##### 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 September 30, 2009
 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(Do not check if a smaller reporting company)
Smaller reporting company o 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 September 30, 2009 (unaudited)
    
    
    3Interim Unaudited Consolidated Statements of Operations for the Three  Months Ended September 30, 2009 and 2008
    
    
    4Interim Consolidated Statements of Stockholders Equity as of June 30, 2009 and September 30, 2009 (unaudited)
    
    
    5Interim Unaudited Consolidated Statements of Cash Flows for the Three Months Ended September 30, 2009 and 2008
    
    
    6Notes to Interim Unaudited Consolidated Financial Statements
    
    
    7Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    27Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    44Item 4.
    
    Controls and Procedures
    
    
    45PART II.
    
    OTHER INFORMATIONItem 1.
    
    Legal Proceedings
    
    
    46Item 1A.
    
    Risk Factors
    
    
    47Item 5.
    
    Other Information
    
    
    47Item 6.
    
    Exhibits
    
    
    48Signature
    
    
    
    
    49EX-10.1EX-31.1EX-31.2EX-31.3EX-32.1EX-32.2EX-32.3
   Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer
 Rule 13(a)-14(a)/15d-14a Certification of Executive Vice President and Chief Financial Officer
 Rule 13a-14(a)/15d-14(a) Certification of Senior Vice President of Finance and Corporate Controller
 Section 1350 Certification of Chief Executive Officer
 Section 1350 Certification of Executive Vice President and Chief Financial Officer
 Section 1350 Certification of Senior Vice President of Finance and Corporate Controller
 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,
    
    
    September 30,2009
    
    
    2009(as adjusted, see
 Note 1)

    
    
    (unaudited)ASSETSCurrent AssetsCash and cash equivalents
    
    $
    209,602
    
    
    $
    226,665Loans receivable, net:Loans receivable
    
    
    126,826
    
    
    
    137,398Less: Allowance for loan losses
    
    
    (12,132
    )
    
    
    (13,393
    )Loans receivable, net
    
    
    114,694
    
    
    
    124,005Loans in default, net of an allowance of $17,000 and $18,021
    
    
    6,436
    
    
    
    6,831Other receivables
    
    
    7,299
    
    
    
    3,719Prepaid expenses and other current assets
    
    
    22,794
    
    
    
    21,490Current deferred tax asset, net of valuation allowance of $4,816 and $4,816
    
    
    39
    
    
    
    310Total current assets
    
    
    360,864
    
    
    
    383,020Deferred tax asset, net of valuation allowance of $84,972 and $87,223
    
    
    27,062
    
    
    
    25,724Property and equipment, net of accumulated depreciation of $99,803 and $106,403
    
    
    58,614
    
    
    
    59,204Goodwill and other intangibles
    
    
    454,347
    
    
    
    467,255Debt issuance costs, net of accumulated amortization of $6,815 and $7,792
    
    
    9,869
    
    
    
    9,556Other
    
    
    10,709
    
    
    
    11,547Total Assets
    
    $
    921,465
    
    
    $
    956,306LIABILITIES AND STOCKHOLDERS EQUITYCurrent LiabilitiesAccounts payable
    
    $
    36,298
    
    
    $
    33,345Income taxes payable
    
    
    14,834
    
    
    
    10,503Accrued expenses and other liabilities
    
    
    70,588
    
    
    
    81,570Debt due within one year
    
    
    5,880
    
    
    
    3,811Current deferred tax liability
    
    
    71
    
    
    
    1,180Total current liabilities
    
    
    127,671
    
    
    
    130,409Fair value of derivatives
    
    
    10,223
    
    
    
    36,239Long-term deferred tax liability
    
    
    18,876
    
    
    
    21,730Long-term debt
    
    
    530,425
    
    
    
    529,540Other non-current liabilities
    
    
    25,192
    
    
    
    18,520Stockholders equity:Common stock, $.001 par value: 55,500,000 shares authorized;
24,102,985 shares and 24,130,015 shares issued and outstanding at
June 30, 2009 and September 30, 2009, respectively
    
    
    24
    
    
    
    24Additional paid-in capital
    
    
    311,301
    
    
    
    312,675Accumulated deficit
    
    
    (110,581
    )
    
    
    (105,308
    )Accumulated other comprehensive income
    
    
    8,018
    
    
    
    12,103Total Dollar Financial Corp. stockholders equity
    
    
    208,762
    
    
    
    219,494Non-controlling interest
    
    
    316
    
    
    
    374Total stockholders equity
    
    
    209,078
    
    
    
    219,868Total Liabilities and Stockholders Equity
    
    $
    921,465
    
    
    $
    956,306
  3




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DOLLAR FINANCIAL CORP.
INTERIM UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share amounts)
 Three Months EndedSeptember 30,2008
    
    
    2009(as adjusted, see Note 1)Revenues:Check cashing
    
    $
    48,532
    
    
    $
    37,802Fees from consumer lending
    
    
    81,498
    
    
    
    78,989Money transfer fees
    
    
    7,610
    
    
    
    6,823Franchise fees and royalties
    
    
    1,177
    
    
    
    942Other
    
    
    14,259
    
    
    
    17,252Total revenues
    
    
    153,076
    
    
    
    141,808Store and regional expenses:Salaries and benefits
    
    
    40,803
    
    
    
    36,736Provision for loan losses
    
    
    15,251
    
    
    
    11,696Occupancy
    
    
    11,324
    
    
    
    10,847Depreciation
    
    
    3,592
    
    
    
    3,374Returned checks, net and cash shortages
    
    
    6,135
    
    
    
    2,264Telephone and communications
    
    
    2,079
    
    
    
    1,838Advertising
    
    
    2,812
    
    
    
    3,447Bank charges and armored carrier service
    
    
    3,633
    
    
    
    3,466Other
    
    
    13,637
    
    
    
