At Eli Lilly and Company, our values and our strategy have shaped our commitment to protect both the natural environment and the health and safety of employees. Our environmental goals support the company's mission to help people worldwide live longer, healthier, more active lives. Our health and safety imperative reflects our recognition that Lilly people are indeed the source of all our expertise, commitment, and innovation. Consequently, I am delighted to report that we continue to make progress in both areas.

As the data here show, our environmental results have improved significantly during the past decade. For instance, we are very pleased with our progress in reducing air emissions by almost 90% from our operations in the United States as reported under the SARA Title III requirements since reporting began in 1987.

Yet, we have opportunities for further environmental progress. We are redoubling our efforts to replicate our best practices throughout our global operations. Accordingly, we are well on our way to implementing consistent environmental management systems at Lilly sites worldwide. We also continue to apply new environmental technologies that protect our employees and the communities where we do business. It is important to note that, as we improve our environmental performance, we frequently achieve efficiencies that directly support our financial results as well.

Our pursuit of an injury-free workplace is a key element of one of our corporate objectives. We have taken great strides in this area that were recently confirmed by the U.S. Chemical Manufacturers Association and the National Safety Council, which recognized us for cutting serious accidents by 45 percent during the past five years.

To help us build on this momentum, we commissioned Arthur D. Little, Inc., to review our current health and safety efforts. The consultants said we should continue to increase management support for this priority, focus on integrating it into all our key business processes, and ensure that it becomes an element of performance evaluation at Lilly. We are addressing these recommendations and - most importantly - our injury rates are falling. This reflects our concern about our colleagues' well-being. It also acknowledges that healthy, productive Lilly employees will ultimately determine our success in a knowledge-driven business where people are the source of our competitive strength.

Looking ahead, we are intent on achieving world-class results in our environmental and health and safety performance. With growing support by Lilly people worldwide, we are continuing to pursue excellence in both areas - as we are in all essential areas of our business.

Sidney Taurel
President and Chief Executive Officer