<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 29, 1996
______________
Commission file number 0-16633
_______
THE JONES FINANCIAL COMPANIES, A LIMITED PARTNERSHIP
_______________________________________________________________________
(Exact name of registrant as specified in its charter)
MISSOURI 43-1450818
______________________________________________________________________
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
201 Progress Parkway
Maryland Heights, Missouri 63043
_______________________________________________________________________
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (314) 851-2000
__________________
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
____ ____
As of the filing date, there are no voting
securities held by non-affiliates of the Registrant.
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THE JONES FINANCIAL COMPANIES, A LIMITED PARTNERSHIP
INDEX
Page
Number
Part I.FINANCIAL INFORMATION
Item 1.Financial Statements
Consolidated Statement of Financial Condition ...........3
Consolidated Statement of Income .......................5
Consolidated Statement of Cash Flows ....................6
Consolidated Statement of Changes in Partnership Capital 7
Notes to Consolidated Financial Statements ..............8
Item 2.Management's Discussion and Analysis of Financial
Condition and Results of Operations ....................9
Part II.OTHER INFORMATION
Item 1. Legal Proceedings......................................13
Signatures ............................................14
<PAGE>
THE JONES FINANCIAL COMPANIES, A LIMITED PARTNERSHIP
CONSOLIDATED STATEMENT OF FINANCIAL CONDITION
ASSETS
(Unaudited)
March 29, December 31,
(Amounts in thousands) 1996 1995
Cash and cash equivalents $ 100,844 $ 44,112
Receivable from:
Customers 486,868 489,041
Brokers or dealers and clearing
organizations 22,405 22,094
Mortgages and loans 59,397 58,836
Securities owned, at market value:
Inventory securities 49,331 88,295
Investment securities 123,663 123,060
Equipment, property and improvements 144,838 145,095
Other assets 64,289 74,968
__________ __________
$ 1,051,635 $1,045,501
The accompanying notes are an integral part of these financial
statements.
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THE JONES FINANCIAL COMPANIES, A LIMITED PARTNERSHIP
CONSOLIDATED STATEMENT OF FINANCIAL CONDITION
LIABILITIES AND PARTNERSHIP CAPITAL
(Unaudited)
March 29, December 31,
(Amounts in thousands) 1996 1995
Bank loans $ 1,501 $ 32,503
Payable to:
Customers 394,852 360,754
Brokers or dealers and clearing
organizations 10,788 13,025
Depositors 60,594 61,189
Securities sold but not yet purchased,
at market value 16,780 18,428
Accounts payable and accrued expenses 47,091 49,097
Accrued compensation and employee
benefits 73,529 70,084
Long-term debt 68,001 70,127
__________ __________
673,136 675,207
Liabilities subordinated to claims
of general creditors 122,000 122,000
Partnership capital 256,499 248,294
__________ __________
$1,051,635 $ 1,045,501
The accompanying notes are an integral part of these financial
statements.
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THE JONES FINANCIAL COMPANIES, A LIMITED PARTNERSHIP
CONSOLIDATED STATEMENT OF INCOME
(Unaudited)
Three Months Ended
(Amounts in thousands, March 29, March 31,
except per unit information) 1996 1995
Revenues:
Commissions $160,196 $87,655
Principal transactions 27,419 40,713
Investment banking 9,278 9,822
Interest and dividends 15,002 13,521
Other 15,214 9,377
_________ _________
227,109 161,088
_________ _________
Expenses:
Employee and partner compensation and benefits 130,927 90,284
Occupancy and equipment 23,374 19,326
Communications and data processing 15,712 13,68
Interest 7,723 7,928
Payroll and other taxes 9,420 7,186
Floor brokerage and clearance fees 1,666 1,407
Other operating expenses 15,064 12,335
_________ _________
203,886 152,148
_________ _________
Net income $ 23,223 $ 8,940
========= =========
Net income allocated to:
Limited partners $ 4,169 $ 1,311
Subordinated limited partners 2,470 967
General partners 16,584 6,662
_______ _______
$ 23,223 $ 8,940
======= =======
Net income per weighted average $1,000
equivalent partnership unit outstanding:
Limited partners $ 42.63 $ 21.13
======= =======
Subordinated limited partners $ 79.00 $ 36.32
======= =======
Weighted average $1,000 equivalent
partnership units outstanding:
Limited partners 97,806 62,024
======= =======
Subordinated limited partners 31,269 26,625
======= =======
The accompanying notes are an integral part of these financial
statements.
