<PAGE>
- --------------------------------------------------------------------------------
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.
PARTNERS VALUE FUND
Q U A R T E R L Y
R E P O R T
SEPTEMBER 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 September
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 (9 Mos.) 29.9 29.6
Cumulative 840.7 826.6
Average Annual Compound Growth
(Since inception June 1, 1983) 16.9 16.8
</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 September 30, 1997, was 38.7%, 21.3% and 15.4%, 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 the Weitz
Funds at the address listed on the front cover.
2
<PAGE>
WEITZ PARTNERS, INC. -- PARTNERS VALUE FUND
SEPTEMBER 30, 1997 - QUARTERLY REPORT
October 5, 1997
Dear Fellow Shareholder:
The 3rd quarter was another good one for Partners Value. Our total return
(income plus appreciation, after deducting expenses) was +11.4%. This brings our
gain for the first 9 months of 1997 to +29.9%. This compares to S&P 500 index
returns of +7.5% for the quarter and +29.6% for the first 9 months of 1997.
For a longer term perspective on performance, the table on page 2 shows
annual total returns (after expenses) since inception in 1983.
PORTFOLIO REVIEW
Our portfolio does not change much from quarter to quarter, so the reasons
for the good 3rd quarter results will sound familiar:
(1) Cable television and cellular telephone companies account for approximately
a third of our portfolio and both have been enjoying a period of rediscovery by
Wall Street this year. The companies' business characteristics, asset values,
and growth prospects have been good for years, but investor perceptions have
improved dramatically this year and several of the stocks are up 50-75% from
their lows.
(2) Banks and other financial service stocks have been strong for several years
and they continued to contribute to our performance. In fact, several of these
companies have become very popular, and I have sold the ones that seemed most
expensive.
(3) Three of our companies, Salomon Brothers, Protection One and Katz Media,
received takeover bids at premium prices. Losing a promising investment to an
acquirer is a mixed blessing, but it usually offers the consolation of a
short-term windfall.
(4) Two of our companies are using corporate restructurings to draw attention
to undervalued assets. Telecommunications, Inc. has divided its businesses among
five separately traded public entities, and the result has been a significantly
higher aggregate stock value. Seafield Capital is a holding company which we
bought at an average price of about $35 per
3
<PAGE>
share because it proposed to distribute securities with a value of about $50. We
are in the final stages of the restructuring, and it appears that the value of
the distributions will be closer to $75 per original Seafield share.
THE OUTLOOK FOR OUR PORTFOLIO -- PRICE VS. VALUE
Value investing is about buying stocks for less than they are worth and
selling them for full value, or with luck, for more than they are worth. Stock
prices in general have risen sharply in recent years, and bargains are fewer and
farther between. Certain categories of stocks seem to be particularly expensive,
and there is a pervasive optimistic complacency among "investors" that makes me,
and many clients, uneasy. In the context of this relatively expensive market, it
is reasonable to ask, "Should I get out of the market altogether?" and "What is
realistic to hope for from this portfolio?"
Selling stocks when they are "high" and buying them back in when they are
"low" is a great idea, except that, in my opinion, it cannot be done
consistently and profitably. Getting the timing right is very difficult. There
were very logical reasons to sell when the Dow reached 5000 -- or 6000 -- or
7000. Yet here we are at Dow 8000. Stock prices respond to cash flows into and
out of the stock market that are absolutely unpredictable. Even if we could get
the timing right, transaction costs, limited liquidity of many stocks, and (for
some) tax considerations make market timing impractical.
So, in spite of the fact that investment conditions are less than ideal,
the reasons I feel very comfortable having over 80% of my liquid net worth
invested in my firm's stock funds are:
(1) Stocks are not all alike, and while some are over-valued, others are
under-valued. I believe that if we could own 100% of each of our companies at
today's stock prices, we would have terrific investments over the next 5, 10, or
15 years;
(2) Some of our stocks have "defensive" characteristics, such as very high
dividends, which may insulate them from general market trauma. For example,
Redwood Trust is a mortgage real estate investment trust which owns a portfolio
of high quality mortgages and passes through its earnings in the form of a
dividend. Redwood sells at about $30, should pay a dividend of $2.70-3.00 in
1998 (9-10% yield), and the dividend is likely to grow at 10-20% per year. These
stocks have the potential to earn very solid returns regardless of what the Dow
or S&P do;
4
<PAGE>
(3) Although our portfolio is allowed to be fully invested in stocks, we
currently own U.S. Treasury securities and other bonds and preferred stocks
equal to 10.8% of our fund's assets. Also, about 5% of our fund is invested in
stocks (NHP and CommNet) which are in the final stages of being acquired.
