Crosswave Announces Solid Revenue Growth in its 4th Quarter and Full FY2000; The Company Expects Revenues to More Than Triple in FY2001.

Business Editors

TOKYO and NEW YORK--(BUSINESS WIRE)--May 21, 2001

Crosswave Communications Inc. (NASDAQ:CWCI) ("Crosswave"), a pioneer in broadband data communications in Japan, today announced financial results for the fourth quarter and fiscal year ended March 31, 2001.

All figures are unaudited and prepared in accordance with accounting principles generally accepted in the United States for interim financial information. On May 22 at 9 a.m. EDT, the President, Koichi Suzuki, CEO Akio Onishi and CFO Yasuharu Fushimi, will host a conference call to discuss the financial results contained in this release. This will be simultaneously webcast at www.vcall.com and the replay will be available from Crosswave's URL: www.cwc.co.jp.

4Q00 and FY2000 Results Summary

- Revenues for the quarter amounted to JPY 989 million (US$ 7.9 million) (*1),
an increase of 23.2% from 3Q00. The revenue growth was mainly driven by strong
customer-base expansion in Crosswave's Wide-area Ethernet Platform
Service.

- Net loss for the quarter amounted to JPY 2,932 million (US$ 23.4 million),
compared to JPY 2,392 million in 4Q99 and JPY 2,367 million in 3Q00.

- Adjusted EBITDA(*2) for the quarter was JPY (-)2,302 million (US$ (-)18.3
million), compared to adjusted EBITDA of JPY (-)1,956 million in 4Q99 and JPY
(-)2,089 million in 3Q00.

- In total, revenues in FY2000 increased 1,034.1% to JPY 2,629 million,
compared to JPY 232 million in FY1999. Crosswave estimates that revenues in
FY2001 will grow more than three times of those of FY2000, benefiting from
rapid customer base expansion as a result of the significant demand for
broadband services in Japan.

(*1) The translations of Japanese yen amounts into US dollar amounts with respect to three months and the year ended in March 2001 are included solely for the convenience of readers outside Japan and have been made at the rate of JPY 125.54 = $1, the approximate rate of exchange on March 30, 2001. (*2) Adjusted EBITDA represents operating income (loss) before depreciation and amortization.

FY2000 Overview and Outlook

Market Environment

"We believe that Japan will witness explosive growth in the broadband market. We foresee this growth further increasing its momentum once Japan, a global economic leader with many world-class corporations, starts utilizing full-scale broadband infrastructure," said Koichi Suzuki, the President of Crosswave. "In 2000, the Japanese telecommunications market, partly as a result of government initiatives, made headway in creating a more favorable environment for the market by the unbundling of NTT's local access lines. Now the number of xDSL users has increased while FTTH (Fiber-To-The-Home) services are also emerging gradually in Japan."

"In this environment, IT investment made by the corporate segments, which is one of our targeted customer bases, is growing at a rapid rate. The investment in IT will improve cost performance and productivity and develop new business processing for corporate users. Having sophisticated information network systems is becoming a vital element for companies to compete in the global market."

FY2000 Overview

"FY2000 was a significant year for Crosswave as well, during which we firmly established our presence in the market," said Akio Onishi, CEO of Crosswave. "We believe we are now well positioned to serve the rapidly growing market for broadband services in Japan. First and foremost, our service is of an excellent quality stemming from our depth of experience and skill for operations. Our nationwide fiber optic network is now complemented by six multi-site data centers completed in 2000, which allow us to service a much greater customer base. We are very pleased with the feedback we have received regarding our service quality and range of service offerings from several of our corporate customers," continued Akio Onishi.

"As an example of one of our successful services, our Wide-area Ethernet Platform service (layer 2 service) is conceptually different and well-recognized in the market for their compatibility with computers, customer-friendly operations, cost-effectiveness or pricing irrelevant of distance and so on. A number of nationwide blue-chip customers became strong users of this service, including Fuji Photo Film, Kyowa Hakko Kogyo, Kumagaigumi, Compaq, Olympus Optical, The Chunichi Shimbun, Tomen Corporation and Nippon Steel."

