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Cover Page - shares	6 Months Ended
Cover Page - shares	Jun. 30, 2020	Aug. 03, 2020
Document Information [Line Items]
Document Type	10-Q
Document Period End Date	Jun. 30, 2020
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q2
Current Fiscal Year End Date	--12-31
Amendment Flag	false
Entity Registrant Name	WATSCO INC
Entity Central Index Key	0000105016
Entity File Number	1-5581
Entity Incorporation, State or Country Code	FL
Document Quarterly Report	true
Document Transition Report	false
Entity Tax Identification Number	59-0778222
Entity Address, Address Line One	2665 South Bayshore Drive
Entity Address, City or Town	Miami
Entity Address, Postal Zip Code	33133
Entity Address, Address Line Two	Suite 901
Entity Address, State or Province	FL
City Area Code	305
Local Phone Number	714-4100
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Common Stock [Member]
Document Information [Line Items]
Trading Symbol	WSO
Security Exchange Name	NYSE
Title of 12(b) Security	Common stock, $0.50 par value
Entity Common Stock, Shares Outstanding		32,822,626
Common Class B [Member]
Document Information [Line Items]
Trading Symbol	WSOB
Security Exchange Name	NYSE
Title of 12(b) Security	Class B common stock, $0.50 par value
Entity Common Stock, Shares Outstanding		5,597,873

Condensed Consolidated Unaudited Statements of Income - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Revenues	$ 1,355,385	$ 1,371,854	$ 2,363,541	$ 2,303,132
Cost of sales	1,036,186	1,043,870	1,796,727	1,741,388
Gross profit	319,199	327,984	566,814	561,744
Selling, general and administrative expenses	194,053	196,549	397,439	376,621
Other income	4,103	2,965	5,117	4,409
Operating income	129,249	134,400	174,492	189,532
Interest expense, net	283	1,212	1,073	1,988
Income before income taxes	128,966	133,188	173,419	187,544
Income taxes	24,724	25,278	32,930	35,830
Net income	104,242	107,910	140,489	151,714
Less: net income attributable to non-controlling interest	17,664	17,755	23,409	26,522
Net income attributable to Watsco, Inc.	$ 86,578	$ 90,155	$ 117,080	$ 125,192
Earnings per share for Common and Class B common stock:
Basic	$ 2.26	$ 2.40	$ 3.03	$ 3.34
Diluted	$ 2.26	$ 2.40	$ 3.02	$ 3.34

Condensed Consolidated Unaudited Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Net income	$ 104,242	$ 107,910	$ 140,489	$ 151,714
Other comprehensive income (loss), net of tax
Foreign currency translation adjustment	9,823	5,297	(12,106)	10,302
Unrealized (loss) gain on cash flow hedging instruments	(1,170)	(517)	1,364	(1,053)
Reclassification of gain on cash flow hedging instruments into earnings	(297)	(128)	(182)	(402)
Other comprehensive income (loss)	8,356	4,652	(10,924)	8,847
Comprehensive income	112,598	112,562	129,565	160,561
Less: comprehensive income attributable to non-controlling interest	20,499	19,368	19,703	29,547
Comprehensive income attributable to Watsco, Inc.	$ 92,099	$ 93,194	$ 109,862	$ 131,014

- Definition

The consolidated profit or loss for the period, net of income taxes, including the portion attributable to the noncontrolling interest.

+ References

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+ Details

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Current assets:
Cash and cash equivalents	$ 79,573	$ 74,454
Accounts receivable, net	676,569	533,810
Inventories	854,368	920,786
Other current assets	20,959	17,680
Total current assets	1,631,469	1,546,730
Property and equipment, net	97,143	98,523
Operating lease right-of-use assets	226,544	223,369
Goodwill	408,772	411,217
Intangible assets, net	163,638	172,004
Investment in unconsolidated entity	99,950	94,833
Other assets	9,211	9,485
Total assets	2,636,727	2,556,161
Current liabilities:
Current portion of lease liabilities	69,823	69,421
Accounts payable	377,445	239,666
Accrued expenses and other current liabilities	191,590	152,630
Total current liabilities	638,858	461,717
Long-term obligations:
Borrowings under revolving credit agreement	33,357	155,700
Operating lease liabilities, net of current portion	157,214	154,271
Finance lease liabilities, net of current portion	2,315	2,009
Total long-term obligations	192,886	311,980
Deferred income taxes and other liabilities	68,901	67,697
Commitments and contingencies
Watsco, Inc. shareholders' equity:
Preferred stock, $0.50 par value
Paid-in capital	928,845	907,877
Accumulated other comprehensive loss, net of tax	(46,268)	(39,050)
Retained earnings	620,272	632,507
Treasury stock, at cost	(87,440)	(87,440)
Total Watsco, Inc. shareholders' equity	1,437,039	1,435,427
Non-controlling interest	299,043	279,340
Total shareholders' equity	1,736,082	1,714,767
Total liabilities and shareholders' equity	2,636,727	2,556,161
Common Stock
Watsco, Inc. shareholders' equity:
Common stock, $0.50 par value	18,804	18,768
Class B Common Stock
Watsco, Inc. shareholders' equity:
Common stock, $0.50 par value	$ 2,826	$ 2,765

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Jun. 30, 2020	Dec. 31, 2019
Preferred stock, par value	$ 0.50	$ 0.50
Common Stock
Common stock, par value	0.50	0.50
Class B Common Stock
Common stock, par value	$ 0.50	$ 0.50

