<PAGE>
- --------------------------------------------------------------------------------
WEITZ SERIES FUND, INC.
BOARD OF DIRECTORS
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. -- Value 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.
VALUE PORTFOLIO
A N N U A L
R E P O R T
MARCH 31, 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. -- VALUE PORTFOLIO
PERFORMANCE SINCE INCEPTION
A long-term perspective on our portfolio'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, five and ten year
periods ended March 31, 1997, 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
Dec. 31, 1996 51,478 24,054 13,792 89,324 18.7
Mar. 31, 1997 52,470 24,518 14,058 91,046 1.9++
</TABLE>
The portfolio's average annual total return for the one, five and ten year
periods ending March 31, 1997, was 14.3%, 14.9%, and 12.9%, 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 $18,605, and the total amount of income distributions reinvested was
$8,528. 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
++ Return is for the three month period 12/31/96 through 3/31/97
1
<PAGE>
WEITZ SERIES FUND, INC. -- VALUE PORTFOLIO
MARCH 31, 1997 - ANNUAL REPORT
April 14, 1997
Dear Fellow Shareholder:
The first quarter started well, and by mid-March, we were up about 10%.
Then, the general market began to fall sharply, and we gave back most of our
gains. By the end of the quarter, our fund was +1.9%, while the S&P 500 was
+2.7% and the NASDAQ was -5.3%. Some of the more aggressive mutual funds managed
by "momentum" investors were down over 20% in the quarter.
For a longer-term perspective on the performance of the fund, the table on
page 1 shows annual total returns (after all expenses) since the fund was
started in 1986.
THE OUTLOOK
The market "correction" which began in mid-March has continued into April,
and there have been some very volatile trading sessions. The S&P is now down
about 10% from its peak, and indexes of smaller company stocks have fallen
farther. Investors have suspected that "the Market" was unsustainably high, and
the financial media is compounding these fears with talk of the arrival of a new
bear market. Long-time clients and readers of these quarterly letters know
better than to expect a market prediction from me, but I do NOT think
shareholders ought to be alarmed at the recent market weakness.
In the first place, 10% corrections are perfectly normal. The fact that we
have NOT had a 10% decline in several years is unusual. Even 20-25% setbacks are
a normal part of stock investing, and while it is annoying to watch paper
profits melt away, it would be totally unrealistic to expect stocks to rise
inexorably forever. We survived temporary market declines of 20+% in 1987 and
1990, and those periods (along with our fund's mini-bear market in 1994) are
barely visible on a long-term chart of our fund's share price. It is human
nature to want to avoid financial pain, and many of those who sell investment
advice encourage investors to try to move in and out of the market to dodge
falling prices. Unfortunately, even the most sophisticated-sounding market
timing advice tends, in the final analysis, to be a version of Will Rogers' "Buy
stocks that go up -- and if they don't go up, don't buy them." A nice idea, but
impossible to execute.
Another reason to be philosophical in the face of market weakness is that
we are investing in individual businesses, not "the Market." I still believe
that each of our cable TV and cellular stocks has the potential to go up by
50-100% over the next few years, regardless of what the S&P does (though I will
spare you a repetition of the valuation details). Wells Fargo and Capital One
are growing at 15-20% per year, yet sell at only 10-11 times next year's
earnings.
2
<PAGE>
NovaStar is a new mortgage REIT which shows great promise. NHP is scheduled to
be acquired at a premium to today's stock price. When Seafield's restructuring
is completed this year, it will have distributed cash and securities worth about
$50 for each share we bought in the mid-$30's. Several of our companies, such as
Valassis, American Classic Voyages, and LabOne (part of Seafield) are in the
midst of earnings turnarounds which are not reflected in their stock prices. In
short, I feel very good about the prospects for all of our stocks.
I have no idea what the general market will do in the short run, but the
good news is that we don't NEED to know what the market will do to make good
long-term investments. We own good businesses at reasonable prices, and this
approach to investing should continue to produce good returns over time. Rick
Lawson, Eric Ball, Tom Carney, and I would be happy to talk to you about any of
our companies, so please feel free to call.
