9. Retirement-Related Benefits: The company offers defined benefit pension plans, defined contribution pension plans, as well as nonpension postretirement plans primarily consisting of retiree medical benefits. The following table provides the pre-tax cost for all retirement-related plans.

					Yr. to Yr.
(Dollars in millions)					Percent
For the three months ended June 30:	2018		2017		Change
Retirement-related plans — cost
Defined benefit and contribution pension plans — cost	$	709	$	659	7.5	%
Nonpension postretirement plans — cost	49		60		(18.3	)

Total	$	758	$	719	5.4	%

					Yr. to Yr.
(Dollars in millions)					Percent
For the six months ended June 30:	2018		2017		Change
Retirement-related plans — cost
Defined benefit and contribution pension plans — cost	$	1,447	$	1,323	9.3	%
Nonpension postretirement plans — cost	100		121		(17.8	)

Total	$	1,546	$	1,444	7.1	%

The following table provides the components of the cost/(income) for the company’s pension plans.

Cost/(Income) of Pension Plans

(Dollars in millions)	U.S. Plans						Non-U.S. Plans
For the three months ended June 30:	2018			2017			2018			2017
Service cost	$	—		$	—		$	101		$	101
Interest cost (1)	429			478			211			206
Expected return on plan assets (1)	(675		)	(753		)	(339		)	(327		)
Amortization of prior service costs/(credits) (1)	4			4			(21		)	(24		)
Recognized actuarial losses (1)	378			331			353			371
Curtailments and settlements (1)	—			—			6			3
Multi-employer plans	—			—			10			10
Other costs (1)	—			—			4			5

Total net periodic pension (income)/cost of defined benefit plans	$	136		$	60		$	325		$	344
Cost of defined contribution plans	145			158			103			97

Total defined benefit and contribution plans cost recognized in the Consolidated Statement of Earnings	$	281		$	218		$	428		$	442

(1)

These components of net periodic pension cost are included in other (income) and expense in the Consolidated Statement of Earnings.

(Dollars in millions)	U.S. Plans						Non-U.S. Plans
For the six months ended June 30:	2018			2017			2018			2017
Service cost	$	—		$	—		$	205		$	202
Interest cost (1)	859			957			426			406
Expected return on plan assets (1)	(1,351		)	(1,507		)	(687		)	(644		)
Amortization of prior service costs/(credits) (1)	8			8			(42		)	(48		)
Recognized actuarial losses (1)	763			668			712			733
Curtailments and settlements (1)	—			—			6			1
Multi-employer plans	—			—			20			19
Other costs (1)	—			—			11			10

Total net periodic pension (income)/cost of defined benefit plans	$	279		$	127		$	651		$	679
Cost of defined contribution plans	305			319			211			198

Total defined benefit and contribution plans cost recognized in the Consolidated Statement of Earnings	$	584		$	446		$	863		$	877

(1)

These components of net periodic pension cost are included in other (income) and expense in the Consolidated Statement of Earnings.

In 2018, the company expects to contribute approximately $400 million to its non-U.S. defined benefit and multi-employer plans, the largest of which will be contributed to the defined benefit pension plans in the UK, Japan and Spain. This amount generally represents the legally mandated minimum contribution. Total contributions to the non-U.S. plans in the first six months of 2018 were $237 million, of which $80 million was in cash and $157 million in U.S. Treasury securities. Total net contributions to the non-U.S. plans in the first six months of 2017 were $263 million, of which $87 million was in cash and $176 million in U.S. Treasury securities. The contribution of U.S. Treasury securities is considered a non-cash transaction in the Consolidated Statement of Cash Flows.

The following table provides the components of the cost for the company’s nonpension postretirement plans.

Cost of Nonpension Postretirement Plans

(Dollars in millions)	U.S. Plan						Non-U.S. Plans
For the three months ended June 30:	2018			2017			2018			2017
Service cost	$	3		$	3		$	1		$	1
Interest cost (1)	33			38			11			14
Expected return on plan assets (1)	—			—			(1		)	(2		)
Amortization of prior service costs/(credits) (1)	(2		)	(2		)	0			0
Recognized actuarial losses (1)	2			5			1			2
Curtailments and settlements (1)	—			—			0			0

Total nonpension postretirement plan cost recognized in Consolidated Statement of Earnings	$	37		$	45		$	12		$	16

(1)

These components of net periodic pension cost are included in other (income) and expense in the Consolidated Statement of Earnings.

(Dollars in millions)	U.S. Plan						Non-U.S. Plans
For the six months ended June 30:	2018			2017			2018			2017
Service cost	$	6		$	7		$	3		$	3
Interest cost (1)	66			77			24			29
Expected return on plan assets (1)	—			—			(3		)	(4		)
Amortization of prior service costs/(credits) (1)	(4		)	(4		)	0			0
Recognized actuarial losses (1)	5			10			3			3
Curtailments and settlements (1)	—			—			0			0

Total nonpension postretirement plan cost recognized in Consolidated Statement of Earnings	$	74		$	90		$	26		$	31

(1)

These components of net periodic pension cost are included in other (income) and expense in the Consolidated Statement of Earnings.

The company contributed $215 million in U.S. Treasury securities to the U.S. nonpension postretirement benefit plan during the six months ended June 30, 2018, and $230 million in U.S. Treasury securities during the six months ended June 30, 2017. The contribution of U.S. Treasury securities is considered a non-cash transaction in the Consolidated Statement of Cash Flows.