Leases

6 Months Ended

Mar. 31, 2020

11. LEASES

The lease agreement covering the Company’s primary office space in St. Louis extends through February 2035, with an option to renew for an additional five years. Spire Alabama currently has leased office space in two buildings in Birmingham; one lease expires in 2020 and the other extends through January 2024. The lease agreement covering Spire Marketing and Spire Storage office space in Houston extends through December 2028, with options to terminate three years earlier or to renew for an additional five years. The renewal options in the St. Louis and Houston leases are reasonably certain to be exercised and are included in the lease term used to determine the right-of use assets and lease liabilities. The Company and its subsidiaries have other relatively minor rental arrangements for real estate and equipment with remaining terms of up to eleven years.

Operating lease cost, cash flow and noncash information for the three and six months ended March 31, 2020 are shown in the following tables.

Three Months Ended March 31, 2020	Spire		Spire Missouri		Spire Alabama
Operating lease cost, including amounts capitalized	$	2.4	$	0.1	$	1.1
Cash flow and noncash information about operating leases:
Operating cash flows representing cash paid for amounts included in the measurement of lease liabilities		2.2		0.1		0.9
Right-of-use assets obtained in exchange for lease liabilities		—		—		—

Six Months Ended March 31, 2020	Spire		Spire Missouri		Spire Alabama
Operating lease cost, including amounts capitalized	$	4.8	$	0.3	$	2.1
Cash flow and noncash information about operating leases:
Operating cash flows representing cash paid for amounts included in the measurement of lease liabilities		4.5		0.3		1.9
Right-of-use assets obtained in exchange for lease liabilities		71.1		2.1		10.0

The following table shows balance sheet and weighted-average information about operating leases as of March 31, 2020.

	Balance sheet classification	Spire			Spire Missouri			Spire Alabama
Right-of-use assets	Deferred Charges and Other Assets: Other	$	67.7		$	1.9		$	8.0
Lease liabilities, current	Current Liabilities, Other		6.9			0.3			2.3
Lease liabilities, noncurrent	Deferred Credits and Other Liabilities: Other		60.6			1.5			5.6
Weighted-average remaining lease term		16.1 years			5.8 years			3.7 years
Weighted-average discount rate			4.1	%		2.5	%		2.2	%

Following is a maturity analysis by fiscal year for operating lease liabilities as of March 31, 2020.

	Spire			Spire Missouri			Spire Alabama
Remainder of 2020	$	3.4		$	0.1		$	1.2
2021		7.2			0.4			2.1
2022		7.2			0.4			2.1
2023		7.2			0.3			2.1
2024		5.8			0.3			0.7
2025		5.1			0.3			—
Thereafter		58.4			0.2			—
Total undiscounted lease payments		94.3			2.0			8.2
Less present value discount		(26.8	)		(0.2	)		(0.3	)
Total current and noncurrent lease liabilities	$	67.5		$	1.8		$	7.9

As of September 30, 2019, the annual minimum rental commitments for operating leases (under ASC 840) were as follows.

	2020		2021		2022		2023		2024		Later		Total
Spire	$	8.2	$	7.0	$	6.8	$	6.1	$	4.8	$	36.5	$	69.4
Spire Missouri		0.5		0.2		—		—		—		—		0.7
Spire Alabama		2.9		2.1		2.1		2.1		0.7		—		9.9

There are no significant finance leases, short-term leases, subleases, variable lease payments, residual value guarantees, restrictions or covenants pertaining to leases.

The Company elected, for all asset classes, not to recognize right-of-use assets and lease liabilities for short-term leases. Instead, the lease payments are recognized in profit or loss on a straight-line basis over the lease term and variable lease payments are recognized in the period in which the obligation for those payments is incurred. The Company elected, for all asset classes, not to separate nonlease components from lease components and instead to account for each separate lease component and the nonlease components associated with that lease component as a single lease component.

The discount rate used for all the leases is the applicable incremental borrowing rate, which is the rate of interest that a lessee would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. For a subsidiary lessee, the rate applicable to the subsidiary is used unless the lease terms are influenced by parent credit.