Watsco (WSO) 10-Q 8 Aug 19 2019 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2019	Aug. 05, 2019
Document Information [Line Items]
Document Type	10-Q
Document Period End Date	Jun. 30, 2019
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q2
Current Fiscal Year End Date	--12-31
Amendment Flag	false
Entity Registrant Name	WATSCO INC
Entity Central Index Key	0000105016
Entity Filer Category	Large Accelerated Filer
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Shell Company	false
Entity File Number	1-5581
Entity Small Business	false
Entity Incorporation, State or Country Code	FL
Entity Emerging Growth Company	false
Document Quarterly Report	true
Document Transition Report	false
Entity Address, State or Province	FL
Entity Tax Identification Number	59-0778222
Entity Address, Address Line One	2665 South Bayshore Drive
Entity Address, City or Town	Miami
Entity Address, Postal Zip Code	33133
City Area Code	305
Local Phone Number	714-4100
Entity Address, Address Line Two	Suite 901
Common Stock [Member]
Document Information [Line Items]
Trading Symbol	WSO
Security Exchange Name	NYSE
Title of 12(b) Security	Common stock, $0.50 par value
Entity Common Stock, Shares Outstanding		32,613,520
Common Class B [Member]
Document Information [Line Items]
Trading Symbol	WSOB
Security Exchange Name	NYSE
Title of 12(b) Security	Class B common stock, $0.50 par value
Entity Common Stock, Shares Outstanding		5,446,199

Condensed Consolidated Unaudite

Condensed Consolidated Unaudited Statements of Income - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Revenues	$ 1,371,854	$ 1,332,743	$ 2,303,132	$ 2,259,320
Cost of sales	1,043,870	1,011,977	1,741,388	1,707,721
Gross profit	327,984	320,766	561,744	551,599
Selling, general and administrative expenses	196,549	186,577	376,621	365,111
Other income	2,965	3,157	4,409	4,795
Operating income	134,400	137,346	189,532	191,283
Interest expense, net	1,212	763	1,988	1,328
Income before income taxes	133,188	136,583	187,544	189,955
Income taxes	25,278	28,319	35,830	39,314
Net income	107,910	108,264	151,714	150,641
Less: net income attributable to non-controlling interest	17,755	18,307	26,522	26,465
Net income attributable to Watsco, Inc.	$ 90,155	$ 89,957	$ 125,192	$ 124,176
Earnings per share for Common and Class B common stock:
Basic	$ 2.40	$ 2.41	$ 3.34	$ 3.33
Diluted	$ 2.40	$ 2.40	$ 3.34	$ 3.32

Condensed Consolidated Unaudi_2

Condensed Consolidated Unaudited Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Net income	$ 107,910	$ 108,264	$ 151,714	$ 150,641
Other comprehensive income (loss), net of tax
Foreign currency translation adjustment	5,297	(5,046)	10,302	(11,691)
Unrealized (loss) gain on cash flow hedging instruments	(517)	380	(1,053)	531
Reclassification of (gain) loss on cash flow hedging instruments into earnings	(128)	105	(402)	858
Other comprehensive income (loss)	4,652	(4,561)	8,847	(10,302)
Comprehensive income	112,562	103,703	160,561	140,339
Less: comprehensive income attributable to non-controlling interest	19,368	16,636	29,547	22,702
Comprehensive income attributable to Watsco, Inc.	$ 93,194	$ 87,067	$ 131,014	$ 117,637

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Current assets:
Cash and cash equivalents	$ 55,915	$ 82,894
Accounts receivable, net	655,418	501,908
Inventories	967,394	837,129
Other current assets	16,367	19,875
Total current assets	1,695,094	1,441,806
Property and equipment, net	95,586	91,046
Operating lease right-of-use assets	190,530
Goodwill	398,575	391,998
Intangible assets, net	155,120	147,851
Other assets	97,529	88,332
Total assets	2,632,434	2,161,033
Current liabilities:
Current portion of long-term obligations	60,784	246
Accounts payable	356,062	200,229
Accrued expenses and other current liabilities	163,672	157,091
Total current liabilities	580,518	357,566
Long-term obligations:
Borrowings under revolving credit agreement	219,600	135,200
Operating lease liabilities, net of current portion	129,636
Other long-term obligations, net of current portion	1,712	552
Total long-term obligations	350,948	135,752
Deferred income taxes and other liabilities	67,606	66,002
Watsco, Inc. shareholders' equity:
Preferred stock, $0.50 par value
Paid-in capital	828,932	832,121
Accumulated other comprehensive loss, net of tax	(40,146)	(45,968)
Retained earnings	632,983	627,969
Treasury stock, at cost	(87,440)	(87,440)
Total Watsco, Inc. shareholders' equity	1,355,595	1,347,849
Non-controlling interest	277,767	253,864
Total shareholders' equity	1,633,362	1,601,713
Total liabilities and shareholders' equity	2,632,434	2,161,033
Common Stock
Watsco, Inc. shareholders' equity:
Common stock, $0.50 par value	18,531	18,476
Class B Common Stock
Watsco, Inc. shareholders' equity:
Common stock, $0.50 par value	$ 2,735	$ 2,691

Condensed Consolidated Balanc_2

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Jun. 30, 2019	Dec. 31, 2018
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 Unaudi_3

