<PAGE>
- --------------------------------------------------------------------------------
WEITZ SERIES FUND, INC.
VALUE PORTFOLIO
SEMI-ANNUAL
REPORT
SEPTEMBER 30, 1998
ONE PACIFIC PLACE, SUITE 600
1125 SOUTH 103 STREET
OMAHA, NEBRASKA 68124-6008
402-391-1980
800-232-4161
402-391-2125 FAX
<PAGE>
<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 September 30, 1998, calculated in accordance with SEC standardized
formulas.
<TABLE>
<CAPTION>
VALUE OF VALUE OF VALUE OF
INITIAL CUMULATIVE CUMULATIVE TOTAL ANNUAL
$25,000 CAPITAL GAIN REINVESTED VALUE OF RATE OF
PERIOD ENDED INVESTMENT DISTRIBUTIONS DIVIDENDS SHARES RETURN
- ---------------- ----------- ------------- ----------- ---------- ---------
<S> <C> <C> <C> <C> <C>
May 9, 1986 $ 25,000 -- -- $ 25,000 --
Dec. 31, 1986 25,863 -- -- 25,863 3.5%+
Dec. 31, 1987 24,253 264 1,205 25,722 -0.5
Dec. 31, 1988 27,430 299 2,223 29,952 16.5
Dec. 31, 1989 30,763 2,103 3,701 36,567 22.1
Dec. 31, 1990 28,040 2,112 4,500 34,652 -5.2
Dec. 31, 1991 33,940 3,811 6,475 44,226 27.6
Dec. 31, 1992 36,350 6,019 7,884 50,253 13.6
Dec. 31, 1993 42,010 9,114 9,199 60,323 20.0
Dec. 31, 1994 36,075 10,414 7,899 54,388 -9.8
Dec. 31, 1995 45,955 17,447 11,855 75,257 38.4
Dec. 31, 1996 51,478 24,054 13,792 89,324 18.7
Dec. 31, 1997 62,878 42,824 18,398 124,100 38.9
Sept. 30, 1998 67,218 55,464 19,668 142,350 14.7++
</TABLE>
The portfolio's average annual total return for the one, five and ten year
periods ending September 30, 1998, was 23.5%, 19.6%, and 16.9%, 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 $40,413, and the total amount of income distributions reinvested was
$9,949. 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 period 5/9/86 through 12/31/86
++Return is for the period 1/1/98 through 9/30/98
1
<PAGE>
WEITZ SERIES FUND, INC. -- VALUE PORTFOLIO
SEPTEMBER 30, 1998 - SEMI-ANNUAL REPORT
October 14, 1998
Dear Fellow Shareholder:
After an unusually strong first half of 1998, we gave back some of our
gains in the 3rd quarter. Our net asset value per share dropped by -7.3% (vs.
- -9.9% for the S&P 500), bringing our gain for the first 9 months of the year to
+14.7% (vs. +6.0% for the S&P). Our longer-term performance (after deducting
expenses) vs. the S&P 500 and the average fund in our category is shown below:
<TABLE>
<CAPTION>
PERIODS ENDING 9-30-98
1 YEAR 5 YEARS 10 YEARS
--------- --------- -----------
<S> <C> <C> <C>
Value Portfolio +23.5% +19.6% +16.9%
S&P 500 +9.1 +19.9 +17.2
Average Growth and Income Fund* -1.0 +15.2 +14.2
</TABLE>
* Source: Lipper Analytical Services
RECENT MARKET WEAKNESS
The U.S. stock market has been drifting lower since mid-July. Weak Asian,
Russian, and Latin American economies have begun to have an impact on our
economy, and fears of slowing earnings growth for American companies have led
investors to sell stocks. Global speculators, using huge amounts of borrowed
money, have sustained losses on their foreign stock, bond, and currency trades,
and more recently on their U.S. government bond and mortgage positions. Lenders
have suddenly become remorseful and risk averse, calling in loans and forcing
liquidation of collateral (stocks, bonds, and mortgages) in already-weak
markets.
