Selling, general and administrative expenses

$ 3,944,540

^[1]

$ 3,743,330

^[1]

$ 3,431,712

Cost of sales

2,988,138

2,844,077

2,617,317

Gross profit

956,402

899,253

814,395

650,655

628,044

589,487

Operating income

305,747

271,209

224,908

Interest expense, net

5,206

5,830

4,665

Income before income taxes

300,541

265,379

220,243

Income taxes

91,839

77,660

62,642

Net income

208,702

187,719

157,601

Less: net income attributable to noncontrolling interest

57,315

59,996

54,267

Net income attributable to Watsco, Inc.

$ 151,387

$ 127,723

$ 103,334

Earnings per share for Common and Class B common stock:

Basic

$ 4.33

^[2]

$ 3.69

^[2]

$ 2.70

Diluted

$ 4.32

^[2]

$ 3.68

^[2]

$ 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.

Consolidated Statements of Comprehensive Income (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Net income	$ 208,702	$ 187,719	$ 157,601
Other comprehensive loss, net of tax
Foreign currency translation adjustment	(21,117)	(16,365)	(3,191)
Unrealized gain on cash flow hedging instruments arising during the period	280
Unrealized gain on available-for-sale securities arising during the period	1	24	35
Other comprehensive loss	(20,836)	(16,341)	(3,156)
Comprehensive income	187,866	171,378	154,445
Less: comprehensive income attributable to noncontrolling interest	48,752	53,027	52,861
Comprehensive income attributable to Watsco, Inc.	$ 139,114	$ 118,351	$ 101,584

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, 2014	Dec. 31, 2013
Current assets:
Cash and cash equivalents	$ 24,447	$ 19,478
Accounts receivable, net	434,234	399,565
Inventories	677,990	583,154
Other current assets	20,664	18,905
Total current assets	1,157,335	1,021,102
Property and equipment, net	53,480	45,418
Goodwill	387,311	392,610
Intangible assets, net	186,476	203,843
Other assets	6,465	6,558
Assets, Total	1,791,067	1,669,531
Current liabilities:
Current portion of other long-term obligations	169	107
Accounts payable	173,360	141,104
Accrued expenses and other current liabilities	113,493	102,295
Total current liabilities	287,022	243,506
Long-term obligations:
Borrowings under revolving credit agreement	303,199	230,044
Other long-term obligations, net of current portion	686	513
Total long-term obligations	303,885	230,557
Deferred income taxes and other liabilities	68,121	68,076
Commitments and contingencies
Watsco, Inc. shareholders' equity:
Preferred stock, $0.50 par value, 10,000,000 shares authorized; no shares issued	0	0
Paid-in capital	580,564	606,384
Accumulated other comprehensive loss, net of tax	(23,747)	(11,474)
Retained earnings	420,879	339,362
Treasury stock, at cost, 6,322,650 shares of Common stock and 48,263 shares of Class B common stock at both December 31, 2014 and 2013	(114,425)	(114,425)
Total Watsco, Inc. shareholders' equity	883,960	840,396
Noncontrolling interest	248,079	286,996
Total shareholders' equity	1,132,039	1,127,392
Total liabilities and shareholders' equity	1,791,067	1,669,531
Common Stock
Watsco, Inc. shareholders' equity:
Common stock, $0.50 par value	18,222	18,182
Class B Common Stock
Watsco, Inc. shareholders' equity:
Common stock, $0.50 par value	$ 2,467	$ 2,367

Consolidated Balance Sheets (Parenthetical) (USD $)	Dec. 31, 2014	Dec. 31, 2013
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	36,444,289	36,364,297
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	4,933,245	4,733,737
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, 2011	$ 1,001,710	$ 19,688	$ 493,519	$ (352)	$ 404,360	$ (114,425)	$ 198,920
Beginning balance (in shares) at Dec. 31, 2011		33,005,341
Net income	157,601				103,334		54,267
Other comprehensive 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	1,772	13	1,759
Common stock contribution to 401(k) plan (in shares)		26,991
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 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	1,689	11	1,678
Common stock contribution to 401(k) plan (in shares)		22,551
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
Net income	208,702				151,387		57,315
Other comprehensive loss	(20,836)			(12,273)			(8,563)
Issuances of non-vested (restricted) shares of common stock (in shares)		218,725
Issuances of non-vested (restricted) shares of common stock		109	(109)
Forfeitures of non-vested (restricted) shares of common stock (in shares)		(5,000)
Forfeitures of non-vested (restricted) shares of common stock		(2)	2
Common stock contribution to 401(k) plan	1,759	9	1,750
Common stock contribution to 401(k) plan (in shares)		18,309
Stock issuances from exercise of stock options and employee stock purchase plan (in shares)		73,948
Stock issuances from exercise of stock options and employee stock purchase plan	4,666	37	4,629
Retirement of common stock (in shares)		(26,482)
Retirement of common stock	(2,615)	(13)	(2,602)
Share-based compensation	12,006		12,006
Excess tax benefit from share-based compensation	1,828		1,828
Cash dividends declared and paid on Common and Class B common stock	(69,870)				(69,870)
Decrease in noncontrolling interest in Carrier Enterprise I	(87,735)		(43,324)				(44,411)
Distributions to noncontrolling interest	(43,258)						(43,258)
Ending balance at Dec. 31, 2014	$ 1,132,039	$ 20,689	$ 580,564	$ (23,747)	$ 420,879	$ (114,425)	$ 248,079
Ending balance (in shares) at Dec. 31, 2014		35,006,621

Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Cash flows from operating activities:
Net income	$ 208,702	$ 187,719	$ 157,601
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	17,927	17,706	15,911
Share-based compensation	11,473	9,967	7,939
Deferred income tax provision	289	8,589	6,724
Provision for doubtful accounts	2,609	961	1,826
Non-cash contribution to 401(k) plan	1,759	1,689	1,772
(Gain) loss on sale of property and equipment	(1,292)	(156)	103
Excess tax benefits from share-based compensation	(1,828)	(1,511)	(1,079)
Changes in operating assets and liabilities, net of effects of acquisitions:
Accounts receivable	(41,068)	(25,846)	(5,752)
Inventories	(98,741)	(40,575)	(26,652)
Accounts payable and other liabilities	45,242	(7,256)	11,873
Other, net	(92)	(1,018)	3,077
Net cash provided by operating activities	144,980	150,269	173,343
Cash flows from investing activities:
Capital expenditures	(21,512)	(14,580)	(12,317)
Proceeds from sale of property and equipment	2,388	323	504
Business acquisitions, net of cash acquired			(80,479)
Net cash used in investing activities	(19,124)	(14,257)	(92,292)
Cash flows from financing activities:
Purchase of additional ownership from noncontrolling interest	(87,735)		(51,881)
Dividends on Common and Class B common stock	(69,870)	(39,836)	(256,219)
Distributions to noncontrolling interest	(43,258)	(69,494)	(16,003)
Payment of fees related to revolving credit agreement	(381)	(458)	(2,116)
Net proceeds from (repayments of) other long-term obligations	235	602	(1)
Excess tax benefits from share-based compensation	1,828	1,511	1,079
Net proceeds from issuances of common stock	4,245	2,185	5,312
Net cash used in financing activities	(120,207)	(189,049)	(23,081)
Effect of foreign exchange rate changes on cash and cash equivalents	(680)	(1,255)	127
Net increase (decrease) in cash and cash equivalents	4,969	(54,292)	58,097
Cash and cash equivalents at beginning of year	19,478	73,770	15,673
Cash and cash equivalents at end of year	24,447	19,478	73,770
Previous Revolving Credit Facility
Cash flows from financing activities:
Net proceeds (repayments) under revolving credit agreement			(20,000)
Current Revolving Credit Facility
Cash flows from financing activities:
Net proceeds (repayments) under revolving credit agreement	$ 74,729	$ (83,559)	$ 316,748

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

12 Months Ended

Dec. 31, 2014

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization, Consolidation and Presentation

Watsco, Inc. and its subsidiaries (collectively, “Watsco,” or we, us or our) was incorporated in Florida in 1956 and is the largest distributor of air conditioning, heating and refrigeration equipment and related parts and supplies (“HVAC/R”) in the HVAC/R distribution industry in North America. At December 31, 2014, we operated from 572 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.

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

Foreign Currency Translation and Transactions

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.

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.

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, 2014 and 2013, the allowance for doubtful accounts totaled $5,461 and $5,737, 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, 2014 and 2013, we had $10,088 and $9,333, 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, 2014, 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, 2014, 2013 and 2012, was $19,754, $22,418 and $23,730, 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 included in selling, general and administrative expenses for the years ended December 31, 2014, 2013 and 2012, was $43,324, $39,395 and $37,676, 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 and Hedging Activity

We have used derivative instruments, including forward contracts and swaps, to manage our exposure to fluctuations in foreign currency exchange rates and interest rates. The use of these derivative instruments modifies the exposure of these risks with the intent to reduce the risk or cost to us. We use derivative instruments as risk management tools and not for trading purposes. All derivatives, whether designated as hedging relationships or not, are recorded on the balance sheet at fair value. Cash flows from derivative instruments are classified in the consolidated statements of cash flows in the same category as the cash flows from the items subject to the designated hedge or undesignated (economic) hedge relationships. The hedging designation may be classified as one of the following:

No Hedging Designation. The gain or loss on a derivative instrument not designated as an accounting hedging instrument is recognized in earnings.

