2003 年 2 月 13 日
株式会社インターネットイニシアティブ IR 室
Tel. 03-5259-6500
Fax. 03-5259-6311
Email: ir@iij.ad.jp
本資料は日本の方々の便宜性のために作成した簡易版です。7 ページ目より正式決算発表資料（英文）が続きますので、そちらもあわせてご参照いただけますよう、お願い申し上げます。

2002 年度第 3 四半期（10 - 12 月）の決算発表（抄訳）
本決算発表に伴うカンファレンス・コールの模様を 2003 年 2 月 13 日 23:00 よりインターネット上（URL: www.vcall.com）で公開しております。
2002 年度第 3 四半期 (10-12 月) の決算発表 要約
・2002 年度第 3 四半期の売上高は 106 億円（前年同期比 6.3% 増、前期と同値）を達成。
・営業損失は 567 百万円（前年同期は営業利益 151 百万円、前期は営業損失 194 百万円）。ブロードバ
ンド接続の普及によるインターネット・トラフィックの急増を背景に、IIJ では昨年夏から CDN（ブロードバン
ド・コンテンツに特化した配信網）構築など戦略的なネットワーク・インフラ強化を実施しており、これに関連した先行費用負担が原因である。こうした諸施策は今後の更なる成長に資するものであるが、コストに見合った売上高が実現するでまでには 6-9 ヶ月のタイムラグがあり、一時的に営業損失が拡大した。
・EBITDA は 349 百万円。
・2002 年度第４四半期の売上高は過去最高の 125〜130 億円の見込み。営業損益は大幅改善見込み。
・2002 年度通期の売上高は、前年度比 10% の成長を達成する見込み。
・2003 年 3 月末までの実施を目処に、IIJ では資本強化の準備を進めている。

概況
概況「ブロードバンド市場」「エンタープライズ市場」に引き続き注力している。最近では、ぷらら、パナソ
ニック・ハイホー、日立グループ、リコーグループからの大型案件を受注した。
顧客基盤 今四半期におけるIIJ上位150 顧客からの売上は、同売上高全体の約半分を占めている。この上位150社がどの程度幅広くIIJサービスを利用しているかを示す「サービス併用率」は以下のとおり。
2002 年度第 3 四半期

専用線接続サービス

IIJ 上位 150 顧客のサービス併用率(単位 : %)

付加価値サービス

システムインテグレーション

データセンターサービス

67

53

25

例： 専用線接続サービスを契約している上位150社の顧客のうち、67% が併せて付加価値サービスも契約している

IIJグループではデータセンター関連サービスのマーケティング活動に注力しており、今後はこのサービス併用率が更にあがっていくことを予測している。
ネットワーク・サービス ① ネットワーク事業者向けのOEM サービスは、着実に契約数を増やしている。②
CATV事業者向けのインターネット接続サービスは顧客基盤を更に拡大しており、契約事業者数を46社に伸ばした。これは国内CATV インターネット市場の60% に相当する。③中小企業向けの比較的安価な10M100M接続サービスである「IIJ Fiber Access/F」が引き続き契約数を伸ばしている。
データセンターサービス 03年１月、「ネットワーク」「システム」「設備」「運用」の各サービス・リソースを完備したIIJグループの新しいデータセンターが稼動を開始した（
横浜第一データセンター、埼玉第一データセンター ）。各
種ネットワークサービス提供の中核となる場所として、今後ともデータセンターサービスおよびデータセンター
設備を活用した新サービスの開発を推進していく。
SIサービスコンポーネント型のSI事業で培ったノウハウをもとに、新しいデータセンターサービス「リソース・オンデマンドDCサービス」の本格的な開発に着手した。

（ご参考）統計値について
表 1. 契約数
IP サービス

64kbps – 128kbps
192kbps – 768kbps

1Mbps – 2Mbps
3Mbps – 1.2Gbps
インターネットデータセンター接続サービス契約数(*3)
その他 (*4)

3Q02
130
37
279
212
139
3,922
4,719

2Q02
111
30
266
205
129
3,568
4,309

3Q01
176
46
269
131
100
2,516
3238

82,193
370,543452,736

84,432309,950
394,382

91,924
114,676
206,600

専用線接続サービス 合計(*3)
インターネットデータセンター接続サービスに、ホスティングサービスは含まれていない。
(*4)
その他：IIJ FiberAccess/F、IIJ Ethernet Standard、IIJ DSL/F、IIJT1 スタンダード、IIJ エコノミー
IIJ4U (個人向けダイアルアップ接続サービス)
その他 ダイアルアップ接続サービス
ダイアルアップ接続サービス 合計
表 2. 専用線サービスの売上高内訳
IP サービス＋インターネットデーターセンター接続サービス
その他

(百万円)

3Q02
2,548
856

2Q02
2,657
889

3Q02
23.3
7.0
30.3

2Q02
18.0
4.7
22.7

表 3. 契約帯域数の総和
専用線接続サービス
インターネットデータセンター接続サービス
契約帯域合計(単位: Gbps)

表 4. バックボーンコスト
国際バックボーンコスト
国内バックボーンコスト

3Q01
7.7
0.7
8.4
(百万円)

3Q02
432
902

2Q02
448
815

表 5. その他
Adjusted EBITDA
設備投資（capitalized leases を含む）
減価償却費

3Q01
2,520
1020

3Q02
349
1,519
943

3Q01
536
772
( 百万円)

2Q02
662
1,504
884

3Q01
904
804
783

注意事項：この資料には、1995 年米国民事証券訴訟改革法（
Private Securities Litigation Reform Act of 1995）の「セーフハーバー」
規定に定義する「将来性の見通しに関する記述（
forward-looking statements）」に該当する情報が記載されています。このプレゼンテーシ
ョン資料の記載のうち、過去または現在の事実に関するのも以外は、将来の見通しに関する記述に該当します。将来の見通しに関する記述は、現在入手可能な情報に基づくIIJ 経営陣の仮定および判断に基づくものであり、これには既知または未知のリスクおよび不確定性が内在しています。IIJ の実際の活動または業績は、今後、将来の見通しに関する記述に示されたところと大きく異なる可能性があります。投資家の皆様におかれましては、1934 年米国証券取引法（Securities Exchange Act of 1934）に基づく今後の報告書等において IIJ が行う開示をご参照ください。

株式会社 インターネットイニシアティブ
四半期連結損益計算書（米国会計基準未監査）

Appendix 1

2002年
年12月期、
月期、2001年
年12月期、
月期、2002年
年9月期
月期
月期、
月期、
JPY/千円単位、
千円単位、USD/千米ドル単位
千米ドル単位 (1)千円単位、前年同四半期比較
2002年12月期
USD (1)
営業収益：
インターネット接続及び付加価値サービス収入：
専用線接続サービス(2)ダイヤルアップ接続サービス
付加価値サービス(2)その他
インターネット接続及び付加価値サービス収入合計

JPY

対営業収益
%

JPY

2001年12月期
対営業収益%

対前年同四半期%

JPY

前四半期比較
2002年9月期
対営業収益 対前四半期%%

28,665
6,536
7,690
3,938
46,8293,404,016
776,173
913,152
467,6295,560,970

32.2%
7.4
8.6
4.4
52.6

3,539,924
883,698
812,157
379,1885,614,967

35.6%
8.9
8.2
3.8
56.5

(3.8%)(12.2)
12.4
23.3
(1.0)

