Related Person Transactions | Related Person Transactions Adam D. Portnoy, one of our Managing Directors, is the sole trustee of ABP Trust, and owns a majority of ABP Trust's voting securities. As of December 31, 2018 , he beneficially owned, in aggregate, (i) 132,002 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. Adam D. Portnoy is also a managing trustee or managing director of each of the Managed REITs, Five Star, RIF and TA, a director of AIC and the majority owner and director of Sonesta. Jennifer B. Clark, our other Managing Director, is a managing trustee of RIF and SNH, president of AIC and a director of Sonesta. As of December 31, 2018, HPT, OPI and SNH owned 2,503,777 , 2,801,061 and 2,637,408 Class A Common Shares, respectively, and Adam D. Portnoy beneficially owned, in aggregate, 35.7% of Five Star’s outstanding common shares, 1.1% of HPT’s outstanding common shares, 1.2% of ILPT’s outstanding common shares, 1.5% of OPI’s outstanding common shares, 1.1% of SNH’s outstanding common shares, 4.0% of TA’s outstanding common shares (through RMR LLC), 2.2% of RIF’s outstanding common shares, and 18.9% of TRMT's outstanding common shares (through Tremont Advisors). All the officers of the Managed Equity REITs, AIC and the Open End Fund are officers or employees of RMR LLC. All of TRMT’s officers are officers or employees of Tremont Advisors or RMR LLC. Many of the executive officers of the Managed Operators are officers or employees of RMR LLC. All of RIF’s officers are officers or employees of RMR Advisors or RMR LLC. Some of our executive officers are also managing directors or managing trustees of certain of the Managed REITs, the Managed Operators and RIF. As of December 31, 2018 , ABP Trust owned 14.3% of AIC and 206,300 limited partner units of the Open End Fund and RMR LLC owned no limited partnership units, but has committed to contributing $100,000 to the Open End Fund. The general partner of the Open End Fund is a subsidiary of ABP Trust. Additional information about our related person transactions appears in Note 8, Distributions , below and in our 2018 Annual Report. Revenues from Related Parties For the three months ended December 31, 2018 and 2017 , we recognized revenues from related parties as set forth in the following table: Three Months Ended December 31, 2018 (1)(2) 2017 (2) $ % $ % Managed Equity REITs: HPT (3) $ 66,395 23.7 % $ 86,066 39.4 % ILPT 8,460 3.0 — — OPI (4) 56,243 20.1 13,509 6.2 SIR (3) 47,843 17.1 36,990 16.9 SNH (3) 85,979 30.7 71,545 32.7 264,920 94.6 208,110 95.2 Managed Operators: Five Star 2,413 0.9 2,690 1.2 Sonesta 757 0.3 568 0.3 TA 3,853 1.4 3,771 1.7 7,023 2.6 7,029 3.2 Client Companies: ABP Trust 3,335 1.2 1,279 0.6 AIC 60 — 60 — Open End Fund 3,477 1.2 — — RIF 733 0.2 729 0.4 TRMT 695 0.2 706 0.3 8,300 2.8 2,774 1.3 Total revenues from related parties 280,243 100.0 217,913 99.7 Other unrelated parties 70 — 628 0.3 $ 280,313 100.0 % $ 218,541 100.0 % (1) Revenues from related parties for the three months ended December 31, 2018 includes other client company reimbursable expenses of $98,076 recognized due to the adoption of ASC 606 as summarized in Note 2, Recent Accounting Pronouncements. (2) Revenues from related parties for the three months ended December 31, 2018 and December 31, 2017 include $13,873 and $12,708 of reimbursable compensation and benefits, respectively. (3) The amounts for the three months ended December 31, 2018 include incentive business management fees of $53,635 , $25,817 and $40,642 , which we earned from HPT, SIR and SNH, respectively, and which were paid in January 2019. The amounts for the three months ended December 31, 2017 include incentive business management fees of $74,572 , $25,569 and $55,740 , which RMR LLC earned from HPT, SIR and SNH, respectively, and which were paid in January 2018 . (4) SIR merged with and into a subsidiary of OPI on December 31, 2018. This table presents revenues from SIR separately as they relate to periods prior to this merger. Amounts Due From Related Parties The following table represents amounts due from related parties as of the dates indicated: December 31, September 30, 2018 2018 Managed Equity REITs: HPT (1) $ 63,239 $ 8,391 ILPT (1) 4,055 2,692 OPI (1)(2) 65,085 7,870 SIR (2) — 5,887 SNH (1) 58,175 9,705 190,554 34,545 Managed Operators: Five Star 205 281 Sonesta 21 30 TA 637 599 863 910 Client Companies: ABP Trust (1) 1,400 383 AIC 27 20 Open End Fund (1) 2,284 608 RIF 28 31 TRMT (1) 760 532 4,499 1,574 $ 195,916 $ 37,029 (1) HPT, ILPT, OPI, SNH, ABP Trust, AIC, the Open End Fund and TRMT amounts include other client company reimbursable expenses of $2,702 , $1,758 , $29,864 , $10,004 , $1,112 , $7 , $1,470 and $278 , respectively. (2) As a result of the GOV/SIR Merger, OPI succeeded to SIR's rights and obligations. As a result, OPI is obligated to pay to RMR LLC all amounts due from SIR as of December 31, 2018 will be reimbursed to RMR LLC by OPI. Leases As of December 31, 2018 , RMR LLC leased from ABP Trust and certain Managed Equity REITs office space for use as our headquarters and local offices. We incurred rental expense under related party leases aggregating $1,287 and $1,028 for the three months ended December 31, 2018 and 2017 , respectively. Tax Related Payments Pursuant to our tax receivable agreement with ABP Trust, RMR Inc. pays to ABP Trust 85.0% of the amount of cash savings, if any, in U.S. federal, state and local income tax or franchise tax that RMR Inc. realizes as a result of (a) the increases in tax basis attributable to our dealings with ABP Trust and (b) tax benefits related to imputed interest deemed to be paid by us as a result of the tax receivable agreement. 