<PAGE>

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                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549

                               ----------------

                                   FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
    EXCHANGE ACT OF 1934

  For the quarterly period ended September 30, 2001

                                      OR

[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
    EXCHANGE ACT OF 1934

  For the transition period from         to

                       Commission file number 333-88799

                               ----------------

                         INFONET SERVICES CORPORATION
            (Exact name of registrant as specified in its charter)

<TABLE>
 <S>                              <C>
            Delaware                                95-4148675
 (State or other jurisdiction of                 (I.R.S. Employer
 incorporation or organization)                 Identification No.)
</TABLE>

                2160 East Grand Avenue, El Segundo, California
                   (Address of principal executive offices)

                                  90245-1022
                                  (Zip Code)

                                (310) 335-2600
             (Registrant's telephone number, including area code)

                               ----------------

  (Former name, former address and former fiscal year, if changed since last
                                    report)

    Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes [X] No [_]

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

    Indicate by check mark whether the registrant has filed all documents and
reports required to be filed under Sections 12, 13 or 15(d) of the Securities
Exchange of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. Yes [_] No [_]

APPLICABLE ONLY TO CORPORATE ISSUERS:

    Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.

    As of November 6, 2001, the registrant had the following number of shares
outstanding:

            Class A common stock: 161,403,358
            Class B common stock: 309,703,141

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<PAGE>

                                     PART I

ITEM 1. FINANCIAL STATEMENTS

                 INFONET SERVICES CORPORATION AND SUBSIDIARIES

                          CONSOLIDATED BALANCE SHEETS
                    (In Thousands, Except per Share Amounts)

<TABLE>
<CAPTION>
                                                      March 31,   September 30,
                                                         2001         2001
                                                      ----------  -------------
                                                                   (Unaudited)

<S>                                                   <C>         <C>
                       ASSETS
                       ------

Current Assets:
  Cash and cash equivalents.......................... $  137,599   $  190,580
  Short-term investments.............................    464,035      345,759
  Accounts receivable, net...........................    177,420      139,353
  Deferred income taxes..............................      6,792        7,045
  Prepaid expenses...................................     14,335       17,844
  Other current assets...............................     10,048       14,962
                                                      ----------   ----------
     Total current assets............................    810,229      715,543
                                                      ----------   ----------
Property, Equipment and Communication Lines, Net.....    464,172      484,684
Intangible and Other Assets, Net.....................     71,530       61,351
                                                      ----------   ----------
     Total Assets.................................... $1,345,931   $1,261,578
                                                      ==========   ==========

        LIABILITIES AND STOCKHOLDERS' EQUITY
        ------------------------------------

Current Liabilities:
  Current portion of long-term obligations........... $    5,076   $    7,451
  Current portion of capital lease obligations.......      3,169        2,986
  Accounts payable...................................     76,851       62,175
  Network communications.............................     92,301       30,114
  Accrued salaries and related benefits..............     15,859       15,694
  Income taxes payable...............................     13,727          --
  Advance billings...................................     26,799       26,208
  Deferred installation revenues.....................      9,861       10,011
  Other accrued expenses.............................     18,823       21,628
                                                      ----------   ----------
     Total current liabilities.......................    262,466      176,267
                                                      ----------   ----------
Deferred Income and Compensation.....................     37,215       34,605
Capital Lease Obligations, Less Current Portion......      8,954        7,586
Long-Term Obligations, Less Current Portion..........    108,880      104,529
Minority Interest....................................        663        1,215
Commitments and Contingencies
Stockholders' Equity:
  Class A common stock, $0.01 par value per share:
    400,000 shares authorized; 364,160 shares
    issued, 161,403 shares outstanding and 202,757
    shares held in treasury as of March 31, 2001 and
    September 30, 2001...............................     66,078       66,078
  Class B common stock $0.01 par value per share:
    600,000 shares authorized; 309,309 and 309,670
    shares issued and outstanding as of March 31,
    2001 and September 30, 2001, respectively........    985,889      996,441
  Treasury stock, at cost, 202,757 shares............   (121,184)    (121,184)
  Notes receivable from issuance of common stock.....     (8,465)      (8,614)
  Retained earnings..................................      7,492        6,520
  Accumulated other comprehensive loss...............     (2,057)      (1,865)
                                                      ----------   ----------
     Total stockholders' equity......................    927,753      937,376
                                                      ----------   ----------
     Total Liabilities and Stockholders' Equity...... $1,345,931   $1,261,578
                                                      ==========   ==========
</TABLE>

          See accompanying notes to consolidated financial statements.


                                       2
<PAGE>

                 INFONET SERVICES CORPORATION AND SUBSIDIARIES

     CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
                    (In Thousands, Except per Share Amounts)
                                  (Unaudited)

<TABLE>
<CAPTION>
                                           Three Months
                                          Ended September    Six Months Ended
                                                30,            September 30,
                                         ------------------  ------------------
                                           2000      2001      2000      2001
                                         --------  --------  --------  --------
<S>                                      <C>       <C>       <C>       <C>
Revenues, Net..........................  $156,062  $160,230  $310,227  $332,084
                                         --------  --------  --------  --------
Expenses:
  Country representative compensation..    52,942    56,092   106,648   117,531
  Bandwidth and related costs..........    29,874    32,849    61,359    62,309
  Network operations...................    20,133    26,028    36,389    51,651
  Selling, general and administrative..    46,592    56,118    94,074   111,333
                                         --------  --------  --------  --------
     Total expenses....................   149,541   171,087   298,470   342,824
                                         --------  --------  --------  --------
Operating Income (Loss)................     6,521   (10,857)   11,757   (10,740)

Other Income (Expense):
  Interest income......................    10,332     6,692    23,062    15,096
  Interest expense.....................    (2,512)   (2,855)   (5,001)   (5,845)
  Other, net...........................    (3,283)      718    (1,926)      430
                                         --------  --------  --------  --------
     Total other income, net...........     4,537     4,555    16,135     9,681
                                         --------  --------  --------  --------
Income (Loss) Before Provision (Credit)
 For Income Taxes, Minority Interest
 and Extraordinary Item................    11,058    (6,302)   27,892    (1,059)
Provision (Credit) For Income Taxes....     6,320    (2,946)   14,881      (556)
                                         --------  --------  --------  --------
Income (Loss) Before Minority Interest
 and Extraordinary Item................     4,738    (3,356)   13,011      (503)
  Minority Interest....................        46       146       116       469
                                         --------  --------  --------  --------
Income (Loss) Before Extraordinary
 Item..................................     4,692    (3,502)   12,895      (972)
  Extraordinary Item, Net of Income
   Taxes of $363.......................       --        --        502       --
                                         --------  --------  --------  --------
  Net Income (Loss)....................     4,692    (3,502)   12,393      (972)
  Other Comprehensive Income (Loss):
   Foreign currency translation
    adjustments, net of tax............    (1,093)    1,563    (2,435)      752
   Unrealized gains (losses) on
    securities, net of tax.............     1,035     1,676       955     1,036
   Cumulative effect of accounting
    change, net of tax.................       --        --        --       (544)
   Unrealized loss on derivative
    instruments, net of tax............       --     (1,208)      --     (1,052)
                                         --------  --------  --------  --------
     Total other comprehensive income
      (loss), net......................       (58)    2,031    (1,480)      192
                                         --------  --------  --------  --------
  Comprehensive Income (Loss)..........  $  4,634  $ (1,471) $ 10,913  $   (780)
                                         ========  ========  ========  ========
  Basic and Diluted Earnings (Loss) Per
   Common Share........................  $   0.01  $  (0.01) $   0.03  $   0.00
                                         ========  ========  ========  ========
  Basic Weighted Average Number of
   Common Shares Outstanding...........   470,266   471,056   470,248   470,909
  Diluted Weighted Average Number of
   Common Shares Outstanding...........   470,819   471,056   470,852   470,909
</TABLE>


          See accompanying notes to consolidated financial statements.

