<PAGE>
- --------------------------------------------------------------------------------
WEITZ SERIES FUND, INC.
VALUE PORTFOLIO
A N N U A L
R E P O R T
MARCH 31, 1996
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 March 31, 1996, 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
$25,000 CAPITAL GAIN REINVESTED VALUE OF ANNUAL RATE
PERIOD ENDED INVESTMENT DISTRIBUTIONS DIVIDENDS SHARES OF 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
Mar. 31, 1996 (3 Mos.) 48,643 18,467 12,548 79,658 5.8
</TABLE>
The Portfolio's average annual total return for the one and five year periods
ending March 31, 1996, and for the period since inception (May 9, 1986), was
35.9%, 15.0% and 12.4%, 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
2
<PAGE>
WEITZ SERIES FUND, INC. -- VALUE PORTFOLIO
MARCH 31, 1996 - ANNUAL REPORT
April 7, 1996
Dear Fellow Shareholder:
The first quarter of 1996 was a good one for stocks in general and for the
Value Portfolio. The table below shows 3 and 12 month total returns (after
deducting expenses) for our fund, the S&P 500, and the average equity mutual
fund.
<TABLE>
<CAPTION>
3 MONTHS 12 MONTHS
--------------- -------------
<S> <C> <C>
Weitz Value Portfolio 5.8% 35.9%
Standard & Poors 500 Index 5.4 32.1
Average Equity Mutual Fund (Lipper) 5.7 28.8
</TABLE>
The table on the opposite page shows the growth of a $25,000 investment in
the Value Portfolio made at the fund's inception in 1986.
INVESTMENT REVIEW
In spite of an increase in long-term interest rates during the quarter,
our "interest-sensitive" financial stocks were the primary contributors to the
first quarter gains. Among our larger holdings, Wells Fargo succeeded in
acquiring First Interstate, and both stocks rose over 20%. Sallie Mae rose 17%
as the new directors' cost-cutting and stock repurchase plans continued to
attract investor attention. Redwood Trust's total return for the quarter was 15%
(and the Redwood warrants rose 32%). Other individual stocks made strong
contributions, such as Catellus (+29%) and Protection One (+44%), but there were
major sectors of the portfolio, such as cellular telephone and cable TV that did
not really participate.
Cable and cellular stocks continue to be under-appreciated by investors.
Many traditional investors ignore these companies because they have leveraged
balance sheets, and because depreciation charges obscure their true earning
power. I find them very attractive, however, for two related reasons. First,
they generate large, recurring, predictable, growing amounts of EXCESS cash that
is not REQUIRED in the business. Second, even though they do not HAVE TO
reinvest their profits in their businesses, they have lucrative reinvestment
opportunities within their own companies. Thus, they have some control over
their own destinies and can grow faster and more predictably than most
companies.
We have not made any major changes in portfolio composition during the
last quarter. A few stocks were taken in mergers, we added a few new ones, and
we added to several existing
3
<PAGE>
positions, especially our cellular stocks. As I write this, we are about 82%
invested in common stocks. (Careful readers of our schedule of investments will
notice that the percentages shown next to each category of asset are distorted
by some very large purchases of stocks -- $45.9 million -- that were made in
late March but which had not settled as of March 31. The reason for these
purchases is that approximately $58 million was deposited in the Value Portfolio
on April 1, and we arranged for investment of most of these funds in advance so
that the portfolio would remain in balance. If you have questions about the
accounting mechanics, please call Eric Ball, Rick Lawson, or me.)
OUTLOOK
Conditions have been nearly ideal for stocks for some time. Interest rates
have been low and trending lower. Corporate profits have been rising strongly.
The supply of stock has shrunk because of takeovers and stock buybacks, while
the quantity of capital available to buy stocks has been expanding. Rising stock
prices have attracted more stock investors, whose buying has caused stock prices
to rise . . . A virtuous circle.
Periodic "corrections" are inevitable, and investors who would be
seriously troubled by a decline of 10-20% in the value of their fund shares
should probably not invest in the Value Portfolio or any type of equity
investment. On the other hand, I feel very good about the long-term prospects
for our stocks, and we have about 18% of the portfolio in cash and reserves
which are available for buying bargains if a correction occurs.
