UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549


_______________________





FORM
10-Q


(Mark
One)


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





For the
quarterly period ended June 27, 2008


OR





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





For the
transition period from _________ to _________





Commission
file number 0-16633




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





(Exact
name of registrant as specified in its Partnership Agreement)





MISSOURI
            43-1450818





(State
      or other jurisdiction of
            (IRS
      Employer Identification No.)incorporation
      or organization)





12555
Manchester Road


Des
Peres, Missouri 63131





(Address
of principal executive office)


(Zip
Code)





(314)
515-2000





(Registrant's
telephone number, including area code)





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





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





Large
accelerated filer
[   ]                                                                                           Accelerated
filer [   ]


Non-accelerated
filer [ X
]                                                                                           Smaller
reporting company [   ]


(do not
check if a smaller reporting company)




Indicated
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).  Yes [   ] No [ X
]






1








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





INDEX





PageNumber








Part I.
            FINANCIAL INFORMATIONItem 1.
            Financial StatementsConsolidated Statements of Financial
      Condition
            3Consolidated Statements of
      Income
            5Consolidated Statements of Changes in
      Partnership Capital Subject toMandatory
      Redemption
            6Consolidated Statements of Cash
Flows
            7Notes to Consolidated Financial
      Statements
            8Item 2.
            Management’s Discussion and Analysis of
      FinancialCondition and Results of Operations
            15Item 3.
            Quantitative and Qualitative Disclosures About Market
      Risk
            25Item 4.
            Controls and Procedures
            25Part II.
            OTHER INFORMATIONItem 1.
            Legal Proceedings
            26Item 1A.
            Risk Factors
            27Item 6.
            Exhibits
            27Signatures
            28





2
 
 PART I. FINANCIAL INFORMATION
 
 ITEM 1. FINANCIAL STATEMENTS


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


CONSOLIDATED STATEMENTS OF FINANCIAL
CONDITION


ASSETS




June
      27,
            
            
            December
      31,(Dollars
      in thousands)
            
            2008
            
            
            2007Cash
      and cash equivalents
            
            $
            318,218
            
            
            $
            378,141Cash
      segregated under federal regulations
            
            
            1,317,000
            
            
            
            1,620,129Securities
      purchased under agreements to resell
            
            
            697,000
            
            
            
            595,000Receivable
      from:Customers
            
            
            2,149,698
            
            
            
            1,989,962Brokers, dealers and clearing organizations
            
            
            415,865
            
            
            
            439,378Mutual funds, insurance companies, and other
            
            
            171,599
            
            
            
            173,610Securities
      owned, at fair valueInventory securities
            
            
            169,286
            
            
            
            87,524Investment securities
            
            
            120,237
            
            
            
            136,628Equipment,
      property and improvements, at cost,net of accumulated depreciation
            
            
            378,401
            
            
            
            328,668Other
      assets
            
            
            80,814
            
            
            
            75,338TOTAL ASSETS
            
            $
            5,818,118
            
            
            $
            5,824,378




The
accompanying notes are an integral part of these consolidated financial
statements.


3
 
 PART I.
FINANCIAL INFORMATION
 
 Item 1.
Financial Statements, continued


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


CONSOLIDATED
STATEMENTS OF FINANCIAL CONDITION


LIABILITIES




(Unaudited)June
      27,
              
              
              December
      31,(Dollars
      in thousands)
              
              2008
              
              
              2007Payable
      to:Customers
              
              $
              3,405,836
              
              
              $
              3,326,854Brokers, dealers and clearing organizations
              
              
              136,098
              
              
              
              66,469Securities
      sold, not yet purchased, at fair value
              
              
              10,970
              
              
              
              5,410Accrued
      compensation and employee benefits
              
              
              351,585
              
              
              
              497,135Accounts
      payable and accrued expenses
              
              
              175,255
              
              
              
              191,596Long-term
      debt
              
              
              9,472
              
              
              
              10,8344,089,216
              
              
              
              4,098,298Liabilities
      subordinated to claims of general creditors
              
              
              275,300
              
              
              
              275,300Commitments
      and contingencies (See Notes)Partnership
      capital subject to mandatory redemption,net of reserve for anticipated withdrawals
              
              
              1,396,996
              
              
              
              1,328,342Reserve
      for anticipated withdrawals
              
              
              56,606
              
              
              
              122,438Total
      partnership capital subject to mandatory redemption
              
              
              1,453,602
              
              
              
              1,450,780TOTAL LIABILITIES
              
              $
              5,818,118
              
              
              $
              5,824,378


The
accompanying notes are an integral part of these consolidated financial
statements.


4
 
 PART I.
FINANCIAL INFORMATION
 
 Item 1.
Financial Statements, continued


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


CONSOLIDATED STATEMENTS OF INCOME


(Unaudited)




Three
      Months Ended
              
              
              Six
      Months Ended(Dollars
      in thousands,
              
              June
      27,
              
              
              June
      29,
              
              
              June
      27,
              
              
              June
      29,except
      per unit information)
              
              2008
              
              
              2007
              
              
              2008
              
              
              2007Revenue:Trade RevenueCommissions
              
              $
              436,649
              
              
              $
              488,992
              
              
              $
              873,801
              
              
              $
              972,756Principal transactions
              
              
              127,128
              
              
              
              97,633
              
              
              
              251,230
              
              
              
              163,991Investment banking
              
              
              12,986
              
              
              
              4,133
              
              
              
              24,885
              
              
              
              10,544Fee RevenueAsset fees
              
              
              287,026
              
              
              
              272,573
              
              
              
              569,288
              
              
              
              524,949Account and activity fees
              
              
              117,078
              
              
              
              109,051
              
              
              
              234,512
              
              
              
              214,208Interest and dividends
              
              
              48,251
              
              
              
              79,930
              
              
              
              106,805
              
              
              
              156,636Other revenue
              
              
              3,520
              
              
              
              11,575
              
              
              
              (1,162
              )
              
              
              13,409Total revenue
              
              
              1,032,638
              
              
              
              1,063,887
              
              
              
              2,059,359
              
              
              
              2,056,493Interest expense
              
              
              18,475
              
              
              
              20,063
              
              
              
              38,010
              
              
              
              40,232Net revenue
              
              
              1,014,163
              
              
              
              1,043,824
              
              
              
              2,021,349
              
              
              
              2,016,261Operating
      expenses:Compensation and benefits
              
              
              627,446
              
              
              
              634,621
              
              
              
              1,246,738
              
              
              
              1,218,445Communications and data processing
              
              
              79,743
              
              
              
              71,383
              
              
              
              157,863
              
              
              
              145,384Occupancy and equipment
              
              
              77,273
              
              
              
              74,768
              
              
              
              153,485
              
              
              
              154,359Payroll and other taxes
              
              
              37,834
              
              
              
              33,618
              
              
              
              81,454
              
              
              
              74,312Advertising
              
              
              19,041
              
              
              
              14,102
              
              
              
              37,746
              
              
              
              29,344Postage and shipping
              
              
              13,920
              
              
              
              14,054
              
              
              
              27,812
              
              
              
              28,150Floor brokerage and clearance fees
              
              
              5,464
              
              
              
              4,743
              
              
              
              8,687
              
              
              
              8,493Other operating expenses
              
              
              54,931
              
              
              
              37,075
              
              
              
              105,700
              
              
              
              84,160Total operating expenses
              
              
              915,652
              
              
              
              884,364
              
              
              
              1,819,485
              
              
              
              1,742,647Income
      before allocations to partners
              
              
              98,511
              
              
              
              159,460
              
              
              
              201,864
              
              
              
              273,614Allocations
      to partners:Limited partners
              
              
              13,357
              
              
              
              25,976
              
              
              
              27,448
              
              
              
              44,648Subordinated
      limited partners
              
              
              9,392
              
              
              
              14,117
              
              
              
              19,484
              
              
              
              24,620General partners
              
              
              75,762
              
              
              
              119,367
              
              
              
              154,932
              
              
              
              204,346Net
      Income
              
              $
              -
              
              
              $
              -
              
              
              $
              -
              
              
              $
              -Income
      before allocations to partnersper
      weighted average $1,000equivalent
      limited partnership unit outstanding
              
              $
              27.23
              
              
              $
              52.06
              
              
              $
              55.81
              
              
              $
              89.33Weighted
      average $1,000 equivalentlimited
      partnership units outstanding
              
              
              490,452
              
              
              
              498,942
              
              
              
              491,776
              
              
              
              499,809


The
accompanying notes are an integral part of these consolidated financial
statements.


