Cover Page
Cover Page - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Feb. 21, 2023 | Jun. 30, 2022 | |
Document Information [Line Items] | |||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2022 | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
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 Annual Report | true | ||
Document Transition Report | false | ||
Entity Tax Identification Number | 59-0778222 | ||
Entity Address, City or Town | Miami | ||
Entity Address, Postal Zip Code | 33133 | ||
Entity Address, Address Line One | 2665 South Bayshore Drive | ||
Entity Address, Address Line Two | Suite 901 | ||
Entity Address, State or Province | FL | ||
City Area Code | 305 | ||
Local Phone Number | 714-4100 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
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 | ||
Entity Public Float | $ 8,072 | ||
ICFR Auditor Attestation Flag | false | ||
Auditor Firm ID | 185 | ||
Auditor Name | KPMG LLP | ||
Auditor Location | Miami, FL | ||
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 | 33,288,922 | ||
Common Class B [Member] | |||
Document Information [Line Items] | |||
Trading Symbol | WSOB | ||
Security Exchange Name | NYSE | ||
Title of 12(b) Security | Class B common stock, $0.50 par value | ||
Entity Common Stock, Shares Outstanding | 5,539,079 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Revenues | $ 7,274,344 | $ 6,280,192 | $ 5,054,928 |
Cost of sales | 5,244,055 | 4,612,647 | 3,832,107 |
Gross profit | 2,030,289 | 1,667,545 | 1,222,821 |
Selling, general and administrative expenses | 1,221,382 | 1,058,316 | 833,051 |
Other income | 22,671 | 19,299 | 11,264 |
Operating income | 831,578 | 628,528 | 401,034 |
Interest expense, net | 2,165 | 996 | 1,239 |
Income before income taxes | 829,413 | 627,532 | 399,795 |
Income taxes | 125,717 | 128,797 | 76,623 |
Net income | 703,696 | 498,735 | 323,172 |
Less: net income attributable to non-controlling interest | 102,529 | 79,790 | 53,593 |
Net income attributable to Watsco, Inc. | $ 601,167 | $ 418,945 | $ 269,579 |
Earnings per share for Common and Class B common stock: | |||
Basic | $ 15.46 | $ 10.83 | $ 7.03 |
Diluted | $ 15.41 | $ 10.78 | $ 7.01 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Net income | $ 703,696 | $ 498,735 | $ 323,172 |
Other comprehensive (loss) income, net of tax | |||
Foreign currency translation adjustment | (20,305) | 936 | 6,272 |
Unrealized gain on cash flow hedging instruments | 0 | 70 | 880 |
Reclassification of loss (gain) on cash flow hedging instruments into earnings | 0 | 219 | (418) |
Other comprehensive (loss) income | (20,305) | 1,225 | 6,734 |
Comprehensive income | 683,391 | 499,960 | 329,906 |
Less: comprehensive income attributable to non-controlling interest | 95,758 | 80,324 | 56,144 |
Comprehensive income attributable to Watsco, Inc. | $ 587,633 | $ 419,636 | $ 273,762 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 147,505 | $ 118,268 |
Accounts receivable, net | 747,110 | 698,456 |
Inventories, net | 1,370,173 | 1,115,469 |
Other current assets | 33,951 | 29,207 |
Total current assets | 2,298,739 | 1,961,400 |
Property and equipment, net | 125,424 | 111,019 |
Operating lease right-of-use assets | 317,314 | 268,528 |
Goodwill | 430,711 | 434,019 |
Intangible assets, net | 175,191 | 186,896 |
Investment in unconsolidated entity | 132,802 | 114,808 |
Other assets | 8,033 | 9,191 |
Total assets | 3,488,214 | 3,085,861 |
Current liabilities: | ||
Current portion of long-term obligations | 90,597 | 84,501 |
Borrowings under revolving credit agreement (Note 8) | 56,400 | 0 |
Accounts payable | 456,128 | 364,185 |
Accrued expenses and other current liabilities | 303,397 | 278,036 |
Total current liabilities | 906,522 | 726,722 |
Long-term obligations: | ||
Borrowings under revolving credit agreement (Note 8) | 0 | 89,000 |
Operating lease liabilities, net of current portion | 232,144 | 187,024 |
Finance lease liabilities, net of current portion | 11,388 | 9,189 |
Total long-term obligations | 243,532 | 285,213 |
Deferred income taxes and other liabilities | 89,882 | 76,511 |
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 | 973,060 | 1,003,932 |
Accumulated other comprehensive loss, net of tax | (47,710) | (34,176) |
Retained earnings | 1,029,516 | 760,796 |
Treasury stock, at cost, 4,823,988 shares of Common stock and 48,263 shares of Class B common stock at both December 31, 2022 and 2021, respectively | (87,440) | (87,440) |
Total Watsco, Inc. shareholders' equity | 1,889,237 | 1,664,948 |
Non-controlling interest | 359,041 | 332,467 |
Total shareholders' equity | 2,248,278 | 1,997,415 |
Total liabilities and shareholders' equity | 3,488,214 | 3,085,861 |
Common Stock | ||
Watsco, Inc. shareholders' equity: | ||
Common stock | 19,054 | 18,941 |
Class B Common Stock | ||
Watsco, Inc. shareholders' equity: | ||
Common stock | $ 2,757 | $ 2,895 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2022 | Dec. 31, 2021 |
Preferred stock, par value | $ 0.5 | $ 0.5 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Common Stock | ||
Common stock, par value | $ 0.5 | $ 0.5 |
Common stock, shares authorized | 60,000,000 | 60,000,000 |
Common stock, shares outstanding | 38,108,752 | 37,881,247 |
Treasury stock, shares | 4,823,988 | 4,823,988 |
Class B Common Stock | ||
Common stock, par value | $ 0.5 | $ 0.5 |
Common stock, shares authorized | 10,000,000 | 10,000,000 |
Common stock, shares outstanding | 5,513,386 | 5,790,636 |
Treasury stock, shares | 48,263 | 48,263 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity - USD ($) $ in Thousands | Total | TEC Distribution LLC [Member] | N&S Supply of Fishkill, Inc. [Member] | Makdad Industrial Supply Co Inc [Member] | Acme Refrigeration of Baton Rouge LLC [Member] | Common Stock Makdad Industrial Supply Co Inc [Member] | Common Stock Acme Refrigeration of Baton Rouge LLC [Member] | Common Stock, Class B Common Stock and Preferred Stock | Common Stock, Class B Common Stock and Preferred Stock Makdad Industrial Supply Co Inc [Member] | Common Stock, Class B Common Stock and Preferred Stock Acme Refrigeration of Baton Rouge LLC [Member] | Paid-In Capital | Paid-In Capital N&S Supply of Fishkill, Inc. [Member] | Paid-In Capital Makdad Industrial Supply Co Inc [Member] | Paid-In Capital Acme Refrigeration of Baton Rouge LLC [Member] | Accumulated Other Comprehensive Loss | Retained Earnings | Treasury Stock | Non-controlling Interest | Non-controlling Interest TEC Distribution LLC [Member] |
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 | 323,172 | 269,579 | 53,593 | ||||||||||||||||
Other comprehensive gain (loss) | 6,734 | 4,183 | 2,551 | ||||||||||||||||
Issuances of restricted shares of common stock | $ 92 | (92) | |||||||||||||||||
Issuances of restricted shares of common stock (in shares) | 184,265 | ||||||||||||||||||
Forfeitures of restricted shares of common stock | $ (2) | 2 | |||||||||||||||||
Forfeitures of restricted shares of common stock (in shares) | (3,589) | ||||||||||||||||||
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 | 21,600 | $ 72 | 21,528 | ||||||||||||||||
Stock issuances from exercise of stock options and employee stock purchase plan (in shares) | 144,894 | ||||||||||||||||||
Retirement of common stock | (4,642) | $ (11) | (4,631) | ||||||||||||||||
Retirement of common stock (in shares) | (23,148) | ||||||||||||||||||
Share-based compensation | 21,862 | 21,862 | |||||||||||||||||
Distributions to non-controlling interest | (42,401) | (42,401) | |||||||||||||||||
Cash dividends declared and paid on Common and Class B common stock | (265,713) | (265,713) | |||||||||||||||||
Adjustment to fair value of Common stock issued for N&S Supply of Fishkill, Inc. | $ (161) | $ (161) | |||||||||||||||||
Ending balance at Dec. 31, 2020 | 1,779,761 | $ 21,697 | 950,915 | (34,867) | 636,373 | (87,440) | 293,083 | ||||||||||||
Ending balance (in shares) at Dec. 31, 2020 | 38,521,694 | ||||||||||||||||||
Net income | 498,735 | 418,945 | 79,790 | ||||||||||||||||
Other comprehensive gain (loss) | 1,225 | 691 | 534 | ||||||||||||||||
Issuances of restricted shares of common stock | $ 97 | (97) | |||||||||||||||||
Issuances of restricted shares of common stock (in shares) | 194,643 | ||||||||||||||||||
Forfeitures of restricted shares of common stock | $ (28) | 28 | |||||||||||||||||
Forfeitures of restricted shares of common stock (in shares) | (57,089) | ||||||||||||||||||
Common stock contribution to 401(k) plan | 5,154 | $ 11 | 5,143 | ||||||||||||||||
Common stock contribution to 401(k) plan (in shares) | 22,752 | ||||||||||||||||||
Stock issuances from exercise of stock options and employee stock purchase plan | 22,180 | $ 69 | 22,111 | ||||||||||||||||
Stock issuances from exercise of stock options and employee stock purchase plan (in shares) | 136,641 | ||||||||||||||||||
Retirement of common stock | (2,257) | $ (4) | (2,253) | ||||||||||||||||
Retirement of common stock (in shares) | (7,898) | ||||||||||||||||||
Common stock issued | $ 997 | $ 2,551 | $ 2 | $ 4 | $ 995 | $ 2,547 | |||||||||||||
Common stock issued (in shares) | 3,627 | 8,492 | |||||||||||||||||
Share-based compensation | 24,531 | 24,531 | |||||||||||||||||
Distributions to non-controlling interest | (61,980) | (61,980) | |||||||||||||||||
Investment in TEC Distribution LLC | $ 21,040 | $ 21,040 | |||||||||||||||||
Cash dividends declared and paid on Common and Class B common stock | (295,044) | (295,044) | |||||||||||||||||
Common Stock Released From Escrow Shares | (23,230) | ||||||||||||||||||
Common Stock Released From Escrow Value | 522 | $ (12) | 12 | 522 | |||||||||||||||
Ending balance at Dec. 31, 2021 | 1,997,415 | $ 21,836 | 1,003,932 | (34,176) | 760,796 | (87,440) | 332,467 | ||||||||||||
Ending balance (in shares) at Dec. 31, 2021 | 38,799,632 | ||||||||||||||||||
Net income | 703,696 | 601,167 | 102,529 | ||||||||||||||||
Other comprehensive gain (loss) | (20,305) | (13,534) | (6,771) | ||||||||||||||||
Issuances of restricted shares of common stock | $ 72 | (72) | |||||||||||||||||
Issuances of restricted shares of common stock (in shares) | 143,059 | ||||||||||||||||||
Forfeitures of restricted shares of common stock | $ (7) | 7 | |||||||||||||||||
Forfeitures of restricted shares of common stock (in shares) | (13,000) | ||||||||||||||||||
Common stock contribution to 401(k) plan | 6,746 | $ 11 | 6,735 | ||||||||||||||||
Common stock contribution to 401(k) plan (in shares) | 21,560 | ||||||||||||||||||
Stock issuances from exercise of stock options and employee stock purchase plan | 20,802 | $ 60 | 20,742 | ||||||||||||||||
Stock issuances from exercise of stock options and employee stock purchase plan (in shares) | 120,696 | ||||||||||||||||||
Retirement of common stock | (87,488) | $ (161) | (87,327) | ||||||||||||||||
Retirement of common stock (in shares) | (322,060) | ||||||||||||||||||
Share-based compensation | 29,043 | 29,043 | |||||||||||||||||
Distributions to non-controlling interest | (69,184) | (69,184) | |||||||||||||||||
Cash dividends declared and paid on Common and Class B common stock | (332,447) | (332,447) | |||||||||||||||||
Ending balance at Dec. 31, 2022 | $ 2,248,278 | $ 21,811 | $ 973,060 | $ (47,710) | $ 1,029,516 | $ (87,440) | $ 359,041 | ||||||||||||
Ending balance (in shares) at Dec. 31, 2022 | 38,749,887 |
Consolidated Statements of Sh_2
Consolidated Statements of Shareholders' Equity (Parenthetical) - $ / shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Cash dividends declared and paid, common stock | $ 8.55 | $ 7.625 | $ 6.925 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Cash flows from operating activities: | |||
Net income | $ 703,696 | $ 498,735 | $ 323,172 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 31,683 | 28,127 | 25,908 |
Share-based compensation | 28,821 | 25,365 | 22,129 |
Deferred income tax provision | 13,466 | 5,939 | 40 |
Provision for doubtful accounts | 8,539 | 6,888 | 2,688 |
Non-cash contribution to 401(k) plan | 6,746 | 5,154 | 4,543 |
(Gain) loss on sale of property and equipment | (1,624) | 350 | 17 |
Other income from investment in unconsolidated entity | (22,671) | (19,299) | (11,264) |
Changes in operating assets and liabilities, net of effects of acquisitions: | |||
Accounts receivable, net | (60,154) | (130,414) | (3,559) |
Inventories, net | (259,860) | (243,660) | 139,929 |
Accounts payable and other liabilities | 121,993 | 182,819 | 33,936 |
Other, net | 1,329 | (10,438) | (3,160) |
Net cash provided by operating activities | 571,964 | 349,566 | 534,379 |
Cash flows from investing activities: | |||
Capital expenditures | (35,652) | (25,464) | (16,436) |
Business acquisitions, net of cash acquired | (47) | (129,462) | 0 |
Proceeds from sale of equity securities | 0 | 5,993 | 0 |
Other investment | 0 | (1,000) | 0 |
Proceeds from sale of property and equipment | 1,863 | 1,356 | 94 |
Net cash used in investing activities | (33,836) | (148,577) | (16,342) |
Cash flows from financing activities: | |||
Dividends on Common and Class B common stock | (332,447) | (294,522) | (265,713) |
Repurchases of common stock to satisfy employee withholding tax obligations | (87,107) | (1,092) | (2,299) |
Distributions to non-controlling interest | (69,184) | (61,980) | (42,401) |
Net (repayments) proceeds under revolving credit agreement | (32,600) | 89,000 | (155,700) |
Net repayments of finance lease liabilities | (3,042) | (2,040) | (1,441) |
Payment of fees related to revolving credit agreement | 0 | (22) | (196) |
Net proceeds from issuances of common stock | 20,422 | 21,014 | 19,257 |
Net cash used in financing activities | (503,958) | (228,602) | (448,493) |
Effect of foreign exchange rate changes on cash and cash equivalents | (4,933) | (186) | 2,069 |
Net increase (decrease) in cash and cash equivalents | 29,237 | (27,799) | 71,613 |
Cash and cash equivalents at beginning of year | 118,268 | 146,067 | 74,454 |
Cash and cash equivalents at end of year | 147,505 | 118,268 | 146,067 |
TEC Distribution LLC [Member] | |||
Cash flows from financing activities: | |||
