

	Ownership			September 30,		December 31,
	interest			2020		2019
Affiliated companies accounted for by the equity method (1)	20%	to	50%	$	285	$	291
Other investments					69		43
Subtotal investment assets				$	354	$	334

Affiliated companies accounted for by the equity method
HSG (1)(2)		50%		$	—	$	270
Subtotal investment liabilities				$	—	$	270

(1)Amounts reflect Corning’s direct ownership interest in the affiliated companies at September 30, 2020 and December 31, 2019.

(2)At December 31, 2019, the negative carrying value of Corning’s investment in HSG was $270 million and recorded in other liabilities.

In 2016, Corning realigned its ownership interest in Dow Corning Corporation, exchanging its 50% interest in the joint venture between Corning and Dow Chemical Company for a newly formed company that holds a 49.9% interest in HS LLC and a 40.25% interest in HSO LLC which were recorded as equity method investments of Corning and were affiliated companies of HSG. DuPont de Nemours, Inc. (“DuPont”) subsequently undertook Dow Chemical Company’s ownership interest in HSG. HSG manufactures polysilicon products for the semiconductor and solar industries, and it is one of the world’s leading providers of ultra-pure polycrystalline silicon to the semiconductor industry.

HSG acquired DuPont’s Trichlorosilane (“TCS”) manufacturing assets, which was determined to be a business and recorded as a business combination. The fair value of the purchase price was $255 million. In conjunction with this acquisition, HSG settled its pre-existing contract dispute related to a long-term supply agreement with DuPont (“TCS Settlement”) for a contractual amount of $175 million, which was determined to have a fair value of $200 million. See Note 4 (HSG Transactions) to the consolidated financial statements for more information.

Immediately following these transactions, HSG redeemed DuPont’s entire ownership interest in HSG with a fair value of $250 million (“Redemption”). Upon completion of the Redemption, Corning obtained a controlling interest of 100% in Hemlock Semiconductor LLC and 80.5% in Hemlock Semiconductor Operations LLC and began consolidating HSG as of September 9, 2020.

HSG’s net income for the period ended September 8, 2020, included a pre-tax gain recorded in the second quarter of 2020, related to the settlement of a long-term supply agreement of approximately $165 million, partially offset by an inventory provision of approximately $44 million associated with the settlement of the agreement. Prior to the Redemption, in the third quarter of 2020, HSG recorded a pre-tax loss of $200 million resulting from the TCS Settlement as disclosed above. Corning’s share of the pre-tax loss was $81 million and recorded in equity in (losses) earnings of affiliated companies in the consolidated statements of income. Accordingly, Corning’s share of the net impact was an equity loss of $19 million.

HSG’s results of operations prior to the Redemption were as follows (in millions):



	Three months ended				Nine months ended
	September 30,				September 30,
	2020		2019		2020		2019
Statements of Operations (1):
Net sales	$	78	$	200	$	423	$	566
Gross profit	$	21	$	61	$	87	$	205
Net (loss) income	$	(192)	$	46	$	11	$	185
Net (loss) income attributable to HSG	$	(154)	$	42	$	44	$	165
Corning's equity in (losses) earnings of affiliated companies	$	(77)	$	21	$	22	$	81

Related party transactions:
Intercompany sales within HSG (included in net sales)	$	12	$	31	$	55	$	85