Stock-Based Compensation

3 Months Ended

Mar. 31, 2016

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:		2016		2015
Cost	$	21	$	27
Selling, general and administrative		99		87
Research, development and engineering		13		14
Other (income) and expense*		––		(1)
Pre-tax stock-based compensation cost		133		127
Income tax benefits		(43)		(42)
Total net stock-based compensation cost	$	90	$	85

* Reflects the one-time effects related to divestitures.

Pre-tax stock-based compensation cost for the three months ended March 31, 2016 increased $6 million compared to the corresponding period in the prior year. This was due to increases related to performance share units ($12 million), conversion of stock-based awards previously issued by acquired entities ($3 million) and stock options ($1 million), partially offset by decreases related to restricted stock units ($10 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, 2016, the total unrecognized compensation cost of $777 million related to non-vested awards was expected to be recognized over a weighted-average period of approximately 2.6 years.

There was no significant capitalized stock-based compensation cost at March 31, 2016 and 2015.