Proceeds from non-controlling interest for investments | $ 0 | $ 21,040 | $ 0 |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2022 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization, Consolidation and Presentation 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. At December 31, 2022, we operated from 673 locations in 42 U.S. states, Canada, Mexico, and Puerto Rico with additional market coverage on an export basis to portions of Latin America and the Caribbean. The consolidated financial statements include the accounts of Watsco, all of its wholly owned subsidiaries, the accounts of four joint ventures with Carrier Global Corporation, which we refer to as Carrier, the accounts of Carrier InterAmerica Corporation, of which we have an 80% controlling interest and Carrier has a 20% non-controlling Impact of the COVID-19 Since COVID-19 COVID-19 COVID-19 COVID-19 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 primarily within cost of sales 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 primarily within selling, general and administrative expenses in our consolidated statements of income. Equity Method Investments Investments in which we have the ability to exercise significant influence, but do not control, are accounted for under the equity method of accounting and are included in investment in unconsolidated entity in our consolidated balance sheets. Under this method of accounting, our proportionate share of the net income or loss of the investee is included in other income in our consolidated statements of income. The excess, if any, of the carrying amount of our investment over our ownership percentage in the underlying net assets of the investee is attributed to certain fair value adjustments with the remaining portion recognized as goodwill. 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, net realizable value adjustments to inventories, 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. 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. We generate our revenue primarily from the sale of finished products to customers; therefore, the significant majority of our contracts are short-term in nature and have only a single performance obligation to deliver products. The performance obligation under such contracts is satisfied when we transfer control of the product to the customer. Some contracts contain a combination of product sales and services, the latter of which is distinct and accounted for as a separate performance obligation. We satisfy our performance obligations for services when we render the services within the agreed-upon service period. Total service revenue is not material and accounted for less than periods presented Revenue is recognized when control transfers to our customers when products are picked up, or via shipment of products or delivery of services. We measure revenue as the amount of consideration we expect to be entitled to receive in exchange for those goods or services, net of any variable considerations (e.g., rights to return product, sales incentives, others) and any taxes collected from customers and subsequently remitted to governmental authorities. Revenue for shipping and handling charges is recognized when products are delivered to the customer. Product Returns We estimate product returns based on historical experience and record them on a gross basis on our balance sheets. Substantially all customer returns relate to products that are returned under manufacturers’ warranty obligations. Accrued sales returns at December 31, 2022 and 2021 of $21,023 and $16,707, respectively, were included in accrued expenses and other current liabilities in our consolidated balance sheets. Sales Incentives We estimate sales incentives expected to be paid over the terms of the programs based on the most likely amounts. Sales incentives are accounted for as a reduction in the transaction price and are generally paid on an annual basis. Practical Expedients We generally expense sales commissions when incurred because the amortization period is one year or less. These costs are recorded within selling, general and administrative expenses. We do not disclose the value of unsatisfied performance obligations for contracts with an original expected length of one year or less. Advertising Costs Advertising costs are expensed as incurred. Advertising expense for the years ended December 31, 2022, 2021, and 2020, were 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 are included in selling, general and administrative expenses. Shipping and handling costs for the years ended December 31, 2022, 2021 and 2020, were respectively. Share-Based Compensation The fair value of stock option and restricted stock awards are expensed net of estimated forfeitures 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. Tax benefits resulting from tax deductions in excess of share-based compensation expense are recognized in our provision for income taxes in our consolidated statements of income. Income Taxes We record U.S. 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 U.S. 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 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 this 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 two-class non-forfeitable two-class two-class 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 and option 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. expenses. Cash Flow Hedge. Fair Value Hedge. See Note 1 6 Loss Contingencies Accruals are recorded for various contingencies including self-insurance, legal proceedings, environmental matters, and other claims that arise in the normal course of business. The estimation process contains uncertainty because accruals are based on judgment, the probability of losses and, where applicable, the consideration of opinions of external legal counsel and actuarially determined estimates. Additionally, we record receivables from third party insurers when recovery has been determined to be probable . |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2022 | |
LEASES | 2. LEASES The components of operating lease expense were as follows: Years Ended December 31, 2022 2021 2020 Lease cost $ 101,578 $ 90,742 $ 82,543 Short-term lease cost 10,226 9,598 6,317 Variable lease cost 1,840 1,868 942 Sublease income (373 ) (332 ) (228 ) $ 113,271 $ 101,876 $ 89,574 Supplemental balance sheet information related to operating leases were as follows: December 31, 2022 2021 ROU assets $ 317,314 $ 268,528 Current $ 87,120 $ 81,928 Operating lease liabilities 232,144 187,024 Total operatin $ 319,264 $ 268,952 Weighted Average Remaining Lease Term (in years) 4.8 years 4.4 years Weighted Average Discount Rate 3.85 % 3.29 % Supplemental cash flow information related to operating le ases we Years Ended December 31, 2022 2021 2020 Operating cash flows for the measurement of operating lease liabilities $ 100,092 $ 91,063 $ 80,921 Operating lease ROU assets obtained in exchange for operating lease obligations $ 140,704 $ 141,198 $ 59,093 At December 31, 2022, maturities of operating lease liabilities over each of the next five years and thereafter were as follows: 2023 $ 97,727 2024 76,563 2025 59,363 2026 44,035 2027 25,273 Thereafter 50,491 Total lease payments 353,452 Less imputed interest 34,188 Total lease liability $ 319,264 At December 31, 2022, we had additional operating leases, primarily for real property, that had not yet commenced. Such leases had estimated future minimum rental commitments of approximately $19,200. These operating leases are expected to commence in 2023 with lea 4-8 |
REVENUES
REVENUES | 12 Months Ended |
Dec. 31, 2022 | |
REVENUES | 3. REVENUES Disaggregation of Revenue s The following table presents our revenues disaggregated by primary geographical regions and major product lines within our single reporting segment: Years Ended December 31, 2022 2021 2020 Primary Geographical Regions: United States $ 6,578,897 $ 5,636,929 $ 4,535,262 Canada 389,119 386,780 301,727 Latin America and the Caribbean 306,328 256,483 217,939 $ 7,274,344 $ 6,280,192 $ 5,054,928 Major Product Lines: HVAC equipment 68 % 69 % 69 % Other HVAC products 28 % 28 % 28 % Commercial refrigeration products 4 % 3 % 3 % 100 % 100 % 100 % |
EARNINGS PER SHARE
EARNINGS PER SHARE | 12 Months Ended |
Dec. 31, 2022 | |
EARNINGS PER SHARE | 4. EARNINGS PER SHARE The following table presents the calculation of basic and diluted earnings per share for our Common and Class B common stock: Years Ended December 31, 2022 2021 2020 Basic Earnings per Share: Net income attributable to Watsco, Inc. shareholders $ 601,167 $ 418,945 $ 269,579 Less: distributed and undistributed earnings allocated to restricted common stock 51,365 37,273 23,140 Earnings allocated to Watsco, Inc. shareholders $ 549,802 $ 381,672 $ 246,439 Weighted-average common shares outstanding - 35,564,203 35,244,230 35,069,516 Basic earnings per share for Common and Class B common stock $ 15.46 $ 10.83 $ 7.03 Allocation of earnings for Basic: Common stock $ 499,792 $ 353,873 $ 228,361 Class B common stock 50,010 27,799 18,078 $ 549,802 $ 381,672 $ 246,439 Diluted Earnings per Share: Net income attributable to Watsco, Inc. shareholders $ 601,167 $ 418,945 $ 269,579 Less: distributed and undistributed earnings allocated to restricted common stock 51,294 37,222 23,140 Earnings allocated to Watsco, Inc. shareholders $ 549,873 $ 381,723 $ 246,439 Weighted-average common shares outstanding - Basic 35,564,203 35,244,230 35,069,516 Effect of dilutive stock options 119,431 179,608 81,055 Weighted-average common shares outstanding - Diluted 35,683,634 35,423,838 35,150,571 Diluted earnings per share for Common and Class B common stock $ 15.41 $ 10.78 $ 7.01 Diluted earnings per share for our Common stock assumes the conversion of all 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, 2022, 2021 Diluted earnings per share excluded 190,462, 40,529, and 19,722 shares for the years ended December 31, 2022, 2021, and 2020, respectively, related to stock options with an exercise price per share greater than the average market value, resulting in an anti-dilutive effect on diluted earnings per share. |
OTHER COMPREHENSIVE (LOSS) INCO
OTHER COMPREHENSIVE (LOSS) INCOME | 12 Months Ended |
Dec. 31, 2022 | |
OTHER COMPREHENSIVE (LOSS) INCOME | 5. OTHER COMPREHENSIVE (LOSS) INCOME Other comprehensive (loss) income consists of the foreign currency translation adjustment associated with our Canadian operations’ use of (loss) income were as follows: Years Ended December 31, 2022 2021 2020 Foreign currency translation adjustment $ (20,305 ) $ 936 $ 6,272 Unrealized gain on cash flow hedging instruments — 97 1,205 Income tax expense — (27 ) (325 ) Unrealized gain on cash flow hedging instruments, net of tax — 70 880 Reclassification of loss (gain) on cash flow hedging instruments into earnings — 305 (574 ) Income tax (benefit) expense — (86 ) 156 Reclassification of loss (gain) on cash flow hedging instruments into earnings, net of tax — 219 (418 ) Other comprehensive (loss) income $ (20,305 ) $ 1,225 $ 6,734 The changes in each component of accumulated other comprehensive loss, net of tax, were as follows: Years Ended December 31, 2022 2021 2020 Foreign currency translation adjustment: Beginning balance $ (34,176 ) $ (34,694 ) $ (38,599 ) Current period other comprehensive (loss) (13,534 ) 518 3,905 Ending balance (47,710 ) (34,176 ) (34,694 ) Cash flow hedging instruments: Beginning balance — (173 ) (451 ) Current period other comprehensive income — 43 528 Reclassification adjustment — 130 (250 ) Ending balance — — (173 ) Accumulated other comprehensive loss, net of tax $ (47,710 ) $ (34,176 ) $ (34,867 ) |
SUPPLIER CONCENTRATION
SUPPLIER CONCENTRATION | 12 Months Ended |
Dec. 31, 2022 | |
SUPPLIER CONCENTRATION | 6. SUPPLIER CONCENTRATION Purchases from our top ten suppliers comprised 84%, 83%, and 85% of all purchases made in 2022, 2021, and 2020, respectively. Our largest supplier, Carrier and its affiliates, accounted for 60%, 61%, and 63% of all purchases made in 2022, 2021, and 2020, respectively. See Note 1 9 At December 31, 2022, $92,402 was recorded as a reduction of inventories related to pricing claim advances, of which was recorded related to pricing claim advances, of which |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2022 | |
PROPERTY AND EQUIPMENT | 7. PROPERTY AND EQUIPMENT Property and equipment, net, consists of: December 31, 2022 2021 Land $ 676 $ 676 Buildings and improvements 93,033 85,857 Machinery, vehicles, and equipment 120,811 108,110 Computer hardware and software 83,354 68,762 Furniture and fixtures 24,029 21,404 321,903 284,809 Accumulated depreciation and amortization (196,479 ) (173,790 ) $ 125,424 $ 111,019 Depreciation and amortization expense related to property and equipment included in selling, general and administrative expenses for the years ended December 31, 2022, 2021, and 2020, were $26,974, $22,566, and $19,963, respectively. |
DEBT
DEBT | 12 Months Ended |
Dec. 31, 2022 | |
DEBT | 8. DEBT We maintain an unsecured, $560,000 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. The credit facility has a seasonal component from October 1 to March 31, during which the borrowing capacity may be reduced to The revolving credit agreement matures on December 5, 2023, and accordingly, borrowings outstanding under the revolving credit agreement are classified as current liabilities in our consolidated balance sheet at December 31, 2022. We believe that we will refinance the revolving credit agreement at or prior to its maturity on similar terms and subject to similar conditions. Borrowings under the credit facility bear interest at either LIBOR-based rates plus a spread, which ranges from 87.5 to 150.0 basis-points (LIBOR plus 87.5 basis-points at December 31, 2022), depending on our ratio of total debt to EBITDA, or on rates based on the highest of the Federal Funds Effective Rate plus 0.5%, the Prime Rate or the Eurocurrency Rate plus 1.0%, in each case plus a spread which ranges from 0 to 50.0 basis-points (0 basis-points at December 31, 2022), 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 7.5 to 20.0 basis-points (7.5 basis-points at December 31, 2022). During 2021, we paid fees of $22 in connection with the increase in the aggregate borrowing capacity of our revolving credit agreement, which are being amortized ratably through the maturity of the facility in December 2023. At December 31, 2022 and December 31, 2021, $56,400 and $89,000, 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 December 31, 2022. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2022 | |
INCOME TAXES | 9. INCOME TAXES The components of income tax expense from our wholly owned operations and investments and our controlling interest in CIAC and joint ventures with Carrier are as follows: Years Ended December 31, 2022 2021 2020 Current: U.S. Federal $ 71,475 $ 91,162 $ 58,895 State 27,202 20,703 12,909 Foreign 13,574 10,993 4,779 112,251 122,858 76,583 Deferred: U.S. Federal 10,766 6,434 218 State 3,695 1,374 21 Foreign (995 ) (1,869 ) (199 ) 5,939 40 Income tax expense $ 125,717 $ 128,797 $ 76,623 We calculate our income tax expense and our effective tax rate for 100% of income attributable to our wholly owned operations and for our controlling interest of income attributable to CIAC and our joint ventures with Carrier, which are primarily taxed as partnerships for income tax purposes. Following is a reconciliation of th e Years Ended December 31, 2022 2021 2020 U.S. federal statutory rate 21.0 % 21.0 % 21.0 % State income taxes, net of federal benefit and other 4.6 3.5 3.3 Excess tax benefits from share-based compensation (8.6 ) (1.7 ) (2.1 ) Tax effects on foreign income 0.3 0.4 0.3 FDII (0.1 ) (0.1 ) — Change in valuation allowance 0.4 0.8 — Tax credits and other (0.4 ) (0.5 ) (0.5 ) Effective income tax rate attributable to Watsco, Inc. 17.2 23.4 22.0 Taxes attributable to non-controlling (2.0 ) (2.9 ) (2.8 ) Effective income tax rate 15.2 % 20.5 % 19.2 % The following is a summary of the significant components of our net deferred tax liabilities: December 31, 2022 2021 Deferred tax assets: Share-based compensation $ 27,037 $ 30,854 Capitalized inventory costs and adjustments 4,366 3,449 Allowance for doubtful accounts 3,326 1,328 Self-insurance reserves 1,975 1,027 Other 8,711 6,081 Net operating loss carryforwards 3,899 3,959 49,314 46,698 Valuation allowance (8,171 ) (5,107 ) Total deferred tax assets 41,143 41,591 Deferred tax liabilities: Deductible goodwil l (88,316 ) (82,704 ) Depreciation (23,806 ) (18,744 ) Unremitted earnings of domestic affiliate s (6,618 ) (5,175 ) Other (3,761 (3,619 ) Total deferred tax liabilities (122,501 ) (110,242 ) Net deferred tax liabilities (1) $ (81,358 ) $ (68,651 ) (1) Net deferred tax liabilities have been included in the consolidated balance sheets in deferred income taxes and Provisions of the Tax Cuts and Jobs Act of 2017 (the “TCJA”) such as the one-time repatriation transition tax and the global intangible low-taxed income (“GILTI”) non-US On March 11, 2021, the America Rescue Plan Act of 2021 (the “ARPA”) was enacted. The ARPA expanded IRC Section 162(m) to include five additional most highly compensated individuals. The expansion of Section 162(m) coverage is effective for tax years beginning after December 31, 2026. Unlike the employees subject to Section 162(m) by virtue of being the Chief Executive Officer (“CEO”), Chief Financial Officer, or three most highly compensated named executive officers, an employee who is identified as one of the “additional” five employees is not considered to be a covered employee indefinitely. The five additional employees will be subject to the annual $1,000 cap on compensation, and will be determined annually. On August 16, 2022, the Inflation Reduction Act (the “IRA”) was enacted, which introduces a new 15% corporate minimum tax based on adjusted financial statement income and a 1% excise tax on stock repurchases, effective January 1, 2023, and provisions intended to mitigate climate change, including tax credit incentives for investments that reduce greenhouse gas emissions. Based on our current analysis of the provisions, this legislation will not have a material impact on our consolidated financial statements. Valuation allowances are provided to reduce the related deferred income tax assets to an amount which will, more likely than not, be realized. The valuation allowance was $ and $ at December 31, 2022 and 2021, respectively. The increase was primarily attributable to the impact on U.S deferred tax assets from share-based compensation deduction limitations related to the expansion of IRC Section 162(m). At December 31, 2022, there were state net operating loss carryforwards of $165,951, some of which expire in 2026 , with the majority having an indefinite carryforward period. At December 31, 2022, there were foreign net operating loss carryforwards of $14,916, which expire in varying amounts from 2036 through 2042. These amounts are available to offset future taxable income. There were no federal net operating loss carryforwards at December 31, 2022. We are subject to U.S. 