NOTES TO FINANCIAL STATEMENTS
December 31, 1998
(1) Organization
Heartland Group, Inc. (the "Corporation") is registered as an open-end management company under the
Investment Company Act of 1940. The Large Cap Value Fund, Mid Cap Value Fund, Value Plus Fund, Value
Fund, and U.S. Government Securities Fund (the "Funds"), each of which is a diversified fund, are five of the nine
series of funds issued by the Corporation at December 31, 1998.
(2) Summary of Significant Accounting Policies
The following is a summary of significant accounting policies followed by the Funds in the preparation of the
financial statements:
(a) Portfolio securities which are traded on stock exchanges are valued at the last sales price as of the close of
business on the day the securities are being valued, or, lacking any sales, at the latest bid price. Each over-the-
counter security for which the last sale price on the day of valuation is available from NASDAQ is valued at that
price. All other securities traded in the over-the-counter market are valued at the most recent bid prices. Foreign
securities are valued on the basis of quotations from the primary market in which they are traded, and are
translated from the local currency into U.S. dollars using exchange rates as of the close of the New York Stock
Exchange. Debt securities are stated at fair value as furnished by independent pricing services based primarily
upon information concerning market transactions and dealer quotations for similar securities, or by dealers who
make markets in such securities. Debt securities having maturities of 60 days or less may be valued at acquisition
cost, plus or minus any amortized discount or premium. Securities and other assets for which quotations are not
readily available are valued at their fair value using methods determined by the Board of Directors.
(b) The Funds' policy is to comply with the requirements of the Internal Revenue Code which are applicable to
regulated investment companies and to distribute subst