================================================================================

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

                                   FORM 10-Q/A
                            _________________________

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

                              EXCHANGE ACT OF 1934

                   For the Quarterly Period Ended May 31, 2001

                          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, South Carolina                     29201
----------------------------------------------                    -----
      (Address of principal executive offices)                  (Zip Code)

      (803) 933-4200  (Registrant's telephone number, including area code)
      --------------

    -------------------------------------------------------------------------
   (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       No  X
                   ---      ---

The  number  of  shares of the issuer's common stock outstanding as of September
10,  2001  was  100,783,596.

================================================================================


<PAGE>
                               SAFETY-KLEEN CORP.


                                      INDEX


Part I and Part II are amended in their entirety by the following:

PART  I   FINANCIAL  INFORMATION

Item  1.  Financial  Statements

          Consolidated  Statements  of Operations for the Nine Months Ended
            May 31, 2001 and the Three Months Ended May 31, 2001, February
            28, 2001 and November 30,  2000 . . . . . . . . . . . . . . . . .  3

          Consolidated  Balance  Sheets  as  of  May 31, 2001, February 28,
            2001,  November  30,  2000  and  August  31,  2000. . . . . . . .  4

          Consolidated  Statements  of Cash Flows for the Nine Months Ended
            May 31, 2001 and the Six Months Ended February 28, 2001, and the
            Three  Months  Ended  November  30,  2000 . . . . . . . . . . . .  5

          Consolidated  Statements  of  Changes in Stockholders' Equity
            (Deficit) and  Other Comprehensive Income (Loss) for the Three
            Months Ended May 31, 2001, February 28, 2001 and November 30,
            2000  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  6

          Notes  to  Consolidated  Financial  Statements. . . . . . . . . . .  7

Item  2.  Management's  Discussion  and  Analysis  of  Financial
            Condition  and  Results  of  Operations . . . . . . . . . . . . . 39

Item  3.  Quantitative and Qualitative Disclosure about Market Risk . . . . . 53


PART  II  OTHER  INFORMATION

Item  1.  Legal  Proceedings. . . . . . . . . . . . . . . . . . . . . . . . . 54

Item  6.  Exhibits  and  Reports  on  Form  8-K . . . . . . . . . . . . . . . 57

Signature . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62


                                      -2-
<PAGE>
<TABLE>
<CAPTION>
                                                  SAFETY-KLEEN CORP.
                                      (DEBTOR-IN-POSSESSION AS OF JUNE 9, 2000)
                                        CONSOLIDATED STATEMENTS OF OPERATIONS
                                       (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
                                                     (UNAUDITED)

                                                                                    THREE MONTHS ENDED
                                                        NINE MONTHS    ----------------------------------------------
                                                           ENDED           MAY 31,      FEBRUARY 28,    NOVEMBER 30,
                                                        MAY 31, 2001        2001            2001            2000
                                                       --------------  --------------  --------------  --------------
<S>                                                    <C>             <C>             <C>             <C>
Revenues                                               $   1,121,407   $     374,615   $     369,875   $     376,917
                                                       --------------  --------------  --------------  --------------
Expenses:
    Operating                                                931,850         317,973         300,077         313,800
    Depreciation and amortization                            104,403          33,860          34,683          35,860
    Selling, general and administrative                      200,352          68,669          66,815          64,868
    Provision for early facility closures                     44,773              --          35,297           9,476
                                                       --------------  --------------  --------------  --------------
                                                           1,281,378         420,502         436,872         424,004
                                                       --------------  --------------  --------------  --------------
Operating loss                                              (159,971)        (45,887)        (66,997)        (47,087)
Interest expense, net (See Note 3 for excluded
  contractual interest amounts)                               (4,425)           (875)         (1,290)         (2,260)
Other income (expense)                                          (111)            448            (329)           (230)
                                                       --------------  --------------  --------------  --------------
Loss before reorganization items, income taxes
  and minority interests                                    (164,507)        (46,314)        (68,616)        (49,577)
Reorganization items                                         (24,681)         (5,467)         (9,814)         (9,400)
                                                       --------------  --------------  --------------  --------------
Loss before income taxes and minority interests             (189,188)        (51,781)        (78,430)        (58,977)
Income tax (expense) benefit                                  (2,419)         (2,041)         (1,048)            670
                                                       --------------  --------------  --------------  --------------
Loss before minority interests                              (191,607)        (53,822)        (79,478)        (58,307)
Minority interests                                              (118)            (20)            (53)            (45)
                                                       --------------  --------------  --------------  --------------
Loss before extraordinary item                              (191,725)        (53,842)        (79,531)        (58,352)
Extraordinary item, net of tax (early extinguishment
  of debt)                                                     5,787           3,309           1,793             685
                                                       --------------  --------------  --------------  --------------
Net loss                                               $    (185,938)  $     (50,533)  $     (77,738)  $     (57,667)
                                                       ==============  ==============  ==============  ==============

Basic and diluted loss per share:
    Loss before extraordinary item                     $       (1.90)  $       (0.53)  $       (0.79)  $       (0.58)
    Extraordinary item                                          0.06            0.03            0.02            0.01
                                                       --------------  --------------  --------------  --------------
    Net loss                                           $       (1.84)  $       (0.50)  $       (0.77)  $       (0.57)
                                                       ==============  ==============  ==============  ==============

Weighted average common stock outstanding - basic
  and diluted                                                100,784         100,784         100,784         100,784
                                                       ==============  ==============  ==============  ==============
</TABLE>

           See accompanying Notes to Consolidated Financial Statements


                                      -3-
<PAGE>
<TABLE>
<CAPTION>
                                                SAFETY-KLEEN CORP.
                                     (DEBTOR-IN-POSSESSION AS OF JUNE 9, 2000)
                                            CONSOLIDATED BALANCE SHEETS
                                      (IN THOUSANDS, EXCEPT PAR VALUE AMOUNT)


                                                          MAY 31,      FEBRUARY 28,    NOVEMBER 30,    AUGUST 31,
                                                            2001           2001            2000           2000
                                                        ------------  --------------  --------------  ------------
                                                        (UNAUDITED)    (UNAUDITED)     (UNAUDITED)
<S>                                                     <C>           <C>             <C>             <C>
ASSETS:
  Current assets
    Cash and cash equivalents                           $   117,831   $     109,651   $     112,195   $    84,282
    Accounts receivable, net                                282,592         303,803         317,635       307,342
    Inventories and supplies                                 47,703          50,822          48,740        51,914
    Deferred tax asset                                       41,485          39,656          37,174        28,554
    Other current assets                                     40,358          43,693          50,987        49,731
                                                        ------------  --------------  --------------  ------------
      Total current assets                                  529,969         547,625         566,731       521,823
                                                        ------------  --------------  --------------  ------------
  Property, plant and equipment, net                        731,450         736,895         742,907       772,875
  Intangible assets, net                                  1,742,322       1,760,274       1,777,893     1,798,285
  Other assets                                               27,563          27,732          38,351        38,885
                                                        ------------  --------------  --------------  ------------
                                                        $ 3,031,304   $   3,072,526   $   3,125,882   $ 3,131,868
                                                        ============  ==============  ==============  ============

LIABILITIES:
  Current liabilities
    Accounts payable                                    $    48,027   $      54,353   $      52,527   $    65,838
    Current portion of environmental liabilities             42,234          39,160          32,326        41,122
    Income taxes payable                                     19,199          17,752          19,433        24,534
    Unearned revenue                                         90,961          90,234          99,258        90,953
    Accrued other liabilities                               146,768         127,434         121,521        69,211
  Current portion of long-term debt                          62,291          62,859          62,724        65,421
                                                        ------------  --------------  --------------  ------------
      Total current liabilities                             409,480         391,792         387,789       357,079
                                                        ------------  --------------  --------------  ------------
  Environmental liabilities                                 331,965         337,269         309,129       285,634
  Deferred income taxes                                     101,921         100,519          97,366        92,659
  Other long-term liabilities                                14,245          13,188          12,322         9,197
  Liabilities subject to compromise                       2,474,719       2,480,096       2,492,216     2,500,973
  Minority interests                                          1,415           1,395           1,341         1,296

COMMITMENTS AND CONTINGENCIES (NOTE 7)

STOCKHOLDERS' EQUITY (DEFICIT):
  Common stock, par value $1.00 per share; authorized
  250,000; issued and outstanding 100,784
                                                            100,784         100,784         100,784       100,784
  Additional paid-in-capital                              1,359,972       1,359,972       1,359,972     1,359,972
  Accumulated other comprehensive loss                       (8,199)         (8,024)         (8,310)       (6,666)
  Accumulated deficit                                    (1,754,998)     (1,704,465)     (1,626,727)   (1,569,060)
                                                        ------------  --------------  --------------  ------------
    Total stockholders' equity (deficit)                   (302,441)       (251,733)       (174,281)     (114,970)
                                                        ------------  --------------  --------------  ------------
                                                        $ 3,031,304   $   3,072,526   $   3,125,882   $ 3,131,868
                                                        ============  ==============  ==============  ============
</TABLE>
          (Note: The consolidated balance sheet as of August 31, 2000
            has been derived from the audited financial statements)

          See accompanying Notes to Consolidated Financial Statements


                                      -4-
<PAGE>
<TABLE>
<CAPTION>
                                                 SAFETY-KLEEN CORP.
                                      (DEBTOR-IN-POSSESSION AS OF JUNE 9, 2000)
                                        CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                   (IN THOUSANDS)
                                                     (UNAUDITED)


