<PAGE>
- --------------------------------------------------------------------------------
WEITZ SERIES FUND, INC.
BOARD OF DIRECTORS
Lorraine Chang
John W. Hancock
Richard D. Holland
Thomas R. Pansing, Jr.
Delmer L. Toebben
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. -- Fixed Income Portfolio. For more detailed information about
the Fund, its investment objectives, management, fees and expenses, please see a
current prospectus.This report is not authorized for distribution to prospective
investors unless preceded or accompanied by a current prospectus.
FIXED INCOME PORTFOLIO
SEMI-ANNUAL
REPORT
SEPTEMBER 30, 1997
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. -- FIXED INCOME PORTFOLIO
PERFORMANCE SINCE INCEPTION
A long-term perspective on our portfolio's performance is shown below. The table
shows how an investment of $10,000 in the Fixed Income 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 Fixed Income Portfolio for the one and five
year periods ended September 30, 1997, 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
$10,000 CAPITAL GAIN REINVESTED VALUE OF RATE OF
PERIOD ENDED INVESTMENT DISTRIBUTIONS DIVIDENDS SHARES RETURN
- ------------------- ----------- ------------- ----------- --------- ---------
<S> <C> <C> <C> <C> <C>
Dec. 23, 1988 $ 10,000 -- -- $ 10,000 --
Dec. 31, 1988 9,939 -- 68 10,007 --
Dec. 31, 1989 10,020 -- 900 10,920 9.1%
Dec. 31, 1990 10,232 12 1,661 11,905 9.0
Dec. 31, 1991 10,625 13 2,597 13,235 11.4
Dec. 31, 1992 10,557 13 3,396 13,966 5.5
Dec. 31, 1993 10,820 14 4,258 15,092 8.1
Dec. 31, 1994 9,961 13 4,763 14,737 -2.4
Dec. 31, 1995 10,847 14 6,199 17,060 15.8
Dec. 31, 1996 10,637 13 7,158 17,808 4.4
Sept. 30, 1997 10,989 14 7,905 18,908 6.2+
</TABLE>
The portfolio's average annual total return for the one and five year periods
ended September 30, 1997, and for the period since inception (December 23,
1988), were 9.3%, 6.2% and 7.6%, respectively. These returns assume redemption
at the end of each period and reinvestment of dividends.
Since inception, the total amount of capital gains distributions reinvested in
shares was $13, and the total amount of income distributions reinvested was
$7,527. 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 the Weitz Funds at the address listed on the front cover.
+Return is for the nine month period 1/1/97 through 9/30/97.
1
<PAGE>
<PAGE>
WEITZ SERIES FUND, INC. -- FIXED INCOME PORTFOLIO
SEPTEMBER 30, 1997 - SEMI-ANNUAL REPORT
October 9, 1997
Dear Fellow Shareholder:
The Fixed Income Portfolio's total return for the third quarter of 1997
was 3.1%, a near repeat performance of the second quarter as bond prices
continued to rise (yields declined). The quarter's return consisted of +1.5%
from net interest income (after deducting fees and expenses) and +1.6% from
(unrealized) appreciation of our bonds. This brings our year to date return, as
shown on the previous page, to +6.2%. The table below summarizes total return
data for our fund as well as the average intermediate-term, investment grade
fixed income fund. (Returns shown are after deducting all fees and expenses.)
<TABLE>
<CAPTION>
1 YEAR 5 YEARS
------- -------
<S> <C> <C>
Fixed Income Portfolio 9.3% 6.2%
Average Intermediate Investment
Grade Fixed Income Fund* 8.9% 6.2%
</TABLE>
*Source: Lipper Analytical Services
MARKET REVIEW
The economy continued to surprise investors, economists, and us in the
third quarter with its ability to generate strong growth without triggering
inflation pressures. New jobs, for instance, have been created at a rate of
226,000 per month so far in 1997. The national unemployment rate remains below
5% with some individual states (Nebraska, for instance) below 3%. Incomes and
consumer confidence levels have been on the rise. Inflation, however, is
conspicuous by its absence. Consumer prices through eight months have risen at a
meager 1.6% annual rate. Bond investors were encouraged since slowing inflation
means the securities they own retain more of their purchasing power over time.
