2001 年 11 月 14 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。6 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していただけますよう、お願い申し上げます。

IIJ2001 年度第２四半期（7-9
年度第２四半期（月）決算、営業損益の黒字化を実現― 下半期においても大幅改善を予測、営業損益は 2001 年度通期でも黒字化へ ―本決算発表に伴うカンファレンス・コールの模様を本決算発表に伴うカンファレンス・コールの模様を 2001 年 11 月 14 日 23:00 よりインター
ネット上（）で公開しております。
ネット上（URL: www.vcall.com）で公開しております。
2001 年度第 2 四半期決算発表 要約z

売上高は 95 億円（前年同期比 17.5%増、前期比 14.3%増）を達成。ハイエンド顧客層に対するトータ
ル・ネットワーク・ソリューション戦略が、低迷する日本経済の中での成長維持に効を奏している。

z

日本国内におけるブロードバンド需要の取りこみを反映し、専用線サービス（Dedicated Access
Services）の契約帯域数の総和は 6.4Gbps と大幅増加（前年同期は 2.7Gbps、前期は 4.6Gbps）。

z

コスト削減の最大ターゲットである国際バックボーンコストは、前年同期比で 51.4%減、前期比で28.2%減に。

z

結果として、前期には▲300 百万円だった営業損益は、第 2 四半期において 16 百万円の黒字化を実現。粗利益率は引き続き改善し、14.1%（前年同期は 9.1%、前期は 12.5%）に。EBITDA も前期比
89.2%増の 712 百万円となった。

z

第 3 四半期はシステム・インテグレーション収入増が牽引要因となり、売上高は 100 億円 – 105 億円を達成する見込み。100 億円を超える四半期決算となるのは IIJ としては初めてのことであり、これは前年
同期比約 40%の成長率となる。営業利益は 150 百万円 - 300 百万円、EBITDA は 890 百万円 –1,040 百万円を予測。

z

下半期の利益改善の結果、2001 年度通期においても営業損益黒字化を達成する見込み。

第 2 四半期の概要と第 3 四半期見込みについて＜概況＞ 第2四半期、IIJは景気が低迷するなかで営業損益の黒字化を達成し、強い収益構造に向けての着実な成果を示した。第3四半期については売上高で前年同期比40%を達成すると同時に営業損益を更に改善させる予想であり、継続的な利益率改善の結果として2001年度通期においても営業損益の黒字化を達成できる見込み。
＜コスト＞ 国際バックボーンコストは日米回線の調達交渉の結果、前期比で28.2%減と更なる削減を実現した。国際バックボーンコストの低下傾向は当面継続する見込みであり、2001年度通期で前年度比50%の削減が予想されている。一方、上昇傾向にあった国内バックボーンコストは、国内のブロードバンド需要の強い伸びを反映して、第2四半期において国際バックボーンコストを上回ったが、調達市場の需給関係により2001年度下半期より低下が予想されている。結果として、2001年度通期のバックボーンコスト総額（国際バックボーンコストと国内バックボーンコストの合計）は2000年度通期の同コスト総額を下回る見込みであり、利益率は着実に改善するであろう。
2001 年度第 3 四半期の見込み
売上高
営業利益
EBITDA

10,000 百万円 − 10,500 百万円
150 百万円 − 300 百万円
890 百万円 − 1,040 百万円

（ご参考）統計値について
表 1. 契約数
2Q01

IP サービス

IIJ FiberAccess/F

245

369

192kbps – 768kbps

49

61

104

1Mbps – 2Mbps

258

246

201

3Mbps – 1.2Gbps

123

115

92

2

N/A

N/A

690

662

386

1,335

1,329

1,152

1,171

1,283

1,220

286

45

N/A

(*1)

IP Service 合計

IIJ DSL/F

(*2)

2Q00

213

IIJ T1 スタンダード 1.5Mbps
IIJ エコノミー

1Q01

64kbps – 128kbps

64kbps – 128kbps
1.5Mbps（最大）専用線接続サービス 合計
2,792
2,657
2,372
(*1)
(*2)
IIJ FiberAccess/F は 2001 年 8 月サービス開始
IIJ DSL/F は、2001 年 5 月サービス開始

IIJ4U (個人向けダイアルアップ接続サービス)

94,104

94,802

93,253

その他 ダイアルアップ接続サービス

86,123

66,341

63,917

ダイアルアップ接続サービス 合計

180,227

161,143

157,168

119

116

61

2Q01
3,081

1Q01
3,048

(百万円)
2Q00
2,829

350

339

316

インターネットデータセンターサービス契約数
表 2. 専用線サービス内訳
IP サービス (IP サービスおよび IIJ T1 スタンダード
スタンダード)

IIJ エコノミー + IIJ DSL/F
表 3. 契約帯域数の総和

6.4

4.6

(単位: Gbps)
2Q00
2.7

2Q01
623
805

1Q01
867
774

(百万円)
2Q00
1,283
620

2Q01
712
931
726

1Q01
376
1,076
706

2Q01
専用線接続サービス

1Q01

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

(百万円)
2Q00
10
1,409
667

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）

Appendix 1

2001年
年 9月期、
月期、2000年
年 9月期、
月期、2001年
年 6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、
前年同期比較
2001年9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
ダイヤルアップ接続サービス
付加価値サービス：
データセンタサービス
その他付加価値サービス
付加価値サービス合計
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

% of
Total
Revenues

JPY

2000年9月期% ofTotal
Revenues

YOY
Chg %

JPY

前期比較
2001年6月期% ofTotal
Revenues

QOQ
Chg %

28,778
7,822

3,431,156
932,65336.0%
9.8

3,145,493
1,155,763

38.8%
14.2

9.1%
(19.3)

