2002 年 11 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。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 2 四半期（
7 - 9 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 11 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 2 四半期 (7-9 月) の決算発表 要約
・2002 年度第 2 四半期の売上高は 106 億円（前年同期比 10.9% 増、前期比 7.3% 増）。景気の低迷が続く中、IIJ 四半期決算としては 2 番目に高い売上高を達成した。
・粗利益率は 11.0 ％へ（前年同期 14.1 ％、前期 9.1 ％）。システム・インテグレーション事業におけるエンタープライズ市場展開が奏功しはじめてきたことが、前四半期と比しての改善につながった。
・営業損失は１９４百万円となり、前期比 58.3 ％の改善となった。ブロードバンド化の進展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 CDN（ブロードバンドに最適化されたコンテンツ配信網）をはじめとするネットワーク強化に本格的に着手している。これに関連して先行費用負担が発生しているものの、営業収益の拡大により下期より収支は改善していく見込み。
・2002 年度上期の売上高は、ガイダンスどおりの前年比 14.3 ％の伸びを達成。
・2002 年度第 3 四半期の売上高は、105 億円-110 億円となる見込み。2002 年度通期売上高は、引き続き前年度比約 20％増を見込んでいる。
・景気の動向は極めて不透明ではあるが、2002 年度通期の営業損益の黒字を見込んでいる。
・電力会社通信事業との運営一体化については真剣な検討を重ねており、当初の予定どおり2002 年 12月末までには合意に至る予定。

概況
ブロードバンド化の進展による、インターネット・トラフィックの急速な伸びが顕著である。当社の専用線接続
サービスの総契約帯域は22.7Gbpsに跳ね上がった（前期比57.6% 増、前年同期比3.4 倍）。IPサービスの平均契約帯域も12.9Mbpsへ伸びている（前期比23.6% 増、前年同期比約2倍）。2002年度第2四半期はCDNなどバックボーン・ネットワークの強化に注力したこともあり、CAPEX （設備投資費用）は前期比48% 増の15億円、通期では当初の想定どおり、45億円から50億円の範囲を予定している。
2002年度下期の接続サービスは、「CDNサービスの伸び」「CATV 事業者からの収入増」「Internet VPNの投入によるWAN（広域ネットワーク）戦略」により増加する見込み。システムインテグレーション事業は引き続き、金融、通信、教育業界からの売上げ寄与度が高いが、伊藤忠テクノサイエンスなど大型エンタープライ
ズ・ネットワーク案件の実績が増えつつあり、今後の更なる伸びを期待している。尚、2002年度上半期のSI事業の主要顧客は、DLJディレクトSFG 証券、伊藤忠テクノサイエンス、マネックス証券、ケイ・オプティコム、
トヨタ自動車等だった。インターネットデータセンター事業は、2003年初に予定されている2 つのデータセン
ターのグランド・オープンに向けて新サービス「リソース・オンデマンドDCサービス」を機軸とした展開が予定されており、やはり年度末に向けて売上高の増大を見込んでいる。

（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)

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

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

2Q01
213
49
258
123
81
2,149
2,873

84,432309,950
394,382

86,297232,330
318,627

94,104
86,123
180,227

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)

2Q02
2,657
889

1Q02
2,574
949

2Q02
18.0
4.7
22.7

1Q02
12.2
2.2
14.4

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

2Q01
6.4
0.3
6.7
( 百万円)

2Q02
448
815

1Q02
449
800

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

2Q01
2,585
1,012

2Q02
662
1,504
884

2Q01
623
805
(百万円)

1Q02
329
1,015
820

2Q01
712
931
726

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9月期、
月期、2001年
年9月期、月期、2002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、前年同四半期比較
2002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(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9月期
対営業収益%

対前年同四半期%

JPY

前四半期比較
2002年6月期
対営業収益 対前四半期%%

29,131
6,504
7,336
3,844
46,8153,546,372
791,738
893,135
467,976
5,699,221

33.6%
7.5
8.4
4.4
53.9

3,596,601
932,653
720,145
303,4815,552,880

37.7%
9.8
7.6
3.2
58.3

(1.4%)(15.1)
24.0
54.2
2.6

3,523,334
822,268
865,161
408,925
5,619,688

35.8%
8.3
8.8
4.2
57.1

0.7%
(3.7)
3.2
14.4
1.4

25,416
14,58086,811

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

29.3
16.8
100.0

3,352,363
623,064
9,528,307

35.2
6.5
100.0

(7.7)
184.9
10.9

3,329,058
900,456
9,849,202

33.8
9.1
100.0

(7.1)
97.1
7.3

41,73822,03013,53877,306

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

48.1
25.3
15.6
89.0

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

50.9
29.4
5.6
85.9

4.8
(4.2)
208.3
15.0

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

51.7
30.3
8.9
90.9

(0.2)
(10.2)
88.1
5.1

6,105
4,223
769
88,403

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

7.0
4.9
0.9
101.8

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

8.6
4.5
0.8
99.8

(9.3)
20.5
11.7
13.1

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

7.6
5.3
0.9
104.7

(0.8)
(0.6)
3.1
4.4

営業利益（損失）(1,592)(193,782)(1.8)