Cash Flow Hedge. A hedge of a forecasted transaction or of the variability of cash flows to be received or paid related to a recognized asset or liability is considered a cash flow hedge. The effective portion of the change in the fair value of a derivative that is designated as a cash flow hedge is recorded in other comprehensive income and reclassified to earnings as a component of cost of sales in the period during which the hedged transaction affects earnings. Ineffective portions of changes in the fair value of cash flow hedges are recognized in earnings.

Fair Value Hedge. A hedge of a recognized asset or liability or an unrecognized firm commitment is considered a fair value hedge. Fair value hedges, both the effective and ineffective portions of the changes in the fair value of the derivative, along with the gain or loss on the hedged item that is attributable to the hedged risk, are recorded in earnings.

See Note 13 for additional information pertaining to derivative instruments.

New Accounting Pronouncements

Presentation of Unrecognized Tax Benefits

On January 1, 2014 we adopted guidance issued by the Financial Accounting Standards Board (“FASB”) 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. The adoption of this guidance did not have an impact on our consolidated financial statements.

Revenue Recognition

In May 2014, the FASB issued a standard on revenue recognition that provides a single, comprehensive revenue recognition model for all contracts with customers. The standard is principle-based and provides a five-step model to determine the measurement of revenue and timing of when it is recognized. The core principle is that a company will recognize revenue to reflect the transfer of goods or services to customers at an amount that the company expects to be entitled to in exchange for those goods or services. This standard is effective for our interim and annual reporting periods beginning after December 15, 2016 and allows for either full retrospective adoption or modified retrospective adoption. We will adopt this guidance on January 1, 2017, and are currently evaluating the 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, 2014

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,*	2014		2013		2012
Basic Earnings per Share:
Net income attributable to Watsco, Inc. shareholders	$	151,387	$	127,723	$	103,334
Less: distributed and undistributed earnings allocated to non-vested (restricted) common stock		11,444		9,064		17,656

Earnings allocated to Watsco, Inc. shareholders	$	139,943	$	118,659	$	85,678

Weighted-average common shares outstanding - Basic		32,308,073		32,195,598		31,680,187

Basic earnings per share for Common and Class B common stock	$	4.33	$	3.69	$	2.70

Allocation of earnings for Basic:
Common stock	$	128,214	$	108,690	$	78,359
Class B common stock		11,729		9,969		7,319

	$	139,943	$	118,659	$	85,678


Diluted Earnings per Share:
Net income attributable to Watsco, Inc. shareholders	$	151,387	$	127,723	$	103,334
Less: distributed and undistributed earnings allocated to non-vested (restricted) common stock		11,435		9,053		17,656

Earnings allocated to Watsco, Inc. shareholders	$	139,952	$	118,670	$	85,678

Weighted-average common shares outstanding - Basic		32,308,073		32,195,598		31,680,187
Effect of dilutive stock options		50,781		62,470		64,212

Weighted-average common shares outstanding - Diluted		32,358,854		32,258,068		31,744,399

Diluted earnings per share for Common and Class B common stock	$	4.32	$	3.68	$	2.70

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, 2014, 2013 and 2012, our outstanding Class B common stock was convertible into 2,707,725, 2,704,832 and 2,706,338 shares of our Common stock, respectively.

Diluted earnings per share excluded 9,984, 1,066 and 17,492 shares for the years ended December 31, 2014, 2013 and 2012, 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.

The entire disclosure for earnings per share.

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OTHER COMPREHENSIVE LOSS

12 Months Ended

Dec. 31, 2014

OTHER COMPREHENSIVE LOSS

3. OTHER COMPREHENSIVE LOSS

Other comprehensive loss consists of the foreign currency translation adjustment associated with our Canadian operations’ use of the Canadian dollar as their functional currency and changes in the unrealized gains on cash flow hedging instruments and available-for-sale securities. The tax effects allocated to each component of other comprehensive loss are as follows:


*Years Ended December 31,*	2014			2013			2012
Foreign currency translation adjustment	$	(21,117	)	$	(16,365	)	$	(3,191	)

Unrealized gain on cash flow hedging instruments		384			—			—
Income tax expense		(104	)		—			—

Unrealized gain on cash flow hedging instruments, net of tax		280			—			—


Unrealized gain on available-for-sale securities		1			39			63
Income tax expense		—			(15	)		(28	)

Unrealized gain on available-for-sale securities, net of tax		1			24			35


Other comprehensive loss	$	(20,836	)	$	(16,341	)	$	(3,156	)

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


*Years Ended December 31,*	2014			2013			2012
Foreign currency translation adjustment:
Beginning balance	$	(11,181	)	$	(1,785	)	$	—
Current period other comprehensive loss		(12,442	)		(9,396	)		(1,785	)

Ending balance		(23,623	)		(11,181	)		(1,785	)


Cash flow hedging instruments:
Beginning balance		—			—			—
Current period other comprehensive income		168			—			—
Less reclassification adjustments		—			—			—

Ending balance		168			—			—


Available-for-sale securities:
Beginning balance		(293	)		(317	)		(352	)
Current period other comprehensive income		1			24			35

Ending balance		(292	)		(293	)		(317	)


Accumulated other comprehensive loss, net of tax	$	(23,747	)	$	(11,474	)	$	(2,102	)

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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-Paragraph 1

-Subparagraph (SX 210.3-04)

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+ Details

SUPPLIER CONCENTRATION

12 Months Ended

Dec. 31, 2014

SUPPLIER CONCENTRATION

4. SUPPLIER CONCENTRATION

We have four key suppliers of HVAC/R equipment products. Purchases from these four suppliers comprised 76%, 73% and 72% of all purchases made in 2014, 2013 and 2012, respectively. Our largest supplier, Carrier and its affiliates, accounted for 61%, 59% and 57% of all purchases made in 2014, 2013 and 2012, respectively. See Note 16. A significant interruption by Carrier, or any of our other three 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.

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PROPERTY AND EQUIPMENT

12 Months Ended

Dec. 31, 2014

PROPERTY AND EQUIPMENT

5. PROPERTY AND EQUIPMENT

Property and equipment, net, consists of:


*December 31,*	2014			2013
Land	$	853		$	1,131
Buildings and improvements		58,915			49,942
Machinery, vehicles and equipment		68,953			64,012
Furniture and fixtures		21,486			20,523

		150,207			135,608
Accumulated depreciation and amortization		(96,727	)		(90,190	)

	$	53,480		$	45,418

Depreciation and amortization expense related to property and equipment included in selling, general and administrative expenses for the years ended December 31, 2014, 2013 and 2012, was $12,158, $11,677 and $10,986, 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.

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DEBT

12 Months Ended

Dec. 31, 2014

DEBT

6. DEBT

We maintain an unsecured, syndicated revolving credit agreement, which we use to fund seasonal working capital needs and other general corporate purposes, including acquisitions, dividends (if and as declared by our Board of Directors), stock repurchases and issuances of letters of credit. On June 25, 2014, we entered into an amendment to this credit agreement, which increased the borrowing capacity from $500,000 to $600,000, extended the maturity date from July 1, 2018 to July 1, 2019, increased the swingline subfacility from $65,000 to $90,000 and modified certain definitions. In addition to the swingline subfacility, included in the credit facility are a $50,000 letter of credit subfacility and a $75,000 multicurrency borrowing sublimit.

Borrowings under the 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, 2014), depending on 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, 2014), depending on 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, 2014).

At December 31, 2014 and 2013, $303,199 and $230,044, respectively, was outstanding under the revolving credit agreement. The revolving credit agreement contains customary affirmative and negative covenants, including financial covenants with respect to consolidated leverage and interest coverage ratios, and other customary restrictions. We believe we were in compliance with all such covenants at December 31, 2014.

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.

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INCOME TAXES

12 Months Ended

Dec. 31, 2014

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,*	2014		2013		2012
U.S. Federal	$	74,561	$	62,616	$	50,919
State		10,325		9,234		6,245
Foreign		6,953		5,810		5,478

	$	91,839	$	77,660	$	62,642


Current	$	91,550	$	69,071	$	55,918
Deferred		289		8,589		6,724

	$	91,839	$	77,660	$	62,642

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,*	2014			2013			2012
U.S. federal statutory rate		35.0	%		35.0	%		35.0	%
State income taxes, net of federal benefit and other		3.0			3.3			2.5
Tax effects on foreign income		(1.0	)		(1.3	)		(0.8	)

Effective income tax rate attributable to Watsco, Inc.		37.0			37.0			36.7
Taxes attributable to noncontrolling interest		(6.4	)		(7.7	)		(8.3	)

Effective income tax rate		30.6	%		29.3	%		28.4	%

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


*December 31,*	2014			2013
Current deferred tax assets:
Capitalized inventory costs and inventory reserves	$	3,262		$	2,883
Self-insurance reserves		759			1,093
Allowance for doubtful accounts		992			882
Other current deferred tax assets		1,588			1,539

Total current deferred tax assets (1)		6,601			6,397

Long-term deferred tax assets:
Share-based compensation		20,108			17,455
Other long-term deferred tax assets		746			909
Net operating loss carryforwards		221			283

		21,075			18,647
Valuation allowance		—			(75	)

Total long-term deferred tax assets (2)		21,075			18,572

Current deferred tax liabilities:
Other current deferred tax liabilities		(536	)		(1,304	)

Total current deferred tax liabilities (1)		(536	)		(1,304	)

Long-term deferred tax liabilities:
Deductible goodwill		(80,404	)		(76,519	)
Depreciation		(2,992	)		(2,873	)
Other long-term deferred tax liabilities		(1,320	)		(2,556	)

Total long-term deferred tax liabilities (2)		(84,716	)		(81,948	)

Net deferred tax liabilities	$	(57,576	)	$	(58,283	)

(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 $80,000 at December 31, 2014. It is not practicable to estimate the amount of tax that might be payable. Our intention is to indefinitely reinvest these earnings outside of the United States or to repatriate the earnings only when it is tax effective to do so.

