The RMR Group Inc.
Annual Report 2021

The RMR Group Inc.
2021 Annual Report

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended September 30, 2021
or

Commission file number 001-37616
THE RMR GROUP INC.
(Exact Name of Registrant as Specified in Its Charter)

Maryland

(State of Organization)

47-4122583

(IRS Employer Identification No.)

Two Newton Place, 255 Washington Street, Suite 300, Newton, MA 02458-1634

(Zip Code)
(Address of Principal Executive Offices)
Registrant’s Telephone Number, Including Area Code 617-796-8230
Securities registered pursuant to Section 12(b) of the Act:

Title Of Each Class

Trading Symbol

Name Of Each Exchange On Which Registered

Class A common stock, $0.001 par
value per share

RMR

The Nasdaq Stock Market LLC
(Nasdaq Capital Market)

Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Yes ☐ No ☒

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted

pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to
submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller
reporting company or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting
company” and “emerging growth company” in Rule 12b-2 of the Exchange Act:
Large accelerated filer ☐

Non-accelerated filer ☐

Accelerated filer ☒

Smaller reporting company ☐
Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for

complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the

effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the
registered public accounting firm that prepared or issued its audit report. ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
The aggregate market value of the voting shares of Class A common stock, $0.001 par value, of the registrant held by non-affiliates
was approximately $617.1 million based on the $40.81 closing price per common share on The Nasdaq Stock Market LLC, on March 31,
2021. For purposes of this calculation, an aggregate of 291,695 shares of Class A common stock, held directly by, or by affiliates of,
the directors and executive officers of the registrant have been included in the number of common shares held by affiliates.

As of November 12, 2021, there were 15,485,011 shares of Class A common stock, par value $0.001 per share, 1,000,000 shares
of Class B-1 common stock, par value $0.001 per share and 15,000,000 shares of Class B-2 common stock, par value $0.001 per share
outstanding.

Portions of the Registrant’s definitive proxy statement for its 2022 annual meeting of shareholders are incorporated by reference in

DOCUMENTS INCORPORATED BY REFERENCE

Part III of this Form 10-K.

WARNING CONCERNING FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K contains forward-looking statements within the meaning of the

Private Securities Litigation Reform Act of 1995 and other securities laws. Our forward-looking
statements reflect our current views, intents and expectations with respect to, among other things, our
operations and financial performance. Our forward-looking statements can be identified by the use of
words such as “outlook,” “believe,” “expect,” “potential,” “will,” “may,” “estimate,” “anticipate” and
derivatives or negatives of such words or similar words. Such forward-looking statements are subject to
various risks and uncertainties. Accordingly, there are or will be factors that could cause actual
outcomes or results to differ materially from those stated or implied in these statements. We believe
these factors include, but are not limited to the following:

• the duration and severity of the negative economic impact of COVID-19 and the resulting

disruptions on us and our clients;

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

• our revenues may be highly variable;

• changing market conditions, practices and trends may adversely impact our clients and the fees

we receive from them;

• potential terminations of our management agreements with our clients;

• our ability to expand our business depends upon the growth and performance of our clients 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 clients 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 clients;

• 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;

• 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;
and

• other risks described under “risk factors” beginning on page 14.

For example:

• We have a limited number of clients. We have long term contracts with our Managed Equity

REITs (collectively, Diversified Healthcare Trust, a Maryland real estate investment trust, including
its subsidiaries, or DHC; Industrial Logistics Properties Trust, a Maryland real estate investment
trust, including its subsidiaries, or ILPT; Office Properties Income Trust, a Maryland real
estate investment trust, including its subsidiaries, or OPI; and Service Properties Trust, a
Maryland real estate investment trust, including its subsidiaries, or SVC); 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 real estate investment trust’s, or REIT’s, cost of its
applicable assets and such REIT’s market capitalization. Our business management fees earned
from our Managed Operating Companies (collectively, Five Star Senior Living Inc., a Maryland
corporation, including its subsidiaries, or Five Star; Sonesta International Hotels Corporation, a
Maryland corporation, including its subsidiaries, or Sonesta; and TravelCenters of America Inc., a

i

Maryland corporation, including its subsidiaries, or TA) 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 clients decline;

• The fact that we have earned significant incentive business management fees from certain of

our Managed Equity REITs in previous years and the fact that we estimate we would have earned
an incentive business management fee for calendar 2021 from one of our Managed Equity
REITs of $6.0 million as of September 30, 2021, if that date had been the end of the next
measurement period, may imply that we will earn incentive business management fees for
calendar 2021 or in future years. The incentive business management fees that 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 indexes. We have only limited
control over the total returns realized by shareholders of the 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 from our Managed Equity REITs in the future;

• The fact that we have earned a $0.6 million incentive fee from one of our mortgage REITs

during the fiscal year ended September 30, 2021 may imply that we will earn incentive business
management fees from our mortgage REITs in future periods. However, there can be no
assurance that we will earn any incentive business management fees from our mortgage REITs
in the future;

• We currently intend to pay a regular quarterly dividend of $0.38 per Class A common share and

Class B-1 common share. On September 16, 2021, we paid a one-time special dividend of
$7.00 per share in order to return excess capital to our shareholders. 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 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
future additional special dividends, or with regard to the amount of dividends we may pay;

• We balance our pursuit of growth of our and our clients’ businesses by executing, on behalf of

our clients, prudent capital recycling or business arrangement restructurings in an attempt to help
our clients 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 clients from experiencing increases in leverage, to adequately reposition
our clients’ portfolios and businesses, or to enable our clients to execute successfully on desirable
opportunities;

• Our belief that, because of the diversity of properties that our clients own and operate, there
should be opportunities for growth in select property types and locations as the COVID-19
pandemic ebbs may prove unfounded or we and our clients may not succeed in executing on those
opportunities;

• Our attempts to take into account industry and economic factors as well as specific property and

regional geographic considerations when providing services to our clients may not be
successful;

• 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 clients 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 clients;

• We state that our cash and cash equivalents balance leaves us well positioned to pursue a

range of capital allocation strategies in the next 12 months. This statement may imply that we
will successfully identify and execute one or more capital allocation strategies in the next 12 months

ii

and that any capital allocation strategy we may pursue will be successful and benefit us and our
shareholders. However, identifying and executing on capital allocation strategies are subject to
various uncertainties and risks and may take an extended period to realize any resulting benefit to
our business. In addition, we may elect to not pursue a capital allocation strategy or abandon
any such strategy we may pursue;

• We continue expanding our Environmental, Social and Governance, or ESG, program and

initiatives and we expect that we and our clients will benefit as a result. However, we and our
clients may not realize the benefits we expect from this program and those initiatives and we and
our clients may not succeed in meeting existing or future standards regarding ESG; and

• The COVID-19 pandemic may have lasting affects on our business and the businesses of our

clients. 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.

There are or will be additional important factors that could cause business outcomes or financial

results to differ materially from those stated or implied in our forward-looking statements. For example,
the COVID-19 pandemic and its aftermath may reduce or limit any growth in the market value of our
Managed Equity REITs or cause their rent receipts or construction activities to decline or cause the
revenues of our Managed Operating Companies to significantly decline and, as a result, our revenues
and cash flows may be adversely impacted.

We have based our forward-looking statements on our current expectations about future events
that we believe may affect our business, financial condition and results of operations. Because forward-
looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted
or quantified, our forward-looking statements should not be relied on as predictions of future events. The
events and circumstances reflected in our forward-looking statements may not be achieved or occur
and actual results could differ materially from those projected or implied in our forward-looking statements.
The matters discussed in this warning should not be construed as exhaustive and should be read in
conjunction with the other cautionary statements that are included in this Annual Report on Form 10-K.
We undertake no obligation to update any forward-looking statement, whether as a result of new
information, future developments or otherwise, except as required by law.

iii

THE RMR GROUP INC.

2021 FORM 10-K ANNUAL REPORT

Table of Contents

Part I

Item 1.

Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Item 1A. Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Item 1B. Unresolved Staff Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Item 2.

Item 3.

Item 4.

Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Mine Safety Disclosures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Part II

Item 5.

Item 6.
Item 7.

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Reserved . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Management’s Discussion and Analysis of Financial Condition and Results of
Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 7A. Quantitative and Qualitative Disclosures About Market Risk . . . . . . . . . . . . . . . . . . .
Financial Statements and Supplementary Data . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 8.
Changes in and Disagreements with Accountants on Accounting and Financial
Item 9.
Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 9A. Controls and Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 9B. Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections . . . . . . . . . . . .

Part III

Item 10. Directors, Executive Officers and Corporate Governance . . . . . . . . . . . . . . . . . . . .
Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Item 11.
Security Ownership of Certain Beneficial Owners and Management and Related
Item 12.
Stockholder Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Item 13. Certain Relationships and Related Person Transactions, and Director

Item 14.

Independence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Principal Accountant Fees and Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Item 15.

Exhibits and Financial Statement Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Item 16.

Form 10-K Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Part IV

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PART I

Item 1. Business

Our Company

The RMR Group Inc., or RMR Inc., is a holding company incorporated as a Maryland corporation

and substantially all of its business is conducted by its majority owned subsidiary, The RMR Group
LLC, or RMR LLC. 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 this Annual Report on Form 10-K, unless otherwise indicated, “we”, “us” and “our” refers
to RMR Inc. and its direct and indirect subsidiaries, including RMR LLC.

As of September 30, 2021, RMR Inc. owned 15,485,236 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 represent approximately 52.4% of the economic interest
of RMR LLC. ABP Trust owns 15,000,000 redeemable Class A Units, representing approximately 47.6%
of the economic interest of RMR LLC.

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. As of September 30, 2021, Adam D. Portnoy
beneficially owned (including through ABP Trust), in aggregate, (i) 170,502 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; and (iii) all the outstanding shares of Class B-2
common stock of RMR Inc., or Class B-2 Common Shares.

Since its founding in 1986, RMR LLC has substantially grown assets under management and the

number of real estate businesses it manages. As of September 30, 2021, we had $32.7 billion of assets
under management.

Our business primarily consists of providing management services to four publicly traded equity
real estate investment trusts, or REITs, whose securities are listed on The Nasdaq Stock Market LLC,
or Nasdaq: Diversified Healthcare Trust, a Maryland REIT, including its subsidiaries, or DHC; Industrial
Logistics Properties Trust, a Maryland REIT, including its subsidiaries, or ILPT; Office Properties
Income Trust, a Maryland REIT, including its subsidiaries, or OPI; and Service Properties Trust, a
Maryland REIT, including its subsidiaries, or SVC. DHC, ILPT, OPI and SVC are collectively referred to
as the Managed Equity REITs. We also provide management services to three real estate operating
companies: Five Star Senior Living Inc., a Maryland corporation, or Five Star; Sonesta International
Hotels Corporation, a Maryland corporation, or Sonesta; and TravelCenters of America Inc., a Maryland
corporation, or TA. Five Star, Sonesta and TA are collectively referred to as the Managed Operating
Companies.

As manager of the Managed Equity REITs, we are responsible for implementing investment

strategies and managing day to day operations, subject to supervision and oversight by each Managed
Equity REIT’s board of trustees. The Managed Equity REITs have no employees, and we provide the
personnel and services necessary for each Managed Equity REIT to conduct its business. The Managed
Equity REITs invest in diverse income producing properties across multiple real estate asset classes
as follows:

• DHC (Nasdaq: DHC) owns medical office and life science properties, senior living communities

and wellness centers. As of September 30, 2021, DHC owned 392 properties located in 36 states
and the District of Columbia.

• ILPT (Nasdaq: ILPT) owns and leases industrial and logistics properties. As of September 30,

2021, ILPT owned 294 properties, including 226 buildings, leasable land parcels and easements
in Oahu, Hawaii and 68 buildings located in 32 other states.

• OPI (Nasdaq: OPI) owns office properties primarily leased to single tenants and those with high
quality credit characteristics, including the government. As of September 30, 2021, OPI owned
178 properties located in 33 states and the District of Columbia.

1

• SVC (Nasdaq: SVC) owns a diverse portfolio of hotels and net lease service and necessity-

based retail properties. As of September 30, 2021, SVC owned 1,098 properties (304 hotels and
794 net lease properties) located in 47 states, Puerto Rico, Canada and the District of Columbia.

We also provide management services to the Managed Operating Companies that have diverse

businesses as follows:

• Five Star (Nasdaq: FVE) operates senior living communities, many of which are owned by DHC.

As of September 30, 2021, Five Star managed or operated 179 senior living communities
located in 29 states, including 159 communities that it managed and 20 communities that it
owned and operated.

• Sonesta is a privately owned franchisor and operator of hotels, resorts and cruise ships in the

United States, Latin America, the Caribbean and the Middle East, and many of the U.S. hotels that
Sonesta operates are owned by SVC. As of September 30, 2021, Sonesta’s business included
1,166 properties in eight countries.

• TA (Nasdaq: TA) operates and franchises travel centers primarily along the U.S. interstate

highway system, many of which are owned by SVC, and standalone truck service facilities. As
of September 30, 2021, TA operated or franchised 279 properties of which TA owned 52 (51 travel
centers and one standalone truck service facility) located in 44 states in the United States and
the province of Ontario, Canada.

RMR LLC’s wholly owned subsidiary, Tremont Realty Capital LLC (formerly known as Tremont
Realty Advisors LLC), or Tremont Realty Capital, an investment adviser registered with the Securities
and Exchange Commission, or SEC, provides advisory services for Seven Hills Realty Trust (formerly
known as RMR Mortgage Trust, or RMRM), or SEVN. SEVN is a publicly traded mortgage REIT that
focuses on originating and investing in first mortgage whole loans secured by middle market and
transitional commercial real estate. Until September 30, 2021, Tremont Realty Capital also provided
advisory services to Tremont Mortgage Trust, or TRMT, a publicly traded mortgage REIT. On
September 30, 2021, TRMT merged with and into SEVN, or the Merger, with SEVN continuing as the
surviving company.

The Managed Equity REITs, SEVN and, until September 30, 2021, TRMT, are collectively referred

to as the Managed REITs or the Managed Public Real Estate Capital clients.

In addition, RMR LLC provides management services to private capital vehicles, including ABP
Trust and its subsidiaries, or collectively ABP Trust, and other private entities that own commercial real
estate, of which certain of our Managed Equity REITs own minority equity interests. In this Annual
Report on Form 10-K, we refer to these clients as the Managed Private Real Estate Capital clients.

Our Business Strategy

Our business strategy is to provide an expanded range of management services to our existing
clients, as well as to diversify the number of clients to which we provide services and the sources of
capital upon which those clients may rely for growth.

We believe that we have several strengths that distinguish our business from other alternative

asset managers:

• Revenue Base. Our revenues are primarily from fees earned under long term agreements with

strong credit quality companies, many of which are permanent capital vehicles. Our agreements
with the Managed Equity REITs are 20 year term evergreen contracts with significant termination
fees payable in certain circumstances. For the fiscal year ended September 30, 2021, revenues
earned from the Managed Equity REITs represented 78.1% of our total management and
advisory services revenue.

• Cash Flow and Dividend. For the fiscal year ended September 30, 2021, we generated net cash

from operating activities of $71.8 million and net income of $81.0 million. We have no debt
outstanding. Our regular dividend of $0.38 per share per quarter ($1.52 per share per year) has

2

been well covered by our cash flows. In addition, we paid a one-time special dividend of $7.00
per share, or $219.9 million, in September 2021 to return excess capital to our shareholders.

• Diverse Portfolio of Managed Real Estate. We provide management services to a wide range of

real estate assets and businesses that include healthcare facilities, senior living and other
apartments, hotels, office buildings, industrial buildings, leased lands, net-lease service and
necessity-based retail, including travel centers, and various specialized properties such as
properties leased to government tenants and properties specially designed for medical and
biotech research. The properties and businesses we managed as of September 30, 2021, are
located throughout the United States in 47 states and Washington D.C., and in Puerto Rico and
Canada. The diversity of our managed portfolio helps provide balance throughout economic
cycles, as the impacts to each respective real estate sector can vary.

• Growth. Since the founding of RMR LLC in 1986, we have substantially grown our assets under

management and the number and variety of real estate businesses we manage. As of
September 30, 2021, we had $32.7 billion of assets under management, including more than
2,100 properties. The synergies among our clients may also facilitate their and our growth. We
assist our clients in realizing investment opportunities by working together to make acquisitions,
obtain financing, identifying possible joint venture partners, completing redevelopment activities,
facilitating capital recycling from strategic property dispositions and assisting in portfolio
repositioning and other business arrangements and strategic restructurings.

In addition, we expect to use cash on hand, future operating cash flows and may use our equity
or incur debt to fund our growth and diversify our operations through possible acquisition
opportunities or seeding new clients. We have recently sought to expand the sources of capital
underlying our assets under management, with our Managed Private Real Estate Capital clients
representing $1.3 billion of our assets under management as of September 30, 2021.

• Quality and Depth of Management. Our highly qualified and experienced management team
provides a broad base of deep expertise to our clients. Our senior management has worked
together through several business cycles in which they acquired, financed, managed and disposed
of real estate assets and started real estate businesses. We are a vertically integrated manager
and as of September 30, 2021, we employed approximately 600 real estate professionals in
more than 30 offices throughout the United States. Additionally, the clients we manage collectively
had approximately $10 billion of annual revenues and approximately 37,000 employees at
September 30, 2021. We have also assisted our clients to grow by successfully accessing the
capital markets; since our founding in 1986, our clients have successfully completed over
$41.0 billion of financing in approximately 180 capital raising transactions.

• Alignment of Interests. We believe our structure fosters strong alignment of interests between

our principal executive officer and our shareholders because our principal executive officer, Adam
D. Portnoy, has a 51.4% economic interest in RMR LLC. Alignment of interests also exists
between us and our Managed Equity REITs due to the manner upon which we earn base
management fees and incentive management fees under our Management Agreements with the
Managed Equity REITs, as described in more detail below.

We can provide no assurance that we will be able to implement our business strategy or achieve
our desired growth. Our business and the businesses of our clients are subject to a number of risks
and uncertainties. See “Risk Factors” beginning on page 14.

Our Management Agreements with the Managed Equity REITs

RMR LLC is party to a business management agreement and a property management agreement
with each Managed Equity REIT. The following is a summary of the terms of our business and property
management agreements with the Managed Equity REITs. The summary does not purport to be
complete and is subject to, and qualified in its entirety by, reference to the actual agreements, copies of
which are filed or incorporated as exhibits to this Annual Report on Form 10-K.

3

Business Management Agreement Services

Each business management agreement requires RMR LLC to use its reasonable best efforts to

present the Managed Equity REIT with a continuing and suitable real estate investment program
consistent with the REIT’s real estate investment policies and objectives.

Subject to the overall management, direction and oversight of the Board of Trustees of each

Managed Equity REIT, RMR LLC has the responsibility to:

• provide research and economic and statistical data in connection with the Managed Equity

REIT’s real estate investments and recommend changes in the Managed Equity REIT’s real
estate investment policies when appropriate;

• investigate, evaluate and negotiate contracts for the investment in, or the acquisition or disposition

of, real estate and related interests, financing and refinancing opportunities and make
recommendations concerning specific real estate investments to the Board of Trustees of the
Managed Equity REIT;

• investigate, evaluate, prosecute and negotiate any of the Managed Equity REIT’s claims in

connection with its real estate investments or otherwise in connection with the conduct of the
Managed Equity REIT’s business;

• administer bookkeeping and accounting functions as required for the Managed Equity REIT’s

business and operation, contract for audits and prepare or cause to be prepared reports and filings
required by a governmental authority in connection with the conduct of the Managed Equity
REIT’s business, and otherwise advise and assist the Managed Equity REIT with its compliance
with applicable legal and regulatory requirements;

• advise and assist in the preparation of all equity and debt offering documents and all registration
statements, prospectuses or other documents filed by the Managed Equity REIT with the SEC
or any state;

• retain counsel, consultants and other third party professionals on behalf of the Managed Equity

REIT;

• provide internal audit services;

• advise and assist with the Managed Equity REIT’s risk management and business oversight

function;

• advise and assist the Managed Equity REIT with respect to the Managed Equity REIT’s public
relations, preparation of marketing materials, internet website and investor relations services;

• provide communication facilities for the Managed Equity REIT and its officers and trustees and

provide meeting space as required;

• provide office space, equipment and experienced and qualified personnel necessary for the

performance of the foregoing services; and

• to the extent not covered above, advise and assist the Managed Equity REIT in the review and

negotiation of the Managed Equity REIT’s contracts and agreements, coordination and supervision
of all third party legal services and oversight for processing of claims by or against the Managed
Equity REIT.

Property Management Agreement Services

Under each property management agreement, RMR LLC is required to act as managing agent for
each Managed Equity REIT’s properties and devote such time, attention and effort as may be appropriate
to operate and manage the Managed Equity REIT’s properties in a diligent, orderly and efficient
manner. Subject to the overall management and supervision of the Board of Trustees of each Managed
Equity REIT, RMR LLC has the responsibility to:

• seek tenants for the Managed Equity REIT’s properties and negotiate leases;

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• collect rents and other income from the Managed Equity REIT’s properties;

• make contracts for, and supervise repairs and/or alterations on, the Managed Equity REIT’s

properties;

• for the Managed Equity REIT’s account and at its expense, hire, supervise and discharge

employees as required for the efficient operation and maintenance of the Managed Equity REIT’s
properties;

• obtain appropriate insurance for the Managed Equity REIT’s properties and notify the Managed

Equity REIT’s insurance carriers with respect to casualties or injuries at the properties;

• procure supplies and other necessary materials;

• pay from rental receipts, other income derived from the Managed Equity REIT’s properties or

other monies made available by the Managed Equity REIT for such purpose, all costs incurred
in the operation of the Managed Equity REIT’s properties that are expenses of the Managed
Equity REIT;

• establish reasonable rules and regulations for tenants of the Managed Equity REIT’s properties;

• institute or defend, on the Managed Equity REIT’s behalf and in the Managed Equity REIT’s

name, any and all legal actions or proceedings relating to the operation of the Managed Equity
REIT’s properties;

• maintain the books and records of the Managed Equity REIT reflecting the management and
operation of the Managed Equity REIT’s properties and prepare and deliver statements of
expenses for tenants of the REIT’s properties;

• aid, assist and cooperate with the Managed Equity REIT in matters relating to taxes and

assessments and insurance loss adjustments;

• provide emergency services as may be required for the efficient management and operation of

the Managed Equity REIT’s properties; and

• arrange for day to day operations of the Managed Equity REIT’s properties, including water,

fuel, electricity, cleaning and other services.

Term and Termination

The business and property management agreements with each Managed Equity REIT automatically

extend on December 31st of each year and have terms thereafter that end on the 20th anniversary of
the date of each extension. A Managed Equity REIT has the right to terminate its management
agreements with RMR LLC: (1) at any time upon 60 days’ written notice for convenience, (2) immediately
upon written notice for cause, as defined in the agreements, (3) upon written notice given within
60 days after the end of an applicable calendar year for a performance reason, as defined in the
agreements, and (4) by written notice during the 12 months following a manager change of control, as
defined in the agreements. RMR LLC has the right to terminate the management agreements for good
reason, as defined in the agreements.

If a Managed Equity REIT terminates a management agreement for convenience, or if RMR LLC

terminates a management agreement with a Managed Equity REIT for good reason, the Managed
Equity REIT is obligated to pay RMR LLC a termination fee equal to the sum of the present values of
the monthly future fees, as defined in the agreement, payable for the remaining term of the agreement,
assuming it had not been terminated. If a Managed Equity REIT terminates a management agreement
for a performance reason, as defined in the agreement, the Managed Equity REIT is obligated to pay
RMR LLC the termination fee calculated as described above, but assuming a remaining term of
ten years.

The management agreements provide for certain adjustments to the termination fees if a Managed

Equity REIT merges with another REIT to which RMR LLC is providing management services or if the
Managed Equity REIT spins off a subsidiary to which it contributed properties and to which RMR LLC is

5

providing management services both at the time of the spin off and on the date of the expiration or
termination of either of the management agreements.

A Managed Equity REIT is not required to pay any termination fee if it terminates its business or
property management agreements for cause, or as a result of a manager change of control, in each
case as defined in such agreements.

Business Management Agreement Fees and Expense Reimbursement

Each business management agreement between RMR LLC and a Managed Equity REIT provides
for (i) an annual base management fee, payable monthly in arrears, and (ii) an annual incentive business
management fee.

The annual base management fee generally is calculated as 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 $250.0 million, plus (c) 0.5% of the average invested capital
exceeding $250.0 million; and

• the sum of (a) 0.7% of the average market capitalization, as defined in the applicable business

management agreement, up to $250.0 million, plus (b) 0.5% of the average market capitalization
exceeding $250.0 million.

The annual incentive business management fee payable by each Managed Equity REIT, if any, is

calculated as follows:

• The incentive business management fee is calculated as an amount equal to 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 measurement period, and (b) the amount, expressed as a percentage, by which the
Managed Equity REIT’s total return per share realized by its common shareholders (i.e. share
price appreciation plus dividends) or the “total return per share,” exceeds the total shareholder
return of a specified REIT index, the “benchmark return per share,” for the relevant measurement
period, with each of (a) and (b) subject to adjustments for net common shares issued by the
Managed Equity REIT during the measurement period.

• Our business management agreements with each Managed Equity REIT were amended

effective August 1, 2021 to replace the benchmark index used in the calculation of incentive
business management fees. These changes to the index were due to S&P Global ceasing to
publish the SNL U.S. REIT indexes. Accordingly, the specified REIT index utilized to calculate the
benchmark return per share for each of our Managed Equity REITs when calculating the
incentive business management fees is as follows:

For the Periods

Through July 31, 2021

On and After August 1, 2021

DHC SNL U.S. REIT Healthcare Index

MSCI U.S. REIT/Health Care Index

ILPT SNL U.S. Industrial REIT Index

MSCI U.S. REIT/Industrial REIT Index

OPI

SNL U.S. Office REIT Index

MSCI U.S. REIT/Office REIT Index

SVC SNL U.S. REIT Hotel Index

MSCI U.S. REIT/Hotel & Resort REIT Index

• No incentive business management fee is payable by the Managed Equity REIT unless its total

return per share during the measurement period is positive.

• The measurement period for an annual incentive business management fee is defined as the
three year period ending on December 31 of the year for which such fee is being calculated.

• If the Managed Equity REIT’s total return per share exceeds 12% per year in the measurement

period, the benchmark return per share is adjusted to be the lesser of the total shareholder return

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of the specified REIT index for such measurement period and 12% per year, or the “adjusted
benchmark return per share.” In instances where the adjusted benchmark return per share
applies, the incentive fee will be reduced if the Managed Equity REIT’s total return per share is
between 200 basis points and 500 basis points below the specified REIT index by a low return
factor, as defined in the applicable business management agreement, and there will be no
incentive business management fee paid if, in these instances, the Managed Equity REIT’s total
return per share is more than 500 basis points below the specified REIT index.

• The incentive business management fee payable by the Managed Equity REIT is subject to a

cap equal to the value of the number of its common shares which would, after issuance, represent
(a) 1.5% of the number of its common shares outstanding on December 31 of the year for
which such fee is being calculated multiplied by (b) the average closing price of its common
shares during the 10 consecutive trading days having the highest average closing prices during
the final 30 trading days of the relevant measurement period.

• Incentive fees paid by the Managed Equity REIT for any measurement period may be subject to
certain “clawback” if the financial statements of the Managed Equity REIT for that measurement
period are restated due to material non-compliance with any financial reporting requirements
under the securities laws as a result of the bad faith, fraud, willful misconduct or gross
negligence of RMR LLC and the amount of the incentive fee paid by the Managed Equity REIT
was greater than the amount it would have paid based on the restated financial statements.

If the business management agreement is terminated, the base business management fee and
incentive business management fee due in respect of any partial period prior to the date of termination
will be prorated as provided in the agreement.

Under each business management agreement: the Managed Equity REIT pays or reimburses
RMR LLC for all of the expenses relating to the Managed Equity REIT’s activities, including the costs
and expenses of investigating, acquiring, owning and disposing of its real estate (third party property
diligence costs, appraisal, reporting, audit and legal fees), its costs of borrowing money, its costs of
securities listing, transfer, registration and compliance with reporting requirements and its costs of
third party professional services, including legal and accounting fees, and as otherwise agreed; and
RMR LLC bears its general and administrative expenses relating to its performance of its obligations
under the agreement, including expenses of its personnel, rent and other office expenses. Also, the
allocable cost of internal audit services is reimbursed by each Managed Equity REIT to RMR LLC.

Property Management Agreement Fees and Expense Reimbursement

Each property management agreement between RMR LLC and a Managed Equity REIT provides

for the following:

(i) a management fee equal to 3.0% of the gross rents collected from tenants, which is not
applicable to any hotels, senior living communities or travel centers which are leased to, or managed
by, a Managed Operating Company or another operating business such as a hotel management
company or a senior living or healthcare services provider; and

(ii) a construction supervision fee equal to 5.0% of the cost of any construction, renovation or

repair activities at the Managed Equity REIT’s properties, other than ordinary maintenance and
repairs. In June 2021, we and DHC and SVC amended our respective property management
agreements to, among other things, provide for our oversight of any major capital projects and
repositionings at DHC’s senior living communities, including DHC’s senior living communities
managed by Five Star, and SVC’s hotels, including SVC’s hotels managed by Sonesta, as DHC or
SVC, as applicable, may request from time to time. Under the amended agreements, we receive
the same fee previously paid to Five Star and Sonesta, respectively, for these services, which is
equal to 3.0% of the cost of any such major capital project or repositioning.