Condensed Consolidated Unaudited Statements of Shareholders' Equity - USD ($) $ in Thousands	Total	Common Stock, Class B Common Stock and Preferred Stock	Paid-In Capital	Accumulated Other Comprehensive Loss	Retained Earnings	Treasury Stock	Non-controlling Interest
Beginning balance at Dec. 31, 2017	$ 1,550,977	$ 21,050	$ 804,008	$ (34,221)	$ 594,556	$ (87,440)	$ 253,024
Beginning balance (in shares) at Dec. 31, 2017		37,228,715
Cumulative-effect adjustment at Dec. 31, 2017				301	(301)
Net income	42,377				34,219		8,158
Other comprehensive income (loss)	(5,741)			(3,649)			(2,092)
Issuances of non-vested restricted shares of common stock		$ 46	(46)
Issuances of non-vested restricted shares of common stock (in shares)		91,609
Forfeitures of non-vested restricted shares of common stock		$ (2)	2
Forfeitures of non-vested restricted shares of common stock (in shares)		(3,000)
Common stock contribution to 401(k) plan	2,945	$ 9	2,936
Common stock contribution to 401(k) plan (in shares)		17,318
Stock issuances from exercise of stock options and employee stock purchase plan	4,341	$ 19	4,322
Stock issuances from exercise of stock options and employee stock purchase plan (in shares)		37,130
Retirement of common stock	(914)	$ (3)	(911)
Retirement of common stock (in shares)		(5,041)
Share-based compensation	4,400		4,400
Cash dividends declared and paid on Common and Class B common stock	(46,581)				(46,581)
Distributions to non-controlling interest	(2,178)						(2,178)
Ending balance at Mar. 31, 2018	1,549,626	$ 21,119	814,711	(37,569)	581,893	(87,440)	256,912
Ending balance (in shares) at Mar. 31, 2018		37,366,731
Beginning balance at Dec. 31, 2017	1,550,977	$ 21,050	804,008	(34,221)	594,556	(87,440)	253,024
Beginning balance (in shares) at Dec. 31, 2017		37,228,715
Cumulative-effect adjustment at Dec. 31, 2017				301	(301)
Net income	150,641
Other comprehensive income (loss)	(10,302)
Ending balance at Jun. 30, 2018	1,601,994	$ 21,120	817,559	(40,459)	617,666	(87,440)	273,548
Ending balance (in shares) at Jun. 30, 2018		37,367,632
Beginning balance at Mar. 31, 2018	1,549,626	$ 21,119	814,711	(37,569)	581,893	(87,440)	256,912
Beginning balance (in shares) at Mar. 31, 2018		37,366,731
Net income	108,264				89,957		18,307
Other comprehensive income (loss)	(4,561)			(2,890)			(1,671)
Issuances of non-vested restricted shares of common stock		$ 4	(4)
Issuances of non-vested restricted shares of common stock (in shares)		8,500
Forfeitures of non-vested restricted shares of common stock		$ (2)	2
Forfeitures of non-vested restricted shares of common stock (in shares)		(5,000)
Stock issuances from exercise of stock options and employee stock purchase plan	1,601	$ 6	1,595
Stock issuances from exercise of stock options and employee stock purchase plan (in shares)		11,935
Retirement of common stock	(2,499)	$ (7)	(2,492)
Retirement of common stock (in shares)		(14,534)
Share-based compensation	3,747		3,747
Cash dividends declared and paid on Common and Class B common stock	(54,184)				(54,184)
Ending balance at Jun. 30, 2018	1,601,994	$ 21,120	817,559	(40,459)	617,666	(87,440)	273,548
Ending balance (in shares) at Jun. 30, 2018		37,367,632
Beginning balance at Dec. 31, 2018	1,601,713	$ 21,167	832,121	(45,968)	627,969	(87,440)	253,864
Beginning balance (in shares) at Dec. 31, 2018		37,461,643
Net income	43,804				35,037		8,767
Other comprehensive income (loss)	4,195			2,783			1,412
Issuances of non-vested restricted shares of common stock		$ 39	(39)
Issuances of non-vested restricted shares of common stock (in shares)		77,049
Forfeitures of non-vested restricted shares of common stock		$ (3)	3
Forfeitures of non-vested restricted shares of common stock (in shares)		(5,000)
Common stock contribution to 401(k) plan	4,274	$ 15	4,259
Common stock contribution to 401(k) plan (in shares)		30,715
Stock issuances from exercise of stock options and employee stock purchase plan	1,125	$ 4	1,121
Stock issuances from exercise of stock options and employee stock purchase plan (in shares)		8,925
Retirement of common stock	(428)	$ (1)	(427)
Retirement of common stock (in shares)		(2,985)
Share-based compensation	4,537		4,537
Cash dividends declared and paid on Common and Class B common stock	(59,965)				(59,965)
Ending balance at Mar. 31, 2019	1,599,255	$ 21,221	841,575	(43,185)	603,041	(87,440)	264,043
Ending balance (in shares) at Mar. 31, 2019		37,570,347
Beginning balance at Dec. 31, 2018	1,601,713	$ 21,167	832,121	(45,968)	627,969	(87,440)	253,864
Beginning balance (in shares) at Dec. 31, 2018		37,461,643
Net income	151,714
Other comprehensive income (loss)	8,847
Ending balance at Jun. 30, 2019	1,633,362	$ 21,266	828,932	(40,146)	632,983	(87,440)	277,767
Ending balance (in shares) at Jun. 30, 2019		37,659,852
Beginning balance at Mar. 31, 2019	1,599,255	$ 21,221	841,575	(43,185)	603,041	(87,440)	264,043
Beginning balance (in shares) at Mar. 31, 2019		37,570,347
Net income	107,910				90,155		17,755
Other comprehensive income (loss)	4,652			3,039			1,613
Issuances of non-vested restricted shares of common stock		$ 13	(13)
Issuances of non-vested restricted shares of common stock (in shares)		26,354
Stock issuances from exercise of stock options and employee stock purchase plan	1,951	$ 9	1,942
Stock issuances from exercise of stock options and employee stock purchase plan (in shares)		15,807
Retirement of common stock	(555)	$ (2)	(553)
Retirement of common stock (in shares)		(3,608)
Share-based compensation	4,324		4,324
Cash dividends declared and paid on Common and Class B common stock	(60,213)				(60,213)
Common stock issued for Dunphey & Associates Supply Co., Inc.	7,450	$ 25	7,425
Common stock issued for Dunphey & Associates Supply Co., Inc. (in shares)		50,952
Investment in unconsolidated entity	988						988
Decrease in non-controlling interest in Carrier Enterprise II	(32,400)		(25,768)				(6,632)
Ending balance at Jun. 30, 2019	$ 1,633,362	$ 21,266	$ 828,932	$ (40,146)	$ 632,983	$ (87,440)	$ 277,767
Ending balance (in shares) at Jun. 30, 2019		37,659,852

Condensed Consolidated Unaudi_4

Condensed Consolidated Unaudited Statements of Shareholders' Equity (Parenthetical) - $ / shares	3 Months Ended
	Jun. 30, 2019	Mar. 31, 2019	Jun. 30, 2018	Mar. 31, 2018
Cash dividends declared and paid, common stock	$ 1.60	$ 1.60	$ 1.45	$ 1.25

Condensed Consolidated Unaudi_5

Condensed Consolidated Unaudited Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
Cash flows from operating activities:
Net income	$ 151,714	$ 150,641
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization	11,656	11,027
Share-based compensation	8,174	7,336
Deferred income tax provision	1,156	1,569
Other income from investment in unconsolidated entity	(4,409)	(4,795)
Other, net	5,644	3,260
Changes in operating assets and liabilities, net of effects of acquisition:
Accounts receivable	(146,441)	(183,105)
Inventories	(117,591)	(113,831)
Accounts payable and other liabilities	161,685	107,908
Other, net	(3,141)	734
Net cash provided by (used in) operating activities	68,447	(19,256)
Cash flows from investing activities:
Business acquisition, net of cash acquired	(16,761)
Capital expenditures	(9,197)	(8,824)
Investment in unconsolidated entity	(4,940)
Proceeds from sale of property and equipment	92	86
Net cash used in investing activities	(30,806)	(8,738)
Cash flows from financing activities:
Dividends on Common and Class B common stock	(120,178)	(100,765)
Purchase of additional ownership from non-controlling interest	(32,400)
Repurchases of common stock to satisfy employee withholding tax obligations	(983)	(2,213)
Net repayments of long-term obligations	(230)	(121)
Distributions to non-controlling interest		(2,178)
Proceeds from short-term borrowings		1,510
Proceeds from non-controlling interest for investment in unconsolidated entity	988
Net proceeds from issuances of common stock	3,076	4,741
Net proceeds under revolving credit agreement	84,400	119,800
Net cash (used in) provided by financing activities	(65,327)	20,774
Effect of foreign exchange rate changes on cash and cash equivalents	707	(1,276)
Net decrease in cash and cash equivalents	(26,979)	(8,496)
Cash and cash equivalents at beginning of period	82,894	80,496
Cash and cash equivalents at end of period	55,915	$ 72,000
Supplemental cash flow information:
Common stock issued for Dunphey & Associates Supply Co., Inc.	$ 7,450

