<PAGE>
The oil and gas valuation provision more than offset the contribution from
Zapata's natural gas compression operations and improved marine protein results.
For the third quarter of fiscal 1994, the Company incurred an operating loss of
$16.1 million on revenues of $86.5 million which compared unfavorably to the
$569,000 operating loss on revenues of $58.2 million reported for the
corresponding fiscal 1993 period.
For the first nine months of fiscal 1994, Zapata's net income of $10.0
million equaled the $10.0 million of net income earned during the corresponding
1993 period. For the 1994 period, increased gains realized from the sales of
Tidewater common stock and lower interest expense mitigated the effects of the
oil & gas write-down. Revenues of $241.9 million and an operating loss of $12.6
million for the 1994 period compared to the 1993 period revenues of $201.0
million and operating income of $1.6 million.
NATURAL GAS COMPRESSION - In November 1993 Zapata purchased Energy Industries, a
participant in all segments of the natural gas compression industry. And, in
April 1994 Energy Industries acquired 41 additional compressors for $2.0
million. Energy Industries operates one of the ten largest rental fleets of
natural gas compressor packages in the United States. Its compressor fleet is
located in Texas, Louisiana, Arkansas, Oklahoma and New Mexico, as well as
offshore in the Gulf of Mexico.
Energy Industries primarily supplies natural gas compressor packages in
natural gas production and processing applications. In natural gas production
applications, natural gas compression is used to increase the flow rate of gas
wells with low reservoir pressures. In natural gas processing applications,
natural gas compression is used in the process of separating the various
hydrocarbon components of the wellhead natural gas stream. In interstate
natural gas pipeline applications, natural gas compression is used to increase
the pressure of natural gas from reservoir levels to interstate pipeline
standards. Energy Industries maintains an inventory of compressor and engine
components to support the fabrication, service and repair of natural gas
compressor packages.
The major segments of Energy Industries' natural gas compression revenues
and operating results for the quarter and eight month period ended June 30,
1994, in thousands, are identified below.
<TABLE>
<CAPTION>
Three Months Ended Eight Months Ended
June 30, 1994 June 30, 1994
-------------------- --------------------
Operating Operating
Revenues Results Revenues Results
-------- ---------- -------- ----------
<S> <C> <C> <C> <C>
Compressor Rental $ 5,163 $ 1,462 $12,066 $ 3,752
Fabrication and Sales 9,272 1,663 17,150 2,902
Parts & Service 5,187 1,107 14,123 2,826
Other 2,188 384 6,535 909
Selling & Administrative --- (2,156) --- (5,547)
------- ------- ------- -------
$21,810 $ 2,460 $49,874 $ 4,842
======= ======= ======= =======
</TABLE>
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