<PAGE>
- - --------------------------------------------------------------------------------
WEITZ SERIES FUND, INC.
BOARD OF DIRECTORS
Carroll E. Fredrickson
John W. Hancock
Richard D. Holland
Thomas R. Pansing, Jr.
Wallace R. Weitz
OFFICERS
Wallace R. Weitz, President
Mary K. Beerling, Vice-President & Secretary
Linda L. Lawson, Vice-President
Richard F. Lawson, Vice-President
INVESTMENT ADVISER
Wallace R. Weitz & Company
DISTRIBUTOR
Weitz Securities, Inc.
CUSTODIAN
Norwest Bank Nebraska, N.A.
TRANSFER AGENT AND DIVIDEND PAYING AGENT
Wallace R. Weitz & Company
This report has been prepared for the information of shareholders of Weitz
Series Fund, Inc. -- Value Portfolio and is not authorized for distribution to
prospective investors unless preceded or accompanied by a current prospectus
which describes the Fund's objectives, policies and other information.
VALUE PORTFOLIO
Q U A R T E R L Y
R E P O R T
DECEMBER 31, 1995
ONE PACIFIC PLACE, SUITE 600
1125 SOUTH 103 STREET
OMAHA, NEBRASKA 68124-6008
402-391-1980
800-232-4161
402-391-2125 FAX
<PAGE>
WEITZ SERIES FUND, INC. -- VALUE PORTFOLIO
PERFORMANCE SINCE INCEPTION
A long-term perspective on our fund's performance is shown below. The table
below shows how an investment of $25,000 in the Value Portfolio at its inception
would have grown over the years (after deducting all fees and expenses and
assuming reinvestment of all dividends). The table also sets forth average
annual total return data for the Value Portfolio for the one and five year
periods ended December 31, 1995, and for the period since inception, calculated
in accordance with SEC standardized formulas.
<TABLE>
<CAPTION>
VALUE OF VALUE OF VALUE OF
INITIAL CUMULATIVE CUMULATIVE TOTAL ANNUAL
$25,000 CAPITAL GAIN REINVESTED VALUE OF RATE OF
PERIOD ENDED INVESTMENT DISTRIBUTIONS DIVIDENDS SHARES RETURN
- - --------------- ---------- ------------- ---------- -------- -------
<S> <C> <C> <C> <C> <C>
May 9, 1986 $25,000 -- -- $ 25,000 --
Dec. 31, 1986 25,863 -- -- 25,863 3.5%*
Dec. 31, 1987 24,253 264 1,205 25,722 -0.5
Dec. 31, 1988 27,430 299 2,223 29,952 16.5
Dec. 31, 1989 30,763 2,103 3,701 36,567 22.1
Dec. 31, 1990 28,040 2,112 4,500 34,652 -5.2
Dec. 31, 1991 33,940 3,811 6,475 44,226 27.6
Dec. 31, 1992 36,350 6,019 7,884 50,253 13.6
Dec. 31, 1993 42,010 9,114 9,199 60,323 20.0
Dec. 31, 1994 36,075 10,414 7,899 54,388 -9.8
Dec. 31, 1995 45,955 17,447 11,855 75,257 38.4
</TABLE>
The Portfolio's average annual total return for the one and five year periods
ending December 31, 1995, and for the period since inception (May 9, 1986), was
38.4%, 16.8% and 12.1%, respectively. These returns assume redemption at the end
of each period.
Since inception, the total amount of capital gains distributions reinvested in
shares was $14,094, and the total amount of "income" distributions reinvested
was $8,015. This information represents past performance of the Portfolio and is
not indicative of future performance. The investment return and the principal
value of an investment will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than the original cost. Additional
information is available from Wallace R. Weitz & Co. at the address listed on
the front cover.
* Return is for the seven month period 5/9/86 through 12/31/86
1
<PAGE>
WEITZ SERIES FUND, INC. -- VALUE PORTFOLIO
DECEMBER 31, 1995 - QUARTERLY REPORT
January 14, 1996
Dear Fellow Shareholder:
1995 was a wonderful year for the Value Fund. Our total return, after
deducting fees and expenses, was +38.4%. This compares with +37.5% for the S&P
500 and +31.1% for the average equity mutual fund (source: Lipper). For a
long-term perspective, the table across from this letter shows how an initial
investment of $25,000 when the fund was started would have grown.
It was a great year for stocks in general, but the star performers (for
us) were the "interest-sensitive" financial services stocks, particularly the
banks (which as a group rose by over 50%). Our financial companies generally had
good years from a business point of view in both 1994 and 1995, but their stocks
were weak in 1994, then very strong in 1995. This temporary disconnection of
business reality from stock price behavior happens regularly. The good news is
that it gives a "value investor" opportunities, and the bad news is that it
makes it impossible to predict WHEN an undervalued stock will go up.
OUTLOOK FOR OUR COMPANIES
I know that many investors would prefer predictions about the outlook for
"the market" or our fund's 1996 performance, but the best I can do is to discuss
the businesses we own. If our companies do well and we have paid reasonable
prices for their stocks, we will do well over the years. If anyone tells you he
knows WHEN a stock is going to go up, he is probably kidding you, and/or
himself.
Rick Lawson and I recently spent four days at an investment conference
featuring about 100 companies in the cable TV, entertainment, and
telecommunications industries. We heard formal presentations by, and visited
informally with, the managements of about 10 companies we own and 15-20 others
of potential interest. Stocks in these industries account for about 23% of our
portfolio, and we came away very encouraged about our companies and a couple of
new ones.
Wall Street's perception of cable stocks has remained clouded by the
reregulation that was imposed two years ago, but the outlook for the industry
has improved considerably since then. The new telecommunications bill promises
to improve the regulatory picture, cash flow is rising at double digit rates
again, phone companies have not made much progress in their video experiments,
and the cable companies' prospects for incremental profits from telephony and
cable modems for Internet access are very exciting.
Cellular telephone companies have been growing at 20-50% per year and
several have evolved from highly leveraged, development-stage companies into
financially secure, free cash flow generators. There is uncertainty about the
future shape of wireless telephone competition, but the U.S. market is growing
so rapidly that well-established cellular companies should continue to do well
for years. International opportunities are growing even faster, and several of
our companies are building very valuable businesses abroad. Finally,
consolidation in the industry continues, and some of our companies would make
attractive takeover candidates.
On the financial services front, gross under-valuation has given way to
more reasonable valuations as prices have risen, but each of our companies is an
interesting investment at today's price. Wells Fargo is one of the best-managed
banks in the country, sells for under 10 times estimated 1996
2
<PAGE>
earnings per share, and has a good chance of accelerating its growth rate if it
is successful in acquiring First Interstate. Dime is cheap based on current
earnings, and it could receive a significant windfall in its supervisory
goodwill lawsuit against the government. Capital One is growing at over 20% per
year and selling at under 10 times estimated 1996 earnings. Sallie Mae's
earnings outlook has improved because of changes in the prospects for direct
lending by the government and cost cutting and share repurchases which have been
accelerated by new directors who were elected last year after a proxy fight. And
so on.
For each of our companies, I believe that individual company fundamentals
make the stock attractive, and that none depends on a general move up in "the
market" to make it a successful investment. Yet, there is a certain "What goes
up, must come down," fatalism among many investors that causes high anxiety
after a +38% year. Indeed, there are any number of potential stumbling blocks
for the market, and at some point, a TEMPORARY correction of 10-20% (or more) is
inevitable. When that happens, our stocks will not be immune. However, the
likelihood of identifying both the top and the bottom of a market dip, AND
having the courage to act at both points, AND catching a move large enough to
overcome the transaction costs and tax costs involved is very low. So, since I
am optimistic about the long-term prospects for our stocks, I do not foresee any
major changes in our portfolio.
DIVIDENDS AND TAX CONSIDERATIONS
Mutual funds declare dividends each year equal to the amount of taxable
income generated by the fund's portfolio. By doing so, the funds avoid being
taxed at the fund level so that investors can avoid being taxed twice. There are
three sources of taxable income, and we declare separate dividends for each type
in April and December of each year. In 1995, the total amounts of each type of
dividend paid on each Value Fund share were:
<TABLE>
<CAPTION>
APRIL DECEMBER
--------- -----------
<S> <C> <C>
"Net Income" (dividends and interest) $ 0.2881 $ 0.1299
Short-Term Capital Gain 0.2880
Long-Term Capital Gain 0.7932
</TABLE>
These dividends are taxable (for taxpayers, not for qualified retirement
plans and IRA's) whether the shareholder takes payment in cash or reinvests the
dividends in additional shares of the fund. In late January of the following
year, we send each shareholder a "Form 1099-DIV" which shows the amounts of each
type of dividend paid to the shareholder during the calendar year.
Total dividends paid in 1995 were approximately $1.50 per share. This
represents about 23% of our total return for the year. It is important to
recognize that it is possible to receive taxable dividends in years when the
fund's total return is negative (as in 1994). For taxpayers, the best long-term
results occur when a large proportion of the total return comes in the form of
UNREALIZED capital gains (as in 1995).
A significant number of the Value Fund's shares are held in retirement
accounts that are not subject to current taxation, and tax implications are not
a primary factor in the way I manage the portfolio, but a "buy and hold,"
low-turnover investment approach will generally result in a more tax-efficient
investment than a more typical high-turnover investment style.
If you have questions about dividends, 1099's, or other tax-related
matters, please feel free to call Mary Bickels or Ann Stratton.
Best regards,
/s/ Wallace R. Weitz
Wallace R. Weitz
President
3
<PAGE>
WEITZ SERIES FUND, INC. -- VALUE PORTFOLIO
SCHEDULE OF INVESTMENTS IN SECURITIES
DECEMBER 31, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES
OR UNITS COST MARKET VALUE
- - ----------- ---------------- -------------
<C> <S> <C> <C>
COMMON STOCKS -- 83.8%
BANKING -- 17.1%
60,000 Bank America Corp. $ 2,608,775 $ 3,885,000
100,000 Brooklyn Bancorp, Inc.* 2,948,750 4,075,000
45,000 Calumet Bancorp, Inc. * 1,198,125 1,248,750
170,000 Dime Bancorp, Inc. 1,893,175 1,976,250
520,000 Fidelity Federal Bank* 1,040,000 1,202,500
41,000 First Interstate Bancorp 3,333,859 5,596,500
15,000 First Keystone Financial, Inc. 150,000 313,125
80,000 Glendale Federal Bank 818,885 1,400,000
10,000 Mercantile Bancorporation 303,100 460,000
25,000 Wells Fargo & Co. 3,744,305 5,400,000
---------------- -------------
18,038,974 25,557,125
---------------- -------------
CABLE TELEVISION -- 14.5%
100,000 Adelphia Communications CL A* 940,005 700,000
141,233 Century Communications Corp. CL A* 1,060,308 1,129,864
390,000 Comcast Corporation CL A 5,531,331 7,093,125
410,000 Tele-Communications, Inc. CL A* 6,556,523 8,148,750
100,000 Tele-Communications Liberty Media Gr-A* 2,036,127 2,687,500
50,000 Time Warner, Inc. 1,062,221 1,893,750
---------------- -------------
17,186,515 21,652,989
---------------- -------------
CONSUMER PRODUCTS AND SERVICES -- 3.4%
80,000 American Classic Voyages Co. 912,938 870,000
2,875 Lady Baltimore Foods* 107,781 179,687
120,000 Playtex Products, Inc.* 895,610 900,000
140,000 Protection One, Inc.* 859,000 1,435,000
50,000 Seafield Capital Corp. 1,819,356 1,700,000
---------------- -------------
4,594,685 5,084,687
---------------- -------------
FEDERAL AGENCIES -- 9.4%
30,000 Federal Home Loan Mortgage Corp. 679,347 2,505,000
40,000 Federal National Mortgage Association 2,970,410 4,965,000
100,000 Student Loan Marketing Association 3,908,237 6,587,500
---------------- -------------
7,557,994 14,057,500
---------------- -------------
FINANCIAL SERVICES -- 10.5%
90,033 American Express 2,731,705 3,725,115
120 Berkshire Hathaway, Inc.* 421,035 3,852,600
70,000 Capital One Financial Corp. 1,578,158 1,671,250
7,000 Cityscape Financial Corp.* 126,000 145,250
14,000 Guarantee Life Companies, Inc.* 182,000 220,500
</TABLE>
4
<PAGE>
WEITZ SERIES FUND, INC. -- VALUE PORTFOLIO
SCHEDULE OF INVESTMENTS IN SECURITIES, CONTINUED
<TABLE>
<CAPTION>
SHARES
OR UNITS COST MARKET VALUE
- - ----------- ---------------- -------------
<C> <S> <C> <C>
FINANCIAL SERVICES -- CONTINUED
75,000 Imperial Thrift & Loan Association* $ 818,750 $ 918,750
30,000 PS Group, Inc.* 278,125 322,500
135,000 Salomon, Inc. 5,691,176 4,792,500
---------------- -------------
11,826,949 15,648,465
---------------- -------------
INFORMATION AND DATA PROCESSING -- 2.1%
75,000 Business Records Corp. Hldg. Co.* 1,050,568 2,962,500
100,000 Intelligent Systems Corp.* 198,231 212,500
---------------- -------------
1,248,799 3,175,000
---------------- -------------
MORTGAGE BANKING -- 6.5%
330,000 Countrywide Credit, Inc. 5,196,692 7,177,500
45,000 Imperial Credit Industries, Inc.* 265,875 978,750
105,000 Resource Bancshares Mtg. Grp.* 963,313 1,496,250
---------------- -------------
6,425,880 9,652,500
---------------- -------------
PUBLISHING AND BROADCASTING -- 3.0%
30,000 Daily Journal* 430,581 1,140,000
1,000 Rand McNally & Co. 155,000 315,000
170,000 Valassis Communications, Inc.* 2,544,085 2,975,000
