Employee Benefit Obligations

12 Months Ended

Dec. 31, 2024

Employee Benefit Obligations

Employee Benefit Obligations

17. Employee Benefit Obligations

	December 31,
($ in millions)	2024		2023
Underfunded defined benefit pension liabilities	$	263	$	323
Less: Current portion		(20)		(21)
Long-term defined benefit pension liabilities		243		302
Long-term retiree medical liabilities		79		90
Deferred compensation plans		206		280
Other		49		63
	$	577	$	735

The company’s defined benefit plans for salaried and hourly employees in North America, Sweden, Switzerland, the U.K., Germany and Ireland, provide pension benefits based on employee compensation and years of service. Plans for North American hourly employees provide benefits based on fixed rates for each year of service. While the German, Swedish and certain U.S. plans are not funded, the company maintains liabilities, and annual additions to such liabilities are generally tax-deductible. With the exception of the unfunded German, Swedish and certain U.S. plans, the company’s policy is to fund the defined benefit plans in amounts at least sufficient to satisfy statutory funding requirements, taking into consideration deductibility under existing tax laws and regulations. The company closed its pension plans to all non-unionized new entrants in the United States effective for anyone hired after December 31, 2021. Anyone employed by Ball prior to that date is unaffected by this change.

Defined Benefit Pension Plans

Amounts recognized on the consolidated balance sheets for the funded status of the company’s defined benefit pension plans consisted of:

	December 31,
	2024						2023
($ in millions)	U.S.		Non-U.S.		Total		U.S.		Non-U.S.		Total
Long-term pension asset	$	—	$	36	$	36	$	—	$	41	$	41
Defined benefit pension liabilities (a)		(102)		(161)		(263)		(140)		(183)		(323)
Funded status	$	(102)	$	(125)	$	(227)	$	(140)	$	(142)	$	(282)

(a) Included is an unfunded, non-qualified U.S. plan obligation of $17 million at December 31, 2024, that has been annuitized with a corresponding asset of $16 million. At December 31, 2023, the unfunded, non-qualified U.S. plan obligation of $22 million was annuitized with a corresponding asset of $21 million.

An analysis of the change in benefit accounts for 2024 and 2023 follows:

	December 31,
	2024						2023
($ in millions)	U.S.		Non-U.S.		Total		U.S.		Non-U.S.		Total
Change in projected benefit obligation:
Benefit obligation at prior year end	$	1,246	$	2,191	$	3,437	$	1,253	$	1,802	$	3,055
Service cost		15		3		18		16		5		21
Interest cost		60		82		142		63		86		149
Benefits paid		(118)		(121)		(239)		(116)		(125)		(241)
Net actuarial (gains) losses		(50)		(226)		(276)		29		322		351
Settlements and other		—		—		—		(2)		—		(2)
Other		—		(1)		(1)		3		—		3
Effect of exchange rates		—		(43)		(43)		—		101		101
Benefit obligation at year end		1,153		1,885		3,038		1,246		2,191		3,437
Change in plan assets:
Fair value of assets at prior year end		1,106		2,049		3,155		1,111		1,988		3,099
Actual return on plan assets		52		(158)		(106)		106		62		168
Employer contributions (a)		11		21		32		7		18		25
Benefits paid		(118)		(121)		(239)		(116)		(125)		(241)
Settlements and other		—		—		—		(2)		—		(2)
Other		—		1		1		—		1		1
Effect of exchange rates		—		(32)		(32)		—		105		105
Fair value of assets at end of year		1,051		1,760		2,811		1,106		2,049		3,155
Funded status	$	(102)	$	(125)	$	(227)	$	(140)	$	(142)	$	(282)

(a) Note that amounts for employer contributions presented in the table above do not include contributions in 2023 to the Salaried Employees of Ball Aerospace & Technologies Corp. Pension Plan.

The company’s German, Swedish and certain U.S. plans are unfunded and the liabilities are included on the consolidated balance sheets. Benefits are paid directly by the company to the participants.