Chaos in the credit markets has been very unsettling for stock investors
and is making it difficult for many companies to conduct business as usual. The
higher cost and lower availability of credit may continue for some time as both
lenders and borrowers work to strengthen their balance sheets before their
year-end audits. For companies with strong underlying businesses and appropriate
amounts of leverage, this period may be annoying -- temporarily depressing
earnings or disrupting expansion and acquisition plans -- but should not cause
permanent damage.
2
<PAGE>
The larger, underlying issue for the stock market is the fact that stocks
in general had become over-valued. We have discussed this in previous letters.
It was impossible to predict when the correction would come, or what the
catalyst would be, but long-term investors will recognize this as an inevitable
part of investment life. If we had sold all our stocks when they first became
expensive by historical standards, we would have been out of the market for the
past several years and missed significant profits. Our plan is to continue to
evaluate companies one by one and to buy and hold those with good long-term
prospects. The trick in a bear market is to have the courage to buy good
businesses when others are fearful, but to be patient enough to buy them at
bargain prices.
OUTLOOK FOR OUR PORTFOLIO
Generally speaking, we believe that investors have over-reacted to news
and rumors about financial companies (of which we own many) and under-reacted to
the dimming prospects for some of the very largest "blue chip" or "nifty-fifty"
stocks (of which we own few). We cannot know how this will play out in the short
run, but we invest on the premise that value will eventually be recognized. Here
are some thoughts on the major holdings in our fund:
FINANCIAL SERVICE COMPANIES
Companies that originate or buy mortgages or other loans, finance them
temporarily with short-term credit, then either sell them or hold them in their
portfolios are exposed to liquidity risk during the interim financing stage. We
own a few of these companies (aggregate exposure 3-4% of the portfolio). Some
have had some anxious moments as the credit window closed, literally, overnight.
They do not have complete control over their destinies, but for these companies
as a group, we believe that generally their upside potential is far greater than
the downside risk.
Most of our financial stocks are banks and thrifts, mortgage bankers who
do NOT have significant liquidity risk, or investment companies. These companies
might face temporarily higher borrowing costs but are very sound and should cope
well with the unsettled markets. Their stocks have been weak, as investors sell
first and ask questions later, but their prospects are good.
A few of our financials will be clear beneficiaries of capital market
illiquidity. Fannie Mae and Freddie Mac are government agencies that own high
quality residential mortgages. They have virtually unlimited access to cheap
credit and they are buyers of mortgages that are being dumped at distress prices
by weak sellers. Nevertheless, their stocks have also dropped sharply. Other
potential beneficiaries are our over-capitalized banks and Berkshire Hathaway,
which
3
<PAGE>
has perhaps $25-30 billion of buying power available to take advantage of
distress situations. (Carol Loomis, in the October 26 issue of FORTUNE,
describes Berkshire's attempt to take over the troubled Long-Term Capital hedge
fund -- interesting reading.)
CABLE TELEVISION
There has been no noticeable negative economic impact on the cable industry.
If the credit markets remain unstable for a long time, financing costs could
rise, but most of our cable companies are rapidly approaching the point of being
net cash generators. The stocks have been especially strong in recent quarters
because of takeover activity in the industry, and acquisitions could be slowed
by financing problems, but the fundamentals of the business remain very strong.
CELLULAR TELEPHONE
As with cable, cellular telephone growth and profitability have not been
affected by recent credit market turmoil. Financing costs could rise temporarily
and a recession would undoubtedly dampen subscriber growth and phone usage.
However, the only tangible impact on our portfolio has been the disruption of
merger plans for Centennial Cellular. The buyer wants to pay $43.50 per share
for Centennial, and the owners want to sell, but the investment bankers are
having trouble arranging financing, and the stock price has fallen to the
mid-20's. My first choice would be to sell at $43.50 now, but if the deal falls
through because of the state of the credit market, we should still earn a good
return over the years from today's price. We will buy more and be patient.
