2002 年 8 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いただけますよう、お願い申し上げます。

2002 年度第 1 四 半 期（4 −6 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 2002 年 8 月 14 日 22:00 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 1 四半期 (4-6 月) の決算発表

要約・2002 年度第 1 四半期の売上高は、 9,849 百万円（前年同期比 18.2% 増、前期比 18.7% 減）で、第 4四半期決算発表時点での見込み（90-95 億円）を上回った。前期からの減収要因は、システム・インテグレ
ーション事業の季節変動(1)が主として挙げられる。
・粗利益率は 9.1％（前年同期 12.5%、前期 11.6%）に減少した。システム・インテグレーション事業の新規案件に対する初期開発コスト増と年度初による人件費増が主要因。
・売上減収と粗利益率の低下により、営業損益は 464 百万円の営業損失となった。ただしこの営業損失は
一時的なもので、第 2 四半期の営業損益はブレークイーブン程度と見込んでいる。
・EBITDA は 329 百万円。引き続き黒字を維持。第 2 四半期も黒字を維持する見込み。
・2002 年度第 2 四半期の売上高は、105-110 億円となる見込み。システム・インテグレーション事業の伸張と専用線接続サービスの回復を成長要因として見込んでいる。
・2002 年度上期の売上高は 2001 年度上期と比較して、15%超の成長を見込む。また 2002 年度通期の売上高は 2001 年度通期と比較して、約 20％増となる見込み。2002 年度通期の営業損益に対するアナリスト予想の平均値(2) は、達成可能と見込んでいる。
(1)
システム・インテグレーション事業は、日本企業の会計サイクルにより上期末（第 2 四半期末）および下期末（第 4 四半期末）に売上計上が集中する傾向にある。
(2)
アナリスト予想の平均値は、9.8 億円。具体的には、ゴールドマンサックス証券、モルガンスタンレー証券、J.P.モルガン証
券、クレディ スイス ファースト ボストン証券、大和総研のアナリスト予測の平均値を算出した。

2002 年度第 1 四 半 期 決 算 概 況システム・インテグレーション事業の季節変動要因により前期からは減収となったものの、前年同期比では18.2%の成長を果たすなど、トータル・ネットワーク・ソリューション戦略は着実に奏効している。一方、積極的なSI事業展開に伴い新規案件の初期開発コスト負担が重くなっているが、これは適用技術・ノウハウの標準化により改善する見通し。また、専用線接続サービスが大口顧客の業態再編により一時的にフラット成長になっているが、これはブロードバンド・コンテンツの配信プラットフォームサービスである「CDN JAPAN」の正式稼動に伴い、第2四半期以降に大口契約の受注が複数確定していることや、FTTH（Fiber to The Home）
を用いたインターネット接続サービスの契約増等の要因により、回復基調に戻る見込み。

その他
2002年度第1四半期より、インターネットデータセンター接続サービスに関する開示基準を変更した。専用線
接続サービスから、インターネットデータセンター接続サービスへの契約内容の変更が増えていることに伴い、これまで「付加価値サービス」のインターネットデータセンターサービスに含めていたが、これを「専用線接続
サービス」の一部として開示することとする。

（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)

1Q02
108
33
263
183
122
3,269
3,978

4Q01
142
42
270
156
110
2,900
3,620

1Q01
245
61
246
115
69
1,990
2,726

86,297232,330
318,627

89,213
171,363
260,576

94,802
66,341
161,143

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

(百万円)

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

1Q02
2,574
949

4Q01
2,651
992

1Q02
12.2
2.2
14.4

4Q01
9.4
2.0
11.4

(単位: Gbps)

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

1Q02
449
800

表 5. その他
Adjusted EBITDA
設 備 投 資（capitalized leases を含む）
減価償却費

1Q01
4.6
n/a
4.6
(百万円)

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

1Q01
2,568
955

1Q02
329
1,015
820

4Q01
443
836
4Q01
968
913
812

1Q01
867
774
(百万円)

1Q01
376
1,076
706

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

2002年6月期、2001年6月期、2002年3月期
JPY/千円単位、USD/千米ドル単位 (1)
前年同四半期比較
2002年6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

JPY

対営業収益
%

JPY

2001年6月期
対営業収益%

対前年同四半期%

JPY

前四半期比較
2002年3月期
対営業収益
%

対前四半期
%

29,398
6,861
7,218
3,412
46,8893,523,334
822,268
865,161
408,925
5,619,688

35.8%
8.3
8.8
4.2
57.1

3,523,676
983,461744,352
452,126
5,703,615

42.3%
11.8
8.9
5.4
68.4

0.0%
(16.4)
16.2
(9.6)
(1.5)

3,643,141
844,279
823,137
533,191
5,843,748

30.1%
7.0
6.8
4.4
48.3

(3.3%)(2.6)
5.1(23.3)(3.8)

27,777
7,513
82,1793,329,058
900,456
9,849,202

33.8
9.1
100.0

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

27.4
4.2
100.0

46.0
157.7
18.2

5,331,986
934,040
12,109,774

44.0
7.7
100.0

(37.6)(3.6)(18.7)

