Document and Entity Information
Document and Entity Information Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2018 | Nov. 30, 2018 | Mar. 31, 2018 | |
Document Information [Line Items] | |||
Entity Registrant Name | RMR Group Inc. | ||
Entity Central Index Key | 1,644,378 | ||
Document Type | 10-K | ||
Document Period End Date | Sep. 30, 2018 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --09-30 | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Document Fiscal Year Focus | 2,018 | ||
Document Fiscal Period Focus | FY | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | true | ||
Entity Small Business | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 494.3 | ||
Class A common shares | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 15,229,957 | ||
Class B-1 common shares | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 1,000,000 | ||
Class B-2 common shares | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 15,000,000 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2018 | Sep. 30, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 256,848 | $ 108,640 |
Due from related parties | 28,846 | 25,161 |
Prepaid and other current assets | 10,392 | 7,092 |
Total current assets | 296,086 | 140,893 |
Furniture and equipment | 4,444 | 4,800 |
Leasehold improvements | 1,063 | 1,094 |
Capitalized software costs | 478 | 1,876 |
Total property and equipment | 5,985 | 7,770 |
Accumulated depreciation | (3,396) | (4,494) |
Total property and equipment, net | 2,589 | 3,276 |
Due from related parties, net of current portion | 8,183 | 7,551 |
Equity method investments | 7,051 | 12,162 |
Goodwill | 1,859 | 1,859 |
Intangible assets, net of amortization | 375 | 462 |
Deferred tax asset | 25,726 | 45,541 |
Other assets, net of amortization | 162,559 | 171,975 |
Total assets | 504,428 | 383,719 |
Current liabilities: | ||
Accounts payable and accrued expenses | 28,307 | 26,414 |
Total current liabilities | 28,307 | 26,414 |
Long term portion of deferred rent payable, net of current portion | 1,229 | 1,028 |
Amounts due pursuant to tax receivable agreement, net of current portion | 32,048 | 59,063 |
Employer compensation liability, net of current portion | 8,183 | 7,551 |
Total liabilities | 69,767 | 94,056 |
Commitments and contingencies | ||
Equity: | ||
Additional paid in capital | 99,239 | 95,878 |
Retained earnings | 182,877 | 86,836 |
Cumulative other comprehensive income | 82 | 84 |
Cumulative common distributions | (49,467) | (33,298) |
Total shareholders’ equity | 232,762 | 149,531 |
Noncontrolling interest | 201,899 | 140,132 |
Total equity | 434,661 | 289,663 |
Total liabilities and equity | 504,428 | 383,719 |
Class A common shares | ||
Equity: | ||
Common stock | 15 | 15 |
Class B-1 common shares | ||
Equity: | ||
Common stock | 1 | 1 |
Class B-2 common shares | ||
Equity: | ||
Common stock | $ 15 | $ 15 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2018 | Sep. 30, 2017 |
Class A common shares | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock shares authorized | 31,600,000 | 31,600,000 |
Common stock shares issued | 15,229,957 | 15,164,066 |
Common stock shares outstanding | 15,229,957 | 15,164,066 |
Class B-1 common shares | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock shares authorized | 1,000,000 | 1,000,000 |
Common stock shares issued | 1,000,000 | 1,000,000 |
Common stock shares outstanding | 1,000,000 | 1,000,000 |
Class B-2 common shares | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock shares authorized | 15,000,000 | 15,000,000 |
Common stock shares issued | 15,000,000 | 15,000,000 |
Common stock shares outstanding | 15,000,000 | 15,000,000 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Revenues | |||
Total revenues | $ 404,979 | $ 271,728 | $ 266,940 |
Expenses | |||
Compensation and benefits | 108,763 | 92,625 | 83,419 |
Equity based compensation | 10,906 | 7,128 | 8,566 |
Separation costs | 3,247 | 0 | 1,358 |
Total compensation and benefits expense | 122,916 | 99,753 | 93,343 |
General and administrative | 27,149 | 25,189 | 23,163 |
Transaction and acquisition related costs | 1,697 | 9,187 | 1,966 |
Depreciation and amortization | 1,248 | 2,038 | 1,768 |
Total expenses | 153,010 | 136,167 | 120,240 |
Operating income | 251,969 | 135,561 | 146,700 |
Interest and other income | 4,546 | 1,565 | 234 |
Tax receivable agreement remeasurement | 24,710 | 0 | 0 |
Impairment loss on TRMT investment | (4,359) | 0 | 0 |
Income before income tax expense and equity in losses of investees | 276,866 | 137,126 | 146,934 |
Income tax expense | (58,862) | (28,251) | (24,573) |
Equity in losses of investees | (578) | (206) | 0 |
Net income | 217,426 | 108,669 | 122,361 |
Net income attributable to noncontrolling interest | (121,385) | (66,376) | (85,121) |
Net income attributable to The RMR Group Inc. | 96,041 | 42,293 | 37,240 |
Other comprehensive (loss) income: | |||
Foreign currency translation adjustments | (3) | 1 | 19 |
Other comprehensive (loss) income | (3) | 1 | 19 |
Comprehensive income | 217,423 | 108,670 | 122,380 |
Comprehensive income attributable to noncontrolling interest | (121,384) | (66,376) | (85,130) |
Comprehensive income attributable to RMR Inc. | $ 96,039 | $ 42,294 | $ 37,250 |
Weighted average number of shares outstanding, basic (in shares) | 16,077 | 16,032 | 16,005 |
Weighted average number of shares outstanding, diluted (in shares) | 16,120 | 16,048 | 16,005 |
Net income attributable to The RMR Group Inc. per common share - basic (in dollars per share) | $ 5.94 | $ 2.63 | $ 2.33 |
Net income attributable to The RMR Group Inc. per common share - diluted (in dollars per share) | $ 5.92 | $ 2.63 | $ 2.33 |
Management services | |||
Revenues | |||
Revenues | $ 191,594 | $ 174,887 | $ 164,397 |
Incentive business management fees | |||
Revenues | |||
Revenues | 155,881 | 52,407 | 62,263 |
Reimbursable payroll related and other costs | |||
Revenues | |||
Revenues | 53,152 | 40,332 | 37,660 |
Advisory services | |||
Revenues | |||
Revenues | $ 4,352 | $ 4,102 | $ 2,620 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders’ Equity - USD ($) $ in Thousands | Total | Common sharesClass A common stock | Common sharesClass B-1 common stock | Common sharesClass B-2 common stock | Additional Paid In Capital | Retained Earnings | Cumulative Other Comprehensive Income | Cumulative Common Distributions | Total Shareholders' Equity | Noncontrolling Interest |
Balance beginning at Sep. 30, 2015 | $ 213,652 | $ 15 | $ 1 | $ 15 | $ 93,425 | $ 7,303 | $ 73 | $ 0 | $ 100,832 | $ 112,820 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Share grants, net | 841 | 841 | 841 | |||||||
Net income | 122,361 | 37,240 | 37,240 | 85,121 | ||||||
Incentive fee allocable to ABP Trust | (26,611) | (26,611) | ||||||||
Tax distributions to Member | (30,533) | (30,533) | ||||||||
Common share distributions | (33,338) | (17,209) | (17,209) | (16,129) | ||||||
Other comprehensive income (loss) | 19 | 10 | 10 | 9 | ||||||
Balance ending at Sep. 30, 2016 | 246,391 | 15 | 1 | 15 | 94,266 | 44,543 | 83 | (17,209) | 121,714 | 124,677 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Share grants, net | 1,612 | 1,612 | 1,612 | |||||||
Net income | 108,669 | 42,293 | 42,293 | 66,376 | ||||||
Tax distributions to Member | (35,921) | (35,921) | ||||||||
Common share distributions | (31,089) | (16,089) | (16,089) | (15,000) | ||||||
Other comprehensive income (loss) | 1 | 1 | 1 | |||||||
Balance ending at Sep. 30, 2017 | 289,663 | 15 | 1 | 15 | 95,878 | 86,836 | 84 | (33,298) | 149,531 | 140,132 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Share grants, net | 3,361 | 3,361 | 3,361 | |||||||
Net income | 217,426 | 96,041 | 96,041 | 121,385 | ||||||
Fees from services provided prior to our IPO | (127) | (127) | ||||||||
Tax distributions to Member | (44,490) | (44,490) | ||||||||
Common share distributions | (31,169) | (16,169) | (16,169) | (15,000) | ||||||
Other comprehensive income (loss) | (3) | (2) | (2) | (1) | ||||||
Balance ending at Sep. 30, 2018 | $ 434,661 | $ 15 | $ 1 | $ 15 | $ 99,239 | $ 182,877 | $ 82 | $ (49,467) | $ 232,762 | $ 201,899 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Cash Flows from Operating Activities: | |||
Net income | $ 217,426 | $ 108,669 | $ 122,361 |
Adjustments to reconcile net income to net cash from operating activities: | |||
Depreciation and amortization | 1,248 | 2,038 | 1,768 |
Straight line office rent | 201 | 250 | 328 |
Amortization expense related to other asset | 9,416 | 9,416 | 9,416 |
Deferred income taxes | 19,815 | 278 | 795 |
Operating expenses paid in RMR Inc. common shares | 4,348 | 1,970 | 933 |
Contingent consideration liability | (491) | (578) | 0 |
Tax receivable agreement remeasurement | (24,710) | 0 | 0 |
Distribution from equity method investments | 174 | 70 | 0 |
Equity in losses of investees | 578 | 206 | 0 |
Impairment loss on TRMT investment | 4,359 | 0 | 0 |
Changes in assets and liabilities: | |||
Due from related parties | (3,736) | (366) | (6,298) |
Prepaid and other current assets | (3,300) | (2,402) | (1,401) |
Accounts payable and accrued expenses | 3,142 | 6,385 | (1,562) |
Incentive fee allocable to ABP Trust | 0 | 0 | (26,611) |
Net cash from operating activities | 228,470 | 125,936 | 99,729 |
Cash Flows from Investing Activities: | |||
Purchase of property and equipment | (648) | (827) | (1,070) |
Equity method investment in Tremont Mortgage Trust | 0 | (12,002) | 0 |
Acquisitions | 0 | 0 | (2,479) |
Net cash used in investing activities | (648) | (12,829) | (3,549) |
Cash Flows from Financing Activities: | |||
Distributions to noncontrolling interest | (59,490) | (50,921) | (46,662) |
Distributions to common shareholders | (16,169) | (16,089) | (17,209) |
Repurchase of common shares | (987) | (358) | (91) |
Payments under tax receivable agreement | (2,962) | (2,931) | (905) |
Net cash used in financing activities | (79,608) | (70,299) | (64,867) |
Effect of exchange rate fluctuations on cash and cash equivalents | (6) | (1) | 23 |
Increase in cash and cash equivalents | 148,208 | 42,807 | 31,336 |
Cash and cash equivalents at beginning of period | 108,640 | 65,833 | 34,497 |
Cash and cash equivalents at end of period | 256,848 | 108,640 | 65,833 |
Supplemental cash flow information: | |||
Income taxes paid | 37,653 | 27,765 | 25,811 |
Supplemental schedule of non-cash activities: | |||
Fair value of share based payments recorded | $ 7,421 | $ 5,761 | $ 7,997 |
Organization
Organization | 12 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | Organization The RMR Group Inc., or RMR Inc., is a holding company incorporated as a Maryland corporation on May 28, 2015 and substantially all of its business is conducted by its majority owned subsidiary, The RMR Group LLC, or RMR LLC. RMR LLC is a Maryland limited liability company. RMR Inc. serves as the sole managing member of RMR LLC and, in that capacity, operates and controls the business and affairs of RMR LLC. In these financial statements, unless otherwise indicated, “we” us” and “our” refer to RMR Inc. and its direct and indirect subsidiaries, including RMR LLC. As of September 30, 2018 , RMR Inc. owns 15,229,957 class A membership units of RMR LLC, or Class A Units, and 1,000,000 class B membership units of RMR LLC, or Class B Units. The aggregate RMR LLC membership units RMR Inc. owns represent approximately 52.0% of the economic interest of RMR LLC as of September 30, 2018 . 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 approximately 48.0% of the economic interest of RMR LLC as of September 30, 2018 , which is presented as a noncontrolling interest within the consolidated financial statements. Adam D. Portnoy, one of our Managing Directors, is the sole trustee of our controlling shareholder, ABP Trust, and owns a majority of ABP Trust's voting securities. RMR LLC was founded in 1986 to manage public investments in real estate and, as of September 30, 2018 , managed a diverse portfolio of publicly owned real estate and real estate related businesses. RMR LLC provides management services to: Government Properties Income Trust, or GOV, a publicly traded real estate investment trust, or REIT, that primarily owns properties located throughout the United States that are majority leased to government tenants and office properties in the metropolitan Washington, D.C. market area that are leased to government and private sector tenants; Hospitality Properties Trust, or HPT, a publicly traded REIT that primarily owns hotel and travel center properties; Industrial Logistics Properties Trust, or ILPT, a publicly traded REIT that primarily owns and leases industrial and logistics properties; Select Income REIT, or SIR, a publicly traded REIT that primarily owns properties that are leased to single tenants; and Senior Housing Properties Trust, or SNH, a publicly traded REIT that primarily owns senior living, medical office and life science properties. GOV, HPT, ILPT, SIR and SNH are collectively referred to as the Managed Equity REITs. RMR LLC also provides management services to other publicly traded and private businesses, including: Five Star Senior Living Inc., or Five Star, a publicly traded operator of senior living communities, many of which are owned by SNH; 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, some of whose U.S. hotels are owned by HPT; and TravelCenters of America LLC, or TA, an operator and franchisor of travel centers along the U.S. Interstate Highway System, many of which are owned by HPT, convenience stores with retail gas stations and restaurants. Hereinafter, Five Star, Sonesta and TA are collectively referred to as the Managed Operators. In addition, RMR LLC also provides management services to certain related additional private companies, including Affiliates Insurance Company, or AIC, an Indiana insurance company, ABP Trust and its subsidiaries (ABP Trust and its subsidiaries are collectively referred to as ABP Trust), and RMR Office Property Fund LP, or the Private Fund. RMR Advisors LLC, or RMR Advisors, is an investment adviser registered with the Securities and Exchange Commission, or SEC. RMR Advisors is a wholly owned subsidiary of RMR LLC and is the adviser to RMR Real Estate Income Fund, or RIF. RIF is a closed end investment company focused on investing in real estate securities, including REITs and other dividend paying securities, but excluding our Client Companies, as defined below. Tremont Realty Advisors LLC, or Tremont Advisors, an investment adviser registered with the SEC, was founded in 2016 in connection with the acquisition of certain assets of Tremont Realty Capital LLC, or the Tremont business. Tremont Advisors is a wholly owned subsidiary of RMR LLC that manages a private fund created for an institutional investor and other separately managed accounts that invest in commercial real estate debt, including secured mortgage debt, mezzanine financings and commercial real estate that may become owned by its clients. Tremont Advisors also manages Tremont Mortgage Trust, or TRMT, a publicly traded mortgage real estate investment trust that completed its initial public offering on September 18, 2017, or the TRMT IPO. TRMT focuses primarily on originating and investing in first mortgage loans secured by middle market and transitional commercial real estate. In these financial statements, we refer to the Managed Equity REITs, the Managed Operators, RIF, TRMT, AIC, ABP Trust, the Private Fund and other clients of the Tremont business as our Client Companies. We refer to the Managed Equity REITs and TRMT collectively as the Managed REITs. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation. All intercompany transactions and balances with or among the consolidated entities have been eliminated. Equity Method Investments. Concurrently with the TRMT IPO, Tremont Advisors purchased 600,000 common shares of TRMT at $20.00 per share, pursuant to a private placement purchase agreement entered into by Tremont Advisors and TRMT on September 13, 2017. We account for our investment in TRMT using the equity method of accounting because we are deemed to exert significant influence over, but do not control, TRMT's most significant activities. Our share of net losses from our investment in TRMT for the fiscal years ended September 30, 2018 and 2017 was $545 and $46 , respectively, and is included in equity in losses of investees in our consolidated statements of comprehensive income. In 2016, we acquired a 0.5% general partnership interest in a private fund created for an institutional investor that is managed by Tremont Advisors. This private fund is winding down and our carrying value is zero at September 30, 2018 . We account for this investment under the equity method of accounting and record our share of the investment's earnings or losses each period. Our share of net losses from the private fund for the fiscal year ended September 30, 2018 was $33 and is included in equity in losses of investees in our consolidated statements of comprehensive income. In addition, the private fund made distributions to its partners for which our share for the fiscal years ended September 30, 2018 and 2017 was $174 and $70 , respectively. In performing our periodic evaluation during the fourth quarter of fiscal year 2018 of potential impairment of our investment in TRMT, we determined, based on the length of time and the extent to which the market value of our TRMT investment was below our carrying value, that the decline in fair value was other than temporary. Accordingly, we recorded an impairment of $4,359 on our investment in TRMT as of September 30, 2018 to reduce the carrying value to its fair value. We determined fair value using the closing price of TRMT common shares as of September 30, 2018 , which is a Level 1 fair value measurement. Variable Interest Entities. We regularly evaluate our relationships and investments to determine if they constitute variable interests. A variable interest is an investment or interest that will absorb portions of an entity’s expected losses or receive portions of an entity’s expected returns. If we determine we have a variable interest in an entity, we evaluate whether such interest is in a variable interest entity, or VIE. Under the VIE model, we would be required to consolidate a VIE we manage if we are determined to be the primary beneficiary of the entity. We qualitatively assessed whether we must consolidate any of the entities we manage. Consideration of factors included, but was not limited to, our representation on the entity’s governing body, the size of our investment in each entity compared to the size of the entity and the size of other investors’ interests, the ability and rights to participate in significant policy making decisions and to replace the manager of those entities. Based on this assessment, we concluded that we are not required to consolidate any of our Client Companies. The relationships and investments related to entities in which we have a variable interest are summarized in Note 6, Related Person Transactions . Cash and Cash Equivalents. We consider highly liquid investments with original maturities of three months or less on the date of purchase to be cash equivalents. Property and Equipment. Property and equipment are stated at cost. Depreciation of furniture and equipment is computed using the straight line method over estimated useful lives ranging from three to ten years. Depreciation for leasehold improvements is computed using the straight line method over the term of the lesser of their useful lives or related lease agreements. Depreciation expense related to property and equipment for the fiscal years ended September 30, 2018 , 2017 and 2016 , was $873 , $968 and $1,105 , respectively. Capitalized Software Costs. We capitalize costs associated with the development and implementation of software created or obtained for internal use in accordance with Accounting Standards Codification, or ASC 340-50, Internal Use Software . Capitalized costs are depreciated using the straight line method over useful lives ranging between three and five years. Depreciation expense related to capitalized software costs for the fiscal years ended September 30, 2018 , 2017 and 2016 , were $288 , $447 and $598 , respectively. Goodwill. Goodwill represents the costs of business acquisitions in excess of the fair value of identifiable net assets acquired. We evaluate the recoverability of goodwill annually in the fourth quarter of each fiscal year, or more frequently, if events or changes in circumstances indicate that goodwill might be impaired. If our review indicates that the carrying amount of goodwill exceeds its fair value, we would reduce the carrying amount of goodwill to fair value. Equity-Based Compensation. The awards made under our share award plan to our directors and employees to date have been Class A Common Shares. Shares issued to directors vest immediately. Shares issued to employees vest in five equal, consecutive, annual installments, with the first installment vesting on the date of grant. We recognize forfeitures as they occur. Compensation expense related to share grants is determined based on the market value of our shares on the date of grant, with the aggregate value of the granted shares amortized to expense over the related vesting period. Shares granted to directors are included in general and administrative expenses and shares granted to employees are included in compensation and benefits in our consolidated statements of comprehensive income. Revenue Recognition. Revenues from services that we provide are recognized as earned in accordance with contractual agreements. Business Management Fees—Managed Equity REITs We earn annual base business management fees from the Managed Equity REITs pursuant to business management agreements equal to the lesser of: • the sum of (a) 0.5% of the historical cost of transferred real estate assets, if any, as defined in the applicable business management agreement, plus (b) 0.7% of the average invested capital (exclusive of the transferred real estate assets), as defined in the applicable business management agreement, up to $250,000 , plus (c) 0.5% of the average invested capital exceeding $250,000 ; and • the sum of (a) 0.7% of the average market capitalization, as defined in the applicable business management agreement, up to $250,000 , plus (b) 0.5% of the average market capitalization exceeding $250,000 . The foregoing base business management fees are paid monthly in arrears, based on the lower of the Managed Equity REIT’s monthly average historical costs of assets under management and average market capitalization during the month. For purposes of these fees, a Managed Equity REIT's assets under management do not include shares it owns of another Client Company. Our management agreements with the Managed Equity REITs have terms that end on December 31, 2038, and automatically extend on December 31st of each year so that the terms of the agreements thereafter end on the 20th anniversary of the date of the extension. Each of the Managed Equity REITs has the right to terminate each management agreement: (i) at any time on 60 days’ written notice for convenience, (ii) immediately upon written notice for cause, as defined therein, (iii) on 60 days’ written notice given within 60 days after the end of an applicable calendar year for a performance reason, as defined therein, and (iv) by written notice during the 12 months following a change of control of RMR LLC, as defined therein. We have the right to terminate the management agreements for good reason, as defined therein. Under our management agreements with the Managed Equity REITs, if a Managed Equity REIT terminates our management agreements for convenience, or if we terminate one or both of our management agreements with a Managed Equity REIT for good reason, the Managed Equity REIT is obligated to pay us a termination fee in an amount equal to the sum of the present