WELCOME TO ERIC BALL
Eric joined us in February. His background includes three years as a
securities analyst for a brokerage firm, eight years in research and portfolio
management for an investment counseling firm, and most recently, managing over
$400 million at a bank. Eric will be doing a combination of research and
investment counseling work. He is available to meet with retirement plan
participants and individual shareholders, and I would encourage clients with
investment questions to call him and get acquainted.
ANNUAL MEETING
On Wednesday, May 29, 1996, we will have our annual meeting for
shareholders at the Omaha Marriott. The meeting room will open at 4:00 p.m. for
snacks and drinks, and the business meeting will start at 4:30. This is a great
opportunity to ask questions about your investment and to meet the members of
our staff that you have been talking to on the phone. If you plan to join us for
the meeting, please let Mary Bickels know so we can plan for the right number of
people.
Best regards,
/s/ WALLACE WEITZ
Wallace R. Weitz
President
4
<PAGE>
SCHEDULE OF INVESTMENTS
5
<PAGE>
WEITZ SERIES FUND, INC. -- VALUE PORTFOLIO
SCHEDULE OF INVESTMENTS IN SECURITIES
MARCH 31, 1996
<TABLE>
<CAPTION>
SHARES
OR UNITS COST MARKET VALUE
---------- ------------ ------------
<C> <S> <C> <C>
COMMON STOCKS -- 109.6%
BANKING -- 22.4%
85,000 Bank America Corp. $ 4,541,788 $ 6,587,500
45,000 Calumet Bancorp, Inc.* 1,198,125 1,248,750
220,000 Dime Bancorp, Inc. 2,471,450 2,722,500
130,000 Fidelity Federal Bank CL A* 1,040,000 1,235,000
53,000 First Interstate Bancorp 5,383,729 9,195,500
25,000 First Keystone Financial, Inc. 340,100 475,000
95,000 Glendale Federal Bank 1,078,723 1,721,875
210,000 Greenpoint Financial Corp. 5,719,475 5,775,000
10,000 Mercantile Bancorporation 303,100 457,500
15,000 Poughkeepsie Savings Bank 78,750 80,625
33,000 Wells Fargo & Co. 5,790,385 8,613,000
------------ ------------
27,945,625 38,112,250
------------ ------------
CABLE TELEVISION -- 19.9%
130,000 Adelphia Communications CL A* 1,152,080 910,000
255,000 Century Communications Corp. CL A* 2,052,210 2,470,313
650,000 Comcast Corporation CL A 10,360,380 11,496,875
535,000 Tele-Communications, Inc. CL A* 8,939,535 9,930,937
152,000 Tele-Communications Liberty Media CL A* 3,417,265 4,009,000
95,000 Time Warner, Inc. 2,918,671 3,883,125
60,000 U.S. West Media Group* 1,183,415 1,230,000
------------ ------------
30,023,556 33,930,250
------------ ------------
CONSUMER PRODUCTS AND SERVICES -- 3.8%
110,000 American Classic Voyages Co. 1,189,288 907,500
4,875 Lady Baltimore Foods* 227,781 268,125
120,000 Playtex Products, Inc.* 895,610 870,000
120,000 Protection One, Inc.* 729,000 1,770,000
73,400 Seafield Capital Corp. 2,675,152 2,715,800
------------ ------------
5,716,831 6,531,425
------------ ------------
FEDERAL AGENCIES -- 7.1%
40,000 Federal Home Loan Mortgage Corp. 1,523,197 3,410,000
130,000 Federal National Mortgage Association 2,488,975 4,143,750
60,000 Student Loan Marketing Association 2,239,037 4,605,000
------------ ------------
6,251,209 12,158,750
------------ ------------
FINANCIAL SERVICES -- 12.0%
100,000 American Express 3,354,046 4,937,500
110 Berkshire Hathaway, Inc.* 640,550 3,723,500
118,000 Capital One Financial Corp. 2,812,858 3,245,000
95,000 Imperial Thrift & Loan Association* 1,096,450 1,330,000
</TABLE>
See accompanying notes to financial statements.