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 currently under examination by the Internal Revenue Service for the 2019 tax year. We are no longer subject to U.S. federal tax examinations for tax years prior to 2019. For the majority of states and foreign jurisdictions, we are no longer subject to tax examinations for tax years prior to 2018. In addition, we are no longer subject to U.S. Virgin Islands federal tax examinations for tax years prior to 2015. At December 31, 2022 and 2021, the total amount of gross unrecognized tax benefits (excluding the federal benefit received from state positions) was $7,752 and $6,727, respectively. Of these totals, $6,457 and $5,636, 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 policy The changes in gross unrecognized tax benefits were as follows: Balance at December 31, 2019 $ 5,367 Additions based on tax positions related to the current year 1,911 Reductions due to lapse of applicable statute of limitations (773 ) Balance at December 31, 2020 6,505 Additions based on tax positions related to the current year 1,143 Reductions due to lapse of applicable statute of limitations (921 ) Balance at December 31, 2021 6,727 Additions based on tax positions related to the current year 1,867 Reductions due to lapse of applicable statute of limitations (842 ) Balance at December 31, 2022 $ 7,752 |
SHARE-BASED COMPENSATION AND BE
SHARE-BASED COMPENSATION AND BENEFIT PLANS | 12 Months Ended |
Dec. 31, 2022 | |
SHARE-BASED COMPENSATION AND BENEFIT PLANS | 10. SHARE-BASED COMPENSATION AND BENEFIT PLANS Share-Based Compensation Plans We have two share-based compensation plans for employees. The 2021 Incentive Compensation Plan (the “2021 Plan”) provides for the award of a broad variety of share-based compensation alternatives such as restricted stock, non-qualified stock options, incentive stock options, performance awards, dividend equivalents, and stock appreciation rights at no less than of the market price on the date the award is granted. To date, awards under the 2021 Plan consist of non-qualified stock options and restricted stock. Under the 2021 Plan, the number of shares of Common and Class B common stock available for issuance is (i) 2,500,000, plus (ii) 7,327 shares of Common stock or Class B common stock that remained available for grant in connection with awards under the Watsco, Inc. 2014 Incentive Compensation Plan (the “2014 Plan”) on the date on which our shareholders approved the 2021 Plan, plus (iii) shares underlying currently outstanding awards issued under the 2014 Plan, which shares become reissuable under the 2021 Plan to the extent that such underlying shares are not issued due to their forfeiture, expiration, termination or otherwise. A total of two Awards of restricted stock, which are granted at no cost to the employee, vest upon attainment of a specified age, generally toward the end of an employee’s career at age The 2014 Plan expired in 2021; therefore, no additional options may be granted. There were two The following is a summary of stock option activity under the 2021 Plan and the 2014 Plan as of and for the year ended December 31, 2022: Options Weighted- Weighted- (in years) Aggregate Options outstanding at December 31, 2021 602,488 $ 205.30 Granted 104,500 274.38 Exercised (113,230 ) 166.08 Forfeited (24,467 ) 242.32 Expired (9,666 ) 176.80 Options outstanding at December 31, 2022 559,625 $ 225.01 2.74 $ 20,555 Options exercisable at December 31, 2022 130,213 $ 174.30 1.50 $ 9,930 The following is a summary of restricted stock activity as of and for the year ended December 31, 2022: Shares Weighted- Restricted stock outstanding at December 31, 2021 3,459,661 $ 83.94 Granted 143,059 290.55 Vested (1,000,459 ) 37.66 Forfeited (13,000 ) 207.83 Restricted stock outstanding at December 31, 2022 2,589,261 $ 112.53 The weighted-average grant date fair value of restricted stock granted during 2022, 2021, and 2020 was $290.55, $254.73, and $193.89, respectively. The fair value of restricted stock that vested during 2022, 2021, and 2020 was $271,781, $3,646, and $7,354, respectively. Duri ng 2022, 320,468 shares of Class B common stock , which include the 311,408 surrendered shares referenced below with an aggregate fair market value of $87,049 were withheld as payment in lieu of cash to satisfy tax withholding obligations in connection with the vesting of restricted stock. During 2021, 3,858 shares of Class B common stock with an aggregate fair market value of $1,078 were withheld as payment in lieu of cash to satisfy tax withholding obligations in connection with the vesting of restricted stock. During 2020, 11,693 shares of Common and Class B common stock with an aggregate fair market value of $2,299 were withheld as payment in lieu of cash to satisfy tax withholding obligations in connection with the vesting of restricted stock. These shares were retired upon delivery. Vesting of Restricted Stock Held by our CEO On October 15, 2022, 975,622 shares of Class B restricted stock previously granted to our CEO during the period from 1997 to 2011 under various performance-based incentive plans vested. The vested shares had a value of $265,106 based on the closing price of our Class B common stock as of that date, which is deductible in our 2022 income tax return. The vesting of shares provided a cash benefit of approximately $67,000 in 2022 and reduced our provision for income taxes in 2022 by approximately $49,000. This vested value constitutes taxable compensation to our CEO for income tax purposes and was subject to statutory withholding. Upon vesting, we funded $104,319 in statutory withholding, which, in turn, was satisfied by the CEO through a cash payment to us of $19,700 and by the surrendering of 311,408 shares of Class B common stock. Accordingly, 664,214 shares of Class B common stock were retained by the CEO, and we retired the surrendered shares. 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 The following table presents the weighted-average assumptions used for stock options granted: Years Ended December 31, 2022 2021 2020 Expected term in years 4.25 4.25 4.25 Risk-free interest rate 3.04 % 0.79 % 0.26 % Expected volatility 23.10 % 21.85 % 20.89 % Expected dividend yield 2.84 % 2.97 % 3.69 % Grant date fair value $ 46.60 $ 34.79 $ 20.76 Exercise of Stock Options The total intrinsic value of stock options exercised during 2022, 2021, and 2020 was $13,046, $16,903, and $8,753, respectively. Cash received from the exercise of stock options during 2022, 2021, and 2020 was $18,425, $19,338, and $17,608, respectively. The tax benefit from stock option exercises during 2022, 2021, and 2020 was $2,658, $3,595, and $1,586, respectively. During 2022, 2021, and 2020, 1,592 shares of Common stock with an aggregate fair market value of $438, 4,040 shares of Common stock with an aggregate fair market value of $1,179 and 11,455 shares of Common stock with an aggregate fair market value of $2,343, respectively, were withheld as payment in lieu of cash for stock option exercises and related tax withholdings. These shares were retired upon delivery. Share-Based Compensation Expense The following table provides information on share-based compensation expense: Years Ended December 31, 2022 2021 2020 Stock options $ 3,856 $ 2,908 $ 2,447 Restricted stock 24,965 22,457 19,682 Share-based compensation expense $ 28,821 $ 25,365 $ 22,129 At December 31, 2022, there was $8,390 of unrecognized pre-tax At December 31, 2022, there was $193,089 of unrecognized pre-tax 5-13 On February 7, 2023, our President received a short-term incentive of $200,000 payable in 632 shares of Class B common stock in connection with his 2022 performance-based incentive program. 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 ESPP allows participating employees to purchase shares of Common stock at a 5% discount to the fair market value at specified times. During 2022, 2021, and 2020, employees purchased 4,101, 3,501, and 5,121 shares of Common stock at an average price of $262.57, $239.11, and $171.89 per share, respectively. Cash dividends received by the ESPP were reinvested in Common stock and resulted in the issuance of 3,365, 2,962, and 3,964 additional shares during 2022, 2021, and 2020, respectively. We received net proceeds of $1,997, $1,676, and $1,649, respectively, during 2022, 2021, and 2020, for shares of our Common stock purchased under the ESPP. At December 31, 2022, 443,479 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, 2022, 2021, and 2020, we issued 21,560, 22,752, and 25,216 shares of Common stock, respectively, to the plan, representing the Common stock discretionary matching contribution of $6,746, $5,154 , |
INVESTMENT IN UNCONSOLIDATED EN
INVESTMENT IN UNCONSOLIDATED ENTITY | 12 Months Ended |
Dec. 31, 2022 | |
INVESTMENT IN UNCONSOLIDATED ENTITY | 11. INVESTMENT IN UNCONSOLIDATED ENTITY Our first joint venture with Carrier, Carrier Enterprise, LLC, which we refer to as Carrier Enterprise I, has a 38.1% ownership interest in Russell Sigler, Inc. (“RSI”), an HVAC distributor operating from 35 locations in the Western U.S. Our proportionate share of the net income of RSI is included in other income in our consolidated statements of income. Carrier Enterprise I is a party to a shareholders’ agreement (the “Shareholders’ Agreement”) with RSI and its shareholders, consisting of five family siblings, their children, and affiliates related to them. 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 the higher of book value or a multiple of EBIT, the latter of which Carrier Enterprise I used to calculate the price for its 38.1% investment held 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
ACQUISITIONS | 12 Months Ended |
Dec. 31, 2022 | |
ACQUISITIONS | 1 2 Makdad Industrial Supply Co., Inc. On August 20, 2021, one of our wholly owned subsidiaries acquired Makdad Industrial Supply Co., Inc. (“MIS”), a distributor of air conditioning and heating products operating from six locations in Pennsylvania. Consideration for the purchase consisted of $3,164 in cash and the issuance of 3,627 shares of Common stock having a fair value of $997, net of cash acquired of $204. The purchase price resulted in the recognition of $1,041 in goodwill and intangibles. The fair value of the identified intangible assets was $596 and consisted of $423 in trade names and distribution rights, and $173 in customer relationships to be amortized over an 18-year Acme Refrigeration of Baton Rouge LLC On May 7, 2021, we acquired certain assets and assumed certain liabilities of Acme Refrigeration of Baton Rouge LLC (“ACME”), a distributor of air conditioning, heating, and refrigeration products, operating from 18 locations in Louisiana and Mississippi, for $22,855 less certain average revolving indebtedness. We formed a new, wholly owned subsidiary, Acme Refrigeration LLC, which operates this business. Consideration for the purchase consisted of $18,051 in cash, 8,492 shares of Common stock having a fair value of $2,551, and $3,141 for repayment of indebtedness, net of cash acquired of $1,340. The purchase price resulted in the recognition of $3,710 in goodwill and intangibles. The fair value of the identified intangible assets was $2,124 and consisted of $1,508 in trade names and distribution rights, and $616 in customer relationships to be amortized over an 18-year Temperature Equipment Corporation On April 9, 2021, we acquired certain assets and assumed certain liabilities comprising the HVAC distribution business of Temperature Equipment Corporation, an HVAC distributor operating from 32 locations in Illinois, Indiana, Kansas, Michigan, Minnesota, Missouri , non-controlling The purchase price resulted in the recognition of $38,624 in goodwill and intangibles. The fair value of the identified intangible assets was $19,900 and consisted of $15,700 in trade names and distribution rights, and $4,200 in customer relationships to be amortized over an 18-year The table below presents the allocation of the total consideration to tangible and intangible assets acquired and liabilities assumed from the acquisition of our 80% controlling interest in TEC based on their respective fair values as of April 9, 2021: Accounts receivable $ 33,315 Inventories 71,325 Other current assets 962 Property and equipment 2,590 Operating lease ROU assets 53,829 Goodwill 18,724 Intangibles 19,900 Accounts payable (25,393 ) Accrued expenses and other current liabilities (20,509 ) Operating lease liabilities, net of current portion (48,046 ) Total $ 106,697 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 these acquisitions was not deemed significant to the consolidated financial statements. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2022 | |
GOODWILL AND INTANGIBLE ASSETS | 1 3 The changes in the carrying amount of goodwill are as follows: Balance at December 31, 2020 $ 412,486 Acquired goodwill 21,291 Foreign currency translation adjustment 242 Balance at December 31, 2021 434,019 Acquired goodwill 60 Allocation to intangible assets related to 2021 acquisition (596 ) Foreign currency translation adjustment (2,772 ) Balance at December 31, 2022 $ 430,711 Intangible assets are comprised of the following: December 31, Estimated Useful Lives 2022 2021 Indefinite lived intangible assets—Trade names, trademarks, and distribution rights $ 154,086 $ 158,389 Finite lived intangible assets: Customer relationships 7-18 years 83,943 86,526 Patented and unpatented technology 7 years 1,611 1,721 Trade name 10 years 1,150 1,150 Accumulated amortization (65,599 ) (60,890 ) Finite lived intangible assets, net 21,105 28,507 $ 175,191 $ 186,896 Amortization expense related to finite lived intangible assets included in selling, general and administrative expenses for the years ended December 31, 2022, 2021, and 2020, were $4,709, $5,561, and $5,945, respectively. Based on the finite lived intangible assets recorded at December 31, 2022, annual amortization for the next five years is expected to approximate the following: 2023 $ 3,200 2024 $ 3,000 2025 $ 3,000 2026 $ 2,800 2027 $ 1,500 |
SHAREHOLDERS' EQUITY
SHAREHOLDERS' EQUITY | 12 Months Ended |
Dec. 31, 2022 | |
