<PAGE>   1
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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

             [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                  FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2000

                                       OR

             [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934


               FOR THE TRANSITION PERIOD FROM ________ TO _______.

                           COMMISSION FILE NO. 0-19494


                              PAGING NETWORK, INC.
             (Exact name of the Registrant as specified in charter)

           DELAWARE                                          04-2740516
(State or other jurisdiction of                            (I.R.S. Employer
 incorporation or organization)                          Identification Number)

                               14911 QUORUM DRIVE
                               DALLAS, TEXAS 75240
          (Address of principal executive offices, including zip code)

                                 (972) 801-8000
              (Registrant's telephone number, including area code)


     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 12 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        No X
                                       ---       ---

      Indicate the number of shares outstanding of each of the Registrant's
classes of Common Stock, as of the latest practicable date.

            Title                       Shares Outstanding as of August 7, 2000
-----------------------------           ---------------------------------------
Common Stock, $ .01 par value                         104,242,567


     The Company's Common Stock is publicly traded on the Over-The-Counter
Market under the symbol "PAGE".


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<PAGE>   2



                         PART I - FINANCIAL INFORMATION



ITEM 1.  FINANCIAL STATEMENTS.


                          Index to Financial Statements

<TABLE>
<CAPTION>
                                                                                                                PAGE
                                                                                                                ----
<S>                                                                                                            <C>
Consolidated Balance Sheets as of
     December 31, 1999 and June 30, 2000 (Unaudited)................................................             3

Consolidated Statements of Operations
     for the Three and Six Months Ended June 30, 1999 and 2000 (Unaudited)..........................             4

Consolidated Statements of Cash Flows
     for the Six Months Ended June 30, 1999 and 2000 (Unaudited)....................................             5

Notes to Consolidated Financial Statements..........................................................             6
</TABLE>

                                       2

<PAGE>   3

                           CONSOLIDATED BALANCE SHEETS
                    (in thousands, except share information)
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                       DECEMBER 31,        JUNE 30,
                                                                                           1999             2000
                                                                                       ------------     ------------
<S>                                                                                    <C>              <C>
ASSETS

Current assets:

     Cash and cash equivalents ....................................................    $     32,144     $     71,111
     Accounts receivable, less allowance
          for doubtful accounts ...................................................          84,476           82,782
     Inventories ..................................................................           8,687            6,340
     Prepaid expenses and other assets ............................................           5,623           15,810
                                                                                       ------------     ------------
          Total current assets ....................................................         130,930          176,043

Property, equipment, and leasehold improvements, at cost ..........................       1,451,761        1,394,510
     Less accumulated depreciation ................................................        (684,648)        (735,119)
                                                                                       ------------     ------------
          Net property, equipment, and leasehold improvements .....................         767,113          659,391

Other non-current assets, at cost .................................................         609,014          610,734
     Less accumulated amortization ................................................         (84,497)         (94,949)
                                                                                       ------------     ------------
          Net other non-current assets ............................................         524,517          515,785
                                                                                       ------------     ------------
                                                                                       $  1,422,560     $  1,351,219
                                                                                       ============     ============
LIABILITIES AND SHAREOWNERS' DEFICIT

Current liabilities:
     Long-term debt in default ....................................................    $  1,945,000     $  1,946,450
     Accounts payable .............................................................          80,889           70,813
     Accrued expenses .............................................................          50,146           46,153
     Accrued interest .............................................................          42,532           99,185
     Customer deposits ............................................................          15,927           14,296
     Deferred revenue .............................................................          19,778           24,837
                                                                                       ------------     ------------
          Total current liabilities ...............................................       2,154,272        2,201,734
                                                                                       ------------     ------------

Long-term obligations, non-current portion ........................................          58,127           59,507

Commitments and contingencies

Shareowners' deficit:
     Common Stock - $.01 par, authorized 250,000,000 shares; 103,960,240 and
         104,242,567 shares issued and outstanding as of December 31, 1999 and
         June 30, 2000, respectively ..............................................           1,040            1,042
     Paid-in capital ..............................................................         134,161          134,742
     Accumulated other comprehensive income .......................................             745            1,614
     Accumulated deficit ..........................................................        (925,785)      (1,047,420)
                                                                                       ------------     ------------
          Total shareowners' deficit ..............................................        (789,839)        (910,022)
                                                                                       ------------     ------------
                                                                                       $  1,422,560     $  1,351,219
                                                                                       ============     ============
</TABLE>

                             See accompanying notes


                                       3
<PAGE>   4


                      CONSOLIDATED STATEMENTS OF OPERATIONS
                  (in thousands, except per share information)
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                           THREE MONTHS ENDED            SIX MONTHS ENDED
                                                                JUNE 30,                     JUNE 30,
                                                      -------------------------     -------------------------
                                                         1999           2000           1999           2000
                                                      ----------     ----------     ----------     ----------
<S>                                                   <C>            <C>            <C>            <C>
Services, rent and maintenance revenues ..........    $  231,635     $  184,884     $  473,503     $  396,157
Product sales ....................................        22,930         18,635         44,622         42,999
                                                      ----------     ----------     ----------     ----------
     Total revenues ..............................       254,565        203,519        518,125        439,156
Cost of products sold ............................       (10,462)       (13,043)       (26,639)       (26,236)
                                                      ----------     ----------     ----------     ----------
                                                         244,103        190,476        491,486        412,920

Operating expenses:
     Services, rent and maintenance ..............        63,782         62,541        130,672        125,240
     Selling .....................................        21,962         15,221         45,992         35,322
     General and administrative ..................        87,939         80,164        176,229        159,934
     Depreciation and amortization ...............       128,668         58,988        195,548        121,825
     Provision for asset impairment ..............            --             --         17,798             --
                                                      ----------     ----------     ----------     ----------
          Total operating expenses ...............       302,351        216,914        566,239        442,321
                                                      ----------     ----------     ----------     ----------

Operating loss ...................................       (58,248)       (26,438)       (74,753)       (29,401)

Other income (expense):
     Interest expense ............................       (37,770)       (46,768)       (73,801)       (93,123)
     Interest income .............................           715            824          1,305            938
     Other non-operating income (expense) ........            (8)           (25)           180            (49)
                                                      ----------     ----------     ----------     ----------
          Total other expense ....................       (37,063)       (45,969)       (72,316)       (92,234)
                                                      ----------     ----------     ----------     ----------

Loss before cumulative effect of a change in
    accounting principle .........................       (95,311)       (72,407)      (147,069)      (121,635)
Cumulative effect of a change in accounting
    principle ....................................            --             --        (37,446)            --
                                                      ----------     ----------     ----------     ----------

Net loss .........................................    $  (95,311)    $  (72,407)    $ (184,515)    $ (121,635)
                                                      ==========     ==========     ==========     ==========

Net loss per share (basic and diluted):
Loss before cumulative effect of a change in
     accounting principle ........................    $    (0.92)    $    (0.69)    $    (1.42)    $    (1.17)
Cumulative effect of a change in accounting
     principle ...................................            --             --          (0.36)            --
                                                      ----------     ----------     ----------     ----------

 Net loss per share ..............................    $    (0.92)    $    (0.69)    $    (1.78)    $    (1.17)
                                                      ==========     ==========     ==========     ==========
</TABLE>


                             See accompanying notes



                                       4
<PAGE>   5

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (in thousands)
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                        SIX MONTHS ENDED
                                                                                           JUNE  30,
                                                                                       1999           2000
                                                                                    ----------     ----------
<S>                                                                                 <C>            <C>
Operating activities:
     Net loss ..................................................................    $ (184,515)    $ (121,635)
          Adjustments to reconcile net loss to net cash provided by operating
           activities:
                 Provision for asset impairment ................................        17,798             --
                 Cumulative effect of a change in accounting principle .........        37,446             --
                 Depreciation ..................................................       186,545        112,641
                 Amortization ..................................................         9,003          9,184
                 Provision for doubtful accounts ...............................        12,630         14,698
                 Amortization of debt issuance costs ...........................         2,260          2,304
                 Other .........................................................          (180)            49

     Changes in operating assets and liabilities:
                 Accounts receivable ...........................................         3,155        (13,004)
                 Inventories ...................................................        (4,194)         2,347
                 Prepaid expenses and other assets .............................         1,762        (10,187)
                 Accounts payable ..............................................        26,911        (10,076)
                 Accrued expenses and accrued interest .........................        (6,160)        52,611
                 Accrued restructuring costs ...................................          (933)            --
                 Customer deposits and deferred revenue ........................           (12)         3,428
                                                                                    ----------     ----------
Net cash provided by operating activities ......................................       101,516         42,360
                                                                                    ----------     ----------

