<PAGE>
Revenues and operating results for fiscal 1995, 1994 and 1993 are presented
in the following table by major category, in thousands.
<TABLE>
<CAPTION>
REVENUES OPERATING RESULTS
------------------------- -------------------------
1995 1994 1993 1995 1994 1993
------- -------- -------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Gathering and Processing... $18,080 $ 22,867 $ 11,671 $ 442 $ 718 $ 427
NGL Marketing.............. 49,749 133,274 174,620 21 703 1,345
Selling & Administrative... -- -- -- (1,193) (2,484) (2,324)
------- -------- -------- ------- ------- -------
$67,829 $156,141 $186,291 $ (730) $(1,063) $ (552)
======= ======== ======== ======= ======= =======
</TABLE>
For fiscal 1995, gathering and processing revenues and operating results were
lower than the prior year as a result of the negative impact of lower natural
gas prices. Marketing revenues and operating results declined in fiscal 1995 as
compared to 1994, due to the Company's decision to reduce its natural gas
trading activities.
For fiscal 1994, gathering and processing revenues and operating results
increased as a result of the expansion of the division's gathering and
processing operations during fiscal 1994 and 1993 while marketing revenues and
operating results declined primarily due to the Company's decision to reduce
its natural gas trading activities.
RECENTLY ISSUED ACCOUNTING STANDARDS
In April 1995, Zapata adopted SFAS 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed Of," which
established accounting standards for the impairment of long-lived assets,
certain identifiable intangibles, and goodwill related to those assets to be
held and used and for long-lived assets and certain identifiable intangibles to
be disposed of. As a result of adopting SFAS 121 in April 1995 the Company
recorded a $12.3 million pretax provision for asset impairment to reduce its
marine protein assets to their estimated fair market value. The fair market
value of the marine protein assets was determined based upon the highest third-
party competitive bid that had been received by the Company.
In October 1995, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 123, "Accounting for Stock Based
Compensation" ("SFAS 123"). The Company does not intend to adopt the
recognition provisions of the statement but will adopt the disclosure
requirements in fiscal year 1997. The Company does not expect that the adoption
of SFAS 123's disclosure requirements will have a significant effect on the
Company's financial statements.
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