Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q 2665 South Bayshore Drive, Suite 901 Miami, Florida 33133 Telephone: (305) 714-4100 Securities registered pursuant to Section 12(b) of the Act: | | Trading | Name of each exchange | | --- | --- | --- | | Title of each class | Symbol(s) | on which registered | | Common stock, $0.50 par value | WSO | New York Stock Exchange | | Class B common stock, $0.50 par value | WSOB | New York Stock Exchange | ☒ Quarterly ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Quarterly Period Ended June 30, 2022 or ☐ Transition Report Pursuant To Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Transition Period From to Commission file number 1-5581 I.R.S. Employer Identification Number 59-0778222 WATSCO, INC. (a Florida Corporation) 2665 South Bayshore Drive, Suite ...

Financial Data and Key Metrics Changes - Earnings per share increased by 33% to a record $4.93 for the quarter, with sales growing 15% to a record $2.13 billion, marking the first $2 billion quarter [6] - Operating income rose 32% to a record $287 million, with margins expanding 180 basis points to a record 13.5% [6][7] - For the first half of the year, earnings per share increased by 53% to a record $7.83, with a 22% increase in sales [7] Business Line Data and Key Metrics Changes - The company reported strong same-store sales growth of 29% in the previous year, indicating robust performance against tough comparisons [7] - Current trends show meaningful unit growth and additional price capture as inflation persists in the industry [8] Market Data and Key Metrics Changes - The company noted significant growth in the Southeast and Southwest regions, with substantial increases in demand compared to the previous year [46] - Unit sales in early July were reported to be up mid to high single digits [50] Company Strategy and Development Direction - The company is focusing on productivity and operating efficiencies to sustain growth and build market share despite challenges in the supply chain [9] - Regulatory changes, such as the increase in minimum federal SEER standards in 2023, are expected to create growth opportunities [14][15] - The company is investing in technology to enhance customer engagement and reduce attrition, which is expected to yield long-term benefits [12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about 2023, citing regulatory changes and the necessity of HVAC products in key markets as drivers of demand [14][105] - The company acknowledged potential economic slowdowns and higher interest rates but remains focused on capturing market opportunities [8][9] - Management emphasized the importance of consumer financing options to facilitate purchases in a potentially inflationary environment [78] Other Important Information - The company maintains a strong balance sheet with minimal debt, allowing for continued investment in growth [16] - There is an ongoing focus on improving SG&A efficiency as the company adapts to changing market conditions [35][118] Q&A Session Summary Question: Update on gross margins and digital pricing optimization - Management highlighted the importance of technology in managing pricing amidst multiple price increases from manufacturers, indicating that the tools have eased administrative burdens and created opportunities for price optimization [25][26] Question: Sales trends exiting the quarter and into July - Management reported a strong increase in demand in July, particularly in the Southeast and Southwest regions, with unit sales up mid to high single digits [46][50] Question: Impact of SEER changes on pricing mix in 2023 - Management indicated that a significant portion of equipment sales would see mid-teen price increases due to regulatory changes, suggesting a meaningful price mix benefit in 2023 [54][56] Question: Concerns about potential consumer pushback on pricing - Management noted that there has been no significant pushback on pricing to date, attributing strong demand to the necessity of HVAC products [72] Question: Outlook for 2023 and potential slowing demand - Management clarified that while new construction sales may be impacted, overall demand remains strong, and they are optimistic about continued growth in 2023 [99][105] Question: SG&A growth in relation to revenue growth - Management acknowledged that SG&A has grown in line with sales but emphasized the need for improved efficiency and productivity moving forward [116][118]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Quarterly Period Ended March 31, 2022 or ☐ Transition Report Pursuant To Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Transition Period From to Commission file number 1-5581 I.R.S. Employer Identification Number 59-0778222 WATSCO, INC. (a Florida Corporation) 2665 South Bayshore Drive, Suite ...

