UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

þ		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

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

Commission File Number 000-50866

DOLLAR FINANCIAL CORP.

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

1436 LANCASTER AVENUE,
BERWYN, PENNSYLVANIA 19312
(Address of Principal Executive Offices) (Zip Code)

610-296-3400
(Registrant’s Telephone Number, Including Area Code)

None
(Former name, former address and former fiscal year, if changed since last report)

Indicate by check þ 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     þ No     o

     Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o      No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, non-accelerated filer or a smaller reporting company. See definition of “large accelerated filer, accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act: (Check one):

Indicate by a check mark whether the registrant is a shell company (as defined) in Rule 12b-2 of the Exchange Act) Yes     o No     þ

As of October 31, 2009, 24,130,015 shares of the registrant’s common stock, par value $0.001 per share, were outstanding.

 

 

DOLLAR FINANCIAL CORP.
INDEX

				Page No.
PART I.		FINANCIAL INFORMATION
Item 1.		Financial Statements
		Interim Consolidated Balance Sheets as of June 30, 2009 and September 30, 2009 (unaudited)			3
		Interim Unaudited Consolidated Statements of Operations for the Three Months Ended September 30, 2009 and 2008			4
		Interim Consolidated Statements of Stockholders’ Equity as of June 30, 2009 and September 30, 2009 (unaudited)			5
		Interim Unaudited Consolidated Statements of Cash Flows for the Three Months Ended September 30, 2009 and 2008			6
		Notes to Interim Unaudited Consolidated Financial Statements			7
Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations			27
Item 3.		Quantitative and Qualitative Disclosures About Market Risk			44
Item 4.		Controls and Procedures			45
PART II.		OTHER INFORMATION
Item 1.		Legal Proceedings			46
Item 1A.		Risk Factors			47
Item 5.		Other Information			47
Item 6.		Exhibits			48
Signature					49
EX-10.1
EX-31.1
EX-31.2
EX-31.3
EX-32.1
EX-32.2
EX-32.3

     Exhibit 10.1

     Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer

     Rule 13(a)-14(a)/15d-14a Certification of Executive Vice President and Chief Financial Officer

     Rule 13a-14(a)/15d-14(a) Certification of Senior Vice President of Finance and Corporate Controller

     Section 1350 Certification of Chief Executive Officer

     Section 1350 Certification of Executive Vice President and Chief Financial Officer

     Section 1350 Certification of Senior Vice President of Finance and Corporate Controller

PART 1. FINANCIAL INFORMATION

Item 1. Financial Statements

DOLLAR FINANCIAL CORP.
INTERIM CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share amounts)

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

See notes to interim unaudited consolidated financial statements

DOLLAR FINANCIAL CORP.
INTERIM UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share amounts)

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

See notes to interim unaudited consolidated financial statements.

DOLLAR FINANCIAL CORP.
INTERIM UNAUDITED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(In thousands, except share data)

																						Accumulated
		Common Stock								Additional				Accumulated								Other				Total
		Outstanding								Paid-in				Income				Non-Controlling				Comprehensive				Stockholders’
		Shares				Amount				Capital				(Deficit)				Interest				Income (loss)				Equity
Balance, June 30, 2009 (audited)			24,102,985			$	24			$	311,301			$	(110,581	)		$	316			$	8,018			$	209,078
Comprehensive income:
Foreign currency translation																							4,522				4,522
Cash flow hedges																							(437	)			(437	)
Net income															5,273												5,273
Total comprehensive income																											9,358
Restricted stock grants			36,329
Stock options exercised			1,042				—				6																6
Vested portion of granted restricted stock and restricted stock units											543																543
Retirement of common stock			(10,341	)
Other stock compensation											825																825
Net income attributable to non-controlling interest																			58								58
Balance, September 30, 2009 (unaudited)			24,130,015			$	24			$	312,675			$	(105,308	)		$	374			$	12,103			$	219,868

See notes to interim unaudited consolidated financial statements.

DOLLAR FINANCIAL CORP.
INTERIM UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)

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

See notes to interim unaudited consolidated financial statements.

NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited interim consolidated financial statements are of Dollar Financial Corp. and its wholly owned and majority owned subsidiaries (collectively the “Company”). Dollar Financial Corp. is the parent company of Dollar Financial Group, Inc. (“OPCO”) and its wholly owned subsidiaries. The activities of Dollar Financial Corp. consist primarily of its investment in OPCO. The Company’s unaudited interim consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information, the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all information and footnotes required by GAAP for complete financial statements and should be read in conjunction with the Company’s audited consolidated financial statements in its annual report on Form 10-K (File No. 000-50866) for the fiscal year ended June 30, 2009 filed with the Securities and Exchange Commission. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results of interim periods are not necessarily indicative of the results that may be expected for a full fiscal year.

Dollar Financial Corp. is a Delaware corporation incorporated in April 1990 as DFG Holdings, Inc. The Company operates a store network through OPCO and its wholly owned and majority owned subsidiaries. Through its subsidiaries, the Company provides retail financial services and document processing services to the general public through a network of 1,188 locations (of which 1,032 are company owned) operating primarily as Money Mart^®, The Money Shop, Loan Mart^®, Insta-Cheques^®, The Check Cashing Store, American Payday Loans, American Check Casher, Cash Advance USA and We The People^® in 19 states, Canada, the United Kingdom and the Republic of Ireland. This network includes 1,149 locations (including 1,032 company-owned) in 15 states, Canada, the United Kingdom and the Republic of Ireland offering financial services including check cashing, single-payment consumer loans, sale of money orders, money transfer services and various other related services. Also, included in this network is the Company’s Poland operation acquired in June 2009 which provides financial services to the general public through in-home servicing.

The Company’s common shares are traded on the NASDAQ Global Select Market under the symbol “DLLR”.

The Company has evaluated all subsequent events through November 9, 2009, which represents the filing date of this Form 10-Q with the Securities and Exchange Commission, to ensure that this Form 10-Q includes appropriate disclosure of events both recognized in the financial statements as of September 30, 2009, and events which occurred subsequent to September 30, 2009 but were not recognized in the financial statements. As of November 9, 2009, there were no subsequent events which required accounting recognition in the financial statements. See Note 11 for a further discussion on subsequent events.

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. On an ongoing basis, management evaluates its estimates and judgments, including those related to revenue recognition, loss reserves, valuation allowance for income taxes and impairment assessment of goodwill and other intangible assets. Management bases its estimates on historical experience and various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results may differ from these estimates.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of the Company. 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. These reclassifications have no effect on net income or stockholders’ equity.

Fair Value of Financial Instruments

The fair value of the Term Loan Facilities is calculated as the sum of the present value of all contractual cash flows. The fair value of the Company’s 2.875% Senior Convertible Notes due 2027 (“Convertible Notes”) are based on broker quotations. The Company’s 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.

DOLLAR FINANCIAL CORP.

NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1. Summary of Significant Accounting Policies (continued)

Fair Value of Financial Instruments (continued)

The total fair value of the Dollar Financial Corp. 2.875% Senior Convertible Notes due 2027 was approximately $165.4 million at September 30, 2009. This fair value relates to the face value of the Senior Convertible Notes and not the carrying value recorded on the Company’s balance sheet. The total fair value of the Canadian Term Facility was approximately $248.4 million at September 30, 2009. The total fair value of the U.K. Term Facility was $73.2 million at September 30, 2009.

Earnings per Share

Basic earnings per share are computed by dividing net income by the weighted average number of common shares outstanding. Diluted earnings per share are computed by dividing net income by the weighted average number of common shares outstanding, after adjusting for the dilutive effect of stock options. The following table presents the reconciliation of the numerator and denominator used in the calculation of basic and diluted earnings per share (in thousands):

		Three Months Ended
		September 30,
		2008				2009
Net income		$	11,287			$	5,273
Reconciliation of denominator:
Weighted average of common shares outstanding — basic 1			24,178				23,998
Effect of dilutive stock options 2			164				221
Effect of unvested restricted stock and restricted stock unit grants			29				262
Weighted average of common shares outstanding — diluted			24,371				24,481

Stock Based Employee Compensation

The Company’s 2005 Stock Incentive Plan (the “2005 Plan”) states that 1,718,695 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, incentive stock options or restricted stock awards. The number of shares issued under the 2005 Plan is subject to adjustment as specified in the 2005 Plan provisions. No options may be granted under the 2005 Plan after January 24, 2015.

On November 15, 2007, the stockholders adopted the Company’s 2007 Equity Incentive Plan (the “2007 Plan”). The 2007 Plan provides for the grant of stock options, stock appreciation rights, stock awards, restricted stock unit awards and performance awards (collectively, the “Awards”) to officers, employees, non-employee members of the Board, independent consultants and contractors of the Company and any parent or subsidiary of the Company. The maximum aggregate number of shares of the Company’s common stock that may be issued pursuant to Awards granted under the 2007 Plan is 2,500,000; provided, however, that no more than 1,250,000 shares may be awarded as restricted stock or restricted stock unit awards. The shares that may be issued under the 2007 Plan may be authorized, but unissued or reacquired shares of Common Stock. No grantee may receive an Award relating to more than 500,000 shares in the aggregate per fiscal year under the 2007 Plan.

Stock options and stock appreciation rights granted under the aforementioned plans have an exercise price equal to the closing price of the Company’s common stock on the date of grant. To date no stock appreciation rights have been granted.

DOLLAR FINANCIAL CORP.

NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1. Summary of Significant Accounting Policies (continued)

Stock Based Employee Compensation (continued)

Compensation expense related to share-based compensation included in the statement of operations for the three months ended September 30, 2008 and 2009 was $0.7 million and $1.2 million, respectively, net of related tax effects.

The weighted average fair value of each employee option grant was estimated on the date of grant using the Black-Scholes option pricing model with the following weighted-average assumptions used for grants in the periods presented:

		Three Months Ended
		September 30,
		2008				2009
Expected volatility			43.9	%			55.0	%
Expected life (years)			6.0				6.0
Risk-free interest rate			3.42	%			3.30	%
Expected dividends		None				None
Weighted average fair value		$	7.84			$	8.72

A summary of the status of stock option activity for the three months ended September 30, 2009 follows:

										Weighted
						Weighted				Average
						Average				Remaining				Aggregate
						Exercise				Contractual				Intrinsic Value
		Options				Price				Term (years)				($ in millions)
Options outstanding at June 30, 2009 (911,623 shares exercisable)			1,575,184			$	14.56				7.8			$	3.0
Granted			196,246			$	15.81
Exercised			(1,042	)		$	5.82
Forfeited and expired			(1,926	)		$	17.75
Options outstanding at September 30, 2009			1,768,462			$	14.70				8.1			$	4.6
Exercisable at September 30, 2009			979,691			$	16.25				7.0			$	1.5

The aggregate intrinsic value in the above table reflects the total pre-tax intrinsic value (the difference between the Company’s closing stock price on the last trading day of the period and the exercise price of the options, multiplied by the number of in-the-money stock options) that would have been received by the option holders had all option holders exercised their options on September 30, 2009. The intrinsic value of the Company’s stock options changes based on the closing price of the Company’s stock. The total intrinsic value of options exercised for the three months ended September 30, 2009 was $0.1 million and was $1.5 million for the three months ended September 30, 2008. As of September 30, 2009, the total unrecognized compensation cost over a weighted-average period of 2.2 years, related to stock options, is expected to be $3.0 million. Cash received from stock options exercised for the three months ended September 30, 2009 and 2008 was zero and $3.3 million, respectively.

Restricted stock awards granted under the 2005 Plan and 2007 Plan become vested (i) upon the Company attaining certain annual pre-tax earnings targets (“performance-based”) and, (ii) after a designated period of time (“time-based”), which is generally three years. Compensation expense is recorded ratably over the requisite service period based upon an estimate of the likelihood of achieving the performance goals. Compensation expense related to restricted stock awards is measured based on the fair value using the closing market price of the Company’s common stock on the date of the grant.

DOLLAR FINANCIAL CORP.

NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1. Summary of Significant Accounting Policies (continued)

Stock Based Employee Compensation (continued)

Information concerning unvested restricted stock awards is as follows:

						Weighted
						Average
		Restricted				Grant-Date
		Stock Awards				Fair-Value
Outstanding at June 30, 2009			105,458			$	11.03
Vested			(231	)		$	27.04
Outstanding at September 30, 2009			105,227			$	10.99

Restricted Stock Unit awards (“RSUs”) granted under the 2005 Plan and 2007 Plan become vested after a designated period of time (“time-based”), which is generally on a quarterly basis over three years. Compensation expense is recorded ratably over the requisite service period. Compensation expense related to RSUs is measured based on the fair value using the closing market price of the Company’s common stock on the date of the grant.

Information concerning unvested restricted stock unit awards is as follows:

						Weighted
		Restricted				Average
		Stock Unit				Grant-Date
		Awards				Fair-Value
Outstanding at June 30, 2009			413,926			$	11.25
Granted			200,829			$	15.95
Vested			(36,896	)		$	18.80
Forfeited			(1,563	)		$	17.46
Outstanding at September 30, 2009			576,296			$	12.39

As of September 30, 2009, there was $7.4 million of total unrecognized compensation cost related to unvested restricted share-based compensation arrangements granted under the plans. That cost is expected to be recognized over a weighted average period of 1.5 years. The total fair value of shares vested during the three months ended September 30, 2009 was $0.7 million.

Recent Accounting Pronouncements

In December 2007, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standard Codification (“ASC”) 805-10 (formerly SFAS 141R, Business Combinations). This Statement applies to all transactions or other events in which an entity obtains control of one or more businesses, including those combinations achieved without the transfer of consideration. This Statement retains the fundamental requirements that the acquisition method of accounting be used for all business combinations. This Statement expands the scope to include all business combinations and requires an acquirer to recognize the assets acquired, the liabilities assumed, and any non-controlling interest in the acquiree at their fair values as of the acquisition date. Additionally, the Statement changes the way entities account for business combinations achieved in stages by requiring the identifiable assets and liabilities to be measured at their full fair values. The Company adopted the provisions of this Statement on July 1, 2009.

In December 2007, the FASB issued ASC 810-10 (formerly SFAS 160, Non-controlling Interests in Consolidated Financial Statements). This Statement establishes accounting and reporting standards for the non-controlling interest in a subsidiary and for the deconsolidation of a subsidiary. It clarifies that a non-controlling interest in a subsidiary is an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements. Additionally, this Statement requires that consolidated net income include the amounts attributable to both the parent and the non-controlling interest. The Company adopted the provisions of this Statement on July 1, 2009. As a result of the adoption of this standard, the Company restated all periods presented to retroactively give effect to this change.

DOLLAR FINANCIAL CORP.

NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1. Summary of Significant Accounting Policies (continued)

Recent Accounting Pronouncements (continued)

In May 2008, the FASB issued ASC 470-20 (formerly FSP APB 14-1, Accounting for Convertible Debt Instruments That May Be Settled Upon Conversion (Including Partial Cash Settlement)). The Statement requires the initial proceeds from convertible debt that may be settled in cash to be bifurcated between a liability component and an equity component. The objective of the guidance is to require the liability and equity components of convertible debt to be separately accounted for in a manner such that the interest expense recorded on the convertible debt would not equal the contractual rate of interest on the convertible debt but instead would be recorded at a rate that would reflect the issuer’s conventional debt borrowing rate. This is accomplished through the creation of a discount on the debt that would be accreted using the effective interest method as additional non-cash interest expense over the period the debt is expected to remain outstanding. The Statement was adopted by the Company on July 1, 2009 and was applied retroactively to all periods presented. Also the adoption of the Statement, reduced the Company’s debt balance by recording a debt discount of approximately $55.8 million, with an offsetting increase to additional paid in capital. Such amount will be amortized over the remaining expected life of the debt.

The Company recognized a cumulative-effect adjustment of $7,809 reducing the July 1, 2008 balance of retained earnings and reducing the carrying amount of our convertible debt to the discounted value with the discount recorded through additional paid-in capital. The retroactive application of ASC 470-20 resulted in the recognition of additional pre-tax non-cash interest expense for the three months ended September 30, 2008 of $2,098, or $0.09 per diluted share.

The following table sets forth the effect of the retrospective application of ASC 470-20 on certain reported line items:

		Three Months Ended September 30, 2008
		As Previously
Consolidated Statement of Operations		Reported				Adjustment				As Adjusted
Interest expense, net		$	9,449			$	2,098			$	11,547
Net income			13,385				(2,098	)			11,287

		June 30, 2009
		As Previously
Consolidated Balance Sheet		Reported				Adjustment				As Adjusted
Debt issuance costs, net			11,044				(1,175	)			9,869
Long-term debt			569,110				(38,685	)			530,425
Additional paid-in capital			257,385				53,916				311,301
Accumulated deficit			(94,175	)			(16,406	)			(110,581	)

The restated debt and equity components recognized for the Company’s convertible notes as of June 30, 2009 were as follows:

Principal amount of convertible notes		$	200,000
Unamortized discount (1)			38,685
Net carrying amount			161,315

In April 2009, the FASB issued ASC 825-10 (formerly FSP SFAS 107-b Disclosures about Fair Value of Financial Instruments). The Statement requires disclosures about fair value of financial instruments in interim financial statements as well as in annual financial statements. The Company adopted the provisions of the Statement for the first quarter fiscal 2010.

In June, 2009, the FASB issued ASC 105-10 (formerly SFAS 168 Accounting Standards Codification™ and the Hierarchy of Generally Accepted Accounting Principles). The Statement establishes the FASB Accounting Standards Codification™ as the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in conformity with US GAAP. The Statement is effective for financial statements issued for interim and annual periods ending after September 15, 2009, for most entities. On the effective date, all non-SEC accounting and reporting standards will be superseded. The Company has adopted this Statement for the quarterly period ended September 30, 2009, as required, and adoption has not had a material impact on the Company’s consolidated financial statements.

2. Acquisitions

The following acquisitions have been accounted for under the purchase method of accounting.

On October 17, 2008, the Company entered in a series of purchase agreements to acquire substantially all of the assets of six franchised stores from a franchisee of the Company’s wholly owned United Kingdom subsidiary. The aggregate purchase price for the acquisitions

DOLLAR FINANCIAL CORP.

NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

2. Acquisitions (continued)

was approximately $3.3 million in cash. The Company used excess cash to fund the acquisition. The company allocated a portion of the purchase price to identifiable intangible assets, reacquired franchise rights, in the amount of $2.6 million and other assets in the amount of $0.7 million. There was no excess purchase price over the preliminary fair value of identifiable assets acquired.

On April 21, 2009, the Company entered into a purchase agreement to acquire all of the shares of Express Finance Limited, a U.K. Internet-based consumer lending business. The aggregate purchase price for the acquisition was approximately $6.8 million in cash. In addition, the agreement provides for an earnings-related contingent consideration amount based on the results for the two years following the date of acquisition. No amounts have been recorded for this contingent consideration. The Company used excess cash to fund the acquisition. The Company allocated approximately $0.8 million to net assets acquired, including $2.8 million in net loans receivable. The excess purchase price over the preliminary fair value of the identifiable assets acquired was $6.0 million and was recorded as goodwill.

On June 29, 2009, the Company entered into a purchase agreement to acquire substantially all of the assets of 2 pawn shops located in Scotland from Robert Biggar Limited. The aggregate purchase price for the acquisition was approximately $8.0 million in cash. The Company used excess cash to fund the acquisition. The Company allocated approximately $3.4 million to net assets acquired. The excess purchase price over the preliminary fair value of the identifiable assets acquired was $4.6 million and was recorded as goodwill.

On June 30, 2009, the Company entered into a purchase agreement to acquire 76% of the shares of Optima, S.A., a consumer lending business in Poland. The aggregate purchase price for the acquisition was approximately $5.8 million in cash and the assumption of approximately $6.3 million in debt. The holders of the assumed debt are current shareholders of Optima. In addition, the agreement provides for an earnings-related contingent consideration amount based on the cumulative three year period following the date of acquisition. No amounts have been recorded for this contingent consideration. The Company used excess cash to fund the acquisition. The Company allocated approximately $1.3 million to net assets acquired, including $7.4 million in net loans receivable. The excess purchase price over the preliminary fair value of the identifiable assets acquired was $4.8 million and was recorded as goodwill.

During fiscal 2009, the Company completed various smaller acquisitions in the United States and the United Kingdom for a purchase price of approximately $2.1 million that resulted in an aggregate increase in goodwill of $1.5 million, calculated as the excess purchase price over the preliminary fair value of the identifiable assets acquired.

During the first quarter of fiscal 2010, there were no acquisitions, however, $0.3 million and $0.3 million of purchase accounting adjustments were made to the Robert Biggar Limited and Optima, S.A., respectively.