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THE JONES FINANCIAL COMPANIES, A LIMITED PARTNERSHIP
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
Three Months Ended
March 29, March 31,
(Amounts in thousands) 1996 1995
Cash Flows Provided by Operating Activities:
Net income $ 23,223 $ 8,940
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 6,212 5,000
Decrease (increase) in net receivable
from/payable to customers 36,271 (365)
Increase in net receivable from/
payable to brokers or dealers and
clearing organizations (2,548) (11,209)
Increase in receivable from mortgages
and loans (561) -
Decrease in securities owned, net 36,713 28,622
Decrease in payable to depositors (595) -
Increase (decrease) in accounts payable
and accrued expenses 1,439 (6,919)
Other assets 10,679 3,319
__________ __________
Net cash provided by operating
activities 110,833 27,388
__________ __________
Cash Flows Used by Investing Activities:
Purchase of equipment, property and
improvements (5,955) (9,614)
__________ __________
Cash Flows Used by Financing Activities:
Repayment of bank loans (31,002) (4,200)
Repayment of long-term debt (2,126) (105)
Repayment of subordinated debt - (7,000)
Issuance of partnership interests 3,365 4,651
Redemption of partnership interests (1,960) (621)
Withdrawals and distributions from
partnership capital (16,423) (13,761)
__________ __________
Net cash used by financing activities (48,146) (21,036)
__________ __________
Net increase (decrease) in cash and
cash equivalents 56,732 (3,262)
Cash and Cash Equivalents,
beginning of period 44,112 36,682
__________ __________
Cash and Cash Equivalents,
end of period $ 100,844 $ 33,420
Interest payments for the periods were $5,300 and $6,164.
The accompanying notes are an integral part of these financial
statements.
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THE JONES FINANCIAL COMPANIES, A LIMITED PARTNERSHIP
CONSOLIDATED STATEMENT OF CHANGES IN PARTNERSHIP CAPITAL
THREE MONTHS ENDED MARCH 29, 1996, AND MARCH 31, 1995
(Unaudited)
Subordinated
Limited limited General
partnership partnership partnership
(Amounts in thousands) capital capital capital Total
Balance, December 31, 1994 $ 67,461 $ 23,722 $ 99,340 $ 190,523
Issuance of partnership
interests - 4,651 - 4,651
Redemption of partnership
interests (621) - - (621)
Net income 1,311 967 6,662 8,940
Withdrawals and distributions(5,083) (1,688) (6,990) (13,761)
________ ________ ________ _______
Balance, March 31, 1995 $ 63,068 $ 27,652 $ 99,012 $ 189,732
Balance, December 31, 1995 $103,972 $ 31,524 $112,798 $ 248,294
Issuance of partnership
interests - 3,365 - 3,365
Redemption of partnership
interests (852) (1,108) - (1,960)
Net income 4,169 2,471 16,583 23,223
Withdrawals and distributions(5,569) (2,521) (8,333) (16,423)
________ ________ ________ ________
Balance, March 29, 1996 $101,720 $33,731 $121,048 $256,499
The accompanying notes are an integral part of these financial
statements.
<PAGE>
THE JONES FINANCIAL COMPANIES, A LIMITED PARTNERSHIP
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
BASIS OF PRESENTATION
The accompanying consolidated financial statements include the
accounts of The Jones Financial Companies, A Limited Partnership and
all wholly owned subsidiaries (The "Partnership"), including the
Partnership's principal subsidiary, Edward D. Jones & Co., L.P.,
("EDJ"), a registered broker/dealer. All material intercompany
balances and transactions have been eliminated. Investments in
nonconsolidated companies which are at least 20% owned are accounted
for under the equity method.
The financial statements have been prepared under the accrual basis
of accounting which requires the use of certain estimates by
management in determining the Partnership's assets, liabilities,
revenues and expenses.
The financial information included herein is unaudited. However,
in the opinion of management, such information includes all
adjustments, consisting solely of normal recurring accruals, which are
necessary for a fair presentation of the results of interim
operations.
The results of operations for the three months ended March 29,
1996, are not necessarily indicative of the results to be expected for
the full year.
NET CAPITAL REQUIREMENTS
As a result of its activities as a registered broker/dealer, EDJ is
subject to the Net Capital requirements of the Securities and Exchange
Commission and the New York Stock Exchange. Under the alternative
method permitted by the rules, EDJ is required to maintain minimum Net
Capital of 2% of aggregate debit items arising from customer
transactions. The Net Capital rules also provide that EDJ may not
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expand its business nor may partnership capital be withdrawn if
resulting Net Capital would be less than 5% of aggregate debit items.
At March 29, 1996, EDJ's Net Capital of $200.7 million was 42% of
aggregate debit items and its Net Capital in excess of the minimum
required was $191.2 million.
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THE JONES FINANCIAL COMPANIES, A LIMITED PARTNERSHIP
MANAGEMENT'S FINANCIAL DISCUSSION
OPERATIONS
QUARTER ENDED MARCH 29, 1996, VERSUS
QUARTER ENDED MARCH 31, 1995
Total revenues increased 41% ($66 million) to $227.1 million
compared to the quarter ended March 31, 1995. During the first
quarter of 1996, customers have invested more in equity products
versus fixed income products a year ago. At the same time, customer
dollars invested with the firm increased 13% from $4.9 billion to $6.3
billion. These two factors combined resulted in improved gross
commission percentages. As a result, productivity, measured on a per
IR basis, is approximately 49% higher than during the first quarter of
1995.
Expenses have increased 34% ($51.7 million) to $203.8 million, and
net income has increased by $14.3 million to $23.2 million. Expense
increases have been the result of two major decisions implemented by
the firm during 1995. The first was to slow the growth of the
salesforce to enable a thorough revision of the new IR training
program. As a result, the number of Investment Representatives, 3,254
as of March 29, 1996, remained relatively unchanged when compared with
the first quarter of 1995.
Also during 1995, the firm began the migration from mainframe
technology to client server technology. The client server technology
will be rolled out over the course of the next few years. Until the
installation is complete, costs will be incurred to support both the
existing and the new technology.
As a result of these decisions, the cost to support an individual
Investment Representative has increased. During 1996, the long term
strategy of growing the salesforce has resumed. Ultimately, resuming
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salesforce growth will begin to positively influence the cost of
supporting an Investment Representative.
Commission revenues increased 83% ($72.5 million). Mutual fund
commissions increased 94% ($40.4 million). Listed and over-the-
counter (O-T-C) agency equity commission revenues increased 65% ($15.2
million). Annuity revenues, primarily variable, increased 81% ($16.9
million).
<PAGE>
Principal transaction revenues decreased 33% ($13.3 million) to
$27.4 million for the period. Municipal bond principal revenues
decreased 11% ($1.6 million), corporate bond principal revenues
decreased 32% ($2.0 million) and government bond principal revenue
decreased 76% ($6.1 million). Collateralized Mortgage Obligations
(CMO) revenues decreased 39% ($3.5 million).
Investment banking revenues decreased 6% ($.5 million) to $9.3
million for the period. Demand for underwritings of fixed income
products was lower during the period.
Interest and dividend income increased 11% ($1.5 million) to $15.0
million due primarily to interest income earned on loans at Boone
National Savings and Loan Association, F.A., (Boone) which was
acquired in July, 1995.
Other revenue increased $5.8 million or 62%, as a result of
increased management fees from money market and mutual fund products
that the firm distributes, and from increased IRA custodial fees.
Compensation costs increased 45% ($40.6 million) compared to the
same period last year. Commissions, sales bonuses, sales incentives
and profit sharing provisions earned by Investment Representatives
were higher due to increased revenues and net income. Salaries and
wages earned by non-sales personnel were higher during the period due
to increases in personnel necessary to support an increased sales
force.
Interest expense declined as the Partnership's borrowings were
lower during the first quarter of 1996. Interest expense includes
interest paid on deposit instruments by Boone.
Of the Partnership's remaining expenses, the most significant
changes were seen in occupancy, equipment, communications and data
processing expenses in order to support the Partnership's strategy of
implementing new technology and expanding its locations.
<PAGE>
LIQUIDITY AND CAPITAL ADEQUACY
The Partnership's equity capital at March 29, 1996, was $56.5
million compared to $248.3 million as of March 31, 1995. General
partnership capital increased $22 million due to retention of earnings
and to an increase in distributable profits. Subordinated limited
partnership capital increased $6.1 million due to capital
contributions and an increase in distributable profits. Limited
partnership capital increased $38.7 million primarily from a $39.7
million Limited Partnership offering in October, 1995, an increase in
distributable profits, and offset by $2 million of partnership
redemptions.
At March 29, 1996, the Partnership had $100.8 million in cash and
cash equivalents. Lines of credit are in place at ten banks
aggregating $570 million ($545 million of which are through
uncommitted lines of credit). Actual borrowing availability is
primarily based on securities owned and customers' margin securities
which serve as collateral for the loans.
<PAGE>
A substantial portion of the Partnership's assets are primarily
liquid, consisting mainly of cash and assets readily convertible into
cash. These assets are financed primarily by customer credit
balances, equity capital, bank lines of credit and other payables.
The Partnership believes that the liquidity provided by existing cash
balances and borrowing arrangements will be sufficient to meet the
Partnership capital and liquidity requirements.