5
 
 PART I.
FINANCIAL INFORMATION
 
 Item 1.
Financial Statements, continued


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


CONSOLIDATED STATEMENTS OF CHANGES IN
PARTNERSHIP CAPITAL


SUBJECT
TO MANDATORY REDEMPTION


SIX
MONTHS ENDED JUNE 27, 2008 AND JUNE 29, 2007


(Unaudited)




(Dollars
      in thousands)
                
                Limited
      Partnership Capital
                
                
                Subordinated
      Limited Partnership Capital
                
                
                General
      Partnership Capital
                
                
                TotalTOTAL
      PARTNERSHIP CAPITALSUBJECT
      TO MANDATORYREDEMPTION,
      DECEMBER 31, 2006
                
                $
                229,270
                
                
                $
                137,503
                
                
                $
                636,606
                
                
                $
                1,003,379Reserve
      for anticipated withdrawals
                
                
                (20,938
                )
                
                
                (12,372
                )
                
                
                (62,683
                )
                
                
                (95,993
                )Partnership
      capital subject to mandatoryredemption,
      net of reserve for anticipatedwithdrawals,
      December 31, 2006
                
                
                208,332
                
                
                
                125,131
                
                
                
                573,923
                
                
                
                907,386Issuance
      of partnership interests
                
                
                293,562
                
                
                
                21,222
                
                
                
                8,038
                
                
                
                322,822Redemption
      of partnership interests
                
                
                (3,802
                )
                
                
                (612
                )
                
                
                -
                
                
                
                (4,414
                )Income
      allocated to partners
                
                
                44,648
                
                
                
                24,620
                
                
                
                204,346
                
                
                
                273,614Withdrawals
      and distributions
                
                
                (1,602
                )
                
                
                (19,203
                )
                
                
                (102,187
                )
                
                
                (122,992
                )TOTAL
      PARTNERSHIP CAPITALSUBJECT
      TO MANDATORYREDEMPTION,
      JUNE 29, 2007
                
                
                541,138
                
                
                
                151,158
                
                
                
                684,120
                
                
                
                1,376,416Reserve
      for anticipated withdrawals
                
                
                (43,047
                )
                
                
                (5,417
                )
                
                
                (45,756
                )
                
                
                (94,220
                )Partnership
      capital subject to mandatoryredemption,
      net of reserve for anticipatedwithdrawals,
      June 29, 2007
                
                $
                498,091
                
                
                $
                145,741
                
                
                $
                638,364
                
                
                $
                1,282,196TOTAL
      PARTNERSHIP CAPITALSUBJECT
      TO MANDATORYREDEMPTION,
      December 31, 2007
                
                $
                545,199
                
                
                $
                158,133
                
                
                $
                747,448
                
                
                $
                1,450,780Reserve
      for anticipated withdrawals
                
                
                (50,713
                )
                
                
                (11,456
                )
                
                
                (60,269
                )
                
                
                (122,438
                )Partnership
      capital subject to mandatoryredemption,
      net of reserve for anticipatedwithdrawals,
      December 31, 2007
                
                
                494,486
                
                
                
                146,677
                
                
                
                687,179
                
                
                
                1,328,342Issuance
      of partnership interests
                
                
                -
                
                
                
                31,437
                
                
                
                -
                
                
                
                31,437Redemption
      of partnership interests
                
                
                (4,928
                )
                
                
                (617
                )
                
                
                -
                
                
                
                (5,545
                )Income
      allocated to partners
                
                
                27,448
                
                
                
                19,484
                
                
                
                154,932
                
                
                
                201,864Withdrawals
      and distributions
                
                
                (3,239
                )
                
                
                (16,236
                )
                
                
                (83,021
                )
                
                
                (102,496
                )TOTAL
      PARTNERSHIP CAPITALSUBJECT
      TO MANDATORYREDEMPTION,
      JUNE 27, 2008
                
                
                513,767
                
                
                
                180,745
                
                
                
                759,090
                
                
                
                1,453,602Reserve
      for anticipated withdrawals
                
                
                (24,209
                )
                
                
                (3,248
                )
                
                
                (29,149
                )
                
                
                (56,606
                )Partnership
      capital subject to mandatoryredemption,
      net of reserve for anticipatedwithdrawals,
      June 27, 2008
                
                $
                489,558
                
                
                $
                177,497
                
                
                $
                729,941
                
                
                $
                1,396,996
  The
accompanying notes are an integral part of these consolidated financial
statements.


6
 
 PART I.
FINANCIAL INFORMATION
 
 Item 1.
Financial Statements, continued


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


CONSOLIDATED STATEMENTS OF CASH FLOWS


(Unaudited)




Six
      Months EndedJune
      27,
              
              
              June
      29,(Dollars
      in thousands)
              
              2008
              
              
              2007CASH
      FLOWS FROM OPERATING ACTIVITIES:Net income
              
              $
              -
              
              
              $
              -Adjustments to reconcile net income to netcash provided by (used in) operating activities -Income before allocations to partners
              
              
              201,864
              
              
              
              273,614Depreciation
              
              
              43,155
              
              
              
              46,928Changes
      in assets and liabilities:Cash segregated under federal
    regulations
              
              
              303,129
              
              
              
              37,806Securities purchased under agreements to resell
              
              
              (102,000
              )
              
              
              (403,000
              )Net
      payable to customers
              
              
              (80,754
              )
              
              
              85,494Net
      receivable from brokers, dealers andclearing organizations
              
              
              93,142
              
              
              
              (18,588
              )Receivable
      from mutual funds, insurance companiesand other
              
              
              2,011
              
              
              
              (17,892
              )Securities owned, net
              
              
              (59,811
              )
              
              
              10,523Other assets
              
              
              (5,476
              )
              
              
              616Accrued
      compensation and employee benefits
              
              
              (145,550
              )
              
              
              (36,520
              )Accounts payable and accrued expenses
              
              
              (24,039
              )
              
              
              (25,580
              )Net cash provided by/(used in) operating activities
              
              
              225,671
              
              
              
              (46,599
              )CASH
      FLOWS FROM INVESTING ACTIVITIES:Purchase of equipment, property and improvements, net
              
              
              (85,190
              )
              
              
              (50,786
              )Net cash used in investing activities
              
              
              (85,190
              )
              
              
              (50,786
              )CASH
      FLOWS FROM FINANCING ACTIVITIES:Repayment
      of long-term debt
              
              
              (1,362
              )
              
              
              (1,748
              )Issuance of partnership interests
              
              
              31,437
              
              
              
              322,822Redemption of partnership interests
              
              
              (5,545
              )
              
              
              (4,414
              )Withdrawals and distributions from partnership capital
              
              
              (224,934
              )
              
              
              (218,985
              )Net cash (used in)/provided by financing activities
              
              
              (200,404
              )
              
              
              97,675Net (decrease) increase in cash and cash equivalents
              
              
              (59,923
              )
              
              
              290CASH
      AND CASH EQUIVALENTS,Beginning of period
              
              
              378,141
              
              
              
              311,992End of period
              
              $
              318,218
              
              
              $
              312,282Cash
      paid for interest
              
              $
              38,126
              
              
              $
              39,840NON-CASH
      ACTIVITIESAdditions of equipment, property and improvements in
                accounts payable and accrued expenses
              
              $
              7,698
              
              
              $
              -
  The
accompanying notes are an integral part of these consolidated financial
statements.


7
 
 PART I.
FINANCIAL INFORMATION
 
 Item 1.
Financial Statements, continued


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


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS


(Unaudited)





(Dollars
in thousands, except per unit information)





BASIS
OF PRESENTATION





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"). All material intercompany balances and transactions have been
eliminated in consolidation.  Non-controlling minority interests owned
are accounted for under the equity method.  The results of the
Partnership's subsidiary in Canada for the six months ended May 31, 2007 and
2006 are included in the Partnership's consolidated financial statements because
of the timing of the Partnership's financial reporting process.





The
Partnership operates as a single business segment.  The Partnership's
principal operating subsidiary, Edward D. Jones & Co., L.P. ("Edward
Jones"), is comprised of three registered broker-dealers primarily serving
individual investors.  Edward Jones primarily derives its revenues
from the retail brokerage business through the sale of listed and unlisted
securities, insurance products, investment banking and principal transactions,
as a distributor of mutual fund shares, and from revenue related to assets held
by and account services provided to its clients.  Edward Jones
conducts business throughout the United States of America, Canada and the United
Kingdom with its customers, various brokers, dealers, clearing organizations,
depositories and banks.  Edward Jones Trust Company ("EJTC"), a
wholly-owned subsidiary of the Partnership, offers trust services to Edward
Jones customers.





