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                              MANAGEMENT'S REPORT
 
To the Stockholders, Zapata Corporation:
 
  The management of Zapata Corporation has prepared and is responsible for the
financial statements and related financial data contained in this report. The
financial statements were prepared in accordance with generally accepted
accounting principles and by necessity include certain amounts determined using
management's best estimates and judgements.
 
  Management is responsible for and maintains accounting and internal control
systems which provide reasonable assurance that, among other things, assets are
safeguarded and transactions are properly authorized and recorded to permit the
preparation of financial statements in accordance with generally accepted
accounting principles. The accounting and internal control systems are
supported by written policies and procedures. Management believes that as of
this date, the Company's system of internal controls is adequate to accomplish
the objectives discussed herein.
 
  The financial statements have been audited by independent public accountants
nominated by the Board of Directors and elected by the stockholders. Their
audits were made in accordance with generally accepted auditing standards and
accordingly, they have obtained an overall understanding of the Company's
system of internal accounting controls and have conducted other tests as they
consider necessary to support their opinion on the financial statements.
 
  The Board of Directors, through its Audit Committee composed exclusively of
outside directors, is responsible for reviewing and monitoring the financial
statements and accounting practices. The Audit Committee meets periodically
with management and the independent public accountants to ensure that each is
properly discharging its duties. The independent public accountants have full
and free access to, and meet with, the Audit Committee, with or without the
presence of management.
 
                                          Malcolm I. Glazer
                                          Chairman, President and Chief
                                           Executive Officer
 
                                          Lamar C. McIntyre
                                          Vice President, Chief Financial
                                           Officer,
                                          and Treasurer
 
December 29, 1994
 
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