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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

FOR ANNUAL AND TRANSITION REPORTS
PURSUANT TO SECTIONS 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934

For the fiscal year ended June 30, 2004

OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934

For the transition period from _____________ to _____________

Commission File Number 333-111473-02

DOLLAR FINANCIAL CORP.
(Exact Name of Registrant as Specified in Its Charter)

DELAWARE 23-2636866
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)

1436 Lancaster Avenue
Berwyn, Pennsylvania 19312-1288
(Address of Principal Executive (Zip Code)
Offices)

Registrant's telephone number, including area code (610) 296-3400

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. YES [X] NO[ ].

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K: [X]

Indicate by check mark whether the Registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act). Yes [ ] No [X]

There is no market for the common stock of Dollar Financial Corp. See "Item 5 -
Market for Registrant's Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities."



1

(APPLICABLE ONLY TO CORPORATE REGISTRANTS)


As of August 31, 2004, 19,864.87 shares of the registrant's common stock,
par value $0.01 per share, were outstanding.


DOCUMENTS INCORPORATED BY REFERENCE

N/A










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DOLLAR FINANCIAL CORP.

Table of Contents

2004 Report on Form 10-K




PART I

Item 1. Business.................................................................................. 4
Item 2. Properties................................................................................ 20
Item 3. Legal Proceedings......................................................................... 21
Item 4. Submission of Matters to a Vote of Security Holders....................................... 21


PART II

Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and
Issuer Purchases of Equity Securities................................................ 22
Item 6. Selected Financial Data................................................................... 22
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations................................................................. 25
Item 7A. Quantitative and Qualitative Disclosures About Market Risk................................ 37
Item 8. Financial Statements and Supplementary Data............................................... 38
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.................................................................. 73
Item 9A. Controls and Procedures................................................................... 73
Item 9B. Other Information......................................................................... 73

PART III

Item 10. Directors and Executive Officers of the Registrant........................................ 73
Item 11. Executive Compensation.................................................................... 76
Item 12. Security Ownership of Certain Beneficial Owners and Management............................ 80
Item 13. Certain Relationships and Related Transactions............................................ 81
Item 14. Principal Accountant Fees and Services.................................................... 84


PART IV

Item 15. Exhibits, Financial Statement Schedules and Reports on Form 8-K........................... 85

Signatures.......................................................................................... 92


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Item 1. BUSINESS

General

We are a leading international financial services company serving
under-banked consumers. Our customers are typically lower- and middle-income
working-class individuals who require basic financial services but, for reasons
of convenience and accessibility, purchase some or all of their financial
services from us rather than banks and other financial institutions. To serve
this market, we have a network of 1,110 stores, including 638 company-operated
stores, in 16 states, the District of Columbia, Canada and the United Kingdom.
We provide a diverse range of consumer financial products and services primarily
consisting of check cashing, short-term consumer loans, money orders and money
transfers. Our store network represents the second-largest network of its kind
in the United States and the largest network of its kind in each of Canada and
the United Kingdom.

We are a Delaware corporation incorporated in April 1990 as DFG Holdings,
Inc. We recently changed our name to Dollar Financial Corp. We operate our store
network through our direct wholly-owned subsidiary, Dollar Financial Group,
Inc., a New York corporation formed in 1979, and its direct and indirect
wholly-owned foreign and domestic subsidiaries.

Our network includes the following platforms for delivering our financial
services to the consumer in our core markets:

United States

We operate a total of 319 stores, with 231 operating under the name
"Money Mart(R)" and 88 operating under the name "Loan Mart(R)." The Money
Mart stores typically offer our full range of products and services,
including check cashing and short-term consumer loans. The Loan Mart stores
offer short-term consumer loans and other ancillary services depending upon
location. By offering short-term lending services, we hope to attract a
customer who might not use check cashing services. We also have
relationships with 458 document transmitter locations, such as independent
mail stores and insurance offices, which assist in completing short-term
consumer loans we market through a direct-to-consumer lending operation.

Our U.S. business had revenues of $109.9 million for fiscal 2004 and
$110.5 for fiscal 2003.

Canada

There are 311 stores in our Canadian network, of which 194 are operated
by us and 117 are operated by franchisees. All stores in Canada are operated
under the name "Money Mart" except locations in the Province of Quebec. The
stores in Canada typically offer check cashing, short-term consumer loans
and other ancillary products and services.

Our Canadian business had revenues of $(USD)84.8 million for fiscal 2004
and $(USD)67.0 or fiscal 2003.

United Kingdom

There are 480 stores in our U.K. network, of which 125 are operated by
us and 355 are operated by franchisees. All stores in the United Kingdom
(with the exception of certain franchises operating under the name "Cash A
Cheque") are operated under the name "Money Shop." The stores in the United
Kingdom typically offer check cashing, short-term consumer loans and other
ancillary products and services.

Our U.K. business had revenues of $(USD)51.8 million for fiscal 2004 and
$(USD)41.9 for fiscal 2003.

We have 472 franchised locations in Canada and the United Kingdom. These
franchised locations offer many of the same products and services offered by
company-operated stores using the same associated trade names, trademarks
and service marks within the standards and guidelines we have established.
Total franchise revenues were $6.3 million for fiscal 2003 and $7.5 million
for the fiscal year June 30, 2004. We also use independent third-party
businesses such as mail stores and insurance offices, which we refer to as
document transmitters, to assist in the transmission of short-term consumer
loan applications.

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Our customers, many of whom receive income on an irregular basis or from
multiple employers, are drawn to our convenient neighborhood locations, extended
operating hours and high-quality customer service. Our products and services,
principally our check cashing and short-term consumer loan program, provide
immediate access to cash for living expenses or other needs. We principally cash
payroll checks, although our stores also cash government benefit, personal and
income-tax-refund checks. During fiscal 2004, we cashed 8.4 million checks with
a total face amount of $3.2 billion and an average face amount of $376 per
check. Acting both as a servicer and as a direct lender, we originated 3.0
million short-term consumer loans with an average principal amount of $288 and a
weighted average term of approximately 14 days. In addition, we acted as a
direct lender originating 4,675 longer-term installment loans with an average
principal amount of $845 and a weighted average term of approximately 365 days.
We also strive to provide our customers with high-value ancillary services,
including Western Union money order and money transfer products, electronic tax
filing, bill payment, foreign currency exchange, photo ID and prepaid local and
long-distance phone services.

Industry Overview

We operate in a sector of the financial services industry that serves the
basic need of lower- and middle-income working-class individuals to have
convenient access to cash. This need is primarily evidenced by consumer demand
for check cashing and short-term loans, and consumers who use these services are
often underserved by banks and other financial institutions.

Lower- and middle-income individuals represent the largest part of the
population in each country in which we operate. Many of these individuals work
in the service sector, which in the U.S. is one of the fastest growing segments
of the workforce.

However, many of these individuals, particularly in the United States, do
not maintain regular banking relationships. They use services provided by our
industry for a variety of reasons, including that they often:

o do not have sufficient assets to meet minimum balance requirements or to
achieve the benefits of savings with banks;

o do not write enough checks to make a bank account beneficial;

o need to access financial services outside of normal banking hours;

o desire not to pay fees for banking services that they do not use;

o require immediate access to cash from their paychecks; and

o may have a dislike or distrust of banks.

In addition to check cashing services, under-banked consumers also require
short-term loans that provide cash for living and other expenses. They also may
not be able to or want to obtain loans from banks as a result of:

o their immediate need for cash;

o irregular receipt of payments from their employers;

o their desire for convenience and customer service; and

o the unavailability of bank loans in small denominations for short terms.

Despite the demand for basic financial services, access to banks has become
more difficult over time for many consumers. Many banks have chosen to close
their less profitable or lower-traffic locations. Typically, these closings have
occurred in lower-income neighborhoods where the branches have failed to attract
a sufficient base of customer deposits. This trend has resulted in fewer
convenient alternatives for basic financial services in many neighborhoods. Many
banks have also reduced or eliminated some services that under-banked consumers
need.

As a result of these trends, a significant number of retailers have begun to
offer financial services to lower- and middle-income individuals. The providers
of these services are fragmented, and range from specialty finance offices to
retail stores in other industries that offer ancillary services.

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We believe that the under-banked consumer market will continue to grow as a
result of a diminishing supply of competing banking services as well as
underlying demographic trends. These demographic trends include an overall
increase in the population and an increase in the number of service-sector jobs
as a percentage of the total workforce.

The demographics of the typical customers for non-banking financial services
vary slightly in each of the markets in which we operate, but the trends driving
the industry are generally the same. In addition, the type of store and services
that appeal to customers in each market vary based on cultural, social,
geographic and other factors. Finally, the composition of providers of these
services in each market results in part from the historical development and
regulatory environment in that market.

Growth Opportunities

We believe that significant opportunities for growth exist in our industry
as a result of:

o growth of the service-sector workforce;

o failure of commercial banks and other traditional financial service
providers to address adequately the needs of lower- and middle-income
individuals; and

o trends favoring larger operators in the industry.

We believe that, as the lower- and middle-income population segment
increases, and as trends within the retail banking industry make banking less
accessible to these consumers, the industry in which we operate will see a
significant increase in demand for their products and services. We also believe
that the industry will continue to consolidate as a result of a number of
factors, including:

o economies of scale available to larger operators;

o use of technology to serve customers better and to control large store
networks;

o inability of smaller operators to form the alliances necessary to
deliver new products; and

o increased licensing and regulatory burdens.

This consolidation process should provide us, as operator of one of the
largest store networks, with opportunities for continued growth.

Competitive Strengths

We believe that the following competitive strengths position us well for
continued growth:

Leading Position in Core Markets. We have a leading position in core
markets, operating 319 stores in the United States, 194 stores in Canada and 125
stores in the United Kingdom as of June 30, 2004. We have 117 franchised
locations in Canada and 355 franchised locations in the United Kingdom.
Highlights of our competitive position in these core markets include the
following:

o Our domestic network is focused in rapidly growing markets in the
western United States, where we believe we have held leading market
positions for over 10 years.

o We believe that we are the industry leader in Canada, and that we hold a
dominant market share with a store in almost every city with a
population of over 50,000. Based on a public opinion study of three
major metropolitan markets in English speaking Canada, we have achieved
brand awareness of 85%.

o We are the largest check cashing company in the United Kingdom,
comprising nearly 25% of the market measured by number of stores,
although we believe that we account for 40% of all check cashing
transactions performed at check cashing stores.

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High-quality Customer Service. We adhere to a strict set of market survey
and location guidelines when selecting store sites in order to ensure that our
stores are placed in desirable locations near our customers. We believe that our
customers appreciate this convenience, as well as the flexible and extended
operating hours that we typically offer, which are often more compatible with
our customers' work schedules. We provide our customers with a clean, attractive
and secure environment in which to transact their business. We believe that our
friendly and courteous customer service at both the store level and through our
centralized support centers is a competitive advantage.


Diversified Product and Geographic Mix. Our stores offer a wide range of
consumer financial products and services to meet the demands of their respective
locales, including check cashing, short-term consumer loans, money orders and
money transfers. We also provide high-value ancillary products and services,
including electronic tax filing, bill payment, foreign currency exchange, photo
ID and prepaid local and long-distance phone services. For fiscal 2004, the
revenue contribution by our check cashing operations was 47.6%, our consumer
lending operations was 39.1% and our other financial services was 13.3%. In
addition to our product diversification, our business is diversified
geographically. For fiscal 2004, our U.S. operations generated 44.6% of our
total revenue, our Canadian operations generated 34.4% of our total revenue and
our U.K. operations generated 21.0% of total revenue. Our product and geographic
mix provides a diverse stream of revenue growth opportunities.

Diversification and Management of Credit Risk. Our revenue is generated
through a high volume of small dollar financial transactions, and therefore our
exposure to loss from a single customer transaction is minimal. In addition, we
actively manage our customer risk profile and collection efforts in order to
maximize our consumer lending and check cashing revenues while maintaining
losses within a targeted range. We have instituted control mechanisms that have
been effective in managing risk. Such mechanisms, among others, includes the
daily monitoring of initial return rates on our consumer loan portfolio. As a
result, we believe that we are unlikely to sustain a material credit loss from a
single transaction or series of transactions. We have experienced relatively low
net write-offs as a percentage of the face amount of checks cashed. For fiscal
2004, in our check cashing business, net write-offs as a percentage of the face
amount of checks cashed were 0.2%. For the same period, with respect to loans
funded directly by us, net write-offs as a percentage of originations were 1.8%.

Management Expertise. We have a highly experienced and motivated management
team at both the corporate and operational levels. Our senior management team
has extensive experience in the financial services industry. Our Chairman and
Chief Executive, Jeffrey Weiss, and our President Donald Gayhardt, have been
with us since 1990 and have demonstrated the ability to grow our business
through their operational leadership, strategic vision and experience in making
selected acquisitions. Since 1990, Mr. Weiss and Mr. Gayhardt have assisted us
in completing 31 acquisitions that added 418 company-operated stores. In
addition, the management team is highly motivated to ensure continued business
success, as they collectively own approximately 16.9% of our common stock.

Business Strategy

Our business strategy is designed to capitalize on our competitive strengths
and enhance our leading market positions. Key elements of our strategy include:

Capitalizing on Our Enhanced Network and System Capabilities. With our
network of 1,110 stores, we are well positioned to capitalize on economies of
scale. Our centralized core support functions, including collections, call
center, field operations and service, loan processing and tax filing, enable us
to generate efficiencies by improving collections and purchasing power with our
vendors. Our proprietary systems are used to further improve our customer
relations and loan servicing activities, as well as to provide a highly
efficient means to manage our internal as well as regulatory compliance efforts.
We plan to continue to take advantage of these efficiencies to enhance network
and store-level profitability.

Growing Through Disciplined Network Expansion. We intend to continue to grow
our network through the addition of new stores and franchisees, while adhering
to a disciplined selection process. In order to optimize our expansion, we
carefully assess potential markets by analyzing demographic, competitive and
regulatory factors, site selection and availability and growth potential. We
seek to add locations that offer check cashing, consumer lending or a
combination of both. In addition, we will continue to grow our
direct-to-consumer lending services that enable us to access a broader customer
base without the capital expense of adding company stores.

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Maintaining our Customer-driven Retail Philosophy. We strive to maintain our
customer-service-oriented approach and meet the basic financial service needs of
our working, lower- and middle-income customers. We believe our approach
differentiates us from many of our competitors and is a key tenet of our
employee training programs. We offer extended operating hours in clean,
attractive and secure store locations to enhance appeal and stimulate store
traffic. In certain markets, we operate stores that are open 24 hours a day. To
ensure customer satisfaction, we periodically send anonymous market researchers
posing as shoppers to our U.S. stores to measure customer service performance.
We plan to continue to develop ways to improve our performance, including
incentive programs to reward employees for exceptional customer service.

Introducing Related Products and Services. We offer our customers multiple
financial products and services. We believe that our check cashing and consumer
lending customers enjoy the convenience of other high value products and
services offered by us. These products and services enable our customers to
manage their personal finances more effectively. For example, in fiscal 2003, we
introduced reloadable debit cards and customer loyalty programs in many of our
stores. We also offered new tax-based products to our Canadian customers,
providing qualified individuals with cash advances against anticipated tax
refunds. We intend to continue to innovate and develop new products and services
for our customers.

Expansion of Our Franchising Strategy. We intend to expand the reach of our
business and our network through an extension of our existing franchising
strategy. In Canada and the United Kingdom, we have developed our leading market
positions in part through the use of a franchising strategy that allowed us to
expand without incurring additional capital expenditures. As of June 30, 2004,
we had 117 franchised locations in Canada and 355 franchised locations in the
United Kingdom.

Customers

Our core customer group generally lacks sufficient income to accumulate
assets or to build savings. These customers rely on their current income to
cover immediate living expenses and cannot afford to wait for checks to clear
through the commercial banking system. We believe that many of our customers use
our check cashing and short-term lending services in order to access cash
immediately without having to maintain a minimum balance in a checking account
and to borrow money to fund living expenses and other needs. We believe that
consumers value our affordability and attention to customer service, and their
choice of financial service provider is influenced by our convenient locations
and extended operating hours.

U.S. Customers

Based on our operating experience and information provided to us by our
customers, we believe that our core domestic check cashing customer group is
composed of individuals between the ages of 18 and 44. The majority of these
individuals rent their homes, are employed and have annual household incomes of
between $10,000 and $35,000, with a median income of $22,500. We believe that
many of our customers are workers or independent contractors who receive payment
on an irregular basis and generally in the form of a check. In addition, we
believe that although approximately 49% of our U.S. customers do have bank
accounts, these customers use check cashing stores because they find the
locations and extended business hours more convenient than those of banks and
because they value the ability to receive cash immediately, without waiting for
a check to clear.

Our operating experience and customer data also suggest that our short-term
consumer loan customers are mainly individuals between the ages of 18 and 49.
The majority of these individuals rent their homes and are employed in
professional/managerial positions. A survey conducted by the Credit Research
Center of Georgetown University found that 51.5% of short-term consumer loan
customers reported household incomes between $25,000 and $50,000 with 25.4%
greater than $50,000. The survey also found that these customers choose
short-term consumer loans because of easy and fast approval and convenient
location. Unlike many of our check cashing customers, short-term consumer loan
customers have a bank account but experience temporary shortages in cash from
time to time.

Canadian Customers

Based on recent market research surveys, we believe that the demographics of
our Canadian customers are somewhat different from those of our U.S. customers.
Our typical Canadian check cashing customer is approximately 32 years old,

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employed in the trades/labor sector and earning $(USD)28,000 annually. Our
typical Canadian short-term loan customer is 25 to 44 years old, employed in the
services sector and earning $(USD)35,000 annually. Approximately 60% of our
Canadian customers are male and 40% are female. In contrast to the United
States, 66% of our Canadian check cashing customers have bank accounts. Our
research shows that these customers continue to use our services because of our
fast and courteous service, the stores' extended operating hours and convenient
locations.

U.K. Customers

Recent market research conducted on our behalf and our own customer data
have shown that 89% of our U.K. customers have annual incomes below
$(USD)30,000, and 58% are under the age of 35. According to market research,
approximately 85% of our customer base is employed, with equal numbers of males
and females. While 80% of our U.K. customers have bank accounts, they report a
high level of dissatisfaction with their current bank relationship. Market
research indicated customer service satisfaction levels for our U.K. customers
above 95% compared with 50% to 65% satisfaction for the major banks. Staff
friendliness and face-to-face contact are key drivers of customer satisfaction.
The need for immediate cash is the number one reason for using our services.

Products and Services

Customers typically use our stores to cash checks (payroll, government and
personal), obtain short-term consumer loans and use one or more of the
additional financial services available at most locations including Western
Union money order and money transfer products, electronic tax filing, bill
payment, foreign currency exchange, photo ID and prepaid local and long-distance
phone services.

Check Cashing

Customers may cash all types of checks at our check cashing locations,
including payroll checks, government checks and personal checks. In exchange for
a verified check, customers receive cash immediately and do not have to wait
several days for the check to clear. Before we distribute any cash, we verify
both the customer's identification and the validity of the check (occasionally
using multiple sources) as required by our standard verification procedures.
Customers are charged a fee for this service (typically a small percentage of
the face value of the check). The fee varies depending on the size and type of
check cashed as well as the customer's check cashing history at our stores. For
fiscal 2004, check cashing fees averaged approximately 3.70% of the face value
of checks cashed.

The following chart presents summaries of revenue from our check cashing
operations, broken down by consolidated operations, U.S. operations and Canadian
and U.K. operations for the periods indicated below:


Year ended June 30,

--------------------------------------------------------------------------------------
2000 2001 2002 2003 2004
--------------------------------------------------------------------------------------
Consolidated operations:
Face amount of checks cashed....... $2,743,765,000 $3,046,705,000 $2,969,455,000 $2,938,950,000 $3,169,350,000
Number of checks cashed............ 8,204,528 9,001,635 8,689,819 8,568,944 8,427,990
Average face amount per check...... $334.42 $338.46 $341.72 $342.98 $376.05
Average fee per check.............. $11.87 $11.74 $12.06 $12.65 $13.93
Average fee as a % of face amount.. 3.55% 3.47% 3.53% 3.69% 3.70%

U.S. operations:
Face amount of checks cashed....... $1,712,912,000 $1,728,504,000 $1,636,967,000 $1,384,958,000 $1,349,956,000
Number of checks cashed............ 4,654,747 4,485,393 4,317,534 3,855,664 3,621,174
Average face amount per check...... $367.99 $385.36 $379.14 $359.20 $372.80
Average fee per check.............. $12.17 $12.19 $12.41 $12.75 $13.18
Average fee as a % of face amount.. 3.31% 3.16% 3.27% 3.55% 3.54%


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Year ended June 30,

--------------------------------------------------------------------------------------
2000 2001 2002 2003 2004
--------------------------------------------------------------------------------------
Canadian and U.K. operations:
Face amount of checks cashed....... $1,030,853,000 $1,318,201,000 $1,332,488,000 $1,553,992,000 $1,819,394,000
Number of checks cashed............ 3,549,781 4,516,242 4,372,285 4,713,280 4,806,816
Average face amount per check...... $290.40 $291.88 $304.76 $329.71 $378.50
Average fee per check.............. $11.47 $11.30 $11.71 $12.58 $14.50
Average fee as a % of face amount.. 3.95% 3.87% 3.84% 3.82% 3.83%


If a check cashed by us is not paid for any reason, we record the full face
value of the check as a loss in the period when the check was returned unpaid.
We then send the check to our internal collections department, or occasionally
directly to the store, for collection. Our employees contact the maker and/or
payee of each returned check. In certain circumstances, we will take appropriate
legal action. Recoveries on returned items are credited in the period when the
recovery is received. During fiscal 2004, we collected 73.6% of the face value
of returned checks.

The following chart presents summaries of our returned check experience,
broken down by consolidated operations, U.S. operations and Canadian and U.K.
operations for the periods indicated below:


Year ended June 30,

-----------------------------------------------------------------------------
2000 2001 2002 2003 2004
-----------------------------------------------------------------------------
Consolidated operations:
Face amount of returned checks............ $22,870,000 $27,938,000 $27,874,000 $26,164,000 $29,061,000
Collections on returned checks............ 17,100,000 19,752,000 20,812,000 19,426,000 21,399,000
Net write-offs of returned checks......... 5,770,000 8,186,000 7,062,000 6,738,000 7,662,000
Collections as a percentage of returned
checks................................. 74.7% 70.7% 74.7% 74.2% 73.6%
Net write-offs as a percentage of check
cashing revenues....................... 5.9% 7.7% 6.7% 6.2% 6.5%
Net write-offs as a percentage of face
amount of checks cashed................ 0.21% 0.27% 0.24% 0.22% 0.24%

U.S. operations:
Face amount of returned checks............ $12,023,000 $14,519,000 $15,411,000 $12,046,000 $13,761,000
Collections on returned checks............ 7,811,000 8,872,000 10,560,000 8,335,000 10,285,000
Net write-offs of returned checks......... 4,212,000 5,647,000 4,851,000 3,711,000 3,476,000
Collections as a percentage of returned
checks................................. 65.0% 61.1% 68.5% 69.2% 74.7%
Net write-offs as a percentage of check
cashing revenues....................... 7.4% 10.3% 9.1% 7.6% 7.3%
Net write-offs as a percentage of face
amount of checks cashed................ 0.25% 0.33% 0.30% 0.25% 0.26%

Canadian and U.K. operations:
Face amount of returned checks............ $10,847,000 $13,419,000 $12,463,000 $14,118,000 $15,300,000
Collections on returned checks............ 9,289,000 10,880,000 10,252,000 11,091,000 11,114,000
Net write-offs of returned checks......... 1,558,000 2,539,000 2,211,000 3,027,000 4,186,000
Collections as a percentage of returned
checks................................. 85.6% 81.1% 82.3% 78.6% 72.6%
Net write-offs as a percentage of check
cashing revenues....................... 3.8% 5.0% 4.3% 5.1% 6.0%
Net write-offs as a percentage of face
amount of checks cashed................ 0.15% 0.19% 0.17% 0.20% 0.23%



Consumer Lending

We originate short-term loans on behalf of two domestic banks and for our
own account.

The short-term consumer loans we originate are commonly referred to as
"payday" or "deferred deposit" loans. In a payday-loan transaction, at the time
the funds are advanced to the borrower, the borrower signs a note and provides
the lender with a post-dated check or a written authorization to initiate an
automated clearinghouse charge to the borrower's checking account for the loan

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principal plus a finance charge; on the due date of the loan (which is generally
set at a date on or near the borrower's next payday), the check or automated
clearinghouse debit is presented for payment.

Since June 13, 2002, we have acted as a servicer for County Bank of Rehoboth
Beach, Delaware and since October 18, 2002, for First Bank of Delaware. On
behalf of these banks, we market unsecured short-term loans to customers with
established bank accounts and verifiable sources of income. Loans are made for
amounts up to $700, with terms of 7 to 23 days. Under these programs, we earn
servicing fees, which may be reduced if the related loans are not collected. We
maintain a reserve for estimated reductions. In addition, we maintain a reserve
for anticipated losses for loans we make directly. In order to estimate the
appropriate level of these reserves, we consider the amount of outstanding loans
owed to us, as well as loans owed to banks and serviced by us, the historical
loans charged-off, current collection patterns and current economic trends. As
these conditions change, additional allowances might be required in future
periods. During fiscal 2004, County Bank originated or extended approximately
$136.2 million of loans through our locations and document transmitters. First
Bank originated or extended approximately $249.1 million of loans through us
during this period. County Bank originated or extended approximately $277.9
million of loans through us during fiscal 2003 and First Bank originated or
extended approximately $92.5 million of loans through us for the same period.

We also originate unsecured short-term loans to customers on our own behalf
in Canada, the United Kingdom and certain U.S. markets. We bear the entire risk
of loss related to these loans. In the United States, these loans are made for
amounts up to $500, with terms of 7 to 37 days. In Canada, loans are issued to
qualified borrowers based on a percentage of the borrowers' income with terms of
1 to 35 days. We issue loans in the United Kingdom for up to (pound)600, with a
term of 28 days. We originated or extended approximately $491.4 million of the
short-term consumer loans through our locations and document transmitters during
fiscal 2004 and approximately $428.7 million through our locations and document
transmitters during 2003. In addition, beginning in fiscal 2003 we acted as a
direct lender originating 1,402 longer-term installment loans with an average
principal amount of $793 and a weighted average term of approximately 365 days.
In fiscal 2004, we originated 4,675 longer-term installment loans with an
average principal of amount $845 and a weighted average term of approximately
365 days. We originated or extended installment loans through our locations in
the United Kingdom of approximately $1.1 million in fiscal 2003 and $3.9 million
in fiscal 2004 and introduced this product in certain U.S. and Canadian markets
late in fiscal 2004.

We had approximately $29.1 million of consumer loans on our balance sheet at
June 30, 2004 and approximately $21.4 million on June 30, 2003. These amounts
are reflected in total loans receivable. Loans receivable, net at June 30, 2004
are reported net of a reserve of $2.3 million related to consumer lending. Loans
receivable at June 30, 2003 are reported net of a reserve of $1.3 million
related to consumer lending.



11

The following table presents a summary of our consumer lending
originations, which includes loan extensions, and revenues for the following
periods (dollars in thousands):


Year ended June 30,

--------------------------------------------
2002 2003 2004
--------------------------------------------
(in thousands)
U.S. company funded consumer loan originations(1)............. $ 19,723 $ 81,085 $ 65,868
Canadian company funded consumer loan originations(2)......... 188,632 248,149 309,016
U.K. company funded consumer loan originations(2)............. 76,344 99,499 116,532
--------------------------------------------
Total company funded consumer loan originations............... $ 284,699 $ 428,733 $ 491,416
============================================

Servicing revenues, net....................................... $ 44,765 $ 41,175 $ 47,144
U.S. company funded consumer loan revenues.................... 3,545 14,137 9,873
Canadian company funded consumer loan revenues................ 16,280 22,492 31,479
U.K. company funded consumer loan revenues.................... 10,763 13,725 17,750
Provision for loan losses on company funded loans............. (5,554) (9,967) (9,928)
--------------------------------------------
Total consumer lending revenues, net.......................... $ 69,799 $ 81,562 $ 96,318
============================================

Gross charge-offs of company funded consumer loans............ $ 23,684 $ 42,497 $ 45,074
Recoveries of company funded consumer loans................... 18,130 32,105 36,102
--------------------------------------------
Net charge-offs on company funded consumer loans.............. $ 5,554 $ 10,392 $ 8,972
============================================

Gross charge-offs of company funded consumer loans as a
percentage of total company funded consumer loan
originations............................................... 8.4% 9.9% 9.2%
Recoveries of company funded consumer loans as a
percentage of total company funded consumer loan
originations............................................... 6.4% 7.5% 7.4%
Net charge-offs on company funded consumer loans as a
percentage of total company funded consumer loan
originations............................................... 2.0% 2.4% 1.8%


(1)Our company-operated stores in the United States originate company funded
and bank funded short-term consumer loans. Document transmitter locations in the
United States originate only bank funded loans.

(2)All consumer loans originated in Canada and the United Kingdom are
company funded.

Following are the number of company-operated U.S. stores at each period end
that originate company funded and bank funded loans.


Year ended June 30,
-------------------------------------------
2002 2003 2004
-------------------------------------------
U.S. stores originating company funded loans.................. 164 33 43
U.S. stores originating bank funded loans..................... 178 286 275
-------------------------------------------
Total U.S. stores originating short-term consumer loans....... 342 319 318
===========================================


The increase in total company funded originations of $59.9 million in fiscal
2004 over fiscal 2003, as well as in prior periods, was driven primarily by
increases in originations in Canada and the United Kingdom newly opened stores.
Eagle National Bank discontinued the business of offering short-term consumer
loans through our stores pursuant to a December 18, 2001 consent order entered
into with the U.S. Comptroller of the Currency. Under the program with Eagle
National Bank, we earned marketing and servicing fees. Eagle originated or
extended approximately $402.7 million of loans through us during fiscal 2002.

12

Other Services and Products

In addition to check cashing and short-term loans, our customers may choose
from a variety of products and services when conducting business at our
locations. These services include Western Union money order and money transfer
products, electronic tax filing, bill payment, foreign currency exchange, photo
ID and prepaid local and long-distance phone services. A survey of our customers
by an independent third party revealed that over 50% of customers use other
services in addition to check cashing. We offer our customers multiple financial
products and services. We believe that our check cashing and consumer lending
customers enjoy the convenience of other high-value products and services
offered by us.

Among our most significant products and services other than check cashing
and short-term loans are the following:

o Money Transfers--Through a strategic alliance with Western Union, customers
can transfer funds to any location providing Western Union money transfer
services. Western Union currently has 170,000 agents in more than 190
countries throughout the world. We receive a percentage of the commission
charged by Western Union for the transfer. For fiscal 2004, we generated
total money transfer revenues of $13.1 million, primarily at our check
cashing stores.

o Money Orders--Our stores issue money orders for a minimal fee. Customers who
do not have checking accounts typically use money orders to pay rent and
utility bills. During fiscal 2004, money order transactions had an average
face amount of $160.1 and an average fee of $1.05. For fiscal 2004, our
customers purchased 2.3 million money orders, generating total money order
revenues of $2.4 million.



