(State of Organization) | (IRS Employer Identification No.) |
Title Of Each Class | Trading Symbol | Name Of Each Exchange On Which Registered | ||||||||||||
(Nasdaq Capital Market) |
Large accelerated filer | ☐ | ☒ | ||||||||||||
Non-accelerated filer | ☐ | Smaller reporting company | ||||||||||||
Emerging growth company |
Page | ||||||||
December 31, | September 30, | |||||||||||||
2021 | 2021 | |||||||||||||
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 accounted for under the fair value option | ||||||||||||||
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, $ | ||||||||||||||
Class B-1 common stock, $ | ||||||||||||||
Class B-2 common stock, $ | ||||||||||||||
Additional paid in capital | ||||||||||||||
Retained earnings | ||||||||||||||
Cumulative common distributions | ( | ( | ||||||||||||
Total shareholders’ equity | ||||||||||||||
Noncontrolling interest | ||||||||||||||
Total equity | ||||||||||||||
Total liabilities and equity | $ | $ |
Three Months Ended December 31, | ||||||||||||||
2021 | 2020 | |||||||||||||
Revenues: | ||||||||||||||
Management services | $ | $ | ||||||||||||
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 | ||||||||||||||
Equity in earnings of investees | ||||||||||||||
Unrealized gain on equity method investments 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 | ||||||||||||||
Weighted average common shares outstanding - diluted | ||||||||||||||
Net income attributable to The RMR Group Inc. per common share - basic | $ | $ | ||||||||||||
Net income attributable to The RMR Group Inc. per common share - diluted | $ | $ |
Class A Common Stock | Class B-1 Common Stock | Class B-2 Common Stock | Additional Paid In Capital | Retained Earnings | Cumulative Common Distributions | Total Shareholders' Equity | Noncontrolling Interest | Total Equity | ||||||||||||||||||||||||||||||||||||||||||||||||
Balance at September 30, 2021 | $ | $ | $ | $ | $ | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||
Share awards, net | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
Tax distributions to member | — | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||
Common share distributions | — | — | — | — | — | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2021 | $ | $ | $ | $ | $ | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||
Balance at September 30, 2020 | $ | $ | $ | $ | $ | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||
Share awards, net | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||
Tax distributions to member | — | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||
Common share distributions | — | — | — | — | — | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2020 | $ | $ | $ | $ | $ | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||
Three Months Ended December 31, | ||||||||||||||
2021 | 2020 | |||||||||||||
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 | ||||||||||||||
Unrealized gain on equity method investments 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 | ( | ( | ||||||||||||
Net cash used in investing activities | ( | ( | ||||||||||||
Cash Flows from Financing Activities: | ||||||||||||||
Distributions to noncontrolling interest | ( | ( | ||||||||||||
Distributions to common shareholders | ( | ( | ||||||||||||
Repurchase of common shares | ( | |||||||||||||
Net cash used in financing activities | ( | ( | ||||||||||||
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 | $ | $ |
Three Months Ended December 31, | ||||||||||||||
2021 | 2020 | |||||||||||||
Income taxes computed at the federal statutory rate | % | % | ||||||||||||
State taxes, net of federal benefit | % | % | ||||||||||||
Permanent items | % | % | ||||||||||||
Net income attributable to noncontrolling interest | ( | % | ( | % | ||||||||||
Other (1) | % | ( | % | |||||||||||
Total | % | % |
December 31, | September 30, | |||||||||||||
2021 | 2021 | |||||||||||||
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 payment awards | ||||||||||||||
Long term portion of employer compensation liability related to share based payment awards |
Three Months Ended December 31, 2021 | Three Months Ended December 31, 2020 | |||||||||||||||||||||||||||||||||||||
Total | Total | |||||||||||||||||||||||||||||||||||||
Management | Management | |||||||||||||||||||||||||||||||||||||
and Advisory | Total | and Advisory | Total | |||||||||||||||||||||||||||||||||||
Services | Reimbursable | Total | Services | Reimbursable | Total | |||||||||||||||||||||||||||||||||
Revenues | Costs | Revenues | Revenues | Costs | Revenues | |||||||||||||||||||||||||||||||||
Managed Public Real Estate Capital:(1) | ||||||||||||||||||||||||||||||||||||||
DHC | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
ILPT | ||||||||||||||||||||||||||||||||||||||
OPI | ||||||||||||||||||||||||||||||||||||||
SVC | ||||||||||||||||||||||||||||||||||||||
Total Managed Equity REITs | ||||||||||||||||||||||||||||||||||||||
SEVN | ||||||||||||||||||||||||||||||||||||||
TRMT (2) | ||||||||||||||||||||||||||||||||||||||
Managed Private Real Estate Capital:(1) | ||||||||||||||||||||||||||||||||||||||
ABP Trust | ||||||||||||||||||||||||||||||||||||||
Other private entities | ||||||||||||||||||||||||||||||||||||||
Managed Operating Companies: | ||||||||||||||||||||||||||||||||||||||
ALR | ||||||||||||||||||||||||||||||||||||||
Sonesta | ||||||||||||||||||||||||||||||||||||||
TA | ||||||||||||||||||||||||||||||||||||||
Total revenues from related parties | ||||||||||||||||||||||||||||||||||||||
Revenues from unrelated parties | ||||||||||||||||||||||||||||||||||||||
$ | $ | $ | $ | $ | $ |
December 31, 2021 | September 30, 2021 | |||||||||||||||||||||||||||||||||||||
Accounts | Reimbursable | Accounts | Reimbursable | |||||||||||||||||||||||||||||||||||
Receivable | Costs | Total | Receivable | Costs | Total | |||||||||||||||||||||||||||||||||
Managed Public Real Estate Capital: | ||||||||||||||||||||||||||||||||||||||
DHC | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
ILPT | ||||||||||||||||||||||||||||||||||||||
OPI | ||||||||||||||||||||||||||||||||||||||
SVC | ||||||||||||||||||||||||||||||||||||||
