10-Q

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  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  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.

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 October 28, 2022, 1,215,111 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 accompanying notes are an integral part of these Consolidated Financial Statements.

NOTE 3 – RECEIVABLES AND REVENUE

As of September 30, 2022 and December 31, 2021, collateral held for receivables from clients was $5,416 and $4,803, respectively, and collateral held for securities purchased under agreements to resell was $777 and $1,526, respectively. Given the nature of the agreements, the Partnership does not expect the fair value of collateral to fall below the value of the agreements frequently or for an extended period of time. Therefore, the expected credit loss was zero for each period. Additionally, partnership loan values remained below the value of capital allocated to partners, resulting in an expected credit loss of zero as of September 30, 2022 and December 31, 2021.

As of September 30, 2022, December 31, 2021 and December 31, 2020, $614, $695 and $563, respectively, of the receivable from clients balance and $310, $335 and $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 zero as of September 30, 2022 and December 31, 2021.

The Partnership derived 11% and 12% of its total revenue for the three- and nine-month periods ended September 30, 2022, respectively, and 13% and 12% of its total revenue for the three- and nine-month periods ended September 24, 2021, respectively, from one mutual fund company. The revenue generated from this company relates to business conducted with the Partnership’s U.S. segment.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements, continued

The following table shows the Partnership's disaggregated revenue information. See Note 9 for segment information.


	Three Months Ended September 30, 2022						Three Months Ended September 24, 2021
	U.S.		Canada		Total		U.S.		Canada		Total
Fee revenue:
Asset-based fee revenue:
Advisory programs fees	$	1,784	$	37	$	1,821	$	1,904	$	34	$	1,938
Service fees		340		26		366		403		29		432
Other asset-based fees		251		—		251		165		—		165
Total asset-based fee revenue		2,375		63		2,438		2,472		63		2,535
Account and activity fee revenue:
Shareholder accounting services fees		116		—		116		109		—		109
Other account and activity fee revenue		55		4		59		59		4		63
Total account and activity fee revenue		171		4		175		168		4		172
Total fee revenue		2,546		67		2,613		2,640		67		2,707
Trade revenue:
Commissions		291		10		301		381		11		392
Principal transactions		51		3		54		9		1		10
Total trade revenue		342		13		355		390		12		402
Total revenue from customers		2,888		80		2,968		3,030		79		3,109
Net interest and dividends and other revenue		67		15		82		22		9		31
Net revenue	$	2,955	$	95	$	3,050	$	3,052	$	88	$	3,140


	Nine Months Ended September 30, 2022						Nine Months Ended September 24, 2021
	U.S.		Canada		Total		U.S.		Canada		Total
Fee revenue:
Asset-based fee revenue:
Advisory programs fees	$	5,478	$	111	$	5,589	$	5,326	$	92	$	5,418
Service fees		1,073		83		1,156		1,157		83		1,240
Other asset-based fees		640		—		640		471		—		471
Total asset-based fee revenue		7,191		194		7,385		6,954		175		7,129
Account and activity fee revenue:
Shareholder accounting services fees		340		—		340		325		—		325
Other account and activity fee revenue		168		11		179		177		11		188
Total account and activity fee revenue		508		11		519		502		11		513
Total fee revenue		7,699		205		7,904		7,456		186		7,642
Trade revenue:
Commissions		995		36		1,031		1,212		39		1,251
Principal transactions		100		5		105		28		2		30
Total trade revenue		1,095		41		1,136		1,240		41		1,281
Total revenue from customers		8,794		246		9,040		8,696		227		8,923
Net interest and dividends and other revenue		26		31		57		89		15		104
Net revenue	$	8,820	$	277	$	9,097	$	8,785	$	242	$	9,027

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, 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 not have any assets or liabilities categorized as Level III during the nine- and twelve-month periods ended September 30, 2022 and December 31, 2021, respectively.

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


	September 30, 2022
	Level I		Level II		Level III		Total
Assets:
Cash equivalents:
Certificates of deposit	$	—	$	246	$	—	$	246
Money market funds		41		—		—		41
Total cash equivalents	$	41	$	246	$	—	$	287

Investments segregated under federal regulations:
U.S. treasuries	$	12,253	$	—	$	—	$	12,253
Certificates of deposit		—		400		—		400
Total investments segregated under federal regulations	$	12,253	$	400	$	—	$	12,653

Securities owned:
Investment securities:
Government and agency obligations	$	807	$	—	$	—	$	807
Mutual funds(1)		289		—		—		289
Equities		7		—		—		7
Total investment securities	$	1,103	$	—	$	—	$	1,103

Inventory securities:
Equities	$	24	$	—	$	—	$	24
Municipal obligations		—		22		—		22
Corporate bonds and notes		—		20		—		20
Certificates of deposit		—		17		—		17
Mutual funds		8		—		—		8
Total inventory securities	$	32	$	59	$	—	$	91

Other assets:
Client fractional share ownership assets	$	593	$	—	$	—	$	593

Liabilities:
Accounts payable, accrued expenses and other:
Client fractional share redemption obligations	$	593	$	—	$	—	$	593

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements, continued


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

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

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

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

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

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

NOTE 9 – SEGMENT INFORMATION

The Partnership has determined it 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, 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.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements, continued

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


	Three Months Ended				Nine Months Ended
	September 30, 2022		September 24, 2021		September 30, 2022		September 24, 2021
Net revenue:
U.S.	$	2,955	$	3,052	$	8,820	$	8,785
Canada		95		88		277		242
Total net revenue	$	3,050	$	3,140	$	9,097	$	9,027

Pre-variable income:
U.S.	$	709	$	884	$	2,283	$	2,640
Canada		24		22		60		43
Total pre-variable income	$	733	$	906	$	2,343	$	2,683

Variable compensation:
U.S.	$	405	$	496	$	1,275	$	1,429
Canada		9		10		33		31
Total variable compensation	$	414	$	506	$	1,308	$	1,460

Income before allocations to partners:
U.S.	$	304	$	388	$	1,008	$	1,211
Canada		15		12		27		12
Total income before allocations to partners	$	319	$	400	$	1,035	$	1,223

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 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.

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. Program fees are based on the average daily market value of client assets in 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. 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 distribution of mutual fund shares and insurance products and the purchase or sale of 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. 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.

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

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 nine-month periods ended September 30, 2022 and September 24, 2021. Management of the Partnership relies on this financial information and the related metrics to evaluate the Partnership’s operating performance and financial condition.

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

Even with continued market volatility and the changing interest rate environment, the Partnership ended the third quarter of 2022 with a 23% increase in net new assets compared to the same period in 2021, reflecting growth in asset inflows and higher average asset sizes for new households, although net new households decreased 11% primarily due to fewer households added. In addition, the Partnership continues to make 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 third quarter of 2022 with $1.5 trillion in client assets under care ("AUC"), a 14% decrease compared to the end of the third quarter of 2021, reflecting declines in market levels. Average client AUC decreased 8% and advisory programs' average AUC decreased 7% in the third quarter of 2022 due to lower average market levels, partially offset by the cumulative impact of net new assets and client dollars invested in advisory programs, respectively.

In the third quarter of 2022, the Partnership continued to focus on its strategy to grow and promote branch team success. The number of financial advisors decreased by 79 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 and a modest increase in financial advisor attrition. This approach to hiring may continue to result in fewer financial advisors hired than historical levels. The Partnership has begun offering options for greater flexibility and choice to its financial advisors, which may have a positive impact on financial advisor retention. These options include 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.

Net revenue decreased 3% to $3,050 due to decreases in fee revenue, other revenue and trade revenue. Fee revenue decreased due to lower average market levels in the third quarter of 2022. The decrease in other revenue was due to a decline in market levels over the third 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. 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 U.S. Treasury securities held, 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. The decrease in net revenue was partially offset by increases in interest and dividends revenue and cash solutions revenue within other asset-based fees, reflecting rising interest rates.

Operating expenses slightly decreased to $2,731, primarily due to decreases in variable compensation and financial advisor compensation. Variable compensation decreased due to lower firm profitability. Financial advisor compensation decreased primarily due to lower revenues on which commissions are earned. The decrease in operating expenses was partially offset by increases in home office and branch compensation and communications and data processing expenses. The Partnership's 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.

Overall, the decrease in net revenue led to income before allocations to partners decreasing 20% to $319. Income before allocations to partners margin was 10.3%, reflecting a strategic balance between investing in the future and current financial results.

