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, 2021~~24, 2022


☐	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~~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 ☒

As of July ~~30, 2021, 1,230,379~~29, 2022, 1,218,590 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, 2021~~24, 2022	5
	Consolidated Statements of Changes in Partnership Capital –- June ~~26, 2020~~25, 2021	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	3433

Item 4.	Controls and Procedures	3433

PART II.	OTHER INFORMATION

Item 1.	Legal Proceedings	3534

Item 1A.	Risk Factors	3534

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3534

Item 6.	Exhibits	3635

	Signatures	3936

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,
(Dollars in millions)	2021		2020		June 24, 2022		December 31, 2021
ASSETS:
Cash and cash equivalents	$	1,316	$	1,125	$	1,258	$	1,835
Cash and investments segregated under federal regulations		17,791		17,918		20,711		20,179
Securities purchased under agreements to resell		1,085		1,714		1,087		1,529
Receivables from:
Clients		3,850		3,504		4,479		4,187
Mutual funds, insurance companies and other		851		818		939		850
Brokers, dealers and clearing organizations		253		223		327		213
Securities owned, at fair value:
Investment securities		767		1,302		743		852
Inventory securities		30		32		42		38
Lease right-of-use assets		921		915		914		922
Equipment, property and improvements, at cost, net of accumulated depreciation and amortization		638		620
Fixed assets, at cost, net of accumulated depreciation and amortization						781		725
Other assets		146		149		890		878

TOTAL ASSETS	$	27,648	$	28,320	$	32,171	$	32,208

LIABILITIES:
Payables to:
Clients	$	21,005	$	21,241	$	24,830	$	23,763
Brokers, dealers and clearing organizations		73		96		97		112
Accrued compensation and employee benefits		1,826		2,104		1,670		2,401
Accounts payable, accrued expenses and other						944		1,223
Lease liabilities		943		938		949		954
Accounts payable, accrued expenses and other		248		352
		24,095		24,731		28,490		28,453
Contingencies (Note 7)

Partnership capital subject to mandatory redemption, net of reserve for anticipated withdrawals and partnership loans:
Limited partners		1,232		1,237		1,221		1,225
Subordinated limited partners		583		538		615		581
General partners		1,492		1,300		1,645		1,429
Total		3,307		3,075		3,481		3,235
Reserve for anticipated withdrawals		246		514		200		520
Total partnership capital subject to mandatory redemption		3,553		3,589		3,681		3,755

TOTAL LIABILITIES	$	27,648	$	28,320	$	32,171	$	32,208

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					Six Months Ended
(Dollars in millions, except per unit information and units outstanding)	June 25, 2021		June 26,2020		June 25, 2021		June 26,2020		June 24, 2022			June 25, 2021		June 24, 2022			June 25, 2021
Revenue:
Fee revenue
Asset-based	$	2,385	$	1,718	$	4,594	$	3,524	$	2,444		$	2,385	$	4,947		$	4,594
Account and activity		171		160		341		331		172			171		344			341
Total fee revenue		2,556		1,878		4,935		3,855		2,616			2,556		5,291			4,935
Trade revenue		437		395		879		888		392			437		781			879
Interest and dividends		40		41		78		124		76			40		120			78
Other revenue, net		24		34		42		4
Other (loss) revenue, net										(46	)		24		(98	)		42
Total revenue		3,057		2,348		5,934		4,871		3,038			3,057		6,094			5,934
Interest expense		23		23		47		55		24			23		47			47
Net revenue		3,034		2,325		5,887		4,816		3,014			3,034		6,047			5,887
Operating expenses:
Compensation and benefits		2,148		1,646		4,187		3,410		2,086			2,148		4,234			4,187
Communications and data processing										159			115		305			219
Occupancy and equipment		135		130		269		261		144			135		287			269
Communications and data processing		115		106		219		207
Fund sub-adviser fees		59		44		115		86		63			59		126			115
Professional and consulting fees		34		23		65		52		44			34		84			65
Other operating expenses		100		88		209		209		163			100		295			209
Total operating expenses		2,591		2,037		5,064		4,225		2,659			2,591		5,331			5,064

Income before allocations to partners		443		288		823		591		355			443		716			823

Allocations to partners:
Limited partners		58		42		107		92		42			58		85			107
Subordinated limited partners		52		34		98		69		41			52		84			98
General partners		333		212		618		430		272			333		547			618
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
Income allocated to limited partners per weighted average $1,000 equivalent limited partnership unit outstanding									$	34.31		$	46.66	$	69.22		$	86.74

Weighted average $1,000 equivalent limited partnership units outstanding		1,231,702		1,244,724		1,234,095		1,246,549		1,221,821			1,231,702		1,224,068			1,234,095

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 MONTHS ENDED JUNE ~~25, 2021~~24, 2022

(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
TOTAL PARTNERSHIP CAPITAL SUBJECT TO MANDATORY REDEMPTION, DECEMBER 31, 2021													$	1,361		$	640		$	1,754		$	3,755
Reserve for anticipated withdrawals		(125	)		(56	)		(333	)		(514	)		(136	)		(59	)		(325	)		(520	)
Partnership capital subject to mandatory redemption, net of reserve for anticipated withdrawals, December 31, 2020	$	1,237		$	538		$	1,300		$	3,075
Partnership loans outstanding, December 31, 2020		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
Partnership capital subject to mandatory redemption, net of reserve for anticipated withdrawals, December 31, 2021													$	1,225		$	581		$	1,429		$	3,235
Partnership loans outstanding, December 31, 2021														0			0			321			321
Total partnership capital, including capital financed with partnership loans, net of reserve for anticipated withdrawals, December 31, 2021														1,225			581			1,750			3,556
Issuance of partnership interests		3			60			211			274			4			52			264			320
Redemption of partnership interests		(5	)		(16	)		(50	)		(71	)		(5	)		(17	)		(38	)		(60	)
Income allocated to partners		49			46			285			380			43			43			275			361
Distributions		0			0			(3	)		(3	)		(1	)		0			(12	)		(13	)
Total partnership capital, including capital financed with partnership loans, March 26, 2021		1,284			629			2,083			3,996
Total partnership capital, including capital financed with partnership loans, March 25, 2022														1,266			659			2,239			4,164
Issuance of partnership interests		2			0			9			11			0			0			8			8
Redemption of partnership interests		(5	)		0			(8	)		(13	)		(3	)		(1	)		(15	)		(19	)
Income allocated to partners		58			52			333			443			42			41			272			355
Distributions		(10	)		(82	)		(397	)		(489	)		(9	)		(71	)		(347	)		(427	)
Total partnership capital, including capital financed with partnership loans, June 25, 2021		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
Total partnership capital, including capital financed with partnership loans, June 24, 2022														1,296			628			2,157			4,081
Partnership loans outstanding, June 24, 2022														0			0			(400	)		(400	)
TOTAL PARTNERSHIP CAPITAL SUBJECT TO MANDATORY REDEMPTION, JUNE 24, 2022													$	1,296		$	628		$	1,757		$	3,681
Reserve for anticipated withdrawals		(97	)		(16	)		(133	)		(246	)		(75	)		(13	)		(112	)		(200	)
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, June 24, 2022													$	1,221		$	615		$	1,645		$	3,481

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 MONTHS ENDED JUNE ~~26, 2020~~25, 2021


(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
TOTAL PARTNERSHIP CAPITAL SUBJECT TO MANDATORY REDEMPTION, DECEMBER 31, 2020													$	1,362		$	594		$	1,633		$	3,589
Reserve for anticipated withdrawals		(110	)		(43	)		(254	)		(407	)		(125	)		(56	)		(333	)		(514	)
Partnership capital subject to mandatory redemption, net of reserve for anticipated withdrawals, December 31, 2019	$	1,249		$	523		$	1,185		$	2,957
Partnership loans outstanding, December 31, 2019		0			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
Partnership capital subject to mandatory redemption, net of reserve for anticipated withdrawals, December 31, 2020													$	1,237		$	538		$	1,300		$	3,075
Partnership loans outstanding, December 31, 2020														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
Issuance of partnership interests		1			49			163			213			3			60			211			274
Redemption of partnership interests		(3	)		(35	)		(43	)		(81	)		(5	)		(16	)		(50	)		(71	)
Income allocated to partners		50			35			218			303			49			46			285			380
Distributions		0			0			(5	)		(5	)		0			0			(3	)		(3	)
Total partnership capital, including capital financed with partnership loans, March 27, 2020		1,297			576			1,874			3,747
Total partnership capital, including capital financed with partnership loans, March 26, 2021														1,284			629			2,083			3,996
Issuance of partnership interests		0			0			0			0			2			0			9			11
Redemption of partnership interests		(3	)		(1	)		(2	)		(6	)		(5	)		0			(8	)		(13	)
Income allocated to partners		42			34			212			288			58			52			333			443
Distributions		(14	)		(58	)		(277	)		(349	)		(10	)		(82	)		(397	)		(489	)
Total partnership capital, including capital financed with partnership loans, June 26, 2020		1,322			551			1,807			3,680
Partnership loans outstanding		0			(1	)		(387	)		(388	)
TOTAL PARTNERSHIP CAPITAL SUBJECT TO MANDATORY REDEMPTION, JUNE 26, 2020	$	1,322		$	550		$	1,420		$	3,292
Total partnership capital, including capital financed with partnership loans, June 25, 2021														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
Reserve for anticipated withdrawals		(78	)		(11	)		(89	)		(178	)		(97	)		(16	)		(133	)		(246	)
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, June 25, 2021													$	1,232		$	583		$	1,492		$	3,307