Also, under each property management agreement, the Managed Equity REIT pays certain
allocable expenses of RMR LLC in the performance of its duties, including wages for onsite property
management personnel and allocated costs of centralized property management services.

7

Other Provisions

Under both the business and property management agreements, each Managed Equity REIT has
agreed to indemnify RMR LLC, its members, officers, employees and affiliates against liabilities relating
to acts or omissions of RMR LLC with respect to the provision of services by RMR LLC, except to the
extent such provision of services was in bad faith or fraudulent, constituted willful misconduct or was
grossly negligent. In addition, each management agreement provides that any disputes, as defined
in those agreements, arising out of or relating to the agreement or the provision of services pursuant
thereto, upon the demand of a party to the dispute, will be subject to mandatory arbitration in accordance
with procedures provided in the agreement.

Our Management Agreements with the Managed Operating Companies

RMR LLC provides services and earns fees pursuant to a management agreement with each of

the Managed Operating Companies. Under these agreements, RMR LLC provides services to the
Managed Operating Companies relating to, or assists them with, among other things, their compliance
with various laws and rules applicable to them, capital markets and financing activities, maintenance of
their properties, selection of new business sites and evaluation of other business opportunities,
accounting and financial reporting, internal audit, investor relations and general oversight of the
company’s daily business activities, including legal and tax matters, human resources, insurance
programs and management information systems.

Each Managed Operating Company pays RMR LLC a fee under its management agreement in an

amount 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; and (iii) in the case of TA,
the sum of TA’s gross fuel margin, determined as TA’s fuel sales revenues less its cost of fuel sales, plus
TA’s total nonfuel revenues. In addition, the management agreement with each Managed Operating
Company provides that the compensation of senior executives of the Managed Operating Company, who
are also employees or officers of RMR LLC, is the responsibility of the party to or on behalf of which
the individual renders services. In the past, because at least 80.0% of each of these executives’ business
time was devoted to services to the Managed Operating Company, 80.0% of these executives’ total
cash compensation was paid by the Managed Operating Company and the remainder was paid by RMR
LLC.

The terms of the management agreements with each Managed Operating Company end on
December 31st of each year, and automatically extend for successive one year terms, unless RMR
LLC or the applicable Managed Operating Company gives notice of non-renewal before the expiration
of the applicable term. Also, a Managed Operating Company may terminate its management agreement
at any time (i) for Five Star and TA, on 60 days’ notice and RMR LLC may terminate such agreements
at any time on 120 days’ notice and (ii) for Sonesta, on 30 days’ notice and RMR LLC may terminate its
agreement with Sonesta on 30 days’ notice. If Five Star or TA terminates or elects not to renew its
agreement, other than for cause as defined in each agreement, the Managed Operating Company is
obligated to pay RMR LLC a termination fee equal to 2.875 times the sum of the annual base management
fee and the annual internal audit services expense, which amounts are based on averages during the
24 consecutive calendar months prior to the date of notice of nonrenewal or termination.

Each Managed Operating Company has agreed to indemnify RMR LLC, its members, officers,
employees and affiliates against liabilities relating to acts or omissions of RMR LLC with respect to the
provision of services by RMR LLC, except to the extent such provision of services was in bad faith or
was grossly negligent. In addition, each agreement provides that any disputes, as defined in those
agreements, arising out of or relating to the agreement or the provision of services pursuant thereto,
upon the demand of a party to the dispute, shall be subject to mandatory arbitration in accordance
with procedures provided in the agreement.

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Our Management Agreements with the Managed Private Real Estate Capital Clients

RMR LLC provides management services to our Managed Private Real Estate Capital clients for

which it receives, depending upon the services provided, a management fee based on a percentage of
average invested capital, as defined in the applicable management agreements, a property
management fee in an amount equal to 3.0% of rents collected from managed properties and a
construction supervision fee in an amount equal to 5.0% of the cost of any construction, renovation or
repair activities at the managed properties, other than ordinary maintenance and repairs.

Our Management Agreements with Advisory Clients

Tremont Realty Capital is party to a management agreement with SEVN. Pursuant to this

agreement, Tremont Realty Capital provides SEVN with a continuous investment program, makes day
to day investment decisions and generally manages the business affairs of SEVN in accordance with
SEVN’s investment objectives and policies.

Tremont Realty Capital is compensated pursuant to its management agreements with SEVN at an

annual rate of 1.5% of SEVN’s equity, as defined in the agreement. Tremont Realty Capital may also
earn an incentive fee under this management agreement beginning the second calendar quarter of 2021
equal to the difference between: (a) the product of (i) 20% and (ii) the difference between (A) SEVN’s
core earnings, as defined in the agreement, for the most recent 12 month period (or such lesser number
of completed calendar quarters, if applicable), including the calendar quarter (or part thereof) for
which the calculation of the incentive fee is being made, and (B) the product of (1) SEVN’s equity in
the most recent 12 month period (or such lesser number of completed calendar quarters, if applicable),
including the calendar quarter (or part thereof) for which the calculation of the incentive fee is being
made, and (2) 7% per year and (b) the sum of any incentive fees paid to Tremont Realty Capital with
respect to the first three calendar quarters of the most recent 12 month period (or such lesser number
of completed calendar quarters preceding the applicable period, if applicable). No incentive fee shall be
payable with respect to any calendar quarter unless core earnings for the 12 most recently completed
calendar quarters (or such lesser number of completed calendar quarters from January 5, 2021) in the
aggregate is greater than zero. The incentive fee may not be less than zero.

The initial term of the management agreement with SEVN ends on December 31, 2023, and the
agreement will automatically renew for successive one year terms beginning January 1, 2024 and each
January 1 thereafter, unless it is sooner terminated upon written notice delivered no later than 180 days
prior to a renewal date by the affirmative vote of at least two-thirds (2/3) of the independent trustees of
SEVN based upon a determination that (a) Tremont Realty Capital’s performance is unsatisfactory
and materially detrimental to SEVN or (b) the base management fee and incentive fee, taken as a whole,
payable to Tremont Realty Capital under the management agreement is not fair to SEVN (provided
that in the instance of (b), Tremont Realty Capital will be afforded the opportunity to renegotiate the base
management fee and incentive fee prior to termination). The management agreement may be
terminated by Tremont Realty Capital before each annual renewal upon written notice delivered to the
board of trustees of SEVN no later than 180 days prior to an annual renewal date.

In the event the management agreement is terminated by SEVN without a cause event or by
Tremont Realty Capital for a material breach, SEVN will be required to pay Tremont Realty Capital a
termination fee equal to (a) three times the sum of (i) the average annual base management fee and
(ii) the average annual incentive fee, in each case paid or payable to Tremont Realty Capital during the
24 month period immediately preceding the most recently completed calendar quarter prior to the
date of termination or, if such termination occurs within 24 months of its initial commencement, the
base management fee and the incentive fee will be annualized for such two year period based on such
fees earned by Tremont Realty Capital during such period, plus (b) $1.6 million. In addition, the initial
organizational costs related to TRMT’s formation and the costs of its initial public offering and the
concurrent private placement that Tremont Realty Capital had paid pursuant to its management
agreement with TRMT will be included in the “Termination Fee” under and as defined in SEVN’s
management agreement with Tremont Realty Capital. No termination fee will be payable if the
management agreement is terminated by SEVN for a cause event or by Tremont Realty Capital without
SEVN’s material breach.

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Tremont Realty Capital, and not SEVN, will be responsible for the costs of Tremont Realty
Capital’s employees who provide services to SEVN, including the cost of Tremont Realty Capital’s
personnel who originate SEVN’s loans, unless any such payment or reimbursement is specifically
approved by a majority of the independent trustees of SEVN or is a shared services cost or relates to
awards made under any equity compensation plan adopted by SEVN from time to time. SEVN is required
to pay or to reimburse Tremont Realty Capital and its affiliates for all other costs and expenses of
SEVN’s operations, including but not limited to, the costs of rent, utilities, office furniture, equipment,
machinery and other overhead type expenses, the costs of legal, accounting, auditing, tax planning and
tax return preparation, consulting services, diligence costs related to SEVN’s investments, investor
relations expenses and other professional services, and other costs and expenses not specifically
required under the management agreement to be borne by Tremont Realty Capital. Some of these
overhead, professional and other services will be provided by RMR LLC pursuant to a shared services
agreement between Tremont Realty Capital and RMR LLC. In addition, SEVN will also pay its pro rata
costs of any combined directors and officers liability or other insurance programs arranged by RMR
LLC for public companies managed by RMR LLC or its affiliates and SEVN’s pro rata portion of internal
audit costs incurred by RMR LLC on behalf of SEVN and other public companies to which RMR LLC
or its affiliates provides management services.

Our Organizational Structure

Our organizational structure has not materially changed since September 30, 2019. For a discussion
of our organizational structure, see Part I, Item 1 “Business—Our Organizational Structure” in our Annual
Report on Form 10-K for the fiscal year ended September 30, 2019.

Regulation

We and our clients are subject to supervision and regulation by state, federal and non-U.S.
governmental authorities and are subject to various laws and judicial and administrative decisions
imposing various requirements and restrictions upon the ways in which we and our clients do business
including various requirements for public disclosure of our and their activities.

The Managed REITs have qualified and expect to continue to qualify to be taxed as REITs under
Sections 856 through 860 of the Internal Revenue Code of 1986, as amended, or the Code. In addition,
the Managed Equity REITs generally distribute, and SEVN is expected to generally distribute, 100.0%
of their taxable income to avoid paying corporate federal income taxes; and as REITs, such companies
must currently distribute, at a minimum, an amount equal to 90.0% of their taxable income. REITs are
also subject to a number of organizational and operational requirements in order to elect and maintain
REIT status, including share ownership tests and assets and gross income composition tests. If a
Managed REIT fails to continue to qualify as a REIT under Sections 856 through 860 of the Code in
any taxable year, it will be subject to federal income tax (including any applicable alternative minimum
tax) on its taxable income at regular corporate tax rates. Even if a Managed REIT qualifies for taxation as
a REIT, it may be subject to state and local income taxes and to federal income tax and excise tax on
its undistributed income.

Certain of our clients own or operate healthcare and senior living properties. These companies

are subject to numerous federal, state and local laws and regulations that are subject to frequent and
material changes (sometimes applied retroactively) resulting from legislation, adoption of rules and
regulations and administrative and judicial interpretations of existing laws. Some of the revenues
received by these companies are paid by governmental programs which are also subject to periodic
and material changes.

Certain of our clients own and operate hotels and some provide dining, food and beverage

services, including the sale of alcoholic beverages. The operation of such properties is subject to
numerous regulations by various governmental entities.

TA is also required to comply with federal and state regulations regarding the storage and sale of

petroleum and natural gas products and franchising of petroleum retailers. In addition, as a result of
TA’s involvement in gaming operations, TA and certain of its subsidiaries are subject to gaming regulations

10

in Illinois, Louisiana, Montana, Nevada and Pennsylvania; and because SVC owns TA properties
where gaming occurs, SVC is also subject to gaming regulations in some of those jurisdictions.

Tremont Realty Capital is registered with the SEC as an investment adviser under the Investment

Advisers Act of 1940, as amended, or the Investment Advisers Act. Tremont Realty Capital provides
investment advisory and administrative services to mortgage REITs, including SEVN, and may, in the
future, provide such services to private funds that invest in commercial real estate debt. Employees of
Tremont Realty Capital may also act as transaction originators for its non-investment advisory clients,
which we refer to as the Tremont business. These activities result in certain aspects of our asset
management business being supervised by the SEC and requires our compliance with numerous
obligations, including record keeping requirements, operational procedures and disclosure obligations.
SEVN intends to conduct its business in a manner that does not require its registration under the 1940 Act
and, to do so, may rely on any available exemption from registration, or exclusion from the definition of
“investment company,” under the 1940 Act. To maintain this exemption from registration, SEVN will be
required to ensure the composition of its portfolio complies with certain tests.

The ownership and operation of real estate properties are subject to various federal, state and
local laws and regulations concerning the protection of the environment, including air and water quality,
hazardous or toxic substances and health and safety. Certain of our clients own real estate, and we
may be responsible for compliance with some of these environmental protection laws.

While we incur significant expense to comply with the various regulations to which we and our
clients are subject, we do not believe that existing statutes and regulations have had a material adverse
effect on our business. However, it is not possible to forecast the nature of future legislation, regulations,
judicial decisions, orders or interpretations, nor their impact upon our future business, financial
condition, results of operations or prospects.

Competition

The asset management industry is intensely competitive, and we expect it to remain so. Our
continued growth will depend upon our ability to manage or assist our clients in an effective manner
and identify and execute on opportunities to expand our services to new clients and new sources of
capital.

Our existing clients face significant competition in their respective sectors or industries. The
Managed Equity REITs compete on a national and regional basis with many third parties engaged in
real estate investment activities including other publicly traded REITs, non-traded REITs, commercial and
investment banking firms, private institutional funds, private equity funds and other investors. Five Star
competes with numerous other companies that provide senior living services, including home healthcare
companies and other real estate based service providers. Sonesta competes with other hotel operators
and franchisors. TA competes on a national and local basis with companies operating travel centers,
as well as retailers operating in the convenience store and retail gas station industries. SEVN competes
on a national and regional basis with a variety of institutional investors, including other REITs, specialty
finance companies, public and private funds (including funds or investors that we or our affiliates
may sponsor, advise or manage), banks, credit unions, insurance companies and other financial
institutions.

We compete with other businesses in the real estate management and asset management
businesses. Many of these competitors may have greater financial, technical, marketing and other
resources than we or our clients have. Such competitors may also enjoy significant competitive
advantages that result from, among other things, a lower cost of capital, greater business scale and
enhanced operating efficiencies. Certain competitors may also be subject to different regulatory regimes
or rules that may allow them more flexibility or better access to pursue potential investments and raise
capital for themselves or their managed companies. In addition, certain competitors may have higher risk
tolerance, different risk assessments or lower return thresholds, which could allow them to consider a
broader range of investments and to bid more aggressively for investment opportunities. Our ability and
the ability of our clients to continue to compete effectively will depend in large part upon the ability to
attract, retain and motivate employees.

11

Corporate Sustainability

Over our more than three decades in business, we and our clients have been guided by
Environmental, Social and Governance, or ESG, principles. Given the magnitude of our platform, we
believe corporate sustainability must be a strategic focus alongside our focus on economic performance.
Our sustainability practices—minimizing our impact on the environment, embracing the communities
where we operate and attracting top professionals—are critical elements supporting our long-term
success.

Environmental Focus

We recognize our responsibility to minimize the impact of our business on the environment. We
seek to preserve natural resources and maximize efficiencies in order to reduce the impact the properties
we manage have on the planet. Our environmental sustainability strategies and best practices help to
mitigate our managed properties’ environmental footprint, optimize operational efficiency and enhance
our competitiveness in the marketplace. Certifications help to benchmark performance and mitigate
risk.

We drive value, manage risk and benchmark performance of our managed properties by effectively

capturing and managing data through real-time energy monitoring, or RTM. RTM facilitates advanced
data analytics and access to detect faults and inefficiencies in equipment operations faster meanwhile
enhancing building system control in a cost-effective and scalable way across platforms for our
clients. Our first RTM program finished one year ahead of schedule, captured 53 properties totaling
approximately 46% of our managed annual electricity spend and generated $2.1 million in annual
savings. We continue to expand our RTM program and expect to cost effectively scale to cover up to 90%
of our managed energy spend.

Our energy performance programs drive down energy consumption and reduce carbon emissions
of our managed properties. Lower energy use and emissions reduce our managed properties’ potential
exposure to policies that call for a carbon tax or other emissions-based penalties. Our existing business
practices align with the Task Force on Climate-related Financial Disclosures, or TCFD, framework across
both physical and transition risks and opportunities.

As a result of our sustainability initiatives, we and our managed properties have historically
received honors from The Building Owners and Managers Association, or BOMA, The Environmental
Protection Agency, or EPA, and the U.S. Green Building Council, or USGBC, amongst others. In 2020, the
honors achieved by our Managed Equity REITs, included 53 BOMA 360 Certified Properties, 63
ENERGY STAR Certified Properties and 33 LEED Certified Properties. Finally, for the third year in a
row, we received the 2021 ENERGY STAR Partner of the Year Award for outstanding efforts as a Service
and Product Provider, and for the fourth year in a row, OPI received the 2021 ENERGY STAR Partner
of the Year Sustained Excellence Award for outstanding efforts in energy management.

Human Capital Resources and Governance

We are led by an experienced management team with proven ability to manage and grow a
resilient business. Moreover, significant insider ownership and the structure of the contracts with our
clients provide a strong alignment of interests with our clients and with public shareholders. Our dedicated
asset management and property management teams blend long-term strategic vision with careful
execution of day-to-day operations to optimize efficiency and foster the sustainable growth of our
Managed Equity REITs. Our property management organization is dedicated solely to the assets of our
clients.

Employees and Equal Opportunity

As of September 30, 2021, RMR LLC employed approximately 600 real estate professionals,
including 46% in our corporate office and 54% across our more than 30 offices throughout the United
States. The average tenure of our employees was 6.3 years. Our employees are the foundation of our

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success and in many ways our most critical asset. We ensure employees receive competitive salaries
and benefits and we aim to attract professionals who will uphold our values of social and environmental
stewardship.

We are an equal opportunity employer, with all qualified applicants receiving consideration for
employment without regard to race, color, religion, sex, sexual orientation, gender identity, national
origin, disability or protected veteran status. Throughout our organization, including our Board, we are
committed to racial equality and fostering a culture of diversity and inclusion. We have made diversity and
inclusion an important part of our hiring, retention and development programs. As of September 30,
2021, 37% and 27% of our approximately 600 employees were female and non-white, respectively.

Board Diversity

As of September 30, 2021, our Board of Directors composition included 50% of members from

under represented communities, including 33% female and 17% African American.

Employee Engagement, Education and Training

Our employee engagement initiatives align with our goal of being an employer of choice with a

thriving workforce that encourages career enrichment and positions us for growth. Our programs are
carefully designed for hiring, developing and retaining the best talent in the real estate industry. Our
recruiting programs, on-boarding and retention programs and our development and on-going training
programs currently include the following:

• LiveWell Employee Wellness Program: Our LiveWell program has steadily gained traction since

it was launched in 2016 with the goal of providing resources and incentives to enhance employees’
physical, emotional and financial wellness. LiveWell includes a range of educational presentations,
webinar series and wellness competitions.

• Managing with Impact: Since 2016, we hosted Managing with Impact workshops for managers
throughout the company to expand their perspectives and increase their confidence as a new
manager. Within their first year, managers complete the workshop and learn how to effectively
delegate, solve problems and give meaningful performance feedback.

• Tuition Reimbursement Program: We offer tuition assistance up to $20,000 annually for work-

related education from accredited colleges and universities in order to deepen employees’ skillsets
and support personal enrichment.

• Leadership Development Program: This two-year rotational program prepares newly hired MBA

graduates for future leadership roles by providing an expansive view into all our clients.

We also prioritize on-going education and training for all employees across our organization as

follows:

• Engineering Development Program: Given the increasing challenges within the real estate

industry of attracting qualified engineers throughout the country, we made it a strategic focus to
develop the next generation of qualified building engineers. Our Engineering Development
Program standardizes the recruitment and development of engineering candidates to prepare
them for open positions and to plan for future engineering needs. We recruit from various trade
schools and job fairs to identify candidates for the two-year program with a curriculum that includes
specific onboarding plans for training in electrical, HVAC, or plumbing trades and covers a
range of essential engineering staff development topics.

• Industry Associations & Credentials: In order to further their professional development, many of
our employees seek out credentials and association memberships, with any membership costs
reimbursed by us. Examples of credentials and association memberships include: Building
Owners and Managers Association Membership and Event Participation, Certified Property
Manager, Certified Public Accountant and National Association of Industrial and Office Properties.

The success of our employee programs earned us the Real Estate Management Excellence Award

for Employee and Leadership Development from the Institute of Real Estate Management in 2019.

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Internet Website

Our internet website address is www.rmrgroup.com. We make available, free of charge, through
the “Investors & Media” section of our website, our Annual Reports on Form 10-K, Quarterly Reports
on Form 10-Q, Current Reports on Form 8-K and amendments to these reports filed or furnished pursuant
to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, or the Exchange Act,
as soon as reasonably practicable after these forms are filed with, or furnished to, the SEC. Any material
we file with or furnish to the SEC is also maintained on the SEC website (sec.gov).

The information on or accessible through our website is not incorporated by reference into this
Annual Report on Form 10-K or other documents we file with, or furnish to, the SEC. We intend to use
our website as a means of disclosing material non-public information and for complying with our
disclosure obligations under Regulation FD. Such disclosures will be included on our website in the
“Investors & Media” section. Accordingly, investors should monitor such portions of our website, in
addition to following our press releases, SEC filings and public conference calls and webcasts.

Item 1A. Risk Factors

Summary of Risk Factors

Our business is subject to a number of risks and uncertainties. The following is a summary of the

principal risk factors described in this section:

• the duration and severity of the impact of COVID-19 and the resulting disruption on us and our

clients;

• changing market conditions, practices and trends may adversely impact our clients and the fees

we receive from them;

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

• our management fees from our clients are based, in general, on cost of assets, market
capitalization, shareholder returns, rent receipts, capital projects or certain revenues, as
applicable, and, accordingly our future revenues, income and cash flows will decline if the
business activities, assets, market capitalizations, shareholder returns, rent receipts, capital
projects or certain revenues of our clients decline;

• our revenues may be highly variable;

• potential terminations of our management agreements with our clients;

• our ability to expand our business depends upon the growth and performance of our clients and

our ability to obtain or create new clients for our business and is often dependent upon
circumstances beyond our control;

• our ability to continue to pay a regular quarterly dividend is dependent on many factors, including

current and expected earnings and alternative uses for available cash and our board may
decide to lower our dividends;

• our and our Managed Operating Companies’ ability to attract, retain and motivate sufficient

qualified personnel in a challenging labor market and to effectively manage our and their labor
costs;

• our ability to retain the services of our controlling shareholder and other key and talented

personnel;

• our and our clients’ risks associated with our and their costs of compliance with laws and

regulations, including securities regulations, exchange listing standards and other laws and
regulations affecting public companies;

• third party expectations relating to ESG factors may impose additional costs and expose us and

our clients to new risks;

• risks related to the security of our information technology;

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• risks related to supply chain constraints, commodity pricing and other inflation, including inflation

impacting wages and employee benefits;

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

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

and

• risks related to our Class A Common Shares, including our dual class capital structure.

Prospective investors should carefully consider the risks described in this section, together with all
of the other information in this Annual Report on Form 10-K. These risks may not be the only risks we
face but are risks we believe may be material at this time. Additional risks and uncertainties that we do not
yet know of, or that we currently think are immaterial, may also impair our business operations or
financial results. If any of the events or circumstances described in this section occur, our business,
financial condition or results of operations and the trading price of our securities could decline. Investors
and prospective investors should consider these risks, the information contained under the heading
“Warning Concerning Forward-Looking Statements” and the risks described elsewhere in this Annual
Report on Form 10-K before deciding whether to invest in our securities. We may update these risk
factors in our future periodic reports.

Risks Related to Our Business

The duration of the COVID-19 pandemic and the extent of its continued and ultimate impact on
the economy and public health is unknown, but it may have a long term negative affect on us and
our clients.

The strain of coronavirus that causes the viral disease known as COVID-19 has been declared a

pandemic by the World Health Organization, and the U.S. Health and Human Services Secretary
declared a public health emergency in the United States in response to the outbreak. The COVID-19
pandemic has had a substantial adverse impact on the global economy, including the U.S. economy,
during various stages of the pandemic. Government requirements to stay in place and temporarily close
businesses had a substantial negative impact on the economy. Government spending during the
pandemic, and subsequent easing of the government restrictions, has since helped avert extended
negative economic impact to the economy and is believed to have helped foster a return to economic
growth. However, the progression of the pandemic has been unpredictable with periods of high rates of
infection, followed by periods of reduced infection rates later followed again by periods of high infection
rates. Recently, the Delta variant of COVID-19 spread in the United States during the 2021
summer months and has begun to wane. This spike is attributed with causing a reduction in the level of
economic growth that had been expected. Any future variants of COVID-19 could have similar or
worse impacts on the economy and public health.

The COVID-19 pandemic has had particularly negative impacts on certain industries in the
commercial real estate market, including hotels, senior living communities, rehabilitation services and
certain retail businesses, such as movie theaters and fitness centers. Certain of our clients operate in
those industries and they and their businesses and operating results have been substantially negatively
impacted. These clients experienced decreases in their market capitalizations during the pandemic,
which decreased our management fee revenues. Although their market capitalizations have generally
improved or stabilized from their low points during the pandemic, they are below the levels experienced
prior to the pandemic, and they may remain so for an indefinite period and they could decline.

Although we have experienced increases in the fees we earn from our clients since the low points

during the pandemic, there can be no assurance that the COVID-19 pandemic will not continue to
negatively impact our clients and reduce the fees that we earn from our clients in future periods.

Potential consequences of the unprecedented measures taken in response to the spread of the
virus that causes COVID-19 and the potential reintroduction of such measures in light of the spread of
the Delta variant and other COVID-19 related variants and market disruptions and volatility affecting
us include, but are not limited to:

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• sudden and/or severe declines in the market price of our and our clients’ common shares;

• the inability of our clients 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 clients to access debt and equity capital on attractive terms, or at all;

• downgrades of our clients’ credit ratings by nationally recognized credit rating agencies;

• the inability of our clients to reduce leverage through the sale of identified properties in

accordance with targets;

• the inability of borrowers under SEVN’s loans to timely pay interest and principal under their

respective loans;

• continued or new state, local and federal industry-initiated tenant relief efforts that may adversely

affect some clients’ ability to collect rent and/or enforce remedies for the failure to pay rent;

• the inability of our clients to maintain or increase their current distribution rate, or make any

distributions to their shareholders;

• uncertain economic and financial market conditions that could significantly reduce the value of
the real estate, loans and other investments of our clients and reduce the amounts earned on
those investments;

• increased risk of our clients’ and their tenants’ and managers’ default or bankruptcy;

• increased risk of our clients’ 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 clients’ tenants’ and managers’ ability to pay rent and returns to our
clients;

• reduction in our property management fees if our clients reduce or delay capital expenditures in
order to conserve capital or because of a reintroduction of construction moratoriums issued
by governments;

• our and our clients’ and their tenants’ and managers’ inability to operate our, our clients’ and our
and their tenants’ businesses if the health, well-being or morale of our and their management
personnel and other employees is adversely affected by the ongoing COVID-19 pandemic or
otherwise, particularly if a significant number of individuals are impacted; and

• reduced economic demand resulting from any mass employee layoffs or furloughs in response

to future governmental action that may be taken to slow the spread of COVID-19 and its variants,
and reductions in spending and other business operations and initiatives in response to the
COVID-19 pandemic and other economic conditions, which could impact our and our clients’
and their tenants’ and managers’ continued viability.

There remains uncertainty as to the ultimate duration and severity of the COVID-19 pandemic,
including risks that may arise from the Delta variant and other COVID-19 related variants, the ability to
successfully administer vaccinations to a sufficient number of persons or attain immunity to the virus by
natural or other means to achieve herd immunity, the ability of vaccinations to prevent infection and
the spread of COVID-19, and the impact on the U.S. economy that may result from the inability of other
countries to administer vaccinations to their citizens or their citizens’ ability to otherwise achieve
immunity to the virus. A continued, long-duration and severe COVID-19 pandemic would likely materially
and adversely affect us and our clients.

Market, consumer and workplace practices may change indefinitely in response to the COVID-19
pandemic and those changes could be detrimental to us and our clients’ businesses.

Market, consumer and workplace practices have changed during the pendency of the COVID-19

pandemic in response to temporary closures of businesses, governmental stay in place orders and the
proliferation of remote working. For example, the increased adoption of and familiarity with remote
work practices could result in decreased demand for business travel, hotel stays, conference facilities,

16

office space, diesel fuel and gasoline. In addition, consumer practices and demands may change from
what they were prior to the onset of the COVID-19 pandemic, including avoiding activities where people
congregate, such as hotels, restaurants and fitness centers. Further, despite the continued distribution
of the COVID-19 vaccines, as a result of the ongoing effects of the COVID-19 pandemic, there is a
possibility of continued or increased occupancy declines at senior living communities, due to the
surge of the Delta variant or other COVID-19 related variants, current residents leaving senior living
communities, restrictions on new residents moving into and/or touring senior living communities and the
possibility that older adults will forego or delay moving into senior living communities because of
perceived safety issues associated with the COVID-19 pandemic. To the extent these changes occur
on a long term basis, our clients’ businesses, operating results, financial condition and prospects may be
materially adversely impacted, which may result in our realizing decreased fees from our clients and
declines in our operating results and financial condition.

Substantially all of our revenues are derived from our provision of management services to a
limited number of companies. The loss or failure, or decline in business or assets, of any of the
Managed Equity REITs could substantially reduce our revenues.

The fees we earn from providing management services to, and the reimbursable fees we receive

from, the Managed Equity REITs comprise substantially all our revenues. Our operating results and our
ability to maintain and grow our revenues depend upon the ability of our Managed Equity REITs to
raise capital to invest in real estate assets, to maintain and grow their investments and market
capitalizations and to achieve positive shareholder returns in excess of applicable REIT total shareholder
return indexes. Reduced business activities, market capitalizations or shareholder returns, including
such reductions caused by, or in response to, the COVID-19 pandemic and its aftermath, sales of assets
or the failure of any of the Managed Equity REITs or the termination of their management agreements
with us would materially reduce our revenues and our profitability.

