IIJ Announces First Six Months Financial Results for the Fiscal Year Ending March 31, 2013

IIJ Announces First Six Months Financial Results for the Fiscal Year Ending
March 31, 2013

TOKYO, Nov. 8, 2012 (GLOBE NEWSWIRE) -- Internet Initiative Japan Inc. ("IIJ")
(Nasdaq:IIJI) (TSE:3774) today announced its consolidated financial results
for the first six months of the fiscal year ending March 31, 2013 (from April
1 to September 30, 2012, "1H FY2012" "1H12").^[1]


Highlights of 1H FY2012 Financial Results
                                  
Revenues                           JPY51,109 million ($656 million, up 8.3%
                                   YoY)
Operating Income                   JPY3,263 million($42 million, up 33.3%
                                   YoY)
Net Income attributable to IIJ     JPY2,007 million($26 million, up 47.4%
                                   YoY)
                                  
-- 1H FY2012 revenues increased by 8.3%. Revenues for network services, system
integration, and ATM operation business each grew YoY.
-- 1H FY2012 operating income increased by 33.3% mainly because gross margin
of network services and ATM operation business increased while SG&A stayed
around the same level as 2Q11.

Overview of 1H FY2012 Financial Results and Business Outlook

"We have been consistently pursuing our strategy for a long time to capture
the increasing needs for outsourcing network-systems by leveraging our strong
technology expertise and splendid Japanese blue-chip client base. We recognize
this strategy has been gradually bearing fruit with growing network traffic
and cloud computing trends in Japan, as evident in this first half of FY2012
results," said Koichi Suzuki, President and CEO of IIJ.

"Revenues and incomes in this first half fairly exceed our interim target as a
result of continuous accumulation of monthly recurring type services' orders
and gradually recovering systems construction revenues," continued Suzuki. "We
continue to see strong demands on over 1Gbps bandwidth usage for internet
connectivity from carriers, content providers, CATVs and others along with
their increasing traffic volume. Also, we are seeing some improvements in the
scale of projects for systems construction. As for our overseas business, we
continue to expand the cloud service business in the U.S., acquire orders of
SI projects, and we are seeing that they are beginning to contribute to the
revenue."

"Our business developments as well as financial results accomplished during
this first half reflect our successful strategy. With constant introduction of
new cloud services features, we have strengthened our position as a leading
cloud services provider in Japan. IIJ GIO, our cloud services, was ranked as
the top share in the Japanese public cloud market^[2] and evaluated as one of
the few best brands^[3]. Regarding R&D, we are pleased to announce the first
commercial version of Software Defined Network (SDN) platform was released
this fall."

^[1] Unless otherwise stated, all financial figures discussed in this
announcement are prepared in accordance with U.S. GAAP. All financial figures
are unaudited and consolidated. The translation of Japanese yen into U.S.
dollars is solely for the convenience of readers outside of Japan. The rate
used for the translation was JPY77.92 per US$1.00, which was the noon buying
rate on September 28, 2012.

^[2] According to Fuji Chimera Institute's report, IIJ GIO is the top service
provider in the Japanese public cloud market based on its FY2011 revenue and
accomplishments such as the number of projects. The Institute analyzed
strategies and service line-ups of 41 companies and the market trends. IIJ
GIO's FY2011 total revenue was JPY3 billion which makes up 17.2% of the
JPY17.4 billion market, marking the top share. The report was published in
July 2012.

^[3] Based on more than 6,000 survey responses of Nikkei BP Agency's "Fifth
Cloud Ranking," IIJ was chosen as "Best Brands" for IIJ GIO's popularity,
reliability, and technology expertise. IIJ also received 3 "Best Services"
awards in "Cloud Platform services (IaaS/PaaS)," "General Information SaaS,"
and "Specified Tasks SaaS." The ranking was publicized in October 2012.

1H FY2012 Financial Results Summary

Operating Results Summary
                                                        YoY %
                                1H11         1H12         Change
                                JPY millions JPY millions 
Total Revenues                   47,207       51,109       8.3
Network Services                 31,321       32,259       3.0
SI                               14,714       17,127       16.4
Equipment Sales                  611          641          5.1
ATM Operation Business           561          1,082        92.9
Total Costs                      37,971       40,961       7.9
Network Services                 25,046       25,383       1.3
SI                               11,726       14,089       20.2
Equipment Sales                  546          551          0.9
ATM Operation Business           653          938          43.7
SG&A Expenses and R&D            6,788        6,885        1.4
Operating Income                 2,448        3,263        33.3
Income before Income Tax Expense 2,291        3,176        38.7
Net income attributable to IIJ   1,361        2,007        47.4


Segment Summary
                                1H11         1H12
                                JPY millions JPY millions
Net Revenues                     47,207       51,109
Network services and SI business 46,894       50,311
ATM operation business           561          1,082
Elimination                      248          284
Operating Income (Loss)          2,448        3,263
Network service and SI business  2,658        3,260
ATM operation business           (164)        83
Elimination                      46           80

We have omitted segment analysis because most of our revenues are dominated by
Network services and SI business.

1H FY2012 Results of Operation

Revenues

Total revenues of 1H FY2012 were JPY51,109 million, up 8.3% YoY.

Network Services revenue was JPY32,259 million, up 3.0% YoY.

Revenues for Internet connectivity services for corporate use were JPY7,816
million, up 7.4% YoY, mainly due to the continuous demands for broader
bandwidth by network operators.

Revenues for Internet connectivity services for home use were JPY2,768
million, down 5.5% YoY. While our LTE mobile data communication service, which
was introduced in February 2012, has been accumulating orders continuously,
the cancellations of old type connectivity services continued.

WAN services revenue was JPY12,577 million, down 1.0% YoY, stayed around the
same level as 1H11.

Outsourcing services revenues were JPY9,098 million, up 8.2% YoY.
Datacenter-related, web security-related and "IIJ GIO Hosting Package
Services" each grew continuously.

