Vertical Analysis

Operating Statement
YEAR ENDED MARCH 31,
----------

------------2001

2000

----------

---------

STATEMENT OF OPERATIONS DATA:

Revenues
Licenses..............................

$354,610

62.80%

$168,467

Services..............................

210,073

37.20%

84,833

Total revenues......................

564,683

100.00%

253,300

Cost of licenses......................

2,582

0.46%

1,426

Cost of services......................

111,165

19.69%

51,441

11,844

2.10%

1,338

223,966

39.66%

101,443

Research and development..............

61,957

10.97%

28,517

General and administrative............

48,420

8.57%

19,871

Acquisition costs and other...........

918,156

162.60%

57,920

Total costs and expenses............

1,378,090

244.05%

261,956

Income (loss) from operations...........

-813,407

-144.05%

-8,656

Interest income (expense), net..........

-538

-0.10%

38

-813,945

-144.14%

-8,618

38,296

6.78%

16,452

Costs and expenses:

Amortization of purchased
technology..........................
Sales and marketing...................

Income (loss) from operations before

income tax expense (benefit)..........
Income tax expense (benefit)............

Net income (loss).......................

($852,241)
==========

Net income (loss) per share diluted.....

($25,070)
=========

-$6.16
==========

Shares used in per share calculation....

-150.92%

($0.24)
=========

138,447
==========

102,332
=========

Vertical Analysis
----------1999
--------

66.51%

$87,362

63.28%

33.49%

50,701

36.72%

100.00%

138,063

100.00%

0.56%

1,020

0.74%

20.31%

31,561

22.86%

0.53%

50

0.04%

40.05%

50,803

36.80%

11.26%
0.00%
7.84%
0.00%
22.87%
0.00%
103.42%
0.00%
-3.42%

13,919

-13,739

10.08%
0.00%
7.59%
0.00%
31.85%
0.00%
109.95%
0.00%
-9.95%

0.02%

664

0.48%

-3.40%

-13,075

-9.47%

6.50%

10,295

7.46%

10,482
43,967
151,802

-9.90%

($23,370)
========
($0.27)
========
87,166
========

-16.93%

Horizontal Analysis

Operating Statement
YEAR ENDED MARCH 31,
----------

------------2001

2000

STATEMENT OF OPERATIONS DATA:

Revenues
Licenses..............................

354,610

110.49% $

168,467

Services..............................

210,073

147.63% $

84,833

----------

Total revenues......................

--------564,683

----------

122.93% $

253,300

---------

Costs and expenses:

Cost of licenses......................

2,582

81.07% $

1,426

Cost of services......................

111,165

116.10% $

51,441

technology..........................

11,844

785.20% $

1,338

Sales and marketing...................

223,966

120.78% $

101,443

Research and development..............

61,957

117.26% $

28,517

General and administrative............

48,420

143.67% $

19,871

Acquisition costs and other...........

918,156

1485.21% $

57,920

Amortization of purchased

----------

Total costs and expenses............

1,378,090

----------

--------426.08% $
---------

261,956

Income (loss) from operations...........

(813,407)

9297.03% $

Interest income (expense), net..........

(538)

-1515.79% $

----------

(8,656)
38

---------

Income (loss) from operations before

income tax expense (benefit)..........

(813,945)

Income tax expense (benefit)............

38,296

==========

Net income (loss).......................

(852,241)

==========
Net income (loss) per share diluted.....

(6.16)

==========
Shares used in per share calculation....

138,447

==========

-9344.71% $
132.77% $

(8,618)
16,452

=========
-3299.45% $

(25,070)

=========
-2466.67% $

(0.24)

=========
35.29% $

102,332

=========

ontal Analysis
----------1999

92.84% $

87,362

67.32% $

50,701

-------83.47% $

138,063

--------

39.80% $

1,020

62.99% $

31,561

2576.00% $

50

99.68% $

50,803

104.88% $

13,919

89.57% $

10,482

31.74% $

43,967

-------72.56% $
--------

151,802

37.00% $

(13,739)

-94.28% $

664

--------

34.09% $

(13,075)

59.81% $

10,295

========
-7.27% $

(23,370)

========
-11.11% $

(0.27)

========
17.40% $

87,166

========

PEREGRINE SYSTEMS, INC.

Horizontal Analysis

CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

MARCH 31,

MARCH 31,

2001

2000

----------

---------

ASSETS
Current Assets:
Cash and cash equivalents.................................

$286,658

755.41%

$33,511

Accounts receivable, net of allowance for doubtful

accounts of $11,511 and $2,179, respectively............
Other current assets......................................

180,372

157.90%

69,940

62,811

175.17%

22,826

---------Total current assets....................................

Property and equipment, net.................................

