109177--4/5/2006--ZAPATA

related topics

{cost, contract, operation}

{cost, regulation, environmental}

{acquisition, growth, future}

{investment, property, distribution}

{tax, income, asset}

{stock, price, share}

{stock, price, operating}

{debt, indebtedness, cash}

{operation, natural, condition}

{financial, litigation, operation}

{property, intellectual, protect}

{personnel, key, retain}

We may not find a buyer for our ownership interest in Omega Protein. Our portfolio of investments may cause the Company to be classified as an Investment Company. Since we already meet the ownership criteria of the personal holding company rules, we may have to pay a punitive tax if Zapata Corporate generates passive income in excess of operating expenses. A change of ownership could reduce the benefits associated with the Company s tax assets. Our company is majority-owned by the Malcolm I. Glazer Family Limited Partnership. As a result of this ownership, we are a controlled company within the meaning of the New York Stock Exchange rules and are exempt from certain corporate governance requirements. The exercise of our subsidiaries outstanding stock options could significantly dilute our ownership in these subsidiaries. The carrying value of our prepaid pension asset could be significantly reduced if we terminate our pension plan. Litigation defense and settlement costs may be material. Indemnification agreements with former subsidiaries or related parties may cause us to spend our capital resources to meet obligations related to the agreements. Future acquisitions may not require a shareholder vote and may be material to the Company. We may not be successful in identifying any suitable future acquisition opportunities. Omega is dependent on a single natural resource and may not be able to catch the amount of menhaden that it requires to operate profitably. Omega s operations are geographically concentrated in the Gulf of Mexico where they are susceptible to regional adverse weather patterns such as hurricanes. The costs of energy may materially impact Omega s business. Fluctuation in oil yields derived from Omega s fish catch could impact Omega s ability to operate profitably. Laws or regulations that restrict or prohibit menhaden or purse seine fishing operations could adversely affect Omega s ability to operate. Omega s fish catch may be impacted by restrictions on its spotter aircraft. Worldwide supply and demand relationships, which are beyond Omega s control, influence the prices that Omega receives for many of its products and may from time to time result in low prices for many of Omega s products. New laws or regulation regarding contaminants in fish oil or fish meal may increase Omega s cost of production or cause Omega to lose business. Three of Omega s four operating plants were severely damaged by Hurricanes Katrina and Rita and Omega has had to undertake substantial rebuilding efforts. Omega s plan to operate 31 vessels out of two Gulf of Mexico plants in 2006 rather than three may be unsuccessful. Omega s strategy to expand into the food grade oils market may be unsuccessful. Omega s quarterly operating results will fluctuate. Omega s business is subject to significant competition, and some competitors have significantly greater financial resources and more extensive and diversified operations than Omega. Omega s foreign customers are subject to disruption typical to foreign countries. Omega may undertake acquisitions that are unsuccessful and Omega s inability to control the inherent risks of acquiring businesses could adversely affect its business, results of operations and financial condition operations. Omega s failure to comply with federal U.S. citizenship ownership requirements may prevent it from harvesting menhaden in the U.S. jurisdictional waters. Omega may not be able to recruit, train and retain qualified marine personnel in sufficient numbers. Omega s Credit Facility and other Fisheries Finance Program loan agreements contain covenants and restrictions that may limit Omega s financial flexibility.

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109177--4/5/2006--ZAPATA_CORP