values of the Managed Equity REIT’s monthly future fees, as defined therein, for the terminated management agreement(s) for the remaining term, assuming it had not been terminated. If a Managed Equity REIT terminates one or both of our management agreements for a performance reason, as defined therein, the Managed Equity REIT has agreed to pay to us the termination fee calculated as described above, but assuming a remaining term of 10 years . No termination fee is payable by a Managed Equity REIT if it terminates one or both of our management agreements for cause or as a result of a change of control of us, as defined in the applicable management agreement. We earned aggregate base business management fees for the fiscal years ended September 30, 2018 , 2017 and 2016 , of $120,448 , $113,377 and $104,824 , respectively, from the Managed Equity REITs. Incentive Business Management Fees—Managed Equity REITs We also may earn annual incentive business management fees from the Managed Equity REITs under the business management agreements. The incentive business management fees are contingent performance based fees which are only recognized when earned at the end of each respective measurement period. The incentive fees are calculated for each Managed Equity REIT as 12.0% of the product of (a) the equity market capitalization of the Managed Equity REIT, as defined in the applicable business management agreement, 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, subject to caps on the values of the incentive fees. The measurement period for the annual incentive business management fee is the three year period ended on December 31 of the applicable calendar year, except for ILPT, whose annual incentive business management fee will be based on a shorter period subsequent to its initial public offering (January 12, 2018 through the calendar year ended December 31, 2018). The management agreements require that any incentive fee payable by the Managed Equity REITs be paid in cash. We earned aggregate incentive business management fees from the Managed Equity REITs for the fiscal years ended September 30, 2018 , 2017 and 2016 , of $155,881 , $52,407 and $62,263 , respectively. Management Agreements—Managed Operators, ABP Trust, AIC and the Private Fund We earn fees from the Managed Operators and ABP Trust pursuant to business management agreements equal to 0.6% of: (i) in the case of Five Star, Five Star’s revenues from all sources reportable under generally accepted accounting principles, or GAAP, less any revenues reportable by Five Star with respect to properties for which it provides management services, plus the gross revenues at those properties determined in accordance with GAAP, (ii) in the case of Sonesta, Sonesta’s revenues from all sources reportable under GAAP, less any revenues reportable by Sonesta with respect to hotels for which it provides management services, plus the gross revenues at those hotels determined in accordance with GAAP, (iii) in the case of TA, the sum of TA’s gross fuel margin, as defined in the applicable agreement, plus TA’s total nonfuel revenues and (iv) in the case of ABP Trust, revenues from all sources reportable under GAAP. These fees are estimated and payable monthly in advance. We earn fees from AIC pursuant to a management agreement equal to 3.0% of its total premiums paid under active insurance underwritten or arranged by AIC. We earn fees from the Private Fund pursuant to an administration services agreement equal to 1.0% of Net Asset Value, as defined, annually. These fees are payable quarterly in arrears. We earned aggregate annual fees from the Managed Operators, ABP Trust, AIC and the Private Fund for the fiscal years ended September 30, 2018 , 2017 and 2016 , of $27,609 , $26,255 and $25,846 , respectively. Property Management Fees We earned property management fees pursuant to property management agreements with certain Client Companies. We generally earn fees under these agreements for property management services equal to 3.0% of gross collected rents. Also, under the terms of the property management agreements, we receive additional property management fees for construction supervision in connection with certain construction activities undertaken at the managed properties equal to 5.0% of the cost of such construction. We earned aggregate property management fees for the fiscal years ended September 30, 2018 , 2017 and 2016 , of $42,482 , $34,823 and $33,615 , respectively. Reimbursable Payroll Related and Other Costs Pursuant to certain of our management agreements, the companies to which we provide management services pay or reimburse us for expenses incurred on their behalf. We present certain payroll related and other cost reimbursements we receive as revenue. A significant portion of these reimbursable payroll related and other costs arises from services we provide pursuant to our property management agreements that are charged or passed through to and were paid by tenants of our Client Companies. We realized reimbursable payroll related and other costs for the fiscal years ended September 30, 2018 , 2017 and 2016 , of $53,152 , $40,332 and $37,660 , respectively. Our reimbursable payroll related and other costs include grants of common shares from Client Companies directly to certain of our officers and employees in connection with the provision of management services to those companies. The revenue in respect of each grant is based on the fair value as of the grant date for those shares that have vested, with subsequent changes in the fair value of the unvested grants being recognized in our consolidated statements of comprehensive income over the requisite service period. We record an equal offsetting amount as compensation and benefits expense for all of our payroll and related cost revenues. We realized equity based compensation expense and related reimbursements for the fiscal years ended September 30, 2018 , 2017 and 2016 , of $7,422 , $5,761 and $7,997 , respectively. We report all other expenses we incur on behalf of our Client Companies on a net basis, as the management agreements provide that reimbursable expenses are to be billed directly to the client. This net basis accounting method is supported by some or all of the following factors, which we have determined define us as an agent rather than a principal with respect to these matters: • reimbursement to us is generally completed prior to payment of the related expenses; • the property owner is contractually obligated to fund such operating costs of the property from existing cash flow or direct funding from its building operating account and we bear little or no credit risk; • our clients are the primary obligor in relationships with the affected suppliers and service providers; and • we earn no margin on the reimbursement aspect of the arrangement, obtaining reimbursement only for actual costs incurred. Advisory Services and Other Agreements RMR Advisors is compensated pursuant to its agreement with RIF at an annual rate of 0.85% of RIF’s average daily managed assets, as defined in the agreement. Average daily managed assets includes the net asset value attributable to RIF’s outstanding common shares, plus the liquidation preference of RIF’s outstanding preferred shares, plus the principal amount of any borrowings, including from banks or evidenced by notes, commercial paper or other similar instruments issued by RIF. RMR Advisors earned advisory services revenue for the fiscal years ended September 30, 2018 , 2017 and 2016 , of $2,888 , $2,451 and $2,370 , respectively. Tremont Advisors is primarily compensated pursuant to its management agreement with TRMT at an annual rate of 1.5% of TRMT's equity, as defined in the agreement. Tremont Advisors may also earn an incentive fee under this management agreement beginning in the fourth quarter of calendar year 2018 equal to the difference between: (a) the product of (i) 20% and (ii) the difference between (A) TRMT’s core earnings, as defined in the agreement, for the most recent 12 month period (or such lesser number of completed calendar quarters, if applicable), including the calendar quarter (or part thereof) for which the calculation of the incentive fee is being made, and (B) the product of (1) 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 Advisors 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 TRMT’s core earnings for the 12 most recently completed calendar quarters (or such lesser number of completed calendar quarters from the date of the completion of the TRMT IPO) in the aggregate is greater than zero. The incentive fee may not be less than zero. In June 2018, Tremont Advisors agreed to waive any business management fees otherwise due and payable by TRMT pursuant to the management agreement for the period beginning July 1, 2018 until June 30, 2020. In addition, no incentive fee will be paid or payable by TRMT to Tremont Advisors for the 2018 or 2019 calendar years. Tremont Advisors earned advisory services revenue of $1,464 and $1,651 for the fiscal years ended September 30, 2018 and 2017 , respectively. The Tremont business also acts as transaction originators for non-investment advisory clients for negotiated fees. The Tremont business earned between 0.50% and 1.0% of the aggregate principal amounts of any loans so originated. For the fiscal years ended September 30, 2018 and 2017 , the Tremont business earned fees for such origination services of $1,055 and $432 , respectively, which are included in management services revenue in our consolidated statements of comprehensive income. Other assets. On June 5, 2015 in connection with the formation of RMR Inc., each of GOV, HPT, SIR and SNH contributed cash and shares with a combined value of $167,764 . For accounting purposes, these common shares were valued at NYSE trading closing price of these shares on June 5, 2015, or $121,378 . In addition, for purposes of GAAP, we concluded that the consideration received from such Managed Equity REITs for our Class A Common Shares represented a discount to the fair value of RMR Inc.’s Class A Common Shares. As a result, we recorded $193,806 in other assets under ASC 605-50, Consideration Given to a Customer . The consideration received from such Managed Equity REITs was allocated to the 15,000,000 Class A Common Shares and the 20 year management agreements under the relative selling price method in accordance with ASC 605-25, Multiple Element Arrangements , using our best estimate of selling price for each of the deliverables. The other assets of $193,806 is being amortized against revenue recognized related to the management agreements with such Managed Equity REITs using the straight line method through the period ended December 31, 2035. For the fiscal years ended September 30, 2018 , 2017 and 2016 , we reduced revenue by $9,416 each year, related to the amortization of these other assets. As of September 30, 2018 , the remaining amount of these other assets to be amortized was $162,559 . Transaction and acquisition related costs. Transaction and acquisition related costs include costs related to completed and potential management services contracts, pre-commencement costs, acquisitions and other transactions. Such costs include advisory, underwriting expenses, commissions paid to third-party broker dealers, legal, accounting, valuation, other professional or consulting and regulatory filing fees. Transaction and acquisition related costs are expensed as incurred. Use of Estimates. 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. Concentration of Credit Risk. Financial instruments which potentially subject us to concentrations of credit risk are primarily cash accounts and amounts due from related parties. Historically, we have not experienced losses related to our cash accounts or to the credit of our Client Companies whose receivables are listed on our balance sheet as due from related parties. Reclassifications . Reclassifications have been made to the prior years' consolidated financial statements to conform to the current year's presentation. For the fiscal years ended September 30, 2018 , 2017 and 2016 , we reclassified incentive business management fees from management service revenues and equity based compensation expenses from compensation and benefits expense on the consolidated statements of comprehensive income. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 12 Months Ended |
Sep. 30, 2018 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, No. 2014-09, Revenue from Contracts with Customers . The main provision of ASU No. 2014-09 is to recognize revenue when control of the goods or services transfers to the customer, as opposed to the existing guidance of recognizing revenue when the risk and rewards transfer to the customer. We will adopt the new revenue recognition guidance in the first quarter of fiscal 2019. While we continue to believe that the adoption of this ASU will not have an impact on our net income, we continue to evaluate the impact of the ASU on our consolidated financial statements. Under existing GAAP, our management agreements are accounted for on a net basis, with the exception of amounts related to reimbursed payroll, because our contracts include provisions that mitigate credit risk with respect to services provided by third parties to our Client Companies. Under this ASU, control of the services before transfer to the client is the primary factor in determining principal versus agent assessments. Based on our evaluation of the ASU, we have determined that we control the services provided by third parties on behalf of certain of our Managed Companies. Accordingly, we will account for the cost of services provided by third parties and the related reimbursement revenue on a gross basis. Under the modified retrospective method, based upon our evaluations, which are not yet complete, we estimate that our consolidated statements of comprehensive income will reflect approximately $300,000 to $350,000 of additional reimbursable revenue and cost of services as a result of this change, with no impact on net income or cash flows. In February 2016, the FASB issued ASU No. 2016-02, Leases , which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e., lessees and lessors). ASU No. 2016-02 requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase of the leased asset by the lessee. This classification will determine whether the lease expense is recognized based on an effective interest method or on a straight line basis over the term of the lease. A lessee is also required to record a right of use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases today. ASU No. 2016-02 is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. We are currently assessing the potential impact of the adoption of ASU No. 2016-02 will have on our consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326) : Measurement of Credit Losses on Financial Instruments , which requires that entities use a new forward looking “expected loss” model that generally will result in the earlier recognition of allowance for credit losses. The measurement of expected credit losses is based upon historical experience, current conditions and reasonable and supportable forecasts that affect the collectability of the reported amount. ASU No. 2016-13 will become effective for fiscal years beginning after December 15, 2019. We are continuing to assess this guidance, but we have not historically experienced credit losses from our Client Companies and do not expect the adoption of ASU No. 2016-13 to have a material impact on our consolidated financial statements. In June 2018, the FASB issued ASU No. 2018-07, Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting , which aligns the measurement and classification guidance for share based payments to nonemployees with the guidance for share based payments to employees, with certain exceptions. ASU No. 2018-07 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. We are currently assessing the potential impact the adoption of ASU No. 2018-07 will have in our consolidated financial statements. |
Income Taxes
Income Taxes | 12 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes We are the sole managing member of RMR LLC. 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. 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 consolidated subsidiaries. On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act, or the Tax Act. The Tax Act significantly revised the U.S. corporate income tax system, by among other things, lowering corporate income tax rates. Since we have a September 30 fiscal year end, the lower corporate income tax rate of 21.0% will be phased in, resulting in a federal statutory tax rate of approximately 24.5% for our fiscal year ending September 30, 2018 , and the new corporate income tax rate of 21.0% for subsequent fiscal years thereafter. The Tax Act reduction in the corporate income tax rate also caused us to adjust our deferred tax asset to the lower federal base rates, resulting in an increase in income tax expense of $19,952 , or $1.23 per share, for our fiscal year ending September 30, 2018 . As of our fiscal year ending September 30, 2018, we have completed the accounting for the income tax effects of the Tax Act. We had income (loss) before income taxes as follows: September 30, 2018 2017 2016 United States $ 276,340 $ 136,971 $ 146,978 Foreign (52 ) (51 ) (44 ) Total $ 276,288 $ 136,920 $ 146,934 We had a provision for income taxes which consists of the following: September 30, 2018 2017 2016 Current: Federal $ 29,644 $ 22,792 $ 19,332 State 9,403 5,181 4,445 Deferred: Federal 15,043 245 699 State 4,772 33 97 Total $ 58,862 $ 28,251 $ 24,573 A reconciliation of the statutory income tax rate to the effective tax rate is as follows: September 30, 2018 2017 2016 Income taxes computed at the federal statutory rate 24.5 % 35.0 % 35.0 % State taxes, net of federal benefit 2.6 % 2.5 % 3.1 % Tax Cuts and Jobs Act transitional impact (1) 7.2 % — % — % Permanent items (2) (2.2 )% — % — % Net income attributable to noncontrolling interest (10.8 )% (16.9 )% (21.4 )% Total 21.3 % 20.6 % 16.7 % (1) Transitional impact is the $19,952 adjustment to our deferred tax asset due to the reduction in our corporate income tax rate under the Tax Act. (2) Permanent items include the $24,710 reduction in our liability related to the tax receivable agreement with ABP Trust discussed in Note 6, Related Person Transactions . The components of the deferred tax assets as of September 30, 2018 and 2017 are as follows: September 30, 2018 2017 Deferred tax assets: Other deferred asset $ 378 $ 206 Outside basis difference in partnership interest 25,726 45,541 Total deferred tax assets 26,104 45,747 Valuation allowance (378 ) (206 ) Total deferred tax assets $ 25,726 $ 45,541 ASC 740, Income Taxes , provides a model for how a company should recognize, measure and present in its financial statements uncertain tax positions that have been taken or are expected to be taken with respect to all open years and in all significant jurisdictions. Pursuant to this topic, we recognize a tax benefit only if it is “more likely than not” that a particular tax position will be sustained upon examination or audit. To the extent the “more likely than not” standard has been satisfied, the benefit associated with a tax position is measured as the largest amount that is greater than 50.0% likely to be realized upon settlement. As of September 30, 2018 , 2017 and 2016 , we had no uncertain tax positions. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments Fair Value of Financial Instruments | 12 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments As of September 30, 2018 and 2017 , the fair values of our financial instruments, which include cash and cash equivalents, amounts due from our Client Companies and accounts payable and accrued expenses, were not materially different from their carrying values due to the short term nature of these financial instruments. Recurring Fair Value Measures On a recurring basis we measure certain financial assets and financial liabilities at fair value based upon quoted market prices. ASC 820, Fair Value Measurements , establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets and liabilities (Level 1), and the lowest priority to unobservable inputs (Level 3). A financial asset’s or financial liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs. Level 1 Estimates The following are our assets and liabilities that all have been measured at fair value using Level 1 inputs in the fair value hierarchy as of September 30, 2018 and 2017 : September 30, 2018 2017 Money market funds included in cash and cash equivalents $ 253,876 $ 104,700 Current portion of due from related parties related to share based payment awards 4,986 4,910 Long term portion of due from related parties related to share based payment awards 8,183 7,551 Current portion of employer compensation liability related to share based payment awards included in accounts payable and accrued expenses 4,986 4,910 Long term portion of employer compensation liability related to share based payment awards 8,183 7,551 Level 3 Estimates Contingent consideration liabilities are re-measured to fair value each reporting period using updated probabilities of payment. Projected contingent payment amounts are discounted back to the current period using a discounted cash flow model. Increases or decreases in probabilities of payment may result in significant changes in the fair value measurements. In August 2016, we acquired the Tremont business for total cash consideration of $2,466 , plus contingent consideration of up to an additional $1,270 payable over a two year period following the acquisition date. The contingent consideration is measured at fair value using an income approach valuation technique, specifically with probability weighted and discounted cash flows. The fair value of the contingent consideration as of September 30, 2018 and 2017 was $5 and $591 , respectively, and is included in accounts payable and accrued expenses on our consolidated balance sheets. We recognized a gain of $491 as part of remeasuring the contingent consideration for the fiscal year ended September 30, 2018 that are included in interest and other income on our consolidated statements of comprehensive income. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Sep. 30, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Person Transactions Adam D. Portnoy, one of our Managing Directors, is the sole trustee of our controlling shareholder, ABP Trust, and owns a majority of ABP Trust’s voting securities. As of September 30, 2018 , Adam D. Portnoy beneficially owned, in aggregate, directly and indirectly through ABP Trust, (i) 173,365 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. As of September 30, 2018 , ABP Trust owned 14.3% of AIC and 206,300 limited partner units of the Private Fund, and a subsidiary of ABP Trust serves as general partner of the Private Fund. Adam D. Portnoy is a director of AIC and the majority owner and director of Sonesta. Adam D. Portnoy is also a managing trustee or managing director of each of the Managed REITs, Five Star, RIF and TA. Jennifer B. Clark, our other Managing Director, is a managing trustee of SNH, president of AIC and a director of Sonesta. Other officers of ours serve as managing trustees or managing directors of certain of the Managed REITs, RIF and TA. Until his death on February 25, 2018, Barry M. Portnoy, one of our founders, along with Adam D. Portnoy, was an owner and trustee of ABP Trust, an officer and employee of RMR LLC and an owner and director of Sonesta. Barry M. Portnoy also served as a Managing Director of the Company, a managing trustee or managing director of the Managed REITs, Managed Operators and RIF, and as a director of AIC. As of September 30, 2018, GOV, HPT, SIR and SNH owned 1,214,225 , 2,503,777 , 1,586,836 and 2,637,408 Class A Common Shares, respectively, and Adam D. Portnoy beneficially owned, in aggregate, directly and indirectly through ABP Trust, 36.4% of Five Star’s outstanding common shares, 1.9% of GOV’s common shares, 1.5% of HPT’s outstanding common shares, less than 1% of ILPT’s outstanding common shares, 2.0% of SIR’s outstanding common shares, 1.3% of SNH’s outstanding common shares, 2.2% of RIF’s outstanding common shares and less than 1% of TA’s outstanding common shares. The Managed Equity REITs and AIC have no employees. RMR LLC provides or arranges for all the personnel, overhead and services required for the operation of the Managed Equity REITs and AIC pursuant to management agreements with them. All the officers of the Managed Equity REITs and AIC are officers or employees of RMR LLC. TRMT has no employees. All the officers, overhead and required office space of TRMT are provided or arranged by Tremont Advisors, and all of TRMT’s officers also serve as officers of Tremont Advisors and/or of RMR LLC. RIF has no employees and no office separate from RMR Advisors. All the officers, overhead and required office space of RIF are provided or arranged by RMR Advisors and all of RIF’s officers also serve as officers of RMR Advisors and/or of RMR LLC. The general partner of the Private Fund is a subsidiary controlled by ABP Trust, and ABP Trust and RMR LLC are the limited partners of the Private Fund. Some of our executive officers are also directors or trustees of certain of our Client Companies and executive officers of the Managed Operators. Revenues from Related Parties For the fiscal years ended September 30, 2018 , 2017 and 2016 , we recognized revenues from related parties as set forth in the following table: Fiscal Year Ended September 30, 2018 2017 2016 $ % $ % $ % Managed Equity REITs: GOV $ 53,954 13.3 % $ 35,378 13.0 % $ 31,919 12.0 % HPT 118,596 29.3 95,198 35.0 101,715 38.1 ILPT 10,935 2.7 — — — — SIR 62,321 15.4 44,746 16.5 42,540 15.9 SNH (1) 118,301 29.2 60,926 22.4 58,401 21.9 364,107 89.9 236,248 86.9 234,575 87.9 Managed Operators: Five Star 9,840 2.4 9,624 3.5 9,406 3.5 Sonesta 2,847 0.7 2,341 0.9 2,020 0.8 TA 15,357 3.8 14,772 5.4 14,936 5.6 28,044 6.9 26,737 9.8 26,362 9.9 Other Client Companies: ABP Trust 4,865 1.2 3,916 1.5 3,031 1.1 AIC 240 0.1 240 0.1 240 0.1 Private Fund 608 0.2 — — — — RIF 2,888 0.7 2,451 0.9 2,370 0.9 TRMT 2,505 0.6 85 — — — 11,106 2.8 6,692 2.5 5,641 2.1 Total revenues from related parties 403,257 99.6 269,677 99.2 266,578 99.9 Other unrelated parties 1,722 0.4 2,051 0.8 362 0.1 $ 404,979 100.0 % $ 271,728 100.0 % $ 266,940 100.0 % (1) In March 2017, RMR LLC entered into a management agreement with a subsidiary of SNH related to a medical office building located in Boston in connection with a joint venture arrangement for that building. Under that agreement, the SNH subsidiary pays RMR LLC certain business management fees, which fees are credited against the business management fees SNH pays to RMR LLC. We include these fees within the amount of business management fees we report as earned by RMR LLC from SNH. On December 31, 2017 , RMR LLC earned incentive business management fees from HPT, SIR and SNH of $74,572 , $25,569 and $55,740 , respectively, pursuant to our business management agreements with HPT, SIR and SNH. HPT, SIR and SNH paid these incentive fees to us in January 2018 . On December 31, 2016 , RMR LLC earned a $52,407 incentive business management fee from HPT pursuant to our business management agreement with HPT. HPT paid this incentive fee to us in January 2017. On December 31, 2015, RMR LLC earned a $62,263 incentive business management fee from HPT pursuant to our business management agreement with HPT. Pursuant to the RMR LLC Operating Agreement, ABP Trust was entitled to receive a pro rata share of any incentive business management fee earned by RMR LLC for the 2015 calendar year based on the number of days in 2015 to June 5, 2015, the date of RMR LLC’s reorganization. In January 2016, HPT paid RMR LLC this $62,263 incentive fee and RMR LLC paid ABP Trust $26,611 . For additional information regarding our management or advisory agreements with these related parties, please see Note 2, Summary of Significant Accounting Policies . TRMT Initial Public Offering On September 18, 2017, TRMT, then a 100% owned subsidiary of Tremont Advisors, completed the TRMT IPO. Tremont Advisors entered into a management agreement with TRMT, dated September 18, 2017, pursuant to which Tremont Advisors provides certain services to TRMT. Tremont Advisors agreed to pay 100% of the initial organizational costs related to TRMT’s formation and the costs of the TRMT IPO, which costs totaled approximately $6,573 and are included in transaction and acquisition related costs in our consolidated statements of comprehensive income. Concurrently with the closing of the TRMT IPO, Tremont Advisors purchased 600,000 common shares of TRMT at $20.00 per share, the initial public offering price in the TRMT IPO, pursuant to a private placement purchase agreement entered into by Tremont Advisors and TRMT on September 13, 2017. This private placement purchase agreement also provides Tremont Advisors with demand and "piggyback" registration rights, subject to certain limitations, covering the common shares of TRMT owned by Tremont Advisors. As of September 30, 2018, Tremont Advisors owned 600,100 (including 100 common shares issued to Tremont Advisors in connection with TRMTs formation in June 2017), or approximately 18.9% , of TRMT’s common shares. RIF Rights Offering In September 2017, RIF completed a pro rata offering of transferable rights to holders of RIF common shares, which rights entitled the holders thereof to subscribe for up to 2,550,502 RIF common shares, in aggregate, at a subscription price equal to $17.74 per RIF common share. RMR Advisors agreed to pay all expenses of this rights offering of approximately $2,277 . ABP Trust is a shareholder of RIF and purchased 19,642 RIF common shares in this rights offering. In addition, Adam D. Portnoy, a shareholder of RIF, and Barry M. Portnoy, then a shareholder of RIF, purchased 54,524 and 282,297 RIF common shares in this rights offering, respectively. RMR Office Property Fund LP On August 31, 2018, ABP Trust formed the Private Fund. In connection with the formation of the Private Fund, ABP Trust contributed 15 properties to the Private Fund with an aggregate value of $206,300 in exchange for 206,300 limited partnership units in the Private Fund and RMR LLC committed to contribute up to $100,000 to the Private Fund when called by the general partner in exchange for 100,000 limited partnership units in the Private Fund. The valuation of the 15 properties contributed to the Private Fund by ABP Trust was agreed to by a special committee of our Board of Directors consisting of members that were unaffiliated with ABP Trust and with the assistance of an independent third-party appraiser. This same special committee also approved RMR LLC’s $100,000 capital commitment to the Private Fund. ABP Office Property Fund General Partner LLC, a wholly owned subsidiary of ABP Trust, is the general partner of the Private Fund. RMR LLC conducts and performs fund management functions for the Private Fund, including the evaluation of real estate assets to be invested in, planning and other business and administrative functions. Amounts Due From Related Parties The following table represents amounts due from related parties as of the dates listed: As of September 30, 2018 2017 Managed Equity REITs: GOV $ 7,870 $ 6,369 HPT 8,391 7,968 ILPT 2,692 — SIR 5,887 7,351 SNH 9,705 9,550 34,545 31,238 Managed Operators: Five Star 281 305 Sonesta 30 1 TA 599 444 910 750 Other Client Companies: ABP Trust 383 551 AIC 20 22 Private Fund 608 — RIF 31 36 TRMT 532 115 1,574 724 $ 37,029 $ 32,712 Leases As of September 30, 2018 , we leased from ABP Trust and certain Managed Equity REITs office space for use as our headquarters and local offices. During the fiscal years ended September 30, 2018 , 2017 and 2016 , we incurred rental expense under related party leases aggregating $4,839 , $4,184 and $4,213 , respectively. Our related party leases have various termination dates and many have renewal options. Some of our related party leases are terminable on 30 days’ notice and many allow us to terminate early if our management agreements for the buildings in which we lease space are terminated. Tax Receivable Agreement Pursuant to our Tax Receivable Agreement with ABP Trust, RMR Inc. pays to ABP Trust 85.0% of the amount of cash savings, if any, in U.S. federal, state and local income 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. In connection with the Tax Act and the resulting lower corporate income tax rates applicable to RMR Inc., we remeasured the amounts due pursuant to our Tax Receivable Agreement with ABP Trust and reduced our liability by $24,710 , or $1.53 per share, which is presented on our consolidated statements of comprehensive income for the fiscal year ended September 30, 2018 as Tax Receivable Agreement remeasurement. During the fiscal years ended September 30, 2018 , 2017 and 2016 , we paid $2,962 , $2,931 and $905 , respectively, to ABP Trust pursuant to the Tax Receivable Agreement. As of September 30, 2018 , our consolidated balance sheet reflects a liability related to the Tax Receivable Agreement of $34,327 , including $2,279 classified as a current liability that we expect to pay to ABP Trust during the fourth quarter of fiscal year 2019. RMR LLC Quarterly Tax Distributions 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 assumed tax liabilities of its members. For the fiscal years ended September 30, 2018 , 2017 and 2016 , pursuant to the RMR LLC Operating Agreement, RMR LLC made required quarterly tax distributions to holders of its membership units totaling $92,430 , $74,447 and $63,095 , respectively, of which $47,940 , $38,526 and $32,562 , respectively, was distributed to us and $44,490 , $35,921 and $30,533 , 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 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 for payment of certain U.S. federal and state income tax liabilities. We also used and expect to use funds from these distributions to pay our obligations under the Tax Receivable Agreement. Distribution and Ownership of Our Class A Common Shares On December 14, 2015, each of GOV, HPT, SIR and SNH completed the pro rata distribution to holders of record of its common shares on November 27, 2015, of 768,032 , 2,515,344 , 1,580,055 and 2,635,379 Class A Common Shares, respectively. As a shareholder of SIR, GOV received 441,056 Class A Common Shares in this distribution. As a shareholder of each of the Managed Equity REITs, ABP Trust received 90,564 Class A Common Shares in this distribution. In addition to their beneficial ownership of the Class A Common Shares received by ABP Trust in this distribution, Adam D. Portnoy and Barry M. Portnoy also received 9,938 and 19,283 Class A Common Shares, respectively, in this distribution. Tender Offer for Shares of Five Star by Certain Related Persons On November 11, 2016, a subsidiary of ABP Trust, ABP Acquisition LLC, purchased 17,999,999 shares of Five Star common stock at $3.00 per share pursuant to a public tender offer. Following this purchase, Adam D. Portnoy, Barry M. Portnoy, ABP Trust and ABP Acquisition LLC collectively owned 18,339,621 shares of Five Star common stock, or approximately 36.8% of Five Star’s then outstanding common stock; as of September 30, 2018 , Adam D. Portnoy, directly and indirectly through ABP Trust, owned 18,162,999 shares of Five Star common stock, or approximately 36.4% of Five Star’s then outstanding common stock. In connection with ABP Acquisition LLC’s purchase of the Five Star common stock, ABP Trust, ABP Acquisition LLC and our Founders also entered into a consent, standstill, registration rights and lock-up agreement with Five Star pursuant to which ABP Trust, ABP Acquisition LLC, Adam D. Portnoy and Barry M. Portnoy each agreed not to transfer, except for certain permitted transfers as provided therein, any shares of Five Star common stock acquired after October 2, 2016, including shares acquired in the tender offer but not including shares issued to Barry M. Portnoy or Adam D. Portnoy under a Five Star equity compensation plan, for a lock-up period of up to ten years . They also each agreed, for a period of ten years , not to engage, and to cause their controlled affiliates (a term which includes us and our subsidiaries) not to engage, in certain activities involving Five Star without the approval of the Five Star board of directors, including not to make or seek to effect any tender or exchange offer, merger or other business combination, or extraordinary transaction involving Five Star or a sale of all or a substantial portion of Five Star’s consolidated assets or solicit proxies to vote any voting securities of Five Star or encourage others to take any of the restricted activities. This consent, standstill, registration rights and lock-up agreement also provides ABP Trust, ABP Acquisition LLC, Adam D. Portnoy and Barry M. Portnoy with certain demand and "piggyback" registration rights with respect to certain shares of Five Star common stock, at any time after the lock-up period described above, subject to specified terms and conditions. Waiver of Termination Fees in Connection with GOV-SIR Merger On September 14, 2018, GOV and its wholly owned subsidiary, GOV MS REIT, a Maryland REIT, or Merger Sub, and SIR, entered into an agreement and plan of merger, or the Merger Agreement, pursuant to which, on the terms and subject to the satisfaction or waiver of the conditions thereof, SIR has agreed to merge with and into Merger Sub, with Merger Sub continuing as the surviving entity in the merger, or the Merger. It is expected that immediately after the merger of SIR into Merger Sub is effective, Merger Sub will then merge with and into GOV, with GOV as the surviving entity, and will change its name to “Office Properties Income Trust.” The Merger is expected to close by December 31, 2018, and the combined company will continue to be managed by RMR LLC pursuant to RMR LLC’s preexisting management agreements with GOV. In connection with the Merger, SIR and RMR LLC entered into a letter agreement, or the RMR LLC Letter Agreement, pursuant to which, on the terms and subject to conditions contained therein, SIR and RMR LLC have acknowledged and agreed that, effective upon consummation of the Merger, SIR shall have terminated its business and property management agreements with RMR LLC for convenience, and RMR LLC shall have waived its right to receive payment of the termination fee pursuant to each such agreement upon such termination. The RMR LLC Letter Agreement further provides that such termination by SIR and waiver by RMR LLC shall apply only in respect of the Merger and will not apply in respect of any competing proposal or superior proposal (as those terms are defined in the Merger Agreement) or to any other transaction or arrangement. Upon consummation of the Merger and termination of RMR LLC's business management agreement with SIR, RMR LLC would also be eligible to receive a pro rata portion of the then current year's incentive fee, if earned. The measurement period for such pro rata incentive fee is the prior two full calendar years plus the period from the end of the last full calendar year through the closing date of the Merger. Registration and Lock-up Agreements We are parties to the following registration rights agreements, which we entered in connection with RMR LLC's reorganization in June 2015. • ABP Trust Registration Rights Agreement . RMR Inc. is party to a registration rights agreement with ABP Trust pursuant to which RMR Inc. has granted ABP Trust demand and piggyback registration rights, subject to certain limitations, covering the Class A Common Shares ABP Trust owns, including the shares received on conversion of Class B-1 Common Shares or redemption of the paired Class B-2 Common Shares and Class A Units of RMR LLC. • Managed Equity REITs Registration Rights Agreements . RMR Inc. is party to a registration rights agreement with each of GOV, HPT, SIR and SNH covering the Class A Common Shares that each of those Managed Equity REITs own, pursuant to which RMR Inc. granted each of them demand and piggyback registration rights, subject to certain limitations. • Founders Registration Rights and Lock-Up Agreements . Adam D. Portnoy, the estate of Barry M. Portnoy and ABP Trust are parties to a registration rights and lock-up agreement with each of GOV, HPT, SIR and SNH with respect to each such Managed Equity REITs’ common shares pursuant to which ABP Trust, Adam D. Portnoy and the estate of Barry M. Portnoy agreed not to transfer the Managed Equity REITs’ common shares they acquired in connection with RMR LLC’s reorganization in June 2015 for a period of ten years , subject to certain exceptions, and each of those Managed Equity REITs has granted ABP Trust, Adam D. Portnoy and the estate of Barry M. Portnoy demand and piggyback registration rights, subject to certain limitations. Relationships Between Client Companies Several of our Client Companies have historical and ongoing material relationships with other Client Companies. As of September 30, 2018 , HPT owned 8.6% of the outstanding common shares of TA, SNH owned 8.5% of the outstanding common stock of Five Star and GOV owned 27.8% of the outstanding common shares of SIR, which GOV subsequently sold on October 9, 2018, in connection with the Merger; and SIR owned 69.2% of the outstanding common shares of ILPT. Each of ABP Trust, the Managed Equity REITs (other than ILPT), Five Star and TA owns 14.3% of AIC. HPT is TA’s principal landlord and TA is HPT’s largest tenant, operating travel center locations owned by HPT pursuant to long term leases. SNH is Five Star’s principal landlord and Five Star is SNH’s largest tenant and manager of senior living communities, operating senior living communities owned by SNH pursuant to long term agreements. Sonesta manages a number of HPT’s hotels pursuant to long term management agreements. Several of the independent trustees and independent directors of our publicly owned Client Companies also serve as independent trustees or independent directors of other publicly owned Client Companies, and one of our Managing Directors and the independent trustees and independent directors of the Managed REITs, FVE and TA serve on the board of directors of AIC. Other The Managed REITs and Managed Operators award grants of common shares directly to certain of our officers and employees in connection with the provision of services to those companies. For a description of the accounting implications to us of these share awards, please see Note 2, Summary of Significant Accounting Policies . The compensation of senior executives of the Managed Operators, who are also employees or officers of RMR LLC, is the sole responsibility of the party to or on behalf of which the individual renders services. In the past, because at least 80.0% of each of these executives' business time was devoted to services to the Managed Operator, 80.0% of their total cash compensation was paid by the Managed Operator and the remainder was paid by RMR LLC. In June 2017, we became aware that we had been a victim of a criminal fraud that law enforcement authorities refer to as business email compromise fraud. This fraud involved a person pretending to be the representative of the seller in a property acquisition transaction for one of our Managed Equity REITs. The impostor provided fraudulent wire instructions to one of our senior employees. As a result, funds were sent by wire transfer to an account that was believed to be, but in fact was not, the seller’s account, which resulted in our incurring a loss of $590 , as well as additional expenses of $184 in connection with this matter for the fiscal year ended September 30, 2017. We recorded these amounts in general and administrative expense in our consolidated statements of comprehensive income. The affected Managed Equity REIT did not incur any loss in connection with this matter. Effective December 31, 2017, Thomas M. O’Brien resigned from his position as an Executive Vice President and employee of RMR LLC and as president, chief executive officer and a managing director of TA. In connection with Mr. O’Brien’s resignation, RMR LLC and TA entered into a retirement agreement with Mr. O’Brien on November 29, 2017. Under Mr. O’Brien’s retirement agreement, all 5,600 of our unvested Class A Common Shares previously awarded to Mr. O’Brien were fully accelerated on December 31, 2017, and we recorded $332 , the aggregate value of those shares on such date, as equity based compensation expense for the three months ended December 31, 2017. Under the retirement agreement, Mr. O’Brien also granted to TA, in the first instance, and RMR LLC, in the second instance, a right of first refusal in the event he determined to sell any of his shares of TA. On October 10, 2018, RMR LLC purchased 1,492,691 TA common shares from Mr. O’Brien for an aggregate purchase price of approximately $8,382 , pursuant to its exercise of its right of first refusal and the terms of the retirement agreement. Pursuant to the terms of the share award agreements, upon Barry M. Portnoy’s death, all his then unvested shares of RMR Inc. were immediately vested; this resulted in our recognizing $466 of equity based compensation for the fiscal year ended September 30, 2018. In September 2018, we paid the estate of Barry M. Portnoy a $2,600 cash bonus with respect to services he provided in fiscal year 2018. Effective April 30, 2018, David J. Hegarty resigned from his position as an Executive Vice President of RMR LLC and as president and chief operating officer of SNH and retired as an employee of RMR LLC on September 30, 2018. In connection with his retirement, RMR LLC entered into a retirement agreement with Mr. Hegarty on March 29, 2018. Pursuant to Mr. Hegarty’s retirement agreement with RMR LLC, RMR LLC paid him a cash payment in the amount of $1,250 following his resignation as an Executive Vice President of RMR LLC on April 30, 2018 and another cash payment in the amount of $1,250 following his resignation as an employee of RMR LLC on September 30, 2018. We recognized these cash payments, net of amounts previously accrued, over Mr. Hegarty’s remaining service period as Executive Vice President of RMR LLC, with the costs presented as separation costs on our consolidated statements of comprehensive income. In addition, all of our unvested Class A Common Shares previously awarded to Mr. Hegarty fully accelerated on September 30, 2018. For the fiscal year ended September 30, 2018, we recorded $2,500 in separation costs and $371 in equity based compensation expense related to Mr. Hegarty’s retirement agreement. On October 24, 2018, Mark L. Kleifges announced his decision to retire and therefore resign from his position as an Executive Vice President of RMR LLC, as managing trustee, chief financial officer and treasurer of GOV and RIF, as chief financial officer and treasurer of HPT and as president and chief executive officer of RMR Advisors, in each case effective December 31, 2018. In connection with his retirement, RMR LLC entered into a retirement agreement with Mr. Kleifges on October 24, 2018. Subject to the terms of Mr. Kleifges’ retirement agreement with RMR LLC, RMR LLC will pay him a cash payment in the amount of approximately $1,594 following his resignation as an Executive Vice President of RMR LLC on December 31, 2018 and another cash payment in the amount of approximately $1,594 following his resignation as an employee of RMR LLC on June 30, 2019. We will recognize these cash payments over Mr. Kleifges’ remaining service period as Executive Vice President of RMR LLC. In addition, all of our unvested Class A Common Shares previously awarded to Mr. Kleifges will fully accelerate on June 30, 2019, subject to conditions. On October 24, 2018, John C. Popeo announced his decision to retire and therefore resigned from his position as an Executive Vice President of RMR LLC, as managing trustee, president and chief executive officer of ILPT and as chief financial officer and treasurer of SIR, in each case effective December 31, 2018. In connection with his retirement, RMR LLC entered into a retirement agreement with Mr. Popeo on October 24, 2018. Subject to the terms of Mr. Popeo’s retirement agreement with RMR LLC, RMR LLC will pay him a cash payment in the amount of approximately $963 following his resignation as an Executive Vice President of RMR LLC on November 30, 2018 and another cash payment in the amount of approximately $963 following his resignation as an employee of RMR LLC on March 31, 2019. We will recognize these payments over Mr. Popeo’s remaining service period as Executive Vice President of RMR LLC. In addition, all of our unvested Class A Common Shares previously awarded to Mr. Popeo will fully accelerate on March 31, 2019, subject to conditions. We also recognized separation costs of $747 in connection with the resignations of two other non-executive officers of RMR LLC for the fiscal year ended September 30, 2018. |
