<PAGE>
- --------------------------------------------------------------------------------
WEITZ PARTNERS, INC.
- --------------------------------------------------------------------------------
WEITZ PARTNERS, INC.PARTNERS VALUE FUND
A N N U A L
R E P O R T
DECEMBER 31, 1995
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 December
31, 1995, 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
Cumulative 507.9 481.4
Average Annual Compound Growth
(Since inception May 23, 1983) 15.4 15.0
</TABLE>
Average annual total return for the Fund (inception 1/94) and for the
Predecessor Partnership (inception 5/83) for the one, five, and ten year periods
ended December 31, 1995, was 38.7%, 18.0% and 13.1%, respectively. These returns
assume redemption at the end of each period. Compound annual 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. 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
DECEMBER 31, 1995 - ANNUAL REPORT
January 14, 1996
Dear Fellow Shareholder:
1995 was a wonderful year for the Partners Value Fund. Our total return,
after deducting fees and expenses, was +38.7%. This compares with +37.5% for the
S&P 500 and +31.1% for the average equity mutual fund (source: Lipper). For a
longer-term perspective, the table on the preceding page shows the performance
history of the fund and its predecessor partnership (after deducting expenses).
It was a great year for stocks in general, but the star performers (for
us) were the "interest-sensitive" financial services stocks, particularly the
banks (which as a group rose by over 50%). Our financial companies generally had
good years from a business point of view in both 1994 and 1995, but their stocks
were weak in 1994, then very strong in 1995. This temporary disconnection of
business reality from stock price behavior happens regularly. The good news is
that it gives a "value investor" opportunities, and the bad news is that it
makes it impossible to predict WHEN an undervalued stock will go up.
OUTLOOK FOR OUR COMPANIES
I know that many investors would prefer predictions about the outlook for
"the market" or our fund's 1996 performance, but the best I can do is to discuss
the businesses we own. If our companies do well and we have paid reasonable
prices for their stocks, we will do well over the years. If anyone tells you he
knows WHEN a stock is going to go up, he is probably kidding you, and/or
himself.
Rick Lawson and I recently spent four days at an investment conference
featuring about 100 companies in the cable TV, entertainment, and
telecommunications industries. We heard formal presentations by, and visited
informally with, the managements of about 10 companies we own and 15-20 others
of potential interest. Stocks in these industries account for about 25% of our
portfolio, and we came away very encouraged about our companies and a couple of
new ones.
Wall Street's perception of cable stocks has remained clouded by the
reregulation that was imposed two years ago, but the outlook for the industry
has improved considerably since
2
<PAGE>
then. The new telecommunications bill promises to improve the regulatory
picture, cash flow is rising at double digit rates again, phone companies have
not made much progress in their video experiments, and the cable companies'
prospects for incremental profits from telephony and cable modems for Internet
access are very exciting.
Cellular telephone companies have been growing at 20-50% per year and
several have evolved from highly leveraged, development-stage companies into
financially secure, free cash flow generators. There is uncertainty about the
future shape of wireless telephone competition, but the U.S. market is growing
so rapidly that well-established cellular companies should continue to do well
for years. International opportunities are growing even faster, and several of
our companies are building very valuable businesses abroad. Finally,
consolidation in the industry continues, and some of our companies would make
attractive takeover candidates.
On the financial services front, gross under-valuation has given way to
more reasonable valuations as prices have risen, but each of our companies is an
interesting investment at today's price. Wells Fargo is one of the best-managed
banks in the country, sells for under 10 times estimated 1996 earnings per
share, and has a good chance of accelerating its growth rate if it is successful
in acquiring First Interstate. Dime is cheap based on current earnings, and it
could receive a significant windfall in its supervisory goodwill lawsuit against
the government. Capital One is growing at over 20% per year and selling at under
10 times estimated 1996 earnings. Sallie Mae's earnings outlook has improved
because of changes in the prospects for direct lending by the government and
cost cutting and share repurchases which have been accelerated by new directors
who were elected last year after a proxy fight. And so on.
