Risk Sleuth
WSO · 10-K filed 27 Feb 2026 · year to 31 Dec 2025

Watsco

22 named things its latest annual report says its results depend on, each in the company's own words. 17 of them are also named by other companies we've read.

Suppliers

Carrier Global Corporation (Carrier)

depends on · 62% from Carriernamed as a risk
The Company’s top ten suppliers accounted for 85% of our purchases during 2025, including 62% from Carrier and 8% from Rheem.Risk factors (Item 1A)

Also named by JCI, LII, OTIS

Rheem Manufacturing Company (Rheem)

depends on · 8% from Rheemnamed as a risk
Given the significant concentration of our supply chain, particularly with Carrier and Rheem, any significant interruption by any of the key manufacturers or suppliers or a termination of a relationship could temporarily disrupt the operations of certain of our subsidiaries.Risk factors (Item 1A)

Mitsubishi Electric Trane HVAC US LLC (Mitsubishi)

depends on
We maintain trade name and distribution agreements with Carrier, Rheem, and Mitsubishi that provide us with distribution rights on an exclusive basis in specified territories.Risk factors (Item 1A)

Partners and platforms

Carrier Global Corporation (Carrier)

earns from · 53% of our revenues in 2025named as a risk
Combined, our joint ventures with Carrier represented 53% of our revenues in 2025.Business (Item 1)

Also named by JCI, LII, OTIS

Other companies

Russell Sigler, Inc. (RSI)

38.4% ownership interest
Carrier Enterprise I also has a 38.4% ownership interest in Russell Sigler, Inc. (“RSI”), an HVAC distributor operating from 36 locations in the Western U.S.Business (Item 1)

Places

Canada

earns from · 5%named as a risk
The functional currency of our operations in Canada is the Canadian dollar, and the functional currency of our operations in Mexico is the U.S. dollar because the majority of our Mexican transactions are denominated in U.S. dollars.Risk factors (Item 1A)

Also named by AAP, AJG, ALL, AMRC, AOS, ARE, BBY, BF/B and 97 more

Florida

concentrated in · 102
Accordingly, most of our distribution locations and sales are in the Sun Belt, with the highest concentration in Florida and Texas.Business (Item 1)

Also named by ABR, ALLY, AN, AXP, AZO, BBY, BJ, BRO and 54 more

Texas

concentrated in · 89
Accordingly, most of our distribution locations and sales are in the Sun Belt, with the highest concentration in Florida and Texas.Business (Item 1)

Also named by ABR, AFRM, ALLY, AN, ASO, ASTS, ATO, AXP and 70 more

United States

earns from · 90%
The largest market we serve is the United States, in which the most significant markets for HVAC/R products are in the Sun Belt states where HVAC equipment tends to experience above-average usage and therefore a shorter average useful life.Business (Item 1)

Also named by ABBV, ADP, AJG, AMGN, APA, AXGN, AXP, BALL and 139 more

Puerto Rico

operates in · 16
In 2009, we formed a joint venture with Carrier, which we refer to as Carrier Enterprise I, in which Carrier contributed company-owned locations in various Sun Belt states and Puerto Rico, and its export division in Miami, Florida, and we contributed certain locations that distributed Carrier products.Business (Item 1)

Also named by AMGN, BMY, BPOP, CCI, COO, GMED, HPE, LLY and 2 more

Latin America and the Caribbean

earns from · 5%
At December 31, 2025, we operated from 695 locations in 43 U.S. States, Canada, Mexico and Puerto Rico with additional market coverage on an export basis to portions of Latin America and the Caribbean, through which we serve more than 130,000 active contractors that service the replacement and new construction markets.Business (Item 1)

Mexico

depends onnamed as a risk
Many HVAC equipment and component manufacturers, including Carrier and Rheem, source component parts from China and Mexico and/or assemble a significant number of products for residential and light-commercial applications in Mexico.Risk factors (Item 1A)