3,386,912
983,461

40.6%
11.8

1.3%
(5.2)

4,251
3,177
7,428
2,545
46,573506,775
378,815885,590
303,4815,552,880

5.3
4.0
9.3
3.2
58.3

297,349
211,913509,262
109,935
4,920,453

3.7
2.6
6.3
1.4
60.7

70.4
78.8
73.9
176.1
12.9

489,385
391,731
881,116452,126
5,703,615

5.9
4.7
10.6
5.4
68.4

3.6
(3.3)
0.5
(32.9)(2.6)

28,117
5,225
79,9153,352,363
623,064
9,528,307

35.2
6.5
100.0

2,892,535
294,947
8,107,935

35.7
3.6
100.0

15.9
111.2
17.5

2,279,854
349,429
8,332,898

27.4
4.2
100.0

47.0
78.3
14.3

40,65623,484
4,484
68,624

4,847,467
2,799,940
534,575
8,181,982

50.9
29.4
5.6
85.9

4,587,295
2,529,957
252,172
7,369,424

56.6
31.2
3.1
90.9

5.7
10.7
112.0
11.0

5,066,856
1,914,254
307,1887,288,298

60.8
23.0
3.7
87.5

(4.3)
46.3
74.0
12.3

6,876
3,579
702
79,781

819,799
426,792
83,7369,512,309

8.6
4.5
0.8
99.8

888,159
411,643
71,0118,740,237

10.9
5.1
0.9
107.8

(7.7)
3.7
17.9
8.8

818,786
439,030
86,5988,632,712

9.8
5.3
1.0
103.6

0.1
(2.8)
(3.3)
10.2

134

15,9980.2(632,302)(7.8)(102.5)(299,814)(3.6)(105.3)

その他の収益（費用）(3,608)(430,259)(4.5)

440,3885.4(197.7)(61,484)

(0.7)

599.8

税引前当期損失(3,474)(414,261)(4.3)(191,914)

(2.4)

115.9

(361,298)

(4.3)

14.7

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

10,622(46)(11,730)

1,266,458(5,533)(1,398,509)

13.3
(0.1)
(14.7)(899,952)
649(1,045,665)(11.1)
0.0(12.9)(240.7)(952.5)
33.7

127,197
42,834(1,219,215)

1.5
0.5(14.7)

895.7(112.9)14.7

当期損失(25,872)(3,084,761)(32.4%)(336,978)(4.2%)

815.4%(1,664,876)(20.0%)

85.3%

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
営業費用合計営業利益（損失）

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(137,222)(68.61)
22,48044,960,000(14,990)(7.50)
22,48044,960,000

注記(1): 2001年9月期につきましては、米ドル換算レート119.23円=1米ドル(2001/9/28)にて参考表示しております。

(74,060)(37.03)22,48044,960,000

株式会社インターネットイニシアティブ
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）

Appendix 2

2001年
年 9月期、
月期、2000年
年 9月期、
月期、2001年
年 6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)

2001年9月期
JPY

資産の部
流動資産：
現金及び現金同等物
短期投資
売掛金
棚卸資産
前払費用
その他流動資産95,714049,815
8,491
3,388
3,279

11,411,967
0
5,939,468
1,012,403
403,982
390,966

25.5%
0.0
13.3
2.3
0.9
0.9

12,970,293
6,196,408
4,640,987
315,751
269,900
347,245

23.3%
11.1
8.3
0.6
0.5
0.6

12,574,744
0
5,381,435
263,553
473,154493,692

25.9%
0.0
11.1
0.5
1.0
1.0

流動資産合計160,687

19,158,786

42.9

24,740,584

44.4

19,186,578

39.5

関連会社投資等
その他投資
有形固定資産等
敷金保証金
その他資産

97,36439,65063,621
7,468
5,575

11,608,736
4,727,410
7,585,480
890,444664,675

26.0
10.6
17.0
2.0
1.5

12,941,280
9,997,623
6,376,357
848,089
733,160

23.3
18.0
11.5
1.5
1.3

12,690,980
7,766,900
7,348,823
887,636
671,331

26.2
16.0
15.1
1.8
1.4

資産合計

374,365

44,635,531

100.0%

55,637,093

100.0%

48,552,248

100.0%

31,62337,961
1,862
3,066
8,387
15,5433,770,445
4,526,061
222,003
365,625
1,000,000
1,853,146

