##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-K
 (Mark One)
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For the fiscal year ended June 30, 2005
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For the transition period from ___to ___
 Commission File Number 333-18221
 DOLLAR FINANCIAL GROUP, INC.
 (Exact Name of Registrant as Specified in Its Charter)
 New York
    
    13-2997911(State or Other Jurisdiction of
    
    (I.R.S. EmployerIncorporation or Organization)
    
    Identification No.)1436 Lancaster AvenueBerwyn, Pennsylvania
    
    19312-1288(Address of Principal Executive
    
    (Zip Code)Offices)
 Registrants telephone number, including area code (610) 296-3400
 Securities registered pursuant to Section 12(b) of the Act: None
 Securities registered pursuant to Section 12(g) of the Act: None
 þ o
 þ
 o þ
 o þ




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##### Table of Contents



(APPLICABLE ONLY TO CORPORATE REGISTRANTS)
  DOCUMENTS INCORPORATED BY REFERENCE
  2




---



DOLLAR FINANCIAL GROUP, INC.
 Table of Contents
 2005 Report on Form 10-K
 ® ® ®
 PART IItem 1. Business
    
    
    4Item 2. Properties
    
    
    22Item 3. Legal Proceedings
    
    
    22Item 4. Submission of Matters to a Vote of Security Holders
    
    
    25PART IIItem 5. Market for Registrants Common Equity, Related Stockholder Matters and
Issuer Purchases of Equity Securities
    
    
    26Item 6. Selected Financial Data
    
    
    27Item 7. Managements Discussion and Analysis of Financial Condition and
Results of Operations
    
    
    30Item 7A. Quantitative and Qualitative Disclosures About Market Risk
    
    
    42Item 8. Financial Statements and Supplementary Data
    
    
    43Item 9. Changes and Disagreements with Accountants on Accounting and Financial Disclosure
    
    
    81Item 9A. Controls and Procedures
    
    
    81Item 9B. Other Information
    
    
    81PART IIIItem 10. Directors and Executive Officers of the Registrant
    
    
    82Item 11. Executive Compensation
    
    
    82Item 12. Security Ownership of Certain Beneficial Owners and Management
    
    
    82Item 13. Certain Relationships and Related Transactions
    
    
    82Item 14. Principal Accountant Fees and Services
    
    
    82PART IVItem 15. Exhibits and Financial Statement Schedules
    
    
    83Signatures
    
    
    89CERTIFICATION OF CHIEF EXECUTIVE OFFICERCERTIFICATION OF PRESIDENTCERTIFICATION OF EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICERCERTIFICATION OF CHIEF EXECUTIVE OFFICER, PURSUANT TO SECTION 906CERTIFICATION OF PRESIDENT, PURSUANT TO SECTION 906CERTIFICATION OF EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER, PURSUANT TO SECTION 906PRESS RELEASE ISSUED BY DOLLAR FINANCIAL GROUP
  3




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##### Table of Contents



Item 1. BUSINESS
 General
    United States
 ® ® ®
  Canada
   United Kingdom
   4




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Industry Overview
    
    
    do not have sufficient assets to meet minimum balance requirements or to achieve the benefits of savings with banks;
    
    do not write enough checks to make a bank account beneficial;
    
    need access to financial services outside of normal banking hours;
    
    desire not to pay fees for banking services that they do not use;
    
    require immediate access to cash from their paychecks;
    
    may have a dislike or distrust of banks; and
    
    do not have a neighborhood bank in close proximity to them.
  
    
    their immediate need for cash;
    
    irregular receipt of payments from their employers;
    
    their desire for convenience and customer service; and
    
    the unavailability of bank loans in small denominations for short terms.
  5




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Growth Opportunities
  
    
    growth of the service-sector workforce;
    
    failure of commercial banks and other traditional financial service providers to adequately address the needs of lower and middle-income
individuals; and
    
    trends favoring larger operators in the industry.
  
    
    economies of scale available to larger operations;
    
    use of technology to serve customers better and to control large store networks;
    
    inability of smaller operators to form the alliances necessary to deliver new products; and
    
    increased licensing and regulatory burdens.
  Competitive Strengths
  Leading Position in Core Markets.
 
    
    Our domestic network is focused in rapidly growing markets in the
western United States, where we believe we
have held leading market positions for over 10 years.
    
    We believe that we are the industry leader in Canada, and we hold a
dominant market share with a store in almost every Canadian city with
a population of over 50,000. Based on a public opinion study of three
major metropolitan markets in English speaking Canada, we have achieved brand awareness of 85%.
    
    We are the largest check cashing company in the United Kingdom,
comprising nearly 25% of the market measured
by number of stores, although we believe that we account for 40% of
all check cashing transactions performed at
check cashing stores.
 6




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##### Table of Contents




    
    Our We The People stores comprise the largest network of retail-based legal document preparation services in
the United States.
 High-quality Customer Service.
 Diversified Product and Geographic Mix. ®
 Diversification and Management of Credit Risk.
 Management Expertise.
 Business Strategy
  Capitalizing on Our Enhanced Network and System Capabilities.
 Growing Through Disciplined Network Expansion.
 7




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##### Table of Contents



Maintaining our Customer-Driven Retail Philosophy.
 Introducing Related Products and Services. ® ®
 Expansion of Our Franchising Strategy.
 Customers
  U.S. Customers
   8




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Canadian Customers
  U.K. Customers
  Products and Services
 ®
 Check Cashing
  9




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##### Table of Contents



Year ended June 30,2001
    
    2002
    
    2003
    
    2004
    
    2005(Unaudited)Consolidated operations:Face amount of checks cashed
    
    $
    3,046,705,000
    
    
    $
    2,969,455,000
    
    
    $
    2,938,950,000
    
    
    $
    3,169,350,000
    
    
    $
    3,424,835,000Number of checks cashed
    
    
    9,001,635
    
    
    
    8,627,526
    
    
    
    8,568,944
    
    
    
    8,427,990
    
    
    
    8,141,697Average face amount per check
    
    $
    338.46
    
    
    $
    344.18
    
    
    $
    342.98
    
    
    $
    376.05
    
    
    $
    420.65Average fee per check
    
    $
    11.74
    
    
    $
    12.06
    
    
    $
    12.65
    
    
    $
    13.93
    
    
    $
    15.81Average fee as a % of face amount
    
    
    3.47
    %
    
    
    3.50
    %
    
    
    3.69
    %
    
    
    3.70
    %
    
    
    3.76
    %United States operations:Face amount of checks cashed
    
    $
    1,728,504,000
    
    
    $
    1,636,967,000
    
    
    $
    1,384,958,000
    
    
    $
    1,349,956,000
    
    
    $
    1,309,231,000Number of checks cashed
    
    
    4,485,393
    
    
    
    4,317,534
    
    
    
    3,855,664
    
    
    
    3,621,174
    
    
    
    3,379,123Average face amount per check
    
    $
    385.36
    
    
    $
    379.14
    
    
    $
    359.20
    
    
    $
    372.80
    
    
    $
    387.45Average fee per check
    
    $
    12.19
    
    
    $
    12.41
    
    
    $
    12.75
    
    
    $
    13.18
    
    
    $
    13.79Average fee as a % of face amount
    
    
    3.16
    %
    
    
    3.27
    %
    
    
    3.55
    %
    
    
    3.54
    %
    
    
    3.56
    %Canadian operations:Face amount of checks cashed
    
    $
    874,187,000
    
    
    $
    896,586,000
    
    
    $
    989,663,000
    
    
    $
    1,144,380,000
    
    
    $
    1,300,089,000Number of checks cashed
    
    
    3,445,858
    
    
    
    3,359,225
    
    
    
    3,475,201
    
    
    
    3,476,375
    
    
    
    3,529,879Average face amount per check
    
    $
    253.69
    
    
    $
    266.90
    
    
    $
    284.78
    
    
    $
    329.19
    
    
    $
    368.31Average fee per check
    
    $
    8.67
    
    
    $
    9.03
    
    
    $
    9.58
    
    
    $
    11.07
    
    
    $
    12.38Average fee as a % of face amount
    
    
    3.42
    %
    
    
    3.38
    %
    
    
    3.36
    %
    
    
    3.36
    %
    
    
    3.36
    %United Kingdom operations:Face amount of checks cashed
    
    $
    444,014,000
    
    
    $
    435,902,000
    
    
    $
    564,329,000
    
    
    $
    675,014,000
    
    
    $
    815,515,000Number of checks cashed
    
    
    1,070,384
    
    
    
    950,767
    
    
    
    1,238,079
    
    
    
    1,330,441
    
    
    
    1,232,695Average face amount per check
    
    $
    414.82
    
    
    $
    458.47
    
    
    $
    455.81
    
    
    $
    507.36
    
    
    $
    661.57Average fee per check
    
    $
    19.76
    
    
    $
    21.93
    
    
    $
    20.99
    
    
    $
    23.45
    
    
    $
    31.20Average fee as a % of face amount
    
    
    4.76
    %
    
    
    4.78
    %
    
    
    4.60
    %
    
    
    4.62
    %
    
    
    4.72
    %
   10




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##### Table of Contents



Year ended June 30,2001
    
    2002
    
    2003
    
    2004
    
    2005(Unaudited)Face amount of returned checks
    
    $
    27,938,000
    
    
    $
    27,874,000
    
    
    $
    26,164,000
    
    
    $
    29,061,000
    
    
    $
    32,893,000Collections on returned checks
    
    
    19,752,000
    
    
    
    20,812,000
    
    
    
    19,426,000
    
    
    
    21,399,000
    
    
    
    23,715,000Net write-offs of returned checks
    
    
    8,186,000
    
    
    
    7,062,000
    
    
    
    6,738,000
    
    
    
    7,662,000
    
    
    
    9,178,000Collections as a percentage of returned checks
    
    
    70.7
    %
    
    
    74.7
    %
    
    
    74.2
    %
    
    
    73.6
    %
    
    
    72.1
    %Net write-offs as a percentage of check
cashing revenues
    
    
    7.7
    %
    
    
    6.7
    %
    
    
    6.2
    %
    
    
    6.5
    %
    
    
    7.1
    %Net write-offs as a percentage of face amount
of checks cashed
    
    
    0.27
    %
    
    
    0.24
    %
    
    
    0.22
    %
    
    
    0.24
    %
    
    
    0.27
    %U.S. operations:Face amount of returned checks
    
    $
    14,519,000
    
    
    $
    15,411,000
    
    
    $
    12,046,000
    
    
    $
    13,761,000
    
    
    $
    14,749,000Collections on returned checks
    
    
    8,872,000
    
    
    
    10,560,000
    
    
    
    8,335,000
    
    
    
    10,284,000
    
    
    
    10,881,000Net write-offs of returned checks
    
    
    5,647,000
    
    
    
    4,851,000
    
    
    
    3,711,000
    
    
    
    3,477,000
    
    
    
    3,868,000Collections as a percentage of returned checks
    
    
    61.1
    %
    
    
    68.5
    %
    
    
    69.2
    %
    
    
    74.7
    %
    
    
    73.8
    %Net write-offs as a percentage of check
cashing revenues
    
    
    10.3
    %
    
    
    9.1
    %
    
    
    7.6
    %
    
    
    7.3
    %
    
    
    8.3
    %Net write-offs as a percentage of face amount
of checks cashed
    
    
    0.33
    %
    
    
    0.30
    %
    
    
    0.25
    %
    
    
    0.26
    %
    
    
    0.30
    %Canadian operations:Face amount of returned checks
    
    $
    7,356,000
    
    
    $
    6,952,000
    
    
    $
    8,116,000
    
    
    $
    8,797,000
    
    
    $
    10,155,000Collections on returned checks
    
    
    6,521,000
    
    
    
    6,452,000
    
    
    
    7,246,000
    
    
    
    7,320,000
    
    
    
    8,379,000Net write-offs of returned checks
    
    
    835,000
    
    
    
    500,000
    
    
    
    870,000
    
    
    
    1,477,000
    
    
    
    1,776,000Collections as a percentage of returned checks
    
    
    88.6
    %
    
    
    92.8
    %
    
    
    89.3
    %
    
    
    83.2
    %
    
    
    82.5
    %Net write-offs as a percentage of check
cashing revenues
    
    
    2.8
    %
    
    
    1.6
    %
    
    
    2.6
    %
    
    
    3.8
    %
    
    
    4.1
    %Net write-offs as a percentage of face amount
of checks cashed
    
    
    0.10
    %
    
    
    0.06
    %
    
    
    0.09
    %
    
    
    0.13
    %
    
    
    0.14
    %U.K. operations:Face amount of returned checks
    
    $
    6,063,000
    
    
    $
    5,511,000
    
    
    $
    6,002,000
    
    
    $
    6,503,000
    
    
    $
    7,989,000Collections on returned checks
    
    
    4,359,000
    
    
    
    3,800,000
    
    
    
    3,845,000
    
    
    
    3,795,000
    
    
    
    4,455,000Net write-offs of returned checks
    
    
    1,704,000
    
    
    
    1,711,000
    
    
    
    2,157,000
    
    
    
    2,708,000
    
    
    
    3,534,000Collections as a percentage of returned checks
    
    
    71.9
    %
    
    
    69.0
    %
    
    
    64.1
    %
    
    
    58.4
    %
    
    
    55.8
    %Net write-offs as a percentage of check
cashing revenues
    
    
    8.1
    %
    
    
    8.2
    %
    
    
    8.3
    %
    
    
    8.7
    %
    
    
    9.2
    %Net write-offs as a percentage of face amount
of checks cashed
    
    
    0.38
    %
    
    
    0.39
    %
    
    
    0.38
    %
    
    
    0.40
    %
    
    
    0.43
    %
 Consumer Lending
   11




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12




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Year endedJune 30,2003
    
    
    2004
    
    
    2005U.S. company-funded consumer loan originations (1)
    
    $
    81,085
    
    
    $
    65,868
    
    
    $
    73,762Canadian company-funded consumer loan originations (2)
    
    
    248,149
    
    
    
    309,016
    
    
    
    447,940U.K. company-funded consumer loan originations (2)
    
    
    99,499
    
    
    
    115,283
    
    
    
    173,326Total company-funded consumer loan originations
    
    $
    428,733
    
    
    $
    490,167
    
    
    $
    695,028U.S. Servicing revenues, net
    
    $
    41,175
    
    
    $
    47,144
    
    
    $
    52,350U.S. company-funded consumer loan revenues
    
    
    14,137
    
    
    
    9,873
    
    
    
    11,511Canadian company-funded consumer loan revenues
    
    
    22,492
    
    
    
    31,479
    
    
    
    48,682U.K. company-funded consumer loan revenues
    
    
    14,748
    
    
    
    19,404
    
    
    
    25,829Provision for loan losses on company-funded loans
    
    
    (9,967
    )
    
    
    (9,928
    )
    
    
    (14,793
    )Total consumer lending revenues, net
    
    $
    82,585
    
    
    $
    97,972
    
    
    $
    123,579Gross charge-offs of company-funded consumer loans
    
    $
    42,497
    
    
    $
    45,074
    
    
    $
    64,725Recoveries of company-funded consumer loans
    
    
    (32,105
    )
    
    
    (36,102
    )
    
    
    (50,352
    )Net charge-offs on company-funded consumer loans
    
    $
    10,392
    
    
    $
    8,972
    
    
    $
    14,373Gross charge-offs of company-funded consumer loans
as a percentage of total 
company-funded consumer loan
originations
    
    
    9.9
    %
    
    
    9.2
    %
    
    
    9.3
    %Recoveries of company-funded consumer loans as a
percentage of total company-funded consumer loan originations
    
    
    7.5
    %
    
    
    7.4
    %
    
    
    7.2
    %Net charge-offs on company-funded consumer loans
as a percentage of total 
company-funded consumer loan
originations
    
    
    2.4
    %
    
    
    1.8
    %
    
    
    2.1
    %
 
 (1)
    
    Our company-operated stores in the United States originate company-funded
and bank funded short-term consumer loans. Document transmitter locations in the United States
originated only bank funded loans.(2)
    
    All consumer loans originated in Canada and the United Kingdom are company-funded.  Other Services and Products
 ®
 13




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##### Table of Contents




    
    Money TransfersThrough a strategic alliance with Western Union,
customers can transfer funds to any location providing Western
Union money transfer services. Western Union currently has 212,000
agents in more than 195 countries throughout the world. We receive
a percentage of the commission charged by Western Union for the
transfer. For fiscal 2005, we generated total money transfer
revenues of $14.8 million, primarily at our check cashing stores.
    
