##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 Form 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended March 31, 2010
 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 000-50866
 DOLLAR FINANCIAL CORP.
 (Exact Name of Registrant as Specified in Its Charter)
 Delaware
    
    23-2636866(State or Other Jurisdiction of Incorporation or Organization)
    
    (I.R.S. Employer Identification No.)
 1436 LANCASTER AVENUE,
BERWYN, PENNSYLVANIA 19312
 610-296-3400
 None
 þ þ o
 o o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 o þ




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##### 



DOLLAR FINANCIAL CORP.
INDEX
 Page No.PART I. FINANCIAL INFORMATIONItem 1. Financial StatementsInterim Consolidated Balance Sheets as of June 30, 2009 and March 31, 2010 (unaudited)
    
    
    3Interim Unaudited Consolidated Statements of Operations for the Three and Nine Months Ended
2009 and 2010
    
    
    4Interim Consolidated Statements of Stockholders Equity as of June 30, 2009 and March 31, 2010
(unaudited)
    
    
    5Interim Unaudited Consolidated Statements of Cash Flows for the Nine Months Ended 2009 and 2010
    
    
    6Notes to Interim Unaudited Consolidated Financial Statements
    
    
    7Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    45Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    71Item 4. Controls and Procedures
    
    
    73PART II. OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    74Item 6. Exhibits
    
    
    75Signature
    
    
    76Rule 13a-14(a)/15d-14(a) Certification of Chief Executive OfficerRule 13(a)-14(a)/15d-14a Certification of Executive Vice President and Chief Financial OfficerRule 13a-14(a)/15d-14(a) Certification of Senior Vice President of Finance and Corporate ControllerSection 1350 Certification of Chief Executive OfficerSection 1350 Certification of Executive Vice President and Chief Financial OfficerSection 1350 Certification of Senior Vice President of Finance and Corporate ControllerEX-10.1EX-31.1EX-31.2EX-31.3EX-32.1EX-32.2EX-32.3
  2




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##### Table of Contents



PART 1. FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 DOLLAR FINANCIAL CORP.
 
 INTERIM CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share amounts)
 June 30,
    
    
    March 31,2009
    
    
    2010(restated)
    
    
    (unaudited)ASSETSCurrent AssetsCash and cash equivalents
    
    $
    209,602
    
    
    $
    370,977Loans receivable, net:Loans receivable
    
    
    126,826
    
    
    
    136,790Less: Allowance for loan losses
    
    
    (12,132
    )
    
    
    (17,349
    )Loans receivable, net
    
    
    114,694
    
    
    
    119,441Loans in default, net of an allowance of $17,000 and $15,153
    
    
    6,436
    
    
    
    5,867Other receivables
    
    
    7,299
    
    
    
    20,887Prepaid expenses and other current assets
    
    
    22,794
    
    
    
    24,222Current deferred tax asset, net of valuation allowance of $4,816 and $4,816
    
    
    39
    
    
    
    1,403Total current assets
    
    
    360,864
    
    
    
    542,797Deferred tax asset, net of valuation allowance of $84,972 and $79,976
    
    
    27,062
    
    
    
    29,402Property and equipment, net of accumulated depreciation of $99,803 and $115,969
    
    
    58,614
    
    
    
    63,114Goodwill and other intangibles
    
    
    454,347
    
    
    
    593,609Debt issuance costs, net of accumulated amortization of $6,815 and $7,986
    
    
    9,869
    
    
    
    20,133Other
    
    
    10,709
    
    
    
    15,935Total Assets
    
    $
    921,465
    
    
    $
    1,264,990LIABILITIES AND STOCKHOLDERS EQUITYCurrent LiabilitiesAccounts payable
    
    $
    36,298
    
    
    $
    36,907Income taxes payable
    
    
    14,834
    
    
    
    9,329Accrued expenses and other liabilities
    
    
    70,588
    
    
    
    140,941Debt due within one year
    
    
    5,880
    
    
    
    14,401Current deferred tax liability
    
    
    71
    
    
    
    310Total current liabilities
    
    
    127,671
    
    
    
    201,888Fair value of derivatives
    
    
    10,223
    
    
    
    63,165Long-term deferred tax liability
    
    
    18,876
    
    
    
    22,570Long-term debt
    
    
    530,425
    
    
    
    735,928Other non-current liabilities
    
    
    25,192
    
    
    
    22,931Stockholders equity:Common stock, $.001 par value: 55,500,000 shares authorized;
24,102,985 shares and 24,332,319 shares issued and outstanding at
June 30, 2009 and March 31, 2010, respectively
    
    
    24
    
    
    
    24Additional paid-in capital
    
    
    311,301
    
    
    
    329,906Accumulated deficit
    
    
    (110,581
    )
    
    
    (110,419
    )Accumulated other comprehensive income
    
    
    8,018
    
    
    
    (1,246
    )Total Dollar Financial Corp. stockholders equity
    
    
    208,762
    
    
    
    218,265Non-controlling interest
    
    
    316
    
    
    
    243Total stockholders equity
    
    
    209,078
    
    
    
    218,508Total Liabilities and Stockholders Equity
    
    $
    921,465
    
    
    $
    1,264,990
  3




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##### Table of Contents



DOLLAR FINANCIAL CORP.
 
 INTERIM UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share amounts)
 Three Months Ended
    
    
    Nine Months EndedMarch 31,
    
    
    March 31,2009
    
    
    2010
    
    
    2009
    
    
    2010(restated)
    
    
    
    
    
    
    (restated)Revenues:Check cashing
    
    $
    37,263
    
    
    $
    37,236
    
    
    $
    127,419
    
    
    $
    113,575Fees from consumer lending
    
    
    57,654
    
    
    
    78,062
    
    
    
    203,261
    
    
    
    238,250Money transfer fees
    
    
    5,957
    
    
    
    6,609
    
    
    
    20,351
    
    
    
    20,523Pawn service fees and sales
    
    
    3,164
    
    
    
    4,814
    
    
    
    10,466
    
    
    
    13,302Other
    
    
    14,126
    
    
    
    30,627
    
    
    
    41,916
    
    
    
    66,247Total revenues
    
    
    118,164
    
    
    
    157,348
    
    
    
    403,413
    
    
    
    451,897Operating expenses:Salaries and benefits
    
    
    34,429
    
    
    
    39,882
    
    
    
    111,507
    
    
    
    114,341Provision for loan losses
    
    
    10,242
    
    
    
    10,220
    
    
    
    40,392
    
    
    
    34,578Occupancy
    
    
    9,863
    
    
    
    10,974
    
    
    
    31,503
    
    
    
    32,659Depreciation
    
    
    3,057
    
    
    
    3,424
    
    
    
    9,819
    
    
    
    10,869Returned checks, net and cash shortages
    
    
    2,866
    
    
    
    2,288
    
    
    
    13,228
    
    
    
    7,182Maintenance and repairs
    
    
    2,848
    
    
    
    3,097
    
    
    
    9,068
    
    
    
    8,792Advertising
    
    
    1,451
    
    
    
    3,884
    
    
    
    6,659
    
    
    
    11,998Bank charges and armored carrier service
    
    
    3,174
    
    
    
    3,477
    
    
    
    9,937
    
    
    
    10,400Other
    
    
    9,639
    
    
    
    16,142
    
    
    
    32,621
    
    
    
    40,612Total operating expenses
    
    
    77,569
    
    
    
    93,388
    
    
    
    264,734
    
    
    
    271,431Operating margin
    
    
    40,595
    
    
    
    63,960
    
    
    
    138,679
    
    
    
    180,466Corporate and other expenses:Corporate expenses
    
    
    15,452
    
    
    
    22,068
    
    
    
    52,566
    
    
    
    65,368Other depreciation and amortization
    
    
    925
    
    
    
    2,490
    
    
    
    2,903
    
    
    
    4,652Interest expense, net
    
    
    10,346
    
    
    
    21,946
    
    
    
    32,560
    
    
    
    46,412Loss on extinguishment of debt
    
    
    
    
    
    
    718
    
    
    
    
    
    
    
    9,531Unrealized foreign exchange gain
    
    
    
    
    
    
    (15,681
    )
    
    
    
    
    
    
    (11,769
    )Loss on derivatives not designated as hedges
    
    
    
    
    
    
    18,634
    
    
    
    
    
    
    
    21,909Provision  for litigation settlements
    
    
    45
    
    
    
    26,627
    
    
    
    554
    
    
    
    27,894Loss on store closings
    
    
    644
    
    
    
    1,507
    
    
    
    6,137
    
    
    
    3,157Other (income) expense, net
    
    
    (877
    )
    
    
    261
    
    
    
    (6,546
    )
    
    
    1,685Income (loss) before income taxes
    
    
    14,060
    
    
    
    (14,610
    )
    
    
    50,505
    
    
    
    11,627Income tax provision (benefit)
    
    
    8,361
    
    
    
    (2,332
    )
    
    
    23,970
    
    
    
    11,538Net income (loss)
    
    
    5,699
    
    
    $
    (12,278
    )
    
    $
    26,535
    
    
    $
    89Less: Net loss attributable to non-controlling interests
    
    
    
    
    
    
    (37
    )
    
    
    
    
    
    
    (73
    )Net income (loss) attributable to Dollar Financial Corp.
    
    $
    5,699
    
    
    $
    (12,241
    )
    
    $
    26,535
    
    
    $
    162Net income per share:Basic
    
    $
    0.24
    
    
    $
    (0.51
    )
    
    $
    1.10
    
    
    $
    0.01Diluted
    
    $
    0.24
    
    
    $
    (0.51
    )
    
    $
    1.10
    
    
    $
    0.01Weighted average shares outstanding:Basic
    
    
    23,951,974
    
    
    
    24,151,536
    
    
    
    24,024,628
    
    
    
    24,064,118Diluted
    
    
    24,007,851
    
    
    
    24,151,536
    
    
    
    24,114,896
    
    
    
    24,767,284
  4




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##### Table of Contents



DOLLAR FINANCIAL CORP.
 
 INTERIM UNAUDITED CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY
(In thousands, except share data)
 AccumulatedCommon Stock
    
    
    Additional
    
    
    Accumulated
    
    
    
    
    
    
    Other
    
    
    TotalOutstanding
    
    
    Paid-in
    
    
    Income
    
    
    Non-Controlling
    
    
    Comprehensive
    
    
    StockholdersShares
    
    
    Amount
    
    
    Capital
    
    
    (Deficit)
    
    
    Interest
    
    
    Income (loss)
    
    
    EquityBalance, June 30, 2009
(audited)
    
    
    24,102,985
    
    
    $
    24
    
    
    $
    311,301
    
    
    $
    (110,581
    )
    
    $
    316
    
    
    $
    8,018
    
    
    $
    209,078Comprehensive income:Foreign currency translation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (10,751
    )
    
    
    (10,751
    )Cash flow hedges
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,487
    
    
    
    1,487Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    162
    
    
    
    
    
    
    
    
    
    
    
    162Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (9,102
    )Restricted stock grants
    
    
    191,706Stock options exercised
    
    
    85,508
    
    
    
    
    
    
    
    1,417
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,417Vested portion of granted restricted stock and restricted stock units
    
    
    
    
    
    
    
    
    
    
    2,373
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,373Retirement of common stock
    
    
    (47,880
    )
    
    
    
    
    
    
    Other stock compensation
    
    
    
    
    
    
    
    
    
    
    2,284
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,284Net income attributable to non-controlling interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (73
    )
    
    
    
    
    
    
    (73
    )Debt Discount
    
    
    
    
    
    
    
    
    
    
    32,911
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    32,911Retirement of Debt Discount
    
    
    
    
    
    
    
    
    
    
    (20,380
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (20,380
    )Balance, March 31, 2010
(unaudited)
    
    
    24,332,319
    
    
    $
    24
    
    
    $
    329,906
    
    
    $
    (110,419
    )
    
    $
    243
    
    
    $
    (1,246
    )
    
    $
    218,508
  5




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##### Table of Contents



DOLLAR FINANCIAL CORP.
 
 INTERIM UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
 Nine Months EndedMarch 31,2009
    
    
    2010(restated)Cash flows from operating activities:Net income
    
    $
    26,535
    
    
    $
    162Adjustments to reconcile net income to net cash provided by operating activities:Depreciation and amortization
    
    
    14,869
    
    
    
    17,971Loss on extinguishment of debt
    
    
    
    
    
    
    9,531Change in fair value of derivatives not designated as hedges
    
    
    
    
    
    
    17,054Provision for loan losses
    
    
    40,392
    
    
    
    34,578Non-cash stock compensation
    
    
    5,045
    
    
    
    4,657Non-controlling interest
    
    
    
    
    
    
    (73
    )Loss on disposal of fixed assets
    
    
    1,963
    
    
    
    314Unrealized foreign exchange gain
    
    
    
    
    
    
    (12,000
    )Deferred tax provision (benefit)
    
    
    3,793
    
    
    
    (2,436
    )Accretion of debt discount and deferred issuance costs
    
    
    6,649
    
    
    
    9,403Change in assets and liabilities (net of effect of acquisitions):Increase in loans and other receivables
    
    
    (33,672
    )
    
    
    (46,912
    )Increase in prepaid expenses and other
    
    
    (3,635
    )
    
    
    (1,458
    )(Decrease) increase in accounts payable, accrued expenses and other liabilities
    
    
    (14,380
    )
    
    
    48,326Net cash provided by operating activities
    
    
    47,559
    
    
    
    79,117Cash flows from investing activities:Acquisitions, net of cash acquired
    
    
    (2,382
    )
    
    
    (123,829
    )Additions to property and equipment
    
    
    (11,013
    )
    
    
    (18,303
    )Net cash used in investing activities
    
    
    (13,395
    )
    
    
    (142,132
    )Cash flows from financing activities:Proceeds from offering 10.375% Senior Notes due 2016
    
    
    
    
    
    
    596,388Proceeds from the exercise of stock options
    
    
    3,305
    
    
    
    1,417Purchase of company stock
    
    
    (7,492
    )
    
    
    Repayment of term loan notes
    
    
    
    
    
    
    (351,114
    )Other debt payments
    
    
    (2,653
    )
    
    
    (6,992
    )Payment of convertible debt
    
    
    
    
    
    
    (32,032
    )Net (decrease) increase in revolving credit facilities
    
    
    (3,753
    )
    
    
    14,200Payment of debt issuance and other costs
    
    
    (128
    )
    
    
    (19,681
    )Net cash (used in) provided by financing activities
    
    
    (10,721
    )
    
    
    202,186Effect of exchange rate changes on cash and cash equivalents
    
    
    (41,590
    )
    
    
    22,204Net (decrease) increase in cash and cash equivalents
    
    
    (18,147
    )
    
    
    161,375Cash and cash equivalents at beginning of period
    
    
    209,714
    
    
    
    209,602Cash and cash equivalents at end of period
    
    $
    191,567
    
    
    $
    370,977
  6




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##### Table of Contents



DOLLAR FINANCIAL CORP.
 
 NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 1. Summary of Significant Accounting Policies
 Basis of Presentation
  ® ® ®
   Use of Estimates
  7




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##### Table of Contents



DOLLAR FINANCIAL CORP.
NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 1. Summary of Significant Accounting Policies (continued)
 Principles of Consolidation
  Reclassifications
  Fair Value of Financial Instruments
   Earnings per Share
  Three Months Ended
    
    
    Nine Months EndedMarch 31,
    
    
    March 31,2009
    
    
    2010
    
    
    2009
    
    
    2010Net income (loss) attributable to Dollar Financial Corp
    
    $
    5,699
    
    
    $
    (12,241
    )
    
    $
    26,535
    
    
    $
    162Reconciliation of denominator:Weighted average of common shares outstanding  basic (1)
    
    
    23,952
    
    
    
    24,152
    
    
    
    24,025
    
    
    
    24,064Effect of dilutive stock options  (2)
    
    
    
    
    
    
    
    
    
    
    14
    
    
    
    407Effect of unvested restricted stock and restricted stock unit grants
(2)
    
    
    56
    
    
    
    
    
    
    
    76
    
    
    
    296Weighted average of common shares outstanding  diluted
    
    
    24,008
    
    
    
    24,152
    
    
    
    24,115
    
    
    
    24,767
 
 (1)
    
    Excludes 114 and
101 shares of
unvested restricted
stock which are
included in total
outstanding common
shares as of March
31, 2009 and 2010,
respectively. The
dilutive effect of
restricted stock is
included in the
calculation of
diluted earnings
per share using the
treasury stock
method.(2)
    
    The effect of
dilutive stock
options was
determined under
the treasury stock
method. Due to the
net loss for the
three months ended
March 31, 2010, the
effect of the
dilutive options
and unvested shares
of restricted stock
and restricted
stock unit grants
were considered to
be anti-dilutive,
and therefore were
not included in the
calculation of
diluted earnings
per share. 8




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##### Table of Contents



DOLLAR FINANCIAL CORP.
NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 1. Summary of Significant Accounting Policies (continued)
 Stock Based Employee Compensation
      Three Months Ended
    
    Nine Months EndedMarch 31,
    
    March 31,2009
    
    2010
    
    2009
    
    2010Expected volatility
    
    
    52.2
    %
    
    
    53.6
    %
    
    
    49.6
    %
    
    
    54.8
    %Expected life (years)
    
    
    6.0
    
    
    
    6.0
    
    
    
    5.8
    
    
    
    5.9Risk-free interest rate
    
    
    2.38
    %
    
    
    3.07
    %
    
    
    2.51
    %
    
    
    3.22
    %Expected dividends
    
    None
    
    
    None
    
    
    None
    
    
    NoneWeighted average fair value
    
    $
    3.40
    
    
    $
    11.34
    
    
    $
    3.71
    
    
    $
    9.62
  WeightedWeighted
    
    AverageAverage
    
    Remaining
    
    AggregateExercise
    
    Contractual
    
    Intrinsic ValueOptions
    
    Price
    
    Term (years)
    
    ($ in millions)Options outstanding at June 30,
2009 (911,623 shares exercisable)
    
    
    1,575,184
    
    
    $
    14.56
    
    
    
    7.8
    
    
    $
    3.0Granted
    
    
    274,029
    
    
    $
    17.70Exercised
    
    
    (85,508
    )
    
    $
    16.57Forfeited and expired
    
    
    (23,960
    )
    
    $
    16.10Options outstanding at March 31, 2010
    
    
    1,739,745
    
    
    $
    14.94
    
    
    
    7.4
    
    
    $
    16.2Exercisable at March 31, 2010
    
    
    1,110,446
    
    
    $
    15.61
    
    
    
    6.6
    
    
    $
    9.7
 9




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##### Table of Contents



DOLLAR FINANCIAL CORP.
NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 1. Summary of Significant Accounting Policies (continued)
 Stock Based Employee Compensation (continued)
    WeightedAverageRestricted
    
    Grant-DateStock Awards
    
    Fair-ValueOutstanding at June 30, 2009
    
    
    105,458
    
    
    $
    11.03Granted
    
    
    31,899
    
    
    $
    22.86Vested
    
    
    (36,795
    )
    
    $
    11.83Outstanding at March 31, 2010
    
    
    100,562
    
    
    $
    14.49
   WeightedRestricted
    
    AverageStock Unit
    
    Grant-DateAwards
    
    Fair-ValueOutstanding at June 30, 2009
    
    
    413,926
    
    
    $
    11.25Granted
    
    
    256,259
    
    
    $
    17.22Vested
    
    
    (226,706
    )
    
    $
    13.33Forfeited
    
    
    (14,841
    )
    
    $
    16.91Outstanding at March 31, 2010
    
    
    428,638
    
    
    $
    13.53
  10




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##### Table of Contents



DOLLAR FINANCIAL CORP.
NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 1. Summary of Significant Accounting Policies (continued)
 Recent Accounting Pronouncements
 Business Combinations
 Non-controlling Interests in
Consolidated Financial Statements
 Accounting for Convertible Debt
Instruments That May Be Settled Upon Conversion (Including Partial Cash Settlement)
 Disclosures about Fair Value of
Financial Instruments
 Accounting Standards Codification
and the Hierarchy of Generally Accepted Accounting Principles
 Improving Disclosures about Fair Value
Measurements. Fair Value Measurements and Disclosures
 11




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##### Table of Contents



DOLLAR FINANCIAL CORP.
NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 2. Acquisitions
         12




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##### Table of Contents



DOLLAR FINANCIAL CORP.
NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 2. Acquisitions (continued)
  Cash
    
    $
    4,464Other receivables
    
    
    1,471Other assets
    
    
    2,883Prepaid expenses and other current assets
    
    
    1,990Property and equipment
    
    
    559Accounts payable
    
    
    (690
    )Accrued expenses and other liabilities
    
    
    (1,896
    )Other non-current liabilities
    
    
    (2,974
    )Net tangible assets acquired
    
    
    5,807Definite-lived intangible assets acquired
    
    
    28,679Indefinite-lived intangible assets acquired
    
    
    35,354Goodwill
    
    
    53,508Total estimated purchase price
    
    $
    123,348
    EstimatedUsefulEstimated Fair
    
    
    LivesValue
    
    
    (Years)Third-party bank financing contract
    
    $
    15,177
    
    
    
    5Service warranty provider contract
    
    
    7,038
    
    
    
    5Auto dealer relationships
    
    
    4,253
    
    
    
    5GAP insurance provider contract
    
    
    1,449
    
    
    
    3Payment processing contract
    
    
    416
    
    
    
    5Non-compete contracts
    
    
    346
    
    
    
    2Tradename/Program
    
    
    35,354
    
    
    Indefinite$
    64,033
 13




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##### Table of Contents



DOLLAR FINANCIAL CORP.
NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 2. Acquisitions (continued)
    Balance at June 30, 2009
    
    $
    406.5Acquisitions:Military Financial Services, LLC
    
    
    53.5Merchant Cash Express Limited
    
    
    2.0Various small acquisitions
    
    
    0.2Purchase accounting adjustments:Robert Biggar Limited
    
    
    0.3Optima, S.A.
    
    
    2.3Express Finance Limited
    
    
    0.3Foreign currency adjustment
    
    
    12.7Balance at March 31, 2010
    
    $
    477.8
  Pro Forma ResultsThree months ended
    
    Nine months endedMarch 31,
    
    March 31,2009
    
    2010
    
    2009
    
    2010(Unaudited in thousands except
    
    (Unaudited in thousands exceptper share amounts)
    
    per share amounts)Revenue
    
    $
    128,233
    
    
    $
    157,348
    
    
    $
    433,350
    
    
    $
    465,466Net income
(loss) attributable to Dollar Financial Corp
    
    $
    8,897
    
    
    $
    (12,241
    )
    
    $
    38,103
    
    
    $
    6,550Net income (loss) per common share  basic
    
    $
    0.37
    
    
    $
    (0.51
    )
    
    $
    1.59
    
    
    $
    0.27Net income (loss) per common share  diluted
    
    $
    0.37
    
    
    $
    (0.51
    )
    
    $
    1.58
    
    
    $
    0.26
 14




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##### Table of Contents



DOLLAR FINANCIAL CORP.
NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 3. Goodwill and Other Intangibles
  United
    
    
    Dealers Financial
    
    
    
    
    
    
    UnitedStates (1)
    
    
    Services
    
    
    Canada
    
    
    Kingdom
    
    
    TotalBalance at June 30, 2009
    
    $
    210,335
    
    
    $
    
    
    
    $
    124,453
    
    
    $
    71,766
    
    
    $
    406,554Acquisitions and purchase accounting adjustments
    
    
    2,328
    
    
    
    53,508
    
    
    
    
    
    
    
    2,744
    
    
    
    58,580Foreign currency translation adjustments
    
    
    440
    
    
    
    
    
    
    
    17,997
    
    
    
    (5,728
    )
    
    
    12,709Balance at March 31, 2010
    
    $
    213,103
    
    
    $
    53,508
    
    
    $
    142,450
    
    
    $
    68,782
    
    
    $
    477,843
 
 (1)
    
    United States segment also includes operations in Poland  June 30,
    
    
    March 31,2009
    
    
    2010Gross
    
    
    GrossCarrying
    
    
    CarryingAmount
    
    
    AmountNon-amortized intangible assets:Goodwill
    
    $
    406,554
    
    
    $
    477,843Reacquired franchise rights
    
    
    47,793
    
    
    
    53,377DFS MILES Program
    
    
    
    
    
    
    35,354$
    454,347
    
    
    $
    566,574Amortizable intangible assets:Various contracts
    
    $
    
    
    
    $
    27,035Total intangible assets
    
    $
    454,347
    
    
    $
    593,609
     15




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##### Table of Contents



DOLLAR FINANCIAL CORP.
NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 4. Contingent Liabilities
   Canadian Legal Proceedings
 Ontario Class Action
  British Columbia Class Action
   New Brunswick, Newfoundland and Nova Scotia Class Actions
  16




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##### Table of Contents



DOLLAR FINANCIAL CORP.
NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 4. Contingent Liabilities (continued)
 Canadian Legal Proceedings (continued)
  Purported Alberta Class Actions
       Purported Manitoba Class Action
  Provisions for Settlement of Canadian Actions
  17




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##### Table of Contents



DOLLAR FINANCIAL CORP.
NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 4. Contingent Liabilities (continued)
 Canadian Legal Proceedings (continued)
 Other Canadian Litigation
  California Legal Proceedings
 Bufil Bufil
  We The People Legal Proceedings
     18




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##### Table of Contents



DOLLAR FINANCIAL CORP.
 NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 4. Contingent Liabilities (continued)
 We The People Legal Proceedings (continued)
  Customer Litigation
   Franchisee Litigation
  Greene
  19




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##### Table of Contents



DOLLAR FINANCIAL CORP.
 NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 4. Contingent Liabilities (continued)
 We The People Legal Proceedings (continued)
 Regulatory Matters
  5. Debt
  June 30,
    
    
    March 31,2009
    
    
    2010Revolving credit facility
    
    $
    
    
    
    $
    14,200National Money Mart Company 10.375% Senior Notes due 2016
    
    
    
    
    
    
    600,000Issuance discount on 10.375% Senior Notes due 2016
    
    
    
    
    
    
    (3,612
    )Dollar Financial Corp. 2.875% Senior Convertible Notes due 2027
    
    
    161,315
    
    
    
    37,766Dollar Financial Corp. 3.000% Senior Convertible Notes due 2028
    
    
    
    
    
    
    83,485Term loans due October 2012
    
    
    368,722
    
    
    
    1,594Term loans due December 2014
    
    
    
    
    
    
    16,896Other
    
    
    6,268
    
    
    
    Total debt
    
    
    536,305
    
    
    
    750,329Less: current portion of debt
    
    
    (5,880
    )
    
    
    (14,401
    )Long-term debt
    
    $
    530,425
    
    
    $
    735,928
 Senior Notes
  Convertible Notes
 Senior Convertible Notes due 2027
  20




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##### Table of Contents



DOLLAR FINANCIAL CORP.
 NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 5. Debt (continued)
     
    
    during any calendar quarter commencing after September 30, 2007, if the closing sale price
of DFCs common stock is greater than or equal to 130% of the applicable conversion price
for at least 20 trading days in the period of 30 consecutive trading days ending on the
last day of the preceding calendar quarter;
    
    during the five day period following any five consecutive trading day period in which the
trading price of the 2027 Notes for each day of such period was less than 98.0% of the
product of the closing sale price per share of DFCs common stock on such day and the
conversion rate in effect for the 2027 Notes on each such day;
    
    if the 2027 Notes are called for redemption; and
    
    upon the occurrence of specified corporate transactions as described in the 2027 Indenture.
     21




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##### Table of Contents



DOLLAR FINANCIAL CORP.
 NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 5. Debt (continued)
  Senior Convertible Notes due 2028
    
    
    during any calendar quarter commencing after December 31, 2009, if the closing sale price
of DFCs common stock is greater than or equal to 130% of the applicable conversion price
for at least 20 trading days in the period of 30 consecutive trading days ending on the
last day of the preceding calendar quarter;
    
    during the five day period following any five consecutive trading day period in which the
trading price of the 2028 Notes for each day of such period was less than 98.0% of the
product of the closing sale price per share of DFCs common stock on such day and the
conversion rate in effect for the 2028 Notes on each such day;
    
    if the 2028 Notes are called for redemption; and
at any time on or after December 31, 2026; or
    
    upon the occurrence of specified corporate transactions as described in the 2028 Indenture.
     22




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##### Table of Contents



DOLLAR FINANCIAL CORP.
 NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 Treatment of Convertible Notes
 5. Debt (continued)
 Debt
  1.
    
    cash equal to the lesser of the aggregate principal amount
of the Convertible Notes to be converted ($1,000 per note)
or the total conversion value; and shares of DFCs common
stock in respect of the remainder, if any, of the
conversion value over the principal amount of the
Convertible Notes; or2.
    
    shares of DFCs common stock to the holders, calculated at
the initial conversion price which is subject to any of
the conversion price adjustments discussed above.
 Earnings Per Share
 Credit Facility
      23




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##### Table of Contents



DOLLAR FINANCIAL CORP.
 NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 5. Debt (continued)
     6. Capital Stock
  7. Fair Value Measurements
   24




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##### Table of Contents



DOLLAR FINANCIAL CORP.
 NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 7. Fair Value Measurements (continued)
  Assets and Liabilities Measured at Fair Value on a Recurring Basis at March 31, 2010
( in thousands)
 Quoted Prices in
    
    SignificantActive Markets
    
    Other
    
    Significantfor Identical
    
    Observable
    
    Unobservable
    
    Balance atAssets and Liabilities (Level 1)
    
    Inputs (Level 2)
    
    Inputs (Level 3)
    
    March 31, 2010AssetsDerivative financial instruments
    
    $
    
    
    
    $
    136
    
    
    $
    
    
    
    $
    136LiabilitiesDerivative financial instruments
    
    $
    
    
    
    $
    63,165
    
    
    $
    
    
    
    $
    63,165
  8. Loss on Extinguishment of Debt
     Nine
months endedMarch
31, 2010Loss/(Gain)Write-off of previously capitalized Term Loan
deferred debt issuance costs, net
    
    $
    4,960Reclassification of other comprehensive income
related to U.K. term debt repayment
    
    
    3,866Miscellaneous foreign exchange expense related
to repayment term debt repayment
    
