Watsco (WSO) 10-Q 3 Aug 18 2018 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2018	Jul. 30, 2018
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2018
Document Fiscal Year Focus	2,018
Document Fiscal Period Focus	Q2
Trading Symbol	WSO
Entity Registrant Name	WATSCO INC
Entity Central Index Key	105,016
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Common Stock
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		32,052,855
Class B Common Stock
Document Information [Line Items]
Entity Common Stock, Shares Outstanding		5,316,183

Condensed Consolidated Unaudite

Condensed Consolidated Unaudited Statements of Income - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Revenues	$ 1,332,743	$ 1,275,924	$ 2,259,320	$ 2,148,019
Cost of sales	1,011,977	965,646	1,707,721	1,619,185
Gross profit	320,766	310,278	551,599	528,834
Selling, general and administrative expenses	186,577	180,930	365,111	350,787
Other income	3,157		4,795
Operating income	137,346	129,348	191,283	178,047
Interest expense, net	763	1,647	1,328	2,902
Income before income taxes	136,583	127,701	189,955	175,145
Income taxes	28,319	36,854	39,314	50,530
Net income	108,264	90,847	150,641	124,615
Less: net income attributable to non-controlling interest	18,307	17,091	26,465	24,678
Net income attributable to Watsco, Inc.	$ 89,957	$ 73,756	$ 124,176	$ 99,937
Earnings per share for Common and Class B common stock:
Basic	$ 2.41	$ 2.07	$ 3.33	$ 2.80
Diluted	$ 2.40	$ 2.07	$ 3.32	$ 2.80

Condensed Consolidated Unaudit3

Condensed Consolidated Unaudited Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Net income	$ 108,264	$ 90,847	$ 150,641	$ 124,615
Other comprehensive (loss) income, net of tax
Foreign currency translation adjustment	(5,046)	5,770	(11,691)	7,925
Unrealized gain (loss) on cash flow hedging instruments	380	222	531	(87)
Reclassification of loss (gain) on cash flow hedging instruments into earnings	105	(683)	858	(861)
Unrealized (loss) gain on equity securities		(5)		3
Other comprehensive (loss) income	(4,561)	5,304	(10,302)	6,980
Comprehensive income	103,703	96,151	140,339	131,595
Less: comprehensive income attributable to non-controlling interest	16,636	19,094	22,702	27,317
Comprehensive income attributable to Watsco, Inc.	$ 87,067	$ 77,057	$ 117,637	$ 104,278

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Current assets:
Cash and cash equivalents	$ 72,000	$ 80,496
Accounts receivable, net	659,887	478,133
Inventories	872,902	761,314
Other current assets	16,664	17,454
Total current assets	1,621,453	1,337,397
Property and equipment, net	91,312	91,198
Goodwill	380,690	382,729
Intangible assets, net	152,817	161,065
Other assets	79,348	74,488
Total assets	2,325,620	2,046,877
Current liabilities:
Current portion of other long-term obligations	209	244
Short-term borrowings	1,510
Accounts payable	358,148	230,476
Accrued expenses and other current liabilities	163,056	185,757
Total current liabilities	522,923	416,477
Long-term obligations:
Borrowings under revolving credit agreement	141,600	21,800
Other long-term obligations, net of current portion	199	285
Total long-term obligations	141,799	22,085
Deferred income taxes and other liabilities	58,904	57,338
Commitments and contingencies
Watsco, Inc. shareholders' equity:
Preferred stock, $0.50 par value
Paid-in capital	817,559	804,008
Accumulated other comprehensive loss, net of tax	(40,459)	(34,221)
Retained earnings	617,666	594,556
Treasury stock, at cost	(87,440)	(87,440)
Total Watsco, Inc. shareholders' equity	1,328,446	1,297,953
Non-controlling interest	273,548	253,024
Total shareholders' equity	1,601,994	1,550,977
Total liabilities and shareholders' equity	2,325,620	2,046,877
Common Stock
Watsco, Inc. shareholders' equity:
Common stock, $0.50 par value	18,437	18,412
Class B Common Stock
Watsco, Inc. shareholders' equity:
Common stock, $0.50 par value	$ 2,683	$ 2,638

Condensed Consolidated Balance5

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Jun. 30, 2018	Dec. 31, 2017
Preferred stock, par value	$ 0.50	$ 0.50
Common Stock
Common stock, par value	0.50	0.50
Class B Common Stock
Common stock, par value	$ 0.50	$ 0.50

Condensed Consolidated Unaudit6

Condensed Consolidated Unaudited Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Cash flows from operating activities:
Net income	$ 150,641	$ 124,615
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Depreciation and amortization	11,027	10,934
Share-based compensation	7,336	6,264
Deferred income tax provision	1,569	2,739
Other income from investment in unconsolidated entity	(4,795)
Other, net	3,260	1,740
Changes in operating assets and liabilities:
Accounts receivable	(183,105)	(134,952)
Inventories	(113,831)	(83,523)
Accounts payable and other liabilities	107,908	107,344
Other, net	734	(151)
Net cash (used in) provided by operating activities	(19,256)	35,010
Cash flows from investing activities:
Capital expenditures	(8,824)	(10,312)
Proceeds from sale of property and equipment	86	75
Investment in unconsolidated entity		(63,600)
Net cash used in investing activities	(8,738)	(73,837)
Cash flows from financing activities:
Net proceeds under revolving credit agreement	119,800	144,006
Net proceeds from issuances of common stock	4,741	1,912
Proceeds from short-term borrowings	1,510	1,676
Purchase of additional ownership from non-controlling interest		(42,688)
Proceeds from non-controlling interest for investment in unconsolidated entity		12,720
Net repayments of other long-term obligations	(121)	(100)
Distributions to non-controlling interest	(2,178)	(6,799)
Repurchases of common stock to satisfy employee withholding tax obligations	(2,213)	(2,771)
Dividends on Common and Class B common stock	(100,765)	(74,835)
Net cash provided by financing activities	20,774	33,121
Effect of foreign exchange rate changes on cash and cash equivalents	(1,276)	730
Net decrease in cash and cash equivalents	(8,496)	(4,976)
Cash and cash equivalents at beginning of period	80,496	56,010
Cash and cash equivalents at end of period	$ 72,000	$ 51,034