SHAREHOLDER MEETING
This year's shareholder meeting will be on June 2, at 4:30 p.m. at the
Omaha Marriott Hotel. The portfolio managers will discuss our investments and
answer shareholder questions, as usual, and we will also conduct a short
business meeting. You will receive an official notice of the meeting and a proxy
card in early May, and we will ask you to vote on several proposals. Those
involving directors, auditors, and by-laws do not directly affect our portfolio.
However, there are two proposals which involve investment policies.
One proposal would allow us more flexibility in buying shares of
closed-end investment companies. Since closed-end funds sometimes trade at
significant discounts to their underlying net asset values, they can offer
interesting investment opportunities. The other proposal would allow us to use
short sales and put options to try to reduce risk in the portfolio.
Opportunities for such "hedging" arise in stock-for-stock mergers and certain
corporate reorganizations. PLEASE VOTE, SIGN, AND RETURN THE PROXY CARD PROMPTLY
SO THAT THE FUND DOES NOT INCUR THE COST OF A SECOND MAILING.
The meeting will be a good opportunity for you to ask questions about your
investment, to meet our staff, and for us to get to know our newer investors. I
hope to see you on June 2.
Sincerely,
/s/ WALLACE WEITZ
Wallace R. Weitz
President,
Portfolio Manager
3
<PAGE>
WEITZ SERIES FUND, INC. -- VALUE PORTFOLIO
SCHEDULE OF INVESTMENTS IN SECURITIES
MARCH 31, 1997
<TABLE>
<CAPTION>
SHARES
OR UNITS COST VALUE
---------- ------------ ------------
<C> <S> <C> <C>
COMMON STOCKS -- 83.7%
BANKING -- 5.5%
230,000 Bank Plus Corp.* $ 2,221,250 $ 2,386,250
69,000 Dime Bancorp, Inc.* 809,964 1,060,875
10,000 Mercantile Bancorporation 303,100 530,000
130,000 Poughkeepsie Savings Bank, FSB 669,375 780,000
77,500 R&G Financial Corp. CL B 1,379,375 1,961,719
30,000 Wells Fargo & Co. 3,720,909 8,523,750
------------ ------------
9,103,973 15,242,594
------------ ------------
CABLE TELEVISION -- 19.7%
271,500 Adelphia Communications Corp. CL A* 2,161,718 1,459,312
689,200 Century Communications Corp. CL A* 4,451,414 3,187,550
52,000 Comcast UK Cable Partners Limited CL A 653,976 578,500
760,000 Comcast Corp. Special CL A 12,094,598 12,825,000
84,700 TCI Satellite Entertainment CL A* 1,161,471 656,425
847,000 Tele-Communications, Inc. CL A* 12,188,770 10,164,000
576,500 Tele-Communications Liberty Media CL A* 9,362,661 11,493,969
108,000 Time Warner, Inc. 3,311,319 4,671,000
500,000 U.S. West Media Group* 9,256,025 9,312,500
------------ ------------
54,641,952 54,348,256
------------ ------------
CONSUMER PRODUCTS AND SERVICES -- 3.8%
125,000 American Classic Voyages Co.* 1,196,363 1,304,687
4,875 Lady Baltimore Foods, Inc. 227,781 238,875
300,000 Protection One, Inc.* 2,562,611 3,150,000
174,000 Seafield Capital Corp. 6,471,340 5,655,000
------------ ------------
10,458,095 10,348,562
------------ ------------
FEDERAL AGENCIES -- 4.5%
120,000 Federal Home Loan Mortgage Corp. 679,347 3,270,000
120,000 Federal National Mortgage Association 2,167,000 4,335,000
50,000 Student Loan Marketing Association 1,837,925 4,762,500
------------ ------------
4,684,272 12,367,500
------------ ------------
FINANCIAL SERVICES -- 6.6%
100,000 American Express, Co. 3,354,046 5,987,500
110 Berkshire Hathaway, Inc.* 640,550 3,982,000
128,000 Capital One Financial Corp. 3,107,958 4,768,000
50,000 HealthCare Financial Partners, Inc.* 657,375 750,000
30,000 PS Group, Inc.* 233,125 420,000
45,000 Salomon, Inc. 1,610,333 2,244,375
------------ ------------
9,603,387 18,151,875
------------ ------------
</TABLE>
See accompanying notes to financial statements.
4
<PAGE>
WEITZ SERIES FUND, INC. -- VALUE PORTFOLIO
SCHEDULE OF INVESTMENTS IN SECURITIES, CONTINUED
<TABLE>
<CAPTION>
SHARES
OR UNITS COST VALUE
---------- ------------ ------------
<C> <S> <C> <C>
INFORMATION AND DATA PROCESSING -- 1.8%
131,100 BRC Holdings, Inc.* $ 3,120,794 $ 4,359,075
200,000 Intelligent Systems Corp.* 415,272 625,000
------------ ------------
3,536,066 4,984,075
------------ ------------
MORTGAGE BANKING -- 5.5%
340,000 Countrywide Credit Industries, Inc. 5,414,917 8,415,000
428,058 Resource Bancshares Mtg. Grp., Inc. 5,008,501 6,741,913
------------ ------------
10,423,418 15,156,913
------------ ------------
PUBLISHING AND BROADCASTING -- 6.3%
13,590 Chris-Craft Industries, Inc.* 553,493 538,504
55,700 Daily Journal Corp.* 1,208,766 1,754,550
300,000 Gabelli Global Multimedia Trust, Inc. 2,071,150 2,062,500
400,000 Katz Media Group, Inc.* 3,710,928 2,550,000
326,000 Valassis Communications, Inc.* 5,097,325 7,294,250
45,000 Walt Disney Co. 2,597,017 3,285,000
------------ ------------
15,238,679 17,484,804
------------ ------------
REAL ESTATE AND CONSTRUCTION -- 8.8%
400,000 Catellus Development Corp.* 2,649,476 6,100,000
90,000 Forest City Enterprises, Inc. CL A 2,159,453 3,825,000
540,000 NHP, Inc.* 8,494,395 12,555,000
433,000 Presley Companies CL A* 625,600 487,125
40,000 SLH Corp.* 766,000 1,150,000
------------ ------------
14,694,924 24,117,125
------------ ------------
REAL ESTATE INVESTMENT TRUSTS -- 10.0%
98,800 First Washington Realty Trust, Inc. 1,575,652 2,247,700
29,000 Innkeepers USA Trust 280,651 424,125
185,000 NovaStar Financial, Inc.** 2,775,000 2,775,000
459,891 Redwood Trust, Inc. 8,636,283 21,269,959
48,000 Thornburg Mortgage Asset Corp. 696,518 912,000
------------ ------------
13,964,104 27,628,784
------------ ------------
TELECOMMUNICATIONS -- 11.2%
460,000 360 Communications Co.* 9,968,329 7,935,000
210,000 Airtouch Communications, Inc.* 6,033,127 4,830,000
337,000 Corecomm, Inc.* 8,542,745 4,886,500
775,000 Centennial Cellular Corp. CL A* 11,485,973 8,040,625
82,800 CommNet Cellular, Inc.* 2,204,647 2,111,400
80,000 Telephone and Data Systems, Inc. 2,966,739 3,070,000
------------ ------------
41,201,560 30,873,525
------------ ------------
Total Common Stocks 187,550,430 230,704,013
------------ ------------
</TABLE>
See accompanying notes to financial statements.
5
<PAGE>
WEITZ SERIES FUND, INC. -- VALUE PORTFOLIO
SCHEDULE OF INVESTMENTS IN SECURITIES, CONTINUED
<TABLE>
<CAPTION>
SHARES
OR UNITS COST VALUE
---------- ------------ ------------
<C> <S> <C> <C>
NON-CONVERTIBLE PREFERRED STOCKS --1.4%
10,000 Community Bank 13% Pfd. Series B $ 257,550 $ 270,000
30,000 Prime Retail, Inc. 10.5% Pfd. Series A 645,000 757,500
69,941 Riggs National Corp. 10.75% Pfd. Series B 1,852,839 1,993,319
34,000 River Bank America 15.0% Pfd. Series A 845,750 782,000
------------ ------------
Total Non-Convertible Preferred Stocks 3,601,139 3,802,819
------------ ------------
FACE
AMOUNT
----------
CORPORATE BONDS -- 0.6%
$ 500,000 Salomon, Inc. Notes 7.125% 8/01/99 500,000 500,300
1,000,000 Dime Savings 10.5% 11/15/05 1,055,462 1,075,000
------------ ------------
Total Corporate Bonds 1,555,462 1,575,300
------------ ------------
U.S. GOVERNMENT AND AGENCY SECURITIES -- 6.3%
750,000 U.S. Treasury Note 6.0% 5/31/98 748,261 748,242
4,750,000 Federal Natl. Mtg. Assn. 6.625% 7/12/00 4,750,744 4,705,469
4,500,000 Federal Home Loan Bank 6.0% 4/12/01 4,505,224 4,493,555
2,000,000 Federal Home Loan Bank 6.0% 4/13/01 1,999,904 1,997,065
2,000,000 Federal Home Loan Bank 6.55% 11/15/02 2,000,000 1,957,417
2,500,000 Federal Natl. Mtg. Assn. 7.55% 6/10/04 2,498,320 2,487,500
1,000,000 Federal Home Loan Bank 6.44% 11/28/05 1,001,364 956,875
------------ ------------
Total U.S. Government and Agency Securities 17,503,817 17,346,123
------------ ------------
SHORT-TERM SECURITIES -- 8.1%
10,364,200 Norwest U.S. Government Money Market Fund 10,364,200 10,364,200
1,170,000 U.S. Treasury Bill 4/17/97 1,167,399 1,167,066
5,000,000 U.S. Treasury Bill 5/29/97 4,959,480 4,957,389
1,000,000 U.S. Treasury Note 6.75% 5/31/97 1,000,000 1,001,406
3,000,000 Federal Home Loan Bank Discount Note 6/12/97 2,968,440 2,967,637
2,000,000 U.S. Treasury Bill 7/24/97 1,967,130 1,966,458
------------ ------------
Total Short-Term Securities 22,426,649 22,424,156
------------ ------------
Total Investments in Securities $232,637,497 275,852,411
------------ ------------
------------
Other Liabilities in Excess of Other Assets -- (0.1%) (255,036)
------------
Total Net Assets -- 100% $275,597,375
------------
------------
Net Asset Value Per Share $ 20.988
------------
------------
</TABLE>
*Non-income producing
**This restricted security, exempt from registration under the Securities Act of
1933, was purchased in a private placement and, unless registered under the Act
or exempted from registration, may only be sold to qualified institutional
investors or certain accredited investors.
See accompanying notes to financial statements.
6
<PAGE>
WEITZ SERIES FUND, INC. -- VALUE PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
MARCH 31, 1997
<TABLE>
<S> <C>
Assets:
Investment in securities at value (cost $232,637,497) $275,852,411
Receivable for securities sold 448,335
Accrued interest and dividends receivable 785,478
------------
Total assets 277,086,224
------------
Liabilities:
Accrued expense 5,775
Due to adviser 291,616
Payable for securities purchased 1,191,458
------------
Total liabilities 1,488,849
------------
Net assets applicable to outstanding capital stock $275,597,375
------------
------------
Net assets represented by:
Capital stock outstanding, at par (note 4) 13,131
Additional paid-in capital 215,355,368
Accumulated undistributed net investment income 1,152,564
Accumulated undistributed net realized gains 15,861,398
Net unrealized appreciation of investments (note 5) 43,214,914
------------
Net assets $275,597,375
------------
------------
Net asset value and redemption price per share of outstanding
capital stock (13,131,071 shares outstanding) $ 20.988
------------
------------
</TABLE>
See accompanying notes to financial statements.
