Related Person Transactions

As of March 31, 2017, our Managing Directors own in aggregate, directly and indirectly through ABP Trust, (i) 146,048 shares of Class A common stock of RMR Inc., or Class A Common Shares; (ii) all of the outstanding shares of Class B-1 common stock of RMR Inc., or Class B-1 Common Shares; (iii) all of 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. Our Managing Directors are also officers of RMR Inc. and officers of RMR LLC.

Our Managing Directors are also managing trustees of each of the Managed REITs. As of March 31, 2017, 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 our Managing Directors beneficially owned, in aggregate, 2.5% of GOV’s common shares, 1.4% of HPT’s outstanding common shares, 1.9% of SIR’s outstanding common shares and 1.3% of SNH’s outstanding common shares.

Barry M. Portnoy is a managing director of Five Star and of TA. As of March 31, 2017, our Managing Directors beneficially owned, in aggregate, less than one percent of TA's outstanding common shares and 36.7% of Five Star’s outstanding common shares. Our Managing Directors are also the owners and directors of Sonesta and are directors of AIC.

All of the executive officers of the Managed REITs and many of the executive officers of the Managed Operators are also officers of RMR LLC.

Additional information about our related person transactions appears in Note 7 below.

Revenues from Related Parties

For the three and six months ended March 31, 2017 and 2016, we recognized revenues from related parties as set forth in the following table:



	Three Months Ended March 31,								Six Months Ended March 31,
	2017				2016				2017				2016
	$		%		$		%		$		%		$		%
Managed REITs:
GOV	$	8,938	16.4	%	$	7,830	16.2	%	$	17,163	10.7	%	$	15,041	9.5	%
HPT	10,792		19.9	%	8,958		18.5	%	73,520		46.1	%	80,781		51.0	%
SIR	11,062		20.4	%	10,175		21.1	%	22,019		13.8	%	19,898		12.6	%
SNH	15,156		27.9	%	13,913		28.8	%	29,780		18.7	%	27,335		17.2	%
	45,948		84.6	%	40,876		84.6	%	142,482		89.3	%	143,055		90.3	%

Managed Operators:
Five Star	2,403		4.4	%	2,310		4.8	%	4,767		3.0	%	4,722		3.0	%
Sonesta	531		1.0	%	425		0.9	%	1,074		0.7	%	909		0.5	%
TA	3,357		6.2	%	3,347		6.9	%	7,163		4.4	%	6,946		4.4	%
	6,291		11.6	%	6,082		12.6	%	13,004		8.1	%	12,577		7.9	%

Other:
AIC	60		0.1	%	60		0.1	%	120		—	%	120		0.1	%
RIF	607		1.1	%	560		1.1	%	1,213		0.8	%	1,141		0.7	%
ABP Trust	960		1.8	%	755		1.6	%	1,731		1.1	%	1,512		1.0	%
	1,627		3.0	%	1,375		2.8	%	3,064		1.9	%	2,773		1.8	%
Total revenues from related parties	53,866		99.2	%	48,333		100.0	%	158,550		99.3	%	158,405		100.0	%
Other unrelated parties	430		0.8	%	—		—	%	1,040		0.7	%	58		—	%
	$	54,296	100.0	%	$	48,333	100.0	%	$	159,590	100.0	%	$	158,463	100.0	%

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.

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, 2015, RMR LLC earned a $62,263 incentive business management fee from HPT pursuant to our business management agreement with HPT. Under 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 portion of the $62,263 incentive fee allocated solely to ABP Trust pursuant to this provision was $26,611. This $62,263 incentive fee was paid in January 2016.

Amounts Due From Related Parties

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



	March 31,		September 30,
	2017		2016
Managed REITs:
GOV	$	5,458	$	6,165
HPT	7,322		7,800
SIR	6,318		7,190
SNH	8,458		9,733
	27,556		30,888

Managed Operators:
Five Star	348		291
Sonesta	47		5
TA	658		711
	1,053		1,007

Other Client Companies:
AIC	20		21
RIF	73		17
ABP Trust	477		683
	570		721
	$	29,179	$	32,616

Leases

As of March 31, 2017, we leased from ABP Trust and certain Managed REITs office space for use as our headquarters and regional offices. We incurred rental expense under related party leases aggregating $1,059 and $1,041 for the three months ended March 31, 2017 and 2016, respectively, and $2,109 and $2,113 for the six months ending March 31, 2017 and 2016, 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. During the six months ended March 31, 2017, we made no payments to ABP Trust pursuant to this agreement. As of March 31, 2017, our condensed consolidated balance sheet reflects a liability related to the tax receivable agreement of $64,929, including $2,900 classified as a current liability that we expect to pay to ABP Trust during the fourth quarter of fiscal year 2017.

Under the RMR LLC operating agreement, RMR LLC is 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 six months ended March 31, 2017, pursuant to the RMR LLC operating agreement, RMR LLC made required quarterly tax distributions to holders of its membership units totaling $37,500, of which $19,402 was distributed to us and $18,098 was distributed to ABP Trust, based on each membership unit holder’s respective ownership percentage. The $19,402 distributed to us was eliminated in our condensed consolidated financial statements, and the $18,098 distributed to ABP Trust was 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 expect to use funds from these distributions to pay part of our obligations under the tax receivable agreement.

Other Quarterly Distributions

In connection with dividends we declared and paid since October 1, 2016, RMR LLC made cash distributions to its members. See Note 7 for further information regarding these RMR LLC distributions.