2
<PAGE>
The Federal Reserve is faced with a dilemma in its role in implementing
monetary policy. Historically, economic growth of the kind we are experiencing
would tend to strain the capacity of our economy and result in rising inflation.
So far, though, strong growth and low inflation have been able to coexist for
over a year. Weak overseas economies (especially in Japan), currency crises in
developing countries, and the globalization of the world-wide economy could
partly explain our "best of all worlds" environment. This has led some market
participants to proclaim that we have entered a "new era" where the U.S. economy
can continue to grow indefinitely with little or no inflation. While we remain
cautiously optimistic regarding the outlook for interest rates, we firmly
believe that the business cycle has not been repealed and that this complacency
will lead to surprises for some down the road.
Interest rates, like stock prices, gyrate minute to minute based on a host
of factors that rarely have implications for long-term investors. Bill Gross, a
well regarded bond investor, recently wrote a book entitled EVERYTHING YOU'VE
HEARD ABOUT INVESTING IS WRONG! that attempts to eliminate the "noise" so common
in today's bond market. We might recommend skipping the personal anecdotes and
opinions, but he does address bonds from a long-term investor's perspective that
is interesting in the current interest rate environment.
PORTFOLIO REVIEW
The entire portfolio is listed later in this report, but the following
table provides a snapshot of some of the vital characteristics as of September
30:
<TABLE>
<S> <C>
Average Maturity 7.1 years
Average Duration 3.6 years
Average Coupon 7.0%
30-Day SEC Yield at 9-30-97 6.2%
Average Rating AA
</TABLE>
FAREWELL TO ERIC -- WELCOME TO MARY JEWELL
Eric Ball joined us last year to help clients with their investment
questions and financial planning. We and our clients enjoyed working with him.
But Eric's first love is portfolio management, and this summer he received the
offer he could not refuse. So, he has left us to help manage a private hedge
fund, and we wish him the very best.
3
<PAGE>
In looking for a replacement for Eric, we asked lawyers, accountants,
bankers, and clients for the names of the investment professionals they admired,
trusted, and liked to work with. We talked to several people, none of whom were
looking for a new job, and have hired Mary Jewell. Mary is a graduate of
Creighton Law School, and comes to us after 12 years in the trust department of
a major bank. She is available to talk to retirement plan participants or
individual shareholders about personal financial planning, asset allocation, or
any other questions you may have. Her job is to make your financial life easier,
so please feel free to call her and introduce yourself. I think you will enjoy
working with her.
Best regards,
/s/ Wallace R. Weitz /s/ Thomas Carney
Wallace R. Weitz Thomas Carney
President, Portfolio Manager Portfolio Manager
4
<PAGE>
SHAREHOLDER VOTE
On June 2, 1997, a special meeting of the shareholders of Weitz Series
Fund, Inc. (The "Fund"), consisting of the Value Portfolio, the Fixed Income
Portfolio, the Government Money Market Portfolio and the Hickory Portfolio
(each, a "Portfolio") was held at which the following proposals were approved by
the shareholders:
PROPOSAL 1: TO ELECT SIX MEMBERS OF THE BOARD OF DIRECTORS OF THE FUND.
