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In August 1995, the Company purchased 4,189,298 shares, or 31%, of the common
stock of Envirodyne Industries, Inc. ("Envirodyne") for $18.8 million from a
trust controlled by Malcolm Glazer, Chairman of the Board of the Company and,
through his beneficial ownership of a trust, a major stockholder of the
Company. Mr. Glazer is also a director of Envirodyne. Such shares represented
all of Mr. Glazer's ownership interest in Envirodyne. The Company paid the
purchase price by issuing a subordinated promissory note bearing interest at
the prime rate and maturing in August 1997, subject to prepayment at the
Company's option. The Company has since prepaid approximately $15.6 million on
the promissory note. Envirodyne is a major supplier of food packaging products
and food service supplies and is a leading worldwide producer of cellulosic
casings used in the preparation of packaging of processed meat products. It is
the world's second largest producer of heat shrinkable plastic bags and
specialty films for packaging and preserving fresh and processed meat products,
poultry and cheeses. Envirodyne is also a leading domestic producer of (i)
disposable plastic cutlery, drinking straws, custom dining kits and related
products and (ii) thermo-formed and injection-molded plastic containers and
horticultural trays and inserts. The Company may continue to evaluate the
acquisition of additional shares of Envirodyne common stock or proposing a
merger with, or acquisition of, Envirodyne in the future, although the Company
currently has no plans or proposals to do so.
The Company sold its remaining 673,077 shares of Tidewater Inc. ("Tidewater")
common stock in fiscal 1995. Zapata sold 3.5 million and 4.1 million shares of
Tidewater common stock in 1993 and 1994, respectively.
HISTORICAL CONTRIBUTIONS OF MAJOR DIVISIONS
The following table summarizes historical revenues, operating results (before
net interest expense, other income and income taxes), identifiable assets,
depreciation, depletion and amortization and capital expenditures for the
Company's continuing operations, by major division, for the periods indicated.
As a result of the decision to sell the natural gas compression and natural gas
gathering, processing and marketing operations, the Company's financial
statements have been restated in 1995 to reflect these operations as
discontinued operations, and therefore are not included below.
<TABLE>
<CAPTION>
OPERATING DEPRECIATION,
AS OF OR FOR THE YEAR INCOME IDENTIFIABLE DEPLETION AND CAPITAL
ENDED SEPTEMBER 30, REVENUES (LOSS) ASSETS AMORTIZATION EXPENDITURES
--------------------- -------- --------- ------------ ------------- ------------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
1995
Marine protein.......... $ 94,959 $ (6,437)(1) $ 85,012 $14,977(1) $ 5,573
Oil and gas............. 8,109 658 13,571 2,856 1,767
Corporate............... (3,441) 38,914 115 1
-------- -------- -------- ------- -------
$103,068 $ (9,220) $137,497 $17,948 $ 7,341
======== ======== ======== ======= =======
1994
Marine protein.......... $ 96,614 $ 5,445 $ 87,565 $ 4,535 $ 3,671
Oil and gas............. 12,549 (28,285)(3) 20,062 33,770(3) 11,792
Corporate............... (8,767) 44,044(2) 2,321 67
-------- -------- -------- ------- -------
$109,163 $(31,607) $151,671 $40,626 $15,530
======== ======== ======== ======= =======
1993
Marine protein.......... $ 58,565 $ 4,296 $ 92,728 $ 4,510 $ 1,477
Oil and gas............. 20,189 6,032 41,630 7,688 1,327
Corporate............... (6,769) 169,888(2) 378 8
-------- -------- -------- ------- -------
$ 78,754 $ 3,559 $304,246 $12,576 $ 2,812
======== ======== ======== ======= =======
</TABLE>
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(1) Includes a $12.3 million provision for asset impairment to reduce the
marine protein assets to their fair market value as a result of adopting
Statement of Financial Accounting Standards No. 121.
2