Total Managed Equity REITs | ||||||||||||||||||||||||||||||||||||||
SEVN | ||||||||||||||||||||||||||||||||||||||
Managed Private Real Estate Capital: | ||||||||||||||||||||||||||||||||||||||
ABP Trust | ||||||||||||||||||||||||||||||||||||||
Other private entities | ||||||||||||||||||||||||||||||||||||||
Managed Operating Companies: | ||||||||||||||||||||||||||||||||||||||
ALR | ||||||||||||||||||||||||||||||||||||||
Sonesta | ||||||||||||||||||||||||||||||||||||||
TA | ||||||||||||||||||||||||||||||||||||||
$ | $ | $ | $ | $ | $ |
Three Months Ended December 31, | ||||||||||||||
2021 | 2020 | |||||||||||||
Former executive officers: | ||||||||||||||
Cash separation costs | $ | $ | ||||||||||||
Equity based separation costs | ||||||||||||||
Former nonexecutive officers: | ||||||||||||||
Cash separation costs (1) | ||||||||||||||
Equity based separation costs | ||||||||||||||
Total separation costs | $ | $ |
Declaration | Record | Paid | Distributions | Total | ||||||||||||||||||||||
Date | Date | Date | Per Common Share | Distributions | ||||||||||||||||||||||
Three Months Ended December 31, 2021 | ||||||||||||||||||||||||||
10/14/2021 | 10/25/2021 | 11/18/2021 | $ | $ | ||||||||||||||||||||||
$ | $ | |||||||||||||||||||||||||
Three Months Ended December 31, 2020 | ||||||||||||||||||||||||||
10/15/2020 | 10/26/2020 | 11/19/2020 | $ | $ | ||||||||||||||||||||||
$ | $ |
Distributions Per | Total | RMR LLC | RMR LLC | |||||||||||||||||||||||||||||||||||
Declaration | Record | Paid | RMR LLC | RMR LLC | Distributions | Distributions | ||||||||||||||||||||||||||||||||
Date | Date | Date | Membership Unit | Distributions | to RMR Inc. | to ABP Trust | ||||||||||||||||||||||||||||||||
Three Months Ended December 31, 2021 | ||||||||||||||||||||||||||||||||||||||
10/14/2021 | 10/25/2021 | 11/18/2021 | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
$ | $ | $ | $ | |||||||||||||||||||||||||||||||||||
Three Months Ended December 31, 2020 | ||||||||||||||||||||||||||||||||||||||
10/15/2020 | 10/26/2020 | 11/19/2020 | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
$ | $ | $ | $ |
Three Months Ended December 31, | ||||||||||||||
2021 | 2020 | |||||||||||||
Numerators: | ||||||||||||||
Net income attributable to The RMR Group Inc. | $ | $ | ||||||||||||
Income attributable to unvested participating securities | ( | ( | ||||||||||||
Net income attributable to The RMR Group Inc. used in calculating basic EPS | ||||||||||||||
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 interest’s Class A Units for Class A Common Shares (1) | ( | ( | ||||||||||||
Net income used in calculating diluted EPS | $ | $ | ||||||||||||
Denominators: | ||||||||||||||
Common shares outstanding | ||||||||||||||
Unvested participating securities | ( | ( | ||||||||||||
Weighted average common shares outstanding - basic | ||||||||||||||
Effect of dilutive securities: | ||||||||||||||
Assumed redemption of noncontrolling interest’s Class A Units for Class A Common Shares | ||||||||||||||
Weighted average common shares outstanding - diluted | ||||||||||||||
Net income attributable to The RMR Group Inc. per common share - basic | $ | $ | ||||||||||||
Net income attributable to The RMR Group Inc. per common share - diluted | $ | $ |
Three Months Ended December 31, | ||||||||||||||
2021 | 2020 | |||||||||||||
Income before income tax expense | $ | $ | ||||||||||||
RMR Inc. franchise tax expense and interest income | ||||||||||||||
Net income before noncontrolling interest | ||||||||||||||
Net income attributable to noncontrolling interest | ( | ( | ||||||||||||
Net income attributable to RMR Inc. before income tax expense | ||||||||||||||
Income tax expense attributable to RMR Inc. | ( | ( | ||||||||||||
RMR Inc. franchise tax expense and interest income | ( | ( | ||||||||||||
Net income attributable to RMR Inc. | $ | $ |
Three Months Ended December 31, 2021 | ||||||||||||||||||||
All Other | ||||||||||||||||||||
RMR LLC (1) | Operations | Total | ||||||||||||||||||
Revenues: | ||||||||||||||||||||
Management services | $ | $ | $ | |||||||||||||||||
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 | ||||||||||||||||||||
Total compensation and benefits expense | ||||||||||||||||||||
General and administrative | ||||||||||||||||||||
Other reimbursable expenses | ||||||||||||||||||||
Depreciation and amortization | ||||||||||||||||||||
Total expenses | ||||||||||||||||||||
Operating income (loss) | ( | |||||||||||||||||||
Interest and other income | ||||||||||||||||||||
Unrealized gain on equity method investments accounted for under the fair value option | ||||||||||||||||||||
Income (loss) before income tax expense | ( | |||||||||||||||||||
Income tax expense | ( | ( | ||||||||||||||||||
Net income (loss) | $ | $ | ( | $ | ||||||||||||||||
Total assets | $ | $ | $ |
Three Months Ended December 31, 2020 | ||||||||||||||||||||
All Other | ||||||||||||||||||||
RMR LLC (1) | Operations | Total | ||||||||||||||||||
Revenues: | ||||||||||||||||||||
Management services | $ | $ | $ | |||||||||||||||||
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 (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 | ( | |||||||||||||||||||
Income tax expense | ( | ( | ||||||||||||||||||
Net income (loss) | $ | $ | ( | $ | ||||||||||||||||
Total assets | $ | $ | $ |
Lesser of Historical Cost of Assets | ||||||||||||||||||||
Under Management or | ||||||||||||||||||||
Total Market Capitalization as of | ||||||||||||||||||||
December 31, | ||||||||||||||||||||
REIT | Primary Strategy | 2021 | 2020 | |||||||||||||||||
DHC | Medical office and life science properties, senior living communities and wellness centers | $ | 4,457,630 | $ | 4,523,958 | |||||||||||||||
ILPT | Industrial and logistics properties | 1,897,426 | 1,963,013 | |||||||||||||||||
OPI | Office properties primarily leased to single tenants, including the government | 3,813,203 | 3,340,627 | |||||||||||||||||
SVC | Hotels and net lease service and necessity-based retail properties | 8,651,159 | 8,158,795 | |||||||||||||||||
$ | 18,819,418 | $ | 17,986,393 |
