<PAGE>
ZAPATA CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
NOTE 2. DISCONTINUED MARINE PROTEIN OPERATIONS SUBSEQUENTLY RETAINED--
(CONTINUED)
<TABLE>
<CAPTION>
SEPTEMBER 30,
1994
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<S> <C>
FINANCIAL POSITION
Current assets............................................ $49.0
Investments and other..................................... 8.0
Property and equipment, net............................... 30.5
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87.5
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Debt...................................................... 9.7
Other liabilities and deferred income taxes............... 26.5
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36.2
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Net book value.......................................... $51.3
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</TABLE>
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* Net income (loss) includes allocations of interest expense on general
corporate debt of $2.5 million in 1994 and $3.9 million in 1993. Interest
expense was allocated to discontinued operations based on a ratio of net
assets to be sold to the sum of total net assets of the Company plus general
corporate debt.
NOTE 3. DISPOSITION OF DOMESTIC OIL & GAS ASSETS
In September 1994, the Board of Directors determined that the Company would
immediately undertake efforts to sell its U.S. natural gas producing
properties. Zapata's Bolivian oil and gas operations were not impacted by this
decision. The six properties in the Gulf of Mexico, representing Zapata's
domestic oil and gas producing operations, were sold during fiscal 1995. Zapata
received cash of $4.0 million and an $8.9 million production payment and other
receivable. No gain or loss was recorded from the sales.
The production payment and other receivable received in partial consideration
for the sale of the domestic oil and gas properties consists of a $6.1 million
production payment receivable and a $2.8 million receivable related to future
proceeds from a revenue sharing agreement. The Company will begin collecting
the production payment receivable only after certain cumulative production
volumes have been achieved; collection will cease upon the earlier of (i)
receipt of $13.5 million or (ii) when the designated oil and gas reserves have
been depleted. The $2.8 million receivable related to the revenue sharing
agreement will be collected based on payments made by a third party for the use
of a platform and related facilities. Receipts under the revenue sharing
agreement are expected to begin in 1996 and will cease at the earlier of (i)
the receipt of $6.0 million or (ii) the cessation of payments made by a third
party for usage of the platform and related facilities. The receivable's
estimated fair market value of $8.9 million is based on discounted expected
cash flows and approximates book value at September 30, 1995.
Following is a summary of the results of operations of the Company's domestic
oil and gas operations (amounts in millions):
<TABLE>
<CAPTION>
YEAR ENDED
SEPTEMBER 30,
1995
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<S> <C>
Revenues.................................................... $ 5.4
Expenses.................................................... (9.2)
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Loss before income taxes.................................... $(3.8)
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</TABLE>
34