Investing activities:
   Capital expenditures ........................................................      (134,814)        (6,727)
   Payments for spectrum licenses ..............................................        (2,546)            --
   Restricted cash invested in money market instruments ........................            --           (655)
   Other, net ..................................................................        (6,749)         1,406
                                                                                    ----------     ----------
Net cash used in investing activities ..........................................      (144,109)        (5,976)
                                                                                    ----------     ----------

Financing activities:
   Borrowings of long-term obligations .........................................       144,637          3,640
   Repayments of long-term obligations .........................................       (94,979)        (1,640)
   Proceeds from exercise of stock options .....................................         1,201            583
                                                                                    ----------     ----------
Net cash provided by financing activities ......................................        50,859          2,583
                                                                                    ----------     ----------

Net increase in cash and cash equivalents ......................................         8,266         38,967
Cash and cash equivalents at beginning of period ...............................         3,077         32,144
                                                                                    ----------     ----------
Cash and cash equivalents at end of period .....................................    $   11,343     $   71,111
                                                                                    ==========     ==========
</TABLE>

                             See accompanying notes


                                       5
<PAGE>   6


                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2000
                                   (Unaudited)


1.    THE COMPANY AND MERGER AGREEMENT

      Paging Network, Inc. (the Company) is a provider of wireless messaging
services throughout the United States and the U.S. Virgin Islands, Puerto Rico,
and Canada. The Company provides service in all 50 states and the District of
Columbia, including service in the 100 most populated markets in the United
States. The Company also owns a minority interest in a wireless messaging
company in Brazil.

      On November 7, 1999, the Company signed a definitive agreement (the Merger
Agreement) to merge (the Merger) with Arch Communications Group, Inc. (Arch).
The Merger Agreement was subsequently amended on January 7, 2000, May 10, 2000,
and July 23, 2000. Under terms of the Merger Agreement, as amended, the
Company's senior subordinated notes, along with all accrued interest thereon,
will be exchanged for common stock of Arch representing 46.1% of the common
stock of the combined company, and the Company's common stock will be converted
into common stock representing 5.0% of the common stock of the combined company.
The Merger Agreement also provides for the Company to distribute 80.5% of its
interest in Vast Solutions, Inc. (Vast), a wholly-owned subsidiary of the
Company, to holders of the Company's senior subordinated notes and common stock.
Holders of the senior subordinated notes will receive common stock of Vast
representing 60.5% of the equity of Vast, while holders of the Company's common
stock will receive common stock of Vast representing 20% of the equity of Vast.
The remaining interest in Vast will be held by the combined company following
the Merger.

      As more fully discussed in Note 2, the Company will seek to complete the
Merger through the Company's plan of reorganization filed in conjunction with
the Company's bankruptcy filing in July 2000. Consummation of the Merger is also
subject to customary regulatory review. The Company and Arch have received
approval from the Department of Justice and the Federal Communications
Commission to proceed with the Merger. If the Merger Agreement is terminated
after one party pursues an alternative offer, a plan of reorganization of the
Company other than the one contemplated in the Merger Agreement is filed by the
Company and/or confirmed by a bankruptcy court, or under other specified
circumstances, either the Company or Arch may be required to pay a termination
fee of $40 million.


2.    CHAPTER 11 REORGANIZATION AND BASIS OF PRESENTATION

      The accompanying financial statements have been prepared on a going
concern basis, which contemplates the realization of assets and the satisfaction
of liabilities in the normal course of business. The Company incurred losses of
$157 million, $162 million, and $299 million during the years ended December 31,
1997, 1998, and 1999, respectively, and $72 million and $122 million,
respectively, during the three and six months ended June 30, 2000. The Company's
deteriorating financial results and liquidity caused it to be in default of the
covenants of all of its domestic debt agreements. On February 2, 2000 and August
1, 2000, the Company failed to make the semi-annual interest payments on its
8.875% senior subordinated notes due 2006 (8.875% Notes) and its 10.125% senior
subordinated notes due 2007 (10.125% Notes), and on April 17, 2000, the Company
failed to make the semi-annual interest payment on its 10% senior subordinated
notes due 2008 (10% Notes). The Company also violated several of the financial
and other covenants of its domestic revolving credit facility (the Credit
Agreement). As a result of these defaults, the Company's bondholders and the
lenders under the Credit Agreement had the right to demand at any time that the
Company immediately pay its outstanding indebtedness in full. On July 14, 2000,
three senior subordinated noteholders commenced an involuntary proceeding
against the Company under Chapter 11 of the United States Bankruptcy Code (the
Bankruptcy Code).

      On July 24, 2000 (the Petition Date), the Company and all of its
wholly-owned domestic subsidiaries except for Vast (collectively, the Debtors),
converted the bankruptcy case filed on July 14, 2000 to a voluntary Chapter 11
case. Subsequent to the Petition Date, the Debtors are operating as
debtors-in-possession and are subject to the jurisdiction of the United States
Bankruptcy Court for the District of Delaware (the Bankruptcy Court). Chapter 11
is the principal business reorganization chapter of the Bankruptcy Code. Under
Chapter 11 of the Bankruptcy Code, a debtor is authorized to reorganize its
business for the benefit of its creditors and stockholders. In addition to
permitting rehabilitation of the debtor, another goal of Chapter 11 is to
promote equality of treatment of creditors and equity security holders of equal
rank with respect to the restructuring of debt. In furtherance of these two
goals,


                                       6
<PAGE>   7

upon the filing of a petition for reorganization under Chapter 11, section
362(a) of the Bankruptcy Code generally provides for an automatic stay of
substantially all acts and proceedings against the debtor and its property,
including all attempts to collect claims or enforce liens that arose prior to
the commencement of the debtor's case under Chapter 11.

      The Bankruptcy Court has exercised supervisory powers over the operations
of the Debtors with respect to the employment of attorneys, investment bankers
and other professionals, and transactions out of the Debtors' ordinary course of
business or otherwise requiring Bankruptcy Court approval under the Bankruptcy
Code. The Debtors have been paying undisputed obligations that have arisen
subsequent to the Petition Date on a timely basis. Since the Petition Date, the
Bankruptcy Court has entered orders, among other things, allowing the Debtors
(i) to pay certain customer refunds and deposits in the ordinary course of
business, (ii) to pay wages, salaries and benefits owing to employees, and (iii)
to pay pre-petition obligations owed to continuing vendors as such obligations
come due.

      On July 25, 2000, the Debtors filed a Joint Plan of Reorganization and
disclosure statement which provide for the implementation of the Merger as the
Debtors' plan of reorganization. A hearing with respect to the Bankruptcy
Court's approval of the Debtors' disclosure statement is scheduled for September
7, 2000, at which time the Bankruptcy Court will determine if the Debtors' Joint
Plan of Reorganization providing for the implementation of the Merger will be
submitted to the creditors and shareholders of the Debtors for approval. The
Company's motion to assume the termination fee and certain related provisions of
the Merger Agreement is scheduled for hearing before the Bankruptcy Court on
August 21, 2000.

      As of July 31, 2000, the Company had approximately $66 million in cash.
Upon commencement of the Chapter 11 case, the Company obtained a
debtor-in-possession loan facility (the DIP Facility) from the current lenders
under the Credit Agreement which provided for additional secured borrowings by
both the Company and Vast not to exceed $50 million in the aggregate, subject to
certain limitations as set forth in the loan agreement. Borrowings under the DIP
Facility bear interest at prime plus 2.5% for outstanding borrowings up to $15
million, and at prime plus 3.0% for outstanding borrowings in excess of $15
million, due monthly. All amounts outstanding under the DIP Facility are due the
earlier of (i) the confirmation of the Debtors' Joint Plan of Reorganization, or
(ii) November 30, 2000. The Company believes that its existing cash, the cash
expected to be generated from operations, and the cash available under the DIP
Facility is sufficient to meet its obligations, except for the cash interest
payments due under the Notes, through the completion of the Merger. However, if
the Company's financial results continue to deteriorate, the Merger is delayed,
or other unforeseen events occur, the Company may not have sufficient liquidity
to meet its obligations through the completion of the Merger. If the Merger is
not completed, the Company would likely be required to consider a stand-alone
restructuring, asset sales, transactions with other potential merger parties or
acquirers, or liquidation. In addition, if the Merger is not completed, the
Company would likely incur significant charges for asset impairments and
restructuring its obligations. The accompanying financial statements do not
include any adjustments relating to the possible future effects on the
recoverability and classification of assets or the amounts and classification of
liabilities that might be necessary should the Merger not be completed.