Condensed Consolidated Unaudited Statements of Shareholders' Equity - USD ($) $ in Thousands	Total	Dunphey & Associates Supply Co., Inc.	Common Stock, Class B Common Stock and Preferred Stock	Common Stock, Class B Common Stock and Preferred Stock Dunphey & Associates Supply Co., Inc.	Paid-In Capital	Paid-In Capital Dunphey & Associates Supply Co., Inc.	Accumulated Other Comprehensive Loss	Retained Earnings	Treasury Stock	Non-controlling Interest
Beginning balance at Dec. 31, 2018	$ 1,601,713		$ 21,167		$ 832,121		$ (45,968)	$ 627,969	$ (87,440)	$ 253,864
Beginning balance (in shares) at Dec. 31, 2018			37,461,643
Net income	43,804							35,037		8,767
Other comprehensive income (loss)	4,195						2,783			1,412
Issuances of non-vested restricted shares of common stock			$ 39		(39)
Issuances of non-vested restricted shares of common stock (in shares)			77,049
Forfeitures of non-vested restricted shares of common stock			$ (3)		3
Forfeitures of non-vested restricted shares of common stock (in shares)			(5,000)
Common stock contribution to 401(k) plan	4,274		$ 15		4,259
Common stock contribution to 401(k) plan (in shares)			30,715
Stock issuances from exercise of stock options and employee stock purchase plan	1,125		$ 4		1,121
Stock issuances from exercise of stock options and employee stock purchase plan (in shares)			8,925
Retirement of common stock	(428)		$ (1)		(427)
Retirement of common stock (in shares)			(2,985)
Share-based compensation	4,537				4,537
Cash dividends declared and paid on Common and Class B common stock	(59,965)							(59,965)
Ending balance at Mar. 31, 2019	1,599,255		$ 21,221		841,575		(43,185)	603,041	(87,440)	264,043
Ending balance (in shares) at Mar. 31, 2019			37,570,347
Beginning balance at Dec. 31, 2018	1,601,713		$ 21,167		832,121		(45,968)	627,969	(87,440)	253,864
Beginning balance (in shares) at Dec. 31, 2018			37,461,643
Net income	151,714
Other comprehensive income (loss)	8,847
Ending balance at Jun. 30, 2019	1,633,362		$ 21,266		828,932		(40,146)	632,983	(87,440)	277,767
Ending balance (in shares) at Jun. 30, 2019			37,659,852
Beginning balance at Mar. 31, 2019	1,599,255		$ 21,221		841,575		(43,185)	603,041	(87,440)	264,043
Beginning balance (in shares) at Mar. 31, 2019			37,570,347
Net income	107,910							90,155		17,755
Other comprehensive income (loss)	4,652						3,039			1,613
Issuances of non-vested restricted shares of common stock			$ 13		(13)
Issuances of non-vested restricted shares of common stock (in shares)			26,354
Stock issuances from exercise of stock options and employee stock purchase plan	1,951		$ 9		1,942
Stock issuances from exercise of stock options and employee stock purchase plan (in shares)			15,807
Retirement of common stock	(555)		$ (2)		(553)
Retirement of common stock (in shares)			(3,608)
Share-based compensation	4,324				4,324
Cash dividends declared and paid on Common and Class B common stock	(60,213)							(60,213)
Common stock issued		$ 7,450		$ 25		$ 7,425
Common stock issued (in shares)				50,952
Investment in unconsolidated entity	988									988
Decrease in non-controlling interest in Carrier Enterprise II	(32,400)				(25,768)					(6,632)
Ending balance at Jun. 30, 2019	1,633,362		$ 21,266		828,932		(40,146)	632,983	(87,440)	277,767
Ending balance (in shares) at Jun. 30, 2019			37,659,852
Beginning balance at Dec. 31, 2019	1,714,767		$ 21,533		907,877		(39,050)	632,507	(87,440)	279,340
Beginning balance (in shares) at Dec. 31, 2019			38,194,056
Net income	36,247							30,502		5,745
Other comprehensive income (loss)	(19,280)						(12,739)			(6,541)
Issuances of non-vested restricted shares of common stock			$ 57		(57)
Issuances of non-vested restricted shares of common stock (in shares)			113,765
Common stock contribution to 401(k) plan	4,543		$ 13		4,530
Common stock contribution to 401(k) plan (in shares)			25,216
Stock issuances from exercise of stock options and employee stock purchase plan	2,541		$ 9		2,532
Stock issuances from exercise of stock options and employee stock purchase plan (in shares)			18,674
Retirement of common stock	(791)		$ (2)		(789)
Retirement of common stock (in shares)			(4,828)
Share-based compensation	6,097				6,097
Cash dividends declared and paid on Common and Class B common stock	(61,238)							(61,238)
Ending balance at Mar. 31, 2020	1,682,886		$ 21,610		920,190		(51,789)	601,771	(87,440)	278,544
Ending balance (in shares) at Mar. 31, 2020			38,346,883
Beginning balance at Dec. 31, 2019	1,714,767		$ 21,533		907,877		(39,050)	632,507	(87,440)	279,340
Beginning balance (in shares) at Dec. 31, 2019			38,194,056
Net income	140,489
Other comprehensive income (loss)	(10,924)
Ending balance at Jun. 30, 2020	1,736,082		$ 21,630		928,845		(46,268)	620,272	(87,440)	299,043
Ending balance (in shares) at Jun. 30, 2020			38,388,079
Beginning balance at Mar. 31, 2020	1,682,886		$ 21,610		920,190		(51,789)	601,771	(87,440)	278,544
Beginning balance (in shares) at Mar. 31, 2020			38,346,883
Net income	104,242							86,578		17,664
Other comprehensive income (loss)	8,356						5,521			2,835
Issuances of non-vested restricted shares of common stock			$ 8		(8)
Issuances of non-vested restricted shares of common stock (in shares)			15,500
Stock issuances from exercise of stock options and employee stock purchase plan	4,545		$ 16		4,529
Stock issuances from exercise of stock options and employee stock purchase plan (in shares)			32,073
Retirement of common stock	(1,096)		$ (4)		(1,092)
Retirement of common stock (in shares)			(6,377)
Share-based compensation	5,226				5,226
Cash dividends declared and paid on Common and Class B common stock	(68,077)							(68,077)
Ending balance at Jun. 30, 2020	$ 1,736,082		$ 21,630		$ 928,845		$ (46,268)	$ 620,272	$ (87,440)	$ 299,043
Ending balance (in shares) at Jun. 30, 2020			38,388,079

Condensed Consolidated Unaudited Statements of Shareholders' Equity (Parenthetical) - $ / shares	3 Months Ended
	Jun. 30, 2020	Mar. 31, 2020	Jun. 30, 2019	Mar. 31, 2019
Cash dividends declared and paid, common stock	$ 1.775	$ 1.60	$ 1.60	$ 1.60

Condensed Consolidated Unaudited Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Cash flows from operating activities:
Net income	$ 140,489	$ 151,714
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	12,898	11,656
Share-based compensation	10,140	8,174
Deferred income tax provision	1,676	1,156
Other income from investment in unconsolidated entity	(5,117)	(4,409)
Other, net	6,475	5,644
Changes in operating assets and liabilities, net of effects of acquisition:
Accounts receivable	(146,512)	(146,441)
Inventories	63,432	(117,591)
Accounts payable and other liabilities	182,957	161,685
Other, net	(5,183)	(3,141)
Net cash provided by operating activities	261,255	68,447
Cash flows from investing activities:
Capital expenditures	(8,019)	(9,197)
Business acquisitions, net of cash acquired		(16,761)
Investment in unconsolidated entity		(4,940)
Proceeds from sale of property and equipment	37	92
Net cash used in investing activities	(7,982)	(30,806)
Cash flows from financing activities:
Dividends on Common and Class B common stock	(129,315)	(120,178)
Net (repayments) proceeds under revolving credit agreement	(122,343)	84,400
Repurchases of common stock to satisfy employee withholding tax obligations	(1,034)	(983)
Net repayments of long-term obligations	(651)	(230)
Payment of fees related to revolving credit agreement	(189)
Purchase of additional ownership from non-controlling interest		(32,400)
Proceeds from non-controlling interest for investment in unconsolidated entity		988
Net proceeds from issuances of common stock	6,233	3,076
Net cash used in financing activities	(247,299)	(65,327)
Effect of foreign exchange rate changes on cash and cash equivalents	(855)	707
Net increase (decrease) in cash and cash equivalents	5,119	(26,979)
Cash and cash equivalents at beginning of period	74,454	82,894
Cash and cash equivalents at end of period	$ 79,573	55,915
Supplemental cash flow information:
Common stock issued for Dunphey & Associates Supply Co., Inc.		$ 7,450

BASIS OF PRESENTATION

6 Months Ended

Jun. 30, 2020

BASIS OF PRESENTATION

1.	BASIS OF PRESENTATION

Basis of Consolidation

Watsco, Inc. (collectively with its subsidiaries, “Watsco,” “we,” “us,” or “our”) was incorporated in Florida in 1956 and is the largest distributor of air conditioning, heating and refrigeration equipment and related parts and supplies (“HVAC/R”) in the HVAC/R distribution industry in North America. The accompanying June 30, 2020 interim condensed consolidated unaudited financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and note disclosures normally included in the annual financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to those rules and regulations, but we believe the disclosures made are adequate to make the information presented not misleading. In the opinion of management, all adjustments, consisting of normal and recurring adjustments, necessary for a fair presentation have been included in the condensed consolidated unaudited financial statements included herein. These statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our 2019 Annual Report on Form

10-K.

On April 3, 2020, United Technologies Corporation completed the spin-off of Carrier Corporation into an independent, publicly traded company, now named Carrier Global Corporation (NYSE: CARR), which we refer to as Carrier.

The condensed consolidated unaudited financial statements contained in this report include the accounts of Watsco, all of its wholly owned subsidiaries and the accounts of three joint ventures with Carrier

in each of which Watsco maintains a controlling interest. All significant intercompany balances and transactions have been eliminated in consolidation.

The results of operations for the quarter and six months ended June 30, 2020 are not necessarily indicative of the results to be expected for the year ending December 31, 2020. Sales of residential central air conditioners, heating equipment, and parts and supplies are seasonal. Furthermore, profitability can be impacted favorably or unfavorably based on weather patterns, particularly during the Summer and Winter selling seasons. Demand related to the residential central air conditioning replacement market is typically highest in the second and third quarters, and demand for heating equipment is usually highest in the fourth quarter. Demand related to the new construction sectors throughout most of the markets we serve tends to be fairly evenly distributed throughout the year and depends largely on housing completions and related weather and economic conditions.