Number of Contracts for Connectivity Services
                                                                  YoY
                                             1H11       1H12        Change
Internet Connectivity Services (Corporate     91,404     100,282     8,878
Use)
IP Service (-99Mbps)                         936        911         (25)
IP Service (100Mbps-999Mbps)                 329        369         40
IP Service (1Gbps--)                         129        164         35
IIJ Data Center Connectivity Service         304        315         11
IIJ FiberAccess/F and IIJ DSL/F              42,577     45,741      3,164
IIJ Mobile Service^[4]                       45,871     51,488      5,617
Others                                        1,258      1,294       36
Internet Connectivity Services (Home Use)     376,138    431,620     55,482
Under IIJ Brand                              38,623     65,808      27,185
hi-ho                                        145,249    152,031     6,782
OEM                                          192,266    213,781     21,515
Total Contracted Bandwidth                    820.7 Gbps 1,003.3Gbps 182.6Gbps



Network Services Revenues Breakdown
                                                                     YoY %
                                             1H11         1H12         change
                                             JPY millions JPY millions 
Internet Connectivity Service (Corporate Use) 7,277        7,816        7.4
IP Service^[5]                                4,633        4,934        6.5
IIJ FiberAccess/F and IIJ DSL/F               1,564        1,606        2.7
IIJ Mobile Service^[6]                        956          1,156        20.9
Others                                        124          120          (3.2)
Internet Connectivity Service (Home Use)      2,930        2,768        (5.5)
Under IIJ Brand                               453          621          36.9
hi-ho                                         2,190        1,841        (15.9)
OEM                                           287          306          6.8
WAN Services                                  12,702       12,577       (1.0)
Outsourcing Services                          8,412        9,098        8.2
Total Network Services                        31,321       32,259       3.0

SI revenues were JPY17,127 million, up 16.4% YoY.

Systems construction revenue, a one-time revenue, was JPY6,694 million, up
28.9% YoY, mainly due to the increase in the number of mid- to large- sized
systems construction projects. Overseas construction projects were also added.
Revenues relating to IIJ-Exlayer and its overseas subsidiaries, which operate
SI business overseas, have been consolidated from 2Q FY2012, and the total
revenues for the three months were JPY171 million. Systems operation and
maintenance revenue, a recurring revenue, was JPY10,433 million, up 9.6% YoY.
The increase was mainly due to the continuous accumulation of revenue from
"IIJ GIO Component Services."

The order backlog for systems construction and equipment sales was JPY4,803
million, up 4.6% YoY. The order backlog for systems operation and maintenance
was JPY15,074 million, up 12.4% YoY.

Equipment sales revenues were JPY641 million, up 5.1% YoY.

ATM Operation Business revenues were JPY1,082 million, up 92.9% YoY, along
with the increase in the numbers of ATMs newly placed.As of November 8, 2012,
567 ATMs are placed.

^[4] Contracts of IIJ Mobile Service are of mobile data communication service
for corporate use.

^[5] IP Service revenues include revenues from the Data Center Connectivity
Service.

^[6] Revenue from mobile data communication service for home use is included
in Internet Connectivity service (home use).

Cost and expense

Cost of revenues was JPY40,961 million, up 7.9% YoY.

Cost of Network Services revenue was JPY25,383 million, up 1.3% YoY mainly due
to the increase in outsourcing-related costs, personnel-related costs and
network operation-related costs. Gross margin for network services was
JPY6,876 million, up 9.6% YoY and gross margin ratio was 21.3%, up 1.3 points
YoY.

Cost of SI revenues was JPY14,089 million, up 20.2% YoY. There were increases
in purchasing costs, outsourcing-related costs and network operation-related
costs in relation to the increase in systems construction revenues. Gross
margin for SI was JPY3,037 million, up 1.6% YoY and gross margin ratio was
17.7%, down 2.6 points YoY.

Cost of Equipment Sales revenues was JPY551 million, up 0.9% YoY. Gross margin
was JPY91 million and gross margin ratio was 14.1%, up 3.5 points YoY.

Cost of ATM Operation Business revenues was JPY938 million, up 43.7% YoY
mainly due to the increase in the number of newly placed ATMs. Gross margin
ratio for ATM operation business was 13.3%.

SG&A and R&D Expenses

SG&A and R&D expenses in total were JPY6,885 million, up 1.4% YoY.

Sales and marketing expenses were JPY3,932 million, up 0.4% YoY, mainly due to
the increase in sales commission to our sales partners. Amortization expenses
of customer relationship related to IIJ Global Solutions Inc. was JPY184
million, slightly decreased from JPY212 million in 1H11.

General and administrative expenses were JPY2,745 million, up 1.4% YoY. The
increase was mainly due to the increase in personnel-related expenses.

Research and development expenses were JPY208 million, up 28.2% YoY.

Operating income

Operating income was JPY3,263 million, up 33.3% YoY mainly because gross
margin of each revenue line increased and SG&A stayed around the same level.

Other income (expenses)

Other income (expenses) was an expense of JPY87 million (an expense of JPY157
million for 1H11).

Income before income tax expenses

Income before income tax expenses was JPY3,176 million, up 38.7% YoY.

Net Income

Income tax expense was JPY1,251 million (JPY1,055 million for 1H11).

Equity in net income of equity method investees was JPY83 million (JPY77
million for 1H11) mainly due to net income of Internet Revolution, Inc. and
Internet Multifeed Co.

As a result of the above, net income was JPY2,008 million, up 53.0% YoY
(JPY1,312 million for 1H11).

Net income attributable to IIJ

Net income attributable to non-controlling interests was JPY1 million (loss of
JPY49 million for 1H11) mainly related to Trust Networks Inc. 

Net income attributable to IIJ was JPY2,007 million, up 47.4% YoY.

1H FY2012 Financial Condition

Balance Sheets

As of September 30, 2012, the balance of total assets was JPY75,723 million,
increased by JPY2,230 million from the balance as of March 31, 2012.

As for current assets as of September 30, 2012, as compared to the respective
balances as of March 31, 2012, cash and cash equivalents decreased by JPY1,866
million mainly due to the payment of income tax and the repayment of bank
borrowings, prepaid expenses increased by JPY935 million and inventories
increased by JPY839 million, respectively. As for noncurrent assets, as
compared to the respective balance as of March 31, 2012, property and
equipment increased by JPY2,175 million, resulting from the investment in
servers and network equipments for cloud computing service and others. As for
current liabilities, as compared to the respective balance as of March 31,
2012, income tax payable decreased by JPY1,315 million.

As for the balances of capital lease obligations, as compared to the
respective balances as of March 31, 2012, capital lease obligations-current
portion increased by JPY380 million to JPY3,377 million andcapital lease
obligations-noncurrent increased by JPY926 million to JPY5,667 million,
respectively. The balance of long-term borrowings including current portion as
of September 30, 2012 was decreased to JPY1,990 million resulted from the
repayment of JPY1,010 million.

As of September 30, 2012, the balance of other investments was JPY3,251
million. The breakdown of other investments were JPY2,060 million in
nonmarketable equity securities, JPY839 million in available-for-sale
securities and JPY352 million in other.

As of September 30, 2012, the balance of non-amortized intangible assets
(excluding telephone rights) such as goodwill was JPY6,124 million, and the
breakdown of non-amortized intangible assets were JPY5,969 million in goodwill
and JPY155 million in trademark. The balance of amortized intangible assets,
which was customer relationships, was JPY4,944 million.

