities offset by higher net income and an
increase in accounts payable.  The increase in net cash provided by operating
activities of $26.3 million in 1995 from $14.1 million in 1994 was primarily the
result of the Merger.

                                       17
<PAGE>


Net cash used in investing activities during 1996 was $49.9 million compared
with $266.3 million in 1995.  The decrease is due to the Merger in 1995 offset
by the acquisition of Lagasse Bros., Inc. on October 31, 1996.  Also, the
Company collected $11.1 million in 1996 from the successful sale of closed
facilities and related equipment.  The increase in net cash used in investing
activities of $266.3 million in 1995 from $0.6 million in 1994 was primarily the
result of the Merger.

Net cash provided by financing activities in 1996 was $47.2 million compared 
with $249.8 million in 1995.  The decrease was due to the financing of the 
Merger in 1995 offset by additional borrowings to finance the purchase of 
Lagasse Bros., Inc.  The increase in net cash provided by financing 
activities of $249.8 million in 1995 from net cash used of $12.7 million in 
1994 was also primarily the result of the Merger.

INFLATION/DEFLATION AND CHANGING PRICES

Inflation can have an impact on the Company's earnings.  During inflationary
times, the Company generally seeks to increase prices to its customers creating
incremental gross profit resulting from the sale of inventory purchased at lower
prices.  Alternatively, significant deflation may adversely affect the Company's
profitability.


SEASONALITY

Although the Company's sales are generally relatively level throughout the year,
the Company's sales vary to the extent of seasonal differences in the buying
patterns of end-users who purchase office products. In particular, the Company's
sales are generally higher than average during the months of January through
March when many businesses begin operating under new annual budgets.

The Company experiences seasonality in terms of its working capital needs, with
highest requirements in December through February reflecting a build up in
inventory prior to and during the peak sales period. The Company believes that
its current availability under the Revolving Credit Facility is sufficient to
satisfy such seasonal capital needs for the foreseeable future.


ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Set forth on the following pages are the financial statements of (i) the Company
for the years ended December 31, 1996, 1995 and 1994 and (ii) pre-Merger United
for the seven months ended March 30, 1995, March 31, 1994 and the twelve months
ended August 31, 1994, 1993 and 1992.  Although United was the surviving
corporation in the Merger, the Acquisition was treated as a reverse acquisition
for accounting purposes, with Associated as the acquiring corporation.
Therefore, the statements of income and cash flows for the year ended December
31, 1995 reflect the results of Associated only for the three months ended March
30, 1995, and the results of the Company for the nine months ended December 31,
1995.  The financial statements of the Company for the year ended December 31,
1994 reflect the financial position, results of operations and cash flows of
Associated only.  The financial statements of pre-Merger United are included
because United is considered a significant predecessor for accounting purposes.


                                       18
<PAGE>


REPORT OF INDEPENDENT AUDITORS


TO THE STOCKHOLDERS AND BOARD OF
DIRECTORS OF UNITED STATIONERS INC.

We have audited the accompanying consolidated balance sheets of United
Stationers Inc. and Subsidiaries as of December 31, 1996 and 1995, and the
related consolidated statements of income, changes in stockholders' equity and
cash flows for each of the years then ended.  Our audits also included the
financial statement schedules for 1996 and 1995 listed in the index at Item
14(A).  These financial statements and schedules are the responsibility of the
Company's management.  Our responsibility is to express an opinion on these
financial statements and schedules based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of United Stationers
Inc. and Subsidiaries at December 31, 1996 and 1995, and the consolidated
results of their operations and their cash flows for each of the years then
ended in conformity with generally accepted accounting principles.  Also, in our
opinion, the related financial statement schedules for 1996 and 1995, when
considered in relation to the basic financial statements taken as a whole,
present fairly in all material respects the information set forth therein.

As discussed in Note 3 to the consolidated financial statements, in 1995, the
Company changed its method of valuing inventory from the first-in, first-out
(FIFO) method to the last-in, first-out (LIFO) method.



                                   /s/ERNST & YOUNG LLP




Chicago, Illinois
January 28, 1997



                                       19
<PAGE>


REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS


TO THE BOARD OF DIRECTORS OF
ASSOCIATED HOLDINGS, INC.

We have audited the accompanying consolidated balance sheets of ASSOCIATED 
HOLDINGS, INC. (a Delaware corporation) AND SUBSIDIARY as of December 31, 
1994, and the related consolidated statements of income, changes in 
stockholders' equity and cash flows for the year then ended.  These financial 
statements are the responsibility of the Company's management.  Our 
responsibility is to express an opinion on these financial statements based 
on our audits.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in 
all material respects, the consolidated financial position of Associated 
Holdings, Inc. and subsidiary as of December 31, 1994, and the results of 
their operations and their cash flows for the year then ended, in conformity 
with generally accepted accounting principles.

Our audit was made for the purpose of forming an opinion on the basic 
financial statements taken as a whole.  Schedule II is the responsibility of 
the Company's management and is presented for purposes of complying with the 
Securities and Exchange Commission's rules and is not part of the basic 
financial statements. This schedule has been subjected to the auditing 
procedures applied in the audit of the basic financial statements for 1994 
and, in our opinion, fairly states in all material respects the financial 
data required to be set forth therein in relation to the basic financial 
statements taken as a whole.

                                   /s/ARTHUR ANDERSEN LLP



Chicago, Illinois
January 23, 1995


                                       20
<PAGE>


                     UNITED STATIONERS INC. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
                    (dollars in thousands, except share data)

<TABLE>
<CAPTION>

                                                                                               YEAR ENDED
                                                                                              DECEMBER 31,
                                                                          ---------------------------------------------------
                                                                              1996                1995                 1994
                                                                              ----                ----                 ----
<S>                                                                       <C>                 <C>                  <C>

NET SALES                                                                 $ 2,298,170         $ 1,751,462          $  470,185
COST OF GOODS SOLD                                                          1,907,209           1,446,949             382,299
                                                                          -----------         -----------          ----------
     Gross profit                                                             390,961             304,513              87,886

OPERATING EXPENSES:
     Warehousing, marketing and
        administrative expenses                                               277,957             237,197              69,765
     Restructuring charge                                                         - -               9,759                 - -
                                                                          -----------         -----------          ----------

     Total operating expenses                                                 277,957             246,956              69,765
                                                                          -----------         -----------          ----------

     Income from operations                                                   113,004              57,557              18,121

INTEREST EXPENSE                                                               57,456              46,186               7,725
                                                                          -----------         -----------          ----------

     Income before income taxes
       and extraordinary item                                                  55,548              11,371              10,396

INCOME TAXES                                                                   23,555               5,128               3,993
                                                                          -----------         -----------          ----------

     Income before extraordinary item                                          31,993               6,243               6,403

EXTRAORDINARY ITEM - LOSS ON EARLY RETIREMENT
     OF DEBT, NET OF TAX BENEFIT OF $967                                          - -              (1,449)                - -
                                                                          -----------         -----------          ----------

NET INCOME                                                                     31,993               4,794               6,403

PREFERRED STOCK DIVIDENDS ISSUED
   AND ACCRUED                                                                  1,744               1,998               2,193
                                                                          -----------         -----------          ----------

NET INCOME ATTRIBUTABLE TO
   COMMON STOCKHOLDERS                                                    $    30,249         $     2,796          $    4,210
                                                                          -----------         -----------          ----------
                                                                          -----------         -----------          ----------

NET INCOME PER COMMON AND COMMON
   EQUIVALENT SHARE:
     Income before extraordinary item                                     $      2.03         $      0.33          $     0.51
     Extraordinary item                                                           - -               (0.11)                - -

     Net income                                                           $      2.03         $      0.22          $     0.51
                                                                          -----------         -----------          ----------
                                                                          -----------         -----------          ----------

AVERAGE NUMBER OF COMMON SHARES                                            14,923,477          12,913,229           8,308,780
                                                                          -----------         -----------          ----------
                                                                          -----------         -----------          ----------

</TABLE>


     SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.


                                       21
<PAGE>

                     UNITED STATIONERS INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                             (dollars in thousands)



<TABLE>
<CAPTION>

                                                                                                        DECEMBER 31,
                                                                                               ------------------------------
                                                                                                   1996                1995
                                                                                                 --------            --------
<S>                                                                                            <C>                 <C>

ASSETS


CURRENT ASSETS

Cash and cash equivalents                                                                     $    10,619          $   11,660

Accounts receivable, less allowance for doubtful
     accounts of $6,318 in 1996 and $7,315 in 1995                                                291,401             265,827

Inventories                                                                                       463,239             381,618

Other                                                                                              25,221              30,903
                                                                                               ----------          ----------

TOTAL CURRENT ASSETS                                                                              790,480             690,008


PROPERTY, PLANT AND EQUIPMENT, AT COST

Land                                                                                               21,878              24,856
Buildings                                                                                          97,029             105,136
Fixtures and equipment                                                                            102,092              96,467
Leasehold improvements                                                                              1,040               1,634
Assets under capital lease                                                                          3,002               3,002
                                                                                               ----------          ----------
Total property, plant and equipment                                                               225,041             231,095
Less - accumulated depreciation and amortization                                                   51,266              31,114
                                                                                               ----------          ----------

NET PROPERTY, PLANT AND EQUIPMENT                                                                 173,775             199,981

GOODWILL                                                                                          115,449              77,786

OTHER                                                                                              30,163              33,608
                                                                                               ----------          ----------

TOTAL ASSETS                                                                                   $1,109,867          $1,001,383
                                                                                               ----------          ----------
                                                                                               ----------          ----------

</TABLE>


     SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.


                                       22
<PAGE>

                     UNITED STATIONERS INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                    (dollars in thousands, except share data)



<TABLE>
<CAPTION>


                                                                                                        DECEMBER 31,
                                                                                               ------------------------------
                                                                                                   1996                1995
                                                                                                   ----                ----
<S>                                                                                            <C>                 <C>

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES

Current maturities of long-term debt and capital lease                                         $   46,923          $   23,886

Accounts payable                                                                                  238,124             194,567

Accrued expenses                                                                                   93,789             107,622

Accrued income taxes                                                                                6,671               8,468
                                                                                               ----------          ----------

TOTAL CURRENT LIABILITIES                                                                         385,507             334,543

DEFERRED INCOME TAXES                                                                              36,828              34,380

LONG-TERM DEBT                                                                                    552,613             526,198

OTHER LONG-TERM LIABILITIES                                                                        15,502              18,505

REDEEMABLE PREFERRED STOCK

Preferred Stock Series A, $0.01 par value; 15,000 authorized;
   5,000 issued and outstanding; 3,086 and
   2,437, respectively, accrued                                                                     8,086               7,437
Preferred Stock Series C, $0.01 par value; 15,000 authorized;
   11,699 and 10,604, respectively, issued and outstanding                                         11,699              10,604
                                                                                               ----------          ----------

TOTAL REDEEMABLE PREFERRED STOCK                                                                   19,785              18,041

REDEEMABLE WARRANTS                                                                                23,812              39,692

STOCKHOLDERS' EQUITY

Common Stock (voting), $0.10 par value;
   40,000,000 authorized; 11,446,306
   issued and outstanding                                                                           1,145               1,145
Common Stock (nonvoting), $0.01 par value;
   5,000,000 authorized; 758,994
   issued and outstanding                                                                               8                   8
Capital in excess of par value                                                                     44,418              28,871
Retained earnings                                                                                  30,249                 - -
                                                                                               ----------          ----------

TOTAL STOCKHOLDERS' EQUITY                                                                         75,820              30,024
                                                                                               ----------          ----------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                                     $1,109,867          $1,001,383
                                                                                               ----------          ----------
                                                                                               ----------          ----------

</TABLE>


     SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.


                                       23
<PAGE>

                     UNITED STATIONERS INC. AND SUBSIDIARIES
           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                    (DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>

                                                                                                                     Number of
                                                        Redeemable Preferred Stock                                    Common
                                            --------------------------------------------------       Redeemable       Shares
                                              A              B              C            Total        Warrants       (Voting)
                                            -----          -----          -----          -----        --------       --------
<S>                                         <C>           <C>            <C>            <C>           <C>          <C>

DECEMBER 31, 1993                           $6,138        $ 5,943        $ 8,915        $20,996        $ 1,435        896,258
   Net income                                  - -            - -            - -            - -            - -            - -
   Preferred stock dividends                   650            617            926          2,193            - -            - -
   Other                                       - -            - -            - -            - -            - -            - -
   Issuance of common shares                   - -            - -            - -            - -            - -         58,653
   Common shares accrued                       - -            - -            - -            - -            - -          5,435
   Warrants accrued                            - -            - -            - -            - -            215            - -
                                            ------        -------        -------        -------        -------     ----------
DECEMBER 31, 1994                            6,788          6,560          9,841         23,189          1,650        960,346
   Net income                                  - -            - -            - -            - -            - -            - -
   Preferred stock dividends                   649            332            763          1,744            - -            - -
   Repurchase of Series B
     preferred stock                           - -         (6,892)           - -         (6,892)           - -            - -
   Cash dividends                              - -            - -            - -            - -            - -            - -
   Accretion of warrants to
     fair market value                         - -            - -            - -            - -         37,275            - -
   Issuance of warrants from
     option grant                              - -            - -            - -            - -          2,900            - -
   Nonvoting common stock
     issued for services related to
     financing the Acquisition issued
     in exchange for common stock,
     warrants and options                      - -            - -            - -            - -           (460)      (109,159)
   Increase in value of stock
     option grants                             - -            - -            - -            - -            - -            - -
   Common stock issued:
     Acquisition                               - -            - -            - -            - -            - -      4,831,873
     Exercise of warrants                      - -            - -            - -            - -         (1,673)        58,977
     100% stock dividend                       - -            - -            - -            - -            - -      5,683,463
     Stock option exercises                    - -            - -            - -            - -            - -         20,806
     Other                                     - -            - -            - -            - -            - -            - -
                                            ------        -------        -------        -------        -------     ----------
DECEMBER 31, 1995                           $7,437        $   - -        $10,604        $18,041        $39,692     11,446,306
                                            ------        -------        -------        -------        -------     ----------
                                            ------        -------        -------        -------        -------     ----------

<CAPTION>

                                                         Number of                                                     Total
                                           Common         Common         Common       Capital in                      Stock-
                                            Stock         Shares          Stock         Excess        Retained       holders'
                                          (Voting)      (Nonvoting)    (Nonvoting)      of par        Earnings        Equity
                                          --------      -----------    -----------      ------        --------        ------
<S>                                       <C>           <C>            <C>             <C>            <C>            <C>

DECEMBER 31, 1993                           $    9            - -         $  - -       $  8,997        $ 2,416        $11,422
   Net income                                  - -            - -            - -            - -          6,403          6,403
   Preferred stock dividends                   - -            - -            - -            - -         (2,193)        (2,193)
   Other                                       - -            - -            - -             51            - -             51
   Issuance of common shares                     1            - -            - -          8,999            - -          9,000
   Common shares accrued                       - -            - -            - -             63            - -             63
   Warrants accrued                            - -            - -            - -             29            - -             29
                                            ------        -------          -----       --------        -------        -------
DECEMBER 31, 1994                               10            - -            - -         18,139          6,626         24,775
   Net income                                  - -            - -            - -            - -          4,794          4,794
   Preferred stock dividends
     issued or accrued                         - -                           - -            - -         (1,744)        (1,744)
   Repurchase of Series B
     preferred stock                           - -            - -            - -            - -            - -            - -
   Cash dividends                              - -            - -            - -            - -           (254)          (254)
   Accretion of warrants to
     fair market value                         - -            - -            - -        (28,538)        (8,737)       (37,275)
   Issuance of warrants from
     option grant                              - -            - -            - -         (2,900)           - -         (2,900)
   Nonvoting common stock
     issued for services related to
     financing the Acquisition issued
     in exchange for common stock,
     warrants and options                      (11)       139,474              1          2,749            - -          2,739
   Increase in value of stock
     option grants                             - -            - -            - -          2,407            - -          2,407
   Common stock issued:
   Acquisition                                 563        215,614              3         35,223            - -         35,789
   Exercise of warrants                          6            - -            - -          1,673            - -          1,679
   100% stock dividend                         575        403,906              4            - -           (579)           - -
   Stock option exercises                        2            - -            - -             28            - -             30
   Other                                       - -            - -            - -             90           (106)           (16)
                                            ------        -------          -----       --------        -------        -------
DECEMBER 31, 1995                           $1,145        758,994          $   8       $ 28,871        $   - -        $30,024
                                            ------        -------          -----       --------        -------        -------
                                            ------        -------          -----       --------        -------        -------

</TABLE>


     SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.


