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Stock-based Compensation Plans
 9 Months Ended
Jun. 30, 2020
Share-based Payment Arrangement, Noncash Expense [Abstract]  
Share-based Payment Arrangement [Text Block] Stock-based Compensation Plans
We have granted various forms of stock-based compensation, including stock options, restricted stock units, performance-based restricted stock units (“PRSUs”) and market-based restricted stock units (“MRSUs”) under our Amended and Restated 2006 Mueller Water Products, Inc. Stock Incentive Plan (the “2006 Stock Plan”).
A PRSU award consists of a number of units that may be paid out at the end of a multi-year award cycle consisting of a series of annual performance periods coinciding with our fiscal years. After we establish the financial performance targets related to PRSUs for a given performance period, typically during the first quarter of that fiscal year, we consider that portion of a PRSU award to be granted. Thus, each award consists of a grant in the year of award and grants in the designated following years. Settlements, in our common shares, will range from zero to two times the number of PRSUs granted, depending on our financial performance against the targets.
A MRSU award represents a target number of units that may be paid out at the end of a three-year award cycle based on a calculation of the Company's relative total shareholder return (“TSR”) performance as compared with a selected peer group's TSR. Settlements, in our common shares, will range from zero to two times the number of MRSUs granted, depending on our TSR performance versus the peer group.
The table below provides information regarding MRSU awards, which were valued using Monte Carlo simulations on the dates the units were granted.
December 3, 2019January 28, 2020February 24, 2020
Fair Value at grant date$14.94  $16.76  $18.17  
Units granted147,213  2,763  7,498  
Variables used in determining grant date fair value:
Dividend yield1.87 %1.76 %1.73 %
Risk-free rate1.53 %1.44 %1.23 %
Expected term (in years)2.832.672.60
We awarded 209,966 stock-settled PRSUs and 157,474 MRSUs in the nine months ended June 30, 2020 that are scheduled to settle in three years.
We issued 93,647 shares and 181,065 shares of common stock during the nine months ended June 30, 2020 and 2019, respectively, to settle PRSUs that vested during those periods.
In addition to the PRSU activity, we issued 1,618 and 248,612 shares of common stock for restricted stock units vested during the three and nine months ended June 30, 2020, respectively.
We have granted cash-settled Phantom Plan instruments under the Mueller Water Products, Inc. Phantom Plan (“Phantom Plan”). At June 30, 2020, the outstanding Phantom Plan instruments had a fair value of $9.43 per instrument and our liability for Phantom Plan instruments was $1.6 million.
We granted stock-based compensation awards under the 2006 Stock Plan, the Mueller Water Products, Inc. 2006 Employee Stock Purchase Plan, and the Phantom Plan during the nine months ended June 30, 2020 as follows.
Number grantedWeighted average grant date fair value per instrumentTotal grant date fair value
(in millions)
Quarter ended December 31, 2019
    Restricted stock units162,433  $11.26  $1.8  
    Employee stock purchase plan instruments39,492  1.97  0.1  
    Phantom Plan awards188,973  11.26  2.1  
    PRSUs: 2020 award65,428  11.26  0.7  
    2019 award102,203  11.26  1.2  
    2018 award44,451  11.26  0.5  
    MRSUs147,213  14.94  2.2  
Quarter ended March 31, 2020
    Restricted stock units118,684  12.14  1.4  
    Employee stock purchase plan instruments53,876  2.09  0.1  
    PRSUs: 2020 award13,682  12.09  0.2  
    MRSUs10,261  17.79  0.2  
Quarter ended June 30, 2020:
    Restricted stock units2,118  9.20  —  
    Employee stock purchase plan instruments48,282  3.64  0.2  
$10.7  
Operating income included stock-based compensation expense of $1.8 million and $1.4 million during the three months ended June 30, 2020 and 2019, respectively and $5.0 million and $4.2 million during the nine months ended June 30, 2020 and 2019, respectively. At June 30, 2020, there was approximately $8.9 million of unrecognized compensation expense related to stock-based compensation arrangements and there were 218,966 PRSUs that have been awarded for the 2021 and 2022 performance periods for which performance goals have not been set.
We excluded 474,423 and 202,245 of stock-based compensation instruments from the calculations of diluted earnings per share for the quarters ended June 30, 2020 and 2019, respectively, and 274,009 and 167,775 for the nine months ended June 30, 2020 and 2019, respectively, since their inclusion would have been antidilutive.