Note 10—Income Taxes

The following table summarizes the activity relating to the Company’s unrecognized tax benefits during the six months ended June 30, 2014 (in thousands):

	Total

Balance at December 31, 2013	$	14,678
Gross increases related to current period tax positions	322
Balance at June 30, 2014	$	15,000

At June 30, 2014 and December 31, 2013, Advent had gross unrecognized tax benefits of $15.0 million and $14.7 million, respectively. During the six months ended June 30, 2014, the Company increased the amount of unrecognized tax benefits by approximately $322,000 relating to state research credits. If recognized, the total unrecognized tax benefits would decrease Advent’s tax provision and increase net income by approximately $12.3 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 primarily to federal research credits, state research credits and enterprise zone tax credits and various state net operating losses.

Advent is subject to taxation in the U.S. and various states and jurisdictions outside the U.S. Advent is currently undergoing a State of California franchise tax examination for the 2006 and 2007 tax years. At June 30, 2014, Advent was not under examination in any other income tax jurisdiction and at the present time 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 2009 and California for tax years after 2005.

As of June 30, 2014, Advent made no provision for a cumulative total of $22.3 million of undistributed earnings for certain non-U.S. subsidiaries, which are deemed to be permanently reinvested.