3.    UNAUDITED INTERIM FINANCIAL STATEMENTS

      The interim consolidated financial information contained herein is
unaudited but, in the opinion of management, includes all adjustments, which are
of a normal recurring nature, except for the cumulative effect of a change in
accounting principle discussed in Note 4 and the provision for asset impairment
discussed in Note 5, necessary for a fair presentation of the financial
position, results of operations, and cash flows for the periods presented. These
financial statements have been prepared in accordance with accounting principles
generally accepted in the United States for interim financial information and
the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly,
these financial statements do not include all of the information and footnotes
required by accounting principles generally accepted in the United States for
complete financial statements. The balance sheet as of December 31, 1999, has
been derived from the audited financial statements as of that date. Results of
operations for the periods presented herein are not necessarily indicative of
results of operations for the entire year. These financial statements and
related notes should be read in conjunction with the financial statements and
notes included in the Company's Annual Report on Form 10-K for the year ended
December 31, 1999.


                                       7
<PAGE>   8

4.    ACCOUNTING CHANGES

      The Company adopted the provisions of Statement of Position 98-5
"Reporting on the Costs of Start-Up Activities" (SOP 98-5), effective January 1,
1999. SOP 98-5 requires the expensing of all start-up costs as incurred, as well
as writing off the remaining unamortized balance of capitalized start-up costs
at the date of adoption of SOP 98-5. The impact of the Company's adoption of SOP
98-5 was a charge of $37 million representing the cumulative effect of a change
in accounting principle to write-off all unamortized start-up costs as of
January 1, 1999.

      Effective April 1, 1999, the Company changed the depreciable lives for its
subscriber devices and certain network equipment. The Company changed the
depreciable lives of its subscriber devices from three years to two years and
the depreciable life of certain of its network equipment from seven years to ten
years. The changes resulted from a review by the Company of the historical usage
periods of its subscriber devices and its network equipment and the Company's
expectations regarding future usage periods for subscriber devices considering
current and projected technological advances. The Company has determined that
the appropriate useful life of its subscriber devices is two years as a result
of technological advances, customer desire for new pager technology, and the
Company's decreasing ability to redeploy older pager models. As a result of
these changes, net loss increased by $69 million, or $0.66 per share (basic and
diluted), for the three and six months ended June 30, 1999.

5.    PROVISION FOR ASSET IMPAIRMENT

      During the first quarter of 1999, the Company made the decision to narrow
its focus to its North American operations and, as a result, made the decision
to sell or otherwise dispose of its operations in Spain. During the third
quarter of 1999, all operations of the Company's majority-owned Spanish
subsidiaries were ceased. The Company's interest in its Spanish subsidiaries was
sold in the first quarter of 2000 for minimal proceeds. As a result of the
Company's decision to sell or otherwise dispose of its Spanish subsidiaries, the
Company recorded a provision of $18 million during the six months ended June 30,
1999, for the impairment of the assets of the Company's majority-owned
subsidiaries, the effect of which was to write-off the Company's net investment
in its Spanish subsidiaries. The amount of the provision was based on the
Company's estimate of the value of its net investment in the Spanish
subsidiaries, which did not materially differ from the proceeds received upon
the sale of the subsidiaries in the first quarter of 2000. No cash costs have
been incurred or are expected as a result of the provision for the impairment of
the assets of the Company's Spanish subsidiaries, and no additional charges are
expected to be required.

6.    INCOME TAXES

      For the three and six months ended June 30, 1999 and 2000, the Company had
no provision or benefit for income taxes because of the Company's inability to
benefit from its net operating losses.

7.    COMMON STOCK AND NET LOSS PER SHARE

      Net loss per share amounts are computed based on the weighted average
number of common shares outstanding. The number of shares used to compute per
share amounts for the three months ended June 30, 1999 and 2000, were 104
million. The number of shares used to compute per share amounts for the six
months ended June 30, 1999 and 2000, were 104 million. The average number of
options to purchase shares of the Company's Common Stock during the three and
six months ended June 30, 1999 was 10 million, at exercise prices ranging from
$2.73 per share to $25.50 per share. The average number of options to purchase
shares of the Company's Common Stock during the three and six months ended June
30, 2000, was 10 million, at exercise prices ranging from $0.81 per share to
$17.13 per share. These stock options were not included in the computation of
diluted earnings per share because the effect of assuming their exercise would
have been antidilutive.

      The Company has 275 million authorized shares, of which 250 million are
Common Stock and 25 million are preferred stock. As of June 30, 2000, there were
no preferred shares issued or outstanding.


                                       8
<PAGE>   9

8.    COMPREHENSIVE LOSS

      Comprehensive loss for the three and six months ended June 30, 1999 and
2000, is as follows (in thousands):

<TABLE>
<CAPTION>
                                                         THREE MONTHS                  SIX MONTHS
                                                        ENDED JUNE 30,               ENDED JUNE 30,
                                                 -------------------------     -------------------------
                                                    1999           2000           1999           2000
                                                 ----------     ----------     ----------     ----------
<S>                                              <C>            <C>            <C>            <C>
Net loss ....................................    $  (95,311)    $  (72,407)    $ (184,515)    $ (121,635)
Foreign currency translation adjustments ....          (166)           810         (1,007)           869
                                                 ----------     ----------     ----------     ----------
    Total comprehensive loss ................    $  (95,477)    $  (71,597)    $ (185,522)    $ (120,766)
                                                 ==========     ==========     ==========     ==========
</TABLE>


9.    STATEMENT OF CASH FLOWS INFORMATION

      Cash and cash equivalents include highly liquid debt instruments with an
original maturity of three months or less. As of June 30, 2000, cash equivalents
also include investments in money market instruments, which are carried at fair
market value. Cash payments made for interest during the six months ended June
30, 1999 and 2000, were approximately $70 million and $34 million, respectively,
net of interest capitalized during the six months ended June 30, 1999 and 2000
of $11 million and $1 million, respectively. There were no significant federal
or state income taxes paid or refunded for the six months ended June 30, 1999
and 2000.

10.   SEGMENT INFORMATION

      The Company has two reportable segments, traditional paging operations and
advanced messaging operations. The Company's basis for the segments relates to
the types of products and services each segment provides. The traditional paging
segment includes the traditional display and alphanumeric services, which are
basic one-way services, and 1 1/2-way paging services. The advanced messaging
segment consists of the Company's new 2-way wireless messaging services,
VoiceNow service, and the operations of Vast, which include wireless integration
products and wireless software development and sales.



                                       9
<PAGE>   10


     The following table presents certain information related to the Company's
business segments for the three and six months ended June 30, 1999 and 2000.

<TABLE>
<CAPTION>
                                            THREE MONTHS                   SIX MONTHS
                                           ENDED JUNE 30,                ENDED JUNE 30,
                                    -------------------------     ----------------------------
                                       1999           2000           1999              2000
                                    ----------     ----------     ----------        ----------
<S>                                 <C>            <C>            <C>               <C>
Total Revenues:
       Traditional Paging(1) ...    $  251,142     $  196,170     $  511,808        $  424,655
       Advanced  Messaging .....         3,423          7,349          6,317            14,501
                                    ----------     ----------     ----------        ----------
                                    $  254,565     $  203,519     $  518,125        $  439,156
                                    ==========     ==========     ==========        ==========
Operating income (loss):
       Traditional Paging(1) ...    $  (46,525)    $   (1,000)    $  (54,246)(2)    $   12,101
       Advanced Messaging ......       (11,723)       (25,438)       (20,507)          (41,502)
                                    ----------     ----------     ----------        ----------
                                    $  (58,248)    $  (26,438)    $  (74,753)       $  (29,401)
                                    ==========     ==========     ==========        ==========
Adjusted EBITDA (3):
       Traditional Paging(1) ...    $   81,506     $   47,186     $  157,857        $  114,534
       Advanced Messaging ......       (11,086)       (14,636)       (19,264)          (22,110)
                                    ----------     ----------     ----------        ----------
                                    $   70,420     $   32,550     $  138,593        $   92,424
                                    ==========     ==========     ==========        ==========
</TABLE>

      (1)   The international operations of the Company currently consist
            entirely of traditional paging services and accordingly are included
            in the Company's traditional paging business segment.

      (2)   Operating loss for the traditional paging business segment for the
            first six months of 1999 includes a provision for asset impairment
            of $18 million. See Note 5.