                                       24
<PAGE>

                     UNITED STATIONERS INC. AND SUBSIDIARIES
           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                    (DOLLARS IN THOUSANDS, EXCEPT SHARE DATA)


<TABLE>
<CAPTION>


                                                                                                                     Number of
                                                        Redeemable Preferred Stock                                    Common
                                            --------------------------------------------------       Redeemable       Shares
                                              A              B              C            Total        Warrants       (Voting)
                                            -----          -----          -----          -----        --------       --------
<S>                                         <C>           <C>            <C>            <C>           <C>          <C>

DECEMBER 31, 1995                           $7,437         $  - -        $10,604        $18,041        $39,692     11,446,306
   Net Income                                  - -            - -            - -            - -            - -            - -
   Preferred stock dividends
     issued or accrued                         649            - -          1,095          1,744            - -            - -
   Reduction of warrants
     to fair market value                      - -            - -            - -            - -        (15,880)           - -
   Decrease in value of
     stock option grants                       - -            - -            - -            - -            - -            - -
   Other                                       - -            - -            - -            - -            - -            - -
                                            ------         ------        -------        -------        -------     ----------
DECEMBER 31, 1996                           $8,086         $  - -        $11,699        $19,785        $23,812     11,446,306
                                            ------         ------        -------        -------        -------     ----------
                                            ------         ------        -------        -------        -------     ----------
<CAPTION>

                                                         Number of                                                     Total
                                           Common         Common         Common       Capital in                      Stock-
                                            Stock         Shares          Stock         Excess        Retained       holders'
                                          (Voting)      (Nonvoting)    (Nonvoting)      of par        Earnings        Equity
                                          --------      -----------    -----------      ------        --------        ------
<S>                                       <C>           <C>            <C>             <C>            <C>            <C>

DECEMBER 31, 1995                           $1,145        758,994           $  8        $28,871    $       - -        $30,024
   Net Income                                  - -            - -            - -            - -         31,993         31,993
   Preferred stock dividends
     issued or accrued                         - -            - -            - -            - -         (1,744)        (1,744)
   Reduction of warrants
     to fair market value                      - -              -              -         15,880            - -         15,880
   Decrease in value of
     stock option grants                       - -            - -            - -           (339)           - -           (339)
   Other                                       - -            - -            - -              6            - -              6
                                            ------        -------           ----        -------        -------        -------
DECEMBER 31, 1996                           $1,145        758,994           $  8        $44,418        $30,249        $75,820
                                            ------        -------           ----        -------        -------        -------
                                            ------        -------           ----        -------        -------        -------

</TABLE>


     SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.


                                       25
<PAGE>


                     UNITED STATIONERS INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (dollars in thousands)

<TABLE>
<CAPTION>

                                                                                                 YEAR ENDED
                                                                                                 DECEMBER 31,
                                                                            -------------------------------------------------
                                                                                 1996                1995                1994
                                                                                 ----                ----                ----
<S>                                                                         <C>                 <C>                  <C>

CASH FLOWS FROM OPERATING ACTIVITIES:
   Net income                                                               $  31,993           $   4,794            $  6,403
   Adjustments to reconcile net income to net cash provided
    by (used in) operating activities:
       Depreciation                                                            22,766              19,708               4,869
       Amortization                                                             8,609              10,564               1,487
       Deferred income taxes                                                    5,299                (163)                - -
       Compensation expense on stock option grants                               (339)              2,407                 - -
       Other                                                                    1,584                 301                 307
   Changes in operating assets and liabilities,
     net of acquisitions:
       Increase in accounts receivable                                        (15,379)            (32,330)               (128)
       (Increase) decrease in inventory                                       (71,282)             31,656              (5,579)
       Decrease (increase) in other assets                                      1,814               2,765                (598)
       Increase (decrease) in accounts payable                                 36,352              (5,104)              3,806
       (Decease) increase in accrued liabilities                              (17,185)             (3,474)              2,260
       (Decrease) increase in other liabilities                                (2,623)             (4,795)              1,261
                                                                            ---------           ---------            --------
           Net cash provided by operating activities                            1,609              26,329              14,088

CASH FLOWS FROM INVESTING ACTIVITIES:
       Acquisitions:
            United Stationers Inc., net of cash
              acquired of $14,500                                                 - -            (258,438)                - -
            Lagasse Bros., Inc.                                               (51,896)                - -                 - -
       Capital expenditures                                                    (8,190)             (8,086)               (625)
       Proceeds from disposition of property, plant & equipment                11,076                  69                  71
       Other                                                                     (861)                164                 - -
                                                                            ---------           ---------            --------
            Net cash used in investing activities                             (49,871)           (266,291)               (554)

CASH FLOWS FROM FINANCING ACTIVITIES:
       Net borrowings (repayments) under revolver                              22,000              (3,608)             (7,900)
       Retirements and principal payments of debt                             (30,861)           (412,342)             (4,827)
       Borrowings under financing agreements                                   57,933             686,854                 - -
       Financing costs                                                         (1,851)            (25,290)                - -
       Issuance of common stock                                                   - -              12,006                 - -
       Retirement of Series B Preferred Stock                                     - -              (6,892)                - -
       Cash dividend                                                              - -                (254)                - -
       Other                                                                      - -                (701)                 51
                                                                            ---------           ---------            --------
            Net cash provided by (used in) financing activities                47,221             249,773             (12,676)
                                                                            ---------           ---------            --------
NET CHANGE IN CASH AND CASH EQUIVALENTS                                        (1,041)              9,811                 858
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR                                   11,660               1,849                 991
                                                                            ---------           ---------            --------
CASH AND CASH EQUIVALENTS, END OF YEAR                                      $  10,619           $  11,660            $  1,849
                                                                            ---------           ---------            --------
                                                                            ---------           ---------            --------

</TABLE>


     SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.


                                       26
<PAGE>

                     UNITED STATIONERS INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1.   BASIS OF PRESENTATION AND PURCHASE ACCOUNTING

On March 30, 1995, Associated Holdings, Inc. ("Associated") purchased 92.5% of
the then outstanding shares of the common stock, $0.10 par value ("Common
Stock") of United Stationers Inc. ("United") for approximately $266.6 million in
the aggregate pursuant to a tender offer (the "Offer").  Immediately thereafter,
Associated merged with and into United (the "Merger" and, collectively with the
Offer, the "Acquisition"), and Associated Stationers, Inc. ("ASI"), a wholly
owned subsidiary of Associated merged with and into United Stationers Supply Co.
("USSC"), a wholly owned subsidiary of United, with United and USSC continuing
as the respective surviving corporations.  United, as the surviving corporation
following the Merger, is referred to herein as the "Company."  As a result of
share conversions in the Merger, immediately after the Merger, (i) the former
holders of common stock and common stock equivalents of Associated owned shares
of Common Stock and warrants or options to purchase shares of Common Stock
constituting in the aggregate approximately 80% of the shares of Common Stock on
a fully diluted basis, and (ii) holders of pre-Merger United common stock owned
in the aggregate approximately 20% of the shares of Common Stock on a fully
diluted basis.  Although United was the surviving corporation in the Merger, the
transaction was treated as a reverse acquisition for accounting purposes with
Associated as the acquiring corporation.

The financial information for the year ended December 31, 1995 includes
Associated only for the three months ended March 30, 1995 and the results of the
Company for the nine months ended December 31, 1995.  Financial information
prior to 1995 reflects that of Associated only.  All common and common
equivalent shares have been adjusted to reflect the 100% stock dividend
effective November 9, 1995.

The Acquisition has been accounted for using the purchase method of accounting
and, accordingly, the purchase price has been allocated to the assets purchased
and the liabilities assumed based upon the estimated fair values at the date of
acquisition with the excess of cost over fair value allocated to goodwill.  The
purchase price allocation to property, plant and equipment is amortized over the
estimated useful lives ranging from 3 to 40 years.  Goodwill is amortized over
40 years.

The total purchase price of United by Associated and its allocation to assets
and liabilities acquired are as follows (dollars in thousands):

Purchase price:
     Price of United shares purchased by Associated                  $ 266,629
     Fair value of United shares not acquired in the Offer              21,618
     Transaction costs                                                   6,309
                                                                     ---------
          Total purchase price                                       $ 294,556
                                                                     ---------
                                                                     ---------

Allocation of purchase price:
     Current assets                                                  $ 542,993
     Property, plant and equipment                                     151,012
     Goodwill                                                           74,503
     Other assets                                                        7,699
     Liabilities assumed                                              (481,651)
                                                                     ---------
          Total purchase price                                       $ 294,556
                                                                     ---------
                                                                     ---------


                                       27
<PAGE>

Immediately following the Merger, the number of outstanding shares of Common
Stock was 11,996,154 (or 13,947,440 on a fully diluted basis), of which (i) the
former holders of Class A Common Stock, $0.01 par value, and Class B Common
Stock, $0.01 par value, of Associated (collectively "Associated Common Stock")
and warrants or options to purchase Associated Common Stock in the aggregate
owned 9,206,666 shares constituting approximately 76.7% of the outstanding
shares of Common Stock and outstanding warrants or options for 1,951,286 shares
(collectively 80.0% on a fully diluted basis) and

(ii) pre-Merger holders of shares of Common Stock (other than Associated-owned
and treasury shares) in the aggregate owned 2,789,488 shares of Common Stock
constituting approximately 23.3% of the outstanding shares (or 20.0% on a fully
diluted basis).  As used in this paragraph, the term "Common Stock" includes
shares of Nonvoting Common Stock, $0.01 par value, of the Company, which are
immediately convertible into Voting Common Stock.

On October 31, 1996, the Company acquired all of the capital stock of Lagasse
Bros., Inc. ("Lagasse") for approximately $51.9 million.  The acquisition was
financed primarily through senior debt .  The Lagasse acquisition has been
accounted for using the purchase method of accounting and, accordingly, the
purchase price has been allocated to the assets purchased and the liabilities 
assumed based upon the estimated fair values at the date of acquisition with 
the excess of cost over fair value of approximately $39.0 million allocated to 
goodwill. The financial information for the year ended December 31, 1996 
includes the results of Lagasse for two months ended December 31, 1996.  The 
actual and pro forma effects of this acquisition are not material.


2.  OPERATIONS

The Company is a national wholesale distributor of business products.  The
Company offers approximately 30,000 items from more than 500 manufacturers.
This includes a broad spectrum of office products, computer supplies, office
furniture and facilities management supplies.  The Company primarily serves
commercial and contract office products dealers.  Its customers include more
than 15,000 resellers -- such as computer products resellers, office furniture
dealers, mass merchandisers, sanitary supply distributors, warehouse clubs, mail
order houses and office products superstores.  The Company has a distribution
network of 41 Regional Distribution Centers. Through its integrated computer
system, the Company provides a high level of customer service and overnight
delivery. In addition, the Company has 14 Lagasse Distribution Centers,
specifically serving janitorial and sanitary supply distributors.


3.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of the Company and
its subsidiaries. All significant intercompany accounts and transactions have
been eliminated in consolidation.

REVENUE RECOGNITION

Revenue is recognized when a product is shipped and title is transferred to the
customer in the period the sale is reported.

CASH AND CASH EQUIVALENTS

Investments in low-risk instruments that have original maturities of three
months or less are considered to be cash equivalents.  Cash equivalents are
stated at cost which approximates market value.


                                       28
<PAGE>

INVENTORIES

Inventories constituting approximately 94% of total inventories at December 31,
1996 and 1995 have been valued under the last-in, first-out (LIFO) method.
Prior to 1995, all inventories were valued under the first-in, first-out (FIFO)
method.  Effective January 1, 1995, Associated changed its method of accounting
for the cost of inventory from the FIFO method to the LIFO method.  Associated
made this change in contemplation of its acquisition of United (accounted for as
a reverse acquisition) so that its method would conform to that of United.
Associated believed that the LIFO method provided a better matching of current
costs and current revenues and that earnings reported under the LIFO method were
more easily compared to that of other companies in the wholesale industry where
the LIFO method is common.  This change resulted in a charge to pre-tax income
of the Company of approximately $8.8 million ($5.3 million net of tax benefit of
$3.5 million) or $0.37 per common and common equivalent share for the year ended
December 31, 1995.  The cumulative effect of this accounting change for years
prior to 1995 is not determinable, nor are the pro forma effects of retroactive
application of the LIFO method to prior years.  Inventory valued under the FIFO
and LIFO accounting methods are recorded at the lower of cost or market.  If the
lower of FIFO cost or market method of inventory accounting had been used by the
Company for all inventories, merchandise inventories would have been
approximately $4.8 million and $8.8 million higher than reported at December 31,
1996 and 1995, respectively.

PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment is recorded at cost.  Depreciation and
amortization are determined by using the straight-line method over the estimated
useful lives of the assets.

The estimated useful life assigned to fixtures and equipment is from two to ten
years; the estimated useful life assigned to buildings does not exceed 40 years;
leasehold improvements and assets under capital leases are amortized over the
lesser of their useful lives or the term of the applicable lease.

GOODWILL

Goodwill represents the excess cost over the value of net assets of businesses
acquired and is amortized on a straight-line basis over 40 years.  The Company
continually evaluates whether events or circumstances have occurred indicating
that the remaining estimated useful life of goodwill may not be appropriate.
When factors indicate that goodwill should be evaluated for possible impairment,
the Company will use an estimate of undiscounted future operating income
compared to the carrying value of goodwill to determine if a write-off is
necessary.  The cumulative amount of goodwill amortized at December 31, 1996 and
1995 is $4,047,000 and  $1,953,000, respectively.

SOFTWARE CAPITALIZATION

The Company capitalizes major internal and external systems development costs
determined to have benefits for future periods.  Amortization is recognized over
the periods in which the benefits are realized, generally not to exceed three
years.

INCOME TAXES

Income taxes are accounted for using the liability method under which deferred
income taxes are recognized for the estimated tax consequences for temporary
differences between the financial statement carrying amounts and the tax basis
of assets and liabilities.  Provision has not been made for deferred U.S. income
taxes on the undistributed earnings of the Company's foreign subsidiaries since
these earnings are intended to be permanently invested.


                                       29
<PAGE>


NET INCOME PER COMMON AND COMMON EQUIVALENT SHARE

Net income per common and common equivalent share is based on net income after
preferred stock dividend requirements.  Primary and fully diluted earnings per
share are based on the weighted average number of common and common equivalent
shares outstanding during the period.  Stock options and warrants are considered
to be common equivalent shares.

FOREIGN CURRENCY TRANSLATION

The functional currency for the Company's foreign operations is the local
currency.

RECLASSIFICATION

Certain amounts from prior periods have been reclassified to conform to the 1996
basis of presentation.  During the fourth quarter of 1996, the Company
reclassified certain delivery and occupancy costs from operating expenses to
cost of goods sold to conform the Company's presentation to others in the 
business products industry.  The following table sets forth the impact of the 
reclassification for the years presented in the Consolidated Statements of 
Income:

<TABLE>
<CAPTION>

                                                                                         FOR THE YEAR ENDED DECEMBER 31,
                                                                                 ---------------------------------------------
                                                                                 1996             1995 (1)            1994 (2)
                                                                                 ----             -------             -------
<S>                                                                              <C>              <C>                 <C>

Gross Margin as a Percent of Net Sales:
     Gross margin prior to reclassification                                      21.0%               21.8%               24.0%
     Gross margin as reported                                                    17.0%               17.4%               18.7%
Operating Expenses as a Percent of Net Sales:
     Operating expense ratio prior to reclassification                           16.1%               17.9% (3)           20.1%
     Operating expense ratio as reported                                         12.1%               13.5% (3)           14.8%

</TABLE>

(1)  Includes Associated only for the three months ended March 30, 1995 and the
     results of the Company for the nine months ended December 31, 1995.
(2)  Reflects the results of Associated only.
(3)  Excludes a restructuring charge of $9.8 million.

USE OF ESTIMATES

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the Consolidated Financial Statements and
accompanying notes.  Actual results could differ from these estimates.

NEW ACCOUNTING PRONOUNCEMENTS

During 1996, the Company adopted the supplemental disclosure requirement of 
Financial Accounting Standards Board Statement No. 123 (SFAS No. 123), 
"Accounting for Stock-Based Compensation." SFAS No. 123 encourages but does 
not require adoption of a fair value method of accounting for stock options.  
For those entities which do not elect to adopt the fair value method, the new 
standard requires supplemental disclosure regarding the pro forma effects of 
that method. The Company has chosen to continue to account for stock-based 
compensation using the intrinsic value based method of accounting prescribed 
by Accounting Principles Board Opinion No. 25 (APB No. 25).  "Accounting for 
Stocks Issued to Employees," and related Interpretations.  Adoption of SFAS 
No. 123 will have no impact on the financial position or results of 
operations of the Company.