Our Target for FY2001

"Crosswave's strategy in this fiscal year is to put forth maximum effort to keep expanding its customer base, enhancing service lineups, and executing our network construction works," continued Akio Onishi. "Equipped with full-scale operations, FY2001 is the year we will be more able to capture the demand and will demonstrate our capabilities to serve this market."

"We expect that our revenues in the current fiscal year ending March 2002 will be more than triple revenues for FY2000," said Yasuharu Fushimi, CFO of Crosswave. "This growth will be fueled by steadily increasing orders for Wide-area Ethernet Platform Service and some large-sum contracts already finalized, including one with U's Communications. U's Communications is an FTTH operator in Japan to whom we supply a Giga-bit class backbones for their services."

The 4th Quarter of FY2000 Operating Highlights

Solid Revenue Growth

In the fourth quarter, the total number of customers grew to 81 from 63 in 3Q00, comprised of 63 corporations and 18 large network operators, including Type I carriers, ISPs and broadband access providers.

Total Network Services revenues increased to JPY 856 million in 4Q00 from JPY 694 million in 3Q00. The Wide-area Ethernet Platform Service played a large role in the increase in Network Service revenues to account for more than 20% of its total revenues in 4Q00. The increase in the Wide-area Ethernet Platform Service revenues is mainly due to an increase in the number of ports connected and the bandwidth upgrades from existing customers and to newly obtained customers. The total number of customers for Wide-area Ethernet Platform Services is now 41 with additional backlogs from 23 customers that have already contracted for services but for which services have not yet been provided as of March 31, 2001. The company expects this service to keep realizing sound growth going forward.

Data center services were also strong contributors to the steady revenue growth.

Expansion in Data Center Facilities

Following the completion of six multi-site data centers in 2000, Crosswave expanded its Tokyo data center, which has been fully booked as of the end of the third quarter, by adding 3,500 square meters (approximately 38,000 square feet) in late March 2001. Furthermore, to accommodate increasing demand from the Kyoto region, Crosswave announced in April its plans to open a Kyoto data center in October 2001. Crosswave continues working on development plans to build and operate data centers, including the large-scale Yokohama data center and SKIP data center located in Kawaguchi.

Outside of Japan, "AyalaPort Makati," Crosswave's data center joint venture in the Philippines with Ayala Group, is targeting service launch by the end of September 2001 with a floor space of approximately 1,900 square meters. Crosswave has another data center joint venture in Korea, "i-Heart", which is already operational.

Network Construction Progress

Crosswave's Phase II network construction has been progressing smoothly thus far. Crosswave commenced construction work on three routes in 2000. More than 90% of the Tokyo-Nagoya route (approximately 42,220 fiber miles) was already completed and the remaining portion of this route is expected to be completed near the end of June 2001. The Aomori-Yamagata (approximately 52,800 fiber miles) and the Kitakyushu-Kagoshima (approximately 65,000 fiber miles) routes are also expected to be completed near the end of June and August 2001, respectively. The completion schedule for these segments has been affected by the conduit construction schedule handled by the Ministry of Land, Infrastructure and Transport and the changes will not significantly impact the execution of Crosswave's business plan.

4Q00 Financial Results

Revenues:

Revenues totaled JPY 989 million, an increase of 601.8% from 4Q99 and 23.2% from 3Q00. Due to the customer base diversification, the percentage share of the revenues from Internet Initiative Japan, our 37.9% shareholder and largest customer, and its group companies decreased to less than 60% in 4Q00 compared to 86.2% in FY1999.

Revenue Breakdown
                                               (Unit: JPY million)
                                        4Q00       3Q00       4Q99

Wide-area Ethernet Platform Service      218        149          6
Total Network Services                   856        694        131
Data Center Services                     133        108         10

Operating expenses:

Cost of data communication services increased 51.3% from 4Q99 and 13.6% from 3Q00 to JPY 2,708 million. The QoQ increase was mainly due to the increase of data center operating cost and maintenance fees for the nationwide network.