13

Store Operations

Locations

The following chart sets forth the number of stores in operation as of
the dates:


June 30,

------------------------------------------
Markets 2000 2001 2002 2003 2004
------- ------------------------------------------
CALIFORNIA
Southern................................. 44 47 47 47 47
Northern................................. 92 95 93 91 90

ARIZONA
Phoenix.................................. 34 40 45 43 43
Tucson................................... 7 13 16 16 16

OHIO
Cleveland................................ 21 19 19 18 18
Other Ohio cities (1).................... 7 5 4 4 4

PENNSYLVANIA
Philadelphia............................. 11 8 8 6 6
Pittsburgh............................... 10 11 11 11 11

OTHER UNITED STATES
Washington............................... 17 21 18 18 18
Virginia................................. 15 16 16 16 16
Oklahoma................................. 8 13 13 10 10
Nevada................................... 1 11 11 8 8
Colorado................................. 6 14 15 7 7
Oregon................................... 2 5 5 5 5
Louisiana................................ 3 4 4 4 4
Texas.................................... 3 3 4 4 4
Utah..................................... 7 5 5 4 4
New Mexico............................... 4 3 3 3 3
Hawaii................................... 3 3 3 3 3
Maryland/D.C............................. 4 11 10 2 1
Wisconsin................................ 1 1 1 1 1
CANADA
Company operated......................... 139 157 167 181 194
Franchised locations..................... 81 86 87 109 117

UNITED KINGDOM
Company operated......................... 107 126 123 122 125
Franchised locations..................... 264 261 290 351 355
------------------------------------------
Total stores............................. 891 978 1,018 1,084 1,110
==========================================

(1) These other cities include Akron, Canton, Youngstown and Cincinnati.






14

All of our company-operated stores are leased, generally under leases
providing for an initial multi-year term and renewal terms from one to five
years. We generally assume the responsibility for required leasehold
improvements, including signage, customer service representative partitions,
alarm systems, computers, time-delayed safes and other office equipment. We
adhere to a strict set of market survey and location guidelines when selecting
store sites in order to ensure that our stores are placed in desirable locations
near our customers.

Since fiscal 2001, the number of stores operated by us in the United States
has declined from 348 to 319. From fiscal 2001 through fiscal 2004, we did not
renew store leases, which were scheduled to expire, in various markets because
we determined that our operating margins in these locations were not
satisfactory. We expect the number of stores in the United States to remain
relatively stable in the foreseeable future, as we anticipate focusing our new
store and acquisition strategy in Canada and the United Kingdom.

Acquisitions

Since 1990, we have grown our store network domestically and internationally
in part through acquisitions. We have successfully targeted, executed and closed
over 31 acquisitions that added 418 company-owned stores.

In November 1996, we completed our first acquisition of Canadian stores,
adding 36 company operated locations and 107 franchised locations. We now
operate 194 stores in Canada and have 117 franchised locations. During fiscal
1998, we opened our first Loan Mart stores in the United States, offering only
short-term consumer loans. We have continued to build new Loan Mart stores in a
number of markets in the United States and today operate 88 of these stores. In
February 1999, we completed our first acquisition of stores in the United
Kingdom when we purchased 11 stores. Since entering the U.K. market, we have
completed five additional acquisitions of chains which added 74 company-operated
stores and 265 franchised locations, built 40 new company-operated stores and
added 90 new franchised locations, net. We now operate a total of 125 stores in
the United Kingdom and have 355 franchised locations.

Facilities and Hours of Operation

As part of our retail and customer-driven strategy, we present a clean and
attractive environment and an appealing format for our stores. Size varies by
location, but the stores are generally 1,000 to 1,400 square feet, with
approximately half of that space allocated to the teller and back office areas.

Operating hours vary by location, but are typically extended and designed to
cater to those customers who, due to work schedules, cannot make use of "normal"
banking hours. A typical store operates from 9:00 A.M. to 9:00 P.M. during
weekdays and on Saturdays, and from 10:00 A.M. to 5:00 P.M. on Sundays. In
certain locations, we operate stores 24 hours, seven days per week.

Operational Structure

Our senior management is located at our corporate headquarters in Berwyn,
Pennsylvania and is responsible for our overall direction. We also maintain
corporate offices in Victoria, British Columbia and Nottingham, England.
Management of our North American store operations is located in our Victoria
office while the Nottingham office provides support for our U.K. store
operations. This support includes centralized functions such as information
systems, treasury, accounting, human resources, loss prevention and marketing.
Our corporate staff also includes personnel dedicated to compliance functions,
including internal audit, risk management, privacy and general counsel
functions. We believe that our ongoing investment in and company-wide focus on
our compliance practices provides us with a competitive advantage relative to
most other companies in our industry.

Additionally, in each country in which we operate, we have a store
management organization that is responsible for the day to day operations of our
stores. District managers are directly responsible for the oversight of our
store managers and store operations. Typically, each district manager oversees
eight to ten stores. Each district manager reports to a market manager who
supervises approximately five district managers. The market managers report to
the head of operations in each of our corporate offices.

In addition, in fiscal 2001 we opened a centralized facility to support our
domestic consumer lending business. This call-center facility, located in Salt
Lake City, Utah, currently employs 141 full-time staff. Operating from 8:00 A.M.
to midnight, eastern time (including weekends), our staff performs inbound and
outbound customer service for current and prospective consumer loan customers as
well as collection and loan-servicing functions for all past-due domestic

15

consumer loans. Our management at this facility includes experienced call-center
operations, customer service, information technology and collection personnel.
We believe that this centralized facility has helped us to improve our loan
servicing significantly and has led to reduced credit losses on loans originated
by us in the United States and significantly enhances our ability to manage the
compliance responsibilities related to our domestic consumer lending operations.

Technology

We currently have an enterprise-wide transaction processing computer
network. We believe that this system has improved customer service by reducing
transaction time and has allowed us to manage returned-check losses and loan
collection efforts better and to comply with regulatory record keeping and
reporting requirements.

We continue to enhance our point-of-sale transaction processing system
composed of a networked hardware and software package with integrated database
and reporting capabilities. The point-of-sale system provides our stores with
instantaneous customer information, thereby reducing transaction time and
improving the efficiency of our credit verification process. Also, we have
deployed an enhanced centralized loan management and collections system that
provides improved customer service processing and management of loan
transactions. The loan-management system and collections system uses integrated
automated clearinghouse payment and returns processing, which facilitates faster
notification of returns and faster clearing of funds as well as utilizing fax
server document-processing technology, which has the effect of reducing both
processing and loan closing times. The point-of-sale system, together with the
enhanced loan-management and collections systems, has improved our ability to
offer new products and services and our customer service.

Security

The principal security risks to our operations are robbery and defalcation.
We have put in place extensive security systems, dedicated security personnel
and management information systems to address both areas of potential loss. We
believe that our systems are among the most effective in the industry. Net
security losses represented less than 0.6% of total revenues for fiscal 2004, a
decline from net security losses of 0.8% of total revenues for fiscal 2003.

To protect against robbery, most store employees work behind
bullet-resistant glass and steel partitions, and the back office, safe and
computer areas are locked and closed to customers. Each store's security
measures include safes, electronic alarm systems monitored by third parties,
control over entry to teller areas, detection of entry through perimeter
openings, walls, and ceilings and the tracking of all employee movement in and
out of secured areas. Employees use cellular phones to ensure safety and
security whenever they are outside the secure teller area. Additional security
measures include identical alarm systems in all stores, remote control over
alarm systems, arming/disarming and changing user codes and mechanically and
electronically controlled time-delay safes.

Since we handle high volumes of cash and negotiable instruments at our
locations, daily monitoring, unannounced audits and immediate responses to
irregularities are critical in combating defalcations. We have an internal
auditing program that includes periodic unannounced store audits and cash counts
at randomly selected locations.

Advertising and Marketing

We frequently survey and research customer trends and purchasing patterns in
order to place the most effective advertising for each market. Our marketing
promotions typically include in-store merchandising materials, advertising
support and instruction of store personnel in the use of the materials. Drawing
on statistical data from our transaction database, we use sophisticated direct
marketing strategies to communicate with existing customers and prospects with
demographic characteristics similar to those of existing customers. National
television advertising promotes our brand in Canada and our franchisees
contribute to fund this advertising. We also arrange cooperative advertising for
our products and services with strategic partners such as Western Union. We
provide our store managers with local marketing training that sets standards for
promotions and marketing programs for their stores. Local marketing includes
attendance and sponsorship of community events. A national classified telephone
directory company is used to place all Yellow Pages advertising as effectively
and prominently as possible. We research directory selection to assure effective
communication with our target customers.

16

Competition

Our store network represents the second-largest network of its kind in the
United States and the largest network of its kind in each of Canada and the
United Kingdom. The industry in which we operate in the United States is highly
fragmented. An independent industry report estimated the number of check cashing
outlets at 13,000 in March 2002, an increase from the approximately 2,200
national listings in 1986, according to a similar industry survey. We believe we
operate one of only seven U.S. check cashing store networks that have more than
100 locations, the remaining competitors being local chains and single-unit
operators. According to an industry survey, the seven largest check cashing
chains in the United States control fewer than 22% of the total number of U.S.
stores, reflecting the industry's fragmented nature. An independent report
estimated the number of stores offering short-term consumer loans as their
principal business at approximately 15,000 as of December 2002.

In Canada, we believe that we are the industry leader and that we hold a
dominant market share with exceptional brand awareness. In a recent public
opinion study of three major metropolitan markets in English speaking Canada, we
found that we have achieved brand awareness of 85%. We estimate that the number
of outlets offering check cashing and/or short-term consumer loans to be 1,100.
We believe there is only one other network of stores with over 100 locations and
only three chains with over 50 locations. While we believe that we enjoy almost
30% market share by outlet in Canada, our research estimates our market share by
volume of business to be closer to 50%.

Based on information from the British Cheque Cashers Association, we believe
that we have a U.K. market share of approximately 25%. In addition, we believe
that our 480 company-operated and franchised stores account for up to 40% of the
total check cashing transactions performed at check cashing stores in the United
Kingdom. In the consumer lending market, recent research indicates that the
market for small, short-term loans is served by approximately 1,500 store
locations, which include check cashers, pawn brokers and home-collected credit
companies.

In addition to other check cashing stores and consumer lending stores in the
United States, Canada and the United Kingdom, we compete with banks and other
financial services entities, as well as with retail businesses, such as grocery
and liquor stores, which often cash checks for their customers. Some
competitors, primarily grocery stores, do not charge a fee to cash a check.
However, these merchants provide this service to a limited number of customers
with superior credit ratings and will typically only cash "first party" checks,
or those written on the customer's account and made payable to the store.

We also compete with companies that offer automated check cashing machines,
and with franchised kiosk units that provide check-cashing and money order
services to customers, which can be located in places such as convenience
stores, bank lobbies, grocery stores, discount retailers and shopping malls.

We believe that convenience, hours of operations and other aspects of
customer service are the principal factors influencing customers' selection of a
financial services company in our industry, and that the pricing of products and
services is a secondary consideration.

Regulation

We are subject to regulation by foreign, federal and state governments that
affects the products and services we provide. In general, this regulation is
designed to protect consumers who deal with us and not to protect the holders of
our securities, including our common stock.

Regulation of Check Cashing

To date, regulation of check cashing fees has occurred on the state level.
We are currently subject to fee regulation in seven states: Arizona, California,
Hawaii, Louisiana, Maryland, Ohio, Pennsylvania and the District of Columbia
where regulations set maximum fees for cashing various types of checks. Our fees
comply with all state regulations.

Some states, including California, Ohio, Pennsylvania, Utah, Washington and
the District of Columbia have enacted licensing requirements for check cashing
stores. Other states, including Ohio, require the conspicuous posting of the
fees charged by each store. A number of states, including Ohio, also have
imposed recordkeeping requirements, while others require check cashing stores to
file fee schedules with the state.

17

In Canada, the federal government does not directly regulate our industry,
nor do provincial governments generally impose any regulations specific to the
industry. The exception is in the Province of Quebec, where check cashing stores
are not permitted to charge a fee to cash government checks.

In the United Kingdom, as a result of the Cheques Act of 1992, banks are now
liable to refund checks cleared by the bank that involved fraud or dishonesty.
For this reason, banks have invoked more stringent credit inspection and
indemnity criteria for all individuals and businesses wishing to operate a check
clearing facility such as ours. Additionally, in 2001 the Money Laundering Act
of 1993 was enhanced, required check cashing, money transfer and bureau de
change providers to be licensed. We currently comply with these more stringent
rules and regulations.

Regulation of Consumer Lending

In the majority of states where we engage in consumer lending, we act as a
servicer for County Bank or First Bank, federally insured financial institutions
both chartered under the laws of the state of Delaware. We provide County Bank
and First Bank with marketing, servicing and collections services for their
unsecured short-term loan products that are offered under our brand name Cash
'Til Payday(R).

County Bank and First Bank are subject to federal and state banking
regulations. Legislation has been introduced in the past at both the state and
federal levels that could affect our ability to generate origination fees as a
servicer for a bank, as well as our ability to offer consumer loans directly to
consumers. While we do not believe that any federal legislation will be passed,
if enacted we would not be able to market short-term loans as currently
structured. The FDIC has also proposed increasing the capital requirement for
banks involved in this business to as much as 100%. These capital requirements
could make it substantially more expensive for such banks to engage in consumer
lending.

We have determined, primarily for regulatory reasons, that we should make
consumer loans directly to consumers in seven states where advantageous enabling
legislation exists: California, Colorado, Louisiana, Oklahoma, Oregon, Virginia
and Wisconsin. We do not plan to open any company-operated stores to engage in
the consumer lending business in 13 other states where legislation is
unfavorable or the service is not likely to be profitable. We currently can
participate in the consumer lending business in all states where we have a
sizable presence, although there is no guarantee that this situation will
continue. We recently ceased offering short-term consumer loans in Georgia in
response to a law passed by the state legislature prohibiting these loans. Our
short-term consumer lending business in Georgia was immaterial financially,
generating revenues of $755,000 in fiscal 2004 and $500,000 in fiscal 2003, and
we had no company-operated stores in that state. We are not currently aware of
similar legislation that would require us to exit markets where we generate
significant revenues.

Our Canadian consumer lending activities are subject to provincial licensing
in Saskatchewan, Nova Scotia and Newfoundland but are subject only to limited
substantive regulation. A federal usury ceiling applies to loans we make to
Canadian consumers. Such borrowers contract to repay us in cash; if they repay
by check, we also collect, in addition to the maximum permissible finance
charge, our customary check-cashing fees.

In the United Kingdom, consumer lending is governed by the Consumer Credit
Act of 1974 and related rules and regulations. As required by the act, we have
obtained licenses from the Office of Fair Trading, which is responsible for
regulating competition policy and consumer protection. The act also contains
rules regarding the presentation, form and content of loan agreements, including
statutory warnings and the layout of financial information. To comply with these
rules, we use model credit agreements provided by the British Cheque Cashers
Association.

Our consumer lending activities are also subject to certain other state,
federal and U.K. regulations, including, but not limited to, regulations
governing lending practices and terms, such as truth in lending and usury laws,
and rules regarding advertising content.

Currency Reporting Regulation

Regulations promulgated by the United States Department of the Treasury
under the Bank Secrecy Act require reporting of transactions involving currency
in an amount greater than $10,000, or the purchase of monetary instruments for
cash in amounts from $3,000 to $10,000. In general, every financial institution
must report each deposit, withdrawal, exchange of currency or other payment or
transfer that involves currency in an amount greater than $10,000. In addition,
multiple currency transactions must be treated as a single transaction if the
financial institution has knowledge that the transactions are by, or on behalf

18

of, any one person and result in either cash in or cash out totaling more than
$10,000 during any one business day. We believe that our point-of-sale system
and employee training programs support our compliance with these regulatory
requirements.

Also, money services businesses are required by the Money Laundering Act of
1994 to register with the United States Department of the Treasury. Money
services businesses include check cashers and sellers of money orders. Money
services businesses must renew their registrations every two years, maintain a
list of their agents, update the agent list annually and make the agent list
available for examination. In addition, the Bank Secrecy Act requires money
services businesses to file a Suspicious Activity Report for any transaction
conducted or attempted involving amounts individually or in total equaling
$2,000 or greater, when the money services businesses knows or suspects that the
transaction involves funds derived from an illegal activity, the transaction is
designed to evade the requirements of the Bank Secrecy Act or the transaction is
considered so unusual that there appears to be no reasonable explanation for the
transaction. The USA PATRIOT Act includes a number of anti-money-laundering
measures designed to assist in the identification and seizure of terrorist
funds, including provisions that will directly impact check cashers and other
money services businesses. Specifically, the USA PATRIOT Act requires all check
cashers to establish certain programs designed to detect and report money
laundering activities to law enforcement. We believe we are in compliance with
the USA PATRIOT Act.

Privacy Regulation

We are subject to a variety of state, federal and foreign laws and
regulations restricting the use and seeking to protect the confidentiality of
identifying and other personal consumer information. We have systems in place
intended to safeguard such information as required.

Other Regulation

We operate a total of 137 stores in California. This state has enacted a
so-called "prompt remittance" statute. This statute specifies a maximum time for
the payment of proceeds from the sale of money orders to the issuer of the money
orders. In this way, the statute limits the number of days, known as the
"float," that we have use of the money from the sale of the money order.

In addition to fee regulations, licensing requirements and prompt remittance
statutes, certain jurisdictions have also placed limitations on the commingling
of money order proceeds and established minimum bonding or capital requirements.

Proprietary Rights

We hold the rights to a variety of service marks relating to products or
services we provide in our stores. In addition, we maintain service marks
relating to the various names under which our stores operate.

Insurance Coverage

We maintain insurance coverage against losses, including theft, to protect
our earnings and properties. We also maintain insurance coverage against
criminal acts with a deductible of $50,000 per occurrence.

Employees

On June 30, 2004, we employed 3,343 persons worldwide, consisting of 320
persons in our accounting, management information systems, legal, human
resources, treasury, finance and administrative departments and 3,023 persons in
our stores, including customer service representatives, store managers, regional
supervisors, operations directors and store administrative personnel.

None of our employees is represented by a labor union, and we believe that
our relations with our employees are good.


19

Cautionary Statement for Purposes of the "Safe Harbor" Provisions of the Private
Securities Litigation Reform Act of 1995

This report may contain certain forward-looking statements regarding our
expected performance for future periods, and actual results for such periods may
materially differ. Such forward-looking statements involve risks and
uncertainties, including risks of changing market conditions in the overall
economy and the industry, consumer demand, regulatory factors and the success of
our strategies and other factors detailed from time to time in our annual and
other reports filed with the Securities and Exchange Commission. The words
"believe," "expect," "anticipate," "will" and similar expressions identify
forward-looking statements. Readers are cautioned not to place undue reliance on
these forward-looking statements, which speak only as of the date on which they
are made. We undertake no obligation to update publicly or revise any
forward-looking statements. Factors that could cause actual results to differ
materially from the forward-looking statement, including our goals referred to
herein, include but are not limited to our inability to:

o effectively compete in the financial services industry and maintain our
share of the market;

o manage risks inherent in an international operation, including foreign
currency fluctuation;

o maintain our key banking relationships;

o sustain demand for our products and services;

o manage changes in applicable laws and regulations governing consumer
protection and lending practices;

o manage our growth effectively;

o compete in light of technological advances; or

o safeguard against employee error and theft.


Item 2. PROPERTIES

All of our company-operated stores are leased, generally under leases
providing for an initial multi-year term and renewal terms from one to five
years. The leases may contain provisions for additional rental charges based on
revenue and payment of real estate taxes and common area charges. With respect
to leased locations open as of June 30, 2004, the following table shows the
total number of leases expiring during the periods indicated, assuming the
exercise of our renewal options:

Period Ending Number of
June 30, Leases Expiring
------------- ---------------
2005 111
2006 - 2009 425
2010 - 2014 112
2015 - 2019 12
2020 - 2024 1
------
661
======

The following table reflects the change in the number of stores during
fiscal years 2002, 2003 and 2004:

2002 2003 2004
-------- -------- -------
Number of stores at beginning of period 978 1,018 1,084
New stores opened 25 14 14
Stores acquired 1 5 3
Stores closed (16) (36) (3)
Net change in franchise stores 30 83 12
-------- -------- -------
Number of stores at end of period 1,018 1,084 1,110
======== ======== =======

20

Item 3. LEGAL PROCEEDINGS

We are a defendant in four putative class-action lawsuits, all of which were
commenced by the same plaintiffs' law firm, alleging violations of California's
wage-and-hour laws. The named plaintiffs in these suits, which are pending in
the Superior Court of the State of California, are our former employees Vernell
Woods (commenced August 22, 2000), Juan Castillo (commenced May 1, 2003),
Stanley Chin (commenced May 7, 2003) and Kenneth Williams (commenced June 3,
2003). Each of these suits seeks an unspecified amount of damages and other
relief in connection with allegations that we misclassified California store
(Woods) and regional (Castillo) managers as "exempt" from a state law requiring
the payment of overtime compensation, that we failed to provide employees with
meal and rest breaks required under a new state law (Chin) and that we computed
bonuses payable to our store managers using an impermissible profit-sharing
formula (Williams). In January 2003, without admitting liability, we sought to
settle the Woods case, which we believe to be the most significant of these
suits, by offering each individual putative class member an amount intended in
good faith to settle his or her claim. Approximately 92% of these settlement
offers have been accepted. Plaintiff's' counsel is presently disputing through
arbitration the validity of the settlements accepted by the individual putative
class members. We believe we have meritorious defenses to the challenge and to
the claims of the non-settling putative Woods class members and plan to defend
them vigorously. We believe we have adequately provided for the costs associated
with this matter. We are vigorously defending the Castillo, Chin and Williams
lawsuits; and believe we have meritorious defenses to the claims asserted in
those matters. We believe the outcome of such litigation will not significantly
affect our financial results.

On January 29, 2003, a former customer, Kurt MacKinnon, commenced an action
against our Canadian subsidiary and 26 other Canadian lenders on behalf of a
purported class of British Columbia residents who, plaintiff claims, were
overcharged in payday-loan transactions. The action, which is pending in the
Supreme Court of British Columbia, alleges violations of laws proscribing usury
and unconscionable trade practices and seeks restitution and damages, including
punitive damages, in an unknown amount. On March 25, 2003, we moved to stay the
action as against us and to compel arbitration of plaintiff's claims as required
by his agreement with us. The court's decision denying that motion is presently
on appeal. We believe we have meritorious defenses to the action and intend to
defend it vigorously. We believe the outcome of such litigation will not
significantly affect our financial results.

On October 21, 2003, a former customer, Kenneth D. Mortillaro, commenced an
action against our Canadian subsidiary on behalf of a purported class of
Canadian borrowers (except those residing in British Columbia and Quebec) who,
Mortillaro claims, were subjected to usurious charges in payday loan
transactions. The action, which is pending in the Ontario Superior Court of
Justice, alleges violations of a Canadian federal law proscribing usury and
seeks restitution and damages in an unspecified amount, including punitive
damages. On November 6, 2003, we learned of substantially similar claims
asserted on behalf of a purported class of Alberta borrowers by Gareth Young, a
former customer of our Canadian subsidiary. The Young action is pending in the
Court of Queens Bench of Alberta and seeks an unspecified amount of damages and
other relief. On December 23, 2003, we were served with the statement of claim
in an action brought in the Ontario Superior Court of Justice by another former
customer, Margaret Smith. . A similar action was also filed in the Court of
Queen's Bench of Manitoba on April 26, 2004 by Nicole Blasko. The allegations
and putative class in the Smith and Blasko actions are substantially the same as
those in the Mortillaro action Like the plaintiff in the MacKinnon action
referred to above, Mortillaro, Young, Smith and Blasko have agreed to arbitrate
all disputes with us. We believe that we have meritorious procedural and
substantive defenses to the claims of each of these plaintiffs, and we intend to
defend those claims vigorously. We believe the outcome of such litigation will
not significantly affect our financial results.

In addition to the litigation discussed above, we are involved in routine
litigation and administrative proceedings arising in the ordinary course of
business. In our opinion, the outcome of such litigation and proceedings will
not significantly affect our financial results.


Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.



21

PART II

Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND
ISSUER PURCHASES OF EQUITY SECURITIES

There is no established public trading market for our common stock.

We did not pay any cash dividends in respect of our common stock during
fiscal 2003 and fiscal 2004. The indentures dated November 13, 2003 between us
and U.S. Bank, National Association as trustee, relating to our 16.0% senior
notes due 2012 and our 13.95% senior subordinated notes due 2012, as well as our
credit agreement and the indenture dated November 13, 2003 between Dollar
Financial Group, Inc. and U.S. Bank, National Association as trustee, relating
to Dollar Financial Group, Inc.'s 9.75% Senior Notes due 2011, contain
restrictions on our declaration and payment of dividends. See "Item 7 -
Management's Discussion and Analysis of Financial Condition and Results of
Operations" and the notes to consolidated financial statements included
elsewhere in this report.

Item 6. SELECTED FINANCIAL DATA

We derived the following historical financial information from our audited
consolidated financial statements as of June 30, 2003 and June 30, 2004 and for
each of the years in the three-year period ended June 30, 2004, which are
included elsewhere in this report, and our audited consolidated financial
statements as of and for the years ended June 30, 2000, June 30, 2001 and June
30, 2002. This table should be read together with the information contained in
"Item 7 -Management's Discussion and Analysis of Financial Condition and Results
of Operations" and our audited consolidated financial statements and related
notes included in "Item 8 - Financial Statements of Supplementary Data."




22


Selected Financial Data: Year ended June 30,

--------------------------------------------------------------------------------------
2000(1) 2001(2) 2002 2003 2004
--------------------------------------------------------------------------------------
(dollars in thousands, except Check Cashing Data)

Statement of Operations Data:
Revenues:
Revenues from check cashing........ $ 97,350 $ 105,690 $ 104,792 $ 108,435 $ 117,397
Consumer lending:
Fees from consumer lending.... 44,974 77,854 97,712 106,557 120,807
Provision for loan losses and
adjustment to servicing
revenue..................... (10,187) (19,487) (27,913) (24,995) (24,489)
--------------------------------------------------------------------------------------
Consumer lending, net.............. 34,787 58,367 69,799 81,562 96,318
Money transfer fees................ 7,881 9,444 10,098 11,652 13,052
Other revenues..................... 25,735 21,998 17,287 17,739 19,663
--------------------------------------------------------------------------------------
Total revenues........................ 165,753 195,499 201,976 219,388 246,430

Store and regional expenses:
Salaries and benefits.............. 47,058 57,453 65,295 69,799 76,008
Occupancy.......................... 12,800 16,881 18,087 18,856 19,805
Depreciation....................... 4,683 5,829 6,522 5,859 6,546
Other.............................. 36,503 45,321 46,238 47,766 53,321
--------------------------------------------------------------------------------------
Total store and regional expenses..... 101,044 125,484 136,142 142,280 155,680

Establishment of reserves for new
consumer lending arrangements...... - - 2,244 - -
Corporate expenses.................... 22,342 22,500 24,516 31,241 32,813
Management fee........................ 671 864 1,049 1,049 1,003
Losses on store closings and sales and
other restructuring................ 249 926 1,435 3,987 361
Goodwill amortization (3)............. 5,564 4,710 - - -
Other depreciation and amortization... 1,620 1,952 2,709 3,320 3,286
Interest expense, net of interest
income............................. 26,872 31,307 31,274 34,620 40,123
Loss on extinguishment of debt........ - - - - 10,355
Litigation settlement costs........... - - - 2,750 -
--------------------------------------------------------------------------------------
Income before income taxes............ 7,391 7,756 2,607 141 2,809
Income tax provision (4).............. 8,991 9,199 5,999 8,735 30,842
--------------------------------------------------------------------------------------
Net loss ............................. $ (1,600) $ (1,443) $ (3,392)$ (8,594)$ (28,033)
======================================================================================


Operating and Other Data:
Net cash provided by (used in):
Operating activities............... $ 15,337 $ 15,578 $ 13,442 $ 2,865 $ 18,203
Investing activities............... (44,526) (32,365) (10,108) (10,679) (8,619)
Financing activities............... 36,709 16,364 10,420 (9,930) (14,299)

Stores in operation at end of period..
Company-owned...................... 546 631 641 624 638
Franchised stores and check cashing
merchants....................... 345 347 377 460 472
--------------------------------------------------------------------------------------
Total................................. 891 978 1,018 1,084 1,110
======================================================================================

Check Cashing Data:
Face amount of checks cashed.......... $ 2,743,765,000 $ 3,046,705,000 $ 2,969,455,000 $ 2,938,950,000 $ 3,169,350,000
Number of checks cashed............... 8,204,528 9,001,635 8,689,819 8,568,944 8,427,990
Average face amount per check cashed.. $334.42 $338.46 $341.72 $342.98 $376.05
Average fee per check................. $11.87 $11.74 $12.06 $12.65 $13.93
Average fee as a % of face amount..... 3.55% 3.47% 3.53% 3.69% 3.70%

Balance Sheet Data (at end of period):
Cash.................................. $ 73,394 $ 72,456 $ 86,637 $ 71,809 $ 69,270
Total assets.......................... 266,545 283,458 304,599 313,611 318,447
Total indebtedness.................... 253,939 282,868 306,462 311,614 325,003
Shareholders' deficit................. (27,820) (33,880) (32,418) (28,970) (50,887)


23

(1) On July 7, 1999, we acquired all of the outstanding shares of Cash A Cheque
Holdings Great Britain Limited , which operated 44 company owned stores in
the UK. The initial purchase price for this acquisition was $12.5 million
and was funded through excess internal cash, our revolving credit facility
and Dollar Financial Group, Inc.'s 10 7/8% Senior Subordinated Notes Due
2006. The excess of the purchase price over the fair value of the
identifiable net assets acquired was $8.2 million. Additional consideration
of $9.7 million was subsequently paid based under the profit-based earn-out
agreement. On November 18, 1999, we acquired all of the outstanding shares
of Cheques R Us, Inc. and Courtenay Money Mart Ltd., which operated six
stores in British Columbia. The aggregate purchase price for this
acquisition was $1.2 million and was funded through excess internal cash.
The excess of the purchase price over the fair value of identifiable net
assets acquired was $1.1 million. On December 15, 1999, we acquired all of
the outstanding shares of Cash Centres Corporation Limited, which operated
five company owned stores and 238 franchises in the UK. The aggregate
purchase price for this acquisition was $8.4 million and was funded through
our revolving credit facility. The excess of the purchase price over the
fair value of identifiable net assets acquired was $7.7 million. Additional
consideration of $2.7 million was subsequently paid based under a
profit-based earn-out agreement. On February 10, 2000, we acquired
substantially all of the assets of CheckStop, Inc., which is a payday-loan
business operating through 150 independent document transmitters in 17
states. The aggregate purchase price for this acquisition was $2.6 million
and was funded through our revolving credit facility. The excess of the
purchase price over the fair value of identifiable net assets acquired was
$2.4 million. Additional consideration of $250,000 was subsequently paid
based upon a future results of operations earn-out agreement.
(2) On August 1, 2000, we purchased all of the outstanding shares of West Coast
Chequing Centres, Ltd, which operated six stores in British Columbia. The
aggregate purchase price for this acquisition was $1.5 million and was
funded through excess internal cash. The excess price over the fair value of
identifiable net assets acquired was $1.4 million. On August 7, 2000, we
purchased substantially all of the assets of Fast `n Friendly Check Cashing,
which operated 8 stores in Maryland. The aggregate purchase price for this
acquisition was $700,000 and was funded through our revolving credit
facility. The excess purchase price over fair value of identifiable net
assets acquired was $660,000. Additional consideration of $150,000 was
subsequently paid based on a revenue earn-out agreement. On August 28, 2000,
we purchased primarily all of the assets of Ram-Dur Enterprises, Inc. d/b/a
AAA Check Cashing Centers, which operated five stores in Tucson, Arizona.
The aggregate purchase price for this acquisition was $1.3 million and was
funded through our revolving credit facility. The excess purchase price over
fair value of identifiable net assets acquired was $1.2 million. On December
5, 2000, we purchased all of the outstanding shares of Fastcash Ltd., which
operated 13 company owned stores and 27 franchises in the UK. The aggregate
purchase price for this acquisition was $3.1 million and was funded through
our revolving credit facility. The excess of the purchase price over the
fair value of the identifiable assets acquired was $2.7 million. Additional
consideration of $2.0 million was subsequently paid during fiscal 2003 based
upon a future results of operations earn-out agreement.
(3) On July 1, 2001, we adopted Financial Accounting Standards Board Opinion No.
142 "Goodwill and Other Intangible Assets". In accordance with the
provisions of SFAS No. 142 we ceased amortization of goodwill.
(4) As a result of our refinancing in November 2003, we do not expect to
continue to pay U.S. tax on our foreign earnings for the foreseeable future.
This will result in a substantial reduction in our effective tax rate. The
amount of such tax was as follows (dollars in thousands):

Year ended June 30,
----------- ------- --------- ---------- ----------
2000 2001 2002 2003 2004
---- ---- ---- ---- ----
1,745 $3,189 $2,370 $5,162 $2,349








24

Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS


Executive Summary

We have historically derived our revenues primarily from providing check
cashing services, consumer lending and other consumer financial products and
services, including money orders, money transfers and bill payment. For our
check cashing services, we charge our customers fees that are usually equal to a
percentage of the amount of the check being cashed and are deducted from the
cash provided to the customer. For our consumer loans, we receive origination
and servicing fees from the banks providing the loans or, if we fund the loans
directly, interest and fees on the loans.

