Selling, general and administrative expenses

$ 3,743,330

^[1]

$ 3,431,712

^[1]

$ 2,977,759

Cost of sales

2,844,077

2,617,317

2,249,465

Gross profit

899,253

814,395

728,294

628,044

589,487

529,244

Operating income

271,209

224,908

199,050

Interest expense, net

5,830

4,665

4,458

Income before income taxes

265,379

220,243

194,592

Income taxes

77,660

62,642

56,850

Net income

187,719

157,601

137,742

Less: net income attributable to noncontrolling interest

59,996

54,267

47,292

Net income attributable to Watsco, Inc.

$ 127,723

$ 103,334

$ 90,450

Earnings per share for Common and Class B common stock:

Basic

$ 3.69

^[2]

$ 2.70

^[2],[3]

$ 2.75

Diluted

$ 3.68

^[2]

$ 2.70

^[2],[3]

$ 2.74

[1]	Sales of residential central air conditioners, heating equipment and parts and supplies are seasonal. Demand related to the residential central air conditioning replacement market is typically highest in the second and third quarters and demand for heating equipment is usually highest in the fourth quarter. Demand related to the new construction sectors throughout most of the markets is fairly consistent during the year, except for dependence on housing completions and related weather and economic conditions.
[2]	Quarterly and year-to-date earnings per share are calculated on an individual basis; therefore, the sum of earnings per share amounts for the quarters may not equal earnings per share amounts for the year.
[3]	On October 31, 2012, we paid a special dividend of $5.00 per share of Common and Class B common stock that resulted in a $0.37 per share and $0.33 per share reduction in diluted earnings per share for the quarter and year ended December 31, 2012, respectively.

Consolidated Statements of Comprehensive Income (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Net income	$ 187,719	$ 157,601	$ 137,742
Other comprehensive (loss) income, net of tax
Foreign currency translation adjustment	(16,365)	(3,191)
Unrealized gain on available-for-sale securities arising during the period	24	35	3
Unrealized gain on derivative instrument arising during the period			238
Other comprehensive (loss) income	(16,341)	(3,156)	241
Comprehensive income	171,378	154,445	137,983
Less: comprehensive income attributable to noncontrolling interest	53,027	52,861	47,292
Comprehensive income attributable to Watsco, Inc.	$ 118,351	$ 101,584	$ 90,691

Summary of Significant Accounting Policies

Amount after tax of increase (decrease) in accumulated gain (loss) from derivative instruments designated and qualifying as the effective portion of cash flow hedges and an entity's share of an equity investee's increase (decrease) in deferred hedging gain (loss).

+ References+ Details

Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Current assets:
Cash and cash equivalents	$ 19,478	$ 73,770
Accounts receivable, net	399,565	377,655
Inventories	583,154	546,083
Other current assets	18,905	17,943
Total current assets	1,021,102	1,015,451
Property and equipment, net	45,418	42,842
Goodwill	392,610	397,262
Intangible assets, net	203,843	219,501
Other assets	6,558	6,999
Assets, Total	1,669,531	1,682,055
Current liabilities:
Current portion of other long-term obligations	107	4
Accounts payable	141,104	184,957
Accrued expenses and other current liabilities	102,295	97,397
Total current liabilities	243,506	282,358
Long-term obligations:
Borrowings under revolving credit agreement	230,044	316,182
Other long-term obligations, net of current portion	513	14
Total long-term obligations	230,557	316,196
Deferred income taxes and other liabilities	68,076	61,461
Commitments and contingencies
Watsco, Inc. shareholders' equity:
Preferred stock, $0.50 par value, 10,000,000 shares authorized; no shares issued
Paid-in capital	606,384	592,820
Accumulated other comprehensive loss, net of tax	(11,474)	(2,102)
Retained earnings	339,362	251,475
Treasury stock, at cost, 6,322,650 shares of Common stock and 48,263 shares of Class B common stock at both December 31, 2013 and 2012	(114,425)	(114,425)
Total Watsco, Inc. shareholders' equity	840,396	748,214
Noncontrolling interest	286,996	273,826
Total shareholders' equity	1,127,392	1,022,040
Total liabilities and shareholders' equity	1,669,531	1,682,055
Common Stock
Watsco, Inc. shareholders' equity:
Common stock, $0.50 par value	18,182	18,131
Class B Common Stock
Watsco, Inc. shareholders' equity:
Common stock, $0.50 par value	$ 2,367	$ 2,315

Consolidated Balance Sheets (Parenthetical) (USD $)	Dec. 31, 2013	Dec. 31, 2012
Preferred stock, par value	$ 0.50	$ 0.50
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares issued	0	0
Common Stock
Common stock, par value	$ 0.50	$ 0.50
Common stock, shares authorized	60,000,000	60,000,000
Common stock, shares outstanding	36,364,297	36,262,023
Treasury stock, shares	6,322,650	6,322,650
Class B Common Stock
Common stock, par value	$ 0.50	$ 0.50
Common stock, shares authorized	10,000,000	10,000,000
Common stock, shares outstanding	4,733,737	4,630,200
Treasury stock, shares	48,263	48,263

Consolidated Statements of Shareholders' Equity (USD $) In Thousands, except Share data	Total	Common Stock, Class B Common Stock and Preferred Stock	Paid-In Capital	Accumulated Other Comprehensive Loss	Retained Earnings	Treasury Stock	Noncontrolling Interest
Beginning balance at Dec. 31, 2010	$ 928,896	$ 19,410	$ 472,883	$ (593)	$ 387,186	$ (114,425)	$ 164,435
Beginning balance (in shares) at Dec. 31, 2010		32,449,425
Net income	137,742				90,450		47,292
Other comprehensive income (loss)	241			241
Issuances of non-vested (restricted) shares of common stock (in shares)		429,602
Issuances of non-vested (restricted) shares of common stock		215	(215)
Forfeitures of non-vested (restricted) shares of common stock (in shares)		(30,500)
Forfeitures of non-vested (restricted) shares of common stock		(15)	15
Common stock contribution to 401(k) plan (in shares)		27,240
Common stock contribution to 401(k) plan	1,718	14	1,704
Stock issuances from exercise of stock options and employee stock purchase plan (in shares)		139,717
Stock issuances from exercise of stock options and employee stock purchase plan	5,553	69	5,484
Retirement of common stock (in shares)		(10,143)
Retirement of common stock	(617)	(5)	(612)
Share-based compensation	6,340		6,340
Excess tax benefit from share-based compensation	859		859
Cash dividends declared and paid on Common and Class B common stock	(73,276)				(73,276)
Return of capital contribution to noncontrolling interest	(32,000)						(32,000)
Fair value of noncontrolling interest	34,919						34,919
Share of carrying value of our locations contributed to joint venture	7,708						7,708
Fair value increment over carrying value of locations contributed to joint venture	7,061		7,061
Distributions to noncontrolling interest	(23,434)						(23,434)
Ending balance at Dec. 31, 2011	1,001,710	19,688	493,519	(352)	404,360	(114,425)	198,920
Ending balance (in shares) at Dec. 31, 2011		33,005,341
Net income	157,601				103,334		54,267
Other comprehensive income (loss)	(3,156)			(1,750)			(1,406)
Issuances of non-vested (restricted) shares of common stock (in shares)		111,301
Issuances of non-vested (restricted) shares of common stock		56	(56)
Common stock contribution to 401(k) plan (in shares)		26,991
Common stock contribution to 401(k) plan	1,772	13	1,759
Stock issuances from exercise of stock options and employee stock purchase plan (in shares)		157,664
Stock issuances from exercise of stock options and employee stock purchase plan	7,163	79	7,084
Retirement of common stock (in shares)		(29,987)
Retirement of common stock	(2,229)	(15)	(2,214)
Share-based compensation	7,716		7,716
Excess tax benefit from share-based compensation	1,079		1,079
Cash dividends declared and paid on Common and Class B common stock	(256,219)				(256,219)
Common stock issued for Carrier Enterprise III (in shares)		1,250,000
Common stock issued for Carrier Enterprise III	93,250	625	92,625
Fair value of noncontrolling interest in Carrier Enterprise III	104,244						104,244
Decrease in noncontrolling interest in Carrier Enterprise I	(51,881)		(8,692)				(43,189)
Distributions to noncontrolling interest	(39,010)						(39,010)
Ending balance at Dec. 31, 2012	1,022,040	20,446	592,820	(2,102)	251,475	(114,425)	273,826
Ending balance (in shares) at Dec. 31, 2012		34,521,310
Net income	187,719				127,723		59,996
Other comprehensive income (loss)	(16,341)			(9,372)			(6,969)
Issuances of non-vested (restricted) shares of common stock (in shares)		124,043
Issuances of non-vested (restricted) shares of common stock		62	(62)
Forfeitures of non-vested (restricted) shares of common stock (in shares)		(10,000)
Forfeitures of non-vested (restricted) shares of common stock		(5)	5
Common stock contribution to 401(k) plan (in shares)		22,551
Common stock contribution to 401(k) plan	1,689	11	1,678
Stock issuances from exercise of stock options and employee stock purchase plan (in shares)		87,193
Stock issuances from exercise of stock options and employee stock purchase plan	3,384	44	3,340
Retirement of common stock (in shares)		(17,976)
Retirement of common stock	(1,677)	(9)	(1,668)
Share-based compensation	8,760		8,760
Excess tax benefit from share-based compensation	1,511		1,511
Cash dividends declared and paid on Common and Class B common stock	(39,836)				(39,836)
Distributions to noncontrolling interest	(39,857)						(39,857)
Ending balance at Dec. 31, 2013	$ 1,127,392	$ 20,549	$ 606,384	$ (11,474)	$ 339,362	$ (114,425)	$ 286,996
Ending balance (in shares) at Dec. 31, 2013		34,727,121

Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Cash flows from operating activities:
Net income	$ 187,719	$ 157,601	$ 137,742
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	17,706	15,911	11,725
Share-based compensation	9,967	7,939	6,663
Deferred income tax provision	8,589	6,724	8,310
Provision for doubtful accounts	961	1,826	2,374
Non-cash contribution for 401(k) plan	1,689	1,772	1,718
(Gain) loss on sale of property and equipment	(156)	103	171
Excess tax benefits from share-based compensation	(1,511)	(1,079)	(859)
Changes in operating assets and liabilities, net of effects of acquisitions:
Accounts receivable	(25,846)	(5,752)	11,987
Inventories	(40,575)	(26,652)	(22,489)
Accounts payable and other liabilities	(7,256)	11,873	(98,611)
Other, net	(1,018)	3,077	2,721
Net cash provided by operating activities	150,269	173,343	61,452
Cash flows from investing activities:
Capital expenditures	(14,580)	(12,317)	(13,925)
Proceeds from sale of property and equipment	323	504	737
Business acquisitions, net of cash acquired		(80,479)	(43,455)
Net cash used in investing activities	(14,257)	(92,292)	(56,643)
Cash flows from financing activities:
Distributions to noncontrolling interest	(69,494)	(16,003)	(26,469)
Dividends on Common and Class B common stock	(39,836)	(256,219)	(73,276)
Payment of fees related to revolving credit agreement	(458)	(2,116)	(38)
Purchase of additional ownership from noncontrolling interest		(51,881)
Return of capital contribution to noncontrolling interest			(32,000)
Net proceeds from (repayments of) other long-term obligations	602	(1)	(69)
Excess tax benefits from share-based compensation	1,511	1,079	859
Net proceeds from issuances of common stock	2,185	5,312	5,359
Net cash used in financing activities	(189,049)	(23,081)	(115,634)
Effect of foreign exchange rate changes on cash and cash equivalents	(1,255)	127
Net (decrease) increase in cash and cash equivalents	(54,292)	58,097	(110,825)
Cash and cash equivalents at beginning of year	73,770	15,673	126,498
Cash and cash equivalents at end of year	19,478	73,770	15,673
Previous Revolving Credit Facility
Cash flows from financing activities:
Net (repayments) proceeds under revolving credit agreement		(20,000)	10,000
Current Revolving Credit Facility
Cash flows from financing activities:
Net (repayments) proceeds under revolving credit agreement	$ (83,559)	$ 316,748

Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2013

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations

Watsco, Inc. and its subsidiaries (collectively, “Watsco,” which may be referred to as “we”, “us” or “our”) was incorporated in Florida in 1956 and is the largest distributor of air conditioning, heating and refrigeration equipment and related parts and supplies (“HVAC/R”) in the HVAC/R distribution industry. At December 31, 2013, we operated from 569 locations in 38 U.S. states, Canada, Mexico and Puerto Rico with additional market coverage on an export basis to Latin America and the Caribbean.

Basis of Consolidation

The consolidated financial statements include the accounts of Watsco and all of its wholly owned subsidiaries and include the accounts of three joint ventures with Carrier Corporation (“Carrier”), in each of which Watsco maintains a controlling interest. All significant intercompany balances and transactions have been eliminated in consolidation.

Reclassifications

Certain reclassifications of prior year amounts have been made to conform to the 2013 presentation. These reclassifications had no effect on net income or earnings per share as previously reported.

Foreign Currency Translation and Transactions

Our operations in Mexico consider their functional currency to be the U.S. dollar because the majority of their transactions are denominated in U.S. dollars. Gains or losses resulting from transactions denominated in Mexican pesos are recognized in earnings within selling, general and administrative expenses in our consolidated statements of income.

The functional currency of our operations in Canada is the Canadian dollar. Foreign currency denominated assets and liabilities are translated into U.S. dollars at the exchange rates in effect at the balance sheet date, and income and expense items are translated at the average exchange rates in effect during the applicable period. The aggregate effect of foreign currency translation is recorded in accumulated other comprehensive loss in our consolidated balance sheets. Our net investment in our Canadian operations is recorded at the historical rate and the resulting foreign currency translation adjustments are included in accumulated other comprehensive loss in our consolidated balance sheets. Gains or losses resulting from transactions denominated in U.S. dollars are recognized in earnings within selling, general and administrative expenses in our consolidated statements of income.

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses for the reporting period. Significant estimates include valuation reserves for accounts receivable, inventories and income taxes, reserves related to self-insurance programs and the valuation of goodwill and indefinite lived intangible assets. While we believe that these estimates are reasonable, actual results could differ from such estimates.

Cash Equivalents

All highly liquid instruments purchased with original maturities of three months or less are considered to be cash equivalents.

Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable primarily consist of trade receivables due from customers and are stated at the invoiced amount less an allowance for doubtful accounts. An allowance for doubtful accounts is maintained for estimated losses resulting from the inability of customers to make required payments. When preparing these estimates, we consider a number of factors, including the aging of a customer’s account, past transactions with customers, creditworthiness of specific customers, historical trends and other information. Upon determination that an account is uncollectible, the receivable balance is written off. At December 31, 2013 and 2012, the allowance for doubtful accounts totaled $5,737 and $10,473, respectively.

Inventories

Inventories consist of air conditioning, heating and refrigeration equipment and related parts and supplies and are valued at the lower of cost or market using a weighted-average cost basis and the first-in, first-out methods. As part of the valuation process, inventories are adjusted to reflect excess, slow-moving and damaged inventories at their estimated net realizable value. Inventory policies are reviewed periodically, reflecting current risks, trends and changes in industry conditions. A reserve for estimated inventory shrinkage is also maintained to consider inventory shortages determined from cycle counts and physical inventories.

