XML 47 R19.htm IDEA: XBRL DOCUMENT
v2.4.0.8

Accounting Policies (Policies) | 3 Months Ended
--- | ---
Mar. 30, 2014
Accounting Policies |
Estimates | Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States 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 financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Goodwill and Long-Lived Assets | Goodwill and Long-Lived Assets The changes in the carrying amount of goodwill by geographic segment are as follows:
|  | March 30, 2014 |
|  | Gross Balance |  | Accumulated Impairment Losses |  | Net Goodwill |
|  | Balance January 1, 2014 |  | Acquired During the Period |  | Foreign Currency Translation and Other |  | Balance March 30, 2014 |  | Balance January 1, 2014 |  | Impairment Loss During the Period |  | Balance March 30, 2014 |  | March 30, 2014 |
|  | (in millions) |
Americas |  | $ | 224.7 |  | $ | — |  | $ | (0.4 | ) | $ | 224.3 |  | $ | (24.5 | ) | $ | — |  | $ | (24.5 | ) | $ | 199.8 |
Europe, Middle East and Africa (EMEA) |  | 301.3 |  | — |  | (0.1 | ) | 301.2 |  | — |  | — |  | — |  | 301.2 |
Asia-Pacific |  | 13.3 |  | — |  | (0.4 | ) | 12.9 |  | — |  | — |  | — |  | 12.9 |
Total |  | $ | 539.3 |  | $ | — |  | $ | (0.9 | ) | $ | 538.4 |  | $ | (24.5 | ) | $ | — |  | $ | (24.5 | ) | $ | 513.9 |
|  | March 31, 2013 |
|  | Gross Balance |  | Accumulated Impairment Losses |  | Net Goodwill |
|  | Balance January 1, 2013 |  | Acquired During the Period |  | Foreign Currency Translation and Other |  | Balance March 31, 2013 |  | Balance January 1, 2013 |  | Impairment Loss During the Period |  | Balance March 31, 2013 |  | March 31, 2013 |
|  | (in millions) |
Americas |  | $ | 225.6 |  | $ | — |  | $ | (0.3 | ) | $ | 225.3 |  | $ | (24.2 | ) | $ | — |  | $ | (24.2 | ) | $ | 201.1 |
EMEA |  | 289.7 |  | — |  | (8.3 | ) | 281.4 |  | — |  | — |  | — |  | 281.4 |
Asia-Pacific |  | 12.9 |  | — |  | — |  | 12.9 |  | — |  | — |  | — |  | 12.9 |
Total |  | $ | 528.2 |  | $ | — |  | $ | (8.6 | ) | $ | 519.6 |  | $ | (24.2 | ) | $ | — |  | $ | (24.2 | ) | $ | 495.4 |
Goodwill and indefinite-lived intangible assets are tested for impairment at least annually or more frequently if events or circumstances indicate that it is “more likely than not” that they might be impaired, such as from a change in business conditions. The Company performs its annual goodwill and indefinite-lived intangible assets impairment assessment in the fourth quarter of each year. Intangible assets with estimable lives and other long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. Recoverability of intangible assets with estimable lives and other long-lived assets are measured by a comparison of the carrying amount of an asset or asset group to future net undiscounted pretax cash flows expected to be generated by the asset or asset group. If these comparisons indicate that an asset is not recoverable, the impairment loss recognized is the amount by which the carrying amount of the asset or asset group exceeds the related estimated fair value. Estimated fair value is based on either discounted future pretax operating cash flows or appraised values, depending on the nature of the asset. The Company determines the discount rate for this analysis based on the weighted average cost of capital based on the market and guideline public companies for the related business, and does not allocate interest charges to the asset or asset group being measured. Judgment is required to estimate future operating cash flows. Intangible assets include the following:
|  | March 30, 2014 |  | December 31, 2013 |
|  | Gross Carrying Amount |  | Accumulated Amortization |  | Net Carrying Amount |  | Gross Carrying Amount |  | Accumulated Amortization |  | Net Carrying Amount |
|  | (in millions) |
Patents |  | $ | 16.5 |  | $ | (12.8 | ) | $ | 3.7 |  | $ | 16.6 |  | $ | (12.6 | ) | $ | 4.0 |
Customer relationships |  | 132.9 |  | (79.1 | ) | 53.8 |  | 133.0 |  | (76.4 | ) | 56.6 |
Technology |  | 26.7 |  | (11.4 | ) | 15.3 |  | 26.9 |  | (10.9 | ) | 16.0 |
Trade Names |  | 13.6 |  | (3.3 | ) | 10.3 |  | 13.7 |  | (3.0 | ) | 10.7 |
Other |  | 8.8 |  | (5.6 | ) | 3.2 |  | 8.8 |  | (5.6 | ) | 3.2 |
Total amortizable intangibles |  | 198.5 |  | (112.2 | ) | 86.3 |  | 199.0 |  | (108.5 | ) | 90.5 |
Indefinite-lived intangible assets |  | 41.9 |  | — |  | 41.9 |  | 41.9 |  | — |  | 41.9 |
Total |  | $ | 240.4 |  | $ | (112.2 | ) | $ | 128.2 |  | $ | 240.9 |  | $ | (108.5 | ) | $ | 132.4 |
Aggregate amortization expense for amortizable intangible assets for both the first quarters of 2014 and 2013 was $3.7 million. Additionally, future amortization expense for the next five years on amortizable intangible assets is expected to be approximately $11.1 million for the remainder of 2014, $14.6 million for 2015, $14.2 million for 2016, $13.8 million for 2017 and $9.9 million for 2018. Amortization expense is recorded on a straight-line basis over the estimated useful lives of the intangible assets. The weighted-average remaining life of total amortizable intangible assets is 8.3 years. Patents, customer relationships, technology, trade names and other amortizable intangibles have weighted-average remaining lives of 5.5 years, 5.3 years, 11.3 years, 10.7 years and 38.4 years, respectively. Indefinite-lived intangible assets primarily include trademarks and trade names.
