Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | |||
Dec. 31, 2013 | Jun. 28, 2013 | Feb. 21, 2014 | Feb. 21, 2014 | |
Common Stock | Class B Common Stock | |||
Document Information [Line Items] | ' | ' | ' | ' |
Document Type | '10-K | ' | ' | ' |
Amendment Flag | 'false | ' | ' | ' |
Document Period End Date | 31-Dec-13 | ' | ' | ' |
Document Fiscal Year Focus | '2013 | ' | ' | ' |
Document Fiscal Period Focus | 'FY | ' | ' | ' |
Trading Symbol | 'WSO | ' | ' | ' |
Entity Registrant Name | 'WATSCO INC | ' | ' | ' |
Entity Central Index Key | '0000105016 | ' | ' | ' |
Current Fiscal Year End Date | '--12-31 | ' | ' | ' |
Entity Well-known Seasoned Issuer | 'Yes | ' | ' | ' |
Entity Current Reporting Status | 'Yes | ' | ' | ' |
Entity Voluntary Filers | 'No | ' | ' | ' |
Entity Filer Category | 'Large Accelerated Filer | ' | ' | ' |
Entity Common Stock, Shares Outstanding | ' | ' | 30,046,979 | 4,762,288 |
Entity Public Float | ' | $2,159,000,000 | ' | ' |
Consolidated_Statements_of_Inc
Consolidated Statements of Income (USD $) | 12 Months Ended | ||||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | ||
Revenues | $3,743,330 | [1] | $3,431,712 | [1] | $2,977,759 |
Cost of sales | 2,844,077 | 2,617,317 | 2,249,465 | ||
Gross profit | 899,253 | 814,395 | 728,294 | ||
Selling, general and administrative expenses | 628,044 | 589,487 | 529,244 | ||
Operating income | 271,209 | 224,908 | 199,050 | ||
Interest expense, net | 5,830 | 4,665 | 4,458 | ||
Income before income taxes | 265,379 | 220,243 | 194,592 | ||
Income taxes | 77,660 | 62,642 | 56,850 | ||
Net income | 187,719 | 157,601 | 137,742 | ||
Less: net income attributable to noncontrolling interest | 59,996 | 54,267 | 47,292 | ||
Net income attributable to Watsco, Inc. | $127,723 | $103,334 | $90,450 | ||
Earnings per share for Common and Class B common stock: | ' | ' | ' | ||
Basic | $3.69 | [2] | $2.70 | [2],[3] | $2.75 |
Diluted | $3.68 | [2] | $2.70 | [2],[3] | $2.74 |
[1] | Sales of residential central air conditioners, heating equipment and parts and supplies are seasonal. Demand related to the residential central air conditioning replacement market is typically highest in the second and third quarters and demand for heating equipment is usually highest in the fourth quarter. Demand related to the new construction sectors throughout most of the markets is fairly consistent during the year, except for dependence on housing completions and related weather and economic conditions. | ||||
[2] | Quarterly and year-to-date earnings per share are calculated on an individual basis; therefore, the sum of earnings per share amounts for the quarters may not equal earnings per share amounts for the year. | ||||
[3] | On October 31, 2012, we paid a special dividend of $5.00 per share of Common and Class B common stock that resulted in a $0.37 per share and $0.33 per share reduction in diluted earnings per share for the quarter and year ended December 31, 2012, respectively. |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive Income (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Net income | $187,719 | $157,601 | $137,742 |
Other comprehensive (loss) income, net of tax | ' | ' | ' |
Foreign currency translation adjustment | -16,365 | -3,191 | ' |
Unrealized gain on available-for-sale securities arising during the period | 24 | 35 | 3 |
Unrealized gain on derivative instrument arising during the period | ' | ' | 238 |
Other comprehensive (loss) income | -16,341 | -3,156 | 241 |
Comprehensive income | 171,378 | 154,445 | 137,983 |
Less: comprehensive income attributable to noncontrolling interest | 53,027 | 52,861 | 47,292 |
Comprehensive income attributable to Watsco, Inc. | $118,351 | $101,584 | $90,691 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Current assets: | ' | ' |
Cash and cash equivalents | $19,478 | $73,770 |
Accounts receivable, net | 399,565 | 377,655 |
Inventories | 583,154 | 546,083 |
Other current assets | 18,905 | 17,943 |
Total current assets | 1,021,102 | 1,015,451 |
Property and equipment, net | 45,418 | 42,842 |
Goodwill | 392,610 | 397,262 |
Intangible assets, net | 203,843 | 219,501 |
Other assets | 6,558 | 6,999 |
Assets, Total | 1,669,531 | 1,682,055 |
Current liabilities: | ' | ' |
Current portion of other long-term obligations | 107 | 4 |
Accounts payable | 141,104 | 184,957 |
Accrued expenses and other current liabilities | 102,295 | 97,397 |
Total current liabilities | 243,506 | 282,358 |
Long-term obligations: | ' | ' |
Borrowings under revolving credit agreement | 230,044 | 316,182 |
Other long-term obligations, net of current portion | 513 | 14 |
Total long-term obligations | 230,557 | 316,196 |
Deferred income taxes and other liabilities | 68,076 | 61,461 |
Commitments and contingencies | ' | ' |
Watsco, Inc. shareholders' equity: | ' | ' |
Preferred stock, $0.50 par value, 10,000,000 shares authorized; no shares issued | ' | ' |
Paid-in capital | 606,384 | 592,820 |
Accumulated other comprehensive loss, net of tax | -11,474 | -2,102 |
Retained earnings | 339,362 | 251,475 |
Treasury stock, at cost, 6,322,650 shares of Common stock and 48,263 shares of Class B common stock at both December 31, 2013 and 2012 | -114,425 | -114,425 |
Total Watsco, Inc. shareholders' equity | 840,396 | 748,214 |
Noncontrolling interest | 286,996 | 273,826 |
Total shareholders' equity | 1,127,392 | 1,022,040 |
Total liabilities and shareholders' equity | 1,669,531 | 1,682,055 |
Common Stock | ' | ' |
Watsco, Inc. shareholders' equity: | ' | ' |
Common stock, $0.50 par value | 18,182 | 18,131 |
Class B Common Stock | ' | ' |
Watsco, Inc. shareholders' equity: | ' | ' |
Common stock, $0.50 par value | $2,367 | $2,315 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
Preferred stock, par value | $0.50 | $0.50 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Common Stock | ' | ' |
Common stock, par value | $0.50 | $0.50 |
Common stock, shares authorized | 60,000,000 | 60,000,000 |
Common stock, shares outstanding | 36,364,297 | 36,262,023 |
Treasury stock, shares | 6,322,650 | 6,322,650 |
Class B Common Stock | ' | ' |
Common stock, par value | $0.50 | $0.50 |
Common stock, shares authorized | 10,000,000 | 10,000,000 |
Common stock, shares outstanding | 4,733,737 | 4,630,200 |
Treasury stock, shares | 48,263 | 48,263 |
Consolidated_Statements_of_Sha
Consolidated Statements of Shareholders' Equity (USD $) | Total | Common Stock, Class B Common Stock and Preferred Stock | Paid-In Capital | Accumulated Other Comprehensive Loss | Retained Earnings | Treasury Stock | Noncontrolling Interest |
In Thousands, except Share data | |||||||
Beginning balance at Dec. 31, 2010 | $928,896 | $19,410 | $472,883 | ($593) | $387,186 | ($114,425) | $164,435 |
Beginning balance (in shares) at Dec. 31, 2010 | ' | 32,449,425 | ' | ' | ' | ' | ' |
Net income | 137,742 | ' | ' | ' | 90,450 | ' | 47,292 |
Other comprehensive income (loss) | 241 | ' | ' | 241 | ' | ' | ' |
Issuances of non-vested (restricted) shares of common stock (in shares) | ' | 429,602 | ' | ' | ' | ' | ' |
Issuances of non-vested (restricted) shares of common stock | ' | 215 | -215 | ' | ' | ' | ' |
Forfeitures of non-vested (restricted) shares of common stock (in shares) | ' | -30,500 | ' | ' | ' | ' | ' |
Forfeitures of non-vested (restricted) shares of common stock | ' | -15 | 15 | ' | ' | ' | ' |
Common stock contribution to 401(k) plan (in shares) | ' | 27,240 | ' | ' | ' | ' | ' |
Common stock contribution to 401(k) plan | 1,718 | 14 | 1,704 | ' | ' | ' | ' |
Stock issuances from exercise of stock options and employee stock purchase plan (in shares) | ' | 139,717 | ' | ' | ' | ' | ' |
Stock issuances from exercise of stock options and employee stock purchase plan | 5,553 | 69 | 5,484 | ' | ' | ' | ' |
Retirement of common stock (in shares) | ' | -10,143 | ' | ' | ' | ' | ' |
Retirement of common stock | -617 | -5 | -612 | ' | ' | ' | ' |
Share-based compensation | 6,340 | ' | 6,340 | ' | ' | ' | ' |
Excess tax benefit from share-based compensation | 859 | ' | 859 | ' | ' | ' | ' |
Cash dividends declared and paid on Common and Class B common stock | -73,276 | ' | ' | ' | -73,276 | ' | ' |
Return of capital contribution to noncontrolling interest | -32,000 | ' | ' | ' | ' | ' | -32,000 |
Fair value of noncontrolling interest | 34,919 | ' | ' | ' | ' | ' | 34,919 |
Share of carrying value of our locations contributed to joint venture | 7,708 | ' | ' | ' | ' | ' | 7,708 |
Fair value increment over carrying value of locations contributed to joint venture | 7,061 | ' | 7,061 | ' | ' | ' | ' |
Distributions to noncontrolling interest | -23,434 | ' | ' | ' | ' | ' | -23,434 |
Ending balance at Dec. 31, 2011 | 1,001,710 | 19,688 | 493,519 | -352 | 404,360 | -114,425 | 198,920 |
Ending balance (in shares) at Dec. 31, 2011 | ' | 33,005,341 | ' | ' | ' | ' | ' |
Net income | 157,601 | ' | ' | ' | 103,334 | ' | 54,267 |
Other comprehensive income (loss) | -3,156 | ' | ' | -1,750 | ' | ' | -1,406 |
Issuances of non-vested (restricted) shares of common stock (in shares) | ' | 111,301 | ' | ' | ' | ' | ' |
Issuances of non-vested (restricted) shares of common stock | ' | 56 | -56 | ' | ' | ' | ' |
Common stock contribution to 401(k) plan (in shares) | ' | 26,991 | ' | ' | ' | ' | ' |
Common stock contribution to 401(k) plan | 1,772 | 13 | 1,759 | ' | ' | ' | ' |
Stock issuances from exercise of stock options and employee stock purchase plan (in shares) | ' | 157,664 | ' | ' | ' | ' | ' |
Stock issuances from exercise of stock options and employee stock purchase plan | 7,163 | 79 | 7,084 | ' | ' | ' | ' |
Retirement of common stock (in shares) | ' | -29,987 | ' | ' | ' | ' | ' |
Retirement of common stock | -2,229 | -15 | -2,214 | ' | ' | ' | ' |
Share-based compensation | 7,716 | ' | 7,716 | ' | ' | ' | ' |
Excess tax benefit from share-based compensation | 1,079 | ' | 1,079 | ' | ' | ' | ' |
Cash dividends declared and paid on Common and Class B common stock | -256,219 | ' | ' | ' | -256,219 | ' | ' |
Common stock issued for Carrier Enterprise III (in shares) | ' | 1,250,000 | ' | ' | ' | ' | ' |
Common stock issued for Carrier Enterprise III | 93,250 | 625 | 92,625 | ' | ' | ' | ' |
Fair value of noncontrolling interest in Carrier Enterprise III | 104,244 | ' | ' | ' | ' | ' | 104,244 |
Decrease in noncontrolling interest in Carrier Enterprise I | -51,881 | ' | -8,692 | ' | ' | ' | -43,189 |
Distributions to noncontrolling interest | -39,010 | ' | ' | ' | ' | ' | -39,010 |
Ending balance at Dec. 31, 2012 | 1,022,040 | 20,446 | 592,820 | -2,102 | 251,475 | -114,425 | 273,826 |
Ending balance (in shares) at Dec. 31, 2012 | ' | 34,521,310 | ' | ' | ' | ' | ' |
Net income | 187,719 | ' | ' | ' | 127,723 | ' | 59,996 |
Other comprehensive income (loss) | -16,341 | ' | ' | -9,372 | ' | ' | -6,969 |
Issuances of non-vested (restricted) shares of common stock (in shares) | ' | 124,043 | ' | ' | ' | ' | ' |
Issuances of non-vested (restricted) shares of common stock | ' | 62 | -62 | ' | ' | ' | ' |
Forfeitures of non-vested (restricted) shares of common stock (in shares) | ' | -10,000 | ' | ' | ' | ' | ' |
Forfeitures of non-vested (restricted) shares of common stock | ' | -5 | 5 | ' | ' | ' | ' |
Common stock contribution to 401(k) plan (in shares) | ' | 22,551 | ' | ' | ' | ' | ' |
Common stock contribution to 401(k) plan | 1,689 | 11 | 1,678 | ' | ' | ' | ' |
Stock issuances from exercise of stock options and employee stock purchase plan (in shares) | ' | 87,193 | ' | ' | ' | ' | ' |
Stock issuances from exercise of stock options and employee stock purchase plan | 3,384 | 44 | 3,340 | ' | ' | ' | ' |
Retirement of common stock (in shares) | ' | -17,976 | ' | ' | ' | ' | ' |
Retirement of common stock | -1,677 | -9 | -1,668 | ' | ' | ' | ' |
Share-based compensation | 8,760 | ' | 8,760 | ' | ' | ' | ' |
Excess tax benefit from share-based compensation | 1,511 | ' | 1,511 | ' | ' | ' | ' |
Cash dividends declared and paid on Common and Class B common stock | -39,836 | ' | ' | ' | -39,836 | ' | ' |
Distributions to noncontrolling interest | -39,857 | ' | ' | ' | ' | ' | -39,857 |
Ending balance at Dec. 31, 2013 | $1,127,392 | $20,549 | $606,384 | ($11,474) | $339,362 | ($114,425) | $286,996 |
Ending balance (in shares) at Dec. 31, 2013 | ' | 34,727,121 | ' | ' | ' | ' | ' |
Consolidated_Statements_of_Sha1
Consolidated Statements of Shareholders' Equity (Parenthetical) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Cash dividends declared and paid, common stock | $1.15 | $7.48 | $2.23 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Cash flows from operating activities: | ' | ' | ' |
Net income | $187,719 | $157,601 | $137,742 |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' | ' |
Depreciation and amortization | 17,706 | 15,911 | 11,725 |
Share-based compensation | 9,967 | 7,939 | 6,663 |
Deferred income tax provision | 8,589 | 6,724 | 8,310 |
Provision for doubtful accounts | 961 | 1,826 | 2,374 |
Non-cash contribution for 401(k) plan | 1,689 | 1,772 | 1,718 |
(Gain) loss on sale of property and equipment | -156 | 103 | 171 |
Excess tax benefits from share-based compensation | -1,511 | -1,079 | -859 |
Changes in operating assets and liabilities, net of effects of acquisitions: | ' | ' | ' |
Accounts receivable | -25,846 | -5,752 | 11,987 |
Inventories | -40,575 | -26,652 | -22,489 |
Accounts payable and other liabilities | -7,256 | 11,873 | -98,611 |
Other, net | -1,018 | 3,077 | 2,721 |
Net cash provided by operating activities | 150,269 | 173,343 | 61,452 |
Cash flows from investing activities: | ' | ' | ' |
Capital expenditures | -14,580 | -12,317 | -13,925 |
Proceeds from sale of property and equipment | 323 | 504 | 737 |
Business acquisitions, net of cash acquired | ' | -80,479 | -43,455 |
Net cash used in investing activities | -14,257 | -92,292 | -56,643 |
Cash flows from financing activities: | ' | ' | ' |
Distributions to noncontrolling interest | -69,494 | -16,003 | -26,469 |
Dividends on Common and Class B common stock | -39,836 | -256,219 | -73,276 |
Payment of fees related to revolving credit agreement | -458 | -2,116 | -38 |
Purchase of additional ownership from noncontrolling interest | ' | -51,881 | ' |
Return of capital contribution to noncontrolling interest | ' | ' | -32,000 |
Net proceeds from (repayments of) other long-term obligations | 602 | -1 | -69 |
Excess tax benefits from share-based compensation | 1,511 | 1,079 | 859 |
Net proceeds from issuances of common stock | 2,185 | 5,312 | 5,359 |
Net cash used in financing activities | -189,049 | -23,081 | -115,634 |
Effect of foreign exchange rate changes on cash and cash equivalents | -1,255 | 127 | ' |
Net (decrease) increase in cash and cash equivalents | -54,292 | 58,097 | -110,825 |
Cash and cash equivalents at beginning of year | 73,770 | 15,673 | 126,498 |
Cash and cash equivalents at end of year | 19,478 | 73,770 | 15,673 |
Previous Revolving Credit Facility | ' | ' | ' |
Cash flows from financing activities: | ' | ' | ' |
Net (repayments) proceeds under revolving credit agreement | ' | -20,000 | 10,000 |
Current Revolving Credit Facility | ' | ' | ' |
Cash flows from financing activities: | ' | ' | ' |
Net (repayments) proceeds under revolving credit agreement | ($83,559) | $316,748 | ' |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 12 Months Ended | ||
Dec. 31, 2013 | |||
Summary of Significant Accounting Policies | ' | ||
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||
Nature of Operations | |||
Watsco, Inc. and its subsidiaries (collectively, “Watsco,” which may be referred to as “we”, “us” or “our”) was incorporated in Florida in 1956 and is the largest distributor of air conditioning, heating and refrigeration equipment and related parts and supplies (“HVAC/R”) in the HVAC/R distribution industry. At December 31, 2013, we operated from 569 locations in 38 U.S. states, Canada, Mexico and Puerto Rico with additional market coverage on an export basis to Latin America and the Caribbean. | |||
Basis of Consolidation | |||
The consolidated financial statements include the accounts of Watsco and all of its wholly owned subsidiaries and include the accounts of three joint ventures with Carrier Corporation (“Carrier”), in each of which Watsco maintains a controlling interest. All significant intercompany balances and transactions have been eliminated in consolidation. | |||
Reclassifications | |||
Certain reclassifications of prior year amounts have been made to conform to the 2013 presentation. These reclassifications had no effect on net income or earnings per share as previously reported. | |||
Foreign Currency Translation and Transactions | |||
Our operations in Mexico consider their functional currency to be the U.S. dollar because the majority of their transactions are denominated in U.S. dollars. Gains or losses resulting from transactions denominated in Mexican pesos are recognized in earnings within selling, general and administrative expenses in our consolidated statements of income. | |||
The functional currency of our operations in Canada is the Canadian dollar. Foreign currency denominated assets and liabilities are translated into U.S. dollars at the exchange rates in effect at the balance sheet date, and income and expense items are translated at the average exchange rates in effect during the applicable period. The aggregate effect of foreign currency translation is recorded in accumulated other comprehensive loss in our consolidated balance sheets. Our net investment in our Canadian operations is recorded at the historical rate and the resulting foreign currency translation adjustments are included in accumulated other comprehensive loss in our consolidated balance sheets. Gains or losses resulting from transactions denominated in U.S. dollars are recognized in earnings within selling, general and administrative expenses in our consolidated statements of income. | |||
Use of Estimates | |||
The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses for the reporting period. Significant estimates include valuation reserves for accounts receivable, inventories and income taxes, reserves related to self-insurance programs and the valuation of goodwill and indefinite lived intangible assets. While we believe that these estimates are reasonable, actual results could differ from such estimates. | |||
Cash Equivalents | |||
All highly liquid instruments purchased with original maturities of three months or less are considered to be cash equivalents. | |||
Accounts Receivable and Allowance for Doubtful Accounts | |||
Accounts receivable primarily consist of trade receivables due from customers and are stated at the invoiced amount less an allowance for doubtful accounts. An allowance for doubtful accounts is maintained for estimated losses resulting from the inability of customers to make required payments. When preparing these estimates, we consider a number of factors, including the aging of a customer’s account, past transactions with customers, creditworthiness of specific customers, historical trends and other information. Upon determination that an account is uncollectible, the receivable balance is written off. At December 31, 2013 and 2012, the allowance for doubtful accounts totaled $5,737 and $10,473, respectively. | |||
Inventories | |||
Inventories consist of air conditioning, heating and refrigeration equipment and related parts and supplies and are valued at the lower of cost or market using a weighted-average cost basis and the first-in, first-out methods. As part of the valuation process, inventories are adjusted to reflect excess, slow-moving and damaged inventories at their estimated net realizable value. Inventory policies are reviewed periodically, reflecting current risks, trends and changes in industry conditions. A reserve for estimated inventory shrinkage is also maintained to consider inventory shortages determined from cycle counts and physical inventories. | |||
Vendor Rebates | |||
We have arrangements with several vendors that provide rebates payable to us when we achieve any of a number of measures, generally related to the volume level of purchases. We account for such rebates as a reduction of inventory until we sell the product, at which time such rebates are reflected as a reduction of cost of sales in our consolidated statements of income. Throughout the year, we estimate the amount of the rebate based on our estimate of purchases to date relative to the purchase levels that mark our progress toward earning the rebates. We continually revise our estimates of earned vendor rebates based on actual purchase levels. At December 31, 2013 and 2012, we had $9,333 and $8,015, respectively, of rebates recorded as a reduction of inventory. Substantially all vendor rebate receivables are collected within three months immediately following the end of the year. | |||