Watsco, Inc. (NYSE:WSO) Q1 2022 Earnings Conference Call April 21, 2022 10:00 AM ET Company Participants Albert Nahmad - Chairman and Chief Executive Officer Aaron Nahmad - President Paul Johnston - Executive Vice President Barry Logan - Executive Vice President of Planning & Strategy and Secretary Rick Gomez - Vice President of Corporate Development Conference Call Participants Thomas Moll - Stephens Inc. Jeffrey Sprague - Vertical Research Partners, LLC Jeffrey Hammond - KeyBanc Capital Markets Inc. Nigel ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ Annual Report Pursuant to Section 13 or 15(d) of the Securities and Exchange Act of 1934 For the Fiscal Year Ended December 31, 2021 or ☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Transition Period from to Commission File Number 1-5581 WATSCO, INC. 2665 South Bayshore Drive, Suite 901 Miami, FL 33133 (Address of principal executive offices, including zi ...

Financial Data and Key Metrics Changes - In Q4 2021, earnings per share increased by 77% to a record $2.02, while sales grew by 31% to a record $1.5 billion. Operating income rose by 76% to a record $123 million, with operating margins expanding by 210 basis points to 8.1% [6] - For the full year 2021, earnings per share increased by 54% to a record $10.78, with sales growing by 24% to a record $6.3 billion. Operating income increased by $227 million or 57% to a record $629 million, and operating margins reached 10%, a 210 basis points increase from the previous year [7][8] Business Line Data and Key Metrics Changes - The company reported a 22% growth in HVAC equipment, with unit growth in the quarter and for the year both at 9% [40] - Non-equipment business also performed well, contributing to overall margin improvement [25] Market Data and Key Metrics Changes - The company noted that its sales of more efficient systems helped avoid 10.1 million metric tons of CO2 emissions over two years, equivalent to taking 2.2 million cars off the road [12] - The company highlighted a strong demand for high-efficiency systems, which are expected to grow due to regulatory changes mandating higher efficiency standards [13][75] Company Strategy and Development Direction - Watsco aims to build scale in the fragmented $50 billion North American market and is actively seeking acquisitions to sustain family business cultures while providing technology [9] - The company is investing in technology to enhance contractor customer experience, with e-commerce sales approaching $2 billion annually [14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong balance sheet and the ability to invest in growth opportunities, while also emphasizing the importance of addressing climate change through high-efficiency HVAC systems [10][11] - The management team indicated that they expect a normal year in 2022, with existing home sales and a trend towards heat pump growth supporting this outlook [43] Other Important Information - The company announced a 13% increase in its dividend to an annual rate of $8.80 per share, reflecting strong performance and confidence in future growth [8] - Management discussed the impact of regulatory changes on the HVAC industry, including new refrigerant regulations aimed at reducing CO2 emissions [13][75] Q&A Session Summary Question: Can you unpack the record gross margin? - Management explained that higher sales mix of efficiency products and effective pricing strategies contributed to the gross margin increase [21][25] Question: What initiatives are in place with OEMs for 2022? - Management highlighted ongoing communication and collaboration with OEMs, focusing on inventory analysis and marketing programs [31][32] Question: What is the outlook for pricing in 2022? - Management indicated that they expect continued price increases due to regulatory changes and ongoing inflationary pressures [38][39] Question: How are inventories being managed? - Management noted that inventories grew sequentially due to inflation and a need to align with market demand, emphasizing a long-term perspective [49][50] Question: What is the growth outlook for high-efficiency systems? - Management stated that high-efficiency systems are a focus area, with expectations for increased sales driven by regulatory changes and technology adoption [126][127]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Quarterly Period Ended September 30, 2021 or ☐ Transition Report Pursuant To Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Transition Period From to Commission file number 1-5581 I.R.S. Employer Identification Number 59-0778222 WATSCO, INC. (a Florida Corporation) 2665 South Bayshore Drive, S ...

Watsco, Inc. (NYSE:WSO) Q3 2021 Earnings Conference Call October 20, 2021 10:00 AM ET Company Participants Albert Nahmad - CEO Paul Johnston - EVP Barry Logan - Executive VP of Planning & Strategy and Secretary Aaron Nahmad - President & Director Conference Call Participants Tommy Moll - Stephens Steve Volkmann - Jefferies Jeff Hammond - KeyBanc Capital Markets David Manthey - Baird Jeff Sprague - Vertical Research Chris Dankert - Loop Capital Ryan Merkel - William Blair Steve Tusa - JPMorgan Josh Pokrzywin ...