Our revenues may be highly variable.

RMR LLC’s business management agreement with each Managed Equity REIT provides for a

base business management fee that is based on the lower of the average historical costs of the
Managed Equity REIT’s assets under management or its average market capitalization, as calculated
in accordance with the applicable business management agreement, and an incentive business
management fee that is based on the Managed Equity REIT’s relative outperformance of a specified
REIT total shareholder return index. The management fees we earn under these agreements are highly
variable.

The base business management fee payable by a Managed Equity REIT may increase or decrease

materially as the Managed Equity REIT acquires or disposes of real estate assets or its market
capitalization increases or decreases. In addition, we generally only earn an incentive business
management fee under our business management agreement with a Managed Equity REIT if it
outperforms an identified REIT total shareholder return index during the measurement period and certain
other conditions are satisfied, as measured at the end of the applicable measurement period. The
shareholder returns realized by a Managed Equity REIT, its market capitalization and its ability to raise
capital or make investments may be impacted by trends in the Managed Equity REIT’s portfolio, the U.S.
real estate industry generally, the Managed Equity REIT’s industry specifically or other factors that are
outside of our or its control, including the continued effects of the COVID-19 pandemic. Whether we earn
an incentive fee, and the amount of any incentive fee we may earn, may have a significant impact on
the amount of revenues we earn. For example, in the fiscal years ended September 30, 2021, 2020 and
2019, incentive business management fees earned from the Managed Equity REITs were 0%, 0% and
39.9%, respectively, of our total management and advisory services revenues. Further, the fees we earn
under our property management agreements with the Managed Equity REITs are based on
a percentage of the rents our Managed Equity REITs receive and a percentage of the costs of
construction, in each case, at properties we manage for them. To the extent the Managed Equity REITs
receive reduced rent or incur lower construction costs, our property management fee revenues would
be negatively impacted. Also, the fees under our management agreements with the Managed Operating
Companies are based on a percentage of revenues (in the case of TA, gross fuel margin and nonfuel

17

revenues) earned by them or generated at the properties they manage. Our Managed Operating
Companies have experienced high revenue volatility in the past, and given the nature of the Managed
Operating Companies’ businesses (i.e., travel centers, senior living communities and hotels), may
continue to experience revenue volatility for the reasonably foreseeable future.

Our management agreements with our clients are subject to termination.

Our management agreements with our clients may be terminated by a client or by us in certain
circumstances. For example, if we do not satisfy the applicable measures for calendar year 2021 under
our management agreements with DHC or SVC, DHC or SVC, as applicable, will have the right to
terminate its management agreement by prior written notice to us within 60 days following December 31,
2021, and in which case, it would be required to pay us the applicable termination fee. If any of our
management or advisory agreements with a client is terminated, we may be unable to replace the lost
revenue. Even if we receive a termination fee upon the termination of a management agreement with a
client, we may be unable to invest the after tax proceeds from the termination fee we receive in
opportunities that earn returns equal to or greater than the revenues lost as a result of the terminated
management agreement. The termination of our management agreement or advisory agreement with
any of our clients could have a material adverse impact on our business, results of operations and
financial condition.

We are significantly dependent on conditions in the commercial real estate industry.

Our business and operations are significantly dependent on conditions in the commercial real
estate industry, which in turn is impacted by general economic conditions in the United States. Significant
portions of the commercial real estate markets in the United States were significantly negatively
impacted during the recession that occurred during the early stages of the COVID-19 pandemic, and
certain aspects of that market continue to be challenged by the pandemic and the changes to market and
workplace practices in response to the pandemic, such as remote work for many office based workers,
reduced hotel occupancy and declines in senior living communities’ operations. Adverse conditions
in the commercial real estate industry and declining real estate values would harm our business and
financial condition by limiting our and our clients’ access to debt and equity capital and our and their ability
to grow our and their businesses. Adverse conditions may also give rise to an increase in tenant
defaults under our clients’ leases, defaults of SEVN’s loans, and decreased market capitalizations,
shareholder returns, rent receipts and capital projects for the Managed Equity REITs.

Changes in market interest rates may significantly reduce our revenues or impede our growth.

Changes in market interest rates may be sudden and may significantly reduce our revenues or

impede our growth. Interest rates have remained at relatively low levels on a historical basis, and the
U.S. Federal Reserve had previously indicated that it did not expect to raise interest rates in response to
the COVID-19 pandemic and current market conditions until at least the end of 2023. However, the
Federal Reserve has recently indicated that, in light of the economic recovery and higher than anticipated
inflation, it may raise interest rates sooner than expected. The timing, number and amount of any
future interest rate increases are uncertain.

Increases in market interest rates may materially and negatively affect us. One of the factors that

investors typically consider important in deciding whether to buy or sell the common shares of our
Managed REITs is the distribution rate with respect to such shares relative to prevailing market interest
rates. If market interest rates go up, investors may expect a higher distribution rate before investing in
a Managed REIT or they may sell the Managed REITs’ common shares and seek alternate investments
with a higher distribution rate. Sales of common shares of the Managed Equity REITs may cause a
decline in the market prices of such shares, which reduces the market capitalizations and total
shareholder returns of the Managed Equity REITs, which, in turn, may materially reduce the fees we
earn under our business management agreements with them. Moreover, an increase in interest rates
could raise borrowing costs for our clients, negatively impact their access to capital to fund future growth,
reduce their earnings and total shareholder returns and cause SEVN’s borrowers to default, which
may materially reduce the fees we earn under our business management agreements with our clients.

18

Low market interest rates, particularly if they remain over a sustained period, may result in

increased use of debt capital to fund property acquisitions, lower capitalization rates for property
purchases and increased competition for property purchases, which may reduce the amount of property
acquisitions by our clients and, in turn, impede our ability to grow and realize increased management
fees from our clients.

If we cannot retain and motivate our key and talented personnel and recruit, retain and motivate
new talented personnel, our business, results and financial condition could be adversely
affected.

Our people are the foundation of our success and in many ways our most critical asset. Our
continued success depends to a great extent on our ability to retain and motivate our key and talented
personnel and strategically recruit, retain and motivate new talented personnel. However, we may not be
successful in these efforts as the market for qualified employees in the asset management industry is
extremely competitive. Historically, we have not had employment agreements with our key employees
and we have no present intention to enter into any. Our ability to recruit, retain and motivate our
personnel is dependent on our ability to offer attractive compensation, opportunities for professional
growth and a desirable work environment. In addition, our clients have historically granted equity awards
to our officers and certain other employees of ours. If our clients reduce the amount of, or stop
making, similar grants in the future, or if the value of any equity awards they may grant are lower than
anticipated, we may need to increase the amount of compensation we pay to offset the reduction in
compensation our officers and other applicable employees would otherwise receive. In order to recruit
and retain existing and future personnel, we may need to increase the level of compensation that we pay
to them, which may cause a higher amount of our revenue to be paid out in the form of compensation,
which may have an adverse impact on our profits.

We depend on our controlling shareholder and other key and talented personnel.

We depend on the efforts, skills, reputations and business contacts of our controlling shareholder,

Adam D. Portnoy, and other key and talented personnel. The extent and nature of the experience of
our executive officers and of the relationships they have with real estate professionals and financial
institutions, although not a guarantee of positive results, are critical to the success of our business. The
loss of the services of any of them or the loss of investor confidence in such personnel could have a
material adverse effect on our revenues, operating income and cash flows and could impair our ability to
maintain or grow assets under management in our clients or otherwise maintain or grow our business.

We are subject to substantial regulation and numerous contractual obligations and internal
policies, and failure to comply with these provisions could have a material adverse effect on our
business, financial condition and results of operations.

We are subject to substantial regulation and numerous contractual obligations and internal
policies. We are subject to regulation by the SEC, Nasdaq, and other federal, state and local or
international governmental bodies and agencies or self-regulatory organizations. Our subsidiary,
Tremont Realty Capital, is registered with the SEC as an investment adviser under the Investment
Advisers Act. The Investment Advisers Act requires registered investment advisers to comply with
numerous obligations, including compliance, record keeping, operating and marketing requirements,
disclosure obligations and limitations on certain activities. Investment advisers also may owe fiduciary
duties to certain of their clients.

We are also responsible for managing or assisting with the regulatory aspects of certain of our
clients, including the Managed REITs’ compliance with applicable REIT rules and SEVN’s maintenance
of its exemption from registration under the 1940 Act. The level of regulation and supervision to
which we and our clients are subject varies from jurisdiction to jurisdiction and is based on the type of
business activity involved. For example, we and SEVN may also be subject to state licensing requirements
to conduct lending activities. The regulations to which we and our clients are subject are extensive,
complex and require substantial management time and attention. Regulatory oversight and enforcement
may become more rigorous for regulated industries as a result of the impact of the COVID-19 pandemic,

19

especially in the wake of the array of state and federal government financial assistance programs.
Laws and regulations passed in connection with the ongoing COVID-19 pandemic may result in a more
complex regulatory, tax and political environment, which could subject us to increased compliance
costs and administrative burdens. COVID-19 related laws and regulations can be subject to rapid change
depending on public health developments, which can lead to confusion and make compliance with
laws uncertain. Further, in connection with the Biden administration, uncertainty has arisen regarding
prospective changes in laws and regulations affecting the financial industry, including the possibility of
significant revision to U.S. financial and tax laws, rules and regulations that could have an adverse impact
on us and our clients. These regulatory and fiduciary obligations may result in increased costs or
otherwise adversely impact our business. Our or our clients’ failure to comply with any of the regulations,
contractual obligations or policies applicable to it may subject us to litigation, extensive investigations,
enforcement actions, as well as substantial fines, penalties and reputational risk, and our business and
operations could be materially adversely affected.

Our lack of compliance with applicable law could result in, among other things, our inability to
enforce contracts, our default under contracts (including our management agreements or advisory
agreements with our clients) and our ineligibility to contract with, and receive revenue from, governmental
authorities and agencies, our clients or other third parties.

We have numerous contractual obligations with which we must comply on a continuous basis to
operate our business, the default of which could have a material adverse effect on our business and
financial condition. We have established internal policies designed to ensure that we manage our business
in accordance with applicable law and regulation and in accordance with our contractual obligations.
These internal policies may not be effective in all regards; and, if we fail to comply with our internal
policies, we could be subjected to additional risk and liability.

Third party expectations relating to ESG factors may impose additional costs and expose us
and our clients to new risks.

There is an increasing focus from certain investors and certain of our clients’ tenants, managers,

borrowers, customers, employees, and other stakeholders concerning corporate responsibility, specifically
related to ESG factors. Some investors may use these factors to guide their investment strategies
and, in some cases, may choose not to invest in us or our clients, or otherwise do business with us or
our clients, if they believe our or their policies relating to corporate responsibility are inadequate. Third
party providers of corporate responsibility ratings and reports on companies have increased in
number, resulting in varied and in some cases inconsistent standards. In addition, the criteria by which
companies’ corporate responsibility practices are assessed are evolving, which could result in greater
expectations of us and our clients and cause us and our clients to undertake costly initiatives to
satisfy such new criteria. Alternatively, if we or our clients elect not to or are unable to satisfy such new
criteria or do not meet the criteria of a specific third party provider, some investors may conclude that
our or their policies with respect to corporate responsibility are inadequate. We and our clients may face
reputational damage in the event that our or their corporate responsibility procedures or standards do
not meet the standards set by various constituencies. If we and our clients fail to satisfy the expectations
of investors and our clients’ tenants, managers, borrowers, customers, employees and other
stakeholders or our or our clients’ initiatives are not executed as planned, our and our clients’ reputation
and financial results could be adversely affected, the management fees we may earn from our clients
may decline, and our revenues, results of operations and ability to grow our business may be negatively
impacted.

We and our clients are subject to risks from adverse weather, natural disasters and climate
events.

We and our clients are subject to risks and could be exposed to additional costs from adverse
weather, natural disasters and climate events. For example, the properties owned by our Managed
Equity REITs could be severely damaged or destroyed by physical climate risks that could materialize
as either singular extreme weather events (for example floods, storms and wildfires) or through long-term
impacts of climatic conditions (such as precipitation frequency, weather instability and rise of sea

20

levels). Such events could also adversely impact our other clients and cause significant losses if such
clients or their tenants, managers or borrowers are unable to operate their businesses due to damage
resulting from such events. If we or our clients fail to adequately prepare for such events, our and our
clients’ revenues, results of operations and financial condition may be impacted.

We rely on information technology and systems in our operations, and any material failure,
inadequacy, interruption or security breach of that technology or those systems could materially
harm our business.

We rely on information technology and systems, including the Internet and cloud-based

infrastructures, commercially available software and our internally developed applications, to process,
transmit, store and safeguard information and to manage or support a variety of our business processes,
including financial transactions and maintenance of records, which may include personal identifying
information of employees, tenants, borrowers and guarantors and lease data. If we experience material
failures, inadequacies or interruptions or security breaches of our information technology, we could
incur material costs and losses. Further, third party vendors could experience similar events with respect
to their information technology and systems that impact the products and services they provide to us
or our clients. We rely on commercially available systems, software, tools and monitoring, as well as our
internally developed applications and internal procedures and personnel, to provide security for
processing, transmitting, storing and safeguarding confidential tenant, customer, borrower, guarantor
and vendor information, such as personally identifiable information related to our employees and others
and information regarding our and our clients’ financial accounts. We take various actions, and we
incur significant costs, to maintain and protect the operation and security of our information technology
and systems, including the data maintained in those systems. However, it is possible that these
measures will not prevent the systems’ improper functioning or a compromise in security, such as in the
event of a cyberattack or the improper disclosure of personally identifiable information. Security
breaches, computer viruses, attacks by hackers, online fraud schemes and similar breaches can create
significant system disruptions, shutdowns, fraudulent transfer of assets or unauthorized disclosure of
confidential information. The risk of a security breach or disruption, particularly through cyberattack or
cyber intrusion, including by computer hackers, foreign governments and cyber terrorists, has generally
increased as the number, intensity and sophistication of attempted attacks and intrusions from around
the world have increased.

The cybersecurity risks to us, our clients and third party vendors are heightened by, among other
things, the evolving nature of the threats faced, advances in computer capabilities, new discoveries in
the field of cryptography and new and increasingly sophisticated methods used to perpetrate illegal or
fraudulent activities against us, including cyberattacks, email or wire fraud and other attacks exploiting
security vulnerabilities in our or other third parties’ information technology networks and systems or
operations. The COVID-19 pandemic may adversely impact our ability to maintain the security, proper
function and availability of our information technology and systems since a continued period of remote
working by our employees or individuals with whom we work outside of our organization could strain
our technology resources and introduce operational risk, including heightened cybersecurity risk. Remote
working environments may be less secure and more susceptible to hacking attacks, including phishing
and social engineering attempts that seek to exploit the COVID-19 pandemic. Although most of our
office-based employees and those of our clients have returned to the office, the ongoing transition to in
person work arrangements, or any return to remote work in light of the resurgence of the COVID-19
pandemic may result in the continuation of many of the risks of offsite work arrangements. In addition,
our data security, data privacy, investor reporting and business continuity processes could be impacted
by a third party’s inability to perform due to the COVID-19 pandemic or by the failure of, or attack on, their
information systems and technology. Any failure to maintain the security, proper function and availability
of our information technology and systems, or certain third party vendors’ failure to similarly protect
their information technology and systems that are relevant to our or our clients’ operations, or to
safeguard our or our clients’ business processes, assets and information could result in financial losses,
interrupt our operations, damage our reputation, cause us to be in default of material contracts and
subject us to liability claims or regulatory penalties, any of which could materially and adversely affect
us.

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Supply chain constraints and commodity pricing and other inflation, including inflation impacting
wages and employee benefits, may negatively impact our clients and our business, results of
operations and ability to grow.

The global economy has been experiencing supply chain constraints and commodity pricing and

other inflation, including inflation impacting wages and employee benefits. These conditions have
increased the costs for materials, other goods and labor. For example, various construction supplies
and materials have experienced significant price increases as have other commodities, such as food and
fuel. These pricing increases as well as increases in labor costs have increased the operating costs
for certain of our clients. If these inflationary pressures continue, our clients may reduce or delay
construction projects that we oversee and may realize decreased earnings, negative impacts on their
ability to increase or maintain dividends that they pay to their shareholders and reduced market
capitalizations. In that case, the management fees we earn may decline and our revenues, results of
operations and ability to grow our business may be negatively impacted.

Employee misconduct could harm us by subjecting us to significant legal liability, reputational
harm and loss of business.

As an asset manager, our business, and our ability to retain and attract new clients, is dependent
upon our maintaining a positive reputation in the marketplace. There is a risk that our employees could
engage in misconduct that adversely affects our reputation and, hence, our business. We are subject
to a number of obligations and standards arising from our business and our authority over the companies
and assets we manage. The violation of these obligations and standards by any of our employees
may adversely affect our clients and us. Our business often requires that we deal with confidential
matters of great significance to our clients. If our employees improperly use or disclose confidential
information, we and the concerned client could suffer serious harm to our and its reputation, financial
position and current and future business relationships and face potentially significant litigation. It is not
always possible to detect or deter employee misconduct, and the precautions we take to detect and
prevent this activity may not be effective in all cases. If any of our employees were to engage in or be
accused of misconduct, our business and our reputation could be adversely affected. Misconduct by an
employee might rise to the level of a default that would permit a client to terminate its management
agreements or advisory agreements with us for cause and without paying a termination fee, which could
materially adversely affect our business, results of operations and financial condition.

RMR LLC’s required quarterly tax distributions may limit our ability to implement our business
or pursue growth opportunities.

Under the RMR LLC operating agreement, RMR LLC is required to make certain pro rata

distributions to each member of RMR LLC, including RMR Inc., quarterly on the basis of the assumed
tax liabilities of the members. From time to time, RMR LLC’s cash flows from operations may be
insufficient to enable it to make required minimum tax distributions to its members. RMR LLC may have
to borrow funds or sell assets to fund its distribution requirements, and thereby materially adversely
affect our liquidity and financial condition. Further, by making cash distributions rather than investing that
cash in our businesses, we might risk slowing the pace of our growth, or not having a sufficient
amount of cash to fund our operations, new investments or unanticipated capital expenditures, should
the need arise. In such event, we may not be able to implement our business and growth strategy to the
extent intended.

Risks Related to the Businesses of Our Clients

Risks associated with our clients’ businesses could adversely affect their respective abilities to
grow, generate revenue, increase their market capitalizations and pay management fees.

We have presented in this Annual Report on Form 10-K historical fees that we have earned from

our clients. The historical fees earned from our clients, including those presented in this Annual Report
on Form 10-K, should not be considered as indicative of the future results of our clients or of our
future results. The risks associated with each client’s business could adversely affect its ability to carry

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out its business plans and objectives, and, as a result, could adversely impact its ability to pay us
management or advisory fees or cause the amounts of those fees to decline. For more information see
“Management’s Discussion and Analysis of Financial Condition and Results of Operations-Overview.”
Risks to our clients include, but are not limited to, the following:

• the duration and severity of the negative economic impact of COVID-19 and the resulting

market disruption on certain industries in which our clients operate, especially on hospitality,
travel, service retail, senior housing and rehabilitation services;

• the inability of our clients’ tenants, managers and borrowers to weather an extended cessation

of normal economic activity caused by the COVID-19 pandemic and thereby impair their ability to
pay rent and returns and make loan payments;

• the Managed Equity REITs face competition for tenants at substantially all of their properties

and competing properties may be more attractive to tenants;

• our clients face significant competition for investment opportunities from other investors, some of

which have greater financial resources, including publicly traded REITs, non-traded REITs,
insurance companies, banking firms, private institutional funds, private equity funds and other
investors;

• a sustained period of low interest rates may increase the amount of debt capital available,

which may result in declining capitalization rates for property acquisitions and impede the growth
of our clients’ businesses whereas rising interest rates may increase operating costs, reduce
the value of properties, increase cost of capital and make raising capital difficult for our clients;

• changing general economic and financial market conditions, including any reversal of the

economic recovery or future economic slowdown caused by the COVID-19 pandemic, could
significantly reduce the value of the real estate, loans and other investments of our clients and
reduce the amounts earned on those investments;

• the real estate and real estate related investments of our clients may be less liquid than other
investments and the ability of our clients to adjust their portfolios in response to changes in
economic or other conditions may be limited;

• our Managed Operating Companies’ ability to attract, retain and motivate sufficient qualified

personnel in a challenging labor market and to effectively manage their labor costs;

• changes in investor preferences or market conditions, including any future adverse conditions

caused by the COVID-19 pandemic, could limit our clients’ ability to raise capital to competitively
maintain their properties and operations or make new investments;

• shareholder activism, complaints about management strategies and structures, corporate
governance and other matters may divert management attention and be disruptive to the
operation of our clients;

• third party expectations relating to ESG factors could impose additional costs and expose our

clients to new risks;

• changes in tax laws, regulation or accounting rules may make certain types of investments in or

by our clients less valuable;

• our clients are exposed to environmental, building and other laws, natural disasters, adverse
impacts from global climate change and other factors beyond their control as a result of their
investment in real estate;

• our clients have significant investments in certain types of assets, such as hotels, senior living

communities, healthcare properties and travel centers, and market changes which impact these
specific types of assets (e.g., continued depressed levels of business travel and occupancy at
hotels and senior living communities as a result of, and market reaction to, the COVID-19 pandemic,
tenant and customer trends, new competition for short term accommodations, changes in
Medicare and Medicaid rates, and other regulatory matters, fuel price volatility, fuel efficiency

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improvements and alternative energy sourcing) may adversely impact certain of the clients’
ability to maintain or grow their business;

• the failure of a Managed REIT to continue to qualify as a REIT would subject it to U.S. federal

income tax and reduce cash available for distributions to its shareholders, adversely impacting its
ability to raise capital and operate its business;

• the failure of our clients to comply with applicable laws and regulations could result in legal

liability, regulatory fines and the loss of, or an inability to obtain, licenses required to operate their
businesses; and

• complying with REIT requirements may cause a Managed REIT to forgo otherwise attractive

opportunities or liquidate otherwise attractive investments.

Many of our clients are SEC registrants and file reports with the SEC as required by the Exchange
Act. A discussion of the businesses and the risks associated with the businesses of our clients that are
SEC registrants is contained in the reports filed by our clients, including in the section captioned “Risk
Factors” in each Managed Equity REIT’s, Five Star’s and TA’s Annual Reports on Form 10-K for the year
ended December 31, 2020, as those Risk Factors may have been updated or supplemented in those
companies’ Quarterly Reports on Form 10-Q filed subsequently, and in SEVN’s registration statement on
Form S-4 (File No. 333-256951) filed by SEVN with the SEC, and declared effective on July 26, 2021
and the joint proxy statement/prospectus contained therein, and SEVN’s subsequent filings with the SEC.
Copies of these reports are available at the SEC’s website, www.sec.gov.

Risks Related to Our Securities

A trading market that provides adequate liquidity may not be sustained for our Class A Common
Shares and the market price of our Class A Common Shares may fluctuate widely.

Our public float represents about 48.6% of the economic interest in RMR LLC. As a result, a
significant amount of the economic interest in RMR LLC is not represented in our public float, which
may adversely impact trading in our Class A Common Shares. There can be no assurance that an active
trading market for our Class A Common Shares will be sustained in the future.

The market price of our Class A Common Shares may fluctuate widely, depending upon many

factors, some of which are beyond our control, including, but not limited to, the following:

• the duration and severity of the negative economic impact of COVID-19 and the resulting

market disruption on us and our clients;

• declines in the market prices of our clients’ common shares;

• a relatively thin trading market for our Class A Common Shares could cause trades of small
blocks of shares to have a significant impact on the price of our Class A Common Shares;

• our quarterly or annual earnings, or those of other comparable companies;

• actual or anticipated fluctuations in our operating results;

• changes in accounting standards, policies, guidance, interpretations or principles;

• announcements by us, our clients or our competitors of significant investments, acquisitions or

dispositions;

• the inclusion, exclusion, or deletion of our Class A Common Shares from any trading indices;

• the failure of securities analysts to cover our Class A Common Shares;

• changes in earnings estimates by securities analysts or in our ability to meet those estimates;

• the operating and stock price performance of other comparable companies;

• overall market fluctuations; and

• general economic conditions.

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Stock markets in general often experience volatility that is unrelated to the operating performance
of a particular company. These broad market fluctuations may adversely affect the trading price of our
Class A Common Shares. Our shareholders may not be able to resell their Class A Common Shares
following periods of volatility because of the market’s adverse reaction to volatility.

Some investors may be precluded from investing in our Class A Common Shares as a result of
our dual class capital structure, which may adversely affect the trading price of our Class A
Common Shares.

S&P Dow Jones, a provider of widely followed stock indices, does not include companies with
multiple share classes, such as ours, in certain of their indices. In addition, several stockholder advisory
firms oppose the use of multiple class structures. As a result, our Class A Common Shares will likely
not be eligible for these stock indices and may cause stockholder advisory firms to publish negative
commentary about our corporate governance practices or otherwise seek to cause us to change our
capital structure. FTSE Russell, another provider of widely followed stock indices, adopted rules
requiring new constituents of its indices to have at least five percent of their voting rights in the hands
of public stockholders. Many investment funds are precluded from investing in companies that are not
included in such indices, and these funds would be unable to purchase our Class A Common Shares.
We cannot assure you that other stock indices will not take a similar approach to S&P Dow Jones or
FTSE Russell in the future. Exclusion from indices could make our Class A Common Shares less
attractive to investors and, as a result, the market price of our Class A Common Shares could be
adversely affected. Additionally, any actions or publications by stockholder advisory firms critical of our
corporate governance practices or capital structure could also adversely affect the value of our
Class A Common Shares.

Our dividend policy is subject to change.

RMR Inc. currently plans to pay a regular quarterly cash dividend equal to $0.38 per share ($1.52

per share per year) to holders of its Class A Common Shares. However, the amount of distributions
RMR LLC may make in the future is not certain, and there is no assurance that future distributions will
be made. On September 16, 2021, RMR Inc. paid a one-time special dividend of $7.00 per share in order
to return excess capital to our shareholders. The declaration and payment of any dividends to our
shareholders will be at the discretion of our Board of Directors which considers many factors when
setting dividend rates including RMR Inc.’s current and expected earnings and the availability of cash
to fund dividends as compared to alternative uses of such cash. Our Board of Directors may change the
distribution policy or discontinue the payment of dividends at any time. Accordingly, any future dividends
may be increased or decreased and there is no assurance as to the rate at which any future dividends
will be paid, and they could decline in amount or be suspended or discontinued. Any change in our
dividend policy could have a material adverse effect on the market price of our Class A Common
Shares.

Risks Related to Our Relationships with Our Controlling Shareholder and Our Clients

Our controlling shareholder controls our voting power, and our other shareholders will have
less influence over our business than shareholders of most other publicly traded companies.

Substantially all of the voting power in RMR Inc. and a majority of the economic interest in RMR
LLC is held by ABP Trust, an entity controlled by its sole trustee, Adam D. Portnoy. Mr. Portnoy is one of
our Managing Directors and is our President and Chief Executive Officer. RMR Inc. is the managing
member of RMR LLC. As of September 30, 2021, Adam D. Portnoy beneficially owned, in aggregate,
directly and indirectly through ABP Trust, (i) 170,502 shares of our Class A Common Shares; (ii) all of our
outstanding Class B-1 Common Shares; (iii) all of our outstanding Class B-2 Common Shares; and
(iv) approximately 49.2% of our outstanding Class A Units of RMR LLC. Our Class B-1 Common Shares
and Class B-2 Common Shares entitle holders to ten votes per share. As a result of this ownership,
as of September 30, 2021, Adam D. Portnoy beneficially owned in aggregate, directly and indirectly
through ABP Trust, a combined direct and indirect 51.4% economic interest in RMR LLC and controlled
91.3% of the aggregate voting power of our outstanding capital stock. As a result of this voting

25

control, Adam D. Portnoy is effectively able to determine the outcome of all matters requiring shareholder
approval, including, but not limited to, election of our directors. Adam D. Portnoy is able to cause or
prevent a change of control of RMR Inc., and this voting control could preclude any unsolicited acquisition
of RMR Inc. The voting control of Adam D. Portnoy could deprive our shareholders of an opportunity
to receive a premium for their Class A Common Shares as part of a sale of us and may affect the market
price of our Class A Common Shares.

Our management agreements with the Managed Equity REITs may discourage our change of
control.

Each Managed Equity REIT may terminate its management agreements with us if we experience
a change of control, as defined in those agreements, without payment of any termination fee. We may
be unable to duplicate the long term management arrangements we have with each of the Managed
Equity REITs. For these reasons, the management agreements may discourage a change of control
of us, including a change of control which might result in payment of a premium for our Class A Common
Shares.

The registration of Tremont Realty Capital under the Investment Advisers Act may discourage
our change of control.

One of our subsidiaries, Tremont Realty Capital, is registered as an investment adviser under the

Investment Advisers Act. Any change in control of Tremont Realty Capital, as defined in and interpreted
pursuant to the Investment Advisers Act, would trigger a shareholder approval right by SEVN
shareholders or other advisory clients of Tremont Realty Capital as applicable, under that Act. The
need for such approval may discourage a change of control of us, including a change of control which
might result in payment of a premium for our Class A Common Shares.

The ability of ABP Trust to sell its ownership stake in us and speculation about any such sale
may adversely affect the market price of our Class A Common Shares.