BASIS OF PRESENTATION

BASIS OF PRESENTATION	6 Months Ended
	Jun. 30, 2019
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, 2019 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 2018 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, 2019 are not necessarily indicative of the results to be expected for the year ending December 31, 2019. 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. 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 loss contingencies and the valuation of goodwill, indefinite lived intangible assets and long-lived intangible assets. While we believe that these estimates are reasonable, actual results could differ from such estimates. Recently Adopted Accounting Standards Leases In February 2016, the Financial Accounting Standards Board (“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. In July 2018, the FASB issued updated guidance that provides an additional transition method of adoption that allows entities to initially apply the standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings. The adoption of this standard and its related amendments (collectively, the “New Lease Standard”) on January 1, 2019 did not result in the recognition of a cumulative adjustment to opening retained earnings under the additional transition method, nor did it have a significant impact on our consolidated statements of income or cash flows. See Note 2. Recently Issued Accounting Standards Not Yet Adopted 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

LEASES

LEASES	6 Months Ended
	Jun. 30, 2019
LEASES	2. LEASES Adoption of New Lease Standard We adopted the New Lease Standard on January 1, 2019 using the additional transition method described in Note 1 to these condensed consolidated unaudited financial statements. Results for reporting periods beginning on and after January 1, 2019 are presented under the New Lease Standard. Prior periods have not been restated. The New Lease Standard had a material impact on our consolidated balance sheet due to the recognition of right-of-use Practical Expedients We elected the package of practical expedients which did not require us to reassess (1) whether existing contracts contain embedded leases, (2) the lease classification of existing leases, and (3) whether initial direct costs for existing leases would qualify for capitalization under the New Lease Standard. We also elected the practical expedients related to short-term leases and separating lease components from non-lease components for all underlying asset classes. Operating and Finance Leases We have operating leases for real property, vehicles and equipment, and finance leases primarily for vehicles. Operating leases are included in operating lease right-of-use ROU assets represent our right to use an underlying asset for the lease term, and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement dates of the respective leases in determining the present value of the applicable lease payments. Operating lease ROU assets also include any lease pre-payments 1-9 non-lease The components of operating lease expense were as follows: Quarter ended June 30, 2019 Six months ended Lease cost $ 17,984 $ 35,760 Short-term lease cost 2,433 4,609 Variable lease cost 109 315 Sublease income (32 ) (81 ) Total operating lease cost $ 20,494 $ 40,603 Supplemental balance sheet information related to operating leases were as follows: June 30, 2019 ROU assets $ 190,530 Current portion of long-term obligations $ 59,644 Operating lease liabilities 129,636 Total operating lease liabilities $ 189,280 Weighted Average Remaining Lease Term (in years) 3.7 Weighted Average Discount Rate 4.53 % Supplemental cash flow information related to operating leases were as follows: Six Months Ended June 30, 2019 Operating cash flows for the measurement of operating lease liabilities $ 35,544 Operating lease right-of-use $ 222,332 At June 30, 2019, maturities of operating lease liabilities over each of the next five years and thereafter were as follows: Remainder of 2019 $ 35,321 2020 60,667 2021 47,995 2022 33,232 2023 19,039 Thereafter 9,921 Total lease payments 206,175 Less imputed interest 16,895 Total lease liability $ 189,280 At June 30, 2019, we had additional operating leases, primarily for real property, that had not yet commenced. Such leases had estimated future minimum rental commitments of approximately $17,000. These operating leases are expected to commence in 2019 with lease terms of 5-11 Prior to the adoption of the New Lease Standard, rental commitments on an undiscounted basis were approximately $219,300 at December 31, 2018 under non-cancelable

REVENUES

REVENUES	6 Months Ended
	Jun. 30, 2019
REVENUES	3. REVENUES 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 2019 2018 2019 2018 Primary Geographical Regions: United States $ 1,219,208 $ 1,181,461 $ 2,025,719 $ 1,990,962 Canada 77,751 79,119 137,007 131,479 Latin America and the Caribbean 74,895 72,163 140,406 136,879 $ 1,371,854 $ 1,332,743 $ 2,303,132 $ 2,259,320 Major Product Lines: HVAC equipment 69 % 68 % 68 % 67 % Other HVAC products 28 % 28 % 28 % 29 % Commercial refrigeration products 3 % 4 % 4 % 4 % 100 % 100 % 100 % 100 %

EARNINGS PER SHARE

EARNINGS PER SHARE	6 Months Ended
	Jun. 30, 2019
EARNINGS PER SHARE	4. 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 2019 2018 2019 2018 Basic Earnings per Share: Net income attributable to Watsco, Inc. shareholders $ 90,155 $ 89,957 $ 125,192 $ 124,176 Less: distributed and undistributed earnings allocated to non-vested 7,512 7,379 10,355 10,147 Earnings allocated to Watsco, Inc. shareholders $ 82,643 $ 82,578 $ 114,837 $ 114,029 Weighted-average common shares outstanding - Basic 34,435,099 34,309,885 34,411,738 34,282,261 Basic earnings per share for Common and Class B common stock $ 2.40 $ 2.41 $ 3.34 $ 3.33 Allocation of earnings for Basic: Common stock $ 76,456 $ 76,321 $ 106,234 $ 105,383 Class B common stock 6,187 6,257 8,603 8,646 $ 82,643 $ 82,578 $ 114,837 $ 114,029 Diluted Earnings per Share: Net income attributable to Watsco, Inc. shareholders $ 90,155 $ 89,957 $ 125,192 $ 124,176 Less: distributed and undistributed earnings allocated to non-vested 7,511 7,374 10,354 10,144 Earnings allocated to Watsco, Inc. shareholders $ 82,644 $ 82,583 $ 114,838 $ 114,032 Weighted-average common shares outstanding - Basic 34,435,099 34,309,885 34,411,738 34,282,261 Effect of dilutive stock options 27,861 69,310 21,210 67,554 Weighted-average common shares outstanding - Diluted 34,462,960 34,379,195 34,432,948 34,349,815 Diluted earnings per share for Common and Class B common stock $ 2.40 $ 2.40 $ 3.34 $ 3.32 Anti-dilutive stock options not included above 174,457 40,797 213,270 24,044 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, 2019 and 2018, our outstanding Class B common stock was convertible into 2,577,858