6
<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
30,000 PS Group, Inc.* $ 278,125 $ 333,750
185,300 Salomon, Inc. 7,596,376 6,948,750
------------ ------------
15,778,405 20,518,500
------------ ------------
INFORMATION AND DATA PROCESSING -- 3.4%
144,500 Business Records Corp. Hldg. Co.* 3,652,688 5,346,500
192,600 Intelligent Systems Corp.* 391,376 385,200
------------ ------------
4,044,064 5,731,700
------------ ------------
MORTGAGE BANKING -- 9.4%
465,000 Countrywide Credit, Inc. 8,221,417 10,288,125
64,500 Imperial Credit Industries, Inc.* 626,025 1,580,250
265,000 Resource Bancshares Mtg. Grp.* 3,340,388 4,140,625
------------ ------------
12,187,830 16,009,000
------------ ------------
PUBLISHING AND BROADCASTING -- 3.6%
45,000 Daily Journal Corp.* 929,481 1,485,000
2,000 Rand McNally & Co. 530,000 700,000
240,000 Valassis Communications, Inc.* 3,686,160 3,990,000
------------ ------------
5,145,641 6,175,000
------------ ------------
REAL ESTATE AND CONSTRUCTION -- 8.3%
830,000 Catellus Development Corp.* 6,056,640 6,432,500
35,000 Forest City Enterprises CL A 1,257,953 1,286,250
315,000 NHP, Inc.* 4,723,945 5,827,500
355,000 Presley Companies CL A* 951,683 576,875
------------ ------------
12,990,221 14,123,125
------------ ------------
REAL ESTATE INVESTMENT TRUSTS -- 7.1%
120,000 First Washington Realty Trust, Inc. 2,061,700 2,280,000
150,000 Innkeepers USA Trust 1,385,463 1,406,250
325,000 Redwood Trust, Inc. 5,918,915 6,662,500
130,000 Redwood Trust, Inc. Warrants** 480,000 812,500
62,800 Thornburg Mortgage Asset Corp. 915,206 902,750
------------ ------------
10,761,284 12,064,000
------------ ------------
TELECOMMUNICATIONS -- 12.6%
115,300 Airtouch Communications, Inc.* 3,297,156 3,588,712
139,500 Cellular Communications of Puerto Rico, Inc.* 3,810,250 3,766,500
75,000 Cellular Communications, Inc.* 3,762,250 3,834,375
492,000 Centennial Cellular Corp. CL A* 7,799,515 7,503,000
45,800 CommNet, Cellular, Inc.* 1,240,792 1,276,675
33,200 Telephone and Data Systems, Inc. 1,223,094 1,535,500
------------ ------------
21,133,057 21,504,762
------------ ------------
Total Common Stocks 151,977,723 186,858,762
------------ ------------
</TABLE>
See accompanying notes to financial statements.
7
<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 -- 2.1%
352,107 Forest Oil Corp. $.75 Cv. Pfd. $ 3,597,520 $ 3,521,070
------------ ------------
NON-CONVERTIBLE PREFERRED STOCKS -- 2.1%
10,000 Community Bank Inc. 13% Pfd. 257,550 255,000
30,000 Prime Retail Inc. 10.5% Pfd. 645,000 622,500
69,941 Riggs National 10.75% Pfd. 1,852,839 1,949,605
34,000 River Bank America 15.0% Pfd. 845,750 841,500
------------ ------------
Total Non-Convertible Preferred Stocks 3,601,139 3,668,605
------------ ------------
FACE
AMOUNT
----------
CORPORATE BONDS -- 0.7%
$ 500,000 Salomon, Inc. Notes 7.125% 8/01/99 500,000 498,691
600,000 Dime Savings 10.5% 11/15/05 645,529 657,000
------------ ------------
Total Corporate Bonds 1,145,529 1,155,691
------------ ------------
U.S. GOVERNMENT AND AGENCY SECURITIES -- 11.4%
1,000,000 U.S. Treasury Note 6.75% 5/31/97 1,000,000 1,012,500
3,000,000 Federal Home Loan Bank 6.20% 4/26/99 3,000,281 3,001,441
4,500,000 Federal Natl. Mtg. Assn. 6.625% 7/12/00 4,499,362 4,490,156
3,000,000 Federal Home Loan Bank 6.535% 3/21/01 3,000,000 2,990,497
4,500,000 Federal Home Loan Bank 6.55% 11/15/02 4,500,000 4,444,147
2,500,000 Federal Natl. Mtg. Assn. 7.55% 6/10/04 2,497,629 2,527,344
1,000,000 Federal Home Loan Bank 6.44% 11/28/05 1,001,521 984,375
------------ ------------
Total U.S. Government and Agency Securities 19,498,793 19,450,460
------------ ------------
SHORT-TERM SECURITIES -- 0.6%
1,037,590 Norwest U.S. Government Money Market Fund, 4.8% 1,037,590 1,037,590
------------ ------------
Total Investments in Securities $180,858,294*** 215,692,178
------------ ------------
------------
Other Liabilities in Excess of Other Assets -- ( 26.5%) (45,183,322)
------------
Total Net Assets -- 100% $170,508,856
------------
------------
Net Asset Value Per Share $ 19.457
------------
------------
</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
See accompanying notes to financial statements.
