Stock-Based Compensation:

9 Months Ended

Sep. 30, 2013

Stock-Based Compensation:

Stock-Based Compensation:

5. Stock-Based Compensation: Stock-based compensation cost is measured at grant date, based on the fair value of the award, and is recognized over the employee requisite service period. The following table presents total stock-based compensation cost included in the Consolidated Statement of Earnings:

	Three Months Ended September 30,				Nine Months Ended September 30,
(Dollars in millions)	2013		2012		2013		2012
Cost	$	27	$	34	$	89	$	99
Selling, general and administrative		110		133		324		370
Research, development and engineering		12		15		42		43
Other (income) and expense		—		0		—		0
Pre-tax stock-based compensation cost		150		183		455		510
Income tax benefits		(52)		(64)		(157)		(179)
Total stock-based compensation cost	$	98	$	119	$	297	$	331

The decrease in pre-tax stock-based compensation cost for the three months ended September 30, 2013, as compared to the corresponding period in the prior year, was due to decreases related to performance share units ($23 million),restricted stock units ($7 million) and the company’s assumption of stock-based awards previously issued by acquired entities ($4 million). The decrease in pre-tax stock-based compensation cost for the nine months ended September 30, 2013, as compared to the corresponding period in the prior year, was due to decreases related to performance share units ($34 million), the company’s assumption of stock-based awards previously issued by acquired entities ($11 million) and restricted stock units ($12 million).

As of September 30, 2013, the total unrecognized compensation cost of $1,088 million related to non-vested awards is expected to be recognized over a weighted-average period of approximately 2.5 years.

There was no significant capitalized stock-based compensation cost at September 30, 2013 and 2012.