                                       3
<PAGE>

                 INFONET SERVICES CORPORATION AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In Thousands)
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                          Six Months Ended
                                                            September 30,
                                                         --------------------
                                                           2000       2001
                                                         ---------  ---------
<S>                                                      <C>        <C>
Cash Flows From Operating Activities:
Net income (loss)....................................... $  12,393  $    (972)
Adjustments to reconcile net income (loss) to net cash
  provided by operating activities:
  Depreciation and amortization.........................    19,752     36,217
  Amortization of debt acquisition costs................     1,275        365
  Loss on sale of subsidiary............................       480        --
  Loss on non-marketable investment.....................       --       2,000
  Extraordinary loss due to early retirement of debt,
    net of tax of $363..................................       502        --
  Stock based compensation charge.......................     2,810      9,554
  Loss (Gain) on sale of property, equipment and
    communication lines.................................        40        (14)
  Discount amortization on marketable securities........      (773)      (351)
  Realized gain on marketable securities................      (134)    (1,510)
  Deferred income taxes.................................       267      4,505
  Minority interest.....................................        90        487
Changes in operating assets and liabilities, net of
  business sold:
  Accounts receivable, net..............................   (19,351)    38,700
  Prepaid expenses......................................    (2,196)    (3,389)
  Other current assets..................................       (22)    (4,900)
  Accounts payable......................................   (10,524)   (14,325)
  Network communications................................    10,572      3,228
  Accrued salaries and related benefits.................     1,379       (298)
  Income taxes payable..................................     4,925    (13,824)
  Advance billings......................................        20       (591)
  Deferred installation revenues........................       --         150
  Other accrued expenses................................     4,823        141
  Deferred income and compensation......................     2,287     (3,663)
  Purchases of trading securities.......................   (11,572)    (7,898)
  Proceeds from sales of trading securities.............     9,754     14,652
  Other operating activities............................       434        176
                                                         ---------  ---------
       Net cash provided by operating activities........    27,231     58,440
                                                         ---------  ---------
Cash Flows From Investing Activities:
  Purchases of property, equipment and communication
    lines...............................................   (91,641)  (121,896)
  Proceeds from sale of property, equipment and
    communication lines.................................        90        102
  Net acquisition cost of minority interest in
    subsidiary..........................................   (12,000)       --
  Net proceeds from sale of business....................       716        --
  Purchases of securities available-for-sale............  (497,789)  (108,429)
  Proceeds from sales of securities available-for-
    sale................................................   150,483    146,518
  Maturities of securities available-for-sale...........     9,995     83,608
  Acquisition of business, net of cash acquired.........       --         204
  Other investing activities............................    (3,675)    (3,345)
                                                         ---------  ---------
       Net cash used in investing activities............  (443,821)    (3,238)
                                                         ---------  ---------
</TABLE>

                                             (Table continued on following page)

                                       4
<PAGE>

                 INFONET SERVICES CORPORATION AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                (In Thousands)
                                  (Unaudited)

<TABLE>
<CAPTION>
                                                              Six Months Ended
                                                               September 30,
                                                             -------------------
                                                               2000       2001
                                                             ---------  --------
<S>                                                          <C>        <C>
Cash Flows From Financing Activities:
  Proceeds from issuance of long-term obligations...........   117,000       --
  Repayments of long-term obligations.......................   (77,334)   (1,976)
  Repayments of capital lease obligations...................    (1,500)   (1,551)
  Repayments of long-term bandwidth obligations.............   (27,000)      --
  Net proceeds from issuance of common stock................        75       998
  Repayments of notes receivable from issuance of common
    stock...................................................        70        55
                                                             ---------  --------
       Net cash provided by (used in) financing activities..    11,311    (2,474)
                                                             ---------  --------
Effect of Exchange Rate Changes on Cash and Cash
  Equivalents...............................................    (1,198)      253
                                                             ---------  --------
Net Increase (Decrease) in Cash and Cash Equivalents........  (406,477)   52,981
Cash and Cash Equivalents, Beginning of Period..............   727,681   137,599
                                                             ---------  --------
Cash and Cash Equivalents, End of Period.................... $ 321,204  $190,580
                                                             =========  ========
Supplemental Disclosures of Cash Flow Information:
  Cash paid during the period of:
     Income taxes........................................... $   9,596  $ 13,154
     Interest............................................... $   4,705  $  6,017
Supplemental Noncash Investing and Financing Activities:
  Acquisitions of communication lines accrued but not yet
    paid.................................................... $ 110,226  $    601
  Acquisitions of equipment accrued but not yet paid........       --   $  1,139
</TABLE>

    During April 2000, the Company amended its 1998 Stock Appreciation Rights
Plan ("SARs") resulting in a new measurement date. The Company consequently
reduced the SARs liability and credited stock-related compensation by
approximately $5.3 million to reflect the stock price at the new measurement
date. The amended SARs Plan provides that the SAR may be settled with stock or
cash at the sole discretion of the Company. In accordance with Financial
Accounting Standards Board Interpretation No. 28 "Accounting for Stock
Appreciation Rights and Other Variable Stock Options or Award Plans" and
Financial Accounting Standards Board Interpretation No. 44 "Accounting for
Certain Transactions Involving Stock Compensation," the Company is accounting
for the tandem awards as equity instruments and the plan, as amended, as a
fixed plan under the provisions of APB Opinion No. 25 "Accounting for Stock
Issued to Employees." Consequently, the Company reclassified the approximately
$7.7 million of remaining SARs liability to class B common stock.


         See accompanying notes to consolidated financial statements.


                                       5
<PAGE>

                 INFONET SERVICES CORPORATION AND SUBSIDIARIES

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (Unaudited)

Note 1. Basis of Presentation

    In the opinion of management, the accompanying unaudited financial
statements of Infonet Services Corporation and subsidiaries (the "Company")
have been prepared in accordance with generally accepted accounting principles
for interim financial information and with the instructions to Form 10-Q and
Regulation S-X promulgated under the Securities Exchange Act of 1934.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
All normal, recurring adjustments considered necessary for a fair presentation
have been included. Preparing financial statements requires management to make
estimates and assumptions that affect the reported amounts of assets,
liabilities, revenue and expenses. Actual results may differ from these
estimates. The financial statements should be read in conjunction with the
financial statements and notes thereto included in the Company's Annual Report
on Form 10-K filed with the Securities and Exchange Commission on June 28,
2001. Certain items have been reclassified to conform to current period
presentation. The results of operations for the three and six months ended
September 30, 2001 are not necessarily indicative of the results that may be
expected for the fiscal year ending March 31, 2002.

    The Company's fiscal year is the 52- or 53-week period ending on the
Friday nearest to March 31. For simplicity of presentation, the Company has
described the 52-week period ended March 30, 2001 as the year ended March 31,
2001, and the 13- and the 26-week periods ended September 29, 2000 and
September 28, 2001 as the three and six months ended September 30, 2000 and
September 30, 2001, respectively.

Note 2. Accounting Change-Derivative Financial Instruments

    Effective April 1, 2001, the Company adopted Statement of Financial
Accounting Standards ("SFAS") No. 133, "Accounting for Derivative Instruments
and Hedging activities", as amended. SFAS No. 133, as amended, establishes
accounting and reporting standards for derivative instruments, including
certain derivative instruments embedded in other contracts, and for hedging
activities. Under SFAS No. 133, certain contracts that were not formerly
considered derivatives may now meet the definition of a derivative. SFAS No.
133 requires that all derivatives be recorded on the balance sheet at their
fair value. Changes in the fair value of derivatives are recorded each period
in current earnings or other comprehensive income ("OCI"), depending on
whether a derivative is designated as part of a hedge transaction and, if it
is, the type of hedge transaction.

    Under the terms of the Senior Secured Credit Facility, the Company is
required to enter into hedge agreements to provide that at least 50% of the
outstanding term loans are subject to fixed interest rates. The Company has
entered into interest swap agreements to fix the interest rates and mitigate
interest rate risk. The Company designated the swaps as cash flow hedges.