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)~~

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

(Unaudited)


	Six Months Ended
(Dollars in millions)	June 24, 2022			June 25, 2021
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		716			823
Depreciation and amortization		240			220

Changes in assets and liabilities:
Investments segregated under federal regulations		(612	)		43
Securities purchased under agreements to resell		442			629
Net payable to clients		775			(582	)
Net receivable from brokers, dealers and clearing organizations		(129	)		(53	)
Receivable from mutual funds, insurance companies and other		(89	)		(33	)
Securities owned		105			537
Other assets		(12	)		(81	)
Lease liabilities		(161	)		(160	)
Accrued compensation and employee benefits		(731	)		(278	)
Accounts payable, accrued expenses and other		(283	)		(20	)
Net cash provided by operating activities		261			1,045

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of fixed assets		(128	)		(79	)
Cash used in investing activities		(128	)		(79	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of partnership loans		45			27
Issuance of partnership interests		56			65
Redemption of partnership interests		(79	)		(84	)
Distributions from partnership capital		(812	)		(867	)
Net cash used in financing activities		(790	)		(859	)
Net (decrease) increase in cash, cash equivalents and restricted cash		(657	)		107

CASH, CASH EQUIVALENTS AND RESTRICTED CASH:
Beginning of period		7,706			6,875
End of period	$	7,049		$	6,982

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 31, ~~2021~~2022 and November 30, ~~2020~~2021 are included in the Partnership’s Consolidated Statements of Financial Condition and the results for the three- and six-month periods ended May 31, ~~2021~~2022 and ~~2020~~2021 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 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’ subsidiaries, Edward Jones (an Ontario limited partnership) ("EJ Canada"), 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 and commissions for the distribution of mutual fund shares and ~~commissions for~~insurance products and the purchase or sale of ~~securities and the purchase of insurance products.~~securities. 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 periods ended June ~~25, 2021~~24, 2022 and June ~~26, 2020,~~25, 2021, 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~~eleven 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. Certain prior period balances have been adjusted to align to current year presentation.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~~. 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. The Partnership evaluated subsequent events for recognition or disclosure through August 5, 2022, which was the date these Consolidated Financial Statements were available to be issued, and identified no matters requiring disclosure.

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~~2021 (the "Annual Report"). The results of operations for the three- and ~~six-month~~six- month periods ended June ~~25, 2021~~24, 2022 are not necessarily indicative of the results to be expected for the year ending December 31, ~~2021.~~2022. 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 periods ended June ~~25, 2021~~24, 2022 and June ~~26, 2020,~~25, 2021, cash paid for amounts included in the measurement of operating lease liabilities was ~~$82~~$81 and ~~$160~~$161 and ~~$76~~$82 and ~~$151,~~$160, respectively, and lease right-of-use assets obtained in exchange for new operating lease liabilities were ~~$80~~$81 and ~~$155~~$156 and ~~$75~~$80 and ~~$161,~~$155, respectively. The weighted-average remaining lease term was four years as of both June ~~25, 2021~~24, 2022 and December 31, ~~2020,~~2021, and the weighted-average discount rate was ~~2.3%~~2.2% and ~~2.6%~~2.1%, respectively.

~~For~~The following table summarizes the ~~three- and six-month periods ended June 25, 2021 and June 26, 2020,~~Partnership's operating lease ~~costs were $80 and $158 and $75 and $149, respectively, and~~cost, variable lease ~~costs~~cost not included in the lease liability ~~were $15~~ and ~~$29 and $15 and $30, respectively. Total~~total lease cost for ~~the three- and six-month periods ended June 25, 2021 and June 26, 2020 was $95 and $187 and $90 and $179, respectively.~~ the:


	Three Months Ended				Six Months Ended
	June 24, 2022		June 25, 2021		June 24, 2022		June 25, 2021
Operating lease cost	$	81	$	80	$	163	$	158
Variable lease cost		17		15		32		29
Total lease cost	$	98	$	95	$	195	$	187

The Partnership's future undiscounted cash outflows for operating leases are summarized below as of:

	June 25,		December 31,
	2021		2020		June 24, 2022
2021	$	159	$	300
2022		276		247	$	159
2023		220		190		279
2024		154		125		215
2025		94		65		154
2026						97
Thereafter		84		60		89
Total lease payments		987		987		993
Less: Interest		44		49		44
Total present value of lease liabilities	$	943	$	938	$	949

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, 2021~~24, 2022 and December 31, ~~2020,~~2021, collateral held for receivables from clients was ~~$4,400~~$5,294 and ~~$4,035,~~$4,803, respectively, and collateral held for securities purchased under agreements to resell was ~~$1,101~~$1,103 and ~~$1,743,~~$1,526, respectively. AsGiven the nature of the agreements, the Partnership does not expect the fair value of collateral to fall below the ~~collateral either exceeded or was at least 100%~~value of the ~~amortized cost,~~agreements frequently or for an extended period of time. Therefore, 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,~~24, 2022 and December 31, 2021.

As of June 24, 2022, December 31, 2021 and December 31, ~~2020.~~

~~As of June 25, 2021, December 31,~~ 2020, $625, $695and ~~December 31, 2019, $647, $563 and $470,~~$563, respectively, of the receivable from clients balance and ~~$325, $285~~$330, $335 and ~~$291,~~$285, 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, 2021~~24, 2022 and December 31, ~~2020.~~2021.

The Partnership derived ~~11%~~12% of its total revenue for both the three- and ~~12%~~six-month periods ended June 24, 2022 and 11% and 12% of its total revenue for the three- and six-month periods ended June 25, 2021, respectively, ~~and 13% and 14% of its total revenue for the three- and six-month periods ended June 26, 2020, respectively,~~ from 1one mutual fund company. The revenue generated from this company relates to business conducted with the ~~Partnership's~~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 June 25, 2021						Three Months Ended June 26, 2020						Three Months Ended June 24, 2022								Three Months Ended June 25, 2021
	U.S.		Canada		Total		U.S.		Canada		Total		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	$	1,804		$	37	$	1,841		$	1,782	$	31	$	1,813
Service fees		388		29		417		304		19		323		354			28		382			388		29		417
Other asset-based fees		155		0		155		137		0		137		221			0		221			155		0		155
Total asset-based fee revenue		2,325		60		2,385		1,679		39		1,718		2,379			65		2,444			2,325		60		2,385
Account and activity fee revenue:
Shareholder accounting services fees		109		0		109		104		0		104		113			0		113			109		0		109
Other account and activity fee revenue		59		3		62		53		3		56		55			4		59			59		3		62
Total account and activity fee revenue		168		3		171		157		3		160		168			4		172			168		3		171
Total fee revenue		2,493		63		2,556		1,836		42		1,878		2,547			69		2,616			2,493		63		2,556
Trade revenue:
Commissions		412		14		426		364		14		378		338			14		352			412		14		426
Principal transactions		10		1		11		16		1		17		39			1		40			10		1		11
Total trade revenue		422		15		437		380		15		395		377			15		392			422		15		437
Total revenue from customers		2,915		78		2,993		2,216		57		2,273		2,924			84		3,008			2,915		78		2,993
Net interest and dividends and other revenue		39		2		41		45		7		52		(3	)		9		6			39		2		41
Net revenue	$	2,954	$	80	$	3,034	$	2,261	$	64	$	2,325	$	2,921		$	93	$	3,014		$	2,954	$	80	$	3,034


	Six Months Ended June 25, 2021						Six Months Ended June 26, 2020						Six Months Ended June 24, 2022								Six Months Ended June 25, 2021
	U.S.		Canada		Total		U.S.		Canada		Total		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	$	3,694		$	74	$	3,768		$	3,422	$	58	$	3,480
Service fees		754		54		808		620		43		663		733			57		790			754		54		808
Other asset-based fees		306		0		306		303		0		303		389			0		389			306		0		306
Total asset-based fee revenue		4,482		112		4,594		3,442		82		3,524		4,816			131		4,947			4,482		112		4,594
Account and activity fee revenue:
Shareholder accounting services fees		216		0		216		213		0		213		224			0		224			216		0		216
Other account and activity fee revenue		118		7		125		112		6		118		113			7		120			118		7		125
Total account and activity fee revenue		334		7		341		325		6		331		337			7		344			334		7		341
Total fee revenue		4,816		119		4,935		3,767		88		3,855		5,153			138		5,291			4,816		119		4,935
Trade revenue:
Commissions		831		28		859		828		27		855		704			26		730			831		28		859
Principal transactions		19		1		20		31		2		33		49			2		51			19		1		20
Total trade revenue		850		29		879		859		29		888		753			28		781			850		29		879
Total revenue from customers		5,666		148		5,814		4,626		117		4,743		5,906			166		6,072			5,666		148		5,814
Net interest and dividends and other revenue		67		6		73		58		15		73		(41	)		16		(25	)		67		6		73
Net revenue	$	5,733	$	154	$	5,887	$	4,684	$	132	$	4,816	$	5,865		$	182	$	6,047		$	5,733	$	154	$	5,887

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.~~2021.

The Partnership records fractional shares at fair value in other assets with associated liabilities in accounts payable, accrued expenses and other in the Consolidated Statements of Financial Condition. The liabilities are initially recorded at the dollar amount received from the clients, but the Partnership makes an election to record the liabilities at fair value. Changes in the fair value of the assets and liabilities offset in other revenue in the Consolidated Statements of Income, with no impact on income before allocations to partners.