Marketable Securities | |||
Investments in marketable equity securities are classified as available-for-sale and are included in other assets in our consolidated balance sheets. These equity securities are recorded at fair value using the specific identification method with unrealized holding losses, net of deferred taxes, included in accumulated other comprehensive loss within shareholders’ equity. Dividend and interest income are recognized in the statements of income when earned. | |||
Property and Equipment | |||
Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization of property and equipment is computed using the straight-line method. Buildings and improvements are depreciated or amortized over estimated useful lives ranging from 3-40 years. Leasehold improvements are amortized over the shorter of the respective lease terms or estimated useful lives. Estimated useful lives for other depreciable assets range from 3-10 years. | |||
Goodwill and Other Intangible Assets | |||
Goodwill is recorded when the purchase price paid for an acquisition exceeds the fair value of the net identified tangible and intangible assets acquired. We evaluate goodwill for impairment annually or more frequently when an event occurs or circumstances change that indicate that the carrying value may not be recoverable. We test goodwill for impairment by first comparing the fair value of our reporting unit to its carrying value. If the fair value is determined to be less than the carrying value, a second step is performed to measure the amount of impairment loss. | |||
Other intangible assets primarily consist of the value of trade names and trademarks, distributor agreements, customer relationships and non-compete agreements. Indefinite lived intangibles not subject to amortization are assessed for impairment at least annually, or more frequently if events or changes in circumstances indicate they may be impaired, by comparing the fair value of the intangible asset to its carrying amount to determine if a write-down to fair value is required. Finite lived intangible assets are amortized using the straight-line method over their respective estimated useful lives. | |||
We perform our annual impairment tests each year and have determined there to be no impairment for any of the periods presented. There were no events or circumstances identified from the date of our assessment that would require an update to our annual impairment tests. | |||
Long-Lived Assets | |||
Long-lived assets, other than goodwill, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. Recoverability is evaluated by determining whether the amortization of the balance over its remaining life can be recovered through undiscounted future operating cash flows. We measure the impairment loss based on projected discounted cash flows using a discount rate reflecting the average cost of funds and compared to the asset’s carrying value. As of December 31, 2013, there were no such events or circumstances. | |||
Fair Value Measurements | |||
We carry various assets and liabilities at fair value in the consolidated balance sheets. Fair value is defined as the price that would be received for an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. Fair value measurements are classified based on the following fair value hierarchy: | |||
Level 1 | Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis. | ||
Level 2 | Observable inputs other than Level 1 prices such as quoted prices in active markets for similar assets or liabilities; quoted prices in markets that are not active; or model-driven valuations or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. | ||
Level 3 | Unobservable inputs for the asset or liability. These inputs reflect our own assumptions about the assumptions a market participant would use in pricing the asset or liability. | ||
Revenue Recognition | |||
Revenue primarily consists of sales of air conditioning, heating and refrigeration equipment and related parts and supplies and is recorded when shipment of products or delivery of services has occurred. Substantially all customer returns relate to products that are returned under warranty obligations underwritten by manufacturers, effectively mitigating our risk of loss for customer returns. Taxes collected from our customers and remitted to governmental authorities are presented in our consolidated statements of income on a net basis. | |||
Advertising Costs | |||
Advertising costs are expensed as incurred. Advertising expense for the years ended December 31, 2013, 2012 and 2011, was $22,418, $23,730 and $25,052, respectively. | |||
Shipping and Handling | |||
Shipping and handling costs associated with inbound freight are capitalized to inventories and relieved through cost of sales as inventories are sold. Shipping and handling costs associated with the delivery of products is included in selling, general and administrative expenses. Shipping and handling costs for the years ended December 31, 2013, 2012 and 2011, was $39,395, $37,676 and $30,234, respectively. | |||
Share-Based Compensation | |||
The fair value of stock option and non-vested (restricted) stock awards are expensed on a straight-line basis over the vesting period of the awards. Share-based compensation expense is included in selling, general and administrative expenses in our consolidated statements of income. Cash flows from the tax benefits resulting from tax deductions in excess of the compensation expense recognized for those options (windfall tax benefits) are classified as financing cash flows. Tax benefits resulting from tax deductions in excess of share-based compensation expense recognized are credited to paid-in capital in the consolidated balance sheets. | |||
Income Taxes | |||
We record United States federal, state and foreign income taxes currently payable, as well as deferred taxes due to temporary differences between reporting income and expenses for financial statement purposes versus tax purposes. Deferred tax assets and liabilities reflect the temporary differences between the financial statement and income tax basis of assets and liabilities. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in tax rates is recognized as income or expense in the period that includes the enactment date. We and our eligible subsidiaries file a consolidated United States federal income tax return. As income tax returns are generally not filed until well after the closing process for the December 31 financial statements is complete, the amounts recorded at December 31 reflect estimates of what the final amounts will be when the actual income tax returns are filed for that calendar year. In addition, estimates are often required with respect to, among other things, the appropriate state income tax rates to use in the various states that we and our subsidiaries are required to file, the potential utilization of operating loss carryforwards and valuation allowances required, if any, for tax assets that may not be realizable in the future. | |||
We recognize the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the “more-likely-than-not” threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the relevant tax authority. | |||
Earnings per Share | |||
We compute earnings per share using the two-class method. The two-class method of computing earnings per share is an earnings allocation formula that determines earnings per share for common stock and any participating securities according to dividends declared (whether paid or unpaid) and participation rights in undistributed earnings. Shares of our non-vested (restricted) stock are considered participating securities because these awards contain a non-forfeitable right to dividends irrespective of whether the awards ultimately vest. Under the two-class method, earnings per common share for our Common and Class B common stock is computed by dividing the sum of distributed earnings to common shareholders and undistributed earnings allocated to common shareholders by the weighted-average number of shares of Common and Class B common stock outstanding for the period. In applying the two-class method, undistributed earnings are allocated to Common stock, Class B common stock and participating securities based on the weighted-average shares outstanding during the period. | |||
Diluted earnings per share reflects the dilutive effect of potential common shares from stock options. The dilutive effect of outstanding stock options is computed using the treasury stock method, which assumes any proceeds that could be obtained upon the exercise of stock options, would be used to purchase common stock at the average market price for the period. The assumed proceeds include the purchase price the optionee pays, the windfall tax benefit that we receive upon assumed exercise and the unrecognized compensation expense at the end of each period. | |||
Derivative Instruments | |||
All derivatives, whether designated in hedging relationships or not, are required to be recorded on the balance sheet at fair value. If the derivative is designated as a fair value hedge, the changes in the fair value of the derivative and of the hedged item attributable to the hedged risk are recognized in earnings. If the derivative is designated as a cash flow hedge, the effective portions of changes in the fair value of the derivative are recorded in other comprehensive income and are recognized in the income statement when the hedged item affects earnings. Ineffective portions of changes in the fair value of cash flow hedges are recognized in earnings. See Note 12, under the caption “Derivative Financial Instruments.” | |||
New Accounting Pronouncements | |||
Reporting Amounts Reclassified Out of Accumulated Other Comprehensive Income | |||
On January 1, 2013 we adopted guidance issued by the Financial Accounting Standards Board (“FASB”) that requires disclosure for amounts reclassified out of accumulated other comprehensive income by the respective line items of net income if the amount reclassified is required to be reclassified to net income in its entirety in the reporting period. For amounts that are not required to be reclassified in their entirety to net income, a cross-reference to other disclosures that provide additional detail about those amounts is required. The adoption of this guidance did not have an impact on our consolidated financial statements. | |||
Presentation of Unrecognized Tax Benefits | |||
In July 2013, the FASB issued guidance that requires the presentation of an unrecognized tax benefit as a reduction to a deferred tax asset for a net operating loss carryforward rather than as a liability when the uncertain tax position would reduce the net operating loss under the tax law of the applicable jurisdiction and the entity intends to use the deferred tax asset for that purpose. This guidance is effective prospectively for interim and annual reporting periods beginning after December 15, 2013. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements. |
Earnings_Per_Share
Earnings Per Share | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Earnings Per Share | ' | ||||||||||||
2. EARNINGS PER SHARE | |||||||||||||
The following table presents the calculation of basic and diluted earnings per common share for our Common and Class B common stock: | |||||||||||||
Years Ended December 31, | 2013 | 2012 | 2011 | ||||||||||
Basic Earnings per Share: | |||||||||||||
Net income attributable to Watsco, Inc. shareholders | $ | 127,723 | $ | 103,334 | $ | 90,450 | |||||||
Less: distributed and undistributed earnings allocated to non-vested (restricted) common stock | 9,064 | 17,656 | 6,045 | ||||||||||
Earnings allocated to Watsco, Inc. shareholders | $ | 118,659 | $ | 85,678 | $ | 84,405 | |||||||
Weighted-average common shares outstanding - Basic | 32,195,598 | 31,680,187 | 30,678,206 | ||||||||||
Basic earnings per share for Common and Class B common stock | $ | 3.69 | $ | 2.7 | $ | 2.75 | |||||||
Allocation of earnings for Basic: | |||||||||||||
Common stock | $ | 108,690 | $ | 78,359 | $ | 76,574 | |||||||
Class B common stock | 9,969 | 7,319 | 7,831 | ||||||||||
$ | 118,659 | $ | 85,678 | $ | 84,405 | ||||||||
Diluted Earnings per Share: | |||||||||||||
Net income attributable to Watsco, Inc. shareholders | $ | 127,723 | $ | 103,334 | $ | 90,450 | |||||||
Less: distributed and undistributed earnings allocated to non-vested (restricted) common stock | 9,053 | 17,656 | 6,042 | ||||||||||
Earnings allocated to Watsco, Inc. shareholders | $ | 118,670 | $ | 85,678 | $ | 84,408 | |||||||
Weighted-average common shares outstanding - Basic | 32,195,598 | 31,680,187 | 30,678,206 | ||||||||||
Effect of dilutive stock options | 62,470 | 64,212 | 75,085 | ||||||||||
Weighted-average common shares outstanding - Diluted | 32,258,068 | 31,744,399 | 30,753,291 | ||||||||||
Diluted earnings per share for Common and Class B common stock | $ | 3.68 | $ | 2.7 | $ | 2.74 | |||||||
Diluted earnings per share for our Common stock assumes the conversion of all of our Class B common stock into Common stock as of the beginning of the fiscal year, therefore, no allocation of earnings to Class B common stock is required. At December 31, 2013, 2012 and 2011, our outstanding Class B common stock was convertible into 2,704,832, 2,706,338 and 2,846,334 shares of our Common stock, respectively. | |||||||||||||
Diluted earnings per share excluded 1,066, 17,492 and 33,511 shares for the years ended December 31, 2013, 2012 and 2011, respectively, related to stock options with an exercise price per share greater than the average market value, resulting in an anti-dilutive effect on diluted earnings per share. |
Other_Comprehensive_Loss_Incom
Other Comprehensive (Loss) Income | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Other Comprehensive (Loss) Income | ' | ||||||||||||
3. OTHER COMPREHENSIVE (LOSS) INCOME | |||||||||||||
Other comprehensive (loss) income consists of the foreign currency translation adjustment associated with our Canadian operations’ use of the Canadian dollar as their functional currency, changes in the unrealized gain on available-for-sale securities and the effective portion of a cash flow hedge that matured in October 2011. The tax effects allocated to each component of other comprehensive (loss) income are as follows: | |||||||||||||
Years Ended December 31, | 2013 | 2012 | 2011 | ||||||||||
Foreign currency translation adjustment | $ | (16,365 | ) | $ | (3,191 | ) | $ | — | |||||
Unrealized gain on available-for-sale securities | 39 | 63 | 6 | ||||||||||
Income tax expense | (15 | ) | (28 | ) | (3 | ) | |||||||
Unrealized gain on available-for-sale securities, net of tax | 24 | 35 | 3 | ||||||||||
Unrealized gain on derivative instrument | — | — | 384 | ||||||||||
Income tax expense | — | — | (146 | ) | |||||||||
Unrealized gain on derivative instrument, net of tax | — | — | 238 | ||||||||||
Other comprehensive (loss) income | $ | (16,341 | ) | $ | (3,156 | ) | $ | 241 | |||||
The changes in accumulated other comprehensive loss, net of tax, are as follows: | |||||||||||||
Years Ended December 31, | 2013 | 2012 | 2011 | ||||||||||
Foreign currency translation adjustment: | |||||||||||||
Beginning balance | $ | (1,785 | ) | $ | — | $ | — | ||||||
Current period other comprehensive loss | (9,396 | ) | (1,785 | ) | — | ||||||||
Ending balance | (11,181 | ) | (1,785 | ) | — | ||||||||
Available-for-sale securities: | |||||||||||||
Beginning balance | (317 | ) | (352 | ) | (355 | ) | |||||||
Current period other comprehensive income | 24 | 35 | 3 | ||||||||||
Ending balance | (293 | ) | (317 | ) | (352 | ) | |||||||
Derivative instrument: | |||||||||||||
Beginning balance | — | — | (238 | ) | |||||||||
Current period other comprehensive income | — | — | 238 | ||||||||||
Ending balance | — | — | — | ||||||||||
Accumulated other comprehensive loss, net of tax | $ | (11,474 | ) | $ | (2,102 | ) | $ | (352 | ) | ||||
Supplier_Concentration
Supplier Concentration | 12 Months Ended |
Dec. 31, 2013 | |
Supplier Concentration | ' |
4. SUPPLIER CONCENTRATION | |
We have four key suppliers of HVAC/R equipment products. Purchases from these four suppliers comprised 73%, 72% and 71% of all purchases made in 2013, 2012 and 2011, respectively. Our largest supplier, Carrier and its affiliates, accounted for 59%, 57% and 54% of all purchases made in 2013, 2012 and 2011, respectively. See Note 15. Any significant interruption by Carrier or the other key suppliers in the delivery of products could impair our ability to maintain current inventory levels or a termination of a distribution agreement could disrupt the operations of certain subsidiaries and could materially impact our consolidated results of operations and consolidated financial position. |
Property_and_Equipment
Property and Equipment | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Property and Equipment | ' | ||||||||
5. PROPERTY AND EQUIPMENT | |||||||||
Property and equipment, net, consists of: | |||||||||
December 31, | 2013 | 2012 | |||||||
Land | $ | 1,131 | $ | 1,131 | |||||
Buildings and improvements | 49,942 | 48,457 | |||||||
Machinery, vehicles and equipment | 64,012 | 57,130 | |||||||
Furniture and fixtures | 20,523 | 18,251 | |||||||
135,608 | 124,969 | ||||||||
Accumulated depreciation and amortization | (90,190 | ) | (82,127 | ) | |||||
$ | 45,418 | $ | 42,842 | ||||||
Depreciation and amortization expense related to property and equipment included in selling, general and administrative expenses for the years ended December 31, 2013, 2012 and 2011, was $11,677, $10,986 and $9,364, respectively. |
Debt
Debt | 12 Months Ended |
Dec. 31, 2013 | |
Debt | ' |
6. DEBT | |
We maintain an unsecured, syndicated revolving credit agreement that provides for borrowings of up to $500,000. Borrowings are used to fund seasonal working capital needs and for other general corporate purposes, including acquisitions, dividends, stock repurchases and issuances of letters of credit. Included in the facility are a $65,000 swingline subfacility, a $50,000 letter of credit subfacility and a $75,000 multicurrency borrowing sublimit. | |
On July 1, 2013, we entered into an amendment to the revolving credit agreement, which extended the maturity date from April 27, 2017 to July 1, 2018, reduced pricing, improved covenant flexibility to accommodate the seasonal nature of our working capital requirements and modified certain definitions. Borrowings under the amended credit facility bear interest at either LIBOR-based rates plus a spread, which ranges from 87.5 to 250.0 basis-points (LIBOR plus 125.0 basis-points at December 31, 2013), depending upon our ratio of total debt to EBITDA, or on rates based on the higher of the Prime rate or the Federal Funds Rate, in each case plus a spread which ranges from 0 to 150.0 basis-points (25.0 basis-points at December 31, 2013), depending upon our ratio of total debt to EBITDA. We pay a variable commitment fee on the unused portion of the commitment under the revolving credit agreement, ranging from 12.5 to 35.0 basis-points (17.5 basis-points at December 31, 2013). | |
At December 31, 2013 and 2012, $230,044 and $316,182 was outstanding under the revolving credit agreement, respectively. The revolving credit agreement contains customary affirmative and negative covenants, including financial covenants with respect to consolidated leverage and interest coverage ratios, and other customary restrictions. We believe we were in compliance with all covenants at December 31, 2013. |
Income_Taxes
Income Taxes | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Income Taxes | ' | ||||||||||||
7. INCOME TAXES | |||||||||||||
The components of income tax expense from our wholly-owned operations and investments and our controlling interest in joint ventures with Carrier are as follows: | |||||||||||||
Years Ended December 31, | 2013 | 2012 | 2011 | ||||||||||
U.S. Federal | $ | 62,616 | $ | 50,919 | $ | 50,197 | |||||||
State | 9,234 | 6,245 | 6,338 | ||||||||||
Foreign | 5,810 | 5,478 | 315 | ||||||||||
$ | 77,660 | $ | 62,642 | $ | 56,850 | ||||||||
Current | $ | 69,071 | $ | 55,918 | $ | 48,540 | |||||||
Deferred | 8,589 | 6,724 | 8,310 | ||||||||||
$ | 77,660 | $ | 62,642 | $ | 56,850 | ||||||||
We calculate our income tax expense and our effective tax rate for 100% of income attributable to our wholly-owned operations and investments and for our controlling interest of income attributable to our joint ventures with Carrier, which are taxed as partnerships for income tax purposes. | |||||||||||||