SHAREHOLDERS' EQUITY | 1 4 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 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. W e had preferred stock outstanding at December 31, 2022 or 2021. At-the-Market On February 25, 2022, we entered into an amended and restated sales agreement with Robert W. Baird & Co. Inc. and Goldman Sachs & Co. LLC, which enables the Company to issue and sell shares of Common stock in one or more negotiated transactions or transactions that are deemed to be “at the market” offerings as defined in Rule 415 under the Securities Act of 1933, as amended (the “Securities Act”), for a maximum aggregate offering amount of up to (the “ATM Program”). The offer and sale of our Common stock pursuant to the ATM Program has been registered under the Securities Act pursuant to our automatically effective shelf registration statement on Form S-3 (File No. 333-260758). As of December 31, 2022, no shares of Common stock had been sold under the ATM Program. 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 s hares 008. 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, 2022, there were 1,129,087 shares remaining authorized for repurchase under the program. The IRA includes, among other provisions, a 1% excise tax on corporate stock repurchases in tax years beginning after December 31, 2022. In consideration of any further stock repurchases under our repurchase program, we intend to evaluate the impact of the IRA’s 1% excise tax on stock repurchases in tax years beginning after December 31, 2022. Common Stock Released from Escrow On August 23, 2018 we issued 23,230 shares of Common stock into escrow as contingent consideration in connection with the acquisition of Alert Labs, Inc. The shares were subject to certain performance metrics within a three-year measurement period. On November 12, 2021, the shares, and related cash dividends paid during the three-year period, were released to us from escrow as the performance metrics were not met. These shares were retired upon delivery. |
FINANCIAL INSTRUMENTS
FINANCIAL INSTRUMENTS | 12 Months Ended |
Dec. 31, 2022 | |
FINANCIAL INSTRUMENTS | 1 5 Recorded Financial Instruments Recorded financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable, the current portion of long-term obligations, and borrowings under our revolving credit agreement. At December 31, 2022 and 2021, 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 also approximate their carrying value based upon interest rates available for similar instruments with consistent terms and remaining maturities. Off-Balance At both December 31, 2022 and 2021, we were contingently liable under a standby letter of credit for $150 , which was required by a lease for real property. Additionally, at December 31, 2022 and 2021, we were contingently liable under various performance bonds aggregating approximately $13,700 and $7,900, 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 obligations will result from the issuance of the standby letter of credit or performance bonds because we expect to meet our obligations under our lease for real property and to certain customers in the ordinary course of business. 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
DERIVATIVES | 12 Months Ended |
Dec. 31, 2022 | |
DERIVATIVES | 16. 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 months. At December 31, 2022, no foreign currency forward contracts were designated as cash flow hedges. The impact from foreign exchange derivative instruments designated as cash flow hedges was as follows: Years Ended December 31, 2022 2021 Gain recorded in accumulated other comprehensive loss $ — $ 97 Loss reclassified from accumulated other comprehensive loss into earnings $ — $ 305 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. We had only one foreign currency exchange contract not designated as a hedging instrument at December 31, 2022, the total notional value of which was $3,300 . Such contract expired in We recognized losses of $917, $237, and $490 from foreign currency forward and option contracts not designated as hedging instruments in our consolidated statements of income for 2022, 2021, and 2020, respectively. The following table summarizes the fair value of derivative instruments, which consist solely of foreign exchange contracts, included in accrued expenses and other current liabilities in our consolidated balance sheets. See Note 1 7 Asset Derivatives Liability Derivatives December 31, 2022 2021 2022 2021 Derivatives designated as hedging instruments $ — $ — $ — $ — Derivatives not designated as hedging instruments — — — 5 Total derivative instruments $ — $ — $ — $ 5 |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Dec. 31, 2022 | |
FAIR VALUE MEASUREMENTS | 17. FAIR VALUE MEASUREMENTS The following tables present our assets and liabilities carried at fair value that are measured on a recurring basis: Balance Sheet Location Total Fair Value Measurements at December 31, 2022 Using Level 1 Level 2 Level 3 Assets: Equity securities Other assets $ 678 $ 678 — — Private equities Other assets $ 1,000 — — $ 1,000 Balance Sheet Location Total Fair Value Measurements at December 31, 2021 Using Level 1 Level 2 Level 3 Assets: Equity securities Other assets $ 1,790 $ 1,790 — — Private equities Other assets $ 1,000 — — $ 1,000 Liabilities: Derivative financial instruments Accrued expenses and other current liabilities $ 5 — $ 5 — 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 Private equities Derivative financial instruments |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2022 | |
COMMITMENTS AND CONTINGENCIES | 18. 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 several 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 $12,256 and $7,253 at December 31, 2022 and 2021, 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, 2022, 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. At December 31, 2022, the maximum exposure to loss related to our involvement with this entity is limited to approximately $6,700 and we have a cash deposit of approximately $3,000 with them as collateral to cover any contingency related to additional risk assessments pertaining to our self-insurance programs. See “Self-Insurance” above for further information on commitments associated with the insurance programs. At December 31, 2022, there were no other entities that met the definition of a VIE. Purchase Obligations At December 31, 2022, we were obligated under various non-cancelable |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2022 | |
RELATED PARTY TRANSACTIONS | 1 9 Purchases from Carrier and its affiliates comprised 60%, 61%, and 63% of all inventory purchases made during 2022, 2021 , , arm’s-length A member of our Board of Directors is the Senior Chairman of Greenberg Traurig, P.A., which serves as our principal outside counsel for compliance and acquisition-related legal services. During 2022, 2021 , |
INFORMATION ABOUT GEOGRAPHIC AR
INFORMATION ABOUT GEOGRAPHIC AREAS | 12 Months Ended |
Dec. 31, 2022 | |
INFORMATION ABOUT GEOGRAPHIC AREAS | 20 Our operations are primarily within the United States, including Puerto Rico, Canada , Years Ended December 31, 2022 2021 2020 Revenues: United States $ 6,578,897 $ 5,636,929 $ 4,535,262 Canada 389,119 386,780 301,727 Latin America and the Caribbean 306,328 256,483 217,939 Total revenues $ 7,274,344 $ 6,280,192 $ 5,054,928 December 31, 2022 2021 Long-Lived Assets: United States $ 1,009,188 $ 931,170 Canada 164,284 175,864 Latin America and the Caribbean 16,003 17,427 Total long-lived assets $ 1,189,475 $ 1,124,461 Revenues are attributed to countries based on the location of the store from which the sale occurred. Long-lived assets consist primarily of goodwill and intangible assets, operating lease ROU assets, property and equipment, and our investment in an unconsolidated entity. |
SUPPLEMENTAL CASH FLOW INFORMAT
SUPPLEMENTAL CASH FLOW INFORMATION | 12 Months Ended |
Dec. 31, 2022 | |
SUPPLEMENTAL CASH FLOW INFORMATION | 2 1 Supplemental cash flow information was as follows: Years Ended December 31, 2022 2021 2020 Interest paid $ 3,505 $ 913 $ 1,844 Income taxes net of refunds $ 105,736 $ 124,984 $ 70,889 Common stock issued for MIS — $ 997 — Common stock issued for ACME — $ 2,551 — Common stock issued for N&S — — $ (161 ) |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation | Organization, Consolidation and Presentation 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. At December 31, 2022, we operated from 673 locations in 42 U.S. states, Canada, Mexico, and Puerto Rico with additional market coverage on an export basis to portions of Latin America and the Caribbean. The consolidated financial statements include the accounts of Watsco, all of its wholly owned subsidiaries, the accounts of four joint ventures with Carrier Global Corporation, which we refer to as Carrier, the accounts of Carrier InterAmerica Corporation, of which we have an 80% controlling interest and Carrier has a 20% non-controlling |
Impact of the COVID-19 Pandemic and Economic and Marketplace Dynamics | Impact of the COVID-19 Since COVID-19 COVID-19 COVID-19 COVID-19 |
Foreign Currency Translation and Transactions | 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 primarily within cost of sales 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 primarily within selling, general and administrative expenses in our consolidated statements of income. |
Equity Method Investments | Equity Method Investments Investments in which we have the ability to exercise significant influence, but do not control, are accounted for under the equity method of accounting and are included in investment in unconsolidated entity in our consolidated balance sheets. Under this method of accounting, our proportionate share of the net income or loss of the investee is included in other income in our consolidated statements of income. The excess, if any, of the carrying amount of our investment over our ownership percentage in the underlying net assets of the investee is attributed to certain fair value adjustments with the remaining portion recognized as goodwill. |
Use of Estimates | 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, net realizable value adjustments to inventories, 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. |
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 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, including potential impacts of business and economic conditions. Upon determination that an account is uncollectible, the receivable balance is written off. At December 31, 2022 and 2021, the allowance for doubtful accounts totaled |
Inventories | Inventories Inventories consist of air conditioning, heating and refrigeration equipment, and related parts and supplies and are valued at the lower of cost using the first-in, first-out and weighted-average cost basis methods, or net realizable value. 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 maintained to consider inventory shortages determined from cycle counts and physical inventories. |
Vendor Rebates and Purchase Discounts | Vendor Rebates and Purchase Discounts We have arrangements with several vendors that provide rebates payable to us when we achieve defined 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 rebates 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, 2022 and 2021, we had respectively, of rebates recorded as a reduction of inventories. Substantially all vendor rebate receivables are collected within three months following the end of the year. Vendor rebates that are earned based on products sold are credited directly to cost of sales in our consolidated statements of income. We also have vendors that offer a cash discount when we pay their invoice within a specified period of time. We account for such cash discounts as a reduction of inventories until we sell the product at which time such cash discounts are reflected as a reduction of cost of sales in our consolidated statements of income. respectively, of cash discounts recorded as a reduction of inventories. |
Equity Securities | Equity Securities Investments in equity securities are recorded at fair value using the specific identification method and are included in other assets in our consolidated balance sheets. Changes in the fair value of equity securities and dividend income are recognized in our consolidated statements of income. |
Property and Equipment | 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 3-10 3-10 5-7 |
Operating and Finance Leases | Operating and Finance Leases We have operating leases for real property, vehicles and equipment, and finance leases primarily for vehicles. Operating leases are included in operating lease right-of-use Finance lease ROU assets ROU assets represent our right to use an underlying asset for the lease term, and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the applicable commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit interest rate, we use our incremental borrowing rate based on the information available at the commencement dates of the respective leases in determining the present value of the applicable lease payments. Operating lease ROU assets also include any lease pre-payments 1-10 non-lease Practical Expedients We elected the practical expedients related to short-term leases and separating lease components from non-lease |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill is recorded when the purchase price paid for an acquisition of a business 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 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, an impairment charge would be recognized. On January 1, 2023, we performed our annual evaluation of goodwill impairment and determined that the estimated fair value of our reporting unit exceeded its carrying value. Intangible assets primarily consist of the value of trade names and trademarks, distributor agreements, customer relationships, and patented and unpatented technology. 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 impairment tests annually and have determined there was 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 Long-lived assets, other than goodwill and intangible assets, 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, 2022, there were no such events or circumstances. |
Fair Value Measurements | 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 Recognition Revenue primarily consists of sales of air conditioning, heating and refrigeration equipment, and related parts and supplies. We generate our revenue primarily from the sale of finished products to customers; therefore, the significant majority of our contracts are short-term in nature and have only a single performance obligation to deliver products. The performance obligation under such contracts is satisfied when we transfer control of the product to the customer. Some contracts contain a combination of product sales and services, the latter of which is distinct and accounted for as a separate performance obligation. We satisfy our performance obligations for services when we render the services within the agreed-upon service period. Total service revenue is not material and accounted for less than periods presented Revenue is recognized when control transfers to our customers when products are picked up, or via shipment of products or delivery of services. We measure revenue as the amount of consideration we expect to be entitled to receive in exchange for those goods or services, net of any variable considerations (e.g., rights to return product, sales incentives, others) and any taxes collected from customers and subsequently remitted to governmental authorities. Revenue for shipping and handling charges is recognized when products are delivered to the customer. Product Returns We estimate product returns based on historical experience and record them on a gross basis on our balance sheets. Substantially all customer returns relate to products that are returned under manufacturers’ warranty obligations. Accrued sales returns at December 31, 2022 and 2021 of $21,023 and $16,707, respectively, were included in accrued expenses and other current liabilities in our consolidated balance sheets. Sales Incentives We estimate sales incentives expected to be paid over the terms of the programs based on the most likely amounts. Sales incentives are accounted for as a reduction in the transaction price and are generally paid on an annual basis. Practical Expedients We generally expense sales commissions when incurred because the amortization period is one year or less. These costs are recorded within selling, general and administrative expenses. We do not disclose the value of unsatisfied performance obligations for contracts with an original expected length of one year or less. |