                                       30
<PAGE>

During 1996, the Company adopted Financial Accounting Standards Board Statement
No. 121 (SFAS No. 121), "Accounting for the Impairment of Long-Lived Assets and
Long-Lived Assets to be Disposed Of."  SFAS No. 121 requires that an impairment
loss be recorded on long-lived assets used in operations when indicators of
impairment are present and the undiscounted cash flows estimated to be generated
by those assets are less than the assets' carrying amount.  SFAS No. 121 also
addresses the accounting for long-lived assets that are expected to be disposed.
The effect of adoption was not material.


4.  BUSINESS COMBINATION AND RESTRUCTURING CHARGE

The following summarized unaudited pro forma operating data for the years ended
December 31, 1995 and 1994 is presented giving effect to the Acquisition as if
it had been consummated at the beginning of the respective periods and,
therefore, reflects the results of United and Associated on a consolidated
basis.  These pro forma results have been prepared for comparative purposes only
and do not purport to be indicative of the results of operations that actually
would have resulted had the combination been in effect on the dates indicated,
or which may result in the future.  The pro forma results exclude one-time
nonrecurring charges or credits directly attributable to the transaction
(dollars in thousands, except share data):

                                                   PRO FORMA TWELVE MONTHS
                                                  -------------------------
                                                      ENDED DECEMBER 31,
                                                  -------------------------
                                                      1995           1994
                                                  ----------     ----------
Net sales                                         $2,201,860     $1,990,363
Income before income taxes                            22,737          4,237
Net income                                            13,063          2,581
Net income per primary and
   fully diluted common and
   common equivalent share                             $0.80          $0.07

The pro forma income statement adjustments consist of (i) increased depreciation
expense resulting from the write-up of certain fixed assets to fair value, (ii)
additional incremental goodwill amortization, (iii) additional incremental
interest expense due to debt issued, net of debt retired, and (iv) reduction in
preferred stock dividends due to the repurchase of the Series B preferred stock.

The historical results for the twelve months ended December 31, 1995 included 
a restructuring charge of $9.8 million ($5.9 million net of tax benefit of 
$3.9 million).  The restructuring charge included severance costs totaling 
$1.8 million.  The Company's consolidation plan specified that 330 
distribution, sales and corporate positions, 180 of which related to 
pre-Merger Associated, were to be eliminated substantially within one year 
following the Merger.  The Company has achieved its target, with the related 
termination costs of approximately $1.8 million charged against the reserve.  
The restructuring charge also included distribution center closing costs 
totaling $6.7 million and stockkeeping unit reduction costs totaling $1.3 
million.  The consolidation plan called for the closing of eight redundant 
distribution centers, six of which related to pre-Merger Associated, and the 
elimination of overlapping inventory items from the Company's catalogs 
substantially within the one-year period following the Merger.  Estimated 
distribution center closing costs included (i) the net occupancy costs of 
leased facilities after they are vacated until expiration of leases and (ii) 
the losses on the sale of owned facilities and the facilities' furniture, 
fixtures, and equipment.  Estimated stockkeeping unit reduction costs 
included losses on the sale of inventory items which have been discontinued 
solely as a result of the Acquisition.  As of December 31, 1996, five of the 
six redundant pre-Merger Associated distribution centers have been closed 
with $5.5 million charged against the reserve and $2.0 million related to 
stockkeeping unit reduction costs have also been charged against the reserve. 
 As of December 31, 1996, the Company's consolidation plan has been 
substantially completed.  Seven of the eight redundant distribution centers 
have been closed.  The restructuring reserve balance at December 31, 1996 of 
$0.5 million is expected to be adequate to cover the remaining estimated 
expenditures related to integration and transition costs.

                                       31
<PAGE>

The historical results for 1995 also included an extraordinary charge of
approximately $2.4 million ($1.4 million net of tax benefit of $1.0 million) of
financing costs and original issue discount relating to the debt retired.  In
addition, the historical results for 1995 included compensation expense relating
to an increase in the value of employee stock options of approximately $1.5
million ($0.9 million net of tax benefit of $0.6 million) as a result of the
Acquisition and Merger.  The pro forma twelve months ended December 31, 1995 do
not include the extraordinary write-off.

5.   LONG-TERM DEBT

Long-term debt consists of the following amounts (dollars in thousands):

<TABLE>
<CAPTION>
                                                                                                     1996                1995
                                                                                                     ----                ----
<S>                                                                                              <C>                 <C>

Revolver                                                                                         $207,000            $185,000
Term Loans
     Tranche A, due in installments until September 30, 2001                                      144,374                 - -
     Tranche B, due in installments until September 30, 2003                                       64,750                 - -
     Tranche A, due in installments until March 31, 2000                                              - -             110,053
     Tranche B, due in installments until March 31, 2002                                              - -              71,837
Senior Subordinated Notes                                                                         150,000             150,000
Mortgage at 9.4%, due in installments until 1999                                                    2,071               2,174
Industrial development bonds, at market interest rates,
  maturing at various dates through 2011                                                           14,300              14,300
Industrial development bonds, at 66% to 79% of prime,
  maturing at various dates through 2004                                                           15,500              15,500
Other long-term debt                                                                                  175                 313
                                                                                                 --------            --------
                                                                                                  598,170             549,177
   Less - current maturities                                                                      (45,557)            (22,979)
                                                                                                 --------            --------
                                                                                                 $552,613            $526,198
                                                                                                 --------            --------
                                                                                                 --------            --------

</TABLE>

The prevailing prime interest rate at the end of 1996 and 1995 was 8.25% and
8.5%, respectively.

As of December 31, 1996, the credit facilities under the Amended and Restated
Credit Agreement (the "Credit Agreement") consisted of $209.1 million of term
loan borrowings (the "Term Loan Facilities"), and up to $325.0 million of
revolving loan borrowings (the "Revolving Credit Facility").  This agreement was
amended to provide funding for the acquisition of Lagasse Bros., Inc., to extend
the maturities, adjust the pricing and to revise certain covenants.  In
addition, the Company has $150.0 million of 12-3/4% Senior Subordinated Notes
due 2005 (the "Notes").

The Term Loan Facilities consist of a $144.4 million Tranche A term loan 
facility (the "Tranche A Facility") and a $64.7 million Tranche B term loan 
facility (the "Tranche B Facility).  Quarterly payments under the Tranche A 
facility range from $5.63 million at December 31, 1996 to $8.30 million at 
September 30, 2001.  Quarterly payments under the Tranche B Facility range 
from $0.25 million at December 31, 1996 to $6.64 million at September 30, 
2003.  On March 31, 1997, principal payments of $15.9 million and $7.4 
million are required to be paid from Excess Cash Flow (as defined in the 
Credit Agreement) at December 31, 1996 for the Tranche A and Tranche B 
Facilities, respectively.

The Revolving Credit Facility is limited to the lesser of $325.0 million or a 
borrowing base equal to: 80% of Eligible Receivables (as defined in the 
Credit Agreement); plus 50% of Eligible Inventory (as defined in the Credit 
Agreement) (provided that no more than 60% or, during certain periods 65%, of 
the Borrowing Base may be attributable to Eligible Inventory); plus the 
aggregate amount of cover for Letter of Credit Liabilities (as defined in the 
Credit Agreement). In addition, for each fiscal year, the Company must repay 
revolving loans so that for a period of 30 consecutive days in each fiscal 
year the aggregate revolving loans do not exceed $250.0 million.  The 
Revolving Credit Facility matures on October 31, 2001.

                                       32
<PAGE>


The Term Loan Facilities and the Revolving Credit Facility are secured by first
priority pledges of the stock of USSC, all of the stock of the domestic direct
and indirect subsidiaries of USSC, certain of the stock of all of the foreign
direct and indirect subsidiaries of USSC and security interests in, and liens
upon, all accounts receivable, inventory, contract rights and other certain
personal and certain real property of USSC and its domestic subsidiaries.

The loans outstanding under the Term Loan Facilities and the Revolving Credit 
Facility bear interest as determined within a set range with the rate based 
on the ratio of total debt to earnings before interest, taxes, depreciation 
and amortization ("EBITDA").  The Tranche A Facility and the Revolving Credit 
Facility bear interest, at prime plus 0.25% to 1.25% or, at the Company's 
option, LIBOR plus 1.50% to 2.50%.  The Tranche B Facility bears interest at 
prime plus 1.25% to 1.75% or, at the Company's option, LIBOR plus 2.50% to 
3.00%.  

The Credit Agreement contains representations and warranties, affirmative and 
negative covenants and events of default customary for financings of this 
type.  As of December 31, 1996, the Company was in compliance with all 
covenants contained in the Credit Agreement.

The Company is exposed to market risk for changes in interest rates.  The
Company may enter into interest rate protection agreements, including collar
agreements, to reduce the impact of fluctuations in interest rates on a portion
of its variable rate debt.  Such agreements generally require the Company to pay
to or entitle the Company to receive from the other party the amount, if any, by
which the Company's interest payments fluctuate beyond the rates specified in
the agreements.  The Company is subject to the credit risk that the other party
may fail to perform under such agreements.  The Company's allocated cost of such
agreements is amortized to interest expense over the term of the agreements, and
the unamortized cost is included in other assets.  Payments received or made as
a result of the agreements, if any, are recorded as an addition or a reduction
to interest expense.  At December 31, 1996, the Company had agreements which
collar $200.0 million of the Company's borrowings under the Credit Facilities at
interest rates between 8.0% and 6.0%, which expire in April 1998.  For the years
ended December 31, 1996 and 1995, the Company recorded $0.9 million and $0.1
million, respectively, to interest expense resulting from interest rate
fluctuations beyond the rates specified in the collar agreements.

The right of United to participate in any distribution of earnings or
assets of USSC is subject to the prior claims of the creditors of USSC.  In
addition, the Credit Agreement contains certain restrictive covenants, including
covenants that restrict or prohibit USSC's ability to pay dividends and make
other distributions to United.

Debt maturities for the years subsequent to December 31, 1996 are as follows
(dollars in thousands):

Year                                        Amount
----                                        ------
1997                                       $45,557
1998                                        26,609
1999                                        32,724
2000                                        34,717
2001                                       242,996
Later Years                                215,567
--------------------------------------------------
                                          $598,170
--------------------------------------------------
--------------------------------------------------


At December 31, 1996 and 1995, the Company had available letters of credit of
$55.3 million and $56.0 million, respectively, of which $52.8 million and $56.0
million, respectively, were outstanding.


                                       33
<PAGE>


6.   LEASES

The Company has entered into several non-cancelable long-term leases for
property and equipment.  Future minimum lease payments for non-cancelable leases
in effect at December 31, 1996 having initial remaining terms of more than one
year are as follows (dollars in thousands):

                                                     Capital      Operating
Year                                                   Lease      Leases (1)
----                                                   -----      ---------
1997                                                  $1,479        $18,191
1998                                                     487         15,452
1999                                                     - -         13,000
2000                                                     - -         10,285
2001                                                     - -          8,185
Later years                                              - -         21,660
------------------------------------------------------------        -------
Total minimum lease payments                           1,966        $86,773
                                                                    -------
                                                                    -------

Less amount representing interest                        134
------------------------------------------------------------
Present value of net minimum
   lease payments (including current
   portion of $1,366)                                 $1,832
------------------------------------------------------------
------------------------------------------------------------

(1)  Operating leases are net of immaterial sublease income.

Rental expense for all operating leases was approximately $18.8 million, $14.2
million and $3.0 million in 1996, 1995 and 1994, respectively.


7.   PENSION PLANS AND DEFINED CONTRIBUTION PLAN

PENSION PLANS

In connection with the Merger and Acquisition, the Company assumed the pension
plans of United.  Associated did not have a pension plan.  Former Associated
employees entered the pension plans on July 1, 1996.  As of this date, the
Company has pension plans covering substantially all of its employees.  Non-
contributory plans covering non-union employees provide pension benefits that
are based on years of credited service and a percentage of annual compensation.
Non-contributory plans covering union members generally provide benefits of
stated amounts based on years of service.  The Company funds the plans in
accordance with current tax laws.

The following table sets forth the plans' funded status at December 31, 1996 and
1995 (dollars in thousands):

                                                                1996      1995
------------------------------------------------------------------------------
Actuarial Present Value of Benefit Obligation
     Vested benefits                                         $19,015 $  18,776
     Non-vested benefits                                       1,431     1,996
------------------------------------------------------------------------------
Accumulated benefit obligation                                20,446    20,772
Effect of projected future compensation levels                 3,110     2,861
------------------------------------------------------------------------------
Projected benefit obligation                                  23,556    23,633
Plan assets at fair value                                     28,373    26,713
------------------------------------------------------------------------------
Plan assets in excess of projected benefit obligation          4,817     3,080
Unrecognized prior service cost                                  720       - -
Unrecognized net gain due to past
  experience different from assumptions                       (4,348)     (507)
------------------------------------------------------------------------------
Prepaid pension asset recognized
  in the Consolidated Balance Sheets                          $1,189  $  2,573
------------------------------------------------------------------------------
------------------------------------------------------------------------------


                                       34
<PAGE>

The plans' assets consist of corporate and government debt securities and equity
securities.  Net periodic pension cost for 1996 and 1995 for pension and
supplemental benefit plans includes the following components (dollars in
thousands):

                                                                1996      1995
------------------------------------------------------------------------------
Service cost-benefit earned during the period                 $1,884   $ 1,142
Interest cost on projected benefit obligation                  1,652     1,157
Actual return on assets                                       (3,468)   (2,711)
Net amortization and deferral                                  1,495     1,382
------------------------------------------------------------------------------
Net periodic pension cost                                     $1,563  $    970
------------------------------------------------------------------------------
------------------------------------------------------------------------------

The assumptions used in accounting for the Company's defined benefit plans for
the two years presented are set forth below:


                                                             1996         1995
------------------------------------------------------------------------------
Assumed discount rate                                        7.5%        7.25%
Rates of compensation increase                          0.0%-5.5%    0.0%-5.5%
Expected long-term rate of return on plan assets             7.5%         7.5%
------------------------------------------------------------------------------
------------------------------------------------------------------------------

DEFINED CONTRIBUTION

The Company has a defined contribution plan in which all salaried employees and
certain hourly paid employees of the Company are eligible to participate
following completion of six consecutive months of employment.  The plan permits
employees to have contributions made as 401(k) salary deferrals on their behalf,
or as voluntary after-tax contributions, and provides for Company contributions,
or contributions matching employee salary deferral contributions, at the
discretion of the Board of Directors. The Company has no present intention to
make Company contributions other than matching contributions.  Company
contributions for matching of employee contributions were approximately $0.9
million, $0.6 million and $0.3 million in 1996, 1995 and 1994, respectively.


8.   POSTRETIREMENT BENEFITS

In connection with the Merger, the Company assumed the postretirement plan of
United on March 30, 1995.  Associated did not have a postretirement plan.  The
plan is unfunded and provides health care benefits to substantially all retired
non-union employees and their dependents.  Eligibility requirements are based on
the individual's age (minimum age of 55), years of service and hire date.  The
benefits are subject to retiree contributions, deductibles, co-payment
provisions and other limitations.  Retirees pay one-half of the projected plan
costs.

The following table sets forth the amounts recognized in the Company's
Consolidated Balance Sheets as of December 31, 1996 and 1995 (dollars in
thousands):

                                                                1996      1995
------------------------------------------------------------------------------
Retirees                                                     $  (877)  $  (762)
Other fully eligible plan participants                          (632)     (697)
Other active plan participants                                (1,588)   (1,362)
------------------------------------------------------------------------------
Total APBO                                                    (3,097)   (2,821)
Unrecognized net (gain)/loss                                      (1)       76
------------------------------------------------------------------------------
Accrued postretirement
  benefit obligation                                         $(3,098)  $(2,745)
------------------------------------------------------------------------------
------------------------------------------------------------------------------

The cost of postretirement health care benefits for the year ended December 31,
1996 and 1995 were as follows (dollars in thousands):

                                                                1996      1995
------------------------------------------------------------------------------
Service cost                                                    $239      $161
Interest on accumulated
  benefit obligation                                             204       109
------------------------------------------------------------------------------
Net postretirement benefit cost                                 $443      $270
------------------------------------------------------------------------------
------------------------------------------------------------------------------


                                       35
<PAGE>

The assumptions used in accounting for the Company's postretirement plan for the
two years presented are set forth below (dollars in thousands):

                                                                1996      1995
------------------------------------------------------------------------------
Assumed average heath care cost trend rate                       3.0%      3.0%
Assumed discount rate                                            7.5%      7.5%
Impact of 1% increase in health care costs on:
   Accumulated benefit obligation                               $450      $396
   Annual service and interest cost                             $ 79      $ 46
------------------------------------------------------------------------------
------------------------------------------------------------------------------

9.   STOCK OPTION PLAN

The Management Equity Plan (the "Plan"), as amended, is administered by the
Board of Directors, although the Plan provides that the Board of Directors of
the Company may designate an option committee to administer the Plan.