Stock-Based Compensation | Stock-Based Compensation The Company maintains one stock incentive plan under which key employees have been granted incentive stock options (ISOs) and nonqualified stock options (NSOs) to purchase the Company’s Class A common stock. Under the 2004 Stock Incentive Plan, options typically become exercisable over a four-year period at the rate of 25% per year and expire ten years after the grant date. ISOs and NSOs granted under the plans may have exercise prices of not less than 100% of the fair market value of the Class A common stock on the date of grant. The Company’s current practice is to grant all options at fair market value on the grant date. The Company issued 4,808 stock options and 2,000 stock options during the first three months of 2014 and 2013, respectively. The Company has also granted shares of restricted stock and deferred shares to key employees and stock awards to non-employee members of the Company’s Board of Directors under the 2004 Stock Incentive Plan. Stock awards to non-employee members of the Company’s Board of Directors are fully vested upon grant. Employees’ restricted stock awards and deferred shares typically vest over a three-year period at the rate of one-third per year. The restricted stock awards and deferred shares are amortized to expense on a straight-line basis over the vesting period. The Company issued 1,747 shares of restricted stock and 667 shares of restricted stock in the first three months of 2014 and 2013, respectively, under the 2004 Stock Incentive Plan. The Company also has a Management Stock Purchase Plan that allows for the purchase of restricted stock units (RSUs) by key employees. On an annual basis, key employees may elect to receive a portion of their annual incentive compensation in RSUs instead of cash. Each RSU represents one share of Class A common stock and is purchased by the employee at 67% of the fair market value of the Company’s Class A common stock on the date of grant. RSUs vest either annually over a three-year period from the grant date or upon the third anniversary of the grant date and receipt of the shares underlying RSUs is deferred for a minimum of three years or such greater number of years as is chosen by the employee. An aggregate of 2,000,000 shares of Class A common stock may be issued under the Management Stock Purchase Plan. The Company granted 30,561 RSUs and 44,777 RSUs in the first three months of 2014 and 2013, respectively. The fair value of each RSU issued under the Management Stock Purchase Plan is estimated on the date of grant using the Black-Scholes-Merton Model based on the following weighted average assumptions:
|  | 2014 |  | 2013 |
Expected life (years) |  | 3.0 |  | 3.0 |
Expected stock price volatility |  | 31.2 | % | 34.1 | %
Expected dividend yield |  | 0.9 | % | 0.9 | %
Risk-free interest rate |  | 0.7 | % | 0.4 | %
The above assumptions were used to determine the weighted average grant-date fair value of RSUs of $22.57 and $18.05 in 2014 and 2013, respectively. A more detailed description of each of these plans can be found in Note 12 of Notes to Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013.
Shipping and Handling | Shipping and Handling The Company’s shipping and handling costs included in selling, general and administrative expenses were $14.7 million and $13.9 million for the first quarters of 2014 and 2013, respectively. The 2013 shipping and handling costs disclosed have been updated to include handling costs in order to be comparable with the current quarter.
Research and Development | Research and Development Research and development costs included in selling, general and administrative expenses were $6.3 million and $5.4 million for the first quarters of 2014 and 2013, respectively.
Taxes, Other than Income Taxes | Taxes, Other than Income Taxes Taxes assessed by governmental authorities on sale transactions are recorded on a net basis and excluded from sales in the Company’s consolidated statements of operations.
Income Taxes | Income Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. 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 on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.