3,546,372
791,738
893,135
467,976
5,699,221

33.6%
7.5
8.4
4.4
53.9

(4.0%)
(2.0)
2.2
(0.1)
(2.4)

31,023
11,104
88,956

3,683,978
1,318,630
10,563,578

34.9
12.5
100.0

3,391,122
927,545
9,933,634

34.2
9.3
100.0

8.6
42.2
6.3

3,094,168
1,774,953
10,568,342

29.3
16.8
100.0

19.1
(25.7)
0.0

43,62026,722
10,56180,903

5,179,920
3,173,211
1,254,073
9,607,204

49.0
30.0
11.9
90.9

4,774,788
2,865,601
832,972
8,473,361

48.1
28.8
8.4
85.3

8.5
10.7
50.6
13.4

5,081,186
2,681,946
1,648,106
9,411,238

48.1
25.3
15.6
89.0

1.9
18.3
(23.9)
2.1

7,531
4,308
985
93,727894,340
511,604
116,950
11,130,098

8.5
4.9
1.1
105.4

734,623
493,327
80,946
9,782,257

7.4
5.0
0.8
98.5

21.7
3.7
44.5
13.8

743,230
514,082
93,574
10,762,124

7.0
4.9
0.9
101.8

20.3
(0.5)
25.0
3.4

営業利益（損失）(4,771)(566,520)(5.4)

151,3771.5(474.2)(193,782)

(1.8)

192.3

その他の費用

(1,920)(228,058)(2.1)(113,705)

(1.1)

100.6

(160,247)

(1.5)

42.3

税引前当期利益（損失）(6,691)(794,578)(7.5)

37,6720.4(2,209.2)(354,029)

(3.3)

124.4

法人税等、住民税及び事業税
少数株主損益持分法による投資損失

1,161
352
(11,582)

137,936
41,813(1,375,338)

1.3
0.4(13.0)(154,239)(3,985)(1,217,755)

(1.5)
0.0
(12.3)(189.4)(1,149.3)
12.9

514,872
23,146(1,480,411)

4.9
0.2(14.0)(73.2)
80.6
(7.1)

当期損失

(19,082)(2,266,039)(21.4%)(1,029,829)(10.4%)

120.0%(2,326,166)(22.0%)(2.6%)

システムインテグレーション
機器販売
営業収益合計営業費用：
インターネット接続及び付加価値サービス原価システムインテグレーション原価
機器販売原価
売上原価合計
販売費
一般管理費
研究開発費
営業費用合計

1株あたり当期損失
米国預託証券１単位あたり当期損失
期中平均発行済株式総数
期中平均発行済米国預託証券総数(100,802)(50.40)22,48044,960,000(45,811)(22.91)
22,48044,960,000(103,477)(51.74)
22,48044,960,000

注記(1): 2002年12月期につきましては、米ドル換算レート118.75円=1米ドル(2002/12/31)にて参考表示しております。
注記(2): 2002年6月期よりIIJデータセンター接続サービス収入を付加価値サービスから専用線接続サービスに変更しております。2001年12月期についても現在の表示方法に合わせて組替えを行っており、その結果専用線接続サービス収入は組替前と比較し、201,554千円増加しております。

株式会社 インターネットイニシアティブ
四半期累計連結損益計算書（米国会計基準未監査）

Appendix 2

2002年
年12月期累計、年12月期累計
月期累計、2001年
月期累計
月期累計、
JPY/千円単位、
千円単位、USD/千米ドル単位
千米ドル単位 (1)千円単位、前年同四半期累計比較

2002年12月期累計
USD (1)
営業収益：
インターネット接続及び付加価値サービス収入：
専用線接続サービス(2)ダイヤルアップ接続サービス
付加価値サービス(2)その他
インターネット接続及び付加価値サービス収入合計

JPY

2001年12月期累計

対営業収益
%

JPY

対営業収益
%

対前年同四半期%

88,20020,12822,497
11,322
142,147

10,473,722
2,390,179
2,671,448
1,344,530
16,879,879

33.8%
7.7
8.6
4.4
54.5

10,660,201
2,799,812
2,276,654
1,134,795
16,871,462

38.3%
10.1
8.2
4.1
60.7

(1.7%)(14.6)
17.3
18.5
0.0

85,113
33,634
260,894

10,107,204
3,994,039
30,981,122

32.6
12.9
100.0

9,023,339
1,900,038
27,794,839

32.5
6.8
100.0

12.0
110.2
11.5

129,294
74,46331,816
235,573

15,353,621
8,842,530
3,778,191
27,974,342

49.6
28.5
12.2
90.3

14,689,111
7,579,795
1,674,735
23,943,641

52.9
27.3
6.0
86.2

4.5
16.7
125.6
16.8

20,101
12,9942,537
271,205

2,386,931
1,543,002
301,304
32,205,579

7.7
5.0
1.0
104.0

2,373,208
1,359,149
251,280
27,927,278

8.5
4.9
0.9
100.5

0.6
13.5
19.9
15.3

営業損失

(10,311)(1,224,457)(4.0)(132,439)

(0.5)

824.5

その他の費用

(7,656)(909,141)(2.9)(605,448)

(2.2)

50.2

税引前当期損失(17,967)(2,133,598)(6.9)(737,887)

(2.7)

189.1

法人税等、住民税及び事業税
少数株主損益持分法による投資損失

6,856
1,111
(36,812)814,109
131,909(4,371,424)

2.6
0.4(14.1)

1,239,416
33,316(3,835,479)

4.4
0.1(13.8)(34.3)
295.9
14.0

当期損失

(60,524)(7,187,222)(23.2%)(5,779,466)(20.8%)

24.4%

システムインテグレーション
機器販売
営業収益合計営業費用：
インターネット接続及び付加価値サービス原価システムインテグレーション原価
機器販売原価
売上原価合計
販売費
一般管理費
研究開発費
営業費用合計

1株あたり当期損失
米国預託証券１単位あたり当期損失
期中平均発行済株式総数
期中平均発行済米国預託証券総数(319,716)(159.86)
22,48044,960,000(257,094)(128.55)
22,48044,960,000

注記(1): 2002年12月期につきましては、米ドル換算レート118.75円=1米ドル(2002/12/31)にて参考表示しております。
注記(2): 2002年6月期よりIIJデータセンター接続サービス収入を付加価値サービスから専用線接続サービスに変更しております。2001年12月期累計についても現在の表示方法に合わせて組替えを行っており、その結果専用線接続サービス収入は組替前と比較し、503,763千円増加しております。

株式会社 インターネットイニシアティブ
四半期連結貸借対照表（米国会計基準未監査）

Appendix 3

2002年
年12月期、
月期、2001年
年12月期、
月期、2002年
年9月期
月期
月期、
月期、
JPY/千円単位、
千円単位、USD/千米ドル単位
千米ドル単位 (1)千円単位、USD (1)