BASIS OF PRESENTATION

BASIS OF PRESENTATION	6 Months Ended
	Jun. 30, 2018
BASIS OF PRESENTATION	1. BASIS OF PRESENTATION Basis of Consolidation Watsco, Inc. (collectively with its subsidiaries, “Watsco,” “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 in North America. The accompanying June 30, 2018 interim condensed consolidated unaudited financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and note disclosures normally included in the annual financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to those rules and regulations, but we believe the disclosures made are adequate to make the information presented not misleading. In the opinion of management, all adjustments, consisting of normal and recurring adjustments, necessary for a fair presentation have been included in the condensed consolidated unaudited financial statements included herein. These statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our 2017 Annual Report on Form 10-K. The condensed consolidated unaudited financial statements contained in this report include the accounts of Watsco, all of its wholly owned subsidiaries and 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. The results of operations for the quarter and six months ended June 30, 2018 are not necessarily indicative of the results to be expected for the year ending December 31, 2018. Sales of residential central air conditioners, heating equipment, and parts and supplies are seasonal. Furthermore, results of operations can be impacted favorably or unfavorably based on weather patterns, primarily during the Summer and Winter selling seasons. 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 market is generally evenly distributed throughout the year, subject to weather and economic conditions, including their effect on the number of housing completions. Equity Method Investments Investments in which we have the ability to exercise significant influence, but do not control, are accounted for under the equity method of accounting and are included in other assets in our consolidated balance sheets. Under this method of accounting, our proportionate share of the net income or loss of the investee is included in other income in our consolidated statements of income. The excess, if any, of the carrying amount of our investment over our ownership percentage in the underlying net assets of the investee is attributed to certain fair value adjustments with the remaining portion recognized as goodwill. Reclassifications Certain reclassifications of prior year amounts have been made to conform to the 2018 presentation. These reclassifications had no effect on net income or earnings per share as previously reported. Use of Estimates The preparation of condensed consolidated unaudited 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 condensed consolidated unaudited 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. Recently Adopted Accounting Standards Revenue Recognition In May 2014, the Financial Accounting Standards Board (the “FASB”) issued a standard on revenue recognition that provides a single, comprehensive revenue recognition model for all contracts with customers. The standard is principle-based and provides a five-step model to determine the measurement of revenue and timing of when it is recognized. In 2015 and 2016, the FASB issued several updates to this standard. The adoption of this standard and its related amendments (collectively, the “New Revenue Standard”) on January 1, 2018 did not result in the recognition of a cumulative adjustment to opening retained earnings under the modified retrospective approach, nor did it have a significant impact on our consolidated net income, balance sheet or cash flow. See Note 2. Financial Instruments In January 2016, the FASB issued guidance related to certain aspects of recognition, measurement, presentation and disclosure of financial instruments. Most prominent among the changes to the standard is the requirement that changes in the fair value of equity investments, with certain exceptions, be recognized through net income rather than other comprehensive income. This guidance must be applied using a modified retrospective approach through a cumulative-effect adjustment to retained earnings and became effective for interim and annual periods beginning after December 15, 2017. The adoption of this guidance did not have a material impact on our consolidated financial statements. A cumulative-effect adjustment captured the previously held unrealized losses of $301 related to our equity investment carried at fair value. See Note 4. Stock Compensation In May 2017, the FASB issued guidance to clarify when to account for a change to the terms or conditions of a share-based payment award as a modification. Under the new guidance, modification accounting is required only if the fair value, the vesting conditions or the classification of the award (as equity or liability) changes as a result of the change in terms or conditions. This guidance must be applied prospectively and became effective for interim and annual periods beginning after December 15, 2017. The adoption of this guidance did not have a material impact on our consolidated financial statements. Derivatives and Hedging In August 2017, the FASB issued guidance to simplify the accounting for hedging derivatives. This guidance is effective prospectively and is effective for interim and annual periods beginning after December 15, 2018 with early adoption permitted. We elected to adopt this guidance during the quarter ended June 30, 2018, which did not have a material impact on our consolidated financial statements. Recently Issued Accounting Standards Not Yet Adopted Leases In February 2016, the FASB issued guidance on accounting for leases, which requires lessees to recognize most leases on their balance sheets for the rights and obligations created by those leases. We will apply this guidance using a modified retrospective approach, and it will be effective for interim and annual periods beginning after December 15, 2018. Based on our preliminary assessment of our lease portfolio, we expect the adoption of this guidance to have a material impact on our consolidated balance sheets due to the recognition of right-of-use 10-K Intangibles—Goodwill and Other In January 2017, the FASB issued guidance to simplify the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. Under this updated standard, an entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, but the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. An entity also should consider income tax effects from any tax-deductible

REVENUES

REVENUES	6 Months Ended
	Jun. 30, 2018
REVENUES	2. REVENUES Adoption of New Revenue Standard We adopted the New Revenue Standard on January 1, 2018 using the modified retrospective approach. The New Revenue Standard did not have an impact on the amount and timing of our revenue recognition; however, certain payments to customers were reclassified from expense to a reduction from revenues, resulting in an immaterial impact to the individual financial statement line items of our condensed consolidated unaudited statements of income. Results for reporting periods beginning on and after January 1, 2018 are presented under the New Revenue Standard, while prior period results have not been adjusted and continue to be reported under the accounting standards in effect for those periods. Revenue Recognition Revenue primarily consists of sales of air conditioning, heating and refrigeration equipment and related parts and supplies. We generate our revenue primarily from the sale of finished products to customers; therefore, the significant majority of our contracts are short-term in nature and have only a single performance obligation to deliver products; therefore, we satisfy our performance obligation under such contracts when we transfer control of the product to the customer. Some contracts contain a combination of product sales and services, the latter of which is distinct and accounted for as a separate performance obligation. We satisfy our performance obligations for services when we render the services within the agreed-upon service period. Total service revenue is not material and accounted for less than 1% of our consolidated revenues for both the quarter and six months ended June 30, 2018. Revenue is recognized when control transfers to our customers when picked up or via shipment of products or delivery of services. We measure revenue as the amount of consideration we expect to be entitled to receive in exchange for those goods or services, net of any variable considerations (e.g., rights to return product, sales incentives, others) and any taxes collected from customers and subsequently remitted to governmental authorities. Revenue for shipping and handling charges is recognized when products are delivered to the customer. Product Returns We estimate product returns based on historical experience and record them on a gross basis. Substantially all customer returns relate to products that are returned under manufacturers’ warranty obligations. Accrued sales returns of $17,437 at June 30, 2018 were included in accrued expenses and other current liabilities in our condensed consolidated unaudited balance sheet. Sales Incentives We estimate sales incentives expected to be paid over the term of the program based on the most likely amount. Sales incentives are accounted for as a reduction in the transaction price and are generally paid on an annual basis. Accrued sales incentives of $11,600 and $13,001 as of June 30, 2018 and December 31, 2017, respectively, were included in accrued expenses and other current liabilities in our condensed consolidated unaudited balance sheets. Disaggregation of Revenues The following table presents our revenues disaggregated by primary geographical regions and major product lines within our single reporting segment: Quarter Ended Six Months Ended 2018 2017(1) 2018 2017(1) Primary Geographical Regions: United States $ 1,217,376 $ 1,163,739 $ 2,057,644 $ 1,950,019 Canada 79,119 71,847 131,479 123,380 Mexico 36,248 40,338 70,197 74,620 $ 1,332,743 $ 1,275,924 $ 2,259,320 $ 2,148,019 Major Product Lines: HVAC equipment 68 % 67 % 67 % 66 % Other HVAC products 28 % 28 % 29 % 29 % Commercial refrigeration products 4 % 5 % 4 % 5 % 100 % 100 % 100 % 100 % (1) As noted above, prior period amounts have not been adjusted under the modified retrospective method and remain as originally reported for such periods. Practical Expedients We generally expense sales commissions when incurred because the amortization period is one year or less. These costs are recorded within selling, general and administrative expenses. We do not disclose the value of unsatisfied performance obligations for contracts with an original expected length of one year or less.

