Mister Car Wash Quarterly report [Sections 13 or 15(d)]

Quarterly report [Sections 13 or 15(d)]

Leases

Leases

3 Months Ended

Mar. 31, 2025

Leases [Abstract]

Leases

9. Leases

Balance sheet information related to leases consisted of the following for the periods presented:


		As of
	Classification	March 31, 2025		December 31, 2024
Assets
Operating	Operating right of use assets, net	$	918,624	$	924,896
Finance	Property and equipment, net		12,051		12,344
Total lease assets		$	930,675	$	937,240

Liabilities
Current:
Operating	Current maturities of operating lease liability	$	50,127	$	48,986
Finance	Current maturities of finance lease liability		812		804
Long-term:
Operating	Operating lease liability		884,812		890,613
Finance	Financing lease liability		13,011		13,262
Total lease liabilities		$	948,762	$	953,665

Components of total lease cost, net, consisted of the following for the periods presented:


	Three Months Ended March 31,
	2025		2024
Operating lease expense(a)	$	30,704	$	27,212
Finance lease expense:
Amortization of lease assets		244		251
Interest on lease liabilities		250		264
Short-term lease expense		17		51
Variable lease expense(b)		7,894		7,264
Total lease expense	$	39,109	$	35,042

Operating lease expense includes an immaterial amount of sublease income and is included in other store operating expenses and general and administrative expenses in the accompanying consolidated statements of operations.

Variable lease costs consist of property taxes, property insurance, and common area or other maintenance costs for our leases of land and buildings and is included in other store operating expenses in the accompanying consolidated statements of operations.

The following includes supplemental information for the periods presented:


	Three Months Ended March 31,
	2025			2024
Operating cash flows from operating leases	$	29,520		$	26,517
Operating cash flows from finance leases	$	250		$	264
Financing cash flows from finance leases	$	193		$	180

Operating lease ROU assets obtained in exchange for lease liabilities	$	7,260		$	14,710

Weighted-average remaining operating lease term		13.77			13.76
Weighted-average remaining finance lease term		14.65			15.38

Weighted-average operating lease discount rate		8.11	%		8.11	%
Weighted-average finance lease discount rate		7.34	%		7.33	%

As of March 31, 2025, lease obligation maturities were as follows:


Fiscal Year Ending:	Operating Leases			Finance Leases
2025 (remaining nine months)	$	90,073		$	1,327
2026		119,811			1,792
2027		116,176			1,819
2028		109,873			1,846
2029		109,448			1,575
Thereafter		1,057,859			16,850
Total future minimum obligations	$	1,603,240		$	25,209
Present value discount		(668,301	)		(11,386	)
Present value of net future minimum lease obligations	$	934,939		$	13,823
Current portion		(50,127	)		(812	)
Long-term obligations	$	884,812		$	13,011

Forward-Starting Leases

As of March 31, 2025, we entered into 13 leases that had not yet commenced related to build-to-suit arrangements for car wash locations. These leases will commence in years 2025 through 2027 with initial lease terms of 20 years.

As of December 31, 2024, we entered into 10 leases that had not yet commenced related to build-to-suit arrangements for car wash locations. These leases will commence in years 2025 through 2027 with initial lease terms of 15 to 20 years.

Sale-Leaseback Transactions

During the three months ended March 31, 2025, we did not complete any sale-leaseback transactions. During the three months ended March 31, 2024, we completed one sale-leaseback transaction related to one car wash location with aggregate consideration of $4,900, resulting in a net gain of $1,697, which is included in (gain) loss on sale of assets in the accompanying consolidated statements of operations. Contemporaneously with the closing of the sale, we entered into a lease agreement for the property for an initial 20-year term. For the sale-leaseback transaction consummated in the three months ended March 31, 2024, the cumulative initial annual rent for the property was approximately $306, subject to annual escalations. This lease is accounted for as an operating lease.