OTHER COMPREHENSIVE INCOME (LOS

OTHER COMPREHENSIVE INCOME (LOSS)	6 Months Ended
	Jun. 30, 2019
OTHER COMPREHENSIVE INCOME (LOSS)	5. OTHER COMPREHENSIVE INCOME (LOSS) Other comprehensive (loss) consists of the foreign currency translation adjustment associated with our Canadian operations’ use of the Canadian dollar as their functional currency and changes in the unrealized (losses) on cash flow hedging instruments. The tax effects allocated to each component of other comprehensive income (loss) were as follows: Quarter Ended Six Months Ended 2019 2018 2019 2018 Foreign currency translation adjustment $ 5,297 $ (5,046 ) $ 10,302 $ (11,691 ) Unrealized (loss) on cash flow hedging instruments (709 ) 520 (1,444 ) 727 Income tax (expense) 192 (140 ) 391 (196 ) Unrealized (loss) gain on cash flow hedging instruments, net of tax (517 ) 380 (1,053 ) 531 Reclassification of (gain) on cash flow hedging instruments into earnings (176 ) 144 (551 ) 1,175 Income tax expense (benefit) 48 (39 ) 149 (317 ) Reclassification of (gain) on cash flow hedging instruments into earnings, net of (128 ) 105 (402 ) 858 Other comprehensive (loss) $ 4,652 $ (4,561 ) $ 8,847 $ (10,302 ) The changes in each component of accumulated other comprehensive loss, net of tax, were as follows: Six Months Ended June 30, 2019 2018 Foreign currency translation adjustment: Beginning balance $ (46,604 ) $ (33,499 ) Current period other comprehensive (loss) 6,695 (7,373 ) Ending balance (39,909 ) (40,872 ) Cash flow hedging instruments: Beginning balance 636 (421 ) Current period other comprehensive (loss) income (631 ) 319 Reclassification adjustment (242 ) 515 Ending balance (237 ) 413 Equity securities: Beginning balance — (301 ) Cumulative-effect adjustment to retained earnings — 301 Ending balance — — Accumulated other comprehensive loss, net of tax $ (40,146 ) $ (40,459 )

PURCHASE OF OWNERSHIP INTEREST

PURCHASE OF OWNERSHIP INTEREST FROM JOINT VENTURE	6 Months Ended
	Jun. 30, 2019
PURCHASE OF OWNERSHIP INTEREST FROM JOINT VENTURE	6. PURCHASE OF OWNERSHIP INTEREST FROM JOINT VENTURE Effective May 31, 2019, we purchased an additional 20% ownership interest in Homans Associates II LLC (“Homans”) from Carrier Enterprise Northeast, LLC (“Carrier Enterprise II”) for cash consideration of $32,400, which increased our ownership in Homans to 100%. Homans previously operated as a division of Carrier Enterprise II and subsequent to the purchase operates as a stand-alone subsidiary of the Company with 16 locations in the Northeastern U.S.

INVESTMENT IN UNCONSOLIDATED EN

INVESTMENT IN UNCONSOLIDATED ENTITY	6 Months Ended
	Jun. 30, 2019
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 a 34.9% ownership interest in Russell Sigler, Inc. (“RSI”), an HVAC distributor 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 interest. Carrier Enterprise I acquired its ownership interest in RSI for cash consideration of $63,600, of which we contributed $50,880 and Carrier contributed $12,720. Effective June 29, 2018, Carrier Enterprise I acquired an additional 1.4% ownership interest in RSI, which increased Carrier Enterprise I’s ownership interest in RSI to 36.3% for cash consideration of $3,760 that was paid on July 5, 2018, of which we contributed $3,008 and Carrier contributed $752. Effective April 22, 2019, Carrier Enterprise I acquired an additional 1.8% ownership interest in RSI for cash consideration of $4,940, of which we contributed $3,952 and Carrier contributed $988. This acquisition increased Carrier Enterprise I’s ownership interest in RSI to 38.1%. Carrier Enterprise I is a party to a shareholders agreement (the “Shareholders Agreement”) with RSI and its shareholders. Pursuant to the Shareholders Agreement, RSI’s shareholders have the right to sell, and Carrier Enterprise I has the obligation to purchase, their respective shares of RSI for a purchase price determined based on either book value or a multiple of EBIT, the latter of which Carrier Enterprise I used to calculate the price paid for its investment in RSI. RSI’s shareholders may transfer their respective shares of RSI common stock only to members of the Sigler family or to Carrier Enterprise I, and, at any time from and after the date on which Carrier Enterprise I owns 85

ACQUISITION

ACQUISITION	6 Months Ended
	Jun. 30, 2019
ACQUISITION	8. ACQUISITION On April 2, 2019, one of our wholly owned subsidiaries acquired certain assets and assumed certain liabilities of Dunphey & Associates Supply Co., Inc., a distributor of air conditioning and heating products operating from seven locations in New Jersey, New York and Connecticut. The purchase price was composed of cash consideration of $16,781 and the issuance of 50,952 shares of Common stock having a fair value of $7,450. The results of operations of this acquisition has been included in the consolidated financial statements from the date of acquisition. The pro forma effect of the acquisition was not deemed significant to the consolidated financial statements.

DERIVATIVES

DERIVATIVES	6 Months Ended
	Jun. 30, 2019
DERIVATIVES	9. 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, 2019, 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, 2019 was $43,900, and such contracts have varying terms expiring through March 2020 The impact from foreign exchange derivative instruments designated as cash flow hedges was as follows: Quarter Ended Six Months Ended 2019 2018 2019 2018 (Loss) gain recorded in accumulated other comprehensive loss $ (709 ) $ 520 $ (1,444 ) $ 727 (Gain) loss reclassified from accumulated other comprehensive loss into earnings $ (176 ) $ 144 $ (551 ) $ 1,175 At June 30, 2019, we expected an estimated $545 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, 2019 was $15,160, and such contracts have varying terms expiring through August 2019 We recognized (losses) gains of $(190) and $180 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, 2019 and 2018, respectively. We recognized losses of $303 and $191 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, 2019 and 2018, 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 10. Asset Derivatives Liability Derivatives June 30, 2019 December 31, 2018 June 30, 2019 December 31, 2018 Derivatives designated as hedging instruments $ 11 $ 1,262 $ 851 $ 3 Derivatives not designated as hedging — 58 164 11 Total derivative instruments $ 11 $ 1,320 $ 1,015 $ 14

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS	6 Months Ended
	Jun. 30, 2019
FAIR VALUE MEASUREMENTS	10. 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 $ 11 $ — $ 11 $ — Equity securities Other assets $ 310 $ 310 $ — $ — Liabilities: Derivative financial instruments Accrued expenses and other current liabilities $ 1,015 $ — $ 1,015 $ — Total Fair Value Measurements Balance Sheet Location Level 1 Level 2 Level 3 Assets: Derivative financial instruments Other current assets $ 1,320 $ — $ 1,320 $ — Equity securities Other assets $ 279 $ 279 $ — $ — Liabilities: Derivative financial instruments Accrued expenses and other current liabilities $ 14 $ — $ 14 $ — 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, 2019.