(Another of our cellular companies, Vanguard, recently received a takeover bid
from AT&T, and financing should not be an issue for them.)
REAL ESTATE
Real estate investors, especially real estate investment trusts (REITs),
have been aggressive buyers of office buildings, hotels, apartments and other
commercial properties over the past several years. Easily available credit has
been a major contributor to the demand for real estate and the resulting higher
prices. Going forward, tighter credit may lead to temporarily lower real estate
prices (and lower stock prices), but it may also create opportunities for
well-financed companies such as Hilton, Catellus, and Forest City.
OUTLOOK
I have no way of predicting how serious this liquidity crisis will get,
how long it will last, or when our stocks will begin to rise again. Our goal is
to be cautious when others are
4
<PAGE>
exuberant and confident when others are fearful, and the current environment is
definitely one of the latter. I feel good about our portfolio and its long-term
prospects, but shareholders should understand that rebuilding confidence and
liquidity may take a while.
SHAREHOLDER MEETING
On October 6, we held a special shareholder meeting to increase the
authorized number of shares of the Weitz Series Fund. The proposal passed
easily, and we really appreciate your taking the time to sign and return your
proxy cards.
The official business took 4 minutes, but the more interesting part of the
meeting was the informal question and answer period after the business was
completed. The questions were good, and I think the answers were generally
informative and mostly comforting. Many of the subjects which were discussed
have been incorporated into this letter. We will be having our regular
shareholder information meeting in the Spring, probably in May, and I would
encourage you to attend, meet your fellow shareholders, and ask any questions
you may have.
In the meantime, both our client service and investment people are
available to answer your questions. We all have been unusually busy in recent
weeks because we have a large number of new shareholders and the market news has
been unsettling, but most shareholders have been very patient with us. We
appreciate that.
Sincerely,
/s/ Wallace R. Weitz
--------------------
Wallace R. Weitz
President, Portfolio
Manager
5
<PAGE>
WEITZ SERIES FUND, INC. -- VALUE PORTFOLIO
SCHEDULE OF INVESTMENTS IN SECURITIES
SEPTEMBER 30, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES
OR UNITS COST VALUE
---------- ------------ ------------
<C> <S> <C> <C>
COMMON STOCKS -- 71.7%
AUTO SERVICES -- 0.2%
90,000 Insurance Auto Auctions, Inc.* $ 990,000 $ 1,125,000
------------ ------------
BANKING -- 3.3%
108,300 Astoria Financial Corp. 4,322,247 4,562,137
310,070 Commercial Federal Corp. 7,383,056 7,306,024
702,800 Golden State Bancorp, Inc.* 14,550,911 14,012,075
------------ ------------
26,256,214 25,880,236
------------ ------------
CABLE TELEVISION -- 9.7%
205,500 Adelphia Communications Corp. CL A* 1,414,656 8,040,188
1,349,000 Century Communications Corp. CL A* 7,990,357 32,207,375
187,000 Comcast Corp. Special CL A 2,102,559 8,777,313
245,000 MediaOne Group, Inc.* 4,156,023 10,887,187