42,491
24,926
7,309
74,726

5,092,515
2,987,373
876,012
8,955,900

51.7
30.3
8.9
90.9

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

60.8
23.0
3.7
87.5

0.5
56.1
185.2
22.9

5,110,291
4,734,363
865,354
10,710,008

42.2
39.1
7.1
88.4

(0.3)
(36.9)
1.2(16.4)

6,253
4,316
757
86,052

749,361
517,316
90,780
10,313,357

7.6
5.3
0.9
104.7

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

9.8
5.3
1.0
103.6

(8.5)
17.8
4.8
19.5

665,204
480,376
68,09011,923,678

5.5
4.0
0.6
98.5

12.7
7.7
33.3
(13.5)

営業利益（損失）(3,873)(464,155)(4.7)(299,814)

(3.6)

54.8

186,0961.5(349.4)

その他の費用

(4,346)(520,836)(5.3)(61,484)

(0.7)

747.1

(337,694)

(2.8)

54.2

税引前当期損失(8,219)(984,991)(10.0)(361,298)

(4.3)

172.6

(151,598)

(1.3)

549.7

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

1,346
559
(12,646)

161,301
66,950(1,515,675)

1.6
0.7(15.4)

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

1.5
0.5(14.7)

26.8
56.3
24.3

(140,381)(8,849)(1,646,603)

(1.2)
(0.1)
(13.6)(214.9)(856.6)
(8.0)

当期損失

(21,652)(2,595,017)(26.3%)(1,664,876)(20.0%)

55.9%(1,666,669)(13.8%)

55.7%

インターネット接続及び付加価値サービス収入合計

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(115,437)(57.72)
22,48044,960,000(74,060)(37.03)22,48044,960,000(74,140)(37.07)22,48044,960,000

注記(1): 2002年6月期につきましては、米ドル換算レート119.85円=1米ドル(2002/6/28)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。過去の四半期につきましても変更を適用致しました。
変更による専用線接続サービス収入増加額は、2002年6月期、2001年6月期、2002年3月期それぞれ280,410千円、136,764千円、257,599千円です。

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）

Appendix 2

2002年6月期、2001年6月期、2002年3月期
JPY/千円単位、USD/千米ドル単位(1)USD (1)

2002年6月期
JPY%

2001年6月期
JPY%

2002年3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50,18557,345
2,276
5,388
1,170

6,014,693
6,872,763
272,821645,763
140,162

14.7%
16.7
0.7
1.6
0.3

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

25.9%
11.1
0.5
1.0
1.0

11,045,919
8,981,912
620,409416,945
143,798

24.4%
19.9
1.4
0.9
0.3

流動資産合計116,364

13,946,202

34.0

19,186,578

39.5

21,208,983

46.9

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

61,717
41,34264,327
41,71910,8656,204

7,396,756
4,954,787
7,709,559
5,000,000
1,302,234
743,614

18.0
12.0
18.8
12.2
3.2
1.8

12,690,980
7,766,900
7,348,823
0887,636
671,331

26.2
16.0
15.1
0.0
1.8
1.4

8,854,028
5,406,065
7,755,426
0
1,266,055
772,226

19.6
11.9
17.1
0.0
2.8
1.7

資産合計

342,538

41,053,152

100.0%

48,552,248

100.0%

45,262,783

100.0%

37,97140,338
2,653
4,643
11,681
17,1914,550,835
4,834,546
317,968
556,494
1,400,000
2,060,284

11.1%
11.8
0.8
1.3
3.4
5.0

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

3,820,232
7,085,579
247,606
506,797
1,400,000
1,973,769

8.4%
15.7
0.5
1.1
3.1
4.4

114,477

13,720,127

33.4

11,582,683

23.9

15,033,983

33.2

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

28,369125,156
23,367760
1,366

3,400,000
15,000,000
2,800,483
91,037
163,686

8.3
36.6
6.8
0.2
0.4

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

7.0
30.9
6.1
0.2
0.1

3,400,000
15,000,000
2,861,556
100,841
108,376

7.5
33.2
6.3
0.2
0.2

負債合計

293,495

35,175,333

85.7

33,096,860

68.2

36,504,756

80.6

少数株主持分8,058

965,796

2.3

633,262

1.3

1,032,746

2.3

59,093
142,414(173,579)
13,057

7,082,336
17,068,353(20,803,486)
1,564,820

17.3
41.6
(50.7)
3.8

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

14.6
35.1
(25.6)
6.4

7,082,336
17,068,353(18,208,469)
1,783,061

15.7
37.7
(40.2)
3.9

資本合計

40,985

4,912,023

12.0

14,822,126

30.5

7,725,281

17.1

負債、少数株主持分及び資本合計

342,538

41,053,152

100.0%

48,552,248

100.0%

45,262,783

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

注記(1): 2002年6月期につきましては、米ドル換算レート119.85円=1米ドル(2002/6/28)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50億円を預金致しました。