8.5%
10.1
0.5
0.8
2.2
4.2

7,010,000
4,825,858
189,682279,539
290,000
1,575,712

12.6%
8.7
0.3
0.5
0.5
2.8

5,020,000
4,012,148
281,105
481,9940
1,787,436

10.3%
8.3
0.6
1.0
0.0
3.7

98,442

11,737,280

26.3

14,170,791

25.4

11,582,683

23.9

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

31,871
125,80724,6511,049
221

3,800,000
15,000,000
2,939,079
125,099
26,306

8.5
33.6
6.6
0.2
0.1

1,200,000
15,000,000
2,546,805
132,557
1,282,971

2.2
27.0
4.6
0.2
2.3

3,400,000
15,000,000
2,963,868
124,368
25,941

7.0
30.9
6.1
0.2
0.1

負債合計

282,041

33,627,764

75.3

34,333,124

61.7

33,096,860

68.2

少数株主持分8,554

1,019,912

2.3

802,466

1.5

633,262

1.3

59,401
143,155(130,101)
11,315

7,082,336
17,068,353(15,511,971)
1,349,137

15.9
38.2
(34.7)
3.0

7,082,336
17,068,353(8,430,378)
4,781,192

12.7
30.7
(15.2)
8.6

7,082,336
17,068,353(12,427,210)
3,098,647

14.6
35.1
(25.6)
6.4

資本合計

83,7709,987,855

22.4

20,501,503

36.8

14,822,126

30.5

負債、少数株主持分及び資本合計

374,365

44,635,531

100.0%

55,637,093

100.0%

48,552,248

100.0%%

2000年9月期
JPY%

2001年6月期
JPY%

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

注記(1): 2001年9月期につきましては、米ドル換算レート119.23円=1米ドル(2001/9/28)にて参考表示しております。

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）

Appendix 3

2001年
年9月期、
月期、2000年
年9月期、月期、2001年
年6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、2001年9月期
JPY
USD (1)
営業活動によるキャッシュフロー：当期損失
減価償却費等持分法による投資損失
少数株主損益
為替差損（差益）
売掛金の減少（増加）額
買掛金及び未払金の増加（減少）額
法人税等調整額
その他
営業活動によるキャッシュフロー
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
関連会社投資等の取得による支出
短期投資の取得による支出
その他投資の取得による支出
短期投資の売却による収入
敷金保証金支出
その他
投資活動によるキャッシュフロー

2000年9月期
JPY

2001年6月期
JPY(25,872)
6,091
11,73046
1,498(4,752)
4,309
10,607(6,036)(2,379)(3,084,761)
726,278
1,398,509
5,533
178,577(566,601)
513,802
1,264,707(719,638)(283,594)(336,978)666,798
1,045,665(649)(255,921)(155,613)
1,659,494(903,938)(155,226)
1,563,632(1,664,876)
706,463
1,219,215(42,834)(22,776)
15,781(298,183)
121,705(265,574)(231,079)(3,303)(2,693)(1)(393,770)(321,094)(100)(179,145)

-

-

(23)
(169)
(6,189)(2,794)(20,141)(737,899)(524,792)(4,565,400)(8,291,392)(70,000)
8,291,424(43,732)
138,746(5,065,146)-(49,500)-(50,353)(23,265)(302,263)

財務活動によるキャッシュフロー：長期借入れによる収入
長期借入金の返済による支出
リース債務の元本返済による支出
短期借入金の純減額
少数株主の増資引受けによる払込額
財務活動によるキャッシュフロー

11,742

1,400,000(4,152)(10,480)3,145
255(494,991)(1,249,555)
375,000
30,454--(1,295,524)(475,813)

現金及び現金同等物に係る換算差額(1,439)(171,738)

106,449

13,192

現金及び現金同等物の減少額(9,752)(1,162,777)(4,690,589)(995,963)

現金及び現金同等物の期首残高

105,466

12,574,744

17,660,882

13,570,707

現金及び現金同等物の期末残高

95,714

11,411,967

12,970,293

12,574,744

1,000,000(400,000)(485,264)(1,410,260)

注記(1): 2001年9月期につきましては、米ドル換算レート119.23円=1米ドル(2001/9/28)にて参考表示しております。

600,000(475,813)(600,000)

Internet Initiative Japan Inc.
November 13, 2001
Page 1

CONTACT IN JAPANInternet Initiative Japan Inc.
Junko Higasa
Investor Relations/Media Relations

For Immediate Release

CONTACT IN THE UNITED STATESThomson Financial / Carson
Mami Ogawa
Investor Relations

ir@iij.ad.jp

mami.ogawa@tfn.com

81-3-5259-6500

212-701-1824

IIJ Announces Positive Operating Income for the 2nd Quarter 2001 Results- Expects Further Improvement in Operating Income for Full Fiscal 2001 Year Tokyo and New York, November 13, 2001 – Internet Initiative Japan Inc. (Nasdaq: IIJI) (“IIJ”), one ofJapan’s leading Internet access and comprehensive network solutions providers, today announced its
financial results for the second quarter ended September 30, 2001. On November 14 at 9:00am (EST), theCompany will host a conference call, which will be simultaneously webcasted over the Internet atwww.vcall.com. Replay will also be available at the same URL.

The 2nd Quarter of FY2001 Results Summary
z

z

z

z

z

z
(*)

Total revenues for 2Q01 were 9.5 billion, an increase of 17.5% from 2Q00, and 14.3% from
1Q01, which is on the upper end of the Company’s revenue target for the 2nd quarter. Despite
the lagging economy in Japan, this successful growth was mainly due to stronger Systems
Integration (SI) revenues in conjunction with the Company’s total network solutions
approach for its targeted high-end corporate customers.
Contracted bandwidth in Dedicated Access Services was 6.4Gbps, an increase from 2.7Gbps
from 2Q00 and 4.6Gbps from 1Q01, demonstrating the strength of the Company’s broadband
network services, which serve as the basis to grow its network solutions business.
International backbone costs, the Company’s largest cost reduction target, further declined
by 51.4% from 2Q00 and 28.2% from 1Q01 through the Company’s continuous focus on cost
reduction initiatives to improve profitability.
The Company turned positive on an operating basis with JPY16 million in operating income
from an operating loss of (-) JPY300 million in 1Q01. Gross margin for 2Q01 continued to
improve to 14.1% from 9.1% in 2Q00 and from 12.5% in 1Q01. EBITDA(*) also continued to
improve to JPY712 million, a 89.2% increase from 1Q01.
For 3Q01, IIJ expects total revenues to be between JPY10.0 billion and JPY10.5 billion,
exceeding the JPY10 billion mark for the first time in IIJ’s history and representing
approximately 40% growth from 3Q00. Growth is expected to be driven by stronger SI
revenues despite the typical seasonality experienced in the third quarter. Operating income isexpected to be between JPY150 million and JPY300 million, and EBITDA between JPY890
and JPY1,040 million.
IIJ reaffirms that it continues to expect to report positive operating income for the fiscal 2001.
EBITDA represents operating income (loss) plus depreciation and amortization.