Total IIJ shareholders' equity as of September 30, 2012 was JPY34,350 million,
an increase by JPY1,662 million from the balance as of March 31, 2012. IIJ
Shareholders' equity ratio (total IIJ shareholders' equity/total assets) as of
September 30, 2012 was 45.4%.

Cash Flows

Cash and cash equivalents as of September 30, 2012 were JPY11,670 million
compared to JPY10,974 million as of September 30, 2011.

Net cash provided by operating activities for 1H12 was JPY3,970 million
compared to net cash provided by operating activities of JPY4,288 million for
1H11. While operating income increased, there was the increase in payments for
income taxes.

Net cash used in investing activities for 1H12 was JPY3,054 million compared
to net cash used in investing activities of JPY3,234 million for 1H11, mainly
due to payments for purchase of property and equipments of JPY2,785 million
(JPY3,382 million for 1H11).

Net cash used in financing activities for 1H12 was JPY2,756 million compared
to net cash used in financing activities of JPY3,358 million for 1H11, due to
principal payments under capital leases of JPY1,813 million (JPY1,594 million
for 1H11), repayment for bank borrowings of JPY589 million (net) (repayment of
JPY1,460 million (net) for 1H11)and payments for FY2011 year-end dividends of
JPY355 million (JPY304 million for 1H11).

FY2012 Financial Targets (announced on May 15, 2012)

Our financial targets for FY2012 are as follows:

(JPY in millions)
           Revenues Operating Income before Income Tax    Net Income
                     Income    Expense (Benefit)           attributable to IIJ
Full FY2012 107,000  7,500     6,900                       4,000

Revenues, operating income, income before income tax expense (benefit) and net
income attributable to IIJ for 1H12 all exceeded the disclosed targets. Our
financial results tend to be weak in the first half and strong in the second
half, especially in fourth quarter, of every fiscal year due to seasonal
factor. The second half financial results have larger contribution to the full
year financial results, thus, our FY2012 full year financial targets announced
on May 15, 2012 remain unchanged.

Reconciliation of Non-GAAP Financial Measures

The following table summarizes the reconciliation of adjusted EBITDA to net
income attributable to IIJ in our consolidated statements of income that are
prepared in accordance with U.S. GAAP.

Adjusted EBITDA
                                                    1H11         1H12
                                                    JPY millions JPY millions
Adjusted EBITDA                                      5,872        6,902
Depreciation and Amortization ^ [7]                  3,424        3,639
Operating Income                                     2,448        3,263
Other Income (Expense)                               (157)        (87)
Income Tax Expense                                   1,056        1,251
Equity in Net Income of EquityMethod Investees     77           83
Net income                                           1,312        2,008
Net loss (income) attributable to noncontrolling     49           (1)
interests
Net Income attributable to IIJ                       1,361        2,007


CAPEX
                                                    1H11         1H12
                                                    JPY millions JPY millions
CAPEX, including capital leases                      6,445        5,903
Acquisition of Assets by Entering into Capital       3,063        3,118
Leases
Purchase of Property and Equipment                   3,382        2,785

Others

IIJ conducted a 1:200 stock split on common stock with an effective date of
October 1, 2012. Accordingly, basic net income attributable to IIJ per share
and diluted net income attributable to IIJ per share have been calculated as
if the stock split was conducted at the beginning of the previous consolidated
fiscal year. Number of authorized shares, shares outstanding (shares of common
stock) and treasury stock in the consolidated balance sheet are calculated as
if the stock split was conducted at the beginning of the previous consolidated
fiscal year.

^[7] Depreciation and amortization includes impairment loss on other
intangible assets. (See IIJ's consolidated financial statements for details).

Presentation

Presentation Materials will be posted on our web site
(http://www.iij.ad.jp/en/ir/) on November 8, 2012.

About Internet Initiative Japan Inc.

Founded in 1992, IIJ is one of Japan's leading Internet-access and
comprehensive network solutions providers. IIJ and its group of companies
provide total network solutions that mainly cater to high-end corporate
customers. IIJ's services include high-quality systems integration and
security services, Internet access, hosting/housing, and content design.
Moreover, IIJ has built one of the largest Internet backbone networks in
Japan, and between Japan and the United States. IIJ listed on the U.S. NASDAQ
Stock Market in 1999 and on the First Section of the Tokyo Stock Exchange in
2006.

The Internet Initiative Japan Inc. logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=4613

For inquiries, contact:

IIJ Investor Relations
Tel: +81-3-5259-6500 E-mail: ir@iij.ad.jp URL: http://www.iij.ad.jp/en/ir

Statements made in this press release regarding IIJ's or management's
intentions, beliefs, expectations, or predictions for the future are
forward-looking statements that are based on IIJ's and managements' current
expectations, assumptions, estimates and projections about its business and
the industry. These forward-looking statements, such as statements regarding
FY2012 revenues and operating and net profitability, 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 and increase revenues from higher-margin services such as systems
integration and outsourcing services; the possibility that revenues from
connectivity services may decline substantially as a result of competition and
other factors; the ability to compete in a rapidly evolving and competitive
marketplace; the impact on IIJ's profits of fluctuations in costs such as
backbone costs and subcontractor costs; the impact on IIJ's profits of
fluctuations in the price of available-for-sale securities; the impact of
technological changes in its industry; IIJ's ability to raise additional
capital to cover its indebtedness; the possibility that NTT, IIJ's largest
shareholder, may decide to exercise substantial influence over IIJ; and other
risks referred to from time to time in IIJ's filings on Form 20-F of its
annual report and other filings with the United States Securities and Exchange
Commission.

                                                            
Internet Initiative Japan Inc.
Quarterly Consolidated Balance Sheets (Unaudited)
(As of March 31, 2012 and September 30, 2012)

                                 As of March 31,  As of September 30, 2012
                                  2012
                                                   Thousands
                                 Thousands of     of          Thousands of
                                  JPY              U.S.        JPY
                                                   Dollars
ASSETS                                                       
CURRENT ASSETS:                                              
Cash and cash equivalents         13,536,824       149,775     11,670,450
Accounts receivable, net of
allowance for doubtful accounts
of JPY 107,919 thousand and JPY   15,722,135       200,822     15,648,040
105,762 thousand at March 31,
2012 and September 30, 2012,
respectively
Inventories                       752,075          20,414      1,590,661
Prepaid expenses                  1,848,344        35,726      2,783,735
Deferred tax assets -Current      939,370          10,655      830,227
Other current assets, net of
allowance for doubtful accounts
of JPY 10,732 thousand and JPY    891,560          11,947      930,990
10,733 thousand at March 31, 2012
and September 30, 2012,
respectively
Total current assets              33,690,308       429,339     33,454,103
INVESTMENTS IN EQUITY METHOD      1,406,634        20,492      1,596,746
INVESTEES
OTHER INVESTMENTS                 2,938,146        41,723      3,251,030
PROPERTY AND EQUIPMENT, net of
accumulated depreciation and
amortization of JPY 25,693,163    19,735,546       281,195     21,910,736
thousand and JPY 27,457,471
thousand at March 31, 2012 and
September 30, 2012, respectively
GOODWILL                          5,788,333        76,604      5,968,960
OTHER INTANGIBLE ASSETS -Net      5,396,469        65,678      5,117,608
GUARANTEE DEPOSITS                1,899,815        24,567      1,914,237
DEFERRED TAX ASSETS -Noncurrent   24,760           351         27,351
NET INVESTMENT IN SALES-TYPE      935,446          10,192      794,191
LEASES—Noncurrent
Prepaid expenses —Noncurrent      1,536,932        20,093      1,565,622
OTHER ASSETS, net of allowance
for doubtful accounts of
JPY86,388 thousand and JPY 85,995 140,857          1,573       122,599
thousand at March 31, 2012 and
September 30, 2012, respectively
TOTAL                             73,493,246       971,807     75,723,183