Depreciation and amortization expenses increased to JPY 714 million, up 103.1% from 4Q99 and up 21.1% from 3Q00. The QoQ increase was mainly due to an increase in the depreciation of data center equipment.

Sales and marketing expenses increased to JPY 251 million, up 167.1% from 4Q99 and up 38.9% from 3Q00, mainly due to an increase in sales promotion expenses.

General and administrative expenses increased 55.2% from 4Q99 and 1.5% from 3Q00 to JPY 332 million. The YoY increase was mainly due to an increase in recruiting and personnel expenses.

Net loss:

Net loss for the quarter increased to JPY 2,932 million, up 22.6% from 4Q99 and up 23.8% from 3Q00. Basic net loss per ADS equivalent was JPY 29.21 for 4Q00. In addition to operating factors, gain on foreign currency exchange influenced net loss.

Adjusted EBITDA:

Adjusted EBITDA for the quarter was JPY (-) 2,302 million, compared to JPY (-) 1,956 million in 4Q99 and JPY (-) 2,089 million in 3Q00.

Capital Expenditures:

Capital Expenditures for the quarter amounted to JPY 2,062 million, which were mainly for the Phase II network construction.

Full Fiscal Year 2000 Financial Results

Revenues increased to JPY 2,629 million in FY2000 from JPY 232 million in FY1999.

Net loss increased 38.2% to JPY 10,847 million in FY2000 from JPY 7,849 million in FY1999.

Adjusted EBITDA amounted to JPY (-) 8,656 million in FY2000 compared to JPY (-) 6,818 million in FY1999.

Capital Expenditures amounted to JPY 9,760 million in FY2000 compared to JPY 13,414 million in FY1999. In FY2000 Capital Expenditures were primarily put towards nationwide network construction.

Company Information

Crosswave offers broadband data communications services through Japan's first nationwide fiber-optic network specifically designed for the high-speed transmission of data traffic. Crosswave currently operates six data centers nationwide. The Company was established in October 1998 by Internet Initiative Japan Inc., Sony Corporation and Toyota Motor Corporation with the goal of providing advanced, end-to-end data communications services to customers in Japan and to take advantage of demand for broadband data communications networks. Crosswave's executive offices are located at Crest Yasuda Bldg., 3-21, Kanda Nishiki-cho, Chiyoda-ku, Tokyo 101-0054.

Certain statements made in this press release that state Crosswave's or its management's intentions, beliefs, expectations, or predictions for the futures are forward-looking statements that are based on Crosswave's and its management's current expectations, assumptions, estimates and projections about its business and the industry it operates in. These forward-looking statements are subject to various risks, uncertainties and other factors that could cause Crosswave's actual results to differ materially from those contained in any forward-looking statements without limitation. These risks, uncertainties and other factors include: that we will not attract a high volume of data traffic; that we may not be able to complete our network development plans as scheduled or we may be forced to modify or abandon some or all of our plans if we are unable to obtain additional capital: that we have a limited operating history and may not be able to implement our business plan or complete proposed network constructing; that we may not be able to compete effectively, especially against competitors which have greater financial marketing and other resources than we do; and other risks referred to from time to time in Crosswave's filings with the Securities and Exchange Commission.

                   CROSSWAVE COMMUNICATIONS INC.            Appendix 1
           CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
For the Three Months Ended Mar 31, 2001, Mar 31, 2000 and Dec 31, 2000
          (Expressed in Thousands of Japanese Yen (JPY) and
      U.S. Dollars (USD) Except for Per Share and ADS Data) (1)

                         Year-over-year Comparison
              Mar 31, 2001                     Mar 31, 2000
                                  % of                % of
                                  Total               Total       YOY
            USD (1)      JPY    Revenues       JPY   Revenues    Chg %

Revenues:
Data
 communication
 services     7,875     988,592   100.0%    140,874    100.0%   601.8%

Cost and
 expenses:
Cost of data
 communication
 services    21,569   2,707,840   273.9   1,789,469  1,270.2     51.3
Depreciation
 and
 amortization 5,691     714,404    72.3     351,738    249.7    103.1
Sales and
 marketing    2,000     251,026    25.4      93,981     66.7    167.1
General and
 admini-
 strative     2,643     331,769    33.6     213,820    151.8     55.2

