Leases

9 Months Ended

Sep. 30, 2020

Leases [Abstract]

Leases

8. Leases:

The Company leases its offices and warehouses, vehicles, and certain office equipment, substantially all of which are classified as operating leases. The Company currently has no material financing leases. The Company determines if an arrangement is a lease at inception. Operating lease assets and obligations are recognized at the lease commencement date based on the present value of lease payments over the lease term.

In determining lease asset value, the Company considers fixed or variable payment terms, prepayments, incentives, and options to extend or terminate, depending on the lease. Renewal, termination or purchase options affect the lease term used for determining lease asset value only if the option is reasonably certain to be exercised. The Company generally uses its incremental borrowing rate based on information available at the lease commencement date for the location in which the lease is held in determining the present value of lease payments.

As of September 30, 2020, the weighted average remaining lease term was 6.0 years and the weighted average discount rate used to determine the operating lease liability was 2.6%. Rental expense related to operating leases was $1.4 million and $4.7 million for the three and nine months ended September 30, 2020, respectively, as compared to $1.7 million and $4.9 million for the corresponding periods of the prior year. Operating lease payments included in operating cash flows totaled $4.3 million and $4.5 million for the nine months ended September 30, 2020 and 2019, respectively. Noncash additions to operating lease assets totaled $1.0 million and $33.9 million for the nine months ended September 30, 2020 and 2019, respectively.