394,400 Tele-Communications, Inc. CL A* 6,372,921 15,430,900
------------ ------------
22,036,516 75,342,963
------------ ------------
CONSUMER PRODUCTS AND SERVICES -- 1.2%
81,000 American Classic Voyages Co.* 806,925 1,194,750
331,900 Lab Holdings, Inc. 7,220,731 5,061,475
4,875 Lady Baltimore Foods, Inc. 227,781 266,906
270,000 Protection One, Inc. 463,074 2,632,500
------------ ------------
8,718,511 9,155,631
------------ ------------
FEDERAL AGENCIES -- 5.0%
90,000 Federal Home Loan Mortgage Corp. 385,147 4,449,375
75,000 Federal National Mortgage Association 1,270,544 4,818,750
915,000 SLM Holding Corp. 26,520,073 29,680,313
------------ ------------
28,175,764 38,948,438
------------ ------------
FINANCIAL SERVICES -- 5.6%
70,000 American Express Co. 2,031,996 5,433,750
90 Berkshire Hathaway, Inc. CL A* 826,550 5,364,000
2,455,500 Imperial Credit Industries, Inc.* 35,066,042 15,346,875
30,000 PS Group, Inc.* 233,125 348,750
714,300 United Asset Management Corp. 17,988,018 15,357,450
323,000 United Panam Financial Corp.* 3,191,956 1,816,875
------------ ------------
59,337,687 43,667,700
------------ ------------
INFORMATION AND DATA PROCESSING -- 0.7%
284,200 BRC Holdings, Inc.* 3,457,554 4,831,400
180,000 Intelligent Systems Corp.* 380,869 399,384
------------ ------------
3,838,423 5,230,784
------------ ------------
</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 VALUE
---------- ------------ ------------
<C> <S> <C> <C>
LODGING -- 1.5%
700,000 Hilton Hotels Corp. $ 13,419,183 $ 11,943,750
------------ ------------
MEDIA AND ENTERTAINMENT -- 9.5%
50,537 Chris-Craft Industries, Inc.* 2,232,856 2,233,104
57,200 Daily Journal Corp.* 1,254,216 2,002,000
300,000 Gabelli Global Multimedia Trust, Inc. 2,071,150 2,606,250
135,000 TCI Satellite Entertainment CL A* 831,286 388,125
515,000 Tele-Communications Liberty Media CL A* 6,755,834 18,894,063
800,000 Tele-Communications TCI Ventures Group A* 10,567,277 14,350,000
843,200 Valassis Communications, Inc.* 23,890,167 33,728,000
------------ ------------
47,602,786 74,201,542
------------ ------------
MORTGAGE BANKING -- 5.6%
430,000 Countrywide Credit Industries, Inc. 11,250,540 17,898,750
555,500 Franchise Mortgage Acceptance Co.* 5,318,083 3,680,187
334,000 New Century Financial Corp.* 3,295,250 2,525,875
1,034,900 Resource Bancshares Mtg. Grp., Inc. 14,657,457 18,369,475
188,999 WMF Group, Limited* 1,749,555 1,346,618
------------ ------------
36,270,885 43,820,905
------------ ------------
REAL ESTATE AND CONSTRUCTION -- 0.8%
173,100 Catellus Development Corp.* 1,372,261 2,250,300
180,000 Forest City Enterprises, Inc. CL A 2,159,453 3,780,000
30,000 Syntroleum Corp.* 95,750 315,000
------------ ------------
3,627,464 6,345,300
------------ ------------
REAL ESTATE INVESTMENT TRUSTS -- 9.7%
655,000 Capital Automotive REIT 9,543,275 7,655,312
771,300 Dynex Capital, Inc. 7,404,513 6,507,844
1,050,000 Fortress Investment Corp. 20,835,410 18,900,000
301,300 Hanover Capital Mortgage Holdings, Inc. 4,619,081 2,071,438
72,000 Healthcare Financial Partners Units** 7,200,000 7,200,000
465,000 IMPAC Mortgage Holdings, Inc. 6,720,289 6,277,500
350,000 Imperial Credit Commercial Mtg. Inv. Corp. 4,062,500 3,412,500
