Certified Semi-annual Shareholder Report for Management Investment Companies (n-csrs)

NOTES TO FINANCIAL STATEMENTS

SEPTEMBER 30, 2012 • (UNAUDITED)

(1) Organization

The Weitz Funds (the “Trust”) is registered under the Investment Company Act of 1940 as an open-end management investment company issuing shares in series, each series representing a distinct portfolio with its own investment objectives and policies. At September 30, 2012, the Trust had nine series in operation: Value Fund, Partners Value Fund, Partners III Opportunity Fund, Research Fund, Hickory Fund, Balanced Fund, Short-Intermediate Income Fund, Nebraska Tax-Free Income Fund and Government Money Market Fund (individually, a “Fund”, collectively, the “Funds”).

Each Fund offers one class of shares, except the Partners III Opportunity and Short-Intermediate Income Funds which each offer two classes of shares: Institutional Class and Investor Class shares. Each class of shares has identical rights and privileges, except with respect to certain class specific expenses such as administration and distribution (12b-1) fees, voting rights on matters affecting a single class of shares and exchange privileges. Income, realized and unrealized gains and losses, and expenses of the Funds not directly attributable to a specific class of shares are allocated to the two classes on the basis of daily net assets of each class. Fees and expenses relating to a specific class are charged directly to that share class.

The Research Fund was originally organized in April 2005 as a Delaware limited partnership (the “Partnership”). Effective as of the close of business on December 31, 2010, the Partnership was reorganized into a series of the Trust through a tax-free exchange.

The investment objective of the Value, Partners Value, Partners III Opportunity, Research and Hickory Funds (the “Weitz Equity Funds”) is capital appreciation. Each of the Weitz Equity Funds invests principally in common stocks and a variety of securities convertible into common stocks such as rights, warrants, convertible preferred stock and convertible bonds.

The investment objectives of the Balanced Fund are regular current income, capital preservation and long-term capital appreciation. The Fund invests principally in a portfolio of U.S. equity and fixed income securities.

The investment objective of the Short-Intermediate Income Fund is high current income consistent with the preservation of capital. Under normal market conditions, the Fund will invest at least 80% of its net assets, plus the amount of any borrowings for investment purposes, in fixed income securities such as U.S. Government and agency securities, corporate debt securities and mortgage-backed securities.

The investment objective of the Nebraska Tax-Free Income Fund is to provide a high level of current income that is exempt from both federal and Nebraska personal income taxes. The Fund under normal circumstances, invests at least 80% of its net assets, plus the amount of any borrowings for investment purposes, in municipal securities that generate income exempt from Nebraska state income tax and from federal income tax or in open or closed-end mutual funds which in turn invest in such assets.

The investment objective of the Government Money Market Fund is current income consistent with the preservation of capital and maintenance of liquidity. The Fund invests substantially all of its assets in debt obligations issued or guaranteed by the U.S. Government, its agencies and instrumentalities and repurchase agreements on such securities with remaining maturities not exceeding thirteen months. The Fund limits its average portfolio maturity to sixty days or less.

(2) Significant Accounting Policies

The following accounting policies are in accordance with accounting principles generally accepted in the United States.

(a) Valuation of Investments

Weitz Equity, Balanced, Short-Intermediate Income and Nebraska Tax-Free Income Funds

Investments are carried at value determined using the following valuation methods:

•	Securities traded on a national or regional securities exchange 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 ask prices; securities listed on the NASDAQ exchange are valued using the NASDAQ Official Closing Price (“NOCP”). Generally, the NOCP will be the last sales price unless the reported trade for the security is outside the range of the bid/ask price. In such cases, the NOCP will be normalized to the nearer of the bid or ask price.

•	Short sales traded on a national or regional securities exchange are valued at the last sales price; if there were no sales on that day, short sales are valued at the mean between the latest available and representative bid and ask 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 current market value of a traded option is the last sales price at which such option is traded, or, in the absence of a sale on or about the close of the exchange, the mean of the closing bid and ask prices.

•	The value of securities for which market quotations are not readily available or are deemed unreliable, including restricted and not readily marketable securities, is

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determined in good faith in accordance with procedures approved by the Trust’s Board of Trustees. Such valuation procedures and methods for valuing securities may include, but are not limited to: multiple of earnings, multiple of book value, discount from value of a similar freely-traded security, purchase price, private transaction in the security or related securities, the nature and duration of restrictions on disposition of the security and a combination of these and other factors.

Government Money Market Fund

Investment securities are carried at amortized cost, which approximates market value. Pursuant to Rule 2a-7 of the Investment Company Act of 1940, amortized cost, as defined, is a method of valuing securities at acquisition cost, adjusted for amortization of premium or accretion of discount.

(b) Option Transactions

The Funds, except for the Government Money Market Fund, may purchase put or call options. When a Fund purchases an option, an amount equal to the premium paid is recorded as an asset and is subsequently marked-to-market daily. Premiums paid for purchasing options that expire unexercised are recognized on the expiration date as realized losses. If an option is exercised, the premium paid is subtracted from the proceeds of the sale or added to the cost of the purchase to determine whether a Fund has realized a gain or loss on the related investment transaction. When a Fund enters into a closing transaction, a Fund will realize a gain or loss depending upon whether the amount from the closing transaction is greater or less than the premium paid.

The Funds, except for the Government Money Market Fund, may write put or call options. When a Fund writes an option, an amount equal to the premium received is recorded as a liability and is subsequently marked-to-market daily. Premiums received for writing options that expire unexercised are recognized on the expiration date as realized gains. If an option is exercised, the premium received is subtracted from the cost of purchase or added to the proceeds of the sale to determine whether a Fund has realized a gain or loss on the related investment transaction. When a Fund enters into a closing transaction, a Fund will realize a gain or loss depending upon whether the amount from the closing transaction is greater or less than the premium received.

The Funds attempt to limit market risk and enhance their income by writing (selling) covered call options. The risk in writing a covered call option is that a Fund gives up the opportunity of profit if the market price of the financial instrument increases. A Fund also has the additional risk of not being able to enter into a closing transaction if a liquid secondary market does not exist. The risk in writing a put option is that a Fund is obligated to purchase the financial instrument underlying the option at prices which may be significantly different than the current market price.

The Funds, except for the Government Money Market Fund, periodically engage in selling securities short, which obligates a Fund to replace a security borrowed by purchasing the same security at the current market value. A Fund would incur a loss if the price of the security increases between the date of the short sale and the date on which the Fund replaces the borrowed security. A Fund would realize a gain if the price of the security declines between those dates.

(d) Federal Income Taxes

It is the policy of each Fund 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; therefore, 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 Funds.

The Funds have reviewed their tax positions taken on federal income tax returns, for each of the three open tax years and as of September 30, 2012 and have determined that no provisions for income taxes are required in the Funds’ financial statements.

(e) Security Transactions

Security transactions are accounted for on the date the securities are purchased or sold (trade date). Realized gains or losses are determined by specifically identifying the security sold.

Income dividends less foreign tax withholding (if any), dividends on short positions and distributions to shareholders are recorded on the ex-dividend date. Interest, including amortization of discount or premium, is accrued as earned.

(f) Dividend Policy

The Funds declare and distribute income dividends and capital gains distributions as may be required to qualify as a regulated investment company under the Internal Revenue Code.

Generally, the Short-Intermediate Income and Nebraska Tax-Free Income Funds pay income dividends on a quarterly basis. The Government Money Market Fund declares dividends daily and pays dividends monthly. All dividends and distributions are reinvested automatically, unless the shareholder elects otherwise.

(g) Other

Expenses that are directly related to a Fund are charged directly to that Fund. Other operating expenses of the Trust are prorated to each Fund on the basis of relative net assets or another appropriate basis. Income, realized and unrealized gains and losses and expenses (other than class specific expenses) are allocated to each class of shares based on its relative net assets, except that each class separately bears expenses related specifically to that class, such as transfer agent fees, registration fees and 12b-1 fees.

(h) Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States 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.

62 Weitz Funds

(3) Fund Share Transactions

	Six months ended September 30, 2012						Year ended March 31, 2012
	Shar es			Amount			Shares			Amount
Value
Sales		1,296,709		$	42,146,788			4,917,919		$	147,910,893
Redemptions		(4,154,819	)		(136,244,713	)		(6,615,739	)		(200,565,515	)
Reinvestment of distributions		29,368			935,947			69,551			2,064,991
Net increase (decrease)		(2,828,742	)	$	(93,161,978	)		(1,628,269	)	$	(50,589,631	)

Partners Value
Sales		2,206,743		$	50,911,167			3,902,737		$	83,029,226
Redemptions		(2,657,051	)		(61,210,181	)		(7,699,763	)		(164,015,955	)
Net increase (decrease)		(450,308	)	$	(10,299,014	)		(3,797,026	)	$	(80,986,729	)

Partners III - Institutional Class
Sales		2,423,050		$	30,476,629			17,587,485		$	213,748,413
Redemptions		(5,485,183	)		(68,378,905	)		(7,953,612	)		(94,525,327	)
Reinvestment of distributions		652,390			7,933,066			965,696			11,665,602
Net increase (decrease)		(2,409,743	)	$	(29,969,210	)		10,599,569		$	130,888,688

Partners III - Investor Class*
Sales		364,487		$	4,589,591			2,015,165		$	24,333,189
Redemptions		(405,515	)		(5,111,429	)		(1,123,984	)		(14,440,436	)
Reinvestment of distributions		11,437			138,608			—			—
Net increase (decrease)		(29,591	)	$	(383,230	)		891,181		$	9,892,753

Research
Sales		91,874		$	966,193			392,924		$	3,832,592
Redemptions		(22,947	)		(241,099	)		(72,040	)		(734,013	)
Reinvestment of distributions		49,964			510,635			67,976			672,370
Net increase (decrease)		118,891		$	1,235,729			388,860		$	3,770,949

Hickory
Sales		931,578		$	40,015,031			2,188,072		$	86,439,301
Redemptions		(756,475	)		(32,576,694	)		(2,268,891	)		(87,482,946	)
Net increase (decrease)		175,103		$	7,438,337			(80,819	)	$	(1,043,645	)

Balanced
Sales		180,684		$	2,212,857			536,043		$	6,288,234
Redemptions		(204,508	)		(2,502,059	)		(687,223	)		(7,891,475	)
Reinvestment of distributions		6,042			72,803			47,229			543,614
Net increase (decrease)		(17,782	)	$	(216,399	)		(103,951	)	$	(1,059,627	)

Short-Intermediate Income - Institutional Class
Sales	14,013,149		$	175,847,297		55,005,679		$	685,873,440
Redemptions	(17,180,171	)		(215,496,507	)	(38,884,939	)		(484,358,800	)
Reinvestment of distributions	1,122,143			14,058,954		2,283,922			28,369,758
Net increase (decrease)	(2,044,879	)	$	(25,590,256	)	18,404,662		$	229,884,398

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	Six months ended September 30, 2012						Year ended March 31, 2012
	Shares			Amount			Shares			Amount
Short-Intermediate Income - Investor Class*
Sales		2,203,415		$	27,582,952			5,002,466		$	62,232,397
Redemptions		(1,336,000	)		(16,757,693	)		(776,404	)		(9,680,845	)
Reinvestment of distributions		49,792			622,836			32,955			409,420
Net increase (decrease)		917,207		$	11,448,095			4,259,017		$	52,960,972

Nebraska Tax-Free Income
Sales		1,991,917		$	20,941,429			963,294		$	10,040,958
Redemptions		(645,154	)		(6,780,988	)		(1,001,713	)		(10,377,164	)
Reinvestment of distributions		65,132			682,524			160,605			1,665,872
Net increase (decrease)		1,411,895		$	14,842,965			122,186		$	1,329,666

Government Money Market
Sales		48,211,708		$	48,211,708			71,926,923		$	71,926,923
Redemptions		(27,974,332	)		(27,974,332	)		(76,492,696	)		(76,492,696	)
Reinvestment of distributions		14,144			14,144			21,140			21,140
Net increase (decrease)		20,251,520		$	20,251,520			(4,544,633	)	$	(4,544,633	)

* Initial offering of shares on August 1, 2011 (See Note 1)

(4) Related Party Transactions

Each Fund has retained Wallace R. Weitz & Company (the “Adviser”) as its investment adviser. In addition, the Trust has an agreement with Weitz Securities, Inc. (the “Distributor”), a company under common control with the Adviser, to act as distributor for shares of the Trust. Certain officers of the Trust are also officers and directors of the Adviser and the Distributor.