In September 1995, the Company's Board of Directors approved an amendment to the
Plan which provided for the issuance of options to key management employees of
the Company exercisable for up to 2.2 million additional shares of its Common
Stock.  Subsequently, approximately 2.2 million options were granted during 1995
and 1996 to management employees.  Some of the options were granted at an option
price below market value and the option price of certain options increases by
$0.625 on a quarterly basis effective April 1, 1996.

The stock options granted under the Plan do not vest to the employee until 
the occurrence of an event (a "Vesting Event") that causes the present 
non-public equity investors to have received at least a full return of their 
investment (at cost) in cash, fully tradable marketable securities or the 
equivalent.  A Vesting Event will cause the Company to recognize compensation 
expense based upon the difference between the fair market value of the Common 
Stock and the exercise prices of the stock options.  If a Vesting Event were 
to occur, based upon a stock price of $19.50, the Company would recognize a 
nonrecurring noncash charge of $18.4 million in compensation expense ($10.6 
million net of tax benefit of $7.8 million).  Each $1.00 change in the fair 
market value of Common Stock price could result in a maximum adjustment to 
such compensation expense of approximately $2.5 million ($1.4 million net of 
tax effect of $1.1 million).

An optionee under the Plan must pay the full option price upon exercise of an
option (i) in cash, (ii) with the consent of the Board of Directors of the
Company, by delivering shares of Common Stock already owned by such optionee
(including shares to be received upon exercise of the option) and having a fair
market value at least equal to the exercise price or (iii) in any combination of
the foregoing.  The Company may require the optionee to satisfy federal tax
withholding obligations with respect to the exercise of options by (i)
additional withholding from the employee's salary, (ii) requiring the optionee
pay in cash or (iii) reducing the number of shares of Common Stock to be issued
(except in the case of incentive options).

The following table summarizes the transactions of the Plan for the last three
years:

<TABLE>
<CAPTION>

Management Equity Plan                               Weighted Average               Weighted Average               Weighted Average
(excluding restricted stock)               1996       Exercise Prices     1995       Exercise Prices    1994        Exercise Prices
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                      <C>         <C>               <C>          <C>               <C>          <C>

Options outstanding at
  beginning of the period                2,030,996         $10.73        217,309         $ 1.45        367,160          $1.45
-----------------------------------------------------------------------------------------------------------------------------------
Granted                                    650,772         $ 7.95      1,854,649         $11.65         28,694          $1.45
-----------------------------------------------------------------------------------------------------------------------------------
Exercised                                      - -            - -        (20,804)        $ 1.45            - -            - -
-----------------------------------------------------------------------------------------------------------------------------------
Canceled                                  (184,000)        $ 7.64        (20,158)        $ 1.45       (178,545)         $1.45
-----------------------------------------------------------------------------------------------------------------------------------
Options outstanding at
  end of the period                      2,497,768         $11.61      2,030,996         $10.73        217,309          $1.45
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------

</TABLE>

                                       36
<PAGE>

The following table summarizes information concerning outstanding options of the
Plan at December 31, 1996:

                                    Remaining
 Exercise        Number            Contractual
  Prices       Outstanding         Life (years)
-------------------------------------------------
  $ 1 45         385,120              5.09
-------------------------------------------------
  $ 5.12         207,148              5.74
-------------------------------------------------
  $14.38       1,905,500              5.74
-------------------------------------------------
               2,497,768
-------------------------------------------------
-------------------------------------------------

All share and per share data have been restated to reflect the 100% stock
dividend effective November 9, 1995 and the conversion of Associated common
stock as a result of the Merger.

During 1996, the Company adopted the supplemental disclosure requirements of
SFAS No. 123.  Accordingly, the Company is required to disclose pro forma net
income and earnings per share as if the fair value-based accounting method in
SFAS No. 123 had been used to account for stock-based compensation cost.  The
Company's stock options granted under the Plan are considered "all or nothing"
awards since the options do not vest to the employee until the occurrence of a
Vesting Event.  The fair value of "all or nothing" awards are measured at the
grant date; however, amortization of compensation expense only begins when it is
probable that the awards will vest and be earned.  Presently, the Company
believes that it is less than likely that a Vesting Event will occur.
Therefore, there is no compensation expense for pro forma purposes and pro forma
net income and earnings per share are the same as that recorded on the face of
the income statement.

The Company uses a binomial option pricing model to estimate the fair value of
options at the date of grant.  The weighted average assumptions used to value
options and the weighted average fair value of options granted during 1996 and
1995 were as follows:

                                                                1996      1995
------------------------------------------------------------------------------
Fair value of options granted                                 $17.67    $ 9.33
Exercise price                                                $ 8.59    $11.65
Expected stock price volatility                                 80.7%    102.2%
Expected dividend yield                                          0.0%      0.0%
Risk-free interest rate                                          5.2%      5.9%
Expected life of options                                     2 years   3 years


10.  REDEEMABLE PREFERRED STOCK

At December 31, 1996 and 1995, the Company had 1,500,000 authorized shares of 
$0.01 par value preferred stock, of which 15,000 shares were designated as 
Series A preferred stock, 15,000 shares were designated as Series B preferred 
stock, 15,000 shares were designated as Series C preferred stock, and 
1,455,000 shares remained undesignated.  Series B and C preferred stock are 
junior in relation to the Series A preferred stock.  All preferred stock 
issued at the date of inception was valued at the amount of cash paid or 
assets received for the stock at $1,000 per share.  On July 28, 1995, the 
Company repurchased all 6,892 shares of Series B preferred stock issued and 
outstanding for $7.0 million, including accrued and unpaid dividends thereon. 
 All outstanding shares of preferred stock are senior in preference to the 
Common Stock of United.

Series A preferred stock must be redeemed by the Company on or before July 
31, 2006.  Dividends are cumulative at a rate of 10% per annum, payable 
quarterly. In the event that the Company does not pay dividends in cash, the 
dividend rate increases to 13% per annum and is payable in stock.  During 
each of the years ended December 31, 1996, 1995, and 1994, 649 shares of 
Series A preferred stock were accrued but not issued.  As of December 31, 
1996 and 1995, 3,086 and 2,437 shares, respectively, of Series A preferred 
stock have been accrued as dividends but not issued.

                                       37
<PAGE>

Series C preferred stock is redeemable in four consecutive quarterly
installments commencing on April 30, 2001.  Dividends are cumulative at a rate
of 9% per annum, payable quarterly.  In the event that the Company does not pay
dividends in cash, the dividend rate increases to 10% per annum and is payable
in stock. During the year ended December 31, 1996, noncash dividends were
declared and issued for Series C preferred stock in the amount of 1,095 shares.
During the year ended December 31, 1995, noncash dividends were declared and
issued for both Series B and C preferred stock in the amount of 332 and 763
shares, respectively.  In addition, during 1995 a cash dividend of approximately
$254,000 was paid to Series C preferred stockholders in connection with the
repurchase of Series B preferred stock.  During the year ended December 31,
1994, non-cash dividends were declared and issued for both Series B and C
preferred stock in the amount of 617 and 926 shares, respectively.

All series of preferred stock may be redeemed at the option of the Company at
any time.  All series of preferred stock have a redemption and liquidation value
of $1,000 per share plus the aggregate of accrued and unpaid dividends on such
shares to date.     Required redemption of preferred stock for the five years
following the year ended December 31, 1996 is $14.0 million in 2001 for the
Series C preferred stock.


11.  REDEEMABLE WARRANTS

The Company had 1,227,438 and 1,430,468 warrants ("Lender Warrants") outstanding
as of December 31, 1996 and 1995, respectively, which allow holders thereof to
buy shares of Common Stock at an exercise price of $0.10 per share.  Outstanding
Lender Warrants as of December 31, 1996 and 1995 were valued at $19.50 and
$27.75 per warrant, respectively.  During 1996, 203,030 warrants were
contributed back to the Company and terminated in connection with anti-dilution
agreements.  The exercise period for Lender Warrants expires January 31, 2002.
During 1995, 117,954 warrants were exercised, 284,484 warrants were issued or
accrued resulting from anti-dilution agreements and 47,153 were contributed back
to the Company and terminated in connection with fees paid by the Company
relating to the issuance of the Notes.

The Lender Warrants contain certain put rights which allow the holders thereof
to put the warrants to the Company.  The purchase price payable upon the
exercise of the put rights is the greater of the then fair market value or
equity value of the warrants, as defined, less the applicable exercise price of
the warrants.  Payment of the Lender Warrants can only occur after repayment of
all debt outstanding under the Credit Agreement or with the consent of the
lenders and/or agent under the Credit Agreement.


12.  TRANSACTIONS WITH RELATED PARTIES

The Company has management advisory service agreements with three investor
groups.  These investor groups provide certain advisory services to the Company
in connection with the Acquisition as defined below.

Pursuant to an agreement, Wingate Partners, L.P. ("Wingate Partners") had agreed
to provide certain oversight and monitoring services to the Company in exchange
for an annual fee of up to $725,000, payment (but not accrual) of which is
subject to restrictions under the Credit Agreement related to certain Company
performance criteria.  At the Merger, the Company paid aggregate fees to Wingate
Partners of $2.3 million for services rendered in connection with the
Acquisition. Wingate Partners earned an aggregate of $725,000, $603,000 and
$350,000 with respect to each of the fiscal years ended 1996, 1995 and 1994,
respectively, for such oversight and monitoring services. Under the agreement,
the Company is obligated to reimburse Wingate Partners for its out-of-pocket
expenses and indemnify Wingate Partners and its affiliates from loss in
connection with these services. The agreement expires on January 31, 2002,
provided that the agreement continues in effect on a year-to-year basis
thereafter unless terminated in writing by one of the parties at least 180 days
before the expiration of the primary term or any subsequent yearly term.


                                       38
<PAGE>

Pursuant to an agreement, Cumberland Capital Corporation ("Cumberland") has
agreed to provide certain oversight and monitoring services to the Company in
exchange for (i) an annual fee of up to $137,500, payment (but not accrual) of
which is subject to restrictions under the Credit Agreement related to certain
Company performance criteria and (ii) previously issued shares of Associated
Common Stock that converted in the Merger into 154,126 shares.  Subject to
certain exceptions, the issuance of such shares is subject to rescission if the
agreement is terminated before January 31, 2002.  At the Merger, the Company
paid aggregate fees to Cumberland of $100,000 for services rendered in
connection with the Acquisition.  Pursuant to the agreement, Cumberland earned
an aggregate of $137,500, $129,000 and $75,000 with respect to the fiscal years
ended 1996, 1995 and 1994, respectively, for such oversight and monitoring
services.  The Company is also obligated to reimburse Cumberland for its out-of-
pocket expenses and indemnify Cumberland and its affiliates from loss in
connection with these services.  The agreement expires on January 31, 2002,
provided that the agreement continues in effect on a year-to-year basis
thereafter unless terminated in writing by one of the parties at least 180 days
before the expiration of the primary term or any subsequent yearly term.

Pursuant to an agreement, Good Capital Co., Inc. ("Good Capital") has an
agreement to provide certain oversight and monitoring services to the Company in
exchange for (i) an annual fee of up to $137,500, payment (but not accrual) of
which is subject to restrictions under the Credit Agreement related to certain
Company performance criteria and (ii) previously issued shares of Associated
Common Stock that converted in the Merger into 154,126 shares.  Subject to
certain exceptions, the issuance of such shares is subject to rescission if the
agreement is terminated before January 31, 2002.  At the Merger, the Company
paid aggregate fees to Good Capital of $100,000 for services rendered in
connection with the Acquisition.  Pursuant to the agreement, Good Capital earned
an aggregate of $137,500, $129,000 and $75,000 in each of the fiscal years ended
1996, 1995 and 1994, respectively, for such oversight and monitoring services.
The Company is also obligated to reimburse Good Capital for its out-of-pocket
expenses and indemnify Good Capital and its affiliates from loss in connection
with these services.  The agreement expires on January 31, 2002, provided that
the agreement continues in effect thereafter on a year-to-year basis unless
terminated in writing by one of the parties at least 180 days before the
expiration of the primary term or any subsequent yearly term.


13.  INCOME TAXES

The provision for (benefit from) income taxes consists of the following (dollars
in thousands):

                                                   Year Ended December 31,
                                                ---------------------------
                                                  1996      1995      1994
                                                -------    ------    ------
Currently payable -
  Federal                                       $14,724    $4,172    $3,090
  State                                           3,532     1,119       903
                                                -------    ------    ------
    Total currently payable                      18,256     5,291     3,993

Deferred, net -
  Federal                                         4,614      (142)      (24)
  State                                             685       (21)       24
                                                -------    ------    ------
Total deferred, net                               5,299      (163)      - -
                                                -------    ------    ------
Provision for income taxes                      $23,555    $5,128    $3,993
                                                -------    ------    ------
                                                -------    ------    ------

                                       39
<PAGE>

The Company's effective income tax rates for the years ended December 31, 1996,
1995 and 1994 varied from the statutory Federal income tax rate as set forth in
the following table (dollars in thousands):

<TABLE>
<CAPTION>
                                                                         YEAR ENDED DECEMBER 31,
                                           ----------------------------------------------------------------------------------
                                                   1996                           1995                           1994
                                           ----------------------        ----------------------         ---------------------
                                                            % of                           % of                          % of
                                                          Pre-tax                       Pre-tax                       Pre-tax
                                            Amount         Income         Amount         Income         Amount         Income
                                            ------         ------        -------         ------         ------         ------
<S>                                        <C>            <C>            <C>            <C>             <C>           <C>

Tax provision based on the
  federal statutory rate                   $19,442           35.0%        $3,980           35.0%        $3,535           34.0%
State and local income taxes -
  net of federal income tax
  benefit                                    3,000            5.4            705            6.2            607            5.8
Non-deductible and other                     1,113            2.0            443            3.9           (149)          (1.4)
                                           -------           ----         ------           ----         ------           ----
Provision for income taxes                 $23,555           42.4%        $5,128           45.1%        $3,993           38.4%
                                           -------           ----         ------           ----         ------           ----
                                           -------           ----         ------           ----         ------           ----

</TABLE>

The deferred tax assets and liabilities result from timing differences in the
recognition of certain income and expense items for financial and tax accounting
purposes.  The sources of these differences and the related tax effects were as
follows (dollars in thousands):

<TABLE>
<CAPTION>
                                                                                      DECEMBER 31,
                                                          -------------------------------------------------------------------
                                                                     1996                                    1995
                                                          ---------------------------             ---------------------------
                                                           Assets         Liabilities              Assets         Liabilities
                                                           ------         -----------              ------         -----------
<S>                                                       <C>             <C>                     <C>             <C>

Accrued expenses                                          $17,882            $    - -             $20,351             $   - -
Allowance for doubtful accounts                            11,036                 - -              10,645                 - -
Inventory reserves and adjustments                            - -              13,795                 - -              14,756
Depreciation and amortization                                 - -              43,798                 - -              42,300
Reserve for restructuring charges
  and other                                                 6,915                 - -              13,970                 331
                                                          -------             -------             -------             -------

Total                                                     $35,833             $57,593             $44,966             $57,387
                                                          -------             -------             -------             -------
                                                          -------             -------             -------             -------

</TABLE>

In the Consolidated Balance Sheets, these deferred assets and liabilities are
classified on a net basis as current and non-current based on the classification
of the related asset or liability or the expected reversal date of the temporary
difference.

14.  SUPPLEMENTAL CASH FLOW INFORMATION

In addition to the information provided in the Consolidated Statements of Cash
Flows, the following are supplemental disclosures of cash flow information for
the years ended December 31, 1996, 1995 and 1994 (dollars in thousands):

                                                   1996      1995      1994
                                                   ----      ----      ----
     Cash paid during the year for:
          Interest                              $52,871   $36,120    $6,588
          Income taxes                           17,482     8,171     2,118

                                       40
<PAGE>

The following are supplemental disclosures of noncash investing and financing
activities for the years ended December 31, 1996, 1995 and 1994 (dollars in
thousands):

     -    On May 3, 1995, the Company issued stock valued at $2,406 in exchange
          for services related to the issuance of the Notes.
     -    On March 30, 1995, the Company issued stock valued at $2,162 in
          exchange for services related to financing the Acquisition.
     -    In 1994, the Company issued $9,000 of common stock to retire a $9,000
          deferred obligation related to a transition services agreement.
     -    In 1994, the Company accrued $244 for warrants which had an exercise
          price less than the fair market value of the common stock.
     -    In 1994, the Company accrued $63 for common stock shares to be issued
          at less than fair market value.