    In connection with the mortgage agreement related to the purchase of the
Company's headquarters facility, the Company entered into an interest rate
swap to fix the interest rate over the remaining life of the mortgage
agreement and mitigate interest rate risk. The Company designated the swap as
a cash flow hedge.

    Under SFAS No. 133, the effective portion of changes in the fair value of
cash flow hedges is recorded in OCI and is subsequently reclassified to
earnings as each hedged interest payment affects earnings. The adoption of
SFAS No. 133 on April 1, 2001 resulted in a cumulative pre-tax charge to OCI
of approximately $894,000 (approximately $544,000, net of tax) attributable to
losses on cash flow hedges. For the six months ended September 30, 2001, the
change in fair value of derivative instruments resulted in a pre-tax charge to
OCI of approximately $1,732,000 (approximately $1,052,000, net of tax). No
amounts were reclassified to earnings resulting from the ineffectiveness or
discontinuance of cash flow hedges. As of September 30, 2001, the amount to be
reclassified from OCI into earnings during the next twelve months is expected
to be immaterial. The actual amounts that will be reclassified into earnings
will vary as a result of changes in market conditions.

                                       6
<PAGE>

                 INFONET SERVICES CORPORATION AND SUBSIDIRIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


Note 3. New Accounting Pronouncements

    In July 2001, the Financial Accounting Standards Board ("FASB") issued
SFAS No. 141, "Business Combinations", which requires that all business
combinations initiated after June 30, 2001 be accounted for under the purchase
method and prohibits the use of the pooling-of-interest method. The Company
does not believe that the adoption of SFAS No. 141 will have any effect on its
financial position and result of operations.

    In July 2001, the FASB issued SFAS No. 142, "Goodwill and Other Intangible
Assets", which becomes effective for the Company beginning fiscal year 2003.
This statement changes the method of accounting for goodwill to a test for
impairment and requires among other things, the discontinuance of goodwill
amortization. The Company is currently assessing the impact of the adoption of
this statement on its financial position and result of operations.

    SFAS 143 "Accounting for Asset Retirement Obligations" which becomes
effective for the Company on April 1, 2003 addresses the obligations and asset
retirement costs associated with the retirement of tangible long-lived assets.
It requires that the fair value of the liability for an asset retirement
obligation be recorded when incurred instead of over the life of the asset.
The asset retirement costs must be capitalized as part of the carrying value
of the long-lived asset. If the liability is settled for an amount other than
the recorded balance, either a gain or loss will be recognized at settlement.
The Company is currently assessing the impact of the adoption of this
statement on its financial position and results of operations.

    SFAS No. 144 "Impairment or Disposal of Long-Lived Assets" will become
effective for the Company on April 1, 2002. SFAS No. 144 addresses financial
accounting and reporting for the impairment or disposal of long-lived assets
and provides guidance on implementation issues related to SFAS No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets
to be Disposed Of", and addresses the accounting for a segment of a business
accounted for as a discontinued operation. The Company is currently assessing
the impact of the adoption of this statement on its financial position and
results of operations.

                                       7
<PAGE>

                 INFONET SERVICES CORPORATION AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


Note 4. Consolidated Balance Sheet Components

    Certain balance sheet components are as follows (in thousands):

<TABLE>
<CAPTION>
                                                           March   September 30,
                                                          31, 2001     2001
                                                          -------- -------------
<S>                                                       <C>      <C>
Property, equipment and communication lines:
  Communications, computer and related equipment......... $225,987   $256,249
  Communication lines....................................  326,733    350,833
  Land, buildings and leasehold improvements.............   50,804     50,893
  Furniture and other equipment..........................   16,714     17,461
                                                          --------   --------
                                                           620,238    675,436
  Less accumulated depreciation and amortization.........  156,066    190,752
                                                          --------   --------
     Total............................................... $464,172   $484,684
                                                          ========   ========
Intangible and other assets, net:
  SERP minimum pension liability......................... $  1,911   $  2,203
  SERP assets............................................       11         11
  IDIP assets............................................   19,595     13,602
  Deferred income taxes..................................   16,520     12,099
  Unamortized debt issuance costs........................    2,850      2,485
  Deferred installation costs............................   13,089     13,238
  Unconsolidated investments in affiliates...............    3,988      2,968
  Intangible assets, net.................................    7,384      6,669
  Employee loans receivable and interest.................    2,421      1,940
  Other..................................................    3,761      6,136
                                                          --------   --------
     Total............................................... $ 71,530   $ 61,351
                                                          ========   ========
</TABLE>

    During the three months ended September 30, 2001, the Company reduced the
carrying value of a non-marketable investment to approximately $500,000 which
represents the amount of cash the Company anticipates to receive from the
liquidation of the investment. As a result, the Company recognized an
impairment loss of approximately $2 million which is included in other expense
in the accompanying consolidated statements of operations.

                                       8
<PAGE>

                 INFONET SERVICES CORPORATION AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


Note 5. Earnings Per Share

    Basic earnings per common share is computed by dividing net income by the
weighted average of number of shares outstanding during the periods presented.
Diluted earnings per common share is computed based on the weighted average
shares plus the dilutive effect of potential common stock.

    At September 30, 2000 the only type of potential common stock was stock
options. At September 30, 2001 the types of potential common stock were stock
options and purchase rights. The inclusion of potential common stock had no
effect on the reported diluted earnings per share for the periods ended
September 30, 2000, and an antidilutive effect on the reported loss per share
for the periods ended September 30, 2001. Consequently, reported basic and
diluted earnings (loss) per share are the same amount for the three and six
month periods ended September 30, 2000 and September 30, 2001. Options to
purchase approximately 24.2 million shares of common stock were outstanding at
September 30, 2001, but were not included in the computation of diluted
earnings per share because to do so would have been antidilutive.

Note 6. Income Taxes

    The provision for income taxes for the three and six months ended
September 30, 2000 and September 30, 2001 is higher than the 35% U.S.
statutory tax rate primarily because of state taxes and an inability to deduct
certain incentive stock option charges.

    During the year ended March 31, 2001, the Company filed a request for
determination from the Internal Revenue Service ("IRS") regarding the
propriety of the establishment of an intangible asset, for tax purposes only,
arising in connection with the September 1999 transaction in which the Company
obtained access to the customers of AUCS Communication Services N.V. A
favorable determination from the IRS could result in establishment of a
deferred tax asset that could be material. As the IRS has not concluded their
determination process, no deferred tax asset (nor its consequent increase to
stockholders' equity) has been recorded in the Company's financial statements.

Note 7. Segment Information

    The Company conducts business in two operating segments: country
representatives or Direct Sales Channels ("Direct") and Alternate Sales
Channels ("Alternate"). Both these segments generate revenues by providing our
customers with a complete global networking solution.

    The Company has organized its operating segments around differences in
distribution channels used to deliver its services to customers. These
segments are managed and evaluated separately because each segment possesses
different economic characteristics requiring different marketing strategies.

    The accounting policies adopted for each segment are the same as those
described in the summary of significant accounting policies in the Company's
Annual Report on Form 10-K for the fiscal year ended March 31, 2001. The
Company's management evaluates performance based on operating contributions,
where segment revenues are reduced by those costs that are allocable to the
segments. Costs relating to operating the Company's core network, and non-
allocable general, administrative, marketing and overhead costs, including
income tax expense, are not charged to the segments. Accordingly, neither
assets related to the core network, nor their associated depreciation expense
are allocated to the segments.

    The Company accounts for intersegment transactions on the same terms and
conditions as if the transactions were with third parties.