Shareholders_ Equity
Shareholders’ Equity | 12 Months Ended |
Sep. 30, 2018 | |
Equity [Abstract] | |
Shareholders’ Equity | Shareholders’ Equity Common Shares RMR Inc.’s authorized capital stock consists of 31,600,000 shares of Class A Common Shares, 1,000,000 Class B-1 Common Shares and 15,000,000 Class B-2 Common Shares. Class A Common Shares —Class A Common Shares entitle holders to one vote for each share held of record on all matters submitted to a vote of shareholders. Class B-1 Common Shares —Class B-1 Common Shares entitle holders to ten votes for each share on all matters submitted to a vote of shareholders. Each Class B-1 Common Share may, at the option of its holder, be converted into a Class A Common Share, on a one for one basis. Class B-2 Common Shares —ABP Trust owns 15,000,000 Class B-2 Common Shares, which are paired with the 15,000,000 RMR LLC Class A Units and have no independent economic interest in RMR Inc. The Class A Units may, at the option of the holder, be redeemed for Class A Common Shares on a one to one basis, and upon such redemption our Class B-2 Common Shares that are paired with the Class A Units are automatically canceled. RMR Inc. has the option to settle the redemption in cash. Each Class B-2 Common Share entitles the holder to ten votes per share, and, accordingly, the issuance of additional Class B-2 Common Shares would have a significant dilutive effect on the voting power of the then current holders of our Class A Common Shares. Class A Common Shares, Class B-1 Common Shares and Class B-2 Common Shares vote together as a single class on all matters submitted to a vote of our common shareholders except as required by law and except for amendments to our charter that materially and adversely affect a single class of common shares, in which case, the affected class of shares shall have the right to vote separately on such amendments. Issuances On March 28, 2018 , under our 2016 Omnibus Equity Plan, or the 2016 Plan, we granted 2,500 of our Class A Common Shares valued at $69.10 per share, the closing price of our Class A Common Shares on The Nasdaq Stock Market LLC, or Nasdaq, on that day, to each of our Managing Directors and Independent Directors as part of their annual compensation. In connection with the grant of Class A Common Shares to our Managing Directors and Independent Directors, RMR LLC concurrently issued 12,500 Class A Units to RMR Inc., consistent with the terms of the RMR LLC operating agreement. On September 13, 2018 , under the 2016 Plan, we granted an aggregate of 65,000 of our Class A Common Shares valued at $95.00 per share, the closing price of our Class A Common Shares on Nasdaq on that day, to our Managing Directors, in their capacities as our officers and employees, and to certain of our other officers and employees. In connection with the grant of Class A Common Shares to our Managing Directors and our other officers and employees, RMR LLC concurrently issued 65,000 Class A Units to RMR Inc., consistent with the terms of the RMR LLC operating agreement. On March 29, 2017 , under the 2016 Plan, we granted 2,500 of our Class A Common Shares valued at $48.20 per share, the closing price of our Class A Common Shares on Nasdaq, on that day, to each of our Managing Directors and Independent Directors as part of their annual compensation. In connection with the grant of Class A Common Shares to our Managing Directors and Independent Directors, RMR LLC concurrently issued 12,500 Class A Units to RMR Inc., consistent with the terms of the RMR LLC operating agreement. On September 14, 2017 , under the 2016 Plan, we granted an aggregate of 76,100 of our Class A Common Shares valued at $51.05 per share, the closing price of our Class A Common Shares on Nasdaq on that day, to our Managing Directors, in their capacities as our officers and employees, and to certain of our other officers and employees. In connection with the grant of Class A Common Shares to our Managing Directors and our other officers and employees, RMR LLC concurrently issued 76,100 Class A Units to RMR Inc., consistent with the terms of the RMR LLC operating agreement. The Class A Common Shares granted to our Independent Directors and Managing Directors, in their capacities as Managing Directors, vested immediately. The value of these shares is included in general and administrative expense in our consolidated statements of comprehensive income. The Class A Common Shares granted to our Managing Directors, in their capacities as our officers and employees, and to our officers and employees vest in five equal annual installments beginning on the date of the grant. The value of these shares is included in compensation and benefits in our consolidated statements of comprehensive income. Repurchases On January 2, 2018 , we repurchased 1,728 of our common shares valued at $59.30 per common share, the closing price of our common shares on Nasdaq on January 2, 2018 , from a former employee of RMR LLC in satisfaction of tax withholding and payment obligations in connection with the vesting of awards of our common shares. The aggregate value of the withheld and repurchased shares was $103 , which is reflected as a decrease to shareholders' equity in our consolidated balance sheet. In connection with the acquisition of 1,728 Class A Common Shares, and as required by the RMR LLC operating agreement, RMR LLC concurrently acquired 1,728 Class A Units from RMR Inc. On March 28, 2018 , we withheld and repurchased 375 of our common shares valued at $69.10 per common share, the closing price of our common shares on Nasdaq on March 28, 2018, from one of our directors in satisfaction of tax withholding and payment obligations in connection with the issuance of awards of our common shares. The aggregate value of the withheld and repurchased shares was $25 , which is reflected as a decrease to shareholders' equity in our consolidated balance sheet. In connection with the acquisition of 375 Class A Common Shares, and as required by the RMR LLC operating agreement, RMR LLC concurrently acquired 375 Class A Units from RMR Inc. On September 24, 2018 , we withheld and repurchased 9,266 of the Class A Common Shares awarded to certain of our officers and employees in satisfaction of tax withholding and payment obligations in connection with the vesting of awards of restricted common shares. The aggregate value of the withheld and repurchased shares was $860 , which is reflected as a decrease to shareholders' equity in our consolidated balance sheet. In connection with the acquisition of 9,266 Class A Common Shares, and as required by the RMR LLC operating agreement, RMR LLC concurrently acquired 9,266 Class A Units from RMR Inc. On March 29, 2017 , we withheld and repurchased 375 of the Class A Common Shares awarded to one of our Independent Directors to fund that Independent Director's resulting minimum required tax withholding obligation. The aggregate value of the withheld and repurchased shares was $18 , which is reflected as a decrease to shareholders' equity in our consolidated balance sheet. In connection with the acquisition of 375 Class A Common Shares, and as required by the RMR LLC operating agreement, RMR LLC concurrently acquired 375 Class A Units from RMR Inc. On June 30, 2017 , we withheld and repurchased 47 of the Class A Common Shares awarded to one of our former employees in satisfaction of tax withholding and payment obligations in connection with the vesting of awards of restricted common shares. The aggregate value of the withheld and repurchased shares was $2 , which is reflected as a decrease to shareholders' equity in our consolidated balance sheet. In connection with the acquisition of 47 Class A Common Shares, and as required by the RMR LLC operating agreement, RMR LLC concurrently acquired 47 Class A Units from RMR Inc. On September 19, 2017 , we withheld and repurchased 6,544 of the Class A Common Shares awarded to certain of our officers and employees in satisfaction of tax withholding and payment obligations in connection with the vesting of awards of restricted common shares. The aggregate value of the withheld and repurchased shares was $338 , which is reflected as a decrease to shareholders' equity in our consolidated balance sheet. In connection with the acquisition of 6,544 Class A Common Shares, and as required by the RMR LLC operating agreement, RMR LLC concurrently acquired 6,544 Class A Units from RMR Inc. A summary of shares granted and vested (including shares withheld and repurchased or forfeited) under the terms of the 2016 Plan for the fiscal years ended September 30, 2018 and 2017 , is as follows: 2018 2017 Weighted Weighted Number Average Number Average of Grant Date of Grant Date Shares Fair Value Shares Fair Value Unvested shares, beginning of year 104,020 $ 45.57 57,760 $ 37.84 Shares granted 77,500 $ 90.83 88,600 $ 50.65 Vested shares withheld and repurchased (11,369 ) $ 86.92 (6,966 ) $ 51.35 Shares vested (59,671 ) $ 64.90 (35,374 ) $ 44.69 Shares forfeited (240 ) $ 84.90 — $ — Unvested shares, end of year 110,240 $ 69.11 104,020 $ 45.57 The 110,240 unvested shares as of September 30, 2018 are scheduled to vest as follows: 36,140 shares in 2019 , 36,140 shares in 2020 , 24,960 shares in 2021 and 13,000 in 2022 . As of September 30, 2018 , the estimated future compensation expense for the unvested shares was $7,618 based on the grant date fair value of these shares. The weighted average period over which this compensation expense will be recorded is approximately 28 months. During the fiscal years ended September 30, 2018 and 2017 , we recorded general and administrative expenses of $864 and $603 , respectively, and compensation and benefits expenses of $3,484 and $1,367 , respectively, related to awards we made under the 2016 Plan. At September 30, 2018 , 370,043 of our common shares remained available for issuance under the 2016 Plan. Fiscal 2019 Distributions On November 15, 2018 , we paid a quarterly dividend on our Class A Common Shares and Class B-1 Common Shares in the amount of $0.35 per Class A Common Share and Class B-1 Common Share, or $5,680 . This dividend was paid to our shareholders of record as of the close of business on October 29, 2018 . This dividend was funded by a distribution from RMR LLC to holders of its membership units in the amount of $0.30 per unit, or $9,369 , of which $4,869 was distributed to us based on our then aggregate ownership of 16,229,957 membership units of RMR LLC and $4,500 was distributed to ABP Trust based on its ownership of 15,000,000 membership units of RMR LLC. The remainder of the dividend was funded by utilizing cash accumulated at RMR Inc. Fiscal 2018 Distributions On November 16, 2017 , we paid a quarterly dividend on our Class A Common Shares and Class B-1 Common Shares, in the amount of $0.25 per Class A Common Share and Class B-1 Common Share, or $4,041 . This dividend was paid to our shareholders of record as of the close of business on October 23, 2017 . This dividend was funded by a distribution from RMR LLC to holders of its membership units in the amount of $0.25 per unit, or $7,791 , of which $4,041 was distributed to us based on our then aggregate ownership of 16,164,066 membership units of RMR LLC and $3,750 was distributed to ABP Trust based on its ownership of 15,000,000 membership units of RMR LLC. On February 22, 2018 , we paid a quarterly dividend on our Class A Common Shares and Class B-1 Common Shares, in the amount of $0.25 per Class A Common Share and Class B-1 Common Share, or $4,040 . This dividend was paid to our shareholders of record as of the close of business on January 29, 2018 . This dividend was funded by a distribution from RMR LLC to holders of its membership units in the amount of $0.25 per unit, or $7,790 , of which $4,040 was distributed to us based on our then aggregate ownership of 16,162,338 membership units of RMR LLC and $3,750 was distributed to ABP Trust based on its ownership of 15,000,000 membership units of RMR LLC. On May 17, 2018 , we paid a quarterly dividend on our Class A Common Shares and Class B-1 Common Shares, in the amount of $0.25 per Class A Common Share and Class B-1 Common Share, or $4,044 . This dividend was paid to our shareholders of record as of the close of business on April 30, 2018 . This dividend was funded by a distribution from RMR LLC to holders of its membership units in the amount of $0.25 per unit, or $7,794 , of which $4,044 was distributed to us based on our then aggregate ownership of 16,174,463 membership units of RMR LLC and $3,750 was distributed to ABP Trust based on its ownership of 15,000,000 membership units of RMR LLC. On August 16, 2018 , we paid a quarterly dividend on our Class A Common Shares and Class B-1 Common Shares in the amount of $0.25 per Class A Common Share and Class B-1 Common Share, or $4,044 . This dividend was paid to our shareholders of record as of the close of business on July 30, 2018 . This dividend was funded by a distribution from RMR LLC to holders of its membership units in the amount of $0.25 per unit, or $7,794 , of which $4,044 was distributed to us based on our then aggregate ownership of 16,174,463 membership units of RMR LLC and $3,750 was distributed to ABP Trust based on its ownership of 15,000,000 membership units of RMR LLC. Fiscal 2017 Distributions On November 17, 2016 , we paid a dividend on our Class A Common Shares and Class B-1 Common Shares, in the amount of $0.25 per Class A Common Share and Class B-1 Common Share, or $4,021 . This dividend was paid to our shareholders of record as of the close of business on October 21, 2016 . This dividend was funded by a distribution from RMR LLC to holders of its membership units in the amount of 0.25 per unit, or $7,771 , of which $4,021 was distributed to us based on our then aggregate ownership of 16,082,432 membership units of RMR LLC and $3,750 was distributed to ABP Trust based on its ownership of 15,000,000 membership units of RMR LLC. On February 21, 2017 , we paid a dividend on our Class A Common Shares and Class B-1 Common Shares, in the amount of $0.25 per Class A Common Share and Class B-1 Common Share, or $4,020 . This dividend was paid to our shareholders of record as of the close of business on January 23, 2017 . This dividend was funded by a distribution from RMR LLC to holders of its membership units in the amount of $0.25 per unit, or $7,770 , of which $4,020 was distributed to us based on our then aggregate ownership of 16,082,432 membership units of RMR LLC and $3,750 was distributed to ABP Trust based on its ownership of 15,000,000 membership units of RMR LLC. On May 18, 2017 , we paid a dividend on our Class A Common Shares and Class B-1 Common Shares, in the amount of $0.25 per Class A Common Share and Class B-1 Common Share, or $4,024 . This dividend was paid to our shareholders of record as of the close of business on April 21, 2017 . This dividend was funded by a distribution from RMR LLC to holders of its membership units in the amount of $0.25 per unit, or $7,774 , of which $4,024 was distributed to us based on our then aggregate ownership of 16,094,557 membership units of RMR LLC and $3,750 was distributed to ABP Trust based on its ownership of 15,000,000 membership units of RMR LLC. On August 17, 2017 , we paid a quarterly dividend on our Class A Common Shares and Class B-1 Common Shares in the amount of $0.25 per Class A Common Share and Class B-1 Common Share, or $4,024 . This dividend was paid to our shareholders of record as of the close of business on July 24, 2017 . This dividend was funded by a distribution from RMR LLC to holders of its membership units in the amount of $0.25 per unit, or $7,774 , of which $4,024 was distributed to us based on our then aggregate ownership of 16,094,510 membership units of RMR LLC and $3,750 was distributed to ABP Trust based on its ownership of 15,000,000 membership units of RMR LLC. |
Per Common Share Amounts
Per Common Share Amounts | 12 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Per Common Share Amounts Earnings per common share reflects net income attributable to RMR Inc. divided by our weighted average common shares outstanding. Basic and diluted weighted average common shares outstanding represents our outstanding Class A Common Shares and our Class B-1 Common Shares 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 our net income attributable to RMR Inc. per share. Unvested Class A Common Shares granted to our employees are deemed participating securities for purposes of calculating earnings per common share, as they have dividend rights. We calculate earnings per share using the two-class method. Under the two-class method, we allocate earnings proportionately to vested Class A Common Shares and Class B-1 Common Shares outstanding and unvested Class A Common Shares outstanding for the period. Earnings attributable to unvested Class A Common Shares are excluded from earnings per share under the two-class method as reflected in our consolidated statements of comprehensive income. The calculation of basic and diluted earnings per share is as follows: Fiscal Year Ended September 30, 2018 2017 2016 Basic EPS Numerator: Net income attributable to RMR Inc. $ 96,041 $ 42,293 $ 37,240 Income attributable to unvested participating securities (564 ) (158 ) (6 ) Net income attributable to RMR Inc. used in calculating basic EPS $ 95,477 $ 42,135 $ 37,234 Denominator: Weighted average common shares outstanding - basic 16,077 16,032 16,005 Net income attributable to RMR Inc. per common share - basic $ 5.94 $ 2.63 $ 2.33 Diluted EPS Numerator: Net income attributable to RMR Inc. $ 96,041 $ 42,293 $ 37,240 Income attributable to unvested participating securities (564 ) (158 ) (6 ) Net income attributable to RMR Inc. used in calculating diluted EPS $ 95,477 $ 42,135 $ 37,234 Denominator: Weighted average common shares outstanding - basic 16,077 16,032 16,005 Dilutive effect of incremental unvested shares 43 16 — Weighted average common shares outstanding - diluted 16,120 16,048 16,005 Net income attributable to RMR Inc. per common share - diluted $ 5.92 $ 2.63 $ 2.33 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, our Class B-2 Common Shares “paired” with such unit is cancelled for no additional consideration. If all outstanding Class A Units that we do not own had been redeemed for our Class A Common Shares in the periods presented, our Class A Common Shares outstanding as of September 30, 2018 would have been 30,229,957 . 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 (including any tax impact). For the periods presented, such redemption is not reflected in diluted earnings per share as the assumed redemption would be anti-dilutive. |
Net Income Attributable to RMR
Net Income Attributable to RMR Inc. | 12 Months Ended |
Sep. 30, 2018 | |
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 fiscal years ended September 30, 2018 , 2017 and 2016 , is calculated as follows: Fiscal Year Ended September 30, 2018 2017 2016 Income before income tax expense and equity in losses of investees $ 276,866 $ 137,126 $ 146,934 Add: RMR Inc. franchise tax expense and interest income 488 635 589 Less: tax receivable agreement remeasurement (24,710 ) — — Less: equity in losses of investees (578 ) (206 ) — Less: fees from services provided prior to June 5, 2015 (1) (127 ) — (26,611 ) Net income before noncontrolling interest 251,939 137,555 120,912 Less: noncontrolling interest (121,258 ) (66,376 ) (58,510 ) Net income attributable to RMR Inc. before income tax expense 130,681 71,179 62,402 Add: tax receivable agreement remeasurement 24,710 — — Less: income tax expense attributable to RMR Inc. (58,862 ) (28,251 ) (24,573 ) Less: RMR Inc. franchise tax expense and interest income (488 ) (635 ) (589 ) Net income attributable to RMR Inc. $ 96,041 $ 42,293 $ 37,240 (1) Under the RMR LLC operating agreement, ABP Trust was entitled to receive a pro rata share of any incentive business management fee earned for the 2015 calendar year, based on the number of days in 2015 to June 5, 2015. Accordingly, $26,611 of the incentive business management fee earned on December 31, 2015 was allocated to ABP Trust in fiscal year 2016 . |
Employee Benefits
Employee Benefits | 12 Months Ended |
Sep. 30, 2018 | |
Retirement Benefits [Abstract] | |
Employee Benefits | Employee Benefits We have established a defined contribution savings plan for eligible employees under the provisions of U.S. Internal Revenue Code Section 401(k) whereby we contribute 100.0% of the first 3.0% and 50.0% of the next 2.0% of an employee’s cash compensation contributed to the plan up to stated maximums. All employees are eligible to participate in the plan and are entitled, upon termination or retirement, to receive their vested portion of the plan assets. Employees’ contributions and our related matching contributions are fully vested when made. Our plan contributions and expenses for the fiscal years ended September 30, 2018 , 2017 and 2016 were $2,213 , $1,789 and $1,557 , respectively. |
Commitments
Commitments | 12 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments | Commitments We lease office space under operating leases. These leases generally contain fixed contractual rent changes and certain of the leases provide for operating expense reimbursements. We recognize rental expense on operating leases that contain fixed contractual rent changes on a straight line basis over the terms of the respective leases. As of September 30, 2018 , we had 32 leases that expire at various dates through 2025. We incurred rental expense for the fiscal years ended September 30, 2018 , 2017 and 2016 of $5,163 , $4,933 and $4,650 , respectively, including non-cash straight line rent expense of $201 , $250 and $328 , respectively. Rental expense is included in general and administrative expenses in our consolidated statements of comprehensive income. The future scheduled minimum lease payments under the terms of these leases as of September 30, 2018 are as follows (per fiscal year ended September 30): 2019 $ 4,953 2020 4,698 2021 4,634 2022 4,699 2023 4,086 Thereafter 6,077 $ 29,147 Some of the foregoing leases are with related parties. As of September 30, 2018 , $22,458 of our future scheduled minimum lease payments are for our principal executive offices, which are leased from an affiliate of ABP Trust pursuant to a ten year lease agreement ending in 2025. For more information about these related party leases, see Note 6, Related Person Transactions. In connection with the formation of the Private Fund, RMR LLC committed to contribute up to $100,000 to the Private Fund when called by the general partner. RMR LLC’s $100,000 capital commitment is expected to be called and invested by the Private Fund over the next 12 months. |