EARNINGS PER SHARE

EARNINGS PER SHARE	6 Months Ended
	Jun. 30, 2018
EARNINGS PER SHARE	3. EARNINGS PER SHARE The following table presents the calculation of basic and diluted earnings per share for our Common and Class B common stock: Quarter Ended Six Months Ended 2018 2017 2018 2017 Basic Earnings per Share: Net income attributable to Watsco, Inc. shareholders $ 89,957 $ 73,756 $ 124,176 $ 99,937 Less: distributed and undistributed earnings allocated to non-vested 7,379 6,189 10,147 8,376 Earnings allocated to Watsco, Inc. shareholders $ 82,578 $ 67,567 $ 114,029 $ 91,561 Weighted-average common shares outstanding—Basic 34,309,885 32,682,474 34,282,261 32,662,653 Basic earnings per share for Common and Class B common stock $ 2.41 $ 2.07 $ 3.33 $ 2.80 Allocation of earnings for Basic: Common stock $ 76,321 $ 61,966 $ 105,383 $ 83,966 Class B common stock 6,257 5,601 8,646 7,595 $ 82,578 $ 67,567 $ 114,029 $ 91,561 Diluted Earnings per Share: Net income attributable to Watsco, Inc. shareholders $ 89,957 $ 73,756 $ 124,176 $ 99,937 Less: distributed and undistributed earnings allocated to non-vested 7,374 6,186 10,144 8,374 Earnings allocated to Watsco, Inc. shareholders $ 82,583 $ 67,570 $ 114,032 $ 91,563 Weighted-average common shares outstanding—Basic 34,309,885 32,682,474 34,282,261 32,662,653 Effect of dilutive stock options 69,310 26,172 67,554 31,653 Weighted-average common shares outstanding—Diluted 34,379,195 32,708,646 34,349,815 32,694,306 Diluted earnings per share for Common and Class B common stock $ 2.40 $ 2.07 $ 3.32 $ 2.80 Anti-dilutive stock options not included above 40,797 63,467 24,044 27,787 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 June 30, 2018 and 2017, our outstanding Class B common stock was convertible into 2,599,496 and 2,709,311 shares of our Common stock, respectively.

OTHER COMPREHENSIVE (LOSS) INCO

OTHER COMPREHENSIVE (LOSS) INCOME	6 Months Ended
	Jun. 30, 2018
OTHER COMPREHENSIVE (LOSS) INCOME	4. 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 its functional currency and changes in the unrealized gains (losses) on cash flow hedging instruments and equity securities. The tax effects allocated to each component of other comprehensive (loss) income were as follows: Quarter Ended Six Months Ended 2018 2017 2018 2017 Foreign currency translation adjustment $ (5,046 ) $ 5,770 $ (11,691 ) $ 7,925 Unrealized gain (loss) on cash flow hedging instruments 520 304 727 (119 ) Income tax (expense) benefit (140 ) (82 ) (196 ) 32 Unrealized gain (loss) on cash flow hedging instruments, net of tax 380 222 531 (87 ) Reclassification of loss (gain) on cash flow hedging instruments into earnings 144 (937 ) 1,175 (1,180 ) Income tax (benefit) expense (39 ) 254 (317 ) 319 Reclassification of loss (gain) on cash flow hedging instruments into earnings, net of tax 105 (683 ) 858 (861 ) Unrealized (loss) gain on equity securities — (8 ) — 5 Income tax benefit (expense) — 3 — (2 ) Unrealized (loss) gain on equity securities, net of tax — (5 ) — 3 Other comprehensive (loss) income $ (4,561 ) $ 5,304 $ (10,302 ) $ 6,980 The changes in each component of accumulated other comprehensive loss, net of tax, were as follows: Six Months Ended June 30, 2018 2017 Foreign currency translation adjustment: Beginning balance $ (33,499 ) $ (43,459 ) Current period other comprehensive (loss) income (7,373 ) 4,907 Ending balance (40,872 ) (38,552 ) Cash flow hedging instruments: Beginning balance (421 ) 215 Current period other comprehensive income (loss) 319 (52 ) Less reclassification adjustment 515 (517 ) Ending balance 413 (354 ) Equity securities: Beginning balance (301 ) (286 ) Cumulative-effect adjustment to retained earnings 301 — Current period other comprehensive income — 3 Ending balance — (283 ) Accumulated other comprehensive loss, net of tax $ (40,459 ) $ (39,189 )

DEBT

DEBT	6 Months Ended
	Jun. 30, 2018
DEBT	5. DEBT We maintain an unsecured, syndicated revolving credit agreement, which we use to fund seasonal working capital needs and for other general corporate purposes, including acquisitions, dividends (if and as declared by our Board of Directors), capital expenditures, stock repurchases and issuances of letters of credit. Effective February 5, 2018, we decreased the borrowing capacity under this credit agreement from $600,000 to $300,000. Included in the credit facility are a $90,000 swingline subfacility, a $10,000 letter of credit subfacility and a $75,000 multicurrency borrowing sublimit. The credit agreement matures on July 1, 2019. At June 30, 2018 and December 31, 2017, $141,600 and $21,800, respectively, were outstanding under the revolving credit agreement. 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 June 30, 2018. At June 30, 2018, $1,510 of short-term borrowings were outstanding under a credit line established by our Mexican subsidiary. This line of credit has a one-year non-committed

PURCHASE OF ADDITIONAL OWNERSHI

PURCHASE OF ADDITIONAL OWNERSHIP INTEREST IN JOINT VENTURE	6 Months Ended
	Jun. 30, 2018
PURCHASE OF ADDITIONAL OWNERSHIP INTEREST IN JOINT VENTURE	6. PURCHASE OF ADDITIONAL OWNERSHIP INTEREST IN JOINT VENTURE On February 13, 2017, we purchased an additional 10% ownership interest in Carrier Enterprise Northeast LLC, which we refer to as Carrier Enterprise II, for cash consideration of $42,688, which increased our controlling interest from 70% to 80%. Carrier Enterprise II was formed in 2011 as a joint venture with Carrier. Carrier Enterprise II had sales of approximately $545,000 in 2017 from 40 locations in the northeastern United States and 14 locations in Mexico.

INVESTMENT IN UNCONSOLIDATED EN

INVESTMENT IN UNCONSOLIDATED ENTITY	6 Months Ended
	Jun. 30, 2018
INVESTMENT IN UNCONSOLIDATED ENTITY	7. INVESTMENT IN UNCONSOLIDATED ENTITY On June 21, 2017, our first joint venture with Carrier, Carrier Enterprise, LLC, which we refer to as Carrier Enterprise I, acquired an approximately 35% ownership interest in Russell Sigler, Inc. (“RSI”), an HVAC distributor with 2017 sales of approximately $680,000, operating from 30 locations in the Western U.S. We have an 80% controlling interest in Carrier Enterprise I, and Carrier has a 20% non-controlling