For each of our companies, I believe that individual company fundamentals
make the stock attractive, and that none depends on a general move up in "the
market" to make it a successful investment. Yet, there is a certain "What goes
up, must come down," fatalism among many investors that causes high anxiety
after a +38% year. Indeed, there are any number of potential stumbling blocks
for the market, and at some point, a TEMPORARY correction of 10-20% (or more) is
inevitable. When that happens, our stocks will not be immune. However, the
likelihood of identifying both the top and the bottom of a market dip, AND
having the courage to act at both points, AND catching a move large enough to
overcome the transaction costs and tax costs involved is very low. So, since I
am optimistic about the long-term prospects for our stocks, I do not foresee any
major changes in our portfolio.
3
<PAGE>
TAX CONSIDERATIONS
Nearly all the investors in the Partners Value Fund are subject to income
taxes, so I do pay attention to tax consequences in managing this portfolio. I
am a long-term oriented value investor, so I tend to use a low-turnover, "buy
and hold" strategy with all of the stock portfolios I manage, but there may be
times when I hold a stock in Partners Value that I am selling in other
portfolios. For example, if a stock appears fully-priced, but our holding period
is a few days or weeks short of the minimum required to receive long-term
capital gains treatment, I may postpone selling. Or, if a stock seems
temporarily over-extended and vulnerable to, say, a $20 per share decline, I may
resist selling if the sale would trigger a $30 per share tax liability for fund
shareholders.
The value investor's guiding principle is to sell a stock if it is clearly
over-valued or if a new investment is available on clearly more attractive
terms, and taxes are only one of several variables that I consider.
Nevertheless, my working assumption is that NET AFTER-TAX RETURNS are more
important than GROSS PRE-TAX RETURNS in this fund.
If you have questions about our portfolio, or any part of this letter,
please feel free to call me any time. If you need tax information or have
questions about your statement, Mary Bickels or Ann Stratton will be happy to
help.
Best regards,
/s/ Wallace R. Weitz
Wallace R. Weitz
President
4
<PAGE>
SCHEDULE OF INVESTMENTS
5
<PAGE>
WEITZ PARTNERS, INC. -- PARTNERS VALUE FUND
SCHEDULE OF INVESTMENTS IN SECURITIES
DECEMBER 31, 1995
<TABLE>
<CAPTION>
SHARES
OR UNITS COST MARKET VALUE
- ---------- -------------- -------------
<C> <S> <C> <C>
COMMON STOCKS -- 84.1%
BANKING -- 15.9%
40,000 Bank America Corp. $ 1,748,625 $ 2,590,000
45,000 Brooklyn Bancorp, Inc.* 1,329,375 1,833,750
10,000 Calumet Bancorp, Inc.* 266,250 277,500
70,000 Dime Bancorp, Inc.* 785,350 813,750
259,832 Fidelity Federal Bank* 519,664 600,861
20,000 First Interstate Bancorp 1,649,616 2,730,000
52,500 Glendale Federal Bank* 493,740 918,750
9,000 Wells Fargo & Co. 1,345,125 1,944,000
-------------- -------------
8,137,745 11,708,611
-------------- -------------
CABLE TELEVISION -- 13.7%
70,000 Adelphia Communications CL A* 891,250 490,000
81,763 Century Communications Corp. CL 609,468 654,104
A*
180,000 Comcast Corporation CL A 2,290,516 3,273,750
160,000 Tele-Communications, Inc. CL A* 2,490,779 3,180,000
37,000 Tele-Communications Liberty 731,591 994,375
Media Gr-A*
40,000 Time Warner, Inc. 761,457 1,515,000
-------------- -------------
7,775,061 10,107,229
-------------- -------------
CONSUMER PRODUCTS AND SERVICES
-- 4.1%
40,000 American Classic Voyages Co.* 394,375 435,000
6,650 Lady Baltimore Foods 212,725 415,625
70,000 Playtex Products, Inc.* 534,919 525,000
75,000 Protection One, Inc.* 426,875 768,750
27,300 Seafield Capital Corp. 1,000,509 928,200
-------------- -------------
2,569,403 3,072,575
-------------- -------------
FEDERAL AGENCIES -- 9.8%
25,000 Federal Home Loan Mortgage Corp. 546,129 2,087,500
20,000 Federal National Mortgage 1,529,238 2,482,500
Association
40,000 Student Loan Marketing 1,540,386 2,635,000
Association
-------------- -------------
3,615,753 7,205,000
-------------- -------------
FINANCIAL SERVICES -- 10.8%
45,000 American Express 1,347,134 1,861,875
70 Berkshire Hathaway, Inc.* 91,818 2,247,350
35,000 Capital One Financial Corp. 806,683 835,625
4,000 Cityscape Financial Corp.* 72,000 83,000
7,000 Guarantee Life Companies, Inc.* 91,000 110,250
40,000 Imperial Thrift & Loan 441,875 490,000
Association*
20,000 PS Group, Inc.* 211,200 215,000
60,000 Salomon, Inc. 2,603,366 2,130,000
-------------- -------------
5,665,076 7,973,100
-------------- -------------
</TABLE>
See accompanying notes to financial statements.