    Money OrdersOur stores issue money orders for a minimal fee.
Customers who do not have checking accounts typically use money
orders to pay rent and utility bills. During fiscal 2005, money
order transactions had an average face amount of $182.81 million
and an average fee of $1.17. For fiscal 2005, our customers
purchased 2.1 million money orders, generating total money order
revenues of $2.4 million.
 14




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##### Table of Contents



Store Operations
 Locations
  June 30,Markets
    
    2001

    
    2002

    
    2003

    
    2004

    
    2005CALIFORNIASouthern
    
    
    47
    
    
    
    47
    
    
    
    47
    
    
    
    47
    
    
    
    47Northern
    
    
    95
    
    
    
    93
    
    
    
    91
    
    
    
    90
    
    
    
    90ARIZONAPhoenix
    
    
    40
    
    
    
    45
    
    
    
    43
    
    
    
    43
    
    
    
    51Tucson
    
    
    13
    
    
    
    16
    
    
    
    16
    
    
    
    16
    
    
    
    16OTHER UNITED STATESLouisiana
    
    
    4
    
    
    
    4
    
    
    
    4
    
    
    
    4
    
    
    
    29Ohio
    
    
    24
    
    
    
    23
    
    
    
    22
    
    
    
    22
    
    
    
    22Washington
    
    
    21
    
    
    
    18
    
    
    
    18
    
    
    
    18
    
    
    
    18Pennsylvania
    
    
    19
    
    
    
    19
    
    
    
    17
    
    
    
    17
    
    
    
    17Virginia
    
    
    16
    
    
    
    16
    
    
    
    16
    
    
    
    16
    
    
    
    16Oklahoma
    
    
    13
    
    
    
    13
    
    
    
    10
    
    
    
    10
    
    
    
    10Nevada
    
    
    11
    
    
    
    11
    
    
    
    8
    
    
    
    8
    
    
    
    8Colorado
    
    
    14
    
    
    
    15
    
    
    
    7
    
    
    
    7
    
    
    
    7Texas
    
    
    3
    
    
    
    4
    
    
    
    4
    
    
    
    4
    
    
    
    4Utah
    
    
    5
    
    
    
    5
    
    
    
    4
    
    
    
    4
    
    
    
    4New Mexico
    
    
    3
    
    
    
    3
    
    
    
    3
    
    
    
    3
    
    
    
    3Hawaii
    
    
    3
    
    
    
    3
    
    
    
    3
    
    
    
    3
    
    
    
    3Maryland/D.C.
    
    
    11
    
    
    
    10
    
    
    
    2
    
    
    
    1
    
    
    
    1Wisconsin
    
    
    1
    
    
    
    1
    
    
    
    1
    
    
    
    1
    
    
    
    1Oregon
    
    
    5
    
    
    
    5
    
    
    
    5
    
    
    
    5
    
    
    
    0Franchised locations
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    6WE THE PEOPLECompany operated
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    3Franchised locations
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    172CANADACompany operated
    
    
    157
    
    
    
    167
    
    
    
    181
    
    
    
    194
    
    
    
    214Franchised locations
    
    
    86
    
    
    
    87
    
    
    
    109
    
    
    
    117
    
    
    
    129UNITED KINGDOMCompany operated
    
    
    126
    
    
    
    123
    
    
    
    122
    
    
    
    125
    
    
    
    152Franchised locations
    
    
    261
    
    
    
    290
    
    
    
    351
    
    
    
    355
    
    
    
    312Total stores
    
    
    978
    
    
    
    1,018
    
    
    
    1,084
    
    
    
    1,110
    
    
    
    1,335
 15




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##### Table of Contents



Acquisitions
        Facilities and Hours of Operation
   Operational Structure
  16




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##### Table of Contents



Technology
   Security
    Advertising and Marketing
  17




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##### Table of Contents



Competition
       Regulation
  18




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##### Table of Contents



Regulation of Check Cashing
     Regulation of Consumer Lending
 ® ®
      19




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##### Table of Contents



Currency Reporting Regulation
   Regulation of Legal Document Preparation Services Business
  
    
    state laws which prohibit the unauthorized practice of law and state consumer protection laws which prohibit fraudulent, deceptive and
improper business practices generally; and
    
    Section 110 of the United States Bankruptcy Code.
  20




---



##### Table of Contents



Privacy Regulation
  Other Regulation
   Proprietary Rights
  Insurance Coverage
  Employees
   21




---



##### Table of Contents



Cautionary Statement for Purposes of the Safe Harbor Provisions of the Private Securities
Litigation Reform Act of 1995
  
    
    effectively compete in the financial services or legal document preparation services industries and
maintain our share of the market;
    
    manage risks inherent in an international operation, including foreign currency fluctuation;
    
    maintain our key banking relationships;
    
    sustain demand for our products and services;
    
    manage changes in applicable laws and regulations governing consumer protection and lending practices;
    
    manage our growth effectively;
    
    compete in light of technological advances; or
    
    safeguard against employee error and theft.
 
 Item 2. PROPERTIES
  Period Ending
    
    Number ofJune 30,
    
    Leases Expiring2006
    
    
    1182007 - 2010
    
    
    4812011 - 2015
    
    
    1092016 - 2020
    
    
    142021 - 2024
    
    
    1723
  2003
    
    2004
    
    2005Number of stores at beginning of period
    
    
    1,018
    
    
    
    1,084
    
    
    
    1,110New stores opened
    
    
    14
    
    
    
    14
    
    
    
    42Stores acquired
    
    
    5
    
    
    
    3
    
    
    
    51Stores closed
    
    
    (36
    )
    
    
    (3
    )
    
    
    (15
    )Net change in franchise stores
    
    
    83
    
    
    
    12
    
    
    
    147Number of stores at end of period
    
    
    1,084
    
    
    
    1,110
    
    
    
    1,335
 
 Item 3. LEGAL PROCEEDINGS
  22




---



##### Table of Contents



Canadian Legal Proceedings
   Young MacKinnon
       23




---



##### Table of Contents



California Legal Proceedings
 (Woods) (Castillo) (Chin) (Williams) Woods Williams Chin Castillo Woods
  We The People Legal Proceedings
      24




---



##### Table of Contents



ex parte
   
 Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  25




---



##### Table of Contents



PART II
 
 Item 5. MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF
EQUITY SECURITIES
 Market Information
  Period
    
    High
    
    
    LowJanuary 28, 2005 until March 31, 2005
    
    $
    17.06
    
    
    $
    10.57April 1, 2005 until June 30, 2005
    
    $
    13.00
    
    
    $
    8.50
 Holders
   Debt Securities
  Dividends
  26




---



##### Table of Contents



Item 6. SELECTED FINANCIAL DATA
  27




---



##### Table of Contents



Year ended June 30,2001(1)
    
    
    2002
    
    
    2003
    
    
    2004
    
    
    2005 (4)Statement of Operations Data:Revenues:Check Cashing
    
    $
    105,690
    
    
    $
    104,792
    
    
    $
    108,435
    
    
    $
    117,397
    
    
    $
    128,748Consumer lending:Fees from consumer lending
    
    
    78,653
    
    
    
    98,538
    
    
    
    107,580
    
    
    
    122,461
    
    
    
    153,304Provision for loan losses and
adjustment to servicing income
    
    
    (19,487
    )
    
    
    (27,913
    )
    
    
    (24,995
    )
    
    
    (24,489
    )
    
    
    (29,725
    )Consumer lending, net
    
    
    59,166
    
    
    
    70,625
    
    
    
    82,585
    
    
    
    97,972
    
    
    
    123,579Money transfer fees
    
    
    9,444
    
    
    
    10,098
    
    
    
    11,652
    
    
    
    13,032
    
    
    
    14,771Other
    
    
    21,199
    
    
    
    16,461
    
    
    
    16,716
    
    
    
    17,706
    
    
    
    24,468Total Revenues
    
    
    195,499
    
    
    
    201,976
    
    
    
    219,388
    
    
    
    246,107
    
    
    
    291,566Store and regional expenses:Salaries and benefits
    
    
    57,453
    
    
    
    65,295
    
    
    
    69,799
    
    
    
    76,008
    
    
    
    87,040Occupancy
    
    
    16,881
    
    
    
    18,087
    
    
    
    18,856
    
    
    
    19,805
    
    
    
    22,854Depreciation
    
    
    5,829
    
    
    
    6,522
    
    
    
    5,859
    
    
    
    6,546
    
    
    
    7,190Other
    
    
    45,321
    
    
    
    46,238
    
    
    
    47,766
    
    
    
    52,998
    
    
    
    60,982Total store and regional expenses
    
    
    125,484
    
    
    
    136,142
    
    
    
    142,280
    
    
    
    155,357
    
    
    
    178,066Corporate and other expenses:Establishment of reserves for new consumer
lending arrangements
    
    
    
    
    
    
    2,244
    
    
    
    
    
    
    
    
    
    
    
    Corporate expenses
    
    
    22,500
    
    
    
    24,516
    
    
    
    31,241
    
    
    
    32,813
    
    
    
    44,652Goodwill amortization(2)
    
    
    4,710
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other depreciation and amortization
    
    
    1,952
    
    
    
    2,709
    
    
    
    3,320
    
    
    
    3,286
    
    
    
    3,812Interest expense, net of interest income
    
    
    20,361
    
    
    
    18,694
    
    
    
    20,168
    
    
    
    25,303
    
    
    
    26,237Loss on extinguishment of debt
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,486
    
    
    
    Litigation settlement costs
    
    
    
    
    
    
    
    
    
    
    2,750
    
    
    
    
    
    
    
    Other
    
    
    926
    
    
    
    1,435
    
    
    
    3,987
    
    
    
    361
    
    
    
    154Income before income taxes
    
    
    19,566
    
    
    
    16,236
    
    
    
    15,642
    
    
    
    21,501
    
    
    
    38,645Income tax provision(3)
    
    
    12,876
    
    
    
    10,199
    
    
    
    13,511
    
    
    
    16,589
    
    
    
    19,986Net income
    
    $
    6,690
    
    
    $
    6,037
    
    
    $
    2,131
    
    
    $
    4,912
    
    
    $
    18,659Operating and Other Data:Net cash provided by (used in):Operating activities
    
    $
    16,442
    
    
    $
    14,453
    
    
    $
    3,832
    
    
    $
    20,372
    
    
    $
    35,879Investing activities
    
    $
    (32,365
    )
    
    $
    (10,108
    )
    
    $
    (10,679
    )
    
    $
    (8,619
    )
    
    $
    (44,807
    )Financing activities
    
    $
    15,602
    
    
    $
    9,409
    
    
    $
    (10,897
    )
    
    $
    (16,468
    )
    
    $
    29,591Stores in operation at end of period:Company-owned
    
    
    631
    
    
    
    641
    
    
    
    624
    
    
    
    638
    
    
    
    716Franchised stores and check cashing
merchants
    
    
    347
    
    
    
    377
    
    
    
    460
    
    
    
    472
    
    
    
    619Total
    
    
    978
    
    
    
    1,018
    
    
    
    1,084
    
    
    
    1,110
    
    
    
    1,335Check Cashing Data:Face amount of checks cashed
    
    $
    3,046,705,000
    
    
    $
    2,969,455,000
    
    
    $
    2,938,950,000
    
    
    $
    3,169,350,000
    
    
    $
    3,424,835,000Number of checks cashed
    
    
    9,001,635
    
    
    
    8,627,526
    
    
    
    8,568,944
    
    
    
    8,427,990
    
    
    
    8,141,697Average face amount per check
    
    $
    338.46
    
    
    $
    344.18
    
    
    $
    342.98
    
    
    $
    376.05
    
    
    $
    420.65Average fee per check
    
    $
    11.74
    
    
    $
    12.06
    
    
    $
    12.65
    
    
    $
    13.93
    
    
    $
    15.81Average fee as a % of face amount
    
    
    3.47
    %
    
    
    3.50
    %
    
    
    3.69
    %
    
    
    3.70
    %
    
    
    3.76
    %Balance Sheet Data (at end of period):Cash
    
    $
    72,452
    
    
    $
    86,633
    
    
    $
    71,805
    
    
    $
    69,266
    
    
    $
    92,500Total assets
    
    $
    276,544
    
    
    $
    292,480
    
    
    $
    298,289
    
    
    $
    321,924
    
    
    $
    387,974Total debt
    
    $
    197,136
    
    
    $
    208,191
    
    
    $
    198,970
    
    
    $
    241,281
    
    
    $
    271,764Shareholders equity
    
    $
    42,624
    
    
    $
    53,515
    
    
    $
    67,688
    
    
    $
    38,017
    
    
    $
    59,759
 (1)
    
    On August 1, 2000, we purchased all of the outstanding shares of West Coast Chequing
Centres, Ltd, which operated six stores in British Columbia. The aggregate purchase price
for this acquisition was $1.5 million and was funded through excess internal cash. The
excess price over the fair value of identifiable net assets acquired was $1.4 million. On
August 7, 2000, we purchased substantially all of the assets of Fast n Friendly Check
Cashing, which operated 8 stores in Maryland. The aggregate purchase price for this
acquisition was $700,000 and was funded through our domestic revolving credit facility.
The excess purchase price over fair value of identifiable net assets acquired was
$660,000. Additional consideration of $150,000 was subsequently paid based on a revenue
earn-out agreement. On August 28, 2000, we purchased primarily all of the assets of
Ram-Dur Enterprises, Inc. d/b/a AAA Check Cashing Centers, which operated five stores in
Tucson, Arizona. The aggregate purchase price for this acquisition was $1.3 million and
was funded through our domestic revolving credit facility. The excess purchase price over
fair value of identifiable net assets acquired was $1.2 million. On
 28




---



##### Table of Contents



December 5, 2000, we
purchased all of the outstanding shares of Fastcash Ltd., which operated 13 company-owned
stores and 27 franchises in the United Kingdom. The aggregate purchase price for this acquisition was $3.1
million and was funded through our now expired U.K. credit facility. The excess of the
purchase price over the fair value of the identifiable assets acquired was $2.7 million.
Additional consideration of $2.0 million was subsequently paid during fiscal 2003 based upon
a future results of operations earn-out agreement.(2)
    
    On July 1, 2001, we adopted Financial Accounting Standards Board Opinion No. 142
Goodwill and Other Intangible Assets. In accordance with the provisions of SFAS No. 142
we ceased amortization of goodwill.(3)
    
    As a result of our refinancing in November 2003, we no longer accrue United States
taxes on our foreign earnings. This results in a substantial reduction in our effective
tax rate. The amount of such tax was as follows:
 Year ended June 30,2001

    
    
    2002
    
    
    2003
    
    
    2004
    
    
    2005(dollars in thousands)$3,189
    
    
    
    $2,370
    
    
    
    $5,162
    
    
    
    $2,349
    
    
    
    $
 (4)
    
    On January 4, 2005 we acquired substantially all of the outstanding shares of
International Paper Converters Limited, d/b/a Cheque Changer Limited. The aggregate
purchase price for this acquisition was $2.7 million and was funded through excess
internal cash. The excess of the purchase price over the fair value of identifiable
assets acquired was $2.5 million. On January 31, 2005, we acquired substantially all of
the assets of Alexandria Financial Services, LLC and certain of its affiliates. The
aggregate purchase price for this acquisition was $9.9 million in cash, plus a maximum
revenue earn-out of up to $2.4 million payable January 31, 2006. Our revolving credit
facility was used to fund the purchase. The excess of the purchase price over the fair
value of identifiable assets acquired was $8.8 million. On March 7, 2005, we acquired
substantially all of the assets of We The People forms and Services Centers USA, Inc. The
aggregate purchase price for this acquisition was $14 million, consisting of $10.5 million
in cash, $2 million in unregistered shares of the Companys common stock and a $1.5
million escrow amount (25% of which is to be distributed on each of December 31, 2005,
March 31, 2006, June 30, 2006, and September 30, 2006) assuming to no indemnification
claims. In addition, we assumed $750,000 in liabilities and assumed approximately $3.3
million in refundable deposits related to certain franchise agreements. The excess of the
purchase price over the preliminary fair value of identifiable assets acquired was $16.8
million. On May 16, 2005, we acquired substantially all of the assets of Tenant Financial Enterprises, Inc.,
consisting of five financial services stores in Arizona. The aggregate purchase price for this
acquisition was $1.7 million in cash. The excess of the purchase price over the fair value of
identifiable assets acquired was $1.7 million. During fiscal year ending June 30, 2005, we
completed various other acquisitions resulting in an aggregate increase in goodwill of $2.1
million.
 29




---



##### Table of Contents



Item 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 Executive Summary
            Impact of Hurricane Katrina on our Operations
 30




---



##### Table of Contents



Discussion of Critical Accounting Policies
   Revenue Recognition
        31




---



##### Table of Contents



Company-Funded Consumer Loan Loss Reserves Policy
   Check Cashing Returned Item Policy
  Goodwill
  Income Taxes
  32




---



##### Table of Contents



Results of Operations
  Year ended June 30,2003
    
    
    2004
    
    
    2005Statement of Operations Data:Total revenues:Check cashing
    
    
    49.4
    %
    
    
    47.6
    %
    
    
    44.2
    %Consumer lending, net
    
    
    37.6
    %
    
    
    39.8
    %
    
    
    42.4
    %Money transfers
    
    
    5.3
    %
    
    
    5.3
    %
    
    
    5.1
    %Other
    
    
    7.7
    %
    
    
    7.3
    %
    
    
    8.3
    %Total revenues
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %U.S. revenues:Check cashing
    
