<PAGE>   1

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                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                            ------------------------

                                   FORM 10-Q

                QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                    FOR THE THREE MONTHS ENDED JUNE 30, 2000
                           COMMISSION FILE NO. 0-8841

                            ------------------------

                            THE PIONEER GROUP, INC.
             (exact name of registrant as specified in its charter)

                            ------------------------

<TABLE>
<S>                                           <C>
                  DELAWARE                                           13-5657669
      (State or other jurisdiction of                              (IRS Employer
       incorporation or organization)                           Identification No.)

   60 STATE STREET, BOSTON, MASSACHUSETTS                              02109
  (Address of principal executive offices)                           (Zip Code)
</TABLE>

                                  617-742-7825
              (Registrant's telephone number, including area code)

                                   NO CHANGES
   (Former name, former address and former fiscal year, if changes since last
                                    report)

                            ------------------------

     Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding twelve months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X]  No [ ]

  As of June 30, 2000, there were 26,876,814 shares of the Registrant's Common
                                     Stock,
               $.10 par value per share, issued and outstanding.

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<PAGE>   2

                        PART I -- FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                    THE PIONEER GROUP, INC. AND SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEETS
                 (DOLLARS IN THOUSANDS EXCEPT PER SHARE AMOUNT)

<TABLE>
<CAPTION>
                                                               JUNE 30,     DECEMBER 31,
                                                                 2000           1999
                                                              -----------   ------------
                                                              (UNAUDITED)
<S>                                                           <C>           <C>
                                         ASSETS
CURRENT ASSETS:
Cash and cash equivalents, at cost which approximates fair
  value.....................................................   $ 45,105       $ 36,740
Restricted cash.............................................        848             99
Investment in marketable securities, at fair value..........      6,605          3,850
Receivables:
    From securities brokers and dealers for sales of mutual
     fund shares............................................     14,291          9,429
    From Pioneer Family of Mutual Funds.....................     18,140         20,610
    For securities sold.....................................         33            194
    Other...................................................      8,597          8,022
Timber inventory............................................      3,449          3,908
Other current assets........................................      7,445          9,749
                                                               --------       --------
        Total current assets................................    104,513         92,601
                                                               --------       --------
NONCURRENT ASSETS:
Cost of acquisition in excess of net assets (net of
  accumulated amortization of $14,722 in 2000 and $13,842 in
  1999).....................................................     13,909         14,539
Long-term venture capital investments, at fair value (cost
  $56,248 in 2000 and $55,504 in 1999)......................     50,839         51,093
Long-term investments, at lower of cost or fair value.......      8,617          6,712
Timber operations:
  Timber equipment and facilities (net of accumulated
    depreciation of $14,754 in 2000 and $6,231 in 1999).....     11,296         19,496
  Deferred timber development costs (net of accumulated
    amortization of $10,893 in 2000 and $2,279 in 1999).....         --          8,609
Building (net of accumulated amortization of $2,321 in 2000
  and $1,990 in 1999).......................................     24,518         24,559
Furniture, equipment, and leasehold improvements (net of
  accumulated depreciation and amortization of $20,799 in
  2000 and $17,646 in 1999).................................     15,899         17,266
Other noncurrent assets.....................................     29,366         26,633
Net noncurrent assets of discontinued operations............      2,638         38,324
                                                               --------       --------
        Total noncurrent assets.............................    157,082        207,231
                                                               --------       --------
                                                               $261,595       $299,832
                                                               ========       ========
                          LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Payable to funds for shares sold............................   $ 14,287       $  9,420
Accounts payable............................................      5,692          5,832
Accrued expenses............................................     36,197         22,023
Brokerage liabilities.......................................        145            265
Accrued income taxes........................................      2,574          6,899
Distribution and service fees due to brokers and dealers....      9,135          9,043
Current portion of notes payable............................      1,887          1,343
Net current liabilities of discontinued operations..........         --         31,815
                                                               --------       --------
        Total current liabilities...........................     69,917         86,640
                                                               --------       --------
NONCURRENT LIABILITIES:
Notes payable, net of current portion.......................     22,666         63,892
                                                               --------       --------
        Total noncurrent liabilities........................     22,666         63,892
                                                               --------       --------
        Total liabilities...................................     92,583        150,532
                                                               --------       --------
Minority interest...........................................     62,476         62,202
                                                               --------       --------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
    Common stock, $0.10 par value; authorized 60,000,000
     shares; issued 26,893,516 shares in 2000 and 26,532,064
     shares in 1999.........................................      2,689          2,653
    Paid-in capital.........................................     53,629         47,372
    Retained earnings.......................................     63,408         50,044
    Treasury stock at cost, 16,702 shares in 2000 and 50,885
     shares in 1999.........................................       (224)        (1,804)
    Cumulative translation adjustment.......................     (4,309)        (3,943)
                                                               --------       --------
                                                                115,193         94,322
                                                               --------       --------
    Less -- Deferred cost of restricted common stock
     issued.................................................     (8,657)        (7,224)
                                                               --------       --------
        Total stockholders' equity..........................    106,536         87,098
                                                               --------       --------
                                                               $261,595       $299,832
                                                               ========       ========
</TABLE>

  The Company's Annual Report on Form 10-K should be read in conjunction with
                          these financial statements.
                                        2
<PAGE>   3

                    THE PIONEER GROUP, INC. AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                (DOLLARS IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
                                  (UNAUDITED)

<TABLE>
<CAPTION>
                                                      THREE MONTHS ENDED           SIX MONTHS ENDED
                                                           JUNE 30,                    JUNE 30,
                                                   -------------------------   -------------------------
                                                      2000          1999          2000          1999
                                                   -----------   -----------   -----------   -----------
<S>                                                <C>           <C>           <C>           <C>
Revenues and sales:
    Investment management fees...................  $    38,560   $    36,384   $    77,953   $    71,659
    Underwriting commissions and distribution
       fees......................................        1,813         3,979         4,905         8,069
    Shareholder services fees....................       10,772        10,825        21,880        21,910
    Revenues from brokerage activities...........           --           655            --           870
    Trustee fees and other income................        5,883         7,514        11,936        14,608
                                                   -----------   -----------   -----------   -----------
    Revenues from financial services
       businesses................................       57,028        59,357       116,674       117,116
    Timber sales.................................        5,327         4,276         5,327         4,276
                                                   -----------   -----------   -----------   -----------
         Total revenues and sales................       62,355        63,633       122,001       121,392
                                                   -----------   -----------   -----------   -----------
Costs and expenses:
    Management, distribution, shareholder service
       and administrative expenses...............       55,861        49,718       107,058        99,641
    Timber operating costs and expenses..........        7,153         4,709         8,705         5,071
                                                   -----------   -----------   -----------   -----------
         Total costs and expenses................       63,014        54,427       115,763       104,712
                                                   -----------   -----------   -----------   -----------
Other (income) expense:
    Reduction in carrying value of timber
       assets....................................           --            --        15,300            --
    Unrealized and realized (gains) losses on
       venture capital and marketable securities
       investments, net..........................         (632)         (410)       (2,181)        2,882
    Equity in losses of affiliated companies.....          860         5,167         2,092         7,635
    Interest expense.............................          495         1,635         2,362         3,862
                                                   -----------   -----------   -----------   -----------
         Total other (income) expense............          723         6,392        17,573        14,379
                                                   -----------   -----------   -----------   -----------
Income (loss) from continuing operations before
  provision for income taxes and minority
  interest.......................................       (1,382)        2,814       (11,335)        2,301
                                                   -----------   -----------   -----------   -----------
Provision (benefit) for income taxes.............           72         3,093       (12,095)        3,768
                                                   -----------   -----------   -----------   -----------
Income (loss) from continuing operations before
  minority interest..............................       (1,454)         (279)          760        (1,467)
                                                   -----------   -----------   -----------   -----------
Minority interest................................          118            98           274         1,314
                                                   -----------   -----------   -----------   -----------
Net income (loss) from continuing operations
  before cumulative effect of change in
  accounting principle...........................       (1,572)         (377)          486        (2,781)
Net income (loss) from discontinued operations...       12,878       (24,794)       12,878       (30,838)
Cumulative effect of change in accounting
  principle, (start-up costs, net of income taxes
  of $261).......................................           --            --            --       (12,112)
                                                   -----------   -----------   -----------   -----------
Net income (loss)................................  $    11,306   $   (25,171)  $    13,364   $   (45,731)
                                                   ===========   ===========   ===========   ===========
Basic earnings (loss) per share:
    Continuing operations........................  $     (0.06)  $     (0.01)  $      0.02   $     (0.11)
    Discontinued operations......................         0.49         (0.96)         0.49         (1.19)
    Cumulative effect of change in accounting
       principle.................................           --            --            --         (0.47)
                                                   -----------   -----------   -----------   -----------
         Total basic earnings (loss) per share...  $      0.43   $     (0.97)  $      0.51   $     (1.77)
                                                   ===========   ===========   ===========   ===========
Diluted earnings (loss) per share:
    Continuing operations........................  $     (0.06)  $     (0.01)  $      0.02   $     (0.11)
    Discontinued operations......................         0.49         (0.96)         0.48         (1.19)
    Cumulative effect of change in accounting
       principle.................................           --            --            --         (0.47)
                                                   -----------   -----------   -----------   -----------
         Total diluted earnings (loss) per
           share.................................  $      0.43   $     (0.97)  $      0.50   $     (1.77)
                                                   ===========   ===========   ===========   ===========
Dividends per share..............................           --            --            --            --
                                                   ===========   ===========   ===========   ===========
Basic shares outstanding.........................   26,274,000    25,885,000    26,242,000    25,838,000
                                                   ===========   ===========   ===========   ===========
Diluted shares outstanding.......................   26,274,000    25,885,000    26,869,000    25,838,000
                                                   ===========   ===========   ===========   ===========
</TABLE>