                                                            

                                 As of March 31,  As of September 30, 2012
                                  2012
                                                   Thousands
                                 Thousands of     of          Thousands of
                                  JPY              U.S.        JPY
                                                   Dollars
LIABILITIES AND SHAREHOLDERS'                                
EQUITY
CURRENT LIABILITIES:                                         
Short-term borrowings             9,000,000        120,906     9,421,000
Long-term borrowings —current     1,010,000        12,962      1,010,000
portion
Capital lease obligations—current 2,997,292        43,341      3,377,167
portion
Accounts payable —trade           9,093,657        121,000     9,428,326
Accounts payable —other           659,266          10,328      804,789
Income taxes payable              2,210,089        11,485      894,931
Accrued expenses                  2,277,307        29,795      2,321,581
Deferred income―current           1,495,468        23,670      1,844,368
Other current liabilities         717,342          7,409       577,282
Total current liabilities         29,460,421       380,896     29,679,444
LONG-TERM BORROWINGS              1,990,000        12,577      980,000
CAPITAL LEASE OBLIGATIONS         4,741,241        72,726      5,666,838
-Noncurrent
ACCRUED RETIREMENT AND PENSION
COSTS                             1,805,683        24,541      1,912,227
-Noncurrent
DEFERRED TAX LIABILITIES          652,280          8,434       657,129
-Noncurrent
DEFERRED INCOME -Noncurrent       1,547,159        23,399      1,823,249
OTHER NONCURRENT LIABILITIES      600,215          8,279       645,073
Total Liabilities                 40,796,999       530,852     41,363,960
COMMITMENTS AND CONTINGENCIES                                
                                                            
SHAREHOLDERS' EQUITY:                                        
Common-stock—authorized,
75,520,000 shares; issued and
outstanding, 41,295,600 shares at 16,833,847       216,040     16,833,847
March 31, 2012 and September 30,
2012
Additional paid-in capital        27,260,318       350,098     27,279,619
Accumulated deficit               (10,990,348)     (119,839)   (9,337,889)
Accumulated other comprehensive   (23,533)         (430)       (33,494)
loss
Treasury stock—758,800 shares
held by the company at March 31,  (392,079)        (5,032)     (392,079)
2012 and September 30, 2012,
respectively
Total Internet Initiative Japan   32,688,205       440,837     34,350,004
Inc. shareholders' equity
NONCONTROLLING INTERESTS          8,042            118         9,219
Total equity                      32,696,247       440,955     34,359,223
TOTAL                             73,493,246       971,807     75,723,183

                                                            
(Note) The U.S. dollar amounts have been translated from yen, for convenience
only, at the rate of JPY77.92 per 1U.S. dollar which wasthe noon buying rate
in New York City for cable transfers in foreign currencies as of September 28,
2012.


Internet Initiative Japan Inc.
Quarterly Consolidated Statements of Income and
Quarterly Consolidated Statements of Other Comprehensive Income (Unaudited)
(For The Six Months Ended September 30, 2011 and September 30, 2012)
                                                              
Quarterly Consolidated Statements of Income
                              Six Months Ended   Six Months Ended
                               September 30, 2011 September 30, 2012
                              Thousands of       Thousands of   Thousands of
                               JPY                U.S. Dollars   JPY
REVENUES:                                                      
Network services:                                              
Internet connectivity services 7,276,865          100,303        7,815,625
(corporate use)
Internet connectivity services 2,930,147          35,526         2,768,151
(home use)
WAN services                   12,701,727         161,412        12,577,216
Outsourcing services           8,412,015          116,756        9,097,610
Total                          31,320,754         413,997        32,258,602
Systems integration:                                           
Systems construction           5,194,343          85,903         6,693,586
Systems operation and          9,519,839          133,894        10,433,028
maintenance
Total                          14,714,182         219,797        17,126,614
Equipment sales                610,685            8,236          641,780
ATM operation business         560,887            13,886         1,082,005
Total revenues                 47,206,508         655,916        51,109,001
COST AND EXPENSES:                                             
Cost of network services       25,045,706         325,752        25,382,614
Cost of systems integration    11,726,201         180,818        14,089,358
Cost of equipment sales        546,187            7,074          551,245
Cost of ATM operation business 652,854            12,039         938,041
Total cost                     37,970,948         525,683        40,961,258
Sales and marketing            3,916,975          50,458         3,931,676
General and administrative     2,707,861          35,229         2,745,077
Research and development       162,517            2,673          208,283
Total cost and expenses        44,758,301         614,043        47,846,294
OPERATING INCOME               2,448,207          41,873         3,262,707
OTHER INCOME (EXPENSE):                                        
Interest income                15,950             190            14,823
Interest expense               (154,689)          (1,863)        (145,163)
Foreign exchange gains         (9,358)            (641)          (49,997)
(losses)
Net gains on sales of other    (170)              174            13,565
investments -net
Losses on write-down of other  (77,460)           (254)          (19,788)
investments
Other -net                     68,329             1,285          100,151
Other expense — net            (157,398)          (1,109)        (86,409)
INCOME FROM OPERATIONS BEFORE
INCOME TAX EXPENSE AND EQUITY  2,290,809          40,764         3,176,298
IN NET INCOME OF EQUITY METHOD
INVESTEES
INCOME TAX EXPENSE            1,055,254          16,057         1,251,172
EQUITY IN NET INCOME OF EQUITY 76,709             1,066          83,088
METHOD INVESTEES
NET INCOME                     1,312,264          25,773         2,008,214
LESS: NET LOSS (INCOME)
ATTRIBUTABLE TO NONCONTROLLING 49,186             (14)           (1,058)
INTERESTS
NET INCOME ATTRIBUTABLE TO     1,361,450          25,759         2,007,156
INTERNET INITIATIVE JAPAN INC.

