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Item 9A. Controls and Procedures

2025-02-28 compared with 2024-02-23 · 44 added, 21 removed, 155 unchanged (30% of the section changed)

1 unchanged sentence

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as defined in Rule 13a-15(e)

under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) that are, among other things, designed to ensure that information required to be disclosed by us under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer (“CEO”), Executive Vice President (“EVP”), and Chief Financial Officer (“CFO”), to allow for timely decisions regarding required disclosure and appropriate SEC filings.

We maintain disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) that are, among other things, designed to ensure that information required to be disclosed by us under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer (“CEO”), Executive Vice President (“EVP”), and Chief Financial Officer (“CFO”), to allow for timely decisions regarding required disclosure and appropriate SEC filings.

Our management, with the participation of our CEO, EVP and CFO, evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report, and, based on that evaluation, our CEO, EVP and CFO concluded that our disclosure controls and procedures were effective, at a reasonable assurance level, at and as of such date.

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This results in refinements to processes throughout the Company.

However, there were no changes in internal controls over financial reporting (as such term is defined in Rules 13a-15(f)

and 15d-15(f)

under the Exchange Act) during the quarter ended December 31, 2023, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

In accordance with the SEC’s guidance that an assessment of a recently acquired business may be omitted from the scope in the year of acquisition, we have not yet assessed the internal control over financial reporting of Gateway Supply LLC (“GWS”), which represented approximately 4% of our total consolidated assets at December 31, 2023 and approximately 1% of our total consolidated revenues for the year ended December 31, 2023.

From the acquisition date of September 1, 2023 to December 31, 2023, the processes and systems of GWS did not impact the internal controls over financial reporting for our other consolidated subsidiaries.

However, there were no changes in internal controls over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended December 31, 2024, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

OTHER INFORMATION

During the quarter ended December 31, 2023, none of our officers or directors adopted or terminated any contract, instruction or written plan for the purchase or sale of our securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act or any “non-Rule

trading arrangement”, as defined in Item 408 of Regulation S-K.

During the quarter ended December 31, 2024, none of our officers or directors adopted or terminated any contract, instruction or written plan for the purchase or sale of our securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c)

under the Exchange Act or any “non-Rule

trading arrangement ,

” as defined in Item 408 of Regulation S-K.

Appointment of Director

On February 25, 2025, the Board of Directors appointed Gary L.

Tapella, 81, as a Common stock director to fill the vacancy on the Board of Directors formerly held by John A.

Macdonald, whose term as a director expired at Watsco’s 2024 annual meeting of shareholders.

The Board of Directors nominated Mr.

Tapella to stand for election at the Company’s 2025 annual shareholder meeting for a term to expire at the Company’s 2028 annual meeting of shareholders.

Tapella has served on Watsco’s Advisory Board since February 2022 and previously served as a Watsco director from 2006 to 2010.

Tapella retired in 2005 after a 36-year career with Rheem Manufacturing Company, one of the Company’s principal suppliers, where he served in various leadership capacities, ultimately as President and Chief Executive Officer.

Presently, he serves as an Operating Partner of One Rock Capital Partners, LLC, a value-oriented, operationally focused private equity firm.

Prior to joining One Rock he was an Operating Partner at Ripplewood Holdings, LLC from 2005 to 2009.

Tapella will participate in the standard non-employee director compensation arrangements described in the section entitled “Director Compensation” that is included in the Company’s 2024 Proxy Statement filed with the Securities and Exchange Commission on April 26, 2024.

There are no arrangements or understandings between either Mr.

Tapella, on the one hand, and any other person, on the other hand, pursuant to which he was appointed to the Board of Directors.

Since the beginning of the Company’s last fiscal year, the Company has not engaged in any transactions, and there are no proposed transactions, or series of similar transactions, in which Mr.

Tapella was or is to be a participant and in which any related person had a direct or indirect material interest in which the amount involved exceeds or exceeded $120,000.

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

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which includes Items 10 through 14, is omitted because we will file definitive proxy material pursuant to Regulation 14A not more than 120 days after the close of our most recently ended fiscal year, which proxy material will include the information required by Items 10 through 14 and is incorporated herein by reference.