  The Company's Annual Report on Form 10-K should be read in conjunction with
                          these financial statements.
                                        3
<PAGE>   4

                    THE PIONEER GROUP, INC. AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (DOLLARS IN THOUSANDS)
                                  (UNAUDITED)

<TABLE>
<CAPTION>
                                                                SIX MONTHS ENDED
                                                                    JUNE 30,
                                                              --------------------
                                                                2000        1999
                                                              --------    --------
<S>                                                           <C>         <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
 Net income (loss)..........................................  $ 13,364    $(45,731)
 Less net income (loss) of discontinued operations..........    12,878     (30,838)
 Less cumulative effect of change in accounting principle...        --     (12,112)
                                                              --------    --------
 Net income (loss) from continuing operations...............  $    486    $ (2,781)
 Adjustments to reconcile net income (loss) to net cash
   provided by (used in) operating activities:
   Depreciation and amortization............................     7,511       8,744
   Reduction in carrying value of timber assets.............    15,300          --
   Unrealized and realized (gains) losses on venture
     capital, marketable securities, and long term
     investments, net.......................................    (2,181)      2,882
   Equity in losses of affiliated companies.................     2,092       7,635
   Restricted stock plan expense............................     1,937       1,470
   Deferred income taxes....................................     1,321      (4,165)
   Minority interest........................................       274       1,314
 Changes in operating assets and liabilities:
   Investments in marketable securities, net................    (2,657)        642
   Receivable from securities brokers and dealers for sales
     of mutual fund shares..................................    (4,862)     (3,285)
   Receivables for securities sold..........................       161         444
   Receivables from Pioneer Family of Mutual Funds and
     other..................................................     1,895       1,905
   Timber inventory.........................................       459      (2,390)
   Other current assets.....................................     1,514         555
   Other noncurrent assets..................................     3,395        (619)
   Payable to funds for shares sold.........................     4,867       3,283
   Accrued expenses and accounts payable....................    14,126       8,555
   Brokerage liabilities....................................      (120)     (1,616)
   Accrued income taxes.....................................    (3,505)    (17,717)
                                                              --------    --------
       Total adjustments and changes in operating assets and
       liabilities..........................................    41,527       7,637
                                                              --------    --------
       Net cash provided by continuing operating
       activities...........................................    42,013       4,856
                                                              --------    --------
       Net cash provided by (used in) discontinued operating
       activities...........................................      (486)      2,671
                                                              --------    --------
       Net cash provided by operating activities............    41,527       7,527
                                                              --------    --------
CASH FLOWS FROM INVESTING ACTIVITIES:
 Additions to furniture, equipment and leasehold
   improvements.............................................    (2,311)     (3,628)
 Building...................................................      (290)        408
 Long-term venture capital investments......................    (1,082)       (884)
 Proceeds from sale of long-term venture capital
   investments..............................................     1,336         909
 Proceeds from sale of domestic venture capital
   operations...............................................        --      34,945
 Purchase of timber equipment and facilities................      (429)     (1,597)
 Other investments..........................................       227        (502)
 Cost of acquisition in excess of net assets acquired.......      (250)        (43)
 Deconsolidation of pension company subsidiary..............        --     (10,070)
 Purchase of long-term investments..........................    (2,411)         --
 Proceeds from sale of long-term investments................     2,589         342
                                                              --------    --------
       Net cash provided by (used in) continuing investing
       activities...........................................    (2,621)     19,880
                                                              --------    --------
       Net cash used in investing activities, discontinued
       operations...........................................        --      (4,006)
                                                              --------    --------
       Net cash provided by (used in) investing
       activities...........................................    (2,621)     15,874
                                                              --------    --------
CASH FLOWS FROM FINANCING ACTIVITIES:
 Liquidation of venture capital partnership.................        --      (1,972)
 Distributions to limited partners of venture capital
   subsidiary...............................................        --      (1,288)
 Sale of stock by subsidiary................................        --         555
 Employee stock purchase plan...............................       269         349
 Exercise of stock options..................................     3,391         782
 Restricted stock plan award................................        23          16
 Repayments of revolving credit agreement borrowings........   (40,000)    (30,000)
 Repayments of notes payable................................      (682)     (4,928)
 Reclassification of restricted cash........................      (749)        807
                                                              --------    --------
       Net cash used in continuing financing activities.....   (37,748)    (35,679)
                                                              --------    --------
       Net cash provided by (used in) financing activities,
       discontinued operations..............................     7,573      (2,403)
                                                              --------    --------
       Net cash used in financing activities................   (30,175)    (38,082)
                                                              --------    --------
EFFECT OF FOREIGN CURRENCY EXCHANGE RATE CHANGES ON CASH AND
 CASH EQUIVALENTS...........................................      (366)       (234)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS........     8,365     (14,915)
                                                              --------    --------
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD............    36,740      44,212
                                                              --------    --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD..................  $ 45,105    $ 29,297
                                                              ========    ========
</TABLE>

  The Company's Annual Report on Form 10-K should be read in conjunction with
                          these financial statements.
                                        4
<PAGE>   5

                    THE PIONEER GROUP, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
                                 JUNE 30, 2000

NOTE 1 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     The accounting and reporting policies of the Company conform to generally
accepted accounting principles. The Company has not changed any of its principal
accounting policies from those stated in the Annual Report on Form 10-K for the
year ended December 31, 1999. The footnotes to the financial statements reported
in the 1999 Annual Report on Form 10-K are incorporated herein by reference,
except to the extent that any such footnote is updated by the following:

     Certain reclassifications have been made to the accompanying 1999
consolidated financial statements to conform with the 2000 presentation.

     During the first quarter of 1999, the Company adopted the provisions of the
American Institute of Certified Public Accountants (the "AICPA") SOP 98-5,
"Reporting on the Costs of Start-Up Activities." SOP 98-5 requires that costs of
start-up activities be expensed as incurred. The Company had capitalized certain
pre-operating costs associated with its financial services operations and its
natural resource operations. Adoption of SOP 98-5 resulted in write-offs of
$12.1 million, or $0.47 per share, which is reflected in the accompanying
consolidated financial statements as a change in accounting principle.

     In the second quarter of 1999, the Company sold 30% of its Polish pension
company subsidiary for $20 million. In connection with the sale, the Company
deconsolidated the Polish pension company subsidiary as control is shared. The
Company accounted for its investment in the pension company under the equity
method retroactive to January 1, 1999. The effect of this transaction is
reflected in the accompanying Consolidated Statements of Cash Flows as
deconsolidation of pension company subsidiary.

     Interest paid was $2,559,000 and $5,437,000 for the six months ended June
30, 2000 and 1999, respectively. Income taxes refunded were $16,619,000 for the
six months ended June 30, 2000. Income taxes paid were $22,263,000 for the six
months ended June 30, 1999.

                                        5
<PAGE>   6

     NOTE 2 -- EARNINGS PER SHARE

     The following table details the calculation of basic and diluted earnings
per share ("EPS"). Basic EPS is computed by dividing reported earnings available
to stockholders by weighted average shares outstanding not including
contingently issuable shares. Diluted EPS includes the effect of the
contingently issuable shares and other common stock equivalents, if not
antidilutive.