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

Nine Months Ended September 30, 2022 versus Nine Months Ended September 24, 2021 Overview

Average client AUC increased 1% and advisory programs' average AUC increased 4% during the first nine months of 2022 compared to the same period in 2021 due to the cumulative impact of net new assets, partially offset by lower average bond market levels.

Net new assets increased 2% due to higher asset inflows. Net new households decreased 24% primarily due to fewer households added.

Net revenue increased 1% to $9,097 due to increases in fee revenue and interest and dividends revenue. Advisory fee revenue increased due to the cumulative impact of net asset inflows in advisory programs, partially offset by lower average bond market levels. Cash solutions revenue and interest and dividends revenue increased, reflecting rising interest rates in the first nine months of 2022. The net revenue increase was partially offset by decreases in other revenue and trade revenue. The decrease in other revenue was due to a decline in market levels over the first nine months 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. 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 U.S. Treasury securities held, 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 3% to $8,062 primarily due to increases in home office and branch compensation, communications and 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 expenses and communications and data processing expenses. The increase in other operating expenses was primarily due to increases in costs from resuming in-person meetings and events. The increase in operating expenses was partially offset by a decrease in variable compensation due to lower firm profitability and decreased financial advisor compensation expense related to the non-qualified deferred compensation plan discussed above.

Overall, the increase in operating expenses, partially offset by the increase in net revenues, generated income before allocations to partners of $1,035, a 15% decrease from the first nine months of 2021. Income before allocations to partners margin was 11.3%, reflecting a strategic balance between investing in the future and current financial results.

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

RESULTS OF OPERATIONS FOR THE THREE- AND NINE-MONTH PERIODS ENDED SEPTEMBER 30, 2022 AND SEPTEMBER 24, 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.

Fee revenue, which consists of asset-based fees and account and activity fees, decreased 3% to $2,613 and increased 3% to $7,904 in the third quarter and first nine months of 2022, respectively, compared to the same periods in 2021. A discussion of fee revenue components follows.

Overall asset-based fee revenue decreased 4% to $2,438 in the third quarter of 2022 compared to the same period in 2021, which was due to decreases in revenue from advisory program fees and service fees partially offset by an increase in revenue from other asset-based fees. Advisory programs revenue decreased due to the decrease in the average value of advisory program assets resulting from lower average market levels, partially offset by the cumulative impact of client dollars invested. Service fees revenue decreased due to the decrease in the average value of mutual fund assets held outside of advisory programs resulting from lower average market levels. Other asset-based fee revenue increased primarily due to the increase in client assets invested in cash solutions and lower fee waivers to maintain a positive client yield on the Money Market Fund, reflecting rising interest rates.

Overall asset-based fee revenue increased 4% to $7,385 in the first nine months of 2022 compared to the same period in 2021, primarily due to increases in revenue from advisory programs fees and other asset-based fees, partially offset by a decrease in service fees revenue. Growth in revenue from advisory programs was due to the cumulative impact of client dollars invested in advisory programs, partially offset by lower average bond market levels. Other asset-based fee revenue increased primarily due to the increase in client assets invested in cash solutions and lower fee waivers to maintain a positive client yield on the Money Market Fund, reflecting rising interest rates. Service fees revenue decreased due to the decreases in the second and third quarters of 2022 resulting from lower average market levels in those periods.

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

Trade revenue, which consists of commissions and principal transactions, decreased 12% to $355 and 11% to $1,136 in the third quarter and first nine months of 2022, respectively, compared to the same periods in 2021. A discussion of trade revenue components follows.

The decrease in trade revenue in the third quarter and first nine months of 2022 compared to the same periods in 2021 was due to a decrease in mutual funds commissions revenue and the overall margin 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 decreased due to a change in product mix with a higher portion of client dollars invested in principal transaction products, primarily certificates of deposit, that earn lower margins than other products. The shift in product mix and increase in principal transactions revenue was due to a significant increase in client dollars invested in fixed income products during the higher interest rate environment in the third quarter and the first nine months of 2022 compared to the same periods in 2021.

Net interest and dividends revenue increased $101 to $119 and $143 to $192 in the third quarter and first nine months of 2022, respectively, compared to the same periods in 2021, primarily due to increases in short-term investment interest income and interest income earned on client margin loans. The average balances of short-term investments increased 8% and 9% and client margin loans increased 19% and 20% in the third quarter and first nine months of 2022, respectively, compared to the same periods in 2021. Additionally, short-term investment income increased due to a rise in interest rates in the third quarter and first nine months of 2022 compared to the same periods in 2021. The increases in interest and dividends revenue were partially offset by increases in customer credit interest expense in the third quarter and first nine months of 2022 compared to the same periods in 2021, reflecting rising interest rates.

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

Operating expenses slightly decreased to $2,731 and increased 3% to $8,062 in the third quarter and first nine months of 2022, respectively, compared to the same periods in 2021 primarily due to increases in home office and branch compensation and communications and data processing, partially offset by decreases in financial advisor and variable compensation. A discussion of operating expense components follows.

Financial advisor compensation and benefits expense decreased 5% to $1,186 and 2% to 3,594 in the third quarter and first nine months of 2022, respectively. The decrease in the third quarter of 2022 was primarily due to the decrease in revenues on which commissions are earned and decreased future liabilities as a result of corresponding unrealized losses related to the economic hedge for the non-qualified deferred compensation plan, partially offset by increases in travel incentive program costs. The decrease in financial advisor compensation in the first nine months of 2022 was primarily due to 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, which were partially offset by increases in travel incentive program costs.

Home office and branch compensation and benefits expense increased 25% to $553 and 17% to $1,485 in the third quarter and first nine months of 2022, respectively, due to an increase in the number of associates to support the Partnership's long-term growth objectives and higher wages and healthcare costs.

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 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. The decrease in variable compensation of 18% to $414 and 10% to $1,308 in the third quarter and first nine months of 2022, respectively, was due to a decrease in the Partnership's overall profitability.

Communications and data processing expenses increased 37% to $181 and 38% to $486 in the third quarter and first nine months of 2022, respectively, due to intentional investments in technology infrastructure, digital initiatives, virtual enablement tools and test and learn pilot programs.

Other operating expenses decreased 13% to $143 and increased 17% to $438 in the third quarter and first nine months of 2022, respectively. The decrease in the third quarter of 2022 was primarily due to a decrease in legal, as well as lower philanthropy costs resulting from a shift in the timing of spend, partially offset by increases in costs associated with resuming in-person meetings and events. The increase in the first nine months of 2022 was primarily due to increases in costs associated with resuming in-person meetings and events, advertising and other various items, partially offset by the decreases in the third quarter of 2022 described above.

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.

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

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

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

Net revenue decreased 3% to $2,955 in the third quarter of 2022 compared to the third quarter of 2021, due to decreases in fee revenue, other revenue and trade revenue. Fee revenue decreased due to lower average market levels in the third quarter of 2022 compared to the third quarter of 2021. The decrease in other revenue was due to a decline in market levels over the third 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 U.S. Treasury securities held, 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. The decrease in net revenue was partially offset by increases in cash solutions revenue and interest and dividends revenue, reflecting rising interest rates in the third quarter of 2022.

Net revenue slightly increased to $8,820 in the first nine months of 2022 compared to the same period in 2021 primarily due to increases in fee revenue and net interest and dividends revenue, partially offset by decreases in other revenue and trade revenue. Asset-based fee revenue increased 3% to $7,191 primarily due to increases in revenue in advisory program fees and cash solutions revenue. Advisory fee revenue increased due to the cumulative impact of net asset inflows in advisory programs, partially offset by lower average bond market levels. Cash solutions revenue and interest and dividends revenue also increased, reflecting rising interest rates in the first nine months of 2022. The decrease in other revenue was due to a decline in market levels over the first nine months of 2022, resulting in unrealized losses from the decrease in the value of the economic hedge for future liabilities and U.S. Treasury securities held, 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 4% to $2,246 and 6% to $6,537 in the third quarter and first nine months of 2022, respectively, compared to the same periods in 2021, primarily due to increases in home office and branch compensation and communications and data processing. Home office and branch compensation increased due to an increase in the number of associates to support the Partnership's long-term growth objectives and higher wages and healthcare costs. The increase in communications and data processing was due to intentional investments in technology infrastructure, digital initiatives, virtual enablement tools and test and learn pilot programs. The increases in operating expenses (excluding variable compensation) in both the third quarter and first nine months of 2022 were partially offset by a decrease in financial advisor compensation expense. Financial advisor compensation expense decreased in the third quarter of 2022 due to decreased revenues on which commissions are earned and decreased future liabilities in relation to the non-qualified deferred compensation plan referenced above. The decrease in financial advisor compensation expense in the first nine months of 2022 was primarily due to decreased future liabilities in relation to the non-qualified deferred compensation plan referenced above.

