<PAGE>
 
                                     1996
================================================================================

                      SECURITIES AND EXCHANGE COMMISSION
                           Washington, D.C.   20549
                        ______________________________

                                   FORM 10-K

[X]     Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange
        Act of 1934

                  For the fiscal year ended December 31, 1996

[ ]     Transition Report Pursuant to Section 13 or 15(d) of the Securities
        Exchange Act of 1934

                        Commission File Number 1-10599
                        ______________________________

                         AMERICAN WASTE SERVICES, INC.
            (Exact name of registrant as specified in its charter)

                  Ohio                                 34-1602983
      (State or other jurisdiction                  (I.R.S. Employer
   of incorporation or organization)              Identification No.)

     One American Way, Warren, Ohio                    44484-5555
(Address of principal executive offices)               (Zip Code)

      Registrant's telephone number, including area code:  (330) 856-8800

          Securities registered pursuant to Section 12(b) of the Act:

                                                           Name of Each Exchange
        Title of Each Class                                 on Which Registered
        -------------------                                ---------------------
Class A Common Stock, no par value                       New York Stock Exchange

          Securities registered pursuant to Section 12(g) of the Act:

                                     None

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.  [X]

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

The aggregate market value of Class A Common Stock of the registrant held by
non-affiliates on February 3, 1997 was $45.2 million.  Assuming that the market
value of the Company's Class B Common Stock was the same as its Class A Common
Stock by reason of its one-to-one conversion rights, the market value of Class B
Common Stock of the registrant held by non-affiliates on February 3, 1997 was
$.4 million. The registrant had 25,298,423 shares of its Class A Common Stock
and 5,126,743 shares of its Class B Common Stock outstanding as of March 3,
1997.

                      Documents Incorporated by Reference

1. Portions of American Waste Services, Inc. Annual Report to Shareholders for
   the year ended December 31, 1996 (Parts I and II of Form 10-K).
2. Portions of American Waste Services, Inc. Proxy Statement dated March 21,
   1997 (Part III of Form 10-K).

================================================================================
<PAGE>
 
                AMERICAN WASTE SERVICES, INC. AND SUBSIDIARIES
                       _________________________________


As used in this report, the terms "AWS," "Company," and "Registrant" mean
American Waste Services, Inc. and its wholly owned subsidiaries, taken as a
whole, unless the context indicates otherwise.

                       _________________________________

                               TABLE OF CONTENTS

<TABLE> 
<CAPTION> 
Part I
                                                                                                                                Page

                                                                                                                                ----

<S>                                                                                                                             <C> 

 Item 1.     Business.........................................................................................................     1

 Item 2.     Properties.......................................................................................................    12

 Item 3.     Legal Proceedings................................................................................................    13

 Item 4.     Submission of Matters to a Vote of Security Holders..............................................................    14


 Executive Officers of the Registrant.........................................................................................    14


Part II
 Item 5.     Market for the Registrant's Common Equity and Related Stockholder Matters........................................    15

 Item 6.     Selected Financial Data..........................................................................................    15

 Item 7.     Management's Discussion and Analysis of Financial Condition and Results
             of Operations....................................................................................................    15

 Item 8.     Financial Statements and Supplementary Data......................................................................    15

 Item 9.     Changes in and Disagreements with Accountants on Accounting and
             Financial Disclosure.............................................................................................    15


Part III
 Item 10.    Directors and Executive Officers of the Registrant...............................................................    16

 Item 11.    Executive Compensation...........................................................................................    17

 Item 12.    Security Ownership of Certain Beneficial Owners and Management...................................................    17

 Item 13.    Certain Relationships and Related Transactions...................................................................    17



Part IV
 Item 14.    Exhibits, Financial Statement Schedules, and Reports on Form 8-K.................................................    18


Signatures....................................................................................................................    20

</TABLE> 
 
                      Note on Incorporation by Reference

Throughout this report various information and data are incorporated by
reference from the Company's 1996 Annual Report to Shareholders (hereinafter
referred to as the "Annual Report to Shareholders").  Any reference in this
report to disclosures in the Annual Report to Shareholders shall constitute
incorporation by reference of that specific material into this Form 10-K.
<PAGE>
 
                                    PART I

ITEM 1.  BUSINESS

General
-------

  The Company was incorporated in Ohio in August 1988 under the name American
Acquisition Corporation.  In March 1990, the name of the Company was changed to
American Waste Services, Inc.

  In December 1989, after the Company obtained the approval of the Ohio
Environmental Protection Agency (the "Ohio EPA") for the transfer of ownership,
the Company acquired the stock of what is now American Landfill, Inc., a
nonhazardous waste disposal facility.  In January 1990, the Company acquired
AWMS, Inc., a hazardous and nonhazardous waste brokerage and management
business; Envirco Transportation, Inc., a hazardous and nonhazardous waste
transporter;  Envirco Transportation Management, Inc., a waste transportation
brokerage and management business; and DartAmericA, Inc., a hazardous and
nonhazardous waste transporter and common carrier.

  In October 1990 the Company acquired its environmental consulting, laboratory
and remediation companies:  Earth Sciences Consultants, Inc., Antech Ltd., and
AWS Remediation, Inc. (formerly known as CRS, Inc.).  These technical
environmental firms are referred to collectively as the "Earth Sciences
Companies."

  In January 1992, following the Ohio EPA's approval, the acquisition of
Mahoning Landfill, Inc. ("MLI"), a nonhazardous solid waste disposal facility,
was consummated.  Since January 1990, the Company had managed the facility
pending approval by the Ohio EPA of the transfer of ownership.

  In March 1993, the Company through East Liverpool Landfill, Inc. ("ELLI")
acquired the East Liverpool landfill, a nonhazardous solid waste disposal
facility, from the City of East Liverpool, Ohio (the "City").  Since February
1990, ELLI had operated the East Liverpool landfill pending approval by the Ohio
EPA of the transfer of ownership and issuance of a Permit To Install ("PTI").

  During the third quarter of 1996, the Company, through newly organized
subsidiaries, American Waste, Inc., American Waste of Mahoning Valley, Inc., and
America Waste of Northeast Ohio, Inc., started commercial collection operations
with the intent to begin residential collection in the future.

  The Company's primary business segment provides integrated waste management
and environmental services, including disposal, collection, technical,
transportation and disposal brokerage and management services, to industrial,
commercial, municipal and governmental customers primarily in selected eastern
and midwestern U. S. markets.  The Company's principal activities include the
operation of nonhazardous solid waste landfills in Ohio for the disposal of
special waste and municipal solid waste; transportation of hazardous and
nonhazardous waste; transportation and disposal brokerage and management
services; collection services; and environmental engineering, site assessment,
analytical laboratory and remediation services.  The Company, as part of its
transportation business, also operates a second business segment: a common
carrier of general and bulk commodities within the United States and several
provinces of Canada.  See "Business Segment Information" on page 23 of Annual
Report to Shareholders, which is incorporated herein by reference, for financial
information relating to business segments.

Waste Disposal Services
-----------------------

  It is the Company's policy to make its landfills available, on a priority
basis: first, for waste generated by the local communities in which its
landfills are located; and second, for the state's disposal needs.  Any
remaining capacity is utilized for out-of-state waste. The  Company believes
this policy has enabled it to maintain good relations with the communities in
which its landfills operate and governmental authorities.  During 1996, 1995,
and 1994 approximately 78%, 66% and 65%, respectively, of the waste received by
its landfills was generated in the State of Ohio.

  The Company's landfills accept municipal solid waste and special waste for
disposal.  Special waste is waste material that is neither refuse nor garbage,
nor hazardous waste.  Special waste includes continuously generated material
such as nonhazardous industrial waste products (including those produced by air
and water pollution control processes), combustion ashes, and industrial and
municipal sludges. The

                                       1
<PAGE>
 
Company also considers material removed from a site as part of a remediation
project (such as asbestos or soils contaminated with petroleum or certain other
chemicals), tires and demolition debris as special waste. Special waste does not
require the extensive and costly treatment and sealed containment required for
hazardous waste. Proper transportation, treatment and disposal of special waste
does, however, require the technical expertise to determine that the material is
in fact nonhazardous, because the failure to accurately identify the waste can
expose the generator and the waste disposal facility to substantial liability.
The Company relies on its management and other key personnel, with their
professional and technical backgrounds, in both the nonhazardous and hazardous
waste industry, to provide this technical expertise.

Facilities

  The Company, through wholly owned subsidiaries, owns three nonhazardous solid
waste disposal facilities in Ohio operated by American Landfill, Inc. ("ALI"),
Mahoning Landfill, Inc. ("MLI"), and East Liverpool Landfill, Inc. ("ELLI"). ALI
also owns and operates the Company's tire monofill and the Company's liquid
solidification facility which has the capacity to accept and properly solidify
in excess of 50,000 gallons per day of nonhazardous liquid wastes. Following is
information as to the location, approximate total property acres, permitted
facility acres and currently permitted daily waste receipt limits of the
Company's disposal facilities.