Following is a reconciliation of the effective income tax rate: | |||||||||||||
Years Ended December 31, | 2013 | 2012 | 2011 | ||||||||||
U.S. federal statutory rate | 35 | % | 35 | % | 35 | % | |||||||
State income taxes, net of federal benefit and other | 3.3 | 2.5 | 3.1 | ||||||||||
Tax effects on foreign income | (1.3 | ) | (0.8 | ) | (0.1 | ) | |||||||
Effective income tax rate attributable to Watsco, Inc. | 37 | 36.7 | 38 | ||||||||||
Taxes attributable to noncontrolling interest | (7.7 | ) | (8.3 | ) | (8.8 | ) | |||||||
Effective income tax rate | 29.3 | % | 28.4 | % | 29.2 | % | |||||||
The following is a summary of the significant components of our current and long-term deferred tax assets and liabilities: | |||||||||||||
December 31, | 2013 | 2012 | |||||||||||
Current deferred tax assets: | |||||||||||||
Capitalized inventory costs and inventory reserves | $ | 2,883 | $ | 2,386 | |||||||||
Self-insurance reserves | 1,093 | 1,039 | |||||||||||
Allowance for doubtful accounts | 882 | 1,084 | |||||||||||
Other current deferred tax assets | 1,539 | 1,215 | |||||||||||
Total current deferred tax assets (1) | 6,397 | 5,724 | |||||||||||
Long-term deferred tax assets: | |||||||||||||
Share-based compensation | 17,455 | 13,911 | |||||||||||
Other long-term deferred tax assets | 909 | 797 | |||||||||||
Net operating loss carryforwards | 283 | 609 | |||||||||||
18,647 | 15,317 | ||||||||||||
Valuation allowance | (75 | ) | (391 | ) | |||||||||
Total long-term deferred tax assets (2) | 18,572 | 14,926 | |||||||||||
Current deferred tax liabilities: | |||||||||||||
Other current deferred tax liabilities | (1,304 | ) | (36 | ) | |||||||||
Total current deferred tax liabilities (1) | (1,304 | ) | (36 | ) | |||||||||
Long-term deferred tax liabilities: | |||||||||||||
Deductible goodwill | (76,519 | ) | (66,636 | ) | |||||||||
Depreciation | (2,873 | ) | (3,100 | ) | |||||||||
Other long-term deferred tax liabilities | (2,556 | ) | (1,322 | ) | |||||||||
Total long-term deferred tax liabilities (2) | (81,948 | ) | (71,058 | ) | |||||||||
Net deferred tax liabilities | $ | (58,283 | ) | $ | (50,444 | ) | |||||||
-1 | Current deferred tax assets and liabilities have been included in the consolidated balance sheets in other current assets. | ||||||||||||
-2 | Long-term deferred tax assets and liabilities have been included in the consolidated balance sheets in deferred income taxes and other liabilities. | ||||||||||||
Amounts earned by foreign subsidiaries are generally subject to United States income taxation upon repatriation. United States income taxes have not been provided on undistributed earnings of our foreign subsidiaries. The cumulative undistributed earnings related to foreign operations were approximately $55,000 at December 31, 2013. It is not practicable to estimate the amount of tax that might be payable. Our intention is to reinvest these earnings permanently or to repatriate the earnings only when it is tax effective to do so. | |||||||||||||
Management has determined that $75 and $391 of valuation allowance was necessary at December 31, 2013 and 2012, respectively, to reduce the deferred tax assets to the amount that will more likely than not be realized. At December 31, 2013, there were state and other net operating loss carryforwards of $7,117, which expire in varying amounts from 2014 through 2026. These amounts are available to offset future taxable income. There were no federal net operating loss carryforwards at December 31, 2013. | |||||||||||||
We are subject to United States federal income tax, income tax of multiple state jurisdictions and foreign income tax. We are subject to tax audits in the various jurisdictions until the respective statutes of limitations expire. We are no longer subject to United States federal tax examinations for tax years prior to 2010. For the majority of states, we are no longer subject to tax examinations for tax years prior to 2009. | |||||||||||||
As of December 31, 2013 and 2012, the total amount of gross unrecognized tax benefits (excluding the federal benefit received from state positions) was $3,135 and $2,474, respectively. Of these totals, $2,038 and $1,609, respectively, (net of the federal benefit received from state positions) represent the amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate. Our continuing practice is to recognize penalties within selling, general and administrative expenses and interest related to income tax matters in income tax expense in the consolidated statements of income. As of December 31, 2013 and 2012, the cumulative amount of estimated accrued interest and penalties resulting from such unrecognized tax benefits was $630 and $583, respectively, and is included in deferred income taxes and other liabilities in the accompanying consolidated balance sheets. | |||||||||||||
The changes in gross unrecognized tax benefits are as follows: | |||||||||||||
Balance at December 31, 2010 | $ | 1,889 | |||||||||||
Additions based on tax positions related to the current year | 542 | ||||||||||||
Reductions due to lapse of applicable statute of limitations | (7 | ) | |||||||||||
Balance at December 31, 2011 | 2,424 | ||||||||||||
Additions based on tax positions related to the current year | 416 | ||||||||||||
Reductions due to lapse of applicable statute of limitations | (366 | ) | |||||||||||
Balance at December 31, 2012 | 2,474 | ||||||||||||
Additions based on tax positions related to the current year | 673 | ||||||||||||
Reductions due to lapse of applicable statute of limitations | (12 | ) | |||||||||||
Balance at December 31, 2013 | $ | 3,135 | |||||||||||
ShareBased_Compensation_and_Be
Share-Based Compensation and Benefit Plans | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Share-Based Compensation and Benefit Plans | ' | ||||||||||||||||
8. SHARE-BASED COMPENSATION AND BENEFIT PLANS | |||||||||||||||||
Share-Based Compensation Plan | |||||||||||||||||
The 2001 Incentive Compensation Plan (the “2001 Plan”) provides for the award of a broad variety of share-based compensation alternatives such as non-vested (restricted) stock, non-qualified stock options, incentive stock options, performance awards, dividend equivalents, deferred stock and stock appreciation rights at no less than 100% of the market price on the date the award is granted. To date, awards under the 2001 Plan consist of non-qualified stock options and non-vested (restricted) stock. Under the 2001 Plan, we may grant awards for an aggregate of 4,000,000 shares of Common and Class B common stock. A total of 1,987,912 shares of Common stock, net of cancellations, and 1,752,642 shares of Class B common stock, net of cancellations, had been awarded under the 2001 Plan as of December 31, 2013. As of December 31, 2013, 259,446 shares of common stock were reserved for future grants under the 2001 Plan. Options under the 2001 Plan vest over two to four years of service and have contractual terms of five years. Awards of non-vested (restricted) stock, which are granted at no cost to the employee, vest upon attainment of a certain age, generally the employee’s respective retirement age. Vesting may be accelerated in certain circumstances prior to the original vesting date. | |||||||||||||||||
The following is a summary of stock option activity under the 2001 Plan as of and for the year ended December 31, 2013: | |||||||||||||||||
Options | Weighted- | Weighted- | Aggregate | ||||||||||||||
Average | Average | Intrinsic | |||||||||||||||
Exercise | Remaining | Value | |||||||||||||||
Price | Contractual | ||||||||||||||||
Term | |||||||||||||||||
(in years) | |||||||||||||||||
Options outstanding at December 31, 2012 | 324,150 | $ | 56.21 | ||||||||||||||
Granted | 30,000 | 82.32 | |||||||||||||||
Exercised | (79,450 | ) | 34.65 | ||||||||||||||
Forfeited | (7,000 | ) | 65.31 | ||||||||||||||
Expired | — | — | |||||||||||||||
Options outstanding at December 31, 2013 | 267,700 | $ | 65.3 | 2.65 | $ | 8,234 | |||||||||||
Options exercisable at December 31, 2013 | 50,784 | $ | 60.13 | 2.12 | $ | 1,824 | |||||||||||
The following is a summary of non-vested (restricted) stock activity as of and for the year ended December 31, 2013: | |||||||||||||||||
Shares | Weighted- | ||||||||||||||||
Average | |||||||||||||||||
Grant Date | |||||||||||||||||
Fair Value | |||||||||||||||||
Non-vested (restricted) stock outstanding at December 31, 2012 | 2,373,249 | $ | 38.75 | ||||||||||||||
Granted | 124,043 | 80.21 | |||||||||||||||
Forfeited | (10,000 | ) | 68.36 | ||||||||||||||
Non-vested (restricted) stock outstanding at December 31, 2013 | 2,487,292 | $ | 40.7 | ||||||||||||||
The weighted-average grant date fair value of non-vested (restricted) stock granted during 2013, 2012 and 2011 was $80.21, $69.66 and $63.87, respectively. The fair value of non-vested stock that vested during 2011 was $672. No non-vested (restricted) stock vested during 2013 or 2012. | |||||||||||||||||
During 2011, 2,527 shares of Common stock with an aggregate fair market value of $180 were withheld as payment in lieu of cash to satisfy tax withholding obligations in connection with the vesting of non-vested (restricted) stock. | |||||||||||||||||
Share-Based Compensation Fair Value Assumptions | |||||||||||||||||
The fair value of each stock option award is estimated on the date of grant using the Black-Scholes option pricing valuation model based on the weighted-average assumptions noted in the table below. The fair value of each stock option award, which is subject to graded vesting, is expensed, net of estimated forfeitures, on a straight-line basis over the requisite service period for each separately vesting portion of the stock option. We use historical data to estimate stock option forfeitures. The expected term of stock option awards granted represents the period of time that stock option awards granted are expected to be outstanding and was calculated using the simplified method for plain vanilla options, which we believe provides a reasonable estimate of expected life based on our historical data. The risk-free rate for periods within the contractual life of the stock option award is based on the yield curve of a zero-coupon United States Treasury bond on the date the stock option award is granted with a maturity equal to the expected term of the stock option award. Expected volatility is based on historical volatility of our stock. | |||||||||||||||||
The following table presents the weighted-average assumptions used for stock options granted: | |||||||||||||||||
Years Ended December 31, | 2013 | 2012 | 2011 | ||||||||||||||
Expected term in years | 4.25 | 4.25 | 4.25 | ||||||||||||||
Risk-free interest rate | 0.82 | % | 0.57 | % | 1.12 | % | |||||||||||
Expected volatility | 24.56 | % | 31.4 | % | 32.59 | % | |||||||||||
Expected dividend yield | 2.2 | % | 3.49 | % | 3.48 | % | |||||||||||
Grant date fair value | $ | 13.33 | $ | 12.9 | $ | 12.31 | |||||||||||
Exercise of Stock Options | |||||||||||||||||
The total intrinsic value of stock options exercised during 2013, 2012 and 2011 was $2,753, $5,641 and $4,724, respectively. Cash received from Common stock issued as a result of stock options exercised during 2013, 2012 and 2011 was $1,554, $3,790 and $4,530, respectively. During 2013 and 2012, 4,749 shares of Common stock with an aggregate fair market value of $450 and 29,987 shares of Common stock with an aggregate fair market value of $2,229, respectively, were withheld as payment in lieu of cash for stock option exercises and related tax withholdings. During 2013 and 2011, 13,227 shares of common stock with an aggregate fair market value of $1,227 and 7,616 shares of Common stock with an aggregate fair market value of $437, respectively, were delivered as payment in lieu of cash for stock option exercises and related tax withholdings. These shares were retired upon delivery. In connection with stock option exercises, the tax benefits realized from share-based compensation plans totaled $1,557, $1,245 and $916, for the years ended December 31, 2013, 2012 and 2011, respectively. | |||||||||||||||||
Share-Based Compensation Expense | |||||||||||||||||
The following table provides information on share-based compensation expense: | |||||||||||||||||
Years Ended December 31, | 2013 | 2012 | 2011 | ||||||||||||||
Stock options | $ | 884 | $ | 846 | $ | 612 | |||||||||||
Non-vested (restricted) stock | 9,083 | 7,093 | 6,051 | ||||||||||||||
Share-based compensation expense | $ | 9,967 | $ | 7,939 | $ | 6,663 | |||||||||||
At December 31, 2013, there was $848 of unrecognized pre-tax compensation expense related to stock options granted under the 2001 Plan, which is expected to be recognized over a weighted-average period of approximately 1.6 years. The total fair value of stock options that vested during 2013, 2012 and 2011 was $822, $315 and $475, respectively. | |||||||||||||||||
At December 31, 2013, there was $72,870 of unrecognized pre-tax compensation expense related to non-vested (restricted) stock, which is expected to be recognized over a weighted-average period of approximately 9.7 years, of which, approximately $53,000 is related to awards granted to our Chief Executive Officer, which vest in approximately nine years upon his attainment of age 82. In the event that vesting is accelerated for any circumstance, as defined in the related agreements, the remaining unrecognized share-based compensation expense would be immediately recognized as a charge to earnings with a corresponding tax benefit. At December 31, 2013, we were obligated to issue 177,025 shares of non-vested (restricted) stock in connection with incentive compensation agreements. | |||||||||||||||||
Employee Stock Purchase Plan | |||||||||||||||||
The Watsco, Inc. Fourth Amended and Restated 1996 Qualified Employee Stock Purchase Plan (the “ESPP”) provides for up to 1,500,000 shares of Common stock to be available for purchase by our full-time employees with at least 90 days of service. The plan allows participating employees to purchase shares of Common stock with a discount of 5% of the fair market value at specified times. During 2013, 2012 and 2011, employees purchased 5,844, 6,753 and 8,520 shares of Common stock at an average price of $79.46, $68.76 and $59.44 per share, respectively. Cash dividends received by the ESPP were reinvested in Common stock and resulted in the issuance of 1,899, 15,411 and 5,097 additional shares during 2013, 2012 and 2011, respectively. We received net proceeds of $631, $1,522 and $829, respectively, during 2013, 2012 and 2011, for shares of our Common stock issued under the ESPP. At December 31, 2013, 525,152 shares remained available for purchase under the ESPP. | |||||||||||||||||
401(k) Plan | |||||||||||||||||
We have a profit sharing retirement plan for our employees that is qualified under Section 401(k) of the Internal Revenue Code. Annual matching contributions are made based on a percentage of eligible employee compensation deferrals. The contribution has historically been made with the issuance of Common stock to the plan on behalf of our employees. For the years ended December 31, 2013, 2012 and 2011, we issued 22,551, 26,991 and 27,240 shares of Common stock to the plan representing the Common stock discretionary matching contribution of $1,689, $1,772 and $1,718, respectively. |
Acquisitions
Acquisitions | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Acquisitions | ' | ||||||||
9. ACQUISITIONS | |||||||||
Carrier Enterprise I | |||||||||
Carrier Enterprise, LLC (“Carrier Enterprise I”) is a joint venture formed on July 1, 2009 with Carrier that operates a network of locations primarily throughout the Sun Belt. From its inception until July 2, 2012, we owned 60% of the joint venture and Carrier owned 40%. We had an option to purchase an additional 10% ownership interest in Carrier Enterprise I, which became exercisable on July 1, 2012. On July 2, 2012, we exercised this option and acquired an additional 10% ownership interest in Carrier Enterprise I for cash consideration of $51,881. We have a second option to purchase an additional 10% interest in Carrier Enterprise I, which becomes exercisable beginning on July 1, 2014. | |||||||||
Carrier Enterprise II | |||||||||
On April 29, 2011, we formed a second joint venture with Carrier to distribute Carrier, Bryant and Payne branded residential, light-commercial and applied-commercial HVAC products and related parts and supplies in the northeast U.S. Carrier contributed 28 of its company-operated northeastern locations to the newly formed joint venture and we contributed 14 of our northeast locations. We purchased a 60% controlling interest in the joint venture for a fair value of $49,229. Total consideration paid by us for our 60% controlling interest in the joint venture was composed of cash consideration of $34,460 and our contribution of 14 northeastern locations valued at $14,769. | |||||||||
The purchase price resulted in the recognition of $32,957 in goodwill and intangibles. The fair value of the identified intangible assets was $20,600 and consisted of $13,400 in trade names and distribution rights and $7,200 in customer relationships to be amortized over a 12 year period. The tax basis of the acquired goodwill recognized is deductible for income tax purposes over 15 years. | |||||||||
The purchase price allocation is based upon a purchase price of $49,229, which represents the fair value of our 60% controlling interest in the joint venture. The table below presents the allocation of the total consideration to tangible and intangible assets acquired, liabilities assumed and the noncontrolling interest from the acquisition of our 60% controlling interest in the joint venture based on the respective fair values as of April 29, 2011: | |||||||||
Cash | $ | 5 | |||||||
Accounts receivable | 24,300 | ||||||||
Inventories | 39,003 | ||||||||
Other current assets | 773 | ||||||||
Property and equipment | 4,402 | ||||||||
Goodwill | 12,357 | ||||||||
Intangibles | 20,600 | ||||||||
Other assets | 202 | ||||||||
Accounts payable and accrued expenses | (22,894 | ) | |||||||
Noncontrolling interest | (29,519 | ) | |||||||
Total purchase price | $ | 49,229 | |||||||
The fair value of the noncontrolling interest was determined by applying a pro-rata value of the total invested capital adjusted for a discount for lack of control that market participants would consider when estimating the fair value of the noncontrolling interest. As a result of our contribution of 14 locations to the joint venture, $7,708 representing 40% of the carrying value of the contributed locations was attributed to the noncontrolling interest and $7,061 representing 40% of the difference between the fair value and carrying value of the contributed locations, was recognized as an increase to paid-in capital. | |||||||||
On July 29, 2011, we acquired a 60% controlling interest in Carrier’s HVAC/R distribution operations in Mexico for cash consideration of $9,000. Carrier’s company-operated Mexico distribution network had revenues of approximately $75,000 in 2010 and operated from seven locations. Products sold include Carrier’s complete product line of HVAC equipment and commercial refrigeration products and supplies servicing both the residential and applied commercial markets. Collectively, the Northeast locations and the Mexico operations are referred to as “Carrier Enterprise II.” Neither we nor Carrier has any options to purchase additional ownership interests in Carrier Enterprise II. | |||||||||
Carrier Enterprise III | |||||||||
On April 27, 2012, we completed the formation of a joint venture with UTC Canada Corporation (“UTC Canada”), an affiliate of Carrier, to distribute Carrier-manufactured HVAC products in Canada. The newly formed joint venture, Carrier Enterprise Canada, L.P. (“Carrier Enterprise III”), operates 35 locations throughout Canada. We have a 60% controlling interest in Carrier Enterprise III and Carrier has a 40% noncontrolling interest. Total consideration paid by us for our 60% controlling interest in Carrier Enterprise III comprised cash consideration of $80,489 and the issuance to UTC Canada of 1,250,000 shares of Common stock, having a fair value of $93,250. Neither we nor UTC Canada has any options to purchase additional ownership interests in Carrier Enterprise III. | |||||||||
The purchase price for Carrier Enterprise III resulted in the recognition of $216,463 in goodwill and intangibles. The fair value of the identified intangible assets was $151,172 and consisted of $95,515 in trade names and distribution rights and $55,657 in customer relationships to be amortized over a 15 year period. For Canadian income tax purposes, 75% of the tax basis of the acquired goodwill is amortized at a rate of 7% annually on a declining balance basis. | |||||||||