Amounts, inclusive of amounts related to the historical aerospace business, recognized in accumulated other comprehensive earnings (loss), including other postemployment benefits, consisted of:

	December 31,
	2024						2023
($ in millions)	U.S.		Non-U.S.		Total		U.S.		Non-U.S.		Total
Net actuarial (loss) gain	$	(118)	$	(417)	$	(535)	$	(261)	$	(428)	$	(689)
Net prior service (cost) credit		12		(38)		(26)		12		(43)		(31)
Tax effect and currency exchange rates		34		125		159		73		110		183
	$	(72)	$	(330)	$	(402)	$	(176)	$	(361)	$	(537)

Net actuarial losses at December 31, 2024 and 2023, primarily relate to the 2023 U.K. defined benefit pension plan buy-in and a decrease in global discount rates.

The accumulated benefit obligation for all U.S. defined benefit pension plans was $1,143 million and $1,236 million at December 31, 2024 and 2023, respectively. The accumulated benefit obligation for all non-U.S. defined benefit pension plans was $1,882 million and $2,189 million at December 31, 2024 and 2023, respectively. Following is the information for defined benefit plans with a projected benefit obligation, or an accumulated benefit obligation, in excess of plan assets:

	December 31,
	2024						2023
($ in millions)	U.S.		Non-U.S.		Total		U.S.		Non-U.S.		Total
Projected benefit obligation	$	1,153	$	175	$	1,328	$	1,246	$	245	$	1,491
Accumulated benefit obligation		1,143		172		1,315		1,236		243		1,479
Fair value of plan assets (a)		1,051		15		1,066		1,106		63		1,169

(a) The German, Swedish and certain U.S. plans are unfunded and, therefore, there is no fair value of plan assets associated with these plans.

Components of net periodic benefit cost were as follows:

	Years Ended December 31,
	2024						2023						2022
($ in millions)	U.S.		Non-U.S.		Total		U.S.		Non-U.S.		Total		U.S.		Non-U.S.		Total
Ball-sponsored plans:
Service cost	$	15	$	3	$	18	$	16	$	5	$	21	$	27	$	10	$	37
Interest cost		60		82		142		63		86		149		37		47		84
Expected return on plan assets		(88)		(80)		(168)		(87)		(101)		(188)		(78)		(61)		(139)
Amortization of prior service cost		1		2		3		1		2		3		1		2		3
Recognized net actuarial loss		4		15		19		3		1		4		15		4		19
Settlement losses and other charges (a)		—		—		—		4		—		4		14		—		14
Total net periodic benefit cost	$	(8)	$	22	$	14	$	—	$	(7)	$	(7)	$	16	$	2	$	18

(a) Settlement losses and other charges resulted primarily from regular lump sum payments and headcount reduction actions. These settlement losses were recorded in business consolidation and other activities. The company’s impacted U.S. pension obligations were remeasured in connection with the settlements.

Non-service pension income of $4 million in 2024, $32 million in 2023 and $33 million in 2022, is included in SG&A in the consolidated statements of earnings.

Contributions to the company’s defined benefit pension plans are expected to be approximately $32 million in 2025. This estimate may change based on changes in the Pension Protection Act, actual plan asset performance and available company cash flow, among other factors. Benefit payments related to the plans are expected to be approximately $232 million, $231 million, $230 million, $226 million and $224 million for the years ending December 31, 2025 through 2029, respectively, and approximately $1.05 billion in total for the years ending December 31, 2030 through 2034.