Under the terms of management and investment advisory agreements, the Adviser is paid a monthly fee. The annual investment advisory fee schedule for each of the Weitz Equity Funds (other than the Partners III Fund) is as follows:

Average Daily Net Assets Break Points

GreaterThan	LessThan or EqualTo	Rate
$ 0	$ 2,500,000,000	1.00 %
2,500,000,000	5,000,000,000	0.90 %
5,000,000,000		0.80%

The annual investment advisory fee schedule for the Partners III Fund is as follows:

Average Daily Net Assets Break Points

GreaterThan	LessThan or EqualTo	Rate
$ 0	$1,000,000,000	1.00%
1,000,000,000	2,000,000,000	0.95%
2,000,000,000	3,000,000,000	0.90%
3,000,000,000	5,000,000,000	0.85%
5,000,000,000		0.80%

The Balanced Fund pays the Adviser, on a monthly basis, an annual advisory fee equal to 0.80% of the Fund’s average daily net assets.

The Short-Intermediate Income, Nebraska Tax-Free Income and Government Money Market Funds each pay the Adviser, on a monthly basis, an annual advisory fee equal to 0.40% of the respective Fund’s average daily net assets.

Under the terms of administration agreements, certain services are provided by the Adviser including the transfer of shares, disbursement of dividends, fund accounting and related administrative services of the Trust.

Each Fund, or class in the case of Partners III and Short-Intermediate Income Funds, pays the Adviser a monthly administrative fee based on their average daily net assets, plus third party expenses directly related to providing such services.

The Partners III and Short-Intermediate Income Funds have adopted Service and Distribution plans effective August 1, 2011, which authorize the Funds to pay the Distributor a distribution fee payable monthly equal to 0.25% per annum, of the average daily net assets of each Fund’s respective Investor Class.

Through July 31, 2013, the Adviser has contractually agreed to reimburse the Research and Government Money Market Funds or to pay directly a portion of the Funds’ expenses to the extent that total expenses, excluding taxes, interest and brokerage commissions exceed 0.90% and 0.20%, respectively, of each Fund’s average daily net assets.

In addition, for the six months ended September 30, 2012, the Adviser voluntarily reimbursed expenses to limit the expenses of the Government Money Market Fund to 0.03% of the Fund’s average daily net assets. The expenses reimbursed by the Adviser for the Research and Government Money Market Funds for the six months ended September 30, 2012 were $66,566 and $300,794, respectively.

Through July 31, 2013, the Adviser has agreed in writing to limit the total class-specific operating expenses of the Investor Class shares of the Partners III and Short-Intermediate Income Funds to an amount no greater than 0.25% and 0.20% per annum, respectively, more than the total class-specific operating expenses of the Institutional Class shares of the respective Funds (in each case, as such expenses are expressed as a percentage of the average daily net assets of each Fund’s respective share class). The expenses reimbursed by the Adviser for the Investor Class shares of the Partners III and Short-Intermediate Income Funds for the six months ended September 30, 2012 were $28,730 and $49,593, respectively.

As of September 30, 2012, the controlling shareholder of the Adviser held approximately 73% of the Research Fund, 36% of the Nebraska Tax-Free Income Fund, 39% of the Balanced Fund, 31% of the Partners III Fund, 14% of the Hickory Fund and 9% of the Government Money Market Fund.

64 Weitz Funds

(5) Distributions to Shareholders and Distributable Earnings

The tax character of distributions paid by the Funds are summarized as follows:

Distributions paid from:	Six months ended Sept. 30, 2012		Year ended March 31,2012		Six months ended Sept. 30, 2012		Year ended March 31,2012
	Value				Partners III
Ordinary income	$	977,442	$	2,159,048	$	—	$	—
Long-term capital gains		—		—		8,524,492		12,074,793
Total distributions	$	977,442	$	2,159,048	$	8,524,492	$	12,074,793

	Research				Balanced
Ordinary income	$	417,710	$	378,244	$	74,270	$	554,771
Long-term capital gains		92,924		294,127		—		—
Total distributions	$	510,634	$	672,371	$	74,270	$	554,771

	Short-Intermediate Income				Nebraska Tax-Free Income
Ordinary income	$	14,956,233	$	29,877,821	$	—	$	11,494
Tax exempt income		—		—		1,029,121		2,256,571
Long-term capital gains		281,597		—		487		41,735
Total distributions	$	15,237,830	$	29,877,821	$	1,029,608	$	2,309,800

Government Money Market
Ordinary income	$	16,702	$	22,898

As of March 31, 2012, the components of distributable earnings on a tax basis were as follows:

	Value			Partners Value			Partners III			Research		Hickory
Undistributed ordinary income	$	977,263		$	—		$	—		$	417,546	$	—
Qualified ordinary loss deferral		—			(426,224	)		(612,251	)		—		(281,577	)
Undistributed long-term gains		—			—			8,523,996			92,921		—
Capital loss carryforwards		(161,856,119	)		(127,177,310	)		—			—		(53,422,102	)
Net unrealized appreciation (depreciation)		197,788,688			120,147,524			115,626,900			1,995,188		56,062,552
	$	36,909,832		$	(7,456,010	)	$	123,538,645		$	2,505,655	$	2,358,873

	Balanced			Short-Intermediate Income		Nebraska Tax-Free Income		Government Money Market
Undistributed ordinary income	$	74,195		$	87,101	$	—	$	496
Undistributed tax exempt income		—			—		30,607		—
Undistributed long-term gains		—			281,347		455		—
Capital loss carryforwards		(3,898,235	)		—		—		—
Net unrealized appreciation (depreciation)		11,071,983			33,679,687		4,070,356		—
	$	7,247,943		$	34,048,135	$	4,101,418	$	496

Capital loss carryforwards represent tax basis capital losses which may be carried over to offset future realized capital gains, if any. To the extent that carryforwards are used, no capital gains distributions will be made. The carryforwards expire as follows:

	Value			Partners Value			Hickory			Balanced
March 31, 2017	$	—		$	(11,124,649	)	$	(25,758,330	)	$	—
March 31, 2018		(161,856,119	)		(116,052,661	)		(27,663,772	)		(3,898,235	)
Total capital loss carryforwards	$	(161,856,119	)	$	(127,177,310	)	$	(53,422,102	)	$	(3,898,235	)

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On December 22, 2010, the Regulated Investment Company Modernization Act of 2010 (the “Act”) was enacted, which changed various technical rules governing the tax treatment of regulated investment companies. The changes are generally effective for taxable years beginning after the date of enactment. One of the more prominent changes addresses capital loss carryforwards. Under the Act, the Funds will be permitted to carry forward capital losses incurred in taxable years beginning after the date of enactment for an unlimited period. Additionally, post-enactment capital loss carryforwards will retain their character as either short-term or long-term capital losses rather than being considered all short-term as permitted under previous regulation.

(6) Securities Transactions

Purchases and proceeds from maturities or sales of investment securities of the Funds, other than short-term securities, are summarized as follows:

	Value		Partners Value		Partners III		Research		Hickory		Balanced		Short- Intermediate Income		Nebraska Tax-Free Income
Purchases	$	55,394,516	$	55,584,536	$	97,038,739	$	5,769,029	$	33,833,779	$	6,512,392	$	250,462,723	$	14,030,965
Proceeds		187,543,886		89,276,317		133,299,519		4,327,153		59,533,734		8,087,572		182,967,856		6,715,000

The cost of investments is the same for financial reporting and Federal income tax purposes for the Value, Short-Intermediate Income, Nebraska Tax-Free Income and Government Money Market Funds. The cost of investments for Federal income tax purposes for the Partners Value, Partners III, Research, Hickory and Balanced Funds is $626,573,050, $490,776,027, $15,597,266, $307,255,425 and $80,393,709, respectively.

At September 30, 2012, the aggregate gross unrealized appreciation and depreciation of investments, based on cost for Federal income tax purposes, are summarized as follows:

	Value			Partners Value			Partners III			Research			Hickory			Balanced			Short- Intermediate Income			Nebraska Tax-Free Income
Appreciation	$	163,440,976		$	118,899,183		$	115,988,347		$	1,393,426		$	52,072,079		$	10,702,640		$	49,206,456		$	4,740,074
Depreciation		(23,266,411	)		(19,963,721	)		(13,455,952	)		(831,888	)		(8,006,684	)		(799,029	)		(920,160	)		(8,997	)
Net	$	140,174,565		$	98,935,462		$	102,532,395		$	561,538		$	44,065,395		$	9,903,611		$	48,286,296		$	4,731,077

(a) Illiquid and Restricted Securities

The Funds own certain securities which have a limited trading market and/or certain restrictions on trading and therefore may be illiquid and/or restricted. Such securities have been valued at fair value in accordance with the procedures described in Note (2)(a). Because of the inherent uncertainty of valuation, these values may differ from the values that would have been used had a ready market for these securities existed and these differences could be material. Illiquid and/or restricted securities owned at September 30, 2012, include the following:

	Acquisition Date		Partners III			Hickory			Nebraska Tax-Free Income
CIBL, Inc.		9/09/96	$	—		$	94,596		$	—
ICTC Group, Inc. – CL A		9/09/96		—			297,285			—
Intelligent Systems Corp.		12/03/91		2,899,379			—			—
LICT Corp.		9/09/96		—			2,228,509			—
Nebraska Investment Finance Authority, Clean Water State
Revolving Fund, Series 2012, 0.8%, 6/15/13		7/25/12		—			—			1,440,000
Total cost of illiquid and/or restricted securities			$	2,899,379		$	2,620,390		$	1,440,000
Value at 9/30/12			$	3,359,600		$	3,289,491		$	1,440,000
Percent of net assets at 9/30/12				0.6	%		0.9	%		1.3	%

66 Weitz Funds

(b) Options Written

Transactions relating to options written for the six months ended September 30, 2012, are summarized as follows:

	Partners Value						Partners III
	Number of Contracts			Premiums			Number of Contracts			Premiums
Options outstanding, beginning of period		250		$	101,873			10,680		$	3,141,375
Options written		—			—			14,650			6,332,598
Options exercised		(150	)		(46,124	)		(530	)		(219,888	)
Options expired		(100	)		(55,749	)		(3,600	)		(774,921	)
Options closed		—			—			(12,050	)		(5,029,093	)
Options outstanding, end of period		—		$	—			9,150		$	3,450,071

	Hickory
	Number of
	Contracts			Premiums
Options outstanding, beginning of period		500		$	214,276
Options written		250			117,400
Options exercised		(1	)		(559	)
Options expired		(499	)		(256,504	)
Options closed		(250	)		(74,613	)
Options outstanding, end of period		—		$	—

The locations in the Statements of Assets and Liabilities of the Funds’ derivative positions, none of which are designated as hedging instruments are as follows:

			Fair Value at September 30, 2012				Average Month-End		Gross Notional Amount
Fund	Type of Derivative	Location	Asset Derivatives		Liability Derivatives			Notional Amount		Outstanding Sept. 30, 2012
Partners Value	Equity call options written	Options written, at value	$	—	$	—	$	312,500	$	—
Partners III	Put options purchased	Investments in securities		555,400		—		53,391,667		46,350,000
		at value
	Call options written	Options written, at value		—		(2,601,000)		71,675,000		66,250,000
	Equity put options written	Options written, at value		—		(992,500)		4,883,333		6,900,000
Hickory	Equity call options written	Options written, at value		—		—		1,592,708		—

Derivative positions open during the six months and at period end are reflected for each Fund in the table above.