15.  FAIR VALUE OF FINANCIAL INSTRUMENTS

The estimated fair value of the Company's financial instruments are as follows
(dollars in thousands):

<TABLE>
<CAPTION>


                                                              December 31, 1996                         December 31, 1995
                                                         ----------------------------            ----------------------------
                                                         Carrying               Fair             Carrying               Fair
                                                          Amount               Value               Amount              Value
                                                         --------             -------            --------             -------
<S>                                                      <C>                  <C>                <C>                  <C>

Cash and cash equivalents                                 $10,619             $10,619             $11,660             $11,660
Current maturities of long-term
    obligations and capital lease                          46,923              46,923              23,886              23,886
Long-term debt and capital lease:
   Notes                                                  150,000             168,000             150,000             163,875
   All other                                              403,079             403,079             376,198             376,198
Interest rate collar                                          - -               1,200                 - -               3,900

</TABLE>

The fair value of the Notes and interest rate collar are based on quoted market
prices and quotes from counterparties, respectively.


                                       41
<PAGE>



                     UNITED STATIONERS INC. AND SUBSIDIARIES
                SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS
                            (IN THOUSANDS OF DOLLARS)

<TABLE>
<CAPTION>

                                                       Balance At      Additions                                      Balance
                                                        Beginning     Charged to                                       At End
                                                        of Period       Expenses       Other (3)    Deductions      of Period
                                                       ----------     ----------       --------     ----------      ---------
<S>                                                    <C>            <C>              <C>          <C>             <C>

Reserve for Doubtful Accounts:

   Year Ended:

   December 31, 1996                                       $7,315         $7,791      $     - -      $8,788 (A)        $6,318
   December 31, 1995 (1)                                    3,496          5,169          4,776       6,126 (A)         7,315
   December 31, 1994 (2)                                    3,544          1,528                      1,576 (A)         3,496


Sales Returns:

   Year Ended:

   December 31, 1996                                       $8,973        $49,183    $       - -     $49,993 (B)        $8,163
   December 31, 1995 (1)                                      540         60,598         12,051      64,216 (B)         8,973
   December 31, 1994 (2)                                      514         42,792                     42,766 (B)           540

</TABLE>

(1)  Reflects the results of Associated only for the three months ended March
     30, 1995 and the Company for the nine months ended December 31, 1995.

(2)  Reflects the results of Associated only.

(3)  Reflects the liability assumed as a result of the Merger.

(A)  Accounts determined to be uncollectible and charged against reserves, net
     of collections on  accounts previously written off.

(B)  Credit memos issued for sales returns.


                                       42
<PAGE>

REPORT OF INDEPENDENT AUDITORS


TO THE STOCKHOLDERS AND BOARD OF
DIRECTORS OF UNITED STATIONERS INC.

We have audited the accompanying consolidated statements of operations, changes
in stockholders' investment and cash flows of United Stationers Inc. and
Subsidiary for the seven months ended March 30, 1995.  Our audit also included
the financial statement schedule as of March 30, 1995 and for the seven months
then ended listed in the index at Item 14(A).  These financial statements and
schedule are the responsibility of the Company's management.  Our responsibility
is to express an opinion on these financial statements and schedule based on our
audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated results of operations and cash flows of
United Stationers Inc. and Subisidiary for the seven months ended March 30, 1995
in conformity with generally accepted accounting principles.  Also, in our
opinion, the related financial statement schedule, when considered in relation
to the basic financial statements taken as a whole, presents fairly in all
material respects the information set forth therein.


                                        /s/ERNST & YOUNG LLP



Chicago, Illinois
June 27, 1995


                                       43
<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS


TO THE STOCKHOLDERS AND BOARD OF
DIRECTORS OF UNITED STATIONERS INC.

We have audited the accompanying consolidated statement of operations, 
changes in stockholders' investment and cash flows of UNITED STATIONERS INC. 
(a Delaware Corporation) AND SUBSIDIARIES for the year ended August 31, 1994. 
These consolidated financial statements are the responsibility of the 
Company's management.  Our responsibility is to express an opinion on these 
consolidated financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the consolidated financial statements are
free of material misstatement.  An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the consolidated financial
statements.  An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation.  We believe that our audit provides a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above 
present fairly, in all material respects, the consolidated results of 
operations and cash flows of United Stationers Inc. and Subsidiaries for the 
year ended August 31, 1994, in conformity with generally accepted accounting 
principles.

Our audit was made for the purpose of forming an opinion on the basic 
financial statements taken as a whole.  Schedule II is the responsibility of 
the Company's management and is presented for purposes of complying with the 
Securities and Exchange Commission's rules and is not part of the basic 
financial statements. This schedule has been subjected to the auditing 
procedures applied in the audit of the basic financial statements for 1994 
and, in our opinion, fairly states in all material respects the financial 
data required to be set forth therein in relation to the basic financial 
statements taken as a whole.

                                        /s/Arthur Andersen LLP




Chicago, Illinois,
October 6, 1994.


                                       44
<PAGE>

                      UNITED STATIONERS INC. AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                  (IN THOUSANDS OF DOLLARS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
                                                                                                                    For the
                                                                                  SEVEN MONTHS ENDED               Year Ended
                                                                            ------------------------------         ----------
                                                                                               (UNAUDITED)
                                                                            MARCH 30,           March 31,          August 31,
                                                                               1995               1994                1994
-----------------------------------------------------------------------------------------------------------------------------
<S>                                                                        <C>                 <C>                 <C>

NET SALES                                                                    $980,575            $871,585          $1,473,024
COST OF SALES                                                                 814,780             717,546           1,220,245
-----------------------------------------------------------------------------------------------------------------------------
Gross profit on sales                                                         165,795             154,039             252,779
-----------------------------------------------------------------------------------------------------------------------------
OPERATING EXPENSE:
Warehousing, marketing and
   administrative expenses                                                    133,098             128,594             216,485
Merger-related costs                                                           27,780                 - -                 - -
-----------------------------------------------------------------------------------------------------------------------------

Total operating expenses                                                      160,878             128,594             216,485
-----------------------------------------------------------------------------------------------------------------------------
Income from operations                                                          4,917              25,445              36,294
-----------------------------------------------------------------------------------------------------------------------------
OTHER INCOME (EXPENSE):
Interest expense                                                               (7,640)             (6,095)            (10,722)
Interest income                                                                   140                 258                 261
Other, net                                                                         41                 117                 225
-----------------------------------------------------------------------------------------------------------------------------

Total other income (expense)                                                   (7,459)             (5,720)            (10,236)
-----------------------------------------------------------------------------------------------------------------------------

Income (Loss) before income taxes                                              (2,542)             19,725              26,058
INCOME TAXES                                                                    4,692               8,185              10,309
-----------------------------------------------------------------------------------------------------------------------------

NET INCOME (LOSS)                                                             $(7,234)            $11,540             $15,749
-----------------------------------------------------------------------------------------------------------------------------
WEIGHTED AVERAGE NUMBER  OF
COMMON SHARES OUTSTANDING                                                  18,593,614          18,585,451          18,587,282
-----------------------------------------------------------------------------------------------------------------------------
NET INCOME (LOSS) PER COMMON  SHARE                                            $(0.39)              $0.62               $0.85
-----------------------------------------------------------------------------------------------------------------------------

</TABLE>


     See notes to consolidated financial statements.


                                       45
<PAGE>

                      UNITED STATIONERS INC. AND SUBSIDIARY
         CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' INVESTMENT
                  (IN THOUSANDS OF DOLLARS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>

                                    Number of                    Capital in                                             Total
                                       Common         Common      Excess of       Retained       Treasury       Stockholders'
                                       Shares          Stock      Par Value       Earnings          Stock          Investment
-----------------------------------------------------------------------------------------------------------------------------
<S>                                <C>                <C>        <C>              <C>            <C>            <C>

BALANCE, AUGUST 31, 1993           18,586,627         $1,859        $91,687       $144,292          $(141)           $237,697
Net Income                                - -            - -            - -         15,749            - -              15,749
Issuance of common shares               5,427            - -             42            - -            - -                  42
Cash dividends - $0.40 per
  share on common stock                   - -            - -            - -         (7,593)           - -              (7,593)
Disposition of treasury stock             - -            - -            - -            - -            115                 115
-----------------------------------------------------------------------------------------------------------------------------
BALANCE, AUGUST 31, 1994           18,592,054         $1,859        $91,729       $152,448          $ (26)           $246,010
Net Loss                                  - -            - -            - -         (7,234)           - -              (7,234)
Issuance of common shares              18,875              2            183            - -            - -                 185
Cash dividends - $0.30 per share
      on common stock                     - -            - -            - -         (5,719)           - -              (5,719)
Acquisition of treasury stock             - -            - -            - -            - -           (117)               (117)
-----------------------------------------------------------------------------------------------------------------------------
BALANCE, MARCH 30, 1995            18,610,929         $1,861        $91,912       $139,495          $(143)           $233,125
-----------------------------------------------------------------------------------------------------------------------------


</TABLE>


     See notes to consolidated financial statements.


                                       46
<PAGE>

                      UNITED STATIONERS INC. AND SUBSIDIARY
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                            (IN THOUSANDS OF DOLLARS)

<TABLE>
<CAPTION>
                                                                                                                    For the
                                                                                  Seven Months Ended               Year Ended
                                                                            ------------------------------         ----------
                                                                                               (Unaudited)
                                                                            March 30,           March 31,          August 31,
FOR THE PERIOD ENDED                                                             1995                1994                1994
-----------------------------------------------------------------------------------------------------------------------------
<S>                                                                          <C>                 <C>                 <C>

CASH FLOWS FROM OPERATING ACTIVITIES
Net  Income                                                                  $ (7,234)           $ 11,540            $ 15,749
Loss on sale of fixed assets                                                      200                 494                 579
Depreciation and amortization                                                  12,595              12,103              21,236
(Decrease)/increase in deferred taxes                                          (3,933)              1,298               2,943
Increase/(decrease) in accounts payable                                        24,429             (64,918)            (28,581)
Increase/(decrease) in accrued liabilities                                     17,260             (14,407)             (7,522)
(Increase)/decrease in accounts receivable                                     (1,107)              8,062                 831
(Increase)/decrease in inventories                                            (80,947)             (7,818)              3,966
(Increase)/decrease in prepaid expenses                                        (7,475)               (752)                914
Increase in other assets                                                       (1,341)             (1,359)             (2,007)
-----------------------------------------------------------------------------------------------------------------------------
Total Adjustments                                                             (40,319)            (67,297)             (7,641)
-----------------------------------------------------------------------------------------------------------------------------
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES                           (47,553)            (55,757)              8,108
Cash Flows from Investing Activities:
Acquisition of property, plant and equipment                                   (7,799)             (4,487)            (10,719)
Proceeds from disposition of property, plant & equipment                           35                 200                 220
-----------------------------------------------------------------------------------------------------------------------------
NET CASH USED IN INVESTING ACTIVITIES                                          (7,764)             (4,287)            (10,499)
-----------------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase/(decrease) in short-term debt                                          5,660                  33              (2,855)
Payments on long-term obligations                                              (4,541)             (1,269)             (1,533)
Additions to long-term obligations                                             67,444              69,348              13,246
Issuance of common shares                                                         185                  25                  42
Payment of dividends                                                           (5,719)             (5,738)             (7,593)
(Acquisition)/disposition of treasury stock                                      (117)                115                 115
-----------------------------------------------------------------------------------------------------------------------------
NET CASH PROVIDED BY FINANCING ACTIVITIES                                      62,912              62,514               1,422
-----------------------------------------------------------------------------------------------------------------------------
Net increase/(decrease) in cash and cash equivalents                            7,595               2,470                (969)
Cash and Cash Equivalents at the beginning of the year                          6,920               7,889               7,889
-----------------------------------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD                           $ 14,515            $ 10,359            $  6,920
-----------------------------------------------------------------------------------------------------------------------------
Supplemental Disclosures of Cash Flow Information:
Cash paid during the year for:
 Interest (net of amount capitalized)                                        $  6,851            $  5,943            $ 10,199
 Income taxes                                                                   9,257               6,054               6,229
-----------------------------------------------------------------------------------------------------------------------------

</TABLE>


     See notes to consolidated financial statements.


                                       47
<PAGE>

UNITED STATIONERS INC. AND SUBSIDIARY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.   SUBSEQUENT EVENT

On March 30, 1995, Associated Holdings, Inc. ("Associated") purchased 92.5% of
the then outstanding shares of the common stock, $0.10 par value ("Common
Stock") of United Stationers Inc. ("United") for approximately $266.6 million in
the aggregate pursuant to a tender offer (the "Tender Offer").  Immediately
thereafter, Associated merged with and into United (the "Merger" and,
collectively with the Tender Offer, the "Acquisition"), and Associated
Stationers, Inc., a wholly-owned subsidiary of Associated ("ASI") merged with
and into United Stationers Supply Co., a wholly-owned subsidiary of United
("USSC"), with United and USSC continuing as the respective surviving
corporations.  United, as the surviving corporation following the Merger, is
referred to herein as the "Company."  As a result of share conversions in the
Merger, immediately after the Merger, (i) the former holders of common stock and
common stock equivalents of Associated owned shares of Common Stock and warrants
or options to purchase shares of Common Stock constituting in the aggregate
approximately 80% of the shares of Common Stock on a fully diluted basis, and
(ii) holders of pre-Merger United common stock owned in the aggregate
approximately 20% of the shares of Common Stock on a fully diluted basis.
Although United was the surviving corporation in the Merger, the transaction was
treated as a reverse acquisition for accounting purposes with Associated as the
acquiring corporation.

Immediately following the Merger, the number of outstanding Shares was 5,998,177
(or 6,973,720 on a fully diluted basis), of which (i) the former holders of
Class A Common Stock, $0.01 par value, and Class B Common Stock, $0.01 par
value, of Associated ("Associated Common Stock") and warrants or options to
purchase Associated Common Stock in the aggregate owned 4,603,373 Shares
constituting approximately 76.8% of the outstanding Shares and outstanding
warrants or options for 975,603 Shares (collectively 80.0% on a fully diluted
basis) and (ii) pre-Merger holders of Shares (other than Associated-owned Shares
and treasury Shares) in the aggregate owned 1,394,744 Shares constituting
approximately 23.2% of the outstanding Shares (or 20.0% on a fully diluted
basis).  As used in this paragraph, the term "Shares" includes shares of
Nonvoting Common Stock, $0.01 par value, of the Company, which are immediately
convertible into Shares for no additional consideration.

To finance the Offer, refinance existing debt of ASI, the Company and USSC,
repurchase stock options and pay related fees and expenses, Associated, ASI,
USSC and the Company entered into (i) new credit facilities ("New Credit
Facilities") with a group of banks and financial institutions providing for term
loan borrowings of $200.0 million and revolving loan borrowings of up to $300.0
million and (ii) a senior subordinated bridge loan facility in the aggregate
principal amount of $130.0 million (the "Subordinated Bridge Facility").  In
addition, simultaneously with the consummation of the Offer, Associated obtained
$12.0 million from the sale of additional shares of Associated Common Stock,
which proceeds were used to finance the purchase of a portion of the Shares
pursuant to the Offer.

On May 3, 1995, USSC completed the issuance of $150.0 million of 12 3/4% Senior
Subordinated Notes (the "Notes") due 2005.  The net proceeds of the Notes (after
discount and fees of approximately $5.5 million) were used to pay certain
expenses, to repay the $130.0 million Subordinated Bridge Facility (together
with $1.6 million in accrued and unpaid interest thereon), to repay a portion of
the Tranche A and Tranche B term loans (totaling approximately $6.5 million) and
provide working capital.  The Company expects to repurchase the Series B
Preferred Stock, together with accrued and unpaid dividends thereon
(approximately $7.0 million).

The New Credit Facilities contain certain financial covenants covering the
Company and its subsidiaries on a consolidated basis, including, without
limitation, covenants relating to tangible net worth, capitalization, fixed
charge coverage, capital expenditures and payment of dividends by the Company.


                                       48
<PAGE>

Effective for 1995, the Company changed its fiscal year from a year end of
August 31 to December 31.  The financial statements included herein represent
the final financial statements of the Company through the date of the
consummation of the Merger.  Future financial statements of the Company will
reflect Associated and its acquisition of the Company, and will be on the basis
of  a December 31 fiscal year end.