PART I. FINANCIAL INFORMATION [Item 1. Condensed Consolidated Unaudited Financial Statements](index=3&type=section&id=Item%201.%20Condensed%20Consolidated%20Unaudited%20Financial%20Statements) This section presents Watsco, Inc.'s unaudited condensed consolidated financial statements and related notes for the quarters and six months ended June 30, 2021 and 2020 [Condensed Consolidated Unaudited Statements of Income](index=4&type=section&id=Condensed%20Consolidated%20Unaudited%20Statements%20of%20Income) Watsco reported significant revenue and net income growth for both the second quarter and the first half of 2021 compared to the prior year Condensed Consolidated Unaudited Statements of Income (in thousands) | Metric (in thousands) | Q2 2021 | Q2 2020 | Change (%) | H1 2021 | H1 2020 | Change (%) | | :-------------------- | :------ | :------ | :--------- | :------ | :------ | :--------- | | Revenues | $1,849,640 | $1,355,385 | 36.5% | $2,985,758 | $2,363,541 | 26.3% | | Gross profit | $477,941 | $319,199 | 49.7% | $772,762 | $566,814 | 36.3% | | Operating income | $216,783 | $129,249 | 67.7% | $298,663 | $174,492 | 71.2% | | Net income attributable to Watsco, Inc. | $144,102 | $86,578 | 66.4% | $199,194 | $117,080 | 70.1% | | Basic EPS | $3.73 | $2.26 | 65.0% | $5.16 | $3.03 | 70.3% | | Diluted EPS | $3.71 | $2.26 | 64.2% | $5.13 | $3.02 | 69.9% | [Condensed Consolidated Unaudited Statements of Comprehensive Income](index=5&type=section&id=Condensed%20Consolidated%20Unaudited%20Statements%20of%20Comprehensive%20Income) Comprehensive income attributable to Watsco, Inc. increased significantly for both the second quarter and the first half of 2021, primarily driven by higher net income Condensed Consolidated Unaudited Statements of Comprehensive Income (in thousands) | Metric (in thousands) | Q2 2021 | Q2 2020 | Change (%) | H1 2021 | H1 2020 | Change (%) | | :-------------------- | :------ | :------ | :--------- | :------ | :------ | :--------- | | Net income | $172,133 | $104,242 | 65.1% | $238,260 | $140,489 | 69.6% | | Other comprehensive income (loss) | $3,988 | $8,356 | -52.3% | $7,764 | $(10,924) | N/A | | Comprehensive income attributable to Watsco, Inc. | $146,751 | $92,099 | 59.3% | $204,317 | $109,862 | 86.0% | [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2021, Watsco's total assets and liabilities increased, primarily due to higher accounts receivable, inventories, and borrowings, while shareholders' equity also grew Condensed Consolidated Balance Sheets (in thousands) | Metric (in thousands) | June 30, 2021 | December 31, 2020 | Change (%) | | :-------------------- | :------------ | :---------------- | :--------- | | Cash and cash equivalents | $96,787 | $146,067 | -33.7% | | Accounts receivable, net | $857,864 | $535,288 | 60.2% | | Inventories, net | $1,044,608 | $781,299 | 33.7% | | Total current assets | $2,022,062 | $1,484,445 | 36.2% | | Total assets | $3,131,684 | $2,484,347 | 26.1% | | Total current liabilities | $815,264 | $487,145 | 67.3% | | Borrowings under revolving credit agreement | $114,167 | $— | N/A | | Total long-term obligations | $305,257 | $144,338 | 111.5% | | Total shareholders' equity | $1,931,533 | $1,779,761 | 8.5% | [Condensed Consolidated Unaudited Statements of Shareholders' Equity](index=7&type=section&id=Condensed%20Consolidated%20Unaudited%20Statements%20of%20Shareholders'%20Equity) Shareholders' equity increased from December 31, 2020, to June 30, 2021, driven by net income and non-controlling interests, partially offset by dividends Condensed Consolidated Unaudited Statements of Shareholders' Equity (in thousands) | Metric (in thousands) | December 31, 2020 | June 30, 2021 | | :-------------------- | :---------------- | :------------ | | Total Shareholders' Equity | $1,779,761 | $1,931,533 | | Net income (H1 2021) | N/A | $199,194 | | Cash dividends declared and paid (H1 2021) | N/A | $(143,909) | | Investment in TEC Distribution LLC (non-controlling interest) | N/A | $21,040 | [Condensed Consolidated Unaudited Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Unaudited%20Statements%20of%20Cash%20Flows) Net cash provided by operating activities