DOW Annual Report 2024, Page 103

Sadara In 2011, the Company and Saudi Arabian Oil Company formed Sadara -a joint venture between the two companies that constructed and operates a world-scale, fully integrated chemicals complex in Jubail Industrial City, Kingdom of Saudi Arabia. The Company has a 35 percent equity interest in this joint venture and continues to be responsible for marketing a significant portion of Sadara’s products through the Company’s established sales channels. In 2021, Dow and the Saudi Arabian Oil Company agreed to amarketing rights transition plan. Execution of the transition plan is ongoing and progressing towards aligning marketing rights and responsibilities to levels more consistent with each partner's equity ownership. This transition will not impact equity earnings, but is expected to reduce the Company's sales of Sadara products over the transition period. TheCompany’s investment in Sadara was $1,280 million less than Dow’s proportion ate shareof the carrying value of the underlying net assets held by Sadara at December 31, 2024 ($1,387 million less at December 31, 2023). This basis difference, which resulted from the 2019 impairment of the investment, is primarily attributed to the long-lived assets of Sadara and is being amortized over the remaining useful lives of the assets. At December 31,2024, the Company had a negative investment balance in Sadara of $517 million classified as "Other noncurrent obligations" (negative $128 million at December 31, 2023) in the Company’s consolidated balance sheets. The negative investment inSadaraChemicalCompany at December 31, 2024 is primarily due to the equity losses generated during the year.