Net income before allocations to partners decreased 22% to $304 and 17% to $1,008 in the third quarter and first nine months of 2022, respectively, compared to the same periods in 2021.

Net revenue increased 8% to $95 in the third quarter of 2022 compared to the same period in 2021, primarily due to an increase in interest and dividends revenue reflecting rising interest rates.

Net revenue increased 14% to $277 in the first nine months of 2022 compared to the same period in 2021, due to increases in revenue from asset-based fees, other revenue and interest and dividends revenue. Asset-based fee revenue increased 11% to $194, from an increase in revenue from advisory programs fees primarily due to the cumulative impact of client assets invested in advisory programs. Other revenue and interest and dividends revenue increased due to favorable exchange rates and rising interest rates, respectively.

Operating expenses (excluding variable compensation) increased 8% to $71 and 9% to $217 in the third quarter and first nine months of 2022, respectively, compared to the same periods in 2021, primarily due to increases in other operating expenses in the third quarter and first nine months of 2022 and an increase in financial advisor compensation in the first nine months of 2022. Other operating expenses increased primarily due to increases in management fees, taxes and advertising. Financial advisor compensation increased largely due to an increase in revenues on which commissions are earned.

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

Net income before allocations to partners increased $3 to $15 and $15 to $27 in the third quarter and first nine months of 2022, respectively, compared to the same periods in 2021.

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.

The Partnership estimates approximately 25% and 26% of its total revenue was derived from sales and services related to mutual fund and insurance products for the three- and nine-month periods ended September 30, 2022 and approximately 29% for both the three- and nine-month periods ended September 24, 2021. In addition, the Partnership derived 11% and 12% of its total revenue for the three- and nine-month periods ended September 30, 2022, respectively, and 13% and 12% of its total revenue for the three- and nine-month periods ended September 24, 2021, 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 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.

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.

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 nine months 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 2021 Plan. The Partnership's initial offering under the 2021 Plan is expected to close in January 2023. Proceeds from the offering under the 2021 Plan are expected to be used to meet growth needs or for other purposes. The issuance of Interests reduces the Partnership’s net interest income and income before allocations to partners.

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

The Partnership’s capital subject to mandatory redemption as of September 30, 2022, net of reserve for anticipated withdrawals, was $3,510, an increase of $275 from December 31, 2021. This increase was primarily due to the retention of a portion of general partner earnings ($108) and additional capital contributions related to limited partner, subordinated limited partner and general partner interests ($4, $58 and $277, respectively), partially offset by the net increase in Partnership loans outstanding ($33) and the redemption of limited partner, subordinated limited partner and general partner interests ($13, $20 and $106, respectively). During the three- and nine-month periods ended September 30, 2022 and September 24, 2021, the Partnership retained 13.8% of income allocated to general partners.

Under the terms of the Partnership’s Twenty-First Amended and Restated Agreement of Registered Limited Liability Limited Partnership, 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 death, 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 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 capital is received by the Managing Partner. The 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 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 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.

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 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.

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

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.

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.

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

In accordance with the terms of the Partnership's $500 committed revolving line of credit (the "2018 Credit Facility") entered into in September 2018, which was replaced by a new line of credit in October 2022 (discussed below). Under the 2018 Credit Facility, the Partnership was 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 was 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 had the ability to draw on various types of loans. The associated interest rate depended on the type of loan, duration of the loan, whether the loan is secured or unsecured and the amount of leverage. Contractual rates were based on an index rate plus the applicable spread. As of September 30, 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 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.

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

There were no amounts outstanding on the 2018 Credit Facility or the uncommitted lines of credit as of September 30, 2022 or December 31, 2021. In addition, the Partnership did not have any draws against these lines of credit during the nine-month period ended September 30, 2022, except for periodically testing draw procedures.

In October 2022, the Partnership entered into a new $500 committed revolving line of credit (the "2022 Credit Facility"), which replaced the 2018 Credit Facility and has an October 2027 expiration date. In accordance with the terms of the 2022 Credit Facility, 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 $2,809. In addition, Edward Jones is required to maintain a minimum tangible net worth of at least $1,594, which may be reduced up to 10% if Edward Jones makes a one-time distribution to JFC within 90 days from the effective date of the agreement, and a 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 and the amount of leverage. Contractual rates are based on an index rate plus the applicable spread. The 2022 Credit Facility is intended to provide short-term liquidity to the Partnership should the need arise.

As of September 30, 2022, the Partnership had $1,850 in cash and cash equivalents and $767 in securities purchased under agreements to resell, which generally have maturities of less than one week. This totaled to $2,617 of Partnership liquidity as of September 30, 2022, a 22% decrease from $3,364 as of December 31, 2021. The Partnership had $18,685 and $20,179 in cash and investments segregated under federal regulations as of September 30, 2022 and December 31, 2021, respectively, which was not available for general use. The Partnership also held $807 and $413 in government and agency obligations as of September 30, 2022 and December 31, 2021, respectively, primarily to help facilitate cash management and maintain firm liquidity. Changes in cash were due to the daily client cash activity in relation to the weekly segregation requirement.

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 the Financial Industry Regulatory Authority ("FINRA"). Under the alternative method permitted by the rules, Edward Jones must maintain minimum net capital 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 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.

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

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

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

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

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 recovered through increased prices of services offered by the Partnership.

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 U.S. 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, actions of the U.S. Federal Reserve and/or central banks outside of the United 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; (5) changes in legislation or regulation; (6) actions of competitors; (7) litigation; (8) the ability of clients, other broker-dealers, banks, depositories and clearing organizations to fulfill contractual obligations; (9) changes in technology and other technology-related risks; (10) a fluctuation or decline in the fair value of securities; (11) our ability to attract and retain qualified financial advisors and other employees; and (12) the risks discussed under Part I, Item 1A – Risk Factors in the Partnership’s Annual Report, as supplemented by Part II, Item 1A – Risk Factors in this Quarterly Report on Form 10-Q. 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.

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 investments, which are primarily comprised of cash and cash equivalents, investments segregated under federal regulations, and securities purchased under agreements to resell, which averaged $3.7 billion and $23.1 billion for the nine-month period ended September 30, 2022. These margin receivables and investments earned interest at an average annual rate of approximately 442 and 76 basis points (4.42% and 0.76%), respectively, during the first nine months of 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 in short-term interest rates could increase its annual net interest income by approximately $128 million. This estimate reflects minimum contractual rates on certain balances. Conversely, the Partnership estimates that a 100-basis point (1.00%) decrease in short-term interest rates could decrease the Partnership’s annual net interest income by approximately $159 million.

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 September 30, 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.

The information in Part I, Item 1, Note 8 supplements the discussion in Item 3 – Legal Proceedings in the Partnership's Annual Report.

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. The following risk factor supplements the risk factors in Part I, Item 1A – Risk Factors – Risk Related to the Partnership's Business of the Partnership's Annual Report.

INTENT TO PURSUE CASH AND LENDING SOLUTIONS — The Partnership is subject to the risk that potential new strategies, products, structures and relationships to make cash and lending solutions available to the Partnership's clients may not be successful; and if successful, the Partnership could be subject to additional risks related to capital and other costs, additional regulatory oversight, potential legislative changes and uncertainty of the resulting benefits for the Partnership, its partners, or its clients.