We operate in a sector of the financial services industry that serves the
basic need of lower- and middle-income working-class individuals to have
convenient access to cash. This need is primarily evidenced by consumer demand
for check cashing and short-term loans, and consumers who use these services are
often underserved by banks and other financial institutions.


Our expenses primarily relate to the operations of our store network,
including salaries and benefits for our employees, occupancy expense for our
leased real estate, depreciation of our assets and corporate and other expenses,
including costs related to opening and closing stores. During fiscal 2003, we
took actions to reduce costs and make our operations more efficient, including
centralizing and consolidating our store support functions for our North
American operations.

In each foreign country in which we operate, local currency is used for both
revenue and expenses. Therefore, we record the impact of foreign currency
exchange rate fluctuations related to our foreign net income.

In our discussion of our financial condition and results of operations, we
refer to stores, franchises and document transmitters that were open for an
entire period and the comparable prior period as comparable stores, franchises
and document transmitters.

Discussion of Critical Accounting Policies

In the ordinary course of business, we have made a number of estimates and
assumptions relating to the reporting of results of operations and financial
condition in the preparation of our financial statements in conformity with U.S.
generally accepted accounting principles. We evaluate these estimates on an
ongoing basis, including those related to revenue recognition, loss reserves and
intangible assets. We base these estimates on the information currently
available to us and on various other assumptions that we believe are reasonable
under the circumstances. Actual results could vary from these estimates under
different assumptions or conditions.

We believe that the following critical accounting policies affect the more
significant judgments and estimates used in the preparation of our financial
statements:

Revenue Recognition

With respect to company-operated stores, revenue from our check cashing,
money order sales, money transfer and bill payment services and other
miscellaneous services reported in other revenues on our statement of operations
are all recognized when the transactions are completed at the point-of-sale in
the store.

With respect to our franchised locations, we recognize initial franchise
fees upon fulfillment of all significant obligations to the franchisee. Royalty
payments from our franchisees are recognized as earned.

For short term consumer loans that we make directly, which have terms
ranging from 1 to 37 days, revenue is recognized using the interest method. Loan
origination fees are recognized as an adjustment to the yield on the related
loan. Our reserve policy regarding these loans is summarized below in "Company
Funded Consumer Loan Loss Reserves Policy."

In addition to the short-term consumer loans originated and funded by us, we
also have relationships with two banks, County Bank of Rehoboth Beach, Delaware
and First Bank of Delaware. Pursuant to these relationships, we market and

25

service short-term consumer loans, which have terms ranging from 7 to 23 days,
that are funded by the banks. The banks are responsible for the application
review process and determining whether to approve an application and fund a
loan. As a result, the banks' loans are not reflected on our balance sheet. We
earn a marketing and servicing fee for each loan that is paid by borrowers to
the banks.

For loans funded by County Bank, we recognize net servicing fee income
ratably over the life of the related loan. In addition, each month County Bank
withholds certain servicing fees payable to us in order to maintain a cash
reserve. The amount of the reserve is equal to a fixed percentage of outstanding
loans at the beginning of the month plus a percentage of the finance charges
collected during the month. Each month, net credit losses are applied against
County Bank's cash reserve. Any excess reserve is then remitted to us as a
collection bonus. The remainder of the finance charges not applied to the
reserve are either used to pay costs incurred by County Bank related to the
short term loan program, retained by the bank as interest on the loan or
distributed to us as a servicing fee.

For loans funded by First Bank of Delaware, we recognize net servicing fee
income ratably over the life of the related loan. In addition, the bank has
established a target loss rate for the loans marketed and serviced by us.
Servicing fees payable to us are reduced if actual losses exceed this target
loss rate by the amount they exceed it. If actual losses are below the target
loss rate, the difference is paid to us as a servicing fee. The measurement of
the actual loss rate and settlement of servicing fees occurs twice every month.

Because our servicing fees are reduced by loan losses incurred by the banks,
we have established a reserve for servicing fee adjustments. To estimate the
appropriate reserve for servicing fee adjustments, we consider the amount of
outstanding loans owed to the banks, historical loans charged off, current
collections patterns and current economic trends. The reserve is then based on
net write-offs, expressed as a percentage of loans originated on behalf of the
banks applied against the total amount of the banks' outstanding loans. This
reserve is reported in accrued expenses and other liabilities on our balance
sheet.

If one of the banks suffers a loss on a loan, we immediately record a
charge-off against the reserve for servicing fee adjustments for the entire
amount of the unpaid item. A recovery is credited to the reserve during the
period in which the recovery is made. Each month, we replenish the reserve in an
amount equal to the net losses charged to the reserve in that month. This
replenishment, as well as any additional provisions to the reserve for servicing
fees adjustments as a result of the calculations set forth above, is charged
against revenues. The total amount of outstanding loans owed to the banks did
not change significantly during the periods ended June 30, 2004 and June 30,
2003, and during these periods the loss rates on loans declined. As a result of
these factors, we did not increase our reserve for servicing fee adjustments. We
serviced $385 million of loans for County Bank and First Bank during fiscal 2004
and $370 million during fiscal 2003. At June 30, 2004 and 2003 we serviced $15.2
million and $15.0 million, respectively, for County Bank and First Bank.

Company Funded Consumer Loan Loss Reserves Policy

We maintain a loan loss reserve for anticipated losses for loans we make
directly through some of our company-operated locations. To estimate the
appropriate level of loan loss reserves we consider the amount of outstanding
loans owed to us, historical loans charged off, current collection patterns and
current economic trends. Our current loan loss reserve is based on our net
write-offs, expressed as a percentage of loan amounts originated for the last
twelve months applied against the total amount of outstanding loans that we make
directly. As these conditions change, we may need to make additional allowances
in future periods.

When a loan is originated, the customer receives the cash proceeds in
exchange for a post-dated check or a written authorization to initiate a charge
to the customer's bank account on the stated maturity date of the loan. If the
check or the debit to the customer's account is returned from the bank unpaid,
we immediately record a charge-off against the consumer loan loss reserve for
the entire amount of the unpaid item. A recovery is credited to the reserve
during the period in which the recovery is made. Each month, we replenish the
reserve in an amount equal to the net losses charged to the reserve in that
month. This replenishment, as well as any additional provisions to the loan loss
reserve as a result of the calculations in the preceding paragraph, is charged
against revenues. As a result of the increase in our installment loan portfolio,
we increased our loan loss reserve during fiscal 2004.

Check Cashing Returned Item Policy

We charge operating expense for losses on returned checks during the period
in which such checks are returned. Recoveries on returned checks are credited to
operating expense during the period in which recovery is made. This direct

26

method for recording returned check losses and recoveries eliminates the need
for an allowance for returned checks. These net losses are charged to other
store and regional expenses in the consolidated statements of operations.

Goodwill

We have significant goodwill on our balance sheet. The testing of goodwill
for impairment under established accounting guidelines also requires significant
use of judgment and assumptions. In accordance with accounting guidelines, we
determine the fair value of our reporting units using multiples of earnings of
other companies. Goodwill is tested and reviewed for impairment on an ongoing
basis under established accounting guidelines. However, changes in business
conditions may require future adjustments to asset valuations.

Deferred Offering Costs

Through June 30, 2004, we incurred approximately $1.4 million of costs in
connection with a proposed public offering of our common stock. These costs are
included in other assets on our balance sheet. In August 2004, we announced that
we had postponed the proposed public offering due to market conditions. If the
proposed offering were to be permanently abandoned, the costs incurred would be
charged to expense in the period the decision is made. If the proposed offering
is successful, the contribution to shareholders' equity will be reduced by these
costs.

Income Taxes

As part of the process of preparing our consolidated financial statements we
are required to estimate our income taxes in each of the jurisdictions in which
we operate. This process involves estimating our current tax exposure and
assessing the impact of differing treatment of items for tax and accounting
purposes. If an item is treated differently for tax and accounting purposes, we
report the difference as a deferred tax asset or liability, on our consolidated
balance sheet. We then assess the likelihood that any deferred tax assets will
be recovered from future taxable income. To the extent we believe that recovery
of a deferred tax asset is not likely, we establish a valuation allowance.



27

Results of Operations

The following table sets forth our results of operations as a percentage of
total consolidated revenues for the following periods:


Year ended June 30,

---------------------------
2002 2003 2004
---------------------------
Statement of Operations Data:
Total revenues:
Check cashing......................................................... 51.8% 49.4% 47.6%
Consumer lending, net................................................. 34.6 37.2 39.1
Money transfers....................................................... 5.0 5.3 5.3
Other ................................................................ 8.6 8.1 8.0
---------------------------
Total revenues............................................................ 100.0 100.0 100.0

U.S. revenues:
Check cashing......................................................... 26.5 22.4 19.4
Consumer lending, net................................................. 23.4 23.3 21.9
Money transfers....................................................... 2.2 2.2 1.8
Other ................................................................ 3.8 2.5 1.4
---------------------------
Total U.S. revenues....................................................... 55.9 50.4 44.5

Canada revenues:
Check cashing......................................................... 15.0 15.1 15.6
Consumer lending, net................................................. 6.6 8.8 11.6
Money transfers....................................................... 2.2 2.3 2.4
Other ................................................................ 3.7 4.3 4.9
---------------------------
Total Canada revenues..................................................... 27.5 30.5 34.5

United Kingdom revenues:
Check cashing......................................................... 10.3 11.9 12.6
Consumer lending, net................................................. 4.6 5.1 5.6
Money transfers....................................................... 0.6 0.8 1.1
Other ................................................................ 1.1 1.3 1.7
---------------------------
Total United Kingdom revenues............................................. 16.6 19.1 21.0

Store and regional expenses:
Salaries and benefits................................................. 32.3 31.8 30.8
Occupancy............................................................. 9.0 8.6 8.0
Depreciation.......................................................... 3.2 2.7 2.7
Other................................................................. 22.9 21.8 21.7
---------------------------
Total store and regional expenses......................................... 67.4 64.9 63.2

Establishment of reserves for new consumer lending arrangements........... 1.1 - -
Corporate expenses........................................................ 12.1 14.2 13.3
Management fee............................................................ 0.5 0.5 0.4
Losses on store closings and sales and other restructuring................ 0.8 1.8 0.1
Other depreciation and amortization....................................... 1.3 1.5 1.3
Interest expense, net of interest income.................................. 15.5 15.7 16.3
Loss on extinguishment of debt............................................ - - 4.2
Litigation settlement costs............................................... - 1.3 -
---------------------------
Income before income taxes................................................ 1.3 0.1 1.2
Income tax provision ..................................................... 3.0 4.0 12.5
---------------------------
Net loss.................................................................. (1.7)% (3.9)% (11.3)%
===========================



Year Ended June 30, 2004 Compared to the Year Ended June 30, 2003

Revenues. Total revenues were $246.4 million for fiscal 2004 compared to
$219.4 million for fiscal 2003, an increase of $27.0 million or 12.3%.
Comparable store, franchised store and document transmitter sales for the entire
period increased $24.8 million or 11.5%. New store openings accounted for an
increase of $3.6 million while closed stores accounted for a decrease of $1.7
million. Favorable foreign currency rates attributed to $12.3 million of the
increase for the fiscal year. In addition to the currency benefit, revenues in
the United Kingdom for the fiscal year increased by $5.8 million primarily
related to revenues from check cashing and the impact of a new installment loan

28

product. Revenues in Canada for the fiscal year increased $9.6 million after
adjusting for favorable exchange rate. An increase in volume of short-term
consumer loans originated in Canada and higher consumer loan pricing contributed
to the increase in Canadian revenues In addition, our Canadian subsidiary
introduced a new tax product in all of its stores offering refund anticipation
loans and electronic Canadian tax filing. This product, which was only tested in
a limited number of locations in the prior year period, added $1.0 million in
revenue for the fiscal year, which is included in other revenues. In the United
States, revenues declined $612,000 for the fiscal year, primarily due to the
decline in our distribution of government assistance food coupons. California,
the last state in which we offer food coupons, is implementing an electronic
benefits transfer system designed to disburse public assistance benefits
directly to individuals. Beginning in fiscal 2005, we do not expect to derive
any revenue from the distribution of government assistance food coupons.
Revenues from franchise fees and royalties accounted for $7.5 million, or 3.0%
of total revenues, for the fiscal year compared to $6.3 million, or 2.9% of
total revenues, for the same period in 2003, representing a $1.2 million, or
19.0%, increase. Stronger foreign currencies in both the United Kingdom and
Canada accounted for $721,000, or 60.1%, of the increase. The balance of the
increase resulted from the addition of a total of 12 franchised locations during
fiscal 2004 and an overall increase in revenues generated by existing
franchises.

Store and Regional Expenses. Store and regional expenses were $155.7 million
for fiscal 2004 compared to $142.3 million for fiscal 2003, an increase of $13.4
million or 9.4%. The impact of foreign currencies accounted for $6.4 million of
this increase. New store openings accounted for an increase of $2.1 million
while closed stores accounted for a decrease of $1.3 million. Comparable retail
store and franchised store expenses for the entire period increased $15.5
million. For the fiscal year ended June 30, 2004, total store and regional
expenses decreased to 63.2% of total revenues compared to 64.9% of total
revenues for the fiscal year ended June 30, 2003. After adjusting for the impact
of the changes in exchange rates, store and regional expenses increased $5.9
million in Canada, $2.2 million in the United Kingdom and declined $720,000 in
the United States. The increase in Canada was primarily due to increases of $1.2
million in salaries, $512,000 in returned checks, net and cash shortages,
$494,000 in advertising and $429,000 in occupancy costs. These costs, in
addition to the aggregate of other operating costs, are commensurate with the
overall growth in Canadian revenues. The increase in the United Kingdom is
almost entirely associated with increased salary expense, which is also
commensurate with the overall growth in U.K. revenues. The decline in store and
regional expenses in the United States is primarily due to the impact of stores
closed in the second quarter of fiscal 2003.

Corporate Expenses. Corporate expenses were $32.8 million for fiscal year
2004 compared to $31.2 million for fiscal year 2003, an increase of $1.6 million
or 5.1%. After adjusting for the impact of the changes in exchange rates,
corporate expenses declined $64,000. The decline reflects the cost reductions
related to the rationalization of our store support functions for our North
American operations offset in part by increased accrued expenses for incentive
compensation and legal and professional fees. For the fiscal year ended June 30,
2004, total corporate expenses decreased to 13.3% of total revenues compared to
14.2% for the fiscal year ended June 30, 2003.

Management Fees. Management fees paid to Leonard Green & Partners, L.P.
under a management services agreement were $1.0 million for the fiscal years
ended June 30, 2004 and 2003.

Losses on Store Closings and Sales and Other Restructuring. Losses on store
closings and sales and other restructuring was $361,000 for the fiscal year
ended June 30, 2004 compared to $4.0 million for the fiscal year ended June 30,
2003, a decrease of $3.6 million. For fiscal year 2003, we provided $1.6 million
for the closure costs associated with the shutdown of 27 underperforming stores.
In addition, we provided $1.7 million, consisting primarily of severance and
retention bonus costs, for the consolidation and relocation of certain
non-operating functions.

Other Depreciation and Amortization. Other depreciation and amortization
expenses were $3.3 million for fiscal 2004, compared to $3.3 million for fiscal
2003.

Interest Expense. Interest expense was $40.1 million for the fiscal year
ended June 30, 2004 and was $34.6 million for the fiscal year ended June 30,
2003, an increase of $5.5 million or 15.9%. A portion of the increase is
attributable to $1.0 million of interest paid on Dollar Financial Group, Inc.'s
old 10.875% senior notes for the 30 day period subsequent to its issuance on
November 13, 2003 of $220.0 million principal amount of new 9.75% senior notes.
Dollar Financial Group, Inc. elected to effect covenant defeasance on its old
notes by depositing with the trustee funds sufficient to satisfy the old notes
together with the call premium and accrued interest to the December 13, 2003
redemption date. Additionally, the increased interest on the incremental
long-term debt outstanding after the refinancing on November 13, 2003 and an
additional offering of $20 million principal amount of 9.75% senior notes due
2011 on May 6, 2004 accounted for $6.2 million of the increase in total interest
expense. Offsetting these increases was a decline of $2.1 million in interest on

29

our revolving credit facility. This decline is a result of the use of a portion
of the proceeds from the issuance of the new 9.75% senior notes to repay the
entire outstanding revolving credit balance on November 13, 2003.

Loss on Extinguishment of Debt. On November 13, 2003, Dollar Financial
Group, Inc. issued $220.0 million principal amount of 9.75% senior notes due
2011. The proceeds from this offering were used to redeem all of its outstanding
10.875% senior notes and its outstanding 10.875% senior subordinated notes, to
refinance our credit facility, to distribute a portion of the proceeds to us to
redeem an equal amount of our senior discount notes and to pay fees and expenses
with respect to these transactions and a related note exchange transaction
involving our senior discount notes. On May 6, 2004, Dollar Financial Group,
Inc. consummated an offering of $20.0 million principal amount of 9.75% Senior
Notes due 2011. The notes were offered as additional debt securities under the
indenture pursuant to which Dollar Financial Group, Inc. had issued $220.0
million of notes in November 2003. The notes issued in November 2003 and the
notes issued in May 2004 constitute a single class of securities. The net
proceeds from the May 2004 note offering were distributed to us to redeem
approximately $9.1 million aggregate principal amount of our 16.0% senior notes
due 2012 and approximately $9.1 million aggregate principal amount of our 13.95%
senior subordinated notes due 2012.

On June 30, 2004, we terminated an agreement under which we sold a
participation interest in a portion of the short-term consumer loans originated
by us in the United Kingdom to a third party. Associated with the termination of
this agreement we paid $276,660 representing a prepayment penalty.

The loss incurred on the extinguishment of debt is as follows (in millions):



Call Premium
16.0% Senior Notes...................................................... $1.23
13.95% Senior Subordinated Notes........................................ -
Dollar Financial Group, Inc. 10.875% Senior Notes....................... 1.98
Dollar Financial Group, Inc. 10.875% Senior Subordinated Notes.......... 0.73
Write-off of previously capitalized deferred issuance costs, net............. 6.14
Prepayment penalty on the extinguishment of collateralized borrowings........ 0.28
----------
Loss on extinguishment of debt............................................... $10.36
==========


Litigation Settlement Costs. We accrued and paid $2.8 million during fiscal
2003 related to the California wage and hour litigation described in "Item 3 -
Legal Proceedings."

Income Taxes. The provision for income taxes was $30.8 million for the
fiscal year ended June 30, 2004 compared to a provision of $8.7 million for the
fiscal year ended June 30, 2003, an increase of $22.1 million. Due to the
restructuring of our debt, significant deferred tax assets have been generated
and recorded in accordance with SFAS 109. Because realization is not assured,
the deferred tax assets recorded were reduced by a valuation allowance of $24.5
million at June 30, 2004. Our effective income tax rate was 1,098.0% for the
fiscal year ended June 30, 2004 and 6,195.0% for the fiscal year ended June 30,
2003. Following our refinancing in November 2003, we no longer accrue U.S. tax
on our foreign earnings. The amount of such tax was $2.3 million for the fiscal
year ended June 30, 2004 and $5.2 million for the fiscal year ended June 30,
2003. As a result, we expect our effective income tax rate to be approximately
42.0% in future quarters after fiscal 2004.

Year Ended June 30, 2003 Compared to the Year Ended June 30, 2002

Revenues. Total revenues were $219.4 million for fiscal 2003, compared to
$202.0 million for fiscal 2002, an increase of $17.4 million, or 8.6%.
Comparable retail store, franchised store and document transmitter revenues
increased $15.8 million, or 8.1%, which is primarily attributable to our foreign
operations as those markets continue to mature as well as the impact of
favorable foreign currency rates in fiscal 2003. New store openings accounted
for an increase of $4.5 million, which was partially offset by a decline of $2.9
million in revenues from closed stores. The increase in total revenues resulted
primarily from an increase of $11.7 million, or 16.8%, in consumer lending
revenues. The increase in consumer lending revenues was primarily a result of a
$7.8 million, or 34.2%, increase in revenues in Canada resulting from higher
lending volumes and increased finance charges, and an increase of $3.9 million,
or 8.3%, in domestic revenues primarily resulting from a decrease in net credit
losses which are charged against the reserve during the period in which the loss
occurred. The reserve for losses is then replenished through a charge to revenue
in same period. In addition to the increase in consumer lending revenues, our
check cashing revenues increased by $3.6 million, or 3.5%. Foreign check cashing
revenues accounted for $8.1 million of this increase offset by a $4.5 million

30

decline in domestic check cashing revenues due to an overall decline in service
sector employment. The balance of the increase in total revenues, $2.1 million,
relates to other ancillary products, primarily revenues from money transfer
fees.

Store and Regional Expenses. Store and regional expenses were $142.3 million
for fiscal 2003, compared to $136.1 million for fiscal 2002, an increase of $6.2
million, or 4.5%. The effect of the new store openings in fiscal 2003 accounted
for an increase of $1.5 million. Also, store and regional expenses increased
$4.0 million due to increased salaries and benefits attributable to our foreign
subsidiaries, commensurate with the growth in those operations. Total store and
regional expenses as a percentage of revenues decreased from 67.4% in fiscal
2002 to 64.9% in fiscal 2003. Store and regional expenses as a percentage of
revenues of our foreign subsidiaries were 55.7% for fiscal 2002 and 52.5% for
fiscal 2003.

Salaries and Benefits Expense. Salaries and benefits expense was $69.8
million for fiscal 2003, compared to $65.3 million for fiscal 2002, an
increase of $4.5 million, or 6.9%. New store openings accounted for $600,000
of the increase. Our foreign subsidiaries accounted for an increase of $4.0
million in salaries and benefits. Salaries and benefits expense as a
percentage of revenues decreased from 32.3% for fiscal 2002 to 31.8% for
fiscal 2003.

Occupancy Expense. Occupancy expense was $18.9 million for fiscal 2003,
compared to $18.1 million for fiscal 2002, an increase of $800,000, or 4.3%.
New store openings accounted for $300,000 of the increase. Occupancy expense
as a percentage of revenues decreased from 9.0% for fiscal 2002 to 8.6% for
fiscal 2003.

Depreciation Expense. Depreciation expense was $5.9 million for fiscal
2003, compared to $6.5 million for fiscal 2002, a decrease of $600,000, or
10.2%. Depreciation expense as a percentage of revenues decreased from 3.2%
for fiscal 2002 to 2.7% for fiscal 2003.

Other. Other store and regional expenses were $47.8 million for fiscal
2003, compared to $46.2 million for fiscal 2002, an increase of $1.6
million, or 3.3%. New store openings accounted for an increase in other
store and regional expenses of $600,000. The closing of stores during the
fiscal year partially offset these increases. Other store and regional
expenses consist of bank charges, armored carrier services, returned checks,
net and cash shortages, telephone and telecommunication, advertising and
other costs incurred by the stores.

Establishment of Reserves for New Consumer Lending Arrangements. During
fiscal 2002 we ceased servicing loans for Eagle National Bank, entered into a
new servicing arrangement with County Bank and increased the number of
company-funded loans we originated. Because of this change in servicing
arrangement, and the corresponding changes in banking systems, procedures and
daily operations, we believed that the existing outstanding loan portfolio could
experience charge-offs greater than our historical charge-off levels. In
addition, County Bank imposed new restrictions on loans marketed in the State of
California that we believed increased the likelihood of loan losses on the
existing portfolio of loans originated in California. Accordingly, we
established a reserve of $2.2 million in fiscal 2002 and no such amounts were
recorded in fiscal 2003 or fiscal 2004.

Corporate Expenses. Corporate expenses were $31.2 million for fiscal 2003,
compared to $24.5 million for fiscal 2002, an increase of $6.7 million, or
27.4%. Salaries and benefits increased $3.7 million associated with the growth
of foreign operations. There was an increase of $1.7 million in professional
fees that includes legal and consulting costs associated with the implementation
of enhanced transaction processing systems and systems development costs
associated with our new banking relationships with First Bank and County Bank.
During the fourth quarter of fiscal 2003, we transferred certain operational
support functions to our Canadian headquarters from our U.S. headquarters to
complete a process of rationalizing our North American corporate office
functions that had begun in October 2002. Corporate expenses as a percentage of
revenues increased from 12.1% for fiscal 2002 to 14.2% for fiscal 2003.

Management Fees. Management fees paid to Leonard Green & Partners, L.P.
under a management services agreement were $1.0 million for the fiscal years
ended June 30, 2003 and 2002.

Losses on Store Closings and Sales and Other Restructuring. Losses on store
closings and sales and other restructuring was $4.0 million for fiscal 2003,
compared to $1.4 million for fiscal 2002. For fiscal 2003, we provided $1.6
million for the closure costs associated with the shutdown of 27 stores. These
costs consist primarily of lease obligations and leasehold improvement
write-offs. In addition, we provided $1.7 million, consisting primarily of
severance and retention bonus costs, for the consolidation and relocation of
certain non-operating functions.

31

Other Depreciation and Amortization. Other depreciation and amortization
expenses were $3.3 million for fiscal 2003, compared to $2.7 million for fiscal
2002, an increase of $600,000, or 22.6%. This increase is attributable to
additional investments in technology and the expansion of our Canadian corporate
office as a result of the relocation of certain operational support functions to
Canada from the U.S. headquarters. Other depreciation and amortization as a
percentage of revenues increased from 1.3% for fiscal 2002 to 1.5% for fiscal
2003.

Interest Expense. Interest expense was $34.6 million for fiscal 2003,
compared to $31.3 million for fiscal 2002, an increase of $3.3 million, or
10.5%. This increase is primarily attributable to the increase in the accretion
of interest expense from our 13% senior discount notes, an increase in the
average borrowing rates of our revolving credit facilities as a result of a
November 2002 amendment to our credit facility and the impact of the higher
effective interest rate on our collateralized borrowings.

Litigation Settlement Costs. We accrued and paid $2.8 million during fiscal
2003 related to the California wage and hour litigation described in "Item 3 -
Legal Proceedings."

Income Tax Provision. The provision for income taxes was $8.7 million in
fiscal 2003 and $6.0 million in fiscal 2002. Our effective income tax rate was
619.5% for fiscal 2003 and 230.1% for fiscal 2002. Our effective tax rate
differs from the federal statutory rate of 35% due to state taxes, foreign
taxes, disallowed high yield debt interest and U.S. taxes on foreign earnings,
primarily resulting from the guarantees on our prior credit facility and senior
notes by our foreign subsidiaries. Following our refinancing in November 2003,
we no longer accrue U.S. tax on our foreign earnings. The amount of such tax was
$5.2 million for fiscal 2003 and $2.4 million for fiscal 2002.

Quarterly Operating Results

The following table sets forth, for the periods indicated, our results of
operations and selected items in our consolidated statements of operations. The
information for each of these quarters is unaudited and has been prepared on the
same basis as our audited financial statements. In the opinion of our
management, all necessary adjustments, consisting only of normal recurring
adjustments, have been included to present fairly the unaudited quarterly
results when read in conjunction with our audited consolidated financial
statements.


Three months ended

September 30 December 31 March 31 June 30
-----------------------------------------------------------------
Fiscal 2004:
Revenues............................... $ 56,990 $ 60,762 $ 65,626 $ 63,052
Income (loss) before incomes taxes..... 1,243 (6,481) 7,392 655
Net income (loss)...................... (2,601) (24,973) 1,603 (2,062)

Fiscal 2003:
Revenues............................... $ 52,652 $ 53,290 $ 57,974 $ 55,472
Income (loss) before incomes taxes..... (966) (4,038) 4,522 623
Net income (loss)...................... (3,201) (6,271) 3,218 (2,340)


Balance Sheet Variations

June 30, 2004 Compared to June 30, 2003.

Total loans receivable increased $7.7 million from $21.4 million at June 30,
2003 to $29.1 million at June 30, 2004. The increase was primarily attributable
to higher foreign loan volumes of $5.4 million, increased domestic volume of
$1.3 million and a currency translation impact of $1.0 million. As a result of
the increase in our installment loan portfolio the allowance for loan losses
increased $1.0 million from $1.3 million at June 30, 2003 to $2.3 million at
June 30, 2004.

Prepaid expenses increased $2.7 million from $6.5 million at June 30, 2003
to $9.2 million at June 30, 2004 due primarily to an increase in our pawn broker
business in the United Kingdom.

Income taxes receivable increased to $6.1 million at June 30, 2004 from $2.9
million related primarily to the prepayment of taxes by our Canadian subsidiary.

32

Goodwill and other intangibles increased $4.8 million from $143.4 million at
June 30, 2003 to $148.2 million at June 30, 2004 primarily due to foreign
currency translation adjustments.

Debt issuance costs increased from $6.7 million at June 30, 2003 to $11.4
million at June 30, 2004 due to the refinancing of our debt in November 2003 and
May 2004.

Accounts payable decreased $2.2 million from $17.2 million at June 30, 2003
to $15.0 million at June 30, 2004 due to the timing of settlements with third
party vendors and our franchisees.

Foreign income taxes payable increased from $1.4 million at June 30, 2003 to
$6.0 million at June 30, 2004 due primarily to accrued foreign taxes for the
current fiscal year.

Accrued expenses and other liabilities increased to $17.9 million at June
30, 2004 from $10.7 million at June 30, 2003 due to increased professional fees
associated with legal matters associated with our Canadian subsidiary, incentive
accruals and the timing of monies due our franchisees.

