<PAGE>
WEITZ SERIES FUND, INC.
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FIXED INCOME PORTFOLIO
QUARTERLY
REPORT
DECEMBER 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. -- 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 December 31, 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
Dec. 31, 1997 10,916 14 8,416 19,346 8.6
</TABLE>
The portfolio's average annual total return for the one and five year periods
ended December 31, 1997, and for the period since inception (December 23, 1988),
was 8.6%, 6.7% 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
$8,090. 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.
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WEITZ SERIES FUND, INC. -- FIXED INCOME PORTFOLIO
DECEMBER 31, 1997 - QUARTERLY REPORT
January 7, 1998
Dear Fellow Shareholder:
The Fixed Income Portfolio's total return for the fourth quarter of 1997
was 2.3%, bringing our total return for the year to 8.6%. This represents a
combination of 6.1% from net investment income (after deducting fees and
expenses) and 2.5% from (unrealized) appreciation of our bonds. 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 8.6% 6.7%
Average Intermediate Investment
Grade Fixed Income Fund* 8.6% 6.8%
</TABLE>
*Source: Lipper Analytical Services
MARKET REVIEW
1997 was a good year for bond investors. The Federal Reserve's interest
rate increase in March proved to be an isolated event. Economic growth remained
strong, jobs were plentiful, and wages were on the rise, yet improved
productivity and events in Asia helped keep inflationary pressures from
building. The result was declining interest rates AND falling inflation which
provided both higher returns and increased purchasing power for fixed income
investors.
The U.S. bond market has been the beneficiary of deflationary events in
Asia. Overbuilding in the 1990's and falling investment returns left many Asian
countries with massive amounts of debt, excess capital stock, and inflated
currencies. The result was a string of
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currency devaluations and an implosion in the value of financial assets which
seemed to be constantly in the news. Foreign investors, seeking the relative
"safety" of U.S. markets, helped push up the values of the dollar and U.S.
stocks and bonds.
How can events in Asia cause deflation? Indonesia, Korea, Malaysia, and
others have excess production capacity in all sorts of products, from steel and
automobiles to semiconductors and consumer electronics. Currency devaluations
have drastically cut the prices of these goods which the countries hope to
export in order to nurse themselves back to health. This should help keep a lid
on prices and could explain why inflation in the U.S. has been low and is still
falling.
OUTLOOK
We are optimistic about the prospects for 1998 because, while interest
rates declined in 1997, the inflation rate fell even further. Thus, real
interest rates (coupon interest rates minus the expected inflation rate) rose
during the year. This means that fixed income investors' purchasing power
increased and that bonds continue to offer reasonable investment value.
We remain convinced that no one can correctly forecast the direction of
interest rates. Before the Asian crisis erupted, most economists felt that the
strong domestic economy would force the Federal Reserve to boost short-term
interest rates further to ward off inflation. Now the same economists believe
deflation could derail our seven year-long economic expansion and that the Fed's
next move may be to ease monetary conditions by cutting the same short-term
rates. Deflation may become a real threat in 1998 but we would rather assume
that inflation is dormant, not dead. At any rate, we are not going to make any
investment that depends on successfully predicting short-term trends in interest
rates.
PORTFOLIO REVIEW
Our portfolio continues to be concentrated in government agencies and
mortgage-related securities rather than corporate bonds. The reason remains the
near-historic low yield premiums the market is placing on the debt of most
corporate securities. In other words, investors have so little fear of default
that they are not demanding enough extra yield to
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compensate for the higher risks of corporate bonds. The strong economy has
certainly enhanced the balance sheets of much of corporate America. However, we
feel the risk of credit spreads widening generally outweighs the rewards and so
we have been especially selective.
The entire portfolio is listed later in this report, but the following
table provides a snapshot of some of the vital characteristics as of December
31:
<TABLE>
<S> <C>
Average Maturity 8 years
Average Duration 3.5 years
Average Coupon 7.2%
30-Day SEC Yield at 12-31-97 6.2%
Average Rating AA
</TABLE>
SHAREHOLDER MEETING
Please mark your calendars for our shareholder meeting on Wednesday, May
27 at 4:00 p.m. We will be meeting at the Omaha Marriott again and at this
point, it looks as if we will be able to avoid having any official business to
conduct. That means that we can spend all our time answering your questions and
talking about the things you want to talk about. Between now and then, we are
always happy to talk with you about your investments or any questions you may
have about our portfolio or our strategy. Please feel free to call anytime.
Best regards,
/S/ WALLACE R. WEITZ /S/ THOMAS CARNEY
Wallace R. Weitz Thomas D. Carney
President, Portfolio Manager Portfolio Manager
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WEITZ SERIES FUND, INC. -- FIXED INCOME PORTFOLIO
SCHEDULE OF INVESTMENTS IN SECURITIES
DECEMBER 31, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
RATING FACE AMOUNT COST VALUE
- --------- ----------- ------------ ------------
<S> <C> <C> <C> <C>
CORPORATE BONDS -- 24.1%
A $ 500,000 Lehman Brothers Holdings Notes 7.625% 7/15/99 $ 500,129 $ 509,840
A 500,000 Salomon, Inc. Sr. Notes 7.125% 8/01/99 500,000 507,082
A 500,000 Phillip Morris Notes 7.125% 8/15/02 500,000 513,024
BBB 500,000 Tenneco, Inc. Notes 8.075% 10/01/02 498,471 533,468
BB+ 48,000 Homeside, Inc. 11.25% 5/15/03 48,000 56,640
250,000 Local Financial Corp. 11.0% 9/08/04 250,000 263,750
BBB 1,000,000 ConAgra, Inc. Sub. Notes 7.4% 9/15/04 1,000,000 1,051,944
BB- 250,000 Century Communications Sr. Notes 9.5% 3/1/05 261,358 263,280
A- 600,000 General Motors Acceptance Corp. Debs. 6.625% 10/15/05 597,256 606,994
BBB- 500,000 Dime Savings 10.5% 11/15/05 528,828 538,750
BB+ 375,000 CalEnergy Sr. Notes 9.5% 9/15/06 406,719 407,470
BBB+ 500,000 National Education Debs. 6.5% 5/15/11 484,075 488,456
AA- 1,000,000 Merrill Lynch 7.15% 7/30/12 1,000,000 1,023,598
AAA 1,000 Berkshire Hathaway, Inc. Debs. 9.75% 1/15/18 1,049 1,054
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Total Corporate Bonds 6,575,885 6,765,350
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MORTGAGE-BACKED SECURITIES -- 22.0%
AAA 48,998 Federal Natl. Mtg Assn. 11.0% 1/01/01
(Avg. Life 1.4 years) 49,867 49,243
AAA 62,862 Federal Home Loan Mtg. Corp. 9.5% 9/01/03
(Avg. Life 2.2 years) 62,862 65,219
AAA 500,000 Federal Natl. Mtg. Assn. REMIC Planned
Amortization Class 7.5% 4/25/19 (Avg. Life 4.1years) 495,763 511,875
AAA 500,000 Federal Natl. Mtg. Assn. REMIC Planned
Amortization Class 6.5% 10/25/18 (Avg. Life 5.5 years) 485,934 497,031
AAA 500,000 Federal Home Loan Mtg. Corp. REMIC Planned
Amortization Class 6.65% 9/15/21 (Avg. Life 6.1 years) 490,434 499,062
AAA 1,000,000 Federal Home Loan Mtg. Corp REMIC Planned
Amortization Class 7.0% 8/15/20 (Avg. Life 6.2 years) 1,003,686 1,015,625
AAA 1,000,000 Federal Home Loan Mtg. Corp. REMIC Planned
Amortization Class 6.75% 12/15/21 (Avg. Life 6.4 years) 991,854 1,008,125
AAA 1,000,000 Federal Home Loan Mtg. Corp. REMIC Planned
Amortization Class 7.0% 4/15/21 (Avg. Life 7.7 years) 975,603 1,019,063
AAA 1,000,000 Federal Home Loan Mtg. Corp. REMIC Planned
Amortization Class 7.0% 9/15/09 (Avg. Life 8.2 years) 1,003,996 1,023,125
AAA 500,000 Federal Home Loan Mtg. Corp. REMIC Planned
Amortization Class 7.0% 7/15/21 (Avg. Life 8.7 years) 495,364 504,375
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Total Mortgage-Backed Securities 6,055,363 6,192,743
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</TABLE>
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WEITZ SERIES FUND, INC. -- FIXED INCOME PORTFOLIO
SCHEDULE OF INVESTMENTS IN SECURITIES, CONTINUED
<TABLE>
<CAPTION>
RATING FACE AMOUNT COST VALUE
- --------- ----------- ------------ ------------
<S> <C> <C> <C> <C>
TAXABLE MUNICIPAL BONDS -- 3.6%
AA+ $ 50,000 Missouri Hsg. Dev. Comm. 8.6% 9/01/05 $ 50,287 $ 50,250
AAA 325,000 Baltimore Maryland 7.25% 10/15/05 329,749 345,129
AAA 235,000 Oklahoma Hsg. Fin. Auth. 8.7% 9/01/13 235,000 236,175
AAA 375,000 Oklahoma Hsg. Fin. Auth. 7.3% 12/01/14 375,000 378,750
------------ ------------
Total Taxable Municipal Bonds 990,036 1,010,304
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U.S. GOVERNMENT AND AGENCY
SECURITIES -- 45.9%
AAA 100,100 U.S. Treasury Zero Coupon Receipts 2/15/98 99,135 99,364
AAA 99,960 U.S. Treasury Zero Coupon Receipts 2/15/99 92,908 93,589
AAA 1,000,000 Federal Home Loan Bank 6.77% 3/20/02 1,000,000 1,001,563
AAA 1,000,000 Federal Natl. Mtg. Assn. 7.54% 6/04/04 1,002,836 1,005,625
AAA 2,500,000 Federal Natl. Mtg. Assn. 7.55% 6/10/04 2,499,193 2,547,656
AAA 100,000 U.S. Treasury Note 8.25% 5/15/05 103,826 105,359
AAA 1,000,000 Federal Home Loan Mtg. Corp. 7.09% 6/01/05 1,001,792 1,015,425
AAA 1,000,000 Federal Natl. Mtg. Assn. 7.27% 8/24/05 1,001,067 1,024,687
AAA 500,000 Federal Home Loan Bank 6.44% 11/28/05 500,620 513,516
AAA 1,000,000 Federal Natl. Mtg. Assn. 6.64% 2/02/06 1,000,000 994,996
AAA 500,000 Federal Home Loan Mtg. Corp. 6.407% 2/22/06 496,951 498,053
AAA 1,000,000 Federal Natl. Mtg. Assn. 7.15% 10/11/06 982,507 1,028,281
AAA 950,000 Federal Natl. Mtg. Assn. 7.44% 11/06/06 952,667 956,828
AAA 1,000,000 Federal Natl. Mtg. Assn. 6.56% 11/26/07 1,000,000 1,005,918
AAA 1,000,000 Federal Home Loan Mtg. Corp. 6.77% 3/21/11 927,688 993,916
------------ ------------
Total U.S. Government and Agency Securities 12,661,190 12,884,776
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<CAPTION>
SHARES
-----------
<S> <C> <C> <C> <C>
NON-CONVERTIBLE PREFERRED STOCKS -- 0.9%
Caa 5,000 Crown American Realty Trust 11.0% Pfd. Series A 250,000 261,250
------------ ------------
<CAPTION>
FACE
AMOUNT
-----------
<S> <C> <C> <C> <C>
SHORT-TERM SECURITIES -- 2.3%
$ 647,984 Norwest U.S. Government Money Market Fund 647,984 647,984
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Total Investments in Securities $ 27,180,458 27,762,407
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------------
Other Assets Less Liabilities -- 1.2% 337,386
------------
Total Net Assets -- 100% $ 28,099,793
------------
------------
Net Asset Value Per Share $ 11.071
------------
------------
</TABLE>
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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.