Management has determined that no valuation allowance was necessary at December 31, 2014. A valuation allowance of $75 was recorded at December 31, 2013 to reduce the deferred tax assets to the amount that was more likely than not to be realized. At December 31, 2014, there were state and other net operating loss carryforwards of $7,231, which expire in varying amounts from 2015 through 2034. These amounts are available to offset future taxable income. There were no federal net operating loss carryforwards at December 31, 2014.

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 2011. For the majority of states, we are no longer subject to tax examinations for tax years prior to 2010.

As of December 31, 2014 and 2013, the total amount of gross unrecognized tax benefits (excluding the federal benefit received from state positions) was $3,719 and $3,135, respectively. Of these totals, $2,417 and $2,038, 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, 2014 and 2013, the cumulative amount of estimated accrued interest and penalties resulting from such unrecognized tax benefits was $729 and $630, 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, 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
Additions based on tax positions related to the current year		751
Reductions due to lapse of applicable statute of limitations		(167	)

Balance at December 31, 2014	$	3,719

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.

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SHARE-BASED COMPENSATION AND BENEFIT PLANS

12 Months Ended

Dec. 31, 2014

8. SHARE-BASED COMPENSATION AND BENEFIT PLANS

Share-Based Compensation Plans

We have two share-based compensation plans for employees. The 2014 Incentive Compensation Plan (the “2014 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 2014 Plan consist of non-qualified stock options and non-vested (restricted) stock.

Under the 2014 Plan, the number of shares of Common and Class B common stock available for issuance is (i) 2,000,000, plus (ii) any shares of Common stock or Class B common stock that remained available for grant in connection with awards under the Watsco, Inc. Amended and Restated 2001 Incentive Compensation Plan (the “2001 Plan”) on the date on which our shareholders approved the 2014 Plan plus (iii) shares underlying currently outstanding awards issued under the 2001 Plan, which shares become reissuable under the 2014 Plan to the extent that such underlying shares are not issued due to their forfeiture, expiration, termination or otherwise. As of December 31, 2014, 2,045,421 shares remained available for issuance under the 2014 Plan. A total of 27,450 shares of Common stock, net of cancellations, and 10,000 shares of Class B common stock, had been awarded under the 2014 Plan as of December 31, 2014. As of December 31, 2014, 2,007,971 shares of common stock were reserved for future grants under the 2014 Plan. Options under the 2014 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 2001 Plan expired during 2014; therefore, no additional options may be granted. There were 207,450 options to exercise common stock outstanding under the 2001 Plan at December 31, 2014. Options under the 2001 Plan vest over two to four years of service and have contractual terms of five years.

The following is a summary of stock option activity under the 2014 Plan and the 2001 Plan as of and for the year ended December 31, 2014:


	Options			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value
Options outstanding at December 31, 2013		267,700		$	65.30
Granted		50,000			97.34
Exercised		(64,000	)		58.53
Forfeited		(11,250	)		68.49
Expired		(1,000	)		60.40

Options outstanding at December 31, 2014		241,450		$	73.62		2.47	$	8,060

Options exercisable at December 31, 2014		82,533		$	62.69		1.46	$	3,657

The following is a summary of non-vested (restricted) stock activity as of and for the year ended December 31, 2014:


	Shares			Weighted- Average Grant Date Fair Value
Non-vested (restricted) stock outstanding at December 31, 2013		2,487,292		$	40.70
Granted		218,725			96.84
Vested		(57,300	)		45.71
Forfeited		(5,000	)		56.69

Non-vested (restricted) stock outstanding at December 31, 2014		2,643,717		$	45.21

The weighted-average grant date fair value of non-vested (restricted) stock granted during 2014, 2013 and 2012 was $96.84, $80.21 and $69.66, respectively. The fair value of non-vested (restricted) stock that vested during 2014 was $5,789. The tax benefits realized from non-vested (restricted) stock that vested during 2014 totaled $2,142. No non-vested (restricted) stock vested during 2013 or 2012.

During 2014, 21,028 shares of Common stock with an aggregate fair market value of $2,125 were withheld as payment in lieu of cash to satisfy tax withholding obligations in connection with the vesting of non-vested (restricted) stock. These shares were retired upon delivery.

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,*	2014			2013			2012
Expected term in years		4.25			4.25			4.25
Risk-free interest rate		1.35	%		0.82	%		0.57	%
Expected volatility		22.07	%		24.56	%		31.40	%
Expected dividend yield		1.69	%		2.20	%		3.49	%
Grant date fair value	$	15.75		$	13.33		$	12.90

Exercise of Stock Options

The total intrinsic value of stock options exercised during 2014, 2013 and 2012 was $3,746, $2,753 and $5,641, respectively. Cash received from Common stock issued as a result of stock options exercised during 2014, 2013 and 2012 was $3,324, $1,554 and $3,790, respectively. During 2014, 2013 and 2012, 5,454 shares of Class B common stock with an aggregate fair market value of $490, 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, 13,227 shares of common stock with an aggregate fair market value of $1,227 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 $936, $1,557 and $1,245, for the years ended December 31, 2014, 2013 and 2012, respectively.

Share-Based Compensation Expense

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


*Years Ended December 31,*	2014		2013		2012
Stock options	$	801	$	884	$	846
Non-vested (restricted) stock		10,672		9,083		7,093

Share-based compensation expense	$	11,473	$	9,967	$	7,939

At December 31, 2014, there was $825 of unrecognized pre-tax compensation expense related to stock options granted under the 2014 Plan and 2001 Plan, which is expected to be recognized over a weighted-average period of approximately 1.7 years. The total fair value of stock options that vested during 2014, 2013 and 2012 was $1,145, $822 and $315, respectively.

At December 31, 2014, there was $76,971 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 9.3 years, of which, approximately $57,000 is related to awards granted to our Chief Executive Officer (“CEO”), which vest in approximately eight 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, 2014, we were obligated to issue 102,479 shares of non-vested (restricted) stock in connection with our CEO’s 2014 incentive compensation agreement.

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 2014, 2013 and 2012, employees purchased 6,995, 5,844 and 6,753 shares of Common stock at an average price of $90.89, $79.46 and $68.76 per share, respectively. Cash dividends received by the ESPP were reinvested in Common stock and resulted in the issuance of 2,953, 1,899 and 15,411 additional shares during 2014, 2013 and 2012, respectively. We received net proceeds of $921, $631 and $1,522, respectively, during 2014, 2013 and 2012, for shares of our Common stock issued under the ESPP. At December 31, 2014, 515,204 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, 2014, 2013 and 2012, we issued 18,309, 22,551 and 26,991 shares of Common stock, respectively, to the plan, representing the Common stock discretionary matching contribution of $1,759, $1,689 and $1,772, 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.

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ACQUISITIONS

12 Months Ended

Dec. 31, 2014

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 States. From its inception until July 2, 2012, we owned 60% of the joint venture and Carrier owned 40%. We exercised an option to acquire an additional 10% ownership interest in Carrier Enterprise I on July 2, 2012 for cash consideration of $51,881. On July 1, 2014, we exercised our second option to acquire an additional 10% ownership interest in Carrier Enterprise I for cash consideration of $87,735, following which we have an 80% controlling interest in Carrier Enterprise I. Neither we nor Carrier has any remaining options to purchase additional ownership interests in Carrier Enterprise I or any of our other joint ventures with Carrier, which are described below.

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. We own 60% of the joint venture and Carrier owns 40%.

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. This joint venture, Carrier Enterprise Canada, L.P. (“Carrier Enterprise III”), operated 37 locations throughout Canada as of December 31, 2014. 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.

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

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


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

Total purchase price	$	173,739

The fair value of the noncontrolling interest was determined by applying a pro-rata value of the total invested capital adjusted for a discount for lack of control that market participants would consider when estimating the fair value of the noncontrolling interest.

The unaudited pro forma financial information, combining our results of operations with the operations of Carrier Enterprise III as if the joint venture had been formed on January 1, 2012, is as follows:


*Year ended December 31,*	2012
Revenues	$	3,526,621

Net income		156,728
Less: net income attributable to noncontrolling interest		54,153

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


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

The foregoing unaudited pro forma financial information is presented for informational purposes only. The unaudited pro forma financial information from the beginning of the period presented until the acquisition date includes adjustments to record income taxes related to our portion of 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 interest. This unaudited pro forma financial information does not include adjustments to add or remove certain corporate expenses of 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 date. 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 III as of the beginning of the period presented.

The results of operations of these acquired locations have been included in the consolidated financial statements from the date of acquisition of our controlling interest in Carrier Enterprise III.

