<PAGE>
- --------------------------------------------------------------------------------
WEITZ PARTNERS, INC.
PARTNERS VALUE FUND
SEMI-ANNUAL
REPORT
JUNE 30, 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 June 30,
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 (6 Mos.) 16.5 20.6
Cumulative 744.1 762.0
Average Annual Compound Growth
(Since inception June 1, 1983) 16.3 16.5
</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 June 30, 1997, was 26.2%, 18.8% and 14.6%, 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.
2
<PAGE>
WEITZ PARTNERS, INC. -- PARTNERS VALUE FUND
JUNE 30, 1997 - SEMI-ANNUAL REPORT
July 1, 1997
Dear Fellow Shareholder:
The second quarter of 1997 was a good one for Partners Value. Our total
return (income plus appreciation, after deducting expenses) was +14.5%. This
brings our gain for the first half of the year to +16.5%. Stocks in general have
been strong so far this year (S&P 500 +20.6%, NASDAQ Composite +11.9%, Russell
2000 +10.2%), and positive developments in the cable TV and cellular industries
were particularly helpful to us.
For a longer-term perspective on performance, the table on page 2 shows
annual total returns (after all expenses) since inception in 1983.
COMMENTARY
A highlight of the quarter was the market's renewed interest in cellular
and cable company stocks. Two cellular companies received takeover bids during
the quarter, one of which was our CommNet Cellular. Aside from causing CommNet
to rise from about $25 to over $34, the fact that rational, sophisticated buyers
were willing to pay significant premiums to market prices focused attention on
other cellular stocks which were selling far below their business values. As a
result, our other cellular stocks moved up.
In the cable arena, business continued to be strong for our companies, as
it has been for most of the past five years. However, what drew attention (and
buyers) to the cable stocks were a series of corporate events which demonstrated
the value of cable company assets:
- Microsoft invested $1 billion in Comcast stock. Microsoft wants to be in
the middle of the convergence of computers and television, and Comcast has
major interests in cable television, cable modems, cable and internet
shopping (QVC), and cable and cellular telephony. The details of their
collaboration have not been disclosed, but if Microsoft is to profit from
the venture, it will be through appreciation of Comcast stock.
3
<PAGE>
- Rupert Murdoch's News Corp. dropped out of a joint venture with EchoStar
that would have created a new direct broadcast satellite (DBS) competitor
to the cable industry. Instead, News joined forces with PrimeStar, the
cable industry's own DBS company. This greatly strengthens PrimeStar,
which is owned by several of our cable companies, and eliminates a DBS
competitor.
- Telecommunications, Inc. (TCI) has announced joint ventures with other
cable companies which will allow TCI to decrease its debt and future
capital expenditure needs and to acquire interests in some very valuable
programming properties.
- US West Media Group (UMG) continued to divest non-cable assets and
strengthen its balance sheet. Sales of its cellular and directory
businesses will leave UMG with a cable business worth roughly $30 per
share and marketable securities and other assets worth about $5 per share.
The stock moved up about 9.5% during the quarter, but still sells at just
over half of its estimated private market value.
These events were not earthshaking, but they seemed to give Wall Street
analysts (some of whom have been closet cable fans) the courage to recommend the
stocks. We have a long way to go before cable stocks are POPULAR, but this is a
start.
Most of our other companies have reported good news this year, too, but
there is no escaping the fact that there has been a very strong stock market
tailwind. I am pleased with the performance of our fund, but there is an old
Wall Street adage which reminds us not to mistake a bull market for brains.
Inflated returns have made investors feel smart and complacent. Simplistic
investment approaches have begun to seem foolproof (e.g. "if you like the
product, buy the stock" and "stocks are always the best investment, so buy 'the
market,' i.e. an index fund"). I am optimistic about our companies and their
long-term prospects, but it would not be surprising to see more sharp
corrections like the one we experienced in March-April.