    12,244Total store and regional expenses
    
    
    99,266
    
    
    
    85,912Store and regional margin
    
    
    53,810
    
    
    
    55,896Corporate and other expenses:Corporate expenses
    
    
    19,521
    
    
    
    20,351Other depreciation and amortization
    
    
    1,040
    
    
    
    1,052Interest expense, net
    
    
    11,547
    
    
    
    11,624Unrealized foreign exchange loss
    
    
    
    
    
    
    7,827Provision for litigation settlements
    
    
    509
    
    
    
    1,267Loss on store closings
    
    
    4,938
    
    
    
    318Other (income) expense, net
    
    
    (258
    )
    
    
    160Income before income taxes
    
    
    16,513
    
    
    
    13,297Income tax provision
    
    
    5,226
    
    
    
    7,966Net income
    
    
    11,287
    
    
    
    5,331Less: Net income attributable to non-controlling interests
    
    
    
    
    
    
    58Net income attributable to Dollar Financial Corp.
    
    $
    11,287
    
    
    $
    5,273Net income per share:Basic
    
    $
    0.47
    
    
    $
    0.22Diluted
    
    $
    0.46
    
    
    $
    0.22Weighted average shares outstanding:Basic
    
    
    24,178,350
    
    
    
    23,998,357Diluted
    
    
    24,371,126
    
    
    
    24,480,544
  4




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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
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,522
    
    
    
    4,522Cash flow hedges
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (437
    )
    
    
    (437
    )Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,273
    
    
    
    
    
    
    
    
    
    
    
    5,273Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,358Restricted stock grants
    
    
    36,329Stock options exercised
    
    
    1,042
    
    
    
    
    
    
    
    6
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6Vested portion of granted
restricted stock and
restricted stock units
    
    
    
    
    
    
    
    
    
    
    543
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    543Retirement of common stock
    
    
    (10,341
    )Other stock compensation
    
    
    
    
    
    
    
    
    
    
    825
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    825Net income attributable to
non-controlling interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    58
    
    
    
    
    
    
    
    58Balance, September 30, 2009 (unaudited)
    
    
    24,130,015
    
    
    $
    24
    
    
    $
    312,675
    
    
    $
    (105,308
    )
    
    $
    374
    
    
    $
    12,103
    
    
    $
    219,868
  5




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DOLLAR FINANCIAL CORP.
INTERIM UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
 Three Months EndedSeptember 30,2008
    
    
    2009Cash flows from operating activities:Net income
    
    $
    11,287
    
    
    $
    5,273Adjustments to reconcile net income to net cash provided by operating
activities:Depreciation and amortization
    
    
    5,390
    
    
    
    5,422Provision for loan losses
    
    
    15,251
    
    
    
    11,696Non-cash stock compensation
    
    
    2,292
    
    
    
    1,368Minority interest
    
    
    
    
    
    
    58Losses on store closings
    
    
    1,761
    
    
    
    155Unrealized
foreign exchange loss
    
    
    
    
    
    
    7,827Deferred tax provision
    
    
    380
    
    
    
    3,895Non-cash interest
    
    
    2,182
    
    
    
    2,394Change in assets and liabilities (net of effect of acquisitions):Increase in loans and other receivables
    
    
    (23,460
    )
    
    
    (14,670
    )(Increase) decrease in prepaid expenses and other
    
    
    (3,507
    )
    
    
    606Decrease in accounts payable, accrued expenses and other liabilities
    
    
    (7,222
    )
    
    
    (5,191
    )Net cash provided by operating activities
    
    
    4,354
    
    
    
    18,833Cash flows from investing activities:Additions to property and equipment
    
    
    (5,233
    )
    
    
    (5,514
    )Net cash used in investing activities
    
    
    (5,233
    )
    
    
    (5,514
    )Cash flows from financing activities:Proceeds from the exercise of stock options
    
    
    3,257
    
    
    
    6Purchase of company stock
    
    
    (3,469
    )
    
    
    Other debt payments
    
    
    (990
    )
    
    
    (7,991
    )Net increase in revolving credit facilities
    
    
    8,611
    
    
    
    Payment of debt issuance and other costs
    
    
    (103
    )
    
    
    (122
    )Net cash provided by (used in) financing activities
    
    
    7,306
    
    
    
    (8,107
    )Effect of exchange rate changes on cash and cash equivalents
    
    
    (11,446
    )
    
    
    11,851Net (decrease) increase in cash and cash equivalents
    
    
    (5,019
    )
    
    
    17,063Cash and cash equivalents at beginning of period
    
    
    209,714
    
    
    
    209,602Cash and cash equivalents at end of period
    
    $
    204,695
    
    
    $
    226,665
  6




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DOLLAR FINANCIAL CORP.
 NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 1. Summary of Significant Accounting Policies
 Basis of Presentation
  ® ® ® ®
  Subsequent
Event
  Use of Estimates
  Principles of Consolidation
  Reclassification
  Fair Value of Financial Instruments
  7




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DOLLAR FINANCIAL CORP.
 NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 1. Summary of Significant Accounting Policies (continued)
 Fair Value of Financial Instruments (continued)
  Earnings per Share
  Three Months EndedSeptember 30,2008
    
    2009Net income
    
    $
    11,287
    
    
    $
    5,273Reconciliation of denominator:Weighted average of common shares outstanding  basic 1
    
    
    24,178
    
    
    
    23,998Effect of dilutive stock options 2
    
    
    164
    
    
    
    221Effect of unvested restricted stock and restricted stock unit
grants
    
    
    29
    
    
    
    262Weighted average of common shares outstanding  diluted
    
    
    24,371
    
    
    
    24,481
 
 (1)
    
    Excludes 41 and 105 shares of unvested restricted stock, which are included in
total outstanding common shares as of September 30, 2008 and 2009, 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. Stock Based Employee Compensation
    8