The purchase price allocation is based upon a purchase price of $173,739, which represents the fair value of our 60% controlling interest in Carrier Enterprise III. The table below presents the allocation of the total consideration to tangible and intangible assets acquired, liabilities assumed and the noncontrolling interest from the acquisition of our 60% controlling interest in Carrier Enterprise III based on the respective fair values as of April 27, 2012: | |||||||||
Cash | $ | 10 | |||||||
Accounts receivable | 46,718 | ||||||||
Inventories | 55,024 | ||||||||
Other current assets | 481 | ||||||||
Property and equipment | 2,517 | ||||||||
Goodwill | 65,291 | ||||||||
Intangible assets | 151,172 | ||||||||
Other assets | 978 | ||||||||
Accounts payable and accrued expenses | (44,208 | ) | |||||||
Noncontrolling interest | (104,244 | ) | |||||||
Total purchase price | $ | 173,739 | |||||||
The fair value of the noncontrolling interest was determined by applying a pro-rata value of the total invested capital adjusted for a discount for lack of control that market participants would consider when estimating the fair value of the noncontrolling interest. | |||||||||
The unaudited pro forma financial information, combining our results of operations with the operations of Carrier Enterprise II and Carrier Enterprise III as if the joint ventures had been formed on January 1, 2011, is as follows: | |||||||||
Years ended December 31, | 2012 | 2011 | |||||||
Revenues | $ | 3,526,621 | $ | 3,404,381 | |||||
Net income | 156,728 | 159,147 | |||||||
Less: net income attributable to noncontrolling interest | 54,153 | 60,380 | |||||||
Net income attributable to Watsco, Inc. | $ | 102,575 | $ | 98,767 | |||||
Diluted earnings per share for Common and Class B common stock | $ | 2.64 | $ | 2.89 | |||||
The foregoing unaudited pro forma financial information is presented for informational purposes only. The unaudited pro forma financial information from the beginning of the periods presented until the respective acquisition dates of the above-described Canadian, Northeast United States and Mexican operations includes adjustments to record income taxes related to our portion of Carrier Enterprise II and Carrier Enterprise III’s income, amortization related to identified intangible assets with finite lives and interest expense on borrowings incurred to acquire our 60% controlling interests. This unaudited pro forma financial information does not include adjustments to add or remove certain corporate expenses of Carrier Enterprise II and Carrier Enterprise III, which may or may not be incurred in future periods, or adjustments for depreciation or synergies that may be realized subsequent to the acquisition dates. This unaudited pro forma financial information does not necessarily reflect our future results of operations or what the results of operations would have been had we acquired our 60% controlling interest in and operated Carrier Enterprise II and Carrier Enterprise III as of the beginning of the periods presented. | |||||||||
The results of operations of these acquired locations have been included in the consolidated financial statements from their respective dates of acquisition. | |||||||||
Transaction costs | |||||||||
Approximately $1,200 of transaction costs is included in selling, general and administrative expenses in our consolidated statements of income for both the years ended December 31, 2012 and 2011, primarily associated with the closing and transition of Carrier Enterprise III and Carrier Enterprise II, respectively. |
Goodwill_and_Other_Intangible_
Goodwill and Other Intangible Assets | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Goodwill and Other Intangible Assets | ' | ||||||||||
10. GOODWILL AND OTHER INTANGIBLE ASSETS | |||||||||||
The changes in the carrying amount of goodwill are as follows: | |||||||||||
Balance at December 31, 2011 | $ | 319,440 | |||||||||
Acquired goodwill | 77,829 | ||||||||||
Foreign currency translation adjustment | (7 | ) | |||||||||
Balance at December 31, 2012 | 397,262 | ||||||||||
Foreign currency translation adjustment | (4,652 | ) | |||||||||
Balance at December 31, 2013 | $ | 392,610 | |||||||||
Other intangible assets are comprised of the following: | |||||||||||
December 31, | Estimated | 2013 | 2012 | ||||||||
Useful Lives | |||||||||||
Indefinite lived intangible assets - Trade names, trademarks and distribution rights | $ | 138,599 | $ | 144,683 | |||||||
Finite lived intangible assets: | |||||||||||
Customer relationships | 10-15 years | 80,865 | 84,410 | ||||||||
Trade name | 10 years | 1,150 | 1,150 | ||||||||
Non-compete agreements | 7 years | 369 | 369 | ||||||||
Accumulated amortization | (17,140 | ) | (11,111 | ) | |||||||
Finite lived intangible assets, net | 65,244 | 74,818 | |||||||||
$ | 203,843 | $ | 219,501 | ||||||||
Amortization expense related to finite lived intangible assets included in selling, general and administrative expenses for the years ended December 31, 2013, 2012 and 2011, was $6,029, $4,925 and $2,361, respectively. Amortization of finite lived intangible assets for 2014 through 2018 is expected to be approximately $5,900 per year. |
Shareholders_Equity
Shareholders' Equity | 12 Months Ended |
Dec. 31, 2013 | |
Shareholders' Equity | ' |
11. SHAREHOLDERS’ EQUITY | |
Common Stock | |
Common stock and Class B common stock share equally in earnings and are identical in most other respects except (i) Common stock is entitled to one vote on most matters and each share of Class B common stock is entitled to ten votes; (ii) shareholders of Common stock are entitled to elect 25% of the Board of Directors (rounded up to the nearest whole number) and Class B shareholders are entitled to elect the balance of the Board of Directors; (iii) cash dividends may be paid on Common stock without paying a cash dividend on Class B common stock and no cash dividend may be paid on Class B common stock unless at least an equal cash dividend is paid on Common stock and (iv) Class B common stock is convertible at any time into Common stock on a one-for-one basis at the option of the shareholder. | |
Preferred Stock | |
We are authorized to issue preferred stock with such designation, rights and preferences as may be determined from time to time by our Board of Directors. Accordingly, the Board of Directors is empowered, without shareholder approval, to issue preferred stock with dividend, liquidation, conversion, voting or other rights which could adversely affect the voting power or other rights of the holders of our Common stock and Class B common stock and, in certain instances, could adversely affect the market price of this stock. We had no preferred stock outstanding at December 31, 2013 and 2012. | |
Stock Repurchase Plan | |
In September 1999, our Board of Directors authorized the repurchase, at management’s discretion, of up to 7,500,000 shares of common stock in the open market or via private transactions. Shares repurchased under the program are accounted for using the cost method and result in a reduction of shareholders’ equity. No shares were repurchased during 2013, 2012 or 2011. In aggregate, 6,322,650 shares of Common stock and 48,263 shares of Class B common stock have been repurchased at a cost of $114,425 since the inception of the program. At December 31, 2013, there were 1,129,087 shares remaining authorized for repurchase under the program. |
Financial_Instruments
Financial Instruments | 12 Months Ended |
Dec. 31, 2013 | |
Financial Instruments | ' |
12. FINANCIAL INSTRUMENTS | |
Recorded Financial Instruments | |
Recorded financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable, the current portion of long-term obligations, borrowings under our revolving credit agreement and debt instruments included in other long-term obligations. At December 31, 2013 and 2012, the fair values of cash and cash equivalents, accounts receivable, accounts payable and the current portion of long-term obligations approximated their carrying values due to the short-term nature of these instruments. | |
The fair values of variable rate borrowings under our revolving credit agreement and debt instruments included in long-term obligations also approximate their carrying value based upon interest rates available for similar instruments with consistent terms and remaining maturities. | |
Derivative Financial Instruments | |
We routinely use certain derivatives instruments to hedge foreign currency exposure. Although these derivatives were not designated as hedges and/or did not qualify for hedge accounting, they were effective economic hedges for the periods presented. The changes in fair value of economic hedges are recognized in earnings. During 2013 and 2012, we entered into foreign currency forward contracts to offset the earnings impact that foreign currency exchange rate fluctuations would otherwise have had on certain monetary liabilities that are denominated in nonfunctional currencies. The changes in fair value of these foreign currency forward contracts were a gain (loss) of $315 and $(197) for 2013 and 2012, respectively, and are included in selling, general and administrative expenses in our consolidated statements of income. The total notional value of our foreign currency exchange contracts as of December 31, 2013 was $26,000, and such contracts have varying terms expiring through March 2014. See Note 13. | |
We were party to an interest rate swap agreement with a notional amount of $10,000 that matured in October 2011 and had been designated as a cash flow hedge. The swap effectively exchanged the variable rate of 30-day LIBOR to a fixed interest rate of 5.07%. For the year ended December 31, 2011, the hedging relationship was determined to be highly effective in achieving offsetting changes in cash flows. The net change in other comprehensive loss during 2011 reflected the reclassification of $244, net of income tax benefit of $155, of unrealized losses from accumulated other comprehensive loss to current period earnings (recorded in interest expense, net in the consolidated statement of income). | |
Off-Balance Sheet Financial Instruments | |
At December 31, 2013 and 2012, we were contingently liable under standby letters of credit aggregating $2,681 and $3,098, respectively, which are primarily used as collateral to cover any contingency related to additional risk assessments pertaining to our self-insurance programs. Additionally, at December 31, 2013 and 2012, we were contingently liable under various performance bonds aggregating approximately $800 and $300, respectively, which are used as collateral to cover any contingencies related to our nonperformance under agreements with certain customers. We do not expect that any material losses or obligation will result from the issuance of the standby letters of credit or performance bonds because we expect to meet our obligations under our self-insurance programs and to certain customers in the ordinary course of business. Accordingly, the estimated fair value of these instruments is zero. | |
Concentrations of Credit Risk | |
Financial instruments which potentially subject us to concentrations of credit risk consist principally of accounts receivable. Concentrations of credit risk are limited due to the large number of customers comprising the customer base and their dispersion across many different geographical regions. We also have access to credit insurance programs which are used as an additional means to mitigate credit risk. |
Fair_Value_Measurements
Fair Value Measurements | 12 Months Ended | ||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||
Fair Value Measurements | ' | ||||||||||||||||||
13. FAIR VALUE MEASUREMENTS | |||||||||||||||||||
The following tables present our assets and liabilities carried at fair value that are measured on a recurring basis: | |||||||||||||||||||
Fair Value Measurements | |||||||||||||||||||
at December 31, 2013 Using | |||||||||||||||||||
Balance Sheet Location | Total | Level 1 | Level 2 | Level 3 | |||||||||||||||
Assets: | |||||||||||||||||||
Available-for-sale securities | Other assets | $ | 265 | $ | 265 | — | — | ||||||||||||
Derivative financial instruments | Other current assets | $ | 118 | — | $ | 118 | — | ||||||||||||
Fair Value Measurements | |||||||||||||||||||
at December 31, 2012 Using | |||||||||||||||||||
Balance Sheet Location | Total | Level 1 | Level 2 | Level 3 | |||||||||||||||
Assets: | |||||||||||||||||||
Available-for-sale securities | Other assets | $ | 226 | $ | 226 | — | — | ||||||||||||
Liabilities: | |||||||||||||||||||
Derivative financial instruments | Accrued expenses and other current liabilities | $ | 197 | — | $ | 197 | — | ||||||||||||
The following is a description of the valuation techniques used for these assets and liabilities, as well as the level of input used to measure fair value: | |||||||||||||||||||
Available-for-sale securities – the investments are exchange-traded equity securities. Fair values for these investments are based on closing stock prices from active markets and are therefore classified within Level 1 of the fair value hierarchy. | |||||||||||||||||||
Derivative financial instruments – the derivatives are foreign currency forward contracts. Fair value is based on observable market inputs, such as forward rates in active markets; therefore, we classify the derivatives within Level 2 of the valuation hierarchy. | |||||||||||||||||||
There were no transfers in or out of Level 1 and Level 2 during 2013 or 2012. |
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Commitments and Contingencies | ' | ||||
14. COMMITMENTS AND CONTINGENCIES | |||||
Litigation, Claims and Assessments | |||||
We are involved in litigation incidental to the operation of our business. We vigorously defend all matters in which we or our subsidiaries are named defendants and, for insurable losses, maintain significant levels of insurance to protect against adverse judgments, claims or assessments that may affect us. Although the adequacy of existing insurance coverage and the outcome of any legal proceedings cannot be predicted with certainty, based on the current information available, we do not believe the ultimate liability associated with any known claims or litigation will have a material adverse effect on our financial condition or results of operations. | |||||
Self-Insurance | |||||
Self-insurance reserves are maintained relative to company-wide casualty insurance and health benefit programs. The level of exposure from catastrophic events is limited by the purchase of stop-loss and aggregate liability reinsurance coverage. When estimating the self-insurance liabilities and related reserves, management considers a number of factors, which include historical claims experience, demographic factors, severity factors and valuations provided by independent third-party actuaries. Management reviews its assumptions with its independent third-party actuaries to evaluate whether the self-insurance reserves are adequate. If actual claims or adverse development of loss reserves occur and exceed these estimates, additional reserves may be required. Reserves in the amounts of $5,582 and $4,844 at December 31, 2013 and 2012, respectively, were established related to such programs and are included in accrued expenses and other current liabilities in our consolidated balance sheets. | |||||
Variable Interest Entity | |||||
As of December 31, 2013, in conjunction with our casualty insurance programs, limited equity interests are held in a captive insurance entity. The programs permit us to self-insure a portion of losses, to gain access to a wide array of safety-related services, to pool insurance risks and resources in order to obtain more competitive pricing for administration and reinsurance and to limit risk of loss in any particular year. The entity meets the definition of Variable Interest Entity (“VIE”); however, we do not meet the requirements to include this entity in the consolidated financial statements. The maximum exposure to loss related to our involvement with this entity is limited to approximately $4,400. See “Self-Insurance” above for further information on commitments associated with the insurance programs and Note 12, under the caption “Off-Balance Sheet Financial Instruments,” for further information on standby letters of credit. At December 31, 2013, there were no other entities that met the definition of a VIE. | |||||
Operating Leases | |||||
We are obligated under various non-cancelable operating lease agreements for real property, equipment, vehicles and a corporate aircraft used in our operations with varying terms through 2023. We are committed to pay a portion of the actual operating expenses under certain of these lease agreements. These operating expenses are not included in the table below. Some of these arrangements have free or escalating rent payment provisions. We recognize rent expense under such arrangements on a straight-line basis over the lease term. | |||||
At December 31, 2013, future minimum payments under non-cancelable operating leases over each of the next five years and thereafter were as follows: | |||||
2014 | $ | 64,967 | |||
2015 | 54,508 | ||||
2016 | 43,322 | ||||
2017 | 28,356 | ||||
2018 | 14,006 | ||||
Thereafter | 8,388 | ||||
Total minimum payments | $ | 213,547 | |||
Rental expense for the years ended December 31, 2013, 2012 and 2011, was $79,585, $76,547 and $70,933, respectively. |
Related_Party_Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2013 | |
Related Party Transactions | ' |
15. RELATED PARTY TRANSACTIONS | |
Purchases from Carrier and its affiliates comprised 59%, 57% and 54% of all inventory purchases made during 2013, 2012 and 2011, respectively. At December 31, 2013 and 2012, approximately $53,000 and $62,000, respectively, was payable to Carrier and its affiliates, net of receivables. Our joint ventures with Carrier also sell HVAC products to Carrier and its affiliates. Revenues in our consolidated statements of income for 2013, 2012 and 2011 include $30,819, $32,961 and $23,710, respectively, of sales to Carrier and its affiliates. We believe these transactions are conducted at arm’s-length in the ordinary course of business. | |
Carrier Enterprise II entered into Transactional Services Agreements (“TSAs”) with Carrier, pursuant to which Carrier performed certain business processes on its behalf, including processes involving the use of certain information technologies. The services provided by Carrier pursuant to the TSAs terminated on April 30, 2012. The fees related to these TSAs were $1,798 and $1,139, respectively, for 2012 and 2011, and are included in selling, general and administrative expenses in our consolidated statements of income. At December 31, 2012, $25 related to these TSAs was payable to Carrier and was included in accrued expenses and other current liabilities in our consolidated balance sheet. Amounts outstanding were repaid in 2013 and no further services are required under the TSAs for Carrier Enterprise II. | |
Carrier Enterprise III entered into TSAs with UTC Canada, pursuant to which UTC Canada performed certain business processes on behalf of Carrier Enterprise III, including processes involving the use of certain information technologies, and UTC Canada entered into TSAs with Carrier Enterprise III, pursuant to which Carrier Enterprise III performed certain business processes on behalf of UTC Canada. The services provided pursuant to the TSAs terminated on December 31, 2012. The fees payable by Carrier Enterprise III to UTC Canada under one TSA were substantially offset by the fees payable to Carrier Enterprise III by UTC Canada under the other TSA. | |
At December 31, 2012, $29,637 was payable to Carrier and UTC Canada for unpaid distributions declared to the noncontrolling interest. This amount was paid to Carrier and UTC Canada in February 2013. No amounts were outstanding at December 31, 2013. |
Information_about_Geographic_A
Information about Geographic Areas | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Information about Geographic Areas | ' | ||||||||||||
16. INFORMATION ABOUT GEOGRAPHIC AREAS | |||||||||||||
Our operations are primarily within the United States and Puerto Rico. Products are sold on an export-only basis to portions of Latin America and the Caribbean Basin. The following tables set forth revenues and long-lived assets by geographical area: | |||||||||||||
