UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


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

For the quarterly period ended ~~June 25,~~ September 24, 2021


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

For the transition period from _________ to _________

Commission file number 0-16633

THE JONES FINANCIAL COMPANIES, L.L.L.P.

(Exact name of registrant as specified in its Charter)

MISSOURI

43-1450818

(State or other jurisdiction of

incorporation or organization)

(IRS Employer

Identification No.)

12555 Manchester Road

Des Peres, Missouri63131

(Address of principal executive office)

(Zip Code)

~~(314)~~ (314) 515-2000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
None	N/A	N/A

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

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ~~YES~~ ☒YES NO ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicated by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  No ☐ No ☒

As of ~~July 30,~~October 29, 2021, ~~1,230,379~~1,227,239 units of limited partnership interest (“Interests”) are outstanding, each representing $1,000 of limited partner capital. There is no public or private market for such Interests.

THE JONES FINANCIAL COMPANIES, L.L.L.P.

INDEX


		Page

PART I.	FINANCIAL INFORMATION

Item 1.	Financial Statements		3

	Consolidated Statements of Financial Condition		3
	Consolidated Statements of Income		4
	Consolidated Statements of Changes in Partnership Capital – ~~June 25,~~September 24, 2021		5
	Consolidated Statements of Changes in Partnership Capital – ~~June 26,~~September 25, 2020		6
	Consolidated Statements of Cash Flows		7
	Notes to Consolidated Financial Statements		8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		18

Item 3.	Quantitative and Qualitative Disclosures about Market Risk		34

Item 4.	Controls and Procedures		34

PART II.	OTHER INFORMATION

Item 1.	Legal Proceedings		35

Item 1A.	Risk Factors		35

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		35

Item 6.	Exhibits		36

	Signatures		39

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

THE JONES FINANCIAL COMPANIES, L.L.L.P.

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

(Unaudited)


	June 25,		December 31,		September 24,		December 31,
(Dollars in millions)	2021		2020		2021		2020
ASSETS:
Cash and cash equivalents	$	1,316	$	1,125	$	1,731	$	1,125
Cash and investments segregated under federal regulations		17,791		17,918		17,691		17,918
Securities purchased under agreements to resell		1,085		1,714		1,500		1,714
Receivables from:
Clients		3,850		3,504		4,083		3,504
Mutual funds, insurance companies and other		851		818		817		818
Brokers, dealers and clearing organizations		253		223		258		223
Securities owned, at fair value:
Investment securities		767		1,302		734		1,302
Inventory securities		30		32		24		32
Lease right-of-use assets		921		915		924		915
Equipment, property and improvements, at cost, net of accumulated depreciation and amortization		638		620		656		620
Other assets		146		149		130		149

TOTAL ASSETS	$	27,648	$	28,320	$	28,548	$	28,320

LIABILITIES:
Payables to:
Clients	$	21,005	$	21,241	$	21,283	$	21,241
Brokers, dealers and clearing organizations		73		96		82		96
Accrued compensation and employee benefits		1,826		2,104		2,259		2,104
Lease liabilities		943		938		948		938
Accounts payable, accrued expenses and other		248		352		283		352
		24,095		24,731		24,855		24,731
Contingencies (Note 7)

Partnership capital subject to mandatory redemption, net of reserve for anticipated withdrawals and partnership loans:
Limited partners		1,232		1,237		1,228		1,237
Subordinated limited partners		583		538		581		538
General partners		1,492		1,300		1,567		1,300
Total		3,307		3,075		3,376		3,075
Reserve for anticipated withdrawals		246		514		317		514
Total partnership capital subject to mandatory redemption		3,553		3,589		3,693		3,589

TOTAL LIABILITIES	$	27,648	$	28,320	$	28,548	$	28,320

The accompanying notes are an integral part of these Consolidated Financial Statements.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements, continued

THE JONES FINANCIAL COMPANIES, L.L.L.P.

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)


	Three Months Ended				Six Months Ended				Three Months Ended				Nine Months Ended
(Dollars in millions, except per unit information and units outstanding)	June 25, 2021		June 26,2020		June 25, 2021		June 26,2020		September 24, 2021		September 25, 2020		September 24, 2021		September 25, 2020
Revenue:
Fee revenue
Asset-based	$	2,385	$	1,718	$	4,594	$	3,524	$	2,535	$	1,926	$	7,129	$	5,450
Account and activity		171		160		341		331		172		163		513		494
Total fee revenue		2,556		1,878		4,935		3,855		2,707		2,089		7,642		5,944
Trade revenue		437		395		879		888		402		398		1,281		1,286
Interest and dividends		40		41		78		124		42		40		120		164
Other revenue, net		24		34		42		4		13		24		55		28
Total revenue		3,057		2,348		5,934		4,871		3,164		2,551		9,098		7,422
Interest expense		23		23		47		55		24		24		71		79
Net revenue		3,034		2,325		5,887		4,816		3,140		2,527		9,027		7,343
Operating expenses:
Compensation and benefits		2,148		1,646		4,187		3,410		2,202		1,806		6,389		5,216
Occupancy and equipment		135		130		269		261		138		131		407		392
Communications and data processing		115		106		219		207		132		100		351		307
Fund sub-adviser fees		59		44		115		86		64		48		179		134
Professional and consulting fees		34		23		65		52		40		28		105		80
Other operating expenses		100		88		209		209		164		98		373		307
Total operating expenses		2,591		2,037		5,064		4,225		2,740		2,211		7,804		6,436

Income before allocations to partners		443		288		823		591		400		316		1,223		907

Allocations to partners:
Limited partners		58		42		107		92		52		45		159		137
Subordinated limited partners		52		34		98		69		47		37		145		106
General partners		333		212		618		430		301		234		919		664
Net Income	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0

Income allocated to limited partners per weighted average $1,000 equivalent limited partnership unit outstanding	$	46.66	$	33.10	$	86.74	$	68.00	$	42.13	$	36.36	$	128.87	$	104.36

Weighted average $1,000 equivalent limited partnership units outstanding		1,231,702		1,244,724		1,234,095		1,246,549		1,229,280		1,241,068		1,232,521		1,244,639

The accompanying notes are an integral part of these Consolidated Financial Statements.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements, continued

THE JONES FINANCIAL COMPANIES, L.L.L.P.

CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERSHIP CAPITAL

SUBJECT TO MANDATORY REDEMPTION

FOR THE THREE AND ~~SIX~~NINE MONTHS ENDED ~~JUNE 25,~~SEPTEMBER 24, 2021

(Unaudited)


(Dollars in millions)	Limited Partnership Capital			Subordinated Limited Partnership Capital			General Partnership Capital			Total			Limited Partnership Capital			Subordinated Limited Partnership Capital			General Partnership Capital			Total

TOTAL PARTNERSHIP CAPITAL SUBJECT TO MANDATORY REDEMPTION, DECEMBER 31, 2020	$	1,362		$	594		$	1,633		$	3,589		$	1,362		$	594		$	1,633		$	3,589
Reserve for anticipated withdrawals		(125	)		(56	)		(333	)		(514	)		(125	)		(56	)		(333	)		(514	)
Partnership capital subject to mandatory redemption, net of reserve for anticipated withdrawals, December 31, 2020	$	1,237		$	538		$	1,300		$	3,075		$	1,237		$	538		$	1,300		$	3,075
Partnership loans outstanding, December 31, 2020		0			1			340			341			0			1			340			341
Total partnership capital, including capital financed with partnership loans, net of reserve for anticipated withdrawals, December 31, 2020		1,237			539			1,640			3,416			1,237			539			1,640			3,416
Issuance of partnership interests		3			60			211			274			3			60			211			274
Redemption of partnership interests		(5	)		(16	)		(50	)		(71	)		(5	)		(16	)		(50	)		(71	)
Income allocated to partners		49			46			285			380			49			46			285			380
Distributions		0			0			(3	)		(3	)		0			0			(3	)		(3	)
Total partnership capital, including capital financed with partnership loans, March 26, 2021		1,284			629			2,083			3,996			1,284			629			2,083			3,996
Issuance of partnership interests		2			0			9			11			2			0			9			11
Redemption of partnership interests		(5	)		0			(8	)		(13	)		(5	)		0			(8	)		(13	)
Income allocated to partners		58			52			333			443			58			52			333			443
Distributions		(10	)		(82	)		(397	)		(489	)		(10	)		(82	)		(397	)		(489	)
Total partnership capital, including capital financed with partnership loans, June 25, 2021		1,329			599			2,020			3,948			1,329			599			2,020			3,948
Partnership loans outstanding, June 25, 2021		0			0			(395	)		(395	)
TOTAL PARTNERSHIP CAPITAL SUBJECT TO MANDATORY REDEMPTION, JUNE 25, 2021	$	1,329		$	599		$	1,625		$	3,553
Issuance of partnership interests														—			1			2			3
Redemption of partnership interests														(4	)		(3	)		(27	)		(34	)
Income allocated to partners														52			47			301			400
Distributions														(1	)		(47	)		(240	)		(288	)
Total partnership capital, including capital financed with partnership loans, September 24, 2021														1,376			597			2,056			4,029
Partnership loans outstanding														0			0			(336	)		(336	)
TOTAL PARTNERSHIP CAPITAL SUBJECT TO MANDATORY REDEMPTION, SEPTEMBER 24, 2021													$	1,376		$	597		$	1,720		$	3,693
Reserve for anticipated withdrawals		(97	)		(16	)		(133	)		(246	)		(148	)		(16	)		(153	)		(317	)
Partnership capital subject to mandatory redemption, net of reserve for anticipated withdrawals, June 25, 2021	$	1,232		$	583		$	1,492		$	3,307
Partnership capital subject to mandatory redemption, net of reserve for anticipated withdrawals, September 24, 2021													$	1,228		$	581		$	1,567		$	3,376

The accompanying notes are an integral part of these Consolidated Financial Statements.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements, continued

THE JONES FINANCIAL COMPANIES, L.L.L.P.

CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERSHIP CAPITAL

SUBJECT TO MANDATORY REDEMPTION

FOR THE THREE AND ~~SIX~~NINE MONTHS ENDED ~~JUNE 26,~~SEPTEMBER 25, 2020


(Dollars in millions)	Limited Partnership Capital			Subordinated Limited Partnership Capital			General Partnership Capital			Total			Limited Partnership Capital			Subordinated Limited Partnership Capital			General Partnership Capital			Total

TOTAL PARTNERSHIP CAPITAL SUBJECT TO MANDATORY REDEMPTION, DECEMBER 31, 2019	$	1,359		$	566		$	1,439		$	3,364		$	1,359		$	566		$	1,439		$	3,364
Reserve for anticipated withdrawals		(110	)		(43	)		(254	)		(407	)		(110	)		(43	)		(254	)		(407	)
Partnership capital subject to mandatory redemption, net of reserve for anticipated withdrawals, December 31, 2019	$	1,249		$	523		$	1,185		$	2,957		$	1,249		$	523		$	1,185		$	2,957
Partnership loans outstanding, December 31, 2019		0			4			356			360			—			4			356			360
Total partnership capital, including capital financed with partnership loans, net of reserve for anticipated withdrawals, December 31, 2019		1,249			527			1,541			3,317			1,249			527			1,541			3,317
Issuance of partnership interests		1			49			163			213			1			49			163			213
Redemption of partnership interests		(3	)		(35	)		(43	)		(81	)		(3	)		(35	)		(43	)		(81	)
Income allocated to partners		50			35			218			303			50			35			218			303
Distributions		0			0			(5	)		(5	)		—			—			(5	)		(5	)
Total partnership capital, including capital financed with partnership loans, March 27, 2020		1,297			576			1,874			3,747			1,297			576			1,874			3,747
Issuance of partnership interests		0			0			0			0
Redemption of partnership interests		(3	)		(1	)		(2	)		(6	)		(3	)		(1	)		(2	)		(6	)
Income allocated to partners		42			34			212			288			42			34			212			288
Distributions		(14	)		(58	)		(277	)		(349	)		(14	)		(58	)		(277	)		(349	)
Total partnership capital, including capital financed with partnership loans, June 26, 2020		1,322			551			1,807			3,680			1,322			551			1,807			3,680
Redemption of partnership interests														(4	)		(1	)		(8	)		(13	)
Income allocated to partners														45			37			234			316
Distributions														—			(35	)		(173	)		(208	)
Total partnership capital, including capital financed with partnership loans, September 25, 2020														1,363			552			1,860			3,775
Partnership loans outstanding		0			(1	)		(387	)		(388	)		—			(1	)		(362	)		(363	)
TOTAL PARTNERSHIP CAPITAL SUBJECT TO MANDATORY REDEMPTION, JUNE 26, 2020	$	1,322		$	550		$	1,420		$	3,292
TOTAL PARTNERSHIP CAPITAL SUBJECT TO MANDATORY REDEMPTION, SEPTEMBER 25, 2020													$	1,363		$	551		$	1,498		$	3,412
Reserve for anticipated withdrawals		(78	)		(11	)		(89	)		(178	)		(123	)		(13	)		(118	)		(254	)
Partnership capital subject to mandatory redemption, net of reserve for anticipated withdrawals, June 26, 2020	$	1,244		$	539		$	1,331		$	3,114
Partnership capital subject to mandatory redemption, net of reserve for anticipated withdrawals, September 25, 2020													$	1,240		$	538		$	1,380		$	3,158

The accompanying notes are an integral part of these Consolidated Financial Statements.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements, continued

THE JONES FINANCIAL COMPANIES, L.L.L.P.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


	Nine Months Ended
(Dollars in millions)	September 24, 2021			September 25,2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	0		$	0
Adjustments to reconcile net income to net cash provided by operating activities:
Income before allocations to partners		1,223			907
Depreciation and amortization		94			93

Changes in assets and liabilities:
Investments segregated under federal regulations		298			(5,403	)
Securities purchased under agreements to resell		214			(41	)
Net payable to clients		(537	)		4,949
Net receivable from brokers, dealers and clearing organizations		(49	)		4
Receivable from mutual funds, insurance companies and other		1			(68	)
Securities owned		576			(597	)
Lease right-of-use assets		(9	)		(30	)
Other assets		19			42
Lease liabilities		10			31
Accrued compensation and employee benefits		155			54
Accounts payable, accrued expenses and other		(69	)		(78	)
Net cash provided by (used in) operating activities		1,926			(137	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of equipment, property and improvements		(130	)		(100	)
Cash used in investing activities		(130	)		(100	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of partnership loans		15			—
Issuance of partnership interests		66			50
Redemption of partnership interests		(118	)		(100	)
Distributions from partnership capital		(1,082	)		(809	)
Net cash used in financing activities		(1,119	)		(859	)
Net increase (decrease) in cash, cash equivalents and restricted cash		677			(1,096	)

CASH, CASH EQUIVALENTS AND RESTRICTED CASH:
Beginning of period		6,875			8,007
End of period	$	7,552		$	6,911

Six Months Ended

(Dollars in millions)

June 25, 2021

June 26, 2020

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income

$
0

$
0

Adjustments to reconcile net income to net cash provided by
operating activities:

Income before allocations to partners

823

591

Depreciation and amortization

61

62

Changes in assets and liabilities:

Investments segregated under federal regulations

43

(4,702
)
Securities purchased under agreements to resell

629

250

Net payable to clients

(582
)

3,138

Net receivable from brokers, dealers and clearing organizations

(53
)

(2
)
Receivable from mutual funds, insurance companies and other

(33
)

(30
)
Securities owned

537

(72
)
Lease right-of-use assets

(6
)

(14
)
Other assets

3

69

Lease liabilities

5

9

Accrued compensation and employee benefits

(278
)

(345
)
Accounts payable, accrued expenses and other

(104
)

(74
)
Net cash provided by (used in) operating activities

1,045

(1,120
)

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchase of equipment, property and improvements

(79
)

(80
)
Cash used in investing activities

(79
)

(80
)

CASH FLOWS FROM FINANCING ACTIVITIES:

Issuance of partnership interests

65

50

Redemption of partnership interests

(84
)

(87
)
Distributions from partnership capital

(840
)

(626
)
Net cash used in financing activities

(859
)

(663
)
Net increase (decrease) in cash, cash equivalents and restricted cash

107

(1,863
)

CASH, CASH EQUIVALENTS AND RESTRICTED CASH:

Beginning of period

6,875

8,007

End of period

$
6,982

$
6,144

See Note 10 for additional cash flow information.