The Partnership did 0t0t have any assets or liabilities categorized as Level III during the six- and twelve-month periods ended June ~~25, 2021~~24, 2022 and December 31, ~~2020,~~2021, respectively.

The following tables show the Partnership’s financial assets and liabilities measured at fair ~~value:~~value as of:

	Financial Assets at Fair Value as of
	June 25, 2021								June 24, 2022
	Level I		Level II		Level III		Total		Level I		Level II		Level III		Total
Assets:
Cash equivalents:
Certificates of deposit	$	—	$	120	$	—	$	120	$	0	$	384	$	—	$	384
Money market funds	29			—		—		29		27		0		—		27
Total cash equivalents	$	29	$	120	$	—	$	149	$	27	$	384	$	—	$	411

Investments segregated under federal regulations:
U.S. treasuries	$	12,098	$	—	$	—	$	12,098	$	14,520	$	0	$	—	$	14,520
Certificates of deposit										0		400		—		400
Total investments segregated under federal regulations									$	14,520	$	400	$	—	$	14,920

Securities owned:
Investment securities:
Government and agency obligations									$	412	$	0	$	—	$	412
Mutual funds⁽¹⁾	$	348	$	—	$	—	$	348		319		0		—		319
Government and agency obligations		315		—		—		315
Certificates of deposit		—		100		—		100
Equities		4		—		—		4		12		0		—		12
Total investment securities	$	667	$	100	$	—	$	767	$	743	$	—	$	—	$	743

Inventory securities:
State and municipal obligations	$	—	$	15	$	—	$	15
Municipal obligations									$	0	$	18	$	—	$	18
Mutual funds										10		0		—		10
Equities		8		—		—		8		8		0		—		8
Mutual funds		5		—		—		5
Corporate bonds and notes		—		1		—		1		0		5		—		5
Certificates of deposit		—		1		—		1		0		1		—		1
Total inventory securities	$	13	$	17	$	—	$	30	$	18	$	24	$	—	$	42

Other assets:
Client fractional share ownership assets									$	630	$	0	$	—	$	630

Liabilities:
Accounts payable, accrued expenses and other:
Client fractional share redemption obligations									$	630	$	0	$	—	$	630

PART I. FINANCIAL INFORMATION

~~Item 1.~~

~~Financial Statements, continued~~

Item 1. Financial Statements, continued


	December 31, 2021
	Level I		Level II		Level III		Total
Assets:
Cash equivalents:
Certificates of deposit	$	0	$	266	$	—	$	266
Money market funds		47		0		—		47
Total cash equivalents	$	47	$	266	$	—	$	313

Investments segregated under federal regulations:
U.S. treasuries	$	13,908	$	0	$	—	$	13,908
Certificates of deposit		0		400		—		400
Total investments segregated under federal regulations	$	13,908	$	400	$	—	$	14,308

Securities owned:
Investment securities:
Government and agency obligations	$	413	$	0	$	—	$	413
Mutual funds(1)		366		0		—		366
Equities		3		0		—		3
Certificates of deposit		0		70		—		70
Total investment securities	$	782	$	70	$	—	$	852

Inventory securities:
Equities	$	18	$	0	$	—	$	18
Municipal obligations		0		9		—		9
Certificates of deposit		0		6		—		6
Corporate bonds and notes		0		3		—		3
Mutual funds		2		0		—		2
Total inventory securities	$	20	$	18	$	—	$	38

Other assets:
Client fractional share ownership assets	$	710	$	0	$	—	$	710

Liabilities:
Accounts payable, accrued expenses and other:
Client fractional share redemption obligations	$	710	$	0	$	—	$	710

(1)

The mutual funds balance consists primarily of securities held to economically hedge future liabilities for 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⁾

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements, continued

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 ("ELT"), 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~~ELT 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, 2021~~24, 2022 and December 31, ~~2020,~~2021, the outstanding amount of Partnership loans was ~~$395~~$400 and ~~$341,~~$321, respectively. Interest income earned from these loans, which is included in interest and dividends in the Consolidated Statements of Income, was $4$4 and $7$7 for both the three- and six-month periods ended June 24, 2022 and June 25, 2021, ~~respectively,~~respectively.

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


	Six Months Ended
	June 24, 2022			June 25, 2021
Partnership loans outstanding at beginning of period	$	321		$	341
Partnership loans issued during the period		272			220
Repayment of Partnership loans during the period		(193	)		(166	)
Total Partnership loans outstanding	$	400		$	395

The minimum 7.5% annual return on the face amount of limited partnership capital was $23 and ~~$3 and $8~~$46 for both the three- and six-month periods ended June ~~26, 2020~~,24, 2022 and June 25, 2021, 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,

~~PART I. FINANCIAL INFORMATION~~

2018, to register $450 units of limited partnership interest ("Interests") issuable pursuant to the Partnership's 2018 Employee Limited Partnership Interest Purchase Plan (the "2018 Plan"). The Partnership issued approximately $5 and $4 of Interests under the 2018 Plan in the year ended December 31, 2021 and the first half of 2022, respectively. The Partnership plans to terminate the 2018 Plan in 2022 and deregister all remaining unsold Interests under the 2018 Plan. Before the 2018 Plan is terminated, the Partnership may issue the remaining $60 of Interests under that plan at the discretion of the Managing Partner. The Partnership filed a Registration Statement on Form S-8 with the SEC on December 8, 2021, to register an additional $700 of Interests issuable pursuant to the Partnership's 2021 Employee Limited Partnership Interest Purchase Plan (the "2021 Plan"). Proceeds from the offering under the 2021 Plan are expected to be used to meet growth needs or for other purposes.

~~Item 1.~~

~~Financial Statements, continued~~

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

Six Months Ended

June 25,

June 26,

2021

2020

Partnership loans outstanding at beginning of period

$
341

$
360

Partnership loans issued during the period

220

163

Repayment of Partnership loans during the period

(166
)

(135
)
Total Partnership loans outstanding

$
395

$
388

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

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~~EJ 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~~EJ 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~~EJ Canada'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,

2021

2020

U.S.:

Net capital

$
1,348

$
1,306

Net capital in excess of the minimum required

$
1,285

$
1,248

Net capital as a percentage of aggregate debit
   items

42.7
%

45.0
%
Net capital after anticipated capital withdrawals,
   as a percentage of aggregate debit items

21.6
%

23.1
%

Canada:

Regulatory risk-adjusted capital

$
52

$
56

Regulatory risk-adjusted capital in excess of the
   minimum required to be held by IIROC

$
52

$
47

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements, continued

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


	June 24, 2022			December 31, 2021
U.S.:
Net capital	$	1,383		$	1,421
Net capital in excess of the minimum required	$	1,307		$	1,352
Net capital as a percentage of aggregate debit items		36.5	%		41.3	%
Net capital after anticipated capital withdrawals, as a percentage of aggregate debit items		18.5	%		20.7	%

Canada:
Regulatory risk-adjusted capital	$	81		$	71
Regulatory risk-adjusted capital in excess of the minimum required to be held by IIROC	$	74		$	50

~~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~~On April 8, 2022, the parties filed a joint stipulation of dismissal with prejudice, and ~~Edward Jones deny~~ the ~~allegations in~~district court dismissed the ~~remaining counts and intend to vigorously defend against the allegations in this lawsuit.~~lawsuit on April 11, 2022.

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 originally 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 claims, 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 the defendants' motion to ~~dismiss.~~dismiss all other claims. The plaintiffs appealed the district court's dismissal of certain of their state law claims on jurisdictional grounds 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~~dismissal of those state law ~~claims that were the subject of the plaintiffs' appeal, and remanded the case to the district court for~~claims. After further appellate proceedings ~~on those claims. On May 14, 2021,~~in the Ninth Circuit, ~~panel denied defendants' April 19, 2021 petition for panel rehearing and rehearing en banc. On May 20, 2021,~~ defendants filed ~~a motion to stay further proceedings pending defendants' filing of~~ a petition for certiorari with the U.S. Supreme Court, which was denied on January 18, 2022. On February 2, 2022, the ~~Ninth Circuit granted on~~defendants filed a renewed motion to dismiss the plaintiffs' remaining state law claims. On May ~~21, 2021.~~9, 2022, the court dismissed the second amended complaint without prejudice. On May 31, 2022, the plaintiffs filed a third amended complaint alleging a single claim of breach of fiduciary duty under Missouri and California law against a single

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements, continued

defendant, Edward Jones, ~~and its affiliated entities and individuals deny~~which Edward Jones moved to dismiss on June 21, 2022. Edward Jones denies the plaintiffs' allegations and ~~intend~~intends to continue to vigorously defend this lawsuit.