                                                           NINE MONTHS          SIX MONTHS          THREE MONTHS
                                                              ENDED                ENDED                ENDED
                                                           MAY 31, 2001      FEBRUARY 28, 2001    NOVEMBER 30, 2000
                                                        ------------------  -------------------  -------------------
<S>                                                     <C>                 <C>                  <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss                                              $        (185,938)  $         (135,405)  $          (57,667)
  Adjustments to reconcile net loss to net cash
    provided by operations:
      Extraordinary item, net of tax                               (5,787)              (2,478)                (685)
      Depreciation and amortization                               104,403               70,543               35,860
      Provision for environmental liabilities                      63,935               59,730               20,491
      Loss on disposal of equipment                                15,802                9,668                5,461
      Deferred income taxes                                        (1,469)              (1,434)              (2,019)
      Spending for environmental liabilities                      (14,855)              (8,729)              (4,386)
      Change in accounts receivable, net                           23,569                2,504              (11,484)
      Change in accounts payable                                  (16,188)             (10,220)             (12,006)
      Change in income taxes payable                               (5,334)              (6,748)              (5,057)
      Change in accrued other liabilities                          78,047               58,602               52,687
      Change in unearned revenue                                      213                 (554)               8,494
      Change in liabilities subject to compromise                  (2,309)                (241)                   6
      Change in other, net                                         22,995               14,626                6,776
                                                        ------------------  -------------------  -------------------
Net cash provided by operating activities                          77,084               49,864               36,471
                                                        ------------------  -------------------  -------------------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Proceeds from sales of property, plant and equipment              3,942                3,221                2,417
  Purchases of property, plant and equipment                      (44,883)             (26,168)              (9,869)
  Decrease (increase) in other assets                               8,407                9,168                 (616)
                                                        ------------------  -------------------  -------------------
                                                                  (32,534)             (13,779)              (8,068)
                                                        ------------------  -------------------  -------------------
Net cash used in investing activities

CASH FLOWS FROM FINANCING ACTIVITIES:
  Principal payments on pre-petition debt                         (10,080)             (10,080)                  --
                                                        ------------------  -------------------  -------------------
Net cash used in financing activities                             (10,080)             (10,080)                  --
                                                        ------------------  -------------------  -------------------
Effect of exchange rate changes on cash                              (921)                (636)                (490)
                                                        ------------------  -------------------  -------------------
Net increase in cash and cash equivalents                          33,549               25,369               27,913
Cash and cash equivalents at:
  Beginning of period                                              84,282               84,282               84,282
                                                        ------------------  -------------------  -------------------
  End of period                                         $         117,831   $          109,651   $          112,195
                                                        ==================  ===================  ===================
</TABLE>

          See accompanying Notes to Consolidated Financial Statements


                                      -5-
<PAGE>
<TABLE>
<CAPTION>
                                          SAFETY-KLEEN CORP.
                              (DEBTOR-IN-POSSESSION AS OF JUNE 9, 2000)
                 CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
                                 AND OTHER COMPREHENSIVE INCOME (LOSS)
                                            (IN THOUSANDS)
                                             (UNAUDITED)


                                                             ACCUMULATED
                                              ADDITIONAL        OTHER
                                     COMMON     PAID-IN     COMPREHENSIVE    ACCUMULATED
                                     STOCK      CAPITAL     INCOME (LOSS)      DEFICIT       TOTAL
                                    --------  -----------  ---------------  -------------  ----------
<S>                                 <C>       <C>          <C>              <C>            <C>
Balance at August 31, 2000          $100,784  $ 1,359,972  $       (6,666)  $ (1,569,060)  $(114,970)
                                    ========  ===========  ===============  =============  ==========

Comprehensive loss:
  Net loss                                                                       (57,667)    (57,667)
  Other comprehensive income
    (loss), net of income taxes:
    Foreign currency translation
      adjustments                                                  (1,644)                    (1,644)
                                                                                           ----------
  Total comprehensive loss                                                                   (59,311)
                                    --------  -----------  ---------------  -------------  ----------
Balance at November 30, 2000        $100,784  $ 1,359,972  $       (8,310)  $ (1,626,727)  $(174,281)
                                    ========  ===========  ===============  =============  ==========

Comprehensive loss:
  Net loss                                                                       (77,738)    (77,738)
  Other comprehensive income
    (loss), net of income taxes:
    Foreign currency translation
      adjustments                                                      63                         63
    Unrealized gain on marketable
      securities                                                      223                        223
                                                                                           ----------
Total comprehensive loss                                                                     (77,452)
                                    --------  -----------  ---------------  -------------  ----------
Balance at February 28, 2001        $100,784  $ 1,359,972  $       (8,024)  $ (1,704,465)  $(251,733)
                                    ========  ===========  ===============  =============  ==========

Comprehensive loss:
  Net loss                                                                       (50,533)    (50,533)
    Other comprehensive income
      (loss), net of income taxes:
    Foreign currency translation
      adjustments                                                    (365)                      (365)
    Unrealized gain on marketable
      securities                                                      190                        190
                                                                                           ----------
  Total comprehensive loss                                                                   (50,708)
                                    --------  -----------  ---------------  -------------  ----------
Balance at May 31, 2001             $100,784  $ 1,359,972  $       (8,199)  $ (1,754,998)  $(302,441)
                                    ========  ===========  ===============  =============  ==========
</TABLE>

           See accompanying Notes to Consolidated Financial Statements


                                      -6-
<PAGE>
                               SAFETY-KLEEN CORP.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)


NOTE  1  -  BANKRUPTCY

Safety-Kleen  Corp.  (the "Registrant" or "Safety-Kleen") (collectively referred
to,  with  its  subsidiaries, as the "Company"), was incorporated in Delaware in
1978  as Rollins Environmental Services, Inc., later changed its name to Laidlaw
Environmental  Services, Inc., and subsequently changed its name to Safety-Kleen
Corp.

On  June  9,  2000,  Safety-Kleen  Corp.  and  73  of  its domestic subsidiaries
(collectively, the "Debtors") filed voluntary petitions for relief (the "Chapter
11  Cases")  under  Chapter  11  of the United States Bankruptcy Code, 11 U.S.C.
Sec.Sec.  101-1330,  as  amended  (the  "Bankruptcy  Code") in the United States
Bankruptcy  Court  for  the  District  of  Delaware  (the  "Bankruptcy  Court").
Excluded  from  the  filing were certain of Safety-Kleen's domestic subsidiaries
and  all  Safety-Kleen's  indirect  Canadian  subsidiaries.

The  Debtors  remain  in  possession  of  their  properties  and assets, and the
management  of  Safety-Kleen  and  each  of the Debtor subsidiaries continues to
operate their respective businesses as debtors-in-possession under Sections 1107
and  1108  of  the  Bankruptcy  Code.  As debtors-in-possession, the Debtors are
authorized  to manage their properties and operate their businesses, but may not
engage  in  transactions  outside  the  ordinary  course of business without the
approval  of  the  Bankruptcy  Court.

Under  Section  365  of  the  Bankruptcy  Code,  subject  to the approval of the
Bankruptcy  Court,  the  Debtors  may  assume  or reject executory contracts and
unexpired leases.  Parties affected by these rejections may file proofs of claim
with  the Bankruptcy Court in accordance with the reorganization process.  These
claims  for  damages  resulting  from  the  rejection  of executory contracts or
unexpired  leases  will  be subject to separate bar dates, generally thirty days
after  entry  of  the order approving the rejection.  At various times since the
commencement  of  the  Chapter  11  Cases, the Bankruptcy Court has approved the
Debtors'  requests  to  reject  certain  contracts  or  leases  that were deemed
burdensome or of no further value to the Company.  As of September 10, 2001, the
Debtors  had  not  yet  completed  their  review of all contracts and leases for
assumption or rejection, but ultimately will assume or reject all such contracts
and leases.  The Debtors have until the confirmation of a plan of reorganization
to  assume  or reject executory contracts and certain leases.  However, pursuant
to  an  order  entered by the Bankruptcy Court on May 16, 2001, the Debtors have
until the earlier of the confirmation of a plan of reorganization or February 9,
2002,  to  assume  or  reject  nonresidential real property leases.  The Debtors
cannot presently determine or reasonably predict the ultimate liability that may
result  from  rejecting such contracts or leases or from the filing of rejection
damage  claims,  but  such  rejections  could  result  in additional liabilities
subject  to  compromise  (see  Note  3).

The consummation of a plan or plans of reorganization is the principal objective
of  the  Chapter  11  Cases.  A  plan of reorganization sets forth the means for
satisfying  claims  against  and  interests  in  the  Company  and  its  Debtor
subsidiaries,  including  the  liabilities  subject  to  compromise.  Generally,
pre-petition liabilities are subject to settlement under such a plan or plans of
reorganization,  which  must  be  voted upon by creditors and equity holders and
approved by the Bankruptcy Court.  The Debtors have retained Lazard Freres & Co.
LLC,  an  investment  bank, as corporate restructuring advisor to assist them in
formulating  and  negotiating  a plan or plans of reorganization for the Company
and  its  Debtor  subsidiaries.  Although  the  Debtors  expect  to  file  a
reorganization  plan  or  plans, as soon as reasonably possible, there can be no
assurance that a reorganization plan or plans will be proposed by the Debtors or
confirmed  by  the  Bankruptcy  Court,  or  that  any such plan or plans will be
consummated.

As  provided  by  the  Bankruptcy  Code, the Debtors initially had the exclusive
right  for 120 days to submit a plan or plans of reorganization.  On October 17,
2000,  the  Debtors  received  Bankruptcy Court approval to extend the exclusive
period  to  file a plan or plans of reorganization in the Chapter 11 Cases.  The
order extended the Debtor's exclusive right to file a plan or plans from October
7, 2000, to April 30, 2001, and extended the Debtors' exclusive right to solicit
acceptances  of  such plan or plans from December 6, 2000, to June 29, 2001.  On
May  16,  2001, the Debtors received Bankruptcy Court approval to further extend
the exclusive period to file a plan or plans of reorganization in the Chapter 11
Cases.  The  order extended the Debtor's exclusive right to file a plan or plans
until  September  19, 2001, and extended the Debtors' exclusive right to solicit
acceptances  of  such  plan  or plans until November 19, 2001.  The Debtors have
filed a motion to further extend the exclusive period to file a plan or plans of
reorganization and to extend the Debtors' exclusive right to solicit acceptances
of  such  plan  or  plans.


