<PAGE>
- --------------------------------------------------------------------------------
WEITZ SERIES FUND, INC.
VALUE PORTFOLIO
QUARTERLY
REPORT
JUNE 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 June 30, 1998, 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
Dec. 31, 1997 62,878 42,824 18,398 124,100 38.9
June 30, 1998 72,518 59,837 21,218 153,573 23.8++
</TABLE>
The portfolio's average annual total return for the one, five and ten year
periods ending June 30, 1998, was 47.8%, 23.0%, and 18.1%, 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 6/30/98
1
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WEITZ SERIES FUND, INC. -- VALUE PORTFOLIO
JUNE 30, 1998 - QUARTERLY REPORT
July 4, 1998
Dear Fellow Shareholder:
The 2(nd) quarter of 1998 was another good one for the Value Portfolio.
Total return for the quarter was +6.2% (vs. +3.3% for the S&P 500). This brings
our first half return to +23.8% (vs. +17.7% for the S&P 500). The table below
shows average annual returns for our fund (after deducting all fees and
expenses), the S&P 500, and the average mutual fund in our category (according
to Lipper Analytical Services).
<TABLE>
<CAPTION>
ONE YEAR FIVE YEARS TEN YEARS
------------- ------------- -------------
<S> <C> <C> <C>
Value Portfolio 47.8% 23.0% 18.1%
S&P 500 Index 30.1% 23.1% 18.5%
Average Growth & Income Mutual Fund 22.9% 19.0% 15.8%
</TABLE>
For several years, our portfolio has been concentrated in three areas:
cable television and entertainment, cellular telecommunications, and financial
services. This concentration caused us to under-perform the market in 1994, but
generally it has served us well. These groups of stocks have been especially
strong in the past 18 months, and within the last 2 WEEKS, two of our largest
holdings have received takeover bids. The effect of takeovers in all 3 groups
have been direct, since we have owned several targets, and indirect, as
speculative buying in POTENTIAL takeover candidates drives up the prices of
other portfolio holdings. In short, nearly everything has gone our way in the
past several quarters.
One of our best stocks during this period, Centennial Cellular, offers a
good example of the hazards, as well as the rewards, of concentration.
Centennial received a bid of $43 1/2 per share last week. At that price, we
would receive $35.6 million for stock with a cost basis of $12.2 million after a
weighted average holding period of roughly 2 years. HOWEVER, we bought our first
stock about 4 years ago at $20 per share and it promptly went down. We rechecked
our assumptions repeatedly and bought more shares all the way down, until nearly
3 years later, in April of 1997, we bought stock at $8 3/4. By that time, we
owned almost 800,000 shares with an unrealized LOSS of $5-6 million.
2
<PAGE>
The doubling of the stock price from June 1994 to June 1998 represents an
average gain of about 20% per year, which probably (very) approximately matches
the gradual increase in business value over that period. The fact that the stock
dropped 56% during the first 2 3/4 years of this period didn't (necessarily)
mean that we had lost our collective investment minds, and the gain of 468%
during the subsequent 1 1/4 years did not mean we had found the secret of
perpetual profits. It was just another typical multi-year period during which
investors' emotions determined the stock price in the short run, but economic
reality eventually prevailed.
We hope that our recent experience with mortgage REIT's will prove to be
the prelude to a similar story for some future report. Conditions in the
industry are currently awful, and the stocks have been very weak this year,
especially in the 2(nd) quarter. Falling interest rates have encouraged
borrowers to prepay their mortgages in order to refinance at lower rates, thus
causing the REIT's to lose valuable mortgage investments from their portfolios.
Also, the "spread" between their cost of funds and the yields on the mortgages
in their portfolio is narrower than usual, causing a squeeze on profits.
Our presumption is that the current conditions are temporary, and that for
REIT's which have acted conservatively and protected their balance sheets, the
outlook is very good. We have used weakness in Redwood Trust, Novastar
Financial, and Hanover Capital Mortgage to add significantly to our positions.
In fact, our funds, collectively, are the largest shareholders of each of these
three companies. We did not buy our initial positions EXPECTING the stocks to go
down, but if we turn out to be right about these stocks, our eventual returns
will be greater because we were able to "average down" in the early stages of
our investment, as we did with Centennial Cellular.
THE OUTLOOK
The short-term outlook is unfathomable, as usual. It still seems plausible
to me that investors have been "double-counting" the good economic news and that
stock prices are high. This is no disaster, but the odds of a correction -- or
at least an extended period of sideways movement -- are high.