Use of Estimates

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

Impact of COVID-19 Pandemic

A novel strain of coronavirus, COVID-19, surfaced in December 2019 and has spread around the world, including to the United States. In March 2020, the World Health Organization declared COVID-19 a pandemic.

The COVID-19 pandemic has impacted and could further impact our operations and the operations of our suppliers and vendors as a result of quarantines, facility closures, illnesses, and travel and logistics restrictions. The extent to which the COVID-19 pandemic impacts our business, results of operations, and financial condition will depend on future developments, which are highly uncertain and cannot be predicted, including, but not limited to the magnitude, duration, spread, severity, and impact of the COVID-19 pandemic, the effects of the COVID-19 pandemic on our employees, customers, suppliers, and vendors, and to what extent normal economic and operating conditions can resume. Even after the COVID-19 pandemic has subsided, we may continue to experience adverse impacts to our business as a result of any economic recession or depression that has occurred

as a result of

the

OVID-19

pandemic

. Therefore, we cannot reasonably estimate the impact at this time.

Recently Adopted Accounting Standards

Financial Instruments—Credit Losses

In June 2016, the Financial Accounting Standards Board (“FASB”) issued guidance that modifies the impairment model to utilize an expected loss methodology in place of the incurred loss methodology for financial instruments, including trade receivables, contract assets, long-term receivables and

off-balance

sheet credit exposures. Under the new standard, an entity will be required to consider a broader range of information to estimate expected credit losses, including historical information, current conditions and a reasonable

forecast period, which may result in earlier recognition of certain losses. This guidance is effective for interim and annual periods beginning after December 15, 2019 using a modified retrospective approach. The adoption of this guidance did not have a material impact on our consolidated financial statements.

Intangibles—Goodwill and Other

In January 2017, the FASB issued guidance to simplify the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. Under this updated standard, an entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, but the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. An entity also should consider income tax effects from any

tax-deductible

goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if any. This guidance is effective prospectively and is effective for interim and annual periods beginning after December 15, 2019 with early adoption permitted. The adoption of this guidance did not have a material impact on our consolidated financial statements.

REVENUES

6 Months Ended

Jun. 30, 2020

REVENUES

Disaggregation of Revenues

The following table presents our revenues disaggregated by primary geographical regions and major product lines within our single reporting segment:


	Quarter Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
Primary Geographical Regions:
United States	$	1,226,649		$	1,219,208		$	2,126,193		$	2,025,719
Canada		71,917			77,751			127,258			137,007
Latin America and the Caribbean		56,819			74,895			110,090			140,406

	$	1,355,385		$	1,371,854		$	2,363,541		$	2,303,132

Major Product Lines:
HVAC equipment		71	%		69	%		69	%		68	%
Other HVAC products		26	%		28	%		28	%		28	%
Commercial refrigeration products		3	%		3	%		3	%		4	%

		100	%		100	%		100	%		100	%

EARNINGS PER SHARE

6 Months Ended

Jun. 30, 2020

EARNINGS PER SHARE

3.	EARNINGS PER SHARE

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


	Quarter Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Basic Earnings per Share:
Net income attributable to Watsco, Inc. shareholders	$	86,578	$	90,155	$	117,080	$	125,192
Less: distributed and undistributed earnings allocated to non-vested restricted common stock		7,439		7,512		11,082		10,355

Earnings allocated to Watsco, Inc. shareholders	$	79,139	$	82,643	$	105,998	$	114,837


Weighted-average common shares outstanding—Basic		35,042,958		34,435,099		35,019,003		34,411,738

Basic earnings per share for Common and Class B common stock	$	2.26	$	2.40	$	3.03	$	3.34
Allocation of earnings for Basic:
Common stock	$	73,323	$	76,456	$	98,202	$	106,234
Class B common stock		5,816		6,187		7,796		8,603

	$	79,139	$	82,643	$	105,998	$	114,837

Diluted Earnings per Share:
Net income attributable to Watsco, Inc. shareholders	$	86,578	$	90,155	$	117,080	$	125,192
Less: distributed and undistributed earnings allocated to non-vested restricted common stock		7,439		7,511		11,082		10,354

Earnings allocated to Watsco, Inc. shareholders	$	79,139	$	82,644	$	105,998	$	114,838


Weighted-average common shares outstanding—Basic		35,042,958		34,435,099		35,019,003		34,411,738
Effect of dilutive stock options		21,753		27,861		25,347		21,210

Weighted-average common shares outstanding—Diluted		35,064,711		34,462,960		35,044,350		34,432,948


Diluted earnings per share for Common and Class B common stock	$	2.26	$	2.40	$	3.02	$	3.34

Anti-dilutive stock options not included above		208,641		174,457		182,122		213,270

Diluted earnings per share for our Common stock assumes the conversion of all of our Class B common stock into Common stock as of the beginning of the fiscal year; therefore, no allocation of earnings to Class B common stock is required. At June 30, 2020 and 2019, our outstanding Class B common stock was convertible into 2,575,482 and 2,577,858 shares of our Common stock, respectively.

OTHER COMPREHENSIVE INCOME (LOSS)

6 Months Ended

Jun. 30, 2020

OTHER COMPREHENSIVE INCOME (LOSS)

4.	OTHER COMPREHENSIVE INCOME (LOSS)

Other comprehensive income (loss) consists of the foreign currency translation adjustment associated with our Canadian operations’ use of the Canadian dollar as their functional currency and changes in the unrealized (losses) gains on cash flow hedging instruments. The tax effects allocated to each component of other comprehensive income (loss) were as follows:


	Quarter Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
Foreign currency translation adjustment	$	9,823		$	5,297		$	(12,106	)	$	10,302

Unrealized (loss) gain on cash flow hedging instruments		(1,606	)		(709	)		1,867			(1,444	)
Income tax benefit (expense)		436			192			(503	)		391

Unrealized (loss) gain on cash flow hedging instruments, net of tax		(1,170	)		(517	)		1,364			(1,053	)


Reclassification of gain on cash flow hedging instruments into earnings		(406	)		(176	)		(249	)		(551	)
Income tax expense		109			48			67			149

Reclassification of gain on cash flow hedging instruments into earnings, net of tax		(297	)		(128	)		(182	)		(402	)


Other comprehensive income (loss)	$	8,356		$	4,652		$	(10,924	)	$	8,847

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


Six Months Ended June 30,	2020			2019
Foreign currency translation adjustment:
Beginning balance	$	(38,599	)	$	(46,604	)
Current period other comprehensive (loss) income		(7,927	)		6,695

Ending balance		(46,526	)		(39,909	)

Cash flow hedging instruments:
Beginning balance		(451	)		636
Current period other comprehensive income (loss)		818			(631	)
Reclassification adjustment		(109	)		(242	)

Ending balance		258			(237	)

Accumulated other comprehensive loss, net of tax	$	(46,268	)	$	(40,146	)

PURCHASE OF OWNERSHIP INTEREST FROM JOINT VENTURE

6 Months Ended

Jun. 30, 2020

PURCHASE OF OWNERSHIP INTEREST FROM JOINT VENTURE

5.	PURCHASE OF OWNERSHIP INTEREST FROM JOINT VENTURE

Effective May 31, 2019, we purchased an additional 20% ownership interest in Homans Associates II LLC (“Homans”) from our second joint venture with Carrier, Carrier Enterprise Northeast, LLC

which we refer to as

Carrier Enterprise II

for cash consideration of $32,400, which increased our ownership in Homans to 100%. Homans previously operated as a division of Carrier Enterprise II and subsequent to the purchase operates as a stand-alone subsidiary of the Company with 17 locations in the Northeastern U.S.