One of the core strategies of the Company is to capitalize on its competitive strengths and enhance its leading marketing positions. One of the key elements in the strategy is the intention to grow our network through acquisitions. The Company’s acquisitions provide it with increased market penetration or in some cases the opportunity to enter new platforms and geographies. The purchase price of each acquisition is primarily based on a multiple of historical earnings. The Company’s standard business model, and that of the industry’s, is one that does not rely heavily on tangible assets and therefore, it is common to have majority of the purchase price allocated to goodwill, or in some cases, intangibles.

DOLLAR FINANCIAL CORP.

NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

2. Acquisitions (continued)

The following reflects the change in goodwill during the periods presented (in millions):

Balance at June 30, 2008		$	419.4
Acquisitions:
Express Finance Limited			6.0
Robert Biggar Limited			4.3
Optima, S.A.			4.6
Various small acquisitions			1.5
Foreign currency adjustment			(29.3	)
Balance at June 30, 2009		$	406.5
Purchase accounting adjustments:
Robert Biggar Limited			0.3
Optima, S.A.			0.3
Foreign currency adjustment			9.0
Balance at September 30, 2009		$	416.1

The following pro forma information for the three months ended September 30, 2008 presents the results of operations as if the acquisitions had occurred as of the beginning of the period presented. The pro forma operating results include the results of these acquisitions for the indicated periods and reflect the increased interest expense on acquisition debt and the income tax impact as of the respective purchase dates of the Express Finance, Robert Biggar and Optima acquisitions. Pro forma results of operations are not necessarily indicative of the results of operations that would have occurred had the purchase been made on the date above or the results which may occur in the future.

		Three months ended
		September 30,
		2008
		(Unaudited in thousands
		except per share amounts)
Revenue		$	157,429
Net income		$	12,028
Net income per common share — basic		$	0.50
Net income per common share — diluted		$	0.49

3. Goodwill and Other Intangibles

The changes in the carrying amount of goodwill by reportable segment for the three months ended September 30, 2009 are as follows (in thousands):

		United								United
		States				Canada				Kingdom				Total
Balance at June 30, 2008		$	205,210			$	141,843			$	72,298			$	419,351
Acquisitions			5,125				51				11,287				16,463
Foreign currency translation adjustments			—				(17,441	)			(11,819	)			(29,260	)
Balance at June 30, 2009		$	210,335			$	124,453			$	71,766			$	406,554
Acquisitions and purchase accounting adjustments			257				—				264				521
Foreign currency translation adjustments			494				10,488				(1,952	)			9,030
Balance at September 30, 2009		$	211,086			$	134,941			$	70,078			$	416,105

DOLLAR FINANCIAL CORP.

NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

3. Goodwill and Other Intangibles (continued)

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

		June 30,				September 30,
		2009				2009
		Gross				Gross
		Carrying				Carrying
		Amount				Amount
Non-amortized intangible assets:
Goodwill		$	406,554			$	416,105
Reacquired franchise rights			47,793				51,150
		$	454,347			$	467,255

Goodwill is the excess of cost over the fair value of the net assets of the business acquired. Intangible assets consist of reacquired franchise rights, which are deemed to have an indefinite useful life and are not amortized.

Goodwill is tested for impairment annually as of June 30, or whenever events or changes in business circumstances indicate that an asset might be impaired. As of June 30, 2009, there was no impairment of goodwill. However, if market conditions continue to worsen or there is significant regulatory action that negatively affects our business, there can be no assurance that future goodwill impairment tests will not result in a charge to earnings.

Identified intangibles with indefinite lives are tested for impairment annually as of December 31, or whenever events or changes in business circumstances indicate that an asset may be impaired. If the estimated fair value is less than the carrying amount of the intangible assets with indefinite lives, then an impairment charge would be recognized to reduce the asset to its estimated fair value. As of December 31, 2008, there was no impairment of reacquired franchise rights. There can be no assurance that future impairment tests will not result in a charge to earnings.

The fair value of the Company’s goodwill and indefinite-lived intangible assets are estimated based upon a present value technique using discounted future cash flows. The Company uses management business plans and projections as the basis for expected future cash flows. Assumptions in estimating future cash flows are subject to a high degree of judgment. The Company makes every effort to forecast its future cash flows as accurately as possible at the time the forecast is developed. However, changes in assumptions and estimates may affect the implied fair value of goodwill and indefinite-lived intangible assets and could result in an additional impairment charge in future periods.

4. Contingent Liabilities

Due to the uncertainty surrounding the litigation process, except for those matters where an accrual has been provided for, the Company is unable to reasonably estimate the range of loss, if any, at this time in connection with the legal proceedings discussed below. While the outcome of many of these matters is currently not determinable, the Company believes it has meritorious defenses and that the ultimate cost to resolve these matters will not have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows. In addition to the legal proceedings discussed below, the Company is involved in routine litigation and administrative proceedings arising in the ordinary course of business.

The Company assesses the materiality of litigation by reviewing a range of qualitative and quantitative factors. These factors include the size of the potential claims, the merits of the Company’s defenses and the likelihood of plaintiffs’ success on the merits, the regulatory environment that could impact such claims and the potential impact of the litigation on our business. The Company evaluates the likelihood of an unfavorable outcome of the legal or regulatory proceedings to which it is a party in accordance with the “Contingencies” Topic of the FASB Codification. This assessment is subjective based on the status of the legal proceedings and is based on consultation with in-house and external legal counsel. The actual outcomes of these proceedings may differ from the Company’s assessments.

DOLLAR FINANCIAL CORP.

NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

4. Contingent Liabilities (continued)

Canadian Legal Proceedings

On August 19, 2003, a former customer in Ontario, Canada, Margaret Smith commenced an action against OPCO and the Company’s Canadian subsidiary, National Money Mart Company (“Money Mart”), on behalf of a purported class of Ontario borrowers who, Smith claims, were subjected to usurious charges in payday-loan transactions (the “Ontario Litigation”). The action, alleged violations of a Canadian federal law proscribing usury, seeks restitution and damages, including punitive damages, and seeks injunctive relief prohibiting further alleged usurious charges. The plaintiff’s motion for class certification was granted on January 5, 2007. The trial of the common issues commenced on April 27, 2009 but was suspended when the parties reached a settlement. During the fiscal quarter and fiscal year ended June 30, 2009, our Canadian subsidiary, Money Mart, recorded a charge of USD 57.4 million in relation to the pending Ontario settlement and for the potential settlement of certain of the similar class action proceedings pending in other Canadian provinces described below. There is no assurance that the Ontario settlement of a class action proceeding in the provinces of Canada will receive final Court approval or that any of the other class action proceedings will be settled. Although we believe that we have meritorious defenses to the claims in the proceedings and intend to vigorously defend against such claims, the ultimate cost of resolution of such claims, either through settlements or pursuant to litigation, may substantially exceed the amount accrued at June 30, 2009, and additional accruals may be required in the future. As of September 30, 2009, the remaining provision of approximately $53.4 million is included in the Company’s accrued expenses.

On November 6, 2003, Gareth Young, a former customer, commenced a purported class action in the Court of Queen’s Bench of Alberta, Canada on behalf of a class of consumers who obtained short-term loans from Money Mart in Alberta, alleging, among other things, that the charge to borrowers in connection with such loans is usurious. The action seeks restitution and damages, including punitive damages. On December 9, 2005, Money Mart settled this action, subject to court approval. On March 3, 2006, just prior to the date scheduled for final court approval of the settlement, the plaintiff’s lawyers advised that they would not proceed with the settlement and indicated their intention to join a purported national class action. No steps have been taken in the action since March 2006. Subsequently, Money Mart commenced an action against the plaintiff and the plaintiff’s lawyer for breach of contract. This latter action has since been resolved.

On March 5, 2007, a former customer, H. Craig Day, commenced an action against OPCO, Money Mart and several of the Company’s franchisees in the Court of Queen’s Bench of Alberta, Canada on behalf of a putative class of consumers who obtained short-term loans from Money Mart in Alberta. The allegations, putative class and relief sought in the Day action are substantially the same as those in the Young action but relate to a claim period that commences before and ends after the claim period in the Young action and excludes the claim period described in that action.

On January 29, 2003, a former customer, Kurt MacKinnon, commenced an action against Money Mart and 26 other Canadian lenders on behalf of a purported class of British Columbia residents who, MacKinnon 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. Following initial denial, MacKinnon obtained an order permitting him to re-apply for class certification of the action against Money Mart alone, which was appealed. The Court of Appeal granted MacKinnon the right to apply to the original judge to have her amend her order denying class certification. On June 14, 2006, the original judge granted the requested order and Money Mart’s request for leave to appeal the order was dismissed. The certification motion in this action proceeded in conjunction with the certification motion in the Parsons action described below.

On April 15, 2005, the solicitor acting for MacKinnon commenced a proposed class action against Money Mart on behalf of another former customer, Louise Parsons. Class certification of the consolidated MacKinnon and Parsons actions was granted on March 14, 2007. In December 2007 the plaintiffs filed a motion to add OPCO as a defendant in this action and in March 2008 an order was granted adding OPCO as a defendant. On July 25, 2008, the plaintiffs’ motion to certify the action against OPCO was granted. The action is presently in the discovery phase and a summary trial is scheduled to commence in March 2010.

Similar purported class actions have been commenced against Money Mart in Manitoba, New Brunswick, Nova Scotia and Newfoundland. OPCO is named as a defendant in the actions commenced in Nova Scotia and Newfoundland. The claims in these additional actions are substantially similar to those of the Ontario action referred to above.

DOLLAR FINANCIAL CORP.

NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

4. Contingent Liabilities (continued)

Canadian Legal Proceedings (continued)

On April 26, and August 3, 2006, two former employees, Peggy White and Kelly Arseneau, commenced companion actions against Money Mart and OPCO. The actions, which are pending in the Superior Court of Ontario, allege negligence on the part of the defendants in security training procedures and breach of fiduciary duty to employees in violation of applicable statutes. The companion lawsuits seek combined damages of C$5.0 million plus interest and costs. These claims have been submitted to the respective insurance carriers. The Company intends to defend these actions vigorously.

At this time, it is too early to determine the likelihood of an unfavorable outcome or the ultimate liability, if any, resulting from these matters.

California Legal Proceedings

On September 11, 2006, Caren Bufil commenced a lawsuit against OPCO; the claims in Bufil are substantially similar to the claims in a previously dismissed case. Bufil sought and obtained class certification of the action alleging that OPCO failed to provide non-management employees with meal and rest breaks required under California law. The suit sought an unspecified amount of damages and other relief. In September 2009, the Company was successful in settling the action, and has recorded a charge of $1.3 million. The settlement is subject to court approval and although likely, there is no assurance that such approval will occur.

On April 26, 2007, the San Francisco City Attorney (“City Attorney”) filed a complaint in the name of the People of the State of California alleging that OPCO’s subsidiaries engaged in unlawful and deceptive business practices in violation of California Business and Professions Code Section 17200 by either themselves making installment loans under the guise of marketing and servicing for co-defendant First Bank of Delaware (the “Bank”) or by brokering installment loans made by the Bank in California in violation of the prohibition on usury contained in the California Constitution and the California Finance Lenders Law and that they have otherwise violated the California Finance Lenders Law and the California Deferred Deposit Transaction Law. The complaint seeks broad injunctive relief as well as civil penalties. On January 5, 2009, the City Attorney filed a First Amended Complaint, restating the claims in the original complaint, adding OPCO as a defendant and adding a claim that short-term deferred deposit loans made by the Bank, which were marketed and serviced by OPCO and/or its subsidiaries violated the California Deferred Deposit Transaction law. OPCO and its subsidiaries have denied the allegations of the First Amended Complaint. Discovery is proceeding in state court and no trial date has been set. At this time, it is too early to determine the likelihood of an unfavorable outcome or the ultimate liability, if any, resulting from this case.

We The People Legal Proceedings

The Company’s business model for its legal document processing services business is being challenged in certain courts, as described below, which could result in the Company’s discontinuation of these services in any one or more jurisdictions. The company from which the Company bought the assets of its WTP business, We The People Forms and Service Centers USA, Inc. (the “Former WTP”), certain of its franchisees and/or WTP are defendants in various lawsuits. The principal litigation for the WTP business unit is as follows:

In May 2007, WTP met with the New York State Attorney General’s Office, Consumer Affairs Division, which had been investigating WTP operation in the New York City area for over three years. The Attorney General’s Office alleged that WTP engaged in unfair business practices, including deceptive advertising that harmed New York consumers. The Attorney General’s Office demanded that WTP enter into an Agreed Order of Discontinuance (“AOD”) and demanded WTP pay a fine of approximately $0.3 million, plus investigation costs. WTP denied the allegations and requested that the Attorney General’s Office hold the former New York City WTP owners liable for the alleged misconduct. The terms of the AOD are in negotiation.

In May 2007, WTP franchisee Roseann Pennisi and her company, We The People of Westchester Square, New York, Inc., sued the Company, Ira and Linda Distenfield, IDLD Inc., and WTP in the Supreme Court of the State of New York, Bronx County. The complaint alleges breach of franchise agreement, tortious interference with franchise agreement, breach of the covenant of good faith and fair dealing, unfair competition against defendants and breach of contract and deception and misrepresentation, unjust enrichment, fraudulent concealment of material facts against the Distenfields and IDLD, Inc. and seeks over $9.0 million in damages. Following a successful motion by WTP to compel arbitration of the plaintiffs’ claims, in October 2008, the plaintiff filed a request to arbitrate with relief requested in the amount of $0.4 million. In August 2009, plaintiff amended her petition to arbitrate and increased it to $650,000.

DOLLAR FINANCIAL CORP.

NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

4. Contingent Liabilities (continued)

We The People Legal Proceedings (continued)

The Company believes the material allegations in the complaint with respect to the Company and WTP are without merit and intends to defend the matter vigorously.

In September 2007, Jacqueline Fitzgibbons, who claims to be a former customer of a WTP store, commenced a lawsuit against the Company and others in California Superior Court for Alameda County. The suit alleges on behalf of a putative class of consumers and senior citizens that, from 2003 to 2007, We The People violated California law by advertising and selling living trusts and wills to certain California residents. Fitzgibbons claims, among other things, that the Company and others improperly conspired to provide her with legal advice, misled her as to what, if any, legitimate service We The People provided in preparing documents, and misled her regarding the supervising attorneys’ role in preparing documents. The plaintiff is seeking class certification, prohibition of the Company’s alleged unlawful business practices, and damages on behalf of the class in the form of disgorgement of all monies and profits obtained from unlawful business practices, general and special damages, attorneys’ fees and costs of the suit, statutory and tremble damages pursuant to various California business, elder abuse, and consumer protection codes. The complaint has been amended several times to add new parties and additional claims. The Court granted, in part, the Company’s motion to dismiss certain claims alleged by the plaintiffs. In January 2009, an individual named Robert Blau replaced Fitzgibbons as lead plaintiff. A motion to certify the class was heard on October 19, 2009 and, in a tentative ruling, the court denied Plaintiffs’ motion for class certification of claims for fraud, false advertising and violations of the Consumer Legal Remedies Act. However, the Court tentatively granted class certification of the claim that alleges that We The People’s services and business model violate certain unfair competition laws in California. The Court invited oral argument and a final ruling is expected to be issued shortly. The Company is defending these allegations vigorously and believes that the claims and the assertion of class status are without merit.

In August 2008, a group of six former We The People customers commenced a lawsuit in St. Louis County, Missouri against the Company, its subsidiary, We The People USA, Inc. and WTP franchisees offering services to Missouri consumers. The plaintiffs allege, on behalf of a putative class of over 1,000 consumers that, from 2002 to the present, defendants violated Missouri law by engaging in: (i) an unauthorized law business; (ii) the unauthorized practice of law; and (iii) unlawful merchandising practices in the sale of its legal documents. The plaintiffs are seeking class certification, prohibition of the defendants’ unlawful business practices, and damages on behalf of the class in the form of disgorgement of all monies and profits obtained from unlawful business practices, attorney’s fees, statutory and treble damages pursuant to various Missouri consumer protection codes. In November 2008, the original six plaintiffs were dismissed by plaintiffs’ counsel and the initial complaint was also later dismissed. In January 2009, former WTP customers, Philip Jones and Carol Martin, on behalf of a punitive class of Missouri customers, filed a lawsuit in St. Louis County against the Company and its subsidiary, We The People USA, Inc., and a St. Louis WTP franchisee entity alleging claims similar to the initial August 2008 suit. These new plaintiffs also seek class certification. The Company intends to defend these allegations and believes that the plaintiffs’ claims and allegations of class status are without merit.

On January 14, 2009, a demand for arbitration was made on behalf of Thomas Greene and Rebecca M. Greene, We The People franchisees, against We The People USA, Inc., We The People LLC and the Company. The demand alleged violations by We The People of certain state and federal franchise laws relating to (1) failure to register the franchise as a business opportunity with the Utah Division of Consumer Protection; (2) earnings claims representations and (3) failure to provide a disclosure document meeting the substantive and timing requirements mandated by the Utah Business Opportunity Act. The Greenes are demanding $425,000 for losses relating to the violations. WTP and the Company believe the allegations are without merit and intend to defend the matter vigorously.

In June 2009, a demand for arbitration was filed by a current We The People franchisee, Frank Murphy, Jr., against the Company’s subsidiaries, We The People USA, Inc., and We The People LLC. The demand alleges violations by We The People of certain obligations under the Franchise Agreement and seeks $1.0 million for losses relating to these violations. WTP believes the allegations are without merit and intends to defend the matter vigorously.

In January 2009, the Company learned that Ira and Linda Distenfield had filed a joint voluntary petition under Chapter 7 of the U.S. Bankruptcy Code. In addition to delaying the ultimate resolution of many of the foregoing matters, the economic effect of this filing and, in particular, its effect on the Company’s ability to seek contribution from its co-defendants in connection with any of the foregoing matters, cannot presently be estimated.

DOLLAR FINANCIAL CORP.

NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

4. Contingent Liabilities (continued)

We The People Legal Proceedings (continued)

It is the Company’s opinion that many of the WTP related litigation matters relate to actions undertaken by the Distenfields, IDLD, Inc. and the Former WTP during the period of time when they owned or managed We The People Forms and Service Centers USA, Inc.; this period of time was prior to the acquisition of the assets of the Former WTP by the Company. However, in many of these actions, the Company and WTP have been included as defendants in these cases as well. At this time, it is too early to determine the likelihood of an unfavorable outcome or the ultimate liability, if any, of any of the aforementioned matters against WTP or the Company or any other Company litigation as well.

In addition to the matters described above, the Company continues to respond to inquiries it receives from state bar associations and state regulatory authorities from time to time as a routine part of its business regarding its legal document processing services business and its WTP franchisees.

5. Capital Stock

On July 21, 2008, the Company announced that its Board of Directors had approved a stock repurchase plan, authorizing the Company to repurchase in the aggregate up to $7.5 million of its outstanding common stock, which is the maximum amount of common stock the Company can repurchase pursuant to the terms of its credit facility.

Under the plan authorized by its Board of Directors, the Company was permitted to repurchase shares in open market purchases or through privately negotiated transactions as permitted under Securities Exchange Act of 1934 Rule 10b-18. The extent to which the Company repurchased its shares and the timing of such repurchases depended upon market conditions and other corporate considerations, as determined by the Company’s management. The purchases were funded from existing cash balances.

By October 13, 2008, the Company had repurchased 535,799 shares of its common stock at a cost of approximately $7.5 million, thus completing its stock repurchase plan.

6. Fair Value Measurements

The Fair Value Measurements and Disclosures Topic of the FASB Codification specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. In general, fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access. Level 2 inputs include quoted prices for similar assets and liabilities in active markets and inputs other than quoted prices that are observable for the asset or liability. Level 3 inputs are unobservable inputs for the asset or liability and include situations where there is little, if any, market activity for the asset or liability. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value in its entirety requires judgment and considers factors specific to the asset or liability.

Currently, the Company uses foreign currency options and cross currency interest rate swaps to manage its interest rate and foreign currency risk. The valuation of these instruments is determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity and uses observable market-based inputs, including interest rate curves, foreign exchange rates and implied volatilities. The Company incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of its derivative contracts for the effect of nonperformance risk, the Company has considered the impact of netting and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts, and guarantees. Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by itself and its counterparties. However, as of September 30, 2009, the Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustments are not significant to the overall valuation of its derivatives. As a result, the Company has determined that its derivative valuations in their entirety are classified in

DOLLAR FINANCIAL CORP.

NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

6. Fair Value Measurements (continued)

Level 2 of the fair value hierarchy.

The table below presents the Company’s assets and liabilities measured at fair value on a recurring basis as of September 30, 2009, aggregated by the level in the fair value hierarchy within which those measurements fall.

Assets and Liabilities Measured at Fair Value on a Recurring Basis at September 30, 2009
( in thousands)

		Quoted Prices in
		Active Markets				Significant
		for Identical				Other				Significant				Balance at
		Assets and				Observable				Unobservable				September 30,
		Liabilities (Level 1)				Inputs (Level 2)				Inputs (Level 3)				2009
Assets
Derivative financial instruments		$	—			$	324			$	—			$	324
Liabilities
Derivative financial instruments		$	—			$	36,239			$	—			$	36,239

The Company does not have any fair value measurements using significant unobservable inputs (Level 3) as of September 30, 2009.

7. Segment Information

The Company categorizes its operations into three operating segments that have been identified giving consideration to geographic area, product mix and regulatory environment. The primary service offerings in all operating segments are check cashing, single-payment consumer loans, money orders, money transfers and other ancillary services. As a result of the mix of service offerings and diversity in the respective regulatory environments, there are differences in each operating segment’s profit margins. The Company’s operations in Poland are included within the United States segment. Additionally, the United States operating segment includes all corporate headquarters expenses that have not been charged out to the operating segments in the United States, Canada and United Kingdom. This factor also contributes to the lower pre-tax results reported in this segment. Those unallocated corporate headquarters expenses are $1.7 million for the three months ended September 30, 2008 and $2.3 million for the three months ended September 30, 2009.

DOLLAR FINANCIAL CORP.

NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

7. Segment Information (continued)

All operations for which segment data is presented below are principally in one industry (check cashing, consumer lending and ancillary services) (in thousands):

		United								United
		States				Canada				Kingdom				Total
As of and for the three months ended September 30, 2008
Total assets		$	284,813			$	461,286			$	172,102			$	918,201
Goodwill and other intangibles, net			205,509				182,058				67,781				455,348
Sales to unaffiliated customers:
Check cashing			14,437				20,543				13,552				48,532
Fees from consumer lending			22,803				37,197				21,498				81,498
Money transfer fees			1,592				4,409				1,609				7,610
Franchise fees and royalties			538				639				—				1,177
Other			2,860				7,525				3,874				14,259
Total sales to unaffiliated customers			42,230				70,313				40,533				153,076
Provision for loan losses			6,978				5,895				2,378				15,251
Interest expense, net			6,362				3,267				1,918				11,547
Depreciation and amortization			1,457				1,716				1,459				4,632
Provision for litigation settlements			509				—				—				509
Loss on store closings			2,647				2,291				—				4,938
Other income, net			—				(182	)			(76	)			(258	)
Income before income taxes			(10,965	)			18,650				8,828				16,513
Income tax provision			(51	)			3,171				2,106				5,226

		United								United
		States				Canada				Kingdom				Total
As of and for the three months ended September 30, 2009
Total assets		$	276,685			$	503,549			$	176,072			$	956,306
Goodwill and other intangibles, net			211,382				180,151				75,722				467,255
Sales to unaffiliated customers:
Check cashing			10,906				17,339				9,557				37,802
Fees from consumer lending			19,156				35,216				24,617				78,989
Money transfer fees			1,276				4,048				1,499				6,823
Franchise fees and royalties			355				587				—				942
Other			2,502				6,932				7,818				17,252
Total sales to unaffiliated customers			34,195				64,122				43,491				141,808
Provision for loan losses			4,206				3,771				3,719				11,696
Interest expense, net			4,656				5,369				1,599				11,624
Depreciation and amortization			1,292				1,578				1,556				4,426
Unrealized foreign exchange loss (gain)			13				(89	)			7,903				7,827
Provision for litigation settlements			1,267				—				—				1,267

DOLLAR FINANCIAL CORP.

NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

7. Segment Information (continued)

		United								United
		States				Canada				Kingdom				Total
Loss on store closings			174				208				(64	)			318
Other expense (income), net			218				(29	)			(29	)			160
(Loss) income before income taxes			(7,495	)			18,259				2,533				13,297
Income tax provision			1,334				5,755				877				7,966

8. Derivative Instruments and Hedging Activities

Risk Management Objective of Using Derivatives

The Company is exposed to certain risk arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity, and credit risk primarily by managing the amount, sources, and duration of its debt funding and by the use of derivative financial instruments. Specifically, certain of the Company’s foreign operations in the United Kingdom and Canada expose the Company to fluctuations in interest rates and foreign exchange rates. These fluctuations may impact the value of the Company’s cash receipts and payments in terms of the Company’s functional currency because the debt is denominated in a currency other than the subsidiary’s functional currency. The Company enters into derivative financial instruments to protect the value or fix the amount of certain obligations in terms of its functional currency, the U.S. Dollar.

Cash Flow Hedges of Foreign Exchange Risk

Operations in the United Kingdom and Canada have exposed the Company to changes in the CAD-USD and GBP-USD foreign exchange rates. From time to time, the Company’s U.K. and Canadian subsidiaries purchase investment securities denominated in a currency other than their functional currency. The subsidiaries hedge the related foreign exchange risk typically with the use of out of the money put options because they cost less than completely averting risk using at the money put options, and the maximum loss is limited to the purchase price of the contracts.

The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges of foreign exchange risk is recorded in other comprehensive income and subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. The ineffective portion of the change in fair value of the derivative, as well as amounts excluded from the assessment of hedge effectiveness, is recognized directly in earnings. As of September 30, 2009, the Company had the following outstanding foreign currency derivatives that were used to hedge its foreign exchange risks for the months of October, November and December:

Foreign Currency Derivates		Notional				Notional
		Sold				Purchased
CAD Put/USD Call Options			C$10,500,000			$	9,705,825
GBP Put/USD Call Options		GBP3,900,000				$	6,435,000

Cash Flow Hedges of Multiple Risks

The Company has foreign subsidiaries in the United Kingdom and Canada with variable-rate borrowings denominated in currencies other than the foreign subsidiaries’ functional currencies. The foreign subsidiaries are exposed to fluctuations in both the underlying variable borrowing rate and the foreign currency of the borrowing against its functional currency. The foreign subsidiaries use foreign currency derivatives including cross-currency interest rate swaps to manage its exposure to fluctuations in the variable borrowing rate and the foreign exchange rate. Cross-currency interest rate swaps involve both periodically (1) exchanging fixed rate interest payments for floating rate interest receipts and (2) exchanging notional amounts which will occur at the forward exchange rates in effect upon entering into the instrument. The derivatives are designated as cash flow hedges of both interest rate and foreign exchange risks.

The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges of both interest rate risk and foreign exchange risk is recorded in other comprehensive income and is subsequently reclassified into earnings in the period that the

DOLLAR FINANCIAL CORP.

NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

8. Derivative Instruments and Hedging Activities (continued)

hedged forecasted transaction affects earnings. The ineffective portion of the change in fair value of the derivative is recognized directly in earnings.

On May 7, 2009, the Company executed an early settlement of its two cross-currency interest rate swaps hedging variable-rate borrowings at its foreign subsidiary in the United Kingdom. As a result, the Company discontinued prospectively hedge accounting on these cross-currency swaps. In accordance with the Derivatives and Hedging Topic of the FASB Codification, the Company will continue to report the net gain or loss related to the discontinued cash flow hedge in other comprehensive income included in shareholders’ equity and will subsequently reclassify such amounts into earnings over the remaining original term of the derivative when the hedged forecasted transactions are recognized in earnings.

As of September 30, 2009, the Company had the following outstanding derivatives that were used to hedge both interest rate risk and foreign exchange risk:

		Pay Fixed				Pay Fixed Strike				Receive Floating				Receive Floating
Foreign Currency Derivates		Notional				Rate				Notional				Index
USD-CAD Cross Currency Swap		CAD184,029,651					7.135	%		$	160,050,000			3 mo. LIBOR + 2.75% per annum
USD-CAD Cross Currency Swap		CAD61,614,448					7.130	%		$	53,350,000			3 mo. LIBOR + 2.75% per annum
USD-CAD Cross Currency Swap		CAD84,055,350					7.070	%		$	72,750,000			3 mo. LIBOR + 2.75% per annum

Tabular Disclosures

The table below presents the fair values of the Company’s derivative financial instruments on the Consolidated Balance Sheet as of September 30, 2009 (in thousands).

Tabular Disclosure of Fair Values of Derivative Instruments(1)

Asset Derivatives

Liability Derivatives

As of September 30, 2009

As of September 30, 2009

Balance Sheet

Balance Sheet

Location

Fair Value

Location

Fair Value

Derivatives designated as hedging instruments

Foreign Exchange Contracts

Prepaid Expenses

$

324

Other Liabilities

$

—

Cross Currency Swaps

Derivatives

Derivatives

36,239

Total derivatives designated as hedging instruments

$

324

$

36,239

DOLLAR FINANCIAL CORP.

NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

8. Derivative Instruments and Hedging Activities (continued)

The tables below present the effect of the Company’s derivative financial instruments on the Consolidated Statement of Operations for the period ending September 30, 2009 (in thousands).

Location of Gain or

Amount of Gain or

(Loss) Recognized

(Loss) Recognized

Amount of Gain or

in Income on

in Income on

(Loss) Recognized

Derivative

Derivative

in OCI on

Location of Gain or

Amount of Gain or

(Ineffective

(Ineffective

Derivative

(Loss) Reclassified

(Loss) Reclassified

Portion and Amount

Portion and Amount

Derivatives in SFAS 133

(Effective

from Accumulated

from Accumulated

Excluded from

Excluded from

Cash Flow Hedging

Portion), net of

OCI into Income

OCI into Income

Effectiveness

Effectiveness

Relationships

tax

(Effective Portion)

(Effective Portion)

Testing)

Testing)

Foreign Exchange Contracts

$

(46

)

Foreign currency gain / (loss)

$

—

Other income /(expense)

$

—

Interest Expense

(364

)

Other income /(expense)

9

Cross Currency Swaps

649

Corporate Expenses

102

Total

$

603

$

(262

)

$

9

Tabular Disclosure of the Effect of Derivative Instruments on the Consolidated Statement of Operations for the Three Months Ending September 30, 2008

Location of Gain or

Amount of Gain or

(Loss) Recognized

(Loss) Recognized

Amount of Gain or

in Income on

in Income on

(Loss) Recognized

Derivative

Derivative

in OCI on

Location of Gain or

Amount of Gain or

(Ineffective

(Ineffective

Derivative

(Loss) Reclassified

(Loss) Reclassified

Portion and Amount

Portion and Amount

Derivatives in SFAS 133

(Effective

from Accumulated

from Accumulated

Excluded from

Excluded from

Cash Flow Hedging

Portion), net of

OCI into Income

OCI into Income

Effectiveness

Effectiveness

Relationships

tax

(Effective Portion)

(Effective Portion)

Testing)

Testing)

Foreign Exchange Contracts

$

579

Foreign currency gain / (loss)

$

—

Other income / (expense)

$

—

Interest Expense

—

Other income / (expense)

—

Cross Currency Swaps

5,122

Corporate Expenses

—

Total

$

5,701

$

—

$

—

NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

8. Derivative Instruments and Hedging Activities (continued)

Credit-risk-related Contingent Features

The Company has agreements with each of its derivative counterparties that contain a provision where if the Company defaults on any of its indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, then the Company could also be declared in default on its derivative obligations

The Company’s agreements with its derivative counterparties also contain provisions requiring it to maintain certain minimum financial covenant ratios related to its indebtedness. Failure to comply with the covenant provisions would result in the Company being in default on any derivative instrument obligations covered by the agreement.