Transaction costs

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

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, 2014

10. GOODWILL AND OTHER INTANGIBLE ASSETS

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


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

Balance at December 31, 2013		392,610
Foreign currency translation adjustment		(5,299	)

Balance at December 31, 2014	$	387,311

Other intangible assets are comprised of the following:

December 31,

Estimated
Useful Lives

2014

2013

Indefinite lived intangible assets - Trade names, trademarks and distribution rights

131,271

138,599

Finite lived intangible assets:

Customer relationships

10-15 years

76,595

80,865

Trade name

10 years

1,150

1,150

Non-compete agreements

7 years

369

369

Accumulated amortization

(22,909

)

(17,140

)

Finite lived intangible assets, net

55,205

65,244

186,476

203,843

Amortization expense related to finite lived intangible assets included in selling, general and administrative expenses for the years ended December 31, 2014, 2013 and 2012, was $5,769, $6,029 and $4,925, respectively. Amortization of finite lived intangible assets for 2015 through 2019 is expected to be approximately $5,600 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.

+ References+ Details

SHAREHOLDERS' EQUITY

12 Months Ended

Dec. 31, 2014

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, 2014 and 2013.

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 2014, 2013 or 2012. 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, 2014, 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, 2014

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, 2014 and 2013, 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.

Off-Balance Sheet Financial Instruments

At December 31, 2014 and 2013, we were contingently liable under standby letters of credit aggregating $2,662 and $2,681, 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, 2014 and 2013, we were contingently liable under various performance bonds aggregating approximately $2,300 and $800, 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.

DERIVATIVES

12 Months Ended

Dec. 31, 2014

DERIVATIVES

13. DERIVATIVES

We enter into foreign currency forward contracts to offset the earnings impact that foreign exchange rate fluctuations would otherwise have had on certain monetary liabilities that are denominated in nonfunctional currencies.

Cash Flow Hedging Instruments

We enter into foreign currency forward contracts that are designated as cash flow hedges. The settlement of these derivatives results in reclassifications from accumulated other comprehensive income to earnings in the period when the hedged transaction occurs. The maximum length of time over which we hedge our exposure to the variability in future cash flows for forecasted transactions is 12 months and, accordingly, at December 31, 2014, all of our open foreign currency forward contracts had maturities of one year or less. The total notional value of our foreign currency exchange contracts designated as cash flow hedges at December 31, 2014 was $23,000, and such contracts have varying terms expiring through May 2015.

The impact from foreign exchange derivative instruments designated in cash flow hedging relationships were as follows:


*Years Ended December 31,*	2014		2013
Gain recorded in other comprehensive loss	$	384		—
Gain reclassified from accumulated other comprehensive loss into earnings		—		—

At December 31, 2014, we expect an estimated $384 pre-tax gain to be reclassified from accumulated other comprehensive loss into earnings to reflect the fixed prices obtained from foreign exchange hedging within the next 12 months.

Derivatives Not Designated as Hedging Instruments

We also enter in foreign currency forward contracts that are not designated as hedges and/or did not qualify for hedge accounting. These derivative instruments were effective economic hedges for all of the periods presented. The fair value gains and losses on these contracts are recognized in earnings as a component of selling, general and administrative expenses. The total notional value of our foreign currency exchange contracts not designated as hedging instruments at December 31, 2014 was $14,750, and such contracts have varying terms expiring through October 2015.

We recognized a gain (loss) of $142, $315 and $(197) in our consolidated statements of income from foreign currency forward contracts not designated as hedging instruments in 2014, 2013 and 2012, respectively.

The following table summarizes the fair value of derivative instruments, which consist solely of foreign currency forward contracts, included in other current assets in our consolidated balance sheets. See Note 14.


	Asset Derivatives				Liability Derivatives
*December 31,*	2014		2013		2014		2013
Derivatives designated as hedging instruments	$	384		—		—		—
Derivatives not designated as hedging instruments		260		118		—		—

Total derivative instruments	$	644	$	118		—		—

The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts.

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FAIR VALUE MEASUREMENTS

12 Months Ended

Dec. 31, 2014

FAIR VALUE MEASUREMENTS

14. 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, 2014 Using
	Balance Sheet Location	Total		Level 1		Level 2		Level 3
Assets:
Available-for-sale securities	Other assets	$	266	$	266		—		—
Derivative financial instruments	Other current assets	$	644		—	$	644		—

				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		—

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. See Note 13. Fair value is based on observable market inputs, such as forward rates in active markets; therefore, we classify these derivatives within Level 2 of the valuation hierarchy.

There were no transfers in or out of Level 1 and Level 2 during 2014 or 2013.

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, 2014

15. 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 $4,630 and $5,582 at December 31, 2014 and 2013, 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, 2014, 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 $4,100. 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, 2014, 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 2025. 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, 2014, future minimum payments under non-cancelable operating leases over each of the next five years and thereafter were as follows:


2015	$	67,307
2016		56,263
2017		41,174
2018		26,221
2019		12,849
Thereafter		13,525

Total minimum payments	$	217,339

Rental expense for the years ended December 31, 2014, 2013 and 2012, was $81,155, $79,585 and $76,547, respectively.

Purchase Obligations

At December 31, 2014, we were obligated under various non-cancelable purchase orders with Carrier and its affiliates for goods aggregating approximately $32,000.

RELATED PARTY TRANSACTIONS

The entire disclosure for commitments and contingencies.

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RELATED PARTY TRANSACTIONS

12 Months Ended

Dec. 31, 2014

16. RELATED PARTY TRANSACTIONS

Purchases from Carrier and its affiliates comprised 61%, 59% and 57% of all inventory purchases made during 2014, 2013 and 2012, respectively. At December 31, 2014 and 2013, approximately $61,000 and $53,000, 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 2014, 2013 and 2012 included $38,195, $30,819 and $32,961, 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 III entered into Transaction Service Agreements (“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.

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, 2014

17. INFORMATION ABOUT GEOGRAPHIC AREAS

Our operations are primarily within the United States, including Puerto Rico, Canada and Mexico. Products are also sold from the United States 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,*	2014		2013		2012
Revenues:
United States	$	3,525,176	$	3,325,114	$	3,087,256
Canada		300,289		318,165		240,254
Mexico		119,075		100,051		104,202

Total revenues	$	3,944,540	$	3,743,330	$	3,431,712


*December 31,*	2014		2013
Long-Lived Assets:
United States	$	434,910	$	429,202
Canada		187,064		207,340
Mexico		5,293		5,329

Total long-lived assets	$	627,267	$	641,871

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.

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

SUPPLEMENTAL CASH FLOW INFORMATION

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SUPPLEMENTAL CASH FLOW INFORMATION

12 Months Ended

Dec. 31, 2014

18. SUPPLEMENTAL CASH FLOW INFORMATION

Supplemental cash flow information was as follows:


*Years Ended December 31,*	2014		2013		2012
Interest paid	$	4,393	$	5,334	$	2,802
Income taxes net of refunds	$	82,850	$	73,168	$	46,819
Common stock issued for Carrier Enterprise III		—		—	$	93,250

SELECTED QUARTERLY FINANCIAL DATA

12 Months Ended

Dec. 31, 2014

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, 2014
Revenues (1)	$	762,568	$	1,170,186	$	1,134,999	$	876,787	$	3,944,540
Gross profit		188,069		279,273		274,765		214,295		956,402
Net income attributable to Watsco, Inc.	$	16,753	$	56,101	$	54,461	$	24,072	$	151,387

Earnings per share for Common and Class B common stock (2):
Basic	$	0.48	$	1.60	$	1.56	$	0.69	$	4.33

Diluted	$	0.48	$	1.60	$	1.56	$	0.69	$	4.32

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

(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.

Organization, Consolidation and Presentation

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.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

12 Months Ended

Dec. 31, 2014

Organization, Consolidation and Presentation

Foreign Currency Translation and Transactions

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

Derivative Instruments and Hedging Activity

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, 2014, 2013 and 2012, was $19,754, $22,418 and $23,730, 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 and Hedging Activity

No Hedging Designation. The gain or loss on a derivative instrument not designated as an accounting hedging instrument is recognized in earnings.

See Note 13 for additional information pertaining to derivative instruments.

New Accounting Pronouncements

New Accounting Pronouncements

Presentation of Unrecognized Tax Benefits

Revenue Recognition

Self-Insurance

Self-Insurance

EARNINGS PER SHARE (Tables)

12 Months Ended

Dec. 31, 2014

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,*	2014		2013		2012
Basic Earnings per Share:
Net income attributable to Watsco, Inc. shareholders	$	151,387	$	127,723	$	103,334
Less: distributed and undistributed earnings allocated to non-vested (restricted) common stock		11,444		9,064		17,656

Earnings allocated to Watsco, Inc. shareholders	$	139,943	$	118,659	$	85,678

Weighted-average common shares outstanding - Basic		32,308,073		32,195,598		31,680,187

Basic earnings per share for Common and Class B common stock	$	4.33	$	3.69	$	2.70

Allocation of earnings for Basic:
Common stock	$	128,214	$	108,690	$	78,359
Class B common stock		11,729		9,969		7,319

	$	139,943	$	118,659	$	85,678


Diluted Earnings per Share:
Net income attributable to Watsco, Inc. shareholders	$	151,387	$	127,723	$	103,334
Less: distributed and undistributed earnings allocated to non-vested (restricted) common stock		11,435		9,053		17,656

Earnings allocated to Watsco, Inc. shareholders	$	139,952	$	118,670	$	85,678

Weighted-average common shares outstanding - Basic		32,308,073		32,195,598		31,680,187
Effect of dilutive stock options		50,781		62,470		64,212