INVESTMENT IN UNCONSOLIDATED ENTITY

6 Months Ended

Jun. 30, 2020

INVESTMENT IN UNCONSOLIDATED ENTITY

6.	INVESTMENT IN UNCONSOLIDATED ENTITY

On June 21, 2017, our first joint venture with Carrier, Carrier Enterprise, LLC, which we refer to as Carrier Enterprise I, acquired a 34.9% ownership interest in Russell Sigler, Inc. (“RSI”), an HVAC distributor operating from 30 locations in the Western U.S. We have an 80% controlling interest in Carrier Enterprise I, and Carrier has a 20%

non-controlling

interest. Carrier Enterprise I acquired its ownership interest in RSI for cash consideration of $63,600, of which we contributed $50,880 and Carrier contributed $12,720. Effective June 29, 2018, Carrier Enterprise I acquired an additional 1.4% ownership interest in RSI, which increased Carrier Enterprise I’s ownership interest in RSI to 36.3% for cash consideration of $3,760, of which we contributed $3,008 and Carrier contributed $752. Effective April 22, 2019, Carrier Enterprise I acquired an additional 1.8% ownership interest in RSI for cash consideration of $4,940, of which we contributed $3,952 and Carrier contributed $988. This acquisition increased Carrier Enterprise I’s ownership interest in RSI to 38.1%.

Carrier Enterprise I is a party to a shareholders’ agreement (the “Shareholders’ Agreement”) with RSI and its shareholders. Pursuant to the Shareholders’ Agreement, RSI’s shareholders have the right to sell, and Carrier Enterprise I has the obligation to purchase, their respective shares of RSI for a purchase price determined based on either book value or a multiple of EBIT, the latter of which Carrier Enterprise I used to calculate the price paid for its investment in RSI. RSI’s shareholders may transfer their respective shares of RSI common stock only to members of the Sigler family or to Carrier Enterprise I, and, at any time from and after the date on which Carrier Enterprise I owns 85% or more of RSI’s outstanding common stock, it has the right, but not the obligation, to purchase from RSI’s shareholders the remaining outstanding shares of RSI common stock. Additionally, Carrier Enterprise I has the right to appoint two of RSI’s six board members. Given Carrier Enterprise I’s 38.1% equity interest in RSI and its right to appoint two out of RSI’s six board members, this investment in RSI is accounted for under the equity method.

ACQUISITIONS

6 Months Ended

Jun. 30, 2020

ACQUISITIONS

7.	ACQUISITIONS

N&S Supply of Fishkill, Inc.

On November 26, 2019, one of our wholly owned subsidiaries acquired certain assets and assumed certain liabilities of N&S Supply of Fishkill, Inc., a distributor of air conditioning, heating and plumbing products operating from seven locations in New York and Connecticut. The purchase price was composed of cash consideration of $12,000, the issuance of 22,435 shares of Common stock having a fair value of $4,032 and the payment of certain indebtedness. The purchase price resulted in the recognition of $2,644 in goodwill. The tax basis of the acquired goodwill recognized is deductible for income tax purposes over 15 years.

Peirce-Phelps, Inc.

On August 1, 2019, Carrier Enterprise I acquired substantially all the HVAC assets and assumed certain of the liabilities of Peirce-Phelps, Inc. (“PPI”), an HVAC distributor operating from 19 locations in Pennsylvania, New Jersey, and Delaware, for $85,000 less certain average revolving indebtedness. Consideration for the net purchase price consisted of $10,000 in cash, 372,543 shares of Common stock having a fair value of $58,344, net of a discount for lack of marketability, and the payment of certain average revolving indebtedness. Carrier contributed cash of $17,000 to Carrier Enterprise I in connection with the acquisition of PPI.

The purchase price resulted in the recognition of $28,884 in goodwill and intangibles. The fair value of the identified intangible assets was $19,000 and consisted of $13,500 in trade names and distribution rights, and $5,500 in customer relationships to be amortized over an

18-year

period. The tax basis of the acquired goodwill recognized is deductible for income tax purposes over 15 years.

The table below presents the allocation of the total consideration to tangible and intangible assets acquired and liabilities assumed from the acquisition of PPI based on the respective fair values as of August 1, 2019:


Cash and cash equivalents	$	4,299
Accounts receivable		30,719
Inventories		45,491
Other current assets		135
Property and equipment		2,544
Operating lease right-of-use assets		19,072
Goodwill		9,884
Intangibles		19,000
Other assets		299
Accounts payable		(11,079	)
Accrued expenses and other current liabilities		(13,038	)
Operating lease liabilities, net of current portion		(14,100	)

Total	$	93,226

Dunphey & Associates Supply Co., Inc.

On April 2, 2019, one of our wholly owned subsidiaries acquired certain assets and assumed certain liabilities of Dunphey & Associates Supply Co., Inc., a distributor of air conditioning and heating products operating from seven locations in New Jersey, New York and Connecticut, for cash consideration of $16,758 and the issuance of 50,952 shares of Common stock having a fair value of $6,891, net of a discount for lack of marketability. The purchase price resulted in the recognition of $8,974 in goodwill and intangibles. The fair value of the identified intangible assets was $5,300 and consisted of $2,500 trade names and trademarks, and $2,800 in customer relationships to be amortized over a

15-year

period. The tax basis of the acquired goodwill recognized is deductible for income tax purposes over 15 years.

The results of operations of these acquisitions have been included in the consolidated financial statements from their respective dates of acquisition. The pro forma effect of the acquisitions was not deemed significant to the consolidated financial statements.

DEBT

6 Months Ended

Jun. 30, 2020

DEBT

We maintain an unsecured, syndicated multicurrency revolving credit agreement, which we use to fund seasonal working capital needs and for other general corporate purposes, including acquisitions, dividends (if and as declared by our Board of Directors), capital expenditures, stock repurchases and issuances of letters of credit. On April 10, 2020, we increased the aggregate borrowing capacity of our revolving credit agreement from $500,000

to $560,000.

The credit agreement matures on December 5, 2023.

At June 30, 2020 and December 31, 2019, $33,357 and $155,700, respectively, were outstanding under the revolving credit agreement. The revolving credit agreement contains customary affirmative and negative covenants, including financial covenants with respect to consolidated leverage and interest coverage ratios, and other customary restrictions. We believe we were in compliance with all covenants at June 30, 2020.

DERIVATIVES

6 Months Ended

Jun. 30, 2020

DERIVATIVES

9.	DERIVATIVES

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

Cash Flow Hedging Instruments

We enter into foreign currency forward contracts that are designated as cash flow hedges. The settlement of these derivatives results in reclassifications from accumulated other comprehensive loss to earnings for the period in which the settlement of these instruments occurs. The maximum period for which we hedge our cash flow using these instruments is 12 months. Accordingly, at June 30, 2020, all of our open foreign currency forward contracts had maturities of one year or less. The total notional value of our foreign currency exchange contracts designated as cash flow hedges at June 30, 2020 was $33,200, and such contracts have varying terms expiring through January 2021.

The impact from foreign exchange derivative instruments designated as cash flow hedges was as follows:


	Quarter Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
(Loss) gain recorded in accumulated other comprehensive loss	$	(1,606	)	$	(709	)	$	1,867		$	(1,444	)
Gain reclassified from accumulated other comprehensive loss into earnings	$	(406	)	$	(176	)	$	(249	)	$	(551	)

At June 30, 2020, we expected an estimated $585

pre-tax

gain

to be reclassified into earnings to reflect the fixed prices obtained from foreign exchange hedging within the next 12 months.

Derivatives Not Designated as Hedging Instruments

We have also entered into foreign currency forward and option contracts that are either not designated as hedges or did not qualify for hedge accounting. These derivative instruments were effective economic hedges for all of the periods presented. The fair value gains and losses on these contracts are recognized in earnings as a component of selling, general and administrative expenses. The total notional value of our foreign currency exchange contracts not designated as hedging instruments at June 30, 2020 was $5,900, and such contracts

subsequently expired

during July 2020

We recognized losses of $317 and $190 from foreign currency forward and option contracts not designated as hedging instruments in our condensed consolidated unaudited statements of income for the quarters ended June 30, 2020 and 2019, respectively. We recognized gains (losses) of $511 and $(303)

from foreign currency forward and option contracts not designated as hedging instruments in our condensed consolidated unaudited statements of income for the

six months ended June 30, 2020 and 2019,

respectively.