DERIVATIVES

DERIVATIVES	6 Months Ended
	Jun. 30, 2018
DERIVATIVES	8. DERIVATIVES We enter into foreign currency forward and option contracts to offset the earnings impact that foreign exchange rate fluctuations would otherwise have on certain monetary liabilities that are denominated in nonfunctional currencies. Cash Flow Hedging Instruments We enter into foreign currency forward contracts that are designated as cash flow hedges. The settlement of these derivatives results in reclassifications from accumulated other comprehensive loss to earnings for the period in which the settlement of these instruments occurs. The maximum period for which we hedge our cash flow using these instruments is 12 months. Accordingly, at June 30, 2018, all of our open foreign currency forward contracts had maturities of one year or less. The total notional value of our foreign currency exchange contracts designated as cash flow hedges at June 30, 2018 was $31,700, and such contracts have varying terms expiring through March 2019. The impact from foreign exchange derivative instruments designated as cash flow hedges was as follows: Quarter Ended Six Months Ended 2018 2017 2018 2017 Gain (loss) recorded in accumulated other comprehensive loss $ 520 $ 304 $ 727 $ (119 ) Loss (gain) reclassified from accumulated other comprehensive loss into earnings $ 144 $ (937 ) $ 1,175 $ (1,180 ) At June 30, 2018, we expected an estimated $941 pre-tax Derivatives Not Designated as Hedging Instruments We have also entered into foreign currency forward and option contracts that are either not designated as hedges or did not qualify for hedge accounting. These derivative instruments were effective economic hedges for all of the periods presented. The fair value gains and losses on these contracts are recognized in earnings as a component of selling, general and administrative expenses. The total notional value of our foreign currency exchange contracts not designated as hedging instruments at June 30, 2018 was $11,750, and such contracts have varying terms expiring through August 2018. We recognized gains of $180 and $173 from foreign currency forward and option contracts not designated as hedging instruments in our condensed consolidated unaudited statements of income for the quarters ended June 30, 2018 and 2017, respectively. We recognized losses of $191 and $410 from foreign currency forward and option contracts not designated as hedging instruments in our condensed consolidated unaudited statements of income for the six months ended June 30, 2018 and 2017, respectively. The following table summarizes the fair value of derivative instruments, which consist solely of foreign exchange contracts, included in other current assets and accrued expenses and other current liabilities in our condensed consolidated unaudited balance sheets. See Note 9. Asset Derivatives Liability Derivatives June 30, 2018 December 31, 2017 June 30, 2018 December 31, 2017 Derivatives designated as hedging instruments $ 769 $ 70 $ 73 $ 773 Derivatives not designated as hedging instruments 40 180 68 184 Total derivative instruments $ 809 $ 250 $ 141 $ 957

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS	6 Months Ended
	Jun. 30, 2018
FAIR VALUE MEASUREMENTS	9. FAIR VALUE MEASUREMENTS The following tables present our assets and liabilities carried at fair value that are measured on a recurring basis: Total Fair Value Measurements Balance Sheet Location Level 1 Level 2 Level 3 Assets: Derivative financial instruments Other current assets $ 809 $ — $ 809 $ — Equity securities Other assets $ 357 $ 357 $ — $ — Liabilities: Derivative financial instruments Accrued expenses and other current liabilities $ 141 $ — $ 141 $ — Total Fair Value Measurements Balance Sheet Location Level 1 Level 2 Level 3 Assets: Derivative financial instruments Other current assets $ 250 $ — $ 250 $ — Equity securities Other assets $ 332 $ 332 $ — $ — Liabilities: Derivative financial instruments Accrued expenses and other current liabilities $ 957 $ — $ 957 $ — 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: Equity securities Derivative financial instruments There were no transfers in or out of Level 1 and Level 2 during the six months ended June 30, 2018.

SHAREHOLDERS' EQUITY

SHAREHOLDERS' EQUITY	6 Months Ended
	Jun. 30, 2018
SHAREHOLDERS' EQUITY	10. SHAREHOLDERS’ EQUITY Common Stock Dividends We paid cash dividends of $1.45, $1.05, $2.70 and $2.10 per share of both Common stock and Class B common stock during the quarters and six months ended June 30, 2018 and 2017, respectively. Non-Vested During the quarters ended June 30, 2018 and 2017, we granted 8,500 and 55,500 shares of non-vested non-vested During the quarter and six months ended June 30, 2018, 12,924 shares of Common stock with an aggregate fair market value of $2,213 were withheld as payment in lieu of cash to satisfy tax withholding obligations in connection with the vesting of non-vested non-vested Exercise of Stock Options During the quarters ended June 30, 2018 and 2017, 9,501 and 2,250 stock options, respectively, were exercised for Common stock. During the six months ended June 30, 2018 and 2017, 44,584 and 16,000 stock options, respectively, were exercised for Common stock. Cash received from common stock issued as a result of stock options exercised during the quarters and six months ended June 30, 2018 and 2017, was $1,369, $208, $3,981 and $1,310, respectively. During the quarter ended June 30, 2018, 1,610 shares of Common stock with an aggregate fair market value of $286 were withheld as payment in lieu of cash for stock option exercises. These shares were retired upon delivery. During the six months ended June 30, 2018, 6,651 shares of Common stock with an aggregate fair market value of $1,200 were withheld as payment in lieu of cash for stock option exercises. These shares were retired upon delivery. Employee Stock Purchase Plan During the quarters ended June 30, 2018 and 2017, 2,434 and 2,306 shares of Common stock were issued under our employee stock purchase plan for which we received net proceeds of $414 and $317, respectively. During the six months ended June 30, 2018 and 2017, 4,481 and 4,259 shares of Common stock were issued under our employee stock purchase plan for which we received net proceeds of $760 and $602, respectively. 401(k) Plan During the six months ended June 30, 2018 and 2017, we issued 17,318 and 16,389 shares of Common stock, respectively, to our profit sharing retirement plan, representing the Common stock discretionary matching contribution of $2,945 and $2,428, respectively. Non-controlling As described under the heading “Joint Ventures with Carrier Corporation” in Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operation contained in this Quarterly Report on Form 10-Q, non-controlling non-controlling Non-controlling $ 253,024 Net income attributable to non-controlling 26,465 Foreign currency translation adjustment (4,318 ) Distributions to non-controlling (2,178 ) Gain recorded in accumulated other comprehensive loss 212 Loss reclassified from accumulated other comprehensive loss into earnings 343 Non-controlling $ 273,548

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	6 Months Ended
	Jun. 30, 2018
COMMITMENTS AND CONTINGENCIES	11. 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 $2,245 and $2,344 at June 30, 2018 and December 31, 2017, respectively, were established related to such programs and are included in accrued expenses and other current liabilities in our condensed consolidated unaudited balance sheets.

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS	6 Months Ended
	Jun. 30, 2018
RELATED PARTY TRANSACTIONS	12. RELATED PARTY TRANSACTIONS Purchases from Carrier and its affiliates comprised 64% and 62% of all inventory purchases made during the quarters ended June 30, 2018 and 2017, respectively. Purchases from Carrier and its affiliates comprised 63% and 62% of all inventory purchases made during the six months ended June 30, 2018 and 2017, respectively. At June 30, 2018 and December 31, 2017, approximately $152,000 and $75,000, 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 condensed consolidated unaudited statements of income for the quarters and six months ended June 30, 2018 and 2017 included approximately $21,000, $21,000, $37,000 and $32,000, respectively, of sales to Carrier and its affiliates. We believe these transactions are conducted on terms equivalent to an arm’s-length A member of our Board of Directors is the Chairman and Chief Executive Officer of Moss & Associates LLC, who served as general contractor for the remodeling of our Miami headquarters, which was completed in 2018. We paid Moss & Associates LLC $71, $226, $124 and $644 for construction services performed during the quarters and six months ended June 30, 2018 and June 30, 2017, respectively, and no amount was payable at June 30, 2018. A member of our Board of Directors is the Senior Chairman of Greenberg Traurig, P.A., which serves as our principal outside counsel for compliance and acquisition-related legal services. During the quarters and six months ended June 30, 2018 and June 30, 2017, we paid this firm $14, $200, $18 and $220 for services performed, respectively, and $28 was payable at June 30, 2018.