Gender and Race Discrimination Class Action. On ~~May 24, 2018,~~March 9, 2022, Edward Jones and JFC were named as defendants in a ~~putative class action~~ lawsuit (~~Bland~~Dixon, et al. v. Edward D. Jones & Co., L.P., et al.) filed in the U.S. District Court for the ~~Northern~~Eastern District of ~~Illinois~~Missouri. The lawsuit was brought by a current financial advisor as a putative collective action alleging gender discrimination under the FLSA, and by a former financial advisor as a putative class action alleging race discrimination under 42 U.S.C. § ~~1981, alleging that~~1981. On April 25, 2022, 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 reasserting the original claims with modified allegations and adding ~~allegations of discrimination and retaliation~~claims under ~~42 U.S.C. § 2000e,~~ Title VII of the Civil Rights Act of 1964 alleging race/national origin, gender, and ~~retaliation under 42 U.S.C. § 1981. Three named plaintiffs filed a second amended complaint~~sexual orientation discrimination on ~~November 26, 2018 and a third amended complaint on December 30, 2020.~~behalf of putative classes of financial advisors. 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~~defendants filed a motion ~~seeking final approval of the settlement. The district court granted the motion at a hearing~~to dismiss 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~~

~~Reimbursement Class Action.~~ ~~On April 25, 2019,~~May 23, 2022. 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~~deny the ~~Superior Court of the State of California, Sacramento County. Plaintiffs allege that defendants did not reimburse financial advisors~~allegations 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.intend to vigorously defend this lawsuit.

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~~Contingencies.. This liability represents the Partnership’s estimate of the probable loss atas of June ~~25, 2021,~~24, 2022, 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 recorded 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~~$39 as of June ~~25, 2021.~~24, 2022. 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, 2021~~24, 2022 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~~

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

June 25,
2021

June 26,
2020

June 25,
2021

June 26,
2020

Net revenue:

U.S.
$
2,954

$
2,261

$
5,733

$
4,684

Canada

80

64

154

132

Total net revenue
$
3,034

$
2,325

$
5,887

$
4,816

Pre-variable income:

U.S.
$
915

$
569

$
1,756

$
1,205

Canada

13

9

21

14

Total pre-variable income
$
928

$
578

$
1,777

$
1,219

Variable compensation:

U.S.
$
473

$
283

$
933

$
614

Canada

12

7

21

14

Total variable compensation
$
485

$
290

$
954

$
628

Income before allocations to partners:

U.S.
$
442

$
286

$
823

$
591

Canada

1

2

0

0

Total income before allocations to partners
$
443

$
288

$
823

$
591

1615

PART I. FINANCIAL INFORMATION

~~Item 1.~~

~~Financial Statements, continued~~

Item 1. Financial Statements, continued

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


	Three Months Ended				Six Months Ended
	June 24, 2022		June 25, 2021		June 24, 2022		June 25, 2021
Net revenue:
U.S.	$	2,921	$	2,954	$	5,865	$	5,733
Canada		93		80		182		154
Total net revenue	$	3,014	$	3,034	$	6,047	$	5,887

Pre-variable income:
U.S.	$	755	$	915	$	1,574	$	1,756
Canada		19		13		36		21
Total pre-variable income	$	774	$	928	$	1,610	$	1,777

Variable compensation:
U.S.	$	406	$	473	$	870	$	933
Canada		13		12		24		21
Total variable compensation	$	419	$	485	$	894	$	954

Income before allocations to partners:
U.S.	$	349	$	442	$	704	$	823
Canada		6		1		12		0
Total income before allocations to partners	$	355	$	443	$	716	$	823

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

June 25, 2021

$
1,085

0

1,085

0

(1,085
)

$
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			Net amount
June 24, 2022	$	1,087		0		1,087		0		(1,087	)	$	0
December 31, 2021	$	1,529	0			1,529	0			(1,526	)	$	3

⁽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:~~for the:


	Six Months Ended
	June 24, 2022		June 25, 2021
Non-cash activities:
Issuance of general partnership interests through partnership loans in current period	$	272	$	220
Repayment of partnership loans through distributions from partnership capital in current period	$	148	$	139

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		June 24, 2022		June 25, 2021
Cash and cash equivalents	$	1,316	$	1,228	$	1,258	$	1,316
Cash and investments segregated under federal regulations		17,791		13,012		20,711		17,791
Less: Investments segregated under federal regulations		12,125		8,096		14,920		12,125
Total cash, cash equivalents and restricted cash	$	6,982	$	6,144	$	7,049	$	6,982

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 on Form 10-Q for the period ended March 26, 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~~Program fees are ~~generally a percentage of~~based on the ~~total~~average daily market value of ~~specific~~client assets in ~~client accounts.~~the program, as well as contractual rates. These fees are impacted by changes in market values of the assets and by client dollars invested in and divested from the ~~accounts which generate asset-based fees and changes in market values of the assets.~~accounts. 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~~distribution of mutual fund shares and ~~equities, as well as~~insurance products and the purchase or sale of ~~insurance products.~~securities. 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 the trading volume (client dollars invested), mix of the products in which clients invest and the size of trades, all of which may be impacted by market volatility, and margins earned on the ~~transactions and market volatility.~~transactions. 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 financial metrics for the three- and six-month periods ended June ~~25, 2021~~24, 2022 and June ~~26, 2020.~~25, 2021. 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									Six Months Ended
	June 24, 2022			June 25, 2021			% Change			June 24, 2022			June 25, 2021			% Change
Revenue:
Fee revenue	$	2,616		$	2,556			2	%	$	5,291		$	4,935			7	%
% of net revenue		87	%		84	%		4	%		87	%		84	%		4	%
Trade revenue		392			437			-10	%		781			879			-11	%
% of net revenue		13	%		14	%		-7	%		13	%		15	%		-13	%
Interest and dividends		76			40			90	%		120			78			54	%
Other (loss) revenue, net		(46	)		24			-292	%		(98	)		42			-333	%
Total revenue		3,038			3,057			-1	%		6,094			5,934			3	%
Interest expense		24			23			4	%		47			47			—
Net revenue		3,014			3,034			-1	%		6,047			5,887			3	%
Operating expenses		2,659			2,591			3	%		5,331			5,064			5	%
Income before allocations to partners	$	355		$	443			-20	%	$	716		$	823			-13	%

Related metrics:
Income before allocations to partners margin(1)		11.7	%		14.5	%		-19	%		11.7	%		13.9	%		-15	%
Client assets under care ($ billions):
Total:
At period end	$	1,589		$	1,714			-7	%	$	1,589		$	1,714			-7	%
Average	$	1,663		$	1,674			-1	%	$	1,705		$	1,624			5	%
Advisory programs:
At period end	$	614		$	646			-5	%	$	614		$	646			-5	%
Average	$	642		$	625			3	%	$	658		$	600			10	%
Client dollars invested ($ billions)(2):
Trade	$	35		$	27			30	%	$	60		$	55			9	%
Advisory programs	$	9		$	20			-55	%	$	25		$	38			-34	%
Client households at period end		6.0			5.8			3	%		6.0			5.8			3	%
Net new households for the period (actual)(3)		42,092			66,802			-37	%		102,954			145,428			-29	%
Net new assets for the period ($ billions)(4):	$	20		$	23			-13	%	$	39		$	43			-9	%
Financial advisors (actual):
At period end		18,755			18,855			-1	%		18,755			18,855			-1	%
Average		18,752			18,913			-1	%		18,776			19,008			-1	%
Attrition %(5)		6.0	%		6.6	%		-9	%		5.8	%		7.4	%		-22	%
Dow Jones Industrial Average (actual):
At period end		31,501			34,434			-9	%		31,501			34,434			-9	%
Average for period		32,976			34,045			-3	%		33,793			32,801			3	%
S&P 500 Index (actual):
At period end		3,912			4,281			-9	%		3,912			4,281			-9	%
Average for period		4,160			4,165			—			4,304			4,018			7	%
Bloomberg Aggregate Bond Index (actual):
At period end		101			115			-12	%		101			115			-12	%
Average for period		103			115			-10	%		107			115			-7	%

(1)

Income before allocations to partners margin is income before allocations to partners expressed as a percentage of total revenue.

(2)

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.

(3)

Net new households represents new client households less client households closed during the period.

(4)

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

(5)

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.

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⁾19

⁽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 Quarter 2022 versus Second Quarter 2021 ~~versus Second Quarter 2020~~ Overview

Even with market volatility and the changing interest rate environment, the Partnership ended the second quarter of 2022 with $20 billion of net new assets, reflecting growth in asset inflows and higher average asset sizes for new households. Although the Partnership experienced growth in asset inflows, higher asset outflows resulted in lower net new assets than the second quarter of 2021. In addition, the Partnership is making its intentional investments in human capital, technology infrastructure, digital initiatives, virtual enablement tools and test and learn pilot programs to support its long-term growth objectives.

The Partnership ended the second quarter of ~~2021~~2022 with ~~a 31% increase~~$1.6 trillion in client assets under care ~~to $1.7 trillion~~("AUC"), a 7% decrease compared to the end of the second quarter of ~~2020.~~2021. Average client ~~assets under care were also $1.7 trillion during~~AUC decreased 1% in the second quarter of ~~2021, a 34% increase comparedto the same period in 2020~~2022 due to ~~increases in~~lower average market levels, partially offset by the ~~market value~~cumulative impact of ~~client assets,~~net new assets. Advisory programs' average AUC increased 3% as ~~well as~~a result of the cumulative impact of client dollars ~~invested. Net new assets increased 53% to $23 billion during~~invested in advisory programs, partially offset by lower average market levels.

In the second quarter of ~~2021~~2022, the Partnership continued to focus on its strategy to grow and promote branch team success and financial advisor attrition decreased to 6.0%. The Partnership has begun offering greater flexibility and choice to its financial advisors through the options of co-locating their branches with one or more financial advisors in shared office space while maintaining their own individual client relationships, an expanded variety of branch support roles, and a pilot of multi-financial advisor team models. Despite lower attrition, the number of financial advisors decreased by 100 due to a lower number of hires as a result of the Partnership's continued strategy to focus on intentionally building the financial advisor pipeline. This approach may continue to result in fewer financial advisors hired than historical levels.