<TABLE>
<CAPTION>
                                                                  NET                 EARNINGS/
                                                                INCOME/                (LOSS)
                                                                (LOSS)      SHARES    PER SHARE
                                                               ---------    ------    ---------
                                                               (DOLLARS AND SHARES IN THOUSANDS
                                                                  EXCEPT PER SHARE AMOUNTS)
<S>                                                            <C>          <C>       <C>
FOR THE THREE MONTHS ENDED 6/30/00
Basic earnings per share calculation:
Continuing operations......................................    $  (1,572)   26,274     $(0.06)
Discontinued operations....................................    $  12,878    26,274     $ 0.49
                                                               ---------    ------     ------
          Total............................................    $  11,306    26,274     $ 0.43
                                                               =========    ======     ======
Options....................................................                     --
Restricted stock...........................................                     --
Diluted earnings per share calculation:
Continuing operations......................................    $  (1,572)   26,274     $(0.06)
Discontinued operations....................................    $  12,878    26,274     $ 0.49
                                                               ---------    ------     ------
          Total............................................    $  11,306    26,274     $ 0.43
                                                               =========    ======     ======

FOR THE THREE MONTHS ENDED 6/30/99
Basic earnings per share calculation:
Continuing operations......................................    $    (377)   25,885     $(0.01)
Discontinued operations....................................    $ (24,794)   25,885     $(0.96)
                                                               ---------    ------     ------
          Total............................................    $ (25,171)   25,885     $(0.97)
                                                               =========    ======     ======
Options....................................................                     --
Restricted stock...........................................                     --
Diluted earnings per share calculation:
Continuing operations......................................    $    (377)   25,885     $(0.01)
Discontinued operations....................................    $ (24,794)   25,885     $(0.96)
                                                               ---------    ------     ------
          Total............................................    $ (25,171)   25,885     $(0.97)
                                                               =========    ======     ======

FOR THE SIX MONTHS ENDED 6/30/00
Basic earnings per share calculation:
Continuing operations......................................    $     486    26,242     $ 0.02
Discontinued operations....................................    $  12,878    26,242     $ 0.49
                                                               ---------    ------     ------
          Total............................................    $  13,364    26,242     $ 0.51
                                                               =========    ======     ======
Options....................................................                    490
Restricted stock...........................................                    137
Diluted earnings per share calculation:
Continuing operations......................................    $     486    26,869     $ 0.02
Discontinued operations....................................    $  12,878    26,869     $ 0.48
                                                               ---------    ------     ------
          Total............................................    $  13,364    26,869     $ 0.50
                                                               =========    ======     ======
</TABLE>

                                        6
<PAGE>   7

<TABLE>
<CAPTION>
                                                                  NET                 EARNINGS/
                                                                INCOME/                (LOSS)
                                                                (LOSS)      SHARES    PER SHARE
                                                               ---------    ------    ---------
                                                               (DOLLARS AND SHARES IN THOUSANDS
                                                                  EXCEPT PER SHARE AMOUNTS)
<S>                                                            <C>          <C>       <C>
FOR THE SIX MONTHS ENDED 6/30/99
Basic earnings per share calculation:
Continuing operations......................................    $  (2,781)   25,838     $(0.11)
Discontinued operations....................................    $ (30,838)   25,838     $(1.19)
Cumulative effect of change in accounting principle........    $ (12,112)   25,838     $(0.47)
                                                               ---------    ------     ------
          Total............................................    $ (45,731)   25,838     $(1.77)
                                                               =========    ======     ======
Options....................................................                     --
Restricted stock...........................................                     --
Diluted earnings per share calculation:
Continuing operations......................................    $  (2,781)   25,838     $(0.11)
Discontinued operations....................................    $ (30,838)   25,838     $(1.19)
Cumulative effect of change in accounting principle........    $ (12,112)   25,838     $(0.47)
                                                               ---------    ------     ------
          Total............................................    $ (45,731)   25,838     $(1.77)
                                                               =========    ======     ======
</TABLE>

NOTE 3 -- COMPREHENSIVE INCOME

     SFAS 130 "Reporting Comprehensive Income" establishes standards for the
reporting of comprehensive income and its components. Comprehensive income, as
defined, includes all changes in equity during a period from non-owner sources.
The Company's foreign currency translation adjustments, which are excluded from
net income, are included in comprehensive income. The following table reports
comprehensive income (loss) for the six months ended June 30, 2000 and 1999.

<TABLE>
<CAPTION>
                                                         SIX MONTHS ENDED
                                                             JUNE 30,
                                                      -----------------------
                                                       2000            1999
                                                      -------        --------
                                                      (DOLLARS IN THOUSANDS)
<S>                                                   <C>            <C>
Net income (loss).................................    $13,364        $(45,731)
Other comprehensive expense:
  Foreign currency translation adjustments........       (366)           (679)
                                                      -------        --------
Other comprehensive expense.......................       (366)           (679)
                                                      -------        --------
Comprehensive income (loss).......................    $12,998        $(46,410)
                                                      =======        ========
</TABLE>

NOTE 4 -- NET CAPITAL

     As a broker-dealer, Pioneer Funds Distributor, Inc. ("PFD") is subject to
the Securities and Exchange Commission's regulations and operating guidelines
which, among other things, require PFD to maintain a specified amount of net
capital. Net capital may fluctuate on a daily basis. PFD's net capital, as
computed under Rule 15c3-1, was $1,225,241 at June 30, 2000, which exceeded
required net capital of $250,000 by $975,241.

     PFD is exempt from the reserve requirements of Rule 15c3-3 since its U.S.
broker-dealer transactions are limited to the purchase, sale and redemption of
redeemable securities of registered investment companies. All customer funds are
promptly transmitted, and all securities received in connection with activities
as a broker-dealer are promptly delivered. PFD does not otherwise hold funds or
securities for, or owe money or securities to, customers.

                                        7
<PAGE>   8

NOTE 5 -- NOTES PAYABLE

     Notes payable of the Company exclusive of amounts related to discontinued
operations consist of the following:

<TABLE>
<CAPTION>
                                                              JUNE 30,   DECEMBER 31,
                                                                2000         1999
                                                              --------   ------------
                                                              (DOLLARS IN THOUSANDS)
<S>                                                           <C>        <C>
Revolving credit agreement..................................  $    --      $40,000
Senior note payable to a commercial lender, principal
  payable on August 15, 2004, interest payable at 9.45%.....   20,000       20,000
Note payable to a bank, interest and principal payable
  monthly at the one-month Warsaw Bank rate plus 1.75%
  through August 2002.......................................      213          275
Project financing, guaranteed by OPIC, payable in
  semi-annual installments of $620,000 through December 15,
  2003, interest payable at 9.95%...........................    4,340        4,960
                                                              -------      -------
                                                               24,553       65,235
Less: Current portion.......................................   (1,887)      (1,343)
                                                              -------      -------
                                                              $22,666      $63,892
                                                              =======      =======
</TABLE>

     Maturities of notes payable at June 30, 2000, for each of the next five
years and thereafter are as follows (dollars in thousands):

<TABLE>
<S>                                                             <C>
7/1/00--6/30/01.............................................    $ 1,887
7/1/01--6/30/02.............................................      1,338
7/1/02--6/30/03.............................................      1,257
7/1/03--6/30/04.............................................         71
7/1/04--6/30/05.............................................     20,000
Thereafter..................................................         --
                                                                -------
                                                                $24,553
                                                                =======
</TABLE>

     In 1996, the Company entered into an agreement with a syndicate of
commercial banks for a senior credit facility (the "Credit Facility"). Under the
Credit Facility, the Company borrowed up to $55 million for general corporate
purposes (the "Corporate Revolver"). The Corporate Revolver is payable in full
in March 2001. As of June 30, 2000, the Company had paid down the Corporate
Revolver in its entirety.

     In 1997, the Company entered into a senior note agreement (the "Note
Agreement") with a commercial lender pursuant to which the Company issued to the
lender senior notes in the aggregate amount of $20 million. The restrictions and
financial covenants under the Note Agreement are substantially similar to those
under the Credit Facility.

     For the six months ended June 30, 2000 and 1999, the weighted average
interest rate on the borrowings under the Credit Facility and Note Agreement was
9.49%.

     In May 2000, the Company unwound its remaining $15 million of swaps and
recognized a loss of $85,000 on the transaction. For the six months ended June
30, 2000, the Company incurred losses of $52,000 on its swap terminations. Under
the swap agreements, the Company paid the bank a weighted average fixed rate of
6.90% on the notional principal amount. The bank paid the Company interest on
the notional principal amount at the current variable rate stated under the swap
agreements. The Company incurred approximately $38,000 and $704,000 of interest
expense on its swap agreements during the six months ended June 30, 2000 and
1999, respectively.

                                        8
<PAGE>   9

NOTE 6 -- DISCONTINUED OPERATIONS

     In the second quarter of 1999, the Company reflected the gold mining
segment as a discontinued operation. The gold mining operations consist of
Pioneer Goldfields Limited ("PGL"), and its 90% owned Ghanaian operating
subsidiary, Teberebie Goldfields Limited ("TGL"), and Closed Joint-Stock Company
"Tas-Yurjah Mining Company," the Company's majority owned (95%) Russian
subsidiary. The Company engaged the services of an investment banking firm to
sell PGL, including its African exploration rights and its interest in TGL. In
June 2000, the Company sold its gold mining operations in Ghana to a subsidiary
of Ashanti Goldfields Company Limited for $18.8 million, resulting in a net gain
of approximately $11.9 million in the quarter. The terms of the agreement also
include the potential for supplemental cash payments of up to $5 million over
the next five years dependent upon minimum gold prices and production levels.