株式会社 インターネットイニシアティブ

Appendix 3

四半期連結キャッシュフロー計算書（米国会計基準）
2002年 6月期、2001年 6月期、2002年 3月期
JPY/千円単位、USD/千米ドル単位 (1)2002年6月期
USD (1)
JPY

2001年6月期
JPY

2002年3月期
JPY

営業活動によるキャッシュフロー：当期損失(21,652)
6,844
12,646
(559)
1,125
658
17,605(16,657)
2,900
1,275
(380)
3,805

(2,595,017)
820,252
1,515,675(66,950)
134,820
78,8192,109,969(1,996,362)
347,588
152,840(45,560)
456,074(1,664,876)
706,463
1,219,215(42,834)(22,776)
15,781(298,183)(18,033)
121,705(247,541)(231,079)(1,666,669)
811,652
1,646,603
8,849
3,990
104,700(3,183,806)
3,696,329(398,876)(145,560)
214,793
1,092,005(3,540)(469)(41,719)(302)(18)(46,048)(424,321)(56,250)(5,000,000)(36,155)(2,143)(5,518,869)(179,145)(49,500)(50,353)(23,265)(302,263)(501,667)(24,123)(350,000)(4,727)
6,096
1,369

(566,505)
730,603
164,098

600,000(475,813)(600,000)(475,813)(535,906)
120,018(415,888)

現金及び現金同等物に係る換算差額(1,106)(132,529)

13,19259,223

現金及び現金同等物の減少額(41,980)(5,031,226)(995,963)(120,158)

現金及び現金同等物の期首残高

92,165

11,045,919

13,570,707

11,166,077

現金及び現金同等物の期末残高

50,185

6,014,693

12,574,744

11,045,919

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）
投資有価証券評価損等
売掛金の減少（増加）額
買掛金及び未払金の増加（減少）額
棚卸資産の減少（増加）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
関連会社への投資および貸付
その他投資の取得による支出
拘束預金への預け入れ
敷金保証金の（返還）支出
その他
投資活動によるキャッシュフロー-(2,007)22,299(855,498)

財務活動によるキャッシュフロー：長期借入金による収入
リース債務の元本返済による支出
短期借入金の純増減額
財務活動によるキャッシュフロー

注記(1): 2002年6月期につきましては、米ドル換算レート119.85円=1米ドル(2002/6/28)にて参考表示しております。

Internet Initiative Japan Inc.
August 13, 2002
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 Results of the 1st Quarter 2002 Ended June 30, 2002
New York, August 13, 2002 – 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 1stquarter ended June 30, 2002 of the fiscal year ending March 31, 2003 (“fiscal 2002”). On August 14 at 9:00am(ET), the Company will host a conference call, which will have a simultaneous webcast on www.vcall.com. A
replay will also be available at the same URL.

The 1st Quarter of FY2002 Results Summary
・ Total revenue s were JPY9,849 million ($82 million), an increase of 18.2% compared to 1Q01 but adecrease of 18.7% compared to 4Q01. Total revenues exceeded the expected range of JPY9.0
billion to JPY9.5 billion. As anticipated, the decline from 4Q01 was mainly due to a seasonal(1)downturn in the Systems Integration (SI) business.
・ IIJ’s gross margin declined to 9.1% in 1Q02 compared to 12.5% in 1Q01 and 11.6% in 4Q01. The
decline was due to higher costs for new project developments in association with IIJ’s rapidly
diversifying SI business and an increase in human capital investments that are typical in April.
・ IIJ reported an operating loss of JPY464 million ($3.9 million). This was due not only to lower
revenues, but also to decreased margins. The company believes that its operating loss in 1Q02 is
temporary. IIJ is expecting to report operating results at or near break-even level in 2Q02.
・ Adjusted EBITDA (2) remained positive at JPY329 million as expected.
・ For 2Q02, IIJ expects total revenues to be between JPY10.5 billion ($87.6 million) and JPY11.0
billion ($91.8 million). Growth is expected to be driven by a stronger SI business and by a recovery
in Dedicated Access Services.
・ IIJ continues to expect total revenues of the first half of fiscal 2002 to grow by more than 15%
compared to the first half of fiscal 2001. IIJ also continues to expect total revenues of full fiscal year
2002 to grow by approximately 20% compared to fiscal 2001. The Company is confident of meeting
analysts’ consensus (3) expectations for operating income for full fiscal 2002.
(1)

In Japan, the SI business is typically stronger during IIJ’s 2Q and 4Q. This is due to typical Japanese corporate budget cycles, whichmake large investments in or around September and March.
(2)
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.
(3)
Consensus operating income was JPY980 million. This consensus was calculated by averaging the financial forecasts for IIJ as suppliedby the following five firms: Goldman Sachs, Morgan Stanley, JP Morgan, Credit Suisse First Boston and Daiwa Institute of Research.
Note: Translations of Japanese yen amounts into US dollars are solely for the convenience of readers outside of Japan and have been madeat the rate of JPY119.85 = US$1, the approximate rate of exchange on June 28, 2002.