BASIS OF PRESENTATION (Policies

BASIS OF PRESENTATION (Policies)	6 Months Ended
	Jun. 30, 2018
Basis of Consolidation	Basis of Consolidation Watsco, Inc. (collectively with its subsidiaries, “Watsco,” “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 in North America. The accompanying June 30, 2018 interim condensed consolidated unaudited financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and note disclosures normally included in the annual financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to those rules and regulations, but we believe the disclosures made are adequate to make the information presented not misleading. In the opinion of management, all adjustments, consisting of normal and recurring adjustments, necessary for a fair presentation have been included in the condensed consolidated unaudited financial statements included herein. These statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our 2017 Annual Report on Form 10-K. The condensed consolidated unaudited financial statements contained in this report include the accounts of Watsco, all of its wholly owned subsidiaries and 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. The results of operations for the quarter and six months ended June 30, 2018 are not necessarily indicative of the results to be expected for the year ending December 31, 2018. Sales of residential central air conditioners, heating equipment, and parts and supplies are seasonal. Furthermore, results of operations can be impacted favorably or unfavorably based on weather patterns, primarily during the Summer and Winter selling seasons. 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 market is generally evenly distributed throughout the year, subject to weather and economic conditions, including their effect on the number of housing completions.
Equity Method Investments	Equity Method Investments Investments in which we have the ability to exercise significant influence, but do not control, are accounted for under the equity method of accounting and are included in other assets in our consolidated balance sheets. Under this method of accounting, our proportionate share of the net income or loss of the investee is included in other income in our consolidated statements of income. The excess, if any, of the carrying amount of our investment over our ownership percentage in the underlying net assets of the investee is attributed to certain fair value adjustments with the remaining portion recognized as goodwill.
Reclassifications	Reclassifications Certain reclassifications of prior year amounts have been made to conform to the 2018 presentation. These reclassifications had no effect on net income or earnings per share as previously reported.
Use of Estimates	Use of Estimates The preparation of condensed consolidated unaudited 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 condensed consolidated unaudited 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.
Recently Adopted Accounting Standards and Recently Issued Accounting Standards Not Yet Adopted	Recently Adopted Accounting Standards Revenue Recognition In May 2014, the Financial Accounting Standards Board (the “FASB”) issued a standard on revenue recognition that provides a single, comprehensive revenue recognition model for all contracts with customers. The standard is principle-based and provides a five-step model to determine the measurement of revenue and timing of when it is recognized. In 2015 and 2016, the FASB issued several updates to this standard. The adoption of this standard and its related amendments (collectively, the “New Revenue Standard”) on January 1, 2018 did not result in the recognition of a cumulative adjustment to opening retained earnings under the modified retrospective approach, nor did it have a significant impact on our consolidated net income, balance sheet or cash flow. See Note 2. Financial Instruments In January 2016, the FASB issued guidance related to certain aspects of recognition, measurement, presentation and disclosure of financial instruments. Most prominent among the changes to the standard is the requirement that changes in the fair value of equity investments, with certain exceptions, be recognized through net income rather than other comprehensive income. This guidance must be applied using a modified retrospective approach through a cumulative-effect adjustment to retained earnings and became effective for interim and annual periods beginning after December 15, 2017. The adoption of this guidance did not have a material impact on our consolidated financial statements. A cumulative-effect adjustment captured the previously held unrealized losses of $301 related to our equity investment carried at fair value. See Note 4. Stock Compensation In May 2017, the FASB issued guidance to clarify when to account for a change to the terms or conditions of a share-based payment award as a modification. Under the new guidance, modification accounting is required only if the fair value, the vesting conditions or the classification of the award (as equity or liability) changes as a result of the change in terms or conditions. This guidance must be applied prospectively and became effective for interim and annual periods beginning after December 15, 2017. The adoption of this guidance did not have a material impact on our consolidated financial statements. Derivatives and Hedging In August 2017, the FASB issued guidance to simplify the accounting for hedging derivatives. This guidance is effective prospectively and is effective for interim and annual periods beginning after December 15, 2018 with early adoption permitted. We elected to adopt this guidance during the quarter ended June 30, 2018, which did not have a material impact on our consolidated financial statements. Recently Issued Accounting Standards Not Yet Adopted Leases In February 2016, the FASB issued guidance on accounting for leases, which requires lessees to recognize most leases on their balance sheets for the rights and obligations created by those leases. We will apply this guidance using a modified retrospective approach, and it will be effective for interim and annual periods beginning after December 15, 2018. Based on our preliminary assessment of our lease portfolio, we expect the adoption of this guidance to have a material impact on our consolidated balance sheets due to the recognition of right-of-use 10-K Intangibles—Goodwill and Other In January 2017, the FASB issued guidance to simplify the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. Under this updated standard, an entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, but the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. An entity also should consider income tax effects from any tax-deductible
Self-Insurance	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.

REVENUES (Tables)

REVENUES (Tables)	6 Months Ended
	Jun. 30, 2018
Summary of Disaggregated Revenue	The following table presents our revenues disaggregated by primary geographical regions and major product lines within our single reporting segment: Quarter Ended Six Months Ended 2018 2017(1) 2018 2017(1) Primary Geographical Regions: United States $ 1,217,376 $ 1,163,739 $ 2,057,644 $ 1,950,019 Canada 79,119 71,847 131,479 123,380 Mexico 36,248 40,338 70,197 74,620 $ 1,332,743 $ 1,275,924 $ 2,259,320 $ 2,148,019 Major Product Lines: HVAC equipment 68 % 67 % 67 % 66 % Other HVAC products 28 % 28 % 29 % 29 % Commercial refrigeration products 4 % 5 % 4 % 5 % 100 % 100 % 100 % 100 % (1) As noted above, prior period amounts have not been adjusted under the modified retrospective method and remain as originally reported for such periods.

EARNINGS PER SHARE (Tables)

EARNINGS PER SHARE (Tables)	6 Months Ended
	Jun. 30, 2018
Schedule of Basic and Diluted Earnings Per Common Share	The following table presents the calculation of basic and diluted earnings per share for our Common and Class B common stock: Quarter Ended Six Months Ended 2018 2017 2018 2017 Basic Earnings per Share: Net income attributable to Watsco, Inc. shareholders $ 89,957 $ 73,756 $ 124,176 $ 99,937 Less: distributed and undistributed earnings allocated to non-vested 7,379 6,189 10,147 8,376 Earnings allocated to Watsco, Inc. shareholders $ 82,578 $ 67,567 $ 114,029 $ 91,561 Weighted-average common shares outstanding—Basic 34,309,885 32,682,474 34,282,261 32,662,653 Basic earnings per share for Common and Class B common stock $ 2.41 $ 2.07 $ 3.33 $ 2.80 Allocation of earnings for Basic: Common stock $ 76,321 $ 61,966 $ 105,383 $ 83,966 Class B common stock 6,257 5,601 8,646 7,595 $ 82,578 $ 67,567 $ 114,029 $ 91,561 Diluted Earnings per Share: Net income attributable to Watsco, Inc. shareholders $ 89,957 $ 73,756 $ 124,176 $ 99,937 Less: distributed and undistributed earnings allocated to non-vested 7,374 6,186 10,144 8,374 Earnings allocated to Watsco, Inc. shareholders $ 82,583 $ 67,570 $ 114,032 $ 91,563 Weighted-average common shares outstanding—Basic 34,309,885 32,682,474 34,282,261 32,662,653 Effect of dilutive stock options 69,310 26,172 67,554 31,653 Weighted-average common shares outstanding—Diluted 34,379,195 32,708,646 34,349,815 32,694,306 Diluted earnings per share for Common and Class B common stock $ 2.40 $ 2.07 $ 3.32 $ 2.80 Anti-dilutive stock options not included above 40,797 63,467 24,044 27,787

