Stock-Based Compensation:

3 Months Ended

Mar. 31, 2014

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:


(Dollars in millions)
For the three months ended March 31:		2014		2013
Cost	$	31	$	31
Selling, general and administrative		88		99
Research, development and engineering		14		14
Other (income) and expense*		(9)		—
Pre-tax stock-based compensation cost		124		144
Income tax benefits		(41)		(50)
Total stock-based compensation cost	$	83	$	94

* Reflects the one-time effects related to the divestiture of the customer care business.

The decrease in pre-tax stock-based compensation cost for the three months ended March 31, 2014, as compared to the corresponding period in the prior year, was due to decreases related to restricted stock units ($9 million), performance share units ($7 million) and the company’s assumption of stock-based awards previously issued by acquired entities ($4 million).

As of March 31, 2014, the total unrecognized compensation cost of $853 million related to non-vested awards is expected to be recognized over a weighted-average period of approximately 2.4 years.

There was no significant capitalized stock-based compensation cost at March 31, 2014 and 2013.

- Definition

The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.

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