     As disclosed in prior filings, in the second quarter of 1998, the Company's
majority owned Russian bank suffered significant losses resulting from
unauthorized financial transactions engaged in by the bank's management. As the
result of these occurrences, the Company decided to liquidate its Russian
banking operations. In December 1998, the Company sold its stock in the bank to
an unrelated third party. The Company pursued an insurance claim under a
fidelity bond policy for the losses incurred at the bank prior to the sale.
However, since the likelihood of any potential recovery could not be determined,
no receivable was recorded at the time. In April 2000, the Company settled the
insurance claim and recognized a net gain of approximately $1.0 million, which
is included in discontinued operations.

     The Company also reflected its powdered metals business as a discontinued
operation in the second quarter of 1999.

<TABLE>
<CAPTION>
                                                                   SIX MONTHS ENDED
                                                                     JUNE 30, 2000
                                                                -----------------------
                                                                              EARNINGS
                                                                NET INCOME    PER SHARE
                                                                ----------    ---------
                                                                 (DOLLARS IN THOUSANDS
                                                                        EXCEPT
                                                                  PER SHARE AMOUNTS)
<S>                                                             <C>           <C>
Gain on insurance settlement, net of taxes of $645..........     $  1,029      $ 0.04
Gain on sale of gold mining operations, net of taxes of
  $1,800....................................................       11,849        0.44
                                                                 --------      ------
          Total gain from discontinued operations...........     $ 12,878      $ 0.48
                                                                 ========      ======
</TABLE>

<TABLE>
<CAPTION>
                                                                  SIX MONTHS ENDED
                                                                    JUNE 30, 1999
                                                                ---------------------
                                                                              LOSS
                                                                NET LOSS    PER SHARE
                                                                --------    ---------
                                                                (DOLLARS IN THOUSANDS
                                                                       EXCEPT
                                                                 PER SHARE AMOUNTS)
<S>                                                             <C>         <C>
Loss from operations of discontinued gold mining segment,
  net of taxes of ($266)....................................    $(11,805)    $(0.46)
Estimated loss on disposal of gold mining segment...........     (17,600)     (0.68)
Loss from operations of discontinued powdered metals
  business, net of taxes of ($166)..........................        (408)     (0.01)
Loss on disposal of powdered metals business................      (1,025)     (0.04)
                                                                --------     ------
Total loss from discontinued operations.....................    $(30,838)    $(1.19)
                                                                ========     ======
</TABLE>

     The estimated loss of $17.6 million for the gold mining segment was based
on an assessment of asset values at the time. An additional loss reserve of
approximately $36.0 million was recorded in the third quarter of 1999 to reflect
a refinement of the asset values based on preliminary offers received during
that quarter.

                                        9
<PAGE>   10

     The following is an unaudited summary of the results of discontinued gold
mining operations for the six months ended June 30, 2000 and 1999, respectively:

<TABLE>
<CAPTION>
                                                        SIX MONTHS ENDED   SIX MONTHS ENDED
                                                         JUNE 30, 2000      JUNE 30, 1999
                                                        ----------------   ----------------
                                                              (DOLLARS IN THOUSANDS)
<S>                                                     <C>                <C>
Revenues from gold mining activities..................        $ --             $ 37,182
Loss before income taxes and minority interest........          --              (13,191)
Income tax benefit....................................          --                 (266)
                                                              ----             --------
Loss from discontinued operations before minority
  interest............................................          --              (12,925)
                                                              ----             --------
Minority interest.....................................          --               (1,120)
                                                              ----             --------
Loss from discontinued operations.....................        $ --             $(11,805)
                                                              ====             ========
</TABLE>

     The results of discontinued gold mining operations for the six months ended
June 30, 1999 include an allocation of directly attributable corporate interest
expense of $814,000. No corporate interest expense was allocated for the six
months ended June 30, 2000. Interest had been previously allocated based upon
the intercompany financing provided to the gold mining operations.

NOTE 7 -- PENDING MERGER

     On May 14, 2000, the Company entered into a definitive agreement to merge
with a wholly owned subsidiary of UniCredito Italiano S.p.A. ("UniCredito").
Under the terms of the merger agreement, UniCredito will acquire all of the
Company's outstanding shares for $43.50 cash per share, or a total of
approximately $1.2 billion. A special meeting of the Company's stockholders is
scheduled for September 20, 2000 at which the Company's stockholders will vote
upon the proposal to approve and adopt the merger agreement and the merger of
the Company with UniCredito. Prior to the close of the merger, the Company will
distribute to its stockholders 100% of the Company's ownership interest in its
Russian financial services operations, natural resource businesses, and its
interest in the venture capital and real estate operations.

NOTE 8 -- FINANCIAL INFORMATION BY BUSINESS SEGMENT

     Pursuant to SFAS 131, "Disclosures about Segments of an Enterprise and
Related Information," the Company presents segment information using the
management approach. The management approach is based on the way that management
organizes the segments within a Company for making operating decisions and
assessing performance. The Company's operating segments are organized around
services and products provided, as well as geographic regions. The intersegment
transactions are for management services and the secondment of employees. These
transactions are generally priced on a cost or cost plus basis.

                                       10
<PAGE>   11

                    THE PIONEER GROUP, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
                                 JUNE 30, 2000

NOTE 8 -- FINANCIAL INFORMATION BY BUSINESS SEGMENT (CONTINUED)

     The following details selected financial data by business segment and
geographic region for continuing operations (dollars in thousands):
<TABLE>
<CAPTION>

                                                               PIONEER                   -SUBTOTAL-
                                                   INTERNATIONAL FINANCIAL SERVICES        PIONEER
                                     PIONEER     ------------------------------------   INTERNATIONAL
                                    INVESTMENT                        CZECH               FINANCIAL
                                    MANAGEMENT   RUSSIA    POLAND    REPUBLIC   ASIA      SERVICES
                                    ----------   -------   -------   --------   -----   -------------
<S>                                 <C>          <C>       <C>       <C>        <C>     <C>
SIX MONTHS ENDED JUNE 30, 2000
Gross revenues and sales..........   $103,595    $ 4,146   $ 6,042    $2,321    $  --      $12,509
                                     ========    =======   =======    ======    =====      =======
Intersegment eliminations.........   $   (629)   $    --   $   (11)   $   (3)   $  --      $   (14)
                                     ========    =======   =======    ======    =====      =======
Net revenues and sales............   $102,966    $ 4,146   $ 6,031    $2,318    $  --      $12,495
                                     ========    =======   =======    ======    =====      =======
Income (loss) before income taxes
  and minority interest...........   $ 16,937    $ 1,499   $(2,811)   $  380    $(361)     $(1,293)
                                     ========    =======   =======    ======    =====      =======
Income taxes......................   $  5,295    $ 1,707   $   225    $ (173)   $(127)     $ 1,632
                                     ========    =======   =======    ======    =====      =======
Minority interest.................   $     --    $   866   $    --    $   --    $  --      $   866
                                     ========    =======   =======    ======    =====      =======
Net income (loss).................   $ 11,642    $(1,074)  $(3,036)   $  553    $(234)     $(3,791)
                                     ========    =======   =======    ======    =====      =======
Depreciation and amortization.....   $  6,762    $   465   $   238    $   39    $  --      $   742
                                     ========    =======   =======    ======    =====      =======
Interest expense..................   $     --    $    --   $    26    $   --    $  --      $    26
                                     ========    =======   =======    ======    =====      =======
Capital expenditures..............   $  2,538    $    40   $    --    $   30    $  --      $    70
                                     ========    =======   =======    ======    =====      =======
Gross identifiable assets at June
  30, 2000........................   $201,944    $41,865   $ 5,818    $2,080    $  --      $49,763
                                     ========    =======   =======    ======    =====      =======
Intersegment eliminations.........   $(73,866)   $   (97)  $    --    $   --    $  --      $   (97)
                                     ========    =======   =======    ======    =====      =======
Net identifiable assets at June
  30, 2000........................   $128,078    $41,768   $ 5,818    $2,080    $  --      $49,666
                                     ========    =======   =======    ======    =====      =======