<TABLE> 
<CAPTION> 
                                                        Total    Permitted  Permitted Daily
                                                       Property  Facility        Waste
     Landfill                         Location          Acres      Acres     Receipt Limit
     --------                         --------         --------  ---------  ---------------
                              
<S>                             <C>                    <C>       <C>        <C> 
American Landfill               Waynesburg, Ohio            870        510    8,000  tons
Tire Monofill                   Waynesburg, Ohio             80         80      492  tons
Mahoning Landfill               New Springfield, Ohio       200        120    2,500  tons
East Liverpool Landfill         East Liverpool, Ohio        200        150    1,500  tons
</TABLE>

  In May 1996, ALI received an expansion permit that increased the disposal
capacity of the landfill to approximately 23 million cubic gross air yards,
thereby significantly increasing the life of the landfill.  During 1996, 1995
and 1994 ALI operated, on average, at approximately 52%, 50% and 52%,
respectively, of its permitted daily waste receipt limit.  Municipal solid waste
represented approximately 60%, 54% and 56%, respectively, and special waste
represented approximately 40%, 46% and 44%, respectively, of the total volume of
waste disposed of at ALI during 1996, 1995 and 1994.

  Under Ohio law and related regulations, whole scrap tires as well as shredded
scrap tires are no longer permitted to be disposed of in sanitary landfills.  In
August of 1992, the Ohio EPA issued to ALI, Ohio's first PTI for a tire
monofill.  ALI, which acquired tire shredding and related equipment, began
operating the tire monofill in January 1995.  The tire monofill, which is
located adjacent to the American landfill, has a permitted daily capacity of 492
tons and is expected to have the capacity to dispose in excess of 75 million
shredded tires.

  The Company completed construction of a landfill gas extraction facility at
its American landfill and began production in September 1996.  The production
and sale of the landfill gas is expected to entitle the Company to quality for
tax credits from the production of fuel from a nonconventional source.

   On March 1, 1995, the Company received a final Permit to Install ("PTI") from
the Ohio EPA to upgrade the Mahoning landfill facility to comply with "best
available technology" standards.  The final PTI increased Mahoning Landfill,
Inc.'s daily waste receipts limit to 2,500 tons per day from 1,500 tons per day
and increased the Mahoning landfill's total capacity to approximately 10 million
cubic gross air yards.  In 1994 MLI operated, on average, at approximately 49%
of its permitted daily waste receipt limit of 1,500 tons per day.  In 1996 and
1995 MLI operated, on average, at approximately 21% and 20%, respectively, of
its permitted daily waste receipt limit of 2,500 tons per day.

  In light of market conditions, regulatory requirements and other business
factors, in 1995 ELLI determined that the significant capital investment
necessary to develop the East Liverpool landfill facility in the foreseeable
future was not economically justified.  Although this facility has permitted
capacity of

                                       2
<PAGE>
 
approximately 13.7 million cubic gross air yards, as a result of the decision
not to further develop the facility in the foreseeable future, it has very
limited airspace currently available for waste disposal. The Company
significantly reduced the quantity of waste accepted for disposal commencing in
July 1996. In 1995 and 1994 the East Liverpool landfill operated, on average, at
approximately 28% and 32%, respectively, of its current permitted daily waste
receipt limit. Both municipal solid waste and special waste are disposed of at
the East Liverpool landfill.

  The Company estimates that the remaining permitted disposal capacity of its
facilities is approximately 31.9 million cubic gross air yards.  Such overall
disposal capacity does not include approximately 13.6 million cubic gross air
yards of permitted capacity at the Company's East Liverpool landfill which the
Company does not intend to develop in the foreseeable future.  The relationship
of the compactability and weight of waste to the amount of air space utilized to
dispose of the waste can vary significantly between different categories of
waste which otherwise meet the Company's permits and disposal standards.  As a
result, the actual volume of waste (measured in either cubic yards or tons) that
the Company is able to dispose of will depend upon the mix of waste accepted,
its weight and compactability, operating practices and the airspace utilized by
cover material.  The Company does not have any guidelines respecting acceptance
of waste based upon compactability and accepts all categories of waste which
otherwise meet its permit and disposal standards.

Waste Disposal Operations
-------------------------

  The Company's landfill customers are charged a tipping fee for the waste
disposed of at the facility.  The volume of waste received by the Company's
landfills is somewhat seasonal with generally greater amounts of waste received
in the warmer months.  Additionally, the volume of waste received by the
Company's landfills is somewhat dependent on general economic conditions.
Restrictions or impediments (including increased governmental fees) on the
acceptance of waste could adversely affect the Company's disposal revenues.

  Waste Monitoring.  Because waste generators remain liable for their waste both
before and after disposal, they require assurances that their waste will be
safely and properly transported, treated and disposed.  To give customers this
confidence, as well as to limit its own potential liability, the Company has
instituted procedures designed to minimize the risks of improper handling or
disposal of waste.

  Prior to acceptance of special waste for disposal, a potential customer must
complete a detailed questionnaire  setting forth the amount, chemical
composition and any special characteristics for each separate waste to be
disposed in a Company landfill.  Representative samples of the waste are
analyzed by a laboratory selected from a Company-approved list of state or
federally certified laboratories.  In some cases, additional samples will be
taken for analysis by the Company.  In addition, a Company representative
generally inspects the process generating the waste, the location where the
waste may be temporarily stored or the site of the remediation project producing
the waste, and interviews representatives of the generator familiar with the
waste.  This inspection, along with the laboratory results, allows the Company
to determine whether the waste is within acceptable parameters for disposal in
its facilities, and if so, what special handling and treatment procedures must
be instituted.  If the waste is continuously generated, new representative
samples are tested on a periodic basis.

  These procedures are important to both the Company and its customers since the
key to proper handling of special waste is accurate identification.  Hazardous
waste which is not identified as such and thus improperly disposed can result in
substantial liability to the waste generator and the disposal facility, and
potentially to all other waste generators that have used the disposal site.
Conversely, waste that could safely and legally be disposed of in a solid waste
landfill but is instead sent to a hazardous waste facility for treatment and
disposal will result in substantial and unnecessary expense to the generator.

  If the waste is identified as hazardous or requires special treatment that the
Company is unable to provide, or contains levels of any of a large list of toxic
or otherwise dangerous chemicals that the Company has determined are
unacceptable for its facilities, the Company will not accept the waste for
disposal at its facilities.  American Waste Management Services, Inc. ("AWMS"),
the Company's waste disposal brokerage subsidiary, can assist customers to
direct wastes to alternative, approved treatment and disposal sites if those
wastes cannot be accepted into a Company facility.  Additionally, even if a
waste is within acceptable parameters for disposal at its landfills, the
Company's brokerage operations may direct the waste to an unaffiliated site
better suited to a customer's location.

                                       3
<PAGE>
 
  The Company manages the transportation of substantially all special waste
accepted for disposal in its facilities, by utilizing either the Company's
transportation equipment or Company-approved carriers.  See Item 1.
"Transportation Services."  Managing the transportation ensures the integrity
and reliability of the transporter, verifies the type of waste loaded for
delivery and regulates the flow of trucks into the landfills.  The Company
assigns a waste identification number to each special waste accepted for
disposal in one of its facilities, and provides the customer with preprinted
transportation manifests bearing such number.  Each transportation manifest
provides for certification by the waste generator that the waste delivered to
the carrier conforms to the waste previously approved for disposal.  The
manifest is also signed by the carrier upon pickup and by the landfill upon
delivery, and a signed copy is returned to the customer.  Accordingly, each
truckload of special waste can be traced from waste generator to disposal at the
landfill, and the customer can be assured that its waste has been properly
transported and disposed.

  At the landfills, the Company's employees visually inspect each truckload of
special waste for any nonconformity with the waste identified by the waste
number appearing on the manifest.  In addition, periodic testing and analysis of
waste on a random basis is performed.  If it appears that the material in the
truck does not conform to the specifications of the approved waste or is
unacceptable for any other reason, the Company will not accept the waste for
disposal.

  Residential and commercial garbage and refuse is delivered to the landfills
for disposal either directly after collection, or in certain cases, from
regional transfer stations.  In addition, individuals will occasionally bring
small loads of garbage or refuse to the facilities.  Employees of the Company
visually inspect all garbage and refuse at the landfill for any irregularities
which would warrant further investigation or rejection.

  Cell preparation; Waste Disposal; Cell Closure.  The Company disposes of
special waste and municipal solid waste at its landfill facilities in a series
of "cells", which it prepares by excavating earth to a layer of naturally
present clay.  This clay is highly impermeable and thus prevents liquids from
seeping through the base of the landfill and mixing with the groundwater.
ALI's, MLI's and ELLI's permits, as well as The United States Environmental
Protection Agency's "Subtitle (D) Regulations," require the use of a composite
liner system consisting of clay and synthetic materials and a leachate
collection system in connection with the construction of new cells where no
previous waste placement activities have occurred.  Cell preparation procedures
at the Company's disposal facilities shall comply with such requirements and
their respective permits.

  The Company's employees direct trucks to deposit their waste at the "working
face" of the currently operating cell where the waste is again inspected prior
to special equipment spreading and compacting the deposited material into the
cell.  Most special waste and municipal solid waste is deposited upon its
arrival at the landfill into the presently operating cell.  Certain wastes,
however, require special treatment and/or segregated disposal.  For example,
Ohio law prohibits solid waste landfills from accepting waste containing free
liquids.  ALI operates a solidification facility, under a special permit from
the Ohio EPA, which solidifies liquid waste so that it can then be disposed of
in the landfill.  In addition, ALI currently operates, under a special permit
from the Ohio EPA, single purpose cells for sealed containers of asbestos, which
are disposed of using special procedures to avoid the release of fibers.