                              Six Months Ended   Six Months Ended
                               September 30, 2011 September 30, 2012
NET INCOME PER SHARE                                           
BASIC WEIGHTED-AVERAGE NUMBER  40,536,800                       40,536,800
OF SHARES (shares)
DILUTED WEIGHTED-AVERAGE       40,548,600                       40,564,800
NUMBER OF SHARES (shares)
BASIC WEIGHTED-AVERAGE NUMBER  81,073,600                       81,073,600
OF ADS EQUIVALENTS (ADSs)
DILUTED WEIGHTED-AVERAGE
NUMBER OF ADS EQUIVALENTS      81,097,200                       81,129,600
(ADSs)
BASIC NET INCOME PER SHARE     33.59              0.64           49.51
(JPY / U.S. Dollars / JPY)
DILUTED NET INCOME PER SHARE   33.58              0.64           49.48
(JPY / U.S. Dollars / JPY)
BASIC NET INCOME PER ADS
EQUIVALENT(JPY / U.S. Dollars 16.79              0.32           24.76
/ JPY)
DILUTED NET INCOME PER ADS
EQUIVALENT(JPY / U.S. Dollars 16.79              0.32           24.74
/ JPY)

(Note) The U.S. dollar amounts have been translated from yen, for convenience
only, at the rate of JPY77.92 per 1U.S. dollar which wasthe noon buying rate
in New York City for cable transfers in foreign currencies as of September 28,
2012.

Quarterly Consolidated Statements of Other comprehensive income
                              Six Months Ended   Six Months Ended
                               September 30, 2011 September 30, 2012
                              Thousands of       Thousands of   Thousands of
                               JPY                U.S. Dollars   JPY
NET INCOME                     1,312,264          25,773         2,008,214
Comprehensive income (loss):                                   
Foreign currency translation   4,512              42             3,299
adjustments
Unrealized holding gain on     24,023             (172)          (13,379)
securities
Defined benefit pension plans  (6,789)            2              119
Total comprehensive income     1,334,010          25,645         1,998,253
(loss)
Less: Comprehensive income
(loss) attributable to         49,186             (14)           (1,058)
noncontrolling interests
Comprehensive income
attributable to Internet       1,383,196          25,631         1,997,195
Initiative Japan Inc.

(Note) The U.S. dollar amounts have been translated from yen, for convenience
only, at the rate of JPY77.92 per 1U.S. dollar which was the noon buying rate
in New York City for cable transfers in foreign currencies as of September 28,
2012.

                                                             
Internet Initiative Japan Inc.
Quarterly Consolidated Statements of Cash Flows (Unaudited)
(For The Six Months Ended September 30, 2011 and September 30, 2012)

                               Six Months Ended  Six Months Ended
                              September 30,     September 30, 2012
                               2011
                              Thousands of      Thousands of   Thousands of
                               JPY               U.S. Dollars   JPY
OPERATING ACTIVITIES:                                         
Net income                     1,312,264         25,773         2,008,214
Adjustments to reconcile net
income to net cash provided by                                
operating activities:
Depreciation and amortization  3,424,428         46,706         3,639,342
Provision for retirement and   88,871            1,370          106,730
pension costs, less payments
Provision for allowance for    46,551            1              86
doubtful accounts
Loss on disposal of property   21,917            30             2,315
and equipment
Net gains on sales of other    170               (174)          (13,565)
investments
Impairment of other            77,460            254            19,788
investments
Foreign exchange losses, net   35,796            465            36,218
Equity in net income of equity (76,709)          (1,066)        (83,088)
method investees
Deferred income tax expense    165,782           1,595          124,330
Others                         48,686            12             967
Changes in operating assets
and liabilities net of effects                                
from acquisition of a company:
Decrease in accounts           1,932,064         2,277          177,411
receivable
Decrease in net investment in  121,191           1,813          141,255
sales-type lease―noncurrent
Increase in inventories,
prepaid expenses and other     (200,262)         (21,613)       (1,684,108)
current and noncurrent assets
Increase (decrease) in         (3,896,006)       3,870          301,591
accounts payable
Increase (decrease) in income  465,768           (16,950)       (1,320,716)
taxes payable
Increase (decrease) in         (58,002)          3,543          276,090
deferred income-noncurrent
Increase in accrued expenses
and other current and          778,284           3,047          237,403
noncurrent liabilities
Net cash provided by operating 4,288,253         50,953         3,970,263
activities
INVESTING ACTIVITIES:                                         
Purchase of property and       (3,381,430)       (35,744)       (2,785,190)
equipment
Proceeds from sales of         218,566           4,813          375,005
property and equipment
Purchase of available-for-sale (118,948)         (252)          (19,606)
securities
Purchase of other investments  (56,115)          (4,799)        (373,909)
Investment in an equity method --                (1,283)        (100,000)
investee
Proceeds from sales of         3,879             --             --
available-for-sale securities
Proceeds from sales of other   62,205            1,144          89,117
investments
Payments of guarantee deposits (18,467)          (288)          (22,473)
Refund of guarantee deposits   20,573            159            12,397
Payments for refundable        (6,239)           (5)            (368)
insurance policies
Refund from insurance policies 42,948            --             --
Acquisition of a newly
controlled company, net of     --                (2,940)        (229,058)
cash acquired
Other                          (516)             1              60
Net cash used in investing     (3,233,544)       (39,194)       (3,054,025)
activities

                               Six Months Ended  Six Months Ended
                              September 30,     September 30, 2012
                               2011
                              Thousands of      Thousands of   Thousands of
                               JPY               U.S. Dollars   JPY
FINANCING ACTIVITIES:                                         
Proceeds from issuance of
short-term borrowings with
initial maturities over three  3,320,000         270            21,000
months and long-term
borrowings
Repayments of short-term
borrowings with initial        (500,000)         (12,962)       (1,010,000)
maturities over three months
and long-term borrowings
Principal payments under       (1,593,510)       (23,263)       (1,812,654)
capital leases
Net decrease in short-term
borrowings with initial        (4,280,000)       5,133          400,000
maturities less than three
months
Dividends paid                 (304,026)         (4,552)        (354,697)
Net cash used in financing     (3,357,536)       (35,374)       (2,756,351)
activities
                                                             
EFFECT OF EXCHANGE RATE
CHANGES ON CASH AND CASH       (36,335)          (337)          (26,261)
EQUIVALENTS
                                                             
NET DECREASE IN CASH AND CASH  (2,339,162)       (23,952)       (1,866,374)
EQUIVALENTS
CASH AND CASH EQUIVALENTS,     13,313,615        173,727        13,536,824
BEGINNING OF THE PERIOD
CASH AND CASH EQUIVALENTS, END 10,974,453        149,775        11,670,450
OF THE PERIOD
                                                             