3
<PAGE>
What DOES trouble me is that some investors' expectations are becoming
unrealistic. Our shareholders are an unusually sensible, intelligent, patient
group, but there have been signs that some of our newer investors may have come
to our fund for the wrong reasons (e.g. strong recent short-term performance).
This prompted me to write an article on the subject for our recently distributed
newsletter, which I thought might be worth repeating below:
WHAT'S WRONG WITH THIS PICTURE?
"Playing" the stock market, especially through mutual funds, seems to be
the new national pastime. Newspaper mutual fund tables are starting to resemble
the sports pages, with rankings of the top performing funds over the past 5
years, 12 months, 4 WEEKS (!), etc., and lists of fund managers who have "hot
hands" at the moment. CNBC business news sounds a lot like ESPN, as breathless
reporters chase sound bites from money managers and corporate executives.
Magazine articles about funds and fund managers are sometimes educational, but
many seem to have been written for the purpose of selling reprints to fund
companies to use in marketing.
Our funds have been the beneficiaries of some of this publicity, and I
think it has helped us connect with many serious, intelligent, long-term
investors. On the other hand, there are a few new shareholders who trade in and
out of the funds on a weekly (or even daily) basis or ask questions that betray
their lack of understanding of our long-term approach to investing. It is very
important to us that our clients have realistic expectations, so I thought it
might be helpful to list some of our working assumptions:
- Investing is more art than science -- we have confidence in our
investment approach, but the timing and pattern of returns is absolutely
unpredictable;
- Periodic general market declines of 15-20% are inevitable, and 50%
declines (as in 1973-74) are possible. We believe that our approach
lessens the risk of PERMANENT loss of capital, but volatility is a fact
of stock investing life;
- In managing the funds, we try to take advantage of the misperceptions
and emotional over-reactions of other investors -- going counter to the
crowd. Thus, our portfolio will be different from "the market," and will
suffer periods (sometimes extended periods) of under-performance.
4
<PAGE>
We take your investment seriously, we invest our own money in the same
funds so we have a coincidence of interest, and we believe the long-term results
will be good. However, if any of these assumptions troubles you, our fund may
not be the right investment for you -- in fact, stock investing may not be right
for you. Assuming we ARE on the same wavelength, I look forward to many years of
helping you get rich slowly.
Sincerely,
/s/ WALLACE R. WEITZ
Wallace R. Weitz
President, Portfolio
Manager
5
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WEITZ SERIES FUND, INC. -- VALUE PORTFOLIO
SCHEDULE OF INVESTMENTS IN SECURITIES
JUNE 30, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES
OR UNITS COST VALUE
------------ ------------- -------------
<C> <S> <C> <C>
COMMON STOCKS -- 74.1%
AUTO SERVICES -- 0.2%
90,000 Insurance Auto Auctions, Inc.* $ 990,000 $ 1,271,250
------------- -------------
BANKING -- 2.0%
30,000 Wells Fargo & Co. 4,966,258 11,070,000
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CABLE TELEVISION -- 15.1%
205,500 Adelphia Communications Corp. CL A* 1,414,656 7,629,188
1,349,000 Century Communications Corp. CL A* 7,990,357 25,293,750
370,000 Comcast Corp. Special CL A 4,972,972 15,019,706
400,000 Tele-Communications, Inc. CL A* 5,287,462 15,375,000
475,000 MediaOne Group, Inc.* 8,369,765 20,870,312
------------- -------------
28,035,212 84,187,956
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CONSUMER PRODUCTS AND SERVICES -- 1.5%
66,000 American Classic Voyages Co.* 587,550 973,500
175,000 Lab Holdings, Inc. 4,659,781 4,057,813
4,875 Lady Baltimore Foods, Inc. 227,781 262,031