Internet Initiative Japan Inc.
November 13, 2001
Page 2
Overview and Business Outlook
Overview of the 2Q Results and Business Outlook“This quarter marked a milestone for the Company by achieving positive operating income, thus
demonstrating our capability to turn the business profitable despite the lagging macro economy inJapan,” said Koichi Suzuki, President and CEO of IIJ. “A key advantage of our industry is thatbackbone operators, in general, can continue to enjoy stable profitability once their cost structure
is improved. Today, thanks to steady revenue growth and the easing burden of our international
backbone costs, we expect total revenues in the next quarter to grow by 40% from 3Q00, andfurther improvement in operating income in the 3Q01 and thereafter. Thus, we expect to achieve
positive operating income for the full fiscal 2001 year.”“In this quarter, we successfully realized a further decline in our international backbone costs by
28.2% from 1Q01, through continuous renegotiations of Japan-US bandwidth procurement
contracts with several cable carriers. We expect further declines in our international backbone
costs over the next couple of quarters, and expect an approximate 50% decline in this segment for
the full fiscal 2001 on a year over year basis,” said Yasuhiro Nishi, CFO of IIJ. “On the other hand,the amount of domestic backbone costs surpassed that of international backbone costs in thisquarter, reflecting the growth of the Japanese broadband sector. However, we foresee a gradualdecrease in the domestic backbone costs in the second half of the year as we are already benefitingfrom the price reductions driven by competition in the domestic bandwidth procurement market.
We expect total cost of connectivity services, which includes domestic and international backbone
costs, for full fiscal 2001 to be less than that of last fiscal year, and thus steadily contribute toimproving our profitability.”
Anticipated Financial Performance for the 3rd Quarter (JPY in millions)
The 3rd Quarter of the Fiscal 2001
Revenues
10,000 to 10,500
Operating Income
150 to 300
EBITDA
890 to 1,040
Strategies under Sluggish Economy in Japan for the Second Half of Fiscal 2001 Year
Although the macro economy in Japan remains soft, IIJ expects further top line growth in thesecond half of fiscal 2001 by continuously capturing strong demand for newly introduced networkarchitectures for mission critical network systems. To address the growing market, IIJ continues toleverage its expertise in IP (Internet Protocol) technologies and its leading position in the high-end
corporate market by strengthening its quality-focused broadband network services, reinforcing its
total network solutions approach, and enhancing its customer relations.
Strengthening Quality-focused Broadband Network Services:
As a result of success in capturing the growing demand for IIJ’s quality-focused broadband
network services, within IP Services, average bandwidth per contract increased by 2.5 times from
2Q00, as did the average revenue per contract by 15% from 2Q00. “Despite strong growth for ourhigher bandwidth services, we anticipate revenue growth from Connectivity Services for thesecond half of 2001 to be modest due to the decrease in unit price per bit,” said Nishi. “However,
IIJ’s success in promoting its broadband network services, which utilize the Company’s IP
technological expertise, continues to serve as the basis for capitalizing other IIJ services.”

Internet Initiative Japan Inc.
November 13, 2001
Page 3In order to expand its operation in broadband services, IIJ has leveraged its strategic relations invarious fields. For example, in October, IIJ announced a tie-up with Japan Research Institute(“JRI”), a think-tank of the Sumitomo-Mitsui Banking Corporation group, to provide one-stop
corporate reengineering solutions, through which IIJ provides broadband network services to JRI
customers. Also, in November, IIJ announced that a content delivery consortium, CDN JAPAN,
started distribution of broadband content over IIJ broadband platform HSMN (High Speed Media
Network). By leveraging strategic relations with CDN JAPAN, IIJ is able to further promote its
connectivity services for regional broadband network operators in Japan, as well as its Internet
data center services and SI services for broadband content providers.
Reinforcement of its Total Network Solutions Approach
IIJ continues to reengineer its total network solutions approach through cooperation with the IIJ
Group companies, whereby combining the three business operations, namely “network services,”“SI services” and “operation and management services”. Within network services, the IIJ Group
provides comprehensive network services, with Internet services by IIJ, nationwide LAN service
by Crosswave (its 37.9% affiliate), intra-Asia connectivity by Asia Internet Holding (its 26.7%
affiliate), and value-added Internet connectivity in the U.S. by IIJ America (its 88.2% subsidiary).
For the SI services, IIJ and IIJ Technology (its 64.1% subsidiary) have newly allocated their toptier human resources to the growing new network systems market for corporations. With this new
operational focus, revenues from SI services are expected to be stronger in the second half of theyear, as IIJ acquires contracts for large-scale SI projects by leveraging its SI know-how in mission
critical network systems. Within operation and management services, IIJ is strengthening theoperation of Net Care (its 52.5% subsidiary) by closely aligning itself with its strategic
shareholders, including JGC Corporation, one of the world’s six largest engineering groups.
Enhancement of Customer Relations
IIJ’s strong customer base has enabled the Company to maintain strong revenue growth, while
strategically positioning itself to capitalize on the anticipated increase in corporate investment in
new network systems. “We continue to strengthen our corporate customer base of 6,000 byenhancing customer satisfaction levels through offering our total network solutions,” said Suzuki.
IIJ’s top 40 customers operate in manufacturing, financial services and telecommunications andinclude Toyota, Sharp, Sanwa Bank, NTT Docomo and Japan Telecom.
Status of Overview and Business Outlook
This Overview and Business Outlook contains certain forward-looking statements and projections that are
subject to known and unknown risks and uncertainties that could cause actual results to differ materially fromthose expressed or implied by such statements. These risks and uncertainties include, but are not limited to, thefactors noted at the end of this release and to the risk factors and other information contained in IIJ’s filings withand other documents furnished to the Securities and Exchange Commission on, e.g., Form 20-F and Form 6-K.
IIJ will keep this press release publicly available on its Web site (www.iij.ad.jp). Unless IIJ is in a quiet period orunless IIJ publishes an update press release stating otherwise, the public can continue to rely on the Overview
and Business Outlook announced in this 2Q01 press release as being IIJ's current expectations on matters
covered. IIJ intends to publish its next Overview and Business Outlook in its 3Q01 earnings release, presently
scheduled for February 12, 2001. In conjunction with the 3Q01 earnings announcement, IIJ will hold a
webcasted conference call, that will be made available to the public for listening over the Company’s website.
Additionally, IIJ will observe a quiet period from February 1, 2001 until publication of the 3Q01 earnings release.
During the quiet period, readers are referred to the documents filed with or furnished to the SEC by IIJ,
specifically the most recent reports on Forms 20-F and 6-K. These documents speak to the timeframe prior to thequiet period only, and are not subject to update by the Company. During the quiet period, IIJ representatives will
not comment on IIJ's financial results or expectations.