      (3)   Adjusted EBITDA, as determined by the Company, does not reflect
            other non-operating income (expense), provision for asset
            impairment, and cumulative effect of a change in accounting
            principle.


      Adjusted EBITDA is not defined in generally accepted accounting principles
and should not be considered in isolation or as a substitute for a measure of
performance in accordance with generally accepted accounting principles.


                                       10
<PAGE>   11


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

SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

      The statements contained in this filing which are not historical facts,
including but not limited to future capital expenditures, performance and market
acceptance of new products and services, impact of Year 2000 issues on the
operations of Paging Network, Inc. (the Company), pending distribution of equity
interests in Vast (the Vast distribution), the Company's financial condition and
ability to continue as a going concern are forward-looking statements that are
subject to risks and uncertainties that could cause actual results to differ
materially from those set forth in the forward-looking statements. Among the
factors that could cause actual future results to differ materially are
competitive pricing pressures, the introduction of products and services by
competitors of the Company, the performance of the Company's vendors and
independent contractors, third-party Year 2000 remediation plans, the
introduction of competing technologies, the performance of the Company's
advanced messaging network, acceptance of the Company's products and services in
the marketplace, higher than normal employee turnover, impact of the suspension
of the restructuring of the Company's domestic operations (the Restructuring),
the financial condition of the Company and the uncertainty of additional
financing.

      Certain statements in this filing relating to the consummation of a merger
of the Company with Arch Communications Group, Inc. (Arch), including statements
regarding the rates at which the Company's common stock and senior subordinated
notes will be exchanged or converted into shares of the common stock of Arch,
the percentage distribution of the Company's interest in a wholly-owned
subsidiary to holders of the Company's common stock and senior subordinated
notes, and other statements regarding the manner and timing of the merger, are
forward-looking in nature and are subject to risks and uncertainties that could
cause the actual results to differ materially from those set forth in such
forward-looking statements. Among the factors that could cause actual future
results to differ materially are the failure to receive the necessary approvals
of stockholders, bondholders and lenders of the Company and Arch, the actions of
the bankruptcy court with respect to the voluntary bankruptcy proceeding
initiated by the Company, the emergence of a competing offer to acquire either
the Company or Arch, the material breach of the merger agreement by the Company
or Arch, or the failure to satisfy any of the conditions to the closing of the
merger.

INTRODUCTION

      The Company is a provider of wireless messaging services throughout the
United States and in the U.S. Virgin Islands, Puerto Rico, and Canada. The
Company provides service in all 50 states and the District of Columbia,
including service in the 100 most populated markets in the United States. The
Company also owns a minority interest in a wireless messaging company in Brazil.
During 1999 and 2000, several significant events have occurred:

o     On November 8, 1999, the Company announced a merger with Arch. Under the
      merger, the Company will become a wholly-owned subsidiary of Arch. Also as
      part of the merger, 80.5% of the Company's advanced wireless data and
      wireless solutions business will be distributed to the Company's
      noteholders and stockholders. See "Merger Agreement."

o     The Company's deteriorating financial results and defaults under its debt
      agreements have resulted in significant liquidity constraints. The report
      of the Company's independent auditors for the year ended December 31, 1999
      expresses substantial doubt about its ability to continue as a going
      concern. See "Liquidity and Capital Resources."


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<PAGE>   12

o     In February, April, and August 2000, the Company failed to make the
      semi-annual interest payments due under its $1.2 billion of senior
      subordinated public notes. The Company is also not in compliance with
      several financial covenants of its domestic revolving credit facility (the
      Credit Agreement). See "Liquidity and Capital Resources."

o     On July 24, 2000, the Company commenced a bankruptcy proceeding under
      Chapter 11 of the United States Bankruptcy Code. See "Bankruptcy Filing."

o     As a result of billing software and system implementation problems
      encountered throughout 1999 and the proposed merger with Arch, the Company
      initially postponed and subsequently suspended the conversions of certain
      local offices to its new billing and customer service platforms. As a
      result of these suspensions, in the fourth quarter of 1999 the Company
      reversed $24 million of a restructuring charge that it had recorded in
      1998. See "Restructuring."

o     Units in service with subscribers decreased from approximately 10.1
      million units at December 31, 1998, to approximately 9.0 million units at
      December 31, 1999. Units in service were approximately 8.4 million units
      at March 31, 2000 and 7.9 million units at June 30, 2000, a decline of
      approximately 566,000 units in the second quarter of 2000. Units in
      service are expected to continue to decline in the second half of 2000.

o     In June 1999, the Company consolidated its initiative to develop advanced
      messaging services including wireless data and wireless solutions into its
      wholly-owned subsidiary, Vast. Vast is a development stage company and,
      since its inception, has been engaged primarily in product research and
      development and developing markets for its products and services. Vast had
      total revenues of $1 million and $3 million, respectively, for the year
      ended December 31, 1999 and six months ended June 30, 2000. Vast incurred
      operating losses of approximately $36 million and $11 million,
      respectively, for the year ended December 31, 1999 and six months ended
      June 30, 2000 as a result of these startup activities.

o     The Company's Spanish subsidiaries ceased operations during the third
      quarter of 1999. The Company had recorded a provision of $18 million
      during the first quarter of 1999 for the impairment of the assets of the
      Spanish subsidiaries.

o     The Company incurred net losses of $299 million for the year ended
      December 31, 1999 and $122 million for the six months ended June 30, 2000.
      The net loss for 1999 includes an increase in depreciation expense of $78
      million resulting from changes in the depreciable lives of subscriber
      devices and network equipment and a charge of $37 million for the
      cumulative effect of adopting a new accounting standard. See "Results of
      Operations."

o     On July 26, 2000, the Company's securities were delisted by Nasdaq from
      the Nasdaq SmallCap Market. On July 27, 2000, the Company began publicly
      trading its common stock on the Over-The-Counter Market.


MERGER AGREEMENT

      On November 7, 1999, the Company signed a definitive agreement (the Merger
Agreement) to merge (the Merger) with Arch. The Merger Agreement was
subsequently amended on January 7, 2000, May 10, 2000, and July 23, 2000. Under
terms of the Merger Agreement, as amended, the Company's senior subordinated
notes, along with all accrued interest thereon, will be exchanged for common
stock of Arch representing 46.1% of the common stock of the combined company and
the Company's common stock will be converted into common stock representing 5.0%
of the common stock of the combined company. The Merger Agreement also provides
for the Company to distribute 80.5% of its interest in Vast to holders of the
Company's senior subordinated notes and common stock. Holders of the senior
subordinated notes will receive common stock of Vast representing 60.5% of the
equity of Vast, while holders of the Company's common stock will receive common
stock of Vast representing 20% of the equity of Vast. The remaining interest in
Vast will be held by the combined company following the Merger.


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<PAGE>   13
      As more fully discussed below, the Company will seek to complete the
Merger through the reorganization filed in conjunction with the Company's
bankruptcy filing in July 2000. Consummation of the Merger is subject to
customary regulatory review. The Company and Arch have received approval from
the Department of Justice and the Federal Communications Commission to proceed
with the Merger.

      On July 19, 2000, Metrocall, Inc. (Metrocall) announced that it had
offered to acquire the Company for a combination of cash and stock. On July 24,
2000, the Company announced that its board of directors had concluded that the
proposal received from Metrocall was not a "superior proposal" to the Arch
transaction within the meaning of the Merger Agreement. The Company also
announced that its board would not discuss the proposal further with Metrocall.

BANKRUPTCY FILING

      On July 14, 2000, three senior subordinated noteholders commenced an
involuntary proceeding against the Company under Chapter 11 of the United States
Bankruptcy Code (the Bankruptcy Code). On July 24, 2000, the Company and all of
its wholly-owned domestic subsidiaries except for Vast converted the bankruptcy
case filed on July 14, 2000, to a voluntary Chapter 11 case. Subsequent to the
petition date, the Company and its domestic subsidiaries other than Vast are
operating as debtors-in-possession and are subject to the jurisdiction of the
United States Bankruptcy Court for the District of Delaware (the Bankruptcy
Court). Chapter 11 is the principal business reorganization chapter of the
United States Bankruptcy Code. Under Chapter 11 of the Bankruptcy Code, a debtor
is authorized to reorganize its business for the benefit of its creditors and
stockholders.