270,000 Protection One, Inc. 463,074 2,953,125
------------- -------------
5,938,186 8,246,469
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FEDERAL AGENCIES -- 3.5%
90,000 Federal Home Loan Mortgage Corp. 385,147 4,235,625
75,000 Federal National Mortgage Association 1,270,544 4,556,250
220,000 SLM Holding Corp. 3,661,064 10,725,000
------------- -------------
5,316,755 19,516,875
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FINANCIAL SERVICES -- 5.8%
70,000 American Express Co. 2,031,996 7,980,000
80 Berkshire Hathaway, Inc. CL A* 237,500 6,264,400
45,000 Capital One Financial Corp. 950,325 5,588,438
259,000 Imperial Credit Industries, Inc.* 5,334,232 6,086,500
30,000 PS Group, Inc.* 233,125 367,500
175,000 United Asset Management Corp. 4,676,418 4,560,937
140,000 United Panam Financial Corp.* 1,630,853 1,435,000
------------- -------------
15,094,449 32,282,775
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INFORMATION AND DATA PROCESSING -- 1.1%
284,200 BRC Holdings, Inc.* 3,457,554 5,453,087
180,000 Intelligent Systems Corp.* 380,869 573,750
------------- -------------
3,838,423 6,026,837
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</TABLE>
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>
MEDIA AND ENTERTAINMENT -- 8.7%
11,937 Chris-Craft Industries, Inc.* $ 471,799 $ 652,805
57,200 Daily Journal Corp.* 1,254,216 2,141,425
300,000 Gabelli Global Multimedia Trust, Inc. 2,071,150 3,037,500
135,000 TCI Satellite Entertainment CL A* 831,286 793,125
470,000 Tele-Communications Liberty Media CL A* 5,136,468 18,241,875
560,000 Tele-Communications TCI Ventures Group A* 5,803,473 11,235,000
321,000 Valassis Communications, Inc.* 5,503,570 12,378,562
------------- -------------
21,071,962 48,480,292
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MORTGAGE BANKING -- 6.4%
250,000 Countrywide Credit Industries, Inc. 3,786,742 12,687,500
24,500 Franchise Mortgage Acceptance Co.* 431,725 638,531
334,000 New Century Financial Corp.* 3,295,250 3,340,000
781,000 Resource Bancshares Mtg. Grp., Inc. 9,922,427 14,546,125
179,999 WMF Group, Limited* 1,646,991 4,139,977
------------- -------------
19,083,135 35,352,133
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REAL ESTATE AND CONSTRUCTION -- 1.4%
115,000 Catellus Development Corp.* 671,575 2,034,063
90,000 Forest City Enterprises, Inc. CL A 2,159,453 5,326,875
30,000 SLH Corp.* 95,750 547,500
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2,926,778 7,908,438
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REAL ESTATE INVESTMENT TRUSTS -- 11.1%
270,000 Capital Automotive REIT 4,025,000 3,830,625
950,000 Fortress Investment Corp. 19,000,000 19,000,000
301,300 Hanover Capital Mortgage Holdings, Inc. 4,619,082 2,862,350
72,000 Healthcare Financial Partners Units** 7,200,000 7,200,000
50,000 Imperial Credit Commercial Mtg. Inv. Corp. 756,250 653,125
445,000 NovaStar Financial, Inc. 7,228,150 7,286,875
1,198,117 Redwood Trust, Inc. 28,610,264 21,041,930
------------- -------------
71,438,746 61,874,905
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TELECOMMUNICATIONS -- 17.3%
520,000 360 Communications Co.* 9,590,786 16,640,000
90,000 Airtouch Communications, Inc.* 2,453,614 5,259,375
818,000 Centennial Cellular Corp. CL A* 12,178,041 30,521,625
471,500 Corecomm, Inc.* 9,604,426 12,376,875
500,000 Telephone and Data Systems, Inc. 22,041,627 19,687,500
643,000 Vanguard Cellular Systems, Inc. CL A* 10,303,172 12,136,625
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66,171,666 96,622,000
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Total Common Stocks 244,871,570 412,839,930
------------- -------------
</TABLE>
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>
WARRANTS -- 0.5%
338,100 Hanover Capital Mtg. Holdings, Inc. , Expiring 9/15/00 $ 458,561 $ 380,362
350,000 Novastar Financial, Inc., Expiring 2/03/01 1,415,700 2,450,000
------------- -------------