6
<PAGE>
WEITZ PARTNERS, INC. -- PARTNERS VALUE FUND
SCHEDULE OF INVESTMENTS IN SECURITIES, CONTINUED
<TABLE>
<CAPTION>
SHARES
OR UNITS COST MARKET VALUE
- ---------- -------------- -------------
INFORMATION AND DATA PROCESSING
-- 3.2%
<C> <S> <C> <C>
50,000 Business Records Corp. Hldg. $ 540,880 $ 1,975,000
Co.*
175,000 Intelligent Systems Corp.* 164,183 371,875
-------------- -------------
705,063 2,346,875
-------------- -------------
MORTGAGE BANKING -- 6.7%
155,000 Countrywide Credit, Inc. 2,509,454 3,371,250
30,000 Imperial Credit Industries, 171,500 652,500
Inc.*
63,000 Resource Bancshares Mtg. Grp.* 591,990 897,750
-------------- -------------
3,272,944 4,921,500
-------------- -------------
PUBLISHING AND BROADCASTING --
3.5%
23,000 Daily Journal* 231,501 874,000
100,000 Valassis Communications, Inc.* 1,369,960 1,750,000
-------------- -------------
1,601,461 2,624,000
-------------- -------------
REAL ESTATE AND CONSTRUCTION --
6.0%
330,000 Catellus Development Corp.* 2,175,120 1,980,000
365 Central Steel and Wire Co. 179,125 208,415
5,000 Forest City Enterprises Cl A 164,050 161,875
100,000 NHP, Inc.* 1,326,435 1,850,000
125,000 Presley Companies CL A* 399,586 218,750
-------------- -------------
4,244,316 4,419,040
-------------- -------------
REAL ESTATE INVESTMENT TRUSTS --
2.9%
100,000 Redwood Trust, Inc. 1,706,090 1,825,000
35,000 Redwood Trust, Inc. Warrants** 58,450 166,250
10,000 Thornburg Mortgage Asset Corp. 149,350 157,500
-------------- -------------
1,913,890 2,148,750
-------------- -------------
TELECOMMUNICATIONS -- 7.1%
25,000 Airtouch Communications, Inc.* 715,875 706,250
30,000 Cellular Communications of 821,030 832,500
Puerto Rico, Inc.*
160,000 Centennial Cellular Corp. CL A* 2,597,642 2,740,000
25,000 Telephone and Data Systems, Inc. 904,050 987,500
-------------- -------------
5,038,597 5,266,250
-------------- -------------
OTHER -- 0.4%
26,100 Esco Electronics Corp.* 159,357 244,688
8,300 ONI International, Inc. 74,250 2,075
15,625 Package Machinery Co.* 77,500 56,641
-------------- -------------
311,107 303,404
-------------- -------------
Total Common Stocks 44,850,416 62,096,334
-------------- -------------
</TABLE>
See accompanying notes to financial statements.