Three Months Ended December 31, 2021 | Three Months Ended December 31, 2020 | |||||||||||||||||||||||||||||||||||||
Base Business | Property | Base Business | Property | |||||||||||||||||||||||||||||||||||
Management | Management | Management | Management | |||||||||||||||||||||||||||||||||||
REIT | Revenues | Revenues | Total | Revenues | Revenues | Total | ||||||||||||||||||||||||||||||||
DHC | $ | 5,866 | $ | 3,259 | $ | 9,125 | $ | 5,165 | $ | 3,757 | $ | 8,922 | ||||||||||||||||||||||||||
ILPT | 2,768 | 1,747 | 4,515 | 3,099 | 1,775 | 4,874 | ||||||||||||||||||||||||||||||||
OPI | 4,574 | 5,990 | 10,564 | 3,895 | 5,372 | 9,267 | ||||||||||||||||||||||||||||||||
SVC | 10,446 | 1,224 | 11,670 | 9,396 | 821 | 10,217 | ||||||||||||||||||||||||||||||||
$ | 23,654 | $ | 12,220 | $ | 35,874 | $ | 21,555 | $ | 11,725 | $ | 33,280 |
Three Months Ended December 31, 2021 | Three Months Ended December 31, 2020 | |||||||||||||||||||||||||||||||||||||
Base Business | Property | Base Business | Property | |||||||||||||||||||||||||||||||||||
Management | Management | Management | Management | |||||||||||||||||||||||||||||||||||
Revenues | Revenues | Total | Revenues | Revenues | Total | |||||||||||||||||||||||||||||||||
ABP Trust | $ | 589 | $ | 507 | $ | 1,096 | $ | 583 | $ | 473 | $ | 1,056 | ||||||||||||||||||||||||||
Other private entities | 812 | 492 | 1,304 | 333 | 181 | 514 | ||||||||||||||||||||||||||||||||
ALR | 1,145 | — | 1,145 | 1,976 | — | 1,976 | ||||||||||||||||||||||||||||||||
Sonesta | 1,814 | — | 1,814 | 353 | — | 353 | ||||||||||||||||||||||||||||||||
TA | 3,611 | — | 3,611 | 3,309 | — | 3,309 | ||||||||||||||||||||||||||||||||
$ | 7,971 | $ | 999 | $ | 8,970 | $ | 6,554 | $ | 654 | $ | 7,208 |
Three Months Ended December 31, | ||||||||||||||||||||||||||
2021 | 2020 | $ Change | % Change | |||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||
Management services | $ | 44,897 | $ | 40,747 | $ | 4,150 | 10.2% | |||||||||||||||||||
Advisory services | 1,118 | 586 | 532 | 90.8% | ||||||||||||||||||||||
Total management and advisory services revenues | 46,015 | 41,333 | 4,682 | 11.3% | ||||||||||||||||||||||
Reimbursable compensation and benefits | 14,397 | 13,225 | 1,172 | 8.9% | ||||||||||||||||||||||
Reimbursable equity based compensation | 1,598 | 3,003 | (1,405) | (46.8)% | ||||||||||||||||||||||
Other reimbursable expenses | 119,558 | 99,385 | 20,173 | 20.3% | ||||||||||||||||||||||
Total reimbursable costs | 135,553 | 115,613 | 19,940 | 17.2% | ||||||||||||||||||||||
Total revenues | 181,568 | 156,946 | 24,622 | 15.7% | ||||||||||||||||||||||
Expenses: | ||||||||||||||||||||||||||
Compensation and benefits | 31,791 | 29,494 | 2,297 | 7.8% | ||||||||||||||||||||||
Equity based compensation | 2,219 | 3,561 | (1,342) | (37.7)% | ||||||||||||||||||||||
Separation costs | — | 4,159 | (4,159) | n/m | ||||||||||||||||||||||
Total compensation and benefits expense | 34,010 | 37,214 | (3,204) | (8.6)% | ||||||||||||||||||||||
General and administrative | 7,671 | 6,260 | 1,411 | 22.5% | ||||||||||||||||||||||
Other reimbursable expenses | 119,558 | 99,385 | 20,173 | 20.3% | ||||||||||||||||||||||
Transaction and acquisition related costs | — | 117 | (117) | n/m | ||||||||||||||||||||||
Depreciation and amortization | 236 | 238 | (2) | (0.8)% | ||||||||||||||||||||||
Total expenses | 161,475 | 143,214 | 18,261 | 12.8% | ||||||||||||||||||||||
Operating income | 20,093 | 13,732 | 6,361 | 46.3% | ||||||||||||||||||||||
Interest and other income | 57 | 231 | (174) | (75.3)% | ||||||||||||||||||||||
Equity in earnings of investees | — | 424 | (424) | n/m | ||||||||||||||||||||||
Unrealized gain on equity method investments accounted for under the fair value option | 1,196 | 8,122 | (6,926) | (85.3)% | ||||||||||||||||||||||
Income before income tax expense | 21,346 | 22,509 | (1,163) | (5.2)% | ||||||||||||||||||||||
Income tax expense | (3,054) | (2,756) | (298) | (10.8)% | ||||||||||||||||||||||
Net income | 18,292 | 19,753 | (1,461) | (7.4)% | ||||||||||||||||||||||
Net income attributable to noncontrolling interest | (10,250) | (10,856) | 606 | 5.6% | ||||||||||||||||||||||
Net income attributable to The RMR Group Inc. | $ | 8,042 | $ | 8,897 | $ | (855) | (9.6)% |
Maximum | ||||||||||||||||||||||||||
Total Number of | Approximate Dollar | |||||||||||||||||||||||||
Shares Purchased | Value of Shares that | |||||||||||||||||||||||||
Number of | Average | as Part of Publicly | May Yet Be Purchased | |||||||||||||||||||||||
Shares | Price Paid | Announced Plans | Under the Plans or | |||||||||||||||||||||||
Calendar Month | Purchased (1) | per Share | or Programs | Programs | ||||||||||||||||||||||
October 2021 | 225 | $ | 34.05 | N/A | N/A | |||||||||||||||||||||
Total | 225 | $ | 34.05 | N/A | N/A |
Exhibit Number | Description | |||||||
101.INS | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | |||||||
101.SCH | XBRL Taxonomy Extension Schema Document. (Filed herewith.) | |||||||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document. (Filed herewith.) | |||||||
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document. (Filed herewith.) | |||||||
101.LAB | XBRL Taxonomy Extension Label Linkbase Document. (Filed herewith.) | |||||||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document. (Filed herewith.) | |||||||
104 | Cover Page Interactive Data File. (formatted as Inline XBRL and contained in Exhibit 101.) | |||||||
(1) | Incorporated by reference to the Registrant’s Registration Statement on Form S-1 (File No. 333-207423) filed with the U.S. Securities and Exchange Commission on October 14, 2015. | |||||||
(2) | Incorporated by reference to the Registrant’s Current Report on Form 8-K (File No. 001-37616) filed with the U.S. Securities and Exchange Commission on March 11, 2016. | |||||||
(3) | Incorporated by reference to the Registrant’s Current Report on Form 8-K (File No. 001-37616) filed with the U.S. Securities and Exchange Commission on September 15, 2017. | |||||||
(4) | Incorporated by reference to the Registrant’s Amendment No. 1 to Registration Statement on Form S-1 (File No. 333-207423) filed with the U.S. Securities and Exchange Commission on November 2, 2015. | |||||||