  At the end of each day, the Company covers the waste deposited in each cell
with either a layer of earthen material, which applicable regulations require be
at least six inches thick, or an approved synthetic daily cover.  Use of
synthetic daily cover provides more efficient utilization of disposal capacity.
Once a portion of a landfill reaches its permitted capacity, or is otherwise
closed, it is covered with clay, synthetic material, topsoil, other earthen
materials and vegetation in accordance with applicable permits, licenses and
regulations.

  In 1994, the Director of the Ohio EPA promulgated rules restricting the
disposal of yard waste in sanitary landfills.  In order to continue to provide
yard waste management services to our customers, the Company operates a Class IV
yard waste composting facility at its American landfill and has instituted yard
waste restriction programs at all three landfill facilities.

  The United States Environmental Protection Agency's  "Subtitle (D)
Regulations" provide minimum design, construction and operating standards for
virtually all landfills in the United States.  Furthermore, regulations
promulgated by the Ohio EPA require every Ohio landfill to utilize the "best
available

                                       4
<PAGE>
 
technology" with respect to cell preparation and lining, leachate collection and
treatment, and groundwater monitoring as well as to provide financial assurances
adequate to cover closure costs and post-closure monitoring costs for a period
of up to 30 years after the landfill is closed. The Company estimates that such
upgrading, which will be implemented over the life of the landfills as the
Company closes presently operating cells and prepares new ones for use, will
increase the expense of cell preparation to approximately $200,000-$300,000 per
acre. The Company presently performs groundwater monitoring at all of its
landfills in compliance with applicable law and regulations and requirements of
regulatory agencies. See Item 1. "Environmental Regulations."

  As a result of federal and state laws and regulations, the Company has future
financial obligations with regard to closure costs and post-closure monitoring
costs associated with the disposal sites it operates.  Although the precise
amount of these future obligations cannot be determined, the Company has
developed procedures to estimate such total projected costs based on currently
available facts, existing technology and presently enacted laws and regulations.
As of December 31, 1996, the Company estimates that the total closure costs and
post-closure monitoring costs it will incur for all of its disposal facilities
is approximately $31.2 million; however, in accordance with Ohio's financial
assurance regulations, the Company currently estimates that it will be required
to ultimately provide $32.5 million of financial assurances to the State of Ohio
relating to such costs.   The Company utilizes insurance to satisfy the
financial assurance requirements for its American and Mahoning landfill
facilities and utilizes a trust fund to satisfy the financial assurance
requirements for its East Liverpool landfill facility.

Transportation Services
-----------------------

General

  The Company transports waste and other products on behalf of customers within
the United States and portions of Canada, and provides transportation brokerage
and management services.  The Company's transportation operations have the
equipment and the expertise to transport virtually all types of waste and
commodity products.  In addition the Company provides intermodal transportation
services.

  The Company estimates that approximately 7%, 7% and 10% of the net operating
revenue of the integrated waste management and environmental services segment
involved hauling waste to the Company's landfills during 1996, 1995 and 1994,
respectively.  The Company also transports hazardous waste to waste treatment
and disposal facilities owned by third parties.  In providing this service, the
Company utilizes a variety of trucks, dump trailers, tankers and other equipment
specially designed and constructed to transport hazardous waste.  All drivers
engaged in the transportation of hazardous waste for the Company have completed
all training mandated by applicable governmental regulations.  Each driver also
attends safety meetings on approximately a quarterly basis and each possesses
all required governmental certificates.  The transportation of hazardous waste
represented approximately 20%, 22% and 19% of the net operating revenue of the
integrated waste management and environmental services business segment in 1996,
1995 and 1994, respectively.  Carriers of hazardous waste can be held
responsible under environmental laws and regulations for improper handling of
such waste.  See Item 1. "Environmental Regulations."

  As is the case with any transportation company, an increase in fuel prices may
subject the Company to increased operating expenses, which the Company may not
be able to pass on to its customers.  Restrictions or impediments to the
interstate transportation of waste or the acceptance of out-of-state waste for
disposal at the Company's landfills could adversely affect the Company's
transportation revenues.

DartAmericA, Inc. ("Dart")

  Through Dart and its subsidiaries, the Company is engaged in the
transportation of waste and is a common carrier of both general and bulk
commodities.  Dart, which commenced operations in 1965, also engages in the
brokerage of transportation.

  Dart is a fully licensed hazardous and nonhazardous waste carrier.
Approximately 59%, 62% and 63% of the revenue generated by Dart in 1996, 1995
and 1994, respectively, related to the transportation of waste.  Hazardous waste
represented 66%, 66% and 65% of Dart's waste transportation revenues in 1996,
1995 and 1994, respectively.

                                       5
<PAGE>
 
  Dart, which is licensed as a common carrier in 49 states and several provinces
of Canada, derived 41%, 38%, and 37% of its revenues in 1996, 1995 and 1994,
respectively, from the transportation of bulk commodities, such as coal, salt,
sand and ash, as well as steel products and heavy machinery. A common carrier
engaged in the transportation of goods owned by others is subject to federal and
state regulations which establish operating and safety standards. Carriers are
liable for loss of or damage to goods entrusted to their care. Public liability
and property damage insurance is compulsory.

  A majority of the truck power units, and a substantial number of the trailers,
used by Dart are owned and operated by independent truckers who receive a
negotiated percentage of the gross revenue from the carriage.  Most of the
approximately 125-150 independent truckers who provide services for Dart have
been doing so for a number of years.  These independent truckers pay for fuel
and all other expenses with the exception of insurance, hazardous waste permits,
special equipment required to carry hazardous waste and other safety equipment,
all of which are provided by Dart.  Equipment used by the independent truckers
is inspected at least annually and is subject to random inspections by Dart.
See Item 2. "Properties."

  Dart leases roll-off containers to customers which fill the containers with
waste as it is generated.  Using specially designed trailers, Dart periodically
picks up and replaces the containers, which it transports to the Company's
landfills or other approved facilities for disposal.  As is the case with any
waste accepted for disposal at a Company facility, the Company carefully
monitors the waste deposited in the roll-off containers. See Item 1. "Waste
Disposal Operations."  All hazardous waste is transported by roll-off trailers,
specialized tanker, van, dump or flatbed trailers to treatment and disposal
facilities owned by third parties.  See Item 2. "Properties."

Envirco Transportation, Inc. ("ETI")

  The Company's subsidiary, ETI, commenced its waste transportation operations
in 1981.  During 1994, ETI ceased operations.  ETI was a fully licensed,
specialized hazardous and nonhazardous waste transporter operating primarily in
the regional markets of Ohio, Pennsylvania, West Virginia, Illinois, Kentucky,
Michigan, and Indiana.

  For the year 1994 approximately 31% of ETI's transportation revenues related
to waste classified as hazardous.  The revenues related to special waste
approximated 69%.

Envirco Transportation Management, Inc. ("ETMI")

  ETMI provides waste transportation brokerage and management services to a
variety of customers.  ETMI's operations are primarily engaged in securing
transportation, through Dart or otherwise, for special waste destined for the
Company's landfills.  ETMI also arranges transportation of waste to other
disposal sites which are better suited to the customer's location or which are
equipped to accept and treat hazardous waste or other waste that the Company's
landfills do not accept.  The Company maintains lists of approved transporters,
which it periodically reviews and updates, and the Company will only engage
transporters that it believes are reliable and efficient in providing the
services required in accordance with the Company's standards.

Collection Services
-------------------

  During the third quarter of 1996, the Company, through newly organized
subsidiaries, American Waste, Inc., American Waste of Mahoning Valley, Inc., and
America Waste of Northeast Ohio, Inc., started commercial collection operations
with the intent to begin residential collection in the future.  The Company
initially intends to target local markets in which the Company's American and
Mahoning landfills are located.  The Company expects its collection operations
to provide its disposal facilities with municipal solid waste which the
Company's landfills may not otherwise receive.

Consulting, Analytical and Remedial Services
--------------------------------------------

  The Earth Sciences Companies provide a wide range of technical environmental
services including environmental impact studies, landfill design, permitting,
site assessments, waste management and minimization consulting, laboratory
services, environmental site remediation and environmentally related

                                       6
<PAGE>
 
construction activities including removal of underground storage tanks,
remediating Superfund sites and conducting landfill closure and decommissioning.
These companies also provide hazardous and nonhazardous waste management,
groundwater remediation, and underground storage tank management.  The Earth
Sciences Companies are often engaged to perform a remedial
investigation/feasibility study ("RI/FS"), which first entails performing a site
assessment involving the gathering of samples from the contaminated site,
followed by laboratory analysis to establish or verify the nature and extent of
the contaminants. Alternative solutions to remedy the particular problem are
then developed, evaluated and presented to the client. The Earth Sciences
Companies are equipped to implement the mitigation and decontamination program
then selected by the client and approved by the appropriate regulatory agency.
In implementing such a program, the Earth Sciences Companies may employ the
Company's transportation, disposal and/or brokerage services. The Earth Sciences
Companies also possess the expertise to perform the evaluation and analysis
necessary to advise clients respecting compliance with federal and state
environmental regulations, and have assisted clients in developing waste
management and compliance policies, including the development of plans for waste
minimization and disposal. The Earth Sciences Companies also provide services
related to evaluation of the environmental condition of real estate for law
firms, banks or potential purchasers.

