NOTE 3 – REVENUE

Revenue Recognition. The Partnership's revenue is recognized based on contracts with clients, mutual fund companies, insurance companies and other product providers. As a full-service brokerage firm, Edward Jones provides clients with custodial services, including safekeeping of client funds, collecting and disbursing funds from a client's account, and providing trade confirmations and account statements. The Partnership does not charge a separate fee for these services. Revenue is generally recognized in the same manner for both the U.S. and Canada segments. The Partnership classifies its revenue into the following categories:

Asset-based fee revenue – Revenue is derived from fees determined by the underlying value of client assets and includes advisory programs fees, service fees, and other asset-based fee revenue. The primary source of asset-based fee revenue is generated from program fees for investment advisory services provided within the Partnership’s advisory programs, including in the U.S., the Edward Jones Advisory Solutions® program (“Advisory Solutions”) and the Edward Jones Guided Solutions® program ("Guided Solutions") and, in Canada, the Edward Jones Portfolio Program® and the Edward Jones Guided Portfolios® program. Advisory program contracts outline the investment advisory services to be performed for a client under the contract and do not have a definite end date. Program fees are based on the average daily market value of client assets in the program and are charged to clients monthly and collected the following month. The investment advisory services performed in an advisory program contract are a series of distinct services that are substantially the same and have the same pattern of transfer to the client. As a result, the contract has one performance obligation and program fee revenue is recognized over time as clients simultaneously receive and consume the benefit from the investment advisory services performed by the Partnership.

The Partnership has selling agreements with mutual fund and insurance companies that allow the Partnership to sell that company's products to clients (see Trade revenue below for the associated commissions earned from clients). The selling agreements, along with the prospectuses for mutual funds, also allow the Partnership to earn service fees for providing certain ongoing distribution and marketing support services for that company's products which are held by Edward Jones clients. Service fees are generally based on the average daily market value of client assets held in a company's mutual fund or insurance product. For future service fees the Partnership may earn on existing client assets, market constraints prevent reasonably estimating the transaction price and estimates could result in significant revenue reversals. Thus, service fee revenue is recognized monthly at the time the market constraints have been removed, the transaction price is known and the services have been performed. Other asset-based fee revenue consists of revenue sharing, fund adviser fees, cash solutions and Trust Co. fees. The Partnership has agreements with clients or product providers to earn other asset-based fees for providing services, which generally include providing investment advice or service to clients or mutual funds, or marketing support or other services to product providers. Fees are generally based on asset values held in clients' accounts. The services performed for other asset-based fee contracts are a series of distinct services that are substantially the same and have the same pattern of transfer to the client. As a result, the contracts have one performance obligation and revenue is recognized over time as the customer simultaneously receives and consumes the benefit from the services performed by the Partnership. For both service fees and other asset-based fee revenue, revenue is collected monthly or quarterly based on the agreements and the agreements generally do not have a term. Due to the timing of receipt of information, the Partnership uses estimates in recording the accruals related to certain asset-based fees, which are based on historical trends and are adjusted to reflect market conditions for the period covered.

Account and activity fee revenue – Revenue is derived from fees based on the number of accounts or activity and includes shareholder accounting services fees, self-directed individual retirement account ("IRA") fees, and other activity-based fee revenue from clients, mutual fund companies and insurance companies. The Partnership has agreements with mutual fund companies for shareholder accounting services in which the Partnership performs certain transfer agent support services, which may include tracking client holdings, distributing dividends and shareholder information to clients, and responding to client inquiries. Shareholder accounting services fees are based on the number of mutual fund positions held by clients and fees are collected monthly or quarterly based on the agreements, which generally do not have a term. The transfer agent support services performed in a shareholder accounting services contract are a series of distinct services that are substantially the same and have the same pattern of transfer to the client. As a result, the contract has one performance obligation and revenue is recognized over time as the mutual fund company simultaneously receives and consumes the benefit from the services performed by the Partnership. The Partnership also earns retirement account fees for providing reporting services pursuant to the Internal Revenue Code and account maintenance services. Clients are charged an annual fee per account for these services. Revenue is recognized over a one-year period as the services are provided, which are simultaneously received and consumed by the client.

Trade revenue – Revenue is derived from fees based on client transactions and includes commissions and principal transactions. The primary source of trade revenue is commissions revenue which consists of charges to clients for the purchase or sale of mutual fund shares and equities and the purchase of insurance products. Principal transactions revenue primarily results from the Partnership’s distribution of and participation in principal trading activities in municipal obligations, over-the-counter corporate obligations, and certificates of deposit. Principal transactions are generally entered into by the Partnership to facilitate a client's buy or sell order for certain fixed income products. Brokerage contracts outline the transaction services to be performed for a client under the contract and do not have a term. The transaction charge to clients varies based on the product and size of the trade. The Partnership also has contracts with various companies which allow the Partnership to sell that company's products to clients and receive a certain commission. Trade revenue is recognized at a point in time when the transaction is placed, or trade date. On trade date the client obtains control through a right to either own a security for a purchase or receive payment for a sale. Transaction charges are received no later than settlement date.

Interest and dividends revenue – Interest revenue is earned on client margin (loan) account balances. In addition, interest revenue is earned on cash and cash equivalents, cash and investments segregated under federal regulations, securities purchased under agreements to resell and Partnership loans, none of which is based on revenue contracts with clients.

Other forms of revenue are recorded on an accrual basis. Activity or transaction-based revenue is recorded at a point in time when the transaction occurs and asset-based revenue is recorded over time as the services are provided.

As of September 28, 2018 and December 31, 2017, $400 and $346, respectively, of the receivable from clients balance and $268 and $279, respectively, of the receivable from mutual funds, insurance companies and other balance related to revenue contracts with customers.

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

	Three Months Ended September 28, 2018						Three Months Ended September 29, 2017
	U.S.		Canada		Total		U.S.		Canada			Total
Revenue
Fee revenue:
Asset-based fee revenue:
Advisory programs fees	$	1,086	$	16	$	1,102	$	878	$	11		$	889
Service fees		314		22		336		294		20			314
Other asset-based fees		143		—		143		113		—			113
Total asset-based fee revenue		1,543		38		1,581		1,285		31			1,316
Account and activity fee revenue:
Shareholder accounting services fees		107		—		107		102		—			102
Other account and activity fee revenue		59		3		62		59		3			62
Total account and activity fee revenue		166		3		169		161		3			164
Total fee revenue		1,709		41		1,750		1,446		34			1,480
Trade revenue:
Commissions		325		11		336		271		12			283
Principal transactions		30		2		32		30		1			31
Total trade revenue		355		13		368		301		13			314
Net interest and dividends revenue		60		2		62		43		1			44
Other revenue		7		4		11		15		(1	)		14
Net revenue	$	2,131	$	60	$	2,191	$	1,805	$	47		$	1,852

	Nine Months Ended September 28, 2018						Nine Months Ended September 29, 2017
	U.S.		Canada		Total		U.S.		Canada			Total
Revenue
Fee revenue:
Asset-based fee revenue:
Advisory programs fees	$	3,093	$	43	$	3,136	$	2,350	$	29		$	2,379
Service fees		922		66		988		881		58			939
Other asset-based fees		411		—		411		330		—			330
Total asset-based fee revenue		4,426		109		4,535		3,561		87			3,648
Account and activity fee revenue:
Shareholder accounting services fees		325		—		325		312		—			312
Other account and activity fee revenue		175		10		185		188		9			197
Total account and activity fee revenue		500		10		510		500		9			509
Total fee revenue		4,926		119		5,045		4,061		96			4,157
Trade revenue:
Commissions		933		37		970		1,050		39			1,089
Principal transactions		98		4		102		108		3			111
Total trade revenue		1,031		41		1,072		1,158		42			1,200
Net interest and dividends revenue		159		6		165		125		3			128
Other revenue		25		9		34		43		3			46
Net revenue	$	6,141	$	175	$	6,316	$	5,387	$	144		$	5,531