475,000 NovaStar Financial, Inc. 7,723,831 6,175,000
1,198,117 Redwood Trust, Inc. 28,610,264 17,372,696
------------ ------------
96,719,163 75,572,290
------------ ------------
</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 VALUE
---------- ------------ ------------
<C> <S> <C> <C>
TELECOMMUNICATIONS -- 18.9%
236,800 Alltel Corp. $ 5,730,786 $ 11,218,400
90,000 Airtouch Communications, Inc.* 2,453,614 5,130,000
510,900 Cellular Communications of Puerto Rico* 5,232,014 5,939,212
1,221,500 Centennial Cellular Corp. CL A* 26,757,985 39,088,000
512,000 Corecomm Limited* 5,249,525 5,568,000
1,281,500 Telephone and Data Systems, Inc. 51,555,257 44,692,313
485,500 United States Cellular Corp.* 14,300,811 14,473,969
1,105,600 Vanguard Cellular Systems, Inc. CL A* 19,686,262 21,006,400
------------ ------------
130,966,254 147,116,294
------------ ------------
Total Common Stocks 477,958,850 558,350,833
------------ ------------
WARRANTS -- 0.2%
338,100 Hanover Capital Mtg. Holdings, Inc. , Expiring 9/15/00 458,561 63,394
350,000 Novastar Financial, Inc., Expiring 2/03/01 1,415,700 1,575,000
------------ ------------
Total Warrants 1,874,261 1,638,394
------------ ------------
NON-CONVERTIBLE PREFERRED STOCKS -- 0.5%
10,000 Community Bank Pasadena CA 13% Pfd. Series B 257,550 268,750
15,000 Crown American Realty Trust 11% Pfd. Series A 750,000 741,563
30,000 Prime Retail, Inc. 10.5% Pfd. Series A 645,000 727,500
34,000 RB Asset, Inc. 15.0% Pfd. Series A 845,750 612,000
69,941 Riggs National Corp. 10.75% Pfd. Series B 1,852,839 1,853,436
------------ ------------
Total Non-Convertible Preferred Stocks 4,351,139 4,203,249
------------ ------------
<CAPTION>
FACE
AMOUNT
----------
<C> <S> <C> <C>
CORPORATE BONDS -- 1.1%
$ 500,000 Salomon, Inc. Notes 7.125% 8/01/99 500,000 505,481
4,500,000 USA Networks, Inc. 7.0% 7/01/03 4,401,434 4,500,000
750,000 Local Financial Corp. 11.0% 9/08/04 750,000 768,750
1,000,000 Dime Savings 10.5% 11/15/05 1,047,079 1,055,000
2,000,000 Harcourt General 6.5% 5/15/11 1,939,862 1,890,000
------------ ------------
Total Corporate Bonds 8,638,375 8,719,231
------------ ------------
</TABLE>
See accompanying notes to financial statements.
8
<PAGE>
WEITZ SERIES FUND, INC. -- VALUE PORTFOLIO
SCHEDULE OF INVESTMENTS IN SECURITIES, CONTINUED
<TABLE>
<CAPTION>
FACE
AMOUNT COST VALUE
---------- ------------ ------------
<C> <S> <C> <C>
U.S. GOVERNMENT AND AGENCY SECURITIES -- 7.3%
$15,000,000 U.S. Treasury Note 5.5% 3/31/00 $ 14,980,652 $ 15,220,320
4,750,000 Federal Natl. Mtg. Assn. 6.625% 7/12/00 4,750,408 4,906,242
13,000,000 Federal Home Loan Bank 5.5% 7/14/00 12,974,375 13,181,441
9,000,000 Federal Home Loan Bank 6.6% 10/09/02 9,000,000 9,011,358
2,500,000 Federal Natl. Mtg. Assn. 7.55% 6/10/04 2,499,457 2,545,663
3,000,000 Federal Home Loan Bank 6.04% 9/08/05 3,000,000 3,071,928
1,000,000 Federal Home Loan Bank 6.44% 11/28/05 1,001,128 1,088,081
1,000,000 Federal Natl. Mtg. Assn. 7.44% 11/06/06 1,000,168 1,002,916
6,000,000 Federal Natl. Mtg. Assn. 6.56% 11/26/07 6,000,000 6,370,950
------------ ------------
Total U.S. Government and Agency Securities 55,206,188 56,398,899
------------ ------------
SHORT-TERM SECURITIES -- 19.3%
49,693,695 Norwest U.S. Government Money Market Fund 49,693,695 49,693,695
1,000,000 U.S. Treasury Bill 10/01/98 1,000,000 1,000,000
2,000,000 U.S. Treasury Bill 11/05/98 1,990,200 1,992,300
15,000,000 Federal Home Loan Mortgage Corp. Discount Note 11/10/98 14,910,000 14,914,665
14,500,000 Federal Home Loan Bank Discount Note 12/02/98 14,367,897 14,372,893
20,000,000 Federal Farm Credit Bank 5.54% 1/04/99 20,000,000 20,028,780
9,000,000 Federal Farm Credit Bank Discount Note 1/07/99 8,869,415 8,877,006
10,365,000 U.S. Treasury Bill 1/07/99 10,223,672 10,245,367
15,000,000 Federal Natl. Mtg. Assn. Discount Note 1/14/99 14,765,500 14,780,370
14,500,000 U. S. Treasury Bill 1/14/99 14,292,136 14,318,141
------------ ------------
Total Short-Term Securities 150,112,515 150,223,217
------------ ------------
Total Investments in Securities $698,141,328 779,533,823
------------ ------------
------------
Other Liabilities in Excess of Other Assets -- (0.1)% (648,326)
------------
Total Net Assets -- 100% $778,885,497
------------
------------
Net Asset Value Per Share $ 26.887
------------
------------
</TABLE>
*Non-income producing
**Each unit consists of five shares of common stock and one stock purchase
warrant.
See accompanying notes to financial statements.
9
<PAGE>
WEITZ SERIES FUND, INC. -- VALUE PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
SEPTEMBER 30, 1998
(UNAUDITED)
<TABLE>
<S> <C>
Assets:
Investment in securities at value (cost $698,141,328) $779,533,823
Cash 313,162
Accrued interest and dividends receivable 2,096,401
Prepaid expense 17,344
------------
Total assets 781,960,730
------------
Liabilities:
Due to adviser 715,987
Payable for securities purchased 2,359,246
------------
Total liabilities 3,075,233
------------
Net assets applicable to outstanding capital stock $778,885,497
------------
------------
Net assets represented by:
Capital stock outstanding, at par (note 4) 28,969
Additional paid-in capital 656,512,043
Accumulated undistributed net investment income 3,337,737
Accumulated undistributed net realized gains 37,614,253
Net unrealized appreciation (note 5) 81,392,495
------------
Net assets $778,885,497
------------
------------
Net asset value and redemption price per share of outstanding
capital stock (28,969,102 shares outstanding) $ 26.887
------------
------------
</TABLE>
See accompanying notes to financial statements.
10
<PAGE>
WEITZ SERIES FUND, INC. -- VALUE PORTFOLIO
STATEMENT OF OPERATIONS
SIX MONTHS ENDED SEPTEMBER 30, 1998
(UNAUDITED)
<TABLE>
<S> <C>
Investment income:
Dividends $ 2,367,584
Interest 4,603,958
------------
Total investment income 6,971,542
------------
Expenses (note 3):
Investment advisory fee 2,953,286
Administrative fee 520,566
Director's fees 6,239
Other expenses 153,711
------------
Total expenses 3,633,802
------------
Net investment income 3,337,740
------------
Realized and unrealized gain (loss) on investments:
Realized gain on investments 37,614,253
Net unrealized depreciation of investments (68,179,524)
------------
Net realized and unrealized loss on investments (30,565,271)
------------
Net decrease in net assets resulting from operations $(27,227,531)
------------
------------
</TABLE>
See accompanying notes to financial statements.