The following table summarizes the fair value of derivative instruments, which consist solely of foreign exchange contracts, included in other current assets and accrued expenses and other current liabilities in our condensed consolidated unaudited balance sheets. See Note


	Asset Derivatives				Liability Derivatives
	June 30, 2020		December 31, 2019		June 30, 2020		December 31, 2019
Derivatives designated as hedging instruments	$	400	$	—	$	445	$	944
Derivatives not designated as hedging instruments		—		—		16		63

Total derivative instruments	$	400	$	—	$	461	$	1,007

FAIR VALUE MEASUREMENTS

6 Months Ended

Jun. 30, 2020

FAIR VALUE MEASUREMENTS

10.	FAIR VALUE MEASUREMENTS

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


		Total		Fair Value Measurements at June 30, 2020 Using
	Balance Sheet Location	Total		Level 1		Level 2		Level 3
Assets:
Derivative financial instruments	Other current assets	$	400	$	—	$	400	$	—
Equity securities	Other assets	$	357	$	357	$	—	$	—
Liabilities:
Derivative financial instruments	Accrued expenses and other current liabilities	$	461	$	—	$	461	$	—

		Total		Fair Value Measurements at December 31, 2019 Using
	Balance Sheet Location	Total		Level 1		Level 2		Level 3
Assets:
Equity securities	Other assets	$	402	$	402	$	—	$	—
Liabilities:
Derivative financial instruments	Accrued expenses and other current liabilities	$	1,007	$	—	$	1,007	$	—

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

Equity securities

– these 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

– these derivatives are foreign currency forward and option contracts. See Note 9. 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.

- Definition

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.

+ References + Details

SHAREHOLDERS' EQUITY

6 Months Ended

Jun. 30, 2020

SHAREHOLDERS' EQUITY

11.	SHAREHOLDERS’ EQUITY

Common Stock Dividends

We paid cash dividends of $1.775, $1.60, $3.375, and $3.20 per share of both Common stock and Class B common stock during the quarters and six months ended June 30, 2020 and 2019, respectively.

Non-Vested

Restricted Stock

During the quarter and six months ended June 30, 2020, 1,504 shares of Common and Class B common stock with an aggregate fair market value of $243, and 6,332 shares of Common and Class B common stock with an aggregate fair market value of $1,034, respectively, 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. During the quarter and six months ended June 30, 2019, 3,608 shares of Common and Class B common stock with an aggregate fair market value of $555, and 6,593 shares of Common and Class B common stock with an aggregate fair market value of $983, respectively, were withheld as payment in lieu of cash to satisfy tax withholding obligations in connection with the vesting of

non-vested

restricted stock. These shares were retired upon delivery.

Exercise of Stock Options

Cash received from Common stock issued as a result of stock options exercised during the quarters and six months ended June 30, 2020 and 2019, was

3,217,

$1,526, $5,405, and $2,243, respectively.

During the quarter and six months ended June 30, 2020, 4,873 shares of Common stock with an aggregate fair market value of $853 were withheld as payment in lieu of cash for stock option exercises. These shares were retired upon delivery.

Employee Stock Purchase Plan

During the quarters ended June 30, 2020 and 2019, we received net proceeds of $475 and $423, respectively, for shares

our

Common

stock purchased

under our employee stock purchase plan. During the six months ended June 30, 2020 and 2019, we received net proceeds of $828 and $833,

respectively, for shares of our Common stock purchased under our employee stock purchase plan.

COMMITMENTS AND CONTINGENCIES

6 Months Ended

Jun. 30, 2020

COMMITMENTS AND CONTINGENCIES

12.	COMMITMENTS AND CONTINGENCIES

Litigation, Claims and Assessments

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

Self-Insurance

Self-insurance reserves are maintained relative to company-wide casualty insurance and health benefit programs. The level of exposure from catastrophic events is limited by the purchase of stop-loss and aggregate liability reinsurance coverage. When estimating the self-insurance liabilities and related reserves, management considers a number of factors, which include historical claims experience, demographic factors, severity factors, and valuations provided by independent third-party actuaries. Management reviews its assumptions with its independent third-party actuaries to evaluate whether the self-insurance reserves are adequate. If actual claims or adverse development of loss reserves occur and exceed these estimates, additional reserves may be required. Reserves in the amounts of $3,977 and $3,062 at June 30, 2020 and December 31, 2019, respectively, were established related to such programs and are included in accrued expenses and other current liabilities in our condensed consolidated unaudited balance sheets.

RELATED PARTY TRANSACTIONS

6 Months Ended

Jun. 30, 2020

RELATED PARTY TRANSACTIONS

13.	RELATED PARTY TRANSACTIONS

Purchases from Carrier and its affiliates comprised 63% of all inventory purchases made during

both

the quarters ended June 30, 2020 and 2019

Purchases from Carrier and its affiliates comprised 60% and 62% of all inventory purchases made during the six months ended June 30, 2020 and 2019, respectively. At June 30, 2020 and December 31, 2019, approximately $139,000 and $86,000, respectively, was payable to Carrier and its affiliates, net of receivables. Our joint ventures with Carrier also sell HVAC products to Carrier and its affiliates. Revenues in our condensed consolidated unaudited statements of income for the quarters and six months ended June 30, 2020 and 2019 included approximately $33,000, $23,000, $55,000, and $44,000, respectively, of sales to Carrier and its affiliates. We believe these transactions are conducted on terms equivalent to an

arm’s-length

basis in the ordinary course of business.

BASIS OF PRESENTATION (Policies)	6 Months Ended
BASIS OF PRESENTATION (Policies)	Jun. 30, 2020
Basis of Consolidation	Basis of Consolidation Watsco, Inc. (collectively with its subsidiaries, “Watsco,” “we,” “us,” or “our”) was incorporated in Florida in 1956 and is the largest distributor of air conditioning, heating and refrigeration equipment and related parts and supplies (“HVAC/R”) in the HVAC/R distribution industry in North America. The accompanying June 30, 2020 interim condensed consolidated unaudited financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and note disclosures normally included in the annual financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been condensed or omitted pursuant to those rules and regulations, but we believe the disclosures made are adequate to make the information presented not misleading. In the opinion of management, all adjustments, consisting of normal and recurring adjustments, necessary for a fair presentation have been included in the condensed consolidated unaudited financial statements included herein. These statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in our 2019 Annual Report on Form 10-K. On April 3, 2020, United Technologies Corporation completed the spin-off of Carrier Corporation into an independent, publicly traded company, now named Carrier Global Corporation (NYSE: CARR), which we refer to as Carrier. The condensed consolidated unaudited financial statements contained in this report include the accounts of Watsco, all of its wholly owned subsidiaries and the accounts of three joint ventures with Carrier , in each of which Watsco maintains a controlling interest. All significant intercompany balances and transactions have been eliminated in consolidation. The results of operations for the quarter and six months ended June 30, 2020 are not necessarily indicative of the results to be expected for the year ending December 31, 2020. Sales of residential central air conditioners, heating equipment, and parts and supplies are seasonal. Furthermore, profitability can be impacted favorably or unfavorably based on weather patterns, particularly during the Summer and Winter selling seasons. Demand related to the residential central air conditioning replacement market is typically highest in the second and third quarters, and demand for heating equipment is usually highest in the fourth quarter. Demand related to the new construction sectors throughout most of the markets we serve tends to be fairly evenly distributed throughout the year and depends largely on housing completions and related weather and economic conditions.
Use of Estimates	Use of Estimates The preparation of condensed consolidated unaudited financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated unaudited financial statements and the reported amounts of revenues and expenses for the reporting period. Significant estimates include valuation reserves for accounts receivable, net realizable value adjustments to inventories, valuation reserves for income taxes, reserves related to loss contingencies and the valuation of goodwill, indefinite-lived intangible assets and long-lived assets. While we believe that these estimates are reasonable, actual results could differ from such estimates.
Impact of COVID-19 Pandemic	Impact of COVID-19 Pandemic A novel strain of coronavirus, COVID-19, surfaced in December 2019 and has spread around the world, including to the United States. In March 2020, the World Health Organization declared COVID-19 a pandemic. The COVID-19 pandemic has impacted and could further impact our operations and the operations of our suppliers and vendors as a result of quarantines, facility closures, illnesses, and travel and logistics restrictions. The extent to which the COVID-19 pandemic impacts our business, results of operations, and financial condition will depend on future developments, which are highly uncertain and cannot be predicted, including, but not limited to the magnitude, duration, spread, severity, and impact of the COVID-19 pandemic, the effects of the COVID-19 pandemic on our employees, customers, suppliers, and vendors, and to what extent normal economic and operating conditions can resume. Even after the COVID-19 pandemic has subsided, we may continue to experience adverse impacts to our business as a result of any economic recession or depression that has occurred as a result of the C OVID-19 pandemic . Therefore, we cannot reasonably estimate the impact at this time.
Recently Adopted Accounting Standards	Recently Adopted Accounting Standards Financial Instruments—Credit Losses In June 2016, the Financial Accounting Standards Board (“FASB”) issued guidance that modifies the impairment model to utilize an expected loss methodology in place of the incurred loss methodology for financial instruments, including trade receivables, contract assets, long-term receivables and off-balance sheet credit exposures. Under the new standard, an entity will be required to consider a broader range of information to estimate expected credit losses, including historical information, current conditions and a reasonable forecast period, which may result in earlier recognition of certain losses. This guidance is effective for interim and annual periods beginning after December 15, 2019 using a modified retrospective approach. The adoption of this guidance did not have a material impact on our consolidated financial statements. Intangibles—Goodwill and Other In January 2017, the FASB issued guidance to simplify the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. Under this updated standard, an entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, but the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. An entity also should consider income tax effects from any tax-deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss, if any. This guidance is effective prospectively and is effective for interim and annual periods beginning after December 15, 2019 with early adoption permitted. The adoption of this guidance did not have a material impact on our consolidated financial statements.