                                      -7-
<PAGE>
NOTE  2  - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICIANT ACCOUNTING POLICIES

A  summary  of the basis of presentation and the significant accounting policies
followed  in  the  preparation  of these Consolidated Financial Statements is as
follows:

BASIS  OF  PRESENTATION

The  accompanying  unaudited interim Consolidated Financial Statements have been
prepared  on  a going concern basis which contemplates continuity of operations,
realization  of  assets,  and  payment  of liabilities in the ordinary course of
business  and  do  not  reflect adjustments that might result if the Debtors are
unable  to  continue  as  going  concerns.  The  Debtors' history of significant
losses, deficit in stockholders' equity and their Chapter 11 filings, as well as
issues  related  to  compliance  with  debt  covenants  and  financial assurance
requirements  raise substantial doubt about the Company's ability to continue as
a  going  concern.  The Debtors intend to file a plan or plans of reorganization
with  the  Bankruptcy  Court.   Continuing  as  a  going  concern  is  dependent
upon, among other things,  the  Debtors'  formulation  of a  plan  or  plans  of
reorganization, the success of future business operations, and the generation of
sufficient  cash  from  operations  and  financing  sources to meet the Debtors'
obligations.  The  Consolidated  Financial  Statements  do  not reflect: (a) the
realizable  value  of  assets  on  a  liquidation basis or their availability to
satisfy  liabilities;  (b)  aggregate pre-petition liability amounts that may be
allowed for unrecorded claims or contingencies, or their status or priority; (c)
the  effect  of  any  changes  to  the  Debtors' capital  structure  or  in  the
Debtors' business operations  as  the result  of  an  approved  plan or plans of
reorganization;  or  (d)  adjustments to the carrying value of assets (including
goodwill  and  other  intangibles) or liability amounts that may be necessary as
the  result  of  actions  by  the  Bankruptcy  Court.


The  Company's  financial  statements have been presented in conformity with the
AICPA's  Statement  of  Position  90-7,  "Financial  Reporting  By  Entities  In
Reorganization Under the Bankruptcy Code," ("SOP 90-7").  The statement requires
a segregation of liabilities subject to compromise by the Bankruptcy Court as of
the  bankruptcy  filing  date  and identification of all transactions and events
that  are  directly  associated  with  the  reorganization  of  the  Company.

INTERIM  FINANCIAL  INFORMATION

In  accordance  with  the instructions to Form 10-Q and Rule 10-01 of Regulation
S-X,  the  Company's  unaudited interim Consolidated Financial Statements 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. Operating results for the nine months ended May 31,
2001  are not necessarily indicative of the results that may be expected for the
full  fiscal  year  ending  August  31, 2001. These statements should be read in
conjunction with the consolidated financial statements, including the accounting
policies,  and  notes  thereto included in the Registrant's Form 10-K/A, for the
year ended August 31, 2000, filed with the Securities and Exchange Commission on
July  9,  2001.

As  previously  reported  in  the  Company's  Form  10-K/A  for  the  year ended
August 31,  2000,  the Company  contracted  with outside  accountants, including
Arthur Andersen LLP,  and other professionals to  provide significant  non-audit
assistance  to  the  Company's  corporate  and field accounting personnel. These
professionals  assisted  with  the  account  analysis,  development of financial
reporting  systems and project management support, all of which was necessary to
prepare  the  Company's  fiscal  1997 to 2000 Consolidated Financial Statements,
related  disclosures  and  its  fiscal  2000 Form 10-K/A. This effort included a
comprehensive  review  of substantially all the accounts and resulted in a large
number  of  adjustments  affecting each of the respective periods. The impact of
these  adjustments  on the annual financial statements is described in Note 2 of
the  fiscal  2000  Consolidated  Financial  Statements. As disclosed in the Form
10-K/A  filed  on  July  9,  2001  and  referenced  in the auditors' report, the
quarterly  financial  information required by Item 302 of Regulation S-K was not
included  in  the  Form  10-K/A.  The  Company  believes  the adjustments to the
financial  statements  have  been  reflected  in  the  appropriate annual fiscal
period,  however,  the  Company  did  not spend the additional time and money to
undertake  the  extraordinary  effort  to  apply  all  of the adjustments to the
appropriate  interim  fiscal  quarter.


Moreover,  the  Company  has  not  undertaken to spend additional time and money
preparing  such  quarterly  information  since  the filing of the Form 10-K/A so
comparative quarterly financial information for fiscal 2000, as required by Rule
10-01  of  Regulation  S-X,  has  not  been  included  in  this  Form  10-Q/A.

In  preparing  the accompanying unaudited Consolidated Financial Statements, the
Company  recorded  certain adjustments relating to periods prior to fiscal 2001,
which  have  been  reflected in the operating results for the three months ended
November  30,  2000.  These  adjustments,  which  increased  the  net  loss  by
approximately $11 million, related primarily to certain environmental, severance
and  other  benefits  liabilities, revenue and capitalized interest. The Company
does  not believe the adjustments are material to revenue, operating loss or net
loss  for  fiscal  2000  and  prior, or for the expected fiscal year 2001 annual
results.


                                      -8-
<PAGE>
INVENTORIES  AND  SUPPLIES

Inventories  consist  primarily of solvent, drums, supplies and repair parts and
are  valued  at the lower of cost or market, determined on a first-in, first-out
basis.  The  Company  periodically  reviews  its  inventories  for  obsolete  or
unsaleable  items and adjusts the carrying value to reflect estimated realizable
values.

ACCRUED  OTHER  LIABILITIES

Accrued other liabilities as of May 31, 2001, February 28, 2001 and November 30,
2000  included additional provisions for legal and professional fees incurred in
conjunction  with  the Company's bankruptcy filing and restatement of its fiscal
1997  to 1999 financial statements as well as preparation of the fiscal 2000 and
2001  financial  statements.

RECENT  ACCOUNTING  DEVELOPMENTS

In  1998,  the Financial Accounting Standards Board ("FASB") issued Statement of
Financial  Accounting  Standards  ("SFAS")  No.  133, "Accounting for Derivative
Instruments  and  Hedging  Activities."  SFAS No. 133 establishes accounting and
reporting  standards  requiring  that every derivative instrument be recorded on
the  balance  sheet  as either an asset or liability measured at its fair value.
The statement requires that changes in the derivative's fair value be recognized
currently  in  earnings  unless  specific  hedge  accounting  criteria  are met.
Special  accounting for qualifying hedges allows a derivative's gains and losses
to  offset  related  results  on  the  hedged  item in the income statement, and
requires  that  a  Company  must  formally  document,  designate  and assess the
effectiveness  of transactions that receive hedge accounting.  In June 1999, the
FASB  issued  SFAS No. 137, which deferred the effective date of SFAS No. 133 to
fiscal  years beginning after June 15, 2000.  In June 2000, the FASB issued SFAS
No.  138,  which  amended  certain  guidance  within SFAS No.  133.  The Company
adopted  SFAS  No.  133, as amended, on September 1, 2000 and concluded that the
adoption  of  this  statement  did not materially impact the Company's financial
position,  results  of  operations,  or  cash  flows.

In  July  2001,  the FASB issued SFAS No. 141, "Business Combinations", and SFAS
No.  142, "Goodwill and Other Intangible Assets". SFAS No. 141 requires that the
purchase method of accounting be used for all business combinations initiated or
completed  after  June  30,  2001.  SFAS  No.  141  also  specifies criteria for
intangible  assets  acquired  in  a  business  combination  to be recognized and
reported apart from goodwill. SFAS No. 142 requires that goodwill and intangible
assets  with  indefinite  useful  lives  no  longer be amortized, but instead be
tested  for  impairment  at  least annually in accordance with the provisions of
SFAS  No.  142.  SFAS No. 142 also requires that intangible assets with definite
useful  lives be amortized over their respective estimated useful lives to their
estimated  residual  values, and reviewed for impairment in accordance with SFAS
No.  121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets  to  Be Disposed Of."  The Company is required to adopt the provisions of
SFAS  No.  141  immediately  for  new  transactions  and  SFAS No. 142 effective
September  1,  2002.  Early  adoption  of  SFAS  No.  142  is  permitted.

The  Company's  existing  goodwill  and  intangible  assets  will continue to be
amortized  prior  to  the  adoption of SFAS No. 142. SFAS No. 141 requires that,
upon  adoption  of  SFAS  No.  142, the Company evaluate its existing intangible
assets and goodwill. Upon adoption of SFAS No. 142, the Company will be required
to  reassess  the  useful  lives  and residual values of all recorded intangible
assets,  and  make any necessary amortization period adjustments by February 28,
2003. Additionally, to the extent an intangible asset is identified as having an
indefinite  useful  life,  the  Company  will be required to test the intangible
asset  for  impairment  in  accordance  with  the  provisions of SFAS No. 142 by
February  28,  2003.  Any  impairment  loss  will  be measured as of the date of
adoption  and  recognized  as  the  cumulative  effect of a change in accounting
principle.

As  of  September  1,  2002, the Company expects to have unamortized goodwill of
approximately  $1.2  billion, which will be subject to the transition provisions
of  SFAS  Nos.  141 and 142.  Amortization expense related to goodwill and other
intangible assets was $18.0 million, $17.8 million and $18.8 million for each of
the  three  months  ended May 31, 2001, February 28, 2001 and November 30, 2000,
respectively.   The  Company  believes  it  will  likely  incur  a  significant
write-down in the value of its intangible assets at the earlier of its emergence
from  bankruptcy,  as  provided  by  SOP  90-7, or the adoption of SFAS No. 142.