On October 6, 2022, the Partnership withdrew the applications it submitted on July 1, 2020 to the FDIC and Utah Department of Financial Institutions (UDFI) in connection with a proposed Utah-chartered industrial bank (Edward Jones Bank), as disclosed in the Partnership's Current Report on Form 8-K filed with the SEC on October 7, 2022. The Partnership is actively pursuing additional strategies, products, structures and relationships (collectively, "initiatives") to meet clients' saving, spending and borrowing needs and help clients achieve financially what is most important to them, including beginning to offer securities-based loans to clients in certain U.S. states, and applying for applicable state lending licenses, where required. The Partnership cannot reliably predict the timing or outcome of the initiatives and related state licenses, and whether and to what extent the initiatives would yield benefits for the Partnership, its partners, and its clients. The Partnership's exploration of these initiatives may result in the Partnership incurring substantial costs and committing a significant amount of capital to support their development and initial operations. Factors that could affect the profitability and success of the Partnership's initiatives include, but are not limited to, unanticipated additional costs, the need for additional capital support, operational challenges, uncertain client demand, legislative changes and regulatory changes and oversight, any or all of which may adversely impact the Partnership's results of operations, financial condition and liquidity.

The Partnership issued subordinated limited partnership interests (the “SLP Interests”), which are described in the Partnership Agreement, during the third quarter ended September 30, 2022. The Partnership issued the SLP Interests pursuant to Section 4(a)(2) under the Securities Act of 1933, as amended, in privately negotiated transactions and not pursuant to a public offering or solicitation. The SLP Interests were issued to retiring general partners of the Partnership in July 2022 for an aggregate price of $6.0 million.

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.

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:

Document and Entity Information - shares	9 Months Ended
Sep. 30, 2022	Oct. 28, 2022
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2022
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q3
Entity Registrant Name	JONES FINANCIAL COMPANIES LLLP
Entity Central Index Key	0000815917
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Shell Company	false
Entity Filer Category	Non-accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Limited Partnership Interests Outstanding		1,215,111
Entity File Number	0-16633
Entity Tax Identification Number	43-1450818
Entity Address, Address Line One	12555 Manchester Road
Entity Address, City or Town	Des Peres
Entity Address, State or Province	MO
Entity Address, Postal Zip Code	63131
City Area Code	314
Local Phone Number	515-2000
Entity Incorporation, State or Country Code	MO
Document Quarterly Report	true
Document Transition Report	false
Entity Interactive Data Current	Yes

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


	September 30, 2022
	Level I		Level II		Level III		Total
Assets:
Cash equivalents:
Certificates of deposit	$	—	$	246	$	—	$	246
Money market funds		41		—		—		41
Total cash equivalents	$	41	$	246	$	—	$	287

Investments segregated under federal regulations:
U.S. treasuries	$	12,253	$	—	$	—	$	12,253
Certificates of deposit		—		400		—		400
Total investments segregated under federal regulations	$	12,253	$	400	$	—	$	12,653

Securities owned:
Investment securities:
Government and agency obligations	$	807	$	—	$	—	$	807
Mutual funds(1)		289		—		—		289
Equities		7		—		—		7
Total investment securities	$	1,103	$	—	$	—	$	1,103

Inventory securities:
Equities	$	24	$	—	$	—	$	24
Municipal obligations		—		22		—		22
Corporate bonds and notes		—		20		—		20
Certificates of deposit		—		17		—		17
Mutual funds		8		—		—		8
Total inventory securities	$	32	$	59	$	—	$	91

Other assets:
Client fractional share ownership assets	$	593	$	—	$	—	$	593

Liabilities:
Accounts payable, accrued expenses and other:
Client fractional share redemption obligations	$	593	$	—	$	—	$	593


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

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

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

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

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

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


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


(Dollars in millions)	September 30, 2022		December 31, 2021
ASSETS:
Cash and cash equivalents	$	1,850	$	1,835
Cash and investments segregated under federal regulations		18,685		20,179
Securities purchased under agreements to resell		767		1,529
Receivables from:
Clients		4,641		4,187
Mutual funds, insurance companies and other		857		850
Brokers, dealers and clearing organizations		374		213
Securities owned, at fair value:
Investment securities		1,103		852
Inventory securities		91		38
Lease right-of-use assets		925		922
Fixed assets, at cost, net of accumulated depreciation and amortization		832		725
Other assets		798		878

TOTAL ASSETS	$	30,923	$	32,208

LIABILITIES:
Payables to:
Clients	$	23,111	$	23,763
Brokers, dealers and clearing organizations		135		112
Accrued compensation and employee benefits		2,074		2,401
Accounts payable, accrued expenses and other		901		1,223
Lease liabilities		955		954
		27,176		28,453
Contingencies (Note 8)

Partnership capital subject to mandatory redemption, net of reserve for anticipated withdrawals and partnership loans:
Limited partners		1,216		1,225
Subordinated limited partners		619		581
General partners		1,675		1,429
Total		3,510		3,235
Reserve for anticipated withdrawals		237		520
Total partnership capital subject to mandatory redemption		3,747		3,755

TOTAL LIABILITIES	$	30,923	$	32,208


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

TOTAL PARTNERSHIP CAPITAL SUBJECT TO MANDATORY REDEMPTION, DECEMBER 31, 2021	$	1,361		$	640		$	1,754		$	3,755
Reserve for anticipated withdrawals		(136	)		(59	)		(325	)		(520	)
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		—			—			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		4			52			264			320
Redemption of partnership interests		(5	)		(17	)		(38	)		(60	)
Income allocated to partners		43			43			275			361
Distributions		(1	)		—			(12	)		(13	)
Total partnership capital, including capital financed with partnership loans, March 25, 2022		1,266			659			2,239			4,164
Issuance of partnership interests		—			—			8			8
Redemption of partnership interests		(3	)		(1	)		(15	)		(19	)
Income allocated to partners		42			41			272			355
Distributions		(9	)		(71	)		(347	)		(427	)
Total partnership capital, including capital financed with partnership loans, June 24, 2022		1,296			628			2,157			4,081
Issuance of partnership interests		—			6			5			11
Redemption of partnership interests		(5	)		(2	)		(53	)		(60	)
Income allocated to partners		37			38			244			319
Distributions		(1	)		(41	)		(208	)		(250	)
Total partnership capital, including capital financed with partnership loans, September 30, 2022		1,327			629			2,145			4,101
Partnership loans outstanding, September 30, 2022		—			—			(354	)		(354	)
TOTAL PARTNERSHIP CAPITAL SUBJECT TO MANDATORY REDEMPTION, SEPTEMBER 30, 2022	$	1,327		$	629		$	1,791		$	3,747
Reserve for anticipated withdrawals		(111	)		(10	)		(116	)		(237	)
Partnership capital subject to mandatory redemption, net of reserve for anticipated withdrawals, September 30, 2022	$	1,216		$	619		$	1,675		$	3,510


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


	Nine Months Ended
(Dollars in millions)	September 30, 2022			September 24, 2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	—		$	—
Adjustments to reconcile net income to net cash provided by operating activities:
Income before allocations to partners		1,035			1,223
Depreciation and amortization		361			334

Changes in assets and liabilities:
Investments segregated under federal regulations		1,655			298
Securities purchased under agreements to resell		762			214
Net payable to clients		(1,106	)		(537	)
Net receivable from brokers, dealers and clearing organizations		(138	)		(49	)
Receivable from mutual funds, insurance companies and other		(7	)		1
Securities owned		(304	)		576
Other assets		80			(92	)
Lease liabilities		(243	)		(239	)
Accrued compensation and employee benefits		(327	)		155
Accounts payable, accrued expenses and other		(321	)		42
Net cash provided by operating activities		1,447			1,926

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of fixed assets		(228	)		(130	)
Cash used in investing activities		(228	)		(130	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of partnership loans		70			44
Issuance of partnership interests		63			66
Redemption of partnership interests		(139	)		(118	)
Distributions from partnership capital		(1,037	)		(1,111	)
Net cash used in financing activities		(1,043	)		(1,119	)
Net increase in cash, cash equivalents and restricted cash		176			677

CASH, CASH EQUIVALENTS AND RESTRICTED CASH:
Beginning of period		7,706			6,875
End of period	$	7,882		$	7,552


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


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


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


		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 - September 30, 2022	5
	Consolidated Statements of Changes in Partnership Capital - September 24, 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	19