By: | /s/ Matthew P. Jordan | |||||||
Matthew P. Jordan | ||||||||
Executive Vice President, Chief Financial Officer and Treasurer (principal financial officer and principal accounting officer) | ||||||||
Dated: January 27, 2022 | ||||||||
Date: January 27, 2022 | /s/ Adam D. Portnoy | ||||
Adam D. Portnoy Managing Director, President and Chief Executive Officer (principal executive officer) |
Date: January 27, 2022 | /s/ Matthew P. Jordan | ||||
Matthew P. Jordan Executive Vice President, Chief Financial Officer and Treasurer (principal financial officer and principal accounting officer) |
/s/ Adam D. Portnoy | /s/ Matthew P. Jordan | |||||||
Adam D. Portnoy Managing Director, President and Chief Executive Officer (principal executive officer) | Matthew P. Jordan Executive Vice President, Chief Financial Officer and Treasurer (principal financial officer and principal accounting officer) |
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares |
Dec. 31, 2021 |
Sep. 30, 2021 |
---|---|---|
Class A Common Stock | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 31,600,000 | 31,600,000 |
Common stock, shares issued (in shares) | 15,485,011 | 15,485,236 |
Common stock shares outstanding (in shares) | 15,485,011 | 15,485,236 |
Class B-1 Common Stock | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 1,000,000 | 1,000,000 |
Common stock, shares issued (in shares) | 1,000,000 | 1,000,000 |
Common stock shares outstanding (in shares) | 1,000,000 | 1,000,000 |
Class B-2 Common Stock | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 15,000,000 | 15,000,000 |
Common stock, shares issued (in shares) | 15,000,000 | 15,000,000 |
Common stock shares outstanding (in shares) | 15,000,000 | 15,000,000 |
Condensed Consolidated Statements of Shareholders' Equity - USD ($) $ in Thousands |
Total |
Total Shareholders' Equity |
Common Stock
Class A Common Stock
|
Common Stock
Class B-1 Common Stock
|
Common Stock
Class B-2 Common Stock
|
Additional Paid In Capital |
Retained Earnings |
Cumulative Common Distributions |
Noncontrolling Interest |
---|---|---|---|---|---|---|---|---|---|
Balance beginning at Sep. 30, 2020 | $ 540,902 | $ 295,919 | $ 15 | $ 1 | $ 15 | $ 106,622 | $ 286,249 | $ (96,983) | $ 244,983 |
Increase (Decrease) in Shareholders' Equity | |||||||||
Share awards, net | 1,012 | 1,012 | 1,012 | ||||||
Net income | 19,753 | 8,897 | 8,897 | 10,856 | |||||
Tax distributions to member | (2,820) | (2,820) | |||||||
Common share distributions | (10,730) | (6,230) | (6,230) | (4,500) | |||||
Balance ending at Dec. 31, 2020 | 548,117 | 299,598 | 15 | 1 | 15 | 107,634 | 295,146 | (103,213) | 248,519 |
Balance beginning at Sep. 30, 2021 | 347,715 | 195,120 | 15 | 1 | 15 | 109,910 | 321,945 | (236,766) | 152,595 |
Increase (Decrease) in Shareholders' Equity | |||||||||
Share awards, net | 613 | 613 | 613 | ||||||
Net income | 18,292 | 8,042 | 8,042 | 10,250 | |||||
Tax distributions to member | (1,979) | (1,979) | |||||||
Common share distributions | (10,764) | (6,264) | (6,264) | (4,500) | |||||
Balance ending at Dec. 31, 2021 | $ 353,877 | $ 197,511 | $ 15 | $ 1 | $ 15 | $ 110,523 | $ 329,987 | $ (243,030) | $ 156,366 |
Basis of Presentation |
3 Months Ended |
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Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation 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 December 31, 2021, RMR Inc. owned 15,485,011 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 December 31, 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 December 31, 2021, which is presented as a noncontrolling interest within the condensed consolidated financial statements. Adam D. Portnoy, one of our Managing Directors, is the sole trustee of ABP Trust, and owns all of ABP Trust’s voting securities. RMR LLC was founded in 1986 to manage public investments in real estate and, as of December 31, 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: AlerisLife Inc. (formerly known as Five Star Senior Living Inc.), or ALR, 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, ALR, 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, or Tremont Realty Capital, an investment adviser registered with the Securities and Exchange Commission, or SEC, provides advisory services for Seven Hills Realty Trust, 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 that merged with and into SEVN on September 30, 2021, or the Merger, with SEVN continuing as the surviving company. Tremont Realty Capital has in the past and may in the future manage additional accounts that invest in commercial real estate debt. Employees of Tremont Realty Capital may 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. The accompanying condensed consolidated financial statements are unaudited. Certain information and disclosures required by U.S. Generally Accepted Accounting Principles, or GAAP, for complete financial statements have been condensed or omitted. We believe the disclosures made are adequate to make the information presented not misleading. However, the accompanying condensed consolidated financial statements should be read in conjunction with the financial statements and notes contained in our Annual Report on Form 10-K for the fiscal year ended September 30, 2021, or our 2021 Annual Report. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair statement of results for the interim period have been included. All intercompany transactions and balances with or among our consolidated subsidiaries have been eliminated. Our operating results for interim periods are not necessarily indicative of the results that may be expected for the full year. Preparation of these financial statements in conformity with GAAP requires our management to make certain estimates and assumptions that may affect the amounts reported in these financial statements and related notes. The actual results could differ from these estimates.
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Revenue Recognition |
3 Months Ended |
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Dec. 31, 2021 | |
Revenue Recognition [Abstract] | |