ABP Trust controls 100.0% of our Class B-1 Common Shares (which are exchangeable for

Class A Common Shares) and Class B-2 Common Shares, some of our currently outstanding Class A
Common Shares and approximately 49.2% of our Class A Units of RMR LLC (which ABP Trust may
cause RMR LLC to redeem for, at our election, Class A Common Shares on a one for one basis or cash).
Thus, a significant portion of our ownership is not trading in the public markets. ABP Trust may sell
any or all of its Class A Common Shares at any time without approval by other shareholders of RMR
Inc. Speculation by the press, stock analysts, our shareholders or others regarding the intention of ABP
Trust to dispose of Class A Common Shares could adversely affect the market price of our Class A
Common Shares. Moreover, the market price of our Class A Common Shares may be adversely impacted
by the fact that a significant amount of our outstanding shares are not included in the public float of
our Class A Common Shares and by our dual-stock structure. Accordingly, our Class A Common Shares
may be worth less than they would be if the Class A Common Shares that ABP Trust controls or has
a right to acquire were trading in the public markets.

We and our clients are party to transactions with related parties that may increase the risk of
allegations of conflicts of interest.

We and our clients are party to transactions with related parties, including with entities controlled

by Adam D. Portnoy and entities that we manage. For example, because of the relationships among
us, Adam D. Portnoy, and our clients, the agreements we are party to with them, including our
management agreements, are among related parties. Other examples include: SVC is TA’s principal
landlord, and TA is SVC’s largest tenant, operating travel center locations owned by SVC pursuant to long
term leases; Five Star manages most of the senior living communities owned by DHC pursuant to
long term management agreements, DHC owns approximately 34% of Five Star’s outstanding common
stock and most of the senior living communities Five Star operates are owned by DHC; Sonesta
manages the majority of SVC’s hotels pursuant to management agreements, SVC owns approximately
34% of Sonesta’s outstanding common stock and most of the hotels Sonesta operates are owned by

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SVC. On September 30, 2021, TRMT merged with and into RMRM with RMRM continuing as the
surviving entity under the name “Seven Hills Realty Trust.” SEVN will continue to be managed by our
subsidiary, Tremont Realty Capital. Our and our clients’ agreements with related parties or in respect of
transactions among related parties may not be on terms as favorable to us as they would have been if
they had been negotiated among unrelated parties. Moreover, we are subject to the risk that our
shareholders or the shareholders of one or more of our clients may challenge any such related party
transactions. If challenges to related party transactions were to be successful, we or our clients might not
realize the benefits expected from the transactions being challenged. Moreover, any such challenge
could result in substantial costs and a diversion of our management’s attention, could have a material
adverse effect on our or our clients’ reputation, business and growth and could adversely affect our or our
clients’ ability to realize the benefits expected from the transactions, whether or not the allegations
have merit or are substantiated.

Increased relations among certain of our clients may cause a decline in revenue, business or
assets of a client to adversely impact other clients.

Some of our clients have overlapping ownership interests and material business relationships with

other of our clients which could cause a decline in revenue, business or assets of a client to be
exacerbated by adverse impact on other clients. For example: Five Star manages most of the senior living
communities owned by DHC and DHC owns approximately 34% of Five Star’s outstanding common
stock; Sonesta manages most of SVC’s hotels and the majority of the hotels operated by Sonesta are
owned by SVC and SVC owns approximately 34% of Sonesta’s outstanding common stock; and TA
leases all of SVC’s travel center properties and SVC owns approximately 8.1% of TA’s outstanding
common stock. Accordingly, a decline in revenue, business or assets of Five Star would be expected to
adversely impact DHC, and a decline in revenue, business or assets of Sonesta or TA would be
expected to adversely impact SVC.

Our management responsibilities to each of our clients and any future companies we may
manage may give rise to actual, potential or perceived conflicts of interest.

Some of our clients have overlapping investment objectives, and if, and as we expand our
management services to include additional private real estate capital clients, additional overlapping
investment objectives may result. Additionally, some of our clients have material business relationships
with, and in some instances have engaged in material transactions with, other of our clients that
could give rise to conflicting interests. Our controlling shareholder’s investment in some of our clients
also could give rise to conflicting interests. Our clients rely on information and management services we
provide to them. While we and our clients have policies and procedures in place that are intended to
mitigate the risks of conflicts of interest, our allocation of investment opportunities and cost
reimbursements, advice, recommendations and commitments of our management team across our
clients might be perceived to favor one client at the expense of another.

In addition to serving on our Board of Directors and executive team, Adam D. Portnoy serves as

the chair of the board of trustees of each of the Managed REITs, as a managing trustee or managing
director of each Managed REIT, TA and Five Star and as the chair of the board of directors of TA and Five
Star and as a director of Sonesta (and its parent); certain of our other officers serve as managing
trustees, managing directors or directors of our clients; and all of the executive officers of the Managed
REITs and many of the executive officers of the Managed Operating Companies are our officers and
employees. In addition, several of the independent trustees and independent directors of our public
clients also serve as independent trustees or independent directors of other public clients. These multiple
responsibilities and varying interests could create competition for the time and efforts of Adam D.
Portnoy and RMR LLC and its subsidiaries and their officers and employees, and actual, potential or
perceived conflicts of interest may arise.

Shareholder litigation, dissident shareholder director nominations and dissident shareholder
proposals have often been instituted against companies alleging conflicts of interest in business
dealings with affiliated and related persons and entities. Our relationships with Adam D. Portnoy and
our clients, the position of our Managing Directors and executive officers as directors, trustees or executive

27

officers of our clients, the position of independent trustees and independent directors of our public
clients as independent trustees or independent directors of other public clients and the relationships
among our clients may precipitate such activities. In addition, certain proxy advisory firms which have
significant influence over the voting by shareholders of public companies, have, in the past, recommended
that shareholders vote against, or withhold votes for, the election of board members at annual meetings
of shareholders of our clients, and they may advocate for similar voting actions for future meetings.
These actions may affect the outcome of those elections and impact the governance of those clients,
which may increase the risk of shareholder activism and litigation at those clients. These activities could
result in substantial costs and diversion of our management’s attention and could have a material
adverse effect on our and our clients’ reputations and businesses.

Risks Related to Our Organization and Structure

We are a “controlled company” within the meaning of the Nasdaq listing rules and, as a result,
qualify for, and may rely on, exemptions from certain corporate governance requirements. Our
shareholders will not have the same protections afforded to shareholders of companies that
are subject to such requirements.

Adam D. Portnoy, as sole trustee of ABP Trust, holds more than 50.0% of the voting power of our

shares eligible to vote. As a result, we are a “controlled company” under the Nasdaq listing rules. Under
these rules, a company of which more than 50.0% of the voting power in the election of directors is
held by an individual, group or another company is a “controlled company” and may elect not to comply
with certain listed company governance requirements, including the requirements that the board of
directors be comprised of a majority of independent directors and that we have a compensation
committee and a nominating and corporate governance committee composed entirely of independent
directors. Our compensation committee and our nominating and governance committee are comprised
entirely of independent directors. The exemptions for a “controlled company” do not modify the
independence requirements for our audit committee, and we intend to continue to comply with the
applicable requirements of the SEC and Nasdaq with respect to our audit committee. Further, the
exemptions for “controlled companies” will not impact our compliance with Nasdaq’s new listing rule
relating to board diversity; our current board satisfies the diversity standards under the new Nasdaq
listing rule in advance of its effective time. Nonetheless, the fact that we may avail ourselves in the future
of some or all of the exceptions afforded a “controlled company” may cause our Class A Common
Shares to trade at a lower price than if these protections were provided.

Our rights and the rights of our shareholders to take action against our directors and officers
are limited.

Our governing documents limit the liability of our directors and officers to us and our shareholders
for money damages to the maximum extent permitted under Maryland law. Under current Maryland law,
our directors and officers will not have any liability to us and our shareholders for money damages
other than liability resulting from:

• actual receipt of an improper benefit or profit in money, property or services; or

• active and deliberate dishonesty by the director or officer that was established by a final judgment

as being material to the cause of action adjudicated.

Additionally, our governing documents require us to indemnify, to the maximum extent permitted by
Maryland law, any of our present or former directors or executive officers who is made or threatened to
be made a party to a proceeding by reason of his, her or their service in that capacity. We also
entered into separate agreements with our directors and executive officers providing for indemnification
and advancement of expenses in addition to any rights such person may have under our governing
documents.

As a result of these limitations on liability and indemnification obligations, we and our shareholders
may have more limited rights against our present and former directors and officers than might exist with

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other companies, which could limit shareholder recourse in the event of actions which some
shareholders may believe are not in our best interest.

Our bylaws designate the Circuit Court for Baltimore City, Maryland or, if that court does not
have jurisdiction, the United States District Court for the District of Maryland, Baltimore Division,
as the sole and exclusive forum for certain actions and proceedings that may be initiated by
our shareholders, which could limit our shareholders’ ability to obtain a favorable judicial forum
for disputes with us or our directors, officers, manager, agents or employees.

Our bylaws currently provide that, unless the dispute has been referred to binding arbitration, the
Circuit Court for Baltimore City, Maryland or, if that court does not have jurisdiction, the United States
District Court for the District of Maryland, Baltimore Division, will be the sole and exclusive forum for:
(1) any derivative action or proceeding brought on our behalf; (2) any action asserting a claim for breach
of a fiduciary duty owed by any director, officer, agent or employee of ours to us or our shareholders;
(3) any action asserting a claim against us or any director, officer, agent or employee of ours arising
pursuant to Maryland law or our charter or bylaws brought by or on behalf of a shareholder either on such
shareholder’s own behalf, on our behalf or on behalf of any series or class of our shareholders or
shareholders against us or any of our directors, officers, agents or employees, including any claims
relating to the meaning, interpretation, effect, validity, performance or enforcement of our charter or
bylaws; or (4) any action asserting a claim against us or any director, officer, agent or employee of ours
that is governed by the internal affairs doctrine of the State of Maryland. The exclusive forum provision
of our bylaws does not apply to any dispute that has been referred to binding arbitration in accordance
with our bylaws. The exclusive forum provision of our bylaws does not establish exclusive jurisdiction
in the Circuit Court for Baltimore City, Maryland for claims that arise under the Securities Act, the
Exchange Act or other federal securities laws if there is exclusive or concurrent jurisdiction in the federal
courts. Any person or entity purchasing or otherwise acquiring or holding any interest in our shares of
beneficial interest shall be deemed to have notice of and to have consented to these provisions of our
bylaws, as they may be amended from time to time. The arbitration and exclusive forum provisions of
our bylaws may limit a shareholder’s ability to bring a claim in a judicial forum that the shareholder
believes is favorable for disputes with us or our directors, officers, employees or agents, which may
discourage lawsuits against us and our directors, officers, employees or agents.

Shareholder litigation against us or our directors, officers, employees or other agents may be
referred to mandatory arbitration proceedings, which follow different procedures than in-court
litigation and may be more restrictive to shareholders asserting claims than in-court litigation.

Our shareholders agree, by virtue of becoming shareholders, that they are bound by our governing
documents, including the arbitration provisions of our bylaws, as they may be amended from time to time.
Our bylaws provide that certain actions by one or more of our shareholders against us or any of our
directors, officers, employees or other agents will be referred to mandatory, binding and final arbitration
proceedings if we, or any other party to such dispute, including any of our directors, officers, employees
or other agents, unilaterally so demands. As a result, we and our shareholders would not be able to
pursue litigation in state or federal court against us or our directors, officers, employees or other
agents, including, for example, claims alleging violations of federal securities laws or breach of fiduciary
duties or similar director or officer duties under Maryland Law, if we or any of our directors, officers,
employees, agents or other parties against whom the claim is made unilaterally demands the matter be
resolved by arbitration. Instead, our shareholders would be required to pursue such claims through
binding and final arbitration.

Our bylaws provide that such arbitration proceedings would be conducted in accordance with the

procedures of the Commercial Arbitration Rules of the American Arbitration Association, as modified in
our bylaws. These procedures may provide materially more limited rights to our shareholders than
litigation in a federal or state court. For example, arbitration in accordance with these procedures does
not include the opportunity for a jury trial, document discovery is limited, arbitration hearings generally
are not open to the public, there are no witness depositions in advance of arbitration hearings and
arbitrators may have different qualifications or experiences than judges. In addition, although our bylaws’
arbitration provisions contemplate that arbitration may be brought in a representative capacity or on

29

behalf of a class of our shareholders, the rules governing such representation or class arbitration may
be different from, and less favorable to shareholders than, the rules governing representative or class
action litigation in courts. Our bylaws also generally provide that each party to such an arbitration is
required to bear its own costs in the arbitration, including attorneys’ fees, and that the arbitrators may
not render an award that includes shifting of such costs or, in a derivative or class proceeding, award any
portion of our award to any shareholder or such shareholder’s attorneys. The arbitration provisions of
our bylaws may discourage our shareholders from bringing, and attorneys from agreeing to represent our
shareholders wishing to bring, litigation against us or our directors, officers, employees, manager or
other agents. A number of our contracts with Adam D. Portnoy, ABP Trust and our clients have similar
arbitration provisions to those in our bylaws.

We believe that the arbitration provisions in our bylaws are enforceable under both state and
federal law, including with respect to federal securities laws claims. We are a Maryland corporation and
Maryland courts have upheld the enforceability of arbitration bylaws. In addition, the United States
Supreme Court has repeatedly upheld agreements to arbitrate other federal statutory claims, including
those that implicate important federal policies. However, some academics, legal practitioners and
others are of the view that charter or bylaw provisions mandating arbitration are not enforceable with
respect to federal securities laws claims. It is possible that the arbitration provisions of our bylaws may
ultimately be determined to be unenforceable.

By agreeing to the arbitration provisions of our bylaws, shareholders will not be deemed to have

waived compliance by us with federal securities laws and the rules and regulations thereunder.

RMR Inc. is required to pay ABP Trust for certain tax benefits it claims as a result of the tax
basis step up we received as part of the RMR LLC reorganization on June 5, 2015 and will receive
upon future redemptions by ABP Trust for Class A Common Shares or for cash. In certain
circumstances, payments under the Tax Receivable Agreement may be accelerated and/or
significantly exceed the actual tax benefits RMR Inc. realizes.

ABP Trust may redeem Class A Units it owns for Class A Common Shares or cash. See “Business-

Our Organizational Structure-The RMR LLC Operating Agreement-Redemption rights of holders of
Class A Units” in our Annual Report on Form 10-K for the fiscal year ended September 30, 2019. Both
ABP Trust’s initial purchase of Class A Units and any future redemptions that ABP Trust may affect may
result in increases in our tax basis of our assets that otherwise would not have been available. Such
increases in tax basis are likely to increase (for tax purposes) depreciation and amortization deductions
and therefore reduce the amount of income tax we otherwise would be required to pay in the future.
These increases in tax basis may also decrease gain (or increase loss) on future dispositions of certain
capital assets to the extent the increased tax basis is allocated to those assets. The Internal Revenue
Service, or IRS, may challenge all or part of these tax basis increases, and a court might sustain such a
challenge.

We have entered into a tax receivable agreement, dated June 5, 2015, by and among RMR Inc.,
RMR LLC and ABP Trust, or the Tax Receivable Agreement, that provides for the payment by RMR Inc.
to ABP Trust of 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. actually realizes as a result of (a) the increases in tax basis attributable
to its 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. See “Business-Our Organizational Structure-Tax Receivable
Agreement” in our Annual Report on Form 10-K for the fiscal year ended September 30, 2019 for
further information regarding the Tax Receivable Agreement. While the actual increase in tax basis, as
well as the amount and timing of any payments under the Tax Receivable Agreement, will vary
depending upon a number of factors, including the timing of redemptions, the price of our Class A
Common Shares at the time of the redemption, the extent to which such redemptions are taxable, and
the amount and timing of our income, we expect that, as a result of the size of the increases in the
tax basis of the tangible and intangible assets of RMR LLC attributable to RMR Inc.’s interests in RMR
LLC, during the expected term of the Tax Receivable Agreement, the payments that RMR Inc. makes
to ABP Trust may be substantial. ABP Trust generally will not reimburse RMR Inc. for any payments that
may have been made under the Tax Receivable Agreement. As a result, in certain circumstances

30

RMR Inc. could make payments to ABP Trust under the Tax Receivable Agreement in excess of cash
tax savings. Our ability to achieve benefits from any tax basis increase, and the payments to be made
under the Tax Receivable Agreement, will depend upon a number of factors, including the timing and
amount of our future income.

In addition, the Tax Receivable Agreement provides that, upon certain changes of control and
certain breaches of the agreement that we fail to cure in accordance with the terms of the agreement,
our obligations with respect to Class A Units will be accelerated. In those circumstances, our obligations
under the Tax Receivable Agreement would be based on certain assumptions, including that we
would have sufficient taxable income to fully utilize the deductions arising from the increased tax
deductions and tax basis and other benefits described in the Tax Receivable Agreement, and that any
Class A Units that have not been redeemed will be deemed redeemed for the market value of the Class A
Common Shares at the time of the change of control or breach, as applicable. Consequently, it is
possible, in these circumstances, that the actual cash tax savings realized by RMR Inc. may be
significantly less than the corresponding Tax Receivable Agreement payments.

Our governing documents permit our directors and officers, our clients and ABP Trust to retain
corporate opportunities for their own benefit.

Under RMR Inc.’s governing documents and RMR LLC’s operating agreement, no director or
officer of ours who is also serving as an officer, employee or agent of a client or ABP Trust or any of its
affiliates is required to present, communicate or offer any business opportunity to us, and such
person shall have the right to hold any business opportunity for themselves or transfer it to any other
person to the maximum extent permitted by Maryland law. If any of these persons fails to present an
opportunity to us or takes the opportunity for themselves, to the maximum extent permitted under
Maryland law they will not be liable to us. We have renounced all potential interest or expectation in
certain business opportunities which may fit our growth objectives in the future or otherwise have value
to us. These opportunities may be directed to the clients or other persons or entities to which RMR
LLC may have a relationship. Additionally, under our governing documents, our directors, officers,
employees and agents are permitted to engage in other business activities that are similar to, or even
competitive with, our own. If such persons engage in competitive business activities, we may have no
remedy under our governing documents in these circumstances.

Our governing documents do not limit our ability to enter into new lines of businesses and
doing so may result in additional risks and uncertainties in our businesses.

Our governing documents do not limit our business to the management of commercial real estate

assets or businesses related thereto. Accordingly, we may pursue other business initiatives. To the extent
we enter into a new line of business, we will face numerous risks and uncertainties, including risks
associated with: (i) the required investment of capital and other resources; (ii) the possibility that we
have insufficient expertise to engage in such activities competently or profitably; (iii) combining or
integrating operational and management systems and controls; and (iv) the broadening of our geographic
footprint, including the risks associated with conducting operations in non-U.S. jurisdictions. Entry into
certain lines of business may subject us to new laws and regulations with which we are not familiar, or
from which we are currently exempt, and may lead to increased litigation and regulatory risk. Our
strategic initiatives may include joint ventures or partnerships, in which case we will be subject to
additional risks and uncertainties because we may be dependent upon, and subject to liability, losses
or reputational damage relating to systems, controls and personnel that are not under our control.

Our only material asset is our interest in RMR LLC, and we are accordingly dependent upon
distributions from RMR LLC to pay our taxes and expenses.

RMR Inc. is organized as a holding company of RMR LLC and its only material asset is its limited
liability company membership units of RMR LLC. RMR Inc. has no independent means of generating
revenue. Pursuant to RMR Inc.’s agreements with RMR LLC, RMR Inc., as the managing member of
RMR LLC, intends to cause RMR LLC to make distributions in an amount that is at least sufficient to cover
applicable taxes payable by its members, other expenses and some or all of the dividends, if any,
declared by us.

31

Deterioration in the financial condition, earnings or cash flow of RMR LLC for any reason could
limit or impair its ability to pay such distributions to us. Additionally, to the extent that RMR Inc. requires
funds and RMR LLC is restricted from making such distributions under applicable law or regulation or
under the terms of financing or other arrangements, or is otherwise unable to provide such funds, our
liquidity and financial condition could be materially adversely affected.

Item 1B. Unresolved Staff Comments

None.

Item 2. Properties

Our principal executive offices are located at Two Newton Place, 255 Washington Street, Newton,

MA 02458-1634. These offices are leased from an affiliate of ABP Trust through 2030. A copy of the
lease is incorporated by reference as an exhibit to this Annual Report on Form 10-K.

We also lease other ancillary and local office space from ABP Trust, from certain Managed Equity
REITs and from third parties. We consider these leased premises suitable and adequate for our business.
For more information about our leased facilities, please see Note 10, Leases, to our consolidated
financial statements included in Part IV, Item 15 of this Annual Report on Form 10-K.

Item 3. Legal Proceedings

From time to time, we may become involved in litigation matters incidental to the ordinary course
of our business. Although we are unable to predict with certainty the eventual outcome of any litigation,
we are currently not a party to any litigation which we expect to have a material adverse effect on our
business.

Item 4. Mine Safety Disclosures

Not applicable.

32

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer

Purchases of Equity Securities

Our Class A Common Shares are traded on Nasdaq (symbol: RMR). There is no publicly traded
market for our Class B-1 Common Shares or our Class B-2 Common Shares, all of which are held by
ABP Trust.

Issuer purchases of equity securities.

The following table provides information about our purchases of our equity securities during the

fiscal year ended September 30, 2021:

Calendar Month

Number of
Shares
Purchased(1)

Average
Price Paid
per Share

Total Number of
Shares Purchased
as Part of Publicly
Announced Plans
or Programs

Maximum
Approximate Dollar
Value of Shares that
May Yet Be Purchased
Under the Plans or
Programs

March 2021 . . . . . . . . . . . . . . . . . .

June 2021 . . . . . . . . . . . . . . . . . . .
September 2021 . . . . . . . . . . . . . . .

Total

. . . . . . . . . . . . . . . . . . . . . . .

450

5,258
18,417

24,125

$42.85

$38.64
$33.20

$34.57

N/A

N/A
N/A

N/A

N/A

N/A
N/A

N/A

(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.

Item 6.

Reserved

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of

Operations

The following information should be read in conjunction with our consolidated financial statements

and accompanying notes included in Part IV, Item 15 of this Annual Report on Form 10-K.

OVERVIEW (dollars in thousands)

RMR Inc. is a holding company and substantially all of its business is conducted by RMR LLC.
RMR Inc. has no employees, and the personnel and various services it requires to operate are provided
by RMR LLC. RMR LLC manages a diverse portfolio of real estate and real estate related businesses.
As of September 30, 2021, RMR LLC managed approximately 2,100 properties in 47 states, Washington,
D.C., Puerto Rico and Canada that are principally owned by the Managed Equity REITs.

Business Environment and Outlook

The continuation and growth of our business depends upon our ability to operate the Managed

REITs so as to maintain, grow and increase the value of their businesses, to assist our Managed
Operating Companies to grow their businesses and operate profitably and to successfully execute on
new business ventures and investments we may pursue. Our business and the businesses of our clients
generally follow the business cycle of the U.S. real estate industry, but with certain property type and
regional geographic variations. Typically, as the general U.S. economy expands, commercial real estate
occupancies increase and new real estate development occurs; new development frequently leads to
increased real estate supply and reduced occupancies; and then the cycle repeats. These general trends
can be impacted by property type characteristics or regional factors; for example, demographic

33

factors such as the aging U.S. population, the growth of e-commerce retail sales or net in migration or
out migration in different geographic regions can slow, accelerate, overwhelm or otherwise impact general
cyclical trends. Because of such multiple factors, we believe it is often possible to grow real estate
based businesses in selected property types or geographic areas despite general national trends. We
also believe that these regional or special factors can be reinforced or sometimes overwhelmed by general
economic factors; for example, increases or decreases in U.S. interest rates may cause a general
decrease, or increase, in the value of securities of real estate businesses or in their value relative to
other types of securities and investments, including those real estate businesses that use large amounts
of debt and that attract equity investors by paying dividends such as REITs. We try to take account of
industry and general economic factors as well as specific property and regional geographic considerations
when providing services to our clients.

The COVID-19 pandemic and the various governmental and market responses intended to contain
and mitigate the spread of the virus and its detrimental public health impact have had a significant impact
on the global economy, including the U.S. economy. In addition, the COVID-19 pandemic and related
public health restrictions have had a particularly severe impact on certain industries in which our clients
operate, including, hospitality, travel, service retail, senior housing and rehabilitation services. Many of
the restrictions that had been imposed in the United States during the COVID-19 pandemic have since
been lifted and commercial activity in the United States has increasingly returned to pre-pandemic
practices and operations. There remains uncertainty as to the ultimate duration and severity of the
COVID-19 pandemic, including risks that may arise from mutations or related strains of the virus, the
ability to successfully administer vaccinations to a sufficient number of persons or attain immunity to the
virus by natural or other means to achieve herd immunity, and the impact on the U.S. economy that
may result from the inability of other countries to administer vaccinations to their citizens or their citizens’
ability to otherwise achieve immunity to the virus.

While our clients continue to face challenges related to the COVID-19 pandemic, we continue to

believe that our current financial resources enable us to withstand the COVID-19 pandemic. As of
September 30, 2021, we had $159,835 in cash and cash equivalents, no debt and for the fiscal year
ended September 30, 2021, we generated cash from operations of $71,794.

Further, we believe that because of the diversity of properties that our clients own and operate,
there may be opportunities for growth in select property types and locations as this pandemic ebbs.
We, on behalf of our clients and ourselves, attempt to take advantage of opportunities in the real estate
market when they arise. For example, since the beginning of the pandemic: (i) on March 31, 2020,
ILPT completed a $680 million joint venture with an Asian institutional investor, which was expanded to
include a large, top tier global sovereign wealth fund, as a second outside investor to this joint venture
on November 18, 2020; (ii) SVC transitioned over 200 hotels from other hotel operators to Sonesta; (iii) on
March 17, 2021, Sonesta completed its acquisition of RLH Corporation, establishing Sonesta as one
of the largest hotel companies and expanding its franchising capabilities; (iv) DHC restructured its
agreements with respect to 108 senior care facilities; and (v) on September 30, 2021, RMRM and TRMT
merged to form SEVN, a larger, more diversified mortgage REIT with an expanded capital base than
its predecessor companies. Other examples that have been completed in the past, include: (i) ILPT’s
initial public offering on January 17, 2018, which was formed to focus on the ownership and leasing of
industrial and logistics properties throughout the U.S. and (ii) the acquisition by SVC on September 20,
2019 of a net leased portfolio of 767 service oriented retail properties, providing SVC with a greater
diversity in tenant base, property type and geography. In addition, we balance our pursuit of growth
of our and our clients’ businesses by executing, on behalf of our clients, prudent capital recycling or
business arrangement restructurings in an attempt to help our clients prudently manage leverage and
to reposition their portfolios and businesses when circumstances warrant such changes or when other
more desirable opportunities are identified.

There are extensive uncertainties surrounding the COVID-19 pandemic, and as a result, we are
unable to determine what the ultimate impact will be on our clients and our financial position. For further
information and risks related to the COVID-19 pandemic on us and our business, see elsewhere in
this Annual Report on Form 10-K, including “Warning Concerning Forward-Looking Statements” and
Part I, Item 1A “Risk Factors”.

34

Managed Equity REITs

The base business management fees we earn from the Managed Equity REITs are calculated

monthly in accordance with the applicable business management agreement and are based on
a percentage of the lower of (i) the average historical cost of each REIT’s properties and (ii) each
REIT’s average market capitalization. The property management fees we earn from the Managed Equity
REITs are principally based on a percentage of the gross rents collected at certain managed properties
owned by the REITs, excluding rents or other revenues from hotels, travel centers, senior living
properties and wellness centers, which are separately managed by our Managed Operating Companies
or a third party. Also under the terms of the property management agreements, we receive construction
supervision fees in connection with certain construction activities undertaken at the managed
properties, including senior living communities owned by DHC and managed by Five Star and hotels
owned by SVC and managed by Sonesta, based on a percentage of the cost of such construction. For
further information regarding the fees that we earn, see Note 2, Summary of Significant Accounting
Policies, to our consolidated financial statements included in Part IV, Item 15 of this Annual Report on
Form 10-K.

The following table presents for each Managed Equity REIT a summary of its primary strategy and

the lesser of the historical cost of its assets under management and its market capitalization as of
September 30, 2021 and 2020, as applicable:

REIT

Primary Strategy

2021

2020

DHC . . . . . . Medical office and life science properties, senior living

$ 5,150,401

$ 4,381,749

Lesser of Historical Cost of Assets
Under Management or
Total Market Capitalization as of
September 30,

communities and wellness centers

Industrial and logistics properties

ILPT . . . . . .
OPI

2,100,020
3,837,235

2,613,338
3,244,624

. . . . . . Office properties primarily leased to single tenants,

including the government

SVC . . . . . . Hotels and net lease service and necessity-based

9,050,693

7,590,437

retail properties

$20,138,349

$17,830,148

A Managed Equity REIT’s historical cost of assets under management includes the real estate it

owns and its consolidated assets invested directly or indirectly in equity interests in or loans secured by
real estate and personal property owned in connection with such real estate (including acquisition
related costs which may be allocated to intangibles or are unallocated), all before reserves for
depreciation, amortization, impairment charges or bad debts or other similar non-cash reserves. A
Managed Equity REIT’s average market capitalization includes the average value of the Managed Equity
REIT’s outstanding common equity value during the period, plus the daily weighted average of each
of the aggregate liquidation preference of preferred shares and the principal amount of consolidated
indebtedness during the period. The table above presents for each Managed Equity REIT, the lesser of
the historical cost of its assets under management and its market capitalization as of the end of
each period.