Internet Initiative Japan Inc.
November 13, 2001
Page 4
The 2nd Quarter of FY2001 Operating Highlights
Network Infrastructure
In the quarter, IIJ increased the number of its dial-up access points to 75 from 74. Also, IIJ
expanded its IPv6 (Internet Protocol Version 6, or the next generation Internet protocol) network
operation by linking its IPv6 network to NY6IX, 6IIX-NY and 6TAP Palo Alto, which are USbased IPv6 IXs (Internet eXchange points).
Service Development under Total Network Solutions Approach
In the quarter, IIJ launched 7 new services in various network-related markets to enhance its total
network solutions.
Virtual Private Network (VPN) Services: IIJ began offering a Japan-US VPN service, in
cooperation with IIJ America and U.S.-based leading Internet infrastructure provider Genuity Inc.
The VPN service enables Japan-based businesses and organizations to establish secure Internet
communications between locations in Japan and the United States via the Internet.
ADSL and FTTH Services: IIJ launched a new connectivity service “IIJ Fiber Access/F” forregional NTT’s FTTH (Fiber to The Home) lines, with a focus on small and medium sizedenterprise (SME) users. Additionally, IIJ started accommodating regional NTT’s ISDN/ADSL
open lines for its corporate dialup service.
New Consumer Lineup: IIJ introduced a new brand for consumers, “IIJmio,” which enables users
to freely combine a variety of Internet-related functions. In the quarter, IIJ released “IIJmio Prime
Mail Service,” a premium email account service and “IIJmio DSL/De Service,” an Internet
connectivity service offered over eAccess’s ADSL open lines.
IPv6: IIJ completed the IPv6-adaptation for all Dedicated Access Services in September 2001.
Customer Relations
IIJ waived its charges on dialup Internet connections in the United States from September 11 to
September 30, 2001, in recognition of the September 11th tragedies. IIJ also enhanced its Service
Level Agreements (“SLA”) with all its customers by raising the benchmark for an average roundtrip time across the IIJ entire domestic backbone network to 30 milliseconds from 40 milliseconds.
Investment
To further strengthen its operation in the Asia Pacific region, IIJ increased its stake in AIH, which
operates a pan-Asian Internet backbone network, from 20.6% to 26.7%. IIJ acquired an additional
1,966 shares of common stock of AIH in August 2001. During the quarter, IIJ also purchased 6,000
shares in Net Care, its subsidiary specializing in the customer support business, increasing its
equity stake from 50.0% to 52.5%. With the increased investment in Net Care, it is IIJ’s objective
to strengthen network and systems management services under its total network solutions
approach.
Development of IIJ Group Companies
During the quarter, Crosswave added a new 512kbps bandwidth to its Wide-area Ethernet Platform
Services, to address a broader range of customer bandwidth needs. Crosswave also launched
Metro Wave Service to offer end-to-end broadband platforms for the Tokyo metropolitan area, andadded a 10Mbps service to its High-speed Backbone Service, which is Japan’s first long distancepoint-to-point service offered with an Ethernet interface.
Internet Multifeed, a 26.0% affiliate, announced that it will launch “JPNAP Osaka”, an Internet
exchange service, in Osaka later this fiscal year. The expansion aims to diversify Japan’s Internet

Internet Initiative Japan Inc.
November 13, 2001
Page 5traffic, which is currently heavily weighted towards Tokyo.
AIH upgraded their A-Bone capacity of its Japan-China Internet backbone, to a total 90Mbps.
The 2nd Quarter of FY2001 Financial Results
Revenues
Revenues in 2Q01 totaled JPY 9,528 million, up 17.5% compared with 2Q00, and up 14.3%
compared with 1Q01.
Connectivity services and value-added services revenues increased 12.9% to JPY 5,553 million

from 2Q00, and decreased 2.6% from 1Q01.
Dedicated access services increased 9.1% to JPY 3,431 million from 2Q00, and by 1.3% from
1Q01. In comparison to 1Q01, IIJ’s T1 Standard and IIJ DSL/F service increased steadily, whichmore than offset a decline in the IIJ Economy service.
Dial-up access service decreased 19.3% to JPY 933 million from 2Q00, and by 5.2% from 1Q01.
Both the year-over-year and sequential declines were due mainly to the decrease in conventional
dial up services revenues, as the Company’s corporate dial-up customers shift to IIJ’s DSL/F
services.
Value-added services increased 73.9% to JPY886 million from 2Q00, and by 0.5% from 1Q01.
While IIJ has substantially increased the number of value-added services from last year, the slightincrease from 1Q01 was due mainly to significant increase in registration fees for DNS services in
1Q01.
Systems integration services revenues increased 15.9% to JPY3,352 million from 2Q00, and by
47.0% from 1Q01
Table 1. Number of Contracts
Internet Access Services
IP Service