Internet Initiative Japan Inc.
August 13, 2002
Page 2
Overview and Business Outlook
Overview of the 1Q02 results“The 1Q02 results mainly reflect our drive to acquire further expertise in the SI business,” said Koichi
Suzuki, President and CEO of IIJ. “IIJ has successfully expanded its SI operations, particularly insecuring major orders from financial service institutions and universities. Although the first quarter istypically weak due to seasonal factors, the 46.0% year-over- year increase in revenues in the SI
business demonstrates a steady execution of our total network solutions strategy for further growth.
Due to higher costs for new project developments in association with rapidly diversifying SI business,
our gross margin in the SI business declined to 10.3% compared to 16.0% in the 1Q01 and 11.2% in
the 4Q01. However, we expect this margin to improve as we increase operating efficiency by moving
forward with technology standardization and by leveraging the acquired expertise of future projects.”“Although we continued to increase the total number of contracts and to capture broadband demand in
Dedicated access services, revenues in the category were flat as a result of some of our large
customers’ consolidations of their Internet connectivity,” said Yasuhiro Nishi, IIJ CFO. “However,
we expect revenues from Dedicated Access Services to resume growth in the second and third quarters
as we expect new business from some large customers, including Excite Japan, in connection with thelaunch of our CDN (Content Delivery Network) business. We believe that rapid growth in the Internet
connectivity market over the Fiber to the Home (FTTH) access will also contribute to our revenue
growth in Dedicated Access Services.”
Business Outlook --- Discussion with PoweredCom of Possible Integration of Operations
While executing its total network solutions strategy with the IIJ group companies, IIJ launched formal
discussions with PoweredCom, Inc. about the feasibility of integrating respective operations, as
previously announced on July 18, 2002. IIJ’s 37.9% affiliate, Crosswave Communications(Crosswave), is also one of the parties concerned with the announcement. PoweredCom, a 32.06%
affiliate of Tokyo Electric Power Company, provides data communication services using a nationwide
200,000 km fiber network in cooperation with the telecom subsidiaries of ten regional electric powercompanies. Although the parties have not entered into a memorandum of understanding, they areprogressively discussing potential synergies in sales and marketing, network infrastructure and new
business developments. The parties expect to come to an agreement by the end of December 2002.
“We believe the combination of the resources and expertise of the IIJ group — leadership,technological expertise, entrepreneurial spirit — together with PoweredCom and their groupcompany’s strengths — greater capital, greater scale of fiber-optic infrastructure including last mileaccess, and greater experience in management of large-scale fixed assets — will better position us toaccomplish our objectives to lead the technological innovation in Japan’s network industry, ” said
Koichi Suzuki. “Japan’s telecommunications market faces structural changes triggered bytechnological innovations, and we believe this is an optimal time to seek greater scalability in ourbusiness and to increase shareholder value.”
Forecasted financial performance for the second quarter and the first half of fiscal 2002
For the second quarter of fiscal 2002, IIJ expects total revenues to be between JPY10.5 billion and
JPY11.0 billion. Operating income is expected to return to a break-even level and EBITDA is expected
to remain positive.
Status of Overview and Business Outlook
This Overview and Business Outlook contains forward-looking statements and projections that are subject to known
and unknown risks and uncertainties 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 endof 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 and documents 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 topublish its next Overview and Business Outlook in its 2Q02 earnings release, presently scheduled for November 11,
2002. In conjunction with the 1Q02 earnings announcement, IIJ will hold a webcasted conference made available tothe public over the Company’s website.