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DOLLAR FINANCIAL CORP.
 NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 1. Summary of Significant Accounting Policies (continued)
 Stock Based Employee Compensation (continued)
   Three Months EndedSeptember 30,2008
    
    2009Expected volatility
    
    
    43.9
    %
    
    
    55.0
    %Expected life (years)
    
    
    6.0
    
    
    
    6.0Risk-free interest rate
    
    
    3.42
    %
    
    
    3.30
    %Expected dividends
    
    None
    
    NoneWeighted average fair value
    
    $
    7.84
    
    
    $
    8.72
  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
    
    
    196,246
    
    
    $
    15.81Exercised
    
    
    (1,042
    )
    
    $
    5.82Forfeited and expired
    
    
    (1,926
    )
    
    $
    17.75Options outstanding at September 30,
2009
    
    
    1,768,462
    
    
    $
    14.70
    
    
    
    8.1
    
    
    $
    4.6Exercisable at September 30, 2009
    
    
    979,691
    
    
    $
    16.25
    
    
    
    7.0
    
    
    $
    1.5
   9




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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
    
    
    $
    11.03Vested
    
    
    (231
    )
    
    $
    27.04Outstanding at September 30, 2009
    
    
    105,227
    
    
    $
    10.99
   WeightedRestricted
    
    AverageStock Unit
    
    Grant-DateAwards
    
    Fair-ValueOutstanding at June 30, 2009
    
    
    413,926
    
    
    $
    11.25Granted
    
    
    200,829
    
    
    $
    15.95Vested
    
    
    (36,896
    )
    
    $
    18.80Forfeited
    
    
    (1,563
    )
    
    $
    17.46Outstanding at September 30, 2009
    
    
    576,296
    
    
    $
    12.39
  Recent Accounting Pronouncements
 Business Combinations
 Non-controlling Interests in
Consolidated Financial Statements
 10




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DOLLAR FINANCIAL CORP.
 NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 1. Summary of Significant Accounting Policies (continued)
 Recent Accounting Pronouncements (continued)
 Accounting for Convertible Debt
Instruments That May Be Settled Upon Conversion (Including Partial
Cash Settlement)
   Three Months Ended September 30, 2008As PreviouslyConsolidated Statement of Operations
    
    Reported
    
    Adjustment
    
    As AdjustedInterest expense, net
    
    $
    9,449
    
    
    $
    2,098
    
    
    $
    11,547Net income
    
    
    13,385
    
    
    
    (2,098
    )
    
    
    11,287
 June 30, 2009As PreviouslyConsolidated Balance Sheet
    
    Reported
    
    Adjustment
    
    As AdjustedDebt issuance costs, net
    
    
    11,044
    
    
    
    (1,175
    )
    
    
    9,869Long-term debt
    
    
    569,110
    
    
    
    (38,685
    )
    
    
    530,425Additional paid-in capital
    
    
    257,385
    
    
    
    53,916
    
    
    
    311,301Accumulated deficit
    
    
    (94,175
    )
    
    
    (16,406
    )
    
    
    (110,581
    )
  Principal amount of convertible notes
    
    $
    200,000Unamortized discount (1)
    
    
    38,685Net carrying amount
    
    
    161,315
 
 (1)
    
    Remaining recognition period of 3.5 years as of June 30, 2009 Disclosures about Fair Value of
Financial Instruments
 Accounting Standards Codification
and the Hierarchy of Generally Accepted Accounting Principles
 2. Acquisitions
   11




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




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DOLLAR FINANCIAL CORP.
 NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 2. Acquisitions (continued)
  Balance at June 30, 2008
    
    $
    419.4Acquisitions:Express Finance Limited
    
    
    6.0Robert Biggar Limited
    
    
    4.3Optima, S.A.
    
    
    4.6Various small acquisitions
    
    
    1.5Foreign currency adjustment
    
    
    (29.3
    )Balance at June 30, 2009
    
    $
    406.5Purchase accounting adjustments:Robert Biggar Limited
    
    
    0.3Optima, S.A.
    
    
    0.3Foreign currency adjustment
    
    
    9.0Balance at September 30, 2009
    
    $
    416.1
  Three months endedSeptember 30,2008(Unaudited in thousandsexcept per share amounts)Revenue
    
    $
    157,429Net income
    
    $
    12,028Net income per common share  basic
    
    $
    0.50Net income per common share  diluted
    
    $
    0.49
 3. Goodwill and Other Intangibles
  United
    
    
    
    
    
    
    UnitedStates
    
    
    Canada
    
    
    Kingdom
    
    
    TotalBalance at June 30, 2008
    
    $
    205,210
    
    
    $
    141,843
    
    
    $
    72,298
    
    
    $
    419,351Acquisitions
    
    
    5,125
    
    
    
    51
    
    
    
    11,287
    
    
    
    16,463Foreign currency translation adjustments
    
    
    
    
    
    
    (17,441
    )
    
    
    (11,819
    )
    
    
    (29,260
    )Balance at June 30, 2009
    
    $
    210,335
    
    
    $
    124,453
    
    
    $
    71,766
    
    
    $
    406,554Acquisitions and purchase accounting adjustments
    
    
    257
    
    
    
    
    
    
    
    264
    
    
    
    521Foreign currency translation adjustments
    
    
    494
    
    
    
    10,488
    
    
    
    (1,952
    )
    
    
    9,030Balance at September 30, 2009
    
    $
    211,086
    
    
    $
    134,941
    
    
    $
    70,078
    
    
    $
    416,105
 13




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DOLLAR FINANCIAL CORP.
 NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 3. Goodwill and Other Intangibles (continued)
  June 30,
    
    
    September 30,2009
    
    
    2009Gross
    
    
    GrossCarrying
    
    
    CarryingAmount
    
    
    AmountNon-amortized intangible assets:Goodwill
    
    $
    406,554
    
    
    $
    416,105Reacquired franchise rights
    
    
    47,793
    
    
    
