MAXIMUS, INC.MMS
MAXIMUS, INC. Fair Value Disclosure
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 to manage our interest rate exposure. 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 tables below present 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 year ended September 30, 2025.
| Table 9.1: Fair Value Measurements | |||||||||||||||||||||||
| As of September 30, 2025 | |||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Balance | ||||||||||||||||||||
| (in thousands) | |||||||||||||||||||||||
| Assets: | |||||||||||||||||||||||
| Deferred compensation assets - Rabbi Trust | $ | 40,595 | $ | — | $ | — | $ | 40,595 | |||||||||||||||
Interest rate swaps - $450 million notional value | — | 5,545 | — | 5,545 | |||||||||||||||||||
| Total assets | $ | 40,595 | $ | 5,545 | $ | — | $ | 46,140 | |||||||||||||||
| Liabilities: | |||||||||||||||||||||||
Interest rate swaps - $500 million notional value | $ | — | $ | 1,693 | $ | — | $ | 1,693 | |||||||||||||||
| Indemnification liabilities | — | — | 11,342 | 11,342 | |||||||||||||||||||
| Total liabilities | $ | — | $ | 1,693 | $ | 11,342 | $ | 13,035 | |||||||||||||||
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 9.2: 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, 2022 | $ | (57,109) | $ | 23,148 | $ | (33,961) | |||||||||||
| Other comprehensive income/(loss) before reclassifications | 6,509 | 8,558 | 15,067 | ||||||||||||||
| Amounts reclassified from accumulated other comprehensive income/(loss) | 116 | (8,837) | (8,721) | ||||||||||||||
| Net current period other comprehensive income/(loss) | 6,625 | (279) | 6,346 | ||||||||||||||
| Balance as of September 30, 2023 | (50,484) | 22,869 | (27,615) | ||||||||||||||
| Other comprehensive income/(loss) before reclassifications | 11,126 | (3,681) | 7,445 | ||||||||||||||
| Amounts reclassified from accumulated other comprehensive income/(loss) | 133 | (12,423) | (12,290) | ||||||||||||||
| Net current period other comprehensive income/(loss) | 11,259 | (16,104) | (4,845) | ||||||||||||||
| Balance as of September 30, 2024 | (39,225) | 6,765 | (32,460) | ||||||||||||||
| Other comprehensive income/(loss) before reclassifications | (2,753) | 4,561 | 1,808 | ||||||||||||||
| Amounts reclassified from accumulated other comprehensive income/(loss) | 21,272 | (8,487) | 12,785 | ||||||||||||||
| Net current period other comprehensive income/(loss) | 18,519 | (3,926) | 14,593 | ||||||||||||||
| Balance as of September 30, 2025 | $ | (20,706) | $ | 2,839 | $ | (17,867) | |||||||||||
The foreign currency translation adjustment reflects a cumulative difference between the value of our earnings in currencies other than the U.S. Dollar between the time they were recorded and the date of the financial statements. As of September 30, 2025, the balance included approximately $12.6 million of translation differences related to the British Pound, and $7.6 million related to the Canadian Dollar.
Other assets
Other long-lived assets are reviewed when events indicate they may no longer be able to recover their value. Assets that we cease using or which do not appear able to generate sufficient future cash flows to support their values are reviewed and, where necessary, their value is written down. In this instance, the expense is reported in the same place where future expenses were anticipated to be recorded. All the non-recurring fair values are considered Level 3 fair value measurements, as the inputs are not observable and based on internal assumptions. For the year ended September 30, 2023, we recorded impairment charges of $. These impairment charges were on our long-lived assets within our U.S. Services and Outside the U.S. Services Segments and related to assets on underperforming contracts. During the years ended September 30, 2025, and September 30, 2024, we recorded no impairment charges.Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Nov 20, 2025 | Showing above |
| 2024 | Nov 21, 2024 | |
| 2023 | Nov 16, 2023 | |
| 2022 | Nov 22, 2022 | |
| 2021 | Nov 18, 2021 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.