Internet Initiative Japan Inc.
August 13, 2002
Page 3
The 1st Quarter of FY2001 Operating Highlights
New Corporate Officer Assignments
In June 2002, IIJ announced that Mr. Toshiya Asaba, Head of Technology, and Mr. Hojo, Head ofMarketing, were assigned to newly-created Managing Director positions. These appointments
highlight the importance of technology and marketing as core drivers of future growth.
During the period, IIJ also strengthened and increased the number of marketing and technicalprofessionals it employs by approximately 10% from the previous year. The new hires are in line with
IIJ’s continued emphasis on long-term business growth while maintaining its technical leadership in
the industry.
New Service Developments under the Total Network Solutions Approach
Expansion of Wireless Access Options: For its individual services (IIJ4U, IIJmio DSL/SF, and IIJmio
FiberAcess/SF), IIJ launched its public wireless Internet access options service in the eastern part ofJapan in June 2002, and in the western part of Japan in July 2002.
Promotion of Fiber Access: IIJ announced that it revised its monthly tariff for its IIJ FiberAccess/F
service, an Internet connectivity service that offers a 100Mbps bandwidth class, effective July 1, 2002.
By reducing the monthly fee, IIJ aims to successfully capture a portion of the rising demand for the
100Mbps broadband class and increase the number of contracts in service among small and medium
sized enterprises (SMEs). The reductions ranged from 35% to 79%, according to the type of contracts.
Value-added Service: IIJ added two variations (15Mbps and 20Mbps) to IIJ’s Download Site Service,a hosting service dedicated to downloading large files. At the same time, the fee schedule was loweredby approximately 15% for the existing variations. IIJ also upgraded its remote access solution byadding a remote VPN function to its IIJ Secure Remote Access Service.
SLA (Service Level Agreement): IIJ introduced an SLA program to provide quality assurance forsubscribers to its IIJmio Prime Mail Service, an e-mail service for individuals, effective June 2002.
The SLA program is designed to ensure service stability and reliability by establishing a quantitative
benchmark. IIJ believes that the SLA program enables the Company to maintain top-level service
quality for the retail market, which will strengthen the relations with our customers while increasing
the brand image of IIJ’s services.
Network Infrastructure Development
In 1Q02, IIJ upgraded four domestic backbone networks, as well as one Japan-US backbone line
between Palo Alto and Tokyo, which brought total capacity of its Japan-US backbone lines to
2.85Gbps. Additionally, U.S. domestic backbones were upgraded by increasing capacity between
NOCs (Network Operation Centers) in New York and Palo Alto, as well as between the NOC in Palo
Alto and an Internet eXchange point in Palo Alto (PAIX). New roaming access points in Korea
opened in May 2002. IIJ expanded its IPv6 network by establishing a new link to JPNAP6, the latest
IPv6 (Internet Protocol Version 6)-capable IX (Internet eXchange point) in Tokyo, with a bandwidthof 100Mbps.
Development of IIJ Group Companies
Crosswave, a 37.9% affiliate: In May 2002, Crosswave signed a syndicated financing facility
agreement with four leading Japanese commercial banks for a total of JPY20 billion. The agreement
consists of a six-year, long-term loan of up to JPY15 billion and a short-term line of credit of up to
JPY5 billion. In connection with this financing, IIJ entered into a cash deficiency support ("CDS")
agreement. Under the CDS agreement, IIJ deposited JPY5 billion with an agent bank, which isavailable for withdrawal in the event of a shortage in Crosswave's loan repayment obligations and/or
breaches in conditions specified in the loan and CDS agreement. Also in connection with thisfinancing, Crosswave has granted stock acquisition rights exercisable for a total of 30,000 shares of
Crosswave's common stock, equivalent to 6,000,000 American Depository Shares (ADSs), to IIJ andthe bank consortium.
Asia Internet Holding (AIH, a 26.7% affiliate): AIH expanded the service area of "A-Bone Roaming
Platform" to Korea in cooperation with Hanaro Telecom Inc. As a result, "A-Bone Roaming Platform"
covers seven countries/areas in the Asia region (Japan, Hong Kong, Singapore, Philippines, Thailand,
Malaysia and Korea).

Internet Initiative Japan Inc.
August 13, 2002
Page 4
The 1st Quarter of FY2002 Financial Results
Starting from 1Q02 results in quarterly earnings release, IIJ data center connectivity services revenues
have been reclassified from value added service revenues into dedicated access service revenues. All
prior periods presented have been reclassified to conform to the current presentation.
Revenues
Revenues in 1Q02 totaled JPY9,849 million, an increase of 18.2% compared to 1Q01, and a decreaseof 18.7% compared to 4Q01.
Connectivity services and value-added services revenues were JPY5,620 million in 1Q02, a
decrease of 1.5% compared to 1Q01 and 3.8% compared to 4Q01.
Dedicated access service revenues decreased slightly to JPY3,523 million in 1Q02, compared to
JPY3,524 in 1Q01, and decreased 3.3% from 4Q01. These declines were mainly a result of theconsolidation of some large customers’ Internet connectivity. Despite these declines in revenue, thecontracted bandwidth of dedicated access services increased steadily, reflecting the growing demandfor higher bandwidth.
Dial up access service revenues were JPY822 million in 1Q02, a decrease of 16.4% compared to 1Q01,
and a decline of 2.6% compared to 4Q01. These declines were due to the decrease in conventional
dial-up service revenues and IIJ4U revenues.
Value-added service revenues were JPY865 million in 1Q02, an increase of 16.2% compared to 1Q01
and an increase of 5.1% compared to 4Q01. These increases were mainly due to the steady revenue
growth of security related services.
Systems integration service revenues were JPY3,329 million in 1Q02, an increase of 46.0%
compared to 1Q01 but a decrease of 37.6% compared to 4Q01. The decline from 4Q01 reflects the
expected seasonal downturn in the SI business. As a result of the increase in recurring service revenues,
such as monitoring, maintenance and other operation services, SI revenue increased steadily comparedto 1Q01.
Table 1. Number of Contracts
Internet Access Services
IP Service

64kbps – 128kbps
192kbps – 768kbps
1Mbps – 2Mbps
3Mbps – 1.2Gbps
Internet Data Center Connectivity Services (4)Others(5)Total Dedicated Access Services Contracts
(4)
(5)

1Q02
108
33
263
183
122
3,269
3,978

4Q01
142
42
270
156
110
2,900
3,620

1Q01
245
61
246
115
69
1,990
2,726

The figures of Internet data center connectivity services do not include the number of contracts for data center housing services.
Others includes 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

86,297232,330
318,627

Table 2. Revenue Breakdown in Dedicated Access Services
1Q02
IP Service + DC connectivity
2,574
Others949

89,213
171,363
260,576

94,802
66,341
161,143(JPY in millions)
4Q01
1Q01
2,651
2,569
992
955

Internet Initiative Japan Inc.
August 13, 2002
Page 5
Table 3. Contracted Bandwidth
Dedicated Access Services
Internet Data Center Connectivity Service
Total Contracted Bandwidth

1Q02
12.2
2.2
14.4

(Unit: Giga bit per second)
4Q01
1Q01
9.4
4.6
2.0
n/a
11.4
4.6

Cost and expenses
Total cost was JPY8,956 million in 1Q02, an increase of 22.9% compared to 1Q01 but a decrease of
16.4% compared to 4Q01.
Backbone costs
International backbone costs were JPY449 million, a decrease of 48.2% compared to 1Q01 but anincrease of 1.4% compared to 4Q01. The year-over-year decrease reflects IIJ’s continued efforts to
reduce the costs of the Japan-US backbone lines. By comparison with 4Q01, international backbone
costs increased slightly as a result of a capacity upgrade. The monthly backbone costs per unit declined
by approximately 76% in the year-over-year comparison, and by approximately 20% as compared to
4Q01.
Domestic backbone costs were JPY800 million, an increase of 3.4% from 1Q01 but a decrease of 4.3%
compared to 4Q01. This decrease from 4Q01 was due to a shift to lower priced backbone lines.
Table 4. Backbone Costs
International Backbone Costs
Domestic Backbone Costs

1Q02
449
800

(JPY in millions)
4Q01
1Q01
443
867
836
774

Cost of SI (Systems Integration) revenues
Cost of SI sales was JPY2,987 million, an increase of 56.1% compared to 1Q01 but a decrease of
36.9% compared to 4Q01. The gross margin ratio for SI deteriorated slightly to 10.3% in 1Q02 from
11.2% in 4Q01 due to the lower profitability of SI development contracts in this quarter.
Sales and marketing expenses
Sales and marketing expenses were JPY749 million in 1Q02, a decrease of 8.5% compared to 1Q01
but an increase of 12.7% compared to 4Q01. The year-over-year decline was due to the decreases inadvertising costs and bad debt expenses. The increase from 4Q01 was due to the increase in sales
personnel expenses that were needed to effectively compete within the enterprise network market for
high-end corporate customers.
General and administrative expenses
General and administrative expenses were JPY517 million in 1Q02, an increase of 17.8% compared to
1Q01 and an increase of 7.7% compared to 4Q01. This year-over-year increase was a result of theincrease in personnel expenses which reflects the overall growth of our operations.
Operating Loss
As a result of the lower revenues and the increase in human capital investments that are typical in April,the operating loss increased to JPY464 million in 1Q02, compared to a loss of JPY300 million in 1Q01,
and income of JPY186 million in 4Q01. The ratio of operating income to revenues for 1Q02 was(-)4.7%, compared to (-)3.6% in 1Q01, and to 1.5% in 4Q01.
Other expenses
Other expenses for 1Q02 were JPY521 million, compared to JPY61 million in 1Q01, and to JPY338
million in 4Q01. IIJ recorded a foreign exchange loss of JPY298 million on dollar denominatedmonetary assets due to the sharp appreciation of Yen to the U.S. dollar in 1Q02, compared to a gain of
JPY23 million in 1Q01 and JPY31 million in 4Q01. In 1Q02, IIJ also recorded a JPY77 million nonmonetary loss as a result of the stock exchange in a merger transaction.

Internet Initiative Japan Inc.
August 13, 2002
Page 6
Income tax expense (benefit)
Income tax expense for 1Q02 was JPY161 million, compared to an expense of JPY127 million in
1Q01 and to a benefit of JPY140 million in 4Q01. This is a result of an increase in the valuation
allowance for deferred tax assets attributable primarily to the income tax effect of decreasing
unrealized gains on a certain available-for-sale securities.
Equity in net loss of equity method investees
Equity in net loss of equity method investees increased to JPY1,516 million in 1Q02, compared to
JPY1,219 million in 1Q01, and JPY1,647 million in 4Q01. This primarily resulted from the equity
loss in Crosswave.
Net loss
Net loss was JPY2,595 million in 1Q02, compared to JPY1,665 million in 1Q01 and JPY1,667 million
in 4Q01. Basic net loss per ADS equivalent was JPY(-)57.72 in 1Q02, compared to JPY(-)37.03 in
1Q01 and JPY(-)37.07 in 4Q01.
Table 5. Other Financial Statistics
1Q02
329
1,015
820

Adjusted EBITDA
CAPEX, including capitalized leases
Depreciation and amortization(6)
(6)

4Q01
968
913
812

(JPY in millions)
1Q01
376
1,076
706

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
primarily 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 toconstruction 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, or predictions
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 to differ materially fromthose contained in any forward-looking statement. These risks, uncertainties and other factors include: IIJ’s ability tomaintain positive operating income, IIJ’s net loss for the past five fiscal years and its expectation that net losses willcontinue, 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; thesuccess of IIJ’s investments in Crosswave; the ability to compete in a rapidly evolving and competitive marketplace;the impact of technological changes in its industry; and other risks referred to from time to time in IIJ’s filings on
Form 20F of its annual report and other filings with the United States Securities and Exchange Commission.

