INCOME TAXES

For the three months ended June 30, 2015 and 2014, income tax benefit totaled $0.2 million and $4.1 million, respectively. The Company's effective tax rate in the second quarter of 2015 was 2.7% on pre-tax losses of $9.3 million, compared to an effective tax rate of 158.2% on pre-tax losses of $2.6 million in the second quarter of 2014. The difference between the statutory and effective tax rate for the three months ended June 30, 2015 principally relates to a tax charge of $4.8 million related to a change in valuation allowance due to a change in forecasts impacting foreign tax credit utilization and a tax benefit for the release of a tax reserve of $2.4 million.

For the six months ended June 30, 2015 and 2014, income tax (expense) benefit totaled $(24.5) million and $1.9 million, respectively. The Company's effective tax rate for the six months ended June 30, 2015 was (224.7)% on pre-tax losses of $10.9 million, compared to an effective tax rate of 30.5% on pre-tax losses of $6.4 million for the six months ended June 30, 2014. The difference between the statutory and effective tax rate for the six months ended June 30, 2015 is principally related to a tax expense for the establishment of a $23.8 million valuation allowance on foreign tax credit carryovers as a result of the impact of the Arysta Acquisition and losses that did not produce tax benefits having a greater impact in the current period than in the prior year period.

The assessment of the need for a valuation allowance requires management to make estimates and assumptions about future earnings, reversal of existing temporary differences and available tax planning strategies. As a result of the impact of the Arysta Acquisition, the Company believes it is more likely than not that the full value of the foreign tax credit carryovers will not be realizable. Consequently, a valuation allowance of $19.0 million was recorded discretely in the first quarter of 2015. The valuation allowance was increased by $4.8 million in the second quarter of 2015 due to changes in forecasts.

The amount of unrecognized tax benefits was $67.8 million and $27.7 million at June 30, 2015 and December 31, 2014, respectively, of which $36.3 million would reduce our effective tax rate if recognized. The increase was primarily due to the historical Arysta unrecognized tax benefits assumed.

Accrued interest and penalties related to unrecognized tax benefits were $9.7 million and $4.7 million at June 30, 2015 and December 31, 2014, respectively. The Company recognized interest and penalties of $0.1 million and $0.4 million related to unrecognized tax benefits in the income tax provision for the three and six months ended June 30, 2015, respectively. The remainder of the increase was due to the historical Arysta interest and penalties assumed.

The unrecognized tax benefits could be reduced by $3.3 million over the next 12 months as a result of the lapse of statutes of limitations in various jurisdictions.

The Company is subject to U.S. Federal income tax as well as income tax in multiple state and foreign jurisdictions. The open tax years for major jurisdictions were as follows:



Major Jurisdictions	Open Years
Belgium	2008	through current
Brazil	2009	through current
China	2011	through current
France	2010	through current
Japan	2009	through current
Mexico	2009	through current
South Africa	2009	through current
United Kingdom	2008	through current
United States	2011	through current

The Company is undergoing an audit in France for tax years 2010 through 2012 and in Mexico for tax year 2013. Finally, the Company has been notified by the tax authorities of their intent to initiate an audit in Belgium for tax years 2008 through 2013.