ZAPATA CORPORATION NOTES TO FINANCIAL STATEMENTS
NOTE 1. FINANCIAL STATEMENTS
The condensed consolidated financial statements included herein have been
prepared by Zapata, without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission. The financial statements reflect all
adjustments which are, in the opinion of management, necessary to fairly present
such information. All such adjustments are of a normal recurring nature.
Although Zapata believes that the disclosures are adequate to make the
information presented not misleading, certain information and footnote
disclosures, including significant accounting policies, normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such rules and
regulations. It is suggested that these condensed financial statements be read
in conjunction with the financial statements and the notes thereto included in
Zapata's latest annual report on Form 10-K.
On December 8, 1994, Zapata announced that it would redeem the remaining
22,498 outstanding shares of the Company's $6 Cumulative Preferred Stock
(Preferred Stock). The Preferred Stock was redeemed at $100 a share.
NOTE 2. ACQUISITION
In November 1993, Zapata purchased the natural gas compression business of
Energy Industries, Inc. and certain other affiliated companies ("Energy
Industries"), as well as certain real estate used by the business ("Energy
Industries Acquisition"). The following pro forma information for Zapata for
the three months ended December 31, 1993 includes the historical results of
Zapata, adjusted for the results of Energy Industries as if the Energy
Industries Acquisition had been consummated on October 1, 1993 (unaudited) (in
thousands, except per share amounts).
Income from continuing operations before taxes 26,503
Income from continuing operations 17,209
Income per share from continuing operations 0.55
The pro forma adjustments to Zapata's results for the three months ended
December 31, 1993 to reflect the Energy Industries Acquisition increased
revenues by $6,014,000, as well as income before tax by $174,000. Additional
pro forma adjustments for the first three months of fiscal 1994 included the
elimination of $124,000 of various operating and administrative expenses that
were charged to Energy Industries from an affiliate, additional depreciation of
$120,000 and $41,000 of goodwill amortization, a reduction in net interest
expense of $161,000 related to notes receivable and payable that were not
acquired by Zapata and a federal tax provision of $104,000.
The pro forma amounts presented above may not be indicative of the results
that would have actually resulted if the transactions had occurred on the date
indicated or which may be obtained in the future.