      The Bankruptcy Court has exercised supervisory powers over the operations
of the Company with respect to the employment of attorneys, investment bankers
and other professionals, and transactions out of the ordinary course of business
or otherwise requiring Bankruptcy Court approval under the Bankruptcy Code. The
Company has been paying undisputed obligations that have arisen subsequent to
the petition date on a timely basis. Since the petition date, the Bankruptcy
Court has entered orders, among other things, allowing the Company, (i) to pay
certain customer refunds and deposits in the ordinary course of business, (ii)
to pay wages, salaries and benefits owing to employees, and (iii) to pay
pre-petition obligations owed to continuing vendors as such obligations come
due.

      On July 25, 2000, the Company filed a Joint Plan of Reorganization and
disclosure statement which provide for the implementation of the Merger as the
Company's plan of reorganization. A hearing with respect to the Bankruptcy
Court's approval of the disclosure statement is scheduled for September 7, 2000,
at which time the Bankruptcy Court will determine if the Joint Plan of
Reorganization providing for the implementation of the Merger will be submitted
to the Company's creditors and stockholders for approval. The Company's motion
to assume the merger termination fee and certain related provisions of the
Merger Agreement is scheduled for hearing before the Bankruptcy Court on August
21, 2000. On August 4, 2000, Metrocall filed a motion requesting that the
Bankruptcy Court terminate the Company's exclusivity period and permit Metrocall
to submit a competing plan of reorganization in the Chapter 11 reorganization
case of the Company and its subsidiaries. A hearing before the Bankruptcy Court
on Metrocall's motion is also currently scheduled for August 21, 2000.

LIQUIDITY AND CAPITAL RESOURCES

General

      The Company's deteriorating financial results and liquidity have caused it
to be in default of the covenants of all of its domestic debt agreements. On
February 2, 2000 and August 1, 2000, the Company failed to make the semi-annual
interest payment on its 8.875% senior subordinated notes due 2006 (8.875%
Notes) and its 10.125% senior subordinated notes due 2007 (10.125% Notes). As
of March 2, 2000, the non-payment of interest constituted a default under the
indentures of the 8.875% Notes and the 10.125% Notes. As of April 17, 2000, the
Company failed to make the semi-annual interest payment on its 10% senior
subordinated notes due 2008 (10% Notes). The Company does not expect to make
additional cash interest payments on any of its Notes. As a result of these
defaults, the Company's bondholders and lenders under its Credit Agreement had
the right to demand at any time


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<PAGE>   14

that the Company immediately pay its outstanding indebtedness in full. On July
14, 2000, three senior subordinated noteholders commenced the involuntary
bankruptcy proceeding against the Company discussed above.

      The Company is prohibited from additional borrowings under its Credit
Agreement and has classified all of its outstanding indebtedness under its
Credit Agreement and the senior subordinated notes as a current liability as of
December 31, 1999 and June 30, 2000. On July 24, 2000, the Company entered into
a debtor-in-possession loan facility with the lenders under its Credit
Agreement. The debtor-in-possession loan facility provides for additional
secured borrowings by both the Company and Vast not to exceed $50 million in the
aggregate, subject to certain limitations as set forth in the loan agreement.
Borrowings under the debtor-in-possession loan facility bear interest at prime
plus 2.5% for outstanding borrowings up to $15 million, and at prime plus 3.0%
for outstanding borrowings in excess of $15 million, due monthly. All amounts
outstanding under the debtor-in-possession loan facility are due the earlier of
(i) the confirmation of the Company's plan of reorganization, or (ii) November
30, 2000. As of July 31, 2000, the Company had approximately $66 million in
cash. The Company believes that its existing cash, the cash expected to be
generated from operations, and the cash available under the debtor-in-possession
loan facility is sufficient to meet its obligations, except for the cash
interest payments due under the senior subordinated notes, through the
completion of the Merger. However if the Company's financial results continue to
deteriorate, the Merger is delayed, or other unforeseen events occur, the
Company may not be able to complete the Merger. If the Merger is not completed,
the Company would likely be required to consider a stand-alone restructuring,
asset sales, transactions with other potential merger parties or acquirers, or
liquidation.

Vast Solutions

      Since the inception of Vast, the Company has funded substantially all of
its operations, which are in the development stage. However, as a result of the
above described defaults, the Company is prohibited from providing any
additional funding to Vast. Under the debtor-in-possession financing discussed
above, however, Vast will have access to additional borrowings during the
Company's bankruptcy proceedings. Furthermore, Arch has also committed to
provide, following the close of the Company's bankruptcy proceedings, a loan of
$7.5 million to Vast. Of the Company's cash on hand at July 31, 2000,
approximately $4 million was held by Vast. Vast believes cash on hand, together
with the amount of cash available under the debtor-in-possession financing, is
sufficient to meet its obligations through the date at which the Company expects
to complete the Merger or otherwise restructure its obligations. However, there
can be no assurance that these efforts will provide Vast with adequate liquidity
to meet its obligations through the completion of the Merger. As a result, Vast
may be required to reduce or cease its current level of development stage
operations. Such events would have a material impact on the Company's ability to
consummate the Merger.

Cash Provided by Operating Activities

      Net cash provided by operating activities was $42 million for the six
months ended June 30, 2000, compared to $102 million for the six months ended
June 30, 1999. The decrease of $60 million from 1999 to 2000 resulted primarily
from the continuing decline in revenues associated with the decline in units in
service, a decrease in accounts payable, and an increase in accounts receivable.
The decrease in accounts payable during the first six months of 2000 was
primarily due to lower levels of capital expenditures and reduced purchases of
paging devices. The increase in accounts receivable during the first six months
of 2000 was the result of reduced cash collections during this time period
caused by issues associated with the Company's new billing and customer service
platforms, employee turnover, and the Company's proposed merger with Arch, all
of which have required a significant portion of the Company's resources. The
Company increased its collections efforts during the latter part of the first
quarter of 2000 and expects to realize the benefits of these efforts in future
quarters.

Cash Provided by Financing Activities

      Net cash provided by financing activities was $51 million and $3 million,
respectively, for the six months ended June 30, 1999 and 2000. The primary
source of financing for the first six months of 1999 was net borrowings under
the Company's Credit Agreement. As discussed below, the Company does not
anticipate being able to make additional borrowings under the Credit


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<PAGE>   15

Agreement in the future. Net cash provided by financing activities has been used
for capital expenditures, working capital, and other general corporate purposes,
which included expansion of its existing business.

Cash Used in Investing Activities

      The Company's operations and expansion into new markets and product lines
have required substantial capital investment. Furthermore, the Company has been
building an advanced messaging network, which will enable it to offer new
enhanced messaging services and has converted certain back office functions from
decentralized field offices into centralized processing facilities. The Company
substantially completed building its advanced messaging network in early 2000.
The Company continued to convert certain back office functions from its
decentralized field offices into the centralized processing facilities through
January 2000, at which time the Company suspended further conversions. Cash used
in investing activities was $144 million and $6 million, respectively, for the
six months ended June 30, 1999 and 2000. Capital expenditures, excluding
payments for spectrum licenses, were $135 million and $7 million, respectively,
for the six months ended June 30, 1999 and 2000, and consisted primarily of
expenditures for the Company's traditional paging operations, its advanced
messaging operations, and its Restructuring.

      Capital expenditures related to the Company's traditional paging
operations, excluding capital expenditures related to the Restructuring, were
minimal for the six months ended June 30, 2000 and were $55 million for the six
months ended June 30, 1999. The decrease in traditional paging capital
expenditures have been primarily due to the Company's efforts to conserve cash
and a reduction in the Company's network-related expenditures pertaining to
geographic coverage and capacity expansion.

      Capital expenditures related to advanced messaging operations were $63
million and $4 million, respectively, for the six months ended June 30, 1999 and
2000. The Company launched its 2-way messaging services on its advanced
messaging network on February 1, 2000. The Company expects to spend an
additional $15 million in capital expenditures to complete the buildout of sites
started in the fourth quarter of 1999 and expand capacity in certain cities
throughout the nation during 2000. This will substantially complete the
Company's investment in its advanced messaging network.

      Capital expenditures related to establishing the Company's centralized
processing facilities, including new system implementations, were $17 million
and $3 million, respectively, for the six months ended June 30, 1999 and 2000.
In January 2000, the Company suspended further capital expenditures for its
centralized processing facilities, pending the decision as to which operating
platforms will be used after the Merger by the combined company. During May
2000, a decision was made to use Arch's existing billing and customer service
systems upon completion of the Merger. The Company believes that Arch's billing
and customer service systems have the capacity to handle all of the customers of
the combined company. Arch has significant experience consolidating multiple
billing and customer service systems as a result of prior acquisitions,
including its recent acquisition of MobileMedia. The decisions regarding other
systems to be utilized by the combined company are still pending.

