<PAGE>
 
                                                            EXHIBIT 1
                                                            Continued


                                     



2.  SUMMARY OF SIGNIFICANT
    ACCOUNTING POLICIES:
    ----------------------

Basis of accounting
- -------------------

The financial statements of the Master Trust are presented on the accrual basis
of accounting.  The accounts of the Master Trust are maintained on the cash
basis and are adjusted to the accrual basis each fiscal year-end for financial
reporting purposes.

Investments
- -----------

All investments have been recorded in the financial statements at their current
market value as of the respective fiscal year-end.

Administrative Expenses
- -----------------------

For the 1993 and 1992 plan years, all administrative expenses including trustee,
insurance, investment consultants, legal and audit fees were paid by the Master
Trust.

Federal Income Taxes
- --------------------

The Company obtained its latest determination letter during 1987, in which the
Internal Revenue Service stated that the participating plans, as then designed,
were in compliance with the applicable requirements of the Internal Revenue
Code.  The participating plans have been amended since receiving the
determination letter.  However, the Committee and the Company's tax counsel
believe that the plans are currently designed and being operated in compliance
with the applicable requirements of the Internal Revenue Code.  Therefore, they
believe that the plans were qualified and the related trust was tax-exempt as of
the financial statement date.

3.  SUBSEQUENT EVENT:
    -----------------

Effective September 30, 1992, Zapata terminated agreements with Arethusa
(Off-Shore) Limited (Arethusa) and its subsidiaries pursuant to which Zapata
managed the operation of Arethusa's rigs.  In connection therewith, Arethusa
agreed to establish a profit-sharing plan into which Zapata will transfer
participant account balances with respect to certain employees who terminated
their employment with Zapata and became employees of Arethusa.  Such transfer
was accomplished in October 1993 after Arethusa established a plan and received
a favorable determination letter from the Internal Revenue Service.  The account
balances for participants in the Zapata Plan who are employees of Arethusa are
included in the Zapata Plan financial statements as of September 30, 1993 and
1992.  There were 492 and 509 participants, respectively, who were employees of
Arethusa with aggregate account balances of $8,428,947 and $9,706,736 at
September 30, 1993 and 1992, respectively.  In October 1993, the aggregate
account balances of the participants who were employees of Arethusa were
transferred to the Arethusa profit-sharing plan.

                                     F-19