8
<PAGE>
WEITZ SERIES FUND, INC. -- VALUE PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
MARCH 31, 1996
<TABLE>
<S> <C>
Assets:
Investment in securities at market (cost $180,858,294) $215,692,178
Receivable for securities sold 290,260
Accrued interest and dividends receivable 618,142
------------
Total assets 216,600,580
------------
Liabilities:
Accrued expenses, including amount due adviser (note 3) 190,241
Payable for securities purchased 45,901,483
------------
Total liabilities 46,091,724
------------
Net assets applicable to outstanding capital stock $170,508,856
------------
------------
Net assets represented by:
Capital stock outstanding, at par (notes 3 & 4) 8,763
Additional paid-in capital 128,417,114
Accumulated undistributed net investment income 307,639
Accumulated undistributed net realized gains 6,941,456
Net unrealized appreciation of investments 34,833,884
------------
Total representing net assets applicable to shares outstanding $170,508,856
------------
------------
Net asset value per share of outstanding capital stock (8,763,259 shares
outstanding) $ 19.457
------------
------------
</TABLE>
See accompanying notes to financial statements.
9
<PAGE>
WEITZ SERIES FUND, INC. -- VALUE PORTFOLIO
STATEMENT OF OPERATIONS
YEAR ENDED MARCH 31, 1996
<TABLE>
<S> <C>
Investment income:
Dividends $ 1,924,867
Interest 1,313,379
-----------
Total investment income 3,238,246
-----------
Expenses (note 3):
Investment advisory fee 1,429,179
Administrative fee 346,065
Other expenses 162,870
-----------
Total expenses 1,938,114
-----------
Net investment income 1,300,132
-----------
Realized and unrealized gain on investments (note 5):
Realized gain on investments 15,297,344
Net increase in unrealized appreciation of investments 25,480,942
-----------
Net realized and unrealized gain on investments 40,778,286
-----------
Net increase in net assets resulting from operations $42,078,418
-----------
-----------
</TABLE>
See accompanying notes to financial statements.
10
<PAGE>
WEITZ SERIES FUND, INC. -- VALUE PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR ENDED MARCH 31,
------------------------------
1996 1995
-------------- --------------
<S> <C> <C>
Increase in net assets:
From operations:
Net investment income $ 1,300,132 $ 1,186,308
Net realized gain 15,297,344 2,677,606
Unrealized appreciation 25,480,942 819,496
-------------- --------------
Net increase in net assets resulting from operations 42,078,418 4,683,410
-------------- --------------
Distributions to shareholders from:
Net investment income 3,147,890 --
Net realized gain 8,264,279 5,153,363
-------------- --------------
Total distributions 11,412,169 5,153,363
-------------- --------------
Capital share transactions (note 4):
Proceeds from sales 36,606,902 29,133,582
Payments for redemptions (26,684,496) (18,755,902)
Reinvestment of net investment income and net realized gain at net asset
value 11,143,806 5,028,982
-------------- --------------
Total increase from capital share transactions 21,066,212 15,406,662
-------------- --------------
Total increase in net assets 51,732,461 14,936,709
-------------- --------------
Net assets:
Beginning of period 118,776,395 103,839,686
-------------- --------------
End of period (including undistributed net investment income of $307,639 in
1996 and $3,000,469 in 1995) $ 170,508,856 $ 118,776,395
-------------- --------------
-------------- --------------
</TABLE>
See accompanying notes to financial statements.