The
consolidated financial statements have been prepared under the accrual basis of
accounting in conformity with accounting principles generally accepted in the
United States of America ("GAAP") 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.





Substantially
all of the Partnership's short-term financial assets and liabilities are carried
at fair value or contracted amounts which approximate fair value.





Under the
terms of the Partnership Agreement, a partner’s capital will be redeemed by the
Partnership in the event of the partner’s death, resignation or
termination.  In the event of the partner’s death, the Partnership
must redeem the partner’s capital within six months.  Limited partners
withdrawing from the Partnership due to termination or resignation are repaid
their capital in three equal annual installments beginning the month after their
resignation or termination.  The capital of general partners resigning
or terminated from the Partnership is converted to subordinated limited
partnership capital.  Subordinated limited partners are repaid their
capital in four equal annual installments beginning the month after their
request for withdrawal of contributed capital.  The Partnership’s
managing partner has the discretion to waive these withdrawal
restrictions.  All current and future partnership capital is
subordinate to all current and future liabilities of the Partnership, including
the liabilities subordinated to claims of general creditors.


8
 
 PART I.
FINANCIAL INFORMATION
 
 Item 1.
Financial Statements, continued


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 presentation of the results of interim operations.  Certain prior
period amounts have been reclassified to conform to the current year
presentation.





The
results of operations for the six months ended June 27, 2008 and June 29, 2007
are not necessarily indicative of the results to be expected for the full
year.  These consolidated financial statements should be read in
conjunction with the Partnership's Annual Report on Form 10-K for the year ended
December 31, 2007.





Revenue
Recognition.Customertransactions are
recorded on a settlement date basis, and the related commissions, principal
transactions and investment banking revenues are recorded on a trade date
basis.  All other forms of revenue are recorded on an accrual basis in
the period earned.





Commissions
consist of charges to customers for the purchase or sale of securities,
insurance products and mutual fund shares.





Principal
transactions revenue is the result of the Partnership’s participation in
market-making activities in over-the-counter corporate securities, municipal
obligations, U.S. Government obligations, including general obligations and
revenue bonds, unit investment trusts, mortgage-backed securities and
certificates of deposit.





Investment
banking revenues are derived from the Partnership’s underwriting and
distribution of securities on behalf of issuers.





Asset
fees revenue consists primarily of service fees and other revenues received
under agreements with mutual fund and insurance companies based on the
underlying value of the Partnership’s customers’ assets invested in those
companies’ products.  Asset-based revenues related to the
Partnership’s interest in the advisor to the Edward Jones Money Market Fund are
included in asset fees revenue.





Account
and activity fees revenue includes fees received from mutual fund companies for
sub-transfer agent accounting services performed by the Partnership and
self-directed IRA custodian account fees.  It also includes other
activity based revenues from customers, mutual fund companies and insurance
companies.





Interest
and dividend income is earned primarily on margin account balances, cash
equivalents, cash segregated under federal regulations, securities purchased
under agreement to resell, inventory securities and investment
securities.





FAIR
VALUE OF SECURITIES





Inventory
and investment securities owned and securities sold, not yet purchased are
presented at fair value.





Fair
value is defined as the price at which an asset or liability could be exchanged
in a current transaction between knowledgeable, willing parties. Where
available, fair value is based on observable market prices or parameters, or
derived from such prices or parameters.  When observable prices are
not available, the Partnership either uses implied pricing from similar
instruments or valuation models based on net present value of estimated future
cash flows,


9
 
 PART I.
FINANCIAL INFORMATION
 
 Item 1.
Financial Statements, continued


adjusted
as appropriate for liquidity, credit, market and/or other risk
factors.





The
Partnership adopted Statement of Financial Accounting Standards ("SFAS") No.
157, Fair Value Measurements ("SFAS 157"), effective for the fiscal year
beginning January 1, 2008.  The adoption of SFAS 157 had no financial
impact on the Partnership's consolidated financial condition, results of
operations, or cash flows.  Beginning January 1, 2008, assets and
liabilities recorded at fair value in the Consolidated Statement of Financial
Condition are categorized based upon the level of judgment associated with the
inputs used to measure their fair value.  Hierarchical levels, defined
by SFAS 157 and directly related to the amount of subjectivity associated with
the inputs to fair valuation of these assets and liabilities, are as
follows:





Level I –
Inputs are unadjusted, quoted prices in active markets for identical assets or
liabilities at the measurement date.





The types
of assets and liabilities categorized as Level I generally are government and
agency securities, equities listed in active markets, unit investment trusts and
investments in publicly traded mutual funds with quoted market
prices.





Level II
– Inputs (other than quoted prices included in Level I) are either directly or
indirectly observable for the asset or liability through correlation with
related market data at the measurement date and for the duration of the
instrument’s anticipated life.





The types
of assets and liabilities categorized as Level II generally are municipal bonds,
mortgage and asset backed securities and corporate debt.





Level III
– Inputs are both unobservable and significant to the overall fair value
measurement.  These inputs reflect management’s best estimate of what
market participants would use in pricing the asset or liability at the
measurement date.  Consideration is given to the risk inherent in the
valuation technique and the risk inherent in the inputs to the
model.





The
Partnership does not have any assets or liabilities categorized as Level
III.





10
 
 PART I.
FINANCIAL INFORMATION
 
 Item 1.
Financial Statements, continued





Assets
      at Fair Value as of June 27, 2008In
      thousands
            
            Level
      I
            
            
            Level
      II
            
            
            Level
      III
            
            
            TotalSecurities
      purchased under agreements to resell
            
            $
            697,000
            
            
            $
            -
            
            
            $
            -
            
            
            $
            697,000Securities
      Owned:Inventory
      Securities:Certificates
      of Deposit
            
            $
            -
            
            
            $
            5,177
            
            
            $
            -
            
            
            $
            5,177U.S.
      and Canadian Government and U.S.
              Agency
      Obligations
            
            
            3,259
            
            
            
            -
            
            
            
            -
            
            
            
            3,259State
      and Municipal Obligations
            
            
            -
            
            
            
            132,442
            
            
            
            -
            
            
            
            132,442Corporate
      Bonds and Notes
            
            
            -
            
            
            
            7,590
            
            
            
            -
            
            
            
            7,590Collateralized
      Mortgage Obligations
            
            
            -
            
            
            
            4,067
            
            
            
            -
            
            
            
            4,067Equities
            
            
            16,566
            
            
            
            -
            
            
            
            -
            
            
            
            16,566Unit
      Investment Trusts
            
            
            185
            
            
            
            -
            
            
            
            -
            
            
            
            185Total
      Inventory Securities
            
            $
            20,010
            
            
            $
            149,276
            
            
            $
            -
            
            
            $
            169,286Investment
      Securities:U.S.
      government and agency obligations held
              by
      U.S. broker dealer
            
            $
            21,477
            
            
            $
            -
            
            
            $
            -
            
            
            $
            21,477U.S.
      and Canadian government and U.S.
              agency
      obligations held by foreign broker-dealers
            
            
            24,642
            
            
            
            -
            
            
            
            -
            
            
            
            24,642Mutual
      Funds
            
            
            72,757
            
            
            
            -
            
            
            
            -
            
            
            
            72,757Equities
            
            
            -
            
            
            
            1,361
            
            
            
            -
            
            
            
            1,361Total
      Investment Securities
            
            $
            118,876
            
            
            $
            1,361
            
            
            $
            -
            
            
            $
            120,237





Liabilities
      at Fair Value as of June 27, 2008In
      thousands
            
            Level
      I
            
            
            Level
      II
            
            
            Level
      III
            
            
            TotalSecurities
      Sold, Not Yet Purchased:Certificates
      of Deposit
            
            $
            -
            
            
            $
            388
            
            
            $
            -
            
            
            $
            388U.S.
      and Canadian Government and U.S.
              Agency
      Obligations
            
            
            1,124
            
            
            
            -
            
            
            
            -
            
            
            
            1,124State
      and Municipal Obligations
            
            
            -
            
            
            
            236
            
            
            
            -
            
            
            
            236Corporate
      Bonds and Notes
            
            
            -
            
            
            
            4,517
            
            
            
            -
            
            
            
            4,517Collateralized
      Mortgage Obligations
            
            
            -
            
            
            
            51
            
            
            
            -
            
            
            
            51Equities
            
            
            4,469
            
            
            
            -
            
            
            
            -
            
            
            
            4,469Unit
      Investment Trusts
            
            
            185
            
            
            
            -
            
            
            
            -
            
            
            
            185Total
      Securities Sold, Not Yet Purchased
            
            $
            5,778
            
            
            $
            5,192
            
            
            $
            -
            
            
            $
            10,970









11
 
 PART I.
FINANCIAL INFORMATION
 
 Item 1.
Financial Statements, continued




PARTNERSHIP
CAPITAL SUBJECT TO MANDATORY REDEMPTION





The
Financial Accounting Standards Board Statement of Financial Accounting Standards
(“SFAS”) No. 150, “Accounting for Certain Financial Instruments with
Characteristics of both Liabilities and Equity,” established standards for
classifying and measuring certain financial instruments with characteristics of
both liabilities and equity.  Under the provisions of SFAS
No. 150, the obligation to redeem a partner's capital in the event of a
partner's death is one of the statement's criteria requiring capital to be
classified as a liability.