INDEX FUNDS
Speaking of index funds, our portfolio was recently the beneficiary of the
current indexing craze. Countrywide Credit was added to the S&P 500 to replace a
stock that had been taken over. As a result, managers of the hundreds of
billions of dollars of index funds suddenly HAD to buy Countrywide stock. The
price did not matter. They had to own the requisite number of shares to make
their portfolios match the (new) S&P 500. As a result, the price of Countrywide
jumped from $27 to $34 1/2 in a week, a gain of 28%. The value of Countrywide's
business did not change that week, but investment professionals bought tens of
millions of dollars worth of the stock because it was put on a list.
4
<PAGE>
I think this illustrates one of the risks of index fund investing. If the
stocks in an index are reasonably priced, it makes sense to buy an
efficiently-managed fund of those stocks. However, if the popularity of the
CONCEPT of indexing draws excessive amounts of capital out of non-index stocks
and into a small, arbitrarily selected group of stocks, the inevitable result
will be over-valuation of the index stocks and relative under-valuation of the
others. As a value investor, I continue to try to sell the expensive stocks and
buy the bargains, even though that means going against the current investment
fashion.
1997 SHAREHOLDERS' MEETING
On June 2, about 150 clients attended our shareholders' meeting. All of
the proposals regarding directors, auditors, by-laws and investment policies
were approved. After the official business portion of the meeting, Rick Lawson,
Tom Carney, and I answered investment questions for about an hour. We also
announced that we would offer a series of informal "classes" for interested
shareholders on "mutual fund basics," "how we pick stocks," and "planning for
retirement." The initial response was good, and we have already held the first
two sessions. If you are interested in finding out more about future classes,
please call Mary Bickels.
The shareholder meeting is a good chance to get together, meet the staff
and your fellow shareholders, and talk about investments. I hope you will be
able to join us next year.
Best regards,
/s/ Wallace R. Weitz
--------------------
Wallace R. Weitz
President, Portfolio
Manager
5
<PAGE>
SHAREHOLDER VOTE
On June 2, 1997, a special meeting of the shareholders of Weitz Partners,
Inc.-Partners Value Fund was held at which the following proposals were approved
by the shareholders:
PROPOSAL 1: TO ELECT SIX MEMBERS OF THE BOARD OF DIRECTORS OF THE FUND.
<TABLE>
<CAPTION>
FOR AGAINST/WITHHELD ABSTAIN/BROKER NON-VOTES
----------- ----------------- -------------------------
<S> <C> <C> <C>
Wallace R. Weitz...................... 5,850,674 25,510 55,002
John W. Hancock....................... 5,850,674 25,510 55,002
Richard D. Holland.................... 5,850,674 25,510 55,002
Thomas R. Pansing Jr.................. 5,850,674 25,510 55,002
Delmer L. Toebben..................... 5,850,674 25,510 55,002
Lorraine Chang........................ 5,850,674 25,510 55,002
</TABLE>
PROPOSAL 2: TO RATIFY THE SELECTION OF MCGLADREY & PULLEN, LLP, AS INDEPENDENT
AUDITORS FOR THE FUND.
<TABLE>
<CAPTION>
FOR AGAINST/WITHHELD ABSTAIN/BROKER NON-VOTES
----------- ----------------- -------------------------
<S> <C> <C> <C>
5,864,108 12,255 54,824
</TABLE>
PROPOSAL 3: TO AMEND THE BYLAWS OF THE FUND TO CONFORM THE REQUIREMENTS THEREIN
RELATING TO ELECTION OF THE BOARD OF DIRECTORS BY THE SHAREHOLDERS TO THE
REQUIREMENTS OF THE INVESTMENT COMPANY ACT OF 1940.
<TABLE>
<CAPTION>
FOR AGAINST/WITHHELD ABSTAIN/BROKER NON-VOTES
----------- ----------------- ------------------------
<S> <C> <C> <C>
5,725,525 24,341 181,321
</TABLE>
PROPOSAL 4: TO AMEND THE FUND'S FUNDAMENTAL INVESTMENT RESTRICTIONS TO ELIMINATE
THE RESTRICTION WHICH PROHIBITS THE PORTFOLIO'S USE OF CERTAIN INVESTMENT
TECHNIQUES SUCH AS SHORT SALES AND PUT AND CALL OPTIONS.