(SHAREHOLDERS OF ALL PORTFOLIOS VOTING)
<TABLE>
<CAPTION>
ABSTAIN/BROKER
FOR AGAINST/WITHHELD NON-VOTES
------------- ---------------- -------------
<S> <C> <C> <C>
Wallace R. Weitz........................ 15,502,256 109,974 0
John W. Hancock......................... 15,491,314 120,916 0
Richard D. Holland...................... 15,501,594 110,636 0
Thomas R. Pansing Jr.................... 15,499,945 112,285 0
Delmer L. Toebben....................... 15,490,181 122,049 0
Lorraine Chang.......................... 15,494,823 117,407 0
</TABLE>
PROPOSAL 2: TO RATIFY THE SELECTION OF MCGLADREY & PULLEN, LLP, AS
INDEPENDENT AUDITORS FOR THE FUND. (SHAREHOLDERS OF ALL PORTFOLIOS VOTING)
<TABLE>
<CAPTION>
ABSTAIN/BROKER
FOR AGAINST/WITHHELD NON-VOTES
------------- ---------------- -------------
<S> <C> <C> <C>
15,253,977 35,308 322,945
</TABLE>
PROPOSAL 3: TO AMEND THE BYLAWS OF THE FUND TO CONFORM THE REQUIREMENTS
THEREIN RELATING TO ELECTION OF THE BOARD OF DIRECTORS BY THE SHAREHOLDERS
TO THE REQUIREMENTS OF THE INVESTMENT COMPANY ACT OF 1940. (SHAREHOLDERS OF
ALL PORTFOLIOS VOTING)
<TABLE>
<CAPTION>
ABSTAIN/BROKER
FOR AGAINST/WITHHELD NON-VOTES
------------- ---------------- -------------
<S> <C> <C> <C>
15,212,675 17,225 382,330
</TABLE>
5
<PAGE>
WEITZ SERIES FUND, INC. -- FIXED INCOME PORTFOLIO
SCHEDULE OF INVESTMENTS IN SECURITIES
SEPTEMBER 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
FACE
RATING AMOUNT COST VALUE
- ------ ---------- ----------- ------------
<S> <C> <C> <C> <C>
CORPORATE BONDS -- 21.1%
A $ 500,000 Lehman Brothers Holdings Notes 7.625% 7/15/99 $ 500,150 $ 511,277
BBB 500,000 Salomon, Inc. Sr. Notes 7.125% 8/01/99 500,000 507,902
A 500,000 Phillip Morris Notes 7.125% 8/15/02 500,000 509,474
BBB 500,000 Tenneco, Inc. Notes 8.075% 10/01/02 498,390 532,910
BB+ 48,000 Homeside, Inc. 11.25% 5/15/03 48,000 56,640
250,000 Local Financial Corp. 11.0% 9/08/04 250,000 262,500
BBB 1,000,000 ConAgra, Inc. Sub. Notes 7.4% 9/15/04 1,000,000 1,038,337
A- 600,000 General Motors Acceptance Corp. Debs. 6.625% 10/15/05 597,188 598,321
BB+ 500,000 Dime Savings 10.5% 11/15/05 531,069 538,750
AA- 1,000,000 Merrill Lynch 7.15% 7/30/12 1,000,000 998,953
AAA 1,000 Berkshire Hathaway, Inc. Debs. 9.75% 1/15/18 1,050 1,054
----------- ------------
Total Corporate Bonds 5,425,847 5,556,118
----------- ------------
MORTGAGE-BACKED SECURITIES -- 19.6%
AAA 52,650 Federal Natl. Mtg Assn. 11.0% 1/01/01
(Avg. Life 1.4 years) 53,662 53,966
AAA 70,017 Federal Home Loan Mtg. Corp. 9.5% 9/01/03
(Avg. Life 2.2 years) 70,017 72,643
AAA 500,000 Federal Natl. Mtg. Assn. REMIC Planned
Amortization Class 7.5% 4/25/19 (Avg. Life 4.9 years) 495,713 511,250
AAA 500,000 Federal Natl. Mtg. Assn. REMIC Planned
Amortization Class 6.5% 10/25/18 (Avg. Life 6.1 years) 485,763 491,250
AAA 500,000 Federal Home Loan Mtg. Corp. REMIC Planned
Amortization Class 6.65% 9/15/21 (Avg. Life 6.6 years) 490,332 493,906
AAA 1,000,000 Federal Home Loan Mtg. Corp. REMIC Planned
Amortization Class 6.75% 12/15/21 (Avg. Life 6.6 years) 991,769 998,125
AAA 1,000,000 Federal Home Loan Mtg. Corp. REMIC Planned
Amortization Class 7.0% 8/15/20 (Avg. Life 7.2 years) 1,003,727 1,006,250
AAA 1,000,000 Federal Home Loan Mtg. Corp. REMIC Planned
Amortization Class 7.0% 4/15/21 (Avg. Life 7.9 years) 975,339 1,008,750
AAA 500,000 Federal Home Loan Mtg. Corp. REMIC Planned
Amortization Class 7.0% 7/15/21 (Avg. Life 10.4 years) 495,314 501,875
----------- ------------
Total Mortgage-Backed Securities 5,061,636 5,138,015
----------- ------------
</TABLE>
See accompanying notes to financial statements.
6
<PAGE>
WEITZ SERIES FUND, INC. -- FIXED INCOME PORTFOLIO
SCHEDULE OF INVESTMENTS IN SECURITIES, CONTINUED
<TABLE>
<CAPTION>
FACE
RATING AMOUNT COST VALUE
- ------ ---------- ----------- ------------
TAXABLE MUNICIPAL BONDS -- 4.0%
<S> <C> <C> <C> <C>
AA+ 50,000 Missouri Hsg. Dev. Comm. 8.6% 9/01/05 $ 50,296 $ 50,250
AAA 325,000 Baltimore Maryland 7.25% 10/15/05 329,869 339,337
AAA 235,000 Oklahoma Hsg. Fin. Auth. 8.7% 9/01/13 235,000 236,175
AAA 425,000 Oklahoma Hsg. Fin. Auth. 7.3% 12/01/14 425,000 429,250
----------- ------------
Total Taxable Municipal Bonds 1,040,165 1,055,012
----------- ------------
U.S. GOVERNMENT AND
AGENCY SECURITIES -- 44.9%
AAA $ 100,100 U.S. Treasury Zero Coupon Receipts 2/15/98 97,846 97,994
AAA 99,960 U.S. Treasury Zero Coupon Receipts 2/15/99 91,713 92,168
AAA 1,000,000 Federal Home Loan Bank 6.77% 3/20/02 1,000,000 1,003,906
AAA 1,000,000 Federal Natl. Mtg. Assn. 7.54% 6/04/04 1,004,522 1,006,875
AAA 2,500,000 Federal Natl. Mtg. Assn. 7.55% 6/10/04 2,498,999 2,544,141
AAA 100,000 U.S. Treasury Note 8.25% 5/15/05 103,956 105,125
AAA 1,000,000 Federal Home Loan Mtg. Corp. 7.09% 6/01/05 1,001,980 1,009,850
AAA 1,000,000 Federal Natl. Mtg. Assn. 7.27% 8/24/05 1,001,165 1,017,031
AAA 500,000 Federal Home Loan Bank 6.44% 11/28/05 500,640 504,609
AAA 1,000,000 Federal Natl. Mtg. Assn. 6.64% 2/02/06 1,000,000 985,463
AAA 500,000 Federal Home Loan Mtg. Corp. 6.407% 2/22/06 496,857 490,860
AAA 1,000,000 Federal Natl. Mtg. Assn. 7.15% 10/11/06 981,341 1,015,781
AAA 950,000 Federl Natl. Mtg. Assn. 7.44% 11/06/06 953,491 950,148
AAA 1,000,000 Federal Home Loan Mtg. Corp. 6.77% 3/21/11 926,310 977,969
----------- ------------
Total U.S. Government and Agency Securities 11,658,820 11,801,920
----------- ------------
<CAPTION>
SHARES
----------
<S> <C> <C> <C> <C>
NON-CONVERTIBLE PREFERRED
STOCKS -- 1.0%
5,000 Crown American Realty Trust 11.0% Pfd. Series A 250,000 267,500
----------- ------------
<CAPTION>
FACE
AMOUNT
----------
<S> <C> <C> <C> <C>
SHORT-TERM SECURITIES -- 8.1%
$2,133,141 Norwest U.S. Government Money Market Fund 2,133,141 2,133,141
----------- ------------
Total Investments in Securities $25,569,609 25,951,706
----------- ------------
-----------
Other Assets Less Liabilities -- 1.3% 334,845
------------
Total Net Assets -- 100% $ 26,286,551
------------
------------
Net Asset Value Per Share $ 11.145
------------
------------
</TABLE>
See accompanying notes to financial statements.