--------

529,841

319.59%

126,277

82,717

180.05%

29,537

1,192,855

410.85%

233,504

198,353

47.90%

134,112

Goodwill, net of accumulated amortization of $334,178 and

$54,406, respectively.....................................
Other intangible assets, investments and other, net of
accumulated amortization of $24,015 and $1,398,
respectively..............................................

---------$2,003,766
==========
LIABILITIES AND STOCKHOLDERS' EQUITY

-------282.81%

$523,430
========

Current Liabilities:
Accounts payable..........................................

$36,024

Accrued expenses..........................................

81.48%

$19,850

200,886

309.44%

49,064

Current portion of deferred revenue.......................

86,653

135.60%

36,779

Current portion of long-term debt.........................

1,731

2239.19%

74

---------Total current liabilities...............................

Deferred revenue, net of current portion....................

Other long-term liabilities.................................

--------

325,294

207.56%

105,767

8,299

82.16%

4,556

17,197

Long-term debt, net of current portion......................

884

Convertible subordinated notes..............................

--29.67%

262,327

--

---------Total liabilities.......................................

1,257

--------

614,001

450.28%

111,580

----------

--------

--

--

Stockholders' Equity:
Preferred stock, $0.001 par value, 5,000 shares authorized,
no shares issued or outstanding...........................
Common stock, $0.001 par value, 500,000 shares authorized,
160,359 and 109,501 shares issued and outstanding,
respectively..............................................

160

45.45%

110

Additional paid-in capital..................................

2,342,235

386.99%

480,957

Accumulated deficit.........................................

-917,104

-1313.91%

-64,863

-22,151

-3167.11%

-678

Unearned portion of deferred compensation...................

Cumulative translation adjustment...........................

-3,950

-493.09%

-666

Treasury stock, at cost.....................................

-9,425

-213.12%

-3,010

---------Total stockholders' equity..............................

1,389,765

-------237.44%

---------$2,003,766

411,850
--------

282.81%

$523,430

PEREGRINE SYSTEMS, INC.

CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

Vertical Analysis
MARCH 31,

MARCH 31,

2001

2000

ASSETS
Current Assets:
Cash and cash equivalents.................................

$286,658

14.31%

$33,511

Accounts receivable, net of allowance for doubtful

accounts of $11,511 and $2,179, respectively............
Other current assets......................................

180,372

9.00%

69,940

62,811

3.13%

22,826

---------Total current assets....................................

Property and equipment, net.................................

--------

529,841

26.44%

126,277

82,717

4.13%

29,537

1,192,855

59.53%

233,504

198,353

9.90%

134,112

Goodwill, net of accumulated amortization of $334,178 and

$54,406, respectively.....................................
Other intangible assets, investments and other, net of
accumulated amortization of $24,015 and $1,398,
respectively..............................................
Total Assets

$2,003,766
==========

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:

100.00%

$523,430
========

Accounts payable..........................................

$36,024

Accrued expenses..........................................

1.80%

$19,850

200,886

10.03%

49,064

Current portion of deferred revenue.......................

86,653

4.32%

36,779

Current portion of long-term debt.........................

1,731

0.09%

74

---------Total current liabilities...............................

Deferred revenue, net of current portion....................

Other long-term liabilities.................................

--------

325,294

16.23%

105,767

8,299

0.41%

4,556

17,197

Long-term debt, net of current portion......................

884

Convertible subordinated notes..............................

262,327

0.86% -0.04%
13.09% --

---------Total liabilities.......................................

1,257

--------

614,001

30.64%

111,580

----------

--------

--

--

Stockholders' Equity:
Preferred stock, $0.001 par value, 5,000 shares authorized,
no shares issued or outstanding...........................
Common stock, $0.001 par value, 500,000 shares authorized,
160,359 and 109,501 shares issued and outstanding,
respectively..............................................

160

0.01%

110

Additional paid-in capital..................................

2,342,235

116.89%

480,957

Accumulated deficit.........................................

-917,104

-45.77%

-64,863

-22,151

-1.11%

-678

-3,950

-0.20%

-666

Unearned portion of deferred compensation...................

Cumulative translation adjustment...........................

Treasury stock, at cost.....................................

-9,425

-0.47%

---------Total stockholders' equity..............................

1,389,765

-------69.36%

---------$2,003,766

-3,010

411,850
--------

100.00%

$523,430

6.40%

13.36%
4.36%

24.12%

5.64%

44.61%

25.62%
100.00%

3.79%
9.37%
7.03%
0.01%

20.21%

0.87%

0.24%

21.32%

0.02%
91.89%
-12.39%
-0.13%
-0.13%

-0.58%

78.68%

100.00%

Peregrine Competitors Consolidated analysis

% change in Revenue 2000-2001

IBM
-2.83%

Microsoft
-13.98%

% change in Net income 2000-2001

-4.57%

-17.37%

Peregrine
122.93%
-3299.50%