7
<PAGE>
WEITZ PARTNERS, INC. -- PARTNERS VALUE FUND
SCHEDULE OF INVESTMENTS IN SECURITIES, CONTINUED
<TABLE>
<CAPTION>
SHARES
OR UNITS COST MARKET VALUE
- ---------- -------------- -------------
CONVERTIBLE PREFERRED STOCKS --
0.9%
<C> <S> <C> <C>
65,420 Forest Oil Corp. $.75 Cv. Pfd. $ 711,505 $ 654,200
-------------- -------------
FACE
AMOUNT
- ----------
U.S. GOVERNMENT AND AGENCY
SECURITIES -- 13.6%
$2,000,000 U.S. Treasury Bill 05/16/96 1,961,621 1,961,543
750,000 Federal Home Loan Bank 8.43% 750,728 753,281
1/16/98
2,000,000 Tennessee Valley Authority 2,025,293 2,031,432
7.625% 9/15/99
2,000,000 Federal Natl Mtg. Assn 6.625% 2,000,000 2,011,563
7/12/00
750,000 Federal Home Loan Bank 6.55% 750,000 756,319
11/15/02
2,500,000 Federal Home Loan Bank 6.44% 2,503,900 2,506,250
11/28/05
-------------- -------------
Total U.S. Government 9,991,542 10,020,388
and Agency Securities
-------------- -------------
SHORT-TERM SECURITIES -- 1.6%
1,185,374 Norwest U.S. Government Money 1,185,374 1,185,374
Market Fund, 5.2%
-------------- -------------
Total Investments in $ 56,738,837*** 73,956,296
Securities
-------------- -------------
--------------
Other Assets Less Liabilities -- (175,408)
(0.2%)
-------------
Total Net Assets -- 100% $73,780,888
-------------
-------------
Net Asset Value Per $ 10.384
Share
-------------
-------------
</TABLE>
*Non-income producing
**Each warrant allows for the purchase of 1 share of common stock at $14.99;
expiration date is 12/31/97
***Also approximates cost for federal income tax purposes
See accompanying notes to financial statements.
8
<PAGE>
WEITZ PARTNERS, INC. -- PARTNERS VALUE FUND
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1995
<TABLE>
<S> <C>
Assets:
Investment in securities at market (cost $56,738,837) $ 73,956,296
Accrued interest and dividends receivable 230,866
Receivable for securities sold 73,500
Other assets 10,495
------------
Total assets 74,271,157
------------
Liabilities:
Accrued expenses, including amount due adviser (note 3) 83,536
Payable for securities purchased 406,733
------------
Total liabilities 490,269
------------
Net assets applicable to outstanding capital stock $ 73,780,888
------------
------------
Net assets represented by:
Capital stock outstanding, at par (notes 3 & 4) 71
Additional paid-in capital 54,680,377
Accumulated undistributed net investment income 30,808
Accumulated undistributed net realized gains 1,852,173
Net unrealized appreciation of investments 17,217,459
------------
Total representing net assets applicable to shares outstanding $ 73,780,888
------------
------------
Net asset value per share of outstanding capital stock
(7,104,939 shares outstanding) $ 10.384
------------
------------
</TABLE>
See accompanying notes to financial statements.
9
<PAGE>
WEITZ PARTNERS, INC. -- PARTNERS VALUE FUND
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1995
<TABLE>
<S> <C>
Investment income:
Dividends $ 800,055
Interest 543,641
-----------
Total investment income 1,343,696
-----------
Expenses (note 3):
Investment advisory fee 642,570
Administrative fee 79,655
Other expenses 91,215
-----------
Total expenses 813,440
-----------
Net investment income 530,256
-----------
Realized and unrealized gain on investments (note 5):
Realized gain on investments 7,145,678
-----------
Net increase in unrealized appreciation of investments 12,782,328
-----------
Net realized and unrealized gain on investments 19,928,006
-----------
Net increase in net assets resulting from operations $20,458,262
-----------
-----------
</TABLE>
See accompanying notes to financial statements.