Since the
Partnership is obligated to redeem a partner’s capital after a partner’s death,
SFAS No. 150 requires all of the Partnership’s equity capital to be classified
as a liability.  Income before allocations to partners prior to the
issuance of the Statement was classified in the Partnership's statement of
income as net income.  In accordance with SFAS No. 150, these
allocations are now classified as a reduction of income before allocations to
partners, which results in a presentation of $0 net income for the six month
periods ended June 27, 2008 and June 29, 2007.  The financial
statement presentations required to comply with SFAS No. 150 do not alter the
Partnership’s treatment of income, income allocations or equity capital for any
other purposes.  In addition, SFAS No. 150 does not have any effect
on, nor is it applicable to, the Partnership’s subsidiaries’ financial
statements.





Net
income, as defined in the Partnership Agreement, is now equivalent to income
before allocations to partners in the Consolidated Statements of
Income.  Such income, if any, for each calendar year is allocated to
the Partnership’s three classes of capital in accordance with the formulas
prescribed in the Partnership Agreement.  First, limited partners are
allocated net income in accordance with the prescribed formula for their share
of net income.  Thereafter, subordinated limited partners and general
partners are allocated any remaining net income based on formulas in the
Partnership Agreement.  Limited partners do not share in the net loss
in any year in which there is net loss and the Partnership is not dissolved or
liquidated.





Partnership
capital subject to mandatory redemption, net of reserve for anticipated
withdrawals, of $1,396,996 consists of $489,558 of limited partnership capital
issued in $1,000 units, $177,497 of subordinated limited partnership capital and
$729,941 of general partnership capital as of June 27, 2008.  The
reserve for anticipated withdrawals consists of current year profits to be
withdrawn over the next year.





Limited
partnership capital is held by current and former employees, subordinated
limited partners and general partners of the Partnership.  Limited
partners are guaranteed a minimum 7.5% return on the face amount of their
capital.  Expense related to the 7.5% return was $18,400 and $18,800
for the six months ended June 27, 2008 and June 29, 2007, respectively, and is
included as a component of interest expense.  The 7.5% return is paid
to limited partners regardless of the Partnership’s earnings.





Subordinated
limited partnership capital is held by current and former general partners of
the Partnership. Subordinated limited partners receive a varying percentage of
the net income of the Partnership based on their capital
invested.  Subordinated limited partner capital is subordinated to the
limited partnership capital.





12
 
 PART I.
FINANCIAL INFORMATION
 
 Item 1.
Financial Statements, continued


NET
CAPITAL REQUIREMENTS





As a
result of its activities as a broker-dealer, Edward Jones is subject to the Net
Capital provisions of Rule 15c3-1 of the Securities Exchange Act of 1934 and the
capital rules of the New York Stock Exchange, Inc. ("NYSE").  Under
the alternative method permitted by the rules, Edward Jones must maintain
minimum Net Capital equal to the greater of $0.250 million or 2% of aggregate
debit items arising from customer transactions.  The Net Capital rules
also provide that partnership capital may not be withdrawn if resulting Net
Capital would be less than 5% of aggregate debit items.  Additionally,
certain withdrawals require the consent of the Securities and Exchange
Commission ("SEC") to the extent they exceed defined levels, even though such
withdrawals would not cause Net Capital to be less than 5% of aggregate debit
items.





At June
27, 2008, Edward Jones's Net Capital of $816.5 million was 39.8% of
aggregate debit items and its Net Capital in excess of the minimum required was
$775.5 million.  Net capital and the related capital percentages
may fluctuate on a daily basis.





At June
27, 2008, the Partnership’s foreign broker-dealer subsidiaries and EJTC were in
compliance with regulatory capital requirements in the jurisdictions in which
they operate.





CONTINGENCIES





In the
normal course of business, the Partnership has been named, as a defendant in
various legal actions, including arbitrations, class actions and other
litigation.  Certain of these legal actions include claims for
substantial compensatory and/or punitive damages or claims for indeterminate
amounts of damages.  The Partnership is involved, from time to time,
in investigations and proceedings by governmental and self-regulatory agencies,
certain of which may result in adverse judgments, fines or
penalties.





In view
of the inherent difficulty of predicting the outcome of such matters,
particularly in cases in which claimants seek substantial or indeterminate
damages, or actions which are in very preliminary stages, the Partnership cannot
predict with certainty the eventual loss or range of loss related to such
matters.  The Partnership has determined that it is likely that
ultimate resolution in favor of the plaintiffs will result in losses to the
Partnership on some of these matters, and as a result, has established
appropriate accruals for potential litigation losses.  Based on
current knowledge and after consultation with counsel, the Partnership believes
that the outcome of these actions will not have a material adverse effect on the
consolidated financial condition of the Partnership, although the outcome could
be material to the Partnership’s future operating results for a particular
period or periods.  For additional discussions, refer to "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
included in the Partnership's Annual Report on Form 10-K for the fiscal year
ended December 31, 2007 and "Legal Proceedings" in Part II, Item 1
of  this Form 10-Q.





Also, in
the normal course of business, the Partnership enters into contracts which
contain indemnification provisions, including, but not limited to, purchase
contracts, service agreements, escrow agreements, sales of assets, outsourcing
agreements and leasing arrangements.  Under the provisions of these
contracts, the Partnership may indemnify counterparties to the contracts for
certain aspects of the Partnership's past conduct if other parties fail to
perform, or if certain events occur.  These indemnification provisions
will vary based upon the contract.  The Partnership may in turn obtain
indemnifications from other parties in certain contracts.  These
indemnification provisions are not expected to have a material impact on the
Partnership's results of operations or financial condition.


13
 
 PART I.
FINANCIAL INFORMATION
 
 Item 1.
Financial Statements, continued




The
Partnership has executed construction agreements for the construction of two
office buildings totaling 575,000 square feet and related parking garages on
land the Partnership owns at its St. Louis, Missouri, North Campus location, a
225,000 square foot addition and parking garage at an existing building at its
St. Louis, Missouri, South Campus location and a parking garage at its Tempe,
Arizona, Campus.  The Partnership estimates that the total cost of the
construction agreements as well as the related furniture, fixtures and equipment
and information systems costs to be $383.6 million, with estimated completion
dates during 2008 through 2010.  The Partnership has executed $242.7
million in general and subcontractor as well as other vendor commitments related
to the construction projects, of which $86.9 million has been expended to
date.





14
 
 PART I.
FINANCIAL INFORMATION
 
 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
      CONDITION AND RESULTS OF OPERATIONS


BASIS
OF PRESENTATION





For
internal analysis, the Partnership broadly categorizes its revenues as trade
revenue (revenue from buy or sell transactions on securities) and net fee
revenue (sources other than trade revenue).  In the Partnership’s
Consolidated Statements of Income, trade revenue is comprised of commissions,
principal transactions and investment banking.  Net fee revenue is
comprised of asset fees, account and activity fees, interest and dividends net
of interest expense and other revenues.





RESULTS
OF OPERATIONS FOR THE THREE MONTHS ENDED JUNE 27, 2008 AND JUNE 29,
2007





For the
second quarter of 2008, net revenue decreased 3% ($29.7 million) to $1.01
billion, while income before allocations to partners decreased 38% ($60.9
million) to $98.5 million.  The Partnership’s profit margin based on
income before allocations to partners decreased to 9.5% in the second quarter of
2008, from 15.0% in the second quarter of 2007.