    51,150$
    454,347
    
    
    $
    467,255
     4. Contingent Liabilities
   14




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DOLLAR FINANCIAL CORP.
 NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 4. Contingent Liabilities (continued)
 Canadian Legal Proceedings
   Day Young Young
 Parsons
   15




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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)
   California Legal Proceedings
 Bufil Bufil
  We The People Legal Proceedings
    16




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DOLLAR FINANCIAL CORP.
 NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 4. Contingent Liabilities (continued)
 We The People Legal Proceedings (continued)
       17




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DOLLAR FINANCIAL CORP.
 NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 4. Contingent Liabilities (continued)
 We The People Legal Proceedings (continued)
   5. Capital Stock
    6. Fair Value Measurements
   18




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##### Table of Contents



DOLLAR FINANCIAL CORP.
 NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 6. Fair Value Measurements (continued)
   Assets and Liabilities Measured at Fair Value on a Recurring Basis at September 30, 2009
( in thousands)
 Quoted Prices inActive Markets
    
    Significantfor Identical
    
    Other
    
    Significant
    
    Balance atAssets and
    
    Observable
    
    Unobservable
    
    September 30,Liabilities (Level 1)
    
    Inputs (Level 2)
    
    Inputs (Level 3)
    
    2009AssetsDerivative
financial
instruments
    
    $
    
    
    
    $
    324
    
    
    $
    
    
    
    $
    324LiabilitiesDerivative
financial
instruments
    
    $
    
    
    
    $
    36,239
    
    
    $
    
    
    
    $
    36,239
  7. Segment Information
  19




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##### Table of Contents



DOLLAR FINANCIAL CORP.
 NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 7. Segment Information (continued)
  United
    
    
    
    
    
    
    UnitedStates
    
    
    Canada
    
    
    Kingdom
    
    
    TotalAs of and for the three months ended
September 30, 2008Total assets
    
    $
    284,813
    
    
    $
    461,286
    
    
    $
    172,102
    
    
    $
    918,201Goodwill and other intangibles, net
    
    
    205,509
    
    
    
    182,058
    
    
    
    67,781
    
    
    
    455,348Sales to unaffiliated customers:Check cashing
    
    
    14,437
    
    
    
    20,543
    
    
    
    13,552
    
    
    
    48,532Fees from consumer lending
    
    
    22,803
    
    
    
    37,197
    
    
    
    21,498
    
    
    
    81,498Money transfer fees
    
    
    1,592
    
    
    
    4,409
    
    
    
    1,609
    
    
    
    7,610Franchise fees and royalties
    
    
    538
    
    
    
    639
    
    
    
    
    
    
    
    1,177Other
    
    
    2,860
    
    
    
    7,525
    
    
    
    3,874
    
    
    
    14,259Total sales to unaffiliated customers
    
    
    42,230
    
    
    
    70,313
    
    
    
    40,533
    
    
    
    153,076Provision for loan losses
    
    
    6,978
    
    
    
    5,895
    
    
    
    2,378
    
    
    
    15,251Interest expense, net
    
    
    6,362
    
    
    
    3,267
    
    
    
    1,918
    
    
    
    11,547Depreciation and amortization
    
    
    1,457
    
    
    
    1,716
    
    
    
    1,459
    
    
    
    4,632Provision for litigation settlements
    
    
    509
    
    
    
    
    
    
    
    
    
    
    
    509Loss on store closings
    
    
    2,647
    
    
    
    2,291
    
    
    
    
    
    
    
    4,938Other income, net
    
    
    
    
    
    
    (182
    )
    
    
    (76
    )
    
    
    (258
    )Income before income taxes
    
    
    (10,965
    )
    
    
    18,650
    
    
    
    8,828
    
    
    
    16,513Income tax provision
    
    
    (51
    )
    
    
    3,171
    
    
    
    2,106
    
    
    
    5,226
 United
    
    
    
    
    
    
    UnitedStates
    
    
    Canada
    
    
    Kingdom
    
    
    TotalAs of and for the three months ended
September 30, 2009Total assets
    
    $
    276,685
    
    
    $
    503,549
    
    
    $
    176,072
    
    
    $
    956,306Goodwill and other intangibles, net
    
    
    211,382
    
    
    
    180,151
    
    
    
    75,722
    
    
    
    467,255Sales to unaffiliated customers:Check cashing
    
    
    10,906
    
    
    
    17,339
    
    
    
    9,557
    
    
    
    37,802Fees from consumer lending
    
    
    19,156
    
    
    
    35,216
    
    
    
    24,617
    
    
    
    78,989Money transfer fees
    
    
    1,276
    
    
    
    4,048
    
    
    
    1,499
    
    
    
    6,823Franchise fees and royalties
    
    
    355
    
    
    
    587
    
    
    
    
    
    
    
    942Other
    
    
    2,502
    
    
    
    6,932
    
    
    
    7,818
    
    
    
    17,252Total sales to unaffiliated customers
    
    
    34,195
    
    
    
    64,122
    
    
    
    43,491
    
    
    
    141,808Provision for loan losses
    
    
    4,206
    
    
    
    3,771
    
    
    
    3,719
    
    
    
    11,696Interest expense, net
    
    
    4,656
    
    
    
    5,369
    
    
    
    1,599
    
    
    
    11,624Depreciation and amortization
    
    
    1,292
    
    
    
    1,578
    
    
    
    1,556
    
    
    
    4,426Unrealized foreign exchange loss (gain)
    
    
    13
    
    
    
    (89
    )
    
    
    7,903
    
    
    
    7,827Provision for litigation settlements
    
    
    1,267
    
    
    
    
    
    
    
    
    
    
    
    1,267
 20




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##### Table of Contents



DOLLAR FINANCIAL CORP.
 NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 7. Segment Information (continued)
 United
    
    
    
    
    