Years Ended December 31, | 2013 | 2012 | 2011 | ||||||||||
Revenues: | |||||||||||||
United States | $ | 3,325,114 | $ | 3,087,256 | $ | 2,938,907 | |||||||
Canada | 318,165 | 240,254 | — | ||||||||||
Mexico | 100,051 | 104,202 | 38,852 | ||||||||||
Total Revenues | $ | 3,743,330 | $ | 3,431,712 | $ | 2,977,759 | |||||||
December 31, | 2013 | 2012 | |||||||||||
Long-Lived Assets: | |||||||||||||
United States | $ | 429,202 | $ | 429,153 | |||||||||
Canada | 207,340 | 225,076 | |||||||||||
Mexico | 5,329 | 5,376 | |||||||||||
Total Long-Lived Assets | $ | 641,871 | $ | 659,605 | |||||||||
Revenues are attributed to countries based on the location of the store from which the sale occurred. Long-lived assets consist of property and equipment, goodwill and intangible assets. |
Supplemental_Cash_Flow_Informa
Supplemental Cash Flow Information | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Supplemental Cash Flow Information | ' | ||||||||||||
17. SUPPLEMENTAL CASH FLOW INFORMATION | |||||||||||||
Supplemental cash flow information was as follows: | |||||||||||||
Years Ended December 31, | 2013 | 2012 | 2011 | ||||||||||
Interest paid | $ | 5,334 | $ | 2,802 | $ | 1,854 | |||||||
Income taxes net of refunds | $ | 73,168 | $ | 46,819 | $ | 45,137 | |||||||
Common stock issued for Carrier Enterprise III | — | $ | 93,250 | — | |||||||||
Net assets of locations contributed to Carrier Enterprise II | — | — | $ | 14,769 |
Selected_Quarterly_Financial_D
Selected Quarterly Financial Data | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||
Selected Quarterly Financial Data | ' | ||||||||||||||||||||
WATSCO, INC. AND SUBSIDIARIES | |||||||||||||||||||||
SELECTED QUARTERLY FINANCIAL DATA | |||||||||||||||||||||
(UNAUDITED) | |||||||||||||||||||||
(In thousands, except per share data) | 1st | 2nd | 3rd | 4th | Total | ||||||||||||||||
Quarter | Quarter | Quarter | Quarter | ||||||||||||||||||
Year Ended December 31, 2013 | |||||||||||||||||||||
Revenues (1) | $ | 713,633 | $ | 1,120,452 | $ | 1,081,893 | $ | 827,352 | $ | 3,743,330 | |||||||||||
Gross profit | 175,446 | 266,680 | 258,597 | 198,530 | 899,253 | ||||||||||||||||
Net income attributable to Watsco, Inc. | $ | 13,385 | $ | 51,318 | $ | 45,699 | $ | 17,321 | $ | 127,723 | |||||||||||
Earnings per share for Common and Class B common stock (2): | |||||||||||||||||||||
Basic | $ | 0.39 | $ | 1.48 | $ | 1.32 | $ | 0.5 | $ | 3.69 | |||||||||||
Diluted | $ | 0.39 | $ | 1.48 | $ | 1.32 | $ | 0.5 | $ | 3.68 | |||||||||||
Year Ended December 31, 2012 | |||||||||||||||||||||
Revenues (1) | $ | 633,512 | $ | 1,011,801 | $ | 1,020,859 | $ | 765,540 | $ | 3,431,712 | |||||||||||
Gross profit | 150,622 | 238,475 | 242,505 | 182,793 | 814,395 | ||||||||||||||||
Net income attributable to Watsco, Inc. | $ | 8,466 | $ | 39,103 | $ | 41,005 | $ | 14,760 | $ | 103,334 | |||||||||||
Earnings per share for Common and Class B common stock (2)(3): | |||||||||||||||||||||
Basic | $ | 0.23 | $ | 1.15 | $ | 1.19 | $ | 0.04 | $ | 2.7 | |||||||||||
Diluted | $ | 0.23 | $ | 1.15 | $ | 1.19 | $ | 0.04 | $ | 2.7 | |||||||||||
-1 | Sales of residential central air conditioners, heating equipment and parts and supplies are seasonal. Demand related to the residential central air conditioning replacement market is typically highest in the second and third quarters and demand for heating equipment is usually highest in the fourth quarter. Demand related to the new construction sectors throughout most of the markets is fairly consistent during the year, except for dependence on housing completions and related weather and economic conditions. | ||||||||||||||||||||
-2 | Quarterly and year-to-date earnings per share are calculated on an individual basis; therefore, the sum of earnings per share amounts for the quarters may not equal earnings per share amounts for the year. | ||||||||||||||||||||
-3 | On October 31, 2012, we paid a special dividend of $5.00 per share of Common and Class B common stock that resulted in a $0.37 per share and $0.33 per share reduction in diluted earnings per share for the quarter and year ended December 31, 2012, respectively. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 12 Months Ended | ||
Dec. 31, 2013 | |||
Nature of Operations | ' | ||
Nature of Operations | |||
Watsco, Inc. and its subsidiaries (collectively, “Watsco,” which may be referred to as “we”, “us” or “our”) was incorporated in Florida in 1956 and is the largest distributor of air conditioning, heating and refrigeration equipment and related parts and supplies (“HVAC/R”) in the HVAC/R distribution industry. At December 31, 2013, we operated from 569 locations in 38 U.S. states, Canada, Mexico and Puerto Rico with additional market coverage on an export basis to Latin America and the Caribbean. | |||
Basis of Consolidation | ' | ||
Basis of Consolidation | |||
The consolidated financial statements include the accounts of Watsco and all of its wholly owned subsidiaries and include the accounts of three joint ventures with Carrier Corporation (“Carrier”), in each of which Watsco maintains a controlling interest. All significant intercompany balances and transactions have been eliminated in consolidation. | |||
Reclassifications | ' | ||
Reclassifications | |||
Certain reclassifications of prior year amounts have been made to conform to the 2013 presentation. These reclassifications had no effect on net income or earnings per share as previously reported. | |||
Foreign Currency Translation and Transactions | ' | ||
Foreign Currency Translation and Transactions | |||
Our operations in Mexico consider their functional currency to be the U.S. dollar because the majority of their transactions are denominated in U.S. dollars. Gains or losses resulting from transactions denominated in Mexican pesos are recognized in earnings within selling, general and administrative expenses in our consolidated statements of income. | |||
The functional currency of our operations in Canada is the Canadian dollar. Foreign currency denominated assets and liabilities are translated into U.S. dollars at the exchange rates in effect at the balance sheet date, and income and expense items are translated at the average exchange rates in effect during the applicable period. The aggregate effect of foreign currency translation is recorded in accumulated other comprehensive loss in our consolidated balance sheets. Our net investment in our Canadian operations is recorded at the historical rate and the resulting foreign currency translation adjustments are included in accumulated other comprehensive loss in our consolidated balance sheets. Gains or losses resulting from transactions denominated in U.S. dollars are recognized in earnings within selling, general and administrative expenses in our consolidated statements of income. | |||
Use of Estimates | ' | ||
Use of Estimates | |||
The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses for the reporting period. Significant estimates include valuation reserves for accounts receivable, inventories and income taxes, reserves related to self-insurance programs and the valuation of goodwill and indefinite lived intangible assets. While we believe that these estimates are reasonable, actual results could differ from such estimates. | |||
Cash Equivalents | ' | ||
Cash Equivalents | |||
All highly liquid instruments purchased with original maturities of three months or less are considered to be cash equivalents. | |||
Accounts Receivable and Allowance for Doubtful Accounts | ' | ||
Accounts Receivable and Allowance for Doubtful Accounts | |||
Accounts receivable primarily consist of trade receivables due from customers and are stated at the invoiced amount less an allowance for doubtful accounts. An allowance for doubtful accounts is maintained for estimated losses resulting from the inability of customers to make required payments. When preparing these estimates, we consider a number of factors, including the aging of a customer’s account, past transactions with customers, creditworthiness of specific customers, historical trends and other information. Upon determination that an account is uncollectible, the receivable balance is written off. At December 31, 2013 and 2012, the allowance for doubtful accounts totaled $5,737 and $10,473, respectively. | |||
Inventories | ' | ||
Inventories | |||
Inventories consist of air conditioning, heating and refrigeration equipment and related parts and supplies and are valued at the lower of cost or market using a weighted-average cost basis and the first-in, first-out methods. As part of the valuation process, inventories are adjusted to reflect excess, slow-moving and damaged inventories at their estimated net realizable value. Inventory policies are reviewed periodically, reflecting current risks, trends and changes in industry conditions. A reserve for estimated inventory shrinkage is also maintained to consider inventory shortages determined from cycle counts and physical inventories. | |||
Vendor Rebates | ' | ||
Vendor Rebates | |||
We have arrangements with several vendors that provide rebates payable to us when we achieve any of a number of measures, generally related to the volume level of purchases. We account for such rebates as a reduction of inventory until we sell the product, at which time such rebates are reflected as a reduction of cost of sales in our consolidated statements of income. Throughout the year, we estimate the amount of the rebate based on our estimate of purchases to date relative to the purchase levels that mark our progress toward earning the rebates. We continually revise our estimates of earned vendor rebates based on actual purchase levels. At December 31, 2013 and 2012, we had $9,333 and $8,015, respectively, of rebates recorded as a reduction of inventory. Substantially all vendor rebate receivables are collected within three months immediately following the end of the year. | |||
Marketable Securities | ' | ||
Marketable Securities | |||
Investments in marketable equity securities are classified as available-for-sale and are included in other assets in our consolidated balance sheets. These equity securities are recorded at fair value using the specific identification method with unrealized holding losses, net of deferred taxes, included in accumulated other comprehensive loss within shareholders’ equity. Dividend and interest income are recognized in the statements of income when earned. | |||
Property and Equipment | ' | ||
Property and Equipment | |||
Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization of property and equipment is computed using the straight-line method. Buildings and improvements are depreciated or amortized over estimated useful lives ranging from 3-40 years. Leasehold improvements are amortized over the shorter of the respective lease terms or estimated useful lives. Estimated useful lives for other depreciable assets range from 3-10 years. | |||
Goodwill and Other Intangible Assets | ' | ||
Goodwill and Other Intangible Assets | |||
Goodwill is recorded when the purchase price paid for an acquisition exceeds the fair value of the net identified tangible and intangible assets acquired. We evaluate goodwill for impairment annually or more frequently when an event occurs or circumstances change that indicate that the carrying value may not be recoverable. We test goodwill for impairment by first comparing the fair value of our reporting unit to its carrying value. If the fair value is determined to be less than the carrying value, a second step is performed to measure the amount of impairment loss. | |||
Other intangible assets primarily consist of the value of trade names and trademarks, distributor agreements, customer relationships and non-compete agreements. Indefinite lived intangibles not subject to amortization are assessed for impairment at least annually, or more frequently if events or changes in circumstances indicate they may be impaired, by comparing the fair value of the intangible asset to its carrying amount to determine if a write-down to fair value is required. Finite lived intangible assets are amortized using the straight-line method over their respective estimated useful lives. | |||
We perform our annual impairment tests each year and have determined there to be no impairment for any of the periods presented. There were no events or circumstances identified from the date of our assessment that would require an update to our annual impairment tests. | |||
Long-Lived Assets | ' | ||
Long-Lived Assets | |||
Long-lived assets, other than goodwill, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. Recoverability is evaluated by determining whether the amortization of the balance over its remaining life can be recovered through undiscounted future operating cash flows. We measure the impairment loss based on projected discounted cash flows using a discount rate reflecting the average cost of funds and compared to the asset’s carrying value. As of December 31, 2013, there were no such events or circumstances. | |||
Fair Value Measurements | ' | ||
Fair Value Measurements | |||
We carry various assets and liabilities at fair value in the consolidated balance sheets. Fair value is defined as the price that would be received for an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. Fair value measurements are classified based on the following fair value hierarchy: | |||
Level 1 | Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis. | ||
Level 2 | Observable inputs other than Level 1 prices such as quoted prices in active markets for similar assets or liabilities; quoted prices in markets that are not active; or model-driven valuations or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. | ||
Level 3 | Unobservable inputs for the asset or liability. These inputs reflect our own assumptions about the assumptions a market participant would use in pricing the asset or liability. | ||
Revenue Recognition | ' | ||
Revenue Recognition | |||
Revenue primarily consists of sales of air conditioning, heating and refrigeration equipment and related parts and supplies and is recorded when shipment of products or delivery of services has occurred. Substantially all customer returns relate to products that are returned under warranty obligations underwritten by manufacturers, effectively mitigating our risk of loss for customer returns. Taxes collected from our customers and remitted to governmental authorities are presented in our consolidated statements of income on a net basis. | |||
Advertising Costs | ' | ||
Advertising Costs | |||
Advertising costs are expensed as incurred. Advertising expense for the years ended December 31, 2013, 2012 and 2011, was $22,418, $23,730 and $25,052, respectively. | |||
Shipping and Handling | ' | ||
Shipping and Handling | |||
Shipping and handling costs associated with inbound freight are capitalized to inventories and relieved through cost of sales as inventories are sold. Shipping and handling costs associated with the delivery of products is included in selling, general and administrative expenses. Shipping and handling costs for the years ended December 31, 2013, 2012 and 2011, was $39,395, $37,676 and $30,234, respectively. | |||
Share-Based Compensation | ' | ||
Share-Based Compensation | |||
The fair value of stock option and non-vested (restricted) stock awards are expensed on a straight-line basis over the vesting period of the awards. Share-based compensation expense is included in selling, general and administrative expenses in our consolidated statements of income. Cash flows from the tax benefits resulting from tax deductions in excess of the compensation expense recognized for those options (windfall tax benefits) are classified as financing cash flows. Tax benefits resulting from tax deductions in excess of share-based compensation expense recognized are credited to paid-in capital in the consolidated balance sheets. | |||
Income Taxes | ' | ||
Income Taxes | |||
We record United States federal, state and foreign income taxes currently payable, as well as deferred taxes due to temporary differences between reporting income and expenses for financial statement purposes versus tax purposes. Deferred tax assets and liabilities reflect the temporary differences between the financial statement and income tax basis of assets and liabilities. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in tax rates is recognized as income or expense in the period that includes the enactment date. We and our eligible subsidiaries file a consolidated United States federal income tax return. As income tax returns are generally not filed until well after the closing process for the December 31 financial statements is complete, the amounts recorded at December 31 reflect estimates of what the final amounts will be when the actual income tax returns are filed for that calendar year. In addition, estimates are often required with respect to, among other things, the appropriate state income tax rates to use in the various states that we and our subsidiaries are required to file, the potential utilization of operating loss carryforwards and valuation allowances required, if any, for tax assets that may not be realizable in the future. | |||
We recognize the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the “more-likely-than-not” threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the relevant tax authority. | |||
Earnings per Share | ' | ||
Earnings per Share | |||
We compute earnings per share using the two-class method. The two-class method of computing earnings per share is an earnings allocation formula that determines earnings per share for common stock and any participating securities according to dividends declared (whether paid or unpaid) and participation rights in undistributed earnings. Shares of our non-vested (restricted) stock are considered participating securities because these awards contain a non-forfeitable right to dividends irrespective of whether the awards ultimately vest. Under the two-class method, earnings per common share for our Common and Class B common stock is computed by dividing the sum of distributed earnings to common shareholders and undistributed earnings allocated to common shareholders by the weighted-average number of shares of Common and Class B common stock outstanding for the period. In applying the two-class method, undistributed earnings are allocated to Common stock, Class B common stock and participating securities based on the weighted-average shares outstanding during the period. | |||
Diluted earnings per share reflects the dilutive effect of potential common shares from stock options. The dilutive effect of outstanding stock options is computed using the treasury stock method, which assumes any proceeds that could be obtained upon the exercise of stock options, would be used to purchase common stock at the average market price for the period. The assumed proceeds include the purchase price the optionee pays, the windfall tax benefit that we receive upon assumed exercise and the unrecognized compensation expense at the end of each period. | |||
Derivative Instruments | ' | ||
Derivative Instruments | |||
All derivatives, whether designated in hedging relationships or not, are required to be recorded on the balance sheet at fair value. If the derivative is designated as a fair value hedge, the changes in the fair value of the derivative and of the hedged item attributable to the hedged risk are recognized in earnings. If the derivative is designated as a cash flow hedge, the effective portions of changes in the fair value of the derivative are recorded in other comprehensive income and are recognized in the income statement when the hedged item affects earnings. Ineffective portions of changes in the fair value of cash flow hedges are recognized in earnings. See Note 12, under the caption “Derivative Financial Instruments.” | |||
New Accounting Pronouncements | ' | ||
New Accounting Pronouncements | |||
Reporting Amounts Reclassified Out of Accumulated Other Comprehensive Income | |||
On January 1, 2013 we adopted guidance issued by the Financial Accounting Standards Board (“FASB”) that requires disclosure for amounts reclassified out of accumulated other comprehensive income by the respective line items of net income if the amount reclassified is required to be reclassified to net income in its entirety in the reporting period. For amounts that are not required to be reclassified in their entirety to net income, a cross-reference to other disclosures that provide additional detail about those amounts is required. The adoption of this guidance did not have an impact on our consolidated financial statements. | |||
