<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 Minnesota, N.A.
TRANSFER AGENT AND DIVIDEND PAYING AGENT
Wallace R. Weitz & Company
SUB-TRANSFER AGENT
National Financial Data Services, Inc.
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.
01/24/2000
512123
PARTNERS VALUE FUND
ANNUAL
REPORT
DECEMBER 31, 1999
ONE PACIFIC PLACE, SUITE 600
1125 SOUTH 103 STREET
OMAHA, NEBRASKA 68124-6008
402-391-1980
800-232-4161
402-391-2125 FAX
www.weitzfunds.com
<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,
policies, guidelines and restrictions are materially equivalent 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, 1999, calculated in accordance with SEC standardized
formulas.
<TABLE>
<CAPTION>
PERIOD ENDED PARTNERS II S&P 500
- ------------ ----------- -------
<S> <C> <C>
12/31/83 9.9% 4.2%+
12/31/84 14.5 6.3
12/31/85 40.7 31.7
12/31/86 11.1 18.7
12/31/87 4.3 5.3
12/31/88 14.9 16.5
12/31/89 20.3 31.6
12/31/90 -6.3 -3.1
12/31/91 28.1 30.2
12/31/92 15.1 7.6
12/31/93 23.0 10.1
<CAPTION>
PERIOD ENDED PARTNERS VALUE S&P 500
- ------------ -------------- -------
<S> <C> <C>
12/31/94 -9.0% 1.3%
12/31/95 38.7 37.5
12/31/96 19.2 22.9
12/31/97 40.6 33.4
12/31/98 29.1 28.6
12/31/99 22.1 21.0
Cumulative 1,504.5 1,383.3
Average
Annual
Compound Growth
(Since
inception
June 1,
1983) 18.2 17.6
</TABLE>
+Return is for the period 6/1/83 through 12/31/83
AVERAGE ANNUAL TOTAL RETURNS
<TABLE>
<CAPTION>
SINCE INCEPTION
1-YEAR 5-YEARS 10-YEARS (JUNE 1, 1983)
-------- -------- -------- ---------------
<S> <C> <C> <C> <C>
PARTNERS VALUE (AND PREDECESSOR PARTNERSHIP) 22.1% 29.6% 18.9% 18.2%
Standard & Poor's 500 Index 21.0% 28.5% 18.2% 17.6%
</TABLE>
2
<PAGE>
The chart below shows the change in the value of a $100,000 investment in the
Predecessor Partnership and the Fund for the period since inception (June,
1983), through December 31, 1999, as compared with the growth of the Standard &
Poor's 500 Index during the same period. The Standard & Poor's 500 Index is an
unmanaged index consisting of 500 companies. The information assumes
reinvestment of dividends and capital gains distributions. As indicated,
$100,000 originally invested in the Predecessor Partnership on June 1, 1983,
would have been valued at $1,604,494 on December 31, 1999.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
<S> <C> <C>
PARTNERS VALUE FUND AND S&P 500
PREDECESSOR PARTNERSHIP
06/01/83 $100,000 $100,000
06/30/83 $100,190 $103,891
07/31/83 $99,719 $100,824
08/31/83 $101,614 $102,330
09/30/83 $107,426 $103,742
10/31/83 $108,876 $102,541
11/30/83 $111,718 $104,703
12/31/83 $109,900 $104,154
01/31/84 $114,703 $103,572
02/29/84 $109,759 $99,926
03/31/84 $111,680 $101,655
04/30/84 $112,238 $102,618
05/31/84 $109,690 $96,942
06/30/84 $111,566 $99,052
07/31/84 $110,238 $97,822
08/31/84 $120,104 $108,281
09/30/84 $122,650 $108,553
10/31/84 $123,840 $109,068
11/30/84 $125,054 $107,845
12/31/84 $125,835 $110,685
01/31/85 $131,649 $119,307
02/28/85 $138,192 $120,760
03/31/85 $146,290 $120,838
04/30/85 $145,910 $120,729
05/31/85 $151,980 $127,703
06/30/85 $155,065 $129,702
07/31/85 $157,267 $129,511
08/31/85 $157,644 $128,397
09/30/85 $158,527 $124,379
10/31/85 $169,656 $130,122
11/30/85 $178,580 $139,046
12/31/85 $177,051 $145,771
01/31/86 $177,582 $146,584
02/28/86 $189,054 $157,532
03/31/86 $197,788 $166,326
04/30/86 $195,573 $164,452
05/31/86 $199,465 $173,193
06/30/86 $199,804 $176,125
07/31/86 $194,769 $166,280
08/31/86 $198,528 $178,610
09/30/86 $195,729 $163,836
10/31/86 $199,174 $173,290
11/30/86 $199,313 $177,501
12/31/86 $196,704 $172,963
01/31/87 $206,598 $196,252
02/28/87 $210,813 $203,998
03/31/87 $216,041 $209,883
04/30/87 $212,390 $208,018
05/31/87 $212,857 $209,813
06/30/87 $215,113 $220,407
07/31/87 $220,233 $231,571
08/31/87 $223,735 $240,203
09/30/87 $224,205 $234,963
10/31/87 $205,372 $184,374
11/30/87 $202,024 $169,207
12/31/87 $205,162 $182,107
01/31/88 $211,768 $189,761
02/29/88 $216,639 $198,563
03/31/88 $217,224 $192,437
04/30/88 $220,243 $194,565
