Stock-Based Compensation:

9 Months Ended

Sep. 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 income from continuing operations:

	Three Months Ended September 30,				Nine Months Ended September 30,
(Dollars in millions)	2014		2013		2014		2013
Cost	$	33	$	27	$	92	$	89
Selling, general and administrative		105		110		293		324
Research, development and engineering		13		12		41		42
Other (income) and expense*		—		—		(9)		—
Pre-tax stock-based compensation cost		150		150		416		455
Income tax benefits		(51)		(52)		(141)		(157)
Total stock-based compensation cost	$	99	$	98	$	276	$	297
* Reflects the one-time effects related to the divestiture of the customer care business.

Pre-tax stock-based compensation cost for the three months ended September 30, 2014 was flat compared to the corresponding period in the prior year. The decrease in the pre-tax stock-based compensation cost for the nine months ended September 30, 2014, as compared to the corresponding period in the prior year, was due to decreases related to restricted stock units ($21 million), performance share units ($4 million) and the company’s assumption of stock-based awards previously issued by acquired entities ($13 million).

The amount of stock-based compensation cost included in the loss from discontinued operations, net of tax was immaterial.

As of September 30, 2014, the total unrecognized compensation cost of $1,057 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, 2014 and 2013.