  The Earth Sciences Companies also provide comprehensive organic, inorganic and
radiochemical laboratory services including water and waste water analyses,
waste characterization, sludge, soil and rock analyses and related bench studies
for waste water treatment and process design.

  The Earth Sciences Companies have extensive experience in siting, designing,
constructing, monitoring and performing closure of landfills.  As a result, the
Company has utilized the Earth Sciences Companies to expand the permitted
capacity of its landfills, to obtain permits for the design and development of
new sites by providing the required scientific, engineering and support
services.

  The Earth Sciences Companies complement the Company's other operations in
several ways.  A waste generator desiring to dispose of a waste in the Company's
landfills may obtain the required laboratory analysis of the waste from the
Earth Sciences Companies.  In addition, consulting and remediation operations of
the Earth Sciences Companies can generate both transportation and disposal
business for the Company, because such projects frequently involve the removal
and disposal of a waste product.  The Earth Sciences Companies can also assist
in the design, construction and maintenance of permitted on-site disposal
facilities for the Company's customers.

  In 1996, 1995 and 1994, the Earth Sciences Companies derived approximately
96%, 95% and 90%, respectively, of their revenues from environmental
assessments, RI/FS's, industrial consulting, site remediation and other
laboratory analyses services, and 4%, 5% and 10%, respectively, from consulting
work in the solid waste disposal area.  The Earth Sciences Companies obtained
approximately 4%, 5%, and 7% of their revenues from the Company in 1996, 1995
and 1994, respectively.

Avalon Lakes
------------

  In June 1990, the Company purchased approximately 5.6 acres of real estate
located in Howland Township, Ohio, on which it constructed a 26,000 square foot
office building to serve as its corporate headquarters.  In connection with the
acquisition of such property, the Company's subsidiary, Avalon Lakes Golf, Inc.
("ALGI"), acquired the real and personal property associated with the Avalon
Lakes Golf Course, an 18-hole public golf course adjacent to the office
property.  See Item 2.  "Properties."

Environmental Regulations
-------------------------

General

  The Company is subject to extensive and evolving environmental laws and
regulations that have been enacted in response to technological advances and the
public's increased concern over environmental issues.  These regulations are
administered by the U. S. Environmental Protection Agency (the "EPA"), the Ohio
EPA, and various other federal, state and local environmental, zoning, health
and safety agencies, many of which periodically examine the Company's operations
to monitor compliance with such laws and regulations.  The Company believes it
is currently in substantial compliance with applicable

                                       7
<PAGE>
 
federal, state and local laws and regulations. Furthermore, the Company believes
there will be increased regulation and legislation related to the waste
management industry.

  The federal government as well as numerous states and local governmental
bodies are increasingly considering, proposing or enacting legislation to either
restrict or impede the disposal and/or transportation of waste.  A significant
portion of the Company's disposal and transportation revenues are derived from
the disposal or transportation of out-of-state waste.  All of the Company's
landfills are located within the State of Ohio.  Any regulation restricting or
impeding the transportation of waste, the acceptance of out-of-state waste for
disposal at any of the Company's landfills, or which levies significant taxes or
fees on the disposal of waste could have a significant negative effect on the
Company.  The Company's landfill and transportation operations may also be
affected by the trend toward laws requiring the development of waste reduction
and recycling or other programs, although the Company does not expect recycling
programs to have a great impact on special waste disposal.

  In order to operate a landfill, the Company must possess and maintain one or
more operating permits and licenses and, in certain instances, applicable
regulatory approvals.  Obtaining the necessary permits and approvals in
connection with the acquisition, development or expansion of a landfill is
difficult, time-consuming and expensive, and is frequently opposed by local
citizen groups.  Once obtained, operating permits are subject to modification
and revocation by the issuing agency.  The Company's landfill operations are
also subject to evolving and expanding operational, monitoring, site maintenance
and closure and post-closure requirements.

  In order to transport hazardous waste and, in certain cases, special waste,
the Company must possess and maintain one or more state operating permits.
These operating permits must be renewed annually and are subject to modification
and revocation by the issuing agency.  In addition, the Company's waste
transportation operations are subject to evolving and expanding operational,
monitoring and safety requirements.

  In the ordinary course of its disposal and transportation operations, the
Company may from time to time receive citations, notices or comments from
regulatory authorities that such operations are not in compliance with
applicable environmental regulations.  These agencies may seek to impose fines
on the Company or to revoke or deny renewal of the Company's operating permits
or licenses, or to require the Company to remediate environmental problems at
its sites relating to waste disposed of by the Company or its predecessors, or
resulting from its transportation operations.  Upon receipt of such citations,
notices or comments, the Company works with the authorities in an attempt to
resolve the issues raised.  Failure to correct the problems to the satisfaction
of the authorities could lead to fines or a curtailment or cessation of such
operations.

  As a result of participating in the waste management industry, many of the
Company's capital and other expenditures relate to compliance with existing, and
in some cases, proposed environmental laws and regulations.  Compliance with
future environmental laws and regulations may require the Company, together with
others in the waste management industry, to make significant capital and
operating expenditures.  There can be no assurance that the Company would be
able to recover all such expenditures from its customers or that its earnings or
competitive position would not be materially and adversely affected.  See Item
1. "Waste Disposal Services - Facilities" and "Cell Preparation;  Waste
Disposal;  Cell Closure."

Statutes

  The following are the principal statutes affecting the Company's business:

  The Ohio Solid Waste Law (the "Ohio SW Law").  In June 1988, the Ohio
legislature enacted the Ohio SW Law (often referred to as House Bill 592 and
codified as Ohio Revised Code Chapter 3734) in response to a perceived solid
waste disposal crisis facing the State of Ohio.  Although hazardous waste and
municipal solid waste have been subject to state and/or federal regulation for
over two decades, House Bill 592 was the first comprehensive measure by the
State of Ohio respecting the waste industry.  The Ohio SW Law enables the Ohio
EPA, through the Ohio Attorney General, to conduct criminal investigations and
background checks of officers, directors and owners of solid waste management
companies, which are required for landfill permits and for transfer of ownership
of landfills.

                                       8
<PAGE>
 
  The Ohio SW Law and the regulations promulgated thereunder, require landfill
operators to employ the "best available technology" in their daily operations
and to submit annual reports to the Ohio EPA respecting operations and
procedures.  These regulations also require landfills to upgrade their cell
preparation and closure and post-closure procedures with the "best available
technology" in accordance with plans which must be submitted to, and approved
by, the Ohio EPA in accordance with specified schedules.  These plans must
provide for landfill cell liners consisting of at least five feet of highly
impermeable clay (which must be recompacted) and a layer of synthetic material,
as well as a leachate collection system designed to remove, for treatment or
disposal, any water which collects on the top of the landfill liners.  Upon
approval, the upgrading will be implemented over the life of the landfills as
current cells are closed and additional cells are prepared for use.  The
regulations do not require previously filled areas to meet all "best available
technology" requirements.  The Ohio SW Law also requires landfill operators to
meet and maintain certain net worth and financial tests, to post bonds or make
similar financial assurance arrangements, or to deposit sufficient funds into a
state approved trust account, during the operation of the landfill to assure
that adequate resources will be available for cell-closure and post-closure
monitoring.  See Item 1. "Waste Disposal Services."

  The Ohio SW Law and the regulations promulgated thereunder authorize the
formation of local solid waste management districts to further regulate the
disposal of solid waste.  Certain categories of applications for PTIs must be
reviewed and approved by the district prior to submission to the Ohio EPA.
Subject to the provisions of the Ohio SW Law, districts are authorized (i) to
prevent the disposal of wastes generated within such district at facilities that
are not designated by such district in accordance with the Ohio SW Law and, (ii)
prevent disposal facilities located within the district and designated by such
district from accepting for disposal wastes generated outside of the district.
If districts were to successfully exercise such authority, the result could have
a material adverse effect on the business of the Company.  Each district also
has the authority to impose a fee on waste deposited in landfills located within
its boundaries.  These solid waste management district fees are currently
limited to a maximum of $4.00 per ton for wastes generated outside of the
district but within Ohio and $2.00 per ton for waste generated within the
district or outside of Ohio.  The districts are also empowered to impose a fee
on the generation of waste within such district.  The Ohio SW Law also
authorizes the State of Ohio to collect a fee on waste disposed of in an Ohio
landfill at the present rate of $1.75 per ton.  Municipal corporations or
townships in which landfills are located are authorized to collect an additional
$.25 per ton.  The Company is obligated to pay these governmental fees which
have been imposed on its facilities whether or not it collects such fees from
its customers.