      The amount of capital expenditures may fluctuate from quarter to quarter
and on an annual basis due to several factors, including the variability of
units in service with subscribers. With the substantial completion of the
buildout of its advanced messaging network and the suspension of the
Restructuring beyond January 2000, the Company expects its capital expenditures
for the year of 2000 to decrease to between $50 million and $65 million. The
Company expects to fund these capital expenditures through cash on hand,
additional cash generated from operations prior to its contemplated merger with
Arch, and the debtor-in-possession financing described above.

Credit Agreements

      The Company's ability to borrow under its domestic Credit Agreement
effectively terminated when the Chapter 11 case was filed. Under the Credit
Agreement, the Company was permitted to designate all or a portion of
outstanding borrowings to be either a base rate loan or a loan based on the
London interbank offered rate. As of June 30, 2000, the Company had designated
$745 million of borrowings as London interbank offered rate loans, which bear
interest at a rate equal to London interbank offered rate plus a spread of 2.00%
and $1 million

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<PAGE>   16

of borrowings as a base rate loan. The interest rates for the $745 million of
London interbank offered rate loans as of June 30, 2000 ranged from 8.43% to
8.67%. As a result of the defaults described in Note 2 to the consolidated
financial statements, the Company's lenders have the right to collect default
interest up to 12.00% for the Company's outstanding balances under its Credit
Agreement. The Company has negotiated certain relief from this default interest
rate as part of its efforts associated with the Merger which relief is reflected
in the lenders' treatment under the bankruptcy plan. Amounts owing under the
Credit Agreement are secured by a security interest in substantially all of the
Company's assets, the assets of the Company's subsidiaries, and the capital
stock of the subsidiaries of the Company, other than the international
subsidiaries and Vast.

      The two credit agreements of the Company's Canadian subsidiaries provide
for total borrowings of approximately $75 million. Because the Canadian
subsidiaries are not debtors in the Chapter 11 case, their credit facility is
not impacted by the Chapter 11 case. Borrowings of up to approximately $40
million require security in the form of cash or government securities.
Borrowings of up to approximately $35 million require a first security in the
assets of the Canadian subsidiaries. Furthermore, the Company is required to
provide an additional $2 million of cash collateral by December 31, 2000.
However, as a result of the commencement of the Chapter 11 case and the above
described defaults, the Company is precluded from providing any additional
funding on behalf of its Canadian subsidiaries without approval from its lenders
and the Bankruptcy Court. The ability of the Company's Canadian subsidiaries to
continue as a going concern is dependent on meeting the terms of their credit
agreements, either by providing the additional cash collateral or by
establishing alternative arrangements satisfactory to the lenders. The Company
and its Canadian subsidiaries have taken and plan to take actions that
management believes will mitigate any adverse conditions and events resulting
from the possible failure of the Company to provide the required cash collateral
on December 31, 2000. However, there is no certainty that these actions or other
strategies will be sufficient to allow the Company's Canadian subsidiaries to
meet the terms of their credit agreements.

      As of June 30, 2000, approximately $59 million of borrowings were
outstanding under the Canadian credit facilities. Additional borrowings are
available to the Company's Canadian subsidiaries under these facilities, so long
as the borrowings are either collateralized or the financial covenants in the
credit agreements are met.

RESTRUCTURING

      In February 1998, the Company's Board of Directors approved the Company's
Restructuring. The Company's Restructuring plan called for the elimination of
redundant administrative operations by consolidating key support functions
located in offices throughout the country into centralized processing
facilities. In addition, the Restructuring plan called for the conversion to new
billing and customer service software platforms. The Restructuring plan
specified local and regional office closures, the disposition of certain
furniture, fixtures, and equipment and the termination of approximately 1,950
employees by job function and location. While progress in establishing the
centralized processing facilities was made, the Company's efforts to convert its
offices to its new billing and customer service software platforms fell behind
the original schedule of being completed during the second quarter of 1999.
Billing software and system implementation problems surfaced during the first
office conversions, and as a result, the Company had to postpone the conversion
of many of its other offices. These postponements resulted in delays in office
closures which deferred the payments of amounts accrued for lease obligations
and terminations and severance and related benefits. Additional implementation
problems surfaced during 1999 and caused further delays. In November 1999, and
in conjunction with the announcement of the Company's planned merger with Arch,
the Company decided to suspend further conversions after January 2000 pending
the decisions as to which operating platforms will be used by the combined
company. During May 2000, a decision was made to use Arch's existing billing and
customer service systems upon completion of the Merger. The decisions regarding
other systems to be utilized by the combined company are still pending.

      The Company has converted to its new billing and customer service software
platforms all of its customer units placed in service by its resellers and
approximately 50% of its direct customer units. As a result, the Company will
realize a portion of the anticipated cost savings resulting from its
Restructuring initiative and will eliminate some of the duplicative costs that
have adversely affected its results of operations. However, due to the
suspension of future conversions, combined with the impact of the contemplated
merger on its operations, the Company is unable to determine the amount of
future cost savings resulting from the centralized processing facilities
initiative.


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RESULTS OF OPERATIONS

      The following discussion and analysis should be read in conjunction with
the Company's consolidated financial statements and notes. EBITDA is a commonly
used measure of financial performance in the wireless messaging industry and is
one of the financial measures used to calculate whether the Company is in
compliance with the financial covenants under its debt agreements. EBITDA is
defined as earnings before interest, income taxes, depreciation, and
amortization. Adjusted EBITDA is defined as earnings before interest, income
taxes, depreciation, amortization, other non-operating income (expense),
provision for asset impairment, and cumulative effect of a change in accounting
principle. Adjusted EBITDA should not be considered an alternative to operating
income or cash flows from operating activities as determined in accordance with
generally accepted accounting principles. One of the Company's financial
objectives is to increase its Adjusted EBITDA, since Adjusted EBITDA is a
significant source of funds for servicing indebtedness and for investment in
continued growth, including purchase of paging units and paging system equipment
and the construction and expansion of paging systems. Adjusted EBITDA, as
determined by the Company, may not be comparable to similarly titled data of
other wireless messaging companies. Amounts described as Adjusted EBITDA are not
necessarily available for discretionary use as a result of restrictions imposed
by the terms of existing or future indebtedness, including the repayment of such
indebtedness or the payment of associated interest, limitations imposed by law
upon the payment of dividends or distributions or capital expenditure
requirements.

Services, Rent and Maintenance Revenues

      Revenues from services, rent and maintenance, which the Company considers
its primary business, decreased 20.2% to $185 million for the three months ended
June 30, 2000, compared to $232 million for the three months ended June 30,
1999. Revenues from services, rent and maintenance decreased 16.3% to $396
million for the six months ended June 30, 2000, compared to $474 million for the
six months ended June 30, 1999. The average revenue per unit (ARPU) for the
Company's traditional paging domestic operations decreased to $7.36 and $7.70,
respectively, for the three and six months ended June 30, 2000, compared to
$7.84 and $7.94, respectively, for the corresponding periods of 1999. The
decreases in revenues from services, rent and maintenance were primarily due to
the 19.5% reduction in number of units in service from June 30, 1999 to June 30,
2000.

      The number of units in service with subscribers at June 30, 2000 was
7,858,000, compared to 8,991,000 and 9,766,000 units in service with subscribers
at December 31, 1999 and June 30, 1999, respectively. This reduction was mainly
due to customers cancellations as a result of certain price increases,
intensifying price competition in the market for wireless communications
services, disruptions in customer service caused by conversions to new
centralized processing facilities systems and infrastructure, and the degree to
which cellular, personal communications services, and other mobile telephone
services are being subscribed to in lieu of one-way messaging services such as
those offered by the Company. Many of the factors that reduced the Company's
units in service in the first six months of 2000 have continued to exist in the
third quarter of 2000. The Company expects units in service to continue to
decline throughout 2000.

Product Sales

      Product sales decreased 18.7% to $19 million for the three months ended
June 30, 2000, compared to $23 million for the same period in 1999. Product
sales decreased 3.6% to $43 million for the six months ended June 30, 2000,
compared to $45 million for the same period in 1999.



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<PAGE>   18

Services, Rent and Maintenance Expenses

      Services, rent and maintenance expenses decreased 1.9% to $63 million for
the three months ended June 30, 2000, compared to $64 million for the three
months ended June 30, 1999. Services, rent and maintenance expenses decreased
4.2% to $125 million for the six months ended June 30, 2000, compared to $131
million for the six months ended June 30, 1999. The decreases in services, rent
and maintenance expenses were primarily attributable to decreases in pager
parts, repairs and scrap expense of approximately $2 million and $6 million,
respectively, for the three and six months ended June 30, 2000, mainly due to
increased use of in-house repair facilities, a more selective approach in the
decision to repair units, and increased sales of "as is" units.