The
primary factors contributing to the decline in the Partnership's net revenues
were reduced trade revenues and net interest income.  Trade revenues
were negatively impacted by a shift in customers' dollars invested (the
principal amount of customers' buy and sell transactions) to products with lower
margins while net interest income was reduced due primarily to the interest rate
reductions that occurred starting in September 2007.  These reductions
were partially offset by increased revenues from asset fees and account and
activity fees.  Asset fees were positively impacted by higher asset
balances while account and activity fees increased due to a higher number of
accounts generating these revenues.  Operating expenses increased due
primarily to costs associated with the continued expansion and enhancement of
the Partnership's branch office network, as well as increases in advertising,
travel, and legal expenses.  The Partnership added 1,044 financial
advisors during the twelve months ended June 27, 2008, ending the quarter with
11,683 financial advisors, an increase of 10% from 10,639 as of June 29,
2007.





Trade
Revenue





Trade
revenue comprised 57% of net revenue for both the second quarters of 2008 and
2007.  Net fee revenue comprised 43% for the second quarters of 2008
and 2007.





Trade
revenue of $576.8 million decreased 2% ($14.0 million) during the second quarter
of 2008 compared to the same period in the prior year.  Trade revenue
decreased primarily due to a decrease in margin earned when compared to the
second quarter of 2007.  Partially offsetting the decline in margin
was an increase in customer dollars invested.  The Partnership's
margin earned on each $1,000 invested decreased to $19.40 for the second quarter
of 2008 from $20.70 in 2007.  Total customer dollars invested were
$29.7 billion during the second quarter of 2008, a 4% ($1.2 billion)
increase from the second quarter of 2007.





15
 
 PART I.
FINANCIAL INFORMATION
 
 Item
      2. Management's Discussion and Analysis of Financial Condition and Results
      of Operations, continued


Commission
revenue decreased 11% ($52.4 million) for the second quarter of 2008 to
$436.6 million.  Customers invested $17.4 billion in commission
generating transactions in the second quarter of 2008 compared to $18.8 billion
in the second quarter of 2007, a 7% decrease.  Revenue from mutual
fund commissions decreased 15% ($50.9 million) and equity commissions decreased
8% ($6.3 million) while insurance commissions increased 7%
($4.9 million).  The following table summarizes commissions
revenue quarter over quarter:




Quarter
      ended (in millions)June
      27,
              
              
              June
      29,
              
              
              %2008
              
              
              2007
              
              
              ChangeMutual
      funds
              
              $
              288.3
              
              
              $
              339.2
              
              
              
              (15
              )Equities
              
              
              75.8
              
              
              
              82.1
              
              
              
              (8
              )Insurance
              
              
              72.4
              
              
              
              67.5
              
              
              
              7Corporate
      bonds
              
              
              0.1
              
              
              
              0.2
              
              
              
              (50
              )$
              436.6
              
              
              $
              489.0
              
              
              
              (11
              )


Principal
transactions revenue increased 30% ($29.5 million) to $127.1 million during the
second quarter of 2008 due primarily to an increase in customer dollars
invested.  Customers invested $11.8 billion in principal transactions
in the second quarter of 2008 compared to $9.5 billion in the second
quarter of 2007, an increase of 24%.  The Partnership’s margin earned
on principal transactions on each $1,000 invested increased to $10.70 during the
second quarter of 2008 from $10.40 during the second quarter of 2007 due to a
shift to higher margin, tax free fixed income products from lower margin,
taxable fixed income products.  Revenue from municipal bonds increased
91% ($30.2 million) and certificates of deposit increased 31%
($3.6 million).   Revenue's from Government bonds decreased
31% ($2.2 million), corporate bonds decreased 4% ($1.6 million), and
collateralized mortgage obligations decreased 14% ($0.6 million).  The
increase in municipal bond revenue was due to the attractive yields on municipal
bonds versus their historic yields relative to treasury
securities.  The following table summarizes principal transaction
revenue quarter over quarter:




Quarter
      ended (in millions)June
      27,
              
              
              June
      29,
              
              
              %2008
              
              
              2007
              
              
              ChangeCorporate
      bonds
              
              $
              35.7
              
              
              $
              37.3
              
              
              
              (4
              )Municipal
      bonds
              
              
              63.5
              
              
              
              33.3
              
              
              
              91Certificates
      of deposit
              
              
              15.1
              
              
              
              11.5
              
              
              
              31Government
      bonds
              
              
              4.9
              
              
              
              7.1
              
              
              
              (31
              )Collateralized
      mortgage obligations
              
              
              3.6
              
              
              
              4.2
              
              
              
              (14
              )Unit
      investment trusts
              
              
              4.3
              
              
              
              4.2
              
              
              
              2$
              127.1
              
              
              $
              97.6
              
              
              
              30


Investment
banking revenue increased 214% ($8.9 million) during the second quarter of 2008
to $13.0 million, due primarily to an increase in municipal offerings in
the current quarter.


16
 
 PART I.
FINANCIAL INFORMATION
 
 Item
      2. Management's Discussion and Analysis of Financial Condition and Results
      of Operations, continued


Net
Fee Revenue





Net fee
revenue, which is Fee Revenue net of interest expense, decreased 4% ($15.7
million) to $437.4 million during the second quarter of 2008.





Asset
fees increased 5% ($14.5 million) to $287.0 million due primarily to
increases in customer's mutual fund and insurance assets.  Average
U.S. customer mutual fund, insurance, and money market assets increased $8.1
billion, or 2%, to $346.1 billion in the second quarter of 2008 compared to
$338.0 billion in the second quarter of 2007.





Account
and activity fees of $117.1 million increased 7% ($8.0 million) quarter over
quarter.  Revenue received from sub-transfer agent services performed
for mutual fund companies increased 11% ($7.0 million) to $68.5 million,
due to a 13% increase in the number of customer accounts for which the
Partnership provides mutual fund sub-transfer agent services.  In
addition, retirement account fees increased 14% ($3.8 million) to $30.1 million
during the second quarter of 2008, due primarily to a 10% increase in the number
of U.S. retirement accounts.





Other
revenue of $3.5 million decreased 70% ($8.1 million) quarter over quarter
primarily due to the decrease in value in the investments supporting the
non-qualified deferred compensation plan.  The supporting investments
had a loss in the market value of $0.8 million in the second quarter of 2008,
versus a gain of $5.0 million in the same period last year, resulting in a
$5.8 million decrease in revenue.  As the market value of the
investments supporting  the non-qualified deferred compensation plan
fluctuate, the gains or losses are reflected in other revenue.  There
was an offsetting decrease in compensation and benefits expense in the second
quarter of 2008, as the expense for the plan is reflected there.  Each
period, the net impact of the market value fluctuations, on the investments
supporting the non-qualified plan, to the Partnership's financial performance is
zero.





Net
interest and dividend income decreased 50% ($30.1 million) to $29.8 million
during the second quarter of 2008 due primarily to a decrease in interest
rates.  Interest income from cash equivalents and securities purchased
under agreements to resell decreased 58% ($17.9 million).  The
average funds invested in cash equivalents and securities purchased under
agreements to resell during the second quarter of 2008 was $2.2 billion,
compared to $2.3 billion in the second quarter of 2007.  The average
rate earned on these investments decreased to 2.08% during the second quarter of
2008 from 5.21% during the second quarter of 2007.  While the average
aggregate customer loan balance increased 6% ($114.1 million) to $2.0 billion,
interest income from customer loans decreased 31%
($13.8 million).  The decrease was due to reduced interest
rates.  The average rate earned on customer loan balances decreased to
approximately 5.96% during the second quarter of 2008 from approximately 9.13%
during the second quarter of 2007.  Generally, the average interest
rate earned on the Partnership's interest bearing assets was negatively impacted
by the Federal Reserve's reduction in its target Federal Funds Rate from 5.25%
in the second quarter of 2007, to 2.00% at the end of the second quarter
2008.  In addition, interest expense decreased 8% ($1.6 million)
to $18.5 million during the second quarter of 2008 due to lower subordinated and
long-term debt balances.





Operating
expenses increased 4% ($31.3 million) to $915.7 million during the second
quarter of 2008 as compared to 2007.  Compensation and benefits costs
decreased 1% ($7.2 million) to $627.4 million.  Within compensation
and benefits costs, financial advisor commission compensation decreased 1% ($2.1
million) due to decreased revenues, while financial advisor




17
 
 PART I.
FINANCIAL INFORMATION
 
 Item
      2. Management's Discussion and Analysis of Financial Condition and Results
      of Operations, continued


Ssalary
and subsidy increased 37% ($11.1 million) due to new financial advisor
compensation programs as well as increased number of financial advisors
participating in the programs.  Variable compensation, including
bonuses and profit sharing paid to financial advisors, branch office assistants
and headquarters associates, which expands and contracts in relation to
revenues, income before allocations to partners and the Partnership’s related
profit margin, decreased 40% ($40.6 million).  Headquarters and branch
payroll expense increased 15% ($24.9 million) due to increased salary and
benefit costs for existing and additional personnel support as the Partnership
grows its financial advisor network.  On a full time equivalent basis,
the Partnership had 5,105 headquarters associates and 11,846 branch staff
associates as of June 27, 2008, compared to 4,580 headquarters associates and
11,039 branch staff associates as of June 29, 2007.