05/31/88 $221,498 $196,219
06/30/88 $226,482 $205,216
07/31/88 $228,339 $204,434
08/31/88 $228,248 $197,499
09/30/88 $232,653 $205,903
10/31/88 $234,165 $211,632
11/30/88 $232,315 $208,604
12/31/88 $235,730 $212,239
01/31/89 $244,971 $227,737
02/28/89 $245,951 $222,072
03/31/89 $251,239 $227,245
04/30/89 $262,796 $239,031
05/31/89 $264,820 $248,660
06/30/89 $269,084 $247,259
07/31/89 $278,233 $269,563
08/31/89 $281,711 $274,811
09/30/89 $284,951 $273,690
10/31/89 $280,620 $267,342
11/30/89 $281,237 $272,768
12/31/89 $283,585 $279,307
01/31/90 $268,016 $260,566
02/28/90 $270,401 $263,942
03/31/90 $270,158 $270,930
04/30/90 $269,239 $264,180
05/31/90 $282,082 $289,876
06/30/90 $283,267 $287,921
07/31/90 $278,253 $287,000
08/31/90 $263,033 $261,085
09/30/90 $254,879 $248,396
10/31/90 $244,174 $247,344
11/30/90 $257,481 $263,296
12/31/90 $265,719 $270,624
01/31/91 $282,698 $282,379
02/28/91 $297,907 $302,544
03/31/91 $304,580 $309,862
04/30/91 $308,205 $310,597
05/31/91 $317,050 $323,944
06/30/91 $306,492 $309,113
07/31/91 $314,338 $323,508
08/31/91 $320,185 $330,713
09/30/91 $325,372 $325,175
10/31/91 $326,836 $329,536
11/30/91 $317,064 $316,290
12/31/91 $340,385 $352,400
01/31/92 $344,368 $345,840
02/29/92 $349,534 $350,313
03/31/92 $349,884 $343,506
04/30/92 $351,144 $353,578
05/31/92 $355,077 $355,301
06/30/92 $356,107 $350,015
07/31/92 $359,882 $364,302
08/31/92 $352,972 $356,855
09/30/92 $357,914 $361,047
10/31/92 $354,550 $362,286
11/30/92 $378,730 $374,583
12/31/92 $391,786 $379,177
01/31/93 $403,383 $382,344
02/28/93 $411,088 $387,549
03/31/93 $418,652 $395,719
04/30/93 $407,181 $386,154
05/31/93 $420,089 $396,448
06/30/93 $430,087 $397,604
07/31/93 $437,054 $396,002
08/31/93 $465,200 $410,990
09/30/93 $461,525 $407,836
10/31/93 $477,540 $416,266
11/30/93 $470,854 $412,311
12/31/93 $481,897 $417,294
01/31/94 $487,776 $431,467
02/28/94 $468,693 $419,763
03/31/94 $445,899 $401,486
04/30/94 $447,778 $406,638
05/31/94 $461,030 $413,288
06/30/94 $450,573 $403,163
07/31/94 $460,018 $416,391
08/31/94 $471,439 $433,428
09/30/94 $458,042 $422,844
10/31/94 $462,716 $432,310
11/30/94 $444,211 $416,581
12/31/94 $438,388 $422,746
01/31/95 $453,910 $433,700
02/28/95 $473,035 $450,582
03/31/95 $477,273 $463,855
04/30/95 $487,074 $477,504
05/31/95 $509,272 $496,545
06/30/95 $530,728 $508,068
07/31/95 $550,806 $524,906
08/31/95 $574,487 $526,216
09/30/95 $585,718 $548,410
10/31/95 $575,970 $546,450
11/30/95 $601,664 $570,411
12/31/95 $607,860 $581,397
01/31/96 $634,319 $601,161
02/29/96 $647,783 $606,747
03/31/96 $645,207 $612,589
04/30/96 $649,714 $621,610
05/31/96 $661,948 $637,611
06/30/96 $668,914 $640,039
07/31/96 $628,581 $611,775
08/31/96 $654,865 $624,695
09/30/96 $678,456 $659,822
10/31/96 $680,798 $678,013
11/30/96 $715,453 $729,214
12/31/96 $724,288 $714,767
01/31/97 $750,497 $759,396
02/28/97 $770,295 $765,354
03/31/97 $737,047 $733,965
04/30/97 $745,175 $777,743
05/31/97 $819,389 $825,060
06/30/97 $844,105 $862,002
07/31/97 $892,680 $930,569
08/31/97 $882,200 $878,474
09/30/97 $940,728 $926,555
10/31/97 $960,237 $895,646
11/30/97 $963,862 $937,070
12/31/97 $1,018,501 $953,150
01/31/98 $1,034,656 $963,680
02/28/98 $1,079,578 $1,033,143
03/31/98 $1,187,666 $1,086,006
04/30/98 $1,233,007 $1,096,927
05/31/98 $1,208,390 $1,078,094
06/30/98 $1,260,227 $1,121,850
07/31/98 $1,275,324 $1,109,933
08/31/98 $1,131,192 $949,620
09/30/98 $1,147,033 $1,010,457
10/31/98 $1,184,888 $1,092,575
11/30/98 $1,248,029 $1,158,765
12/31/98 $1,314,592 $1,225,494
01/31/99 $1,371,294 $1,276,720
02/28/99 $1,372,412 $1,237,047
03/31/99 $1,421,911 $1,286,525
04/30/99 $1,516,998 $1,336,346
05/31/99 $1,521,629 $1,304,831
06/30/99 $1,555,606 $1,377,187
07/31/99 $1,542,783 $1,334,225
08/31/99 $1,495,498 $1,327,577
09/30/99 $1,513,931 $1,291,223
10/31/99 $1,611,707 $1,372,899
11/30/99 $1,593,274 $1,400,859
12/31/99 $1,604,494 $1,483,312
</TABLE>
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 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.