2002年12月期
JPY%

2001年12月期
JPY%

2002年9月期
JPY
%

資産の部
流動資産：
現金及び現金同等物
売掛金
棚卸資産
前払費用
その他流動資産35,96361,517
6,854
7,434
1,144

4,270,613
7,305,169
813,863882,854
135,828

11.4%
19.5
2.2
2.4
0.4

11,166,077
5,830,688
228,063806,515425,411

25.9%
13.5
0.5
1.9
1.0

4,772,753
7,844,256
415,771498,668
141,923

12.2%
20.1
1.1
1.3
0.3

流動資産合計112,912

13,408,327

35.9

18,456,754

42.8

13,673,371

35.0

関連会社投資等
その他投資
有形固定資産等
拘束預金 (2)
敷金保証金
その他資産

38,085
29,151
74,932
42,105
11,533
5,895

4,522,602
3,461,695
8,898,123
5,000,000
1,369,596
699,998

12.1
9.2
23.8
13.4
3.7
1.9

10,386,964
4,814,114
7,609,238
0
1,263,819
638,652

24.1
11.1
17.6
0.0
2.9
1.5

5,896,219
3,751,532
8,617,873
5,000,000
1,392,519
706,828

15.1
9.6
22.1
12.8
3.6
1.8

資産合計

314,61337,360,341

100.0%

43,169,541

100.0%

39,038,342

100.0%

37,97949,287
3,068
4,806
10,105
20,4194,510,000
5,852,779
364,366
570,719
1,200,000
2,424,701

12.1%
15.7
1.0
1.5
3.2
6.5

3,700,214
3,428,098
292,996696,682
1,200,000
1,928,505

8.6%
7.9
0.7
1.6
2.8
4.5

4,832,286
5,131,068
271,557
442,564
1,400,000
2,271,145

12.4%
13.1
0.7
1.1
3.6
5.8

125,664

14,922,565

40.0

11,246,495

26.1

14,348,620

36.7

長期借入金
転換社債
長期リース債務退職給付引当金
その他固定負債

28,631
126,316
29,163632
1,557

3,400,000
15,000,000
3,463,132
75,047
184,847

9.1
40.1
9.3
0.2
0.5

3,600,000
15,000,000
2,969,253
126,085
34,238

8.3
34.7
6.9
0.3
0.1

3,400,000
15,000,000
3,250,922
83,058
153,993

8.7
38.4
8.4
0.2
0.4

負債合計

311,963

37,045,591

99.2

32,976,071

76.4

36,236,593

92.8

少数株主持分7,586

900,837

2.4

1,023,897

2.4

942,650

2.4

59,641
143,733(213,859)
5,549

7,082,336
17,068,353(25,395,691)
658,91518.9
45.7(68.0)
1.8

7,082,336
17,068,353(16,541,800)
1,560,684

16.4
39.5
(38.3)
3.6

7,082,336
17,068,353(23,129,652)
838,06218.1
43.7(59.2)
2.2(4,936)(586,087)(1.6)

9,169,573

21.2

1,859,099

4.8

314,61337,360,341

100.0%

43,169,541

100.0%

39,038,342

100.0%

負債及び資本の部
流動負債：
短期借入金
買掛金及び未払金
未払費用
その他流動負債
1年以内に期限到来の長期借入金
短期リース債務
流動負債合計

資本：
資本金
資本準備金
欠損金
その他有価証券評価差額金等
資本合計
負債、少数株主持分及び資本合計

注記(1): 2002年12月期につきましては、米ドル換算レート118.75円=1米ドル(2002/12/31)にて参考表示しております。
注記(2): 2002年5月末において、株式会社クロスウェイブコミュニケーションズと日本の四銀行との間で締結したキャッシュディフィシエンシーサポート契約に基づき､四銀行中の一行の拘束勘定に50億円を預金しております。

株式会社 インターネットイニシアティブ
四半期連結キャッシュフロー計算書（米国会計基準未監査）

Appendix 4

2002年
年12月期、
月期、2001年
年12月期、
月期、2002年
年9月期
月期
月期、
月期、
JPY/千円単位、
千円単位、USD/千米ドル単位
千米ドル単位 (1)千円単位、
2002年12月期
USD (1)
JPY

2001年12月期

2002年9月期

JPY

JPY(1,029,829)(2,326,166)

営業活動によるキャッシュフロー：当期損失(19,083)(2,266,039)

減価償却費等

7,940

942,854783,194

883,732

持分法による投資損失

11,582

1,375,338

1,217,755

1,480,411

少数株主損益(352)(41,813)

3,985(23,146)

為替差損（差益）276

32,834(379,315)(39,060)

299,428

13,620

投資有価証券評価損等--

売掛金の減少（増加）額4,160

493,961

175,291(972,056)

買掛金及び未払金の増加（減少）額

8,707

1,033,939(1,103,244)

7,462

棚卸資産の減少（増加）額(3,352)(398,092)

784,340(142,950)

法人税等調整額

1,113

132,230(159,611)

509,228

その他
営業活動によるキャッシュフロー(446)(52,956)(8,113)(8,051)

10,545

1,252,256

583,881(616,976)(4,254)(505,169)(162,852)(222,308)

投資活動によるキャッシュフロー：有形固定資産等の取得による支出
関連会社への投資および貸付--(17,497)-

その他投資の取得による支出(239)(28,377)-(33,294)

敷金保証金の返還（支出）194

22,972(373,471)(87,518)

その他

(257)

(30,506)(7,718)2,953(4,556)(541,080)(561,538)(340,167)

長期借入金の返済による支出(1,684)(200,000)--

リース債務の元本返済による支出(5,487)(651,546)(530,423)(601,144)

短期借入金の純増減額(2,714)(322,254)(70,231)

282,164

財務活動によるキャッシュフロー(9,885)(1,173,800)(600,654)(318,980)

現金及び現金同等物に係る換算差額(333)(39,516)

332,421

34,183

現金及び現金同等物の減少額(4,229)(502,140)(245,890)(1,241,940)

現金及び現金同等物の期首残高

40,192

4,772,753

11,411,967

6,014,693

現金及び現金同等物の期末残高

35,963

4,270,613

11,166,077

4,772,753

投資活動によるキャッシュフロー
財務活動によるキャッシュフロー：注記(1): 2002年12月期につきましては、米ドル換算レート118.75円=1米ドル(2002/12/31)にて参考表示しております。

Internet Initiative Japan Inc.
February 12, 2003
Page 1For Immediate Release
For inquiries please contact:
Junko Higasa
IIJ Investor/Media Relations Office
ir@iij.ad.jp or +81-3-5259-6500(Tel)

IIJ Announces 3rd Quarter 2002 Results for the Quarter Ended December 31, 2002-- IIJ continues pursuit of broadband strategies for further growth -Tokyo, February 13, 2003 / New York , February 12, 2003 – Internet Initiative Japan Inc. (Nasdaq: IIJI)(“IIJ”), one of Japan’s leading Internet access and comprehensive network solutions providers, today announced
its financial results for the 3rd quarter of the fiscal year ending March 31, 2003 (“fiscal 2002”). On February 13
at 9:00 am (EST), the Company will host a conference call to discuss the results and its outlook. There will be asimultaneous webcast available at www.vcall.com. A replay will also be available at the same URL.