As part of the Merger, the Company incurred approximately $27.8 million of
merger-related costs.  The amount consisted of severance payments under
employment contracts ($9.6 million); insurance benefits under employment
contracts($7.4 million); legal, accounting and other professional services fees
($5.2 million); retirement of stock options ($3.0 million); and fees for letters
of credit related to employment contracts and other costs ($2.6 million).

2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of United Stationers
Inc. and its wholly owned subsidiaries ("the Company").  Investments in 20% to
50% owned companies are accounted for by the equity method.  All significant
intercompany accounts and transactions have been eliminated in consolidation.
Certain prior-year amounts have been reclassified to conform with current-year
presentations.

REVENUE RECOGNITION

Sales and provisions for estimated sales returns and allowances are recorded at
the time of shipment.

CASH AND CASH EQUIVALENTS

Investments in low-risk instruments which have an original maturity of three
months or less are considered to be cash equivalents.  Cash equivalents are
stated at cost which approximates market value.  The Company's cash equivalent
policy conforms to the requirements of Financial Accounting Standard No. 95.

INVENTORIES

Inventories constituting approximately 82% of total inventories at March  30,
1995, August 31, 1994 and August 31, 1993 have been valued under the last-in,
first-out (LIFO) method with the remainder of the inventory valued under the
first-in, first-out (FIFO) method.  Inventory valued under the FIFO and LIFO
accounting methods are recorded at the lower of cost or market.

In 1994, liquidations of certain LIFO inventories had the effect of increasing
net earnings by $830,000 or $0.04 per share.

DEPRECIATION AND AMORTIZATION

Depreciation and amortization are determined by using the straight-line method
over the estimated useful lives of the assets.

The estimated useful life assigned to fixtures and equipment is from two to 10
years; the estimated useful life assigned to buildings does not exceed 40 years;
leasehold improvements and assets under capital leases are amortized over the
lesser of their useful lives or the term of the applicable lease.

Goodwill reflecting the excess of cost over the value of net assets of
businesses acquired is being amortized on a straight-line basis over 40 years.


                                       49
<PAGE>

SOFTWARE CAPITALIZATION

The Company capitalizes major internal and external systems development costs
determined to have benefits for future periods.  Amortization expense is
recognized over the periods in which the benefits are realized, generally not to
exceed three years. Amortization expense was $1,795,000 and$2,376,000 in 1995
and 1994, respectively.
FOREIGN CURRENCY TRANSLATION

All assets and liabilities of the Company's foreign operations are translated at
current exchange rates.  Revenues and expenses are translated at average
exchange rates for the year in accordance with Statement of Financial Accounting
Standard No. 52.  The amounts for all years presented were immaterial.

EARNINGS PER SHARE

Earnings per share and the effect on earnings per share of potentially dilutive
stock options are computed by the treasury stock method.  This computation takes
into account the weighted average number of shares outstanding during each year,
outstanding stock options and their exercise prices, and the market price of the
stock throughout the year.  The exercise of outstanding stock options would not
result in a material dilution of earnings per share.

RECLASSIFICATION

The Consolidated Statements of Operations reflect a reclassification of certain
delivery and occupany costs from operating expense to cost of goods sold to
conform the Company's presentation to the presentation  used by others in the
busienss products industry.  The following table sets forth the impact of the
reclassification for the years presented in the Consolidated Statements of
Operations:

<TABLE>
<CAPTION>

                                                             Seven Months Ended      For the Year Ended
                                                          -----------------------    ------------------
                                                          March 30,     March 31,       August 31,
                                                               1995          1994             1994
                                                               ----          ----             ----
<S>                                                    <C>                 <C>         <C>

Gross Margin as a Percent of Net Sales:
   Gross margin prior to reclassification                      21.1%          22.5%          21.9%
   Gross margin as reported herein                             16.9%          17.7%          17.2%
Operating Expenses as a Percent of Net Sales:
   Operating expense ratio prior to
    reclassification                                           20.6% (1)      19.6%          19.4%
   Operating expense ratio as reported herein                  16.4% (1)      14.8%          14.7%

</TABLE>

(1)  Includes $27.8 million nonrecurring Merger-related costs.

3.   PENSION PLANS AND POSTRETIREMENT BENEFITS

The Company has pension plans in effect for substantially all employees.  Non-
contributory plans covering non-union employees provide pension benefits that
are based on years of credited service and a percentage of annual compensation.
Non-contributory plans covering union members generally provide benefits of
stated amounts based on years of service.  The Company funds the plans in
accordance with current tax laws.

The Company also has a non-contributory, non-qualified plan ("Supplemental
Benefit Plan") in effect for certain executives.  The Company has not funded
this plan.


                                       50
<PAGE>

Net periodic pension cost for 1995 and 1994 for pension and supplemental
benefits plans includes the following components (in thousands of dollars):

---------------------------------------------------------------------------
                                                        1995           1994
---------------------------------------------------------------------------
Service cost - benefits earned during the period      $1,084         $1,863
Interest cost on projected benefits obligation           909          1,436
Actual return on assets                                 (780)           263
Net Amortization and Deferral                            494         (1,807)
----------------------------------------------------------------------------
Net periodic pension cost                             $1,707         $1,755
---------------------------------------------------------------------------

The projected benefit obligations for 1995 and 1994 were determined using an
assumed discount rate of 7.5%.  The assumed rate of compensation increase ranged
from 0% to 5.5%, andthe expected long-term rate of return on assets used in
determining net periodic pension cost was 7.5%.

The Company provides an unfunded health care plan to substantially all retired
non-union employees and their dependents.  Eligibility requirements are based on
the individual's age (minimum age of 55), years of service and hire date.  The
benefits are subject to retiree contributions, deductibles, co-payment
provisions and other limitations.

During the first quarter of 1994, the Company adopted Statement of Financial
Accounting Standard No. 106 (SFAS 106), "Employer's Accounting for
Postretirement Benefits Other Than Pensions." SFAS 106 requires companies to
accrue the expected cost of postretirement health care and life insurance
benefits throughout the employee's active service period.  Previously,
postretirement health care costs were recognized as claims were paid.  The
Company elected to amortize the unfunded Accumulated Postretirement Benefit
Obligation (APBO) over 20 years.

The assumed health care average cost trend rate used in measuring the APBO at
March 30, 1995 was 11.0% in 1995 and 3% in 1996 and beyond.  Beginning in 1996,
retirees will pay the difference between actual plan costs and the portion of
cost paid by the Company which is limited to a cost trend rate of 3%.  The
assumed discount rate was 7.75%.  A 1% increase in the care cost trend rate
would increase the APBO as of March 30, 1995 by approximately $339,000 and the
sum of the 1995 annual service cost and interest cost by approximately $35,000.

The cost of postretirement health care benefits for the seven months ended March
30, 1995 and the year ended August 31, 1994 are as follows (in thousands of
dollars):

                                                             1995      1994
---------------------------------------------------------------------------
Service cost                                             $    109   $   246
Interest on accumulated benefits obligation                   106       146
Amortization of transition obligation                          58       100
---------------------------------------------------------------------------
Net postretirement benefit cost                          $    273   $   492
---------------------------------------------------------------------------

The Company has a qualified Profit Sharing Plan in which all salaried employees
and certain hourly paid employees of the Company are eligible to participate
upon completion of six consecutive months of employment.  The Profit Sharing
Plan provides for annual contributions by the Company in an amount determined by
the Board of Directors.  The Plan also permits employees to have contributions
made as 401(k) salary deferrals on their behalf and to make after-tax voluntary
contributions.  The Plan provides that the Company may match employee
contributions as 401(k) salary deferrals.  Company contributions to the Plan for
both profit sharing and matching of employee contributions were approximately
$0.8 million in 1995 and $0.5 million in 1994.


                                       51

<PAGE>

4.   STOCK INCENTIVE PLANS

As a result of the change in control of the Company, the Company paid out
approximately $3.0 million to option holders representing the difference between
the tender offer price of the stock ($15.50 per share) and the option exercise
price.  The amount was included in merger-related costs in 1995.

Under the Directors' Stock Option Plan, the Company granted options for 7,500
shares at a price of $13.75 per share in 1995 and 7,500 shares at a price of
$15.25 per share in 1994.  The Directors' Option Plan provides for the granting
of options covering up to 100,000 shares of the Company's common stock, subject
to anti-dilution adjustments.  Options are exercisable at any time after they
are granted, but for not more than ten years after the option's grant.  As of
the period ended 1995 and 1994, 0 and 41,000 options were outstanding,
respectively.

During fiscal 1995, options for a total of 100,000 shares at $10.50 were granted
to certain officers.  The grant was approved at the 1995 Annual Meeting held in
January.  Under the Company's 1981 Stock Incentive Award Plan, options
outstanding had an exercisable life of either five, six or ten years from the
date of grant.  The Company granted certain officers 15,000 and 16,700 shares of
restricted stock in 1992 and 1991, respectively.  There have been no restricted
stock grants since 1992.  The grants of restricted shares resulted in deferred
compensation expense of $699,000 of which $16,000, $39,000, $132,000 and
$185,000 was recognized in 1995, 1994, 1993 and 1992, respectively.  The
unrecognized portion of deferred compensation was $0, $16,000 and $55,000 as of
March 30, 1995, August 31, 1994 and August 31, 1993, respectively.  Under the
terms of the grant, the stock does not vest to the employee until completion of
three years of employment after the date of grant.  The 1981 Stock Incentive
Award Plan was terminated by the Company's Board of Directors on March 30, 1995.

In 1989, the Board of Directors terminated the 1985 Non-qualified Stock Option
Plan so that no further stock options would be issued under this plan.  The
termination of the plan did not affect the options previously granted and
outstanding.  No option could have been exercised more than ten years after its
grant.

The following table summarizes the transactions of the 1981 and 1985 Option
Plans for 1995 and 1994:

<TABLE>
<CAPTION>

1981 Stock Incentive Award Plan                                Option Price                       Option Price
(excluding restricted stock)                      1995                Range          1994                Range
--------------------------------------------------------------------------------------------------------------
<S>                                          <C>               <C>                <C>            <C>
Options outstanding at
  beginning of the period                     1,135,060        $8.64-$19.39        891,350        $8.64-$19.39
Granted                                         100,000              $10.50        401,050       $10.00-$16.25
Exercised                                       (22,860)        $8.64-$9.29         (3,520)      $ 8.64-$13.75
Canceled(1)                                  (1,212,200)       $8.64-$19.39       (153,820)      $ 8.64-$19.39
                                             -----------                          ---------
Options outstanding at end
  of the period                                     - -                          1,135,060
--------------------------------------------------------------------------------------------------------------
1985 Non-qualified Stock                                       Option Price                       Option Price
 Option Plan                                       1995               Range           1994               Range
--------------------------------------------------------------------------------------------------------------
Options outstanding at
  beginning of the period                       109,500       $14.78-$18.09        109,500       $14.78-$18.09
Granted                                             - -                 - -            - -                 - -
Exercised                                           - -                 - -            - -                 - -
Canceled(1)                                    (109,500)      $14.78-$18.09            - -                 - -
                                               ---------                      ------------
Options outstanding at end
of the period                                       - -                            109,500
--------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------

</TABLE>

1    As a result in change in control of the Company, the Company paid out to
     option holders the difference between the tender offer price of the stock
     ($15.50 per share) and the option exercise price.  The total amount was
     included in merger-related costs in 1995.

                                       52
<PAGE>

5.   LEASES

The Company has entered into several non-cancelable long-term leases on property
and equipment.  Rental expense for all operating leases was approximately
$7,731,000 and $13,549,000 in 1995 and 1994, respectively.


6.  INCOME TAXES

The Company provides for income taxes at statutory rates based on income
reported for financial statement purposes.  A summary of income tax expense is
shown below (in thousands of dollars):

-------------------------------------------------------------------------------
                                                            1995           1994
-------------------------------------------------------------------------------
Taxes currently payable
    Federal                                               $14,122        $7,059
    Other tax credits                                         - -            (5)
    State                                                   2,584         1,591
Prepaid and deferred taxes                                (12,014)        1,664
-------------------------------------------------------------------------------
                                                         $  4,692       $10,309
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------

The table below records the differences between the statutory income tax rate
and the Company's effective income tax rate:

-------------------------------------------------------------------------------
                                                             1995          1994
-------------------------------------------------------------------------------
Statutory Federal income tax                                35.0%         35.0%
State income taxes, net of the Federal
  income tax benefit                                         (4.9)          4.8
Losses from foreign subsidiaries                              - -           1.9
Liquidation of a foreign subsidiary                           - -          (3.9)
Non-deductible goodwill amortization                         (9.0)          1.5
Non-deductible merger-related expenses                     (208.3)          - -
Other, net                                                    2.6            .3
-------------------------------------------------------------------------------
Effective income tax rate                                  (184.6)%       39.6%
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------


                                       53
<PAGE>

                      UNITED STATIONERS INC. AND SUBSIDIARY
                SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS
                            (IN THOUSANDS OF DOLLARS)


                              BALANCE AT    ADDITIONS                    BALANCE
                               BEGINNING   CHARGED TO                     AT END
                               OF PERIOD     EXPENSES    DEDUCTIONS    OF PERIOD
                               ---------     --------    ----------    ---------

Reserve for Doubtful Accounts:
   Period ended:
     March 30, 1995*             $ 4,010     $ 2,510      $1,745 (A)    $ 4,775
     August 31, 1994               3,964       5,750       5,704 (A)      4,010

Sales Returns, Rebates and
   Allowances Period ended:
     March 30, 1995*             $31,293     $43,523     $48,371 (B)    $26,445
     August 31, 1994              25,552      67,970      62,229 (B)     31,293


*  Reflects the transition period of September 1, 1994 through March 30, 1995

(A)  Accounts determined to be uncollectible and charged against reserves, net
     of collections on accounts previously written off.

(B)  Credit memos issued for sales returns, rebates and allowances.


                                       54
<PAGE>

ITEM 9.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
          FINANCIAL DISCLOSURE

The Registrant had no disagreements on accounting and financial disclosure of
the type referred to in Item 304 of Regulation S-K.


                                    PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS

Set forth below is certain information with respect to those individuals who are
currently serving as members of the Board of Directors or as executive officers
of the Company on February 1, 1997:

Name                     Age                                Position
--------------------------------------------------------------------------------
Frederick B Hegi, Jr.. . . 53      Director, Chairman of the Board, President
                                    and Chief Executive Officer
Michael D. Rowsey. . . . . 44      Director and Executive Vice President
Daniel H. Bushell. . . . . 45      Executive Vice President, Chief Financial
                                    Officer and Assistant Secretary
Steven R. Schwarz. . . . . 43      Executive Vice President
Robert H. Cornell. . . . . 57      Vice President, Human Resources
Otis H. Halleen. . . . . . 62      Vice President, Secretary and General Counsel
James A. Pribel. . . . . . 43      Treasurer
Albert Shaw. . . . . . . . 47      Vice President, Operations
Ergin Uskup. . . . . . . . 59      Vice President, Management Information
                                    Systems and Chief Information Officer
Gary G. Miller . . . . . . 46      Director and Assistant Secretary
Thomas W. Sturgess . . . . 46      Director
James T. Callier, Jr.. . . 61      Director
Daniel J. Good . . . . . . 56      Director
Jeffrey K. Hewson. . . . . 53      Director
James A. Johnson . . . . . 42      Director
Joel D. Spungin. . . . . . 59      Director


Set forth below is a description of the backgrounds of the directors and
executive officers of the Company.  There is no family relationship between any
directors or executive officers of the Company. Officers of the Company are
elected by the Board of Directors and hold office until their respective
successors are duly elected and qualified.

FREDERICK B. HEGI, JR. assumed the position of Chairman of the Board, 
President and Chief Executive Officer on an interim basis on November 18, 
1996 as a result of the resignation of Thomas W. Sturgess.  Mr. Hegi was 
elected to the Board of Directors upon consummation of the Merger. Prior to 
the Merger, he had been a director of Associated since 1992. Mr. Hegi is a 
general partner of various Wingate entities, including the indirect general 
partner of each of Wingate Partners and Wingate II. Since May 1982, Mr. Hegi 
has served as President of Valley View Capital Corporation, a private 
investment firm. Mr. Hegi also serves as Chairman of the Executive Committee 
of the Board of LoomisFargo & Co., a provider of armored car and related 
services ("Loomis"). Mr. Hegi also serves as Chairman of ITCO Holding 
Company, Inc., the parent corporation of ITCO Tire Company, a tire 
distributor, Tahoka First Bancorp, Inc., a bank holding company, and Cedar 
Creek Bancshares, Inc., a bank holding company, Lone Star Technologies, Inc., 
a diversified company engaged in the manufacturing of steel pipe, Cattle 
Resources, Inc., a manufacturer of animal feeds and operator of commercial 
cattle feedlots.