Vendor Rebates

We have arrangements with several vendors that provide rebates payable to us when we achieve any of a number of measures, generally related to the volume level of purchases. We account for such rebates as a reduction of inventory until we sell the product, at which time such rebates are reflected as a reduction of cost of sales in our consolidated statements of income. Throughout the year, we estimate the amount of the rebate based on our estimate of purchases to date relative to the purchase levels that mark our progress toward earning the rebates. We continually revise our estimates of earned vendor rebates based on actual purchase levels. At December 31, 2013 and 2012, we had $9,333 and $8,015, respectively, of rebates recorded as a reduction of inventory. Substantially all vendor rebate receivables are collected within three months immediately following the end of the year.

Marketable Securities

Investments in marketable equity securities are classified as available-for-sale and are included in other assets in our consolidated balance sheets. These equity securities are recorded at fair value using the specific identification method with unrealized holding losses, net of deferred taxes, included in accumulated other comprehensive loss within shareholders’ equity. Dividend and interest income are recognized in the statements of income when earned.

Property and Equipment

Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization of property and equipment is computed using the straight-line method. Buildings and improvements are depreciated or amortized over estimated useful lives ranging from 3-40 years. Leasehold improvements are amortized over the shorter of the respective lease terms or estimated useful lives. Estimated useful lives for other depreciable assets range from 3-10 years.

Goodwill and Other Intangible Assets

Goodwill is recorded when the purchase price paid for an acquisition exceeds the fair value of the net identified tangible and intangible assets acquired. We evaluate goodwill for impairment annually or more frequently when an event occurs or circumstances change that indicate that the carrying value may not be recoverable. We test goodwill for impairment by first comparing the fair value of our reporting unit to its carrying value. If the fair value is determined to be less than the carrying value, a second step is performed to measure the amount of impairment loss.

Other intangible assets primarily consist of the value of trade names and trademarks, distributor agreements, customer relationships and non-compete agreements. Indefinite lived intangibles not subject to amortization are assessed for impairment at least annually, or more frequently if events or changes in circumstances indicate they may be impaired, by comparing the fair value of the intangible asset to its carrying amount to determine if a write-down to fair value is required. Finite lived intangible assets are amortized using the straight-line method over their respective estimated useful lives.

We perform our annual impairment tests each year and have determined there to be no impairment for any of the periods presented. There were no events or circumstances identified from the date of our assessment that would require an update to our annual impairment tests.

Long-Lived Assets

Long-lived assets, other than goodwill, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. Recoverability is evaluated by determining whether the amortization of the balance over its remaining life can be recovered through undiscounted future operating cash flows. We measure the impairment loss based on projected discounted cash flows using a discount rate reflecting the average cost of funds and compared to the asset’s carrying value. As of December 31, 2013, there were no such events or circumstances.

Fair Value Measurements

We carry various assets and liabilities at fair value in the consolidated balance sheets. Fair value is defined as the price that would be received for an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. Fair value measurements are classified based on the following fair value hierarchy:


Level 1		Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

Level 2		Observable inputs other than Level 1 prices such as quoted prices in active markets for similar assets or liabilities; quoted prices in markets that are not active; or model-driven valuations or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3		Unobservable inputs for the asset or liability. These inputs reflect our own assumptions about the assumptions a market participant would use in pricing the asset or liability.

Revenue Recognition

Revenue primarily consists of sales of air conditioning, heating and refrigeration equipment and related parts and supplies and is recorded when shipment of products or delivery of services has occurred. Substantially all customer returns relate to products that are returned under warranty obligations underwritten by manufacturers, effectively mitigating our risk of loss for customer returns. Taxes collected from our customers and remitted to governmental authorities are presented in our consolidated statements of income on a net basis.

Advertising Costs

Advertising costs are expensed as incurred. Advertising expense for the years ended December 31, 2013, 2012 and 2011, was $22,418, $23,730 and $25,052, respectively.

Shipping and Handling

Shipping and handling costs associated with inbound freight are capitalized to inventories and relieved through cost of sales as inventories are sold. Shipping and handling costs associated with the delivery of products is included in selling, general and administrative expenses. Shipping and handling costs for the years ended December 31, 2013, 2012 and 2011, was $39,395, $37,676 and $30,234, respectively.

Share-Based Compensation

The fair value of stock option and non-vested (restricted) stock awards are expensed on a straight-line basis over the vesting period of the awards. Share-based compensation expense is included in selling, general and administrative expenses in our consolidated statements of income. Cash flows from the tax benefits resulting from tax deductions in excess of the compensation expense recognized for those options (windfall tax benefits) are classified as financing cash flows. Tax benefits resulting from tax deductions in excess of share-based compensation expense recognized are credited to paid-in capital in the consolidated balance sheets.

Income Taxes

We record United States federal, state and foreign income taxes currently payable, as well as deferred taxes due to temporary differences between reporting income and expenses for financial statement purposes versus tax purposes. Deferred tax assets and liabilities reflect the temporary differences between the financial statement and income tax basis of assets and liabilities. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in tax rates is recognized as income or expense in the period that includes the enactment date. We and our eligible subsidiaries file a consolidated United States federal income tax return. As income tax returns are generally not filed until well after the closing process for the December 31 financial statements is complete, the amounts recorded at December 31 reflect estimates of what the final amounts will be when the actual income tax returns are filed for that calendar year. In addition, estimates are often required with respect to, among other things, the appropriate state income tax rates to use in the various states that we and our subsidiaries are required to file, the potential utilization of operating loss carryforwards and valuation allowances required, if any, for tax assets that may not be realizable in the future.

We recognize the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the “more-likely-than-not” threshold, the amount recognized in the financial statements is the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the relevant tax authority.

Earnings per Share

We compute earnings per share using the two-class method. The two-class method of computing earnings per share is an earnings allocation formula that determines earnings per share for common stock and any participating securities according to dividends declared (whether paid or unpaid) and participation rights in undistributed earnings. Shares of our non-vested (restricted) stock are considered participating securities because these awards contain a non-forfeitable right to dividends irrespective of whether the awards ultimately vest. Under the two-class method, earnings per common share for our Common and Class B common stock is computed by dividing the sum of distributed earnings to common shareholders and undistributed earnings allocated to common shareholders by the weighted-average number of shares of Common and Class B common stock outstanding for the period. In applying the two-class method, undistributed earnings are allocated to Common stock, Class B common stock and participating securities based on the weighted-average shares outstanding during the period.

Diluted earnings per share reflects the dilutive effect of potential common shares from stock options. The dilutive effect of outstanding stock options is computed using the treasury stock method, which assumes any proceeds that could be obtained upon the exercise of stock options, would be used to purchase common stock at the average market price for the period. The assumed proceeds include the purchase price the optionee pays, the windfall tax benefit that we receive upon assumed exercise and the unrecognized compensation expense at the end of each period.

Derivative Instruments

All derivatives, whether designated in hedging relationships or not, are required to be recorded on the balance sheet at fair value. If the derivative is designated as a fair value hedge, the changes in the fair value of the derivative and of the hedged item attributable to the hedged risk are recognized in earnings. If the derivative is designated as a cash flow hedge, the effective portions of changes in the fair value of the derivative are recorded in other comprehensive income and are recognized in the income statement when the hedged item affects earnings. Ineffective portions of changes in the fair value of cash flow hedges are recognized in earnings. See Note 12, under the caption “Derivative Financial Instruments.”

New Accounting Pronouncements

Reporting Amounts Reclassified Out of Accumulated Other Comprehensive Income

On January 1, 2013 we adopted guidance issued by the Financial Accounting Standards Board (“FASB”) that requires disclosure for amounts reclassified out of accumulated other comprehensive income by the respective line items of net income if the amount reclassified is required to be reclassified to net income in its entirety in the reporting period. For amounts that are not required to be reclassified in their entirety to net income, a cross-reference to other disclosures that provide additional detail about those amounts is required. The adoption of this guidance did not have an impact on our consolidated financial statements.

Presentation of Unrecognized Tax Benefits

In July 2013, the FASB issued guidance that requires the presentation of an unrecognized tax benefit as a reduction to a deferred tax asset for a net operating loss carryforward rather than as a liability when the uncertain tax position would reduce the net operating loss under the tax law of the applicable jurisdiction and the entity intends to use the deferred tax asset for that purpose. This guidance is effective prospectively for interim and annual reporting periods beginning after December 15, 2013. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements.

The entire disclosure for all significant accounting policies of the reporting entity.

+ References+ Details

Earnings Per Share

12 Months Ended

Dec. 31, 2013

Earnings Per Share

2. EARNINGS PER SHARE

The following table presents the calculation of basic and diluted earnings per common share for our Common and Class B common stock:


*Years Ended December 31,*	2013		2012		2011
Basic Earnings per Share:
Net income attributable to Watsco, Inc. shareholders	$	127,723	$	103,334	$	90,450
Less: distributed and undistributed earnings allocated to non-vested (restricted) common stock		9,064		17,656		6,045

Earnings allocated to Watsco, Inc. shareholders	$	118,659	$	85,678	$	84,405

Weighted-average common shares outstanding - Basic		32,195,598		31,680,187		30,678,206

Basic earnings per share for Common and Class B common stock	$	3.69	$	2.70	$	2.75

Allocation of earnings for Basic:
Common stock	$	108,690	$	78,359	$	76,574
Class B common stock		9,969		7,319		7,831

	$	118,659	$	85,678	$	84,405

Diluted Earnings per Share:
Net income attributable to Watsco, Inc. shareholders	$	127,723	$	103,334	$	90,450
Less: distributed and undistributed earnings allocated to non-vested (restricted) common stock		9,053		17,656		6,042

Earnings allocated to Watsco, Inc. shareholders	$	118,670	$	85,678	$	84,408

Weighted-average common shares outstanding - Basic		32,195,598		31,680,187		30,678,206
Effect of dilutive stock options		62,470		64,212		75,085

Weighted-average common shares outstanding - Diluted		32,258,068		31,744,399		30,753,291

Diluted earnings per share for Common and Class B common stock	$	3.68	$	2.70	$	2.74

Diluted earnings per share for our Common stock assumes the conversion of all of our Class B common stock into Common stock as of the beginning of the fiscal year, therefore, no allocation of earnings to Class B common stock is required. At December 31, 2013, 2012 and 2011, our outstanding Class B common stock was convertible into 2,704,832, 2,706,338 and 2,846,334 shares of our Common stock, respectively.

Diluted earnings per share excluded 1,066, 17,492 and 33,511 shares for the years ended December 31, 2013, 2012 and 2011, respectively, related to stock options with an exercise price per share greater than the average market value, resulting in an anti-dilutive effect on diluted earnings per share.

Other Comprehensive (Loss) Income

The entire disclosure for earnings per share.

+ References+ Details

Other Comprehensive (Loss) Income

12 Months Ended

Dec. 31, 2013

3. OTHER COMPREHENSIVE (LOSS) INCOME

Other comprehensive (loss) income consists of the foreign currency translation adjustment associated with our Canadian operations’ use of the Canadian dollar as their functional currency, changes in the unrealized gain on available-for-sale securities and the effective portion of a cash flow hedge that matured in October 2011. The tax effects allocated to each component of other comprehensive (loss) income are as follows:


*Years Ended December 31,*	2013			2012			2011
Foreign currency translation adjustment	$	(16,365	)	$	(3,191	)	$	—
Unrealized gain on available-for-sale securities		39			63			6
Income tax expense		(15	)		(28	)		(3	)

Unrealized gain on available-for-sale securities, net of tax		24			35			3

Unrealized gain on derivative instrument		—			—			384
Income tax expense		—			—			(146	)

Unrealized gain on derivative instrument, net of tax		—			—			238

Other comprehensive (loss) income	$	(16,341	)	$	(3,156	)	$	241

The changes in accumulated other comprehensive loss, net of tax, are as follows:


*Years Ended December 31,*	2013			2012			2011
Foreign currency translation adjustment:
Beginning balance	$	(1,785	)	$	—		$	—
Current period other comprehensive loss		(9,396	)		(1,785	)		—

Ending balance		(11,181	)		(1,785	)		—

Available-for-sale securities:
Beginning balance		(317	)		(352	)		(355	)
Current period other comprehensive income		24			35			3

Ending balance		(293	)		(317	)		(352	)

Derivative instrument:
Beginning balance		—			—			(238	)
Current period other comprehensive income		—			—			238

Ending balance		—			—			—

Accumulated other comprehensive loss, net of tax	$	(11,474	)	$	(2,102	)	$	(352	)

The entire disclosure for comprehensive income, which includes, but is not limited to, 1) the amount of income tax expense or benefit allocated to each component of other comprehensive income, including reclassification adjustments, 2) the reclassification adjustments for each classification of other comprehensive income and 3) the ending accumulated balances for each component of comprehensive income.

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+ Details

Supplier Concentration

12 Months Ended

Dec. 31, 2013

Supplier Concentration

4. SUPPLIER CONCENTRATION

We have four key suppliers of HVAC/R equipment products. Purchases from these four suppliers comprised 73%, 72% and 71% of all purchases made in 2013, 2012 and 2011, respectively. Our largest supplier, Carrier and its affiliates, accounted for 59%, 57% and 54% of all purchases made in 2013, 2012 and 2011, respectively. See Note 15. Any significant interruption by Carrier or the other key suppliers in the delivery of products could impair our ability to maintain current inventory levels or a termination of a distribution agreement could disrupt the operations of certain subsidiaries and could materially impact our consolidated results of operations and consolidated financial position.

The entire disclosure for any concentrations existing at the date of the financial statements that make an entity vulnerable to a reasonably possible, near-term, severe impact. This disclosure informs financial statement users about the general nature of the risk associated with the concentration, and may indicate the percentage of concentration risk as of the balance sheet date.

+ References+ Details

Property and Equipment

12 Months Ended

Dec. 31, 2013

Property and Equipment

5. PROPERTY AND EQUIPMENT

Property and equipment, net, consists of:


*December 31,*	2013			2012
Land	$	1,131		$	1,131
Buildings and improvements		49,942			48,457
Machinery, vehicles and equipment		64,012			57,130
Furniture and fixtures		20,523			18,251

		135,608			124,969
Accumulated depreciation and amortization		(90,190	)		(82,127	)

	$	45,418		$	42,842

Depreciation and amortization expense related to property and equipment included in selling, general and administrative expenses for the years ended December 31, 2013, 2012 and 2011, was $11,677, $10,986 and $9,364, respectively.

The entire disclosure for long-lived, physical assets used in the normal conduct of business and not intended for resale. Includes, but is not limited to, accounting policies and methodology, roll forwards, depreciation, depletion and amortization expense, including composite depreciation, accumulated depreciation, depletion and amortization expense, useful lives and method used, income statement disclosures, assets held for sale and public utility disclosures.