Transactions in derivative instruments during the six months ended September 30, 2012 by the Funds are recorded in the following locations in the Statements of Operations:

				Realized			Change in
				Gain			Unrealized
Fund	Type of Derivative	Location		(Loss)		Location	Gain (Loss)

Partners Value	Equity call options written	Net realized gain (loss) -	$	55,749		Net unrealized appreciation	$ (5,873	)
		options written				(depreciation) - options written
Partners III	Put options purchased	Net realized gain (loss) -		(2,226,808	)	Net unrealized appreciation	(290,850	)
		unaffiliated issuers				(depreciation) - unaffiliated issuers
	Call options written	Net realized gain (loss) -		369,429		Net unrealized appreciation	886,168
		options written				(depreciation) - options written
	Equity put options written	Net realized gain (loss) -		197,805		Net unrealized appreciation	(210,582	)
		options written				(depreciation) - options written
Hickory	Equity call options written	Net realized gain (loss) -		259,755		Net unrealized appreciation	(5,526	)
		options written				(depreciation) - options written

weitzfunds.com 67

(7) Affiliated Issuers

Affiliated issuers, as defined under the Investment Company Act of 1940, are those in which a Fund’s holdings of an issuer represent 5% or more of the outstanding voting securities of the issuer. A summary of each Fund’s holdings in the securities of such issuers is set forth below:

	Number of Shares Held March 31, 2012		Gross Additions		Gross Reductions		Number of Shares Held Sept. 30, 2012		Value Sept. 30, 2012		Dividend Income		Realized Gains/ (Losses)
Partners III:
Intelligent Systems
Corp. †		2,270,000		—		—		2,270,000	$	3,359,600	$	—	$	—

† Controlled affiliate in which the Fund owns 25% or more of the outstanding voting securities.

(8) Contingencies

Each Fund indemnifies the Trust’s officers and trustees for certain liabilities that might arise from their performance of their duties to each of the Funds. Additionally, in the normal course of business the Funds enter into contracts that contain a variety of representations and warranties and which provide general indemnifications. The Funds’ maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Funds that have not yet occurred. However, based on experience, the Funds expect the risk of loss to be remote.

(9) Financial Instruments With Off-Balance Sheet Risks

Option contracts written and securities sold short result in off-balance sheet risk as the Fund’s ultimate obligation to satisfy the terms of the contract or the sale of securities sold short may exceed the amount recognized in the Statements of Assets and Liabilities.

The Funds are required to maintain collateral in a segregated account to provide adequate margin as determined by the broker.

(10) Margin Borrowing Agreement

The Partners III Fund has a margin account with its prime broker, Merrill Lynch, under which the Fund may borrow against the value of its securities, subject to regulatory limitations. Interest accrues at the federal funds rate plus 0.625% (0.765% at September 30, 2012). Interest is accrued daily and paid monthly. The Partners III Fund held a cash balance of $80,827,304, with the broker at September 30, 2012.

The Partners III Fund is exposed to credit risk from its prime broker who effects transactions and extends credit pursuant to a prime brokerage agreement. The Adviser attempts to minimize the credit risk by monitoring credit exposure and the credit worthiness of the prime broker.

(11) Concentration of Credit Risk

Approximately 76% of the Nebraska Tax-Free Income Fund’s net assets are in obligations of political subdivisions of the State of Nebraska which are subject to the credit risk associated with the non-performance of such issuers.

(12) Fair Value Measurements

Various inputs are used in determining the value of the Fund’s investments. These inputs are used in determining the value of the Funds’ investments and are summarized in the following fair value hierarchy:


•	Level 1 – quoted prices in active markets for identical securities;

•	Level 2 – other significant observable inputs (including quoted prices for similar securities);

•	Level 3 – significant unobservable inputs (including the Funds’ own assumptions in determining the fair value of investments).

The inputs or methodology used for valuing securities are not an indication of the risk associated with investing in those securities.

A description of the valuation techniques applied to the company’s major categories of assets and liabilities measured at fair value on a recurring basis follows.

•

Equity securities (common and preferred stock). Securities traded on a national securities exchange (or reported on the NASDAQ national market) are stated at the last reported sales price on the day of valuation. To the extent these securities are actively traded and valuation adjustments are not applied, they are categorized in Level 1 of the fair value hierarchy. Preferred stock and other equities traded on inactive markets or valued by reference to similar instruments are categorized in Level 2.

68 Weitz Funds

•	Corporate and Municipal bonds. The fair value of corporate and municipal bonds are estimated using various techniques, which may consider recently executed transactions in securities of the issuer or comparable issuers, market price quotations (where observable), bond spreads and fundamental data relating to the issuer. Although most corporate and municipal bonds are categorized in Level 2 of the fair value hierarchy, in instances where lower relative weight is placed on transaction prices, quotations, or similar observable inputs, they are categorized in Level 3.

•	Asset backed securities . The fair value of asset backed securities (including non-government agency mortgage-backed securities and interest-only securities) is estimated based on models that consider the estimated cash flows of each tranche of the entity, establishes a benchmark yield and develops an estimated tranche specific spread to the benchmark yield based on the unique attributes of the tranche. To the extent the inputs are observable and timely, the values would be categorized in Level 2 of the fair value hierarchy; otherwise they would be categorized as Level 3.

•	U.S. Government securities. U.S. Government securities are normally valued using a model that incorporates market observable data such as reported sales of similar securities, broker quotes, yields, bids, offers and reference data. Certain securities are valued principally using dealer quotations. U.S. Government securities are categorized in Level 1 or Level 2 of the fair value hierarchy depending on the inputs used and market activity levels for specific securities.

•	U.S. agency securities. U.S. agency securities are comprised of two main categories consisting of agency issued debt and mortgage-backed securities. Agency issued debt securities are generally valued in a manner similar to U.S. Government securities. Mortgage-backed securities include collateralized mortgage obligations, to-be-announced (TBA) securities and mortgage pass-through certificates. Mortgage-backed securities are generally valued using dealer quotations. Depending on market activity levels and whether quotations or other data are used, these securities are typically categorized in Level 2 of the fair value hierarchy.

•	Restricted and/or illiquid securities. Restricted and/or illiquid securities for which quotations are not readily available are valued in accordance with procedures approved by the Trust’s Board of Trustees. Restricted securities issued by publicly traded companies are generally valued at a discount to similar publicly traded securities. Restricted or illiquid securities issued by nonpublic entities may be valued by reference to comparable public entities or fundamental data relating to the issuer or both. Depending on the relative significance of valuation inputs, these instruments may be classified in either Level 2 or Level 3 of the fair value hierarchy.

•	Derivative instruments. Listed derivatives, such as the Funds’ equity option contracts, that are valued based on closing prices from the exchange or the mean of the closing bid and ask prices are generally categorized in Level 2 of the fair value hierarchy.

The following is a summary of the inputs used as of September 30, 2012, in valuing the Funds’ assets and liabilities carried at fair value:

Value
	Level 1		Level 2		Level 3		Total
Assets:
Investments in Securities:
Common Stocks:
Information Technology	$	152,065,250	$	—	$	—	$	152,065,250
Consumer Discretionary		142,811,000		—		—		142,811,000
Financials		130,151,250		—		—		130,151,250
Energy		75,203,750		—		—		75,203,750
Consumer Staples		53,040,050		—		—		53,040,050
Materials		50,019,450		—		—		50,019,450
Health Care		46,979,500		—		—		46,979,500
Industrials		27,912,300		—		—		27,912,300
Cash Equivalents		253,448,745		—		—		253,448,745
Total Investments in Securities	$	931,631,295	$	—	$	—	$	931,631,295

weitzfunds.com 69

Partners Value
		Level 1			Level 2			Level 3		Total
Assets:
Investments in Securities:
Common Stocks:
Consumer Discretionary	$	161,425,279		$	—		$	—	$	161,425,279
Information Technology		119,647,143			—			—		119,647,143
Financials		109,809,750			—			—		109,809,750
Health Care		62,634,000			—			—		62,634,000
Energy		45,013,190			—			—		45,013,190
Materials		25,464,357			—			—		25,464,357
Consumer Staples		13,799,700			—			—		13,799,700
Cash Equivalents		187,715,093			—			—		187,715,093
Total Investments in Securities	$	725,508,512		$	—		$	—	$	725,508,512

Partners III
		Level 1			Level 2			Level 3		Total
Assets:
Investments in Securities:
Common Stocks:
Consumer Discretionary	$	161,138,542		$	—		$	—	$	161,138,542
Information Technology		114,178,872			—			—		114,178,872
Financials		106,722,444			—			—		106,722,444
Health Care		74,216,500			—			—		74,216,500
Energy		57,125,000			—			—		57,125,000
Materials		15,935,650			—			—		15,935,650
Industrials		8,749,620			3,359,600			—		12,109,220
Put Options		—			555,400			—		555,400
Cash Equivalents		51,326,794			—			—		51,326,794
Total Investments in Securities	$	589,393,422		$	3,915,000		$	—	$	593,308,422
Liabilities:
Options Written	$	—		$	(3,593,500	)	$	—	$	(3,593,500	)
Securities Sold Short		(77,847,500	)		—			—		(77,847,500	)

Research
		Level 1			Level 2			Level 3		Total
Assets:
Investments in Securities:
Common Stocks:
Information Technology	$	5,493,405		$	—		$	—	$	5,493,405
Consumer Discretionary		3,454,862			—			—		3,454,862
Financials		1,143,532			—			—		1,143,532
Health Care		1,021,619			—			—		1,021,619
Energy		753,648			—			—		753,648
Industrials		598,139			—			—		598,139
Consumer Staples		479,185			—			—		479,185
Cash Equivalents		3,214,414			—			—		3,214,414
Total Investments in Securities	$	16,158,804		$	—		$	—	$	16,158,804

Hickory
		Level 1			Level 2			Level 3		Total
Assets:
Investments in Securities:
Common Stocks:
Consumer Discretionary	$	96,094,941		$	831,135		$	—	$	96,926,076
Financials		37,920,796			—			—		37,920,796
Information Technology		25,724,500			—			—		25,724,500
Health Care		24,265,390			—			—		24,265,390
Materials		17,521,900			—			—		17,521,900
Energy		15,543,100			—			—		15,543,100
Industrials		7,420,880			—			—		7,420,880
Consumer Staples		3,392,000			—			—		3,392,000
Telecommunication Services		—			2,223,186			235,170		2,458,356
Cash Equivalents		120,147,822			—			—		120,147,822
Total Investments in Securities	$	348,031,329		$	3,054,321		$	235,170	$	351,320,820

70 Weitz Funds

Balanced
		Level 1		Level 2		Level 3		Total
Assets:
Investments in Securities:
Common Stocks:
Consumer Discretionary	$	9,229,275	$	—	$	—	$	9,229,275
Information Technology		8,729,980		—		—		8,729,980
Financials		7,505,250		—		—		7,505,250
Health Care		5,467,250		—		—		5,467,250
Consumer Staples		4,015,915		—		—		4,015,915
Industrials		3,190,500		—		—		3,190,500
Energy		2,166,550		—		—		2,166,550
Materials		2,030,350		—		—		2,030,350
Corporate Bonds		—		8,759,690		—		8,759,690
Mortgage-Backed Securities		—		2,957,620		—		2,957,620
Asset-Backed Securities		—		504,832		—		504,832
Taxable Municipal Bonds		—		308,289		—		308,289
Cash Equivalents		35,431,819		—		—		35,431,819
Total Investments in Securities	$	77,766,889	$	12,530,431	$	—	$	90,297,320