As of September 30, 2009, the fair value of derivatives is in a net liability position of $48.4 million. This amount includes accrued interest but excludes the adjustment for nonperformance risk related to these agreements. As of September 30, 2009, the Company has not posted any collateral related to the agreements. If the Company breached any of these provisions it would be required to settle its obligations under the agreements at their termination value of $48.5 million.

9. Comprehensive Income

Comprehensive income is the change in equity from transactions and other events and circumstances from non-owner sources, which includes foreign currency translation and fair value adjustments for cash flow hedges. The following shows the comprehensive income for the periods stated (in thousands):

		Three months ended
		September 30,
		2008				2009
Net income		$	11,287			$	5,273
Foreign currency translation adjustment(1)			(11,196	)			4,522
Fair value adjustments for cash flow hedges, net(2)(3)			3,341				(437	)
Total comprehensive income		$	3,432			$	9,358

Accumulated other comprehensive income, net of related tax, consisted of net unrealized losses on put options designated as cash flow hedges of $8 thousand, $10.1 million of net unrealized losses on cross-currency interest rate swaps designated as cash flow hedging transactions and unrealized losses on terminated cross-currency interest rate swaps of $1.9 million at September 30, 2009, compared to net unrealized losses on put options designated as cash flow hedges of $0.4 million and net unrealized losses on cross-currency interest rate swaps designated as cash flow hedging transactions of $0.9 million at September 30, 2008.

NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

10. Income Taxes

Income Tax Provision

The provision for income taxes was $8.0 million for the three months ended September 30, 2009 compared to a provision of $5.2 million for the three months ended September 30, 2008. The Company’s effective tax rate was 59.9% for the three months ended September 30, 2009 and was 31.6% for the three months ended September 30, 2008. The effective tax rate for the three months ended September 30, 2008 was reduced as a result of the impact of a favorable settlement granted in a competent authority tax proceeding between the United States and Canadian tax authorities related to transfer pricing matters for years 2000 through 2003 combined with an adjustment to the Company’s reserve for uncertain tax benefits related to years for which a settlement has not yet been received. The impact to the Company’s three months fiscal 2009 provision for income taxes related to these two items was a tax benefit of $3.5 million. The Company’s effective tax rate differs from the federal statutory rate of 35% due to foreign taxes, permanent differences and a valuation allowance on U.S. and foreign deferred tax assets and the aforementioned changes to the Company’s reserve for uncertain tax positions. Prior to the global debt restructuring in the Company’s fiscal year ended June 30, 2007, interest expense in the U.S. resulted in U.S. tax losses, thus generating deferred tax assets. At September 30, 2009 the Company maintained deferred tax assets of $118.0 million which is offset by a valuation allowance of $92.0 million of which $2.2 million was provided for in the period. The change for the period in the Company’s deferred tax assets and valuation allowances is presented in the table below and more fully described in the paragraphs that follow.

Change in Deferred Tax Assets and Valuation Allowances (in millions):

		Deferred				Valuation				Net Deferred
		Tax Asset				Allowance				Tax Asset
Balance at June 30, 2009		$	116.9			$	89.8			$	27.1
U.S. increase/(decrease)			2.0				2.1				(0.1	)
Foreign increase/(decrease)			(0.9	)			0.1				(1.0	)
Balance at September 30, 2009		$	118.0			$	92.0			$	26.0

The $118.0 million in deferred tax assets consists of $45.1 million related to net operating losses and the reversal of temporary differences, $45.4 million related to foreign tax credits and $27.5 million in foreign deferred tax assets. At September 30, 2009, U.S. deferred tax assets related to net operating losses and the reversal of temporary differences were reduced by a valuation allowance of $45.1 million, which reflects an increase of $2.0 million during the period. The net operating loss carry forward at September 30, 2009 was $105.9 million. The Company believes that its ability to utilize net operating losses in a given year will be limited to $9.0 million under Section 382 of the Internal Revenue Code (the “Code”) because of changes of ownership resulting from the Company’s June 2006 follow-on equity offering. In addition, any future debt or equity transactions may reduce the Company’s net operating losses or further limit its ability to utilize the net operating losses under the Code. The deferred tax asset related to excess foreign tax credits is also fully offset by a valuation allowance of $45.4 million. Additionally, the Company maintains foreign deferred tax assets in the amount of $27.5 million. Of this amount $1.4 million was recorded by the Company’s Canadian affiliate during fiscal 2008 related to a foreign currency loss sustained in connection with the hedge of its term loan. This deferred tax asset was offset by a full valuation allowance of $1.4 million since the foreign currency loss is capital in nature and at this time the Company has not identified any potential for capital gains against which to offset the loss.

As described in Note 1 to this financial statement, the Company restated its historical financial statements in connection with the adoption of ASC 470-20 (formerly FSP APB 14-1). The adoption of this standard required the Company to establish an initial deferred tax liability related to its 2.875% convertible notes (the Notes), which represents the tax effect of the book/tax basis difference created at adoption. The deferred tax liability will reverse as the Note discount accretes to zero over the expected life of the Notes. The deferred tax liability associated with the Notes serves as a source of recovery of the Company’s deferred tax assets, and therefore the restatement also required the reduction of the previously recorded valuation allowance on the deferred tax asset. Because the Company historically has recorded and continues to record a valuation allowance on the tax benefits associated with its US subsidiary losses, the reversal of the deferred tax liability associated with the Notes, which is recorded as a benefit in the deferred income tax provision, is offset by an increase in the valuation allowance. At September 30, 2009, the deferred tax liability associated with the Notes was $12.7 million.

At June 30, 2009, the Company had unrecognized tax benefit reserves related to uncertain tax positions of $7.8 million which, if recognized, would decrease the effective tax rate. At September 30, 2009, the Company had $8.7 million of unrecognized tax benefits primarily related to transfer pricing matters, which if recognized, would decrease its effective tax rate.

The tax years ending June 30, 2005 through 2009 remain open to examination by the taxing authorities in the United States, United Kingdom and Canada.

NOTES TO INTERIM UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

10. Income Taxes (continued)

The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. As of September 30, 2009, the Company had approximately $0.6 million of accrued interest related to uncertain tax positions which represents a minimal increase during the three months ended September 30, 2009. The provision for unrecognized tax benefits including accrued interest is included in income taxes payable.

11. Subsequent Events

On October 2, 2009 the Company entered into an agreement to acquire a merchant cash advance business in the United Kingdom. The acquired company primarily provides working capital needs to small retail businesses by providing cash advances against a percentage of future credit card sales. The purchase price for the acquired company, which currently manages a receivable portfolio of approximately $3.0 million, was $4.9 million.

On October 28, 2009 the Company entered into an agreement to acquire Military Financial Services, LLC (“MFS”). MFS is an established business that provides services to active military personnel to obtain auto loans in the United States made by a third-party national bank. The third-party national bank approves the loan application, funds and services the loans and bears the credit risks. The purchase price payable by the Company is approximately $118 million, as adjusted to reflect the working capital of MFS and its subsidiaries as of the closing date as provided in the purchase agreement. The consummation of the acquisition is subject to the consent of the Company’s lenders under its current senior credit facility, the procurement by the Company and its subsidiaries of sufficient financing and the satisfaction of other customary closing conditions. The Company expects to complete the acquisition in December 2009, however there is no assurance that the acquisition will be consummated at that time or thereafter. The purchase agreement may be terminated by the Company or the sellers at any time after December 31, 2009 due to a failure to satisfy any of the closing conditions.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following is a discussion and analysis of the financial condition and results of operations for Dollar Financial Corp. for the three months ended September 30, 2009 and 2008. References in this section to “we,” “our,” “ours,” or “us” are to Dollar Financial Corp. and its wholly owned subsidiaries, except as the context otherwise requires. References to “OPCO” are to our wholly owned operating subsidiary, Dollar Financial Group, Inc.

Executive Summary

We are the parent company of Dollar Financial Group, Inc., which, together with its wholly owned subsidiaries, is collectively referred to as OPCO. Historically, we have derived our revenues primarily from providing check cashing services, consumer lending and other consumer financial products and services, including money orders, money transfers, foreign currency exchange, branded debit cards, pawn lending, gold buying 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 interest and fees on the loans.

Most of our retail financial service locations issue single-payment consumer loans on the company-funded consumer loan model. In August 2007, we launched an internet single-payment loan site for residents of California and, in February 2008, for Arizona residents. During fiscal 2009, we acquired an established profitable U.K. Internet-based consumer lending business which was immediately accretive to earnings. The acquired company is competitively positioned in a rapidly growing market and further expands our expertise within the Internet lending arena. We believe we can export and leverage this expertise to other European countries as well as our Canadian business operations.

On June 30, 2008, as part of a process to rationalize our United States markets, we made a determination to close 24 of our unprofitable stores in various United States markets. In August 2008, we identified another 30 stores in the United States and 17 stores in Canada that were under-performing and which were closed or merged into a geographically proximate store. The primary cease-use date for these stores was in September 2008. Customers from these stores were transitioned to our other stores in close proximity to the stores affected. We recorded costs for severance and other retention benefits of $0.6 million and store closure costs of $4.9 million consisting primarily of lease obligations and leasehold improvement write-offs. Subsequent to the initial expense amounts recorded, we have recorded an additional $0.9 million of additional lease obligation expense for these locations. During the fourth quarter of fiscal 2009 we announced the closing of an additional 60 under-performing U.S. store locations. We recorded costs for severance and other retention benefits of approximately $0.4 million and store closure related costs of approximately $3.2 million consisting primarily of lease obligations and leasehold improvement write-offs. During the first quarter of fiscal 2010 we recorded an additional $0.3 million of store closure related costs. The closure of stores in the United States and Canada did not result in any impairment of goodwill since the store closures will be accretive to cash flow.

On July 21, 2008, we announced that our Board of Directors had approved a stock repurchase plan, authorizing us to repurchase in the aggregate up to $7.5 million of our outstanding common stock, which is the maximum amount of common stock we can repurchase pursuant to the terms of our credit facility. By October 13, 2008, we had repurchased 535,799 shares of our common stock at a cost of approximately $7.5 million, thus completing our stock repurchase plan.

On April 21, 2009 we completed the acquisition of an established profitable U.K. internet-based consumer lending business which is immediately accretive. The acquired company is competitively positioned in a rapidly growing market and further expands our expertise within the internet lending arena. Moreover, we believe we can export and leverage this expertise to other European countries as well as our Canadian business unit.

On June 30, 2009, we completed the acquisition of four stores in Northern Ireland. Three of the stores reside in central Belfast with the fourth store situated in the town of Lisburn, the third largest city in Northern Ireland. The acquired stores are multi-product locations offering check cashing, payday lending, and pawn broking services.

On June 30, 2009, we completed the acquisition of two market leading traditional pawn shops located in Edinburgh and Glasgow, Scotland. The two stores were established in the year 1830 and primarily deal in loans securitized by gold jewelry and fine watches, while offering traditional secured pawn lending for an array of other items. Both stores are located in prominent locations on major thoroughfares and high pedestrian traffic zones.

On June 30, 2009, we completed the acquisition of 76% of the outstanding equity of an established consumer lending business in Poland. The acquired company, Optima, S.A., founded in 1999 and headquartered in Gdansk, offers unsecured loans of generally 40 — 50 week durations with an average loan amount of $250 to $500. The loan transaction includes a convenient in-home servicing feature, whereby loan disbursement and collection activities take place in the customer’s home according to a mutually agreed upon and pre-arranged schedule. The in-home loan servicing concept is well accepted within Poland and Eastern Europe, and was initially established in the U.K. approximately 100 years ago. Customer sales and service activities are managed through an extensive network of local commission based representatives across five provinces in northwestern Poland.

During the fiscal quarter and fiscal year ended June 30, 2009, our Canadian subsidiary, Money Mart, recorded a charge of US$57.4 million in relation to the pending settlement of a class action proceeding in the province of Ontario, Canada and for the potential settlement of certain of the similar class action proceedings pending in other Canadian provinces. There is no assurance that the settlement of a class action proceeding in the provinces of Canada will receive final Court approval or that any of the other class action proceedings will be settled. Although we believe that we have meritorious defenses to the claims in the proceedings and intend to vigorously defend against such claims, the ultimate cost of resolution of such claims, either through settlements or pursuant to litigation, may substantially exceed the amount accrued, and additional accruals may be required in the future. As of September 30, 2009, the remaining provision of approximately $53.4 million is included in our accrued expenses.

Our expenses primarily relate to the operations of our store network, including the provision for loan losses, 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.

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

On October 2, 2009 the Company entered into an agreement to acquire a merchant cash advance business in the United Kingdom. The acquired company primarily provides working capital needs to small retail businesses by providing cash advances against a percentage of future credit card sales. The purchase price for the acquired company, which currently manages a receivable portfolio of approximately $3.0 million, was $4.9 million.

On October 28, 2009, the Company entered into an agreement to acquire Military Financial Services, LLC, which we refer to as MFS. MFS is an established business that provides services to active military personnel to obtain auto loans in the United States made by a third party national bank. The third party national bank approves the loan application, funds and services the loans and bears the credit risks. The purchase price payable by the Company is approximately $118 million, as adjusted to reflect the working capital of MFS and its subsidiaries as of the closing date as provided in the purchase agreement. The consummation of the acquisition is subject to the consent of the Company’s lenders under its current senior credit facility, the procurement by the Company and its subsidiaries of sufficient financing and the satisfaction of other customary closing conditions. The Company expects to complete the acquisition in December 2009, however there is no assurance that the acquisition will be consummated at that time or thereafter. The purchase agreement may be terminated by the Company or the sellers at any time after December 31, 2009 due to a failure to satisfy any of the closing conditions.

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, loan loss reserves and goodwill 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, revenues from our check cashing, money order sales, money transfer, foreign currency exchange, 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. Royalties from franchisees are recognized 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 that we established. As part of the franchise agreement, we provide certain pre-opening assistance including site selection and evaluation, design plans, operating manuals, software and training. After the franchised location has opened, we provide updates to the software, samples of certain advertising and promotional materials and other post-opening assistance that we determine is necessary. Franchise/agent revenues for the three months ended September 30, 2009 and 2008 were $0.9 million and $1.2 million, respectively.

For single-payment consumer loans that we make directly (company-funded loans), which have terms ranging from 1 to 45 days, revenues are 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.”

Company-Funded Consumer Loan Loss Reserves Policy

We maintain a loan loss reserve for probable losses inherent in the outstanding loan portfolio for single-payment and other consumer loans we make directly through our company-operated locations. To estimate the appropriate level of loan loss reserves, we consider known and relevant internal and external factors that affect loan collectability, including 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 charge-offs, typically 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. Despite the economic downturn in the U.S. and the foreign markets in which we operate, we have not experienced any material increase in the defaults on outstanding loans, however we have tightened lending criteria. Accordingly, we have not modified our approach to determining our loan loss reserves.

When a loan is originated, the customer receives the cash proceeds in exchange for a post-dated customer 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 loan is placed in default status and an additional reserve for this defaulted loan receivable is established and charged to store and regional expenses in the period that the loan is placed in default status. This reserve is reviewed monthly and any additional provision to the loan loss reserve as a result of historical loan performance, current collection patterns and current economic trends is charged to store and regional expenses. If the loans remain in defaulted status for 180 days, a reserve for the entire amount of the loan is recorded and the receivable and corresponding reserve is ultimately removed from the balance sheet. The receivable for defaulted single-payment loans, net of the allowance of $18.0 million at September 30, 2009 and $17.0 million at June 30, 2009, is reported on our balance sheet in loans in default, net, and was $6.8 million at September 30, 2009 and $6.4 million at June 30, 2009.

Check Cashing Returned Item Policy

We charge operating expense for losses on returned checks during the period in which such checks are returned, which generally is three to five business days after the check is cashed in our store. Recoveries on returned checks are credited to operating expense during the period in which recovery is made. This direct 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 and Indefinite-Lived Intangible Assets

Goodwill is the excess of cost over the fair value of the net assets of the business acquired. In accordance with the Intangibles Topic of the FASB Codification, goodwill is assigned to reporting units, which we have determined to be our reportable operating segments of the United States, Canada and the United Kingdom. The Company also has a corporate reporting unit which consists of costs related to corporate infrastructure, investor relations and other governance activities. Because of the limited activities of the corporate reporting unit, no goodwill has been assigned. Goodwill is assigned to the reporting unit that benefit from the synergies arising from each particular business combination. The determination of the operating segments being equivalent to the reporting units for goodwill allocation purposes is based upon our overall approach to managing our business along operating segment lines, and the consistency of the operations within each operating segment. Goodwill is evaluated for impairment on an annual basis on June 30 or between annual tests if events occur or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. To accomplish this, we are required to determine the carrying value of each reporting unit by assigning the assets and liabilities, including the existing goodwill and intangible assets, to those reporting units. We are then required to determine the fair value of each reporting unit and compare it to the carrying amount of the reporting unit. To the extent the carrying amount of a reporting unit exceeded the fair value of the reporting unit; we would be required to perform a second step to the impairment test, as this is an indication that the reporting unit goodwill may be impaired. If after the second step of testing, the carrying amount of a reporting unit exceeds the fair value of the individual tangible and identifiable intangible assets, an impairment loss would be recognized in an amount equal to the excess of the implied fair value of the reporting unit’s goodwill over its carrying value.

For the U.S. reporting unit, the amount of goodwill has increased significantly since June 30, 2007 primarily due to the acquisitions of APL and CCS during fiscal 2008. During 2009, the overall fair value of the U.S. reporting unit has declined based on the Company’s internal models; however, the performance of the two aforementioned acquisitions has continued to perform above initial expectations and the recent closure of unprofitable U.S. stores has improved store margins. Therefore, the fair value of the U.S. reporting unit, taken

as a whole, continues to exceed its carrying value. The impact of the continued economic downturn, along with any federal or state regulatory restrictions on our short-term consumer lending product, could reduce the fair value of the U.S. goodwill below its carrying value at which time we would be required to perform the second step of the transitional impairment test, as this is an indication that the reporting unit goodwill may be impaired.

Indefinite-lived intangible assets consist of reacquired franchise rights, which are deemed to have an indefinite useful life and are not amortized. Non-amortizable intangibles with indefinite lives are tested for impairment annually as of December 31, or whenever events or changes in business circumstances indicate that an asset may be impaired. If the estimated fair value is less than the carrying amount of the intangible assets with indefinite lives, then an impairment charge would be recognized to reduce the asset to its estimated fair value.

We consider this to be one of the significant accounting estimates used in the preparation of our consolidated financial statements. We estimate the fair value of our reporting units using a discounted cash flow analysis. This analysis requires us to make various judgmental assumptions about revenues, operating margins, growth rates, and discount rates. These assumptions are based on our budgets, business plans, economic projections, anticipated future cash flows and marketplace data. Assumptions are also made for perpetual growth rates for periods beyond our long term business plan period. We perform our goodwill impairment test annually as of June 30, and our reacquired franchise rights impairment test annually as of December 31. At the date of our last evaluations, there was no impairment of goodwill or reacquired franchise rights. However, we may be required to evaluate the recoverability of goodwill and other intangible assets prior to the required annual assessment if we experience a significant disruption to our business, unexpected significant declines in our operating results, divestiture of a significant component of our business, a sustained decline in market capitalization, particularly if it falls below our book value, or a significant change to the regulatory environment in which we operate. While we believe we have made reasonable estimates and assumptions to calculate the fair value of goodwill and indefinite-lived intangible assets, it is possible a material change could occur, including if actual experience differs from the assumptions and considerations used in our analyses. These differences could have a material adverse impact on the consolidated results of operations, and cause us to perform the second step impairment test, which could result in a material impairment of our goodwill. We will continue to monitor our actual cash flows and other factors that may trigger a future impairment in the light of the current global recession.