+ References+ Details

Debt

12 Months Ended

Dec. 31, 2013

Debt

6. DEBT

We maintain an unsecured, syndicated revolving credit agreement that provides for borrowings of up to $500,000. Borrowings are used to fund seasonal working capital needs and for other general corporate purposes, including acquisitions, dividends, stock repurchases and issuances of letters of credit. Included in the facility are a $65,000 swingline subfacility, a $50,000 letter of credit subfacility and a $75,000 multicurrency borrowing sublimit.

On July 1, 2013, we entered into an amendment to the revolving credit agreement, which extended the maturity date from April 27, 2017 to July 1, 2018, reduced pricing, improved covenant flexibility to accommodate the seasonal nature of our working capital requirements and modified certain definitions. Borrowings under the amended credit facility bear interest at either LIBOR-based rates plus a spread, which ranges from 87.5 to 250.0 basis-points (LIBOR plus 125.0 basis-points at December 31, 2013), depending upon our ratio of total debt to EBITDA, or on rates based on the higher of the Prime rate or the Federal Funds Rate, in each case plus a spread which ranges from 0 to 150.0 basis-points (25.0 basis-points at December 31, 2013), depending upon our ratio of total debt to EBITDA. We pay a variable commitment fee on the unused portion of the commitment under the revolving credit agreement, ranging from 12.5 to 35.0 basis-points (17.5 basis-points at December 31, 2013).

At December 31, 2013 and 2012, $230,044 and $316,182 was outstanding under the revolving credit agreement, respectively. The revolving credit agreement contains customary affirmative and negative covenants, including financial covenants with respect to consolidated leverage and interest coverage ratios, and other customary restrictions. We believe we were in compliance with all covenants at December 31, 2013.

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References+ Details

Income Taxes

12 Months Ended

Dec. 31, 2013

Income Taxes

7. INCOME TAXES

The components of income tax expense from our wholly-owned operations and investments and our controlling interest in joint ventures with Carrier are as follows:


*Years Ended December 31,*	2013		2012		2011
U.S. Federal	$	62,616	$	50,919	$	50,197
State		9,234		6,245		6,338
Foreign		5,810		5,478		315

	$	77,660	$	62,642	$	56,850

Current	$	69,071	$	55,918	$	48,540
Deferred		8,589		6,724		8,310

	$	77,660	$	62,642	$	56,850

We calculate our income tax expense and our effective tax rate for 100% of income attributable to our wholly-owned operations and investments and for our controlling interest of income attributable to our joint ventures with Carrier, which are taxed as partnerships for income tax purposes.

Following is a reconciliation of the effective income tax rate:


*Years Ended December 31,*	2013			2012			2011
U.S. federal statutory rate		35.0	%		35.0	%		35.0	%
State income taxes, net of federal benefit and other		3.3			2.5			3.1
Tax effects on foreign income		(1.3	)		(0.8	)		(0.1	)

Effective income tax rate attributable to Watsco, Inc.		37.0			36.7			38.0
Taxes attributable to noncontrolling interest		(7.7	)		(8.3	)		(8.8	)

Effective income tax rate		29.3	%		28.4	%		29.2	%

The following is a summary of the significant components of our current and long-term deferred tax assets and liabilities:


*December 31,*	2013			2012
Current deferred tax assets:
Capitalized inventory costs and inventory reserves	$	2,883		$	2,386
Self-insurance reserves		1,093			1,039
Allowance for doubtful accounts		882			1,084
Other current deferred tax assets		1,539			1,215

Total current deferred tax assets (1)		6,397			5,724

Long-term deferred tax assets:
Share-based compensation		17,455			13,911
Other long-term deferred tax assets		909			797
Net operating loss carryforwards		283			609

		18,647			15,317
Valuation allowance		(75	)		(391	)

Total long-term deferred tax assets (2)		18,572			14,926

Current deferred tax liabilities:
Other current deferred tax liabilities		(1,304	)		(36	)

Total current deferred tax liabilities (1)		(1,304	)		(36	)

Long-term deferred tax liabilities:
Deductible goodwill		(76,519	)		(66,636	)
Depreciation		(2,873	)		(3,100	)
Other long-term deferred tax liabilities		(2,556	)		(1,322	)

Total long-term deferred tax liabilities (2)		(81,948	)		(71,058	)

Net deferred tax liabilities	$	(58,283	)	$	(50,444	)

(1)	Current deferred tax assets and liabilities have been included in the consolidated balance sheets in other current assets.

(2)	Long-term deferred tax assets and liabilities have been included in the consolidated balance sheets in deferred income taxes and other liabilities.

Amounts earned by foreign subsidiaries are generally subject to United States income taxation upon repatriation. United States income taxes have not been provided on undistributed earnings of our foreign subsidiaries. The cumulative undistributed earnings related to foreign operations were approximately $55,000 at December 31, 2013. It is not practicable to estimate the amount of tax that might be payable. Our intention is to reinvest these earnings permanently or to repatriate the earnings only when it is tax effective to do so.

Management has determined that $75 and $391 of valuation allowance was necessary at December 31, 2013 and 2012, respectively, to reduce the deferred tax assets to the amount that will more likely than not be realized. At December 31, 2013, there were state and other net operating loss carryforwards of $7,117, which expire in varying amounts from 2014 through 2026. These amounts are available to offset future taxable income. There were no federal net operating loss carryforwards at December 31, 2013.

We are subject to United States federal income tax, income tax of multiple state jurisdictions and foreign income tax. We are subject to tax audits in the various jurisdictions until the respective statutes of limitations expire. We are no longer subject to United States federal tax examinations for tax years prior to 2010. For the majority of states, we are no longer subject to tax examinations for tax years prior to 2009.

As of December 31, 2013 and 2012, the total amount of gross unrecognized tax benefits (excluding the federal benefit received from state positions) was $3,135 and $2,474, respectively. Of these totals, $2,038 and $1,609, respectively, (net of the federal benefit received from state positions) represent the amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate. Our continuing practice is to recognize penalties within selling, general and administrative expenses and interest related to income tax matters in income tax expense in the consolidated statements of income. As of December 31, 2013 and 2012, the cumulative amount of estimated accrued interest and penalties resulting from such unrecognized tax benefits was $630 and $583, respectively, and is included in deferred income taxes and other liabilities in the accompanying consolidated balance sheets.

The changes in gross unrecognized tax benefits are as follows:


Balance at December 31, 2010	$	1,889
Additions based on tax positions related to the current year		542
Reductions due to lapse of applicable statute of limitations		(7	)

Balance at December 31, 2011		2,424
Additions based on tax positions related to the current year		416
Reductions due to lapse of applicable statute of limitations		(366	)

Balance at December 31, 2012		2,474
Additions based on tax positions related to the current year		673
Reductions due to lapse of applicable statute of limitations		(12	)

Balance at December 31, 2013	$	3,135

Share-Based Compensation and Benefit Plans

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References+ Details

Share-Based Compensation and Benefit Plans

12 Months Ended

Dec. 31, 2013

8. SHARE-BASED COMPENSATION AND BENEFIT PLANS

Share-Based Compensation Plan

The 2001 Incentive Compensation Plan (the “2001 Plan”) provides for the award of a broad variety of share-based compensation alternatives such as non-vested (restricted) stock, non-qualified stock options, incentive stock options, performance awards, dividend equivalents, deferred stock and stock appreciation rights at no less than 100% of the market price on the date the award is granted. To date, awards under the 2001 Plan consist of non-qualified stock options and non-vested (restricted) stock. Under the 2001 Plan, we may grant awards for an aggregate of 4,000,000 shares of Common and Class B common stock. A total of 1,987,912 shares of Common stock, net of cancellations, and 1,752,642 shares of Class B common stock, net of cancellations, had been awarded under the 2001 Plan as of December 31, 2013. As of December 31, 2013, 259,446 shares of common stock were reserved for future grants under the 2001 Plan. Options under the 2001 Plan vest over two to four years of service and have contractual terms of five years. Awards of non-vested (restricted) stock, which are granted at no cost to the employee, vest upon attainment of a certain age, generally the employee’s respective retirement age. Vesting may be accelerated in certain circumstances prior to the original vesting date.

The following is a summary of stock option activity under the 2001 Plan as of and for the year ended December 31, 2013:


	Options			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value
Options outstanding at December 31, 2012		324,150		$	56.21
Granted		30,000			82.32
Exercised		(79,450	)		34.65
Forfeited		(7,000	)		65.31
Expired		—			—

Options outstanding at December 31, 2013		267,700		$	65.30		2.65	$	8,234

Options exercisable at December 31, 2013		50,784		$	60.13		2.12	$	1,824

The following is a summary of non-vested (restricted) stock activity as of and for the year ended December 31, 2013:


	Shares			Weighted- Average Grant Date Fair Value
Non-vested (restricted) stock outstanding at December 31, 2012		2,373,249		$	38.75
Granted		124,043			80.21
Forfeited		(10,000	)		68.36

Non-vested (restricted) stock outstanding at December 31, 2013		2,487,292		$	40.70

The weighted-average grant date fair value of non-vested (restricted) stock granted during 2013, 2012 and 2011 was $80.21, $69.66 and $63.87, respectively. The fair value of non-vested stock that vested during 2011 was $672. No non-vested (restricted) stock vested during 2013 or 2012.

During 2011, 2,527 shares of Common stock with an aggregate fair market value of $180 were withheld as payment in lieu of cash to satisfy tax withholding obligations in connection with the vesting of non-vested (restricted) stock.

Share-Based Compensation Fair Value Assumptions

The fair value of each stock option award is estimated on the date of grant using the Black-Scholes option pricing valuation model based on the weighted-average assumptions noted in the table below. The fair value of each stock option award, which is subject to graded vesting, is expensed, net of estimated forfeitures, on a straight-line basis over the requisite service period for each separately vesting portion of the stock option. We use historical data to estimate stock option forfeitures. The expected term of stock option awards granted represents the period of time that stock option awards granted are expected to be outstanding and was calculated using the simplified method for plain vanilla options, which we believe provides a reasonable estimate of expected life based on our historical data. The risk-free rate for periods within the contractual life of the stock option award is based on the yield curve of a zero-coupon United States Treasury bond on the date the stock option award is granted with a maturity equal to the expected term of the stock option award. Expected volatility is based on historical volatility of our stock.

The following table presents the weighted-average assumptions used for stock options granted:


*Years Ended December 31,*	2013			2012			2011
Expected term in years		4.25			4.25			4.25
Risk-free interest rate		0.82	%		0.57	%		1.12	%
Expected volatility		24.56	%		31.40	%		32.59	%
Expected dividend yield		2.20	%		3.49	%		3.48	%
Grant date fair value	$	13.33		$	12.90		$	12.31

Exercise of Stock Options

The total intrinsic value of stock options exercised during 2013, 2012 and 2011 was $2,753, $5,641 and $4,724, respectively. Cash received from Common stock issued as a result of stock options exercised during 2013, 2012 and 2011 was $1,554, $3,790 and $4,530, respectively. During 2013 and 2012, 4,749 shares of Common stock with an aggregate fair market value of $450 and 29,987 shares of Common stock with an aggregate fair market value of $2,229, respectively, were withheld as payment in lieu of cash for stock option exercises and related tax withholdings. During 2013 and 2011, 13,227 shares of common stock with an aggregate fair market value of $1,227 and 7,616 shares of Common stock with an aggregate fair market value of $437, respectively, were delivered as payment in lieu of cash for stock option exercises and related tax withholdings. These shares were retired upon delivery. In connection with stock option exercises, the tax benefits realized from share-based compensation plans totaled $1,557, $1,245 and $916, for the years ended December 31, 2013, 2012 and 2011, respectively.

Share-Based Compensation Expense

The following table provides information on share-based compensation expense:


*Years Ended December 31,*	2013		2012		2011
Stock options	$	884	$	846	$	612
Non-vested (restricted) stock		9,083		7,093		6,051

Share-based compensation expense	$	9,967	$	7,939	$	6,663

At December 31, 2013, there was $848 of unrecognized pre-tax compensation expense related to stock options granted under the 2001 Plan, which is expected to be recognized over a weighted-average period of approximately 1.6 years. The total fair value of stock options that vested during 2013, 2012 and 2011 was $822, $315 and $475, respectively.

At December 31, 2013, there was $72,870 of unrecognized pre-tax compensation expense related to non-vested (restricted) stock, which is expected to be recognized over a weighted-average period of approximately 9.7 years, of which, approximately $53,000 is related to awards granted to our Chief Executive Officer, which vest in approximately nine years upon his attainment of age 82. In the event that vesting is accelerated for any circumstance, as defined in the related agreements, the remaining unrecognized share-based compensation expense would be immediately recognized as a charge to earnings with a corresponding tax benefit. At December 31, 2013, we were obligated to issue 177,025 shares of non-vested (restricted) stock in connection with incentive compensation agreements.

Employee Stock Purchase Plan

The Watsco, Inc. Fourth Amended and Restated 1996 Qualified Employee Stock Purchase Plan (the “ESPP”) provides for up to 1,500,000 shares of Common stock to be available for purchase by our full-time employees with at least 90 days of service. The plan allows participating employees to purchase shares of Common stock with a discount of 5% of the fair market value at specified times. During 2013, 2012 and 2011, employees purchased 5,844, 6,753 and 8,520 shares of Common stock at an average price of $79.46, $68.76 and $59.44 per share, respectively. Cash dividends received by the ESPP were reinvested in Common stock and resulted in the issuance of 1,899, 15,411 and 5,097 additional shares during 2013, 2012 and 2011, respectively. We received net proceeds of $631, $1,522 and $829, respectively, during 2013, 2012 and 2011, for shares of our Common stock issued under the ESPP. At December 31, 2013, 525,152 shares remained available for purchase under the ESPP.

401(k) Plan

We have a profit sharing retirement plan for our employees that is qualified under Section 401(k) of the Internal Revenue Code. Annual matching contributions are made based on a percentage of eligible employee compensation deferrals. The contribution has historically been made with the issuance of Common stock to the plan on behalf of our employees. For the years ended December 31, 2013, 2012 and 2011, we issued 22,551, 26,991 and 27,240 shares of Common stock to the plan representing the Common stock discretionary matching contribution of $1,689, $1,772 and $1,718, respectively.

The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.

+ References+ Details

Acquisitions

12 Months Ended

Dec. 31, 2013

Acquisitions

9. ACQUISITIONS

Carrier Enterprise I

Carrier Enterprise, LLC (“Carrier Enterprise I”) is a joint venture formed on July 1, 2009 with Carrier that operates a network of locations primarily throughout the Sun Belt. From its inception until July 2, 2012, we owned 60% of the joint venture and Carrier owned 40%. We had an option to purchase an additional 10% ownership interest in Carrier Enterprise I, which became exercisable on July 1, 2012. On July 2, 2012, we exercised this option and acquired an additional 10% ownership interest in Carrier Enterprise I for cash consideration of $51,881. We have a second option to purchase an additional 10% interest in Carrier Enterprise I, which becomes exercisable beginning on July 1, 2014.