OTHER COMPREHENSIVE (LOSS) IN22

OTHER COMPREHENSIVE (LOSS) INCOME (Tables)	6 Months Ended
	Jun. 30, 2018
Schedule of Tax Effects Allocated to Each Component of Other Comprehensive Income	The tax effects allocated to each component of other comprehensive (loss) income were as follows: Quarter Ended Six Months Ended 2018 2017 2018 2017 Foreign currency translation adjustment $ (5,046 ) $ 5,770 $ (11,691 ) $ 7,925 Unrealized gain (loss) on cash flow hedging instruments 520 304 727 (119 ) Income tax (expense) benefit (140 ) (82 ) (196 ) 32 Unrealized gain (loss) on cash flow hedging instruments, net of tax 380 222 531 (87 ) Reclassification of loss (gain) on cash flow hedging instruments into earnings 144 (937 ) 1,175 (1,180 ) Income tax (benefit) expense (39 ) 254 (317 ) 319 Reclassification of loss (gain) on cash flow hedging instruments into earnings, net of tax 105 (683 ) 858 (861 ) Unrealized (loss) gain on equity securities — (8 ) — 5 Income tax benefit (expense) — 3 — (2 ) Unrealized (loss) gain on equity securities, net of tax — (5 ) — 3 Other comprehensive (loss) income $ (4,561 ) $ 5,304 $ (10,302 ) $ 6,980
Schedule of Accumulated Other Comprehensive Loss	The changes in each component of accumulated other comprehensive loss, net of tax, were as follows: Six Months Ended June 30, 2018 2017 Foreign currency translation adjustment: Beginning balance $ (33,499 ) $ (43,459 ) Current period other comprehensive (loss) income (7,373 ) 4,907 Ending balance (40,872 ) (38,552 ) Cash flow hedging instruments: Beginning balance (421 ) 215 Current period other comprehensive income (loss) 319 (52 ) Less reclassification adjustment 515 (517 ) Ending balance 413 (354 ) Equity securities: Beginning balance (301 ) (286 ) Cumulative-effect adjustment to retained earnings 301 — Current period other comprehensive income — 3 Ending balance — (283 ) Accumulated other comprehensive loss, net of tax $ (40,459 ) $ (39,189 )

DERIVATIVES (Tables)

DERIVATIVES (Tables)	6 Months Ended
	Jun. 30, 2018
Impact from Foreign Exchange Derivative Instruments Designated as Cash Flow Hedges	The impact from foreign exchange derivative instruments designated as cash flow hedges was as follows: Quarter Ended Six Months Ended 2018 2017 2018 2017 Gain (loss) recorded in accumulated other comprehensive loss $ 520 $ 304 $ 727 $ (119 ) Loss (gain) reclassified from accumulated other comprehensive loss into earnings $ 144 $ (937 ) $ 1,175 $ (1,180 )
Fair Value of Derivative Instruments and Location in the Balance Sheets	The following table summarizes the fair value of derivative instruments, which consist solely of foreign exchange contracts, included in other current assets and accrued expenses and other current liabilities in our condensed consolidated unaudited balance sheets. See Note 9. Asset Derivatives Liability Derivatives June 30, 2018 December 31, 2017 June 30, 2018 December 31, 2017 Derivatives designated as hedging instruments $ 769 $ 70 $ 73 $ 773 Derivatives not designated as hedging instruments 40 180 68 184 Total derivative instruments $ 809 $ 250 $ 141 $ 957

FAIR VALUE MEASUREMENTS (Tables

FAIR VALUE MEASUREMENTS (Tables)	6 Months Ended
	Jun. 30, 2018
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: Total Fair Value Measurements Balance Sheet Location Level 1 Level 2 Level 3 Assets: Derivative financial instruments Other current assets $ 809 $ — $ 809 $ — Equity securities Other assets $ 357 $ 357 $ — $ — Liabilities: Derivative financial instruments Accrued expenses and other current liabilities $ 141 $ — $ 141 $ — Total Fair Value Measurements Balance Sheet Location Level 1 Level 2 Level 3 Assets: Derivative financial instruments Other current assets $ 250 $ — $ 250 $ — Equity securities Other assets $ 332 $ 332 $ — $ — Liabilities: Derivative financial instruments Accrued expenses and other current liabilities $ 957 $ — $ 957 $ —

SHAREHOLDERS' EQUITY (Tables)

SHAREHOLDERS' EQUITY (Tables)	6 Months Ended
	Jun. 30, 2018
Schedule of Rollforward of Non-controlling Interest Balance	The following table reconciles shareholders’ equity attributable to Carrier’s non-controlling Non-controlling $ 253,024 Net income attributable to non-controlling 26,465 Foreign currency translation adjustment (4,318 ) Distributions to non-controlling (2,178 ) Gain recorded in accumulated other comprehensive loss 212 Loss reclassified from accumulated other comprehensive loss into earnings 343 Non-controlling $ 273,548

Basis of Presentation - Additio

Basis of Presentation - Additional Information (Detail) $ in Thousands	6 Months Ended
	Jun. 30, 2018USD ($)Entity
Significant Accounting Policies [Line Items]
Number of joint ventures | Entity	3
Cumulative-effect adjustment to retained earnings | $	$ 301

Revenues - Additional Informati

Revenues - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2018	Dec. 31, 2017
Accrued sales returns included in accrued expenses and other current liabilities	$ 17,437	$ 17,437
Accrued sales incentives included in accrued expenses and other current liabilities	$ 11,600	$ 11,600	$ 13,001
Product Concentration Risk | Total Service Revenue | Maximum
Total service revenue as percentage of consolidated revenues	1.00%	1.00%

Summary of Disaggregated Revenu

Summary of Disaggregated Revenue (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Disaggregation of Revenue [Line Items]
Revenues	$ 1,332,743	$ 1,275,924	$ 2,259,320	$ 2,148,019
United States
Disaggregation of Revenue [Line Items]
Revenues	1,217,376	1,163,739	2,057,644	1,950,019
Canada
Disaggregation of Revenue [Line Items]
Revenues	79,119	71,847	131,479	123,380
Mexico
Disaggregation of Revenue [Line Items]
Revenues	$ 36,248	$ 40,338	$ 70,197	$ 74,620
Sales Revenue
Disaggregation of Revenue [Line Items]
Revenues from product lines, percentage	100.00%	100.00%	100.00%	100.00%
Sales Revenue | HVAC Equipment
Disaggregation of Revenue [Line Items]
Revenues from product lines, percentage	68.00%	67.00%	67.00%	66.00%
Sales Revenue | Other HVAC Products
Disaggregation of Revenue [Line Items]
Revenues from product lines, percentage	28.00%	28.00%	29.00%	29.00%
Sales Revenue | Commercial Refrigeration Products
Disaggregation of Revenue [Line Items]
Revenues from product lines, percentage	4.00%	5.00%	4.00%	5.00%

