•	As of March 31, 2020, The RMR Group LLC had $32.0 billion of gross assets under management compared to gross assets under management of $30.0 billion as of March 31, 2019. Fee paying assets under management was $20.2 billion on March 31, 2020 compared to $24.2 billion on March 31, 2019.

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•	Total management and advisory services revenues for the quarter ended March 31, 2020 were $44.1 million, compared to $43.4 million for the quarter ended March 31, 2019.

•	The RMR Group Inc. earned management services revenues from the following sources (dollars in thousands):

(1)	Managed Equity REITs for the periods presented includes: Diversified Healthcare Trust (DHC), Industrial Logistics Properties Trust (ILPT), Office Properties Income Trust (OPI) and Service Properties Trust (SVC).

(2)	Managed Operators collectively refers to: Five Star Senior Living Inc. (FVE), Sonesta International Hotels Corporation (Sonesta) and TravelCenters of America Inc. (TA).

•	For the three months ended March 31, 2020, net income was $14.9 million and net income attributable to The RMR Group Inc. was $6.5 million, or $0.39 per diluted share, compared to net income of $18.7 million and net income attributable to The RMR Group Inc. of $8.2 million, or $0.50 per diluted share, for the three months ended March 31, 2019.

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For the three months ended March 31, 2020, adjusted net income attributable to The RMR Group Inc. was $7.6 million, or $0.46 per diluted share, compared to $8.1 million, or $0.50 per diluted share, for the three months ended March 31, 2019. The adjustments to net income attributable to The RMR Group Inc. this quarter included $0.8 million, or $0.05 per diluted share, of unrealized losses on an equity method investment accounted for under the fair value option, $0.1 million, or $0.01 per diluted share, of separation costs, and $0.1 million, or $0.01 per diluted share, of transaction and acquisition related costs.

•	For the three months ended March 31, 2020, Adjusted EBITDA was $23.9 million, Operating Margin was 40.6% and Adjusted EBITDA Margin was 51.3%, compared to Adjusted EBITDA of $24.7 million, Operating Margin of 43.2% and Adjusted EBITDA Margin of 54.1% for the three months ended March 31, 2019.

•	As of March 31, 2020, The RMR Group Inc. had $377.4 million in cash and cash equivalents with no outstanding debt obligations.

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(1)

Includes business management fees earned from the Managed Equity REITs monthly based upon the lower of (i) the average historical cost of each REIT’s properties and (ii) each REIT’s average market capitalization. The following table presents a summary of each Managed Equity REIT’s primary strategy and the lesser of the historical cost of its assets under management and its market capitalization as of March 31, 2020 and 2019, as applicable:

(a)

The basis on which base business management fees are calculated for the three months ended March 31, 2020 and 2019 may differ from the basis at the end of the periods presented in the table above. As of March 31, 2020, the market capitalization was lower than the historical costs of assets under management for all of the Managed Equity REITs. The historical costs of assets under management for DHC, ILPT, OPI and SVC as of March 31, 2020, were $8,537,224, $2,611,243, $5,714,691 and $12,474,696, respectively.

(2)	Equity based compensation expense for the three months ended March 31, 2020 consists of $592 related to shares granted by The RMR Group Inc. to certain of its officers and employees and income of $(290) related to Client Companies' shares granted to certain of The RMR Group Inc.’s officers and employees.

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(3)

The RMR Group Inc. calculates earnings per share, or EPS, using the two-class method. As such, earnings attributable to unvested participating shares are excluded from earnings before calculating per share amounts. In addition, diluted EPS includes the assumed issuance of Class A Common Shares pursuant to The RMR Group Inc.’s equity compensation plan and the issuance of Class A Common Shares related to the assumed redemption of the noncontrolling interest’s 15,000 Class A Units using the if-converted method. The calculation of basic and diluted EPS is as follows:

(a)	The assumed redemption of the noncontrolling interest’s Class A Units for Class A Common Shares was antidilutive for the three and six months ended March 31, 2019.

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(1)	Includes $2,200 in unrealized losses on The RMR Group Inc.’s investment in TA common shares, adjusted to reflect amounts attributable to the noncontrolling interest and income tax expense at a rate of approximately 14.9%.

(2)	Includes $385 of separation costs, adjusted to reflect amounts attributable to the noncontrolling interest and income tax expense at a rate of approximately 14.9%.

(3)	Includes $373 of transaction and acquisition related costs, adjusted to reflect amounts attributable to the noncontrolling interest and income tax expense at a rate of approximately 14.9%.

(1)	Includes $414 of separation costs, adjusted to reflect amounts attributable to the noncontrolling interest and income tax expense at a rate of approximately 14.4%.

(2)	Includes $522 in unrealized gains on The RMR Group Inc.’s investment in TA common shares, adjusted to reflect amounts attributable to the noncontrolling interest and income tax expense at a rate of approximately 14.4%.

(3)	Includes $47 of transaction and acquisition related costs, adjusted to reflect amounts attributable to the noncontrolling interest and income tax expense at a rate of approximately 14.4%.

