<PAGE>
 
                               ZAPATA CORPORATION
                 CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                 ----------------------------------------------
                                 (in thousands)

<TABLE>
<CAPTION>
 
                                                           THREE MONTHS ENDED
                                                              DECEMBER 31,
                                                           ------------------ 
                                                             1995       1994
                                                           --------   -------
<S>                                                        <C>        <C> 
Cash flow provided (used) by operating activities:
  Continuing operations:
    Net income from continuing operations                   $  1,089   $   275
                                                            --------   -------
    Adjustments to reconcile net income to net cash 
     provided (used) by operating activities:
      Depreciation and amortization                              775     1,679
      Gain on sale of assets                                     ---      (457)
      Changes in other assets and liabilities                  4,831    (4,859)
                                                            --------   -------
        Total adjustments                                      5,606    (3,637)
                                                            --------   -------
      Cash flow provided (used) by continuing operations       6,695    (3,362)
                                                            --------   -------
 
  Discontinued operations:
    Income from discontinued operations                       13,186       473
    Gain on sale of assets, net of taxes                     (13,228)      ---
    Change in net assets of discontinued operations              ---    (2,572)
                                                            --------   -------
    Cash flow used by discontinued operations                    (42)   (2,099)
                                                            --------   -------
      Net cash provided (used) by operating activities         6,653    (5,461)
                                                            --------   -------
 
Cash flow provided (used) by investing activities:
 Proceeds from dispositions                                  104,689     1,777
 Proceeds from note receivable                                   ---       920
 Capital expenditures                                           (675)   (1,060)
                                                            --------   -------
        Net cash provided by investing activities            104,014     1,637
                                                            --------   -------
 
Cash flow used by financing activities:
 Repayments of long-term obligations, net                    (11,080)     (105)
 Preferred stock redemption and common stock buy-backs           ---    (2,758)
 Dividend payments                                               ---    (1,153)
                                                            --------   -------
        Net cash used by financing activities                (11,080)   (4,016)
                                                            --------   -------
 
Net increase (decrease) in cash and cash equivalents          99,587    (7,840)
Cash and cash equivalents at beginning of period               2,488     9,717
                                                            --------   -------
Cash and cash equivalents at end of period                  $102,075   $ 1,877
                                                            ========   =======
 
</TABLE>

    The accompanying notes are an integral part of the financial statements.

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