Stock-Based Compensation

9 Months Ended

Sep. 30, 2018

Stock-Based Compensation

Stock-Based Compensation

6. 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)	2018			2017			2018			2017
Cost	$	19		$	22		$	60		$	68
Selling, general and administrative	95			88			264			277
Research, development and engineering	15			13			47			43
Pre-tax stock-based compensation cost	$	129		$	123		$	371		$	388
Income tax benefits	(29		)	(41		)	(88		)	(128		)
Total net stock-based compensation cost	$	100		$	82		$	283		$	260

Pre-tax stock-based compensation cost for the three months ended September 30, 2018 increased by $6 million compared to the corresponding period in the prior year. This was due to increases related to performance share units ($8 million) partially offset by decreases in restricted stock units ($1 million), and the conversion of stock-based awards previously issued by acquired entities ($1 million).

Pre-tax stock-based compensation cost for the nine months ended September 30, 2018 decreased $17 million compared to the corresponding period in the prior year. This was due to decreases related to restricted stock units ($13 million), and the conversion of stock-based awards previously issued by acquired entities ($4 million).

As of September 30, 2018, the total unrecognized compensation cost of $805 million related to non-vested awards was 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, 2018 and 2017.