XML 47 R31.htm IDEA: XBRL DOCUMENT
v2.4.0.8

Income Taxes (Tables) | 12 Months Ended
--- | ---
Dec. 31, 2013
Components of Income Tax Expense | The components of income tax expense from our wholly-owned operations and investments and our controlling interest in joint ventures with Carrier are as follows:
Years Ended December 31, |  | 2013 |  |  | 2012 |  |  | 2011 |
U.S. Federal |  | $ | 62,616 |  |  | $ | 50,919 |  |  | $ | 50,197 |
State |  |  | 9,234 |  |  |  | 6,245 |  |  |  | 6,338 |
Foreign |  |  | 5,810 |  |  |  | 5,478 |  |  |  | 315 |
|  | $ | 77,660 |  |  | $ | 62,642 |  |  | $ | 56,850 |
Current |  | $ | 69,071 |  |  | $ | 55,918 |  |  | $ | 48,540 |
Deferred |  |  | 8,589 |  |  |  | 6,724 |  |  |  | 8,310 |
|  | $ | 77,660 |  |  | $ | 62,642 |  |  | $ | 56,850 |
Reconciliation of Effective Income Tax Rate | Following is a reconciliation of the effective income tax rate:
Years Ended December 31, |  | 2013 |  |  | 2012 |  |  | 2011 |
U.S. federal statutory rate |  |  | 35.0 | % |  |  | 35.0 | % |  |  | 35.0 | %
State income taxes, net of federal benefit and other |  |  | 3.3 |  |  |  | 2.5 |  |  |  | 3.1 |
Tax effects on foreign income |  |  | (1.3 | ) |  |  | (0.8 | ) |  |  | (0.1 | )
Effective income tax rate attributable to Watsco, Inc. |  |  | 37.0 |  |  |  | 36.7 |  |  |  | 38.0 |
Taxes attributable to noncontrolling interest |  |  | (7.7 | ) |  |  | (8.3 | ) |  |  | (8.8 | )
Effective income tax rate |  |  | 29.3 | % |  |  | 28.4 | % |  |  | 29.2 | %
Significant Components of Current and Long-Term Deferred Tax Assets and Liabilities | The following is a summary of the significant components of our current and long-term deferred tax assets and liabilities:
December 31, |  | 2013 |  |  | 2012 |
Current deferred tax assets: |  |  |  |  |  |  |  |
Capitalized inventory costs and inventory reserves |  | $ | 2,883 |  |  | $ | 2,386 |
Self-insurance reserves |  |  | 1,093 |  |  |  | 1,039 |
Allowance for doubtful accounts |  |  | 882 |  |  |  | 1,084 |
Other current deferred tax assets |  |  | 1,539 |  |  |  | 1,215 |
Total current deferred tax assets (1) |  |  | 6,397 |  |  |  | 5,724 |
Long-term deferred tax assets: |  |  |  |  |  |  |  |
Share-based compensation |  |  | 17,455 |  |  |  | 13,911 |
Other long-term deferred tax assets |  |  | 909 |  |  |  | 797 |
Net operating loss carryforwards |  |  | 283 |  |  |  | 609 |
|  |  | 18,647 |  |  |  | 15,317 |
Valuation allowance |  |  | (75 | ) |  |  | (391 | )
Total long-term deferred tax assets (2) |  |  | 18,572 |  |  |  | 14,926 |
Current deferred tax liabilities: |  |  |  |  |  |  |  |
Other current deferred tax liabilities |  |  | (1,304 | ) |  |  | (36 | )
Total current deferred tax liabilities (1) |  |  | (1,304 | ) |  |  | (36 | )
Long-term deferred tax liabilities: |  |  |  |  |  |  |  |
Deductible goodwill |  |  | (76,519 | ) |  |  | (66,636 | )
Depreciation |  |  | (2,873 | ) |  |  | (3,100 | )
Other long-term deferred tax liabilities |  |  | (2,556 | ) |  |  | (1,322 | )
Total long-term deferred tax liabilities (2) |  |  | (81,948 | ) |  |  | (71,058 | )
Net deferred tax liabilities |  | $ | (58,283 | ) |  | $ | (50,444 | )
(1) | Current deferred tax assets and liabilities have been included in the consolidated balance sheets in other current assets.
(2) | Long-term deferred tax assets and liabilities have been included in the consolidated balance sheets in deferred income taxes and other liabilities.
Changes in Gross Unrecognized Tax Benefits | The changes in gross unrecognized tax benefits are as follows:
Balance at December 31, 2010 |  | $ | 1,889 |
Additions based on tax positions related to the current year |  |  | 542 |
Reductions due to lapse of applicable statute of limitations |  |  | (7 | )
Balance at December 31, 2011 |  |  | 2,424 |
Additions based on tax positions related to the current year |  |  | 416 |
Reductions due to lapse of applicable statute of limitations |  |  | (366 | )
Balance at December 31, 2012 |  |  | 2,474 |
Additions based on tax positions related to the current year |  |  | 673 |
Reductions due to lapse of applicable statute of limitations |  |  | (12 | )
Balance at December 31, 2013 |  | $ | 3,135 |

X
- Definition Tabular disclosure of the components of income tax expense attributable to continuing operations for each year presented including, but not limited to: current tax expense (benefit), deferred tax expense (benefit), investment tax credits, government grants, the benefits of operating loss carryforwards, tax expense that results from allocating certain tax benefits either directly to contributed capital or to reduce goodwill or other noncurrent intangible assets of an acquired entity, adjustments of a deferred tax liability or asset for enacted changes in tax laws or rates or a change in the tax status of the entity, and adjustments of the beginning-of-the-year balances of a valuation allowance because of a change in circumstances that causes a change in judgment about the realizability of the related deferred tax asset in future years. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 + Details
Name: | us-gaap_ScheduleOfComponentsOfIncomeTaxExpenseBenefitTableTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of the components of net deferred tax asset or liability recognized in an entity's statement of financial position, including the following: the total of all deferred tax liabilities, the total of all deferred tax assets, the total valuation allowance recognized for deferred tax assets. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 + Details
Name: | us-gaap_ScheduleOfDeferredTaxAssetsAndLiabilitiesTableTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of the reconciliation using percentage or dollar amounts of the reported amount of income tax expense attributable to continuing operations for the year to the amount of income tax expense that would result from applying domestic federal statutory tax rates to pretax income from continuing operations. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 12 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32687-109319 + Details
Name: | us-gaap_ScheduleOfEffectiveIncomeTaxRateReconciliationTableTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of the change in unrecognized tax benefits. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 55 -Paragraph 217 -URI http://asc.fasb.org/extlink&oid=32707879&loc=d3e36027-109320 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15A -URI http://asc.fasb.org/extlink&oid=6907707&loc=SL6600010-109319 + Details
Name: | us-gaap_ScheduleOfUnrecognizedTaxBenefitsRollForwardTableTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration