<PAGE>
- --------------------------------------------------------------------------------
WEITZ PARTNERS, INC.
BOARD OF DIRECTORS
John W. Hancock
Richard D. Holland
Thomas R. Pansing, Jr.
Delmer L. Toebben
Wallace R. Weitz
OFFICERS
Wallace R. Weitz, President
Mary K. Beerling, Vice-President & Secretary
Linda L. Lawson, Vice-President
Richard F. Lawson, Vice-President
INVESTMENT ADVISER
Wallace R. Weitz & Company
DISTRIBUTOR
Weitz Securities, Inc.
CUSTODIAN
Norwest Bank Nebraska, N.A.
TRANSFER AGENT AND DIVIDEND PAYING AGENT
Wallace R. Weitz & Company
This report has been prepared for the information of shareholders of Weitz
Partners, Inc. -- Partners Value Fund. For more detailed information about the
Fund, its investment objectives, management, fees and expenses, please see a
current prospectus. This report is not authorized for distribution to
prospective investors unless preceded or accompanied by a current prospectus.
PARTNERS VALUE FUND
QUARTERLY
REPORT
MARCH 31, 1997
ONE PACIFIC PLACE, SUITE 600
1125 SOUTH 103 STREET
OMAHA, NEBRASKA 68124-6008
402-391-1980
800-232-4161
402-391-2125 FAX
<PAGE>
HISTORICAL PERFORMANCE INFORMATION
The table below gives a long-term perspective of the Partners Value Fund (the
"Fund") and its predecessor, Weitz Partners II -- Limited Partnership (the
"Predecessor Partnership"). Performance numbers are AFTER deducting all fees and
expenses and assume reinvestment of dividends. The Fund succeeded to
substantially all of the assets of the Predecessor Partnership, a Nebraska
investment limited partnership as of December 31, 1993. Wallace R. Weitz was
General Partner and portfolio manager for the Predecessor Partnership and is
portfolio manager for the Fund. The Fund's investment objectives and policies
are substantially identical to those of the Predecessor Partnership. The table
also sets forth average annual total return data for the Fund and the
Predecessor Partnership for the one, five and ten year periods ended March 31,
1997, calculated in accordance with SEC standardized formulas.
<TABLE>
<CAPTION>
PERIOD ENDED DECEMBER 31, PARTNERS II S&P 500
- ---------------------------------------------- --------------- -----------
<S> <C> <C>
1983 (7 Mos.) 9.9% 4.2%
1984 14.5 6.3
1985 40.7 31.7
1986 11.1 18.7
1987 4.3 5.3
1988 14.9 16.5
1989 20.3 31.6
1990 -6.3 -3.1
1991 28.1 30.2
1992 15.1 7.6
1993 23.0 10.1
<CAPTION>
PARTNERS VALUE
---------------
<S> <C> <C>
1994 -9.0 1.3
1995 38.7 37.5
1996 19.2 22.9
1997 (3 Mos.) 1.8 2.7
Cumulative 637.0 634.0
Average Annual Compound Growth (Since
inception June 1, 1983) 15.5 15.5
</TABLE>
Average annual total return for the Fund (inception 1/94) and for the
Predecessor Partnership (inception 6/83) for the one, five and ten year periods
ended March 31, 1997, was 14.2%, 16.1% and 13.1%, respectively. These returns
assume redemption at the end of each period. Average annual total returns for
the Predecessor Partnership and the Fund are calculated in accordance with SEC
standardized formulas.
This information represents past performance and is not indicative of future
performance. The investment return and the principal value of an investment will
fluctuate so that an investor's shares, when redeemed, may be worth more or less
than the original cost. The S&P 500 is an unmanaged index consisting of 500
companies. Information relating to the S&P 500 assumes reinvestment of
dividends. The performance data presented includes performance for the period
before the Fund became an investment company registered with the Securities and
Exchange Commission. During this time, the Fund was not registered under the
Investment Company Act of 1940 and therefore was not subject to certain
investment restrictions imposed by the 1940 Act. If the Fund had been registered
under the 1940 Act during this time period, the Fund's performance might have
been adversely affected. Additional information is available from Wallace R.