Derivative Instruments and Hedging Activities

The Derivative and Hedging Topic of the FASB Codification requires companies to provide users of financial statements with an enhanced understanding of: (a) how and why an entity uses derivative instruments, (b) how derivative instruments and related hedged items are accounted for, and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. This Topic also requires qualitative disclosures about objectives and strategies for using derivatives, quantitative disclosures about the fair value of and gains and losses on derivative instruments, and disclosures about credit-risk-related contingent features in derivative instruments.

As required by the Derivative and Hedging Topic of the FASB Codification, we record all derivatives on the balance sheet at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether we have elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Derivatives may also be designated as hedges of the foreign currency exposure of a net investment in a foreign operation. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk in a fair value hedge or the earnings effect of the hedged forecasted transactions in a cash flow hedge. We may enter into derivative contracts that are intended to economically hedge certain of its risk, even though hedge accounting does not apply or we elect not to apply hedge accounting.

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 the actual current tax liability together with assessing temporary differences resulting from differing treatment of items for tax and accounting purposes. These differences result in deferred tax assets and liabilities, which are included within our consolidated balance sheet. An assessment is then made of the likelihood that the deferred

tax assets will be recovered from future taxable income and to the extent we believe that recovery is not likely, we establish a valuation allowance.

The income taxes topic of the FASB Codification requires that a “more-likely-than-not” threshold be met before the benefit of a tax position may be recognized in the financial statements and prescribes how such benefit should be measured. As of September 30, 2009, this requirement did not result in any adjustment in our liability for unrecognized income tax benefits.

Results of Operations

Constant Currency Analysis

We maintain operations primarily in the United States, Canada and United Kingdom. Approximately 70% of our revenues are originated in currencies other than the US Dollar, principally the Canadian Dollar and British Pound Sterling. As a result, changes in our reported revenues and profits include the impacts of changes in foreign currency exchange rates. As additional information to the reader, we provide “constant currency” assessments in the following discussion and analysis to facilitate the comparability of performance between periods and to quantify the impact of the fluctuation in foreign exchange rates. We also utilize constant currency results in our analysis of segment performance. Our constant currency assessment assumes foreign exchange rates in the current fiscal periods remained the same as in the prior fiscal year periods. For the three months ended September 30, 2009, the actual average exchange rates used to translate the Canadian and United Kingdom’s results were $0.9114 and $1.6399, respectively. For our constant currency reporting for the same period, the average exchange rates used to translate the Canadian and United Kingdom’s results were $0.9610 and $1.8911, respectively. Note — all conversion rates are based on the US Dollar equivalent to one Canadian Dollar and one British Pound Sterling.

We believe that our constant currency assessments are a useful measure, indicating the actual growth and profitability of our operations. Earnings from our subsidiaries are not generally repatriated to the U.S.; therefore, we do not incur significant gains or losses on foreign currency transactions with our subsidiaries. As such, changes in foreign currency exchange rates primarily impact reported earnings and generally not our actual cash flow.

Revenue Analysis

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

Three Months Ended September 30, 2009 compared to Three Months Ended September 30, 2008

Total revenues for the three months ended September 30, 2009 decreased $11.3 million, or 7.4%, as compared to the three months ended September 30, 2008. The impact of foreign currency accounted for approximately $10.0 million of the decrease, offset in part by new store openings and acquisitions of approximately $9.4 million. On a constant currency basis and after eliminating the impact of new stores and acquisitions, total revenues decreased by $10.7 million.

Consolidated check cashing revenue decreased 22.1%, or $10.7 million, period-over-period. There was a decrease of $2.4 million related to foreign exchange rates and increases from new stores and acquisitions of $0.6 million. On a constant currency basis and after eliminating the impact of new stores and acquisitions, check cashing revenues were down $8.9 million or 18.4%, for the current three month period. Check cashing revenues from our U.S., Canadian and U. K. businesses declined 24.5%, 11.0%, and 18.7%, respectively (based on constant currency reporting), over the previous year’s period. On a consolidated constant currency basis, the face amount of the average check cashed decreased 2.5% to $508 for the first quarter of fiscal 2010 compared to $521 for the prior year period, while

the average fee per check cashed increased by 3.2% to $19.79. Also, global check counts declined by 19.6% from 2.5 million in the first quarter of fiscal 2009 to 2.0 million for the same period in the current year fiscal year.

Consolidated fees from consumer lending were $79.0 million for the first quarter of fiscal 2010, representing a decrease of 3.1% or $2.5 million compared to the prior year period. The impact of foreign currency fluctuations accounted for a decrease of approximately $5.5 million that was offset by new stores and acquisitions of $7.4 million. The remaining decrease of $4.4 million was primarily due to decreases in our U.S. consumer lending business which decreased by 21.9%. This decline is a result of store closures and our credit granting processes which are developed to decrease our risk exposure to certain customer segments by reducing the amount we are willing to loan to these segments. This decrease is partially offset by an increase in U.K. consumer lending business of 31.9%, which is bolstered in part by growth in the U.K. pawn lending business. The Company’s newly acquired business in Poland also contributed approximately $1.2 million in consumer lending revenues during the current quarter.

Money transfer fees for the quarter decreased in reported amounts by $0.8 million, when adjusted for currency and excluding the impact from new stores and acquisitions, decreased by $0.5 million or 6.7% for the three months ended September 30, 2009 as compared to the year earlier period. On a constant currency basis and excluding the impact from new stores and acquisitions, other revenue increased by $3.1 million for the quarter, principally due to the success of the foreign exchange product, the debit card business, gold sales and other ancillary products.

Store and Regional Expense Analysis

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

Store and regional expenses were $85.9 million for the three months ended September 30, 2009 compared to $99.3 million for the three months ended September 30, 2008, a decrease of $13.4 million or 13.5%. The impact of foreign currency accounted for approximately $5.7 million of the decrease. On a constant currency basis, store expenses decreased by $7.6 million. For the current year quarter, total store and regional expenses decreased from 64.8% of total revenue to 60.6% of total revenue year over year. After adjusting for constant currency reporting, the percentage of total store and regional expenses as compared to total revenue remained relatively consistent at 64.4%.

In relation to our business units and on a constant currency basis, store and regional expenses decreased by $9.6 million and $4.3 million in the United States and Canada, respectively. The decreases in these two units are consistent with the closure of approximately 135 U.S. and Canadian stores during fiscal 2009. The adjusted store and regional expenses in the United Kingdom increased by approximately $5.3 million for the three months ended September 30, 2009 as compared to the prior year which is commensurate with the revenue growth in that country. Store and regional expenses in the Company’s business in Poland were approximately $1.0 million.

Corporate and Other Expense Analysis

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

Corporate Expenses

Corporate expenses were $20.4 million for the three months ended September 30, 2009 and $19.5 million for the three months ended September 30, 2008. On a constant currency basis, corporate expenses increased by approximately $1.4 million, reflecting the previously announced increased investment in global management capabilities and infrastructure to support future global store and product expansion plans, as well as the continuing active acquisition strategy.

Other Depreciation and Amortization

Other depreciation and amortization expenses remained relatively unchanged and were approximately $1.0 million for the three months ended September 30, 2009 and 2008.

Interest Expense

Interest expense, net was $11.6 million for the three months ended September 30, 2009 and remained relatively unchanged from $11.5 million from the prior year. As a result of the early termination of the U.K. cross-currency swaps, the U.K. debt’s interest rate is now variable and lower than in the prior year. The impact of this change is reduced interest expense of approximately $0.9 million. This reduction was offset by increased interest expense on the Company’s revolving credit facility, increased non-cash interest expense on the Company’s convertible debt and a reduction in the amount of interest income earned by the Company.

Unrealized Foreign Exchange Loss

Unrealized foreign exchange loss of $7.8 million for the three months ended September 30, 2009 is due to unrealized foreign exchange losses associated with the U.K. term loans and intercompany balances. With the early settlement of the cross-currency interest rate swaps in May 2009, all unrealized foreign exchange gains and losses related to the U.K. term loans will continue to be reflected in earnings.

Provision for litigation settlements

Provision for litigation settlements was $1.3 million for the three months ended September 30, 2009 compared to $0.5 million for the same period in the prior year.

Loss on Store Closings

We incurred an additional $0.3 million charge in the three months ended September 30, 2009 related to the previously announced closure of 60 underperforming stores in the United States. The additional expenses recorded during the current three month period related to continuing occupancy costs and store closure related expenses as well as the buy-out of certain terminated leases.

Income Tax Provision

The provision for income taxes was $8.0 million for the three months ended September 30, 2009 compared to a provision of $5.2 million for the three months ended September 30, 2008. Our effective tax rate was 59.9% for the three months ended September 30, 2009 and was 31.6% for the three months ended September 30, 2008. The effective tax rate for the three months ended September 30, 2008 was reduced as a result of the impact of a favorable settlement granted in a competent authority tax proceeding between the United States and Canadian tax authorities related to transfer pricing matters for years 2000 through 2003 combined with an adjustment to our reserve for uncertain tax benefits related to years for which a settlement has not yet been received. The impact to our three months fiscal 2009 provision for income taxes related to these two items was a tax benefit of $3.5 million. Our effective tax rate differs from the federal statutory rate of 35% due to foreign taxes, permanent differences and a valuation allowance on U.S. and foreign deferred tax assets and the aforementioned changes our reserve for uncertain tax positions. Prior to the global debt restructuring in our fiscal year ended June 30, 2007, interest expense in the U.S. resulted in U.S. tax losses, thus generating deferred tax assets. At September 30, 2009, we maintained deferred tax assets of $118.0 million which is offset by a valuation allowance of $92.0 million of which $2.2 million was provided for in the period. The change for the period in our deferred tax assets and valuation allowances is presented in the table below and more fully described in the paragraphs that follow.

Change in Deferred Tax Assets and Valuation Allowances (in millions):

		Deferred				Valuation				Net Deferred
		Tax Asset				Allowance				Tax Asset
Balance at June 30, 2009		$	116.9			$	89.8			$	27.1
U.S. increase/(decrease)			2.0				2.1				(0.1	)
Foreign increase/(decrease)			(0.9	)			0.1				(1.0	)
Balance at September 30, 2009		$	118.0			$	92.0			$	26.0