16. Employee Benefit Obligations


	September 30,		December 31,
($ in millions)	2018		2017

Underfunded defined benefit pension liabilities	$	885	$	945
Less: Current portion		(25)		(27)
Long-term defined benefit pension liabilities		860		918
Long-term retiree medical liabilities		191		196
Deferred compensation plans		293		275
Other		77		74
	$	1,421	$	1,463

Components of net periodic benefit cost associated with the company’s defined benefit pension plans were:


	Three Months Ended September 30,
	2018							2017
($ in millions)	U.S.			Foreign		Total		U.S.			Foreign		Total

Ball-sponsored plans:
Service cost	$	13		$	3	$	16	$	13		$	4	$	17
Interest cost		25			18		43		29			22		51
Expected return on plan assets		(27)			(27)		(54)		(31)			(26)		(57)
Amortization of prior service cost		—			—		—		1			—		1
Recognized net actuarial loss		9			2		11		8			1		9
Curtailment and settlement losses including special termination benefits		14	(a)		—		14		43	(a)		—		43
Total net periodic benefit cost	$	34		$	(4)	$	30	$	63		$	1	$	64

(a)

Includes settlement losses related to the purchase of non-participating annuities, plant shutdown benefits and other settlements that occur in the normal course of business, which have been recorded in business consolidation and other activities.


	Nine Months Ended September 30,
	2018							2017
($ in millions)	U.S.			Foreign		Total		U.S.			Foreign		Total

Ball-sponsored plans:
Service cost	$	40		$	11	$	51	$	37		$	12	$	49
Interest cost		73			54		127		95			66		161
Expected return on plan assets		(82)			(81)		(163)		(97)			(78)		(175)
Amortization of prior service cost		1			—		1		1			—		1
Recognized net actuarial loss		28			4		32		26			3		29
Curtailment and settlement losses including special termination benefits		14	(a)		—		14		43	(a)		—		43
Net periodic benefit cost for Ball sponsored plans		74			(12)		62		105			3		108
Net periodic benefit cost for multi-employer plans		1			—		1		2			—		2
Total net periodic benefit cost	$	75		$	(12)	$	63	$	107		$	3	$	110

(a)

In September 2018 and August 2017, Ball completed the purchase of non-participating group annuity contracts that were transferred to an insurance company for the company’s U.S. pension benefit obligations totaling approximately $176 million and $224 million, respectively. The purchase of the annuity contracts triggered settlement accounting in each year. Regular lump sums paid in the normal course of plan operations are also included in the total settlement amounts. These transactions resulted in the recognition of settlement losses recorded in business consolidation and other activities of $14 million in 2018 and $41 million in 2017. The company’s pension obligations were remeasured during the third quarter of 2018 and 2017 for the impacted plans.

Non-service pension income totaling $3 million for the nine months ended September 30, 2018, is included in selling, general, and administrative (SG&A) expenses. Non-service pension costs totaling $4 million and $16 million for the three and nine months ended September 30, 2017, respectively, are included in cost of sales and SG&A and, due to immateriality, were not retrospectively adjusted as required by the newly adopted accounting standard for pension and postretirement benefit costs as described in Note 2.

Contributions to the company’s defined benefit pension plans were $53 million in the first nine months of 2018 compared to $201 million in the first nine months of 2017, and such contributions are expected to be in the range of $66 million for the full year of 2018. This estimate may change based on changes to the U.S. Pension Protection Act and actual plan asset performance, among other factors.