Weitz & Co. at the address listed on the front cover.
1
<PAGE>
WEITZ PARTNERS, INC. -- PARTNERS VALUE FUND
MARCH 31, 1997 - QUARTERLY REPORT
April 14, 1997
Dear Fellow Shareholder:
The first quarter started well, and by mid-March, we were up about 10%.
Then, the general market began to fall sharply, and we gave back most of our
gains. By the end of the quarter, our fund was +1.8%, while the S&P 500 was
+2.7% and the NASDAQ was -5.3%. Some of the more aggressive mutual funds managed
by "momentum" investors were down over 20% in the quarter.
For a longer-term perspective on performance, the table on page 1 shows
annual total returns (after all expenses) since inception in 1983.
THE OUTLOOK
The market "correction" which began in mid-March has continued into April,
and there have been some very volatile trading sessions. The S&P is now down
about 10% from its peak, and indexes of smaller company stocks have fallen
farther. Investors have suspected that "the Market" was unsustainably high, and
the financial media is compounding these fears with talk of the arrival of a new
bear market. Long-time clients and readers of these quarterly letters know
better than to expect a market prediction from me, but I do NOT think
shareholders ought to be alarmed at the recent market weakness.
In the first place, 10% corrections are perfectly normal. The fact that we
have NOT had a 10% decline in several years is unusual. Even 20-25% setbacks are
a normal part of stock investing, and while it is annoying to watch paper
profits melt away, it would be totally unrealistic to expect stocks to rise
inexorably forever. We survived temporary market declines of 20+% in 1987 and
1990, and those periods (along with our fund's mini-bear market in 1994) are
barely visible on a long-term chart of our fund's share price. It is human
nature to want to avoid financial pain, and many of those who sell investment
advice encourage investors to try to move in and out of the market to dodge
falling prices. Unfortunately, even the most sophisticated-sounding market
timing advice tends, in the final analysis, to be a version of Will Rogers' "Buy
stocks that go up -- and if they don't go up, don't buy them." A nice idea, but
impossible to execute.
Another reason to be philosophical in the face of market weakness is that
we are investing in individual businesses, not "the Market." I still believe
that each of our cable TV and cellular stocks has the potential to go up by
50-100% over the next few years, regardless of what the S&P does (though I will
spare you a repetition of the valuation details). Wells Fargo and Capital One
are growing at 15-20% per year, yet sell at only 10-11 times next year's
earnings.
2
<PAGE>
NovaStar is a new mortgage REIT which shows great promise. NHP is scheduled to
be acquired at a premium to today's stock price. When Seafield's restructuring
is completed this year, it will have distributed cash and securities worth about
$50 for each share we bought in the mid-$30's. Several of our companies, such as
Valassis, American Classic Voyages, and LabOne (part of Seafield) are in the
midst of earnings turnarounds which are not reflected in their stock prices. In
short, I feel very good about the prospects for all of our stocks.
I have no idea what the general market will do in the short run, but the
good news is that we don't NEED to know what the market will do to make good
long-term investments. We own good businesses at reasonable prices, and this
approach to investing should continue to produce good returns over time. Rick
Lawson, Eric Ball, Tom Carney, and I would be happy to talk to you about any of
our companies, so please feel free to call.
SHAREHOLDER MEETING
This year's shareholder meeting will be on June 2, at 4:30 p.m. at the
Omaha Marriott Hotel. The portfolio managers will discuss our investments and
answer shareholder questions, as usual, and we will also conduct a short
business meeting. You will receive an official notice of the meeting and a proxy
card in early May, and we will ask you to vote on several proposals. Those
involving directors, auditors, and by-laws do not directly affect our portfolio.
However, there are two proposals which involve investment policies.
One proposal would allow us more flexibility in buying shares of
closed-end investment companies. Since closed-end funds sometimes trade at
significant discounts to their underlying net asset values, they can offer
interesting investment opportunities. The other proposal would allow us to use
short sales and put options to try to reduce risk in the portfolio.
