Income Taxes

9 Months Ended

Sep. 30, 2011

Income Taxes

Income Taxes

Note 15—Income Taxes

The following table summarizes the activity relating to the Company’s unrecognized tax benefits during the nine months ended September 30, 2011 (in thousands):

	Total
Balance at December 31, 2010	$	9,501
Gross increases related to current period tax positions	1,311
Balance at September 30, 2011	$	10,812

At September 30, 2011 and December 31, 2010, Advent had $10.8 million and $9.5 million of gross unrecognized tax benefits, respectively. During the nine months ended September 30, 2011, Advent increased the amount of unrecognized tax benefits by approximately $1.3 million relating to federal and California research credits, and California enterprise zone credits. If recognized, the total unrecognized tax benefits would decrease Advent’s tax provision and increase net income by $9.0 million. The impact on net income reflects the liabilities for unrecognized tax benefits, net of the federal tax benefit of state income tax items. The Company’s liabilities for unrecognized tax benefits relate to federal research credits, California research and enterprise zone tax credits and various state net operating losses.

Advent is subject to taxation in the US and various states and foreign jurisdictions and is currently undergoing a State of California franchise tax examination for the 2006 and 2007 tax years. Advent is not under examination in any other income tax jurisdiction at the present time and does not anticipate the total amount of its unrecognized tax benefits to significantly change over the next 12 months. The material jurisdictions that are subject to examination by tax authorities include federal for tax years after 2006 and California for tax years after 2005.