<CAPTION>
                                     PIONEER GLOBAL INVESTMENTS
                                    -----------------------------
                                               CENT.&
                                                EAST.                -SUBTOTAL-
                                      REAL     EUROPE                 PIONEER
                                     ESTATE    VENTURE   RUSSIAN       GLOBAL
                                    SERVICES   CAPITAL    TIMBER    INVESTMENTS     OTHER     TOTAL
                                    --------   -------   --------   ------------   -------   --------
<S>                                 <C>        <C>       <C>        <C>            <C>       <C>
SIX MONTHS ENDED JUNE 30, 2000
Gross revenues and sales..........  $   907    $   446   $  5,327     $  6,680     $ 2,639   $125,423
                                    =======    =======   ========     ========     =======   ========
Intersegment eliminations.........  $    --    $  (140)  $     --     $   (140)    $(2,639)  $ (3,422)
                                    =======    =======   ========     ========     =======   ========
Net revenues and sales............  $   907    $   306   $  5,327     $  6,540     $    --   $122,001
                                    =======    =======   ========     ========     =======   ========
Income (loss) before income taxes
  and minority interest...........  $(2,062)   $  (663)  $(19,705)    $(22,430)    $(4,549)  $(11,335)
                                    =======    =======   ========     ========     =======   ========
Income taxes......................  $  (633)   $   (89)  $(16,697)    $(17,419)    $(1,603)  $(12,095)
                                    =======    =======   ========     ========     =======   ========
Minority interest.................  $    --    $  (592)  $     --     $   (592)    $    --   $    274
                                    =======    =======   ========     ========     =======   ========
Net income (loss).................  $(1,429)   $    18   $ (3,008)    $ (4,419)    $(2,946)  $    486
                                    =======    =======   ========     ========     =======   ========
Depreciation and amortization.....  $    61    $     7   $  1,832     $  1,900     $    44   $  9,448
                                    =======    =======   ========     ========     =======   ========
Interest expense..................  $     2    $    --   $    250     $    252     $ 2,084   $  2,362
                                    =======    =======   ========     ========     =======   ========
Capital expenditures..............  $    (2)   $    (5)  $    429     $    422     $    --   $  3,030
                                    =======    =======   ========     ========     =======   ========
Gross identifiable assets at June
  30, 2000........................  $ 1,018    $51,901   $ 20,512     $ 73,431     $12,253   $337,391
                                    =======    =======   ========     ========     =======   ========
Intersegment eliminations.........  $    --    $  (419)  $     --     $   (419)    $(4,052)  $(78,434)
                                    =======    =======   ========     ========     =======   ========
Net identifiable assets at June
  30, 2000........................  $ 1,018    $51,482   $ 20,512     $ 73,012     $ 8,201   $258,957
                                    =======    =======   ========     ========     =======   ========
</TABLE>

                                       11
<PAGE>   12

                    THE PIONEER GROUP, INC. AND SUBSIDIARIES
      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) - (CONTINUED)
                                 JUNE 30, 2000
<TABLE>
<CAPTION>

                                                                PIONEER                   -SUBTOTAL-
                                                    INTERNATIONAL FINANCIAL SERVICES        PIONEER
                                      PIONEER     ------------------------------------   INTERNATIONAL
                                     INVESTMENT                        CZECH               FINANCIAL
                                     MANAGEMENT   RUSSIA    POLAND    REPUBLIC   ASIA      SERVICES
                                     ----------   -------   -------   --------   -----   -------------
<S>                                  <C>          <C>       <C>       <C>        <C>     <C>
SIX MONTHS ENDED JUNE 30, 1999
Gross revenues and sales...........  $ 104,631    $ 6,970   $ 8,036    $ 738     $  --      $15,744
                                     =========    =======   =======    =====     =====      =======
Intersegment eliminations..........  $  (3,544)   $  (512)  $  (532)   $  --     $  --      $(1,044)
                                     =========    =======   =======    =====     =====      =======
Net revenues and sales.............  $ 101,087    $ 6,458   $ 7,504    $ 738     $  --      $14,700
                                     =========    =======   =======    =====     =====      =======
Income (loss) before income taxes,
  minority interest and cumulative
  effect of accounting change......  $  26,686    $  (418)  $(8,503)   $(492)    $(300)     $(9,713)
                                     =========    =======   =======    =====     =====      =======
Income taxes.......................  $   9,116    $  (598)  $   (88)   $(119)    $(105)     $  (910)
                                     =========    =======   =======    =====     =====      =======
Minority interest..................  $      --    $   485   $   (88)   $  --     $  --      $   397
                                     =========    =======   =======    =====     =====      =======
Net income (loss) from continuing
  operations before cumulative
  effect of accounting change......  $  17,570    $  (305)  $(8,327)   $(373)    $(195)     $(9,200)
                                     =========    =======   =======    =====     =====      =======
Cumulative effect of change in
  accounting principle.............  $    (205)   $  (521)  $    --    $ (14)    $  --      $  (535)
                                     =========    =======   =======    =====     =====      =======
Net income (loss)..................  $  17,365    $  (826)  $(8,327)   $(387)    $(195)     $(9,735)
                                     =========    =======   =======    =====     =====      =======
Depreciation and amortization......  $   6,550    $ 1,397   $   572    $  51     $  --      $ 2,020
                                     =========    =======   =======    =====     =====      =======
Interest expense...................  $      --    $    10   $    31    $  --     $  --      $    41
                                     =========    =======   =======    =====     =====      =======
Capital expenditures...............  $   3,286    $    70   $    --    $  --     $  --      $    70
                                     =========    =======   =======    =====     =====      =======
Gross identifiable assets at June
  30, 1999.........................  $ 275,320    $46,135   $10,849    $ 756     $  --      $57,740
                                     =========    =======   =======    =====     =====      =======
Intersegment eliminations..........  $(160,602)   $  (375)  $    --    $  --     $  --      $  (375)
                                     =========    =======   =======    =====     =====      =======
Net identifiable assets at June 30,
  1999.............................  $ 114,718    $45,760   $10,849    $ 756     $  --      $57,365
                                     =========    =======   =======    =====     =====      =======

<CAPTION>
                                            PIONEER GLOBAL INVESTMENTS
                                     ----------------------------------------
                                                           CENT. &
                                                            EAST.                -SUBTOTAL-
                                       REAL       U.S.     EUROPE                 PIONEER
                                      ESTATE    VENTURE    VENTURE   RUSSIAN       GLOBAL
                                     SERVICES   CAPITAL    CAPITAL    TIMBER    INVESTMENTS     OTHER      TOTAL
                                     --------   --------   -------   --------   ------------   -------   ---------
<S>                                  <C>        <C>        <C>       <C>        <C>            <C>       <C>
SIX MONTHS ENDED JUNE 30, 1999
Gross revenues and sales...........  $   811    $    109   $   536   $  4,276     $  5,732     $ 5,533   $ 131,640
                                     =======    ========   =======   ========     ========     =======   =========
Intersegment eliminations..........  $    --    $     --   $  (127)  $     --     $   (127)    $(5,533)  $ (10,248)
                                     =======    ========   =======   ========     ========     =======   =========
Net revenues and sales.............  $   811    $    109   $   409   $  4,276     $  5,605     $    --   $ 121,392
                                     =======    ========   =======   ========     ========     =======   =========
Income (loss) before income taxes,
  minority interest and cumulative
  effect of accounting change......  $(2,536)   $ (4,151)  $  (779)  $ (3,306)    $(10,772)    $(3,900)  $   2,301
                                     =======    ========   =======   ========     ========     =======   =========
Income taxes.......................  $  (622)   $ (1,867)  $   (25)  $   (597)    $ (3,111)    $(1,327)  $   3,768
                                     =======    ========   =======   ========     ========     =======   =========
Minority interest..................  $    --    $  1,374   $  (457)  $     --     $    917     $    --   $   1,314
                                     =======    ========   =======   ========     ========     =======   =========
Net income (loss) from continuing
  operations before cumulative
  effect of accounting change......  $(1,914)   $ (3,658)  $  (297)  $ (2,709)    $ (8,578)    $(2,573)  $  (2,781)
                                     =======    ========   =======   ========     ========     =======   =========
Cumulative effect of change in
  accounting principle.............  $  (115)   $   (183)  $  (382)  $(10,692)    $(11,372)    $    --   $ (12,112)
                                     =======    ========   =======   ========     ========     =======   =========
Net income (loss)..................  $(2,029)   $ (3,841)  $  (679)  $(13,401)    $(19,950)    $(2,573)  $ (14,893)
                                     =======    ========   =======   ========     ========     =======   =========
Depreciation and amortization......  $    66    $   (129)  $   148   $  1,494     $  1,579     $    65   $  10,214
                                     =======    ========   =======   ========     ========     =======   =========
Interest expense...................  $     9    $    234   $    --   $    685     $    928     $ 2,893   $   3,862
                                     =======    ========   =======   ========     ========     =======   =========
Capital expenditures...............  $  (145)   $     --   $     3   $  1,597     $  1,455     $     6   $   4,817
                                     =======    ========   =======   ========     ========     =======   =========
Gross identifiable assets at June
  30, 1999.........................  $ 1,652    $ 24,616   $50,377   $ 43,376     $120,021     $14,823   $ 467,904
                                     =======    ========   =======   ========     ========     =======   =========
Intersegment eliminations..........  $    --    $(23,564)  $    --   $     --     $(23,564)    $(5,461)  $(190,002)
                                     =======    ========   =======   ========     ========     =======   =========
Net identifiable assets at June 30,
  1999.............................  $ 1,652    $  1,052   $50,377   $ 43,376     $ 96,457     $ 9,362   $ 277,902
                                     =======    ========   =======   ========     ========     =======   =========
</TABLE>

                                       12
<PAGE>   13

ITEM 2.  MANAGEMENT'S DISCUSSION & ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

                                    OVERVIEW

     The consolidated financial statements of The Pioneer Group, Inc. (the
"Company") include the Company's three strategic business units. Pioneer
Investment Management includes the investment management, marketing,
distribution and servicing of the Company's mutual funds based in the United
States and offshore funds based in Ireland. This business unit also provides
investment management services for institutional investors. Pioneer
International Financial Services includes the Company's investment management
and financial services businesses in Poland, the Czech Republic, Russia and
India. Pioneer Global Investments includes the Company's worldwide venture
capital, real estate and timber operations. The Company decided to dispose of
its gold mining operations in the second quarter of 1999 and, as such, reported
these as discontinued operations. In June 2000, the Company sold its gold mining
operations in Ghana to an unrelated third party. Management's Discussion and
Analysis of Financial Condition and Results of Operations is presented in three
sections: Results of Operations, Liquidity and Capital Resources -- General, and
Future Operating Results.