decreased significantly for H1 2021, while cash used in investing activities increased due to acquisitions, and financing activities saw a reduced outflow Condensed Consolidated Unaudited Statements of Cash Flows (in thousands) | Metric (in thousands) | H1 2021 | H1 2020 | Change (H1 2021 vs H1 2020) | | :-------------------- | :------ | :------ | :-------------------------- | | Net cash provided by operating activities | $81,882 | $261,255 | $(179,373) | | Net cash used in investing activities | $(131,464) | $(7,982) | $(123,482) | | Net cash used in financing activities | $(981) | $(247,299) | $246,318 | | Net (decrease) increase in cash and cash equivalents | $(49,280) | $5,119 | $(54,399) | | Cash and cash equivalents at end of period | $96,787 | $79,573 | $17,214 | [Notes to Condensed Consolidated Unaudited Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Unaudited%20Financial%20Statements) These notes provide essential context to the financial statements, detailing Watsco's business, consolidation practices, seasonal sales, COVID-19 impacts, revenue disaggregation, recent acquisitions, and related party transactions - Watsco is the largest distributor of air conditioning, heating, and refrigeration equipment and related parts and supplies (HVAC/R) in North America[26](index=26&type=chunk) - Sales of residential central air conditioners, heating equipment, and parts and supplies are seasonal, with demand for AC highest in **Q2/Q3** and heating equipment in **Q1/Q4**[28](index=28&type=chunk) - The impact of COVID-19 has shifted from direct pandemic-related issues (closures, illness) to broader economic and marketplace dynamics, including supply chain disruptions and labor shortages[31](index=31&type=chunk) Revenue Disaggregation (in thousands) | Revenue Disaggregation | Q2 2021 | Q2 2020 | H1 2021 | H1 2020 | | :--------------------- | :------ | :------ | :------ | :------ | | **Primary Geographical Regions:** | | | | | | United States | $1,665,253 | $1,226,649 | $2,676,519 | $2,126,193 | | Canada | $113,880 | $71,917 | $188,372 | $127,258 | | Latin America and the Caribbean | $70,507 | $56,819 | $120,867 | $110,090 | | **Major Product Lines (% of total):** | | | | | | HVAC equipment | 71% | 71% | 69% | 69% | | Other HVAC products | 26% | 26% | 28% | 28% | | Commercial refrigeration products | 3% | 3% | 3% | 3% | - On May 7, 2021, Watsco acquired Acme Refrigeration of Baton Rouge LLC for **$22.855 million** (net purchase price of **$18.051 million** cash, **8,492 shares** of Common stock, and **$3.141 million** repayment of indebtedness)[36](index=36&type=chunk) - On April 9, 2021, Watsco acquired the HVAC distribution business of Temperature Equipment Corporation, forming a new joint venture (TEC Distribution LLC) with Carrier, with Watsco holding an **80% controlling interest** and the purchase consideration being **$105.2 million** cash[38](index=38&type=chunk) - Purchases from Carrier and its affiliates comprised **72%** and **67%** of all inventory purchases during Q2 and H1 2021, respectively, indicating a significant related party relationship[58](index=58&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=16&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Watsco's strong financial performance in Q2 and H1 2021, driven by demand and acquisitions, while addressing COVID-19 impacts, liquidity, and capital resources [Company Overview](index=16&type=section&id=Company%20Overview) Watsco, North America's largest HVAC/R distributor, operates 655 locations, with revenues primarily from equipment sales and a seasonal demand pattern - Watsco operates from **655 locations** in 42 U.S. states, Canada, Mexico, and Puerto Rico as of June 30, 2021[63](index=63&type=chunk) - Revenues primarily consist of sales of air conditioning, heating, and refrigeration equipment, and related parts and supplies[64](index=64&type=chunk) - Sales are seasonal, with residential AC demand highest in **Q2** and **Q3**, and heating equipment demand highest in **Q1** and **Q4**[65](index=65&type=chunk) [Impact of the COVID-19 Pandemic](index=17&type=section&id=Impact%20of%20the%20COVID-19%20Pandemic) Watsco's