    UnitedStates
    
    Canada
    
    Kingdom
    
    TotalLoss on store closings
    
    
    174
    
    
    
    208
    
    
    
    (64
    )
    
    
    318Other expense (income), net
    
    
    218
    
    
    
    (29
    )
    
    
    (29
    )
    
    
    160(Loss) income before income taxes
    
    
    (7,495
    )
    
    
    18,259
    
    
    
    2,533
    
    
    
    13,297Income tax provision
    
    
    1,334
    
    
    
    5,755
    
    
    
    877
    
    
    
    7,966
 8. Derivative Instruments and Hedging Activities
 Risk Management Objective of Using Derivatives
  Cash Flow Hedges of Foreign Exchange Risk
   Foreign Currency Derivates
    
    Notional
    
    NotionalSold
    
    PurchasedCAD Put/USD Call Options
    
    
    C$10,500,000
    
    
    $
    9,705,825GBP Put/USD Call Options
    
    GBP3,900,000
    
    $
    6,435,000
 Cash Flow Hedges of Multiple Risks
   21




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##### Table of Contents



DOLLAR FINANCIAL CORP.
 NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 8. Derivative Instruments and Hedging Activities (continued)
    Pay Fixed
    
    Pay Fixed Strike
    
    Receive Floating
    
    Receive FloatingForeign Currency Derivates
    
    Notional
    
    Rate
    
    Notional
    
    IndexUSD-CAD Cross Currency Swap
    
    CAD184,029,651
    
    
    7.135
    %
    
    $
    160,050,000
    
    
    3 mo. LIBOR + 2.75% per annumUSD-CAD Cross Currency Swap
    
    CAD61,614,448
    
    
    7.130
    %
    
    $
    53,350,000
    
    
    3 mo. LIBOR + 2.75% per annumUSD-CAD Cross Currency Swap
    
    CAD84,055,350
    
    
    7.070
    %
    
    $
    72,750,000
    
    
    3 mo. LIBOR + 2.75% per annum
 Tabular Disclosures
  Tabular Disclosure of Fair Values of Derivative Instruments(1)Asset Derivatives
    
    
    Liability DerivativesAs of September 30, 2009
    
    
    As of September 30, 2009Balance Sheet
    
    
    
    
    
    
    Balance SheetLocation
    
    
    Fair Value
    
    
    Location
    
    
    Fair ValueDerivatives designated as hedging instrumentsForeign Exchange Contracts
    
    Prepaid Expenses
    
    $
    324
    
    
    Other Liabilities
    
    $
    Cross Currency Swaps
    
    Derivatives
    
    
    
    
    
    Derivatives
    
    
    36,239Total derivatives designated as hedging
instruments
    
    
    
    
    
    $
    324
    
    
    
    
    
    
    $
    36,239
 
 (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. 22




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##### Table of Contents



DOLLAR FINANCIAL CORP.
 NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 8. Derivative Instruments and Hedging Activities (continued)
  Tabular Disclosure of the Effect of Derivative Instruments on the Consolidated Statement of Operations for the Three Months Ending
 September 30, 2009
 Location of Gain or
    
    
    Amount of Gain or(Loss) Recognized
    
    
    (Loss) RecognizedAmount of Gain or
    
    
    
    
    
    
    
    
    
    
    in Income on
    
    
    in Income on(Loss) Recognized
    
    
    
    
    
    
    
    
    
    
    Derivative
    
    
    Derivativein OCI on
    
    
    Location of Gain or
    
    
    Amount of Gain or
    
    
    (Ineffective
    
    
    (IneffectiveDerivative
    
    
    (Loss) Reclassified
    
    
    (Loss) Reclassified
    
    
    Portion and Amount
    
    
    Portion and AmountDerivatives in SFAS 133
    
    (Effective
    
    
    from Accumulated
    
    
    from Accumulated
    
    
    Excluded from
    
    
    Excluded fromCash Flow Hedging
    
    Portion), net of
    
    
    OCI into Income
    
    
    OCI into Income
    
    
    Effectiveness
    
    
    EffectivenessRelationships
    
    tax
    
    
    (Effective Portion)
    
    
    (Effective Portion)
    
    
    Testing)
    
    
    Testing)Foreign Exchange Contracts
    
    $
    (46
    )
    
    Foreign currency gain / (loss)
    
    $
    
    
    
    Other income /(expense)
    
    $
    Interest Expense
    
    
    (364
    )
    
    Other income /(expense)
    
    
    9Cross Currency Swaps
    
    
    649
    
    
    Corporate Expenses
    
    
    102Total
    
    $
    603
    
    
    
    
    
    
    $
    (262
    )
    
    
    
    
    
    $
    9
 Tabular Disclosure of the Effect of Derivative Instruments on the Consolidated Statement of Operations for the Three Months Ending September 30, 2008
 Location of Gain or
    
    
    Amount of Gain or(Loss) Recognized
    
    
    (Loss) RecognizedAmount of Gain or
    
    
    
    
    
    
    
    
    
    
    in Income on
    
    
    in Income on(Loss) Recognized
    
    
    
    
    
    
    
    
    
    
    Derivative
    
    
    Derivativein OCI on
    
    
    Location of Gain or
    
    
    Amount of Gain or
    
    
    (Ineffective
    
    
    (IneffectiveDerivative
    
    
    (Loss) Reclassified
    
    
    (Loss) Reclassified
    
    
    Portion and Amount
    
    
    Portion and AmountDerivatives in SFAS 133
    
    (Effective
    
    
    from Accumulated
    
    
    from Accumulated
    
    
    Excluded from
    
    
    Excluded fromCash Flow Hedging
    
    Portion), net of
    
    
    OCI into Income
    
    
    OCI into Income
    
    
    Effectiveness
    
    
    EffectivenessRelationships
    
    tax
    
    
    (Effective Portion)
    
    
    (Effective Portion)
    
    
    Testing)
    