The accompanying notes are an integral part of these Consolidated Financial Statements.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements, continued

THE JONES FINANCIAL COMPANIES, L.L.L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(Dollars in millions)

~~Item 1.~~

~~Financial Statements, continued~~

~~THE JONES FINANCIAL COMPANIES, L.L.L.P.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~(Unaudited)~~

~~(Dollars in millions)~~

NOTE 1 – INTRODUCTION AND BASIS OF PRESENTATION

The accompanying Consolidated Financial Statements include the accounts of The Jones Financial Companies, L.L.L.P. and all wholly-owned subsidiaries (collectively, the “Partnership” or "JFC"). The financial position of the Partnership’s subsidiaries in Canada as of ~~May~~August 31, 2021 and November 30, 2020 are included in the Partnership’s Consolidated Statements of Financial Condition and the results for the three- and ~~six-month~~nine-month periods ended ~~May~~August 31, 2021 and 2020 are included in the Partnership’s Consolidated Statements of Income, Consolidated Statements of Changes in Partnership Capital Subject to Mandatory Redemption, and Consolidated Statements of Cash Flows because of the timing of the Partnership’s financial reporting process.

The Partnership’s wholly-owned principal operating subsidiary, Edward D. Jones & Co., L.P. (“Edward Jones”), is a registered broker-dealer and investment adviser in the United States (“U.S.”), and one of Edward Jones’ wholly-owned subsidiaries is a registered broker-dealer in Canada. Through these entities, the Partnership primarily serves individual investors in the U.S. and Canada. Edward Jones is a retail brokerage business and primarily derives revenues from fees for providing investment advisory and other account services to its clients, fees for assets held by clients, the distribution of mutual fund shares, and commissions for the purchase or sale of securities and the purchase of insurance products. The Partnership conducts business throughout the U.S. and Canada with its clients, various brokers, dealers, clearing organizations, depositories and banks. For financial information related to the Partnership’s 2 operating segments for the three- and ~~six-month~~nine-month periods ended ~~June 25,~~September 24, 2021 and ~~June 26,~~September 25, 2020, see Note 8 to the Consolidated Financial Statements. Trust services are offered to Edward Jones’ U.S. clients through Edward Jones Trust Company (“Trust Co.”), a ~~wholly owned~~wholly-owned subsidiary of the Partnership. Olive Street Investment Advisers, LLC, a ~~wholly owned~~wholly-owned subsidiary of the Partnership, provides investment advisory services to the eight sub-advised mutual funds comprising the Bridge Builder® Trust. Passport Research, Ltd., a ~~wholly owned~~wholly-owned subsidiary of ~~the Partnership,~~Edward Jones, provides investment advisory services to the sub-advised Edward Jones Money Market Fund (the "Money Market Fund").

The Consolidated Financial Statements have been prepared on the accrual basis of accounting in conformity with U.S. generally accepted accounting principles, which require the use of certain estimates by management in determining the Partnership’s assets, liabilities, revenues and expenses. Actual results could differ from these estimates. Given the ongoing uncertainty of the coronavirus pandemic and related events ("COVID-19") and its duration, the Partnership cannot reliably predict the ultimate impact of COVID-19 on financial markets or its financial ~~results~~.results. The Partnership evaluated subsequent events for recognition or disclosure through the date these Consolidated Financial Statements were issued and identified no matters requiring disclosure.

The interim financial information included herein is unaudited. However, in the opinion of management, such information includes all adjustments, consisting primarily of normal recurring accruals, which are necessary for a fair statement of the results of interim operations.

There have been no material changes to the Partnership’s significant accounting policies or disclosures of recently issued accounting standards as described in Part II, Item 8 – Financial Statements and Supplementary Data – Note 1 of the Partnership's Annual Report on Form 10-K for the year ended December 31, 2020 (the "Annual Report"). The results of operations for the three- and ~~six-month~~nine-month periods ended ~~June 25,~~September 24, 2021 are not necessarily indicative of the results to be expected for the year ending December 31, 2021. These unaudited Consolidated Financial Statements should be read in conjunction with Management's Discussion and Analysis of Financial Condition and Results of Operations and the Consolidated Financial Statements and notes thereto included in the Annual Report.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements, continued

~~Item 1.~~

~~Financial Statements, continued~~

NOTE 2 – LEASES

For the three- and ~~six-month~~nine-month periods ended ~~June 25,~~September 24, 2021 and ~~June 26,~~September 25, 2020, cash paid for amounts included in the measurement of operating lease liabilities was ~~$82~~$79 and ~~$160~~ $239 and ~~$76~~$77 and ~~$151,~~$228, respectively, and lease right-of-use assets obtained in exchange for new operating lease liabilities were ~~$80~~$85 and ~~$155~~$240 and ~~$75~~$85 and ~~$161,~~$246, respectively. The weighted-average remaining lease term wasfour yearsas of both ~~June 25,~~September 24, 2021 and December 31, 2020, and the weighted-average discount rate was ~~2.3%~~2.2% and ~~2.6%~~2.6%, respectively.

For the three- and ~~six-month~~nine-month periods ended ~~June 25,~~September 24, 2021 and ~~June 26,~~September 25, 2020, operating lease costs were ~~$80~~$80 and ~~$158~~$238 and ~~$75~~$77 and ~~$149,~~$226, respectively, and variable lease costs not included in the lease liability were ~~$15~~$15 and ~~$29~~$44 and ~~$15~~$12 and ~~$30,~~$42, respectively. Total lease cost for the three- and ~~six-month~~nine-month periods ended ~~June 25,~~September 24, 2021 and ~~June 26,~~September 25, 2020 was ~~$95~~$95 and ~~$187~~$282 and ~~$90~~$89 and ~~$179,~~$268, respectively. The Partnership's future undiscounted cash outflows for operating leases are summarized below as of:


	June 25,		December 31,		September 24,		December 31,
	2021		2020		2021		2020
2021	$	159	$	300	$	83	$	300
2022		276		247		291		247
2023		220		190		235		190
2024		154		125		169		125
2025		94		65		109		65
Thereafter		84		60		103		60
Total lease payments		987		987		990		987
Less: Interest		44		49		42		49
Total present value of lease liabilities	$	943	$	938	$	948	$	938

While the rights and obligations for leases that have not yet commenced are not significant, the Partnership regularly enters into new branch office leases.

NOTE 3 – RECEIVABLES AND REVENUE

As of ~~June 25,~~September 24, 2021 and December 31, 2020, collateral held for receivables from clients was ~~$4,400~~$4,694 and ~~$4,035,~~$4,035, respectively, and collateral held for securities purchased under agreements to ~~resell~~resell was ~~$1,101~~$1,525 and ~~$1,743,~~$1,743, respectively. As the fair value of the collateral either exceeded or was at least ~~100%~~100% of the amortized cost, the expected credit loss was 0 for each period. Additionally, partnership loan values remained below the value of capital allocated to partners, resulting in an expected credit loss of 0 as of ~~June 25,~~September 24, 2021 and December 31, 2020.

As of ~~June 25,~~September 24, 2021, December 31, 2020 and December 31, 2019, ~~$647, $563~~$677, $563 and ~~$470,~~$470, respectively, of the receivable from clients balance and ~~$325, $285~~$325, $285 and ~~$291,~~$291, respectively, of the receivable from mutual funds, insurance companies and other balance related to revenue contracts with customers. The related fees are paid out of client accounts or third-party products consisting of cash and securities, and the collateral value of those accounts continues to exceed the amortized cost basis of these receivables, resulting in a remote risk of loss. The expected credit loss for receivables from contracts with customers was 0 as of ~~June 25,~~September 24, 2021 and December 31, 2020.

The Partnership derived ~~11%~~13% and ~~12%~~12% of its total revenue for the three- and ~~six-month~~nine-month periods ended ~~June 25,~~September 24, 2021, respectively, and ~~13% and 14%~~13% of its total revenue for both of the three- and ~~six-month~~nine-month periods ended ~~June 26,~~September 25, 2020, respectively, from 1 mutual fund company. The revenue generated from this company relates to business conducted with the Partnership's U.S. segment.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements, continued

~~Item 1.~~

~~Financial Statements, continued~~

The following table shows the Partnership's disaggregated revenue information. See Note 8 for segment information.


	Three Months Ended September 24, 2021						Three Months Ended September 25, 2020
	U.S.		Canada		Total		U.S.		Canada		Total
Fee revenue:
Asset-based fee revenue:
Advisory programs fees	$	1,904	$	34	$	1,938	$	1,409	$	22	$	1,431
Service fees		403		29		432		330		23		353
Other asset-based fees		165		0		165		142		0		142
Total asset-based fee revenue		2,472		63		2,535		1,881		45		1,926
Account and activity fee revenue:
Shareholder accounting services fees		109		0		109		106		0		106
Other account and activity fee revenue		59		4		63		54		3		57
Total account and activity fee revenue		168		4		172		160		3		163
Total fee revenue		2,640		67		2,707		2,041		48		2,089
Trade revenue:
Commissions		381		11		392		376		10		386
Principal transactions		9		1		10		12		0		12
Total trade revenue		390		12		402		388		10		398
Total revenue from customers		3,030		79		3,109		2,429		58		2,487
Net interest and dividends and other revenue		22		9		31		40		0		40
Net revenue	$	3,052	$	88	$	3,140	$	2,469	$	58	$	2,527


	Nine Months Ended September 24, 2021						Nine Months Ended September 25, 2020
	U.S.		Canada		Total		U.S.		Canada		Total
Fee revenue:
Asset-based fee revenue:
Advisory programs fees	$	5,326	$	92	$	5,418	$	3,928	$	61	$	3,989
Service fees		1,157		83		1,240		950		66		1,016
Other asset-based fees		471		0		471		445		0		445
Total asset-based fee revenue		6,954		175		7,129		5,323		127		5,450
Account and activity fee revenue:
Shareholder accounting services fees		325		0		325		319		0		319
Other account and activity fee revenue		177		11		188		166		9		175
Total account and activity fee revenue		502		11		513		485		9		494
Total fee revenue		7,456		186		7,642		5,808		136		5,944
Trade revenue:
Commissions		1,212		39		1,251		1,204		37		1,241
Principal transactions		28		2		30		43		2		45
Total trade revenue		1,240		41		1,281		1,247		39		1,286
Total revenue from customers		8,696		227		8,923		7,055		175		7,230
Net interest and dividends and other revenue		89		15		104		98		15		113
Net revenue	$	8,785	$	242	$	9,027	$	7,153	$	190	$	7,343

Three Months Ended June 25, 2021

Three Months Ended June 26, 2020

U.S.

Canada

Total

U.S.

Canada

Total

Fee revenue:

Asset-based fee revenue:

Advisory programs fees

$
1,782

$
31

$
1,813

$
1,238

$
20

$
1,258

Service fees

388

29

417

304

19

323

Other asset-based fees

155

0

155

137

0

137

Total asset-based fee revenue

2,325

60

2,385

1,679

39

1,718

Account and activity fee revenue:

Shareholder accounting services
   fees

109

0

109

104

0

104

Other account and activity fee
   revenue

59

3

62

53

3

56

Total account and activity fee
   revenue

168

3

171

157

3

160

   Total fee revenue

2,493

63

2,556

1,836

42

1,878

Trade revenue:

Commissions

412

14

426

364

14

378

Principal transactions

10

1

11

16

1

17

Total trade revenue

422

15

437

380

15

395

Total revenue from customers

2,915

78

2,993

2,216

57

2,273

Net interest and dividends and other
  revenue

39

2

41

45

7

52

Net revenue

$
2,954

$
80

$
3,034

$
2,261

$
64

$
2,325

Six Months Ended June 25, 2021

Six Months Ended June 26, 2020

U.S.

Canada

Total

U.S.

Canada

Total

Fee revenue:

Asset-based fee revenue:

Advisory programs fees

$
3,422

$
58

$
3,480

$
2,519

$
39

$
2,558

Service fees

754

54

808

620

43

663

Other asset-based fees

306

0

306

303

0

303

Total asset-based fee revenue

4,482

112

4,594

3,442

82

3,524

Account and activity fee revenue:

Shareholder accounting services
   fees

216

0

216

213

0

213

Other account and activity fee
   revenue

118

7

125

112

6

118

Total account and activity fee
   revenue

334

7

341

325

6

331

   Total fee revenue

4,816

119

4,935

3,767

88

3,855

Trade revenue:

Commissions

831

28

859

828

27

855

Principal transactions

19

1

20

31

2

33

Total trade revenue

850

29

879

859

29

888

Total revenue from customers

5,666

148

5,814

4,626

117

4,743

Net interest and dividends and other
  revenue

67

6

73

58

15

73

Net revenue

$
5,733

$
154

$
5,887

$
4,684

$
132

$
4,816

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements, continued

~~Item 1.~~

~~Financial Statements, continued~~

NOTE 4 – FAIR VALUE

The Partnership's valuation methodologies for financial assets and financial liabilities measured at fair value and the fair value hierarchy are described in Part II, Item 8 – Financial Statements and Supplementary Data – Note 1 of the Partnership's Annual Report. There have been no material changes to the Partnership's valuation methodologies since December 31, 2020.

The Partnership did 0t0t have any assets or liabilities categorized as Level III during the ~~six-~~nine- and twelve-month periods ended ~~June 25, 2021~~September 24, 2021 and December 31, 2020, respectively.

The following tables show the Partnership’s financial assets measured at fair value:


	Financial Assets at Fair Value as of								Financial Assets at Fair Value as of
	June 25, 2021								September 24, 2021
	Level I		Level II		Level III		Total		Level I		Level II		Level III		Total
Cash equivalents:
Certificates of deposit	$	—	$	120	$	—	$	120	$	0	$	120	$	—	$	120
Money market funds	29			—		—		29		41		0		—		41
Total cash equivalents	$	29	$	120	$	—	$	149	$	41	$	120	$	—	$	161

Investments segregated under federal regulations:
U.S. treasuries	$	12,098	$	—	$	—	$	12,098	$	11,843	$	0	$	—	$	11,843

Securities owned:
Investment securities:
Mutual funds⁽¹⁾	$	348	$	—	$	—	$	348	$	356	$	0	$	—	$	356
Government and agency obligations		315		—		—		315		225		0		—		225
Certificates of deposit		—		100		—		100		0		150		—		150
Equities		4		—		—		4		3		0		—		3
Total investment securities	$	667	$	100	$	—	$	767	$	584	$	150	$	—	$	734

Inventory securities:
State and municipal obligations	$	—	$	15	$	—	$	15	$	0	$	12	$	—	$	12
Equities		8		—		—		8		7		0		—		7
Mutual funds		5		—		—		5		2		0		—		2
Corporate bonds and notes		—		1		—		1		0		2		—		2
Certificates of deposit		—		1		—		1		0		1		—		1
Total inventory securities	$	13	$	17	$	—	$	30	$	9	$	15	$	—	$	24

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements, continued


	Financial Assets at Fair Value as of
	December 31, 2020
	Level I		Level II		Level III		Total
Cash equivalents:
Certificates of deposit	$	0	$	120	$	—	$	120
Money market funds	41			0		—	41
Total cash equivalents	$	41	$	120	$	—	$	161

Investments segregated under federal regulations:
U.S. treasuries	$	12,051	$	0	$	—	$	12,051
Certificates of deposit		0		100		—		100
Total investments segregated under federal regulations	$	12,051	$	100	$	—	$	12,151

Securities owned:
Investment securities:
Government and agency obligations	$	971	$	0	$	—	$	971
Mutual funds(1)		327		0		—		327
Equities		3		0		—		3
Certificates of deposit		0		1		—		1
Total investment securities	$	1,301	$	1	$	—	$	1,302

Inventory securities:
Equities	$	19	$	0	$	—	$	19
State and municipal obligations		0		10		—		10
Corporate bonds and notes		0		2		—		2
Mutual funds		1		0		—		1
Total inventory securities	$	20	$	12	$	—	$	32

~~Item 1.~~

~~Financial Statements, continued~~

(1)

The mutual funds balance consists primarily of securities held to economically hedge future liabilities related to the non-qualified deferred compensation plan. The balance also includes a security held for regulatory purposes at the Trust Co.

Financial Assets at Fair Value as of

December 31, 2020

Level I

Level II

Level III

Total

Cash equivalents:

Certificates of deposit

$
—

$
120

$
—

$
120

Money market funds

41

—

—

41

Total cash equivalents

$
41

$
120

$
—

$
161

Investments segregated under federal regulations:

U.S. treasuries

$
12,051

$
—

$
—

$
12,051

Certificates of deposit

—

100

—

100

Total investments segregated under federal regulations

$
12,051

$
100

$
—

$
12,151

Securities owned:

Investment securities:

Government and agency obligations

$
971

$
—

$
—

$
971

Mutual funds⁽¹⁾

327

—

—

327

Equities

3

—

—

3

Certificates of deposit

—

1

—

1

Total investment securities

$
1,301

$
1

$
—

$
1,302

Inventory securities:

Equities

$
19

$
—

$
—

$
19

State and municipal obligations

—

10

—

10

Corporate bonds and notes

—

2

—

2

Mutual funds

1

—

—

1

Total inventory securities

$
20

$
12

$
—

$
32

⁽¹⁾	The mutual funds balance consists primarily of securities held to economically hedge future liabilities related to the non-qualified deferred compensation plan. The balance also includes a security held for regulatory purposes at the Trust Co.