Weighted average assumptions used to determine benefit obligations for the company’s significant U.S. plans at December 31 were as follows:

	U.S.
	2024		2023		2022
Discount rate	5.59	%	5.14	%	5.48	%
Rate of compensation increase	4.37	%	4.37	%	4.37	%

Weighted average assumptions used to determine benefit obligations for the company’s significant European plans at December 31 were as follows:

	U.K.						Germany
	2024		2023		2022		2024		2023		2022
Discount rate	4.95	%	3.95	%	5.01	%	3.32	%	3.14	%	3.69	%
Rate of compensation increase	N/A		3.50	%	3.50	%	2.75	%	2.69	%	2.68	%
Pension increase	3.43	%	3.34	%	3.43	%	2.20	%	2.18	%	1.80	%

Weighted average assumptions used to determine net periodic benefit cost for the company’s significant U.S. plans for the years ended December 31 were as follows:

	U.S.
	2024		2023		2022
Discount rate	5.14	%	5.48	%	2.83	%
Rate of compensation increase	4.37	%	4.37	%	4.37	%
Expected long-term rate of return on assets	7.31	%	7.04	%	5.90	%

Weighted average assumptions used to determine net periodic benefit cost for the company’s significant European plans for the years ended December 31 were as follows:

	U.K.						Germany
	2024		2023		2022		2024		2023		2022
Discount rate	3.95	%	5.01	%	1.81	%	3.16	%	3.70	%	1.12	%
Rate of compensation increase	3.50	%	3.50	%	3.50	%	2.70	%	2.69	%	2.50	%
Pension increase	3.34	%	3.43	%	3.64	%	2.20	%	1.80	%	1.70	%
Expected long-term rate of return on assets	3.95	%	5.11	%	1.91	%	N/A		N/A		N/A

The discount and compensation increase rates used above to determine the December 31, 2024, benefit obligations will be used to determine net periodic benefit cost for 2025. A reduction of the expected return on pension assets assumption by one quarter of a percentage point would result in an approximate $7 million increase in 2025 pension expense, while a quarter of a percentage point reduction in the discount rate applied to the pension liability would result in an approximate $8 million increase to pension expense in 2025.

Accounting for pensions and postretirement benefit plans requires that the benefit obligation be discounted to reflect the time value of money at the measurement date and the rates of return currently available on high-quality, fixed-income securities whose cash flows (via coupons and maturities) match the timing and amount of future benefit plan payments. Other factors used in measuring the obligation include compensation increases, health care cost increases, future rates of inflation, mortality and employee turnover.

Actual results may differ from the company’s actuarial assumptions, which may have an impact on the amount of reported expense or liability for pensions or postretirement benefits. In 2024, the company recorded pension expense of $14 million for Ball-sponsored plans, and the company currently expects its 2025 pension expense to be $19 million, using currency exchange rates in effect at December 31, 2024.

The assumption related to the expected long-term rate of return on plan assets reflects the average rate of earnings expected on the funds invested to provide for pension benefits over the life of the plans. The assumption was based upon Ball’s pension plan asset allocations, investment strategies and the views of its investment managers, consultants and other large pension plan sponsors. Some reliance was placed on the historical and expected asset returns of the company’s plans. An asset-allocation optimization model was used to project future asset returns using simulation and asset class correlation. The analysis included expected future risk premiums, forward-looking return expectations derived from the yield on long-term bonds and the price earnings ratios of major stock market indexes, expected inflation levels and real risk-free interest rate assumptions and the fund’s expected asset allocation.

The expected long-term rates of return on assets were calculated by applying the expected rate of return to a market-related value of plan assets at the beginning of the year, adjusted for the weighted average expected contributions and benefit payments. The market-related value of plan assets used to calculate the expected return was $2,946 million for 2024, $3,297 million for 2023 and $3,271 million for 2022.

Defined Benefit Pension Plan Assets

Policies and Allocation Information

Pension investment committees or scheme trustees of the company and its relevant subsidiaries establish investment policies and strategies for the company’s pension plan assets. The investment policies and strategies include the following common themes to: (1) provide for long-term growth of principal without undue exposure to risk, (2) minimize contributions to the plans, (3) minimize and stabilize pension expense and (4) achieve a rate of return equal to or above the market average for each asset class over the long term. The pension investment committees are required to regularly, but no less frequently than annually, review asset mix and asset performance, as well as the performance of the investment managers. Based on their reviews, which are generally conducted quarterly, investment policies and strategies are revised as appropriate.