    
    230Net gain on exchange and repurchase of 2027 Notes
    
    
    (1,536
    )Write-off of previously capitalized deferred debt
issuance costs related to the 2027 Notes, net
    
    
    2,011Total
    
    $
    9,531
 25




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##### Table of Contents



DOLLAR FINANCIAL CORP.
 NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 9. Segment Information
  26




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##### Table of Contents



DOLLAR FINANCIAL CORP.
 NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 9. Segment Information  (continued)
 (In thousands)DealersUnited
    
    
    Financial
    
    
    
    
    
    
    UnitedStates
    
    
    Services
    
    
    Canada
    
    
    Kingdom
    
    
    TotalAs of and for the three months ended
March 31, 2009Total assets
    
    $
    264,700
    
    
    $
    
    
    
    $
    421,535
    
    
    $
    161,055
    
    
    $
    847,290Goodwill and other intangibles, net
    
    
    206,022
    
    
    
    
    
    
    
    153,266
    
    
    
    57,382
    
    
    
    416,670Sales to unaffiliated customers:Check cashing
    
    
    15,960
    
    
    
    
    
    
    
    13,608
    
    
    
    7,695
    
    
    
    37,263Fees from consumer lending
    
    
    17,966
    
    
    
    
    
    
    
    25,851
    
    
    
    13,837
    
    
    
    57,654Money transfer fees
    
    
    1,431
    
    
    
    
    
    
    
    3,229
    
    
    
    1,297
    
    
    
    5,957Pawn service fees and sales
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,164
    
    
    
    3,164Other
    
    
    3,316
    
    
    
    
    
    
    
    9,254
    
    
    
    1,556
    
    
    
    14,126Total sales to unaffiliated customers
    
    
    38,673
    
    
    
    
    
    
    
    51,942
    
    
    
    27,549
    
    
    
    118,164Provision for loan losses
    
    
    3,882
    
    
    
    
    
    
    
    4,904
    
    
    
    1,456
    
    
    
    10,242Interest expense, net
    
    
    4,985
    
    
    
    
    
    
    
    3,904
    
    
    
    1,457
    
    
    
    10,346Depreciation and amortization
    
    
    1,363
    
    
    
    
    
    
    
    1,396
    
    
    
    1,223
    
    
    
    3,982Provision for litigation settlements
    
    
    45
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    45Loss on store closings
    
    
    277
    
    
    
    
    
    
    
    327
    
    
    
    40
    
    
    
    644Other income, net
    
    
    
    
    
    
    
    
    
    
    309
    
    
    
    (1,186
    )
    
    
    (877
    )(Loss) income before income taxes
    
    
    (2,582
    )
    
    
    
    
    
    
    10,225
    
    
    
    6,417
    
    
    
    14,060Income tax provision
    
    
    4,245
    
    
    
    
    
    
    
    2,194
    
    
    
    1,922
    
    
    
    8,361As of and for the nine months ended
March 31, 2009Sales to unaffiliated customers:Check cashing
    
    $
    44,311
    
    
    $
    
    
    
    $
    51,497
    
    
    $
    31,611
    
    
    $
    127,419Fees from consumer lending
    
    
    62,957
    
    
    
    
    
    
    
    93,054
    
    
    
    47,250
    
    
    
    203,261Money transfer fees
    
    
    4,550
    
    
    
    
    
    
    
    11,404
    
    
    
    4,397
    
    
    
    20,351Pawn service fees and sales
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,466
    
    
    
    10,466Other
    
    
    10,093
    
    
    
    
    
    
    
    24,459
    
    
    
    7,364
    
    
    
    41,916Total sales to unaffiliated customers
    
    
    121,911
    
    
    
    
    
    
    
    180,414
    
    
    
    101,088
    
    
    
    403,413Provision for loan losses
    
    
    17,477
    
    
    
    
    
    
    
    16,998
    
    
    
    5,917
    
    
    
    40,392Interest expense, net
    
    
    16,041
    
    
    
    
    
    
    
    11,493
    
    
    
    5,026
    
    
    
    32,560Depreciation and amortization
    
    
    4,225
    
    
    
    
    
    
    
    4,531
    
    
    
    3,966
    
    
    
    12,722Provision for litigation settlements
    
    
    554
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    554Loss on store closings
    
    
    3,347
    
    
    
    
    
    
    
    2,744
    
    
    
    46
    
    
    
    6,137Other expense (income), net
    
    
    
    
    
    
    
    
    
    
    (3,898
    )
    
    
    (2,648
    )
    
    
    (6,546
    )(Loss) income before income taxes
    
    
    (20,783
    )
    
    
    
    
    
    
    47,817
    
    
    
    23,471
    
    
    
    50,505Income tax provision
    
    
    4,219
    
    
    
    
    
    
    
    13,831
    
    
    
    5,920
    
    
    
    23,970
 27




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##### Table of Contents



DOLLAR FINANCIAL CORP.
 NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 9. Segment Information  (continued)
 (In thousands)DealersUnited
    
    
    Financial
    
    
    
    
    
    
    UnitedStates
    
    
    Services
    
    
    Canada
    
    
    Kingdom
    
    
    TotalAs of and for the three months ended
March 31, 2010Total assets
    
    $
    291,809
    
    
    $
    131,843
    
    
    $
    616,451
    
    
    $
    224,887
    
    
    $
    1,264,990Goodwill and other intangibles, net
    
    
    213,398
    
    
    
    115,897
    
    
    
    190,177
    
    
    
    74,137
    
    
    
    593,609Sales to unaffiliated customers:Check cashing
    
    
    14,055
    
    
    
    
    
    
    
    15,867
    
    
    
    7,314
    
    
    
    37,236Fees from consumer lending
    
    
    17,096
    
    
    
    
    
    
    
    36,313
    
    
    
    24,653
    
    
    
    78,062Money transfer fees
    
    
    1,176
    
    
    
    
    
    
    
    3,897
    
    
    
    1,536
    
    
    
    6,609Pawn service fees and sales
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,814
    
    
    
    4,814Other
    
    
    2,890
    
    
    
    6,893
    
    
    
    14,943
    
    
    
    5,901
    
    
    
    30,627Total sales to unaffiliated customers
    
    
    35,217
    
    
    
    6,893
    
    
    
    71,020
    
    
    
    44,218
    
    
    
    157,348Provision for loan losses
    
    
    2,769
    
    
    
    
    
    
    
    3,546
    
    
    
    3,905
    
    
    
    10,220Interest expense, net
    
    
    4,272
    
    
    
    (14
    )
    
    
    17,590
    
    
    
    98
    
    
    
    21,946Depreciation and amortization
    
    
    1,084
    
    
    
    1,556
    
    
    
    1,695
    
    
    
    1,579
    
    
    
    5,914Loss on extinguishment of debt
    
    
    718
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    718Unrealized foreign exchange loss (gain)
    
    
    80
    
    
    
    
    
    
    
    (15,952
    )
    
    
    191
    
    
    
    (15,681
    )Loss on derivatives not designated as hedges
    
    
    
    
    
    
    
    
    
    
    18,634
    
    
    
    
    
    
    
    18,634Provision for litigation settlements
    
    
    4,246
    
    
    
    
    
    
    
    22,381
    
    
    
    
    
    
    
    26,627Loss on store closings
    
    
    1,424
    
    
    
    
    
    
    
    78
    
    
    
    5
    
    
    
    1,507Other expense (income), net
    
    
    1,354
    
    
    
    (126
    )
    
    
    (832
    )
    
    
    (135
    )
    
    
    261(Loss) income before income taxes
    
    
    (9,554
    )
    
    
    3,073
    
    
    
    (19,358
    )
    
    
    11,229
    
    
    
    (14,610
    )Income tax (benefit) provision
    
    
    (487
    )
    
    
    44
    
    
    
    (5,084
    )
    
    
    3,195
    
    
    
    (2,332
    )As of and for the nine months ended
March 31, 2010Sales to unaffiliated customers:Check cashing
    
    $
    36,094
    
    
    $
    
    
    
    $
    51,355
    
    
    $
    26,126
    
    
    $
    113,575Fees from consumer lending
    
    
    56,235
    
    
    
    
    
    
    
    109,655
    
    
    
    72,360
    
    
    
    238,250Money transfer fees
    
    
    3,671
    
    
    
    
    
    
    
    12,164
    
    
    
    4,688
    
    
    
    20,523Pawn service fees and sales
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13,302
    
    
    
    13,302Other
    
    
    8,701
    
    
    
    7,514
    
    
    
    31,155
    
    
    
    18,877
    
    
    
    66,247Total sales to unaffiliated customers
    
    
    104,701
    
    
    
    7,514
    
    
    
    204,329
    
    
    
    135,353
    
    
    
    451,897Provision for loan losses
    
    
    10,563
    
    
    
    
    
    
    
    11,838
    
    
    
    12,177
    
    
    
    34,578Interest expense, net
    
    
    13,671
    
    
    
    (14
    )
    
    
    29,586
    
    
    
    3,169
    
    
    
    46,412Depreciation and amortization
    
    
    4,145
    
    
    
    1,679
    
    
    
    4,952
    
    
    
    4,745
    
    
    
    15,521Loss on extinguishment of debt
    
    
    1,169
    
    
    
    
    
    
    
    3,642
    
    
    
    4,720
    
    
    
    9,531Unrealized foreign exchange loss (gain)
    
    
    135
    
    
    
    
    
    
    
    (20,024
    )
    
    
    8,120
    
    
    
    (11,769
    )Loss on derivatives not designated as hedges
    
    
    
    
    
    
    
    
    
    
    21,909
    
    
    
    
    
    
    
    21,909Provision for litigation settlements
    
    
    5,513
    
    
    
    
    
    
    
    22,381
    
    
    
    
    
    
    
    27,894Loss (gain) on store closings
    
    
    2,382
    
    
    
    1
    
    
    
    826
    
    
    
    (52
    )
    
    
    3,157Other expense (income), net
    
    
    2,108
    
    
    
    (139
    )
    
    
    (815
    )
    
    
    531
    
    
    
    1,685(Loss) income before income taxes
    
    
    (22,511
    )
    
    
    3,346
    
    
    
    10,214
    
    
    
    20,578
    
    
    
    11,627Income tax provision
    
    
    2,283
    
    
    
    47
    
    
    
    3,236
    
    
    
    5,972
    
    
    
    11,538
 28




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##### Table of Contents



DOLLAR FINANCIAL CORP.
 NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 10. Comprehensive Income
  Three months ended
    
    
    Nine months endedMarch 31,
    
    
    March 31,2009
    
    
    2010
    
    
    2009
    
    
    2010Net income
    
    $
    5,699
    
    
    $
    (12,241
    )
    
    $
    26,535
    
    
    $
    162Foreign currency translation adjustment(1)
    
    
    (3,613
    )
    
    
    18,427
    
    
    
    (40,507
    )
    
    
    (10,751
    )Fair value adjustments for cash flow hedges,
net(2)(3)
    
    
    5,534
    
    
    
    809
    
    
    
    (8,748
    )
    
    
    1,487Total comprehensive income (loss)
    
    $
    7,620
    
    
    $
    6,995
    
    
    $
    (22,720
    )
    
    $
    (9,102
    )
 
 (1)
    
    The ending balance of the foreign
currency translation adjustments included
in accumulated other comprehensive income
on the balance sheet was a loss of $2.6
million and a gain of $10.5 million
respectively as of March 31, 2009 and 2010.(2)
    
    Net of $2.5 million and $15 thousand
of tax for the three months ended March 31,
2009 and 2010, respectively. For the nine
months ended March 31, 2009 and 2010, the
fair value adjustments for cash flow hedges
were net of $4.0 million and $0.5 million
of tax, respectively.(3)
    
    Net of $0.7 million and $0.1 million which
were reclassified into earnings for the
three months ended March 31, 2009 and 2010,
respectively. For the nine months ended
March 31, 2009 and 2010, the fair value
adjustments for cash flow hedges which were
reclassified into earnings were $1.4
million and $1.0 million, respectively.  11. Income Taxes
 Income Tax Provision
  29




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##### Table of Contents



DOLLAR FINANCIAL CORP.
 NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 11. Income Taxes (continued)
   NetDeferred
    
    
    Valuation
    
    
    DeferredTax Asset
    
    
    Allowance
    
    
    Tax AssetBalance at June 30, 2009
    
    $
    130.4
    
    
    $
    89.8
    
    
    $
    40.6U.S. increase/(decrease)
    
    
    (2.2
    )
    
    
    (2.2
    )
    
    
    Foreign increase/(decrease)
    
    
    2.3
    
    
    
    (2.8
    )
    
    
    5.1Balance at March 31, 2010
    
    $
    130.5
    
    
    $
    84.8
    
    
    $
    45.7
     30




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##### Table of Contents



DOLLAR FINANCIAL CORP.
 NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 11. Income Taxes (continued)
  12. Derivative Instruments and Hedging Activities
 Risk Management Objective of Using Derivatives
   Cash Flow Hedges of Foreign Exchange Risk
   Foreign Currency Derivatives
    
    Notional Sold
    
    Notional PurchasedCAD Put/USD Call Options
    
    
    C$8,000,000
    
    
    $
    7,619,048GBP Put/USD Call Options
    
    GBP3,800,000
    
    $
    5,510,000
 Cash Flow Hedges of Multiple Risks
   31




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##### Table of Contents



DOLLAR FINANCIAL CORP.
 NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 12. Derivative Instruments and Hedging Activities (continued)
     Pay Fixed
    
    Pay Fixed
    
    Receive Floating
    
    Receive FloatingForeign Currency Derivates
    
    Notional
    
    Strike Rate
    
    Notional
    
    IndexUSD-CAD Cross Currency Swap
    
    CAD183,081,045
    
    
    8.75
    %
    
    $
    159,225,000
    
    
    3 mo. LIBOR + 
2.75% per annumUSD-CAD Cross Currency Swap
    
    CAD61,296,848
    
    
    7.47
    %
    
    $
    53,075,000
    
    
    3 mo. LIBOR + 
2.75% per annumUSD-CAD Cross Currency Swap
    
    CAD83,622,075
    
    
    7.47
    %
    
    $
    72,375,500
    
    
    3 mo. LIBOR + 
2.75% per annum
 Non-designated Hedges of Commodity Risk
  32




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##### Table of Contents



DOLLAR FINANCIAL CORP.
 NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 12. Derivative Instruments and Hedging Activities (continued)
  Tabular Disclosure of Fair Values of Derivative Instruments(1)Asset Derivatives
    
    
    Liability DerivativesAs of March 31, 2010
    
    
    As of March 31, 2010Balance Sheet Location
    
    Fair Value
    
    
    Balance Sheet Location
    
    Fair ValueDerivatives not designated as hedging instrumentsCross Currency Swaps
    
    
    
    
    
    
    
    Derivatives
    
    
    63,165Commodity options
    
    Prepaid expenses
    
    
    136Total derivatives not designated as hedging
instruments
    
    
    
    $
    136
    
    
    
    
    $
    63,165
 
 (1)
    
    The fair values of derivative instruments are presented in the above
table on a gross basis. Certain of the above derivative instruments
are subject to master netting arrangements and qualify for net
presentation in the Consolidated Balance Sheet.  Tabular Disclosure of the Effect of Derivative Instruments on the Consolidated Statement of Operations for the Nine Months EndingMarch 31, 2010Location ofGain or (Loss)Recognized in
    