Insider Trading Policy

The Company has adopted an insider trading policy which governs the purchase, sale and/or any other dispositions of the Company’s securities by the Company and its directors, officers and employees and is reasonably designed to promote compliance with insider trading laws, rules and regulations, and applicable exchange listing standards.

A copy of our Insider Trading Policy is filed as Exhibit 19 to this Annual Report on Form 10-K.

EXHIBITS, FINANCIAL STATEMENT SCHEDULES

3 unchanged sentences

The schedules are omitted because they are not applicable or the required information is shown in the consolidated financial statements or notes thereto.

The following exhibits are submitted with this Annual Report on Form 10-K

or, where indicated, incorporated by reference to other filings.

The following exhibits are submitted with this Annual Report on Form 10-K or, where indicated, incorporated by reference to other filings.

INDEX TO EXHIBITS

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and Albert H.

Nahmad (filed as Exhibit 10.1(z) to the Annual Report on Form 10-K for the year ended December 31, 2023 and incorporated herein by reference).*

Amended and Restated Twenty-fifth Amendment to Employment Agreement and Incentive Plan dated January 31, 1996 by and between Watsco, Inc.

and Albert H.

Nahmad (filed as Exhibit 10.1 to the Report on Form 8-K filed on November 15, 2024 and incorporated herein by reference).*

Twenty-sixth Amendment dated January 1, 2025 to Employment Agreement and Incentive Plan dated January 31, 1996 by and between Watsco, Inc.

and Albert H.

2014 Incentive Compensation Plan (filed as Appendix A to the Definitive Proxy Statement on Schedule 14A in respect of our 2014 Annual Meeting of Shareholders and incorporated herein by reference).

6 unchanged sentences

Bank National Association and Wells Fargo Bank, National Association as Co-Documentation Agents (filed as Exhibit 10.1 to the Current Report on Form 8-K filed on March 22, 2023 and incorporated herein by reference).

Second Amended and Restated Sales Agreement dated November 3, 2023, by and between Watsco, Inc.

Third Amended and Restated Sales Agreement dated May 3, 2024 by and between Watsco, Inc.

and Robert W.

Incorporated (filed as Exhibit 10.1 to the Quarterly Report on Form 10-Q for the quarter ended September 30, 2023 and incorporated herein by reference).

2023 Annual Report to Shareholders (with the exception of the information incorporated by reference into Items 7, 8 and 9 of this Form 10-K, the 2023 Annual Report to Shareholders is provided solely for the information of the SEC and is not deemed “filed” as part of this Form 10-K).

Letter of KPMG LLP, dated April 24, 2023 (filed as Exhibit 16.1 to the Current Report on Form 8-K filed on April 24, 2023 and incorporated herein by reference).

Incorporated (filed as Exhibit 10.1 to the Quarterly Report on Form 10-Q for the quarter ended March 31, 2024 and incorporated herein by reference).

2024 Annual Report to Shareholders (with the exception of the information incorporated by reference into Items 7, 8 and 9 of this Annual Report on Form 10-K, the 2024 Annual Report to Shareholders is provided solely for the information of the SEC and is not deemed “filed” as part of this Form 10-K).

Insider Trading Policy.

Subsidiaries of the Registrant.

5 unchanged sentences

Certification of Chief Executive Officer, Executive Vice President and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Policy Relating to Recovery of Erroneously Awarded Compensation.

Policy Relating to Recovery of Erroneously Awarded Compensation (filed as Exhibit 97.1 to the Annual Report on Form 10-K for the year ended December 31, 2023 and incorporated herein by reference).

Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

19 unchanged sentences

February 28, 2025

Chief Financial Officer (principal accounting officer and principal financial officer)

/ S / A NA M.

Chief Financial Officer

(principal accounting officer and principal financial officer)

February 28, 2025

7 unchanged sentences

February 28, 2025

/S/ A NA L OPEZ -B LAZQUEZ

Ana Lopez-Blazquez

/ S / Barry S.

Director and Executive Vice President

February 28, 2025

/ S / A NA L OPEZ - BLAZQUEZ

Ana Lopez-Blazquez

February 28, 2025

2 unchanged sentences

February 28, 2025

/S/ S TEVEN R UBIN

February 23, 2024

/ S / V ALERIE F.

February 28, 2025

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures