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The RMR Group Inc., or RMR Inc., is a holding company and substantially all of its business is conducted by its majority owned subsidiary The RMR Group LLC, or RMR LLC. RMR Inc. is a Maryland corporation and RMR LLC is a Maryland limited liability company. RMR Inc. serves as the sole managing member of RMR LLC and, in that capacity, operates and controls the business and affairs of RMR LLC. In these financial statements, unless otherwise indicated, “we”, “us” and “our” refer to RMR Inc. and its direct and indirect subsidiaries, including RMR LLC.

As of March 31, 2020, RMR Inc. owned 15,314,479 class A membership units of RMR LLC, or Class A Units, and 1,000,000 class B membership units of RMR LLC, or Class B Units. The aggregate RMR LLC membership units RMR Inc. owns represented 52.1% of the economic interest of RMR LLC as of March 31, 2020. We refer to economic interest as the right of a holder of a Class A Unit or Class B Unit to share in distributions made by RMR LLC and, upon liquidation, dissolution or winding up of RMR LLC, to share in the assets of RMR LLC after payments to creditors. A wholly owned subsidiary of ABP Trust, a Maryland statutory trust, owns 15,000,000 redeemable Class A Units, representing 47.9% of the economic interest of RMR LLC as of March 31, 2020, which is presented as a noncontrolling interest within the condensed consolidated financial statements. Adam D. Portnoy, one of our Managing Directors, is the sole trustee of ABP Trust, and owns all of ABP Trust’s voting securities.

RMR LLC was founded in 1986 to manage public investments in real estate and, as of March 31, 2020, managed a diverse portfolio of publicly owned real estate and real estate related businesses. RMR LLC provides management services to four publicly traded real estate investment trusts, or REITs: Diversified Healthcare Trust, or DHC, which owns medical office and life science properties, senior living communities and wellness centers; Industrial Logistics Properties Trust, or ILPT, which owns and leases industrial and logistics properties; Office Properties Income Trust, or OPI, which owns office properties primarily leased to single tenants and those with high quality credit characteristics, including the government; and Service Properties Trust, or SVC, which owns a diverse portfolio of hotels and net lease service and necessity-based retail properties. Until December 31, 2018, RMR LLC provided management services to Select Income REIT, or SIR. On December 31, 2018, SIR merged with and into a subsidiary of OPI (then named Government Properties Income Trust, or GOV), or the GOV/SIR Merger, which then merged with and into OPI, with OPI as the surviving entity. The combined company continues to be managed by RMR LLC pursuant to OPI’s business and property management agreements with RMR LLC. DHC, ILPT, OPI, SVC and, until December 31, 2018, SIR, are collectively referred to as the Managed Equity REITs.

RMR LLC also provides management services to other publicly traded and private businesses, including: Five Star Senior Living Inc., or Five Star, a publicly traded operator of senior living communities, many of which are owned by DHC; Sonesta International Hotels Corporation, or Sonesta, a privately owned franchisor and operator of hotels, resorts and cruise ships in the United States, Latin America, the Caribbean and the Middle East, many of whose U.S. hotels are owned by SVC; and TravelCenters of America Inc., or TA, an operator and franchisor of travel centers along the U.S. Interstate Highway System, many of which are owned by SVC, standalone truck service facilities and restaurants. Hereinafter, Five Star, Sonesta and TA are collectively referred to as the Managed Operators. In addition, RMR LLC also provides management services to certain related private companies, including Affiliates Insurance Company, or AIC, an Indiana insurance company, until its dissolution on February 13, 2020, ABP Trust and its subsidiaries, or collectively ABP Trust, and RMR Office Property Fund LP, or the Open End Fund.

RMR Advisors LLC, or RMR Advisors, is an investment adviser registered with the Securities and Exchange Commission, or SEC. RMR Advisors is a wholly-owned subsidiary of RMR LLC and is the adviser to RMR Real Estate Income Fund, or RIF. RIF is currently a closed end investment company focused on investing in real estate securities, including REITs and other dividend paying securities, but excluding our Client Companies, as defined below. On April 16, 2020, RIF’s shareholders approved its plan to convert from a registered investment company to a commercial mortgage REIT and RIF is in the preliminary stages of implementing a plan to execute this conversion.

Tremont Realty Advisors LLC, or Tremont Advisors, an investment adviser registered with the SEC, was formed in connection with the acquisition of certain assets of Tremont Realty Capital LLC, or the Tremont business. Tremont Advisors is a wholly owned subsidiary of RMR LLC that manages Tremont Mortgage Trust, or TRMT, a publicly traded mortgage real estate investment trust, and, as of December 18, 2019, Centre Street Finance LLC, or Centre Street, a private fund. Both TRMT and Centre Street focus primarily on originating and investing in first mortgage whole loans secured by middle market and transitional commercial real estate. Centre Street is a direct wholly owned subsidiary of ABP Trust. TRMT, together with

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Centre Street, are referred to as the Tremont Advisory Clients. The Tremont business also acts as a transaction originator for non-investment advisory clients for negotiated fees.

In these financial statements, we refer to the Managed Equity REITs, the Managed Operators, RIF, TRMT, AIC, ABP Trust, the Open End Fund, Centre Street and the clients of the Tremont business as our Client Companies. We refer to the Managed Equity REITs and TRMT collectively as the Managed REITs.

The accompanying condensed consolidated financial statements of RMR Inc. are unaudited. Certain information and disclosures required by U.S. Generally Accepted Accounting Principles, or GAAP, for complete financial statements have been condensed or omitted. We believe the disclosures made are adequate to make the information presented not misleading. However, the accompanying condensed consolidated financial statements should be read in conjunction with the financial statements and notes contained in our Annual Report on Form 10-K for the fiscal year ended September 30, 2019, or our 2019 Annual Report. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair statement of results for the interim period have been included. All intercompany transactions and balances with or among our consolidated subsidiaries have been eliminated. Our operating results for interim periods are not necessarily indicative of the results that may be expected for the full year. Reclassifications have been made to the prior year’s condensed consolidated financial statements to conform to the current year’s presentation.

Preparation of these financial statements in conformity with GAAP requires our management to make certain estimates and assumptions that may affect the amounts reported in these financial statements and related notes. The actual results could differ from these estimates.

Recently Adopted Accounting Pronouncements

In February 2016, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, No. 2016-02, Leases, as amended, or ASU No. 2016-02, which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e., lessees and lessors). ASU No. 2016-02 requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase of the leased asset by the lessee. This classification determines whether the lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease. A lessee is also required to record a right of use asset and a lease liability for all leases with a term of greater than twelve months regardless of their classification.

On October 1, 2019, we adopted ASU No. 2016-02 along with certain allowable practical expedients using the modified retrospective transition approach. We elected to apply the guidance to each lease that had commenced as of the adoption date. We also elected a package of practical expedients that allowed us not to reassess (i) whether any expired or existing contracts are or contain leases, (ii) the lease classification for any expired or existing leases and (iii) the recognition requirements for initial direct costs for any expired or existing leases. Additionally, we elected to account for the lease and non-lease components as a single lease component.

The adoption of ASU No. 2016-02 did not affect our condensed consolidated statements of income and cash flows. See Note 10, Leases, for further information regarding the adoption of ASU No. 2016-02.

Recent Accounting Pronouncements Not Yet Adopted

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, or ASU No. 2016-13, which requires that entities use a new forward-looking “expected loss” model that generally will result in the earlier recognition of allowance for credit losses. The measurement of expected credit losses is based upon historical experience, current conditions and reasonable and supportable forecasts that affect the collectability of the reported amount. ASU No. 2016-13 will become effective for fiscal years beginning after December 15, 2019. The effective date for us is the first day of fiscal year 2021 (October 1, 2020). We are continuing to assess this guidance, but we have not historically experienced credit losses from our Client Companies and do not expect the adoption of ASU No. 2016-13 to have a material impact on our condensed consolidated financial statements.

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Base Business Management Fees—Managed Equity REITs

We earn annual base business management fees from the Managed Equity REITs by providing continuous services pursuant to business management agreements equal to the lesser of:

•	the sum of (a) 0.5% of the historical cost of transferred real estate assets, if any, as defined in the applicable business management agreement, plus (b) 0.7% of the average invested capital (exclusive of the transferred real estate assets), as defined in the applicable business management agreement, up to $250,000, plus (c) 0.5% of the average invested capital exceeding $250,000; and

•	the sum of (a) 0.7% of the average market capitalization, as defined in the applicable business management agreement, up to $250,000, plus (b) 0.5% of the average market capitalization exceeding $250,000.

The foregoing base business management fees are paid monthly in arrears. For purposes of these fees, a Managed Equity REIT’s assets under management do not include shares it owns of another Client Company.

For the three months ended March 31, 2020 and 2019, we earned aggregate base business management fees from the Managed Equity REITs of $24,527 and $25,536, respectively. For the six months ended March 31, 2020 and 2019, we earned aggregate base business management fees from the Managed Equity REITs of $51,918 and $53,807, respectively.

Incentive Business Management Fees—Managed Equity REITs

We also may earn annual incentive business management fees from the Managed Equity REITs under the business management agreements. The incentive business management fees, which are payable in cash, are contingent performance based fees recognized only when earned at the end of each respective measurement period. Incentive business management fees are excluded from the transaction price until it becomes probable that there will not be a significant reversal of cumulative revenue recognized.

The incentive fees are calculated for each Managed Equity REIT as 12.0% of the product of (a) the equity market capitalization of the Managed Equity REIT, as defined in the applicable business management agreement, on the last trading day of the year immediately prior to the relevant measurement period and (b) the amount, expressed as a percentage, by which the Managed Equity REIT’s total return per share, as defined in the applicable business management agreement, exceeded the applicable benchmark total return per share, as defined in the applicable business management agreement, of a specified REIT index identified in the applicable business management agreement for the measurement period, as adjusted for net share issuances during the period and subject to caps on the values of the incentive fees. The measurement period for the annual incentive business management fees is defined as the three year period ending on December 31 of the year for which such fee is being calculated, except for ILPT, whose annual incentive business management fee is based on a shorter period from its initial public offering on January 12, 2018 through the applicable calendar year end. On December 31, 2018, RMR LLC’s business management agreements with ILPT and OPI were amended to provide that, for periods beginning on and after January 1, 2019, the SNL U.S. Industrial REIT Index and the SNL U.S. Office REIT Index will be used by ILPT and OPI, respectively, rather than the SNL U.S. REIT Equity Index, to calculate the benchmark return per share, as defined, for purposes of determining the incentive management fee, if any, payable thereunder.

For the six months ended March 31, 2020 and 2019, we recognized aggregate incentive business management fees earned from the Managed Equity REITs of zero and $120,094, respectively.

Management Agreements—Managed Operators, ABP Trust, AIC and the Open End Fund

We earn management fees by providing continuous services pursuant to the management agreements from the Managed Operators and until December 31, 2019, ABP Trust, equal to 0.6% of: (i) in the case of Five Star, Five Star’s revenues from all sources reportable under GAAP, less any revenues reportable by Five Star with respect to properties for which it provides management services, plus the gross revenues at those properties determined in accordance with GAAP; (ii) in the case of Sonesta, Sonesta’s revenues from all sources reportable under GAAP, less any revenues reportable by Sonesta with respect to hotels for which it provides management services, plus the gross revenues at those hotels determined in accordance with GAAP; (iii) in the case of TA, the sum of TA’s gross fuel margin, as defined in the applicable agreement, plus TA’s total nonfuel revenues; and (iv) in the case of ABP Trust, revenues from all sources reportable under GAAP. Effective January 1, 2020,

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management fees earned from ABP Trust are equal to 0.5% of ABP Trust’s average invested capital, as defined in the management agreement. These fees are estimated and payable monthly in advance.

Until June 30, 2019, we earned fees from AIC pursuant to a management agreement equal to 3.0% of its total premiums paid under active insurance underwritten or arranged by AIC. AIC’s property insurance program expired on June 30, 2019 and was not continued. As a result, we have not earned any management fees from AIC since that date through AIC’s dissolution on February 13, 2020.

We earn fees from the Open End Fund by providing a continuing and suitable real estate investment program consistent with the Open End Fund’s real estate investment policies and objectives pursuant to an administration services agreement. We earn fees equal to 1.0% of the Open End Fund’s net asset value, as defined, annually. These fees are payable quarterly in arrears.

We earned aggregate fees from the Managed Operators, ABP Trust, AIC and the Open End Fund of $6,984 and $6,752 for the three months ended March 31, 2020 and 2019, respectively, and $13,663 and $14,147 for the six months ended March 31, 2020 and 2019, respectively.

Property Management Fees

We earn property management fees by providing continuous services pursuant to property management agreements with certain Client Companies. We generally earn fees under these agreements equal to 3.0% of gross collected rents. Also, under the terms of the property management agreements, we receive additional fees for construction supervision in connection with certain construction activities undertaken at the managed properties equal to 5.0% of the cost of such construction. We earned aggregate property management fees of $11,708 and $10,207 for the three months ended March 31, 2020 and 2019, respectively, and $24,233 and $21,977 for the six months ended March 31, 2020 and 2019, respectively.

Advisory Services and Other Agreements

RMR Advisors is compensated pursuant to its agreement with RIF at an annual rate of 0.85% of RIF’s average daily managed assets. Average daily managed assets includes the net asset value attributable to RIF’s outstanding common shares, plus the liquidation preference of RIF’s outstanding preferred shares, plus the principal amount of any borrowings, including from banks or evidenced by notes, commercial paper or other similar instruments issued by RIF. RMR Advisors earned advisory services revenue of $743 and $725 for the three months ended March 31, 2020 and 2019, respectively, and $1,554 and $1,458 for the six months ended March 31, 2020 and 2019, respectively.

Tremont Advisors is primarily compensated pursuant to its management agreements with TRMT and Centre Street at an annual rate of 1.5% of TRMT’s and Centre Street’s equity, respectively, as defined in the applicable agreements. Tremont Advisors may also earn an incentive fee under these management agreements for TRMT and (beginning the first full calendar quarter of 2021) Centre Street. Tremont Advisors has waived any business management and incentive fees otherwise due and payable by TRMT pursuant to the management agreement for the period beginning July 1, 2018 until June 30, 2020.

Tremont Advisors earned advisory services revenue from the Tremont Advisory Clients of $37 and $36 for the three months ended March 31, 2020 and 2019, respectively, and $73 and $85 for the six months ended March 31, 2020 and 2019, respectively, in each case net of the fee waiver referenced above, as applicable.

The Tremont business earns between 0.5% and 1.0% of the aggregate principal amounts of any loans it originates. The Tremont business earned fees for such origination services of $102 and $105 for the three months ended March 31, 2020 and 2019, respectively, and $782 and $157 for the six months ended March 31, 2020 and 2019, respectively, which amounts are included in management services revenue in our condensed consolidated statements of income.

Reimbursable Compensation and Benefits

Reimbursable compensation and benefits include reimbursements, at cost, that arise primarily from services we provide pursuant to our property management agreements, a significant portion of which are charged or passed through to and were paid by tenants of our Client Companies. We recognize the revenue for reimbursements when we incur the related reimbursable compensation and benefits and other costs on behalf of our Client Companies. We realized reimbursable compensation and benefits of $12,533 and $13,412 for the three months ended March 31, 2020 and 2019, respectively, and $26,328 and $27,285 for the six months ended March 31, 2020 and 2019, respectively. Included in reimbursable compensation

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and benefits are shared services fees we earn from the Tremont Advisory Clients for compensation and other costs related to the operation of the Tremont business. We earned shared services fees from the Tremont Advisory Clients of $368 and $370 for the three months ended March 31, 2020 and 2019, respectively, and $714 and $706 for the six months ended March 31, 2020 and 2019, respectively.

Reimbursable compensation and benefits include grants of common shares from Client Companies directly to certain of our officers and employees in connection with the provision of management services to those companies. The revenue in respect of each grant is based on the fair value as of the grant date for those shares that have vested, with subsequent changes in the fair value of the unvested grants being recognized in our condensed consolidated statements of income over the requisite service periods. We record an equal offsetting amount as equity based compensation expense for the value of the grants of common shares from our Client Companies to certain of our officers and employees. We realized equity based compensation expense (income) and related reimbursements of $(290) and $756 for the three months ended March 31, 2020 and 2019, respectively, and $658 and $2,072 for the six months ended March 31, 2020 and 2019, respectively. During the three months ended March 31, 2020, prior period equity based compensation for unvested shares was reversed as a result of Client Company share price declines from December 31, 2019 to March 31, 2020.

Other Client Company Reimbursable Expenses

Other client company reimbursable expenses include reimbursements that arise from services we provide pursuant to our property management agreements, a significant portion of which are charged or passed through to and were paid by tenants of our Client Companies. We have determined that we control the services provided by third parties for our Client Companies and therefore we account for the cost of these services and the related reimbursement revenue on a gross basis.

We realized other client company reimbursable expenses reflecting corresponding amounts in revenue and expense of $84,227 and $73,323 for the three months ended March 31, 2020 and 2019, respectively, and $182,202 and $171,399 for the six months ended March 31, 2020 and 2019, respectively.

Equity Method Investments

As of March 31, 2020, Tremont Advisors owned 1,600,100, or approximately 19.4%, of TRMT’s outstanding common shares. We account for our investment in TRMT using the equity method of accounting because we are deemed to exert significant influence, but not control, over TRMT’s most significant activities. Our share of earnings from our investment in TRMT included in equity in earnings of investees in our condensed consolidated statements of income was $324 and $109 for the three months ended March 31, 2020 and 2019, respectively, and $579 and $144 for the six months ended March 31, 2020 and 2019, respectively.

Equity Method Investment Accounted for Under the Fair Value Option

As of March 31, 2020, we own 298,538, or approximately 3.6%, of TA’s outstanding common shares. We purchased these shares on October 10, 2018 for $8,382. We account for our investment in TA using the equity method of accounting because we are deemed to exert significant influence, but not control, over TA’s most significant activities. We elected the fair value option to account for our equity method investment in TA and determine fair value using the closing price of TA’s common shares, which is a Level 1 fair value input. The market value of our investment in TA as of March 31, 2020 and September 30, 2019, based on quoted market prices, was $2,920 and $3,682, respectively. The unrealized (loss) gain in our condensed consolidated statements of income related to our investment in TA was $(2,200) and $522 for the three months ended March 31, 2020 and 2019, respectively, and $(762) and $(2,247) for the six months ended March 31, 2020 and 2019, respectively.

We are the sole managing member of RMR LLC. We are a corporation subject to U.S. federal and state income tax with respect to our allocable share of any taxable income of RMR LLC and its tax consolidated subsidiaries. RMR LLC is treated as a partnership for U.S. federal and most applicable state and local income tax purposes. As a partnership, RMR LLC is generally not subject to U.S. federal and most state income taxes. Any taxable income or loss generated by RMR LLC is passed through to and included in the taxable income or loss of its members, including RMR Inc. and ABP Trust, based on each member’s respective ownership percentage.

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For the three months ended March 31, 2020 and 2019, we recognized estimated income tax expense of $2,612 and $3,139, respectively, which includes $1,901 and $2,290, respectively, of U.S. federal income tax and $711 and $849, respectively, of state income taxes. For the six months ended March 31, 2020 and 2019, we recognized estimated income tax expense of $6,336 and $22,109, respectively, which includes $4,678 and $16,132, respectively, of U.S. federal income tax and $1,658 and $5,977, respectively, of state income taxes.

A reconciliation of the statutory income tax rate to the effective tax rate is as follows:

		Three Months Ended March 31,						Six Months Ended March 31,
		2020			2019			2020			2019
Income taxes computed at the federal statutory rate		21.0	%		21.0	%		21.0	%		21.0	%
State taxes, net of federal benefit		3.9	%		3.7	%		3.7	%		2.9	%
Permanent items		0.1	%		(0.2	)%		0.2	%		0.1	%
Net income attributable to noncontrolling interest		(10.1	)%		(10.1	)%		(10.1	)%		(10.1	)%
Total		14.9	%		14.4	%		14.8	%		13.9	%

In December 2019, the Internal Revenue Service and Department of the Treasury released regulations expanding the applicability of limits on executive compensation deductions to more taxpayers, including executive compensation allocated to publicly held corporations by a partnership. The expanded application of these regulations results in increases to our effective income tax rate.

ASC 740, Income Taxes, provides a model for how a company should recognize, measure and present in its financial statements uncertain tax positions that have been taken or are expected to be taken with respect to all open years and in all significant jurisdictions. Pursuant to this topic, we recognize a tax benefit only if it is “more likely than not” that a particular tax position will be sustained upon examination or audit. To the extent the “more likely than not” standard has been satisfied, the benefit associated with a tax position is measured as the largest amount that is greater than 50.0% likely to be realized upon settlement. As of March 31, 2020, we had no uncertain tax positions.

As of March 31, 2020 and September 30, 2019, the fair values of our financial instruments, which include cash and cash equivalents, amounts due from related parties and accounts payable and accrued expenses, were not materially different from their carrying values due to the short term nature of these financial instruments.

Recurring Fair Value Measures

On a recurring basis, we measure certain financial assets and financial liabilities at fair value based upon quoted market prices. ASC 820, Fair Value Measurements, establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets and liabilities (Level 1), and the lowest priority to unobservable inputs (Level 3). A financial asset’s or financial liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs.

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Level 1 Estimates

The following are our assets and liabilities that all have been measured at fair value using Level 1 inputs in the fair value hierarchy as of March 31, 2020 and September 30, 2019:

		March 31,				September 30,
		2020				2019
Money market funds included in cash and cash equivalents		$	298,240			$	357,526
Current portion of due from related parties related to share based payment awards		1,665				4,814
Long term portion of due from related parties related to share based payment awards		4,978				9,238
Current portion of employer compensation liability related to share based payment awards included in accounts payable and accrued expenses		1,665				4,814
Long term portion of employer compensation liability related to share based payment awards		4,978				9,238

Adam D. Portnoy, one of our Managing Directors, is the sole trustee of our controlling shareholder, ABP Trust, and owns all of ABP Trust’s voting securities and a majority of the economic interests of ABP Trust. As of March 31, 2020, Adam D. Portnoy beneficially owned, in aggregate, (i) 147,502 shares of Class A common stock of RMR Inc., or Class A Common Shares; (ii) all the outstanding shares of Class B-1 common stock of RMR Inc., or Class B-1 Common Shares; (iii) all the outstanding shares of Class B-2 common stock of RMR Inc., or Class B-2 Common Shares; and (iv) 15,000,000 Class A Units of RMR LLC. Adam D. Portnoy and Jennifer B. Clark, our other Managing Director, are also officers of ABP Trust and RMR Inc. and officers and employees of RMR LLC. Matthew P. Jordan, our Executive Vice President, Chief Financial Officer and Treasurer is also an officer of ABP Trust and an officer and employee of RMR LLC.

Adam D. Portnoy is also the chair of the board of trustees of each of the Managed Equity REITs, the chair of the board of directors of each of Five Star and TA, a managing trustee or managing director of each of the Managed REITs, Five Star, RIF and TA, a director of Sonesta (and its parent) and is a controlling shareholder of Sonesta. Jennifer B. Clark, our other Managing Director, is a managing trustee of DHC and RIF, a managing director of FVE and a director of Sonesta. Prior to its dissolution on February 13, 2020, Mr. Portnoy was a director of AIC and Ms. Clark was the president and chief executive officer of AIC. As of March 31, 2020, Adam D. Portnoy beneficially owned, in aggregate, 6.3% of Five Star’s outstanding common shares, 1.1% of SVC’s outstanding common shares, 1.2% of ILPT’s outstanding common shares, 1.5% of OPI’s outstanding common shares, 1.1% of DHC’s outstanding common shares, 4.0% of TA’s outstanding common shares (including through RMR LLC), 2.3% of RIF’s outstanding common shares, and 19.5% of TRMT’s outstanding common shares (including through Tremont Advisors).

The Managed Equity REITs have no employees. RMR LLC provides or arranges for all the personnel, overhead and services required for the operation of the Managed Equity REITs and AIC (until its dissolution on February 13, 2020), pursuant to management agreements with them. All the officers of the Managed Equity REITs and the Open End Fund are officers or employees of RMR LLC. TRMT has no employees. All the officers, overhead and required office space of TRMT are provided or arranged by Tremont Advisors. All of TRMT’s officers are officers or employees of Tremont Advisors or RMR LLC. Many of the executive officers of the Managed Operators are officers or employees of RMR LLC. RIF has no employees. All officers, overhead and required office space of RIF are provided or arranged by RMR Advisors. All of RIF’s officers are officers or employees of RMR Advisors or RMR LLC. Some of our executive officers are also managing directors or managing trustees of certain of the Managed REITs, the Managed Operators and RIF.

As of March 31, 2020, ABP Trust owned 100% of Centre Street and 206,300 limited partnership units, or 100%, of the Open End Fund and RMR LLC owned no limited partnership units of, but has committed to contributing $100,000 to, the Open End Fund. The general partner of the Open End Fund is a subsidiary of ABP Trust and is not entitled to any compensation for services rendered to the Open End Fund in its capacity as general partner. Until its dissolution on February 13, 2020, ABP Trust owned 14.3% of AIC.

Additional information about our related person transactions appears in Note 8, Shareholders’ Equity, below and in our 2019 Annual Report.

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Revenues from Related Parties

For the three and six months ended March 31, 2020 and 2019, we recognized revenues from related parties as set forth in the following table:

		Three Months Ended March 31,														Six Months Ended March 31,
		2020							2019							2020							2019
		$				%			$				%			$				%			$				%
Managed Equity REITs:
DHC (1)		$	41,047			29.1	%		$	36,851			28.3	%		$	84,604			28.1	%		$	122,830			29.9	%
ILPT		10,274				7.3			6,874				5.3			26,615				8.8			15,334				3.7
OPI (2)		56,569				40.2			58,114				44.7			121,452				40.4			114,357				27.9
SIR (1) (2)		—				—			—				—			—				—			47,843				11.7
SVC (1)		17,061				12.1			11,449				8.8			36,185				12.0			77,844				19.0
		124,951				88.7			113,288				87.1			268,856				89.3			378,208				92.2
Managed Operators:
Five Star		2,450				1.7			2,439				1.9			4,726				1.6			4,852				1.2
Sonesta		643				0.5			782				0.6			1,268				0.4			1,539				0.4
TA		3,446				2.4			3,228				2.5			6,891				2.3			7,081				1.7
		6,539				4.6			6,449				5.0			12,885				4.3			13,472				3.3
Other Client Companies:
ABP Trust		2,854				2.1			3,935				3.0			6,171				2.2			7,270				1.8
AIC		5				—			60				—			96				—			120				—
Open End Fund		4,919				3.5			4,633				3.6			8,915				3.0			8,110				2.0
RIF		743				0.5			725				0.5			1,554				0.5			1,458				0.3
TRMT		658				0.5			879				0.7			1,355				0.5			1,574				0.4
Centre Street		90				0.1			—				—			90				—			—				—
		9,269				6.7			10,232				7.8			18,181				6.2			18,532				4.5
Total revenues from related parties		140,759				100.0			129,969				99.9			299,922				99.8			410,212				100.0
Revenues from unrelated parties		102				—			127				0.1			831				0.2			197				—
		$	140,861			100.0	%		$	130,096			100.0	%		$	300,753			100.0	%		$	410,409			100.0	%

(1)	The amounts for the six months ended March 31, 2019 include incentive business management fees of $40,642, $25,817 and $53,635, which RMR LLC earned for the 2018 calendar year from DHC, SIR and SVC, respectively, and which were paid in January 2019.

(2)	OPI acquired SIR by merger on December 31, 2018. This table presents revenues for the six months ended March 31, 2019 from SIR separately as they relate to a period prior to this merger.

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Amounts Due From Related Parties

The following table represents amounts due from related parties as of the dates indicated:

		March 31,				September 30,
		2020				2019
Managed Equity REITs:
DHC		$	19,428			$	25,505
ILPT		6,508				10,630
OPI		33,900				39,233
SVC		13,070				18,933
		72,906				94,301
Managed Operators:
Five Star		203				136
Sonesta		—				37
TA		348				392
		551				565
Other Client Companies:
ABP Trust		1,714				2,580
AIC		7				7
Open End Fund		2,807				4,567
RIF		79				75
TRMT		1,019				664
Centre Street		45				—
		5,671				7,893
		$	79,128			$	102,759

Leases

As of March 31, 2020, RMR LLC leased from ABP Trust and certain Managed Equity REITs office space for use as our headquarters and local offices. We incurred rental expense under related party leases of $1,430 and $1,571 for the three months ended March 31, 2020 and 2019, respectively, and $2,863 and $2,858 for the six months ended March 31, 2020 and 2019, respectively.

Tax-Related Payments

Pursuant to our tax receivable agreement with ABP Trust, RMR Inc. pays to ABP Trust 85.0% of the amount of cash savings, if any, in U.S. federal, state and local income tax or franchise tax that RMR Inc. realizes as a result of (a) the increases in tax basis attributable to our dealings with ABP Trust and (b) tax benefits related to imputed interest deemed to be paid by us as a result of the tax receivable agreement. As of March 31, 2020, our condensed consolidated balance sheet reflects a liability related to the tax receivable agreement of $32,061, including $2,111 classified as a current liability that we expect to pay to ABP Trust during the fourth quarter of fiscal year 2020.

Under the RMR LLC operating agreement, RMR LLC is also required to make certain pro rata distributions to each member of RMR LLC quarterly on the basis of the estimated tax liabilities of its members, subject to future adjustment based on actual results. For the six months ended March 31, 2020 and 2019, pursuant to the RMR LLC operating agreement, RMR LLC made required quarterly tax distributions to holders of its membership units totaling $16,792 and $40,909, respectively, of which $8,806 and $21,256, respectively, was distributed to us and $7,986 and $19,653, respectively, was distributed to ABP Trust, based on each membership unit holder’s respective ownership percentage. The amounts distributed to us were eliminated in our condensed consolidated financial statements, and the amounts distributed to ABP Trust were recorded as a reduction of

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its noncontrolling interest. We used funds from these distributions to pay certain of our U.S. federal and state income tax liabilities and to pay part of our obligations under the tax receivable agreement.

Separation Arrangements

We entered into retirement agreements with each of Mark L. Kleifges, Bruce J. Mackey Jr. and John C. Popeo, each a former Executive Vice President of RMR LLC, between October 25, 2018 and December 11, 2018 in connection with their retirements. Pursuant to these agreements, we made various cash payments and accelerated the vesting of unvested shares RMR Inc. previously awarded to these retiring officers. We also enter into separation arrangements from time to time with other nonexecutive officers and employees of ours. There remains no further substantive performance obligations with respect to any such arrangements, and we in turn recognized all applicable provisions in our condensed consolidated statements of income as separation costs.

In December 2019, we entered into a retirement agreement with TA and a former executive officer of RMR LLC, Andrew J. Rebholz. Mr. Rebholz was also a managing director and chief executive officer of TA. Pursuant to his retirement agreement, Mr. Rebholz will continue to serve as an employee of RMR LLC through June 30, 2020. Under Mr. Rebholz’s retirement agreement, RMR LLC is continuing to pay Mr. Rebholz an annual base salary of $75 until June 30, 2020 and RMR LLC paid him a cash bonus in respect of 2019 of $250 in December 2019. RMR LLC also agreed to pay Mr. Rebholz an additional cash payment of $250 in 2020, subject to certain conditions. In addition, in January 2020, we accelerated the vesting of all 7,300 unvested shares of RMR Inc. owned by Mr. Rebholz as of his retirement date, June 30, 2020. We recorded approximately $281 of equity based separation costs related to the acceleration of these shares for the three months ended March 31, 2020.

For the three and six months ended March 31, 2020 and 2019, we recognized cash and equity based separation costs as set forth in the following table:

		Three Months Ended March 31,								Six Months Ended March 31,
		2020				2019				2020				2019
Former executive officers:
Cash separation costs		$	—			$	—			$	260			$	5,312
Equity based separation costs		281				414				281				1,488
		281				414				541				6,800
Former nonexecutive officers:
Cash separation costs		80				—				80				11
Equity based separation costs		24				—				24				—
		104				—				104				11
Total separation costs		$	385			$	414			$	645			$	6,811

Issuances and Repurchases

We grant our Class A Common Shares to our Directors, officers and employees under the 2016 Omnibus Equity Plan adopted in 2016, or the 2016 Plan. Shares issued to Directors vest immediately. Shares issued to employees vest in five equal, consecutive, annual installments, with the first installment vesting on the date of grant. We recognize share forfeitures as they occur. Compensation expense related to share grants is determined based on the market value of our shares on the date of grant, with the aggregate value of the granted shares amortized to expense over the related vesting period. Expense recognized for shares granted to Directors are included in general and administrative expenses and for shares granted to employees are included in equity based compensation in our condensed consolidated statements of income.

On March 11, 2020, we granted 3,000 of our Class A Common Shares, valued at $31.28 per share, the closing price of our Class A Common Shares on The Nasdaq Stock Market LLC, or Nasdaq, on that day, to each of our Managing Directors and Independent Directors as part of his or her annual compensation for serving as a Director. For the three months ended March 31, 2020, we recorded general and administrative expense of $469 for these grants.

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Equity based compensation expense related to shares granted to certain officers and employees was $592 and $448 for the three months ended March 31, 2020 and 2019, respectively, and $1,226 and $943 for the six months ended March 31, 2020 and 2019, respectively. As of March 31, 2020, we had 116,510 unvested shares outstanding which are scheduled to vest as follows: 42,310 shares in 2020, 34,040 shares in 2021, 25,080 shares in 2022 and 15,080 in 2023.

In connection with the vesting and issuance of awards of our Class A Common Shares to our Directors, officers and employees, we provide for the ability to repurchase our Class A Common Shares to satisfy tax withholding and payment obligations. The repurchase price is based on the closing price of our Class A Common Shares on the Nasdaq on the repurchase date. During the six months ended March 31, 2020, we withheld and repurchased 2,421 of our Class A Common Shares for an aggregate value of $95, which is reflected as a decrease to shareholders’ equity in our condensed consolidated balance sheets.

In connection with the issuances and repurchases of our Class A Common Shares, and as required by the RMR LLC operating agreement, RMR LLC concurrently issues or acquires an identical number of Class A Units from RMR Inc.

Distributions

During the six months ended March 31, 2020 and 2019, we declared and paid dividends on our Class A Common Shares and Class B-1 Common Shares as follows:

Declaration		Record		Paid		Distributions				Total
Date		Date		Date		Per Common Share				Distributions
Six Months Ended March 31, 2020
10/17/2019		10/28/2019		11/14/2019		$	0.38			$	6,195
1/16/2020		1/27/2020		2/20/2020		0.38				6,194
						$	0.76			$	12,389
Six Months Ended March 31, 2019
10/18/2018		10/29/2018		11/15/2018		$	0.35			$	5,680
1/18/2019		1/28/2019		2/21/2019		0.35				5,680
						$	0.70			$	11,360

These dividends were funded in part by distributions from RMR LLC to holders of its membership units as follows:

						Distributions Per				Total				RMR LLC				RMR LLC
Declaration		Record		Paid		RMR LLC				RMR LLC				Distributions				Distributions
Date		Date		Date		Membership Unit				Distributions				to RMR Inc.				to ABP Trust
Six Months Ended March 31, 2020
10/17/2019		10/28/2019		11/14/2019		$	0.30			$	9,391			$	4,891			$	4,500
1/16/2020		1/27/2020		2/20/2020		0.30				9,390				4,890				4,500
						$	0.60			$	18,781			$	9,781			$	9,000
Six Months Ended March 31, 2019
10/18/2018		10/29/2018		11/15/2018		$	0.30			$	9,369			$	4,869			$	4,500
1/18/2019		1/28/2019		2/21/2019		0.30				9,369				4,869				4,500
						$	0.60			$	18,738			$	9,738			$	9,000

The remainder of the above noted dividends that were paid were funded with cash accumulated at RMR Inc.

On April 16, 2020, we declared a quarterly dividend on our Class A Common Shares and Class B-1 Common Shares to our shareholders of record as of April 27, 2020, in the amount of $0.38 per Class A Common Share and Class B-1 Common Share, or $6,200. This dividend will be partially funded by a distribution from RMR LLC to holders of its membership units in the amount of $0.30 per unit, or $9,394, of which $4,894 will be distributed to us based on our aggregate ownership of 16,314,479 membership units of RMR LLC and $4,500 will be distributed to ABP Trust based on its ownership of 15,000,000 membership units of RMR LLC. The remainder of this dividend will be funded with cash accumulated at RMR Inc. We expect to pay this dividend on or about May 21, 2020.

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Basic earnings per common share reflects net income attributable to RMR Inc. divided by our weighted average Class A Common Shares and our Class B-1 Common Shares outstanding during the applicable periods. Our Class B-2 Common Shares, which are paired with ABP Trust’s Class A Units, have no independent economic interest in RMR Inc. and thus are not included as common shares outstanding for purposes of calculating basic earnings per common share. Diluted earnings per common share reflects net income divided by our weighted average Class A Common Shares and our Class B-1 Common Shares plus the effect of dilutive common share equivalents during the applicable periods. Diluted common share equivalents reflect the assumed issuance of Class A Common Shares pursuant to our 2016 Plan and the assumed issuance of Class A Common Shares related to the assumed redemption of the 15,000,000 Class A Units using the if-converted method.

Unvested Class A Common Shares granted to our employees are deemed participating securities for purposes of calculating earnings per common share because they have dividend rights. We calculate earnings per share using the two-class method. Under the two-class method, we allocate earnings proportionately to vested Class A Common Shares and Class B-1 Common Shares outstanding and unvested Class A Common Shares outstanding for the period. Earnings attributable to unvested Class A Common Shares are excluded from earnings per share under the two-class method as reflected in our condensed consolidated statements of income.

The 15,000,000 Class A Units that we do not own may be redeemed for our Class A Common Shares on a one-for-one basis, or upon such redemption, we may elect to pay cash instead of issuing Class A Common Shares. Upon redemption of a Class A Unit, the Class B-2 Common Share “paired” with such unit is canceled for no additional consideration. In computing the dilutive effect, if any, that the aforementioned redemption would have on earnings per share, we considered that net income available to holders of our Class A Common Shares would increase due to elimination of the noncontrolling interest offset by any tax effect, which may be dilutive. For the three and six months ended March 31, 2019, such redemption is not reflected in diluted earnings per share as the assumed redemption would be anti-dilutive.

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The calculation of basic and diluted earnings per share is as follows:

		Three Months Ended March 31,								Six Months Ended March 31,
		2020				2019				2020				2019
Numerators:
Net income attributable to The RMR Group Inc.		$	6,468			$	8,168			$	15,917			$	60,377
Income attributable to unvested participating securities		(47		)		(55		)		(119		)		(409		)
Net income attributable to The RMR Group Inc. used in calculating basic EPS		6,421				8,113				15,798				59,968
Effect of dilutive securities:
Add back: net income attributable to noncontrolling interest		8,453				—				20,628				—
Add back: income tax expense		2,612				—				6,336				—
Income tax expense at enacted tax rates assuming redemption of noncontrolling interest’s Class A Units for Class A Common Shares		(5,317		)		—				(12,858		)		—
Net income attributable to The RMR Group Inc. used in calculating diluted EPS		$	12,169			$	8,113			$	29,904			$	59,968
Denominators:
Weighted average common shares outstanding - basic		16,186				16,120				16,181				16,120
Effect of dilutive securities:
Assumed redemption of noncontrolling interest’s Class A Units for Class A Common Shares		15,000				—				15,000				—
Incremental unvested shares		—				27				—				20
Weighted average common shares outstanding - diluted		31,186				16,147				31,181				16,140
Net income attributable to The RMR Group Inc. per common share - basic		$	0.40			$	0.50			$	0.98			$	3.72
Net income attributable to The RMR Group Inc. per common share - diluted		$	0.39			$	0.50			$	0.96			$	3.72

We enter into operating leases, as the lessee, for office space and determine if an arrangement is a lease at inception of the arrangement. Operating lease liabilities and right of use assets are recognized based on the present value of the future minimum lease payments over the lease term using our estimated incremental borrowing rate. Operating lease expense associated with minimum lease payments is recognized on a straight line basis over the lease term and was $1,623 and $3,226 for the three and six months ended March 31, 2020, respectively. Minimum lease payments for leases with an initial term of twelve months or less are not recorded on our condensed consolidated balance sheet. Lease expense for leases with an initial term of twelve months or less was $18 and $33 for the three and six months ended March 31, 2020, respectively. As of March 31, 2020, our operating leases expire on various dates through 2030, the weighted average remaining lease term was 9.2 years and the determination of the present value of the remaining lease payments utilized a weighted average discount rate of 3.1%.

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The following table presents the undiscounted cash flows on an annual basis for our operating lease liabilities as of March 31, 2020:

2020		$	2,715
2021		5,480
2022		5,555
2023		4,926
2024		4,428
Thereafter		21,400
Total lease payments		44,504
Less: imputed interest		(5,934		)
Present value of operating lease liabilities		38,570
Less: current portion of operating lease liabilities		(4,302		)
Operating lease liabilities, net of current portion		$	34,268

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We have one reportable business segment, which is RMR LLC. In the tables below, our All Other Operations includes the operations of RMR Inc., RMR Advisors and Tremont Advisors.

		Three Months Ended March 31, 2020
						All Other
		RMR LLC (1)				Operations				Total
Revenues:
Management services		$	43,219			$	102			$	43,321
Advisory services		—				780				780
Total management and advisory services revenues		43,219				882				44,101
Reimbursable compensation and benefits		12,503				30				12,533
Other client company reimbursable expenses		84,227				—				84,227
Total reimbursable costs		96,730				30				96,760
Total revenues		139,949				912				140,861
Expenses:
Compensation and benefits		28,923				1,199				30,122
Equity based compensation		257				45				302
Separation costs		385				—				385
Total compensation and benefits expense		29,565				1,244				30,809
General and administrative		6,314				983				7,297
Other client company reimbursable expenses		84,227				—				84,227
Transaction and acquisition related costs		—				373				373
Depreciation and amortization		235				11				246
Total expenses		120,341				2,611				122,952
Operating income (loss)		19,608				(1,699		)		17,909
Interest and other income		1,366				134				1,500
Equity in earnings of investees		—				324				324
Unrealized loss on equity method investment accounted for under the fair value option		(2,200		)		—				(2,200		)
Income (loss) before income tax expense		18,774				(1,241		)		17,533
Income tax expense		—				(2,612		)		(2,612		)
Net income (loss)		$	18,774			$	(3,853	)		$	14,921
Total assets		$	636,994			$	48,930			$	685,924

(1)	Intersegment revenues of $1,090 recognized by RMR LLC for services provided to our All Other Operations segment have been eliminated in the condensed consolidated financial statements.

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		Six Months Ended March 31, 2020
						All Other
		RMR LLC (1)				Operations				Total
Revenues:
Management services		$	89,814			$	782			$	90,596
Advisory services		—				1,627				1,627
Total management and advisory services revenues		89,814				2,409				92,223
Reimbursable compensation and benefits		25,205				1,123				26,328
Other client company reimbursable expenses		182,202				—				182,202
Total reimbursable costs		207,407				1,123				208,530
Total revenues		297,221				3,532				300,753
Expenses:
Compensation and benefits		56,198				4,121				60,319
Equity based compensation		1,824				60				1,884
Separation costs		645				—				645
Total compensation and benefits expense		58,667				4,181				62,848
General and administrative		12,439				1,904				14,343
Other client company reimbursable expenses		182,202				—				182,202
Transaction and acquisition related costs		49				1,120				1,169
Depreciation and amortization		479				23				502
Total expenses		253,836				7,228				261,064
Operating income (loss)		43,385				(3,696		)		39,689
Interest and other income		3,086				289				3,375
Equity in earnings of investees		—				579				579
Unrealized loss on equity method investment accounted for under the fair value option		(762		)		—				(762		)
Income (loss) before income tax expense		45,709				(2,828		)		42,881
Income tax expense		—				(6,336		)		(6,336		)
Net income (loss)		$	45,709			$	(9,164	)		$	36,545
Total assets		$	636,994			$	48,930			$	685,924

(1)	Intersegment revenues of $3,165 recognized by RMR LLC for services provided to our All Other Operations segment have been eliminated in the condensed consolidated financial statements.

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		Three Months Ended March 31, 2019
						All Other
		RMR LLC (1)				Operations				Total
Revenues:
Management services		$	42,495			$	105			$	42,600
Advisory services		—				761				761
Total management and advisory services revenues		42,495				866				43,361
Reimbursable compensation and benefits		12,813				599				13,412
Other client company reimbursable expenses		73,323				—				73,323
Total reimbursable costs		86,136				599				86,735
Total revenues		128,631				1,465				130,096
Expenses:
Compensation and benefits		27,511				1,470				28,981
Equity based compensation		1,177				27				1,204
Separation costs		414				—				414
Total compensation and benefits expense		29,102				1,497				30,599
General and administrative		6,167				955				7,122
Other client company reimbursable expenses		73,323				—				73,323
Transaction and acquisition related costs		47				—				47
Depreciation and amortization		244				13				257
Total expenses		108,883				2,465				111,348
Operating income (loss)		19,748				(1,000		)		18,748
Interest and other income		2,091				377				2,468
Equity in earnings of investees		—				109				109
Unrealized gain on equity method investment accounted for under the fair value option		522				—				522
Income (loss) before income tax expense		22,361				(514		)		21,847
Income tax expense		—				(3,139		)		(3,139		)
Net income (loss)		$	22,361			$	(3,653	)		$	18,708
Total assets		$	599,581			$	57,281			$	656,862

(1)	Intersegment revenues of $939 recognized by RMR LLC for services provided to our All Other Operations segment have been eliminated in the condensed consolidated financial statements.

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		Six Months Ended March 31, 2019
						All Other
		RMR LLC (1)				Operations				Total
Revenues:
Management services		$	89,931			$	157			$	90,088
Incentive business management fees		120,094				—				120,094
Advisory services		—				1,543				1,543
Total management and advisory services revenues		210,025				1,700				211,725
Reimbursable compensation and benefits		26,121				1,164				27,285
Other client company reimbursable expenses		171,399				—				171,399
Total reimbursable costs		197,520				1,164				198,684
Total revenues		407,545				2,864				410,409
Expenses:
Compensation and benefits		53,936				3,057				56,993
Equity based compensation		2,960				55				3,015
Separation costs		6,811				—				6,811
Total compensation and benefits expense		63,707				3,112				66,819
General and administrative		12,552				1,890				14,442
Other client company reimbursable expenses		171,399				—				171,399
Transaction and acquisition related costs		231				—				231
Depreciation and amortization		486				26				512
Total expenses		248,375				5,028				253,403
Operating income (loss)		159,170				(2,164		)		157,006
Interest and other income		3,465				529				3,994
Equity in earnings of investees		—				144				144
Unrealized loss on equity method investment accounted for under the fair value option		(2,247		)		—				(2,247		)
Income (loss) before income tax expense		160,388				(1,491		)		158,897
Income tax expense		—				(22,109		)		(22,109		)
Net income (loss)		$	160,388			$	(23,600	)		$	136,788
Total assets		$	599,581			$	57,281			$	656,862

(1)	Intersegment revenues of $1,787 recognized by RMR LLC for services provided to our All Other Operations segment have been eliminated in the condensed consolidated financial statements.

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•	the adverse impact of volatility in our Managed Equity REITs’ share prices and the possible adverse impacts to our business management fee revenues, as all of our Managed Equity REITs are currently paying business management fees on a total market capitalization basis,

•	tenants of our Client Companies’ ability to withstand the current economic conditions and continue as going concerns, including possible adverse impacts to our future property management fee revenues due to declines in our Client Companies’ tenant rental receipts,

•	our Client Companies’ operations, liquidity and capital needs and resources, including reductions in our construction management fees as a result of the Managed Equity REITs reducing their capital spending in order to conserve capital,

•	our Client Companies’ ability to comply with certain financial covenants under their debt agreements,

•	our Client Companies’ ability to access debt and equity capital, and

•	possible government relief funding sources and other programs that may be available to us and our Client Companies.

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•	prudently managing the execution or deferment of tenant work orders to limit our staff and tenant interactions at our managed properties.

•	the duration and severity of the economic impact, especially on the hospitality, senior living and service retail sectors,

•	the strength and sustainability of any economic recovery,

•

the timing and process for how the government and other market participants may oversee and conduct the return of economic activity when the COVID-19 pandemic abates, such as what continuing restrictions and protective measures may remain in place or be added and what restrictions and protective measures may be lifted or reduced in order to foster a return of increased economic activity in the United States, and

•	whether, following a recommencing of more normal level of economic activities, the United States or other countries experience “second waves” of COVID-19 infection outbreaks and, if so, the responses of governments, businesses and the general public to those events.

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(1)	SIR merged with and into OPI on December 31, 2018 with OPI continuing as the surviving entity.

