Stock-Based Compensation:

6 Months Ended

Jun. 30, 2013

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)	2013			2012			2013			2012
Cost	$	30		$	30		$	61		$	64
Selling, general and administrative	115			117			214			236
Research, development and engineering	15			12			30			27
Pre-tax stock-based compensation cost	161			160			305			328
Income tax benefits	(56		)	(56		)	(106		)	(116		)
Total stock-based compensation cost	$	105		$	104		$	199		$	212

The increase in pre-tax stock-based compensation cost for the three months ended June 30, 2013, as compared to the corresponding period in the prior year, was due to increases related to restricted stock units ($4 million) and performance share units ($1 million), partially offset by a decrease in the company’s assumption of stock-based awards previously issued by acquired entities ($4 million). The decrease in pre-tax stock-based compensation cost for the six months ended June 30, 2013, as compared to the corresponding period in the prior year, was due to decreases related to performance share units ($11 million), the company’s assumption of stock-based awards previously issued by acquired entities ($7 million) and restricted stock units ($5 million).

As of June 30, 2013, the total unrecognized compensation cost of $1,287 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, 2013 and 2012.