Revolving credit facilities and long-term debt increased $21.3 million from
$303.6 million at June 30, 2003 to $325.0 million at June 30, 2004. On November
13, 2003, Dollar Financial Group, Inc. issued $220.0 million principal amount of
9.75% senior notes due 2011 under Rule 144A and Regulation S of the Securities
Act of 1933 and entered into a new $55.0 million senior secured reducing
revolving credit facility. The proceeds from these transactions were used to
repay, in full, all borrowings outstanding under its prior credit facility,
redeem the entire $109.2 million principal amount of its 10.875% senior notes
due 2006, redeem the entire $20.0 million principal amount of its 10.875% senior
subordinated notes due 2006, redeem $20.0 million of our 13.0% senior discount
notes due 2006, and pay all related fees, expenses and redemption premiums with
respect to these transactions. In addition, $49.4 million, or 50% of the
accreted value, of the 13.0% senior discount notes due 2006 were exchanged for
16.0% senior notes due 2012 and $49.4 million, or 50% of the accreted value, of
the 13.0% senior discount notes due 2006 were exchanged for 13.95% senior
subordinated notes due 2012. On May 6, 2004, Dollar Financial Group, Inc.
consummated an offering of $20.0 million principal amount of 9.75% senior notes
due 2011. The notes were offered as additional debt securities under the
indenture pursuant to which it had issued $220.0 million of notes in November
2003. The notes issued in November 2003 and the notes issued in May 2004
constitute a single class of securities under the indenture. The net proceeds
from the May 2004 note offering were distributed to us to redeem approximately
$9.1 million aggregate principal amount of our 16.0% senior notes due 2012 and
approximately $9.1 million aggregate principal amount of our 13.95% senior
subordinated notes due 2012.

Total shareholders' deficit increased $21.9 million to $50.9 million from
$29.0 million due to our net loss for the fiscal year ended June 30, 2004 offset
by foreign translation adjustments.

Liquidity and Capital Resources

On November 13, 2003, Dollar Financial Group, Inc. issued $220.0 million
principal amount of 9.75% senior notes due 2011 and entered into a new $55.0
million senior secured reducing revolving credit facility. The proceeds from
these transactions were used to repay, in full, all borrowings outstanding under
its prior credit facility, redeem the entire $109.2 million principal amount of
our 10.875% senior notes due 2006, redeem the entire $20.0 million principal
amount of its 10.875% senior subordinated notes due 2006, distribute to us $20.0
million to redeem an equal amount of our 13.0% senior discount notes due 2006,
and pay all related fees, expenses and redemption premiums with respect to these
transactions. On May 6, 2004, Dollar Financial Group, Inc. consummated an
additional offering of $20.0 million principal amount of 9.75% senior notes due
2011. The notes were offered as additional debt securities under the indenture
pursuant to which it had issued $220.0 million of notes in November 2003. The
notes issued in November 2003 and the notes issued in May 2004 constitute a
single class of securities under the indenture. The net proceeds from the May
2004 note offering were distributed to us to redeem approximately $9.1 million
aggregate principal amount of our 16.0% senior notes due 2012 and approximately
$9.1 million aggregate principal amount of our 13.95% senior subordinated notes
due 2012.

Our principal sources of cash are from operations and borrowings under our
credit facilities. We anticipate that our primary uses of cash will be to
provide working capital, finance capital expenditures, meet debt service
requirements, fund company originated short-term consumer loans and finance
store expansion.

Net cash provided by operating activities was $13.4 million in fiscal 2002,
$2.9 million in fiscal 2003 and $18.2 million in fiscal 2004. The decline in net
cash provided by operating activities from fiscal 2002 to fiscal 2003 was

33

primarily a result of increased working capital requirements related to the
timing of settlements associated with the consumer lending program. Our prior
relationship with Eagle National Bank provided for daily settlement of amounts
owed to us from consumer loan activity; our relationship with County Bank
provides for monthly settlement and our relationship with First Bank provides
for semi-monthly settlements. The increase in net cash provided by operating
activities was primarily the result of improved operating results and the impact
of the timing of settlements from fiscal 2003 to fiscal 2004 related to our loan
servicing arrangements with County Bank and First Bank.

Net cash used in investing activities was $10.1 million in fiscal 2002,
$10.7 million in fiscal 2003 and $8.6 million in fiscal 2004. Our investing
activities primarily relate to purchases of property and equipment for our
stores, investments in technology and acquisitions. During fiscal 2003, $3.3
million of this amount was attributable to earn-out payments on acquisitions
completed during previous years accounting for the decline from fiscal 2003 to
fiscal 2004. For the fiscal year ended June 30, 2004 we made capital
expenditures of $8.2 million. The actual amount of capital expenditures each
year will depend in part upon the number of new stores acquired or opened and
the number of stores remodeled. Our budgeted capital expenditures, excluding
acquisitions, are currently anticipated to aggregate approximately $10.0 million
during our fiscal year ending June 30, 2005, for remodeling and relocation of
certain existing stores and for opening new stores.

Net cash provided by (used in) financing activities was $10.4 million in
fiscal 2002, $(9.9) million in fiscal 2003 and $(14.3) million in fiscal 2004.
The decline during fiscal 2004 was primarily the result of a decrease in
borrowings under our bank facilities from $61.7 million as of June 30, 2003 to
$0 million as of June 30, 2004 offset somewhat by net cash from the refinancing
activities discussed above. The decline during fiscal 2003 was also the result
of a decrease in borrowings under our revolving credit facilities from $78.9
million as of June 30, 2002 to $61.7 million as of June 30, 2003.

As part of our growth strategy, we opened 14 new stores and acquired 3
stores during the fiscal year ended June 30, 2004, resulting in a net gain of
approximately 14 stores after store dispositions and closings. We expect to open
approximately 20 to 30 new stores in fiscal 2005, resulting in a net gain of
approximately 17 to 27 new stores after store dispositions and closings.

The capital cost of opening a new store is typically in the range of $95,000
to $125,000 but varies depending on the size and type of store. This capital
cost includes leasehold improvements, signage, computer equipment and security
systems. In addition, the typical store requires working capital of $40,000 to
$60,000 to fund operations.

For the fiscal year ended June 30, 2004, we spent $8.2 million on capital
expenditures and $550,000 on store acquisitions.

Revolving Credit Facilities. During fiscal 2004, we had three revolving
credit facilities: a domestic revolving credit facility, a Canadian overdraft
facility and a United Kingdom overdraft facility.

Domestic Revolving Credit Facility. On November 13, 2003, Dollar
Financial Group, Inc. repaid in full all borrowings outstanding under
its previously existing credit facility using a portion of the proceeds
from the issuance of $220.0 million principal amount of 9.75% senior
notes due 2011 and simultaneously entered into a new $55.0 million
senior secured reducing revolving credit facility. Under the terms of
the agreement governing the new facility, the commitment under the new
facility was reduced by $750,000 on January 2, 2004 and will be reduced
on the first business day of each calendar quarter thereafter, and is
subject to additional reductions based on excess cash flow up to a
maximum reduction, including quarterly reductions, of $15.0 million. The
commitment may be subject to further reductions in the event we engage
in certain issuances of securities or asset disposals. Under the new
facility, up to $20.0 million may be used in connection with letters of
credit. Dollar Financial Group, Inc.'s borrowing capacity under the new
facility is limited to the total commitment of $55.0 million less
letters of credit totaling $13.0 million issued by Wells Fargo Bank,
which guarantee the performance of certain of its contractual
obligations. At June 30, 2003 we had $16.7 million cash in excess of our
short-term borrowing needs. As a consequence, at June 30, 2004, the
borrowing capacity was $40.5 million and the amount outstanding was $0.

Canadian Overdraft Facility. Our Canadian operating subsidiary has a
Canadian overdraft facility to fund peak working capital needs for our
Canadian operations. The Canadian overdraft facility provides for a
commitment of up to approximately $10.0 million, of which there was no
outstanding balance on June 30, 2004. Amounts outstanding under the
Canadian overdraft facility bear interest at a rate of Canadian prime

34

and are secured by a $10.0 million letter of credit issued by Wells
Fargo Bank under our domestic revolving credit facility.

United Kingdom Overdraft Facility. For our U.K. operations, our U.K.
operating subsidiary had an overdraft facility which provided for a
commitment of up to approximately $6.9 million, of which there was no
outstanding balance on June 30, 2004. The United Kingdom overdraft
facility was secured by a $6.0 million letter of credit issued by Wells
Fargo Bank under our domestic revolving credit facility. The United
Kingdom overdraft facility expired on March 31, 2004 and was not
renewed.

Long-term Debt. As of June 30, 2004, long-term debt consisted of $240.0
million principal amount of Dollar Financial Group, Inc.'s 9.75% senior notes
due November 15, 2011, $42.1 million of our 16.0% Senior Notes due 2012, $41.7
million of our 13.95% Senior Subordinated Notes due 2012 and $105,000 of other
long-term debt.

Operating Leases. Operating leases are scheduled payments on existing store
and other administrative leases. These leases typically have initial terms of 5
years and may contain provisions for renewal options, additional rental charges
based on revenue and payment of real estate taxes and common area charges.

Other Collateralized Borrowings. On November 15, 2002, we entered into an
agreement with a third party to sell, without recourse subject to certain
obligations, a participation interest in a portion of the short-term consumer
loans originated by us in the United Kingdom. Pursuant to the agreement, we
retained servicing responsibilities and earned servicing fees, which were
subject to reduction if the related loans were not collected. At June 30, 2003,
there were $8.0 million of loans receivable pledged under this agreement. On
June 30, 2004 we terminated this agreement and we paid $8.0 million to
repurchase the participation interest, $104,000 of accrued interest and $276,600
representing a prepayment penalty. The entire amount was paid with available
cash on hand and no additional borrowing was required. In connection with the
repurchase of the participation interest, the liens on the loans receivable were
released.

We entered into the commitments described above and other contractual
obligations in the normal course of business as a source of funds for asset
growth and asset/liability management and to meet required capital needs. Our
principal future obligations and commitments as of June 30, 2004, excluding
periodic interest payments, included the following:



Payments Due by Period (in thousands)

--------------------------------------------------------------------------------
Less than 1 1 - 3 Years 4 - 5 After 5
Total Year Years Years
------------- ------------- ------------ ------------- -------------
Long-term debt
Dollar Financial Group, Inc.
9.75% Senior Notes due 2011.... $ 241,176 $ - $ - $ - $ 241,176
16.0% Senior Notes due 2012...... 42,070 - - - 42,070
13.95% Senior Subordinated
Notes due 2012................. 41,652 - - - 41,652
Operating leases..................... 61,462 17,143 23,822 13,196 7,301
Other................................ 105 105 - - -
------------- ------------- ------------ ------------- -------------

Total contractual cash obligations... $ 386,465 $ 17,248 $ 23,822 $ 13,196 $ 332,199
============= ============= ============ ============= =============



We believe that, based on current levels of operations and anticipated
improvements in operating results, cash flows from operations and borrowings
available under our credit facilities will allow us to fund our liquidity and
capital expenditure requirements for the foreseeable future, including payment
of interest and principal on our indebtedness. This belief is based upon our
historical growth rate and the anticipated benefits we expect from operating
efficiencies. We expect additional revenue growth to be generated by increased
check cashing revenues, growth in the consumer lending business, the maturity of
recently opened stores and the continued expansion of new stores. We also expect
operating expenses to increase, although the rate of increase is expected to be
less than the rate of revenue growth. Furthermore, we do not believe that
additional acquisitions or expansion are necessary to cover our fixed expenses,
including debt service.

Impact of Inflation

We do not believe that inflation has a material impact on our earnings from
operations.

35

Seasonality

Our business is seasonal due to the impact of several tax-related services,
including cashing tax refund checks. Historically, we have generally experienced
our highest revenues and earnings during our third fiscal quarter ending March
31, when revenues from these tax-related services peak. Due to the seasonality
of our business, results of operations for any fiscal quarter are not
necessarily indicative of the results of operations that may be achieved for the
full fiscal year. In addition, quarterly results of operations depend
significantly upon the timing and amount of revenues and expenses associated
with the addition of new stores.





36

Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Generally

In the operations of our subsidiaries and the reporting of our consolidated
financial results, we are affected by changes in interest rates and currency
exchange rates. The principal risks of loss arising from adverse changes in
market rates and prices to which we and our subsidiaries are exposed relate to:

o interest rates on debt; and
o foreign exchange rates generating translation gains and losses.

We and our subsidiaries have no market risk sensitive instruments entered
into for trading purposes, as defined by GAAP. Information contained in this
section relates only to instruments entered into for purposes other than
trading.

Interest Rates

Our outstanding indebtedness, and related interest rate risk, is managed
centrally by our treasury department by implementing the financing strategies
approved by our board of directors. Our debt consists of fixed-rate senior and
senior subordinated notes. Our revolving credit facilities carry variable rates
of interest. As most of our average outstanding indebtedness carries a fixed
rate of interest, a change in interest rates is not expected to have a
significant impact on our consolidated financial position, results of operations
or cash flows.

Foreign Exchange Rates

Operations in the United Kingdom and Canada have exposed us to shifts in
currency valuations. From time to time, we may elect to purchase put options in
order to protect earnings in the United Kingdom and Canada against foreign
currency fluctuations. Out of the money put options may be purchased because
they cost less than completely averting risk, and the maximum downside is
limited to the difference between the strike price and exchange rate at the date
of purchase and the price of the contracts. At June 30, 2004, we held put
options with an aggregate notional value of $(CAN) 44.0 million and (pound)(GBP)
7.7 million to protect the currency exposure in Canada and the United Kingdom
throughout fiscal year 2005. We use purchased options designated as cash flow
hedges to protect against the foreign currency exchange rate risks inherent in
our forecasted earnings denominated in currencies other than the U.S. dollar.
Our cash flow hedges have a duration of less than twelve months. For derivative
instruments that are designated and qualify as cash flow hedges, the effective
portions of the gain or loss on the derivative instrument are initially recorded
in accumulated other comprehensive income as a separate component of
shareholders' equity and subsequently reclassified into earnings in the period
during which the hedged transaction is recognized in earnings. The ineffective
portion of the gain or loss is reported in corporate expenses on the statement
of operations. For options designated as hedges, hedge effectiveness is measured
by comparing the cumulative change in the hedge contract with the cumulative
change in the hedged item, both of which are based on forward rates. As of June
30, 2004 no amounts were excluded from the assessment of hedge effectiveness.
There was no ineffectiveness in our cash flow hedges for the year ended June 30,
2004.

Canadian operations accounted for approximately 127.5% of consolidated
pre-tax earnings for the fiscal year ended June 30, 2004, and 166.6% of
consolidated pre-tax earnings for the fiscal year ended June 30, 2003. U.K.
operations accounted for approximately 55.3% of consolidated pre-tax earnings
for the fiscal year ended June 30, 2004 and approximately 52.9% of consolidated
pre-tax earnings for the fiscal year ended June 30, 2003. As currency exchange
rates change, translation of the financial results of the Canadian and U.K.
operations into U.S. dollars will be impacted. Changes in exchange rates have
resulted in cumulative translation adjustments increasing our net assets by $6.1
million. Our U.K. subsidiaries had $8.0 million of collateralized borrowings
denominated in U.S. dollars for all of fiscal 2003 and most of fiscal 2004. The
collateralized borrowings were subject to foreign currency transaction gains and
losses. These gains and losses are included in corporate expenses.

We estimate that a 10.0% change in foreign exchange rates by itself would
have impacted reported pre-tax earnings from continuing operations by
approximately $3.9 million for fiscal 2004 and $3.4 million for 2003. This
impact represents nearly 18.1% of our consolidated pre-tax earnings for the
fiscal year ended June 30, 2004 and 21.7% of our consolidated pre-tax earnings
for the fiscal year ended June 30, 2003. The above figures do not reflect the
impact of hedging activities designed to mitigate foreign exchange currency
risks.


37

Item 8. FINANCIAL STATEMENTS

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Shareholders
Dollar Financial Corp.

We have audited the accompanying consolidated balance sheets of Dollar Financial
Corp. as of June 30, 2004 and 2003, and the related consolidated statements of
operations, shareholders' equity, and cash flows for each of the three years in
the period ended June 30, 2004. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Dollar Financial
Corp. at June 30, 2004 and 2003, and the consolidated results of its operations
and its cash flows for each of the three years in the period ended June 30,
2004, in conformity with U.S. generally accepted accounting principles.

/s/ Ernst & Young LLP

Philadelphia, Pennsylvania
August 27, 2004










38

DOLLAR FINANCIAL CORP.

CONSOLIDATED BALANCE SHEETS
(In thousands except share amounts)

June 30,

------------------------------------------
2003 2004
------------------- -------------------
Assets
Cash and cash equivalents.............................................. $ 71,809 $ 69,270
Loans receivable
Loans receivable................................................... 13,444 29,116
Loans receivable pledged........................................... 8,000 -
------------------- -------------------
Total loans receivable................................................. 21,444 29,116
Less: Allowance for loan losses....................................... 1,344 2,315
------------------- -------------------
Loans receivable, net.................................................. 20,100 26,801
Other consumer lending receivables..................................... 6,458 7,404
Other receivables...................................................... 4,500 3,787
Income taxes receivable................................................ 2,939 6,125
Prepaid expenses....................................................... 6,358 9,161
Deferred income taxes, net of valuation allowance of $24,474 and $0.... 15,610 -
Notes and interest receivable - officers............................... 4,642 5,054
Property and equipment, net of accumulated
depreciation of $39,309 and $49,540................................ 29,209 27,965
Goodwill and other intangibles, net of accumulated
amortization of $22,017 and $23,339................................ 143,416 148,228
Debt issuance costs, net of accumulated
amortization of $9,201 and $987 ................................... 6,737 11,428
Other.................................................................. 1,833 3,224
------------------- -------------------
$ 313,611 $ 318,447
=================== ===================

Liabilities and shareholders' deficit
Accounts payable....................................................... $ 17,245 $ 14,973
Foreign income taxes payable........................................... 1,380 5,979
Accrued expenses and other liabilities................................. 10,686 17,854
Accrued interest payable............................................... 1,656 5,525
Other collateralized borrowings........................................ 8,000 -
Revolving credit facilities............................................ 61,699 -
10.875% Senior Notes due 2006.......................................... 109,190 -
13.0% Senior Discount Notes due 2006................................... 112,644 -
9.75% Senior Notes due 2011............................................ - 241,176
16.0% Senior Notes due 2012............................................ - 42,070
13.95% Senior Subordinated Notes due 2012.............................. - 41,652
Subordinated notes payable and other................................... 20,081 105
Shareholders' deficit:
Common stock, $1 par value: 100,000 shares authorized;
19,865 shares issued at June 30, 2003 and 2004.................. - -
Additional paid-in capital......................................... 61,481 61,481
Accumulated deficit................................................ (92,883) (120,916)
Accumulated other comprehensive income............................. 7,697 13,813
Treasury stock at cost; 107 shares at June 30, 2003 and 2004....... (956) (956)
Management equity loan............................................. (4,309) (4,309)
------------------- -------------------
Total shareholders' deficit............................................ (28,970) (50,887)
------------------- -------------------
$ 313,611 $ 318,447
=================== ===================
See accompanying notes.



39

DOLLAR FINANCIAL CORP.

CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands)

Year ended June 30,

-----------------------------------------------
2002 2003 2004
-----------------------------------------------

Revenues:
Check cashing............................................ $ 104,792 $ 108,435 $ 117,397
Consumer lending:
Fees from consumer lending............................. 97,712 106,557 120,807
Provision for loan losses and adjustment to
servicing revenue..................................... (27,913) (24,995) (24,489)
-----------------------------------------------

Consumer lending, net.................................... 69,799 81,562 96,318
Money transfer fees...................................... 10,098 11,652 13,052
Other ................................................... 17,287 17,739 19,663
-----------------------------------------------
Total revenues............................................... 201,976 219,388 246,430
Store and regional expenses:
Salaries and benefits.................................... 65,295 69,799 76,008
Occupancy 18,087 18,856 19,805
Depreciation............................................. 6,522 5,859 6,546
Returned checks, net and cash shortages.................. 9,107 8,531 9,132
Telephone and telecommunication.......................... 5,587 5,538 5,665
Advertising.............................................. 4,949 5,899 6,943
Bank charges............................................. 4,240 3,138 3,744
Armored carrier services................................. 2,651 2,873 3,051
Other.................................................... 19,704 21,787 24,786
-----------------------------------------------
Total store and regional expenses............................ 136,142 142,280 155,680

Establishment of reserves for new consumer lending
arrangements............................................. 2,244 - -
Corporate expenses........................................... 24,516 31,241 32,813
Management fee............................................... 1,049 1,049 1,003
Losses on store closings and sales and other restructuring... 1,435 3,987 361
Other depreciation and amortization.......................... 2,709 3,320 3,286
Interest expense, net of interest income of $513, $431
and $436................................................. 31,274 34,620 40,123
Loss on extinguishment of debt............................... - - 10,355
Litigation settlement costs.................................. - 2,750 -
-----------------------------------------------
Income before income taxes................................... 2,607 141 2,809
Income tax provision......................................... 5,999 8,735 30,842
-----------------------------------------------
Net loss..................................................... $ (3,392)$ (8,594) $ (28,033)
===============================================


See accompanying notes.




40

DOLLAR FINANCIAL CORP.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' DEFICIT
(In thousands, except share data)




Accumulated
Common Stock Additional Other Management Total
------------------- Paid-in (Accumulated Comprehensive Treasury Equity Shareholders'
Shares Amount Capital Deficit) (Loss) Income Stock Loan Deficit
----------------------------------------------------------------------------------------------------
Balance, June 30, 2001....... 19,865 $ - $ 61,481 $ (80,897) $ (9,199) $ (956) $ (4,309) $ (33,880)
Comprehensive income
Translation adjustment
for the year ended
June 30, 2002....... 4,854 4,854
Net loss for the year
ended June 30, 2002. (3,392) (3,392)
-----------
Total comprehensive income... 1,462
------------------------------------------------------------------------------------------------------
Balance, June 30, 2002....... 19,865 - 61,481 (84,289) (4,345) (956) (4,309) (32,418)
======================================================================================================
Comprehensive income
Translation adjustment
for the year ended
June 30, 2003....... 12,042 12,042
Net loss for the year
ended June 30, 2003. (8,594) (8,594)
-----------
Total comprehensive income... 3,448
------------------------------------------------------------------------------------------------------
Balance, June 30, 2003....... 19,865 - 61,481 (92,883) 7,697 (956) (4,309) (28,970)
======================================================================================================
Comprehensive income
Translation adjustment
for the year ended
June 30, 2004....... 6,116 6,116
Net loss for the year
ended June 30, 2004. (28,033) (28,033)
-----------
Total comprehensive loss..... (21,917)
------------------------------------------------------------------------------------------------------
Balance, June 30, 2004....... 19,865 $ - $ 61,481 $ (120,916) $ 13,813 $ (956) $ (4,309) $ (50,887)
======================================================================================================

See accompanying notes.




41

DOLLAR FINANCIAL CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)


Year ended June 30,

------------------------------------------
2002 2003 2004
------------------------------------------

Cash flows from operating activities:
Net loss................................................................. $ (3,392) $ (8,594) $(28,033)
Adjustments to reconcile net income to net cash provided by
operating activities:
Interest expense from Senior Discount Notes....................... 12,539 14,373 5,827
Depreciation and amortization..................................... 11,040 11,309 11,713
Loss on extinguishment of debt.................................... - - 10,355
Losses on store closings and sales and other restructuring........ 1,154 3,987 187
Establishment of reserves for new consumer lending arrangements... 1,448 - -
Foreign currency gain on revaluation of collateralized borrowings. - (398) (838)
Deferred tax benefit (provision).................................. (4,184) (4,310) 15,610
Change in assets and liabilities (net of effect of acquisitions):
Decrease (increase) in loans and other receivables............. 2,417 (9,301) (7,617)
(Increase) decrease in income taxes receivable................. (1,145) 317 (3,186)
Decrease (increase) in prepaid expenses and other.............. 260 891 (3,779)
(Decrease) increase in accounts payable, income taxes payable,
accrued expenses and accrued interest payable............... (6,695) (5,409) 17,964
------------------------------------------
Net cash provided by operating activities................................ 13,442 2,865 18,203

Cash flows from investing activities:
Acquisitions, net of cash acquired....................................... (45) (3,251) (550)
Gross proceeds from sales of fixed assets................................ - - 81
Additions to property and equipment...................................... (10,063) (7,428) (8,150)
------------------------------------------
Net cash used in investing activities.................................... (10,108) (10,679) (8,619)

Cash flows from financing activities:
Redemption of 16.0% Senior Notes due 2012................................ - - (10,283)
Redemption of 13.95% Senior Subordinated Notes due 2012.................. - - (9,060)
Redemption of 10.875% Senior Subordinated Notes due 2006................. - - (20,734)
Redemption of 13.0% Senior Discount Notes due 2006....................... - - (22,962)
Redemption of collateralized borrowings.................................. - - (8,277)
Other debt payments...................................................... (64) (3) (72)
Other collateralized borrowings.......................................... - 8,000 -
Issuance of 9.75% Senior Notes due 2011.................................. - - 241,176
Redemption of 10.875% Senior Notes due 2006.............................. - - (111,170)
Net increase (decrease) in revolving credit facilities................... 11,112 (17,237) (61,699)
Payments of debt issuance costs.......................................... (571) (690) (11,218)
Purchase of treasury stock............................................... (57) - -
------------------------------------------
Net cash provided by (used in) financing activities...................... 10,420 (9,930) (14,299)
Effect of exchange rate changes on cash and cash equivalents............. 427 2,916 2,176
------------------------------------------
Net increase (decrease) in cash and cash equivalents..................... 14,181 (14,828) (2,539)
Cash and cash equivalents at beginning of year........................... 72,456 86,637 71,809
------------------------------------------
Cash and cash equivalents at end of year................................. $ 86,637 $ 71,809 $ 69,270
==========================================

Supplemental disclosures of cash flow information
Interest paid............................................................ $ 17,472 $ 18,432 $ 21,485
Income taxes paid........................................................ $ 16,035 $ 14,548 $ 13,858


See accompanying notes.



42




DOLLAR FINANCIAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2004

1. Organization and Business

The accompanying consolidated financial statements are those of Dollar Financial
Corp. and its wholly-owned subsidiaries (collectively, the "Company"). Dollar
Financial Corp. is the parent company of Dollar Financial Group, Inc. ("OPCO").
The activities of Dollar Financial Corp. consist primarily of its investment in
OPCO. Dollar Financial Corp. has no employees or operating activities.

The Company, through its subsidiaries, provides retail financial services
through a network of 1,110 locations (of which 638 are Company-operated)
operating as Money Mart, The Money Shop, Loan Mart and Insta-Cheques in sixteen
states, the District of Columbia, Canada and the United Kingdom. The services
provided at the Company's retail locations include check cashing, short-term
consumer loans, sale of money orders, money transfer services and various other
related services. Also, the Company's subsidiary Money Mart Express(R) services
and originates short-term consumer loans through 458 independent document
transmitter locations in 15 states.

2. Significant Accounting Policies

Use of Estimates

The preparation of financial statements in conformity with U.S. generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the consolidated financial
statements and accompanying notes. Actual results could differ from those
estimates.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of the
Company and its wholly owned subsidiaries. All significant intercompany accounts
and transactions have been eliminated in consolidation.

Reclassification

Certain prior year amounts have been reclassified to conform to current year
presentation.

Revenue recognition

With respect to company-operated stores, revenues from the Company's check
cashing, money order sales, money transfer and bill payment services and other
miscellaneous services reported in other revenues on its statement of operations
are all recognized when the transactions are completed at the point-of-sale in
the store.

With respect to the Company's franchised locations, it recognizes initial
franchise fees upon fulfillment of all significant obligations to the
franchisee. Royalty payments from its franchisees are recognized as earned.

For short term consumer loans that the Company makes directly, which have terms
ranging from 1 to 37 days, revenue is recognized using the interest method. Loan
origination fees are recognized as an adjustment to the yield on the related
loan.

In addition to the short-term consumer loans originated and funded by the
Company, the Company also has relationships with two banks, County Bank of
Rehoboth Beach, Delaware and First Bank of Delaware. Pursuant to these
relationships, the Company markets and services short-term consumer loans, which
have terms ranging from 7 to 23 days, that are funded by the banks. The banks
are responsible for the application review process and determining whether to
approve an application and fund a loan. As a result, the banks' loans are not
reflected on the Company's balance sheet. The Company earns a marketing and
servicing fee for each loan that is paid by borrowers to the banks.

43

DOLLAR FINANCIAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

2. Significant Accounting Policies (continued)

For loans funded by County Bank, the Company recognizes net servicing fee income
ratably over the life of the related loan. In addition, each month County Bank
withholds certain servicing fees payable to the Company in order to maintain a
cash reserve. The amount of the reserve is equal to a fixed percentage of
outstanding loans at the beginning of the month plus a percentage of the finance
charges collected during the month. Each month, net credit losses are applied
against County Bank's cash reserve. Any excess reserve is then remitted to the
Company as a collection bonus. The remainder of the finance charges not applied
to the reserve are either used to pay costs incurred by County Bank related to
the short term loan program, retained by the bank as interest on the loan or
distributed to the Company as a servicing fee.

For loans funded by First Bank of Delaware, the Company recognizes net servicing
fee income ratably over the life of the related loan. In addition, the bank has
established a target loss rate for the loans marketed and serviced by the
Company. Servicing fees payable to the Company are reduced if actual losses
exceed this target loss rate by the amount they exceed it. If actual losses are
below the target loss rate, the difference is paid to the Company as a servicing
fee. The measurement of the actual loss rate and settlement of servicing fees
occurs twice every month.

Because the Company's servicing fees are reduced by loan losses incurred by the
banks, it has established a reserve for servicing fee adjustments. To estimate
the appropriate reserve for servicing fee adjustments, the Company considers the
amount of outstanding loans owed to the banks, historical loans charged off,
current collections patterns and current economic trends. The reserve is then
based on net write-offs, expressed as a percentage of loans originated on behalf
of the banks applied against the total amount of the banks' outstanding loans.
This reserve is reported in accrued expenses and other liabilities on the
Company's balance sheet and was $1,093 at June 30, 2003 and $1,380 at June 30,
2004.

If one of the banks suffers a loss on a loan, the Company immediately records a
charge-off against the reserve for servicing fee adjustments for the entire
amount of the unpaid item. A recovery is credited to the reserve during the
period in which the recovery is made. Each month, the Company replenishes the
reserve in an amount equal to the net losses charged to the reserve in that
month. This replenishment, as well as any additional provisions to the reserve
for servicing fees adjustments as a result of the calculations set forth above,
is charged against revenues.

Cash and Cash Equivalents

Cash includes cash in stores and demand deposits with financial institutions.
Cash equivalents are defined as short-term, highly liquid investments both
readily convertible to known amounts of cash and so near maturity that there is
insignificant risk of changes in value because of changes in interest rates.

Loans Receivable, Net

Unsecured short-term and longer-term installment loans that the Company
originates on its own behalf are reflected on the balance sheet in loans
receivable, net. Loans receivable, net are reported net of a reserve related to
consumer lending as described below in company funded consumer loan loss
reserves policy.

Property and Equipment

Property and equipment are carried at cost less accumulated depreciation.
Depreciation is computed using either the straight-line or double declining
balance method over the estimated useful lives of the assets, which vary from
three to five years.



44

DOLLAR FINANCIAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)


2. Significant Accounting Policies (continued)

Intangible Assets

Under the provisions of SFAS 142, "Goodwill and Other Intangible Assets"
intangible assets, including goodwill, that are not subject to amortization will
be tested for impairment annually, or more frequently if events or changes in
circumstances indicate that the asset might be impaired, using a two-step
impairment assessment. The first step of the goodwill impairment test, used to
identify potential impairment, compares the fair value of a reporting unit with
its carrying amount, including goodwill. If the fair value of a reporting unit
exceeds its carrying amount, goodwill of the reporting unit is considered not
impaired, and the second step of the impairment test is not necessary. If the
carrying amount of a reporting unit exceeds its fair value, the second step of
the goodwill impairment test is performed to measure the amount of impairment
loss if any (see Note 10). The Company has completed the required impairment
tests and determined that goodwill was not impaired.