Advertising Costs | Advertising Costs Advertising costs are expensed as incurred. Advertising expense for the years ended December 31, 2022, 2021, and 2020, were |
Shipping and Handling | 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 are included in selling, general and administrative expenses. Shipping and handling costs for the years ended December 31, 2022, 2021 and 2020, were respectively. |
Share-Based Compensation | Share-Based Compensation The fair value of stock option and restricted stock awards are expensed net of estimated forfeitures 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. Tax benefits resulting from tax deductions in excess of share-based compensation expense are recognized in our provision for income taxes in our consolidated statements of income. |
Income Taxes | Income Taxes We record U.S. 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 U.S. 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 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 this 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 | Earnings per Share We compute earnings per share using the two-class two-class non-forfeitable two-class two-class 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 | Derivative Instruments and Hedging Activity We have used derivative instruments, including forward and option 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. expenses. Cash Flow Hedge. Fair Value Hedge. See Note 1 6 |
Loss Contingencies | Loss Contingencies Accruals are recorded for various contingencies including self-insurance, legal proceedings, environmental matters, and other claims that arise in the normal course of business. The estimation process contains uncertainty because accruals are based on judgment, the probability of losses and, where applicable, the consideration of opinions of external legal counsel and actuarially determined estimates. Additionally, we record receivables from third party insurers when recovery has been determined to be probable . |
Self-Insurance | Self-Insurance Self-insurance reserves are maintained relative to company-wide casualty insurance and health benefit programs. The level of exposure from catastrophic events is limited by the purchase of stop-loss and aggregate liability reinsurance coverage. When estimating the self-insurance liabilities and related reserves, management considers several 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 $12,256 and $7,253 at December 31, 2022 and 2021, respectively, were established related to such programs and are included in accrued expenses and other current liabilities in our consolidated balance sheets. |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Components Of Lease Expense | The components of operating lease expense were as follows: Years Ended December 31, 2022 2021 2020 Lease cost $ 101,578 $ 90,742 $ 82,543 Short-term lease cost 10,226 9,598 6,317 Variable lease cost 1,840 1,868 942 Sublease income (373 ) (332 ) (228 ) $ 113,271 $ 101,876 $ 89,574 |
Summary Of Balance Sheet Information Related To Leases | Supplemental balance sheet information related to operating leases were as follows: December 31, 2022 2021 ROU assets $ 317,314 $ 268,528 Current $ 87,120 $ 81,928 Operating lease liabilities 232,144 187,024 Total operatin $ 319,264 $ 268,952 Weighted Average Remaining Lease Term (in years) 4.8 years 4.4 years Weighted Average Discount Rate 3.85 % 3.29 % |
Summary Of Supplemental Cash Flow Information Related to Leases | Supplemental cash flow information related to operating le ases we Years Ended December 31, 2022 2021 2020 Operating cash flows for the measurement of operating lease liabilities $ 100,092 $ 91,063 $ 80,921 Operating lease ROU assets obtained in exchange for operating lease obligations $ 140,704 $ 141,198 $ 59,093 |
Maturities Of Operating Lease Liabilities | At December 31, 2022, maturities of operating lease liabilities over each of the next five years and thereafter were as follows: 2023 $ 97,727 2024 76,563 2025 59,363 2026 44,035 2027 25,273 Thereafter 50,491 Total lease payments 353,452 Less imputed interest 34,188 Total lease liability $ 319,264 |
REVENUES (Tables)
REVENUES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Summary of Disaggregated Revenue | Years Ended December 31, 2022 2021 2020 Primary Geographical Regions: United States $ 6,578,897 $ 5,636,929 $ 4,535,262 Canada 389,119 386,780 301,727 Latin America and the Caribbean 306,328 256,483 217,939 $ 7,274,344 $ 6,280,192 $ 5,054,928 Major Product Lines: HVAC equipment 68 % 69 % 69 % Other HVAC products 28 % 28 % 28 % Commercial refrigeration products 4 % 3 % 3 % 100 % 100 % 100 % |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
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: Years Ended December 31, 2022 2021 2020 Basic Earnings per Share: Net income attributable to Watsco, Inc. shareholders $ 601,167 $ 418,945 $ 269,579 Less: distributed and undistributed earnings allocated to restricted common stock 51,365 37,273 23,140 Earnings allocated to Watsco, Inc. shareholders $ 549,802 $ 381,672 $ 246,439 Weighted-average common shares outstanding - 35,564,203 35,244,230 35,069,516 Basic earnings per share for Common and Class B common stock $ 15.46 $ 10.83 $ 7.03 Allocation of earnings for Basic: Common stock $ 499,792 $ 353,873 $ 228,361 Class B common stock 50,010 27,799 18,078 $ 549,802 $ 381,672 $ 246,439 Diluted Earnings per Share: Net income attributable to Watsco, Inc. shareholders $ 601,167 $ 418,945 $ 269,579 Less: distributed and undistributed earnings allocated to restricted common stock 51,294 37,222 23,140 Earnings allocated to Watsco, Inc. shareholders $ 549,873 $ 381,723 $ 246,439 Weighted-average common shares outstanding - Basic 35,564,203 35,244,230 35,069,516 Effect of dilutive stock options 119,431 179,608 81,055 Weighted-average common shares outstanding - Diluted 35,683,634 35,423,838 35,150,571 Diluted earnings per share for Common and Class B common stock $ 15.41 $ 10.78 $ 7.01 |
OTHER COMPREHENSIVE (LOSS) IN_2
OTHER COMPREHENSIVE (LOSS) INCOME (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Schedule of Tax Effects Allocated to Each Component of Other Comprehensive Loss | The tax effects allocated to each component of other comprehensive (loss) income were as follows: Years Ended December 31, 2022 2021 2020 Foreign currency translation adjustment $ (20,305 ) $ 936 $ 6,272 Unrealized gain on cash flow hedging instruments — 97 1,205 Income tax expense — (27 ) (325 ) Unrealized gain on cash flow hedging instruments, net of tax — 70 880 Reclassification of loss (gain) on cash flow hedging instruments into earnings — 305 (574 ) Income tax (benefit) expense — (86 ) 156 Reclassification of loss (gain) on cash flow hedging instruments into earnings, net of tax — 219 (418 ) Other comprehensive (loss) income $ (20,305 ) $ 1,225 $ 6,734 |
Schedule of Accumulated Other Comprehensive Loss | The changes in each component of accumulated other comprehensive loss, net of tax, were as follows: Years Ended December 31, 2022 2021 2020 Foreign currency translation adjustment: Beginning balance $ (34,176 ) $ (34,694 ) $ (38,599 ) Current period other comprehensive (loss) (13,534 ) 518 3,905 Ending balance (47,710 ) (34,176 ) (34,694 ) Cash flow hedging instruments: Beginning balance — (173 ) (451 ) Current period other comprehensive income — 43 528 Reclassification adjustment — 130 (250 ) Ending balance — — (173 ) Accumulated other comprehensive loss, net of tax $ (47,710 ) $ (34,176 ) $ (34,867 ) |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Business Combinations [Abstract] | |
Summary of tangible and intangible assets acquired and liabilities assumed | The table below presents the allocation of the total consideration to tangible and intangible assets acquired and liabilities assumed from the acquisition of our 80% controlling interest in TEC based on their respective fair values as of April 9, 2021: Accounts receivable $ 33,315 Inventories 71,325 Other current assets 962 Property and equipment 2,590 Operating lease ROU assets 53,829 Goodwill 18,724 Intangibles 19,900 Accounts payable (25,393 ) Accrued expenses and other current liabilities (20,509 ) Operating lease liabilities, net of current portion (48,046 ) Total $ 106,697 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Changes in Carrying Amount of Goodwill | The changes in the carrying amount of goodwill are as follows: Balance at December 31, 2020 $ 412,486 Acquired goodwill 21,291 Foreign currency translation adjustment 242 Balance at December 31, 2021 434,019 Acquired goodwill 60 Allocation to intangible assets related to 2021 acquisition (596 ) Foreign currency translation adjustment (2,772 ) Balance at December 31, 2022 $ 430,711 |
Indefinite and Finite Lived Intangible Assets | Intangible assets are comprised of the following: December 31, Estimated Useful Lives 2022 2021 Indefinite lived intangible assets—Trade names, trademarks, and distribution rights $ 154,086 $ 158,389 Finite lived intangible assets: Customer relationships 7-18 years 83,943 86,526 Patented and unpatented technology 7 years 1,611 1,721 Trade name 10 years 1,150 1,150 Accumulated amortization (65,599 ) (60,890 ) Finite lived intangible assets, net 21,105 28,507 $ 175,191 $ 186,896 |
Amortization Expense Related to Finite Lived Intangible Assets | Based on the finite lived intangible assets recorded at December 31, 2022, annual amortization for the next five years is expected to approximate the following: 2023 $ 3,200 2024 $ 3,000 2025 $ 3,000 2026 $ 2,800 2027 $ 1,500 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Property and Equipment, Net | Property and equipment, net, consists of: December 31, 2022 2021 Land $ 676 $ 676 Buildings and improvements 93,033 85,857 Machinery, vehicles, and equipment 120,811 108,110 Computer hardware and software 83,354 68,762 Furniture and fixtures 24,029 21,404 321,903 284,809 Accumulated depreciation and amortization (196,479 ) (173,790 ) $ 125,424 $ 111,019 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Components of Income Tax Expense | The components of income tax expense from our wholly owned operations and investments and our controlling interest in CIAC and joint ventures with Carrier are as follows: Years Ended December 31, 2022 2021 2020 Current: U.S. Federal $ 71,475 $ 91,162 $ 58,895 State 27,202 20,703 12,909 Foreign 13,574 10,993 4,779 112,251 122,858 76,583 Deferred: U.S. Federal 10,766 6,434 218 State 3,695 1,374 21 Foreign (995 ) (1,869 ) (199 ) 5,939 40 Income tax expense $ 125,717 $ 128,797 $ 76,623 |
Reconciliation of Effective Income Tax Rate | Following is a reconciliation of th e Years Ended December 31, 2022 2021 2020 U.S. federal statutory rate 21.0 % 21.0 % 21.0 % State income taxes, net of federal benefit and other 4.6 3.5 3.3 Excess tax benefits from share-based compensation (8.6 ) (1.7 ) (2.1 ) Tax effects on foreign income 0.3 0.4 0.3 FDII (0.1 ) (0.1 ) — Change in valuation allowance 0.4 0.8 — Tax credits and other (0.4 ) (0.5 ) (0.5 ) Effective income tax rate attributable to Watsco, Inc. 17.2 23.4 22.0 Taxes attributable to non-controlling (2.0 ) (2.9 ) (2.8 ) Effective income tax rate 15.2 % 20.5 % 19.2 % |
Significant Components of Net Deferred Tax Liabilities | The following is a summary of the significant components of our net deferred tax liabilities: December 31, 2022 2021 Deferred tax assets: Share-based compensation $ 27,037 $ 30,854 Capitalized inventory costs and adjustments 4,366 3,449 Allowance for doubtful accounts 3,326 1,328 Self-insurance reserves 1,975 1,027 Other 8,711 6,081 Net operating loss carryforwards 3,899 3,959 49,314 46,698 Valuation allowance (8,171 ) (5,107 ) Total deferred tax assets 41,143 41,591 Deferred tax liabilities: Deductible goodwil l (88,316 ) (82,704 ) Depreciation (23,806 ) (18,744 ) Unremitted earnings of domestic affiliate s (6,618 ) (5,175 ) Other (3,761 (3,619 ) Total deferred tax liabilities (122,501 ) (110,242 ) Net deferred tax liabilities (1) $ (81,358 ) $ (68,651 ) (1) Net deferred tax liabilities have been included in the consolidated balance sheets in deferred income taxes and |
Changes in Gross Unrecognized Tax Benefits | The changes in gross unrecognized tax benefits were as follows: Balance at December 31, 2019 $ 5,367 Additions based on tax positions related to the current year 1,911 Reductions due to lapse of applicable statute of limitations (773 ) Balance at December 31, 2020 6,505 Additions based on tax positions related to the current year 1,143 Reductions due to lapse of applicable statute of limitations (921 ) Balance at December 31, 2021 6,727 Additions based on tax positions related to the current year 1,867 Reductions due to lapse of applicable statute of limitations (842 ) Balance at December 31, 2022 $ 7,752 |
SHARE-BASED COMPENSATION AND _2
SHARE-BASED COMPENSATION AND BENEFIT PLANS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Summary of Stock Option Activity | The following is a summary of stock option activity under the 2021 Plan and the 2014 Plan as of and for the year ended December 31, 2022: Options Weighted- Weighted- (in years) Aggregate Options outstanding at December 31, 2021 602,488 $ 205.30 Granted 104,500 274.38 Exercised (113,230 ) 166.08 Forfeited (24,467 ) 242.32 Expired (9,666 ) 176.80 Options outstanding at December 31, 2022 559,625 $ 225.01 2.74 $ 20,555 Options exercisable at December 31, 2022 130,213 $ 174.30 1.50 $ 9,930 |
Summary of Restricted Stock Activity | The following is a summary of restricted stock activity as of and for the year ended December 31, 2022: Shares Weighted- Restricted stock outstanding at December 31, 2021 3,459,661 $ 83.94 Granted 143,059 290.55 Vested (1,000,459 ) 37.66 Forfeited (13,000 ) 207.83 Restricted stock outstanding at December 31, 2022 2,589,261 $ 112.53 |
Valuation Assumptions Used for Stock Option Awards | The following table presents the weighted-average assumptions used for stock options granted: Years Ended December 31, 2022 2021 2020 Expected term in years 4.25 4.25 4.25 Risk-free interest rate 3.04 % 0.79 % 0.26 % Expected volatility 23.10 % 21.85 % 20.89 % Expected dividend yield 2.84 % 2.97 % 3.69 % Grant date fair value $ 46.60 $ 34.79 $ 20.76 |
Share-Based Compensation Expense | The following table provides information on share-based compensation expense: Years Ended December 31, 2022 2021 2020 Stock options $ 3,856 $ 2,908 $ 2,447 Restricted stock 24,965 22,457 19,682 Share-based compensation expense $ 28,821 $ 25,365 $ 22,129 |
DERIVATIVES (Tables)
DERIVATIVES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
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: Years Ended December 31, 2022 2021 Gain recorded in accumulated other comprehensive loss $ — $ 97 Loss reclassified from accumulated other comprehensive loss into earnings $ — $ 305 |
Fair Value of Derivative Instruments and Location in the Balance Sheets | The following table summarizes the fair value of derivative instruments, which consist solely of foreign exchange contracts, included in accrued expenses and other current liabilities in our consolidated balance sheets. See Note 1 7 Asset Derivatives Liability Derivatives December 31, 2022 2021 2022 2021 Derivatives designated as hedging instruments $ — $ — $ — $ — Derivatives not designated as hedging instruments — — — 5 Total derivative instruments $ — $ — $ — $ 5 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