The 3rd Quarter of FY2002 Results Summary
・ In 3Q02, total revenues totaled to JPY10.6 billion ($89.0 million) despite the prolonged
sluggishness of Japan’s economy. This represents an increase of 6.3% compared to 3Q01 and nochange from 2Q02.
・ IIJ reported an operating loss of JPY567 million ($4.8 million) in 3Q02. This represents a decrease
from JPY151 million of operating profit in 3Q01, and a decrease from the JPY194 million operating
loss in 2Q02. The results reflected IIJ’s evolving strategic initiatives in Japan’s growing broadband
market, which includes reinforcing IIJ’s network infrastructure for broadband transmission.
・ Adjusted EBITDA (1) was JPY349 million.
・ For 4Q02, IIJ expects total revenues to be between JPY12.5 billion ($105.3 million) and JPY13.0
billion ($109.5 million), the highest amount of quarterly revenue in IIJ’s history. The revenue
growth is expected to be driven by a strong Systems Integration (SI) business. The Company
expects its operating profitability to improve in 4Q02.
・ For the full 2002 fiscal year, IIJ expects total revenues to grow by approximately 10% compared tofiscal 2001.
・ IIJ is currently preparing for a series of improvements to its capital structure, which will be effectiveby the end of March 2003.
(1)

Adjusted EBITDA represents operating income (loss) plus depreciation and amortization. Adjusted EBITDA is provided because it is ameasure commonly used by investors to analyze and compare companies on the basis of operating performance. Adjusted EBITDA is nota measurement of financial performance under generally accepted accounting principles and should not be construed as a substitute for
operating income, net income or cash flows from operating activities for purposes of analyzing our operating performance, financial
position and cash flows. Our adjusted EBITDA is not necessarily comparable with similarly titled measures for other companies.
Note: Translations of Japanese yen amounts into US dollars are solely for the convenience of readers outside of Japan and have been
made at the rate of JPY118.75 = US$1, the approximate exchange rate on December 31, 2002.

Overview of 3Q02 Results and Business Outlook
Overview “The 3Q02 results demonstrate that our strategic focus on the “broadband ” and “enterprisemarkets” is successfully contributing to our steady growth, despite the prolonged sluggishness ofJapan’s economy,” said Koichi Suzuki, President and CEO of IIJ. “In the changing environment for
IP-based technology, the IIJ Group will continue to strengthen its position as a top IP engineering
company, while capitalizing on the demand in the high-end corporate market.”
Recently, IIJ acquired various large-scale outsourcing contracts, including contracts with Plala
Networks- an affiliate of NTT East, Panasonic hi-ho of Matsushita Electronic group, Hitachi group andRicoh group.

Internet Initiative Japan Inc.
February 12, 2003
Page 2
Operating Profitability Although IIJ expects improvement s in its operating profitability in 4Q02, it
has posted operating losses for the past three consecutive quarters. “For our revenue s to grow further infiscal 2003, we decided to pursue a strategy of strengthening our network infrastructure through theconstruction of the CDN (Content Delivery Network) platform, which is the primary cause of ourincreased expenses,” said Yasuhiro Nishi, CFO of IIJ. “We expect that there is approximately a six tonine month time-lag until such broadband projects becoming profitable. We believe that the current
strategy will strengthen our position as a leader in the broadband market in Japan. ”
Capital Improvement Plan IIJ is currently preparing for a series of capital improvements that willsecure the financial means to allow IIJ to continue the implementation of its growth strategy, which
will be effective by the end of March 2003. Details for the plan will be announced when finalized.
Discussion with PoweredCom IIJ, its 37.9% affiliate Crosswave Communications (“Crosswave ”)
and PoweredCom, Inc. (“PoweredCom”) agreed to extend the period for discussions regarding a
possible integration of their businesses until the end of March 2003.
Market Prospects
Customer Base In 3Q02, revenues from IIJ’s top 150 customers accounted for approximately half oftotal revenues. IIJ has been actively cross-selling its Value-added Services, SI services and Data
Center Services to existing users of its Dedicated Access Services. Cross-selling rates for 3Q02 aredetailed in the following table. Going forward, IIJ expects its strategic marketing focus on Data Center
Services to further increase the cross-selling rates.
IIJ Approximate Cross-selling rates among Top150 Customers in 3Q02
Value-added Service
Dedicated Access Service

67(Unit: %)SI

Data Center Service

53

25

For example, in 3Q02, 67% of customers who use IIJ’s Dedicated Access Service also signed up for IIJ’s Value-added Service.

Broadband Solutions In the ISP market, IIJ expects to continue acquiring network-outsourcing
contracts from major ISPs and network operators in Japan. In the CATV market, IIJ expects tocontinue increasing the number of its CATV customers. As of December 2002, the number of CATV
operators connected to IIJ was 46, which represents approximately 60% of Japan’s CATV Internet
market. In the SME (Small and Medium-sized Enterprise) market, IIJ expects to increase the numberof contracts in second-tier package services with 10Mbps or 100Mbps access, such as with IIJ Fiber
Access/F service. The number of contracts for 3Q02 is provided in Table 1 in the financial section.
Number of broadband subscribers in Japan
Type of broadband connectivity
December 02
ADSL (Asymmetric Digital Subscriber Line)
5,646
CATV Internet
1,954
FTTH (Fiber to The Home )206

September 02
4,223
1,800
114

(Unit: Thousand)December 01
1,525
1,303
n.a

Source: Ministry of Public Management, Home Affairs, Posts and Telecommunications.

WAN Solutions In response to the growing demand in the enterprise WAN (Wide Area Network)
market, IIJ continues to maintain its marketing focus on IIJ VPN Standard, a VPN (Virtual Private
Network) service for SMEs. At the same time, IIJ is also focusing on supporting sales activities of
Crosswave ’s WAN solution, Wide-area Ethernet Standard, which is for larger-scale customers.
Data Center Solutions IIJ recently opened two data centers in Yokohama and Saitama. The Company
expects the new data centers to function as the hub for the IIJ Group’s suite of total network solution
services, and to help differentiate the Company from other conventional service providers. As
operations for network applications become more mission-critical, IIJ expects revenues from its
application gateway services that utilize data center facilities to grow. The IIJ Group’s gateway
solutions include IIJ Mail Gateway Service (email virus check, email audit and email archive), IIJ Web
Filtering Service (web access control) and IIJ ID Gateway Service (remote access to internal network).

Internet Initiative Japan Inc.
February 12, 2003
Page 3
In February 2003, the IIJ Group acquired a large-scale email-outsourcing contract from the Ricoh
group.
Systems Integration (SI) Services Drawing upon its accumulated experience in component-based SI
service offerings, IIJ Technology, IIJ’s 64.0% subsidiary specializing in the SI business, announced
the development of a new data center service called the Resource on Demand Data Center Service (seedetails in the “3rd Quarter FY2002 Operating Highlights” section). IIJ is positioning the new DC
service as the key feature for data center marketing for the IIJ Group.
Forecasted Financial Performance for 4Q02 For 4Q02, IIJ expects total revenues to be between
JPY12.5 billion and JPY13.0 billion, the highest amount of quarterly revenues in IIJ’s history. The
revenue growth is expected to be driven by strength in the SI business. The Company expects
operating profitability to improve in 4Q02. For the full 2002 fiscal year, IIJ expects total revenues togrow by approximately 10% compared to fiscal 2001.
Status of Overview and Business Outlook
This Overview and Business Outlook contains forward-looking statements and projections such as statement
regarding 4Q02 total revenues and operating profitability that are subject to known and unknown risks anduncertainties that could cause actual results to differ materially from those expressed or implied by these statements.
These risks and uncertainties include, but are not limited to, the factors noted at the end of this release and to the risk
factors and other information contained in IIJ’s filings on Form 20-F and Form 6-K, as well as other filings anddocuments furnished to the Securities and Exchange Commission. IIJ plans to keep this press release publicly
available on its Web site (www.iij.ad.jp), but may discontinue this practice at any time. IIJ intends to publish its next
Overview and Business Outlook in its 4Q02 earnings release, presently scheduled for May 20, 2003. In conjunction
with the 3Q02 earnings announcement, IIJ will hold a webcasted conference made available to the public at
www.vcall.com.