Deferred Offering Costs

Through June 30, 2004, the Company incurred approximately $1.4 million of costs
in connection with a proposed public offering of its common stock. These costs
are included in "Other Assets" on the Company's balance sheet. In August 2004,
the Company announced that it had postponed its proposed public offering due to
market conditions. If the proposed offering were to be permanently abandoned,
the costs incurred would be charged to expense in the period the decision is
made. If the proposed offering is successful, the contribution to shareholders'
equity will be reduced by these costs.

Debt Issuance Costs

Debt issuance costs are amortized using the effective yield method over the
remaining term of the related debt (see Note 5).

Store and Regional Expenses

The direct costs incurred in operating the Company's stores have been classified
as store expenses. Store expenses include salaries and benefits of store and
regional employees, rent and other occupancy costs, depreciation of property and
equipment, bank charges, armored carrier services, returned checks, net and cash
shortages, advertising, telephone and telecommunication and other costs incurred
by the stores. Excluded from store operations are the corporate expenses of the
Company, which include salaries and benefits of corporate employees,
professional fees and travel costs.

Company Funded Consumer Loan Loss Reserves Policy

The Company maintains a loan loss reserve for anticipated losses for loans it
makes directly through some of its company-operated locations. To estimate the
appropriate level of loan loss reserves, the Company considers the amount of

45

outstanding loans owed to it, historical loans charged off, current collection
patterns and current economic trends. The Company's current loan loss reserve is
based on its net charge-offs, expressed as a percentage of loans originated for
the last twelve months applied against the total amount of outstanding loans
that it makes directly. As these conditions change, the Company may need to make
additional provisions in future periods.

When a loan is originated, the customer receives the cash proceeds in exchange
for a post-dated check or a written authorization to initiate a charge to the
customer's bank account on the stated maturity date of the loan. If the check or
the debit to the customer's account is returned from the bank unpaid, the
Company immediately records a charge-off against the consumer loan loss reserve
for the entire amount of the unpaid item. A recovery is credited to the reserve
during the period in which the recovery is made. Each month, the Company
replenishes the reserve in an amount equal to the net losses charged to the
reserve in that month. This replenishment, as well as any additional provisions
to the loan loss reserve as a result of the calculations in the preceding
paragraph, is charged against revenues.

Check Cashing Returned Item Policy

The Company charges operating expense for losses on returned checks during the
period in which such checks are returned. Recoveries on returned checks are
credited to operating expense in the period during which recovery is made. This
direct method for recording returned check losses and recoveries eliminates the
need for an allowance for returned checks. The net expense for bad checks
included in returned checks, net and cash shortages in the accompanying
consolidated statements of operations was $7,062,000, $6,738,000 and $7,662,000
for the years ended June 30, 2002, 2003 and 2004, respectively.


Income Taxes

The Company uses the liability method to account for income taxes. Accordingly,
deferred income taxes have been determined by applying current tax rates to
temporary differences between the amount of assets and liabilities determined
for income tax and financial reporting purposes.

The Company intends to reinvest its foreign earnings and as a result the Company
has not provided a deferred tax liability on foreign earnings.

Employees' Retirement Plan

Retirement benefits are provided to substantially all full-time employees who
have completed 1,000 hours of service through a defined contribution retirement
plan. The Company will match 50% of each employee's contribution, up to 8% of
the employee's compensation. In addition, a discretionary contribution may be
made if the Company meets its financial objectives. The amount of contributions
charged to expense was $614,000, $775,000 and $720,000 for the years ended June
30, 2002, 2003 and 2004, respectively.


Advertising Costs

The Company expenses advertising costs as incurred. Advertising costs charged to
expense were $5,844,000, $6,922,000 and $7,406,000 for the years ended June 30,
2002, 2003 and 2004, respectively.

Fair Value of Financial Instruments

The carrying values of the revolving credit facilities approximate fair values,
as these obligations carry a variable interest rate. The fair value of the
Company's 16% Senior Notes, 13.95% Senior Subordinated Notes and OPCO's Senior
Notes are based on quoted market prices (see note 5). The Company's other
financial instruments consist of cash and cash equivalents, loan and other
consumer lending receivables, which are short-term in nature and their fair
value approximates their carrying value.


46

DOLLAR FINANCIAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

2. Significant Accounting Policies (continued)


Operations in the United Kingdom and Canada have exposed us to shifts in
currency valuations. From time to time, the Company may elect to purchase put
options in order to protect earnings in the United Kingdom and Canada against
foreign currency fluctuations. Out of the money put options may be purchased
because they cost less than completely averting risk, and the maximum downside
is limited to the difference between the strike price and exchange rate at the
date of purchase and the price of the contracts. At June 30, 2004, the Company
held put options with an aggregate notional value of $(CAN) 44.0 million and
(pound)(GBP) 7.7 million to protect the currency exposure in Canada and the
United Kingdom throughout fiscal year 2005. The Company uses purchased options
designated as cash flow hedges to protect against the foreign currency exchange
rate risks inherent in its forecasted earnings denominated in currencies other
than the U.S. dollar. The Company's cash flow hedges have a duration of less
than twelve months. For derivative instruments that are designated and qualify
as cash flow hedges, the effective portions of the gain or loss on the
derivative instrument are initially recorded in accumulated other comprehensive
income as a separate component of shareholders" equity and subsequently
reclassified into earnings in the period during which the hedged transaction is
recognized in earnings. The ineffective portion of the gain or loss is reported
in corporate expenses on the statement of operations. For options designated as
hedges, hedge effectiveness is measured by comparing the cumulative change in
the hedge contract with the cumulative change in the hedged item, both of which
are based on forward rates. As of June 30, 2004 no amounts were excluded from
the assessment of hedge effectiveness. There was no ineffectiveness in the
Company's cash flow hedges for the year ended June 30, 2004. The fair market
value at June 30, 2004 was $561,000 and is included in other assets on the
balance sheet.

Foreign Currency Translation and Transactions

The Company operates check cashing and financial services outlets in Canada and
the United Kingdom. The financial statements of these foreign businesses have
been translated into U.S. dollars in accordance with U.S. generally accepted
accounting principles. All balance sheet accounts are translated at the current
exchange rate and income statement items are translated at the average exchange
rate for the period; resulting translation adjustments are made directly to a
separate component of shareholders' equity. Gains or losses resulting from
foreign currency transactions are included in corporate expenses.









47

DOLLAR FINANCIAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

2. Significant Accounting Policies (continued)


Franchise Fees and Royalties

The Company recognizes initial franchise fees upon fulfillment of all
significant obligations to the franchisee. Royalties from franchisees are
accrued as earned. The standard franchise agreements grant to the franchisee the
right to develop and operate a store and use the associated trade names,
trademarks, and service marks within the standards and guidelines established by
the Company. As part of the franchise agreement, the Company provides certain
pre-opening assistance including site selection and evaluation, design plans,
operating manuals, software and training. After the franchised location has
opened, the Company must also provide updates to the software, samples of
certain advertising and promotional materials and other post-opening assistance
that the Company determines is necessary. Initial franchise fees included in
revenues were $59,000, $283,000 and $389,000 for the years ended June 30, 2002,
2003 and 2004, respectively. Total franchise revenues were $5.2 million, $6.3
million and $7.5 million for the years ended June 30, 2002, 2003 and 2004,
respectively.

Stock Based Compensation Plan

At June 30, 2004, the Company offered a stock option plan, under which shares of
common stock may be awarded to employees or consultants of OPCO. The Company has
elected to follow Accounting Principles Board Opinion No. 25, "Accounting for
Stock Issued to Employees" (APB 25) and related interpretations in accounting
for its employee stock options. Under APB 25, because the exercise price of the
Company's employee stock options equals the estimated market price of the
underlying stock on the date of grant, no compensation expense is recognized.

The following table reconciles the required disclosure under SFAS No. 148, which
summarizes the amount of stock-based compensation expense, net of related tax
effects, which would be included in the determination of net income if the
expense recognition provisions of SFAS No. 123 had been applied to all stock
option awards in all years presented (in thousands, except per share data):



Year ended June 30,

----------------------------------------------------
2002 2003 2004
----------------------------------------------------
Net loss, as reported.................... $ (3,392) $ (8,594) $ (28,033)
Total stock-option expense determined
under the fair value based method,
net of related tax benefits.......... 406 230 351
----------------------------------------------------
Pro forma net loss....................... $ (3,798) $ (8,824) $ (28,384)
====================================================


In determining the pro forma stock compensation expense, the fair value of each
option grant is estimated on the date of grant using the Black-Scholes option
pricing model with the following weighted-average assumptions used for grants in
fiscal 2004 and 2001, respectively: expected volatility of 46% and 46%; expected
lives of 6.0 and 6.0 years; risk-free interest rate of 4.35% and 5.02%; fair
market value at date of grant of $2,800.51 and $3,704.90 per share; and no
expected dividends.

3. Stock Option Plan

The Company's 1999 Stock Incentive Plan (the "Plan") states that 1,413.32 shares
of its common stock may be awarded to employees or consultants of the Company.
The awards, at the discretion of the Company's Board of Directors, may be issued
as nonqualified stock options or incentive stock options. Stock appreciation
rights ("SARs") may also be granted in tandem with the nonqualified stock
options or the incentive stock options. Exercise of the SARs cancels the option
for an equal number of shares and exercise of the nonqualified stock options or
incentive stock options cancels the SARs for an equal number of shares. The
number of shares issued under the Plan is subject to adjustment as specified in
the Plan provisions. No options may be granted after February 15, 2009. The

48

DOLLAR FINANCIAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

3. Stock Option Plan (continued)


options are exercisable in 20% increments annually on the first, second, third,
fourth and fifth anniversary of the grant date and have a term of ten years from
the date of issuance.

During the year ended June 30, 2004, 544 nonqualified stock options were granted
under the Plan at an exercise price of $5,600, the estimated fair market value
of the common stock on the date of grant. The options are exercisable in 20%
increments annually on the first, second, third, fourth and fifth anniversary of
the grant date and have a term of ten years from the date of issuance.

The following table presents information on stock options:



Shares Price Per Share
Options outstanding at June 30, 2001
(416.83 shares exercisable) ................................ 1,152 $3,225/$7,250
Granted ............................................... - -
Exercised ............................................. - -
Forfeited ............................................. (46) $3,225/$7,250
---------------
Options outstanding at June 30, 2002
(652.03 shares exercisable) ................................ 1,106 $3,225/$7,250
Granted ............................................... - -
Exercised ............................................. - -
Forfeited ............................................. (134) $3,225/$7,250
---------------
Options outstanding at June 30, 2003
(784.03 shares exercisable) ................................ 972 $3,225/$7,250
Granted................................................ 544 $5,600
Exercised.............................................. - -
Forfeited.............................................. (108) $3,225/$7,250
---------------
Options outstanding at June 30, 2004
(840 shares exercisable).................................... 1,408 $3,225/$5,600/$7,250
===============



The following table presents information on stock options by exercise price:


Options Outstanding Options Exercisable

------------------------------------------------- -------------------------
Number Weighted Average Number
Exercise Outstanding at Remaining Contractual Exercisable at
Price June 30, 2004 Life (Years) June 30, 2004
------------------ -------------------- ------------------------- -------------------------
$ 3,225 804 4.6 804
$ 5,600 544 9.5 -
$ 7,250 60 6.4 36
-------------------- ------------------------- -------------------------
1,408 6.6 840
==================== ========================= =========================



49

DOLLAR FINANCIAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)


4. Property and Equipment

Property and equipment at June 30, 2003 and 2004 consist of (in thousands):


June 30,

---------------------------------------
2003 2004
------------------ -----------------
Land $ 157 $ 172
Leasehold improvements................................ 20,871 24,982
Equipment and furniture............................... 47,490 52,351
------------------ -----------------
68,518 77,505
Less accumulated depreciation......................... 39,309 49,540
------------------ -----------------
Total property and equipment.......................... $ 29,209 $ 27,965
================== =================

Depreciation expense amounted to $8,835,000, $9,006,000 and $9,738,000 for
the years ended June 30, 2002, 2003 and 2004, respectively.




50

DOLLAR FINANCIAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

5. Debt

The Company had debt obligations at June 30, 2003 and 2004 as follows (in
thousands):


June 30,

---------------------------
2003 2004
---------------------------
Revolving credit facility; interest at one-day Eurodollar, as defined, plus
4.00% at June 30, 2003 of the outstanding daily balances payable monthly;
weighted average interest rate of 5.36% for the year ended June
30, 2003 (facility terminated November 2003, see refinancing discussion). $ 60,764 $ -
United Kingdom overdraft facility; interest at the bank base rate, as
defined, plus 1.00% at June 30, 2003, 4.75% at June 30, 2003 of the
outstanding daily balances payable quarterly; weighted average interest
rate of 4.90% for the year ended June 30, 2003........................... 935 -
OPCO 9.75% Senior Notes due November 15, 2011; interest payable
semi-annually on May 15 and November 15 ................................. - 241,176
16% Senior Notes due May 15, 2012; interest payable semi-annually in
arrears May 15 and November 15........................................... - 42,070
13.95% Senior Subordinated Notes due May 15, 2012; interest payable
semi-annually in arrears May 15 and November 15.......................... - 41,652
13% Senior Discount Notes due December 18, 2006; interest payable
semi-annually in arrears June 30 and December 30, commencing June 30,
2004..................................................................... 112,644 -
Other collateralized borrowings; interest rate of 15.6% subject to loss
rates on the related UK loans pledged.................................... 8,000 -
10.875% Senior Notes due November 15, 2006; interest payable semiannually
on May 15 and November 15................................................ 109,190 -
10.875% Senior Subordinated Notes due December 31, 2006; interest payable
semiannually on June 30 and December 30.................................. 20,000 -
Other....................................................................... 81 105
---------------------------
$ $311,614 $ 325,003
===========================



Prior to November 13, 2003, OPCO had $109.2 million of 10.875% Senior Notes due
2006 (the "Old OPCO Senior Notes"), which were registered under the Securities
Act of 1933, as amended. The payment obligations under the Old OPCO Notes were
jointly and severally guaranteed, on a full and unconditional basis, by each of
OPCO's existing subsidiaries. There were no restrictions on OPCO's and the
guarantor subsidiaries' ability to obtain funds from their subsidiaries by
dividend or by loan. Also, OPCO had $20 million aggregate principal amount of
its 10.875% Senior Subordinated Notes due 2006 (the "Old OPCO Senior
Subordinated Notes") outstanding.

The Company entered into an agreement dated December 18, 1998 pursuant to which
the Company issued $120.6 million aggregate principal amount of 13% Senior
Discount Notes ("Old Senior Discount Notes") from which the Company received
$64.0 million in gross cash proceeds. The $56.6 million discount was accreted by
the effective interest method through the period ending December 18, 2003. The
fully accreted Senior Discount Notes accrued interest payable semi-annually in
arrears. The parties to the agreement have negotiated an exchange agreement that
took effect on November 13, 2003.


51

DOLLAR FINANCIAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

5. Debt (continued)


On May 6, 2004, OPCO consummated an offering of $20.0 million principal amount
of 9.75% Senior Notes due 2011. The notes were offered as additional debt
securities under the indenture pursuant to which OPCO had issued $220.0 million
of notes in November 2003 (the "New Notes Indenture"). The notes issued in
November 2003 and the notes issued in May 2004 constitute a single class of
securities under the New Notes Indenture. The net proceeds from the May 2004
note offering were distributed to the Company to redeem approximately $9.1
million aggregate principal amount of its 16.0% senior notes due 2012 and
approximately $9.1 million aggregate principal amount of its 13.95% senior
subordinated notes due 2012.

The New Credit Facility consists of a $55.0 million senior secured reducing
revolving credit facility. The commitment under the New Credit Facility was
reduced by $750,000 on January 2, 2004 and on the first business day of each
calendar quarter thereafter, and is subject to additional reductions based on
excess cash flow up to a maximum reduction, including quarterly reductions, of
$15.0 million. The commitment may be subject to further reductions in the event
OPCO engages in certain issuances of securities or asset disposals. Under the
New Credit Facility, up to $20.0 million may be used in connection with letters
of credit. Amounts outstanding under the New Credit Facility bear interest at
either (i) the higher of (a) the federal funds rate plus 0.50% per annum or (b)
the rate publicly announced by Wells Fargo, San Francisco, as its "prime rate,"
plus 3.25% at June 30, 2004, (ii) the LIBOR Rate (as defined therein) plus 4.50%
at June 30, 2004, or (iii) the one day Eurodollar Rate (as defined therein) plus
4.50% at June 30, 2004, determined at OPCO's option. At June 30, 2004, OPCO's
borrowing capacity was $40.5 million and there was none outstanding.

Interest on the Replacement Senior Notes and Replacement Senior Subordinated
Notes will be payable semi-annually in arrears. On any semi-annual interest
payment date on or prior to November 15, 2008, the Company has the option to pay
all or any portion of the interest payable on the relevant interest payment date
by increasing the principal amount of the Replacement Senior Notes or
Replacement Senior Subordinated Notes, as applicable, in a principal amount
equal to the interest that the Company chooses not to pay in cash. On any
semi-annual payment date on or after May 15, 2009, all interest due on the
Replacement Senior Notes and the Replacement Senior Subordinated Notes is
payable in cash semi-annually, in arrears.

The Replacement Senior Notes and the Replacement Senior Subordinated Notes are
redeemable, in whole or in part, at the Company's option, at any time.

The Replacement Senior Notes will be redeemable at the following redemption
prices if redeemed during the indicated calendar year (or on any earlier date,
in the case of 2004), expressed as percentages of the principal amount, plus
accrued interest, if any, to the date of redemption:

Year Percentage
2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . 112.5%
2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . 110.0%
2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . 107.5%
2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . 105.0%
2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . 102.5%
2009 and thereafter. . . . . . . . . . . . . . . . . . . . 100.0%



52

DOLLAR FINANCIAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

5. Debt (continued)

The Replacement Senior Subordinated Notes will be redeemable at the following
redemption prices if redeemed during the indicated calendar year (or on any
earlier date, in the case of 2005), expressed as percentages of the principal
amount, plus accrued interest, if any, to the date of redemption:

Year Percentage
2005 or prior . . . . . . . . . . . . . . . . . . . . . . 100.0%
2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . 112.5%
2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . 110.0%
2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . 107.5%
2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . 105.0%
2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . 102.5%
2011 and thereafter . . . . . . . . . . . . . . . . . . . 100.0%

The 9.75% Senior Notes are redeemable, in whole or in part, at OPCO's option, at
any time on or after November 15, 2007. If redeemed during the twelve month
period commencing November 15 of the years indicated below, the 9.75% Senior
Notes will be redeemable at the following redemption prices, expressed as
percentages of the principal amount, plus accrued and unpaid interest and
liquidated damages, if any, to the date of redemption:

Year Percentage
2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . 104.875%
2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . 102.438%
2009 and thereafter . . . . . . . . . . . . . . . . . . . 100.000%

Prior to November 15, 2006, OPCO may redeem up to 35% of the aggregate principal
amount of the 9.75% Senior Notes with the net proceeds of certain equity
issuances at a redemption price equal to 109.75% of the principal amount
thereof, plus accrued an unpaid interest and liquidated damages, if any, to the
date of redemption.

The 9.75% Senior Notes, the New Credit Facility, the Replacement Senior Notes
and the Replacement Senior Subordinated Notes contain certain financial and
other restrictive covenants, which, among other things, require the Company to
achieve certain financial ratios, limit capital expenditures, restrict payment
of dividends and require certain approvals in the event the Company wants to
increase the borrowings. At June 30, 2004, the Company is in compliance with all
covenants.

The Company established a Canadian dollar overdraft credit facility to fund peak
working capital needs for its Canadian operations. The overdraft credit
facility, which has no stated maturity date, provides for a commitment of up to
approximately $10.0 million of which $0.0 million and $0.0 million were
outstanding as of June 30, 2003 and 2004, respectively. Amounts outstanding
under the facility bear interest at Canadian prime and are secured by $10.0
million letter of credit issued by Wells Fargo Bank under the New Credit
Facility.

Prior to March 31, 2004, the Company's United Kingdom operations also had a
British pound overdraft facility that bore interest at 1.00% for the year ended
June 30, 2003 over the LIBOR Rate and which provided for a commitment of
approximately $6.2 million. The overdraft facility was secured by a $6.0 million
letter of credit issued by Wells Fargo Bank under the New Credit Facility. This
overdraft facility expired on March 31, 2004.

The total fair market value of the Old OPCO Senior Notes and the Old OPCO Senior
Subordinated Notes at June 30, 2003 was approximately $122.7 million based on
quoted market prices.

The total fair market value of the New OPCO Senior Notes due 2011 at June 30,
2004 was approximately $250.8 million.

Interest of $17,472,000, $18,432,000 and $21,485,000 was paid for the years
ended June 30, 2002, 2003 and 2004, respectively.

53

DOLLAR FINANCIAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

6. Income Taxes

The provision for income taxes for the years ended June 30, 2002, 2003 and 2004
consists of the following (in thousands):

Year ended June 30,

--------------------------------------------------
2002 2003 2004
--------------------------------------------------
Federal:
Current......................... $ 260 $ (224) $ -
Deferred........................ (3,788) (3,938) 14,413
--------------------------------------------------
(3,528) (4,162) 14,413

Foreign taxes:
Current......................... 9,550 13,088 15,232
Deferred........................ (74) - -
--------------------------------------------------
9,476 13,088 15,232

State:
Current......................... 373 181 -
Deferred........................ (322) (372) 1,197
--------------------------------------------------
51 (191) 1,197
--------------------------------------------------
$ 5,999 $ 8,735 $ 30,842
==================================================



The significant components of the Company's deferred tax assets and liabilities
at June 30, 2003 and 2004 are as follows (in thousands):


June 30,

----------------------------------
2003 2004
----------------------------------
Deferred tax assets:
Loss reserves....................................... $ 834 $ 1,219
Foreign withholding taxes........................... 21 6
Depreciation........................................ 2,547 2,051
Accrued compensation................................ 573 1,130
Reserve for store closings.......................... 560 215
Foreign tax credits................................. 230 -
Other accrued expenses.............................. 405 268
Accrued interest.................................... 16,448 5,327
Net operating loss.................................. - 15,201
Other............................................... 14 85
----------------------------------
Gross deferred tax assets 21,632 25,502
Valuation allowance.................................... - (24,474)


Deferred tax liabilities:
Amortization and other temporary differences........ 6,022 1,028
----------------------------------
Net deferred tax asset................................. $ 15,610 $ -
==================================


54

DOLLAR FINANCIAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

6. Income Taxes (continued)

A reconciliation of the provision for income taxes with amounts determined by
applying the federal statutory tax rate to income (loss) before income taxes is
as follows (in thousands):


Year ended June 30,

------------------------------------------
2002 2003 2004
------------------------------------------
Tax provision at federal statutory rate............... $ 912 $ 49 $ 964
Add (deduct):
State tax provision, net of federal tax benefit... 34 (134) -
Foreign taxes..................................... 1,673 2,419 1,122
US tax on foreign earnings........................ 2,370 5,162 2,349
Canadian restructuring............................ - - 5,143
High Yield Debt Interest.......................... 835 950 397
Other permanent differences....................... 175 289 452
Valuation allowance............................... - - 20,415
------------------------------------------
Tax provision at effective tax rate................... $ 5,999 $ 8,735 $ 30,842
==========================================



Due to the refinancing of the Company's debt, significant deferred tax assets
have been generated. The Company provided a valuation allowance against all of
its deferred taxes at June 30, 2004 which amounted to $24.5 million. Because
realization is not assured, the Company has not recorded the benefit of the
deferred tax assets. As of June 30, 2004, the Company has approximately $43.1
million of federal and state net operating and loss carry forwards available to
offset future taxable income. The federal and state net operating loss carry
forwards will begin to expire in 2023, if not utilized.

After the refinancing of its debt, the Company elected not to include Canadian
income in its taxable income for US tax return filing purposes. As a result of
this election the Company provided a $3.9 million valuation allowance and
reversed any related deferred taxes.

Foreign, federal and state income taxes of approximately $16,035,000,
$14,548,000 and $13,858,000 were paid during the years ended June 30, 2002, 2003
and 2004, respectively.



55

DOLLAR FINANCIAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

7. Losses on Store Closings and Sales and Other Restructuring

For the fiscal year ended June 30, 2003, the Company closed 27 underperforming
stores and consolidated and relocated certain non-operating functions to reduce
costs and increase efficiencies. Costs incurred with the restructuring are
comprised of severance and other retention benefits to employees who were
involuntarily terminated and store closure costs related to the locations the
Company will no longer utilize. During the fiscal year ended June 30, 2003, the
Company recorded costs for severance and other retention benefits of $1.7
million and store closure costs of $1.6 million consisting primarily of lease
obligations and leasehold improvement write-offs. These charges were expensed
within "Losses on store closings and sales and other restructuring" on the
Consolidated Statements of Operations. The restructuring was completed by the
fiscal year end. All of the locations that were closed and for which the
workforce was reduced are included in the United States geographic segment. The
Company, as required, adopted Financial Accounting Standards Board Statement No.
146, Accounting for Costs Associated with Disposal or Exit Activities, on
January 1, 2003.

Following is a reconciliation of the beginning and ending balances of the
restructuring liability (in millions):



Severance and
Other Store Closure
Retention Benefits Costs Total

Balance at June 30, 2002................ $ - $ - $ -
Charge recorded in earnings............. 1.7 1.6 3.3
Amounts paid............................ (0.5) (0.8) (1.3)
Non-cash charges........................ - (0.6) (0.6)
--------------------------------------------------------
Balance at June 30, 2003................ 1.2 0.2 1.4
Reclassification ....................... (0.7) 0.7 -
Amounts paid............................ (0.5) (0.5) (1.0)
--------------------------------------------------------
Balance at June 30, 2004................ $ - $ 0.4 $ 0.4
========================================================


The Company also expenses costs related to the closure of stores in the normal
course of its business. Costs directly expensed for the years ended June 30,
2002, 2003 and 2004 were $1,435,000, $722,000 and $361,000, respectively.

8. Loss on Extinguishment of Debt

On November 13, 2003, OPCO issued $220.0 million principal amount of 9.75%
senior notes due 2011. The proceeds from this offering were used to redeem all
of its outstanding 10.875% senior notes and its outstanding 10.875% senior
subordinated notes, to refinance our credit facility, to distribute a portion of
the proceeds to us to redeem an equal amount of our parent's senior discount
notes and to pay fees and expenses with respect to these transactions and a
related note exchange transaction involving our senior discount notes. On May 6,
2004, OPCO consummated an offering of $20.0 million principal amount of 9.75%
Senior Notes due 2011. The notes were offered as additional debt securities
under the indenture pursuant to which OPCO had issued $220.0 million of notes in
November 2003. The notes issued in November 2003 and the notes issued in May
2004 constitute a single class of securities. The net proceeds from the May 2004
note offering were distributed to the Company to redeem approximately $9.1
million aggregate principal amount of its 16.0% senior notes due 2012 and
approximately $9.1 million aggregate principal amount of its 13.95% senior
subordinated notes due 2012.


56

DOLLAR FINANCIAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

8. Loss on Extinguishment of Debt (continued)

On June 30, 2004, the Company terminated an agreement under which it sold a
participation interest in a portion of the short-term consumer loans originated
by the Company in the United Kingdom to a third party. Associated with the
termination of this agreement the Company paid $276,660 representing a
prepayment penalty.

The loss incurred on the extinguishment of debt is as follows (in millions):



Call Premium
16.0% Senior Notes...................................................... $ 1.23
13.95% Senior Subordinated Notes........................................ -
Dollar Financial Group, Inc. 10.875% Senior Notes....................... 1.98
Dollar Financial Group, Inc.10.875% Senior Subordinated Notes........... 0.73
Write-off of previously capitalized deferred issuance costs, net............. 6.14
Prepayment penalty on the extinguishment of collateralized borrowings........ 0.28
----------
Loss on extinguishment of debt............................................... $10.36
==========


9. Commitments

The Company occupies office and retail space and uses certain equipment under
operating lease agreements. Rent expense amounted to $15,265,000, $16,067,000
and $16,881,000 for the years ended June 30, 2002, 2003 and 2004, respectively.
Most leases contain standard renewal clauses.

Minimum obligations under noncancelable operating leases for the year ended June
30 are as follows (in thousands):


Year Amount
---------------

2005............................. $ 17,143
2006............................. 13,458
2007............................. 10,364
2008............................. 7,640
2009............................. 5,556
Thereafter....................... 7,301
---------------
$ 61,462
===============


10. Goodwill and Other Intangibles

In accordance with the provisions of SFAS No. 142, the Company is required to
perform goodwill impairment tests on at least an annual basis. There can be no
assurance that future goodwill impairment tests will not result in a charge to
earnings. During fiscal 2003, the Company paid $2.0 million in additional
consideration based upon a future results of operations earn-out agreement
related to one of its United Kingdom acquisitions. This amount has been included
as goodwill on the Consolidated Balance Sheet. The Company has covenants not to
compete, which are deemed to have a definite life and will continue to be
amortized. Amortization for these intangibles for the years ended June 30, 2004,
2003 and 2002 was $95,000, $173,000 and $225,000, respectively. The estimated
aggregate amortization expense for each of the five succeeding fiscal years
ending June 30, is:

Fiscal year ending June 30, Amount
-----------------------------------------------------------------
(in thousands)
2005............................................ $ 19.2




57

DOLLAR FINANCIAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

10. Goodwill and Other Intangibles (continued)

The following table reflects the components of intangible assets (in thousands):


June 30, 2003 June 30, 2004

--------------------------------- -----------------------------------
Gross Carrying Accumulated Gross Carrying Accumulated
Amount Amortization Amount Amortization
--------------------------------- -----------------------------------
Non-amortized intangible assets:
Cost in excess of net assets acquired $ 162,987 $ 19,686 $ 169,115 $ 20,906

Amortized intangible assets:
Covenants not to compete 2,446 2,331 2,452 2,433


The changes in the carrying amount of goodwill and other intangibles by
reportable segment for the fiscal years ended June 30, 2003 and 2004 are as
follows:


United United
States Canada Kingdom Total
------------------------------------------------------------
Balance at June 30, 2002 $ 56,544 $ 33,986 $ 41,734 $ 132,264
Amortization of other intangibles.......... (173) - - (173)
Acquisitions................................ - - 3,251 3,251
Foreign currency translation adjustments.... - 4,103 3,428 7,531
Reclassification(1)......................... 238 305 - 543
------------------------------------------------------------
Balance at June 30, 2003 56,609 38,394 48,413 143,416
Amortization of other intangibles.......... (95) - - (95)
Acquisition................................. - - 550 550
Foreign currency translation adjustments.... - 427 3,714 4,141
Reclassification(1)......................... - - 216 216
------------------------------------------------------------
Balance at June 30, 2004 $ 56,514 $ 38,821 $ 52,893 $ 148,228
============================================================


(1) Items represent brokers fees and other professional fees initially recorded
to accounts receivable when paid as part of the original post-acquisition
closing adjustments. The reclassification was made when it was determined
that payment for these items had been the responsibility of the purchaser.