Short-Intermediate Income
		Level 1		Level 2		Level 3		Total
Assets:
Investments in Securities:
Corporate Bonds	$	—	$	624,803,478	$	—	$	624,803,478
Mortgage-Backed Securities		—		486,379,741		—		486,379,741
Commercial Mortgage-Backed Securities		—		16,654,070		—		16,654,070
Asset-Backed Securities		—		18,571,909		—		18,571,909
Taxable Municipal Bonds		—		25,086,773		—		25,086,773
U.S. Treasury and Government Agency		—		151,585,420		—		151,585,420
Common Stocks		28,508,734		—		—		28,508,734
Cash Equivalents		76,531,675		—		—		76,531,675
Total Investments in Securities	$	105,040,409	$	1,323,081,391	$	—	$	1,428,121,800

Nebraska Tax-Free Income
		Level 1		Level 2		Level 3		Total
Assets:
Investments in Securities:
Municipal Bonds:
Arizona	$	—	$	2,585,965	$	—	$	2,585,965
Florida		—		2,615,814		—		2,615,814
Georgia		—		1,237,203		—		1,237,203
Illinois		—		2,198,094		—		2,198,094
Iowa		—		665,136		—		665,136
Nebraska		—		81,189,173		1,440,000		82,629,173
North Dakota		—		885,479		—		885,479
Ohio		—		1,087,484		—		1,087,484
Puerto Rico		—		2,485,517		—		2,485,517
Texas		—		1,361,153		—		1,361,153
Virginia		—		1,077,355		—		1,077,355
Wisconsin		—		1,539,206		—		1,539,206
Cash Equivalents		10,837,424		—		—		10,837,424
Total Investments in Securities	$	10,837,424	$	98,927,579	$	1,440,000	$	111,205,003

weitzfunds.com 71

Government Money Market
		Level 1		Level 2		Level 3		Total
Assets:
Investments in Securities:
U.S. Treasury	$	84,991,177	$	—	$	—	$	84,991,177
Cash Equivalents		12,593,497		—		—		12,593,497
Total Investments in Securities	$	97,584,674	$	—	$	—	$	97,584,674

For transfers between the levels within the fair value hierarchy, the Funds have adopted a policy of recognizing the transfers as of the date of the underlying event which caused the transfer. During the six months ended September 30, 2012, there were no transfers between Level 1 and Level 2.

At September 30, 2012, the reconciliation of assets in which significant unobservable inputs (Level 3) were used in determining the following Funds’ fair values were as follows:

							Nebraska
							Tax-Free
	Partners III			Hickory			Income
Beginning balance, March 31, 2012	$	331,500		$	1,327,203		$	1,505,000
Net realized gain (loss)		—			—			—
Net change in unrealized appreciation (depreciation)		—			(262,923	)		—
Net purchases (sales)		—			—			(65,000	)
Transfers into Level 3 (at market)		—			—			—
Transfers out of Level 3 (at market)		(331,500	)		(829,110	)		—
Ending balance, September 30, 2012	$	—		$	235,170		$	1,440,000
Net change in unrealized appreciation (depreciation) attributable to assets still held as Level 3 at September 30, 2012	$	—		$	88,842		$	—

The transfers out of Level 3 resulted from the availability of observable inputs, namely reliable market quotations in an inactive market.

The significant unobservable inputs used in the fair value measurement of Hickory Fund’s investment in Telecommunication Services were a multiple of cash flows (5 times) and discounts for earnings growth and lack of marketability (combined 30% discount). An increase in the earnings multiple or decreases in the discounts used would increase the value of the investment. A decrease in the earnings multiple or increases in the discounts used would decrease the value of the investment.

Although the changes in the unobservable inputs may significantly change the security’s value, significant and reasonable changes to any of these inputs would not significantly impact the net assets of the Hickory Fund.

(13) Subsequent Events

Management has evaluated the impact of all subsequent events on the Funds through the date the financial statements were issued and has determined that there were no subsequent events requiring recognition or disclosure in the financial statements.

72 Weitz Funds

ACTUAL AND HYPOTHETICAL EXPENSES FOR

COMPARISON PURPOSES • (UNAUDITED)

Example

As a shareholder of one or more of the Funds, you incur two types of costs: (1) transaction costs, including any transaction fees that you may be charged if you purchase or redeem your Fund shares through certain financial institutions; and (2) ongoing costs, including management fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in the Funds and to compare these costs with the ongoing costs of investing in other mutual funds. The Example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period from April 1, 2012 through September 30, 2012.

Actual Expenses

The first line for each Fund in the table below provides information about actual account values and actual expenses. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an account value of $8,600 divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid from 4/01/12 –9/30/12” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The second line for each Fund in the table below provides information about hypothetical account values and hypothetical expenses based on the actual expense ratio of each Fund and an assumed rate of return of 5% per year before expenses, which is not the actual return of the Fund. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in a specific Weitz Fund to other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs charged by certain financial institutions. Therefore, the second line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if you incurred transactional fees, your costs would have been higher. Actual and hypothetical expenses for each Fund are provided in this table.

		Beginning Account Value 4/01/12		Ending Account Value 9/30/12		Annualized Expense Ratio			Expenses Paid from 4/01/12 - 9/30/12 (1)
Value	Actual	$	1,000.00	$	1,032.94		1.20	%	$	6.12
	Hypothetical(2)		1,000.00		1,019.00		1.20	%		6.07
Partners Value	Actual		1,000.00		1,037.42		1.20	%		6.13
	Hypothetical(2)		1,000.00		1,019.00		1.20	%		6.07
Partners III -	Actual		1,000.00		1,012.92		1.55	%		7.82
Institutional Class	Hypothetical(2)		1,000.00		1,017.25		1.55	%		7.84
Partners III -	Actual		1,000.00		1,011.39		1.80	%		9.08
Investor Class	Hypothetical(2)		1,000.00		1,016.00		1.80	%		9.10
Research	Actual		1,000.00		966.23		0.90	%		4.44
	Hypothetical(2)		1,000.00		1,020.50		0.90	%		4.56
Hickory	Actual		1,000.00		1,041.38		1.26	%		6.45
	Hypothetical(2)		1,000.00		1,018.70		0.26	%		6.38
Balanced	Actual		1,000.00		1,017.02		1.13	%		5.71
	Hypothetical(2)		1,000.00		1,019.35		1.13	%		5.72
Short-Intermediate Income -	Actual		1,000.00		1,018.70		0.62	%		3.14
Institutional Class	Hypothetical(2)		1,000.00		1,021.90		0.62	%		3.14
Short-Intermediate Income -	Actual		1,000.00		1,017.92		0.82	%		4.15
Investor Class	Hypothetical(2)		1,000.00		1,020.90		0.82	%		4.15
Nebraska Tax-Free	Actual		1,000.00		1,016.82		0.70	%		3.54
	Hypothetical(2)		1,000.00		1,021.50		0.70	%		3.55
Government	Actual		1,000.00		1,000.19		0.03	%		0.15
Money Market	Hypothetical(2)		1,000.00		1,024.85		0.03	%		0.15

(1)	Expenses are equal to the annualized expense ratio for the Fund, multiplied by the average account value over the period, multiplied by the number of days in the most recent fiscal half year (183/365).

(2)	Assumes 5% total return before expenses.

weitzfunds.com 73

OTHER INFORMATION

(UNAUDITED)

Proxy Voting Policy

A description of the Funds’ proxy voting policies and procedures is available without charge, upon request by (i) calling 800-304-9745, (ii) on the Funds’ website at http://www.weitzfunds.com; and (iii) on the SEC’s website at http://www.sec.gov.

Information on how each of the Funds voted proxies relating to portfolio securities during each twelve month period ended June 30 is available: (i) on the Funds’ website at http://www.weitzfunds.com, and (ii) on the SEC’s website at http://www.sec.gov.

Form N-Q

The Funds file complete schedules of their portfolio holdings with the Securities and Exchange Commission for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Form N-Q is available on the SEC’s website at http://www.sec.gov and may be reviewed and copied at the SEC’s Public Reference Room in Washington DC. Information on the operation of the Public Reference Room may be obtained by calling 800 SEC-0330. When filed, the Fund’s quarterly reports, including the information filed on Form N-Q will also be available on the Funds’ website at http://www.weitzfunds.com.

Factors Considered by the Board of Trustees in Approving the Continuation of the Management and Investment Advisory Agreements with Wallace R. Weitz & Company

In accordance with the Investment Company Act of 1940, the Board of Trustees of the Funds is required, on an annual basis, to consider the continuation of the Management and Investment Advisory Agreements (the “Agreements”) with Wallace R. Weitz & Company (“Weitz & Co.”). The relevant provisions of the Investment Company Act of 1940 specifically provide that it is the duty of the Board to request and evaluate such information as the Board determines is necessary to allow them to properly consider the continuation of the Agreements, and it is the duty of Weitz & Co. to furnish the Trustees with such information that is responsive to their request. Accordingly, in determining whether to renew the Agreements between the Funds and Weitz & Co., the Board of Trustees requested, and Weitz & Co. provided, information and data relevant to the Board’s consideration. This included materials prepared by Weitz & Co. and materials prepared by an independent informational services firm that produced materials specifically for the Board that provided them with information regarding the investment performance of the Funds and information regarding the fees and expenses of the Funds, as compared to other similar mutual funds. As part of its deliberations, the Board also considered and relied upon the information about the Funds and Weitz & Co. that had been provided to them throughout the year in connection with their regular Board meetings at which they engage in the ongoing oversight of the Funds and their operations.

The Board of Trustees most recently considered the continuation of the Agreements at their in-person meeting held on May 17, 2012. At this meeting the Board engaged in a thorough review process in connection with determining whether or not to continue the Agreements. The Board met during the meeting directly with representatives of Weitz & Co. and reviewed various factors with them concerning the proposed continuation of the Agreements. Among the factors the Board considered were: (1) the nature and quality of services performed for the Funds; (2) the costs of providing such services to the Funds; (3) the potential profitability of the relationship between the Funds and Weitz & Co. and its affiliates; (4) comparative information on fees and expenses borne by other similar mutual funds; (5) other competitive factors; and (6) the potential for economies of scale that might be reflected in fee rates or schedules.

With respect to the equity funds managed by Weitz & Co., consisting of Value Fund, Partners Value Fund, Partners III Opportunity Fund, Research Fund and Hickory Fund (the “Equity Funds”), the Board noted the applicable investment objectives, strategies and fee arrangements for each Equity Fund and also noted Weitz & Co.’s investment expertise and the investment strategies utilized by Weitz & Co. with respect to each of the Equity Funds. The Board discussed with management the fact that Weitz & Co. maintains a particular focus on long-term investment performance results and they reviewed the reasons why this may, from time to time, cause the longer-term performance results and the shorter-term performance results to compare differently when compared to similar funds for similar time periods. In connection with this, the Board took note of management’s stated position that achieving favorable long-term investment results is a primary objective of the firm. The Board also took into consideration the fact that the performance results achieved by Weitz & Co. for the Equity Funds was generally favorable on a short-term basis and on a longer-term basis and that Weitz & Co. produced these results in a manner consistent with the stated investment objectives and policies of these Funds. With respect to the

74 Weitz Funds

Research Fund, the members of the Board took note of the fact that the Fund had only commenced operations as a registered investment company the previous year and they therefore also considered the performance of the Research Fund for the period during which it was operated as a non-registered privately-offered partnership having the same investment objectives and strategies as the Fund.

In addition, the Board compared expenses of each of the Equity Funds to the expenses of their peers, noting that the expenses for each of the Equity Funds compare favorably with industry averages for other funds of similar size and investment objective. The Board also considered the fact that the advisory fees for Value Fund, Partners Value Fund, Partners III Opportunity Fund, Research Fund and Hickory Fund are each subject to breakpoints which result in reduced investment advisory fees as assets increase, and the Board agreed that this type of fee structure is reasonable and fair to shareholders as it permits economies of scale to be realized. They noted the range of investment advisory and administrative services provided by Weitz & Co. to the Equity Funds and the level and quality of these services, and in particular, they noted the quality of the personnel providing these services. With respect to the Research Fund, the members of the Board took into consideration the written expense limitation agreement in place for the Research Fund pursuant to which Weitz & Co. has agreed to waive fees and reimburse expenses in order to limit the total operating expenses of the Research Fund through July 31, 2013.

The Board also reviewed matters with respect to the proposed continuation of the Investment Management Agreement for the Balanced Fund. The Board reviewed the fees and expenses for the Balanced Fund as well as performance information for the Balanced Fund. Among the factors the Board considered was the overall performance of the Balanced Fund relative to its respective benchmark indices as well as the performance of other funds in the Balanced Fund’s peer group. The Board noted that the performance results achieved by Weitz & Co. for the Balanced Fund were favorable and that Weitz & Co. produced these results in a manner consistent with the stated investment objectives and policies of the Balanced Fund. The Board also discussed with representatives of Weitz & Co. the investment advisory fee for the Balanced Fund, and it was noted that the Balanced Fund is not currently subject to breakpoints on its investment advisory fees. Management reviewed with the Board the fact that the Balanced Fund utilizes an investment style that combines equity investments and fixed income investments and it was noted that the Balanced Fund currently has a substantially smaller asset base than most of the Equity Funds. In addition, the Board compared the expenses of the Balanced Fund to its peers, noting that the expenses of the Fund compared favorably with industry averages for other funds of similar size and investment objective. Management indicated that they would be willing to consider the introduction of breakpoints for the Balanced Fund in the event that assets in the Balanced Fund were to become more substantial and economies of scale were able to be realized.

The Board then considered each of the fixed income funds managed by Weitz & Co., consisting of the Short-Intermediate Income Fund, Nebraska Tax-Free Income Fund and Government Money Market Fund (the “Fixed Income Funds”) noting the applicable investment objectives, strategies and fee arrangements for each Fixed Income Fund, and noting Weitz & Co.’s investment expertise and the investment strategies utilized by Weitz & Co. with respect to each of the Fixed Income Funds. Among the factors the Board considered was the overall performance of the Fixed Income Funds relative to their respective benchmark indices as well as the performance and level of expenses of other funds in the Fixed Income Funds’ peer group on a long-term basis and over shorter time periods. The Board noted that the performance results achieved by Weitz & Co. for the Fixed Income Funds was favorable on both a short-term and on a long-term basis and that Weitz & Co. produced these results in a manner consistent with the stated investment objectives and policies of each of the Fixed Income Funds. In addition, the Board compared expenses of each Fixed Income Fund to the expenses of its peers, noting that the expenses for each of the Fixed Income Funds compare favorably with industry averages for other funds of similar size and investment objective. In considering the investment advisory fees applicable to each of the Fixed Income Funds, the Board discussed with representatives of Weitz & Co. their reasons for assessing the applicable fees in connection with each of the Fixed Income Funds, and the Board considered and discussed the fees charged by similar funds in each respective investment category.

In connection with their consideration of the continuation of the Agreements for the Funds, the Board took into consideration the contractual expense limitation agreements in place for the Research Fund, for the Government Money Market Fund, for the Investor Class shares of the Short-Intermediate Income Fund and for the Investor Class shares of Partners III Opportunity Fund as well as the voluntary

weitzfunds.com 75

OTHER INFORMATION

(UNAUDITED) • (CONTINUED)

fee waiver in place for each of the other Funds (other than Partners III Opportunity Fund and Short-Intermediate Income Fund) pursuant to which Weitz & Co. has agreed to waive fees and/or reimburse expenses in order to limit the total operating expenses of the Funds.

The Board then considered various factors in addition to the fees, expenses and performance of each of the Funds. The Board took note of the long-term relationship between Weitz & Co. and the Funds and the efforts that have been undertaken by Weitz & Co. to foster the growth and development of the Funds since the inception of each of the Funds. They also took note of the fact that Weitz & Co. bears a substantial portion of the costs associated with the Funds’ participation in various “fund supermarket” programs out of their own resources, and conducts marketing efforts on behalf of the Funds out of their own resources. The Board also considered the expanded efforts undertaken on the part of Weitz & Co. out of its own resources to continue broadening their marketing and distribution efforts with respect to the Funds, including increased personnel dedicated to marketing and their expanded use of Internet-based resources for use by shareholders. The Board also reviewed financial information concerning Weitz & Co. relating to its operation of the Funds, noting the overall profitability of the relationship with the Funds to Weitz & Co., and the financial soundness of Weitz & Co. as demonstrated by the financial information provided and reached a finding that the level of profitability was consistent with relevant industry averages. In reviewing the profitability of Weitz & Co. relating to its management of the Funds, the Board reviewed the level of profitability including the various marketing expenses that are borne directly by Weitz & Co. and they also considered the level of profitability without taking into consideration the impact of these marketing costs.

The Board further reviewed Weitz & Co.’s brokerage practices, including its soft dollar arrangements and best-execution procedures, and noted that these were reasonable and consistent with standard industry practice. The Board took note of the current portfolio managers for each of the Funds, the other types of accounts that they manage, and their overall management of each of the Funds. The Board also considered information regarding the fees that Weitz & Co. charges other clients for investment advisory services that are similar to the advisory services provided to certain of the Funds and noted that the fees were comparable based on the relevant circumstances of the types of accounts involved.

In considering information regarding the investment management fees payable by the Funds to Weitz & Co. under the Agreements, the Board also took note of the administration fees that are payable by the Funds to Weitz & Co. under the terms of the existing Administration Agreement. In considering the continuation of the Administration Agreement, the Board members indicated that they had considered various factors with respect to the administration fees, including the level and amount of these fees and the services provided by Weitz & Co. in connection with the Administration Agreement, in determining the reasonableness of the total fees paid by the Funds to Weitz & Co. for the overall level of services that Weitz & Co. provides to the Funds and their shareholders. In considering the nature and extent of these non-advisory administrative services provided to the Funds by Weitz & Co., the Board took into consideration: (i) whether the Administration Agreement is in the best interest of the Funds and their shareholders; (ii) whether the services performed under the Administration Agreement are required for the operation of the Funds; (iii) whether the services provided are of a nature and quality at least equal to the same or similar services provided by independent third parties; and (iv) whether the fees for the services are fair and reasonable in light of the usual and customary charges made by others for services of the same nature and quality.

The Board also took into consideration the fact that an affiliate of Weitz & Co., Weitz Securities, Inc., provides underwriting and distribution services to the Funds. The Board noted that Weitz Securities, Inc. provides useful services to the Funds in a highly effective manner that benefit the Funds and their shareholders. The Board considered that in connection with the multi-class structure maintained by two of the Funds, the Partners III Opportunity Fund and the Short-Intermediate Income Fund, Weitz Securities, Inc. is eligible to be compensated with Rule 12b-1 distribution fees from the Investor Class shares of each of those Funds in order to compensate Weitz Securities, Inc. for distribution-related services that it provides. The Board took note of the fact that Weitz Securities, Inc. generally pays all of the distribution fees that it receives to third party intermediaries that have clients invested in the Investor Class shares of these two Funds.

In addition, with respect to Partners III Opportunity Fund and Short-Intermediate Income Fund, which are the only two Funds in the Trust that are subject to the payment of Rule 12b-1 distribution fees and which are subject to separate Administration Agreements with Weitz & Co., the Board noted that Weitz & Co. had entered into Expense

76 Weitz Funds

Limitation Agreements with respect to the Investor Class shares of these Funds in order to limit the total operating expenses of Investor Class shares.

In reaching their conclusion with respect to the continuation of the Agreements, the Trustees did not identify any one single factor as being controlling, rather, the Board took note of a combination of factors that influenced their decision making process. The Board did, however, identify the performance of the Funds, the commitment of Weitz & Co. to the successful operation of the Funds, and the level of expenses of the Funds, as being important elements of their consideration, as well as Weitz & Co.’s willingness to waive fees and/or reimburse expenses of the Funds, as necessary, in order to limit their overall operating expenses. They noted the overall level and quality of the investment advisory, administration and distribution services provided by Weitz & Co. and its affiliates to the Funds and they found that these services continued to benefit the shareholders of the Funds and reflected management’s overall commitment to the continued successful growth and development of the Funds. Based upon their review and consideration of these factors and other matters deemed relevant by the Board in reaching an informed business judgment, a majority of the Board of Trustees, including a majority of the Independent Trustees, concluded that the terms of the Management and Investment Advisory Agreements are fair and reasonable and the Board voted to renew the Agreements for an additional one-year period.

weitzfunds.com 77

INDEX DESCRIPTIONS

Russell 1000		The Russell 1000 is an unmanaged index of large capitalization common stocks. It consists of the 1,000 largest companies in the Russell 3000 Index.

Russell 1000 Value		The Russell 1000 Value is an unmanaged index of large capitalization common stocks. It consists of those Russell 1000 companies with lower price-to-book ratios and lower forecasted growth values.

Russell 3000		The Russell 3000 is an unmanaged index of the 3,000 largest U.S. companies based on market capitalization.

Russell 3000 Value		The Russell 3000 Value is an unmanaged index of the largest capitalization common stocks. It consists of those Russell 3000 companies with lower price-to-book ratios and lower forecasted growth values.

Russell 2500		The Russell 2500 is an unmanaged index of small to mid-capitalization common stocks. It consists of the 2,500 smallest companies in the Russell 3000 Index.

Russell 2500 Value		The Russell 2500 Value is an unmanaged index of small to mid-capitalization common stocks. It consists of those Russell 2500 companies with lower price-to-book ratios and lower forecasted growth values.

S&P 500		The S&P 500 is an unmanaged index consisting of 500 companies generally representative of the market for the stocks of large-size U.S. companies.

Blended		The Blended Index blends the S&P 500 with the Barclays Capital Intermediate U.S. Government/Credit Index by weighting their total returns at 60% and 40%, respectively. The portfolio is rebalanced monthly.

Barclays Capital Intermediate U.S. Government/Credit		The Barclays Capital Intermediate U.S. Government/Credit Index (BCIGC) is a total return performance benchmark consisting of government securities and publicly issued corporate debt with maturities from one to ten years and rated at least BBB by Standard & Poor’s or Baa by Moody’s Investor Service.

Barclays Capital 5-Year Municipal Bond		The Barclays Capital 5-Year Municipal Bond Index is an unmanaged index of long-term, fixed-rate, investment-grade, tax-exempt bonds representative of the municipal bond market.

78 Weitz Funds

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80 Weitz Funds

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weitzfunds.com 81

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82 Weitz Funds

Board of Trustees	Officers
Lorraine Chang	Wallace R. Weitz, President
John W. Hancock	John R. Detisch, Vice President, Secretary &
Thomas R. Pansing, Jr.	Chief Compliance Officer
Roland J. Santoni	Kenneth R. Stoll, Vice President & Chief
Barbara W. Schaefer	Financial Officer
Delmer L. Toebben	Bradley P. Hinton, Vice President
Wallace R. Weitz
Justin B. Wender	Distributor
	Weitz Securities, Inc.
Investment Adviser
Wallace R. Weitz & Company	Transfer Agent and Dividend Paying Agent
1125 South 103rd Street, Suite 200	Wallace R. Weitz & Company
Omaha, NE 68124-1071
(800) 304-9745	Sub-Transfer Agent
	Boston Financial Data Services, Inc.
Custodian
Wells Fargo Bank, N.A.	NASDAQ symbols:
	Value Fund - WVALX
	Partners Value Fund - WPVLX
	Partners III Opportunity Fund
	Institutional Class - WPOPX
	Investor Class - WPOIX
	Research Fund - WRESX
	Hickory Fund - WEHIX
	Balanced Fund - WBALX
	Short-Intermediate Income Fund
	Institutional Class - WEFIX
	Investor Class - WSHNX
	Nebraska Tax-Free Income Fund - WNTFX
	Government Money Market Fund - WGMXX

Help us conserve resources by receiving your report electronically.