3rd Quarter FY2002 Operating Highlights
Best Service Provider AwardIn December 2002, IIJ was named the “best service provider of year 2002” in a major annual survey
conducted by Nikkei Communications, a leading telecom industry trade magazine. According to thesurvey, which was based on responses from 856 corporations in Japan, IIJ was ranked number one inthree of the four total qualifying categories, including “broadband service”, “dedicated access service”
and “dialup access service.”
Ranking of best service provider survey 2002
Broadband service
Dedicated access service
1
IIJ
IIJ
2
Nifty
Poweredcom
3
NTT Communications
Jens
4
KDDI
Cable & Wireless IDC
5Japan Telecom
Fujitsu

Dialup access service
IIJ
NEC
Nifty
AT&T
NTT Communications
Source: Nikkei Communications December 2002

New Service Developments under the Total Network Solutions Approach
Broadband Solutions In December 2002, IIJ won an outsourcing contract from Plala Networks Inc.
(“Plala”), one of Japan’s leading ISPs (Internet Service Provider), and an affiliate of NTT East. Byutilizing a part of the CDN platform, IIJ provides network infrastructure and account management
functions for Plala’s new service for the retail market. Revenue s from CDN services are recognized asa part of the “Connectivity and value-added services” and “Systems integration services” categories in
IIJ’s financial statements, depending on the specific service requirements.
WAN Solutions In November 2002, IIJ launched an Internet-VPN service called “IIJ VPN Standard”,
which enables corporate customers to construct private networks by utilizing inexpensive broadband
access lines such as ADSL and FTTH. Revenues from this service are recognized as Value-added
services in IIJ’s financial statements. In addition, IIJ expects revenue s to increase for its Connectivity
Services since customers also need Internet connectivity for their VPN constructions.

Internet Initiative Japan Inc.
February 12, 2003
Page 4

Data Center Solutions In November 2002, IIJ announced that it would begin a new data center service
called “Resource on Demand DC Service” starting February 2003. The new service will be comprisedof various network, facility and engineering resources that enable customers to utilize these resources
as much as they need, whenever they need. Fees for the service will depend on customer requirements.
Security Solutions In December 2002, IIJ started a low-cost managed firewall service called “IIJ
Security Lite” that targets SMEs. Also in December 2002, IIJ started a free security scanning service
called “Network Sweep”, which is a promotional service and is available to all customers of IIJ’s
security services at no extra charge. Revenue s from IIJ security solutions are recognized under“Connectivity and Value-added Services” in IIJ’s financial statements.
Router Solutions In November 2002, IIJ introduced a new router product called “SEIL/neu ATM”,
which provides various control functions that are optimized for high quality ATM (AsynchronousTransfer Mode)-based networks for enterprises and telecom carriers. Revenue from SEIL/neu ATM is
recognized as a part of the “Equipment Sales” category in IIJ’s financial statements.
Network Infrastructure Development
In 3Q02, IIJ increased the capacity of eleven of its domestic backbone network lines. IIJ also upgradedits US backbone network that runs between Los Angeles, California and Ashburn, Virginia.
R&D (IPv6)
With IPv6 multicast streaming technologies, IIJ broadcasted a part of the Global IPv6 Summit
programs in December 2002, which marked the first time in Japan that the IPv6 multicast streaming
technologies were used nationwide for IPv6 users, including consumer households.
Key Developments of IIJ Group Companies
Asia Internet Holding Co., Ltd., the Company’s 26.7% affiliate, has completed a capacity increase for
it’s link with Malaysia’s Jaring to 45Mbps. Jaring is one of the largest ISPs in Malaysia.
IIJ America Inc., the Company’s 91.3% owned subsidiary, launched a new security monitoring service
called “Security CheckUp” for companies in the U.S. The new service scans for security holes incustomers’ servers and enterprise networks.
IIJ Media Communications, the Company’s 50.1% owned subsidiary, launched “Easy Pack Live”, an
economical Internet broadcasting service. Revenues from the IIJ-MC service are recognized as a partof the “Systems Integration” category in IIJ’s income statement.
Internet Multifeed Co., the Company’s 26.0% owned affiliate, announced that it would introduce
Japan’s first 10Gbps ethernet interface as a part of its JPNAP Service, Japan’s major distributed IX(Internet exchange) service, starting in January 2003.
3rd Quarter FY2002 Financial Results
Revenues
Revenues in 3Q02 totaled JPY10,564 million, an increase of 6.3% compared to 3Q01, though flatcompared to 2Q02.
Connectivity services and value-added services revenues were JPY5,561 million in 3Q02, a
decrease of 1.0% compared to 3Q01 and a decrease of 2.4% compared to 2Q02.
Dedicated access services revenues were JPY3,404 million in 3Q02, a decrease of 3.8% compared to
3Q01 and a decrease of 4.0% compared to 2Q02. IP services, including Data center connectivity
services, decreased 4.1% in 3Q02 compared to 2Q02, due to the cancellation by a telecom service armof a regional electric power company. Conventional second-tier services, IIJ Economy Service (64128kbps) and IIJ T1 Standard Service (1.5Mbps), also decreased, because customers in the category
have gradually been migrating to new services such as the IIJ FiberAccess/F service (10-100Mbps)
and IIJ DSL/F service (1.5-12Mbps).

Internet Initiative Japan Inc.
February 12, 2003
Page 5Dial-up access service revenues were JPY776 million in 3Q02, a decrease of 12.2% compared to 3Q01
and a decrease of 2.0% compared to 2Q02. The decline in revenues from Dial-up access services has
been offset by the steady revenue growth of IIJ’s various OEM services, which include NTT’s regional
L-mode service and other network services through the CDN platform.
Value-added services revenues increased 12.4% to JPY913 million in 3Q02 compared to 3Q01 and2.2% compared to 2Q02. These increases were mainly due to the revenue growth of security related
services.
Systems integration services revenues increased 8.6% to JPY3,684 million in 3Q02 compared to
3Q01 and 19.1% compared to 2Q02, as revenues from customers in the financial service sector
continued to increase steadily.
Equipment sales revenues were JPY1,319 million in 3Q02, an increase of 42.2% compared to 3Q01
and a decrease of 25.7% compared to 2Q02.
Table 1. Number of Contracts
Internet Access Services
IP Service

64kbps – 128kbps
192kbps – 768kbps
1Mbps – 2Mbps
3Mbps – 1.2Gbps
Internet Data Center Connectivity Services (2)Others(3)Total Dedicated Access Services Contracts
(2)
(3)

3Q02
130
37
279
212
139
3,922
4,719

2Q02
111
30
266
205
129
3,568
4,309

3Q01
176
46
269
131
100
2,516
3,238

The figures of Internet data center connectivity services do not include contracts for data center housing services.
Others include, IIJ FiberAccess/F, IIJ Ethernet Standard, IIJ DSL/F, IIJT1 Standard and IIJ Economy.