Presentation of Unrecognized Tax Benefits | |||
In July 2013, the FASB issued guidance that requires the presentation of an unrecognized tax benefit as a reduction to a deferred tax asset for a net operating loss carryforward rather than as a liability when the uncertain tax position would reduce the net operating loss under the tax law of the applicable jurisdiction and the entity intends to use the deferred tax asset for that purpose. This guidance is effective prospectively for interim and annual reporting periods beginning after December 15, 2013. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements. |
Earnings_Per_Share_Tables
Earnings Per Share (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Schedule of Basic and Diluted Earnings Per Common Share | ' | ||||||||||||
The following table presents the calculation of basic and diluted earnings per common share for our Common and Class B common stock: | |||||||||||||
Years Ended December 31, | 2013 | 2012 | 2011 | ||||||||||
Basic Earnings per Share: | |||||||||||||
Net income attributable to Watsco, Inc. shareholders | $ | 127,723 | $ | 103,334 | $ | 90,450 | |||||||
Less: distributed and undistributed earnings allocated to non-vested (restricted) common stock | 9,064 | 17,656 | 6,045 | ||||||||||
Earnings allocated to Watsco, Inc. shareholders | $ | 118,659 | $ | 85,678 | $ | 84,405 | |||||||
Weighted-average common shares outstanding - Basic | 32,195,598 | 31,680,187 | 30,678,206 | ||||||||||
Basic earnings per share for Common and Class B common stock | $ | 3.69 | $ | 2.7 | $ | 2.75 | |||||||
Allocation of earnings for Basic: | |||||||||||||
Common stock | $ | 108,690 | $ | 78,359 | $ | 76,574 | |||||||
Class B common stock | 9,969 | 7,319 | 7,831 | ||||||||||
$ | 118,659 | $ | 85,678 | $ | 84,405 | ||||||||
Diluted Earnings per Share: | |||||||||||||
Net income attributable to Watsco, Inc. shareholders | $ | 127,723 | $ | 103,334 | $ | 90,450 | |||||||
Less: distributed and undistributed earnings allocated to non-vested (restricted) common stock | 9,053 | 17,656 | 6,042 | ||||||||||
Earnings allocated to Watsco, Inc. shareholders | $ | 118,670 | $ | 85,678 | $ | 84,408 | |||||||
Weighted-average common shares outstanding - Basic | 32,195,598 | 31,680,187 | 30,678,206 | ||||||||||
Effect of dilutive stock options | 62,470 | 64,212 | 75,085 | ||||||||||
Weighted-average common shares outstanding - Diluted | 32,258,068 | 31,744,399 | 30,753,291 | ||||||||||
Diluted earnings per share for Common and Class B common stock | $ | 3.68 | $ | 2.7 | $ | 2.74 | |||||||
Other_Comprehensive_Loss_Incom1
Other Comprehensive (Loss) Income (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Schedule of Tax Effects Allocated to Each Component of Other Comprehensive (Loss) Income | ' | ||||||||||||
The tax effects allocated to each component of other comprehensive (loss) income are as follows: | |||||||||||||
Years Ended December 31, | 2013 | 2012 | 2011 | ||||||||||
Foreign currency translation adjustment | $ | (16,365 | ) | $ | (3,191 | ) | $ | — | |||||
Unrealized gain on available-for-sale securities | 39 | 63 | 6 | ||||||||||
Income tax expense | (15 | ) | (28 | ) | (3 | ) | |||||||
Unrealized gain on available-for-sale securities, net of tax | 24 | 35 | 3 | ||||||||||
Unrealized gain on derivative instrument | — | — | 384 | ||||||||||
Income tax expense | — | — | (146 | ) | |||||||||
Unrealized gain on derivative instrument, net of tax | — | — | 238 | ||||||||||
Other comprehensive (loss) income | $ | (16,341 | ) | $ | (3,156 | ) | $ | 241 | |||||
Schedule of Accumulated Other Comprehensive Loss | ' | ||||||||||||
The changes in accumulated other comprehensive loss, net of tax, are as follows: | |||||||||||||
Years Ended December 31, | 2013 | 2012 | 2011 | ||||||||||
Foreign currency translation adjustment: | |||||||||||||
Beginning balance | $ | (1,785 | ) | $ | — | $ | — | ||||||
Current period other comprehensive loss | (9,396 | ) | (1,785 | ) | — | ||||||||
Ending balance | (11,181 | ) | (1,785 | ) | — | ||||||||
Available-for-sale securities: | |||||||||||||
Beginning balance | (317 | ) | (352 | ) | (355 | ) | |||||||
Current period other comprehensive income | 24 | 35 | 3 | ||||||||||
Ending balance | (293 | ) | (317 | ) | (352 | ) | |||||||
Derivative instrument: | |||||||||||||
Beginning balance | — | — | (238 | ) | |||||||||
Current period other comprehensive income | — | — | 238 | ||||||||||
Ending balance | — | — | — | ||||||||||
Accumulated other comprehensive loss, net of tax | $ | (11,474 | ) | $ | (2,102 | ) | $ | (352 | ) | ||||
Property_and_Equipment_Tables
Property and Equipment (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Property and Equipment, Net | ' | ||||||||
Property and equipment, net, consists of: | |||||||||
December 31, | 2013 | 2012 | |||||||
Land | $ | 1,131 | $ | 1,131 | |||||
Buildings and improvements | 49,942 | 48,457 | |||||||
Machinery, vehicles and equipment | 64,012 | 57,130 | |||||||
Furniture and fixtures | 20,523 | 18,251 | |||||||
135,608 | 124,969 | ||||||||
Accumulated depreciation and amortization | (90,190 | ) | (82,127 | ) | |||||
$ | 45,418 | $ | 42,842 | ||||||
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Components of Income Tax Expense | ' | ||||||||||||
The components of income tax expense from our wholly-owned operations and investments and our controlling interest in joint ventures with Carrier are as follows: | |||||||||||||
Years Ended December 31, | 2013 | 2012 | 2011 | ||||||||||
U.S. Federal | $ | 62,616 | $ | 50,919 | $ | 50,197 | |||||||
State | 9,234 | 6,245 | 6,338 | ||||||||||
Foreign | 5,810 | 5,478 | 315 | ||||||||||
$ | 77,660 | $ | 62,642 | $ | 56,850 | ||||||||
Current | $ | 69,071 | $ | 55,918 | $ | 48,540 | |||||||
Deferred | 8,589 | 6,724 | 8,310 | ||||||||||
$ | 77,660 | $ | 62,642 | $ | 56,850 | ||||||||
Reconciliation of Effective Income Tax Rate | ' | ||||||||||||
Following is a reconciliation of the effective income tax rate: | |||||||||||||
Years Ended December 31, | 2013 | 2012 | 2011 | ||||||||||
U.S. federal statutory rate | 35 | % | 35 | % | 35 | % | |||||||
State income taxes, net of federal benefit and other | 3.3 | 2.5 | 3.1 | ||||||||||
Tax effects on foreign income | (1.3 | ) | (0.8 | ) | (0.1 | ) | |||||||
Effective income tax rate attributable to Watsco, Inc. | 37 | 36.7 | 38 | ||||||||||
Taxes attributable to noncontrolling interest | (7.7 | ) | (8.3 | ) | (8.8 | ) | |||||||
Effective income tax rate | 29.3 | % | 28.4 | % | 29.2 | % | |||||||
Significant Components of Current and Long-Term Deferred Tax Assets and Liabilities | ' | ||||||||||||
The following is a summary of the significant components of our current and long-term deferred tax assets and liabilities: | |||||||||||||
December 31, | 2013 | 2012 | |||||||||||
Current deferred tax assets: | |||||||||||||
Capitalized inventory costs and inventory reserves | $ | 2,883 | $ | 2,386 | |||||||||
Self-insurance reserves | 1,093 | 1,039 | |||||||||||
Allowance for doubtful accounts | 882 | 1,084 | |||||||||||
Other current deferred tax assets | 1,539 | 1,215 | |||||||||||
Total current deferred tax assets (1) | 6,397 | 5,724 | |||||||||||
Long-term deferred tax assets: | |||||||||||||
Share-based compensation | 17,455 | 13,911 | |||||||||||
Other long-term deferred tax assets | 909 | 797 | |||||||||||
Net operating loss carryforwards | 283 | 609 | |||||||||||
18,647 | 15,317 | ||||||||||||
Valuation allowance | (75 | ) | (391 | ) | |||||||||
Total long-term deferred tax assets (2) | 18,572 | 14,926 | |||||||||||
Current deferred tax liabilities: | |||||||||||||
Other current deferred tax liabilities | (1,304 | ) | (36 | ) | |||||||||
Total current deferred tax liabilities (1) | (1,304 | ) | (36 | ) | |||||||||
Long-term deferred tax liabilities: | |||||||||||||
Deductible goodwill | (76,519 | ) | (66,636 | ) | |||||||||
Depreciation | (2,873 | ) | (3,100 | ) | |||||||||
Other long-term deferred tax liabilities | (2,556 | ) | (1,322 | ) | |||||||||
Total long-term deferred tax liabilities (2) | (81,948 | ) | (71,058 | ) | |||||||||
Net deferred tax liabilities | $ | (58,283 | ) | $ | (50,444 | ) | |||||||
-1 | Current deferred tax assets and liabilities have been included in the consolidated balance sheets in other current assets. | ||||||||||||
-2 | Long-term deferred tax assets and liabilities have been included in the consolidated balance sheets in deferred income taxes and other liabilities. | ||||||||||||
Changes in Gross Unrecognized Tax Benefits | ' | ||||||||||||
The changes in gross unrecognized tax benefits are as follows: | |||||||||||||
Balance at December 31, 2010 | $ | 1,889 | |||||||||||
Additions based on tax positions related to the current year | 542 | ||||||||||||
Reductions due to lapse of applicable statute of limitations | (7 | ) | |||||||||||
Balance at December 31, 2011 | 2,424 | ||||||||||||
Additions based on tax positions related to the current year | 416 | ||||||||||||
Reductions due to lapse of applicable statute of limitations | (366 | ) | |||||||||||
Balance at December 31, 2012 | 2,474 | ||||||||||||
Additions based on tax positions related to the current year | 673 | ||||||||||||
Reductions due to lapse of applicable statute of limitations | (12 | ) | |||||||||||
Balance at December 31, 2013 | $ | 3,135 | |||||||||||
ShareBased_Compensation_and_Be1
Share-Based Compensation and Benefit Plans (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||
Summary of Stock Option Activity | ' | ||||||||||||||||
The following is a summary of stock option activity under the 2001 Plan as of and for the year ended December 31, 2013: | |||||||||||||||||
Options | Weighted- | Weighted- | Aggregate | ||||||||||||||
Average | Average | Intrinsic | |||||||||||||||
Exercise | Remaining | Value | |||||||||||||||
Price | Contractual | ||||||||||||||||
Term | |||||||||||||||||
(in years) | |||||||||||||||||
Options outstanding at December 31, 2012 | 324,150 | $ | 56.21 | ||||||||||||||
Granted | 30,000 | 82.32 | |||||||||||||||
Exercised | (79,450 | ) | 34.65 | ||||||||||||||
Forfeited | (7,000 | ) | 65.31 | ||||||||||||||
Expired | — | — | |||||||||||||||
Options outstanding at December 31, 2013 | 267,700 | $ | 65.3 | 2.65 | $ | 8,234 | |||||||||||
Options exercisable at December 31, 2013 | 50,784 | $ | 60.13 | 2.12 | $ | 1,824 | |||||||||||
Summary of Non-Vested (Restricted) Stock Activity | ' | ||||||||||||||||
The following is a summary of non-vested (restricted) stock activity as of and for the year ended December 31, 2013: | |||||||||||||||||
Shares | Weighted- | ||||||||||||||||
Average | |||||||||||||||||
Grant Date | |||||||||||||||||
Fair Value | |||||||||||||||||
Non-vested (restricted) stock outstanding at December 31, 2012 | 2,373,249 | $ | 38.75 | ||||||||||||||
Granted | 124,043 | 80.21 | |||||||||||||||
Forfeited | (10,000 | ) | 68.36 | ||||||||||||||
Non-vested (restricted) stock outstanding at December 31, 2013 | 2,487,292 | $ | 40.7 | ||||||||||||||
Weighted-Average Assumptions Relating to Valuation of Our Stock Options | ' | ||||||||||||||||
The following table presents the weighted-average assumptions used for stock options granted: | |||||||||||||||||
Years Ended December 31, | 2013 | 2012 | 2011 | ||||||||||||||
Expected term in years | 4.25 | 4.25 | 4.25 | ||||||||||||||
Risk-free interest rate | 0.82 | % | 0.57 | % | 1.12 | % | |||||||||||
Expected volatility | 24.56 | % | 31.4 | % | 32.59 | % | |||||||||||
Expected dividend yield | 2.2 | % | 3.49 | % | 3.48 | % | |||||||||||
Grant date fair value | $ | 13.33 | $ | 12.9 | $ | 12.31 | |||||||||||
Share-Based Compensation Expense | ' | ||||||||||||||||
The following table provides information on share-based compensation expense: | |||||||||||||||||
Years Ended December 31, | 2013 | 2012 | 2011 | ||||||||||||||
Stock options | $ | 884 | $ | 846 | $ | 612 | |||||||||||
Non-vested (restricted) stock | 9,083 | 7,093 | 6,051 | ||||||||||||||
Share-based compensation expense | $ | 9,967 | $ | 7,939 | $ | 6,663 | |||||||||||
Acquisitions_Tables
Acquisitions (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2013 | |||||||||
Schedule of Unaudited Pro Forma Financial Information from Joint Venture | ' | ||||||||
The unaudited pro forma financial information, combining our results of operations with the operations of Carrier Enterprise II and Carrier Enterprise III as if the joint ventures had been formed on January 1, 2011, is as follows: | |||||||||
Years ended December 31, | 2012 | 2011 | |||||||
Revenues | $ | 3,526,621 | $ | 3,404,381 | |||||
Net income | 156,728 | 159,147 | |||||||
Less: net income attributable to noncontrolling interest | 54,153 | 60,380 | |||||||
Net income attributable to Watsco, Inc. | $ | 102,575 | $ | 98,767 | |||||
Diluted earnings per share for Common and Class B common stock | $ | 2.64 | $ | 2.89 | |||||
Carrier Enterprise II | ' | ||||||||
Purchase Price Allocation for Joint Venture | ' | ||||||||
The table below presents the allocation of the total consideration to tangible and intangible assets acquired, liabilities assumed and the noncontrolling interest from the acquisition of our 60% controlling interest in the joint venture based on the respective fair values as of April 29, 2011: | |||||||||
Cash | $ | 5 | |||||||
Accounts receivable | 24,300 | ||||||||
Inventories | 39,003 | ||||||||
Other current assets | 773 | ||||||||
Property and equipment | 4,402 | ||||||||
Goodwill | 12,357 | ||||||||
Intangibles | 20,600 | ||||||||
Other assets | 202 | ||||||||
Accounts payable and accrued expenses | (22,894 | ) | |||||||
Noncontrolling interest | (29,519 | ) | |||||||
Total purchase price | $ | 49,229 | |||||||
Carrier Enterprise III | ' | ||||||||
Purchase Price Allocation for Joint Venture | ' | ||||||||
The table below presents the allocation of the total consideration to tangible and intangible assets acquired, liabilities assumed and the noncontrolling interest from the acquisition of our 60% controlling interest in Carrier Enterprise III based on the respective fair values as of April 27, 2012: | |||||||||
Cash | $ | 10 | |||||||
Accounts receivable | 46,718 | ||||||||
Inventories | 55,024 | ||||||||
Other current assets | 481 | ||||||||
Property and equipment | 2,517 | ||||||||
Goodwill | 65,291 | ||||||||
Intangible assets | 151,172 | ||||||||
Other assets | 978 | ||||||||
Accounts payable and accrued expenses | (44,208 | ) | |||||||
Noncontrolling interest | (104,244 | ) | |||||||
Total purchase price | $ | 173,739 | |||||||
Goodwill_and_Other_Intangible_1
Goodwill and Other Intangible Assets (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2013 | |||||||||||
Changes in Carrying Amount of Goodwill | ' | ||||||||||
The changes in the carrying amount of goodwill are as follows: | |||||||||||
Balance at December 31, 2011 | $ | 319,440 | |||||||||
Acquired goodwill | 77,829 | ||||||||||
Foreign currency translation adjustment | (7 | ) | |||||||||
Balance at December 31, 2012 | 397,262 | ||||||||||
Foreign currency translation adjustment | (4,652 | ) | |||||||||
Balance at December 31, 2013 | $ | 392,610 | |||||||||
Indefinite Lived Intangible Assets-Trade Names, Trademarks And Distribution Rights | ' | ||||||||||
Other intangible assets are comprised of the following: | |||||||||||
December 31, | Estimated | 2013 | 2012 | ||||||||
Useful Lives | |||||||||||
Indefinite lived intangible assets - Trade names, trademarks and distribution rights | $ | 138,599 | $ | 144,683 | |||||||
Finite lived intangible assets: | |||||||||||
Customer relationships | 10-15 years | 80,865 | 84,410 | ||||||||
Trade name | 10 years | 1,150 | 1,150 | ||||||||
Non-compete agreements | 7 years | 369 | 369 | ||||||||
Accumulated amortization | (17,140 | ) | (11,111 | ) | |||||||
Finite lived intangible assets, net | 65,244 | 74,818 | |||||||||
$ | 203,843 | $ | 219,501 | ||||||||
Finite lived intangible assets | ' | ||||||||||
Other intangible assets are comprised of the following: | |||||||||||
December 31, | Estimated | 2013 | 2012 | ||||||||
Useful Lives | |||||||||||
Indefinite lived intangible assets - Trade names, trademarks and distribution rights | $ | 138,599 | $ | 144,683 | |||||||
Finite lived intangible assets: | |||||||||||
Customer relationships | 10-15 years | 80,865 | 84,410 | ||||||||
Trade name | 10 years | 1,150 | 1,150 | ||||||||
Non-compete agreements | 7 years | 369 | 369 | ||||||||
Accumulated amortization | (17,140 | ) | (11,111 | ) | |||||||
Finite lived intangible assets, net | 65,244 | 74,818 | |||||||||
$ | 203,843 | $ | 219,501 | ||||||||
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 12 Months Ended | ||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||
Assets and Liabilities Measured at Fair Value on Recurring Basis | ' | ||||||||||||||||||
The following tables present our assets and liabilities carried at fair value that are measured on a recurring basis: | |||||||||||||||||||
Fair Value Measurements | |||||||||||||||||||
at December 31, 2013 Using | |||||||||||||||||||
Balance Sheet Location | Total | Level 1 | Level 2 | Level 3 | |||||||||||||||
Assets: | |||||||||||||||||||
Available-for-sale securities | Other assets | $ | 265 | $ | 265 | — | — | ||||||||||||
Derivative financial instruments | Other current assets | $ | 118 | — | $ | 118 | — | ||||||||||||
Fair Value Measurements | |||||||||||||||||||
at December 31, 2012 Using | |||||||||||||||||||
Balance Sheet Location | Total | Level 1 | Level 2 | Level 3 | |||||||||||||||
Assets: | |||||||||||||||||||
Available-for-sale securities | Other assets | $ | 226 | $ | 226 | — | — | ||||||||||||
Liabilities: | |||||||||||||||||||
Derivative financial instruments | Accrued expenses and other current liabilities | $ | 197 | — | $ | 197 | — |
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 12 Months Ended | ||||
Dec. 31, 2013 | |||||
Future Minimum Lease Payments under Non-Cancelable Operating Leases | ' | ||||
At December 31, 2013, future minimum payments under non-cancelable operating leases over each of the next five years and thereafter were as follows: | |||||
2014 | $ | 64,967 | |||
2015 | 54,508 | ||||
2016 | 43,322 | ||||
2017 | 28,356 | ||||
2018 | 14,006 | ||||
Thereafter | 8,388 | ||||
Total minimum payments | $ | 213,547 | |||
Information_about_Geographic_A1
Information about Geographic Areas (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Revenues and Long-Lived Assets by Geographical Area | ' | ||||||||||||
Our operations are primarily within the United States and Puerto Rico. Products are sold on an export-only basis to portions of Latin America and the Caribbean Basin. The following tables set forth revenues and long-lived assets by geographical area: | |||||||||||||
Years Ended December 31, | 2013 | 2012 | 2011 | ||||||||||
Revenues: | |||||||||||||
United States | $ | 3,325,114 | $ | 3,087,256 | $ | 2,938,907 | |||||||
Canada | 318,165 | 240,254 | — | ||||||||||
Mexico | 100,051 | 104,202 | 38,852 | ||||||||||
Total Revenues | $ | 3,743,330 | $ | 3,431,712 | $ | 2,977,759 | |||||||
December 31, | 2013 | 2012 | |||||||||||
Long-Lived Assets: | |||||||||||||
United States | $ | 429,202 | $ | 429,153 | |||||||||
Canada | 207,340 | 225,076 | |||||||||||
Mexico | 5,329 | 5,376 | |||||||||||
Total Long-Lived Assets | $ | 641,871 | $ | 659,605 | |||||||||
Supplemental_Cash_Flow_Informa1
Supplemental Cash Flow Information (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2013 | |||||||||||||
Supplemental Cash Flow Information | ' | ||||||||||||
Supplemental cash flow information was as follows: | |||||||||||||
Years Ended December 31, | 2013 | 2012 | 2011 | ||||||||||
Interest paid | $ | 5,334 | $ | 2,802 | $ | 1,854 | |||||||
Income taxes net of refunds | $ | 73,168 | $ | 46,819 | $ | 45,137 | |||||||
Common stock issued for Carrier Enterprise III | — | $ | 93,250 | — | |||||||||
Net assets of locations contributed to Carrier Enterprise II | — | — | $ | 14,769 |
Selected_Quarterly_Financial_D1
Selected Quarterly Financial Data (Tables) | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2013 | |||||||||||||||||||||
Selected Quarterly Financial Data | ' | ||||||||||||||||||||
WATSCO, INC. AND SUBSIDIARIES | |||||||||||||||||||||
SELECTED QUARTERLY FINANCIAL DATA | |||||||||||||||||||||
(UNAUDITED) | |||||||||||||||||||||
(In thousands, except per share data) | 1st | 2nd | 3rd | 4th | Total | ||||||||||||||||
Quarter | Quarter | Quarter | Quarter | ||||||||||||||||||
Year Ended December 31, 2013 | |||||||||||||||||||||
Revenues (1) | $ | 713,633 | $ | 1,120,452 | $ | 1,081,893 | $ | 827,352 | $ | 3,743,330 | |||||||||||