Weighted-average common shares outstanding - Diluted		32,358,854		32,258,068		31,744,399

Diluted earnings per share for Common and Class B common stock	$	4.32	$	3.68	$	2.70

OTHER COMPREHENSIVE LOSS (Tables)

12 Months Ended

Dec. 31, 2014

Schedule of Tax Effects Allocated to Each Component of Other Comprehensive Loss

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


*Years Ended December 31,*	2014			2013			2012
Foreign currency translation adjustment	$	(21,117	)	$	(16,365	)	$	(3,191	)

Unrealized gain on cash flow hedging instruments		384			—			—
Income tax expense		(104	)		—			—

Unrealized gain on cash flow hedging instruments, net of tax		280			—			—


Unrealized gain on available-for-sale securities		1			39			63
Income tax expense		—			(15	)		(28	)

Unrealized gain on available-for-sale securities, net of tax		1			24			35


Other comprehensive loss	$	(20,836	)	$	(16,341	)	$	(3,156	)

Schedule of Accumulated Other Comprehensive Loss

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


*Years Ended December 31,*	2014			2013			2012
Foreign currency translation adjustment:
Beginning balance	$	(11,181	)	$	(1,785	)	$	—
Current period other comprehensive loss		(12,442	)		(9,396	)		(1,785	)

Ending balance		(23,623	)		(11,181	)		(1,785	)


Cash flow hedging instruments:
Beginning balance		—			—			—
Current period other comprehensive income		168			—			—
Less reclassification adjustments		—			—			—

Ending balance		168			—			—


Available-for-sale securities:
Beginning balance		(293	)		(317	)		(352	)
Current period other comprehensive income		1			24			35

Ending balance		(292	)		(293	)		(317	)


Accumulated other comprehensive loss, net of tax	$	(23,747	)	$	(11,474	)	$	(2,102	)

PROPERTY AND EQUIPMENT (Tables)

12 Months Ended

Dec. 31, 2014

Property and Equipment, Net

Property and equipment, net, consists of:


*December 31,*	2014			2013
Land	$	853		$	1,131
Buildings and improvements		58,915			49,942
Machinery, vehicles and equipment		68,953			64,012
Furniture and fixtures		21,486			20,523

		150,207			135,608
Accumulated depreciation and amortization		(96,727	)		(90,190	)

	$	53,480		$	45,418

INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2014

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,*	2014		2013		2012
U.S. Federal	$	74,561	$	62,616	$	50,919
State		10,325		9,234		6,245
Foreign		6,953		5,810		5,478

	$	91,839	$	77,660	$	62,642


Current	$	91,550	$	69,071	$	55,918
Deferred		289		8,589		6,724

	$	91,839	$	77,660	$	62,642

Reconciliation of Effective Income Tax Rate

Following is a reconciliation of the effective income tax rate:


*Years Ended December 31,*	2014			2013			2012
U.S. federal statutory rate		35.0	%		35.0	%		35.0	%
State income taxes, net of federal benefit and other		3.0			3.3			2.5
Tax effects on foreign income		(1.0	)		(1.3	)		(0.8	)

Effective income tax rate attributable to Watsco, Inc.		37.0			37.0			36.7
Taxes attributable to noncontrolling interest		(6.4	)		(7.7	)		(8.3	)

Effective income tax rate		30.6	%		29.3	%		28.4	%

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,*	2014			2013
Current deferred tax assets:
Capitalized inventory costs and inventory reserves	$	3,262		$	2,883
Self-insurance reserves		759			1,093
Allowance for doubtful accounts		992			882
Other current deferred tax assets		1,588			1,539

Total current deferred tax assets (1)		6,601			6,397

Long-term deferred tax assets:
Share-based compensation		20,108			17,455
Other long-term deferred tax assets		746			909
Net operating loss carryforwards		221			283

		21,075			18,647
Valuation allowance		—			(75	)

Total long-term deferred tax assets (2)		21,075			18,572

Current deferred tax liabilities:
Other current deferred tax liabilities		(536	)		(1,304	)

Total current deferred tax liabilities (1)		(536	)		(1,304	)

Long-term deferred tax liabilities:
Deductible goodwill		(80,404	)		(76,519	)
Depreciation		(2,992	)		(2,873	)
Other long-term deferred tax liabilities		(1,320	)		(2,556	)

Total long-term deferred tax liabilities (2)		(84,716	)		(81,948	)

Net deferred tax liabilities	$	(57,576	)	$	(58,283	)

(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, 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
Additions based on tax positions related to the current year		751
Reductions due to lapse of applicable statute of limitations		(167	)

Balance at December 31, 2014	$	3,719

SHARE-BASED COMPENSATION AND BENEFIT PLANS (Tables)

12 Months Ended

Dec. 31, 2014

Summary of Stock Option Activity

The following is a summary of stock option activity under the 2014 Plan and the 2001 Plan as of and for the year ended December 31, 2014:


	Options			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value
Options outstanding at December 31, 2013		267,700		$	65.30
Granted		50,000			97.34
Exercised		(64,000	)		58.53
Forfeited		(11,250	)		68.49
Expired		(1,000	)		60.40

Options outstanding at December 31, 2014		241,450		$	73.62		2.47	$	8,060

Options exercisable at December 31, 2014		82,533		$	62.69		1.46	$	3,657

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, 2014:


	Shares			Weighted- Average Grant Date Fair Value
Non-vested (restricted) stock outstanding at December 31, 2013		2,487,292		$	40.70
Granted		218,725			96.84
Vested		(57,300	)		45.71
Forfeited		(5,000	)		56.69

Non-vested (restricted) stock outstanding at December 31, 2014		2,643,717		$	45.21

Valuation Assumptions Used for Stock Option Awards

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


*Years Ended December 31,*	2014			2013			2012
Expected term in years		4.25			4.25			4.25
Risk-free interest rate		1.35	%		0.82	%		0.57	%
Expected volatility		22.07	%		24.56	%		31.40	%
Expected dividend yield		1.69	%		2.20	%		3.49	%
Grant date fair value	$	15.75		$	13.33		$	12.90

Share-Based Compensation Expense

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


*Years Ended December 31,*	2014		2013		2012
Stock options	$	801	$	884	$	846
Non-vested (restricted) stock		10,672		9,083		7,093

Share-based compensation expense	$	11,473	$	9,967	$	7,939

ACQUISITIONS (Tables)

12 Months Ended

Dec. 31, 2014

Schedule of Unaudited Pro Forma Financial Information from Joint Venture


*Year ended December 31,*	2012
Revenues	$	3,526,621

Net income		156,728
Less: net income attributable to noncontrolling interest		54,153

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


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

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, 2014

Changes in Carrying Amount of Goodwill

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


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

Balance at December 31, 2013		392,610
Foreign currency translation adjustment		(5,299	)

Balance at December 31, 2014	$	387,311

Indefinite Lived Intangible Assets

Other intangible assets are comprised of the following:

December 31,

Estimated
Useful Lives

2014

2013

Indefinite lived intangible assets - Trade names, trademarks and distribution rights

131,271

138,599

Finite lived intangible assets:

Customer relationships

10-15 years

76,595

80,865

Trade name

10 years

1,150

1,150

Non-compete agreements

7 years

369

369

Accumulated amortization

(22,909

)

(17,140

)

Finite lived intangible assets, net

55,205

65,244

186,476

203,843

Finite lived intangible assets

Other intangible assets are comprised of the following:

December 31,

Estimated
Useful Lives

2014

2013

Indefinite lived intangible assets - Trade names, trademarks and distribution rights

131,271

138,599

Finite lived intangible assets:

Customer relationships

10-15 years

76,595

80,865

Trade name

10 years

1,150

1,150

Non-compete agreements

7 years

369

369

Accumulated amortization

(22,909

)

(17,140

)

Finite lived intangible assets, net

55,205

65,244

186,476

203,843

DERIVATIVES (Tables)

12 Months Ended

Dec. 31, 2014

Impact from Foreign Exchange Derivative Instruments Designated in Cash Flow Hedging Relationships

The impact from foreign exchange derivative instruments designated in cash flow hedging relationships were as follows:


*Years Ended December 31,*	2014		2013
Gain recorded in other comprehensive loss	$	384		—
Gain reclassified from accumulated other comprehensive loss into earnings		—		—

Fair Value of Derivative Instruments Included in Other Current Assets in Consolidated Balance Sheets


	Asset Derivatives				Liability Derivatives
*December 31,*	2014		2013		2014		2013
Derivatives designated as hedging instruments	$	384		—		—		—
Derivatives not designated as hedging instruments		260		118		—		—

Total derivative instruments	$	644	$	118		—		—

FAIR VALUE MEASUREMENTS (Tables)

12 Months Ended

Dec. 31, 2014

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, 2014 Using
	Balance Sheet Location	Total		Level 1		Level 2		Level 3
Assets:
Available-for-sale securities	Other assets	$	266	$	266		—		—
Derivative financial instruments	Other current assets	$	644		—	$	644		—

				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		—

COMMITMENTS AND CONTINGENCIES (Tables)

12 Months Ended

Dec. 31, 2014

Future Minimum Lease Payments under Non-Cancelable Operating Leases

At December 31, 2014, future minimum payments under non-cancelable operating leases over each of the next five years and thereafter were as follows:


2015	$	67,307
2016		56,263
2017		41,174
2018		26,221
2019		12,849
Thereafter		13,525