Visit us online at weitzfunds.com.

Simply log in to your account and select “Electronic Delivery.”

An investor should consider carefully the investment objectives, risks, and charges and expenses of the Funds before investing. The Funds’ Prospectus contains this and other information about the Funds. The Prospectus should be read carefully before investing.

11/2/12

weitzfunds.com 83

		Total Returns				Average Annual Total Returns
	Inception																	Since
Fund Name	Date	3 Mos.		1 Year		3 Year		5 Year		10 Year		15 Year		20 Year		25 Year		Inception
Value	5/09/86	4.5	%	26.1	%	14.1	%	0.3	%	6.7	%	7.3	%	10.3	%	10.4	%	10.3	%
Russell 1000		6.3		30.1		13.3		1.2		8.4		5.0		8.7		8.8		9.6
Russell 1000 Value		6.5		30.9		11.8		-0.9		8.2		5.5		9.3		9.1		9.9
Partners Value (a)	6/01/83	5.2		28.2		14.8		2.6		7.8		8.2		11.3		11.0		12.4
Partners III Opportunity (a)	6/01/83
Institutional Class		4.1		22.1		16.2		5.8		11.4		9.8		13.3		12.0		13.1
Investor Class (b)		4.0		21.6		16.0		5.7		11.4		9.7		13.3		12.0		13.0
Research (a)(c)	4/01/05	-1.1		20.8		14.8		5.3		—		—		—		—		6.0
Russell 3000		6.2		30.2		13.3		1.3		8.5		5.0		8.7		8.7		—
Russell 3000 Value		6.4		31.1		11.8		-0.7		8.3		5.6		9.4		9.1		—
Hickory	4/01/93	3.7		29.3		18.1		3.6		10.9		6.8		—		—		10.2
Russell 2500		5.6		30.9		14.1		2.8		10.9		7.1		—		—		9.7
Russell 2500 Value		5.9		32.2		13.1		2.2		10.3		7.8		—		—		10.4
S&P 500		6.3		30.2		13.2		1.1		8.0		4.7		8.5		8.6		—
Balanced	10/01/03	3.1		18.6		9.8		3.2		—		—		—		—		5.0
Blended Index		4.4		19.5		10.3		3.4		—		—		—		—		5.9
Short-Intermediate Income	12/23/88
Institutional Class		1.3		3.9		3.6		5.1		4.6		5.1		5.3		—		6.0
Investor Class (b)		1.3		3.7		3.5		5.0		4.6		5.0		5.3		—		5.9
Barclays Intermediate Credit		1.4		4.4		5.2		5.7		4.8		5.7		5.8		—		6.7
Nebraska Tax-Free Income (a)	10/01/85	0.9		3.5		3.3		4.0		3.6		4.3		4.6		5.1		5.4
Barclays 5-Year Muni. Bond		1.4		4.7		4.7		5.7		4.4		4.9		5.2		—		—

(a)	Performance of the Partners Value and Partners III Opportunity Funds is measured from June 1, 1983, the inception of Weitz Partners II Limited Partnership (“Partners II”) and Weitz Partners III Limited Partnership (“Partners III”), respectively. Performance of the Research Fund is measured from April 1, 2005, the inception of Weitz Research Fund, L.P. (“Research L.P.”). Performance of the Nebraska Tax-Free Income Fund is measured from October 1, 1985, the inception of Weitz Income Partners Limited Partnership (“Income Partners”). On the last business day of December 1993, 2005, 2006 and 2010, the Partners Value, Partners III Opportunity, Nebraska Tax-Free Income and Research Funds (the “Funds”) succeeded to substantially all of the assets of Partners II, Partners III, Income Partners and Research L.P. (the “Partnerships”), respectively. The investment objectives, policies and restrictions of the Funds are materially equivalent to those of the respective Partnerships and the Partnerships were managed at all times with full investment authority by Wallace R. Weitz & Company. The performance information includes performance for the period before the Funds became investment companies registered with the Securities and Exchange Commission. During these periods, none of the Partnerships were registered under the Investment Company Act of 1940 and therefore were not subject to certain investment or other restrictions or requirements imposed by the 1940 Act or the Internal Revenue Code. If any of the Partnerships had been registered under the 1940 Act during these periods, the respective Partnerships’ performance might have been adversely affected.
(b)	Investor Class shares first became available for sale on August 1, 2011. For performance prior to that date, this table includes the actual performance of the Fund’s Institutional Class (and uses the actual expenses of the Fund’s Institutional Class, for such period of time), without any adjustments. For any such period of time, the performance of the Fund’s Investor Class would have been substantially similar to, yet lower than, the performance of the Fund’s Institutional Class, because the shares of both classes are invested in the same portfolio of securities, but the classes bear different expenses.
(c)	Starting January 1, 2011, these performance numbers reflect the deduction of the Research Fund’s actual operating expenses. For periods of time prior to January 1, 2011, the performance numbers reflect the deduction of annual pro forma operating expenses of 1.50%. Annual operating expenses for the Research Fund, as stated in the Research Fund’s Prospectus, are 1.85% (gross) and 0.92% (net) of the Fund’s net assets. The investment adviser has agreed, in writing, to limit the total annual fund operating expenses (excluding taxes, interest, brokerage commissions, and acquired fund fees and expenses) to 0.90% of the Fund’s average daily net assets through July 31, 2013.

New and Eliminated Securities for Quarter Ended September 30, 2012
New ($mil)			Eliminations ($mil)
DIRECTV	$	14.6	Tyco International	$	34.0
			Comcast		24.6
			Lockheed Martin		14.8

	Total Returns				Average Annual Total Returns
	3 Mos.		1 Year		3 Year		5 Year		10 Year		15 Year		20 Year		25 Year
Value	4.5	%	26.1	%	14.1	%	0.3	%	6.7	%	7.3	%	10.3	%	10.4	%
S&P 500	6.3		30.2		13.2		1.1		8.0		4.7		8.5		8.6
Russell 1000	6.3		30.1		13.3		1.2		8.4		5.0		8.7		8.8
Russell 1000 Value	6.5		30.9		11.8		-0.9		8.2		5.5		9.3		9.1

	Value		S&P 500		Relative
Year	(1)		(2)		Results (1)-(2)
1986 (5/9/86)	3.5	%	4.1	%	-0.6	%
1987	-0.5		5.1		-5.6
1988	16.4		16.6		-0.2
1989	22.1		31.7		-9.6
1990	-5.2		-3.1		-2.1
1991	27.6		30.5		-2.9
1992	13.6		7.6		6.0
1993	20.0		10.1		9.9
1994	-9.8		1.3		-11.1
1995	38.4		37.6		0.8
1996	18.7		23.0		-4.3
1997	38.9		33.4		5.5
1998	28.9		28.6		0.3
1999	21.0		21.0		0.0
2000	19.6		-9.1		28.7
2001	0.2		-11.9		12.1
2002	-17.1		-22.1		5.0
2003	28.7		28.7		0.0
2004	15.7		10.9		4.8
2005	-2.8		4.9		-7.7
2006	21.8		15.8		6.0
2007	-10.3		5.5		-15.8
2008	-40.7		-37.0		-3.7
2009	27.6		26.5		1.1
2010	19.9		15.1		4.8
2011	6.1		2.1		4.0
2012 (9/30/12)	13.1		16.4		-3.3
Since Inception:
Cumulative
Return	1,225.9		1,011.5		214.4
Avg. Annual
Return	10.3		9.5		0.8


Performance Summary	4

Letter to Shareholders	5

Analyst Corner	8

Value Fund	9

Partners Value Fund	13

Partners III Opportunity Fund	17

Research Fund	22

Hickory Fund	26

Balanced Fund	30

Short-Intermediate Income Fund	34

Nebraska Tax-Free Income Fund	41

Government Money Market Fund	47

Financial Statements	50

Notes to Financial Statements	61

Actual and Hypothetical Expenses for Comparison Purposes	73

Other Information	74

Index Descriptions	78



Wallace R. Weitz	Bradley P. Hinton
wally@weitzfunds.com	brad@weitzfunds.com


Top Ten Stocks
Berkshire Hathaway, Inc. - CL B	5.5	%
Valeant Pharmaceuticals International, Inc.	5.0
Aon plc - CL A	4.7
Wells Fargo & Co.	3.6
Texas Instruments, Inc.	3.3
Hewlett-Packard Co.	3.3
Martin Marietta Materials, Inc.	3.1
Omnicom Group, Inc.	3.1
Target Corp.	3.0
Google, Inc. - CL A	3.0
% of Net Assets	37.6	%

Industry Sectors
Information Technology	16.0	%
Consumer Discretionary	15.1
Financials	13.8
Energy	7.9
Consumer Staples	5.6
Materials	5.3
Health Care	5.0
Industrials	2.9
Cash Equivalents/Other	28.4
Net Assets	100.0	%

Top Performers for Quarter Ended September 30, 2012
	QTD Return		Average Weight		Contribution to
Security Name	of Security		in Portfolio		Fund Performance
Google, Inc. - CL A	30.1	%	3.9	%	1.05	%
Valeant Pharmaceuticals International, Inc.	23.4		4.6		0.98
Liberty Global, Inc. - Series C	18.2		3.1		0.54
Aon plc - CL A	12.1		4.5		0.52
Liberty Interactive Corp. - Series A	15.9		2.6		0.40

Bottom Performers for Quarter Ended September 30, 2012
	QTD Return		Average Weight		Contribution to
Security Name	of Security		in Portfolio		Fund Performance
Dell, Inc.	(20.6	)%	2.3	%	(0.53	)%
Hewlett-Packard Co.	(14.5	)	3.2		(0.46	)
United Parcel Service, Inc. - CL B	(8.5	)	3.1		(0.28	)
Texas Instruments, Inc.	(3.4	)	3.2		(0.11	)
Microsoft Corp.	(2.0	)	2.9		(0.06	)

COMMON STOCKS — 71.6%	Shares		Value
Information Technology — 16.0%
Computers & Peripherals — 5.4%
Hewlett-Packard Co.	1,850,000	$	31,561,000
Dell, Inc.	2,000,000		19,720,000
			51,281,000
Semiconductors — 3.3%
Texas Instruments, Inc.	1,150,000		31,682,500
Internet Software & Services — 3.0%
Google, Inc. - CL A*	37,500		28,293,750
Software — 2.8%
Microsoft Corp.	900,000		26,802,000
IT Services — 1.5%
Accenture plc - CL A	200,000		14,006,000
			152,065,250
Consumer Discretionary — 15.1%
Cable & Satellite — 4.5%
Liberty Global, Inc. - Series C*	500,000		28,210,000
DIRECTV*	275,000		14,426,500
			42,636,500
Advertising — 3.1%
Omnicom Group, Inc.	575,000		29,647,000
Multiline Retail — 3.0%
Target Corp.	450,000		28,561,500
Internet & Catalog Retail — 2.7%
Liberty Interactive Corp. - Series A*	1,350,000		24,975,000
Movies and Entertainment — 1.8%
The Walt Disney Co.	325,000		16,991,000
			142,811,000
Financials — 13.8%
Property & Casualty Insurance — 5.5%
Berkshire Hathaway, Inc. - CL B*	590,000		52,038,000
Insurance Brokers — 4.7%
Aon plc - CL A	850,000		44,446,500
Commercial Banks — 3.6%
Wells Fargo & Co.	975,000		33,666,750
			130,151,250
Energy — 7.9%
Oil & Gas Exploration & Production — 7.9%
Range Resources Corp.	400,000		27,948,000
Apache Corp.	275,000		23,779,250
Southwestern Energy Co.*	675,000		23,476,500
			75,203,750