11. Contingent Liabilities

The Company is a defendant in four putative class-action lawsuits, all of which
were commenced by the same plaintiffs' law firm, alleging violations of
California's wage-and-hour laws. The named plaintiffs in these suits, which are
pending in the Superior Court of the State of California, are the Company's
former employees Vernell Woods (commenced August 22, 2000), Juan Castillo
(commenced May 1, 2003), Stanley Chin (commenced May 7, 2003) and Kenneth
Williams (commenced June 3, 2003). Each of these suits seeks an unspecified
amount of damages and other relief in connection with allegations that the
Company misclassified California store (Woods) and regional (Castillo) managers
as "exempt" from a state law requiring the payment of overtime compensation,
that the Company failed to provide employees with meal and rest breaks required
under a new state law (Chin) and that the Company computed bonuses payable to
their store managers using an impermissible profit-sharing formula (Williams).
In January 2003, without admitting liability, the Company sought to settle the
Woods case, which they believe to be the most significant of these suits, by
offering each individual putative class member an amount intended in good faith
to settle his or her claim. Approximately 92% of these settlement offers have
been accepted. Plaintiff's' counsel is presently disputing through arbitration
the validity of the settlements accepted by the individual putative class
members. The Company believes it has meritorious defenses to the challenge and
to the claims of the non-settling putative Woods class members and plan to
defend them vigorously. The Company believes it has adequately provided for the

58

DOLLAR FINANCIAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

11. Contingent Liabilities (continued)

costs associated with this matter. The Company is vigorously defending the
Castillo, Chin and Williams lawsuits; and believes it has meritorious defense to
the claims asserted in those matters. The Company believes the outcome of such
litigation will not significantly affect its financial results.

On January 29, 2003, a former customer, Kurt MacKinnon, commenced an action
against the Company's Canadian subsidiary and 26 other Canadian lenders on
behalf of a purported class of British Columbia residents who, plaintiff claims,
were overcharged in payday-loan transactions. The action, which is pending in
the Supreme Court of British Columbia, alleges violations of laws proscribing
usury and unconscionable trade practices and seeks restitution and damages,
including punitive damages, in an unknown amount. On March 25, 2003, the Company
moved to stay the action as against it and to compel arbitration of plaintiff's
claims as required by his agreement with the Company. The court's decision
denying that motion is presently on appeal. The Company believes it has
meritorious defense to the action and intends to defend it vigorously. The
Company believes the outcome of such litigation will not significantly affect
its financial results.

On October 21, 2003, a former customer, Kenneth D. Mortillaro, commenced an
action against the Company's Canadian subsidiary on behalf of a purported class
of Canadian borrowers (except those residing in British Columbia and Quebec)
who, Mortillaro claims, were subjected to usurious charges in payday loan
transactions. The action, which is pending in the Ontario Superior Court of
Justice, alleges violations of a Canadian federal law proscribing usury and
seeks restitution and damages in an unspecified amount, including punitive
damages. On November 6, 2003, the Company learned of substantially similar
claims asserted on behalf of a purported class of Alberta borrowers by Gareth
Young, a former customer of the Company's Canadian subsidiary. The Young action
is pending in the Court of Queens Bench of Alberta and seeks an unspecified
amount of damages and other relief. On December 23, 2003, the Company was served
with the statement of claim in an action brought in the Ontario Superior Court
of Justice by another former customer, Margaret Smith. A similar action was also
filed in the Court of Queen's Bench of Manitoba on April 26, 2004 by Nicole
Blasko. The allegations and putative class in the Smith and Blasko actions are
substantially the same as those in the Mortillaro action. Like the plaintiff in
the MacKinnon action referred to above, Mortillaro, Young, Smith and Blasko have
agreed to arbitrate all disputes with the Company. The Company believes that it
has meritorious procedural and substantive defenses to the claims of each of
these plaintiffs and intends to defend those claims vigorously. The Company
believes the outcome of such litigation will not significantly affect its
financial results.

In addition to the litigation discussed above, the Company is involved in
routine litigation and administrative proceedings arising in the ordinary course
of business. In the Company's opinion, the outcome of such litigation and
proceedings will not significantly affect its financial results.

12. Credit Risk

At June 30, 2003 and 2004, OPCO had 19 and 11, respectively, bank accounts in
major U.S. financial institutions in the aggregate amount of $10,873,000 and
$4,640,000, respectively, which exceeded Federal Deposit Insurance Corporation
deposit protection limits. The Canadian Federal Banking system provides
customers with similar deposit insurance through the Canadian Deposit Insurance
Corporation ("CDIC"). At June 30, 2003 and 2004, the Company's Canadian
subsidiary had 13 bank accounts totaling $15,039,000 and $1,274,666,
respectively, which exceeded CDIC limits. At June 30, 2003 and 2004 the
Company's United Kingdom operations had 30 and 32 bank accounts, respectively,
totaling $6,085,000 and $11,698,000. These financial institutions have strong
credit ratings, and management believes credit risk relating to these deposits
is minimal.

Since June 13, 2002, the Company has acted as a servicer for County Bank of
Rehoboth Beach, Delaware and since October 18, 2002, for First Bank of Delaware.
On behalf of these banks, the Company markets unsecured short-term loans to
customers with established bank accounts and verifiable sources of income. Loans
are made for amounts up to $700, with terms of 7 to 23 days. Under these
programs, the Company earns servicing fees, which may be reduced if the related
loans are not collected. The Company maintains a reserve for estimated
reductions. In addition, the Company maintains a reserve for anticipated losses
for loans they make directly. In order to estimate the appropriate level of
these reserves, the Company considers the amount of outstanding loans owed to
them, as well as loans owed to banks and serviced by them, the historical loans
charged-off, current collection patterns and current economic trends. As these

59

DOLLAR FINANCIAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

12. Credit Risk (continued)

conditions change, additional provisions might be required in future periods.
During fiscal 2004, County Bank originated or extended approximately $136.2
million of loans through their locations and document transmitters. First Bank
originated or extended approximately $249.1 million of loans through the Company
during this period. County Bank originated or extended approximately $277.9
million of loans through the Company during fiscal 2003 and First Bank
originated or extended approximately $92.5 million of loans through the Company
for the same period.

The Company also originates unsecured short-term loans to customers on its own
behalf in Canada, the United Kingdom and certain U.S. markets. In the United
States, these loans are made for amounts up to $500, with terms of 7 to 37 days.
The Company bears the entire risk of loss related to these loans. In Canada,
loans are issued to qualified borrowers based on a percentage of the borrowers'
income with terms of 1 to 35 days. The Company issues loans in the United
Kingdom for up to (pound)600, with a term of 28 days. The Company originated or
extended approximately $491 million and $429 million of the loans through the
Company's locations and document transmitters during fiscal years ended June 30,
2004 and 2003, respectively. In addition, beginning in fiscal 2003 the Company
acted as a direct lender originating 1,402 longer-term installment loans with an
average principal amount of $793 and a weighted average term of approximately
365 days. In fiscal 2004, the Company originated 4,675 longer-term installment
loans with an average principal of amount $845 and a weighted average term of
approximately 365 days. The Company originated or extended installment loans
through its locations in the United Kingdom of approximately $1.1 million in
fiscal 2003 and $3.9 million in fiscal 2004 and introduced this product in
certain U.S. and Canadian markets late in fiscal 2004. On November 15, 2002, the
Company entered into an agreement with a third party to sell, without recourse,
subject to certain obligations, a participation interest in a portion of
short-term consumer loans originated by the Company in the United Kingdom. The
transfer of assets was treated as a financing under FAS 140 and is included in
Other Collateralized Borrowings on the balance sheet. The Agreement gave the
third party a first priority lien, charge, and security interest in the assets
pledged. The Agreement provided for collateralized borrowings up to $10.0
million against which $8.0 million of the loans receivable had been pledged at
June 30, 2003. Under the Agreement, the third party retained the right to reduce
the amount of borrowings to no less than $4.0 million. The Company paid an
annual interest rate of 15.6% on the amount borrowed, which was subject to loss
rates on the related loans. On June 30, 2004 the Company terminated the
agreement and paid $8.0 million to repurchase the participation interest,
$104,000 of accrued interest and $276,660 representing a prepayment penalty. In
connection with the repurchase of the participation interest, the liens on the
loans receivable were released.

The Company had approximately $29.1 million and $21.4 million of loans on its
balance sheet at June 30, 2004 and 2003, respectively, which is reflected in
loans receivable. Loans receivable, net at June 30, 2004 and 2003 are reported
net of a reserve of $2.3 million and $1.3 million, respectively, related to
consumer lending. Net charge-offs for company-originated loans, which are
charged against the allowance for loan losses for the fiscal years ended June
30, 2004, 2003 and 2002 were $9.0 million, $10.4 million and $5.6 million,
respectively. For the years ended June 30, 2004, 2003 and 2002, total consumer
lending revenue, net earned by the Company was $96.3 million, $81.6 million and
$69.8 million, respectively.


60

DOLLAR FINANCIAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

12. Credit Risk (continued)

Activity in the allowance for loan losses during the fiscal years ended 2002,
2003 and 2004 was as follows (in thousands):


Year ended June 30,

--------------------------------------------------
Allowance for Loan Losses 2002 2003 2004
--------------------------------------------------
(in thousands)

Balance at beginning of year........................ $ 228 $ 1,694 $ 1,344

Provision charged to expense........................ 1,448 - -
Provision charged to loan revenues.................. 5,554 9,967 9,928
Foreign currency translation........................ 18 75 15

Charge-offs......................................... (5,554) (10,392) (8,972)
--------------------------------------------------
Balance at end of year.............................. $ 1,694 $ 1,344 $ 2,315
==================================================









61

DOLLAR FINANCIAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

13. Geographic Segment Information

All operations for which geographic data is presented below are in one principal
industry (check cashing and ancillary services) (in thousands):



United United
2002 States Canada Kingdom Total
------------------------------------------------------------
Identifiable assets............................ $ 154,100 $ 82,860 $ 67,639 $ 304,599
Goodwill and other intangibles, net............ 56,544 33,986 41,734 132,264
Sales to unaffiliated customers:
Check cashing.............................. 53,597 30,344 20,851 104,792
Consumer lending:
Fees from consumer lending............. 70,669 16,280 10,763 97,712
Provision for loan losses and adjustment
to servicing revenue............... (23,622) (2,919) (1,372) (27,913)
------------------------------------------------------------
Consumer lending, net...................... 47,047 13,361 9,391 69,799
Money transfers............................ 4,613 4,363 1,122 10,098
Other...................................... 7,677 7,401 2,209 17,287
------------------------------------------------------------
Total sales to unaffiliated customers.......... 112,934 55,469 33,573 201,976
Establishment of reserves for new consumer
lending arrangements....................... 2,244 - - 2,244
Interest revenue............................... 427 83 3 513
Interest expense............................... 26,647 2,552 2,588 31,787
Depreciation and amortization.................. 5,330 1,874 2,027 9,231
Losses on store closings and sales and
other restructuring........................ 1,435 - - 1,435
(Loss) income before income taxes.............. (20,166) 17,672 5,101 2,607
Income tax (benefit) provision ................ (3,847) 8,105 1,741 5,999

2003
Identifiable assets............................ 148,266 88,240 77,105 313,611
Goodwill and other intangibles, net............ 56,609 38,394 48,413 143,416
Sales to unaffiliated customers:
Check cashing.............................. 49,147 33,301 25,987 108,435
Consumer lending:
Fees from consumer lending.............. 70,340 22,492 13,426 106,258
Provision for loan losses and adjustment
to servicing revenue.............. (19,368) (3,247) (2,129) (24,744)
------------------------------------------------------------
Consumer lending, net...................... 50,972 19,245 11,297 81,514
Money transfers............................ 4,675 5,143 1,834 11,652
Other...................................... 5,678 9,334 2,775 17,787
------------------------------------------------------------

Total sales to unaffiliated customers.......... 110,472 67,023 41,893 219,388
Interest revenue............................... 413 18 - 431
Interest expense............................... 32,480 (899) 3,470 35,051
Depreciation and amortization.................. 5,377 1,837 1,965 9,179
Losses on store closings and sales and
other restructuring........................ 3,987 - - 3,987
Litigation settlement costs.................... 2,750 - - 2,750
(Loss) income before income taxes ............. (34,189) 26,058 8,272 141
Income tax (benefit) provision................. (4,913) 10,944 2,704 8,735


62


DOLLAR FINANCIAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

13. Geographic Segment Information (continued)



United United
States Canada Kingdom Total
------------------------------------------------------------
2004
Identifiable assets............................ $ 134,571 $ 88,513 $ 95,363 $ 318,447
Goodwill and other intangibles, net............ 56,514 38,821 52,893 148,228
Sales to unaffiliated customers:
Check cashing.............................. 47,716 38,483 31,198 117,397
Consumer lending:
Fees from consumer lending.............. 71,577 31,479 17,751 120,807
Provision for loan losses and adjustment
to servicing revenue............... (17,504) (3,001) (3,984) (24,489)
------------------------------------------------------------
Consumer lending, net...................... 54,073 28,478 13,767 96,318
Money transfers............................ 4,525 5,795 2,732 13,052
Other...................................... 3,546 12,033 4,084 19,663
------------------------------------------------------------

Total sales to unaffiliated customers.......... 109,860 84,789 51,781 246,430
Interest revenue............................... 417 19 - 436
Interest expense............................... 33,664 2,511 4,384 40,559
Depreciation and amortization.................. 5,220 2,476 2,136 9,832
Losses on store closings and sales and
other restructuring........................ 324 16 21 361
Loss on extinguishment of debt................. 10,078 - 277 10,355
(Loss) income before income taxes.............. (36,493) 27,418 11,884 2,809
Income tax provision .......................... 17,787 10,111 2,944 30,842


14. Related Party Transactions

During fiscal 1999, certain members of management received loans aggregating
$2.9 million, of which $200,000 was repaid during the fiscal year ended June 30,
2001, which are secured by shares of the Company's stock. All but of one the
loans accrue interest at a rate of 6% per year and are due and payable in full
on December 18, 2004 and April 1, 2005. In addition, as part of an employment
agreement, the Chief Executive Officer was issued a loan in the amount of $4.3
million to purchase additional shares of the Company's stock. The loan accrues
interest at a rate of 6% per year and is due and payable in full on December 18,
2004. The loan is secured by a pledge of a portion of his shares of the
Company's stock.

Pursuant to the terms of an amended and restated Management Services Agreement
among Green Equity Investors II, L.P. (the "Purchaser"), the Company and OPCO,
the Company has agreed to pay the Purchaser an annual management fee equal to
$1.0 million along with reasonable and customary fees for financial advisory and
investment banking services in connection with major financial transactions that
the Company and OPCO may undertake in the future and reimbursement of any
out-of-pocket expenses incurred. The management fee paid/accrued to the
Purchaser for the fiscal years 2004, 2003 and 2002 was $1.0 million, $1.0
million and $1.0 million, respectively.

15. Subsidiary Guarantor Financial Information

OPCO's payment obligations under its 9.75% Senior Notes due 2011 are jointly and
severally guaranteed (such guarantees, the "Guarantees") on a full and
unconditional basis by the Company and by OPCO's existing and future domestic
subsidiaries (the "Guarantors"). Guarantees of the notes by Guarantors directly
owning, now or in the future, capital stock of foreign subsidiaries will be
secured by second priority liens on 65% of the capital stock of such foreign
subsidiaries. In the event OPCO directly owns a foreign subsidiary in the
future, the notes will be secured by a second priority lien on 65% of the
capital stock of any such foreign subsidiary (such capital stock of foreign
subsidiaries referenced in this paragraph collectively, the "Collateral"). The
non-guarantors consist of OPCO's foreign subsidiaries ("Non-guarantors").

63

DOLLAR FINANCIAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

15. Subsidiary Guarantor Financial Information (continued)

The Guarantees of the notes:

o rank equal in right of payment with all existing and future
unsubordinated indebtedness of the Guarantors;
o rank senior in right of payment to all existing and future subordinated
indebtedness of the Guarantors; and
o are effectively junior to any indebtedness of OPCO, including
indebtedness under the Company's senior secured reducing revolving
credit facility, that is either (1) secured by a lien on the Collateral
that is senior or prior to the second priority liens securing the
Guarantees of the notes or (2) secured by assets that are not part of
the Collateral to the extent of the value of the assets securing such
indebtedness.

Separate financial statements of each Guarantor that is a subsidiary of OPCO
have not been presented because they are not required by securities laws and
management has determined that they would not be material to investors. The
accompanying tables set forth the condensed consolidating balance sheets at June
30, 2004 and 2003 and the condensed consolidating statements of operations and
cash flows for the twelve months ended June 30, 2004, 2003 and 2002of OPCO, the
combined Guarantor subsidiaries, the combined Non-Guarantor subsidiaries and the
consolidated Company.



64

DOLLAR FINANCIAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

15. Consolidating Financial Statements (continued)

Consolidating Balance Sheets
June 30, 2004
(In thousands)



Dollar Financial
Dollar Group, Inc. and Subsidiary
Financial Subsidiary Non-
Corp. Guarantors Guarantors Eliminations Consolidated
------------------------------------------------------------------------------------
Assets
Cash and cash equivalents...................... $ 4 $ 27,124 $ 42,142 $ - $ 69,270
Loans receivable .............................. - 4,838 24,278 - 29,116
Less: Allowance for loan losses................ - 694 1,621 - 2,315
------------------------------------------------------------------------------------
Loans receivable, net.......................... - 4,144 22,657 - 26,801
Other consumer lending receivables............. - 7,404 - - 7,404
Other receivables.............................. - 1,711 2,360 (284) 3,787
Income taxes receivable........................ 2,955 - 6,117 (2,947) 6,125
Prepaid expenses............................... - 1,772 7,389 - 9,161
Deferred income taxes.......................... - - - - -
Notes and interest receivable--officers........ 1,431 3,623 - - 5,054
Due from affiliates............................ - 63,791 - (63,791) -
Due from parent................................ - 8,637 - (8,637) -
Property and equipment, net.................... - 10,957 17,008 - 27,965
Goodwill and other intangibles, net............ - 56,514 91,714 - 148,228
Debt issuance costs, net....................... 268 11,160 - - 11,428
Investment in subsidiaries..................... 38,017 255,084 6,705 (299,806) -
Other assets................................... 1,392 451 1,381 - 3,224
------------------------------------------------------------------------------------
$ 44,067 $ 452,372 $ 197,473 $ (375,465) $ 318,447
====================================================================================

Liabilities and shareholders' equity
Accounts payable............................... $ - $ 6,466 $ 8,507 $ - $ 14,973
Foreign income taxes payable................... - - 5,979 - 5,979
Income taxes payable........................... - 2,947 - (2,947) -
Accrued expenses and other liabilities......... 946 7,058 9,850 - 17,854
Accrued interest payable....................... 1,649 2,974 1,186 (284) 5,525
Deferred tax liability......................... - - - - -
Due to affiliates.............................. 8,637 - 63,791 (72,428) -
Term debt and subordinated notes payable....... - - - - -
9.75% Senior Notes due 2011.................... - 241,176 - - 241,176
16.0% Senior Notes due 2012.................... 42,070 - - - 42,070
13.95% Senior Subordinated Notes due 2012...... 41,652 - - - 41,652
Subordinated notes payable and other - 93 12 - 105
------------------------------------------------------------------------------------
94,954 260,714 89,325 (75,659) 369,334

Shareholders' (deficit) equity:
Common stock................................ - - - - -
Additional paid-in capital.................. 50,384 104,926 27,304 (121,133) 61,481
(Accumulated deficit) retained earnings..... (109,819) 81,996 71,767 (164,860) (120,916)
Accumulated other comprehensive income...... 13,813 4,736 9,077 (13,813) 13,813
Treasury stock.............................. (956) - - - (956)
Management equity loan...................... (4,309) - - - (4,309)
------------------------------------------------------------------------------------
Total shareholders' (deficit) equity........... (50,887) 191,658 108,148 (299,806) (50,887)
------------------------------------------------------------------------------------
$ 44,067 $ 452,372 $ 197,473 $ (375,465) $ 318,447
====================================================================================


65



DOLLAR FINANCIAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

15. Consolidating Financial Statements (continued)

Consolidating Statements of Operations
Year ended June 30, 2004
(In thousands)



Dollar Financial
Dollar Group, Inc. and Subsidiary
Financial Subsidiary Non-
Corp. Guarantors Guarantors Eliminations Consolidated
--------------------------------------------------------------------------------
Revenues:
Check cashing.............................. $ - $ 47,717 $ 69,680 $ - $ 117,397
Consumer lending, net:
Fees from consumer lending............... - 71,577 49,230 - 120,807
Provision for loan losses and adjustment
to servicing revenue................... - (17,505) (6,984) - (24,489)
--------------------------------------------------------------------------------
Consumer lending, net...................... - 54,072 42,246 - 96,318
Money transfer fees........................ - 4,525 8,527 - 13,052
Other ..................................... - 3,546 16,117 - 19,663
--------------------------------------------------------------------------------
Total revenues................................ - 109,860 136,570 - 246,430
Store and regional expenses:
Salaries and benefits...................... - 41,510 34,498 - 76,008
Occupancy.................................. - 10,988 8,817 - 19,805
Depreciation............................... - 3,458 3,088 - 6,546
Returned checks, net and cash shortages.... - 4,275 4,857 - 9,132
Telephone and telecommunication............ - 3,756 1,909 - 5,665
Advertising................................ - 3,778 3,165 - 6,943
Bank charges............................... - 2,140 1,604 - 3,744
Armored carrier services................... - 1,381 1,670 - 3,051
Other...................................... - 12,739 12,047 - 24,786
--------------------------------------------------------------------------------
Total store and regional expenses............. - 84,025 71,655 - 155,680

Corporate expenses............................ - 16,623 16,190 - 32,813
Management fees............................... 1,003 (709) 709 - 1,003
Losses on store closings and sales and other
restructuring.............................. - 325 36 - 361
Other depreciation and amortization........... - 1,762 1,524 - 3,286
Interest expense ............................. 14,820 18,428 6,875 - 40,123
Loss on extinguishment of debt................ 2,869 7,209 277 - 10,355
Equity in subsidiary.......................... (4,912) - - 4,912 -
--------------------------------------------------------------------------------
(Loss) income before income taxes ............ (13,780) (17,803) 39,304 (4,912) 2,809
Income tax provision ......................... 14,253 3,535 13,054 - 30,842
--------------------------------------------------------------------------------
Net (loss) income ........................... $ (28,033) $ (21,338) $ 26,250 $ (4,912) $ (28,033)
================================================================================



66

DOLLAR FINANCIAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

15. Consolidating Financial Statements (continued)

Consolidating Statements of Cash Flows
Year ended June 30, 2004
(In thousands)



Dollar Financial
Dollar Group, Inc. and Subsidiary
Financial Subsidiary Non-
Corp. Guarantors Guarantors Eliminations Consolidated
--------------------------------------------------------------------------
Cash flows from operating activities:
Net (loss) income........................................ $ (28,033) $ (21,338) $ 26,250 $ (4,912) $ (28,033)
Adjustments to reconcile net income to net cash
(used in) provided by operating activities:
Undistributed income of subsidiaries................. (4,912) - - 4,912 -
Accretion of interest expense from 13% Senior
Discount Notes..................................... 5,827 - - - 5,827
Depreciation and amortization........................ 143 6,774 4,796 - 11,713
Loss on extinguishment of debt....................... 2,869 7,209 277 - 10,355
Losses on store closings and sales and other
restructuring...................................... - 150 37 - 187
Foreign currency gain on revaluation of
collateralized borrowings.......................... - - (838) - (838)
Deferred tax provision (benefit)..................... 16,448 (838) - - 15,610
Changes in assets and liabilities (net of
effect of acquisitions):
Increase in loans and other receivables.......... (257) (965) (6,355) (40) (7,617)
Increase in income taxes receivable.............. (1,385) (18,486) (5,836) 22,521 (3,186)
(Increase) decrease in prepaid expenses and other (1,392) 352 (2,739) - (3,779)
Increase in accounts payable, income taxes
payable, accrued expenses and other
liabilities and accrued interest payable...... 8,523 22,528 9,394 (22,481) 17,964
--------------------------------------------------------------------------
Net cash (used in) provided by operating activities...... (2,169) (4,614) 24,986 - 18,203

Cash flows from investing activities:
Acquisitions, net of cash acquired....................... - - (550) - (550)
Gross proceeds from sale of fixed assets................. - - 81 - 81
Additions to property and equipment...................... - (1,971) (6,179) - (8,150)
Net increase in due from affiliates...................... - (31,416) - 31,416 -
--------------------------------------------------------------------------
Net cash used in investing activities.................... - (33,387) (6,648) 31,416 (8,619)

Cash flows from financing activities:
Redemption of 16.0% Senior Notes due 2012................ (10,283) - - - (10,283)
Redemption of 13.95% Senior Subordinated Notes due 2012.. (9,060) - - - (9,060)
Redemption of Subordinated Notes......................... - (20,734) - - (20,734)
Redemption of Senior Discount Notes...................... (22,962) - - - (22,962)
Redemption of collateralized borrowings.................. - - (8,277) - (8,277)
Other debt borrowings (payments)......................... - 93 (165) - (72)
Issuance of 9.75% Senior Notes due 2011.................. - 241,176 - - 241,176
Redemption of 10.875% Senior Notes due 2006.............. - (111,170) - - (111,170)
Net decrease in revolving credit facilities.............. - (60,764) (935) - (61,699)
Payment of debt issuance costs........................... (289) (10,929) - - (11,218)
Net increase (decrease) in due to affiliates and due from
parent............................................... 4,064 33,958 (6,606) (31,416) -
Dividend paid to parent.................................. 40,699 (40,699) - - -
--------------------------------------------------------------------------
Net cash provided by (used in) financing activities...... 2,169 30,931 (15,983) (31,416) (14,299)

Effect of exchange rate changes on cash and cash
equivalents.......................................... - - 2,176 - 2,176

Net (decrease) increase in cash and cash equivalents..... - (7,070) 4,531 - (2,539)
Cash and cash equivalents at beginning of year........... 4 34,194 37,611 - 71,809
--------------------------------------------------------------------------
Cash and cash equivalents at end of year................. $ 4 $ 27,124 $ 42,142 $ - $ 69,270
==========================================================================


67

DOLLAR FINANCIAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

15. Consolidating Financial Statements (continued)

Consolidating Balance Sheets
June 30, 2003
(In thousands)


Dollar Dollar Financial
Financial Group, Inc. and
Corp. Subsidiaries Eliminations Consolidated
-------------------------------------------------------------------

Assets
Cash and cash equivalents............................ $ 4 $ 71,805 $ - $ 71,809
Loans receivable:
Loans receivable.................................. - 13,444 - 13,444
Loans receivable pledged.......................... - 8,000 - 8,000
-------------------------------------------------------------------
Total loans receivable............................... - 21,444 - 21,444
Less: Allowance for loan losses..................... - 1,344 - 1,344
-------------------------------------------------------------------
Loans receivable, net................................ - 20,100 - 20,100
Other consumer lending receivables................... - 6,458 - 6,458
Other receivables.................................... - 4,500 - 4,500
Income taxes receivable.............................. 1,570 1,369 - 2,939
Prepaid expenses..................................... - 6,358 - 6,358
Deferred income taxes................................ 16,448 - (838) 15,610
Notes and interest receivable--officers.............. 1,174 3,468 - 4,642
Due from parent...................................... - 4,573 (4,573) -
Property and equipment, net.......................... - 29,209 - 29,209
Goodwill and other intangibles, net.................. - 143,416 - 143,416
Debt issuance costs, net............................. 1,537 5,200 - 6,737
Investment in subsidiaries........................... 67,688 - (67,688) -
Other................................................ - 1,833 - 1,833
-------------------------------------------------------------------
$ 88,421 $ 298,289 $ (73,099) $ 313,611
===================================================================


Liabilities and shareholders' equity
Accounts payable..................................... $ - $ 17,245 $ - $ 17,245
Foreign income taxes payable......................... - 1,380 - 1,380
Accrued expenses and other liabilities............... 174 10,512 - 10,686
Accrued interest payable............................. - 1,656 - 1,656
Deferred tax liability............................... - 838 (838) -
Due to affiliates.................................... 4,573 - (4,573) -
Other collateralized borrowings...................... - 8,000 - 8,000
Revolving credit facilities.......................... - 61,699 - 61,699
10 7/8% Senior Notes due 2006........................ - 109,190 - 109,190
Subordinated notes payable and other................. - 20,081 - 20,081
13% Senior Discount Notes due 2006................... 112,644 - - 112,644
-------------------------------------------------------------------
117,391 230,601 (5,411) 342,581

Shareholders' (deficit) equity:
Common stock...................................... - - - -
Additional paid-in capital........................ 50,384 50,957 (39,860) 61,481
(Accumulated deficit) retained earnings........... (81,786) 9,034 (20,131) (92,883)
Accumulated other comprehensive income............ 7,697 7,697 (7,697) 7,697
Treasury stock ................................... (956) - - (956)
Management equity loan............................ (4,309) - - (4,309)

-------------------------------------------------------------------
Total shareholders' (deficit) equity................. (28,970) 67,688 (67,688) (28,970)
-------------------------------------------------------------------
$ 88,421 $ 298,289 $ (73,099) $ 313,611
===================================================================


68

DOLLAR FINANCIAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

15. Consolidating Financial Statements (continued)

Consolidating Statements of Operations
Year ended June 30, 2003
(In thousands)



Dollar Dollar Financial
Financial Group, Inc. and
Corp. Subsidiaries Eliminations Consolidated
-------------------------------------------------------------------
Revenues...................................... $ - $ 219,388 $ - $ 219,388

Store and regional expenses:
Salaries and benefits...................... - 69,799 - 69,799
Occupancy.................................. - 18,856 - 18,856
Depreciation............................... - 5,859 - 5,859
Other...................................... - 47,766 - 47,766
-------------------------------------------------------------------
Total store and regional expenses............. - 142,280 - 142,280

Corporate expenses............................ - 31,241 - 31,241
Management fees............................... 1,049 - - 1,049
Losses on store closings and sales and other
restructuring.............................. - 3,987 - 3,987
Other depreciation and amortization........... - 3,320 - 3,320
Interest expense, net......................... 14,452 20,168 - 34,620
Litigation settlement costs................... - 2,750 - 2,750
Equity in subsidiary.......................... (2,131) - 2,131 -
-------------------------------------------------------------------
(Loss) income before income taxes ............ (13,370) 15,642 (2,131) 141
Income tax (benefit) provision ............... (4,776) 13,511 - 8,735
-------------------------------------------------------------------
Net (loss) income ........................... $ (8,594) $ 2,131 $ (2,131) $ (8,594)
===================================================================


69

DOLLAR FINANCIAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

15. Consolidating Financial Statements (continued)

Consolidating Statements of Cash Flows
Year ended June 30, 2003
(In thousands)


Dollar Dollar Financial
Financial Group, Inc. and
Corp. Subsidiaries Eliminations Consolidated
-------------------------------------------------------------------
Cash flows from operating activities:
Net (loss) income.................................... $ (8,594) $ 2,131 $ (2,131) $ (8,594)
Adjustments to reconcile net (loss) income to net
cash (used in) provided by operating activities:
Undistributed income of subsidiaries............ (2,131) - 2,131 -
Accretion of interest expense from 13% Senior
Discount Notes................................ 14,373 - - 14,373
Depreciation and amortization................... 338 10,971 - 11,309
Losses on store closings and sales and
other restructuring........................... - 3,987 - 3,987
Deferred tax (benefit) provision................ (5,093) 783 - (4,310)
Changes in assets and liabilities (net
Foreign currency gain on revaluation of
collateralized borrowings..................... - (398) - (398)
Increase in loans and other receivables....... (258) (4,794) (4,249) (9,301)
Decrease (increase) in income taxes receivable 317 (10,960) 10,960 317
Decrease in prepaid expenses and other........ - 891 - 891
Increase (decrease) in accounts payable,
income taxes payable, accrued expenses
and other liabilities and accrued interest
payable..................................... 81 1,221 (6,711) (5,409)
-------------------------------------------------------------------
Net cash (used in) provided by operating activities.. (967) 3,832 - 2,865