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: Balance Sheet Location Total Fair Value Measurements at December 31, 2022 Using Level 1 Level 2 Level 3 Assets: Equity securities Other assets $ 678 $ 678 — — Private equities Other assets $ 1,000 — — $ 1,000 Balance Sheet Location Total Fair Value Measurements at December 31, 2021 Using Level 1 Level 2 Level 3 Assets: Equity securities Other assets $ 1,790 $ 1,790 — — Private equities Other assets $ 1,000 — — $ 1,000 Liabilities: Derivative financial instruments Accrued expenses and other current liabilities $ 5 — $ 5 — |
INFORMATION ABOUT GEOGRAPHIC _2
INFORMATION ABOUT GEOGRAPHIC AREAS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Revenues and Long-Lived Assets by Geographical Area | The following tables set forth revenues and long-lived assets by geographical area: Years Ended December 31, 2022 2021 2020 Revenues: United States $ 6,578,897 $ 5,636,929 $ 4,535,262 Canada 389,119 386,780 301,727 Latin America and the Caribbean 306,328 256,483 217,939 Total revenues $ 7,274,344 $ 6,280,192 $ 5,054,928 December 31, 2022 2021 Long-Lived Assets: United States $ 1,009,188 $ 931,170 Canada 164,284 175,864 Latin America and the Caribbean 16,003 17,427 Total long-lived assets $ 1,189,475 $ 1,124,461 |
SUPPLEMENTAL CASH FLOW INFORM_2
SUPPLEMENTAL CASH FLOW INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Supplemental Cash Flow Information | Years Ended December 31, 2022 2021 2020 Interest paid $ 3,505 $ 913 $ 1,844 Income taxes net of refunds $ 105,736 $ 124,984 $ 70,889 Common stock issued for MIS — $ 997 — Common stock issued for ACME — $ 2,551 — Common stock issued for N&S — — $ (161 ) |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Additional Information (Detail) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 USD ($) Store State Entity | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Significant Accounting Policies [Line Items] | |||
Number of joint ventures | Entity | 4 | ||
Allowance for doubtful accounts | $ 18,345 | $ 11,315 | |
Capitalized vendor rebates | 22,961 | 22,692 | |
Goodwill and intangible assets impairment | 0 | 0 | $ 0 |
Accrued sales returns | 21,023 | 16,707 | |
Selling, general and administrative expense | 1,221,382 | 1,058,316 | 833,051 |
Cash discounts recorded as a reduction of inventories | 19,158 | 17,893 | |
Finance lease ROU assets | 14,480 | 11,489 | |
Finance lease liabilities | $ 14,865 | $ 11,762 | |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Operating Lease, Right-of-Use Asset | Operating Lease, Right-of-Use Asset | |
Shipping and Handling [Member] | |||
Significant Accounting Policies [Line Items] | |||
Selling, general and administrative expense | $ 86,620 | $ 70,453 | 55,019 |
Advertising Expense [Member] | |||
Significant Accounting Policies [Line Items] | |||
Selling, general and administrative expense | $ 25,884 | $ 21,552 | $ 12,588 |
Minimum [Member] | |||
Significant Accounting Policies [Line Items] | |||
Operating Lease Remaining Lease Term | 1 year | ||
Maximum [Member] | |||
Significant Accounting Policies [Line Items] | |||
Operating Lease Remaining Lease Term | 10 years | ||
Maximum [Member] | Sales Revenue, Net [Member] | Product Concentration Risk | |||
Significant Accounting Policies [Line Items] | |||
Percentage of Service Revenue | 1% | 1% | 1% |
Buildings and Improvements | Minimum [Member] | |||
Significant Accounting Policies [Line Items] | |||
Estimated useful lives in years | 3 years | ||
Buildings and Improvements | Maximum [Member] | |||
Significant Accounting Policies [Line Items] | |||
Estimated useful lives in years | 40 years | ||
Machinery and Equipment [Member] | Minimum [Member] | |||
Significant Accounting Policies [Line Items] | |||
Estimated useful lives in years | 3 years | ||
Machinery and Equipment [Member] | Maximum [Member] | |||
Significant Accounting Policies [Line Items] | |||
Estimated useful lives in years | 10 years | ||
Computer Hardware And Software [Member] | Minimum [Member] | |||
Significant Accounting Policies [Line Items] | |||
Estimated useful lives in years | 3 years | ||
Computer Hardware And Software [Member] | Maximum [Member] | |||
Significant Accounting Policies [Line Items] | |||
Estimated useful lives in years | 10 years | ||
Furniture and Fixtures | Minimum [Member] | |||
Significant Accounting Policies [Line Items] | |||
Estimated useful lives in years | 5 years | ||
Furniture and Fixtures | Maximum [Member] | |||
Significant Accounting Policies [Line Items] | |||
Estimated useful lives in years | 7 years | ||
Watsco, Inc. | |||
Significant Accounting Policies [Line Items] | |||
Number of locations from which entity operates | Store | 673 | ||
Number of states in which entity operates | State | 42 |
Leases - Components of Operatin
Leases - Components of Operating Lease Expense (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Lease cost | $ 101,578 | $ 90,742 | $ 82,543 |
Short-term lease cost | 10,226 | 9,598 | 6,317 |
Variable lease cost | 1,840 | 1,868 | 942 |
Sublease income | (373) | (332) | (228) |
Total operating lease cost | $ 113,271 | $ 101,876 | $ 89,574 |
Leases - Summary Of Balance She
Leases - Summary Of Balance Sheet Information Related To Operating Leases (Detail) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Operating Leases | ||
ROU assets | $ 317,314 | $ 268,528 |
Current portion of operating lease liabilities | $ 87,120 | $ 81,928 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Long-term Debt and Capital Lease Obligations, Current | Long-term Debt and Capital Lease Obligations, Current |
Operating lease liabilities | $ 232,144 | $ 187,024 |
Total operating lease liabilities | $ 319,264 | $ 268,952 |
Operating Lease, Liability, Statement of Financial Position [Extensible Enumeration] | Liabilities, Current | Liabilities, Current |
Weighted Average Remaining Lease Term (in years) | ||
Operating leases | 4 years 9 months 18 days | 4 years 4 months 24 days |
Weighted Average Discount Rate | ||
Operating leases | 3.85% | 3.29% |
Leases - Summary Of Supplementa
Leases - Summary Of Supplemental Cash Flow Information Related to Leases (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Cash paid for amounts included in the measurement of lease liabilities: | |||
Operating cash flows for the measurement of operating lease liabilities | $ 100,092 | $ 91,063 | $ 80,921 |
Operating lease ROU assets obtained in exchange for operating lease obligations | $ 140,704 | $ 141,198 | $ 59,093 |
Leases - Maturities Of Operatin
Leases - Maturities Of Operating Lease Liabilities (Detail) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Maturities of Operating Lease Liabilities | ||
Total lease liability | $ 319,264 | $ 268,952 |
Operating Lease Liabilities [Member] | ||
Maturities of Operating Lease Liabilities | ||
2023 | 97,727 | |
2024 | 76,563 | |
2025 | 59,363 | |
2026 | 44,035 | |
2027 | 25,273 | |
Thereafter | 50,491 | |
Total lease payments | 353,452 | |
Less imputed interest | 34,188 | |
Total lease liability | $ 319,264 |
Leases - Additional Information
Leases - Additional Information (Detail) $ in Thousands | Dec. 31, 2022 USD ($) |
Operating leases not yet commenced | $ 19,200 |
Maximum [Member] | |
Lessee, Operating Lease, Lease Not yet Commenced, Term of Contract | 8 years |
Minimum [Member] | |
Lessee, Operating Lease, Lease Not yet Commenced, Term of Contract | 4 years |
Revenues - Summary of Disaggreg
Revenues - Summary of Disaggregated Revenue (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Disaggregation of Revenue [Line Items] | |||
Revenues from product lines, percentage | 100% | 100% | 100% |
Revenues | $ 7,274,344 | $ 6,280,192 | $ 5,054,928 |
United States | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 6,578,897 | 5,636,929 | 4,535,262 |
Canada | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 389,119 | 386,780 | 301,727 |
Latin America and the Caribbean | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | $ 306,328 | $ 256,483 | $ 217,939 |
HVAC Equipment | |||
Disaggregation of Revenue [Line Items] | |||
Revenues from product lines, percentage | 68% | 69% | 69% |
Other HVAC Products | |||
Disaggregation of Revenue [Line Items] | |||
Revenues from product lines, percentage | 28% | 28% | 28% |
Commercial Refrigeration Products | |||
Disaggregation of Revenue [Line Items] | |||
Revenues from product lines, percentage | 4% | 3% | 3% |
Earnings Per Share - Schedule o
Earnings Per Share - Schedule of Basic and Diluted Earnings per Common Share (Detail) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Basic Earnings per Share: | |||
Net income attributable to Watsco, Inc. shareholders | $ 601,167 | $ 418,945 | $ 269,579 |
Basic earnings per share for Common and Class B common stock | $ 15.46 | $ 10.83 | $ 7.03 |
Diluted Earnings per Share: | |||
Net income attributable to Watsco, Inc. shareholders | $ 601,167 | $ 418,945 | $ 269,579 |
Diluted earnings per share for Common and Class B common stock | $ 15.41 | $ 10.78 | $ 7.01 |
Class B Common Stock | |||
Basic Earnings per Share: | |||
Earnings allocated to Watsco, Inc. shareholders - Basic | $ 50,010 | $ 27,799 | $ 18,078 |
Common Stock | |||
Basic Earnings per Share: | |||
Earnings allocated to Watsco, Inc. shareholders - Basic | 499,792 | 353,873 | 228,361 |
Common Stock | Class B Common Stock | |||
Basic Earnings per Share: | |||
Net income attributable to Watsco, Inc. shareholders | 601,167 | 418,945 | 269,579 |
Less: distributed and undistributed earnings allocated to restricted common stock | 51,365 | 37,273 | 23,140 |
Earnings allocated to Watsco, Inc. shareholders - Basic | $ 549,802 | $ 381,672 | $ 246,439 |
Weighted-average common shares outstanding - Basic | 35,564,203 | 35,244,230 | 35,069,516 |
Basic earnings per share for Common and Class B common stock | $ 15.46 | $ 10.83 | $ 7.03 |
Diluted Earnings per Share: | |||
Net income attributable to Watsco, Inc. shareholders | $ 601,167 | $ 418,945 | $ 269,579 |
Less: distributed and undistributed earnings allocated to restricted common stock – Diluted | 51,294 | 37,222 | 23,140 |
Earnings allocated to Watsco, Inc. shareholders - Diluted | $ 549,873 | $ 381,723 | $ 246,439 |
Weighted-average common shares outstanding - Basic | 35,564,203 | 35,244,230 | 35,069,516 |
Effect of dilutive stock options | 119,431 | 179,608 | 81,055 |
Weighted-average common shares outstanding - Diluted | 35,683,634 | 35,423,838 | 35,150,571 |
Diluted earnings per share for Common and Class B common stock | $ 15.41 | $ 10.78 | $ 7.01 |
Earnings Per Share - Additional
Earnings Per Share - Additional Information (Detail) - shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Earnings Per Share [Line Items] | |||
Class B common stock conversion, number of shares | 3,234,939 | 2,566,990 | 2,572,536 |
Anti-dilutive stock options excluded from earnings per share | 190,462 | 40,529 | 19,722 |
Other Comprehensive (Loss) In_3
Other Comprehensive (Loss) Income - Schedule of Tax Effects Allocated to Each Component of Other Comprehensive income (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Components Of Other Comprehensive Income Loss [Line Items] | |||
Foreign currency translation adjustment | $ (20,305) | $ 936 | $ 6,272 |
Unrealized gain on cash flow hedging instruments | 0 | 97 | 1,205 |
Income tax expense | 0 | (27) | (325) |
Unrealized gain on cash flow hedging instruments, net of tax | 0 | 70 | 880 |
Reclassification of loss (gain) on cash flow hedging instruments into earnings | 0 | 305 | (574) |
Income tax (benefit) expense | 0 | (86) | 156 |
Reclassification of loss (gain) on cash flow hedging instruments into earnings, net of tax | 0 | 219 | (418) |
Other comprehensive (loss) income | $ (20,305) | $ 1,225 | $ 6,734 |
Other Comprehensive (Loss) In_4
Other Comprehensive (Loss) Income - Schedule of Accumulated Other Comprehensive Loss (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Beginning balance | $ (34,176) | $ (34,867) | |
Ending balance | (47,710) | (34,176) | $ (34,867) |
Foreign Currency Translation Adjustment | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Beginning balance | (34,176) | (34,694) | (38,599) |
Current period other comprehensive (loss) income | (13,534) | 518 | 3,905 |
Ending balance | (47,710) | (34,176) | (34,694) |
Cash Flow Hedging Instruments | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Beginning balance | 0 | (173) | (451) |
Current period other comprehensive (loss) income | 0 | 43 | 528 |
Reclassification adjustment | 0 | 130 | (250) |
Ending balance | $ 0 | $ 0 | $ (173) |
Supplier Concentration - Additi
Supplier Concentration - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Concentration Risk [Line Items] | |||
Reduction in inventories related to pricing claim advances | $ 92,402 | $ 78,454 | |
Carrier and Its Affiliates | |||
Concentration Risk [Line Items] | |||
Reduction in inventories related to pricing claim advances | $ 69,814 | $ 59,644 | |
Carrier and Its Affiliates | Supplier Concentration Risk | Cost of Goods, Total | |||
Concentration Risk [Line Items] | |||
Percentage of purchases from key suppliers | 60% | 61% | 63% |
Top Ten Suppliers [Member] | Supplier Concentration Risk | Cost of Goods, Total | |||
Concentration Risk [Line Items] | |||
Percentage of purchases from key suppliers | 84% | 83% | 85% |
Property and Equipment, Net (De
Property and Equipment, Net (Detail) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 321,903 | $ 284,809 |
Accumulated depreciation and amortization | (196,479) | (173,790) |
Property and equipment, net | 125,424 | 111,019 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 676 | 676 |
Buildings and Improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 93,033 | 85,857 |
Machinery, Vehicles and Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 120,811 | 108,110 |
Computer Hardware and Software | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 83,354 | 68,762 |
Furniture and Fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 24,029 | $ 21,404 |
Property and Equipment - Additi
Property and Equipment - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment [Line Items] | |||
Depreciation and amortization expense | $ 26,974 | $ 22,566 | $ 19,963 |
Debt - Additional Information (
Debt - Additional Information (Detail) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | |||
Dec. 05, 2018 | Mar. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Debt Instrument [Line Items] | |||||
Revolving credit agreement, maturity date | Dec. 05, 2023 | ||||
Payment of fees related to revolving credit agreement | $ 0 | $ 22 | $ 196 | ||
Borrowings under revolving credit agreement, Current | 56,400 | 0 | |||
Borrowings under revolving credit agreement | 0 | 89,000 | |||
Maximum capacity under revolving credit agreement | $ 560,000 | ||||
London Interbank Offer Rate | |||||
Debt Instrument [Line Items] | |||||
Basis spread | 87.50% | ||||
Federal Funds Effective Rate [Member] | |||||
Debt Instrument [Line Items] | |||||
Basis spread | 0.50% | ||||
Eurocurrency Rate | |||||
Debt Instrument [Line Items] | |||||
Basis spread | 1% | ||||
Commitment Fee | |||||
Debt Instrument [Line Items] | |||||
Basis spread | 7.50% | ||||
Federal Funds and Eurocurrency Rate [Member] | |||||
Debt Instrument [Line Items] | |||||
Basis spread | 0% | ||||
Maximum | London Interbank Offer Rate | |||||
Debt Instrument [Line Items] | |||||
Basis spread | 150% | ||||
Maximum | Federal Funds Effective Rate [Member] | |||||
Debt Instrument [Line Items] | |||||
Basis spread | 50% | ||||
Maximum | Eurocurrency Rate | |||||
Debt Instrument [Line Items] | |||||
Basis spread | 50% | ||||
Maximum | Commitment Fee | |||||
Debt Instrument [Line Items] | |||||
Basis spread | 20% | ||||
Minimum | London Interbank Offer Rate | |||||