SHAREHOLDERS' EQUITY

SHAREHOLDERS' EQUITY	6 Months Ended
	Jun. 30, 2019
SHAREHOLDERS' EQUITY	11. SHAREHOLDERS’ EQUITY Common Stock Dividends We paid cash dividends of $1.60, $1.45, $3.20, and $2.70 per share of both Common stock and Class B common stock during the quarters and six months ended June 30, 2019 and 2018, respectively. Non-Vested During the quarter and six months ended June 30, 2019, 3,608 shares of Common and Class B common stock with an aggregate fair market value of $555, and 6,593 shares of Common and Class B common stock with an aggregate fair market value of $983, respectively, were withheld as payment in lieu of cash to satisfy tax withholding obligations in connection with the vesting of non-vested 12,924 2,213 non-vested Exercise of Stock Options Cash received from Common stock issued as a result of stock options exercised during the quarters and six months ended June 30, 2019 and 2018, was $1,526, $1,369, $2,243, and $3,981, 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, 2019 and 2018, we received net proceeds of $423 and $414, respectively, for shares of Common stock issued under our employee stock purchase plan. During the six months ended June 30, 2019 and 2018, we received net proceeds of $833 and $760, respectively, for shares of Common stock issued under our employee stock purchase plan.

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	6 Months Ended
	Jun. 30, 2019
COMMITMENTS AND CONTINGENCIES	12. 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 $3,383 and $2,311 at June 30, 2019 and December 31, 2018, 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, 2019
RELATED PARTY TRANSACTIONS	13. RELATED PARTY TRANSACTIONS Purchases from Carrier and its affiliates comprised 63% and 64% of all inventory purchases made during the quarters ended June 30, 2019 and 2018, respectively. Purchases from Carrier and its affiliates comprised 62% and 63% of all inventory purchases made during the six months ended June 30, 2019 and 2018, respectively. At June 30, 2019 and December 31, 2018, approximately $122,000 and $71,000, 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, 2019 and 2018 included approximately $23,000, $21,000, $44,000, and $37,000, 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 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, 2019 and June 30, 2018, we paid this firm $0, $14, $0 and $18 for services performed, respectively, and no amount was payable at June 30, 2019. A member of our Board of Directors is the Chairman and Chief Executive Officer of Moss & Associates LLC, which served as general contractor for the remodeling of our Miami headquarters that was completed in 2018. We paid Moss & Associates LLC $71 and $124 for construction services performed during the quarters and six months ended June 30, 2018, respectively.

SUBSEQUENT EVENT

SUBSEQUENT EVENT	6 Months Ended
	Jun. 30, 2019
SUBSEQUENT EVENT	14. SUBSEQUENT EVENT On August 1, 2019, Carrier Enterprise I acquired substantially all of the assets and assumed certain of the liabilities of Peirce-Phelps, Inc. (“PPI”), an HVAC distributor operating from 19 locations in Pennsylvania, New Jersey, and Delaware, for $85,000 less certain average revolving indebtedness. Consideration for the net purchase price consisted of $10,000 in cash and 372,543 shares of Common stock having a fair value of $58,638. Carrier contributed cash of $ 17,000

BASIS OF PRESENTATION (Policies

BASIS OF PRESENTATION (Policies)	6 Months Ended
	Jun. 30, 2019
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, 2019 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 2018 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, 2019 are not necessarily indicative of the results to be expected for the year ending December 31, 2019. 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.
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 loss contingencies and the valuation of goodwill, indefinite lived intangible assets and long-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 Leases In February 2016, the Financial Accounting Standards Board (“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. In July 2018, the FASB issued updated guidance that provides an additional transition method of adoption that allows entities to initially apply the standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings. The adoption of this standard and its related amendments (collectively, the “New Lease Standard”) on January 1, 2019 did not result in the recognition of a cumulative adjustment to opening retained earnings under the additional transition method, nor did it have a significant impact on our consolidated statements of income or cash flows. See Note 2. Recently Issued Accounting Standards Not Yet Adopted 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

LEASES (Tables)

LEASES (Tables)	6 Months Ended
	Jun. 30, 2019
Components Of Lease Expense	The components of operating lease expense were as follows: Quarter ended June 30, 2019 Six months ended Lease cost $ 17,984 $ 35,760 Short-term lease cost 2,433 4,609 Variable lease cost 109 315 Sublease income (32 ) (81 ) Total operating lease cost $ 20,494 $ 40,603
Summary Of Balance Sheet Information Related To Leases	Supplemental balance sheet information related to operating leases were as follows: June 30, 2019 ROU assets $ 190,530 Current portion of long-term obligations $ 59,644 Operating lease liabilities 129,636 Total operating lease liabilities $ 189,280 Weighted Average Remaining Lease Term (in years) 3.7 Weighted Average Discount Rate 4.53 %
Summary Of Supplemental Cash Flow Information Related to Leases	Supplemental cash flow information related to operating leases were as follows: Six Months Ended June 30, 2019 Operating cash flows for the measurement of operating lease liabilities $ 35,544 Operating lease right-of-use $ 222,332
Maturities Of Operating Lease Liabilities	At June 30, 2019, maturities of operating lease liabilities over each of the next five years and thereafter were as follows: Remainder of 2019 $ 35,321 2020 60,667 2021 47,995 2022 33,232 2023 19,039 Thereafter 9,921 Total lease payments 206,175 Less imputed interest 16,895 Total lease liability $ 189,280

REVENUES (Tables)

REVENUES (Tables)	6 Months Ended
	Jun. 30, 2019
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 2019 2018 2019 2018 Primary Geographical Regions: United States $ 1,219,208 $ 1,181,461 $ 2,025,719 $ 1,990,962 Canada 77,751 79,119 137,007 131,479 Latin America and the Caribbean 74,895 72,163 140,406 136,879 $ 1,371,854 $ 1,332,743 $ 2,303,132 $ 2,259,320 Major Product Lines: HVAC equipment 69 % 68 % 68 % 67 % Other HVAC products 28 % 28 % 28 % 29 % Commercial refrigeration products 3 % 4 % 4 % 4 % 100 % 100 % 100 % 100 %

EARNINGS PER SHARE (Tables)

EARNINGS PER SHARE (Tables)	6 Months Ended
	Jun. 30, 2019
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 2019 2018 2019 2018 Basic Earnings per Share: Net income attributable to Watsco, Inc. shareholders $ 90,155 $ 89,957 $ 125,192 $ 124,176 Less: distributed and undistributed earnings allocated to non-vested 7,512 7,379 10,355 10,147 Earnings allocated to Watsco, Inc. shareholders $ 82,643 $ 82,578 $ 114,837 $ 114,029 Weighted-average common shares outstanding - Basic 34,435,099 34,309,885 34,411,738 34,282,261 Basic earnings per share for Common and Class B common stock $ 2.40 $ 2.41 $ 3.34 $ 3.33 Allocation of earnings for Basic: Common stock $ 76,456 $ 76,321 $ 106,234 $ 105,383 Class B common stock 6,187 6,257 8,603 8,646 $ 82,643 $ 82,578 $ 114,837 $ 114,029 Diluted Earnings per Share: Net income attributable to Watsco, Inc. shareholders $ 90,155 $ 89,957 $ 125,192 $ 124,176 Less: distributed and undistributed earnings allocated to non-vested 7,511 7,374 10,354 10,144 Earnings allocated to Watsco, Inc. shareholders $ 82,644 $ 82,583 $ 114,838 $ 114,032 Weighted-average common shares outstanding - Basic 34,435,099 34,309,885 34,411,738 34,282,261 Effect of dilutive stock options 27,861 69,310 21,210 67,554 Weighted-average common shares outstanding - Diluted 34,462,960 34,379,195 34,432,948 34,349,815 Diluted earnings per share for Common and Class B common stock $ 2.40 $ 2.40 $ 3.34 $ 3.32 Anti-dilutive stock options not included above 174,457 40,797 213,270 24,044

OTHER COMPREHENSIVE INCOME (L_2

OTHER COMPREHENSIVE INCOME (LOSS) (Tables)	6 Months Ended
	Jun. 30, 2019
Schedule of Tax Effects Allocated to Each Component of Other Comprehensive Income (Loss)	The tax effects allocated to each component of other comprehensive income (loss) were as follows: Quarter Ended Six Months Ended 2019 2018 2019 2018 Foreign currency translation adjustment $ 5,297 $ (5,046 ) $ 10,302 $ (11,691 ) Unrealized (loss) on cash flow hedging instruments (709 ) 520 (1,444 ) 727 Income tax (expense) 192 (140 ) 391 (196 ) Unrealized (loss) gain on cash flow hedging instruments, net of tax (517 ) 380 (1,053 ) 531 Reclassification of (gain) on cash flow hedging instruments into earnings (176 ) 144 (551 ) 1,175 Income tax expense (benefit) 48 (39 ) 149 (317 ) Reclassification of (gain) on cash flow hedging instruments into earnings, net of (128 ) 105 (402 ) 858 Other comprehensive (loss) $ 4,652 $ (4,561 ) $ 8,847 $ (10,302 )
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, 2019 2018 Foreign currency translation adjustment: Beginning balance $ (46,604 ) $ (33,499 ) Current period other comprehensive (loss) 6,695 (7,373 ) Ending balance (39,909 ) (40,872 ) Cash flow hedging instruments: Beginning balance 636 (421 ) Current period other comprehensive (loss) income (631 ) 319 Reclassification adjustment (242 ) 515 Ending balance (237 ) 413 Equity securities: Beginning balance — (301 ) Cumulative-effect adjustment to retained earnings — 301 Ending balance — — Accumulated other comprehensive loss, net of tax $ (40,146 ) $ (40,459 )

DERIVATIVES (Tables)

DERIVATIVES (Tables)	6 Months Ended
	Jun. 30, 2019
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 2019 2018 2019 2018 (Loss) gain recorded in accumulated other comprehensive loss $ (709 ) $ 520 $ (1,444 ) $ 727 (Gain) loss reclassified from accumulated other comprehensive loss into earnings $ (176 ) $ 144 $ (551 ) $ 1,175
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 10. Asset Derivatives Liability Derivatives June 30, 2019 December 31, 2018 June 30, 2019 December 31, 2018 Derivatives designated as hedging instruments $ 11 $ 1,262 $ 851 $ 3 Derivatives not designated as hedging — 58 164 11 Total derivative instruments $ 11 $ 1,320 $ 1,015 $ 14

FAIR VALUE MEASUREMENTS (Tables

FAIR VALUE MEASUREMENTS (Tables)	6 Months Ended
	Jun. 30, 2019
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 $ 11 $ — $ 11 $ — Equity securities Other assets $ 310 $ 310 $ — $ — Liabilities: Derivative financial instruments Accrued expenses and other current liabilities $ 1,015 $ — $ 1,015 $ — Total Fair Value Measurements Balance Sheet Location Level 1 Level 2 Level 3 Assets: Derivative financial instruments Other current assets $ 1,320 $ — $ 1,320 $ — Equity securities Other assets $ 279 $ 279 $ — $ — Liabilities: Derivative financial instruments Accrued expenses and other current liabilities $ 14 $ — $ 14 $ —

Components of Operating Lease E

Components of Operating Lease Expense (Detail) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2019
Lease cost	$ 17,984	$ 35,760
Short-term lease cost	2,433	4,609
Variable lease cost	109	315
Sublease income	(32)	(81)
Total operating lease cost	$ 20,494	$ 40,603

Summary Of Balance Sheet Inform

Summary Of Balance Sheet Information Related To Operating Leases (Detail) $ in Thousands	Jun. 30, 2019USD ($)
Operating Leases
ROU assets	$ 190,530
Current portion of long-term obligations	59,644
Operating lease liabilities	129,636
Total operating lease liabilities	$ 189,280
Weighted Average Remaining Lease Term (in years)
Operating leases	3 years 8 months 12 days
Weighted Average Discount Rate
Operating leases	4.53%

Summary Of Supplemental Cash Fl

Summary Of Supplemental Cash Flow Information Related to Leases (Detail) $ in Thousands	6 Months Ended
	Jun. 30, 2019USD ($)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$ 35,544
Operating leases	$ 222,332

Maturities Of Operating Lease L

Maturities Of Operating Lease Liabilities (Detail) $ in Thousands	Jun. 30, 2019USD ($)
Maturities of Operating Lease Liabilities
Remainder of 2019	$ 35,321
2020	60,667
2021	47,995
2022	33,232
2023	19,039
Thereafter	9,921
Total lease payments	206,175
Less imputed interest	16,895
Total lease liability	$ 189,280