IIJ4U (dialup services for individuals)
OthersTotal Dial-up Access Services Contracts

82,193
370,543452,736

Table 2. Revenue Breakdown in Dedicated Access Services
3Q02
Total IP Service + DC connectivity
2,548
Others856
Table 3. Contracted Bandwidth
Dedicated Access Services
Internet Data Center Connectivity Service
Total Contracted Bandwidth

3Q02
23.3
7.0
30.3

84,432309,950
394,382

91,924
114,676
206,600(JPY in millions)
2Q02
3Q01
2,657
2,520
889
1,020
(Unit: Giga bits per second)
2Q02
3Q01
18.0
7.7
4.7
0.7
22.7
8.4

Cost and expenses
Cost of total revenues was JPY9,607 million in 3Q02, an increase of 13.4% compared to 3Q01, andan increase of 2.1% compared to 2Q02.
Backbone Costs
International backbone costs were JPY432 million, a decrease of 19.4% compared to 3Q01 and adecrease of 3.6% compared to 2Q02.
Domestic backbone costs were JPY902 million, an increase of 16.7% compared to 3Q01 and anincrease of 10.7% compared to 2Q02. These increases were a result of an increase in connection fees

Internet Initiative Japan Inc.
February 12, 2003
Page 6
with NTT’s regional access networks (Flets), along with the implementation of its broadband strategy
to strengthen its backbone network for providing various broadband network services and solutions
nationwide.
Table 4. Backbone Costs
International Backbone Costs
Domestic Backbone Costs

3Q02
432
902

(JPY in millions)
2Q02
3Q01
448
536
815
772

Cost of SI (Systems Integration) revenues
Cost of SI revenues was JPY3,173 million in 3Q02, an increase of 10.7% compared to 3Q01 and anincrease of 18.3% compared to 2Q02. The gross margin ratio for SI deteriorated to 13.9% in 3Q02
compared to 15.5% in 3Q01, but improved from 13.3% in 2Q02.
Sales and Marketing Expenses
Sales and marketing expenses were JPY894 million in 3Q02, an increase of 21.7% compared to 3Q01
and an increase of 20.3% compared to 2Q02. These increases were a result of the increase inpromotional expenses for the CDN platform services and bad debt expenses of JPY50 million forcertain customers.
General and administrative expenses
General and administrative expenses were JPY512 million in 3Q02, an increase of 3.7% compared to
3Q01 but a decrease of 0.5% compared to 2Q02.
Operating loss
Primarily as a result of the decrease of Dedicated access service revenues and the increase of domestic
backbone costs and sales and marketing expenses, the operating loss increased to JPY567 million in
3Q02 compared to operating income of JPY151 million in 3Q01 and a loss of JPY194 million in 2Q02.
The operating income (loss)-to-revenue ratio for 3Q02 was (-)5.4%, compared to 1.5% in 3Q01, and to(-)1.8% in 2Q02.
Other expenses
Other expenses for 3Q02 were JPY228 million, compared to JPY114 million in 3Q01 and JPY160
million in 2Q02. IIJ recorded a foreign exchange loss of JPY35 million on dollar denominatedmonetary assets due to the appreciation of the Japanese Yen against the U.S. dollar in 3Q02. This
compared to exchange gain of JPY379 million in 3Q01 and to exchange gain of JPY54 million in 2Q02.
In 3Q01, IIJ recorded a JPY299 million of impairment loss on marketable equity security investment,
which offset a foreign exchange gain of JPY379 million.
Income tax expense
Income tax expense for 3Q02 was JPY138 million, compared to benefit of JPY154 million in 3Q01
and an expense of JPY515 million in 2Q02. This is a result of an increase in the valuation allowancefor deferred tax assets attributable primarily to the income tax effect of decreasing unrealized gains
during the quarter on certain available-for-sale-securities.
Equity in net loss of equity method investees
Equity in net loss of equity method investees amounted to JPY1,375 million in 3Q02, compared to
JPY1,218 million in 3Q01, and JPY1,480 million in 2Q02. This is mostly attributed to the equity loss
in Crosswave.
Net loss
Net loss was JPY2,266 million in 3Q02, compared to JPY1,030 million in 3Q01 and JPY2,326 million
in 2Q02. Basic net loss per ADS equivalent was JPY(-)50.40 in 3Q02, compared to JPY(-)22.91 in
3Q01 and JPY(-)51.74 in 2Q02.

Internet Initiative Japan Inc.
February 12, 2003
Page 7
Table 5. Other Financial Statistics
3Q02
349
1,519
943

Adjusted EBITDA
CAPEX, including capitalized leases
Depreciation and amortization(4)
(4)

2Q02
662
1,504
884

(JPY in millions)
3Q01
904
804
783

Depreciation and amortization includes amortization of issuance cost of convertible notes.

Company Information
Founded in 1992, Internet Initiative Japan Inc. (IIJ, NASDAQ: IIJI) is Japan's leading Internet-access andcomprehensive network solutions provider. The company has built one of the largest Internet backbone
networks in Japan, and between Japan and the United States. IIJ and its group of companies provide total
network solutions that mainly cater to high-end corporate customers. Services range from the delivery of new
generation network services over an optical-fiber infrastructure that is optimized for data communications, tothe construction of pan-Asian IP backbone networks. The company also offers high-quality systems integrationand security services, internet access, hosting/housing, and content design.
Statements made in this press release regarding IIJ’s or management’s intentions, beliefs, expectations, orpredictions for the future are forward-looking statements that are based on IIJ’s and managements’ current
expectations, assumptions, estimates and projections about its business and the industry. These forward-looking
statements, such as statements regarding 4Q02 and fiscal year 2002 total revenues and operating profitability, aresubject to various risks, uncertainties and other factors that could cause IIJ’s actual results to differ materially fromthose contained in any forward-looking statement. These risks, uncertainties and other factors include: IIJ’s
expectation that net losses will continue; IIJ’s ability to raise additional capital to cover its accumulated deficit; IIJ’s
ability to continue to increase subscribers to its connectivity services, particularly at higher bandwidths; IIJ’s ability
to generate significant revenues from its other services such as systems integration; the success of IIJ’s investments in
Crosswave; the ability to compete in a rapidly evolving and competitive marketplace; the impact of technologicalchanges in its industry; and other risks referred to from time to time in IIJ’s filings on Form 20F of its annual reportand other filings with the United States Securities and Exchange Commission.