                                       55
<PAGE>

MICHAEL D. ROWSEY was elected to the Board of Directors upon consummation of the
Merger and became Executive Vice President of the Company upon consummation of
the Merger with primary responsibility for field operations. Prior to the
Merger, Mr. Rowsey had been a director of Associated since 1992 and President
and Chief Operating Officer of Associated since January 1992. From 1979  to
January 1992, Mr. Rowsey served in various capacities with Boise Cascade Office
Products Corp., most recently as the North Regional Manager.

DANIEL H. BUSHELL became Executive Vice President and Chief Financial Officer of
the Company upon consummation of the Merger. Mr. Bushell has served as Assistant
Secretary of the Company since January 1996, and served as Secretary of the
Company from June 1995 through such date. Mr. Bushell also served as Assistant
Secretary of the Company from the consummation of the Merger until June 1995.
Prior thereto, Mr. Bushell had been Chief Administrative and Chief Financial
Officer of Associated and ASI since January 1992. From 1978 to January 1992, Mr.
Bushell served in various capacities with ACE Hardware Corporation, most
recently as Vice President of Finance.

STEVEN R. SCHWARZ became Executive Vice President of the Company upon
consummation of the Merger with primary responsibility for marketing and
merchandising. Prior thereto, he was Senior Vice President, Marketing of United
since June 1992 and had previously been Senior Vice President, General Manager,
Micro United since 1990 and Vice President, General Manager, Micro United since
September 1989. He had held a staff position in the same capacity since February
1987.

ROBERT H. CORNELL became Vice President, Human Resources of the Company upon
consummation of the Merger. Prior thereto, he was Vice President, Human
Resources of United since February 1988, and since 1987 had been Vice President,
Human Resources for USG Interiors Inc., a subsidiary of USG Corporation.

OTIS H. HALLEEN became Vice President, Secretary and General Counsel of the
Company as of January 30, 1996. Since November 1, 1995 he has served as Vice
President, Secretary and General Counsel at USSC. From 1986 through March 1995
he had been Vice President, Secretary and General Counsel of United.

JAMES A. PRIBEL became Treasurer of the Company upon consummation of the Merger.
Prior thereto, he was Treasurer of United since 1992. Prior thereto he had been
Assistant Treasurer of USSC since 1984 and had served in various positions since
joining USSC in 1978.

ALBERT SHAW became Vice President, Operations of the Company shortly after
consummation of the Merger. Prior thereto, he was Vice President, Midwest Region
of USSC since March 1994. He had been a Vice President of USSC since 1992 and
prior to that had served in various management positions since joining USSC in
1974.

ERGIN USKUP became Vice President, Management Information Systems and Chief
Information Officer of the Company upon consummation of the Merger. Prior
thereto, he was Vice President, Management Information Systems and Chief
Information Officer of United since February 1994, and since 1987 had been Vice
President, Corporate Information Services for Baxter International Inc., a
global manufacturer and distributor of health care products.

GARY G. MILLER was elected to the Board of Directors upon consummation of the
Merger and became Assistant Secretary of the Company on June 27, 1995. Mr.
Miller served as Vice President and Secretary of the Company from consummation
of the Merger until June 27, 1995. Prior thereto, Mr. Miller had been a director
of Associated since 1992 and Vice President and Secretary of Associated since
January 1992. Mr. Miller also currently serves as President of Cumberland
Capital, a private investment firm which is located in Fort Worth, Texas. In
addition, from 1977 to December 1993, Mr. Miller served as Executive Vice
President, Chief Financial Officer and a director of AFG Industries, Inc., and
its parent company, Clarity Holdings Corp. He is Chairman of the Board of both
CFData Corp., a nationwide provider of check collection and check verification
services, and Fore Star Golf, Inc., which was formed in 1993 to own and operate
golf course facilities.


                                       56
<PAGE>

THOMAS W. STURGESS became President and Chief Executive Officer of the Company
on May 31, 1995 and Chairman of the Board of the Company upon consummation of
the Merger.  On November 18, 1996, Mr. Sturgess resigned as Chairman of the
Board, President and Chief Executive Officer of the Company. Prior to the
Merger, Mr. Sturgess served as Chairman of the Board and Chief Executive Officer
of Associated since January 1992 and had been Chairman of the Board and Chief
Executive Officer of ASI since December 1994. Since 1987, Mr. Sturgess has
served as a general partner of various Wingate entities, including the indirect
general partner of each of Wingate Partners and a special limited partner of
Wingate II. Mr. Sturgess has not actively participated in the management of
Wingate Partners or the Wingate entities since December 31, 1995.

JAMES T. CALLIER, JR. was elected to the Board of Directors upon consummation 
of the Merger. Prior to the Merger, he had been a director of Associated 
since 1992. Mr. Callier is a general partner of Wingate Partners, and has 
served as President of Callier Consulting, Inc., an operating management 
firm, since 1985. Mr. Callier currently serves as Chairman of the Board of 
Century Products, a manufacturer of baby seats and other juvenile products 
("Century Products"), as a director of Redman Building Products, Inc., a 
manufacturer of aluminum and vinyl windows, as a Director of Loomis, and as 
an advisory director of Wingate II.

DANIEL J. GOOD was elected to the Board of Directors upon consummation of the
Merger. Prior to the Merger, he had been a director of Associated since 1992.
Mr. Good is Chairman of Good Capital Co., Inc., an investment firm in Lake
Forest, Illinois.  Until June 1995, Mr. Good was Vice Chairman of Golden Cat
Corp., the largest producer of cat litter in the United States, and prior
thereto he was Managing Director of Merchant Banking for Shearson Lehman Bros.,
President of A.G. Becker Paribas, Inc.

JEFFREY K. HEWSON was elected to the Board of Directors in 1991. Mr. Hewson
served as President and Chief Executive Officer of the Company from consummation
of the Merger until May 31, 1995. Prior thereto, he was President and Chief
Operating Officer of United since April 1991. He had been Executive Vice
President of United since March 1990. Prior to that, he had been President of
ACCO International's U.S. Division since 1989 and President of its Canadian
Division since 1987. ACCO International is a manufacturer of traditional office
products and a subsidiary of American Brands, Inc., which is a global consumer
products holding company.   Mr. Hewson currently serves as President and Chief
Executive Officer of Beckley Cardy Group, a distributor of supplies, furniture
and equipment to the educational market.

JAMES A. JOHNSON was elected to the Board of Directors upon consummation of 
the Merger. Prior to the Merger, he had been a director of Associated since 
1992. Mr. Johnson is a general partner of various Wingate entities, including 
the indirect general partner of Wingate II. From 1980 until he joined Wingate 
Partners in 1990, Mr. Johnson served as a Principal of Booz-Allen & Hamilton, 
an international management consulting firm. Mr. Johnson currently serves as 
a director of Century Products, and Chairman of the Board of Directors of 
Redman Building Products.

JOEL D. SPUNGIN has served as a member of the Board of Directors since 1972 and
prior to the consummation of the Merger was Chairman of the Board of Directors
and Chief Executive Officer of United since August 1988. From October 1989 until
April 1991, he was also President of United. Prior to that, since March 1987,
Mr. Spungin was Vice Chairman of the Board and Chief Executive Officer of
United. Previously, since August 1981, Mr. Spungin was President and Chief
Operating Officer of United. He also serves as a general partner of DMS
Enterprises, L.P., a management advisory and investment partnership, and as a
director of AAR Corp., an aviation and aerospace company, and Home Products
International, Inc., a manufacturer of home improvement products.

Messrs. Sturgess, Rowsey, Miller, Callier, Good, Hegi and Johnson were elected
to the Board of Directors pursuant to a voting trust.

The Charter provides that the Board of Directors shall be divided into three
classes, each class as nearly equal in number as possible, and each term
consisting of three years. The directors currently in each class are as follows:
Class I (having terms expiring in 1999)--Messrs. Good, Johnson and Hewson; Class
II (having terms expiring in 1997)--Messrs. Hegi, Rowsey, Miller and Sturgess
(who will not be standing for re-election) and Class III (having terms expiring
in 1998)--Messrs. Callier and Spungin.


                                       57
<PAGE>

ITEM 11.  EXECUTIVE COMPENSATION

Incorporated herein by reference, pursuant to General Instruction G(3) to Form
10-K, from the Registrant's definitive Proxy Statement for the Annual Meeting of
Stockholders scheduled to be held on May 14, 1997, to be filed within 120 days
after the end of the Registrant's fiscal year.


ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Incorporated herein by reference, pursuant to General Instruction G(3) to Form
10-K, from the Registrant's definitive Proxy Statement for the Annual Meeting of
Stockholders scheduled to be held on May 14, 1997, to be filed within 120 days
after the end of the Registrant's fiscal year.


ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Incorporated herein by reference, pursuant to General Instruction G(3) to Form
10-K, from the Registrant's definitive Proxy Statement for the Annual Meeting of
Stockholders scheduled to be held on May 14, 1997, to be filed within 120 days
after the end of the Registrant's fiscal year.


ITEM 14.  EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND REPORTS ON FORM 8-K

(A)  The following financial statements, schedules and exhibits are filed as
part of this report:
                                                                        PAGE NO.
                                                                        --------
     (1)  Financial Statements of the Company
          Report of Independent Auditors                                     19
          Report of Independent Public Accountants                           20
          Consolidated Statements of Income for the years ended
             December 31, 1996, 1995 and 1994                                21
          Consolidated Balance Sheets as of December 31, 1996 and 1995    22-23
          Consolidated Statements of Changes in Stockholders' Equity
             for the years ended December 31, 1996, 1995 and 1994         24-25
          Consolidated Statements of Cash Flows for the years ended
             December 31, 1996, 1995 and 1994                                26
          Notes to Consolidated Financial Statements                      27-41

          Financial Statement Schedule
          II.  Valuation and Qualifying Accounts. . . . . . . . . . .        42

               All other financial statements and schedules not listed have been
               omitted because they are not applicable, not required or because
               the required information is included in the consolidated
               financial statements or notes thereto.

(2)       Financial Statements of United
          Report of Independent Auditors . . . . . . . . . . . . . .         43
          Report of Independent Public Accountants . . . . . . . . .         44
          Consolidated Statements of Operations for the seven
           months ended March 30, 1995 and March 31, 1994
           (unaudited), and for the year ended August 31, 1994 . . .         45
          Consolidated Statements of Changes in Stockholders'
           Investment for the seven months ended March 30, 1995,
           and for the year ended August 31, 1994. . . . . . . . . .         46
          Consolidated Statements of Cash Flows for the for the
           seven months ended March 30, 1995 and March 31, 1994
           (unaudited), and for the year ended August 31, 1994 . . .         47


                                       58
<PAGE>

          Notes to Consolidated Financial Statements . . . . . . . .      48-53

          Financial Statement Schedule . . . . . . . . . . . . . . .
          II.  Valuation and Qualifying Accounts . . . . . . . . . .         54
               All other financial statements and schedules not
               listed have been omitted because they are not
               applicable, not required or because the required
               information is included in the consolidated financial
               statements or notes thereto.
    (3)   Exhibits (numbered in accordance with Item 601 of Regulation S-K)

EXHIBIT
 NUMBER                  DESCRIPTION
 ------                   -----------
   4.1         Charter (Exhibit 3(a) to the Company's Annual Report on Form 10-K
               dated November 19, 1987)(3).
   4.2         Certificate of Ownership and Merger merging Associated into
               United(2).
   4.3         Restated Bylaws(1).
   9.1         Voting Trust Agreement, dated as of January 31, 1992, among the
               Company, the stockholders party thereto and Messrs. Sturgess,
               Hegi, Miller, Good and Johnson, as voting trustees(1).
   9.2         First Amendment to Voting Trust Agreement, dated as of March 30,
               1995, among the Company, the stockholders party thereto and
               Messrs. Sturgess, Hegi, Miller, Good and Johnson, as voting
               trustees(1).
  10.1         Credit Agreement, dated as of March 30, 1995, among USSC, the
               Company, certain Lenders named therein and Chase Bank, as Agent
               and Lender (Exhibit 4.A.1 to the Company's Quarterly Report on
               Form 10-Q for the quarter ended March 31, 1995)(3).
  10.2         Waiver and Amendment No. 1, dated as of April 13, 1995, among
               USSC, the Company, each of the lenders party thereto and Chase
               Bank(1).
  10.3         Waiver and Amendment No. 2, dated as of December 21, 1995, among
               the Company, United, each of the lenders party thereto and Chase
               Bank(4).
  10.4         Assumption Agreement, dated as of March 30, 1995, among USSC, the
               Company and Chase Bank, as agent (included in Exhibit 10.1,
               Exhibit F).
  10.5         Form of Revolving Credit Note, issuable under the Credit
               Agreement (included in Exhibit 10.1, Exhibit A-I).
  10.6         Form of Tranche A Term Loan Note, issuable under the Credit
               Agreement (included in Exhibit 10.1, Exhibit A-2).
  10.7         Form of Tranche B Term Loan Note, issuable under the Credit
               Agreement (included in Exhibit 10.1, Exhibit A-3).
  10.8         Security Agreement, dated as of March 30, 1995, between USSC and
               Chase Bank, as agent (included in Exhibit 10.1, Exhibit C).
  10.9         Form of Indenture of Mortgage, Assignment of Rents, Security
               Agreement and Fixture Filing, dated as of March 30, 1995, by USSC
               in favor of Chase Bank (included in Exhibit 10.1, Exhibit E).
 10.10         Registration Rights Agreement, dated as of April 26, 1995, among
               the Company, USSC and the Initial Purchaser(1).
 10.11         Purchase Agreement, dated April 26, 1995, among the Company,
               USSC, and the Initial Purchaser(1).
 10.12         Registration Rights Agreement, dated as of January 31, 1992,
               between the Company and CMIHI (included in Exhibit 10.15, Annex
               2).
 10.13         Amendment No. 1 to Registration Rights Agreement, dated as of
               March 30, 1995, among the Company, CMIHI and certain other
               holders of Lender Warrants(1).
 10.14         Amended and Restated Registration Rights Agreement, dated as of
               March 30, 1995, among the Company, Wingate Partners, Cumberland,
               Good Capital Co., Inc. and certain other Company stockholders(1).
 10.15         Warrant Agreement, dated as of January 31, 1992, among the
               Company, USSC and CMIHI(1).


