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Summarized financial information of Atwood is as follows: 

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## INCOME TAXES 

Deferred income taxes ar computed using the liability method and are provided on all temporary differences between the financial basis and the tax basis of the Company’s assets and liabilities. 

## OTHER POST EMPLOYMENT BENEFITS 

The Company sponsors a health care plan that provides post r etirement medical benefits to retired employees. Employees who retire after November 1, 1992 and elect to participate in the plan pay the entire estimated cost of such benefits. 

The Company has accrued a liability for estimated worker’ s compensation claims incurred. The liability for other benefits to former or inactive employees after employment but before retirement is not material. 

## EARNINGS PER SHARE 

Basic earnings per shar is based on the weighted-average number of common shares outstanding during the period. Diluted earnings per share includes the dilutive ef fect of stock options and restricted stock. 

## EMPLOYEE STOCK-BASED AWARDS 

Employee stock-based awards ar accounted for under Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees” and related interpr etations. Fixed plan common stock options generally do not result in compensation expense, because the exercise price of the options issued by the Company equals the market price of the underlying stock on the date of grant. The plans under which the Company issues stock based awards are described mor fully in Note 6. The following table illustrates the effect on net income and earnings per shar as if the Company had applied the fair value recognition provisions of SFAS No. 123, “Accounting for Stock-Based Compensation.” 