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	34

Item 4.	Controls and Procedures	34

PART II.	OTHER INFORMATION

Item 1.	Legal Proceedings	35

Item 1A.	Risk Factors	35

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

Item 6.	Exhibits	36

	Signatures	38


	Three Months Ended					Nine Months Ended
(Dollars in millions, except per unit information and units outstanding)	September 30, 2022			September 24, 2021		September 30, 2022			September 24, 2021
Revenue:
Fee revenue
Asset-based	$	2,438		$	2,535	$	7,385		$	7,129
Account and activity		175			172		519			513
Total fee revenue		2,613			2,707		7,904			7,642
Trade revenue		355			402		1,136			1,281
Interest and dividends		159			42		279			120
Other (loss) revenue, net		(37	)		13		(135	)		55
Total revenue		3,090			3,164		9,184			9,098
Interest expense		40			24		87			71
Net revenue		3,050			3,140		9,097			9,027
Operating expenses:
Compensation and benefits		2,153			2,202		6,387			6,389
Communications and data processing		181			132		486			351
Occupancy and equipment		146			138		433			407
Fund sub-adviser fees		63			64		189			179
Professional and consulting fees		45			40		129			105
Other operating expenses		143			164		438			373
Total operating expenses		2,731			2,740		8,062			7,804

Income before allocations to partners		319			400		1,035			1,223

Allocations to partners:
Limited partners		37			52		122			159
Subordinated limited partners		38			47		122			145
General partners		244			301		791			919
Net Income	$	—		$	—	$	—		$	—

Income allocated to limited partners per weighted average $1,000 equivalent limited partnership unit outstanding	$	30.76		$	42.13	$	99.98		$	128.87

Weighted average $1,000 equivalent limited partnership units outstanding		1,217,423			1,229,280		1,222,023			1,232,521


	September 30, 2022
2022	$	81
2023		296
2024		233
2025		172
2026		114
Thereafter		112
Total lease payments		1,008
Less: Interest		53
Total present value of lease liabilities	$	955


	September 30, 2022		December 31, 2021
2018 Credit Facility	$	500	$	500
Uncommitted secured credit facilities		390		390
Total bank lines of credit	$	890	$	890


	September 30, 2022			December 31, 2021
U.S.:
Net capital	$	1,400		$	1,421
Net capital in excess of the minimum required	$	1,321		$	1,352
Net capital as a percentage of aggregate debit items		35.4	%		41.3	%
Net capital after anticipated capital withdrawals, as a percentage of aggregate debit items		19.2	%		20.7	%

Canada:
Regulatory risk-adjusted capital	$	92		$	71
Regulatory risk-adjusted capital in excess of the minimum required to be held by IIROC	$	91		$	50


	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
September 30, 2022	$	767		—		767		—		(767	)	$	—
December 31, 2021	$	1,529	—			1,529	—			(1,526	)	$	3


	Three Months Ended									Nine Months Ended
	Sept. 30, 2022			Sept. 24, 2021			% Change			Sept. 30, 2022			Sept. 24, 2021			% Change
Revenue:
Fee revenue	$	2,613		$	2,707			-3	%	$	7,904		$	7,642			3	%
% of net revenue		86	%		86	%		—			87	%		85	%		2	%
Trade revenue		355			402			-12	%		1,136			1,281			-11	%
% of net revenue		12	%		13	%		-8	%		12	%		14	%		-14	%
Interest and dividends		159			42			279	%		279			120			133	%
Other (loss) revenue, net		(37	)		13			-385	%		(135	)		55			-345	%
Total revenue		3,090			3,164			-2	%		9,184			9,098			1	%
Interest expense		40			24			67	%		87			71			23	%
Net revenue		3,050			3,140			-3	%		9,097			9,027			1	%
Operating expenses		2,731			2,740			—			8,062			7,804			3	%
Income before allocations to partners	$	319		$	400			-20	%	$	1,035		$	1,223			-15	%

Related metrics:
Income before allocations to partners margin(1)		10.3	%		12.6	%		-18	%		11.3	%		13.4	%		-16	%
Client assets under care ($ billions):
Total:
At period end	$	1,510		$	1,757			-14	%	$	1,510		$	1,757			-14	%
Average	$	1,598		$	1,743			-8	%	$	1,674		$	1,662			1	%
Advisory programs:
At period end	$	577		$	673			-14	%	$	577		$	673			-14	%
Average	$	616		$	662			-7	%	$	646		$	621			4	%
Client dollars invested ($ billions)(2):
Trade	$	49		$	24			104	%	$	109		$	79			38	%
Advisory programs	$	7		$	19			-63	%	$	32		$	57			-44	%
Client households at period end		6.1			5.9			3	%		6.1			5.9			3	%
Net new households for the period (actual)(3)		56,830			64,095			-11	%		159,784			209,523			-24	%
Net new assets for the period ($ billions)(4):	$	27		$	22			23	%	$	66		$	65			2	%
Financial advisors (actual):
At period end		18,750			18,829			—			18,750			18,829			—
Average		18,758			18,849			—			18,771			18,960			-1	%
Attrition %(5)		6.4	%		6.0	%		7	%		6.0	%		7.0	%		-14	%
Dow Jones Industrial Average (actual):
At period end		28,726			34,798			-17	%		28,726			34,798			-17	%
Average for period		31,728			34,917			-9	%		33,051			33,525			-1	%
S&P 500 Index (actual):
At period end		3,586			4,455			-20	%		3,586			4,455			-20	%
Average for period		3,971			4,417			-10	%		4,184			4,155			1	%
Bloomberg Aggregate Bond Index (actual):
At period end		96			115			-17	%		96			115			-17	%
Average for period		101			116			-13	%		105			115			-9	%


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).


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

By:		/s/ Penny Pennington
		Penny Pennington
		Managing Partner (Principal Executive Officer)
		November 14, 2022


Signatures	Title	Date

/s/ Penny Pennington	Managing Partner (Principal Executive Officer)	November 14, 2022
Penny Pennington	Managing Partner (Principal Executive Officer)	November 14, 2022

/s/ Andrew T. Miedler	Chief Financial Officer (Principal Financial and Accounting Officer)	November 14, 2022
Andrew T. Miedler		November 14, 2022


ARTICLE I Definitions
Section 1.01	Defined Terms 1
Section 1.02	Classification of Loans and Borrowings 34
Section 1.03	Terms Generally 34
Section 1.04	Accounting Terms; GAAP 34
Section 1.05	Pro Forma Calculations 35
Section 1.06	Statement or Certificate by any Officer 35
Section 1.07	Interest Rates; Benchmark Notification 35
Section 1.08	Divisions 36
ARTICLE II The Credits
Section 2.01	Commitments 36
Section 2.02	Loans and Borrowings 36
Section 2.03	Requests for Revolving Borrowings 37
Section 2.04	[Reserved] 38
Section 2.05	Swingline Loans 38
Section 2.06	Uncommitted Swingline Loans 40
Section 2.07	Funding of Loans 41
Section 2.08	Interest Elections 42
Section 2.09	Termination and Reduction of Commitments 44
Section 2.10	Repayment of Loans; Evidence of Debt 44
Section 2.11	Voluntary Prepayment of Loans 45
Section 2.12	[Reserved] 46
Section 2.13	Fees 46
Section 2.14	Interest 47
Section 2.15	Alternate Rate of Interest 48
Section 2.16	Increased Costs 50
Section 2.17	Break Funding Payments 51
Section 2.18	Taxes 52
Section 2.19	Payments Generally; Pro Rata Treatment; Sharing of Set-offs 55
Section 2.20	Mitigation Obligations; Replacement of Lenders 57
Section 2.21	Defaulting Lenders 58
Section 2.22	Incremental Commitments 59
Section 2.23	Sustainability Targets 61


	As of September 30, 2022
	Limited Partnership Interests			Subordinated Limited Partnership Interests		General Partnership Interests			Total Partnership Interests
Total Partnership capital(1)	$	1,216		$	619	$	2,029		$	3,864
Partnership capital owned by partners with individual loans	$	83		$	—	$	937		$	1,020
Partnership capital owned by partners with individual loans as a percent of total Partnership capital		7	%		—		46	%		26	%

Individual loans:
Individual bank loans	$	15		$	—	$	—		$	15
Individual Partnership loans		—			—		354			354
Total individual loans	$	15		$	—	$	354		$	369
Individual loans as a percent of total Partnership capital		1	%		—		17	%		10	%
Individual loans as a percent of respective Partnership capital owned by partners with loans		18	%		—		38	%		36	%