Schedule of Basic and Diluted E

Schedule of Basic and Diluted Earnings per Common Share (Detail) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Net income attributable to Watsco, Inc. shareholders	$ 89,957	$ 73,756	$ 124,176	$ 99,937
Less: distributed and undistributed earnings allocated to non-vested restricted common stock - Basic	7,379	6,189	10,147	8,376
Earnings allocated to Watsco, Inc. shareholders - Basic	$ 82,578	$ 67,567	$ 114,029	$ 91,561
Weighted-average common shares outstanding - Basic	34,309,885	32,682,474	34,282,261	32,662,653
Basic earnings per share for Common and Class B common stock	$ 2.41	$ 2.07	$ 3.33	$ 2.80
Net income attributable to Watsco, Inc. shareholders	$ 89,957	$ 73,756	$ 124,176	$ 99,937
Less: distributed and undistributed earnings allocated to non-vested restricted common stock - Diluted	7,374	6,186	10,144	8,374
Earnings allocated to Watsco, Inc. shareholders - Diluted	$ 82,583	$ 67,570	$ 114,032	$ 91,563
Weighted-average common shares outstanding - Basic	34,309,885	32,682,474	34,282,261	32,662,653
Effect of dilutive stock options	69,310	26,172	67,554	31,653
Weighted-average common shares outstanding - Diluted	34,379,195	32,708,646	34,349,815	32,694,306
Diluted earnings per share for Common and Class B common stock	$ 2.40	$ 2.07	$ 3.32	$ 2.80
Anti-dilutive stock options not included above	40,797	63,467	24,044	27,787
Common Stock
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Earnings allocated to Watsco, Inc. shareholders - Basic	$ 76,321	$ 61,966	$ 105,383	$ 83,966
Class B Common Stock
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Earnings allocated to Watsco, Inc. shareholders - Basic	$ 6,257	$ 5,601	$ 8,646	$ 7,595

Earnings Per Share - Additional

Earnings Per Share - Additional Information (Detail) - shares	Jun. 30, 2018	Jun. 30, 2017
Earnings Per Share [Line Items]
Class B common stock conversion, number of shares	2,599,496	2,709,311

Schedule of Tax Effects Allocat

Schedule of Tax Effects Allocated to Each Component of Other Comprehensive Income (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Components Of Other Comprehensive Income Loss [Line Items]
Foreign currency translation adjustment	$ (5,046)	$ 5,770	$ (11,691)	$ 7,925
Unrealized gain (loss) on cash flow hedging instruments	520	304	727	(119)
Income tax (expense) benefit	(140)	(82)	(196)	32
Unrealized gain (loss) on cash flow hedging instruments, net of tax	380	222	531	(87)
Reclassification of loss (gain) on cash flow hedging instruments into earnings	144	(937)	1,175	(1,180)
Income tax (benefit) expense	(39)	254	(317)	319
Reclassification of loss (gain) on cash flow hedging instruments into earnings, net of tax	105	(683)	858	(861)
Unrealized (loss) gain on equity securities		(8)		5
Income tax benefit (expense)		3		(2)
Unrealized (loss) gain on equity securities, net of tax		(5)		3
Other comprehensive (loss) income	$ (4,561)	$ 5,304	$ (10,302)	$ 6,980

Schedule of Accumulated Other C

Schedule of Accumulated Other Comprehensive Loss (Detail) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance	$ (34,221)
Cumulative-effect adjustment to retained earnings	301
Ending balance	(40,459)	$ (39,189)
Foreign Currency Translation Adjustment
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance	(33,499)	(43,459)
Current period other comprehensive (loss) income	(7,373)	4,907
Ending balance	(40,872)	(38,552)
Cash Flow Hedging Instruments
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance	(421)	215
Current period other comprehensive (loss) income	319	(52)
Less reclassification adjustment	515	(517)
Ending balance	413	(354)
Equity Securities
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance	(301)	(286)
Cumulative-effect adjustment to retained earnings	$ 301
Current period other comprehensive (loss) income		3
Ending balance		$ (283)

Debt - Additional Information (

Debt - Additional Information (Detail)	6 Months Ended
	Jun. 30, 2018USD ($)	Jun. 30, 2018MXN ($)	Feb. 05, 2018USD ($)	Dec. 31, 2017USD ($)
Debt Instrument [Line Items]
Borrowings under credit agreement	$ 141,600,000			$ 21,800,000
Short-term debt	$ 1,510,000
Mexico
Debt Instrument [Line Items]
Credit agreement, maturity date	Jun. 12, 2019
Credit agreement, maximum borrowing capacity	$ 3,800,000	$ 75,000,000
Short-term debt	$ 1,510,000			0
Short-term borrowings maturity period	1 year
Current Revolving Credit Facility
Debt Instrument [Line Items]
Credit agreement, maturity date	Jul. 1, 2019
Credit agreement, maximum borrowing capacity			$ 300,000,000	600,000,000
Borrowings under credit agreement	$ 141,600,000			21,800,000
Swingline Subfacility
Debt Instrument [Line Items]
Credit agreement, maximum borrowing capacity				90,000,000
Multicurrency Borrowing Sublimit
Debt Instrument [Line Items]
Credit agreement, maximum borrowing capacity				75,000,000
Letter of Credit
Debt Instrument [Line Items]
Credit agreement, maximum borrowing capacity				$ 10,000,000

Purchase of Additional Owners34

Purchase of Additional Ownership Interest in Joint Ventures - Additional Information (Detail) $ in Thousands	Feb. 13, 2017USD ($)	Jun. 30, 2018USD ($)	Jun. 30, 2017USD ($)	Jun. 30, 2018USD ($)	Jun. 30, 2017USD ($)	Dec. 31, 2017USD ($)Location	Feb. 12, 2017
Business Acquisition [Line Items]
Cash consideration					$ 42,688
Revenues		$ 1,332,743	$ 1,275,924	$ 2,259,320	2,148,019
Mexico
Business Acquisition [Line Items]
Revenues		$ 36,248	$ 40,338	$ 70,197	$ 74,620
Carrier Enterprise II
Business Acquisition [Line Items]
Additional ownership interest acquired	10.00%
Cash consideration	$ 42,688
Controlling interest, ownership percentage	80.00%	80.00%		80.00%			70.00%
Carrier Enterprise II
Business Acquisition [Line Items]
Revenues						$ 545,000
Carrier Enterprise II | Northeast U.S.
Business Acquisition [Line Items]
Number of locations | Location						40
Carrier Enterprise II | Mexico
Business Acquisition [Line Items]
Number of locations | Location						14

Investment in Unconsolidated 35

Investment in Unconsolidated Entity - Additional Information (Detail) $ in Thousands	Jul. 05, 2018USD ($)	Jun. 21, 2017USD ($)board_memberLocation	Jun. 30, 2017USD ($)	Dec. 31, 2017USD ($)	Jun. 29, 2018
Schedule of Equity Method Investments [Line Items]
Investment in unconsolidated entity			$ 63,600
Proceeds from non-controlling interest for investment in unconsolidated entity			$ 12,720
Carrier Enterprise I
Schedule of Equity Method Investments [Line Items]
Ownership percentage by parent		80.00%
Ownership percentage, by non-controlling owners		20.00%
Russell Sigler Inc
Schedule of Equity Method Investments [Line Items]
Ownership interest acquired		35.00%			36.30%
Investment in unconsolidated entity		$ 63,600
Contribution to investment in unconsolidated entity by controlling interest		50,880
Proceeds from non-controlling interest for investment in unconsolidated entity		$ 12,720
Ownership percentage needed for right to purchase up to 100%		85.00%
Total number of board members | board_member		6
Number of board members that can be appointed based on ownership | board_member		2
Equity method investment, additional ownership interest acquired					1.40%
Russell Sigler Inc | Subsequent Event
Schedule of Equity Method Investments [Line Items]
Investment in unconsolidated entity	$ 3,760
Contribution to investment in unconsolidated entity by controlling interest	3,008
Proceeds from non-controlling interest for investment in unconsolidated entity	$ 752
Russell Sigler Inc | Western United States
Schedule of Equity Method Investments [Line Items]
Number of locations | Location		30
Russell Sigler sales				$ 680,000