Carrier Enterprise II

On April 29, 2011, we formed a second joint venture with Carrier to distribute Carrier, Bryant and Payne branded residential, light-commercial and applied-commercial HVAC products and related parts and supplies in the northeast U.S. Carrier contributed 28 of its company-operated northeastern locations to the newly formed joint venture and we contributed 14 of our northeast locations. We purchased a 60% controlling interest in the joint venture for a fair value of $49,229. Total consideration paid by us for our 60% controlling interest in the joint venture was composed of cash consideration of $34,460 and our contribution of 14 northeastern locations valued at $14,769.

The purchase price resulted in the recognition of $32,957 in goodwill and intangibles. The fair value of the identified intangible assets was $20,600 and consisted of $13,400 in trade names and distribution rights and $7,200 in customer relationships to be amortized over a 12 year period. The tax basis of the acquired goodwill recognized is deductible for income tax purposes over 15 years.

The purchase price allocation is based upon a purchase price of $49,229, which represents the fair value of our 60% controlling interest in the joint venture. The table below presents the allocation of the total consideration to tangible and intangible assets acquired, liabilities assumed and the noncontrolling interest from the acquisition of our 60% controlling interest in the joint venture based on the respective fair values as of April 29, 2011:


Cash	$	5
Accounts receivable		24,300
Inventories		39,003
Other current assets		773
Property and equipment		4,402
Goodwill		12,357
Intangibles		20,600
Other assets		202
Accounts payable and accrued expenses		(22,894	)
Noncontrolling interest		(29,519	)

Total purchase price	$	49,229

The fair value of the noncontrolling interest was determined by applying a pro-rata value of the total invested capital adjusted for a discount for lack of control that market participants would consider when estimating the fair value of the noncontrolling interest. As a result of our contribution of 14 locations to the joint venture, $7,708 representing 40% of the carrying value of the contributed locations was attributed to the noncontrolling interest and $7,061 representing 40% of the difference between the fair value and carrying value of the contributed locations, was recognized as an increase to paid-in capital.

On July 29, 2011, we acquired a 60% controlling interest in Carrier’s HVAC/R distribution operations in Mexico for cash consideration of $9,000. Carrier’s company-operated Mexico distribution network had revenues of approximately $75,000 in 2010 and operated from seven locations. Products sold include Carrier’s complete product line of HVAC equipment and commercial refrigeration products and supplies servicing both the residential and applied commercial markets. Collectively, the Northeast locations and the Mexico operations are referred to as “Carrier Enterprise II.” Neither we nor Carrier has any options to purchase additional ownership interests in Carrier Enterprise II.

Carrier Enterprise III

On April 27, 2012, we completed the formation of a joint venture with UTC Canada Corporation (“UTC Canada”), an affiliate of Carrier, to distribute Carrier-manufactured HVAC products in Canada. The newly formed joint venture, Carrier Enterprise Canada, L.P. (“Carrier Enterprise III”), operates 35 locations throughout Canada. We have a 60% controlling interest in Carrier Enterprise III and Carrier has a 40% noncontrolling interest. Total consideration paid by us for our 60% controlling interest in Carrier Enterprise III comprised cash consideration of $80,489 and the issuance to UTC Canada of 1,250,000 shares of Common stock, having a fair value of $93,250. Neither we nor UTC Canada has any options to purchase additional ownership interests in Carrier Enterprise III.

The purchase price for Carrier Enterprise III resulted in the recognition of $216,463 in goodwill and intangibles. The fair value of the identified intangible assets was $151,172 and consisted of $95,515 in trade names and distribution rights and $55,657 in customer relationships to be amortized over a 15 year period. For Canadian income tax purposes, 75% of the tax basis of the acquired goodwill is amortized at a rate of 7% annually on a declining balance basis.

The purchase price allocation is based upon a purchase price of $173,739, which represents the fair value of our 60% controlling interest in Carrier Enterprise III. The table below presents the allocation of the total consideration to tangible and intangible assets acquired, liabilities assumed and the noncontrolling interest from the acquisition of our 60% controlling interest in Carrier Enterprise III based on the respective fair values as of April 27, 2012:


Cash	$	10
Accounts receivable		46,718
Inventories		55,024
Other current assets		481
Property and equipment		2,517
Goodwill		65,291
Intangible assets		151,172
Other assets		978
Accounts payable and accrued expenses		(44,208	)
Noncontrolling interest		(104,244	)

Total purchase price	$	173,739

The unaudited pro forma financial information, combining our results of operations with the operations of Carrier Enterprise II and Carrier Enterprise III as if the joint ventures had been formed on January 1, 2011, is as follows:


*Years ended December 31,*	2012		2011
Revenues	$	3,526,621	$	3,404,381
Net income		156,728		159,147
Less: net income attributable to noncontrolling interest		54,153		60,380

Net income attributable to Watsco, Inc.	$	102,575	$	98,767

Diluted earnings per share for Common and Class B common stock	$	2.64	$	2.89

The foregoing unaudited pro forma financial information is presented for informational purposes only. The unaudited pro forma financial information from the beginning of the periods presented until the respective acquisition dates of the above-described Canadian, Northeast United States and Mexican operations includes adjustments to record income taxes related to our portion of Carrier Enterprise II and Carrier Enterprise III’s income, amortization related to identified intangible assets with finite lives and interest expense on borrowings incurred to acquire our 60% controlling interests. This unaudited pro forma financial information does not include adjustments to add or remove certain corporate expenses of Carrier Enterprise II and Carrier Enterprise III, which may or may not be incurred in future periods, or adjustments for depreciation or synergies that may be realized subsequent to the acquisition dates. This unaudited pro forma financial information does not necessarily reflect our future results of operations or what the results of operations would have been had we acquired our 60% controlling interest in and operated Carrier Enterprise II and Carrier Enterprise III as of the beginning of the periods presented.

The results of operations of these acquired locations have been included in the consolidated financial statements from their respective dates of acquisition.

Transaction costs

Approximately $1,200 of transaction costs is included in selling, general and administrative expenses in our consolidated statements of income for both the years ended December 31, 2012 and 2011, primarily associated with the closing and transition of Carrier Enterprise III and Carrier Enterprise II, respectively.

The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable).

Goodwill and Other Intangible Assets

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Goodwill and Other Intangible Assets

12 Months Ended

Dec. 31, 2013

10. GOODWILL AND OTHER INTANGIBLE ASSETS

The changes in the carrying amount of goodwill are as follows:


Balance at December 31, 2011	$	319,440
Acquired goodwill		77,829
Foreign currency translation adjustment		(7	)

Balance at December 31, 2012		397,262
Foreign currency translation adjustment		(4,652	)

Balance at December 31, 2013	$	392,610

Other intangible assets are comprised of the following:


*December 31,*	Estimated Useful Lives	2013			2012
Indefinite lived intangible assets - Trade names, trademarks and distribution rights		$	138,599		$	144,683
Finite lived intangible assets:
Customer relationships	10-15 years		80,865			84,410
Trade name	10 years		1,150			1,150
Non-compete agreements	7 years		369			369
Accumulated amortization			(17,140	)		(11,111	)

Finite lived intangible assets, net			65,244			74,818

		$	203,843		$	219,501

Amortization expense related to finite lived intangible assets included in selling, general and administrative expenses for the years ended December 31, 2013, 2012 and 2011, was $6,029, $4,925 and $2,361, respectively. Amortization of finite lived intangible assets for 2014 through 2018 is expected to be approximately $5,900 per year.

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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Shareholders' Equity

12 Months Ended

Dec. 31, 2013

Shareholders' Equity

11. SHAREHOLDERS’ EQUITY

Common Stock

Common stock and Class B common stock share equally in earnings and are identical in most other respects except (i) Common stock is entitled to one vote on most matters and each share of Class B common stock is entitled to ten votes; (ii) shareholders of Common stock are entitled to elect 25% of the Board of Directors (rounded up to the nearest whole number) and Class B shareholders are entitled to elect the balance of the Board of Directors; (iii) cash dividends may be paid on Common stock without paying a cash dividend on Class B common stock and no cash dividend may be paid on Class B common stock unless at least an equal cash dividend is paid on Common stock and (iv) Class B common stock is convertible at any time into Common stock on a one-for-one basis at the option of the shareholder.

Preferred Stock

We are authorized to issue preferred stock with such designation, rights and preferences as may be determined from time to time by our Board of Directors. Accordingly, the Board of Directors is empowered, without shareholder approval, to issue preferred stock with dividend, liquidation, conversion, voting or other rights which could adversely affect the voting power or other rights of the holders of our Common stock and Class B common stock and, in certain instances, could adversely affect the market price of this stock. We had no preferred stock outstanding at December 31, 2013 and 2012.

Stock Repurchase Plan

In September 1999, our Board of Directors authorized the repurchase, at management’s discretion, of up to 7,500,000 shares of common stock in the open market or via private transactions. Shares repurchased under the program are accounted for using the cost method and result in a reduction of shareholders’ equity. No shares were repurchased during 2013, 2012 or 2011. In aggregate, 6,322,650 shares of Common stock and 48,263 shares of Class B common stock have been repurchased at a cost of $114,425 since the inception of the program. At December 31, 2013, there were 1,129,087 shares remaining authorized for repurchase under the program.

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

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Financial Instruments

12 Months Ended

Dec. 31, 2013

Financial Instruments

12. FINANCIAL INSTRUMENTS

Recorded Financial Instruments

Recorded financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable, the current portion of long-term obligations, borrowings under our revolving credit agreement and debt instruments included in other long-term obligations. At December 31, 2013 and 2012, the fair values of cash and cash equivalents, accounts receivable, accounts payable and the current portion of long-term obligations approximated their carrying values due to the short-term nature of these instruments.

The fair values of variable rate borrowings under our revolving credit agreement and debt instruments included in long-term obligations also approximate their carrying value based upon interest rates available for similar instruments with consistent terms and remaining maturities.

Derivative Financial Instruments

We routinely use certain derivatives instruments to hedge foreign currency exposure. Although these derivatives were not designated as hedges and/or did not qualify for hedge accounting, they were effective economic hedges for the periods presented. The changes in fair value of economic hedges are recognized in earnings. During 2013 and 2012, we entered into foreign currency forward contracts to offset the earnings impact that foreign currency exchange rate fluctuations would otherwise have had on certain monetary liabilities that are denominated in nonfunctional currencies. The changes in fair value of these foreign currency forward contracts were a gain (loss) of $315 and $(197) for 2013 and 2012, respectively, and are included in selling, general and administrative expenses in our consolidated statements of income. The total notional value of our foreign currency exchange contracts as of December 31, 2013 was $26,000, and such contracts have varying terms expiring through March 2014. See Note 13.

We were party to an interest rate swap agreement with a notional amount of $10,000 that matured in October 2011 and had been designated as a cash flow hedge. The swap effectively exchanged the variable rate of 30-day LIBOR to a fixed interest rate of 5.07%. For the year ended December 31, 2011, the hedging relationship was determined to be highly effective in achieving offsetting changes in cash flows. The net change in other comprehensive loss during 2011 reflected the reclassification of $244, net of income tax benefit of $155, of unrealized losses from accumulated other comprehensive loss to current period earnings (recorded in interest expense, net in the consolidated statement of income).

Off-Balance Sheet Financial Instruments

At December 31, 2013 and 2012, we were contingently liable under standby letters of credit aggregating $2,681 and $3,098, respectively, which are primarily used as collateral to cover any contingency related to additional risk assessments pertaining to our self-insurance programs. Additionally, at December 31, 2013 and 2012, we were contingently liable under various performance bonds aggregating approximately $800 and $300, respectively, which are used as collateral to cover any contingencies related to our nonperformance under agreements with certain customers. We do not expect that any material losses or obligation will result from the issuance of the standby letters of credit or performance bonds because we expect to meet our obligations under our self-insurance programs and to certain customers in the ordinary course of business. Accordingly, the estimated fair value of these instruments is zero.

Concentrations of Credit Risk

Financial instruments which potentially subject us to concentrations of credit risk consist principally of accounts receivable. Concentrations of credit risk are limited due to the large number of customers comprising the customer base and their dispersion across many different geographical regions. We also have access to credit insurance programs which are used as an additional means to mitigate credit risk.

Fair Value Measurements

12 Months Ended

Dec. 31, 2013

Fair Value Measurements

13. FAIR VALUE MEASUREMENTS

The following tables present our assets and liabilities carried at fair value that are measured on a recurring basis:


				Fair Value Measurements at December 31, 2013 Using
	Balance Sheet Location	Total		Level 1		Level 2		Level 3
Assets:
Available-for-sale securities	Other assets	$	265	$	265		—		—
Derivative financial instruments	Other current assets	$	118		—	$	118		—

				Fair Value Measurements at December 31, 2012 Using
	Balance Sheet Location	Total		Level 1		Level 2		Level 3
Assets:
Available-for-sale securities	Other assets	$	226	$	226		—		—
Liabilities:
Derivative financial instruments	Accrued expenses and other current liabilities	$	197		—	$	197		—

The following is a description of the valuation techniques used for these assets and liabilities, as well as the level of input used to measure fair value:

Available-for-sale securities – the investments are exchange-traded equity securities. Fair values for these investments are based on closing stock prices from active markets and are therefore classified within Level 1 of the fair value hierarchy.

Derivative financial instruments – the derivatives are foreign currency forward contracts. Fair value is based on observable market inputs, such as forward rates in active markets; therefore, we classify the derivatives within Level 2 of the valuation hierarchy.

There were no transfers in or out of Level 1 and Level 2 during 2013 or 2012.

Commitments and Contingencies

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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Commitments and Contingencies

12 Months Ended

Dec. 31, 2013

14. COMMITMENTS AND CONTINGENCIES

Litigation, Claims and Assessments

We are involved in litigation incidental to the operation of our business. We vigorously defend all matters in which we or our subsidiaries are named defendants and, for insurable losses, maintain significant levels of insurance to protect against adverse judgments, claims or assessments that may affect us. Although the adequacy of existing insurance coverage and the outcome of any legal proceedings cannot be predicted with certainty, based on the current information available, we do not believe the ultimate liability associated with any known claims or litigation will have a material adverse effect on our financial condition or results of operations.

Self-Insurance

Self-insurance reserves are maintained relative to company-wide casualty insurance and health benefit programs. The level of exposure from catastrophic events is limited by the purchase of stop-loss and aggregate liability reinsurance coverage. When estimating the self-insurance liabilities and related reserves, management considers a number of factors, which include historical claims experience, demographic factors, severity factors and valuations provided by independent third-party actuaries. Management reviews its assumptions with its independent third-party actuaries to evaluate whether the self-insurance reserves are adequate. If actual claims or adverse development of loss reserves occur and exceed these estimates, additional reserves may be required. Reserves in the amounts of $5,582 and $4,844 at December 31, 2013 and 2012, respectively, were established related to such programs and are included in accrued expenses and other current liabilities in our consolidated balance sheets.