Segment Reporting
Segment Reporting | 12 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Segment Reporting | Segment Reporting We have one separately reportable business segment, which is RMR LLC. In the tables below, All Other Operations includes the operations of RMR Inc., RMR Advisors and Tremont Advisors. Fiscal Year Ended September 30, 2018 All Other RMR LLC (1) Operations Total Revenues: Management services 191,594 — 191,594 Incentive business management fees 155,881 — 155,881 Reimbursable payroll related and other costs 50,664 2,488 53,152 Advisory services — 4,352 4,352 Total revenues 398,139 6,840 404,979 Expenses: Compensation and benefits 102,736 6,027 108,763 Equity based compensation 10,793 113 10,906 Separation costs 2,463 784 3,247 Total compensation and benefits expense 115,992 6,924 122,916 General and administrative 23,397 3,752 27,149 Transaction and acquisition related costs 1,555 142 1,697 Depreciation and amortization 1,161 87 1,248 Total expenses 142,105 10,905 153,010 Operating income (loss) 256,034 (4,065 ) 251,969 Interest and other income 4,170 376 4,546 Tax receivable agreement remeasurement — 24,710 24,710 Impairment loss on TRMT — (4,359 ) (4,359 ) Income before income tax expense and equity in losses of investees 260,204 16,662 276,866 Income tax expense — (58,862 ) (58,862 ) Equity in earnings (losses) of investees 33 (611 ) (578 ) Net income (loss) $ 260,237 $ (42,811 ) $ 217,426 Total Assets: $ 443,211 $ 61,217 $ 504,428 (1) Intersegment revenues of $4,002 recognized by RMR LLC for services provided to the All Other Operations segment have been eliminated in the consolidated financial statements. Fiscal Year Ended September 30, 2017 All Other RMR LLC (1) Operations Total Revenues: Management services $ 174,887 $ — $ 174,887 Incentive business management fees 52,407 — 52,407 Reimbursable payroll related and other costs 40,279 53 40,332 Advisory services — 4,102 4,102 Total revenues 267,573 4,155 271,728 Expenses: Compensation and benefits 89,688 2,937 92,625 Equity based compensation 7,128 — 7,128 Total compensation and benefits expense 96,816 2,937 99,753 General and administrative 23,538 1,651 25,189 Transaction and acquisition related costs 337 8,850 9,187 Depreciation and amortization 1,415 623 2,038 Total expenses 122,106 14,061 136,167 Operating income (loss) 145,467 (9,906 ) 135,561 Interest and other income 1,130 435 1,565 Income before income tax expense and equity in losses of investees 146,597 (9,471 ) 137,126 Income tax expense — (28,251 ) (28,251 ) Equity in earnings (losses) of investees — (206 ) (206 ) Net income (loss) $ 146,597 $ (37,928 ) $ 108,669 Total Assets: $ 308,018 $ 75,701 $ 383,719 (1) Intersegment revenues of $738 recognized by RMR LLC for services provided to the All Other Operations segment have been eliminated in the consolidated financial statements. Fiscal Year Ended September 30, 2016 All Other RMR LLC (1) Operations Total Revenues: Management services 164,339 58 164,397 Incentive business management fees 62,263 — 62,263 Reimbursable payroll related and other costs 37,660 — 37,660 Advisory services — 2,620 2,620 Total revenues 264,262 2,678 266,940 Expenses: Compensation and benefits 82,306 1,113 83,419 Equity based compensation 8,566 — 8,566 Separation costs 1,358 — 1,358 Total compensation and benefits expense 92,230 1,113 93,343 General and administrative 21,712 1,451 23,163 Transaction and acquisition related costs 1,966 — 1,966 Depreciation and amortization 1,703 65 1,768 Total expenses 117,611 2,629 120,240 Operating income 146,651 49 146,700 Interest and other income 223 11 234 Income before income tax expense and equity in losses of investees 146,874 60 146,934 Income tax expense (1 ) (24,572 ) (24,573 ) Net income (loss) $ 146,873 $ (24,512 ) $ 122,361 Total Assets: $ 277,802 $ 59,729 $ 337,531 (1) Intersegment revenues of $1,806 recognized by RMR LLC for services provided to the All Other Operations segment have been eliminated in the consolidated financial statements. |
Selected Quarterly Financial Da
Selected Quarterly Financial Data (Unaudited) | 12 Months Ended |
Sep. 30, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Selected Quarterly Financial Data (Unaudited) | Selected Quarterly Financial Data (Unaudited) The following is a summary of our unaudited quarterly results of operations for the fiscal years ended September 30, 2018 and 2017 : 2018 First Second Third Fourth Quarter Quarter Quarter Quarter Total revenues $ 218,541 (1) $ 59,281 $ 62,084 $ 65,073 Net income $ 159,324 $ 19,642 $ 19,449 $ 19,011 Net income attributable to RMR Inc. $ 71,120 $ 8,356 $ 8,381 $ 8,184 Net income attributable to RMR Inc. per common share $ 4.39 $ 0.52 $ 0.52 $ 0.50 Common distributions declared $ 0.25 $ 0.25 $ 0.25 $ 0.25 (1) Includes incentive business management fee revenue of $155,881 . 2017 First Second Third Fourth Quarter Quarter Quarter Quarter Total revenues $ 105,294 (1) $ 54,296 $ 55,502 $ 56,636 Net income $ 60,200 $ 17,748 $ 17,605 $ 13,116 Net income attributable to RMR Inc. $ 23,510 $ 6,883 $ 6,857 $ 5,043 Net income attributable to RMR Inc. per common share $ 1.46 $ 0.43 $ 0.43 $ 0.31 Common distributions declared $ 0.25 $ 0.25 $ 0.25 $ 0.25 (1) Includes incentive business management fee revenue of $52,407 . |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation. All intercompany transactions and balances with or among the consolidated entities have been eliminated. |
Equity Method Investments | Equity Method Investments. Concurrently with the TRMT IPO, Tremont Advisors purchased 600,000 common shares of TRMT at $20.00 per share, pursuant to a private placement purchase agreement entered into by Tremont Advisors and TRMT on September 13, 2017. We account for our investment in TRMT using the equity method of accounting because we are deemed to exert significant influence over, but do not control, TRMT's most significant activities. Our share of net losses from our investment in TRMT for the fiscal years ended September 30, 2018 and 2017 was $545 and $46 , respectively, and is included in equity in losses of investees in our consolidated statements of comprehensive income. In 2016, we acquired a 0.5% general partnership interest in a private fund created for an institutional investor that is managed by Tremont Advisors. This private fund is winding down and our carrying value is zero at September 30, 2018 . We account for this investment under the equity method of accounting and record our share of the investment's earnings or losses each period. Our share of net losses from the private fund for the fiscal year ended September 30, 2018 was $33 and is included in equity in losses of investees in our consolidated statements of comprehensive income. In addition, the private fund made distributions to its partners for which our share for the fiscal years ended September 30, 2018 and 2017 was $174 and $70 , respectively. In performing our periodic evaluation during the fourth quarter of fiscal year 2018 of potential impairment of our investment in TRMT, we determined, based on the length of time and the extent to which the market value of our TRMT investment was below our carrying value, that the decline in fair value was other than temporary. Accordingly, we recorded an impairment of $4,359 on our investment in TRMT as of September 30, 2018 to reduce the carrying value to its fair value. We determined fair value using the closing price of TRMT common shares as of September 30, 2018 , which is a Level 1 fair value measurement. |
Variable Interest Entities | Variable Interest Entities. We regularly evaluate our relationships and investments to determine if they constitute variable interests. A variable interest is an investment or interest that will absorb portions of an entity’s expected losses or receive portions of an entity’s expected returns. If we determine we have a variable interest in an entity, we evaluate whether such interest is in a variable interest entity, or VIE. Under the VIE model, we would be required to consolidate a VIE we manage if we are determined to be the primary beneficiary of the entity. We qualitatively assessed whether we must consolidate any of the entities we manage. Consideration of factors included, but was not limited to, our representation on the entity’s governing body, the size of our investment in each entity compared to the size of the entity and the size of other investors’ interests, the ability and rights to participate in significant policy making decisions and to replace the manager of those entities. Based on this assessment, we concluded that we are not required to consolidate any of our Client Companies. The relationships and investments related to entities in which we have a variable interest are summarized in Note 6, Related Person Transactions . |
Cash and Cash Equivalents | Cash and Cash Equivalents. We consider highly liquid investments with original maturities of three months or less on the date of purchase to be cash equivalents. |
Property and Equipment | Property and Equipment. Property and equipment are stated at cost. Depreciation of furniture and equipment is computed using the straight line method over estimated useful lives ranging from three to ten years. Depreciation for leasehold improvements is computed using the straight line method over the term of the lesser of their useful lives or related lease agreements. |
Capitalized Software Costs | Capitalized Software Costs. We capitalize costs associated with the development and implementation of software created or obtained for internal use in accordance with Accounting Standards Codification, or ASC 340-50, Internal Use Software . Capitalized costs are depreciated using the straight line method over useful lives ranging between three and five years. |
Goodwill | Goodwill. Goodwill represents the costs of business acquisitions in excess of the fair value of identifiable net assets acquired. We evaluate the recoverability of goodwill annually in the fourth quarter of each fiscal year, or more frequently, if events or changes in circumstances indicate that goodwill might be impaired. If our review indicates that the carrying amount of goodwill exceeds its fair value, we would reduce the carrying amount of goodwill to fair value. |
Equity-Based Compensation | Equity-Based Compensation. The awards made under our share award plan to our directors and employees to date have been Class A Common Shares. Shares issued to directors vest immediately. Shares issued to employees vest in five equal, consecutive, annual installments, with the first installment vesting on the date of grant. We recognize forfeitures as they occur. Compensation expense related to share grants is determined based on the market value of our shares on the date of grant, with the aggregate value of the granted shares amortized to expense over the related vesting period. Shares granted to directors are included in general and administrative expenses and shares granted to employees are included in compensation and benefits in our consolidated statements of comprehensive income. |
Revenue Recognition | Revenue Recognition. Revenues from services that we provide are recognized as earned in accordance with contractual agreements. Business Management Fees—Managed Equity REITs We earn annual base business management fees from the Managed Equity REITs pursuant to business management agreements equal to the lesser of: • the sum of (a) 0.5% of the historical cost of transferred real estate assets, if any, as defined in the applicable business management agreement, plus (b) 0.7% of the average invested capital (exclusive of the transferred real estate assets), as defined in the applicable business management agreement, up to $250,000 , plus (c) 0.5% of the average invested capital exceeding $250,000 ; and • the sum of (a) 0.7% of the average market capitalization, as defined in the applicable business management agreement, up to $250,000 , plus (b) 0.5% of the average market capitalization exceeding $250,000 . The foregoing base business management fees are paid monthly in arrears, based on the lower of the Managed Equity REIT’s monthly average historical costs of assets under management and average market capitalization during the month. For purposes of these fees, a Managed Equity REIT's assets under management do not include shares it owns of another Client Company. Our management agreements with the Managed Equity REITs have terms that end on December 31, 2038, and automatically extend on December 31st of each year so that the terms of the agreements thereafter end on the 20th anniversary of the date of the extension. Each of the Managed Equity REITs has the right to terminate each management agreement: (i) at any time on 60 days’ written notice for convenience, (ii) immediately upon written notice for cause, as defined therein, (iii) on 60 days’ written notice given within 60 days after the end of an applicable calendar year for a performance reason, as defined therein, and (iv) by written notice during the 12 months following a change of control of RMR LLC, as defined therein. We have the right to terminate the management agreements for good reason, as defined therein. Under our management agreements with the Managed Equity REITs, if a Managed Equity REIT terminates our management agreements for convenience, or if we terminate one or both of our management agreements with a Managed Equity REIT for good reason, the Managed Equity REIT is obligated to pay us a termination fee in an amount equal to the sum of the present values of the Managed Equity REIT’s monthly future fees, as defined therein, for the terminated management agreement(s) for the remaining term, assuming it had not been terminated. If a Managed Equity REIT terminates one or both of our management agreements for a performance reason, as defined therein, the Managed Equity REIT has agreed to pay to us the termination fee calculated as described above, but assuming a remaining term of 10 years . No termination fee is payable by a Managed Equity REIT if it terminates one or both of our management agreements for cause or as a result of a change of control of us, as defined in the applicable management agreement. We earned aggregate base business management fees for the fiscal years ended September 30, 2018 , 2017 and 2016 , of $120,448 , $113,377 and $104,824 , respectively, from the Managed Equity REITs. Incentive Business Management Fees—Managed Equity REITs We also may earn annual incentive business management fees from the Managed Equity REITs under the business management agreements. The incentive business management fees are contingent performance based fees which are only recognized when earned at the end of each respective measurement period. The incentive fees are calculated for each Managed Equity REIT as 12.0% of the product of (a) the equity market capitalization of the Managed Equity REIT, as defined in the applicable business management agreement, 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, subject to caps on the values of the incentive fees. The measurement period for the annual incentive business management fee is the three year period ended on December 31 of the applicable calendar year, except for ILPT, whose annual incentive business management fee will be based on a shorter period subsequent to its initial public offering (January 12, 2018 through the calendar year ended December 31, 2018). The management agreements require that any incentive fee payable by the Managed Equity REITs be paid in cash. We earned aggregate incentive business management fees from the Managed Equity REITs for the fiscal years ended September 30, 2018 , 2017 and 2016 , of $155,881 , $52,407 and $62,263 , respectively. Management Agreements—Managed Operators, ABP Trust, AIC and the Private Fund We earn fees from the Managed Operators and ABP Trust pursuant to business management agreements equal to 0.6% of: (i) in the case of Five Star, Five Star’s revenues from all sources reportable under generally accepted accounting principles, or GAAP, less any revenues reportable by Five Star with respect to properties for which it provides management services, plus the gross revenues at those properties determined in accordance with GAAP, (ii) in the case of Sonesta, Sonesta’s revenues from all sources reportable under GAAP, less any revenues reportable by Sonesta with respect to hotels for which it provides management services, plus the gross revenues at those hotels determined in accordance with GAAP, (iii) in the case of TA, the sum of TA’s gross fuel margin, as defined in the applicable agreement, plus TA’s total nonfuel revenues and (iv) in the case of ABP Trust, revenues from all sources reportable under GAAP. These fees are estimated and payable monthly in advance. We earn fees from AIC pursuant to a management agreement equal to 3.0% of its total premiums paid under active insurance underwritten or arranged by AIC. We earn fees from the Private Fund pursuant to an administration services agreement equal to 1.0% of Net Asset Value, as defined, annually. These fees are payable quarterly in arrears. We earned aggregate annual fees from the Managed Operators, ABP Trust, AIC and the Private Fund for the fiscal years ended September 30, 2018 , 2017 and 2016 , of $27,609 , $26,255 and $25,846 , respectively. Property Management Fees We earned property management fees pursuant to property management agreements with certain Client Companies. We generally earn fees under these agreements for property management services equal to 3.0% of gross collected rents. Also, under the terms of the property management agreements, we receive additional property management fees for construction supervision in connection with certain construction activities undertaken at the managed properties equal to 5.0% of the cost of such construction. We earned aggregate property management fees for the fiscal years ended September 30, 2018 , 2017 and 2016 , of $42,482 , $34,823 and $33,615 , respectively. Reimbursable Payroll Related and Other Costs Pursuant to certain of our management agreements, the companies to which we provide management services pay or reimburse us for expenses incurred on their behalf. We present certain payroll related and other cost reimbursements we receive as revenue. A significant portion of these reimbursable payroll related and other costs arises from services we provide pursuant to our property management agreements that are charged or passed through to and were paid by tenants of our Client Companies. We realized reimbursable payroll related and other costs for the fiscal years ended September 30, 2018 , 2017 and 2016 , of $53,152 , $40,332 and $37,660 , respectively. Our reimbursable payroll related and other costs include grants of common shares from Client Companies directly to certain of our officers and employees in connection with the provision of management services to those companies. The revenue in respect of each grant is based on the fair value as of the grant date for those shares that have vested, with subsequent changes in the fair value of the unvested grants being recognized in our consolidated statements of comprehensive income over the requisite service period. We record an equal offsetting amount as compensation and benefits expense for all of our payroll and related cost revenues. We realized equity based compensation expense and related reimbursements for the fiscal years ended September 30, 2018 , 2017 and 2016 , of $7,422 , $5,761 and $7,997 , respectively. We report all other expenses we incur on behalf of our Client Companies on a net basis, as the management agreements provide that reimbursable expenses are to be billed directly to the client. This net basis accounting method is supported by some or all of the following factors, which we have determined define us as an agent rather than a principal with respect to these matters: • reimbursement to us is generally completed prior to payment of the related expenses; • the property owner is contractually obligated to fund such operating costs of the property from existing cash flow or direct funding from its building operating account and we bear little or no credit risk; • our clients are the primary obligor in relationships with the affected suppliers and service providers; and • we earn no margin on the reimbursement aspect of the arrangement, obtaining reimbursement only for actual costs incurred. Advisory Services and Other Agreements RMR Advisors is compensated pursuant to its agreement with RIF at an annual rate of 0.85% of RIF’s average daily managed assets, as defined in the agreement. Average daily managed assets includes the net asset value attributable to RIF’s outstanding common shares, plus the liquidation preference of RIF’s outstanding preferred shares, plus the principal amount of any borrowings, including from banks or evidenced by notes, commercial paper or other similar instruments issued by RIF. RMR Advisors earned advisory services revenue for the fiscal years ended September 30, 2018 , 2017 and 2016 , of $2,888 , $2,451 and $2,370 , respectively. Tremont Advisors is primarily compensated pursuant to its management agreement with TRMT at an annual rate of 1.5% of TRMT's equity, as defined in the agreement. Tremont Advisors may also earn an incentive fee under this management agreement beginning in the fourth quarter of calendar year 2018 equal to the difference between: (a) the product of (i) 20% and (ii) the difference between (A) TRMT’s core earnings, as defined in the agreement, for the most recent 12 month period (or such lesser number of completed calendar quarters, if applicable), including the calendar quarter (or part thereof) for which the calculation of the incentive fee is being made, and (B) the product of (1) 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 Advisors 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 TRMT’s core earnings for the 12 most recently completed calendar quarters (or such lesser number of completed calendar quarters from the date of the completion of the TRMT IPO) in the aggregate is greater than zero. The incentive fee may not be less than zero. In June 2018, Tremont Advisors agreed to waive any business management fees otherwise due and payable by TRMT pursuant to the management agreement for the period beginning July 1, 2018 until June 30, 2020. In addition, no incentive fee will be paid or payable by TRMT to Tremont Advisors for the 2018 or 2019 calendar years. Tremont Advisors earned advisory services revenue of $1,464 and $1,651 for the fiscal years ended September 30, 2018 and 2017 , respectively. The Tremont business also acts as transaction originators for non-investment advisory clients for negotiated fees. The Tremont business earned between 0.50% and 1.0% of the aggregate principal amounts of any loans so originated. For the fiscal years ended September 30, 2018 and 2017 , the Tremont business earned fees for such origination services of $1,055 and $432 , respectively, which are included in management services revenue in our consolidated statements of comprehensive income. Other assets. On June 5, 2015 in connection with the formation of RMR Inc., each of GOV, HPT, SIR and SNH contributed cash and shares with a combined value of $167,764 . For accounting purposes, these common shares were valued at NYSE trading closing price of these shares on June 5, 2015, or $121,378 . In addition, for purposes of GAAP, we concluded that the consideration received from such Managed Equity REITs for our Class A Common Shares represented a discount to the fair value of RMR Inc.’s Class A Common Shares. As a result, we recorded $193,806 in other assets under ASC 605-50, Consideration Given to a Customer . The consideration received from such Managed Equity REITs was allocated to the 15,000,000 Class A Common Shares and the 20 year management agreements under the relative selling price method in accordance with ASC 605-25, Multiple Element Arrangements , using our best estimate of selling price for each of the deliverables. The other assets of $193,806 is being amortized against revenue recognized related to the management agreements with such Managed Equity REITs using the straight line method through the period ended December 31, 2035. For the fiscal years ended September 30, 2018 , 2017 and 2016 , we reduced revenue by $9,416 each year, related to the amortization of these other assets. As of September 30, 2018 , the remaining amount of these other assets to be amortized was $162,559 . |