Revenue Recognition | 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 with 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 in cash monthly in arrears. We earned aggregate base business management fees from the Managed Equity REITs of $23,654 and $21,555 for the three months ended December 31, 2021 and 2020, 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 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. We did not earn incentive business management fees from the Managed Equity REITs for the calendar years 2021 and 2020. 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 ALR, ALR’s revenues from all sources reportable under GAAP, less any revenues reportable by ALR 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 in cash monthly in advance. We earned aggregate fees from the Managed Operating Companies of $6,570 and $5,638 for the three months ended December 31, 2021 and 2020, 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 in cash monthly in arrears. We earned aggregate fees from the Managed Private Real Estate Capital clients of $1,401 and $916 for the three months ended December 31, 2021 and 2020, 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 properties owned by the Managed Equity REITs up to 5.0% of the cost of such construction. We earned aggregate property management fees of $13,219 and $12,379 for the three months ended December 31, 2021 and 2020, respectively. 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. No incentive fees were earned from SEVN for the three months ended December 31, 2021. 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 three months ended December 31, 2020. RMR Advisors LLC, or RMR Advisors, merged into Tremont Realty Capital on January 6, 2021, and previously provided advisory services for SEVN (then RMR Mortgage Trust, or 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). Tremont Realty Capital and RMR Advisors, as applicable, earned advisory services revenue from SEVN and TRMT of $1,118 and $586 for the three months ended December 31, 2021 and 2020, respectively. The Tremont business earns between 0.5% and 1.0% of the aggregate principal amounts of any loans it brokers. The Tremont business earned fees for such brokerage services of $53 and $259 for the three months ended December 31, 2021 and 2020, respectively, which amounts are included in management services revenue in our condensed 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 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. We realized reimbursable compensation and benefits of $14,397 and $13,225 for the three months ended December 31, 2021 and 2020, respectively. Reimbursable Equity Based Compensation — Reimbursable equity based compensation includes awards of common shares by our clients directly to certain of our officers and employees in connection with the provision of management services to those clients. The revenue in respect of each award is based on the fair value as of the award date for those shares that have vested, with subsequent changes in the fair value of the unvested awards being recognized in our condensed consolidated statements of income over the requisite service periods. We record an equal, offsetting amount as equity based compensation expense for the value of these awards. We realized reimbursable equity based compensation from our clients of $1,598 and $3,003 for the three months ended December 31, 2021 and 2020, 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 realized other reimbursable expenses reflecting corresponding amounts in revenue and expense of $119,558 and $99,385 for the three months ended December 31, 2021 and 2020, respectively. Our consolidated balance sheets as of December 31, 2021 and September 30, 2021 also include corresponding amounts in current assets and current liabilities for other reimbursable expenses of $57,238 and $55,115, respectively.
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Equity Method Investments |
3 Months Ended |
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Dec. 31, 2021 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Equity Method Investments | Equity Method Investments As of December 31, 2021, we had equity method investments in SEVN and TA that were accounted for under the fair value option. Seven Hills Realty Trust As of December 31, 2021, Tremont Realty Capital owned 825,651, or approximately 5.7% of SEVN’s outstanding common shares. 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 a result of the Merger, 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 December 31, 2021 and September 30, 2021, based on quoted market prices, was $8,571 and $8,513, respectively, and is included in equity method investments accounted for under the fair value option in our condensed consolidated balance sheets. The unrealized gain in our condensed consolidated statements of income related to our investment in SEVN was $58 for the three months ended December 31, 2021. 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 that were accounted for under the equity method of accounting. Pursuant to the equity method, we recorded our share of earnings from our investment in TRMT in equity in earnings of investees in our condensed consolidated statements of income which totaled $424 for the three months ended December 31, 2020. We received aggregate distributions from TRMT of $17 during the three months ended December 31, 2020. Pursuant to the Merger, each common share of TRMT converted to 0.516 common shares of SEVN. TravelCenters of America Inc. As of December 31, 2021, we owned 621,853, or approximately 4.2%, 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 December 31, 2021 and September 30, 2021, based on quoted market prices, was $32,101 and $30,963, respectively, and is included in equity method investments accounted for under the fair value option in our condensed consolidated balance sheets. The unrealized gain in our condensed consolidated statements of income related to our investment in TA was $1,138 and $8,122 for the three months ended December 31, 2021 and 2020, respectively.
