Harbinger Group Inc.
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10-K
HRG GROUP, INC. filed this Form 10-K on 03/28/2002
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<PAGE>
                               ZAPATA CORPORATION
 
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
 
required to be classified in one of three categories: trading,
available-for-sale, or held-to-maturity. The Company's investments in debt
securities at December 31, 2000 were classified under SFAS 115 as available-
for-sale. Such securities were recorded at fair value and unrealized holding
gains and losses, net of the related tax effect, if any, were not reflected in
earnings but were reported as a separate component of other comprehensive (loss)
income until realized. At each reporting date, the Company considered whether
market value declines below the cost of available for sale or held to maturity
securities are "other than temporary." If deemed "other than temporary" such
declines would be recognized as realized losses. Realized gains and losses are
determined on the specific identification method and are reflected in income.
 
  ACCOUNTING FOR THE IMPAIRMENT OF LONG-LIVED ASSETS
 
     The Company accounts for impairment of long-lived assets in accordance with
Statement of Financial Accounting Standards ("SFAS") No. 121, "Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed
of " which was issued in March 1995. SFAS No. 121 requires that long-lived
assets be reviewed for impairment whenever events or changes in circumstances
indicate that the book value of the asset may not be recoverable. The Company
evaluates at each balance sheet date whether events and circumstances have
occurred that indicate possible operational impairment. In accordance with SFAS
No. 121, the Company uses an estimate of the future undiscounted net cash flows
of the related asset or asset grouping over the remaining life in measuring
whether its operating assets are recoverable.
 
  PROPERTY, PLANT AND EQUIPMENT
 
     Property and equipment are recorded at cost and depreciated over the
estimated useful lives of the assets using the straight-line method. Estimated
useful lives of assets acquired, determined as of the date of acquisition, are
as follows:
 

<Table>
<Caption>
                                                               USEFUL LIVES
                                                                 (YEARS)
                                                               ------------
<S>                                                            <C>
Fishing vessels and fish processing plants..................      15-20
Computers, purchased software, furniture and fixtures.......       3-10
Internally developed software...............................          3
</Table>

 
     Replacements and major improvements are capitalized; maintenance and
repairs are charged to expense as incurred. Upon sale or retirement, the costs
and related accumulated depreciation are eliminated from the accounts. Any
resulting gains or losses are included in the statement of operations.
 
  PENSION PLANS
 
     Annual costs of pension plans are determined actuarially based on SFAS No.
87, "Employers' Accounting for Pensions." The Company's policy is to fund its
pension plans at amounts not less than the minimum requirements of the Employee
Retirement Income Security Act of 1974. In Fiscal 1999, the Company adopted SFAS
No. 132, "Employers' Disclosures about Pensions and Other Postretirement
Benefits." SFAS No. 132 revised and standardized the disclosure requirements for
pensions and other postretirement benefit plans to the extent practicable. It
did not change the measurement or recognition of these plans.
 
  COMPREHENSIVE INCOME
 
     The Company adopted SFAS No. 130, "Reporting Comprehensive Income" in 1999
which established standards for the reporting and display of comprehensive
income and its components in a full set of comparative general-purpose financial
statements. SFAS 130 requires net unrealized holding gains or losses, which
prior to adoption were reported separately in stockholders' equity, to be
included in other comprehen-
 
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