3
<PAGE>
WEITZ PARTNERS, INC. -- PARTNERS VALUE FUND
DECEMBER 31, 1999 - ANNUAL REPORT
January 5, 2000
Dear Fellow Shareholder:
1999 was a good year for the Partners Value Fund. A 4th quarter gain of
+6.0% brought our total return for the year to +22.1% (after all fees and
expenses). This compares to gains of 14.9% for the quarter and +21.0% for the
year for the S&P 500 (with dividends reinvested).
The longer-term results, which are much more important, have also been
good. The table below compares our returns to those of the S&P 500 (very large
companies), the Russell 2000 (an index of smaller companies), and our peer group
of mutual funds (according to Lipper Analytical Services). All of the
performance data assumes reinvestment of dividends (except Russell for which
dividend data is not available) and are calculated after deducting expenses.
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
-------- -------- -------- --------
<S> <C> <C> <C> <C>
PARTNERS VALUE FUND 22.1% 30.4% 29.6% 18.9%
S&P 500 Index 21.0 27.6 28.5 18.2
Russell 2000 Index 21.3 13.1 16.7 13.4
Average Growth and Income Fund 13.8 18.4 21.7 14.7
</TABLE>
Tables like this one emphasize RELATIVE performance, and ours has been
reasonably good over the life of the fund. However, shareholders should also
notice the ABSOLUTE performance of all of the entries over the past 10 years.
Even the beleaguered Russell 2000 has out- performed the very long-term average
total return on stocks of about 10%, and the average annual returns on both our
Fund and the S&P 500 are about 8 full percentage points above the average. This
has been wonderful for all of us as stock investors, but it would be virtually
impossible for stocks, in the aggregate, to repeat that performance over the
next 10 years. Warren Buffett, in the November 22, 1999 issue of FORTUNE, makes
a very persuasive case that total returns on domestic stocks might average 6%
over the next 17 years. (We'll do our best to emulate the children of Lake
Woebegone and be above average.)
A TALE OF TWO MARKETS
This is a very interesting time for stock investors. The market's split
personality is more pronounced than ever, with the favored few soaring to
seemingly nonsensical levels of over-valuation, while the majority of stocks
have been in a quiet bear market for several quarters.
4
<PAGE>
A handful of very large companies have captured investors' imaginations, and
they now dominate the popular market averages. Consider:
- 5% of the S&P 500 (25 stocks) account for 50% of the value of the
index;
- 5 STOCKS of the 4400 in the NASDAQ Composite Index have a combined
market valuation of $1.5 TRILLION, and account for 50% of the value
of the index. The top 10 stocks account for $2 trillion, or 2/3 of
the index. (Incidentally, the average P/E ratio of all the stocks in
the NASDAQ Index is approaching 200X!);
- Microsoft has a higher market capitalization than THE ENTIRE RUSSELL
2000 INDEX.
This is not good or bad, PER SE, but it seems to me to be an inherently unstable
situation (a tech stock "bubble"). It also means that these indexes have lost
some of their meaning as benchmarks. Some money managers concerned about keeping
up with these benchmarks have adopted an "if you can't lick 'em, join 'em"
attitude and jumped onto the bandwagon. This only reinforces the trend.
Our response to this phenomenon has been to sell off shares of some of our
cable and telecom stocks which (happily) have been infected with Internet or
".com" fever, and to buy more of our "old economy" favorites, especially
financial service companies. This puts us even further out of step with the
mainstream indexes, such as the S&P, so it will hurt our relative performance
for as long as the two-tier market persists. However, I believe that it will
serve us well when stock prices and business values are re-aligned.
PORTFOLIO REVIEW
Our portfolio changes very little from quarter to quarter, so I often have
trouble finding new things to say about our favorite stocks. This quarter, it
was particularly striking to re-read the 3rd quarter '99 letter and find that it
could be dropped into this letter practically untouched--except that the prices
of many of our favorites were down 10-20% since September 30. (This is why our
large lead over the S&P during the first 9 months of the year evaporated during
the 4th quarter.) At any rate, for those who remember this section of the 3rd
quarter letter, and for those who weren't interested then and aren't interested
now, you can skip the next several paragraphs. (This reminds me of the Wesco
Financial annual report in which Charlie Munger announced that what he had
written last year was still equally valid, so he was reprinting last year's
letter in lieu of a new one.)
5
<PAGE>
BANKS--Greenpoint, Golden State, and Washington Mutual are large, profitable,
growing banks selling at about 7 times next year's earnings per share and buying
back their own stock. With modest earnings growth and some P/E multiple
expansion, 50% total returns over the next 2-3 years seem like a realistic
possibility. Other banks in our portfolio, such as North Fork, are growing
faster and sell at slightly higher multiples, but have similar potential.
REAL ESTATE--Host Marriott, Hilton, Forest City, and Catellus are all selling at
discounts to the current liquidation values of their underlying real estate, and
each is generating strong cash flows that are available for dividends,
acquisitions, and stock buybacks. Host Marriott is a real estate investment
trust (REIT) that owns luxury and full-service hotels such as Ritz Carlton, Four
Seasons, Marriott, and Hyatt. Their properties could probably be sold for $13-15
per share with one phone call, yet the stock sells for about $8. The $.84
dividend is well covered and provides a 10% current yield, and the underlying
value of the business is growing. The other three companies are not REITs and do
not pay large dividends, but the degrees of under-valuation are similar. In each
case, the expectation of a total return of 50% over the next 2-3 years does not
seem outlandish.
MORTGAGE BANKING--Countrywide Credit has two parts to its business--originating
and servicing mortgages. Originating mortgages, to finance a home purchase or to
refinance an existing mortgage, generates one-time origination fee income.
