At the inception of a contractual arrangement, the Company determines whether the contract contains a lease by assessing whether there is an identified asset and whether the contract conveys the right to control the use of the identified asset in exchange for consideration over a period of time. If both criteria are met, the Company records the associated lease liability and corresponding right-of-use asset upon commencement of the lease using a discount rate based on a credit-adjusted secured borrowing rate commensurate with the term of the lease.

The Company records lease liabilities within current liabilities or long-term liabilities based upon the length of time associated with the lease payments. The Company records its operating lease right-of-use assets as long-term assets. Right-of-use assets for financing leases are recorded within property and equipment, net in the Unaudited Consolidated Balance Sheet. Leases with an initial term of 12 months or less are not recorded on the Unaudited Consolidated Balance Sheet. The Company recognizes lease expense on a straight-line basis over the lease term. In connection with certain operating leases, the Company has security deposits recorded and maintained as restricted cash totaling $1.5 million as of June 30, 2020 and December 31, 2019.

The Company leases office and storage facilities and equipment under various operating and financing lease agreements. The initial terms of these leases range from 1 to 17 years and generally provide for periodic rent increases, and renewal and termination options. The Company’s lease agreements do not contain any material variable lease payments, residual value guarantees or material restrictive covenants.

Certain leases require the Company to pay taxes, insurance, and maintenance. Payments for the transfer of goods or services such as common area maintenance and utilities represent non-lease components. The Company elected the package of practical expedients and therefore does not separate non-lease components from lease components.

In the first quarter of 2020, the lease commenced with respect to the remaining build-out portion of the Company’s corporate headquarters in San Diego, California, which totals approximately $58.8 million in lease payments over a 15-year term.

The table below summarizes the Company’s right-of-use assets and lease liabilities as of June 30, 2020 and December 31, 2019:

(in thousands)	June 30, 2020			December 31, 2019
Assets
Operating	$	105,863		$	66,932
Financing		2,552			1,453
Total leased assets	$	108,415		$	68,385

Liabilities
Current:
Operating	$	7,502		$	5,567
Financing		1,231			672
Long-term:
Operating		114,881			73,153
Financing		1,462			905
Total lease liabilities	$	125,076		$	80,297

Supplemental non-cash information:
Weighted-average remaining lease term (years) - operating leases		13.2			12.4
Weighted-average remaining lease term (years) - finance leases		2.1			2.3
Weighted-average discount rate - operating leases		5.5	%		7.3	%
Weighted-average discount rate - finance leases		5.1	%		5.4	%

The table below summarizes the Company’s lease costs, cash payments, and operating lease liabilities arising from obtaining right-of-use assets under its operating and financing lease obligations were as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands, except years and rates)	2020		2019		2020		2019
Lease expense:
Operating lease expense	$	3,953	$	2,964	$	7,460	$	5,786
Finance lease expense:
Depreciation of right-of-use assets		305		99		563		197
Interest expense on lease liabilities		31		12		59		26
Total lease expense	$	4,289	$	3,075	$	8,082	$	6,009

Consolidated Statements of Cash Flows information:
Operating cash flows used for operating leases	$	3,700	$	3,153	$	6,996	$	6,172
Operating cash flows used for financing leases		31		12		59		26
Financing cash flows used for financing leases		295		93		542		185
Total cash paid for amounts included in the measurement of lease liabilities	$	4,026	$	3,258	$	7,597	$	6,383

Supplemental non-cash information:
Operating lease liabilities arising from obtaining right-of-use assets	$	543	$	2,496	$	39,805	$	77,605

The Company’s future minimum annual lease payments under operating and financing leases at June 30, 2020 are as follows:

	Financing			Operating
(in thousands)	Leases			Leases
Remaining 2020	$	662		$	6,974
2021		1,226			13,798
2022		864			13,332
2023		74			12,991
2024		9			11,995
Thereafter		—			116,884
Total minimum lease payments	$	2,835		$	175,974
Less: amount representing interest		(142	)		(53,591	)
Present value of obligations under leases		2,693			122,383
Less: current portion		(1,231	)		(7,502	)
Long-term lease obligations	$	1,462		$	114,881

The Company has employment contracts with key executives and maintains severance plans that provide for the payment of severance and other benefits if such executives are terminated for reasons other than cause, as defined in those agreements and plans. Certain agreements call for payments that are based on historical compensation, and accordingly, the amount of the contractual commitment will change over time commensurate with the executive’s applicable earnings. At June 30, 2020, future commitments for such key executives were approximately $16.8 million. In certain circumstances, the agreements call for the acceleration of equity vesting. Those figures are not reflected in the above information.