  Ohio Senate Bill 165, passed by the Ohio legislature in October 1993, required
the Ohio EPA to promulgate rules governing storage, collection, transportation
and disposal of scrap tires.  The Ohio EPA promulgated rules effective March 1,
1996 relating to such legislation.  Whole scrap tires as well as shredded scrap
tires are no longer permitted to be disposed of in sanitary landfills.

  The Resource Conservation and Recovery Act of 1976 ("RCRA").  RCRA regulates
the handling, transportation and disposal of hazardous and nonhazardous waste
and requires states to develop programs to insure the safe disposal of solid
waste in sanitary landfills, which programs will require special waste to be
disposed of off-site to a greater degree than in the past.  In October 1991 the
EPA promulgated subtitle D of RCRA ("Subtitle D"), and announced the
Comprehensive Solid Waste Management Guidelines, which include location
standards, facility design, operating criteria, closure and post-closure
requirements, financial assurance standards and groundwater monitoring as well
as corrective action standards, many of which have not commonly been in place or
enforced at landfills.  On October 9, 1993 Subtitle D became effective and
states are required to revise their landfill regulations to meet these
requirements in order to obtain authorization to enforce the provisions of
Subtitle D.  Ohio has revised its regulations and is currently so authorized.
Because some parts of the new regulations will be phased in over time, the full
effect may not be apparent for several years.  Regulations currently in effect
pursuant to the Ohio SW Law include, in many cases, stricter standards and
requirements for solid waste landfills such as those operated by the Company
than required by Subtitle D.  Several bills have been proposed or introduced
into Congress relating to the "Reauthorization of RCRA."  Such bills vary in
scope and nature with several addressing the transportation and disposal of out-
of-state waste.  The Company is presently unable to determine what legislation,
if any, will ultimately result with respect to the "Reauthorization of RCRA."

                                       9
<PAGE>
 
  The following summarizes certain other environmental statutes affecting the
business of the Company:

  The Federal Water Pollution Control Act (the "Clean Water Act").  The Clean
Water Act established rules regulating the discharge of pollutants from a
variety of sources, including solid waste disposal sites, into streams or other
surface waters.  Should runoff or collected leachate from the Company's
landfills be discharged into surface waters, the Clean Water Act would require
the Company to apply for and obtain discharge permits, conduct sampling and
monitoring and, under certain circumstances, reduce the quantity of pollutants
in those discharges.

  The Comprehensive Environmental Response, Compensation, and Liability Act of
1980 ("Superfund" or "CERCLA").  CERCLA addresses problems created by the
release of any hazardous substance into the environment.  CERCLA's primary
mechanism for remediating such problems is to impose strict joint and several
liability for cleanup of disposal sites among all past and current owners and
operators of the site as well as the waste generators and the transporters.  The
costs of CERCLA cleanup can be very substantial.  Liability under CERCLA does
not depend upon the existence or disposal of "hazardous wastes" but can also be
founded upon the existence of even very small amounts of the more than 700
"hazardous substances" listed by the EPA.  See Item 3. "Legal Proceedings."

  The Clean Air Act, as amended (the "Clean Air Act").  The Clean Air Act
provides for federal, state and local regulation of the emission of air
pollutants and has been construed by the EPA to apply to landfills.  The 1990
amendments to the Clean Air Act focused on reducing acid rain pollutants and
urban smog and eliminating most toxic chemical emissions from industrial plants
by the year 2000.  The EPA has developed air emission guidelines for solid waste
landfills.  These rules govern emissions on non-methane organic compounds and
methane and were proposed on May 30, 1991.

  State Regulation.  In addition to federal laws and regulations, each state in
which the Company now operates, or may operate in the future, has laws and
regulations governing handling, transportation and disposal of waste, water and
air pollution and, in most cases, the design, operation, maintenance, closure
and post-closure maintenance of landfills.

Sales and Marketing
-------------------

  The Company's sales and marketing strategy continues to focus upon the cross-
selling of each of the integrated waste management and environmental services
provided by the Company.  The Company's sales force is familiar with the various
environmental services offered by the Company and directs his or her efforts
toward selling an integrated waste management package to potential customers.
As part of the start-up of its collection operations, the Company has
established a separate sales force which primarily focuses on commercial
municipal solid waste collection opportunities.

Competition
-----------

  The nonhazardous solid waste management business is highly competitive and
fragmented.  The industry is characterized by several large national waste
management companies as well as numerous local and regional companies of varying
sizes and financial resources.  The Company competes for business primarily by
providing a full range of quality waste management and environmental  services
at a competitive price.

  Competition among landfills is based upon price, service and the proximity of
the landfill to the waste generator.  The Company focuses on the special waste
segment of the industry, in addition to the disposal of municipal solid waste.
Competitors previously engaged primarily in the collection and disposal of
municipal solid waste and/or disposal of hazardous waste have significantly
increased their presence in the special waste market.  Competition may also be
affected by the increasing national emphasis on recycling, composting,
incineration and other waste reduction programs or any legislation restricting
or impeding the transportation and/or disposal of waste, or imposing significant
taxes or governmental fees on disposal of waste.

  The Company is subject to extensive and evolving environmental laws and
regulations that have been enacted in response to technological advances and the
public's increased concern over environmental

                                       10
<PAGE>
 
issues. As a result, the Company believes that costs associated with the
engineering, construction, ownership and operation of landfills will increase in
the future. Competitive factors may require the Company to absorb all or a
portion of these increased expenses.

  Competitive pressures with regard to disposal services have intensified in
recent years.  Increases in additional disposal capacity within the industry and
aggressive pricing strategies of certain competitors could result in further
softening of disposal rates and a decline in disposal volumes.

  The markets for the transportation of hazardous and nonhazardous waste and for
the transportation of general and bulk commodities are each highly competitive.
There are numerous participants, and no one transporter has a dominant market
share.  The Company competes primarily with other short and long-haul carriers
for both truckload and less than truckload shipments.  Competition for the
transportation of waste is based not only on the ability of the carrier to
transport the waste at a competitive price, but also in accordance with
applicable regulations and the latest advances in technology.  Access to
disposal capacity assists the Company in competing for waste transportation
business.  Competition for the transportation of commodities is based primarily
on price and service.

  The Earth Sciences Companies compete with numerous large and small companies,
each of which is able to provide one or more of the environmental services
offered by the Earth Sciences Companies and some of which have greater financial
resources.  The Earth Sciences Companies attempt to develop relationships with
clients who have an ongoing need for their integrated technical environmental
services.  The availability of skilled technical personnel, quality of
performance, and service are the key competitive factors in developing such
relationships.

  Competition for collection services is based upon price and customer service.
The Company's collection operations compete with numerous national and local
companies, each of which is able to provide the services offered by the Company.
Many commercial collection customers have entered into multi-year service
agreements, most of which provide for automatic renewals absent notice of
termination by the customer.  These agreements have the effect of impeding new
collection companies from obtaining customers.  As such, the Company anticipates
that significant growth of its commercial collection operations could take a
number of years.

Insurance
---------

  The Company carries $21 million of comprehensive general liability insurance
coverage for the Company and its subsidiaries (other than with respect to ALGI,
which has separate insurance).  This policy includes coverage for automobile
liability (including a pollution liability endorsement which covers certain
liabilities from its spills), comprehensive property damage, and other customary
coverage.  Dart self-insures collision risks.  The Earth Sciences Companies also
maintain professional and pollution legal liability coverage.

  The Company may be subject to liability for any off-site environmental damage
its landfills may cause, particularly as a result of the contamination of
drinking water sources or the soil, including damage resulting from conditions
existing prior to the acquisition of the landfills by the Company.  The Company
may also be subject to liability for any off-site environmental contamination
caused by pollutants whose transportation, treatment, or disposal was arranged
for by the Company or its predecessors.  The Company carries an environmental
impairment liability insurance policy covering liability, on a claims made and
reported basis, of up to $3 million per occurrence ($6 million in the
aggregate), respecting certain off-site environmental damage from its American
landfill operations.  The policy does not cover losses arising from conditions
in existence prior to the inception of the policy.  No assurance can be given
that such insurance will be available in the future or, if available, that the
premiums will be reasonable.

  If the Company were to incur a substantial liability for damages not covered
by insurance or substantially in excess of its policy limits, or at a time when
it no longer was able to obtain liability insurance, its consolidated financial
condition could be materially adversely affected.

  The Company has entered into several contracts with governmental authorities
for a variety of environmental services.  Typically, such contracts require
surety bonds or other financial instruments to

                                       11
<PAGE>
 
assure performance under the terms of a contract. The Company has obtained in
the past, and expects to be able to obtain in the future, such bonds or other
financial instruments.

Employees
---------

  As of December 31, 1996, the Company had 503 employees, 54 of whom were
employed in waste disposal, 151 of whom were employed in transportation, 149 of
whom were employed in environmental consulting, analytical and remedial
services, 20 of whom were employed in collection services, 65 of whom were
employed in corporate sales and marketing, financial and other corporate
activities and 64 of whom were employed by ALGI in the operation of the golf
course and restaurant.  The Company believes that it has a good relationship
with its employees.