The basis on which our base business management fees are calculated for the fiscal years ended
September 30, 2021 and 2020 may differ from the basis at the end of the periods presented in the table
above. As of September 30, 2021, the market capitalization was lower than the historical cost of
assets under management for DHC, OPI and SVC; the historical cost of assets under management for
DHC, OPI and SVC as of September 30, 2021, were $8,458,462, $6,082,546 and $12,301,972,
respectively. For ILPT, the historical cost of assets under management were lower than its market
capitalization of $2,665,941 as of September 30, 2021.

The fee revenues we earned from the Managed Equity REITs for the fiscal years ended

September 30, 2021 and 2020 are set forth in the following tables:

35

Fiscal Year Ended September 30,

2021

2020

REIT

Base Business
Management
Revenues

Property
Management
Revenues

Total

Base Business
Management
Revenues

Property
Management
Revenues

Total

DHC . . . . . . . . . . .

$23,247

$13,125

$ 36,372

$22,692

$13,493

$ 36,185

ILPT . . . . . . . . . . .

OPI . . . . . . . . . . . .

SVC . . . . . . . . . . .

11,110

17,025

41,771

6,635

20,226

4,083

17,745

37,251

45,854

13,595

17,446

40,621

7,878

20,489

3,680

21,473

37,935

44,301

$93,153

$44,069

$137,222

$94,354

$45,540

$139,894

As of September 30, 2021, we estimate that we would have earned an incentive business

management fee from OPI of $5,979 for calendar 2021 if September 30, 2021 had been the end of the
next measurement period. However, incentive business management fees from the Managed Equity
REITs are contingent performance based fees which are only recognized when earned at the end of the
respective measurement period. There can be no assurance that we will in fact earn the estimated
amount of, or any, incentive business management fees for calendar 2021, from OPI, or any Managed
Equity REIT. Accordingly, this estimated amount of incentive business management fees for calendar
2021 which would have been earned if the measurement period ended on September 30, 2021, is
not included in the fees listed in the tables above or in our consolidated financial statements included in
Part IV, Item 15 of this Annual Report on Form 10-K.

Managed Operating Companies and Managed Private Real Estate Capital

We provide business management services to the Managed Operating Companies. Five Star

operates senior living communities throughout the United States, many of which are owned by and
managed for DHC. Sonesta manages and franchises hotels, resorts and cruise ships in the United
States, Latin America, the Caribbean and the Middle East; many of the U.S. hotels that Sonesta operates
are owned by SVC. TA operates, leases and franchises travel centers along the U.S. interstate highway
system, many of which are owned by SVC, and standalone truck service facilities. Generally, our
fees earned from business management services to the Managed Operating Companies are based on
a percentage of certain revenues.

In addition, we also provide management services to the Managed Private Real Estate Capital

clients and earn fees based on a percentage of average invested capital, as defined in the applicable
agreements, property management fees based on a percentage of rents collected from managed
properties and construction management fees based on a percentage of the cost of construction
activities.

Our fee revenues from services to the Managed Operating Companies and the Managed Private

Real Estate Capital clients for the fiscal years ended September 30, 2021 and 2020, are set forth in the
following tables:

Fiscal Year Ended September 30,

2021

2020

Base Business
Management
Revenues

Property
Management
Revenues

Total

Base Business
Management
Revenues

Property
Management
Revenues

Total

ABP Trust . . . . . . . . . . .

$ 2,335

$1,960

$ 4,295

$ 2,530

$2,109

$ 4,639

Other private entities . . .

Five Star . . . . . . . . . . . .

Sonesta . . . . . . . . . . . .

TA . . . . . . . . . . . . . . . .

2,423

7,123

4,497

13,727

$30,105

1,348

—

—

—

3,771

7,123

4,497

—

8,787

1,505

13,727

13,084

—

—

—

—

—

8,787

1,505

13,084

$3,308

$33,413

$25,906

$2,109

$28,015

36

Advisory Business

Tremont Realty Capital provides management services to SEVN, a publicly traded mortgage REIT

that focuses on originating and investing in first mortgage whole loans secured by middle market and
transitional commercial real estate. Tremont Realty Capital also provided management services to TRMT
until September 30, 2021, when it merged with and into SEVN. Tremont Realty Capital is primarily
compensated pursuant to its management agreements with SEVN (beginning January 6, 2021) and
TRMT (until September 30, 2021) based on a percentage of SEVN’s and TRMT’s equity, as defined in
the applicable agreements.

RMR Advisors LLC, or RMR Advisors, merged into Tremont Realty Capital on January 6, 2021,
and previously provided advisory services for SEVN (then RMRM). Until January 5, 2021, RMR Advisors
was compensated pursuant to its agreement with SEVN (then RMRM) at a percentage of SEVN’s
average daily managed assets, as defined in the agreement.

For the fiscal years ended September 30, 2021 and 2020, Tremont Realty Capital or RMR Advisors,

as applicable, earned management and advisory services revenue from SEVN and TRMT of $3,956
and $2,911, respectively.

For the fiscal year ended September 30, 2021, Tremont Realty Capital also earned incentive fees

of $620 from TRMT. Tremont Realty Capital waived any incentive fees otherwise due and payable by
TRMT pursuant to the management agreement prior to December 31, 2020, and as a result, Tremont
Realty Capital could not earn any incentive fees from TRMT for the fiscal year ended September 31,
2020. No incentive fees were earned from SEVN for the fiscal year ended September 30, 2021.

The Tremont business acts as a transaction broker for non-investment advisory clients for negotiated
fees. The Tremont business earned fees for such brokerage services of $467 and $816 for the fiscal years
ended September 30, 2021 and 2020, respectively, which amounts are included in management
services revenue in our consolidated statements of income.

37

RESULTS OF OPERATIONS (dollars in thousands)

The following table presents the changes in our operating results for the fiscal year ended

September 30, 2021 compared to the fiscal year ended September 30, 2020:

Fiscal Year Ended September 30,

2021

2020

$ Change % Change

Revenues:

Management services . . . . . . . . . . . . . . . . . . . . . . .

$171,102

$168,766

$ 2,336

Incentive business management fees . . . . . . . . . . . .

Advisory services . . . . . . . . . . . . . . . . . . . . . . . . . .

620

3,956

—

2,911

Total management and advisory services revenues

175,678

171,677

Reimbursable compensation and benefits . . . . . . . . .

Reimbursable equity based compensation . . . . . . . . .

52,369

9,154

52,344

4,912

Other reimbursable expenses . . . . . . . . . . . . . . . . . .

370,037

360,572

Total reimbursable costs . . . . . . . . . . . . . . . . . . . .

431,560

417,828

Total revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

607,238

589,505

Expenses:

Compensation and benefits . . . . . . . . . . . . . . . . . . .
Equity based compensation . . . . . . . . . . . . . . . . . . .
Separation costs . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total compensation and benefits expense . . . . . . .
General and administrative . . . . . . . . . . . . . . . . . . . .
Other reimbursable expenses . . . . . . . . . . . . . . . . . .
Transaction and acquisition related costs . . . . . . . . . .
Depreciation and amortization . . . . . . . . . . . . . . . . .

119,644
12,022
4,525

136,191
26,961
370,037
984
973

121,386
7,828
1,881

131,095
26,514
360,572
1,618
968

620

1,045

4,001

25

4,242

9,465

13,732

17,733

(1,742)
4,194
2,644

5,096
447
9,465
(634)
5

1.4%

n/m

35.9%

2.3%

n/m

86.4%

2.6%

3.3%

3.0%

(1.4)%
53.6%
140.6%

3.9%
1.7%
2.6%
(39.2)%
0.5%

Total expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

535,146

520,767

14,379

2.8%

Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest and other income . . . . . . . . . . . . . . . . . . . . . .
Gain on Tremont Mortgage Trust investment . . . . . . . . .
Equity in earnings of investees . . . . . . . . . . . . . . . . . .
Unrealized gain on equity method investment accounted
for under the fair value option . . . . . . . . . . . . . . . . . .

Income before income tax expense . . . . . . . . . . . . . . .

72,092
760
2,059
443

18,811

94,165

68,738
4,451
—
1,545

3,354
(3,691)
2,059
(1,102)

4.9%
(82.9)%
n/m
(71.3)%

3,151

77,885

15,660

16,280

n/m

20.9%

Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . .

(13,152)

(11,552)

(1,600)

(13.9)%

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

81,013

66,333

14,680

22.1%

Net income attributable to noncontrolling interest

. . . . .

(45,317)

(37,541)

(7,776)

(20.7)%

Net income attributable to The RMR Group Inc.

. . . . . .

$ 35,696

$ 28,792

$ 6,904

24.0%

n/m—not meaningful

References to changes in the income and expense categories below relate to the comparison of
consolidated results for the fiscal year ended September 30, 2021, compared to the fiscal year ended
September 30, 2020. For a comparison of consolidated results for the fiscal year ended September 30,
2020 compared to the fiscal year ended September 30, 2019, see Part II, Item 7 “Management’s
Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on
Form 10-K for the fiscal year ended September 30, 2020.

38

Management services revenue. For the fiscal years ended September 30, 2021 and 2020, we

earned base business and property management services revenue from the following sources:

Fiscal Year Ended September 30,

2021

2020

Change

Managed Equity REITs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$137,222

$139,894

$(2,672)

Managed Private Real Estate Capital . . . . . . . . . . . . . . . . . . . . . . .

Managed Operating Companies . . . . . . . . . . . . . . . . . . . . . . . . . .

8,533

25,347

5,496

23,376

3,037

1,971

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$171,102

$168,766

$ 2,336

Management services revenue increased $2,336 primarily due to (i) an increase in management

fees earned from Sonesta of $2,992 primarily resulting from an increase in the number of hotels that it
manages and franchises during the current fiscal year, (ii) an increase in the average enterprise
value of SVC resulting in an increase to base business management fees of $1,150, and (iii) an increase
in construction supervision fees earned from SVC and OPI aggregating $957, partially offset by (i) a
decline in property management fees earned from DHC, OPI and SVC aggregating $1,185 primarily
resulting from property dispositions, and (ii) a decline in management fees earned from Five Star of
$1,664 driven by COVID-19 pandemic related adverse impacts to its business.

During the fiscal year ended September 30, 2021, an aggregate of $680,000 of properties were
deconsolidated from ILPT in connection with the closing of its private joint venture on November 18,
2020. As such, beginning on November 18, 2020, the associated management services revenue from
those properties were earned from the private joint venture and are included within Managed Private
Real Estate Capital in the table above. Prior to November 18, 2020, the associated management
services revenues from those properties were earned from ILPT and are included within Managed
Equity REITs in the table above. The net impact to total management services revenue from these
properties was relatively unchanged for the fiscal year ended September 30, 2021.

Incentive business management fees.

Incentive business management fees for the current fiscal
year include fees earned by Tremont Realty Capital from TRMT of $620. Tremont Realty Capital could
not earn any incentive fees from TRMT in the prior fiscal year due to the fee waiver in effect for the period
beginning July 1, 2018 until December 31, 2020. For further information about TRMT’s incentive fees
and the fee waiver, see Note 2, Summary of Significant Accounting Policies, to our consolidated financial
statements included in Part IV, Item 15 of this Annual Report on Form 10-K.

Advisory services revenue. Advisory services revenue increased $1,045 primarily due to an
increase of $1,014 in fees earned from TRMT as a result of the fee waiver Tremont Realty Capital
previously provided to TRMT expiring on December 31, 2020.

Reimbursable compensation and benefits. Reimbursable compensation and benefits include
reimbursements, at cost, that arise primarily from services our employees provide pursuant to our
property management agreements at the properties of our clients. A significant portion of these
compensation and benefits are charged or passed through to and were paid by tenants of our clients.
Reimbursable compensation and benefits was relatively unchanged from the prior fiscal year.

Reimbursable equity based compensation. Reimbursable equity based compensation includes

grants of common shares from our clients directly to certain of our officers and employees in connection
with the provision of management services to those clients. We record an equal offsetting amount as
equity based compensation expense for the value of the grants of common shares from our clients to
certain of our officers and employees. Reimbursable equity based compensation increased $4,242
primarily as a result of increases in our clients’ respective share prices.

Other reimbursable expenses. For further information about these reimbursements, see Note 2,

Summary of Significant Accounting Policies, to our consolidated financial statements included in Part IV,
Item 15 of this Annual Report on Form 10-K.

Compensation and benefits. Compensation and benefits consist of employee salaries and other

employment related costs, including health insurance expenses and contributions related to our

39

employee retirement plan. Compensation and benefits expense decreased $1,742 primarily due to
higher mortgage broker commissions, vacation deferrals, business continuity payments and officer
retirements during the prior fiscal year, partially offset by annual employee merit and bonus increases
in the current fiscal year.

Equity based compensation. Equity based compensation consists of the value of vested shares

granted to certain of our employees under our equity compensation plan and by our clients. Equity based
compensation increased $4,194 primarily due to increases in our clients’ respective share prices for
the share awards granted to our employees by our clients.

Separation costs. Separation costs consist of employment termination costs. For further

information about these costs, see Note 5, Related Person Transactions, to our consolidated financial
statements included in Part IV, Item 15 of this Annual Report on Form 10-K.

General and administrative. General and administrative expenses consist of office related
expenses, information technology related expenses, employee training, travel, professional services
expenses, director compensation and other administrative expenses. General and administrative costs
increased $447 primarily due to increases in technology infrastructure costs, insurance and an
increase in the value of annual share grants awarded to our Directors, partially offset by decreases in
recruiting fees largely as a result of the pandemic, and professional fees.

Transaction and acquisition related costs. Transaction and acquisition related costs decreased

$634 primarily due to costs incurred in the prior fiscal year in connection with SEVN’s conversion from
a registered investment company to a commercial mortgage REIT.

Depreciation and amortization. Depreciation and amortization was relatively unchanged from the

prior fiscal year.

Interest and other income.

Interest and other income decreased $3,691 primarily due to lower
interest earned during the current fiscal year primarily as a result of lower interest rates compared to
the prior fiscal year.

Gain on Tremont Mortgage Trust investment. The gain on Tremont Mortgage Trust investment in
the current fiscal year represents the difference between the cost basis of our investment in TRMT and
the fair value of our investment in SEVN on the date of the Merger. For further information see Note
2, Summary of Significant Accounting Policies, to our consolidated financial statements included in
Part IV, Item 15 of this Annual Report on Form 10-K.

Equity in earnings of investees. Equity in earnings of investees represents our proportionate
share of earnings from our equity interest in TRMT until September 30, 2021, when it merged with and
into SEVN. For further information, see Note 2, Summary of Significant Accounting Policies, to our
consolidated financial statements included in Part IV, Item 15 of this Annual Report on Form 10-K.

Unrealized gain on equity method investment accounted for under the fair value option. Unrealized
gain on equity method investment accounted for under the fair value option represents the gain on our
investment in TA common shares. For further information, see Note 2, Summary of Significant Accounting
Policies, to our consolidated financial statements included in Part IV, Item 15 of this Annual Report on
Form 10-K.

Income tax expense. The increase in income tax expense of $1,600 is primarily attributable to

higher taxable income during the current fiscal year compared to the prior fiscal year. For further
information see Note 3, Income Taxes, to our consolidated financial statements included in Part IV,
Item 15 of this Annual Report on Form 10-K.

40

LIQUIDITY AND CAPITAL RESOURCES (dollars in thousands, except per share amounts)

Our current assets have historically been comprised predominantly of cash, cash equivalents and

receivables for business management, property management and advisory services fees. As of
September 30, 2021 and 2020, we had cash and cash equivalents of $159,835 and $369,663,
respectively, of which $23,338 and $25,498, respectively, was held by RMR Inc., with the remainder
being held at RMR LLC. Cash and cash equivalents include all short term, highly liquid investments that
are readily convertible to known amounts of cash and have original maturities of three months or less
from the date of purchase. As of September 30, 2021 and 2020, $131,065 and $341,612, respectively, of
our cash and cash equivalents were invested in money market funds. The decrease in cash and cash
equivalents at September 30, 2021 is primarily attributable to the payment of a one-time special dividend
of $7.00 per Class A Common Share and Class B-1 Common Share, or $219,851 in the aggregate, in
September 2021. Our cash and cash equivalents leave us well positioned to pursue a range of capital
allocation strategies, with a focus on the growth of our private capital business, in the next
twelve months.

Our liquidity is highly dependent upon our receipt of fees from the businesses that we manage.
Historically, we have funded our working capital needs with cash generated from our operating activities
and we currently do not maintain any credit facilities. We expect that our future working capital needs
will relate largely to our operating expenses, primarily consisting of employee compensation and benefits
costs, our obligation to make quarterly tax distributions to the members of RMR LLC, our plan to
make quarterly distributions on our Class A Common Shares and Class B-1 Common Shares and our
plan to pay quarterly distributions to the members of RMR LLC in connection with the quarterly dividends
to RMR Inc. shareholders. Our management fees are typically payable to us within 30 days of the end
of each month or, in the case of annual incentive business management fees earned from the Managed
Equity REITs, within 30 days following each calendar year end. Quarterly incentive fees earned from
SEVN, if any, are payable generally within 30 days following the end of the applicable quarter. Historically,
we have not experienced losses on collection of our fees and have not recorded any allowances for
bad debts.

During the fiscal year ended September 30, 2021, we paid cash distributions to the holders of our

Class A Common Shares, Class B-1 Common Shares and to the other owner of RMR LLC
membership units in the aggregate amount of $262,783, including the one-time special dividend
discussed above. On October 14, 2021, we declared a quarterly dividend on our Class A Common
Shares and Class B-1 Common Shares to our shareholders of record as of October 25, 2021 in the
amount of $0.38 per Class A Common Share and Class B-1 Common Share, or $6,264. 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 $9,446, of which $4,946 will be distributed to us based on our aggregate ownership
of 16,485,011 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 the total dividend will amount to approximately
$10,764 and we expect to pay this dividend on or about November 18, 2021. See Note 6, Shareholders’
Equity, to our consolidated financial statements included in Part IV, Item 15 of this Annual Report on
Form 10-K for more information regarding these distributions.

For the fiscal year ended September 30, 2021, pursuant to the RMR LLC operating agreement,

RMR LLC made required quarterly tax distributions to its holders of its membership units totaling
$31,469, of which $16,764 was distributed to us and $14,705 was distributed to ABP Trust, based on
each membership unit holder’s then respective ownership percentage in RMR LLC. The $16,764
distributed to us was eliminated in our consolidated financial statements included in Part IV, Item 15 of
this Annual Report on Form 10-K, and the $14,705 distributed to ABP Trust was recorded as a reduction
of their noncontrolling interest. We used a portion of these funds distributed to us to pay our tax
liabilities and amounts due under the Tax Receivable Agreement.

The Tax Receivable Agreement provides for the payment by RMR Inc. to ABP Trust of 85.0% of

the amount of 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 RMR Inc.’s dealings with ABP
Trust and (b) tax benefits related to imputed interest deemed to be paid by it as a result of the Tax

41

Receivable Agreement. See Note 5, Related Person Transactions, to our consolidated financial
statements included in Part IV, Item 15 of this Annual Report on Form 10-K. As of September 30,
2021, our consolidated balance sheet reflects a liability related to the Tax Receivable Agreement of
$27,792, of which we expect to pay $2,215 to ABP Trust during the fourth quarter of fiscal year 2022.

Their remains an ongoing possibility of prospective changes in laws and regulations, including the
possibility of significant revision to U.S. tax laws that could have an adverse impact on us and our clients.
Any increase in tax rates will adversely impact our cash flows by increasing our income tax obligations
and our quarterly tax distributions under the RMR LLC operating agreement.

Cash Flows

Our changes in cash flows for the fiscal year ended September 30, 2021 compared to the prior
fiscal year were as follows: (i) net cash from operating activities decreased from $77,497 in the prior
fiscal year to $71,794 in the current fiscal year; (ii) net cash used in investing activities decreased from
$5,920 in the prior fiscal year to $1,142 in the current fiscal year; and (iii) net cash used in financing
activities increased from $60,362 in the prior fiscal year to $280,480 in the current fiscal year.

The decrease in cash from operating activities for the fiscal year ended September 30, 2021
compared to the prior fiscal year, primarily reflects changes in working capital, offset by increases in net
income, excluding the impacts of non-cash gains. The decrease in net cash used in investing activities
for the fiscal year ended September 30, 2021 compared to the prior fiscal year was primarily due to our
purchase of 323,315 TA shares in the prior fiscal year. The increase in net cash used in financing
activities for the fiscal year ended September 30, 2021 compared to the prior fiscal year was primarily
due to a one-time, special cash dividend of $7.00 per Class A Common Share and Class B-1 Common
Share, or $219,851, paid in the current fiscal year.

As of September 30, 2021, we had no off-balance sheet arrangements that have had or that we
expect would be reasonably likely to have a material effect on our financial condition, changes in financial
condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital
resources.

Market Risk and Credit Risk

We have not invested in derivative instruments, borrowed through issuing debt securities or
transacted in foreign currencies. As a result, we are not now subject to significant direct market risk
related to interest rate changes, changes to the market standard for determining interest rates, commodity
price changes or credit risks; however, if any of these risks were to negatively impact our clients’
businesses or market capitalization, our revenues would likely decline. To the extent we change our
approach on the foregoing activities, or engage in other activities, our market and credit risks could
change. Please see Part I, Item 1A “Risk Factors” of this Annual Report on Form 10-K for the risks to us
and our clients related to the COVID-19 pandemic.

Risks Related to Cash and Short Term Investments

Our cash and cash equivalents include short term, highly liquid investments readily convertible to

known amounts of cash that have original maturities of three months or less from the date of purchase.
We invest a substantial amount of our cash in money market funds. The majority of our cash is
maintained in U.S. bank accounts. Some U.S. bank account balances exceed the Federal Deposit
Insurance Corporation insurance limit. We believe our cash and short term investments are not subject
to any material interest rate risk, equity price risk, credit risk or other market risk.

Related Person Transactions

We have relationships and historical and continuing transactions with Adam D. Portnoy, one of our

Managing Directors, as well as our clients. For further information about these and other such
relationships and related person transactions, please see Note 2, Summary of Significant Accounting
Policies and Note 5, Related Person Transactions, to our consolidated financial statements included in

42

Part IV, Item 15 of this Annual Report on Form 10-K, which is incorporated herein by reference, the
section captioned “Business” above in Part I, Item 1 of this Annual Report on Form 10-K, our other filings
with the SEC and our definitive Proxy Statement for our 2022 Annual Meeting of Shareholders, or the
2022 Proxy Statement, to be filed within 120 days after the close of the fiscal year ended September 30,
2021. In addition, for more information about these transactions and relationships and about the risks
that may arise as a result of these and other related person transactions and relationships, please see
elsewhere in this Annual Report on Form 10-K, including “Warning Concerning Forward Looking
Statements” and Part I, Item 1A “Risk Factors.” We may engage in additional transactions with related
persons, including businesses to which RMR LLC or its subsidiaries provide management services.

Critical Accounting Policies

An understanding of our accounting policies is necessary for a complete analysis of our results,

financial position, liquidity and trends. The preparation of our financial statements requires our
management to make certain critical accounting estimates and judgments that impact (i) the revenue
recognized during the reporting periods and (ii) our principles of consolidation. These accounting
estimates are based on our management’s judgment. We consider them to be critical because of their
significance to our financial statements and the possibility that future events may cause differences from
current judgments or because the use of different assumptions could result in materially different
estimates. We review these estimates on a periodic basis to test their reasonableness. Although actual
amounts likely differ from such estimated amounts, we believe such differences are not likely to be
material.

Revenue Recognition. Our principal sources of revenue are:

• business management fees, including base and incentive business management fees; and

• property management fees, including construction supervision fees and reimbursement for

certain compensation and benefits related expenses.

We recognize revenue from business management and property management fees as earned in
accordance with our management agreements. We consider the incentive business management fees
earned from the REITs that we manage to be contingent performance based fees, which we recognize as
revenue when earned at the end of each measurement period. We also recognize as revenue certain
compensation and benefits reimbursements in our capacity as property manager, at cost, when we incur
the related reimbursable compensation and benefits and other costs on behalf of our clients. See the
“Revenue Recognition” section of Note 2, Summary of Significant Accounting Policies, to our consolidated
financial statements included in Part IV, Item 15 of this Annual Report on Form 10-K for a detailed
discussion of our revenue recognition policies and our contractual arrangements.

Consolidation. Our consolidated financial statements included in Part IV, Item 15 of this Annual

Report on Form 10-K include only the accounts of the entities we control. We continually assess whether
our existing contractual rights give us the ability to direct the activities of the entities we manage that
most significantly affect the results of that entity. The activities and factors we consider include, but are
not limited to:

• our representation on the entity’s governing body;

• the size of our investment in each entity compared to the size of the entity and the size of other

investors’ interests; and

• the ability and rights to participate in significant policy making decisions and to replace our

manager of those entities.

Based on our historical assessments, we have not consolidated the entities we manage. We will
reassess these conclusions if and when facts and circumstances indicate that there are changes to the
elements evidencing control.

43

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative disclosures about market risk are set forth above in “Item 7—

Management’s Discussion and Analysis of Financial Condition and Results of Operation—Market Risk
and Credit Risk.”

Item 8.

Financial Statements and Supplementary Data

The information required by this item is included in Item 15 of this Annual Report on Form 10-K.

Item 9.

Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure

None.

Item 9A. Controls and Procedures

As of the end of the period covered by this Annual Report on Form 10-K, our management carried
out an evaluation, under the supervision and with the participation of our President and Chief Executive
Officer and our Executive Vice President, Chief Financial Officer and Treasurer, of the effectiveness of
our disclosure controls and procedures pursuant to Rules 13a-15 and 15d-15 under the Exchange Act.
Based upon that evaluation, our President and Chief Executive Officer and our Executive Vice
President, Chief Financial Officer and Treasurer concluded that our disclosure controls and procedures
are effective.

There have been no changes in our internal control over financial reporting during the quarter
ended September 30, 2021 that have materially affected, or are reasonably likely to materially affect,
our internal control over financial reporting.

Management Report on Assessment of Internal Control Over Financial Reporting

We are responsible for establishing and maintaining adequate internal control over financial

reporting. Our internal control system is designed to provide reasonable assurance to our management
and Board of Directors regarding the preparation and fair presentation of published financial
statements. All internal control systems, no matter how well designed, have inherent limitations.
Therefore, even those systems determined to be effective can provide only reasonable assurance with
respect to financial statement preparation and presentation.

Our management assessed the effectiveness of our internal control over financial reporting as of

September 30, 2021. In making this assessment, it used the criteria set forth by the Committee of
Sponsoring Organizations of the Treadway Commission (2013 framework) in Internal Control—
Integrated Framework. Based on this assessment, we believe that, as of September 30, 2021, our
internal control over financial reporting is effective.

Deloitte & Touche LLP, the independent registered public accounting firm that audited our 2021
Consolidated Financial Statements included in Part IV, Item 15 of this Annual Report on Form 10-K,
has issued an attestation report on our internal control over financial reporting. Its report appears
elsewhere herein.

Item 9B. Other Information

None.

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

None.

44

PART III

Item 10. Directors, Executive Officers and Corporate Governance

The information required by this Item 10 of Form 10-K will be included in the 2022 Proxy Statement

and is incorporated herein by reference.

Item 11. Executive Compensation

The information required by this Item 11 of Form 10-K will be included in the 2022 Proxy Statement

and is incorporated herein by reference.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related

Stockholder Matters

Equity Compensation Plan Information. We may grant our Class A Common Shares to our
officers and employees under the 2016 Omnibus Equity Plan adopted in 2016, or the 2016 Plan. In
addition, each of our Directors receives Class A Common Shares under the 2016 Plan as part of his or
her annual compensation for serving as a Director. The terms of grants made under the 2016 Plan
are determined by the Compensation Committee of our Board of Directors, at the time of the grant. The
following table is as of September 30, 2021.

Plan category

Equity compensation plans

approved by security holders—
2016 Plan . . . . . . . . . . . . . . . . .

Equity compensation plans not

approved by security holders . . .
Total . . . . . . . . . . . . . . . . . . . . .

Number of securities
to be issued upon
exercise of
outstanding options,
warrants and rights

Weighted-average
exercise price of
outstanding options,
warrants and rights

Number of securities
remaining available for
future issuance under
equity compensation plans
(excluding securities
reflected in column (a))

(a)

(b)

(c)

None.

None.
None.

None.

None.
None.

114,764(1)

None.
114,764(1)

(1) Consists of shares available for issuance pursuant to the terms of the 2016 Plan. Share awards

that are repurchased or forfeited will be added to the shares available for issuance under the 2016
Plan.

Other information required by this Item 12 of Form 10-K will be included in the 2022 Proxy

Statement and is incorporated herein by reference.

Item 13. Certain Relationships and Related Person Transactions, and Director Independence

The information required by this Item 13 of Form 10-K will be included in the 2022 Proxy Statement

and is incorporated herein by reference.

Item 14. Principal Accountant Fees and Services

The information required by this Item 14 of Form 10-K will be included in the 2022 Proxy Statement

and is incorporated herein by reference.

45

Item 15. Exhibits and Financial Statement Schedules

(a)

Index to Financial Statements and Financial Statement Schedules

PART IV

The following consolidated financial statements of The RMR Group Inc. are included on the pages

indicated:

Reports of Independent Registered Public Accounting Firm . . . . . . . . . . . . . . . . . . . . . . . . . . . F-1

Report of Independent Registered Public Accounting Firm . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-4

Consolidated Balance Sheets as of September 30, 2021 and 2020 . . . . . . . . . . . . . . . . . . . . . . F-5

Consolidated Statements of Income for the fiscal years ended September 30, 2021, 2020 and

2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-6

Consolidated Statements of Shareholders’ Equity for the fiscal years ended September 30,

2021, 2020 and 2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-7

Consolidated Statements of Cash Flows for the fiscal years ended September 30, 2021, 2020

and 2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-8

Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-9

All other schedules for which provision is made in the applicable accounting regulations of the

SEC are not required under the related instructions, or are inapplicable, and therefore have been
omitted.