Transaction and acquisition related costs | Transaction and acquisition related costs. Transaction and acquisition related costs include costs related to completed and potential management services contracts, pre-commencement costs, acquisitions and other transactions. Such costs include advisory, underwriting expenses, commissions paid to third-party broker dealers, legal, accounting, valuation, other professional or consulting and regulatory filing fees. Transaction and acquisition related costs are expensed as incurred |
Use of Estimates | Use of Estimates. 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. |
Concentration of Credit Risk | Concentration of Credit Risk. Financial instruments which potentially subject us to concentrations of credit risk are primarily cash accounts and amounts due from related parties. Historically, we have not experienced losses related to our cash accounts or to the credit of our Client Companies whose receivables are listed on our balance sheet as due from related parties. |
Reclassifications | Reclassifications . Reclassifications have been made to the prior years' consolidated financial statements to conform to the current year's presentation. For the fiscal years ended September 30, 2018 , 2017 and 2016 , we reclassified incentive business management fees from management service revenues and equity based compensation expenses from compensation and benefits expense on the consolidated statements of comprehensive income. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, No. 2014-09, Revenue from Contracts with Customers . The main provision of ASU No. 2014-09 is to recognize revenue when control of the goods or services transfers to the customer, as opposed to the existing guidance of recognizing revenue when the risk and rewards transfer to the customer. We will adopt the new revenue recognition guidance in the first quarter of fiscal 2019. While we continue to believe that the adoption of this ASU will not have an impact on our net income, we continue to evaluate the impact of the ASU on our consolidated financial statements. Under existing GAAP, our management agreements are accounted for on a net basis, with the exception of amounts related to reimbursed payroll, because our contracts include provisions that mitigate credit risk with respect to services provided by third parties to our Client Companies. Under this ASU, control of the services before transfer to the client is the primary factor in determining principal versus agent assessments. Based on our evaluation of the ASU, we have determined that we control the services provided by third parties on behalf of certain of our Managed Companies. Accordingly, we will account for the cost of services provided by third parties and the related reimbursement revenue on a gross basis. Under the modified retrospective method, based upon our evaluations, which are not yet complete, we estimate that our consolidated statements of comprehensive income will reflect approximately $300,000 to $350,000 of additional reimbursable revenue and cost of services as a result of this change, with no impact on net income or cash flows. In February 2016, the FASB issued ASU No. 2016-02, Leases , which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e., lessees and lessors). ASU No. 2016-02 requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase of the leased asset by the lessee. This classification will determine whether the lease expense is recognized based on an effective interest method or on a straight line basis over the term of the lease. A lessee is also required to record a right of use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases today. ASU No. 2016-02 is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. We are currently assessing the potential impact of the adoption of ASU No. 2016-02 will have on our consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326) : Measurement of Credit Losses on Financial Instruments , which requires that entities use a new forward looking “expected loss” model that generally will result in the earlier recognition of allowance for credit losses. The measurement of expected credit losses is based upon historical experience, current conditions and reasonable and supportable forecasts that affect the collectability of the reported amount. ASU No. 2016-13 will become effective for fiscal years beginning after December 15, 2019. We are continuing to assess this guidance, but we have not historically experienced credit losses from our Client Companies and do not expect the adoption of ASU No. 2016-13 to have a material impact on our consolidated financial statements. In June 2018, the FASB issued ASU No. 2018-07, Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting , which aligns the measurement and classification guidance for share based payments to nonemployees with the guidance for share based payments to employees, with certain exceptions. ASU No. 2018-07 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. We are currently assessing the potential impact the adoption of ASU No. 2018-07 will have in our consolidated financial statements. |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of income (loss) before income taxes | We had income (loss) before income taxes as follows: September 30, 2018 2017 2016 United States $ 276,340 $ 136,971 $ 146,978 Foreign (52 ) (51 ) (44 ) Total $ 276,288 $ 136,920 $ 146,934 |
Schedule of provision for income taxes | We had a provision for income taxes which consists of the following: September 30, 2018 2017 2016 Current: Federal $ 29,644 $ 22,792 $ 19,332 State 9,403 5,181 4,445 Deferred: Federal 15,043 245 699 State 4,772 33 97 Total $ 58,862 $ 28,251 $ 24,573 |
Schedule of income tax reconciliation | A reconciliation of the statutory income tax rate to the effective tax rate is as follows: September 30, 2018 2017 2016 Income taxes computed at the federal statutory rate 24.5 % 35.0 % 35.0 % State taxes, net of federal benefit 2.6 % 2.5 % 3.1 % Tax Cuts and Jobs Act transitional impact (1) 7.2 % — % — % Permanent items (2) (2.2 )% — % — % Net income attributable to noncontrolling interest (10.8 )% (16.9 )% (21.4 )% Total 21.3 % 20.6 % 16.7 % (1) Transitional impact is the $19,952 adjustment to our deferred tax asset due to the reduction in our corporate income tax rate under the Tax Act. (2) Permanent items include the $24,710 reduction in our liability related to the tax receivable agreement with ABP Trust discussed in Note 6, Related Person Transactions . |
Schedule of deferred tax assets | The components of the deferred tax assets as of September 30, 2018 and 2017 are as follows: September 30, 2018 2017 Deferred tax assets: Other deferred asset $ 378 $ 206 Outside basis difference in partnership interest 25,726 45,541 Total deferred tax assets 26,104 45,747 Valuation allowance (378 ) (206 ) Total deferred tax assets $ 25,726 $ 45,541 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Schedule of assets and liabilities measured at fair value | The following are our assets and liabilities that all have been measured at fair value using Level 1 inputs in the fair value hierarchy as of September 30, 2018 and 2017 : September 30, 2018 2017 Money market funds included in cash and cash equivalents $ 253,876 $ 104,700 Current portion of due from related parties related to share based payment awards 4,986 4,910 Long term portion of due from related parties related to share based payment awards 8,183 7,551 Current portion of employer compensation liability related to share based payment awards included in accounts payable and accrued expenses 4,986 4,910 Long term portion of employer compensation liability related to share based payment awards 8,183 7,551 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Related Party Transactions [Abstract] | |
Schedule of related party transactions | The following table represents amounts due from related parties as of the dates listed: As of September 30, 2018 2017 Managed Equity REITs: GOV $ 7,870 $ 6,369 HPT 8,391 7,968 ILPT 2,692 — SIR 5,887 7,351 SNH 9,705 9,550 34,545 31,238 Managed Operators: Five Star 281 305 Sonesta 30 1 TA 599 444 910 750 Other Client Companies: ABP Trust 383 551 AIC 20 22 Private Fund 608 — RIF 31 36 TRMT 532 115 1,574 724 $ 37,029 $ 32,712 For the fiscal years ended September 30, 2018 , 2017 and 2016 , we recognized revenues from related parties as set forth in the following table: Fiscal Year Ended September 30, 2018 2017 2016 $ % $ % $ % Managed Equity REITs: GOV $ 53,954 13.3 % $ 35,378 13.0 % $ 31,919 12.0 % HPT 118,596 29.3 95,198 35.0 101,715 38.1 ILPT 10,935 2.7 — — — — SIR 62,321 15.4 44,746 16.5 42,540 15.9 SNH (1) 118,301 29.2 60,926 22.4 58,401 21.9 364,107 89.9 236,248 86.9 234,575 87.9 Managed Operators: Five Star 9,840 2.4 9,624 3.5 9,406 3.5 Sonesta 2,847 0.7 2,341 0.9 2,020 0.8 TA 15,357 3.8 14,772 5.4 14,936 5.6 28,044 6.9 26,737 9.8 26,362 9.9 Other Client Companies: ABP Trust 4,865 1.2 3,916 1.5 3,031 1.1 AIC 240 0.1 240 0.1 240 0.1 Private Fund 608 0.2 — — — — RIF 2,888 0.7 2,451 0.9 2,370 0.9 TRMT 2,505 0.6 85 — — — 11,106 2.8 6,692 2.5 5,641 2.1 Total revenues from related parties 403,257 99.6 269,677 99.2 266,578 99.9 Other unrelated parties 1,722 0.4 2,051 0.8 362 0.1 $ 404,979 100.0 % $ 271,728 100.0 % $ 266,940 100.0 % (1) In March 2017, RMR LLC entered into a management agreement with a subsidiary of SNH related to a medical office building located in Boston in connection with a joint venture arrangement for that building. Under that agreement, the SNH subsidiary pays RMR LLC certain business management fees, which fees are credited against the business management fees SNH pays to RMR LLC. We include these fees within the amount of business management fees we report as earned by RMR LLC from SNH. |
Shareholders_ Equity (Tables)
Shareholders’ Equity (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Equity [Abstract] | |
Schedule of unvested restricted stock awards | A summary of shares granted and vested (including shares withheld and repurchased or forfeited) under the terms of the 2016 Plan for the fiscal years ended September 30, 2018 and 2017 , is as follows: 2018 2017 Weighted Weighted Number Average Number Average of Grant Date of Grant Date Shares Fair Value Shares Fair Value Unvested shares, beginning of year 104,020 $ 45.57 57,760 $ 37.84 Shares granted 77,500 $ 90.83 88,600 $ 50.65 Vested shares withheld and repurchased (11,369 ) $ 86.92 (6,966 ) $ 51.35 Shares vested (59,671 ) $ 64.90 (35,374 ) $ 44.69 Shares forfeited (240 ) $ 84.90 — $ — Unvested shares, end of year 110,240 $ 69.11 104,020 $ 45.57 |
Per Common Share Amounts (Table
Per Common Share Amounts (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of EPS, Basic | The calculation of basic and diluted earnings per share is as follows: Fiscal Year Ended September 30, 2018 2017 2016 Basic EPS Numerator: Net income attributable to RMR Inc. $ 96,041 $ 42,293 $ 37,240 Income attributable to unvested participating securities (564 ) (158 ) (6 ) Net income attributable to RMR Inc. used in calculating basic EPS $ 95,477 $ 42,135 $ 37,234 Denominator: Weighted average common shares outstanding - basic 16,077 16,032 16,005 Net income attributable to RMR Inc. per common share - basic $ 5.94 $ 2.63 $ 2.33 Diluted EPS Numerator: Net income attributable to RMR Inc. $ 96,041 $ 42,293 $ 37,240 Income attributable to unvested participating securities (564 ) (158 ) (6 ) Net income attributable to RMR Inc. used in calculating diluted EPS $ 95,477 $ 42,135 $ 37,234 Denominator: Weighted average common shares outstanding - basic 16,077 16,032 16,005 Dilutive effect of incremental unvested shares 43 16 — Weighted average common shares outstanding - diluted 16,120 16,048 16,005 Net income attributable to RMR Inc. per common share - diluted $ 5.92 $ 2.63 $ 2.33 |
Schedule of EPS, Diluted | The calculation of basic and diluted earnings per share is as follows: Fiscal Year Ended September 30, 2018 2017 2016 Basic EPS Numerator: Net income attributable to RMR Inc. $ 96,041 $ 42,293 $ 37,240 Income attributable to unvested participating securities (564 ) (158 ) (6 ) Net income attributable to RMR Inc. used in calculating basic EPS $ 95,477 $ 42,135 $ 37,234 Denominator: Weighted average common shares outstanding - basic 16,077 16,032 16,005 Net income attributable to RMR Inc. per common share - basic $ 5.94 $ 2.63 $ 2.33 Diluted EPS Numerator: Net income attributable to RMR Inc. $ 96,041 $ 42,293 $ 37,240 Income attributable to unvested participating securities (564 ) (158 ) (6 ) Net income attributable to RMR Inc. used in calculating diluted EPS $ 95,477 $ 42,135 $ 37,234 Denominator: Weighted average common shares outstanding - basic 16,077 16,032 16,005 Dilutive effect of incremental unvested shares 43 16 — Weighted average common shares outstanding - diluted 16,120 16,048 16,005 Net income attributable to RMR Inc. per common share - diluted $ 5.92 $ 2.63 $ 2.33 |
Net Income Attributable to RM_2
Net Income Attributable to RMR Inc. (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Net Income Attributable to RMR Inc. | |
Schedule of net income attributable to parent | Net income attributable to RMR Inc. for the fiscal years ended September 30, 2018 , 2017 and 2016 , is calculated as follows: Fiscal Year Ended September 30, 2018 2017 2016 Income before income tax expense and equity in losses of investees $ 276,866 $ 137,126 $ 146,934 Add: RMR Inc. franchise tax expense and interest income 488 635 589 Less: tax receivable agreement remeasurement (24,710 ) — — Less: equity in losses of investees (578 ) (206 ) — Less: fees from services provided prior to June 5, 2015 (1) (127 ) — (26,611 ) Net income before noncontrolling interest 251,939 137,555 120,912 Less: noncontrolling interest (121,258 ) (66,376 ) (58,510 ) Net income attributable to RMR Inc. before income tax expense 130,681 71,179 62,402 Add: tax receivable agreement remeasurement 24,710 — — Less: income tax expense attributable to RMR Inc. (58,862 ) (28,251 ) (24,573 ) Less: RMR Inc. franchise tax expense and interest income (488 ) (635 ) (589 ) Net income attributable to RMR Inc. $ 96,041 $ 42,293 $ 37,240 (1) Under the RMR LLC operating agreement, ABP Trust was entitled to receive a pro rata share of any incentive business management fee earned for the 2015 calendar year, based on the number of days in 2015 to June 5, 2015. Accordingly, $26,611 of the incentive business management fee earned on December 31, 2015 was allocated to ABP Trust in fiscal year 2016 . |
Commitments (Tables)
Commitments (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of minimum lease payments | The future scheduled minimum lease payments under the terms of these leases as of September 30, 2018 are as follows (per fiscal year ended September 30): 2019 $ 4,953 2020 4,698 2021 4,634 2022 4,699 2023 4,086 Thereafter 6,077 $ 29,147 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Schedule of segment reporting information | Fiscal Year Ended September 30, 2018 All Other RMR LLC (1) Operations Total Revenues: Management services 191,594 — 191,594 Incentive business management fees 155,881 — 155,881 Reimbursable payroll related and other costs 50,664 2,488 53,152 Advisory services — 4,352 4,352 Total revenues 398,139 6,840 404,979 Expenses: Compensation and benefits 102,736 6,027 108,763 Equity based compensation 10,793 113 10,906 Separation costs 2,463 784 3,247 Total compensation and benefits expense 115,992 6,924 122,916 General and administrative 23,397 3,752 27,149 Transaction and acquisition related costs 1,555 142 1,697 Depreciation and amortization 1,161 87 1,248 Total expenses 142,105 10,905 153,010 Operating income (loss) 256,034 (4,065 ) 251,969 Interest and other income 4,170 376 4,546 Tax receivable agreement remeasurement — 24,710 24,710 Impairment loss on TRMT — (4,359 ) (4,359 ) Income before income tax expense and equity in losses of investees 260,204 16,662 276,866 Income tax expense — (58,862 ) (58,862 ) Equity in earnings (losses) of investees 33 (611 ) (578 ) Net income (loss) $ 260,237 $ (42,811 ) $ 217,426 Total Assets: $ 443,211 $ 61,217 $ 504,428 (1) Intersegment revenues of $4,002 recognized by RMR LLC for services provided to the All Other Operations segment have been eliminated in the consolidated financial statements. Fiscal Year Ended September 30, 2017 All Other RMR LLC (1) Operations Total Revenues: Management services $ 174,887 $ — $ 174,887 Incentive business management fees 52,407 — 52,407 Reimbursable payroll related and other costs 40,279 53 40,332 Advisory services — 4,102 4,102 Total revenues 267,573 4,155 271,728 Expenses: Compensation and benefits 89,688 2,937 92,625 Equity based compensation 7,128 — 7,128 Total compensation and benefits expense 96,816 2,937 99,753 General and administrative 23,538 1,651 25,189 Transaction and acquisition related costs 337 8,850 9,187 Depreciation and amortization 1,415 623 2,038 Total expenses 122,106 14,061 136,167 Operating income (loss) 145,467 (9,906 ) 135,561 Interest and other income 1,130 435 1,565 Income before income tax expense and equity in losses of investees 146,597 (9,471 ) 137,126 Income tax expense — (28,251 ) (28,251 ) Equity in earnings (losses) of investees — (206 ) (206 ) Net income (loss) $ 146,597 $ (37,928 ) $ 108,669 Total Assets: $ 308,018 $ 75,701 $ 383,719 (1) Intersegment revenues of $738 recognized by RMR LLC for services provided to the All Other Operations segment have been eliminated in the consolidated financial statements. Fiscal Year Ended September 30, 2016 All Other RMR LLC (1) Operations Total Revenues: Management services 164,339 58 164,397 Incentive business management fees 62,263 — 62,263 Reimbursable payroll related and other costs 37,660 — 37,660 Advisory services — 2,620 2,620 Total revenues 264,262 2,678 266,940 Expenses: Compensation and benefits 82,306 1,113 83,419 Equity based compensation 8,566 — 8,566 Separation costs 1,358 — 1,358 Total compensation and benefits expense 92,230 1,113 93,343 General and administrative 21,712 1,451 23,163 Transaction and acquisition related costs 1,966 — 1,966 Depreciation and amortization 1,703 65 1,768 Total expenses 117,611 2,629 120,240 Operating income 146,651 49 146,700 Interest and other income 223 11 234 Income before income tax expense and equity in losses of investees 146,874 60 146,934 Income tax expense (1 ) (24,572 ) (24,573 ) Net income (loss) $ 146,873 $ (24,512 ) $ 122,361 Total Assets: $ 277,802 $ 59,729 $ 337,531 (1) Intersegment revenues of $1,806 recognized by RMR LLC for services provided to the All Other Operations segment have been eliminated in the consolidated financial statements. |
Selected Quarterly Financial _2
Selected Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Sep. 30, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Quarterly Financial Information | The following is a summary of our unaudited quarterly results of operations for the fiscal years ended September 30, 2018 and 2017 : 2018 First Second Third Fourth Quarter Quarter Quarter Quarter Total revenues $ 218,541 (1) $ 59,281 $ 62,084 $ 65,073 Net income $ 159,324 $ 19,642 $ 19,449 $ 19,011 Net income attributable to RMR Inc. $ 71,120 $ 8,356 $ 8,381 $ 8,184 Net income attributable to RMR Inc. per common share $ 4.39 $ 0.52 $ 0.52 $ 0.50 Common distributions declared $ 0.25 $ 0.25 $ 0.25 $ 0.25 (1) Includes incentive business management fee revenue of $155,881 . 2017 First Second Third Fourth Quarter Quarter Quarter Quarter Total revenues $ 105,294 (1) $ 54,296 $ 55,502 $ 56,636 Net income $ 60,200 $ 17,748 $ 17,605 $ 13,116 Net income attributable to RMR Inc. $ 23,510 $ 6,883 $ 6,857 $ 5,043 Net income attributable to RMR Inc. per common share $ 1.46 $ 0.43 $ 0.43 $ 0.31 Common distributions declared $ 0.25 $ 0.25 $ 0.25 $ 0.25 (1) Includes incentive business management fee revenue of $52,407 . |
Organization (Details)
Organization (Details) | 12 Months Ended |
Sep. 30, 2018shares | |
RMR LLC | |
Related Party Transaction [Line Items] | |
Ownership percentage | 52.00% |
Class A common shares | Class A membership units | |
Related Party Transaction [Line Items] | |
Membership units (in units) | 15,229,957,000 |
Class B-1 common shares | Class B membership units | |
Related Party Transaction [Line Items] | |
Membership units (in units) | 1,000,000,000 |
ABP Trust | Class A membership units | |
Related Party Transaction [Line Items] | |
Membership units (in units) | 15,000,000 |
ABP Trust | Redeemable Class A membership units | |
Related Party Transaction [Line Items] | |
Membership units (in units) | 15,000,000,000 |
Ownership percentage | 48.00% |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) | Sep. 13, 2017$ / sharesshares | Sep. 30, 2018USD ($)vesting_installment | Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) |
Property, Plant and Equipment [Line Items] | ||||
Equity in losses of investees | $ 578,000 | $ 206,000 | $ 0 | |
Investment carrying value | 7,051,000 | 12,162,000 | ||
Distribution from equity method investments | 174,000 | 70,000 | 0 | |
Impairment loss on TRMT investment | (4,359,000) | 0 | 0 | |
Depreciation expense related to PP&E | 873,000 | 968,000 | 1,105,000 | |
Depreciation expense related to capitalized software | 288,000 | 447,000 | $ 598,000 | |
TRMT | ||||
Property, Plant and Equipment [Line Items] | ||||
Equity in losses of investees | 545,000 | $ 46,000 | ||
Impairment loss on TRMT investment | (4,359,000) | |||
Private Fund | ||||
Property, Plant and Equipment [Line Items] | ||||
Equity in losses of investees | 33,000 | |||
Ownership percentage acquired | 0.50% | |||
Investment carrying value | $ 0 | |||
Furniture and equipment | Minimum | ||||
Property, Plant and Equipment [Line Items] | ||||
Useful life | 3 years | |||
Furniture and equipment | Maximum | ||||
Property, Plant and Equipment [Line Items] | ||||
Useful life | 10 years | |||
Software development | Minimum | ||||
Property, Plant and Equipment [Line Items] | ||||
Useful life | 3 years | |||
Software development | Maximum | ||||
Property, Plant and Equipment [Line Items] | ||||
Useful life | 5 years | |||
TRMT | Private Placement | ||||
Property, Plant and Equipment [Line Items] | ||||
Number of shares issued (in shares) | shares | 600,000 | |||
Number of shares issued (in dollars per share) | $ / shares | $ 20 | |||
Class A common shares | Employees | ||||
Property, Plant and Equipment [Line Items] | ||||
Number of vesting installments | vesting_installment | 5 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Revenue Recognition (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Jun. 05, 2015 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | Jun. 05, 2015 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Percent of gross collected rents | 3.00% | |||||
Percent of construction supervision | 5.00% | |||||
Property management fees revenue | $ 42,482 | $ 34,823 | $ 33,615 | |||
Equity based compensation expense and related reimbursements | 7,422 | 5,761 | 7,997 | |||
Other assets, net of amortization | $ 162,559 | 171,975 | ||||
Managed Equity REITs | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Percentage of historical cost of transferred real estate assets | 0.50% | |||||