Other Business Factors
----------------------

  None of the Company's business segments is materially dependent on patents,
trademarks, licenses, franchises or concessions held other than permits,
licenses and approvals issued by regulatory agencies.  In addition, none of the
Company's business segments is materially dependent upon a single customer or a
few customers. See "Business Segment Information" on page 23 of the Annual
Report to Shareholders, which is incorporated herein by reference, for financial
information relating to business segments.  The Company does not sponsor
significant research and development activities.

ITEM 2.  PROPERTIES

  The principal fixed assets of the Company's waste disposal operations consist
of land and land improvements (primarily disposal site and disposal site
improvements) in addition to landfill operating equipment.  The Company also
owns a landfill gas extraction facility at its American landfill.  The Company's
principal real estate is its interest in the landfills described under Item 1.
"Business - Waste Disposal Services."  ALI owns approximately 950 acres of real
property on which it operates.  MLI owns the 200 acres of real property on which
its facility is located.  ELLI owns the 200 acres of real property on which the
East Liverpool landfill is located.  The landfill operations use approximately
43 pieces of major equipment (such as compactors, bulldozers, scrapers, tire
shredding equipment, rock crushing equipment and backhoes), substantially all of
which are owned by the Company.  See Item 1.  "Business - Waste Disposal
Services."

  At December 31, 1996, the collection operations, which began providing
services in the third quarter of 1996, owns one container delivery truck, two
front-load collection trucks, and four roll-off trucks, in addition to several
hundred containers of various sizes and other related equipment.

  The Company provides transportation services from locations in Canfield, Ohio
(Dart's headquarters); Oxford, Massachusetts (where Dart leases a 5,760 square
foot terminal); Toledo, Ohio (where Dart leases a 2,500 square foot terminal);
and Kenova, West Virginia (where Dart leases a 1,500 square foot terminal).  At
December 31, 1996, the transportation operations owned a fleet of 54 power units
(in addition to 19 power units which are leased), 202 trailers (in addition to
28 trailers which are leased), and 610 roll-off and other containers.  In
addition, 125-150 power units and 250-300 trailers owned by independent
owner/operators are available for use in Dart's operations.  Certain
transportation equipment acquired during 1993 is subject to liens securing the
repayment of indebtedness incurred to purchase such equipment.

  The Earth Sciences Companies own their main offices and laboratory facilities
located in a 48,000 square foot building in Export, Pennsylvania.  The Earth
Sciences Companies lease office space of approximately 4,000 square feet in
Akron, Ohio; 2,500 square feet in Blue Bell, Pennsylvania, near Philadelphia;
and 4,400 square feet in Denver, Colorado.  In addition, 13,000 square feet is
leased for field equipment and vehicle storage and dispatch in Murrysville,
Pennsylvania.  The Earth Sciences Companies also own numerous pieces of
laboratory, field, computer and other equipment.

  The Company owns a 26,000 square foot headquarters building located on
approximately 5.6 acres of property in Howland Township, Ohio.  Adjacent to such
property is an 18-hole public golf course owned and operated by ALGI including a
maintenance and storage building of approximately 12,000 square feet, a pro shop
and restaurant building of approximately 10,400 square feet, and a banquet
facility of

                                       12
<PAGE>
 
approximately 7,000 square feet. The golf course property together with the pro
shop, restaurant facility and banquet facility serve as collateral securing
repayment of indebtedness incurred to construct such facilities.

  Generally, the Company's fixed assets are in good condition and are
satisfactory for the purposes for which they are intended.

ITEM 3.  LEGAL PROCEEDINGS

  On or about October 3, 1991, one shareholder owning 100 shares of stock
brought suit against the Company and others on behalf of himself and a purported
class of other shareholders in the United States District Court for the Southern
District of New York.  The suit alleges that the Company, the signatories to the
registration statements filed with the Securities and Exchange Commission during
October 1990, and the Company's underwriters violated federal securities laws in
connection with the Company's public offering of six million shares of Class A
Common Stock in October 1990.  Among other things, the suit alleges
misrepresentations and failure to disclose allegedly material information
concerning the nature of the Company's market; the size of the Company's market;
the Company's failure to disclose that its landfills were located within a 50-
mile radius of each other in Ohio, thus making the Company especially vulnerable
to local conditions and competition; the Company's failure to set forth the
present and imminent competition; and the Company's growth.  The Plaintiff seeks
damages in an unspecified amount alleged to have arisen in part from the decline
in the price of the Company's stock following the public offering, and
rescission.  The Court has not yet determined whether the suit will proceed as a
class action.

  A timely Answer was filed on behalf of all defendants and a Motion to Transfer
Venue to the Northern District of Ohio was granted on June 10, 1992.  A Motion
for an Undertaking for Costs Pursuant to Section 11(e) of The Securities Act of
1933 was filed in the Northern District of Ohio but denied by the Court.  A
Motion to Dismiss the Complaint for failure to state a claim was filed February
1, 1994 on behalf of all defendants but was denied by the Court on August 29,
1994.  As a result of the language contained in the Order, on September 29, 1994
a Motion to Limit the Scope of Plaintiffs' Requested Discovery was filed.  That
motion was granted, and all proceedings have been stayed pending a decision on
all defendants' Motion for Summary Judgment filed on May 30, 1995.  The Company
intends to vigorously defend the claims.

  In September 1995, certain subsidiaries of the Company were informed that they
had been identified as potentially responsible parties by the Indiana Department
of Environmental Management ("IDEM") relating to a Fulton County, Indiana,
hazardous waste disposal facility which is subject to remedial action under
Indiana environmental laws.  Such identification is based upon the subsidiaries
having been involved in the transportation of hazardous substances to the
facility.  These transportation activities occurred prior to the acquisition of
such subsidiaries by the Company.  IDEM is seeking to recover and/or allocate
past costs of approximately $1.0 million as well as future costs associated with
further site investigation and remediation activities, which costs could be
substantial.  Although a large number of waste generators and other waste
transportation and disposal companies have also been identified as responsible
or potentially responsible parties, because the law assigns joint and several
liability among the responsible parties, any one of them, including the
Company's subsidiaries, could be assessed the entire cost of the remediation.
Currently, no remedy has been selected.  As such, the extent of any liability of
any of the Company's subsidiaries is currently unknown.

  When the Company concludes that it is probable that a liability has been
incurred, a provision is made in the Company's financial statements for the
Company's best estimate of the liability based on management's judgment and
experience, information available from regulatory agencies, and the number,
financial resources and relative degree of responsibility of other potentially
responsible parties who are jointly and severally liable for remediation of the
site as well as the typical allocation of costs among such parties.  If a range
of possible outcomes is estimated and no amount within the range appears to be a
better estimate than any other, then the Company provides for the minimum amount
within the range, in accordance with generally accepted accounting principles.
As such, the Company accrued a liability of approximately $941,000 in the fourth
quarter of 1995 relating to this matter.

  The Company's estimates are revised, as deemed necessary, as additional
information becomes known.  While the measurement of environmental liabilities
is inherently difficult and the possibility

                                       13
<PAGE>
 
remains that technological, regulatory or enforcement developments, the results
of environmental studies or other factors could materially alter the Company's
expectations at any time, the Company does not anticipate that the amount of any
such revisions will have a material adverse effect on operations or consolidated
financial position.

  On March 21, 1996, Earth Sciences Consultants, Inc. ("Earth Sciences"), a
subsidiary of the Company, entered into a Professional Services Agreement (the
"PSA") with the S. W. Shattuck Chemical Company, Inc. ("Shattuck") wherein Earth
Sciences agreed to act as the remediation contractor for the Denver radium site,
operable unit VIII, which is owned by Shattuck and located in Denver, Colorado
(the "Project").

  Earth Sciences' work on the Project is currently suspended as a result of a
Stop Work Order issued by the United States Environmental Protection Agency ("US
EPA") on January 22, 1997, due to the discovery of unanticipated, petroleum
contamination on the Project site.  On February 14, 1997, Earth Sciences filed a
demand for arbitration against Shattuck with the Denver Regional Office of the
American Arbitration Association relating to the PSA.  The demand for
arbitration claims, among other things:  (i) that Shattuck is in default and has
materially breached its payment obligations to Earth Sciences by failing to pay
outstanding invoices;  (ii) that Shattuck has summarily and wrongfully denied
requested change orders; and  (iii) that Shattuck has anticipatorily breached
the PSA.

  On March 11, 1997, Shattuck filed an Answering Statement and Counterclaims.
Shattuck has denied Earth Sciences' claims and has asserted several
counterclaims including allegations that Earth Sciences has failed to perform in
accordance with the PSA and that Earth Sciences has no right to stop its work on
the project regardless of Shattuck's actions by reason of the language of the
PSA. American Waste Services, Inc. ("AWS") was named as a third party respondent
to the arbitration proceeding because under the PSA, AWS guaranteed the
performance of Earth Sciences' obligations, including the payment of any and all
liabilities of Earth Sciences.

  On March 21, 1997 Earth Sciences received a letter from Shattuck advising 
Earth Sciences that the stop work order issued by the US EPA on January 22, 1997
had been lifted on March 20, 1997, and that Shattuck will be engaging another 
contractor to complete the project.

  A hearing date has not yet been set. Failure to resolve the pending dispute in
favor of the Company could have a material adverse effect on the Company's
future financial results.