64kbps – 128kbps
192kbps – 768kbps
1Mbps – 2Mbps
3Mbps – 1.2Gbps
IIJ FiberAccess/F(*1)
IIJ T1 Standard 1.5Mbps
Total IP Service
IIJ Economy
64kbps – 128kbps(*2)
IIJ DSL/F
Maximum 1.5Mbps
Total Dedicated Access Services Contracts
(*1)
(*2)

2Q01
213
49
258
123
2
690
1,335
1,171
286
2,792

1Q01
245
61
246
115
N/A
662
1,329
1,283
45
2,657

2Q00
369
104
201
92
N/A
386
1,152
1,220
N/A
2,372

94,104
86,123
180,227

94,802
66,341
161,143

93,25363,917
157,168

IIJ FiberAccess/F is a new service launched in August 2001.
IIJ DSL/F is a new service launched in May 2001.

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

Internet Initiative Japan Inc.
November 13, 2001
Page 6
Total Data Center Services Contracts

119

116

61

Table 2. Revenue Breakdown in Dedicated Access Services
2Q01
Total IP Service (IP Service and IIJ T1 Standard)
3,081
IIJ Economy + IIJ DSL/F
350(JPY in millions)
1Q01
2Q00
3,048
2,829
339
316

Table 3. Contracted Bandwidth(Unit: Gbps)
1Q01
2Q00
4.6
2.7

2Q01
Dedicated Access Services

6.4

Cost and expenses
Cost of total revenues increased 11.0% to JPY 8,182 million from 2Q00, and by 12.3% from 1Q01.

International backbone costs decreased 51.4% to JPY 623 million from 2Q00, and by 28.2% from
1Q01. These decreases on both a year-over-year and sequential basis reflect the sharp pricereduction in Japan-US backbone lines. Monthly unit backbone cost declined by approximately
66% in the year-over-year comparison, and by approximately 41% in the sequential comparison.
Domestic backbone costs increased 29.9% to JPY805 million from 2Q00, and by 4.0% from 1Q01,
reflecting the growth of the Japanese broadband sector.
Table 4. Backbone Costs
International Backbone Costs
Domestic Backbone Costs

2Q01
623
805

(JPY in millions)
1Q01
2Q00
867
1,283
774
620

Cost of SI revenues increased 10.7% to JPY2,800 million from 2Q00, by 46.3% from 1Q01. The
gross margin ratio for SI improved steadily, reflecting the increase in monitoring, maintenance andother operation services revenues, which are more profitable than system development revenues.
Sales and marketing expenses decreased 7.7% to JPY820 million from 2Q00, and up by 0.1% from
1Q01. While advertisement expenses decreased by 55.6% to JPY119 million from 2Q00 and by
0.9% from 1Q01, IIJ increased sales personnel as part of its total network solution strategy toenhance customer relations. As a result, sales personnel expenses increased 26.9% to JPY363
million from 2Q00, and by 6.5% from 1Q01.
Primarily as a result of growth in the SI revenues and the decrease in international backbone costs,
IIJ achieved operating income of JPY16 million in 2Q01, compared to a loss of JPY 632 million in
2Q00, and a loss of JPY 300 million in 1Q01. The operating income ratio against revenues for
2Q01 was 0.2%, compared to (-)7.8% in 2Q00, and to (-)3.6% in 1Q01.
Other income (expenses)
Other expenses for 2Q01 was JPY 430 million, compared to other income of JPY 440 million in
2Q00, and to other expenses of JPY 61 million in 1Q01. IIJ recorded a foreign exchange loss of
JPY179 million in 2Q01, a gain of JPY 256 million in 2Q00 and a gain of JPY 23 million in 1Q01.
Interest and dividend income decreased to JPY 41 million in 2Q01, compared to JPY 144 million
in 2Q00, and to JPY105 million in 1Q01.

Internet Initiative Japan Inc.
November 13, 2001
Page 7
Equity in net loss of affiliated companies
Equity in the net loss of affiliated companies increased to JPY1,399 million in 2Q01, compared to
JPY1,046 million in 2Q00, and to JPY1,219 million in 1Q01, mainly resulting from the equity loss
in Crosswave.
Income tax expense (benefit)
Income tax expense for 2Q01 was JPY 1,266 million, compared to an income tax benefit of JPY
900 million in 2Q00, and to an income tax expense of JPY 127 million in 1Q01. The increase inincome tax expense in 2Q01 was a result of an increase in the valuation allowance for deferred tax
assets. The increase in the valuation allowance was attributable to the income tax effect of
unrealized gains on certain available-for-sale securities, which have been decreasing in recent
quarters.
Net loss
Mainly as a result of the increase in foreign exchange loss, the equity loss in Crosswave and theincome tax expense, net loss increased to JPY3,085 million in 2Q01, compared to JPY 337 million
in 2Q00, and JPY 1,665 million in 1Q01. Basic net loss per ADS equivalent was JPY(-)68.61 in
2Q01, compared to JPY(-)7.50 in 2Q00 and JPY(-)37.03 in 1Q01.
Table 5. Other Financial Statistics
2Q01
712
931
726