		Principal
		amount
		or shares		Value
Consumer Staples — 5.6%
Beverages — 3.0%
Diageo plc - Sponsored ADR		130,000	$	14,654,900
Anheuser-Busch InBev SA/NV -
Sponsored ADR		165,000		14,175,150
				28,830,050
Food & Staples Retailing — 2.6%
CVS Caremark Corp.		500,000		24,210,000
				53,040,050
Materials — 5.3%
Construction Materials — 3.1%
Martin Marietta Materials, Inc.		360,000		29,833,200
Industrial Gases — 1.4%
Praxair, Inc.		125,000		12,985,000
Fertilizers & Agricultural Chemicals — 0.8%
The Mosaic Co.		125,000		7,201,250
				50,019,450
Health Care — 5.0%
Pharmaceuticals — 5.0%
Valeant Pharmaceuticals International, Inc.*		850,000		46,979,500
Industrials — 2.9%
Air Freight & Logistics — 2.9%
United Parcel Service, Inc. - CL B		390,000		27,912,300
Total Common Stocks
(Cost $538,010,891)				678,182,550

CASH EQUIVALENTS — 26.7%
Wells Fargo Advantage Government Money Market Fund -
Institutional Class 0.01% (a)		10,501,451		10,501,451
U.S. Treasury Bills, 0.09% to 0.12%,
10/11/12 to 3/28/13 (b)	$	243,000,000		242,947,294
Total Cash Equivalents
(Cost $253,445,839)				253,448,745
Total Investments in Securities
(Cost $791,456,730)				931,631,295
Other Assets Less Other Liabilities — 1.7%				16,094,670
Net Assets — 100.0%			$	947,725,965
Net Asset Value Per Share			$	34.03

*	Non-income producing
(a)	Rate presented represents the annualized 7-day yield at September 30, 2012.
(b)	Interest rates presented represent the yield to maturity at the date of purchase.

	Partners		Relative
	Value		S&P 500		Results
Year	(1)		(2)		(1)-(2)
1983 (6/1/83)	9.9	%	4.2	%	5.7	%
1984	14.5		6.1		8.4
1985	40.7		31.6		9.1
1986	11.1		18.6		-7.5
1987	4.3		5.1		-0.8
1988	14.9		16.6		-1.7
1989	20.3		31.7		-11.4
1990	-6.3		-3.1		-3.2
1991	28.1		30.5		-2.4
1992	15.1		7.6		7.5
1993	23.0		10.1		12.9
1994	-9.0		1.3		-10.3
1995	38.7		37.6		1.1
1996	19.1		23.0		-3.9
1997	40.6		33.4		7.2
1998	29.1		28.6		0.5
1999	22.1		21.0		1.1
2000	21.1		-9.1		30.2
2001	-0.9		-11.9		11.0
2002	-17.0		-22.1		5.1
2003	25.4		28.7		-3.3
2004	15.0		10.9		4.1
2005	-2.4		4.9		-7.3
2006	22.5		15.8		6.7
2007	-8.5		5.5		-14.0
2008	-38.1		-37.0		-1.1
2009	31.3		26.5		4.8
2010	27.5		15.1		12.4
2011	2.2		2.1		0.1
2012 (9/30/12)	14.6		16.4		-1.8
Since Inception:
Cumulative
Return	2,961.6		1,746.0		1,215.6
Avg. Annual
Return	12.4		10.4		2.0

Industry Sectors
Consumer Discretionary	22.3	%
Information Technology	16.6
Financials	15.2
Health Care	8.7
Energy	6.2
Materials	3.5
Consumer Staples	1.9
Cash Equivalents/Other	25.6
Net Assets	100.0	%

COMMON STOCKS — 74.4%	Shares		Value
Consumer Discretionary — 22.3%
Cable & Satellite — 5.7%
Liberty Global, Inc. - Series C*	380,000	$	21,439,600
Comcast Corp. - CL A Special	325,000		11,310,000
DIRECTV*	150,000		7,869,000
			40,618,600
Internet & Catalog Retail — 3.1%
Liberty Interactive Corp. - Series A*	1,050,000		19,425,000
Liberty Ventures - Series A*	60,000		2,978,400
Liberty Ventures - Series A - Rights,
expiration date 10/09/12*	20,000		270,800
			22,674,200
Multiline Retail — 3.1%
Target Corp.	350,000		22,214,500
Textiles, Apparel & Luxury Goods — 2.7%
Iconix Brand Group, Inc.*	1,066,700		19,456,608
Hotels, Restaurants & Leisure — 2.6%
Interval Leisure Group, Inc.	1,000,000		18,930,000
Broadcasting — 2.2%
Liberty Media Corp. -
Liberty Capital - Series A*	155,000		16,146,350
Movies & Entertainment — 1.8%
Live Nation Entertainment, Inc.*	1,530,626		13,178,690
Specialized Consumer Services — 1.1%
Coinstar, Inc.*	182,444		8,206,331
			161,425,279
Information Technology — 16.6%
Internet Software & Services — 4.1%
Google, Inc. - CL A*	28,000		21,126,000
XO Group, Inc.*	1,000,000		8,350,000
			29,476,000
Computers & Peripherals — 4.0%
Hewlett-Packard Co.	852,800		14,548,768
Dell, Inc.	1,450,000		14,297,000
			28,845,768
Semiconductors — 3.1%
Texas Instruments, Inc.	825,000		22,728,750
Electronic Equipment & Instruments — 3.0%
FLIR Systems, Inc.	1,075,000		21,473,125
Software — 2.4%
Microsoft Corp.	575,000		17,123,500
			119,647,143
Financials — 15.2%
Property & Casualty Insurance — 4.1%
Berkshire Hathaway, Inc. - CL B*	340,000		29,988,000
Insurance Brokers — 4.0%
Aon plc - CL A	550,000		28,759,500
Mortgage REIT’s — 3.6%
Redwood Trust, Inc.	1,800,000		26,028,000
Commercial Banks — 3.5%
Wells Fargo & Co.	725,000		25,034,250
			109,809,750

*	Non-income producing
(a)	Rate presented represents the annualized 7-day yield at
	September 30, 2012.
(b)	Interest rates presented represent the yield to maturity at the date of purchase.

	1)	Our technology investments have been very out of step. The Standard and Poor’s 500 Information Technology Index has returned +22% so far this year. Our technology investments, on the other hand, have detracted from results. While Hewlett-Packard and Dell have been the poorest performers, FLIR Systems, Texas Instruments and XO Group contributed to the deficit as well;

	2)	Several of our other core holdings have underperformed the stock indices that we are short. Examples include SandRidge Energy (-15%) and Omnicare (-1%), which are down in an up market, as well as Live Nation (+4%) and LabCorp (+8%), which are up less than the indices;

	3)	Our net long position of less than 75% has been a headwind in a strongly rising stock market.

Top Ten Stocks%
Valeant Pharmaceuticals International, Inc.	6.1	%
Wells Fargo & Co.	5.9
SandRidge Energy, Inc.	4.7
Iconix Brand Group, Inc.	4.7
Hewlett-Packard Co.	4.4
Berkshire Hathaway, Inc. - CL B	4.4
Liberty Media Corp. - Liberty Capital - Series A	4.1
Aon plc - CL A	4.0
Texas Instruments, Inc.	4.0
Redwood Trust, Inc.	3.9
% of Net Assets	46.2	%

Industry Sectors
Consumer Discretionary	27.4	%
Information Technology	19.4
Financials	18.2
Health Care	12.6
Energy	9.7
Materials	2.7
Industrials	2.1
Securities Sold Short	(13.8	)
Short Proceeds/Other	21.7
Net Assets	100.0	%

COMMON STOCKS — 92.1%	Shares		Value
Consumer Discretionary — 27.4%
Broadcasting — 5.1%
Liberty Media Corp. -
Liberty Capital - Series A* (b)	230,000	$	23,959,100
Cumulus Media, Inc. - CL A*	2,100,000		5,754,000
			29,713,100
Cable & Satellite — 4.8%
Liberty Global, Inc. - Series C* (b)	365,000		20,593,300
DIRECTV*	150,000		7,869,000
			28,462,300
Textiles, Apparel & Luxury Goods — 4.7%
Iconix Brand Group, Inc.*	1,500,000		27,360,000
Internet & Catalog Retail — 4.0%
Liberty Interactive Corp. - Series A* (b)	1,000,000		18,500,000
Liberty Ventures - Series A* (b)	70,000		3,474,800
Liberty Ventures - Series A - Rights,
expiration date 10/09/12* (b)	23,334		315,942
Groupon, Inc.*	300,000		1,428,000
			23,718,742
Movies & Entertainment — 3.8%
Live Nation Entertainment, Inc.*	2,600,000		22,386,000
Hotels, Restaurants & Leisure — 2.5%
Interval Leisure Group, Inc.	780,000		14,765,400
Advertising — 2.5%
National CineMedia, Inc.	900,000		14,733,000
			161,138,542
Information Technology — 19.4%
Computers & Peripherals — 7.4%
Hewlett-Packard Co.	1,501,200		25,610,472
Dell, Inc. (b)	1,800,000		17,748,000
			43,358,472
Semiconductors — 4.0%
Texas Instruments, Inc.	850,000		23,417,500
Internet Software & Services — 3.7%
Google, Inc. - CL A* (b)	20,000		15,090,000
XO Group, Inc.*	840,000		7,014,000
			22,104,000
Electronic Equipment & Instruments — 2.4%
FLIR Systems, Inc.	700,000		13,982,500
Software — 1.9%
Microsoft Corp.	380,000		11,316,400
			114,178,872
Financials — 18.2%
Commercial Banks — 5.9%
Wells Fargo & Co. (b)	1,000,000		34,530,000
Property & Casualty Insurance — 4.4%
Berkshire Hathaway, Inc. - CL B* (b)	290,000		25,578,000
Insurance Brokers — 4.0%
Aon plc - CL A (b)	450,000		23,530,500
Mortgage REIT’s — 3.9%
Redwood Trust, Inc. (b)	1,596,400		23,083,944
			106,722,444

	Shares		Value
Health Care — 12.6%
Health Care Services — 6.5%
Omnicare, Inc. (b)	610,000	$	20,721,700
Laboratory Corp. of America Holdings* (b)	190,000		17,569,300
			38,291,000
Pharmaceuticals — 6.1%
Valeant Pharmaceuticals International, Inc.* (b) 650,000			35,925,500
			74,216,500
Energy — 9.7%
Oil & Gas Exploration & Production — 9.7%
SandRidge Energy, Inc.*	4,000,000		27,880,000
Range Resources Corp. (b)	220,000		15,371,400
Southwestern Energy Co.*	200,000		6,956,000
Apache Corp. (b)	80,000		6,917,600
			57,125,000
Materials — 2.7%
Construction Materials — 2.7%
Martin Marietta Materials, Inc. (b)	130,000		10,773,100
Texas Industries, Inc.* (b)	127,000		5,162,550
			15,935,650
Industrials — 2.1%
Commercial Services & Supplies — 1.5%
Ascent Capital Group, Inc. - CL A*	162,000		8,749,620
Machinery — 0.6%
Intelligent Systems Corp.* # †	2,270,000		3,359,600
			12,109,220
Total Common Stocks
(Cost $435,785,823)			541,426,228

	Expiration	Shares
PUT	date/	subject
OPTIONS* — 0.1%	Strike price	to option	Value
Put Options
S&P 100 Index	Nov. 2012 / $640	20,000	120,400
S&P 100 Index	Nov. 2012 / $650	30,000	255,000
S&P 500 Index	Nov. 2012 / $1,405	10,000	180,000
Total Put Options
(premiums paid $1,481,500)			555,400

CASH EQUIVALENTS — 8.7%	Shares		Value
Wells Fargo Advantage Government Money Market Fund -
Institutional Class 0.01% (a)
(Cost $51,326,794)	51,326,794	$	51,326,794
Total Investments in Securities
(Cost $488,594,117)			593,308,422
Due From Broker (b) — 13.7%			80,827,304
Securities Sold Short — (13.2%)			(77,847,500	)
Options Written — (0.6%)			(3,593,500	)
Other Liabilities in Excess of Other Assets — (0.8%)			(4,728,645	)
Net Assets — 100.0%		$	587,966,081
Net Asset Value Per Share - Institutional Class		$	12.90
Net Asset Value Per Share - Investor Class		$	12.85
SECURITIES SOLD SHORT — (13.2%)
Ishares Russell 2000 Fund	320,000		(26,707,200	)
Ishares Russell 2000 Value Fund	130,000		(9,612,200	)
Ishares Russell Midcap Fund	180,000		(19,938,600	)
SPDR S&P 500 ETF Trust	150,000		(21,589,500	)
Total Securities Sold Short
(proceeds $73,023,229)		$	(77,847,500	)

*	Non-income producing
†	Controlled affiliate
#	Illiquid and/or restricted security that has been fair valued.
(a)	Rate presented represents the annualized 7-day yield at September 30, 2012.
(b)	Fully or partially pledged as collateral on securities sold short and outstanding written options.

