MAXIMUS, INC.
For the period ended Jun 30, 2025. Filed Aug 7, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Aug 7, 2025
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8. Fair Value Measurements
- FAIR VALUE MEASUREMENTS
The following assets and liabilities are recorded at fair value on a recurring basis.
We hold mutual fund assets within a Rabbi Trust to cover liabilities in our deferred compensation plan. These assets have prices quoted within active markets and, accordingly, are classified as level 1 within the fair value hierarchy.
We have interest rate swap agreements serving to reduce our interest rate risk on our debt. These agreements can be valued using observable data and, accordingly, are classified as level 2 within the fair value hierarchy.
In connection with the businesses sold in Australia and Korea, we indemnified the buyer related to certain potential losses, which are recorded at fair value, based on an assessment of probability-weighted outcomes. Accordingly, these inputs are not observable and are classified as level 3 within the fair value hierarchy. Changes in the fair value of the indemnification liability are recorded in the consolidated statements of operations.
The table below presents assets and liabilities measured and recorded at fair value in our consolidated balance sheets on a recurring basis and their corresponding level within the fair value hierarchy. No transfers between Level 1, Level 2, and Level 3 fair value measurements occurred for the nine months ended June 30, 2025.
| Table 8.1: Fair Value Measurements | ||||
|---|---|---|---|---|
| As of June 30, 2025 | ||||
| Level 1 | Level 2 | Level 3 | Balance | |
| (in thousands) | ||||
| Assets: | ||||
| Deferred compensation assets - Rabbi Trust | $38,141 | $— | $— | $38,141 |
| Interest rate swap - $375 million notional value | — | 7,984 | — | 7,984 |
| Total assets | $38,141 | $7,984 | $— | $46,125 |
| Liabilities: | ||||
| Interest rate swap - $525 million notional value | $— | $1,074 | $— | $1,074 |
| Indemnification liabilities | — | — | 11,048 | 11,048 |
| Total liabilities | $— | $1,074 | $11,048 | $12,122 |
The fair values of receivables, prepaid assets, other assets, accounts payable, accrued costs, and other current liabilities approximate the carrying values as a result of the short-term nature of these instruments. The carrying value of our debt is consistent with the fair value as the stated interest rates in the agreements are consistent with the current market rates used in notes with similar terms in the markets (Level 2 inputs).
Accumulated Other Comprehensive Loss
All amounts recorded in accumulated other comprehensive loss are related to our foreign currency translations and interest rate swaps, net of tax. The following table shows changes in accumulated other comprehensive loss. Amounts reclassified from other comprehensive income were recorded within our selling, general, and administrative expenses (for foreign currency translation adjustments) and within interest expense (for gains on derivatives).
| Table 8.2: Details of Changes in Accumulated Other Comprehensive Loss by Category | |||
|---|---|---|---|
| Foreign currency translation adjustment | Net unrealized gain on derivatives, net of tax | Total | |
| (in thousands) | |||
| Balance as of September 30, 2024 | $(39,225) | $6,765 | $(32,460) |
| Other comprehensive income before reclassifications | 231 | 4,784 | 5,015 |
| Amounts reclassified from accumulated other comprehensive loss | 21,272 | (6,456) | 14,816 |
| Net current period other comprehensive income/(loss) | 21,503 | (1,672) | 19,831 |
| Balance as of June 30, 2025 | $(17,722) | $5,093 | $(12,629) |
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