NOTE 5 – PARTNERSHIP CAPITAL SUBJECT TO MANDATORY REDEMPTION

The Partnership makes loans available to those general partners and, in limited circumstances, subordinated limited partners (in each case, other than members of the ~~Executive Committee~~,Enterprise Leadership Team, as defined in the Partnership’s ~~Twentieth~~Twenty-First Amended and Restated Agreement of Registered Limited Liability Limited Partnership, dated ~~August 6, 2018~~September 1, 2021 (the “Partnership Agreement”)), who require financing for some or all of their Partnership capital contributions. In limited circumstances a general partner may withdraw from the Partnership and become a subordinated limited partner while he or she still has an outstanding Partnership loan. It is anticipated that, of the future general and subordinated limited partnership capital contributions (in each case, other than for ~~Executive Committee~~Enterprise Leadership Team members) requiring financing, the majority will be financed through Partnership loans. Loans made by the Partnership to such partners are generally for a period of one year but are expected to be renewed and bear interest at the greater of the Prime Rate for the last business day of the prior fiscal month or ~~3.25%~~3.25%. The Partnership recognizes interest income for the interest earned related to these loans. The outstanding amount of Partnership loans is reflected as a reduction to total Partnership capital. As of ~~June 25,~~September 24, 2021 and December 31, 2020, the outstanding amount of Partnership loans was ~~$395~~$336 and ~~$341,~~$341, respectively. Interest income earned from these loans, which is included in interest and dividends in the Consolidated Statements of Income, was $4$3 and $7$10 for the three- and ~~six-month~~nine-month periods ended ~~June 25,~~September 24, 2021, respectively, and $3$3 and $8$11 for the three- and ~~six-month~~nine-month periods ended ~~June 26,~~September 25, 2020,, respectively.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements, continued

~~Item 1.~~

~~Financial Statements, continued~~

The following table shows the roll forward of outstanding Partnership loans for:


	Six Months Ended						Nine Months Ended
	June 25,			June 26,			September 24,			September 25,
	2021			2020			2021			2020
Partnership loans outstanding at beginning of period	$	341		$	360		$	341		$	360
Partnership loans issued during the period		220			163			222			163
Repayment of Partnership loans during the period		(166	)		(135	)		(227	)		(160	)
Total Partnership loans outstanding	$	395		$	388		$	336		$	363

The minimum ~~7.5%~~7.5% annual return on the face amount of limited partnership capital was ~~$23~~$23 and ~~$46~~$69 for the three- and ~~six-month~~nine-month periods ended ~~June 25,~~September 24, 2021, respectively, and $23 and ~~$24 and $47~~$70 for the three- and ~~six-month~~nine-month periods ended ~~June 26,~~September 25, 2020, respectively. These amounts are included as a component of interest expense in the Consolidated Statements of Income.

The Partnership filed a Registration Statement on Form S-8 with the U.S. Securities and Exchange Commission ("SEC") on January 12, 2018, to register ~~$450~~$450 of Interests issuable pursuant to the Partnership's 2018 Employee Limited Partnership Interest Purchase Plan, as amended (the "2018 Plan"). In addition to issuances of Interests in prior periods, the Partnership issued approximately $1$1 and $5$5 of Interests under the 2018 Plan in 2020 and the first ~~half~~nine months of 2021, respectively. The remaining ~~$64~~$64 of Interests may be issued under the 2018 Plan at the discretion of the Managing Partner in the future.

NOTE 6 – NET CAPITAL REQUIREMENTS

As a result of its activities as a U.S. broker-dealer, Edward Jones is subject to the net capital provisions of Rule 15c3-1 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and capital compliance rules of the Financial Industry Regulatory Authority ("FINRA") Rule 4110. Under the alternative method permitted by the rules, Edward Jones must maintain minimum net capital equal to the greater of ~~$0.25~~$0.25 or 2%2% of aggregate debit items arising from client transactions. The net capital rules also provide that Edward Jones’ partnership capital may not be withdrawn if resulting net capital would be less than minimum requirements. Additionally, certain withdrawals require the approval of the SEC and FINRA to the extent they exceed defined levels, even though such withdrawals would not cause net capital to be less than minimum requirements.

The Partnership’s Canada broker-dealer subsidiary is a registered broker-dealer regulated by the Investment Industry Regulatory Organization of Canada (“IIROC”). Under the regulations prescribed by IIROC, the Partnership’s Canada broker-dealer subsidiary is required to maintain minimum levels of risk-adjusted capital, which are dependent on the nature of the Partnership’s Canada broker-dealer subsidiary’s assets and operations.

The following table shows the Partnership’s capital figures for its U.S. and Canada broker-dealer subsidiaries as of:


	June 25,			December 31,			September 24,			December 31,
	2021			2020			2021			2020
U.S.:
Net capital	$	1,348		$	1,306		$	1,523		$	1,306
Net capital in excess of the minimum required	$	1,285		$	1,248		$	1,456		$	1,248
Net capital as a percentage of aggregate debit items		42.7	%		45.0	%		45.4	%		45.0	%
Net capital after anticipated capital withdrawals, as a percentage of aggregate debit items		21.6	%		23.1	%		24.4	%		23.1	%

Canada:
Regulatory risk-adjusted capital	$	52		$	56		$	61		$	56
Regulatory risk-adjusted capital in excess of the minimum required to be held by IIROC	$	52		$	47		$	48		$	47

U.S. net capital, Canada regulatory risk-adjusted capital and the related capital percentages may fluctuate on a daily basis.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements, continued

~~Item 1.~~

~~Financial Statements, continued~~

~~U.S. net capital, Canada regulatory risk-adjusted capital and the related capital percentages may fluctuate on a daily basis.~~

NOTE 7 – CONTINGENCIES

In the normal course of its business, the Partnership is involved, from time to time, in various legal and regulatory matters, including arbitrations, class actions, other litigation, and examinations, investigations and proceedings by governmental authorities, self-regulatory organizations and other regulators, which may result in losses. These matters include:

Wage-and-Hour Class Action. On March 13, 2018, JFC and Edward Jones were named as defendants in a purported collective and class action lawsuit (Bland, et al. v. Edward D. Jones & Co., L.P, et al.) filed in the U.S. District Court for the Northern District of Illinois by four former financial advisors. The lawsuit was brought under the Fair Labor Standards Act (FLSA) as well as Missouri and Illinois law and alleges that the defendants unlawfully attempted to recoup training costs from departing financial advisors and failed to pay all overtime owed to financial advisor trainees among other claims. The lawsuit seeks declaratory and injunctive relief, compensatory and liquidated damages. On March 19, 2019, the court entered an order granting the defendants' motion to dismiss all claims, but permitting the plaintiffs to amend and re-file certain of their claims. Plaintiffs filed an amended complaint on May 3, 2019. On March 30, 2020, the court partially granted the defendants' renewed motion to dismiss the amended complaint and dismissed seven of the ten causes of action it purported to state. The court's order eliminated from the case any claims that rely upon the firm's contractual right to recoup training costs as well as related claims for declaratory relief. It also dismissed various state law claims. JFC and Edward Jones deny the allegations in the remaining counts and intend to vigorously defend against the allegations in this lawsuit.

Securities Class Action. On March 30, 2018, Edward Jones and its affiliated entities and individuals were named as defendants in a putative class action (Anderson, et al. v. Edward D. Jones & Co., L.P., et al.) filed in the U.S. District Court for the Eastern District of California. The lawsuit was brought under the Securities Act of 1933, as amended (the "Securities Act"), and the Exchange Act, as well as Missouri and California law and alleges that the defendants inappropriately transitioned client assets from commission-based accounts to fee-based programs. The plaintiffs requested declaratory, equitable, and exemplary relief, and compensatory damages. On July 9, 2019, the district court entered an order dismissing the lawsuit in its entirety without prejudice. On July 29, 2019, the plaintiffs filed a second amended complaint, which eliminated certain affiliated entities and individuals as defendants, withdrew the claims under the Securities Act, added claims under the Investment Advisers Act of 1940, as amended (the "Investment Advisers Act"), and certain additional state law claims, and reasserted the remaining claims with modified allegations. The defendants filed a motion to dismiss, the plaintiffs subsequently withdrew their Investment Advisers Act claims, and on November 12, 2019, the district court granted defendants' motion to dismiss. The plaintiffs appealed the district court's dismissal of certain of their state law claims but did not appeal the dismissal of the remaining claims. On March 4, 2021, the U.S. Court of Appeals for the Ninth Circuit reversed the district court's decision, holding the district court has jurisdiction over the state law claims that were the subject of the plaintiffs' appeal, and remanded the case to the district court for further proceedings on those claims. On May 14, 2021, the Ninth Circuit panel denied defendants' April 19, 2021 petition for panel rehearing and rehearing en banc. On ~~May 20,~~October 12, 2021, defendants filed ~~a motion to stay further proceedings pending defendants' filing of~~ a petition for certiorari with the U.S. Supreme ~~Court, which~~Court. Pursuant to the Ninth ~~Circuit granted on~~Circuit's order dated May 21, ~~2021.~~2021, further proceedings in the lower courts remain stayed until after the conclusion of all proceedings before the Supreme Court. Edward Jones and its affiliated entities and individuals deny the plaintiffs' allegations and intend to continue to vigorously defend this lawsuit.

Discrimination Class Action. On May 24, 2018, Edward Jones and JFC were named as defendants in a putative class action lawsuit (Bland v. Edward D. Jones & Co., L.P., et al.) filed in the U.S. District Court for the Northern District of Illinois by a former financial advisor under 42 U.S.C. § 1981, alleging that the defendants discriminated against the former financial advisor and other financial advisors and financial advisor trainees on the basis of race. On July 27, 2018, two named plaintiffs filed an amended complaint adding allegations of discrimination and retaliation under 42 U.S.C. § 2000e, Title VII of the Civil Rights Act of 1964 and retaliation under 42 U.S.C. § 1981. Three named plaintiffs filed a second amended complaint on November 26, 2018 and a third amended complaint on December 30, 2020. The plaintiffs sought equitable and injunctive relief, as well as compensatory and punitive damages. On May 4, 2021, the district court granted a motion plaintiffs filed on March 19, 2021 seeking preliminary approval of a settlement agreement reached by the parties. On July 1, 2021, plaintiffs filed a motion seeking final approval of the settlement. The district court granted the motion at a hearing on July 12, 2021 and issued a final approval order on July 15, 2021. The settlement is in the process of being administered.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements, continued

~~Financial Statements, continued~~

Reimbursement Class Action. On April 25, 2019, Edward Jones and JFC were named as defendants in a putative class action (Watson, et al. v. The Jones Financial Companies L.L.L.P., et al.) filed by two former financial advisors in the Superior Court of the State of California, Sacramento County. Plaintiffs allege that defendants did not reimburse financial advisors and financial advisor trainees in California for certain categories of business expenses, which plaintiffs allege violates the California Labor Code and California Unfair Competition Law. The lawsuit seeks damages and restitution as well as attorneys' fees and costs and equitable and injunctive relief. On February 19, 2020, the plaintiffs filed a motion seeking the court's approval of a proposed class action settlement reached by the parties. On November 16, 2020, the court granted final approval of the settlement. Administration of the settlement ~~is substantially complete.~~has been completed.

In addition to these matters, the Partnership provides for potential losses that may arise related to other contingencies. The Partnership assesses its liabilities and contingencies utilizing available information. The Partnership accrues for potential losses for those matters where it is probable that the Partnership will incur a potential loss to the extent that the amount of such potential loss can be reasonably estimated, in accordance with Financial Accounting Standards Board Accounting Standards Codification No. 450, Contingencies. This liability represents the Partnership’s estimate of the probable loss at ~~June 25,~~September 24, 2021, after considering, among other factors, the progress of each case, the Partnership's experience with other legal and regulatory matters and discussion with legal counsel, and is believed to be sufficient. The aggregate accrued liability is within the accounts payable, accrued expenses and other line of the Consolidated Statements of Financial Condition and may be adjusted from time to time to reflect any relevant ~~developments.~~developments.

For such matters where an accrued liability has not been established and the Partnership believes a loss is both reasonably possible and estimable, as well as for matters where an accrued liability has been recorded but for which an exposure to loss in excess of the amount accrued is both reasonably possible and estimable, the current estimated aggregated range of additional possible loss is up to ~~$13~~$12 as of ~~June 25,~~September 24, 2021. This range of reasonably possible loss does not necessarily represent the Partnership's maximum loss exposure as the Partnership was not able to estimate a range of reasonably possible loss for all matters.

Further, the matters underlying any disclosed estimated range will change from time to time, and actual results may vary significantly. While the outcome of these matters is inherently uncertain, based on information currently available, the Partnership believes that its established liabilities at ~~June 25,~~September 24, 2021 are adequate, and the liabilities arising from such matters will not have a material adverse effect on the consolidated financial position, results of operations or cash flows of the Partnership. However, based on future developments and the potential unfavorable resolution of these matters, the outcome could be material to the Partnership’s future consolidated operating results for a particular period or periods.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements, continued

~~Item 1.~~

~~Financial Statements, continued~~

NOTE 8 – SEGMENT INFORMATION

The Partnership has determined it has 2 operating and reportable segments based upon geographic location, the U.S. and Canada. Canada segment information, as reported in the following table, is based upon the consolidated financial statements of the Partnership's Canada operations, which primarily occur through a non-guaranteed subsidiary of the Partnership. The U.S. segment information is derived from the Consolidated Financial Statements less the Canada segment information as presented. Pre-variable income represents income before variable compensation expense and before allocations to partners. This is consistent with how management reviews the segments to assess performance.

The following table shows financial information for the Partnership’s reportable segments:


	Three Months Ended				Six Months Ended				Three Months Ended					Nine Months Ended
	June 25, 2021		June 26, 2020		June 25, 2021		June 26, 2020		September 24, 2021		September 25, 2020			September 24, 2021		September 25, 2020
Net revenue:
U.S.	$	2,954	$	2,261	$	5,733	$	4,684	$	3,052	$	2,469		$	8,785	$	7,153
Canada		80		64		154		132		88		58			242		190
Total net revenue	$	3,034	$	2,325	$	5,887	$	4,816	$	3,140	$	2,527		$	9,027	$	7,343

Pre-variable income:
U.S.	$	915	$	569	$	1,756	$	1,205	$	884	$	689		$	2,640	$	1,894
Canada		13		9		21		14		22		3			43		17
Total pre-variable income	$	928	$	578	$	1,777	$	1,219	$	906	$	692		$	2,683	$	1,911

Variable compensation:
U.S.	$	473	$	283	$	933	$	614	$	496	$	369		$	1,429	$	983
Canada		12		7		21		14		10		7			31		21
Total variable compensation	$	485	$	290	$	954	$	628	$	506	$	376		$	1,460	$	1,004

Income before allocations to partners:
Income (loss) before allocations to partners:
U.S.	$	442	$	286	$	823	$	591	$	388	$	320		$	1,211	$	911
Canada		1		2		0		0		12		(4	)		12		(4	)
Total income before allocations to partners	$	443	$	288	$	823	$	591	$	400	$	316		$	1,223	$	907

~~PART I. FINANCIAL INFORMATION~~

~~Item 1.~~

~~Financial Statements, continued~~

NOTE 9 – OFFSETTING ASSETS AND LIABILITIES

The Partnership does not offset financial instruments in the Consolidated Statements of Financial Condition. However, the Partnership enters into master netting arrangements with counterparties for securities purchased under agreements to resell that are subject to net settlement in the event of default. These agreements create a right of offset for the amounts due to and due from the same counterparty in the event of default or bankruptcy.

The following table shows the Partnership's securities purchased under agreements to resell as of:


	Gross amounts of		Gross amounts offset in the Consolidated Statements of		Net amounts presented in the Consolidated Statements of		Gross amounts not offset in the Consolidated Statements of Financial Condition
	recognized assets		Financial Condition		Financial Condition		Financial instruments		Securities collateral(1)			Net amount
September 24, 2021	$	1,500		0		1,500		0		(1,500	)	$	0
December 31, 2020	$	1,714	0			1,714	0			(1,714	)	$	0

Gross
amounts of

Gross
amounts
offset in the
Consolidated
Statements of

Net amounts
presented in the
Consolidated
Statements of

Gross amounts not offset
in the
Consolidated Statements of
Financial Condition

recognized
assets

Financial
Condition

Financial
Condition

Financial
instruments

Securities
collateral⁽¹⁾

Net
amount

June 25, 2021

$
1,085

0

1,085

0

(1,085
)

$
0

December 31, 2020

$
1,714

0

1,714

0

(1,714
)

$
0

(1)

Actual collateral was 102% of the related assets in U.S. agreements and 100% in Canada agreements as of all dates presented.