Percentage of average invested capital below threshold limit | 0.70% | |||||
Threshold amount, maximum | $ 250,000 | |||||
Percentage of average invested capital above threshold limit | 0.50% | |||||
Threshold limit, minimum | $ 250,000 | |||||
Percentage of average market capitalization below threshold limit | 0.70% | |||||
Percentage of average market capitalization above threshold limit | 0.50% | |||||
Remaining term after termination (in years) | 10 years | |||||
Aggregate annual base business management fees | $ 120,448 | 113,377 | 104,824 | |||
Incentive management fee percentage | 12.00% | |||||
Measurement period for annual incentive fee, thereafter (in years) | 3 years | |||||
Aggregate incentive business management fees | $ 62,263 | $ 155,881 | 62,263 | |||
Cash and shares received from related party | $ 167,764 | |||||
Value of shares received from related party | 121,378 | |||||
Other assets, net of amortization | $ 193,806 | $ 193,806 | ||||
Term of management agreement | 20 years | |||||
Managed Operators, ABP Trust and AIC | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Management fee percentage pursuant to agreement | 0.60% | |||||
Aggregate annual business management fees | $ 27,609 | 26,255 | 25,846 | |||
ABP Trust | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Percent of total premiums paid | 3.00% | |||||
Private Fund | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Percent of net asset value | 1.00% | |||||
AIC | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Advisory fee percentage based on daily managed assets | 0.85% | |||||
Up C Transaction | Managed Equity REITs | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Amortization of other assets | $ 9,416 | 9,416 | 9,416 | |||
RMR LLC | Up C Transaction | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Duration of written notice for convenience (in days) | 60 days | |||||
Duration of written notice for performance (in days) | 60 days | |||||
Window after calendar year end for written notice (in days) | 60 days | |||||
Duration of written notice after change of control (in months) | 12 months | |||||
Tremont Advisors | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Management fee percentage pursuant to agreement | 1.50% | |||||
Incentive fee percentage condition 1 | 20.00% | |||||
Incentive fee percentage condition 2 | 7.00% | |||||
Minimum | Tremont Advisors | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Advisory fee percentage based on aggregate principal amounts of loan originated | 0.50% | |||||
Maximum | Tremont Advisors | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Advisory fee percentage based on aggregate principal amounts of loan originated | 1.00% | |||||
Reimbursable payroll related and other costs | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Revenues | $ 53,152 | 40,332 | 37,660 | |||
Advisory services | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Revenues | 4,352 | 4,102 | 2,620 | |||
Advisory services | RMR Advisors and Tremont Advisors | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Revenues | 2,888 | 2,451 | 2,370 | |||
Advisory services | Tremont Advisors | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Revenues | 1,464 | 1,651 | ||||
Management services | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Revenues | 191,594 | 174,887 | $ 164,397 | |||
Management services | Tremont Advisors | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Revenues | $ 1,055 | $ 432 | ||||
Class A common shares | ||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||
Common stock shares outstanding (in shares) | 15,000,000 | 15,229,957 | 15,164,066 | 15,000,000 |
Recent Accounting Pronounceme_2
Recent Accounting Pronouncements - Additional Information (Details) - Reimbursable payroll related and other costs - USD ($) | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenues | $ 53,152,000 | $ 40,332,000 | $ 37,660,000 | |
Forecast | ASU 2014-09 | Minimum | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenues | $ 300,000,000 | |||
Forecast | ASU 2014-09 | Maximum | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenues | $ 350,000,000 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Income Tax Disclosure [Abstract] | |||
Federal tax rate | 21.00% | ||
Income taxes computed at the federal statutory rate | 24.50% | 35.00% | 35.00% |
Income tax expense related to deferred tax assets | $ 19,952 | ||
Income tax expense related to deferred tax assets, per share | $ 1.23 |
Income Taxes - Income (Loss) Be
Income Taxes - Income (Loss) Before Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Income Tax Disclosure [Abstract] | |||
United States | $ 276,340 | $ 136,971 | $ 146,978 |
Foreign | (52) | (51) | (44) |
Income before income tax expense and equity in earnings of investee | $ 276,288 | $ 136,920 | $ 146,934 |
Income Taxes - Provision for In
Income Taxes - Provision for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Current: | |||
Federal | $ 29,644 | $ 22,792 | $ 19,332 |
State | 9,403 | 5,181 | 4,445 |
Deferred: | |||
Federal | 15,043 | 245 | 699 |
State | 4,772 | 33 | 97 |
Total | $ 58,862 | $ 28,251 | $ 24,573 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Income Tax Disclosure [Abstract] | |||
Income taxes computed at the federal statutory rate | 24.50% | 35.00% | 35.00% |
State taxes, net of federal benefit | 2.60% | 2.50% | 3.10% |
Tax Cuts and Jobs Act transitional impact | 7.20% | 0.00% | 0.00% |
Permanent items | (2.20%) | 0.00% | 0.00% |
Net income attributable to noncontrolling interest | (10.80%) | (16.90%) | (21.40%) |
Total | 21.30% | 20.60% | 16.70% |
Income tax expense related to deferred tax assets | $ 19,952 | ||
Permanent item related to tax receivable agreement | $ 24,710 |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Sep. 30, 2017 |
Deferred tax assets: | ||
Other deferred asset | $ 378 | $ 206 |
Outside basis difference in partnership interest | 25,726 | 45,541 |
Total deferred tax assets | 26,104 | 45,747 |
Valuation allowance | (378) | (206) |
Total deferred tax assets | $ 25,726 | $ 45,541 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments (Details) - Recurring basis - Level 1 - USD ($) $ in Thousands | Sep. 30, 2018 | Sep. 30, 2017 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money market funds included in cash and cash equivalents | $ 253,876 | $ 104,700 |
Current portion of due from related parties related to share based payment awards | 4,986 | 4,910 |
Long term portion of due from related parties related to share based payment awards | 8,183 | 7,551 |
Current portion of employer compensation liability related to share based payment awards included in accounts payable and accrued expenses | 4,986 | 4,910 |
Long term portion of employer compensation liability related to share based payment awards | $ 8,183 | $ 7,551 |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments - Additional Information (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Aug. 31, 2016 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Business Acquisition [Line Items] | ||||
Cash consideration | $ 0 | $ 0 | $ 2,479 | |
Change in contingent consideration | 491 | 578 | $ 0 | |
Tremont Realty Capital LLC | ||||
Business Acquisition [Line Items] | ||||
Cash consideration | $ 2,466 | |||
Contingent consideration | $ 1,270 | $ 5 | $ 591 | |
Duration of potential earn out | 2 years |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Jan. 31, 2016 | Sep. 30, 2018 | Sep. 30, 2016 | Dec. 14, 2015 |
HPT | |||||||
Related Party Transaction [Line Items] | |||||||
Aggregate incentive business management fees | $ 74,572 | $ 52,407 | |||||
SIR | |||||||
Related Party Transaction [Line Items] | |||||||
Aggregate incentive business management fees | 25,569 | ||||||
SNH | |||||||
Related Party Transaction [Line Items] | |||||||
Aggregate incentive business management fees | $ 55,740 | ||||||
Managed Equity REITs | |||||||
Related Party Transaction [Line Items] | |||||||
Aggregate incentive business management fees | $ 62,263 | $ 155,881 | $ 62,263 | ||||
ABP Trust | |||||||
Related Party Transaction [Line Items] | |||||||
Payments for incentive fees | $ 26,611 | ||||||
ABP Trust | Class A common shares | |||||||
Related Party Transaction [Line Items] | |||||||
Common stock shares outstanding (in shares) | 173,365 | 90,564 | |||||
ABP Trust | Class A units | |||||||
Related Party Transaction [Line Items] | |||||||
Common stock shares outstanding (in shares) | 15,000,000 | ||||||
GOV | Class A common shares | |||||||
Related Party Transaction [Line Items] | |||||||
Common stock shares outstanding (in shares) | 441,056 | ||||||
Investment Owned, Balance, Shares | 1,214,225 | ||||||
HPT | RMR LLC | |||||||
Related Party Transaction [Line Items] | |||||||
Payments for incentive fees | $ 62,263 | ||||||
HPT | Class A common shares | |||||||
Related Party Transaction [Line Items] | |||||||
Investment Owned, Balance, Shares | 2,503,777 | ||||||
SIR | Class A common shares | |||||||
Related Party Transaction [Line Items] | |||||||
Investment Owned, Balance, Shares | 1,586,836 | ||||||
SNH | Class A common shares | |||||||
Related Party Transaction [Line Items] | |||||||
Investment Owned, Balance, Shares | 2,637,408 | ||||||
ABP Trust | ABP Trust | |||||||
Related Party Transaction [Line Items] | |||||||
Ownership percentage by noncontrolling owners | 14.30% | ||||||
Private Fund | ABP Trust | |||||||
Related Party Transaction [Line Items] | |||||||
Investment Owned, Balance, Shares | 206,300 | ||||||
Five Star | |||||||
Related Party Transaction [Line Items] | |||||||
Ownership percentage by noncontrolling owners | 36.40% | ||||||
Five Star | SNH | |||||||
Related Party Transaction [Line Items] | |||||||
Ownership percentage by noncontrolling owners | 8.50% | ||||||
GOV | |||||||
Related Party Transaction [Line Items] | |||||||
Ownership percentage by noncontrolling owners | 1.90% | ||||||
HPT | |||||||
Related Party Transaction [Line Items] | |||||||
Ownership percentage by noncontrolling owners | 1.50% | ||||||
ILPT | |||||||
Related Party Transaction [Line Items] | |||||||
Ownership percentage by noncontrolling owners | 1.00% | ||||||
ILPT | SIR | |||||||
Related Party Transaction [Line Items] | |||||||
Ownership percentage by noncontrolling owners | 69.20% | ||||||
SIR | |||||||
Related Party Transaction [Line Items] | |||||||
Ownership percentage by noncontrolling owners | 2.00% | ||||||
SIR | GOV | |||||||
Related Party Transaction [Line Items] | |||||||
Ownership percentage by noncontrolling owners | 27.80% | ||||||
SNH | |||||||
Related Party Transaction [Line Items] | |||||||
Ownership percentage by noncontrolling owners | 1.30% | ||||||
AIC | |||||||
Related Party Transaction [Line Items] | |||||||
Ownership percentage by noncontrolling owners | 2.20% | ||||||
TA | |||||||
Related Party Transaction [Line Items] | |||||||
Ownership percentage by noncontrolling owners | 1.00% | ||||||
TA | HPT | |||||||
Related Party Transaction [Line Items] | |||||||
Ownership percentage by noncontrolling owners | 8.60% |
Related Party Transactions - Re
Related Party Transactions - Revenue from Related Parties (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Related Party Transaction [Line Items] | |||||||||||
Revenue from related parties | $ 403,257 | $ 269,677 | $ 266,578 | ||||||||
Percentage of revenue from related parties | 99.60% | 99.20% | 99.90% | ||||||||
Revenues from unrelated parties | $ 1,722 | $ 2,051 | $ 362 | ||||||||
Percentage of revenue from unrelated parties | 0.40% | 0.80% | 0.10% | ||||||||
Revenues, net | $ 65,073 | $ 62,084 | $ 59,281 | $ 218,541 | $ 56,636 | $ 55,502 | $ 54,296 | $ 105,294 | $ 404,979 | $ 271,728 | $ 266,940 |
Percentage of revenue, net | 100.00% | 100.00% | 100.00% | ||||||||
Managed Equity REITs | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Revenue from related parties | $ 364,107 | $ 236,248 | $ 234,575 | ||||||||
Percentage of revenue from related parties | 89.90% | 86.90% | 87.90% | ||||||||
GOV | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Revenue from related parties | $ 53,954 | $ 35,378 | $ 31,919 | ||||||||
Percentage of revenue from related parties | 13.30% | 13.00% | 12.00% | ||||||||
HPT | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Revenue from related parties | $ 118,596 | $ 95,198 | $ 101,715 | ||||||||
Percentage of revenue from related parties | 29.30% | 35.00% | 38.10% | ||||||||
ILPT | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Revenue from related parties | $ 10,935 | $ 0 | $ 0 | ||||||||
Percentage of revenue from related parties | 2.70% | 0.00% | 0.00% | ||||||||
SIR | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Revenue from related parties | $ 62,321 | $ 44,746 | $ 42,540 | ||||||||
Percentage of revenue from related parties | 15.40% | 16.50% | 15.90% | ||||||||
SNH | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Revenue from related parties | $ 118,301 | $ 60,926 | $ 58,401 | ||||||||
Percentage of revenue from related parties | 29.20% | 22.40% | 21.90% | ||||||||
Managed Operators | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Revenue from related parties | $ 28,044 | $ 26,737 | $ 26,362 | ||||||||
Percentage of revenue from related parties | 6.90% | 9.80% | 9.90% | ||||||||
Five Star | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Revenue from related parties | $ 9,840 | $ 9,624 | $ 9,406 | ||||||||
Percentage of revenue from related parties | 2.40% | 3.50% | 3.50% | ||||||||
Sonesta | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Revenue from related parties | $ 2,847 | $ 2,341 | $ 2,020 | ||||||||
Percentage of revenue from related parties | 0.70% | 0.90% | 0.80% | ||||||||
TA | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Revenue from related parties | $ 15,357 | $ 14,772 | $ 14,936 | ||||||||
Percentage of revenue from related parties | 3.80% | 5.40% | 5.60% | ||||||||
Other | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Revenue from related parties | $ 11,106 | $ 6,692 | $ 5,641 | ||||||||
Percentage of revenue from related parties | 2.80% | 2.50% | 2.10% | ||||||||
RIF | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Revenue from related parties | $ 4,865 | $ 3,916 | $ 3,031 | ||||||||
Percentage of revenue from related parties | 1.20% | 1.50% | 1.10% | ||||||||
ABP Trust | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Revenue from related parties | $ 240 | $ 240 | $ 240 | ||||||||
Percentage of revenue from related parties | 0.10% | 0.10% | 0.10% | ||||||||
Private Fund | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Revenue from related parties | $ 608 | $ 0 | $ 0 | ||||||||
Percentage of revenue from related parties | 0.20% | 0.00% | 0.00% | ||||||||
AIC | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Revenue from related parties | $ 2,888 | $ 2,451 | $ 2,370 | ||||||||
Percentage of revenue from related parties | 0.70% | 0.90% | 0.90% | ||||||||
TRMT | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Revenue from related parties | $ 2,505 | $ 85 | $ 0 | ||||||||
Percentage of revenue from related parties | 0.60% | 0.00% | 0.00% |
Related Party Transactions - TR
Related Party Transactions - TRMT Initial Public Offering (Details) - USD ($) $ / shares in Units, $ in Thousands | Sep. 18, 2017 | Sep. 13, 2017 | Sep. 30, 2018 |
Tremont Advisors | TRMT | Initial Organizational Costs | |||
Related Party Transaction [Line Items] | |||
Related party transaction percentage | 100.00% | ||
Related party expenses | $ 6,573 | ||
TRMT | Private Placement | |||
Related Party Transaction [Line Items] | |||
Number of shares issued (in shares) | 600,000 | ||
Number of shares issued (in dollars per share) | $ 20 | ||
TRMT | |||
Related Party Transaction [Line Items] | |||
Ownership percentage, equity method | 18.90% | ||
TRMT | Tremont Advisors | |||
Related Party Transaction [Line Items] | |||
Common stock shares issued (in shares) | 100 | ||
TRMT | Tremont Advisors | |||
Related Party Transaction [Line Items] | |||
Ownership percentage | 100.00% | ||
Number of shares owned (in shares) | 600,100 |
Related Party Transactions - RI
Related Party Transactions - RIF Rights Offering (Details) - Pro rata offering of transferable rights - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2018 | |
ABP Trust | ||
Related Party Transaction [Line Items] | ||
Number of shares issued (in shares) | 19,642 | |
Adam Portnoy | ||
Related Party Transaction [Line Items] | ||
Number of shares issued (in shares) | 54,524 | |
Barry Portnoy | ||
Related Party Transaction [Line Items] | ||
Number of shares issued (in shares) | 282,297 | |
AIC | ||
Related Party Transaction [Line Items] | ||
Number of shares issued (in shares) | 2,550,502 | |
Number of shares issued (in dollars per share) | $ 17.74 | |
RMR Advisors | ||
Related Party Transaction [Line Items] | ||
Payment of offering expenses | $ 2,277 |
Related Party Transactions - RM
Related Party Transactions - RMR Office Property Fund LP (Details) | Aug. 31, 2018USD ($)propertyshares | Sep. 30, 2018USD ($) |
Related Party Transaction [Line Items] | ||
Committed capital | $ 100,000,000 | |
ABP Trust | Private Fund | ||
Related Party Transaction [Line Items] | ||
Number of properties contributed | property | 15 | |
Value of property contributed | $ 206,300,000 | |
Number of partnership units (in shares) | shares | 206,300 | |
RMR LLC | Private Fund | ||
Related Party Transaction [Line Items] | ||
Number of partnership units (in shares) | shares | 100,000 | |
Committed capital | $ 100,000,000 |
Related Party Transactions - Am
Related Party Transactions - Amount Due from Related Parties (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Sep. 30, 2017 |
Related Party Transaction [Line Items] | ||
Due from related parties | $ 37,029 | $ 32,712 |
Managed Equity REITs | ||
Related Party Transaction [Line Items] | ||
Due from related parties | 34,545 | 31,238 |
GOV | ||
Related Party Transaction [Line Items] | ||
Due from related parties | 7,870 | 6,369 |
HPT | ||
Related Party Transaction [Line Items] | ||
Due from related parties | 8,391 | 7,968 |
ILPT | ||
Related Party Transaction [Line Items] | ||
Due from related parties | 2,692 | 0 |
SIR | ||
Related Party Transaction [Line Items] | ||
Due from related parties | 5,887 | 7,351 |
SNH | ||
Related Party Transaction [Line Items] | ||
Due from related parties | 9,705 | 9,550 |
Managed Operators | ||
Related Party Transaction [Line Items] | ||
Due from related parties | 910 | 750 |
Five Star | ||
Related Party Transaction [Line Items] | ||
Due from related parties | 281 | 305 |
Sonesta | ||
Related Party Transaction [Line Items] | ||
Due from related parties | 30 | 1 |
TA | ||
Related Party Transaction [Line Items] | ||
Due from related parties | 599 | 444 |
Other | ||
Related Party Transaction [Line Items] | ||
Due from related parties | 1,574 | 724 |
ABP Trust | ||
Related Party Transaction [Line Items] | ||
Due from related parties | 383 | 551 |
ABP Trust | ||
Related Party Transaction [Line Items] | ||
Due from related parties | 20 | 22 |
Private Fund | ||
Related Party Transaction [Line Items] | ||
Due from related parties | 608 | 0 |
AIC | ||
Related Party Transaction [Line Items] | ||
Due from related parties | 31 | 36 |
TRMT | ||
Related Party Transaction [Line Items] | ||
Due from related parties | $ 532 | $ 115 |
Related Party Transactions - Le
Related Party Transactions - Leases (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Related Party Transaction [Line Items] | |||
Rental expense | $ 5,163 | $ 4,933 | $ 4,650 |
ABP Trust and Managed REIT | |||
Related Party Transaction [Line Items] | |||
Rental expense | $ 4,839 | $ 4,184 | $ 4,213 |
Notice to terminate lease | 30 days |
Related Party Transactions - Ta
Related Party Transactions - Tax Receivable Agreement (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Sep. 30, 2019 | Jun. 30, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Related Party Transaction [Line Items] | |||||
Tax receivable agreement remeasurement | $ 24,710 | $ 0 | $ 0 | ||
Payments under tax receivable agreement | $ 2,962 | 2,931 | 905 | ||
ABP Trust | |||||
Related Party Transaction [Line Items] | |||||
Tax receivable agreement remeasurement | $ 24,710 | ||||
Tax receivable agreement remeasurement (in dollars per share) | $ 1.53 | ||||
ABP Trust | Up C Transaction | |||||
Related Party Transaction [Line Items] | |||||
Tax receivable agreement, percent of payment | 85.00% | ||||
Payments under tax receivable agreement | $ 2,962 | 2,931 | 905 | ||
Tax receivable agreement amount payable | 34,327 | ||||
Forecast | ABP Trust | Up C Transaction | |||||
Related Party Transaction [Line Items] | |||||
Payments under tax receivable agreement | $ 2,279 | ||||
RMR LLC | |||||
Related Party Transaction [Line Items] | |||||
Distributions paid | 47,940 | 38,526 | 32,562 | ||
RMR LLC | ABP Trust | |||||
Related Party Transaction [Line Items] | |||||
Distributions paid | 44,490 | 35,921 | 30,533 | ||
RMR LLC | ABP Trust and Managed REIT | |||||
Related Party Transaction [Line Items] | |||||
Distributions paid | $ 92,430 | $ 74,447 | $ 63,095 |
Related Party Transactions - Di
Related Party Transactions - Distribution and Ownership of Class A Shares (Details) - Class A common shares - shares | Dec. 14, 2015 | Sep. 30, 2018 |
GOV | ||
Related Party Transaction [Line Items] | ||
Common stock shares outstanding (in shares) | 441,056 | |
GOV | Up C Transaction | ||
Related Party Transaction [Line Items] | ||
Number of shares distributed (in shares) | 768,032 | |
HPT | Up C Transaction | ||
Related Party Transaction [Line Items] | ||
Number of shares distributed (in shares) | 2,515,344 | |
SIR | Up C Transaction | ||
Related Party Transaction [Line Items] | ||
Number of shares distributed (in shares) | 1,580,055 | |
SNH | Up C Transaction | ||
Related Party Transaction [Line Items] | ||
Number of shares distributed (in shares) | 2,635,379 | |
ABP Trust | ||
Related Party Transaction [Line Items] | ||
Common stock shares outstanding (in shares) | 90,564 | 173,365 |
Adam Portnoy | Up C Transaction | ||
Related Party Transaction [Line Items] | ||
Number of shares distributed (in shares) | 9,938 | |
Barry Portnoy | Up C Transaction | ||
Related Party Transaction [Line Items] | ||
Number of shares distributed (in shares) | 19,283 |
Related Party Transactions - Te
Related Party Transactions - Tender Offer for Shares (Details) - $ / shares | Nov. 11, 2016 | Sep. 30, 2018 |
Five Star | ABP Acquisition LLC | ||
Related Party Transaction [Line Items] | ||
Lock-up period | 10 years | |
Non-engagement period | 10 years | |
Common stock | Five Star | ABP Acquisition LLC | ||
Related Party Transaction [Line Items] | ||
Shares purchased (in shares) | 17,999,999 | |
Price of share (in dollars per share) | $ 3 | |
Common stock | Five Star | The Founders, ABP Trust and ABP Acquisition LLC | ||
Related Party Transaction [Line Items] | ||
Number of shares owned (in shares) | 18,339,621 | 18,162,999 |
Ownership percentage | 36.80% | 36.40% |
Up C Transaction | ||
Related Party Transaction [Line Items] | ||
Lock-up period | 10 years |
Related Party Transactions - _2
Related Party Transactions - Relationships Between Client Companies (Details) | Sep. 30, 2018 |
TA | |
Related Party Transaction [Line Items] | |
Ownership percentage by noncontrolling owners | 1.00% |
TA | HPT | |
Related Party Transaction [Line Items] | |
Ownership percentage by noncontrolling owners | 8.60% |
Five Star | |
Related Party Transaction [Line Items] | |
Ownership percentage by noncontrolling owners | 36.40% |
Five Star | SNH | |
Related Party Transaction [Line Items] | |
Ownership percentage by noncontrolling owners | 8.50% |
SIR | |
Related Party Transaction [Line Items] | |
Ownership percentage by noncontrolling owners | 2.00% |
SIR | GOV | |
Related Party Transaction [Line Items] | |
Ownership percentage by noncontrolling owners | 27.80% |
ILPT | |
Related Party Transaction [Line Items] | |
Ownership percentage by noncontrolling owners | 1.00% |
ILPT | SIR | |