Selling Expenses

      Selling expenses decreased 30.7% to $15 million for the second quarter of
2000, compared to $22 million for the same period in 1999. Selling expenses
decreased 23.2% to $35 million for the six months ended June 30, 2000, compared
to $46 million for the six months ended June 30, 1999. The decreases in selling
expenses were primarily due to:

o     decreased marketing research, development costs, and advertising expenses
      of approximately $5 million and $7 million, respectively, for the three
      and six months ended June 30, 2000, associated with the Company's
      traditional paging and advanced messaging operations. Marketing research,
      development costs, and advertising expenses associated with the Company's
      traditional paging and advanced messaging operations are expected to
      continue to be scaled back in future periods.

o     decreased salaries and payroll costs of approximately $2 million and $5
      million, respectively, for the three and six months ended June 30, 2000,
      mainly due to lower amount of sales commissions incurred in conjunction
      with decreased revenue levels.

General and Administrative Expenses

      General and administrative expenses decreased 8.8% to $80 million for the
second quarter of 2000, compared to $88 million for the second quarter of 1999.
General and administrative expenses decreased 9.2% to $160 million for the six
months ended June 30, 2000, compared to $176 million for the six months ended
June 30, 1999. The decreases in general and administrative expenses were
primarily due to:

o     decreased contract labor and outside consulting expense of approximately
      $11 million and $15 million, respectively, for the three and six months
      ended June 30, 2000, primarily related to decreased levels of contract
      labor and outside consulting incurred during these periods in 2000 as the
      Company suspended its Restructuring in January 2000. During the three and
      six months ended June 30, 1999 the Company incurred higher contract labor
      and outside consulting expense primarily related to the transition to the
      centralized processing facilities and costs for temporary workforce
      personnel associated with the Company's higher than normal employee
      turnover during these periods in 1999.

o     decreased shipping and postage expense, office supplies expense, and
      employee recruiting and relocation costs of approximately $4 million and
      $6 million, respectively, for the three and six months ended June 30,
      2000, mainly due to the Company's implementation of tighter cost controls
      and its decreased employee headcount related to the higher than normal
      employee turnover associated with the Company's Restructuring and Merger.


Depreciation and Amortization Expense

      Depreciation and amortization expense decreased 54.2% to $59 million for
the three months ended June 30, 2000, compared to $129 million for the three
months ended June 30, 1999. Depreciation and amortization expense decreased
37.7% to $122 million for the six months ended June 30, 2000, compared to $196
million for the six months ended June 30, 1999. The decreases in depreciation
and amortization expense resulted primarily from the Company's change in the
depreciable lives of its subscriber devices and certain of its


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<PAGE>   19
 network equipment, effective April 1, 1999. The Company changed the depreciable
lives of its subscriber devices from three years to two years and the
depreciable life of certain of its network equipment from seven years to ten
years. The changes resulted from the Company's review of the historical usage
periods of its subscriber devices and its network equipment and the Company's
expectation regarding future usage periods for subscriber devices considering
current and projected technological advances. The Company determined that the
appropriate useful life of its subscriber devices is two years as a result of
technological advances, customer desire for new pager technology, and the
Company's decreasing ability to redeploy older pager models. The Company
determined that the appropriate useful life of its network equipment is ten
years since this equipment is operational for a longer time period given current
technology. As a result of these changes, depreciation and amortization expense
increased by $69 million, or $0.66 per share (basic and diluted), for the three
and six months ended June 30, 1999. The Company commenced depreciation and
amortization on the assets related to its centralized processing facilities
during the third quarter of 1999. This increased depreciation and amortization
expense by approximately $2 million and $3 million, respectively, for the three
and six months ended June 30, 2000. The Company commenced depreciation and
amortization on the assets related to its advanced messaging operations during
the first quarter of 2000, which increased depreciation and amortization expense
by approximately $6 million and $11 million, respectively, during the three and
six months ended June 30, 2000, and is expected to increase depreciation and
amortization expense by approximately $24 million for the year ending December
31, 2000.

Provision for Asset Impairment

      The Company recorded a provision of $18 million during the quarter ended
March 31, 1999, for the impairment of the assets of the Company's majority-owned
Spanish subsidiaries. See Note 5 to the Company's consolidated financial
statements.

Interest Expense

      Interest expense, net of amounts capitalized, was $47 million for the
second quarter of 2000, compared to $38 million for the second quarter of 1999.
Interest expense, net of amounts capitalized, was $93 million for the six months
ended June 30, 2000, compared to $74 million for the six months ended June 30,
1999. The increases in interest expense were primarily due to a decrease in
capitalized interest, resulting from the completion of the build-out of the
Company's advanced wireless network during the first quarter of 2000, and a
higher level of indebtedness outstanding. The amount of interest capitalized
decreased by $5 million and $10 million, respectively, for the three and six
months ended June 30, 2000, compared to the same periods of 1999. The average
level of indebtedness outstanding during the three and six months ended June 30,
2000 was $2.0 billion, compared to $1.9 billion outstanding during the
corresponding periods of 1999.

Change in Accounting Principle

      The Company adopted the provisions of SOP 98-5 effective January 1, 1999
and recorded a charge of $37 million as a cumulative effect of a change in
accounting principle to write-off all unamortized start-up costs as of January
1, 1999. See Note 4 to the Company's consolidated financial statements.

Adjusted EBITDA

      As a result of the factors outlined above, Adjusted EBITDA decreased 53.8%
to $33 million for the second quarter of 2000, compared to $70 million for the
corresponding period of 1999. Adjusted EBITDA decreased 33.3% to $92 million for
the first six months of 2000, compared to $139 million for the same period of
1999. Adjusted EBITDA and Adjusted EBITDA as a percentage of total revenues less
costs of products sold for second quarter of 2000 were negatively impacted by
the Company's declining revenues (negative $51 million and negative 26.8%,
respectively) and its advanced messaging operations (negative $15 million and
negative 7.7%, respectively). Adjusted EBITDA and Adjusted EBITDA as a
percentage of total revenues less costs of products sold for the six months
ended June 30, 2000 were negatively impacted by the Company's declining revenues
(negative $79 million and negative 19.1%, respectively) and its advanced
messaging operations (negative $22 million and negative 5.4%,


                                       19
<PAGE>   20

respectively). Adjusted EBITDA and Adjusted EBITDA as a percentage of total
revenues less costs of products sold for the three and six months ended June 30,
1999, were negatively impacted by the Company's advanced messaging operations
(negative $11 million and negative 4.5%, respectively, and negative $19 million
and negative 3.9%, respectively).

YEAR 2000 COMPLIANCE

      The Company implemented a task force, and developed a comprehensive plan
to address Year 2000 issues. The Company completed all of the phases for its
critical business processes and, to date, has not experienced any material Year
2000-related errors. The Company believes that all mission critical vendors have
successfully readied their systems for the Year 2000 and, to date, has not
experienced any Year 2000-related errors in its systems.


ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK.

      There have been no material changes from the information provided in Item
7A of the Company's Annual Report on Form 10-K for the year ended December 31,
1999.




                                       20
<PAGE>   21


                           PART II - OTHER INFORMATION


ITEM 1. LEGAL PROCEEDINGS.

      The Company is involved in various lawsuits arising in the normal course
of business. In management's opinion, the ultimate outcome of these lawsuits
will not have a material adverse effect on the Company's business, financial
position, or results of operations.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

     The Company's deteriorating financial results and liquidity have caused it
to be in default of the covenants of all of its domestic debt agreements. On
February 2, 2000 and August 1, 2000, the Company failed to make the semi-annual
interest payments on its 8.875% senior subordinated notes due 2006 (8.875%
Notes) and its 10.125% senior subordinated notes due 2007 (10.125% Notes). As of
March 2, 2000, the non-payment of interest constituted a default under the
indentures of the 8.875% Notes and the 10.125% Notes. On April 17, 2000, the
Company failed to make the semi-annual interest payment on its 10% senior
subordinated notes due 2008 (10% Notes). As a result of these defaults, the
Company's bondholders and lenders under its Credit Agreement had the right to
demand at any time that the Company immediately pay its outstanding indebtedness
in full. On July 14, 2000, three senior subordinated noteholders commenced the
involuntary bankruptcy proceeding against the Company discussed in Part I, Item
2 of this document.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.

(a)   Exhibits.