Opportunities for such "hedging" arise in stock-for-stock mergers and certain
corporate reorganizations. PLEASE VOTE, SIGN, AND RETURN THE PROXY CARD PROMPTLY
SO THAT THE FUND DOES NOT INCUR THE COST OF A SECOND MAILING.
The meeting will be a good opportunity for you to ask questions about your
investment, to meet our staff, and for us to get to know our newer investors. I
hope to see you on June 2.
Sincerely,
/s/ WALLACE WEITZ
Wallace R. Weitz
President,
Portfolio Manager
3
<PAGE>
WEITZ PARTNERS, INC. -- PARTNERS VALUE FUND
SCHEDULE OF INVESTMENTS IN SECURITIES
MARCH 31, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES
OR UNITS COST VALUE
- ---------- ----------- -------------
<C> <S> <C> <C>
COMMON STOCKS -- 86.4%
BANKING -- 5.2%
100,000 Bank Plus Corp.* $ 942,847 $ 1,037,500
20,000 Dime Bancorp, Inc.* 213,650 307,500
30,000 Poughkeepsie Savings Bank, FSB 148,125 180,000
30,000 R&G Financial Corp. CL B 633,750 759,375
10,000 Wells Fargo & Co. 1,221,816 2,841,250
----------- -------------
3,160,188 5,125,625
----------- -------------
CABLE TELEVISION -- 21.1%
88,000 Adelphia Communications Corp. CL A* 741,763 473,000
230,000 Century Communications Corp. CL A* 1,444,014 1,063,750
285,000 Comcast Corp. Special CL A 4,084,525 4,809,375
20,000 Comcast UK Cable Partners Limited CL A* 250,714 222,500
34,200 TCI Satellite Entertainment CL A* 439,590 265,050
342,000 Tele-Communications, Inc. CL A* 4,613,170 4,104,000
210,000 Tele-Communications Liberty Media CL A* 3,315,443 4,186,875
46,000 Time Warner, Inc. 962,442 1,989,500
190,000 U.S. West Media Group* 3,523,590 3,538,750
----------- -------------
19,375,251 20,652,800
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CONSUMER PRODUCTS AND SERVICES -- 4.0%
50,000 American Classic Voyages Co.* 489,375 521,875
6,650 Lady Baltimore Foods, Inc. 212,725 325,850
110,000 Protection One, Inc.* 936,773 1,155,000
60,000 Seafield Capital Corp. 2,242,662 1,950,000
----------- -------------
3,881,535 3,952,725
----------- -------------
FEDERAL AGENCIES -- 5.0%
60,000 Federal Home Loan Mortgage Corp. 170,785 1,635,000
50,000 Federal National Mortgage Association 951,913 1,806,250
15,000 Student Loan Marketing Association 519,965 1,428,750
----------- -------------
1,642,663 4,870,000
----------- -------------
FINANCIAL SERVICES -- 8.2%
45,000 American Express, Co. 1,347,134 2,694,375
70 Berkshire Hathaway, Inc.* 91,818 2,534,000
40,000 Capital One Financial Corp. 926,068 1,490,000
20,000 HealthCare Financial Partners, Inc.* 263,875 300,000
20,000 PS Group, Inc.* 181,200 280,000
15,000 Salomon, Inc. 558,070 748,125
----------- -------------
3,368,165 8,046,500
----------- -------------
</TABLE>
4
<PAGE>
WEITZ PARTNERS, INC. -- PARTNERS VALUE FUND
SCHEDULE OF INVESTMENTS IN SECURITIES, CONTINUED
<TABLE>
<CAPTION>
SHARES
OR UNITS COST VALUE
- ---------- ----------- -------------
<C> <S> <C> <C>
INFORMATION AND DATA PROCESSING -- 2.1%
44,000 BRC Holdings, Inc.* $ 514,178 $ 1,463,000
175,000 Intelligent Systems Corp.* 164,183 546,875
----------- -------------
678,361 2,009,875
----------- -------------
MORTGAGE BANKING -- 4.9%
100,000 Countrywide Credit Industries, Inc. 1,546,954 2,475,000