Servicing involves collecting monthly payments and dealing with escrow accounts,
and generates a stream of fee income over the life of the mortgage. Higher
interest rates generally mean lower new mortgage activity, thus lower
origination fees, but it also means that existing mortgages remain outstanding
longer so the value of the servicing "annuity" rises. As interest rates have
risen in recent months, investors have focused on the negative side of this
equation and ignored the positive, so Countrywide has declined from over $50 per
share (where we had been sellers) to a recent $25. At this level, Countrywide
sells at under 7 times next years expected earnings and we have added
significantly to our position from the low $30's to the mid-$20's. Other
mortgage bankers which focus on originations, such as New Century Financial and
Resource Bancshares Mortgage, are more adversely affected by higher rates, but
both stocks are so severely depressed that they ought to be good contributors to
our future results from today's prices.
OTHER FINANCIAL SERVICES--Fears of higher interest rates, a slower economy, a
weaker stock market, etc. have depressed several others of our financial
services companies. United Asset Management is a holding company of investment
management businesses whose stock sells for about 50-60% of its value in a
takeover. It has operating problems that I believe are fixable, and
6
<PAGE>
it is buying in its own stock very aggressively. Berkshire Hathaway has fallen
from over $80,000 per share to under $52,000 over the past 18 months, and now
sells very close to its adjusted book value and well below its intrinsic
business value. Redwood Trust sells at $12, while its portfolio has a
liquidation value of $22, and its management is very intelligent, motivated, and
shareholder-oriented. It has become a relatively small position in our portfolio
since we own as many shares as the company's by-laws permit and our portfolio
has grown while its price has shrunk. However, the risk-reward equation for
Redwood and several other smaller financial companies appears to be very
favorable.
UTILITIES--Western Resources (WR) is an electric utility with assets worth at
least $25-30 per share, which has been under the multiple clouds of a failed
merger and a home security business with operating problems. Management is under
severe pressure to realize the values, and the stock at $17 should generate a
good return from this level. Citizens Utilities is also a company with great
assets, selling at a discount to their underlying value, whose management has
announced plans to restructure the company in order to recognize value. This is
the same management that built and sold Century Communications and Centennial
Cellular, both of which were very profitable holdings for our fund.
CABLE TELEVISION AND CELLULAR TELEPHONE--We have lost most of our cable and
cellular stocks to takeovers, and those that remain are not as cheap as they
used to be. Nevertheless, they are strong companies with good futures. Our
favorite is Liberty Media. It is a fabulous collection of programming and other
media assets, managed by John Malone, the master developer of media "content"
properties.
CASH RESERVES AND MARKET TIMING--The level of our cash position is a function of
new investments in the fund by shareholders plus proceeds from sales of stocks,
minus new purchases--not a market timing call. We continue to be a net buyer of
stocks, so our cash and other "reserves" were reduced to 24% of the portfolio at
year-end.
OUTLOOK
In the new year, we may have to deal with the deflation of the tech stock
bubble--gradually or dramatically. If that happens, selling in the favorites may
spread to the rest of the market, and our perfectly sane, bargain-priced stocks
could be carried along (down) by the mob. (We have seen hints of this in the
first few days of January.) For those who are uncomfortable with this prospect,
risk-free short-term U.S. government bonds yield about 6%, and high quality
municipal bonds yield 4-5%. Both of these are roughly equivalent on an after-
7
<PAGE>
tax basis to Warren Buffett's predicted 6% total return on stocks. For those who
can stand some volatility, I believe it is still worth the effort (and
occasional discomfort) to buy cheap stocks when we find them and not to try to
be fancy with the timing.
SHAREHOLDER INFORMATION
ANNUAL SHAREHOLDER INFORMATION MEETING: Please mark your calendars for
May 24, 2000. The meeting will be held at the Omaha Marriott and will begin at
4:30. It is a great opportunity to meet your fellow shareholders and the client
service people you have talked to on the phone. There should be no official
business, so the whole meeting can be devoted to answering shareholder
questions. We look forward to seeing you then.
WEBSITE: Our website address is www.weitzfunds.com. It contains daily
prices, our prospectus, published shareholder communications and forms, a list
of each fund's top 10 holdings, historical performance data, and answers to
frequently asked questions. We are working on giving shareholders the ability to
look up account balances and other historical transaction data, and we will keep
you posted on our progress. In the meantime, remember that you can use our
automated phone system to check balances and recent transactions. The number for
that service is: (800) 773-6472.
If you have ideas on how we could improve on the content or
user-friendliness of the website, our client service people would welcome your
suggestions.
