Stock-Based Compensation

3 Months Ended

Mar. 31, 2020

Stock-Based Compensation

Stock-Based Compensation

16. 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:	2020		2019
Cost	$	27	$	20
Selling, general and administrative		117		74
Research, development and engineering		45		19
Pre-tax stock-based compensation cost	$	189	$	113
Income tax benefits		(45)		(25)
Total net stock-based compensation cost	$	144	$	88

Pre-tax stock-based compensation cost for the three months ended March 31, 2020 increased $76 million compared to the corresponding period in the prior year. This was primarily due to increases related to the conversions of stock-based compensation previously issued by Red Hat ($65 million), and restricted stock units ($17 million), partially offset by decreases in performance share units ($6 million).

Total unrecognized compensation cost related to non-vested awards at March 31, 2020 was $1.2 billion and is expected to be recognized over a weighted-average period of approximately 2.5 years.

Capitalized stock-based compensation cost was not material at March 31, 2020 and 2019.