                                       9
<PAGE>

                 INFONET SERVICES CORPORATION AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


    Summarized financial information concerning the Company's reportable
segments is shown in the following table (in thousands).
<TABLE>
<CAPTION>
                                               Three Months
                                              Ended September  Six Months Ended
                                                    30,          September 30,
                                             ----------------- -----------------
                                               2000     2001     2000     2001
                                             -------- -------- -------- --------
<S>                                          <C>      <C>      <C>      <C>
Reportable segments:
Revenues:
  Direct.................................... $ 96,916 $ 95,441 $196,984 $194,687
  Alternate.................................   59,146   64,789  113,243  137,397
                                             -------- -------- -------- --------
     Total.................................. $156,062 $160,230 $310,227 $332,084
                                             ======== ======== ======== ========

Operating contribution:
  Direct.................................... $ 39,406 $ 38,354 $ 77,637 $ 80,272
  Alternate.................................   24,742   18,698   44,076   42,191
                                             -------- -------- -------- --------
     Total.................................. $ 64,148 $ 57,052 $121,713 $122,463
                                             ======== ======== ======== ========
</TABLE>

<TABLE>
<CAPTION>
                                                                As of September
                                                                      30,
                                                               -----------------
                                                                 2000     2001
                                                               -------- --------
<S>                                                            <C>      <C>
Total assets:
  Direct...................................................... $ 96,236 $ 89,452
  Alternate...................................................   67,748   63,681
                                                               -------- --------
     Totals................................................... $163,984 $153,133
                                                               ======== ========
</TABLE>

<TABLE>
<CAPTION>
                                          Three Months
                                         Ended September     Six Months Ended
                                               30,            September 30,
                                        ------------------  -------------------
                                          2000      2001      2000      2001
                                        --------  --------  --------  ---------
<S>                                     <C>       <C>       <C>       <C>
Reconciliations:
Operating contribution from reportable
  segments............................  $ 64,148  $ 57,052  $121,713  $ 122,463
Core network, overhead and other non-
  allocable costs.....................   (53,090)  (63,354)  (93,821)  (123,522)
                                        --------  --------  --------  ---------
Income (loss) before provision
  (credit) for Income taxes, minority
  interest, and extraordinary item....  $ 11,058  $ (6,302) $ 27,892  $  (1,059)
                                        ========  ========  ========  =========
</TABLE>

<TABLE>
<CAPTION>
                                                           As of September 30,
                                                          ---------------------
                                                             2000       2001
                                                          ---------- ----------
<S>                                                       <C>        <C>
Total assets of reportable segments...................... $  163,984 $  153,133
Core network, corporate and other non-allocable assets...  1,164,870  1,108,445
                                                          ---------- ----------
     Total assets........................................ $1,328,854 $1,261,578
                                                          ========== ==========
</TABLE>

Note 8. Stock Incentive Plans

    During April 2001, the Company modified stock options held by certain
executives to provide for acceleration of vesting upon death or disability.
Additionally, the modifications allow for the stock options to continue to be
exercisable for their original term upon death or disability or upon certain
separation events, as defined. The occurrence of any of these events will
cause the Company to recognize additional compensation expense.

                                      10
<PAGE>

                 INFONET SERVICES CORPORATION AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)


    During the three months ended September 30, 2001, in connection with a
settlement agreement with a terminated employee, the Company accelerated
vesting of 71,760 options previously granted to the employee. As the affected
options were out-of-the-money on the date of acceleration, no additional
compensation cost was recognized. However, previously unrecognized
compensation expense related to the unvested portion of the options of
approximately $1.1 million was recognized during the period.

Note 9. Contingencies

    During fiscal 2001, the Company acquired bandwidth for approximately $11.0
million from network service providers who, subsequent to March 31, 2001 filed
voluntary petitions for Chapter 11 protection with the United States
Bankruptcy Court and analogous petitions in other jurisdictions. Information
available to the Company currently indicates that it is more likely than not
that the network services will continue to be provided under the original
terms of the agreements. The Company is of the opinion that the carrying value
of the related assets is not impaired. The Company will continue to monitor
the situation and will record an impairment charge if events or changes in
circumstances indicate that the carrying value of the assets is no longer
recoverable.

                                      11
<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
        RESULTS OF OPERATIONS

    In the following Management's Discussion and Analysis, the revenues and
expenses described as resulting from outsourcing services refer to an
outsourcing agreement with three of our stockholders, AUCS, and its
distributors described in our Annual Report on Form 10-K for the fiscal year
ended March 31, 2001.

    You should read this discussion together with our consolidated financial
statements and the related notes to those statements appearing elsewhere in
this report.

    Certain reclassifications have been made to the prior year to conform to
the current year presentation.

 Results of Operations

    The following tables summarize revenues by service, by distribution
channel, and by region and are provided in support of the accompanying
management's discussion and analysis for the three and six months ended
September 30, 2000 and 2001 (dollars in thousands).

Revenues by Service

<TABLE>
<CAPTION>
                             Three Months Ended           Six Months Ended
                                September 30,               September 30,
                          --------------------------  --------------------------
                              2000          2001          2000          2001
                          ------------  ------------  ------------  ------------
<S>                       <C>      <C>  <C>      <C>  <C>      <C>  <C>      <C>
Network Services........  $ 67,300  43% $ 76,139  48% $132,830  43% $153,798  47%
Consulting, Integration
  and Provisioning
  Services..............    44,170  28%   49,398  31%   84,865  27%   97,053  29%
Applications Services...     2,613   2%    1,901   1%    6,152   2%    3,854   1%
Other Communications
  Services..............    41,979  27%   32,792  20%   86,380  28%   77,379  23%
                          --------      --------      --------      --------
  Total revenues........  $156,062 100% $160,230 100% $310,227 100% $332,084 100%
                          ========      ========      ========      ========
</TABLE>

Revenues by Distribution Channel

<TABLE>
<CAPTION>
                                           Three Months
                                          Ended September   Six Months Ended
                                                30,           September 30,
                                          ----------------  ------------------
                                           2000     2001      2000      2001
                                          -------  -------  --------  --------
<S>                                       <C>      <C>      <C>       <C>
Country representatives:
  Number of representatives.............       55       57        55        57
  Number of clients.....................    1,478    1,515     1,478     1,515
  Country representatives revenues......  $96,916  $95,441  $196,984  $194,687
  Percent of total revenues.............       62%      60%       63%       59%

Alternate sales channels:
  Number of sales channel partners......       20       26        20        26
  Number of sales channel partners'
    clients.............................      998      914       998       914
  Alternate sales channel revenues......  $59,146  $64,789  $113,243  $137,397
  Percent of total revenues.............       38%      40%       37%       41%
</TABLE>

Revenues by Region:

<TABLE>
<CAPTION>
                             Three Months Ended           Six Months Ended
                                September 30,               September 30,
                          --------------------------  --------------------------
                              2000          2001          2000          2001
                          ------------  ------------  ------------  ------------
<S>                       <C>      <C>  <C>      <C>  <C>      <C>  <C>      <C>
Americas................  $ 34,383  22% $ 33,521  21% $ 70,882  23% $ 73,267  22%
Europe, Middle East and
  Africa (EMEA).........   109,673  70%  107,776  67%  214,956  69%  223,682  67%
Asia Pacific............    12,006   8%   18,933  12%   24,389   8%   35,135  11%
                          --------      --------      --------      --------
  Total revenues........  $156,062 100% $160,230 100% $310,227 100% $332,084 100%
                          ========      ========      ========      ========
</TABLE>

                                      12
<PAGE>

 Three Months Ended September 30, 2001 Compared to Three Months Ended
 September 30, 2000

    Revenues by Service--Revenues increased $4.2 million, or 3%, from $156.1
million in the three months ended September 30, 2000 to $160.2 million in the
three months ended September 30, 2001. Excluding revenues resulting from the
outsourcing agreement, revenues increased $10.2 million, or 9%, over the prior
period from $110.1 million to $120.4 million. Outsourcing revenues decreased
$6.0 million, or 13%, from $45.9 million in the three months ended September
30, 2000 to $39.9 million in the three months ended September 30, 2001. The
overall change in revenues was due to increases of $8.8 million, or 13%, in
Network Services, $5.2 million, or 12%, in Consulting, Integration and
Provisioning Services, and decreases of $9.2 million, or 22%, in Other
Communications Services. Most of the Network Services growth came from
increased sales of intranet and remote access services. Excluding revenues
from outsourcing services, Consulting, Integration and Provisioning Services,
comprised primarily of our Global Connect services, increased $5.9 million, or
18%, from $32.7 million to $38.5 million over the period. Excluding revenues
from outsourcing services, Other Communications Services declined $3.8
million, or 50%, from $7.6 million to $3.8 million. This decrease is largely
due to an expected decline in our mature messaging product line and our X.25
transport services, as our clients are migrating to more advanced messaging
applications and non-X.25 based transport services.

    Revenues by Distribution Channel--Country representatives revenues
decreased $1.5 million, from $96.9 million in the three months ended September
30, 2000 to $95.4 million in the three months ended September 30, 2001.
Excluding outsourcing services, revenues from country representatives remained
unchanged at $91.6 million. The number of our country representatives
increased from 55 as of September 30, 2000 to 57 as of September 30, 2001. The
number of our country representative clients increased 3%, from 1,478 clients
as of September 30, 2000 to 1,515 clients as of September 30, 2001. Alternate
sales channel revenues grew $5.6 million, or 10%, from $59.1 million to $64.8
million over the period. The change includes a decrease of approximately $4.6
million resulting from outsourcing services. The balance of the increase is
primarily attributed to growth through existing sales channel partners. In
total, our alternate sales channel partners' clients declined, from 998
clients as of September 30, 2000 to 914 clients as of September 30, 2001
primarily resulting from reductions of outsourcing services clients.

    Revenues by Region--The growth in revenues, billed on a regional basis,
was due to increases in the Asia Pacific region, which increased $6.9 million,
or 58%, from $12.0 million in the three months ended September 30, 2000 to
$18.9 million in the three months ended September 30, 2001, due to increased
sales efforts in a growing market. Revenues billed in the EMEA region
decreased by $1.9 million, or 2%, from $109.7 million in the three months
ended September 30, 2000 to $107.8 million in the three months ended September
30, 2001. The revenue decline of $1.9 million consists of approximately $6
million of revenue decline in Europe resulting from outsourcing services
partially offset by an increase in non-outsourcing services due to the
addition of new clients and increases in sales of services to existing
clients. Revenues billed in the Americas declined $862,000, or 3%, from
$34.4 million to $33.5 million over the period.

    Country Representative Compensation increased $3.2 million, or 6%, from
$52.9 million in the three months ended September 30, 2000 to $56.1 million in
the three months ended September 30, 2001. Approximately $280,000 of this
increase is related to outsourcing services revenues because outsourcing
services revenue in the prior period did not have associated country
representative compensation. The balance of this expense increase results from
a change in product mix.

    Bandwidth and Related Costs increased $3.0 million, or 10%, from $29.9
million in the three months ended September 30, 2000 to $32.8 million in the
three months ended September 30, 2001. Lease expense, the largest component of
bandwidth and related costs, decreased $1.5 million, or 6%, from $23.7 million
in the three months ended September 30, 2000 to $22.2 million in the three
months ended September 30, 2001. Amortization of purchased capacity increased
$4.8 million, from $3.2 million to $8.0 million over the period. Both the
decrease in lease expense and the increase in amortization were a result of
owning a larger portion of our bandwidth capacity in the backbone of our
network. See Note 9 in the Notes to Consolidated Financial Statements.

                                      13
<PAGE>

    Network Operations increased $5.9 million, or 29%, from $20.1 million in
the three months ended September 30, 2000 to $26.0 million in the three months
ended September 30, 2001. Depreciation expense related to network equipment
increased $2.9 million, or 59%, from $5.0 million in the three months ended
September 30, 2000 to $7.9 million in the three months ended September 30,
2001. Stock-related compensation charges remained unchanged at approximately
$700,000. The remainder of the increase was related to the increased costs
associated with our network management, operations and support activities,
personnel costs and other network operations expenses.

    Selling, General and Administrative increased $9.5 million, or 20%, from
$46.6 million in the three months ended September 30, 2000 to $56.1 million in
the three months ended September 30, 2001. Stock-related compensation charges
increased $1.2 million, from $3.5 million in the three months ended September
30, 2000 to $4.7 million in the three months ended September 30, 2001
primarily as a result of a $1.1 million non-cash charge related to the
acceleration of vesting of options of a terminated employee. Our sales support
expenses for multinational activities increased $4.1 million from $16.8
million in the three months ended September 30, 2000 to $20.9 million in the
three months ended September 30, 2001 which was directly related to client
acquisition efforts. Sales and marketing personnel-related expenses increased
$4.1 million from $16.3 million in the three months ended September 30, 2000
to $20.4 million in the three months ended September 30, 2001 due to increased
sales and marketing efforts to increase our revenues. Administrative expenses,
excluding stock-related compensation expense, increased by $1.3 million from
$5.3 million in the three months ended September 30, 2000 to $6.6 million in
the three months ended September 30, 2001.

    Operating Income (Loss) decreased by $17.4 million, from $6.5 million in
the three months ended September 30, 2000 to $(10.9) million in the three
months ended September 30, 2001 due to the factors described above.

    Other Income increased from $4.5 million in the three months ended
September 30, 2000 to $4.6 million in the three months ended September 30,
2001. This change reflects a decrease in interest income of $3.6 million, from
$10.3 million to $6.7 million, due to lower interest rates and lower cash
balances as funds were used for capital expenditures during fiscal year 2001.
Other, net for the three months ended September 30, 2001 included foreign
exchange gains of $2.5 million compared to $3.4 million of losses in the prior
period related primarily to settlement of euro denominated outsourcing sales
and related costs. Other, net for the three months ended September 30, 2001
also included an impairment loss of approximately $2 million related to the
reduction of the carrying value of a non-marketable investment.

    Provision (Credit) for Income Taxes decreased from a provision of $6.3
million in the three months ended September 30, 2000 to a credit of $(2.9)
million in the three months ended September 30, 2001 primarily because of
decreased income.

    Net Income (Loss) decreased from $4.7 million in the three months ended
September 30, 2000 to $(3.5) million in the three months ended September 30,
2001 due to the factors described above.

 Six Months Ended September 30, 2001 Compared to Six Months Ended September
 30, 2000

    Revenues by Service--Revenues increased $21.9 million, or 7%, from $310.2
million in the six months ended September 30, 2000 to $332.1 million in the
six months ended September 30, 2001. Excluding revenues resulting from the
outsourcing agreement, revenues increased $21.5 million, or 10%, over the
prior period from $223.2 million to $244.7 million. Outsourcing revenues
increased $309,000, from $87.1 million in the six months ended September 30,
2000 to $87.4 million in the six months ended September 30, 2001. The overall
increase in revenues was due to increases of $21.0 million, or 16%, in Network
Services and $12.2 million, or 14%, in Consulting, Integration and
Provisioning Services. Most of the Network Services growth came from increased
sales of intranet and remote access services. Excluding revenues from
outsourcing services, Consulting, Integration and Provisioning Services,
comprised primarily of our Global Connect services, increased $10.2 million,
or 16%, from $64.1 million to $74.2 million over the period. Excluding
revenues from outsourcing services, Other Communications Services declined
$7.3 million, or 36%, from $20.1 million to $12.8 million.

                                      14
<PAGE>

This decrease is largely due to an expected decline in our mature messaging
product line and our X.25 transport services, as our clients are migrating to
more advanced messaging applications and non-X.25 based transport services.

    Revenues by Distribution Channel--Country representatives revenues
decreased $2.3 million, from $197.0 million in the six months ended September
30, 2000 to $194.7 million in the six months ended September 30, 2001.
Excluding outsourcing services, revenues from country representatives
increased $877,000 from $185.5 million to $186.3 million over the period. The
number of our country representatives increased from 55 as of September 30,
2000 to 57 as of September 30, 2001. The number of our country representative
clients increased 3%, from 1,478 clients as of September 30, 2000 to 1,515
clients as of September 30, 2001. Alternate sales channel revenues grew
$24.2 million, or 21%, from $113.2 million to $137.4 million over the period.
Approximately $3 million of the increase resulted from outsourcing services.
The balance of the increase is primarily attributed to growth through existing
sales channel partners. In total, our alternate sales channel partners'
clients declined, from 998 clients as of September 30, 2000 to 914 clients as
of September 30, 2001 primarily resulting from reductions of outsourcing
services clients.

    Revenues by Region--The largest component of our growth in revenues,
billed on a regional basis, was due to increases in the Asia Pacific region,
which increased $10.7 million, or 44%, from $24.4 million in the six months
ended September 30, 2000 to $35.1 million in the six months ended September
30, 2001 due to increased sales efforts in a growing market. Revenues billed
in the EMEA region increased by $8.7 million, or 4%, from $215.0 million in
the six months ended September 30, 2000 to $223.7 million in the six months
ended September 30, 2001. Approximately $309,000 of this revenue growth was in
Europe resulting from outsourcing services. The balance of the increase is due
to the addition of new clients and increases in sales of services to existing
clients. Revenues billed in the Americas grew $2.4 million, or 3%, from $70.9
million to $73.3 million over the period.

    Country Representative Compensation increased $10.9 million, or 10%, from
$106.6 million in the six months ended September 30, 2000 to $117.5 million in
the six months ended September 30, 2001. Approximately $5.8 million of this
increase is related to outsourcing services revenues because outsourcing
services revenues in the prior period did not have associated country
representative compensation. The balance of this expense increase results from
a change in product mix.

    Bandwidth and Related Costs increased $950,000, or 2%, from $61.4 million
in the six months ended September 30, 2000 to $62.3 million in the six months
ended September 30, 2001. Lease expense, the largest component of bandwidth
and related costs, decreased $8.1 million, or 16%, from $50.0 million in the
six months ended September 30, 2000 to $41.9 million in the six months ended
September 30, 2001. Amortization of purchased capacity increased $9.9 million,
from $5.4 million to $15.3 million over the period. Both the decrease in lease
expense and the increase in amortization were a result of owning a larger
portion of our bandwidth capacity in the backbone of our network. See Note 9
in the Notes to the Consolidated Financial Statements.

    Network Operations increased $15.3 million, or 42%, from $36.4 million in
the six months ended September 30, 2000 to $51.7 million in the six months
ended September 30, 2001. Stock-related compensation charges increased $1.8
million, from a $400,000 credit in the six months ended September 30, 2000 to
a charge of $1.4 million in the six months ended September 30, 2001. A one-
time stock-related compensation credit of $1.6 million in the prior period
resulted from an amendment to one of the Company's stock-based compensation
plans. Depreciation expense related to network equipment increased $6.1
million, or 67%, from $9.1 million in the six months ended September 30, 2000
to $15.3 million in the six months ended September 30, 2001. The remainder of
the increase was related to the increased costs associated with our network
management, operations and support activities, personnel costs and other
network operations expenses.

    Selling, General and Administrative increased $17.3 million, or 18%, from
$94.1 million in the six months ended September 30, 2000 to $111.3 million in
the six months ended September 30, 2001. Stock-related compensation charges
increased $4.9 million, from $3.3 million in the six months ended September
30, 2000 to $8.2 million in the six months ended September 30, 2001. A one-
time stock-related compensation credit of $3.6 million in the prior period
resulted from an amendment to one of the Company's stock-based compensation

                                      15
<PAGE>

plans. Also impacting the increase was a non-cash $1.1 million charge during
the six months ended September 30, 2001 related to the acceleration of vesting
of options of a terminated employee. Our sales support expenses for
multinational activities increased $8.1 million from $33.6 million in the six
months ended September 30, 2000 to $41.7 million in the six months ended
September 30, 2001 which was directly related to client acquisition efforts.
Sales and Marketing personnel-related expenses increased $7.1 million from
$33.0 million in the six months ended September 30, 2000 to $40.1 million in
the six months ended September 30, 2001 due to increased sales and marketing
efforts to increase our revenues. Advertising expense decreased $1.1 million
from $3.7 million in the six months ended September 30, 2000 to $2.6 million
in the six months ended September 30, 2001. Administrative expenses, excluding
stock-related compensation expense, increased by $661,000 from $12.1 million
in the six months ended September 30, 2000 to $12.7 million in the six months
ended September 30, 2001.

    Operating Income (Loss) decreased by $22.5 million, from $11.8 million in
the six months ended September 30, 2000 to $(10.7) million in the six months
ended September 30, 2001 due to the factors described above.

    Other Income decreased $6.5 million, from $16.1 million in the six months
ended September 30, 2000 to $9.7 million in the six months ended September 30,
2001. This decrease reflects a decrease in interest income of $8.0 million,
from $23.1 million to $15.1 million, due to lower interest rates and lower
cash balances as funds were used for capital expenditures during fiscal year
2001. The increased interest expense of $844,000 from $5.0 million to $5.8
million over the period, resulted from additional borrowings under our senior
secured credit facility. Other, net for the six months ended September 30,
2001 included foreign exchange gains of $1.0 million compared to $1.6 million
of losses in the prior period related primarily to settlement of euro
denominated outsourcing sales and related costs. Other, net for the six months
ended September 30, 2001 also included an impairment loss of approximately $2
million related to the reduction of the carrying value of a non-marketable
investment.

    Provision (Credit) for Income Taxes decreased from $14.9 million in the
six months ended September 30, 2000 to $(556,000) in the six months ended
September 30, 2001 primarily because of decreased income.

    Extraordinary Item, Net of Income Taxes for the six months ended September
30, 2000 represents the write-off of unamortized debt issuance costs
associated with the $49.6 million of long-term debt which was repaid prior to
its due date according to the debt agreement.

    Net Income (Loss) decreased from $12.4 million in the six months ended
September 30, 2000 to $(972,000) in the six months ended September 30, 2001
due to the factors described above.

Liquidity and Capital Resources

    Net cash provided by operating activities during the six months ended
September 30, 2001 was $58.4  million compared to $27.2 million during the six
months ended September 30, 2000. This fluctuation was primarily a result of
changes in accounts receivable which provided cash of $38.7 million in the
current period compared to a use of cash of $19.4 million in the prior period.
Additionally, depreciation and amortization increased by $16.5 million due to
the expansion of our World Network and newly introduced ATM capability. These
changes were partially offset by a decrease in income taxes payable of $18.7
million and a decrease in net income of $13.4 million. Net cash used in
investing activities for the six months ended September 30, 2001 was
$3.2 million compared to $443.8 million during the six months ended September
30, 2000. This fluctuation was primarily due to purchases of securities
available-for-sale during the prior year offset by purchases of property,
equipment and communication lines of $30.3 million. Cash used in financing
activities for the six months ended September 30, 2001 was $2.5 million
compared to net cash provided by financing activities of $11.3 million for the
six months ended September 30, 2000. This fluctuation was the result of net
proceeds from issuance of long-term obligations during the three months ended
September 30, 2000.

    As of September 30, 2001, the company had cash and cash equivalents of
$190.6 million, short-term investments of $345.8 million, working capital of
$539.3 million and total assets of $1.3 billion. Indebtedness

                                      16
<PAGE>

under our senior secured credit facility totaled $88.9 million as of September
30, 2001 with additional borrowings available under this facility of $99.6
million. Building mortgage indebtedness as of September 30, 2001 totaled $23.1
million.

    Based on current plans and business conditions, we believe that our
existing cash and cash equivalents, short-term investments, and cash generated
from operations will be sufficient to satisfy anticipated cash requirements
for at least the next twelve months.

Foreign Exchange Risk

    We invoice substantially all sales of our services to our country
representatives and sales channel partners, except outsourcing services and
assignment agreements with AUCS, in U.S. dollars. However, many of our country
representatives derive their revenues and incur costs in currencies other than
U.S. dollars. To the extent that the local currency used by the country
representative fluctuates against the U.S. dollar, the obligations of the
country representative may increase or decrease significantly and lead to
foreign exchange losses or gains. We assume the exchange rate risk for our
consolidated country representatives, although our non-consolidated country
representatives assume the exchange rate risk under our country representative
structure.