Sincerely,
/s/ Wallace R. Weitz
Wallace R. Weitz
President, Portfolio Manager
8
<PAGE>
WEITZ PARTNERS, INC. -- PARTNERS VALUE FUND
1999 DISTRIBUTION INFORMATION
JUNE 1999 DISTRIBUTION
Weitz Partners, Inc. - Partners Value Fund declared a
distribution of $0.074 per share payable on June 29, 1999, to
shareholders of record on June 28, 1999. The source for this
distribution was:
<TABLE>
<S> <C>
LONG TERM CAPITAL GAIN $ 0.074
- ---------------------------- ========
</TABLE>
JANUARY 2000 DISTRIBUTION
Weitz Partners, Inc. - Partners Value Fund declared a
distribution of $0.9199 per share payable on January 3, 2000, to
shareholders of record on December 31, 1999. The source for this
distribution was:
<TABLE>
<S> <C>
ORDINARY INCOME
- -----------------------------------------------------
- --------------------
Net Investment Income $ 0.1995
Net Short Term Capital Gain 0.0275
--------
Total Ordinary Income $ 0.2270
========
LONG TERM CAPITAL GAIN $ 0.6929
- ---------------------------- ========
</TABLE>
9
<PAGE>
WEITZ PARTNERS, INC. -- PARTNERS VALUE FUND
SCHEDULE OF INVESTMENTS IN SECURITIES
DECEMBER 31, 1999
<TABLE>
<CAPTION>
SHARES
OR UNITS COST VALUE
- ----------- -------------- --------------
<C> <S> <C> <C>
COMMON STOCKS -- 74.8%
AUTO SERVICES -- 0.2%
173,000 Insurance Auto Auctions, Inc.* $ 2,024,761 $ 2,724,750
-------------- --------------
BANKING -- 14.0%
38,000 Astoria Financial Corp. 1,411,131 1,156,625
713,200 Commercial Federal Corp. 15,717,714 12,703,875
250,000 East West Bancorp, Inc. 2,453,750 2,859,375
20,000 First Federal Bankshares, Inc. 200,000 172,500
42,000 First Place Financial Corp. 467,250 446,250
1,897,100 Golden State Bancorp, Inc.* 38,422,221 32,724,975
1,342,900 Greenpoint Financial Corp. 35,748,178 31,977,806
124,000 Local Financial Corp.* 1,254,619 1,286,500
1,371,500 North Fork Bancorporation, Inc. 25,631,895 24,001,250
70,000 South Jersey Financial Corp., Inc.* 759,006 1,093,750
100,000 Troy Financial Corp.* 994,436 1,018,750
531,500 U.S. Bancorp 15,656,679 12,656,344
108,000 Virginia Capital Bancshares, Inc. 1,387,313 1,741,500
1,370,280 Washington Mutual, Inc. 42,867,178 35,627,280
-------------- --------------
182,971,370 159,466,780
-------------- --------------
CABLE TELEVISION -- 5.6%
851,895 Adelphia Communications Corp. CL A* 30,043,532 55,905,609
107,200 MediaOne Group, Inc.* 4,741,574 8,234,300
-------------- --------------
34,785,106 64,139,909
-------------- --------------
CONSUMER PRODUCTS AND SERVICES -- 2.0%
185,000 American Classic Voyages Co.* 2,991,019 6,475,000
185,200 LabOne, Inc. 3,007,384 1,273,250
6,650 Lady Baltimore Foods, Inc. CL A* 212,725 390,688
432,000 Premier Parks, Inc.* 11,072,471 12,474,000
872,000 Protection One, Inc.* 4,389,808 1,689,500
-------------- --------------
21,673,407 22,302,438
-------------- --------------
</TABLE>
The accompanying notes form an integral part of these financial statements.
10
<PAGE>
WEITZ PARTNERS, INC. -- PARTNERS VALUE FUND
SCHEDULE OF INVESTMENTS IN SECURITIES, CONTINUED
<TABLE>
<CAPTION>
SHARES
OR UNITS COST VALUE
- ----------- -------------- --------------
<C> <S> <C> <C>
FEDERAL AGENCIES -- 2.5%
40,000 Fannie Mae $ 759,888 $ 2,497,500
50,000 Freddie Mac 138,785 2,353,125
556,000 SLM Holding Corp. 19,832,093 23,491,000
-------------- --------------
20,730,766 28,341,625
-------------- --------------
FINANCIAL SERVICES -- 9.3%
1,001,000 Allied Capital Corp. 18,218,541 18,330,812
150,000 American Capital Strategies, Ltd. 2,550,000 3,412,500
88 Berkshire Hathaway, Inc. CL A* 1,608,078 4,936,800
21,564 Berkshire Hathaway, Inc. CL B* 43,275,032 39,462,120
751,000 Imperial Credit Industries, Inc.* 10,380,151 4,693,750
454,500 The PMI Group, Inc. 13,165,488 22,185,281
20,000 PS Group Holdings, Inc. 106,800 225,000
713,200 United Asset Management Corp. 15,584,973 13,238,775
60,000 United Panam Financial Corp.* 607,346 116,250
-------------- --------------
105,496,409 106,601,288
-------------- --------------
INFORMATION AND DATA PROCESSING -- 0.6%
382,400 Data Transmission Network Corp.* 8,500,741 6,596,400
175,000 Intelligent Systems Corp.* 164,183 700,000
-------------- --------------
8,664,924 7,296,400
-------------- --------------
LODGING AND GAMING -- 3.8%
419,900 Extended Stay America, Inc.* 3,263,388 3,201,737
145,000 Harrah's Entertainment, Inc.* 2,120,444 3,833,438
2,116,200 Hilton Hotels Corp. 22,401,653 20,368,425
143,000 Mandalay Resort Group* 1,802,312 2,877,875
1,085,000 Park Place Entertainment Corp.* 6,731,752 13,562,500
-------------- --------------
36,319,549 43,843,975
-------------- --------------
</TABLE>
The accompanying notes form an integral part of these financial statements.