Cash flows from investing activities:
Acquisitions, net of cash acquired................... - (3,251) - (3,251)
Additions to property and equipment.................. - (7,428) - (7,428)
-------------------------------------------------------------------
Net cash used in investing activities................ - (10,679) - (10,679)

Cash flows from financing activities:
Other debt payments.................................. - (3) - (3)
Other collateralized borrowings...................... - 8,000 - 8,000
Net decrease in revolving credit facilities.......... - (17,237) - (17,237)
Payment of debt issuance costs....................... - (690) - (690)
Net increase in due to affiliates and due from parent 967 (967) - -
-------------------------------------------------------------------
Net cash provided by (used in) financing activities.. 967 (10,897) - (9,930)

Effect of exchange rate changes on cash
and cash equivalents.............................. - 2,916 - 2,916
-------------------------------------------------------------------

Net decrease in cash and cash equivalents............ - (14,828) - (14,828)
Cash and cash equivalents at beginning of year....... 4 86,633 - 86,637
-------------------------------------------------------------------
Cash and cash equivalents at end of year............. $ 4 $ 71,805 $ - $ 71,809
===================================================================


70

DOLLAR FINANCIAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

15. Consolidating Financial Statements (continued)

Consolidating Statements of Operations
Year ended June 30, 2002
(In thousands)



Dollar Financial
Dollar Group, Inc.
Financial and Subsidiary
Corp. Guarantors Eliminations Consolidated
-----------------------------------------------------------------
Revenues...................................... $ - $ 201,976 $ - $ 201,976

Store and regional expenses:
Salaries and benefits...................... - 65,295 - 65,295
Occupancy.................................. - 18,087 - 18,087
Depreciation............................... - 6,522 - 6,522
Other...................................... - 46,238 - 46,238
-----------------------------------------------------------------
Total store and regional expenses............. - 136,142 - 136,142

Establishment of reserves for new consumer
lending arrangements....................... - 2,244 - 2,244
Corporate expenses............................ - 24,516 - 24,516
Management fee................................ 1,049 - - 1,049
Losses on store closings and sales........... - 1,435 - 1,435
Other depreciation and amortization........... - 2,709 - 2,709
Interest expense, net......................... 12,580 18,694 - 31,274
Equity in subsidiary.......................... (6,037) - 6,037 -
-----------------------------------------------------------------
(Loss) income before income taxes............. (7,592) 16,236 (6,037) 2,607
Income tax (benefit) provision................ (4,200) 10,199 - 5,999
-----------------------------------------------------------------

Net (loss) income ........................... $ (3,392) $ 6,037 $ (6,037) $ (3,392)
=================================================================




71

DOLLAR FINANCIAL CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)

15. Consolidating Financial Statements (continued)

Consolidating Statements of Cash Flows
Year ended June 30, 2002
(In thousands)



Dollar Financial
Dollar Group, Inc.
Financial and Subsidiary
Corp. Guarantors Eliminations Consolidated
---------------------------------------------------------------
Cash flows from operating activities:
Net (loss) income......................................... $ (3,392) $ 6,037 $ (6,037) $ (3,392)
Adjustments to reconcile net (loss) income to net cash
(used in) provided by operating activities:
Undistributed income of subsidiaries................. (6,037) - 6,037 -
Accretion of interest expense from 13% Senior
Discount Notes..................................... 12,539 - - 12,539
Depreciation and amortization........................ 300 10,740 - 11,040
Losses on store closings and sales................... - 1,154 - 1,154
Establishment of reserves of new consumer
lending arrangements............................... - 1,448 - 1,448
Deferred tax benefit................................. (3,753) (873) 442 (4,184)
Changes in assets and liabilities (net of effect
of acquisitions):
(Increase) decrease in accounts receivable....... (259) 7,000 (4,324) 2,417
Increase in income taxes receivable.............. (447) (698) - (1,145)
Decrease in prepaid expenses and other........... - 260 - 260
Increase (decrease) in accounts payable,
income taxes payable, accrued expenses and
other liabilities and accrued interest payable 38 (10,615) 3,882 (6,695)
---------------------------------------------------------------
Net cash (used in) provided by operating activities....... (1,011) 14,453 - 13,442

Cash flows from investing activities:
Acquisitions, net of cash acquired........................ - (45) - (45)
Additions to property and equipment....................... - (10,063) - (10,063)
---------------------------------------------------------------
Net cash used in investing activities..................... - (10,108) - (10,108)

Cash flows from financing activities:
Other debt payments....................................... - (64) - (64)
Net increase in revolving credit facilities............... - 11,112 - 11,112
Payment of debt issuance costs............................ - (571) - (571)
Purchase of treasury stock................................ (57) - - (57)
Net increase in due to affiliates and due from parent..... 1,068 (1,068) - -
---------------------------------------------------------------
Net cash provided by financing activities................. 1,011 9,409 - 10,420

Effect of exchange rate changes on cash and
cash equivalents....................................... - 427 - 427
---------------------------------------------------------------
Net increase in cash and cash equivalents................. - 14,181 - 14,181
Cash and cash equivalents at beginning of year............ 4 72,452 - 72,456
---------------------------------------------------------------
Cash and cash equivalents at end of year.................. $ 4 $ 86,633 $ - $ 86,637
===============================================================


72

Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

None.

Item 9A. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures


As of the end of the period covered by this report, our management conducted
an evaluation, with the participation of our chief executive officer and chief
financial officer, of the effectiveness of our disclosure controls and
procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities
Exchange Act of 1934 (the "Exchange Act")). Based on this evaluation, our chief
executive officer and chief financial officer have concluded that our disclosure
controls and procedures are effective to ensure that information required to be
disclosed by us in the reports that we file or submit under the Exchange Act is
recorded, processed, summarized and reported within the time periods specified
in Securities and Exchange Commission's rules and forms and that such
information is accumulated and communicated to management, including our chief
executive officer and chief financial officer, as appropriate to allow timely
decisions regarding required disclosure.


Changes in Internal Control Over Financial Reporting


There was no change in our internal control over financial reporting during
our fiscal quarter ended June 30, 2004, that has materially affected, or is
reasonably likely to materially affect, our internal control over financial
reporting.


Item 9B. OTHER INFORMATION
N/A

PART III

Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Directors and Officers



Our directors and officers, and their respective ages and positions are set
forth below:



Name Age Position with Dollar Financial Corp.
- ---- --- ------------------------------------
Jeffrey Weiss ..................... 61 Chairman of the Board of Directors and Chief Executive Officer
Donald Gayhardt.................... 40 President and Director
Randall Underwood ................. 54 Executive Vice President and Chief Financial Officer
Sydney Franchuk ................... 52 Senior Vice President and President--Canadian Operations
Cameron Hetherington............... 39 Senior Vice President--International Operations
Gillian Wilmot .................... 43 Senior Vice President and President--U.K. Operations
Peter Sokolowski .................. 43 Vice President, Chief Credit Officer
Cyril Means........................ 37 Vice President, General Counsel
Melissa Soper...................... 38 Vice President, Human Resources
William Athas ..................... 42 Vice President, Finance
Michael Koester.................... 32 Director
Muneer Satter...................... 43 Director
Jonathan Seiffer................... 32 Director
Jonathan Sokoloff.................. 47 Director
Michael Solomon.................... 29 Director


73

Jeffrey Weiss has served as our Chairman and Chief Executive Officer since
an affiliate of Bear Stearns & Co. Inc. acquired us in May 1990. Until June
1992, Mr. Weiss was also a Managing Director at Bear Stearns with primary
responsibility for the firm's investments in small to mid-sized companies, in
addition to serving as Chairman and Chief Executive Officer for several of these
companies. Mr. Weiss is the author of several popular financial guides.

Donald Gayhardt has served as our President since December 1998. Mr.
Gayhardt also served as our Chief Financial Officer from April 2001 to June
2004. He served as our Executive Vice President and Chief Financial Officer from
1993 to 1997. In addition, he joined our board as a director in 1990. Prior to
joining us, Mr. Gayhardt was employed by Bear Stearns from 1988 to 1993, most
recently as an Associate Director in the Principal Activities Group, where he
had oversight responsibility for the financial and accounting functions at a
number of manufacturing, distribution and retailing firms, including our
company. Prior to joining Bear Stearns, Mr. Gayhardt held positions in the
mergers and acquisitions advisory and accounting fields.

Randall Underwood joined us as our Executive Vice President and Chief
Financial Officer in June 2004. Previously, Mr. Underwood served for three years
as Senior Vice President, Global Finance and Administration and Chief Financial
Officer for The Coleman Company, Inc. Prior to his tenure at The Coleman
Company, Mr. Underwood held senior executive positions with Strategic
Development Partners, Inc. from 1999 through 2000 and Thorn Americas, Inc. from
1988 through 1998. Earlier in his career, he practiced as a Certified Public
Accountant with the firm of Peat, Marwick, Mitchell and Co.

Sydney Franchuk, our Senior Vice President and President--Canadian
Operations, has served as President of our Canadian operations since November
1997. Previously, Mr. Franchuk held the position of Vice President of Finance
and Administration for National Money Mart Co. and Check Mart, an affiliated
company in the United States. Prior to joining us in 1985, Mr. Franchuk was a
public accountant with Woods & Company and Ernst & Young LLP Chartered
Accountants and is a Certified Management Accountant.

Cameron Hetherington became our Senior Vice President--International
Operations in May 2004. He served as our Senior Vice President and President--UK
Operations, as well as Managing Director of Dollar Financial UK Limited from
March 1999 to May 2004. From July 1993 to September 1998, Mr. Hetherington was
employed at our Canadian operations in a variety of senior management positions,
including National Operations Manager. From June 1983 to November 1992, Mr.
Hetherington served as a commissioned officer within the Australian Defence
Force in a variety of operational, training and administrative roles both
domestically and overseas.

Gillian Wilmot joined us as our Senior Vice President and President--U.K.
Operations in May 2004. Prior to joining us, Ms. Wilmot worked as a strategic
consultant beginning in January 2003. She was Managing Director for the Mail
Markets Division of the Royal Mail from January 2001 through January 2003 and
the Brand and Strategy Director for Littlewoods PLC from April 1999 through
November 2000. Additionally, Ms. Wilmot is currently a director of Blackwells
Retail and a member of the U.K. Committee of Advertising Practice.

Peter Sokolowski has served as our Vice President--Chief Credit Officer
since October 2002 and has overall responsibility for the oversight of
underwriting, analysis and performance monitoring for our credit products. He
also served as our Vice President--Finance from 1991 to 2002. Prior to joining
us, Mr. Sokolowski worked in various financial positions in the commercial
banking industry.

Cyril Means has served as our Vice President and General Counsel since May
1999. Prior to joining us, Mr. Means served as Vice President and Corporate
Counsel to The Aegis Consumer Funding Group, Inc. from 1995 to 1997, and as
Executive Vice President and General Counsel of Aegis from 1997 to 1999, where
he was primarily responsible for OPCO's securitization facility and credit
lines. Prior to joining Aegis, Mr. Means held in-house legal positions in the
insurance, commercial real estate and entertainment fields.

Melissa Soper has served as our Vice President--Human Resources since
October 1996 and has overall responsibility for our human resources compliance
to state and federal labor laws. Prior to joining us, Ms. Soper served as a
Director of Human Resources for a national hotel chain.

William Athas, our Vice President--Finance, had formerly served as our
Director of Finance since January 2000, and has since had overall responsibility
for accounting oversight. Prior to joining us, he was the divisional controller
of Timet, a titanium metals company, from December 1998 to January 2000. Mr.

74

Athas worked at Asarco, Inc., a non-ferrous metals company, from August 1987 to
December 1998, where he became the assistant corporate controller in 1997. He
attained his CPA certification in 1989.

Michael Koester has served as a director since November 2003. He has been a
vice president of Goldman Sachs & Co.'s Principal Investment Area since December
2002. From August 1999 to December 2002, he was an associate of Goldman Sachs.

Muneer Satter has served as a director since December 1998. He is a Managing
Director in Goldman Sachs' Principal Investment Area in New York. Prior to this
assignment, he was head of Goldman Sachs' Principal Investment Area in Europe
and was based in London. He joined the firm in 1988 and became a managing
director in 1996. He also serves on the boards of directors of Atkins
Nutritional, Inc., Diveo Broadband Networks and Grupo Clarin S.A.

Jonathan Seiffer has served as a director since October 2001. He has been a
partner of Leonard Green & Partners, L.P. since January 1999 and joined Leonard
Green & Partners, L.P. as an associate in October 1994. Prior to his arrival at
Leonard Green & Partners, Mr. Seiffer was a member of the corporate finance
department of Donaldson, Lufkin & Jenrette Securities Corporation. He is also a
director of Diamond Triumph Auto Glass, Inc., Liberty Group Publishing, Inc. and
several private companies.

Jonathan Sokoloff has served as a director since December 1998. Mr. Sokoloff
has been an executive officer of Leonard Green & Partners, L.P. since its
formation in 1994. Since 1990, Mr. Sokoloff has been a partner in a private
equity firm affiliated with Leonard Green & Partners, L.P. Mr. Sokoloff was
previously a Managing Director at Drexel Burnham Lambert Incorporated. Mr.
Sokoloff is also a director of The Sports Authority, Rite Aid Corporation,
Diamond Triumph Auto Glass, Inc. and several private companies.

Michael Solomon has served as a director since October 2002. He has been a
vice president of Leonard Green & Partners, L.P. since April 2002 and joined
Leonard Green & Partners, L.P. as an associate in May 2000. From June 1996 to
May 2000, Mr. Solomon was an associate with the Financial Sponsors Group of
Deutsche Banc Alex Brown.

Audit Committee Financial Expert

Our board of directors has not determined that any of the current members of our
audit committee is an "audit committee financial expert," as that term is
defined in Item 401(h) of Regulation S-K under the Securities Exchange Act of
1934, as amended. We believe that the members of our audit committee are
financially literate and appropriately experienced in business, accounting and
financial matters for a company, such as ours, that does not have equity
securities listed on a national exchange or association. Although they may not
have obtained these attributes through the experience specified in the
definition of "audit committee financial expert," we believe the members of our
audit committee are able to effectively serve and carry out the duties and
responsibilities of the audit committee.


Code of Ethics

We have adopted a code of ethics applicable to our principal executive officer,
principal financial officer and principal accounting officer or controller, as
well as other senior officers. The code of ethics is available on our website at
http://www.dfg.com.




75

Item 11. EXECUTIVE COMPENSATION

Summary Compensation Table

The following table sets forth information with respect to the compensation
of our Chief Executive Officer and each of our named executive officers whose
annual total salary and bonus in fiscal 2004 exceeded $100,000:





Annual Compensation
------------------------------------------------

Name and Other Annual All Other
Principal Position Year Salary ($) Bonus ($) Compensation ($) Compensation ($)
-----------------------------------------------------------------------------------------------------------
Jeffrey Weiss.............. 2004 675,000 1,052,000 99,217(1) 7,741(3)
Chairman and 2003 650,000 - 60,290(1) 8,414(3)
Chief Executive Officer 2002 650,000 - 122,417(1) 5,625(3)

Donald Gayhardt............. 2004 400,000 603,000 - 2,103(3)
President 2003 350,000 - - 3,264(3)
2002 350,000 - - 3,990(3)

Sydney Franchuk............. 2004 148,980 157,325 - 11,332(3)
Senior Vice President and 2003 132,840 84,353 - -
President - Canadian 2002 127,560 79,725 - -
Operations

Cameron Hetherington........ 2004 204,880 243,668 69,628(2) 14,342(3)
Senior Vice President and 2003 186,695 56,008 64,458(2) 13,067(3)
President - U.K. Operations 2002 128,980 46,985 53,907(2) 2,971(3)



(1) Amounts include $28,840 paid in fiscal 2004, $30,635 paid in fiscal 2003 and
$62,314 paid in fiscal 2002 for life insurance premiums on policies where we
were not the named beneficiary. Amounts include $48,853 paid in fiscal 2004
for employee membership. Perquisites and other personal benefits provided to
each other named executive officer did not exceed the lesser of $50,000 or
10% of the total salary and bonus for the officer.
(2) Amounts represent housing and other living costs.
(3) Amounts represent payments relating to retirement plans.


76


Option/SAR Grants in Last Fiscal Year



Individual Grants Potential Realizable
Value at Asumed
Annual Rates of Stock
Price Appreciation
for Option Term
- ---------------------------------------------------------------------------------------------------------------
Securities Percent of Exercise
Name underlying total of base
option/SARs Options/SARs price Expiration
Granted granted ($/Sh) date 5% 10%
(#) to ($) ($)
employees $ $
in fiscal
year
- ---------------------------------------------------------------------------------------------------------------
Don Gayhardt 544(1) 100% $5,600 1/6/14 $152,320 $304,640



(1) Represents the number of shares of our common stock underlying options
granted in January 2004 under our 1999 Stock Incentive Plan.

Aggregated Option Exercises in Last Fiscal Year
and Fiscal Year-End Option Values



Shares Number of Securities Value of Unexercised
Acquired Value Underlying Unexercised In-the-Money Options at
Name on Exercise Realized Options at Fiscal Year End Fiscal Year End(1)
- -----------------------------------------------------------------------------------------------------------------
Exercisable/Unexercisable Exercisable/Unexercisable

Jeffrey Weiss........ 0 $ 0 0/0 $0/$0
Donald Gayhardt...... 0 0 399/544 $947,625/$0
Sydney Franchuk...... 0 0 100/20 $237,500/$0
Cameron Hetherington. 0 0 100/20 $237,500/$0



(1) An assumed fair market value of $5,600 per share was used to calculate the
value of the options. As the shares are not traded in an established public
market, the value assigned is based on the strike price of the most recent
options to be granted.

1999 Stock Incentive Plan

Our 1999 stock incentive plan is intended to secure for us the benefits
arising from stock ownership by selected key employees, directors, consultants
and advisors as our board of directors may from time to time determine. The
following are the material terms of the 1999 plan:

Shares Subject to Plan

The aggregate number of shares of our stock reserved and available for
issuance under the 1999 plan is 1,413.32 of which 1,408.00 were underlying
outstanding stock options as of June 30, 2004. We do not intend to grant any
additional stock options under the 1999 plan. The number of shares reserved for
issuance is generally subject to equitable adjustment upon the occurrence of any
reorganization, merger, consolidation, recapitalization, reclassification, stock
split-up, combination or exchange of shares, stock dividend or other similar
corporate transaction or event.

77

Administration

The plan is administered by our board of directors. Our board of directors
has authority to construe and interpret the 1999 plan and any awards made
thereunder, to grant and determine the terms of awards and to make any necessary
rules and regulations for the administration of the 1999 plan.

Eligibility

All of our employees and directors, and in specified circumstances, our
consultants and advisors are eligible to participate in the 1999 plan.

Type of Awards

Nonqualified stock options or incentive stock options may be granted under
the 1999 plan. Stock appreciation rights may also be granted in tandem with
nonqualified stock options or incentive stock options granted under the 1999
plan.

Amendment and Termination

The 1999 plan may be amended by our board of directors, at any time, subject
to stockholder approval to increase the shares of stock reserved for issuance
under the 1999 plan or modify eligibility requirements.

Exercisability, Vesting and Price of Awards

The stock options will vest at the times and upon the conditions that the
committee may determine. The price at which shares subject to any stock options
may be purchased are reflected in each particular stock option agreement.

Employment Agreement with Jeffrey Weiss

Effective December 19, 2003, we entered into a new employment agreement with
Jeffrey Weiss. The agreement provides for Mr. Weiss to serve as our Chief
Executive Officer for a term of three years. The term shall be automatically
renewed for subsequent additional terms of one year unless either party provides
notice of its intention not to renew the term.

The employment agreement provides for Mr. Weiss to receive an annual base
salary of $675,000, subject to biannual increase by our board of directors or a
committee thereof, and to receive specified annual cash bonuses determined based
on our achievement of annual performance targets. Mr. Weiss is also entitled to
specified perquisites. In addition, as long as Mr. Weiss serves as our Chief
Executive Officer, we will use our commercially reasonable efforts to ensure
that he continues to serve on our board of directors.

If Mr. Weiss' employment is terminated other than for cause in relation to a
change of control, the employment agreement provides that we will pay Mr. Weiss
his unpaid base salary for the remainder of the term, discounted to present
value, without mitigation. In such circumstances, the employment agreement also
provides for the continuation of specified benefits during the remaining
scheduled term of the employment agreement.

If Mr. Weiss' employment is terminated other than for cause under any
circumstances not related to a change of control, or if Mr. Weiss terminates his
employment for good reason, the employment agreement provides that we will pay
Mr. Weiss his remaining base salary during the remaining scheduled term of the
employment agreement, subject to offset for compensation earned pursuant to new
employment. In such circumstances, the employment agreement also provides for
the continuation of specified benefits during the remaining scheduled term of
the employment agreement.

Employment Agreement with Donald Gayhardt

Effective December 19, 2003, we entered into a new employment agreement with
Donald Gayhardt. The agreement provides for Mr. Gayhardt to serve as our
President for a term of three years. The term shall be automatically renewed for
subsequent additional terms of one year unless either party provides notice of
its intention not to renew the term.

78

The employment agreement provides for Mr. Gayhardt to receive an annual base
salary of $400,000, subject to biannual increase by our board of directors or a
committee thereof, and to receive specified annual cash bonuses determined based
on our achievement of annual performance targets. Mr. Gayhardt is also entitled
to specified perquisites. In addition, as long as Mr. Gayhardt serves as our
President, we will use our commercially reasonable efforts to ensure that he
continues to serve on our board of directors.

If Mr. Gayhardt's employment is terminated other than for cause in relation
to a change of control, the employment agreement provides that we will pay Mr.
Gayhardt his unpaid base salary for the remainder of the term, discounted to
present value, without mitigation. In such circumstances, the employment
agreement also provides for the continuation of specified benefits during the
remaining scheduled term of the employment agreement.

If Mr. Gayhardt's employment is terminated other than for cause under any
circumstances not related to a change of control, or if Mr. Gayhardt terminates
his employment for good reason, the employment agreement provides that we will
pay Mr. Gayhardt his remaining base salary during the remaining scheduled term
of the employment agreement, subject to offset for compensation earned pursuant
to new employment. In such circumstances, the employment agreement also provides
for the continuation of specified benefits during the remaining scheduled term
of the employment agreement.

Effective January 2004, we granted Mr. Gayhardt an option to purchase 544
shares of our common stock pursuant to our 1999 stock incentive plan at an
exercise price of $5,600 per share.

Employment Agreement with Randall Underwood

Effective June 30, 2004, we entered into an employment agreement for Randall
Underwood to serve as our Chief Financial Officer. The employment agreement
provides for Mr. Underwood to receive an annual base salary of $275,000, subject
to annual review by our board of directors or a committee thereof, and to
receive specified annual cash bonuses determined based on our achievement of
annual performance targets. Mr. Underwood is also entitled to specified
perquisites.

If Mr. Underwood's employment is terminated in relation to a change of
control, the employment agreement provides that we will continue to pay Mr.
Underwood his base salary for eighteen months following the date of termination.
If Mr. Underwood's employment is terminated other than for cause, the employment
agreement provides that we will continue to pay Mr. Underwood his base salary
for six months following the date of termination and will pay Mr. Underwood at a
rate equal to 50% of his base salary for twelve months thereafter.

Employment Agreement with Cameron Hetherington

Effective April 1, 2002, we entered into an employment agreement with
Cameron Hetherington. The agreement provides for Mr. Hetherington to serve as
our President--U.K. Operations through June 30, 2004. The employment agreement
provides for Mr. Hetherington to receive an annual base salary of
(pound)(GPB)117,700 and specified annual cash bonuses determined based on our
achievement of annual performance targets. Mr. Hetherington is also entitled to
specified perquisites. If Mr. Hetherington's employment is terminated other than
for cause after April 1, 2003, the employment agreement provides that we will
pay Mr. Hetherington moving expenses and fifty percent of one year's base
salary, subject to offset for compensation earned pursuant to new employment.

Director Compensation

Our directors are not currently entitled to any compensation for serving as
a director.

Compensation Committee Interlocks and Insider Participation

Our board of directors as a whole performed the functions of a compensation
committee, and all of the members of our board of directors participated in
deliberations concerning executive compensation, including Jeffrey Weiss, our
Chairman and Chief Executive Officer, and Donald Gayhardt, our President. No
interlocking relationship exists between our board of directors and the board of
directors or compensation committee of any other company, nor has any
interlocking relationship existed in the past.

79

Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth the number of shares of our common stock
owned beneficially on June 30, 2004, by:

o each person that is the beneficial owner of more than 5% of our common
stock;

o all directors and nominees;

o the named executive officers; and

o all directors and executive officers as a group.

The address of each officer and director is c/o Dollar Financial Corp., 1436
Lancaster Avenue, Berwyn, Pennsylvania 19312, unless otherwise indicated. On
June 30, 2004, there were a total of 19,864.87 shares of our common stock issued
(106.71 shares were held in treasury).



Amount of
Name and Address of Beneficial Owner Beneficial Percent of
of Dollar Financial Corp. Shares Ownership Class
- -----------------------------------------------------------------------------------------------
Green Equity Investors II, L.P.(1) .......................... 13,014.94 65.87%
Jonathan Seiffer(1).......................................... 13,014.94(3) 65.87
Jonathan Sokoloff(1) 13,014.94(3) 65.87
Jeffrey Weiss................................................ 3,058.99 15.48
The Goldman Sachs Group, Inc.(2)............................. 2,150.46(4) 10.88
Michael Koester(2)........................................... 2,150.46(5) 10.88
Muneer Satter(2)............................................. 2,150.46(5) 10.88
Donald Gayhardt(2)........................................... 563.56(6) 2.80
Sydney Franchuk.............................................. 141.24(7) *
Cameron Hetherington......................................... 100.00(8) *
Michael Solomon(1)........................................... - *
Randall Underwood............................................ - *
All directors and officers as a group (14 persons)........... 19,151.01(9) 93.88


* Less than 1% of the class

(1) The address of Green Equity Investors II, L.P. Jonathan Seiffer, Jonathan
Sokoloff and Michael Solomon is 11111 Santa Monica Boulevard, Los Angeles,
California 90025.

(2) The address of The Goldman Sachs Group, Inc., Michael Koester and Muneer
Satter is 85 Broad Street, New York, New York 10004.

(3) Green Equity Investors II, L.P. is a Delaware limited partnership managed by
Leonard Green & Partners, L.P. Each of Messrs. Seiffer and Sokoloff, either
directly or indirectly (whether through ownership interest or position) or
through one or more intermediaries, may be deemed to control Leonard Green &
Partners, L.P. As such, Messrs. Seiffer and Sokoloff may be deemed to have
shared voting and investment power with respect to shares held by Green
Equity Investors II, L.P. These individuals disclaim beneficial ownership of
the securities held by Green Equity Investors II, L.P.

(4) Represents the aggregate number of shares of our common stock that are owned
by certain investment funds affili ated with the Goldman Sachs Group, Inc.
Consists of 1,350.19 shares beneficially owned by GS Mezzanine Part ners,
L.P., 725.03 shares beneficially owned by GS Mezzanine Partners Offshore,
L.P., 17.44 shares beneficially owned by Bridge Street Fund 1998, L.P. and
57.80 shares beneficially owned by Stone Street Fund 1998, L.P. The Goldman
Sachs Group, Inc. disclaims beneficial ownership of the 2,150.46 shares
owned by such invest ment funds to the extent attributable to equity
interests therein held by persons other than The Goldman Sachs Group, Inc.
and its affiliates. Each of such funds shares voting and investment power
with certain of its respective affiliates.

80

(5) Mr. Satter is a managing director and Mr. Koester is a vice president of
Goldman Sachs & Co., a wholly owned subsidiary of The Goldman Sachs Group,
Inc. As such, Messrs. Satter and Koester may be deemed to have shared voting
and investment power with respect to shares held by investment funds managed
by affiliates of The Goldman Sachs Group, Inc. These individuals disclaim
beneficial ownership of the securities held by such investment funds, except
to the extent of their respective pecuniary interests therein, if any.

(6) Includes options to purchase 399.00 shares of our common stock which are
currently exercisable.

(7) Includes options to purchase 100.00 shares of our common stock which are
currently exercisable.

(8) Includes options to purchase 100.00 shares of our common stock which are
currently exercisable.

(9) Includes options to purchase 641.00 shares of our common stock which are
currently exercisable.


Securities Authorized for Issuance Under Equity Compensation Plans



Number of Number of securities
securities to be issued Weighted-average remaining available
upon exercise of exercise price of for future issuance
outstanding options, outstanding options, under equity compensation
warrants and rights warrants and rights plans
(excluding securities
Plan category reflected in column (a)
- ---------------------------------------------------------------------------------------------------------------

Equity compensation
plans approved by
security holders 1,408(1) $4,314 5.32

Equity compensation plans
not approved by security
holders - - -



(1) Represents the number of shares of our common stock issuable upon
exercise of options granted under our 1999 Stock Incentive Plan.

Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Stockholders' Agreement

We are a party to an amended and restated stockholders agreement with
certain stockholders, including GS Mezzanine Partners, L.P., Bridge Street Fund
1998, L.P., Stone Street Fund 1998, L.P. and GS Mezzanine Partners Offshore,
L.P. (collectively, "GS "), Ares Leveraged Investment Fund, L.P. and Ares
Leveraged Investment Fund II, L.P. (together, "Ares "), Green Equity Investors
II, L.P., Jeffrey Weiss, Donald Gayhardt and C.L. and Sheila Jeffrey. The
stockholders agreement will terminate on November 13, 2013, though certain
provisions may terminate before then if there is a public offering of our common
stock.

Transfer Restrictions

The stockholders agreement provides, among other things, for certain
restrictions on the disposition of our common stock. Our common stock that is
subject to the agreement may only be transferred in accordance with the terms
and conditions of the agreement. Any other transfers of our common stock will be
void and of no force or effect. Any shares of our common stock that are
subsequently transferred to a third party will remain subject to the terms and
conditions of the stockholders agreement.

81

Tag-Along and First Option Rights

If, at any time, Green Equity Investors II, L.P. proposes to enter into an
agreement to sell or otherwise dispose of for value more than twenty percent
(20%) of the outstanding shares of our common stock owned by it as of the date
of the stockholders agreement, then the other stockholders party to the
stockholders agreement will be given the opportunity to participate
proportionately in (in other words, "tag along" with) the sale. These tag-along
provisions do not apply to certain transactions specified in the stockholders
agreement.

If, at any time, an executive who is party to the stockholders agreement
desires to sell for cash all or any part of his or her shares, he or she must
provide notice to Green Equity Investors II, L.P., GS, Ares and us. Upon
receiving notice, such parties will have the option to purchase all, but not
less than all, of such shares on the same terms and conditions. If more than one
of such parties exercises their option, we will have first priority with Green
Equity Investors II, L.P., GS and Ares having the right to purchase on a pro
rata basis any remaining shares. Similar first option rights in favor of Green
Equity Investors II, L.P. exist with respect to proposed sales by GS and Ares.
Each of those parties and certain of our executives also have preemptive rights
if we issue or grant additional shares of our common stock or other equity
interests.

Repurchase of Shares

If the employment of an executive who is party to the stockholders agreement
is terminated, including by reason of his or her death or permanent disability,
we, Green Equity Investors II, L.P., GS and Ares (with priority to us and then
to Green Equity Investors II, L.P., GS and Ares on a pro rata basis) will have
the right and option to repurchase all of the shares then owned by the
executive. The price will be the fair market value of the shares at the time the
executive's employment is terminated as determined under the stockholders
agreement.