11
<PAGE>
WEITZ SERIES FUND, INC. -- VALUE PORTFOLIO
FINANCIAL HIGHLIGHTS
The following financial information provides selected data for a share of the
Value Portfolio and its predecessor outstanding throughout the periods
indicated. On April 1, 1990, Weitz Value Fund, Inc. was merged into the Fund and
renamed the Value Portfolio. Information prior to that date is for a share of
the Weitz Value Fund, Inc.
<TABLE>
<CAPTION>
YEAR ENDED MARCH 31,
--------------------------------------------------------------------------------------------
1996 1995 1994 1993 1992 1991 1990
------------ ------------ ------------ ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF
PERIOD: $ 15.552 $ 15.684 $ 15.526 $ 13.926 $ 12.842 $ 11.854 $ 11.772
INCOME (LOSS) FROM INVESTMENT
OPERATIONS:
Net investment income 0.157 0.144 0.089 0.221 0.360 0.319 0.421
Net gains or losses on securities
(realized and unrealized) 5.247 0.452 0.683 2.199 1.445 1.117 0.720
------------ ------------ ------------ ----------- ----------- ----------- -----------
Total from investment operations 5.404 0.596 0.772 2.420 1.805 1.436 1.141
LESS DISTRIBUTIONS:
Dividends (from net investment
income) (0.418) -- (0.023) (0.275) (0.324) (0.380) (0.430)
Distributions (from capital
gains) (1.081) (0.728) (0.591) (0.545) (0.397) (0.068) (0.629)
------------ ------------ ------------ ----------- ----------- ----------- -----------
Total distributions (1.499) (0.728) (0.614) (0.820) (0.721) (0.448) (1.059)
------------ ------------ ------------ ----------- ----------- ----------- -----------
NET ASSET VALUE, END OF PERIOD $ 19.457 $ 15.552 $ 15.684 $ 15.526 $ 13.926 $ 12.842 $ 11.854
------------ ------------ ------------ ----------- ----------- ----------- -----------
------------ ------------ ------------ ----------- ----------- ----------- -----------
TOTAL RETURN 35.9% 4.1% 4.9% 18.3% 14.3% 12.6% 9.6%
RATIOS/SUPPLEMENTAL DATA:
Net assets, End of period $170,508,856 $118,776,395 $103,839,686 $67,617,098 $35,948,398 $27,502,696 $24,540,101
Ratio of expenses to average
net assets 1.35% 1.42% 1.41% 1.35% 1.40% 1.49% 1.46%
Ratio of net investment income to
average net assets 0.91% 1.06% 0.64% 1.66% 2.75% 2.71% 3.71%
Portfolio turnover rate 40% 28% 23% 23% 35% 29% 49%
<CAPTION>
MAY 9, 1986
(INCEPTION) TO
1989 1988 MARCH 31, 1987
----------- ----------- --------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF
PERIOD: $ 10.517 $ 10.792 $ 10.000
INCOME (LOSS) FROM INVESTMENT
OPERATIONS:
Net investment income 0.335 0.326 0.249
Net gains or losses on securities
(realized and unrealized) 1.238 (0.002) 0.543
----------- ----------- --------------
Total from investment operations 1.573 0.324 0.792
LESS DISTRIBUTIONS:
Dividends (from net investment
income) (0.318) (0.487) --
Distributions (from capital
gains) -- (0.112) --
----------- ----------- --------------
Total distributions (0.318) (0.599) --
----------- ----------- --------------
NET ASSET VALUE, END OF PERIOD $ 11.772 $ 10.517 $ 10.792
----------- ----------- --------------
----------- ----------- --------------
TOTAL RETURN 15.2% 3.4% 7.9%
RATIOS/SUPPLEMENTAL DATA:
Net assets, End of period $16,393,851 $9,219,148 $7,448,752
Ratio of expenses to average
net assets 1.50% 1.50% 1.50%*
Ratio of net investment income to
average net assets 3.30% 3.47% 3.72%*
Portfolio turnover rate 25% 68% 55%*
</TABLE>
*Annualized for periods of less than twelve months.
See accompanying notes to financial statements.
12
<PAGE>
NOTES TO FINANCIAL STATEMENTS
13
<PAGE>
WEITZ SERIES FUND, INC. -- VALUE PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1996
(1) ORGANIZATION AND BUSINESS CHANGES
Weitz Series Fund, Inc. (the "Fund"), is registered under the Investment
Company Act of 1940 as an open-end management investment company issuing
shares in series, each series representing a distinct portfolio with its own
investment objectives and policies. At March 31, 1996, the Fund had four
series in operation: the Value Portfolio, the Fixed Income Portfolio, the
Government Money Market Portfolio, and the Hickory Portfolio. The
accompanying financial statements present the financial position and results
of operations of the Value Portfolio (the "Portfolio").