Total Warrants 1,874,261 2,830,362
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NON-CONVERTIBLE PREFERRED STOCKS -- 0.8%
10,000 Community Bank 13% Pfd. Series B 257,550 277,500
15,000 Crown American Realty Trust 11% Pfd. Series A 750,000 804,375
30,000 Prime Retail, Inc. 10.5% Pfd. Series A 645,000 783,750
69,941 Riggs National Corp. 10.75% Pfd. Series B 1,852,839 1,940,863
34,000 RB Asset, Inc. 15.0% Pfd. Series A 845,750 646,000
------------- -------------
Total Non-Convertible Preferred Stocks 4,351,139 4,452,488
------------- -------------
<CAPTION>
FACE
AMOUNT
------------
<C> <S> <C> <C>
CORPORATE BONDS -- 1.6%
$ 500,000 Salomon, Inc. Notes 7.125% 8/01/99 500,000 506,228
4,500,000 USA Networks, Inc. 7.0% 7/01/03 4,396,204 4,422,335
750,000 Local Financial Corp. 11.0% 9/08/04 750,000 817,500
1,000,000 Dime Savings 10.5% 11/15/05 1,047,255 1,055,000
2,000,000 Harcourt General 6.5% 5/15/11 1,938,661 1,966,651
------------- -------------
Total Corporate Bonds 8,632,120 8,767,714
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U.S. GOVERNMENT AND AGENCY SECURITIES -- 8.0%
15,000,000 U.S. Treasury Note 5.5% 3/31/00 14,977,398 14,990,625
10,000,000 Federal Home Loan Bank 5.5% 4/14/00 9,961,810 9,970,690
4,750,000 Federal Natl. Mtg. Assn. 6.625% 7/12/00 4,750,466 4,837,578
6,000,000 Federal Home Loan Bank 0.0% 1/21/03 4,386,268 4,389,059
2,500,000 Federal Natl. Mtg. Assn. 7.55% 6/10/04 2,499,257 2,539,062
1,000,000 Federal Home Loan Bank 6.44% 11/28/05 1,001,168 1,042,344
1,000,000 Federal Natl. Mtg. Assn. 7.44% 11/06/06 1,001,065 1,005,312
6,000,000 Federal Natl. Mtg. Assn. 6.56% 11/26/07 6,000,000 6,102,552
------------- -------------
Total U.S. Government and Agency Securities 44,577,432 44,877,222
------------- -------------
</TABLE>
8
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WEITZ SERIES FUND, INC. -- VALUE PORTFOLIO
SCHEDULE OF INVESTMENTS IN SECURITIES, CONTINUED
<TABLE>
<CAPTION>
FACE
AMOUNT COST VALUE
------------ ------------- -------------
<C> <S> <C> <C>
SHORT-TERM SECURITIES -- 14.0%
$ 26,277,964 Norwest U.S. Government Money Market Fund $ 26,277,964 $ 26,277,964
7,000,000 Federal Home Loan Bank Discount Note 7/17/98 6,983,387 6,982,216
6,000,000 Federal Home Loan Bank Discount Note 8/03/98 5,970,795 5,969,117
4,400,000 U.S. Treasury Bill 8/20/98 4,369,261 4,369,457
2,000,000 Federal Home Loan Bank Discount Note 8/28/98 1,982,649 1,982,600
4,000,000 Federal Farm Credit Bank Discount Note 8/31/98 3,963,874 3,963,061
6,750,000 Federal Home Loan Bank Discount Note 9/02/98 6,686,567 6,685,622
12,000,000 Federal Home Loan Bank Discount Note 9/23/98 11,849,640 11,845,583
10,000,000 U.S. Treasury Bill 11/05/98 9,822,200 9,821,511
------------- -------------
Total Short-Term Securities 77,906,337 77,897,131
------------- -------------
Total Investments in Securities $382,212,859 551,664,847
------------- -------------
-------------
Covered Call Options Written at Market Value -- (0.3%) (1,786,156)
Other Assets Less Liabilities -- 1.3% 7,431,586
-------------
Total Net Assets -- 100% $ 557,310,277
-------------
-------------
Net Asset Value Per Share $ 29.007
-------------
-------------
<CAPTION>
EXPIRATION
NO. OF DATE/STRIKE
CONTRACTS PRICE VALUE
------------ ------------- -------------
<C> <S> <C> <C>
COVERED CALL OPTIONS WRITTEN AT MARKET VALUE
225 Capital One Financial Corp. Sept 1998/80 $ (1,015,312)
225 Capital One Financial Corp Sept 1998/95 (682,031)
350 Countrywide Credit Industries, Inc. July 1998/50 (67,813)
420 Valassis Communications, Inc. July 1998/40 (21,000)
-------------
Total written call options (premiums received $753,609) $ (1,786,156)
-------------
-------------
</TABLE>
*Non-income producing
**Each unit consists of five shares of common stock and one stock purchase
warrant.
9
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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 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.