In  June  2001,  the  FASB issued SFAS No. 143, "Accounting for Asset Retirement
Obligations".  SFAS  No.  143  will  require,  upon  adoption,  that the Company
recognize  as  a  component  of asset cost, the fair value of a liability for an
asset  retirement  obligation  in  the  period  in  which  it  is  incurred if a
reasonable  estimate  of  fair  value  can  be  made.  Under this statement, the
liability  is   discounted   and  accretion  expense  is  recognized  using  the
credit-adjusted  risk-free  interest  rate  in  effect  when  the  liability was
initially  recognized. SFAS No. 143 is effective for financial statements issued
for  fiscal years beginning after June 15, 2002. The Company will be required to
adopt  SFAS  No.  143  on  September  1,  2002. The Company believes its current
accounting  practice  for certain of its facilities will be impacted by SFAS No.
143,  for  which it is likely that significant additional assets and liabilities
will  be  recorded.


                                      -9-
<PAGE>
NOTE  3  -  LIABILITIES  SUBJECT  TO  COMPROMISE

The  principal  categories  of  claims  classified  as  liabilities  subject  to
compromise  under  reorganization proceedings are identified below.  All amounts
below  may be subject to future adjustment depending on Bankruptcy Court action,
further developments with respect to disputed claims, or other events, including
the reconciliation of claims filed with the Bankruptcy Court to amounts included
in  the  Company's  records.  Additional  pre-petition  claims  may  arise  from
rejection  of additional executory contracts or unexpired leases by the Company.
Under  a  confirmed plan or plans of reorganization, all pre-petition claims may
be paid and discharged at amounts substantially less than their allowed amounts.

Recorded liabilities -- On a consolidated basis, recorded liabilities subject to
--------------------
compromise  under  Chapter  11  proceedings  consisted  of  the  following ($ in
thousands):

<TABLE>
<CAPTION>
                                    MAY 31,     FEBRUARY 28,    NOVEMBER 30,    AUGUST 31,
                                     2001           2001            2000           2000
                                  -----------  --------------  --------------  ------------
<S>                               <C>          <C>             <C>             <C>
Accrued litigation                $   22,371   $      22,371   $      22,371   $    19,891
Derivative liabilities                69,461          69,461          69,461        69,461
Trade accounts payable               113,196         119,342         122,138       126,454
Accrued insurance liability           15,106          15,278          15,511        18,019
Environmental liabilities             10,476          10,648          10,615         9,579
Accrued interest                      67,177          67,177          67,279        67,147
Senior Credit Facility:
    Term loans                     1,137,750       1,137,750       1,137,750     1,137,750
    Revolver                         340,000         340,000         340,000       340,000
    Adequate protection payments     (18,088)        (18,950)        (18,950)      (18,950)
Senior Subordinated Notes            325,000         325,000         325,000       325,000
Senior Notes                         225,000         225,000         225,000       225,000
Promissory note                       60,000          60,000          60,000        60,000
Industrial revenue bonds              80,820          80,820          90,900        90,900
Other                                 26,450          26,199          25,141        30,722
                                  -----------  --------------  --------------  ------------
                                  $2,474,719   $   2,480,096   $   2,492,216   $ 2,500,973
                                  ===========  ==============  ==============  ============
</TABLE>

During  the  first  nine  months  of  fiscal  2001, the Company has entered into
Bankruptcy  Court  approved  settlements  to  pay  approximately $9.9 million in
settlement of approximately $15.7 million of pre-petition liabilities related to
certain critical vendors. Extraordinary gains of $5.8 million have been reported
in  the  accompanying  statements of operations as a result of these settlements
for the first nine months of fiscal 2001. Additionally, during the quarter ended
February  28,  2001,  the  Company  entered  into  a  Bankruptcy  Court approved
settlement  to repay $10.1 million of industrial revenue bonds, using restricted
funds  held  by  trustees.

As a result of the bankruptcy filing, principal and interest payments may not be
made  on  pre-petition  debt  without  Bankruptcy  Court  approval  or  until  a
reorganization  plan  or  plans defining the repayment terms has been confirmed.
The total interest on pre-petition debt that was not paid or charged to earnings
for  the  three month periods ended May 31, 2001, February 28, 2001 and November
30, 2000 was $60.3 million, $63.8 million and $65.6 million, respectively.  Such
interest  is  not being accrued since it is not probable that it will be treated
as  an  allowed  claim.  The  Bankruptcy Code generally disallows the payment of
interest  that  accrues  post-petition with respect to unsecured or undersecured
claims.

Contingent  liabilities  --  Contingent  liabilities as of the Chapter 11 filing
-----------------------
date  are  also  subject  to  compromise.  At  May  31,  2001,  the  Company was
contingently  liable  to  banks,  financial  institutions  and  others  for
approximately  $88.0  million for outstanding letters of credit and $0.8 million
of  performance  bonds  securing  performance  of  sales  contracts  and  other
guarantees  in  the  ordinary course of business related to pre-filing activity.

The  Company  is a party to litigation matters and claims that are normal in the
course  of  its  operations.  Generally,  litigation  related  to  "claims,"  as
defined  by  the  Bankruptcy  Code,  is stayed.  Also, as a normal part of their
operations,  the  Company's  subsidiaries  undertake  certain  contractual
obligations,  warranties  and guarantees in connection with the sale of products
or  services.  The  outcome of the bankruptcy process on these matters cannot be
predicted  with  certainty.


                                      -10-
<PAGE>
NOTE  4  -  REORGANIZATION  ITEMS

Reorganization  items  as  reported in the accompanying statements of operations
are  comprised of income and expense items that were realized or incurred by the
Debtors as a direct result of the Company's decision to reorganize under Chapter
11.  During  the  first  nine  months  of  fiscal  2001,  the  Company  recorded
reorganization  items  as  follows  ($  in  thousands):

<TABLE>
<CAPTION>
                                                                                      THREE MONTHS ENDED
                                                         NINE MONTHS    ----------------------------------------------
                                                        ENDED MAY 31,       MAY 31,      FEBRUARY 28,    NOVEMBER 30,
                                                            2001             2001            2001            2000
                                                       ---------------  --------------  --------------  --------------
<S>                                                    <C>              <C>             <C>             <C>
Professional fees directly related to the filing       $       16,845   $       2,407   $       7,319   $       7,119
Amortization of DIP financing costs                             3,447             999             999           1,449
Interest earned on cash accumulated during Chapter 11          (3,764)           (914)         (1,261)         (1,589)
Accrued retention plan costs                                    6,625           2,256           2,256           2,113
Other                                                           1,528             719             501             308
                                                       ---------------  --------------  --------------  --------------
                                                       $       24,681   $       5,467   $       9,814   $       9,400
                                                       ===============  ==============  ==============  ==============
</TABLE>

NOTE  5  -  CLOSURE,  POST-CLOSURE  AND  ENVIRONMENTAL  REMEDIATION  LIABILITIES
The  Company  records environmentally related accruals for both its landfill and
non-landfill  operations.

Final closure and post-closure liabilities -- The Company has material financial
------------------------------------------
commitments  for  the  costs  associated  with requirements of the United States
Environmental  Protection  Agency  (the  "EPA"),  and  the comparable regulatory
agency  in  Canada  for  the  final  closure  and post-closure activities at the
majority  of  its  facilities.  In  the  United  States,  the  final closure and
post-closure  requirements  are  established  by the EPA and the states, and are
generally  implemented and applied on a state-by-state basis.  Estimates for the
cost  of  these activities are developed by the Company's engineers, accountants
and  external  consultants,  based  on  an evaluation of site-specific facts and
circumstances,  including  the  Company's  interpretation  of current regulatory
requirements  and proposed regulatory changes.  Such estimates may change in the
future  because  of, among other factors, permit modifications and/or changes in
legislation or regulations. Final closure and post-closure plans are established
in accordance with the individual site permit requirements. Post-closure periods
are  generally  expected  to be for a period of 30 years after landfill closure,
but  may  extend  to  a  period  of  100  years  after  landfill  closure.

For  purchased landfills, the Company assessed and recorded the present value of
the  estimated closure and post-closure liability based upon the estimated final
closure and post-closure costs and the percentage of airspace utilized as of the
purchase  date. Thereafter, the difference between the liability recorded at the
time  of  acquisition and the present value of total estimated final closure and
post-closure  costs  to  be  incurred  is  accrued  prospectively  on a units of
consumption  basis  over  the  remaining  estimated useful life of the landfill.

During  the  first  six  months  of  fiscal  2001,  the Company decided to cease
operations  at  two  incinerators,  a  wastewater  treatment  facility  and  a
transportation  facility.  As  a  result of these closures, the Company recorded
closure and post-closure charges of approximately $44.8 million, which have been
reflected as provision for early facility closures in the accompanying unaudited
consolidated  statements  of  operations.  Asset  impairment  charges related to
these  facilities in the amount of $30.7 million and $11.0 million were recorded
in  fiscal  years  2000  and  1998,  respectively.

Remedial  liabilities,  including  Superfund  liabilities  --  The  Company
---------------------------------------------------------
periodically  evaluates  potential remedial liabilities at sites that it owns or
operates  and  at  sites  to  which  it  has  transported  or disposed of waste,
including  approximately  60  Superfund  sites  as  of  September 10, 2001.  The
majority  of  the  issues  at  Superfund  sites  relates to allegations that its
subsidiaries,  or  their  predecessors,  transported  waste to the facilities in
question,  often  prior  to the acquisition of such subsidiaries by the Company.
The  Company  periodically  reviews  and  evaluates sites requiring remediation,
including   Superfund   sites,   giving  consideration   to  the  nature  (i.e.,
owner/operator, arranger, transporter or generator) and the extent (i.e., amount
and  nature  of waste hauled to the location, number of years of site operations
or  other  relevant  factors) of the Company's alleged connection with the site,
the  regulatory  context  surrounding  the  site,  the  accuracy and strength of
evidence  connecting  the  Company  to  the location, the number, connection and
financial ability of other named and unnamed potentially responsible parties and
the nature and estimated cost of the likely remedy.  Where the Company concludes
that it is probable that a liability has been incurred, provision is made in the
financial statements, based upon management's judgment and prior experience, for
the  Company's  best  estimate  of  the  liability.  Such  estimates,  which are
inherently  subject  to  change, are subsequently revised if and when additional
information  becomes  available.