     In the first quarter of 2000, the Board of Directors engaged the services
of two investment banking firms to provide advice on enhancing shareholder
value. At a special meeting of the Board held on March 2, 2000, the investment
bankers presented their evaluations of several alternatives, including a
possible sale of the Company. Subsequently, numerous third parties expressed
interest in purchasing the Company in the form of non-binding proposals, and
after executing the appropriate confidentiality agreements, several completed
due diligence. Four of the parties submitted bids. On May 10, 2000, the Board
agreed that a definitive merger agreement should be negotiated with UniCredito
Italiano S.p.A., an Italian banking group based in Milan, Italy. An agreement
was approved by the Board and entered into by the Company on May 14, 2000. The
agreement is subject to shareholder, and other, approvals.

     As a result of this process, as well as the proxy contest initiated by a
dissident shareholder (and subsequently withdrawn after the merger agreement was
reached), the Company's results from operations reflect several unusual and
temporary items. For example, mutual fund sales slowed and redemptions increased
while many of the intermediaries who sell the Company's fund shares awaited the
outcome of this process. The Company's most valuable assets are its
relationships with clients and the employees who provide services to these
clients. Accordingly, the Company increased its advertising and other sales
promotional expenses and entered into various employee retention arrangements to
maintain the value of these assets. Finally, these events have resulted in
higher legal, proxy solicitation, investment banker, and other related expenses.

                             RESULTS OF OPERATIONS

CONSOLIDATED OPERATIONS

     The Company reported second quarter 2000 income of $11.3 million, or $0.43
per share, consisting of losses from continuing operations of $1.6 million, or
$0.06 per share, and income from discontinued gold mining and Russian banking
operations of $12.9 million, or $0.49 per share. During the second quarter of
1999, the Company reported a loss of $25.2 million, or $0.97 per share,
consisting of losses from continuing operations of $0.4 million, or $0.01 per
share, and losses from discontinued gold mining and powdered metals operations
of $24.8 million, or $0.96 per share. Revenues from continuing operations were
$62.4 million in the second quarter of 2000 compared to $63.6 million in the
second quarter of 1999.

     The Company reported first half 2000 income of $13.4 million, or $0.50 per
share, including income from continuing operations of $0.5 million, or $0.02 per
share, and income from discontinued gold mining and Russian banking operations
of $12.9 million, or $0.48 per share. During the six months ended June 30, 1999,
the Company reported a loss of $45.7 million, or $1.77 per share, including
losses from continuing operations of $2.8 million, or $0.11 per share, and
losses from discontinued gold mining and powdered metals operations of $30.8
million, or $1.19 per share. Included in the loss from continuing operations is
the one-time $3.4

                                       13
<PAGE>   14

million first quarter 1999 loss on the sale of the Company's U.S. venture
capital operations. The results also included the impact of the first quarter
write-off of unamortized capitalized start-up costs of $12.1 million, or $0.47
per share, as a result of the required change in accounting principle. Revenues
from continuing operations were $122.0 million in the first half of 2000 and
$121.4 million in the first half of 1999.

     Worldwide assets under management were approximately $23.5 billion at June
30, 2000, compared to $24.5 billion at December 31, 1999.

     The following table details revenues and net income (loss) by business
segment for the three months and six months ended June 30, 2000 and 1999,
respectively.

                         REVENUES AND NET INCOME (LOSS)
                             (DOLLARS IN MILLIONS)

<TABLE>
<CAPTION>
                                                                  NET INCOME                         NET INCOME
                                                  REVENUES          (LOSS)          REVENUES           (LOSS)
                                                -------------   --------------   ---------------   --------------
                                                THREE MONTHS     THREE MONTHS      SIX MONTHS        SIX MONTHS
                                                    ENDED           ENDED             ENDED            ENDED
                                                  JUNE 30,         JUNE 30,         JUNE 30,          JUNE 30,
                                                -------------   --------------   ---------------   --------------
BUSINESS SEGMENT                                2000    1999    2000     1999     2000     1999    2000     1999
----------------                                -----   -----   -----   ------   ------   ------   -----   ------
<S>                                             <C>     <C>     <C>     <C>      <C>      <C>      <C>     <C>
Pioneer Investment Management.................  $50.3   $51.4   $ 4.2   $  9.4   $103.0   $101.0   $11.6   $ 17.5
                                                -----   -----   -----   ------   ------   ------   -----   ------
Pioneer International Financial Services:
  Russia......................................    2.1     3.2    (0.7)    (0.1)     4.1      6.5    (1.1)    (0.3)
  Central and Eastern Europe..................    4.1     4.1    (1.3)    (5.7)     8.4      8.3    (2.5)    (8.7)
  Asia........................................     --      --    (0.1)    (0.1)      --       --    (0.2)    (0.2)
                                                -----   -----   -----   ------   ------   ------   -----   ------
                                                  6.2     7.3    (2.1)    (5.9)    12.5     14.8    (3.8)    (9.2)
                                                -----   -----   -----   ------   ------   ------   -----   ------
Pioneer Global Investments:
  Venture Capital.............................    0.2     0.2    (0.1)    (0.1)     0.3      0.5      --     (3.9)
  Real Estate.................................    0.4     0.4    (0.9)    (0.9)     0.9      0.8    (1.4)    (1.9)
  Timber......................................    5.3     4.3    (1.1)    (1.8)     5.3      4.3    (3.0)    (2.7)
                                                -----   -----   -----   ------   ------   ------   -----   ------
                                                  5.9     4.9    (2.1)    (2.8)     6.5      5.6    (4.4)    (8.5)
                                                -----   -----   -----   ------   ------   ------   -----   ------
Interest Expense and Other Expenses...........     --      --    (1.6)    (1.1)      --       --    (2.9)    (2.6)
                                                -----   -----   -----   ------   ------   ------   -----   ------
Total From Continuing Operations Before
  Accounting Change...........................  $62.4   $63.6   $(1.6)  $ (0.4)  $122.0   $121.4   $ 0.5   $ (2.8)
                                                -----   -----   -----   ------   ------   ------   -----   ------
Discontinued Operations.......................     --      --    12.9    (24.8)      --       --    12.9    (30.8)
                                                -----   -----   -----   ------   ------   ------   -----   ------
Cumulative Effect of Change in Accounting
  Principle (Start-up Costs)..................     --      --      --       --       --       --      --    (12.1)
                                                -----   -----   -----   ------   ------   ------   -----   ------
         Totals...............................  $62.4   $63.6   $11.3   $(25.2)  $122.0   $121.4   $13.4   $(45.7)
                                                =====   =====   =====   ======   ======   ======   =====   ======
</TABLE>

PIONEER INVESTMENT MANAGEMENT

     Pioneer Investment Management ("PIM") recorded second quarter net income of
$4.2 million compared to net income of $9.4 million in the second quarter of
1999. PIM recorded net income of $11.6 million for the six months ended June 30,
2000, compared to $17.5 million for the six months ended June 30, 1999. The $5.9
million earnings decline was attributable to higher labor expenses incurred to
retain key sales and investment management employees in light of the uncertainty
surrounding the sale process of the Company, higher advertising and selling
expenses, and higher costs incurred to expand technology capabilities.

     PIM's assets under management at June 30, 2000 were approximately $23.0
billion compared to $24.1 billion at December 31, 1999. In the second quarter of
2000, sales of U.S. registered mutual funds (including reinvested dividends)
were $0.8 billion, approximately $0.3 billion below sales in the second quarter
of 1999. Net redemptions were approximately $0.5 billion, compared to net sales
of $0.1 billion in the second quarter of 1999. For the six months ended June 30,
2000, sales of U.S. registered mutual funds (including reinvested

                                       14
<PAGE>   15

dividends) were $1.5 billion, approximately $0.5 billion below sales in the
comparable 1999 period. Net redemptions were $1.5 billion, compared to net sales
of $0.1 billion in the first six months of 1999.

     Revenues of $50.3 million in the second quarter of 2000 decreased by $1.1
million. Management fee revenues of $36.4 million increased by $2.0 million,
reflecting a 4.2 basis point increase in average management fees earned in the
quarter. Revenues from underwriting commissions, distribution fees, and
shareholder servicing fees decreased by $2.4 million to $11.3 million, as
increased shareholder service fees partially offset lower distribution fees.
Beginning in March 2000, the Company began reallowing 100% of its share of Class
A share commissions to brokers and dealers as an incentive to increase sales. In
April 2000, the Company initiated a similar program of additional front-end
commission payments (50 basis points) to brokers and dealers to stimulate Class
B share sales. The Company anticipates continuing these incentive programs
through the third quarter of 2000.