Derivatives - Additional Inform

Derivatives - Additional Information (Detail) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Maximum length of time hedged in cash flow hedge			12 months
Foreign Currency Forward Contracts | Cash Flow Hedge
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Notional value of derivatives	$ 31,700,000		$ 31,700,000
Contract maturity period			One year or less
Contract expiring terms			2019-03
Pre-tax gain to be reclassified into earnings within the next 12 months	941,000		$ 941,000
Foreign Exchange Forward And Option Contracts [Member] | Not Designated as Hedging Instrument, Economic Hedge [Member]
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Notional value of derivatives	11,750,000		$ 11,750,000
Contract expiring terms			2018-08
Gains (losses) from foreign currency forward and option contracts not designated as hedging instruments	$ 180,000	$ 173,000	$ (191,000)	$ (410,000)

Impact from Foreign Exchange De

Impact from Foreign Exchange Derivative Instruments Designated as Cash Flow Hedges (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Derivative Instruments, Gain (Loss) [Line Items]
Gain (loss) recorded in accumulated other comprehensive loss	$ 520	$ 304	$ 727	$ (119)
Loss (gain) reclassified from accumulated other comprehensive loss into earnings	144	(937)	1,175	(1,180)
Foreign Currency Forward Contracts | Cash Flow Hedge
Derivative Instruments, Gain (Loss) [Line Items]
Gain (loss) recorded in accumulated other comprehensive loss	520	304	727	(119)
Loss (gain) reclassified from accumulated other comprehensive loss into earnings	$ 144	$ (937)	$ 1,175	$ (1,180)

Fair Value of Derivative Instru

Fair Value of Derivative Instruments and Location in the Balance Sheets (Detail) - Foreign Exchange Forward And Option Contracts [Member] - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Derivatives, Fair Value [Line Items]
Derivative instruments, liabilities derivatives	$ 141	$ 957
Derivative instruments, assets derivatives	809	250
Derivatives Designated as Hedging Instruments
Derivatives, Fair Value [Line Items]
Derivative instruments, liabilities derivatives	73	773
Derivative instruments, assets derivatives	769	70
Not Designated as Hedging Instrument, Economic Hedge [Member]
Derivatives, Fair Value [Line Items]
Derivative instruments, liabilities derivatives	68	184
Derivative instruments, assets derivatives	$ 40	$ 180

Assets and Liabilities Carried

Assets and Liabilities Carried at Fair Value Measured on Recurring Basis (Detail) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Other current assets
Assets:
Derivative financial instruments	$ 809	$ 250
Other assets
Assets:
Equity securities	357	332
Accrued expenses and other current liabilities
Liabilities:
Derivative financial instruments	141	957
Fair Value Measurements, Level 1 | Other assets
Assets:
Equity securities	357	332
Fair Value Measurements, Level 2 | Other current assets
Assets:
Derivative financial instruments	809	250
Fair Value Measurements, Level 2 | Accrued expenses and other current liabilities
Liabilities:
Derivative financial instruments	$ 141	$ 957

Shareholders' Equity - Addition

Shareholders' Equity - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Feb. 13, 2017	Feb. 12, 2017
Stockholders Equity [Line Items]
Cash dividends paid per share of Common and Class B common stock	$ 1.45	$ 1.05	$ 2.70	$ 2.10
Shares of non-vested restricted stock granted	8,500	55,500	100,109	155,899
Shares withheld as payment for tax withholdings related to share based compensation, market value			$ 2,213	$ 2,771
Stock options exercised, shares	9,501	2,250	44,584	16,000
Stock options exercised, proceeds	$ 1,369	$ 208	$ 3,981	$ 1,310
Common stock issued under employee stock purchase plan, shares	2,434	2,306	4,481	4,259
Common stock issued under employee stock purchase plan, net proceeds	$ 414	$ 317	$ 760	$ 602
Stock Options | Common Stock
Stockholders Equity [Line Items]
Shares withheld to cover cost for stock option exercises related to share based compensation, shares	1,610		6,651
Shares withheld to cover cost for stock option exercises related to share based compensation, market value	$ 286		$ 1,200
Non-Vested Restricted Stock | Common Stock
Stockholders Equity [Line Items]
Shares withheld as payment for tax withholdings related to share based compensation, shares	12,924	20,100	12,924	20,100
Shares withheld as payment for tax withholdings related to share based compensation, market value	$ 2,213	$ 2,771	$ 2,213	$ 2,771
Carrier Enterprise I
Stockholders Equity [Line Items]
Controlling interest, ownership percentage	80.00%		80.00%
Carrier Enterprise II
Stockholders Equity [Line Items]
Controlling interest, ownership percentage	80.00%		80.00%		80.00%	70.00%
Carrier Enterprise III
Stockholders Equity [Line Items]
Controlling interest, ownership percentage	60.00%		60.00%
401(k) Plan
Stockholders Equity [Line Items]
Common stock contribution to 401(k) Plan, shares			17,318	16,389
Common stock contribution to 401(k) Plan			$ 2,945	$ 2,428

Schedule of Rollforward of Non-

Schedule of Rollforward of Non-controlling Interest Balance (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Noncontrolling Interest [Line Items]
Non-controlling interest beginning balance			$ 253,024
Net income attributable to non-controlling interest	$ 18,307	$ 17,091	26,465	$ 24,678
Foreign currency translation adjustment			(4,318)
Distributions to non-controlling interest			(2,178)
Non-controlling interest ending balance	$ 273,548		273,548
Non-controlling Interest
Noncontrolling Interest [Line Items]
Gain recorded in accumulated other comprehensive loss			212
Loss reclassified from accumulated other comprehensive loss into earnings			$ 343

Commitments and Contingencies -

Commitments and Contingencies - Additional Information (Detail) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Commitments and Contingencies Disclosure [Line Items]
Self-insurance reserves	$ 2,245	$ 2,344

Related Party Transactions - Ad

Related Party Transactions - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Carrier and Its Affiliates | Cost of Goods, Total | Supplier Concentration Risk
Related Party Transaction [Line Items]
Percentage of purchases from key suppliers	64.00%	62.00%	63.00%	62.00%
Amount payable to Carrier and its affiliates, net of receivables	$ 152,000		$ 152,000		$ 75,000
Carrier and Its Affiliates | Sales Revenue, Product Line [Member] | Customer Concentration Risk [Member]
Related Party Transaction [Line Items]
Revenues from sales to Carrier and its affiliates	21,000	$ 21,000	37,000	$ 32,000
Moss & Associates LLC | Customary Payments for Remodeling of Corporate Headquarters
Related Party Transaction [Line Items]
Payment for related party transaction	71	226	124	644
Amount payable to related party	0		0
Greenberg Traurig, P.A. | Customary Fees for Legal Services
Related Party Transaction [Line Items]
Payment for related party transaction	14	$ 200	18	$ 220
Amount payable to related party	$ 28		$ 28