Although the Partnership experienced growth in asset inflows, referenced above, net new assets declined 13% due to higher asset outflows compared to ~~the second quarter of 2020.~~

~~Advisory programs'~~lower than average ~~assets under care increased 46% to $625 billion~~outflows experienced in the second quarter of ~~2021~~2021. Net new households decreased 37% primarily due to ~~higher average~~fewer households added.

Net revenue decreased 1% to $3,014 primarily due to decreases in other revenue and trade revenue. The decrease in other revenue was due to a decline in 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% to $3,034 for~~over the second quarter of ~~2021 compared~~2022, resulting in unrealized losses from the decrease in the value of the mutual fund investment securities held to economically hedge future liabilities for the ~~same period~~non-qualified deferred compensation plan. Those unrealized losses were offset by the corresponding decreased liability recognized in ~~2020. Results reflected a 39% increase in asset-based fee~~financial advisor compensation expense. Other revenue ~~primarily~~also decreased due to ~~average market increases, as well as~~unrealized losses on the ~~cumulative impact of net asset inflows into advisory programs~~Partnership's U.S. Treasury investment securities, resulting from rising interest rates. Trade revenue decreased due to a decrease in ~~both 2021~~overall margin earned and ~~2020.~~a decrease in client dollars invested in mutual funds. The ~~increase~~decrease in net revenue was ~~also due to an 11% increase~~partially offset by increases in ~~trade~~cash solutions revenue within other asset-based fees and interest and dividends revenue reflecting rising interest rates in the second quarter of ~~2021 compared to the same period in 2020. Trade revenue increased primarily due to higher overall margins earned.~~2022.

Operating expenses increased ~~27%~~3% to ~~$2,591 in the second quarter of 2021 compared to the second quarter of 2020,~~$2,659, primarily ~~due to an increase in compensation and benefits expense. Financial advisor compensation increased due to an increase in revenues on which commissions are earned. Variable compensation increased~~ due to increases in ~~the~~home office and branch compensation, communications and data processing and other operating expenses. The Partnership's ~~profitability, including an~~intentional investments to support its long-term growth objectives, referenced above, have increased home office and branch compensation expenses and communications and data processing expenses. The increase in ~~the number of profitable branches~~other operating expenses was primarily due to increases in costs from resuming in-person meetings and ~~an overall increase in branch profitability. Despite the~~events, philanthropy, advertising and other various items. The increase in operating expenses was partially offset by a decrease in financial advisor compensation expense related to the ~~Partnership continued to experience~~ ~~ongoing cost savings from limits on travel~~non-qualified deferred compensation plan discussed above and ~~in-person events~~decreased variable compensation due to ~~COVID-19.~~lower firm profitability.

Overall, the ~~increase~~decrease in net revenue ~~offset by~~and the increase in operating expenses generated income before allocations to partners of ~~$443,~~$355, a ~~54% increase~~20% decrease from the second quarter of ~~2020.~~ 2021. Income before allocations to partners margin was 11.7%, reflecting a strategic balance between investing in the future and current financial results.

PART I. FINANCIAL INFORMATION

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

Six Months Ended June 24, 2022 versus Six Months Ended June 25, 2021 ~~versus Six Months Ended June 26, 2020~~ Overview

Average client ~~assets under care~~AUC increased ~~27% to $1.6 trillion~~5% and advisory programs' average AUC increased 10% during the first half of ~~2021~~2022 compared to the same period in ~~2020~~2021 due to ~~increases in the market value of client assets, as well as~~ the cumulative impact of ~~client dollars invested. Net~~net new assets ~~increased 26%~~and higher average equity market levels, partially offset by lower average bond market levels.

Although the Partnership experienced growth in asset inflows, referenced above, net new assets declined 9% due to ~~$43 billion during the first half of 2021~~higher asset outflows compared to ~~the first half of 2020.~~

~~Advisory programs'~~lower than average ~~assets under care increased 37%~~outflows experienced in the first half of ~~2021 to $600 billion~~2021. Net new households decreased 29% primarily 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.~~ fewer households added.

Net revenue increased ~~22%~~3% to ~~$5,887 for the first half of 2021 compared to the same period in 2020.~~$6,047. Results reflected a ~~30%~~7% increase in ~~asset-based~~ fee revenue, primarily due to ~~average market increases, as well as~~ the cumulative impact of net asset inflows ~~into~~in advisory programs and higher average equity market levels, partially offset by lower average bond market levels. The net revenue increase was partially offset by decreases in ~~both 2021~~other revenue and ~~2020.~~

~~Operating expenses increased 20%~~trade revenue. The decrease in other revenue was due to ~~$5,064~~a decline in market levels over the first half of ~~2021 compared~~2022, resulting in unrealized losses from the decrease in the value of the mutual fund investment securities held to ~~2020,~~economically hedge future liabilities for the non-qualified deferred compensation plan. Those unrealized losses were offset by the corresponding decreased liability recognized in financial advisor compensation expense. Other revenue also decreased due to unrealized losses on the Partnership's U.S. Treasury investment securities, resulting from rising interest rates. Trade revenue decreased due to a decrease in overall margin earned and a decrease in client dollars invested in mutual funds.

Operating expenses increased 5% to $5,331 primarily due to an increase in home office and branch compensation, communications and ~~benefits expense. Financial advisor~~data processing and other operating expenses. The Partnership's intentional investments to support its long-term growth objectives, referenced above, have increased home office and branch compensation ~~increased largely due to an~~expenses and communications and data processing expenses. The increase in ~~revenues on which commissions are earned. Variable compensation increased~~other operating expenses was primarily due to increases in ~~the Partnership's profitability, including an~~costs from resuming in-person meetings and events, philanthropy, advertising and other various items. The increase in ~~the number of profitable branches and an overall increase~~operating expenses was partially offset by a decrease in ~~branch~~variable compensation due to lower firm profitability. ~~Despite~~

Overall, 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,~~partially offset by the increase in ~~operating expenses,~~net revenues, generated income before allocations to partners of ~~$823,~~$716, a ~~39% increase~~13% decrease from the first half of ~~2020.~~
2021. Income before allocations to partners margin was 11.7%, reflecting a strategic balance between investing in the future and current financial results.

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 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.

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 PERIODS ENDED JUNE ~~25, 2021~~24, 2022 AND JUNE ~~26, 2020~~25, 2021

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%~~2% to ~~$2,556~~$2,616 and ~~28%~~7% to ~~$4,935~~$5,291 in the second quarter and first half of ~~2021,~~2022, respectively, compared to the same periods in ~~2020.~~2021. A discussion of fee revenue components follows.

	Three Months Ended							Six Months Ended
	June 25,		June 26,		%			June 25,		June 26,		%			Three Months Ended							Six Months Ended
	2021		2020		Change			2021		2020		Change			June 24, 2022		June 25, 2021		% Change			June 24, 2022		June 25, 2021		% Change
Fee revenue:
Asset-based fee revenue:
Advisory programs fees	$	1,813	$	1,258		44	%	$	3,480	$	2,558		36	%	$	1,841	$	1,813		2	%	$	3,768	$	3,480		8	%
Service fees		417		323		29	%		808		663		22	%		382		417		-8	%		790		808		-2	%
Other asset-based fees		155		137		13	%		306		303		1	%		221		155		43	%		389		306		27	%
Total asset-based fee revenue		2,385		1,718		39	%		4,594		3,524		30	%		2,444		2,385		2	%		4,947		4,594		8	%
Account and activity fee revenue:
Shareholder accounting services fees		109		104		5	%		216		213		1	%		113		109		4	%		224		216		4	%
Other account and activity fee revenue		62		56		11	%		125		118		6	%		59		62		-5	%		120		125		-4	%
Total account and activity fee revenue		171		160		7	%		341		331		3	%		172		171		1	%		344		341		1	%
Total fee revenue	$	2,556	$	1,878		36	%	$	4,935	$	3,855		28	%	$	2,616	$	2,556		2	%	$	5,291	$	4,935		7	%

Related metrics:
Average U.S. client asset values ($ billions)⁽¹⁾:
Advisory programs	$	613.7	$	420.8		46	%	$	589.9	$	430.9		37	%	$	629.7	$	613.7		3	%	$	645.8	$	589.9		9	%
Mutual fund assets held outside of advisory programs	$	571.3	$	430.5		33	%	$	555.6	$	443.6		25	%	$	538.4	$	571.3		-6	%	$	558.1	$	555.6		—
Insurance	$	89.0	$	72.3		23	%	$	87.5	$	74.6		17	%	$	81.1	$	89.0		-9	%	$	83.9	$	87.5		-4	%
Cash solutions	$	48.9	$	38.7		26	%	$	48.7	$	37.1		31	%	$	53.7	$	48.9		10	%	$	53.9	$	48.7		11	%

⁽¹⁾	(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% to $2,385~~was approximately 97% and ~~30% to $4,594~~98% for the periods presented in ~~the second quarter~~2022 and ~~first half 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 higherrespectively.