Target asset allocations are set using a minimum and maximum range for each asset category as a percent of the total funds’ market value. Following are the target asset allocations established as of December 31, 2024:

	U.S.		U.K.
Cash and cash equivalents	—	%	0-10	%
Equity securities	20-40	%	0-10	%
Fixed income securities	40-70	%	—	%
Insurance contract	—	%	90-100	%
Alternative investments	5-25	%	—	%

The actual weighted average asset allocations for Ball’s defined benefit pension plans, which individually were within the established targets for each country for that year, were as follows at December 31:

	2024		2023
Cash and cash equivalents	1	%	1	%
Equity securities	15	%	13	%
Fixed income securities	24	%	24	%
Insurance contract	59	%	61	%
Alternative investments	1	%	1	%
	100	%	100	%

Fair Value Measurements of Pension Plan Assets

Following is a description of the valuation methodologies used for pension assets measured at fair value:

Cash and cash equivalents: Consist of cash on deposit with brokers and short-term U.S. Treasury money market funds with a maturity of less than 90 days, and such amounts are shown net of receivables and payables for securities traded at period end but not yet settled. All cash and cash equivalents are stated at cost, which approximates fair value.

Corporate equity securities: Valued at the closing price reported on the active market on which the individual security is traded.

U.S. government and agency securities: Valued using the pricing of similar agency issues, live trading feeds from several vendors and benchmark yields.

Corporate bonds and notes: Valued using market inputs including benchmark yields, reported trades, broker/dealer quotes, issuer spreads, benchmark securities, bids, offers and reference data including market research publications. Inputs may be prioritized differently at certain times based on market conditions.

Group annuity insurance contract: Valued based on the calculated pension benefit obligation covered by the non-participating annuity contract at year-end.

Commingled funds: The shares held are valued at their net asset value (NAV) at year end.

NAV practical expedient: Includes certain commingled fixed income and equity funds as well as limited partnership and other funds. Certain of the partnership investments receive fair market valuations on a quarterly basis. Certain other commingled funds and partnerships invest in market-traded securities, both on a long and short basis. These investments are valued using quoted market prices.

The preceding methods described may produce a fair value calculation that is not indicative of net realizable value or reflective of future fair values. Furthermore, although the company believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.

The company’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of pension assets and liabilities and their placement within the fair value hierarchy levels. The fair value hierarchy levels assigned to the company’s defined benefit plan assets are summarized in the tables below:

	December 31, 2024
($ in millions)	Level 1		Level 2		Total
U.S. pension assets, at fair value:
Cash and cash equivalents	$	—	$	38	$	38
U.S. government, agency and asset-backed securities:
Municipal bonds		—		8		8
Treasury bonds		138		—		138
Other		—		9		9
Non-U.S. government bonds		—		15		15
Corporate bonds and notes:
Basic materials		—		6		6
Communications		—		40		40
Consumer discretionary		—		19		19
Consumer staples		—		57		57
Energy		—		41		41
Financials		—		50		50
Industrials		—		32		32
Information technology		—		6		6
Private placement		—		1		1
Utilities		—		58		58
Total level 1 and level 2	$	138	$	380		518
Other investments measured at net asset value (a)						533
Total assets					$	1,051

(a) Certain investments measured at fair value using the NAV per share (or its equivalent) practical expedient have not been classified within the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the change in plan assets reconciliation.

	December 31, 2023
($ in millions)	Level 1		Level 2		Total
U.S. pension assets, at fair value:
Cash and cash equivalents	$	—	$	20	$	20
U.S. government, agency and asset-backed securities:
Municipal bonds		—		10		10
Treasury bonds		173		—		173
Other		—		11		11
Non-U.S. government bonds		—		13		13
Corporate bonds and notes:
Basic materials		—		6		6
Communications		—		44		44
Consumer discretionary		—		18		18
Consumer staples		—		59		59
Energy		—		37		37
Financials		—		44		44
Industrials		—		39		39
Information technology		—		6		6
Private placement		—		1		1
Utilities		—		55		55
Total level 1 and level 2	$	173	$	363		536
Other investments measured at net asset value (a)						570
Total assets					$	1,106

(a) Certain investments measured at fair value using the NAV per share (or its equivalent) practical expedient have not been classified within the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the change in plan assets reconciliation.