Gross profit | 175,446 | 266,680 | 258,597 | 198,530 | 899,253 | ||||||||||||||||
Net income attributable to Watsco, Inc. | $ | 13,385 | $ | 51,318 | $ | 45,699 | $ | 17,321 | $ | 127,723 | |||||||||||
Earnings per share for Common and Class B common stock (2): | |||||||||||||||||||||
Basic | $ | 0.39 | $ | 1.48 | $ | 1.32 | $ | 0.5 | $ | 3.69 | |||||||||||
Diluted | $ | 0.39 | $ | 1.48 | $ | 1.32 | $ | 0.5 | $ | 3.68 | |||||||||||
Year Ended December 31, 2012 | |||||||||||||||||||||
Revenues (1) | $ | 633,512 | $ | 1,011,801 | $ | 1,020,859 | $ | 765,540 | $ | 3,431,712 | |||||||||||
Gross profit | 150,622 | 238,475 | 242,505 | 182,793 | 814,395 | ||||||||||||||||
Net income attributable to Watsco, Inc. | $ | 8,466 | $ | 39,103 | $ | 41,005 | $ | 14,760 | $ | 103,334 | |||||||||||
Earnings per share for Common and Class B common stock (2)(3): | |||||||||||||||||||||
Basic | $ | 0.23 | $ | 1.15 | $ | 1.19 | $ | 0.04 | $ | 2.7 | |||||||||||
Diluted | $ | 0.23 | $ | 1.15 | $ | 1.19 | $ | 0.04 | $ | 2.7 | |||||||||||
-1 | Sales of residential central air conditioners, heating equipment and parts and supplies are seasonal. Demand related to the residential central air conditioning replacement market is typically highest in the second and third quarters and demand for heating equipment is usually highest in the fourth quarter. Demand related to the new construction sectors throughout most of the markets is fairly consistent during the year, except for dependence on housing completions and related weather and economic conditions. | ||||||||||||||||||||
-2 | Quarterly and year-to-date earnings per share are calculated on an individual basis; therefore, the sum of earnings per share amounts for the quarters may not equal earnings per share amounts for the year. | ||||||||||||||||||||
-3 | On October 31, 2012, we paid a special dividend of $5.00 per share of Common and Class B common stock that resulted in a $0.37 per share and $0.33 per share reduction in diluted earnings per share for the quarter and year ended December 31, 2012, respectively. |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies - Additional Information (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Entity | |||
Significant Accounting Policies [Line Items] | ' | ' | ' |
Number of joint ventures | 3 | ' | ' |
Allowance for doubtful accounts | $5,737 | $10,473 | ' |
Capitalized vendor rebates | 9,333 | 8,015 | ' |
Advertising expense | 22,418 | 23,730 | 25,052 |
Shipping and handling costs | $39,395 | $37,676 | $30,234 |
Minimum | Buildings and Improvements | ' | ' | ' |
Significant Accounting Policies [Line Items] | ' | ' | ' |
Estimated useful lives in years | '3 years | ' | ' |
Minimum | Other Depreciable Assets | ' | ' | ' |
Significant Accounting Policies [Line Items] | ' | ' | ' |
Estimated useful lives in years | '3 years | ' | ' |
Maximum | Buildings and Improvements | ' | ' | ' |
Significant Accounting Policies [Line Items] | ' | ' | ' |
Estimated useful lives in years | '40 years | ' | ' |
Maximum | Other Depreciable Assets | ' | ' | ' |
Significant Accounting Policies [Line Items] | ' | ' | ' |
Estimated useful lives in years | '10 years | ' | ' |
Watsco, Inc. | ' | ' | ' |
Significant Accounting Policies [Line Items] | ' | ' | ' |
Number of locations from which entity operates | 569 | ' | ' |
Number of states in which entity operates | 38 | ' | ' |
Schedule_of_Basic_and_Diluted_
Schedule of Basic and Diluted Earnings per Common Share (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||||||||||||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | ||||||||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||
Net income attributable to Watsco, Inc. shareholders | $17,321 | $45,699 | $51,318 | $13,385 | $14,760 | $41,005 | $39,103 | $8,466 | $127,723 | $103,334 | $90,450 | ||||||||||
Less: distributed and undistributed earnings allocated to non-vested (restricted) common stock - basic | ' | ' | ' | ' | ' | ' | ' | ' | 9,064 | 17,656 | 6,045 | ||||||||||
Earnings allocated to Watsco, Inc. shareholders - basic | ' | ' | ' | ' | ' | ' | ' | ' | 118,659 | 85,678 | 84,405 | ||||||||||
Weighted-average common shares outstanding - Basic | ' | ' | ' | ' | ' | ' | ' | ' | 32,195,598 | 31,680,187 | 30,678,206 | ||||||||||
Basic earnings per share for Common and Class B common stock | $0.50 | [1] | $1.32 | [1] | $1.48 | [1] | $0.39 | [1] | $0.04 | [1],[2] | $1.19 | [1] | $1.15 | [1] | $0.23 | [1] | $3.69 | [1] | $2.70 | [1],[2] | $2.75 |
Net income attributable to Watsco, Inc. shareholders | 17,321 | 45,699 | 51,318 | 13,385 | 14,760 | 41,005 | 39,103 | 8,466 | 127,723 | 103,334 | 90,450 | ||||||||||
Less: distributed and undistributed earnings allocated to non-vested (restricted) common stock - diluted | ' | ' | ' | ' | ' | ' | ' | ' | 9,053 | 17,656 | 6,042 | ||||||||||
Earnings allocated to Watsco, Inc. shareholders | ' | ' | ' | ' | ' | ' | ' | ' | 118,670 | 85,678 | 84,408 | ||||||||||
Weighted-average common shares outstanding - Basic | ' | ' | ' | ' | ' | ' | ' | ' | 32,195,598 | 31,680,187 | 30,678,206 | ||||||||||
Effect of dilutive stock options | ' | ' | ' | ' | ' | ' | ' | ' | 62,470 | 64,212 | 75,085 | ||||||||||
Weighted-average common shares outstanding - Diluted | ' | ' | ' | ' | ' | ' | ' | ' | 32,258,068 | 31,744,399 | 30,753,291 | ||||||||||
Diluted earnings per share for Common and Class B common stock | $0.50 | [1] | $1.32 | [1] | $1.48 | [1] | $0.39 | [1] | $0.04 | [1],[2] | $1.19 | [1] | $1.15 | [1] | $0.23 | [1] | $3.68 | [1] | $2.70 | [1],[2] | $2.74 |
Common Stock | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||
Earnings allocated to Watsco, Inc. shareholders - basic | ' | ' | ' | ' | ' | ' | ' | ' | 108,690 | 78,359 | 76,574 | ||||||||||
Class B Common Stock | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||
Earnings allocated to Watsco, Inc. shareholders - basic | ' | ' | ' | ' | ' | ' | ' | ' | $9,969 | $7,319 | $7,831 | ||||||||||
[1] | Quarterly and year-to-date earnings per share are calculated on an individual basis; therefore, the sum of earnings per share amounts for the quarters may not equal earnings per share amounts for the year. | ||||||||||||||||||||
[2] | On October 31, 2012, we paid a special dividend of $5.00 per share of Common and Class B common stock that resulted in a $0.37 per share and $0.33 per share reduction in diluted earnings per share for the quarter and year ended December 31, 2012, respectively. |
Earnings_Per_Share_Additional_
Earnings Per Share - Additional Information (Detail) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Earnings Per Share [Line Items] | ' | ' | ' |
Diluted earnings per share, excluded shares having anti-dilutive effect | 1,066 | 17,492 | 33,511 |
Class B Common Stock | ' | ' | ' |
Earnings Per Share [Line Items] | ' | ' | ' |
Convertible Class B common stock outstanding | 2,704,832 | 2,706,338 | 2,846,334 |
Schedule_of_Tax_Effects_Alloca
Schedule of Tax Effects Allocated to Each Component of Other Comprehensive (Loss) Income (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Components Of Other Comprehensive Income Loss [Line Items] | ' | ' | ' |
Foreign currency translation adjustment | ($16,365) | ($3,191) | ' |
Unrealized gain on available-for-sale securities | 39 | 63 | 6 |
Income tax expense | -15 | -28 | -3 |
Unrealized gain on available-for-sale securities, net of tax | 24 | 35 | 3 |
Unrealized gain on derivative instrument | ' | ' | 384 |
Income tax expense | ' | ' | -146 |
Unrealized gain on derivative instrument, net of tax | ' | ' | 238 |
Other comprehensive (loss) income | ($16,341) | ($3,156) | $241 |
Schedule_of_Accumulated_Other_
Schedule of Accumulated Other Comprehensive Loss (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ' | ' | ' |
Beginning balance, Foreign currency translation adjustment | ($1,785) | ' | ' |
Current period other comprehensive loss | -9,396 | -1,785 | ' |
Ending balance, Foreign currency translation adjustment | -11,181 | -1,785 | ' |
Beginning balance, Available-for-sale securities | -317 | -352 | -355 |
Current period other comprehensive income | 24 | 35 | 3 |
Ending balance, Available-for-sale securities | -293 | -317 | -352 |
Beginning balance, Derivative instrument | ' | ' | -238 |
Current period other comprehensive income | ' | ' | 238 |
Accumulated other comprehensive loss, net of tax | ($11,474) | ($2,102) | ($352) |
Supplier_Concentration_Additio
Supplier Concentration - Additional Information (Detail) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Vendor | |||
Concentration Risk [Line Items] | ' | ' | ' |
Percentage of purchases from key suppliers | 73.00% | 72.00% | 71.00% |
Number of key suppliers | 4 | ' | ' |
Carrier | Supplier Concentration Risk | ' | ' | ' |
Concentration Risk [Line Items] | ' | ' | ' |
Percentage of purchases from key suppliers | 59.00% | 57.00% | 54.00% |
Property_and_Equipment_Net_Det
Property and Equipment, Net (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Property, Plant and Equipment [Line Items] | ' | ' |
Property and equipment, gross | $135,608 | $124,969 |
Accumulated depreciation and amortization | -90,190 | -82,127 |
Property and equipment, net | 45,418 | 42,842 |
Land | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property and equipment, gross | 1,131 | 1,131 |
Buildings and Improvements | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property and equipment, gross | 49,942 | 48,457 |
Machinery, vehicles and equipment | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property and equipment, gross | 64,012 | 57,130 |
Furniture and fixtures | ' | ' |
Property, Plant and Equipment [Line Items] | ' | ' |
Property and equipment, gross | $20,523 | $18,251 |
Property_and_Equipment_Additio
Property and Equipment - Additional Information (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Property, Plant and Equipment [Line Items] | ' | ' | ' |
Depreciation and amortization expense | $11,677 | $10,986 | $9,364 |
Debt_Additional_Information_De
Debt - Additional Information (Detail) (USD $) | 12 Months Ended | 1 Months Ended | 12 Months Ended | 1 Months Ended | 12 Months Ended | 1 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Jul. 31, 2013 | Jul. 31, 2013 | Jul. 31, 2013 | Jul. 31, 2013 | Dec. 31, 2013 | Jul. 31, 2013 | Jul. 31, 2013 | Dec. 31, 2013 | Jul. 31, 2013 | Jul. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2013 |
Minimum | Maximum | Before Extension | After Extension | Scenario 1 | Scenario 1 | Scenario 1 | Scenario 2 | Scenario 2 | Scenario 2 | Swingline Subfacility | Letter of Credit | Multicurrency borrowing sublimit | |||
Minimum | Maximum | Minimum | Maximum | ||||||||||||
Debt Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revolving credit agreement maximum borrowing capacity | $500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $65,000 | $50,000 | $75,000 |
Revolving credit agreement maturity date | ' | ' | ' | ' | 27-Apr-17 | 1-Jul-18 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Basis spread | ' | ' | ' | ' | ' | ' | 1.25% | 0.88% | 2.50% | 0.25% | 0.00% | 1.50% | ' | ' | ' |
Commitment fee percentage on unused portion of the commitment | 0.18% | ' | 0.13% | 0.35% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Outstanding amount under revolving credit agreement | $230,044 | $316,182 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Components_of_Income_Tax_Expen
Components of Income Tax Expense (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Components Of Income Tax Expense Benefit [Line Items] | ' | ' | ' |
U.S. Federal | $62,616 | $50,919 | $50,197 |
State | 9,234 | 6,245 | 6,338 |
Foreign | 5,810 | 5,478 | 315 |
Income tax expense | 77,660 | 62,642 | 56,850 |
Current | 69,071 | 55,918 | 48,540 |
Deferred | 8,589 | 6,724 | 8,310 |
Income tax expense | $77,660 | $62,642 | $56,850 |
Income_Taxes_Additional_Inform
Income Taxes - Additional Information (Detail) (USD $) | 12 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 |
Income Taxes [Line Items] | ' | ' | ' | ' |
Percentage of income attributable to wholly-owned operations and investments for which income tax expense and effective tax rate calculated | 100.00% | ' | ' | ' |
Undistributed earnings of foreign subsidiaries | $55,000 | ' | ' | ' |
Valuation allowance | 75 | 391 | ' | ' |
State and other net operating loss carry forwards | 7,117 | ' | ' | ' |
Gross unrecognized tax benefits | 3,135 | 2,474 | 2,424 | 1,889 |
Unrecognized tax benefits that, if recognized, would affect the effective tax rate | 2,038 | 1,609 | ' | ' |
Estimated accrued interest and penalties resulting from unrecognized tax benefits | $630 | $583 | ' | ' |
Minimum | ' | ' | ' | ' |
Income Taxes [Line Items] | ' | ' | ' | ' |
State and other net operating loss carry forwards expiration date | '2014 | ' | ' | ' |
Maximum | ' | ' | ' | ' |
Income Taxes [Line Items] | ' | ' | ' | ' |
State and other net operating loss carry forwards expiration date | '2026 | ' | ' | ' |
Reconciliation_of_Effective_In
Reconciliation of Effective Income Tax Rate (Detail) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Reconciliation of Effective Income Tax Rate [Line Items] | ' | ' | ' |
U.S. federal statutory rate | 35.00% | 35.00% | 35.00% |
State income taxes, net of federal benefit and other | 3.30% | 2.50% | 3.10% |
Tax effects on foreign income | -1.30% | -0.80% | -0.10% |
Effective income tax rate attributable to Watsco, Inc. | 37.00% | 36.70% | 38.00% |
Taxes attributable to noncontrolling interest | -7.70% | -8.30% | -8.80% |
Effective income tax rate | 29.30% | 28.40% | 29.20% |
Significant_Components_of_Curr
Significant Components of Current and Long-Term Deferred Tax Assets and Liabilities (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | ||
In Thousands, unless otherwise specified | ||||
Components Of Deferred Income Tax Assets And Liabilities [Line Items] | ' | ' | ||
Capitalized inventory costs and inventory reserves | $2,883 | $2,386 | ||
Self-insurance reserves | 1,093 | 1,039 | ||
Allowance for doubtful accounts | 882 | 1,084 | ||
Other current deferred tax assets | 1,539 | 1,215 | ||
Total current deferred tax assets | 6,397 | [1] | 5,724 | [1] |
Share-based compensation | 17,455 | 13,911 | ||
Other long-term deferred tax assets | 909 | 797 | ||
Net operating loss carryforwards | 283 | 609 | ||
Total long-term deferred tax assets | 18,647 | 15,317 | ||
Valuation allowance | -75 | -391 | ||
Total long-term deferred tax assets | 18,572 | [2] | 14,926 | [2] |
Other current deferred tax liabilities | -1,304 | -36 | ||
Total current deferred tax liabilities | -1,304 | [1] | -36 | [1] |
Deductible goodwill | -76,519 | -66,636 | ||
Depreciation | -2,873 | -3,100 | ||
Other long-term deferred tax liabilities | -2,556 | -1,322 | ||
Total long-term deferred tax liabilities | -81,948 | [2] | -71,058 | [2] |
Net deferred tax liabilities | ($58,283) | ($50,444) | ||
[1] | Current deferred tax assets and liabilities have been included in the consolidated balance sheets in other current assets. | |||
[2] | Long-term deferred tax assets and liabilities have been included in the consolidated balance sheets in deferred income taxes and other liabilities. |
Changes_in_Gross_Unrecognized_
Changes in Gross Unrecognized Tax Benefits (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Income Tax Contingency [Line Items] | ' | ' | ' |
Beginning balance | $2,474 | $2,424 | $1,889 |
Additions based on tax positions related to the current year | 673 | 416 | 542 |
Reductions due to lapse of applicable statute of limitations | -12 | -366 | -7 |
Ending balance | $3,135 | $2,474 | $2,424 |
ShareBased_Compensation_and_Be2
Share-Based Compensation and Benefit Plans - Additional Information (Detail) (USD $) | 12 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Age | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' |
Percent of market price that share-based compensation awards are granted at | 100.00% | ' | ' |
Fair value of non-vested stock that vested | ' | ' | $672 |
Total intrinsic value of stock options exercised | 2,753 | 5,641 | 4,724 |
Cash received from Common stock issued | 1,554 | 3,790 | 4,530 |
Tax benefits realized from stock option exercises | 1,557 | 1,245 | 916 |
Age of Chief Executive Officer when non-vested (restricted) stock vests | 82 | ' | ' |
Shares of non-vested (restricted) stock obligated to issue in connection with incentive compensation agreements | 177,025 | ' | ' |
Common stock contribution to 401(k) plan | 1,689 | 1,772 | 1,718 |
Class B Common Stock | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' |
Shares delivered as payment for tax withholdings related to stock option exercises, shares | 13,227 | ' | 7,616 |
Shares delivered as payment for tax withholdings related to stock option exercises, market value | 1,227 | ' | 437 |
Employee Stock | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' |
Aggregate shares of common stock that may be granted | 1,500,000 | ' | ' |
Shares reserved for future grant | 525,152 | ' | ' |
Number of days under which shares to be purchased by employee on such available | '90 days | ' | ' |
Discount allowed to employees to purchase share | 5.00% | ' | ' |
Shares purchased under ESPP | 5,844 | 6,753 | 8,520 |
Average price of the shares purchased by employees | $79.46 | $68.76 | $59.44 |
Additional shares issued that resulted from cash dividends investment in common stock | 1,899 | 15,411 | 5,097 |
Net proceeds from shares issued under ESPP | 631 | 1,522 | 829 |
401(k) Plan | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' |
Common stock issued to profit sharing retirement plan, shares | 22,551 | 26,991 | 27,240 |
Common stock contribution to 401(k) plan | 1,689 | 1,772 | 1,718 |
2001 Plan | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' |
Aggregate shares of common stock that may be granted | 4,000,000 | ' | ' |
Shares reserved for future grant | 259,446 | ' | ' |
Contractual term of stock option awards | '5 years | ' | ' |
2001 Plan | Minimum | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' |
Years in which options under 2001 Plan vest | '2 years | ' | ' |
2001 Plan | Maximum | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' |
Years in which options under 2001 Plan vest | '4 years | ' | ' |
2001 Plan | Common Stock | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' |
Shares awarded under plan | 1,987,912 | ' | ' |
2001 Plan | Class B Common Stock | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' |
Shares awarded under plan | 1,752,642 | ' | ' |
Non-Vested (Restricted) Stock | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' |
Weighted-average grant date fair value of non-vested (restricted) stock | $80.21 | $69.66 | $63.87 |
Shares withheld as payment for tax withholdings related to share based compensation, shares | ' | ' | 2,527 |
Shares withheld as payment for tax withholdings related to share based compensation, market value | ' | ' | 180 |
Unrecognized share-based compensation expense | 72,870 | ' | ' |
Weighted-average period for recognition of share-based compensation expense, in years | '9 years 8 months 12 days | ' | ' |
Non-Vested (Restricted) Stock | Chief Executive Officer | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' |
Unrecognized share-based compensation expense | 53,000 | ' | ' |
Weighted-average period for recognition of share-based compensation expense, in years | '9 years | ' | ' |
Stock Options | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' |
Unrecognized share-based compensation expense | 848 | ' | ' |
Weighted-average period for recognition of share-based compensation expense, in years | '1 year 7 months 6 days | ' | ' |
Fair value of stock options vested | 822 | 315 | 475 |
Stock Options | Common Stock | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' |
Shares withheld as payment for tax withholdings related to share based compensation, shares | 4,749 | 29,987 | ' |
Shares withheld as payment for tax withholdings related to share based compensation, market value | $450 | $2,229 | ' |
Summary_of_Stock_Option_Activi
Summary of Stock Option Activity (Detail) (USD $) | 12 Months Ended |
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2013 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' |
Options, Outstanding beginning balance | 324,150 |
Options, Granted | 30,000 |
Options, Exercised | -79,450 |
Options, Forfeited | -7,000 |
Options, Expired | ' |
Options, Outstanding ending balance | 267,700 |
Options, Exercisable | 50,784 |
Weighted-Average Exercise Price, Outstanding beginning balance | $56.21 |
Weighted-Average Exercise Price, Granted | $82.32 |
Weighted-Average Exercise Price, Exercised | $34.65 |
Weighted-Average Exercise Price, Forfeited | $65.31 |
Weighted-Average Exercise Price, Expired | ' |
