<PAGE>
 
                               ZAPATA CORPORATION
 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
NOTE 10. INCOME TAXES--(CONTINUED)
 
  Temporary differences and tax credit carryforwards that gave rise to
significant portions of deferred tax assets and liabilities are as follows:
 

<TABLE>
<CAPTION>
                                     SEPTEMBER 30,
                                    ----------------
                                     1995     1994
                                    -------  -------
                                    (IN THOUSANDS)
      <S>                           <C>      <C>
      Deferred Tax Assets:
        Asset write-downs not yet
         deductible...............  $ 4,956  $ 5,150
        Net operating loss
         carryforwards............    4,246       --
        Investment tax credit
         carryforwards............   17,490   17,639
        Alternative minimum tax
         credit carryforwards.....   10,927   11,683
        Other.....................    2,404    2,555
                                    -------  -------
          Total deferred tax
           assets.................   40,023   37,027
        Valuation allowance.......  (16,857) (19,429)
                                    -------  -------
          Net deferred tax assets.   23,166   17,598
                                    -------  -------
      Deferred Tax Liabilities:
        Property and equipment....   (9,628)  (3,477)
        Basis difference on stock
         investment...............       --   (1,650)
        Pension...................   (3,554)  (3,356)
        Unrealized investment gain
         on Tidewater common
         stock....................       --   (2,302)
        Other.....................   (3,737)  (3,898)
                                    -------  -------
          Total deferred tax
           liabilities............  (16,919) (14,683)
                                    -------  -------
          Net deferred tax asset..  $ 6,247  $ 2,915
                                    =======  =======
</TABLE>

 
  The valuation allowance represents managements estimates of tax carryforwards
that may not be ultimately utilized given current facts and circumstances.
 
NOTE 11. COMMITMENTS AND CONTINGENCIES
 
 Operating leases payable
 
  Future minimum payments under non-cancelable operating lease obligations
aggregate $5.8 million. The total future minimum rental payments have not been
reduced by $4.1 million of sublease rentals to be received in the future under
noncancelable subleases. Future minimum payments, net of sublease rentals, for
the five years ending September 30, 2000 are:
 

<TABLE>
<CAPTION>
                                                        1996 1997 1998 1999 2000
                                                        ---- ---- ---- ---- ----
                                                             (IN THOUSANDS)
      <S>                                               <C>  <C>  <C>  <C>  <C>
      Lease obligations................................ $348 $325 $310 $310 $303
</TABLE>

 
  Rental expenses for operating leases were $1.8 million, $2.3 million and $2.4
million in 1995, 1994 and 1993, respectively.
 
 Litigation
 
  On August 11, 1995, a purported derivative lawsuit was filed in a case styled
Harwin v. Glazer, et al., in the Court of Chancery of the State of Delaware in
and for New Castle County. The complaint names the Company and each of its
directors as defendants and generally alleges that the Company's directors
engaged
 
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