⁽¹⁾

PART I. FINANCIAL INFORMATION

~~Actual collateral was 102% of the related assets in U.S. agreements and 100% in Canada agreements as of all dates presented.~~

Item 1. Financial Statements, continued

NOTE 10 – CASH FLOW INFORMATION

The following table shows supplemental cash flow information for:


	Nine Months Ended
	September 24, 2021		September 25, 2020
Non-cash activities:
Issuance of general partnership interests through partnership loans in current period	$	222	$	163
Repayment of partnership loans through distributions from partnership capital in current period	$	212	$	160

Six Months Ended

June 25,
2021

June 26,
2020

Non-cash activities:

Issuance of general partnership interests through
partnership loans in current period

$
220

$
163

Repayment of partnership loans through distributions from
partnership capital in current period

$
166

$
135

The following table reconciles certain line items on the Consolidated Statements of Financial Condition to the cash, cash equivalents and restricted cash balance on the Consolidated Statements of Cash Flows as of:


	June 25, 2021		June 26, 2020		September 24, 2021		September 25, 2020
Cash and cash equivalents	$	1,316	$	1,228	$	1,731	$	1,026
Cash and investments segregated under federal regulations		17,791		13,012		17,691		14,682
Less: Investments segregated under federal regulations		12,125		8,096		11,870		8,797
Total cash, cash equivalents and restricted cash	$	6,982	$	6,144	$	7,552	$	6,911

Restricted cash represents cash segregated in special reserve bank accounts for the benefit of U.S. clients pursuant to Rule 15c3-3 under the Exchange Act.

PART I. FINANCIAL INFORMATION

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

~~ITEM 2.~~

~~MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS~~

The following Management’s Discussion and Analysis is intended to help the reader understand the results of operations and the financial condition of the Partnership. Management’s Discussion and Analysis should be read in conjunction with the Consolidated Financial Statements and accompanying notes included in Part I, Item 1 – Financial Statements of this Quarterly Report on Form 10-Q, the Quarterly ~~Report~~Reports on Form 10-Q for the ~~period~~periods ended March 26, 2021 and June 25, 2021, and Part II, Item 8 – Financial Statements and Supplementary Data of the Partnership’s Annual Report. All amounts are presented in millions, except as otherwise noted.

Basis of Presentation

The Partnership broadly categorizes its net revenues into four categories: fee revenue, trade revenue, net interest and dividends revenue (net of interest expense) and other revenue. In the Partnership’s Consolidated Statements of Income, fee revenue is composed of asset-based fees and account and activity fees. Asset-based fees are generally a percentage of the total value of specific assets in client accounts. These fees are impacted by client dollars invested in and divested from the accounts which generate asset-based fees and changes in market values of the assets. Account and activity fees and other revenue are impacted by the number of client accounts and the variety of services provided to those accounts, among other factors. Trade revenue is composed of commissions and principal transactions revenue. Commissions are earned from the purchase or sale of mutual fund shares and equities, as well as the purchase of insurance products. Principal transactions revenue primarily results from the Partnership's distribution of, and participation in, principal trading activities in municipal obligations, over-the-counter corporate obligations and certificates of deposit. Trade revenue is impacted by trading volume (client dollars invested), mix of the products in which clients invest, size of trades, margins earned on the transactions and market volatility. Net interest and dividends revenue is impacted by the amount of cash and investments, receivables from and payables to clients, the variability of interest rates earned and paid on such balances, the number of Interests outstanding, and the balances of Partnership loans.

COVID-19

Beginning in 2020, the COVID-19 pandemic and the global governmental response, vaccination, and related impact on society and the economy have resulted in significant uncertainty in the global economy and volatility in financial markets (see Management's Discussion and Analysis of Financial Condition and Results of Operations and the Consolidated Financial Statements and notes thereto included in Part II, Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations and Part II, Item 8 – Financial Statements and Supplementary Data of the Partnership’s Annual Report, respectively). Further economic and market events related to COVID-19 could negatively impact our future business operations and financial results.

PART I. FINANCIAL INFORMATION

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations, continued

OVERVIEW

~~Item 2.~~

~~Management's Discussion and Analysis of Financial Condition and Results of Operations, continued~~

~~OVERVIEW~~

The following table sets forth the changes in major categories of the Consolidated Statements of Income as well as several related key metrics for the three- and ~~six-month~~nine-month periods ended ~~June 25,~~September 24, 2021 and ~~June 26,~~September 25, 2020. Management of the Partnership relies on this financial information and the related metrics to evaluate the Partnership’s operating performance and financial condition.


	Three Months Ended									Nine Months Ended
	Sept 24,			Sept 25,			%			Sept 24,			Sept 25,			%
	2021			2020			Change			2021			2020			Change
Revenue:
Fee revenue:
Asset-based	$	2,535		$	1,926			32	%	$	7,129		$	5,450			31	%
Account and activity		172			163			6	%		513			494			4	%
Total fee revenue		2,707			2,089			30	%		7,642			5,944			29	%
% of net revenue		86	%		83	%		4	%		85	%		81	%		5	%
Trade revenue		402			398			1	%		1,281			1,286			—
% of net revenue		13	%		16	%		-19	%		14	%		18	%		-22	%
Net interest and dividends		18			16			13	%		49			85			-42	%
Other revenue, net		13			24			-46	%		55			28			96	%
Net revenue		3,140			2,527			24	%		9,027			7,343			23	%
Operating expenses		2,740			2,211			24	%		7,804			6,436			21	%
Income before allocations to partners	$	400		$	316			27	%	$	1,223		$	907			35	%

Related metrics:
Client dollars invested ($ billions)(1):
Trade	$	24		$	26			-8	%	$	79		$	88			-10	%
Advisory programs	$	19		$	10			90	%	$	57		$	28			104	%
Client households at period end		5.9			5.6			5	%		5.9			5.6			5	%
Net new assets for the period ($ billions)(2)	$	22		$	13			69	%	$	65		$	47			38	%
Client assets under care ($ billions):
Total:
At period end	$	1,757		$	1,384			27	%	$	1,757		$	1,384			27	%
Average	$	1,743		$	1,372			27	%	$	1,662		$	1,317			26	%
Advisory programs:
At period end	$	673		$	488			38	%	$	673		$	488			38	%
Average	$	662		$	481			38	%	$	621		$	453			37	%
Financial advisors (actual):
At period end		18,829			19,342			-3	%		18,829			19,342			-3	%
Average		18,849			19,252			-2	%		18,960			19,076			-1	%
Attrition %(3)		6.0	%		6.8	%	n/a				7.0	%		6.4	%	n/a
Dow Jones Industrial Average (actual):
At period end		34,798			27,174			28	%		34,798			27,174			28	%
Average for period		34,917			27,199			28	%		33,525			26,135			28	%
S&P 500 Index (actual):
At period end		4,455			3,298			35	%		4,455			3,298			35	%
Average for period		4,417			3,306			34	%		4,155			3,101			34	%

Three Months Ended

Six Months Ended

June 25,

June 26,

%

June 25,

June 26,

%

2021

2020

Change

2021

2020

Change

Revenue:

Fee revenue:

Asset-based

$
2,385

$
1,718

39
%

$
4,594

$
3,524

30
%
Account and activity

171

160

7
%

341

331

3
%
Total fee revenue

2,556

1,878

36
%

4,935

3,855

28
%
% of net revenue

84
%

81
%

4
%

84
%

80
%

5
%
Trade revenue

437

395

11
%

879

888

-1
%
% of net revenue

14
%

17
%

-15
%

15
%

18
%

-19
%
Net interest and dividends

17

18

-6
%

31

69

-55
%
Other revenue, net

24

34

29
%

42

4

950
%
Net revenue

3,034

2,325

30
%

5,887

4,816

22
%
Operating expenses

2,591

2,037

27
%

5,064

4,225

20
%
Income before allocations to partners

$
443

$
288

54
%

$
823

$
591

39
%

Related metrics:

Client dollars invested ($ billions)⁽¹⁾:

Trade

$
27

$
27

—

$
55

$
62

-11
%
Advisory programs

$
20

$
8

150
%

$
38

$
18

111
%
Client households at period end

5.8

5.6

4
%

5.8

5.6

4
%
Net new assets for the period ($ billions)⁽²⁾

$
23

$
15

53
%

$
43

$
34

26
%
Client assets under care ($ billions):

Total:

At period end

$
1,714

$
1,305

31
%

$
1,714

$
1,305

31
%
Average

$
1,674

$
1,249

34
%

$
1,624

$
1,283

27
%
Advisory programs:

At period end

$
646

$
452

43
%

$
646

$
452

43
%
Average

$
625

$
428

46
%

$
600

$
438

37
%
Financial advisors (actual):

At period end

18,855

19,161

-2
%

18,855

19,161

-2
%
Average

18,913

19,121

-1
%

19,008

18,987

—

Attrition %⁽³⁾

6.6
%

5.0
%

n/a

7.4
%

6.3
%

n/a

Dow Jones Industrial Average (actual):

At period end

34,434

25,016

38
%

34,434

25,016

38
%
Average for period

34,045

24,413

39
%

32,801

25,576

28
%
S&P 500 Index (actual):

At period end

4,281

3,009

42
%

4,281

3,009

42
%
Average for period

4,165

2,911

43
%

4,018

2,994

34
%
(1)

Client dollars invested for trade revenue represents the principal amount of clients’ buy and sell transactions resulting in revenue and for advisory programs revenue represents the net of the inflows and outflows of client dollars into advisory programs.

(2)

Net new assets represents cash and securities inflows and outflows from new and existing clients and excludes mutual fund capital gain distributions received by U.S. clients.

(3)

Attrition % represents the annualized number of financial advisors that left the firm during the period compared to the total number of financial advisors as of period end.

⁽¹⁾	Client dollars invested for trade revenue represents the principal amount of clients’ buy and sell transactions resulting in revenue and for advisory programs revenue represents the net of the inflows and outflows of client dollars into advisory programs.

⁽²⁾	~~Net new assets represents cash and securities inflows and outflows from new and existing clients and excludes mutual fund capital gain distributions received by U.S. clients.~~

⁽³⁾	~~Attrition % represents the annualized number of financial advisors that left the firm during the period compared to the total number of financial advisors as of period end.~~

PART I. FINANCIAL INFORMATION

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations, continued

~~Management's Discussion and Analysis of Financial Condition and Results of Operations, continued~~

~~Second~~Third Quarter 2021 versus ~~Second~~Third Quarter 2020 Overview

The Partnership ended the ~~second~~third quarter of 2021 with a ~~31%~~27% increase in client assets under care to ~~$1.7~~$1.8 trillion compared to the end of the ~~second~~third quarter of 2020. Average client assets under care were ~~also~~ $1.7 trillion during the ~~second~~third quarter of 2021, a ~~34%~~27% increase comparedto the same period in 2020 due to increases in the market value of client assets, as well as the cumulative impact of ~~client dollars invested.~~net new assets. Net new assets increased ~~53%~~69% to ~~$23~~$22 billion during the ~~second~~third quarter of 2021 compared to the ~~second~~third quarter of 2020.

Advisory programs' average assets under care increased ~~46%~~38% to ~~$625~~$662 billion in the ~~second~~third quarter of 2021 due to higher average market levels compared to the same period in 2020 and the continued increase in investment of client assets into advisory programs.

Net revenue increased ~~30%~~24% to ~~$3,034~~$3,140 for the ~~second~~third quarter of 2021 compared to the same period in 2020. Results reflected a ~~39%~~32% increase in asset-based fee revenue, primarily due to average market increases, as well as the cumulative impact of net asset inflows into advisory programs in both 2021 and 2020.~~The increase in net revenue was also due~~

Operating expenses increased 24% to ~~an 11% increase in trade revenue~~$2,740 in the ~~second~~third quarter of 2021 compared to the ~~same period in 2020. Trade revenue increased primarily due to higher overall margins earned.~~

~~Operating expenses increased 27% to $2,591 in the second quarter of 2021 compared to the second~~third quarter of 2020, primarily due to an increase in compensation and benefits ~~expense.~~expense and other operating expenses. Financial advisor compensation increased due to an increase in revenues on which commissions are earned. Variable compensation increased due to increases in the Partnership's profitability, including an increase in the number of profitable branches and an overall increase in branch profitability. The increase in other operating expenses was primarily due to increases in advertising, legal, and other various items. Despite the increase in operating expenses, the Partnership continued to experience ongoing cost savings from limits on travel and in-person events due to COVID-19.

Overall, the increase in net revenue, offset by the increase in operating expenses, generated income before allocations to partners of ~~$443,~~$400, a ~~54%~~27% increase from the ~~second~~third quarter of 2020.

~~Six~~Nine Months Ended June 25, 2021 versus ~~Six~~Nine Months Ended June 26, 2020 Overview

Average client assets under care increased ~~27%~~26% to ~~$1.6~~$1.7 trillion during the first ~~half~~nine months of 2021 compared to the same period in 2020 due to increases in the market value of client assets, as well as the cumulative impact of ~~client dollars invested.~~net new assets. Net new assets increased ~~26%~~38% to ~~$43~~$65 billion during the first ~~half~~nine months of 2021 compared to the first ~~half~~nine months of 2020.

Advisory programs' average assets under care increased 37% in the first ~~half~~nine months of 2021 to ~~$600~~ $621 billion due to higher average market levels compared to the same period in 2020 and the continued increase in investment of client assets into advisory programs.

Net revenue increased ~~22%~~23% to ~~$5,887~~$9,027 for the first ~~half~~nine months of 2021 compared to the same period in 2020. Results reflected a ~~30%~~31% increase in asset-based fee revenue, primarily due to average market increases, as well as the cumulative impact of net asset inflows into advisory programs in both 2021 and 2020.

Operating expenses increased ~~20%~~21% to ~~$5,064~~$7,804 in the first ~~half~~nine months of 2021 compared to 2020, primarily due to an increase in compensation and benefits expense. Financial advisor compensation increased largely due to an increase in revenues on which commissions are earned. Variable compensation increased due to increases in the Partnership's profitability, including an increase in the number of profitable branches and an overall increase in branch profitability. Despite the increase in operating expenses, the Partnership continued to experience ongoing cost savings from limits on travel and in-person events due to COVID-19.

Overall, the increase in net revenue, offset by the increase in operating expenses, generated income before allocations to partners of ~~$823,~~$1,223, a ~~39%~~35% increase from the first ~~half~~nine months of 2020.

~~PART I. FINANCIAL INFORMATION~~

~~Item 2.~~

~~Management's Discussion and Analysis of Financial Condition and Results of Operations, continued~~

The COVID-19 pandemic and the global governmental response, vaccination, and related impact on society and the economy have resulted in significant uncertainty in the global economy and volatility in financial markets. Further economic and market events related to COVID-19 could negatively impact our future business operations and financial results.

PART I. FINANCIAL INFORMATION

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations, continued

The Partnership continues to assess its response to the COVID-19 pandemic. In the event the Partnership begins to experience adverse impacts in response to further economic or market events, the Partnership may consider resuming or adopting measures to reduce future operating expenses.

RESULTS OF OPERATIONS FOR THE THREE- AND ~~SIX-MONTH~~NINE-MONTH PERIODS ENDED ~~JUNE 25,~~SEPTEMBER 24, 2021 AND ~~JUNE 26,~~SEPTEMBER 25, 2020

The discussion below details the significant fluctuations and their drivers for each of the major categories of the Partnership’s Consolidated Statements of Income.

~~PART I. FINANCIAL INFORMATION~~

~~Item 2.~~

~~Management's Discussion and Analysis of Financial Condition and Results of Operations, continued~~

Fee Revenue

Fee revenue, which consists of asset-based fees and account and activity fees, increased ~~36%~~30% to ~~$2,556~~$2,707 and ~~28%~~29% to ~~$4,935~~$7,642 in the ~~second~~third quarter and first ~~half~~nine months of 2021, respectively, compared to the same periods in 2020. A discussion of fee revenue components follows.