<TABLE>
<CAPTION>
FOR AGAINST/WITHHELD ABSTAIN/BROKER NON-VOTES
----------- ---------------- ------------------------
<S> <C> <C> <C>
5,624,027 153,335 153,825
</TABLE>
PROPOSAL 5: TO AMEND THE FUND'S FUNDAMENTAL INVESTMENT RESTRICTIONS TO ELIMINATE
THE RESTRICTION RELATING TO INVESTING IN THE SECURITIES OF OTHER INVESTMENT
COMPANIES.
<TABLE>
<CAPTION>
FOR AGAINST/WITHHELD ABSTAIN/BROKER NON-VOTES
----------- ----------------- -------------------------
<S> <C> <C> <C>
5,786,347 55,048 89,792
</TABLE>
6
<PAGE>
SCHEDULE OF INVESTMENTS
7
<PAGE>
WEITZ PARTNERS, INC. -- PARTNERS VALUE FUND
SCHEDULE OF INVESTMENTS IN SECURITIES
JUNE 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES
OR UNITS COST VALUE
---------- ------------ ------------
<C> <S> <C> <C>
COMMON STOCKS -- 90.5%
BANKING -- 5.0%
75,000 Bank Plus Corp.* $ 738,747 $ 815,625
30,000 Poughkeepsie Savings Bank 148,125 219,375
30,000 R&G Financial Corp. CL B 633,750 780,000
14,000 Wells Fargo & Co. 2,243,662 3,773,000
------------ ------------
3,764,284 5,588,000
------------ ------------
CABLE TELEVISION -- 23.9%
88,000 Adelphia Communications Corp. CL A* 741,762 627,000
315,000 Century Communications Corp. CL A* 1,836,761 1,693,125
285,000 Comcast Corp. Special CL A 4,084,525 6,091,875
20,000 Comcast UK Cable Partners Limited CL A* 250,714 240,000
45,000 TCI Satellite Entertainment CL A* 518,911 354,375
342,000 Tele-Communications, Inc. CL A* 4,613,170 5,087,250
255,000 Tele-Communications Liberty Media CL A* 4,208,193 6,056,250
20,000 Time Warner, Inc. 411,635 965,000
268,000 U.S. West Media Group* 4,886,218 5,427,000
------------ ------------
21,551,889 26,541,875
------------ ------------
CONSUMER PRODUCTS AND SERVICES -- 4.2%
50,000 American Classic Voyages Co.* 489,375 537,500
6,650 Lady Baltimore Foods, Inc. 212,725 329,175
110,000 Protection One, Inc.* 936,773 1,485,000
65,000 Seafield Capital Corp. 2,405,786 2,323,750
------------ ------------
4,044,659 4,675,425
------------ ------------
FEDERAL AGENCIES -- 5.5%
60,000 Federal Home Loan Mortgage Corp. 170,785 2,062,500
50,000 Federal National Mortgage Association 951,913 2,181,250
15,000 Student Loan Marketing Association 519,965 1,905,000
------------ ------------
1,642,663 6,148,750
------------ ------------
FINANCIAL SERVICES -- 8.5%
45,000 American Express, Co. 1,347,134 3,352,500
70 Berkshire Hathaway, Inc.* 91,818 3,304,000
40,000 Capital One Financial Corp. 926,068 1,510,000
10,000 Imperial Credit Industries, Inc.* 137,500 205,625
20,000 PS Group, Inc.* 181,200 257,500
15,000 Salomon, Inc. 558,070 834,375
------------ ------------
3,241,790 9,464,000
------------ ------------
</TABLE>
See accompanying notes to financial statements.
8
<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 -- 2.4%
48,000 BRC Holdings, Inc.* $ 626,796 $ 1,824,000
175,000 Intelligent Systems Corp.* 164,183 864,063
------------ ------------
790,979 2,688,063
------------ ------------
MORTGAGE BANKING -- 5.9%
100,000 Countrywide Credit Industries, Inc. 1,546,954 3,118,750
50,000 Long Beach Financial Corp.* 325,000 437,500
10,000 New Century Financial Corp.* 110,000 145,000
144,450 Resource Bancshares Mtg. Grp., Inc. 1,550,365 2,852,887
------------ ------------
3,532,319 6,554,137
------------ ------------
PUBLISHING AND BROADCASTING -- 5.1%
3,000 Chris-Craft Industries, Inc.* 122,481 144,750
23,000 Daily Journal Corp.* 231,501 730,250
145,000 Katz Media Group, Inc.* 1,374,433 951,563
125,000 Valassis Communications, Inc.* 1,785,240 3,000,000
10,000 Walt Disney Co. 549,374 802,500
------------ ------------
4,063,029 5,629,063
------------ ------------
REAL ESTATE AND CONSTRUCTION -- 7.4%
90,000 Catellus Development Corp.* 524,400 1,631,250
30,000 Forest City Enterprises, Inc. CL A 671,825 1,434,375
170,000 NHP, Inc.* 2,482,685 3,825,000
115,000 Presley Companies CL A* 165,313 186,875
15,000 SLH Corp.* 287,250 1,155,000
------------ ------------
4,131,473 8,232,500
------------ ------------
REAL ESTATE INVESTMENT TRUSTS -- 8.9%
14,000 Innkeepers USA Trust 150,669 210,000
65,000 NovaStar Financial, Inc.** 975,000 975,000
186,627 Redwood Trust, Inc. 3,646,047 8,724,812
------------ ------------
4,771,716 9,909,812
------------ ------------
TELECOMMUNICATIONS -- 13.6%
241,300 360 Communications Co.* 4,960,098 4,132,263
80,000 Airtouch Communications, Inc.* 2,232,273 2,190,000
260,000 Centennial Cellular Corp. CL A* 3,653,156 4,127,500
33,500 CommNet Cellular, Inc.* 907,488 1,164,125
116,000 Corecomm, Inc.* 2,892,745 2,001,000
40,000 Telephone and Data Systems, Inc. 1,455,575 1,520,000
------------ ------------
16,101,335 15,134,888
------------ ------------
OTHER -- 0.1%
8,300 ONI International, Inc.* 70,100 2,075
------------ ------------
Total Common Stocks 67,706,236 100,568,588
------------ ------------
</TABLE>
See accompanying notes to financial statements.
9
<PAGE>
WEITZ PARTNERS, INC. -- PARTNERS VALUE FUND
SCHEDULE OF INVESTMENTS IN SECURITIES, CONTINUED
<TABLE>
<CAPTION>
FACE
AMOUNT COST VALUE
---------- ------------ ------------
<C> <S> <C> <C>
U.S. GOVERNMENT AND AGENCY SECURITIES -- 4.9%
$2,000,000 Federal Natl. Mtg. Assn. 6.625% 7/12/00 $ 2,000,000 $ 2,005,000
1,000,000 Federal Natl. Mtg. Assn. 7.54% 6/04/04 1,006,189 1,001,562
2,500,000 Federal Home Loan Bank 6.44% 11/28/05 2,503,310 2,458,594
------------ ------------
Total U.S. Government and Agency Securities 5,509,499 5,465,156
------------ ------------
SHORT-TERM SECURITIES -- 4.2%
1,675,697 Norwest U.S. Government Money Market Fund 1,675,697 1,675,697
1,950,000 U.S. Treasury Bill 8/21/97 1,935,430 1,935,720
1,000,000 Federal Home Loan Bank Discount Note 9/10/97 989,251 988,800
------------ ------------
4,600,378 4,600,217
------------ ------------
Total Investments in Securities $ 77,816,113 110,633,961
------------ ------------
------------
Other Assets Less Liabilities -- 0.4% 468,576
------------
Total Net Assets -- 100% $111,102,537
------------
------------
Net Asset Value Per Share $ 12.807
------------
------------
</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.
See accompanying notes to financial statements.