11
<PAGE>
WEITZ SERIES FUND, INC. -- VALUE PORTFOLIO
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS ENDED
SEPT. 30, 1998 YEAR ENDED
(UNAUDITED) MARCH 31, 1998
----------------- --------------
<S> <C> <C>
Increase in net assets:
From operations:
Net investment income $ 3,337,740 $ 2,960,008
Net realized gain 37,614,253 51,507,135
Net unrealized appreciation (depreciation) (68,179,524) 106,357,105
----------------- --------------
Net increase (decrease) in net assets resulting from operations (27,227,531) 160,824,248
----------------- --------------
Distributions to shareholders from:
Net investment income -- (4,210,726)
Net realized gain (32,440,396) (34,829,986)
----------------- --------------
Total distributions (32,440,396) (39,040,712)
----------------- --------------
Capital share transactions (note 4):
Proceeds from sales 482,045,487 57,926,067
Payments for redemptions (122,733,002) (45,164,817)
Reinvestment of distributions 30,964,454 38,134,324
----------------- --------------
Total increase from capital share transactions 390,276,939 50,895,574
----------------- --------------
Total increase in net assets 330,609,012 172,679,110
----------------- --------------
Net assets:
Beginning of period 448,276,485 275,597,375
----------------- --------------
End of period $ 778,885,497 $448,276,485
----------------- --------------
----------------- --------------
</TABLE>
See accompanying notes to financial statements.
12
<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>
SIX MONTHS
ENDED
SEPT. 30, YEAR ENDED MARCH 31,
1998 ----------------------------------------------------------------------------------------
(UNAUDITED) 1998 1997 1996 1995 1994 1993 1992 1991 1990
---------- -------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING
OF PERIOD: $29.311 $ 20.988 $ 19.457 $ 15.552 $ 15.684 $ 15.526 $ 13.926 $ 12.842 $ 11.854 $ 11.772
---------- -------- -------- -------- -------- -------- -------- -------- -------- --------
INCOME (LOSS) FROM
INVESTMENT OPERATIONS:
Net investment income 0.221 0.219 0.178 0.157 0.144 0.089 0.221 0.360 0.319 0.421
Net gains or losses on
securities
(realized and
unrealized) (0.603) 11.026 2.580 5.247 0.452 0.683 2.199 1.445 1.117 0.720
---------- -------- -------- -------- -------- -------- -------- -------- -------- --------
Total from investment
operations (0.382) 11.245 2.758 5.404 0.596 0.772 2.420 1.805 1.436 1.141
---------- -------- -------- -------- -------- -------- -------- -------- -------- --------
LESS DISTRIBUTIONS:
Dividends from net
investment income -- (0.313) (0.125) (0.418) -- (0.023) (0.275) (0.324) (0.380) (0.430)
Distributions from
realized gains (2.042) (2.609) (1.102) (1.081) (0.728) (0.591) (0.545) (0.397) (0.068) (0.629)
---------- -------- -------- -------- -------- -------- -------- -------- -------- --------
Total distributions (2.042) (2.922) (1.227) (1.499) (0.728) (0.614) (0.820) (0.721) (0.448) (1.059)
---------- -------- -------- -------- -------- -------- -------- -------- -------- --------
NET ASSET VALUE, END OF
PERIOD $26.887 $ 29.311 $ 20.988 $ 19.457 $ 15.552 $ 15.684 $ 15.526 $ 13.926 $ 12.842 $ 11.854
---------- -------- -------- -------- -------- -------- -------- -------- -------- --------
---------- -------- -------- -------- -------- -------- -------- -------- -------- --------
TOTAL RETURN (1.6%) 58.8% 14.3% 35.9% 4.1% 4.9% 18.3% 14.3% 12.6% 9.6%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
($000) $778,885 $448,276 $275,597 $170,509 $118,776 $103,840 $ 67,617 $ 35,948 $ 27,503 $ 24,540
Ratio of expenses to
average net assets 1.23%* 1.27% 1.29% 1.35% 1.42% 1.41% 1.35% 1.40% 1.49% 1.46%
Ratio of net investment
income to average net
assets 1.13%* 0.87% 0.93% 0.91% 1.06% 0.64% 1.66% 2.75% 2.71% 3.71%
Portfolio turnover rate 19% 39% 39% 40% 28% 23% 23% 35% 29% 49%
</TABLE>
* Annualized
See accompanying notes to financial statements.
13
<PAGE>
WEITZ SERIES FUND, INC. -- VALUE PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1998
(UNAUDITED)
(1) ORGANIZATION
Weitz Series Fund, Inc. (the "Fund"), is registered under the Investment
Company Act of 1940 as an open-end diversified management investment company
issuing shares in series, each series representing a distinct portfolio with
its own investment objectives and policies. At September 30, 1998, the Fund
had four series: 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
invests 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 value determined using the following valuation
methods:
- Securities traded on a national or regional securities exchange and
over-the-counter securities traded on the NASDAQ national market
are valued at the last sales price; if there were no sales on that
day, securities are valued at the mean between the latest available
and representative bid and asked prices.
- Securities not listed on an exchange are valued at the mean between
the latest available and representative bid and ask prices.
- The value of certain debt securities for which market quotations
are not readily available may be based upon current market prices
of securities which are comparable in coupon, rating and maturity
or an appropriate matrix utilizing similar factors.
- The value of securities for which market quotations are not readily
available, including restricted and not readily marketable
securities, is determined in good faith under the supervision of
the Fund's Board of Directors.
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
14
<PAGE>
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.
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 AND DISTRIBUTIONS TO SHAREHOLDERS
Security transactions are accounted for on the date the securities are
purchased or sold (trade date). Income dividends and dividends on short
positions are recorded on the ex-dividend date. Interest, including
amortization of discount or premium, is accrued as earned. Distributions
to shareholders are recorded on the ex-dividend date.
Realized gains or losses are determined by specifically identifying the
security sold.
(d)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.
(e)SECURITIES SOLD SHORT
The Portfolio periodically engages in selling securities short, which
obligates the Portfolio to replace a security borrowed by purchasing the
same security at the current market value. The Portfolio would incur a
loss if the price of the security increases between the date of the short
sale and the date on which the Portfolio replaces the borrowed security.
The Portfolio would realize a gain if the price of the security declines
between those dates.
15
<PAGE>
The Portfolio is required to establish a margin account with the broker
lending the security sold short. While the short sale is outstanding, the
broker retains the proceeds of the short sale. The Portfolio will place
in a segregated account a sufficient amount of cash and securities as
required by applicable federal securities regulations in order to cover
the transaction.
(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 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 September 30, 1998.
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 September 30,
1998, the fee was calculated at an average annual rate of .18% 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-one million five hundred
thousand of these shares have been authorized by the Board of Directors to
be issued in the series designated Value Portfolio. 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
SEPTEMBER 30, 1998 YEAR ENDED
(UNAUDITED) MARCH 31, 1998
------------------ --------------
<S> <C> <C>
Transactions in shares:
Shares issued..................................................... 16,936,673 2,346,283
Shares redeemed................................................... (4,368,045) (1,914,458)
Reinvested dividends.............................................. 1,106,783 1,730,795
---------- --------------
Net increase.................................................... 13,675,411 2,162,620
---------- --------------
---------- --------------
</TABLE>
16
<PAGE>
(5) SECURITIES TRANSACTIONS
Purchases and proceeds from maturities or sales of investment securities of
the Portfolio, other than short-term securities, aggregated $380,096,070 and
$90,452,233, respectively. The cost of investments is the same for financial
reporting and Federal income tax purposes. At September 30, 1998, the
aggregate gross unrealized appreciation and depreciation, based on cost for
Federal income tax purposes, were $149,265,192 and $67,872,697,
respectively.
Transactions relating to covered call options during the six months ended
September 30, 1998, are summarized as follows:
<TABLE>
<CAPTION>
NUMBER OF
OPTIONS PREMIUM
----------- ---------
<S> <C> <C>
Options written, beginning of period............................................ 99,500 528,543
Options written, during the period.............................................. 22,500 225,066
Options expired, during the period.............................................. (42,000) (169,733)
Options exercised during the period............................................. (80,000) (583,876)
----------- ---------
Options outstanding, end of period.............................................. -- --
----------- ---------
----------- ---------
</TABLE>
17
<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 Minnesota, 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.