	Three Months Ended							Nine Months Ended
	Sept 24,		Sept 25,		%			Sept 24,		Sept 25,		%
	2021		2020		Change			2021		2020		Change
Fee revenue:
Asset-based fee revenue:
Advisory programs fees	$	1,938	$	1,431		35	%	$	5,418	$	3,989		36	%
Service fees		432		353		22	%		1,240		1,016		22	%
Other asset-based fees		165		142		16	%		471		445		6	%
Total asset-based fee revenue		2,535		1,926		32	%		7,129		5,450		31	%
Account and activity fee revenue:
Shareholder accounting services fees		109		106		3	%		325		319		2	%
Other account and activity fee revenue		63		57		11	%		188		175		7	%
Total account and activity fee revenue		172		163		6	%		513		494		4	%
Total fee revenue	$	2,707	$	2,089		30	%	$	7,642	$	5,944		29	%

Related metrics:
Average U.S. client asset values ($ billions)(1):
Advisory programs	$	650.6	$	473.1		38	%	$	609.8	$	446.3		37	%
Mutual fund assets held outside of advisory programs	$	592.2	$	474.4		25	%	$	567.4	$	455.1		25	%
Insurance	$	90.9	$	77.8		17	%	$	88.6	$	75.8		17	%
Cash solutions	$	49.2	$	40.6		21	%	$	48.8	$	38.3		27	%

Three Months Ended

Six Months Ended

June 25,

June 26,

%

June 25,

June 26,

%

2021

2020

Change

2021

2020

Change

Fee revenue:

   Asset-based fee revenue:

Advisory programs fees

$
1,813

$
1,258

44
%

$
3,480

$
2,558

36
%
Service fees

417

323

29
%

808

663

22
%
Other asset-based fees

155

137

13
%

306

303

1
%
Total asset-based fee revenue

2,385

1,718

39
%

4,594

3,524

30
%
   Account and activity fee revenue:

Shareholder accounting services fees

109

104

5
%

216

213

1
%
Other account and activity fee revenue

62

56

11
%

125

118

6
%
Total account and activity fee revenue

171

160

7
%

341

331

3
%
   Total fee revenue

$
2,556

$
1,878

36
%

$
4,935

$
3,855

28
%

Related metrics:

Average U.S. client asset values
   ($ billions)⁽¹⁾:

Advisory programs

$
613.7

$
420.8

46
%

$
589.9

$
430.9

37
%
Mutual fund assets held outside of
   advisory programs

$
571.3

$
430.5

33
%

$
555.6

$
443.6

25
%
Insurance

$
89.0

$
72.3

23
%

$
87.5

$
74.6

17
%
Cash solutions

$
48.9

$
38.7

26
%

$
48.7

$
37.1

31
%

(1)

Assets on which the Partnership earns asset-based fee revenue. The U.S. portion of consolidated asset-based fee revenue was approximately 98% for the periods presented.

⁽¹⁾	~~Assets on which the Partnership earns asset-based fee revenue. The U.S. portion of consolidated asset-based fee revenue was approximately 98% for the periods presented.~~

Overall asset-based fee revenue increased ~~39%~~32% to ~~$2,385~~$2,535 and ~~30%~~31% to ~~$4,594~~$7,129 in the ~~second~~third quarter and first ~~half~~nine months of 2021, respectively, compared to the same periods in 2020, primarily due to increases in revenue from advisory programs fees, as well as increases in service fee revenue. Growth in revenue from advisory programs and service fees was due to higher average market levels in the ~~second~~third quarter and first ~~half~~nine months of 2021 compared to the same periods in 2020, as well as the continued increase in investment of client assets in advisory programs and mutual fund assets held outside of advisory programs. Other asset-based fee revenue increased in the ~~second~~third quarter and first ~~half~~nine months of 2021 compared to the same periods in 2020 due to the growth in client asset values in non-advisory programs. These increases were partially offset by declines in cash solutions revenue related to the Money Market Fund, which continues to be negatively impacted by increased fee waivers in order to maintain a positive client yield on the Money Market Fund following the decrease in the federal funds rate to near zero in March 2020.

2221

PART I. FINANCIAL INFORMATION

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations, continued

~~Item 2.~~

~~Management's Discussion and Analysis of Financial Condition and Results of Operations, continued~~

Trade Revenue

Trade revenue, which consists of commissions and principal transactions, increased ~~11%~~1% to ~~$437~~$402 and decreased 1%slightly to ~~$879~~$1,281 in the ~~second~~third quarter and first ~~half~~nine months of 2021, respectively, compared to the same periods in 2020. A discussion of trade revenue components follows.


	Three Months Ended									Nine Months Ended
	Sept 24,			Sept 25,			%			Sept 24,			Sept 25,			%
	2021			2020			Change			2021			2020			Change
Trade revenue:
Commissions revenue:
Mutual funds	$	186		$	171			9	%	$	593		$	525			13	%
Equities		131			150			-13	%		447			521			-14	%
Insurance products and other		75			65			15	%		211			195			8	%
Total commissions revenue	$	392		$	386			2	%	$	1,251		$	1,241			1	%
Principal transactions		10			12			-17	%		30			45			-33	%
Total trade revenue	$	402		$	398			1	%	$	1,281		$	1,286			—

Related metrics:
Client dollars invested ($ billions)(1)
Mutual funds	$	11.7	48%	$	10.2	40%		15	%	$	36.3	46%	$	29.9	34%		21	%
Equities		9.0	37%		10.3	41%		-13	%		31.0	39%		35.0	40%		-11	%
Insurance products and other		1.6	7%		1.6	6%		—			5.0	7%		4.6	5%		9	%
Principal transactions		2.0	8%		3.1	13%		-35	%		6.5	8%		18.2	21%		-64	%
Total client dollars invested	$	24.3		$	25.2			-4	%	$	78.8		$	87.7			-10	%

Margin per $1,000 invested	$	16.6		$	15.8			5	%	$	16.3		$	14.7			11	%
U.S. business days		63			63			—			184			186			-1	%

Three Months Ended

Six Months Ended

June 25,

June 26,

%

June 25,

June 26,

%

2021

2020

Change

2021

2020

Change

Trade revenue:

Commissions revenue:

Mutual funds

$
206

$
150

37
%

$
407

$
354

15
%
Equities

148

164

-10
%

316

371

-15
%
Insurance products and other

72

64

13
%

136

130

5
%
Total commissions revenue

$
426

$
378

13
%

$
859

$
855

—

Principal transactions

11

17

-35
%

20

33

-39
%
Total trade revenue

$
437

$
395

11
%

$
879

$
888

-1
%

Related metrics:

Client dollars invested ($ billions)⁽¹⁾

Mutual funds

$
13

49%

$
8

30%

63
%

$
25

46%

$
19

31%

32
%
Equities

10

37%

11

41%

-9
%

22

40%

25

40%

-12
%
Insurance products and other

2

7%

2

7%

—

4

7%

3

5%

33
%
Principal transactions

2

7%

6

22%

-67
%

4

7%

15

24%

-73
%
Total client dollars invested

$
27

$
27

—

$
55

$
62

-11
%

Margin per $1,000 invested

$
16.4

$
14.8

11
%

$
16.1

$
14.3

13
%
U.S. business days

63

63

—

121

123

-2
%
(1)

Percentages represent client dollars invested in each product as a percent of total client dollars invested.

~~(1)~~

~~Percentages represent client dollars invested in each product as a percent of total client dollars invested.~~

The ~~11%~~1% increase in trade revenue in the ~~second~~third quarter of 2021 compared to the same period in 2020 was primarily due to increases in overall margin earned. Overall margin earned increased due to a change in product mix with a higher portion of client dollars invested in mutual funds and insurance products, which earn higher margins than equities and principal transaction products. Despite higher overall margins, margins earned on mutual funds have decreased due to changes in mutual fund fee structures, which has partially offset the increase in mutual funds revenue. ~~Principal transactions~~The increase in trade revenue ~~decreased as a result of~~was partially offset by a decrease in equity commissions revenue due to lower client dollars invested ~~with lower interest rates on those products~~in equities compared to the ~~second~~third quarter of 2020.

The 1%slight decrease in trade revenue for the first ~~half~~nine months of 2021 compared to the same period in 2020 was primarily due to decreases in equity commissions ~~revenue and principal transactions~~ revenue. The decrease in equity commissions revenue was primarily due to lower client dollars invested in equities compared to the first ~~half~~nine months of 2020, which had lower securities prices with market volatility related to COVID-19. The decrease in equity commissions revenue was partially offset by an increase in other commissions revenue in the first ~~half~~nine months of 2021 compared to the same period in 2020, primarily due to a change in the product mix with a higher portion of client dollars invested in mutual funds, which earn higher margins than equities and principal transaction products, resulting in an overall higher margin earned compared to the second half of 2020. Principal transactions revenue decreased as a result of a decrease in client dollars invested, due to lower interest rates on those products compared to the first half of 2020. earned.

2322

PART I. FINANCIAL INFORMATION

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations, continued

~~Item 2.~~

~~Management's Discussion and Analysis of Financial Condition and Results of Operations, continued~~

Net Interest and Dividends

Net interest and dividends revenue ~~slightly decreased~~increased 13% to ~~$17~~$18 in the ~~second~~third quarter of 2021 compared to the ~~second~~third quarter of 2020 due to ~~lower~~an increase in interest income from higher average ~~interest rates earned on short-term investment~~client margin balances. In the first ~~half~~nine months of 2021, net interest and dividends revenue decreased ~~55%~~42% to ~~$31~~$49 compared to the same period in 2020 primarily due to interest rates remaining at record low levels since the Federal Reserve cut the federal funds effective rate to near zero in March 2020, which began impacting results in the second quarter of 2020 and therefore was only partially reflected in the results of the first ~~half~~nine months of 2020. Despite increases in short-term investment balances and client margin balances in the first ~~half~~nine months of 2021, interest income decreased from lower average interest rates earned on those balances compared to the same period in 2020. The decrease in interest revenue in the first nine months of 2021 was partially offset by a decrease in customer credit interest expense in the first ~~half~~nine months of 2021 compared to the same period in 2020.

The majority of interest expense in the ~~second~~third quarter and first ~~half~~nine months of 2021 consisted of the minimum 7.5% annual return on the face amount of limited partnership capital paid to limited partners. The 7.5% rate is fixed and is not impacted by the low interest rate environment.

2423

PART I. FINANCIAL INFORMATION

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations, continued

~~Item 2.~~

~~Management's Discussion and Analysis of Financial Condition and Results of Operations, continued~~

Operating Expenses

Operating expenses increased ~~27%~~24% to ~~$2,591~~$2,740 and ~~20%~~21% to ~~$5,064~~$7,804 in the ~~second~~third quarter and first ~~half~~nine months of 2021, respectively, compared to the same periods in ~~2020, primarily due to an increase in compensation and benefits expense.~~2020. A discussion of operating expense components follows.


	Three Months Ended							Nine Months Ended
	Sept 24,		Sept 25,		%			Sept 24,		Sept 25,		%
	2021		2020		Change			2021		2020		Change
Operating expenses:
Compensation and benefits:
Financial advisor	$	1,255	$	1,034		21	%	$	3,661	$	3,026		21	%
Home office and branch		441		396		11	%		1,268		1,186		7	%
Variable compensation		506		376		35	%		1,460		1,004		45	%
Total compensation and benefits		2,202		1,806		22	%		6,389		5,216		22	%

Occupancy and equipment		138		131		5	%		407		392		4	%
Communications and data processing		132		100		32	%		351		307		14	%
Fund sub-adviser fees		64		48		33	%		179		134		34	%
Professional and consulting fees		40		28		43	%		105		80		31	%
Other operating expenses		164		98		67	%		373		307		21	%
Total operating expenses	$	2,740	$	2,211		24	%	$	7,804	$	6,436		21	%

Related metrics (actual):
Number of branches:
At period end		15,456		15,403		—			15,456		15,403		—
Average		15,417		15,405		—			15,387		15,286		1	%
Financial advisors:
At period end		18,829		19,342		-3	%		18,829		19,342		-3	%
Average		18,849		19,252		-2	%		18,960		19,076		-1	%
Branch office administrators(1):
At period end		17,302		16,655		4	%		17,302		16,655		4	%
Average		17,320		16,657		4	%		17,137		16,825		2	%
Home office associates(1):
At period end		7,345		6,864		7	%		7,345		6,864		7	%
Average		7,243		6,905		5	%		7,128		7,018		2	%
Home office associates(1) per 100 financial advisors (average)		38.4		35.9		7	%		37.6		36.8		2	%
Branch office administrators(1) per 100 financial advisors (average)		91.9		86.5		6	%		90.4		88.2		2	%
Operating expenses per financial advisor (average)(2)	$	48,544	$	39,113		24	%	$	132,068	$	119,103		11	%

Three Months Ended

Six Months Ended

June 25,

June 26,

%

June 25,

June 26,

%

2021

2020

Change

2021

2020

Change

Operating expenses:

Compensation and benefits:

Financial advisor

$
1,237

$
962

29
%

$
2,406

$
1,992

21
%
Home office and branch

426

394

8
%

827

790

5
%
Variable compensation

485

290

67
%

954

628

52
%
Total compensation and benefits

2,148

1,646

30
%

4,187

3,410

23
%

Occupancy and equipment

135

130

4
%

269

261

3
%
Communications and data processing

115

106

8
%

219

207

6
%
Fund sub-adviser fees

59

44

34
%

115

86

34
%
Professional and consulting fees

34

23

48
%

65

52

25
%
Other operating expenses

100

88

14
%

209

209

—

Total operating expenses

$
2,591

$
2,037

27
%

$
5,064

$
4,225

20
%

Related metrics (actual):

Number of branches:

At period end

15,377

15,356

—

15,377

15,356

—

Average

15,376

15,299

1
%

15,368

15,229

1
%
Financial advisors:

At period end

18,855

19,161

-2
%

18,855

19,161

-2
%
Average

18,913

19,121

-1
%

19,008

18,987

—

Branch office administrators⁽¹⁾:

At period end

17,249

16,632

4
%

17,249

16,632

4
%
Average

17,155

16,824

2
%

17,049

16,894

1
%
Home office associates^(1):

At period end

7,128

6,921

3
%

7,128

6,921

3
%
Average

7,102

7,047

1
%

7,062

7,069

—

Home office associates⁽¹⁾ per 100
   financial advisors (average)

37.6

36.9

2
%

37.2

37.2

—

Branch office administrators⁽¹⁾ per 100
   financial advisors (average)

90.7

88.0

3
%

89.7

89.0

1
%
Operating expenses per
   financial advisor (average)⁽²⁾

$
42,828

$
38,753

11
%

$
83,596

$
80,002

4
%
(1)

Counted on a full-time equivalent basis.

(2)

Operating expenses used in calculation represent total operating expenses less financial advisor compensation, variable compensation and fund sub-adviser fees.

⁽¹⁾	~~Counted on a full-time equivalent basis.~~

⁽²⁾	~~Operating expenses used in calculation represent total operating expenses less financial advisor compensation, variable compensation and fund sub-adviser fees.~~

2524

PART I. FINANCIAL INFORMATION

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations, continued

~~Item 2.~~

~~Management's Discussion and Analysis of Financial Condition and Results of Operations, continued~~

The increase in operating expenses in the ~~second~~third quarter ~~and first half~~ of 2021 compared to the same ~~periods~~period in 2020 was primarily due to compensation and benefits expense increasing 22% to $2,202 (described below) and other operating expenses increasing 67% to $164. The increase in other operating expenses was primarily due to increases in advertising, legal, and other various items.

The increase in operating expenses in the first nine months of 2021 compared to the same period in 2020 was primarily due to compensation and benefits expense (described below) increasing ~~30%~~22% to ~~$2,148 and 23% to $4,187, respectively.~~$6,389.

Financial advisor compensation and benefits expense increased ~~29%~~21% to ~~$1,237~~$1,255 and 21% to ~~$2,406~~$3,661 in the ~~second~~third quarter and first ~~half~~nine months of 2021, respectively, compared to the same periods in 2020 due to an increase in revenues on which commissions are earned.

Variable compensation expands and contracts in relation to the Partnership’s related profitability and margin earned. A significant portion of the Partnership’s profits are allocated to variable compensation and paid to associates in the form of bonuses and profit sharing. Variable compensation increased ~~67%~~35% to ~~$485~~$506 and ~~52%~~45% to ~~$954~~$1,460 in the ~~second~~third quarter and first ~~half~~nine months of 2021, respectively, compared to the same periods in 2020 due to increases in the Partnership's profitability, including an increase in the number of profitable branches and an overall increase in branch profitability.

The Partnership uses the ratios of both the number of home office associates and the number of branch office administrators ("BOAs") per 100 financial advisors, as well as operating expenses per financial advisor (excluding financial advisor compensation, variable compensation and fund sub-adviser fees), as key metrics in managing its costs. The average number of home office associates and BOAs per 100 financial advisors increased 2%7% and 3%6%, respectively, in the ~~second~~third quarter of 2021 compared to the same period in 2020. In the first ~~half~~nine months of 2021, the average number of home office associates and BOAs per 100 financial advisors ~~stayed constant and~~ increased ~~1%, respectively,~~2% compared to the first ~~half~~nine months of 2020. Operating expenses per financial advisor increased ~~11%~~24% and 4%11% in the ~~second~~third quarter and first ~~half~~nine months of 2021, respectively, compared to the same periods in 2020, due to the increase in operating expenses (excluding financial advisor compensation, variable compensation and fund sub-advisor fees), which were spread across a decreased average number of financial advisors in the ~~second~~third quarter ~~of 2021~~ and ~~a slightly increased average number of financial advisors in the~~ first ~~half~~nine months of 2021.