ADDITIONAL CASH FLOW                                          
INFORMATION:
Interest paid                  151,202           1,872          145,876
Income taxes paid              318,190           29,369         2,288,440
                                                             
NONCASH INVESTING AND                                         
FINANCING ACTIVITIES:
Acquisition of assets by       3,063,124         40,017         3,118,126
entering into capital leases
Facilities purchase            560,005           10,328         804,789
liabilities
Asset retirement obligation    42,273            --             --
Acquisition of a company:                                     
Assets acquired                --                5,187          404,140
Liabilities assumed            --                1,339          104,321
Noncontrolling interests       --                2              119
Cash paid                      --                3,846          299,700
Cash including acquired assets --                906            70,642
Acquisition of a newly
controlled company, net of     --                2,940          229,058
cash acquired

                                                             
(Note) The U.S. dollar amounts have been translated from yen, for convenience
only, at the rate of JPY77.92 per 1U.S. dollar which wasthe noon buying rate
in New York City for cable transfers in foreign currencies as of September 28,
2012.


Going Concern Assumption (Unaudited)
Nothing to be reported.
                                                       
Segment Information (Unaudited)
Business Segments:
Revenues:
                                  Six Months Ended      Six Months Ended
                                   September 30, 2011    September 30, 2012
                                  Thousands of JPY      Thousands of JPY
Network service and systems        46,893,894            50,310,706
integration business
Customers                          46,645,621            50,026,996
Intersegment                       248,273               283,710
ATM operation business             560,887               1,082,005
Customers                          560,887               1,082,005
Intersegment                       -                    -
Elimination                        248,273               283,710
Consolidated total                 47,206,508            51,109,001
Segment profit or loss:                                 
                                  Six Months Ended      Six Months Ended
                                   September 30, 2011    September 30, 2012
                                  Thousands of JPY      Thousands of JPY
Network service and systems        2,658,464             3,260,156
integration business
ATM operation business             (163,814)             82,920
Elimination                        46,443                80,369
Consolidated operating income      2,448,207             3,262,707
                                                       
Substantially all revenues are from customers operating in Japan. Geographic
information is not presented due to immateriality of
revenue attributable to international operations.
                                                       
Material Changes In Shareholders' Equity(Unaudited)
Nothing to be reported.
                                                       
Subsequent Events (Unaudited)
IIJ conducted a 1:200 stock split on common stock, with an effective date of
October 1, 2012. Simultaneously IIJ adopted the unit
share system which sets a share-trading unit as 100 shares.

2nd Quarter FY2012 Consolidated Financial Results (3 months)

The following tables are highlight data of 2nd Quarter FY2012 consolidated
financial results (unaudited, from April 1, 2012 to September 30, 2012).


Operating Results Summary
                                                        YoY %
                                2Q11         2Q12         Change
                                JPY millions JPY millions 
Total Revenues:                  23,845       26,268       10.2
Network Services                 15,800       16,167       2.3
SI                               7,493        9,175        22.5
Equipment Sales                  235          311          32.5
ATM Operation Business           317          615          93.6
Cost of Revenues:                19,111       20,939       9.6
Network Services                 12,606       12,619       0.1
SI                               5,957        7,526        26.3
Equipment Sales                  207          277          34.3
ATM Operation Business           341          517          51.5
SG&A Expenses and R&D            3,200        3,440        7.5
Operating Income                 1,534        1,889        23.2
Income before Income Tax Expense 1,425        1,803        26.5
Net Income attributable to IIJ   849          1,110        30.8

Network Service Revenue Breakdown
                                                                     YoY %
                                             2Q11         2Q12         Change
                                             JPY millions JPY millions 
Internet Connectivity Service (Corporate Use) 3,697        3,951        6.9
IP Service                                    2,363        2,495        5.6
IIJ FiberAccess/F and IIJ DSL/F               781          804          2.9
IIJ Mobile Service                            491          592          20.6
Others                                        62           60           (2.7)
Internet Connectivity Service (Home Use)      1,445        1,340        (7.3)
Under IIJ Brand                               226          303          33.8
hi-ho                                         1,074        882          (17.9)
OEM                                           145          155          6.7
WAN Services                                  6,391        6,264        (2.0)
Outsourcing Services                          4,267        4,612        8.1
Network Services Revenues                     15,800       16,167       2.3

Reconciliation of Non-GAAP Financial Measures

The following table summarizes the reconciliation of adjusted EBITDA to net
income in our consolidated statements of income that are prepared in
accordance with U.S. GAAP.

Adjusted EBITDA
                                                    2Q11         2Q12
                                                    JPY millions JPY millions
Adjusted EBITDA                                      3,294        3,730
Depreciation and Amortization                        1,760        1,841
Operating Income                                     1,534        1,889
Other Income (Expense)                               (108)        (86)
Income Tax Expense                                   631          736
Equity in Net Income (Loss) of Equity Method         36           50
Investees
Net income                                           831          1,117
Net income attributable to noncontrolling interests  18           (7)
Net Income attributable to IIJ                       849          1,110

The following table summarizes the reconciliation of capital expenditures to
the purchase of property and equipment in our consolidated statements of cash
flows that are prepared and presented in accordance with U.S. GAAP.

CAPEX
                                      2Q11         2Q12
                                      JPY millions JPY millions
CAPEX, including capital leases        3,567        2,606
Acquisition of Assets by Entering into 2,263        1,479
Capital Leases
Purchase of Property and Equipment     1,304        1,127

                                                             
Internet Initiative Japan Inc.
Quarterly Consolidated Statements of Income (Unaudited)
(Three Months ended September 30, 2011 and September 30, 2012)