Despite lower average market levels in the second quarter ~~and first half~~ of ~~2021~~2022 compared to the same ~~periods~~period in ~~2020, as well as the continuedincrease in investment of client assets in advisory programs and mutual fund assets held outside of advisory programs.~~2021, overall asset-based fee revenue increased 2% to $2,444. Other asset-based fee revenue increased ~~in the second quarter and first half of 2021 compared to the same periods in 2020~~reflecting rising interest rates, primarily due to ~~the growth in client asset values in non-advisory programs. These increases were partially offset~~ ~~by declines in cash solutions revenue, which continues to be negatively impacted by increased~~lower fee waivers ~~in order~~ to maintain a positive client yield on the Money Market Fund ~~following~~and the increase in client assets invested in cash solutions. Advisory programs fee revenue increased due to the cumulative impact of client dollars invested in advisory programs, which was partially offset by lower average market levels. Service fees revenue decreased due to the decrease in the ~~federal funds rate~~average value of mutual fund assets held outside of advisory programs resulting from lower average market levels.

Overall asset-based fee revenue increased 8% to ~~near zero~~$4,947 in ~~March 2020.~~the first half of 2022 compared to the same period in 2021, primarily due to increases in revenue from advisory programs fees and from other asset-based fees. Growth in revenue from advisory programs was due to the cumulative impact of client dollars invested in advisory programs and higher average equity market levels, partially offset by lower average bond market levels in the first half of 2022 compared to the same period in 2021. Other asset-based fee revenue increased reflecting rising interest rates, primarily due to lower fee waivers to maintain a positive client yield on the Money Market Fund and the increase in client assets invested in cash solutions. Service fees revenue decreased in the first half of 2022 due to the decrease in the second quarter of 2022, referenced above, partially offset by an increase in service fees revenue in the first quarter of 2022 as a result of higher average equity market levels.

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~~decreased 10% to $392 and 11% to ~~$437 and decreased 1% to $879~~$781 in the second quarter and first half of ~~2021,~~2022, respectively, compared to the same periods in ~~2020.~~2021. A discussion of trade revenue components follows.


	Three Months Ended									Six Months Ended
	June 24, 2022			June 25, 2021			% Change			June 24, 2022			June 25, 2021			% Change
Trade revenue:
Commissions revenue:
Equities	$	162		$	148			9	%	$	322		$	316			2	%
Mutual funds		125			206			-39	%		279			407			-31	%
Insurance products and other		65			72			-10	%		129			136			-5	%
Total commissions revenue	$	352		$	426			-17	%	$	730		$	859			-15	%
Principal transactions		40			11			264	%		51			20			155	%
Total trade revenue	$	392		$	437			-10	%	$	781		$	879			-11	%

Related metrics:
Client dollars invested ($ billions)(1)
Equities	$	11.2	32%	$	10.1	38%		11	%	$	22.5	37%	$	22.0	40%		2	%
Mutual funds		7.4	21%		12.6	47%		-41	%		16.7	28%		24.7	45%		-32	%
Insurance products and other		2.1	6%		1.9	7%		11	%		3.6	6%		3.5	7%		3	%
Principal transactions		14.3	41%		2.0	8%		615	%		17.6	29%		4.4	8%		300	%
Total client dollars invested	$	35.0		$	26.6			32	%	$	60.4		$	54.6			11	%

Margin per $1,000 invested	$	11.2		$	16.4			-32	%	$	12.9		$	16.1			-20	%
U.S. business days		62			63			-2	%		120			121			-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% increase~~decrease in trade revenue in the second quarter and first half of ~~2021~~2022 compared to the same ~~period~~periods in ~~2020~~2021 was ~~primarily~~ due to ~~increases~~a decrease in mutual funds commissions revenue and the overall margin ~~earned.~~earned, which was partially offset by an increase in principal transactions revenue. Mutual funds commissions revenue decreased due to the decrease in client dollars invested in mutual fund products. Overall margin ~~earned increased~~decreased due to a change in product mix with a higher portion of client dollars invested in ~~mutual funds, which~~principal transaction products that earn ~~higher~~lower margins than ~~equities~~other products. The shift in product mix and increased principal ~~transaction products. Despite higher overall margins, margins earned on mutual funds have decreased~~transactions revenue was due to ~~changes in mutual fund fee structures, which has partially offset the~~a significant increase ~~in mutual funds revenue. Principal transactions revenue decreased as a result of a decrease~~ in client dollars invested ~~with lower~~in fixed income products, primarily certificates of deposit, during the increasing interest ~~rates on those products compared to~~rate environment in the second quarter of ~~2020.~~

~~The 1% decrease in trade revenue for the first half of 2021~~2022 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 of 2020,2021.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 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.

~~PART I. FINANCIAL INFORMATION~~

~~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 $35 to ~~$17~~$52 and $42 to $73 in the second quarter ~~of 2021 compared to the second quarter of 2020 due to lower average interest rates earned on short-term investment balances. In the~~and first half of ~~2021, net interest and dividends revenue decreased 55% to $31~~2022, respectively, compared to the same ~~period~~periods in ~~2020~~2021, primarily due to increased short-term investment interest ~~rates remaining at record low levels since the Federal Reserve cut the federal funds effective rate to near zero~~income and an increase in ~~March 2020, which began impacting results~~interest income earned on client margin loans. The average balances of short-term investments increased 11% and 10% and client margin loans held by clients increased 22% and 21% in the second quarter ~~of 2020~~ and ~~therefore was only partially reflected in the results of the~~ first half of ~~2020. Despite increases in short-term investment balances and client margin balances in the first half of 2021, interest income decreased from lower average interest rates earned on those balances~~2022, respectively, compared to the same ~~period~~periods in ~~2020. The decrease~~2021. Additionally, short-term investment income increased due to a rise in interest ~~revenue was partially offset by a decrease~~rates in ~~customer credit interest expense in~~ the second quarter and first half of ~~2021~~2022 compared to the same ~~period~~periods in ~~2020.~~2021.

The majority of interest expense in the second quarter and first half of ~~2021~~2022 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~~current 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%~~3% to ~~$2,591~~$2,659 and ~~20%~~5% to ~~$5,064~~$5,331 in the second quarter and first half of ~~2021,~~2022, respectively, compared to the same periods in ~~2020,~~2021 primarily due to ~~an increase~~increases in home office and branch compensation, communications and ~~benefits expense.~~data processing and other operating expenses. A discussion of operating expense components follows.


	Three Months Ended							Six Months Ended
	June 24, 2022		June 25, 2021		% Change			June 24, 2022		June 25, 2021		% Change
Operating expenses:
Compensation and benefits:
Financial advisor	$	1,179	$	1,237		-5	%	$	2,408	$	2,406		—
Home office and branch		488		426		15	%		932		827		13	%
Variable compensation		419		485		-14	%		894		954		-6	%
Total compensation and benefits		2,086		2,148		-3	%		4,234		4,187		1	%

Communications and data processing		159		115		38	%		305		219		39	%
Occupancy and equipment		144		135		7	%		287		269		7	%
Fund sub-adviser fees		63		59		7	%		126		115		10	%
Professional and consulting fees		44		34		29	%		84		65		29	%
Other operating expenses		163		100		63	%		295		209		41	%
Total operating expenses	$	2,659	$	2,591		3	%	$	5,331	$	5,064		5	%

Related metrics (actual):
Number of branches:
At period end		15,641		15,377		2	%		15,641		15,377		2	%
Average		15,610		15,376		2	%		15,580		15,368		1	%
Financial advisors:
At period end		18,755		18,855		-1	%		18,755		18,855		-1	%
Average		18,752		18,913		-1	%		18,776		19,008		-1	%
Branch office administrators(1):
At period end		17,852		17,249		3	%		17,852		17,249		3	%
Average		17,763		17,155		4	%		17,683		17,049		4	%
Home office associates(1):
At period end		7,932		7,128		11	%		7,932		7,128		11	%
Average		7,894		7,102		11	%		7,797		7,062		10	%

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.

⁽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.~~

~~PART I. FINANCIAL INFORMATION~~

~~Item 2.~~

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

Financial advisor compensation and benefits expense decreased 5% to $1,179 in the second quarter of 2022 compared to the second quarter in 2021 and increased slightly to $2,408 in the first half of 2022 compared to the same period in 2021. The decrease in the second quarter of 2022 was primarily due to decreased future liabilities as a result of corresponding unrealized losses related to the economic hedge for the non-qualified deferred compensation plan. The slight increase in ~~operating expenses~~financial advisor compensation in the first half of 2022 was primarily due to the increase in revenues on which commissions are earned and increases in travel incentive program costs, which were significantly offset by the lower future liabilities in relation to the non-qualified deferred compensation plan referenced above and lower new financial advisor salary and other compensation expense from fewer financial advisors hired as a result of the Partnership's intentional strategy to build the financial advisor pipeline.

Home office and branch compensation and benefits expense increased 15% to $488 and 13% to $932 in the second quarter and first half of ~~2021 compared to the same periods in 2020 was primarily due to compensation and benefits expense (described below) increasing 30% to $2,148 and 23% to $4,187, respectively.~~

~~Financial advisor compensation and benefits expense increased 29% to $1,237 and 21% to $2,406 in the second quarter and first half of 2021,~~2022, respectively, compared to the same periods in ~~2020~~2021 primarily due to higher wages and healthcare costs, including from an increase in ~~revenues on which commissions are earned.~~the number of associates.

PART I. FINANCIAL INFORMATION

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

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~~The decrease in variable compensation ~~increased 67%~~of 14% to ~~$485~~$419 and ~~52%~~6% to ~~$954~~$894 in the second quarter and first half of ~~2021,~~2022, respectively, compared to the same periods in ~~2020~~2021 was due to ~~increases~~a decrease in the Partnership's overall profitability, ~~including~~which was partially offset by an increase in the number of profitable ~~branches~~branches.