     Revenues of $103.0 million in the first six months of 2000 increased by
$2.0 million. Management fee revenues of $73.6 million increased by $5.9
million, reflecting slightly higher average assets under management ($23.3
billion for the six months ended June 30, 2000 compared to $23.1 billion for the
same period ended June 30, 1999) and an increase in the effective management fee
rate earned during the period. Revenues from underwriting commissions,
distribution fees, and shareholder servicing fees decreased by $3.4 million to
$24.1 million, largely due to a decline in sales of Class A shares and lower
distribution fees as 100% of Class A share commissions were reallowed to brokers
and dealers from March through June 2000.

     Costs and expenses increased by $7.0 million in the second quarter of 2000
to $44.3 million. For the six months ended June 30, 2000, costs and expenses of
$85.9 million increased by $11.6 million. The year-to-date increase was
attributable to higher payroll costs ($6.3 million) due to normal merit
increases and higher headcount, coupled with special retention bonuses
associated with the Company's proposed sale. Other expenses also increased by
$5.3 million. A portion of this increase ($3.6 million) related to special
advertising costs and incremental Class B share commissions. The remainder was
largely due to new revenue sharing agreements and higher costs incurred to
expand technology capabilities.

     PIM's effective tax rate for the second quarter of 2000 was 30% compared to
33% in the second quarter of 1999. For the six months ended June 30, 2000, PIM's
effective tax rate was 31% compared to 34% in the first six months of 1999. The
improvement was due to increased profitability at Pioneer Management (Ireland)
Limited, which is taxed at a lower effective rate.

PIONEER INTERNATIONAL FINANCIAL SERVICES

     During the second quarter of 2000, Pioneer International Financial Services
("PIFS") lost $2.1 million on revenues of $6.2 million compared to a loss of
$5.9 million on revenues of $7.3 million in the second quarter of 1999. During
the first half of 2000, PIFS lost $3.8 million on revenues of $12.5 million
compared to a loss of $9.2 million on revenues of $14.8 million for the
corresponding period in 1999.

     PIFS' Central and Eastern European operations lost $1.3 million and $2.5
million for the second quarter and the first half of 2000, respectively. The
losses were largely attributable to the Company's Polish pension company
subsidiary ($0.9 million and $2.1 million, respectively). Central and Eastern
European operations also posted losses for the second quarter ($5.7 million) and
six months ended June 30, 1999 ($8.7 million). Again, the majority of the losses
for the two periods were attributable to the Company's Polish pension company
subsidiary. In April 1999, the Company sold 30% of its Polish pension company
subsidiary to Nationwide Global Holdings, Inc. for $20 million. In addition, the
Company has deconsolidated the Polish pension company subsidiary since control
is shared with Nationwide and has accounted for its investment in the subsidiary
under the equity method retroactive to January 1, 1999.

     PIFS' Russian operations lost $0.7 million for the second quarter 2000 and
$1.1 million for the six months ended June 30, 2000. In contrast, the Russian
operations lost $0.1 million the second quarter 1999 and $0.3 million for the
six months ended June 30, 1999. The increase in year-to-date losses is in part
related to a U.S. tax provision ($1.1 million) that was required due to a
repatriation of earnings ($6.1 million).

                                       15
<PAGE>   16

PIONEER GLOBAL INVESTMENTS

     During the second quarter of 2000, Pioneer Global Investments lost $2.1
million on revenues of $5.9 million compared to losses of $2.8 million on
revenues of $4.9 million in the second quarter of 1999. The $0.7 million
improvement was due primarily to the timber business.

     In the first half of 2000, Pioneer Global Investments lost $4.4 million on
revenues of $6.5 million compared to losses of $8.5 million on revenues of $5.6
million in the first half of 1999. The majority of the $4.1 million improvement
was due to the Central and Eastern European venture capital business, which
reported break even results for the period compared with a $3.9 million loss in
1999. The Company sold its U.S. venture capital operations in the first quarter
of 1999 resulting in a loss of $3.4 million.

     The Company's real estate services operations reported losses of $0.9
million in the second quarters of both 2000 and 1999. Losses for the first half
of 2000 and 1999 were $1.4 million and $1.9 million, respectively. The
improvement of $0.5 million for the first half of 2000 reflects higher revenues
and lower costs associated with the closing of the financing of the Polish Real
Estate Fund.

  Timber Business

     The results of the timber business are substantially attributable to the
operations of Forest-Starma, the Company's indirect wholly owned subsidiary.
Forest-Starma harvests timber in the Khabarovsk Territory of Russia under a
49-year lease comprising 390,100 hectares (approximately 964,000 acres).
Forest-Starma has developed a modern logging camp, including a harbor, from
which it exports timber to markets in the Pacific Rim.

     Results of Operations.  In the second quarter of 2000, the timber business
lost $1.1 million compared to a loss of $1.8 million in the second quarter of
1999. For the six months ended June 30, 2000, the timber business lost $3.0
million compared to a loss of $2.7 million in the corresponding period of 1999.

     The timber segment's operating results for the first half of 2000 also
included both income from U.S. tax benefits of approximately $15.1 million and
the application of those tax benefits to reduce the carrying value of the
Company's timber assets. The income, which is reflected on the Consolidated
Statements of Operations as a credit to tax expense, represented realization in
the U.S. of previously unrecognized foreign losses. In connection with the
realization of the income tax benefits, the Company recorded a corresponding
reduction in the carrying value of timber equipment and facilities and deferred
development costs. The tax benefits were collected in the second quarter of 2000
and used to repay bank debt.

     Timber Production and Sales.  Production during the three and six months
ended June 30, 2000 was approximately 60,000 and 125,000 cubic meters,
respectively. This represents decreases of 17% and 21%, respectively, compared
with corresponding periods in 1999. As a result of lower production due to
unusually adverse weather conditions and earlier-than-expected insect
infestation that damaged the timber inventory during June, Forest-Starma
recorded a $0.8 million lower of cost or market write-down of inventory at the
end of the second quarter of 2000. During the second quarter of 2000,
Forest-Starma shipped 107,000 cubic meters at an average realized price of $50
per cubic meter. In the second quarter of 1999, Forest-Starma shipped 99,000
cubic meters at an average realized price of $43 per cubic meter. There were no
shipments in the first quarters of 2000 and 1999.

     Liquidity and Capital Resources.  Forest-Starma had $4.3 million of
external debt outstanding at June 30, 2000. Management expects to repay the
remainder of this debt by September 2000.

     Recent Developments.  The Company is exploring strategic alternatives with
respect to its interest in the timber business.

                                       16
<PAGE>   17

DISCONTINUED OPERATIONS

     The following table summarizes discontinued operations for the three and
six months ended June 30, 2000 and 1999:

                  INCOME/(LOSSES) FROM DISCONTINUED OPERATIONS
                             (DOLLARS IN MILLIONS)

<TABLE>
<CAPTION>
                                                             THREE MONTHS
                                                                 ENDED         SIX MONTHS ENDED
                                                               JUNE 30,            JUNE 30,
                                                            ---------------    -----------------
                                                            2000      1999      2000      1999
                                                            -----    ------    ------    -------
<S>                                                         <C>      <C>       <C>       <C>
Discontinued gold mining..................................  $11.9    $(23.5)   $11.9     $(29.4)
Discontinued powdered metals..............................     --      (1.3)      --       (1.4)
Discontinued Russian banking..............................    1.0        --      1.0         --
                                                            -----    ------    -----     ------
          Total...........................................  $12.9    $(24.8)   $12.9     $(30.8)
                                                            =====    ======    =====     ======
</TABLE>

  Gold Mining

     During the second quarter of 1999, the Company reflected the gold mining
segment as a discontinued operation. The gold mining segment consists of Pioneer
Goldfields Limited and its 90%-owned Ghanaian operating subsidiary Teberebie
Goldfields Limited, and Closed Joint-Stock Company "Tas-Yurjah Mining Company",
the Company's majority owned (95%) Russian subsidiary. The Company sold its gold
mining operations in Ghana on June 19, 2000.

     Mining operations ceased at the end of 1999 and all processing activities
ceased during the second quarter of 2000. Income from discontinued gold
operations in the first half of 2000 was $11.9 million resulting from the gain
on the sale of the Ghanaian gold mining operations. Losses in the first half of
1999 were $29.4 million, including $11.8 million from first half 1999 operations
and $17.6 million from the estimated loss on the disposition of the gold mining
operations in Ghana. The estimated loss of $17.6 million was based on an
assessment of asset values at the time. An additional loss reserve of
approximately $36.0 million was recorded in the third quarter of 1999 to reflect
a refinement of the asset values based on preliminary offers received during
that quarter.