10
<PAGE>
WEITZ PARTNERS, INC. -- PARTNERS VALUE FUND
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------
1995 1994
------------- -------------
<S> <C> <C>
Increase (decrease) in net assets:
From operations:
Net investment income $ 530,256 $ 355,347
Net realized gain 7,145,678 4,805,965
Unrealized appreciation (depreciation) 12,782,328 (10,152,383)
------------- -------------
Net increase (decrease) in net assets resulting from operations 20,458,262 (4,991,071)
------------- -------------
Distributions to shareholders from:
Net investment income 885,603 --
Excess net realized gains 651,811 --
Net realized gains 5,495,175 4,630,290
------------- -------------
Total distributions 7,032,589 4,630,290
------------- -------------
Capital share transactions (note 4):
Proceeds from sales 8,387,791 10,324,210
Payments for redemptions (5,550,950) (3,831,637)
Reinvestment of net investment income and net realized gain at net asset
value 6,230,882 4,553,058
------------- -------------
Total increase from capital share transactions 9,067,723 11,045,631
------------- -------------
Total increase in net assets 22,493,396 1,424,270
------------- -------------
Net assets:
Beginning of period 51,287,492 49,863,222
------------- -------------
End of period (including undistributed net investment income of $30,808 in 1995
and $355,347 in 1994) $ 73,780,888 $ 51,287,492
------------- -------------
------------- -------------
</TABLE>
See accompanying notes to financial statements.
11
<PAGE>
WEITZ PARTNERS, INC. -- PARTNERS VALUE FUND
FINANCIAL HIGHLIGHTS
The following financial information provides selected data for a share of the
Partners Value Fund outstanding throughout the periods indicated.
<TABLE>
<CAPTION>
PERIOD
OCTOBER 12, 1993
(COMMENCEMENT
YEAR ENDED DECEMBER 31, OF OPERATIONS) TO
---------------------------- DECEMBER 31,
1995 1994 1993
------------- ------------- -------------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD $ 8.275 $ 10.000 $ 10.000
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income 0.084 0.057 0.068
Net gains or losses on securities (realized and unrealized) 3.108 (0.964) --
------------- ------------- -------------------
Total from investment operations 3.192 (0.907) 0.068
LESS DISTRIBUTIONS:
Dividends (from net investment income) (0.137) -- (0.068)
Distributions (from excess realized gains) (0.100) --
Distributions (from capital gains) (0.846) (0.818) --
------------- ------------- -------------------
Total distributions (1.083) (0.818) --
------------- ------------- -------------------
NET ASSET VALUE, END OF PERIOD $ 10.384 $ 8.275 $ 10.000
------------- ------------- -------------------
------------- ------------- -------------------
TOTAL RETURN 38.7% -9.0% 0.7%
RATIOS/SUPPLEMENTAL DATA:
Net assets, End of period 73,780,888 51,287,492 49,863,222
Ratio of expenses to average net assets 1.27% 1.29% --
Ratio of net investment income to average net assets 0.82% 0.67% --
Portfolio turnover rate 51% 33% --
</TABLE>
See accompanying notes to financial statements.
12
<PAGE>
WEITZ PARTNERS, INC. -- PARTNERS VALUE FUND
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995
(1) ORGANIZATION AND BUSINESS CHANGES
Weitz Partners, Inc. (the "Company"), is registered under the Investment
Company Act of 1940 as an open-end nondiversified management investment
company. At present, there is only one series authorized by the Company, the
Partners Value Fund (the "Fund"). The accompanying financial statements
present the financial position and results of operations of the Fund. The
following significant accounting policies are in accordance with accounting
policies generally accepted in the investment company industry.
The Fund commenced operations on October 12, 1993. Under an Agreement and
Plan of Exchange (the "Plan"), the Company acquired net assets of
$49,762,545 from Weitz Partners - II Limited Partnership (the "Partnership")
as of the close of business on December 31, 1993, which included securities
with unrealized appreciation of $14,587,514. In exchange for the partners'
interest in the net assets of the Partnership, the Company issued shares of
the Partners Value Fund series in a transaction that qualified as a tax-free
exchange. The Fund was publicly offered effective January 1, 1994.