    
    22.4
    %
    
    
    19.4
    %
    
    
    16.0
    %Consumer lending, net
    
    
    23.3
    %
    
    
    21.9
    %
    
    
    20.8
    %Money transfers
    
    
    2.2
    %
    
    
    1.8
    %
    
    
    1.5
    %Other
    
    
    2.5
    %
    
    
    1.4
    %
    
    
    2.2
    %Total U.S. revenues
    
    
    50.4
    %
    
    
    44.5
    %
    
    
    40.5
    %Canadian revenues:Check cashing
    
    
    15.1
    %
    
    
    15.6
    %
    
    
    15.0
    %Consumer lending, net
    
    
    8.8
    %
    
    
    11.6
    %
    
    
    14.7
    %Money transfers
    
    
    2.3
    %
    
    
    2.4
    %
    
    
    2.3
    %Other
    
    
    4.3
    %
    
    
    4.9
    %
    
    
    5.1
    %Total Canadian revenues
    
    
    30.5
    %
    
    
    34.5
    %
    
    
    37.1
    %United Kingdom revenues:Check cashing
    
    
    11.9
    %
    
    
    12.6
    %
    
    
    13.2
    %Consumer lending, net
    
    
    5.5
    %
    
    
    6.3
    %
    
    
    6.9
    %Money transfers
    
    
    0.8
    %
    
    
    1.1
    %
    
    
    1.3
    %Other
    
    
    0.9
    %
    
    
    1.0
    %
    
    
    1.0
    %Total United Kingdom revenues
    
    
    19.1
    %
    
    
    21.0
    %
    
    
    22.4
    %Store and regional expenses:Salaries and benefits
    
    
    31.8
    %
    
    
    30.8
    %
    
    
    29.9
    %Occupancy
    
    
    8.6
    %
    
    
    8.0
    %
    
    
    7.8
    %Depreciation
    
    
    2.7
    %
    
    
    2.7
    %
    
    
    2.5
    %Other
    
    
    21.8
    %
    
    
    21.7
    %
    
    
    20.9
    %Total store and regional expenses
    
    
    64.9
    %
    
    
    63.2
    %
    
    
    61.1
    %Corporate expenses
    
    
    14.2
    %
    
    
    13.3
    %
    
    
    15.3
    %Other depreciation and amortization
    
    
    1.5
    %
    
    
    1.3
    %
    
    
    1.3
    %Interest expense, net of interest income
    
    
    9.2
    %
    
    
    10.3
    %
    
    
    9.0
    %Loss on extinguishment of debt
    
    
    0.0
    %
    
    
    3.0
    %
    
    
    0.0
    %Litigation settlement costs
    
    
    1.3
    %
    
    
    0.0
    %
    
    
    0.0
    %Other
    
    
    1.8
    %
    
    
    0.1
    %
    
    
    0.1
    %Income before income taxes
    
    
    7.1
    %
    
    
    8.8
    %
    
    
    13.2
    %Income tax provision
    
    
    6.1
    %
    
    
    6.8
    %
    
    
    6.9
    %Net income
    
    
    1.0
    %
    
    
    2.0
    %
    
    
    6.3
    %
 33




---



##### Table of Contents



Year Ended June 30, 2005 Compared to the Year Ended June 30, 2004
 Revenues.
   Store and Regional Expenses.
 Corporate Expenses.
 Other Depreciation and Amortization.
 Loss on Extinguishment of Debt.
 34




---



##### Table of Contents



2004
    
    
    2005Call premiumDollar Financial Group, Inc. 10.875% Senior Notes
    
    $
    1.98
    
    
    $
    Dollar Financial Group, Inc. 10.875% Senior Subordinated Notes
    
    
    0.73
    
    
    
    Write-off of previously capitalized deferred issuance costs, net
    
    $
    4.50
    
    
    $
    Prepayment penalty on the extinguishment of collateralized borrowings
    
    
    0.28
    
    
    
    Loss on extinguishment of debt
    
    $
    7.49
    
    
    $
    
 Interest Expense
 Income Tax Provision.
 Year Ended June 30, 2004 Compared to the Year Ended June 30, 2003
 Revenues.
  35




---



##### Table of Contents



Store and Regional Expenses.
 Other.
 Other Depreciation and Amortization.
 Interest Expense.
 Loss
on Extinguishment of Debt.
 36




---



##### Table of Contents



Call Premium10.875% Senior Notes
    
    $
    2.010.875% Senior Subordinated Notes
    
    
    0.7Write-off of previously capitalized deferred issuance costs, net
    
    
    4.5Prepayment penalty on the extinguishment of collateralized borrowings
    
    
    0.3Loss on extinguishment of debt
    
    $
    7.5
 Litigation Settlement Costs.
 Income taxes.
 Seasonality
  37




---



##### Table of Contents



Balance Sheet Variations
 June 30, 2005 Compared to June 30, 2004
            38




---



##### Table of Contents



Liquidity and Capital Resources
        39




---



##### Table of Contents



Company-Funded Consumer Loans.
 Revolving Credit Facilities.
 Domestic Revolving Credit Facility
 Canadian Overdraft Facility
 Long-term Debt
 Operating Leases
  40




---



##### Table of Contents



Payments Due by Period (in thousands)Less than
    
    
    1 - 3
    
    
    4 - 5
    
    
    More thanTotal
    
    
    1 Year
    
    
    Years
    
    
    Years
    
    
    5 YearsLong-term debt obligations:9.75% Senior Notes due 2011(1)
    
    $
    271,764
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    271,764Capital lease obligations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Operating lease obligations
    
    
    77,641
    
    
    
    19,894
    
    
    
    31,715
    
    
    
    18,605
    
    
    
    7,427Purchase obligations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other
long-term liabilities reflected on the registrants balance sheet
under GAAP
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    $
    349,405
    
    
    $
    19,894
    
    
    $
    31,715
    
    
    $
    18,605
    
    
    $
    279,191
 
 (1)
    
    1,764 is the unamortized premium on the 9.75% Senior Notes due 2011.  Impact of Inflation
  Impact of Recent Accounting Pronouncement
 Share-Based Payments, Accounting for Stock-Based Compensation Accounting for Stock Issued to
Employees
 41




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##### Table of Contents



Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 Generally
  
    
    interest rates on borrowings under the domestic revolving credit agreement; and
    
    foreign exchange rates generating translation gains and losses.
  Interest Rate Risk
  Foreign Currency Exchange Rate Risk
    42




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##### Table of Contents



Item 8. FINANCIAL STATEMENTS
 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
    /s/ Ernst & Young LLP
 
 43




---



##### Table of Contents



DOLLAR FINANCIAL GROUP, INC.
 CONSOLIDATED BALANCE SHEETS
(In thousands except share amounts)
 June 30,2004
    
    
    2005ASSETSCash and cash equivalents
    
    $
    69,266
    
    
    $
    92,500Loans receivableLoans receivable
    
    
    32,902
    
    
    
    41,353Less: Allowance for loan losses
    
    
    (2,315
    )
    
    
    (2,707
    )Loans receivable, net
    
    
    30,587
    
    
    
    38,646Other consumer lending receivables
    
    
    7,404
    
    
    
    7,996Other receivables
    
    
    4,056
    
    
    
    4,123Income taxes receivable
    
    
    6,125
    
    
    
    1,053Prepaid expenses
    
    
    4,380
    
    
    
    6,858Deferred
income taxes, net of valuation allowance of $3,946 and $12,035
    
    
    
    
    
    
    71Notes and interest receivable  officers
    
    
    3,354
    
    
    
    Due from parent
    
    
    5,682
    
    
    
    398Property and equipment, net of accumulated depreciation
of $49,540 and $62,555
    
    
    27,965
    
    
    
    35,611Goodwill and other intangibles, net of accumulated
amortization of $22,449 and $23,079
    
    
    149,118
    
    
    
    186,190Debt issuance costs, net of accumulated amortization
of $987 and $2,633
    
    
    11,160
    
    
    
    10,558Other
    
    
    2,827
    
    
    
    3,970$
    321,924
    
    
    $
    387,974LIABILITIES AND SHAREHOLDERS EQUITYAccounts payable
    
    $
    15,863
    
    
    $
    23,807Foreign income tax payable
    
    
    5,979
    
    
    
    4,648Accrued expenses and other liabilities
    
    
    17,206
    
    
    
    22,353Accrued interest payable
    
    
    3,578
    
    
    
    3,291Deferred tax liability
    
    
    
    
    
    
    2,3529.75% Senior Notes due 2011
    
    
    241,176
    
    
    
    271,764Other long term debt
    
    
    105
    
    
    
    Shareholders equity:Common stock, $1 par value: 20,000 shares authorized; 100 shares
issued and outstanding at June 30, 2004 and June 30, 2005
    
    
    
    
    
    
    Additional paid-in capital
    
    
    21,617
    
    
    
    21,617Retained Earnings
    
    
    2,587
    
    
    
    17,636Accumulated other comprehensive income
    
    
    13,813
    
    
    
    20,506Total
shareholders equity
    
    
    38,017
    
    
    
    59,759$
    321,924
    
    
    $
    387,974
  44




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##### Table of Contents



DOLLAR FINANCIAL GROUP, INC.
 CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands)
 Year Ended June 30,2003
    
    
    2004
    
    
    2005Revenues:Check Cashing
    
    $
    108,435
    
    
    $
    117,397
    
    
    $
    128,748Consumer lending:Fees from consumer lending
    
    
    107,580
    
    
    
    122,461
    
    
    
    153,304Provision for loan losses and adjustment to servicing
income
    
    
    (24,995
    )
    
    
    (24,489
    )
    
    
    (29,725
    )Consumer lending, net
    
    
    82,585
    
    
    
    97,972
    
    
    
    123,579Money transfer fees
    
    
    11,652
    
    
    
    13,032
    
    
    
    14,771Other
    
    
    16,716
    
    
    
    17,706
    
    
    
    24,468Total revenues
    
    
    219,388
    
    
    
    246,107
    
    
    
    291,566Store and regional expenses:Salaries and benefits
    
    
    69,799
    
    
    
    76,008
    
    
    
    87,040Occupancy
    
    
    18,856
    
    
    
    19,805
    
    
    
    22,854Depreciation
    
    
    5,859
    
    
    
    6,546
    
    
    
    7,190Returned checks, net and cash shortages
    
    
    8,531
    
    
    
    9,132
    
    
    
    10,477Telephone and communications
    
    
    5,538
    
    
    
    5,665
    
    
    
    5,827Advertising
    
    
    5,899
    
    
    
    6,943
    
    
    
    8,421Bank charges
    
    
    3,138
    
    
    
    3,744
    
    
    
    3,960Armored carrier expenses
    
    
    2,873
    
    
    
    3,051
    
    
    
    3,660Other
    
    
    21,787
    
    
    
    24,463
    
    
    
    28,637Total store and regional expenses
    
    
    142,280
    
    
    
    155,357
    
    
    
    178,066Store and regional margin
    
    
    77,108
    
    
    
    90,750
    
    
    
    113,500Corporate and other expenses:Corporate expenses
    
    
    31,241
    
    
    
    32,813
    
    
    
    44,652Other depreciation and amortization
    
    
    3,320
    
    
    
    3,286
    
    
    
    3,812Interest expense, net of interest income of $173, $179, and $114
    
    
    20,168
    
    
    
    25,303
    
    
    
    26,237Loss on extinguishment of debt
    
    
    
    
    
    
    7,486
    
    
    
    Litigation settlement costs
    
    
    2,750
    
    
    
    
    
    
    
    Other
    
    
    3,987
    
    
    
    361
    
    
    
    154Income before income taxes
    
    
    15,642
    
    
    
    21,501
    
    
    
    38,645Income tax provision
    
    
    13,511
    
    
    
    16,589
    
    
    
    19,986Net income
    
    $
    2,131
    
    
    $
    4,912
    
    
    $
    18,659
  45




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##### Table of Contents



DOLLAR FINANCIAL GROUP, INC.
 CONSOLIDATED
STATEMENTS OF SHAREHOLDERS EQUITY
(In thousands, except share data)
 Accumulated
    
    
    TotalCommon Stock
    
    
    Additional
    
    
    
    
    
    
    Other
    
    
    ShareholdersOutstanding
    
    
    Paid-in
    
    
    Retained
    
    
    Comprehensive
    
    
    (Deficit)Shares
    
    
    Amount
    
    
    Capital
    
    
    Earnings
    
    
    (Loss) Income
    
    
    EquityBalance, June 30, 2002
    
    
    100
    
    
    $
    
    
    
    $
    50,957
    
    
    $
    6,903
    
    
    $
    (4,345
    )
    
    $
    53,515Comprehensive income:Foreign currency translation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    12,042
    
    
    
    12,042Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,131
    
    
    
    
    
    
    
    2,131Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,173Balance, June 30, 2003
    
    
    100
    
    
    
    
    
    
    
    50,957
    
    
    
    9,034
    
    
    
    7,697
    
    
    
    67,688Comprehensive incomeForeign currency translation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,116
    
    
    
    6,116Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,912
    
    
    
    
    
    
    
    4,912Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11,028Dividends paid to parent
    
    
    
    
    
    
    
    
    
    
    (29,340
    )
    
    
    (11,359
    )
    
    
    
    
    
    
    (40,699
    )Balance, June 30, 2004
    
    
    100
    
    
    
    
    
    
    
    21,617
    
    
    
    2,587
    
    
    
    13,813
    
    
    
    38,017Comprehensive income:Foreign currency translation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,729
    
    
    
    6,729Cash flow hedges
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (36
    )
    
    
    (36
    )Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    18,659
    
    
    
    
    
    
    
    18,659Total comprehensive income:
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    25,352Dividends paid to parent
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,610
    )
    
    
    
    
    
    
    (3,610
    )Balance, June 30, 2005
    
    
    100
    
    
    $
    
    
    
    $
    21,617
    
    
    $
    17,636
    
    
    $
    20,506
    
    
    $
    59,759
  46




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##### Table of Contents



DOLLAR FINANCIAL GROUP, INC.
 CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
 Year Ended June 30,2003
    
    
    2004
    
    
    2005Cash flows from operating activities:Net income
    
    $
    2,131
    
    
    $
    4,912
    
    
    $
    18,659Adjustments to reconcile net loss to net
cash provided by operating activities:Depreciation and amortization
    
    
    10,971
    
    
    
    11,570
    
    
    
    12,504Loss on extinguishment of debt
    
    
    
    
    
    
    7,486
    
    
    
    Losses on store closings and sales
    
    
    3,987
    
    
    
    187
    
    
    
    66Foreign currency (gain) loss on revaluation
of subordinated notes payable
    
    
    (398
    )
    
    
    (838
    )
    
    
    180Deferred tax (benefit) provision
    
    
    783
    
    
    
    (838
    )
    
    
    2,352Change in assets and liabilities (net of effect of acquisitions):Increase in loans and other receivables
    
    
    (9,602
    )
    
    
    (8,987
    )
    
    
    (3,555
    )(Increase) decrease in income taxes receivable
    
    
    (1,626
    )
    
    
    (1,801
    )
    
    
    5,072Decrease (increase) in prepaid expenses and other
    
    
    1,375
    
    
    
    (760
    )
    
    
    (4,039
    )(Decrease) increase in accounts payable, income taxes payable, accrued
expenses and other liabilities and accrued interest payable
    
    
    (3,789
    )
    
    
    9,441
    
    
    
    4,640Net cash provided by operating activities
    
    
    3,832
    
    
    
    20,372
    
    
    
    35,879Cash flows from investing activities:Acquisitions, net of cash acquired
    
    
    (3,251
    )
    
    
    (550
    )
    
    
    (29,950
    )Gross proceeds from sale of fixed assets
    
    
    
    
    
    
    81
    
    
    
    Additions to property and equipment
    
    
    (7,428
    )
    
    
    (8,150
    )
    
    
    (14,857
    )Net cash used in investing activities
    
    
    (10,679
    )
    
    
    (8,619
    )
    
    
    (44,807
    )Cash flows from financing activities:Redemption of 10.875% Senior Subordinated Notes due 2006
    
    
    
    
    
    
    (20,734
    )
    
    
    Redemption of collateralized borrowings
    
    
    
    
    
    
    (8,277
    )
    
    
    Other debt payments
    
    
    (3
    )
    
    
    (72
    )
    
    
    (106
    )Other collateralized borrowings
    
    
    8,000
    
    
    
    
    
    
    
    Issuance of 9.75% Senior Notes due 2011
    
    
    
    
    
    
    241,176
    
    
    
    30,750Redemption of 10.875% Senior Notes due 2006
    
    
    
    
    
    
    (111,170
    )
    
    
    Net decrease in revolving credit facilities
    
    
    (17,237
    )
    
    
    (61,699
    )
    
    
    Payment of debt issuance costs
    
    
    (690
    )
    
    
    (10,929
    )
    
    
    (727
    )Net (increase) decrease in due from parent
    
    
    (967
    )
    
    
    (4,064
    )
    
    
    3,284Dividend paid to parent
    
    
    
    
    
    
    (40,699
    )
    
    
    (3,610
    )Net cash (used in) provided by financing activities
    
    
    (10,897
    )
    
    
    (16,468
    )
    
    
    29,591Effect of exchange rate changes on cash and cash equivalents
    
    
    2,916
    
    
    
    2,176
    
    
    
    2,571Net (decrease) increase in cash and cash equivalents
    
    
    (14,828
    )
    
    
    (2,539
    )
    
    
    23,234Cash and cash equivalents at beginning of period
    
    
    86,633
    
    
    
    71,805
    
    
    
    69,266Cash and cash equivalents at end of period
    
    $
    71,805
    
    
    $
    69,266
    
    
    $
    92,500Supplemental disclosures of cash flow information:Interest paid
    
    $
    18,436
    
    
    $
    21,485
    
    
    $
    24,489Income taxes paid
    
    $
    14,548
    
    
    $
    13,858
    
    
    $
    15,820
  47




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##### Table of Contents



DOLLAR FINANCIAL GROUP, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 June 30, 2005
 1. Organization and Business
    2. Significant Accounting Policies
 Use of Estimates
  Principles of Consolidation
  Reclassification
  Revenue recognition
  48




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##### Table of Contents



DOLLAR FINANCIAL GROUP, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
 2. Significant Accounting Policies (continued)
        49




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##### Table of Contents



DOLLAR FINANCIAL GROUP, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
 2. Significant Accounting Policies (continued)
  Cash and Cash Equivalents
  Loans Receivable, Net
  Property and Equipment
  Intangible Assets
  Debt Issuance Costs
  Store and Regional Expenses
  50




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##### Table of Contents



DOLLAR FINANCIAL GROUP, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
 2. Significant Accounting Policies (continued)
 Company-Funded Consumer Loan Loss Reserves Policy
   Check Cashing Returned Item Policy
  Income Taxes
   Employees Retirement Plan
   Advertising Costs
  51




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##### Table of Contents



DOLLAR FINANCIAL GROUP, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
 2. Significant Accounting Policies (continued)
 Fair Value of Financial Instruments
  Derivatives
  Foreign Currency Translation and Transactions
  Stock Based Compensation Plan
  52




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##### Table of Contents



DOLLAR FINANCIAL GROUP, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
 2. Significant Accounting Policies (continued)
 Stock Based Compensation Plan (continued)
 Recent Accounting Pronouncement
 Share-Based
Payments, Accounting for Stock-Based Compensation Accounting for Stock Issued to Employees
 53




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##### Table of Contents



DOLLAR FINANCIAL GROUP, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
 3. Supplementary Cash Flow Information
 Non-cash transactions
  4. Stock Based Compensation Plan
     54




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##### Table of Contents



DOLLAR FINANCIAL GROUP, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
 4. Stock Based Compensation Plan (continued)
  Shares
    
    
    Price Per ShareOptions outstanding at June 30, 2002
(361,877 shares exercisable)
    
    
    613,830
    
    
    $
    5.81/$13.06Granted
    
    
    
    
    
    
    Exercised
    
    
    
    
    
    
    Forfeited
    
    
    (74,370
    )
    
    $
    5.81/$13.06Options outstanding at June 30, 2003
(435,137 shares exercisable)
    
    
    539,460
    
    
    $
    5.81/$13.06Granted
    
    
    301,920
    
    
    $
    10.09Exercised
    
    
    
    
    
    
    Forfeited
    
    
    (59,940
    )
    
    $
    5.81/$13.06Options outstanding at June 30, 2004
(466,200 shares exercisable)
    
    
    781,440
    
    
    $
    5.81/$10.09/$13.06Granted
    
    
    1,073,566
    
    
    $
    9.76-$16.00Exercised
    
    
    (11,100
    )
    
    $
    5.81Forfeited
    
    
    
    
    
    
    Options outstanding at June 30, 2005
(1,838,906 shares exercisable)
    
    
    1,843,906
    
    
    $
    5.81-$16.00
  Options Outstanding
    
    Options ExercisableWeighted AverageNumber
    
    Remaining
    
    NumberOutstanding at
    
    Contractual
    
    Exercisable atExercise Price
    
    June 30, 2005
    
    Life (Years)
    
    June 30, 2005$   5.81
    
    
    
    435,120
    
    
    
    3.6
    
    
    
    435,120$   9.76

    
    
    
    5,000
    
    
    
    9.8
    
    
    
    $ 10.09

    
    
    
    301,920
    
    
    
    8.5
    
    
    
    301,920$ 11.70

    
    
    
    534,283
    
    
    
    9.8
    
    
    
    534,283$ 13.06

    
    
    
    33,300
    
    
    
    5.4
    
    
    
    33,300$ 16.00

    
    
    
    534,283
    
    
    
    9.8
    
    
    
    534,2831,843,906
    
    
    
    8.0
    
    
    
    1,838,906
 55




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##### Table of Contents



DOLLAR FINANCIAL GROUP, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
 5. Property and Equipment
  June 30,2004
    
    
    2005Land
    
    $
    172
    
    
    $
    170Leasehold improvements
    
    
    24,982
    
    
    
    33,531Equipment and furniture
    
    
    52,351
    
    
    
    64,46577,505
    
    
    
    98,166Less: accumulated depreciation
    
    
    (49,540
    )
    
    
    (62,555
    )Property and equipment, net
    
    $
    27,965
    
    
    $
    35,611
  6. Debt
  June 30,2004
    
    20059.75% Senior Notes due November 13, 2011; interest
payable semi-annually on May 15 and November 15
    
    $
    241,176
    
    
    $
    271,764Other
    
    
    105
    
    
    
    $
    241,281
    
    
    $
    271,764
   56




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##### Table of Contents



DOLLAR FINANCIAL GROUP, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
 6. Debt (continued)
  Year
    
    Percentage2007
    
    
    104.875
    %2008
    
    
    102.438
    %2009 and thereafter
    
    
    100.000
    %
     57




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##### Table of Contents



DOLLAR FINANCIAL GROUP, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
 6. Debt (continued)
   7. Income Taxes
   Year Ended June 30,2003
    
    2004
    
    2005Federal:Current
    
    $
    (603
    )
    
    $
    2,196
    
    
    $
    (1,810
    )Deferred
    
    
    705
    
    
    
    (968
    )
    
    
    1,758102
    
    
    
    1,228
    
    
    
    (52
    )Foreign taxes:Current
    
    
    13,088
    
    
    
    15,232
    
    
    
    19,444Deferred
    
    
    
    
    
    
    
    
    
    
    59413,088
    
    
    
    15,232
    
    
    
    20,038State:Current
    
    
    243
    
    
    
    
    
    
    
    Deferred
    
    
    78
    
    
    
    129
    
    
    
    321
    
    
    
    129
    
    
    
    $
    13,511
    
    
    $
    16,589
    
    
    $
    19,986
  June 30,2004
    
    2005Deferred tax assets:Loss reserves
    
    $
    1,219
    
    
    $
    788Foreign withholding taxes
    
    
    6
    
    
    
    6Depreciation
    
    
    2,051
    
    
    
    2,340Accrued compensation
    
    
    1,130
    
    
    
    216Reserve for store closings
    
    
    215
    
    
    
    Other accrued expenses
    
    
    268
    
    
    
    221Net
operating loss carryforwards
    
    
    
    
    
    
    8,464Other
    
    
    85
    
    
    
    71Gross deferred tax assets
    
    
    4,974
    
    
    
    12,106Valuation allowance
    
    
    (3,946
    )
    
    
    (12,035
    )Deferred tax liabilities:Amortization and other temporary differences
    
    
    (1,028
    )
    
    
    (2,352
    )Net deferred tax asset (liability)
    
    $
    
    
    
    $
    (2,281
    )
 58




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##### Table of Contents



DOLLAR FINANCIAL GROUP, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
 7. Income Taxes (continued)
   Year Ended June 30,2003
    
    2004
    
    2005Tax provision at federal statutory state
    
    $
    5,475
    
    
    $
    7,523
    
    
    $
    13,525Add (deduct):Federal and State tax provision
    
    
    199
    
    
    
    
    
    
    
    (746
    )Canadian withholding
    
    
    
    
    
    
    
    
    
    
    (1,130
    )Foreign taxes
    
    
    2,419
    
    
    
    1,122
    
    
    
    452US tax on foreign earnings
    
    
    5,162
    
    
    
    2,349
    
    
    
    Canadian restructuring
    
    
    
    
    
    
    5,143
    
    
    
    Other permanent differences
    
    
    256
    
    
    
    452
    
    
    
    (204
    )Valuation allowance
    
    
    
    
    
    
    
    
    
    
    8,089Tax provision at effective tax rate
    
    $
    13,511
    
    
    $
    16,589
    
    
    $
    19,986
   59




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##### Table of Contents



DOLLAR FINANCIAL GROUP, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
 8. Loss on Extinguishment of Debt
   2004
    
    2005Call PremiumDollar Financial Group, Inc. 10.875% Senior Notes
    
    $
    1,980
    
    
    $
    Dollar Financial Group, Inc. 10.875% Senior Subordinated Notes
    
    
    733
    
    
    
    Write-off of original issue discount, netPrepayment penalty on the extinguishment of collateralized borrowings
    
    
    277
    
    
    
    Write-off of previously capitalized deferred issuance costs, net
    
    
    4,496
    
    
    
    $
    7,486
    
    
    $
    
 9. Commitments
   Year
    
    Amount2006
    
    $
    19,8942007
    
    
    17,3782008
    
    
    14,3372009
    
    
    11,2512010
    
    
    7,354Thereafter
    
    
    7,427$
    77,641
 60




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##### Table of Contents



DOLLAR FINANCIAL GROUP, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
 10. Acquisitions
       61




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##### Table of Contents



DOLLAR FINANCIAL GROUP, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
 10. Acquisitions (continued)
  IPC
    
    
    American
    
    
    WTP
    
    
    Tenant
    
    
    Other
    
    
    TotalPurchase Price
    
    $
    2.7
    
    
    $
    9.9
    
    
    $
    14.0
    
    
    $
    1.7
    
    
    $
    2.3
    
    
    $
    30.6Net Assets acquired:Purchased franchise
agreements
    
    
    
    
    
    
    
    
    
    
    (1.3
    )
    
    
    
    
    
    
    
    
    
    
    (1.3
    )Refundable deposits
    
    
    
    
    
    
    
    
    
    
    5.0
    
    
    
    
    
    
    
    
    
    
    
    5.0Other (assets) and liabilities
    
    
    (0.2
    )
    
    
    (0.8
    )
    
    
    1.2
    
    
    
    
    
    
    
    (0.2
    )
    
    
    Goodwill
    
    $
    2.5
    
    
    $
    9.1
    
    
    $
    18.9
    
    
    $
    1.7
    
    
    $
    2.1
    
    
    $
    34.3
  Fiscal
Year ended June 30,2004
    
    
2005(Unaudited - In thousands)Revenues
    
    $
    265,985
    
    
    $
    298,948Net Income (loss)
    
    $
    7,378
    
    
    $
    20,091
 11. Goodwill and Other Intangibles
  Fiscal Year Ending June 30,
    
    Amount(In thousands)2006
    
    $
    106.72007
    
    
    106.72008
    
    
    106.72009
    
    
    106.72010
    
    
    106.7Thereafter
    
    
    615.9$
    1,149.4
 62




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##### Table of Contents



DOLLAR FINANCIAL GROUP, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
 11. Goodwill and Other Intangibles (continued)
  June 30, 2004
    
    
    June 30, 2005Gross Carrying
    
    
    Accumulated
    
    
    Gross Carrying
    
    
    AccumulatedAmount
    
    
    Amortization
    
    
    Amount
    
    
    AmortizationNon-amortized intangible assets:Cost in excess of net assets acquired
    
    $
    169,115
    
    
    $
    20,016
    
    
    $
    205,572
    
    
    $
    20,532Amortized intangible assets:Covenants not to compete
    
    
    2,452
    
    
    
    2,433
    
    
    
    2,510
    
    
    
    2,510Franchise agreements
    
    
    
    
    
    
    
    
    
    
    1,187
    
    
    
    37-$
    2,452
    
    
    $
    2,433
    
    
    $
    3,697
    
    
    $
    2,547
  United
    
    
    
    
    
    
    UnitedStates
    
    
    Canada
    
    
    Kingdom
    
    
    TotalBalance at June 30, 2003
    
    $
    56,609
    
    
    $
    38,394
    
    
    $
    48,413
    
    
    $
    143,416Amortization of other intangibles
    
    
    (95
    )
    
    
    
    
    
    
    
    
    
    
    (95
    )Acquisitions
    
    
    
    
    
    
    
    
    
    
    550
    
    
    
    550Foreign currency translation adjustments
    
    
    
    
    
    
    427
    
    
    
    4,820
    
    
    
    5,247Balance at June 30, 2004
    
    
    56,514
    
    
    
    38,821
    
    
    
    53,783
    
    
    
    149,118Amortization of other intangibles
    
    
    (56
    )
    
    
    
    
    
    
    
    
    
    
    (56
    )Acquisitions
    
    
    31,077
    
    
    
    
    
    
    
    3,223
    
    
    
    34,300Foreign currency translation adjustments
    
    
    
    
    
    
    3,638
    
    
    
    (810
    )
    
    
    2,828Balance at June 30, 2005
    
    $
    87,535
    
    
    $
    42,459
    
    
    $
    56,196
    
    
    $
    186,190
 12. Contingent Liabilities
   Canadian Legal Proceedings
   63




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##### Table of Contents



DOLLAR FINANCIAL GROUP, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
 12. Contingent Liabilities (continued)
 Young MacKinnon
       64




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##### Table of Contents



DOLLAR FINANCIAL GROUP, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
 12. Contingent Liabilities (continued)
 California Legal Proceedings
 (Woods) (Castillo) (Chin) (Williams) Woods Williams Chin Castillo Woods
   65




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##### Table of Contents



DOLLAR FINANCIAL GROUP, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
 12. Contingent Liabilities (continued)
   ex parte
   13. Credit Risk
   66




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##### Table of Contents



DOLLAR FINANCIAL GROUP, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
 13. Credit Risk (continued)
      67




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##### Table of Contents



DOLLAR FINANCIAL GROUP, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
 13. Credit Risk (continued)
     Year ended June 30,2003
    
    
    2004
    
    
    2005Balance at beginning of year
    
    $
    1,694
    
    
    $
    1,344
    
    
    $
    2,315Provision charged to loan revenues
    
    
    9,967
    
    
    
    9,928
    
    
    
    14,793Foreign currency translation
    
    
    75
    
    
    
    15
    
    
    
    (28
    )Net Charge-offs
    
    
    (10,392
    )
    
    
    (8,972
    )
    
    
    (14,373
    )Balance at end of year
    
    $
    1,344
    
    
    $
    2,315
    
    
    $
    2,707
 68




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##### Table of Contents



DOLLAR FINANCIAL GROUP, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
 14. Geographic Segment Information
  United
    
    
    
    
    
    
    UnitedStates
    
    
    Canada
    
    
    Kingdom
    
    
    Total2003Identifiable assets
    
    $
    132,944
    
    
    $
    88,240
    
    
    $
    77,105
    
    
    $
    298,289Goodwill and other intangibles, net
    
    
    56,609
    
    
    
    38,394
    
    
    
    48,413
    
    
    
    143,416Sales to unaffiliated customers:Check cashing
    
    
    49,147
    
    
    
    33,301
    
    
    
    25,987
    
    
    
    108,435Consumer lending:Fees from consumer lending
    
    
    70,340
    
    
    
    22,492
    
    
    
    14,748
    
    
    
    107,580Provision for loan losses and adjustment
to servicing revenue
    
    
    (19,368
    )
    
    
    (3,247
    )
    
    
    (2,380
    )
    
    
    (24,995
    )Consumer lending, net
    
    
    50,972
    
    
    
    19,245
    
    
    
    12,368
    
    
    
    82,585Money transfers
    
    
    4,675
    
    
    
    5,143
    
    
    
    1,834
    
    
    
    11,652Other
    
    
    5,678
    
    
    
    9,334
    
    
    
    1,704
    
    
    
    16,716Total sales to unaffiliated customers
    
    
    110,472
    
    
    
    67,023
    
    
    
    41,893
    
    
    
    219,388Interest expense, net
    
    
    17,615
    
    
    
    (917
    )
    
    
    3,470
    
    
    
    20,168Depreciation and amortization
    
    
    5,377
    
    
    
    1,837
    
    
    
    1,965
    
    
    
    9,179(Loss) income before income taxes
    
    
    (18,688
    )
    
    
    26,058
    
    
    
    8,272
    
    
    
    15,642Income tax provision
    
    
    (1,262
    )
    
    
    12,069
    
    
    
    2,704
    
    
    
    13,5112004Identifiable assets
    
    $
    130,266
    
    
    $
    92,835
    
    
    $
    98,823
    
    
    $
    321,924Goodwill and other intangibles, net
    
    
    56,514
    
    
    
    38,821
    
    
    
    53,783
    
    
    
    149,118Sales to unaffiliated customers:Check cashing
    
    
    47,716
    
    
    
    38,483
    
    
    
    31,198
    
    
    
    117,397Consumer lending:Fees from consumer lending
    
    
    71,577
    
    
    
    31,479
    
    
    
    19,405
    
    
    
    122,461Provision for loan losses and adjustment
to servicing revenue
    
    
    (17,504
    )
    
    
    (3,001
    )
    
    
    (3,984
    )
    
    
    (24,489
    )Consumer lending, net
    
    
    54,073
    
    
    
    28,478
    
    
    
    15,421
    
    
    
    97,972Money transfers
    
    
    4,525
    
    
    
    5,775
    
    
    
    2,732
    
    
    
    13,032Other
    
    
    3,546
    
    
    
    11,730
    
    
    
    2,430
    
    
    
    17,706Total sales to unaffiliated customers
    
    
    109,860
    
    
    
    84,466
    
    
    
    51,781
    
    
    
    246,107Interest expense, net
    
    
    18,427
    
    
    
    2,492
    
    
    
    4,384
    
    
    
    25,303Depreciation and amortization
    
    
    5,220
    
    
    
    2,476
    
    
    
    2,136
    
    
    
    9,832(Loss) income before income taxes
    
    
    (17,801
    )
    
    
    27,418
    
    
    
    11,884
    
    
    
    21,501Income tax provision
    
    
    3,534
    
    
    
    10,111
    
    
    
    2,944
    
    
    
    16,589
 69




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##### Table of Contents



DOLLAR
FINANCIAL GROUP INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
 14. Geographic Segment Information (continued)
 United
    
    
    
    
    
    
    UnitedStates
    
    
    Canada
    
    
    Kingdom
    
    
    Total2005Identifiable assets
    
    $
    160,447
    
    
    $
    117,987
    
    
    $
    109,540
    
    
    $
    387,974Goodwill and other intangibles, net
    
    
    87,535
    
    
    
    42,459
    
    
    
    56,196
    
    
    
    186,190Sales to unaffiliated customers:Check cashing
    
    
    46,596
    
    
    
    43,686
    
    
    
    38,466
    
    
    
    128,748Consumer lending:Fees from consumer lending
    
    
    78,795
    
    
    
    48,680
    
    
    
    25,829
    
    
    
    153,304Provision for loan losses and adjustment
to servicing revenue
    
    
    (18,127
    )
    
    
    (5,819
    )
    
    
    (5,779
    )
    
    
    (29,725
    )Consumer lending, net
    
    
    60,668
    
    
    
    42,861
    
    
    
    20,050
    
    
    
    123,579Money transfers
    
    
    4,239
    
    
    
    6,845
    
    
    
    3,687
    
    
    
    14,771Other
    
    
    6,625
    
    
    
    14,832
    
    
    
    3,011
    
    
    
    24,468Total sales to unaffiliated customers
    
    
    118,128
    
    
    
    108,224
    
    
    
    65,214
    
    
    
    291,566Interest expense, net
    
    
    22,585
    
    
    
    650
    
    
    
    3,002
    
    
    
    26,237Depreciation and amortization
    
    
    5,739
    
    
    
    3,240
    
    
    
    2,023
    
    
    
    11,002(Loss) income before income taxes
    
    
    (16,036
    )
    
    
    38,251
    
    
    
    16,430
    
    
    
    38,645Income tax provision
    
    
    (52
    )
    
    
    15,172
    
    
    
    4,866
    
    
    
    19,986
 15. Related Party Transactions
     70




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##### Table of Contents



DOLLAR FINANCIAL GROUP, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
 16. Subsidiary Guarantor Financial Information
   
    
    rank equal in right of payment with all existing and future unsubordinated indebtedness of the
Guarantors;
    
    rank senior in right of payment to all existing and future subordinated indebtedness of the
Guarantors; and
    
    are effectively junior to any indebtedness of the Company, including indebtedness under the
Companys senior secured reducing revolving credit facility, that is either (1) secured by a lien
on the Collateral that is senior or prior to the second priority liens securing the Guarantees of
the notes or (2) secured by assets that are not part of the Collateral to the extent of the value of
the assets securing such indebtedness.
  71




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##### Table of Contents



DOLLAR FINANCIAL GROUP, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
 16. Consolidating Financial Statements (continued)
 (In thousands)
 Dollar
    
    
    
    
    
    SubsidiaryFinancial
    
    Subsidiary
    
    Non-Group, Inc.
    
    Guarantors
    
    Guarantors
    
    Eliminations
    
    ConsolidatedASSETSCash and cash equivalents
    
    $
    1,771
    
    
    $
    28,278
    
    
    $
    62,451
    
    
    $
    
    
    
    $
    92,500Loans receivableLoans receivable
    
    
    
    
    
    
    6,243
    
    
    
    35,110
    
    
    
    
    
    
    
    41,353Less: Allowance for loan losses
    
    
    
    
    
    
    (470
    )
    
    
    (2,237
    )
    
    
    
    
    
    
    (2,707
    )Loans receivable, net
    
    
    
    
    
    
    5,773
    
    
    
    32,873
    
    
    
    
    
    
    
    38,646Other consumer lending receivables
    
    
    7,996
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,996Other receivables
    
    
    92
    
    
    
    1,278
    
    
    
    2,969
    
    
    
    (216
    )
    
    
    4,123Income taxes receivable
    
    
    1,797
    
    
    
    
    
    
    
    
    
    
    
    (744
    )
    
    
    1,053Prepaid expenses
    
    
    2,258
    
    
    
    690
    
    
    
    3,910
    
    
    
    
    
    
    
    6,858Deferred tax asset
    
    
    
    
    
    
    
    
    
    
    71
    
    
    
    
    
    
    
    71Due from affiliates
    
    
    5,622
    
    
    
    48,271
    
    
    
    
    
    
    
    (53,893
    )
    
    
    Due from parent
    
    
    2,398
    
    
    
    
    
    
    
    
    
    
    
    (2,000
    )
    
    
    398Property and equipment, net
    
    
    3,625
    
    
    
    8,831
    
    
    
    23,155
    
    
    
    
    
    
    
    35,611Goodwill and other intangibles, net
    
    
    
    
    
    
    87,535
    
    
    
    98,655
    
    
    
    
    
    
    
    186,190Debt issuance costs, net
    
    
    10,558
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,558Investment in subsidiaries
    
    
    308,052
    
    
    
    9,801
    
    
    
    9,660
    
    
    
    (327,513
    )
    
    
    Other
    
    
    26
    
    
    
    501
    
    
    
    3,443
    
    
    
    
    
    
    
    3,970$
    344,195
    
    
    $
    190,958
    
    
    $
    237,187
    
    
    $
    (384,366
    )
    
    $
    387,974LIABILITIES AND SHAREHOLDERS EQUITYAccounts payable
    
    $
    2,399
    
    
    $
    9,450
    
    
    $
    11,958
    
    
    $
    
    
    
    $
    23,807Income taxes payable
    
    
    
    
    
    
    744
    
    
    
    
    
    
    
    (744
    )
    
    
    Foreign income taxes payable
    
    
    
    
    
    
    
    
    
    
    4,648
    
    
    
    
    
    
    
    4,648Accrued expenses and other liabilities
    
    
    5,954
    
    
    
    4,328
    
    
    
    12,071
    
    
    
    
    
    
    
    22,353Accrued interest payable
    
    
    3,291
    
    
    
    
    
    
    
    216
    
    
    
    (216
    )
    
    
    3,291Deferred tax liability
    
    
    1,028
    
    
    
    729
    
    
    
    595
    
    
    
    
    
    
    
    2,352Due to affiliates
    
    
    
    
    
    
    
    
    
    
    55,893
    
    
    
    (55,893
    )
    
    
    9.75% Senior Notes due 2011
    
    
    271,764
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    271,764284,436
    
    
    
    15,251
    
    
    
    85,381
    
    
    
    (56,853
    )
    
    
    328,215Shareholders equityCommon stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Additional paid in capital
    
    
    21,617
    
    
    
    83,309
    
    
    
    30,259
    
    
    
    (113,568
    )
    
    
    21,617Retained earnings
    
    
    17,636
    
    
    
    88,104
    
    
    
    106,410
    
    
    
    (194,514
    )
    
    
    17,636Accumulated other comprehensive income
    
    
    20,506
    
    
    
    4,294
    
    
    
    15,137
    
    
    
    (19,431
    )
    
    
    20,506Total
shareholders equity
    
    
    59,759
    
    
    
    175,707
    
    
    
    151,806
    
    
    
    (327,513
    )
    
    
    59,759$
    344,195
    
    
    $
    190,958
    
    
    $
    237,187
    
    
    $
    (384,366
    )
    
    $
    387,974
 72




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##### Table of Contents



DOLLAR FINANCIAL GROUP, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
 16. Consolidating Financial Statements (continued)
 (In thousands)
 Dollar
    
    
    
    
    
    SubsidiaryFinancial
    
    Subsidiary
    
    Non-Group, Inc.
    
    Guarantors
    
    Guarantors
    
    Eliminations
    
    ConsolidatedRevenues:Check cashing
    
    $
    
    
    
    $
    46,596
    
    
    $
    82,152
    
    
    $
    
    
    
    $
    128,748Consumer lending:Fees from consumer lending
    
    
    
    
    
    
    78,795
    
    
    
    74,509
    
    
    
    
    
    
    
    153,304Provision for loan losses and adjustment
to servicing income
    
    
    
    
    
    
    (18,127
    )
    
    
    (11,598
    )
    
    
    
    
    
    
    (29,725
    )Consumer lending, net
    
    
    
    
    
    
    60,668
    
    
    
    62,911
    
    
    
    
    
    
    
    123,579Money transfer fees
    
    
    
    
    
    
    4,239
    
    
    
    10,532
    
    
    
    
    
    
    
    14,771Other
    
    
    
    
    
    
    6,625
    
    
    
    17,843
    
    
    
    
    
    
    
    24,468Total revenues
    
    
    
    
    
    
    118,128
    
    
    
    173,438
    
    
    
    
    
    
    
    291,566Store and regional expenses:Salaries and benefits
    
    
    
    
    
    
    45,006
    
    
    
    42,034
    
    
    
    
    
    
    
    87,040Occupancy
    
    
    
    
    
    
    11,475
    
    
    
    11,379
    
    
    
    
    
    
    
    22,854Depreciation
    
    
    
    
    
    
    3,573
    
    
    
    3,617
    
    
    
    
    
    
    
    7,190Returned checks, net and cash shortages
    
    
    
    
    
    
    4,612
    
    
    
    5,865
    
    
    
    
    
    
    
    10,477Telephone and communications
    
    
    
    
    
    
    3,696
    
    
    
    2,131
    
    
    
    
    
    
    
    5,827Advertising
    
    
    
    
    
    
    3,789
    
    
    
    4,632
    
    
    
    
    
    
    
    8,421Bank charges
    
    
    
    
    
    
    1,939
    
    
    
    2,021
    
    
    
    
    
    
    
    3,960Armored carrier expenses
    
    
    
    
    
    
    1,499
    
    
    
    2,161
    
    
    
    
    
    
    
    3,660Other
    
    
    
    
    
    
    14,540
    
    
    
    14,097
    
    
    
    
    
    
    
    28,637Total store and regional expenses
    
    
    
    
    
    
    90,129
    
    
    
    87,937
    
    
    
    
    
    
    
    178,066Store and regional margin
    
    
    
    
    
    
    27,999
    
    
    
    85,501
    
    
    
    
    
    
    
    113,500Corporate and other expenses:Corporate expenses
    
    
    20,931
    
    
    
    180
    
    
    
    23,541
    
    
    
    
    
    
    
    44,652Management fee
    
    
    (11,892
    )
    
    
    10,125
    
    
    
    1,767
    
    
    
    
    
    
    
    Other depreciation and amortization
    
    
    2,106
    
    
    
    60
    
    
    
    1,646
    
    
    
    
    
    
    
    3,812Interest expense, net
    
    
    23,182
    
    
    
    (597
    )
    
    
    3,652
    
    
    
    
    
    
    
    26,237Other
    
    
    (81
    )
    
    
    21
    
    
    
    214
    
    
    
    
    
    
    
    154(Loss) income before income taxes
    
    
    (34,246
    )
    
    
    18,210
    
    
    
    54,681
    
    
    
    
    
    
    
    38,645Income tax (benefit) provision
    
    
    (9,566
    )
    
    
    9,514
    
    
    
    20,038
    
    
    
    
    
    
    
    19,986(Loss) income before equity in net income
of subsidiaries
    
    
    (24,680
    )
    
    
    8,696
    
    
    
    34,643
    
    
    
    
    
    
    
    18,659Equity in net income of subsidiariesDomestic subsidiary guarantors
    
    
    8,696
    
    
    
    
    
    
    
    
    
    
    
    (8,696
    )
    
    
    Foreign subsidiary non-guarantors
    
    
    34,643
    
    
    
    
    
    
    
    
    
    
    
    (34,643
    )
    
    
    Net income
    
    $
    18,659
    
    
    $
    8,696
    
    
    $
    34,643
    
    
    $
    (43,339
    )
    
    $
    18,659
 73




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##### Table of Contents



DOLLAR FINANCIAL GROUP, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
 16. Consolidating Financial Statements (continued)
 (In thousands)
 Dollar
    
    
    
    
    
    SubsidiaryFinancial
    
    Subsidiary
    
    Non-Group, Inc.
    
    Guarantors
    
    Guarantors
    
    Eliminations
    
    ConsolidatedCash flows from operating activities:Net income
    
    $
    18,659
    
    
    $
    8,696
    
    
    $
    34,643
    
    
    $
    (43,339
    )
    
    $
    18,659Adjustments to reconcile net (loss) income to net
cash (used in) provided by operating activitiesUndistributed income of subsidiaries
    
    
    (43,339
    )
    
    
    
    
    
    
    
    
    
    
    43,339
    
    
    
    Depreciation and amortization
    
    
    3,613
    
    
    
    3,626
    
    
    
    5,265
    
    
    
    
    
    
    
    12,504(Gain) loss on store closings and sales
    
    
    
    
    
    
    (155
    )
    
    
    221
    
    
    
    
    
    
    
    66Foreign currency loss on revaluation
subordinated notes payable
    
    
    
    
    
    
    180
    
    
    
    
    
    
    
    
    
    
    
    180Deferred tax provision
    
    
    1,028
    
    
    
    729
    
    
    
    595
    
    
    
    
    
    
    
    2,352Change in assets and liabilities (net of effect of acquisitions):Decrease (increase) in loans and other receivables
    
    
    3,696
    
    
    
    (920
    )
    
    
    (6,263
    )
    
    
    (68
    )
    
    
    (3,555
    )Decrease (increase) in income taxes receivable
    
    
    39,061
    
    
    
    
    
    
    
    6,117
    
    
    
    (40,106
    )
    
    
    5,072Increase in prepaid expenses and other
    
    
    (1,214
    )
    
    
    (264
    )
    
    
    (2,561
    )
    
    
    
    
    
    
    (4,039
    )Increase (decrease) in accounts payable, income taxes
payable, accrued expenses and other liabilities and
accrued interest payable
    
    
    4,112
    
    
    
    (40,273
    )
    
    
    627
    
    
    
    40,174
    
    
    
    4,640Net cash provided by (used in) operating activities
    
    
    25,616
    
    
    
    (28,381
    )
    
    
    38,644
    
    
    
    
    
    
    
    35,879Cash flows from investing activities:Acquisitions, net of cash acquired
    
    
    
    
    
    
    (25,881
    )
    
    
    (4,069
    )
    
    
    
    
    
    
    (29,950
    )Additions to property and equipment
    
    
    (852
    )
    
    
    (5,532
    )
    
    
    (8,473
    )
    
    
    
    
    
    
    (14,857
    )Net decrease in due from affiliates
    
    
    
    
    
    
    65,890
    
    
    
    
    
    
    
    (65,890
    )
    
    
    Net cash (used in) provided by investing activities
    
    
    (852
    )
    
    
    34,477
    
    
    
    (12,542
    )
    
    
    (65,890
    )
    
    
    (44,807
    )Cash flows from financing activities:Other debt payments
    
    
    (93
    )
    
    
    
    
    
    
    (13
    )
    
    
    
    
    
    
    (106
    )Issuance of 9 3/4% Senior Notes due 2011
    
    
    30,750
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    30,750Payment of debt issuance costs
    
    
    (727
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (727
    )Net decrease due from parent
    
    
    3,284
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,284Net decrease in due to affiliates
    
    
    (57,539
    )
    
    
    
    
    
    
    (8,351
    )
    
    
    65,890
    
    
    
    Dividend paid to parent
    
    
    (3,610
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,610
    )Net cash used in financing activities
    
    
    (27,935
    )
    
    
    
    
    
    
    (8,364
    )
    
    
    65,890
    
    
    
    29,591Effect of exchange rate changes on cash and cash equivalents
    
    
    
    
    
    
    
    
    
    
    2,571
    
    
    
    
    
    
    
    2,571Net (decrease) increase in cash and cash equivalents
    
    
    (3,171
    )
    
    
    6,096
    
    
    
    20,309
    
    
    
    
    
    
    
    23,234Cash and cash equivalents at beginning of period
    
    
    4,942
    
    
    
    22,182
    
    
    
    42,142
    
    
    
    
    
    
    
    69,266Cash and cash equivalents at end of period
    
    $
    1,771
    
    
    $
    28,278
    
    
    $
    62,451
    
    
    $
    
    
    
    $
    92,500
 74




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##### Table of Contents



DOLLAR FINANCIAL GROUP, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
 16. Consolidating Financial Statements (continued)
 (In thousands)
 Dollar
    
    
    
    
    
    SubsidiaryFinancial
    
    Subsidiary
    
    Non-Group, Inc.
    
    Guarantors
    
    Guarantors
    
    Eliminations
    
    ConsolidatedASSETSCash and cash equivalents
    
    $
    4,942
    
    
    $
    22,182
    
    
    $
    42,142
    
    
    $
    
    
    
    $
    69,266Loans receivableLoans receivable
    
    
    
    
    
    
    4,838
    
    
    
    28,064
    
    
    
    
    
    
    
    32,902Less: Allowance for loan losses
    
    
    
    
    
    
    (694
    )
    
    
    (1,621
    )
    
    
    
    
    
    
    (2,315
    )Loans receivable, net
    
    
    
    
    
    
    4,144
    
    
    
    26,443
    
    
    
    
    
    
    
    30,587Other consumer lending receivables
    
    
    7,274
    
    
    
    130
    
    
    
    
    
    
    
    
    
    
    
    7,404Other receivables
    
    
    1,156
    
    
    
    824
    
    
    
    2,360
    
    
    
    (284
    )
    
    
    4,056Income taxes receivable
    
    
    40,858
    
    
    
    
    
    
    
    6,117
    
    
    
    (40,850
    )
    
    
    6,125Prepaid expenses
    
    
    1,041
    
    
    
    731
    
    
    
    2,608
    
    
    
    
    
    
    
    4,380Notes and interest receivable-officers
    
    
    3,354
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,354Due from affiliates
    
    
    
    
    
    
    117,472
    
    
    
    
    
    
    
    (117,472
    )
    
    
    Due from parent
    
    
    5,682
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,682Property and equipment, net
    
    
    4,702
    
    
    
    6,255
    
    
    
    17,008
    
    
    
    
    
    
    
    27,965Goodwill and other intangibles, net
    
    
    
    
    
    
    56,514
    
    
    
    92,604
    
    
    
    
    
    
    
    149,118Debt issuance costs, net
    
    
    11,160
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11,160Investment in subsidiaries
    
    
    259,437
    
    
    
    9,801
    
    
    
    6,705
    
    
    
    (275,943
    )
    
    
    Other
    
    
    29
    
    
    
    422
    
    
    
    2,376
    
    
    
    
    
    
    
    2,827$
    339,635
    
    
    $
    218,475
    
    
    $
    198,363
    
    
    $
    (434,549
    )
    
    $
    321,924LIABILITIES AND SHAREHOLDERS EQUITYAccounts payable
    
    $
    408
    
    
    $
    6,058
    
    
    $
    9,397
    
    
    $
    
    
    
    $
    15,863Income taxes payable
    
    
    
    
    
    
    40,850
    
    
    
    
    
    
    
    (40,850
    )
    
    
    Foreign income taxes payable
    
    
    
    
    
    
    
    
    
    
    5,979
    
    
    
    
    
    
    
    5,979Accrued expenses and other liabilities
    
    
    3,286
    
    
    
    3,772
    
    
    
    10,148
    
    
    
    
    
    
    
    17,206Accrued interest payable
    
    
    2,974
    
    
    
    
    
    
    
    888
    
    
    
    (284
    )
    
    
    3,578Due to affiliate
    
    
    53,681
    
    
    
    
    
    
    
    63,791
    
    
    
    (117,472
    )
    
    
    9.75% Senior Notes due 2011
    
    
    241,176
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    241,176Other long-term debt
    
    
    93
    
    
    
    
    
    
    
    12
    
    
    
    
    
    
    
    105301,618
    
    
    
    50,680
    
    
    
    90,215
    
    
    
    (158,606
    )
    
    
    283,907Shareholders equityCommon stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Additional paid in capital
    
    
    21,617
    
    
    
    83,309
    
    
    
    27,304
    
    
    
    (110,613
    )
    
    
    21,617Retained earnings
    
    
    2,587
    
    
    
    79,409
    
    
    
    71,767
    
    
    
    (151,176
    )
    
    
    2,587Accumulated other comprehensive income
    
    
    13,813
    
    
    
    5,077
    
    
    
    9,077
    
    
    
    (14,154
    )
    
    
    13,813Total
shareholders equity
    
    
    38,017
    
    
    
    167,795
    
    
    
    108,148
    
    
    
    (275,943
    )
    
    
    38,017$
    339,635
    
    
    $
    218,475
    
    
    $
    198,363
    
    
    $
    (434,549
    )
    
    $
    321,924
 75




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##### Table of Contents



DOLLAR FINANCIAL GROUP, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
 16. Consolidating Financial Statements (continued)
 (In thousands)
 Dollar
    
    
    
    
    
    SubsidiaryFinancial
    
    Subsidiary
    
    Non-Group, Inc.
    
    Guarantors
    
    Guarantors
    
    Eliminations
    
    ConsolidatedRevenues:Check cashing
    
    $
    
    
    
    $
    47,717
    
    
    $
    69,680
    
    
    $
    
    
    
    $
    117,397Consumer lending:Fees from consumer lending
    
    
    
    
    
    
    71,577
    
    
    
    50,884
    
    
    
    
    
    
    
    122,461Provision for loan losses and adjustment
to servicing income
    
    
    
    
    
    
    (17,505
    )
    
    
    (6,984
    )
    
    
    
    
    
    
    (24,489
    )Consumer lending, net
    
    
    
    
    
    
    54,072
    
    
    
    43,900
    
    
    
    
    
    
    
    97,972Money transfer fees
    
    
    
    
    
    
    4,525
    
    
    
    8,507
    
    
    
    
    
    
    
    13,032Other
    
    
    
    
    
    
    3,546
    
    
    
    14,160
    
    
    
    
    
    
    
    17,706Total revenues
    
    
    
    
    
    
    109,860
    
    
    
    136,247
    
    
    
    
    
    
    
    246,107Store and regional expenses:Salaries and benefits
    
    
    
    
    
    
    41,510
    
    
    
    34,498
    
    
    
    
    
    
    
    76,008Occupancy
    
    
    
    
    
    
    10,988
    
    
    
    8,817
    
    
    
    
    
    
    
    19,805Depreciation
    
    
    
    
    
    
    3,458
    
    
    
    3,088
    
    
    
    
    
    
    
    6,546Returned checks, net and cash shortages
    
    
    
    
    
    
    4,275
    
    
    
    4,857
    
    
    
    
    
    
    
    9,132Telephone and communications
    
    
    
    
    
    
    3,756
    
    
    
    1,909
    
    
    
    
    
    
    
    5,665Advertising
    
    
    
    
    
    
    3,778
    
    
    
    3,165
    
    
    
    
    
    
    
    6,943Bank charges
    
    
    
    
    
    
    2,140
    
    
    
    1,604
    
    
    
    
    
    
    
    3,744Armored carrier expenses
    
    
    
    
    
    
    1,381
    
    
    
    1,670
    
    
    
    
    
    
    
    3,051Other
    
    
    
    
    
    
    12,739
    
    
    
    11,724
    
    
    
    
    
    
    
    24,463Total store and regional expenses
    
    
    
    
    
    
    84,025
    
    
    
    71,332
    
    
    
    
    
    
    
    155,357Store and regional margin
    
    
    
    
    
    
    25,835
    
    
    
    64,915
    
    
    
    
    
    
    
    90,750Corporate and other expenses:Corporate expenses
    
    
    16,625
    
    
    
    (2
    )
    
    
    16,190
    
    
    
    
    
    
    
    32,813Management fee
    
    
    (709
    )
    
    
    
    
    
    
    709
    
    
    
    
    
    
    
    Other depreciation and amortization
    
    
    1,723
    
    
    
    39
    
    
    
    1,524
    
    
    
    
    
    
    
    3,286Interest expense, net
    
    
    20,311
    
    
    
    (1,883
    )
    
    
    6,875
    
    
    
    
    
    
    
    25,303Loss on extinguishment of debt
    
    
    7,209
    
    
    
    
    
    
    
    277
    
    
    
    
    
    
    
    7,486Other
    
    
    296
    
    
    
    29
    
    
    
    36
    
    
    
    
    
    
    
    361(Loss) income before income taxes
    
    
    (45,455
    )
    
    
    27,652
    
    
    
    39,304
    
    
    
    
    
    
    
    21,501Income tax provision
    
    
    (17,279
    )
    
    
    20,814
    
    
    
    13,054
    
    
    
    
    
    
    
    16,589(Loss) income before equity in net income
of subsidiaries
    
    
    (28,176
    )
    
    
    6,838
    
    
    
    26,250
    
    
    
    
    
    
    
    4,912Equity in net income of subsidiariesDomestic subsidiary guarantors
    
    
    6,838
    
    
    
    
    
    
    
    
    
    
    
    (6,838
    )
    
    
    Foreign subsidiary non-guarantors
    
    
    26,250
    
    
    
    
    
    
    
    
    
    
    
    (26,250
    )
    
    
    Net income
    
    $
    4,912
    
    
    $
    6,838
    
    
    $
    26,250
    
    
    $
    (33,088
    )
    
    $
    4,912
 76




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##### Table of Contents



DOLLAR FINANCIAL GROUP, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
 16. Consolidating Financial Statements (continued)
 (In thousands)
 Dollar
    
    
    
    
    
    SubsidiaryFinancial
    
    Subsidiary
    
    Non-Group, Inc.
    
    Guarantors
    
    Guarantors
    
    Eliminations
    
    ConsolidatedCash flows from operating activities:Net income
    
    $
    4,912
    
    
    $
    6,838
    
    
    $
    26,250
    
    
    $
    (33,088
    )
    
    $
    4,912Adjustments to reconcile net (loss) income to net
cash (used in) provided by operating activities:Undistributed income of subsidiary
    
    
    (33,088
    )
    
    
    
    
    
    
    
    
    
    
    33,088
    
    
    
    Depreciation and amortization
    
    
    3,272
    
    
    
    3,502
    
    
    
    4,796
    
    
    
    
    
    
    
    11,570Loss on extinguishment of debt
    
    
    7,209
    
    
    
    
    
    
    
    277
    
    
    
    
    
    
    
    7,486Losses on store closings and sales
    
    
    120
    
    
    
    30
    
    
    
    37
    
    
    
    
    
    
    
    187Foreign currency gain on revaluation of
subordinated notes payable
    
    
    
    
    
    
    
    
    
    
    (838
    )
    
    
    
    
    
    
    (838
    )Deferred tax provision
    
    
    1,064
    
    
    
    (1,902
    )
    
    
    
    
    
    
    
    
    
    
    (838
    )Change in assets and liabilities (net of effect of acquisitions):Decrease (increase) in loans and other receivables
    
    
    977
    
    
    
    (1,942
    )
    
    
    (7,982
    )
    
    
    (40
    )
    
    
    (8,987
    )Increase in income taxes receivable
    
    
    (18,486
    )
    
    
    
    
    
    
    (5,836
    )
    
    
    22,521
    
    
    
    (1,801
    )(Increase) decrease in prepaid expenses and other
    
    
    (205
    )
    
    
    557
    
    
    
    (1,112
    )
    
    
    
    
    
    
    (760
    )Increase (decrease) in accounts payable, income taxes payable,
accrued expenses and other liabilities and accrued interest payable
    
    
    736
    
    
    
    21,792
    
    
    
    9,394
    
    
    
    (22,481
    )
    
    
    9,441Net cash (used in) provided by operating activities
    
    
    (33,489
    )
    
    
    28,875
    
    
    
    24,986
    
    
    
    
    
    
    
    20,372Cash flows from investing activities:Acquisitions, net of cash acquired
    
    
    
    
    
    
    
    
    
    
    (550
    )
    
    
    
    
    
    
    (550
    )Gross proceeds from sale of fixed assets
    
    
    
    
    
    
    
    
    
    
    81
    
    
    
    
    
    
    
    81Additions to property and equipment
    
    
    (481
    )
    
    
    (1,490
    )
    
    
    (6,179
    )
    
    
    
    
    
    
    (8,150
    )Net decrease in due from affiliates
    
    
    
    
    
    
    (31,416
    )
    
    
    
    
    
    
    31,416
    
    
    
    Net cash used in investing activities
    
    
    (481
    )
    
    
    (32,906
    )
    
    
    (6,648
    )
    
    
    31,416
    
    
    
    (8,619
    )Cash flows from financing activities:Redemption of subordinated notes
    
    
    (20,734
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (20,734
    )Redemption of collateralized borrowings
    
    
    
    
    
    
    
    
    
    
    (8,277
    )
    
    
    
    
    
    
    (8,277
    )Other debt borrowings (payments)
    
    
    93
    
    
    
    
    
    
    
    (165
    )
    
    
    
    
    
    
    (72
    )Issuance of 9.75% Senior Notes due 2011
    
    
    241,176
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    241,176Redemption of 10.875% Senior Notes due 2006
    
    
    (111,170
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (111,170
    )Net decrease in revolving credit facilities
    
    
    (60,764
    )
    
    
    
    
    
    
    (935
    )
    
    
    
    
    
    
    (61,699
    )Payment of debt issuance costs
    
    
    (10,929
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (10,929
    )Net decrease in due from parent
    
    
    (4,064
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,064
    )Net increase (decrease) in due to affiliates
    
    
    38,022
    
    
    
    
    
    
    
    (6,606
    )
    
    
    (31,416
    )
    
    
    Dividend paid to parent
    
    
    (40,699
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (40,699
    )Net cash provided by (used in) financing activities
    
    
    30,931
    
    
    
    
    
    
    
    (15,983
    )
    
    
    (31,416
    )
    
    
    (16,468
    )Effect of exchange rate changes on cash and cash equivalents
    
    
    
    
    
    
    
    
    
    
    2,176
    
    
    
    
    
    
    
    2,176Net (decrease) increase in cash and cash equivalents
    
    
    (3,039
    )
    
    
    (4,031
    )
    
    
    4,531
    
    
    
    
    
    
    
    (2,539
    )Cash and cash equivalents at beginning of period
    
    
    7,981
    
    
    
    26,213
    
    
    
    37,611
    
    
    
    
    
    
    
    71,805Cash and cash equivalents at beginning of period
    
    $
    4,942
    
    
    $
    22,182
    
    
    $
    42,142
    
    
    $
    
    
    
    $
    69,266
 77




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##### Table of Contents



DOLLAR FINANCIAL GROUP, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
 16. Consolidating Financial Statements (continued)
 (In thousands)
 Dollar
    
    
    
    
    
    SubsidiaryFinancial
    
    Subsidiary
    
    Non-Group, Inc.
    
    Guarantors
    
    Guarantors
    
    Eliminations
    
    ConsolidatedRevenues
    
    $
    
    
    
    $
    110,472
    
    
    $
    108,916
    
    
    $
    
    
    
    $
    219,388Store and regional expenses:Salaries and benefits
    
    
    
    
    
    
    41,520
    
    
    
    28,279
    
    
    
    
    
    
    
    69,799Occupancy
    
    
    
    
    
    
    11,130
    
    
    
    7,726
    
    
    
    
    
    
    
    18,856Depreciation
    
    
    
    
    
    
    3,255
    
    
    
    2,604
    
    
    
    
    
    
    
    5,859Other
    
    
    
    
    
    
    29,198
    
    
    
    18,568
    
    
    
    
    
    
    
    47,766Total store and regional expenses
    
    
    
    
    
    
    85,103
    
    
    
    57,177
    
    
    
    
    
    
    
    142,280Store and regional margin
    
    
    
    
    
    
    25,369
    
    
    
    51,739
    
    
    
    
    
    
    
    77,108Corporate and other expenses:Corporate expenses
    
    
    19,036
    
    
    
    23
    
    
    
    12,182
    
    
    
    
    
    
    
    31,241Management fees
    
    
    (9,159
    )
    
    
    7,779
    
    
    
    1,380
    
    
    
    
    
    
    
    Other depreciation and amortization
    
    
    2,062
    
    
    
    60
    
    
    
    1,198
    
    
    
    
    
    
    
    3,320Interest expense, net
    
    
    16,648
    
    
    
    966
    
    
    
    2,554
    
    
    
    
    
    
    
    20,168Litigation settlement costs
    
    
    
    
    
    
    2,750
    
    
    
    
    
    
    
    
    
    
    
    2,750Other
    
    
    3,485
    
    
    
    407
    
    
    
    95
    
    
    
    
    
    
    
    3,987(Loss) income before income taxes
    
    
    (32,072
    )
    
    
    13,384
    
    
    
    34,330
    
    
    
    
    
    
    
    15,642Income tax (benefit) provision
    
    
    (11,100
    )
    
    
    9,838
    
    
    
    14,773
    
    
    
    
    
    
    
    13,511(Loss) income before equity in net
income
of subsidiaries
    
    
    (20,972
    )
    
    
    3,546
    
    
    
    19,557
    
    
    
    
    
    
    
    2,131Equity in net income of subsidiariesDomestic subsidiary guarantors
    
    
    3,546
    
    
    
    
    
    
    
    
    
    
    
    (3,546
    )
    
    
    Foreign subsidiary non-guarantors
    
    
    19,557
    
    
    
    
    
    
    
    
    
    
    
    (19,557
    )
    
    
    Net income
    
    $
    2,131
    
    
    $
    3,546
    
    
    $
    19,557
    
    
    $
    (23,103
    )
    
    $
    2,131
 78




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##### Table of Contents



DOLLAR FINANCIAL GROUP, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
 16. Consolidating Financial Statements (continued)
 (In thousands)
 Dollar
    
    
    
    
    
    SubsidiaryFinancial
    
    Subsidiary
    
    Non-Group, Inc.
    
    Guarantors
    
    Guarantors
    
    Eliminations
    
    ConsolidatedCash flows from operating activities:Net income
    
    $
    2,131
    
    
    $
    3,546
    
    
    $
    19,557
    
    
    $
    (23,103
    )
    
    $
    2,131Adjustments to reconcile net (loss) income to net
cash (used in) provided by operating activitiesUndistributed income of subsidiaries
    
    
    (23,103
    )
    
    
    
    
    
    
    
    
    
    
    23,103
    
    
    
    Depreciation and amortization
    
    
    3,853
    
    
    
    3,316
    
    
    
    3,802
    
    
    
    
    
    
    
    10,971Losses on store closings and sales
    
    
    3,485
    
    
    
    407
    
    
    
    95
    
    
    
    
    
    
    
    3,987Foreign currency loss on revaluation
subordinated notes payable
    
    
    
    
    
    
    
    
    
    
    (398
    )
    
    
    
    
    
    
    (398
    )Deferred tax provision
    
    
    102
    
    
    
    681
    
    
    
    
    
    
    
    
    
    
    
    783Change in assets and liabilities (net of effect of acquisitions):(Increase) decrease in loans and other receivables
    
    
    (7,106
    )
    
    
    6,060
    
    
    
    (4,307
    )
    
    
    (4,249
    )
    
    
    (9,602
    )(Increase) decrease in income taxes receivable
    
    
    (10,961
    )
    
    
    1
    
    
    
    (281
    )
    
    
    9,615
    
    
    
    (1,626
    )Decrease in prepaid expenses and other
    
    
    96
    
    
    
    800
    
    
    
    479
    
    
    
    
    
    
    
    1,375Increase (decrease) in accounts payable, income taxes
payable, accrued expenses and other liabilities and
accrued interest payable
    
    
    (5,469
    )
    
    
    10,798
    
    
    
    (3,752
    )
    
    
    (5,366
    )
    
    
    (3,789
    )Net cash (used in) provided by operating activities
    
    
    (36,972
    )
    
    
    25,609
    
    
    
    15,195
    
    
    
    
    
    
    
    3,832Cash flows from investing activities:Acquisitions, net of cash acquired
    
    
    
    
    
    
    
    
    
    
    (3,251
    )
    
    
    
    
    
    
    (3,251
    )Additions to property and equipment
    
    
    (874
    )
    
    
    (1,074
    )
    
    
    (5,480
    )
    
    
    
    
    
    
    (7,428
    )Net decrease in due from affiliates
    
    
    
    
    
    
    (39,727
    )
    
    
    
    
    
    
    (39,727
    )
    
    
    Net cash (used in) provided by investing activities
    
    
    (874
    )
    
    
    (40,801
    )
    
    
    (8,731
    )
    
    
    39,727
    
    
    
    (10,679
    )Cash flows from financing activities:Other debt payments
    
    
    
    
    
    
    
    
    
    
    (3
    )
    
    
    
    
    
    
    (3
    )Other collateralized borrowings
    
    
    
    
    
    
    
    
    
    
    8,000
    
    
    
    
    
    
    
    8,000Net decrease in revolving credit facilities
    
    
    (7,836
    )
    
    
    
    
    
    
    (9,401
    )
    
    
    
    
    
    
    (17,237
    )Payment of debt issuance costs
    
    
    (490
    )
    
    
    
    
    
    
    (200
    )
    
    
    
    
    
    
    (690
    )Net increase due from parent
    
    
    (967
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (967
    )Net increase (decrease) in due to affiliates
    
    
    53,374
    
    
    
    
    
    
    
    (13,647
    )
    
    
    (39,727
    )
    
    
    Net cash provided by (used in) financing activities
    
    
    44,081
    
    
    
    
    
    
    
    (15,251
    )
    
    
    (39,727
    )
    
    
    (10,897
    )Effect of exchange rate changes on cash and cash equivalents
    
    
    
    
    
    
    
    
    
    
    2,916
    
    
    
    
    
    
    
    2,916Net increase (decrease) in cash and cash equivalents
    
    
    6,235
    
    
    
    (15,192
    )
    
    
    (5,871
    )
    
    
    
    
    
    
    (14,828
    )Cash and cash equivalents at beginning of period
    
    
    1,746
    
    
    
    41,405
    
    
    
    43,482
    
    
    
    
    
    
    
    86,633Cash and cash equivalents at end of period
    
    $
    7,981
    
    
    $
    26,213
    
    
    $
    37,611
    
    
    $
    
    
    
    $
    71,805
 79




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DOLLAR FINANCIAL GROUP, INC.
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
 17. Subsequent Events
  80




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##### Table of Contents



Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
  
 Item 9A. CONTROLS AND PROCEDURES
 Evaluation of Disclosure Controls and Procedures
  Changes in Internal Control Over Financial Reporting
  
 Item 9B. OTHER INFORMATION
  81




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##### Table of Contents



PART III
 
 Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
 Directors and Officers
 ,
   
 Item 11. EXECUTIVE COMPENSATION
  
 Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
    
 Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
  
 Item 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
  82




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PART IV
 
 Item 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
 (a)
    
    Documents Filed as Part of this Report.
    (a)(3) ExhibitsExhibit No.
    
    Description of Document2.1
    
    Asset Purchase Agreement, dated March 7, 2005 by and among We the People Forms and Service Centers USA, Inc., Ira Distenfield and Linda
Distenfield, and WTP Acquisition Corp., and solely for the purposes of Section 13.3, Dollar Financial Group as Guarantor(11)3.1 (a)
    
    Certificate of Incorporation of Dollar Financial Group, Inc.(1)3.1 (b)
    
    Certificate of Amendment of the Certificate of Incorporation of Dollar Financial Group, Inc.(1)3.2
    
    Amended and Restated Bylaws of Dollar Financial Group, Inc.(6)3.3 (a)
    
    Amended and Restated Certificate of Incorporation of Dollar Financial Corp.(6)3.3(b)
    
    Certificate of Change of Dollar Financial Corp, Inc., filed 7/28/05(17)3.4
    
    Bylaws of Dollar Financial Corp.(6)3.5(a)
    
    Articles of Incorporation of Any Kind Check Cashing Centers, Inc.(1)3.5(b)
    
    Articles of Amendment to the Articles of Incorporation of Any Kind Check Cashing Centers, Inc.(1)3.6
    
    Bylaws of Any Kind Check Cashing Centers, Inc.(1)3.7(a)
    
    Articles of Incorporation of Cash Unlimited of Arizona, Inc.(6)3.8
    
    Bylaws of Cash Unlimited of Arizona, Inc.(6)3.9
    
    Articles of Incorporation of Check Mark of Louisiana, Inc.(1)3.10
    
    Bylaws of Check Mart of Louisiana, Inc.(1)3.11 (a)
    
    Articles of Incorporation of Check Mart of New Mexico, Inc.(1)3.11 (b)
    
    Articles of Amendment to the Articles of Incorporation of Check Mart of New Mexico, Inc.(1)3.12
    
    Bylaws of Check Mart of New Mexico, Inc.(1)3.13
    
    Articles of Incorporation of Check Mart of Pennsylvania, Inc.(1)3.14
    
    Bylaws of Check Mart of Pennsylvania, Inc.(1)3.15
    
    Articles of Incorporation of Check Mart of Texas, Inc.(1)3.16
    
    Bylaws of Check Mart of Texas, Inc.(1)3.17
    
    Articles of Incorporation of Check Mart of Wisconsin, Inc.(1)3.18
    
    Bylaws of Check Mart of Wisconsin, Inc.(1)3.19
    
    Certificate of Incorporation of DFG International, Inc.(6)3.20
    
    Bylaws of DFG International, Inc.(6)3.21
    
    Certificate of Incorporation of DFG World, Inc.(6)3.22
    
    Bylaws of DFG World, Inc.(6)3.23 (a)
    
    Articles of Incorporation of Financial Exchange Company of Ohio, Inc.(1)3.23 (b)
    
    Certificate of Amendment by Incorporator to the Articles of Incorporation of Financial Exchange Company of Ohio, Inc.(1)3.23(c)
    
    Certificate of Amendment (by Shareholders) to the Articles of Incorporation of Financial Exchange Company of Ohio, Inc.(1)3.24
    
    Code of Regulations of Financial Exchange Company of Ohio, Inc.(1)3.25(a)
    
    Articles of Incorporation of Financial Exchange Company of Pennsylvania, Inc.(1)3.25(b)
    
    Certificate of Amendment to the Articles of Incorporation of Financial Exchange Company of Pennsylvania, Inc.(1)3.25(c)
    
    Certificate of Amendment to the Articles of Incorporation of Financial Exchange Company of Pennsylvania, Inc.(I)3.26
    
    Bylaws of Financial Exchange Company of Pennsylvania, Inc.(1)3.27(a)
    
    Certificate of Incorporation of Financial Exchange Company of Pittsburgh, Inc.(1)3.27(b)
    
    Certificate of Change of Location of Registered Office and Registered Agent of Financial Exchange
 83




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##### Table of Contents



(a)(3) ExhibitsExhibit No.
    
    Description of DocumentCompany of Pittsburgh, Inc.(17)3.28
    
    Bylaws of Financial Exchange Company of Pittsburgh, Inc.(1)3.29(a)
    
    Certificate of Incorporation of Financial Exchange Company of Virginia, Inc.(1)3.29(b)
    
    Certificate of Change of Registered Agent and Registered Office of Financial Exchange Company of Virginia, Inc.(17)3.30
    
    Bylaws of Financial Exchange Company of Virginia, Inc.(1)3.31
    
    Certificate of Incorporation of Loan Mart of Oklahoma, Inc.(6)3.32
    
    Bylaws of Loan Mart of Oklahoma, Inc.(6)3.33(a)
    
    Certificate of Incorporation of Monetary Management Corporation of Pennsylvania(1)3.33(b)
    
    Certificate of Change of Registered Agent and Registered Office of Monetary Management Corporation of Pennsylvania(17)3.34
    
    Bylaws of Monetary Management Corporation of Pennsylvania(1)3.35(a)
    
    Certificate of Incorporation of Monetary Management of California, Inc.(1)3.35(b)
    
    Certificate of Ownership and Merger of Monetary Management of California, Inc.(6)3.36
    
    Bylaws of Monetary Management of California, Inc.(1)3.37
    
    Articles of Incorporation of Monetary Management of Maryland, Inc.(1)3.38
    
    Amended and Restated Bylaws of Monetary Management of Maryland, Inc.(1)3.39(a)
    
    Certificate of Incorporation of Monetary Management of New York, Inc.(1)3.39(b)
    
    Certificate of Change of Monetary Management of New York, Inc.(6)3.40
    
    Bylaws of Monetary Management of New York, Inc.(1)3.41(a)
    
    Articles of Incorporation of Money Mart Express, Inc.(6)3.41(b)
    
    Articles of Amendment of Money Mart Express, Inc.(6)3.42
    
    Bylaws of Money Mart Express, Inc.(6)3.43(a)
    
    Certificate of Incorporation of Moneymart, Inc.(6)3.43(b)
    
    Certificate of Ownership and Merger of Moneymart, Inc.(6)3.44
    
    Bylaws of Moneymart, Inc.(6)3.45
    
    Articles of Incorporation of Pacific Ring Enterprises, Inc.(1)3.46
    
    Amended and Restated Bylaws of Pacific Ring Enterprises, Inc.(6)3.47
    
    Articles of Incorporation of PD Recovery, Inc.(1)3.48
    
    Bylaws of PD Recovery, Inc.(1)3.49(b)
    
    Certificate of Amendment of the Articles of Incorporation of QTV Holdings, Inc.(17)3.50
    
    Certificate of Incorporation of DFG Canada, Inc.(17)3.51
    
    Bylaws of DFG Canada, Inc.(17)3.52(a)
    
    Certificate of Incorporation of WTP Acquisition Corp.(17)3.52(b)
    
    Certificate of Amendment of the Certificate of Incorporation of WTP Acquisition Corp.(17)4.1(a)
    
    Indenture, dated as of November 13, 2003, among the Company, the Guarantors (as defined therein), and U.S. Bank National Association, as Trustee (6)4.1(b)
    
    Supplemental Indenture, dated as of December 21, 2004 between DFG Canada, Inc., a direct subsidiary of Dollar Financial Group, Inc. and U.S. Bank
National Association, as trustee under the indenture(17)4.1(c)
    
    Supplemental Indenture, dated as of February 22, 2005, between WTP Acquisition Corp., a direct subsidiary of Dollar Financial Group, Inc., and U.S.
Bank National Association, as trustee under the indenture(17)4.2
    
    Form of 9.75% Senior Notes due 2011 with Guarantees endorsed thereon (included in Exhibit 4.1)4.3
    
    Registration Rights Agreement, dated as of May 6, 2004, by and among the Company, the Guarantors (as defined therein), and the Initial Purchaser
(as defined therein)(18)4.4
    
    Indenture, dated as of November 13, 2003, by and between Dollar Financial Corp. and U.S. Bank National Association, as Trustee, with respect to
Dollar Financial Corp.s 16% Senior Notes due 2012(6)4.5
    
    Indenture, dated as of November 13, 2003, by and between Dollar Financial Corp. and U.S. Bank National Association, as Trustee, with respect to
Dollar Financial Corp.s 13.95% Senior Subordinated Notes due 2012(18)4.6
    
    Form of Dollar Financial Corp.s 16% Senior Notes due 2012 (included in Exhibit 4.4)4.7
    
    Form of Dollar Financial Corp.s 13.95% Senior Subordinated Notes due 2012 (included in Exhibit 4.5)10.1
    
    Dollar Financial Corp. 1999 Stock Incentive Plan(2)10.2
    
    Third Amended and Restated Credit Agreement by and among Dollar Financial Group, Inc., and Dollar Financial Corp., Wells Fargo Bank, National
Association, as Sole Lead Arranger and Administrative Agent, U.S. Bank National Association, as Syndication Agent, Manufacturers and Traders Trust
Company, as Documentation Agent and The Lenders from time to time party hereto, dated as of July 8, 2005(15)
 84




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##### Table of Contents



(a)(3) ExhibitsExhibit No.
    