  Powdered Metals

     The Company sold, for nominal value, its powdered metals operations at the
end of the third quarter of 1999. Losses of $1.3 million for the second quarter
and $1.4 million for the six months ended June 30, 1999 included $1.0 million
from the estimated loss on the disposition of this business, including closing
costs associated with the disposition and a provision for future operating
losses. The actual loss from the disposition was $0.9 million.

  Russian Banking Operations

     The Company sold its stock in its Russian banking operations in December
1998 to an unrelated third party. At the same time, the Company pursued an
insurance claim under a fidelity bond policy for certain losses incurred at the
bank prior to its sale. The insurance claim was settled in April 2000, and the
Company recognized a net gain of approximately $1.0 million.

OTHER

     The Company had net interest expense and other expenses of $1.6 million in
the second quarter of 2000 compared to $1.1 million in the second quarter of
1999. For the six months ended June 30, 2000, net interest and other expenses
were $2.9 million compared to $2.6 million in the first six months of 1999. The
year-to-date increase in expenses resulted from investment banking fees ($1.4
million) relating to the Company's

                                       17
<PAGE>   18

strategic evaluation process that were partially offset by a reduction in
interest expense due to the repayment of the Corporate Revolver in May 2000.

RECENT ACCOUNTING PRONOUNCEMENTS

     In April 1998, the American Institute of Certified Public Accountants
issued Statement of Position 98-5, "Reporting on the Costs of Start-Up
Activities." The new standard, which the Company adopted in the first quarter of
1999, required that entities expense costs of start-up activities as those costs
are incurred. The Company had capitalized certain pre-operating costs in
connection with its natural resource operations and had capitalized certain
organizational costs associated with its financial services operations. In the
first quarter of 1999, as a result of this new standard, the Company recorded a
cumulative effect of a change in accounting principle of approximately $12.1
million related principally to its timber operations.

                   LIQUIDITY AND CAPITAL RESOURCES -- GENERAL

     Liquid assets consisting of cash and marketable securities increased by
$11.9 million during the six months ended June 30, 2000 to $52.5 million. Cash
provided from ongoing operations, combined with tax refunds received, the
exercise of stock options and proceeds from the gold mining sale and the Russian
bank insurance claim, were used to pay off the Company's Corporate Revolver ($40
million).

     The Company believes that it is in sound financial condition, that it has
sufficient liquidity from operations and financing facilities to cover
short-term commitments and contingencies and that it has adequate capital
resources to provide for long-term commitments.

                            FUTURE OPERATING RESULTS

     From time to time, management may make forward-looking statements in this
Quarterly Report, in other documents that we file with the Securities and
Exchange Commission (including those documents incorporated by reference into
the Form 10-K), in press releases or in other public discussions. The Private
Securities Litigation Reform Act of 1995 provides a "safe harbor" for these
statements. For this purpose, a forward-looking statement is any statement that
is not a statement of historical fact. Forward-looking statements include those
about our plans or strategies for our domestic and international financial
services and global investment businesses, our anticipated revenue growth,
changes we expect in the amount or composition of our assets under management,
our anticipated expenses, our liquidity and capital resources, and our
expectations about market conditions. You can identify forward-looking
statements by the words "may," "believes," "anticipates," "plans," "expects,"
"estimates," and other similar expressions. Our forward-looking statements are
based on currently available information and management's expectations of future
results but necessarily involve certain assumptions. We caution readers that our
assumptions involve substantial risks and uncertainties. Consequently, any
forward-looking statement could turn out to be wrong. Many factors could cause
actual results to differ materially from our expectations. Below we describe
some of the important factors that could affect our revenues or results of
operations.

     In May 2000, we announced that we had agreed to be acquired by UniCredito
Italiano S.p.A. The news of this sale has created uncertainty for our mutual
fund shareholders and employees. During this period of uncertainty, we are
subject to the risks of redemptions in our mutual funds, loss of business
opportunities, and difficulty in hiring and retaining quality employees. In
fact, mutual fund sales have slowed and redemptions have increased.
Additionally, the Company has incurred significant expenses in connection with
this process. We cannot guarantee that the uncertainties will not have further
adverse effects on our financial condition and financial results.

     A significant portion of our revenues comes from investment management fees
and underwriting and shareholder services fees. Our success in the investment
management and mutual fund share distribution businesses results primarily from
good investment performance. If our investments perform well, we tend to see
higher sales of shares and lower redemptions of shares. Sales of shares result
in increased assets under management, which, in turn, generate higher management
fees. Good performance also attracts institutional
                                       18
<PAGE>   19

accounts. On the other hand, relatively poor performance tends to cause
decreased sales and increased redemptions and the loss of institutional
accounts. As a result, we can see a corresponding decrease in our revenues. In
addition, economic and market conditions which are beyond our control can affect
investment performance. Also, five of our mutual funds (including the two
largest funds) have management fees that depend upon each fund's performance
relative to the performance of established stock indices. As a result,
management fee revenues may be subject to unexpected volatility.

     The mutual fund industry is intensely competitive and continues to go
through substantial consolidation. Many organizations in this industry are
attempting to sell and service the same clients and customers, not only with
mutual fund investments, but also with other financial service products. Many of
our competitors have more products and product lines to offer, substantially
greater assets under management, better financial resources and higher name
recognition than we do. As a result, we could be at a disadvantage as we try to
market our products to the same customers that our competitors are targeting.

     Our domestic investment management business is primarily dependent upon the
contractual relationships between our U.S. mutual funds and our management
company. If any of these agreements were terminated (for any reason, including a
change of control of the Company) or not renewed on similarly favorable terms,
our revenues and our investment management business would suffer greatly.

     The investment management business is subject to periodic shifts depending
on market conditions and investor preferences. Firms like ours tend to focus on
certain asset classes and certain management styles. Shifting trends in the
investment management industry tend to favor firms that manage particular types
of assets or use particular management styles. As a result, firms need to be
able to adapt to these shifts in order to remain competitive. Historically, we
have focused on "value" investing. We cannot guarantee that we will be
successful as we broaden our asset classes and management styles in order to
adapt to market demands.

     Our investment management operation is subject to extensive regulation in
the United States, including regulation by the Securities and Exchange
Commission and the National Association of Securities Dealers, Inc. Also, we are
subject to the laws of non-U.S. jurisdictions and non-U.S. regulatory agencies
or bodies. If we do not comply with applicable laws or regulations, we could
suffer fines, suspensions of personnel or other sanctions. Certain changes in
laws or regulations or in government policies could have a material adverse
effect on our business.

     We have several operations and investments outside of the U.S., including
the timber operations in the Russian Far East and the financial services
operations in Eastern and Central Europe. Many factors unique to these foreign
locations can have negative effects on our operations and investments there.
Some of these factors are exchange controls, currency fluctuations, taxation,
political and economic instability, ineffective regulatory oversight and laws or
policies of the particular countries in which we have operations. We cannot
guarantee that we will be able to obtain permits, authorizations, regulatory
approvals or agreements to implement plans at our foreign projects in a manner
or within time frames that make these plans economically feasible. Also, we do
not know whether applicable laws or the governing political authorities in the
relevant locations will change unfavorably or whether any such changes cost us
material amounts of money or effort.

     The commercial feasibility of Forest-Starma depends on a number of factors
that we cannot control. Some of these factors are the price of timber, weather
conditions, political stability in Russia and the strength of the Japanese and
Korean economies, which are the primary markets for Forest-Starma's timber.

                                       19
<PAGE>   20

                          PART II -- OTHER INFORMATION

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

     (a) Exhibits: None.

     (b) Reports filed on Form 8-K:

     The Company filed a Form 8-K on May 16, 2000 to report entering into the
Agreement and Plan of Merger dated May 14, 2000 between the Company and
UniCredito Italiano S.p.A. A copy of the agreement was included in the Form 8-K,
as was the Company's press release regarding such agreement and the forms of
Distribution Agreement and Tax Separation Agreement to be entered into in
connection with the agreement.

     The Company filed a Form 8-K on June 27, 2000 to report the consummation of
the sale under the Purchase Agreement dated May 11, 2000 among the Company,
Pioneer Goldfields II Limited, Ashanti Goldfields Company Limited and Ashanti
Goldfields Teberebie Limited.

                                   SIGNATURES

     It is the opinion of management that the financial information contained in
this report reflects all adjustments necessary to a fair statement of results
for the period report, but such results are not necessarily indicative of
results to be expected for the year due to the effect that stock market
fluctuations may have on assets under management. All accounting policies have
been applied consistently with those of prior periods. Such financial
information is subject to year-end adjustments and annual audit by independent
public accountants.

     Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

Dated: August 7, 2000

                                                 THE PIONEER GROUP, INC.

                                                  /s/ ERIC W. RECKARD
                                          --------------------------------------
                                                     Eric W. Reckard
                                                 Executive Vice President
                                          Chief Financial Officer and Treasurer

                                       20
<PAGE>   21

                                 EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT NUMBER                          DESCRIPTION
--------------                          -----------
<C>             <S>
    27.00       Financial Data Schedule.
</TABLE>

                                       21