CASH FLOWS
For the Quarter ended March 29, 1996, cash and cash equivalents
increased $56.7 million. Cash flows from operating activities
provided $111 million, primarily attributable to net income and
decreases in securities owned, net receivables from customers, and
other assets, adjusted for depreciation and amortization. Investing
activities used $6 million for the purchase of fixed assets. Cash
flows from financing activities used $48 million primarily to decrease
bank loans, repay long-term debt and fund withdrawals and
distributions from partnership capital.
There were no material changes in the partnership's overall
financial condition during the three months ended March 29, 1996,
compared with the three months ended March 31, 1995. The
Partnership's balance sheet is comprised primarily of cash and assets
readily convertible into cash. Securities inventories are carried at
market values and are readily marketable. Customer margin accounts
are collateralized by marketable securities. Other customer
receivables and receivables and payables with other broker/dealers
normally settle on a current basis. Liabilities, including certain
amounts payable to customers, checks, accounts payable and accrued
expenses are sources of funds to the Partnership. These liabilities,
to the extent not utilized to finance assets, are available to meet
liquidity needs and provide funds for short term investments, which
<PAGE>
favorably impacts profitability.
The Partnership's growth in recent years has been financed through
sales of limited partnership interests to its employees, retention of
earnings, and private placements of long-term and subordinated debt.
The Partnership's principal subsidiary, Edward D. Jones & Co.,
L.P., ("EDJ") as a securities broker/dealer, is subject to the
Securities and Exchange Commission regulations requiring EDJ to
maintain certain liquidity and capital standards. EDJ has been in
compliance with these regulations.
The Partnership's subsidiary, Boone National Savings and Loan
Association, F.A. (Boone), a Federally-chartered stock savings and
loan association, is required under federal regulations to maintain
specified levels of liquidity and capital standards. Boone has been
in compliance with these regulations.
<PAGE>
THE JONES FINANCIAL COMPANIES, A LIMITED PARTNERSHIP
Item 1: Legal Proceedings
There have been no material changes in the legal proceedings
previously reported.
Item 5: Other Information
None
Item 6: Exhibits and Reports on Form 8-K
(a) Exhibits
Reference is made to the Exhibit Index contained hereinafter.
(b) Reports on Form 8-K
No reports were filed on Form 8-K for the quarter ended March 29, 1996.
<PAGE>
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, A LIMITED PARTNERSHIP
(Registrant)
Dated: May 10, 1996 /s/ John W. Bachmann
_____________________
John W. Bachmann
Managing Partner
Dated: May 10, 1996 /s/ Steven Novik
_____________________
Steven Novik
Chief Financial Officer
<PAGE>
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, A LIMITED PARTNERSHIP
(Registrant)
Dated: May 10, 1996
_____________________
John W. Bachmann
Managing Partner
Dated: May 10, 1996
_____________________
Steven Novik
Chief Financial Officer
<PAGE>
EXHIBIT INDEX
THE JONES FINANCIAL COMPANIES, A LIMITED PARTNERSHIP
For the quarter ended March 29, 1996
Exhibit No. Description Page
27.0 Financial Data Schedule (provided
for the Securities and Exchange
Commission only)
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<TABLE> <S> <C>
<ARTICLE> BD
<LEGEND>
This schedule contains summary financial information extracted from the
financial statements for The Jones Financial Companies for the quarter
ended March 29, 1996 and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<CIK> 0000815917
<NAME> THE JONES FINANCIAL COMPANIES, A LIMITED PARTNERSHIP
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-29-1996
<EXCHANGE-RATE> 1
<CASH> 100,844
<RECEIVABLES> 495,206
<SECURITIES-RESALE> 0
<SECURITIES-BORROWED> 14,067
<INSTRUMENTS-OWNED> 172,994
<PP&E> 144,838
<TOTAL-ASSETS> 1,051,635
<SHORT-TERM> 1,501
<PAYABLES> 401,830
<REPOS-SOLD> 0
<SECURITIES-LOANED> 3,810
<INSTRUMENTS-SOLD> 16,780
<LONG-TERM> 190,001
0
0
<COMMON> 0
<OTHER-SE> 256,499
<TOTAL-LIABILITY-AND-EQUITY> 1,051,635
<TRADING-REVENUE> 0
<INTEREST-DIVIDENDS> 15,002
<COMMISSIONS> 187,615
<INVESTMENT-BANKING-REVENUES> 9,278
<FEE-REVENUE> 15,214
<INTEREST-EXPENSE> 7,723
<COMPENSATION> 130,927
<INCOME-PRETAX> 23,223
<INCOME-PRE-EXTRAORDINARY> 23,223
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 23,223
<EPS-PRIMARY> 0
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