New and Eliminated Securities for Quarter Ended September 30, 2012
New ($000’s)			Eliminations ($000’s)
Sapient	$	284	Redwood Trust	$	276
DIRECTV		283	Grand Canyon Education		236
			Liberty Interactive		220
			Republic Services		209

Top Ten Stocks
Coinstar, Inc.	8.5	%
FLIR Systems, Inc.	5.6
Valeant Pharmaceuticals International, Inc.	5.0
KIT digital, Inc.	5.0
Southwestern Energy Co.	4.6
Berkshire Hathaway, Inc. - CL B	4.1
Microsoft Corp.	4.0
FTI Consulting, Inc.	3.6
Dell, Inc.	3.2
Hewlett-Packard Co.	3.1
% of Net Assets	46.7	%

COMMON STOCKS — 78.6%	Shares		Value
Information Technology — 33.4%
Internet Software & Services — 9.5%
KIT digital, Inc.*	274,988	$	824,964
Google, Inc. - CL A*	659		497,215
XO Group, Inc.*	28,628		239,044
			1,561,223
Computers & Peripherals — 8.0%
Dell, Inc.	53,452		527,037
Hewlett-Packard Co.	30,300		516,918
Apple Inc.	400		266,904
			1,310,859
Electronic Equipment & Instruments — 5.6%
FLIR Systems, Inc.	46,490		928,638
Software — 5.5%
Microsoft Corp.	22,329		664,958
Oracle Corp.	7,700		242,473
			907,431
IT Services — 3.3%
Sapient Corp.*	29,500		314,470
Accenture plc - CL A	3,300		231,099
			545,569
Semiconductors — 1.5%
Texas Instruments, Inc.	8,700		239,685
			5,493,405
Consumer Discretionary — 21.0%
Specialized Consumer Services — 8.5%
Coinstar, Inc.*	30,992		1,394,020
Hotels, Restaurants & Leisure — 3.1%
Interval Leisure Group, Inc.	26,810		507,513
Advertising — 1.8%
National CineMedia, Inc.	18,000		294,660
Cable & Satellite — 1.7%
DIRECTV*	5,400		283,284
Multiline Retail — 1.5%
Target Corp.	4,000		253,880
Movies & Entertainment — 1.5%
The Walt Disney Co.	4,800		250,944
Textiles, Apparel & Luxury Goods — 1.5%
Iconix Brand Group, Inc.*	13,500		246,240
Education Services — 1.4%
ITT Educational Services, Inc.*	6,960		224,321
			3,454,862
Financials — 6.9%
Property & Casualty Insurance — 4.1%
Berkshire Hathaway, Inc. - CL B*	7,671		676,582
Insurance Brokers — 2.8%
Aon plc - CL A	8,930		466,950
			1,143,532

	Shares		Value
Health Care — 6.2%
Pharmaceuticals — 5.0%
Valeant Pharmaceuticals International, Inc.*	15,030	$	830,708
Health Care Services — 1.2%
Omnicare, Inc.	5,620		190,911
			1,021,619
Energy — 4.6%
Oil & Gas Exploration & Production — 4.6%
Southwestern Energy Co.*	21,669		753,648
Industrials — 3.6%
Research & Consulting Services — 3.6%
FTI Consulting, Inc.*	22,419		598,139
Consumer Staples — 2.9%
Personal Products — 1.6%
Avon Products, Inc.	16,200		258,390
Food & Staples Retailing — 1.3%
CVS Caremark Corp.	4,560		220,795
			479,185
Total Common Stocks
(Cost $12,328,506)			12,944,390


CASH EQUIVALENTS — 19.5%
Wells Fargo Advantage Government Money Market Fund -
Institutional Class 0.01% (a)
(Cost $3,214,414)	3,214,414		3,214,414
Total Investments in Securities
(Cost $15,542,920)			16,158,804
Other Assets less Other Liabilities — 1.9%			308,161
Net Assets — 100.0%		$	16,466,965
Net Asset Value Per Share		$	10.35

	Hickory		Russell		Relative
Year	(1)		2500 (2)		Results (1)-(2)
2008 (7/1/08)	-28.9	%	-31.2	%	2.3	%
2009	36.5		34.4		2.1
2010	38.7		26.7		12.0
2011	1.5		-2.5		4.0
2012 (9/30/12)	14.9		14.3		0.6
Since 7/1/08:
Cumulative
Return	56.9		30.6		26.3
Avg. Annual
Return	11.2		6.5		4.7

COMMON STOCKS — 65.7%	Shares		Value
Consumer Discretionary — 27.5%
Broadcasting — 4.1%
Liberty Media Corp. -
Liberty Capital - Series A*	105,000	$	10,937,850
Cumulus Media, Inc. - CL A*	1,200,000		3,288,000
			14,225,850
Internet & Catalog Retail — 4.0%
Liberty Interactive Corp. - Series A*	670,000		12,395,000
Liberty Ventures - Series A*	33,500		1,662,940
Liberty Ventures - Series A - Rights,
expiration date 10/09/12*	11,167		151,201
			14,209,141
Advertising — 4.0%
National CineMedia, Inc.	850,000		13,914,500
Movies & Entertainment — 3.5%
Live Nation Entertainment, Inc.*	1,430,000		12,312,300
Cable & Satellite — 3.2%
Liberty Global, Inc. - Series C*	187,500		10,578,750
CIBL, Inc.#	1,005		831,135
			11,409,885
Textiles, Apparel & Luxury Goods — 3.2%
Iconix Brand Group, Inc.*	625,000		11,400,000
Hotels, Restaurants & Leisure — 3.2%
Interval Leisure Group, Inc.	600,000		11,358,000
Specialized Consumer Services — 2.3%
Coinstar, Inc.*	180,000		8,096,400
			96,926,076
Financials — 10.8%
Insurance Brokers — 5.1%
Aon plc - CL A	160,000		8,366,400
Brown & Brown, Inc.	230,000		5,996,100
Willis Group Holdings Ltd.	100,000		3,692,000
			18,054,500
Mortgage REIT’s — 3.9%
Redwood Trust, Inc.	947,600		13,702,296
Property & Casualty Insurance — 1.8%
CNA Financial Corp.	230,000		6,164,000
			37,920,796
Information Technology — 7.3%
Electronic Equipment & Instruments — 4.0%
FLIR Systems, Inc.	700,000		13,982,500
Internet Software & Services — 2.1%
XO Group, Inc.*	680,000		5,678,000
KIT digital, Inc.*	600,000		1,800,000
			7,478,000
IT Services — 1.2%
Sapient Corp.*	400,000		4,264,000
			25,724,500

New and Eliminated Stocks for Quarter Ended September 30, 2012
New ($mil)			Eliminations ($mil)
Coinstar	$	1.6	Eagle Materials	$	1.0
FTI Consulting		0.9	Lockheed Martin		0.9

COMMON STOCKS — 47.2%	Shares		Value
Consumer Discretionary — 10.3%
Advertising — 2.8%
National CineMedia, Inc.	90,000	$	1,473,300
Omnicom Group, Inc.	20,000		1,031,200
			2,504,500
Specialized Consumer Services — 1.8%
Coinstar, Inc.*	35,000		1,574,300
Movies and Entertainment — 1.7%
The Walt Disney Co.	30,000		1,568,400
Multiline Retail — 1.6%
Target Corp.	22,500		1,428,075
Internet & Catalog Retail — 1.2%
Liberty Interactive Corp. - Series A*	60,000		1,110,000
Cable & Satellite — 1.2%
Comcast Corp. - CL A Special	30,000		1,044,000
			9,229,275
Information Technology — 9.7%
Electronic Equipment & Instruments — 2.2%
FLIR Systems, Inc.	100,000		1,997,500
Internet Software & Services — 2.0%
Google, Inc. - CL A*	2,400		1,810,800
Semiconductors — 1.5%
Texas Instruments, Inc.	50,000		1,377,500
Computers & Peripherals — 1.4%
Dell, Inc.	125,000		1,232,500
Software — 1.3%
Microsoft Corp.	40,000		1,191,200
IT Services — 1.3%
Accenture plc - CL A	16,000		1,120,480
			8,729,980
Financials — 8.4%
Property & Casualty Insurance — 2.7%
Berkshire Hathaway, Inc. - CL B*	27,000		2,381,400
Mortgage REIT’s — 2.4%
Redwood Trust, Inc.	150,000		2,169,000
Insurance Brokers — 2.3%
Aon plc - CL A	40,000		2,091,600
Commercial Banks — 1.0%
Wells Fargo & Co.	25,000		863,250
			7,505,250
Health Care — 6.1%
Health Care Services — 3.5%
Laboratory Corp. of America Holdings*	23,000		2,126,810
Omnicare, Inc.	30,000		1,019,100
			3,145,910
Pharmaceuticals — 2.6%
Valeant Pharmaceuticals International, Inc.*	42,000		2,321,340
			5,467,250
Consumer Staples — 4.5%
Beverages — 3.0%
Diageo plc - Sponsored ADR	12,000		1,352,760
Anheuser-Busch InBev SA/NV -
Sponsored ADR	15,500		1,331,605
			2,684,365
Food & Staples Retailing — 1.5%
CVS Caremark Corp.	27,500		1,331,550
			4,015,915

		Principal
CORPORATE BONDS — 9.8%		amount	Value
American Express Credit Corp.
7.3% 8/20/13	$	650,000	688,832
1.75% 6/12/15		500,000	511,773
Comcast Corp.
6.5% 1/15/15		300,000	338,076
4.95% 6/15/16		193,000	219,286
10.875% 11/15/16
(Universal City Development)		200,000	231,457
Dell, Inc.
5.625% 4/15/14		250,000	268,485
Hewlett-Packard Co.
6.0% 8/01/13		670,000	698,478
4.75% 6/02/14		750,000	790,975
Liberty Interactive LLC
5.7% 5/15/13		750,000	770,625
Markel Corp.
6.8% 2/15/13		750,000	764,375
Time Warner Cable, Inc.
7.5% 4/01/14		120,000	131,797
TE Connectivity Ltd.
5.95% 1/15/14		449,000	478,728
U.S. Bank N.A.
4.95% 10/30/14		500,000	542,884
WellPoint, Inc.
6.0% 2/15/14		250,000	267,579
Wells Fargo & Co.
4.375% 1/31/13		750,000	760,030
0.8216% 11/03/14 (Wachovia Bank)
Floating Rate Security		550,000	545,587
0.6465% 5/16/16 Floating Rate Security		250,000	243,285
WM Wrigley Jr. Co.
3.05% 6/28/13 (d)		500,000	507,438
Total Corporate Bonds
(Cost $8,431,720)			8,759,690