7
<PAGE>
WEITZ SERIES FUND, INC. -- FIXED INCOME PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 1997
(UNAUDITED)
<TABLE>
<S> <C>
Assets:
Investment in securities at value (cost $25,569,609) $ 25,951,706
Accrued interest 347,232
------------
Total assets 26,298,938
------------
Liabilities:
Accrued expense 1,967
Due to adviser 10,420
------------
Total liabilities 12,387
------------
Net assets applicable to outstanding capital stock $ 26,286,551
------------
------------
Net assets represented by:
Capital stock outstanding, at par (note 4) 2,359
Additional paid-in capital 25,976,338
Accumulated undistributed net investment income 385,716
Accumulated undistributed net realized loss (459,959)
Net unrealized apprecation of investments (note 5) 382,097
------------
Net assets $ 26,286,551
------------
------------
Net asset value and redemption price per share of outstanding
capital stock (2,358,626 shares outstanding) $ 11.145
------------
------------
</TABLE>
See accompanying notes to financial statements.
8
<PAGE>
WEITZ SERIES FUND, INC. -- FIXED INCOME PORTFOLIO
STATEMENT OF OPERATIONS
SIX MONTHS ENDED SEPTEMBER 30, 1997
(UNAUDITED)
<TABLE>
<S> <C> <C>
Investment income:
Dividends $ 4,965
Interest 817,389
-----------
Total investment income 822,354
-----------
Expenses (note 3):
Investment advisory fee $ 59,387
Administrative fee 28,434
Audit fees 10,392
Directors fees 562
Other expenses 15,418
-----------
Total expenses 114,193
Less administrative fee waived by investment adviser (25,112)
-----------
Net expenses 89,081
-----------
Net investment income 733,273
-----------
Realized and unrealized loss on investments:
Realized loss on investments (469)
Net unrealized depreciation of investments 704,223
-----------
Net realized and unrealized loss on investments 703,754
-----------
Net increase in net assets resulting from operations $ 1,437,027
-----------
-----------
</TABLE>
See accompanying notes to financial statements.
9
<PAGE>
WEITZ SERIES FUND, INC. -- FIXED INCOME PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS ENDED
SEPT. 30, 1997 YEAR ENDED
(UNAUDITED) MARCH 31, 1997
----------------- --------------
<S> <C> <C>
Increase in net assets:
From operations:
Net investment income $ 733,273 $ 1,091,889
Net realized loss (469) (14,283)
Net unrealized appreciation (depreciation) 704,223 (288,919)
----------------- --------------
Net increase in net assets resulting from operations 1,437,027 788,687
----------------- --------------
Distributions to shareholders from:
Net investment income (643,512) (1,044,634)
----------------- --------------
Total distributions (643,512) (1,044,634)
----------------- --------------
Capital share transactions (note 4):
Proceeds from sales 5,264,546 11,280,073
Payments for redemptions (2,715,000) (6,523,492)
Reinvestment of distributions 594,450 947,032
----------------- --------------
Total increase from capital share transactions 3,143,996 5,703,613
----------------- --------------
Total increase in net assets 3,937,511 5,447,666
----------------- --------------
Net assets:
Beginning of period 22,349,040 16,901,374
----------------- --------------
End of period $ 26,286,551 $ 22,349,040
----------------- --------------
----------------- --------------
</TABLE>
See accompanying notes to financial statements.