Registration Rights

Under the stockholders agreement, Green Equity Investors II, L.P. has the
right to demand, on three occasions, that we file a registration statement under
the Securities Act covering all or a portion of the 13,014.94 shares of our
common stock that it holds. On two occasions, GS has the right to demand such
registration covering all or a portion of the 2,998.15 shares of our common
stock that it and Ares hold.

In addition, if we propose to register any common stock under the Securities
Act (pursuant to a demand or otherwise) other than on a registration statement
on Form S-4 or S-8, or in connection with an exchange offer, each stockholder
that is party to the stockholders agreement, including Green Equity Investors
II, L.P. and GS, may elect to include in, or "piggyback" on, the registration
all or a portion of the shares of our common stock that it holds. Currently
19,864.87 shares of our common stock are subject to piggyback registration
rights. However, the managing underwriter, if any, of the offering pursuant to
the registration has the right to limit the number of securities to be included
by these holders. If the managing underwriter limits the number of securities to
be included by these holders, we will include in the registration, first, the
securities we propose to sell, second, up to $1.75 million in aggregate net
proceeds of securities proposed to be sold by Jeffrey Weiss, and third, the
securities the holders propose to sell, allocated pro rata among them. We would
bear all registration expenses incurred in connection with these registrations.
The stockholders would pay all underwriting discounts, selling commissions and
stock transfer taxes applicable to the sale of their securities.

Drag-Along Rights

If Green Equity Investors II, L.P. agrees to sell all or substantially all
of its shares to a third party, then it may demand that the other stockholders
who are party to the stockholders agreement sell all, but not less than all, of
their shares at the same price and on the same terms and conditions.

Grant of Proxy

Each stockholder who is party to the stockholders agreement (other than GS)
has agreed to vote its shares so that (1) so long as Jeffrey Weiss is our Chief
Executive Officer, he will be elected to our board of directors and (2) so long
as Green Equity Investors II, L.P. owns, directly or indirectly, twenty percent
(20%) or more of the then outstanding stock, it will be entitled to elect the
remaining members of our board of directors. GS Mezzanine Partners, L.P. is
entitled to nominate two members of our board of directors so long as GS owns
any of our notes or shares of common stock.

82

Investor Put/Sale Rights

Beginning September 30, 2008, each of GS and Ares, during a prescribed time
period, will have the right to require us to repurchase all or a portion of the
shares of our common stock then owned by them for an amount calculated in
accordance with the stockholders agreement. In the event we are unable to
purchase such shares, then any party holding a majority of the shares of common
stock included in such notice will have the right to require us to seek to sell
the company. If such right is exercised, we and such holders will mutually
select an investment banking firm to seek a sale transaction, and will mutually
agree upon a sale process. If, upon the conclusion of such sale process, such
holders wish to sell, then the other stockholder parties to the stockholders
agreement have agreed to cause us to complete the sale. Alternatively, if such
holders do not wish to sell or the sale process otherwise does not result in our
sale, then, beginning September 30, 2010, each of GS and Ares will again have a
right to require the repurchase of their shares, on substantially identical
terms and conditions; and, similarly, their repurchase rights will be
reinstated, on substantially identical terms and conditions, on each two-year
anniversary thereafter. The sole right of GS and Ares, in the event that we are
unable to repurchase their shares following a repurchase election by them, is to
seek our sale as described in this paragraph.

Indebtedness of Management

During fiscal 1999, we issued loans to certain members of management. The
funds were used to pay personal income tax expense associated with the exercise
of certain options and grants of certain stock in connection with the purchase
of our common stock by Green Equity Investors II, L.P. The loans are secured by
shares of our common stock. As of June 30, 2004, the following members of
management owed outstanding principal on these loans in excess of $60,000:



Outstanding Principal Accrued
Name Rate Maturity Date Amount Interest
- ---------------------------------------------------------------------------------------------------
Jeffrey Weiss 6.00% 12/18/2004 $2,000,000 $665,000
Donald Gayhardt 6.00 12/18/2004 96,525 32,095
Sydney Franchuk 0.00 4/1/2005 69,258 -
Peter Sokolowski 6.00 12/18/2004 70,695 23,506



In addition, as part of his prior employment agreement, Jeffrey Weiss was
issued a loan in the amount of $4.3 million to purchase additional shares of our
common stock. The loan accrues interest at a rate of 6% per year and is due and
payable in full on December 18, 2004. The loan is secured by a pledge of shares
of our common stock.

Management Agreement

Under an amended and restated management services agreement among Leonard
Green & Partners, L.P., Dollar Financial Group, Inc. and us, we agreed to pay
Leonard Green & Partners, L.P. an annual fee equal to $1.0 million for ongoing
management, consulting and financial planning services, as well as reimbursement
of any out-of-pocket expenses incurred. The agreement is scheduled to terminate
on November 13, 2008.


83

Item 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

Audit Fees

Ernst & Young LLP, an independent registered public accounting firm, is the
principal independent accountant of Dollar Financial Corp. and our subsidiaries.
Ernst & Young LLP is retained solely to provide audit and audit related services
and advice with respect to tax matters, and has not provided or billed for any
other type of non-audit services to Dollar Financial Corp. or our subsidiaries.
Ernst & Young LLP billed us aggregate fees of approximately $1.4 million and
$435,000 and were paid such amounts for fiscal years 2004 and 2003,
respectively, for the following services: (i) audit of the annual consolidated
financial statements of Dollar Financial Corp. and our subsidiaries for the
fiscal years ended June 30, 2004 and 2003; (ii) review of the interim financial
statements of Dollar Financial Corp. and our subsidiaries included in quarterly
reports on Form 10-Q for the periods ended September 30, December 31, and March
31, 2004 and 2003; and (iii) the issuance of comfort letters, review of
registration statements and issuance of consents.

Audit Related Fees

Ernst & Young LLP billed us for other audit-related fees of approximately
$17,000 and $11,000 and were paid such amounts for 2004 and 2003, respectively,
for the audit of the Dollar Financial Group Retirement Plan (401(k)).


Tax Fees

Ernst & Young LLP billed us fees of approximately $6,000 and $9,000 and were
paid such amounts for 2004 and 2003, respectively, for the following tax
services: (i) tax compliance; and (ii) tax planning.

All Other Fees

None.

Audit Committee Pre-approval Policies and Procedures

At its regularly scheduled and special meetings, the audit committee of our
board of directors considers and pre-approves any audit and non-audit services
to be performed by Ernst & Young LLP. The audit committee of our board of
directors continues to monitor legislative and regulatory developments
concerning auditor independence and services that may be provided by independent
auditors to an audit client, including those developments under the
Sarbanes-Oxley Act of 2002 and related rules issued by the SEC.


84

PART IV

Item 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(a)(1) and (2) List of Financial Statements and Schedules

The following consolidated financial statements are submitted in response to
Item 14(a)(1) and (2):



Dollar Financial Corp. Page
---------
Report of Independent Registered Public Accounting Firm....................................... 38
Consolidated Balance Sheets, June 30, 2003 and 2004........................................... 39
Consolidated Statements of Operations, years ended June 30, 2002, 2003 and 2004............... 40
Consolidated Statements of Shareholders' Equity, years ended June 30, 2002, 2003 and 2004..... 41
Consolidated Statements of Cash Flows, years ended June 30, 2002, 2003 and 2004............... 42
Notes to Consolidated Financial Statements.................................................... 43



All other Financial Statement Schedules for which provision is made in the
applicable accounting regulation of the Securities and Exchange Commission are
omitted because such schedules are not required under the related instructions,
are inapplicable, or the required information is given in the financial
statements.


[The remainder of this page intentionally left blank.]




85

(a)(3) Exhibits
Exhibit No. Description of Document
----------- -----------------------
3.1(a) Certificate of Incorporation of Dollar Financial Group, Inc.(1)
3.1(b) Certificate of Amendment of the Certificate of Incorporation of
Dollar Financial Group, Inc.(1)
3.2 Amended and Restated Bylaws of Dollar Financial Group, Inc.(6)
3.3 Amended and Restated Certificate of Incorporation of Dollar
Financial Corp.(6)
3.4 Bylaws of Dollar Financial Corp.(6)
3.5(a) Articles of Incorporation of Any Kind Check Cashing Centers,
Inc.(1)
3.5(b) Articles of Amendment to the Articles of Incorporation of Any
Kind Check Cashing Centers, Inc.(1) ,
3.6 Bylaws of Any Kind Check Cashing Centers, Inc.(1)
3.7(a) Articles of Incorporation of Cash Unlimited of Arizona, Inc.(6)
3.8 Bylaws of Cash Unlimited of Arizona, Inc.(6)
3.9 Articles of Incorporation of Check Mark of Louisiana, Inc.(1)
3.10 Bylaws of Check Mart of Louisiana, Inc.(1)
3.11(a) Articles of Incorporation of Check Mart of New Mexico, Inc.(1)
3.11(b) Articles of Amendment to the Articles of Incorporation of Check
Mart of New Mexico, Inc.(1)
3.12 Bylaws of Check Mart of New Mexico, Inc.(1)
3.13 Articles of Incorporation of Check Mart of Pennsylvania,
Inc.(1)
3.14 Bylaws of Check Mart of Pennsylvania, Inc.(1)
3.15 Articles of Incorporation of Check Mart of Texas, Inc.(1)
3.16 Bylaws of Check Mart of Texas, Inc.(1)
3.17 Articles of Incorporation of Check Mart of Wisconsin, Inc.(1)
3.18 Bylaws of Check Mart of Wisconsin, Inc.(1)
3.19 Certificate of Incorporation of DFG International, Inc.(6)
3.20 Bylaws of DFG International, Inc.(6)
3.21 Certificate of Incorporation of DFG World, Inc.(6)
3.22 Bylaws of DFG World, Inc.(6)
3.23 [Intentionally omitted.]
3.24 [Intentionally omitted.]
3.25(a) Articles of Incorporation of Financial Exchange Company of
Ohio, Inc.(1)
3.25(b) Certificate of Amendment by Incorporator to the Articles of
Incorporation of Financial
Exchange Company of Ohio, Inc.(1)
3.25(c) Certificate of Amendment (by Shareholders) to the Articles of
Incorporation of Financial Exchange Company of Ohio, Inc.(1)
3.26 Code of Regulations of Financial Exchange Company of Ohio,
Inc.(1)
3.27(a) Articles of Incorporation of Financial Exchange Company of
Pennsylvania, Inc.(1)
3.27(b) Certificate of Amendment to the Articles of Incorporation of
Financial Exchange Company of Pennsylvania, Inc.(1)
3.27(c) Certificate of Amendment to the Articles of Incorporation of
Financial Exchange Company of Pennsylvania, Inc.(I)
3.28 Bylaws of Financial Exchange Company of Pennsylvania, Inc.(1)
3.29 Certificate of Incorporation of Financial Exchange Company of
Pittsburgh, Inc.(1)
3.30 Bylaws of Financial Exchange Company of Pittsburgh, Inc.(1)
3.31 Certificate of Incorporation of Financial Exchange Company of
Virginia, Inc.(1)
3.32 Bylaws of Financial Exchange Company of Virginia, Inc.(1)
3.33 Certificate of Incorporation of Loan Mart of Oklahoma, Inc.(6)
3.34 Bylaws of Loan Mart of Oklahoma, Inc.(6)
3.35 Certificate of Incorporation of Monetary Management Corporation
of Pennsylvania(1)
3.36 Bylaws of Monetary Management Corporation of Pennsylvania(1)
3.37(a) Certificate of Incorporation of Monetary Management of
California, Inc.(1)
3.37(b) Certificate of Ownership and Merger of Monetary Management of
California, Inc.(6)
3.38 Bylaws of Monetary Management of California, Inc.(1)
3.39 Articles of Incorporation of Monetary Management of Maryland,
Inc.(1)
3.40 Amended and Restated Bylaws of Monetary Management of Maryland,
Inc.(1)
3.41(a) Certificate of Incorporation of Monetary Management of New
York, Inc.(1)
3.41(b) Certificate of Change of Monetary Management of New York,
Inc.(6)
3.42 Bylaws of Monetary Management of New York, Inc.(1)
3.43(x) Articles of Incorporation of Money Mart Express, Inc.(6)
3.43(b) Articles of Amendment of Money Mart Express, Inc.(6)
3.44 Bylaws of Money Mart Express, Inc.(6)

86

(a)(3) Exhibits
Exhibit No. Description of Document
----------- -----------------------
3.45(a) Certificate of Incorporation of Moneymart, Inc.(6)
3.45(b) Certificate of Ownership and Merger of Moneymart, Inc.(6)
3.46 Bylaws of Moneymart, Inc.(6)
3.47 Articles of Incorporation of Pacific Ring Enterprises, Inc.(1)
3.48 Amended and Restated Bylaws of Pacific Ring Enterprises,
Inc.(6)
3.49 Articles of Incorporation of PD Recovery, Inc.(1)
3.50 Bylaws of PD Recovery, Inc.(1)
4.1 Indenture, dated as of November 13, 2003, among the Company,
the Guarantors (as defined therein), and U.S. Bank National
Association, as Trustee (6)
4.2 Form of 9.75% Senior Notes due 2011 with Guarantees endorsed
thereon (included in Exhibit 4.1)
4.3 Registration Rights Agreement, dated as of May 6, 2004, by and
among the Company, the Guarantors (as defined therein), and the
Initial Purchaser (as defined therein)(7)
4.4 Indenture, dated as of November 13, 2003, by and between Dollar
Financial Corp. and U.S. Bank National Association, as Trustee,
with respect to Dollar Financial Corp.'s 16% Senior Notes due
2012(6)
4.5 Indenture, dated as of November 13, 2003, by and between Dollar
Financial Corp. and U.S. Bank National Association, as Trustee,
with respect to Dollar Financial Corp.'s 13.95% Senior
Subordinated Notes due 2012(7)
4.6 Form of Dollar Financial Corp.'s 16% Senior Notes due 2012
(included in Exhibit 4.4)
4.7 Form of Dollar Financial Corp.'s 13.95% Senior Subordinated
Notes due 2012 (included in Exhibit 4.5)
10.1 Dollar Financial Corp. 1999 Stock Incentive Plan(2)
10.2 [Intentionally omitted.]
10.3(a) Second Amended and Restated Credit Agreement, dated as of the
November 13, 2003, by and among Dollar Financial Group, Inc.,
Dollar Financial Corp., the lenders from time to time party
thereto, Wells Fargo Bank, National Association, as
administrative agent, U.S. Bank National Association, as
syndication agent, and Citicorp North America, Inc., as
documentation agent (the "Second Amended and Restated Credit
Agreement")(6)
10.3(b) First Amendment to Second Amended and Restated Credit
Agreement, dated as of April 12, 2004, by and among Dollar
Financial Group, Inc., Dollar Financial Corp., the lenders
currently party to the Second Amended and Restated Credit
Agreement and Wells Fargo Bank, National Association, as
administrative agent(9)
10.3(c) Form of Letter Agreement amending the Second Amended and
Restated Credit Agreement, by and among Dollar Financial Group,
Inc., Dollar Financial Corp., the lenders currently party to
the Second Amended and Restated Credit Agreement and Wells
Fargo Bank, National Association, as administrative agent(9)
10.4 Form of Pledge and Security Agreement, dated as of November 13,
2003, by and between the Guarantor (as defined therein) and
Wells Fargo Bank, National Association, as administrative agent
for itself and the lenders under the Second Amended and
Restated Credit Agreement(6)
10.5 Pledge and Security Agreement, dated as of November 13, 2003,
by and between Dollar Financial Group, Inc, and Wells Fargo
Bank, National Association, as administrative agent for itself
and the lenders under the Second Amended and Restated Credit
Agreement(6)
10.6 Form of Guarantor Subordination Agreement, dated as of November
13, 2003 by and among Dollar Financial Group, Inc., Wells Fargo
Bank, National Association, as administrative agent for the
Lenders under the Second Amended and Restated Credit Agreement,
and the Creditor (as defined therein)(6)

10.7 Form of Foreign Subsidiary Subordination Agreement, dated as of
November 13, 2003 by and among Dollar Financial Group, Inc.,
Wells Fargo Bank, National Association, as administrative agent
for the Lenders under the Second Amended and Restated Credit
Agreement, and the Creditor (as defined therein)(6)
10.8 Foreign Subsidiary Subordination Agreement, dated as of
November 13, 2003 by and among Dollar Financial Group, Inc.,
Wells Fargo Bank, National Association, as administrative agent
for the Lenders under the Second Amended and Restated Credit
Agreement, and National Money Mart Company(6)
10.9 Foreign Subsidiary Subordination Agreement, dated as of
November 13, 2003 by and among Dollar Financial Group, Inc.,
Wells Fargo Bank, National Association, as administrative agent
for the Lenders under the Second Amended and Restated Credit
Agreement, and Dollar Financial UK Limited(6)
10.10 Supplemental Security Agreement (Trademarks), dated November
13, 2003 by and between Dollar Financial Group, Inc and Wells
Fargo Bank, National Association, as administrative agent for
itself and the lenders under the Second Amended and Restated
Credit Agreement(6)
10.11 Supplemental Security Agreement (Copyrights), dated November
13, 2003 by and between Dollar Financial Group, Inc and Wells
Fargo Bank, National Association, as administrative agent for
itself and the lenders under the Second Amended and Restated
Credit Agreement(6)

87

(a)(3) Exhibits
Exhibit No. Description of Document
----------- -----------------------
10.12 Supplemental Security Agreement (Patents), dated November 13,
2003 by and between Dollar Financial Group, Inc and Wells Fargo
Bank, National Association, as administrative agent for itself
and the lenders under the Second Amended and Restated Credit
Agreement(6)
10.13 First Bank Overdraft Lending Agreement, dated as of March 1,
2001, between National Money Mart Company and Bank of
Montreal(6)
10.14 Multi Line Facility Agreement, dated January 20, 2003, by and
between Dollar Financial U.K. Limited and National Westminster
Bank Plc(6)
10.15 Form of Letter Agreement, dated October 10, 2003, by and
between Dollar Financial U.K. Limited and The Royal Bank of
Scotland Plc, as agent for National Westminster Bank Plc,
extending Multi Line Facility Agreement(6)
10.16 Form of Letter Agreement, dated October 24, 2003, by and
between Dollar Financial U.K. Limited and The Royal Bank of
Scotland Plc, as agent for National Westminster Bank Plc,
extending Multi Line Facility Agreement(6)
10.17 Form of Letter Agreement, dated November 21, 2003, by and
between Dollar Financial U.K. Limited and The Royal Bank of
Scotland Pic, as agent for National Westminster Bank Plc(6)
10.18(a) Participation and Servicing Agreement, dated November 15, 2002,
among Archbrook Holdings International, LLC, Instant Cash Loans
Limited and Dollar Financial Group, Inc.(6)
10.18(b) Termination Letter, dated June 30, 2004, among Archbrook
Holding's International, LLC, Instant Cash Loans Limited and
Dollar Financial Group, Inc.(7)
10.19(a) Intercreditor Agreement, dated as of November 13, 2003, by and
between Wells Fargo Bank, National Association, as
administrative agent, and U.S. Bank National Association, a
national banking association, as trustee for the holders of the
Notes (as defined therein) under the Indenture (as defined
therein)(6)
10.19(b) First Amendment to Intercreditor Agreement, dated as of April
12, 2004, by and between Wells Fargo Bank, National
Association, as administrative agent, and U.S. Bank National
Association, a national banking association, as trustee for the
holders of the Notes (as defined therein) under the Indenture
(as defined therein)(9)
10.20 Exchange Agreement, dated as of November 13, 2003, among Dollar
Financial Corp., GS Mezzanine Partners, L.P., GS Mezzanine
Partners Offshore, L.P, Stone Street Fund 1998, L.P, Bridge
Street Fund 1998, L.P, Ares Leveraged Investment Fund, L.P, and
Ares Leveraged Investment Fund II, L.P., with respect to Dollar
Financial Corp.'s 16% Senior Notes Due 2012(6)
10.21 Exchange Agreement, dated as of November 13, 2003, among Dollar
Financial Corp., GS Mezzanine Partners, L.P, GS Mezzanine
Partners Offshore, L.P, Stone Street Fund 1998, L.P., Bridge
Street Fund 1998, L.P., Ares Leveraged Investment Fund, L.P and
Ares Leveraged Investment Fund II, L.P, with respect to Dollar
Financial Corp.'s 13.95% Senior Subordinated Notes Due 2012(6)
10.22 Exchange and Registration Rights Agreement, dated as of
November 13, 2003, by and among Dollar Financial Corp. and GS
Mezzanine Partners, L.P. GS Mezzanine Partners Offshore, L.P.,
Stone Street Fund 1998, L.P., Bridge Street Fund 1998, L.P.,
Ares Leveraged Investment Fund, L.P., and Ares Leveraged
Investment Fund II, L.P., as the purchasers of Dollar Financial
Corp.'s 16% Senior Notes Due 2012(6)
10.23 Exchange and Registration Rights Agreement, dated as of
November 13, 2003, by and among Dollar Financial Corp. and GS
Mezzanine Partners, L.P. GS Mezzanine Partners Offshore, L.P,
Stone Street Fund 1998, L.P., Bridge Street Fund 1998, L.P,
Ares Leveraged Investment Fund, L.P., and Ares Leveraged
Investment Fund II, L.P., as the purchasers of DFG Holdings
Inc.'s 13.95% Senior Subordinated Notes Due 2012(6)
10.24(a) Amended and Restated Management Services Agreement, dated as of
November 13, 2003, by and among Dollar Financial Corp., Dollar
Financial Group, Inc. and Leonard Green & Partners, L.P(6)
10.24(b) Termination Agreement, dated as of May 26, 2004, by and among
Dollar Financial Corp., Dollar Financial Group, Inc. and
Leonard, Green & Partners, L.P(9)
10.25 Second Amended and Restated Stockholders Agreement, dated as of
November 13, 2003, by and among Green Equity Investors II,
L.P., Stone Street Fund 1998, L.P Bridge Street Fund 1998,
L.P., GS Mezzanine Partners, L.P., GS Mezzanine Partners
Offshore, L.P., Ares Leveraged Investment Fund, L.P., a
Delaware limited partnership, Ares Leveraged Investment Fund
II, L.P., a Delaware limited partnership, C.L. Jeffrey, Sheila
Jeffrey, certain stockholders signatories thereto and Dollar
Financial Corp.(6)

88

(a)(3) Exhibits
Exhibit No. Description of Document
----------- -----------------------
10.26 Amendment No. 1 to Second Amended and Restated Stockholders
Agreement, dated as of March 11, 2004, by and among Dollar
Financial Corp., Green Equity Investors 11, L.P., GS Mezzanine
Partners, L.P., GS Mezzanine Partners Offshore, L.P., Stone
Street Fund 1998, L.P., Bridge Street Fund 1998, L.P., Ares
Leveraged Investment Fund, L.P., Ares Leveraged Investment Fund
II, L.P. and Jeffrey Weiss(10)
10.27 Amendment No. 2 to Second Amended and Restated Stockholders
Agreement, dated as of April 14, 2004, by and among Dollar
Financial Corp., Green Equity Investors 11, L.P., GS Mezzanine
Partners, L.P, GS Mezzanine Partners Offshore, L.P., Stone
Street Fund 1998, L.P, Bridge Street Fund 1998, L.P, Ares
Leveraged Investment Fund, L.P., Ares Leveraged Investment Fund
II, L.P and Jeffrey Weiss(9)
10.28 Amendment No. 3 to Second Amended and Restated Stockholders
Agreement, dated as of July 6, 2004, by and among Dollar
Financial Corp., Green Equity Investors II, L.P, GS Mezzanine
Partners, L.P, GS Mezzanine Partners Offshore, L.P., Stone
Street Fund 1998, L.P., Bridge Street Fund 1998, L.P., Ares
Leveraged Investment Fund, L.P, Ares Leveraged Investment Fund
II, L.P, and Jeffrey Weiss(9)
10.29 Employment Agreement, dated as of December 19, 2003, by and
among Dollar Financial Group, Inc., Dollar Financial Corp. and
Jeffrey Weiss(9)
10.30 Employment Agreement, dated as of December 19, 2003, by and
among Dollar Financial Group, Inc., Dollar Financial Corp. and
Donald Gayhardt(9)
10.31 Employment Agreement, dated April 30, 2002, by and between
Dollar Financial Group, Inc. and Cameron Hetherington(10)
10.32 Employment Agreement, dated as of May 7, 2004, by and between
Dollar Financial UK Limited and Gillian Wilmot(9)
10.33 Employment Letter, dated June 30, 2004, by and between Dollar
Financial Corp. and Randall Underwood(7)
10.34 Secured Note, dated December 18, 1998, made by Jeffrey Weiss in
favor of Dollar Financial Group, Inc.(3)
10.35 Pledge Agreement, dated December 18, 1998, between Dollar
Financial Group, Inc. and Jeffrey Weiss(3)
10.36 Amended and Restated Nonexclusive Servicing and Indemnification
Agreement, dated June 14, 2002, between County Bank and Dollar
Financial Group, Inc.(5)
10.37 Marketing and Servicing Agreement, dated October 18, 2002,
between First Bank of Delaware and Dollar Financial Group,
Inc.(4)
10.38 Acknowledgment, dated as of November 13, 2003, to the Exchange
and Registration Rights Agreement by and among Dollar Financial
Corp. GS Mezzanine Partners, L.P., GS Mezzanine Partners
Offshore, L.P., Stone Street Fund 1998, L.P., Bridge Street
Fund 1998, L.P., Ares Leveraged Investment Fund, L.P. and Ares
Leveraged Investment Fund 11, LT with respect to Dollar
Financial Corp.'s 16% Senior Notes due 2012(6)
10.39 Acknowledgment, dated as of November 13, 2003, to the Exchange
and Registration Rights Agreement by and among Dollar Financial
Corp. GS Mezzanine Partners, L.P, GS Mezzanine Partners
Offshore, L.P, Stone Street Fund 1998, L.P, Bridge Street Fund
1998, L.P., Ares Leveraged Investment Fund, L.P. and Ares
Leveraged Investment Fund II, LT with respect to Dollar
Financial Corp.'s 13.95% Senior Subordinated Notes due 2012(6)
10.40 Amendment, dated as of November 13, 2003, to the Exchange
Agreement by and among Dollar Financial Corp. GS Mezzanine
Partners, L.P, GS Mezzanine Partners Offshore, L.P, Stone
Street Fund 1998, L.P., Bridge Street Fund 1998, L.P, Ares
Leveraged Investment Fund, L.P. and Ares Leveraged Investment
Fund II, L.P, with respect to Dollar Financial Corp.'s 16%
Senior Notes due 2012(6)
10.41 Amendment, dated as of November 13, 2003, to the Exchange
Agreement by and among Dollar Financial Corp. GS Mezzanine
Partners, L.P., GS Mezzanine Partners Offshore, L.P., Stone
Street Fund 1998, L.P, Bridge Street Fund 1998, L.P, Ares
Leveraged Investment Fund, L.P. and Ares Leveraged Investment
Fund II, L.P., with respect to Dollar Financial Corp.'s 13.95%
Senior Subordinated Notes due 2012(6)
10.42 Form of Director Indemnification Agreement(9)
21.1 Subsidiaries of the Registrant(7)
23.1 Consent of Ernst & Young LLP(8)
31.1 Certification of Principal Executive Officer Pursuant to Title
17, Code of Federal Regulations, Section 240.13a - 14(a) or
Section 240.15d - 14(a).

89

(a)(3) Exhibits
Exhibit No. Description of Document
----------- -----------------------
31.2 Certification of Principal Financial Officer Pursuant to Title
17, Code of Federal Regulations, Section 240.13a - 14(a) or
Section 240.15d - 14(a).
32.1 Certification of Principal Executive Officer Pursuant to Title
18, United States Code, Section 1350, as Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.
32.2 Certification of Principal Financial Officer Pursuant to Title
18, United States Code, Section 1350, as Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.
99.1 Form of Letter of Transmittal(8)
99.2 Form of Notice of Guaranteed Delivery(8)
99.3 Form of Letter to Brokers(8)
99.4 Form of Letter to Holders and DTC Participants(8)

(1) Incorporated by reference to the Registration Statement on Form S-4 filed by
Dollar Financial Group, Inc. on December 19, 1996 (File No. 333-18221).
(2) Incorporated by reference to the Annual Report on Form 10-K filed by Dollar
Financial Group, Inc. on September 29, 1997 (File No. 333-18221).
(3) Incorporated by reference to the Quarterly Report on Form 10-Q filed by
Dollar Financial Group, Inc. on February 16, 1999 (File No. 333-18221).
(4) Incorporated by reference to the Quarterly Report on Form 10-Q filed by
Dollar Financial Group, Inc. on February 14, 2002 (File No. 333- 18221).
(5) Incorporated by reference to the Annual Report on Form 10-K filed by Dollar
Financial Group, Inc. on October 1, 2002 (File No. 333-18221).
(6) Incorporated by reference to Amendment No. 1 to the Registration Statement
on Form S-4 filed by Dollar Financial Group, Inc. on January 14, 2004 (File No.
333-111473).
(7) Incorporated by reference to Amendment No. 1 to the Registration Statement
on Form S-4 filed by Dollar Financial Group, Inc. on September 1, 2004 (File No.
333-117179)
(8) Filed herewith.
(9) Incorporated by reference to Amendment No. 6 to the Registration Statement
on Form S-1 filed by Dollar Financial Corp. on July 26, 2004 (File No.
333-113570).
(10) Incorporated by reference to the Quarterly Report on Form 10-Q filed by
Dollar Financial Corp. on April 23, 2004 (File No. 333-111473-02).





90

(b) Reports on Form 8-K

On April 28, 2004, Dollar Financial Group, Inc. filed a Form 8-K attaching a
press release dated April 23, 2004 announcing its earnings for the three month
period ended March 31, 2004.

On April 28, 2004, Dollar Financial Group, Inc. filed a Form 8-K attaching a
transcript of an investor conference call held on April 26, 2004 discussing its
operating results for the three month period ended March 31, 2004.









91

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant named below has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Berwyn, Commonwealth of Pennsylvania on September 15, 2004.


DOLLAR FINANCIAL CORP.


By: /s/ DONALD GAYHARDT
------------------------------
Donald Gayhardt
President




DOLLAR FINANCIAL CORP.


Signature Title Date
- --------- ----- ----


/s/ JEFFREY A. WEISS Chairman of the Board of Directors September 15, 2004
- --------------------- and Chief Executive Officer --------------------
Jeffrey A. Weiss (principal executive officer)



/s/ DONALD GAYHARDT President and Director September 15, 2004
- --------------------- (principal financial and accounting --------------------
Donald Gayhardt officer)

/s/ MICHAEL KOESTER Director September 15, 2004
- --------------------- --------------------
Michael Koester

/s/ MUNEER SATTER Director September 15, 2004
- --------------------- --------------------
Muneer Satter

/s/ JONATHAN SEIFFER Director September 15, 2004
- --------------------- --------------------
Jonathan Seiffer

/s/ JONATHAN SOKOLOFF Director September 15, 2004
- --------------------- --------------------
Jonathan Sokoloff

/s/ MICHAEL SOLOMON Director September 15, 2004
- --------------------- --------------------
Michael Solomon





SUPPLMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO SECTION
15(D) OF THE ACT BY REGISTRANTS WHICH HAVE NOT REGISTERED SECURITIES PURSUANT TO
SECTION 12 OF THE ACT.

The registrant has not sent (1) any annual report to security holders
covering the registrant's last fiscal year or (2) any proxy statement, form of
proxy or other proxy soliciting material to more than 10 of the registrant's
security holders with respect to any annual or other meeting of security
holders.


92