Per Common Share Amounts

12 Months Ended

Sep. 30, 2020

Basic earnings per common share reflects net income attributable to RMR Inc. divided by our weighted average Class A Common Shares and our Class B-1 Common Shares outstanding during the applicable periods. Our Class B-2 Common Shares, which are paired with ABP Trust’s Class A Units, have no independent economic interest in RMR Inc. and thus are not included as common shares outstanding for purposes of calculating basic earnings per common share. Diluted earnings per common share reflects net income divided by our weighted average Class A Common Shares and our Class B-1 Common Shares plus the effect of dilutive common share equivalents during the applicable periods. Diluted common share equivalents reflect the assumed issuance of Class A Common Shares pursuant to our 2016 Plan and the assumed issuance of Class A Common Shares related to the assumed redemption of the 15,000,000 Class A Units using the if-converted method.

Unvested Class A Common Shares granted to our employees are deemed participating securities for purposes of calculating earnings per common share because they have dividend rights. We calculate earnings per share using the two-class method. Under the two-class method, we allocate earnings proportionately to vested Class A Common Shares and Class B-1 Common Shares outstanding and unvested Class A Common Shares outstanding for the period. Earnings attributable to unvested Class A Common Shares are excluded from earnings per share under the two-class method as reflected in our consolidated statements of income.

The 15,000,000 Class A Units that we do not own may be redeemed for our Class A Common Shares on a one-for-one basis, or upon such redemption, we may elect to pay cash instead of issuing Class A Common Shares. Upon redemption of a Class A Unit, the Class B-2 Common Share “paired” with such unit is canceled for no additional consideration. In computing the dilutive effect, if any, that the aforementioned redemption would have on earnings per share, we considered that net income

available to holders of our Class A Common Shares would increase due to elimination of the noncontrolling interest offset by any tax effect, which may be dilutive. For the fiscal year ended September 30, 2020, the assumed redemption is dilutive to earnings per share as presented in the table below. For the fiscal years ended September 30, 2019 and 2018, such redemption is not reflected in diluted earnings per share as the assumed redemption would be anti-dilutive. The calculation of basic and diluted earnings per share for the fiscal years ended September 30, 2020, 2019 and 2018, is as follows:


	Fiscal Year Ended September 30,
	2020		2019		2018
Numerators:
Net income attributable to The RMR Group Inc.	$	28,792	$	74,580	$	96,041
Income attributable to unvested participating securities	(209)		(482)		(564)
Net income attributable to The RMR Group Inc. used in calculating basic EPS	28,583		74,098		95,477
Effect of dilutive securities:
Add back: net income attributable to noncontrolling interest	37,541		—		—
Add back: income tax expense	11,552		—		—
Income tax expense at enacted tax rates assuming redemption of noncontrolling interest’s Class A Units for Class A Common Shares	(23,183)		—		—
Net income attributable to The RMR Group Inc. used in calculating diluted EPS	$	54,493	$	74,098	$	95,477

Denominators:
Weighted average common shares outstanding - basic	16,194		16,132		16,077
Effect of dilutive securities:
Assumed redemption of noncontrolling interest’s Class A Units for Class A Common Shares	15,000		—		—
Incremental unvested shares	—		11		43
Weighted average common shares outstanding - diluted	31,194		16,143		16,120

Net income attributable to The RMR Group Inc. per common share - basic	$	1.77	$	4.59	$	5.94
Net income attributable to The RMR Group Inc. per common share - diluted	$	1.75	$	4.59	$	5.92