The number of financial advisors decreased ~~306~~513 to ~~18,855~~18,829 at the end of the ~~second~~third quarter of 2021 compared to the end of the same period in the prior year. In response to the COVID-19 pandemic, the Partnership implemented measures to optimize firm resources and control costs, including a temporary pause on the recruitment of non-licensed financial advisors during 2020. The Partnership remains committed to financial advisor growth to continue to serve existing clients and future clients and create a positive impact in our communities by hiring both experienced financial advisors and non-licensed candidates in future periods. The Partnership has restarted hiring and is committed to an innovative and intentional strategy to grow its impact by offering a plan and resources for both current financial advisors and new hires that is intended to help promote branch team success. This approach may continue to result in fewer financial advisors hired than in past periods.

Despite the increase in operating expenses, the Partnership continued to experience ongoing cost savings from limits on travel and in-person events due to COVID-19. The Partnership continues to assess the measures adopted in response to the COVID-19 pandemic. In the event the Partnership begins to experience adverse impacts in response to further economic or market events, the Partnership may consider resuming or adopting measures to reduce future operating expenses.

Segment Information

The Partnership has two operating and reportable segments based upon geographic location, the U.S. and Canada. Canada segment information, as reported in the following table, is based upon the consolidated financial statements of the Partnership’s Canada operations. The U.S. segment information is derived from the Consolidated Financial Statements less the Canada segment information as presented. Pre-variable income represents income before variable compensation expense and before allocations to partners. This is consistent with how management views the segments to assess performance. COVID-19 is a global pandemic that has resulted in significant uncertainty; however, based on current information, the Partnership expects COVID-19 to impact the future financial results of the segments similarly.

PART I. FINANCIAL INFORMATION

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations, continued

The following table shows financial information for the Partnership’s reportable segments.


	Three Months Ended								Nine Months Ended
	Sept 24,		Sept 25,			%			Sept 24,		Sept 25,			%
	2021		2020			Change			2021		2020			Change
Net revenue:
U.S.	$	3,052	$	2,469			24	%	$	8,785	$	7,153			23	%
Canada		88		58			52	%		242		190			27	%
Total net revenue		3,140		2,527			24	%		9,027		7,343			23	%

Operating expenses (excluding variable compensation):
U.S.		2,168		1,780			22	%		6,145		5,259			17	%
Canada		66		55			20	%		199		173			15	%
Total operating expenses		2,234		1,835			22	%		6,344		5,432			17	%

Pre-variable income:
U.S.		884		689			28	%		2,640		1,894			39	%
Canada		22		3			633	%		43		17			153	%
Total pre-variable income		906		692			31	%		2,683		1,911			40	%

Variable compensation:
U.S.		496		369			34	%		1,429		983			45	%
Canada		10		7			43	%		31		21			48	%
Total variable compensation		506		376			35	%		1,460		1,004			45	%

Income (loss) before allocations to partners:
U.S.		388		320			21	%		1,211		911			33	%
Canada		12		(4	)		400	%		12		(4	)		400	%
Total income before allocations to partners	$	400	$	316			27	%	$	1,223	$	907			35	%

Client assets under care ($ billions):
U.S.
At period end	$	1,720.1	$	1,355.4			27	%	$	1,720.1	$	1,355.4			27	%
Average	$	1,705.5	$	1,344.2			27	%	$	1,627.2	$	1,289.7			26	%
Canada
At period end	$	36.8	$	28.3			30	%	$	36.8	$	28.3			30	%
Average	$	37.0	$	27.9			33	%	$	35.1	$	26.9			30	%

Net new assets for the period ($ billions):
U.S.	$	21.5	$	12.9			67	%	$	62.5	$	45.5			37	%
Canada	$	0.9	$	0.3			200	%	$	2.4	$	1.4			71	%

Financial advisors (actual):
U.S.
At period end		17,970		18,433			-3	%		17,970		18,433			-3	%
Average		17,980		18,333			-2	%		18,077		18,170			-1	%
Canada
At period end		859		909			-6	%		859		909			-6	%
Average		869		919			-5	%		883		906			-3	%

PART I. FINANCIAL INFORMATION

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations, continued

U.S.

~~Item 2.~~

~~Management's Discussion and Analysis of Financial Condition and Results of Operations, continued~~

Three Months Ended

Six Months Ended

June 25,

June 26,

%

June 25,

June 26,

%

2021

2020

Change

2021

2020

Change

Net revenue:

U.S.

$
2,954

$
2,261

31
%

$
5,733

$
4,684

22
%
Canada

80

64

25
%

154

132

17
%
Total net revenue

3,034

2,325

30
%

5,887

4,816

22
%

Operating expenses (excluding variable compensation):

U.S.

2,039

1,692

21
%

3,977

3,479

14
%
Canada

67

55

22
%

133

118

13
%
Total operating expenses

2,106

1,747

21
%

4,110

3,597

14
%

Pre-variable income:

U.S.

915

569

61
%

1,756

1,205

46
%
Canada

13

9

44
%

21

14

50
%
Total pre-variable income

928

578

61
%

1,777

1,219

46
%

Variable compensation:

U.S.

473

283

67
%

933

614

52
%
Canada

12

7

71
%

21

14

50
%
Total variable compensation

485

290

67
%

954

628

52
%

Income before allocations to partners:

U.S.

442

286

55
%

823

591

39
%
Canada

1

2

-50
%

—

—

—

Total income before allocations to
partners

$
443

$
288

54
%

$
823

$
591

39
%

Client assets under care ($ billions):

U.S.

At period end

$
1,677.2

$
1,278.9

31
%

$
1,677.2

$
1,278.9

31
%
Average

$
1,638.5

$
1,223.5

34
%

$
1,589.5

$
1,257.0

26
%
Canada

At period end

$
36.7

$
26.6

38
%

$
36.7

$
26.6

38
%
Average

$
35.7

$
25.2

42
%

$
34.2

$
26.2

31
%

Net new assets for the period ($ billions):

U.S.

$
21.7

$
14.6

49
%

$
41.0

$
32.6

26
%
Canada

$
0.7

$
0.5

40
%

$
1.5

$
1.1

36
%

Financial advisors (actual):

U.S.

At period end

17,977

18,221

-1
%

17,977

18,221

-1
%
Average

18,030

18,202

-1
%

18,118

18,084

—

Canada

At period end

878

940

-7
%

878

940

-7
%
Average

883

919

-4
%

890

903

-1
%

~~PART I. FINANCIAL INFORMATION~~

~~Item 2.~~

~~Management's Discussion and Analysis of Financial Condition and Results of Operations, continued~~

~~U.S.~~

Net revenue increased ~~31%~~24% to ~~$2,954~~$3,052 and ~~22%~~23% to ~~$5,733~~$8,785 in the ~~second~~third quarter and first ~~half~~nine months of 2021, respectively, compared to the same periods in 2020 primarily due to an increase in asset-based fee revenue. Asset-based fee revenue increased ~~39% to $2,325 and 30% to $4,482~~31% in both the ~~second~~third quarter and first ~~half~~nine months of 2021 to $2,472 and $6,954, respectively, led by an increase in revenue from advisory programs fees primarily due to higher average market levels in the ~~second~~third quarter and first ~~half~~nine months of 2021 compared to the same periods in 2020, as well as the cumulative impact of net asset inflows into advisory programs.

Operating expenses (excluding variable compensation) increased ~~21%~~22% to ~~$2,039~~$2,168 and ~~14%~~17% to ~~$3,977~~$6,145 in the ~~second~~third quarter and first ~~half~~nine months of 2021, respectively, compared to the same periods in 2020 due to an increase in financial advisor compensation and benefits expense primarily due to an increase in revenues on which commissions are earned.

Canada

Net revenue increased ~~25%~~52% to ~~$80~~$88 and ~~17%~~27% to ~~$154~~$242 in the ~~second~~third quarter and first ~~half~~nine months of 2021, respectively, compared to the same periods in 2020, primarily due to increases in asset-based fee revenue. Asset-based fee revenue increased ~~54%~~40% to ~~$60~~$63 and ~~37%~~38% to ~~$112~~$175 in the ~~second~~third quarter and first ~~half~~nine months of 2021, respectively, led by an increase in revenue from advisory programs fees primarily due to higher average market levels in the ~~second~~third quarter and first ~~half~~nine months of 2021 compared to the same periods in 2020, as well as the cumulative impact of net asset inflows into advisory programs.

Operating expenses (excluding variable compensation) increased ~~22%~~20% to ~~$67~~$66 and ~~13%~~15% to ~~$133~~$199 in the ~~second~~third quarter and first ~~half~~nine months of 2021, respectively, compared to the same periods in 2020 primarily due to an increase in financial advisor compensation and benefits expense. Financial advisor compensation and benefits expense increased primarily due to an increase in revenues on which commissions are earned.

LEGISLATIVE AND REGULATORY REFORM

As discussed more fully in Part I, Item 1A – Risk Factors – Risk Related to the Partnership's Business – Legislative and Regulatory Initiatives of the Partnership’s Annual Report, the Partnership continues to monitor several proposed, potential and recently enacted federal and state legislation, rules and ~~regulations.~~regulations ("Legislative and Regulatory Initiatives"), including, but not limited to:

Canadian Securities Administrators ("CSA") Amendments. On October 3, 2019, the CSA finalized amendments (the "Client Focused Reforms") to National Instrument 31-103, "Registration Requirements, Exemptions and Ongoing Registrant Obligations." The Client Focused Reforms, many of which are similar to the SEC's Rules and Guidance (see Part I, Item 1 – Business – Regulation), make changes to the registrant conduct requirements applicable to the Partnership’s Canada broker-dealer subsidiary. The amendments will become effective over a two-year phased implementation, concluding December 31, 2021. The Partnership is implementing measures to address the Client Focused Reforms.

Other Standard of Care Initiatives. In addition, state legislators and other regulators are proposing, or have adopted, laws and rules to articulate their required standard of care, which may diverge from the SEC's Rules and Guidance. The Partnership is dedicating significant resources to interpret and address these laws and rules as well. The Partnership cannot reliably predict the ultimate form or impact of such rules and laws, but their enactment and implementation may have an adverse effect on the Partnership's financial condition, results of operations, and liquidity.

U.S. Department of Labor ("DOL") Prohibited Transaction Exemption ("PTE"). On February 16, 2021, the DOL's PTE on Improving Investment Advice for Workers and Retirees became effective. The PTE provides a means for financial advisors and their firms to receive certain payments even if they are deemed a fiduciary under applicable guidance for purposes of ERISA and retirement accounts. The Partnership is in the process of implementing measures to comply with the PTE on or before the date required by the DOL.

PART I. FINANCIAL INFORMATION

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations, continued

MUTUAL FUNDS AND INSURANCE PRODUCTS

The Partnership earned approximately 30% and 31% of its total revenue from sales and services related to mutual fund and insurance products for ~~each of~~ the three- and ~~six-month~~nine-month periods ended ~~June 25,~~September 24, 2021 and ~~June 26, 2020.~~September 25, 2020, respectively. In addition, the Partnership derived ~~11%~~13% and 12% of its total revenue for the three- and ~~six-month~~nine-month periods ended ~~June 25,~~September 24, 2021, respectively, and 13% ~~and 14%~~ of its total revenue for both of the three- and ~~six-month~~nine-month periods ended ~~June 26,~~September 25, 2020, respectively, from one mutual fund company. The revenue generated from this company relates to business conducted with the ~~Partnership’s~~Partnership's U.S. segment.

Significant reductions in these revenues due to changes in mutual fund fee structures that result in decreased margins earned, regulatory reform or other changes to the Partnership’s relationship with mutual fund or insurance companies could have a material adverse effect on the Partnership’s results of operations, financial condition, and liquidity.

LIQUIDITY AND CAPITAL RESOURCES

The Partnership requires liquidity to cover its operating expenses, net capital requirements, capital expenditures, distributions to partners and redemptions of Partnership interests, as well as to facilitate client transactions. The principal sources for meeting the Partnership’s liquidity requirements include existing liquidity and capital resources of the Partnership, discussed further below, and funds generated from operations. The Partnership believes that the liquidity provided by these sources will be sufficient to meet its capital and liquidity requirements for the next twelve months. Depending on conditions in the capital markets and other factors, the Partnership will, from time to time, consider the issuance of debt and additional Partnership capital, the proceeds of which could be used to meet growth needs or for other purposes.

~~PART I. FINANCIAL INFORMATION~~

~~Item 2.~~

~~Management's Discussion and Analysis of Financial Condition and Results of Operations, continued~~

As of ~~June 25,~~September 24, 2021, the Partnership had ~~$2,401~~$3,231 in cash, cash equivalents consisting of certificates of deposit and money market funds, and highly liquid investments consisting of securities purchased under agreements to resell. Additionally, the Partnership had ~~$3,307~~$3,376 in Partnership capital and no debt as of ~~June 25,~~September 24, 2021. The Partnership has committed and uncommitted lines of credit in place should a liquidity need arise but has not drawn upon these ~~lines.~~lines, except for periodically testing draw procedures. The Partnership believes that its financial position remains strong as it addresses the uncertainty of the ongoing impacts of COVID-19 on the global economy and, based on current information, does not anticipate any significant changes to its current liquidity or capital position.

Partnership Capital

The Partnership’s growth in capital has historically been the result of the sale of Interests to its associates and existing limited partners, the sale of subordinated limited partnership interests to its current or retiring general partners, and retention of a portion of general partner earnings.

The Partnership filed a Registration Statement on Form S-8 with the SEC on January 12, 2018, to register $450 of Interests issuable pursuant to the 2018 Plan. In addition to issuances of Interests in prior periods, the Partnership issued approximately $1 and $5 of Interests under the 2018 Plan in 2020 and the first ~~half~~nine months of 2021, respectively. The remaining $64 of Interests may be issued under the 2018 Plan at the discretion of the Managing Partner in the future. Proceeds from the offering under the 2018 Plan were and are expected to be used for working capital and general firm purposes and to ensure there is adequate general liquidity of the Partnership for future needs. The issuance of Interests reduces the Partnership’s net interest income and profitability.

The Partnership’s capital subject to mandatory redemption at ~~June 25,~~September 24, 2021, net of reserve for anticipated withdrawals, was ~~$3,307,~~ $3,376, an increase of ~~$232~~$301 from December 31, 2020. This increase in Partnership capital subject to mandatory redemption was primarily due to the retention of a portion of ~~general~~general partner earnings ($~~85) and~~126), additional capital contributions related to limited partner, subordinated limited partner and general partner interests ($5, ~~$60~~$61 and ~~$220,~~$222, respectively) and the net decrease in Partnership loans outstanding ($5), partially offset by the ~~net increase in Partnership loans outstanding ($54) and~~ redemption of limited partner, subordinated limited partner and general partner interests ($~~10, $16~~14, $19 and ~~$58,~~$85, respectively). During the three- and ~~six-month~~nine-month periods ended ~~June 25,~~September 24, 2021 and ~~June 26,~~September 25, 2020, the Partnership retained ~~13.8%~~13.8% of income allocated to general partners.

PART I. FINANCIAL INFORMATION

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations, continued

Under the terms of the Partnership Agreement, a partner’s capital is required to be redeemed by the Partnership in the event of the partner’s death or withdrawal from the Partnership, subject to compliance with ongoing regulatory capital requirements. In the event of a partner’s death, the Partnership generally redeems the partner’s capital within six months. The Partnership has restrictions in place which govern the withdrawal of capital. Under the terms of the Partnership Agreement, limited partners requesting withdrawal from the Partnership are to be repaid their capital in three equal annual installments beginning no earlier than 90 days after their withdrawal notice is received by the Managing Partner. The capital of general partners requesting withdrawal from the Partnership is converted to subordinated limited partnership capital or, at the discretion of the Managing Partner, redeemed by the Partnership. Subordinated limited partners requesting withdrawal are repaid their capital in six equal annual installments beginning no earlier than 90 days after their request for withdrawal of contributed capital is received by the Managing Partner. The Partnership’s Managing Partner has discretion to waive or modify these withdrawal restrictions and to accelerate the return of capital.