 Total
  cost and
  expenses   31,903   4,005,039   405.2   2,449,008  1,738.4     63.5

Operating
 gain (loss)(24,028) (3,016,447) (305.2) (2,308,134)(1,638.4)    30.7

Other income
 (expenses):
Gain (loss) on
 foreign
 currency
 exchange     2,504     314,431    31.8       9,991      7.1  3,047.1
Other        (1,893 )  (237,692)  (24.0)    (93,453)   (66.4)   154.3

 Income (loss)
  before
  income
  taxes     (23,417) (2,939,708) (297.4) (2,391,596)(1,697.7)    22.9

Minority
 interests in
 consolidated
 subsidiaries    62       7,712     0.8           -        -        -
Income taxes      -           -       -           -        -        -

 Net income
 (loss)     (23,355) (2,931,996) (296.6%)(2,391,596)(1,697.7%)   22.6%

Basic Net Loss
 Per Share               (5,841)             (9,479)
Basic Net Loss
 Per ADS
 Equivalent (2)          (29.21)             (47.39)
Weighted Average
 Number of
 Shares (3)             501,960             252,308
Weighted Average
 Number of ADS
 Equivalents
 (2 and 3)          100,392,000          50,461,538

Note(1): The translations of Japanese yen amounts into US dollar
         amounts with respect to the three months ended Mar 31, 2001
         are included solely for the convenience of readers outside
         Japan and have been made at the rate of JPY 125.54 = $1, the
         approximate rate of exchange on Mar 30, 2001.
Note(2): Each ADS is equal to 1/200th of a share of common stock.
Note(3): Crosswave issued additional 17,392,000 ADSs or ADS
         equivalents through Initial Public Offering in August 2000.
         Concurrently with this offering, 15,000 new shares of common
         stock, equivalent to 3,000,000 ADSs, were purchased by
         Internet Initiative Japan Inc. in a private placement in
         Japan.

                                      Sequential Comparison
                                         Dec 31, 2000
                                                % of
                                                Total        QOQ
                                 JPY         Revenues        Chg %

Revenues:
Data communication services     802,304       100.0%        23.2%

Cost and expenses:
Cost of data
 communication services       2,383,793       297.1         13.6
Depreciation and amortization   589,762        73.5         21.1
Sales and marketing             180,764        22.5         38.9
General and administrative      326,954        40.8          1.5

 Total cost and expenses      3,481,273       433.9         15.0

Operating gain (loss)        (2,678,969)     (333.9)        12.6

Other income (expenses):
Gain (loss) on foreign
 currency exchange              320,175        39.9         (1.8)
Other                           (12,298)       (1.5)     1,832.8

 Income (loss) before
  income taxes               (2,371,092)     (295.5)        24.0

Minority interests in
 consolidated subsidiaries        3,671         0.4        110.1
Income taxes                          -           -            -

 Net income (loss)           (2,367,421)     (295.1%)       23.8%

Basic Net Loss Per Share         (4,716)
Basic Net Loss Per
 ADS Equivalent (2)              (23.58)
Weighted Average Number
 of Shares (3)                  501,960
Weighted Average Number
 of ADS
 Equivalents (2 and 3)      100,392,000

Note(1): The translations of Japanese yen amounts into US dollar
         amounts with respect to the three months ended Mar 31, 2001
         are included solely for the convenience of readers outside
         Japan and have been made at the rate of JPY 125.54 = $1, the
         approximate rate of exchange on Mar 30, 2001.
Note(2): Each ADS is equal to 1/200th of a share of common stock.
Note(3): Crosswave issued additional 17,392,000 ADSs or ADS
         equivalents through Initial Public Offering in August 2000.
         Concurrently with this offering, 15,000 new shares of common
         stock, equivalent to 3,000,000 ADSs, were purchased by
         Internet Initiative Japan Inc. in a private placement in
         Japan.