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Income Taxes |
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Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | 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 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. For the three months ended December 31, 2021 and 2020, we recognized estimated income tax expense of $3,054 and $2,756, respectively, which includes $2,244 and $2,024, respectively, of U.S. federal income tax and $810 and $732, respectively, of state income taxes. A reconciliation of the statutory income tax rate to the effective tax rate is as follows:
(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, which reduced the effective income tax rate by 2.3% for the three months ended December 31, 2020. 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 December 31, 2021 and 2020, we had no uncertain tax positions.
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Fair Value of Financial Instruments |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Financial Instruments | Fair Value of Financial InstrumentsAs of December 31, 2021 and September 30, 2021, 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 December 31, 2021 and September 30, 2021:
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Related Person Transactions |
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Related Person Transactions | 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 December 31, 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 each of the Managed REITs, ALR and TA, a managing trustee or managing director of each of the Managed REITs, ALR 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 ALR, a managing trustee of OPI and a director of Sonesta (and its parent), and she 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 December 31, 2021, Adam D. Portnoy beneficially owned, in aggregate, 6.2% of ALR’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, 4.4% of TA’s outstanding common shares (including through RMR LLC) and 7.4% of SEVN’s outstanding common shares (including through Tremont Realty Capital). 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 are provided or arranged by Tremont Realty Capital, and prior to the Merger, Tremont Realty Capital provided or arranged for the officers, overhead and required office space for TRMT. All of SEVN’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. Additional information about our related person transactions appears in Note 7, Shareholders’ Equity, below and in our 2021 Annual Report. Revenues from Related Parties For the three months ended December 31, 2021 and 2020, we recognized revenues from related parties as set forth in the following table:
(1)On December 23, 2021, DHC sold a 35% equity interest in its existing joint venture with an institutional investor. Following this sale, DHC owned a 20% equity interest in this joint venture. As a result, the management fees earned with respect to this joint venture are characterized as Managed Private Real Estate Capital for periods on and after December 23, 2021 and as Managed Public Real Estate Capital for periods prior to December 23, 2021. (2)As discussed in Note 1, Basis of Presentation, TRMT merged with and into SEVN on September 30, 2021, with SEVN continuing as the surviving company. This table presents revenues for the three months ended December 31, 2020, for TRMT separately as they relate to a period prior to the Merger. Amounts Due From Related Parties The following table represents amounts due from related parties as of the dates indicated:
Leases As of December 31, 2021, RMR LLC leased from ABP Trust and certain Managed Equity REITs office space for use as our headquarters and local offices. We incurred rental expense under related party leases of $1,506 and $1,383 for the three months ended December 31, 2021 and 2020, respectively. 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. As of December 31, 2021, our condensed 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 three months ended December 31, 2021 and 2020, pursuant to the RMR LLC operating agreement, RMR LLC made required quarterly tax distributions to holders of its membership units totaling $4,158 and $5,855, respectively, of which $2,179 and $3,035, respectively, was distributed to us and $1,979 and $2,820, respectively, was distributed to ABP Trust, based on each membership unit holder’s respective ownership percentage. The amounts distributed to us were eliminated in our condensed consolidated financial statements, and the amounts distributed to ABP Trust were recorded as a reduction of its noncontrolling interest. We used funds from these distributions to pay certain of our U.S. federal and state income tax liabilities and to pay part of our obligations under the Tax Receivable Agreement. Separation Arrangements We entered into retirement agreements with 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 separation arrangements, for which there remain no substantive performance obligations, are recorded in our condensed 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, in October 2020, 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. For the three months ended December 31, 2021 and 2020, we recognized cash and equity based separation costs as set forth in the following table:
(1)During the three months ended December 31, 2020, we were indemnified for a withdrawal liability of $515 that we had recorded during the three months ended September 30, 2020 related to a prior client’s shared pension plan accounted for as a multiemployer benefit plan.
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Shareholders’ Equity | Shareholders’ Equity We award our Class A Common Shares to our Directors, officers and employees under the 2016 Omnibus Equity Plan adopted in 2016, or the 2016 Plan. Shares issued to Directors in that capacity vest immediately. Shares issued to employees in that capacity vest in five equal, consecutive, annual installments, with the first installment vesting on the date of award. We recognize forfeitures as they occur. Compensation expense related to share awards is determined based on the market value of our shares on the date of award, with the aggregate value of the awarded shares amortized to expense over the related vesting period. Expense recognized for shares awarded to Directors in that capacity are included in general and administrative expenses and for shares awarded to employees in that capacity are included in equity based compensation in our condensed consolidated statements of income. Equity based compensation expense related to shares awarded to certain officers and employees was $621 and $558 for the three months ended December 31, 2021 and 2020, respectively. As of December 31, 2021, we had 160,310 unvested shares outstanding which are scheduled to vest as follows: 56,290 shares in 2022, 48,460 shares in 2023, 36,300 shares in 2024 and 19,260 in 2025. 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 three months ended December 31, 2021 was $8, which is recorded as a decrease to additional paid in capital within shareholders’ equity in our condensed consolidated balance sheets. In connection with the issuances and repurchases of our Class A Common Shares, and as required by the RMR LLC operating agreement, RMR LLC concurrently issues or acquires an identical number of Class A Units from RMR Inc. Distributions During the three months ended December 31, 2021 and 2020, we declared and paid dividends on our Class A Common Shares and Class B-1 Common Shares as follows:
These dividends were funded in part by distributions from RMR LLC to holders of its membership units as follows:
The remainder of the dividends noted above were funded with cash accumulated at RMR Inc. On January 13, 2022, we declared a quarterly dividend on our Class A Common Shares and Class B-1 Common Shares to our shareholders of record as of January 24, 2022, 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 February 17, 2022.