REVENUES (Tables)

6 Months Ended

Jun. 30, 2020

Summary of Disaggregated Revenue

The following table presents our revenues disaggregated by primary geographical regions and major product lines within our single reporting segment:


	Quarter Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
Primary Geographical Regions:
United States	$	1,226,649		$	1,219,208		$	2,126,193		$	2,025,719
Canada		71,917			77,751			127,258			137,007
Latin America and the Caribbean		56,819			74,895			110,090			140,406

	$	1,355,385		$	1,371,854		$	2,363,541		$	2,303,132

Major Product Lines:
HVAC equipment		71	%		69	%		69	%		68	%
Other HVAC products		26	%		28	%		28	%		28	%
Commercial refrigeration products		3	%		3	%		3	%		4	%

		100	%		100	%		100	%		100	%

EARNINGS PER SHARE (Tables)

6 Months Ended

Jun. 30, 2020

Schedule of Basic and Diluted Earnings Per Common Share

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


	Quarter Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Basic Earnings per Share:
Net income attributable to Watsco, Inc. shareholders	$	86,578	$	90,155	$	117,080	$	125,192
Less: distributed and undistributed earnings allocated to non-vested restricted common stock		7,439		7,512		11,082		10,355

Earnings allocated to Watsco, Inc. shareholders	$	79,139	$	82,643	$	105,998	$	114,837


Weighted-average common shares outstanding—Basic		35,042,958		34,435,099		35,019,003		34,411,738

Basic earnings per share for Common and Class B common stock	$	2.26	$	2.40	$	3.03	$	3.34
Allocation of earnings for Basic:
Common stock	$	73,323	$	76,456	$	98,202	$	106,234
Class B common stock		5,816		6,187		7,796		8,603

	$	79,139	$	82,643	$	105,998	$	114,837

Diluted Earnings per Share:
Net income attributable to Watsco, Inc. shareholders	$	86,578	$	90,155	$	117,080	$	125,192
Less: distributed and undistributed earnings allocated to non-vested restricted common stock		7,439		7,511		11,082		10,354

Earnings allocated to Watsco, Inc. shareholders	$	79,139	$	82,644	$	105,998	$	114,838


Weighted-average common shares outstanding—Basic		35,042,958		34,435,099		35,019,003		34,411,738
Effect of dilutive stock options		21,753		27,861		25,347		21,210

Weighted-average common shares outstanding—Diluted		35,064,711		34,462,960		35,044,350		34,432,948


Diluted earnings per share for Common and Class B common stock	$	2.26	$	2.40	$	3.02	$	3.34

Anti-dilutive stock options not included above		208,641		174,457		182,122		213,270

OTHER COMPREHENSIVE INCOME (LOSS) (Tables)

6 Months Ended

Jun. 30, 2020

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

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


	Quarter Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
Foreign currency translation adjustment	$	9,823		$	5,297		$	(12,106	)	$	10,302

Unrealized (loss) gain on cash flow hedging instruments		(1,606	)		(709	)		1,867			(1,444	)
Income tax benefit (expense)		436			192			(503	)		391

Unrealized (loss) gain on cash flow hedging instruments, net of tax		(1,170	)		(517	)		1,364			(1,053	)


Reclassification of gain on cash flow hedging instruments into earnings		(406	)		(176	)		(249	)		(551	)
Income tax expense		109			48			67			149

Reclassification of gain on cash flow hedging instruments into earnings, net of tax		(297	)		(128	)		(182	)		(402	)


Other comprehensive income (loss)	$	8,356		$	4,652		$	(10,924	)	$	8,847

Schedule of Accumulated Other Comprehensive Loss

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


Six Months Ended June 30,	2020			2019
Foreign currency translation adjustment:
Beginning balance	$	(38,599	)	$	(46,604	)
Current period other comprehensive (loss) income		(7,927	)		6,695

Ending balance		(46,526	)		(39,909	)

Cash flow hedging instruments:
Beginning balance		(451	)		636
Current period other comprehensive income (loss)		818			(631	)
Reclassification adjustment		(109	)		(242	)

Ending balance		258			(237	)

Accumulated other comprehensive loss, net of tax	$	(46,268	)	$	(40,146	)

ACQUISITIONS (Tables)

6 Months Ended

Jun. 30, 2020

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block]


Cash and cash equivalents	$	4,299
Accounts receivable		30,719
Inventories		45,491
Other current assets		135
Property and equipment		2,544
Operating lease right-of-use assets		19,072
Goodwill		9,884
Intangibles		19,000
Other assets		299
Accounts payable		(11,079	)
Accrued expenses and other current liabilities		(13,038	)
Operating lease liabilities, net of current portion		(14,100	)

Total	$	93,226

DERIVATIVES (Tables)

6 Months Ended

Jun. 30, 2020

Impact from Foreign Exchange Derivative Instruments Designated as Cash Flow Hedges

The impact from foreign exchange derivative instruments designated as cash flow hedges was as follows:


	Quarter Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
(Loss) gain recorded in accumulated other comprehensive loss	$	(1,606	)	$	(709	)	$	1,867		$	(1,444	)
Gain reclassified from accumulated other comprehensive loss into earnings	$	(406	)	$	(176	)	$	(249	)	$	(551	)

Fair Value of Derivative Instruments and Location in the Balance Sheets


	Asset Derivatives				Liability Derivatives
	June 30, 2020		December 31, 2019		June 30, 2020		December 31, 2019
Derivatives designated as hedging instruments	$	400	$	—	$	445	$	944
Derivatives not designated as hedging instruments		—		—		16		63

Total derivative instruments	$	400	$	—	$	461	$	1,007

FAIR VALUE MEASUREMENTS (Tables)