                       CROSSWAVE COMMUNICATIONS INC.        Appendix 2
           CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
               For the Year Ended Mar 31, 2001 and 2000
 (Expressed in Thousands of Japanese Yen (JPY) and U.S. Dollars (USD)
                Except for Per Share and ADS Data) (1)

                         Year-over-year Comparison
                    Mar 31, 2001                Mar 31, 2000
                                   % of                 % of     YOY
                                   Total               Total     Chg
              USD (1)     JPY    Revenues      JPY    Revenues    %

Revenues:
Data
 communication
 services    20,939   2,628,655   100.0%    231,786    100.0% 1,034.1%

Cost and
 expenses:
Cost of data
 communication
 services    75,778   9,513,127   361.9   6,098,725  2,631.2     56.0
Depreciation
 and amort-
 ization     18,376   2,306,980    87.8     841,648    363.1    174.1
Sales and
 marketing    5,042     632,983    24.1     431,019    185.9     46.9
General and
 admini-
 strative     9,073   1,138,943    43.3     520,311    224.5    118.9

 Total cost
  and
  expenses  108,269  13,592,033   517.1   7,891,703  3,404.7     72.2

 Operating
  gain
  (loss)    (87,330)(10,963,378) (417.1) (7,659,917) (3,304.7)   43.1

Other income
 (expenses):
Gain (loss)
 on foreign
 currency
 exchange     4,405     553,001    21.1      10,121       4.4 5,363.9
Other        (3,598)   (451,766)  (17.2)   (199,498)    (86.1)  126.5

 Income (loss)
  before
  income
  taxes     (86,523)(10,862,143) (413.2) (7,849,294) (3,386.4)   38.4

Minority
 interests in
 consolidated
 subsidiaries   122      15,302     0.6           -         -       -
Income taxes      -           -       -           -         -       -

 Net income
  (loss)    (86,401)(10,846,841) (412.6%)(7,849,294) (3,386.4%)  38.2%

Basic Net
  Loss Per Share        (23,308)            (46,643)
Basic Net
 Loss Per
 ADS Equivalent (2)     (116.54)            (233.21)
Weighted Average
 Number of
 Shares (3)             465,366             168,285
Weighted Average
 Number of ADS
 Equivalents
 (2 and 3)           93,073,227          33,656,986

Note(1): The translations of Japanese yen amounts into US dollar
         amounts with respect to the year ended Mar 31, 2001 are
         included solely for the convenience of readers outside Japan
         and have been made at the rate of JPY 125.54 = $1, the
         approximate rate of exchange on Mar 30, 2001.
Note(2): Each ADS is equal to 1/200th of a share of common stock.
Note(3): Crosswave issued additional 17,392,000 ADSs or ADS
         equivalents through Initial Public Offering in August 2000.
         Concurrently with this offering, 15,000 new shares of common
         stock, equivalent to 3,000,000 ADSs, were purchased by
         Internet Initiative Japan Inc. in a private placement in
         Japan.


                    CROSSWAVE COMMUNICATIONS INC.           Appendix 3
                CONSOLIDATED BALANCE SHEETS (UNAUDITED)
          As of Mar 31, 2001, Mar 31, 2000 and Dec 31, 2000
            (Expressed in Thousands of Japanese Yen (JPY)
                      and U.S. Dollars (USD))(1)

               Mar 31, 2001         Mar 31, 2000      Dec 31, 2000
          USD (1)    JPY       %       JPY        %      JPY        %

ASSETS
Current
 assets:
Cash and
 cash
 equiv-
 alents  191,492  24,039,851  40.6% 12,239,362  43.6% 28,246,610  46.6%
Accounts
 receivable-
 net       6,649     834,717   1.4      60,895   0.2   2,454,826   4.0
Other current
 assets    8,461   1,062,243   1.8     346,747   1.2     855,883   1.4

 Total
  current
  assets 206,602  25,936,811  43.8  12,647,004  45.0  31,557,319  52.0

Property and
 equipment-
 net     249,864  31,368,009  53.0  15,005,373  53.4  28,011,343  46.2
Deposits and
 other
 assets   15,116   1,897,622   3.2     439,104   1.6   1,090,867   1.8