Assuming the transactions close, these holdings represent "cash equivalents."
These "reserves" have not helped our performance in this period of double-digit
returns, but they provide a hedge against a severe correction and they represent
buying power for future opportunities.
Stock investing is more art than science, and the timing of returns is
unpredictable. It has been a long time since the general market declined by a
significant amount, and a 20-30% "correction" would be perfectly normal.
However, I feel very good about our companies, and I am optimistic about the
long-term performance of our portfolio.
FAREWELL TO ERIC -- WELCOME TO MARY JEWELL
Eric Ball joined us last year to help clients with their investment
questions and financial planning. We and our clients enjoyed working with him.
But Eric's first love is portfolio management, and this summer he received the
offer he could not refuse. So, he has left us to help manage a private hedge
fund, and we wish him the very best.
In looking for a replacement for Eric, we asked lawyers, accountants,
bankers, and clients for the names of the investment professionals they admired,
trusted, and liked to work with. We talked to several people, none of whom were
looking for a new job, and have hired Mary Jewell. Mary is a graduate of
Creighton Law School, and comes to us after 12 years in the trust department of
a major bank. She is available to talk to retirement plan participants or
individual shareholders about personal financial planning, asset allocation, or
any other questions you may have. Her job is to make your financial life easier,
so please feel free to call her and introduce yourself. I think you will enjoy
working with her.
Best regards,
/s/ WALLACE R. WEITZ
Wallace R. Weitz
President
5
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WEITZ PARTNERS, INC. -- PARTNERS VALUE FUND
SCHEDULE OF INVESTMENTS IN SECURITIES
SEPTEMBER 30, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES
OR UNITS COST VALUE
---------- ------------ ------------
<C> <S> <C> <C>
COMMON STOCKS -- 89.8%
BANKING -- 3.7%
36,000 R&G Financial Corp. CL B $ 422,500 $ 794,250
14,000 Wells Fargo & Co. 2,243,662 3,850,000
------------ ------------
2,666,162 4,644,250
------------ ------------
CABLE TELEVISION -- 17.9%
88,000 Adelphia Communications Corp. CL A* 741,762 1,067,000
445,000 Century Communications Corp. CL A* 2,575,511 3,393,125
275,000 Comcast Corp. Special CL A 3,889,525 7,081,250
20,000 Comcast UK Cable Partners Limited CL A* 250,714 205,000
217,581 Tele-Communications, Inc. CL A* 2,934,905 4,460,411
268,000 U.S. West Media Group* 4,886,218 5,979,750
------------ ------------
15,278,635 22,186,536
------------ ------------
CONSUMER PRODUCTS AND SERVICES -- 4.2%
50,000 American Classic Voyages Co.* 489,375 875,000
6,650 Lady Baltimore Foods, Inc. 212,725 330,837
110,000 Protection One, Inc.* 936,773 2,014,375
80,000 Seafield Capital Corp. 2,315,440 2,000,000
------------ ------------
3,954,313 5,220,212
------------ ------------
FEDERAL AGENCIES -- 5.5%
60,000 Federal Home Loan Mortgage Corp. 170,785 2,115,000
50,000 Federal National Mortgage Association 951,913 2,350,000
15,000 Student Loan Marketing Association 519,965 2,317,500
------------ ------------
1,642,663 6,782,500
------------ ------------
FINANCIAL SERVICES -- 7.5%
8,000 American Capital Strategies, Ltd.* 120,000 160,000
45,000 American Express, Co. 1,347,134 3,684,375
70 Berkshire Hathaway, Inc.* 91,818 3,136,000
40,000 Capital One Financial Corp. 926,068 1,827,500
10,000 Imperial Credit Industries, Inc.* 137,500 265,000
20,000 PS Group, Inc.* 151,200 271,250
------------ ------------
2,773,720 9,344,125
------------ ------------
INFORMATION AND DATA PROCESSING -- 2.3%
48,000 BRC Holdings, Inc.* 626,796 1,836,000
175,000 Intelligent Systems Corp.* 164,183 1,028,125
------------ ------------
790,979 2,864,125
------------ ------------
</TABLE>
6
<PAGE>