Communications and ~~an overall increase in branch profitability.~~

~~The Partnership uses the ratios of both the number of home office associates~~data processing expenses increased 38% to $159 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% and 3%, respectively, in the second quarter of 2021 compared39% to the same period in 2020. In the first half of 2021, the average number of home office associates and BOAs per 100 financial advisors stayed constant and increased 1%, respectively, compared to the first half of 2020. Operating expenses per financial advisor increased 11% and 4%$305 in the second quarter and first half of ~~2021,~~2022, respectively, compared to the same periods in ~~2020,~~2021 due to ~~the increase~~intentional investments in technology infrastructure, digital initiatives, virtual enablement tools and test and learn pilot programs.

Other operating expenses ~~(excluding financial advisor compensation, variable compensation~~increased 63% to $163 and ~~fund sub-advisor fees), which were spread across a decreased average number of financial advisors~~41% to $295 in the second quarter ~~of 2021~~ and ~~a slightly increased average number of financial advisors in the~~ first half of ~~2021.~~

~~The number of financial advisors decreased 306 to 18,855 at the end of the second quarter of 2021~~2022, respectively, compared to the ~~end of the~~ same ~~period~~periods 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 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~~2021 primarily due to ~~COVID-19. The Partnership continues to assess the measures adopted~~increases in ~~response to the COVID-19 pandemic. In the event the Partnership begins to experience adverse impacts in response to further economic or market~~costs associated with resuming in-person meetings and events, ~~the Partnership may consider resuming or adopting measures to reduce future operating expenses.~~philanthropy, advertising and other various items.

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~~

PART I. FINANCIAL INFORMATION

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

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


	Three Months Ended							Six Months Ended
	June 24, 2022		June 25, 2021		% Change			June 24, 2022		June 25, 2021		% Change
Net revenue:
U.S.	$	2,921	$	2,954		-1	%	$	5,865	$	5,733		2	%
Canada		93		80		16	%		182		154		18	%
Total net revenue		3,014		3,034		-1	%		6,047		5,887		3	%

Operating expenses (excluding variable compensation):
U.S.		2,166		2,039		6	%		4,291		3,977		8	%
Canada		74		67		10	%		146		133		10	%
Total operating expenses		2,240		2,106		6	%		4,437		4,110		8	%

Pre-variable income:
U.S.		755		915		-17	%		1,574		1,756		-10	%
Canada		19		13		46	%		36		21		71	%
Total pre-variable income		774		928		-17	%		1,610		1,777		-9	%

Variable compensation:
U.S.		406		473		-14	%		870		933		-7	%
Canada		13		12		8	%		24		21		14	%
Total variable compensation		419		485		-14	%		894		954		-6	%

Income before allocations to partners:
U.S.		349		442		-21	%		704		823		-14	%
Canada		6		1		500	%		12		—		1200	%
Total income before allocations to partners	$	355	$	443		-20	%	$	716	$	823		-13	%

Client assets under care ($ billions):
U.S.
At period end	$	1,553.9	$	1,677.2		-7	%	$	1,553.9	$	1,677.2		-7	%
Average	$	1,625.3	$	1,638.5		-1	%	$	1,667.1	$	1,589.5		5	%
Canada
At period end	$	35.2	$	36.7		-4	%	$	35.2	$	36.7		-4	%
Average	$	37.3	$	35.7		4	%	$	37.9	$	34.2		11	%

Net new assets for the period ($ billions):
U.S.	$	18.9	$	21.7		-13	%	$	37.3	$	41.0		-9	%
Canada	$	0.7	$	0.7		—		$	1.5	$	1.5		—

Financial advisors (actual):
U.S.
At period end		17,910		17,977		—			17,910		17,977		—
Average		17,904		18,030		-1	%		17,926		18,118		-1	%
Canada
At period end		845		878		-4	%		845		878		-4	%
Average		848		883		-4	%		850		890		-4	%

PART I. FINANCIAL INFORMATION

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

U.S.

Net revenue decreased 1% to $2,921 in the second quarter of 2022 compared to the second quarter of 2021, primarily due to decreases in other revenue and trade revenue. The decrease in other revenue was due to a decline in market levels over the second quarter of 2022, resulting in unrealized losses from the decrease in the value of the mutual fund investment securities held to economically hedge future liabilities for the non-qualified deferred compensation plan. Other revenue also decreased due to unrealized losses on the Partnership's U.S. Treasury investment securities, resulting from rising interest rates. Trade revenue decreased due to a decrease in overall margin earned from a change in product mix and a decrease in client dollars invested in mutual funds. The decrease in net revenue was partially offset by increases in cash solutions revenue within other asset-based fees reflecting rising interest rates in the second quarter of 2022.

~~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%~~2% to ~~$2,954~~$5,865 in the first half of 2022 compared to the same period in 2021 primarily due to increases in fee revenue. Asset-based fee revenue increased 8% to $4,816 led by an increase in revenue from advisory programs fees, primarily due to the continued investment of client assets in advisory programs and ~~22%~~higher average equity market levels, partially offset by lower average bond market levels. The net revenue increase was partially offset by decreases in other revenue and trade revenue. The decrease in other revenue was due to ~~$5,733~~a decline in market levels over the first half of 2022, resulting in unrealized losses from the decrease in the value of the economic hedge for future liabilities and the Partnership's U.S. Treasury investment securities, as discussed above. Trade revenue decreased due to a decrease in overall margin earned from a change in product mix and a decrease in client dollars invested in mutual funds.

Operating expenses (excluding variable compensation) increased 6% to $2,166 and 8% to $4,291 in the second quarter and first half of ~~2021,~~2022, respectively, compared to the same ~~periods~~period in ~~2020~~2021 primarily due to increases in home office and branch compensation, other operating expenses and communications and data processing. Home office and branch compensation increased due to higher wages and healthcare costs, including from an increase in ~~asset-based fee revenue. Asset-based fee revenue~~the number of associates. Other operating expenses increased ~~39%~~primarily due to ~~$2,325~~increases in costs from resuming in-person meetings and ~~30%~~events, philanthropy, advertising and other various items. The increase in communications and data processing was due to ~~$4,482~~intentional investments in technology infrastructure, digital initiatives, virtual enablement tools and test and learn pilot programs. The increase in operating expenses in the second quarter of 2022 was partially offset by a decrease in financial advisor compensation expense, which was the result of decreased future liabilities from the corresponding unrealized losses related to the economic hedge for the non-qualified deferred compensation plan.

Net income before allocations to partners decreased 21% to $349 and 14% to $704 in the second quarter and first half of 2022, respectively, compared to the same periods in 2021.

Canada

Net revenue increased 16% to $93 and 18% to $182 in the second quarter and first half of 2022, respectively, compared to the same periods in 2021, due to increases in revenue from asset-based fees, interest and dividends and other revenue. Asset-based fee revenue increased 8% to $65 and 17% to $131 in the second quarter and first half of 2022, respectively, led by an increase in revenue from advisory programs fees primarily due to ~~higher average market levels~~the cumulative impact of client assets invested in advisory programs. Interest and dividends and other revenue increased due to a rise in interest rates and favorable exchange rates, respectively, in the second quarter and first half of ~~2021 compared to the same periods in 2020, as well as the cumulative impact of net asset inflows into advisory programs.~~ 2022.

Operating expenses (excluding variable compensation) increased ~~21% to $2,039 and 14% to $3,977~~10% in both the second quarter and first half of ~~2021,~~2022 to $74 and $146, respectively, compared to the same periods in ~~2020~~2021 primarily due to an increase in financial advisor compensation. Financial advisor compensation ~~and benefits expense primarily~~increased largely due to an increase in revenues on which commissions are earned.

~~Canada~~

Net ~~revenue~~income before allocations to partners significantly increased ~~25%~~ to ~~$80~~$6 and ~~17% to $154~~$12 in the second quarter and first half of ~~2021,~~2022, respectively, compared to the same periods in ~~2020, primarily due to increases in asset-based fee revenue. Asset-based fee revenue increased 54% to $60~~2021.

PART I. FINANCIAL INFORMATION

Item 2. Management's Discussion and ~~37% to $112 in the second quarter~~Analysis of Financial Condition and ~~first half~~Results of 2021, respectively, led by an increase in revenue from advisory programs fees primarily due to higher average market levels in the second quarter and first half of 2021 compared to the same periods in 2020, as well as the cumulative impact of net asset inflows into advisory programs.Operations, continued

Operating expenses (excluding variable compensation) increased 22% to $67 and 13% to $133 in the second quarter and first half 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.

MUTUAL FUNDS AND INSURANCE PRODUCTS

The Partnership ~~earned~~estimates approximately ~~31%~~26% and 30% of its total revenue was derived from sales and services related to mutual fund and insurance products for ~~each of~~ the three- and six-month periods ended June 24, 2022 and June 25, 2021, ~~and June 26, 2020.~~respectively. In addition, the Partnership derived 12% of its total revenue for both the three- and six-month periods ended June 24, 2022 and 11% and 12% of its total revenue for the three- and six-month periods ended June 25, 2021, respectively, ~~and 13% and 14% of its total revenue for the three- and six-month periods ended June 26, 2020, respectively,~~ from one mutual fund company. The revenue generated from this company relates to business conducted with the Partnership’s U.S. segment.

