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

<TABLE>
<CAPTION> 

                                                            Nine Months Ended
                                                                 June 30,
                                                            ------------------
                                                              1995      1994
                                                            -------    -------
<S>                                                         <C>        <C> 
Cash flow provided (used) by operating activities:
  Continuing operations:
    Net income (loss) from continuing operations            $ (3,463)  $ 10,026 
                                                            --------   --------
    Adjustments to reconcile net income (loss) to
     net cash provided (used) by operating activities:
      Depreciation, amortization and valuation provisions     23,382     30,779
      Gain on sale of assets                                  (5,268)   (37,457)
      Changes in other assets and liabilities                 (6,009)    (6,282)
                                                            --------   --------
        Total adjustments                                     12,105    (12,960)
                                                            --------   --------
      Cash flow provided (used) by continuing operations       8,642     (2,934)
                                                            --------   --------
  Discontinued operations:
    Reversal of reserve for loss from discontinued
     operations                                                8,897         --
    Change in net assets of discontinued operations          (12,607)        --
                                                            --------   --------
      Cash flow used by discontinued operations               (3,710)        -- 
                                                            --------   --------
        Net cash provided (used) by operating activities       4,932     (2,934)
                                                            --------   --------
Cash flow provided (used) by investing activities:
  Proceeds from dispositions of investments and other         12,381     88,533
  Proceeds from restricted cash investments                      702     75,083 
  Proceeds from notes receivable                               5,495      1,061
  Business acquisitions, net of cash acquired                     --    (73,222)
  Capital expenditures                                       (18,339)   (20,049)
                                                            --------   -------- 
        Net cash provided by investing activities                239     71,406 
                                                            --------   -------- 
Cash flow used by financing activities:
  Borrowings                                                  12,864         --
  Principal payments of long-term obligations                (14,137)   (69,360)
  Preferred stock redemption and common stock buybacks       (11,758)    (2,245)
  Dividend payments                                           (1,153)      (404)
                                                            --------   -------- 
        Net cash used by financing activities                (14,184)   (72,009)
                                                            --------   --------
Net decrease in cash and cash equivalents                     (9,013)    (3,537)
Cash and cash equivalents at beginning of period              13,094     15,273
                                                            --------   --------
Cash and cash equivalents at end of period                  $  4,081   $ 11,736
                                                            ========   ========
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   The accompanying notes are an integral part of the financial statements.

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