Other
operating expenses increased 48% ($17.9 million) primarily due to increases in
travel, and legal expenses.  Legal expenses increased 172% ($8.2
million) during the second quarter of 2008 due to the decrease in legal expense
accruals associated with legal matters and regulatory settlements taken in the
second quarter of 2007.  The Partnership reversed approximately $9.5
million of legal expense accruals in the second quarter of 2007 due to the final
determination and refund of sales loads to current and former customers that
were improperly imposed in prior years pertaining to certain mutual fund Net
Asset Value transfer programs.  (See "Management's Discussion and
Analysis of Financial Condition and Results of Operations" included in the
Partnership's Annual Report on Form 10-K for the Fiscal year ended December 31,
2007 and "Legal Proceedings" in Part II, Item 1 of this Form 10-Q for additional
discussion on regulatory settlements).





RESULTS
OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 27, 2008 AND JUNE 29,
2007





For the
first six months of 2008, net revenue increased $5.1 million to $2.021 billion,
while income before allocations to partners decreased 26% ($71.8 million) to
$201.9 million.  The Partnership’s profit margin based on income
before allocations to partners decreased to 9.8% for the first six months of
2008, from 13.3% in the first six months of 2007.  The Partnership's
modest increase in net revenues was primarily attributable to increased asset
fee and account and activity fee revenues which were largely offset by reduced
net interest income and other revenues.  Operating expenses increased
due primarily to growth in new financial advisor  compensation, costs
associated with the continued expansion and enhancement of the Partnership's
branch office network, as well as increases in advertising, travel and legal
expenses.





Trade
Revenue





Trade
revenue comprised 57% of net revenue for both the first six months of 2008 and
2007.  Conversely, net fee revenue comprised 43% for the first six
months of 2008 and 2007.





Trade
revenue of $1.150 billion increased 0.2% ($2.6 million) during the first six
months of 2008 compared to the same period in the prior year.  The
small increase in trade revenue was comprised of an increase in customer dollars
invested which was largely offset by a decline in the margin earned on overall
customer dollars invested.  Total customer dollars invested were $57.5
billion during the first six months of 2008, a 4% ($2.1 billion) increase from
the first six months of 2007.  The Partnership's margin earned on each
$1,000 invested decreased to $20.00 for the first six months of 2008 from $20.70
in 2007.


18
 
 PART I.
FINANCIAL INFORMATION
 
 Item
      2. Management's Discussion and Analysis of Financial Condition and Results
      of Operations, continued




Commission
revenue decreased 10% ($99.0 million) for the first six months of 2008 to
$873.8 million.  Commission revenue decreased year over year due
primarily to a 7% ($2.7 billion) decrease in customer dollars invested in
commission generating transactions to $34.7 billion.  Underlying
the decrease in commission revenues, mutual fund commissions decreased 15%
($102.3 million) and equity commissions decreased 6% ($10.1 million), which were
offset by an increase in insurance commissions 11% ($13.6 million).





The
following table summarizes commission revenue year over year:




Six
      Months ended (in millions)June
      27,
              
              
              June
      29,
              
              
              %2008
              
              
              2007
              
              
              ChangeMutual
      funds
              
              $
              580.0
              
              
              $
              682.3
              
              
              
              (15
              )Equities
              
              
              152.8
              
              
              
              162.9
              
              
              
              (6
              )Insurance
              
              
              140.8
              
              
              
              127.2
              
              
              
              11Corporate
      bonds
              
              
              0.2
              
              
              
              0.4
              
              
              
              (50
              )$
              873.8
              
              
              $
              972.8
              
              
              
              (10
              )


Principal
transactions revenue increased 53% ($87.2 million) to $251.2 million during the
first six months of 2008 due primarily to an increase in customer dollars
invested.  Customers invested $21.9 billion in principal transactions
in the first six months of 2008 compared to $17.6 billion in the first six
months of 2007.  The Partnership’s margin earned on principal
transactions on each $1,000 invested increased to $11.50 during the first six
months of 2008 from $9.40 during the first six months of 2007 primarily due to a
shift into higher margin fixed income products from lower margin certificates of
deposit.  Revenue from corporate bonds increased 25%
($15.5 million), municipal bonds increased 132% ($71.5 million), and
certificates of deposit increased 5% ($1.1 million), while government bonds
decreased 9% ($1.1 million).  The increase in municipal bond revenue
is due to the attractive yields on municipal bonds versus their historic yields
relative to treasury securities.  The following table summarizes
principal transaction revenue year over year:




Six
      Months ended (in millions)June
      27,
              
              
              June
      29,
              
              
              %2008
              
              
              2007
              
              
              ChangeMunicipal
      bonds
              
              $
              125.7
              
              
              $
              54.2
              
              
              
              132Corporate
      bonds
              
              
              76.3
              
              
              
              60.8
              
              
              
              25Certificates
      of deposit
              
              
              22.7
              
              
              
              21.6
              
              
              
              5Government
      bonds
              
              
              10.6
              
              
              
              11.7
              
              
              
              (9
              )Unit
      investment trusts
              
              
              8.4
              
              
              
              8.1
              
              
              
              4Collateralized
      mortgage obligations
              
              
              7.5
              
              
              
              7.6
              
              
              
              (1
              )$
              251.2
              
              
              $
              164.0
              
              
              
              53




Investment
banking revenue increased 136% ($14.3 million) during the first six months of
2008 to $24.9 million, due primarily to an increase in municipal
offerings.


19
 
 PART I.
FINANCIAL INFORMATION
 
 Item
      2. Management's Discussion and Analysis of Financial Condition and Results
      of Operations, continued




Net
Fee Revenue





Net fee
revenue, which is Fee Revenue net of interest expense, increased 0.3% ($2.5
million) to $871.4 million during the first six months of
2008.





Asset
fees increased 8% ($44.3 million) to $569.3 million due primarily to
increases in customer's mutual fund and insurance assets.  Average
U.S. customer mutual fund, insurance, and money market assets increased 6%
($20.1 billion) to $347.5 billion in the first six months of 2008 compared
to $327.4 billion in the first six months of 2007.





Account
and activity fees of $234.5 million increased 9% ($20.3 million) year over
year.  Revenue received from sub-transfer agent services performed for
mutual fund companies increased 12% ($14.0 million) to $134.9
million.  The number of customer accounts for which the Partnership
provides mutual fund sub-transfer agent services increased by 13%.  In
addition, retirement account fees increased 12% ($6.4 million) to $59.3 million
during the first six months of 2008, due primarily to a 10% increase in the
number of U.S. retirement accounts.





Other
revenue decreased 109% ($14.6 million) year over year.  The decrease
between years is primarily attributable to the decrease in value in the
investments supporting the non-qualified deferred compensation
plan.  The supporting investments had a loss in the market value of
$7.5 million through June 2008, versus a gain of $6.8 million in the same
period last year, resulting in a $14.3 million decrease in
revenue.  As the market value of the investments supporting the
non-qualified deferred compensation plan fluctuate, the gains or losses are
reflected in other revenue.  There was an offsetting decrease in
Compensation and Benefits Expense in the first six months of 2008, as the
expense for the plan is reflected there.  Each period, the net impact
of the market value fluctuations, on the investments supporting the
non-qualified plan, to the partnership's financial performance is
zero.





Net
interest and dividend income decreased 41% ($47.6 million) to $68.8 million
during the first six months of 2008 due primarily to a decrease in interest
rates.  Interest income from cash equivalents and securities purchased
under agreements to resell decreased 45% ($26.4 million).  The
average funds invested in cash equivalents and securities purchased under
agreements to resell during the first six months of 2008 was $2.3 billion,
compared to $2.2 billion in the first six months of 2007.  The
average rate earned on these investments decreased to 2.65% during the first six
months of 2008 from 5.21% during the first six months of
2007.  Interest income from customer loans decreased 27% ($24.0
million) to $63.4 million.  While the average aggregate customer loan
balance increased 2% ($45.2 million) to $2.0 billion, the average rate earned on
customer loan balances decreased due to the decrease in short-term interest
rates during the past year to approximately 6.54% during the first six months of
2008 from approximately 9.13% during the first six months of 2007.  In
addition, interest expense decreased 6% ($2.2 million) to $38.0 million during
the first six months of 2008 due to lower subordinated and long-term debt
balances.





