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ZAPATA CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
NOTE 6. UNCONSOLIDATED AFFILIATES
In August 1995, Zapata acquired 4,189,298 common shares of Envirodyne,
representing 31% of the outstanding common stock of Envirodyne, for $18.8
million from a trust controlled by Malcolm Glazer, Chairman of the Board of
Zapata and a director of Envirodyne. Zapata paid the purchase price by issuing
to the seller a subordinated promissory note bearing interest at prime and
maturing in August 1997, subject to prepayment at the Company's option.
Subsequently, the Company prepaid approximately $15.6 million on the promissory
note. Zapata follows the equity method of accounting for its investment in
Envirodyne. The difference between Zapata's share of Envirodyne's equity and
Zapata's recorded investment in Envirodyne is being amortized over 15 years. At
September 30, 1995, the unamortized balance of this difference was $19.3
million. The aggregate market value of Zapata's shares of Envirodyne's common
stock as of September 30, 1995 was $18.9 million based on the closing price of
$4.50 per publicly traded share on that date.
Due to the significance of the Company's investment, the unaudited financial
position and results of operations of Envirodyne are summarized below. The
financial statement information presented below for Envirodyne is based upon
its interim report for the quarter ended September 28, 1995 (unaudited, in
millions, except per share amounts):
ENVIRODYNE INDUSTRIES, INC.
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SEPTEMBER 28,
1995
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BALANCE SHEET
Current assets.............................................. $255.3
Other....................................................... 190.0
Property and equipment, net................................. 467.4
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Total assets.............................................. $912.7
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Current liabilities......................................... $129.8
Long-term debt.............................................. 529.7
Deferred income taxes and other............................. 132.1
Stockholders' equity........................................ 121.1
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Total liabilities and stockholders' equity................ $912.7
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THREE MONTHS
ENDED
SEPTEMBER 28,
1995
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INCOME STATEMENT
Revenues.................................................... $167.7
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Loss before income taxes.................................... $ (7.5)
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Net loss.................................................... $ (4.5)
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Net loss per share.......................................... $(0.33)
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In January 1992, Zapata exchanged its 34.7% interest in Zapata Gulf Marine
Corporation ("Zapata Gulf") for approximately 8.3 million shares of Tidewater
common stock. Zapata sold 673,077, 4.1 million and 3.5 million shares of its
Tidewater common stock in fiscal 1995, 1994 and 1993, respectively. Initially,
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