The Company leases its headquarters, pre-pilot manufacturing facilities, other warehouse space and certain equipment, with current lease terms running through 2032. Fixed rent generally escalates each year, and the Company is responsible for a portion of the landlords’ operating expenses such as property tax, insurance and common area maintenance.

In April 2021, the Company entered into a lease agreement for premises consisting of approximately 197,000 rentable square feet of space located in San Jose, California to be used for QS-0. The lease expires in September 2032. Under this QS-0 lease, the Company has two five-year renewal options, which have not been included in the calculation of the lease liability and right-of use asset at the lease inception as the exercise of the options was not reasonably certain. This initial QS-0 lease is classified as a finance lease.

In June 2021, the Company amended the terms of its 2013 headquarter lease to provide for, among other things, an extension of the lease term to September 2032. Under the amended headquarter lease, the Company retained its one five-year renewal option, which has not been included in the calculation of lease liabilities and right of use assets at the amendment date, as the exercise of the option was not reasonably certain.

In November 2021, the Company entered into lease agreements for additional premises consisting of approximately 222,000 rentable square feet of space in San Jose, California adjacent to the site of QS-0. The November 2021 leases represent an expansion of space for QS-0 and the Company’s engineering and development activities. Such leases will expire in September 2032 but include an option to extend the terms of the lease for an additional 10-year period. The November 2021 leases commenced in November 2021, January 2022, and April 2022 and were classified as operating leases. The additional 10-year extension period has not been included in the calculation of the lease liability and right-of use asset at the lease inception as the exercise of the option was not reasonably certain.

The Company’s leases do not have any contingent rent payments and do not contain residual value guarantees.

The components of lease related expense are as follows (amounts in thousands):


	Three Months Ended		Six Months Ended
Lease cost	June 30, 2022
Finance lease costs:
Amortization of right-of-use assets	$	718	$	1,437
Interest on lease liabilities		607		1,207
Operating lease costs		2,241		4,258
Variable lease costs		726		1,133
Total lease expense	$	4,292	$	8,035

The components of supplemental cash flow information related to leases are as follows (amounts in thousands):


	Six Months Ended June 30,
	2022
Operating outgoing cash flows - finance lease	$	607
Financing outgoing cash flows - finance lease		199
Operating outgoing cash flows - operating leases		1,203
Right-of-use assets obtained in exchange for new operating lease liabilities		28,845

The table below displays additional information for leases as of June 30, 2022:


	As of June 30,
	2022
Finance lease
Weighted-average remaining lease term - finance lease (in years)		10.25
Weighted-average discount rate - finance lease		6.06	%
Operating lease
Weighted-average remaining lease term - operating leases (in years)		10.1
Weighted-average discount rate - operating leases		6.36	%

As of June 30, 2022, future minimum payments during the next five years and thereafter are as follows (amounts in thousands):


Fiscal Year	Operating Leases			Finance Lease
2022 (remaining six months)	$	3,466		$	1,613
2023		7,442			3,751
2024		8,872			5,131
2025		9,085			5,272
2026		9,033			5,417
2027		9,135			5,566
Thereafter		46,370			28,066
Total		93,403			54,816
Less present value discount		(26,073	)		(15,018	)
Lease liabilities	$	67,330		$	39,798

As the Company’s lease agreements do not provide an implicit rate, the Company used an estimated incremental borrowing rate that will be incurred to borrow on a collateralized basis over a similar term at the lease commencement date or modification date in determining the present value of lease payments.

The Company establishes assets and liabilities for the present value of estimated future costs to return certain of our leased facilities to their original condition upon the termination or expiration of a lease. The recognition of an asset retirement obligation requires the Company to make assumptions and judgments including the actions required to satisfy the liability, inflation rates and the credit-adjusted risk-free rate. The initially recognized asset retirement cost is amortized using the same method and useful life as the long-lived asset to which it relates. Accretion expense is recognized over time as the discounted liability is accreted to its expected settlement value.