Stock-Based Compensation

3 Months Ended

Mar. 31, 2015

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

(Dollars in millions)
For the three months ended March 31:		2015		2014
Cost	$	27	$	31
Selling, general and administrative		87		88
Research, development and engineering		14		14
Other (income) and expense*		(1)		(9)
Pre-tax stock-based compensation cost		127		124
Income tax benefits		(42)		(41)
Total net stock-based compensation cost	$	85	$	83
* Reflects the one-time effects related to the divestiture of the customer care business and industry standard server businesses in 2014 and 2015, respectively.

Pre-tax stock-based compensation cost for the three months ended March 31, 2015 increased $3 million compared to the corresponding period in the prior year. This was due to increases related to restricted stock units ($4 million) andperformance share units ($1 million), offset by a decrease in the company’s assumption of stock-based awards previously issued by acquired entities ($2 million).

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

As of March 31, 2015, the total unrecognized compensation cost of $793 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 March 31, 2015 and 2014.