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 in our condensed consolidated statements of comprehensive income for the three months ended December 31, 2017 as tax receivable agreement remeasurement. As of December 31, 2018 , our condensed 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. Under the RMR LLC operating agreement, RMR LLC is also required to make certain pro rata distributions to each member of RMR LLC quarterly on the basis of the estimated tax liabilities of its members estimated quarterly, subject to future adjustment based on actual results. For the three months ended December 31, 2018 and 2017 , pursuant to the RMR LLC operating agreement, RMR LLC made required quarterly tax distributions to holders of its membership units totaling $16,722 and $31,488 , respectively, of which $8,685 and $16,333 , respectively, was distributed to us and $8,037 and $15,155 , respectively, was distributed to ABP Trust, based on each membership unit holder’s respective ownership percentage. The amounts distributed to us were eliminated in our condensed consolidated financial statements, and the amounts distributed to ABP Trust were recorded as a reduction of its noncontrolling interest. We used funds from these distributions to pay certain of our U.S. federal and state income tax liabilities and to pay part of our obligations under the tax receivable agreement. Incentive business management fees earned for the calendar year 2018 were higher than estimated; as a result, tax distributions are expected to increase during calendar year 2019. Termination of SIR Management Agreements and Waiver of Termination Fees in Connection with GOV-SIR Merger Effective upon consummation of the GOV/SIR Merger, SIR terminated its business and property management agreements with RMR LLC for convenience, and RMR LLC waived its right to receive payment of the termination fee that would otherwise be due pursuant to each such agreement upon such termination. Credit agreement between TRMT and Tremont Advisors On February 4, 2019, TRMT entered into a credit agreement, or the Credit Agreement, with Tremont Advisors as the lender, pursuant to which TRMT may, from time to time within six months after entering into the Credit Agreement, borrow amounts up to $25,000 in unsecured loans at a fixed rate of six and one-half percent ( 6.5% ) per annum. The Credit Agreement contains customary representations, covenants and events of default and is subordinated in right of payment to TRMT's master repurchase facility. The Credit Agreement matures on the later of February 4, 2022 or 30 days following maturity of TRMT's secured financing arrangements, as defined. The Credit Agreement requires TRMT to prepay any amount borrowed upon public issuance of equity interest or issuance of preferred equity, as defined. Other Effective November 30, 2018, John C. Popeo resigned from his positions 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 connection with his retirement, RMR LLC entered into a retirement agreement with Mr. Popeo on October 24, 2018, pursuant to which, subject to the terms thereof, RMR LLC paid him approximately $963 in cash following his resignation as an Executive Vice President of RMR LLC on November 30, 2018 and will pay him an additional approximately $963 in cash following his resignation as an employee of RMR LLC on March 31, 2019. 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. As of December 31, 2018 there remained no further substantive performance obligations and we in turn recognized all provisions of the retirement agreement in our condensed consolidated statements of comprehensive income as separation costs, which included $1,953 of cash separation costs and $537 of equity based compensation related to Mr. Popeo's retirement. Effective December 31, 2018, Mark L. Kleifges resigned 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 connection with his retirement, RMR LLC entered into a retirement agreement with Mr. Kleifges on October 24, 2018, pursuant to which, subject to the terms thereof, RMR LLC paid him approximately $1,594 in cash following his resignation as an Executive Vice President of RMR LLC on December 31, 2018 and will pay him an additional approximately $1,594 in cash following his resignation as an employee of RMR LLC on June 30, 2019. 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. As of December 31, 2018 there remained no further substantive performance obligations and we in turn recognized all provisions of the retirement agreement in our condensed consolidated statements of comprehensive income as separation costs, which included $3,234 of cash separation costs and $537 of equity based compensation related to Mr. Kleifges' retirement. Effective December 31, 2018, Bruce J. Mackey Jr. resigned from his positions as Executive Vice President of RMR LLC and president and chief executive officer of Five Star. In connection with his resignation, Five Star and RMR LLC entered into a separation agreement with Mr. Mackey on December 11, 2018, pursuant to which Mr. Mackey will remain an employee of Five Star and RMR LLC until December 31, 2019, or such earlier date as he may elect. Under his separation agreement, following his resignation, Mr. Mackey received a cash payment from Five Star in the amount of $600 . In addition, he will also receive in 2019 release payments in the aggregate amount of $550 . RMR LLC will pay 20% and Five Star will pay 80% of the release payments. In addition, all of our unvested Class A Common Shares previously awarded to Mr. Mackey will fully accelerate upon the date of his separation from Five Star, subject to conditions. For the three months ended December 31, 2018 , we recorded $125 of separation costs related to Mr. Mackey's retirement. We also recognized separation costs of $11 in connection with other non-executive employees of RMR LLC for the three months ended December 31, 2018 . |