  In addition to the foregoing, in the ordinary course of the Company's
business, the Company's transportation and other subsidiaries may become subject
to claims for personal injury and property damage (for which the Company carries
automobile liability and general liability insurance), and the Company's waste
disposal subsidiaries may become subject to environmental liability claims and
involved in various judicial and administrative proceedings with federal, state
and local agencies as well as citizen groups, in connection with the permitting
of its landfills and alleged violations of such permits.  At the present time,
the Company and certain of the Company's subsidiaries are named defendants in
several lawsuits arising from the ordinary course of their respective
businesses.  Although the outcome of such lawsuits or other proceedings cannot
be predicted with certainty, the Company does not believe that any uninsured
ultimate liabilities, fines or penalties resulting from such lawsuits or
proceedings, alone or in the aggregate, would have a material adverse effect on
the consolidated financial condition of the Company.  See Item 1. "Business -
Insurance."

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

  No matters were submitted to a vote of the Company's security holders during
the fourth quarter of 1996.

EXECUTIVE OFFICERS OF THE REGISTRANT

  Information regarding executive officers is contained in Item 10 of Part III
of this report.

                                       14
<PAGE>
 
                                    PART II

  Information with respect to the following items can be found on the indicated
pages of the Annual Report to Shareholders if not otherwise included herein.

<TABLE>
<CAPTION> 
ITEM 5.  MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
         STOCKHOLDER MATTERS
                                                                                                                             Page(s)
                                                                                                                             -------

<S>                                                                                                                          <C>
Common stock information......................................................................................................    28

Dividend policy...............................................................................................................    28


ITEM 6.  SELECTED FINANCIAL DATA

The information required by this item is included in the Digest of Financial Data
 for the years 1992 through 1996 under the captions Net operating revenues,
 Net income (loss), Net income (loss) per share, Total assets and Long-term debt..............................................    25


ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
         CONDITION AND RESULTS OF OPERATIONS

Management's Discussion and Analysis of Financial Condition
 and Results of Operations....................................................................................................   2-9


ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Independent auditors' opinion regarding financial statements as of
 December 31, 1996 and 1995 and for each of the years in the three-year
 period ended December 31, 1996...............................................................................................    24


Financial Statements:

 Consolidated Balance Sheets, December 31, 1996 and 1995......................................................................    10

 Consolidated Statements of Operations for the years ended December 31, 1996,
  1995 and 1994...............................................................................................................    11

 Consolidated Statements of Cash Flows for the years ended December 31, 1996,
  1995 and 1994...............................................................................................................    12

 Consolidated Statements of Shareholders' Equity for each of the years in the
  three-year period ended December 31, 1996...................................................................................    13

 Notes to Consolidated Financial Statements................................................................................... 14-24

</TABLE>

  Information regarding financial statement schedules is contained in Item 14(a)
of Part IV of this report.

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
         ACCOUNTING AND FINANCIAL DISCLOSURE

  None.

                                       15
<PAGE>
 
                                   PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

  The information required by Item 10 regarding Directors is contained under the
caption "Election of Directors" in the Registrant's definitive Proxy Statement
for its 1996 Annual Meeting of Shareholders (the "Proxy Statement") which will
be filed with the Securities and Exchange Commission, pursuant to Regulation
14A, not later than 120 days after the end of the fiscal year, which information
under such caption is incorporated herein by reference.  The following
information with respect to the Executive Officers of the Company is included
pursuant to Instruction 3 of Item 401(b) of Regulation S-K:

<TABLE>
<CAPTION>
Name                        Age                              Position
--------------------------  ---  ----------------------------------------------------------------
<S>                         <C>  <C>
Ronald E. Klingle            49  Chairman of the Board, Chief Executive Officer and a Director
Darrell D. Wilson            45  President, Chief Operating Officer and a Director
Michael D. Barwick           41  Executive Vice President, Collection Services
Charles Boryenace            46  Executive Vice President, Strategic Planning and a Director
Mark B. Cawthorne            37  Executive Vice President, Transportation Services and a Director
Timothy C. Coxson            46  Executive Vice President, Finance, Treasurer, Chief Financial
                                    Officer and a Director
Stephen G. Kilper            37  Executive Vice President, Disposal Services and a Director
Kenneth J. McMahon           43  Executive Vice President, Sales and a Director
Jeffrey M. Grinstein         36  Executive Vice President, General Counsel and Secretary
Frances R. Klingle           50  Chief Administrative Officer and Controller
</TABLE>

____________________________________________

  The above-listed individuals have been elected to the offices set opposite
their names to hold office at the discretion of the Board of Directors of the
Company.

____________________________________________
 
  Ronald E. Klingle is a founder of the Company and has been a director,
Chairman of the Board and Chief Executive Officer since December 1988.  He has
approximately 26 years of environmental experience and received his Bachelor of
Engineering degree in Chemical Engineering from Youngstown State University.
Mr. Klingle is the spouse of Frances R. Klingle who is the Chief Administrative
Officer and Controller of the Company.

  Darrell D. Wilson is a founder of the Company and has been a director and
President since December 1988 and Chief Operating Officer since July 1990.  He
has approximately 23 years of environmental experience including service with
governmental regulators as well as the management of several special waste
operations.  He received his Bachelor of Science degree in Environmental
Sciences from Ferris State University.

  Michael D. Barwick has been Executive Vice President, Collection Services
since January 1997.  Prior to joining the Company, Mr. Barwick owned and
operated a private waste company on the West Coast from November 1989 through
April 1995.  He received a Bachelor of Arts in Administration from Hartwell
College and is a candidate for a Masters of Business Administration at
Pepperdine University.

  Charles Boryenace has been a director of the Company since August 1990 and
Executive Vice President, Strategic Planning since May 1995.  Mr. Boryenace was
Executive Vice President, Finance, Treasurer, and Chief Financial Officer from
January 1991 to May 1995.  Mr. Boryenace received his Bachelor of Business
Administration degree in Accounting from Kent State University.

  Mark B. Cawthorne has been a director and Executive Vice President,
Transportation Services since September 1996.  He has approximately 14 years of
environmental experience and previously served as Vice President, Disposal Sales
from January 1991 to September 1996 with American Waste Services, Inc.  He
received a BA in Geography and Environmental Studies from the University of
Akron.

                                       16
<PAGE>
 
  Timothy C. Coxson has been a director and Executive Vice President, Finance,
Treasurer, and Chief Financial Officer since May 1995.  Mr. Coxson was Vice
President, Corporate Financial Services, from  March 1991 to May 1995.  He
received a Bachelor of Business Administration degree in Accounting from The
Ohio State University.

  Stephen G. Kilper has been a director and Executive Vice President, Disposal
Services, since October 1995. Mr. Kilper was Vice President, Disposal Services,
for the Company and its wholly owned disposal subsidiaries from August 1993 to
October 1995. From January 1992 to August 1993 he was an environmental engineer
for the Company's disposal operations. From February 1990 through December 1991
Mr. Kilper was an engineer with Earth Sciences Consultants, Inc. Mr. Kilper
received his degree in Agricultural Engineering from the University of
Wisconsin-Madison.

  Kenneth J. McMahon has been a director and Executive Vice President, Sales
since September 1996.  He previously served as Vice President of Corporate Sales
from March 1992 to September 1996 and has approximately 20 years of experience
in sales and marketing.  Prior to joining the Company, he was Director of Sales
for an IBM Agent firm, Harker Consulting Services.  Mr. McMahon received a
Bachelor of Business Administration Degree in finance and his Master of Business
Administration from Youngstown State University.

  Jeffrey M. Grinstein has been employed by the Company since September 1990 and
has been an Executive Vice President since December 1992.  He was Assistant
General Counsel until May 1991, at which time he became General Counsel and
Secretary.  He was previously an associate for approximately five years with the
Youngstown, Ohio law firm of Nadler, Nadler & Burdman Co. L.P.A.  He received
his Bachelor of Business Administration degree from Emory University and his
Doctor of Jurisprudence degree from The Ohio State University.

  Frances R. Klingle has been Chief Administrative Officer and Controller since
July 1991.  Ms. Klingle has been Controller for the Company (and predecessor
companies) since June 1986.   She received a Bachelor of Arts degree in French
from Kent State University and has completed post-graduate work in accounting at
Youngstown State University.  Ms. Klingle is the spouse of Ronald E. Klingle who
is Chairman of the Board, Chief Executive Officer and a director of the Company.

ITEM 11.  EXECUTIVE COMPENSATION

  The information required by Item 11 is contained under the captions "Meetings
and Committees of the Board" and "Compensation of Directors and Executive
Officers" in the Proxy Statement.  The information under such captions is
incorporated herein by reference, except that information contained under
subpart captions "Board Committee Reports on Executive Compensation" and
"Performance Graph" are specifically not incorporated herein.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
          MANAGEMENT

  The information required by Item 12 is contained under the captions "Voting
Securities and Principal Holders Thereof" and "Stock Ownership of Management" in
the Proxy Statement which information under such captions is incorporated herein
by reference.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

  The information required by Item 13 is contained under the caption "Certain
Relationships and Related Transactions" in the Proxy Statement which information
under such caption is incorporated herein by reference.