10
<PAGE>
WEITZ SERIES FUND, INC. -- FIXED INCOME PORTFOLIO
FINANCIAL HIGHLIGHTS
The following financial information provides selected data for a share of the
Fixed Income Portfolio outstanding throughout the periods indicated.
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
SEPT. 30, YEAR ENDED MARCH 31,
1997 -------------------------------------------------------------------------------------
(UNAUDITED) 1997 1996 1995 1994 1993 1992 1991 1990
----------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING
OF PERIOD $ 10.770 $10.900 $10.608 $10.778 $11.105 $10.781 $10.644 $10.296 $10.236
----------- -------- -------- -------- -------- -------- -------- -------- --------
INCOME (LOSS) FROM
INVESTMENT OPERATIONS:
Net investment income 0.321 0.659 0.645 0.667 0.551 0.615 0.720 0.613 0.874
Net gains or losses on
securities (realized
and unrealized) 0.354 (0.112) 0.312 (0.224) (0.290) 0.360 0.149 0.417 0.002
----------- -------- -------- -------- -------- -------- -------- -------- --------
Total from investment
operations 0.675 0.547 0.957 0.443 0.261 0.975 0.869 1.030 0.876
----------- -------- -------- -------- -------- -------- -------- -------- --------
LESS DISTRIBUTIONS:
Dividends from net
investment income (0.300) (0.677) (0.665) (0.613) (0.588) (0.651) (0.731) (0.671) (0.816)
Distributions from
realized gains -- -- -- -- -- -- (0.001) (0.011) --
----------- -------- -------- -------- -------- -------- -------- -------- --------
Total distributions (0.300) (0.677) (0.665) (0.613) (0.588) (0.651) (0.732) (0.682) (0.816)
----------- -------- -------- -------- -------- -------- -------- -------- --------
NET ASSET VALUE, END OF
PERIOD $ 11.145 $10.770 $10.900 $10.608 $10.778 $11.105 $10.781 $10.644 $10.296
----------- -------- -------- -------- -------- -------- -------- -------- --------
----------- -------- -------- -------- -------- -------- -------- -------- --------
TOTAL RETURN 6.4%++ 5.2% 9.2% 4.4% 2.3% 9.4% 8.6% 10.4% 8.9%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of
period ($000) $ 26,287 $22,349 $16,901 $11,824 $20,560 $19,655 $11,691 $ 6,261 $ 1,419
Ratio of net expenses to
average net assets+ 0.75%* 0.75% 0.75% 0.75% 0.75% 0.76% 0.72% 0.73% 0.62%
Ratio of net investment
income to average net
assets 6.17%* 6.30% 6.18% 6.16% 4.94% 6.22% 7.50% 8.45% 8.22%
Portfolio turnover rate 13% 24% 28% 49% 12% 15% 31% 8% 30%
<CAPTION>
DEC. 23,
1988
(INCEPTION)
TO
MARCH 31,
1989
------------
<S> <C>
NET ASSET VALUE, BEGINNING
OF PERIOD $ 10.142
------------
INCOME (LOSS) FROM
INVESTMENT OPERATIONS:
Net investment income 0.210
Net gains or losses on
securities (realized
and unrealized) (0.047)
------------
Total from investment
operations 0.163
------------
LESS DISTRIBUTIONS:
Dividends from net
investment income (0.069)
Distributions from
realized gains --
------------
Total distributions (0.069)
------------
NET ASSET VALUE, END OF
PERIOD $ 10.236
------------
------------
TOTAL RETURN 1.6%++
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of
period ($000) $ 1,316
Ratio of net expenses to
average net assets+ 1.00%
Ratio of net investment
income to average net
assets 9.32%
Portfolio turnover rate 0%
</TABLE>
*Annualized
+Absent voluntary waivers, the expense ratio would have been 0.96% for the six
months ended September 30, 1997 and 0.93% and 0.95% for the years ended March
31, 1997 and 1996, respectively.