The Partnership makes loans available to those general partners and, in limited circumstances, subordinated limited partners (in each case, other than members of the ~~Executive Committee)~~Enterprise Leadership Team, as defined in the Partnership Agreement), who require financing for some or all of their Partnership capital contributions. In limited circumstances a general partner may withdraw from the Partnership and become a subordinated limited partner while he or she still has an outstanding Partnership loan. It is anticipated that, of the future general and subordinated limited partnership capital contributions (in each case, other than for ~~Executive Committee~~Enterprise Leadership Team members) requiring financing, the majority will be financed through Partnership loans. Loans made by the Partnership to such partners are generally for a period of one year but are expected to be renewed and bear interest at the greater of the Prime Rate for the last business day of the prior fiscal month or 3.25%. The Partnership recognizes interest income for the interest earned related to these loans. Partners borrowing from the Partnership will be required to repay such loans by applying the earnings received from the Partnership to such loans, net of amounts retained by the Partnership, amounts distributed for income taxes and 5% of earnings distributed to the partner. The Partnership has full recourse against any partner that defaults on loan obligations to the Partnership. The Partnership does not anticipate that partner loans will have an adverse impact on the Partnership’s short-term liquidity or capital resources.

~~PART I. FINANCIAL INFORMATION~~

~~Item 2.~~

~~Management's Discussion and Analysis of Financial Condition and Results of Operations, continued~~

Any partner may also choose to have individual banking arrangements for their Partnership capital contributions. Any bank financing of capital contributions is in the form of unsecured bank loan agreements and is between the individual and the bank. The Partnership does not guarantee these bank loans, nor can the partner pledge his or her partnership interest as collateral for the bank loan. The Partnership performs certain administrative functions in connection with its limited partners who have elected to finance a portion of their Partnership capital contributions through individual unsecured bank loan agreements from banks with whom the Partnership has other banking relationships. For all limited partner capital contributions financed through such bank loan agreements, each agreement instructs the Partnership to apply the proceeds from the redemption of that individual’s capital account to the repayment of the limited partner's bank loan prior to any funds being released to the partner. In addition, the partner is required to apply Partnership earnings, net of any distributions to pay taxes, to service the interest and principal on the bank loan. Should a partner’s individual bank loan not be renewed upon maturity for any reason, the Partnership could experience increased requests for capital liquidations, which could adversely impact the Partnership’s liquidity. In addition, partners who finance all or a portion of their capital contributions with bank financing may be more likely to request the withdrawal of capital to meet bank financing requirements should the partners experience a period of reduced earnings. As a partnership, any withdrawals by general partners, subordinated limited partners or limited partners would reduce the Partnership’s available liquidity and capital.

Many of the same banks that provide financing to limited partners also provide financing to the Partnership. To the extent these banks increase credit available to the partners, financing available to the Partnership may be reduced.

The Partnership, while not a party to any partner unsecured bank loan agreements, does facilitate making payments of allocated income to certain banks on behalf of the limited partner. The following table represents amounts related to Partnership loans as well as bank loans (for which the Partnership facilitates certain administrative functions). Partners may have arranged their own bank loans to finance their Partnership capital for which the Partnership does not facilitate certain administrative functions and therefore any such loans are not included in the table.

PART I. FINANCIAL INFORMATION

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations, continued


	As of September 24, 2021
	Limited Partnership Interests			Subordinated Limited Partnership Interests		General Partnership Interests			Total Partnership Interests
Total Partnership capital(1)	$	1,228		$	581	$	1,903		$	3,712
Partnership capital owned by partners with individual loans	$	154		$	—	$	862		$	1,016
Partnership capital owned by partners with individual loans as a percent of total Partnership capital		13	%		—		45	%		27	%

Individual loans:
Individual bank loans	$	37		$	—	$	—		$	37
Individual Partnership loans		—			—		336			336
Total individual loans	$	37		$	—	$	336		$	373
Individual loans as a percent of total Partnership capital		3	%		—		18	%		10	%
Individual loans as a percent of respective Partnership capital owned by partners with loans		24	%		—		39	%		37	%

As of June 25, 2021

Limited
Partnership
Interests

Subordinated
Limited
Partnership
Interests

General
Partnership
Interests

Total
Partnership
Interests

Total Partnership capital⁽¹⁾

$
1,232

$
583

$
1,887

$
3,702

Partnership capital owned by partners with
   individual loans

$
167

$
—

$
949

$
1,116

Partnership capital owned by partners with individual
   loans as a percent of total Partnership capital

14
%

—

50
%

30
%

Individual loans:

Individual bank loans

$
41

$
—

$
—

$
41

Individual Partnership loans

—

—

395

395

Total individual loans

$
41

$
—

$
395

$
436

Individual loans as a percent of total Partnership capital

3
%

—

21
%

12
%
Individual loans as a percent of respective Partnership
   capital owned by partners with loans

25
%

—

42
%

39
%
(1)

Total Partnership capital, as defined for this table, is before the reduction of Partnership loans and is net of reserve for anticipated withdrawals.

⁽¹⁾	~~Total Partnership capital, as defined for this table, is before the reduction of Partnership loans and is net of reserve for anticipated withdrawals.~~

Historically, neither the amount of Partnership capital financed with individual loans as indicated in the table above, nor the amount of partner withdrawal requests, has had a significant impact on the Partnership’s liquidity or capital resources.

~~PART I. FINANCIAL INFORMATION~~

~~Item 2.~~

~~Management's Discussion and Analysis of Financial Condition and Results of Operations, continued~~

Lines of Credit

The following table shows the composition of the Partnership’s aggregate bank lines of credit in place as of:


	June 25,		December 31,		September 24,		December 31,
	2021		2020		2021		2020
2018 Credit Facility	$	500	$	500	$	500	$	500
Uncommitted secured credit facilities		390		390		390		390
Total bank lines of credit	$	890	$	890	$	890	$	890

In accordance with the terms of the Partnership's $500 committed revolving line of credit (the "2018 Credit Facility") entered into in September 2018, the Partnership is required to maintain a leverage ratio of no more than 35% and minimum Partnership capital, net of reserve for anticipated withdrawals and Partnership loans, of at least $1,884. In addition, Edward Jones is required to maintain a minimum tangible net worth of at least $1,344 and minimum regulatory net capital of at least 6% of aggregate debit items as calculated under the alternative method. The Partnership has the ability to draw on various types of loans. The associated interest rate depends on the type of loan, duration of the loan, whether the loan is secured or unsecured and the amount of leverage. Contractual rates are based on an index rate plus the applicable ~~rate.~~spread. The 2018 Credit Facility is intended to provide short-term liquidity to the Partnership should the need arise. As of ~~June 25,~~September 24, 2021, the Partnership was in compliance with all covenants related to the 2018 Credit Facility.

In addition, the Partnership has multiple uncommitted secured lines of credit totaling $390 that are subject to change at the discretion of the banks. The Partnership also has an additional uncommitted line of credit where the amount and the associated collateral requirements are at the bank's discretion in the event of a borrowing. Based on credit market conditions and the uncommitted nature of these credit facilities, it is possible that these lines of credit could decrease or not be available in the future. Actual borrowing capacity on secured lines is based on availability of client margin securities or firm-owned securities, which would serve as collateral on loans in the event the Partnership borrowed against these lines.

There were no amounts outstanding on the 2018 Credit Facility or the uncommitted lines of credit as of ~~June 25,~~September 24, 2021 or December 31, 2020. In addition, the Partnership did not have any draws against these lines of credit during the ~~six-month~~nine-month period ended ~~June 25,~~September 24, 2021, except for periodically testing draw procedures.

PART I. FINANCIAL INFORMATION

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations, continued

Cash Activity

As of ~~June 25,~~September 24, 2021, the Partnership had ~~$1,316~~$1,731 in cash and cash equivalents and ~~$1,085~~$1,500 in securities purchased under agreements to resell, which generally have overnight maturities. This totaled to ~~$2,401~~$3,231 of Partnership liquidity as of ~~June 25,~~September 24, 2021, a ~~15% decrease~~14% increase from $2,839 atas of December 31, 2020. The Partnership had ~~$17,791 and~~$17,691 and $17,918 in cash and investments segregated under federal regulations as of ~~June 25,~~September 24, 2021 and December 31, 2020, respectively, which was not available for general use. TheThe decrease in cash and investments segregated under federal regulations was primarily due to the increase in receivables from clients on margin balances. The Partnership also held ~~$315~~$225 and $971 in government and agency obligations as of ~~June 25,~~September 24, 2021 and December 31, 2020, respectively, primarily to help facilitate cash management and maintain firm liquidity. The decrease in the government and agency obligations balance as of September 24, 2021 was partly due to the timing of maturities ~~and balances in segregated accounts~~ and was partially reflected in higher firm cash as of ~~June 25, 2021~~. The decrease in cash and investments segregated under federal regulations was primarily due to a decrease in cash held in clients' accounts, resulting in a corresponding decrease in payables to clients. September 24, 2021. Changes in cash were also due to timing of daily client cash activity in relation to the weekly segregation requirement.

The Partnership continues to evaluate its cash management strategy. Banks have experienced a significant increase in cash deposits due to the market and economic uncertainty from COVID-19, which may impact the Partnership's ability to ~~continue~~continue to find financial institutions at which to place funds for principal protection while earning a reasonable rate of return on those funds.

~~PART I. FINANCIAL INFORMATION~~

~~Item 2.~~

~~Management's Discussion and Analysis of Financial Condition and Results of Operations, continued~~

Regulatory Requirements

As a result of its activities as a U.S. broker-dealer, Edward Jones is subject to the net capital provisions of Rule 15c3-1 of the Exchange Act and capital compliance rules of FINRA Rule 4110. Under the alternative method permitted by the rules, Edward Jones must maintain minimum net capital ~~as defined,~~ equal to the greater of $0.25 or 2% of aggregate debit items arising from client transactions. The net capital rules also provide that Edward Jones’ partnership capital may not be withdrawn if ~~the~~ resulting net capital would be less than minimum requirements. Additionally, certain withdrawals ~~of partnership capital~~ require the approval of the SEC and FINRA to the extent they exceed defined levels, even though such withdrawals would not cause net capital to be less than minimum requirements.

The Partnership’s Canada broker-dealer subsidiary is a registered broker-dealer regulated by IIROC. Under the regulations prescribed by IIROC, the ~~Partnership's~~Partnership’s Canada broker-dealer subsidiary is required to maintain minimum levels of risk-adjusted capital, which are dependent on the nature of the Partnership’s Canada broker-dealer ~~subsidiary's~~subsidiary’s assets and operations.

PART I. FINANCIAL INFORMATION

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations, continued

The following table shows the Partnership’s capital figures for its U.S. and Canada broker-dealer subsidiaries as of:


	June 25,			December 31,						September 24,			December 31,
	2021			2020			% Change			2021			2020			% Change
U.S.:
Net capital	$	1,348		$	1,306			3	%	$	1,523		$	1,306			17	%
Net capital in excess of the minimum required	$	1,285		$	1,248			3	%	$	1,456		$	1,248			17	%
Net capital as a percentage of aggregate debit items		42.7	%		45.0	%		-5	%		45.4	%		45.0	%		1	%
Net capital after anticipated capital withdrawals, as a percentage of aggregate debit items		21.6	%		23.1	%		-6	%		24.4	%		23.1	%		6	%

Canada:
Regulatory risk-adjusted capital	$	52		$	56			-7	%	$	61		$	56			9	%
Regulatory risk-adjusted capital in excess of the minimum required to be held by IIROC	$	52		$	47			11	%	$	48		$	47			2	%

U.S. net capital, Canada regulatory risk-adjusted capital and the related capital percentages may fluctuate on a daily basis.

THE EFFECTS OF INFLATION

The Partnership’s net assets are primarily monetary, consisting of cash and cash equivalents, cash and investments segregated under federal regulations, firm-owned securities, and receivables, less liabilities. Monetary net assets are primarily liquid in nature and would not be significantly affected by inflation. Inflation and future expectations of inflation influence securities prices, as well as activity levels in the securities markets. As a result, profitability and capital may be impacted by inflation and inflationary expectations. Additionally, inflation’s impact on the Partnership’s operating expenses may affect profitability to the extent that additional costs are not recoverable through increased prices of services offered by the Partnership.

~~PART I. FINANCIAL INFORMATION~~

~~Item 2.~~

~~Management's Discussion and Analysis of Financial Condition and Results of Operations, continued~~

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q, and in particular Management’s Discussion and Analysis of Financial Condition and Results of Operations, contains forward-looking statements within the meaning of the U.S. federal securities laws. You can identify forward-looking statements by the use of the words “believe,” “expect,” “anticipate,” “intend,” “estimate,” “project,” “will,” “should,” and other expressions which predict or indicate future events and trends and which do not relate to historical matters. You should not rely on forward-looking statements because they involve known and unknown risks, uncertainties and other factors, some of which are beyond the control of the Partnership. These risks, uncertainties and other factors may cause the actual results, performance or achievements of the Partnership to be materially different from the anticipated future results, performance or achievements expressed or implied by the forward-looking statements.

PART I. FINANCIAL INFORMATION

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations, continued

Some of the factors that might cause differences between forward-looking statements and actual events include, but are not limited to, the following: (1) general economic conditions, including an economic downturn or volatility in the U.S. and/or global securities markets, and actions of the U.S. Federal Reserve and/or central banks outside of the United States; (2) regulatory actions; (3) changes in legislation or regulation; (4) actions of competitors; (5) litigation; (6) the ability of clients, other broker-dealers, banks, depositories and clearing organizations to fulfill contractual obligations; (7) changes in interest rates; (8) changes in technology and other technology-related risks; (9) a fluctuation or decline in the fair value of securities; (10) our ability to attract and retain qualified financial advisors and other employees; and (11) the risks discussed under Part I, Item 1A – Risk Factors in the Partnership’s Annual Report. These forward-looking statements were based on information, plans, and estimates at the date of this report, and the Partnership does not undertake to update any forward-looking statements to reflect changes in underlying assumptions or factors, new information, future events or other changes.

The Partnership has several ongoing measures in response to COVID-19 to support the health and well-being of its clients, partners and associates, and may implement additional measures in response to further economic or market events, but cannot provide any assurance that such measures will be successful. Potential effects of the pandemic and the resulting low interest rate environment on certain of the Partnership’s financial results have been disclosed in Part II, Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations. However, actual results with respect to such items may vary from expectations and the variation could be material. Accordingly, you should not rely on these descriptions because they involve known and unknown risks, uncertainties and other factors, some of which are beyond the control of the Partnership.

PART I. FINANCIAL INFORMATION

ITEM 3. quantitative and qualitative disclosures about market RISK

~~ITEM 3.~~

~~quantitative and qualitative disclosures about market RISK~~

Various levels of management within the Partnership manage the Partnership’s risk exposure. Position limits in inventory accounts are established and monitored on an ongoing basis. Credit risk related to various financing activities is reduced by the industry practice of obtaining and maintaining collateral. The Partnership monitors its exposure to counterparty risk through the use of credit exposure information, the monitoring of collateral values and the establishment of credit limits. For further discussion of monitoring, see the Risk Management discussion in Part III, Item 10 – Directors, Executive Officers and Corporate Governance of the Partnership’s Annual Report.

The Partnership is exposed to market risk from changes in interest rates. Such changes in interest rates impact the income from interest-earning assets, primarily receivables from clients on margin balances and short-term, primarily overnight, investments, which are primarily comprised of cash and cash equivalents, investments segregated under federal regulations, and securities purchased under agreements to resell, which averaged ~~$3.0~~$3.1 billion and ~~$21.3~~ $21.2 billion for the ~~six-month~~nine-month period ended ~~June 25,~~September 24, 2021. These margin receivables and investments earned interest at an average annual rate of approximately ~~398~~393 and 109 basis points ~~(3.98%~~(3.93% and ~~0.10%~~0.09%), respectively, during the first ~~half~~nine months of 2021. Changes in interest rates also have an impact on the expense related to the liabilities that finance these assets, such as amounts payable to clients.

The Partnership performed an analysis of its financial instruments and assessed the related interest rate risk and materiality in accordance with the SEC rules. Under current market conditions and based on current levels of interest-earning assets and the liabilities that finance these assets, the Partnership estimates that a 100-basis point (1.00%) increase in short-term interest rates could increase its annual net interest income by approximately ~~$118~~$125 million. This estimate reflects minimum contractual rates on certain balances. Conversely, the Partnership estimates that a reduction in short-term interest rates to zero could decrease the Partnership’s annual net interest income by approximately ~~$15~~$15 million. A 100-basis point (1.00%) decrease in short-term interest rates was not utilized for this comparison because it would result in negative rates given that rates are already near zero.

For information related to the impacts of COVID-19 on interest rates and the Partnership's market risk, see Part I, Item 2 – Management's Discussion and Analysis of Financial Condition and Results of Operations of this Quarterly Report on Form 10-Q.