                                       59
<PAGE>

 10.16         Amendment No. 1 to Warrant Agreement, dated as of October 27,
               1992, among the Company, USSC, CMIHI and the other parties
               thereto(1).
 10.17         Letter Agreement dated as of February 10, 1995, amending certain
               provisions of the Warrant Agreement, among the Company, USSC,
               CMIHI and the other parties thereto(4).
 10.18         Amendment No. 2 to Warrant Agreement, dated as of March 30, 1995,
               among the Company, USSC, CMIHI and the other parties thereto(1).
 10.19         Amendment No. 3 to Warrant Agreement, dated as of July 28, 1995,
               among the Company, USSC, CMIHI and the other parties thereto(4).
 10.20         Exhibit intentionally omitted.
 10.21         Warrant Agreement, dated as of January 31, 1992, between the
               Company and Boise Cascade Corporation(1).
 10.22         Amendment No. 1 to Warrant Agreement, dated as of March 30, 1995,
               between the Company and Boise Cascade Corporation(1).
 10.23         Indenture, dated as of May 3, 1995, among USSC, the Company and
               The Bank of New York(1).
 10.24         First Supplemental Indenture, dated as of July 28, 1995, among
               USSC, the Company, and the Bank of New York(1).
 10.25         Investment Banking Fee and Management Agreements, dated as of
               January 31, 1992, among the Company, USSC and each of Wingate
               Partners, Cumberland and Good Capital Co., Inc.(1).
 10.26         Amendment No. 1 to Investment Banking Fee and Management
               Agreements, dated as of March 30, 1995, among USSC, the Company
               and each of Wingate Partners, Cumberland and Good Capital Co.,
               Inc.(1).
 10.27         1992 Management Stock Option Plan, dated as of January 31,
               1992(1).
 10.28         Amendment No. 1 to 1992 Management Stock Option Plan, dated as of
               March 30, 1995(1).
 10.29         Amendment No. 2 to 1992 Management Stock Option Plan, dated as of
               September 27, 1995(4).
 10.30         Letter agreements, dated January 31, 1992, between the Company
               (as successor-in-interest to Associated) and each of Michael D.
               Rowsey, Robert W. Eberspacher, Lawrence E. Miller, Daniel J.
               Schleppe, Duane J. Ratay and Daniel H. Bushell regarding grants
               of stock options(1).
 10.31         Amendment to Stock Option Grants, dated as of March 30, 1995,
               between the Company and each of Michael D. Rowsey, Robert W.
               Eberspacher, Lawrence E. Miller, Daniel J. Schleppe, Duane J.
               Ratay and Daniel H. Bushell(1).
 10.32         Forms of Stock Option Agreements, dated October 2, 1995, granting
               options to certain management employees, subject to stockholder
               approval of Amendment No. 2 to Stock Option Plan(4).
 10.33         Forms of Amendments to Stock Option Grants, dated September 29,
               1995, between the Company and each of Michael D. Rowsey, Robert
               W. Eberspacher, Lawrence E. Miller, Daniel J. Schleppe and Daniel
               H. Bushell(4).
 10.34         Stock Option Agreements, dated as of January 1, 1996, between the
               Company and Thomas W. Sturgess, granting options subject to
               stockholder approval of Amendment No. 2 to Stock Option Plan(4).
 10.35         Executive Stock Purchase Agreements, dated as of January 31,
               1992, among the Company, Wingate Partners, ASI Partners, L.P. and
               each of Michael D. Rowsey, Robert W. Eberspacher, Lawrence E.
               Miller and Daniel J. Schleppe(1).
 10.36         First Amendments to Executive Stock Purchase Agreements, dated as
               of March 30, 1995, among the Company, Wingate Partners, ASI
               Partners, L.P. and each of Michael D. Rowsey, Robert W.
               Eberspacher, Lawrence E. Miller and Daniel J. Schleppe(1).
 10.37         Management Incentive Plan for period 4/1/95 through 12/31.95(4).
 10.38         Management Incentive Plan for 1996(4).
 10.39         Management Incentive Plan for 1997 *


                                       60
<PAGE>

 10.40         1997 Special Bonus Plan *
 10.41         Intentionally Omitted
 10.42         Intentionally Omitted
 10.43         Intentionally Omitted
 10.44         Intentionally Omitted
 10.45         Profit Sharing PluSavings Plan (Exhibit 10(a)(i)(F)(2)(f) to the
               Company's Report on Form 10-K dated November 20, 1989(3).
 10.45.1       United Stationers 401(k) Savings Plan, restated as of March 1,
               1996*
 10.46         United Stationers Supply Co. Pension Plan as amended (See the
               Company's Reports on Form 10-K for the fiscal years ended August
               31, 1985, 1986, 1987 and 1989(3).
 10.47         Amendment to Pension Plan adopted February 10, 1995(2).
 10.48         One Time Merger Integration Bonus Plan(4).
 10.49         Employment Agreements, dated as of January 31, 1992, among the
               Company, USSC and each of Michael D. Rowsey, Robert W.
               Eberspacher, Lawrence E. Miller, Daniel J. Shleppe, Duane J.
               Ratay and Daniel H. Bushell(1).
 10.50         Amended and Restated Employment and Consulting Agreement dated
               April 15, 1993 among the Company, USSC and Joel D. Spungin
               (Exhibit 10(b) to the Company's Report on Form 10-K dated
               November 22, 1993(3).
 10.51         Amendment dated February 13, 1995 to the Amended and Restated
               Employment and Consulting Agreement among the Company, USSC and
               Joel D. Spungin(2).
 10.52         Intentionally Omitted
 10.53         Intentionally Omitted
 10.54         Intentionally Omitted
 10.55         Intentionally Omitted
 10.56         Intentionally Omitted
 10.57         Intentionally Omitted
 10.58         Employment and Consulting Agreement dated March 1, 1990 between
               the Company, USSC and Jeffrey K. Hewson (Exhibit 10(1) to the
               Company's Report on Form 10-K dated November 20, 1990)(3).
 10.59         Amendment dated April 10, 1991 of Employment and Consulting
               Agreement between the Company, USSC and Jeffrey K. Hewson
               (Exhibit 10(1)(I) to the Company's Report on Form 10-K dated
               November 25, 1991)(3).
 10.60         Amendment dated September 1, 1994 of Hewson Employment and
               Consulting Agreement (Exhibit 10(e)(ii) to the Company's Report
               on Form 10-K dated November 23, 1994)(3).
 10.61         Amendment to Employment and Consulting Agreement dated February
               13, 1995 between the Company, USSC and Jeffrey K. Hewson(2).
 10.62         Amendment dated May 25, 1995 to Employment and Consulting
               Agreement between the Company, USSC and Jeffrey K. Hewson(4).
 10.63         Severance Agreement between the Company, USSC and James A. Pribel
               dated February 13, 1995(2).
 10.64         Letter Agreement dated February 13, 1995 between the Company and
               Ergin Uskup(2).
 10.65         Amendment dated August 30, 1995 to Employment and Consulting
               Agreement between the Company, USSC and Steven R. Schwarz(4).
 10.66         Amendment dated August 30, 1995 to Employment and Consulting
               Agreement between the Company, USSC and Ted S. Rzeszuto(4).
 10.67         Employment Agreements dated October 1, 1995 between USSC and each
               of Daniel H. Bushell, Michael D. Rowsey, Steven R. Schwarz,
               Robert H. Cornell, Ted S. Rzeszuto, and Al Shaw(4).
 10.68         Employment Agreement dated November 1, 1995 between USSC and Otis
               H. Halleen(4).
 10.69         Employment Agreement dated as of January 1, 1996 between the
               Company, USSC and Thomas W. Sturgess(4).


                                       61
<PAGE>

 10.70         Deferred Compensation Plan.  (Exhibit 10(f) to the Company's
               Annual Report on Form 10-K dated October 6, 1994)(3).
 10.71         Consulting Agreement dated October 1,1995 between the Company and
               Jeffrey K. Hewson(4).
 10.72         Letter Agreement dated November 29, 1995 granting shares of
               restricted stock to Joel D. Spungin(4).
 10.73         Option Agreement dated November 29, 1995 between the Company and
               Jeffrey K. Hewson(4).
 10.74         Lease Agreement dated as of March 4, 1988 between Crow-Alameda
               Limited Partnership and Stationers Distributing Company, Inc., as
               amended(1).
 10.75         Industrial Real Estate Lease, dated as of May 17, 1993, among
               Majestic Realty Co. and Patrician Associates, Inc., as landlord,
               and United Stationers Supply Co., as tenant(1).
 10.76         Standard Industrial Lease, dated as of March 15, 1991, between
               Shelley B. and Barbara Detrik and Lynn Edwards Corp.(1).
 10.77         Lease Agreement, dated as of January 12, 1993, as amended, among
               Stationers Antelope Joint Venture, AVP Trust, Adon V. Panattoni
               and Yolanda M. Panattoni, as landlord, and United Stationers
               Supply Co., as tenant(1).
 10.78         Lease dated as of February 1, 1993, between CMD Florida Four
               Limited Partnership and  United Stationers Supply Co., as
               amended(1).
 10.79         Standard Industrial Lease, dated March 2, 1992, between Carol
               Point Builders I and Associated Stationers, Inc.(1).
 10.79.1       First Amendment to Industrial Lease dated January 23, 1997
               between ERI-CA, Inc. as successor to Carol Poaint Builders I and
               USSC as successor to Associated Stationers, Inc.*
 10.80         Lease, dated March 22, 1973, between National Boulevard Bank of
               Chicago, a trustee under Trust Agreement dated March 15, 1973 and
               known as Trust No. 4722, and United Supply Co., as amended(1).
 10.81         Lease Agreement, dated July 20, 1993, between OTR, acting as the
               duly authorized nominee of the Board of the State Teachers
               Retirement System of Ohio, and United Stationers Supply Co., as
               amended(1).
 10.82         Lease Agreement, dated as of December 20, 1988, between Corporate
               Property Associates 8, L.P., and Stationers Distributing Company,
               Inc., as amended(1).
 10.83         Industrial Lease, dated as of February 22, 1988, between
               Northtown Devco and Stationers Distributing Company, as
               amended(1).
 10.84         Lease, dated as of April 17, 1989, between Isaac Heller and
               United Stationers Supply Co., as amended(1).
 10.85         Lease Agreement, dated as of May 10, 1984, between Westbelt
               Business Park Joint Venture and Boise Cascade Corporation, as
               amended(1).
 10.86         Lease, dated as of January 19, 1981, between Propco, Inc. and
               Crown Zellerbach Corporation, as amended(1).
 10.87         Lease Agreement, dated as of August 17, 1981, between Gulf United
               Corporation and Crown Zellerbach Corporation, as amended(1).
 10.88         Lease Agreement, dated as of March 31, 1978, among Gillich O.
               Traughber and J. T. Cruin, Joint Venturers, and Boise Cascade
               Corporation, as amended(1).
 10.89         Lease Agreement, dated November 7, 1988, between Dalware II
               Associates and Stationers Distributing Company, Inc., as
               amended(1).
 10.90         Lease Agreement, dated November 7, 1988, between Central East
               Dallas Development Limited Partnership and Stationers
               Distributing Company, Inc., as amended(1).
 10.91         Lease Agreement, dated as of March 17, 1989, between Special
               Asset Management Company of Texas, Inc., and Stationers
               Distributing Company, Inc., as amended(1).
 10.92         Sublease, dated January 9, 1992, between Shadrall Associates and
               Stationers Distributing Company, Inc.(1).
 10.93         Industrial Lease, dated as of June 12, 1989, between Stationers
               Distributing Company, Inc. and Dual Asset Fund V, as amended(1).


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<PAGE>

 10.94         Lease Agreement, dated as of July, 1994, between Bettilyon
               Mortgage Loan Company and United Stationers Supply Co.(1).
 10.95         Agreement of Lease, dated as of January 5, 1994, between the
               Estate of James Campbell, deceased, and United Stationers Supply
               Co.(1).
 10.96         Lease Agreement dated January 5, 1996 between Robinson
               Properties, L.P. and USSC(4).
 10.97         Real Estate Agreement dated January 9, 1996 between USSC as
               seller and Seid Street, Ltd. as purchaser (4).
 10.98         Real Estate Agreement dated October 19, 1995 between USSC as
               seller and Boise Cascade Office Products Corporation as
               purchaser(4).
 10.99         Agreement for Data Processing Services, dated January 31, 1992,
               between USSC (as successor-in-interest to ASI) and Affiliated
               Computer Services, Inc.(1).
10.99.1        Stock Purchase Agreement between United Stationers Supply Co.
               ("Purchaser") and Lagasse Bros., Inc. ("Company") and Kevin C.
               Lagasse, Cynthia Lagasse, David C. Lagasse, Linette Lagasse
               Abadie, Clinton G. Lagasse, Raymond J. Lagasse and Rickey Lagasse
               being all of the shareholders of the Company (the
               "Shareholders")(Exhibit 99.1 to Registrant's Report on Form 8-K
               filed November 5, 1996)(3)
10.99.2        Amended and Restated Credit Agreement dated October 31, 1996
               (amending and restating the Credit Agreement dated as of March
               30, 1995)(Exhibit 99.2 to Registrant's Report on Form 8-K filed
               November 5, 1996)(3)
10.100         Amended and Restated First Amendment to Agreement for Data
               Processing Services, dated as of August 29, 1995, between USSC
               and Affiliated Computer Services, Inc.(1).
10.101         Intentionally omitted
10.102         Intentionally omitted
10.103         US Employee Benefits Trust Agreement dated March 21, 1995 between
               the Company and American National Bank and Trust Company of
               Chicago as Trustee(2).
10.104         USI Bonus Benefits Trust Agreement dated March 21, 1995 between
               the Company and American National Bank and Trust Company of
               Chicago as Trustee(2).
10.105         Certificate of Insurance covering directors' and officers'
               liability insurance effective November 1, 1994 through
               November 1, 1995 (Exhibit 10.57  to the Company's Report on Form
               10-K dated June 27, 1995)(3).
10.106         Certificate of Insurance covering directors' and officers'
               liability insurance effective March 30, 1995 through March 30,
               1996 (Exhibit 10.81 to the Company's Form S-3 (No. 33-62739), as
               amended)(3).
10.107         Amendment to Medical Plan Document for the Company(2).
10.108         The Company Severance Plan, adopted February 10, 1995(2).
10.109         Securities Purchase Agreement, dated as of July 28, 1995, among
               the Company, Boise Cascade, Wingate Partners, Wingate II, Wingate
               Affiliates, Wingate Affiliates II, ASI Partners III, L.P., the
               Julie Good Mora Grantor Trust and the Laura Good Stathos Grantor
               Trust(2).
10.110         Amendment dated February 23, 1996 to Option Agreements between
               the Company and Thomas W. Sturgess (Exhibit 10.110 to the
               Company's report on Form 10-K dated March 28, 1996).
10.111         Amendment No. 3 to United Stationers Inc. Management Equity Plan,
               dated as of September 27, 1995 (Exhibit 10.111 to the Company's
               report on Form 10-K dated March 28, 1996).
10.112         Amendment No. 2 dated March 5, 1996 to Stock Option Agreements
               between the Company and Thomas W. Sturgess (Exhibit 10.112 to the
               Company's report on Form 10-K dated March 28, 1996).
10.113         Amendment to Employment Agreement dated March 5, 1996 between the
               Company, USSC and Thomas W. Sturgess (Exhibit 10.113 to the
               Company's report on Form 10-K dated March 28, 1996).


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<PAGE>

 10.114        Agreement dated November 18, 1996 between Thomas W. Sturgess, the
               Company and USSC.*
 10.115        Lease Agreement commencing March 1, 1997 between Amber Jack
               Limited Partnership and USSC.*
 10.116        Lease Agreement dated September 20, 1996 between Davis
               Partnership and USSC.*
    21         Subsidiaries of the Company.*
  23.1         Consent of Ernst & Young LLP, Independent Auditors.*
  23.2         Consent of Arthur Andersen LLP, Independent Public Accountants.*
  23.3         Consent of Arthur Andersen LLP, Independent Public Accountants.*
  24.1         Powers of Attorney of directors and executive officers of the
               Registrant.  (Included on Page II-8 of Registration Statement on
               Form S-2)(4).
  27.1         Financial Data Schedule for the Company (EDGAR filing only).*
  27.2         Financial Data Schedule for USSC (EDGAR filing only).*
     *         Filed herewith.
   (1)         Incorporated by reference to the Company's Form S-1 (No. 33-
               59811), as amended, initially filed with the Commission on June
               12, 1995.
   (2)         Incorporated by reference to the Company's Schedule 14D-9 dated
               February 21, 1995.
   (3)         Incorporated by reference to other prior filings of the Company
               as indicated.
   (4)         Incorporated by reference to the Company's Form S-2 (No. 333-
               01089) as filed with the Commission on February 20, 1996.

B)   Reports on Form 8-K were filed by the Registrant on October 21, 1996,
     November 5, 1996, and November 19, 1996

For the purpose of complying with the amendments to the rules governing Form S-8
(effective July 13, 1990) under the Securities Act of 1933, the undersigned
registrant hereby undertakes as follows, which undertaking shall be incorporated
by reference into registrant's Registration Statement on Form S-8 No. 3332453
(filed December 6, 1989).

Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
of 1933 and is, therefore, unenforceable.  In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.


                                       64
<PAGE>

                                   SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
                                        UNITED STATIONERS INC.


                                        BY:    /s/Daniel H. Bushell
                                             ----------------------------
                                             Daniel H. Bushell
                                             Executive Vice President,
                                             Chief Financial Officer and
                                             Assistant Secretary
                                             (principal accounting officer)
Dated:

     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated:

         SIGNATURE                   CAPACITY                              DATE
         ---------                   --------                              ----

  /s/Frederick B. Hegi, Jr.        Chairman of the Board of Directors,
-----------------------------      President and Chief Executive Officer
  Frederick B. Hegi, Jr.


  /s/Michael D. Rowsey             Executive Vice President
-------------------------          and a Director
  Michael D. Rowsey



  /s/JAMES T. CALLIER, JR.         Director
-------------------------
  James T. Callier, Jr.


  /s/Daniel J. Good                Director
-------------------------
  Daniel J. Good


  /s/Jeffrey K. Hewson             Director
-------------------------
  Jeffrey K. Hewson


  /s/James A. Johnson              Director
-------------------------
  James A. Johnson


  /s/Gary G. Miller                Director
-------------------------
  Gary G. Miller


  /S/JOEL D. SPUNGIN               Director
-------------------------
  Joel D. Spungin


  /s/Thomas W. Sturgess            Director
-------------------------
  Thomas W. Sturgess


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