Tables to follow

INTERNET INITIATIVE JAPAN INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)Appendix 1

For the Three Months Ended Dec 31, 2002, Dec 31, 2001 and Sept 30, 2002
(Expressed in Thousands of Japanese Yen (JPY) and U.S. Dollars (USD) Except for Per Share and ADS Data) (1)Year-over-year Comparison
Dec 31, 2002
USD (1)
Revenues:
Connectivity and value-added services:
Dedicated access services (2)Dial-up access services
Value-added services (2)Other
Total connectivity and value-added services

JPY

% of
Total
Revenues

JPY

Dec 31, 2001
% of
Total
Revenues

YOY
Chg %

Sequential Comparison
Sept 30, 2002
% of
Total
QOQ
JPY
RevenuesChg %28,665
6,536
7,690
3,938
46,8293,404,016
776,173
913,152
467,6295,560,970

32.2%
7.4
8.6
4.4
52.6

3,539,924
883,698
812,157
379,1885,614,967

35.6%
8.9
8.2
3.8
56.5

(3.8%)(12.2)
12.4
23.3
(1.0)

3,546,372
791,738
893,135
467,976
5,699,221

33.6%
7.5
8.4
4.4
53.9

(4.0%)
(2.0)
2.2
(0.1)
(2.4)

31,023
11,104
88,956

3,683,978
1,318,630
10,563,578

34.9
12.5
100.0

3,391,122
927,545
9,933,634

34.2
9.3
100.0

8.6
42.2
6.3

3,094,168
1,774,953
10,568,342

29.3
16.8
100.0

19.1
(25.7)
0.0

Costs and expenses:
Cost of connectivity and value-added services
Cost of systems integration revenues
Cost of equipment sales
Total costs

43,62026,722
10,56180,903

5,179,920
3,173,211
1,254,073
9,607,204

49.0
30.0
11.9
90.9

4,774,788
2,865,601
832,972
8,473,361

48.1
28.8
8.4
85.3

8.5
10.7
50.6
13.4

5,081,186
2,681,946
1,648,106
9,411,238

48.1
25.3
15.6
89.0

1.9
18.3
(23.9)
2.1

Sales and marketing
General and administrative
Research and development
Total costs and expenses

7,531
4,308
985
93,727894,340
511,604
116,950
11,130,098

8.5
4.9
1.1
105.4

734,623
493,327
80,946
9,782,257

7.4
5.0
0.8
98.5

21.7
3.7
44.5
13.8

743,230
514,082
93,574
10,762,124

7.0
4.9
0.9
101.8

20.3
(0.5)
25.0
3.4

Operating income (loss)(4,771)(566,520)(5.4)

151,3771.5(474.2)(193,782)

(1.8)

192.3

Other expenses(1,920)(228,058)(2.1)(113,705)

(1.1)

100.6

(160,247)

(1.5)

42.3

Income(Loss) before income tax expense(benefit)(6,691)(794,578)(7.5)

37,6720.4(2,209.2)(354,029)

(3.3)

124.4

Income tax expense(benefit)
Minority interests in consolidated subsidiaries
Equity in net loss of equity method investees

1,161
352
(11,582)

137,936
41,813(1,375,338)

1.3
0.4(13.0)(154,239)(3,985)(1,217,755)

(1.5)
0.0
(12.3)(189.4)(1,149.3)
12.9

514,872
23,146(1,480,411)

4.9
0.2(14.0)(73.2)
80.6(7.1)

Net loss(19,082)(2,266,039)(21.4%)(1,029,829)(10.4%)

120.0%(2,326,166)(22.0%)(2.6%)

Systems integration revenues
Equipment sales
Total revenues

Basic Net Loss Per Share
Basic Net Loss Per ADS Equivalent
Weighted Average Number of Shares
Weighted Average Number of ADS Equivalents(100,802)(50.40)22,48044,960,000(45,811)(22.91)
22,48044,960,000(103,477)(51.74)
22,48044,960,000

Note (1):The translations of Japanese yen amounts into US dollar amounts with respect to the three months ended Dec. 31, 2002 are included solely for the convenience of readers outside Japa
and have been made at the rate of JPY 118.75 =$1, the approximate rate of exchange on Dec 31, 2002.
Note (2):IIJ datacenter connectivity services revenues have been reclassified from value added services revenues into dedicated access services revenues since the 1st quarter of FY200
The 3rd quarter of FY2001 presented has been reclassified to conform to the current presentation and such reclassification resulted in an increase of dedicated access services revenue
by Y201,554, as compared to the previous classification method.

Appendix 2

INTERNET INITIATIVE JAPAN INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)For the Nine Months Ended Dec 31, 2002 and Dec 31, 2001
(Expressed in Thousands of Japanese Yen (JPY) and U.S. Dollars (USD) Except for Per Share and ADS Data) (1)Year-over-year Comparison
Dec 31, 2002

Dec 31, 2001
% of

% of
USD (1)
Revenues:
Connectivity and value-added services:
Dedicated access services(2)Dial-up access services
Value-added services(2)Other
Total connectivity and value-added services

JPY

Total
Revenues

JPY

Total
Revenues

YoY
Chg %

88,20020,12822,497
11,322
142,147

10,473,722
2,390,179
2,671,448
1,344,530
16,879,879

33.8%
7.7
8.6
4.4
54.5

10,660,201
2,799,812
2,276,654
1,134,795
16,871,462

38.3%
10.1
8.2
4.1
60.7

(1.7%)(14.6)
17.3
18.5
0.0

85,113
33,634
260,894

10,107,204
3,994,039
30,981,122

32.6
12.9
100.0

9,023,339
1,900,038
27,794,839

32.5
6.8
100.0

12.0
110.2
11.5

Costs and expenses:
Cost of connectivity and value-added services
Cost of systems integration revenues
Cost of other equipment sales
Total costs

129,294
74,46331,816
235,573

15,353,621
8,842,530
3,778,191
27,974,342

49.6
28.5
12.2
90.3

14,689,111
7,579,795
1,674,735
23,943,641

52.9
27.3
6.0
86.2

4.5
16.7
125.6
16.8

Sales and marketing
General and administrative
Research and development
Total costs and expenses

20,101
12,9942,537
271,205

2,386,931
1,543,002
301,304
32,205,579

7.7
5.0
1.0
104.0

2,373,208
1,359,149
251,280
27,927,278

8.5
4.9
0.9
100.5

0.6
13.5
19.9
15.3

Operating loss

(10,311)(1,224,457)(4.0)(132,439)

(0.5)

824.5

Other expenses(7,656)(909,141)(2.9)(605,448)

(2.2)

50.2

Loss before income tax expense(17,967)(2,133,598)(6.9)(737,887)

(2.7)

189.1

Income tax expense
Minority interests in consolidated subsidiaries
Equity in net loss of affiliated companies

6,856
1,111
(36,812)814,109
131,909(4,371,424)

2.6
0.4(14.1)

1,239,416
33,316(3,835,479)

4.4
0.1(13.8)(34.3)
295.9
14.0

Net loss(60,524)(7,187,222)(23.2%)(5,779,466)(20.8%)

24.4%

Systems integration revenues
Equipment sales
Total revenues

Basic Net Loss Per Share
Basic Net Loss Per ADS Equivalent
Weighted Average Number of Shares
Weighted Average Number of ADS Equivalents(319,716)(159.86)
22,48044,960,000(257,094)(128.55)
22,48044,960,000

Note (1):The translations of Japanese yen amounts into US dollar amounts with respect to the year ended Dec. 31, 2002 are included solely for the convenience of readers outside Japanand have been made at the rate of JPY 118.75 =$1, the approximate rate of exchange on Dec 31, 2002.
Note (2):IIJ datacenter connectivity services revenues have been reclassified from value added services revenues into dedicated access services revenues since the 1st quarter of FY2002.
The 3rd quarter of FY2001 presented has been reclassified to conform to the current presentation and such reclassification resulted in an increase of dedicated access services revenues
by Y503,763, as compared to the previous classification method.