15,9980.2(1,311.3)(464,155)(4.7)(58.3)

その他の費用

(1,316)(160,247)(1.5)(430,259)(4.5)(62.8)(520,836)(5.3)(69.2)

税引前当期損失(2,908)(354,029)(3.3)(414,261)(4.3)(14.5)(984,991)(10.0)(64.1)

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

4,229
190
(12,161)

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

4.9
0.2(14.0)

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

13.3
(0.1)
(14.7)(59.3)(518.3)
5.9

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

1.6
0.7(15.4)

219.2(65.4)(2.3)

当期損失(19,108)(2,326,166)(22.0%)(3,084,761)(32.4%)(24.6%)(2,595,017)(26.3%)(10.4%)

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(103,477)(51.74)
22,48044,960,000(137,222)(68.61)
22,48044,960,000(115,437)(57.72)
22,48044,960,000

注記(1): 2002年9月期につきましては、米ドル換算レート121.74円=1米ドル(2002/9/30)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9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、165,445千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 2

2002年
年9月期、
月期、2001年
年9月期、月期、2002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)

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39,20464,435
3,415
4,096
1,166

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

12.2%
20.1
1.1
1.3
0.3

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

25.5%
13.3
2.3
0.9
0.9

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

14.7%
16.7
0.7
1.6
0.3

流動資産合計112,316

13,673,371

35.0

19,158,786

42.9

13,946,202

34.0

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

48,43330,81670,78941,071
11,4395,806

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

11,608,736
4,727,410
7,585,480
0890,444664,675

26.0
10.6
17.0
0.0
2.0
1.5

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

資産合計

320,670

39,038,342

100.0%

44,635,531

100.0%

41,053,152

100.0%

39,69342,1482,231
3,635
11,50018,656

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

3,770,445
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

4,550,835
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

117,863

14,348,620

36.7

11,737,280

26.3

13,720,127

33.4

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

27,928123,21426,704682
1,265

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

8.7
38.4
8.4
0.2
0.4

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

8.5
33.6
6.6
0.2
0.1

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

8.3
36.6
6.8
0.2
0.4

負債合計

297,656

36,236,593

92.8

33,627,764

75.3

35,175,33385.7

少数株主持分

7,743

942,650

2.4

1,019,912

2.3

965,796

2.3

58,176140,203(189,992)
6,884

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

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(20,803,486)
1,564,820

17.3
41.6
(50.7)
3.8

資本合計

15,271

1,859,099

4.8

9,987,855

22.4

4,912,023

12.0

負債、少数株主持分及び資本合計

320,670

39,038,342

100.0%

44,635,531

100.0%

41,053,152

100.0%%

2001年9月期
JPY%

2002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): 2002年9月期につきましては、米ドル換算レート121.74円=1米ドル(2002/9/30)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 3

2002年
年9月期、
月期、2001年
年9月期、月期、2002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、
2002年9月期
USD (1)
JPY

2001年9月期

2002年6月期

JPY

JPY(3,084,761)(2,595,017)

営業活動によるキャッシュフロー：当期損失(19,108)(2,326,166)

減価償却費等

7,259

883,732

726,278820,252

持分法による投資損失

12,1601,480,411

1,398,509

1,515,675

少数株主損益(190)(23,146)

5,533(66,950)

為替差損（差益）(321)(39,060)

178,577

134,820

投資有価証券評価損等

112

13,62028,82478,819

売掛金の減少（増加）額(7,984)(972,056)(566,601)

2,109,969

61

7,462

513,802(1,996,362)

棚卸資産の減少（増加）額(1,174)(142,950)(748,850)

347,588

法人税等調整額

4,183

509,228

1,264,707

152,840

買掛金及び未払金の増加（減少）額

その他
営業活動によるキャッシュフロー(66)(8,051)

388(45,560)(5,068)(616,976)(283,594)

456,074(1,826)(222,308)(393,770)(424,321)

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--(321,094)(56,250)

その他投資の取得による支出(273)(33,294)(100)-

拘束預金への預け入れ

-

-

-

(5,000,000)

敷金保証金の純支出額(719)(87,518)(2,794)(36,155)