  Total  471,582  59,202,442 100.0% 28,091,481 100.0% 60,659,529 100.0%

LIABILITIES AND
 SHAREHOLDERS'
 EQUITY
Current
 liabilities:
Capital lease
 obligations-
 current
 portion  15,415   1,935,208   3.3   3,324,883  11.8   3,974,050   6.5
Accounts
 payable  38,519   4,835,728   8.2   1,905,927   6.8   1,634,440   2.7
Accrued
 expenses 42,908   5,386,713   9.1   2,803,665  10.0   4,861,310   8.0
Other
 current
 liabilities 254      31,849   0.1       5,223   0.0     107,128   0.2

 Total
  current
  liabil-
  ities   97,096  12,189,498  20.7   8,039,698  28.6  10,576,928  17.4

Capital lease
 obligations-
 non-
 current  73,538   9,231,915  15.6   8,129,617  29.0   9,286,558  15.3
Accounts
 payable-
 non-
 current  60,922   7,648,127  12.9           -     -   7,740,439  12.8
Other
 noncurrent
 liabilities 119      14,880   0.0           -     -           -     -

 Total
  liabil-
  ities  231,675  29,084,420  49.2  16,169,315  57.6  27,603,925  45.5

Minority
 interest    673      84,540   0.1           -     -      92,252   0.2

Shareholders'
 equity:
Common
 stock   242,907  30,494,526  51.5  19,854,796  70.7  30,494,526  50.3
Additional
 paid-in
 capital 145,912  18,317,795  30.9           -     -  18,317,795  30.2
Accumulated
 deficit(149,590)(18,779,471)(31.7) (7,932,630)(28.3)(15,847,475)(26.2)
Accumulated
 other
 comprehensive
 income        5         632   0.0           -     -      (1,494) (0.0)

 Total
  shareholders'
  equity 239,234  30,033,482  50.7  11,922,166  42.4  32,963,352  54.3

 Total   471,582  59,202,442 100.0% 28,091,481 100.0% 60,659,529 100.0%

Note(1): The translations of Japanese yen amounts into US dollar
         amounts with respect to Mar 31, 2001 are included solely for
         the convenience of readers outside Japan and have been made
         at the rate of JPY125.54 =$1, the approximate rate of
         exchange on Mar 30, 2001.


                      CROSSWAVE COMMUNICATIONS INC.         Appendix 4
      CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
For the Three Months Ended Mar 31, 2001, Mar 31, 2000 and Dec 31, 2000
             (Expressed in Thousands of Japanese Yen (JPY)
                      and U.S. Dollars (USD)) (1)

                          Mar 31, 2001      Mar 31, 2000  Dec 31, 2000
                        USD (1)       JPY         JPY          JPY

Operating Activities:
Net income (loss)      (23,355)   (2,931,996) (2,391,596)  (2,367,421)
Depreciation
 and amortization        5,691       714,404     351,738      589,762
Unrealized foreign
 currency exchange      (2,395)     (300,722)    (10,016)    (409,539)
  (gain) loss
Minority interest
 in net loss of
 consolidated
 subsidiaries              (62)       (7,712)          -       (3,671)
Decrease (increase)
 in accounts
 receivable              1,866       234,327     (39,385)    (498,770)
Decrease (increase)
 in other current
 assets                 (3,030)     (380,382)   (118,366)    (264,139)
Increase (decrease)
 in accounts
 payable                 3,272       410,734     695,071     (153,452)
Increase (decrease)
 in accrued expenses
 and other current
 liabilities             4,008       503,233     775,482      826,785
Increase (decrease)
 in other noncurrent
 liabilities               119        14,880           -            -

Net cash provided by
 (used in) operating
 activities            (13,886)   (1,743,234)   (737,072)  (2,280,445)

Investing Activities:
Purchase of property
 and equipment         (32,935)   (4,134,624)   (739,506)  (2,941,715)
Payments of deposits      (161)      (20,238)    (81,332)     (66,790)
Decrease (increase)
 in other assets, net        5           621     (73,716)     (70,764)
Proceeds from sale
 and lease/installment
 back                   14,274     1,791,956           -            -