essential operations continued during COVID-19, with impacts shifting from direct disruptions to supply chain and labor issues, while austerity measures eased in 2021 - Watsco's employees' work is considered essential, allowing operations to continue with modifications during the pandemic[66](index=66&type=chunk) - The pandemic's impact shifted from location closures and employee illness to supply chain disruptions and labor shortages in 2021[70](index=70&type=chunk) - The company implemented austerity measures in 2020, which have since eased as economic conditions recovered[69](index=69&type=chunk)[70](index=70&type=chunk) [Joint Ventures with Carrier Global Corporation](index=17&type=section&id=Joint%20Ventures%20with%20Carrier%20Global%20Corporation) Watsco maintains several joint ventures with Carrier Global Corporation, including the recently formed TEC Distribution LLC in April 2021, primarily holding controlling interests - Watsco has an **80% controlling interest** in Carrier Enterprise I, formed in 2009, which includes Carrier InterAmerica Corporation[72](index=72&type=chunk) - Watsco holds an **80% controlling interest** in Carrier Enterprise II, formed in 2011, which includes operations in the Northeast U.S. and Mexico[74](index=74&type=chunk) - A new joint venture, TEC Distribution LLC, was formed with Carrier in April 2021, with Watsco holding an **80% controlling interest**, to operate the acquired Temperature Equipment Corporation business[76](index=76&type=chunk) [Critical Accounting Policies](index=18&type=section&id=Critical%20Accounting%20Policies) No significant changes to critical accounting policies were reported for the quarter ended June 30, 2021, compared to the 2020 Annual Report on Form 10-K - No significant changes to critical accounting policies were reported for the quarter ended June 30, 2021, compared to the 2020 Annual Report on Form 10-K[78](index=78&type=chunk) [Results of Operations](index=18&type=section&id=Results%20of%20Operations) Watsco achieved robust financial performance in Q2 and H1 2021, with significant revenue and net income growth driven by strong demand, price increases, and improved gross profit margins Results of Operations (% of Revenues) | Metric (% of Revenues) | Q2 2021 | Q2 2020 | H1 2021 | H1 2020 | | :--------------------- | :------ | :------ | :------ | :------ | | Revenues | 100.0% | 100.0% | 100.0% | 100.0% | | Cost of sales | 74.2% | 76.4% | 74.1% | 76.0% | | Gross profit | 25.8% | 23.6% | 25.9% | 24.0% | | Selling, general and administrative expenses | 14.4% | 14.3% | 16.2% | 16.8% | | Operating income | 11.7% | 9.5% | 10.0% | 7.4% | | Net income attributable to Watsco, Inc. | 7.8% | 6.4% | 6.7% | 5.0% | - Revenues for Q2 2021 increased by **$494.3 million** (**36%**), with **$104.8 million** from new acquisitions, resulting in a **29%** increase in same-store revenues[83](index=83&type=chunk) - Q2 2021 gross profit margin improved by **220 basis-points** to **25.8%** (vs **23.6%** in Q2 2020), primarily due to pricing and mix for HVAC equipment[84](index=84&type=chunk) - H1 2021 revenues increased by **$622.2 million** (**26%**), with **$104.8 million** from new acquisitions, resulting in a **22%** increase in same-store revenues[91](index=91&type=chunk) - H1 2021 gross profit margin improved by **190 basis-points** to **25.9%** (vs **24.0%** in H1 2020), due to pricing and mix for HVAC equipment[92](index=92&type=chunk) - Net income attributable to Watsco, Inc. for Q2 2021 increased by **$57.5 million** (**66%**) and for H1 2021 increased by **$82.1 million** (**70%**) compared to the same periods in 2020[90](index=90&type=chunk)[97](index=97&type=chunk) [Liquidity and Capital Resources](index=21&type=section&id=Liquidity%20and%20Capital%20Resources) Watsco's liquidity is supported by operating cash flows and a revolving credit agreement, funding working capital, dividends, and acquisitions, while managing a contingent liability for a potential ownership purchase - Watsco's liquidity is primarily supported by operating cash flows and borrowing capacity under its revolving credit agreement[98](index=98&type=chunk) - As of June 30, 