Operating
expenses increased 4% ($76.8 million) to $1.819 billion during the first six
months of 2008.  Compensation and benefits costs increased 2% ($28.3
million) to $1.247 billion.  Within compensation and benefits costs,
financial advisor compensation increased 2% ($12.6 million) due to increased
revenues, while financial advisor salary and subsidy increased 37%
($21.2 million) due to new financial advisor compensation programs as well
as an increased number of financial advisors participating in the
programs.  Variable compensation, including


20
 
 PART I.
FINANCIAL INFORMATION
 
 Item
      2. Management's Discussion and Analysis of Financial Condition and Results
      of Operations, continued


bonuses
and profit sharing paid to financial advisors, branch office assistants and
headquarters' associates, which expands and contracts in relation to revenues,
income before allocations to partners and the Partnership’s related profit
margin decreased 27% ($49.4 million).  Headquarters salary and fringe
expense increased 14% ($19.1 million) to $160.0 million in the first six months
of 2008.  Branch salary and fringe expense increased 14% ($24.8
million) to $204.6 million.  Headquarters and branch salary and fringe
expense increased due to increased salary and benefit costs for existing and
additional personnel support as the Partnership grows its expands its financial
advisor network.  On a full time equivalent basis, the Partnership had
5,105 headquarters associates and 11,846 branch staff associates as of June 27,
2008, compared to 4,580 headquarters associates and 11,039 branch staff
associates as of June 29, 2007.





Communications
and data processing expense increased 9% ($12.5 million) to $157.9 million in
the first six months of 2008 due to increased costs related to the continued
expansion and enhancement of the Partnership's branch office network, including
the Partnership's conversion to a terrestrial communications network for its
branches from a satellite network (which was completed in the fall of
2007).





Other
operating expenses increased 26% ($21.5 million) primarily due to increased
legal expenses, travel and MAP money manager expense associated with increased
MAP assets and revenues.  Legal expenses increased $9.1 million during
the first six months of 2008 due to increased legal expense accruals associated
with legal matters and regulatory settlements and the reversal of previously
established expense accruals during the first six months of 2007 pertaining to
the mutual fund NAV transfer programs (as discussed in the "Results of
Operations for the Three Months ended June 27, 2008 and June 29,
2007").





MUTUAL
FUNDS AND ANNUITIES





There are
regulatory proposals being considered that could significantly impact the
disclosure and potentially the amount of compensation that broker-dealers derive
from mutual funds and annuity products.  The Partnership believes it
is likely in the future that broker-dealers will be required to provide more
disclosure to their clients with respect to payments received by them from the
sales of these products.  It is also possible that such payments may
be restricted by law or regulation.  For additional discussion, refer
to "Item 1A-Risk Factors, Regulatory Initiatives" included in the Partnership's
Annual Report on Form 10-K for the fiscal year ended December 31,
2007.





The
Partnership derived 65% of its total revenue from sales and services related to
mutual fund and annuity products in the first six months of 2008 and 67% in the
first six months of 2007.  The Partnership derived 32% of its total
revenue for the first six months of 2008 and 28% of its total revenue for the
first six months of 2007 from one mutual fund vendor.  Significant
reductions in the revenues from these mutual fund sources could have a material
impact on the Partnership's results of operations.





LIQUIDITY
AND CAPITAL RESOURCES





The
Partnership's capital subject to mandatory redemption at June 27, 2008,
excluding the reserve for anticipated withdrawals, was $1.4 billion, compared to
$1.3 billion at December 31, 2007.  The increase is primarily due to
the retention of General Partner earnings ($42.8 million) and the issuance of
subordinated limited partner interests ($31.4 million), offset by
redemption


21
 
 PART I.
FINANCIAL INFORMATION
 
 Item
      2. Management's Discussion and Analysis of Financial Condition and Results
      of Operations, continued


of
limited partner and subordinated limited partner interests ($4.9 million and
$0.6 million, respectively).





At June
27, 2008, the Partnership had $318.2 million in cash and cash
equivalents.  In addition, the Partnership had $697.0 million in
securities purchased under agreements to resell, which have maturities of less
than one week.  Also, the Partnership had $1.317 billion in cash
segregated under federal regulations, which was not available for general
use.  Lines of credit are in place aggregating $1.17 billion ($1.07
billion of which is through uncommitted lines of credit and $0.2 billion of
unsecured lines of credit) where actual borrowing availability is based on
securities owned by customers' margin securities which serve as collateral on
loans.  In the first six months of 2008, the Partnership had amounts
outstanding under these lines of credit for only four days with an outstanding
balance of $1.0 million on each of the four days.  No amounts were
outstanding under these lines at June 27, 2008 and June 29, 2007.





The
Partnership believes that the liquidity provided by existing cash balances,
other highly liquid assets and borrowing arrangements will be sufficient to meet
the Partnership's capital and liquidity requirements.  Depending on
conditions in the capital markets and other factors, the Partnership will, from
time to time, consider the issuance of debt, the proceeds of which could be used
to meet growth needs or for other purposes.





The
Partnership's growth has been financed through sales of limited partnership
interests to its employees and existing limited partners, subordinated limited
partnership interests to its current or retiring general partners, retention of
general partner earnings, private placements of subordinated debt, long-term
secured debt and operating leases under which the Partnership rents
facilities.





The
Partnership has executed a construction agreement for the construction of a
205,000 square foot building, an additional 370,000 square foot office building,
and related parking garages on land the Partnership owns at its St. Louis,
Missouri, North Campus location, a 225,000 square foot addition and parking
garage at an existing building at its St. Louis, Missouri, South Campus
location, and a parking garage at its Tempe, Arizona, Campus.  The
Partnership estimates that the total cost of the construction agreements as well
as the related furniture, fixture and equipment and information systems costs to
be $383.6 million, with estimated completion dates during 2008 through
2010.  The Partnership has executed $242.7 million in general and
subcontractor as well as other vendor commitments related to the above mentioned
construction projects, of which $86.9 million has been expended to date. The
Partnership plans to finance approximately 75% of the office and garage facility
with loans secured by the facilities with the remaining 25% financed from the
Partnership's existing capital resources.  The Partnership has not yet
obtained commitments for such financing.





For the
six months ended June 27, 2008, cash and cash equivalents decreased $59.9
million to $318.2 million.  Cash provided by operating activities was
$225.7 million.  The primary sources of cash from operating activities
include income before allocations to partners adjusted for depreciation expense,
a decrease in cash segregated under federal regulations and a decrease in net
receivable from brokers, dealers, and clearing organizations.  These
increases to cash and cash equivalents were offset by increases in securities
purchased under agreements to resell and securities owned, along with decreases
in accounts payable and accrued expenses and accrued compensation and employee
benefits.  Cash used in investing activities was $85.2 million
consisting of capital expenditures supporting the growth of the Partnership’s
operations and for construction of new office space as noted
above.  Cash used in financing


22
 
 PART I.
FINANCIAL INFORMATION
 
 Item
      2. Management's Discussion and Analysis of Financial Condition and Results
      of Operations, continued


activities
was $200.4 million, consisting primarily of partnership withdrawals and
distributions ($224.9 million), redemption of partnership interests ($5.5
million), and repayment of long-term debt ($1.4 million), offset by the
issuance of partnership interests ($31.4 million).





As a
result of its activities as a broker-dealer, Edward Jones, the Partnership's
principal subsidiary, is subject to the Net Capital provisions of Rule 15c3-1 of
the Securities Exchange Act of 1934 and the capital rules of the
NYSE.  Under the alternative method permitted by the rules, Edward
Jones must maintain minimum Net Capital, as defined, equal to the greater of
$0.250 million or 2% of aggregate debit items arising from customer
transactions.  The Net Capital rules also provide that partnership
capital may not be withdrawn if resulting Net Capital would be less than 5% of
aggregate debit items.  Additionally, certain withdrawals require the
consent of the SEC to the extent they exceed defined levels, even though such
withdrawals would not cause Net Capital to be less than 5% of aggregate debit
items.  At June 27, 2008, Edward Jones's Net Capital of $816.5 million
was 39.8% of aggregate debit items and its Net Capital in excess of the minimum
required was $775.5 million.  Net capital and the related capital
percentage may fluctuate on a daily basis.





CRITICAL
ACCOUNTING POLICIES





The
Partnership’s financial statements are prepared in accordance with accounting
principles generally accepted in the United States of America, which may require
judgment and involve estimation processes to determine its assets, liabilities,
revenues and expenses which affect its results of operations.