Variable Interest Entity

As of December 31, 2013, in conjunction with our casualty insurance programs, limited equity interests are held in a captive insurance entity. The programs permit us to self-insure a portion of losses, to gain access to a wide array of safety-related services, to pool insurance risks and resources in order to obtain more competitive pricing for administration and reinsurance and to limit risk of loss in any particular year. The entity meets the definition of Variable Interest Entity (“VIE”); however, we do not meet the requirements to include this entity in the consolidated financial statements. The maximum exposure to loss related to our involvement with this entity is limited to approximately $4,400. See “Self-Insurance” above for further information on commitments associated with the insurance programs and Note 12, under the caption “Off-Balance Sheet Financial Instruments,” for further information on standby letters of credit. At December 31, 2013, there were no other entities that met the definition of a VIE.

Operating Leases

We are obligated under various non-cancelable operating lease agreements for real property, equipment, vehicles and a corporate aircraft used in our operations with varying terms through 2023. We are committed to pay a portion of the actual operating expenses under certain of these lease agreements. These operating expenses are not included in the table below. Some of these arrangements have free or escalating rent payment provisions. We recognize rent expense under such arrangements on a straight-line basis over the lease term.

At December 31, 2013, future minimum payments under non-cancelable operating leases over each of the next five years and thereafter were as follows:


2014	$	64,967
2015		54,508
2016		43,322
2017		28,356
2018		14,006
Thereafter		8,388

Total minimum payments	$	213,547

Rental expense for the years ended December 31, 2013, 2012 and 2011, was $79,585, $76,547 and $70,933, respectively.

Related Party Transactions

The entire disclosure for commitments and contingencies.

+ References+ Details

Related Party Transactions

12 Months Ended

Dec. 31, 2013

15. RELATED PARTY TRANSACTIONS

Purchases from Carrier and its affiliates comprised 59%, 57% and 54% of all inventory purchases made during 2013, 2012 and 2011, respectively. At December 31, 2013 and 2012, approximately $53,000 and $62,000, respectively, was payable to Carrier and its affiliates, net of receivables. Our joint ventures with Carrier also sell HVAC products to Carrier and its affiliates. Revenues in our consolidated statements of income for 2013, 2012 and 2011 include $30,819, $32,961 and $23,710, respectively, of sales to Carrier and its affiliates. We believe these transactions are conducted at arm’s-length in the ordinary course of business.

Carrier Enterprise II entered into Transactional Services Agreements (“TSAs”) with Carrier, pursuant to which Carrier performed certain business processes on its behalf, including processes involving the use of certain information technologies. The services provided by Carrier pursuant to the TSAs terminated on April 30, 2012. The fees related to these TSAs were $1,798 and $1,139, respectively, for 2012 and 2011, and are included in selling, general and administrative expenses in our consolidated statements of income. At December 31, 2012, $25 related to these TSAs was payable to Carrier and was included in accrued expenses and other current liabilities in our consolidated balance sheet. Amounts outstanding were repaid in 2013 and no further services are required under the TSAs for Carrier Enterprise II.

Carrier Enterprise III entered into TSAs with UTC Canada, pursuant to which UTC Canada performed certain business processes on behalf of Carrier Enterprise III, including processes involving the use of certain information technologies, and UTC Canada entered into TSAs with Carrier Enterprise III, pursuant to which Carrier Enterprise III performed certain business processes on behalf of UTC Canada. The services provided pursuant to the TSAs terminated on December 31, 2012. The fees payable by Carrier Enterprise III to UTC Canada under one TSA were substantially offset by the fees payable to Carrier Enterprise III by UTC Canada under the other TSA.

At December 31, 2012, $29,637 was payable to Carrier and UTC Canada for unpaid distributions declared to the noncontrolling interest. This amount was paid to Carrier and UTC Canada in February 2013. No amounts were outstanding at December 31, 2013.

Information about Geographic Areas

The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.

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Information about Geographic Areas

12 Months Ended

Dec. 31, 2013

16. INFORMATION ABOUT GEOGRAPHIC AREAS

Our operations are primarily within the United States and Puerto Rico. Products are sold on an export-only basis to portions of Latin America and the Caribbean Basin. The following tables set forth revenues and long-lived assets by geographical area:


*Years Ended December 31,*	2013		2012		2011
Revenues:
United States	$	3,325,114	$	3,087,256	$	2,938,907
Canada		318,165		240,254		—
Mexico		100,051		104,202		38,852

Total Revenues	$	3,743,330	$	3,431,712	$	2,977,759


*December 31,*	2013		2012
Long-Lived Assets:
United States	$	429,202	$	429,153
Canada		207,340		225,076
Mexico		5,329		5,376

Total Long-Lived Assets	$	641,871	$	659,605

Revenues are attributed to countries based on the location of the store from which the sale occurred. Long-lived assets consist of property and equipment, goodwill and intangible assets.

Supplemental Cash Flow Information

12 Months Ended

Dec. 31, 2013

Supplemental Cash Flow Information

17. SUPPLEMENTAL CASH FLOW INFORMATION

Supplemental cash flow information was as follows:


*Years Ended December 31,*	2013		2012		2011
Interest paid	$	5,334	$	2,802	$	1,854
Income taxes net of refunds	$	73,168	$	46,819	$	45,137
Common stock issued for Carrier Enterprise III		—	$	93,250		—
Net assets of locations contributed to Carrier Enterprise II		—		—	$	14,769

Selected Quarterly Financial Data

12 Months Ended

Dec. 31, 2013

Selected Quarterly Financial Data

WATSCO, INC. AND SUBSIDIARIES

SELECTED QUARTERLY FINANCIAL DATA

(UNAUDITED)


*(In thousands, except per share data)*	1st Quarter		2nd Quarter		3rd Quarter		4th Quarter		Total
Year Ended December 31, 2013
Revenues (1)	$	713,633	$	1,120,452	$	1,081,893	$	827,352	$	3,743,330
Gross profit		175,446		266,680		258,597		198,530		899,253
Net income attributable to Watsco, Inc.	$	13,385	$	51,318	$	45,699	$	17,321	$	127,723

Earnings per share for Common and Class B common stock (2):
Basic	$	0.39	$	1.48	$	1.32	$	0.50	$	3.69

Diluted	$	0.39	$	1.48	$	1.32	$	0.50	$	3.68

Year Ended December 31, 2012
Revenues (1)	$	633,512	$	1,011,801	$	1,020,859	$	765,540	$	3,431,712
Gross profit		150,622		238,475		242,505		182,793		814,395
Net income attributable to Watsco, Inc.	$	8,466	$	39,103	$	41,005	$	14,760	$	103,334

Earnings per share for Common and Class B common stock (2)(3):
Basic	$	0.23	$	1.15	$	1.19	$	0.04	$	2.70

Diluted	$	0.23	$	1.15	$	1.19	$	0.04	$	2.70

(1)

Sales of residential central air conditioners, heating equipment and parts and supplies are seasonal. Demand related to the residential central air conditioning replacement market is typically highest in the second and third quarters and demand for heating equipment is usually highest in the fourth quarter. Demand related to the new construction sectors throughout most of the markets is fairly consistent during the year, except for dependence on housing completions and related weather and economic conditions.

(2)	Quarterly and year-to-date earnings per share are calculated on an individual basis; therefore, the sum of earnings per share amounts for the quarters may not equal earnings per share amounts for the year.

(3)	On October 31, 2012, we paid a special dividend of $5.00 per share of Common and Class B common stock that resulted in a $0.37 per share and $0.33 per share reduction in diluted earnings per share for the quarter and year ended December 31, 2012, respectively.

Foreign Currency Translation and Transactions

The entire disclosure for the quarterly financial data in the annual financial statements. The disclosure may include a tabular presentation of financial information for each fiscal quarter for the current and previous year, including revenues, gross profit, income or loss before extraordinary items and earnings per share data. It also includes an indication if the information in the note is unaudited, comments on the aggregate effect of year-end adjustments, and an explanation of matters or transactions that affect comparability or are pertinent to an understanding of the information furnished.

+ References+ Details

Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2013

Nature of Operations

Nature of Operations

Basis of Consolidation

Basis of Consolidation

Reclassifications

Reclassifications

Certain reclassifications of prior year amounts have been made to conform to the 2013 presentation. These reclassifications had no effect on net income or earnings per share as previously reported.

Foreign Currency Translation and Transactions

Use of Estimates

Use of Estimates

Cash Equivalents

Cash Equivalents

All highly liquid instruments purchased with original maturities of three months or less are considered to be cash equivalents.

Accounts Receivable and Allowance for Doubtful Accounts

Accounts Receivable and Allowance for Doubtful Accounts

Inventories

Inventories

Vendor Rebates

Vendor Rebates

Marketable Securities

Marketable Securities

Property and Equipment

Property and Equipment

Goodwill and Other Intangible Assets

Goodwill and Other Intangible Assets

New Accounting Pronouncements

Long-Lived Assets

Fair Value Measurements

Fair Value Measurements


Level 1		Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

Level 2		Observable inputs other than Level 1 prices such as quoted prices in active markets for similar assets or liabilities; quoted prices in markets that are not active; or model-driven valuations or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3		Unobservable inputs for the asset or liability. These inputs reflect our own assumptions about the assumptions a market participant would use in pricing the asset or liability.

Revenue Recognition

Revenue Recognition

Advertising Costs

Advertising Costs

Advertising costs are expensed as incurred. Advertising expense for the years ended December 31, 2013, 2012 and 2011, was $22,418, $23,730 and $25,052, respectively.

Shipping and Handling

Shipping and Handling

Share-Based Compensation

Share-Based Compensation

Income Taxes

Income Taxes

Earnings per Share

Earnings per Share

Derivative Instruments

Derivative Instruments

New Accounting Pronouncements

Reporting Amounts Reclassified Out of Accumulated Other Comprehensive Income

Presentation of Unrecognized Tax Benefits

Earnings Per Share (Tables)

12 Months Ended

Dec. 31, 2013

Schedule of Basic and Diluted Earnings Per Common Share

The following table presents the calculation of basic and diluted earnings per common share for our Common and Class B common stock:


*Years Ended December 31,*	2013		2012		2011
Basic Earnings per Share:
Net income attributable to Watsco, Inc. shareholders	$	127,723	$	103,334	$	90,450
Less: distributed and undistributed earnings allocated to non-vested (restricted) common stock		9,064		17,656		6,045

Earnings allocated to Watsco, Inc. shareholders	$	118,659	$	85,678	$	84,405

Weighted-average common shares outstanding - Basic		32,195,598		31,680,187		30,678,206

Basic earnings per share for Common and Class B common stock	$	3.69	$	2.70	$	2.75

Allocation of earnings for Basic:
Common stock	$	108,690	$	78,359	$	76,574
Class B common stock		9,969		7,319		7,831

	$	118,659	$	85,678	$	84,405

Diluted Earnings per Share:
Net income attributable to Watsco, Inc. shareholders	$	127,723	$	103,334	$	90,450
Less: distributed and undistributed earnings allocated to non-vested (restricted) common stock		9,053		17,656		6,042

Earnings allocated to Watsco, Inc. shareholders	$	118,670	$	85,678	$	84,408

Weighted-average common shares outstanding - Basic		32,195,598		31,680,187		30,678,206
Effect of dilutive stock options		62,470		64,212		75,085

Weighted-average common shares outstanding - Diluted		32,258,068		31,744,399		30,753,291

Diluted earnings per share for Common and Class B common stock	$	3.68	$	2.70	$	2.74

Other Comprehensive (Loss) Income (Tables)

12 Months Ended

Dec. 31, 2013

Schedule of Tax Effects Allocated to Each Component of Other Comprehensive (Loss) Income

The tax effects allocated to each component of other comprehensive (loss) income are as follows:


*Years Ended December 31,*	2013			2012			2011
Foreign currency translation adjustment	$	(16,365	)	$	(3,191	)	$	—
Unrealized gain on available-for-sale securities		39			63			6
Income tax expense		(15	)		(28	)		(3	)

Unrealized gain on available-for-sale securities, net of tax		24			35			3

Unrealized gain on derivative instrument		—			—			384
Income tax expense		—			—			(146	)

Unrealized gain on derivative instrument, net of tax		—			—			238

Other comprehensive (loss) income	$	(16,341	)	$	(3,156	)	$	241

Schedule of Accumulated Other Comprehensive Loss

The changes in accumulated other comprehensive loss, net of tax, are as follows:


*Years Ended December 31,*	2013			2012			2011
Foreign currency translation adjustment:
Beginning balance	$	(1,785	)	$	—		$	—
Current period other comprehensive loss		(9,396	)		(1,785	)		—

Ending balance		(11,181	)		(1,785	)		—

Available-for-sale securities:
Beginning balance		(317	)		(352	)		(355	)
Current period other comprehensive income		24			35			3

Ending balance		(293	)		(317	)		(352	)

Derivative instrument:
Beginning balance		—			—			(238	)
Current period other comprehensive income		—			—			238

Ending balance		—			—			—

Accumulated other comprehensive loss, net of tax	$	(11,474	)	$	(2,102	)	$	(352	)

Property and Equipment (Tables)

12 Months Ended

Dec. 31, 2013

Property and Equipment, Net

Property and equipment, net, consists of:


*December 31,*	2013			2012
Land	$	1,131		$	1,131
Buildings and improvements		49,942			48,457
Machinery, vehicles and equipment		64,012			57,130
Furniture and fixtures		20,523			18,251

		135,608			124,969
Accumulated depreciation and amortization		(90,190	)		(82,127	)

	$	45,418		$	42,842

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2013

Components of Income Tax Expense

The components of income tax expense from our wholly-owned operations and investments and our controlling interest in joint ventures with Carrier are as follows:


*Years Ended December 31,*	2013		2012		2011
U.S. Federal	$	62,616	$	50,919	$	50,197
State		9,234		6,245		6,338
Foreign		5,810		5,478		315

	$	77,660	$	62,642	$	56,850

Current	$	69,071	$	55,918	$	48,540
Deferred		8,589		6,724		8,310

	$	77,660	$	62,642	$	56,850

Reconciliation of Effective Income Tax Rate

Following is a reconciliation of the effective income tax rate:


*Years Ended December 31,*	2013			2012			2011
U.S. federal statutory rate		35.0	%		35.0	%		35.0	%
State income taxes, net of federal benefit and other		3.3			2.5			3.1
Tax effects on foreign income		(1.3	)		(0.8	)		(0.1	)

Effective income tax rate attributable to Watsco, Inc.		37.0			36.7			38.0
Taxes attributable to noncontrolling interest		(7.7	)		(8.3	)		(8.8	)

Effective income tax rate		29.3	%		28.4	%		29.2	%

Significant Components of Current and Long-Term Deferred Tax Assets and Liabilities

The following is a summary of the significant components of our current and long-term deferred tax assets and liabilities:


*December 31,*	2013			2012
Current deferred tax assets:
Capitalized inventory costs and inventory reserves	$	2,883		$	2,386
Self-insurance reserves		1,093			1,039
Allowance for doubtful accounts		882			1,084
Other current deferred tax assets		1,539			1,215

Total current deferred tax assets (1)		6,397			5,724

Long-term deferred tax assets:
Share-based compensation		17,455			13,911
Other long-term deferred tax assets		909			797
Net operating loss carryforwards		283			609

		18,647			15,317
Valuation allowance		(75	)		(391	)

Total long-term deferred tax assets (2)		18,572			14,926

Current deferred tax liabilities:
Other current deferred tax liabilities		(1,304	)		(36	)

Total current deferred tax liabilities (1)		(1,304	)		(36	)

Long-term deferred tax liabilities:
Deductible goodwill		(76,519	)		(66,636	)
Depreciation		(2,873	)		(3,100	)
Other long-term deferred tax liabilities		(2,556	)		(1,322	)

Total long-term deferred tax liabilities (2)		(81,948	)		(71,058	)

Net deferred tax liabilities	$	(58,283	)	$	(50,444	)

(1)	Current deferred tax assets and liabilities have been included in the consolidated balance sheets in other current assets.