    Our exposure to exchange rate fluctuations primarily arises from
outsourcing services and assignment agreements with AUCS, which are
denominated in euros as well as operating costs associated with such
agreements. Approximately 25% of the Company's revenues for the three months
ended September 30, 2001 were generated from the euro-denominated AUCS
agreements. The revenues and the related costs result in a net euro exposure
of the gross profit, which is equal to approximately 20% of revenues. The
euro-denominated gross profit offset by other euro-denominated operating costs
generally results in a natural hedge. However, timing of settlement of euro-
denominated accounts receivables and payables subjects the company to exchange
rate risk on settlement of the receivables and payables. Euro-denominated
cash, accounts receivable and accounts payable related to the AUCS agreements
were a net asset of $27.0 million as of September 30, 2001.

    We monitor our exposure to exchange rate fluctuations through our regular
operating activities and have not historically used derivatives to hedge
foreign exchange risk.

Euro Conversion

    On January 1, 1999, 11 of the 15 member countries of the European Union
introduced a new currency, the "euro". The conversion rates between the euro
and the participating nations' existing legacy currencies were fixed
irrevocably as of December 31, 1998. Prior to full implementation of the new
currency on January 1, 2002, there will be a transition period during which
parties may, at their discretion, use either the legacy currencies or the euro
for financial transactions.

    We are not aware of any material operational issues or costs associated
with preparing internal systems for the euro. While it is not possible to
accurately predict the impact the euro will have on the Company's business or
on the economy in general, management does not anticipate that the euro
conversion will have a material adverse impact on the Company's market risk
with respect to foreign exchange, its results of operations, or its financial
condition.

Pre-Filing Determination Request

    During the year ended March 31, 2001, the Company filed a request for
determination from the Internal Revenue Services ("IRS") regarding the
propriety of the establishment of an intangible asset, for tax purposes only,
arising in connection with the September 1999 transaction in which the Company
obtained access to the customers of AUCS Communication Services N.V. A
favorable determination from the IRS could result in establishment of a
deferred tax asset that could be material. As the IRS has not concluded their
determination process, no deferred tax asset (nor its consequent increase to
stockholders' equity) has been recorded in the Company's financial statements.

                                      17
<PAGE>

New Accounting Pronouncements

    Effective April 1, 2001, the Company adopted Statement of Financial
Accounting Standards ("SFAS") No. 133, "Accounting for Derivative Instruments
and Hedging Activities", as amended. SFAS No. 133, as amended, establishes
accounting and reporting standards for derivative instruments, including
certain derivative instruments embedded in other contracts, and for hedging
activities. The adoption of SFAS No. 133 on April 1, 2001 resulted in an
cumulative pre-tax reduction of other comprehensive income ("OCI") of
approximately $894,000 (approximately $544,000, net of tax) attributable to
losses on cash flow hedges. For the six months ended September 30, 2001, the
change in fair value of derivative instruments resulted in a pretax increase
to OCI of approximately $1,732,000, (approximately $1,052,000, net of tax). No
amounts were reclassified to earnings resulting from the ineffectiveness or
discontinuance of cash flow hedges. As of September 30, 2001, the amount to be
reclassified from OCI into earnings during the next twelve months is expected
to be immaterial. The actual amounts that will be reclassified into earnings
will vary as a result of changes in market conditions.

    In July 2001, the Financial Accounting Standards Board ("FASB") issued
SFAS No. 141, "Business Combinations", which requires that all business
combinations initiated after June 30, 2001 be accounted for under the purchase
method and prohibits the use of the pooling-of-interest method. The Company
does not believe that the adoption of SFAS No. 141 will have any effect on its
financial position and result of operations.

    In July 2001, the FASB issued SFAS No. 142, "Goodwill and Other Intangible
Assets", which becomes effective for the Company beginning fiscal year 2003.
This statement changes the method of accounting for goodwill to a test for
impairment and requires among other things, the discontinuance of goodwill
amortization. The Company is currently assessing the impact of the adoption of
this statement on its financial position and result of operations.

    SFAS 143 "Accounting for Asset Retirement Obligations" which becomes
effective for the Company on April 1, 2003 addresses the obligations and asset
retirement costs associated with the retirement of tangible long-lived assets.
It requires that the fair value of the liability for an asset retirement
obligations be recorded when incurred instead of over the life of the asset.
The asset retirement costs must be capitalized as part of the carrying value
of the long-lived asset. If the liability is settled for an amount other than
the recorded balance, either a gain or loss will be recognized at settlement.
The Company is currently assessing the impact of the adoption of this
statement on its financial position and results of operations.

    SFAS No. 144 "Impairment or Disposal of Long-Lived Assets" will become
effective for the Company on April 1, 2002. SFAS No. 144 addresses financial
accounting and reporting for the impairment or disposal of long-lived assets
and provides guidance on implementation issues related to SFAS No. "121,
Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets
to be Disposed Of", and addresses the accounting for a segment of a business
accounted for as a discontinued operation.The Company is currently assessing
the impact of the adoption of this statement on its financial position and
results of operations.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

    Reference is made to Part II, Item 7A, Quantitative and Qualitative
Disclosures about Market Risk, in our Annual Report on Form 10-K for the
fiscal year ended March 31, 2001.

    As of September 30, 2001, we were primarily exposed to the following
currencies: the euro, the British pound, and the French franc. Based upon a
hypothetical ten-percent strengthening of the U.S. dollar across all
currencies, the potential losses in future earnings due to foreign currency
exposures would have been approximately $1.0 million as of that date.

                                      18
<PAGE>

                                   PART II:

ITEM 1. Legal Proceedings

    Not applicable.

ITEM 2. Changes in Securities and Use of Proceeds

    On December 15, 1999, the Company's Form S-1 registration statement (File
No. 333-88799) was declared effective by the Securities and Exchange
Commission. The registration statement, as amended, covered the offering of
51,282,300 shares of our Class B common stock. The offering commenced on
December 16, 1999 and the sale to the public of 51,282,300 shares of common
stock at $21.00 per share was completed on December 21, 1999 for an aggregate
price of approximately $1.076 billion. The registration statement covered an
additional 7,692,342 shares of common stock that the underwriters had the
option to purchase solely to cover over-allotments. These additional shares
were purchased on January 13, 2000. The managing underwriters were Merrill
Lynch & Co., Warburg Dillon Read LLC, ABN AMRO Rothschild, Goldman, Sachs &
Co., Lehman Brothers and Salomon Smith Barney. Expenses incurred in connection
with the issuance and distribution of common stock in the offering included
underwriting discounts, commissions and allowances of approximately $38.5
million and other expenses of approximately $2.4 million. Total offering
expenses of approximately $40.9 million resulted in net offering proceeds to
the Company of approximately $766.8 million. Specified 10% owners of Class B
common stock of the Company sold in the offering and received, net of expenses
paid by those owners, an aggregate of $256.4 million. We have used and
continue to use aggregate net proceeds to us of approximately $766.8 million
from our initial public offering as follows:

  .  the repayment of long-term debt under our credit facility of
     approximately $60.0 million;

  .  the purchase of assets that were under operating leases of approximately
     $7.0 million;

  .  expansion of our network infrastructure, including acquisition of
     transmission capacity and continued deployment of our ATM-enabled
     backbone of approximately $407.0 million;

  .  to fund operating expenses; and

  .  for general corporate purposes of $6.0 million.

    Our management, subject to supervision by our board of directors, has
significant flexibility in applying the net proceeds of the offering. Pending
any use as described above, we have invested the net proceeds in interest-
bearing investment grade securities.

ITEM 3. Defaults Upon Senior Securities

    Not applicable.