(b) Exhibits

Exhibits to our Annual Report on Form 10-K for the fiscal year ended September 30, 2021 have

been included only with the version of that Annual Report on Form 10-K filed with the SEC.

A copy of our Annual Report on Form 10-K for the fiscal year ended September 30, 2021, including
a list of exhibits, is available free of charge upon written request to: Investor Relations, The RMR Group
Inc., Two Newton Place, 255 Washington Street, Suite 300, Newton, MA 02458-1634,
telephone (617) 796-8230.

Item 16. Form 10-K Summary

None.

46

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and the Board of Directors of The RMR Group Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of The RMR Group Inc. (the
“Company”) as of September 30, 2021 and 2020, the related consolidated statements of income,
shareholders’ equity, and cash flows for the years ended September 30, 2021 and 2020, and the related
notes (collectively referred to as the “financial statements”). In our opinion, the financial statements
present fairly, in all material respects, the financial position of the Company as of September 30, 2021
and 2020, and the results of its operations and its cash flows for the years ended September 30, 2021
and 2020, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting

Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of
September 30, 2021, based on criteria established in Internal Control—Integrated Framework (2013)
issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report
dated November 15, 2021, expressed an unqualified opinion on the Company’s internal control over
financial reporting.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility

is to express an opinion on the Company’s financial statements based on our audits. We are a public
accounting firm registered with the PCAOB and are required to be independent with respect to the
Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of
the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards
require that we plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement, whether due to error or fraud. Our audits included
performing procedures to assess the risks of material misstatement of the financial statements, whether
due to error or fraud, and performing procedures that respond to those risks. Such procedures included
examining, on a test basis, evidence regarding the amounts and disclosures in the financial
statements. Our audits also included evaluating the accounting principles used and significant estimates
made by management, as well as evaluating the overall presentation of the financial statements. We
believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current-period audit of
the financial statements that was communicated or required to be communicated to the audit committee
and that (1) relates to accounts or disclosures that are material to the financial statements and
(2) involved our especially challenging, subjective, or complex judgments. The communication of
critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole,
and we are not, by communicating the critical audit matter below, providing a separate opinion on the
critical audit matter or on the accounts or disclosures to which it relates.

Evaluation of the identification of related parties and related party transactions—Refer to Notes
1, 2 and 5 to the consolidated financial statements

Critical Audit Matter Description

As discussed in Notes 1 and 2 to the consolidated financial statements, the Company generates

its revenue by providing management services to four publicly traded equity real estate investment
trusts, three real estate operating companies, and private capital vehicles, as well as providing advisory
services to a publicly traded mortgage real estate investment trust, all of which are related parties.

F-1

These entities are considered to be related parties for the reasons discussed in Note 5 to the
consolidated financial statements. In addition, the Company has also entered into a number of other
arrangements with its related parties as further discussed in Note 5.

Given the number of related parties and related party transactions, we determined the evaluation

of the identification of related parties and related party transactions to be a critical audit matter. Auditor
judgment and effort was involved in assessing the sufficiency of the procedures the Company
performed to identify and disclose related parties and related party transactions.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the identification and disclosure of related parties and related

party transactions included the following, among others:

• We tested the effectiveness of controls over the Company’s identification of related party

relationships and transactions.

• We evaluated the process used by management to identify and disclose related parties and

related party transactions by:

◦

◦

◦

Inspecting the Company’s minutes from meetings of the Board of Directors and related
committees to determine whether there were any related parties or transactions not
previously identified.

Inspecting questionnaires completed by the Company’s directors and officers to identify
potential related party transactions.

Inquiring with executive officers, key members of management, and the Audit Committee
of the Board of Directors regarding their knowledge of the Company’s related party
transactions.

◦ Reading public filings made by the Company, in addition to external news sources for

information related to transactions between the Company and related parties to compare
to the Company’s detail of related party transactions.

◦

◦

◦

Listening to the Company’s quarterly earnings investor calls to identify any undisclosed
related parties, transactions, or agreements.

Inspecting new and amended agreements between the Company and related parties to
ensure they were properly disclosed.

Inspecting the Company’s check register and accounts payable sub-ledger to determine
whether there were any payments made or to be made to related parties for transactions
not previously identified.

/s/ Deloitte & Touche LLP

Boston, Massachusetts
November 15, 2021

We have served as the Company’s auditor since 2020.

F-2

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and the Board of Directors of The RMR Group Inc.

Opinion on Internal Control over Financial Reporting

We have audited the internal control over financial reporting of The RMR Group Inc. (the “Company”)

as of September 30, 2021, based on criteria established in Internal Control—Integrated Framework
(2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In
our opinion, the Company maintained, in all material respects, effective internal control over financial
reporting as of September 30, 2021, based on criteria established in Internal Control—Integrated
Framework (2013) issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting

Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year
ended September 30, 2021, of the Company and our report dated November 15, 2021, expressed an
unqualified opinion on those financial statements.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial
reporting and for its assessment of the effectiveness of internal control over financial reporting, included
in the accompanying Management Report on Assessment of Internal Control over Financial Reporting.
Our responsibility is to express an opinion on the Company’s internal control over financial reporting
based on our audit. We are a public accounting firm registered with the PCAOB and are required to be
independent with respect to the Company in accordance with the U.S. federal securities laws and the
applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require

that we plan and perform the audit to obtain reasonable assurance about whether effective internal
control over financial reporting was maintained in all material respects. Our audit included obtaining an
understanding of internal control over financial reporting, assessing the risk that a material weakness
exists, testing and evaluating the design and operating effectiveness of internal control based on the
assessed risk, and performing such other procedures as we considered necessary in the circumstances.
We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable
assurance regarding the reliability of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting principles. A company’s internal
control over financial reporting includes those policies and procedures that (1) pertain to the
maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the company; (2) provide reasonable assurance that transactions are
recorded as necessary to permit preparation of financial statements in accordance with generally
accepted accounting principles, and that receipts and expenditures of the company are being made only
in accordance with authorizations of management and directors of the company; and (3) provide
reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or
disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect

misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the
risk that controls may become inadequate because of changes in conditions, or that the degree of
compliance with the policies or procedures may deteriorate.

/s/ Deloitte & Touche LLP

Boston, Massachusetts
November 15, 2021

F-3

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors of The RMR Group Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated statements of comprehensive income,
shareholders’ equity and cash flows of The RMR Group Inc. (the Company) for the year ended
September 30, 2019 and the related notes (collectively referred to as the “consolidated financial
statements”). In our opinion, the consolidated financial statements present fairly, in all material respects,
the results of its operations and its cash flows for the year ended September 30, 2019, in conformity
with U.S. generally accepted accounting principles.

Adoption of New Accounting Standard

As discussed in Note 2 to the consolidated financial statements, the Company changed its method

for accounting for revenue from contracts with customers in the year ended September 30, 2019.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility

is to express an opinion on the Company’s financial statements based on our audit. We are a public
accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB)
and are required to be independent with respect to the Company in accordance with the U.S. federal
securities laws and the applicable rules and regulations of the Securities and Exchange Commission and
the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement, whether due to error or fraud. The Company is not required to
have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part
of our audit we are required to obtain an understanding of internal control over financial reporting but not
for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over
financial reporting. Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the
financial statements, whether due to error or fraud, and performing procedures that respond to those
risks. Such procedures included examining, on a test basis, evidence regarding the amounts and
disclosures in the financial statements. Our audit also included evaluating the accounting principles
used and significant estimates made by management, as well as evaluating the overall presentation of
the financial statements. We believe that our audit provides a reasonable basis for our opinion.

/s/ Ernst & Young LLP

We served as the Company’s auditor from 2015 to 2020.

Boston, Massachusetts
November 22, 2019

F-4

The RMR Group Inc.
Consolidated Balance Sheets
(dollars in thousands, except per share amounts)

Assets
Current assets:

Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Due from related parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Prepaid and other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Property and equipment, net
Due from related parties, net of current portion . . . . . . . . . . . . . . . . . . . . . . .
Equity method investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Goodwill and intangible assets, net of amortization . . . . . . . . . . . . . . . . . . . .
Operating lease right of use assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Deferred tax asset
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other assets, net of amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Liabilities and Equity
Current liabilities:

Other reimbursable expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounts payable and accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . .
Operating lease liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Employer compensation liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating lease liabilities, net of current portion . . . . . . . . . . . . . . . . . . . . . .
Amounts due pursuant to tax receivable agreement, net of current portion . . .
Employer compensation liability, net of current portion . . . . . . . . . . . . . . . . .
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Commitments and contingencies
Equity:

Class A common stock, $0.001 par value; 31,600,000 shares authorized;

15,485,236 and 15,395,641 shares issued and outstanding,
respectively . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Class B-1 common stock, $0.001 par value; 1,000,000 shares authorized,

issued and outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Class B-2 common stock, $0.001 par value; 15,000,000 shares authorized,
issued and outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Additional paid in capital
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Cumulative common distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total shareholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Noncontrolling interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total liabilities and equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

See accompanying notes.

F-5

September 30,

2021

2020

$ 159,835
88,661
6,021
254,517
2,218
14,331
39,476
2,094
32,293
18,671
134,311
$ 497,911

$ 55,115
15,027
4,922
6,076
81,140
29,148
25,577
14,331
150,196

$369,663
82,605
3,877
456,145
2,299
7,764
19,619
2,136
34,663
23,900
143,727
$690,253

$ 56,079
16,984
4,407
4,298
81,768
32,030
27,789
7,764
149,351

15

1

15

1

15
109,910
321,945
(236,766)
195,120
152,595
347,715
$ 497,911

15
106,622
286,249
(96,983)
295,919
244,983
540,902
$690,253

The RMR Group Inc.
Consolidated Statements of Income
(amounts in thousands, except per share amounts)

Fiscal Year Ended September 30,

2021

2020

2019

Revenues:

Management services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Incentive business management fees . . . . . . . . . . . . . . . . . . . .
Advisory services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total management and advisory services revenues . . . . . . . .
Reimbursable compensation and benefits . . . . . . . . . . . . . . . .
Reimbursable equity based compensation . . . . . . . . . . . . . . . .
Other reimbursable expenses . . . . . . . . . . . . . . . . . . . . . . . . .
Total reimbursable costs . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Expenses:

Compensation and benefits . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity based compensation . . . . . . . . . . . . . . . . . . . . . . . . . . .
Separation costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total compensation and benefits expense . . . . . . . . . . . . . . .
General and administrative . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other reimbursable expenses . . . . . . . . . . . . . . . . . . . . . . . . .
Transaction and acquisition related costs . . . . . . . . . . . . . . . . .
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . .
Total expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Interest and other income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Impairment loss on Tremont Mortgage Trust investment
. . . . . . . .
Gain on Tremont Mortgage Trust investment
. . . . . . . . . . . . . . . .
Equity in earnings of investees . . . . . . . . . . . . . . . . . . . . . . . . . .
Unrealized gain (loss) on equity method investment accounted for

under the fair value option . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income before income tax expense . . . . . . . . . . . . . . . . . . . . . . .
Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income attributable to noncontrolling interest
. . . . . . . . . . . . .
Net income attributable to The RMR Group Inc. . . . . . . . . . . . . . .
Weighted average common shares outstanding—basic . . . . . . . .

$171,102
620
3,956
175,678
52,369
9,154
370,037
431,560
607,238

119,644
12,022
4,525
136,191
26,961
370,037
984
973
535,146
72,092
760
—
2,059
443

$168,766

$178,075
— 120,094
3,169
301,338
51,029
6,461
354,540
412,030
713,368

2,911
171,677
52,344
4,912
360,572
417,828
589,505

121,386
7,828
1,881
131,095
26,514
360,572
1,618
968
520,767
68,738
4,451
—
—
1,545

114,529
9,040
7,050
130,619
28,706
354,540
698
1,017
515,580
197,788
8,770
(6,213)
—
719

18,811
94,165
(13,152)
81,013
(45,317)
$ 35,696
16,266

3,151
77,885
(11,552)
66,333
(37,541)
$ 28,792
16,194

(4,700)
196,364
(27,320)
169,044
(94,464)
$ 74,580
16,132

Weighted average common shares outstanding—diluted . . . . . . .

31,282

31,194

16,143

Net income attributable to The RMR Group Inc. per common

share—basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Net income attributable to The RMR Group Inc. per common

share—diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$

$

2.18

2.15

$

$

1.77

1.75

$

$

4.59

4.59

See accompanying notes.

F-6

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The RMR Group Inc.
Consolidated Statements of Cash Flows
(dollars in thousands)

Cash Flows from Operating Activities:

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Adjustments to reconcile net income to net cash from operating

activities:
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . .
Straight line office rent
. . . . . . . . . . . . . . . . . . . . . . . . . . . .
Amortization expense related to other assets . . . . . . . . . . . .
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating expenses paid in The RMR Group Inc. common

shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity in earnings of investees . . . . . . . . . . . . . . . . . . . . . .
Distributions from equity method investment . . . . . . . . . . . . .
. . . .
Impairment loss on Tremont Mortgage Trust investment
. . . . . . . . . . . .
Gain on Tremont Mortgage Trust investment
Unrealized (gain) loss on equity method investment

accounted for under the fair value option . . . . . . . . . . . . .
Changes in assets and liabilities: . . . . . . . . . . . . . . . . . . . . .
Due from related parties . . . . . . . . . . . . . . . . . . . . . . . . .
Prepaid and other current assets . . . . . . . . . . . . . . . . . . .
Other reimbursable expenses . . . . . . . . . . . . . . . . . . . . .
Accounts payable and accrued expenses . . . . . . . . . . . . .
Net cash from operating activities . . . . . . . . . . . . . . . . . . . .

Cash Flows from Investing Activities:
Purchase of property and equipment
Equity method investment in TravelCenters of America Inc.
Equity method investment in Tremont Mortgage Trust
Advances to Tremont Mortgage Trust under the Credit

. . . . . . . . . . . . . . . . . . .
. . .
. . . . . . .

Fiscal Year Ended September 30,
2019
2020
2021

$ 81,013

$ 66,333

$169,044

973
3
9,416
5,229

4,122
(443)
1,456
—
(2,059)

968
154
9,416
1,829

3,785
(1,545)
736
—
—

1,017
391
9,416
(3)

4,948
(719)
549
6,213
—

(18,811)

(3,151)

4,700

(4,278)
(2,144)
(964)
(1,719)
71,794

(1,142)
—
—

10,400
1,971
(9,830)
(3,569)
77,497

(601)
(5,319)
—

(64,849)
(845)
65,909
2,443
198,214

(702)
(8,382)
(5,650)

Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

—

— (14,220)

Repayments from Tremont Mortgage Trust under the Credit

Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net cash used in investing activities . . . . . . . . . . . . . . . . . . .

—
(1,142)

—
(5,920)

14,220
(14,734)

Cash Flows from Financing Activities:

Distributions to noncontrolling interest . . . . . . . . . . . . . . . . . . .
Distributions to common shareholders . . . . . . . . . . . . . . . . . . .
Repurchase of common shares . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . .
Payments under the Tax Receivable Agreement
Net cash used in financing activities . . . . . . . . . . . . . . . . . . .
Effect of exchange rate fluctuations on cash and cash equivalents
(Decrease) increase in cash and cash equivalents . . . . . . . . . . .
Cash and cash equivalents at beginning of period . . . . . . . . . . . .
Cash and cash equivalents at end of period . . . . . . . . . . . . . . . .
Supplemental Cash Flow Information and Non-Cash

Activities:
Income taxes paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Fair value of share based payments recorded . . . . . . . . . . . . .
Recognition of right of use assets and related lease liabilities .
Equity method investment in Seven Hills Realty Trust . . . . . . . .
. . . . . . .
Equity method investment in Tremont Mortgage Trust

See accompanying notes.

F-8

(137,705)
(139,783)
(834)
(2,158)
(280,480)
—
(209,828)
369,663
$ 159,835

(32,939)
(24,789)
(523)
(2,111)
(60,362)
—
11,215
358,448
$369,663

(55,975)
(22,727)
(827)
(2,266)
(81,795)
(85)
101,600
256,848
$358,448

$ 10,047
9,154
$
$
2,249
$ (8,513) $
$
6,454
$

$ 10,189
$ 4,912
$ 40,765

$ 29,620
$ 6,461
—
$
—
— $
—
— $

The RMR Group Inc.

Notes to Consolidated Financial Statements

(dollars in thousands, except per share amounts)

Note 1. Organization

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 September 30, 2021, RMR Inc. owned 15,485,236 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 52.4% of the economic interest of RMR LLC
as of September 30, 2021. 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 47.6% of the economic interest of RMR LLC as of September 30, 2021, which is presented
as a noncontrolling interest within the 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
September 30, 2021, managed a diverse portfolio of real estate and real estate related businesses.
RMR LLC provides management services to four publicly traded equity 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. DHC, ILPT, OPI and SVC are collectively
referred to as the Managed Equity REITs.

RMR LLC also provides management services to three real estate operating companies: 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, and many of the U.S. hotels that Sonesta operates are owned by SVC; and
TravelCenters of America Inc., or TA, an operator and franchisor of travel centers primarily along the U.S.
interstate highway system, many of which are owned by SVC, and standalone truck service facilities.
Hereinafter, Five Star, Sonesta and TA are collectively referred to as the Managed Operating Companies.

In addition, RMR LLC provides management services to private capital vehicles, including ABP
Trust and its subsidiaries, or collectively ABP Trust, and other private entities that own commercial real
estate, of which certain of our Managed Equity REITs own minority equity interests. In these financial
statements we refer to these clients as the Managed Private Real Estate Capital clients.

RMR LLC’s wholly owned subsidiary, Tremont Realty Capital LLC (formerly known as Tremont
Realty Advisors LLC), or Tremont Realty Capital, an investment adviser registered with the Securities
and Exchange Commission, or SEC, provides advisory services for Seven Hills Realty Trust (formerly
known as RMR Mortgage Trust, or RMRM), or SEVN. SEVN is a publicly traded mortgage REIT that
focuses on originating and investing in first mortgage whole loans secured by middle market and
transitional commercial real estate. Until September 30, 2021, Tremont Realty Capital also provided
advisory services to Tremont Mortgage Trust, or TRMT, a publicly traded mortgage REIT. On
September 30, 2021, TRMT merged with and into SEVN (then RMRM), or the Merger, with SEVN

F-9

The RMR Group Inc.

Notes to Consolidated Financial Statements (Continued)

(dollars in thousands, except per share amounts)

Note 1. Organization (Continued)

continuing as the surviving company. Tremont Realty Capital continues to manage the combined
company pursuant to SEVN’s management agreement with Tremont Realty Capital and waived the
termination fee that would otherwise be payable by TRMT as a result of the Merger. Tremont Realty
Capital has in the past and may in the future manage additional accounts that invest in commercial real
estate debt, including secured mortgage debt. Employees of Tremont Realty Capital also act as a
transaction broker for non-investment advisory clients for negotiated fees, which we refer to as the
Tremont business.

The Managed Equity REITs, SEVN, and, until September 30, 2021, TRMT, are collectively referred

to as the Managed REITs or the Managed Public Real Estate Capital clients.

Note 2. Summary of Significant Accounting Policies

Basis of Presentation

All intercompany transactions and balances with or among our consolidated entities have been

eliminated.

Use of Estimates

Preparation of these financial statements in conformity with U.S. Generally Accepted Accounting
Principles, or 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.

Revenue Recognition

Revenues from services that we provide are recognized as earned over time as the services

provided represent performance obligations that are satisfied over time.

Business Management Agreements—Managed Equity REITs

Base Business Management Fees—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 of RMR LLC.

Our management agreements with the Managed Equity REITs automatically extend on

December 31st of each year and have terms thereafter that end on the 20th anniversary of the date of
each extension. Each of the Managed Equity REITs has the right to terminate each management

F-10

The RMR Group Inc.

Notes to Consolidated Financial Statements (Continued)

(dollars in thousands, except per share amounts)

Note 2. Summary of Significant Accounting Policies (Continued)

agreement: (i) at any time upon 60 days’ written notice for convenience, (ii) immediately upon written
notice for cause, as defined in the agreements, (iii) upon written notice given within 60 days after the end
of an applicable calendar year for a performance reason, as defined in the agreements, and (iv) by
written notice during the 12 months following a change of control of RMR LLC, as defined in the
agreements. We have the right to terminate the management agreements for good reason, as defined
therein.

Under our management agreements with the Managed Equity REITs, if a Managed Equity REIT

terminates our management agreements for convenience, or if we terminate one or both of our
management agreements with a Managed Equity REIT for good reason, the Managed Equity REIT is
obligated to pay us a termination fee in an amount equal to the sum of the present values of the Managed
Equity REIT’s monthly future fees, as defined therein, for the terminated management agreement(s)
for the remaining term, assuming it had not been terminated. If a Managed Equity REIT terminates one
or both of our management agreements for a performance reason, as defined therein, the Managed
Equity REIT has agreed to pay to us the termination fee calculated as described above, but assuming
a remaining term of 10 years. No termination fee is payable by a Managed Equity REIT if it terminates
one or both of our management agreements for cause or as a result of a change of control of us, as
defined in the applicable management agreement.

For the fiscal years ended September 30, 2021, 2020 and 2019, we earned aggregate base
business management fees from the Managed Equity REITs of $93,153, $94,354 and $103,800,
respectively.

Incentive Business Management Fees—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 business management 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 Managed
Equity REIT 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.

RMR LLC and each Managed Equity REIT amended their business management agreements
effective August 1, 2021 to replace the benchmark indexes used in the calculation of incentive business
management fees. Pursuant to the amendment, for periods beginning on and after August 1, 2021,
each Managed Equity REIT’s respective subsector index of the MSCI U.S. REIT indexes will replace
the discontinued SNL U.S. REIT indexes and be used to calculate benchmark returns per share for
purposes of determining any incentive business management fee payable by the Managed Equity REIT
to RMR LLC. The replacement indexes are: MSCI U.S. REIT/Health Care Index for DHC; MSCI U.S.
REIT/Industrial REIT Index for ILPT; MSCI U.S. REIT/Office REIT Index for OPI; and MSCI U.S. REIT/
Hotel & Resort REIT Index for SVC. For periods prior to August 1, 2021, the previously used and now

F-11

The RMR Group Inc.

Notes to Consolidated Financial Statements (Continued)

(dollars in thousands, except per share amounts)

Note 2. Summary of Significant Accounting Policies (Continued)

discontinued SNL U.S. REIT indexes will continue to be used. Accordingly, the calculation of incentive
business management fees for the next three measurement periods will continue to use the SNL U.S.
REIT indexes in calculating the benchmark returns for periods through July 31, 2021.

We did not earn incentive business management fees from the Managed Equity REIT for the
calendar years 2020 or 2019 and, as a result we did not recognize any incentive business management
fees from the Managed Equity REITs for the fiscal years ended September 30, 2021 and 2020. For
the fiscal year ended September 30, 2019, we recognized aggregate incentive business management
fees earned from the Managed Equity REITs for the calendar year 2018 of $120,094.

Other Management Agreements

Managed Operating Companies—We earn management fees by providing continuous services

pursuant to the management agreements from the Managed Operating Companies 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; and (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. These management
fees are estimated and payable monthly in advance.

For the fiscal years ended September 30, 2021, 2020 and 2019, we earned aggregate fees from

the Managed Operating Companies of $25,347, $23,376 and $26,087, respectively.

Managed Private Real Estate Capital—We earn management fees from the Managed Private Real

Estate Capital clients based on a percentage of average invested capital, as defined in the applicable
management agreements. These management fees are payable monthly in arrears.

For the fiscal years ended September 30, 2021, 2020 and 2019, we earned aggregate management

fees from the Managed Private Real Estate Capital clients of $4,758, $2,530 and $2,384, respectively.

Property Management Agreements

We earn property management fees by providing continuous services pursuant to property
management agreements with our clients. 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 services in connection with certain construction
activities undertaken at the managed properties up to 5.0% of the cost of such construction.

In June 2021, we and DHC and SVC amended our respective property management agreements

to, among other things, provide for our oversight of any major capital projects and repositionings at
DHC’s senior living communities, including DHC’s senior living communities managed by Five Star, and
SVC’s hotels, including SVC’s hotels managed by Sonesta, as DHC or SVC, as applicable, may
request from time to time. We receive the same fee previously paid to Five Star and Sonesta, respectively,
for these services, which is equal to 3.0% of the cost of any such major capital project or repositioning.

For the fiscal years ended September 30, 2021, 2020 and 2019, we earned aggregate property

management fees of $47,377, $47,690 and $45,550, respectively.

F-12

The RMR Group Inc.

Notes to Consolidated Financial Statements (Continued)

(dollars in thousands, except per share amounts)

Note 2. Summary of Significant Accounting Policies (Continued)

Management Agreements with Advisory Clients

Tremont Realty Capital is primarily compensated pursuant to its management agreements with
SEVN (beginning January 6, 2021) and TRMT (until September 30, 2021 when it was terminated in
connection with the Merger) at an annual rate of 1.5% of SEVN’s and TRMT’s equity, as defined in the
applicable agreements. Tremont Realty Capital waived any business management fees otherwise
due and payable by TRMT pursuant to the management agreement for the period beginning July 1,
2018 until December 31, 2020.

Tremont Realty Capital may also earn an incentive fee under its management agreements with
SEVN (beginning the second calendar quarter of 2021) and TRMT (until September 30, 2021) equal to
the difference between: (a) the product of (i) 20% and (ii) the difference between (A) SEVN’s and
TRMT’s core earnings, as defined in the applicable agreements, for the most recent 12 month period
(or such lesser number of completed calendar quarters, if applicable), including the calendar quarter (or
part thereof) for which the calculation of the incentive fee is being made, and (B) the product of
(1) SEVN’s and TRMT’s equity in the most recent 12 month period (or such lesser number of completed
calendar quarters, if applicable), including the calendar quarter (or part thereof) for which the
calculation of the incentive fee is being made, and (2) 7% per year and (b) the sum of any incentive
fees paid to Tremont Realty Capital with respect to the first three calendar quarters of the most recent
12 month period (or such lesser number of completed calendar quarters preceding the applicable period,
if applicable). No incentive fee shall be payable with respect to any calendar quarter unless core
earnings for the 12 most recently completed calendar quarters (or such lesser number of completed
calendar quarters from January 5, 2021 for SEVN) in the aggregate is greater than zero. The incentive
fee may not be less than zero. Tremont Realty Capital waived any incentive fees otherwise due and
payable by TRMT pursuant to the management agreement prior to December 31, 2020, and as a result,
Tremont Realty Capital could not earn any incentive fees from TRMT for the fiscal years ended
September 31, 2020 and 2019. For the fiscal year ended September 30, 2021, Tremont Realty Capital
earned incentive fees of $620 from TRMT. No incentive fees were earned from SEVN for the fiscal year
ended September 30, 2021.

RMR Advisors LLC, or RMR Advisors, merged into Tremont Realty Capital on January 6, 2021,
and previously provided advisory services for SEVN (then RMRM). Until January 5, 2021, RMR Advisors
was compensated pursuant to its agreement with SEVN (then RMRM) at an annual rate of 0.85% of
SEVN’s (then RMRM’s) average daily managed assets. Average daily managed assets included the net
asset value attributable to SEVN’s (then RMRM’s) outstanding common shares and cash on hand,
plus the liquidation preference of SEVN’s (then RMRM’s) outstanding preferred shares and the principal
amount of any borrowings, including from banks or evidenced by notes, commercial paper or other
similar instruments issued by SEVN (then RMRM).

For the fiscal years ended September 30, 2021, 2020 and 2019, Tremont Realty Capital or RMR
Advisors, as applicable, earned advisory services revenue from SEVN and TRMT of $3,956, $2,911
and $3,169, respectively.

The Tremont business earns between 0.5% and 1.0% of the aggregate principal amounts of any

loans it brokers. For the fiscal years ended September 30, 2021, 2020 and 2019, the Tremont business
earned fees for such brokerage services of $467, $816 and $194, respectively, which amounts are
included in management services revenue in our consolidated statements of income.

Reimbursable Costs

In accordance with Accounting Standards Update, or ASU, No. 2014-09, Revenue from Contracts
with Customers, which has been codified as ASC Section 606, we have determined that we control the

F-13

The RMR Group Inc.

Notes to Consolidated Financial Statements (Continued)

(dollars in thousands, except per share amounts)

Note 2. Summary of Significant Accounting Policies (Continued)

services provided by third parties for certain of our clients and therefore account for the cost of these
services and the related reimbursement revenue on a gross basis.

Reimbursable Compensation and Benefits. Reimbursable compensation and benefits include
reimbursements, at cost, that arise primarily from services our employees provide pursuant to our
property management agreements at the properties of our clients. A significant portion of these
compensation and benefits are charged or passed through to and were paid by tenants of our clients.
We recognize the revenue for reimbursements when we incur the related reimbursable compensation
and benefits expense on behalf of our clients. For the fiscal years ended September 30, 2021, 2020
and 2019, we realized reimbursable compensation and benefits of $52,369, $52,344 and $51,029,
respectively.