                                Three Months
                               Ended           Three Months Ended
                                September 30,   September 30, 2012
                                2011
                               Thousands of    Thousands of    Thousands of
                                JPY             U.S. Dollars    JPY
REVENUES:                                                     
Network services:                                             
Internet connectivity services  3,696,700       50,704          3,950,858
(corporate use)
Internet connectivity services  1,444,977       17,184          1,339,001
(home use)
WAN services                    6,391,481       80,401          6,264,795
Outsourcing services            4,266,495       59,194          4,612,416
Total                           15,799,653      207,483         16,167,070
Systems integration:                                          
Systems Construction            2,677,479       50,484          3,933,690
Systems Operation and           4,815,341       67,266          5,241,338
Maintenance
Total                           7,492,820       117,750         9,175,028
Equipment sales                 234,784         3,993           311,145
ATM operation business          317,474         7,886           614,495
Total revenues                  23,844,731      337,112         26,267,738
COST AND EXPENSES:                                            
Cost of network services        12,605,651      161,943         12,618,608
Cost of systems integration     5,956,556       96,580          7,525,533
Cost of equipment sales         207,203         3,571           278,206
Cost of ATM operation business  341,333         6,634           516,954
Total cost                      19,110,743      268,728         20,939,301
Sales and marketing             1,961,469       25,685          2,001,385
General and administrative      1,154,957       17,121          1,334,025
Research and development        83,925          1,339           104,343
Total cost and expenses         22,311,094      312,873         24,379,054
OPERATING INCOME                1,533,637       24,239          1,888,684
OTHER INCOME (EXPENSE):                                       
Interest income                 8,652           85              6,630
Interest expense                (75,121)        (946)           (73,726)
Foreign exchange losses         (9,374)         (380)           (29,579)
Net gains (losses) on sales of  (170)           174             13,563
other investments -net
Losses on write-down of other   (77,460)        (229)           (17,825)
investments
Other—net                       45,208          196             15,271
Other expense — net             (108,265)       (1,100)         (85,666)
INCOME FROM OPERATIONS BEFORE
INCOME TAX EXPENSE AND EQUITY   1,425,372       23,139          1,803,018
IN NET INCOME IN EQUITY METHOD
INVESTEES
INCOME TAX EXPENSE             630,707         9,451           736,412
EQUITY IN NET INCOME OF EQUITY  36,682          645             50,201
METHOD INVESTEES
NET INCOME                      831,347         14,333          1,116,807
LESS: NET LOSS (INCOME)
ATTRIBUTABLE TO NONCONTROLLING  17,838          (82)            (6,358)
INTERESTS
NET INCOME ATTRIBUTABLE TO      849,185         14,251          1,110,449
INTERNET INITIATIVE JAPAN INC.

                                Three Months
                               Ended           Three Months Ended
                                September 30,   September 30, 2012
                                2011
NET INCOME PER SHARE                                          
BASIC WEIGHTED-AVERAGE NUMBER   40,536,800                     40,536,800
OF SHARES (shares)
DILUTED WEIGHTED-AVERAGE NUMBER 40,560,200                     40,569,000
OF SHARES (shares)
BASIC WEIGHTED-AVERAGE NUMBER   81,073,600                     81,073,600
OF ADS EQUIVALENTS (ADSs)
DILUTED WEIGHTED-AVERAGE NUMBER 81,120,400                     81,138,000
OF ADS EQUIVALENTS (ADSs)
BASIC NET INCOME PER SHARE (JPY 20.95           0.35            27.39
/ U.S. Dollars / JPY)
DILUTED NET INCOME PER SHARE    20.94           0.35            27.37
(JPY / U.S. Dollars / JPY)
BASIC NET INCOME PER ADS
EQUIVALENT (JPY / U.S. Dollars  10.47           0.18            13.70
/ JPY)
DILUTED NET INCOME PER ADS
EQUIVALENT (JPY / U.S. Dollars  10.47           0.18            13.69
/ JPY)
                                                             
(Note) The U.S. dollar amounts have been translated from yen, for convenience
only, at the rate of JPY77.92 per 1U.S. dollar which was the noon buying rate
in New York City for cable transfers in foreign currencies as of September 28,
2012.
                                                             

                                                             
Internet Initiative Japan Inc.
Quarterly Consolidated Statements of Cash Flows (Unaudited)
(Three Months ended September 30, 2011 and September 30, 2012)

                                Three Months
                               Ended           Three Months Ended
                                September 30,   September 30, 2012
                                2011
                               Thousands of    Thousands of    Thousands of
                                JPY             U.S. Dollars    JPY
OPERATING ACTIVITIES:                                         
Net income                      831,347         14,333          1,116,807
Adjustments to reconcile net
income to net cash provided by                                
operating activities:
Depreciation and amortization   1,760,537       23,627          1,841,047
Provision for retirement and    31,912          692             53,919
pension costs, less payments
Provision for allowance for     22,746          2               145
doubtful accounts and advances
Loss on disposal of property    5,316           16              1,271
and equipment
Net losses (gains) on sales of  170             (174)           (13,563)
other investments
Impairment of other investments 77,460          229             17,825
Foreign exchange gains, net     5,669           30              2,373
Equity in net income of equity  (36,682)        (644)           (50,201)
method investees
Deferred income tax benefit     (140,003)       (350)           (27,279)
Others                          38,632          293             22,818
Changes in operating assets and
liabilities net of effects from                               
acquisition of business and a
company:
Increase in accounts receivable (413,487)       (15,939)        (1,241,974)
Decrease in net investment in   24,794          1,260           98,205
sales-type lease―noncurrent
Decrease in inventories,
prepaid expenses and other      1,798,644       3,318           258,544
current and noncurrent assets
Increase (decrease) in accounts (1,345,398)     2,259           175,983
payable
Increase in income taxes        744,936         9,295           724,293
payable
Increase (decrease) in deferred (442,376)       3,479           271,080
income― noncurrent
Increase (decrease) in accrued
expenses, other current and     1,468           (9,052)         (705,353)
noncurrent liabilities
Net cash provided by operating  2,965,685       32,674          2,545,940
activities
INVESTING ACTIVITIES:                                         
Purchase of property and        (1,303,549)     (14,462)        (1,126,849)
equipment
Proceeds from sales of property 101,971         2,705           210,799
and equipment
Purchase of available-for-sale  (41,123)        (45)            (3,503)
securities
Purchase of other investments   (6,115)         (765)           (59,599)
Proceeds from sales of          3,879           --              --
available-for-sale securities
Proceeds from sales of other    53,262          886             68,996
investments
Payments of guarantee deposits  (16,260)        (279)           (21,708)
Refund of guarantee deposits    878             34              2,646
Payments for refundable         (413)           (2)             (187)
insurance policies
Refund from insurance policies  42,948          --              --
Other                           (480)           87              6,773
Net cash used in investing      (1,165,002)     (11,841)        (922,632)
activities

                                Three Months
                               Ended           Three Months Ended
                                September 30,   September 30, 2012
                                2011
                               Thousands of    Thousands of    Thousands of
                                JPY             U.S. Dollars    JPY
FINANCING ACTIVITIES:                                         
Proceeds from issuance of
short-term borrowings with      3,120,000       270             21,000
initial maturities over three
months and long-term borrowings
Repayments of short-term
borrowings with initial         (500,000)       (12,962)        (1,010,000)
maturities over three months
long-term borrowings
Principal payments under        (790,752)       (12,005)        (935,440)
capital leases
Net Increase (decrease) in
short-term borrowings with      (4,080,000)     6,416           500,000
initial maturities less than
three months
Net cash used in financing      (2,250,752)     (18,281)        (1,424,440)
activities
                                                             
EFFECT OF EXCHANGE RATE CHANGES (10,374)        20              1,490
ON CASH AND CASH EQUIVALENTS
                                                             
NET INCREASE (DECREASE) IN CASH (460,443)       2,572           200,358
AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS,      11,434,896      147,203         11,470,092
BEGINNING OF THE PERIOD
CASH AND CASH EQUIVALENTS, END  10,974,453      149,775         11,670,450
OF THE PERIOD
                                                             
(Note) The U.S. dollar amounts have been translated from yen, for convenience
only, at the rate of JPY77.92 per 1U.S. dollar which wasthe noon buying rate
in New York City for cable transfers in foreign currencies as of September 28,
2012.