Leases - Additional Information

Leases - Additional Information (Detail) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2019	Dec. 31, 2018
Operating leases not yet commenced	$ 17,000
Lessee, Operating Lease, Renewal Term	5 years
Finance lease right of use assets	$ 2,759
Finance lease liabilities	2,852
Total rental commitments	206,175
2020	60,667
2021	47,995
2022	33,232
2023	19,039
Thereafter	$ 9,921
Non Cancelable Leases [Member]
Total rental commitments		$ 219,300
2019		70,400
2020		55,100
2021		41,300
2022		28,500
2023		15,700
Thereafter		$ 8,300
Maximum [Member]
Operating leases not yet commenced term	11 years
Operating Lease Remaining Lease Term	9 years
Minimum [Member]
Operating leases not yet commenced term	5 years
Operating Lease Remaining Lease Term	1 year

Summary of Disaggregated Revenu

Summary of Disaggregated Revenue (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Disaggregation of Revenue [Line Items]
Revenues from product lines, percentage	100.00%	100.00%	100.00%	100.00%
Revenues	$ 1,371,854	$ 1,332,743	$ 2,303,132	$ 2,259,320
United States
Disaggregation of Revenue [Line Items]
Revenues	1,219,208	1,181,461	2,025,719	1,990,962
Canada
Disaggregation of Revenue [Line Items]
Revenues	77,751	79,119	137,007	131,479
Latin America and Caribbean
Disaggregation of Revenue [Line Items]
Revenues	$ 74,895	$ 72,163	$ 140,406	$ 136,879
HVAC Equipment
Disaggregation of Revenue [Line Items]
Revenues from product lines, percentage	69.00%	68.00%	68.00%	67.00%
Other HVAC Products
Disaggregation of Revenue [Line Items]
Revenues from product lines, percentage	28.00%	28.00%	28.00%	29.00%
Commercial Refrigeration Products
Disaggregation of Revenue [Line Items]
Revenues from product lines, percentage	3.00%	4.00%	4.00%	4.00%

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, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Net income attributable to Watsco, Inc. shareholders	$ 90,155	$ 89,957	$ 125,192	$ 124,176
Less: distributed and undistributed earnings allocated to non-vested restricted common stock - Basic	7,512	7,379	10,355	10,147
Earnings allocated to Watsco, Inc. shareholders - Basic	$ 82,643	$ 82,578	$ 114,837	$ 114,029
Weighted-average common shares outstanding - Basic	34,435,099	34,309,885	34,411,738	34,282,261
Basic earnings per share for Common and Class B common stock	$ 2.40	$ 2.41	$ 3.34	$ 3.33
Net income attributable to Watsco, Inc. shareholders	$ 90,155	$ 89,957	$ 125,192	$ 124,176
Less: distributed and undistributed earnings allocated to non-vested restricted common stock - Diluted	7,511	7,374	10,354	10,144
Earnings allocated to Watsco, Inc. shareholders - Diluted	$ 82,644	$ 82,583	$ 114,838	$ 114,032
Weighted-average common shares outstanding - Basic	34,435,099	34,309,885	34,411,738	34,282,261
Effect of dilutive stock options	27,861	69,310	21,210	67,554
Weighted-average common shares outstanding - Diluted	34,462,960	34,379,195	34,432,948	34,349,815
Diluted earnings per share for Common and Class B common stock	$ 2.40	$ 2.40	$ 3.34	$ 3.32
Anti-dilutive stock options not included above	174,457	40,797	213,270	24,044
Common Stock
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Earnings allocated to Watsco, Inc. shareholders - Basic	$ 76,456	$ 76,321	$ 106,234	$ 105,383
Class B Common Stock
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Earnings allocated to Watsco, Inc. shareholders - Basic	$ 6,187	$ 6,257	$ 8,603	$ 8,646

Earnings Per Share - Additional

Earnings Per Share - Additional Information (Detail) - shares	Jun. 30, 2019	Jun. 30, 2018
Earnings Per Share [Line Items]
Class B common stock conversion, number of shares	2,577,858	2,599,496

Schedule of Tax Effects Allocat

Schedule of Tax Effects Allocated to Each Component of Other Comprehensive Income (Loss) (Detail) - USD ($) $ in Thousands	3 Months Ended				6 Months Ended
	Jun. 30, 2019	Mar. 31, 2019	Jun. 30, 2018	Mar. 31, 2018	Jun. 30, 2019	Jun. 30, 2018
Components Of Other Comprehensive Income Loss [Line Items]
Foreign currency translation adjustment	$ 5,297		$ (5,046)		$ 10,302	$ (11,691)
Unrealized (loss) gain on cash flow hedging instruments	(709)		520		(1,444)	727
Income tax benefit (expense)	192		(140)		391	(196)
Unrealized (loss) gain on cash flow hedging instruments, net of tax	(517)		380		(1,053)	531
Reclassification of (gain) loss on cash flow hedging instruments into earnings	(176)		144		(551)	1,175
Income tax expense (benefit)	48		(39)		149	(317)
Reclassification of (gain) loss on cash flow hedging instruments into earnings, net of tax	(128)		105		(402)	858
Other comprehensive income (loss)	$ 4,652	$ 4,195	$ (4,561)	$ (5,741)	$ 8,847	$ (10,302)

Schedule of Accumulated Other C

Schedule of Accumulated Other Comprehensive Loss (Detail) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance	$ (45,968)
Ending balance	(40,146)	$ (40,459)
Foreign Currency Translation Adjustment
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance	(46,604)	(33,499)
Current period other comprehensive income (loss)	6,695	(7,373)
Ending balance	(39,909)	(40,872)
Cash Flow Hedging Instruments
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance	636	(421)
Current period other comprehensive income (loss)	(631)	319
Reclassification adjustment	(242)	515
Ending balance	$ (237)	413
Equity Securities
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance		(301)
Cumulative-effect adjustment to retained earnings		$ 301

Purchase of Ownership Interes_2

Purchase of Ownership Interest from Joint Venture - Additional Information (Detail) $ in Thousands	6 Months Ended
	Jun. 30, 2019USD ($)Location
Business Acquisition [Line Items]
Cash consideration paid to obtain additional ownership	$ 32,400
Homans Associates II LLC [Member]
Business Acquisition [Line Items]
Additional ownership interest acquired	20.00%
Percentage of ownership interest	100.00%
Cash consideration paid to obtain additional ownership	$ 32,400
Number of locations in which the company operates | Location	16

Investment in Unconsolidated _2

Investment in Unconsolidated Entity - Additional Information (Detail) $ in Thousands	Jul. 05, 2018USD ($)	Apr. 22, 2019USD ($)	Jun. 21, 2017USD ($)Locationboard-member	Jun. 30, 2019USD ($)	Dec. 31, 2018	Jun. 29, 2018
Schedule of Equity Method Investments [Line Items]
Investment in unconsolidated entity				$ 4,940
Proceeds from non-controlling interest for investment in unconsolidated entity				$ 988
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		38.10%	34.90%		36.30%
Investment in unconsolidated entity	$ 3,760	$ 4,940	$ 63,600
Contribution to investment in unconsolidated entity by controlling interest	3,008	3,952	50,880
Proceeds from non-controlling interest for investment in unconsolidated entity	$ 752	$ 988	$ 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		1.80%				1.40%
Russell Sigler Inc | Western United States
Schedule of Equity Method Investments [Line Items]
Number of locations | Location			30
Russell Sigler Inc | Carrier Enterprise I
Schedule of Equity Method Investments [Line Items]
Ownership interest acquired			38.10%

