Watsco, Inc. and its subsidiaries operate as a distributor of air conditioning, heating and refrigeration equipment and related parts and supplies (HVAC/R) in the HVAC/R distribution industry in North America. As of December 31, 2014, the company operated from 572 locations in 38 U.S. states, Canada, Mexico, and Puerto Rico with additional market coverage on an export basis to Latin America and the Caribbean, through which the company serves approximately 50,000 contractors and dealers that service the replacement and new construction markets. Products The company sells a line of products and maintains a mix of inventory to meet its customers’ immediate needs and intends to provide products a contractor would require when installing or repairing a central air conditioner, furnace or refrigeration system on short notice. The products that the company distributes consist of equipment, including residential central air conditioners ranging from 1-1/2 to 5 tons, gas, electric and oil furnaces ranging from 50,000 to 150,000 British Thermal Units, commercial air conditioning and heating equipment and systems ranging from 1-1/2 to 25 tons and other specialized equipment; parts, including replacement compressors, evaporator coils, motors, and other component parts; and supplies, including thermostats, insulation material, refrigerants, ductwork, grills, registers, sheet metal, tools, copper tubing, concrete pads, tape, adhesives, and other ancillary supplies. The company also sells products to the refrigeration market. These products include condensing units, compressors, evaporators, valves, refrigerant, walk-in coolers and ice machines for industrial and commercial applications. The company distributes products manufactured by Copeland Compressor Corporation, a subsidiary of Emerson Electric Co. (Emerson); E. I. Du Pont De Nemours and Company (DuPont); Mueller Industries, Inc.; Owens Corning Insulating Systems, LLC; and The Manitowoc Company, Inc. (Manitowoc). Joint Ventures The company has a joint venture with Carrier (Carrier Corporation, a subsidiary of United Technologies Corporation), which it refers to as Carrier Enterprise I, in which Carrier contributed 95 of its company-owned locations in 13 Sun Belt states and Puerto Rico and its export division in Miami, Florida; and the company contributed 15 locations that distributed Carrier products. The company exercised its option to acquire an additional 10% ownership interest in Carrier Enterprise I, which increased its ownership interest to 70%; and in 2014, the company exercised its last remaining option to acquire an additional 10% ownership interest in Carrier Enterprise I, which increased its controlling interest in Carrier Enterprise I to 80%. The company has a second joint venture with Carrier and completed two additional transactions. Carrier contributed 28 of its company-owned locations in 8 Northeast U.S. states, and the company contributed 14 locations in the Northeast United States. The company owns Carrier’s distribution operations in Mexico, which included seven locations. Collectively, the Northeast locations and the Mexico operations are referred to as Carrier Enterprise II. The company has a 60% controlling interest in Carrier Enterprise II, and Carrier has a 40% noncontrolling interest. The company has a third joint venture, which it refers to as Carrier Enterprise III, with UTC Canada Corporation (UTC Canada), an affiliate of Carrier. Carrier contributed 35 of its company-owned locations in Canada to Carrier Enterprise III.
watsco inc (WSO:New York)
2665 South Bayshore Drive
Miami, FL 33133
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