Revisions  to  remediation reserve requirements may result in upward or downward
adjustments  to income from operations in any given period. The Company believes
that its extensive experience in the environmental services business, as well as
its  involvement  with  a large number of sites, provides a reasonable basis for
estimating  its  aggregate  liability.  It  is  reasonably  possible  that


                                      -11-
<PAGE>
technological,  regulatory  or  enforcement  developments,  the  results  of
environmental  studies  or  other  factors  could  necessitate  the recording of
additional  liabilities  and/or  the  revision of currently recorded liabilities
that  could be material. The impact of such future events cannot be estimated at
the  current  time.


Discounted  environmental liabilities - Where the Company believes that both the
-------------------------------------
amount  of  a  particular environmental liability and the timing of the payments
are  fixed  or  reliably  determinable,  its cost in current dollars is inflated
using  estimates  of  future inflation rates until the expected time of payment,
then  discounted  to its present value using risk-free discount rates.  Discount
and  inflation rate assumptions used during the first nine months of fiscal 2001
have  not  changed  significantly  from  those  used  during  fiscal  2000.

The  Company  has recorded liabilities for closure, post-closure and remediation
obligations  as of May 31, 2001, February 28, 2001, November 30, 2000 and August
31,  2000  as  follows  ($  in  thousands):

<TABLE>
<CAPTION>
                                                     MAY 31,     FEBRUARY 28,   NOVEMBER 30,   AUGUST 31,
                                                       2001          2001           2000          2000
                                                   ------------  -------------  -------------  -----------
<S>                                                <C>           <C>            <C>            <C>
Current portion of environmental liabilities       $     42,234  $      39,160  $      32,326  $    41,122
Non-current portion of environmental liabilities        331,965        337,269        309,129      285,634
Liabilities subject to compromise (see Note 3)           10,476         10,648         10,615        9,579
                                                   ------------  -------------  -------------  -----------
   Total                                           $    384,675  $     387,077  $     352,070  $   336,335
                                                   ============  =============  =============  ===========
</TABLE>

In  the following table, reserves for environmental matters are classified as of
each balance sheet date based on their classification at May 31, 2001.  Reserves
for closure, post-closure and remediation as of May 31, 2001, February 28, 2001,
November  30,  2000  and  August  31,  2000,  respectively, are as follows ($ in
thousands):

<TABLE>
<CAPTION>
                                                  MAY 31,    FEBRUARY 28,   NOVEMBER 30,   AUGUST 31,
                                                   2001          2001           2000          2000
                                              -------------  -------------  -------------  -----------
<S>                                           <C>            <C>            <C>            <C>
Landfill facilities:
  Cell closure                                $      24,623  $      24,125  $      24,381  $    26,028
  Final closure                                      17,747         17,759         17,679       17,732
  Post-closure                                       66,074         64,378         62,251       59,198
  Remediation                                        21,569         21,712         21,805       21,562
                                              -------------  -------------  -------------  -----------
                                                    130,013        127,974        126,116      124,520
Non-landfill facilities:
  Remediation, closure and post-closure for
    closed sites                                    156,457        159,074        124,820      112,499
  Remediation (including Superfund) for open
    Sites                                            98,205        100,029        101,134       99,316
                                              -------------  -------------  -------------  -----------
                                                    254,662        259,103        225,954      211,815
                                              -------------  -------------  -------------  -----------
                                              $     384,675  $     387,077  $     352,070  $   336,335
                                              =============  =============  =============  ===========
</TABLE>

All  of the landfill facilities included in the table above are active as of May
31, 2001, except the Pinewood facility.  Total closure and post-closure reserves
related  to  the  Pinewood  facility  were  $46.2  million, $46.0 million, $45.9
million  and  $44.6  million as of May 31, 2001, February 28, 2001, November 30,
2000  and  August  31,  2000,  respectively.  At  May  31, 2001, the Company has
recorded  approximately  $1.3  million  for  all  known  remediation  matters at
Pinewood.  The South Carolina Department of Health and Environmental Control has
required  that  an  Environmental Impairment Fund ("EIF") be established for any
potential  environmental  cleanup and restoration of environmental impairment at
the  Pinewood  facility.  With  respect  to  the  EIF  funding  requirement,  no
environmental  liabilities  have  been  identified  which  require  accrual.


                                      -12-
<PAGE>
NOTE  6  -  LONG-TERM  DEBT

DEBTOR-IN-POSSESSION  (DIP)  CREDIT  AGREEMENT

On  July  19,  2000,  the  Bankruptcy Court granted final approval of a one-year
$100.0  million Revolving Credit, Term Loan, and Guaranty Agreement underwritten
by  the Toronto Dominion Bank as general administrative agent and the CIT Group,
Inc.  as  collateral  agent  (the  "DIP Facility") with sublimits for letters of
credit  of $35.0 million.  The actual amount available under the DIP Facility is
subject  to  a  borrowing  base computation.  Subsequently, the DIP Facility has
been  amended  on  six occasions.  The fifth amendment and agreement dated as of
August  6, 2001, increased the sublimits for letters of credit to $75.0 million.
Unless  amended,  the DIP Facility matures on the earlier of January 31, 2002 or
the  effective  date  of  the  plan  of  reorganization.

Proceeds from the DIP Facility may be used to fund post-petition working capital
and for other general corporate purposes during the term of the DIP Facility and
to  pay  certain  pre-petition  claims, including those of critical vendors. The
$75.0  million  sublimit  on  letters  of  credit  is  further  stratified  into
$40.0 million  available for  auto liability,  general  liability  and  worker's
compensation  insurance  for  fiscal  years  2001  and  2002;  $15.0 million for
performance  bonding;  and $30.0 million for additional financial assurance with
respect  to  certain  facilities.

By  October  15,  2001,  the Company has  agreed to discuss modifications to the
DIP Facility  to  include  financial  covenants, including  capital  expenditure
limitations.  As  of  September  10,  2001, no amounts had been drawn on the DIP
Facility  and  approximately $49.0 million of letters of credit had been issued.
In addition, the Company had approximately $41.0 million available under the DIP
Facility.  The  Company has agreed to increase, in stages, the amounts currently
posted by an additional $11.0 million through January 1, 2002.  In addition, the
Company  has  agreed to post an additional $15.0 million of letters of credit by
September  30,  2001  with respect to existing financial assurance arrangements.
The Company is currently negotiating an increase in the DIP Facility in order to
accommodate  these  and  other  letter  of credit requirements.  The Debtors are
jointly  and  severally  liable  under  the  DIP  Facility.

The DIP Facility benefits from superpriority claims status as provided for under
the  Bankruptcy Code.  A superpriority claim is senior to unsecured pre-petition
claims  and all other administrative expenses incurred in a Chapter 11 case.  As
security,  the  DIP  Facility  lenders  were granted certain priority, perfected
liens  on certain of the Debtors' assets.  Pursuant to the final order approving
the DIP Facility, such liens are not subordinate to or pari passu with any other
lien  or  security  interest.  Pursuant  to  an agreement with the Company's new
Chief  Executive  Officer,  obligations  under  his employment contract with the
Company  are  generally  pari  passu  with  liens  pursuant to the DIP Facility.

Borrowings  under  the DIP Facility are priced at LIBOR plus 3% or prime plus 1%
depending  on  the nature of the borrowings.  Letters of credit are priced at 3%
per  annum  (plus  a fronting fee of 0.25% to the Agent) on the outstanding face
amount of each letter of credit.  In addition, the Company pays a commitment fee
of  0.50% per annum on the unused amount of the DIP Facility, payable monthly in
arrears.

Subsequent  to  August  31,  2000,  the  Company  failed  to comply with certain
affirmative  covenants  within  its DIP Facility, primarily related to providing
audited   financial  statements  by  specified  dates,   for  which  waivers  of
non-compliance  were  received.  In  addition,  subsequent  to May 31, 2001, the
Company  failed  to  provide  certain  preliminary  plan  of  reorganization
information,  for  which  waivers  of  non-compliance  have  been  received.


CANADIAN  BORROWINGS

Senior  Credit  Facility  -  The  Canadian  Borrower  and the Company's Canadian
------------------------
subsidiaries  participated  in  the  Senior  Credit  Facility  under  which  it
established  and initially borrowed $70.0 million (USD) from a syndicate of five
banks.  The  term  loan  has  a floating interest rate based on Canadian prime +
1.375%  or  Canadian  Bankers  Acceptance,  ("CB/A")  + 2.375%, at the Company's
discretion.   As  a  result  of  the  Company's filing for Chapter 11 bankruptcy
protection,  its Canadian subsidiaries are in default of the loan conditions and
a  notice  of  default  has  been issued by the banks making the loan payable on
demand. Accordingly, the outstanding loan balance is classified as current as of
May  31,  2001,  February  28, 2001, November 30, 2000 and August 31, 2000.  The
Company  has  ceased  making  principal and interest payments on the borrowings,
however,  interest  continues  to  accrue.

Canadian  Operating  Facility -- On April 3, 1998, the Canadian Borrower entered
-----------------------------
into  a  letter  agreement with the Toronto Dominion Bank providing an operating
line  of  credit  of  up  to  $35.0  million  (CDN).  The letter agreement has a
floating  interest  rate based on Canadian prime plus 1.375% or CB/A plus 2.375%
for  Canadian  borrowings  and  prime  plus 1.375% or LIBOR plus 2.375% for U.S.
borrowings, at the Company's discretion. On March 4, 2000, Toronto Dominion Bank
cancelled  this  letter  agreement  at  which  time  the  Canadian  Borrower had
borrowings  of  $17.2  million and letters of credit totaling $3.8 million.  The
full  amount  borrowed  is  in  default due to breaches of loan covenants by the
local  subsidiary.  Accordingly,  the  outstanding loan balance is classified as
current  as of May 31, 2001, February 28, 2001, November 30, 2000 and August 31,
2000.  The  Company  has  ceased  making  principal and interest payments on the
borrowings,  however,  interest  continues  to  accrue.


                                      -13-
<PAGE>
NOTE  7  -  COMMITMENTS  AND  CONTINGENCIES

FINANCIAL  ASSURANCE  OBLIGATIONS

As of September 10, 2001, the Company provides financial assurances by insurance
policies  and  performance  bonds  to  the  applicable  regulatory  authorities,
totaling  approximately $500.0 million, in connection with closure, post-closure
and  corrective  action  requirements  of  certain  facility  operating permits.
Letters  of  credit  of  approximately  $77.0 million are posted to meet various
financial  assurance requirements.  The Company has agreed to post $15.0 million
of  letters of credit by September 30, 2001 as additional collateral, to support
its  existing  financial  assurance  obligations  and  currently is obligated to
provide  additional  financial assurance with respect to certain of its sites by
September 30, 2001, although the EPA staff has agreed to an extended deadline of
October  18,  2001.  The  Company  plans  to  further amend the terms of the DIP
Facility to provide additional letters of credit needed to support its financial
assurance  obligations.  There  can be no assurance that such amendments will be
obtained.  Restricted  assets  of  $23.5  million are held in trust for landfill
closure,  post-closure  and  environmental  impairment  (see Note 5).  Insurance
policies with limits of approximately $92.0 million are held to cover accidental
bodily  injury  or  property damage to third parties at certain of the Company's
facilities.

LEGAL  PROCEEDINGS

Legal  proceedings covering a wide range of matters are pending or threatened in
the  United States and foreign jurisdictions against the Company.  Various types
of  claims  are  raised in these proceedings, including shareholder class action
and  derivative lawsuits, product liability, financial assurance, environmental,
antitrust,  tax, and breach of contract.  Management consults with legal counsel
in  estimating  reserves  and  developing estimates of ranges of potential loss.

The Company has claims where management has assessed that an unfavorable outcome
is probable.  The aggregate estimated potential loss on these claims ranges from
approximately  $19.4  million to approximately $71.1 million and the Company has
recorded  reserves  of  approximately  $26.8  million,  including  $22.4 million
reflected  as  accrued  litigation  subject to compromise, representing its best
estimate  of  losses  to  be  incurred.

The Company also has claims, excluding product liability cases, where management
has  determined  that  an unfavorable outcome, while not probable, is reasonably
possible with an estimated range of loss of up to $1.9 billion.  The Company has
not  recorded  reserves  related  to  these  claims.

The  actual  outcome  from  these claims could differ from these estimates.  The
estimated  ranges  of  loss discussed above do not include any amount related to
the  Laidlaw  Inc.  proof  of  claim  and Ville Mercier matters discussed below.

CHAPTER  11  FILING

As  described  in   Note  1,  the  Debtors  filed  a   voluntary   petition  for
reorganization  under  the  Bankruptcy  Code  on June 9, 2000. Management of the
Company   continues   to   operate   the   business   of   the   Debtors  as  a
debtor-in-possession  under  Sections  1107  and 1108 of the Bankruptcy Code. In
this  proceeding,  the Debtors intend to propose and seek confirmation of a plan
or  plans of reorganization. Pursuant to the automatic stay provision of Section
362  of  the  Bankruptcy  Code,  virtually  all  pending pre-petition litigation
against  the  Debtors  is  currently  stayed.



Laidlaw Inc., a Canadian corporation, owns 43.5% of the outstanding common stock
of  the  Company  and  has various other arrangements and relationships with the
Company  and  its  affiliates.  On  November 7, 2000, Laidlaw Inc., on behalf of
itself  and  its direct and indirect subsidiaries, filed a proof of claim in the
unliquidated  amount  of  not less than $6.5 billion against the Company and its
affiliates in the Chapter 11 cases.  The Laidlaw Inc. claims against the Company
and  its  affiliates  fall  into the following general categories: 1) claims for
indemnification;  2)  contribution  and reimbursement in connection with certain
litigation  matters;  3)  claims  against  the  Company  and  its affiliates for
fraudulent  misrepresentation,  fraud,  securities  law  violations, and related
causes  of  action;  4)  insurance  claims; 5) guaranty claims; 6) environmental
contribution  claims;   7)   tax  reimbursement   claims;  and   8)   additional
miscellaneous  claims.  On  April 19, 2001, the Company, on behalf of itself and
its  direct  and  indirect  subsidiaries,  filed  with  the  Bankruptcy Court an
objection  to  the  proof  of  claim  filed  by  Laidlaw  Inc.

As  of  August  31,  2001,  proofs  of claim in the approximate amount of $174.0
billion  have been filed against the Company and its affiliates by among others,
secured  creditors,  unsecured  creditors  and  security  holders.  The  Company
believes  that the amount of these claims that are in excess of the $2.5 billion
recorded as "Liabilities subject to compromise" in the accompanying Consolidated
Financial  Statements  as  of  May 31, 2001 are duplicative or without merit and
will  not  have  a material effect on the Consolidated Financial Statements. The
Company is in the process of reviewing the proofs of claim and once this process
is  complete,  will  file appropriate objections to the claims in the Bankruptcy
Court.  As  of  August  31,  2001,  the  Company  believes  it  has   identified
approximately  $170.8  billion  of  such claims which are duplicative or without
merit.


                                      -14-
<PAGE>
As  a  result  of  the  Bankruptcy filing, the Company has not paid certain real
estate taxes and certain taxing authorities have asserted liens against the real
estate.

ACTION  TO  AVOID  AND  RECOVER  TRANSFERS  TO  LAIDLAW  INC.

On  April  19,  2001,  the  Company filed an action against Laidlaw Inc. and its
affiliates,  Laidlaw  Transportation,  Inc.  and  Laidlaw  International Finance
Corporation  (collectively the "Defendants"), in the Bankruptcy Court, Adv. Pro.
No.  01-01086  (PJW).  This  action  seeks  to  recover  a transfer of over $200
million  in  August  1999  (the  "Transfer")  made  to or for the benefit of the
Defendants, holders of 43.5% of the Company's common stock.  The Company asserts
that  the  Transfer  is recoverable either as a preference payment to the extent
the  Transfer  retired  pre-existing  debt,  or  as a fraudulent transfer to the
extent  the Transfer redeemed equity or was made with intent to hinder, delay or
defraud  creditors.  In  the  action, the Company seeks to recover the Transfer,
plus  interest  and  costs  occurring  from  the  first date of demand, from the
Defendants.

EFFECT  OF  LAIDLAW'S  FINANCIAL  SITUATION  ON  THE  COMPANY

On  June  28,  2001,  Laidlaw Inc. and five of its subsidiary holding companies,
Laidlaw  Investments  Ltd.,  Laidlaw  International Finance Corporation, Laidlaw
One,  Inc.,  Laidlaw  Transportation,  Inc. and Laidlaw USA, Inc. (collectively,
"Laidlaw")  filed voluntary petitions for reorganization under Chapter 11 of the
Bankruptcy  Code  in the United States Bankruptcy Court for the Western District
of  New York.   On the same day, Laidlaw Inc. and Laidlaw Investments Ltd. filed
cases  under  the  Canada  Companies'  Creditors  Arrangement  Act (CCAA) in the
Ontario Superior Court of Justice in Toronto, Ontario.  As a result of Laidlaw's
filings, claims and causes of action the Company may have against Laidlaw may be
subject  to  compromise  in  Laidlaw's  Chapter  11  or  CCAA  proceedings.

MATTERS  RELATED  TO  INVESTIGATION  OF  FINANCIAL  RESULTS

As  previously  reported  on  March  6,  2000, the Company announced that it had
initiated an internal investigation of its previously reported financial results
and  certain  of  its accounting policies and practices following receipt by the
Company's  Board  of  Directors  of  information  alleging  possible  accounting
irregularities  that may have affected the previously reported financial results
of  the  Company  since  fiscal  year  1998.  The  internal  investigation  was
subsequently  expanded  to  include  fiscal  years  1998  and  1997.  The  Board
appointed  a  special  committee,  consisting  of  four  directors who were then
independent  outside  directors   of  the  Company,   to  conduct  the  internal
investigation  (the "Special Committee (Investigation)").  The Special Committee
(Investigation)  was  later expanded to five directors, with the addition of one
additional  independent  outside director. The Special Committee (Investigation)
engaged  the law firm Shaw Pittman, and Shaw Pittman engaged the accounting firm
Arthur  Andersen  LLP,  to  assist with the comprehensive investigation of these
matters.  The  Board placed Kenneth W. Winger, the Company's President and Chief
Executive  Officer  and  a  director,  Michael  J.  Bragagnolo,  Executive  Vice
President  and  Chief  Operating  Officer,  and  Paul  R. Humphreys, Senior Vice
President  of  Finance  and  Chief Financial Officer, on administrative leave on
March  5,  2000.  The  Company  accepted  the  resignations  of  Messrs. Winger,
Bragagnolo,  and Humphreys, as officers, in mid-May 2000 and of Mr. Winger, as a
director,  on  June 9, 2000, and subsequently terminated the employment of these
individuals  in  July  2000.  On  September  13,  2001,  the  Board of Directors
dissolved  the  Special  Committee  (Investigation)  and established the Special
Committee  (Conflicts  of  Interest  in  Litigation).  The  Special  Committee
(Conflicts  of  Interest  in  Litigation) is authorized to manage all litigation
involving the Company and a member of the Board of Directors.  The new committee
is comprised of Ronald A. Rittenmeyer, Kenneth K. Chalmers, Peter E. Lengyel and
David W. Wallace, each of whom was appointed to the Board subsequent to March 6,
2000  and  is  not  personally  involved  in  such  litigation.

Beginning  in  March  2000,  a  number of lawsuits have been filed, on behalf of
various  classes  of  investors  against  the Company, certain directors, former
directors,  and  others  alleging,  among other things, that the defendants made
false  and  misleading  statements and violated certain federal securities laws.
Generally,  the  actions seek to recover damages in unspecified amounts that the
plaintiffs allegedly sustained by acquiring shares of the Company's common stock
or  purchasing  debt  of  the  Company.

Shortly after the Company's March 6, 2000, announcement, Company representatives
met  with officials of the Securities and Exchange Commission (the "Commission")
and  advised  the  Commission  of  the alleged accounting irregularities and the
Company's  internal investigation with respect to the allegations.  On March 10,
2000,  the  Company  was  advised  that  the  Commission  had initiated a formal
investigation  of  the Company.  Also on March 10, 2000, the Commission issued a
subpoena  to  the  Company  requiring  the  production  of certain financial and
corporate documents relating to the preparation of Company financial statements,
reports and audits for fiscal years 1998, 1999 and portions of fiscal years 1997
and  2000  and  for  various  other documents pertaining to and ancillary to the
alleged  accounting  irregularities.  On  May  24, 2000, the Commission issued a
second  subpoena  to  the Company requiring additional documents relating to the
preparation of Company financial statements, reports and audits for fiscal years
1998,  1999  and  portions  of  fiscal  years  1997  and  2000.  The Company has
responded  to  the  subpoenas.


                                      -15-
<PAGE>
On or about March 22, 2000, Safety-Kleen Corp. was served with a subpoena issued
by  a  Grand  Jury  sitting in the United States District Court for the Southern
District  of  New York seeking production of the same documents described in the
Commission's  original  subpoena.  The  Company  has  responded to the subpoena.

The  Company  is  cooperating  with  each  of  the  investigations.

On  March  5,  2001  a  class action was commenced by investors who purchased or
acquired  certain  bonds  issued  by  the California Pollution Control Financing
Authority  on  July 1, 1997, secured by an Indenture Agreement with the Company.
Plaintiffs  seek  to recover compensatory damages in the amount of approximately
$21.7  million and punitive damages in the amount of approximately $65.2 million
as  well as related relief.  Although the Company is not a party to this action,
certain  of  the  individual  defendants  who  are present or former officers or
directors  of  the Company, may make demands to be indemnified by the Company in
connection  with  the  action.

FINANCIAL  ASSURANCE  ISSUES

Under  the Resource Conservation and Recovery Act ("RCRA"), the Toxic Substances
Control  Act  ("TSCA"),  and  analogous  state statutes, owners and operators of
certain   waste  management  facilities  are  subject  to   financial  assurance
requirements to ensure performance of their closure, post-closure and corrective
action  obligations.  The  Company and certain of its subsidiaries as owners and
operators  of  RCRA  and  TSCA  waste management facilities are subject to these
financial  assurance  requirements.  Applicable  regulations  allow  owners  and
operators  to provide financial assurance through a surety bond from an approved
surety.  Under federal regulations and in virtually all states, to qualify as an
approved  surety for the purposes of providing this type of financial assurance,
a  surety  company  must  be  listed  on  Circular  570, which is maintained and
distributed  publicly  by  the  United  States  Department  of the Treasury.  In
compliance  with the law, the Company and its subsidiaries procured surety bonds
issued  by  Frontier  Insurance  Company  ("Frontier") as financial assurance at
numerous  locations.  Of the total amount of financial assurance required of the
Company  and its affiliates under the environmental statutes, which approximated
$500  million  as  of  May  31,  2000,  slightly  more  than  50 percent of such
requirements  were satisfied through assurances provided by Frontier in the form
of  surety  bonds.

On  June  6, 2000, the U.S. Treasury issued notification that Frontier no longer
qualified  as  an  acceptable  surety on Federal bonds and had been removed from
Circular  570 on May 31, 2000.  Accordingly, effective May 31, 2000, the Company
and its affiliates no longer had compliant financial assurance for many of their
facilities.   Under  applicable  regulations,   the  Company  and  its  affected
subsidiaries  were required to obtain compliant financial assurance within sixty
days,  and  in  some  states, more quickly.  Although the surety bonds issued by
Frontier  are  no  longer  qualified as acceptable federal bonds, they remain in
place and effective until replaced and the Company continues to pay the premiums
on  the  bonds.

Immediately  following  the  June  6, 2000, announcement that Frontier no longer
qualified  as  an  approved  surety, the Company notified the EPA of its lack of
certified  financial  statements  for  fiscal  years 1999, 1998 and 1997 and the
difficulties  that  certain  alleged  accounting  irregularities would cause the
Company in attempting to obtain compliant financial assurance for its facilities
previously  covered  by  the  Frontier  bonds.  The  Company  and  the  EPA also
contacted states in which the non-compliant facilities were located and apprised
such  states  of  these  facts.

The  Company and the EPA, acting on behalf of many, but not all affected states,
then  engaged  in negotiations resulting in the entry of a Consent Agreement and
Final  Order  ("CAFO"), which the Bankruptcy Court approved on October 17, 2000.
The  main component of the CAFO is a compliance schedule for the Company and its
affected subsidiaries to obtain compliant financial assurance for the facilities
covered  by the Frontier bonds.  The CAFO also imposes a penalty on Safety-Kleen
Services,  Inc. which, as delays have ensued in the replacement of Frontier, and
additional  states  have  joined  the  CAFO (see discussion below), has grown to
approximately  $0.4  million.  Under  the  CAFO,  the  Company  and its affected
subsidiaries  were  required   to   obtain   compliant  financial  assurance  as
expeditiously  as possible, with the original deadline set at December 15, 2000.
The  EPA  reserved  discretion  to  extend  the  deadline  and did so on several
occasions.  The  current  deadlines  are  July  31, 2001 for some facilities and
September  30,  2001 for the remaining facilities.  The Company and its affected
subsidiaries  currently  are  negotiating  to  extend  the  September  30,  2001
deadline.  Although  the  EPA staff has agreed to an interim deadline of October
18,  2001,  there  can  be  no  assurance  that these negotiations will succeed.

On August 7, 2001, the Company obtained the collateral necessary to enable it to
replace  Frontier  Insurance  Company ("Frontier") surety bonds at more than 100
facilities,  pursuant  to  Bankruptcy  Court approval obtained on July 11, 2001.
These  facilities  are  subject  to  the July 31, 2001 deadline mentioned above.
Several  states  already have approved the replacement insurance policies, which
Indian  Harbor Insurance Company has issued, and in those states the Company now
has financial assurance coverage that complies with applicable law.  The Company
expects  the  remaining affected states and the EPA to approve the Indian Harbor
policies  in  the  near  future.


                                      -16-
<PAGE>
As  noted,  the  Company  also  obtained  an  extension  from the EPA, which the
Bankruptcy  Court  approved  on May 16, 2001, until September 30, 2001, although
the  EPA staff has agreed to an interim deadline of October 18, 2001 for certain
sites  where  Frontier  provides  financial assurance coverage. Most states that
have  retained  primary  jurisdiction  on this issue (see discussion below) have
indicated  that  they will accept these same deadlines. However, the Company has
not  concluded  agreements  with  all  such states. The Company may seek further
extensions  of  time from the EPA and the states, but the CAFO does not obligate
the  EPA  and  the states to grant such further extensions. Although the Company
has  obtained a proposal for the replacement of the Frontier coverage, there can
be  no assurance that the Company will be able to replace Frontier on a schedule
acceptable  to  the  EPA and the states. As noted above, the Company anticipates
seeking  Court  approval  for  the  replacement  of  Frontier  at only some such
facilities  and  is seeking additional time from the EPA and the affected states
for  the  replacement of Frontier at other facilities, many of which already are
closed.  Negotiations  regarding  the  Company's  request are underway. If these
negotiations  do not succeed, the active facilities for which Frontier continues
to  provide coverage (located primarily in Utah and Colorado) may be required to
close  and  the  Company  may  be  subject  to  further  penalties.

If  the  Company's  affected facilities are unable to secure compliant financial
assurance  by  the  applicable  deadline,  the CAFO requires the Company and its
affected  facilities  to  cease  accepting  waste  and  to  initiate closure and
post-closure  measures  in  accordance with their permits and applicable federal
and  state  requirements.  Under  the  CAFO,  the  EPA  reserves  the  right, in
consultation  with  an  affected  state,  to  determine in its discretion and in
accordance  with  applicable  law,  to modify these requirements.  The Company's
lenders and the unsecured creditors committee retain the right to oppose through
the  Bankruptcy  Court any efforts by the EPA to require the Company to initiate
any  such  closure  and  post-closure  measures.

The  Company  understands  that,  on  August  27,  2001,  Frontier  entered  a
rehabilitation  proceeding  that  the  New York Superintendent of Insurance will
administer  pursuant  to  New  York law. The Company further understands that in
such  a  proceeding,  the  Superintendent  takes  possession  of the property of
Frontier  and  conducts  its  business.  Because  Frontier  continues to provide
substantial  amounts  of financial assurance coverage at various facilities that
the  Company  and its subsidiaries own and operate, the Company is investigating
the  extent  to  which,  if  at all, the New York rehabilitation proceeding will
impact  the rights of the Company or the states or the EPA with respect to these
financial  assurance  surety  bonds.  The Company's preliminary understanding is
that  the rehabilitation proceedings will not affect the validity of such bonds.