Total minimum payments	$	217,339

INFORMATION ABOUT GEOGRAPHIC AREAS (Tables)

12 Months Ended

Dec. 31, 2014

Revenues and Long-Lived Assets by Geographical Area


*Years Ended December 31,*	2014		2013		2012
Revenues:
United States	$	3,525,176	$	3,325,114	$	3,087,256
Canada		300,289		318,165		240,254
Mexico		119,075		100,051		104,202

Total revenues	$	3,944,540	$	3,743,330	$	3,431,712


*December 31,*	2014		2013
Long-Lived Assets:
United States	$	434,910	$	429,202
Canada		187,064		207,340
Mexico		5,293		5,329

Total long-lived assets	$	627,267	$	641,871

SELECTED QUARTERLY FINANCIAL DATA (Tables)

12 Months Ended

Dec. 31, 2014

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, 2014
Revenues (1)	$	762,568	$	1,170,186	$	1,134,999	$	876,787	$	3,944,540
Gross profit		188,069		279,273		274,765		214,295		956,402
Net income attributable to Watsco, Inc.	$	16,753	$	56,101	$	54,461	$	24,072	$	151,387

Earnings per share for Common and Class B common stock (2):
Basic	$	0.48	$	1.60	$	1.56	$	0.69	$	4.33

Diluted	$	0.48	$	1.60	$	1.56	$	0.69	$	4.32

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

(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.

Summary of Significant Accounting Policies - Additional Information (Detail) (USD $)	12 Months Ended
	Dec. 31, 2014 Entity	Dec. 31, 2013	Dec. 31, 2012
Significant Accounting Policies [Line Items]
Number of joint ventures	3
Allowance for doubtful accounts	$ 5,461,000	$ 5,737,000
Capitalized vendor rebates	10,088,000	9,333,000
Goodwill and other intangible assets impairment	0	0	0
Advertising expense	19,754,000	22,418,000	23,730,000
Shipping and handling costs	$ 43,324,000	$ 39,395,000	$ 37,676,000
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	572
Number of states in which entity operates	38

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, 2014

Sep. 30, 2014

Jun. 30, 2014

Mar. 31, 2014

Dec. 31, 2013

Sep. 30, 2013

Jun. 30, 2013

Mar. 31, 2013

Dec. 31, 2014

Dec. 31, 2013

Dec. 31, 2012

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

Net income attributable to Watsco, Inc. shareholders

$ 24,072

$ 54,461

$ 56,101

$ 16,753

$ 17,321

$ 45,699

$ 51,318

$ 13,385

$ 151,387

$ 127,723

$ 103,334

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

11,444

9,064

17,656

Earnings allocated to Watsco, Inc. shareholders - basic

139,943

118,659

85,678

Weighted-average common shares outstanding - Basic

32,308,073

32,195,598

31,680,187

Basic earnings per share for Common and Class B common stock

$ 0.69

^[1]

$ 1.56

^[1]

$ 1.60

^[1]

$ 0.48

^[1]

$ 0.50

^[1]

$ 1.32

^[1]

$ 1.48

^[1]

$ 0.39

^[1]

$ 4.33

^[1]

$ 3.69

^[1]

$ 2.70

Net income attributable to Watsco, Inc. shareholders

24,072

54,461

56,101

16,753

17,321

45,699

51,318

13,385

151,387

127,723

103,334

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

11,435

9,053

17,656

Earnings allocated to Watsco, Inc. shareholders - diluted

139,952

118,670

85,678

Weighted-average common shares outstanding - Basic

32,308,073

32,195,598

31,680,187

Effect of dilutive stock options

50,781

62,470

64,212

Weighted-average common shares outstanding - Diluted

32,358,854

32,258,068

31,744,399

Diluted earnings per share for Common and Class B common stock

$ 0.69

^[1]

$ 1.56

^[1]

$ 1.60

^[1]

$ 0.48

^[1]

$ 0.50

^[1]

$ 1.32

^[1]

$ 1.48

^[1]

$ 0.39

^[1]

$ 4.32

^[1]

$ 3.68

^[1]

$ 2.70

Common Stock

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

Earnings allocated to Watsco, Inc. shareholders - basic

128,214

108,690

78,359

Class B Common Stock

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

Earnings allocated to Watsco, Inc. shareholders - basic

$ 11,729

$ 9,969

$ 7,319

[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.

Earnings Per Share - Additional Information (Detail)	12 Months Ended
Earnings Per Share - Additional Information (Detail)	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Earnings Per Share [Line Items]
Convertible Class B common stock outstanding	2,707,725	2,704,832	2,706,338
Anti-dilutive stock options excluded from earnings per share	9,984	1,066	17,492

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 (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Components Of Other Comprehensive Income Loss [Line Items]
Foreign currency translation adjustment	$ (21,117)	$ (16,365)	$ (3,191)
Unrealized gain on cash flow hedging instruments	384
Income tax expense	(104)
Unrealized gain on cash flow hedging instruments, net of tax	280
Unrealized gain on available-for-sale securities	1	39	63
Income tax expense		(15)	(28)
Unrealized gain on available-for-sale securities, net of tax	1	24	35
Other comprehensive loss	$ (20,836)	$ (16,341)	$ (3,156)

+ References+ Details

Schedule of Accumulated Other Comprehensive Loss (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Accumulated Other Comprehensive Income (Loss) [Line Items]
Accumulated other comprehensive loss, net of tax	$ (23,747)	$ (11,474)	$ (2,102)
Foreign currency translation adjustment
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance	(11,181)	(1,785)
Current period other comprehensive (loss) income	(12,442)	(9,396)	(1,785)
Accumulated other comprehensive loss, net of tax	(23,623)	(11,181)	(1,785)
Cash flow hedging instruments
Accumulated Other Comprehensive Income (Loss) [Line Items]
Current period other comprehensive (loss) income	168
Less reclassification adjustments	0	0	0
Accumulated other comprehensive loss, net of tax	168
Available-for-sale securities
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance	(293)	(317)	(352)
Current period other comprehensive (loss) income	1	24	35
Accumulated other comprehensive loss, net of tax	$ (292)	$ (293)	$ (317)

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

Supplier Concentration - Additional Information (Detail) (Supplier Concentration Risk)	12 Months Ended
	Dec. 31, 2014 Vendor	Dec. 31, 2013	Dec. 31, 2012
Concentration Risk [Line Items]
Percentage of purchases from key suppliers	76.00%	73.00%	72.00%
Number of key suppliers	4
Carrier and Its Affiliates
Concentration Risk [Line Items]
Percentage of purchases from key suppliers	61.00%	59.00%	57.00%

Property and Equipment, Net (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 150,207	$ 135,608
Accumulated depreciation and amortization	(96,727)	(90,190)
Property and equipment, net	53,480	45,418
Land
Property, Plant and Equipment [Line Items]
Property and equipment, gross	853	1,131
Buildings and Improvements
Property, Plant and Equipment [Line Items]
Property and equipment, gross	58,915	49,942
Machinery, vehicles and equipment
Property, Plant and Equipment [Line Items]
Property and equipment, gross	68,953	64,012
Furniture and fixtures
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 21,486	$ 20,523

Debt - Additional Information (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended		0 Months Ended				0 Months Ended		12 Months Ended	0 Months Ended		12 Months Ended	0 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Jun. 25, 2014 Minimum	Jun. 25, 2014 Maximum	Jun. 25, 2014 Before Extension	Jun. 25, 2014 Before Extension	Jun. 25, 2014 After Extension	Jun. 25, 2014 After Extension	Dec. 31, 2014 London Interbank Offer Rate	Jun. 25, 2014 London Interbank Offer Rate Minimum	Jun. 25, 2014 London Interbank Offer Rate Maximum	Dec. 31, 2014 Prime Rate	Jun. 25, 2014 Prime Rate Minimum	Jun. 25, 2014 Prime Rate Maximum	Jun. 25, 2014 Swingline Subfacility Before Extension	Jun. 25, 2014 Swingline Subfacility After Extension	Jun. 25, 2014 Letter of Credit	Jun. 25, 2014 Multicurrency borrowing sublimit
Debt Instrument [Line Items]
Revolving credit agreement maximum borrowing capacity						$ 500,000		$ 600,000							$ 65,000	$ 90,000	$ 50,000	$ 75,000
Revolving credit agreement maturity date					Jul. 01, 2018		Jul. 01, 2019
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	$ 303,199	$ 230,044

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, 2014	Dec. 31, 2013	Dec. 31, 2012
Components Of Income Tax Expense Benefit [Line Items]
U.S. Federal	$ 74,561	$ 62,616	$ 50,919
State	10,325	9,234	6,245
Foreign	6,953	5,810	5,478
Income tax expense	91,839	77,660	62,642
Current	91,550	69,071	55,918
Deferred	289	8,589	6,724
Income tax expense	$ 91,839	$ 77,660	$ 62,642

Amount of current income tax expense (benefit) pertaining to taxable 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, 2014	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
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	$ 80,000
Valuation allowance		75
State and other net operating loss carry forwards	7,231
Gross unrecognized tax benefits	3,719	3,135	2,474	2,424
Unrecognized tax benefits that, if recognized, would affect the effective tax rate	2,417	2,038
Estimated accrued interest and penalties resulting from unrecognized tax benefits	$ 729	$ 630
Minimum
Income Taxes [Line Items]
State and other net operating loss carry forwards expiration date	2015
Maximum
Income Taxes [Line Items]
State and other net operating loss carry forwards expiration date	2034