Significant reductions in these revenues due to changes in the mutual ~~fund~~funds industry affecting 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, 2021, the~~ Partnership had $2,401 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 in Partnership capital and no debt as of June 25, 2021. The Partnership has committed and uncommitted lines of credit in place should a liquidity need arise but has not drawn upon these lines. 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. Capital

~~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 U.S. Securities and Exchange Commission ("SEC") on January 12, 2018, to register $450 of Interests issuable pursuant to the Partnership's 2018 Employee Limited Partnership Interest Purchase Plan (the "2018 Plan"). The Partnership issued approximately $5 and $4 of Interests under the 2018 Plan in the year ended December 31, 2021 and the first half of 2022, respectively. The Partnership plans to terminate the 2018 Plan in 2022 and deregister all remaining unsold Interests under the 2018 Plan. Before the 2018 Plan is terminated, the Partnership may issue the remaining $60 of Interests under that plan at the discretion of the Managing Partner. The Partnership filed a Registration Statement on Form S-8 with the SEC on ~~January 12, 2018,~~December 8, 2021, to register ~~$450~~an additional $700 of Interests issuable pursuant to the ~~2018~~2021 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 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~~2021 Plan ~~were and~~ are expected to be used to meet growth needs or for ~~working capital and general firm purposes and to ensure there is adequate general liquidity of the Partnership for future needs.~~other purposes. The issuance of Interests reduces the Partnership’s net interest income and ~~profitability.~~income before allocations to partners.

The Partnership’s capital subject to mandatory redemption atas of June ~~25, 2021,~~24, 2022, net of reserve for anticipated withdrawals, was ~~$3,307,~~$3,481, an increase of ~~$232~~$246 from December 31, ~~2020.~~2021. This increase ~~in Partnership capital subject to mandatory redemption~~ was primarily due to the retention of a portion of general partner earnings ($~~85)~~76) and additional capital contributions related to limited partner, subordinated limited partner and general partner interests ($~~5, $60~~4, $52 and ~~$220,~~$272, respectively), partially offset by the net increase in Partnership loans outstanding ($~~54)~~79) and the redemption of limited partner, subordinated limited partner and general partner interests ($~~10, $16~~8, $18 and ~~$58,~~$53, respectively). During the three- and six-month periods ended June ~~25, 2021~~24, 2022 and June ~~26, 2020,~~25, 2021, the Partnership retained 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’s Twenty-First Amended and Restated Agreement of Registered Limited Liability Limited Partnership, ~~Agreement,~~dated September 1, 2021 (the “Partnership Agreement”), a partner’s capital is required to be redeemed by the Partnership in the event of the ~~partner’s~~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 ("ELT"), 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~~ELT 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%. per annum. 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~~their 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 June 24, 2022
	Limited Partnership Interests			Subordinated Limited Partnership Interests		General Partnership Interests			Total Partnership Interests
Total Partnership capital(1)	$	1,221		$	615	$	2,045		$	3,881
Partnership capital owned by partners with individual loans	$	89		$	—	$	992		$	1,081
Partnership capital owned by partners with individual loans as a percent of total Partnership capital		7	%		—		49	%		28	%

Individual loans:
Individual bank loans	$	16		$	—	$	—		$	16
Individual Partnership loans		—			—		400			400
Total individual loans	$	16		$	—	$	400		$	416
Individual loans as a percent of total Partnership capital		1	%		—		20	%		11	%
Individual loans as a percent of respective Partnership capital owned by partners with loans		18	%		—		40	%		38	%

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,
	2021		2020		June 24, 2022		December 31, 2021
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, 2021,~~24, 2022, 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, 2021~~24, 2022 or December 31, ~~2020.~~2021. In addition, the Partnership did not have any draws against these lines of credit during the six-month period ended June ~~25, 2021,~~24, 2022, 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, 2021,~~24, 2022, the Partnership had ~~$1,316~~$1,258 in cash and cash equivalents and ~~$1,085~~$1,087 in securities purchased under agreements to resell, which generally have ~~overnight maturities.~~maturities of less than one week. This totaled to ~~$2,401~~$2,345 of Partnership liquidity as of June ~~25, 2021,~~24, 2022, a ~~15%~~30% decrease from ~~$2,839 at~~$3,364 as of December 31, ~~2020.~~2021. The Partnership had ~~$17,791~~$20,711 and ~~$17,918~~$20,179 in cash and investments segregated under federal regulations as of June ~~25, 2021~~24, 2022 and December 31, ~~2020,~~2021, respectively, which was not available for general use. TheThe Partnership also held ~~$315~~$412 and ~~$971~~$413 in government and agency obligations as of June ~~25, 2021~~24, 2022 and December 31, ~~2020,~~2021, respectively, primarily to help facilitate cash management and maintain firm liquidity. ~~The decrease in the government and agency obligations balance 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. Changes in cash were ~~also~~ due to ~~timing of~~the 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.~~the Financial Industry Regulatory Authority ("FINRA"). 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~~EJ Canada ~~broker-dealer subsidiary~~ is a registered broker-dealer regulated by ~~IIROC.~~the Investment Industry Regulatory Organization of Canada ("IIROC"). Under the regulations prescribed by IIROC, ~~the Partnership's~~EJ 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~~EJ Canada's assets and operations.

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

	June 25,			December 31,
	2021			2020			% Change			June 24, 2022			December 31, 2021			% Change
U.S.:
Net capital	$	1,348		$	1,306			3	%	$	1,383		$	1,421			-3	%
Net capital in excess of the minimum required	$	1,285		$	1,248			3	%	$	1,307		$	1,352			-3	%
Net capital as a percentage of aggregate debit items		42.7	%		45.0	%		-5	%		36.5	%		41.3	%		-12	%
Net capital after anticipated capital withdrawals, as a percentage of aggregate debit items		21.6	%		23.1	%		-6	%		18.5	%		20.7	%		-11	%

Canada:
Regulatory risk-adjusted capital	$	52		$	56			-7	%	$	81		$	71			14	%
Regulatory risk-adjusted capital in excess of the minimum required to be held by IIROC	$	52		$	47			11	%	$	74		$	50			48	%

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.

3231

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~~

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.

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 inflation, 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;~~States and economic effects of international geopolitical conflicts; (2) changes in interest rates; (3) the COVID-19 pandemic and the global governmental response, vaccination and related impact on society, the global economy and volatility in financial markets; (4) regulatory actions; ~~(3)~~(5) changes in legislation or regulation; ~~(4)~~(6) actions of competitors; ~~(5)~~(7) litigation; ~~(6)~~(8) the ability of clients, other broker-dealers, banks, depositories and clearing organizations to fulfill contractual obligations; ~~(7) changes in interest rates; (8)~~(9) changes in technology and other technology-related risks; ~~(9)~~(10) a fluctuation or decline in the fair value of securities; ~~(10)~~(11) our ability to attract and retain qualified financial advisors and other employees; and ~~(11)~~(12) 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.

3332

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~~$3.6 billion and ~~$21.3~~$23.3 billion for the six-month period ended June ~~25, 2021.~~24, 2022. These margin receivables and investments earned interest at an average annual rate of approximately ~~398~~393 and 1035 basis points ~~(3.98%~~(3.93% and ~~0.10%~~0.35%), respectively, during the first half of ~~2021.~~2022. 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 or decrease in short-term interest rates could increase or decrease, respectively, its annual net interest income by approximately ~~$118~~$145 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 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, 2021.~~24, 2022.

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.

3433

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 the quarter 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. 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.None.

3534

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~~Twenty-Second Amended and Restated Certificate of Limited Partnership of the Jones Financial Companies, L.L.L.P., dated ~~January 24, 2019,~~February 22, 2022, incorporated by reference from Exhibit 3.2 to The Jones Financial Companies, L.L.L.P. ~~Annual Report on~~ Form ~~10-K~~10-Q for the ~~fiscal year~~quarterly period ended ~~December 31, 2018.~~March 25, 2022.
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~~Twenty-Second Restated Certificate of Limited Partnership of The Jones Financial Companies, L.L.L.P., dated March 24, 2022, incorporated by reference from Exhibit 3.3 to The Jones Financial Companies, L.L.L.P. Form 10-Q for the quarterly period ended March 25, ~~2019,~~2022.
3.4	*	Second Amendment of Twenty-Second Restated Certificate of Limited Partnership of The Jones Financial Companies, L.L.L.P., dated April 20, 2022, 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.~~25, 2022.
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~~Twenty-Second Restated Certificate of Limited Partnership of The Jones Financial Companies, L.L.L.P., dated May ~~22, 2019, incorporated by reference from Exhibit~~ 24, 2022.
3.6 to	**	Fourth Amendment of Twenty-Second Restated Certificate of Limited Partnership of The Jones Financial Companies, L.L.L.P. ~~Form 10-Q for the quarterly period ended~~, dated June ~~28, 2019.~~23, 2022.
3.7	**	Fifth Amendment of ~~Twenty-First~~Twenty-Second 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, 2019.21, 2022.
~~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~~31.1		~~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~~.

~~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~~.
~~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~~.
~~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, 2021~~5, 2022

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, 2021~~5, 2022
Penny Pennington	Managing Partner (Principal Executive Officer)	August ~~6, 2021~~5, 2022

/s/ ~~Kevin D. Bastien~~Andrew T. Miedler	Chief Financial Officer (Principal Financial and Accounting Officer)	August ~~6, 2021~~5, 2022
~~Kevin D. Bastien~~Andrew T. Miedler		August ~~6, 2021~~5, 2022

	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

	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	%