Reimbursable Equity Based Compensation. Reimbursable equity based compensation includes
grants of common shares from our clients 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 consolidated statements of
income over the requisite service periods. We record an equal offsetting amount as equity based
compensation expense for the value of our clients’ common shares granted to certain of our officers and
employees. For the fiscal years ended September 30, 2021, 2020 and 2019, we realized reimbursable
equity based compensation from our clients of $9,154, $4,912 and $6,461, respectively.

Other Reimbursable Expenses. Other reimbursable expenses include reimbursements that arise

from services we provide pursuant to our property management agreements, which include third party
costs related to matters such as maintenance and repairs, security and cleaning services, a significant
portion of which are charged or passed through to and were paid by tenants of our clients. We have
determined that we control the services provided by third parties for certain of our clients and therefore
we account for the cost of these services and the related reimbursement revenue on a gross basis.

For the fiscal years ended September 30, 2021, 2020 and 2019, we realized other reimbursable

expenses reflecting corresponding amounts in revenue and expense of $370,037, $360,572 and
$354,540, respectively. Our consolidated balance sheets as of September 30, 2021 and 2020 also
include other reimbursable expenses of $55,115 and $56,079, respectively.

Equity Method Investments

Tremont Mortgage Trust

Until the Merger on September 30, 2021, we accounted for our investment in TRMT using the
equity method of accounting because we were deemed to exert significant influence, but not control,
over TRMT’s most significant activities. Pursuant to the equity method, we recorded our share of earnings
from our investment in TRMT in equity in earnings of investees in our consolidated statements of
income which totaled $443, $1,545 and $719 for the fiscal years ended September 30, 2021, 2020 and
2019, respectively. We received aggregate distributions from TRMT of $1,456, $736 and $549 during
the fiscal years ended September 30, 2021, 2020 and 2019, respectively.

Also pursuant to the equity method, we performed periodic evaluations of potential impairment of

our investment in TRMT and recorded an impairment charge to reduce the carrying value of our TRMT
investment to its fair value when determining, based on the length of time and the extent to which the
market value was below our carrying value, that the decline in fair value was other than temporary. We
determined fair value using the closing price of TRMT common shares, a Level 1 fair value input, as

F-14

The RMR Group Inc.

Notes to Consolidated Financial Statements (Continued)

(dollars in thousands, except per share amounts)

Note 2. Summary of Significant Accounting Policies (Continued)

of the reporting period end date in which an impairment was recorded. During the fiscal year ended
September 30, 2019, we recorded an impairment charge of $6,213 related to our investment in TRMT.

Immediately prior to the consummation of the Merger, Tremont Realty Capital owned 1,600,100, or
approximately 19.3%, of TRMT’s then outstanding common shares with a cost basis of $6,454. Pursuant
to the Merger, each common share of TRMT converted to 0.516 common shares of SEVN. Upon
completion of the conversion, we elected the fair value option to account for our equity method
investment in the surviving entity, SEVN. As a result, we recorded a gain of $2,059 equal to the difference
between the cost basis of our investment in TRMT and the fair value of our investment in SEVN at the
time of the Merger.

Seven Hills Realty Trust

As a result of the Merger, Tremont Realty Capital owned 825,651, or approximately 5.7% of

SEVN’s outstanding common shares as of September 30, 2021. We account for our investment in
SEVN using the equity method of accounting because we are deemed to exert significant influence,
but not control, over SEVN’s most significant activities. As discussed above, we elected the fair value
option to account for our equity method investment in SEVN and determine fair value using the closing
price of SEVN’s common shares as of the end of the period, which is a Level 1 fair value input. The
aggregate market value of our investment in SEVN at September 30, 2021 and at the time of the Merger,
based on quoted market prices, was $8,513 and is included in equity method investments in our
consolidated balance sheets.

TravelCenters of America Inc.

As of September 30, 2021, we owned 621,853, or approximately 4.3%, of TA’s outstanding
common shares. 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 as of the end of the period, which is a Level 1 fair
value input.

The aggregate market value of our investment in TA at September 30, 2021 and 2020, based on

quoted market prices, was $30,963 and $12,152, respectively, and is included in equity method
investments in our consolidated balance sheets. The unrealized gain (loss) in our consolidated statements
of income related to our investment in TA was $18,811, $3,151 and $(4,700) for the fiscal years ended
September 30, 2021, 2020 and 2019, respectively.

Variable Interest Entities

We regularly evaluate our relationships and investments to determine if they constitute variable
interests. A variable interest is an investment or interest that will absorb portions of an entity’s expected
losses or receive portions of an entity’s expected returns. If we determine we have a variable interest
in an entity, we evaluate whether such interest is in a variable interest entity, or VIE. Under the VIE model,
we would be required to consolidate a VIE we manage if we are determined to be the primary
beneficiary of the entity. We assessed whether we must consolidate any of the entities we manage.
Consideration of factors included, but was not limited to, our representation on the entity’s governing
body, the size of our investment in each entity compared to the size of the entity and the size of other
investors’ interests, the ability and rights to participate in significant policy making decisions and to replace
the manager of those entities. Based on this assessment, we concluded that we are not required to

F-15

The RMR Group Inc.

Notes to Consolidated Financial Statements (Continued)

(dollars in thousands, except per share amounts)

Note 2. Summary of Significant Accounting Policies (Continued)

consolidate any of our clients. The relationships and investments related to entities in which we have a
variable interest are summarized in Note 5, Related Person Transactions.

Cash and Cash Equivalents

We consider highly liquid investments with original maturities of three months or less on the date
of purchase to be cash equivalents, the majority of which is held at major commercial banks. Certain
cash account balances exceed Federal Deposit Insurance Corporation insurance limits of $250,000 per
account and, as a result, there is a concentration of credit risk related to amounts in excess of the
insurance limits. We regularly monitor the financial stability of these financial institutions and believe
that we are not exposed to any significant credit risk in cash and cash equivalents.

Property and Equipment

Property and equipment are stated at cost. Depreciation of furniture and equipment is computed
using the straight line method over estimated useful lives ranging from three to ten years. Depreciation
for leasehold improvements is computed using the straight line method over the term of the lesser of their
useful lives or related lease agreements. Capitalized software costs are depreciated using the straight
line method over useful lives ranging between three and five years.

The following is a summary of property and equipment presented in our consolidated balance

sheets:

September 30,

2021

2020

Furniture and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Leasehold improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Capitalized software costs . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 4,609
260
284

$ 4,748
876
189

Total property and equipment . . . . . . . . . . . . . . . . . . . . . . . .
Accumulated depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5,153
(2,935)

5,813
(3,514)

Property and equipment, net

. . . . . . . . . . . . . . . . . . . . . . . .

$ 2,218

$ 2,299

Depreciation expense related to property and equipment and capitalized software costs for the

fiscal years ended September 30, 2021, 2020 and 2019, was $931, $922 and $966, respectively.

Goodwill and Intangible Assets

Goodwill represents the costs of business acquisitions in excess of the fair value of identifiable
net assets acquired. We evaluate the recoverability of goodwill annually in the fourth quarter of each
fiscal year, or more frequently, if events or changes in circumstances indicate that goodwill might be
impaired. If our review indicates that the carrying amount of goodwill exceeds its fair value, we would
reduce the carrying amount of goodwill to fair value.

The following is a summary of goodwill and intangible assets, net of amortization, presented in

our consolidated balance sheets:

Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$1,859

$1,859

Intangible assets, net of amortization . . . . . . . . . . . . . . . . . . . . .

235

277

Goodwill and intangible assets, net of amortization . . . . . . . . .

$2,094

$2,136

September 30,

2021

2020

F-16

The RMR Group Inc.

Notes to Consolidated Financial Statements (Continued)

(dollars in thousands, except per share amounts)

Note 2. Summary of Significant Accounting Policies (Continued)

Equity-Based Compensation

The awards made under our share award plan to our Directors, officers and employees to date,
have been shares of Class A common stock of RMR Inc., or Class A Common Shares. Shares issued
to Directors vest immediately. Shares issued to our officers and 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 expenses in our consolidated statements of income.

Other Assets

On June 5, 2015 in connection with the formation of RMR Inc., each of DHC, OPI (then Government
Properties Income Trust, or GOV, and Select Income REIT, or SIR) and SVC contributed cash and shares
with a combined value of $167,764. The consideration received from such Managed Equity REITs for
our Class A Common Shares represented a discount to the fair value of RMR Inc.’s Class A Common
Shares in the amount of $193,806, which we recorded in other assets. The other assets are being
amortized against revenue recognized related to the management agreements using the straight line
method through the period ended December 31, 2035. For the fiscal years ended September 30, 2021,
2020 and 2019, we reduced revenue by $9,416 each year, related to the amortization of these other
assets. As of September 30, 2021, the remaining amount of these other assets to be amortized was
$134,311.

Transaction and Acquisition Related Costs

Transaction and acquisition related costs include costs related to completed and potential
management services contracts, acquisitions and other strategic transactions. Such costs include
underwriting expenses, commissions paid to third-party broker dealers, legal, accounting, valuation,
other professional or consulting and regulatory filing fees. Transaction and acquisition related costs are
expensed as incurred.

Recent Accounting Pronouncements

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. On October 1, 2020, we adopted ASU No. 2016-13. We have not historically
experienced credit losses from our clients and as a result, the adoption of ASU No. 2016-13 did not
have a material impact on our consolidated financial statements.

Note 3. Income Taxes

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

F-17

The RMR Group Inc.

Notes to Consolidated Financial Statements (Continued)

(dollars in thousands, except per share amounts)

Note 3. Income Taxes (Continued)

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. During the fiscal years ended September 30, 2021,
2020 and 2019, income before taxes was derived solely from domestic operations and amounted to
$94,165, $77,885 and $196,364, respectively.

We had a provision for income taxes which consists of the following:

Fiscal Year Ended September 30,

2021

2020

2019

Current:

Federal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 5,820

$ 7,138

$20,020

State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2,103

2,584

7,302

Deferred:

Federal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3,834
1,395

1,252
578

(28)
26

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$13,152

$11,552

$27,320

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

Fiscal Year Ended September 30,

2021

2020

2019

Income taxes computed at the federal statutory

rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
State taxes, net of federal benefit . . . . . . . . . . . . . . .
Permanent items . . . . . . . . . . . . . . . . . . . . . . . . . . .
Net income attributable to noncontrolling interest . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other(1)

3.1%
0.6%

21.0% 21.0% 21.0%
2.9%
2.9%
0.1%
1.0%
(10.1)% (10.1)% (10.1)%
—%
—%

(0.6)%

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

14.0% 14.8% 13.9%

(1)

In December 2020, the Internal Revenue Service and Department of Treasury released final
regulations which, among other clarifications, established the effective date as it relates to limitations
on the deductibility of certain executive compensation. The final regulations provide that the
application of the limit applies to deductions after December 18, 2020. As such, during the
three months ended December 31, 2020, we reduced our provision for income taxes for limitations
applied prior to the effective date by $520, or $0.02 per diluted share.

The components of the deferred tax assets as of September 30, 2021 and 2020 are entirely

comprised of the outside basis difference in our partnership interest in RMR LLC.

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 September 30, 2021, 2020 and 2019, we had no uncertain tax
positions.

F-18

The RMR Group Inc.

Notes to Consolidated Financial Statements (Continued)

(dollars in thousands, except per share amounts)

Note 4. Fair Value of Financial Instruments

As of September 30, 2021 and 2020, the fair values of our financial instruments, which include

cash and cash equivalents, amounts due from related parties and accounts payable and accrued
expenses, which include liabilities related to other reimbursable expenses, were not materially different
from their carrying values due to the short term nature of these financial instruments.

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.

The following are our assets and liabilities that have been measured at fair value using Level 1

inputs in the fair value hierarchy as of September 30, 2021 and 2020:

Money market funds included in cash and cash equivalents . . . . . . . . . . . . . .
Current portion of due from related parties related to share based payment

awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Long term portion of due from related parties related to share based payment
awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity method investment in SEVN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity method investment in TA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Current portion of employer compensation liability related to share based

September 30,

2021

2020

$131,065

$341,612

6,076

4,298

14,331
8,513
30,963

7,764
—
12,152

payment awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6,076

4,298

Long term portion of employer compensation liability related to share based

payment awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

14,331

7,764

Note 5. Related Person Transactions

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 September 30, 2021, Adam D. Portnoy beneficially owned, in aggregate, (i) 170,502
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 the chair of the board of trustees of each of the Managed 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 and TA, a director of Sonesta (and its parent) and the controlling
shareholder of Sonesta (and its parent). Jennifer B. Clark, our other Managing Director, is a managing
director of Five Star, a managing trustee of OPI and a director of Sonesta (and its parent), and she

F-19

The RMR Group Inc.

Notes to Consolidated Financial Statements (Continued)

(dollars in thousands, except per share amounts)

Note 5. Related Person Transactions (Continued)

previously served as a managing trustee of each of DHC and SEVN until June 3, 2021 and January 5,
2021, respectively. Ms. Clark also serves as the secretary of all our publicly traded clients and Sonesta.

As of September 30, 2021, Adam D. Portnoy beneficially owned, in aggregate, 6.4% 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, 4.5% of TA’s outstanding common shares (including through RMR LLC) and 7.4% of SEVN’s
outstanding common shares.

The Managed 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 pursuant to management
agreements with them. All the officers of the Managed Equity REITs and ABP Trust are officers or
employees of RMR LLC. All the officers, overhead and required office space of SEVN (and, prior to the
Merger, TRMT) are provided or arranged by Tremont Realty Capital. All of SEVN’s (and, prior to the
Merger, TRMT’s) officers are officers or employees of Tremont Realty Capital or RMR LLC. Many of the
executive officers of the Managed Operating Companies are officers or employees of RMR LLC.
Some of our executive officers are also managing directors or managing trustees of certain of the
Managed REITs and the Managed Operating Companies.

Revenues from Related Parties

For the fiscal years ended September 30, 2021, 2020 and 2019, we recognized revenues from

related parties as set forth in the following tables:

Managed Public Real Estate Capital:

DHC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ILPT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
OPI
SVC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total Managed Equity REITs . . . . . . . . . . . . .
SEVN(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . .
TRMT(1)

Managed Private Real Estate Capital:

ABP Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other private entities . . . . . . . . . . . . . . . . . . . .

Managed Operating Companies:

Five Star . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Sonesta . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
TA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total revenues from related parties . . . . . . . . . . .
Revenues from unrelated parties . . . . . . . . . . . . .

Fiscal Year Ended September 30, 2021

Total
Management and Advisory
Services Revenues

Total
Reimbursable
Costs

Total
Revenues

$ 36,372
17,745
37,251
45,854
137,222
2,798
1,778
141,798

4,295
3,771
8,066

7,123
4,497
13,727
25,347
175,211
467
$175,678

$135,146
20,094
206,351
33,552
395,143
2,129
3,620
400,892

$171,518
37,839
243,602
79,406
532,365
4,927
5,398
542,690

23,324
6,006
29,330

27,619
9,777
37,396

368
196
774
1,338
431,560
—
$431,560

7,491
4,693
14,501
26,685
606,771
467
$607,238

F-20

The RMR Group Inc.

Notes to Consolidated Financial Statements (Continued)

(dollars in thousands, except per share amounts)

Note 5. Related Person Transactions (Continued)

(1) As discussed in Note 1, Organization, TRMT merged with and into SEVN on September 30, 2021,
with SEVN continuing as the surviving company. This table presents revenues for the fiscal year
ended September 30, 2021, for TRMT separately as they relate to a period prior to the Merger.

Managed Public Real Estate Capital:

DHC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 36,185

$138,897

$175,082

Fiscal Year Ended September 30, 2020

Total
Management and Advisory
Services Revenues

Total
Reimbursable
Costs

Total
Revenues

ILPT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
OPI
SVC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total Managed Equity REITs . . . . . . . . . . . . .
SEVN(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . .
TRMT(1)

Managed Private Real Estate Capital:

ABP Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other private entities . . . . . . . . . . . . . . . . . . . .

Managed Operating Companies:

Five Star . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Sonesta . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
TA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total revenues from related parties . . . . . . . . . . .
Revenues from unrelated parties . . . . . . . . . . . . .

21,473

37,935
44,301

139,894
2,767
144

142,805

4,639
—

4,639

8,787
1,505
13,084

23,376

170,820
857

$171,677

26,583

204,282
17,535

387,297
—
2,406

389,703

26,893
213

27,106

297
233
481

1,011

417,820
8

48,056

242,217
61,836

527,191
2,767
2,550

532,508

31,532
213

31,745

9,084
1,738
13,565

24,387

588,640
865

$417,828

$589,505

(1) As discussed in Note 1, Organization, TRMT merged with and into SEVN on September 30, 2021,
with SEVN continuing as the surviving company. This table presents revenues for the fiscal year
ended September 30, 2020, for TRMT separately as they relate to a period prior to the Merger.

Fiscal Year Ended September 30, 2019

Total
Management and Advisory
Services Revenues

Total
Reimbursable
Costs

Total
Revenues

Managed Public Real Estate Capital:

DHC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

ILPT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 84,021

17,613

$126,707

$210,728

25,629

43,242

F-21

The RMR Group Inc.

Notes to Consolidated Financial Statements (Continued)

(dollars in thousands, except per share amounts)

Note 5. Related Person Transactions (Continued)

OPI(1)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

SIR(1)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

SVC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total Managed Equity REITs . . . . . . . . . . . . .

SEVN(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

TRMT(2)

. . . . . . . . . . . . . . . . . . . . . . . . . . . .

Managed Private Real Estate Capital:

ABP Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other private entities . . . . . . . . . . . . . . . . . . . .

Managed Operating Companies:

Five Star . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Sonesta . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
TA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total revenues from related parties . . . . . . . . . . .
Revenues from unrelated parties . . . . . . . . . . . . .

Fiscal Year Ended September 30, 2019

Total
Management and Advisory
Services Revenues

Total
Reimbursable
Costs

Total
Revenues

39,385

32,276

93,758

267,053

3,013

138

270,204

4,332
180

4,512

9,473
2,908
13,706

26,087

300,803
535

$301,338

199,906

239,291

15,567

8,271

376,080

—

3,371

47,843

102,029

643,133

3,013

3,509

379,451

649,655

31,104
390

31,494

229
278
485

992

411,937
93

35,436
570

36,006

9,702
3,186
14,191

27,079

712,740
628

$412,030

$713,368

(1) OPI (then GOV) acquired SIR by merger on December 31, 2018. This table presents revenues for

the applicable part of the fiscal year ended September 30, 2019, from SIR separately as they relate
to a period prior to this merger.

(2) As discussed in Note 1, Organization, TRMT merged with and into SEVN on September 30, 2021,
with SEVN continuing as the surviving company. This table presents revenues for the fiscal year
ended September 30, 2019, for TRMT separately as they relate to a period prior to the Merger.

For additional information regarding our management or advisory agreements with these related

parties, please see Note 2, Summary of Significant Accounting Policies.

TRMT 2019 Offering

On May 21, 2019, TRMT issued and sold 5,000,000 common shares of beneficial interest, $0.01

par value per share, or TRMT Common Shares, in an underwritten public offering, or the Offering,
pursuant to an underwriting agreement among TRMT, Tremont Realty Capital and the underwriters.
Tremont Realty Capital purchased 1,000,000 TRMT Common Shares in the Offering at a total price of
$5,650. The underwriters did not receive any discount for the TRMT Common Shares that Tremont Realty
Capital purchased in the Offering.

F-22

The RMR Group Inc.

Notes to Consolidated Financial Statements (Continued)

(dollars in thousands, except per share amounts)

Note 5. Related Person Transactions (Continued)

Immediately prior to the consummation of the Merger on September 30, 2021, Tremont Realty

Capital owned 1,600,100, or approximately 19.3%, of TRMT’s common shares. As a result of the
Merger, Tremont Realty Capital owns 825,651, or approximately 5.7% of SEVN’s outstanding common
shares.

Credit Agreement between TRMT and Tremont Realty Capital

Until May 23, 2019, TRMT was a party to a credit agreement with Tremont Realty Capital as the
lender, or the Credit Agreement. Pursuant to the Credit Agreement, from time to time until August 4,
2019, the scheduled expiration date of the Credit Agreement, TRMT was able to borrow up to $25,000
and, beginning May 3, 2019, up to $50,000 in subordinated unsecured loans at a rate of 6.50% per
annum.

In connection with TRMT’s repayment of the outstanding amount of $14,220 on May 23, 2019,
TRMT terminated the Credit Agreement. As part of the repayment amount, TRMT paid Tremont Realty
Capital approximately $39 of interest and $7 of facility fees related to the Credit Agreement.

Amounts Due From Related Parties

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

September 30,

2021

2020

Accounts
Receivable

Reimbursable
Costs

Total

Accounts
Receivable

Reimbursable
Costs

Total

Managed Public Real

Estate Capital:
DHC . . . . . . . . . . . . . . .
ILPT . . . . . . . . . . . . . . .
OPI . . . . . . . . . . . . . . . .
SVC . . . . . . . . . . . . . . .

Total Managed Equity

$ 6,005
2,934
8,625
5,841

REITs . . . . . . . . . . .

23,405

SEVN(1) . . . . . . . . . . . .

1,717

TRMT(1) . . . . . . . . . . . .

—

$17,866
6,928
33,693
8,992

67,479

1,180

—

$23,871
9,862
42,318
14,833

$ 5,548
3,089
7,883
4,258

$22,035
5,791
30,529
6,326

$27,583
8,880
38,412
10,584

90,884

20,778

64,681

85,459

2,897

—

—

19

—

614

—

633

25,122

68,659

93,781

20,797

65,295

86,092

Managed Private Real

Estate Capital:

ABP Trust

. . . . . . . . . . .

Other private entities . . .

1,202

869

2,071

2,678

770

3,448

3,880

1,639

5,519

1,106

—

1,106

2,364

—

2,364

3,470

—

3,470

F-23

The RMR Group Inc.

Notes to Consolidated Financial Statements (Continued)

(dollars in thousands, except per share amounts)

Note 5. Related Person Transactions (Continued)

Managed Operating

Companies:

Five Star . . . . . . . . . . . .

Sonesta . . . . . . . . . . . .

TA . . . . . . . . . . . . . . . .

September 30,

2021

2020

Accounts
Receivable

Reimbursable
Costs

Total

Accounts
Receivable

Reimbursable
Costs

Total

136

17

124

277

422

—

2,993

3,415

558

17

3,117

3,692

149

—

176

325

102

—

380

482

251

—

556

807

$27,470

$75,522

$102,992

$22,228

$68,141

$90,369

(1) As a result of the Merger, SEVN succeeded to TRMT’s rights and obligations. As a result, SEVN is
obligated to pay all amounts due from TRMT as of September 30, 2021. This table presents
amounts due as of September 30, 2020, from TRMT separately as they relate to a period prior to
the Merger.

Leases

As of September 30, 2021, we leased from ABP Trust and certain Managed Equity REITs office

space for use as our headquarters and local offices. During the fiscal years ended September 30,
2021, 2020 and 2019, we incurred rental expense under related party leases aggregating $5,667, $5,619
and $5,646, respectively. Our related party leases have various termination dates and many have
renewal options. Some of our related party leases are terminable on 30 days’ notice and many allow
us to terminate early if our management agreements for the buildings in which we lease space are
terminated. For additional information regarding leases, please see Note 10, Leases.

Tax-Related Payments

Pursuant to the tax receivable agreement, dated June 5, 2015, by and among, RMR Inc., RMR

LLC and ABP Trust, or the Tax Receivable Agreement, RMR Inc. pays to ABP Trust 85.0% of the
amount of cash savings, if any, in U.S. federal, state and local income or franchise tax that RMR Inc.
realizes as a result of (a) the increases in tax basis attributable to RMR Inc.’s dealings with ABP Trust
and (b) tax benefits related to imputed interest deemed to be paid by RMR Inc. as a result of the Tax
Receivable Agreement. During the fiscal years ended September 30, 2021, 2020 and 2019, we paid
$2,158, $2,111 and $2,266, respectively, to ABP Trust pursuant to the Tax Receivable Agreement. As
of September 30, 2021, our consolidated balance sheet reflects a liability related to the Tax Receivable
Agreement of $27,792, including $2,215 classified as a current liability in accounts payable and
accrued expenses that we expect to pay to ABP Trust during the fourth quarter of fiscal year 2022.

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 estimated quarterly, subject to future adjustment based on actual results. For the fiscal years
ended September 30, 2021, 2020 and 2019, pursuant to the RMR LLC operating agreement, RMR
LLC made required quarterly tax distributions to holders of its membership units totaling $31,469,
$31,545 and $79,074, respectively, of which $16,764, $16,606 and $41,099, respectively, was distributed
to us and $14,705, $14,939 and $37,975, respectively, was distributed to ABP Trust, based on each
membership unit holder’s respective ownership percentage. The amounts distributed to us were

F-24

The RMR Group Inc.

Notes to Consolidated Financial Statements (Continued)

(dollars in thousands, except per share amounts)

Note 5. Related Person Transactions (Continued)

eliminated in our consolidated financial statements, and the amounts distributed to ABP Trust were
recorded as a reduction of its noncontrolling interest. We used funds from these distributions to pay our
U.S. federal and state income tax liabilities and to pay our obligations under the Tax Receivable
Agreement.

Purchase of TA Shares

On July 6, 2020, RMR LLC purchased 218,577 shares of TA common stock in an underwritten

public equity offering. RMR LLC paid an aggregate purchase price of $3,060 for these shares.

On September 30, 2020, RMR LLC purchased 104,738 shares of TA common stock from TA’s
former Managing Director and Chief Executive Officer pursuant to a right of first refusal. RMR LLC paid
an aggregate purchase price of $2,259 for these shares.

As of September 30, 2021, RMR LLC owned 621,853 shares of TA common stock, or approximately

4.3% of TA’s then outstanding shares of common stock

Registration and Lock-up Agreements

The following registration rights and lock-up agreements are in effect:

• ABP Trust Registration Rights Agreement. RMR Inc. is party to a registration rights agreement
with ABP Trust pursuant to which RMR Inc. has granted ABP Trust demand and piggyback
registration rights, subject to certain limitations, covering the Class A Common Shares ABP Trust
owns, including the shares received on conversion of Class B-1 Common Shares or redemption
of the paired Class B-2 Common Shares and Class A Units of RMR LLC.

• Founders Registration Rights and Lock-Up Agreements. Adam D. Portnoy and ABP Trust are
parties to a registration rights and lock-up agreement with each of DHC, OPI and SVC with
respect to each such Managed Equity REITs’ common shares pursuant to which ABP Trust and
Adam D. Portnoy agreed not to transfer the Managed Equity REITs’ common shares they acquired
in connection with RMR LLC’s reorganization in June 2015 for a period of ten years, subject to
certain exceptions, and each of those Managed Equity REITs has granted ABP Trust and Adam
D. Portnoy demand and piggyback registration rights, subject to certain limitations.

• Registration Rights and Lock-Up Agreement with Five Star. Adam D. Portnoy and ABP Trust are
parties to a registration rights and lock-up agreement with Five Star with respect to Five Star’s
common stock pursuant to which ABP Trust and Adam D. Portnoy agreed not to transfer the Five
Star common stock they acquired in 2016 for a period of ten years, subject to certain exceptions,
and Five Star has granted ABP Trust and Adam D. Portnoy demand and piggyback registration
rights, subject to certain limitations.

In addition, in connection with a capital market transaction that we or any of our clients may
engage in from time-to-time, we or other clients and our and their related parties may enter into
customary lock up agreements with the underwriters for that capital transaction with respect to the
shares that we or the other clients may own of the issuer in that capital market transaction.

Separation Arrangements

We entered into retirement agreements with certain of our former executive officers. 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. All costs associated with

F-25

The RMR Group Inc.

Notes to Consolidated Financial Statements (Continued)

(dollars in thousands, except per share amounts)

Note 5. Related Person Transactions (Continued)

separation arrangements, for which there remain no substantive performance obligations, are recorded
in our consolidated statements of income as separation costs.

In October 2020, we entered into a retirement agreement with David M. Blackman, a former
Executive Vice President of RMR LLC. Mr. Blackman, at the time, also served as president, chief
executive officer and a director of Tremont Realty Capital, president, chief executive officer and
managing trustee of TRMT, president, chief executive officer and managing trustee of OPI, and executive
vice president of RMR Advisors. Pursuant to his retirement agreement, Mr. Blackman remained in his
officer, director and trustee roles with RMR LLC, Tremont Realty Capital, TRMT, OPI and RMR Advisors
through December 31, 2020 and he continued to serve as a managing trustee of OPI until June 17,
2021. In addition, Mr. Blackman continued to serve as an employee of RMR LLC through June 30, 2021.
Under Mr. Blackman’s retirement agreement, RMR LLC paid Mr. Blackman combined cash payments
in the amount of $2,850. In addition, our Compensation Committee approved the acceleration of all
9,400 unvested shares owned by Mr. Blackman of us as of his retirement date, June 30, 2021, subject to
applicable conditions.

For the fiscal years ended September 30, 2021, 2020 and 2019, we recognized cash and equity

based separation costs as set forth in the following table:

Former executive officers:

Cash separation costs . . . . . . . . . . . . . . . . . . . . .
Equity based separation costs . . . . . . . . . . . . . . .

Former nonexecutive officers and other:

Cash separation costs(1)
. . . . . . . . . . . . . . . . . . .
Equity based separation costs . . . . . . . . . . . . . . .

Fiscal Year Ended September 30,

2021

2020

2019

$2,900
295

3,195

$ 260
281

$5,312
1,488

541

6,800

1,142
188

1,330

1,316
24

1,340

153
97

250

Total separation costs . . . . . . . . . . . . . . . . . . . . . . .