    
    Testing)Foreign Exchange Contracts
    
    $
    579
    
    
    Foreign currency gain / (loss)
    
    $
    
    
    
    Other income / (expense)
    
    $
    Interest Expense
    
    
    
    
    
    Other income /  (expense)
    
    
    Cross Currency Swaps
    
    
    5,122
    
    
    Corporate Expenses
    
    
    Total
    
    $
    5,701
    
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    
 23




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##### Table of Contents



DOLLAR
FINANCIAL CORP.
 NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 8. Derivative Instruments and Hedging Activities (continued)
 Credit-risk-related Contingent Features
    9. Comprehensive Income
  Three months endedSeptember 30,2008
    
    
    2009Net income
    
    $
    11,287
    
    
    $
    5,273Foreign currency translation adjustment(1)
    
    
    (11,196
    )
    
    
    4,522Fair value adjustments for cash flow hedges, net(2)(3)
    
    
    3,341
    
    
    
    (437
    )Total comprehensive income
    
    $
    3,432
    
    
    $
    9,358
 
 (1)
    
    The ending balance of the foreign
currency translation adjustments included in
accumulated other comprehensive income on
the balance sheet were gains of $26.7
million and $24.1 million respectively as of
September 30, 2008 and 2009.(2)
    
    Net of $1.7 million and $0.4 million
of tax for the three months ended September
30, 2008 and 2009, respectively.(3)
    
    Net of $0.3 million and $0.5 million which
were reclassified into earnings for the
three months ended September 30, 2008 and
2009, respectively.  24




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##### Table of Contents



DOLLAR
FINANCIAL CORP.
 NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 10. Income Taxes
 Income Tax Provision
   Deferred
    
    
    Valuation
    
    
    Net DeferredTax Asset
    
    
    Allowance
    
    
    Tax AssetBalance at June 30, 2009
    
    $
    116.9
    
    
    $
    89.8
    
    
    $
    27.1U.S. increase/(decrease)
    
    
    2.0
    
    
    
    2.1
    
    
    
    (0.1
    )Foreign increase/(decrease)
    
    
    (0.9
    )
    
    
    0.1
    
    
    
    (1.0
    )Balance at September 30, 2009
    
    $
    118.0
    
    
    $
    92.0
    
    
    $
    26.0
     25




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##### Table of Contents



DOLLAR
FINANCIAL CORP.
 NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 10. Income Taxes (continued)
  11. Subsequent Events
   26




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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 months ended September 30, 2009 and 2008. 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
        27




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##### Table of Contents



Subsequent Events
   Discussion of Critical Accounting Policies
   Revenue Recognition
    28




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##### Table of Contents



Company-Funded Consumer Loan Loss Reserves Policy
   Check Cashing Returned Item Policy
  Goodwill and Indefinite-Lived Intangible Assets
   29




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##### Table of Contents



Derivative Instruments and Hedging Activities
   Income Taxes
  30




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##### Table of Contents



Results of Operations
 Constant Currency Analysis
   Revenue Analysis
 Three Months Ended September 30,(Percentage of total($ in thousands)
    
    
    revenue)2008
    
    
    2009
    
    
    2008
    
    
    2009Check cashing
    
    $
    48,532
    
    
    $
    37,802
    
    
    
    31.7
    %
    
    
    26.7
    %Fees from consumer lending
    
    
    81,498
    
    
    
    78,989
    
    
    
    53.2
    %
    
    
    55.7
    %Money transfer fees
    
    
    7,610
    
    
    
    6,823
    
    
    
    5.0
    %
    
    
    4.8
    %Franchise fees and royalties
    
    
    1,177
    
    
    
    942
    
    
    
    0.8
    %
    
    
    0.7
    %Other revenue
    
    
    14,259
    
    
    
    17,252
    
    
    
    9.3
    %
    
    
    12.1
    %Total revenue
    
    $
    153,076
    
    
    $
    141,808
    
    
    
    100.0
    %
    
    
    100.0
    %
 Three Months Ended September 30, 2009 compared to Three Months Ended September 30, 2008
   31




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##### Table of Contents



Store and Regional Expense Analysis
 Three Months Ended September 30,(Percentage of total($ in thousands)
    
    
    revenue)2008
    
    
    2009
    
    
    2008
    
    
    2009Salaries and benefits
    
    $
    40,803
    
    
    $
    36,736
    
    
    
    26.7
    %
    
    
    25.9
    %Provision for loan losses
    
    
    15,251
    
    
    
    11,696
    
    
    
    10.0
    %
    
    
    8.2
    %Occupancy
    
    
    11,324
    
    
    
    10,847
    
    
    
    7.4
    %
    
    
    7.6
    %Depreciation
    
    
    3,592
    
    
    
    3,374
    
    
    
    2.3
    %
    
    
    2.4
    %Returned checks, net
and cash shortages
    
    
    6,135
    
    
    
    2,264
    
    
    
    4.0
    %
    
    
    1.6
    %Telephone and communications
    
    
    2,079
    
    
    
    1,838
    
    
    
    1.4
    %
    
    
    1.3
    %Advertising
    
    
    2,812
    
    
    
    3,447
    
    
    
    1.8
    %
    
    
    2.4
    %Bank Charges and armored
carrier expenses
    
    
    3,633
    
    
    
    3,466
    
    
    
    2.4
    %
    
    
    2.4
    %Other
    
    
    13,637
    
    
    
    12,244
    
    
    
    8.8
    %
    
    
    8.8
    %Total store and regional expenses
    
    $
    99,266
    
    
    $
    85,912
    
    
    
    64.8
    %
    
    
    60.6
    %
   32




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##### Table of Contents



Corporate and Other Expense Analysis
 Three Months Ended September 30,(Percentage of total($ in thousands)
    
    revenue)2008
    
    2009
    
    2008
    
    2009Corporate expenses
    
    $
    19,521
    
    
    $
    20,351
    
    
    