11
<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 -- 8.1%
1,305,000 AT&T Corp. - Liberty Media Group A* $ 26,253,398 $ 74,058,750
57,165 Chris-Craft Industries, Inc.* 2,353,719 4,123,026
30,000 Daily Journal Corp.* 459,001 978,750
329,500 Valassis Communications, Inc.* 5,654,450 13,921,375
-------------- --------------
34,720,568 93,081,901
-------------- --------------
MORTGAGE BANKING -- 4.1%
1,743,200 Countrywide Credit Industries, Inc. 57,092,240 44,015,800
62,100 New Century Financial Corp.* 567,787 978,075
322,000 Resource Bancshares Mtg. Grp., Inc. 4,096,395 1,459,063
87,982 WMF Group, Limited* 606,637 505,897
-------------- --------------
62,363,059 46,958,835
-------------- --------------
PRINTING SERVICES -- 0.7%
620,300 Mail-Well, Inc.* 8,125,974 8,374,050
-------------- --------------
REAL ESTATE AND CONSTRUCTION -- 2.3%
1,465,600 Catellus Development Corp.* 18,937,922 18,778,000
246,200 Forest City Enterprises, Inc. CL A 5,137,132 6,893,600
10,000 Syntroleum Corp.* 31,917 81,250
-------------- --------------
24,106,971 25,752,850
-------------- --------------
REAL ESTATE INVESTMENT TRUSTS -- 5.9%
400,000 Capital Automotive REIT 4,654,203 4,875,000
100,000 Dynex Capital, Inc. 1,803,500 643,750
407,830 Fortress Investment Corp. 7,662,886 6,933,110
245,500 Hanover Capital Mortgage Holdings, Inc. 3,645,610 859,250
20,935 Healthcare Financial Partners Units** 2,084,079 2,093,500
5,251,900 Host Marriott Corp. 47,378,845 43,328,175
190,000 Imperial Credit Commercial Mtg. Inv. Corp. 1,700,500 2,161,250
367,300 NovaStar Financial, Inc. 6,013,405 1,147,813
423,952 Redwood Trust, Inc. 9,571,344 5,299,400
-------------- --------------
84,514,372 67,341,248
-------------- --------------
</TABLE>
The accompanying notes form an integral part of these financial statements.
12
<PAGE>
WEITZ PARTNERS, INC. -- PARTNERS VALUE FUND
SCHEDULE OF INVESTMENTS IN SECURITIES, CONTINUED
<TABLE>
<CAPTION>
SHARES
OR UNITS COST VALUE
- ----------- -------------- --------------
<C> <S> <C> <C>
RESTAURANTS -- 0.2%
239,100 CBRL Group, Inc. $ 3,816,426 $ 2,320,017
-------------- --------------
RETAIL DISCOUNT -- 0.8%
548,900 Consolidated Stores Corp.* 8,379,824 8,919,625
-------------- --------------
SATELLITE SERVICES -- 0.9%
556,200 Orbital Sciences Corp.* 7,575,833 10,324,462
-------------- --------------
TELECOMMUNICATIONS -- 8.4%
47,100 Alltel Corp. 1,032,681 3,894,581
111,064 Centennial Cellular Corp. CL A* 1,698,163 9,204,429
236,850 Corecomm, Limited* 1,350,198 14,062,969
493,200 Telephone and Data Systems, Inc. 25,066,120 62,143,200
61,100 United States Cellular Corp.* 2,912,006 6,167,281
-------------- --------------
32,059,168 95,472,460
-------------- --------------
UTILITIES -- 5.4%
2,781,200 Citizens Utilities Co. CL B* 29,565,091 39,458,275
1,331,900 Western Resources, Inc. 30,993,336 22,642,300
-------------- --------------
60,558,427 62,100,575
-------------- --------------
Total Common Stocks 738,886,914 855,363,188
-------------- --------------
WARRANTS -- 0.0%
399,500 Hanover Capital Mtg. Holdings, Inc., Expiring 9/15/00 31,211 6,244
370,000 NovaStar Financial, Inc., Expiring 2/03/01 185,000 18,500
-------------- --------------
216,211 24,744
-------------- --------------
CONVERTIBLE PREFERRED STOCKS -- 0.3%
500,000 NovaStar Financial, Inc. 7% Pfd. Class B Cumulative 3,312,167 2,975,000
-------------- --------------
</TABLE>
The accompanying notes form an integral part of these financial statements.
13
<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 -- 1.8%
$ 3,000,000 U.S. Treasury Note 5.5% 3/31/00 $ 2,999,346 $ 3,000,939
2,000,000 Fannie Mae 6.625% 7/12/00 2,000,000 2,004,120
10,000,000 Freddie Mac 5.0% 2/15/01 9,906,976 9,852,640
2,500,000 Federal Home Loan Bank 6.44% 11/28/05 2,502,380 2,440,308
3,000,000 Fannie Mae 6.56% 11/26/07 3,000,000 2,849,823
-------------- --------------
Total U.S. Government and Agency Securities 20,408,702 20,147,830
-------------- --------------
SHORT-TERM SECURITIES -- 23.5%
37,936,400 Wells Fargo Government Money Market Fund 37,936,400 37,936,400
55,500,000 U.S. Treasury Bill 01/20/00 55,348,379 55,368,687
38,342,000 Fannie Mae Discount Note 2/14/00 38,085,194 38,108,497
50,000,000 Fannie Mae Discount Note 2/25/00 49,579,861 49,615,750
30,000,000 Freddie Mac Discount Note 03/02/00 29,707,708 29,728,590
8,000,000 Federal Home Loan Bank Discount Note 03/10/00 7,916,004 7,917,816
3,500,000 Federal Home Loan Bank Discount Note 04/19/00 3,442,431 3,442,058
48,000,000 U.S. Treasury Bill 05/04/00 47,128,004 47,137,872
-------------- --------------
Total Short-Term Securities 269,143,981 269,255,670
-------------- --------------
Total Investments in Securities -- 100.4% $1,031,967,975 1,147,766,432
============== --------------
Covered Call Options Written at Market Value -- (0.0%) (18,438)
Other Liabilities in Excess of Other Assets -- (0.4%) (4,374,014)
--------------
Total Net Assets -- 100% $1,143,373,980
==============
Net Asset Value Per Share $ 20.02
==============
</TABLE>
<TABLE>
<CAPTION>
NO. OF EXPIRATION DATE/
CONTRACTS STRIKE PRICE VALUE
- ----------- ---------------- ------------
<C> <S> <C> <C>
COVERED CALL OPTIONS WRITTEN AT
MARKET VALUE
100 Mandalay Resort Group March 2000/22.5 $ (12,500)
100 Mandalay Resort Group March 2000/25 (5,938)
------------
$ (18,438)
Total Call Options Written
(premiums received $45,648)
============
</TABLE>
*Non-income producing
**Each unit, which is restricted as to sale, consists of five shares of common
stock and one stock purchase warrant. The company distributed an additional
warrant per unit to unitholders during 1998. The warrants currently have no
value or cost assigned to them.