New Accounting Standards | New Accounting Standards In April 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-08, “Presentation of Financial Statements and Property, Plant, and Equipment: Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity”. ASU 2014-08 will change the definition of discontinued operations and limit discontinued operations presentation to disposals of components representing a strategic shift that will have a major effect on the operations and financial results of the issuer. ASU 2014-08 is effective in the first quarter of 2015 for public companies with calendar year ends, with early adoption permitted. The adoption of this guidance is not expected to have a material impact on the Company’s financial statements.

X
- Details
Name: | us-gaap_AccountingPoliciesAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition Disclosure of accounting policy for the impairment and disposal of long-lived assets including goodwill and other intangible assets. + References No definition available. + Details
Name: | us-gaap_ImpairmentOrDisposalOfLongLivedAssetsIncludingIntangibleAssetsPolicyPolicyTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Disclosure of accounting policy for income taxes, which may include its accounting policies for recognizing and measuring deferred tax assets and liabilities and related valuation allowances, recognizing investment tax credits, operating loss carryforwards, tax credit carryforwards, and other carryforwards, methodologies for determining its effective income tax rate and the characterization of interest and penalties in the financial statements. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6367646&loc=d3e18780-107790 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -URI http://asc.fasb.org/subtopic&trid=2144681 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -URI http://asc.fasb.org/subtopic&trid=2144749 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 19 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32840-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 954 -SubTopic 740 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6491622&loc=d3e9504-115650 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32809-109319 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 45 -Paragraph 25 -URI http://asc.fasb.org/extlink&oid=21917399&loc=d3e32247-109318 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 45 -Paragraph 28 -URI http://asc.fasb.org/extlink&oid=21917399&loc=d3e32280-109318 + Details
Name: | us-gaap_IncomeTaxPolicyTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Disclosure of accounting policy pertaining to new accounting pronouncements that may impact the entity's financial reporting. Includes, but is not limited to, quantification of the expected or actual impact. + References No definition available. + Details
Name: | us-gaap_NewAccountingPronouncementsPolicyPolicyTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Disclosure of accounting policy for costs it has incurred (1) in a planned search or critical investigation aimed at discovery of new knowledge with the hope that such knowledge will be useful in developing a new product or service, a new process or technique, or in bringing about a significant improvement to an existing product or process; or (2) to translate research findings or other knowledge into a plan or design for a new product or process or for a significant improvement to an existing product or process. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6367646&loc=d3e18780-107790 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 730 -SubTopic 10 -URI http://asc.fasb.org/subtopic&trid=2127266 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Glossary Research and Development -URI http://asc.fasb.org/extlink&oid=6523717 + Details
Name: | us-gaap_ResearchAndDevelopmentExpensePolicy
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Disclosure of accounting policy for stock option and stock incentive plans. This disclosure may include (1) the types of stock option or incentive plans sponsored by the entity (2) the groups that participate in (or are covered by) each plan (3) significant plan provisions and (4) how stock compensation is measured, and the methodologies and significant assumptions used to determine that measurement. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6367646&loc=d3e18780-107790 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (b),(f) -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5070-113901 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -URI http://asc.fasb.org/subtopic&trid=2228939 + Details
Name: | us-gaap_ShareBasedCompensationOptionAndIncentivePlansPolicy
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Disclosure of accounting policy for the classification of shipping and handling costs, including whether the costs are included in cost of sales or included in other income statement accounts. If shipping and handling fees are significant and are not included in cost of sales, disclosure includes both the amounts of such costs and the line item on the income statement which includes such costs. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6367646&loc=d3e18780-107790 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6367646&loc=d3e18726-107790 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 605 -SubTopic 45 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6408196&loc=d3e61069-111654 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Glossary Handling Costs -URI http://asc.fasb.org/extlink&oid=6514758 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 605 -SubTopic 45 -Section 45 -Paragraph 20 -URI http://asc.fasb.org/extlink&oid=21915142&loc=d3e60635-111653 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 605 -SubTopic 45 -Section S99 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6408413&loc=d3e221937-122793 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Glossary Shipping Costs -URI http://asc.fasb.org/extlink&oid=6525344 + Details
Name: | us-gaap_ShippingAndHandlingCostPolicyTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Disclosure of accounting policy for the use of estimates in the preparation of financial statements in conformity with generally accepted accounting principles. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 275 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6927468&loc=d3e6143-108592 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 275 -SubTopic 10 -Section 50 -Paragraph 8 -URI http://asc.fasb.org/extlink&oid=6927468&loc=d3e6132-108592 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 275 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6927468&loc=d3e6061-108592 + Details
Name: | us-gaap_UseOfEstimates
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Disclosure of the accounting policy for taxes other than income taxes, which may include accounting policies for recognition and measurement. + References No definition available. + Details
Name: | wts_TaxOtherThanIncomeTaxPolicyTextBlock
Namespace Prefix: | wts_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration