UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                    FORM 10-Q


 QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
                                     OF 1934


                For the Quarterly Period Ended November 30, 1998 


                         Commission File Number 1-8368 


                               SAFETY-KLEEN CORP.
             (Exact name of registrant as specified in its charter)


           Delaware                                            51-0228924      
-------------------------------                            -----------------
(State or other jurisdiction of                            (I.R.S. Employer
 incorporation or organization)                            Identification No.)


1301 Gervais Street Columbia, Suite 300, South Carolina                 29201
-------------------------------------------------------               ----------
      (Address of principal executive offices)                        (Zip Code)

       (803) 933-4200 (Registrant's telephone number, including area code)
       --------------
                      LAIDLAW ENVIRONMENTAL SERVICES, INC.
                      ------------------------------------
   (Former name, address and former fiscal year, if changed since last report)

     Indicate  by check mark  whether the  registrant  (1) has filed all reports
required to be filed by Sections 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  number  of shares  of the  issuer's  common  stock  outstanding  as of
January 11, 1999 was 88,387,466.









                                       
<PAGE>





                               SAFETY-KLEEN CORP.
<TABLE>


                                      INDEX

<CAPTION>

PART 1    FINANCIAL INFORMATION
<S>                                                                                          <C>

Item 1    Financial Statements

          Consolidated Statements of Income for the Three Month Periods Ended
              November 30, 1998 and 1997 ............................................................ 3

         Consolidated Statements of Comprehensive Income for the Three Months Ended
              November 30, 1998 and 1997 ............................................................ 3

          Consolidated Balance Sheets as of November 30, 1998 and August 31, 1998 ..................  4

          Consolidated Statements of Cash Flows for the Three Month Periods Ended
              November 30, 1998 and 1997 ............................................................ 5

          Notes to Unaudited Consolidated Financial Statements ...................................... 6

Item 2    Management's Discussion and Analysis of Financial Condition and Results of Operations ..... 13


PART II 
Item 1   Legal Proceedings .......................................................................... 17

Item 2   Changes In Securities and Use Of Proceeds .................................................. 19

Item 4   Submission of Matters to a Vote of Security Holders ........................................ 19

Item 6   Exhibits and Reports on Form 8-K ........................................................... 20


Signatures .......................................................................................... 24


</TABLE>



                                       2
<PAGE>

                               SAFETY-KLEEN CORP.
                        CONSOLIDATED STATEMENTS OF INCOME
                   ($ in Thousands, Except Per Share Amounts)
                                   (Unaudited)

                                                       Three Months Ended
                                                          November 30,   
                                                       -------------------
                            
                                                         1998      1997
                                                         ----      ----
Revenues ............................................  $467,019   $211,552
                                                       --------   --------

Expenses:
    Operating .......................................   305,048    145,325
    Depreciation and amortization ...................    37,295     13,895
    Selling, general and administrative .............    34,500     20,401
                                                       --------   --------
         Total expenses .............................   376,843    179,621
                                                       --------   --------
Operating income ....................................    90,176     31,931
Interest expense, net ...............................    43,084     14,560
                                                        -------    -------
Income before income tax expense ....................    47,092     17,371
Income tax expense ..................................    19,320      7,227
                                                       --------   --------
    Net income ......................................  $ 27,772   $ 10,144
                                                       ========   ========
Basic income per share: 
     Net income .....................................  $   0.32   $   0.22
     Weighted average common stock outstanding (000s)  ========   ========
                                                         87,844     45,193
                                                       ========   ========
Diluted income per share ............................  $   0.27   $   0.19
                                                       ========   ========
   Weighted average common stock outstanding
    and assumed conversions (000s) ..................   111,242     68,661
                                                       ========   ========

See Accompanying Notes to Unaudited Consolidated Financial Statements

<TABLE>
<CAPTION>

                                              SAFETY-KLEEN CORP.
                                CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
                                               ($ in Thousands)
                                                  (Unaudited)

                                                                              Three Months Ended
                                                                                  November 30,
                                                                            --------------------------
                                                                               1998             1997
                                                                               ----             ----
<S>                                                                          <C>              <C>
Net income                                                                   $27,772          $10,144
Other comprehensive income, net of tax:
  Unrealized foreign currency translation adjustments                          1,492           (2,377)
  Unrealized gain on securities available for sale, net of tax of $1,472         --             2,209
                                                                             -------           ------
Other comprehensive income                                                     1,492             (168)
                                                                             -------           ------
Comprehensive income                                                         $29,264           $9,976
                                                                             =======           ======

      See Accompanying Notes to Unaudited Consolidated Financial Statements
</TABLE>

                                       3
<PAGE>


4
<TABLE>

                               SAFETY-KLEEN CORP.
                           CONSOLIDATED BALANCE SHEETS
<CAPTION>

                                                                      November 30, 1998
                                                                          (unaudited)   August 31, 1998
                                                                      ----------------- ---------------
<S>                                                                       <C>             <C>

($ in Thousands)
ASSETS
   Current assets
   Cash and cash equivalents ...........................................  $    4,581      $   16,333
   Trade and other accounts receivable .................................     374,291         320,048
   Inventories..........................................................      52,505          53,759
   Deferred income taxes ................. .............................      69,739          69,426
   Income taxes recoverable ............................................        --            37,495
   Other current assets ................................................      57,496          53,750
                                                                          ----------         -------
    Total current assets ...............................................     558,612         550,811
Long-term investments ..................................................      36,326          35,926
Property, plant and equipment, net .....................................   2,842,704       2,850,502
Goodwill ...............................................................   1,019,003       1,023,154
Other assets ...........................................................      16,921          16,979
                                                                          ----------      ----------
   Total assets ........................................................  $4,473,566      $4,477,372
                                                                          ==========      ==========
LIABILITIES
Current liabilities
   Accounts payable ....................................................  $  125,282      $  128,560
   Accrued liabilities .................................................     232,634         219,352
   Current portion of long-term debt ...................................      77,316          77,004
                                                                          ----------      ----------
    Total current liabilities ..........................................     435,232         424,916
Environmental and other long-term liabilities ..........................     240,267         259,459
Long-term debt .........................................................   1,810,025       1,853,164
Subordinated convertible debenture .....................................     350,000         350,000
Deferred income taxes ..................................................     585,322         575,127
                                                                          ----------      ----------
   Total liabilities ...................................................   3,420,846       3,462,666
                                                                          ----------      ----------

Commitments and contingencies ..........................................        --              --

STOCKHOLDERS' EQUITY
Common stock, par value $1.00 per share; authorized 250,000,000; 
   issued and outstanding 88,381,452 - November 30, 1998;
   87,746,243 - August 31, 1998 ........................................      88,381          87,746
Additional paid-in capital .............................................   1,190,662       1,182,547
Accumulated other comprehensive income .................................     (17,336)        (18,828)
Accumulated deficit ....................................................    (208,987)       (236,759)
                                                                          ----------      ---------- 
  Total stockholders' equity ..........................................    1,052,720       1,014,706
                                                                          ----------      ----------
  Total liabilities and stockholders' equity ...........................  $4,473,566      $4,477,372
                                                                          ==========      ==========

      See Accompanying Notes to Unaudited Consolidated Financial Statements

</TABLE>

                                       4
<PAGE>

                                       
<TABLE>
<CAPTION>


                               SAFETY-KLEEN CORP.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                ($ in Thousands)
                                   (Unaudited)

                                                                               Three Months Ended
                                                                                  November 30,
                                                                             -----------------------
                                                                               1998          1997
                                                                               ----          ----
<S>                                                                           <C>           <C>
Cash flows from operating activities:     
   Net income .............................................................   $27,772       $10,144
   Adjustments to reconcile net income to net cash provided by operations:
     Depreciation and amortization ........................................    37,295        13,895
     Deferred income taxes ................................................    11,060         4,208
     Decrease in working capital ..........................................    10,358         5,602
     Decrease in liabilities assumed upon acquisition .....................   (30,282)       (8,750)
                                                                              --------      -------
Net cash used in operating activities .....................................    56,203        25,099
                                                                              --------      -------

Cash flows from investing activities:
   Cash expended on acquisition of business ...............................    (4,058)          --
   Purchase of property, plant and equipment ..............................   (14,424)       (8,490)
   Proceeds from sales of property, plant and equipment ...................     1,090         1,875
   Net increase in long-term investments ..................................       (53)      (12,811)
   Change in other, net ...................................................       --         (4,998)
                                                                              -------       -------
Net cash used in investing activities .....................................   (17,445)      (24,424)
                                                                              -------       -------

Cash flows from financing activities:
   Issuance of common stock on exercise of stock options ..................       --            528
   Repayment of long-term debt ............................................    45,307)       (2,520)
                                                                              --------      -------
Net cash used in financing activities .....................................   (45,307)       (1,992)
                                                                              --------      -------

Effect of exchange rate changes on cash  ..................................    (5,203)          --  
                                                                              -------       -------

Net decrease in cash and cash equivalents .................................   (11,752)       (1,317)
Cash and cash equivalents at:
   Beginning of period ....................................................    16,333        11,160
                                                                               -------      -------
   End of period ..........................................................   $ 4,581        $9,843
                                                                              =======       =======

NONCASH INVESTING AND FINANCING ACTIVITIES:
   Issuance of common stock to satisfy interest payment due on
        subordinated convertible debenture ................................    $8,750        $8,750
    Net unrealized gain on securities available for sale ..................    $  --         $2,209


      See Accompanying Notes to Unaudited Consolidated Financial Statements

</TABLE>


                                       5
<PAGE>
                               SAFETY-KLEEN CORP.
              Notes to Unaudited Consolidated Financial Statements
                  For the Three Months Ended November 30, 1998



NOTE 1 - BASIS OF PRESENTATION

The accompanying  unaudited interim consolidated  financial statements have been
prepared  in  accordance  with the  instructions  to Form 10-Q and Rule 10-01 of
Regulation S-X and, therefore, do not include all of the disclosures required by
generally accepted accounting principles for annual financial statements. In the
opinion  of  management,   all  adjustments  considered  necessary  for  a  fair
presentation  of the  interim  period  results  have  been  included;  all  such
adjustments are of a normal recurring  nature.  Operating  results for the three
month  period  ended  November 30, 1998 are not  necessarily  indicative  of the
results  that may be expected  for the full fiscal year ending  August 31, 1999.
These statements  should be read in conjunction with the consolidated  financial
statements, including the accounting policies, and notes thereto included in the
Registrant's  Annual Report on Form 10-K, filed with the Securities and Exchange
Commission on October 29, 1998.  Certain amounts as of August 31, 1998 have been
reclassified to conform to the current period's presentations.

In June 1997, the Financial Accounting Standards Board ("FASB") issued Statement
No. 130,  "Reporting  Comprehensive  Income"  ("SFAS  130").  This  standard was
adopted by the Company for the fiscal year beginning September 1, 1998. SFAS 130
establishes standards for reporting and displaying  comprehensive income and its
components.  Comprehensive  income is defined  as the change in equity  during a
period from  transactions  and other  events and  circumstances  from  non-owner
sources  and  includes  all  changes  in  equity  during a period  except  those
resulting from  investments by and  distributions  to owners.  All prior periods
presented have been restated.

NOTE 2 - SHAREHOLDER MATTERS

At the annual meeting of  shareholders  held on November 24, 1998,  shareholders
approved the change in the Company's name from Laidlaw  Environmental  Services,
Inc. to Safety-Kleen Corp.

In addition,  the shareholders also approved a one-for-four  reverse stock split
which became  effective at the close of business on November 30, 1998.  For each
four shares of Safety-Kleen  common stock, one share of new Safety-Kleen  common
stock will be issued.  In connection with the reverse stock split, the number of
common  shares  available  for  issuance  was  reduced  from 750  million to 250
million.  As a result  prior  period  shares  issued and  outstanding,  weighted
average  common stock  outstanding  and basic and diluted  income per share have
been restated to reflect the reverse split.


                                       6
<PAGE>

NOTE 3 - COMMITMENTS AND CONTINGENCIES

Legal Proceedings:

TAX MATTERS.  Laidlaw  Inc.'s United States  subsidiaries  petitioned the United
States Tax Court (captioned as Laidlaw Transportation, Inc. and Subsidiaries et.
al v.  Commissioner of Internal  Revenue,  Docket Nos. 9361-94 and 9362-94) with
respect to their  consolidated  federal  income tax returns (which until May 15,
1997 included  certain of the  Company's  United  States  subsidiaries)  for the
fiscal years ended August 31, 1986,  1987 and 1988. The principal issue involved
related  to  the  timing  and   deductibility   for  tax  purposes  of  interest
attributable  to loans owing to related  foreign  persons.  Judge John O. Colvin
issued an opinion on June 30, 1998  concluding that advances from Laidlaw Inc.'s
related  foreign  entity,  were  equity  rather  than  debt  and  that  interest
deductions  claimed  were  disallowed.  Based  on this  opinion,  taxes of $46.2
million (plus interest of  approximately  $92.2 million as of November 30, 1998)
would be payable.

Similar  claims have been asserted with respect to Laidlaw  Inc.'s  consolidated
federal income tax returns for the fiscal years ended August 31, 1989,  1990 and
1991. A petition has been filed with the United States Tax Court with respect to
these years  (captioned  as Laidlaw  Transportation,  Inc. and  Subsidiaries  v.
Commissioner of Internal Revenue,  Docket No. 329-98). The income taxes at issue
for these years is approximately  $143.4 million (plus interest of approximately
$164.3 million as of November 30, 1998).

In September 1998, Laidlaw Inc.'s United States  subsidiaries  received a thirty
day letter proposing that the subsidiaries pay additional taxes of approximately
$96.0 million (plus interest of  approximately  $54.5 million as of November 30,
1998)  relating to disallowed  deductions in federal  income tax returns for the
fiscal years ended August 31, 1992, 1993 and 1994 based on the same issues.

Entry of the  decision  relating to the Tax Court  opinion has been  deferred to
allow  Laidlaw  Inc.  and the  Commissioner  of  Internal  Revenue  to engage in
discussions  to resolve  issues  relating to all fiscal  years from 1986 through
1994. Should these negotiations be unsuccessful,  the Company expects Laidlaw to
appeal  the  opinion  of the  Tax  Court  and  vigorously  contest  the  claimed
deficiencies  for subsequent  fiscal years.  Should Laidlaw Inc.'s United States
subsidiaries  ultimately be required to pay all claims on these issues, the cost
(including  interest  as of  November  30,  1998)  could be  approximately  $500
million.

Pursuant  to the Stock  Purchase  Agreement  dated  February  6, 1997  among the
Company,  Laidlaw Inc.  ("Laidlaw") and Laidlaw  Transportation,  Inc.,  ("LTI")
Laidlaw and LTI are  responsible  for any tax  liabilities  resulting from these
matters. The Company believes that the ultimate disposition of these issues will
not have a materially adverse effect upon the Company's  consolidated  financial
position or results of operations.

NOTE 4 - SUBSEQUENT EVENT

On December 23, 1998, the Company announced the recapitalization of its European
operations  resulting  in the sale of 56% of the  Company's  equity  interest in
those  operations.  As a result of the  recapitalization  the  Company  received
proceeds totaling $154.0 million which was used to pay down borrowings under the
revolver tranche of the Senior Credit Facility.  The transaction  resulted in no
gain or loss.

On a proforma  basis,  the  Company's  long term debt at  November,  30, 1998 of
$1,810 million will be reduced to $1,663 million.  As a result the proforma long
term debt to equity ratio will be reduced from 1.79 to 1.65.


                                       7
<PAGE>

NOTE 5 - STOCKHOLDERS' EQUITY

Changes in the components of  stockholders'  equity,  restated for the effect of
the one-for-four  reverse stock split, since September 1, 1998 are as follows ($
in thousands):


<TABLE>
<CAPTION>

                                                        Cumulative
                                                         Foreign
                                          Additional     Currency                       Total
                               Common      Paid-in      Translation    Accumulated   Stockholders'
                               Stock       Capital       Adjustment      Deficit        Equity
                               ------     ----------    -----------    -----------   -------------
<S>                            <C>        <C>            <C>            <C>           <C>    

Balance at September 1, 1998   $87,746    $1,182,547     $(18,828)     $ (236,759)    $1,014,706
Net income for period              --            --           --           27,772         27,772
Issuance of shares (Note A)        635         8,115          --              --           8,750
Cumulative foreign
  currency translation
  adjustment                       --            --         1,492             --           1,492
                               -------    ----------     --------      ----------     ----------
Balance at November 30, 1998   $88,381    $1,190,662     $(17,336)       (208,987)    $1,052,720
                               =======    ==========     ========      ==========     ==========
</TABLE>

     Note A: To satisfy interest  payments due on November 15, 1998 subordinated
             convertible debenture.

NOTE 6 - SUMMARIZED FINANCIAL INFORMATION

The Senior  Subordinated  Notes (the "Notes") issued by  Safety-Kleen  Services,
Inc.,  a  consolidated  subsidiary  of the  Company,  are jointly and  severally
guaranteed by Safety-Kleen Corp. and all wholly-owned  domestic  subsidiaries of
the  Company  on a full and  unconditional  basis.  The  Notes  contain  certain
covenants  which,  among other  things,  restrict the payment of dividends  from
Safety-Kleen Services,  Inc. and its subsidiary guarantors to Safety-Kleen Corp.
Summarized  financial  information for each of Safety-Kleen Corp.,  Safety-Kleen
Services, Inc., the subsidiary guarantors,  and the subsidiary non-guarantors on
a consolidating  basis are presented below.  Separate  financial  statements and
other disclosures  concerning the subsidiary guarantors are not included because
management believes that they are not material to investors.


                                       8
<PAGE>

                      Consolidating Condensed Balance Sheet
                                November 30, 1998
                                   (unaudited)

<TABLE>
<CAPTION>
                                                                                                        Consolidating
                                              Safety-Kleen  Safety-Kleen   Subsidiary     Subsidiary     Eliminating    Consolidated
($ in Thousands)                                 Corp.      Services, Inc. Guarantors   Non-Guarantors     Entries          Total
                                              ------------  --------------  ----------  --------------  -------------   ------------
<S>                                            <C>           <C>           <C>           <C>            <C>            <C>
                                            
ASSETS                                                  
Current assets ..............................  $             $             $  394,604    $   164,008    $       --     $  558,612
Property, plant and equipment, net ..........        --             --      2,436,362        406,342            --      2,842,704
Investment in Subsidiaries ..................   1,530,759    2,778,882      1,322,154            109     (5,631,904)          -- 
Goodwill ....................................         --            --        940,362         78,641            --      1,019,003
Other non-current assets ....................         --            --         52,467            780            --         53,247
                                               ----------    ----------    ----------     ----------    -----------    ----------
Total assets ................................  $1,530,759    $2,778,882    $5,145,949    $   649,880    $(5,631,904)   $4,473,566
                                               ==========    ==========    ==========     ==========    ===========    ==========

LIABILITIES
Current liabilities .........................  $    2,839    $   90,029    $  207,772    $   134,592    $       --     $  435,232
Non-current liabilities .....................         --             --       721,944        103,645            --        825,589
Long-term debt ..............................     125,200     1,620,755        14,972         49,098            --      1,810,025
Subordinated convertible debenture ..........     350,000           --            --             --             --        350,000
                                               ----------    ----------    ----------      ---------    -----------    ----------

Total liabilities ...........................     478,039     1,710,784       944,688        287,335            --      3,420,846

STOCKHOLDERS' EQUITY ........................   1,052,720     1,068,098     4,201,261        362,545     (5,631,904)    1,052,720
                                               ----------    ----------    ----------     ----------    -----------    ----------
Total liabilities and stockholder's equity ..  $1,530,759    $2,778,882    $5,145,949    $   649,880    $(5,631,904)   $4,473,566
                                               ==========    ==========    ==========     ==========    ===========    ==========

</TABLE>

<TABLE>
<CAPTION>


                   Consolidating Condensed Statement of Income
                      Three Months Ended November 30, 1998
                                   (unaudited)

                                                                             Consolidating
                                                Safety-Kleen   Safety-Kleen   Subsidiary      Subsidiary   Eliminating  Consolidated
($ in Thousands)                                    Corp.     Services, Inc.  Guarantors    Non-Guarantor    Entries       Total
<S>                                               <C>           <C>            <C>             <C>           <C>         <C>

Total revenues ................................   $     --      $    --        $ 354,362      $ 123,171     $ (10,514)   $ 467,019
Operating expenses ............................         --           --          300,382         86,975       (10,514)     376,843
                                                  ---------     --------       ---------      ---------     ---------    ---------
Operating income ..............................        --           --            53,980         36,196          --         90,176
Interest expense (income) , net ...............       6,412       36,591          (7,400)         7,481          --         43,084
Undistributed earnings (losses) of subsidiaries      31,299       51,424             --             --        (82,723)         -- 
                                                  ---------     --------       ---------      ---------     ---------    ---------
Income (loss) from income tax .................      24,887       14,833          61,380         28,715       (82,723)      47,092
expense
Income tax expense (benefit) ..................      (2,885)     (16,466)         34,995          3,676           --        19,320
                                                  ---------     --------       ---------      ---------     ---------    ---------
 Income tax ...................................   $  27,772     $ 31,299       $  26,385      $  25,039     $ (82,723)   $  27,772
                                                  =========     ========       =========      =========     =========    =========
</TABLE>

                                       9
<PAGE>
<TABLE>
<CAPTION>

                              Consolidating Condensed Statement of Cash Flows
                                     Three Months Ended November 30, 1998
                                                  (unaudited)

                                                                                                   Consolidating
                                          Safety-Kleen  Safety-Kleen    Subsidiary   Subsidiary     Eliminating  Consolidated
($ in Thousands)                             Corp.      Services, Inc.  Guarantors  Non-Guarantors     Entries       Total
                                             -----      -------------   ----------  --------------     -------       -----
<S>                                          <C>          <C>           <C>            <C>                 <C>     <C>

Net cash provided by (used in) operating
  activities                                  $(3,527)    $(18,185)      $107,126      $(29,211)           $-      $56,203
                                              --------    ---------      --------      ---------            -      -------
Cash flow from investing activities:
Cash acquired on acquisition of business             -            -       (4,058)              -            -      (4,058)
Purchase of plant, property and equipment            -            -      (10,300)        (4,124)            -     (14,424)
Proceeds from sale of property, plant
  and equipment                                      -            -          693            397             -        1,090
Net increase in long-term investments                -            -          (53)              -            -         (53)
Net cash provided by (used in) investing
  activities                                         -            -      (13,718)        (3,727)            -     (17,445)
                                                 -----      -------     --------        -------             -     --------
Cash flow from financing activities:
Repayment of long-term debt                          -     (44,611)         (696)              -            -     (45,307)
Intercompany payable (receivable)                3,527       62,796      (96,624)        30,301             -            -
                                                 -----       ------      --------        ------             -            -
Net cash provided by (used in) financing
  activities                                     3,527       18,185      (97,320)        30,301             -     (45,307)
                                                 -----       ------      --------         ------            -     --------
Effect of exchange rates changes on cash             -            -            -         (5,203)            -      (5,203)
                                                 -----       ------      -------        -------             -      -------
Net decrease in cash and cash equivalents            -            -       (3,912)        (7,840)            -     (11,752)
Cash and cash equivalents at:
  Beginning of period                                -            -        4,343         11,990             -      16,333
                                                 -----       ------     --------         ------             -       ------
  End of period                                  $   -       $    -     $    431        $ 4,150            $-     $ 4,581
                                                 =====       ======     ========        =======            ==     =======


</TABLE>


                                       10
<PAGE>


<TABLE>
<CAPTION>

                      Consolidating Condensed Balance Sheet
                                 August 31, 1998
                                   (unaudited)

                                                                                                       Consolidating
                                            Safety-Kleen  Safety-Kleen     Subsidiary    Subsidiary     Eliminating    Consolidated
($ in Thousands)                               Corp.      Services, Inc.   Guarantors  Non-Guarantors     Entries         Total
                                            ------------  --------------   ----------  --------------  -------------   -------------
<S>                                          <C>           <C>            <C>           <C>             <C>             <C>

ASSETS                                                  
Current assets ............................. $      --     $   --         $   439,751   $   111,060     $       --      $  550,811
Property, plant and equipment, net .........        --             --       2,454,211       396,331             --       2,850,502
Investment in Subsidiaries .................  1,496,759     2,776,635       1,322,059           166      (5,595,659)           -- 
Goodwill ...................................        --            --          951,655        71,499             --       1,023,154
Other non-current assets ...................        --            --           52,134           771             --          52,905
                                             ----------    ----------      ----------   -----------     -----------     ----------
Total assets ............................... $1,496,759    $2,776,635     $ 5,219,810   $   579,827     $(5,595,659)    $4,477,372
                                             ==========    ==========     ===========   ===========     ===========     ==========
LIABILITIES
Current liabilities ........................ $    6,853    $   88,089     $   246,359   $    83,617     $        (2)    $  424,916
Non-current liabilities ....................        --             --         722,622       111,964             --         834,586
Long-term debt .............................    125,200     1,661,989          16,334        49,641             --       1,853,164
Subordinated convertible debenture .........    350,000           --              --            --              --         350,000
                                             ----------    ----------     -----------   -----------     -----------     ----------
Total liabilities ..........................    482,053     1,750,078         985,315       245,222              (2)     3,462,666

STOCKHOLDERS' EQUITY .......................  1,014,706     1,026,557       4,234,495       334,605      (5,595,659)     1,014,706
                                             ----------    ----------      ----------   -----------      -----------    ----------
Total liabilities and stockholders equity .. $1,496,759    $2,776,635     $ 5,219,810   $   579,827     $(5,595,659)    $4,477,372
                                             ==========    ==========     ===========   ===========     ===========     ==========
</TABLE>
 
<TABLE>
<CAPTION>

                   Consolidating Condensed Statement of Income
                      Three Months Ended November 30, 1997
                                   (unaudited)

                                                                                          Consolidating
                                                Safety-Kleen  Safety-Kleen    Subsidiary   Subsidiary      Eliminating  Consolidated
($ in Thousands)                                   Corp.      Services, Inc.  Guarantors  Non-Guarantor     Entries        Total
                                                ------------  --------------  ----------  --------------  -------------  -----------
<S>                                              <C>            <C>           <C>           <C>              <C>          <C>

Total revenues ................................. $     --       $     --      $ 165,601     $  45,951        $    --     $ 211,552
Operating expenses .............................       --             --        144,889        34,732             --       179,621
                                                 ---------      ---------     ---------     ---------        --------    ---------
Operating income ...............................       --             --         20,712        11,219             --        31,931
Interest expense, net ..........................     6,370          6,597          (698)        2,291             --        14,560
Undistributed earnings (losses) of subsidiaries     13,647         17,275           --            --          (30,922)         -- 
                                                 ---------      ---------     ---------     ---------        --------    ---------
Income (loss) from income tax expense ..........     7,277         10,678        21,410         8,928         (30,922)      17,371
Income tax expense (benefit) ...................    (2,867)        (2,969)        9,808         3,255             --         7,227
                                                 ---------      ---------     ---------     ---------        --------    ---------
Net income ..................................... $  10,144      $  13,647     $  11,602     $   5,673        $(30,922)   $  10,144
                                                 =========      =========     =========     =========        ========    =========
</TABLE>
                                      11
<PAGE>

<TABLE>
<CAPTION>

                                Consolidating Condensed Statement of Cash Flows
                                     Three Months Ended November 30, 1997
                                                  (unaudited)

                                                                                                    Consolidating
                                          Safety-Kleen  Safety-Kleen    Subsidiary   Subsidiary      Eliminating   Consolidated
($ in Thousands)                             Corp.      Services,Inc.   Guarantors   Non-Guarantors    Entries        Total
                                             -----      -------------  ---------- --------------       -------        ----- 
<S>                                          <C>          <C>           <C>            <C>               <C>        <C>
Net cash provided by (used in) operating
  activities                                  $(3,503)     $(2,011)      $15,954        $14,659           $-        $25,099
                                              --------     --------      -------        -------           ---       -------
Cash flow from investing activities:
Cash expended on acquisition of business             -            -          -              -              -              -
Purchase of plant, property and equipment            -            -       (4,846)        (3,644)           -         (8,490)
Net increase in long-term investments                -            -      (12,811)                          -        (12,811)
Other, net                                           -            -       (3,126)             3            -         (3,123)
                                              --------    ---------      -------        -------           ---       -------
Net cash used in investing
  activities                                         -            -      (20,783)        (3,641)           -        (24,424)
                                              --------    ---------     --------        -------           ---      --------
Cash flow from financing activities:
Exercise of stock options                          528            -          -                -            -            528
Repayment of long-term debt                          -      (1,650)        (870)              -            -         (2,520)
Intercompany payable (receivable)                2,975        3,661       24,072        (30,678)           -              -
                                                 -----      -------       ------       --------            -         ------
Net cash provided by (used in) financing
  activities                                     3,503        2,011       23,202        (30,678)           -         (1,992)
                                                 -----      -------       ------       --------            -        -------
Effect of exchange rates changes on cash             -            -          -           (5,203)           -              -
                                                ------      -------       ------       --------           ---       -------
Net increase (decrease) in cash and cash
   equivalents                                                            18,373        (24,863)           -         (1,317)
Cash and cash equivalents at:
  Beginning of period                                -            -        4,343         11,990            -         11,160
                                               -------      -------      -------        ------            --         ------
  End of period                                $     -       $    -      $22,716       $(12,873)          $-         $9,873
                                               =======      =======      =======       =========          ===        ======

</TABLE>

                                      12
<PAGE>


ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.

     The following  discussion and analysis  should be read in conjunction  with
the  Company's  consolidated  financial  statements  and related  notes  thereto
included elsewhere herein.

     Results associated with the April 1, 1998 acquisition of Safety-Kleen Corp.
("Old Safety-Kleen") have been included in the Company's consolidated results as
of the date of the acquisition.

     The  following   discussion  and  analysis  includes  statements  that  are
considered  forward-looking  based on the Company's  expectations  and, as such,
these  statements  are subject to  uncertainty  and risk.  See "Factors That May
Affect Future Results" below.

RESULTS OF OPERATIONS:

Three Months Ended  November 30, 1998 compared with Three Months Ended  November
30, 1997

Operating results are as follows ($ in millions):

                                             Three Months Ended November 30,
                                                  1998              1997

Revenues .................................  $467.0    100.0%   $211.6   100.0%
Operating expense ........................   305.0     65.3%    145.4    68.7%
Depreciation and amortization ............    37.3      8.0%     13.9     6.6%
Selling, general and administrative ......    34.5      7.4%     20.4     9.6%
                                            ------    ------   ------   ----- 
Operating income .........................  $ 90.2     19.3%   $ 31.9    15.1%
                                            ======    ======   ======    =====

Revenues

Components of revenue ($ in millions):           Three Months Ended November 30,
                                                 -------------------------------
                                                        1998            1997
                                                  ------------------------------
Collection and Recovery Services
    Industrial Services ........................  $206.2     44%   118.4     56%
    Commercial and Institutional Services ......   134.7     29%     0.0      0%
                                                  ------    ---    -----    ----
Total Collection and Recovery Services .........   340.9     73%   118.4     56%

Treatment and Disposal Services ................    94.4     20%    93.2     44%

European Operations ............................    31.7      7%     0.0      0%
                                                            ----   -----    ----

     Total revenue .............................  $467.0    100%   211.6    100%
                                                  ======    ====   =====    ====
                                                                            
     Revenues  increased $255.4 million,  or 121%, during the three months ended
November 30, 1998 compared to the three months ended November 30, 1997.  Revenue
from collection and recovery  services to industrial  customers  increased $87.8
million,  or 74%,  while the addition of  collection  and  recovery  services to
commercial and institutional  customers  generated an additional $134.7 million.
Increased  revenue from collection and recovery  services reflects the inclusion
of the acquired Old Safety-Kleen  business.  Revenue from treatment and disposal
services  increased $1.2 million,  or 1%, primarily due to an increased revenues
related to the Company's  harbor  dredging,  treatment and disposal  activities.
Within the treatment and disposal component,  revenues  attributable to landfill
disposal were negatively effected due to the sale of an industrial and municipal
solid waste landfill on December 18, 1997. The acquired  European  operations of


                                       13
<PAGE>

Safety-Kleen  provided an  additional  $31.7  million in revenue.  The  European
operations  component  derives its revenue from collection and recovery services
activities.
  
   The Company eliminates  inter-company  revenues in presenting  consolidated
financial  results.  The majority of such  eliminations  occur at the  Company's
disposal  facilities  which receive waste streams from the Company's  collection
and recovery services network.

     Management's  estimate of the  components  of the changes in the  Company's
consolidated revenue is as follows:

                                                 Percentage Increase (Decrease)
                                                 Three Months Ended November 30,
                                                 -------------------------------
                                                 1998 over 1997   1997 over 1996
                                                 --------------   --------------
Expansion of customer base by acquisition            122.4%           23.5%
Other, primarily through volume and price changes      3.7%            4.5%
Divestitures and closures                             (3.6%)          (4.9%)
Foreign exchange rate changes                         (1.8%)          (0.5%)
                                                      ----            ------
     Total                                           120.7%           22.6%
                                                     ======           ======

     The comparative increase in revenue for the three months ended November 30,
1998 was  primarily  due to the  inclusion  of the  acquired  operations  of Old
Safety-Kleen.  Current  revenues  from existing  operations  grew as a result of
increased  revenue from the Company's  harbor  related  dredging,  treatment and
placement  operations.  Prior  year  revenues  included  contributions  from  an
industrial and municipal solid waste landfill which was divested on December 18,
1997. A reduction in revenues due to foreign exchange rate changes resulted from
a relative decline in the Canadian dollar translation rate.

Operating Expenses

     Operating  expenses  increased  $159.6 million,  or 110%,  during the three
months ended November 30, 1998,  compared to the three months ended November 30,
1997. The increase was primarily attributable to additional business obtained as
part  of the  acquisition  of Old  Safety-Kleen.  As a  percentage  of  revenue,
operating expense decreased to 65.3% from 68.7% in the prior year, primarily due
to the increased utilization of existing facilities and acquisition related cost
reduction measures.

Depreciation and Amortization Expense

     Depreciation and  amortization  expense  increased $23.4 million,  or 168%,
during the three months ended November 30, 1998, compared to the prior year. The
increase related to the acquired operations of Old Safety-Kleen. As a percentage
or revenue,  depreciation and amortization expense was 8.0%, compared to 6.6% in
the  prior  year.   The  increase  as  a  percentage  of  revenue  is  primarily
attributable  to the  amortization  of the excess purchase price relating to the
acquisition of Old Safety-Kleen.

Selling, General and Administrative Expenses

        Selling, general and administrative expenses increased $14.1 million, or
69% during the three months ended November 30, 1998, versus the prior year. As a
percentage of revenue, selling, general and administrative expenses decreased to
7.4% from 9.6% in the prior year due to cost reduction measures and economies of
scale gained through the acquisition of Old Safety-Kleen.

                                       14
<PAGE>


Interest Expense

     Interest expense increased $29.3 million,  or 200%, during the three months
ended November 30, 1998,  over the prior year as a result of the additional long
term debt incurred to finance the acquisition of Old Safety-Kleen.

Income Tax Expense

     Income tax expense increased $12.1 million, or 67%, during the three months
ended  November  30,  1998,  over the prior year due to an  increase  in taxable
income attributable to the acquisition of Old Safety-Kleen.  The average rate of
41.1% was consistent with the 41.6% recorded in the prior year.

FACTORS THAT MAY AFFECT FUTURE RESULTS

     This report contains various forward-looking  statements within the meaning
of the Private Securities  Litigation Reform Act of 1995,  including  financial,
operating and other projections. These statements are based on current plans and
expectations of the Company and involve risks and uncertainties that could cause
actual future  activities  and results of operations to be materially  different
from those set forth in the forward-looking statements.

     Important factors that could cause actual results to differ include,  among
others,  risks  associated  with  acquisitions  and  achieving the targeted cost
savings  levels,  fluctuations  in operating  results  because of  acquisitions,
changes in applicable  government  regulations  (environmental  and other),  the
impact of litigation,  competition, and risks associated with the operations and
growth of the newly  acquired  business of Old  Safety-Kleen  and other  factors
described in Part I, Item 1 of the Company's  report on Form 10-K for the twelve
months  ended  August 31,  1998.  As a result of these  factors,  the  Company's
revenue and income could vary  significantly  from quarter to quarter,  and past
financial  performance  should not be considered a reliable  indicator of future
performance.

CAPITALIZATION

     On April 1, 1998, the Company announced that Old Safety-Kleen  shareholders
had accepted its exchange offer,  as amended on March 16, 1998,  relating to the
acquisition of Old  Safety-Kleen  by the Company.  Under the terms of the offer,
the Company  exchanged  $18.30 (pre  reverse  split) and 2.8 common  shares (pre
reverse split) of Company stock for each Old Safety-Kleen share tendered. In May
1998, the Company  completed the acquisition of Old Safety-Kleen  (collectively,
the "Safety-Kleen  Acquisition") through a back-end merger,  approved by the Old
Safety-Kleen   shareholders  on  May  18,  1998.  The  total   consideration  of
approximately  $2.2 billion,  including  debt assumed and estimated  transaction
costs,  was comprised of $1.5 billion cash and 166.5 million shares (pre reverse
split) of Company common stock.  The cash  consideration  and the refinancing of
certain  existing  indebtedness was financed from the proceeds of a $2.2 billion
Senior Credit Facility (the "Senior Credit Facility").

     On May 29, 1998, Safety-Kleen Services,  Inc., a wholly-owned subsidiary of
the Company,  issued $325 million 9.25% Senior  Subordinated Notes due 2008 (the
"Notes") in a rule 144A offering. Net proceeds from the sale of the Notes, after
the underwriting  discount and other expenses,  were approximately $316 million.
The proceeds were used to repay a portion of the  borrowings  outstanding  under
the Senior Credit Facility.


                                       15
<PAGE>


     On November 24, 1998,  the Company's  shareholders  approved a one-for-four
reverse stock split which became effective at the close of business November 30,
1998. As a result,  shareholders  received one share of new Safety-Kleen  common
stock for each four shares previously held.

LIQUIDITY

     Total cash  provided by operations  during the three months ended  November
30, 1998 was $56.2 million.  This was composed of $84.6 million from  operations
before  working  capital  sources of $3.7 million and $32.1  million  related to
spending on acquisition liabilities.

     On December 23, 1998,  the Company  announced the  recapitalization  of its
European  operations  resulting  in the  sale  of 56%  of the  Company's  equity
interest in those operations.  As a result of the  recapitalization  the Company
received $154.0 million which was used to pay down borrowings under the revolver
tranche of the Senior Credit Facility.  On a pro forma basis, the Company's long
term debt at  November  30,  1998 of $1,810  million  will be  reduced to $1,663
million.  As a result,  the pro forma  long  term debt to equity  ratio  will be
reduced from 1.79 to 1.65.

     The Company's  primary sources of liquidity are cash flows from operations,
existing cash and  short-term  investments  of $4.6 million,  short-term  unused
working  capital  bank lines of $7.4  million and the unused cash portion of the
Senior  Credit  Facility's  revolver  tranche  of $218.0  million  (prior to the
aforementioned   European   operations   recapitalization   and  resulting  debt
reduction).

     The  Company  expects to fund  capital  expenditures,  debt  repayment  and
environmental liability requirements from cash flows from operations.

CAPITAL EXPENDITURES AND CAPITAL RESOURCES

     Investing  activities  for the three months ended  November 30, 1998,  used
cash of $18.2  million.  Net  expenditures  for the purchase of fixed assets for
normal replacement requirements and increases in services were $18.3million. The
Company's projected capital expenditures for fiscal 1999 are approximately $80.0
million.  The Company  believes that it has adequate  resources to finance these
expenditures.

     The Company's  Senior Credit Facility  contains  negative,  affirmative and
financial  covenants  customarily  found in  credit  agreements  for  financings
similar to the financing  provided under the Senior Credit  Facility,  including
covenants limiting annual capital  expenditures,  restricting debt,  guaranties,
liens, mergers and consolidations, sales of assets and payment of dividends. The
Company was in compliance with all of its covenants at November 30, 1998. 

     The long  term debt  agreements  of  Safety-Kleen  Services,  Inc.  and its
subsidiaries contain certain covenants that restrict the payment of dividends to
Safety-Kleen Corp.

YEAR 2000 ISSUES

     The Year 2000  ("Y2K")  issue is the result of  computer  programs  using a
two-digit format, as opposed to four digits, to indicate the year. Such computer
programs  will be unable to interpret  dates  beyond the year 1999,  which could
cause a system  failure or other  computer  errors,  leading to  disruptions  in
operations.  The  Company  developed  a  three-phase  program  for  Y2K  systems
compliance.  Phase I identified  those systems with respect to which the Company
has exposure to Y2K issues.  Phase II was the development and  implementation of
action plans for Y2K compliance. Phase III, to be completed by mid-calendar year
1999, is the final testing of the appropriate  major areas of exposure to ensure
compliance.

 

                                       16
<PAGE>

     Phase I was completed in early fiscal year 1998 and identified three major
areas of Y2K non-compliance:

     (1) certain modules of the Company's financial and operational systems, 
     (2) incinerator distributed control systems, and
     (3) third-party vendor relationships.

     The Phase II action plans have been  developed and the Company is currently
implementing  those  remedial  plans.  The  Company's  plan to  bring  deficient
financial systems into compliance  through the previously  scheduled purchase of
software   upgrades  has  been  accomplished  and  these  upgrades  have  tested
satisfactorily.  Remediation  of the  operational  systems will be  accomplished
through a combination of hardware and software upgrades and program changes. The
Company  expects this process to be completed  by  mid-calendar  year 1999.  The
deficiencies in the incinerator  distributed control systems will be remedied by
the installation of upgrades purchased from the systems vendors. With respect to
the third-party  vendors,  the Company has contacted most of its major suppliers
and has  received  indications  that they are either  compliant  or intend to be
compliant by mid-calendar year 1999.

     The Company  believes  it will spend  approximately  $10.0  million for Y2K
compliance and will require 20,000  programming  man days to bring the Company's
computer systems into compliance,  including Old Safety-Kleen  issues.  To date,
the Company has completed approximately 15,000 programming man days towards this
effort.  $1.4 million was  incurred in fiscal year 1998,  with the balance to be
incurred in fiscal year 1999.

     The Company believes that the action plans that have been developed and the
implementation  time  frames  that have been  established  adequately  allow for
unexpected issues that could arise,  therefore,  contingency plans have not been
prepared.   The  Company  will  monitor  the  remaining  time  to  complete  the
implementation and will review the requirement to prepare contingency plans on a
monthly basis.

                          PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS.

 GENERAL

     The business of the Company's  hazardous and  industrial  waste services is
continuously regulated by federal,  state,  provincial and local provisions that
have been enacted or adopted,  regulating  the  discharge of materials  into the
environment  or primarily for the purpose of  protecting  the  environment.  The
nature of the Company's businesses results in its frequently becoming a party to
judicial or  administrative  proceedings  involving  all levels of  governmental
authorities and other interested parties. The issues that are involved generally
relate to  applications  for  permits  and  licenses  by the  Company  and their
conformity with legal requirements and alleged technical  violations of existing
permits and  licenses.  The Company  does not believe  that these issues will be
material to the  Company's  operations or financial  condition.  At November 30,
1998,  subsidiaries  of the Company  were  involved in nine  proceedings  of the
latter type relating  primarily to activities  at waste  treatment,  storage and
disposal  facilities  where the  Company  believes  sanctions  involved  in each
instance may exceed $100,000. The Company believes that the ultimate disposition
of these issues will not have a  materially  adverse  effect upon the  Company's
consolidated financial position or results of operations.



                                       17
<PAGE>
 
    The Company frequently becomes a party to legal proceedings wherein persons
claim injury resulting from the use of Company's parts cleaner  equipment and/or
cleaning  products.  A number of legal  proceedings of this nature are currently
pending in various  courts  and  jurisdictions  throughout  North  America.  The
Company believes that the ultimate  disposition of these legal  proceedings will
not have a materially adverse effect upon the Company's  consolidated  financial
position or results of operations.

     In the United States, CERCLA imposes financial liability on persons who are
responsible  for the  release  of  hazardous  substances  into the  environment.
Present  and  past  owners  and  operators  of  sites  which  release  hazardous
substances,  as well as generators and  transporters of the waste material,  are
jointly and severally liable for remediation costs and environmental  damage. At
November  30,  1998,  the Company had been  notified  that it was a  potentially
responsible  party  in  connection  with 45  locations  in its  hazardous  waste
management and other businesses. The Company continually reviews its status with
respect to each  location  and the  extent of its  alleged  contribution  to the
volume of waste at the location,  the available evidence  connecting the Company
to that location,  and the numbers and financial  soundness of other potentially
responsible parties at the location. Based upon presently available information,
the  Company  does not  believe  that  potential  liabilities  arising  from its
involvement with these locations will be material to the Company's operations or
financial condition.

TAX MATTERS

     Laidlaw Inc.'s United States subsidiaries  petitioned the United States Tax
Court  (captioned as Laidlaw  Transportation,  Inc. and  Subsidiaries  et. al v.
Commissioner of Internal Revenue,  Docket Nos. 9361-94 and 9362-94) with respect
to their  consolidated  federal  income tax  returns  (which  until May 15, 1997
included  certain of the Company's  United States  subsidiaries)  for the fiscal
years ended August 31, 1986, 1987 and 1988. The principal issue involved related
to the timing and  deductibility  for tax purposes of interest  attributable  to
loans owing to related foreign  persons.  Judge John O. Colvin issued an opinion
on June 30, 1998  concluding  that advances from Laidlaw Inc.'s related  foreign
entity,  were equity rather than debt and that interest  deductions claimed were
disallowed.  Based on this opinion,  taxes of $46.2  million  (plus  interest of
approximately $92.2 million as of November 30, 1998) would be payable.

         Similar  claims  have been  asserted  with  respect to  Laidlaw  Inc.'s
consolidated  federal  income tax returns for the fiscal  years ended August 31,
1989,  1990 and 1991. A petition has been filed with the United States Tax Court
with  respect to these years  (captioned  as Laidlaw  Transportation,  Inc.  and
Subsidiaries v. Commissioner of Internal Revenue, Docket No. 329-98). The income
taxes at issue for these years is approximately $143.4 million (plus interest of
approximately $164.3 million as of November 30, 1998).

         In September 1998, Laidlaw Inc.'s United States subsidiaries received a
thirty  day letter  proposing  that the  subsidiaries  pay  additional  taxes of
approximately  $96.0 million (plus interest of approximately $54.5 million as of
November 30,  1998)  relating to  disallowed  deductions  in federal  income tax
returns for the fiscal years ended  August 31, 1992,  1993 and 1994 based on the
same issues.

         Entry  of the  decision  relating  to the Tax  Court  opinion  has been
deferred to allow  Laidlaw  Inc.  and the  Commissioner  of Internal  Revenue to
engage in discussions  to resolve issues  relating to all fiscal years from 1986
through 1994.  Should these  negotiations be  unsuccessful,  the Company expects
Laidlaw  to appeal  the  opinion  of the Tax Court and  vigorously  contest  the
claimed  deficiencies for subsequent fiscal years.  Should Laidlaw Inc.'s United
States  subsidiaries  ultimately  be required to pay all claims on these issues,
the cost  (including  interest as of November 30,  1998) could be  approximately
$500 million.


                                       18
<PAGE>
 
    Pursuant to the Stock Purchase  Agreement  dated February 6, 1997 among the
company,  Laidlaw Inc.  ("Laidlaw") and Laidlaw  Transportation,  Inc.  ("LTI"),
Laidlaw and LTI are  responsible  for any tax  liabilities  resulting from these
matters. The Company believes that the ultimate disposition of these issues will
not have a materially adverse effect upon the Company's  consolidated  financial
position or results of operations.

     Other than as herein  reported  there have been no  additional  significant
legal proceedings nor any material changes in the legal proceedings  reported in
Part II, Item 3 of the  registrant's  report on Form 10-K for the twelve  months
ended August 31, 1998.

ITEM 2.  CHANGES IN SECURITIES AND USE OF PROCEEDS.

     (a) On November 16, 1998, as required by the  $350,000,000  5% Subordinated
Convertible  Pay-In-Kind  debenture  (the  "Debenture")  beneficially  issued to
Laidlaw on May 15, 1997,  the  Registrant  issued  635,208  shares of its common
stock,  par value $1.00 per share ("SK  Stock") (as adjusted to reflect the one-
for-four stock split described in Item 2(b),  effective the close of business on
November 30, 1998),  beneficially to Laidlaw through  Laidlaw's  subsidiary,  as
interest  payment on the  Debenture.  The Company  believes  that the shares are
exempt from  registration  pursuant to Section  (4)(2) of the  Securities Act of
1933,  as amended  (the "Act").  In  determining  to issue the SK Stock  without
registration under the Act management  considered the fact that the offering was
being made to a single offeree in connection with the interest payment under the
Debenture and further,  Laidlaw represented in writing to the Registrant that it
was acquiring the SK Stock for  investment and not with a view to, or for resale
in connection with, any distribution of the SK Stock.

(b)  At the close of business  on  November  30,  1998,  the Company  effected a
     one-for-four stock split with no change in par value per share ($1.00). The
     Company  also  decreased  the  number  of  shares  of  common  stock  it is
     authorized to issue from  750,000,000  shares to 250,000,000  shares.

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

     The Company's Annual Meeting of Shareholders was held on November 24, 1998.
At the meeting, the Company's Shareholders (i) elected the three individuals who
had been  nominated to be members of the Board of  Directors,  (ii) approved the
amendment to the Company's  Restated  Certificate of Incorporation to change the
name of the Company to Safety-Kleen  Corp.  (the "Name Change"),  (iii) approved
the amendment to the Company's Restated Certificate of Incorporation to effect a
one-for-four  reverse  stock split of the  Company's  Common Stock (the "Reverse
Split") and (iv) approved the amendment to the Company's Restated Certificate of
Incorporation  to  decrease  the  number of  authorized  shares of Common  stock
available for issuance from  750,000,000 to 250,000,000  (the  "Decrease").  The
following table sets forth the voting results:

                                For          Against     Withheld   Abstentions
Election of Directors:

John W. Rollins, Jr.      289,544,507          N/A       13,179,435    N/A
John R. Grainger          289,635,483          N/A       13,088,459    N/A
Grover C. Wrenn           289,641,371          N/A       13,082,571    N/A

Name Change               302,324,851        287,090        N/A      112,001

Reverse Split             295,066,957      7,364,700        N/A      292,285

Decrease                  300,148,538      2,184,853        N/A      390,551


                                       19
<PAGE>

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.

(3)(a) Restated  Certificate of  Incorporation of the Company dated May 13, 1997
and  Amendment  to  Certificate  of  Incorporation  dated May 15,  1997 filed as
Exhibit 3(a) to the  Registrant's  Form 10-Q for the Quarter  ended May 31, 1997
and incorporated herein by reference.

(3)(a)(i)  Certificate  of  Correction  Filed to Correct a Certain  Error in the
Restated and Amended  Certificate of  Incorporation of the Company dated October
15, 1997 filed as Exhibit  (3)(a)(i) to the Registrant's  Form 10-K for the Year
ended August 31, 1997, and incorporated herein by reference.

(3)(a)(ii)  Certificate of Amendment of Restated Certificate of Incorporation of
the  Company  dated  February  19,  1998,  filed as  Exhibit  (3)(a)(ii)  to the
Registrant's  Form 10-Q for the Quarter ended February 28, 1998 and incorporated
herein by reference.

(3)(a)(iii)   Certificate   of  Amendment  to  the   Restated   Certificate   of
Incorporation of the Company dated November 25, 1998.

(3)(a)(iv) Certificate of Amendment to the Restated Certificate of Incorporation
of the Company dated November 30, 1998.

(3)(b) Amended and Restated  Bylaws of the Company filed as Exhibit 4(ii) to the
Registrant's  Current  Report on Form 8-K dated July 29,  1997 and  incorporated
herein by reference.

(4)(a)  Registration Rights Agreement dated as of May 29, 1998 between LES, Inc.
(a subsidiary of the Registrant),  the Registrant,  subsidiary guarantors of the
Registrant,  TD Securities (USA) Inc. and NationsBanc  Montgomery Securities LLC
filed as Exhibit 4(a) to the Registrant's  Form S-4  Registration  Statement No.
333-57587 filed June 24, 1998 and incorporated herein by reference.

(4)(b) Indenture dated as of May 29, 1998 between LES, Inc. (a subsidiary of the
Registrant), Registrant, subsidiary guarantors of the Registrant and The Bank of
Nova Scotia Trust  Company of New York,  as trustee filed as Exhibit 4(b) to the
Registrant's  Form S-4 Registration  Statement No. 333-57587 filed June 24, 1998
and incorporated herein by reference.

(4)(c) Rights  Agreement dated as of June 14, 1989 between the Company and First
Chicago Trust Company as successor to Registrar and Transfer Company,  as Rights
Agent filed as Exhibit 4(e) to the Registrant's Current Report on Form 8-K filed
on June 13, 1995 and incorporated herein by reference.

(4)(d)  Amendment  No. 1 dated  as of March  31,  1995 to the  Rights  Agreement
between the Company and First  Chicago  Trust  Company as successor to Registrar
and Transfer Company,  as Rights Agent filed as Exhibit 4(f) to the Registrant's
Current  Report  on  Form  8-K on June  13,  1995  and  incorporated  herein  by
reference.

(4)(e)  Amendment  No. 2 dated  as of April  30,  1997 to the  Rights  Agreement
between the Company and First  Chicago  Trust  Company as successor to Registrar
and Transfer Company, as Rights Agent, filed as Exhibit 4(c) to the Registrant's
Form 10-Q for the quarter ended  November 30, 1997, and  incorporated  herein by
reference.


                                       20
<PAGE>

(4)(f) Amended and Restated  Credit  Agreement among Laidlaw  Chem-Waste,  Inc.,
Laidlaw Environmental Services (Canada) Ltd., Toronto Dominion (Texas) Inc., The
Toronto-Dominion  Bank,  TD  Securities  (USA)  Inc.,  The Bank of Nova  Scotia,
NationsBank,  N.A. and The First National Bank of Chicago and NationsBank,  N.A.
as  Syndication  Agent dated as of April 3, 1998,  filed as Exhibit  4(q) to the
Registrant's Form S-4 Registration Statement No. 333-49929 filed April 10, 1998,
and incorporated herein by reference.

(4)(g)  Supplement to the Amended and Restated  Credit  Agreement  among Laidlaw
Chem-Waste, Inc., Laidlaw Environmental Services (Canada) Ltd., Toronto Dominion
(Texas) Inc., The  Toronto-Dominion  Bank, TD Securities (USA) Inc., The Bank of
Nova  Scotia,  NationsBank,  N.A.  and The First  National  Bank of Chicago  and
NationsBank,  N.A.  as  Syndication  Agent  dated as of April 3, 1998,  filed as
Exhibit 4(e) to a subsidiary of the Registrant's Form S-4 Registration Statement
No. 333-57587 filed June 24, 1998 and incorporated herein by reference.

(4)(h) Waiver and First Amendment to the Amended and Restated  Credit  Agreement
dated  as of May 15,  1998  among  LES,  Inc.,  Laidlaw  Environmental  Services
(Canada) Ltd., the Lenders, Toronto Dominion (Texas), Inc., The Toronto Dominion
Bank, TD Securities (USA) Inc., The Bank of Nova Scotia, NationsBank,  N.A., The
First  National  Bank of Chicago and  Wachovia  Bank filed as Exhibit  4(f) to a
subsidiary of the  Registrant's  Form S-4  Registration  Statement No. 333-57587
filed June 24, 1998 and incorporated herein by reference.

(4)(i)  Commitment  to Increase  Supplement  to the Amended and Restated  Credit
Agreement  dated as of June 3,  1998  among  LES,  Inc.,  Laidlaw  Environmental
Services (Canada) Ltd., the Lenders, Toronto Dominion (Texas), Inc., The Toronto
Dominion Bank, TD Securities  (USA) Inc., The Bank of Nova Scotia,  NationsBank,
N.A., The First National Bank of Chicago and Wachovia Bank filed as Exhibit 4(g)
to a  subsidiary  of  the  Registrant's  Form  S-4  Registration  Statement  No.
333-57587 filed June 24, 1998 and incorporated herein by reference.

(4)(j) Second Amendment to the Amended and Restated Credit Agreement dated as of
November 20, 1998 among  Safety-Kleen  Services,  Inc.  (formerly  known as LES,
Inc.),   Safety-Kleen   Services  (Canada)  Ltd.   (formerly  known  as  Laidlaw
Environmental  Services  (Canada) Ltd.), the Lenders,  Toronto Dominion (Texas),
Inc.,  The Toronto  Dominion  Bank, TD Securities  (USA) Inc.,  The Bank of Nova
Scotia, NationsBank, N.A., The First National Bank of Chicago and Wachovia Bank.

(4)(k) $350,000,000 5% Subordinated  Convertible  Pay-In-Kind Debenture due 2009
issued by Registrant on May 15, 1997 to Laidlaw Transportation, Inc. the form of
which was included as an appendix to the Registrant's Definitive Proxy Statement
on Form DEF 14A, filed on May 1, 1997 and incorporated herein by reference.

(4)(l)  Registration  Rights  Agreement  dated May 15, 1997 between  Registrant,
Laidlaw  Transportation,  Inc. and Laidlaw  Inc.  included as an appendix to the
Registrant's  Definitive  Proxy Statement on Form DEF 14A, the form of which was
filed on May 1, 1997 and incorporated herein by reference.

(4)(m)  Indenture  dated as of May 1, 1993  between the  Industrial  Development
Board  of  the   Metropolitan   Government  of  Nashville  and  Davidson  County
(Tennessee)  and  NationsBank of Tennessee,  N.A.,  filed as Exhibit 4(f) to the
Registrant's  Form 10-Q for the Quarter  ended May 31,  1997,  and  incorporated
herein by reference.

(4)(n)  Indenture of Trust dated as of August 1995 between Tooele  County,  Utah
and West One Bank,  Utah, now known as U.S.  Bank, as Trustee,  filed as Exhibit
4(h) to the  Registrant's  form 10-Q for the  Quarter  ended May 31,  1997,  and
incorporated herein by reference.

(4)(o)  Indenture of Trust dated as of July 1, 1997 between Carbon County,  Utah
and U.S. Bank, a national banking association, as Trustee, filed as Exhibit 4(i)
to the  Registrant's  Form  10-Q  for  the  Quarter  ended  May  31,  1997,  and
incorporated herein by reference.

(4)(p)  Indenture of Trust dated as of July 1, 1997 between Tooele County,  Utah
and U.S. Bank, a national banking association, as Trustee, filed as Exhibit 4(j)
to the  Registrant's  Form  10-Q  for  the  Quarter  ended  May  31,  1997,  and
incorporated herein by reference.

(4)(q) Indenture of Trust dated as of July 1, 1997 between California  Pollution
Control Financing  Authority and U.S. Bank, a national banking  association,  as
Trustee,  filed as Exhibit  4(k) to the  Registrant's  Form 10-Q for the Quarter
ended May 31, 1997, and incorporated herein by reference.

(4)(r)  Promissory  Note  dated  May  15,  1997  for  $60,000,000  from  Laidlaw
Environmental  Services,  Inc. to Westinghouse  Electric  Corporation,  filed as
Exhibit 4(n) to the  Registrant's  Form 10-Q for the Quarter ended May 31, 1997,
and incorporated herein by reference.

(4)(s)  Guaranty  Agreement  dated May 15, 1997 by Laidlaw Inc. to  Westinghouse
Electric  Corporation  guaranteeing  Promissory  Note  dated  May 15,  1997  (as
referenced  in Exhibit  (4)(r)) from  Laidlaw  Environmental  Services,  Inc. to
Westinghouse  Electric  Corporation,  filed as Exhibit 4(o) to the  Registrant's
Form  10-Q for the  Quarter  ended  May 31,  1997,  and  incorporated  herein by
reference.

(4)(t)  Other  instruments  defining  the  rights  of  holders  of  debt  of the
Registrant  have been  omitted from this exhibit list because the amount of debt
authorized  under any such instrument does not exceed 10% of the total assets of
the Registrant and its subsidiaries.  The Registrant agrees to furnish a copy of
any such instrument to the Commission upon request.

(10)(a)  Agreement  and Plan of Merger  dated as of March 16,  1998 by and among
Registrant, LES Acquisition, Inc., and Safety-Kleen Corp. included as Annex A of
Safety-Kleen's  Revised Amended  Prospectus on Form 14D-9 filed as Exhibit 62 to
Safety-Kleen's  Amendment  No.  28 to  Schedule  14-9A on March  17,  1998,  and
incorporated herein by reference.

(10)(b) Stock  Purchase  Agreement  between  Westinghouse  Electric  Corporation
(Seller) and Rollins Environmental Services, Inc. (Buyer) for National Electric,
Inc. dated March 7, 1995 filed as Exhibit 2 to the  Registrant's  Current Report
on Form 8-K filed on June 13, 1995 and incorporated herein by reference.

(10)(c) Second  Amendment to Stock Purchase  Agreement (as referenced in Exhibit
(4)(q)  above),  dated May 15,  1997 among  Westinghouse  Electric  Corporation,
Rollins Environmental  Services, Inc. and Laidlaw Inc., filed as Exhibit 4(m) to
the Registrant's  Form 10-Q for the Quarter ended May 31, 1997, and incorporated
herein by reference.

(10)(d) Rollins  Environmental  Services,  Inc. 1982 Incentive Stock Option Plan
filed with Amendment No. 1 to the Company's  Registration  Statement No. 2-84139
on Form S-1 dated June 24, 1983 and incorporated herein by reference.

                                       21
<PAGE>

(10)(e) Rollins Environmental  Services,  Inc. 1993 Stock Option Plan filed with
the  Company's  Proxy  Statement  for the Annual  Meeting of  Shareholders  held
January 28, 1994 and incorporated herein by reference.

(10)(f)  Registrant's  1997  Stock  Option  Plan,  filed as  Exhibit  4.4 to the
Company's  Registration  Statement No.  333-41859 on Form S-8 dated December 10,
1997 and incorporated herein by reference.


                                       22
<PAGE>

(10)(g)  Registrant's  Director's Stock Option Plan, filed as Exhibit 4.5 to the
Company's  Registration  Statement No.  333-41859 on Form S-8 dated December 10,
1997 and incorporated herein by reference.

(10)(h) Stock Purchase  Agreement  dated February 6, 1997 among the  Registrant,
Laidlaw Inc., and Laidlaw  Transportation,  Inc.  included as an appendix to the
Definitive Proxy Statement on Form DEF 14A filed on May 1, 1997 and incorporated
herein by reference.

(10)(i) Corporate Incentive Plan for fiscal year 1999.

(10)(j) Operations Management Incentive Plan for fiscal year 1999.

(10)(k)  Laidlaw  Environmental   Services,  Inc.  U.S.  Supplemental  Executive
Retirement Plan filed as Exhibit 10(g) to the Registrant's  10-Q for the quarter
ended November 30, 1997, and incorporated herein by reference.

(10)(l) Form of Change of Control  Agreement  LES-A1,  filed as Exhibit 10(k) to
the  Registrant's  10-K for the year ended  August 31,  1998,  and  incorporated
herein by reference.

(10)(m) Form of Change of Control Agreement  LES-B-1,  filed as Exhibit 10(l) to
the  Registrant's  10-K for the year ended  August 31,  1998,  and  incorporated
herein by reference.

(10)(n)  Change of  Control  Agreement  LES-C1,  filed as  Exhibit  10(m) to the
Registrant's 10-K for the year ended August 31, 1998, and incorporated herein by
reference.

(11)    Statement of Computation of Per Share Earnings

(12)    Statement Re: Computation of Ratios.

(27)    Financial Data Schedule.

(b)     Reports on Form 8-K.

The Company filed a Current Report on Form 8-K,  dated November 24, 1998,  which
contained  Item 5 related  to a press  release  publicizing  the  results of the
shareholder vote at the Company's annual meeting held on that same date.


                                       23
<PAGE>

                                   SIGNATURES

     Pursuant to the  requirements  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.


   DATE: January 14, 1999             SAFETY-KLEEN CORP.
                                      ------------------
                                        (Registrant)




                                          /s/Kenneth W. Winger
                                      ---------------------------------
                                      Kenneth W. Winger
                                      President and Chief Executive Officer


                                          /s/Paul R. Humphreys         
                                      ---------------------------------
                                      Paul R. Humphreys
                                      Senior Vice President-Finance and
                                      Chief Financial Officer


                                       24