    12.8
    %
    
    
    14.4
    %Other depreciation and amortization
    
    
    1,040
    
    
    
    1,052
    
    
    
    0.7
    %
    
    
    0.7
    %Interest expense, net
    
    
    11,547
    
    
    
    11,624
    
    
    
    7.5
    %
    
    
    8.2
    %Unrealized foreign exchange loss
    
    
    
    
    
    
    7,827
    
    
    
    
    %
    
    
    5.5
    %Provision for litigation settlements
    
    
    509
    
    
    
    1,267
    
    
    
    0.3
    %
    
    
    0.9
    %Loss on store closings
    
    
    4,938
    
    
    
    318
    
    
    
    3.2
    %
    
    
    0.2
    %Other (income) expense
    
    
    (258
    )
    
    
    160
    
    
    
    (0.2
    )%
    
    
    0.1
    %Income tax provision
    
    
    5,226
    
    
    
    7,966
    
    
    
    3.4
    %
    
    
    5.6
    %
 Corporate Expenses
  Other Depreciation and Amortization
  Interest Expense
  Unrealized Foreign Exchange Loss
  Provision for litigation settlements
  33




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##### Table of Contents



Loss on Store Closings
  Income Tax Provision
   Deferred
    
    
    Valuation
    
    
    Net     DeferredTax Asset
    
    
    Allowance
    
    
    Tax AssetBalance at June 30, 2009
    
    $
    116.9
    
    
    $
    89.8
    
    
    $
    27.1U.S. increase/(decrease)
    
    
    2.0
    
    
    
    2.1
    
    
    
    (0.1
    )Foreign increase/(decrease)
    
    
    (0.9
    )
    
    
    0.1
    
    
    
    (1.0
    )Balance at September 30, 2009
    
    $
    118.0
    
    
    $
    92.0
    
    
    $
    26.0
 
   34




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##### Table of Contents



Discussion and analysis for each geographic segment
   Three Months Ended September 30,Percent/($ in thousands)
    
    Margin2008
    
    2009
    
    ChangeRevenue:United
States (1)
    
    $
    42,230
    
    
    $
    34,195
    
    
    
    (19.0)
    %Store and regional margin
    
    
    10.1
    %
    
    
    14.2
    %
    
    4.1 pts.Canada
    
    $
    70,313
    
    
    $
    64,122
    
    
    
    (8.8)
    %Store and regional margin
    
    
    47.1
    %
    
    
    51.2
    %
    
    4.1 pts.United Kingdom
    
    $
    40,533
    
    
    $
    43,491
    
    
    
    7.3
    %Store and regional margin
    
    
    40.6
    %
    
    
    41.8
    %
    
    1.2 pts.Total Revenue
    
    $
    153,076
    
    
    $
    141,808
    
    
    
    (7.4)
    %Store and regional margin
    
    $
    53,810
    
    
    $
    55,896
    
    
    
    3.9
    %Store and regional margin
percent
    
    
    35.2
    %
    
    
    39.4
    %
    
    4.2 pts.
 
   Three Months Ended September 30,Pre-taxRevenue
    
    Income/(Loss)2008
    
    2009
    
    2008
    
    2009United
States (1)
    
    
    27.6
    %
    
    
    24.1
    %
    
    
    (66.4
    )%
    
    
    (56.4
    )%Canada
    
    
    45.9
    %
    
    
    45.2
    %
    
    
    112.9
    %
    
    
    137.3
    %United Kingdom
    
    
    26.5
    %
    
    
    30.7
    %
    
    
    53.5
    %
    
    
    19.1
    %Total
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
 
  Three Months Ended September 30, 2009 compared to Three Months Ended September 30, 2008
 United States
  35




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##### Table of Contents



Canada
    United Kingdom
  36




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##### Table of Contents



Changes in Financial Condition
  Liquidity and Capital Resources
     37




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##### Table of Contents



Credit
Facilities.
   Revolving Credit Facilities.
 United States Revolving Credit Facility.
 Canadian Revolving Credit Facility.
 United Kingdom Overdraft Facility
 Debt Due Within One Year.
 38




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##### Table of Contents



Long-Term Debt.
 Operating Leases.
  Less than
    
    
    1-3
    
    
    4-5
    
    
    After 5Total
    
    
    1 Year
    
    
    Years
    
    
    Years
    
    
    YearsLong-term debt:Term loans due 2012
    
    $
    369,642
    
    
    $
    3,811
    
    
    $
    7,621
    
    
    $
    358,210
    
    
    $
    2.875% Senior Convertible Notes
due 2027
    
    
    163,709
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    163,709Operating lease obligations
    
    
    138,272
    
    
    
    34,257
    
    
    
    49,506
    
    
    
    28,915
    
    
    
    25,594Total contractual cash obligations
    
    $
    671,623
    
    
    $
    38,068
    
    
    $
    57,127
    
    
    $
    387,125
    
    
    $
    189,303
  Balance Sheet Variations
 September 30, 2009 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 rate, which is expressed as a percentage of loan amounts
originated for the last twelve months applied against the principal balance of outstanding
loans declined have shown further improvement. The ratio of the allowance for loan losses
related to U.S. short-term consumer loans decreased by 13.0% from 4.6% at June 30, 2009
compared to 4.0% at September 30, 2009.
    
    In constant dollars, the Canadian ratio of allowance for loan losses has decreased
modestly from 3.3% at June 30, 2009 to 3.0% at September 30, 2009. This is continued
improvement over allowance for loan loss rates at or near the 5.0% rates being recorded in
early fiscal 2009.
    