ITEM 4. Submission of Matters to a Vote of Security Holders

    The Company held its Annual Meeting of Stockholders on August 20, 2001. At
the Annual Meeting, the Company's stockholders elected nine directors to the
Company's Board of Directors and approved certain proposals, as more fully
described below. At the Annual Meeting, a total of 1,903,743,446 votes were
represented in person or by proxy, representing 98.98% of the 1,923,434,749
eligible votes of common stock outstanding and entitled to vote. Each Class B
common share is entitled to one vote on all matters, while each Class A common
share is entitled to ten votes on all matters, except for the election of the
Class B common share directors, in which the Class A common shares do not
vote. As of the record date, 470,804,527 of our Common Shares representing
1,923,434,749 votes were outstanding, 161,403,358 of our Class A common shares
representing 1,614,033,580 votes and 309,401,169 of our Class B common shares
representing 309,401,169 votes. The proposals considered at the Annual Meeting
were voted on as follows:

1. Election of Directors. Proposal to elect nine directors to hold office
   until the 2002 Annual Meeting of Stockholders and until their successors
   are duly elected and qualified.

                                      19
<PAGE>

<TABLE>
<CAPTION>
                                                      Affirmative   Affirmative
Nominee                                              Votes Class A Votes Class B
-------                                              ------------- -------------
<S>                                                  <C>           <C>
Jose A. Collazo..................................... 1,614,033,580  288,884,162

Makoto Arai......................................... 1,614,033,580  289,451,724

Douglas C. Campbell................................. 1,614,033,580  289,452,206

Eric M. de Jong..................................... 1,614,033,580  289,456,082

Morgan Ekberg....................................... 1,614,033,580  289,450,956

Heinz Karrer........................................ 1,614,033,580  289,449,534

Rafael Sagrario..................................... 1,614,033,580  289,456,487

Timothy P. Hartman..................................           N/A  289,455,556

Matthew J. O'Rourke.................................           N/A  288,456,689
</TABLE>

2. Amendment to Infonet Services Corporation 2000 Omnibus Stock Plan. Proposal
   to amend the Infonet Services Corporation 2000 Omnibus Stock Plan to
   increase the number of Class B Common shares reserved for issuance under
   the plan from 6 million to 10 million. The proposal was approved by
   1,895,142,444 votes in favor, 8,496,219 votes against and 104,783 votes
   abstaining.

3. Ratification of the Independent Auditor. Proposal to ratify Deloitte &
   Touche LLP to serve as the Company's independent auditor for the fiscal
   year 2002. The proposal was approved by 1,903,625,962 votes in favor,
   88,948 votes against and 28,536 votes abstaining.

ITEM 5. Other Information

    Not applicable.

ITEM 6. Exhibits and Reports on Form 8-K

    A.See Exhibit Index.

    B.No reports on Form 8-K were filed by registrant during the quarter for
which this report is filed.

                                      20
<PAGE>

                                   SIGNATURES

    Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                          INFONET SERVICES CORPORATION

Date: November 13, 2001                           /s/ Akbar H. Firdosy
                                          By: _________________________________
                                                    Akbar H. Firdosy
                                                 Chief Financial Officer
                                               (Chief Accounting Officer)

                                       21
<PAGE>

                                 Exhibit Index

<TABLE>
<CAPTION>
 Exhibit
 Number                                Description
 -------                               -----------
 <C>     <S>
  3.1    Restated Certificate of Incorporation #

  3.2    Amended and Restated Bylaws #

  9.1    Form of Amended and Restated Stockholders Agreement (Effective as of
          December 16, 1999) #

 10.1    Infonet Services Corporation 1998 Stock Option Plan #

 10.1(a) Amended and Restated Infonet Services Corporation 1998 Stock Option
          Plan, filed with the Company's Form 10-Q for the period ended
          December 31, 2000

 10.1(b) Form of Incentive Stock Option Award Agreement, filed with the
          Company's Form 10-Q for the period ended December 31, 2000

 10.1(c) Form of Stock Option Award Agreement, filed with the Company's Form
          10-Q for the period ended December 31, 2000

 10.2    Form of Infonet Services Corporation 1998 Employee Stock Purchase Plan
          Loan, Security and Pledge Agreement

 10.2(a) Form of Infonet Services Corporation 1998 Employee Stock Purchase Plan
          Amendment to Loan, Security and Pledge Agreement

 10.3    Infonet Services Corporation 1999 Stock Option Plan #

 10.3(a) Form of Infonet Services Corporation Incentive Stock Option Award
          Agreement

 10.3(b) Form of Infonet Services Corporation Stock Option Award Agreement

 10.4    Infonet Services Corporation Deferred Income Plan (Amended and
          Restated Effective January 1, 2000)

 10.6    Infonet Services Corporation Supplemental Executive Retirement Plan
          (Amended and Restated Effective as of October 1, 2000)

 10.7    Senior Secured Credit Agreement, dated as of August 17, 1999#, as
          amended by Amendment No. 1, filed with the Company's Form 10-Q for
          the period ended June 30, 2000, and Amendment No. 2, filed with the
          Company's Form 10-Q for the period ended September 30, 2000

 10.8    Executive Employment Agreement of Jose A. Collazo, dated April 24,
          2001, filed with the Company's Form 10-Q for the period ended June
          30, 2001

 10.10   Standard Infonet Services Agreement #

 10.11   Capacity Right of Use Agreement with FLAG Limited, dated as of June
          25, 1999 #

 10.12   AUCS Services Agreement, dated as of September 30, 1999 #

 10.13   AUCS Call Option Deed, dated as of September 30, 1999 #

 10.14   AUCS Management Agreement, dated as of September 30, 1999 #, as
          amended by the Deed of Amendment filed with the Company's Annual
          Report on Form 10-K for the period ended March 31, 2001

 10.15   AUCS Assignment Agreement, dated as of September 30, 1999 #

 10.17   Executive Employment Agreement of Akbar H. Firdosy, dated April 24,
          2001, filed with the Company's Form 10-Q for the period ended June
          30, 2001

 10.18   Infonet Services Corporation 2000 Omnibus Stock Plan, filed with the
          Company's definitive proxy statement for the 2000 Annual Stockholders
          Meeting filed with the Commission on July 27, 2000, as amended by
          Amendment No. 1, filed with the Company's Form 10-Q for the period
          ended December 31, 2000, and Amendment No. 2, filed with the
          Company's definitive proxy statement for the 2001 Annual Stockholders
          Meeting filed with the Commission on July 9, 2001
</TABLE>

                                       1
<PAGE>

<TABLE>
<CAPTION>
 Exhibit
  Number                               Description
 -------                               -----------
 <C>      <S>
 10.18(a) Infonet Services Corporation 2000 Omnibus Stock Plan Non-qualified
           Stock Option Award Agreement for Officers, Directors And Senior
           Employees

 10.19    Infonet Services Corporation 2000 Employee Stock Purchase Plan
           (Amended and Restated Effective as of July 1, 2001), filed with the
           Company's Form 10-Q for the period ended June 30, 2001

 10.20    Executive Employment Agreement of Paul A. Galleberg, dated April 24,
           2001, filed with the Company's Form 10-Q for the period ended June
           30, 2001

 10.21    Consulting Agreement of Ernest U. Gambaro, filed with the Company's
           Form 10-Q for the period ended December 31, 2000

 10.23    Secured Demand Promissory Note between Thomas E. Whidden Ttee & Linda
           L. Whidden Ttee, U/A dtd 11/7/97 by Whidden Trust, a trust, and
           Infonet Services Corporation, filed with the Company's Annual Report
           on Form 10-K for the period ended March 31, 2001

 10.24    Term Note executed by Infonet Services Corporation in favor of Wells
           Fargo Bank, National Association, filed with the Company's Form S-3
           (No. 333-70320), dated September 27, 2001

 10.25    Deed of Trust and Assignment of Rents and Leases executed by Infonet
           Services Corporation for the benefit of Wells Fargo Bank, National
           Association, filed with the Company's Form S-3 (No. 333-70320),
           dated September 27, 2001
</TABLE>
--------
# Incorporated by reference from the Registrant's Registration Statement on
  Form S-1 filed with the Commission on December 15, 1999.

                                       2