The Fund's investment objective is capital appreciation. The Fund intends to
invest principally in common stocks, preferred stocks and a variety of
securities convertible into equity such as rights, warrants, preferred
stocks and convertible bonds.
(2) SIGNIFICANT ACCOUNTING POLICIES
(A)VALUATION OF INVESTMENTS
Investments are carried at market determined using the following
valuation methods:
- Securities traded on a national or regional securities exchange are
valued at the last quoted sales price.
- Securities not listed on an exchange or securities in which there
were no reported transactions will be valued at the mean between the
last current closing bid and ask prices.
- Securities or other assets for which reliable recent market
quotations are not readily available will be valued at fair market
value as determined in good faith by or under the direction of the
Company's Board of Directors or a committee of the Board.
All securities are valued in accordance with the above noted policies at
the close of each business day.
13
<PAGE>
When the Fund writes a call option, an amount equal to the premium
received by the Fund is included in the Fund's statement of assets and
liabilities as a liability. The amount of the liability is subsequently
marked-to-market to reflect the current market value of the option
written. The current market value of a traded option is the last sales
price on the principal exchange on which such option is traded, or, in
the absence of such sale, at the latest ask quotation. When an option
expires on its stipulated expiration date or the Fund enters into a
closing purchase transaction, the Fund realizes a gain (or loss if the
cost of a closing purchase transaction exceeds the premium received when
the option was sold) without regard to any unrealized gain or loss on the
underlying security, and the liability related to such option is
extinguished. When a call option is exercised, the Fund realizes a gain
or loss from the sale of the underlying security and the proceeds from
such sale are increased by the premium originally received.
(B)FEDERAL INCOME TAXES
Since the fund's policy is to comply with all sections of the Internal
Revenue Code applicable to regulated investment companies and to
distribute all of its taxable income to shareholders, no provision for
income or excise taxes is required.
Net investment income (loss) and net realized gains (losses) 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.
On the statement of assets and liabilities, as a result of permanent
book-to-tax differences, accumulated undistributed net investment income
has been increased by $30,808 and accumulated undistributed net realized
gain has been increased by $677,806, resulting in a net reclassification
adjustment to decrease additional paid-in-capital by $708,614.
(C)SECURITY TRANSACTIONS
Security transactions are accounted for on the date the securities are
purchased or sold (trade date). Dividend income and distributions to
shareholders are recorded on the ex-dividend date. Interest, including
amortization of discount and premium, is accrued as earned.
Realized gains or losses are determined by specifically identifying the
issue sold.
(D)DIVIDEND POLICY
The Fund will 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. All dividends and distributions
will be reinvested automatically unless the shareholder elects otherwise.
14
<PAGE>
(E)USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of increase and decrease in
net assets from operations during the period. Actual results could differ
from those estimates.
(3) RELATED PARTY TRANSACTIONS
The Company and Fund have retained Wallace R. Weitz & Company (the
"Adviser") as their exclusive investment adviser. In addition, the Company
has an agreement with Weitz Securities, Inc. to act as distributor for the
Fund's shares. Certain officers and directors of the Company are also
officers and directors of the Adviser and Weitz Securities, Inc.
Under the terms of the management and investment advisory agreement, the
Adviser receives an investment advisory fee equal to 1% per annum of the
Fund's average daily net asset value. The Adviser has agreed to reimburse
the Fund up to the amount of advisory fees paid to the extent that total
expenses exceed 1.50% of the Fund's average daily net asset value. The
expenses incurred by the Fund did not exceed the percentage limitation
during the year ended December 31, 1995. At December 31, 1995, the Fund had
accrued advisory fees of $62,859 which were classified as accrued expenses.
Under the terms of the administrative services agreement, certain services
are being provided including the transfer of shares, disbursement of
dividends, fund accounting and related administrator services of the Company
for which the Adviser is being paid a monthly fee. During the year ended
December 31, 1995, the fee was calculated at an annual rate of .12% of the
Fund's average daily net assets.