++ Not annualized
See accompanying notes to financial statements.
11
<PAGE>
WEITZ SERIES FUND, INC. -- FIXED INCOME PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1997
(UNAUDITED)
(1) ORGANIZATION
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 September 30, 1997, the Fund had four
series: the Fixed Income Portfolio, the Value Portfolio, the Government
Money Market Portfolio, and the Hickory Portfolio. The accompanying
financial statements present the financial position and results of
operations of the Fixed Income Portfolio (the "Portfolio").
The Portfolio's investment objective is high current income consistent with
preservation of capital. The following significant accounting policies are
in accordance with accounting policies generally accepted in the investment
company industry.
(2) SIGNIFICANT ACCOUNTING POLICIES
(a) VALUATION OF INVESTMENTS
Investment securities 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
Company's Board of Directors or a committee of the Board.
(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
12
<PAGE>
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.
(c) SECURITY TRANSACTIONS
Security transactions are accounted for on the date the securities are
purchased or sold (trade date). Income dividends and distributions to
shareholders are recorded on the ex-dividend date. Interest, including
amortization of discount and premium, is accrued as earned.
Realized gains or losses are determined by specifically identifying the
security 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. Generally, the
Portfolio pays income dividends on a quarterly basis. 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 assets and 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.
Under the terms of a management and investment advisory agreement, the
Adviser receives a management fee equal to 1/2% 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% of the Portfolio's average annual daily net asset value.
During the six months ended September 30, 1997, the Adviser voluntarily
capped total expenses at .75% of the Portfolio's average annual daily net
asset value.
Under the terms of an administration agreement, certain services are being
provided including the transfer of shares, disbursement of dividends, fund
accounting and related administrative services
13
<PAGE>
of the Fund for which the Adviser is being paid a monthly fee. During the
six months ended September 30, 1997, the fee was calculated at an average
annual rate of .24% of the Portfolio's average daily net assets, of which
.21% was waived.
Weitz Securities, Inc. as distributor, received no compensation for
distribution of Portfolio shares.
(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 per share. Ten million of these
shares have been authorized by the Board of Directors to be issued in the
series designated Fixed Income Portfolio, of which 2,358,626 shares are
outstanding at September 30, 1997. 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 series to which the stock of that series relates and will have no
interest in the assets of any other series.
Transactions in the capital stock of the Portfolio are summarized as
follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED
SEPT. 30, 1997 YEAR ENDED
(UNAUDITED) MARCH 31, 1997
----------------- --------------
<S> <C> <C>
Transactions in shares:
Shares issued...................................................... 477,347 1,040,794
Shares redeemed.................................................... (248,499) (604,489)
Reinvested dividends............................................... 54,751 88,172
-------- --------------
Net increase..................................................... 283,599 524,477
-------- --------------
-------- --------------
</TABLE>
(5) SECURITIES TRANSACTIONS
Purchases and proceeds from maturities or sales of investment securities of
the Portfolio, other than short-term securities, aggregated $6,264,943 and
$2,885,956, respectively. The cost of investments is the same for financial
reporting and Federal income tax purposes. At September 30, 1997, the
aggregate gross unrealized appreciation and depreciation were $407,227 and
$25,130, respectively.
For Federal income tax purposes, the Portfolio has realized capital loss
carryforwards of $459,490 available to offset future realized capital gains.
To the extent that such carryforwards are used, no capital gains
distributions will be made. The carryforwards expire as follows: March 31,
2000 -- $25,694, March 31, 2001 -- $31,035, March 31, 2002 -- $35,365, March
31, 2003 -- $4,254, March 31, 2004 -- $348,510, and March 31, 2005 --
$14,632.
14