Weighted-Average Exercise Price, Outstanding ending balance | $65.30 |
Weighted-Average Exercise Price, Exercisable | $60.13 |
Weighted-Average Remaining Contractual Term (in years), Outstanding | '2 years 7 months 24 days |
Weighted-Average Remaining Contractual Term (in years), Exercisable | '2 years 1 month 13 days |
Aggregate Intrinsic Value, Outstanding | $8,234 |
Aggregate Intrinsic Value, Exercisable | $1,824 |
Summary_of_NonVested_Restricte
Summary of Non-Vested (Restricted) Stock Activity (Detail) (Non-Vested (Restricted) Stock, USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Non-Vested (Restricted) Stock | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' |
Shares, Non-vested beginning balance | 2,373,249 | ' | ' |
Shares, Granted | 124,043 | ' | ' |
Shares, Forfeited | -10,000 | ' | ' |
Shares, Non-vested ending balance | 2,487,292 | 2,373,249 | ' |
Weighted-Average Grant Date Fair Value, Non-vested beginning balance | $38.75 | ' | ' |
Weighted-Average Grant Date Fair Value, Granted | $80.21 | $69.66 | $63.87 |
Weighted-Average Grant Date Fair Value, Forfeited | $68.36 | ' | ' |
Weighted-Average Grant Date Fair Value, Non-vested ending balance | $40.70 | $38.75 | ' |
WeightedAverage_Assumptions_Us
Weighted-Average Assumptions Used for Stock Options Granted (Detail) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' |
Expected term in years | '4 years 3 months | '4 years 3 months | '4 years 3 months |
Risk-free interest rate | 0.82% | 0.57% | 1.12% |
Expected volatility | 24.56% | 31.40% | 32.59% |
Expected dividend yield | 2.20% | 3.49% | 3.48% |
Grant date fair value | $13.33 | $12.90 | $12.31 |
ShareBased_Compensation_Expens
Share-Based Compensation Expense (Detail) (USD $) | 12 Months Ended | ||
Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' |
Share-based compensation expense | $9,967 | $7,939 | $6,663 |
Stock Options | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' |
Share-based compensation expense | 884 | 846 | 612 |
Non-Vested (Restricted) Stock | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' |
Share-based compensation expense | $9,083 | $7,093 | $6,051 |
Acquisitions_Additional_Inform
Acquisitions - Additional Information (Detail) (USD $) | 0 Months Ended | 1 Months Ended | 12 Months Ended | 0 Months Ended | 0 Months Ended | 0 Months Ended | 12 Months Ended | ||||||||
In Thousands, except Share data, unless otherwise specified | Apr. 29, 2011 | Jul. 02, 2012 | Dec. 31, 2013 | Jul. 01, 2009 | Apr. 27, 2012 | Dec. 31, 2012 | Apr. 27, 2012 | Apr. 27, 2012 | Apr. 29, 2011 | Dec. 31, 2013 | Dec. 31, 2011 | Apr. 29, 2011 | Apr. 29, 2011 | Jul. 29, 2011 | Dec. 31, 2010 |
Noncontrolling Interest | Carrier Enterprise I | Carrier Enterprise I | Carrier Enterprise I | Carrier Enterprise III | Carrier Enterprise III | Carrier Enterprise III | UTC Canada | Carrier Enterprise II | Carrier Enterprise II | Carrier Enterprise II | Carrier Enterprise II | Carrier Enterprise II | Carrier Enterprise Mexico | Carrier Enterprise Mexico | |
Location | Customer Relationships | Location | Difference Between Fair Value And Carrying Value | Customer Relationships | Location | ||||||||||
Business Acquisition [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Controlling interest | ' | ' | ' | 60.00% | 60.00% | ' | ' | ' | 60.00% | 60.00% | ' | ' | ' | 60.00% | ' |
Non-controlling interest, ownership percentage | ' | ' | ' | 40.00% | 40.00% | ' | ' | ' | 40.00% | ' | ' | 40.00% | ' | ' | ' |
Option to acquire interests, percentage | ' | ' | 10.00% | 10.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of additional ownership acquired | ' | 10.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cash consideration | ' | $51,881 | ' | ' | $80,489 | ' | ' | ' | $34,460 | ' | ' | ' | ' | $9,000 | ' |
Option to purchase additional interest, date | ' | ' | '2014-07-01 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Purchase price | ' | ' | ' | ' | 173,739 | ' | ' | ' | 49,229 | ' | ' | ' | ' | ' | ' |
Number of locations contributed to joint venture by non-controlling interest | ' | ' | ' | ' | 35 | ' | ' | ' | 28 | ' | ' | ' | ' | 7 | ' |
Number of locations contributed to joint venture by controlling interest | ' | ' | ' | ' | ' | ' | ' | ' | 14 | ' | ' | ' | ' | ' | ' |
Consideration for contribution of locations in joint venture | 7,708 | ' | ' | ' | ' | ' | ' | ' | 14,769 | ' | ' | 7,061 | ' | ' | ' |
Goodwill and intangibles, purchase price allocation | ' | ' | ' | ' | 216,463 | ' | ' | ' | 32,957 | ' | ' | ' | ' | ' | ' |
Fair value of acquired intangible assets | ' | ' | ' | ' | 151,172 | ' | ' | ' | 20,600 | ' | ' | ' | ' | ' | ' |
Identified intangible assets, trade names and distribution rights | ' | ' | ' | ' | 95,515 | ' | ' | ' | 13,400 | ' | ' | ' | ' | ' | ' |
Identified intangible assets, customer relationships | ' | ' | ' | ' | ' | ' | 55,657 | ' | ' | ' | ' | ' | 7,200 | ' | ' |
Finite-lived intangible assets, average useful life, in years | ' | ' | ' | ' | ' | ' | '15 years | ' | ' | ' | ' | ' | '12 years | ' | ' |
Period available for tax deductions related to acquired goodwill (in years) | ' | ' | ' | ' | ' | ' | ' | ' | '15 years | ' | ' | ' | ' | ' | ' |
Revenues | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 75,000 |
Shares issued to UTC Canada Corporation, an affiliate of Carrier Corporation | ' | ' | ' | ' | ' | ' | ' | 1,250,000 | ' | ' | ' | ' | ' | ' | ' |
Fair value of shares issued to UTC Canada Corporation | ' | ' | ' | ' | ' | ' | ' | 93,250 | ' | ' | ' | ' | ' | ' | ' |
Percent of tax basis of acquired goodwill amortized at a rate of 7% | ' | ' | ' | ' | 75.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Goodwill amortization rate | ' | ' | ' | ' | 7.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Transaction costs included in selling, general and administrative expenses | ' | ' | ' | ' | ' | $1,200 | ' | ' | ' | ' | $1,200 | ' | ' | ' | ' |
Purchase_Price_Allocation_Deta
Purchase Price Allocation (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Apr. 27, 2012 | Apr. 29, 2011 |
In Thousands, unless otherwise specified | Carrier Enterprise III | Carrier Enterprise II | |||
Business Acquisition [Line Items] | ' | ' | ' | ' | ' |
Cash | ' | ' | ' | $10 | $5 |
Accounts receivable | ' | ' | ' | 46,718 | 24,300 |
Inventories | ' | ' | ' | 55,024 | 39,003 |
Other current assets | ' | ' | ' | 481 | 773 |
Property and equipment | ' | ' | ' | 2,517 | 4,402 |
Goodwill | 392,610 | 397,262 | 319,440 | 65,291 | 12,357 |
Intangible assets | ' | ' | ' | 151,172 | 20,600 |
Other assets | ' | ' | ' | 978 | 202 |
Accounts payable and accrued expenses | ' | ' | ' | -44,208 | -22,894 |
Noncontrolling interest | ' | ' | ' | -104,244 | -29,519 |
Total purchase price | ' | ' | ' | $173,739 | $49,229 |
Unaudited_Pro_Forma_Financial_
Unaudited Pro Forma Financial Information from Joint Venture (Detail) (USD $) | 12 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2012 | Dec. 31, 2011 |
Business Acquisition, Pro Forma Information [Line Items] | ' | ' |
Revenues | $3,526,621 | $3,404,381 |
Net income | 156,728 | 159,147 |
Less: net income attributable to noncontrolling interest | 54,153 | 60,380 |
Net income attributable to Watsco, Inc. | $102,575 | $98,767 |
Diluted earnings per share for Common and Class B common stock | $2.64 | $2.89 |
Changes_in_Carrying_Amount_of_
Changes in Carrying Amount of Goodwill (Detail) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Goodwill And Other Intangible Assets [Line Items] | ' | ' |
Goodwill, Beginning Balance | $397,262 | $319,440 |
Acquired goodwill | ' | 77,829 |
Foreign currency translation adjustment | -4,652 | -7 |
Goodwill, Ending Balance | $392,610 | $397,262 |
Other_Intangible_Assets_Detail
Other Intangible Assets (Detail) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 |
Intangible Assets [Line Items] | ' | ' |
Indefinite lived intangible assets - Trade names, trademarks and distribution rights | $138,599 | $144,683 |
Finite lived intangible assets: | ' | ' |
Accumulated amortization | -17,140 | -11,111 |
Finite lived intangible assets, net | 65,244 | 74,818 |
Intangible assets, net | 203,843 | 219,501 |
Customer Relationships | ' | ' |
Finite lived intangible assets: | ' | ' |
Finite lived intangible assets | 80,865 | 84,410 |
Customer Relationships | Minimum | ' | ' |
Intangible Assets [Line Items] | ' | ' |
Finite lived intangible assets, Estimated Useful lives, years | '10 years | ' |
Customer Relationships | Maximum | ' | ' |
Intangible Assets [Line Items] | ' | ' |
Finite lived intangible assets, Estimated Useful lives, years | '15 years | ' |
Trade Names | ' | ' |
Intangible Assets [Line Items] | ' | ' |
Finite lived intangible assets, Estimated Useful lives, years | '10 years | ' |
Finite lived intangible assets: | ' | ' |
Finite lived intangible assets | 1,150 | 1,150 |
Noncompete Agreements | ' | ' |
Intangible Assets [Line Items] | ' | ' |
Finite lived intangible assets, Estimated Useful lives, years | '7 years | ' |
Finite lived intangible assets: | ' | ' |
Finite lived intangible assets | $369 | $369 |
Goodwill_and_Other_Intangible_2
Goodwill and Other Intangible Assets - Additional Information (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Goodwill And Intangible Assets [Line Items] | ' | ' | ' |
Amortization expense related to finite lived intangible assets | $6,029 | $4,925 | $2,361 |
Amortization of finite lived intangible assets for 2014 | 5,900 | ' | ' |
Amortization of finite lived intangible assets for 2015 | 5,900 | ' | ' |
Amortization of finite lived intangible assets for 2016 | 5,900 | ' | ' |
Amortization of finite lived intangible assets for 2017 | 5,900 | ' | ' |
Amortization of finite lived intangible assets for 2018 | $5,900 | ' | ' |
Shareholders_Equity_Additional
Shareholders' Equity - Additional Information (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 | Sep. 30, 1999 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, except Share data, unless otherwise specified | Common Stock | Common Stock | Class B Common Stock | Class B Common Stock | |||
Stockholders Equity Note [Line Items] | ' | ' | ' | ' | ' | ' | ' |
Amount of votes common stock is entitled | ' | ' | ' | 'One | ' | 'Ten | ' |
Percentage of Board entitled to elect | ' | ' | ' | 25.00% | ' | ' | ' |
Preferred stock outstanding | 0 | 0 | ' | ' | ' | ' | ' |
Number of shares authorized to be repurchased | ' | ' | 7,500,000 | ' | ' | ' | ' |
Treasury stock, shares | ' | ' | ' | 6,322,650 | 6,322,650 | 48,263 | 48,263 |
Cost of repurchased shares | $114,425 | $114,425 | ' | ' | ' | ' | ' |
Remaining number of shares authorized to be repurchased | 1,129,087 | ' | ' | ' | ' | ' | ' |
Financial_Instruments_Addition
Financial Instruments - Additional Information (Detail) (USD $) | 12 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2011 | Dec. 31, 2013 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2013 | Oct. 31, 2011 |
Standby Letters of Credit | Standby Letters of Credit | Performance Bonds | Performance Bonds | Foreign Exchange Forward | Foreign Exchange Forward | Interest Rate Swap | Interest Rate Swap | Interest Rate Swap | |||
Not Designated as Hedging Instrument | Not Designated as Hedging Instrument | ||||||||||
Financial Instrument [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Changes in fair value foreign currency forward contracts | ' | ' | ' | ' | ' | ' | $315 | ($197) | ' | ' | ' |
Interest rate swap agreement with notional amount | ' | ' | ' | ' | ' | ' | 26,000 | ' | ' | ' | 10,000 |
Contract expiring terms | ' | ' | ' | ' | ' | ' | '2014-03 | ' | ' | ' | ' |
Interest rate swap agreement maturity period | ' | ' | ' | ' | ' | ' | ' | ' | '2011-10 | ' | ' |
Fixed interest rate | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5.07% | ' |
Reclassification reflected from net change in other comprehensive loss | 244 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Derivative financial instruments income tax benefit | 155 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fair value of contingent liability | ' | ' | 2,681 | 3,098 | 800 | 300 | ' | ' | ' | ' | ' |
Estimated fair value of contingent liability | ' | $0 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Assets_and_Liabilities_Carried
Assets and Liabilities Carried at Fair Value Measured on Recurring Basis (Detail) (USD $) | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | ||
Other assets | ' | ' |
Assets: | ' | ' |
Available-for-sale securities | $265 | $226 |
Other Current Assets | ' | ' |
Assets: | ' | ' |
Derivative financial instruments Other current assets | 118 | ' |
Accrued expenses and other current liabilities | ' | ' |
Liabilities: | ' | ' |
Derivative financial instruments | ' | 197 |
Fair Value Measurements, Level 1 | Other assets | ' | ' |
Assets: | ' | ' |
Available-for-sale securities | 265 | 226 |
Fair Value Measurements, Level 2 | Other Current Assets | ' | ' |
Assets: | ' | ' |
Derivative financial instruments Other current assets | 118 | ' |
Fair Value Measurements, Level 2 | Accrued expenses and other current liabilities | ' | ' |
Liabilities: | ' | ' |
Derivative financial instruments | ' | $197 |
Commitments_and_Contingencies_1
Commitments and Contingencies - Additional Information (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Commitments and Contingencies Disclosure [Line Items] | ' | ' | ' |
Self-insurance reserves | $5,582 | $4,844 | ' |
Loss exposed due to involvement with Variable Interest Entities | 4,400 | ' | ' |
Operating leases maximum maturity date | '2023 | ' | ' |
Rental expense | 79,585 | 76,547 | 70,933 |
Non-cancelable purchase obligations for goods | 7,500 | ' | ' |
Carrier and Its Affiliates | ' | ' | ' |
Commitments and Contingencies Disclosure [Line Items] | ' | ' | ' |
Non-cancelable purchase obligations for goods | $5,600 | ' | ' |
Future_Minimum_Lease_Payments_
Future Minimum Lease Payments under Non-Cancelable Operating Leases (Detail) (USD $) | Dec. 31, 2013 |
In Thousands, unless otherwise specified | |
Operating Leases Future Minimum Payments Due [Line Items] | ' |
2014 | $64,967 |
2015 | 54,508 |
2016 | 43,322 |
2017 | 28,356 |
2018 | 14,006 |
Thereafter | 8,388 |
Total minimum payments | $213,547 |
Related_Party_Transactions_Add
Related Party Transactions - Additional Information (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Related Party Transaction [Line Items] | ' | ' | ' |
Percentage of inventory purchases from Carrier and its affiliates | 59.00% | 57.00% | 54.00% |
Revenues from sales to Carrier Corporation and its affiliates | $30,819 | $32,961 | $23,710 |
Fees related to Transactional Services Agreements with Carrier Corporation | ' | 1,798 | 1,139 |
Carrier and Its Affiliates | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' |
Amount payable to related parties, net of receivables | -53,000 | -62,000 | ' |
Carrier | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' |
Amount payable to related parties, net of receivables | ' | -25 | ' |
Carrier and UTC Canada | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' |
Amount payable to related parties, net of receivables | ' | $29,637 | ' |
Revenues_and_LongLived_Assets_
Revenues and Long-Lived Assets by Geographical Area (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||||||||||||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | ||||||||||
Geographic Area Information [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||
Revenues | $827,352 | [1] | $1,081,893 | [1] | $1,120,452 | [1] | $713,633 | [1] | $765,540 | [1] | $1,020,859 | [1] | $1,011,801 | [1] | $633,512 | [1] | $3,743,330 | [1] | $3,431,712 | [1] | $2,977,759 |
Long-Lived Assets | 641,871 | ' | ' | ' | 659,605 | ' | ' | ' | 641,871 | 659,605 | ' | ||||||||||
UNITED STATES | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||
Geographic Area Information [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||
Revenues | ' | ' | ' | ' | ' | ' | ' | ' | 3,325,114 | 3,087,256 | 2,938,907 | ||||||||||
Long-Lived Assets | 429,202 | ' | ' | ' | 429,153 | ' | ' | ' | 429,202 | 429,153 | ' | ||||||||||
CANADA | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||
Geographic Area Information [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||
Revenues | ' | ' | ' | ' | ' | ' | ' | ' | 318,165 | 240,254 | ' | ||||||||||
Long-Lived Assets | 207,340 | ' | ' | ' | 225,076 | ' | ' | ' | 207,340 | 225,076 | ' | ||||||||||
MEXICO | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||
Geographic Area Information [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||
Revenues | ' | ' | ' | ' | ' | ' | ' | ' | 100,051 | 104,202 | 38,852 | ||||||||||
Long-Lived Assets | $5,329 | ' | ' | ' | $5,376 | ' | ' | ' | $5,329 | $5,376 | ' | ||||||||||
[1] | Sales of residential central air conditioners, heating equipment and parts and supplies are seasonal. Demand related to the residential central air conditioning replacement market is typically highest in the second and third quarters and demand for heating equipment is usually highest in the fourth quarter. Demand related to the new construction sectors throughout most of the markets is fairly consistent during the year, except for dependence on housing completions and related weather and economic conditions. |
Supplemental_Cash_Flow_Informa2
Supplemental Cash Flow Information (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Cash Flow Supplemental Disclosures [Line Items] | ' | ' | ' |
Interest paid | $5,334 | $2,802 | $1,854 |
Income taxes net of refunds | 73,168 | 46,819 | 45,137 |
Carrier Enterprise III | ' | ' | ' |
Cash Flow Supplemental Disclosures [Line Items] | ' | ' | ' |
Common stock issued for Carrier Enterprise III | ' | 93,250 | ' |
Carrier Enterprise II | ' | ' | ' |
Cash Flow Supplemental Disclosures [Line Items] | ' | ' | ' |
Net assets of locations contributed to Carrier Enterprise II | ' | ' | $14,769 |
Selected_Quarterly_Financial_D2
Selected Quarterly Financial Data (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||||||||||||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2012 | Jun. 30, 2012 | Mar. 31, 2012 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | ||||||||||
Quarterly Financial Data [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||
Revenues | $827,352 | [1] | $1,081,893 | [1] | $1,120,452 | [1] | $713,633 | [1] | $765,540 | [1] | $1,020,859 | [1] | $1,011,801 | [1] | $633,512 | [1] | $3,743,330 | [1] | $3,431,712 | [1] | $2,977,759 |
Gross profit | 198,530 | 258,597 | 266,680 | 175,446 | 182,793 | 242,505 | 238,475 | 150,622 | 899,253 | 814,395 | 728,294 | ||||||||||
Net income attributable to Watsco, Inc. | $17,321 | $45,699 | $51,318 | $13,385 | $14,760 | $41,005 | $39,103 | $8,466 | $127,723 | $103,334 | $90,450 | ||||||||||
Earnings per share for Common and Class B common stock : | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ||||||||||
Basic | $0.50 | [2] | $1.32 | [2] | $1.48 | [2] | $0.39 | [2] | $0.04 | [2],[3] | $1.19 | [2] | $1.15 | [2] | $0.23 | [2] | $3.69 | [2] | $2.70 | [2],[3] | $2.75 |
Diluted | $0.50 | [2] | $1.32 | [2] | $1.48 | [2] | $0.39 | [2] | $0.04 | [2],[3] | $1.19 | [2] | $1.15 | [2] | $0.23 | [2] | $3.68 | [2] | $2.70 | [2],[3] | $2.74 |
[1] | Sales of residential central air conditioners, heating equipment and parts and supplies are seasonal. Demand related to the residential central air conditioning replacement market is typically highest in the second and third quarters and demand for heating equipment is usually highest in the fourth quarter. Demand related to the new construction sectors throughout most of the markets is fairly consistent during the year, except for dependence on housing completions and related weather and economic conditions. | ||||||||||||||||||||
[2] | Quarterly and year-to-date earnings per share are calculated on an individual basis; therefore, the sum of earnings per share amounts for the quarters may not equal earnings per share amounts for the year. | ||||||||||||||||||||
[3] | On October 31, 2012, we paid a special dividend of $5.00 per share of Common and Class B common stock that resulted in a $0.37 per share and $0.33 per share reduction in diluted earnings per share for the quarter and year ended December 31, 2012, respectively. |
Selected_Quarterly_Financial_D3
Selected Quarterly Financial Data (Parenthetical) (Detail) (USD $) | 3 Months Ended | 12 Months Ended | 0 Months Ended | |
Dec. 31, 2012 | Dec. 31, 2012 | Oct. 31, 2012 | Oct. 31, 2012 | |
Common Stock | Class B Common Stock | |||
Quarterly Financial Data [Line Items] | ' | ' | ' | ' |
Special dividend paid per share | ' | ' | $5 | $5 |
Reduction in diluted earning per share | $0.37 | $0.33 | ' | ' |