10
<PAGE>
WEITZ PARTNERS, INC. -- PARTNERS VALUE FUND
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1997
(UNAUDITED)
<TABLE>
<S> <C>
Assets:
Investment in securities at value (cost $77,816,113) $110,633,961
Accrued interest and dividends receivable 214,126
Receivable for securities sold 453,057
Other assets 10,495
Prepaid expenses 2,263
------------
Total assets 111,313,902
------------
Liabilities:
Due to adviser 101,365
Payable for securities purchased 110,000
------------
Total liabilities 211,365
------------
Net assets applicable to outstanding capital stock $111,102,537
------------
------------
Net assets represented by:
Capital stock outstanding, at par (note 4) 87
Additional paid-in capital 72,128,850
Accumulated undistributed net investment income 451,188
Accumulated undistributed net realized gains 5,704,564
Net unrealized appreciation of investments (note 5) 32,817,848
------------
Total representing net assets applicable
to shares outstanding $111,102,537
------------
------------
Net asset value per share of outstanding capital stock
(8,675,311 shares outstanding) $ 12.807
------------
------------
</TABLE>
See accompanying notes to financial statements.
11
<PAGE>
WEITZ PARTNERS, INC. -- PARTNERS VALUE FUND
STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1997
(UNAUDITED)
<TABLE>
<S> <C>
Investment income:
Dividends $ 724,234
Interest 346,737
-----------
Total investment income 1,070,971
-----------
Expenses (note 3):
Investment advisory fee 505,657
Administrative fee 58,896
Directors fees 3,400
Other expenses 51,830
-----------
Total expenses 619,783
-----------
Net investment income 451,188
-----------
Realized and unrealized gain on investments:
Realized gain on investments 5,826,328
Net unrealized appreciation of investments 9,563,496
-----------
Net realized and unrealized gain on investments 15,389,824
-----------
Net increase in net assets resulting from operations $15,841,012
-----------
-----------
</TABLE>
See accompanying notes to financial statements.
12
<PAGE>
WEITZ PARTNERS, INC. -- PARTNERS VALUE FUND
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 1997 YEAR ENDED
(UNAUDITED) DEC. 31, 1996
----------------- -------------
<S> <C> <C>
Increase in net assets:
From operations:
Net investment income $ 451,188 $ 439,636
Net realized gain 5,826,328 8,613,668
Unrealized appreciation 9,563,496 6,036,893
----------------- -------------
Net increase in net assets resulting from operations 15,841,012 15,090,197
----------------- -------------
Distributions to shareholders from:
Net investment income -- (476,435)
Net realized gains (4,460,935) (6,116,607)
----------------- -------------
Total distributions (4,460,935) (6,593,042)
----------------- -------------
Capital share transactions (note 4):
Proceeds from sales 5,027,415 13,203,924
Payments for redemptions (3,719,845) (5,655,658)
Reinvestment of distributions 3,568,479 5,020,102
----------------- -------------
Total increase from capital share transactions 4,876,049 12,568,368
----------------- -------------
Total increase in net assets 16,256,126 21,065,523
----------------- -------------
Net assets:
Beginning of period 94,846,411 73,780,888
----------------- -------------
End of period $ 111,102,537 $ 94,846,411
----------------- -------------
----------------- -------------
</TABLE>
See accompanying notes to financial statements.
13
<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>
SIX MONTHS
ENDED
JUNE 30, YEAR ENDED DECEMBER 31,
1997 -------------------------
(UNAUDITED) 1996 1995 1994*
------------ ------- ------- -------
<S> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD: $ 11.524 $10.384 $ 8.275 $10.000
------------ ------- ------- -------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income 0.052 0.057 0.084 0.057
Net gains or losses on securities (realized and unrealized) 1.762 1.933 3.108 (0.964)
------------ ------- ------- -------
Total from investment operations 1.814 1.990 3.192 (0.907)
------------ ------- ------- -------
LESS DISTRIBUTIONS:
Dividends from net investment income -- (0.061) (0.237) --
Distributions from realized gains (0.531) (0.789) (0.846) (0.818)
------------ ------- ------- -------
Total distributions (0.531) (0.850) (1.083) (0.818)
------------ ------- ------- -------
NET ASSET VALUE, END OF PERIOD $ 12.807 $11.524 $10.384 $ 8.275
------------ ------- ------- -------
------------ ------- ------- -------
TOTAL RETURN 16.5%++ 19.2% 38.7% -9.0%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period ($000) 111,103 94,846 73,781 51,287
Ratio of expenses to average net assets 1.23%** 1.23% 1.27% 1.29%
Ratio of net investment income to average net assets 0.89%** 0.51% 0.82% 0.67%
Portfolio turnover rate 18% 37% 51% 33%
Average commission rate paid (per share)+ $ 0.0504 $0.0495
</TABLE>
+ Required by regulations issued in 1995.
