Related Party Disclosures

9 Months Ended

Jun. 30, 2022

Related-Party Transactions

The Company utilizes Emerson's centralized treasury function which manages the working capital and financing needs of its business operations. This function oversees a cash pooling arrangement which sweeps certain Company cash accounts into pooled Emerson cash accounts on a daily basis. Pooled cash and nontrade balances attributable to Emerson have been presented as receivables from related parties or due to related parties in the consolidated and combined financial statements of the Company.

Receivables from related parties and due to related parties reported in the consolidated and combined balance sheets as of June 30, 2022 and September 30, 2021 include the following:


	June 30,		September 30,
	2022		2021
Interest bearing receivables from related parties	$	16,122	$	—


Trade receivables from related parties	819	285
Interest bearing payables to related parties	2,028	—
Trade payables to related parties	2,083	3,019

Before the Closing Date, the Industrial Software Business was charged for costs directly attributable to the Industrial Software Business and was allocated a portion of Emerson’s general corporate costs. All of these costs are reflected in the Industrial Software Business’s consolidated and combined financial statements. Management believes the methodologies and assumptions used to allocate these costs to the Industrial Software Business are reasonable.

Emerson maintains a centralized information technology function for its units. Services provided include application hosting, network support, network security, messaging, and technology related services. Before the Closing Date, charges to the Industrial Software Business for these services were based on Emerson’s costs and the Industrial Software Business’s actual usage. Emerson administers a medical insurance program for its employees in the U.S. that the Industrial Software Business participated in and for which, before the Closing Date, it recorded the cost of claims incurred each period. The Industrial Software Business participated in other Emerson programs including, but not limited to, workers compensation and general and product liability insurance. Before the Closing Date, other Emerson programs were charged to the Industrial Software Business based on cost incurred and usage.

Before the Closing Date, the Industrial Software Business utilized Emerson global shared service centers that host Industrial Software Business-dedicated resources providing customer facing support, research and development, and back office financial services. Costs for Industrial Software Business-dedicated resources were directly charged to the Industrial Software Business, most which related to employee compensation and benefits, with the remaining portion related to the Industrial Software Business’s share of facility overhead, allocated based on headcount or space occupied. In addition, before the Closing Date, general corporate costs incurred by Emerson were allocated to the Industrial Software Business, based on its proportionate share of Emerson’s total consolidated revenue, and included the cost of support functions such as procurement, logistics, marketing, human resources, legal, finance, internal audit and other Emerson corporate functions.

At the Closing Date, Emerson and the Company entered into the transition service agreement (“TSA”) for the provision of certain transitionary services from Emerson to New AspenTech. Pursuant to the TSA, Emerson will provide New AspenTech and its subsidiaries with certain services, including information technology, human resources and other specified services, as well as access to certain of Emerson’s existing facilities. TSA related activities have been recorded as cost of goods sold or operating expenses from related parties and resulting balances have been presented as accounts payable or accrued expenses or prepaid expenses to related parties in the consolidated and combined financial statements presented.

Allocations and charges from Emerson are as follows:


	Nine-Month Period Ended June 30,		Year Ended September 30,
	2022		2021		2020
Corporate costs	$	3,212	$	5,536	$	2,771
Information technology	1,684		1,908		1,132
Insurance and other benefits	446		1,263		1,086
Shared services and other	10,294		9,300		8,614

Corporate costs, human resources, and insurance and other benefits are recorded in general and administrative expenses and information technology, facility charges, and shared services and other is allocated to cost of goods sold and operating expenses based on systemic methods.

Before the Closing Date, the Industrial Software Business engaged in various transactions to sell software and purchase goods in the ordinary course of business with affiliates of Emerson. Revenue from Emerson are as follows:


	Nine-Month Period Ended June 30,		Year Ended September 30,
	2022		2021		2020
Revenue from Emerson affiliates	$	—	$	2	$	1,582
Purchases from Emerson affiliates	2,337		241		—

Emerson Share Maintenance Rights

Immediately following the Closing Date, Emerson beneficially owned 55% of the fully diluted shares of New AspenTech common stock. Under the Transaction Agreement, Emerson has the right to acquire additional equity securities of New AspenTech pursuant to pre-agreed procedures and rights in order to maintain its 55% ownership. No additional shares of common stock, or any other equity securities of New AspenTech, were issued to Emerson subsequent to the Closing Date through June 30, 2022.