(Note2) The above presentation for the three months ended March 31, 2011 has
been changed to conform to the presentation forthe three months ended March
31, 2012.


Note: The following information is provided to disclose Internet Initiative
Japan Inc. ("IIJ") financial results (unaudited) for the six months ended
September 30, 2012 ("FY2012 1H") in the form defined by the Tokyo Stock
Exchange.

Consolidated Financial Results for the Six Months Ended September 30, 2012
[Under accounting principles generally accepted in the United States ("U.S.
GAAP")]
                                 November 8, 2012
Company name: Internet Initiative Exchange listed: Tokyo Stock Exchange First
Japan Inc.                        Section
Stock code number: 3774           URL: http://www.iij.ad.jp/
Representative: Koichi Suzuki, President, Representative Director and CEO
Contact: Akihisa Watai, Managing  TEL: (03) 5259-6500
Director and CFO
Filing of quarterly report (Shihanki-houkokusho) to the regulatory
organization in Japan: Scheduled on November 14, 2012
Payment of dividend: December 6, 2012
Supplemental material on this Quarterly Results: Yes
Presentation on this Quarterly Results: Yes (for institutional investors and
analysts)


(Amounts of less than JPY one million are rounded)
1. Consolidated Financial Results for the Six Months Ended September 30, 2012
(April 1, 2012 to September 30, 2012)
(1) Consolidated Results of Operations                         (% shown is YoY
                                                               change)
                                                Income before  Net Income
             Total Revenues  Operating Income  Income Tax     attributable to
                                                Expense        IIJ
             JPY        %   JPY         %    JPY      %    JPY       %
              millions        millions          millions       millions
Six Months
Ended         51,109     8.3  3,263       33.3  3,176    38.7  2,007     47.4
September 30,
2012
Six Months
Ended         47,207     37.7 2,488       103.8 2,291    127.7 1,361     58.4
September 30,
2011

(Note1) Total comprehensive income attributable to IIJ
Six Months Ended September 30, 2012: JPY1,998 million (up 49.8% YoY)
Six Months Ended September 30, 2011: JPY1,334 million (up 115.7% YoY)
(Note2) Income before income tax expense represents income from operations
before income tax expense and equity in net income in equity method investees,
respectively, in IIJ's consolidated financial statements.

                        Basic Net Income            Diluted Net Income
                       attributable to IIJ per     attributable to IIJ per
                        Share                       Share
                       JPY                         JPY
Six Months Ended        49.51                       49.48
September 30, 2012
Six Months Ended        33.59                       33.58
September 30, 2011



(Note) IIJ conducted a 1:200 stock split on common stock with an effective
date of October 1, 2012. Accordingly, basic net income attributable to IIJ per
share and diluted net income attributable to IIJ per share have been
calculated as if the stock split was conducted at the beginning of the
previous consolidated fiscal year.

(2) Consolidated Financial Position
                                              Total IIJ       Total IIJ
               Total Assets   Total Equity   Shareholders'   Shareholders'
                                              Equity          Equity to Total
                                                              Assets
               JPY millions   JPY millions   JPY millions    %
As of September 75,723         34,359         34,350          45.4
30, 2012
As of March 31, 73,493         32,696         32,688          44.5
2012


2. Dividends
                      Dividend per Shares
                      1Q-end    2Q-end      3Q-end    Year-end    Total
                      JPY       JPY         JPY       JPY         JPY
Fiscal Year Ended      --        1,500.00    --        1,750.00    3,250.00
March 31, 2012
Fiscal Year            --        1,750.00                        
EndingMarch 31, 2013
Fiscal Year Ending
March 31, 2013                             --        8.75        1,758.75
(Target)
(Note1) Changes in the latest forecasts released: None
(Note2) The year-end dividend forecast per share for the fiscal year ending
March 31, 2013 was adjusted, taking into account a 1:200 stock split on common
stock, with an effective date of October 1, 2012.



3. Target of Consolidated Financial Results for the Fiscal Year Ending March
31, 2013
(April 1, 2012 through March 31, 2013)                           (% shown is
                                                                  YoY change)
                                       Income before              Basic Net
                         Operating     Income Tax    Net Income   Income
        Total Revenues  Income        Expense       Attributable attributable
                                       (Benefit)     to IIJ       to IIJ per
                                                                  Share
        JPY        %    JPY      %    JPY      %    JPY      %   JPY
         millions        millions      millions      millions
Fiscal
Year
Ending   107,000    10.0 7,500    18.0 6,900    15.5 4,000    9.9 98.68
March
31, 2013
(Note1) Changes in the latest forecasts released: None
(Note2) Basic net income attributable to IIJ per share for the fiscal year
ending march 31, 2013 was adjusted, taking into account a 1:200 stock split on
common stock, with an effective date of October 1, 2012.



4. Others
(1) Changes in Significant Subsidiaries for the Six Months Ended September 30,
2012
(Changes in significant subsidiaries for the Six Months Ended September 30,
2012 which resulted in changes in scope of consolidation): None

(2) Changes in Significant Accounting and Reporting Policies for the Quarterly
Consolidated Financial Statements
1) Changes due to the revision of accounting standards: Yes
2) Others: No

(3) Number of Shares Outstanding (Shares of Common Stock)
1) The number of shares outstanding (inclusive of treasury stock):
As of September 30, 2012: 41,295,600 shares
As of March 31, 2012: 41,295,600 shares
2) The number of treasury stock:
As of September 30, 2012: 758,800 shares
As of March 31, 2012:  758,800 shares
3) The weighted average number of shares outstanding:
For the Six Months Ended September 30, 2012: 40,536,800
shares
For the Six Months Ended September 30, 2011: 40,536,800
shares

(Note) IIJ conducted a 1:200 stock split on common stock with an effective
date of October 1, 2012. Number of shares outstanding (shares of common stock)
in the above have been calculated as if the stock split was conducted at the
beginning of the previous fiscal year (April 1, 2011).

CONTACT: Internet Initiative Japan Inc.
         E-mail: ir@iij.ad.jp Tel: +81-3-5259-6500
         URL: http://www.iij.ad.jp/en/ir

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