++ Not annualized
* Fund commenced public offering of shares on January 1, 1994.
** Annualized
See accompanying notes to financial statements.
14
<PAGE>
WEITZ PARTNERS, INC. -- PARTNERS VALUE FUND
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1997
(UNAUDITED)
(1) ORGANIZATION AND BUSINESS CHANGES
Weitz Partners, Inc. (the "Company"), is registered under the Investment
Company Act of 1940 as an open-end 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 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 Fund 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. The following accounting policies are in
accordance with accounting policies generally accepted in the investment
company industry.
(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 and
over-the-counter securities traded on the NASDAQ national market
are valued at the last quoted sales price; if there were no sales
on that day, securities are valued at the mean between the latest
available and representative bid and asked 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.
15
<PAGE>
- The value of securities for which market quotations are not readily
available, including restricted and not readily marketable
securities, is determined in good faith under the supervision of
the Fund's Board of Directors.
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, 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. Although no
call options were written in the six months ended June 30, 1997, such
options are authorized.
The risk in writing a call option is that the Portfolio gives up the
opportunity of profit if the market price of the security increases. The
Portfolio also has the additional risk of not being able to enter into a
closing transaction if a liquid secondary market does not exist.
(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 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 Fund.
(C)SECURITY TRANSACTIONS
Security transactions are accounted for on the date the securities are
purchased or sold (trade date). Income dividends 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.
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(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.
(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 a 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 annual daily net asset value.
The expenses incurred by the Fund did not exceed the percentage limitation
during the six months ended June 30, 1997.
Under the terms of an administration agreement, certain services are being
provided including the transfer of shares, disbursement of dividends, fund
accounting and related administrative services of the Company for which the
Adviser is being paid a monthly fee. During the six months ended June 30,
1997, the fee was calculated at an average 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.
(4) CAPITAL STOCK
The Company is authorized to issue a total of 1,000,000,000 shares of common
stock 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 Partners Value Fund. At June 30, 1997, 8,675,311 shares are
outstanding. 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.
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<PAGE>
Transactions in the capital stock of the Fund are summarized as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 1997 DECEMBER 31,
(UNAUDITED) 1996
----------------- -------------
<S> <C> <C>
Transactions in shares:
Shares issued....................................................... 432,061 1,195,364
Shares redeemed..................................................... (314,277) (504,774)
Reinvested dividends................................................ 326,905 435,093
-------- -------------
Net increase...................................................... 444,689 1,125,683
-------- -------------
-------- -------------
</TABLE>
(5) SECURITIES TRANSACTIONS
Purchases and proceeds from maturities or sales of investment securities of
the Fund, other than short-term securities, aggregated $17,537,115 and
$18,538,646, respectively. The cost of investments for Federal income tax
purposes is $77,937,880. At June 30, 1997, the aggregate gross unrealized
appreciation and depreciation, based on cost for Federal income tax
purposes, were $36,170,114 and $3,474,034 respectively.
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<PAGE>
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WEITZ PARTNERS, INC.
BOARD OF DIRECTORS
Lorraine Chang
John W. Hancock
Richard D. Holland
Thomas R. Pansing, Jr.
Delmer L. Toebben
Wallace R. Weitz
OFFICERS
Wallace R. Weitz, President
Mary K. Beerling, Vice-President & Secretary
Linda L. Lawson, Vice-President
Richard F. Lawson, Vice-President
INVESTMENT ADVISER
Wallace R. Weitz & Company
DISTRIBUTOR
Weitz Securities, Inc.
CUSTODIAN
Norwest Bank 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.