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Per Common Share Amounts | Per Common Share AmountsBasic 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 awarded to our employees are deemed participating securities for purposes of calculating earnings per common share because they have dividend rights. We calculate earnings per share using the two-class method. Under the two-class method, we allocate earnings proportionately to vested Class A Common Shares and Class B-1 Common Shares outstanding and unvested Class A Common Shares outstanding for the period. Earnings attributable to unvested Class A Common Shares are excluded from earnings per share under the two-class method as reflected in our condensed consolidated statements of income. The 15,000,000 Class A Units that we do not own may be redeemed for our Class A Common Shares on a one-for-one basis, or upon such redemption, we may elect to pay cash instead of issuing Class A Common Shares. Upon redemption of a Class A Unit, the Class B-2 Common Share “paired” with such unit is canceled for no additional consideration. In computing the dilutive effect, if any, that the aforementioned redemption would have on earnings per share, we considered that net income available to holders of our Class A Common Shares would increase due to elimination of the noncontrolling interest offset by any tax effect, which may be dilutive. For the three months ended December 31, 2021 and 2020, the assumed redemption is dilutive to earnings per share as presented in the table below. The calculation of basic and diluted earnings per share for the three months ended December 31, 2021 and 2020, is as follows:
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Net Income Attributable to RMR Inc. |
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Net Income Attributable to RMR Inc. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Income Attributable to RMR Inc. | Net Income Attributable to RMR Inc. Net income attributable to RMR Inc. for the three months ended December 31, 2021 and 2020, is calculated as follows:
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Segment Reporting |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting | 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.
(1) Intersegment revenues of $1,001 recognized by RMR LLC for services provided to our All Other Operations segment have been eliminated in the condensed consolidated financial statements.
(1) Intersegment revenues of $1,142 recognized by RMR LLC for services provided to our All Other Operations segment have been eliminated in the condensed consolidated financial statements.
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Income Taxes (Tables) |
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Dec. 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of reconciliation of the statutory income tax rate to the effective tax rate | A reconciliation of the statutory income tax rate to the effective tax rate is as follows:
(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, which reduced the effective income tax rate by 2.3% for the three months ended December 31, 2020.
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Fair Value of Financial Instruments (Tables) |
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of assets and liabilities measured at fair value | 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 December 31, 2021 and September 30, 2021:
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Related Person Transactions (Tables) |
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Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of related party transactions | For the three months ended December 31, 2021 and 2020, we recognized revenues from related parties as set forth in the following table:
(1)On December 23, 2021, DHC sold a 35% equity interest in its existing joint venture with an institutional investor. Following this sale, DHC owned a 20% equity interest in this joint venture. As a result, the management fees earned with respect to this joint venture are characterized as Managed Private Real Estate Capital for periods on and after December 23, 2021 and as Managed Public Real Estate Capital for periods prior to December 23, 2021. (2)As discussed in Note 1, Basis of Presentation, TRMT merged with and into SEVN on September 30, 2021, with SEVN continuing as the surviving company. This table presents revenues for the three months ended December 31, 2020, for TRMT separately as they relate to a period prior to the Merger. The following table represents amounts due from related parties as of the dates indicated:
For the three months ended December 31, 2021 and 2020, we recognized cash and equity based separation costs as set forth in the following table:
(1)During the three months ended December 31, 2020, we were indemnified for a withdrawal liability of $515 that we had recorded during the three months ended September 30, 2020 related to a prior client’s shared pension plan accounted for as a multiemployer benefit plan.
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Shareholders’ Equity (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity Note [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of dividends declared | During the three months ended December 31, 2021 and 2020, we declared and paid dividends on our Class A Common Shares and Class B-1 Common Shares as follows:
These dividends were funded in part by distributions from RMR LLC to holders of its membership units as follows:
|
Per Common Share Amounts (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of earnings per share | The calculation of basic and diluted earnings per share for the three months ended December 31, 2021 and 2020, is as follows:
|
Net Income Attributable to RMR Inc. (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Income Attributable to RMR Inc. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of net income attributable to parent | Net income attributable to RMR Inc. for the three months ended December 31, 2021 and 2020, is calculated as follows:
|
Segment Reporting (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of segment reporting information |
(1) Intersegment revenues of $1,001 recognized by RMR LLC for services provided to our All Other Operations segment have been eliminated in the condensed consolidated financial statements.
(1) Intersegment revenues of $1,142 recognized by RMR LLC for services provided to our All Other Operations segment have been eliminated in the condensed consolidated financial statements.