The Portfolio's investment objective is capital appreciation. The Portfolio
intends to invest principally in common stocks, preferred stocks and a
variety of securities convertible into equity such as rights, warrants,
preferred stocks and convertible bonds. The following accounting policies
are in accordance with accounting policies generally accepted in the
investment company industry.
(2) SIGNIFICANT ACCOUNTING POLICIES
(a) VALUATION OF INVESTMENTS
Investments are carried at market determined using the following
valuation methods:
- Securities traded on a national or regional securities exchange are
valued at the last quoted sales price.
- Securities not listed on an exchange or securities in which there
were no reported transactions will be valued at the mean between the
last current closing bid and ask prices.
- Securities or other assets for which reliable recent market
quotations are not readily available will be valued at fair market
value as determined in good faith by or under the direction of the
Fund's Board of Directors or a committee of the Board.
All securities are valued in accordance with the above noted policies at
the close of each business day.
When the Portfolio writes a call option, an amount equal to the premium
received by the Portfolio is included in the Portfolio's statement of
assets and liabilities as a liability. The amount of the liability is
subsequently marked-to-market to reflect the current market value of the
option written. The current market value of a traded option is the last
sales price on the principal exchange on which such option is traded, or,
in the absence of such sale, the latest ask quotation. When an option
expires on its stipulated expiration date or the Portfolio enters into a
closing purchase transaction, the Portfolio realizes a gain (or loss if
the cost of a closing purchase transaction exceeds the premium received
when the option was sold) without regard to any unrealized gain or loss
on the underlying security, and the liability related to such option is
extinguished. When a call option is exercised, the Portfolio realizes a
gain or loss from the sale of the underlying security and the proceeds
from such sale are increased by the premium originally received.
14
<PAGE>
The risk in writing a call option is that the Portfolio gives up the
opportunity of profit if the market price of the security increases. The
Portfolio also has the additional risk of not being able to enter into a
closing transaction if a liquid secondary market does not exist.
(b) FEDERAL INCOME TAXES
Since the Portfolio's policy is to comply with all sections of the
Internal Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income to shareholders, no provision for
income or excise taxes is required.
Net investment income and net realized gains may differ for financial
statement and tax purposes. The character of distributions made during
the year from net investment income or net realized gains may differ from
their ultimate characterization for federal income tax purposes. Also,
due to the timing of dividend distributions, the fiscal year in which
amounts are distributed may differ from the year that the income or
realized gains were recorded by the Portfolio.
On the statement of assets and liabilities, as a result of permanent
book-to-tax differences, accumulated undistributed net investment income
has been decreased by $845,072 and accumulated undistributed net realized
gain has been increased by $845,051, and additional paid in capital has
been increased by $21.
(c) SECURITY TRANSACTIONS
Security transactions are accounted for on the date the securities are
purchased or sold (trade date). Dividend income and distributions to
shareholders are recorded on the ex-dividend date. Interest, including
the amortization of discount or premium, is accrued as earned.
Realized gains or losses are determined by specifically identifying the
issue sold.
(d) DIVIDEND POLICY
The Portfolio will declare and distribute income dividends and capital
gains distributions as may be required to qualify as a regulated
investment company under the Internal Revenue Code. All dividends and
distributions will be reinvested automatically unless the shareholder
elects otherwise.
(e) USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent liabilities at the date of the financial
statements and the reported amounts of increase and decrease in net
assets from operations during the period. Actual results could differ
from those estimates.
(3) RELATED PARTY TRANSACTIONS
The Fund and Portfolio have retained Wallace R. Weitz & Company (the
"Adviser") as their exclusive investment adviser. In addition, the Fund has
an agreement with Weitz Securities, Inc. to act as distributor for the
Portfolio's shares. Certain officers and directors of the Fund are also
officers and directors of the Adviser and Weitz Securities, Inc.