Acquisition - Additional Inform

Acquisition - Additional Information (Detail) - USD ($) $ in Thousands	1 Months Ended	6 Months Ended
	Apr. 02, 2019	Jun. 30, 2019
Business Acquisition [Line Items]
Business combination shares issued		$ 7,450
Dunphey Associates Supply Co [Member]
Business Acquisition [Line Items]
Business combination cash transferred	$ 16,781
Stock issued for acquisition	50,952
Business combination shares issued	$ 7,450

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, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Derivative Instruments, Gain (Loss) [Line Items]
(Loss) gain recorded in accumulated other comprehensive loss	$ (709)	$ 520	$ (1,444)	$ 727
Foreign Currency Forward Contracts | Cash Flow Hedge
Derivative Instruments, Gain (Loss) [Line Items]
(Loss) gain recorded in accumulated other comprehensive loss	(709)	520	(1,444)	727
(Gain) loss reclassified from accumulated other comprehensive loss into earnings	$ (176)	$ 144	$ (551)	$ 1,175

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, 2019	Dec. 31, 2018
Derivatives, Fair Value [Line Items]
Derivative instruments, assets derivatives	$ 11	$ 1,320
Derivative instruments, liabilities derivatives	1,015	14
Derivatives Designated as Hedging Instruments
Derivatives, Fair Value [Line Items]
Derivative instruments, assets derivatives	11	1,262
Derivative instruments, liabilities derivatives	851	3
Not Designated as Hedging Instrument, Economic Hedge [Member]
Derivatives, Fair Value [Line Items]
Derivative instruments, assets derivatives		58
Derivative instruments, liabilities derivatives	$ 164	$ 11

Derivatives - Additional Inform

Derivatives - Additional Information (Detail) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Foreign Currency Forward Contracts | Cash Flow Hedge
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Notional value of derivatives	$ 43,900,000		$ 43,900,000
Contract maturity period			one year or less
Contract expiring terms			2020-03
Maximum length of time hedged in cash flow hedge			12 months
Pre-tax gain to be reclassified into earnings within the next 12 months	545,000		$ 545,000
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	15,160,000		$ 15,160,000
Contract expiring terms			2019-08
(Loss) gain from foreign currency forward and option contracts not designated as hedging instruments	$ (190,000)	$ 180,000	$ 303,000	$ 191,000

Assets and Liabilities Carried

Assets and Liabilities Carried at Fair Value Measured on Recurring Basis (Detail) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Other Current Assets
Assets:
Derivative financial instruments	$ 11	$ 1,320
Other assets
Assets:
Equity securities	310	279
Accrued expenses and other current liabilities
Liabilities:
Derivative financial instruments	1,015	14
Fair Value Measurements, Level 1 | Other assets
Assets:
Equity securities	310	279
Fair Value Measurements, Level 2 | Other Current Assets
Assets:
Derivative financial instruments	11	1,320
Fair Value Measurements, Level 2 | Accrued expenses and other current liabilities
Liabilities:
Derivative financial instruments	$ 1,015	$ 14

Shareholders' Equity - Addition

Shareholders' Equity - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018
Stockholders Equity Note [Line Items]
Shares withheld as payment for tax withholdings related to share based compensation, market value			$ 983	$ 2,213
Common and Class B Common Stock | Non-Vested Restricted Stock
Stockholders Equity Note [Line Items]
Shares withheld as payment for tax withholdings related to share based compensation, market value	$ 555	$ 2,213	$ 983	$ 2,213
Shares withheld as payment for tax withholdings related to share based compensation, shares	3,608	12,924	6,593	12,924
Common Stock | Stock Option
Stockholders Equity Note [Line Items]
Net proceeds from the sale of Common stock	$ 1,526	$ 1,369	$ 2,243	$ 3,981
Shares withheld as payment for tax withholdings related to share based compensation, market value		$ 286		$ 1,200
Shares withheld as payment for tax withholdings related to share based compensation, shares		1,610		6,651
Common Stock | Employee Stock Purchase Plan [Member]
Stockholders Equity Note [Line Items]
Net proceeds from shares purchased under ESPP	$ 423	$ 414	$ 833	$ 760
Common Stock | Class B Common Stock
Stockholders Equity Note [Line Items]
Cash dividends paid per share of Common and Class B common stock	$ 1.60	$ 1.45	$ 3.20	$ 2.70

Commitments and Contingencies -

Commitments and Contingencies - Additional Information (Detail) - USD ($) $ in Thousands	Jun. 30, 2019	Dec. 31, 2018
Commitments and Contingencies Disclosure [Line Items]
Self-insurance reserves	$ 3,383	$ 2,311

Related Party Transactions - Ad

Related Party Transactions - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Jun. 30, 2019	Jun. 30, 2018	Dec. 31, 2018
Moss & Associates LLC | Customary Payments for Remodeling of Corporate Headquarters
Related Party Transaction [Line Items]
Payment for related party transaction		$ 71		$ 124
Greenberg Traurig, P.A. | Customary Fees for Legal Services
Related Party Transaction [Line Items]
Payment for related party transaction	$ 0	14	$ 0	18
Amount payable to related party	0		0
Carrier and Its Affiliates | Supplier Concentration Risk
Related Party Transaction [Line Items]
Amount payable to Carrier and its affiliates, net of receivables	122,000		122,000		$ 71,000
Revenues from sales to Carrier and its affiliates	$ 23,000	$ 21,000	$ 44,000	$ 37,000
Carrier and Its Affiliates | Supplier Concentration Risk | Cost of Goods, Total
Related Party Transaction [Line Items]
Percentage of purchases from key suppliers	63.00%	64.00%	62.00%	63.00%

Subsequent Event - Additional I

Subsequent Event - Additional Information (Detail)	Aug. 01, 2019USD ($)Locationshares	Jun. 30, 2019USD ($)
Subsequent Event [Line Items]
Proceeds from non-controlling interest for Business Acquisition		$ 988,000
Fair value of equity shares issued or issuable		$ 7,450,000
Subsequent Event | Carrier Enterprise I [Member]
Subsequent Event [Line Items]
Proceeds from non-controlling interest for Business Acquisition	$ 17,000
Subsequent Event | Pierce Phelps PPI [Member]
Subsequent Event [Line Items]
Number of locations in which the company operates | Location	19
Number of shares issuable | shares	372,543
Fair value of equity shares issued or issuable	$ 58,638
Cash consideration	10,000
Business combination recognized identifiable assets acquired and liabilities assumed net	$ 85,000