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•	the impact of the COVID-19 pandemic and the resulting market disruptions on us and our Client Companies;

•	substantially all our revenues are derived from services to a limited number of Client Companies;

•	our revenues are highly variable;

•	changing market conditions that may adversely impact our Client Companies and our business with them;

•	potential terminations of our management agreements with our Client Companies;

•	our ability to expand our business depends upon the growth and performance of our Client Companies and our ability to obtain or create new clients for our business and is often dependent upon circumstances beyond our control;

•	the ability of our Client Companies to operate their businesses profitably and to grow and increase their market capitalizations and total shareholder returns;

•	litigation risks;

•	risks related to acquisitions, dispositions and other activities by or among our Client Companies;

•	risks related to potential impairment of our equity investments;

•	allegations, even if untrue, of any conflicts of interest arising from our management activities;

•	our ability to retain the services of our managing directors and other key personnel; and

•	risks associated with and costs of compliance with laws and regulations, including securities regulations, exchange listing standards and other laws and regulations affecting public companies.

•

We have a limited number of Client Companies. We have long term contracts with our Managed Equity REITs; however, the other contracts under which we earn our revenues are for shorter terms, and the long term contracts with our Managed Equity REITs may be terminated in certain circumstances. The termination or loss of any of our management contracts may have a material adverse impact upon our revenues, profits, cash flows and business reputation;

•

Our base business management fees earned from our Managed Equity REITs are calculated monthly based upon the lower of each REIT’s cost of its applicable assets and such REIT’s market capitalization. Our business management fees earned from our Managed Operators are calculated based upon certain revenues from each operator’s business. Accordingly, our future revenues, income and cash flows will decline if the business activities, assets or market capitalizations of our Client Companies decline;

•

The fact that we earned significant incentive business management fees from certain Managed Equity REITs in previous years may imply that we will earn incentive business management fees in future years. The incentive business management fees which we may earn from our Managed Equity REITs are based upon total returns realized by the REITs’ shareholders compared to the total shareholders return of certain identified indices. We have only limited control over the total returns realized by shareholders of our Managed Equity REITs and effectively no control over indexed total returns. There can be no assurance that we will earn any incentive business management fees in the future;

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We currently intend to pay a regular quarterly dividend of $0.38 per Class A Common Share and Class B-1 Common Share. Our dividends are declared and paid at the discretion of our board of directors. Our board may consider many factors when deciding whether to declare and pay dividends, including our current and projected earnings, our cash flows and alternative uses for any available cash. Our board may decide to lower or even eliminate our dividends. There can be no assurance that we will continue to pay any regular dividends or with regard to the amount of dividends we may pay;

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Our liquidity will be temporarily impacted by rent deferrals our Client Companies have granted to their tenants because our property management fee revenues are based on gross rents collected and we will begin to earn fees related to these deferred amounts in September 2020 when the tenants begin to pay the deferred amounts to the Client Companies. However, these tenants may be unable to repay those amounts when due. Further, these and other tenants of our Client Companies may be unable to pay other rent amounts and they may default on those payments or our Client Companies may grant them relief, any of which may reduce or delay the fees we earn and negatively impact our liquidity;

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We balance our pursuit of growth of our and our Client Companies’ businesses by executing, on behalf of our Client Companies, prudent capital recycling or business arrangement restructurings in an attempt to help our Client Companies prudently manage leverage and to reposition their portfolios and businesses when circumstances warrant such changes or when other more desirable opportunities are identified. However, these efforts may not be successful and, even if they are successful, they may not be sufficient to prevent our Client Companies from experiencing increases in leverage, to adequately reposition our Client Companies’ portfolios and businesses, or to enable our Client Companies to execute successfully on desirable opportunities;

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We have undertaken new initiatives and are considering other initiatives to grow our business and any actions we may take to grow our business may not be successful or we may elect to abandon pursuing some or all of those initiatives in order to pursue other initiatives or for other reasons. In addition, any investments or repositioning of the properties we or our Client Companies may make or pursue may not increase the value of the applicable properties, offset the decline in value those properties may otherwise experience, or increase the market capitalization or total shareholder returns of our Client Companies;

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We state that RMR LLC’s $100.0 million commitment to the Open End Fund may be drawn in the future by the Open End Fund. The acquisition environment for office properties in the United States is competitive, and the impact of COVID-19 and the resulting economic downturn, may result in delays in investments, as a result of these and other reasons, the fund may not be successful in drawing and investing all, or any, of this capital, and

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The market turmoil created by COVID-19 may have lasting effects on our business and the businesses of our Client Companies. Our business is dependent on revenue generated from sectors that have been and may continue to be adversely impacted by COVID-19 to a greater degree than other sectors. Further, our revenues from other sectors may become increasingly adversely impacted by COVID-19. Accordingly, there can be no assurances that we will be able to successfully manage through the COVID-19 pandemic, resulting market disruptions and their aftermath, or that we will be able to take advantage of any resulting opportunities.

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▪	continued sudden and/or severe declines in the market price of our and our Client Companies’ common shares;

▪	the inability of our Client Companies to comply with certain financial covenants or pay interest and principal on their outstanding debt that could result in their defaulting under their debt agreements;

▪	the inability of our Client Companies to access debt and equity capital on attractive terms, or at all;

▪	downgrades of our Client Companies’ credit ratings by nationally recognized credit rating agencies;

▪	the inability of our Client Companies to pay distributions to their shareholders;

▪	worsening economic and financial market conditions that could significantly reduce the value of the real estate, loans and other investments of our Client Companies and reduce the amounts earned on those investments;

▪	increased risk of our Client Companies’ and their tenants’ and managers’ default or bankruptcy;

▪	increased risk of our Client Companies’ and their tenants’ and managers’ inability to weather an extended cessation of normal economic activity and thereby impairing their ability to continue functioning as going concerns and our Client Companies’ tenants’ and managers’ ability to pay rent and returns to our Client Companies;

▪	our and our Client Companies’ and their tenants’ and managers’ inability to operate our and their businesses if the health of our and their management personnel and other employees is affected, particularly if a significant number of individuals are impacted; and

▪	reduced economic demand resulting from mass employee layoffs or furloughs in response to governmental action taken to slow the spread of COVID-19, which could impact our and our Client Companies’ continued viability.

•	some of our Client Companies have reduced their quarterly distribution rates payable to their shareholders;

•	some of our Client Companies have deferred capital spending to conserve cash and liquidity;

•	some of our Client Companies have obtained a waiver from the lenders under their credit facilities;

•	we and our Client Companies have been in regular, frequent contact with our and their key managers, tenants, lenders, customers, suppliers and other vendors to implement cost savings measures to minimize losses and preserve liquidity, including agreeing to the closures of certain properties, the reduction of staffing and certain other measures; and

•	our Client Companies have provided rent and debt funding relief to certain of their tenants and borrowers.

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(1)	These Class A Common Share withholdings and purchases were made to satisfy tax withholding and payment obligations in connection with the vesting of awards of our Class A Common Shares. We withheld and purchased these shares at their fair market values based upon the trading prices of our Class A Common Shares at the close of trading on Nasdaq on the purchase dates.

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