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(1)

EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin are non-GAAP financial measures calculated as presented in the tables above. The RMR Group Inc. considers EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin to be appropriate supplemental measures of its operating performance, along with net income, net income attributable to The RMR Group Inc., operating income and operating margin. The RMR Group Inc. believes that EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin provide useful information to investors because by excluding the effects of certain amounts, such as those outlined in the tables above, EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin may facilitate a comparison of current operating performance with The RMR Group Inc.’s historical operating performance and with the performance of other asset management businesses. In addition, The RMR Group Inc. believes that providing Adjusted EBITDA Margin may help investors assess The RMR Group Inc.’s performance of its business by providing the margin that Adjusted EBITDA represents to its contractual management and advisory fees (excluding any incentive business management fees). EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin do not represent cash generated by operating activities in accordance with GAAP and should not be considered as alternatives to net income, net income attributable to The RMR Group Inc., operating income or operating margin as an indicator of The RMR Group Inc.’s financial performance or as a measure of The RMR Group Inc.’s liquidity. Other asset management businesses may calculate EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin differently than The RMR Group Inc. does.

(2)

Contractual management and advisory fees are the base business management fees, property management fees and advisory fees The RMR Group Inc. or its subsidiaries earns pursuant to its management and investment advisory agreements with its client companies. These amounts are calculated pursuant to the contractual formulas and do not deduct other asset amortization of $2,354 for each of the three months ended March 31, 2020 and 2019, or $4,708 for each of the six months ended March 31, 2020 and 2019, required to be recognized as a reduction to management services revenues in accordance with GAAP and do not include the incentive business management fees of $120,094 that The RMR Group Inc. recognized under GAAP during the three months ended December 31, 2018, which were earned for the calendar year 2018.

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Mr. Portnoy states that, despite the challenges posed by recent market disruptions, management services revenues increased year over year by 1.7% and The RMR Group Inc. generated net income of $14.9 million, Adjusted EBITDA of $23.9 million, Operating Margin of 40.6% and Adjusted EBITDA Margin of 51.3% this quarter. These statements may imply that The RMR Group Inc.’s financial situation is insulated from market pressures and volatility, or that The RMR Group Inc.’s performance with respect to prior periods will continue. Past results are not indicative of future performance. Further, the Client Companies that were most negatively impacted from the COVID-19 pandemic did not meaningfully experience that impact until generally the second half of March 2020. Those Client Companies and their tenants, operators and borrowers have continued to experience depressed business conditions since the end of the quarter. The duration of the COVID-19 pandemic and resulting economic downturn may continue for an extended period and could worsen. If so, The RMR Group Inc.’s Client Companies’ businesses, results of operations and liquidity would be significantly negatively impacted and operating results would be negatively impacted, possibly significantly. For these and other reasons, there can be no assurances that The RMR Group Inc.’s net income, Adjusted EBITDA, Operating Margin or Adjusted EBITDA Margin will not decline in the future;

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Mr. Portnoy states the The RMR Group Inc. believes that its Client Companies have ample resources to navigate the challenges impacting their respective sectors and that the experience and depth of The RMR Group Inc.’s leadership team is critical to navigating both The RMR Group Inc.’s Client Companies’ recovery and subsequent growth. However, if the current economic conditions that have been spurred by the COVID-19 pandemic continue for an extended period or worsen, The RMR Group Inc.’s Client Companies’ businesses, operations and liquidity may be significantly and negatively harmed and they may be delayed or be unable to recover or grow for an indefinite period, notwithstanding the depth and experience of The RMR Group Inc.’s leadership team;

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Mr. Portnoy states that he believes The RMR Group Inc.’s dividend remains secure. The RMR Group Inc.’s ability to continue to pay dividends is subject to a number of factors and there are no assurances that The RMR Group Inc. will be able to continue paying dividends in the future or that such dividends will not be reduced or suspended due to unforeseen circumstances, including, but not limited to, economic conditions due to the COVID-19 pandemic and its aftermath;

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Mr. Portnoy states that The RMR Group Inc. is in a strong position to weather the current economic disruption due to its long-term evergreen contracts and scalable platform. This statement may imply that The RMR Group Inc. has reduced exposure to market pressures and volatility. Most of the revenue generated from the evergreen contracts are based on the lower of the Managed Equity REITs’ market capitalizations and historical costs of their properties, the rents they collect and the construction projects they undertake and that The RMR Group LLC manages. In addition, the management agreements with the Client Companies are subject to termination by the Client Companies in certain instances. As a result, The RMR Group Inc.’s revenues may be lower than amounts it earned in prior periods if these Client Companies’ market capitalizations remain at current levels or lower, the amount of rent they receive declines and the level and cost of construction at these companies’ properties managed by The RMR Group LLC declines. If so, The RMR Group Inc. may be challenged in weathering the current environment, especially if the economic downturn continues or worsens over an extended period. Further, The RMR Group Inc. may not benefit from the scalable platform it believes it has if it is not able to identify opportunities and successfully execute on them, and, even if it does, those opportunities may not benefit The RMR Group Inc. and could be unprofitable;

•	Mr. Portnoy states that The RMR Group Inc.’s balance sheet provides The RMR Group Inc. with the continued ability to assess strategic opportunities for future growth. This statement may imply that The RMR Group Inc. will successfully explore and act upon strategic opportunities for future growth and that The RMR Group Inc.’s

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It is virtually impossible to determine the ultimate impact of COVID-19 and its aftermath at this time due to ongoing uncertainty and volatility in the markets, including the uncertainty as to the duration of the economic downturn resulting from the pandemic. There can be no assurances as to when share prices will stabilize or when The RMR Group Inc. will be able to provide new financial guidance or as to the extent of the negative impact on The RMR Group Inc. and its Client Companies.