(2)	Long-term deferred tax assets and liabilities have been included in the consolidated balance sheets in deferred income taxes and other liabilities.

Changes in Gross Unrecognized Tax Benefits

The changes in gross unrecognized tax benefits are as follows:


Balance at December 31, 2010	$	1,889
Additions based on tax positions related to the current year		542
Reductions due to lapse of applicable statute of limitations		(7	)

Balance at December 31, 2011		2,424
Additions based on tax positions related to the current year		416
Reductions due to lapse of applicable statute of limitations		(366	)

Balance at December 31, 2012		2,474
Additions based on tax positions related to the current year		673
Reductions due to lapse of applicable statute of limitations		(12	)

Balance at December 31, 2013	$	3,135

Share-Based Compensation and Benefit Plans (Tables)

12 Months Ended

Dec. 31, 2013

Summary of Stock Option Activity

The following is a summary of stock option activity under the 2001 Plan as of and for the year ended December 31, 2013:


	Options			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value
Options outstanding at December 31, 2012		324,150		$	56.21
Granted		30,000			82.32
Exercised		(79,450	)		34.65
Forfeited		(7,000	)		65.31
Expired		—			—

Options outstanding at December 31, 2013		267,700		$	65.30		2.65	$	8,234

Options exercisable at December 31, 2013		50,784		$	60.13		2.12	$	1,824

Summary of Non-Vested (Restricted) Stock Activity

The following is a summary of non-vested (restricted) stock activity as of and for the year ended December 31, 2013:


	Shares			Weighted- Average Grant Date Fair Value
Non-vested (restricted) stock outstanding at December 31, 2012		2,373,249		$	38.75
Granted		124,043			80.21
Forfeited		(10,000	)		68.36

Non-vested (restricted) stock outstanding at December 31, 2013		2,487,292		$	40.70

Weighted-Average Assumptions Relating to Valuation of Our Stock Options

The following table presents the weighted-average assumptions used for stock options granted:


*Years Ended December 31,*	2013			2012			2011
Expected term in years		4.25			4.25			4.25
Risk-free interest rate		0.82	%		0.57	%		1.12	%
Expected volatility		24.56	%		31.40	%		32.59	%
Expected dividend yield		2.20	%		3.49	%		3.48	%
Grant date fair value	$	13.33		$	12.90		$	12.31

Share-Based Compensation Expense

The following table provides information on share-based compensation expense:


*Years Ended December 31,*	2013		2012		2011
Stock options	$	884	$	846	$	612
Non-vested (restricted) stock		9,083		7,093		6,051

Share-based compensation expense	$	9,967	$	7,939	$	6,663

Acquisitions (Tables)

12 Months Ended

Dec. 31, 2013

Schedule of Unaudited Pro Forma Financial Information from Joint Venture


*Years ended December 31,*	2012		2011
Revenues	$	3,526,621	$	3,404,381
Net income		156,728		159,147
Less: net income attributable to noncontrolling interest		54,153		60,380

Net income attributable to Watsco, Inc.	$	102,575	$	98,767

Diluted earnings per share for Common and Class B common stock	$	2.64	$	2.89

Carrier Enterprise II

Purchase Price Allocation for Joint Venture

The table below presents the allocation of the total consideration to tangible and intangible assets acquired, liabilities assumed and the noncontrolling interest from the acquisition of our 60% controlling interest in the joint venture based on the respective fair values as of April 29, 2011:


Cash	$	5
Accounts receivable		24,300
Inventories		39,003
Other current assets		773
Property and equipment		4,402
Goodwill		12,357
Intangibles		20,600
Other assets		202
Accounts payable and accrued expenses		(22,894	)
Noncontrolling interest		(29,519	)

Total purchase price	$	49,229

Carrier Enterprise III

Purchase Price Allocation for Joint Venture

The table below presents the allocation of the total consideration to tangible and intangible assets acquired, liabilities assumed and the noncontrolling interest from the acquisition of our 60% controlling interest in Carrier Enterprise III based on the respective fair values as of April 27, 2012:


Cash	$	10
Accounts receivable		46,718
Inventories		55,024
Other current assets		481
Property and equipment		2,517
Goodwill		65,291
Intangible assets		151,172
Other assets		978
Accounts payable and accrued expenses		(44,208	)
Noncontrolling interest		(104,244	)

Total purchase price	$	173,739

Goodwill and Other Intangible Assets (Tables)

12 Months Ended

Dec. 31, 2013

Changes in Carrying Amount of Goodwill

The changes in the carrying amount of goodwill are as follows:


Balance at December 31, 2011	$	319,440
Acquired goodwill		77,829
Foreign currency translation adjustment		(7	)

Balance at December 31, 2012		397,262
Foreign currency translation adjustment		(4,652	)

Balance at December 31, 2013	$	392,610

Indefinite Lived Intangible Assets-Trade Names, Trademarks And Distribution Rights

Other intangible assets are comprised of the following:


*December 31,*	Estimated Useful Lives	2013			2012
Indefinite lived intangible assets - Trade names, trademarks and distribution rights		$	138,599		$	144,683
Finite lived intangible assets:
Customer relationships	10-15 years		80,865			84,410
Trade name	10 years		1,150			1,150
Non-compete agreements	7 years		369			369
Accumulated amortization			(17,140	)		(11,111	)

Finite lived intangible assets, net			65,244			74,818

		$	203,843		$	219,501

Finite lived intangible assets

Other intangible assets are comprised of the following:


*December 31,*	Estimated Useful Lives	2013			2012
Indefinite lived intangible assets - Trade names, trademarks and distribution rights		$	138,599		$	144,683
Finite lived intangible assets:
Customer relationships	10-15 years		80,865			84,410
Trade name	10 years		1,150			1,150
Non-compete agreements	7 years		369			369
Accumulated amortization			(17,140	)		(11,111	)

Finite lived intangible assets, net			65,244			74,818

		$	203,843		$	219,501

Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2013

Assets and Liabilities Measured at Fair Value on Recurring Basis

The following tables present our assets and liabilities carried at fair value that are measured on a recurring basis:


				Fair Value Measurements at December 31, 2013 Using
	Balance Sheet Location	Total		Level 1		Level 2		Level 3
Assets:
Available-for-sale securities	Other assets	$	265	$	265		—		—
Derivative financial instruments	Other current assets	$	118		—	$	118		—

				Fair Value Measurements at December 31, 2012 Using
	Balance Sheet Location	Total		Level 1		Level 2		Level 3
Assets:
Available-for-sale securities	Other assets	$	226	$	226		—		—
Liabilities:
Derivative financial instruments	Accrued expenses and other current liabilities	$	197		—	$	197		—

Commitments and Contingencies (Tables)

12 Months Ended

Dec. 31, 2013

Future Minimum Lease Payments under Non-Cancelable Operating Leases

At December 31, 2013, future minimum payments under non-cancelable operating leases over each of the next five years and thereafter were as follows:


2014	$	64,967
2015		54,508
2016		43,322
2017		28,356
2018		14,006
Thereafter		8,388

Total minimum payments	$	213,547

Information about Geographic Areas (Tables)

12 Months Ended

Dec. 31, 2013

Revenues and Long-Lived Assets by Geographical Area


*Years Ended December 31,*	2013		2012		2011
Revenues:
United States	$	3,325,114	$	3,087,256	$	2,938,907
Canada		318,165		240,254		—
Mexico		100,051		104,202		38,852

Total Revenues	$	3,743,330	$	3,431,712	$	2,977,759


*December 31,*	2013		2012
Long-Lived Assets:
United States	$	429,202	$	429,153
Canada		207,340		225,076
Mexico		5,329		5,376

Total Long-Lived Assets	$	641,871	$	659,605

Selected Quarterly Financial Data (Tables)

12 Months Ended

Dec. 31, 2013

Selected Quarterly Financial Data

WATSCO, INC. AND SUBSIDIARIES

SELECTED QUARTERLY FINANCIAL DATA

(UNAUDITED)


*(In thousands, except per share data)*	1st Quarter		2nd Quarter		3rd Quarter		4th Quarter		Total
Year Ended December 31, 2013
Revenues (1)	$	713,633	$	1,120,452	$	1,081,893	$	827,352	$	3,743,330
Gross profit		175,446		266,680		258,597		198,530		899,253
Net income attributable to Watsco, Inc.	$	13,385	$	51,318	$	45,699	$	17,321	$	127,723

Earnings per share for Common and Class B common stock (2):
Basic	$	0.39	$	1.48	$	1.32	$	0.50	$	3.69

Diluted	$	0.39	$	1.48	$	1.32	$	0.50	$	3.68

Year Ended December 31, 2012
Revenues (1)	$	633,512	$	1,011,801	$	1,020,859	$	765,540	$	3,431,712
Gross profit		150,622		238,475		242,505		182,793		814,395
Net income attributable to Watsco, Inc.	$	8,466	$	39,103	$	41,005	$	14,760	$	103,334

Earnings per share for Common and Class B common stock (2)(3):
Basic	$	0.23	$	1.15	$	1.19	$	0.04	$	2.70

Diluted	$	0.23	$	1.15	$	1.19	$	0.04	$	2.70

(1)

(2)	Quarterly and year-to-date earnings per share are calculated on an individual basis; therefore, the sum of earnings per share amounts for the quarters may not equal earnings per share amounts for the year.

(3)	On October 31, 2012, we paid a special dividend of $5.00 per share of Common and Class B common stock that resulted in a $0.37 per share and $0.33 per share reduction in diluted earnings per share for the quarter and year ended December 31, 2012, respectively.

Summary of Significant Accounting Policies - Additional Information (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013 Entity	Dec. 31, 2012	Dec. 31, 2011
Significant Accounting Policies [Line Items]
Number of joint ventures	3
Allowance for doubtful accounts	$ 5,737	$ 10,473
Capitalized vendor rebates	9,333	8,015
Advertising expense	22,418	23,730	25,052
Shipping and handling costs	$ 39,395	$ 37,676	$ 30,234
Minimum \| Buildings and Improvements
Significant Accounting Policies [Line Items]
Estimated useful lives in years	3 years
Minimum \| Other Depreciable Assets
Significant Accounting Policies [Line Items]
Estimated useful lives in years	3 years
Maximum \| Buildings and Improvements
Significant Accounting Policies [Line Items]
Estimated useful lives in years	40 years
Maximum \| Other Depreciable Assets
Significant Accounting Policies [Line Items]
Estimated useful lives in years	10 years
Watsco, Inc.
Significant Accounting Policies [Line Items]
Number of locations from which entity operates	569
Number of states in which entity operates	38

Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]

Cost incurred during the reporting period in transporting goods and services to customers. Includes freight-out costs.

+ References+ Details

Schedule of Basic and Diluted Earnings per Common Share (Detail) (USD $)
In Thousands, except Share data, unless otherwise specified

3 Months Ended

12 Months Ended

Dec. 31, 2013

Sep. 30, 2013

Jun. 30, 2013

Mar. 31, 2013

Dec. 31, 2012

Sep. 30, 2012

Jun. 30, 2012

Mar. 31, 2012

Dec. 31, 2013

Dec. 31, 2012

Dec. 31, 2011

Net income attributable to Watsco, Inc. shareholders

$ 17,321

$ 45,699

$ 51,318

$ 13,385

$ 14,760

$ 41,005

$ 39,103

$ 8,466

$ 127,723

$ 103,334

$ 90,450

Less: distributed and undistributed earnings allocated to non-vested (restricted) common stock - basic

9,064

17,656

6,045

Earnings allocated to Watsco, Inc. shareholders - basic

118,659

85,678

84,405

Weighted-average common shares outstanding - Basic

32,195,598

31,680,187

30,678,206

Basic earnings per share for Common and Class B common stock

$ 0.50

^[1]

$ 1.32

^[1]

$ 1.48

^[1]

$ 0.39

^[1]

$ 0.04

^[1],[2]

$ 1.19

^[1]

$ 1.15

^[1]

$ 0.23

^[1]

$ 3.69

^[1]

$ 2.70

^[1],[2]

$ 2.75

Net income attributable to Watsco, Inc. shareholders

17,321

45,699

51,318

13,385

14,760

41,005

39,103

8,466

127,723

103,334

90,450

Less: distributed and undistributed earnings allocated to non-vested (restricted) common stock - diluted

9,053

17,656

6,042

Earnings allocated to Watsco, Inc. shareholders

118,670

85,678

84,408

Weighted-average common shares outstanding - Basic

32,195,598

31,680,187

30,678,206

Effect of dilutive stock options

62,470

64,212

75,085

Weighted-average common shares outstanding - Diluted

32,258,068

31,744,399

30,753,291

Diluted earnings per share for Common and Class B common stock

$ 0.50

^[1]

$ 1.32

^[1]

$ 1.48

^[1]

$ 0.39

^[1]

$ 0.04

^[1],[2]

$ 1.19

^[1]

$ 1.15

^[1]

$ 0.23

^[1]

$ 3.68

^[1]

$ 2.70

^[1],[2]

$ 2.74

Common Stock

Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]

Earnings allocated to Watsco, Inc. shareholders - basic

108,690

78,359

76,574

Class B Common Stock

Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]

Earnings allocated to Watsco, Inc. shareholders - basic

$ 9,969

$ 7,319

$ 7,831

[1]	Quarterly and year-to-date earnings per share are calculated on an individual basis; therefore, the sum of earnings per share amounts for the quarters may not equal earnings per share amounts for the year.
[2]	On October 31, 2012, we paid a special dividend of $5.00 per share of Common and Class B common stock that resulted in a $0.37 per share and $0.33 per share reduction in diluted earnings per share for the quarter and year ended December 31, 2012, respectively.

Earnings Per Share - Additional Information (Detail)	12 Months Ended
Earnings Per Share - Additional Information (Detail)	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Earnings Per Share [Line Items]
Diluted earnings per share, excluded shares having anti-dilutive effect	1,066	17,492	33,511
Class B Common Stock
Earnings Per Share [Line Items]
Convertible Class B common stock outstanding	2,704,832	2,706,338	2,846,334

Securities (including those issuable pursuant to contingent stock agreements) that could potentially dilute basic earnings per share (EPS) or earnings per unit (EPU) in the future that were not included in the computation of diluted EPS or EPU because to do so would increase EPS or EPU amounts or decrease loss per share or unit amounts for the period presented.