15
<PAGE>
Under the terms of the management and investment advisory agreement, the
Adviser receives an investment advisory fee equal to 1% per annum of the
Portfolio's average daily net asset value. The Adviser has agreed to
reimburse the Portfolio up to the amount of advisory fees paid to the extent
that total expenses exceed 1.50% of the Portfolio's average annual daily net
asset value. The expenses incurred by the Portfolio did not exceed the
percentage limitation during the year ended March 31, 1996. At March 31,
1996, the Portfolio had accrued advisory fees of $145,684 which were
classified as accrued expenses.
Under the terms of the administrative services agreement, certain services
are being provided including the transfer of shares, disbursement of
dividends, fund accounting and related administrative services of the Fund
for which the Adviser is being paid a monthly fee. During the year ended
March 31, 1996, the fee was calculated at an average annual rate of .24% of
the Portfolio's average daily net assets.
Weitz Securities, Inc. as distributor, received no compensation for
distribution of Fund shares.
As of March 31, 1996, directors, officers and employees of the Fund, the
Adviser and Weitz Securities, Inc. and their immediate family members held
328,518 shares of capital stock of the Portfolio representing 3.7% of the
Portfolio.
(4) CAPITAL STOCK
The Fund is authorized to issue a total of 100 million shares of common
stock in series with a par value of $.001. Thirty million of these shares
have been authorized by the Board of Directors to be issued in the series
designated Value Portfolio shares, of which 8,763,259 shares are outstanding
at March 31, 1996. The Board of Directors may authorize additional shares in
other series of the Fund's shares without shareholder approval. Each share
of stock will have a pro rata interest in the assets of the Portfolio to
which the stock of that series relates and will have no interest in the
assets of any other portfolio.
Transactions in the capital stock of the Portfolio are summarized as
follows:
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
MARCH 31, 1996 MARCH 31, 1995
-------------- --------------
<S> <C> <C>
Transactions in shares:
Shares issued........................................................ 1,986,630 1,895,851
Shares redeemed...................................................... (1,491,710) (1,220,675)
Reinvested dividends................................................. 631,158 341,446
-------------- --------------
Net increase....................................................... 1,126,078 1,016,622
-------------- --------------
-------------- --------------
</TABLE>
(5) SECURITIES TRANSACTIONS
The aggregate cost and the proceeds from the sales of securities was
approximately $69,934,389 and $85,231,733 for the year ended March 31, 1996.
At March 31, 1996, unrealized appreciation of securities was comprised of
gross unrealized appreciation of $38,536,935 offset by gross unrealized
depreciation of $3,703,051.
16
<PAGE>
Transactions relating to covered call options during the year ended March
31, 1996 are summarized as follows:
<TABLE>
<CAPTION>
NUMBER OF
OPTIONS PREMIUM
-------------- --------------
<S> <C> <C>
Options written, beginning of period................................... -- --
Options written, during the period..................................... 10,000 49,598
Options closed during the period....................................... (10,000) (49,598)
------- -------
Options outstanding, end of period..................................... -- --
------- -------
------- -------
</TABLE>
(6) DIRECTORS' FEES AND EXPENSES
The Fund pays directors (other than directors who are also officers of the
Adviser) a fee of $400 per board meeting attended and $100 per audit
committee meeting attended, which is allocated to the various portfolios.
During the year ended March 31, 1996, the Value Portfolio paid directors'
fees of $5,683.
17
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Shareholders
Weitz Series Fund, Inc. -- Value Portfolio:
We have audited the accompanying statement of assets and liabilities of Weitz
Series Fund, Inc. -- Value Portfolio, including the schedule of investments in
securities, as of March 31, 1996, the related statement of operations for the
year then ended and changes in net assets for each of the years in the two-year
period then ended and financial highlights for each of the years in the
nine-year period then ended and for the period from May 9, 1986 (inception) to
March 31, 1987. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of March
31, 1996, by correspondence with custodians and brokers. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of Weitz
Series Fund, Inc. -- Value Portfolio as of March 31, 1996, the results of its
operations for the year then ended and the changes in its net assets for each of
the years in the two-year period then ended and financial highlights for each of
the years in the nine-year period then ended and for the period from May 9, 1986
(inception) to March 31, 1987 in conformity with generally accepted accounting
principles.
KPMG PEAT MARWICK LLP
April 17, 1996
Omaha, Nebraska
18
<PAGE>
[This page left blank intentionally]
19
<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.
