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SEGMENT INFORMATION
 6 Months Ended
Jun. 28, 2020
Segment Reporting [Abstract]  
Segment Information SEGMENT INFORMATION
Our organizational structure is designed to ensure continued focus on North America, coupled with an emphasis on profitable growth in our focus international markets. Our business is primarily organized around geographic regions, which enables us to build processes for repeatable success in our global markets. As a result, we have defined our operating segments on a geographic basis, as this aligns with how our Chief Operating Decision Maker (“CODM”) manages our business, including resource allocation and performance assessment. Our North America business, which generates approximately 92% of our consolidated revenue, is our only reportable segment. None of our other operating segments meet the quantitative thresholds to qualify as reportable segments; therefore, these operating segments are combined and disclosed below as International and Other.
•North America - This segment is responsible for our traditional chocolate and non-chocolate confectionery market position, as well as our grocery and growing snacks market positions, in the United States and Canada. This includes developing and growing our business in chocolate and non-chocolate confectionery, pantry, food service and other snacking product lines.
•International and Other - International and Other is a combination of all other operating segments that are not individually material, including those geographic regions where we operate outside of North America.
We currently have operations and manufacture product in China, Mexico, Brazil, India and Malaysia, primarily for consumers in these regions, and also distribute and sell confectionery products in export markets of Asia, Latin America, Middle East, Europe, Africa and other regions. This segment also includes our global retail operations, including Hershey's Chocolate World stores in Hershey, Pennsylvania, New York City, Las Vegas, Niagara Falls (Ontario) and Singapore, as well as operations associated with licensing the use of certain of the Company's trademarks and products to third parties around the world.
For segment reporting purposes, we use “segment income” to evaluate segment performance and allocate resources. Segment income excludes unallocated general corporate administrative expenses, unallocated mark-to-market gains and losses on commodity derivatives, business realignment and impairment charges, acquisition-related costs and other unusual gains or losses that are not part of our measurement of segment performance. These items of our operating income are managed centrally at the corporate level and are excluded from the measure of segment income reviewed by the CODM as well the measure of segment performance used for incentive compensation purposes.
As discussed in Note 5, derivatives used to manage commodity price risk are not designated for hedge accounting treatment. These derivatives are recognized at fair market value with the resulting realized and unrealized (gains) losses recognized in unallocated derivative (gains) losses outside of the reporting segment results until the related inventory is sold, at which time the related gains and losses are reallocated to segment income. This enables us to align the derivative gains and losses with the underlying economic exposure being hedged and thereby eliminate the mark-to-market volatility within our reported segment income.
Certain manufacturing, warehousing, distribution and other activities supporting our global operations are integrated to maximize efficiency and productivity. As a result, assets and capital expenditures are not managed on a segment basis and are not included in the information reported to the CODM for the purpose of evaluating performance or allocating resources. We disclose depreciation and amortization that is generated by segment-specific assets, since these amounts are included within the measure of segment income reported to the CODM.
Our segment net sales and earnings were as follows:
Three Months EndedSix Months Ended
June 28, 2020June 30, 2019June 28, 2020June 30, 2019
Net sales:
North America$1,583,787  $1,568,040  $3,428,608  $3,374,998  
International and Other123,542  199,177  316,038  408,707  
Total$1,707,329  $1,767,217  $3,744,646  $3,783,705  
Segment income (loss):
North America$497,587  $470,898  $1,079,142  $1,035,659  
International and Other(3,969) 21,944  12,035  42,187  
Total segment income493,618  492,842  1,091,177  1,077,846  
Unallocated corporate expense (1)106,883  125,205  231,450  242,889  
Unallocated mark-to-market losses (gains) on commodity derivatives487  (53,552) 82,241  (25,585) 
Long-lived asset impairment charges (see Note 6)
1,600  4,741  9,143  4,741  
Costs associated with business realignment activities (see Note 9)
1,275  6,378  2,170  6,862  
Operating profit383,373  410,070  766,173  848,939  
Interest expense, net (see Note 4)
38,079  33,776  74,334  71,234  
Other (income) expense, net (see Note 18)
11,217  13,125  22,750  18,602  
Income before income taxes$334,077  $363,169  $669,089  $759,103  
(1)Includes centrally-managed (a) corporate functional costs relating to legal, treasury, finance, and human resources, (b) expenses associated with the oversight and administration of our global operations, including warehousing, distribution and manufacturing, information systems and global shared services, (c) non-cash stock-based compensation expense, (d) acquisition-related costs, and (e) other gains or losses that are not integral to segment performance.
Activity within the unallocated mark-to-market adjustment for commodity derivatives is as follows:
Three Months EndedSix Months Ended
June 28, 2020June 30, 2019June 28, 2020June 30, 2019
Net (gains) losses on mark-to-market valuation of commodity derivative positions recognized in income$(2,624) $(55,531) $74,468  $(28,890) 
Net gains on commodity derivative positions reclassified from unallocated to segment income 3,111  1,979  7,773  3,305  
Net losses (gains) on mark-to-market valuation of commodity derivative positions recognized in unallocated derivative losses (gains)$487  $(53,552) $82,241  $(25,585) 
As of June 28, 2020, the cumulative amount of mark-to-market losses on commodity derivatives that have been recognized in our consolidated cost of sales and not yet allocated to reportable segments was $13,274. Based on our forecasts of the timing of the recognition of the underlying hedged items, we expect to reclassify net pretax losses on commodity derivatives of $165 to segment operating results in the next twelve months.

Depreciation and amortization expense included within segment income presented above is as follows:
Three Months EndedSix Months Ended
June 28, 2020June 30, 2019June 28, 2020June 30, 2019
North America$54,379  $55,137  $108,081  $109,082  
International and Other7,037  7,314  14,246  14,664  
Corporate10,484  9,566  20,197  20,600  
Total$71,900  $72,017  $142,524  $144,346  

Additional information regarding our net sales disaggregated by geographical region is as follows:

Three Months EndedSix Months Ended
June 28, 2020June 30, 2019June 28, 2020June 30, 2019
Net sales:
United States$1,504,266  $1,493,283  $3,271,542  $3,221,543  
All other countries203,063  273,934  473,104  562,162  
Total$1,707,329  $1,767,217  $3,744,646  $3,783,705  
The majority of our products are confectionery or confectionery-based and include chocolate and non-chocolate confectionery products, gum and mint refreshment products, spreads, snack bites and mixes, as well as pantry items such as baking ingredients, toppings and sundae syrups. Our snacks portfolio includes ready-to-eat popcorn, baked and trans fat free snacks, protein bars and other better-for-you snacks. Additional information regarding our net sales disaggregated by product line is as follows:
Three Months EndedSix Months Ended
June 28, 2020June 30, 2019June 28, 2020June 30, 2019
Net sales:
Confectionery and confectionery-based portfolio$1,592,181  $1,663,225  $3,500,415  $3,587,155  
Snacks portfolio115,148  103,992  244,231  196,550  
Total$1,707,329  $1,767,217  $3,744,646  $3,783,705