7
<PAGE>
WEITZ SERIES FUND, INC. -- VALUE PORTFOLIO
STATEMENT OF OPERATIONS
YEAR ENDED MARCH 31, 1997
<TABLE>
<S> <C>
Investment income:
Dividends $ 3,783,069
Interest 1,806,781
-----------
Total investment income 5,589,850
-----------
Expenses (note 3):
Investment advisory fee 2,514,149
Administrative fee 504,410
Directors fees 20,930
Other expenses 210,695
-----------
Total expenses 3,250,184
-----------
Net investment income 2,339,666
-----------
Realized and unrealized gain on investments:
Realized gain on investments 22,078,674
Net unrealized appreciation of investments 8,381,030
-----------
Net realized and unrealized gain on investments 30,459,704
-----------
Net increase in net assets resulting from operations $32,799,370
-----------
-----------
</TABLE>
See accompanying notes to financial statements.
8
<PAGE>
WEITZ SERIES FUND, INC. -- VALUE PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR ENDED MARCH 31,
1997 1996
-------------- --------------
<S> <C> <C>
Increase in net assets:
From operations:
Net investment income $ 2,339,666 $ 1,300,132
Net realized gain 22,078,674 15,297,344
Net unrealized appreciation 8,381,030 25,480,942
-------------- --------------
Net increase in net assets resulting from operations 32,799,370 42,078,418
-------------- --------------
Distributions to shareholders from:
Net investment income (1,494,741) (3,147,890)
Net realized gain (13,158,732) (8,264,279)
-------------- --------------
Total distributions (14,653,473) (11,412,169)
-------------- --------------
Capital share transactions (note 4):
Proceeds from sales 102,398,781 36,606,902
Payments for redemptions (29,748,582) (26,684,496)
Reinvestment of distributions 14,292,423 11,143,806
-------------- --------------
Total increase from capital share transactions 86,942,622 21,066,212
-------------- --------------
Total increase in net assets 105,088,519 51,732,461
-------------- --------------
Net assets:
Beginning of period 170,508,856 118,776,395
-------------- --------------
End of period $ 275,597,375 $ 170,508,856
-------------- --------------
-------------- --------------
</TABLE>
See accompanying notes to financial statements.
9
<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,
--------------------------------------------------------------------------------------------
1997 1996 1995 1994 1993 1992 1991
------------ ------------ ------------ ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF
PERIOD: $19.457 $15.552 $15.684 $15.526 $13.926 $12.842 $11.854
------------ ------------ ------------ ----------- ----------- ----------- -----------
INCOME (LOSS) FROM INVESTMENT
OPERATIONS:
Net investment income 0.178 0.157 0.144 0.089 0.221 0.360 0.319
Net gains or losses on securities
(realized and unrealized) 2.580 5.247 0.452 0.683 2.199 1.445 1.117
------------ ------------ ------------ ----------- ----------- ----------- -----------
Total from investment operations 2.758 5.404 0.596 0.772 2.420 1.805 1.436
------------ ------------ ------------ ----------- ----------- ----------- -----------
LESS DISTRIBUTIONS:
Dividends from net investment
income (0.125) (0.418) -- (0.023) (0.275) (0.324) (0.380)
Distributions from realized gains (1.102) (1.081) (0.728) (0.591) (0.545) (0.397) (0.068)
------------ ------------ ------------ ----------- ----------- ----------- -----------
Total distributions (1.227) (1.499) (0.728) (0.614) (0.820) (0.721) (0.448)
------------ ------------ ------------ ----------- ----------- ----------- -----------
NET ASSET VALUE, END OF PERIOD $20.988 $19.457 $15.552 $15.684 $15.526 $13.926 $12.842
------------ ------------ ------------ ----------- ----------- ----------- -----------
------------ ------------ ------------ ----------- ----------- ----------- -----------
TOTAL RETURN 14.3% 35.9% 4.1% 4.9% 18.3% 14.3% 12.6%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period ($000) $275,597 $170,509 $118,776 $103,840 $67,617 $35,948 $27,503
Ratio of expenses to average net
assets 1.29% 1.35% 1.42% 1.41% 1.35% 1.40% 1.49%
Ratio of net investment income to
average net assets 0.93% 0.91% 1.06% 0.64% 1.66% 2.75% 2.71%
Portfolio turnover rate 39% 40% 28% 23% 23% 35% 29%
Average commission rate paid (per
share) $0.0476+
<CAPTION>
1990 1989 1988
----------- ----------- -------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF
PERIOD: $11.772 $10.517 $10.792
----------- ----------- -------
INCOME (LOSS) FROM INVESTMENT
OPERATIONS:
Net investment income 0.421 0.335 0.326