Exhibit Number		Description
3.1	*	Twenty-first Amended and Restated Agreement of Registered Limited Liability Limited Partnership, dated September 1, 2021, incorporated by reference from Exhibit 3.1 to The Jones Financial Companies, L.L.L.P. Form 8-K dated September 7, 2021.
3.2	*	Twenty-Second Amended and Restated Certificate of Limited Partnership of the Jones Financial Companies, L.L.L.P., dated February 22, 2022, incorporated by reference from Exhibit 3.2 to The Jones Financial Companies, L.L.L.P. Form 10-Q for the quarterly period ended March 25, 2022.
3.3	*	First Amendment of 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, 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 25, 2022.
3.5	*	Third Amendment of Twenty-Second Restated Certificate of Limited Partnership of The Jones Financial Companies, L.L.L.P., dated May 24, 2022, incorporated by reference from Exhibit 3.5 to The Jones Financial Companies, L.L.L.P. Form 10-Q for the quarterly period ended June 24, 2022.
3.6	*	Fourth Amendment of Twenty-Second Restated Certificate of Limited Partnership of The Jones Financial Companies, L.L.L.P., dated June 23, 2022, incorporated by reference from Exhibit 3.6 to The Jones Financial Companies, L.L.L.P. Form 10-Q for the quarterly period ended June 24, 2022.
3.7	*	Fifth Amendment of Twenty-Second Restated Certificate of Limited Partnership of The Jones Financial Companies, L.L.L.P., dated July 21, 2022, 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 24, 2022.
3.8	**	Sixth Amendment of Twenty-Second Restated Certificate of Limited Partnership of The Jones Financial Companies, L.L.L.P., dated September 15, 2022.
3.9	**	Seventh Amendment of Twenty-Second Restated Certificate of Limited Partnership of The Jones Financial Companies, L.L.L.P., dated October 16, 2022.
10.1	**	$500,000,000 Credit Agreement dated as of October 18, 2022, among The Jones Financial Companies, L.L.L.P. and Edward D. Jones & Co., L.P. as borrowers and lenders Fifth Third Bank and Wells Fargo Bank, National Association.
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


Withdrawn General Partners:
Partner Name	Date Withdrawn as General Partner	Address 1 & 2	City, State & Zip
Bradshaw, Randolph Lee	9/1/2022	12555 Manchester Road	St. Louis, MO 63131









Admitted General Partners:
Partner Name	Date Admitted as General Partner	Address 1 & 2	City, State & Zip


ARTICLE III Representations and Warranties
Section 3.01	Representations and Warranties of the Borrowers 62
ARTICLE IV Conditions
Section 4.01	Effective Date 66
Section 4.02	Each Credit Event 68
Section 4.03	Conditions to Initial Borrowings by the Designated Borrower 69
ARTICLE V Covenants of the Borrowers
Section 5.01	Affirmative Covenants (Borrowers) 70
Section 5.02	[Reserved] 76
Section 5.03	Negative Covenants (Borrowers) 76
Section 5.04	Financial Covenants 87
ARTICLE VI Events of Default
Section 6.01	Events of Default 87
ARTICLE VII Guarantee
Section 7.01	Guarantee 90
Section 7.02	No Subrogation 91
Section 7.03	Amendments, etc. with respect to the Obligations of the Designated Borrower 91
Section 7.04	Guarantee Absolute and Unconditional 92
Section 7.05	Reinstatement 92
Section 7.06	Payments 93
Section 7.07	Independent Obligations 93


ARTICLE VIII The Administrative Agent and Co-Syndication Agents
Section 8.01	Authorization and Action 93
Section 8.02	Administrative Agent’s Reliance, Indemnification, Etc. 96
Section 8.03	Posting of Communications 97
Section 8.04	The Administrative Agent Individually 98
Section 8.05	Successor Administrative Agent 98
Section 8.06	Acknowledgements of Lenders 99
Section 8.07	Certain ERISA Matters 101
ARTICLE IX Miscellaneous
Section 9.01	Notices 103
Section 9.02	Waivers; Amendments 104
Section 9.03	Expenses; Indemnity; Damage Waiver 105
Section 9.04	Successors and Assigns 107
Section 9.05	Survival 111
Section 9.06	Counterparts; Integration; Effectiveness 111
Section 9.07	Severability 113
Section 9.08	Right of Set off 113
Section 9.09	Governing Law; Jurisdiction; Consent to Service of Process 113
Section 9.10	WAIVER OF JURY TRIAL 114
Section 9.11	Headings 114
Section 9.12	Confidentiality 114
Section 9.13	Interest Rate Limitation 116
Section 9.14	USA PATRIOT ACT 116
Section 9.15	No Fiduciary Duty 116
Section 9.16	Acknowledgement and Consent to Bail-In of Affected Financial Institutions 117
Section 9.17	Acknowledgement Regarding Any Supported QFCs 117


Applicable Rate for EDJ
Pricing Level	Long-Term Issuer Ratings of JFC (which may be a private rating) (Moody’s / S&P / Fitch)	Term Benchmark Loans, Federal Funds Rate Loans	Facility Fee
I	≥ A2 / A / A	0.67%	0.08%
II	A3 / A- / A-	0.785%	0.09%
III	Baa1 / BBB+ / BBB+	0.90%	0.10%
IV	Baa2 / BBB / BBB	1.00%	0.125%
V	≤ Baa3 / BBB- / BBB-	1.10%	0.15%


Applicable Rate for JFC and (if applicable) the Designated Borrower
Pricing Level	Leverage Ratio of JFC	Long-Term Issuer Ratings of JFC (which may be a private rating) (Moody’s / S&P / Fitch)	Term Benchmark Loans	ABR Loans	Facility Fee
I	N/A	≥ A2 / A / A	0.785%	0.00%	0.09%
II	N/A	A3 / A- / A-	0.90%	0.00%	0.10%
III	≤ 10%	Baa1 / BBB+ / BBB+	1.00%	0.00%	0.125%
IV	> 10%, but ≤ 20%	Baa2 / BBB / BBB	1.10%	0.10%	0.15%
V	> 20%, but ≤ 30%	≤ Baa3 / BBB- / BBB-	1.30%	0.30%	0.20%
VI	> 30%	N/A	1.50%	0.50%	0.25%

Consolidated Statements of Financial Condition (Unaudited) - USD ($) $ in Millions	Sep. 30, 2022	Dec. 31, 2021
ASSETS:
Cash and cash equivalents	$ 1,850	$ 1,835
Cash and investments segregated under federal regulations	18,685	20,179
Securities purchased under agreements to resell	767	1,529
Receivables from:
Clients	4,641	4,187
Mutual funds, insurance companies and other	857	850
Brokers, dealers and clearing organizations	374	213
Securities owned, at fair value:
Investment securities	1,103	852
Inventory securities	91	38
Lease right-of-use assets	925	922
Fixed assets, at cost, net of accumulated depreciation and amortization	832	725
Other assets	798	878
TOTAL ASSETS	30,923	32,208
Payables to:
Clients	23,111	23,763
Brokers, dealers and clearing organizations	135	112
Accrued compensation and employee benefits	2,074	2,401
Accounts payable, accrued expenses and other	901	1,223
Lease liabilities	955	954
Total liabilities before partnership capital	27,176	28,453
Contingencies (Note 8)
Partnership capital subject to mandatory redemption, net of reserve for anticipated withdrawals and partnership loans	3,510	3,235
Reserve for anticipated withdrawals	(237)	(520)
Total partnership capital subject to mandatory redemption	3,747	3,755
TOTAL LIABILITIES	30,923	32,208
Limited Partnership Capital [Member]
Payables to:
Partnership capital subject to mandatory redemption, net of reserve for anticipated withdrawals and partnership loans	1,216	1,225
Subordinated Limited Partnership Capital [Member]
Payables to:
Partnership capital subject to mandatory redemption, net of reserve for anticipated withdrawals and partnership loans	619	581
General Partnership Capital [Member]
Payables to:
Partnership capital subject to mandatory redemption, net of reserve for anticipated withdrawals and partnership loans	$ 1,675	$ 1,429