Tables to follow

INTERNET INITIATIVE JAPAN INC.
CONSOLIDATED STATEMENTS OF OPERATIONSAppendix 1

For the Three Months Ended Jun 30, 2002, Jun 30, 2001 and Mar 31, 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
Jun 30, 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

Jun 30, 2001
% of
Total
Revenues

YOY
Chg %

Sequential Comparison
Mar 31, 2002
% of
Total
QOQ
JPY
RevenuesChg %29,398
6,861
7,218
3,412
46,8893,523,334
822,268
865,161
408,925
5,619,688

35.8%
8.3
8.8
4.2
57.1

3,523,676
983,461744,352
452,126
5,703,615

42.3%
11.8
8.9
5.4
68.4

0.0%
(16.4)
16.2
(9.6)
(1.5)

3,643,141
844,279
823,137
533,191
5,843,748

30.1%
7.0
6.8
4.4
48.3

(3.3%)(2.6)
5.1(23.3)(3.8)

27,777
7,513
82,1793,329,058
900,456
9,849,202

33.8
9.1
100.0

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

27.4
4.2
100.0

46.0
157.7
18.2

5,331,986
934,040
12,109,774

44.0
7.7
100.0

(37.6)(3.6)(18.7)

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

42,491
24,926
7,309
74,726

5,092,515
2,987,373
876,012
8,955,900

51.7
30.3
8.9
90.9

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

60.8
23.0
3.7
87.5

0.5
56.1
185.2
22.9

5,110,291
4,734,363
865,354
10,710,008

42.2
39.1
7.1
88.4

(0.3)
(36.9)
1.2(16.4)

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

6,253
4,316
757
86,052

749,361
517,316
90,780
10,313,357

7.6
5.3
0.9
104.7

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

9.8
5.3
1.0
103.6

(8.5)
17.8
4.8
19.5

665,204
480,376
68,09011,923,678

5.5
4.0
0.6
98.5

12.7
7.7
33.3
(13.5)

Operating income (loss)(3,873)(464,155)(4.7)(299,814)

(3.6)

54.8

186,0961.5(349.4)

Other expenses(4,346)(520,836)(5.3)(61,484)

(0.7)

747.1

(337,694)

(2.8)

54.2

Loss before income tax expense (benefit)(8,219)(984,991)(10.0)(361,298)

(4.3)

172.6

(151,598)

(1.3)

549.7

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

1,346
559
(12,646)

161,301
66,950(1,515,675)

1.6
0.7(15.4)

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

1.5
0.5(14.7)

26.8
56.3
24.3

(140,381)(8,849)(1,646,603)

(1.2)
(0.1)
(13.6)(214.9)(856.6)(8.0)

Net loss(21,652)(2,595,017)(26.3%)(1,664,876)(20.0%)

55.9%(1,666,669)(13.8%)

55.7%

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(115,437)(57.72)
22,48044,960,000(74,060)(37.03)22,48044,960,000(74,140)(37.07)22,48044,960,000

Note (1):The translations of Japanese yen amounts into US dollar amounts with respect to the three months ended Jun 30, 2002 are included solely for the convenience of readers outside Japanand have been made at the rate of JPY 119.85 =$1, the approximate rate of exchange on Jun 28, 2002.
Note (2):IIJ datacenter connectivity services revenues have been reclassified from value added services revenues into dedicated access services revenues in the 1st quarter.
All prior periods presented have been reclassified to conform to the current presentation and such reclassification resulted in an increase of dedicated access services revenues
by Y280,410 thousand, Y136,764 thousand and Y257,599 thousand for the three month periods ended June 30,2002, June 30, 2001 and March 31, 2002, respectively.