EBITDACAPEX, including capitalized leases
Depreciation and amortization(*4)(*4)(JPY in millions)
1Q01
2Q00
376
10
1,076
1,409
706
667

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

Company Information
Internet Initiative Japan Inc. is one of Japan’s leading Internet-access and comprehensive Internet solution
providers mainly targeting high-end corporate customers. Founded in 1992, IIJ 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 solutions ranging from new generation network services over optical-fiber infrastructure optimized
for data communications to construction of Asia-wide IP backbone networks, high-quality Internet access,security system services, hosting/housing, content design and systems integration.
Statements made in this press release that state 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 are subject to various risks, uncertainties and other factors that could cause IIJ’s actual results todiffer materially from those contained in any forward-looking statement. These risks, uncertainties and otherfactors include: IIJ’s ability to continue to increase subscribers to its connectivity services, particularly athigher 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 andcompetitive marketplace; the impact of technological changes in its industry; and other risks referred from time
to time in IIJ’s filings with the Securities and Exchange Commission.

Tables to follow

INTERNET INITIATIVE JAPAN INC.
CONSOLIDATED STATEMENTS OF OPERATIONSAppendix 1

For the Three Months Ended Sept 30, 2001, Sept 30, 2000 and Jun 30, 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
Sept 30, 2001

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

JPY

% of
Total
Revenues

JPY

Sept 30, 2000
% of
Total
Revenues

YOY
Chg %

Sequential Comparison
Jun 30, 2001
% of
Total
QOQ
JPY
Revenues
Chg %28,778
7,822

3,431,156
932,65336.0%
9.8

3,145,493
1,155,763

38.8%
14.2

9.1%
(19.3)

3,386,912
983,461

40.6%
11.8

1.3%
(5.2)

4,251
3,177
7,428
2,545
46,573506,775
378,815885,590
303,4815,552,880

5.3
4.0
9.3
3.2
58.3

297,349
211,913509,262
109,935
4,920,453

3.7
2.6
6.3
1.4
60.7

70.4
78.8
73.9
176.1
12.9

489,385
391,731
881,116452,126
5,703,615

5.9
4.7
10.6
5.4
68.4

3.6
(3.3)
0.5
(32.9)(2.6)

28,117
5,225
79,9153,352,363
623,064
9,528,307

35.2
6.5
100.0

2,892,535
294,947
8,107,935

35.7
3.6
100.0

15.9
111.2
17.5

2,279,854
349,429
8,332,898

27.4
4.2
100.0

47.0
78.3
14.3

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

40,65623,484
4,484
68,624

4,847,467
2,799,940
534,575
8,181,982

50.9
29.4
5.6
85.9

4,587,295
2,529,957
252,172
7,369,424

56.6
31.2
3.1
90.9

5.7
10.7
112.0
11.0

5,066,856
1,914,254
307,1887,288,298

60.8
23.0
3.7
87.5

(4.3)
46.3
74.0
12.3

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

6,876
3,579
702
79,781

819,799
426,792
83,7369,512,309

8.6
4.5
0.8
99.8

888,159
411,643
71,0118,740,237

10.9
5.1
0.9
107.8

(7.7)
3.7
17.9
8.8

818,786
439,030
86,5988,632,712

9.8
5.3
1.0
103.6

0.1
(2.8)
(3.3)
10.2

Operating income (loss)

134

15,9980.2(632,302)(7.8)(102.5)(299,814)(3.6)(105.3)

Other income (expenses)(3,608)(430,259)(4.5)

440,3885.4(197.7)(61,484)

(0.7)

599.8

Loss before income tax expense (benefit)(3,474)(414,261)(4.3)(191,914)

(2.4)

115.9

(361,298)

(4.3)

14.7

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

10,622(46)(11,730)

1,266,458(5,533)(1,398,509)

13.3
(0.1)
(14.7)(899,952)
649(1,045,665)(11.1)
0.0(12.9)(240.7)(952.5)
33.7

127,197
42,834(1,219,215)

1.5
0.5(14.7)

895.7(112.9)14.7

Net loss(25,872)(3,084,761)(32.4%)(336,978)(4.2%)

815.4%(1,664,876)(20.0%)

85.3%

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(137,222)(68.61)
22,48044,960,000(14,990)(7.50)
22,48044,960,000(74,060)(37.03)22,48044,960,000

Note (1):The translations of Japanese yen amounts into US dollar amounts with respect to the three months ended Sept 30, 2001 are included solely for the convenience of readers outside Japanand have been made at the rate of JPY 119.23 =$1, the approximate rate of exchange on Sept 28, 2001.

INTERNET INITIATIVE JAPAN INC.
CONSOLIDATED BALANCE SHEETSAppendix 2

As of Sept 30, 2001, Sept 30, 2000 and Jun 30, 2001
(Expressed in Thousands of Japanese Yen (JPY) and U.S. Dollars (USD)) (1)USD (1)

Sept 30, 2001
JPY

95,714049,815
8,491
3,388
3,279

11,411,967
0
5,939,468
1,012,403
403,982
390,966

25.5%
0.0
13.3
2.3
0.9
0.9

12,970,293
6,196,408
4,640,987
315,751
269,900
347,245

23.3%
11.1
8.3
0.6
0.5
0.6

12,574,744
0
5,381,435
263,553
473,154493,692

25.9%
0.0
11.1
0.5
1.0
1.0

160,687

19,158,786

42.9

24,740,584

44.4

19,186,578

39.5

97,36439,65063,621
7,468
5,575

11,608,736
4,727,410
7,585,480
890,444664,675

26.0
10.6
17.0
2.0
1.5

12,941,280
9,997,623
6,376,357
848,089
733,160

23.3
18.0
11.5
1.5
1.3

12,690,980
7,766,900
7,348,823
887,636
671,331

26.2
16.0
15.1
1.8
1.4

374,365

44,635,531

100.0%

55,637,093

100.0%

48,552,248

100.0%

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

31,62337,961
1,862
3,066
8,387
15,5433,770,445
4,526,061
222,003
365,625
1,000,000
1,853,146