Net gains or losses on securities
(realized and unrealized) 0.720 1.238 (0.002)
----------- ----------- -------
Total from investment operations 1.141 1.573 0.324
----------- ----------- -------
LESS DISTRIBUTIONS:
Dividends from net investment
income (0.430) (0.318) (0.487)
Distributions from realized gains (0.629) -- (0.112)
----------- ----------- -------
Total distributions (1.059) (0.318) (0.599)
----------- ----------- -------
NET ASSET VALUE, END OF PERIOD $11.854 $11.772 $10.517
----------- ----------- -------
----------- ----------- -------
TOTAL RETURN 9.6% 15.2% 3.4%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period ($000) $24,540 $16,394 $9,219
Ratio of expenses to average net
assets 1.46% 1.50% 1.50%
Ratio of net investment income to
average net assets 3.71% 3.30% 3.47%
Portfolio turnover rate 49% 25% 68%
Average commission rate paid (per
share)
</TABLE>
+Required by regulations issued in 1995.
See accompanying notes to financial statements.
10
<PAGE>
WEITZ SERIES FUND, INC. -- VALUE PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1997
(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 March 31, 1997, 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.
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. No call
options were written in the year ended March 31, 1997.
11
<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.
(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 or 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. 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 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
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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, 1997.
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 of the Fund for which the
Adviser is being paid a monthly fee. During the year ended March 31, 1997,
the fee was calculated at an average annual rate of .20% of the Portfolio's
average daily net assets.
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. Thirty million of these shares
have been authorized by the Board of Directors to be issued in the series
designated Value Portfolio, of which 13,131,071 shares are outstanding at
March 31, 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>
YEAR ENDED MARCH 31,
1997 1996
-------------- --------------
<S> <C> <C>
Transactions in shares:
Shares issued........................................................ 5,119,390 1,986,630
Shares redeemed...................................................... (1,445,654) (1,491,710)
Reinvested dividends................................................. 694,076 631,158
-------------- --------------
Net increase....................................................... 4,367,812 1,126,078
-------------- --------------
-------------- --------------
</TABLE>
(5) SECURITIES TRANSACTIONS
Purchases and proceeds from maturities or sales of investment securities of
the Portfolio, other than short-term securities, aggregated $103,142,202 and
$93,485,506, respectively. The cost of investments is the same for financial
reporting and Federal income tax purposes. At March 31, 1997, the aggregate
gross unrealized appreciation and depreciation were $62,085,854 and
$18,870,940, respectively.
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INDEPENDENT AUDITOR'S 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, 1997, and the related statement of
operations, the statement of changes in net assets, and the financial highlights
for the year then ended. These financial statements and financial highlights are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements and financial highlights based on our
audit. The statement of changes in net assets for the year ended March 31, 1996,
and the financial highlights for all years prior to April 1, 1996, were audited
by other auditors whose report, dated April 17, 1996, expressed an unqualified
opinion on those statements.
We conducted our audit 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, 1997, by correspondence with the custodian 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 audit provides 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, 1997, the results of
its operations, changes in its net assets, and financial highlights for the year
then ended in conformity with generally accepted accounting principles.
/s/ McGladrey & Pullen, LLP
New York, New York
April 18, 1997
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