<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
MARCH 31, 1998
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,
1998, 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 40.6 33.4
1998 (3 mos.) 16.6 13.9
Cumulative 1,087.7 986.0
Average Annual Compound Growth
(Since inception June 1, 1983) 18.1 17.4
</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, 1998, was 61.1%, 23.2% and 18.5%, respectively. These returns
assume redemption at the end of each period.
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
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WEITZ PARTNERS, INC. -- PARTNERS VALUE FUND
MARCH 31, 1998 - QUARTERLY REPORT
April 4, 1998
Dear Fellow Shareholder:
The first quarter of 1998 was a great one for the Partners Value
Portfolio. Total return (income plus appreciation) was +16.6%. This compares to
+13.9% for the S&P 500. Over the past 12 months, total return was +61.1% vs.
+48.0% for the S&P. The table on page 2 shows returns for each year since
inception, and the table below summarizes returns over various intervals. (All
returns shown are AFTER deducting all fees and expenses.)
<TABLE>
<CAPTION>
ONE YEAR FIVE YEARS TEN YEARS
------------- ------------- -------------
<S> <C> <C> <C>
Partners Value Portfolio 61.1% 23.2% 18.5%
S&P 500 48.0 22.4 18.9
Average Growth & Income Fund 40.2 19.2 16.4
</TABLE>
At the end of March, our cash and other "reserves" accounted for 24% of
portfolio assets. These reserves are a product of sales of stocks which have
reached (or exceeded) our assessment of their business value. I do not consider
the accumulation of reserves a "market timing" call, but for better or worse, we
are less exposed to stocks now than we have been since the summer of 1987.
One by-product of these good results is that all three of our stock funds
have been showing up in "top fund performers" tables and in various articles. It
is nice to be recognized for good performance, but the attention has attracted a
lot of interest from mutual fund investors. This has created the logistical
challenge of fielding many extra calls each day, answering questions about the
funds, and mailing the appropriate information at a seasonally busy time of year
and is straining our systems a bit. This has meant adding temporary staff,
after-hours mailroom work for all of us, and a regrettable increase in the use
of the "hold" button by our receptionist. However, we continue to have higher
minimums than most mutual funds, are discouraging "hot money" investors and are
working on our systems to make sure that we will be able to maintain the quality
of our client service effort. In the meantime, we appreciate your patience with
the occasional inconvenience of dealing with an overly-busy staff member.
3
<PAGE>
INVESTMENT OUTLOOK
I am running out of ways to say that (a) stock prices in general seem
high, so (b) bargains are scarce, but (c) I like our companies' prospects and am
optimistic about the long-term outlook for our portfolio, so I thought the least
I could do was be succinct.
Going forward, we still hold large positions in cable television and other
media and entertainment companies (25%). Over the past few years, the virtues of
the cable business have been discovered by Wall Street, and fears of leveraged
balance sheets, satellite competition, etc. have faded. The stocks have been so
strong that even though our other holdings have also risen, our cable and media
stock positions grew to over 30% of the portfolio. I have sold roughly one-third
of our holdings because the stocks are not as cheap as they used to be, and 30%
seemed too high on general principles. However, the companies are doing very
well, managements have become more responsive to shareholders, and the stocks
are still very reasonably valued.
We have added to our cellular telephone positions, and the stocks have
performed well. 360 Communications, our second largest portfolio holding, has
agreed to merge with AllTel, and if the merger occurs, we will lose one of our
favorite stocks. Takeovers give a short-term boost to portfolio performance, but
they are a mixed blessing if we lose a company that we think has more promise
than its replacement candidates.
In the financial services arena, mortgage REIT's (real estate investment
trusts) continue to look very attractive. As I have discussed in previous
letters, the ownership of mortgages has evolved significantly over the past
10-15 years. Just as Fannie Mae and Freddie Mac, two government sponsored
agencies, have proven to be more efficient investors in "conforming" mortgages,
mortgage REIT's have significant advantages over banks and savings and loan
companies as owners of other types of mortgages. All mortgage REIT's are NOT
created equal, however, and strong management and a sensible business model are
critical. We believe that Redwood Trust, Novastar Financial, and Hanover Capital
have all the ingredients to be good investments for us over the years.