6 Months Ended

Jun. 30, 2020

Assets and Liabilities Measured at Fair Value on Recurring Basis

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


		Total		Fair Value Measurements at June 30, 2020 Using
	Balance Sheet Location	Total		Level 1		Level 2		Level 3
Assets:
Derivative financial instruments	Other current assets	$	400	$	—	$	400	$	—
Equity securities	Other assets	$	357	$	357	$	—	$	—
Liabilities:
Derivative financial instruments	Accrued expenses and other current liabilities	$	461	$	—	$	461	$	—

		Total		Fair Value Measurements at December 31, 2019 Using
	Balance Sheet Location	Total		Level 1		Level 2		Level 3
Assets:
Equity securities	Other assets	$	402	$	402	$	—	$	—
Liabilities:
Derivative financial instruments	Accrued expenses and other current liabilities	$	1,007	$	—	$	1,007	$	—

Basis of Presentation - Additional Information (Detail)	Jun. 30, 2020 Entity
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Number of joint ventures	3

Summary of Disaggregated Revenue (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Disaggregation of Revenue [Line Items]
Revenues from product lines, percentage	100.00%	100.00%	100.00%	100.00%
Revenues	$ 1,355,385	$ 1,371,854	$ 2,363,541	$ 2,303,132
United States
Disaggregation of Revenue [Line Items]
Revenues	1,226,649	1,219,208	2,126,193	2,025,719
Canada
Disaggregation of Revenue [Line Items]
Revenues	71,917	77,751	127,258	137,007
Latin America and Caribbean
Disaggregation of Revenue [Line Items]
Revenues	$ 56,819	$ 74,895	$ 110,090	$ 140,406
HVAC Equipment
Disaggregation of Revenue [Line Items]
Revenues from product lines, percentage	71.00%	69.00%	69.00%	68.00%
Other HVAC Products
Disaggregation of Revenue [Line Items]
Revenues from product lines, percentage	26.00%	28.00%	28.00%	28.00%
Commercial Refrigeration Products
Disaggregation of Revenue [Line Items]
Revenues from product lines, percentage	3.00%	3.00%	3.00%	4.00%

Schedule of Basic and Diluted Earnings per Common Share (Detail) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Net income attributable to Watsco, Inc. shareholders	$ 86,578	$ 90,155	$ 117,080	$ 125,192
Less: distributed and undistributed earnings allocated to non-vested restricted common stock	7,439	7,512	11,082	10,355
Earnings allocated to Watsco, Inc. shareholders - Basic	$ 79,139	$ 82,643	$ 105,998	$ 114,837
Weighted-average common shares outstanding—Basic	35,042,958	34,435,099	35,019,003	34,411,738
Basic earnings per share for Common and Class B common stock	$ 2.26	$ 2.40	$ 3.03	$ 3.34
Net income attributable to Watsco, Inc. shareholders	$ 86,578	$ 90,155	$ 117,080	$ 125,192
Less: distributed and undistributed earnings allocated to non-vested restricted common stock - Diluted	7,439	7,511	11,082	10,354
Earnings allocated to Watsco, Inc. shareholders - Diluted	$ 79,139	$ 82,644	$ 105,998	$ 114,838
Weighted-average common shares outstanding—Basic	35,042,958	34,435,099	35,019,003	34,411,738
Effect of dilutive stock options	21,753	27,861	25,347	21,210
Weighted-average common shares outstanding - Diluted	35,064,711	34,462,960	35,044,350	34,432,948
Diluted earnings per share for Common and Class B common stock	$ 2.26	$ 2.40	$ 3.02	$ 3.34
Anti-dilutive stock options not included above	208,641	174,457	182,122	213,270
Common Stock
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Earnings allocated to Watsco, Inc. shareholders - Basic	$ 73,323	$ 76,456	$ 98,202	$ 106,234
Class B Common Stock
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Earnings allocated to Watsco, Inc. shareholders - Basic	$ 5,816	$ 6,187	$ 7,796	$ 8,603

Earnings Per Share - Additional Information (Detail) - shares	Jun. 30, 2020	Jun. 30, 2019
Earnings Per Share [Line Items]
Class B common stock conversion, number of shares	2,575,482	2,577,858

Schedule of Tax Effects Allocated to Each Component of Other Comprehensive Income (Loss) (Detail) - USD ($) $ in Thousands	3 Months Ended				6 Months Ended
	Jun. 30, 2020	Mar. 31, 2020	Jun. 30, 2019	Mar. 31, 2019	Jun. 30, 2020	Jun. 30, 2019
Components Of Other Comprehensive Income Loss [Line Items]
Foreign currency translation adjustment	$ 9,823		$ 5,297		$ (12,106)	$ 10,302
Unrealized gain (loss) on cash flow hedging instruments	(1,606)		(709)		1,867	(1,444)
Income tax benefit (expense)	436		192		(503)	391
Unrealized (loss) gain on cash flow hedging instruments, net of tax	(1,170)		(517)		1,364	(1,053)
Reclassification of gain on cash flow hedging instruments into earnings	(406)		(176)		(249)	(551)
Income tax expense	109		48		67	149
Reclassification of gain on cash flow hedging instruments into earnings, net of tax	(297)		(128)		(182)	(402)
Other comprehensive income (loss)	$ 8,356	$ (19,280)	$ 4,652	$ 4,195	$ (10,924)	$ 8,847

Schedule of Accumulated Other Comprehensive Loss (Detail) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance	$ (39,050)
Ending balance	(46,268)	$ (40,146)
Foreign Currency Translation Adjustment
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance	(38,599)	(46,604)
Current period other comprehensive income (loss)	(7,927)	6,695
Ending balance	(46,526)	(39,909)
Cash Flow Hedging Instruments
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance	(451)	636
Current period other comprehensive income (loss)	818	(631)
Reclassification adjustment	(109)	(242)
Ending balance	$ 258	$ (237)

Purchase of Ownership Interest from Joint Venture - Additional Information (Detail) - Homans Associates II LLC [Member] $ in Thousands	May 31, 2019 USD ($) Location
Business Acquisition [Line Items]
Additional ownership interest acquired in subsidiary	20.00%
Percentage of ownership interest	100.00%
Cash consideration paid to obtain additional ownership \| $	$ 32,400
Number of locations in which the company operates \| Location	17

Investment in Unconsolidated Entity - Additional Information (Detail) $ in Thousands				6 Months Ended
	Apr. 22, 2019 USD ($)	Jun. 29, 2018 USD ($)	Jun. 21, 2017 USD ($) Location	Jun. 30, 2019 USD ($)	Jun. 30, 2020
Schedule of Equity Method Investments [Line Items]
Investment in unconsolidated entity				$ 4,940
Proceeds from non-controlling interest for investment in unconsolidated entity				$ 988
Carrier Enterprise I
Schedule of Equity Method Investments [Line Items]
Ownership percentage by parent			80.00%
Ownership percentage, by non-controlling owners			20.00%
Russell Sigler Inc
Schedule of Equity Method Investments [Line Items]
Total ownership interest	38.10%	36.30%	34.90%
Investment in unconsolidated entity	$ 4,940	$ 3,760	$ 63,600
Contribution to investment in unconsolidated entity by controlling interest	3,952	3,008	50,880
Proceeds from non-controlling interest for investment in unconsolidated entity	$ 988	$ 752	$ 12,720
Ownership percentage needed for right to purchase up to 100%					85.00%
Equity method investment, additional ownership interest acquired	1.80%	1.40%
Russell Sigler Inc \| Western United States
Schedule of Equity Method Investments [Line Items]
Number of locations \| Location			30

Acquisitions - Schedule of Recognized Identified Assets Acquired and Liabilities Assumed (Detail) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019	Aug. 01, 2019
Business Acquisition [Line Items]
Operating lease right-of-use assets	$ 226,544	$ 223,369
Operating lease liabilities, net of current portion	$ (157,214)	$ (154,271)
Peirce Phelps PPI [Member]
Business Acquisition [Line Items]
Cash and cash equivalents			$ 4,299
Accounts receivable			30,719
Inventories			45,491
Other current assets			135
Property and equipment			2,544
Operating lease right-of-use assets			19,072
Goodwill			9,884
Intangibles			19,000
Other assets			299
Accounts payable			(11,079)
Accrued expenses and other current liabilities			(13,038)
Operating lease liabilities, net of current portion			(14,100)
Total			$ 93,226