|
Basis of Presentation (Details) |
3 Months Ended |
---|---|
Dec. 31, 2021
real_estate_investment_trust
company
shares
| |
Related Party Transaction [Line Items] | |
Number of managed trusts | real_estate_investment_trust | 4 |
Number of real estate operating companies | company | 3 |
RMR LLC | |
Related Party Transaction [Line Items] | |
Ownership percentage | 52.40% |
Class B membership units | |
Related Party Transaction [Line Items] | |
Membership units (in shares) | 1,000,000 |
Class A Common Stock | Class A membership units | |
Related Party Transaction [Line Items] | |
Membership units (in shares) | 15,485,011 |
Capital Unit Redeemable Class A Units | ABP Trust | |
Related Party Transaction [Line Items] | |
Membership units (in shares) | 15,000,000 |
Capital Unit Redeemable Class A Units | ABP Trust | RMR LLC | |
Related Party Transaction [Line Items] | |
Ownership percentage | 47.60% |
Revenue Recognition - Other Management Agreements (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Managed Operating Companies | ||
Related Party Transaction [Line Items] | ||
Business management fee percent based on management agreements | 0.60% | |
Aggregate business management fees | $ 6,570 | $ 5,638 |
ABP Trust, AIC, The Industrial Fund and The Open End Fund | ||
Related Party Transaction [Line Items] | ||
Aggregate business management fees | $ 1,401 | $ 916 |
Revenue Recognition - Property Management Fees (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Revenue Recognition [Abstract] | ||
Property management fee percent based on gross collected rents | 3.00% | |
Property management fee percent based on the cost of construction | 5.00% | |
Aggregate property management fees | $ 13,219 | $ 12,379 |
Revenue Recognition - Reimbursable Payroll Related and Other Costs (Details) - USD ($) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
Sep. 30, 2021 |
|
Disaggregation of Revenue [Line Items] | |||
Total revenues | $ 181,568 | $ 156,946 | |
Equity based compensation expense and related reimbursements | 1,598 | 3,003 | |
Due from related parties | 108,933 | $ 102,992 | |
Reimbursable compensation and benefits | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues | 14,397 | 13,225 | |
Due from related parties | 57,238 | $ 55,115 | |
Other reimbursable expenses | |||
Disaggregation of Revenue [Line Items] | |||
Total revenues | $ 119,558 | $ 99,385 |
Income Taxes - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Income Tax Disclosure [Abstract] | ||
Income tax expense | $ 3,054 | $ 2,756 |
Federal income tax expense | 2,244 | 2,024 |
State income tax expense | $ 810 | 732 |
Reduction in provision for other adjustments | $ 520 | |
Reduction in provision for other adjustments, impact on diluted earnings per share (in dollars per share) | $ 0.02 | |
Reduction in effective income tax rate | 0.00% | (2.30%) |
Income Taxes - Reconciliation of Income Tax Rate (Details) |
3 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Income Tax Disclosure [Abstract] | ||
Income taxes computed at the federal statutory rate | 21.00% | 21.00% |
State taxes, net of federal benefit | 3.10% | 3.10% |
Permanent items | 0.30% | 0.50% |
Net income attributable to noncontrolling interest | (10.10%) | (10.10%) |
Other | 0.00% | (2.30%) |
Total | 14.30% | 12.20% |
Related Person Transactions - Leases (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
ABP Trust and Managed REIT | ||
Related Party Transaction [Line Items] | ||
Lease expense, rental expense | $ 1,506 | $ 1,383 |
Related Person Transactions - Tax Related Payments (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
RMR LLC | ||
Related Party Transaction [Line Items] | ||
Tax distributions | $ 2,179 | $ 3,035 |
ABP Trust | RMR LLC | ||
Related Party Transaction [Line Items] | ||
Tax distributions | $ 1,979 | 2,820 |
ABP Trust | Up C Transaction | ||
Related Party Transaction [Line Items] | ||
Tax receivable agreement, percent of payment | 85.00% | |
Liability related to tax receivable agreement | $ 27,792 | |
Current portion of liability related to tax receivable agreement | 2,215 | |
ABP Trust and Managed REIT | RMR LLC | ||
Related Party Transaction [Line Items] | ||
Tax distributions | $ 4,158 | $ 5,855 |
Related Person Transactions - Separation Arrangements (Details) - USD ($) $ in Thousands |
1 Months Ended | 3 Months Ended | |
---|---|---|---|
Oct. 31, 2020 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Related Party Transaction [Line Items] | |||
Separation costs | $ 0 | $ 4,159 | |
Pension plan liability | 515 | ||
Former Executive Officer | |||
Related Party Transaction [Line Items] | |||
Cash separation costs | 0 | 2,900 | |
Equity based separation costs | 0 | 295 | |
Separation costs | 0 | 3,195 | |
Former Nonexecutive Officer | |||
Related Party Transaction [Line Items] | |||
Cash separation costs | 0 | 805 | |
Equity based separation costs | 0 | 159 | |
Separation costs | $ 0 | $ 964 | |
David M. Blackman | |||
Related Party Transaction [Line Items] | |||
Number of accelerated vesting shares (in shares) | 9,400 | ||
David M. Blackman | Former Executive Officer | Cash payment | |||
Related Party Transaction [Line Items] | |||
Related party transaction | $ 2,850 |
Shareholders’ Equity - Additional Information (Details) $ in Thousands |
3 Months Ended | |
---|---|---|
Dec. 31, 2021
USD ($)
vesting_installment
shares
|
Dec. 31, 2020
USD ($)
|
|
Class of Stock [Line Items] | ||
Equity based compensation expense | $ | $ 621 | $ 558 |
Unvested shares outstanding (in shares) | 160,310 | |
Vesting 2022 | ||
Class of Stock [Line Items] | ||
Shares vesting (in shares) | 56,290 | |
Vesting 2023 | ||
Class of Stock [Line Items] | ||
Shares vesting (in shares) | 48,460 | |
Vesting 2024 | ||
Class of Stock [Line Items] | ||
Shares vesting (in shares) | 36,300 | |
Vesting 2025 | ||
Class of Stock [Line Items] | ||
Shares vesting (in shares) | 19,260 | |
Class A Common Stock | 2016 Omnibus Equity Plan | ||
Class of Stock [Line Items] | ||
Number of annual installments | vesting_installment | 5 | |
Shares repurchased during period | $ | $ 8 |
Per Common Share Amounts - Additional Information (Details) - Class A membership units |
3 Months Ended |
---|---|
Dec. 31, 2021
shares
| |
Class of Stock [Line Items] | |
Antidilutive securities (in shares) | 15,000,000 |
Conversion ratio | 1 |
Net Income Attributable to RMR Inc. (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
Net Income Attributable to RMR Inc. | ||
Income before income tax expense | $ 21,346 | $ 22,509 |
RMR Inc. franchise tax expense and interest income | 167 | 212 |
Net income before noncontrolling interest | 21,513 | 22,721 |
Net income attributable to noncontrolling interest | (10,250) | (10,856) |
Net income attributable to RMR Inc. before income tax expense | 11,263 | 11,865 |
Income tax expense attributable to RMR Inc. | (3,054) | (2,756) |
RMR Inc. franchise tax expense and interest income | (167) | (212) |
Net income attributable to The RMR Group Inc. | $ 8,042 | $ 8,897 |
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