Other financial stocks, especially the large, well-known companies such as
Fannie Mae, American Express, Capital One, and Countrywide Credit, have been
very strong. They are great companies, but we are not adding to our positions,
and in some cases have sold some of our shares. Some of the smaller companies
are probably candidates for takeovers as the financial landscape continues to
consolidate. We do not make investments that DEPEND on takeovers, but in some
cases we would be happy to sell to an aggressive acquirer.
We continue to look for new ideas in new industries. We attend investment
conferences, visit companies, read trade journals, TALK to investors whose
judgment we respect, and generally turn over
4
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all the rocks we can. There are lots of good businesses we would like to own,
but for the time being, other investors seem willing to outbid us for their
shares. We will be patient and we hope you will be, too.
SHAREHOLDER INFORMATION MEETING
Please join us on WEDNESDAY, MAY 27, 1998 AT THE OMAHA MARRIOTT for this
annual chance to meet our staff and your fellow shareholders and to ask any
questions you may have of your portfolio managers. There is no formal business
to conduct, so the doors will open at 4:00 p.m. and the investment discussion
will begin at 4:30 p.m. The meeting will conclude at 5:45 p.m. We have a large
number of new shareholders this year, SO PLEASE CALL THE RECEPTIONIST TO LET US
KNOW IF YOU PLAN TO ATTEND. I look forward to seeing you then.
Best regards,
/s/ WALLACE R. WEITZ
Wallace R. Weitz
President, Portfolio
Manager
5
<PAGE>
WEITZ PARTNERS, INC. -- PARTNERS VALUE FUND
SCHEDULE OF INVESTMENTS IN SECURITIES
MARCH 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
SHARES
OR UNITS COST VALUE
---------- ------------ ------------
<C> <S> <C> <C>
COMMON STOCKS -- 76.0%
BANKING -- 2.0%
10,000 Wells Fargo & Co. $ 1,754,758 $ 3,312,500
------------ ------------
CABLE TELEVISION -- 15.5%
64,000 Adelphia Communications Corp. CL A* 485,513 1,896,000
455,000 Century Communications Corp. CL A* 2,656,136 5,829,688
140,000 Comcast Corp. Special CL A 1,717,504 4,943,750
170,000 Tele-Communications, Inc. CL A* 2,093,622 5,285,946
210,000 U.S. West Media Group* 3,820,643 7,297,500
------------ ------------
10,773,418 25,252,884
------------ ------------
CONSUMER PRODUCTS AND SERVICES -- 3.1%
44,000 American Classic Voyages Co.* 429,375 1,012,000
100,000 Lab Holdings, Inc. 2,658,185 2,350,000
6,650 Lady Baltimore Foods, Inc. 212,725 350,787
100,000 Protection One, Inc. 171,893 1,337,500
------------ ------------
3,472,178 5,050,287
------------ ------------
FEDERAL AGENCIES -- 4.6%
50,000 Federal Home Loan Mortgage Corp. 138,785 2,371,875
40,000 Federal National Mortgage Association 759,888 2,530,000
57,500 SLM Holding Corp. 725,265 2,508,437
------------ ------------
1,623,938 7,410,312
------------ ------------
FINANCIAL SERVICES -- 7.4%
45,000 American Express, Co. 1,347,134 4,137,188
70 Berkshire Hathaway, Inc. CL A* 91,818 4,704,000
25,000 Capital One Financial Corp. 557,252 1,971,875
24,000 Imperial Credit Industries, Inc.* 400,500 568,500
20,000 PS Group, Inc. 181,200 258,750
15,000 United Asset Management Corp. 415,317 409,687
------------ ------------
2,993,221 12,050,000
------------ ------------
INFORMATION AND DATA PROCESSING -- 1.6%
48,000 BRC Holdings, Inc.* 626,796 1,884,000
175,000 Intelligent Systems Corp.* 164,183 700,000
------------ ------------
790,979 2,584,000
------------ ------------
</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 -- 9.2%
23,000 Daily Journal Corp.* $ 231,501 $ 908,500