$4,525

$1,881

$7,050

(1) During the fiscal year ended September 30, 2021, we were indemnified for a withdrawal liability of

$515 that we had recorded during the fiscal year ended September 30, 2020 related to a prior client’s
shared pension plan accounted for as a multiemployer benefit plan.

Other

The Managed REITs and Managed Operating Companies award common shares directly to
certain of our officers and employees in connection with the provision of services to those companies.
For a description of the accounting implications to us of these share awards, please see Note 2, Summary
of Significant Accounting Policies and Note 6, Shareholders’ Equity.

The compensation of senior executives of the Managed Operating Companies, who are also
employees or officers of RMR LLC, is the sole responsibility of the party to or on behalf of which the
individual renders services. In the past, because at least 80.0% of each of these executives’ business
time was devoted to services to the Managed Operating Company, 80.0% of their total cash compensation
was paid by the Managed Operating Companies and the remainder was paid by RMR LLC.

F-26

The RMR Group Inc.

Notes to Consolidated Financial Statements (Continued)

(dollars in thousands, except per share amounts)

Note 6. Shareholders’ Equity

Common Shares

Class A Common Shares—Class A Common Shares entitle holders to one vote for each share

held of record on all matters submitted to a vote of shareholders.

Class B-1 Common Shares—Class B-1 Common Shares entitle holders to ten votes for each
share on all matters submitted to a vote of shareholders. Each Class B-1 Common Share may, at the
option of its holder, be converted into a Class A Common Share, on a one for one basis.

Class B-2 Common Shares—ABP Trust owns 15,000,000 Class B-2 Common Shares, which are

paired with the 15,000,000 RMR LLC Class A Units and have no independent economic interest in
RMR Inc. The Class A Units may, at the option of the holder, be redeemed for Class A Common Shares
on a one to one basis, and upon such redemption our Class B-2 Common Shares that are paired with
the Class A Units are automatically canceled. RMR Inc. has the option to settle the redemption in cash.
Each Class B-2 Common Share entitles the holder to ten votes per share, and, accordingly, the
issuance of additional Class B-2 Common Shares would have a significant dilutive effect on the voting
power of the then current holders of our Class A Common Shares.

Except as otherwise required in the charter or by applicable law, all holders of Class A Common

Shares, Class B-1 Common Shares, and Class B-2 Common Shares shall vote together as a single
class on all matters on which shareholders are generally entitled to vote. The holders of a class of
common shares shall each be entitled to vote separately as a single class with respect to (and only with
respect to) amendments to the charter that alter or change the powers or rights of the shares of such
class of common shares so as to affect them materially and adversely; provided, however, if such
amendments affect all holders of common shares materially and adversely in the same manner, the
separate voting requirement shall not be applicable and all holders of common shares shall vote together
as a single class.

Issuances and Repurchases

We grant our Class A Common Shares to our officers and employees under the 2016 Omnibus

Equity Plan adopted in 2016, or the 2016 Plan. In addition, each of our Directors receives Class A
Common Shares under the 2016 Plan as part of his or her annual compensation for serving as a Director.
During the fiscal years ended September 30, 2021, 2020 and 2019, we granted to our Managing
Directors, in their capacities as our officers and employees, and to certain of our other officers and
employees, an aggregate of 96,300, 93,700 and 77,900, respectively, of our Class A Common Shares.
We also granted to each of our Managing Directors and Independent Directors 3,000, 3,000 and
2,500 of our Class A Common Shares during each of the fiscal years ended September 30, 2021,
2020 and 2019, respectively, as part of his or her annual compensation for serving as a Director.

The Class A Common Shares granted to our Independent Directors and Managing Directors, in their
capacities as Directors, vest immediately and are included in general and administrative expense in our
consolidated statements of income. The Class A Common Shares granted to our Managing Directors,
in their capacities as our officers and employees, and to our other officers and employees vest in five
equal, consecutive, annual installments beginning on the date of the grant and are included in equity
based compensation expense in our consolidated statements of income. We recognize forfeitures as
they occur. During the fiscal years ended September 30, 2021, 2020 and 2019, we recognized forfeitures
of $22, $49 and $33, respectively. During the fiscal years ended September 30, 2021, 2020 and 2019,
we recorded general and administrative expenses of $771, $564 and $784, respectively, and equity
based compensation expenses of $2,868, $2,916 and $2,579, respectively, related to awards we
made under the 2016 Plan.

F-27

The RMR Group Inc.

Notes to Consolidated Financial Statements (Continued)

(dollars in thousands, except per share amounts)

Note 6. Shareholders’ Equity (Continued)

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 Stock Market LLC, or Nasdaq. The aggregate
value of Class A Common Shares repurchased during the fiscal years ended September 30, 2021, 2020
and 2019, was $834, $523 and $827, respectively, which is recorded as a decrease to additional paid
in capital within shareholders’ equity in our 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.

A summary of shares granted and vested, including shares withheld, repurchased or forfeited,
under the terms of the 2016 Plan for the fiscal years ended September 30, 2021, 2020 and 2019 is as
follows:

Unvested shares, beginning of

year

. . . . . . . . . . . . . . . . . . . .
Shares granted . . . . . . . . . . . . . .
Vested shares withheld and

repurchased . . . . . . . . . . . . . .
Shares vested . . . . . . . . . . . . . .
Shares forfeited . . . . . . . . . . . . .

Unvested shares, end of year

. . .

160,310

2021

2020

2019

Number
of
Shares

Weighted
Average
Grant Date
Fair Value

Number
of
Shares

Weighted
Average
Grant Date
Fair Value

Number
of
Shares

Weighted
Average
Grant Date
Fair Value

143,990
114,300

$44.10
$35.23

126,160
111,700

$59.38
$30.04

110,240
90,400

$69.11
$48.31

(24,125)
(73,275)
(580)

$34.57
$36.13
$37.65

$37.36

(17,539)
(75,101)
(1,230)

143,990

$29.83
$39.18
$40.08

$44.10

(17,167)
(56,833)
(480)

126,160

$48.18
$51.46
$68.95

$59.38

The 160,310 unvested shares as of September 30, 2021 are scheduled to vest as follows: 56,290

shares in 2022, 48,460 shares in 2023, 36,300 shares in 2024 and 19,260 shares in 2025. As of
September 30, 2021, the estimated future compensation expense for the unvested shares was $5,989
based on the grant date fair value of these shares. The weighted average period over which this
compensation expense will be recorded is approximately 25 months. At September 30, 2021, 114,764
of our Class A Common Shares remained available for issuance under the 2016 Plan.

Distributions

During the fiscal years ended September 30, 2021, 2020 and 2019, we declared and paid dividends

on our Class A Common Shares and Class B-1 Common Shares as follows:

Declaration Date

Fiscal Year Ended September 30, 2021

Record
Date

Paid
Date

Distributions
Per Common Share

Total
Distributions

10/15/2020 . . . . . . . . . . . . . . . . . . . .

10/26/2020

11/19/2020

1/14/2021 . . . . . . . . . . . . . . . . . . . . .

1/25/2021

2/18/2021

4/15/2021 . . . . . . . . . . . . . . . . . . . . .

4/26/2021

5/20/2021

$0.38

0.38

0.38

$ 6,230

6,230

6,237

F-28

The RMR Group Inc.

Notes to Consolidated Financial Statements (Continued)

(dollars in thousands, except per share amounts)

Note 6. Shareholders’ Equity (Continued)

Declaration Date

Record
Date

Paid
Date

Distributions
Per Common Share

Total
Distributions

7/15/2021 . . . . . . . . . . . . . . . . . . . . .

7/26/2021

8/19/2021

8/25/2021 . . . . . . . . . . . . . . . . . . . . .

9/6/2021

9/16/2021

Fiscal Year Ended September 30, 2020

10/17/2019 . . . . . . . . . . . . . . . . . . . .

10/28/2019

11/14/2019

1/16/2020 . . . . . . . . . . . . . . . . . . . . .

1/27/2020

2/20/2020

4/16/2020 . . . . . . . . . . . . . . . . . . . . .

4/27/2020

5/21/2020

7/16/2020 . . . . . . . . . . . . . . . . . . . . .

7/27/2020

8/20/2020

Fiscal Year Ended September 30, 2019

10/18/2018 . . . . . . . . . . . . . . . . . . . .
1/18/2019 . . . . . . . . . . . . . . . . . . . . .
4/18/2019 . . . . . . . . . . . . . . . . . . . . .
7/18/2019 . . . . . . . . . . . . . . . . . . . . .

10/29/2018
1/28/2019
4/29/2019
7/29/2019

11/15/2018
2/21/2019
5/16/2019
8/15/2019

0.38

7.00

$8.52

$0.38

0.38

0.38

0.38

$1.52

$0.35
0.35
0.35
0.35

$1.40

6,235

114,851

$139,783

$ 6,195

6,194

6,200

6,200

$ 24,789

$ 5,680
5,680
5,684
5,683

$ 22,727

These dividends were funded in part by distributions from RMR LLC to holders of its

membership units as follows:

Record
Date

Paid
Date

Distributions Per
RMR LLC
Membership Unit

Total
RMR LLC
Distributions

RMR LLC
Distributions
to RMR Inc.

RMR LLC
Distributions
to ABP Trust

Declaration Date

Fiscal Year Ended
September 30,
2021

10/15/2020 . . . . . 10/26/2020 11/19/2020
2/18/2021
1/14/2021 . . . . . .
5/20/2021
4/15/2021 . . . . . .

1/25/2021
4/26/2021

7/15/2021 . . . . . .

7/26/2021

8/19/2021

8/25/2021 . . . . . .

9/6/2021

9/16/2021

$0.30
0.30
0.30

0.30

7.00

$8.20

$ 9,419
9,419
9,424

$ 4,919
4,919
4,924

$ 4,500
4,500
4,500

9,422

4,922

4,500

219,851

114,851

105,000

$257,535

$134,535

$123,000

Fiscal Year Ended
September 30,
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

4/16/2020 . . . . . .

4/27/2020

5/21/2020

7/16/2020 . . . . . .

7/27/2020

8/20/2020

0.30

0.30

0.30

9,390

9,394

9,395

4,890

4,894

4,895

4,500

4,500

4,500

$1.20

$ 37,570

$ 19,570

$ 18,000

F-29

The RMR Group Inc.

Notes to Consolidated Financial Statements (Continued)

(dollars in thousands, except per share amounts)

Note 6. Shareholders’ Equity (Continued)

Record
Date

Paid
Date

Distributions Per
RMR LLC
Membership Unit

Total
RMR LLC
Distributions

RMR LLC
Distributions
to RMR Inc.

RMR LLC
Distributions
to ABP Trust

Declaration Date

Fiscal Year Ended
September 30,
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

4/18/2019 . . . . . .

4/29/2019

5/16/2019

7/18/2019 . . . . . .

7/29/2019

8/15/2019

0.30

0.30

0.30

9,369

9,372

9,371

4,869

4,872

4,871

4,500

4,500

4,500

$1.20

$ 37,481

$ 19,481

$ 18,000

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

On October 14, 2021, we declared a quarterly dividend on our Class A Common Shares and
Class B-1 Common Shares to our shareholders of record as of October 25, 2021, in the amount of
$0.38 per Class A Common Share and Class B-1 Common Share, or $6,264. 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 $9,446, of which $4,946 will be distributed to us based on our aggregate ownership of
16,485,011 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 November 18, 2021.

Note 7. Per Common Share Amounts

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 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

F-30

The RMR Group Inc.

Notes to Consolidated Financial Statements (Continued)

(dollars in thousands, except per share amounts)

Note 7. Per Common Share Amounts (Continued)

noncontrolling interest offset by any tax effect, which may be dilutive. For the fiscal years ended
September 30, 2021 and 2020, the assumed redemption is dilutive to earnings per share as presented
in the table below. For the fiscal year ended September 30, 2019, such redemption is not reflected in
diluted earnings per share as the assumed redemption would be anti-dilutive.

The calculation of basic and diluted earnings per share for the fiscal years ended September 30,

2021, 2020 and 2019, is as follows:

Fiscal Year Ended September 30,

2021

2020

2019

Numerators:

Net income attributable to The RMR Group Inc. . . . . . . . . . . . . . .

$ 35,696

$ 28,792

$74,580

Income attributable to unvested participating securities . . . . . . . .

(309)

(209)

(482)

Net income attributable to The RMR Group Inc. used in calculating
basic EPS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

35,387

28,583

74,098

Effect of dilutive securities:

Add back: income attributable to unvested participating

securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Add back: net income attributable to noncontrolling interest . . . .
Add back: income tax expense . . . . . . . . . . . . . . . . . . . . . . . .
Income tax expense assuming redemption of noncontrolling

309
45,317
13,152

—
37,541
11,552

interest’s Class A Units for Class A Common Shares(1) . . . . .

(27,061)

(23,183)

—
—
—

—

Net income used in calculating diluted EPS . . . . . . . . . . . . . . . . .

$ 67,104

$ 54,493

$74,098

Denominators:

Common shares outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . .
Unvested participating securities . . . . . . . . . . . . . . . . . . . . . . . . .

16,485
(219)

16,396
(202)

16,303
(171)

Weighted average common shares outstanding—basic . . . . . . . .
Effect of dilutive securities:

Assumed redemption of noncontrolling interest’s Class A Units

16,266

16,194

16,132

for Class A Common Shares . . . . . . . . . . . . . . . . . . . . . . . .

15,000

15,000

Incremental unvested shares . . . . . . . . . . . . . . . . . . . . . . . . . .

16

—

—

11

Weighted average common shares outstanding—diluted . . . . . . .

31,282

31,194

16,143

Net income attributable to The RMR Group Inc. per common

share—basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Net income attributable to The RMR Group Inc. per common

share—diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$

$

2.18

2.15

$

$

1.77

$ 4.59

1.75

$ 4.59

(1)

Income tax expense assumes the hypothetical conversion of the noncontrolling interest, which
results in estimated tax rates of 28.7% and 29.8% for the fiscal years ended September 30, 2021
and 2020, respectively.

F-31

The RMR Group Inc.

Notes to Consolidated Financial Statements (Continued)

(dollars in thousands, except per share amounts)

Note 8. Net Income Attributable to RMR Inc.

Net income attributable to RMR Inc. for the fiscal years ended September 30, 2021, 2020 and

2019, is calculated as follows:

Fiscal Year Ended September 30,

2021

2020

2019

Income before income tax expense . . . . . . . . . . . . . . . . . . . . . . . .

$ 94,165

$ 77,885

$196,364

RMR Inc. franchise tax expense and interest income . . . . . . . . .

763

481

329

Net income before noncontrolling interest

. . . . . . . . . . . . . . . . . . .

94,928

78,366

196,693

Net income attributable to noncontrolling interest

. . . . . . . . . . . .

(45,317)

(37,541)

(94,464)

Net income attributable to RMR Inc. before income tax expense . . .

49,611

40,825

102,229

Income tax expense attributable to RMR Inc.

. . . . . . . . . . . . . . .

(13,152)

(11,552)

(27,320)

RMR Inc. franchise tax expense and interest income . . . . . . . . .

(763)

(481)

(329)

Net income attributable to RMR Inc.

. . . . . . . . . . . . . . . . . . . . . . .

$ 35,696

$ 28,792

$ 74,580

Note 9. Employee Benefits

We have established a defined contribution savings plan for eligible employees under the provisions
of U.S. Internal Revenue Code Section 401(k) whereby we contribute 100.0% of the first 3.0% and 50.0%
of the next 2.0% of an employee’s cash compensation contributed to the plan up to stated maximums.
All employees are eligible to participate in the plan and are entitled, upon termination or retirement,
to receive their vested portion of the plan assets. Employees’ contributions and our related matching
contributions are fully vested when made. Our plan contributions and expenses for the fiscal years ended
September 30, 2021, 2020 and 2019 were $2,633, $2,603 and $2,466, respectively.

Note 10. Leases

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
on our consolidated balance sheet for leases with an initial term greater than 12 months 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. When additional payments are based on usage or vary based
on other factors, they are expensed when incurred as variable lease expense. Certain leases include
lease and non-lease components, which we account for as a single lease component. Minimum lease
payments for leases with an initial term of 12 months or less are not recorded on our consolidated
balance sheet. As of September 30, 2021, we had 30 leases that expire at various dates through
2030, with a weighted average remaining lease term of 8 years and a weighted average discount rate
of 3.1%.

F-32

The RMR Group Inc.

Notes to Consolidated Financial Statements (Continued)

(dollars in thousands, except per share amounts)

Note 10. Leases (Continued)

For the fiscal years ended September 30, 2021 and 2020, the components of operating lease

costs were as follows:

Fixed rent expense(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$5,757

Variable lease payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total cash portion of rent expense . . . . . . . . . . . . . . . . . . . . . . . . . .

Non-cash straight line rent expense . . . . . . . . . . . . . . . . . . . . . . . . . . .

727

6,484

3

Total operating lease costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$6,487

2021

2020

$5,620

660

6,280

154

$6,434

Fiscal Year Ended September 30,

(1)

Includes expense for leases with an initial term of 12 months or less of $138 and $68 for the
fiscal years ended September 30, 2021 and 2020, respectively.

Lease expense recognized under the accounting standard in effect prior to our adoption on
October 1, 2019 of ASU No. 2016-02, Leases, as amended, for the fiscal year ended September 30,
2019 totaled $6,370.

The following table presents the undiscounted cash flows on an annual fiscal year basis for our

operating lease liabilities as of September 30, 2021:

Fiscal Year

2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2026 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Amount

$ 5,898
5,279
4,809
4,473
3,853
14,175

Total lease payments(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Less: imputed interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

38,487
(4,417)

Present value of operating lease liabilities . . . . . . . . . . . . . . . . . . . . . . .

34,070

Less: current portion of operating lease liabilities . . . . . . . . . . . . . . . . . .

(4,922)

Operating lease liabilities, net of current portion . . . . . . . . . . . . . . . . . . .

$29,148

(1) Excludes $834 of lease payments for signed leases that have not yet commenced.

Some of the foregoing leases are with related parties. As of September 30, 2021, $33,547 of total
lease payments and $4,209 of imputed interest are for our principal executive offices, which are leased
from an affiliate of ABP Trust pursuant to a lease agreement that expires in 2030.

F-33

The RMR Group Inc.

Notes to Consolidated Financial Statements (Continued)

(dollars in thousands, except per share amounts)

Note 11. Segment Reporting

We have one reportable business segment, which is RMR LLC. In the tables below, our All Other

Operations includes the operations of RMR Inc., Tremont Realty Capital and until January 5, 2021,
RMR Advisors.

Fiscal Year Ended September 30, 2021

RMR LLC(1)

All Other
Operations

Total

Revenues:

Management services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$170,636

$

Incentive business management fees . . . . . . . . . . . . . . . . . . .

Advisory services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

—

—

Total management and advisory services revenues . . . . . . .

170,636

Reimbursable compensation and benefits . . . . . . . . . . . . . . . .
Reimbursable equity based compensation . . . . . . . . . . . . . . .
Other reimbursable expenses . . . . . . . . . . . . . . . . . . . . . . . . .

50,336
9,154
370,037

Total reimbursable costs . . . . . . . . . . . . . . . . . . . . . . . . . . .

429,527

Total revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

600,163

Expenses:

Compensation and benefits . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity based compensation . . . . . . . . . . . . . . . . . . . . . . . . . .
Separation costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total compensation and benefits expense . . . . . . . . . . . . . .
General and administrative . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other reimbursable expenses . . . . . . . . . . . . . . . . . . . . . . . . .
Transaction and acquisition related costs . . . . . . . . . . . . . . . .
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . .

114,162
11,882
4,525

130,569
22,923
370,037
919
931

466

620

3,956

5,042

$171,102

620

3,956

175,678

52,369
2,033
9,154
—
— 370,037

2,033

7,075

431,560

607,238

5,482
140
—

119,644
12,022
4,525

5,622
4,038

136,191
26,961
— 370,037
984
65
973
42

Total expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

525,379

9,767

535,146

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating income (loss)
Interest and other income . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

74,784
724

Gain on Tremont Mortgage Trust investment . . . . . . . . . . . . . . . .

Equity in earnings of investees . . . . . . . . . . . . . . . . . . . . . . . . .

Unrealized gain on equity method investment accounted for

under the fair value option . . . . . . . . . . . . . . . . . . . . . . . . . . .

Income (loss) before income tax expense . . . . . . . . . . . . . . . . . .

—

—

18,811

94,319

(2,692)
36

2,059

443

—

(154)

72,092
760

2,059

443

18,811

94,165

Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

—

(13,152)

(13,152)

Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 94,319

$(13,306) $ 81,013

Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$453,105

$ 44,806

$497,911

(1)

Intersegment revenues of $3,919 recognized by RMR LLC for services provided to our All Other
Operations segment have been eliminated in the consolidated financial statements.

F-34

The RMR Group Inc.

Notes to Consolidated Financial Statements (Continued)

(dollars in thousands, except per share amounts)

Note 11. Segment Reporting (Continued)

Fiscal Year Ended September 30, 2020

RMR LLC(1)

All Other
Operations

Total

Revenues:

Management services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$167,949

$

817

$168,766

Advisory services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

—

Total management and advisory services revenues . . . . . . .

167,949

Reimbursable compensation and benefits . . . . . . . . . . . . . . . .

Reimbursable equity based compensation . . . . . . . . . . . . . . .

50,736

4,912

2,911

3,728

1,608

—

2,911

171,677

52,344

4,912

Other reimbursable expenses . . . . . . . . . . . . . . . . . . . . . . . . .

360,572

— 360,572

Total reimbursable costs . . . . . . . . . . . . . . . . . . . . . . . . . . .

416,220

Total revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

584,169

Expenses:

Compensation and benefits . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity based compensation . . . . . . . . . . . . . . . . . . . . . . . . . .
Separation costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total compensation and benefits expense . . . . . . . . . . . . . .
General and administrative . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other reimbursable expenses . . . . . . . . . . . . . . . . . . . . . . . . .
Transaction and acquisition related costs . . . . . . . . . . . . . . . .
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . .

113,758
7,680
1,881

123,319
22,843
360,572
485
921

1,608

5,336

417,828

589,505

7,628
148
—

121,386
7,828
1,881

7,776
3,671

131,095
26,514
— 360,572
1,618
968

1,133
47

Total expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

508,140

12,627

520,767

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating income (loss)
Interest and other income . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity in earnings of investees . . . . . . . . . . . . . . . . . . . . . . . . .
Unrealized gain on equity method investment accounted for

under the fair value option . . . . . . . . . . . . . . . . . . . . . . . . . . .

Income (loss) before income tax expense . . . . . . . . . . . . . . . . . .

76,029
4,079
—

3,151

83,259

(7,291)
372
1,545

68,738
4,451
1,545

—

3,151

(5,374)

77,885

Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

—

(11,552)

(11,552)

Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ 83,259

$(16,926) $ 66,333

Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$643,318

$ 46,935

$690,253

(1)

Intersegment revenues of $5,091 recognized by RMR LLC for services provided to our All Other
Operations segment have been eliminated in the consolidated financial statements.

F-35

The RMR Group Inc.

Notes to Consolidated Financial Statements (Continued)

(dollars in thousands, except per share amounts)

Note 11. Segment Reporting (Continued)

Fiscal Year Ended September 30, 2019

RMR LLC(1)

All Other
Operations

Total

Revenues:

Management services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$177,881

$

194

$178,075

Incentive business management fees . . . . . . . . . . . . . . . . . . .

120,094

— 120,094

Advisory services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

—

Total management and advisory services revenues . . . . . . .

297,975

Reimbursable compensation and benefits . . . . . . . . . . . . . . . .

Reimbursable equity based compensation . . . . . . . . . . . . . . .

48,355

6,461

3,169

3,363

2,674

—

3,169

301,338

51,029

6,461

Other reimbursable expenses . . . . . . . . . . . . . . . . . . . . . . . . .

354,540

— 354,540

Total reimbursable costs . . . . . . . . . . . . . . . . . . . . . . . . . . .

409,356

Total revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

707,331

Expenses:

Compensation and benefits . . . . . . . . . . . . . . . . . . . . . . . . . .
Equity based compensation . . . . . . . . . . . . . . . . . . . . . . . . . .
Separation costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Total compensation and benefits expense . . . . . . . . . . . . . .
General and administrative . . . . . . . . . . . . . . . . . . . . . . . . . . .
Other reimbursable expenses . . . . . . . . . . . . . . . . . . . . . . . . .
Transaction and acquisition related costs . . . . . . . . . . . . . . . .
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . .

107,562
8,862
7,050

123,474
25,026
354,540
698
966

2,674

6,037

412,030

713,368

6,967
178
—

114,529
9,040
7,050

7,145
3,680

130,619
28,706
— 354,540
698
—
1,017
51

Total expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

504,704

10,876

515,580

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Operating income (loss)
Interest and other income . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . .
Impairment loss on Tremont Mortgage Trust investment
Equity in earnings of investees . . . . . . . . . . . . . . . . . . . . . . . . .

202,627
7,831
—
—

(4,839)
939
(6,213)
719

197,788
8,770
(6,213)
719

Unrealized loss on equity method investment accounted for under
the fair value option . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4,700)

—

(4,700)

Income before income tax expense . . . . . . . . . . . . . . . . . . . . . .

205,758

(9,394)

196,364

Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

—

(27,320)

(27,320)

Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$205,758

$(36,714) $169,044

Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$606,650

$ 54,182

$660,832

(1)

Intersegment revenues of $3,975 recognized by RMR LLC for services provided to our All Other
Operations segment have been eliminated in the consolidated financial statements.

F-36

RMR Performance Chart

The graph below shows the cumulative total shareholder returns on our common shares (assuming

a $100 investment on December 14, 2015) as compared with (a) the Standard & Poor’s 500 Index and
(b) a self-constructed peer group composed of the following alternative asset management companies:
Apollo Global Management, Inc., Ares Management Corp, The Blackstone Group Inc., The Carlyle
Group Inc. and KKR & Co. Inc. and (c) a self-constructed peer group composed of the following Real
Estate Managers: Ashford Inc, Brookfield Asset Management Inc., Cohen & Steers, Inc. and DigitalBridge
Group, Inc. The graph assumes reinvestment of all cash distributions.

Note: Bloomberg is the data source.

$900

$800

$700

$600

$500

$400

$300

$200

$100

$0

3/31/2017
12/14/2015
9/30/2016
9/30/2017
6/30/2016
9/30/2018
6/30/2017
3/31/2016
3/31/2018
12/31/2016
12/31/2015
6/30/2020
12/31/2017
12/31/2018
6/30/2018
9/30/2020
9/30/2021
3/31/2019
6/30/2021
12/31/2019
3/31/2020
3/31/2021
12/31/2020
6/30/2019
9/30/2019

RMR

S&P 500

Alternative Asset Manager Peer Average

 Real Estate Managers

CORPORATE INFORMATION

EXECUTIVE OFFICES

BOARD OF DIRECTORS

ANNUAL MEETING

Our annual meeting of shareholders
will be held virtually on Thursday,
March 10, 2022 at 9:30 a.m.

AVAILABLE INFORMATION
A copy of our 2021 Annual Report on
Form 10-K, including the financial
statements and schedules (excluding
exhibits), as filed with the Securities
and Exchange Commission, can be
obtained without charge through our
website at www.rmrgroup.com or by
writing to Investor Relations at our
executive offices address.

The RMR Group Inc.
Two Newton Place
255 Washington Street, Suite 300
Newton, MA 02458-1634
(617) 796-8390
www.rmrgroup.com

OFFICERS
Adam D. Portnoy

Managing Director, President and
Chief Executive Officer; and

President and Chief Executive Officer

of RMR LLC
Jennifer B. Clark

Managing Director, Executive Vice
President, General Counsel and
Secretary; and

Executive Vice President,
General Counsel and
Secretary of RMR LLC

Matthew P. Jordan

Chief Financial Officer and

Treasurer; and

Executive Vice President, Chief

Financial Officer and Treasurer of
RMR LLC
Jennifer F. Francis

Executive Vice President of

RMR LLC

John G. Murray

Executive Vice President of

RMR LLC

Jonathan M. Pertchik

Executive Vice President of

RMR LLC

DIRECTOR OF INTERNAL AUDIT
Vern D. Larkin

DIRECTOR OF INVESTOR
RELATIONS
Michael B. Kodesch

Ann Logan*

Independent Director;
Former Chair of the Board of
Trustees of

Bryn Mawr College;
retired executive of Fannie Mae

Rosen Plevneliev*

Independent Director;
Former President of the
Republic of Bulgaria

Jonathan Veitch*

Independent Director;
President Emeritus of Occidental

College

Walter C. Watkins, Jr.*

Independent Director;
Principal of WCW Enterprises, LLC;
retired executive of Bank One

Corporation
Jennifer B. Clark

Managing Director;
Executive Vice President, General
Counsel and Secretary of the
Company and RMR LLC

Adam D. Portnoy

Managing Director;
President and Chief Executive
Officer of the Company and
RMR LLC

INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
Deloitte & Touche LLP
200 Berkeley Street
Boston, MA 02116

COUNSEL
Skadden, Arps, Slate, Meagher &
Flom LLP
500 Boylston Street
Boston, MA 02116

STOCK TRANSFER AGENT AND
REGISTRAR
Equiniti Trust Company
EQ Shareowner Services
1110 Centre Pointe Curve, Suite 101
Mendota Heights, MN 55120-4100
(877) 602-7398
www.shareowneronline.com

*

Member of Audit, Compensation and Nominating and Governance Committees

The RMR Group Inc.

Two Newton Place

255 Washington Street, Suite 300

Newton, Massachusetts 02458-1634

(617) 796-8390

www.rmrgroup.com