The accompanying notes form an integral part of these financial statements.
14
<PAGE>
WEITZ PARTNERS, INC. -- PARTNERS VALUE FUND
STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1999
<TABLE>
<S> <C>
Assets:
Investment in securities at value (cost $1,031,967,975) $1,147,766,432
Deposits with brokers for covered call options written 49,061
Cash 490,024
Accrued interest and dividends receivable 3,227,465
Other 10,495
--------------
Total assets 1,151,543,477
--------------
Liabilities:
Due to adviser 1,074,360
Payable for securities purchased 6,761,264
Covered call options written, at value (proceeds
received $45,648) 18,438
Other expenses 315,435
--------------
Total liabilities 8,169,497
--------------
Net assets applicable to outstanding capital stock $1,143,373,980
==============
Net assets represented by:
Additional paid-in capital (note 4) 954,495,936
Accumulated undistributed net investment income 11,432,373
Accumulated undistributed net realized gains 61,620,004
Net unrealized appreciation of investments 115,825,667
--------------
Total representing net assets applicable to
shares outstanding $1,143,373,980
==============
Net asset value per share of outstanding capital stock
(57,097,899 shares outstanding) $ 20.02
==============
</TABLE>
The accompanying notes form an integral part of these financial statements.
15
<PAGE>
WEITZ PARTNERS, INC. -- PARTNERS VALUE FUND
STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1999
<TABLE>
<S> <C> <C>
Investment income:
Dividends $ 8,728,926
Interest 11,937,500
------------
Total investment income 20,666,426
------------
Expenses:
Investment advisory fee 7,343,521
Administrative fee 1,101,528
Custody fees 59,711
Directors fees 6,120
Dividends on securities sold short 8,800
Other expenses 594,135
------------
Total expenses 9,113,815
------------
Net investment income 11,552,611
------------
Realized and unrealized gain on investments:
Net realized gain on securities $62,667,902
Net realized gain on options written 207,652
Net realized loss on securities sold short (1,117,814)
-----------
Net realized gain 61,757,740
Net unrealized appreciation of investments 45,164,375
------------
Net realized and unrealized gain on
investments 106,922,115
------------
Net increase in net assets resulting from
operations $118,474,726
============
</TABLE>
The accompanying notes form an integral part of these financial statements.
16
<PAGE>
WEITZ PARTNERS, INC. -- PARTNERS VALUE FUND
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
1999 1998
--------------- --------------
<S> <C> <C>
Increase in net assets:
From operations:
Net investment income $ 11,552,611 $ 651,484
Net realized gain 61,757,740 22,139,768
Net unrealized appreciation 45,164,375 25,105,776
--------------- --------------
Net increase in net assets resulting from
operations 118,474,726 47,897,028
--------------- --------------
Distributions to shareholders from:
Net investment income (815,990) (1,206,568)
Net realized gains (22,157,574) (15,264,855)
--------------- --------------
Total distributions (22,973,564) (16,471,423)
--------------- --------------
Capital share transactions:
Proceeds from sales 959,615,383 145,291,184
Payments for redemptions (222,923,670) (31,930,637)
Reinvestment of distributions 18,849,624 13,808,275
--------------- --------------
Total increase from capital share transactions 755,541,337 127,168,822
--------------- --------------
Total increase in net assets 851,042,499 158,594,427
--------------- --------------
Net assets:
Beginning of period 292,331,481 133,737,054
--------------- --------------
End of period $ 1,143,373,980 $ 292,331,481
=============== ==============
</TABLE>
The accompanying notes form an integral part of these financial statements.
17
<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>
YEAR ENDING DECEMBER 31,
--------------------------------------------------------------------------
1999 1998 1997 1996 1995
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD: $ 17.68 $ 15.45 $ 11.52 $ 10.38 $ 8.28
---------- ---------- ---------- ---------- ----------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment income 0.21 0.06 0.13 0.06 0.08
Net gains or losses on securities
(realized and unrealized) 3.42 4.00 4.33 1.93 3.11
---------- ---------- ---------- ---------- ----------
Total from investment operations 3.63 4.06 4.46 1.99 3.19
---------- ---------- ---------- ---------- ----------
LESS DISTRIBUTIONS:
Dividends from net investment income (0.05) (0.16) -- (0.06) (0.24)
Distributions from realized gains (1.24) (1.67) (0.53) (0.79) (0.85)
---------- ---------- ---------- ---------- ----------
Total distributions (1.29) (1.83) (0.53) (0.85) (1.09)
---------- ---------- ---------- ---------- ----------
NET ASSET VALUE, END OF PERIOD $ 20.02 $ 17.68 $ 15.45 $ 11.52 $ 10.38
========== ========== ========== ========== ==========
TOTAL RETURN 22.1% 29.1% 40.6% 19.2% 38.7%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period ($000) $1,143,374 $292,331 $133,737 $94,846 $73,781
Ratio of expenses to average net assets 1.24% 1.25% 1.24% 1.23% 1.27%
Ratio of net investment income to average
net assets 1.57% 0.34% 1.11% 0.51% 0.82%
Portfolio turnover rate 29% 36% 30% 37% 51%
</TABLE>
The accompanying notes form an integral part of these financial statements.
18
<PAGE>
WEITZ PARTNERS, INC. -- PARTNERS VALUE FUND
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
(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's investment objective is capital appreciation. The Fund invests
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 value 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 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.
- 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
19
<PAGE>
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.
The risk in writing a call option is that the Fund gives up the
opportunity of profit if the market price of the security increases.