190,000 Tele-Communications Liberty Media CL A* 2,093,600 6,531,250
160,000 Tele-Communications TCI-Ventures Grp A* 952,952 2,810,000
115,000 Valassis Communications, Inc.* 1,619,640 4,715,000
------------ ------------
4,897,693 14,964,750
------------ ------------
MORTGAGE BANKING -- 6.6%
83,700 Countrywide Credit Industries, Inc. 1,276,319 4,446,562
8,000 Franchise Mortgage Acceptance Co.* 141,025 201,000
52,000 New Century Financial Corp.* 500,750 513,500
254,922 Resource Bancshares Mtg. Grp., Inc. 3,074,277 4,046,887
56,666 WMF Group, Limited* 518,494 1,544,149
------------ ------------
5,510,865 10,752,098
------------ ------------
REAL ESTATE AND CONSTRUCTION -- 1.9%
45,000 Catellus Development Corp.* 257,950 832,500
30,000 Forest City Enterprises, Inc. CL A 671,825 1,693,125
20,000 SLH Corp.* 63,833 640,000
------------ ------------
993,608 3,165,625
------------ ------------
REAL ESTATE INVESTMENT TRUSTS -- 8.5%
60,000 Hanover Capital Mortgage Holdings, Inc. 909,631 975,000
145,000 NovaStar Financial, Inc. 2,334,400 2,863,750
423,952 Redwood Trust, Inc. 9,690,050 9,962,872
------------ ------------
12,934,081 13,801,622
------------ ------------
TELECOMMUNICATIONS -- 15.6%
310,000 360 Communications Co.* 6,292,204 9,687,500
30,000 Airtouch Communications, Inc.* 797,085 1,468,125
271,000 Centennial Cellular Corp. CL A* 3,854,686 7,122,232
7,339 CommNet Cellular, Inc.* 198,817 334,842
211,400 Corecomm, Inc.* 4,205,239 3,521,142
40,000 Telephone and Data Systems, Inc. 1,455,575 1,900,000
77,000 Vanguard Cellular Systems, Inc. CL A* 961,063 1,400,438
------------ ------------
17,764,669 25,434,279
------------ ------------
OTHER -- 0.0%
8,300 ONI International, Inc.* 62,630 83
------------ ------------
Total Common Stocks 63,572,038 123,778,440
------------ ------------
WARRANTS -- 0.4%
60,000 Hanover Capital Mtg. Holdings, Inc., Expiring 9/15/00 20,450 187,500
65,000 NovaStar Financial, Inc., Expiring 10/30/00 95,550 438,750
------------ ------------
116,000 626,250
------------ ------------
</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 -- 7.2%
$3,000,000 U.S. Treasury Note 5.50% 3/31/00 $ 2,994,851 $ 2,995,781
2,000,000 Federal Natl. Mtg. Assn. 6.625% 7/12/00 2,000,000 2,036,875
1,000,000 Federal Natl. Mtg. Assn. 7.54% 6/04/04 1,001,144 1,002,969
2,500,000 Federal Home Loan Bank 6.44% 11/28/05 2,503,014 2,580,078
3,000,000 Federal Natl. Mtg. Assn. 6.56% 11/26/07 3,000,000 3,035,148
------------ ------------
Total U.S. Government and Agency Securities 11,499,009 11,650,851
------------ ------------
SHORT-TERM SECURITIES -- 16.4%
4,786,372 Norwest U.S. Government Money Market Fund 4,786,372 4,786,372
2,000,000 Federal Home Loan Bank Discount Note 4/08/98 1,997,927 1,997,533
3,000,000 Federal Home Loan Bank Discount Note 5/06/98 2,984,454 2,983,410
4,000,000 U.S. Treasury Bill 5/07/98 3,980,040 3,979,362
2,000,000 U.S. Treasury Bill 5/14/98 1,987,960 1,987,729
3,000,000 Federal Home Loan Bank Discount Note 6/10/98 2,968,617 2,967,458
3,000,000 Federal Home Loan Bank Discount Note 6/12/98 2,967,600 2,967,941
5,000,000 Federal Home Loan Mtg. Corp. Discount Note 6/12/98 4,946,000 4,944,236
------------ ------------
26,618,970 26,614,041
------------ ------------
Total Investments in Securities $101,806,017 $162,669,582
------------ ------------
------------
Covered Call Options Written at Market Value -- (0.1%) (209,125)
Other Assets Less Liabilities -- 0.1% 206,081
------------
Total Net Assets -- 100% $162,666,538
------------
------------
Net Asset Value Per Share $ 16.471
------------
------------
</TABLE>
*Non-income producing
8