ITEM 4. controls and procedures

The Partnership maintains a system of disclosure controls and procedures which are designed to ensure that information required to be disclosed by the Partnership in the reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and is accumulated and communicated to management, including the Partnership’s certifying officers, as appropriate to allow timely decisions regarding required disclosure.

Based upon an evaluation performed as of the end of the period covered by this report, the Partnership’s certifying officers, the Chief Executive Officer and the Chief Financial Officer, have concluded that the Partnership’s disclosure controls and procedures were effective as of ~~June 25,~~September 24, 2021.

There have been no changes in the Partnership’s last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Partnership’s internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

~~ITEM 1.~~

~~LEGAL PROCEEDINGS~~

The information in Part I, Item 1, Note 7 supplements the discussion in Item 3 – Legal Proceedings in the Partnership's Annual Report.

ITEM 1A. RISK FACTORS

~~ITEM 1A.~~

~~RISK FACTORS~~

For information regarding risk factors affecting the Partnership, please see the language in Part I, Item 2 – Forward-looking Statements of this Quarterly Report on Form 10-Q and the discussions in Part I, Item 1A – Risk Factors of the Partnership's Annual Report.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

~~During~~As previously disclosed in the ~~quarter~~Partnership's Form 10-Q for the period ended June 25, 2021, ~~and subsequent to period end,~~ the Partnership issued subordinated limited partnership interests (the “SLP Interests”), which are described in the Partnership ~~Agreement.~~Agreement, during the third quarter ended September 24, 2021. The Partnership issued the SLP Interests pursuant to Section 4(a)(2) under the Securities Act of 1933, as amended, in a privately negotiated transaction and not pursuant to a public offering or solicitation. The SLP Interests were issued to general partners of the Partnership in ~~June 2021 and~~ July 2021 for an aggregate price of ~~$0.45 million and~~ $1.1 ~~million, respectively.~~million.

PART II. OTHER INFORMATION

ITEM 6. Exhibits

~~ITEM 6.~~

~~Exhibits~~

Exhibit Number		Description
3.1	*	~~Twentieth~~Twenty-first Amended and Restated Agreement of Registered Limited Liability Limited Partnership, dated ~~August 6, 2018,~~September 1, 2021, incorporated by reference from Exhibit 3.1 to The Jones Financial Companies, L.L.L.P. Form 8-K dated ~~August 6, 2018.~~September 7, 2021.
3.2	*	Twenty-First Restated Certificate of Limited Partnership of the Jones Financial Companies, L.L.L.P., dated January 24, 2019, incorporated by reference from Exhibit 3.2 to The Jones Financial Companies, L.L.L.P. Annual Report on Form 10-K for the fiscal year ended December 31, 2018.
3.3	*	First Amendment of Twenty-First Restated Certificate of Limited Partnership of The Jones Financial Companies, L.L.L.P., dated February 21, 2019, incorporated by reference from Exhibit 3.3 to The Jones Financial Companies, L.L.L.P. Annual Report on Form 10-K for the fiscal year ended December 31, 2018.
3.4	*	Second Amendment of Twenty-First Restated Certificate of Limited Partnership of The Jones Financial Companies, L.L.L.P., dated March 25, 2019, incorporated by reference from Exhibit 3.4 to The Jones Financial Companies, L.L.L.P. Form 10-Q for the quarterly period ended March 29, 2019.
3.5	*	Third Amendment of Twenty-First Restated Certificate of Limited Partnership of The Jones Financial Companies, L.L.L.P., dated April 22, 2019, incorporated by reference from Exhibit 3.5 to The Jones Financial Companies, L.L.L.P. Form 10-Q for the quarterly period ended March 29, 2019.
3.6	*	Fourth Amendment of Twenty-First Restated Certificate of Limited Partnership of The Jones Financial Companies, L.L.L.P., dated May 22, 2019, incorporated by reference from Exhibit 3.6 to The Jones Financial Companies, L.L.L.P. Form 10-Q for the quarterly period ended June 28, 2019.
3.7	*	Fifth Amendment of Twenty-First Restated Certificate of Limited Partnership of The Jones Financial Companies, L.L.L.P., dated July 19, 2019, incorporated by reference from Exhibit 3.7 to The Jones Financial Companies, L.L.L.P. Form 10-Q for the quarterly period ended June 28, 2019.
3.8	*	Sixth Amendment of Twenty-First Restated Certificate of Limited Partnership of The Jones Financial Companies, L.L.L.P., dated August 19, 2019, incorporated by reference from Exhibit 3.8 to The Jones Financial Companies, L.L.L.P. Form 10-Q for the quarterly period ended September 27, 2019.
3.9	*	Seventh Amendment of Twenty-First Restated Certificate of Limited Partnership of The Jones Financial Companies, L.L.L.P., dated September 17, 2019, incorporated by reference from Exhibit 3.8 to The Jones Financial Companies, L.L.L.P. Form 10-Q for the quarterly period ended September 27, 2019.
3.10	*	Eighth Amendment of Twenty-First Restated Certificate of Limited Partnership of The Jones Financial Companies, L.L.L.P., dated November 19, 2019, incorporated by reference from Exhibit 3.10 to The Jones Financial Companies, L.L.L.P. Annual Report on Form 10-K for the fiscal year ended December 31, 2019.
3.11	*	Ninth Amendment of Twenty-First Restated Certificate of Limited Partnership of The Jones Financial Companies, L.L.L.P., dated December 18, 2019, incorporated by reference from Exhibit 3.11 to The Jones Financial Companies, L.L.L.P. Annual Report on Form 10-K for the fiscal year ended December 31, 2019.
3.12	*	Tenth Amendment of Twenty-First Restated Certificate of Limited Partnership of The Jones Financial Companies, L.L.L.P., dated January 21,2020, incorporated by reference from Exhibit 3.12 to The Jones Financial Companies, L.L.L.P. Annual Report on Form 10-K for the fiscal year ended December 31, 2019.
3.13	*	Eleventh Amendment of Twenty-First Restated Certificate of Limited Partnership of The Jones Financial Companies, L.L.L.P., dated February 18,2020, incorporated by reference from Exhibit 3.13 to The Jones Financial Companies, L.L.L.P. Annual Report on Form 10-K for the fiscal year ended December 31, 2019.

PART II. OTHER INFORMATION

Item 6. Exhibits, continued

~~Exhibit Number~~		~~Description~~
3.14	*	Twelfth Amendment of Twenty-First Restated Certificate of Limited Partnership of The Jones Financial Companies, L.L.L.P., dated March 19, 2020, incorporated by reference from Exhibit 3.14 to The Jones Financial Companies, L.L.L.P. Form 10-Q for the quarterly period ended March 27, 2020.
3.15	*	Thirteenth Amendment of Twenty-First Restated Certificate of Limited Partnership of The Jones Financial Companies, L.L.L.P., dated May 18, 2020, incorporated by reference from Exhibit 3.15 to The Jones Financial Companies, L.L.L.P. Form 10-Q for the quarterly period ended June 26, 2020.
3.16	*	Fourteenth Amendment of Twenty-First Restated Certificate of Limited Partnership of The Jones Financial Companies, L.L.L.P., dated June 14, 2020, incorporated by reference from Exhibit 3.16 to The Jones Financial Companies, L.L.L.P. Form 10-Q for the quarterly period ended June 26, 2020.
3.17	*	Fifteenth Amendment of Twenty-First Restated Certificate of Limited Partnership of The Jones Financial Companies, L.L.L.P., dated July 29, 2020, incorporated by reference from Exhibit 3.17 to The Jones Financial Companies, L.L.L.P. Form 10-Q for the quarterly period ended June 26, 2020.
3.18	*	Sixteenth Amendment of Twenty-First Restated Certificate of Limited Partnership of The Jones Financial Companies, L.L.L.P., dated August 18, 2020, incorporated by reference from Exhibit 3.18 to The Jones Financial Companies, L.L.L.P. Form 10-Q for the quarterly period ended September 25, 2020.
3.19	*	Seventeenth Amendment of Twenty-First Restated Certificate of Limited Partnership of The Jones Financial Companies, L.L.L.P., dated September 22, 2020, incorporated by reference from Exhibit 3.19 to The Jones Financial Companies, L.L.L.P. Form 10-Q for the quarterly period ended September 25, 2020.
3.20	*	Eighteenth Amendment of Twenty-First Restated Certificate of Limited Partnership of The Jones Financial Companies, L.L.L.P., dated November 9, 2020, incorporated by reference from Exhibit 3.20 to The Jones Financial Companies, L.L.L.P. Annual Report on Form 10-K for the fiscal year ended December 31, 2020.
3.21	*	Nineteenth Amendment of Twenty-First Restated Certificate of Limited Partnership of The Jones Financial Companies, L.L.L.P., dated December 11, 2020, incorporated by reference from Exhibit 3.21 to The Jones Financial Companies, L.L.L.P. Annual Report on Form 10-K for the fiscal year ended December 31, 2020.
3.22	*	Twentieth Amendment of Twenty-First Restated Certificate of Limited Partnership of The Jones Financial Companies, L.L.L.P., dated January 21, 2021, incorporated by reference from Exhibit 3.22 to The Jones Financial Companies, L.L.L.P. Annual Report on Form 10-K for the fiscal year ended December 31, 2020.
3.23	*	Twenty-first Amendment of Twenty-First Restated Certificate of Limited Partnership of The Jones Financial Companies, L.L.L.P., dated February 5, 2021, incorporated by reference from Exhibit 3.23 to The Jones Financial Companies, L.L.L.P. Annual Report on Form 10-K for the fiscal year ended December 31, 2020.
3.24	*	Twenty-second Amendment of Twenty-First Restated Certificate of Limited Partnership of The Jones Financial Companies, L.L.L.P., dated March 18, 2021, incorporated by reference from Exhibit 3.24 to The Jones Financial Companies, L.L.L.P. Form 10-Q for the quarterly period ended March 26, 2021.
3.25	*	Twenty-third Amendment of Twenty-First Restated Certificate of Limited Partnership of The Jones Financial Companies, L.L.L.P., dated April 13, 2021, incorporated by reference from Exhibit 3.25 to The Jones Financial Companies, L.L.L.P. Form 10-Q for the quarterly period ended March 26, 2021.
3.26	**	Twenty-fourth Amendment of Twenty-First Restated Certificate of Limited Partnership of The Jones Financial Companies, L.L.L.P., dated May 27, 2021, incorporated by reference from Exhibit 3.26 to The Jones Financial Companies, L.L.L.P. Form 10-Q for the quarterly period ended June 25, 2021.

PART II. OTHER INFORMATION

Item 6. Exhibits, continued

~~Exhibit Number~~		~~Description~~
3.27	**	Twenty-fifth Amendment of Twenty-First Restated Certificate of Limited Partnership of The Jones Financial Companies, L.L.L.P., dated June 15, 2021, incorporated by reference from Exhibit 3.27 to The Jones Financial Companies, L.L.L.P. Form 10-Q for the quarterly period ended June 25, 2021..
3.28	**	Twenty-sixth Amendment of Twenty-First Restated Certificate of Limited Partnership of The Jones Financial Companies, L.L.L.P., dated July 19, 2021, incorporated by reference from Exhibit 3.28 to The Jones Financial Companies, L.L.L.P. Form 10-Q for the quarterly period ended June 25, 2021..
~~31.1~~3.29	**	Twenty-seventh Amendment of Twenty-First Restated Certificate of Limited Partnership of The Jones Financial Companies, L.L.L.P., dated August 17, 2021.
3.30	**	Twenty-eighth Amendment of Twenty-First Restated Certificate of Limited Partnership of The Jones Financial Companies, L.L.L.P., dated September 20, 2021.
3.31	**	Twenty-ninth Amendment of Twenty-First Restated Certificate of Limited Partnership of The Jones Financial Companies, L.L.L.P., dated October 18, 2021.
31.1	**	Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15(d)-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to section 302 of the Sarbanes-Oxley Act of 2002.
31.2	**	Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15(d)-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to section 302 of the Sarbanes-Oxley Act of 2002.
32.1	**	Certification of Chief Executive Officer pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002.
32.2	**	Certification of Chief Financial Officer pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	**	~~Inline XBRL Instance Document~~
~~101.SCH~~	**	~~Inline XBRL Taxonomy Extension Schema~~
~~101.CAL~~	**	~~Inline XBRL Taxonomy Extension Calculation~~
~~101.DEF~~	**	~~Inline XBRL Extension Definition~~
~~101.LAB~~	**	~~Inline XBRL Taxonomy Extension Label~~
~~101.PRE~~	**	~~Inline XBRL Taxonomy Extension Presentation~~

*	~~Incorporated by reference to previously filed exhibits.~~

**	~~Filed herewith.~~Inline XBRL Instance Document
101.SCH	**	Inline XBRL Taxonomy Extension Schema
101.CAL	**	Inline XBRL Taxonomy Extension Calculation
101.DEF	**	Inline XBRL Extension Definition
101.LAB	**	Inline XBRL Taxonomy Extension Label
101.PRE	**	Inline XBRL Taxonomy Extension Presentation
104	**	Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101).

* Incorporated by reference to previously filed exhibits.

** Filed herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


THE JONES FINANCIAL COMPANIES, L.L.L.P.

By:		/s/ Penny Pennington
		Penny Pennington
		Managing Partner (Principal Executive Officer)
		~~August 6,~~November 5, 2021

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant in the capacities and on the dates indicated:


Signatures	Title	Date

/s/ Penny Pennington	Managing Partner (Principal Executive Officer)	~~August 6,~~November 5, 2021
Penny Pennington	Managing Partner (Principal Executive Officer)	~~August 6,~~November 5, 2021

/s/ ~~Kevin D. Bastien~~Andrew T. Miedler	Chief Financial Officer (Principal Financial and Accounting Officer)	~~August 6,~~November 5, 2021
~~Kevin D. Bastien~~Andrew T. Miedler		~~August 6,~~November 5, 2021

	Three Months Ended June 25, 2021						Three Months Ended June 26, 2020
	U.S.		Canada		Total		U.S.		Canada		Total
Fee revenue:
Asset-based fee revenue:
Advisory programs fees	$	1,782	$	31	$	1,813	$	1,238	$	20	$	1,258
Service fees		388		29		417		304		19		323
Other asset-based fees		155		0		155		137		0		137
Total asset-based fee revenue		2,325		60		2,385		1,679		39		1,718
Account and activity fee revenue:
Shareholder accounting services fees		109		0		109		104		0		104
Other account and activity fee revenue		59		3		62		53		3		56
Total account and activity fee revenue		168		3		171		157		3		160
Total fee revenue		2,493		63		2,556		1,836		42		1,878
Trade revenue:
Commissions		412		14		426		364		14		378
Principal transactions		10		1		11		16		1		17
Total trade revenue		422		15		437		380		15		395
Total revenue from customers		2,915		78		2,993		2,216		57		2,273
Net interest and dividends and other revenue		39		2		41		45		7		52
Net revenue	$	2,954	$	80	$	3,034	$	2,261	$	64	$	2,325


	Six Months Ended June 25, 2021						Six Months Ended June 26, 2020
	U.S.		Canada		Total		U.S.		Canada		Total
Fee revenue:
Asset-based fee revenue:
Advisory programs fees	$	3,422	$	58	$	3,480	$	2,519	$	39	$	2,558
Service fees		754		54		808		620		43		663
Other asset-based fees		306		0		306		303		0		303
Total asset-based fee revenue		4,482		112		4,594		3,442		82		3,524
Account and activity fee revenue:
Shareholder accounting services fees		216		0		216		213		0		213
Other account and activity fee revenue		118		7		125		112		6		118
Total account and activity fee revenue		334		7		341		325		6		331
Total fee revenue		4,816		119		4,935		3,767		88		3,855
Trade revenue:
Commissions		831		28		859		828		27		855
Principal transactions		19		1		20		31		2		33
Total trade revenue		850		29		879		859		29		888
Total revenue from customers		5,666		148		5,814		4,626		117		4,743
Net interest and dividends and other revenue		67		6		73		58		15		73
Net revenue	$	5,733	$	154	$	5,887	$	4,684	$	132	$	4,816

	As of June 25, 2021
	Limited Partnership Interests			Subordinated Limited Partnership Interests		General Partnership Interests			Total Partnership Interests
Total Partnership capital⁽¹⁾	$	1,232		$	583	$	1,887		$	3,702
Partnership capital owned by partners with individual loans	$	167		$	—	$	949		$	1,116
Partnership capital owned by partners with individual loans as a percent of total Partnership capital		14	%		—		50	%		30	%

Individual loans:
Individual bank loans	$	41		$	—	$	—		$	41
Individual Partnership loans		—			—		395			395
Total individual loans	$	41		$	—	$	395		$	436
Individual loans as a percent of total Partnership capital		3	%		—		21	%		12	%
Individual loans as a percent of respective Partnership capital owned by partners with loans		25	%		—		42	%		39	%