144,450 Resource Bancshares Mtg. Grp., Inc. 1,550,365 2,275,088
----------- -------------
3,097,319 4,750,088
----------- -------------
PUBLISHING AND BROADCASTING -- 6.1%
3,000 Chris-Craft Industries, Inc.* 122,481 118,875
23,000 Daily Journal Corp.* 231,501 724,500
135,000 Katz Media Group, Inc.* 1,320,283 860,625
125,000 Valassis Communications, Inc.* 1,785,240 2,796,875
20,000 Walt Disney Co. 1,148,724 1,460,000
----------- -------------
4,608,229 5,960,875
----------- -------------
REAL ESTATE AND CONSTRUCTION -- 8.4%
160,000 Catellus Development Corp.* 964,995 2,440,000
30,000 Forest City Enterprises, Inc. CL A 671,825 1,275,000
170,000 NHP, Inc.* 2,482,685 3,952,500
125,000 Presley Companies CL A* 179,687 140,625
15,000 SLH Corp.* 287,250 431,250
----------- -------------
4,586,442 8,239,375
----------- -------------
REAL ESTATE INVESTMENT TRUSTS -- 9.5%
20,000 Innkeepers USA Trust 215,241 292,500
65,000 NovaStar Financial, Inc.** 975,000 975,000
174,150 Redwood Trust, Inc. 3,134,759 8,054,437
----------- -------------
4,325,000 9,321,937
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TELECOMMUNICATIONS -- 11.8%
180,000 360 Communications Co.* 3,966,960 3,105,000
80,000 Airtouch Communications, Inc.* 2,232,273 1,840,000
260,000 Centennial Cellular Corp. CL A* 3,653,156 2,697,500
33,500 CommNet Cellular, Inc.* 907,488 854,250
108,000 Corecomm, Inc.* 2,775,745 1,566,000
40,000 Telephone and Data Systems, Inc. 1,455,575 1,535,000
----------- -------------
14,991,197 11,597,750
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OTHER -- 0.1%
8,300 ONI International, Inc.* 70,100 2,075
----------- -------------
Total Common Stocks 63,784,450 84,529,625
----------- -------------
</TABLE>
5
<PAGE>
WEITZ PARTNERS, INC. -- PARTNERS VALUE FUND
SCHEDULE OF INVESTMENTS IN SECURITIES, CONTINUED
<TABLE>
<CAPTION>
FACE
AMOUNT COST VALUE
- ---------- ----------- -------------
U.S. GOVERNMENT AND AGENCY SECURITIES -- 9.0%
<C> <S> <C> <C>
$1,000,000 U.S. Treasury Bill 4/17/97 $ 997,758 $ 997,492
2,000,000 U.S. Treasury Bill 5/29/97 1,983,792 1,982,956
2,000,000 Federal Natl Mtg. Assn. 6.625% 7/12/00 2,000,000 1,981,250
1,500,000 Federal Home Loan Bank 6.0% 4/12/01 1,501,742 1,497,852
2,500,000 Federal Home Loan Bank 6.44% 11/28/05 2,503,408 2,392,188
----------- -------------
Total U.S. Government and Agency 8,986,700 8,851,738
Securities
----------- -------------
SHORT-TERM SECURITIES -- 4.4%
4,337,853 Norwest U.S. Government Money Market Fund 4,337,853 4,337,853
----------- -------------
Total Investments in Securities $77,109,003 97,719,216
----------- -------------
-----------
Other Assets Less Liabilities -- 0.2% 155,567
-------------
Total Net Assets -- 100% $97,874,783
-------------
-------------
Net Asset Value Per Share $ 11.727
-------------
-------------
</TABLE>
*Non-income producing
**This restricted security, exempt from registration under the Securities Act of
1933, was purchased in a private placement and, unless registered under the Act
or exempted from registration, may only be sold to qualified institutional
investors or certain accredited investors.
6