8.5%
10.1
0.5
0.8
2.2
4.2

7,010,000
4,825,858
189,682279,539
290,000
1,575,712

12.6%
8.7
0.3
0.5
0.5
2.8

5,020,000
4,012,148
281,105
481,9940
1,787,436

10.3%
8.3
0.6
1.0
0.0
3.7

Total current liabilities

98,442

11,737,280

26.3

14,170,791

25.4

11,582,683

23.9

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

31,871
125,80724,6511,049
221

3,800,000
15,000,000
2,939,079
125,099
26,306

8.5
33.6
6.6
0.2
0.1

1,200,000
15,000,000
2,546,805
132,557
1,282,971

2.2
27.0
4.6
0.2
2.3

3,400,000
15,000,000
2,963,868
124,368
25,941

7.0
30.9
6.1
0.2
0.1

282,041

33,627,764

75.3

34,333,124

61.7

33,096,860

68.2

8,554

1,019,912

2.3

802,466

1.5

633,262

1.3

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

59,401
143,155(130,101)
11,315

7,082,336
17,068,353(15,511,971)
1,349,137

15.9
38.2
(34.7)
3.0

7,082,336
17,068,353(8,430,378)
4,781,192

12.7
30.7
(15.2)
8.6

7,082,336
17,068,353(12,427,210)
3,098,647

14.6
35.1
(25.6)
6.4

Total shareholders' equity

83,7709,987,855

22.4

20,501,503

36.8

14,822,126

30.5

Total liabilities and shareholders' equity

374,365

44,635,531

100.0%

55,637,093

100.0%

48,552,248

100.0%ASSETS
Current Assets:
Cash
Short-term investments
Accounts receivable, net
Inventories
Prepaid expenses
Other current assets
Total current assets
Investments in and Advances to Affiliated Companies
Other Investments
Property and Equipment, net
Guarantee Deposits
Other Assets

Total assets%

Sept 30, 2000
JPY%

Jun 30, 2001
JPY%

LIABILITIES ANDSHAREHOLDERS' EQUITYCurrent Liabilities:

Total liabilities
Minority Interest

Note (1): The translations of Japanese yen amounts into US dollar amounts with respect to Sept 30, 2001 are included solely for the convenience of readers outside Japanand have been made at the rate of JPY119.23 =$1, the approximate rate of exchange on Sept 28, 2001.

INTERNET INITIATIVE JAPAN INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWSAppendix 3

For the Three Months Ended Sept 30, 2001, Sept 30, 2000 and Jun 30, 2001
(Expressed in Thousands of Japanese Yen (JPY) and U.S. Dollars (USD)) (1)Sept 30, 2001
USD (1)JPY
Operating Activities:
Net loss
Depreciation and amortization
Equity in net loss of affiliated companies
Minority interests in consolidated subsidiaries
Foreign exchange losses (gains)
Decrease (increase) in accounts receivable
Increase (decrease) in accounts payable
Deferred income tax
Other
Net cash provided by (used in) operating activities
Investing Activities:
Purchase of property and equipment
Investments in and advances to affiliated companies
Purchase of short-term investments
Purchase of other investments
Proceeds from redemption of short-term investments
Payment of guarantee deposits-net
Other
Net cash used in investing activities

Sept 30, 2000
JPY

Jun 30, 2001
JPY

(25,872)
6,091
11,73046
1,498(4,752)
4,309
10,607(6,036)(2,379)(3,084,761)
726,278
1,398,509
5,533
178,577(566,601)
513,802
1,264,707(719,638)(283,594)(336,978)666,798
1,045,665(649)(255,921)(155,613)
1,659,494(903,938)(155,226)
1,563,632(1,664,876)
706,463
1,219,215(42,834)(22,776)
15,781(298,183)
121,705(265,574)(231,079)(3,303)(2,693)(1)(393,770)(321,094)(100)(524,792)(4,565,400)(8,291,392)(70,000)
8,291,424(43,732)
138,746(5,065,146)(179,145)

1,000,000(400,000)(485,264)(1,410,260)

600,000(475,813)(600,000)--(1,295,524)(475,813)

-

-

(23)
(169)
(6,189)(2,794)(20,141)(737,899)-(49,500)-(50,353)(23,265)(302,263)

Financing Activities:
Proceeds from long-term borrowings
Repayments of long-term borrowings
Principal payments under capital leases
Net decrease in short-term borrowings
Proceeds from issuance of common stock of a subsidiary
Net cash provided by (used in) financing activities

11,742

1,400,000(4,152)(10,480)3,145
255(494,991)(1,249,555)
375,000
30,454

Effect of Exchange Rate Changes on Cash

(1,439)(171,738)

106,449

13,192

Net Decrease in Cash

(9,752)(1,162,777)(4,690,589)(995,963)

Cash, Beginning of Period

105,466

12,574,744

17,660,882

13,570,707

Cash, End of Period

95,714

11,411,967

12,970,293

12,574,744

Note (1): The translations of Japanese yen amounts into US dollar amounts with respect to the three months ended Sept 30, 2001 are included solely for the convenienceof readers outside Japan and have been made at the rate of JPY119.23 =$1, the approximate rate of exchange on Sept 28, 2001.