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3/25122, 9:42 AM Table of Contents road -20210930 We recognize the financial statement benefit of the Company's tax positions that are at least more likely than not to be sustained upon audit based on the technical merits of the tax position. For tax positions that are more likely than not to be sustained upon audit, management accrues the largest amount of the benefit that is more likely than not to be sustained. The Company classifies income tax - related interest and penalties as interest expense and other expenses, respectively. Refer to Note 15 - Provision for Income Taxes for further information regarding our federal and state income taxes. Equity -Based Incentive Plans Compensation costs related to equity -classified share -based awards are recognized in the consolidated financial statements based on grant date fair value. Compensation cost for graded -vesting awards is recognized ratably over the respective vesting periods. Accrued Insurance Costs The Company carnes insurance policies to cover various risks, primarily including general liability, automobile liability and workers' compensation, under which it is liable to reimburse the insurance company for a portion of each claim paid. The amount for which the Company is liable for general liability, automobile liability and workers' compensation claims ranges from $100,000 to $500,000 per occurrence. Management accrues insurance costs for probable losses, both reported and unreported, that are reasonably estimable using actuarial methods based on historic trends modified, if necessary, by recent events. Changes in loss assumptions caused by changes in actual experience would affect the assessment of the ultimate liability and could have an effect on the Company's operating results and financial position up to $500,000 per occurrence for general liability, automobile liability and workers' compensation claims. The Company provides employee medical insurance under policies that are both fixed -premium, fully -insured policies and self-insured policies that are administered by the insurance company. Under the self-insured policies, the Company is liable to reimburse the insurance company for actual claims paid plus an administrative fee. The Company purchases separate stop -loss insurance that limits the individual participant claim loss to amounts ranging from $100,000 to $160,000. In addition to the retention items noted above, the Company's insurance provider requires the Company to maintain a standby letter of credit. This letter of credit serves as a guarantee by the banking institution to pay the Company's insurance provider the incurred claim costs attributable to general liability, workers' compensation and automobile liability claims, up to the amount stated in the standby letter of credit, in the event that these claims are not paid by the Company (see Note 18 - Commitments and Contingencies). Earnings per Share Basic net income per share attributable to common stockholders is computed by dividing net income attributable to common stockholders by the weighted average number of common shares outstanding during the period. Diluted net income per common share attributable to common stockholders is the same as basic net income per share attributable to common stockholders, but includes dilutive unvested stock awards using the treasury stock method. Stripping Costs Stripping costs are costs incurred for the removal of overburden or waste materials for the purpose of obtaining access to aggregate materials that will be commercially produced. Stripping costs incurred during the development stage of a mine (pre -production stripping) are capitalized and reported within property, plant and equipment, net in our accompanying Consolidated Balance Sheets. Capitalized pre -production stripping costs are depleted in accordance with the units -of -production method as aggregates are extracted. Pre -production stripping costs included in property, plant and equipment were S2.7 million and $0.0 million, respectively, for the fiscal years ended September 30, 2021 and 2020. Stripping costs incurred during the production phase of a mine are variable production cost.-, and are included in the costs of the inventory produced during the period that the stripping costs are incurred. The production phase of a mine is deemed to begin when saleable minerals are extracted, regardless of the level of production. However, the production phase does not commence with the removal of de minimis saleable mineral material that occurs in conjunction with the removal of overburden or waste material for the purpose of obtaining access to aggregate materials. Stripping costs considered as production costs and included in the costs of inventory produced for the fiscal years ended September 30, 2021, 2020 and 2019 was $1.8 million, $1.3 million and $1.6 million, respectively. 53 https://www.sec.gov/Archives/edgar/data/0001718227/000171822721000107/road-20210930.htm 941144