      The exhibits listed on the accompanying index to exhibits are filed as
      part of this quarterly report.

(b)   Reports on Form 8-K.

      On July 28, 2000, the Company filed a Current Report on Form 8-K dated
      July 14, 2000, disclosing the following:

      (i)   On July 14, 2000, three creditors filed an involuntary petition
            against the Company under Chapter 11 of the United States Bankruptcy
            Code.

      (ii)  On July 23, 2000, the Company had entered into a further amendment
            to the merger agreement with Arch Communications Group, Inc.

      (iii) On July 24, 2000, the Company filed an answer consenting to the
            involuntary petition and the Bankruptcy Court entered an order for
            relief with respect to the Company under Chapter 11 of the
            Bankruptcy Code. Also on July 24, 2000, seven of the Company's
            domestic subsidiaries filed voluntary petitions for relief under
            Chapter 11 of the Bankruptcy Code with the Bankruptcy Court.



                                       21
<PAGE>   22


                                   SIGNATURES



Pursuant to the requirements of Section 13 or 15(d) 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.



                             PAGING NETWORK, INC.




Date: August 10, 2000        By: /s/ John P. Frazee, Jr.
                                ------------------------
                                    John P. Frazee, Jr.
                                    Chairman of the Board of Directors
                                    and Chief Executive Officer
                                    (Principal Executive Officer)







Date: August 10, 2000        By:/s/ Julian B. Castelli
                                ----------------------

                                    Julian B. Castelli
                                    Senior Vice President and Chief
                                    Financial Officer (Principal Financial
                                    Officer and Principal Accounting Officer)



                                       22
<PAGE>   23



                                  EXHIBIT INDEX


<TABLE>
<CAPTION>
   EXHIBIT
   NUMBER                          DESCRIPTION
   -------                         -----------
<S>           <C>
     2.1       Agreement and Plan of Merger, dated as of November 7, 1999, by
               and among the Registrant, Arch Communications Group, Inc., and
               St. Louis Acquisition Corp. (11)

     2.2       Amendment to Agreement and Plan of Merger, dated as of January 7,
               2000, by and among the Registrant, Arch Communications Group,
               Inc., and St. Louis Acquisition Corp. (12)

     2.3       Amendment No. 2 to Agreement and Plan of Merger, dated as of May
               10, 2000, by and among the Registrant, Arch Communications Group,
               Inc., and St. Louis Acquisition Corp. (14)

     2.4       Amendment No. 3 to Agreement and Plan of Merger, dated as of July
               23, 2000, by and among the Registrant, Arch Communications Group,
               Inc., and St. Louis Acquisition Corp. (16)

     3.1       Restated Certificate of Incorporation of the Registrant, as
               amended (1)

     3.3       By-laws of the Registrant, as amended (8)

     4.1       Articles Sixth, Seventh, Eighth, Twelfth, and Thirteenth of the
               Restated Certificate of Incorporation of the Registrant, as
               amended (1)

     4.2       Articles II, III, and VII and Section I of Article VIII of the
               Registrant's By-laws, as amended (8)

     4.3       Form of Indenture (2)

     4.4       Shareholder Rights Agreement (3)

     4.5       First Amendment to the Shareholder Rights Agreement (8)

     4.6       Second Amendment to the Shareholder Rights Agreement (10)

     10.1      1982 Incentive Stock Option Plan, as amended and restated (1)

     10.2      Form of Stock Option Agreement executed by recipients of options
               granted under the 1982 Incentive Stock Option Plan (1)

     10.3      Form of Management Agreement executed by recipients of options
               granted under the 1982 Incentive Stock Option Plan (1)

     10.4      Form of Vesting Agreement executed by recipients of options
               granted under the 1982 Incentive Stock Option Plan (1)

     10.5      Form of Indemnification Agreement executed by recipients of
               options granted under the 1991 Stock Option Plan (1)

     10.6      Form of First Amendment to Vesting Agreement executed by
               recipients of options granted under the 1982 Incentive Stock
               Option Plan (1)

     10.7      Form of First Amendment to Management Agreement executed by
               recipients of options granted under the 1982 Incentive Stock
               Option Plan (1)
</TABLE>


<PAGE>   24


<TABLE>
<CAPTION>
   EXHIBIT
   NUMBER                          DESCRIPTION
   -------                         -----------
<S>           <C>
     10.8      Second Amended and Restated Credit Agreement dated as of June 5,
               1996, among the Registrant, NationsBank of Texas, N.A., Toronto
               Dominion (Texas), Inc., The First National Bank of Boston, Chase
               Securities Inc., and certain other lenders (4)

     10.9      1997 Restricted Stock Plan, as approved by shareowners on May 22,
               1997 (5)

     10.10     Employment Agreement dated as of August 4, 1997 among the
               Registrant and John P. Frazee, Jr. (6)

     10.11     1992 Director Compensation Plan, as amended and restated on April
               22, 1998 (7)

     10.12     Amended and Restated 1991 Stock Option Plan, as approved by
               shareowners on May 21, 1998 (7)

     10.13     Forms of Stock Option Agreement executed by recipients of options
               granted under the 1991 Stock Option Plan (8)

     10.14     Employee Stock Purchase Plan, as amended on December 16, 1998 (8)

     10.15     Severance Pay Plan dated as of January 20, 1999 (8)

     10.16     Amendment No. 2 to Severance Pay Plan dated as of May 3, 2000
               (15)

     10.17     Amendment to Severance Pay Plan dated as of December 9, 1999 (13)

     10.18     Form of Stock Option Agreement executed by recipients of options
               granted under the 1992 Director Compensation Plan (8)

     10.19     Amended and Restated Loan Agreement dated August 5, 1999 among
               Paging Network of Canada Inc., The Toronto-Dominion Bank,
               Canadian Imperial Bank of Commerce, National Bank of Canada, and
               such other financial institutions as become banks (9)

     10.20     Amended and Restated Loan Agreement dated August 5, 1999 among
               Madison Telecommunications Holdings, Inc., The Toronto-Dominion
               Bank, Canadian Imperial Bank of Commerce, National Bank of
               Canada, and such other financial institutions as become banks (9)

     12.1      Ratio of Earnings to Fixed Charges for the three and six months
               ended June 30, 1999 and 2000 (17)

     27.1      Financial Data Schedule (17)
</TABLE>

            ----------

            (1)   Previously filed as an exhibit to Registration Statement No.
                  33-42253 on Form S-1 and incorporated herein by reference.

            (2)   Previously filed as an exhibit to Registration Statement No.
                  33-46803 on Form S-1 and incorporated herein by reference.

<PAGE>   25


            (3)   Previously filed as an exhibit to the Registrant's Report on
                  Form 8-K on September 15, 1994.

            (4)   Previously filed as an exhibit to the Registrant's Quarterly
                  Report on Form 10-Q for the quarterly period ended June 30,
                  1996.

            (5)   Previously filed as an exhibit to the Registrant's Quarterly
                  Report on Form 10-Q for the quarterly period ended June 30,
                  1997.

            (6)   Previously filed as an exhibit to the Registrant's Quarterly
                  Report on Form 10-Q for the quarterly period ended September
                  30, 1997.

            (7)   Previously filed as an exhibit to the Registrant's Quarterly
                  Report on Form 10-Q for the quarterly period ended June 30,
                  1998.

            (8)   Previously filed as an exhibit to the Registrant's Annual
                  Report on Form 10-K for the fiscal year ended December 31,
                  1998.

            (9)   Previously filed as an exhibit to the Registrant's Quarterly
                  Report on Form 10-Q for the quarterly period ended June 30,
                  1999.

            (10)  Previously filed as an exhibit to the Registrant's Quarterly
                  Report on Form 10-Q for the quarterly period ended September
                  30, 1999.

            (11)  Previously filed as an exhibit to the Registrant's Report on
                  Form 8-K on November 17, 1999.

            (12)  Previously filed as an exhibit to the Registrant's Report on
                  Form 8-K on January 20, 2000.

            (13)  Previously filed as an exhibit to the Registrant's Annual
                  Report on Form 10-K for the fiscal year ended December 31,
                  1999.

            (14)  Previously filed as an exhibit to Registration Statement No.
                  333-94403 on Amendment No. 1 to Form S-4 on May 12, 2000.

            (15)  Previously filed as an exhibit to the Registrant's Quarterly
                  Report on Form 10-Q for the quarterly period ended March 31,
                  2000.

            (16)  Previously filed as an exhibit to the Registrant's Report on
                  Form 8-K on July 28, 2000.

            (17)  Filed herewith.