INTERNET INITIATIVE JAPAN INC.
CONSOLIDATED BALANCE SHEETS (UNAUDITED)Appendix 3

As of Dec 31, 2002, Dec 31, 2001 and Sept 30, 2002
(Expressed in Thousands of Japanese Yen (JPY) and U.S. Dollars (USD)) (1)USD (1)ASSETS
Current Assets:
Cash
Accounts receivable, net
Inventories
Prepaid expenses
Other current assets

Dec 31, 2002
JPY%

Dec 31, 2001
JPY%

Sept 30, 2002
JPY%

35,96361,517
6,854
7,434
1,144

4,270,613
7,305,169
813,863882,854
135,828

11.4%
19.5
2.2
2.4
0.4

11,166,077
5,830,688
228,063806,515425,411

25.9%
13.5
0.5
1.9
1.0

4,772,753
7,844,256
415,771498,668
141,923

12.2%
20.1
1.1
1.3
0.3

112,912

13,408,327

35.9

18,456,754

42.8

13,673,371

35.0

38,085
29,151
74,932
42,105
11,533
5,895

4,522,602
3,461,695
8,898,123
5,000,000
1,369,596
699,998

12.1
9.2
23.8
13.4
3.7
1.9

10,386,964
4,814,114
7,609,238
0
1,263,819
638,652

24.1
11.1
17.6
0.0
2.9
1.5

5,896,219
3,751,532
8,617,873
5,000,000
1,392,519
706,828

15.1
9.6
22.1
12.8
3.6
1.8

314,61337,360,341

100.0%

43,169,541

100.0%

39,038,342

100.0%

Short-term borrowings
Accounts payable
Accrued expenses
Other current liabilities
Long-term borrowings-current portion
Capital lease obligations-current portion

37,97949,287
3,068
4,806
10,105
20,4194,510,000
5,852,779
364,366
570,719
1,200,000
2,424,701

12.1%
15.7
1.0
1.5
3.2
6.5

3,700,214
3,428,098
292,996696,682
1,200,000
1,928,505

8.6%
7.9
0.7
1.6
2.8
4.5

4,832,286
5,131,068
271,557
442,564
1,400,000
2,271,145

12.4%
13.1
0.7
1.1
3.6
5.8

Total current liabilities

125,664

14,922,565

40.0

11,246,495

26.1

14,348,620

36.7

Long-term Borrowings
Convertible Notes
Capital Lease Obligations-Noncurrent
Accrued Retirement and Pension Costs
Other Noncurrent Liabilities

28,631
126,316
29,163632
1,557

3,400,000
15,000,000
3,463,132
75,047
184,847

9.1
40.1
9.3
0.2
0.5

3,600,000
15,000,000
2,969,253
126,085
34,238

8.3
34.7
6.9
0.3
0.1

3,400,000
15,000,000
3,250,922
83,058
153,993

8.7
38.4
8.4
0.2
0.4

311,963

37,045,591

99.2

32,976,071

76.4

36,236,593

92.8

7,586

900,837

2.4

1,023,897

2.4

942,650

2.4

Shareholders' Equity:
Common stock
Additional paid-in capital
Accumulated deficit
Accumulated other comprehensive income

59,641
143,733(213,859)
5,549

7,082,336
17,068,353(25,395,691)
658,91518.9
45.7(68.0)
1.8

7,082,336
17,068,353(16,541,800)
1,560,684

16.4
39.5
(38.3)
3.6

7,082,336
17,068,353(23,129,652)
838,06218.1
43.7(59.2)
2.2

Total shareholders' equity(4,936)(586,087)(1.6)

9,169,573

21.2

1,859,099

4.8

314,61337,360,341

100.0%

43,169,541

100.0%

39,038,342

100.0%

Total current assets
Investments in and Advances to Equity Method Investees
Other Investments
Property and Equipment, net
Restricted Cash(2)Guarantee Deposits
Other Assets
Total assets
LIABILITIES ANDSHAREHOLDERS' EQUITYCurrent Liabilities:

Total liabilities
Minority Interest

Total liabilities and shareholders' equity

Note (1): The translations of Japanese yen amounts into US dollar amounts with respect to Dec. 31, 2002 are included solely for the convenience of readers outside Japanand have been made at the rate of JPY118.75 =$1, the approximate rate of exchange on Dec 31, 2002.
Note (2):At the end of May, 2002, IIJ deposited Y5 billion into a restricted account with a participating bank under Cash Deficiency Support Agreement with Crosswave
and four Japanese commercial banks.

INTERNET INITIATIVE JAPAN INC.

Appendix 4

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)For the Three Months Ended Dec 31, 2002, Dec 31, 2001 and Sept 30, 2002
(Expressed in Thousands of Japanese Yen (JPY) and U.S. Dollars (USD)) (1)
Dec 31, 2002
USD (1)

Dec 31, 2001

Sept 30, 2002

JPY

JPY

JPY

Operating Activities:
Net loss(19,083)(2,266,039)(1,029,829)(2,326,166)

Depreciation and amortization

7,940

942,854783,194

883,732

Equity in net loss of equity method investees

11,582

1,375,338

1,217,755

1,480,411

Minority interests in net (loss) income of consolidated subsidiaries(352)(41,813)

3,985(23,146)

Foreign exchange losses (gains)

276

32,834(379,315)(39,060)

Losses on other investments

299,428

13,620Decrease (increase) in accounts receivable

4,160

493,961

175,291(972,056)

Increase (decrease) in accounts payable

8,707

1,033,939(1,103,244)

7,462

Decrease (increase) in inventories(3,352)(398,092)

784,340(142,950)

Deferred income taxes

1,113

132,230(159,611)

509,228

Other
Net cash provided by (used in) operating activities

-

-

(446)

(52,956)(8,113)(8,051)

10,545

1,252,256

583,881(616,976)(4,254)(505,169)(162,852)(222,308)

Investing Activities:
Purchase of property and equipment
Investments in and advances to equity method investees--(17,497)-

Purchase of other investments(239)(28,377)-(33,294)(Payment) refund of guarantee deposits-net

194

22,972(373,471)(87,518)

Other
Net cash used in investing activities(257)(30,506)(7,718)2,953(4,556)(541,080)(561,538)(340,167)(1,684)(200,000)--Financing Activities:
Repayments of long-term borrowings
Principal payments under capital leases(5,487)(651,546)(530,423)(601,144)

Net increase (decrease) in short-term borrowings(2,714)(322,254)(70,231)

282,164

Net cash used in financing activities(9,885)(1,173,800)(600,654)(318,980)

Effect of Exchange Rate Changes on Cash

(333)

(39,516)

332,421

34,183

Net Decrease in Cash

(4,229)(502,140)(245,890)(1,241,940)

Cash, Beginning of Period

40,192

4,772,753

11,411,967

6,014,693

Cash, End of Period

35,963

4,270,613

11,166,077

4,772,753

Note (1): The translations of Japanese yen amounts into US dollar amounts with respect to the three months ended Dec. 31, 2002 are included
solely for the convenience of readers outside Japan and have been made at the rate of JPY118.75 =$1, the approximate rate ofexchange on Dec 31, 2002.