+ References+ Details

Schedule of Tax Effects Allocated to Each Component of Other Comprehensive (Loss) Income (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Components Of Other Comprehensive Income Loss [Line Items]
Foreign currency translation adjustment	$ (16,365)	$ (3,191)
Unrealized gain on available-for-sale securities	39	63	6
Income tax expense	(15)	(28)	(3)
Unrealized gain on available-for-sale securities, net of tax	24	35	3
Unrealized gain on derivative instrument			384
Income tax expense			(146)
Unrealized gain on derivative instrument, net of tax			238
Other comprehensive (loss) income	$ (16,341)	$ (3,156)	$ 241

+ References+ Details

Schedule of Accumulated Other Comprehensive Loss (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance, Foreign currency translation adjustment	$ (1,785)
Current period other comprehensive loss	(9,396)	(1,785)
Ending balance, Foreign currency translation adjustment	(11,181)	(1,785)
Beginning balance, Available-for-sale securities	(317)	(352)	(355)
Current period other comprehensive income	24	35	3
Ending balance, Available-for-sale securities	(293)	(317)	(352)
Beginning balance, Derivative instrument			(238)
Current period other comprehensive income			238
Accumulated other comprehensive loss, net of tax	$ (11,474)	$ (2,102)	$ (352)

Accumulated change, net of tax, in accumulated gains and losses from derivative instruments designated and qualifying as the effective portion of cash flow hedges. Includes an entity's share of an equity investee's Increase or Decrease in deferred hedging gains or losses.

+ References+ Details

Accumulated adjustment, net of tax, that results from the process of translating subsidiary financial statements and foreign equity investments into the reporting currency from the functional currency of the reporting entity, net of reclassification of realized foreign currency translation gains or losses.

+ References+ Details

Accumulated change in equity from transactions and other events and circumstances from non-owner sources, net of tax effect, at period end. Excludes Net Income (Loss), and accumulated changes in equity from transactions resulting from investments by owners and distributions to owners. Includes foreign currency translation items, certain pension adjustments, unrealized gains and losses on certain investments in debt and equity securities, other than temporary impairment (OTTI) losses related to factors other than credit losses on available-for-sale and held-to-maturity debt securities that an entity does not intend to sell and it is not more likely than not that the entity will be required to sell before recovery of the amortized cost basis, as well as changes in the fair value of derivatives related to the effective portion of a designated cash flow hedge.

+ References+ Details

Amount after tax, before reclassification adjustments of gain (loss) on foreign currency translation adjustments, foreign currency transactions designated and effective as economic hedges of a net investment in a foreign entity and intra-entity foreign currency transactions that are of a long-term-investment nature.

+ References+ Details

+ References+ Details

Supplier Concentration - Additional Information (Detail)	12 Months Ended
	Dec. 31, 2013 Vendor	Dec. 31, 2012	Dec. 31, 2011
Concentration Risk [Line Items]
Percentage of purchases from key suppliers	73.00%	72.00%	71.00%
Number of key suppliers	4
Carrier \| Supplier Concentration Risk
Concentration Risk [Line Items]
Percentage of purchases from key suppliers	59.00%	57.00%	54.00%

Property and Equipment, Net (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 135,608	$ 124,969
Accumulated depreciation and amortization	(90,190)	(82,127)
Property and equipment, net	45,418	42,842
Land
Property, Plant and Equipment [Line Items]
Property and equipment, gross	1,131	1,131
Buildings and Improvements
Property, Plant and Equipment [Line Items]
Property and equipment, gross	49,942	48,457
Machinery, vehicles and equipment
Property, Plant and Equipment [Line Items]
Property and equipment, gross	64,012	57,130
Furniture and fixtures
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 20,523	$ 18,251

Debt - Additional Information (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended		1 Months Ended				12 Months Ended	1 Months Ended		12 Months Ended	1 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Jul. 31, 2013 Minimum	Jul. 31, 2013 Maximum	Jul. 31, 2013 Before Extension	Jul. 31, 2013 After Extension	Dec. 31, 2013 Scenario 1	Jul. 31, 2013 Scenario 1 Minimum	Jul. 31, 2013 Scenario 1 Maximum	Dec. 31, 2013 Scenario 2	Jul. 31, 2013 Scenario 2 Minimum	Jul. 31, 2013 Scenario 2 Maximum	Dec. 31, 2013 Swingline Subfacility	Dec. 31, 2013 Letter of Credit	Dec. 31, 2013 Multicurrency borrowing sublimit
Debt Instrument [Line Items]
Revolving credit agreement maximum borrowing capacity	$ 500,000												$ 65,000	$ 50,000	$ 75,000
Revolving credit agreement maturity date					Apr. 27, 2017	Jul. 01, 2018
Basis spread							1.25%	0.875%	2.50%	0.25%	0.00%	1.50%
Commitment fee percentage on unused portion of the commitment	0.175%		0.125%	0.35%
Outstanding amount under revolving credit agreement	$ 230,044	$ 316,182

The carrying value as of the balance sheet date of the noncurrent portion of long-term obligations drawn from a line of credit, which is a bank's commitment to make loans up to a specific amount. Examples of items that might be included in the application of this element may consist of letters of credit, standby letters of credit, and revolving credit arrangements, under which borrowings can be made up to a maximum amount as of any point in time conditional on satisfaction of specified terms before, as of and after the date of drawdowns on the line. Includes short-term obligations that would normally be classified as current liabilities but for which (a) postbalance sheet date issuance of a long term obligation to refinance the short term obligation on a long term basis, or (b) the enterprise has entered into a financing agreement that clearly permits the enterprise to refinance the short-term obligation on a long term basis and the following conditions are met (1) the agreement does not expire within 1 year and is not cancelable by the lender except for violation of an objectively determinable provision, (2) no violation exists at the BS date, and (3) the lender has entered into the financing agreement is expected to be financially capable of honoring the agreement.

+ References+ Details

Components of Income Tax Expense (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Components Of Income Tax Expense Benefit [Line Items]
U.S. Federal	$ 62,616	$ 50,919	$ 50,197
State	9,234	6,245	6,338
Foreign	5,810	5,478	315
Income tax expense	77,660	62,642	56,850
Current	69,071	55,918	48,540
Deferred	8,589	6,724	8,310
Income tax expense	$ 77,660	$ 62,642	$ 56,850

Amount of current federal tax expense (benefit) pertaining to income (loss) from continuing operations.

+ References+ Details

Amount of current income tax expense (benefit) pertaining to taxable income (loss) from continuing operations.

+ References+ Details

Amount of current state and local tax expense (benefit) pertaining to income (loss) from continuing operations.

+ References+ Details

Amount of deferred income tax expense (benefit) pertaining to income (loss) from continuing operations.

+ References+ Details

Income Taxes - Additional Information (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Income Taxes [Line Items]
Percentage of income attributable to wholly-owned operations and investments for which income tax expense and effective tax rate calculated	100.00%
Undistributed earnings of foreign subsidiaries	$ 55,000
Valuation allowance	75	391
State and other net operating loss carry forwards	7,117
Gross unrecognized tax benefits	3,135	2,474	2,424	1,889
Unrecognized tax benefits that, if recognized, would affect the effective tax rate	2,038	1,609
Estimated accrued interest and penalties resulting from unrecognized tax benefits	$ 630	$ 583
Minimum
Income Taxes [Line Items]
State and other net operating loss carry forwards expiration date	2014
Maximum
Income Taxes [Line Items]
State and other net operating loss carry forwards expiration date	2026

Components Of Deferred Income Tax Assets And Liabilities [Line Items]

Amount of undistributed earnings of foreign subsidiaries intended to be permanently reinvested outside the country of domicile.

+ References+ Details

Reconciliation of Effective Income Tax Rate (Detail)	12 Months Ended
Reconciliation of Effective Income Tax Rate (Detail)	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Reconciliation of Effective Income Tax Rate [Line Items]
U.S. federal statutory rate	35.00%	35.00%	35.00%
State income taxes, net of federal benefit and other	3.30%	2.50%	3.10%
Tax effects on foreign income	(1.30%)	(0.80%)	(0.10%)
Effective income tax rate attributable to Watsco, Inc.	37.00%	36.70%	38.00%
Taxes attributable to noncontrolling interest	(7.70%)	(8.30%)	(8.80%)
Effective income tax rate	29.30%	28.40%	29.20%

Significant Components of Current and Long-Term Deferred Tax Assets and Liabilities (Detail) (USD $)
In Thousands, unless otherwise specified

Dec. 31, 2013

Dec. 31, 2012

Capitalized inventory costs and inventory reserves

$ 2,883

$ 2,386

Self-insurance reserves

1,093

1,039

Allowance for doubtful accounts

882

1,084

Other current deferred tax assets

1,539

1,215

Total current deferred tax assets

6,397

^[1]

5,724

^[1]

Share-based compensation

17,455

13,911

Other long-term deferred tax assets

909

797

Net operating loss carryforwards

283

609

Total long-term deferred tax assets

18,647

15,317

Valuation allowance

(75)

(391)

Total long-term deferred tax assets

18,572

^[2]

14,926

^[2]

Other current deferred tax liabilities

(1,304)

(36)

Total current deferred tax liabilities

(1,304)

^[1]

(36)

^[1]

Deductible goodwill

(76,519)

(66,636)

Depreciation

(2,873)

(3,100)

Other long-term deferred tax liabilities

(2,556)

(1,322)

Total long-term deferred tax liabilities

(81,948)

^[2]

(71,058)

^[2]

Net deferred tax liabilities

$ (58,283)

$ (50,444)

[1]	Current deferred tax assets and liabilities have been included in the consolidated balance sheets in other current assets.
[2]	Long-term deferred tax assets and liabilities have been included in the consolidated balance sheets in deferred income taxes and other liabilities.

Changes in Gross Unrecognized Tax Benefits (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Income Tax Contingency [Line Items]
Beginning balance	$ 2,474	$ 2,424	$ 1,889
Additions based on tax positions related to the current year	673	416	542
Reductions due to lapse of applicable statute of limitations	(12)	(366)	(7)
Ending balance	$ 3,135	$ 2,474	$ 2,424

Share-Based Compensation and Benefit Plans - Additional Information (Detail) (USD $) In Thousands, except Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2013 Age	Dec. 31, 2012	Dec. 31, 2011
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percent of market price that share-based compensation awards are granted at	100.00%
Fair value of non-vested stock that vested			$ 672
Total intrinsic value of stock options exercised	2,753	5,641	4,724
Cash received from Common stock issued	1,554	3,790	4,530
Tax benefits realized from stock option exercises	1,557	1,245	916
Age of Chief Executive Officer when non-vested (restricted) stock vests	82
Shares of non-vested (restricted) stock obligated to issue in connection with incentive compensation agreements	177,025
Common stock contribution to 401(k) plan	1,689	1,772	1,718
Class B Common Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares delivered as payment for tax withholdings related to stock option exercises, shares	13,227		7,616
Shares delivered as payment for tax withholdings related to stock option exercises, market value	1,227		437
Employee Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Aggregate shares of common stock that may be granted	1,500,000
Shares reserved for future grant	525,152
Number of days under which shares to be purchased by employee on such available	90 days
Discount allowed to employees to purchase share	5.00%
Shares purchased under ESPP	5,844	6,753	8,520
Average price of the shares purchased by employees	$ 79.46	$ 68.76	$ 59.44
Additional shares issued that resulted from cash dividends investment in common stock	1,899	15,411	5,097
Net proceeds from shares issued under ESPP	631	1,522	829
401(k) Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock issued to profit sharing retirement plan, shares	22,551	26,991	27,240
Common stock contribution to 401(k) plan	1,689	1,772	1,718
2001 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Aggregate shares of common stock that may be granted	4,000,000
Shares reserved for future grant	259,446
Contractual term of stock option awards	5 years
2001 Plan \| Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Years in which options under 2001 Plan vest	2 years
2001 Plan \| Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Years in which options under 2001 Plan vest	4 years
2001 Plan \| Common Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares awarded under plan	1,987,912
2001 Plan \| Class B Common Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares awarded under plan	1,752,642
Non-Vested (Restricted) Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted-average grant date fair value of non-vested (restricted) stock	$ 80.21	$ 69.66	$ 63.87
Shares withheld as payment for tax withholdings related to share based compensation, shares			2,527
Shares withheld as payment for tax withholdings related to share based compensation, market value			180
Unrecognized share-based compensation expense	72,870
Weighted-average period for recognition of share-based compensation expense, in years	9 years 8 months 12 days
Non-Vested (Restricted) Stock \| Chief Executive Officer
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized share-based compensation expense	53,000
Weighted-average period for recognition of share-based compensation expense, in years	9 years
Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized share-based compensation expense	848
Weighted-average period for recognition of share-based compensation expense, in years	1 year 7 months 6 days
Fair value of stock options vested	822	315	475
Stock Options \| Common Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares withheld as payment for tax withholdings related to share based compensation, shares	4,749	29,987
Shares withheld as payment for tax withholdings related to share based compensation, market value	$ 450	$ 2,229

Summary of Stock Option Activity (Detail) (USD $) In Thousands, except Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2013
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options, Outstanding beginning balance	324,150
Options, Granted	30,000
Options, Exercised	(79,450)
Options, Forfeited	(7,000)
Options, Expired
Options, Outstanding ending balance	267,700
Options, Exercisable	50,784
Weighted-Average Exercise Price, Outstanding beginning balance	$ 56.21
Weighted-Average Exercise Price, Granted	$ 82.32
Weighted-Average Exercise Price, Exercised	$ 34.65
Weighted-Average Exercise Price, Forfeited	$ 65.31
Weighted-Average Exercise Price, Expired
Weighted-Average Exercise Price, Outstanding ending balance	$ 65.30
Weighted-Average Exercise Price, Exercisable	$ 60.13
Weighted-Average Remaining Contractual Term (in years), Outstanding	2 years 7 months 24 days
Weighted-Average Remaining Contractual Term (in years), Exercisable	2 years 1 month 13 days
Aggregate Intrinsic Value, Outstanding	$ 8,234
Aggregate Intrinsic Value, Exercisable	$ 1,824

Summary of Non-Vested (Restricted) Stock Activity (Detail) (Non-Vested (Restricted) Stock, USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Non-Vested (Restricted) Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares, Non-vested beginning balance	2,373,249
Shares, Granted	124,043
Shares, Forfeited	(10,000)
Shares, Non-vested ending balance	2,487,292	2,373,249
Weighted-Average Grant Date Fair Value, Non-vested beginning balance	$ 38.75
Weighted-Average Grant Date Fair Value, Granted	$ 80.21	$ 69.66	$ 63.87
Weighted-Average Grant Date Fair Value, Forfeited	$ 68.36
Weighted-Average Grant Date Fair Value, Non-vested ending balance	$ 40.70	$ 38.75

Weighted-Average Assumptions Used for Stock Options Granted (Detail) (USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected term in years	4 years 3 months	4 years 3 months	4 years 3 months
Risk-free interest rate	0.82%	0.57%	1.12%
Expected volatility	24.56%	31.40%	32.59%
Expected dividend yield	2.20%	3.49%	3.48%
Grant date fair value	$ 13.33	$ 12.90	$ 12.31