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, 2014	Dec. 31, 2013	Dec. 31, 2012
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	3.00%	3.30%	2.50%
Tax effects on foreign income	(1.00%)	(1.30%)	(0.80%)
Effective income tax rate attributable to Watsco, Inc.	37.00%	37.00%	36.70%
Taxes attributable to noncontrolling interest	(6.40%)	(7.70%)	(8.30%)
Effective income tax rate	30.60%	29.30%	28.40%

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

Dec. 31, 2014

Dec. 31, 2013

Capitalized inventory costs and inventory reserves

$ 3,262

$ 2,883

Self-insurance reserves

759

1,093

Allowance for doubtful accounts

992

882

Other current deferred tax assets

1,588

1,539

Total current deferred tax assets

6,601

^[1]

6,397

^[1]

Share-based compensation

20,108

17,455

Other long-term deferred tax assets

746

909

Net operating loss carryforwards

221

283

Total long-term deferred tax assets

21,075

18,647

Valuation allowance

(75)

Total long-term deferred tax assets

21,075

^[2]

18,572

^[2]

Other current deferred tax liabilities

(536)

(1,304)

Total current deferred tax liabilities

(536)

^[1]

(1,304)

^[1]

Deductible goodwill

(80,404)

(76,519)

Depreciation

(2,992)

(2,873)

Other long-term deferred tax liabilities

(1,320)

(2,556)

Total long-term deferred tax liabilities

(84,716)

^[2]

(81,948)

^[2]

Net deferred tax liabilities

$ (57,576)

$ (58,283)

[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, 2014	Dec. 31, 2013	Dec. 31, 2012
Income Tax Contingency [Line Items]
Beginning balance	$ 3,135	$ 2,474	$ 2,424
Additions based on tax positions related to the current year	751	673	416
Reductions due to lapse of applicable statute of limitations	(167)	(12)	(366)
Ending balance	$ 3,719	$ 3,135	$ 2,474

Share-Based Compensation and Benefit Plans - Additional Information (Detail) (USD $) In Thousands, except Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2014 plan	Dec. 31, 2013	Dec. 31, 2012
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of share-based compensation plans for employees	2
Options of common stock outstanding	241,450	267,700
Total intrinsic value of stock options exercised	$ 3,746	$ 2,753	$ 5,641
Cash received from Common stock issued	3,324	1,554	3,790
Common stock contribution to 401(k) plan	1,759	1,689	1,772
Common and 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
Shares delivered as payment for tax withholdings related to stock option exercises, market value		1,227
2014 Plan
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%
Aggregate shares of common stock that may be granted	2,045,421
Shares reserved for future grant	2,007,971
Contractual term of stock option awards	5 years
2014 Plan \| Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Years in which options plan vest	2 years
2014 Plan \| Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Years in which options plan vest	4 years
2014 Plan \| Common Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares awarded under plan	27,450
2014 Plan \| Common and Class B Common Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares reserved for future grant	2,000,000
2014 Plan \| Class B Common Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares awarded under plan	10,000
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	515,204
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	6,995	5,844	6,753
Average price of the shares purchased by employees	$ 90.89	$ 79.46	$ 68.76
Additional shares issued resulting from cash dividends reinvested in common stock	2,953	1,899	15,411
Net proceeds from shares issued under ESPP	921	631	1,522
401(k) Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock contribution to 401(k) Plan, shares	18,309	22,551	26,991
Common stock contribution to 401(k) plan	1,759	1,689	1,772
2001 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Aggregate shares of common stock that may be granted	0
Contractual term of stock option awards	5 years
Options of common stock outstanding	207,450
2001 Plan \| Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Years in which options plan vest	2 years
2001 Plan \| Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Years in which options plan vest	4 years
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	$ 96.84	$ 80.21	$ 69.66
Fair value of non-vested stock that vested	5,789
Tax benefits realized from share-based compensation	2,142
Shares, Vested	57,300	0	0
Shares withheld as payment for tax withholdings related to share based compensation, shares	21,028
Shares withheld as payment for tax withholdings related to share based compensation, market value	2,125
Unrecognized share-based compensation expense	76,971
Weighted-average period for recognition of share-based compensation expense, in years	9 years 3 months 18 days
Non-Vested (Restricted) Stock \| Chief Executive Officer
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized share-based compensation expense	57,000
Weighted-average period for recognition of share-based compensation expense, in years	8 years
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	102,479
Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Tax benefits realized from share-based compensation	936	1,557	1,245
Unrecognized share-based compensation expense	825
Weighted-average period for recognition of share-based compensation expense, in years	1 year 8 months 12 days
Fair value of stock options vested	1,145	822	315
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	5,454	4,749	29,987
Shares withheld as payment for tax withholdings related to share based compensation, market value	$ 490	$ 450	$ 2,229

Summary of Stock Option Activity (Detail) (USD $) In Thousands, except Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options, Outstanding beginning balance	267,700
Options, Granted	50,000
Options, Exercised	(64,000)
Options, Forfeited	(11,250)
Options, Expired	(1,000)
Options, Outstanding ending balance	241,450
Options, Exercisable	82,533
Weighted-Average Exercise Price, Outstanding beginning balance	$ 65.30
Weighted-Average Exercise Price, Granted	$ 97.34
Weighted-Average Exercise Price, Exercised	$ 58.53
Weighted-Average Exercise Price, Forfeited	$ 68.49
Weighted-Average Exercise Price, Expired	$ 60.40
Weighted-Average Exercise Price, Outstanding ending balance	$ 73.62
Weighted-Average Exercise Price, Exercisable	$ 62.69
Weighted-Average Remaining Contractual Term (in years), Outstanding	2 years 5 months 19 days
Weighted-Average Remaining Contractual Term (in years), Exercisable	1 year 5 months 16 days
Aggregate Intrinsic Value, Outstanding	$ 8,060
Aggregate Intrinsic Value, Exercisable	$ 3,657

Summary of Non-Vested (Restricted) Stock Activity (Detail) (Non-Vested (Restricted) Stock, USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Non-Vested (Restricted) Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares, Non-vested beginning balance	2,487,292
Shares, Granted	218,725
Shares, Vested	(57,300)	0	0
Shares, Forfeited	(5,000)
Shares, Non-vested ending balance	2,643,717	2,487,292
Weighted-Average Grant Date Fair Value, Non-vested beginning balance	$ 40.70
Weighted-Average Grant Date Fair Value, Granted	$ 96.84	$ 80.21	$ 69.66
Weighted-Average Grant Date Fair Value, Vested	$ 45.71
Weighted-Average Grant Date Fair Value, Forfeited	$ 56.69
Weighted-Average Grant Date Fair Value, Non-vested ending balance	$ 45.21	$ 40.70

Weighted-Average Assumptions Used for Stock Options Granted (Detail) (USD $)	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
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	1.35%	0.82%	0.57%
Expected volatility	22.07%	24.56%	31.40%
Expected dividend yield	1.69%	2.20%	3.49%
Grant date fair value	$ 15.75	$ 13.33	$ 12.90

Share-Based Compensation Expense (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense	$ 11,473	$ 9,967	$ 7,939
Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense	801	884	846
Non-Vested (Restricted) Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense	$ 10,672	$ 9,083	$ 7,093

Acquisitions - Additional Information (Detail) (USD $) In Thousands, except Share data, unless otherwise specified	0 Months Ended					0 Months Ended				0 Months Ended
	Jul. 01, 2014 Carrier Enterprise I	Jul. 02, 2012 Carrier Enterprise I	Jul. 01, 2014 Carrier Enterprise I	Jul. 02, 2012 Carrier Enterprise I	Jul. 01, 2009 Carrier Enterprise I	Apr. 27, 2012 Carrier Enterprise III	Dec. 31, 2014 Carrier Enterprise III Location	Dec. 31, 2012 Carrier Enterprise III	Apr. 27, 2012 Carrier Enterprise III	Apr. 27, 2012 Carrier Enterprise III Customer Relationships	Apr. 27, 2012 UTC Canada	Apr. 29, 2011 Carrier Enterprise II
Business Acquisition [Line Items]
Controlling interest			80.00%		60.00%				60.00%			60.00%
Non-controlling interest, ownership percentage					40.00%				40.00%			40.00%
Percentage of additional ownership acquired			10.00%	10.00%
Cash consideration	$ 87,735	$ 51,881				$ 80,489
Number of locations joint venture operates from							37
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
Goodwill and intangibles, purchase price allocation									216,463
Percent of tax basis of acquired goodwill amortized at a rate of 7%						75.00%
Goodwill amortization rate						7.00%
Fair value of acquired intangible assets									151,172
Finite-lived intangible assets, average useful life, in years										15 years
Identified intangible assets, customer relationships										55,657
Identified intangible assets, trade names and distribution rights						95,515
Purchase price									173,739
Transaction costs included in selling, general and administrative expenses								$ 1,200

Purchase Price Allocation (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012	Apr. 27, 2012 Carrier Enterprise III
Business Acquisition [Line Items]
Cash				$ 10
Accounts receivable				46,718
Inventories				55,024
Other current assets				481
Property and equipment				2,517
Goodwill	387,311	392,610	397,262	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