Also named by AAP, AME, AMRC, ANET, AOS, ARES, AYI, AZO and 83 more

China

depends onnamed as a risk
If any restrictions, including as a result of overall trade relations or a potential increase in tariffs (which the Trump administration has proposed), are imposed related to such products sourced from, or assembled in, Mexico and China, including as a result of amendments to existing trade agreements, and our product costs consequently increase, we would be required to raise our prices, which may result in cost inflation, the loss of customers, and harm to our business.Risk factors (Item 1A)

Also named by A, AA, AAOI, AAP, AAPL, AB, ADI, AEHR and 261 more

Hazards

Weather (summer and winter seasons)

exposed to its pricenamed as a risk
Furthermore, profitability can be impacted favorably or unfavorably based on the severity or mildness of weather patterns during Summer or Winter selling seasons.Risk factors (Item 1A)

Also named by AAP, CLX, CPRT, DASH, DECK, ENB, GVA, LII and 4 more

Commodities and inputs

HFC refrigerants (410A Systems)

subject tonamed as a risk
Our inability to obtain products from one or more of these manufacturers or a decline in market acceptance of these manufacturers’ products, including new HVAC systems that use refrigerants with a lower GWP, could have a material adverse effect on our results of operations, cash flows, and liquidity.Risk factors (Item 1A)

Regulators

U.S. Environmental Protection Agency (EPA)

subject tonamed as a risk
The American Innovation and Manufacturing Act of 2020 granted the U.S. Environmental Protection Agency (the “EPA”) the authority to regulate HFC refrigerants.Business (Item 1)

Also named by AAON, AAP, ALSN, AMRC, APA, APD, APG, AROC and 78 more

U.S. Department of Energy (DOE)

subject to
Our industry and business are also subject to United States Department of Energy (“DOE”) standards related to the minimum required efficiency levels of residential central air conditioning systems and heat pumps.Business (Item 1)

Also named by AAON, AMRC, AOS, BWXT, CDE, CDRE, CEG, CLF and 16 more

Laws and programs

American Innovation and Manufacturing Act of 2020

subject to · 85% phasedownnamed as a risk
Consequently, a required 85% phasedown of HFC production and consumption over a 15-year period commenced on January 1, 2022 (40% of which was completed in 2024).Business (Item 1)

Also named by CARR

One Big Beautiful Bill Act

subject tonamed as a risk
However, the act commonly referred to as the One Big Beautiful Bill, which was signed into law on July 4, 2025, eliminated the IRA’s previously enacted tax credits for HVAC systems, making such credits unavailable after December 31, 2025.Business (Item 1)

Also named by AA, ABR, ADI, ADM, ALB, AMAT, AMGN, AMKR and 121 more

Inflation Reduction Act of 2022

subject tonamed as a risk
However, the act commonly referred to as the One Big Beautiful Bill, which was signed into law on July 4, 2025, eliminated the IRA’s previously enacted tax credits for HVAC systems, making such credits unavailable after December 31, 2025.Business (Item 1)

Also named by ABBV, APD, ARE, BKH, DD, DHR, ELV, ENPH and 30 more

United States-Mexico-Canada Agreement (USMCA)

subject tonamed as a risk
However, if additional restrictions, amendments to existing trade agreements, such as the United States-Mexico-Canada Agreement, or further tariff increases on goods sourced from or assembled in Mexico and China, significantly raise our product costs, then we may need to increase our prices further, which could lead to reduced sales, customer loss, and potential harm to our business.Business (Item 1)

Also named by AYI, BMI, BWA, CLF, CMI, CP, CW, DCH and 29 more

Kigali Amendment to the Montreal Protocol

subject to
These laws and regulations include the Clean Air Act, relating to minimum energy efficiency standards of HVAC systems, and the production, servicing, and disposal of more environmentally friendly refrigerants used in such systems, including those established by the Kigali Amendment to the Montreal Protocol concerning the phase-down of the production of hydrofluorocarbon (“HFC”)-based refrigerants for use in new equipment.Business (Item 1)

Also named by ATR, CARR