2021, cash and cash equivalents totaled **$96.8 million**, with **$80.6 million** held by foreign subsidiaries[99](index=99&type=chunk) - Working capital increased to **$1,206.8 million** at June 30, 2021, with **$105.2 million** attributable to 2021 acquisitions[102](index=102&type=chunk) - Net cash provided by operating activities decreased by **$179.4 million** to **$81.9 million** for H1 2021, primarily due to higher accounts receivable and inventory[103](index=103&type=chunk)[104](index=104&type=chunk) - Net cash used in investing activities increased by **$123.5 million** to **$131.5 million** for H1 2021, mainly due to the ACME and TEC acquisitions[103](index=103&type=chunk)[105](index=105&type=chunk) - As of June 30, 2021, **$114.2 million** was outstanding under the **$560.0 million** revolving credit agreement, which matures on December 5, 2023[107](index=107&type=chunk) - Watsco has a contingent liability of approximately **$299.0 million** for the potential purchase of additional ownership interests in Russell Sigler, Inc. (RSI)[110](index=110&type=chunk) - Cash dividends of **$3.725 per share** were paid during H1 2021, an increase from **$3.375 per share** in H1 2020[115](index=115&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=23&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) No material changes to market risk disclosures were reported compared to the company's 2020 Annual Report on Form 10-K - No material changes to market risk information were reported compared to the 2020 Annual Report on Form 10-K[117](index=117&type=chunk) [Item 4. Controls and Procedures](index=23&type=section&id=Item%204.%20Controls%20and%20Procedures) Watsco's disclosure controls and procedures were effective as of June 30, 2021, with no material changes to internal controls, though recent acquisitions' controls remain unassessed - Disclosure controls and procedures were evaluated and deemed effective at a reasonable assurance level as of June 30, 2021[119](index=119&type=chunk) - No material changes in internal controls over financial reporting occurred during the quarter ended June 30, 2021[120](index=120&type=chunk) - Internal controls over financial reporting for recent acquisitions, ACME and TEC (representing approximately **8%** of total consolidated assets and approximately **4%** of Q2 2021 consolidated revenues), have not yet been assessed[121](index=121&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=23&type=section&id=Item%201.%20Legal%20Proceedings) Information regarding legal proceedings is incorporated by reference from Note 9 to the condensed consolidated unaudited financial statements - Information on legal proceedings is referenced from Note 9 of the financial statements[122](index=122&type=chunk) [Item 1A. Risk Factors](index=23&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the risk factors were reported compared to the company's 2020 Annual Report on Form 10-K - No material changes to risk factors were reported compared to the 2020 Annual Report on Form 10-K[123](index=123&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=23&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) On May 7, 2021, Watsco issued 8,492 shares of unregistered Common stock for the acquisition of Acme Refrigeration, exempt from registration under Section 4(a)(2) of the Securities Act - **8,492 shares** of unregistered Common stock were issued on May 7, 2021, for the acquisition of ACME, exempt from registration under Section 4(a)(2) of the Securities Act[124](index=124&type=chunk) [Item 6. Exhibits](index=24&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Quarterly Report on Form 10-Q, including certifications from key executives and Inline XBRL documents - Exhibits include certifications from the CEO, EVP, and CFO (Sections 302 and 906 of Sarbanes-Oxley Act) and Inline XBRL documents[126](index=126&type=chunk) SIGNATURE [SIGNATURE](index=25&type=section&id=SIGNATURE) The report was duly signed on August 5, 2021, by Ana M. Menendez, Chief Financial Officer of Watsco, Inc - The report was signed by Ana M. Menendez, Chief Financial Officer, on August 5, 2021[128](index=128&type=chunk)