    Amount of Gain orIncome on
    
    (Loss) RecognizedLocation of Gain
    
    Amount of Gain
    
    
    Derivative
    
    in Income onor (Loss)
    
    or (Loss)
    
    
    (Ineffective
    
    DerivativeAmount of Gain or
    
    
    Reclassified from
    
    Reclassified from
    
    
    Portion and
    
    (Ineffective Portion(Loss) Recognized in
    
    
    Accumulated OCI
    
    Accumulated
    
    
    Amount
    
    and AmountDerivatives in SFAS 133
    
    OCI on Derivative
    
    
    into Income
    
    OCI into Income
    
    
    Excluded from
    
    Excluded fromCash Flow Hedging
    
    (Effective Portion),
    
    
    (Effective
    
    (Effective
    
    
    Effectiveness
    
    EffectivenessRelationships
    
    net of tax
    
    
    Portion)
    
    Portion)
    
    
    Testing)
    
    Testing)Commodity options
    
    
    
    
    
    
    
    
    
    
    
    Other income / (expense)
    
    $
    (10
    )Foreign Exchange Contracts
    
    $
    (34
    )
    
    Foreign currency 
gain / (loss)
    
    $
    
    
    
    Other income / (expense)
    
    $
    Cross Currency Swaps
    
    
    
    
    
    Interest Expense
    
    
    (6,179
    )
    
    Other income / (expense)
    
    
    (21,909
    )(2,673
    )
    
    Corporate Expenses
    
    
    1,764Total
    
    $
    (2,707
    )
    
    
    
    $
    (4,415
    )
    
    
    
    $
    (21,919
    )
 33




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##### Table of Contents



DOLLAR FINANCIAL CORP.
 NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 12. Derivative Instruments and Hedging Activities (continued)
 Tabular Disclosure of the Effect of Derivative Instruments on the Consolidated Statement of Operations for the Nine Months EndingMarch 31, 2009Location ofGain or (Loss)Recognized in
    
    Amount of Gain orIncome on
    
    (Loss) RecognizedLocation of Gain
    
    Amount of Gain
    
    
    Derivative
    
    in Income onor (Loss)
    
    or (Loss)
    
    
    (Ineffective
    
    DerivativeAmount of Gain or
    
    
    Reclassified from
    
    Reclassified from
    
    
    Portion and
    
    (Ineffective Portion(Loss) Recognized in
    
    
    Accumulated OCI
    
    Accumulated
    
    
    Amount
    
    and AmountDerivatives in SFAS 133
    
    OCI on Derivative
    
    
    into Income
    
    OCI into Income
    
    
    Excluded from
    
    Excluded fromCash Flow Hedging
    
    (Effective Portion),
    
    
    (Effective
    
    (Effective
    
    
    Effectiveness
    
    EffectivenessRelationships
    
    net of tax
    
    
    Portion)
    
    Portion)
    
    
    Testing)
    
    Testing)Commodity options
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    Foreign Exchange Contracts
    
    $
    156
    
    
    Foreign currency gain / (loss)
    
    $
    
    
    
    Other income / (expense)
    
    $
    Cross Currency Swaps
    
    
    
    
    
    Interest Expense
    
    
    
    
    
    Other income / (expense)
    
    
    17,798
    
    
    Corporate Expenses
    
    
    Total
    
    $
    17,954
    
    
    
    
    $
    
    
    
    
    
    $
    
 Credit-risk-related Contingent Features
    34




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##### Table of Contents



DOLLAR FINANCIAL CORP.
NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 13. Subsidiary Guarantor Financial Information
   
    
    be senior unsecured obligations of the applicable Guarantor;
    
    rank equal in right or payment with existing and future unsubordinated Indebtedness of the applicable Guarantor;
    
    rank senior in right of payment to all existing and future subordinated Indebtedness of the applicable Guarantor, and
    
    be effectively junior to an Indebtedness  of such Guarantor, including
Indebtedness under the Credit Facility, which is secured by assets of such Guarantor to the
extent of the value of the assets securing such Indebtedness.
  35




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##### Table of Contents



DOLLAR FINANCIAL CORP.
NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 13.
Subsidiary Guarantor Financial Information (continued)
 Consolidating Balance Sheets
March 31, 2010
(In thousands)
 Dollar
    
    
    National
    
    
    Dollar FinancialFinancial
    
    
    Money Mart
    
    
    Group, Inc. and
    
    
    Non-Corp.
    
    
    Company
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedCurrent AssetsCash and cash equivalents
    
    $
    810
    
    
    $
    298,100
    
    
    $
    23,813
    
    
    $
    48,254
    
    
    $
    
    
    
    $
    370,977Loans receivable, net
    
    
    
    
    
    
    27,223
    
    
    
    18,311
    
    
    
    73,907
    
    
    
    
    
    
    
    119,441Loans in default, net
    
    
    
    
    
    
    5,088
    
    
    
    9
    
    
    
    770
    
    
    
    
    
    
    
    5,867Other receivables
    
    
    338
    
    
    
    11,157
    
    
    
    1,693
    
    
    
    7,699
    
    
    
    
    
    
    
    20,887Prepaid expenses and other
current assets
    
    
    
    
    
    
    13,186
    
    
    
    5,214
    
    
    
    15,592
    
    
    
    (8,367
    )
    
    
    25,625Total current assets
    
    
    1,148
    
    
    
    354,754
    
    
    
    49,040
    
    
    
    146,222
    
    
    
    (8,367
    )
    
    
    542,797Deferred tax asset, net of
valuation allowance
    
    
    
    
    
    
    29,327
    
    
    
    
    
    
    
    75
    
    
    
    
    
    
    
    29,402Intercompany receivables
    
    
    256,763
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (256,763
    )
    
    
    Property and equipment, net
    
    
    
    
    
    
    27,874
    
    
    
    12,044
    
    
    
    23,196
    
    
    
    
    
    
    
    63,114Goodwill and other intangibles
    
    
    
    
    
    
    190,177
    
    
    
    206,590
    
    
    
    196,842
    
    
    
    
    
    
    
    593,609Debt issuance costs, net
    
    
    1,623
    
    
    
    15,786
    
    
    
    2,597
    
    
    
    127
    
    
    
    
    
    
    
    20,133Investment in subsidiaries
    
    
    80,226
    
    
    
    281,430
    
    
    
    96,388
    
    
    
    
    
    
    
    (458,044
    )
    
    
    Other
    
    
    
    
    
    
    770
    
    
    
    12,186
    
    
    
    2,979
    
    
    
    
    
    
    
    15,935Total Assets
    
    $
    339,760
    
    
    $
    900,118
    
    
    $
    378,845
    
    
    $
    369,441
    
    
    $
    (723,174
    )
    
    $
    1,264,990Current LiabilitiesAccounts payable
    
    $
    244
    
    
    $
    14,707
    
    
    $
    12,873
    
    
    $
    9,083
    
    
    $
    
    
    
    $
    36,907Income taxes payable
    
    
    
    
    
    
    5,185
    
    
    
    
    
    
    
    5,352
    
    
    
    (1,208
    )
    
    
    9,329Accrued expenses and other
liabilities
    
    
    
    
    
    
    100,699
    
    
    
    32,099
    
    
    
    14,244
    
    
    
    (6,101
    )
    
    
    140,941Debt due within one year
    
    
    
    
    
    
    149
    
    
    
    14,200
    
    
    
    52
    
    
    
    
    
    
    
    14,401Current deferred tax liability
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    310
    
    
    
    
    
    
    
    310Total current liabilities
    
    
    244
    
    
    
    120,740
    
    
    
    59,172
    
    
    
    29,041
    
    
    
    (7,309
    )
    
    
    201,888Fair value of derivatives
    
    
    
    
    
    
    63,165
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    63,165Long-term deferred tax liability
    
    
    
    
    
    
    6,792
    
    
    
    15,726
    
    
    
    52
    
    
    
    
    
    
    
    22,570Long-term debt
    
    
    121,251
    
    
    
    610,589
    
    
    
    
    
    
    
    4,088
    
    
    
    
    
    
    
    735,928Intercompany payables
    
    
    
    
    
    
    1,955
    
    
    
    212,728
    
    
    
    42,080
    
    
    
    (256,763
    )
    
    
    Other non-current liabilities
    
    
    
    
    
    
    10,320
    
    
    
    9,935
    
    
    
    2,676
    
    
    
    
    
    
    
    22,931Total liabilities
    
    
    121,495
    
    
    
    813,561
    
    
    
    297,561
    
    
    
    77,937
    
    
    
    (264,072
    )
    
    
    1,046,482Total Dollar Financial Corp.
stockholders equity
    
    
    218,265
    
    
    
    86,557
    
    
    
    81,284
    
    
    
    291,261
    
    
    
    (459,102
    )
    
    
    218,265Non-controlling interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    243
    
    
    
    
    
    
    
    243Total stockholders equity
    
    
    218,265
    
    
    
    86,557
    
    
    
    81,284
    
    
    
    291,504
    
    
    
    (459,102
    )
    
    
    218,508Total Liabilities and
Stockholders Equity
    
    $
    339,760
    
    
    $
    900,118
    
    
    $
    378,845
    
    
    $
    369,441
    
    
    $
    (723,174
    )
    
    $
    1,264,990
 36




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##### Table of Contents



DOLLAR FINANCIAL CORP.
NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 13.
Subsidiary Guarantor Financial Information (continued)
 Consolidating Condensed Statements Of Operations
Three Months ended March 31, 2010
(In thousands)
 Dollar
    
    
    National
    
    
    Dollar FinancialFinancial
    
    
    Money Mart
    
    
    Group, Inc. and
    
    
    Non-Corp.
    
    
    Company
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedRevenues:Check cashing
    
    $
    
    
    
    $
    15,867
    
    
    $
    14,055
    
    
    $
    7,314
    
    
    $
    
    
    
    $
    37,236Fees from consumer lending
    
    
    
    
    
    
    36,313
    
    
    
    15,047
    
    
    
    26,702
    
    
    
    
    
    
    
    78,062Other
    
    
    
    
    
    
    18,840
    
    
    
    4,047
    
    
    
    19,163
    
    
    
    
    
    
    
    42,050Total revenues
    
    
    
    
    
    
    71,020
    
    
    
    33,149
    
    
    
    53,179
    
    
    
    
    
    
    
    157,348Operating expenses:Salaries and benefits
    
    
    
    
    
    
    14,777
    
    
    
    12,200
    
    
    
    12,905
    
    
    
    
    
    
    
    39,882Provision for loan losses
    
    
    
    
    
    
    3,546
    
    
    
    2,062
    
    
    
    4,612
    
    
    
    
    
    
    
    10,220Occupancy
    
    
    
    
    
    
    4,064
    
    
    
    3,426
    
    
    
    3,484
    
    
    
    
    
    
    
    10,974Depreciation
    
    
    
    
    
    
    1,370
    
    
    
    746
    
    
    
    1,308
    
    
    
    
    
    
    
    3,424Other
    
    
    
    
    
    
    14,108
    
    
    
    5,426
    
    
    
    9,354
    
    
    
    
    
    
    
    28,888Total operating expenses
    
    
    
    
    
    
    37,865
    
    
    
    23,860
    
    
    
    31,663
    
    
    
    
    
    
    
    93,388Operating margin
    
    
    
    
    
    
    33,155
    
    
    
    9,289
    
    
    
    21,516
    
    
    
    
    
    
    
    63,960Corporate and other expenses:Corporate expenses
    
    
    
    
    
    
    5,622
    
    
    
    12,489
    
    
    
    3,957
    
    
    
    
    
    
    
    22,068Intercompany charges
    
    
    
    
    
    
    4,670
    
    
    
    (6,529
    )
    
    
    1,859
    
    
    
    
    
    
    
    Other depreciation and
amortization
    
    
    
    
    
    
    325
    
    
    
    313
    
    
    
    1,852
    
    
    
    
    
    
    
    2,490Interest expense, net
    
    
    3,619
    
    
    
    17,590
    
    
    
    369
    
    
    
    368
    
    
    
    
    
    
    
    21,946Loss on extinguishment of debt
    
    
    718
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    718Unrealized foreign exchange
loss (gain)
    
    
    
    
    
    
    (15,952
    )
    
    
    67
    
    
    
    204
    
    
    
    
    
    
    
    (15,681
    )Loss on derivatives not
designated as hedges
    
    
    
    
    
    
    18,634
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    18,634Provision for litigation
settlements
    
    
    
    
    
    
    22,381
    
    
    
    4,246
    
    
    
    
    
    
    
    
    
    
    
    26,627Loss on store closings
    
    
    
    
    
    
    78
    
    
    
    1,129
    
    
    
    300
    
    
    
    
    
    
    
    1,507Other expense (income), net
    
    
    
    
    
    
    (477
    )
    
    
    999
    
    
    
    (261
    )
    
    
    
    
    
    
    261(Loss) income before income
taxes
    
    
    (4,337
    )
    
    
    (19,716
    )
    
    
    (3,794
    )
    
    
    13,237
    
    
    
    
    
    
    
    (14,610
    )Income tax provision (benefit)
    
    
    
    
    
    
    (5,084
    )
    
    
    (397
    )
    
    
    3,149
    
    
    
    
    
    
    
    (2,332
    )Net (loss) income
    
    
    (4,337
    )
    
    
    (14,632
    )
    
    
    (3,397
    )
    
    
    10,088
    
    
    
    
    
    
    
    (12,278
    )Less: Net income attributable
to non-controlling interests
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (37
    )
    
    
    
    
    
    
    (37
    )Equity in net income of
subsidiariesNational Money Mart Company
    
    
    (14,632
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    14,632
    
    
    
    Guarantors
    
    
    (3,397
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,397
    
    
    
    Non-guarantors
    
    
    10,125
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (10,125
    )
    
    
    Net (loss) income
attributable to Dollar
Financial Corp.
    
    $
    (12,241
    )
    
    $
    (14,632
    )
    
    $
    (3,397
    )
    
    $
    10,125
    
    
    $
    7,904
    
    
    $
    (12,241
    )
 37




---



##### Table of Contents



DOLLAR FINANCIAL CORP.
NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 13.
Subsidiary Guarantor Financial Information (continued)
 Consolidating Condensed Statements Of Operations

Nine Months ended March 31, 2010
(In thousands)
 Dollar
    
    
    National
    
    
    Dollar FinancialFinancial
    
    
    Money Mart
    
    
    Group, Inc. and
    
    
    Non-Corp.
    
    
    Company
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedRevenues:Check cashing
    
    $
    
    
    
    $
    51,355
    
    
    $
    36,094
    
    
    $
    26,126
    
    
    $
    
    
    
    $
    113,575Fees from consumer lending
    
    
    
    
    
    
    109,655
    
    
    
    51,084
    
    
    
    77,511
    
    
    
    
    
    
    
    238,250Other
    
    
    
    
    
    
    43,319
    
    
    
    11,792
    
    
    
    44,961
    
    
    
    
    
    
    
    100,072Total revenues
    
    
    
    
    
    
    204,329
    
    
    
    98,970
    
    
    
    148,598
    
    
    
    
    
    
    
    451,897Operating expenses:Salaries and benefits
    
    
    
    
    
    
    42,807
    
    
    
    37,862
    
    
    
    33,672
    
    
    
    
    
    
    
    114,341Provision for loan losses
    
    
    
    
    
    
    11,838
    
    
    
    8,887
    
    
    
    13,853
    
    
    
    
    
    
    
    34,578Occupancy
    
    
    
    
    
    
    11,964
    
    
    
    10,663
    
    
    
    10,032
    
    
    
    
    
    
    
    32,659Depreciation
    
    
    
    
    
    
    4,005
    
    
    
    3,037
    
    
    
    3,827
    
    
    
    
    
    
    
    10,869Other
    
    
    
    
    
    
    34,547
    
    
    
    17,216
    
    
    
    27,221
    
    
    
    
    
    
    
    78,984Total operating expenses
    
    
    
    
    
    
    105,161
    
    
    
    77,665
    
    
    
    88,605
    
    
    
    
    
    
    
    271,431Operating margin
    
    
    
    
    
    
    99,168
    
    
    
    21,305
    
    
    
    59,993
    
    
    
    
    
    
    
    180,466Corporate and other expenses:Corporate expenses
    
    
    
    
    
    
    14,953
    
    
    
    38,877
    
    
    
    11,538
    
    
    
    
    
    
    
    65,368Intercompany charges
    
    
    
    
    
    
    15,552
    
    
    
    (22,138
    )
    
    
    6,586
    
    
    
    
    
    
    
    Other depreciation and
amortization
    
    
    
    
    
    
    947
    
    
    
    1,015
    
    
    
    2,690
    
    
    
    
    
    
    
    4,652Interest expense, net
    
    
    11,773
    
    
    
    29,586
    
    
    
    1,481
    
    
    
    3,572
    
    
    
    
    
    
    
    46,412Loss on extinguishment of debt
    
    
    475
    
    
    
    3,642
    
    
    
    694
    
    
    
    4,720
    
    
    
    
    
    
    
    9,531Unrealized foreign exchange
loss (gain)
    
    
    
    
    
    
    (20,024
    )
    
    
    123
    
    
    
    8,132
    
    
    
    
    
    
    
    (11,769
    )Loss on derivatives not
designated as hedges
    
    
    
    
    
    
    21,909
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    21,909Provision for litigation
settlements
    
    
    
    
    
    
    22,381
    
    
    
    5,513
    
    
    
    
    
    
    
    
    
    
    
    27,894Loss on store closings
    
    
    
    
    
    
    826
    
    
    
    1,441
    
    
    
    890
    
    
    
    
    
    
    
    3,157Gain on sale of subsidiary
    
    
    
    
    
    
    
    
    
    
    (140,000
    )
    
    
    
    
    
    
    140,000
    
    
    
    Other expense (income), net
    
    
    
    
    
    
    208
    
    
    
    1,083
    
    
    
    394
    
    
    
    
    
    
    
    1,685(Loss) income before income
taxes
    
    
    (12,248
    )
    
    
    9,188
    
    
    
    133,216
    
    
    
    21,471
    
    
    
    (140,000
    )
    
    
    11,627Income tax provision (benefit)
    
    
    (286
    )
    
    
    3,236
    
    
    
    2,336
    
    
    
    6,252
    
    
    
    
    
    
    
    11,538Net (loss) income
    
    
    (11,962
    )
    
    
    5,952
    
    
    
    130,880
    
    
    
    15,219
    
    
    
    (140,000
    )
    
    
    89Less: Net income attributable
to non-controlling interests
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (73
    )
    
    
    
    
    
    
    (73
    )Equity in net income of
subsidiariesNational Money Mart Company
    
    
    5,952
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,952
    )
    
    
    Guarantors
    
    
    130,880
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (130,880
    )
    
    
    Non-guarantors
    
    
    15,292
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (15,292
    )
    
    
    Net  income
attributable to Dollar
Financial Corp.
    
    $
    140,162
    
    
    $
    5,952
    
    
    $
    130,880
    
    
    $
    15,292
    
    
    $
    (292,124
    )
    
    $
    162
 38




---



##### Table of Contents



DOLLAR FINANCIAL CORP.
NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 13.
Subsidiary Guarantor Financial Information (continued)
 Consolidating Condensed Statements Of Cash Flows
Nine Months Ended March 31, 2010
(In thousands)
 National
    
    
    Dollar FinancialDollar Financial
    
    
    Money Mart
    
    
    Group, Inc. and
    
    
    Non-Corp.
    
    
    Company
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedCash flows from operating activities:Net income
    
    $
    140,162
    
    
    $
    5,952
    
    
    $
    130,880
    
    
    $
    15,292
    
    
    $
    (292,124
    )
    
    $
    162Adjustments to reconcile net income to
net cash provided by operating activities:Undistributed income of subsidiaries
    
    
    (152,124
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    152,124
    
    
    
    Depreciation and amortization
    
    
    565
    
    
    
    6,220
    
    
    
    4,511
    
    
    
    6,675
    
    
    
    
    
    
    
    17,971Loss on extinguishment of debt
    
    
    475
    
    
    
    3,642
    
    
    
    694
    
    
    
    4,720
    
    
    
    
    
    
    
    9,531Change in fair value of derivative not
designated as a hedge
    
    
    
    
    
    
    17,054
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    17,054Provision for loan losses
    
    
    
    
    
    
    11,838
    
    
    
    8,887
    
    
    
    13,853
    
    
    
    
    
    
    
    34,578Non-cash stock compensation
    
    
    4,657
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,657Non-controlling interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (73
    )
    
    
    
    
    
    
    (73
    )Loss on
disposal of fixed assets
    
    
    
    
    
    
    107
    
    
    
    164
    
    
    
    43
    
    
    
    
    
    
    
    314Unrealized foreign exchange loss(gain)
    
    
    11
    
    
    
    (20,261
    )
    
    
    2
    
    
    
    8,248
    
    
    
    
    
    
    
    (12,000
    )Deferred tax (benefit) provision
    
    
    
    
    
    
    (1,185
    )
    
    
    3,624
    
    
    
    (4,875
    )
    
    
    
    
    
    
    (2,436
    )Accretion of debt discount and deferred
issuance costs
    
    
    6,964
    
    
    
    1,694
    
    
    
    
    
    
    
    745
    
    
    
    
    
    
    
    9,403Change in assets and liabilities
(net of effect of acquisitions):Increase in loans and other receivables
    
    
    (8
    )
    
    
    (13,695
    )
    
    
    (4,954
    )
    
    
    (28,255
    )
    
    
    
    
    
    
    (46,912
    )Decrease (increase) in prepaid
expenses and other
    
    
    
    
    
    
    6,533
    
    
    
    (2,585
    )
    
    
    10,093
    
    
    
    (15,499
    )
    
    
    (1,458
    )Increase (decrease) in accounts
payable, accrued expenses and other
liabilities
    
    
    150
    
    
    
    41,076
    
    
    
    (4,537
    )
    
    
    (3,862
    )
    
    
    15,499
    
    
    
    48,326Net cash provided by operating activities
    
    
    852
    
    
    
    58,975
    
    
    
    136,686
    
    
    
    22,604
    
    
    
    (140,000
    )
    
    
    79,117Cash flows from investing activities:Acquisitions, net of cash acquired
    
    
    
    
    
    
    
    
    
    
    (303
    )
    
    
    (123,526
    )
    
    
    
    
    
    
    (123,829
    )Additions to property and equipment
    
    
    
    
    
    
    (4,819
    )
    
    
    (2,599
    )
    
    
    (10,885
    )
    
    
    
    
    
    
    (18,303
    )Net decrease (increase) in due from affiliates
    
    
    32,790
    
    
    
    (228,661
    )
    
    
    (152,867
    )
    
    
    208,738
    
    
    
    140,000
    
    
    
    Net cash provided by (used in) investing
activities
    
    
    32,790
    
    
    
    (233,480
    )
    
    
    (155,769
    )
    
    
    74,327
    
    
    
    140,000
    
    
    
    (142,132
    )Cash flows from financing activities:Proceeds from 10.375% Senior Notes due 2016
    
    
    
    
    
    
    596,388
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    596,388Proceeds from the exercise of stock options
    
    
    1,417
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,417Repayment of term loan notes
    
    
    
    
    
    
    (272,580
    )
    
    
    
    
    
    
    (78,534
    )
    
    
    
    
    
    
    (351,114
    )Other debt payments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,992
    )
    
    
    
    
    
    
    (6,992
    )Payment of convertible debt
    
    
    (32,032
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (32,032
    )Net increase in revolving credit facilities
    
    
    
    
    
    
    
    
    
    
    14,200
    
    
    
    
    
    
    
    
    
    
    
    14,200Payment of debt issuance and other costs
    
    
    (2,316
    )
    
    
    (15,579
    )
    
    
    (1,644
    )
    
    
    (142
    )
    
    
    
    
    
    
    (19,681
    )Net cash (used in) provided by financing activities
    
    
    (32,931
    )
    
    
    308,229
    
    
    
    12,556
    
    
    
    (85,668
    )
    
    
    
    
    
    
    202,186Effect of exchange rate changes on cash and cash
equivalents
    
    
    
    
    
    
    25,968
    
    
    
    
    
    
    
    (3,764
    )
    
    
    
    
    
    
    22,204Net increase (decrease) in cash and cash equivalents
    
    
    711
    
    
    
    159,692
    
    
    
    (6,527
    )
    
    
    7,499
    
    
    
    
    
    
    
    161,375Cash and cash equivalents balance-beginning of
period
    
    
    99
    
    
    
    138,408
    
    
    
    30,340
    
    
    
    40,755
    
    
    
    
    
    
    
    209,602Cash and cash equivalents balance-end of period
    
    $
    810
    
    
    $
    298,100
    
    
    $
    23,813
    
    
    $
    48,254
    
    
    $
    
    
    
    $
    370,977
 39




---



##### Table of Contents



DOLLAR FINANCIAL CORP.
NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 13.
Subsidiary Guarantor Financial Information (continued)
 Consolidating Balance Sheets
June 30, 2009
(In thousands)
 Dollar
    
    
    National
    
    
    Dollar FinancialFinancial
    
    
    Money Mart
    
    
    Group, Inc. and
    
    
    Non-Corp.
    
    
    Company
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedCurrent AssetsCash and cash equivalents
    
    $
    99
    
    
    $
    138,408
    
    
    $
    30,340
    
    
    $
    40,755
    
    
    $
    
    
    
    $
    209,602Loans receivable, net
    
    
    
    
    
    
    25,191
    
    
    
    21,863
    
    
    
    67,640
    
    
    
    
    
    
    
    114,694Loans in default, net
    
    
    
    
    
    
    5,415
    
    
    
    934
    
    
    
    87
    
    
    
    
    
    
    
    6,436Other receivables
    
    
    330
    
    
    
    4,423
    
    
    
    1,149
    
    
    
    1,397
    
    
    
    
    
    
    
    7,299Prepaid expenses and other
current assets
    
    
    
    
    
    
    17,606
    
    
    
    3,626
    
    
    
    23,001
    
    
    
    (21,400
    )
    
    
    22,833Total current assets
    
    
    429
    
    
    
    191,043
    
    
    
    57,912
    
    
    
    132,880
    
    
    
    (21,400
    )
    
    
    360,864Deferred tax asset, net of
valuation allowance
    
    
    
    
    
    
    20,901
    
    
    
    
    
    
    
    6,161
    
    
    
    
    
    
    
    27,062Intercompany receivables
    
    
    289,324
    
    
    
    47,077
    
    
    
    
    
    
    
    
    
    
    
    (336,401
    )
    
    
    Property and equipment, net
    
    
    11
    
    
    
    25,074
    
    
    
    13,812
    
    
    
    19,717
    
    
    
    
    
    
    
    58,614Goodwill and other intangibles
    
    
    
    
    
    
    166,149
    
    
    
    206,287
    
    
    
    81,911
    
    
    
    
    
    
    
    454,347Debt issuance costs, net
    
    
    3,039
    
    
    
    3,935
    
    
    
    1,882
    
    
    
    1,013
    
    
    
    
    
    
    
    9,869Investment in subsidiaries
    
    
    77,364
    
    
    
    
    
    
    
    124,544
    
    
    
    
    
    
    
    (201,908
    )
    
    
    Other
    
    
    
    
    
    
    606
    
    
    
    9,982
    
    
    
    121
    
    
    
    
    
    
    
    10,709Total Assets
    
    $
    370,167
    
    
    $
    454,785
    
    
    $
    414,419
    
    
    $
    241,803
    
    
    $
    (559,709
    )
    
    $
    921,465Current LiabilitiesAccounts payable
    
    $
    89
    
    
    $
    11,044
    
    
    $
    13,743
    
    
    $
    11,422
    
    
    $
    
    
    
    $
    36,298Income taxes payable
    
    
    
    
    
    
    2,753
    
    
    
    330
    
    
    
    11,751
    
    
    
    
    
    
    
    14,834Accrued expenses and other
liabilities
    
    
    
    
    
    
    42,998
    
    
    
    36,609
    
    
    
    12,416
    
    
    
    (21,435
    )
    
    
    70,588Debt due within one year
    
    
    
    
    
    
    2,950
    
    
    
    
    
    
    
    2,930
    
    
    
    
    
    
    
    5,880Current deferred tax liability
    
    
    
    
    
    
    71
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    71Total current liabilities
    
    
    89
    
    
    
    59,816
    
    
    
    50,682
    
    
    
    38,519
    
    
    
    (21,435
    )
    
    
    127,671Fair value of derivatives
    
    
    
    
    
    
    10,223
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,223Long-term deferred tax liability
    
    
    
    
    
    
    6,624
    
    
    
    12,102
    
    
    
    150
    
    
    
    
    
    
    
    18,876Long-term debt
    
    
    161,316
    
    
    
    283,937
    
    
    
    
    
    
    
    85,172
    
    
    
    
    
    
    
    530,425Intercompany payables
    
    
    
    
    
    
    
    
    
    
    267,040
    
    
    
    69,361
    
    
    
    (336,401
    )
    
    
    Other non-current liabilities
    
    
    
    
    
    
    17,897
    
    
    
    7,431
    
    
    
    29
    
    
    
    (165
    )
    
    
    25,192Total liabilities
    
    
    161,405
    
    
    
    378,497
    
    
    
    337,255
    
    
    
    193,231
    
    
    
    (358,001
    )
    
    
    712,387Total Dollar Financial Corp.
stockholders equity
    
    
    208,762
    
    
    
    76,288
    
    
    
    77,164
    
    
    
    48,256
    
    
    
    (201,708
    )
    
    
    208,762Non-controlling interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    316
    
    
    
    
    
    
    
    316Total stockholders equity
    
    
    208,762
    
    
    
    76,288
    
    
    
    77,164
    
    
    
    48,572
    
    
    
    (201,708
    )
    
    
    209,078Total Liabilities and
Stockholders Equity
    
    $
    370,167
    
    
    $
    454,785
    
    
    $
    414,419
    
    
    $
    241,803
    
    
    $
    (559,709
    )
    
    $
    921,465
 40




---



##### Table of Contents



DOLLAR FINANCIAL CORP.
NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 13.
Subsidiary Guarantor Financial Information (continued)
 Consolidating Condensed Statements Of Operations
Three Months ended March 31, 2009
(In thousands)
 Dollar
    
    
    National
    
    
    Dollar FinancialFinancial
    
    
    Money Mart
    
    
    Group, Inc. and
    
    
    Non-Corp.
    
    
    Company
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedRevenues:Check cashing
    
    $
    
    
    
    $
    13,608
    
    
    $
    15,960
    
    
    $
    7,695
    
    
    $
    
    
    
    $
    37,263Fees from consumer lending
    
    
    
    
    
    
    25,851
    
    
    
    17,966
    
    
    
    13,837
    
    
    
    
    
    
    
    57,654Other
    
    
    
    
    
    
    12,483
    
    
    
    4,262
    
    
    
    6,502
    
    
    
    
    
    
    
    23,247Total revenues
    
    
    
    
    
    
    51,942
    
    
    
    38,188
    
    
    
    28,034
    
    
    
    
    
    
    
    118,164Operating expenses:Salaries and benefits
    
    
    
    
    
    
    11,920
    
    
    
    14,727
    
    
    
    7,782
    
    
    
    
    
    
    
    34,429Provision for loan losses
    
    
    
    
    
    
    4,904
    
    
    
    3,882
    
    
    
    1,456
    
    
    
    
    
    
    
    10,242Occupancy
    
    
    
    
    
    
    3,355
    
    
    
    4,037
    
    
    
    2,471
    
    
    
    
    
    
    
    9,863Depreciation
    
    
    
    
    
    
    1,080
    
    
    
    1,015
    
    
    
    962
    
    
    
    
    
    
    
    3,057Other
    
    
    
    
    
    
    8,741
    
    
    
    6,610
    
    
    
    4,627
    
    
    
    
    
    
    
    19,978Total operating expenses
    
    
    
    
    
    
    30,000
    
    
    
    30,271
    
    
    
    17,298
    
    
    
    
    
    
    
    77,569Operating margin
    
    
    
    
    
    
    21,942
    
    
    
    7,917
    
    
    
    10,736
    
    
    
    
    
    
    
    40,595Corporate and other expenses:Corporate expenses
    
    
    
    
    
    
    4,075
    
    
    
    8,661
    
    
    
    2,716
    
    
    
    
    
    
    
    15,452Intercompany charges
    
    
    
    
    
    
    2,787
    
    
    
    (4,069
    )
    
    
    1,282
    
    
    
    
    
    
    
    Other depreciation and
amortization
    
    
    
    
    
    
    316
    
    
    
    302
    
    
    
    307
    
    
    
    
    
    
    
    925Interest expense, net
    
    
    3,934
    
    
    
    3,904
    
    
    
    1,051
    
    
    
    1,457
    
    
    
    
    
    
    
    10,346Provision for litigation
settlements
    
    
    
    
    
    
    
    
    
    
    45
    
    
    
    
    
    
    
    
    
    
    
    45Loss on store closings
    
    
    
    
    
    
    327
    
    
    
    277
    
    
    
    40
    
    
    
    
    
    
    
    644Other expense (income), net
    
    
    
    
    
    
    545
    
    
    
    (281
    )
    
    
    (1,141
    )
    
    
    
    
    
    
    (877
    )(Loss) income before
income taxes
    
    
    (3,934
    )
    
    
    9,988
    
    
    
    1,931
    
    
    
    6,075
    
    
    
    
    
    
    
    14,060Income tax provision
    
    
    
    
    
    
    2,194
    
    
    
    4,245
    
    
    
    1,922
    
    
    
    
    
    
    
    8,361Net (loss) income
    
    
    (3,934
    )
    
    
    7,794
    
    
    
    (2,314
    )
    
    
    4,153
    
    
    
    
    
    
    
    5,699Equity in net income of
subsidiariesNational Money Mart Company
    
    
    7,794
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (7,794
    )
    
    
    Guarantors
    
    
    (2,314
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,314
    
    
    
    Non-guarantors
    
    
    4,153
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,153
    )
    
    
    Net (loss) income
attributable to Dollar
Financial Corp.
    
    $
    5,699
    
    
    $
    7,794
    
    
    $
    (2,314
    )
    
    $
    4,153
    
    
    $
    (9,633
    )
    
    $
    5,699
 41




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##### Table of Contents



DOLLAR FINANCIAL CORP.
NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 13.
Subsidiary Guarantor Financial Information (continued)
 Consolidating Condensed Statements Of Operations

Nine Months ended March 31, 2009
(In thousands)
 Dollar
    
    
    National
    
    
    Dollar FinancialFinancial
    
    
    Money Mart
    
    
    Group, Inc. and
    
    
    Non-Corp.
    
    
    Company
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedRevenues:Check cashing
    
    $
    
    
    
    $
    51,497
    
    
    $
    44,311
    
    
    $
    31,611
    
    
    $
    
    
    
    $
    127,419Fees from consumer lending
    
    
    
    
    
    
    93,054
    
    
    
    62,957
    
    
    
    47,250
    
    
    
    
    
    
    
    203,261Other
    
    
    
    
    
    
    35,863
    
    
    
    13,044
    
    
    
    23,826
    
    
    
    
    
    
    
    72,733Total revenues
    
    
    
    
    
    
    180,414
    
    
    
    120,312
    
    
    
    102,687
    
    
    
    
    
    
    
    403,413Operating expenses:Salaries and benefits
    
    
    
    
    
    
    39,619
    
    
    
    45,116
    
    
    
    26,772
    
    
    
    
    
    
    
    111,507Provision for loan losses
    
    
    
    
    
    
    16,998
    
    
    
    17,477
    
    
    
    5,917
    
    
    
    
    
    
    
    40,392Occupancy
    
    
    
    
    
    
    10,935
    
    
    
    12,490
    
    
    
    8,078
    
    
    
    
    
    
    
    31,503Depreciation
    
    
    
    
    
    
    3,593
    
    
    
    3,185
    
    
    
    3,041
    
    
    
    
    
    
    
    9,819Other
    
    
    
    
    
    
    27,916
    
    
    
    23,852
    
    
    
    19,745
    
    
    
    
    
    
    
    71,513Total operating expenses
    
    
    
    
    
    
    99,061
    
    
    
    102,120
    
    
    
    63,553
    
    
    
    
    
    
    
    264,734Operating margin
    
    
    
    
    
    
    81,353
    
    
    
    18,192
    
    
    
    39,134
    
    
    
    
    
    
    
    138,679Corporate and other expenses:Corporate expenses
    
    
    
    
    
    
    13,029
    
    
    
    30,220
    
    
    
    9,317
    
    
    
    
    
    
    
    52,566Intercompany charges
    
    
    
    
    
    
    4,249
    
    
    
    (8,662
    )
    
    
    4,413
    
    
    
    
    
    
    
    Other depreciation and
amortization
    
    
    
    
    
    
    938
    
    
    
    907
    
    
    
    1,058
    
    
    
    
    
    
    
    2,903Interest expense, net
    
    
    11,565
    
    
    
    11,493
    
    
    
    4,476
    
    
    
    5,026
    
    
    
    
    
    
    
    32,560Provision for litigation
settlements
    
    
    
    
    
    
    
    
    
    
    554
    
    
    
    
    
    
    
    
    
    
    
    554Loss on store closings
    
    
    
    
    
    
    2,744
    
    
    
    3,347
    
    
    
    46
    
    
    
    
    
    
    
    6,137Other expense (income), net
    
    
    
    
    
    
    (2,879
    )
    
    
    (1,574
    )
    
    
    (2,093
    )
    
    
    
    
    
    
    (6,546
    )(Loss) income before
income taxes
    
    
    (11,565
    )
    
    
    51,779
    
    
    
    (11,076
    )
    
    
    21,367
    
    
    
    
    
    
    
    50,505Income tax provision
    
    
    
    
    
    
    13,831
    
    
    
    4,209
    
    
    
    5,930
    
    
    
    
    
    
    
    23,970Net (loss) income
    
    
    (11,565
    )
    
    
    37,948
    
    
    
    (15,285
    )
    
    
    15,437
    
    
    
    
    
    
    
    26,535Equity in net income of
subsidiariesNational Money Mart Company
    
    
    37,948
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (37,948
    )
    
    
    Guarantors
    
    
    (15,285
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    15,285
    
    
    
    Non-guarantors
    
    
    15,437
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (15,437
    )
    
    
    Net (loss) income
attributable to Dollar
Financial Corp.
    
    $
    26,535
    
    
    $
    37,948
    
    
    $
    (15,285
    )
    
    $
    15,437
    
    
    $
    (38,100
    )
    
    $
    26,535
 42




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##### Table of Contents



DOLLAR FINANCIAL CORP.
NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 13.
Subsidiary Guarantor Financial Information (continued)
 Consolidating Condensed Statements Of Cash Flows
Nine Months Ended March 31, 2009
(In thousands)
 DollarNational
    
    
    FinancialDollar
    
    
    Money
    
    
    Group, Inc.Financial
    
    
    Mart
    
    
    and
    
    
    Non-Corp.
    
    
    Company
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedCash flows from operating activities:Net income (loss)
    
    $
    26,535
    
    
    $
    37,948
    
    
    $
    (15,285
    )
    
    $
    15,437
    
    
    $
    (38,100
    )
    
    $
    26,535Adjustments to reconcile net income (loss) to
net cash provided by (used in) operating activities:Undistributed income of subsidiaries
    
    
    (38,100
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    38,100
    
    
    
    Depreciation and amortization
    
    
    650
    
    
    
    5,402
    
    
    
    4,515
    
    
    
    4,302
    
    
    
    
    
    
    
    14,869Provision for loan losses
    
    
    
    
    
    
    16,998
    
    
    
    17,477
    
    
    
    5,917
    
    
    
    
    
    
    
    40,392Non-cash stock compensation
    
    
    5,045
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,045Loss on disposal of fixed assets
    
    
    
    
    
    
    1,110
    
    
    
    765
    
    
    
    88
    
    
    
    
    
    
    
    1,963Deferred tax provision (benefit)
    
    
    
    
    
    
    313
    
    
    
    3,659
    
    
    
    (179
    )
    
    
    
    
    
    
    3,793Accretion of debt discount and
deferred issuance costs
    
    
    6,649
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,649Change in assets and liabilities
(net of effect of acquisitions):Increase in loans and other
receivables
    
    
    (9
    )
    
    
    (12,769
    )
    
    
    (10,742
    )
    
    
    (10,152
    )
    
    
    
    
    
    
    (33,672
    )Decrease (increase) in prepaid
expenses and other
    
    
    
    
    
    
    4,516
    
    
    
    (3,797
    )
    
    
    (4,354
    )
    
    
    
    
    
    
    (3,635
    )Increase (decrease) in accounts
payable, accrued expenses and
other liabilities
    
    
    9
    
    
    
    (22,630
    )
    
    
    393
    
    
    
    7,848
    
    
    
    
    
    
    
    (14,380
    )Net cash provided by (used in) operating
activities
    
    
    779
    
    
    
    30,888
    
    
    
    (3,015
    )
    
    
    18,907
    
    
    
    
    
    
    
    47,559Cash flows from investing activities:Acquisitions, net of cash acquired
    
    
    
    
    
    
    (145
    )
    
    
    (444
    )
    
    
    (1,793
    )
    
    
    
    
    
    
    (2,382
    )Additions to property and equipment
    
    
    
    
    
    
    (1,497
    )
    
    
    (2,254
    )
    
    
    (7,262
    )
    
    
    
    
    
    
    (11,013
    )Net decrease (increase) in due from
affiliates
    
    
    3,239
    
    
    
    (10,167
    )
    
    
    (10,205
    )
    
    
    17,133
    
    
    
    
    
    
    
    Net cash provided by (used in) investing
activities
    
    
    3,239
    
    
    
    (11,809
    )
    
    
    (12,903
    )
    
    
    8,078
    
    
    
    
    
    
    
    (13,395
    )Cash flows from financing activities:Proceeds from the exercise of stock
options
    
    
    3,305
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,305Purchase of company stock
    
    
    (7,492
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (7,492
    )Other debt payments
    
    
    
    
    
    
    (2,164
    )
    
    
    
    
    
    
    (489
    )
    
    
    
    
    
    
    (2,653
    )Net decrease in revolving credit
facilities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,753
    )
    
    
    
    
    
    
    (3,753
    )Payment of debt issuance and other costs
    
    
    
    
    
    
    
    
    
    
    (128
    )
    
    
    
    
    
    
    
    
    
    
    (128
    )Net cash used in financing activities
    
    
    (4,187
    )
    
    
    (2,164
    )
    
    
    (128
    )
    
    
    (4,242
    )
    
    
    
    
    
    
    (10,721
    )Effect of exchange rate changes on cash and
cash equivalents
    
    
    
    
    
    
    (26,312
    )
    
    
    
    
    
    
    (15,278
    )
    
    
    
    
    
    
    (41,590
    )Net (decrease) increase in cash and cash equivalents
    
    
    (169
    )
    
    
    (9,397
    )
    
    
    (16,046
    )
    
    
    7,465
    
    
    
    
    
    
    
    (18,147
    )Cash and cash equivalents balance-beginning
of period
    
    
    256
    
    
    
    119,427
    
    
    
    50,163
    
    
    
    39,868
    
    
    
    
    
    
    
    209,714Cash and cash equivalents balance-end of
period
    
    $
    87
    
    
    $
    110,030
    
    
    $
    34,117
    
    
    $
    47,333
    
    
    $
    
    
    
    $
    191,567
 43




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##### Table of Contents



DOLLAR FINANCIAL CORP.
NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 14. Subsequent Events
  44




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##### Table of Contents



Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
 The following is a discussion and analysis of the financial condition and results of operations for
Dollar Financial Corp. for the three and nine months ended March 31, 2010 and 2009. References in
this section to we, our, ours, or us are to Dollar Financial Corp. and its wholly owned
subsidiaries, except as the context otherwise requires. References to OPCO are to our wholly
owned operating subsidiary, Dollar Financial Group, Inc.
 Executive Summary
         45




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##### Table of Contents



46




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##### Table of Contents



Discussion of Critical Accounting Policies
   Revenue Recognition
   Company-Funded Consumer Loan Loss Reserves Policy
   47




---



##### Table of Contents



Check Cashing Returned Item Policy
  Goodwill and Indefinite-Lived Intangible Assets
     48




---



##### Table of Contents



Derivative Instruments and Hedging Activities
   Income Taxes
   49




---



##### Table of Contents



Constant Currency Analysis
   Revenue Analysis
 Three Months Ended March 31,
    
    
    Nine Months Ended March 31,(Percentage of total
    
    
    
    
    
    
    
    
    
    
    (Percentage of total($ in thousands)
    
    
    revenue)
    
    
    ($ in thousands)
    
    
    revenue)2009
    
    
    2010
    
    
    2009
    
    
    2010
    
    
    2009
    
    
    2010
    
    
    2009
    
    
    2010Check cashing
    
    $
    37,263
    
    
    $
    37,236
    
    
    
    31.5
    %
    
    
    23.7
    %
    
    $
    127,419
    
    
    $
    113,575
    
    
    
    31.6
    %
    
    
    25.1
    %Fees from consumer lending
    
    
    57,654
    
    
    
    78,062
    
    
    
    48.8
    %
    
    
    49.6
    %
    
    
    203,261
    
    
    
    238,250
    
    
    
    50.4
    %
    
    
    52.7
    %Money transfer fees
    
    
    5,957
    
    
    
    6,609
    
    
    
    5.0
    %
    
    
    4.2
    %
    
    
    20,351
    
    
    
    20,523
    
    
    
    5.0
    %
    
    
    4.5
    %Pawn service fees and sales
    
    
    3,164
    
    
    
    4,814
    
    
    
    2.7
    %
    
    
    3.1
    %
    
    
    10,466
    
    
    
    13,302
    
    
    
    2.6
    %
    
    
    2.9
    %Other revenue
    
    
    14,126
    
    
    
    30,627
    
    
    
    12.0
    %
    
    
    19.4
    %
    
    
    41,916
    
    
    
    66,247
    
    
    
    10.4
    %
    
    
    14.8
    %Total revenue
    
    $
    118,164
    
    
    $
    157,348
    
    
    
    100.0
    %
    
    
    100.0
    %
    
    $
    403,413
    
    
    $
    451,897
    
    
    
    100.0
    %
    
    
    100.0
    %
 Three Months Ended March 31, 2010 compared to Three Months Ended March 31, 2009
   50




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##### Table of Contents



Nine Months Ended March 31, 2010 compared to Nine Months Ended March 31, 2009
      51




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##### Table of Contents



Operating Expense Analysis
 Three Months Ended March 31,
    
    
    Nine Months Ended March 31,(Percentage of total
    
    
    
    
    
    
    
    
    
    
    (Percentage of total($ in thousands)
    
    
    revenue)
    
    
    ($ in thousands)
    
    
    revenue)2009
    
    
    2010
    
    
    2009
    
    
    2010
    
    
    2009
    
    
    2010
    
    
    2009
    
    
    2010Salaries and benefits
    
    $
    34,429
    
    
    $
    39,882
    
    
    
    29.1
    %
    
    
    25.3
    %
    
    $
    111,507
    
    
    $
    114,341
    
    
    
    27.6
    %
    
    
    25.3
    %Provision for loan losses
    
    
    10,242
    
    
    
    10,220
    
    
    
    8.7
    %
    
    
    6.5
    %
    
    
    40,392
    
    
    
    34,578
    
    
    
    10.0
    %
    
    
    7.7
    %Occupancy
    
    
    9,863
    
    
    
    10,974
    
    
    
    8.3
    %
    
    
    7.0
    %
    
    
    31,503
    
    
    
    32,659
    
    
    
    7.8
    %
    
    
    7.2
    %Depreciation
    
    
    3,057
    
    
    
    3,424
    
    
    
    2.6
    %
    
    
    2.2
    %
    
    
    9,819
    
    
    
    10,869
    
    
    
    2.4
    %
    
    
    2.4
    %Returned checks, net
and cash shortages
    
    
    2,866
    
    
    
    2,288
    
    
    
    2.4
    %
    
    
    1.5
    %
    
    
    13,228
    
    
    
    7,182
    
    
    
    3.3
    %
    
    
    1.6
    %Maintenance and repairs
    
    
    2,848
    
    
    
    3,097
    
    
    
    2.4
    %
    
    
    2.0
    %
    
    
    9,068
    
    
    
    8,792
    
    
    
    2.2
    %
    
    
    1.9
    %Advertising
    
    
    1,451
    
    
    
    3,884
    
    
    
    1.2
    %
    
    
    2.5
    %
    
    
    6,659
    
    
    
    11,998
    
    
    
    1.7
    %
    
    
    2.7
    %Bank Charges and armored
carrier expenses
    
    
    3,174
    
    
    
    3,477
    
    
    
    2.7
    %
    
    
    2.2
    %
    
    
    9,937
    
    
    
    10,400
    
    
    
    2.5
    %
    
    
    2.3
    %Other
    
    
    9,639
    
    
    
    16,142
    
    
    
    8.2
    %
    
    
    10.2
    %
    
    
    32,621
    
    
    
    40,612
    
    
    
    8.1
    %
    
    
    9.0
    %Total operating expenses
    
    $
    77,569
    
    
    $
    93,388
    
    
    
    65.6
    %
    
    
    59.4
    %
    
    $
    264,734
    
    
    $
    271,431
    
    
    
    65.6
    %
    
    
    60.1
    %
 Three Months Ended March 31, 2010 compared to Three Months Ended March 31, 2009
   Nine Months Ended March 31, 2010 compared to Nine Months Ended March 31, 2009
   52




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##### Table of Contents



Corporate and Other Expense Analysis
 Three Months Ended March 31,
    
    Nine Months Ended March 31,(Percentage of total
    
    
    
    
    
    
    
    
    
    (Percentage of total($ in thousands)
    
    revenue)
    
    ($ in thousands)
    
    revenue)2009
    
    2010
    
    2009
    
    2010
    
    2009
    
    2010
    
    2009
    
    2010Corporate expenses
    
    $
    15,452
    
    
    $
    22,068
    
    
    
    13.1
    %
    
    
    14.0
    %
    
    $
    52,566
    
    
    $
    65,368
    
    
    
    13.0
    %
    
    
    14.5
    %Other depreciation and
amortization
    
    
    925
    
    
    
    2,490
    
    
    
    0.8
    %
    
    
    1.6
    %
    
    
    2,903
    
    
    
    4,652
    
    
    
    0.7
    %
    
    
    1.0
    %Interest expense, net
    
    
    10,346
    
    
    
    21,946
    
    
    
    8.8
    %
    
    
    13.9
    %
    
    
    32,560
    
    
    
    46,412
    
    
    
    8.1
    %
    
    
    10.3
    %Loss on extinguishment of debt
    
    
    
    
    
    
    718
    
    
    
    
    %
    
    
    0.5
    %
    
    
    
    
    
    
    9,531
    
    
    
    
    %
    
    
    2.1
    %Unrealized foreign exchange
gain
    
    
    
    
    
    
    (15,681
    )
    
    
    
    %
    
    
    (10.0)
    %
    
    
    
    
    
    
    (11,769
    )
    
    
    
    %
    
    
    (2.6)
    %Loss on derivatives not
designated as hedges
    
    
    
    
    
    
    18,634
    
    
    
    
    %
    
    
    11.8
    %
    
    
    
    
    
    
    21,909
    
    
    
    
    %
    
    
    4.8
    %Provision for litigation
settlements
    
    
    45
    
    
    
    26,627
    
    
    
    
    %
    
    
    16.9
    %
    
    
    554
    
    
    
    27,894
    
    
    
    0.1
    %
    
    
    6.2
    %Loss on store closings
    
    
    644
    
    
    
    1,507
    
    
    
    0.5
    %
    
    
    1.0
    %
    
    
    6,137
    
    
    
    3,157
    
    
    
    1.5
    %
    
    
    0.7
    %Other (income) expense
    
    
    (877
    )
    
    
    261
    
    
    
    (0.7)
    %
    
    
    0.2
    %
    
    
    (6,546
    )
    
    
    1,685
    
    
    
    (1.6)
    %
    
    
    0.4
    %Income tax provision (benefit)
    
    
    8,361
    
    
    
    (2,332
    )
    
    
    7.1
    %
    
    
    (1.5)
    %
    
    
    23,970
    
    
    
    11,538
    
    
    
    5.9
    %
    
    
    2.6
    %
 Three Months Ended March 31, 2010 compared to Three Months Ended March 31, 2009
 Corporate Expenses
  Other Depreciation and Amortization
  Extinguishment of Debt and Loss on Derivatives Not Designated as Hedges
  Interest Expense
   53




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
    
    Subsequent to the prepayment of the majority of the Canadian term debt on December 23,
2009,  with the proceeds from our $600.0 million senior note offering
 completed in  December 2009 we discontinued prospectively hedge accounting on these cross-currency swaps. In
accordance with the Derivatives and Hedging Topic of the FASB Codification, we were
required to continue to report the net loss related to the discontinued cash flow hedge in
other comprehensive income included in shareholders equity and subsequently reclassify
such amounts into earnings over the remaining original term of the derivative when the
hedged forecasted transactions are recognized in earnings. This resulted in a $1.6 million
non-cash interest charge for the quarter ended March 31, 2010. Due to the newly issued
$600.0 million principal 10.375% Senior Notes due 2016 in Canada, we will continue to
reclassify such amounts into earnings over the remaining original term of the derivative.
 
    
    Subsequent to the early settlement in May 2009 of its two cross-currency interest rate
swaps hedging variable-rate borrowings at our foreign subsidiary in the United Kingdom, we
discontinued prospectively hedge accounting on these cross-currency swaps. In accordance
with the Derivatives and Hedging Topic of the FASB Codification, we were required to
continue to report the net loss related to the discontinued cash flow hedge in other
comprehensive income included in shareholders equity and subsequently reclassify such
amounts into earnings over the remaining original term of the derivative when the hedged
forecasted transactions are recognized in earnings. As a result of the prepayment of
substantially all of the United Kingdoms term debt on December 23, 2009, we reclassified
primarily all of the U.K.s remaining net loss from other comprehensive income into
earnings during the prior fiscal quarter ended December 31, 2009. That resulted in a
charge of $3.9 million which was included in Loss on Extinguishment of Debt.
 Unrealized Foreign Exchange Gain
  Loss on derivatives not designated as hedges
  Provision for Litigation Settlements
  Loss on Store Closings
  Income Tax Provision
  54




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##### Table of Contents



Deferred
    
    
    Valuation
    
    
    Net DeferredTax Asset
    
    
    Allowance
    
    
    Tax AssetBalance at December 31, 2009
    
    $
    129.4
    
    
    $
    82.6
    
    
    $
    46.8U.S. increase/(decrease)
    
    
    (0.8
    )
    
    
    (0.8
    )
    
    
    Foreign increase/(decrease)
    
    
    1.9
    
    
    
    3.0
    
    
    
    (1.1
    )Balance at March 31, 2010
    
    $
    130.5
    
    
    $
    84.8
    
    
    $
    45.7
      55




---



##### Table of Contents



Nine Months Ended March 31, 2010 compared to Nine Months Ended March 31, 2009
 Corporate Expenses
  Other Depreciation and Amortization
  Extinguishment of Debt and Loss on Derivatives Not Designated as Hedges
  Interest Expense
  Accounting for Convertible Debt Instruments That May Be
Settled Upon Conversion (Including Partial Cash Settlement)
 
    
    Subsequent to the prepayment of the majority of the Canadian term debt on December 23,
2009, with the proceeds  from our $600.0 million senior note offering
completed in December 2009 we discontinued hedge accounting on these cross-currency swaps. In accordance with
the Derivatives and Hedging Topic of the FASB Codification, we were required to continue to
report the net loss related to the discontinued cash flow hedge in other comprehensive
income included in shareholders equity and subsequently reclassify such amounts into
earnings over the remaining original term of the derivative when the hedged forecasted
transactions are recognized in earnings. This resulted in a $1.7 million non-cash interest
charge for the nine months ended March 31, 2010. Due to the newly issued $600.0 million
principal 10.375% Senior Notes due 2016 in Canada, we will continue to reclassify such
amounts into earnings over the remaining original term of the derivative.
 
    
    Subsequent to the early settlement in May 2009 of its two cross-currency interest rate
swaps hedging variable-rate borrowings at our foreign subsidiary in the United Kingdom, we
discontinued hedge accounting on these cross-currency swaps. In accordance with the
Derivatives and Hedging Topic of the FASB Codification, we were required to continue to
report the net loss related to the discontinued cash flow hedge in other comprehensive
income included in shareholders equity and subsequently reclassify such amounts into
earnings over the remaining original term of the derivative when the hedged
 56




---



##### Table of Contents



forecasted transactions are recognized in earnings. This resulted in a $0.7 million non-cash
interest charge for the nine months ended March 31, 2010. As a result of the prepayment of
substantially all of the United Kingdoms term debt on December 23, 2009, we reclassified
primarily all of the U.K.s remaining net loss from other comprehensive income into earnings
during the prior fiscal quarter ended December 31, 2009. That resulted in a charge of $3.9
million which was included in Loss on Extinguishment of Debt.
 Unrealized Foreign Exchange Gain
  Loss on derivatives not designated as hedges
  Provision for Litigation Settlements
  Loss on Store Closings
  Income Tax Provision
  57




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##### Table of Contents



NetDeferred
    
    
    Valuation
    
    
    DeferredTax Asset
    
    
    Allowance
    
    
    Tax AssetBalance at June 30, 2009
    
    $
    130.4
    
    
    $
    89.8
    
    
    $
    40.6U.S. increase/(decrease)
    
    
    (2.2
    )
    
    
    (2.2
    )
    
    
    Foreign increase/(decrease)
    
    
    2.3
    
    
    
    (2.8
    )
    
    
    5.1Balance at March 31, 2010
    
    $
    130.5
    
    
    $
    84.8
    
    
    $
    45.7
      58




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##### Table of Contents



Discussion and analysis for each geographic segment
   Three Months Ended March 31,
    
    Nine Months Ended March 31,Percent/
    
    
    
    
    
    
    
    
    
    Percent/($ in thousands)
    
    Margin
    
    ($ in thousands)
    
    Margin2009
    
    2010
    
    Change
    
    2009
    
    2010
    
    ChangeRevenue:United States (1)
    
    $
    38,673
    
    
    $
    35,217
    
    
    
    (8.9)
    %
    
    $
    121,911
    
    
    $
    104,701
    
    
    
    (14.1
    )%Operating margin
    
    
    19.7
    %
    
    
    25.0
    %
    
    5.3
    pts.
    
    
    13.7
    %
    
    
    19.3
    %
    
    5.6
    pts.Dealers Financial
Services
    
    $
    
    
    
    $
    6,893
    
    
    
    100.0
    %
    
    $
    
    
    
    $
    7,514
    
    
    
    100.0
    %Operating margin
    
    
    
    %
    
    
    64.6
    %
    
    64.6
    pts.
    
    
    
    %
    
    
    64.4
    %
    
    64.4
    pts.Canada
    
    $
    51,942
    
    
    $
    71,020
    
    
    
    36.7
    %
    
    $
    180,414
    
    
    $
    204,329
    
    
    
    13.3
    %Operating margin
    
    
    42.2
    %
    
    
    46.7
    %
    
    4.5
    pts.
    
    
    45.1
    %
    
    
    48.5
    %
    
    3.4
    pts.United Kingdom
    
    $
    27,549
    
    
    $
    44,218
    
    
    
    60.5
    %
    
    $
    101,088
    
    
    $
    135,353
    
    
    
    33.9
    %Operating margin
    
    
    40.0
    %
    
    
    39.7
    %
    
    -0.3
    pts.
    
    
    40.2
    %
    
    
    41.5
    %
    
    1.3
    pts.Total Revenue
    
    $
    118,164
    
    
    $
    157,348
    
    
    
    33.2
    %
    
    $
    403,413
    
    
    $
    451,897
    
    
    
    12.0
    %Operating margin
    
    $
    40,595
    
    
    $
    63,960
    
    
    
    57.6
    %
    
    $
    138,679
    
    
    $
    180,466
    
    
    
    30.1
    %Operating margin
percent
    
    
    34.4
    %
    
    
    40.6
    %
    
    6.2
    pts.
    
    
    34.4
    %
    
    
    39.9
    %
    
    5.5
    pts.
  Three Months Ended March 31,
    
    Nine Months Ended March 31,Pre-tax
    
    
    
    
    
    
    
    
    
    Pre-taxRevenue
    
    Income/(Loss)
    
    Revenue
    
    Income/(Loss)2009
    
    2010
    
    2009
    
    2010
    
    2009
    
    2010
    
    2009
    
    2010United States (1)
    
    
    32.7
    %
    
    
    22.4
    %
    
    
    (18.4)
    %
    
    
    65.4
    %
    
    
    30.2
    %
    
    
    23.2
    %
    
    
    (41.2)
    %
    
    
    (193.2
    )%Dealers Financial Services
    
    
    
    %
    
    
    4.4
    %
    
    
    
    %
    
    
    (21.0)
    %
    
    
    
    %
    
    
    1.7
    %
    
    
    
    %
    
    
    28.4
    %Canada
    
    
    44.0
    %
    
    
    45.1
    %
    
    
    72.8
    %
    
    
    132.5
    %
    
    
    44.7
    %
    
    
    45.1
    %
    
    
    94.7
    %
    
    
    87.8
    %United Kingdom
    
    
    23.3
    %
    
    
    28.1
    %
    
    
    45.6
    %
    
    
    (76.9)
    %
    
    
    25.1
    %
    
    
    30.0
    %
    
    
    46.5
    %
    
    
    177.0
    %Total
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
 
 (1)
    
    For the three and nine months ended March 31, 2010 the results of
Poland is included with the United States results. Three Months Ended March 31, 2010 compared to Three Months Ended March 31, 2009
 United States
  59




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##### Table of Contents



Dealers Financial Services (DFS)
  Canada
   60




---



##### Table of Contents



United Kingdom
    Nine Months Ended March 31, 2010 compared to Nine Months Ended March 31, 2009
 United States
   61




---



##### Table of Contents



Dealers Financial Services (DFS)
  Canada
    62




---



##### Table of Contents



United Kingdom
    Changes in Financial Condition
  Liquidity and Capital Resources
    63




---



##### Table of Contents



Credit Facilities
   Revolving Credit Facilities
 United States Revolving Credit Facility. OPCO is the borrower under the U.S. Revolving
Facility. A portion of the U.S. Revolving Facility ($7.5 million) terminates on October 30,
2011, and the remainder ($67.5 million) will terminate on December 31, 2014. The portion of
the U.S. Revolving Facility that expires on October 30, 2011 bears an interest rate of LIBOR
(but not less than 2%) plus 375 basis points, subject to reductions as we reduce our
leverage. The portion that expires on December 31, 2014 bears an interest rate of LIBOR (but
not less than 2%) plus 500 basis points, subject to reductions as we reduce our leverage. The
facility may be subject to mandatory reduction and the revolving loans subject to mandatory
prepayment (after prepayment of the term loans under the Credit Agreement), principally in an
amount equal to 50% of excess cash flow (as defined in the Credit Agreement). DFGs borrowing
capacity under the U.S. Revolving Facility is limited to the lesser of the total commitment
of $75.0 million or 85% of certain domestic liquid assets plus $30.0 million. Under this
revolving facility, up to $30.0 million may be used in connection with letters of credit. At
March 31, 2010, the borrowing capacity was $64.9 million. At March 31, 2010, there was $14.2
million of outstanding indebtedness under the U.S. Revolving Facility and $13.6 million
outstanding in letters of credit issued by Wells Fargo Bank, N.A. which guarantee the
performance of certain of our contractual obligations.
 Canadian Revolving Credit Facility.National Money Mart Company, OPCOs wholly owned indirect
Canadian subsidiary, is the borrower under the Canadian Revolving Facility. A portion of the
Canadian Revolving Facility (C$2.7 million) terminates on October 30, 2011, and the remainder
(C$25.8 million) will terminate on December 31, 2014. The portion that expires on October
30, 2011 bears an interest rate of CDOR (but not less than 2%) plus 375 basis points, subject
to reductions as we reduce our leverage. The portion that expires on December 31, 2014 bears
an interest rate of CDOR (but not less than 2%) plus 500 basis points, subject to reductions
as we reduce our leverage. The facility may be subject to mandatory reduction and the
revolving loans subject to mandatory prepayment (after prepayment of the term loans under the
Credit Agreement), principally in an amount equal to 50% of excess cash flow (as defined in
the Credit Agreement). National Money Mart
 64




---



##### Table of Contents



Companys borrowing capacity under the Canadian Revolving Facility is limited to the lesser
of the total commitment of C$28.5 million or 85% of certain combined liquid assets of
National Money Mart Company and Dollar Financial U.K. Limited and their respective
subsidiaries. At March 31, 2010, the borrowing capacity was C$28.5 million. There was no
outstanding indebtedness under the Canadian facility at March 31, 2010.
 United Kingdom Overdraft Facility. In the third quarter of fiscal 2008, our U.K subsidiary
entered into an overdraft facility which provides for a commitment of up to GBP 5.0 million.
There was no outstanding indebtedness under the United Kingdom facility at March 31, 2010. We
have the right of offset under the overdraft facility, by which we net our cash bank accounts
with our lender and the balance on the overdraft facility. Amounts outstanding under the
United Kingdom overdraft facility bear interest at a rate of the Bank Base Rate (0.5% at
March 31, 2010) plus 2.0%. Interest accrues on the net amount of the overdraft facility and
the cash balance.
 Debt Due Within One Year.
 Long-Term Debt.
    65




---



##### Table of Contents



Operating Leases.
  Less than
    
    
    1-3
    
    
    4-5
    
    
    After 5Total
    
    
    1 Year
    
    
    Years
    
    
    Years
    
    
    YearsRevolving credit facilities
    
    $
    14,200
    
    
    $
    14,200
    
    
    $
    
    
    
    $
    
    
    
    $
    Long-term debt:10.375% Senior Notes due 2016
    
    
    600,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    600,0002.875% Senior Convertible Notes due 2027
    
    
    44,800
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    44,8003.0% Senior Convertible Notes due 2028
    
    
    120,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    120,000Term loans due 2012
    
    
    1,593
    
    
    
    17
    
    
    
    1,576
    
    
    
    
    
    
    
    Term loans due 2014
    
    
    16,897
    
    
    
    184
    
    
    
    350
    
    
    
    16,363
    
    
    
    Operating lease obligations
    
    
    145,663
    
    
    
    35,525
    
    
    
    52,339
    
    
    
    31,001
    
    
    
    26,798Total contractual cash obligations
    
    $
    943,153
    
    
    $
    49,926
    
    
    $
    54,265
    
    
    $
    47,364
    
    
    $
    791,598
  Balance Sheet Variations
 March 31, 2010 compared to June 30, 2009 .
   
    
    Continued improvements in U.S. collections and our actions, taken in an effort to
decrease our risk exposure by reducing the amount that we are willing to loan to certain
customer segments. The historical loss rates (expressed as a percentage of loan amounts
originated for the last twelve months applied against the principal balance of outstanding
loans) have continued to
 66




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##### Table of Contents



decline. The ratio of the allowance for loan losses related to
U.S. short-term consumer loans decreased by 32.4% from 4.6% at June 30, 2009 compared to
3.1% at March 31, 2010.
    
    In constant dollars, the Canadian ratio of allowance for loan losses has increased from
3.3% at June 30, 2009 to 3.6% at March
31, 2010. The primary factor driving this increase relates to an increase to reserves
associated with an installment loan product that is being discontinued. The Loans
receivable, net continue to show improvement with the loan loss reserve as a percentage of
outstanding principle dropping from 2.9% at June 30, 2009 to 2.2% at March 31, 2010.
    
    In constant dollars, the U.K.s allowance for loan losses remained relatively constant
at approximately 8.5% of outstanding principal at June 30, 2009 and March 31, 2010.
       Seasonality and Quarterly Fluctuations
  Impact of Recent Accounting Pronouncement
  67




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##### Table of Contents



Cautionary Statement for Purposes of the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995
   68




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##### Table of Contents



DOLLAR FINANCIAL CORP.
SUPPLEMENTAL STATISTICAL DATA
 March 31,2009
    
    
    2010Company Operating Data:Stores in operation:Company-owned
    
    
    1,078
    
    
    
    1,054Franchised stores and check cashing merchants
    
    
    186
    
    
    
    124Total
    
    
    1,264
    
    
    
    1,178
 Three Months Ended
    
    Nine Months EndedMarch 31,
    
    March 31,2009
    
    2010
    
    2009
    
    2010Check Cashing Data:Face amount of checks cashed (in millions)
    
    $
    1,059
    
    
    $
    1,004
    (1)
    
    $
    3,514
    
    
    $
    2,992
    (1)Face amount of average check
    
    $
    492
    
    
    $
    545
    (2)
    
    $
    493
    
    
    $
    506
    (2)Average fee per check
    
    $
    17.31
    
    
    $
    20.21
    (3)
    
    $
    17.87
    
    
    $
    19.19
    (3)Number of checks cashed (in thousands)
    
    
    2,152
    
    
    
    1,842
    
    
    
    7,132
    
    
    
    5,917
 Three Months Ended
    
    
    Nine Months EndedMarch 31,
    
    
    March 31,2009
    
    
    2010
    
    
    2009
    
    
    2010Check Cashing Collections Data (in thousands):Face amount of returned checks
    
    $
    9,512
    
    
    $
    6,960
    
    
    $
    42,912
    
    
    $
    24,925Collections
    
    
    (7,700
    )
    
    
    (6,014
    )
    
    
    (32,087
    )
    
    
    (19,894
    )Net write-offs
    
    $
    1,812
    
    
    $
    946
    
    
    $
    10,825
    
    
    $
    5,031Collections as a percentage of returned checks
    
    
    81.0
    %
    
    
    86.4
    %
    
    
    74.8
    %
    
    
    79.8
    %Net write-offs as a percentage of check cashing
revenues
    
    
    4.9
    %
    
    
    2.5
    %
    
    
    8.5
    %
    
    
    4.4
    %Net write-offs as a percentage of the face amount
of checks cashed
    
    
    0.17
    %
    
    
    0.09
    %
    
    
    0.31
    %
    
    
    0.17
    %
 
 (1)
    
    Net of a $79 and $98 increase as a result of the impact of exchange rates for the three and nine months ended March 31, 2010, respectively.(2)
    
    Net of a $43 and $17 increase as a result of the impact of exchange rates for the three and nine months ended March 31, 2010, respectively.(3)
    
    Net of a $1.73 and $0.58 increase as a result of the impact of exchange rates for the three and nine months ended March 31, 2010, respectively. 69




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##### Table of Contents



Three Months Ended
    
    
    Nine Months EndedMarch 31th,
    
    
    March 31,2009
    
    
    2010
    
    
    2009
    
    
    2010U.S. company-funded consumer loan originations
    
    $
    128,647
    
    
    $
    111,840
    
    
    $
    456,094
    
    
    $
    387,062Canadian company-funded consumer loan originations
    
    
    165,470
    
    
    
    184,205
    (1)
    
    
    591,054
    
    
    
    592,366
    (1)U.K. company-funded consumer loan originations
    
    
    82,891
    
    
    
    103,587
    (2)
    
    
    285,095
    
    
    
    324,493
    (2)Total company-funded consumer loan originations
    
    $
    377,008
    
    
    $
    399,632
    
    
    $
    1,332,243
    
    
    $
    1,303,921U.S. Servicing revenues
    
    $
    433
    
    
    $
    
    
    
    $
    1,550
    
    
    $
    U.S. company-funded consumer loan revenues
    
    
    17,533
    
    
    
    15,047
    
    
    
    61,407
    
    
    
    51,085Canadian company-funded consumer loan revenues
    
    
    25,851
    
    
    
    36,270
    
    
    
    93,054
    
    
    
    109,592U.K. company-funded consumer loan revenues
    
    
    14,734
    
    
    
    20,567
    
    
    
    54,043
    
    
    
    61,681Total consumer lending revenues, net
    
    $
    58,551
    
    
    $
    71,884
    
    
    $
    210,054
    
    
    $
    222,358Gross charge-offs of company-funded consumer loans
    
    $
    38,324
    
    
    $
    33,856
    
    
    $
    146,582
    
    
    $
    113,742Recoveries of company-funded consumer loans
    
    
    (25,073
    )
    
    
    (24,667
    )
    
    
    (106,244
    )
    
    
    (86,993
    )Net charge-offs on company-funded consumer loans
    
    $
    13,251
    
    
    $
    9,189
    
    
    $
    40,338
    
    
    $
    26,749Gross charge-offs of company-funded consumer loans as
a percentage of total company-funded consumer loan
originations
    
    
    10.2
    %
    
    
    8.5
    %
    
    
    11.0
    %
    
    
    8.7
    %Recoveries of company-funded consumer loans as a
percentage of total company-funded consumer loan
originations
    
    
    6.7
    %
    
    
    6.2
    %
    
    
    8.0
    %
    
    
    6.6
    %Net charge-offs on company-funded consumer loans as a
percentage of total company-funded consumer loan
originations
    
    
    3.5
    %
    
    
    2.3
    %
    
    
    3.0
    %
    
    
    2.1
    %
 
 (1)
    
    Net of a $30.2 million and $46.2 million increase as a result of the impact of exchange rates for the three and nine months ended March 31, 2010, respectively.(2)
    
    Net of a $8.3 million increase and $3.9 million decrease as a result of the impact of exchange rates for the three and nine months March 31, 2010, respectively. 70




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##### Table of Contents



Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 Generally
  
    
    interest rates on revolving credit facilities; and
    
    foreign exchange rates generating translation gains and losses.
  Interest Rate Risk
  Foreign Currency Exchange Rate Risk
 Put Options
   71




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Cross-Currency Interest Rate Swaps
        72




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Item 4. CONTROLS AND PROCEDURES
 Evaluation of Disclosure Controls and Procedures
  Changes in Internal Control Over Financial Reporting
  73




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PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings
      74




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##### Table of Contents



Item 1A. Risk Factors
  
 Item 6. Exhibits
 Exhibit No.
    
    Description of Document10.1
    
    Settlement Agreement effective as of March 4, 2010 and executed as of May 6, 2010 by and among Kurt MacKinnon and Louise Parsons, as plaintiffs, and National Money Mart Company and Dollar Financial Group, Inc., as defendants31.1
    
    Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer31.2
    
    Rule 13a-14(a)/15d-14(a) Certification of Executive Vice President and Chief Financial Officer31.3
    
    Rule 13a-14(a)/15d-14(a) Certification of Senior Vice President of Finance and Corporate Controller32.1
    
    Section 1350 Certification of Chief Executive Officer32.2
    
    Section 1350 Certification of Executive Vice President and Chief Financial Officer32.3
    
    Section 1350 Certification of Senior Vice President of Finance and Corporate Controller
 
  75




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##### Table of Contents



SIGNATURE
  DOLLAR FINANCIAL CORP.Date: May 10, 2010
    
    *By:
Name:
    
    /s/ Randy Underwood

Randy UnderwoodTitle:
    
    Executive Vice
President and Chief
Financial Officer
(principal
financial and chief
accounting officer)
 
 *
    
    The signatory hereto is the principal financial and chief accounting
officer and has been duly authorized to sign on behalf of the registrant. 76