	December 31,
($ in millions)	2024		2023
U.K. pension assets, at fair value:
Cash and cash equivalents	$	—	$	31
Equity and commingled funds		37		20
Other		—		4
Total level 1		37		55
Level 3: Insurance annuity contract		1,656		1,935
Total assets	$	1,693	$	1,990

In November 2023, the Trustee Board of the U.K. defined benefit pension plan entered into an agreement with an insurance company for a bulk annuity purchase, or “buy-in”, for its U.K. defined benefit pension plan to reduce retirement plan risk, while delivering promised benefits to plan participants. This transaction allows the company to reduce volatility by removing investment, longevity, mortality, interest rate and inflation risk upon the transfer of substantially all of the pension plan assets to the insurer in exchange for the group annuity insurance contract. At this time the company retains both the fair value of the annuity contract within plan assets and the pension benefit obligations related to these participants. The fair value of the annuity buy-in contract was $1.66 billion and $1.94 billion as of December 31, 2024 and 2023, respectively, and is based on the calculated pension benefit obligations covered. The fair value of plan assets categorized as Level 3 during 2024 and 2023 are related to the purchase of the group annuity insurance contract. The plan was frozen on April 5, 2024, and future service accruals were replaced with enhanced defined contribution benefits for the impacted employees. The company anticipates the “buy-out” will occur within three

years of the plan freeze, which will trigger a pension settlement that will result in all plan balances, including accumulated pension components within other comprehensive income, being charged to expense as a noncash settlement charge. Following is a rollforward of the fair value of plan assets from December 31, 2023 to December 31, 2024:

($ in millions)	2024
Balance as of January 1	$	1,935
Actual return on plan assets		(252)
Foreign exchange		(27)
Balance as of December 31	$	1,656

Other Postretirement Benefits

The company sponsors postretirement health care and life insurance plans for certain U.S. and Canadian employees. Employees may also qualify for long-term disability, medical and life insurance continuation and other postemployment benefits upon termination of active employment prior to retirement. All of the Ball-sponsored postretirement health care and life insurance plans are unfunded with the exception of life insurance benefits, which are self-insured. The benefit obligation associated with these plans was $88 million and $99 million as of December 31, 2024 and 2023, respectively, including current portions of $9 million and $11 million for both years, respectively. Net periodic cost associated with these plans was income of $5 million, $6 million and $4 million for the years ended December 31, 2024, 2023 and 2022, respectively.

Weighted average assumptions used to determine benefit obligations for the other postretirement benefit plans at December 31 were as follows:

	U.S.						Canada
	2024		2023		2022		2024		2023		2022
Discount rate	5.52	%	5.10	%	5.45	%	4.50	%	4.50	%	5.00	%
Rate of compensation increase (a)	N/A		4.37	%	4.37	%	N/A		N/A		N/A

(a) The rate of compensation increase is not applicable for certain U.S. other postretirement benefit plans.

Weighted average assumptions used to determine net periodic benefit cost for the other postretirement benefit plans at December 31 were as follows:

	U.S.						Canada
	2024		2023		2022		2024		2023		2022
Discount rate	5.10	%	5.45	%	2.79	%	4.50	%	5.00	%	2.75	%
Rate of compensation increase (a)	4.37	%	4.37	%	4.37	%	N/A		N/A		N/A

(a) The rate of compensation increase is not applicable for certain U.S. other postretirement benefit plans.

Deferred Compensation Plans

Certain management employees may elect to defer the payment of all or a portion of their annual incentive compensation and certain long-term stock-based compensation into the company’s deferred compensation plan and/or the company’s deferred compensation stock plan. The employee becomes a general unsecured creditor of the company with respect to any amounts deferred.