NONCONSOLIDATED AFFILIATES AND RELATED COMPANY TRANSACTIONS

The Company’s investments in companies accounted for using the equity method (“nonconsolidated affiliates”) were $3,405 million at December 31, 2011 and $3,453 million at December 31, 2010. At December 31, 2011, the carrying amount of the Company’s investments in nonconsolidated affiliates was $80 million more than its share of the investees’ net assets, exclusive of additional differences for Dow Corning Corporation (“Dow Corning”) and MEGlobal, which are discussed separately below. At December 31, 2010, the carrying amount of the Company’s investments in nonconsolidated affiliates was $74 million more than its share of the investees’ net assets, exclusive of additional differences for Dow Corning, MEGlobal and Equipolymers. Dividends received from the Company’s nonconsolidated affiliates were $1,016 million in 2011, $668 million in 2010 and $690 million in 2009.

At December 31, 2011 and December 31, 2010, the Company’s investment in Dow Corning was $227 million less than the Company’s proportionate share of Dow Corning’s underlying net assets. This amount is considered a permanent difference related to the other-than-temporary decline in the Company's investment in Dow Corning, triggered by Dow Corning's May 15, 1995 bankruptcy filing. Dow Corning emerged from bankruptcy in 2004 (see Note N).

At December 31, 2010, the Company’s 50 percent investment in Equipolymers was $7 million less than the Company’s proportionate share of Equipolymers’ underlying net assets. This amount represented the difference between the value of certain assets of the joint venture and the Company’s related valuation on a U.S. GAAP basis, all of which was being amortized over the remaining useful lives of the assets. In the fourth quarter of 2009, the Company recognized an impairment loss of $65 million related to its investment in Equipolymers. On July 1, 2011, Equipolymers was merged into MEGlobal, with MEGlobal continuing as the surviving entity. In the third quarter of 2011, the Company received $115 million on a previously impaired note receivable related to its investment in Equipolymers and recognized $86 million in income, included in "Equity in earnings of nonconsolidated affiliates" in the consolidated statements of income and reflected in Performance Plastics.

At December 31, 2011, the Company’s investment in MEGlobal was $199 million less than the Company’s proportionate share of MEGlobal’s underlying net assets ($250 million less at December 31, 2010). This amount represents the difference between the value of certain assets of the joint venture and the Company’s related valuation on a U.S. GAAP basis, of which $60 million (including $6 million related to Equipolymers) is being amortized over the remaining useful lives of the assets and $139 million is considered to be a permanent difference.

On October 30, 2011, the Company and Saudi Arabian Oil Company (“Saudi Aramco”) formed a joint venture, Sadara Chemical Company (“Sadara”), to build and operate a world-scale, fully integrated chemicals complex in Jubail Industrial City, Kingdom of Saudi Arabia. The Company and Saudi Aramco have jointly funded the development of this project to date. However, formal contribution of the development costs to Sadara will not occur until 2012. At December 31, 2011, the Company's cumulative investment in the development costs since inception of $824 million is recorded in “Noncurrent receivables” in the consolidated balance sheets. With the formation of the joint venture, the Company's investment in the Sadara project in the fourth quarter of 2011 is included in “Investments in and loans to nonconsolidated affiliates” in the consolidated statements of cash flows. Prior to the fourth quarter of 2011, the Company's investment in the Sadara project was included in “Investments in consolidated companies, net of cash acquired” in the consolidated statements of cash flows.

The Company’s investment in Americas Styrenics LLC was sold on June 17, 2010, as part of the divestiture of Styron. See Note E for information regarding this divestiture and divestitures of the Company’s investments in two additional nonconsolidated affiliates in 2009.

All of the nonconsolidated affiliates in which the Company has investments are privately held companies; therefore, quoted market prices are not available.

Transactions with nonconsolidated affiliates and balances due to and due from these entities were not material to the consolidated financial statements.

Principal Nonconsolidated Affiliates

Dow had an ownership interest in 69 nonconsolidated affiliates at December 31, 2011 (72 at December 31, 2010). The Company's principal nonconsolidated affiliates and its ownership interest (direct and indirect) for each at December 31, 2011, 2010 and 2009 are as follows:



Principal Nonconsolidated Affiliates at December 31	Ownership Interest
	2011		2010		2009
Americas Styrenics LLC (1)	—		—		50	%
Compañía Mega S.A.	28	%	28	%	28	%
Dow Corning Corporation	50	%	50	%	50	%
EQUATE Petrochemical Company K.S.C.	42.5	%	42.5	%	42.5	%
Equipolymers (2)	—		50	%	50	%
The Kuwait Olefins Company K.S.C.	42.5	%	42.5	%	42.5	%
MEGlobal (2)	50	%	50	%	50	%
The SCG-Dow Group:
Siam Polyethylene Company Limited	49	%	49	%	49	%
Siam Polystyrene Company Limited	50	%	50	%	50	%
Siam Styrene Monomer Co., Ltd.	50	%	50	%	50	%
Siam Synthetic Latex Company Limited	50	%	50	%	50	%
Univation Technologies, LLC	50	%	50	%	50	%

(1) On June 17, 2010, the Company completed the sale of its ownership interest in Americas Styrenics LLC.

(2) On July 1, 2011, Equipolymers was merged into MEGlobal.

The Company’s investment in its principal nonconsolidated affiliates was $2,546 million at December 31, 2011 and $2,635 million at December 31, 2010. Equity earnings from these companies were $1,132 million in 2011, $1,032 million in 2010 and $587 million in 2009. The summarized financial information presented below represents the combined accounts (at 100 percent) of the principal nonconsolidated affiliates.



Summarized Balance Sheet Information at December 31
In millions	2011		2010
Current assets	$	8,823	$	8,357
Noncurrent assets	14,966		14,717
Total assets	$	23,789	$	23,074
Current liabilities	$	4,376	$	4,338
Noncurrent liabilities	12,045		11,345
Total liabilities	$	16,421	$	15,683
Noncontrolling interests	$	789	$	647



Summarized Income Statement Information
In millions	2011		2010 (1)		2009 (2)
Sales	$	16,396	$	14,702	$	12,590
Gross profit	$	4,176	$	3,833	$	2,910
Net income	$	2,470	$	2,189	$	1,281


(1)	The summarized income statement information for 2010 includes the results for Americas Styrenics LLC through June 17, 2010.


(2)	The summarized income statement information for 2009 includes the results for the OPTIMAL Group of Companies through September 30, 2009; see Note E.

The Company has service agreements with some of these entities, including contracts to manage the operations of manufacturing sites and the construction of new facilities; licensing and technology agreements; and marketing, sales, purchase and lease agreements.

Excess ethylene glycol produced in Dow’s plants in the United States and Europe is sold to MEGlobal and represented 1 percent of total net sales in 2011 (1 percent of total net sales in 2010 and 1 percent of total net sales in 2009). In addition, the Company sells ethylene to MEGlobal as a raw material for its ethylene glycol plants in Canada. Sales of ethylene and ethylene glycol to MEGlobal are reflected in the Feedstocks and Energy segment and represented 5 percent of the segment's sales in 2011 (6 percent in 2010 and 7 percent in 2009).