Stock-Based Compensation:

6 Months Ended

Jun. 30, 2014

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 June 30,				Six Months Ended June 30,
(Dollars in millions)	2014		2013		2014		2013
Cost	$	28	$	30	$	59	$	61
Selling, general and administrative		100		115		188		214
Research, development and engineering		14		15		28		30
Other (income) and expense*		—		—		(9)		—
Pre-tax stock-based compensation cost		142		161		266		305
Income tax benefits		(48)		(56)		(89)		(106)
Total stock-based compensation cost	$	94	$	105	$	176	$	199
* Reflects the one-time effects related to the divestiture of the customer care business in the six months ended June 30, 2014.

The decrease in pre-tax stock-based compensation cost for the three months ended June 30, 2014, as compared to the corresponding period in the prior year, was due to decreases related to restricted stock units ($10 million), performance share units ($5 million) and the company’s assumption of stock-based awards previously issued by acquired entities ($4 million). The decrease in the pre-tax stock-based compensation cost for the six months ended June 30, 2014, as compared to the corresponding period in the prior year, was due to decreases related to restricted stock units ($19 million), performance share units ($12 million) and the company’s assumption of stock-based awards previously issued by acquired entities ($8 million).

As of June 30, 2014, the total unrecognized compensation cost of $1,184 million related to non-vested awards is expected to be recognized over a weighted-average period of approximately 2.6 years.

There was no significant capitalized stock-based compensation cost at June 30, 2014 and 2013.