                                       17
<PAGE>
 
                                    PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(a)  The following documents are filed as part of this report:

  1. Financial Statements and Independent Auditors' Opinion (See Part II, Item 8
     of this report regarding incorporation by reference from the Annual Report
     to Shareholders)

  2. Financial Statement Schedules required to be filed by Item 8 and Paragraph
     (d) of this Item 14.

  The following financial statement schedule, which is applicable for years
ended December 31, 1996, 1995 and 1994, should be read in conjunction with the
previously referenced financial statements.

     Independent Auditors' Report on Financial Statement Schedule
     Schedule II - Valuation and Qualifying Accounts

  Such independent auditors' report and financial statement schedule are at page
21 through page 22 of this report.  The other schedules are omitted because of
the absence of conditions under which they are required or because the
information required is shown in the consolidated financial statements or the
notes thereto.

  3.  Exhibits

  Registrant will furnish to any shareholder, upon written request, any of the
following exhibits upon payment by such shareholder of the Registrant's
reasonable expenses in furnishing any such exhibit.

Exhibit No.
-----------

   3.1  Amended and Restated Articles of Incorporation of the Company,
        incorporated herein by reference to American Waste Services, Inc.
        Registration Statement on Form S-1 (No. 33-36308), Exhibit 3.1.

   3.2  Amended and Restated Code of Regulations of the Company, incorporated
        herein by reference to American Waste Services, Inc. Registration
        Statement on Form S-1 (No. 33-36308), Exhibit 3.2.

   4.1  Form of certificate evidencing ownership of Class A Common Stock of the
        Company, incorporated herein by reference to American Waste Services,
        Inc. Registration Statement on Form S-1 (No. 33-36308), Exhibit 4.1.

 10.14  1990 Stock Option Plan, incorporated herein by reference to American
        Waste Services, Inc. Registration Statement on Form S-1 (No. 33-36308),
        Exhibit 10.14.

*10.15  1990 Long-Term Incentive Plan as amended and restated on February
        17, 1997, Exhibit 10.15.

 10.37  Agreement Regarding the Sale and Purchase of the East Liverpool
        Landfill, between East Liverpool Landfill, Inc. and the City of East
        Liverpool, Ohio, dated February 2, 1990, incorporated herein by
        reference to American Waste Services, Inc. Registration Statement on
        Form S-1 (No. 33-36308), Exhibit 10.37.

 10.39  Finders Agreement between East Liverpool Landfill, Inc. and Whan, Inc.,
        dated as of August 6, 1990, incorporated herein by reference to American
        Waste Services, Inc. Registration Statement on Form S-1 (No. 33-36308),
        Exhibit 10.39.

 10.56  American Waste Services, Inc. Participating Companies Profit Sharing
        Plan and Trust, as

                                       18
<PAGE>
 
Exhibit No.
-----------

        amended and restated effective January 1, 1993 in accordance with the
        Nonstandardized Adoption Agreement and Prototype Cash or Deferred
        Profit-Sharing Plan and Trust/Custodial Account, incorporated herein by
        reference to American Waste Services, Inc. Form 10-K for the year ended
        December 31, 1992, Exhibit 10.56.

 10.57  Agreed Judgment Entry of Consolidation, Settlement and Dismissal
        dated August 29, 1994, modifying Agreement Regarding the Sale and
        Purchase of the East Liverpool Landfill, referenced as Exhibit 10.37 to
        the registrant's Form 10-K for the year ended December 31, 1993, Exhibit
        10.57.

 10.60  Loan Agreement dated as of December 23, 1994, among American Waste
        Services, Inc., NBD Bank, N.A., The Second National Bank of Warren, and
        NBD Bank, N.A., as Agent, Exhibit 10.60.

 10.61  First Amendment to Loan Agreement dated October 19, 1995 among
        American Waste Services, Inc., NBD Bank, The Second National Bank of
        Warren, and NBD Bank, as Agent,  referenced as Exhibit 10.61 to the
        registrant's Form 10-Q for the period ended September 30, 1995.

 10.62  Second Amendment to Loan Agreement dated February 19, 1996 among
        American Waste Services, Inc., NBD Bank, The Second National Bank of
        Warren, and NBD Bank, as Agent, Exhibit 10.62.

 10.63  Third amendment to Loan Agreement dated December 31, 1996 among
        American Waste Services, Inc., NBD Bank, The Second National Bank of
        Warren, and NBD Bank, as Agent, Exhibit 10.63.

  11.1  Omitted - inapplicable.  See "Net income (loss) per share" on page 15
        of the Annual Report to Shareholders.

  13.1  Company's 1996 Annual Report to Shareholders (except for the pages and
        information therein expressly incorporated by reference in this Form 10-
        K, the Annual Report to Shareholders is provided solely for the
        information of the Commission and is not to be deemed "filed" as part of
        the Form 10-K).

  21.1  Subsidiaries of the Company.

  23.1  Independent Auditors' Consent.

    27  Financial Data Schedule

*  Represents management contract or compensatory plan or arrangement required
   to be filed or incorporated by reference, as an exhibit to this report
   pursuant to Part IV, Item 14(c).

______________________________________________

(b) No Form 8-K reports were filed during the last quarter of the period covered
    by this report.

(c) Reference is made to Item 14 (a)(3) above for the index of exhibits.

(d) Reference is made to Item 14 (a)(2) above for the index to the financial
    statements and financial statement schedules.

                                       19
<PAGE>
 
                                  SIGNATURES


  Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized, on the 21st day of March,
1997.

                                  AMERICAN WASTE SERVICES, INC.
                                  (Registrant)

                                  By /s/ TIMOTHY C. COXSON
                                     -------------------------------------------
                                  Timothy C. Coxson - Executive Vice
                                  President, Finance, Treasurer and Chief
                                  Financial Officer

  Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities indicated, on the 21st day of March, 1997.


         Signatures                                   Title
         ----------                                   -----

/s/ RONALD E. KLINGLE              Chairman of the Board, Chief
------------------------------     Executive Officer and Director
Ronald E. Klingle                        

/s/ DARRELL D. WILSON              President, Chief Operating Officer
------------------------------     and Director
Darrell D. Wilson                        

/s/MARK B. CAWTHORNE               Executive Vice President, Transportation
------------------------------     Services and Director
Mark B. Cawthorne                        

/s/ CHARLES BORYENACE              Executive Vice President, Strategic Planning
------------------------------     and Director
Charles Boryenace                        

/s/ TIMOTHY C. COXSON              Executive Vice President, Finance, Treasurer,
------------------------------     Chief Financial Officer and Director   
Timothy C. Coxson                  (Principal Financial and Accounting Officer)

/s/ STEPHEN G. KILPER              Executive Vice President, Disposal
------------------------------     Services and Director
Stephen G. Kilper                        

/s/ KENNETH J. McMAHON             Executive Vice President, Sales
------------------------------
Kenneth J. McMahon

/s/ SANFORD B. FERGUSON            Director
------------------------------
Sanford B. Ferguson
 
/s/ JAMES A. JOHNSON               Director
------------------------------
James A. Johnson

/s/JOHN R. MILLER                  Director
------------------------------
John R. Miller

/s/ F. OLIVER NICKLIN, JR.         Director
------------------------------
F. Oliver Nicklin, Jr.

/s/                                Director
------------------------------
George P. Ellis

                                       20
<PAGE>
 
                AMERICAN WASTE SERVICES, INC. AND SUBSIDIARIES
                SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
             FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
                            (thousands of dollars)



 
<TABLE> 
<CAPTION> 
--------------------------------------------------------------------------------------------------
                                     Balance at             Additions
    DESCRIPTION                      Beginning   ----------------------------------   Deductions  Balance at End
                                      of Year    Charged to Costs  Charged to Other      (1)         of Year
                                                   and Expenses        Accounts
-----------------------------------------------------------------------------------------------------------------
<S>                                  <C>         <C>               <C>                <C>         <C> 

Allowance for Doubtful Accounts:

Year ended December 31,
 
  1996                                 $778            $(85)                $--          $185         $506
                                       ====          ======                 ===          ====         ====
                                                      
  1995                                 $991            $610                 $--          $823         $778
                                       ====          ======                 ===          ====         ====
                                                      
  1994                                 $716          $1,007                 $--          $732         $991
                                       ====          ======                 ===          ====         ====
</TABLE> 

(1)  Receivables written-off as uncollectible, net of recoveries.

                                       21
<PAGE>
 
                AMERICAN WASTE SERVICES, INC. AND SUBSIDIARIES

                                 EXHIBIT INDEX
                           _________________________

 
                    Exhibit
                    -------


10.15  1990 Long-Term Incentive Plan as amended and restated in February 17,
       1997, Exhibit 10.15

10.63  Third Amendment to Loan Agreement dated December 31, 1996
       among American Waste Services, Inc., NBD Bank, The
       Second National Bank of Warren, and NBD Bank, as Agent,
       Exhibit 10.63.

13.1   Company's 1996 Annual Report to Shareholders (except for the pages and
       information therein expressly incorporated by reference in this Form 10-
       K, the Annual Report to Shareholders is provided solely for the
       information of the Commission and is not to be deemed "filed" as part of
       the Form 10-K).

21.1   Subsidiaries of the Company.

23.1   Independent Auditors' Consent.

27     Financial Data Schedule