WEITZ PARTNERS, INC. -- PARTNERS VALUE FUND
SCHEDULE OF INVESTMENTS IN SECURITIES, CONTINUED
<TABLE>
<CAPTION>
SHARES
OR UNITS COST VALUE
---------- ------------ ------------
<C> <S> <C> <C>
MEDIA AND ENTERTAINMENT -- 14.2%
3,000 Chris-Craft Industries, Inc.* $ 122,481 $ 158,062
23,000 Daily Journal Corp.* 231,501 1,052,250
45,000 TCI Satellite Entertainment CL A* 518,911 340,312
255,000 Tele-Communications Liberty Media CL A* 4,208,193 7,634,063
124,419 Tele-Communications TCI-Ventures Grp A* 1,678,265 2,566,142
20,000 Time Warner, Inc. 411,635 1,083,750
125,000 Valassis Communications, Inc.* 1,785,240 3,984,375
10,000 Walt Disney Co. 549,374 806,875
------------ ------------
9,505,600 17,625,829
------------ ------------
MORTGAGE BANKING -- 5.1%
100,000 Countrywide Credit Industries, Inc. 1,546,954 3,643,750
50,000 Long Beach Financial Corp.* 325,000 678,125
10,000 New Century Financial Corp.* 110,000 170,625
144,450 Resource Bancshares Mtg. Grp., Inc. 1,550,365 1,886,878
------------ ------------
3,532,319 6,379,378
------------ ------------
REAL ESTATE AND CONSTRUCTION -- 7.3%
45,000 Catellus Development Corp.* 257,950 933,750
30,000 Forest City Enterprises, Inc. CL A 671,825 1,725,000
170,000 NHP, Inc.* 2,482,685 4,802,500
80,000 Presley Companies CL A* 115,000 70,000
29,000 SLH Corp.* 185,117 1,529,750
------------ ------------
3,712,577 9,061,000
------------ ------------
REAL ESTATE INVESTMENT TRUSTS -- 7.6%
50,000 Hanover Capital Mortgage*** 750,000 856,250
65,000 NovaStar Financial, Inc.** 975,000 975,000
249,006 Redwood Trust, Inc. 5,650,570 7,563,557
------------ ------------
7,375,570 9,394,807
------------ ------------
TELECOMMUNICATIONS -- 14.4%
250,000 360 Communications Co.* 5,108,520 5,218,750
80,000 Airtouch Communications, Inc.* 2,232,273 2,835,000
260,000 Centennial Cellular Corp. CL A* 3,653,156 4,452,500
33,500 CommNet Cellular, Inc.* 907,488 1,174,594
140,000 Corecomm, Inc.* 3,245,245 2,310,000
40,000 Telephone and Data Systems, Inc. 1,455,575 1,797,500
------------ ------------
16,602,257 17,788,344
------------ ------------
OTHER -- 0.1%
8,300 ONI International, Inc.* 70,100 2,075
------------ ------------
Total Common Stocks 67,904,895 111,293,181
------------ ------------
</TABLE>
7
<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 -- 4.5%
$2,000,000 Federal Natl. Mtg. Assn. 6.625% 7/12/00 $ 2,000,000 $ 2,031,875
1,000,000 Federal Natl Mtg. Assn. 7.54% 6/04/04 1,004,522 1,006,875
2,500,000 Federal Home Loan Bank 6.44% 11/28/05 2,503,210 2,523,047
------------ ------------
Total U.S. Government and Agency Securities 5,507,732 5,561,797
------------ ------------
SHORT-TERM SECURITIES -- 6.3%
5,903,857 Norwest U.S. Government Money Market Fund 5,903,857 5,903,857
2,000,000 U.S. Treasury Bill 1/08/98 1,971,840 1,972,167
------------ ------------
7,875,697 7,876,024
------------ ------------
Total Investments in Securities $ 81,288,324 124,731,002
------------ ------------
------------
Securities Sold Short -- (3.1%) (3,844,263)
Other Assets Less Liabilities -- 2.5% 3,085,526
------------
Total Net Assets -- 100% $123,972,265
------------
------------
Net Asset Value Per Share $ 14.273
------------
------------
<CAPTION>
SHARES
OR UNITS PROCEEDS VALUE
---------- ------------ ------------
<C> <S> <C> <C>
SECURITIES SOLD SHORT
106,600 Apartment Investment & Management Co.+ $ 3,359,874 $ 3,844,263
------------ ------------
------------ ------------
</TABLE>
+A company named Aimco is scheduled to acquire NHP, Inc. ("NHP") in the 4th
quarter of 1997. As part of the acquisition, NHP shareholders are expected to
receive approximately .75 share of Apartment Investment & Management Co. ("AIV")
for each share of NHP. AIV has been sold short in anticipation of receipt of AIV
shares in exchange for NHP shares currently owned by Partners Value Fund.
*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.
***One unit consists of one share of common stock and one stock purchase
warrant.
8