    Description of Document10.3
    
    Form of Pledge and Security Agreement, dated as of November 13, 2003, by and between the Guarantor (as defined therein) and Wells Fargo Bank,
National Association, as administrative agent for itself and the lenders under the Second Amended and Restated Credit Agreement(6)10.4
    
    Pledge and Security Agreement, dated as of November 13, 2003, by and between Dollar Financial Group, Inc, and Wells Fargo Bank, National
Association, as administrative agent for itself and the lenders under the Second Amended and Restated Credit Agreement(6)10.5
    
    Form of Guarantor Subordination Agreement, dated as of November 13, 2003 by and among Dollar Financial Group, Inc., Wells Fargo Bank, National
Association, as administrative agent for the Lenders under the Second Amended and Restated Credit Agreement, and the Creditor (as defined
therein)(6)10.6
    
    Form of Foreign Subsidiary Subordination Agreement, dated as of November 13, 2003 by and among Dollar Financial Group, Inc., Wells Fargo Bank,
National Association, as administrative agent for the Lenders under the Second Amended and Restated Credit Agreement, and the Creditor (as defined
therein)(6)10.7
    
    Foreign Subsidiary Subordination Agreement, dated as of November 13, 2003 by and among Dollar Financial Group, Inc., Wells Fargo Bank, National
Association, as administrative agent for the Lenders under the Second Amended and Restated Credit Agreement, and National Money Mart Company(6)10.8
    
    Foreign Subsidiary Subordination Agreement, dated as of November 13, 2003 by and among Dollar Financial Group, Inc., Wells Fargo Bank, National
Association, as administrative agent for the Lenders under the Second Amended and Restated Credit Agreement, and Dollar Financial UK Limited(6)10.9
    
    Supplemental Security Agreement (Trademarks), dated November 13, 2003 by and between Dollar Financial Group, Inc and Wells Fargo Bank, National
Association, as administrative agent for itself and the lenders under the Second Amended and Restated Credit Agreement(6)10.10
    
    Supplemental Security Agreement (Copyrights), dated November 13, 2003 by and between Dollar Financial Group, Inc and Wells Fargo Bank, National
Association, as administrative agent for itself and the lenders under the Second Amended and Restated Credit Agreement(6)10.11
    
    Supplemental Security Agreement (Patents), dated November 13, 2003 by and between Dollar Financial Group, Inc and Wells Fargo Bank, National
Association, as administrative agent for itself and the lenders under the Second Amended and Restated Credit Agreement(6)10.12
    
    First Bank Overdraft Lending Agreement, dated as of March 1, 2001, between National Money Mart Company and Bank of Montreal(6)10.13
    
    Multi Line Facility Agreement, dated January 20, 2003, by and between Dollar Financial U.K. Limited and National Westminster Bank Plc(6)10.14
    
    Form of Letter Agreement, dated October 10, 2003, by and between Dollar Financial U.K. Limited and The Royal Bank of Scotland Plc, as agent for
National Westminster Bank Plc, extending Multi Line Facility Agreement(6)10.15
    
    Form of Letter Agreement, dated October 24, 2003, by and between Dollar Financial U.K. Limited and The Royal Bank of Scotland Plc, as agent for
National Westminster Bank Plc, extending Multi Line Facility Agreement(6)10.16
    
    Form of Letter Agreement, dated November 21, 2003, by and between Dollar Financial U.K. Limited and The Royal Bank of Scotland Pic, as agent for
National Westminster Bank Plc(6)10.17(a)
    
    Participation and Servicing Agreement, dated November 15, 2002, among Archbrook Holdings International, LLC, Instant Cash Loans Limited and Dollar
Financial Group, Inc.(6)10.17(b)
    
    Termination Letter, dated June 30, 2004, among Archbrook Holdings International, LLC, Instant Cash Loans Limited and Dollar Financial Group,
Inc.(18)10.18(a)
    
    Intercreditor Agreement, dated as of November 13, 2003, by and between Wells Fargo Bank, National Association, as administrative agent, and U.S.
Bank National Association, a national banking association, as trustee for the holders of the Notes (as defined therein) under the Indenture (as
defined therein)(6)10.18(b)
    
    First Amendment to Intercreditor Agreement, dated as of April 12, 2004, by and between Wells Fargo Bank, National Association, as administrative
agent, and U.S. Bank National Association, a national banking association, as trustee for the holders of the Notes (as defined therein) under the
Indenture (as defined therein)(8)
[10.19C] Reaffirmation of Intercreditor Agreement, dated as of July 8, 2005, by and between Wells Fargo Bank, National Association, a national
banking association, as administrative agent for the Lenders under the Credit Facility Documents, and U.S. Bank National Association, a national
banking association, as trustee for the holders of the Notes under the Noteholder Documents(17)10.19
    
    Exchange Agreement, dated as of November 13, 2003, among Dollar Financial Corp., GS Mezzanine Partners, L.P., GS Mezzanine Partners Offshore, L.P.,
Stone Street Fund 1998, L.P., Bridge Street Fund 1998, L.P., Ares Leveraged Investment Fund, L.P., and Ares Leveraged Investment Fund II, L.P.,
with respect to Dollar Financial Corp.s 16% Senior Notes Due 2012(6)10.20
    
    Exchange Agreement, dated as of November 13, 2003, among Dollar Financial Corp., GS Mezzanine Partners, L.P., GS Mezzanine Partners Offshore, L.P.,
Stone Street Fund 1998, L.P., Bridge Street Fund
 85




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##### Table of Contents



(a)(3) ExhibitsExhibit No.
    
    Description of Document1998, L.P., Ares Leveraged Investment Fund, L.P. and Ares Leveraged Investment Fund II, L.P., with
respect to Dollar Financial Corp.s 13.95% Senior Subordinated Notes Due 2012(6)10.21
    
    Exchange and Registration Rights Agreement, dated as of November 13, 2003, by and among Dollar Financial Corp. and GS Mezzanine Partners, L.P. GS
Mezzanine Partners Offshore, L.P., Stone Street Fund 1998, L.P., Bridge Street Fund 1998, L.P., Ares Leveraged Investment Fund, L.P., and Ares
Leveraged Investment Fund II, L.P., as the purchasers of Dollar Financial Corp.s 16% Senior Notes Due 2012(6)10.22
    
    Exchange and Registration Rights Agreement, dated as of November 13, 2003, by and among Dollar Financial Corp. and GS Mezzanine Partners, L.P. GS
Mezzanine Partners Offshore, L.P., Stone Street Fund 1998, L.P., Bridge Street Fund 1998, L.P., Ares Leveraged Investment Fund, L.P., and Ares
Leveraged Investment Fund II, L.P., as the purchasers of DFG Holdings Inc.s 13.95% Senior Subordinated Notes Due 2012(6)10.23(a)
    
    Amended and Restated Management Services Agreement, dated as of November 13, 2003, by and among Dollar Financial Corp., Dollar Financial Group,
Inc. and Leonard Green & Partners, L.P.(6)10.23(b)
    
    Termination Agreement, dated as of May 26, 2004, by and among Dollar Financial Corp., Dollar Financial Group, Inc. and Leonard, Green & Partners,
L.P.(8)10.24
    
    Second Amended and Restated Stockholders Agreement, dated as of November 13, 2003, by and among Green Equity Investors II, L.P., Stone Street Fund
1998, L.P. Bridge Street Fund 1998, L.P., GS Mezzanine Partners, L.P., GS Mezzanine Partners Offshore, L.P., Ares Leveraged Investment Fund, L.P.,
a Delaware limited partnership, Ares Leveraged Investment Fund II, L.P., a Delaware limited partnership, C.L. Jeffrey, Sheila Jeffrey, certain
stockholders signatories thereto and Dollar Financial Corp.(6)10.24
    
    Amendment No. 1 to Second Amended and Restated Stockholders Agreement, dated as of March 11,
2004, by and among Dollar Financial Corp., Green Equity Investors 11, L.P., GS Mezzanine
Partners, L.P., GS Mezzanine Partners Offshore, L.P., Stone Street Fund 1998, L.P., Bridge
Street Fund 1998, L.P., Ares Leveraged Investment Fund, L.P., Ares Leveraged Investment Fund
II, L.P. and Jeffrey Weiss(7)10.25
    
    Amendment No. 2 to Second Amended and Restated Stockholders Agreement, dated as of April 14,
2004, by and among Dollar Financial Corp., Green Equity Investors 11, L.P., GS Mezzanine
Partners, L.P., GS Mezzanine Partners Offshore, L.P., Stone Street Fund 1998, L.P., Bridge
Street Fund 1998, L.P., Ares Leveraged Investment Fund, L.P., Ares Leveraged Investment Fund
II, L.P. and Jeffrey Weiss(8)10.26
    
    Amendment No. 3 to Second Amended and Restated Stockholders Agreement, dated as of July 6,
2004, by and among Dollar Financial Corp., Green Equity Investors II, L.P., GS Mezzanine
Partners, L.P., GS Mezzanine Partners Offshore, L.P., Stone Street Fund 1998, L.P., Bridge
Street Fund 1998, L.P., Ares Leveraged Investment Fund, L.P., Ares Leveraged Investment Fund
II, L.P., and Jeffrey Weiss(8)10.27
    
    Employment Agreement, dated as of December 19, 2003, by and among Dollar Financial Group,
Inc., Dollar Financial Corp. and Jeffrey Weiss(8)10.28
    
    Employment Agreement, dated as of December 19, 2003, by and among Dollar Financial Group,
Inc., Dollar Financial Corp. and Donald Gayhardt(8)10.29
    
    Employment Agreement, dated April 30, 2002, by and between Dollar Financial Group, Inc. and
Cameron Hetherington(7)10.30
    
    Employment Agreement, dated as of May 7, 2004, by and between Dollar Financial UK Limited and
Gillian Wilmot(8)10.31
    
    Employment Letter, dated June 30, 2004, by and between Dollar Financial Corp. and Randall
Underwood(18)10.32
    
    Secured Note, dated December 18, 1998, made by Jeffrey Weiss in favor of Dollar Financial
Group, Inc.(3)10.33
    
    Pledge Agreement, dated December 18, 1998, between Dollar Financial Group, Inc. and Jeffrey
Weiss(3)10.34(a)
    
    Amended and Restated Nonexclusive Servicing and Indemnification Agreement, dated June 14,
2002, between County Bank and Dollar Financial Group, Inc.(5)10.34(b)
    
    Termination of Amended and Restated Nonexclusive Servicing and Indemnification Agreement
Dated June 14, 2002, dated June 15, 2005(17)10.35(a)
    
    Marketing and Servicing Agreement, dated October 18, 2002, between First Bank of Delaware and
Dollar Financial Group, Inc.(4)10.35(b)
    
    Amendment of Marketing and Servicing Agreement, dated June 14, 2005(17)10.36
    
    Acknowledgment, dated as of November 13, 2003, to the Exchange and Registration Rights
Agreement by and among Dollar Financial Corp. GS Mezzanine Partners, L.P., GS Mezzanine
Partners Offshore, L.P., Stone Street Fund 1998, L.P., Bridge Street Fund 1998, L.P., Ares
Leveraged Investment Fund, L.P. and Ares Leveraged Investment Fund 11, LT with respect to
Dollar Financial Corp.s 16% Senior Notes due 2012(6)
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##### Table of Contents



(a)(3) ExhibitsExhibit No.
    
    Description of Document10.37
    
    Acknowledgment, dated as of November 13, 2003, to the Exchange and Registration Rights
Agreement by and among Dollar Financial Corp. GS Mezzanine Partners, L.P., GS Mezzanine
Partners Offshore, L.P., Stone Street Fund 1998, L.P., Bridge Street Fund 1998, L.P., Ares
Leveraged Investment Fund, L.P. and Ares Leveraged Investment Fund II, LT with respect to
Dollar Financial Corp.s 13.95% Senior Subordinated Notes due 2012(6)10.38
    
    Amendment, dated as of November 13, 2003, to the Exchange Agreement by and among Dollar
Financial Corp. GS Mezzanine Partners, L.P. Ares Leveraged Investment Fund, L.P. and Ares
Leveraged Investment Fund II, L.P., with respect to Dollar Financial Corp.s 16% Senior Notes
due 2012(6)10.39
    
    Amendment, dated as of November 13, 2003, to the Exchange Agreement by and among Dollar
Financial Corp. GS Mezzanine Partners, L.P., GS Mezzanine Partners Offshore, L.P., Stone
Street Fund 1998, L.P., Bridge Street Fund 1998, L.P., Ares Leveraged Investment Fund, L.P.
and Ares Leveraged Investment Fund II, L.P., with respect to Dollar Financial Corp.s 13.95%
Senior Subordinated Notes due 2012(6)10.40
    
    Form of Director Indemnification Agreement(8)10.41
    
    Registration Rights Agreement, dated June 23, 2005, for $30,000,000 Dollar Financial Group,
Inc. 9.75% Senior Notes Due 2011(13)10.42
    
    Letter Agreement with Donald Gayhardt for the Acceleration of Options, dated June 30, 2005(14)10.43
    
    Letter Agreement with Jeff Weiss for the Acceleration of Options, dated June 30, 2005(14)10.44
    
    Employment Agreement, dated as of March 7, 2005, by and among Dollar Financial Corp., WTP
Acquisition Corp. and Ira Distenfield(17).10.45
    
    Form of Guaranty(17)10.46
    
    Master Reaffirmation Agreement, dated as of July 8, 2005, by and among each of the
undersigned Existing Guarantors and Existing Foreign Subsidiaries, Dollar Financial Group,
Inc., and Wells Fargo Bank, National Association, as Administrative Agent to the Lenders from
time to time party to the Credit Agreement(12).12.1
    
    Computation of Ratio of Earnings to Fixed Charges(17)21.1
    
    Subsidiaries of the Registrant(17)31.1
    
    Certification of Chief Executive Officer Pursuant to Title 17, Code of Federal
Regulations, Section 240.13a  14(a) or Section 240.15d  14(a). (19)31.2
    
    Certification of  President Pursuant to Title 17, Code of Federal
Regulations, Section 240.13a  14(a) or Section 240.15d  14(a). (19)31.3
    
    Certification of Chief Financial Officer Pursuant to Title 17, Code of Federal
Regulations, Section 240.13a  14(a) or Section 240.15d  14(a). (19)32.1
    
    Certification of Chief Executive Officer Pursuant to Title 18, United States Code,
Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (19)32.2
    
    Certification of President Pursuant to Title 18, United States Code,
Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (19)32.3
    
    Certification of Chief Financial Officer Pursuant to Title 18, United States Code,
Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (19)99.1
    
    Press Release issued by Dollar Financial Corp. and Dollar Financial Group, Inc. on April 18,
2005. (19)(1)
    
    Incorporated by reference to the Registration Statement on Form S-4 filed by Dollar Financial
Group, Inc. on December 19, 1996 (File No. 333-18221).(2)
    
    Incorporated by reference to the Annual Report on Form 10-K filed by Dollar Financial Group,
Inc. on September 29, 1997 (File No. 333-18221).(3)
    
    Incorporated by reference to the Quarterly Report on Form 10-Q filed by Dollar Financial
Group, Inc. on February 16, 1999 (File No. 333-18221).(4)
    
    Incorporated by reference to the Annual Report on Form 10-K filed by Dollar Financial Group,
Inc. on October 1, 2002 (File No. 333-18221).(5)
    
    Incorporated by reference to the Quarterly Report on Form 10-Q filed by Dollar Financial
Group, Inc. on February 14, 2003 (File No. 333-18221).(6)
    
    Incorporated by reference to Amendment No. 1 to the Registration Statement on Form S-4 filed
by Dollar Financial Group, Inc. on January 14, 2004 (File No. 333-111473).(7)
    
    Incorporated by reference to the Quarterly Report on Form 10-Q filed by Dollar Financial
Corp. on April 23, 2004 (File No. 333-111473-02).(8)
    
    Incorporated by reference to Amendment No. 6 to the Registration Statement on Form S-1 filed
by Dollar Financial Corp. on July 26, 2004 (File No. 333-113570).(9)
    
    Incorporated by reference to the Current Report on Form 8-K filed by Dollar Financial Corp.
on February 9, 2005 (File No. 333-18221).(10)
    
    Incorporated by reference to the Quarterly Report on Form 10-Q filed by Dollar Financial
Corp. on February 11, 2005 (File No. 000-50866).(11)
    
    Incorporated by reference to the First Amendment on Current Report on Form 8-K filed by
Dollar Financial Corp. on March 11, 2005 (File No. 000-50866).
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(a)(3) ExhibitsExhibit No.
    
    Description of Document(12)
    
    Incorporated by reference to the Registration Statement on Form S-8 filed by Dollar Financial
Corp. on March 15, 2005 (File No. 333-123320).(13)
    
    Incorporated by reference to the Current Report on Form 8-K filed by Dollar Financial Corp.
on June 24, 2005 (File No. 000-50866).(14)
    
    Incorporated by reference to the Current Report on Form 8-K filed by Dollar Financial Corp.
on July 7, 2005 (File No. 000-50866).(15)
    
    Incorporated by reference to the Current Report on Form 8-K filed by Dollar Financial Corp.
on July 14, 2005 (File No. 000-50866)(16)
    
    Incorporated by reference to the Current Report on Form 8-K/A filed by Dollar Financial Corp.
on July 26, 2005 (File No. 000-50866)(17)
    
    Incorporated by reference to the Amendment No. 1 to the Registration Statement on Form S-4
filed by Dollar Financial Corp. on August 11, 2005 (File No. 333-126951-17)(18)
    
    Previously filed.(19)
    
    Filed herewith.
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##### Table of Contents



SIGNATURES
  DOLLAR FINANCIAL GROUP, INC.By:
    /s/ DONALD GAYHARDTDonald GayhardtPresident DOLLAR FINANCIAL GROUP, INC.
 Signature
    
    Title
    
    Date/s/
JEFFREY A. WEISS
    
    Chairman of the Board of Directors
    
    September 20, 2005Jeffery A. Weiss
    
    and Chief Executive Officer
(principal executive officer)/s/ DONALD GAYHARDT
    
    President and Director
    
    September 20, 2005Donald Gayhardt/s/ RANDY UNDERWOOD
    
    Executive Vice President and Chief
    
    September 20, 2005Randy Underwood
    
    Financial Officer (principal financial
and accounting officer)
  89