The Fund 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 AND DISTRIBUTIONS TO SHAREHOLDERS
Security transactions are accounted for on the date the securities are
purchased or sold (trade date). Income dividends and dividends on short
positions are recorded on the ex-dividend date. Interest, including
amortization of discount and premium, is accrued as earned.
Distributions to shareholders are recorded on the ex-dividend date.
Realized gains or losses are determined by specifically identifying the
issue sold.
(d) 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.
20
<PAGE>
(e) SECURITIES SOLD SHORT
The Fund periodically engages in selling securities short, which
obligates the Fund to replace a security borrowed by purchasing the
same security at the current market value. The Fund would incur a loss
if the price of the security increases between the date of the short
sale and the date on which the Fund replaces the borrowed security. The
Fund would realize a gain if the price of the security declines between
those dates.
The Fund is required to establish a margin account with the broker
lending the security sold short. While the short sale is outstanding,
the broker retains the proceeds of the short sale. The Fund will place
in a segregated account a sufficient amount of cash and securities as
required by applicable federal securities regulations in order to cover
the transaction.
(3) RELATED PARTY TRANSACTIONS
The Fund has retained Wallace R. Weitz & Company (the "Adviser") as its
exclusive investment adviser. In addition, the Company has an agreement
with Weitz Securities, Inc. (the "Distributor") 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 the Distributor.
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 year ended December 31, 1999.
Under the terms of an administration agreement, the Adviser provides
certain services including the transfer of shares, disbursement of
dividends, fund accounting and related administrative services of the Fund.
The Adviser receives an administration fee equal to 0.15% per annum of the
Fund's average daily net asset value.
The Distributor received no compensation for distribution of the Fund's
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. One hundred fifty
million of these shares have been authorized by the Board of Directors to
be issued by the Fund. 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.
21
<PAGE>
Transactions in the capital stock of the Fund are summarized as follows:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
1999 1998
------------- -------------
<S> <C> <C>
Transactions in shares:
Shares issued............................... 51,129,522 8,950,496
Shares redeemed............................. (11,692,545) (2,006,948)
Reinvested dividends........................ 1,122,147 940,686
------------- -------------
40,559,124 7,884,234
============= =============
</TABLE>
The Board of Directors declared a dividend from net investment income of
$0.1995 per share and a distribution of $0.7204 per share from net realized
gains payable January 3, 2000, to shareholders of record December 31, 1999
and ex-dividend as of January 3, 2000.
(5) SECURITIES TRANSACTIONS
Purchases and proceeds from maturities or sales of investment securities of
the Fund, other than short-term securities, aggregated $702,536,818 and
$151,846,422, respectively. The cost of investments for Federal income tax
purposes is $1,032,024,146. At December 31, 1999, the aggregate gross
unrealized appreciation and depreciation, based on cost for Federal income
tax purposes, were $205,701,380 and $89,959,094, respectively.
Transactions relating to covered call options during the year ended
December 31, 1999, are summarized as follows:
<TABLE>
<CAPTION>
NUMBER OF
CONTRACTS PREMIUM
--------- ----------
<S> <C> <C>
Options written, beginning of period............. 880 $ 542,361
Options written.................................. 740 291,190
Options exercised................................ (720) (407,185)
Options expired.................................. (200) (99,823)
Options closed................................... (500) (280,895)
------ ----------
Options outstanding, end of period............... 200 $ 45,648
====== ==========
</TABLE>
22
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders
Weitz Partners, Inc. -- Partners Value Fund:
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments in securities, and the related statements of
operations and of changes in net assets and the financial highlights present
fairly, in all material respects, the financial position of Weitz Partners,
Inc. - Partners Value Fund (the "Fund") at December 31, 1999, and the results of
its operations, the changes in its net assets and the financial highlights for
the year then ended, in conformity with accounting principles generally accepted
in the United States. These financial statements and financial highlights
(hereafter referred to as "financial statements") are the responsibility of the
Fund's management; our responsibility is to express an opinion on these
financial statements based on our audit. We conducted our audit of these
financial statements in accordance with auditing standards generally accepted in
the United States which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audit, which included confirmation of securities at December 31, 1999, by
correspondence with the custodian and brokers, provides a reasonable basis for
the opinion expressed above. The financial statements for the year ended
December 31, 1998, including the financial highlights for each of the four years
in the period then ended, were audited by other independent accountants whose
reports dated January 15, 1999, and January 19, 1996, expressed an unqualified
opinion on those financial statements.
PricewaterhouseCoopers LLP
New York, New York
January 14, 2000
23
<PAGE>
WEITZ PARTNERS, INC. -- PARTNERS VALUE FUND
CHANGE IN INDEPENDENT ACCOUNTANTS
On August 13, 1999, McGladrey & Pullen, LLP ("McGladrey") resigned as
independent auditors of the Fund pursuant to an agreement by
PricewaterhouseCoopers LLP ("PwC") to acquire McGladrey's investment company
practice. The McGladrey partners and professionals serving the Fund at the time
of the acquisition joined PwC.
The reports of McGladrey on the financial statements of the Fund during
the past two fiscal years contained no adverse opinion or disclaimer of opinion,
and were not qualified or modified as to uncertainty, audit scope or accounting
principles.
In connection with its audits for the two most recent fiscal years and
through August 13, 1999, there were no disagreements with McGladrey on any
matter of accounting principle or practices, financial statement disclosure, or
auditing scope or procedure, which disagreements, if not resolved to the
satisfaction of McGladrey, would have caused it to make reference to the subject
matter of disagreement in connection with its report.
On July 30, 1999, the Fund, with the approval of its Board of Directors
and its Audit Committee, engaged PwC as its independent auditors.
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