MAXIMUS, INC.

Our primary sources of liquidity are cash on hand, cash from operations, and availability under our revolving credit facilities. As of December 31, 2024, we had $72.7 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 7. 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 December 31, 2024, and their effective interest rates.

(1) Applicable margins are currently 1.5% for the Term Loan A and Revolver and 2.0% for the Term Loan B. The Term Loan A and Revolver will vary based upon leverage starting in February 2025.

Our effective cash interest rate reflects the drivers of our cash interest payments as of December 31, 2024, which can change based upon the reset of the rates. Including the amortization of the upfront payments, our effective interest rate as of December 31, 2024, is 5.5%.

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

Net Cash (Used in)/Provided by Operating Activities

We reported an operating cash outflow for the first three months of fiscal year 2025, compared to cash from operations of $21.6 million in the first quarter of the 2024 fiscal year.

This outflow is consistent with slower receipts from our customers during the holiday period. Our Days Sales Outstanding ("DSO") at December 31, 2024, were 62 days, compared with 61 days at September 30, 2024.

In addition, the timing of income tax payments year-over-year has affected our operating cash flows, increasing outflows in the current fiscal year by approximately $13.0 million.

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. We anticipate the pace of this investment will decline through the latter half of fiscal year 2025.

Net Cash (Used in)/Provided by Financing Activities

We have utilized our revolving credit facility in fiscal year 2025 for working capital needs as well as purchases of Maximus common stock. During the first quarter of fiscal year 2025, we acquired 3.1 million common shares at a cost of $236.7 million. We also incurred charges from the recently-introduced excise tax on these purchases. Since December 31, 2024, we have acquired an additional 0.7 million common shares at a cost of $52.9 million, leaving approximately $85.0 million available for purchase under our existing program.

Credit Facilities

Our principal debt agreement is with JPMorgan Chase Bank N.A. (the "Credit Agreement"). At December 31, 2024, we owed $1.40 billion under the Credit Agreement, with access to an additional $480 million through a revolving credit facility. 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 Credit Agreement contains a number of covenants. 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 Credit Agreement:

•Our Consolidated Net Total Leverage Ratio means, for any twelve-month period, the ratio of our Funded Debt (as defined by the Credit Agreement), offset by up to $150 million of unrestricted cash (Consolidated Net Total Leverage), against our Consolidated EBITDA (as defined by the Credit Agreement). To comply with our 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 Credit Agreement. To comply with our 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 Credit Agreement, such as the level of investment we are entitled to make without seeking additional approval from our lenders.

Our 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 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 Credit Agreement which are included within our financial statements. At December 31, 2024, we were in compliance with all applicable covenants of our Credit Agreement. We do not believe that these covenants represent a significant restriction on 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)