Debt Instrument [Line Items] | |||||
Basis spread | 87.50% | ||||
Minimum | Federal Funds Effective Rate [Member] | |||||
Debt Instrument [Line Items] | |||||
Basis spread | 0% | ||||
Minimum | Eurocurrency Rate | |||||
Debt Instrument [Line Items] | |||||
Basis spread | 0% | ||||
Minimum | Commitment Fee | |||||
Debt Instrument [Line Items] | |||||
Basis spread | 7.50% | ||||
Swingline Subfacility | |||||
Debt Instrument [Line Items] | |||||
Maximum capacity under revolving credit agreement | $ 100,000 | ||||
Letter of Credit | |||||
Debt Instrument [Line Items] | |||||
Maximum capacity under revolving credit agreement | 10,000 | ||||
Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Payment of fees related to revolving credit agreement | $ 22 | ||||
Seasonal discretionary maximum borrowing capacity under revolving credit agreement | $ 460,000 | ||||
Alternative Currency Sublimit | |||||
Debt Instrument [Line Items] | |||||
Maximum capacity under revolving credit agreement | 75,000 | ||||
Mexican Borrowing Sublimit | |||||
Debt Instrument [Line Items] | |||||
Maximum capacity under revolving credit agreement | $ 8,000 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) $ in Thousands | 12 Months Ended | |||||
Aug. 16, 2022 | Mar. 11, 2021 USD ($) Employee | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | Dec. 31, 2019 USD ($) | |
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% | 100% | 100% | |||
Valuation allowance | $ 8,171 | $ 5,107 | ||||
Gross unrecognized tax benefits | 7,752 | 6,727 | $ 6,505 | $ 5,367 | ||
Unrecognized tax benefits that, if recognized, would affect the effective tax rate | 6,457 | 5,636 | ||||
Estimated accrued interest and penalties resulting from unrecognized tax benefits | 1,343 | $ 1,211 | ||||
Foreign subsidiaries earnings | $ 148,000 | |||||
Effective income tax rate reconciliation, Percent | 15.20% | 20.50% | 19.20% | |||
America Rescue Plan Act of 2021 | ||||||
Income Taxes [Line Items] | ||||||
Number Of Additional Most Highly Compensated Individuals | Employee | 5 | |||||
Annual Cap On Compensation | $ 1,000 | |||||
Inflation Reduction Act [Member] | ||||||
Income Taxes [Line Items] | ||||||
Percentage of excise tax on stock repurchases | 1% | 1% | ||||
Effective income tax rate reconciliation, Percent | 15% | |||||
State and other | ||||||
Income Taxes [Line Items] | ||||||
Net operating loss carry forwards | $ 165,951 | |||||
State and other | Minimum | ||||||
Income Taxes [Line Items] | ||||||
State and other net operating loss carry forwards expiration date | 2026 | |||||
Foreign | ||||||
Income Taxes [Line Items] | ||||||
Net operating loss carry forwards | $ 14,916 | |||||
Foreign | Maximum | ||||||
Income Taxes [Line Items] | ||||||
State and other net operating loss carry forwards expiration date | 2042 | |||||
Foreign | Minimum | ||||||
Income Taxes [Line Items] | ||||||
State and other net operating loss carry forwards expiration date | 2036 | |||||
Federal | ||||||
Income Taxes [Line Items] | ||||||
Net operating loss carry forwards | $ 0 |
Components of Income Tax Expens
Components of Income Tax Expense (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Current: | |||
U.S. Federal | $ 71,475 | $ 91,162 | $ 58,895 |
State | 27,202 | 20,703 | 12,909 |
Foreign | 13,574 | 10,993 | 4,779 |
Current | 112,251 | 122,858 | 76,583 |
Deferred: | |||
U.S. Federal | 10,766 | 6,434 | 218 |
State | 3,695 | 1,374 | 21 |
Foreign | (995) | (1,869) | (199) |
Deferred | 13,466 | 5,939 | 40 |
Income tax expense | $ 125,717 | $ 128,797 | $ 76,623 |
Reconciliation of Effective Inc
Reconciliation of Effective Income Tax Rate (Detail) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Reconciliation of Effective Income Tax Rate [Line Items] | |||
U.S. federal statutory rate | 21% | 21% | 21% |
State income taxes, net of federal benefit and other | 4.60% | 3.50% | 3.30% |
Excess tax benefits from share-based compensation | (8.60%) | (1.70%) | (2.10%) |
Tax effects on foreign income | 0.30% | 0.40% | 0.30% |
FDII | (0.10%) | (0.10%) | 0% |
Change in valuation allowance | 0.40% | 0.80% | 0% |
Tax credits and other | (0.40%) | (0.50%) | (0.50%) |
Effective income tax rate attributable to Watsco, Inc. | 17.20% | 23.40% | 22% |
Taxes attributable to non-controlling interest | (2.00%) | (2.90%) | (2.80%) |
Effective income tax rate | 15.20% | 20.50% | 19.20% |
Significant Components of Net D
Significant Components of Net Deferred Tax Liabilities (Detail) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | |
Components of Net Deferred Tax Liabilities [Line Items] | |||
Share-based compensation | $ 27,037 | $ 30,854 | |
Capitalized inventory costs and adjustments | 4,366 | 3,449 | |
Allowance for doubtful accounts | 3,326 | 1,328 | |
Self-insurance reserves | 1,975 | 1,027 | |
Other | 8,711 | 6,081 | |
Net operating loss carryforwards | 3,899 | 3,959 | |
Total deferred tax assets, gross | 49,314 | 46,698 | |
Valuation allowance | (8,171) | (5,107) | |
Total deferred tax assets | 41,143 | 41,591 | |
Deductible goodwill | (88,316) | (82,704) | |
Depreciation | (23,806) | (18,744) | |
Unremitted earnings of domestic affiliates | (6,618) | (5,175) | |
Other | (3,761) | (3,619) | |
Total deferred tax liabilities | (122,501) | (110,242) | |
Net deferred tax liabilities | [1] | $ (81,358) | $ (68,651) |
[1]Net deferred tax liabilities have been included in the consolidated balance sheets in deferred income taxes and other liabilities. |
Changes in Gross Unrecognized T
Changes in Gross Unrecognized Tax Benefits (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Contingency [Line Items] | |||
Beginning balance | $ 6,727 | $ 6,505 | $ 5,367 |
Additions based on tax positions related to the current year | 1,867 | 1,143 | 1,911 |
Reductions due to lapse of applicable statute of limitations | (842) | (921) | (773) |
Ending balance | $ 7,752 | $ 6,727 | $ 6,505 |
Share-Based Compensation and _3
Share-Based Compensation and Benefit Plans - Additional Information (Detail) $ / shares in Units, $ in Thousands | 12 Months Ended | ||||
Feb. 07, 2023 USD ($) shares | Oct. 15, 2022 USD ($) shares | Dec. 31, 2022 USD ($) Age $ / shares shares | Dec. 31, 2021 USD ($) $ / shares shares | Dec. 31, 2020 USD ($) $ / shares shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Options of common stock outstanding | shares | 559,625 | 602,488 | |||
Income tax benefit | $ 125,717 | $ 128,797 | $ 76,623 | ||
Payment, tax withholding, share-based payment arrangement | 87,107 | 1,092 | 2,299 | ||
Common stock contribution to 401(k) plan | 6,746 | 5,154 | 4,543 | ||
Current federal tax expense (benefit) | $ 71,475 | $ 91,162 | $ 58,895 | ||
Employee Stock Purchase Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Aggregate shares of common stock that remained available for grant in connection with the 2014 Plan | shares | 1,500,000 | ||||
Shares reserved for future grant | shares | 443,479 | ||||
Number of days of service required for an employee to purchase shares | 90 days | ||||
Discount to employees to purchase shares | 5% | ||||
Shares purchased under ESPP | shares | 4,101 | 3,501 | 5,121 | ||
Average price of the shares purchased by employees | $ / shares | $ 262.57 | $ 239.11 | $ 171.89 | ||
Additional shares issued resulting from cash dividends reinvested in common stock | shares | 3,365 | 2,962 | 3,964 | ||
Net proceeds from shares purchased under ESPP | $ 1,997 | $ 1,676 | $ 1,649 | ||
Class B Common Stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares issued, value, share-Based payment arrangement | $ 200,000 | ||||
Shares Issued, shares, share-Based payment arrangement | shares | 632 | ||||
2014 Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Options of common stock outstanding | shares | 361,075 | ||||
2014 Plan | Minimum [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Years in which options plan vest | 2 years | ||||
2014 Plan | Maximum [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Years in which options plan vest | 4 years | ||||
401(k) Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Common stock contribution to 401(k) Plan, shares | shares | 21,560 | 22,752 | 25,216 | ||
Common stock contribution to 401(k) plan | $ 6,746 | $ 5,154 | $ 4,543 | ||
2021 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% | ||||
Aggregate shares of common stock that remained available for grant in connection with the 2014 Plan | shares | 2,500,000 | ||||
Shares reserved for future grant | shares | 2,502,966 | ||||
Contractual term of stock option awards | 5 years | ||||
2021 Plan | Minimum [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Years in which options plan vest | 2 years | ||||
2021 Plan | Maximum [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Years in which options plan vest | 4 years | ||||
2021 Plan | Common and Class B Common Stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Aggregate shares of common stock that remained available for grant in connection with the 2014 Plan | shares | 7,327 | ||||
Shares awarded under the plan, net of cancellations | shares | 4,361 | ||||
Restricted Stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Weighted-average grant date fair value of restricted stock | $ / shares | $ 290.55 | $ 254.73 | $ 193.89 | ||
Market value of vested shares | $ 271,781 | $ 3,646 | $ 7,354 | ||
Unrecognized share-based compensation expense | $ 193,089 | ||||
Vesting period related to restricted stock obligated to issue in connection with incentive compensation arrangement | 11 years 8 months 12 days | ||||
Number of shares vested | shares | 1,000,459 | ||||
Restricted Stock | Chief Executive Officer [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Unrecognized share-based compensation expense | $ 54,000 | ||||
Vesting period related to restricted stock obligated to issue in connection with incentive compensation agreement | 7 years | ||||
Restricted stock obligated to issue in connection with incentive compensation agreement | shares | 39,602 | ||||
Restricted Stock | Chief Executive Officer [Member] | Share-based Compensation Award, Tranche One | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Unrecognized share-based compensation expense | $ 21,000 | ||||
Vesting period related to restricted stock obligated to issue in connection with incentive compensation arrangement | 4 years | ||||
Age of Chief Executive Officer when restricted stock vests | Age | 86 | ||||
Restricted Stock | Chief Executive Officer [Member] | Share-based Compensation Award, Tranche Two | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Unrecognized share-based compensation expense | $ 24,000 | ||||
Vesting period related to restricted stock obligated to issue in connection with incentive compensation arrangement | 6 years | ||||
Age of Chief Executive Officer when restricted stock vests | Age | 88 | ||||
Restricted Stock | Chief Executive Officer [Member] | Share-based Compensation Award, Tranche Three | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Unrecognized share-based compensation expense | $ 9,000 | ||||
Vesting period related to restricted stock obligated to issue in connection with incentive compensation arrangement | 7 years | ||||
Age of Chief Executive Officer when restricted stock vests | Age | 89 | ||||
Restricted Stock | President | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Unrecognized share-based compensation expense | $ 40,000 | ||||
Vesting period related to restricted stock obligated to issue in connection with incentive compensation agreement | 21 years | ||||
Restricted stock obligated to issue in connection with incentive compensation agreement | shares | 38,930 | ||||
Restricted Stock | President | Share-based Compensation Award, Tranche One | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Unrecognized share-based compensation expense | $ 39,000 | ||||
Vesting period related to restricted stock obligated to issue in connection with incentive compensation arrangement | 21 years | ||||
Age of president when restricted shares vests | Age | 62 | ||||
Restricted Stock | President | Share-based Compensation Award, Tranche Two | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Unrecognized share-based compensation expense | $ 1,000 | ||||
Vesting period related to restricted stock obligated to issue in connection with incentive compensation arrangement | 23 years | ||||
Age of president when restricted shares vests | Age | 64 | ||||
Restricted Stock | Employee | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Age of employee when restricted stock vests | Age | 62 | ||||
Restricted Stock | Various Key Leaders | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period related to shares obligated to issue in connection with incentive compensation agreement | shares | 15,000 | ||||
Restricted Stock | Various Key Leaders | Minimum [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period related to restricted stock obligated to issue in connection with incentive compensation arrangement | 5 years | ||||
Restricted Stock | Various Key Leaders | Maximum [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period related to restricted stock obligated to issue in connection with incentive compensation arrangement | 13 years | ||||
Restricted Stock | Common and Class B 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 | shares | 11,693 | ||||
Payment, tax withholding, share-based payment arrangement | $ 2,299 | ||||
Restricted Stock | Class B 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 | shares | 320,468 | 3,858 | |||
Payment, tax withholding, share-based payment arrangement | $ 87,049 | $ 1,078 | |||
Restricted Stock | Class B Common Stock | Chief Executive Officer [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Market value of vested shares | $ 265,106 | ||||
Shares withheld as payment for tax withholdings related to share based compensation, shares | shares | 311,408 | ||||
Payment, tax withholding, share-based payment arrangement | $ 104,319 | ||||
Cash benefit related to vesting of restricted stock previously granted to our CEO | 67,000 | ||||
Current federal tax expense (benefit) | 49,000 | ||||
Number of shares vested | shares | 975,622 | ||||
Shares retained net of tax withholdings | shares | 664,214 | ||||
Cash payment related to tax withholding for share based compensation | $ 19,700 | ||||
Stock Options | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Income tax benefit | 2,658 | 3,595 | 1,586 | ||
Total intrinsic value of stock options exercised | 13,046 | 16,903 | 8,753 | ||
Cash received from Common stock issued | 18,425 | 19,338 | 17,608 | ||
Unrecognized share-based compensation expense | $ 8,390 | ||||
Vesting period related to restricted stock obligated to issue in connection with incentive compensation arrangement | 1 year 10 months 24 days | ||||
Fair value of stock options vested | $ 2,721 | $ 2,621 | $ 2,177 | ||
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 | shares | 1,592 | 4,040 | 11,455 | ||
Payment, tax withholding, share-based payment arrangement | $ 438 | $ 1,179 | $ 2,343 |
Summary of Stock Option Activit
Summary of Stock Option Activity (Detail) $ / shares in Units, $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) $ / shares shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Options, Outstanding beginning balance | shares | 602,488 |
Options, Granted | shares | 104,500 |
Options, Exercised | shares | (113,230) |
Options, Forfeited | shares | (24,467) |
Options, Expired | shares | (9,666) |
Options, Outstanding ending balance | shares | 559,625 |
Options, Exercisable | shares | 130,213 |
Weighted-Average Exercise Price, Outstanding beginning balance | $ / shares | $ 205.3 |
Weighted-Average Exercise Price, Granted | $ / shares | 274.38 |
Weighted-Average Exercise Price, Exercised | $ / shares | 166.08 |
Weighted-Average Exercise Price, Forfeited | $ / shares | 242.32 |
Weighted-Average Exercise Price, Expired | $ / shares | 176.8 |