Acquisitions - Additional Information (Detail) $ in Thousands			1 Months Ended	6 Months Ended
	Aug. 01, 2019 USD ($) Location shares	Apr. 02, 2019 USD ($) Location shares	Nov. 26, 2019 USD ($) Location shares	Jun. 30, 2019 USD ($)
Business Acquisition [Line Items]
Fair value of equity shares issued				$ 7,450
N&S Supply of Fishkill, Inc
Business Acquisition [Line Items]
Number of locations in which the company operates \| Location			7
Cash consideration			$ 12,000
Stock issued for acquisition \| shares			22,435
Fair value of equity shares issued			$ 4,032
Number of years goodwill is deductible for tax purposes			15 years
Goodwill Acquired			$ 2,644
Peirce Phelps PPI [Member]
Business Acquisition [Line Items]
Number of locations in which the company operates \| Location	19
Business combination recognized identifiable assets acquired and liabilities assumed net	$ 85,000
Cash consideration	$ 10,000
Stock issued for acquisition \| shares	372,543
Fair value of equity shares issued	$ 58,344
Proceeds from non-controlling interest for Business Acquisition	17,000
Goodwill and intangibles acquired	28,884
Intangible assets acquired	$ 19,000
Number of years goodwill is deductible for tax purposes	15 years
Goodwill Acquired	$ 9,884
Peirce Phelps PPI [Member] \| Customer Relationships [Member]
Business Acquisition [Line Items]
Intangible assets acquired	$ 5,500
Amortization period	18 years
Peirce Phelps PPI [Member] \| Trade Names And Distribution Rights [Member]
Business Acquisition [Line Items]
Intangible assets acquired	$ 13,500
Dunphey Associates Supply Co [Member]
Business Acquisition [Line Items]
Number of locations in which the company operates \| Location		7
Cash consideration		$ 16,758
Stock issued for acquisition \| shares		50,952
Fair value of equity shares issued		$ 6,891
Goodwill and intangibles acquired		8,974
Intangible assets acquired		$ 5,300
Number of years goodwill is deductible for tax purposes		15 years
Dunphey Associates Supply Co [Member] \| Customer Relationships [Member]
Business Acquisition [Line Items]
Intangible assets acquired		$ 2,800
Amortization period		15 years
Dunphey Associates Supply Co [Member] \| Trade Names And Distribution Rights [Member]
Business Acquisition [Line Items]
Intangible assets acquired		$ 2,500

Debt - Additional Information (Detail) - USD ($) $ in Thousands	Jun. 30, 2020	Apr. 10, 2020	Dec. 31, 2019	Dec. 05, 2018
Debt Instrument [Line Items]
Borrowings under revolving credit agreement	$ 33,357		$ 155,700
Maximum capacity under revolving credit agreement		$ 560,000		$ 500,000

- Definition

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

Impact from Foreign Exchange Derivative Instruments Designated as Cash Flow Hedges (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Derivative Instruments, Gain (Loss) [Line Items]
(Loss) gain recorded in accumulated other comprehensive loss	$ (1,606)	$ (709)	$ 1,867	$ (1,444)
Foreign Currency Forward Contracts \| Cash Flow Hedge
Derivative Instruments, Gain (Loss) [Line Items]
(Loss) gain recorded in accumulated other comprehensive loss	(1,606)	(709)	1,867	(1,444)
Gain reclassified from accumulated other comprehensive loss into earnings	$ (406)	$ (176)	$ (249)	$ (551)

Fair Value of Derivative Instruments and Location in the Balance Sheets (Detail) - Foreign Exchange Forward And Option Contracts [Member] - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Derivatives, Fair Value [Line Items]
Derivative instruments, assets derivatives	$ 400
Derivative instruments, liabilities derivatives	461	$ 1,007
Derivatives Designated as Hedging Instruments
Derivatives, Fair Value [Line Items]
Derivative instruments, assets derivatives	400
Derivative instruments, liabilities derivatives	445	944
Not Designated as Hedging Instrument, Economic Hedge [Member]
Derivatives, Fair Value [Line Items]
Derivative instruments, liabilities derivatives	$ 16	$ 63

Derivatives - Additional Information (Detail) - USD ($)	3 Months Ended		6 Months Ended
Derivatives - Additional Information (Detail) - USD ($)	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Foreign Currency Forward Contracts \| Cash Flow Hedge
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Notional value of derivatives	$ 33,200,000		$ 33,200,000
Contract maturity period			one year or less
Contract expiring terms			2021-01
Maximum length of time hedged in cash flow hedge			12 months
Pre-tax gain to be reclassified into earnings within the next 12 months	585,000		$ 585,000
Foreign Exchange Forward And Option Contracts [Member] \| Not Designated as Hedging Instrument, Economic Hedge [Member]
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Notional value of derivatives	5,900,000		$ 5,900,000
Contract expiring terms			2020-07
(Loss) gain from foreign currency forward and option contracts not designated as hedging instruments	$ (317,000)	$ (190,000)	$ 511,000	$ (303,000)

Assets and Liabilities Carried at Fair Value Measured on Recurring Basis (Detail) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Other Current Assets
Assets:
Derivative financial instruments	$ 400
Other assets
Assets:
Equity securities	357	$ 402
Accrued expenses and other current liabilities
Liabilities:
Derivative financial instruments	461	1,007
Fair Value Measurements, Level 1 \| Other assets
Assets:
Equity securities	357	402
Fair Value Measurements, Level 2 \| Other Current Assets
Assets:
Derivative financial instruments	400
Fair Value Measurements, Level 2 \| Accrued expenses and other current liabilities
Liabilities:
Derivative financial instruments	$ 461	$ 1,007

Shareholders' Equity - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Stockholders Equity Note [Line Items]
Shares withheld as payment for tax withholdings related to share based compensation, market value			$ 1,034	$ 983
Common and Class B Common Stock \| Non-Vested Restricted Stock
Stockholders Equity Note [Line Items]
Shares withheld as payment for tax withholdings related to share based compensation, market value	$ 243	$ 555	$ 1,034	$ 983
Shares withheld as payment for tax withholdings related to share based compensation, shares	1,504	3,608	6,332	6,593
Common Stock \| Stock Option
Stockholders Equity Note [Line Items]
Net proceeds from the sale of Common stock	$ 3,217	$ 1,526	$ 5,405	$ 2,243
Shares withheld as payment for tax withholdings related to share based compensation, market value	$ 853		$ 853
Shares withheld as payment for tax withholdings related to share based compensation, shares	4,873		4,873
Common Stock \| Employee Stock Purchase Plan [Member]
Stockholders Equity Note [Line Items]
Net proceeds from shares purchased under ESPP	$ 475	$ 423	$ 828	$ 833
Common Stock \| Class B Common Stock
Stockholders Equity Note [Line Items]
Cash dividends paid per share of Common and Class B common stock	$ 1.775	$ 1.60	$ 3.375	$ 3.20

Commitments and Contingencies - Additional Information (Detail) - USD ($) $ in Thousands	Jun. 30, 2020	Dec. 31, 2019
Commitments and Contingencies Disclosure [Line Items]
Self-insurance reserves	$ 3,977	$ 3,062

Related Party Transactions - Additional Information (Detail) - Carrier and Its Affiliates - Supplier Concentration Risk - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019
Related Party Transaction [Line Items]
Amount payable to Carrier and its affiliates, net of receivables	$ 139,000		$ 139,000		$ 86,000
Revenues from sales to Carrier and its affiliates	$ 33,000	$ 23,000	$ 55,000	$ 44,000
Cost of Goods, Total
Related Party Transaction [Line Items]
Percentage of purchases from key suppliers	63.00%	63.00%	60.00%	62.00%