Consolidated Statements of Income (Unaudited) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 24, 2021	Sep. 30, 2022	Sep. 24, 2021
Revenue:
Revenue	$ 2,968	$ 3,109	$ 9,040	$ 8,923
Interest and dividends	159	42	279	120
Other (loss) revenue, net	(37)	13	(135)	55
Total revenue	3,090	3,164	9,184	9,098
Interest expense	40	24	87	71
Net revenue	3,050	3,140	9,097	9,027
Operating expenses:
Compensation and benefits	2,153	2,202	6,387	6,389
Occupancy and equipment	146	138	433	407
Communications and data processing	181	132	486	351
Fund sub-adviser fees	63	64	189	179
Professional and consulting fees	45	40	129	105
Other operating expenses	143	164	438	373
Total operating expenses	2,731	2,740	8,062	7,804
Income before allocations to partners	319	400	1,035	1,223
Allocations to partners:
Limited partners	37	52	122	159
Subordinated limited partners	38	47	122	145
General partners	244	301	791	919
Net Income (Loss) Attributable to Parent, Total	$ 0	$ 0	$ 0	$ 0
Income allocated to limited partners per weighted average $1,000 equivalent limited partnership unit outstanding	$ 30.76	$ 42.13	$ 99.98	$ 128.87
Weighted average $1,000 equivalent limited partnership units outstanding	1,217,423	1,229,280	1,222,023	1,232,521
Total Fee Revenue [Member]
Revenue:
Revenue	$ 2,613	$ 2,707	$ 7,904	$ 7,642
Asset-based Fee Revenue [Member]
Revenue:
Revenue	2,438	2,535	7,385	7,129
Account and Activity Fee Revenue [Member]
Revenue:
Revenue	175	172	519	513
Trade Revenue [Member]
Revenue:
Revenue	$ 355	$ 402	$ 1,136	$ 1,281

Consolidated Statements of Changes in Partnership Capital Subject to Mandatory Redemption (Unaudited) - USD ($) $ in Millions	Total	Limited Partnership Capital [Member]	Subordinated Limited Partnership Capital [Member]	General Partnership Capital [Member]
TOTAL PARTNERSHIP CAPITAL SUBJECT TO MANDATORY REDEMPTION at Dec. 31, 2020	$ 3,589	$ 1,362	$ 594	$ 1,633
Reserve for anticipated withdrawals at Dec. 31, 2020	(514)	(125)	(56)	(333)
Partnership capital subject to mandatory redemption, net of reserve for anticipated withdrawals at Dec. 31, 2020	3,075	1,237	538	1,300
Partnership loans outstanding at beginning of year at Dec. 31, 2020	341	0	1	340
Total partnership capital, including capital financed with partnership loans, net of reserve for anticipated withdrawals at Dec. 31, 2020	3,416	1,237	539	1,640
Issuance of partnership interests	274	3	60	211
Redemption of partnership interests	(71)	(5)	(16)	(50)
Income allocated to partners	380	49	46	285
Distributions	(3)	0	0	(3)
Total partnership capital, including capital financed with partnership loans at Mar. 26, 2021	3,996	1,284	629	2,083
Issuance of partnership interests	11	2	0	9
Redemption of partnership interests	(13)	(5)	0	(8)
Income allocated to partners	443	58	52	333
Distributions	(489)	(10)	(82)	(397)
Total partnership capital, including capital financed with partnership loans at Jun. 25, 2021	3,948	1,329	599	2,020
Issuance of partnership interests	3	0	1	2
Redemption of partnership interests	(34)	(4)	(3)	(27)
Income allocated to partners	400	52	47	301
Distributions	(288)	(1)	(47)	(240)
Total partnership capital, including capital financed with partnership loans at Sep. 24, 2021	4,029	1,376	597	2,056
Partnership loans outstanding at end of period at Sep. 24, 2021	(336)	0	0	(336)
TOTAL PARTNERSHIP CAPITAL SUBJECT TO MANDATORY REDEMPTION at Sep. 24, 2021	3,693	1,376	597	1,720
Reserve for anticipated withdrawals at Sep. 24, 2021	(317)	(148)	(16)	(153)
Partnership capital subject to mandatory redemption, net of reserve for anticipated withdrawals at Sep. 24, 2021	3,376	1,228	581	1,567
TOTAL PARTNERSHIP CAPITAL SUBJECT TO MANDATORY REDEMPTION at Dec. 31, 2021	3,755	1,361	640	1,754
Reserve for anticipated withdrawals at Dec. 31, 2021	(520)	(136)	(59)	(325)
Partnership capital subject to mandatory redemption, net of reserve for anticipated withdrawals at Dec. 31, 2021	3,235	1,225	581	1,429
Partnership loans outstanding at beginning of year at Dec. 31, 2021	321	0	0	321
Total partnership capital, including capital financed with partnership loans, net of reserve for anticipated withdrawals at Dec. 31, 2021	3,556	1,225	581	1,750
Issuance of partnership interests	320	4	52	264
Redemption of partnership interests	(60)	(5)	(17)	(38)
Income allocated to partners	361	43	43	275
Distributions	(13)	(1)	0	(12)
Total partnership capital, including capital financed with partnership loans at Mar. 25, 2022	4,164	1,266	659	2,239
Issuance of partnership interests	8	0	0	8
Redemption of partnership interests	(19)	(3)	(1)	(15)
Income allocated to partners	355	42	41	272
Distributions	(427)	(9)	(71)	(347)
Total partnership capital, including capital financed with partnership loans at Jun. 24, 2022	4,081	1,296	628	2,157
Issuance of partnership interests	11	0	6	5
Redemption of partnership interests	(60)	(5)	(2)	(53)
Income allocated to partners	319	37	38	244
Distributions	(250)	(1)	(41)	(208)
Total partnership capital, including capital financed with partnership loans at Sep. 30, 2022	4,101	1,327	629	2,145
Partnership loans outstanding at end of period at Sep. 30, 2022	(354)	0	0	(354)
TOTAL PARTNERSHIP CAPITAL SUBJECT TO MANDATORY REDEMPTION at Sep. 30, 2022	3,747	1,327	629	1,791
Reserve for anticipated withdrawals at Sep. 30, 2022	(237)	(111)	(10)	(116)
Partnership capital subject to mandatory redemption, net of reserve for anticipated withdrawals at Sep. 30, 2022	$ 3,510	$ 1,216	$ 619	$ 1,675

Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2022	Sep. 24, 2021
Adjustments to reconcile net income to net cash provided by operating activities:
Income before allocations to partners	$ 1,035	$ 1,223
Depreciation and amortization	361	334
Changes in assets and liabilities:
Investments segregated under federal regulations	1,655	298
Securities purchased under agreements to resell	762	214
Net payable to clients	(1,106)	(537)
Net receivable from brokers, dealers and clearing organizations	(138)	(49)
Receivable from mutual funds, insurance companies and other	(7)	1
Securities owned	(304)	576
Other assets	80	(92)
Lease liabilities	(243)	(239)
Accrued compensation and employee benefits	(327)	155
Accounts payable, accrued expenses and other	(321)	42
Net cash provided by operating activities	1,447	1,926
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of equipment, property and improvements	(228)	(130)
Cash used in investing activities	(228)	(130)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of partnership loans	70	44
Issuance of partnership interests	63	66
Redemption of partnership interests	(139)	(118)
Distributions from partnership capital	(1,037)	(1,111)
Net cash used in financing activities	(1,043)	(1,119)
Net increase in cash, cash equivalents and restricted cash	176	677
CASH, CASH EQUIVALENTS AND RESTRICTED CASH:
Beginning of period	7,706	6,875
End of period	$ 7,882	$ 7,552

Introduction and Basis of Presentation (Policies)	9 Months Ended
Introduction and Basis of Presentation (Policies)	Sep. 30, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]
The Partnership's Business and Basis of Accounting	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 August 31, 2022 and November 30, 2021 are included in the Partnership’s Consolidated Statements of Financial Condition and the results for the three- and nine-month periods ended August 31, 2022 and 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 insurance products and the purchase or sale of 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 two operating segments for the three- and nine-month periods ended September 30, 2022 and September 24, 2021, see Note 9 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 subsidiary of the Partnership. Olive Street Investment Advisers, LLC ("Olive Street"), a wholly-owned subsidiary of the Partnership, provides investment advisory services to the eleven sub-advised mutual funds comprising the Bridge Builder® Trust. Passport Research, Ltd. ("Passport"), a wholly-owned subsidiary of Edward Jones, currently provides investment advisory services to the sub-advised Edward Jones Money Market Fund (the "Money Market Fund"). Effective November 2, 2022, the Money Market Fund's Board of Trustees approved the transition of its investment advisory services from Passport to Olive Street, which has no impact on the Consolidated Financial Statements. The Partnership plans to dissolve Passport following the completion of this transition. 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. 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 November 14, 2022, which was the date these Consolidated Financial Statements were available to be issued, and identified no matters requiring disclosure other than as disclosed above, in Note 5 and Note 8. 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, 2021 (the "Annual Report"). The results of operations for the three- and nine- month periods ended September 30, 2022 are not necessarily indicative of the results to be expected for the year ending December 31, 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.
Contingencies (ASC No.450)	The Partnership accrues for potential losses for those matters where it is probable that the Partnership will incur a potential loss to the extent that the amount of such potential loss can be reasonably estimated, in accordance with Financial Accounting Standards Board Accounting Standards Codification No. 450, Contingencies. This liability represents the Partnership’s estimate of the probable loss as of September 30, 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