Weitz Securities, Inc. as distributor, received no compensation for
distribution of Company shares.
As of December 31, 1995, directors, officers and employees of the Company,
the Adviser and Weitz Securities, Inc. and their immediate family members
held 348,343 shares of capital stock of the Fund representing 4.9% of the
Fund.
(4) CAPITAL STOCK
The Company is authorized to issue a total of 1,000,000,000 shares of common
stock in series with a par value of $.00001 per share. Fifty million of
these shares have been authorized by the Board of Directors to be issued in
the series designated the Partners Value Fund shares, of which 7,104,939
shares are outstanding at December 31, 1995. The Board of Directors may
authorize additional shares in series without shareholder approval. Each
share of stock will have a pro rata interest in the assets of the Fund to
which the stock of that series relates and will have no other interest in
the assets of any other series.
15
<PAGE>
Transactions in the capital stock of the Fund are summarized as follows:
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED
DECEMBER 31, 1995 DECEMBER 31, 1994
------------------ ------------------
<S> <C> <C>
Transactions in shares:
Shares issued.................................................. 865,684 1,074,554
Shares redeemed................................................ (562,886) (415,834)
Reinvested dividends........................................... 604,236 552,958
-------- ----------
Net increase................................................. 907,034 1,211,678
-------- ----------
-------- ----------
</TABLE>
(5) SECURITIES TRANSACTIONS
The aggregate cost and the proceeds from the sales of securities was
approximately $40,129,377 and $47,275,055 for the year ended December 31,
1995.
At December 31, 1995, unrealized appreciation of securities was comprised of
gross unrealized appreciation of $18,712,476 offset by gross unrealized
depreciation of $1,495,017.
Transactions relating to covered call options during the year ended December
31, 1995 are summarized as follows:
<TABLE>
<CAPTION>
NUMBER OF
OPTIONS PREMIUM
----------- -----------
<S> <C> <C>
Options written, beginning of period.................................. -- --
Options written during the period..................................... 20,000 46,433
Options exercised during the period................................... (20,000) (46,433)
----------- -----------
Options outstanding, end of period.................................... -- --
----------- -----------
----------- -----------
</TABLE>
There was no option activity during the year ended December 31, 1994.
(6) DIRECTORS' FEES AND EXPENSES
The Company pays directors (other than directors who are also officers of
the Adviser) a fee of $200 per board meeting attended and $100 per audit
committee meeting attended. During the year ended December 31, 1995, the
Fund paid directors' fees of $3,200.
16
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Shareholders
Weitz Partners, Inc. -- Partners Value Fund:
We have audited the accompanying statement of assets and liabilities of
Weitz Partners, Inc. -- Partners Value Fund, including the schedule of
investments in securities, as of December 31, 1995, and the related statement of
operations for the year then ended, the statements of changes in net assets for
each of the years in the two-year period then ended and the financial highlights
for each of the years in the two-year period then ended, and for the period
October 12, 1993, (commencement of operations) to December 31, 1993. These
financial statements and financial highlights are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1995, by correspondence with the custodian. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of the
Weitz Partners, Inc. -- Partners Value Fund as of December 31, 1995, the results
of its operations for the year then ended, the changes in its net assets for
each of the years in the two-year period then ended and the financial highlights
for each of the years in the two-year period then ended, and for the period
October 12, 1993, (commencement of operations) to December 31, 1993, in
conformity with generally accepted accounting principles.
KPMG PEAT MARWICK LLP
Omaha, Nebraska
January 19, 1996
17
<PAGE>
- --------------------------------------------------------------------------------
WEITZ PARTNERS, INC.
- --------------------------------------------------------------------------------
WEITZ PARTNERS, INC.
BOARD OF DIRECTORS
Carroll E. Fredrickson
John W. Hancock
Richard D. Holland
Thomas R. Pansing, Jr.
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 and is not authorized for distribution to
prospective investors unless preceded or accompanied by a current prospectus
which describes the Fund's objectives, policies and other information.
