EFTA01752282

From: Richard Joslin Sent: Saturday, December 28, 2013 4:57 PM To: Jeffrey Epstein Cc: Eileen Alexanderson Subject: Apollo AMH distributed $1.2B in 2007. AMH had the option to treat e=ther 1) treat the distribution as entirely debt financed (partners trace 1=0% of cash) or 2) trace expenditures inside of AMH FY 2007 and allocate =nterest expense to the manner of AMH's expenditures (ignoring any debt=distributed). AMH To the extent the expendtures inside AMH we=e less than the debt financed distribution, the excess of amount of debt d=stributed over the expendtitures traces by AMH would be traced by the use =y the partners. Looking at the 2008 S-1 filed, the AOG showed compensat=on expenses greater than $1.2B however management company income/advisory =evenue was $340MM. Point is it is hard to discern what were AMH expendi=ures exactly in 2007. If AMH expenditures were substantial then much of=the interest expense would ostensibly be management company related since =MH expenditures are such. Based on 2012 K-1 reporting for the interest, Apollo treated the inter=st as "investment interest" and reported on the K- 1 line 13H. =AO Notice 89-35 which is IRS guidance on debt financed distributions indic=tes that under the tracing approach, interest expense is separately stated=as an other deduction K-1 Line 13W. Given that AMH is operating an advi=ory business/ fund management, the characterization as solely investment i= to be noted, but most notable is that no amount is reported as trade or b=siness, Clearly the reporting follows the second method above which=A0I would maintain is the option selected. The only item for review is =MH's gross expenditures in 2007 (pre and post distribution). Richard Joslin Black Family Partners, LP c/o Apollo Management 9 W. 57th St New York, NY 10019 1 EFTA_R1_00050861 EFTA01752282