Leases - Schedule of Future Undiscounted Cash Outflows for Operating Leases (Detail) - USD ($) $ in Millions	Sep. 30, 2022	Dec. 31, 2021
Lessee Disclosure [Abstract]
2022	$ 81
2023	296
2024	233
2025	172
2026	114
Thereafter	112
Total lease payments	1,008
Less: Interest	53
Total present value of lease liabilities	$ 955	$ 954

Fair Value - Additional Information (Detail) - USD ($)	9 Months Ended	12 Months Ended
Fair Value - Additional Information (Detail) - USD ($)	Sep. 30, 2022	Dec. 31, 2021
Fair Value Disclosures [Abstract]
Fair value of level III, assets	$ 0	$ 0

Fair Value - Partnership's Financial Assets at Fair Value (Detail) - USD ($) $ in Millions	Sep. 30, 2022	Dec. 31, 2021
Cash equivalents:
Total cash equivalents	$ 287	$ 313
Investments segregated under federal regulations:
Total investments segregated under federal regulations	12,653	14,308
Investment securities:
Total investment securities	1,103	852
Inventory securities:
Total inventory securities	91	38
Other Assets [Abstract]
Client Fractional Shares Ownership Assets	593	710
Accounts Payable and Accrued Liabilities [Abstract]
Client Fractional Shares Redemption Obligations	593	710
Equities [Member]
Investment securities:
Total investment securities	7	3
Inventory securities:
Total inventory securities	24	18
Corporate Bonds and Notes [Member]
Inventory securities:
Total inventory securities	20	3
Government and Agency Obligations [Member]
Investment securities:
Total investment securities	807	413
U.S. Treasuries [Member]
Investments segregated under federal regulations:
Total investments segregated under federal regulations	12,253	13,908
Mutual Funds [Member]
Investment securities:
Total investment securities	289	366
Inventory securities:
Total inventory securities	8	2
Municipal Obligations [Member]
Inventory securities:
Total inventory securities	22	9
Certificates of Deposit [Member]
Cash equivalents:
Total cash equivalents	246	266
Investments segregated under federal regulations:
Total investments segregated under federal regulations	400	400
Investment securities:
Total investment securities		70
Inventory securities:
Total inventory securities	17	6
Money Market Fund [Member]
Cash equivalents:
Total cash equivalents	41	47
Level I [Member]
Cash equivalents:
Total cash equivalents	41	47
Investments segregated under federal regulations:
Total investments segregated under federal regulations	12,253	13,908
Investment securities:
Total investment securities	1,103	782
Inventory securities:
Total inventory securities	32	20
Other Assets [Abstract]
Client Fractional Shares Ownership Assets	593	710
Accounts Payable and Accrued Liabilities [Abstract]
Client Fractional Shares Redemption Obligations	593	710
Level I [Member] \| Equities [Member]
Investment securities:
Total investment securities	7	3
Inventory securities:
Total inventory securities	24	18
Level I [Member] \| Corporate Bonds and Notes [Member]
Inventory securities:
Total inventory securities	0	0
Level I [Member] \| Government and Agency Obligations [Member]
Investment securities:
Total investment securities	807	413
Level I [Member] \| U.S. Treasuries [Member]
Investments segregated under federal regulations:
Total investments segregated under federal regulations	12,253	13,908
Level I [Member] \| Mutual Funds [Member]
Investment securities:
Total investment securities	289	366
Inventory securities:
Total inventory securities	8	2
Level I [Member] \| Municipal Obligations [Member]
Inventory securities:
Total inventory securities	0	0
Level I [Member] \| Certificates of Deposit [Member]
Cash equivalents:
Total cash equivalents	0	0
Investments segregated under federal regulations:
Total investments segregated under federal regulations	0	0
Investment securities:
Total investment securities		0
Inventory securities:
Total inventory securities	0	0
Level I [Member] \| Money Market Fund [Member]
Cash equivalents:
Total cash equivalents	41	47
Level II [Member]
Cash equivalents:
Total cash equivalents	246	266
Investments segregated under federal regulations:
Total investments segregated under federal regulations	400	400
Investment securities:
Total investment securities	0	70
Inventory securities:
Total inventory securities	59	18
Other Assets [Abstract]
Client Fractional Shares Ownership Assets	0	0
Accounts Payable and Accrued Liabilities [Abstract]
Client Fractional Shares Redemption Obligations	0	0
Level II [Member] \| Equities [Member]
Investment securities:
Total investment securities	0	0
Inventory securities:
Total inventory securities	0	0
Level II [Member] \| Corporate Bonds and Notes [Member]
Inventory securities:
Total inventory securities	20	3
Level II [Member] \| Government and Agency Obligations [Member]
Investment securities:
Total investment securities	0	0
Level II [Member] \| U.S. Treasuries [Member]
Investments segregated under federal regulations:
Total investments segregated under federal regulations	0	0
Level II [Member] \| Mutual Funds [Member]
Investment securities:
Total investment securities	0	0
Inventory securities:
Total inventory securities	0	0
Level II [Member] \| Municipal Obligations [Member]
Inventory securities:
Total inventory securities	22	9
Level II [Member] \| Certificates of Deposit [Member]
Cash equivalents:
Total cash equivalents	246	266
Investments segregated under federal regulations:
Total investments segregated under federal regulations	400	400
Investment securities:
Total investment securities		70
Inventory securities:
Total inventory securities	17	6
Level II [Member] \| Money Market Fund [Member]
Cash equivalents:
Total cash equivalents	$ 0	$ 0

Line of Credit - Schedule Of Line Of Credit Facilities (Details) - USD ($) $ in Millions	Sep. 30, 2022	Dec. 31, 2021
Line of Credit Facility [Line Items]
Line of credit facility	$ 890	$ 890
2018 Credit Facility [Member]
Line of Credit Facility [Line Items]
Line of credit facility	500	500
Uncommitted Secured Credit Facilities [Member]
Line of Credit Facility [Line Items]
Line of credit facility	$ 390	$ 390

Partnership Capital Subject to Mandatory Redemption - Roll Forward of Outstanding Partnership Loans (Detail) - USD ($) $ in Millions	9 Months Ended
	Sep. 30, 2022	Sep. 24, 2021
Partners' Capital Notes [Abstract]
Partnership loans outstanding at beginning of year	$ 321	$ 341
Partnership loans issued during the period	276	222
Repayment of Partnership loans during the period	(243)	(227)
Partnership loans outstanding at end of period	$ 354	$ 336

Net Capital Requirements - Additional Information (Detail) - Edward D. Jones & Co., L. P [Member] $ in Thousands	Sep. 30, 2022 USD ($)
Net Capital Requirements [Line Items]
Percentage of aggregate debit items arising from customer transactions to maintain minimum net capital requirements	0.02
Minimum net capital requirements	$ 250

Net Capital Requirements - Partnership's Capital Figures for U.S. and Canada Broker-Dealer Subsidiaries (Detail) - USD ($) $ in Millions	Sep. 30, 2022	Dec. 31, 2021
Edward D. Jones & Co., L. P [Member]
Regulatory Capital Requirements
Net capital	$ 1,400	$ 1,421
Net capital in excess of the minimum required	$ 1,321	$ 1,352
Net capital as a percentage of aggregate debit items	35.40%	41.30%
Net capital after anticipated capital withdrawals, as a percentage of aggregate debit items	19.20%	20.70%
Canada [Member]
Regulatory Capital Requirements
Regulatory risk-adjusted capital	$ 92	$ 71
Regulatory risk-adjusted capital in excess of the minimum required to be held by IIROC	$ 91	$ 50

Contingencies - Additional Information (Detail) $ in Millions	Sep. 30, 2022 USD ($)
Loss Contingencies [Line Items]
Loss Contingency, Estimate of Possible Loss	$ 8