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
Business Acquisition, Pro Forma Information [Line Items]
Revenues	$ 3,526,621
Net income	156,728
Less: net income attributable to noncontrolling interest	54,153
Net income attributable to Watsco, Inc.	$ 102,575
Diluted earnings per share for Common and Class B common stock	$ 2.64

Changes in Carrying Amount of Goodwill (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Goodwill [Line Items]
Goodwill, Beginning Balance	$ 392,610	$ 397,262
Foreign currency translation adjustment	(5,299)	(4,652)
Goodwill, Ending Balance	$ 387,311	$ 392,610

Other Intangible Assets (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Intangible Assets [Line Items]
Indefinite lived intangible assets - Trade names, trademarks and distribution rights	$ 131,271	$ 138,599
Finite lived intangible assets:
Accumulated amortization	(22,909)	(17,140)
Finite lived intangible assets, net	55,205	65,244
Intangible assets, net	186,476	203,843
Customer Relationships
Finite lived intangible assets:
Finite lived intangible assets	76,595	80,865
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, 2014	Dec. 31, 2013	Dec. 31, 2012
Goodwill And Intangible Assets [Line Items]
Amortization expense related to finite lived intangible assets	$ 5,769	$ 6,029	$ 4,925
Amortization of finite lived intangible assets for 2015	5,600
Amortization of finite lived intangible assets for 2016	5,600
Amortization of finite lived intangible assets for 2017	5,600
Amortization of finite lived intangible assets for 2018	5,600
Amortization of finite lived intangible assets for 2019	$ 5,600

Shareholders' Equity - Additional Information (Detail) (USD $) In Thousands, except Share data, unless otherwise specified				12 Months Ended		12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Sep. 30, 1999	Dec. 31, 2014 Common Stock	Dec. 31, 2013 Common Stock	Dec. 31, 2014 Class B Common Stock	Dec. 31, 2013 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 $)	Dec. 31, 2014	Dec. 31, 2013
Financial Instrument [Line Items]
Estimated fair value of contingent liability	$ 0
Standby Letters of Credit
Financial Instrument [Line Items]
Fair value of contingent liability	2,662,000	2,681,000
Performance Bonds
Financial Instrument [Line Items]
Fair value of contingent liability	$ 2,300,000	$ 800,000

Derivatives - Additional Information (Detail) (Foreign Currency Forward Contracts, USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Cash Flow Hedge
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Notional value of derivatives	$ 23,000
Contract maturity period	One year or less
Contract expiring terms	2015-05
Pre-tax gain to be reclassified from accumulated other comprehensive loss into earnings	384
Derivatives not Designated as Hedging Instruments
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Notional value of derivatives	14,750
Contract expiring terms	2015-10
Gain (loss) from foreign currency forward contracts not designated as hedging instruments	$ 142	$ 315	$ (197)

Impact from Foreign Exchange Derivative Instruments Designated in Cash Flow Hedging Relationships (Detail) (Cash Flow Hedge, USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013
Cash Flow Hedge
Derivative Instruments, Gain (Loss) [Line Items]
Gain recorded in other comprehensive loss	$ 384
Gain reclassified from accumulated other comprehensive loss into earnings	$ 0	$ 0

Fair Value of Derivative Instruments Included in Other Current Assets in Consolidated Balance Sheets (Detail) (Foreign Currency Forward Contracts, USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Derivatives, Fair Value [Line Items]
Derivative instruments, assets derivatives	$ 644	$ 118
Derivative instruments, liabilities derivatives	0	0
Derivatives Designated as Hedging Instruments
Derivatives, Fair Value [Line Items]
Derivative instruments, assets derivatives	384
Derivative instruments, liabilities derivatives	0	0
Derivatives not Designated as Hedging Instruments
Derivatives, Fair Value [Line Items]
Derivative instruments, assets derivatives	260	118
Derivative instruments, liabilities derivatives	$ 0	$ 0

Fair value, after the effects of master netting arrangements, of a financial asset or other contract with one or more underlyings, notional amount or payment provision or both, and the contract can be net settled by means outside the contract or delivery of an asset, expected to be settled within one year or normal operating cycle, if longer. Includes assets not subject to a master netting arrangement and not elected to be offset.

+ References+ Details

Fair value, after the effects of master netting arrangements, of a financial liability or contract with one or more underlyings, notional amount or payment provision or both, and the contract can be net settled by means outside the contract or delivery of an asset, expected to be settled within one year or normal operating cycle, if longer. Includes assets not subject to a master netting arrangement and not elected to be offset.

+ References+ Details

Assets and Liabilities Carried at Fair Value Measured on Recurring Basis (Detail) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2014	Dec. 31, 2013
Other assets
Assets:
Available-for-sale securities	$ 266	$ 265
Other Current Assets
Assets:
Derivative financial instruments	644	118
Fair Value Measurements, Level 1 \| Other assets
Assets:
Available-for-sale securities	266	265
Fair Value Measurements, Level 2 \| Other Current Assets
Assets:
Derivative financial instruments	$ 644	$ 118

Commitments and Contingencies - Additional Information (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Commitments and Contingencies Disclosure [Line Items]
Self-insurance reserves	$ 4,630	$ 5,582
Maximum exposure to loss related to involvement with variable interest entity	4,100
Operating leases maximum maturity date	2025
Rental expense	81,155	79,585	76,547
Carrier and Its Affiliates
Commitments and Contingencies Disclosure [Line Items]
Non-cancelable purchase obligations for goods	$ 32,000

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, 2014
Operating Leases Future Minimum Payments Due [Line Items]
2015	$ 67,307
2016	56,263
2017	41,174
2018	26,221
2019	12,849
Thereafter	13,525
Total minimum payments	$ 217,339

Related Party Transactions - Additional Information (Detail) (Supplier Concentration Risk, USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Related Party Transaction [Line Items]
Percentage of purchases from key suppliers	76.00%	73.00%	72.00%
Carrier and Its Affiliates
Related Party Transaction [Line Items]
Percentage of purchases from key suppliers	61.00%	59.00%	57.00%
Amount payable to Carrier and its affiliates, net of receivables	$ (61,000)	$ (53,000)
Revenues from sales to Carrier and its affiliates	$ 38,195	$ 30,819	$ 32,961

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.

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

3 Months Ended

12 Months Ended

Dec. 31, 2014

Sep. 30, 2014

Jun. 30, 2014

Mar. 31, 2014

Dec. 31, 2013

Sep. 30, 2013

Jun. 30, 2013

Mar. 31, 2013

Dec. 31, 2014

Dec. 31, 2013

Dec. 31, 2012

$ 876,787

^[1]

$ 1,134,999

^[1]

$ 1,170,186

^[1]

$ 762,568

^[1]

$ 827,352

^[1]

$ 1,081,893

^[1]

$ 1,120,452

^[1]

$ 713,633

^[1]

$ 3,944,540

^[1]

$ 3,743,330

^[1]

$ 3,431,712

627,267

641,871

627,267

641,871

UNITED STATES

3,525,176

3,325,114

3,087,256

434,910

429,202

434,910

429,202

CANADA

300,289

318,165

240,254

187,064

207,340

187,064

207,340

MEXICO

119,075

100,051

104,202

Quarterly Financial Data [Line Items]

$ 5,293

$ 5,329

$ 5,293

$ 5,329

[1]

Supplemental Cash Flow Information (Detail) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2014	Dec. 31, 2013	Dec. 31, 2012
Cash Flow Supplemental Disclosures [Line Items]
Interest paid	$ 4,393	$ 5,334	$ 2,802
Income taxes net of refunds	82,850	73,168	46,819
Carrier Enterprise III
Cash Flow Supplemental Disclosures [Line Items]
Common stock issued for Carrier Enterprise III			$ 93,250

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

3 Months Ended

12 Months Ended

Dec. 31, 2014

Sep. 30, 2014

Jun. 30, 2014

Mar. 31, 2014

Dec. 31, 2013

Sep. 30, 2013

Jun. 30, 2013

Mar. 31, 2013

Dec. 31, 2014

Dec. 31, 2013

Dec. 31, 2012

Net income attributable to Watsco, Inc.

$ 876,787

^[1]

$ 1,134,999

^[1]

$ 1,170,186

^[1]

$ 762,568

^[1]

$ 827,352

^[1]

$ 1,081,893

^[1]

$ 1,120,452

^[1]

$ 713,633

^[1]

$ 3,944,540

^[1]

$ 3,743,330

^[1]

$ 3,431,712

Gross profit

214,295

274,765

279,273

188,069

198,530

258,597

266,680

175,446

956,402

899,253

814,395

$ 24,072

$ 54,461

$ 56,101

$ 16,753

$ 17,321

$ 45,699

$ 51,318

$ 13,385

$ 151,387

$ 127,723

$ 103,334

Earnings per share for Common and Class B common stock :

Basic

$ 0.69

^[2]

$ 1.56

^[2]

$ 1.60

^[2]

$ 0.48

^[2]

$ 0.50

^[2]

$ 1.32

^[2]

$ 1.48

^[2]

$ 0.39

^[2]

$ 4.33

^[2]

$ 3.69

^[2]

$ 2.70

Diluted

$ 0.69

^[2]

$ 1.56

^[2]

$ 1.60

^[2]

$ 0.48

^[2]

$ 0.50

^[2]

$ 1.32

^[2]

$ 1.48

^[2]

$ 0.39

^[2]

$ 4.32

^[2]

$ 3.68

^[2]

$ 2.70

[1]

[2]

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