Weighted-Average Exercise Price, Outstanding ending balance | $ / shares | 225.01 |
Weighted-Average Exercise Price, Exercisable | $ / shares | $ 174.3 |
Weighted-Average Remaining Contractual Term (in years), Outstanding | 2 years 8 months 26 days |
Weighted-Average Remaining Contractual Term (in years), Exercisable | 1 year 6 months |
Aggregate Intrinsic Value, Outstanding | $ | $ 20,555 |
Aggregate Intrinsic Value, Exercisable | $ | $ 9,930 |
Summary of Restricted Stock Act
Summary of Restricted Stock Activity (Detail) - Restricted Stock - $ / shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares, Restricted beginning balance | 3,459,661 | ||
Shares, Granted | 143,059 | ||
Shares, Vested | (1,000,459) | ||
Shares, Forfeited | (13,000) | ||
Shares, Restricted ending balance | 2,589,261 | 3,459,661 | |
Weighted-Average Grant Date Fair Value, Restricted beginning balance | $ 83.94 | ||
Weighted-Average Grant Date Fair Value, Granted | 290.55 | $ 254.73 | $ 193.89 |
Weighted-Average Grant Date Fair Value, Vested | 37.66 | ||
Weighted-Average Grant Date Fair Value, Forfeited | 207.83 | ||
Weighted-Average Grant Date Fair Value, Restricted ending balance | $ 112.53 | $ 83.94 |
Weighted-Average Assumptions Us
Weighted-Average Assumptions Used for Stock Options Granted (Detail) - $ / shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
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 | 3.04% | 0.79% | 0.26% |
Expected volatility | 23.10% | 21.85% | 20.89% |
Expected dividend yield | 2.84% | 2.97% | 3.69% |
Grant date fair value | $ 46.6 | $ 34.79 | $ 20.76 |
Share-Based Compensation Expens
Share-Based Compensation Expense (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation expense | $ 28,821 | $ 25,365 | $ 22,129 |
Stock Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation expense | 3,856 | 2,908 | 2,447 |
Restricted Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based compensation expense | $ 24,965 | $ 22,457 | $ 19,682 |
Investment in Unconsolidated _2
Investment in Unconsolidated Entity - Additional Information (Detail) | 12 Months Ended |
Dec. 31, 2022 | |
Schedule of Equity Method Investments [Line Items] | |
Ownership percentage needed for right to purchase up to 100% | 85% |
Total number of board members | 6 |
Number of board members that can be appointed based on ownership | 2 |
Carrier Enterprise LLC [Member] | |
Schedule of Equity Method Investments [Line Items] | |
Ownership interest acquired | 38.10% |
Acquisitions - Additional Infor
Acquisitions - Additional Information (Detail) $ in Thousands | Aug. 20, 2021 USD ($) Location shares | May 07, 2021 USD ($) Location shares | Apr. 09, 2021 USD ($) Location |
TEC Distribution LLC [Member] | |||
Business Acquisition [Line Items] | |||
Number of locations in which the company operates | Location | 32 | ||
Goodwill and intangibles acquired | $ 38,624 | ||
Business Combination, Consideration Transferred | 105,200 | ||
Intangible assets acquired | $ 19,900 | ||
Number of years goodwill is deductible for tax purposes | 15 years | ||
Repayment of indebtedness | $ 1,497 | ||
TEC Distribution LLC [Member] | Carrier [Member] | |||
Business Acquisition [Line Items] | |||
Business Combination, Consideration Transferred | $ 21,040 | ||
Percentage of Voting Interests Acquired | 20% | ||
TEC Distribution LLC [Member] | Controlling Interest [Member] | |||
Business Acquisition [Line Items] | |||
Business Combination, Consideration Transferred | $ 84,160 | ||
Percentage of Voting Interests Acquired | 80% | ||
TEC Distribution LLC [Member] | Trade Names and Distribution Rights [Member] | |||
Business Acquisition [Line Items] | |||
Intangible assets acquired | $ 15,700 | ||
TEC Distribution LLC [Member] | Customer Relationships [Member] | |||
Business Acquisition [Line Items] | |||
Intangible assets acquired | $ 4,200 | ||
Amortization period | 18 years | ||
Makdad Industrial Supply Co Inc [Member] | |||
Business Acquisition [Line Items] | |||
Number of locations in which the company operates | Location | 6 | ||
Cash consideration for Business Acquisition | $ 3,164 | ||
Stock issued for acquisition | shares | 3,627 | ||
Fair value of equity shares issued or issuable | $ 997 | ||
Goodwill and intangibles acquired | 1,041 | ||
Cash acquired | 204 | ||
Intangible assets acquired | $ 596 | ||
Number of years goodwill is deductible for tax purposes | 15 years | ||
Makdad Industrial Supply Co Inc [Member] | Trade Names and Distribution Rights [Member] | |||
Business Acquisition [Line Items] | |||
Intangible assets acquired | $ 423 | ||
Makdad Industrial Supply Co Inc [Member] | Customer Relationships [Member] | |||
Business Acquisition [Line Items] | |||
Intangible assets acquired | $ 173 | ||
Amortization period | 18 years | ||
Acme Refrigeration of Baton Rouge LLC [Member] | |||
Business Acquisition [Line Items] | |||
Number of locations in which the company operates | Location | 18 | ||
Cash consideration for Business Acquisition | $ 18,051 | ||
Stock issued for acquisition | shares | 8,492 | ||
Fair value of equity shares issued or issuable | $ 2,551 | ||
Goodwill and intangibles acquired | $ 3,710 | ||
Businesss acquistion goodwill expected period of tax deduction | 15 years | ||
Cash acquired | $ 1,340 | ||
Intangible assets acquired | 2,124 | ||
Purchase price less certain average revolving indebtedness | 22,855 | ||
Repayment of indebtedness | 3,141 | ||
Acme Refrigeration of Baton Rouge LLC [Member] | Trade Names and Distribution Rights [Member] | |||
Business Acquisition [Line Items] | |||
Intangible assets acquired | 1,508 | ||
Acme Refrigeration of Baton Rouge LLC [Member] | Customer Relationships [Member] | |||
Business Acquisition [Line Items] | |||
Intangible assets acquired | $ 616 | ||
Amortization period | 18 years |
Acquisitions - Schedule of Reco
Acquisitions - Schedule of Recognized Identified Assets Acquired and Liabilities Assumed (Detail) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Apr. 09, 2021 |
Business Acquisition [Line Items] | |||
Operating lease ROU assets | $ 317,314 | $ 268,528 | |
Operating lease liabilities, net of current portion | $ (232,144) | $ (187,024) | |
Temperature Equipment Corporation [Member] | |||
Business Acquisition [Line Items] | |||
Accounts receivable | $ 33,315 | ||
Inventories | 71,325 | ||
Other current assets | 962 | ||
Property and equipment | 2,590 | ||
Operating lease ROU assets | 53,829 | ||
Goodwill | 18,724 | ||
Intangibles | 19,900 | ||
Accounts payable | (25,393) | ||
Accrued expenses and other current liabilities | (20,509) | ||
Operating lease liabilities, net of current portion | (48,046) | ||
Total | $ 106,697 |
Changes in Carrying Amount of G
Changes in Carrying Amount of Goodwill (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Goodwill [Line Items] | ||
Goodwill, Beginning Balance | $ 434,019 | $ 412,486 |
Acquired goodwill | 60 | 21,291 |
Foreign currency translation adjustment | (2,772) | 242 |
Allocation to intangible assets related to 2021 acquisition | (596) | |
Goodwill, Ending Balance | $ 430,711 | $ 434,019 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Goodwill And Intangible Assets [Line Items] | |||
Amortization expense related to finite lived intangible assets | $ 4,709 | $ 5,561 | $ 5,945 |
Intangible Assets (Detail)
Intangible Assets (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Intangible Assets [Line Items] | ||
Indefinite lived intangible assets—Trade names, trademarks and distribution rights | $ 154,086 | $ 158,389 |
Finite lived intangible assets: | ||
Accumulated amortization | (65,599) | (60,890) |
Finite lived intangible assets, net | 21,105 | 28,507 |
Intangible assets, net | 175,191 | 186,896 |
Customer Relationships | ||
Finite lived intangible assets: | ||
Finite lived intangible assets | $ 83,943 | 86,526 |
Customer Relationships | Maximum [Member] | ||
Intangible Assets [Line Items] | ||
Finite lived intangible assets, Estimated Useful lives, years | 18 years | |
Customer Relationships | Minimum [Member] | ||
Intangible Assets [Line Items] | ||
Finite lived intangible assets, Estimated Useful lives, years | 7 years | |
Trade Name | ||
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 |
Patented And Unpatented Technology [Member] | ||
Intangible Assets [Line Items] | ||
Finite lived intangible assets, Estimated Useful lives, years | 7 years | |
Finite lived intangible assets: | ||
Finite lived intangible assets | $ 1,611 | $ 1,721 |
Amortization Expense Related to
Amortization Expense Related to Finite Lived Intangible Assets (Detail) $ in Thousands | Dec. 31, 2022 USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2023 | $ 3,200 |
2024 | 3,000 |
2025 | 3,000 |
2026 | 2,800 |
2027 | $ 1,500 |
Shareholders' Equity - Addition
Shareholders' Equity - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||||||
Aug. 06, 2021 | Aug. 23, 2018 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Aug. 16, 2022 | Sep. 30, 1999 | |
Stockholders Equity Note [Line Items] | |||||||
Preferred stock outstanding | 0 | 0 | 0 | ||||
Number of shares authorized to be repurchased | 7,500,000 | ||||||
Treasury stock, shares repurchased | 0 | 0 | 0 | ||||
Cost of repurchased shares | $ 114,425 | $ 114,425 | $ 114,425 | ||||
Remaining number of shares authorized to be repurchased | 1,129,087 | ||||||
Common stock issued into escrow | 23,230 | ||||||
Inflation Reduction Act [Member] | |||||||
Stockholders Equity Note [Line Items] | |||||||
Percentage of excise tax on stock repurchases | 1% | 1% | |||||
ATM Program [Member] | |||||||
Stockholders Equity Note [Line Items] | |||||||
Maximum aggregate offering amount of stock | $ 300,000 | ||||||
Number of shares sold under ATM | 0 | ||||||
Class B Common Stock | |||||||
Stockholders Equity Note [Line Items] | |||||||
Amount of votes common stock is entitled | ten | ||||||
Treasury stock, shares | 48,263 | 48,263 | 48,263 | ||||
Common Stock | |||||||
Stockholders Equity Note [Line Items] | |||||||
Amount of votes common stock is entitled | one | ||||||
Percentage of Board entitled to elect | 25% | ||||||
Treasury stock, shares | 6,322,650 | 6,322,650 | 6,322,650 |
Financial Instruments - Additio
Financial Instruments - Additional Information (Detail) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Standby Letters of Credit | ||
Financial Instrument [Line Items] | ||
Fair value of contingent liability | $ 150 | $ 150 |
Performance Bonds | ||
Financial Instrument [Line Items] | ||
Fair value of contingent liability | $ 13,700 | $ 7,900 |
Derivatives - Impact from Forei
Derivatives - Impact from Foreign Exchange Derivative Instruments Designated as Cash Flow Hedges (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain recorded in accumulated other comprehensive loss | $ 0 | $ 97 | $ 1,205 |
Loss (gain) reclassified from accumulated other comprehensive loss into earnings | 0 | 305 | $ (574) |
Foreign Currency Forward Contracts | Cash Flow Hedge | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Gain recorded in accumulated other comprehensive loss | 0 | 97 | |
Loss (gain) reclassified from accumulated other comprehensive loss into earnings | $ 0 | $ 305 |
Derivatives - Fair Value of Der
Derivatives - Fair Value of Derivative Instruments and Location in the Balance Sheets (Detail) - Foreign Exchange Forward And Option Contracts [Member] - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Derivatives, Fair Value [Line Items] | ||
Derivative instruments, assets derivatives | $ 0 | $ 0 |
Derivative instruments, liabilities derivatives | 0 | 5 |
Derivatives Designated as Hedging Instruments [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative instruments, assets derivatives | 0 | 0 |
Derivative instruments, liabilities derivatives | 0 | 0 |
Derivatives Not Designated as Hedging Instruments [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative instruments, assets derivatives | 0 | 0 |
Derivative instruments, liabilities derivatives | $ 0 | $ 5 |
Derivatives - Additional Inform
Derivatives - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Foreign Currency Forward Contracts | Cash Flow Hedge | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Maximum length of time hedged in cash flow hedge | 12 months | ||
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 | $ 3,300 | ||
Contract expiring terms | 2023-01 | ||
Loss from foreign currency forward and option contracts not designated as hedging instruments | $ 917 | $ 237 | $ 490 |
Fair Value Measurements - Asset
Fair Value Measurements - Assets and Liabilities Carried at Fair Value Measured on Recurring Basis (Detail) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Other assets | ||
Assets: | ||
Equity securities | $ 678 | $ 1,790 |
Private equities | 1,000 | 1,000 |
Accrued expenses and other current liabilities | ||
Liabilities: | ||
Derivative financial instruments | 5 | |
Fair Value Measurements, Level 1 | Other assets | ||
Assets: | ||
Equity securities | 678 | 1,790 |
Fair Value Measurements, Level 2 | Accrued expenses and other current liabilities | ||
Liabilities: | ||
Derivative financial instruments | 5 | |
Fair Value Measurements, Level 3 | Other assets | ||
Assets: | ||
Private equities | $ 1,000 | $ 1,000 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Commitments and Contingencies Disclosure [Line Items] | ||
Self-insurance reserves | $ 12,256 | $ 7,253 |
Maximum exposure to loss related to involvement with variable interest entity | 6,700 | |
Non-cancelable purchase obligations for goods | 69,000 | |
Variable interest entity cash deposit to cover contingency | 3,000 | |
Carrier and Its Affiliates [Member] | ||
Commitments and Contingencies Disclosure [Line Items] | ||
Non-cancelable purchase obligations for goods | $ 56,000 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Greenberg Traurig, P.A. | Customary Fees for Legal Services | |||
Related Party Transaction [Line Items] | |||
Fees for related party transaction | $ 186 | $ 225 | $ 156 |
Amount payable to related party | 1 | 34 | |
Carrier and Its Affiliates | Supplier Concentration Risk | |||
Related Party Transaction [Line Items] | |||
Amount payable to Carrier and its affiliates, net of receivables | 88,000 | 90,000 | |
Revenues from sales to Carrier and its affiliates | $ 97,000 | $ 108,000 | $ 103,000 |
Carrier and Its Affiliates | Supplier Concentration Risk | Cost of Goods, Total | |||
Related Party Transaction [Line Items] | |||
Percentage of purchases from key suppliers | 60% | 61% | 63% |
Revenues and Long-Lived Assets
Revenues and Long-Lived Assets by Geographical Area (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Geographic Area Information [Line Items] | |||
Revenues | $ 7,274,344 | $ 6,280,192 | $ 5,054,928 |
Long-Lived Assets | 1,189,475 | 1,124,461 | |
United States | |||
Geographic Area Information [Line Items] | |||
Revenues | 6,578,897 | 5,636,929 | 4,535,262 |
Long-Lived Assets | 1,009,188 | 931,170 | |
Canada | |||
Geographic Area Information [Line Items] | |||
Revenues | 389,119 | 386,780 | 301,727 |
Long-Lived Assets | 164,284 | 175,864 | |
Latin America and Caribbean | |||
Geographic Area Information [Line Items] | |||
Revenues | 306,328 | 256,483 | $ 217,939 |
Long-Lived Assets | $ 16,003 | $ 17,427 |
Supplemental Cash Flow Inform_3
Supplemental Cash Flow Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Cash Flow Supplemental Disclosures [Line Items] | |||
Interest paid | $ 3,505 | $ 913 | $ 1,844 |
Income taxes net of refunds | 105,736 | 124,984 | 70,889 |
Makdad Industrial Supply Co., Inc | |||
Cash Flow Supplemental Disclosures [Line Items] | |||
Business combination shares issued | 0 | 997 | 0 |
Acme Refrigeration of Baton Rouge LLC | |||
Cash Flow Supplemental Disclosures [Line Items] | |||
Business combination shares issued | 0 | 2,551 | 0 |
N&S Supply of Fishkill, Inc | |||
Cash Flow Supplemental Disclosures [Line Items] | |||
Business combination shares issued | $ 0 | $ 0 | $ (161) |