Share-Based Compensation Expense (Detail) (USD $)	12 Months Ended
Share-Based Compensation Expense (Detail) (USD $)	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense	$ 9,967	$ 7,939	$ 6,663
Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense	884	846	612
Non-Vested (Restricted) Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense	$ 9,083	$ 7,093	$ 6,051

Acquisitions - Additional Information (Detail) (USD $) In Thousands, except Share data, unless otherwise specified	0 Months Ended	1 Months Ended	12 Months Ended		0 Months Ended		0 Months Ended					0 Months Ended			12 Months Ended
	Apr. 29, 2011 Noncontrolling Interest	Jul. 02, 2012 Carrier Enterprise I	Dec. 31, 2013 Carrier Enterprise I	Jul. 01, 2009 Carrier Enterprise I	Apr. 27, 2012 Carrier Enterprise III Location	Dec. 31, 2012 Carrier Enterprise III	Apr. 27, 2012 Carrier Enterprise III Customer Relationships	Apr. 27, 2012 UTC Canada	Apr. 29, 2011 Carrier Enterprise II Location	Dec. 31, 2013 Carrier Enterprise II	Dec. 31, 2011 Carrier Enterprise II	Apr. 29, 2011 Carrier Enterprise II Difference Between Fair Value And Carrying Value	Apr. 29, 2011 Carrier Enterprise II Customer Relationships	Jul. 29, 2011 Carrier Enterprise Mexico Location	Dec. 31, 2010 Carrier Enterprise Mexico
Business Acquisition [Line Items]
Controlling interest				60.00%	60.00%				60.00%	60.00%				60.00%
Non-controlling interest, ownership percentage				40.00%	40.00%				40.00%			40.00%
Option to acquire interests, percentage			10.00%	10.00%
Percentage of additional ownership acquired		10.00%
Cash consideration		$ 51,881			$ 80,489				$ 34,460					$ 9,000
Option to purchase additional interest, date			2014-07-01
Purchase price					173,739				49,229
Number of locations contributed to joint venture by non-controlling interest					35				28					7
Number of locations contributed to joint venture by controlling interest									14
Consideration for contribution of locations in joint venture	7,708								14,769			7,061
Goodwill and intangibles, purchase price allocation					216,463				32,957
Fair value of acquired intangible assets					151,172				20,600
Identified intangible assets, trade names and distribution rights					95,515				13,400
Identified intangible assets, customer relationships							55,657						7,200
Finite-lived intangible assets, average useful life, in years							15 years						12 years
Period available for tax deductions related to acquired goodwill (in years)									15 years
Revenues															75,000
Shares issued to UTC Canada Corporation, an affiliate of Carrier Corporation								1,250,000
Fair value of shares issued to UTC Canada Corporation								93,250
Percent of tax basis of acquired goodwill amortized at a rate of 7%					75.00%
Goodwill amortization rate					7.00%
Transaction costs included in selling, general and administrative expenses						$ 1,200					$ 1,200

Purchase Price Allocation (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011	Apr. 27, 2012 Carrier Enterprise III	Apr. 29, 2011 Carrier Enterprise II
Business Acquisition [Line Items]
Cash				$ 10	$ 5
Accounts receivable				46,718	24,300
Inventories				55,024	39,003
Other current assets				481	773
Property and equipment				2,517	4,402
Goodwill	392,610	397,262	319,440	65,291	12,357
Intangible assets				151,172	20,600
Other assets				978	202
Accounts payable and accrued expenses				(44,208)	(22,894)
Noncontrolling interest				(104,244)	(29,519)
Total purchase price				$ 173,739	$ 49,229

Unaudited Pro Forma Financial Information from Joint Venture (Detail) (USD $) In Thousands, except Per Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011
Business Acquisition, Pro Forma Information [Line Items]
Revenues	$ 3,526,621	$ 3,404,381
Net income	156,728	159,147
Less: net income attributable to noncontrolling interest	54,153	60,380
Net income attributable to Watsco, Inc.	$ 102,575	$ 98,767
Diluted earnings per share for Common and Class B common stock	$ 2.64	$ 2.89

Changes in Carrying Amount of Goodwill (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Goodwill And Other Intangible Assets [Line Items]
Goodwill, Beginning Balance	$ 397,262	$ 319,440
Acquired goodwill		77,829
Foreign currency translation adjustment	(4,652)	(7)
Goodwill, Ending Balance	$ 392,610	$ 397,262

Other Intangible Assets (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Intangible Assets [Line Items]
Indefinite lived intangible assets - Trade names, trademarks and distribution rights	$ 138,599	$ 144,683
Finite lived intangible assets:
Accumulated amortization	(17,140)	(11,111)
Finite lived intangible assets, net	65,244	74,818
Intangible assets, net	203,843	219,501
Customer Relationships
Finite lived intangible assets:
Finite lived intangible assets	80,865	84,410
Customer Relationships \| Minimum
Intangible Assets [Line Items]
Finite lived intangible assets, Estimated Useful lives, years	10 years
Customer Relationships \| Maximum
Intangible Assets [Line Items]
Finite lived intangible assets, Estimated Useful lives, years	15 years
Trade Names
Intangible Assets [Line Items]
Finite lived intangible assets, Estimated Useful lives, years	10 years
Finite lived intangible assets:
Finite lived intangible assets	1,150	1,150
Noncompete Agreements
Intangible Assets [Line Items]
Finite lived intangible assets, Estimated Useful lives, years	7 years
Finite lived intangible assets:
Finite lived intangible assets	$ 369	$ 369

Goodwill and Other Intangible Assets - Additional Information (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Goodwill And Intangible Assets [Line Items]
Amortization expense related to finite lived intangible assets	$ 6,029	$ 4,925	$ 2,361
Amortization of finite lived intangible assets for 2014	5,900
Amortization of finite lived intangible assets for 2015	5,900
Amortization of finite lived intangible assets for 2016	5,900
Amortization of finite lived intangible assets for 2017	5,900
Amortization of finite lived intangible assets for 2018	$ 5,900

Shareholders' Equity - Additional Information (Detail) (USD $) In Thousands, except Share data, unless otherwise specified				12 Months Ended		12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Sep. 30, 1999	Dec. 31, 2013 Common Stock	Dec. 31, 2012 Common Stock	Dec. 31, 2013 Class B Common Stock	Dec. 31, 2012 Class B Common Stock
Stockholders Equity Note [Line Items]
Amount of votes common stock is entitled				One		Ten
Percentage of Board entitled to elect				25.00%
Preferred stock outstanding	0	0
Number of shares authorized to be repurchased			7,500,000
Treasury stock, shares				6,322,650	6,322,650	48,263	48,263
Cost of repurchased shares	$ 114,425	$ 114,425
Remaining number of shares authorized to be repurchased	1,129,087

Financial Instruments - Additional Information (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended						12 Months Ended
	Dec. 31, 2011	Dec. 31, 2013	Dec. 31, 2013 Standby Letters of Credit	Dec. 31, 2012 Standby Letters of Credit	Dec. 31, 2013 Performance Bonds	Dec. 31, 2012 Performance Bonds	Dec. 31, 2013 Foreign Exchange Forward Not Designated as Hedging Instrument	Dec. 31, 2012 Foreign Exchange Forward Not Designated as Hedging Instrument	Dec. 31, 2011 Interest Rate Swap	Dec. 31, 2013 Interest Rate Swap	Oct. 31, 2011 Interest Rate Swap
Financial Instrument [Line Items]
Changes in fair value foreign currency forward contracts							$ 315	$ (197)
Interest rate swap agreement with notional amount							26,000				10,000
Contract expiring terms							2014-03
Interest rate swap agreement maturity period									2011-10
Fixed interest rate										5.07%
Reclassification reflected from net change in other comprehensive loss	244
Derivative financial instruments income tax benefit	155
Fair value of contingent liability			2,681	3,098	800	300
Estimated fair value of contingent liability		$ 0

Assets and Liabilities Carried at Fair Value Measured on Recurring Basis (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Other assets
Assets:
Available-for-sale securities	$ 265	$ 226
Other Current Assets
Assets:
Derivative financial instruments Other current assets	118
Accrued expenses and other current liabilities
Liabilities:
Derivative financial instruments		197
Fair Value Measurements, Level 1 \| Other assets
Assets:
Available-for-sale securities	265	226
Fair Value Measurements, Level 2 \| Other Current Assets
Assets:
Derivative financial instruments Other current assets	118
Fair Value Measurements, Level 2 \| Accrued expenses and other current liabilities
Liabilities:
Derivative financial instruments		$ 197

Commitments and Contingencies - Additional Information (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Commitments and Contingencies Disclosure [Line Items]
Self-insurance reserves	$ 5,582	$ 4,844
Loss exposed due to involvement with Variable Interest Entities	4,400
Operating leases maximum maturity date	2023
Rental expense	79,585	76,547	70,933
Non-cancelable purchase obligations for goods	7,500
Carrier and Its Affiliates
Commitments and Contingencies Disclosure [Line Items]
Non-cancelable purchase obligations for goods	$ 5,600

Minimum amount to be expended to satisfy the terms of arrangements in which the entity has agreed to expend funds to procure goods or services, excluding long-term purchase commitments or unconditional purchase obligations.

+ References+ Details

Future Minimum Lease Payments under Non-Cancelable Operating Leases (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013
Operating Leases Future Minimum Payments Due [Line Items]
2014	$ 64,967
2015	54,508
2016	43,322
2017	28,356
2018	14,006
Thereafter	8,388
Total minimum payments	$ 213,547

Related Party Transactions - Additional Information (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Related Party Transaction [Line Items]
Percentage of inventory purchases from Carrier and its affiliates	59.00%	57.00%	54.00%
Revenues from sales to Carrier Corporation and its affiliates	$ 30,819	$ 32,961	$ 23,710
Fees related to Transactional Services Agreements with Carrier Corporation		1,798	1,139
Carrier and Its Affiliates
Related Party Transaction [Line Items]
Amount payable to related parties, net of receivables	(53,000)	(62,000)
Carrier
Related Party Transaction [Line Items]
Amount payable to related parties, net of receivables		(25)
Carrier and UTC Canada
Related Party Transaction [Line Items]
Amount payable to related parties, net of receivables		$ 29,637

Amount of revenue, fees and commissions earned from transactions between (a) a parent company and its subsidiaries; (b) subsidiaries of a common parent; (c) an entity and trusts for the benefit of employees, for example, but not limited to, pension and profit-sharing trusts that are managed by or under the trusteeship of the entity's management; (d) an entity and its principal, owners, management, or members of their immediate families; and (e) affiliates.

+ References+ Details

Revenues and Long-Lived Assets by Geographical Area (Detail) (USD $)
In Thousands, unless otherwise specified

3 Months Ended

12 Months Ended

Dec. 31, 2013

Sep. 30, 2013

Jun. 30, 2013

Mar. 31, 2013

Dec. 31, 2012

Sep. 30, 2012

Jun. 30, 2012

Mar. 31, 2012

Dec. 31, 2013

Dec. 31, 2012

Dec. 31, 2011

$ 827,352

^[1]

$ 1,081,893

^[1]

$ 1,120,452

^[1]

$ 713,633

^[1]

$ 765,540

^[1]

$ 1,020,859

^[1]

$ 1,011,801

^[1]

$ 633,512

^[1]

$ 3,743,330

^[1]

$ 3,431,712

^[1]

$ 2,977,759

641,871

659,605

641,871

659,605

UNITED STATES

3,325,114

3,087,256

2,938,907

429,202

429,153

429,202

429,153

CANADA

318,165

240,254

207,340

225,076

207,340

225,076

MEXICO

100,051

104,202

38,852

Quarterly Financial Data [Line Items]

$ 5,329

$ 5,376

$ 5,329

$ 5,376

[1]

Supplemental Cash Flow Information (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Cash Flow Supplemental Disclosures [Line Items]
Interest paid	$ 5,334	$ 2,802	$ 1,854
Income taxes net of refunds	73,168	46,819	45,137
Carrier Enterprise III
Cash Flow Supplemental Disclosures [Line Items]
Common stock issued for Carrier Enterprise III		93,250
Carrier Enterprise II
Cash Flow Supplemental Disclosures [Line Items]
Net assets of locations contributed to Carrier Enterprise II			$ 14,769

Selected Quarterly Financial Data (Detail) (USD $)
In Thousands, except Per Share data, unless otherwise specified

3 Months Ended

12 Months Ended

Dec. 31, 2013

Sep. 30, 2013

Jun. 30, 2013

Mar. 31, 2013

Dec. 31, 2012

Sep. 30, 2012

Jun. 30, 2012

Mar. 31, 2012

Dec. 31, 2013

Dec. 31, 2012

Dec. 31, 2011

Net income attributable to Watsco, Inc.

$ 827,352

^[1]

$ 1,081,893

^[1]

$ 1,120,452

^[1]

$ 713,633

^[1]

$ 765,540

^[1]

$ 1,020,859

^[1]

$ 1,011,801

^[1]

$ 633,512

^[1]

$ 3,743,330

^[1]

$ 3,431,712

^[1]

$ 2,977,759

Gross profit

198,530

258,597

266,680

175,446

182,793

242,505

238,475

150,622

899,253

814,395

728,294

$ 17,321

$ 45,699

$ 51,318

$ 13,385

$ 14,760

$ 41,005

$ 39,103

$ 8,466

$ 127,723

$ 103,334

$ 90,450

Earnings per share for Common and Class B common stock :

Basic

$ 0.50

^[2]

$ 1.32

^[2]

$ 1.48

^[2]

$ 0.39

^[2]

$ 0.04

^[2],[3]

$ 1.19

^[2]

$ 1.15

^[2]

$ 0.23

^[2]

$ 3.69

^[2]

$ 2.70

^[2],[3]

$ 2.75

Diluted

$ 0.50

^[2]

$ 1.32

^[2]

$ 1.48

^[2]

$ 0.39

^[2]

$ 0.04

^[2],[3]

$ 1.19

^[2]

$ 1.15

^[2]

$ 0.23

^[2]

$ 3.68

^[2]

$ 2.70

^[2],[3]

$ 2.74

[1]	Sales of residential central air conditioners, heating equipment and parts and supplies are seasonal. Demand related to the residential central air conditioning replacement market is typically highest in the second and third quarters and demand for heating equipment is usually highest in the fourth quarter. Demand related to the new construction sectors throughout most of the markets is fairly consistent during the year, except for dependence on housing completions and related weather and economic conditions.
[2]	Quarterly and year-to-date earnings per share are calculated on an individual basis; therefore, the sum of earnings per share amounts for the quarters may not equal earnings per share amounts for the year.
[3]	On October 31, 2012, we paid a special dividend of $5.00 per share of Common and Class B common stock that resulted in a $0.37 per share and $0.33 per share reduction in diluted earnings per share for the quarter and year ended December 31, 2012, respectively.

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

+ References+ Details

The amount of net income (loss) for the period available to each share of common stock or common unit outstanding during the reporting period and to each share or unit that would have been outstanding assuming the issuance of common shares or units for all dilutive potential common shares or units outstanding during the reporting period.

+ References+ Details

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.