Net cash provided by
 (used in) investing
  activities           (18,817)   (2,362,285)   (894,554)  (3,079,269)

Financing Activities:
Principal payments
 under capital leases   (3,680)     (461,930)   (292,284)    (430,908)
Principal payments
 under installment
 loans                    (735)      (92,312)          -            -
Proceeds from issuance
 of common stock             -             -  11,912,588            -
Stock offering
 expenses                    -             -           -     (211,296)

Net cash provided by
 (used in) financing
 activities             (4,415)     (554,242) 11,620,304     (642,204)

Effect of
 Exchange Rate
 Changes on Cash         3,609       453,002           -      529,250

Net Increase
  (Decrease)
  in Cash and
  Cash equivalents     (33,509)   (4,206,759   9,988,678   (5,472,668)

Cash and Cash
 equivalents
 at Beginning
 of Period             225,001    28,246,610   2,250,684   33,719,278

Cash and Cash
 equivalents
 at End of Period      191,492    24,039,851  12,239,362   28,246,610

Note(1): The translations of Japanese yen amounts into US dollar
         amounts with respect to the three months ended Mar 31, 2001
         are included solely for the convenience of readers outside
         Japan and have been made at the rate of JPY125.54 =$1, the
         approximate rate of exchange on Mar 30, 2001.


                     CROSSWAVE COMMUNICATIONS INC.          Appendix 5
      CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
               For the Year Ended Mar 31, 2001 and 2000
             (Expressed in Thousands of Japanese Yen (JPY)
                      and U.S. Dollars (USD)) (1)

                                       Mar 31, 2001       Mar 31, 2000
                                    USD (1)      JPY          JPY

Operating Activities:
Net income (loss)                   (86,401) (10,846,841)  (7,849,294)
Depreciation and amortization        18,376    2,306,980      841,648
Unrealized foreign currency
 exchange   (gain) loss              (5,106)    (641,051)     (10,016)
Minority interest in net loss of
 consolidated subsidiaries             (122)     (15,302)           -
Decrease (increase) in accounts
 receivable                          (4,650)    (583,734)     (60,895)
Decrease (increase) in other
 current assets                      (6,557)    (823,162)    (274,087)
Increase (decrease) in accounts
 payable                             (4,538)    (569,649)     585,102
Increase (decrease) in accrued
 expenses and other current
 liabilities                         20,902    2,624,055    2,784,331
 Increase (decrease) in other
 noncurrent liabilities                 119       14,880            -

Net cash provided by (used in)
  operating activities              (67,977)  (8,533,824)  (3,983,211)

Investing Activities:
Purchase of property and equipment  (90,235) (11,328,145)  (6,858,941)
Payments of deposits                 (4,979)    (625,110)    (295,927)
Decrease (increase) in other
 assets, net                         (1,092)    (137,077)    (102,040)
Proceeds from sale and
 lease/installment  back             33,098    4,155,161    5,534,639

Net cash provided by (used in)
  investing activities              (63,208)  (7,935,171)  (1,722,269)

Financing Activities:
Principal payments under capital
 leases                             (13,138)  (1,649,325)    (627,759)
Principal payments under
 installment loans                     (735)     (92,312)           -
Proceeds from issuance of
 common stock                       233,940   29,368,896   13,500,862
Proceeds from minority
 shareholders                           797      100,000            -
Stock offering expenses              (3,221)    (404,357)           -

Net cash provided by (used in)
  financing activities              217,643   27,322,902   12,873,103

Effect of Exchange Rate Changes
 on Cash                              7,540      946,582            -

Net Increase (Decrease) in
  Cash and Cash equivalents          93,998   11,800,489    7,167,623

Cash and Cash equivalents
  at Beginning of Period             97,494   12,239,362    5,071,739

Cash and Cash equivalents
  at End of Period                  191,492   24,039,851   12,239,362


Note(1): The translations of Japanese yen amounts into US dollar
         amounts with respect to the year ended Mar 31, 2001 are
         included solely for the convenience of readers outside Japan
         and have been made at the rate of JPY125.54 =$1, the
         approximate rate of exchange on Mar 30, 2001.