    In constant dollars, the U.K.s allowance for loan losses remained relatively stable at
approximately 8.5% of outstanding principal at both September 30, 2009 and June 30, 2009.
  39




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##### Table of Contents



Seasonality and Quarterly Fluctuations
  Impact of Recent Accounting Pronouncement
 Business Combinations
 Non-controlling Interests in
Consolidated Financial Statements
 Disclosures about Derivative
Instruments and Hedging Activities
 Accounting for Convertible Debt
Instruments That May Be
 40




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##### Table of Contents



Settled
Upon Conversion (Including Partial Cash Settlement)
 Disclosures about Fair Value of
Financial Instruments
 Subsequent Events
 Accounting Standards Codification
and the Hierarchy of Generally Accepted Accounting Principles
 Cautionary Statement for Purposes of the Safe Harbor Provisions of the Private Securities
Litigation Reform Act of 1995
   41




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##### Table of Contents



DOLLAR FINANCIAL CORP.
SUPPLEMENTAL STATISTICAL DATA
 September 30,2008
    
    2009Company Operating Data:Stores in operation:Company-owned
    
    
    1,064
    
    
    
    1,032Franchised stores and check cashing merchants
    
    
    313
    
    
    
    156Total
    
    
    1,377
    
    
    
    1,188
 Three Months EndedSeptember 30,2008
    
    2009Check Cashing Data:Face amount of checks cashed (in millions)
    
    $
    1,318
    
    
    $
    983
    (1)Face amount of average check
    
    $
    521
    
    
    $
    484
    (2)Average fee per check
    
    $
    19.19
    
    
    $
    18.60
    (3)Number of checks cashed (in thousands)
    
    
    2,529
    
    
    
    2,032
 Three Months EndedSeptember 30,2008
    
    
    2009Check Cashing Collections Data (in thousands):Face amount of returned checks
    
    $
    19,161
    
    
    $
    9,433Collections
    
    
    (13,938
    )
    
    
    (7,354
    )Net write-offs
    
    $
    5,223
    
    
    $
    2,079Collections as a percentage of returned checks
    
    
    72.7
    %
    
    
    78.0
    %Net write-offs as a percentage of check cashing revenues
    
    
    10.8
    %
    
    
    5.5
    %Net write-offs as a percentage of the face amount of checks cashed
    
    
    0.40
    %
    
    
    0.21
    %
 
 (1)
    
    Net of a $50 decrease as a result of the impact of exchange rates for the three months ended September 30, 2009.(2)
    
    Net of a $24 decrease as a result of the impact of exchange rates for the three months ended September 30, 2009.(3)
    
    Net of a $1.19 decrease as a result of the impact of exchange rates for the three months ended September 30 2009. 42




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##### Table of Contents



Three Months EndedSeptember 30th,2008
    
    
    2009U.S. company-funded consumer loan originations
    
    $
    166,380
    
    
    $
    135,803Canadian company-funded consumer loan originations
    
    
    232,845
    
    
    
    199,167
    (1)U.K. company-funded consumer loan originations
    
    
    111,884
    
    
    
    109,828
    (2)Total company-funded consumer loan originations
    
    $
    511,109
    
    
    $
    444,798U.S. Servicing revenues
    
    $
    578
    
    
    $
    U.S. company-funded consumer loan revenues
    
    
    22,225
    
    
    
    17,858Canadian company-funded consumer loan revenues
    
    
    37,197
    
    
    
    35,215U.K. company-funded consumer loan revenues
    
    
    21,498
    
    
    
    19,690Total consumer lending revenues, net
    
    $
    81,498
    
    
    $
    72,763Gross charge-offs of company-funded consumer loans
    
    $
    59,477
    
    
    $
    41,716Recoveries of company-funded consumer loans
    
    
    (47,439
    )
    
    
    (32,966
    )Net charge-offs on company-funded consumer loans
    
    $
    12,038
    
    
    $
    8,750Gross charge-offs of company-funded consumer loans as
a percentage of total company-funded consumer loan
originations
    
    
    11.6
    %
    
    
    9.4
    %Recoveries of company-funded consumer loans as a
percentage of total company-funded consumer loan
originations
    
    
    9.2
    %
    
    
    7.4
    %Net charge-offs on company-funded consumer loans as a
percentage of total company-funded consumer loan
originations
    
    
    2.4
    %
    
    
    2.0
    %
 
 (1)
    
    Net of a $10.5 million decrease as a result of the impact of exchange
rates for the three months ended September 30, 2009.(2)
    
    Net of a $16.7 million decrease as a result of the impact of exchange
rates for the three months ended September 30, 2009 43




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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
   44




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##### Table of Contents



Cross-Currency Interest Rate Swaps
      
 Item 4. CONTROLS AND PROCEDURES
 Evaluation of Disclosure Controls and Procedures
  45




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##### Table of Contents



Changes in Internal Control Over Financial Reporting
  
 PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings
  
 Item 1A. RISK FACTORS
  Unexpected changes in foreign tax rates and political and economic conditions could negatively impact our operating results.
  Demand for our products and services is sensitive to the level of transactions effected by our
customers, and accordingly, our revenues could be affected negatively by a general economic
slowdown.
  The price of our common stock may be volatile .
  46




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##### Table of Contents



Any change in the accounting method for convertible debt securities could have an adverse impact on
our reported or future financial results and could adversely affect the trading price of our
securities, including our common stock and the 2.875% Senior Convertible Notes due 2027.
   
 Item 5. Other Information
   February 2010
       April 30
   47




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##### Table of Contents



Item 6. Exhibits
 Exhibit No.
    
    Description of Document10.1
    
    Detailed Settlement Agreement by and
among Kenneth Smith, as Estate Trustee of the last Will and Testament
of Margaret Smith, deceased and Ronald Adrien Oriet, as plaintiffs and National Money Mart Company and Dollar Financial Group, Inc., as defendants, dated November 6, 2009.31.1
    
    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
 48




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##### Table of Contents



SIGNATURE
  DOLLAR FINANCIAL CORP.Date: November 9, 2009
    *By:
    /s/ Randy UnderwoodName:
    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. 49