Related Party Transaction [Line Items] | |
Ownership percentage by noncontrolling owners | 69.20% |
ABP Trust | ABP Trust | |
Related Party Transaction [Line Items] | |
Ownership percentage by noncontrolling owners | 14.30% |
ABP Trust | Managed Equity REITs | |
Related Party Transaction [Line Items] | |
Ownership percentage by noncontrolling owners | 14.30% |
ABP Trust | Five Star | |
Related Party Transaction [Line Items] | |
Ownership percentage by noncontrolling owners | 14.30% |
ABP Trust | TA | |
Related Party Transaction [Line Items] | |
Ownership percentage by noncontrolling owners | 14.30% |
Related Party Transactions - Ot
Related Party Transactions - Other (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Nov. 30, 2018 | Oct. 10, 2018 | Sep. 30, 2018 | Apr. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 |
Related Party Transaction [Line Items] | |||||||||||
Separation costs | $ 3,247 | $ 0 | $ 1,358 | ||||||||
Equity based compensation | $ 10,906 | $ 7,128 | $ 8,566 | ||||||||
Percentage of Executives' Business Time Devoted to Services to Managed Operators | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Related party transaction percentage | 80.00% | ||||||||||
Percentage of Executives' Cash Compensation Paid by Managed Operators | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Related party transaction percentage | 80.00% | ||||||||||
Resignation Of Two Non-Executive Offers Of RMR LLC | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Separation costs | $ 747 | ||||||||||
Barry Portnoy | Death Of Founder, Immediate Of Vesting Shares | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Equity based compensation | 466 | ||||||||||
Barry Portnoy | Death Of Founder, Payment Of Cash Bonus To Estate | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Related party transaction | 2,600 | ||||||||||
Business Email Compromise Fraud Loss | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Incurred losses | 590 | ||||||||||
Additional expenses | 184 | ||||||||||
Executive Vice President | Thomas M. O’Brien | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Number of accelerated options (in shares) | 5,600 | ||||||||||
Value of accelerated options | $ 332 | ||||||||||
Executive Vice President | David J. Hegarty | Retirement Agreement, Cash Bonus | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Related party transaction | $ 1,250 | $ 1,250 | |||||||||
Executive Vice President | David J. Hegarty | Retirement Agreement | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Separation costs | 2,500 | ||||||||||
Equity based compensation | $ 371 | ||||||||||
Forecast | Executive Vice President | Mark L. Kleifges | Retirement Agreement, Cash Bonus | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Related party transaction | $ 1,594 | $ 1,594 | |||||||||
Forecast | Executive Vice President | John C. Popeo | Retirement Agreement, Cash Bonus | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Related party transaction | $ 963 | ||||||||||
Subsequent Event | Executive Vice President | John C. Popeo | Retirement Agreement, Cash Bonus | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Related party transaction | $ 963 | ||||||||||
TA | RMR LLC | Subsequent Event | Thomas M. O’Brien | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Purchase of shares (in shares) | 1,492,691 | ||||||||||
Purchases from related party | $ 8,382 |
Shareholders_ Equity (Details)
Shareholders’ Equity (Details) | 12 Months Ended | |
Sep. 30, 2018voteshares | Sep. 30, 2017shares | |
Class A common shares | ||
Class of Stock [Line Items] | ||
Common stock shares authorized | 31,600,000 | 31,600,000 |
Number of votes for each share held | vote | 1 | |
Class B-1 common shares | ||
Class of Stock [Line Items] | ||
Common stock shares authorized | 1,000,000 | 1,000,000 |
Number of votes for each share held | vote | 10 | |
Conversion ratio | 1 | |
Class B-2 common shares | ||
Class of Stock [Line Items] | ||
Common stock shares authorized | 15,000,000 | 15,000,000 |
Number of votes for each share held | vote | 10 | |
Conversion ratio | 1 | |
Class A membership units | ||
Class of Stock [Line Items] | ||
Conversion ratio | 1 | |
Class A membership units | Class A common shares | ||
Class of Stock [Line Items] | ||
Membership units (in units) | 15,229,957,000 | |
ABP Trust | Class B-2 common shares | ||
Class of Stock [Line Items] | ||
Membership units (in units) | 15,000,000 | |
ABP Trust | Class A membership units | ||
Class of Stock [Line Items] | ||
Membership units (in units) | 15,000,000 |
Shareholders_ Equity - Issuance
Shareholders’ Equity - Issuances/Repurchases (Details) $ / shares in Units, $ in Thousands | Sep. 24, 2018USD ($)shares | Sep. 13, 2018$ / sharesshares | Mar. 28, 2018USD ($)$ / sharesshares | Jan. 02, 2018USD ($)$ / sharesshares | Sep. 19, 2017USD ($)shares | Sep. 14, 2017$ / sharesshares | Jun. 30, 2017USD ($)shares | Mar. 29, 2017USD ($)$ / sharesshares | Sep. 30, 2018USD ($)vesting_installmentshares | Sep. 30, 2017USD ($)shares | Sep. 30, 2016USD ($)shares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
General and administrative expense | $ | $ 27,149 | $ 25,189 | $ 23,163 | ||||||||
Compensation and benefits expense | $ | $ 122,916 | $ 99,753 | $ 93,343 | ||||||||
Managing Director | Class A common shares | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Shares acquired through withholding process (in shares) | 375 | 375 | |||||||||
Shares paid for tax withholding (in dollars per share) | $ / shares | $ 69.1 | ||||||||||
Adjustment related to tax withholding for share based compensation | $ | $ 25 | $ 18 | |||||||||
Officers and Employees | Class A common shares | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Shares acquired through withholding process (in shares) | 9,266 | 6,544 | |||||||||
Adjustment related to tax withholding for share based compensation | $ | $ 860 | $ 338 | |||||||||
Former employees | Class A common shares | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Shares acquired through withholding process (in shares) | 1,728 | 47 | |||||||||
Shares paid for tax withholding (in dollars per share) | $ / shares | $ 59.3 | ||||||||||
Adjustment related to tax withholding for share based compensation | $ | $ 103 | $ 2 | |||||||||
RMR LLC | Managing Director | Class A common shares | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Shares acquired through withholding process (in shares) | 375 | 375 | |||||||||
RMR LLC | Officers and Employees | Class A common shares | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Shares acquired through withholding process (in shares) | 9,266 | 6,544 | |||||||||
RMR LLC | Former employees | Class A common shares | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Shares acquired through withholding process (in shares) | 1,728 | 47 | |||||||||
2016 Plan | Managing Director | Class A common shares | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Shares granted (in shares) | 65,000 | 2,500 | 76,100 | 2,500 | |||||||
Grant date intrinsic value (in dollars per share) | $ / shares | $ 95 | $ 69.1 | $ 51.05 | $ 48.2 | |||||||
2016 Plan | Officers and Employees | Class A common shares | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Number of vesting installments | vesting_installment | 5 | ||||||||||
2016 Plan | Restricted Stock Awards | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Number of shares nonvested (in shares) | 110,240 | 104,020 | 57,760 | ||||||||
Number of shares vested (in shares) | 59,671 | 35,374 | |||||||||
Estimated future compensation expense | $ | $ 7,618 | ||||||||||
Weighted average period compensation expense will be recorded (in years) | 28 months | ||||||||||
General and administrative expense | $ | $ 864 | $ 603 | |||||||||
Compensation and benefits expense | $ | $ 3,484 | $ 1,367 | |||||||||
Shares available for future issuance (in shares) | 370,043 | ||||||||||
2016 Plan | RMR LLC | Class A common shares | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Shares granted (in shares) | 65,000 | 12,500 | 76,100 | 12,500 | |||||||
Tranche One | 2016 Plan | Restricted Stock Awards | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Number of shares vested (in shares) | 36,140 | ||||||||||
Tranche Two | 2016 Plan | Restricted Stock Awards | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Number of shares vested (in shares) | 36,140 | ||||||||||
Tranche Three | 2016 Plan | Restricted Stock Awards | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Number of shares vested (in shares) | 24,960 | ||||||||||
Tranche Four | 2016 Plan | Restricted Stock Awards | |||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||
Number of shares vested (in shares) | 13,000 |
Shareholders_ Equity - Restrict
Shareholders’ Equity - Restricted Stock Activity (Details) - Restricted Stock Awards - 2016 Plan - $ / shares | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Number Of Shares | ||
Unvested shares, beginning of year (in shares) | 104,020 | 57,760 |
Shares granted (in shares) | 77,500 | 88,600 |
Vested shares withheld and repurchased (in shares) | (11,369) | (6,966) |
Shares vested (in shares) | (59,671) | (35,374) |
Shares forfeited (in shares) | (240) | 0 |
Unvested shares, end of year (in shares) | 110,240 | 104,020 |
Weighted Average Grant Date Fair Value | ||
Unvested shares, beginning of year (in dollars per share) | $ 45.57 | $ 37.84 |
Shares granted (in dollars per share) | 90.83 | 50.65 |
Shares repurchased (in dollars per share) | 86.92 | 51.35 |
Shares vested (in dollars per share) | 64.90 | 44.69 |
Shares forfeited (in dollars per share) | 84.90 | 0 |
Unvested shares, end of year (in dollars per share) | $ 69.11 | $ 45.57 |
Shareholders_ Equity - Distribu
Shareholders’ Equity - Distributions (Details) - USD ($) $ / shares in Units, $ in Thousands | Nov. 15, 2018 | Aug. 16, 2018 | May 17, 2018 | Feb. 22, 2018 | Nov. 16, 2017 | Aug. 17, 2017 | May 18, 2017 | Feb. 21, 2017 | Nov. 17, 2016 | Sep. 30, 2018 | Sep. 30, 2017 | Jun. 05, 2015 |
Common class A and B1 | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Dividends paid (in dollars per share) | $ 0.25 | $ 0.25 | $ 0.25 | $ 0.25 | $ 0.25 | $ 0.25 | $ 0.25 | |||||
Value of dividends | $ 4,044 | $ 4,044 | $ 4,040 | $ 4,041 | $ 4,024 | $ 4,024 | $ 4,020 | $ 4,021 | ||||
Common stock shares outstanding (in shares) | 16,174,463 | 16,174,463 | 16,162,338 | 16,164,066 | 16,094,510 | 16,094,557 | 16,082,432 | 16,082,432 | ||||
Class A common shares | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Common stock shares outstanding (in shares) | 15,229,957 | 15,164,066 | 15,000,000 | |||||||||
RMR LLC | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Dividends paid (in dollars per share) | $ 0.25 | |||||||||||
Value of dividends | $ 7,794 | $ 7,794 | $ 7,790 | $ 7,791 | $ 7,774 | $ 7,774 | $ 7,770 | $ 7,771 | ||||
ABP Trust | Class A common shares | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Value of dividends | $ 3,750 | $ 3,750 | $ 3,750 | $ 3,750 | $ 3,750 | $ 3,750 | $ 3,750 | $ 3,750 | ||||
Common stock shares outstanding (in shares) | 15,000,000 | |||||||||||
Subsequent Event | Common class A and B1 | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Dividends paid (in dollars per share) | $ 0.35 | |||||||||||
Value of dividends | $ 5,680 | |||||||||||
Common stock shares outstanding (in shares) | 16,229,957 | |||||||||||
Subsequent Event | ABP Trust | Class A common shares | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Value of dividends | $ 4,500 | |||||||||||
RMR LLC | Subsequent Event | Common class A and B1 | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Dividends paid (in dollars per share) | $ 0.3 | |||||||||||
Value of dividends | $ 4,869 | |||||||||||
RMR LLC | Subsequent Event | RMR LLC | ||||||||||||
Class of Stock [Line Items] | ||||||||||||
Value of dividends | $ 9,369 |
Per Common Share Amounts - Sche
Per Common Share Amounts - Schedule of EPS (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Numerator: | |||||||||||
Net income attributable to RMR Inc. | $ 8,184 | $ 8,381 | $ 8,356 | $ 71,120 | $ 5,043 | $ 6,857 | $ 6,883 | $ 23,510 | $ 96,041 | $ 42,293 | $ 37,240 |
Income attributable to unvested participating securities | (564) | (158) | (6) | ||||||||
Net income attributable to RMR Inc. used in calculating basic EPS | $ 95,477 | $ 42,135 | $ 37,234 | ||||||||
Denominator: | |||||||||||
Weighted average common shares outstanding - basic (in shares) | 16,077 | 16,032 | 16,005 | ||||||||
Net income attributable to The RMR Group Inc. per common share - basic (in dollars per share) | $ 5.94 | $ 2.63 | $ 2.33 | ||||||||
Numerator: | |||||||||||
Net income attributable to RMR Inc. | $ 8,184 | $ 8,381 | $ 8,356 | $ 71,120 | $ 5,043 | $ 6,857 | $ 6,883 | $ 23,510 | $ 96,041 | $ 42,293 | $ 37,240 |
Income attributable to unvested participating securities | (564) | (158) | (6) | ||||||||
Net income attributable to RMR Inc. used in calculating diluted EPS | $ 95,477 | $ 42,135 | $ 37,234 | ||||||||
Denominator: | |||||||||||
Weighted average common shares outstanding - basic (in shares) | 16,077 | 16,032 | 16,005 | ||||||||
Dilutive effect of incremental unvested shares (in shares) | 43 | 16 | 0 | ||||||||
Weighted average common shares outstanding - diluted (in shares) | 16,120 | 16,048 | 16,005 | ||||||||
Net income attributable to The RMR Group Inc. per common share - diluted (in dollars per share) | $ 5.92 | $ 2.63 | $ 2.33 |
Per Common Share Amounts (Detai
Per Common Share Amounts (Details) | 12 Months Ended | ||
Sep. 30, 2018shares | Sep. 30, 2017shares | Sep. 30, 2016shares | |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||
Weighted average number of shares outstanding, diluted (in shares) | 16,120,000 | 16,048,000 | 16,005,000 |
Class A membership units | |||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||
Adjustment for dilution of shares | 15,000,000 | ||
Conversion ratio | 1 | ||
Weighted average number of shares outstanding, diluted (in shares) | 30,229,957,000 | ||
Class B-1 common shares | |||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||
Conversion ratio | 1 |
Net Income Attributable to RM_3
Net Income Attributable to RMR Inc. (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Net Income Attributable to RMR Inc. | |||||||||||
Income before income tax expense and equity in losses of investees | $ 276,866 | $ 137,126 | $ 146,934 | ||||||||
Add: RMR Inc. franchise tax expense and interest income | 488 | 635 | 589 | ||||||||
Less: tax receivable agreement remeasurement | (24,710) | 0 | 0 | ||||||||
Less: equity in losses of investees | (578) | (206) | 0 | ||||||||
Less: fees from services provided prior to June 5, 2015 | (127) | 0 | (26,611) | ||||||||
Net income before noncontrolling interest | 251,939 | 137,555 | 120,912 | ||||||||
Less: noncontrolling interest | (121,258) | (66,376) | (58,510) | ||||||||
Net income attributable to RMR Inc. before income tax expense | 130,681 | 71,179 | 62,402 | ||||||||
Add: tax receivable agreement remeasurement | 24,710 | 0 | 0 | ||||||||
Less: income tax expense attributable to RMR Inc. | (58,862) | (28,251) | (24,573) | ||||||||
Less: RMR Inc. franchise tax expense and interest income | (488) | (635) | (589) | ||||||||
Net income attributable to The RMR Group Inc. | $ 8,184 | $ 8,381 | $ 8,356 | $ 71,120 | $ 5,043 | $ 6,857 | $ 6,883 | $ 23,510 | $ 96,041 | $ 42,293 | $ 37,240 |
Net Income Attributable to RM_4
Net Income Attributable to RMR Inc. - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Net Income Attributable to RMR Inc. [Abstract] | |||
Fees from services provided prior to June 5, 2015 | $ 127 | $ 0 | $ 26,611 |
Employee Benefits (Details)
Employee Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Defined Contribution Plan Disclosure [Line Items] | |||
Contributions and expenses | $ 2,213 | $ 1,789 | $ 1,557 |
Tranche 1 | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Employer percent match | 100.00% | ||
Percentage of employees' gross pay | 3.00% | ||
Tranche 2 | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Employer percent match | 50.00% | ||
Percentage of employees' gross pay | 2.00% |
Commitments - Additional Inform
Commitments - Additional Information (Details) | 12 Months Ended | ||
Sep. 30, 2018USD ($)operating_lease | Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | |
Operating Leased Assets [Line Items] | |||
Number of operating leases | operating_lease | 32 | ||
Rental expense | $ 5,163,000 | $ 4,933,000 | $ 4,650,000 |
Non-cash straight line rent expense | 201,000 | $ 250,000 | $ 328,000 |
Future minimum lease payments due | 29,147,000 | ||
Committed capital | 100,000,000 | ||
Executive offices | Affiliate of ABP Trust | |||
Operating Leased Assets [Line Items] | |||
Future minimum lease payments due | $ 22,458,000 | ||
Term of lease | 10 years |
Commitments - Future Minimum Le
Commitments - Future Minimum Lease Payments (Details) $ in Thousands | Sep. 30, 2018USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2,019 | $ 4,953 |
2,020 | 4,698 |
2,021 | 4,634 |
2,022 | 4,699 |
2,023 | 4,086 |
Thereafter | 6,077 |
Total | $ 29,147 |
Segment Reporting (Details)
Segment Reporting (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2018USD ($) | Jun. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Sep. 30, 2017USD ($) | Jun. 30, 2017USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Sep. 30, 2018USD ($)segment | Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | |
Segment Reporting | |||||||||||
Number of segments | segment | 1 | ||||||||||
Revenues: | |||||||||||
Total revenues | $ 65,073 | $ 62,084 | $ 59,281 | $ 218,541 | $ 56,636 | $ 55,502 | $ 54,296 | $ 105,294 | $ 404,979 | $ 271,728 | $ 266,940 |
Expenses: | |||||||||||
Compensation and benefits | 108,763 | 92,625 | 83,419 | ||||||||
Equity based compensation | 10,906 | 7,128 | 8,566 | ||||||||
Separation costs | 3,247 | 0 | 1,358 | ||||||||
Total compensation and benefits expense | 122,916 | 99,753 | 93,343 | ||||||||
General and administrative | 27,149 | 25,189 | 23,163 | ||||||||
Transaction and acquisition related costs | 1,697 | 9,187 | 1,966 | ||||||||
Depreciation and amortization | 1,248 | 2,038 | 1,768 | ||||||||
Total expenses | 153,010 | 136,167 | 120,240 | ||||||||
Operating income | 251,969 | 135,561 | 146,700 | ||||||||
Interest and other income | 4,546 | 1,565 | 234 | ||||||||
Tax receivable agreement remeasurement | 24,710 | 0 | 0 | ||||||||
Impairment loss on TRMT investment | (4,359) | 0 | 0 | ||||||||
Income before income tax expense and equity in losses of investees | 276,866 | 137,126 | 146,934 | ||||||||
Income tax expense | (58,862) | (28,251) | (24,573) | ||||||||
Equity in losses of investees | (578) | (206) | 0 | ||||||||
Net income | 19,011 | $ 19,449 | $ 19,642 | 159,324 | 13,116 | $ 17,605 | $ 17,748 | 60,200 | 217,426 | 108,669 | 122,361 |
Total assets | 504,428 | 383,719 | 504,428 | 383,719 | 337,531 | ||||||
Operating segments | RMR LLC | |||||||||||
Revenues: | |||||||||||
Total revenues | 398,139 | 267,573 | 264,262 | ||||||||
Expenses: | |||||||||||
Compensation and benefits | 102,736 | 89,688 | 82,306 | ||||||||
Equity based compensation | 10,793 | 7,128 | 8,566 | ||||||||
Separation costs | 2,463 | 1,358 | |||||||||
Total compensation and benefits expense | 115,992 | 96,816 | 92,230 | ||||||||
General and administrative | 23,397 | 23,538 | 21,712 | ||||||||
Transaction and acquisition related costs | 1,555 | 337 | 1,966 | ||||||||
Depreciation and amortization | 1,161 | 1,415 | 1,703 | ||||||||
Total expenses | 142,105 | 122,106 | 117,611 | ||||||||
Operating income | 256,034 | 145,467 | 146,651 | ||||||||
Interest and other income | 4,170 | 1,130 | 223 | ||||||||
Tax receivable agreement remeasurement | 0 | ||||||||||
Impairment loss on TRMT investment | 0 | ||||||||||
Income before income tax expense and equity in losses of investees | 260,204 | 146,597 | 146,874 | ||||||||
Income tax expense | 0 | 0 | (1) | ||||||||
Equity in losses of investees | 33 | 0 | |||||||||
Net income | 260,237 | 146,597 | 146,873 | ||||||||
Total assets | 443,211 | 308,018 | 443,211 | 308,018 | 277,802 | ||||||
Operating segments | All other operations | |||||||||||
Revenues: | |||||||||||
Total revenues | 6,840 | 4,155 | 2,678 | ||||||||
Expenses: | |||||||||||
Compensation and benefits | 6,027 | 2,937 | 1,113 | ||||||||
Equity based compensation | 113 | 0 | 0 | ||||||||
Separation costs | 784 | 0 | |||||||||
Total compensation and benefits expense | 6,924 | 2,937 | 1,113 | ||||||||
General and administrative | 3,752 | 1,651 | 1,451 | ||||||||
Transaction and acquisition related costs | 142 | 8,850 | 0 | ||||||||
Depreciation and amortization | 87 | 623 | 65 | ||||||||
Total expenses | 10,905 | 14,061 | 2,629 | ||||||||
Operating income | (4,065) | (9,906) | 49 | ||||||||
Interest and other income | 376 | 435 | 11 | ||||||||
Tax receivable agreement remeasurement | 24,710 | ||||||||||
Impairment loss on TRMT investment | (4,359) | ||||||||||
Income before income tax expense and equity in losses of investees | 16,662 | (9,471) | 60 | ||||||||
Income tax expense | (58,862) | (28,251) | (24,572) | ||||||||
Equity in losses of investees | (611) | (206) | |||||||||
Net income | (42,811) | (37,928) | (24,512) | ||||||||
Total assets | $ 61,217 | $ 75,701 | 61,217 | 75,701 | 59,729 | ||||||
Intersegment Eliminations | |||||||||||
Revenues: | |||||||||||
Total revenues | 4,002 | 738 | 1,806 | ||||||||
Management services | |||||||||||
Revenues: | |||||||||||
Revenues | 191,594 | 174,887 | 164,397 | ||||||||
Management services | Operating segments | RMR LLC | |||||||||||
Revenues: | |||||||||||
Revenues | 191,594 | 174,887 | 164,339 | ||||||||
Management services | Operating segments | All other operations | |||||||||||
Revenues: | |||||||||||
Revenues | 0 | 0 | 58 | ||||||||
Incentive business management fees | |||||||||||
Revenues: | |||||||||||
Revenues | $ 155,881 | $ 52,407 | 155,881 | 52,407 | 62,263 | ||||||
Incentive business management fees | Operating segments | RMR LLC | |||||||||||
Revenues: | |||||||||||
Revenues | 155,881 | 52,407 | 62,263 | ||||||||
Incentive business management fees | Operating segments | All other operations | |||||||||||
Revenues: | |||||||||||
Revenues | 0 | 0 | 0 | ||||||||
Reimbursable payroll related and other costs | |||||||||||
Revenues: | |||||||||||
Revenues | 53,152 | 40,332 | 37,660 | ||||||||
Reimbursable payroll related and other costs | Operating segments | RMR LLC | |||||||||||
Revenues: | |||||||||||
Revenues | 50,664 | 40,279 | 37,660 | ||||||||
Reimbursable payroll related and other costs | Operating segments | All other operations | |||||||||||
Revenues: | |||||||||||
Revenues | 2,488 | 53 | 0 | ||||||||
Advisory services | |||||||||||
Revenues: | |||||||||||
Revenues | 4,352 | 4,102 | 2,620 | ||||||||
Advisory services | Operating segments | RMR LLC | |||||||||||
Revenues: | |||||||||||
Revenues | 0 | 0 | 0 | ||||||||
Advisory services | Operating segments | All other operations | |||||||||||
Revenues: | |||||||||||
Revenues | $ 4,352 | $ 4,102 | $ 2,620 |
Selected Quarterly Financial _3
Selected Quarterly Financial Data (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2016 | |
Total revenues | $ 65,073 | $ 62,084 | $ 59,281 | $ 218,541 | $ 56,636 | $ 55,502 | $ 54,296 | $ 105,294 | $ 404,979 | $ 271,728 | $ 266,940 |
Net income | 19,011 | 19,449 | 19,642 | 159,324 | 13,116 | 17,605 | 17,748 | 60,200 | 217,426 | 108,669 | 122,361 |
Net income attributable to RMR Inc. | $ 8,184 | $ 8,381 | $ 8,356 | $ 71,120 | $ 5,043 | $ 6,857 | $ 6,883 | $ 23,510 | 96,041 | 42,293 | 37,240 |
Net income available for common shareholders per share (in dollars per share) | $ 0.50 | $ 0.52 | $ 0.52 | $ 4.39 | $ 0.31 | $ 0.43 | $ 0.43 | $ 1.46 | |||
Common distributions declared (in dollars per share) | $ 0.25 | $ 0.25 | $ 0.25 | $ 0.25 | $ 0.25 | $ 0.25 | $ 0.25 | $ 0.25 | |||
Incentive business management fees | |||||||||||
Revenues | $ 155,881 | $ 52,407 | $ 155,881 | $ 52,407 | $ 62,263 |