Customers'
transactions are recorded on a settlement date basis with the related revenue
and expenses recorded on a trade date basis.  The Partnership may be
exposed to risk of loss in the event customers, other brokers and dealers,
banks, depositories or clearing organizations are unable to fulfill contractual
obligations.  For transactions in which it extends credit to
customers, the Partnership seeks to control the risks associated with these
activities by requiring customers to maintain margin collateral in compliance
with various regulatory and internal guidelines.





Securities
owned and sold, not yet purchased, including inventory securities and investment
securities, are valued at fair value.  Where available, fair value is
based on observable market prices or parameters or derived from such prices or
parameters.  When observable prices are not available, the Partnership
either uses implied pricing from similar instruments or valuation models based
on net present value of estimated future cash flows, adjusted as appropriate for
liquidity, credit, market and/or other risk factors.





The
Partnership’s periodic evaluation of the estimated useful lives of equipment,
property and improvements is based on the original life determined at the time
of purchase and any events or changes in circumstances that would result in a
change in the useful life.





The
Partnership enters into lease agreements for certain headquarters facilities as
well as branch office locations.  The associated lease expense is
recognized on a straight-line basis over the minimum lease terms.





The
following significant accounting policies require estimates that involve a
higher degree of judgment and complexity.





The
Partnership provides for potential losses that may arise out of litigation,
regulatory




23
 
 PART I.
FINANCIAL INFORMATION
 
 Item
      2. Management's Discussion and Analysis of Financial Condition and Results
      of Operations, continued


proceedings
and other contingencies to the extent that such losses can be estimated, in
accordance with SFAS No. 5, Accounting for Contingencies.  See in Part
II, Item 1 "Legal Proceedings" and Part I, Item 2 "Management’s Discussion and
Analysis of Financial Condition and Results of Operations"  of the
Form 10-Q for further discussion of these items.  The Partnership
regularly monitors its exposures for potential losses.  The
Partnership’s total liability with respect to litigation and regulatory
proceedings represents the best estimate of probable losses after considering,
among other factors, the progress of each case, the Partnership’s experience and
discussions with legal counsel.





For
additional discussions of the Partnership’s accounting policies, refer to
“Management’s Discussion and Analysis of Financial Condition and Results of
Operations - Critical Accounting Policies” included in the Partnership's Annual
Report on Form 10-K for the fiscal year ended December 31, 2007.





THE
EFFECTS OF INFLATION





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





FORWARD-LOOKING
STATEMENTS





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





Some of
the factors that might cause differences include, but are not limited to, the
following: (1) regulatory actions; (2) litigation, including that involving
mutual fund matters; (3) changes in legislation; (4) actions of competitors; (5)
changes in technology; (6) a fluctuation or decline in the market value of
securities; (7) rising interest rates; (8) securities theft; (9) the ability of
customers, other broker-dealers, banks, depositories and clearing organizations
to fulfill contractual obligations; and (10) general economic
conditions.  These forward-looking statements were based on
information, plans and estimates at the date of this report, and we do not
undertake to update any forward-looking statements to reflect changes in
underlying assumptions or factors, new information, future events or other
changes.


24




PARTI. FINANCIAL INFORMATION




ITEM 3. QUANTITATIVE AND
QUALITATIVE DISCLOSURES ABOUT MARKET RISK





The SEC
issued market risk disclosure requirements to enhance disclosures of accounting
policies for derivatives and other financial instruments and to provide
quantitative and qualitative disclosures about market risk inherent in
derivatives and other financial instruments.  Various levels of
management within the Partnership manage the Partnership’s risk
exposure.  Position limits in trading and 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.





The
Partnership is exposed to market risk from changes in interest
rates.  Such changes in interest rates impact the income from interest
earning assets, including overnight investments and receivables from customers
on margin balances, and may have an impact on the expense from liabilities that
finance these assets.  At June 27, 2008, amounts receivable from
customers on margin balances were $2.092 billion.  Liabilities include
amounts payable to customers and other interest and non-interest bearing
liabilities.





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 increase in short-term interest rates could increase its annual
net interest income by approximately $17.0 million.  Conversely,
the Partnership estimates that a 100 basis point decrease in short-term interest
rates could decrease the Partnership’s annual net interest income by up to
$41.0 million.  A decrease in short-term interest rates has a
more significant impact on net interest income because under the current low
interest rate environment, the Partnership’s interest bearing liabilities are
less sensitive to changes in short-term interest rates compared to its interest
earning assets.





There
were no material changes in the Partnership’s exposure to market risk and
changes in interest rates during the six months ended June 27, 2008 that would
have a material adverse effect on the consolidated financial position or results
of operations of the Partnership.





ITEM 4. CONTROLS AND PROCEDURES




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.





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.





25


PARTII. FINANCIAL INFORMATION


ITEM 1. LEGAL PROCEEDINGS




Revenue Sharing Class
Action.  To effectuate the settlement in Spahn IRA et al.
v.  Edward Jones & Co., andEnriquez et al. v. Edward D. Jones & Co., L.P., the
Partnership distributed checks to former clients.  The first credit
vouchers issued under the settlement became available for current clients' use
on August 1, 2008.





Tennessee
Investigation.  The Partnership is defending three FINRA
arbitrations: McGee v. Edward
D. Jones & Co. L.P., Wilks v. Edward D. Jones & Co.,
L.P.and Givensv. Edward D. Jones & Co., L.P.filed in April 2008 alleging $500,000, $600,000, and $4.9 million in
actual damages, respectively.  Wilks v. Edward D. Jones & Co. L.P.,et al. was also filed as a
corresponding  lawsuit to the Wilks arbitration in the state court of
Tennessee with the same allegations and demand of $600,000.  The
lawsuit has been stayed as to the Partnership.  In addition, the State
of Tennessee and FINRA have begun investigations related to this matter. The
Partnership continues to cooperate with the State of Tennessee and FINRA in
their investigations.





Wage and Hour Class
Actions.  On June 5, 2008, the U.S. District Court for the
Northern District of Ohio, Eastern Division granted preliminary approval of the
National Class settlements.  In June 2008, the Partnership transferred
$19 million to an escrow account for the National Class Fund and charged this
expense against previously established legal expense accruals.





On June
27, 2008, the Northern District of California granted final approval of the
California settlement.  Checks are anticipated to be mailed to class
members in mid-to-late August.





The
above-stated information supplements the discussion in Part I, Item 3 "Legal
Proceedings" in the Partnership's Annual Report on Form 10-K for the fiscal year
ended December 31, 2007 and the Partnership's Quarterly Report on Form 10-Q for
the quarterly period ended March 28, 2008.





For
additional discussion, see also "Contingencies" in Part I, Item 1, "Financial
Statements" of this Form 10-Q.


26
 
 PART II.
OTHER INFORMATION
  ITEM 1A.  RISK FACTORS






There
have been no material changes from the risk factors disclosed in the
Partnership's Form 10-K for the fiscal year ended December 31,
2007.





ITEM 6. EXHIBITS




ExhibitNumber
            
            
            Description




3.1
            *
            Sixteenth
      Amended and Restated Agreement of Registered Limited Liability Limited
      Partnership of The Jones Financial Companies, L.L.L.P., dated as of May
      12, 2006, incorporated by reference to Exhibit 3.1 to the Company’s
      Quarterly Report on Form 10-Q for the quarter ended March 31,
      2006.3.2
            **
            Sixteenth
      Restated Certificate of Limited Partnership of the Jones Financial
      Companies, L.L.L.P., dated as of July 21, 2008, as
  amended.3.3
            *
            Form
      of Limited Partnership Agreement of Edward D. Jones & Co., L.P.,
      incorporated by reference to Exhibit 2 to the Company’s Annual Report on
      Form 10-K for the year ended December 31, 1993.31.1
            **
            Certification
      pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 302 of
      the Sarbanes-Oxley act of 2002.31.2
            **
            Certification
      pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 302 of
      the Sarbanes-Oxley act of 2002.32.1
            **
            Certification
      pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of
      the Sarbanes-Oxley act of 2002.32.2
            **
            Certification
      pursuant to 18 U.S.C. section 1350, as adopted pursuant to section 906 of
      the Sarbanes-Oxley act of 2002.







*
            Incorporated
      by reference to previously filed exhibits.**
            Filed
      herewith.







27




SIGNATURES





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





THE
      JONES FINANCIAL COMPANIES, L.L.L.P.(Registrant)August
      8, 2008
            /s/ James D.
      WeddleJames
      D. Weddle, Chief Executive OfficerAugust
      8, 2008
            /s/ Steven
      NovikSteven
      Novik, Chief Financial Officer


28