24

2,953

(20,141)(2,143)(2,794)(340,167)(737,899)(5,518,869)--

1,400,000-

リース債務の元本返済による支出(4,938)(601,144)(494,991)(566,505)

短期借入金の純増減額

2,318

282,164(1,249,555)

730,603

その他
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：長期借入金による収入

少数株主の増資引受けによる払込額--

375,000-

財務活動によるキャッシュフロー(2,620)(318,980)

30,454

164,098

現金及び現金同等物に係る換算差額

280

34,183(171,738)(132,529)

現金及び現金同等物の減少額(10,202)(1,241,940)(1,162,777)(5,031,226)

現金及び現金同等物の期首残高

49,406

6,014,693

12,574,744

11,045,919

現金及び現金同等物の期末残高

39,2044,772,753

11,411,967

6,014,693

注記(1): 2002年9月期につきましては、米ドル換算レート121.74円=1米ドル(2002/9/30)にて参考表示しております。

Internet Initiative Japan Inc.
November 12, 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 2nd Quarter 2002 Ended September 30, 2002-- Continued solid revenue growth despite sluggish Japanese economy -Tokyo, November 13, 2002 / New York, November 12, 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 2nd quarter ended September 30, 2002 of the fiscal year ending March 31, 2003(“fiscal 2002”). On November 13 at 9:00 am (EST), the Company will host a conference call to discuss theresults and its outlook. There will be a simultaneous webcast available at www.vcall.com. A replay will also be
available at the same URL.

The 2nd Quarter of FY2002 Results Summary
・ In 2Q02, total revenues grew as expected to JPY10.6 billion ($86.8 million), the second highest
quarterly revenue amount in IIJ history. This represents an increase of 10.9% compared to 2Q01 andan increase of 7.3% compared to 1Q02. IIJ achieved this solid revenue growth despite the sluggish
Japanese economy.
・ IIJ’s gross margin was 11.0% in 2Q02, which is a decrease from 14.1% in 2Q01 but an increase
from 9.1% in 1Q02. The 2Q02 results showed IIJ’s diversification effort of its SI business into thelarger enterprise network market started to generate greater amounts of profits as IIJ no longer
needed to pay the initially higher costs associated with entering the enterprise network market
business.
・ IIJ reported an operating loss of JPY194 million ($1.6 million) in 2Q02, compared to operating
income of JPY16 million in 2Q01. The operating loss improved by 58.3% compared to the previous
quarter. The loss reflected IIJ’s initiatives in supporting Japan’s growing broadband market bystrengthening its network structure including construction of CDN (Content Delivery Network).
・ Adjusted EBITDA (1) was JPY662 million, which was in line with expectations.
・ Total revenues for the first half of fiscal 2002 grew by 14.3% compared to the first half of fiscal
2001, which were in line with the Company’s expected guidance range.
・ For 3Q02, IIJ expects total revenues to be between JPY10.5 billion ($86.2 million) and JPY11.0
billion ($90.4 million). For the full 2002 fiscal year, IIJ continues to expect total revenues to growby approximately 20% compared to fiscal 2001. Towards the end of the current fiscal year, theCompany sees a gradual increase in the Connectivity Service revenues driven by increased demand
for CDN, VPN (Virtual Private Network) and broadband connectivity services to CATV (Cable TV)
companies. IIJ also expects revenues from its Internet Data Center business to increase toward theend of the current fiscal year as a result of active marketing efforts in connection with two largescale data centers that will open in early 2003.
・ The Company continues to expect positive operating income for full fiscal 2002, although there is
uncertainty as to the amount due to the unclear macro-economic situation in Japan.
・ At this time, IIJ confirms that the Company has been in intensive discussions with PoweredCom,
Inc., a 32.06% affiliate of Tokyo Electric Power Company (TEPCO), about a possible businessintegration. IIJ is confident that the parties will reach an agreement by the end of December 2002.
(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 JPY121.74 = US$1, the approximate exchange rate on September 30, 2002.

Internet Initiative Japan Inc.
November 12, 2002
Page 2
Overview of 2Q02 Results and Business Outlook“The recent growth in broadband Internet traffic in Japan clearly indicates that Japan is moving
forward in creating unique broadband communities nationwide,” said Koichi Suzuki, President andCEO of IIJ. “In order to effectively support, manage and capitalize on such significant Internet traffic
growth, we started a process of strengthening our backbone network structure in this quarter, which
includes the construction of IIJ CDN (Content Delivery Network). While the rapid traffic increase
requires us to increase spending on the strengthening and restructuring of our backbone network, we
expect these initiatives will capture a significant number of network operators and will influence themto use our services for their customers.”
The enormous growth of broadband in Japan requires traditional Japanese ISPs to make significant
investments in backbone networks as well as experienced network professionals in order to handle thevolume of traffic. IIJ sees even major ISPs starting to outsource their systems to network providers due
to financial and human resource limitations.
The growth trend for broadband Internet remains strong. In 2Q02, total contracted bandwidth for IIJ’s
Dedicated Access Services and Internet Data Center Services jumped to 22.7Gbps, an increase of
57.6% compared to 14.4Gbps in 1Q02 and a 3.4 times increase compared to 6.7Gbps in 2Q01. The
average bandwidth per IP Service (full-fledged dedicated access service) contract increased to
12.9Mbps, an approximately 2.0 times increase compared to 6.4Mbps in 2Q01 and an increase of
23.6% compared to 10.4Mbps in 1Q02. The high growth is due to a growing number of contracts forthe higher bandwidth IP Service.
Domestic IX (Internet eXchange) traffic also surged dramatically. At the end of September 2002, total
Internet traffic that came through Japan’s three commercial IXs was 35Gbps, a 3.4 times increase fromthe same period in 2001.
According to the Ministry of Public Management, Home Affairs, Posts and Telecommunications(MPHPT), the number of ADSL subscribers reached 4.2 million at the end of September 2002, a 8.4
times increase compared to 0.5 million subscribers in September 2001. CATV Internet users reached
1.8 million in September 2002, a 50% increase compared to 1.2 million in September 2001. At thesame time, the FTTH access market is also becoming increasingly competitive, benefiting end users inJapan by enabling them to utilize faster last mile access lines than ADSL lines. As of September 2002,
the number of FTTH subscribers was 114,608.
Broadband growth is expected to continue. IDC Japan predicts that Japanese broadband will continue
to grow by 45.9% annually between 2002 and 2006, and the number of broadband subscribers in Japan
will reach 18.8 million in 2006.
“In a response to the recent rapid increase in Internet traffic, we continue to upgrade our domestic
backbone networks, while further streamlining our cost structure,” said Yasuhiro Nishi, CFO of IIJ.
“In 2Q02, our capital expenditure increased by 48% compared to 1Q02 mainly due to expenditures for
the CDN platform and relevant network facilities. However, we expect to keep our capital expenditure
for full fiscal 2002 between JPY4.5 billion and JPY5.0 billion as expected, as we further improve ourcost structure by integrating our network operation centers and data centers.”
Outlook for Connectivity Services
IIJ has focused on stimulating its Connectivity Services business, which is the core of its total network
solutions business. Although revenues-per-contract in IP Services have steadily increased as theCompany has captured broadband demand in the corporate market, revenues per 1Mbps have sharply
declined and the revenue growth for connectivity services was stagnant. To address the issue, IIJ is
executing the three following strategic initiatives and sees a gradual recovery in the Connectivity
Service business towards the end of the current fiscal year.
CDN JAPAN
Since its launch in August 2002, IIJ has enjoyed a good reputation for its high-quality broadband
content delivery network and systems. By leveraging its record and reputation, IIJ aims to launch its
CDN services for various network operators, including ISPs, in 3Q02.

Internet Initiative Japan Inc.
November 12, 2002
Page 3
CATV strategy
IIJ places a particular strategic focus on the CATV market, since it is one of the most aggressive
bandwidth-hungry markets. Through its alliance with regional CATV operators, IIJ currently has morethan a 50% share of the CATV Internet market in Japan. IIJ expects to increase revenues from CATV
operators towards the end of the current fiscal year by increasing the number of such alliance partners.
WAN strategy
In 2Q02, IIJ started to develop a new Internet VPN service called “IIJ Internet VPN Standard,” which
launched in November 2002. By introducing the new service, which is among the lowest priced
services in the industry, the Company aims to expand its customer base for the IIJ Group's WAN(Wide-area Network) solutions. The Group's WAN solutions have been well recognized, as
exemplified by Crosswave's achievement in acquiring more than 200 customers just a few years after
the launch of Japan's first Ethernet-based WAN services. With the new service, we will continue topromote the shift of corporate networks from conventional frame-relays or ATMs (AsynchronousTransfer Mode) to a broadband WAN, and continue to lead the way in the fast-growing Japanese WAN
market.
Outlook for Systems Integration services
By leveraging its strong customer record in serving the financial industry in Japan, IIJ group started todiversify its SI business by moving into enterprise network market, which is a bigger market andrequires high-level skills and knowledge in systems flows. Although most of IIJ’s SI revenues
continue to come from the financial, telecommunications and educational industries, IIJ has
successfully diversified the business into the enterprise market by capturing contracts from highprofile corporate clients such as that from Itochu Techno-Science Corporation. IIJ expects to secure
more enterprise network business in the coming quarters.
Of IIJ’s SI revenues, approximately 65% come from development of network system and 35% from arecurring fees for operation and maintenance. IIJ expects the recurring fee ratio to gradually rise ascustomers increasingly outsource their systems ’ operations and maintenance.
Key customers in IIJ’s SI business in the first half of fiscal year 2002 include DLJdirect SFG Securities
Inc. (finance), Itochu Techno-Science Corporation (IT solution), Monex Inc., (finance), K-Opticom
Corporation (telecom), Toyota Motor Corporation and Konami (entertainment).
Outlook for Internet Data Center Services
In addition to the current nine Internet data centers, IIJ plans to open two Internet data centers in early
2003. IIJ and the IIJ group companies are developing a new line-up of data center services called“Resource on Demand DC Services”. This new line-up of services offers a full range of data center
services that are available on a component basis for customers. Service components include facility,
network, systems, operation and maintenance, and disaster recovery. Customers will be able to have as
many component services as they need. Details of the new service will be announced separately.
Forecasted financial performance for the third quarter and full fiscal 2002
For the third quarter of fiscal 2002, IIJ expects total revenues to be between JPY10.5 billion and
JPY11.0 billion. IIJ continues to expect total revenues for full fiscal 2002 to grow by approximately
20% compared to fiscal 2001. The Company also expects a positive operating income for full fiscal
2002, although there is uncertainty as to the amount due to the unclear macro-economic situation in
Japan.
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 3Q02 earnings release, presently scheduled for February 12,
2003. In conjunction with the 2Q02 earnings announcement, IIJ will hold a webcasted conference made available tothe public at www.vcall.com.

Internet Initiative Japan Inc.
November 12, 2002
Page 4
The 2nd Quarter of FY2002 Operating Highlights
New Service Developments under the Total Network Solutions Approach
CDN JAPAN In 2Q02, IIJ launched CDN JAPAN, a broadband content delivery solution forenterprises. The service offers a unique network platform environment that includes: 1) A large-scalebroadband platform that covers several million broadband households nationwide; 2) A closed
network platform that bypasses Internet networks; and 3) Various built-in application components thatenable enterprises to manage broadband content and subscribers. As the first customer of the new
solutions service, Excite Japan has already launched its broadband business. Revenues from CDN
JAPAN are recognized as “Connectivity and value-added services” and “Systems integration services”
in IIJ financial statements, depending on service requirements.
Email Solutions IIJ launched Japan's largest-scale opt-in mail transmission system primarily forservice providers. The system has a transmission capacity of more than two million messages per hour.
Also in 2Q02, IIJ announced that it will launch "IIJ Mail Gateway Service" in November 2002, which
offers an email auditing function that is designed to prevent information leaks. Revenue s from such
email solutions are recognized as "Connectivity and value-added services" in IIJ's financial statements.
In addition to the above, IIJ introduced four new services for retails market during this quarter.
Network Infrastructure Development
In 2Q02, IIJ upgraded four of its domestic backbone networks. In addition, IIJ upgraded its Japan-US
backbone lines to 3.9Gbps, by securing additional capacity between Tokyo and Palo Alto.
New OfficeIn 2Q02, IIJ opened a new office in Toyota City, Japan. IIJ group aims to provide its total network
solutions, with more local support, to the region's businesses --- the largest of which is Toyota Motor
Corporation and its group companies.
Developments of IIJ Group Companies
IIJ Media Communications ("IIJ-MC"), the Company's 50.1% owned subsidiary specializing in webmedia communications, launched a new Internet broadcasting service "Video Conference Bridge",
which enables users to broadcast movie/voice data that is captured by teleconferencing systems.
Revenues from IIJ-MC are recognized as "Systems integration services” in IIJ's financial statements.
Asia Internet Holding Co., Ltd. ("AIH"), the Company’s 26.7% owned affiliate, linked a network of
the Philippines' leading ISP, Globe Telecom, Inc. ("Globe Telecom"), to the A-Bone, AIH's pan-AsianIP backbone network. Globe Telecom, Inc. is a joint venture of the Ayala Corporation and Singapore
Telecom International. Also during this quarter, AIH announced that it will expand its A-Bone VPN
Service to Europe and the U.S. in November 2002. This coverage expansion is realized through a tieup with T-Systems, a division of Deutsche Telekom and Europe's second-largest integrated systems
provider.
The 2nd Quarter of FY2002 Financial Results
Revenues
Revenues in 2Q02 totaled JPY10,568 million, an increase of 10.9% compared to 2Q01, and anincrease of 7.3% compared to 1Q02.
Connectivity services and value-added services revenues were JPY5,699 million in 2Q02, anincrease of 2.6% compared to 2Q01 and an increase of 1.4% compared to 1Q02.
Dedicated access services revenues were JPY3,546 million in 2Q02, a decrease of 1.4% compared to
2Q01, but an increase of 0.7% compared to 1Q02. The decrease compared to 2Q01 was mainly as aresult of decreases in IIJ Economy Service (64-128kbps) and IIJ T1 Standard Service (1.5Mbps),

Internet Initiative Japan Inc.
November 12, 2002
Page 5although full-fledged IP Service and IIJ FiberAccess/F Service (up to 10Mbps-100Mbps) increased
steadily reflecting the strong demand for broadband services.
Value-added services revenues were JPY893 million in 2Q02, an increase of 24.0% compared to 2Q01
and an increase of 3.2% compared to 1Q02. These increases were mainly due to the steady revenue
growth of security related services.
Systems integration services revenues were JPY3,094 million in 2Q02, a decrease of 7.7% comparedto 2Q01 and a decrease of 7.1% compared to 1Q02.
Equipment sales revenues were JPY1,775 million in 2Q02, an increase of 184.9% compared to 2Q01
and an increase of 97.1% compared to 1Q02. This strong growth was due to the steady revenue growthof IIJ’s originally developed router “SEIL” and an increase of contracts in SI business in which we
only sell hardware equipment without system development.
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)

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

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

2Q01
213
49
258
123
81
2,149
2,873

The figures of Internet data center connectivity services do not include the number of 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

84,432309,950
394,382

Table 2. Revenue Breakdown in Dedicated Access Services
2Q02
Total IP Service + DC connectivity
2,657
Others889
Table 3. Contracted Bandwidth
Dedicated Access Services
Internet Data Center Connectivity Service
Total Contracted Bandwidth

2Q02
18.0
4.7
22.7

86,297232,330
318,627

94,104
86,123
180,227(JPY in millions)
1Q02
2Q01
2,574
2,585
949
1,012
(Unit: Giga bits per second)
1Q02
2Q01
12.2
6.4
2.2
0.3
14.4
6.7

Cost and expenses
Cost of total revenues was JPY9,411 million in 2Q02, an increase of 15.0% compared to 2Q01, andan increase of 5.1% compared to 1Q02.
Backbone Costs
International backbone costs were JPY448 million, a decrease of 28.1% compared to 2Q01 and adecrease of 0.2% compared to 1Q02 despite the fact that IIJ upgraded its Japan-US backbone capacity
during this quarter. The monthly unit backbone costs declined by approximately 65% compared to
2Q01, and by approximately 15% compared to 1Q02.
Domestic backbone costs were JPY815 million, an increase of 1.2% compared to 2Q01 and anincrease of 1.8% compared to 1Q02.

Internet Initiative Japan Inc.
November 12, 2002
Page 6
Table 4. Backbone Costs
International Backbone Costs
Domestic Backbone Costs

2Q02
448
815

1Q02

(JPY in millions)
2Q01
449
623
800
805

Cost of SI (Systems Integration) revenues
Cost of SI revenues was JPY2,682 million in 2Q02, a decrease of 4.2% compared to 2Q01 and adecrease of 10.2% compared to 1Q02. The gross margin ratio for SI improved to 13.3% in 2Q02
compared to 10.3% in 1Q02 due to the improvement of the profitability in SI development contracts inthis quarter.
Sales and Marketing Expenses
Sales and marketing expenses were JPY743 million in 2Q02, a decrease of 9.3% compared to 2Q01
and a decrease of 0.8% compared to 1Q02. The decrease compared to 2Q01 was due mainly to thedecrease in advertising expenses.
General and administrative expenses
General and administrative expenses were JPY514 million in 2Q02, an increase of 20.5% compared to
2Q01 but a decrease of 0.6% compared to 1Q02. This increase compared to 2Q01 was a result of theincrease in personnel expenses.
Operating loss
Primarily as a result of profitability improvement of SI services and revenue increases in IP service andvalue added service, the operating loss decreased to JPY194 million in 2Q02 compared to a loss of
JPY464 million in 1Q02, but increased compared to income of JPY16 million in 2Q01. The higher
profitability in SI services in 2Q02 showed IIJ’s diversification effort into the larger enterprise network
market started to generate greater amount of profit as IIJ no longer needed to pay the initially higher
costs associated with entering the enterprise network market business. The operating income torevenues ratio for 2Q02 was (-)1.8%, compared to 0.2% in 2Q01, and to (-)4.7% in 1Q02.
Other expenses
Other expenses for 2Q02 were JPY160 million, compared to JPY430 million in 2Q01, and to JPY521
million in 1Q02. IIJ recorded a foreign exchange gain of JPY54 million on dollar denominatedmonetary assets due to the depreciation of Japanese Yen to the U.S. dollar in 2Q02, compared to a lossof JPY179 million in 2Q01 and JPY298 million in 1Q02. IIJ also recorded interest expense of JPY148
million on borrowing, convertible note and capital lease obligation, which more than offset this foreignexchange gain.
Income tax expense
Income tax expense for 2Q02 was JPY515 million, compared to JPY1,266 million in 2Q01 and
JPY161 million in 1Q02. 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 in 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 JPY1,480 million in 2Q02, compared to
JPY1,399 million in 2Q01, and JPY1,516 million in 1Q02. This is mostly attributed to the equity loss
in Crosswave.
Net loss
Net loss was JPY2,326 million in 2Q02, compared to JPY3,085 million in 2Q01 and JPY2,595 million
in 1Q02. Basic net loss per ADS equivalent was JPY(-)51.74 in 2Q02, compared to JPY(-)68.61 in
2Q01 and JPY(-)57.72 in 1Q02.

Internet Initiative Japan Inc.
November 12, 2002
Page 7
Table 5. Other Financial Statistics
2Q02
662
1,504
884

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

1Q02
329
1,015
820

(JPY in millions)
2Q01
712
931
726

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 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 are subject to various risks, uncertainties and other factors that could cause IIJ’s actual results to differ
materially from those contained in any forward-looking statement. These risks, uncertainties and other factors
include: IIJ’s ability to maintain positive operating income, IIJ’s net loss for the past five fiscal years and its
expectation that net losses will continue, 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 assystems 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 to from time totime 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 OPERATIONS (UNAUDITED)Appendix 1

For the Three Months Ended Sept 30, 2002, Sept 30, 2001 and Jun 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
Sept 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

Sept 30, 2001
% of
Total
Revenues

YOY
Chg %

Sequential Comparison
Jun 30, 2002
% of
Total
QOQ
JPY
RevenuesChg %29,131
6,504
7,336
3,844
46,8153,546,372
791,738
893,135
467,976
5,699,221

33.6%
7.5
8.4
4.4
53.9

3,596,601
932,653
720,145
303,4815,552,880

37.7%
9.8
7.6
3.2
58.3

(1.4%)(15.1)
24.0
54.2
2.6

3,523,334
822,268
865,161
408,925
5,619,688

35.8%
8.3
8.8
4.2
57.1

0.7%
(3.7)
3.2
14.4
1.4

25,416
14,58086,811

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

29.3
16.8
100.0

3,352,363
623,064
9,528,307

35.2
6.5
100.0

(7.7)
184.9
10.9

3,329,058
900,456
9,849,202

33.8
9.1
100.0

(7.1)
97.1
7.3

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

41,73822,03013,53877,306

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

48.1
25.3
15.6
89.0

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

50.9
29.4
5.6
85.9

4.8
(4.2)
208.3
15.0

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

51.7
30.3
8.9
90.9

(0.2)
(10.2)
88.1
5.1

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

6,105
4,223
769
88,403

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

7.0
4.9
0.9
101.8

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

8.6
4.5
0.8
99.8

(9.3)
20.5
11.7
13.1

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

7.6
5.3
0.9
104.7

(0.8)
(0.6)
3.1
4.4

Operating income (loss)(1,592)(193,782)(1.8)

15,9980.2(1,311.3)(464,155)(4.7)(58.3)

Other expenses(1,316)(160,247)(1.5)(430,259)(4.5)(62.8)(520,836)(5.3)(69.2)

Loss before income tax expense(2,908)(354,029)(3.3)(414,261)(4.3)(14.5)(984,991)(10.0)(64.1)

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

4,229
190
(12,161)

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

4.9
0.2(14.0)

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

13.3
(0.1)
(14.7)(59.3)(518.3)
5.9

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

1.6
0.7(15.4)

219.2(65.4)(2.3)

Net loss(19,108)(2,326,166)(22.0%)(3,084,761)(32.4%)(24.6%)(2,595,017)(26.3%)(10.4%)

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(103,477)(51.74)
22,48044,960,000(137,222)(68.61)
22,48044,960,000(115,437)(57.72)
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, 2002 are included solely for the convenience of readers outside Japa
and have been made at the rate of JPY 121.74 =$1, the approximate rate of exchange on Sept 30, 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 2nd 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 Y165,445, as compared to the previous classification method.