INTERNET INITIATIVE JAPAN INC.
CONSOLIDATED BALANCE SHEETSAppendix 2

As of Jun 30, 2002, Jun 30, 2001 and Mar 31, 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

Jun 30, 2002
JPY%

Jun 30, 2001
JPY%

Mar 31, 2002
JPY%

50,18557,345
2,276
5,388
1,170

6,014,693
6,872,763
272,821645,763
140,162

14.7%
16.7
0.7
1.6
0.3

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

25.9%
11.1
0.5
1.0
1.0

11,045,919
8,981,912
620,409416,945
143,798

24.4%
19.9
1.4
0.9
0.3

116,364

13,946,202

34.0

19,186,578

39.5

21,208,983

46.9

61,717
41,34264,327
41,71910,8656,204

7,396,756
4,954,787
7,709,559
5,000,000
1,302,234
743,614

18.0
12.0
18.8
12.2
3.2
1.8

12,690,980
7,766,900
7,348,823
0887,636
671,331

26.2
16.0
15.1
0.0
1.8
1.4

8,854,028
5,406,065
7,755,426
0
1,266,055
772,226

19.6
11.9
17.1
0.0
2.8
1.7

342,538

41,053,152

100.0%

48,552,248

100.0%

45,262,783

100.0%

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

37,97140,338
2,653
4,643
11,681
17,1914,550,835
4,834,546
317,968
556,494
1,400,000
2,060,284

11.1%
11.8
0.8
1.3
3.4
5.0

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

3,820,232
7,085,579
247,606
506,797
1,400,000
1,973,769

8.4%
15.7
0.5
1.1
3.1
4.4

Total current liabilities

114,477

13,720,127

33.4

11,582,683

23.9

15,033,983

33.2

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

28,369125,156
23,367760
1,366

3,400,000
15,000,000
2,800,483
91,037
163,686

8.3
36.6
6.8
0.2
0.4

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

7.0
30.9
6.1
0.2
0.1

3,400,000
15,000,000
2,861,556
100,841
108,376

7.5
33.2
6.3
0.2
0.2

293,495

35,175,333

85.7

33,096,860

68.2

36,504,756

80.6

8,058

965,796

2.3

633,262

1.3

1,032,746

2.3

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

59,093
142,414(173,579)
13,057

7,082,336
17,068,353(20,803,486)
1,564,820

17.3
41.6
(50.7)
3.8

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

14.6
35.1
(25.6)
6.4

7,082,336
17,068,353(18,208,469)
1,783,061

15.7
37.7
(40.2)
3.9

Total shareholders' equity

40,985

4,912,023

12.0

14,822,126

30.5

7,725,281

17.1

Total liabilities and shareholders' equity

342,538

41,053,152

100.0%

48,552,248

100.0%

45,262,783

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

Note (1): The translations of Japanese yen amounts into US dollar amounts with respect to Jun 30, 2002 are included solely for the convenience of readers outside Japanand have been made at the rate of JPY119.85 =$1, the approximate rate of exchange on Jun 28, 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.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWSAppendix 3

For the Three Months Ended Jun 30, 2002, Jun 30, 2001 and Mar 31, 2002
(Expressed in Thousands of Japanese Yen (JPY) and U.S. Dollars (USD)) (1)

Jun 30, 2002
JPY
USD (1)

Jun 30, 2001
JPY

Mar 31, 2002
JPY

Operating Activities:
Net loss
Depreciation and amortization
Equity in net loss of equity method investees
Minority interests in net (loss) income of consolidated subsidiarie
Foreign exchange losses (gains)
Losses on other investments
Decrease (increase) in accounts receivable
Increase (decrease) in accounts payable
Decrease (increase) in inventories
Deferred income taxes
Other
Net cash provided by (used in) operating activities(21,652)
6,844
12,646
(559)
1,125
658
17,605(16,657)
2,900
1,275
(380)
3,805

(2,595,017)
820,252
1,515,675(66,950)
134,820
78,8192,109,969(1,996,362)
347,588
152,840(45,560)
456,074(1,664,876)
706,463
1,219,215(42,834)(22,776)
15,781(298,183)(18,033)
121,705(247,541)(231,079)(1,666,669)
811,652
1,646,603
8,849
3,990
104,700(3,183,806)
3,696,329(398,876)(145,560)
214,793
1,092,005

Investing Activities:
Purchase of property and equipment
Investments in and advances to equity method investees
Purchase of other investments
Deposit to restricted cash
Payment of guarantee deposits-net
Other
Net cash used in investing activities(3,540)(469)(41,719)(302)(18)(46,048)(424,321)(56,250)(5,000,000)(36,155)(2,143)(5,518,869)(179,145)(49,500)(50,353)(23,265)(302,263)(501,667)(24,123)(350,000)(2,007)22,299(855,498)

Financing Activities:
Proceeds from long-term borrowings
Principal payments under capital leases
Net increase (decrease) in short-term borrowings
Net cash provided by (used in) financing activities(4,727)
6,096
1,369

(566,505)
730,603
164,098

600,000(475,813)(600,000)(475,813)(535,906)
120,018(415,888)

Effect of Exchange Rate Changes on Cash

(1,106)(132,529)

13,19259,223

Net Decrease in Cash

(41,980)(5,031,226)(995,963)(120,158)

Cash, Beginning of Period

92,165

11,045,919

13,570,707

11,166,077

Cash, End of Period

50,185

6,014,693

12,574,744

11,045,919-

Note (1): The translations of Japanese yen amounts into US dollar amounts with respect to the three months ended June 30, 2002 are included solely for the convenienceof readers outside Japan and have been made at the rate of JPY119.85 =$1, the approximate rate of exchange on June 28, 2002.