Environmental

We have chosen to set our emissions goal as a percent of solvent usage because of the high volume of solvents that are recovered and used multiple times in our processes. We believe that our goal of 1% loss is nearing industry best practice status considering that many of the solvents that we use are extremely volatile (e.g. methylene chloride.)

* Establishing specific water usage targets is an objective for 2002.

More than three-fourths of total energy usage is in Indiana. While much has been done during the past decade to reduce energy usage, it is recognized that specific targets need to be set to drive further improvement.

Although Lilly takes every precaution to prevent the accidental release of materials to the environment, there are occasions when releases do occur. Provisions for such incidents are made in advance to ensure that we minimize the potential for adverse affects on our employees, contractors, plant communities, and the environment.

The company's global CO₂ and SO₂ emissions represent less than half of what would be emitted by a medium size coal-fired generating plant.

* Priority is given to treating solid waste byproducts in Lilly-operated incinerators.

We recover spent solvents as manufacturing requirements allow and if equipment is available. If recovery is not possible, liquid waste is treated in thermal oxidizers. The above data does not include water effluents to or from biological wastewater treatment operations.

Methylene chloride is a common solvent used in the pharmaceutical industry. Significant progress has been made in reducing emissions of this extremely volatile liquid.

Lilly manufacturing and Research and Development (R&D) facilities are required to annually report emissions of certain chemicals from a list of approximately 600 maintained by the U.S. EPA. We have made significant progress in reducing these emissions.

* The total for 1997 includes $1,000,000 related to the TSCA CAP program.

The largest numbers of complaints each year were from neighbors living near our Speke, UK manufacturing site. These complaints concerned odors emanating from fermentation processes. Capital projects have been approved to address this issue.

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