INTERNET INITIATIVE JAPAN INC.
CONSOLIDATED BALANCE SHEETS (UNAUDITED)Appendix 2

As of Sept 30, 2002, Sept 30, 2001 and Jun 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

Sept 30, 2002
JPY%

Sept 30, 2001
JPY%

Jun 30, 2002
JPY%

39,20464,435
3,415
4,096
1,166

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

12.2%
20.1
1.1
1.3
0.3

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

25.5%
13.3
2.3
0.9
0.9

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

14.7%
16.7
0.7
1.6
0.3

112,316

13,673,371

35.0

19,158,786

42.9

13,946,202

34.0

48,43330,81670,78941,071
11,4395,806

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

11,608,736
4,727,410
7,585,480
0890,444664,675

26.0
10.6
17.0
0.0
2.0
1.5

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

320,670

39,038,342

100.0%

44,635,531

100.0%

41,053,152

100.0%

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

39,69342,1482,231
3,635
11,50018,656

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

3,770,445
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

4,550,835
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

Total current liabilities

117,863

14,348,620

36.7

11,737,280

26.3

13,720,127

33.4

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

27,928123,21426,704682
1,265

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

8.7
38.4
8.4
0.2
0.4

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

8.5
33.6
6.6
0.2
0.1

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

8.3
36.6
6.8
0.2
0.4

297,656

36,236,593

92.8

33,627,764

75.3

35,175,333

85.7

7,743

942,650

2.4

1,019,912

2.3

965,796

2.3

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

58,176140,203(189,992)
6,884

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

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(20,803,486)
1,564,820

17.3
41.6
(50.7)
3.8

Total shareholders' equity

15,271

1,859,099

4.8

9,987,855

22.4

4,912,023

12.0

Total liabilities and shareholders' equity

320,670

39,038,342

100.0%

44,635,531

100.0%

41,053,152

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 Sept 30, 2002 are included solely for the convenience of readers outside Japanand have been made at the rate of JPY121.74 =$1, the approximate rate of exchange on Sept 30, 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 Crosswav
and four Japanese commercial banks.

INTERNET INITIATIVE JAPAN INC.

Appendix 3

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

Sept 30, 2001

Jun 30, 2002

JPY

JPY

JPY

Operating Activities:
Net loss(19,108)(2,326,166)(3,084,761)(2,595,017)

Depreciation and amortization

7,259

883,732

726,278820,252

Equity in net loss of equity method investees

12,1601,480,411

1,398,509

1,515,675

Minority interests in net (loss) income of consolidated subsidiaries(190)(23,146)

5,533(66,950)

Foreign exchange losses (gains)(321)(39,060)

178,577

134,820

Losses on other investments

112

13,62028,82478,819Decrease (increase) in accounts receivable(7,984)(972,056)(566,601)

2,109,969

Increase (decrease) in accounts payable

61

7,462

513,802(1,996,362)

Decrease (increase) in inventories(1,174)(142,950)(748,850)

347,588

Deferred income taxes

4,183

509,228

1,264,707

152,840

Other
Net cash provided by (used in) operating activities(66)(8,051)

388(45,560)(5,068)(616,976)(283,594)

456,074(1,826)(222,308)(393,770)(424,321)

Investing Activities:
Purchase of property and equipment
Investments in and advances to equity method investees
Purchase of other investments--(321,094)(56,250)(273)(33,294)

(100)

-

-

-

-

(5,000,000)(719)(87,518)(2,794)(36,155)

24

2,953

(20,141)(2,143)(2,794)(340,167)(737,899)(5,518,869)

Deposit to restricted cash
Payment of guarantee deposits-net
Other
Net cash used in investing activities
Financing Activities:
Proceeds from long-term borrowings--

1,400,000-

Principal payments under capital leases(4,938)(601,144)(494,991)(566,505)

Net increase (decrease) in short-term borrowings

2,318

282,164(1,249,555)

730,603

Proceeds from issuance of common stock of a subsidiary--

375,000(2,620)(318,980)

30,454

164,098280

34,183(171,738)(132,529)

Net Decrease in Cash

(10,202)(1,241,940)(1,162,777)(5,031,226)

Cash, Beginning of Period

49,406

6,014,693

12,574,744

11,045,919

Cash, End of Period

39,2044,772,753

11,411,967

6,014,693

Net cash provided by (used in) financing activities
Effect of Exchange Rate Changes on Cash-

Note (1): The translations of Japanese yen amounts into US dollar amounts with respect to the three months ended Sept 30, 2002 are included
solely for the convenience of readers outside Japan and have been made at the rate of JPY121.74 =$1, the approximate rate ofexchange on Sept 30, 2002.