MAXIMUS INC

Our primary sources of liquidity are cash on hand, cash from operations, and availability under our revolving credit facilities. As of June 30, 2024, we had $102.8 million in cash and cash equivalents. We believe that our current cash position, access to our revolving debt, and cash flow generated from operations should be sufficient for our operating requirements for the next 12 months and beyond, including enabling us to fund required long-term debt repayments, dividends and any share purchases we might choose to make. See "Note 6. Debt and Derivatives" to the Consolidated Financial Statements for a more detailed discussion of our debt financing arrangements.

We have included the following table showing our debt balances as of June 30, 2024, and their effective interest rates.

(1) Applicable margin ranges between 1% and 2%, based on our leverage ratio.

Our effective cash interest rate reflects the drivers of our cash interest payments as of June 30, 2024, which can change based upon the reset of the rates. Including the amortization of the upfront payments, our effective interest rate as of June 30, 2024, is 6.0%.

The below table summarizes our change in cash, cash equivalents, and restricted cash.

Net Cash Provided By Operating Activities

Our cash flows from operating activities for the first nine months of fiscal year 2024 increased by $181.7 million, compared to the comparative period in the prior year. This increase was the result of our increased profitability year-over-year, as well as use of our Receivables Purchase Agreement. At June 30, 2024, and September 30, 2023, we had sold $173 million and $72 million of our receivables balance, respectively.

Our Days Sales Outstanding ("DSO") at June 30, 2024, were 59 days, compared with 60 days at September 30, 2023. Excluding the effects of the Receivables Purchase Agreement, DSO would have been 68 days and 65 days, respectively.

Net Cash Used In Investing Activities

We continue to make investments in our capital base, most notably in upgrading technology on our Federal MDE contracts. In addition:

•During fiscal year 2024, we have invested $18 million in acquiring part of one of our long-term vendors;

•During fiscal year 2023, we received payment from the sale of our Swedish business and a small commercial practice in the United Kingdom;

•During fiscal year 2024, we received a further installment payment on the sale of the U.K. business, as well as payment from the sale of our businesses in Italy, Singapore, and our Canadian employment business.

Net Cash Used In Financing Activities

Our principal debt agreement is with JPMorgan Chase Bank N.A. In May 2024, we amended our existing agreement (the "Amended Credit Agreement"). The Amended Credit Agreement extended the maturity dates of our debt and rebalanced our borrowings, but is otherwise broadly consistent with the original arrangement. We have continued to use our operating cash flows to reduce our outstanding debt balance, while maintaining the ability to seek opportunities to build value through M&A activity or our share purchase program. Entering into the Amended Credit Agreement resulted in new financing costs of $9.7 million.

In addition to dividends, we have also purchased Maximus common stock during fiscal year 2024; no such purchases were made in fiscal year 2023.

Our financing cash flows in both fiscal years 2024 and 2023 include transactions in restricted cash funds held by us on behalf of other parties. In fiscal year 2023, these include a payment of $60.7 million to the acquirer of some of our accounts receivable balances, relating to funds received on their behalf.

Credit Facilities

Our principal debt agreement is the Amended Credit Agreement. At June 30, 2024, we owed $1.15 billion under the Amended Credit Agreement, with access to an additional $750 million through a revolving credit facility. Following the amendment, our principal loans mature in May 2029 and May 2031, when the remaining balances must be renegotiated or repaid in full. The revolving facility also matures in May 2029. In addition, our term loans require quarterly mandatory repayments.

The Amended Credit Agreement contains a number of covenants with which we are expected to comply. Failure to meet these requirements would result in a need to renegotiate the agreement, seek a waiver, or a requirement to repay our outstanding debt in full. There are two financial covenants, both defined in the Amended Credit Agreement.

•Our Consolidated Net Total Leverage Ratio means, for any twelve-month period, the ratio of our Funded Debt (as defined by the Amended Credit Agreement), offset by up to $150 million of unrestricted cash (Consolidated Net Total Leverage), against our Consolidated EBITDA (as defined by the Amended Credit Agreement). To comply with our Amended Credit Agreement, this ratio cannot exceed 4.00:1.00 at the end of each quarter, with a step up to 4.50:1.00 under certain circumstances. This ratio also determines both our interest rate and the charge we pay on the unused component of our revolving credit facility, with the charge increasing as the leverage ratio increases.

•Our Consolidated Net Interest Coverage Ratio means, for any twelve-month period, the ratio of our Consolidated EBITDA against our Consolidated Net Interest Expense, as defined by the Amended Credit Agreement. To comply with our Amended Credit Agreement, this ratio cannot be less than 3.00:1.00 at the end of each quarter.

Consolidated EBITDA also drives certain permissions within the Amended Credit Agreement, such as the level of investment we are entitled to make without seeking additional approval from our lenders.

Our Amended Credit Agreement defines Consolidated EBITDA, as well as other components of the calculations above. The definition of Consolidated EBITDA requires us to include adjustments not typically included within EBITDA, including unusual, non-recurring expenses, certain non-cash adjustments, the pro forma effects of acquisitions and disposals, and estimated synergies from acquisitions. As a result, Consolidated EBITDA as defined by the Amended Credit Agreement may not be comparable to EBITDA or related or similarly-titled measures presented by other companies.

We have summarized below the components of our two financial ratio calculations, including the components of Consolidated EBITDA as defined by the Amended Credit Agreement which are included within our financial statements. At June 30, 2024, we were in compliance with all applicable covenants of our Amended Credit Agreement. We do not believe that these covenants represent a significant restriction in our ability to operate our business or to pay our dividends.

Cash in Foreign Locations

We have no requirement to remit funds from our foreign locations to the United States. We will continue to explore opportunities to remit additional funds, taking into consideration the working capital requirements and relevant tax rules in each jurisdiction. When we are unable to remit funds back without incurring a penalty, we will consider these funds indefinitely reinvested until such time as these restrictions are changed. As a result, we do not record U.S. deferred income taxes on any funds held in foreign jurisdictions. We have not attempted to calculate our potential liability from any transfer of these funds, as any such transaction might include tax planning strategies that we have not fully explored. Accordingly, it is not possible to estimate the potential tax obligations if we were to remit all of our funds from foreign locations to the United States.

Free Cash Flow (Non-GAAP)