---------------- -------------
3,129,666 4,430,000
---------------- -------------
REAL ESTATE AND CONSTRUCTION -- 5.8%
630,000 Catellus Development Corp.* 4,478,740 3,780,000
17,200 Forest City Enterprises CL A 654,810 556,850
210,000 NHP, Inc.* 2,811,870 3,885,000
273,500 Presley Companies CL A* 830,788 478,625
---------------- -------------
8,776,208 8,700,475
---------------- -------------
REAL ESTATE INVESTMENT TRUSTS -- 4.9%
80,000 First Washington Realty Trust, Inc. 1,363,425 1,450,000
100,000 Innkeepers USA Trust 908,200 912,500
25,000 Prime Residential, Inc. 359,500 462,500
200,000 Redwood Trust, Inc. 3,378,090 3,650,000
65,000 Redwood Trust, Inc. Warrants** 108,550 308,750
33,200 Thornburg Mortgage Asset Corp. 483,229 522,900
---------------- -------------
6,600,994 7,306,650
---------------- -------------
TELECOMMUNICATIONS -- 6.6%
40,000 Airtouch Communications, Inc.* 1,146,150 1,130,000
60,000 Cellular Communications of Puerto Rico, Inc.* 1,654,450 1,665,000
10,000 Cellular Communications, Inc.* 480,000 497,500
305,000 Centennial Cellular Corp. CL A* 4,923,019 5,223,125
33,200 Telephone and Data Systems, Inc. 1,223,094 1,311,400
---------------- -------------
9,426,713 9,827,025
---------------- -------------
Total Common Stocks 94,813,377 125,092,416
---------------- -------------
</TABLE>
5
<PAGE>
WEITZ SERIES FUND, INC. -- VALUE PORTFOLIO
SCHEDULE OF INVESTMENTS IN SECURITIES, CONTINUED
<TABLE>
<CAPTION>
SHARES
OR UNITS COST MARKET VALUE
- - ----------- ---------------- -------------
<C> <S> <C> <C>
CONVERTIBLE PREFERRED STOCKS -- 1.4%
211,000 Forest Oil Corp. $.75 Cv. Pfd. $ 2,404,000 $ 2,110,000
---------------- -------------
NON-CONVERTIBLE PREFERRED STOCKS -- 2.0%
30,000 Prime Retail Inc. 10.5% Pfd. 645,000 581,250
59,941 Riggs National 10.75% Pfd. 1,572,164 1,663,363
34,000 River Bank America 15.0% Pfd. 845,750 816,000
---------------- -------------
Total Non-Convertible Preferred Stocks 3,062,914 3,060,613
---------------- -------------
<CAPTION>
FACE
AMOUNT
- - -----------
<C> <S> <C> <C>
CORPORATE BONDS -- 0.8%
$ 500,000 Salomon, Inc. Notes 7.125% 8/1/99 500,000 509,155
600,000 Dime Savings 10.5% 11/15/05 649,853 663,000
---------------- -------------
Total Corporate Bonds 1,149,853 1,172,155
---------------- -------------
U.S. GOVERNMENT AND AGENCY
SECURITIES -- 12.7%
2,750,000 U.S. Treasury Bill 5/15/96 2,697,289 2,697,122
1,000,000 U.S. Treasury Note 6.75% 5/31/97 1,000,000 1,020,625
1,000,000 Federal Home Loan Bank 6.2% 4/26/99 999,450 1,001,530
3,000,000 Tennessee Valley Authority 7.625% 9/15/99 3,037,940 3,047,148
3,000,000 Federal Natl. Mtg. Assn. 6.625% 7/12/00 3,000,000 3,017,344
2,500,000 Federal Natl. Mtg. Assn. 7.55% 6/10/04 2,497,465 2,621,484
4,500,000 Federal Home Loan Bank 6.55% 11/15/02 4,500,000 4,537,913
1,000,000 Federal Home Loan Bank 6.44% 11/28/05 1,001,560 1,002,500
---------------- -------------
Total U.S. Government and Agency Securities 18,733,704 18,945,666
---------------- -------------
SHORT-TERM SECURITIES -- .2%
348,563 Norwest U.S. Government Money Market Fund, 5.2% 348,563 348,563
---------------- -------------
Total Investments in Securities $ 120,512,411*** 150,729,413
---------------- -------------
----------------
Other Assets Less Liabilities -- (0.9%) (1,375,415)
-------------
Total Net Assets -- 100% $ 149,353,998
-------------
-------------
Net Asset Value Per Share $ 18.382
-------------
-------------
</TABLE>
*Non-income producing
**Each warrant allows for the purchase of 1 share of common stock at $14.99;
expiration date is 12/31/97
***Also approximates cost for federal income tax purposes
6