Pursuant  to  the  terms  of the CAFO, the Company and its affected subsidiaries
have  agreed to a schedule by which the EPA and Participating States (as defined
below)  may  monitor  the  Company's  efforts  to   obtain  compliant  financial
assurance.  (A  "Participating  State"  is  a  state  with  authority to enforce
financial  assurance  requirements, but which referred that authority to the EPA
for  purposes of the CAFO.)  This schedule includes required periodic reports to
the  EPA  and  Participating  States.  The schedule also requires the Company to
provide audited restated financial statements for fiscal years 1997-1999 and the
audited  statements for fiscal year 2000 by certain deadlines, which the Company
did  not  meet.  Accordingly,  the  EPA  may  impose additional penalties on the
Company.  In  addition,  the  Company  or  certain  of  its subsidiaries will be
required  to  pay  additional penalty amounts to some states that enter similar,
but  separate,  agreements  with  the  Company  and its appropriate subsidiaries
concerning  the replacement of Frontier.  The CAFO also required the Company and
its  affected  subsidiaries  to  retain  an independent environmental auditor to
conduct  an  environmental  management   systems   analysis   and   to   conduct
environmental  audits at certain facilities.   This analysis and the audits have
been  completed.

Under  the  CAFO,  until  such  time  as  the  affected facilities have obtained
compliant  financial assurance, the Company and its affected facilities must not
seek  to  withdraw an existing irrevocable letter of credit, which is subject to
compromise  (see  Note  3), in the amount of $28.5 million from Toronto Dominion
Bank  for  the  benefit  of  Frontier and shall take all steps necessary to keep
current  the  existing  Frontier  surety  bonds.

In  the  CAFO,  the  Company  and  certain  of  its  subsidiaries waived certain
arguments  they  otherwise  could  have  asserted under the Bankruptcy Code with
respect  to  their  financial  assurance  and  certain  other  obligations under
environmental laws.  As noted, the Company's lenders and the unsecured creditors
committee  have  reserved  their  right  to  assert  certain  of such arguments.

The  Company  and  the EPA contacted states in which affected company facilities
were  located  and  apprised  these  states of the terms of the CAFO.  As noted,
several  of these states referred the affected facilities' non-compliance to the
EPA  for  enforcement and joined in the CAFO.  Certain other states (referred to
in  the  CAFO  as the "Parallel Action States") have entered parallel agreements
with  the  Company  and  appropriate subsidiaries.  Other states have entered or
have  indicated  an  interest  to enter agreements with affected facilities with
terms similar to the CAFO.  If the Company and/or its subsidiaries or affiliates
were  unable  to  conclude such an agreement in a particular state and were thus
required  to  close facilities in such state, the impact on the Company could be
material,  depending  upon  the  particular  facility  involved.

The  State  of  South Carolina has indicated that it will not be a Participating
State  or  a  Parallel  Action  State  for   facilities  owned  or  operated  by
Safety-Kleen  (Pinewood),  Inc.  (see  discussion  below).


                                      -17-
<PAGE>
The  State  of  Texas  had  set  May 31, 2001 as the deadline for replacement of
Frontier  coverage in that state.  The Company and its subsidiaries did not meet
that deadline.  On June 1, 2001, the State of Texas notified the Company and its
affected subsidiaries that it intended to (i) seek substantial penalties for the
failure  to have compliant financial assurance; (ii) deny certain pending permit
renewal and modification applications; and (iii) revoke the registration of some
of  the  used  oil  facilities  that the Company and its subsidiaries operate in
Texas.  On August 21, 2001, the Bankruptcy Court approved a settlement agreement
between  the Company and certain of its subsidiaries and the State of Texas with
respect  to  financial  assurance (and other matters) in that state.  Having now
obtained  Court  approval, the Company is implementing that settlement agreement
and  now  has compliant financial assurance where required at all the facilities
that  it  or its subsidiaries own and/or operate in Texas.  The Company, through
one  of  its subsidiaries, has paid a penalty of $1.5 million in connection with
such  settlement  agreement.

As noted, Frontier does not provide all the coverage required by the Company and
its  subsidiaries  for  closure,  post-closure and corrective action activities.
Reliance  Insurance  Company of Illinois ("Reliance") has provided a significant
proportion  of  such coverages.  The Company has received expressions of concern
from  various  states  about  the  quality of this coverage and some states have
indicated that they do not consider Reliance policies to satisfy requirements of
state  law.  The  Company understands that the Pennsylvania Insurance Department
has  placed  Reliance  under  an  order  of rehabilitation.  The Company further
understands that Reliance Group Holdings Inc., with which Reliance apparently is
affiliated,  has  filed  for  bankruptcy protection under Chapter 11 of the U.S.
Bankruptcy Code.  Prior to these developments, on December 15, 2000, the Company
received Bankruptcy Court approval to replace approximately $150 million of RCRA
financial  assurance  coverage underwritten by Reliance with new policies issued
by  Indian  Harbor  Insurance  Company,  an A.M. Best A+ rated underwriter.  The
effective  date  for  this  new  financial assurance is October 15, 2000, and is
still subject to state acceptance of the substitution, which the Company expects
to  receive.

GENERAL

The Company's hazardous and industrial waste services are continuously regulated
by  federal,  state, provincial and local laws enacted to regulate the discharge
of materials into the environment or primarily for the purpose of protecting the
environment.  This inherent regulation of the Company necessarily 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 violations
of  existing  permits  and licenses.  At September 14, 2001, subsidiaries of the
Company were involved in nine proceedings in which a governmental authority is a
party  relating primarily to activities at waste treatment, storage and disposal
facilities  where  the  Company believes sanctions involved in each instance may
exceed  $100,000.

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, disposal arrangers and transporters of the
waste  material,  may  be strictly, jointly and severally liable for remediation
costs  and  natural  resources  damage.  At  September 10, 2001, the Company had
identified  60  active  federal  or state-run CERCLA (Superfund) sites where the
Company  is  a  potentially responsible party ("PRP").  The Company periodically
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 financial soundness of other
PRPs  at  the  location.

PRODUCTS  LIABILITY  CASES

From  time  to  time,  the  Company  is named as a defendant in various lawsuits
arising  in  the  ordinary  course  of  business,  including proceedings wherein
persons  claim  personal  injury  resulting  from the use of the Company's parts
cleaner  equipment and/or cleaning products.  A number of such legal proceedings
are  currently pending in various courts and jurisdictions throughout the United
States.  These  proceedings  typically involve allegations that the solvent used
in  the  Company's parts cleaner equipment contains contaminants and/or that the
Company's  recycling  process  does not effectively remove the contaminants that
become  entrained in the solvent during its use.  In addition, certain claimants
assert  that the Company failed to adequately warn the product user of potential
risks.  In  the aggregate, the plaintiffs' claims are in excess of $150 million.
The  Company  maintains  insurance  which  it believes will provide coverage for
these  claims  over  self-insured  retentions  and  deductibles  which,  in  the
aggregate, the Company believes are less than $10 million.  The Company believes
that  these  claims  are not meritorious and intends to vigorously defend itself
and  the  safety  of  its  products  against  any  and  all  such  claims.

SAFETY-KLEEN  (PINEWOOD),  INC.

A  subsidiary  of  the Company, Safety-Kleen (Pinewood), Inc. ("Pinewood"), owns
and  operates  a  hazardous  waste  landfill near the Town of Pinewood in Sumter
County,  South  Carolina.  By  an  order dated May 19, 1994 ("Order"), the South
Carolina  Board  of  Health  and  Environmental  Control  ("Board") approved the
issuance  by  the  Department  of Health and Environmental Control ("DHEC") of a
RCRA  Part  B permit (the "Permit") for operation of the Pinewood Facility.  The
Permit  included  provisions  governing financial assurance and capacity for the
facility.


                                      -18-
<PAGE>
The  Order  established  Pinewood's  total  permitted  capacity of hazardous and
non-hazardous  waste  to  be  2,250 acre feet, including the amount of hazardous
waste  disposed  prior  to  the  date  of  the  Order.

South  Carolina law requires that hazardous waste facilities provide evidence of
financial  assurance for potential environmental cleanup and restoration in form
and  amount  to be determined by DHEC.  The Order required Pinewood to establish
and  maintain  an  Environmental  Impairment  Fund ("EIF") in the amount of $133
million  in  1994  dollars  by July 1, 2004 as financial assurance for potential
environmental  cleanup  and  restoration  of  environmental  impairment  at  the
Pinewood Facility.  The total fund requirement amount is to be adjusted annually
by  the  Implicit  Price Deflator for the Gross National Product as published by
the  U.S.  Department  of  Commerce.  The  EIF  has two components:  (1) the GSX
Contribution  Fund,  which  was to be funded by Pinewood in annual cash payments
over  a ten year period; and (2) the State Permitted Sites Fund, a legislatively
created  fund  derived  from  fees  on  waste disposal at the Pinewood Facility.
Under the Order, at the end of the 100-year post-closure care period, funding of
the  GSX  Contribution  Fund  will  be  subject  to evaluation by an independent
arbitrator, who will determine what level of funding, if any, is still required.
The  Company  is  entitled  to seek recovery of any excess amount so determined.
Upon  termination of the GSX Contribution Fund, any remaining trust assets would
revert to Pinewood.  In 1993 and 1994, Pinewood paid approximately $15.5 million
cash  into  the  GSX  Contribution  Fund, which has grown to approximately $20.1
million  as  of  May  31,  2001.

In  June  1995,   the  South  Carolina  legislature  approved  regulations  (the
"Regulations")  governing  financial  assurance  for  environmental  cleanup and
restoration.  The Regulations gave owner/operators of hazardous waste facilities
the  right  to choose from among five options for providing financial assurance.
The options included insurance, a payment bond, a letter of credit, a cash trust
fund  and  a  corporate  guaranty,  subject  to  a  financial  soundness  test.

From June 1995, under authority of the Regulations, Pinewood submitted financial
assurance  for  potential  environmental  cleanup  and  restoration  by way of a
corporate  guaranty  by  Laidlaw Inc. or insurance.  Pinewood also left in place
the  GSX  Contribution  Fund.  On  September 15, 1995, DHEC issued a declaratory
ruling  finding  that the Regulations were applicable to the financial assurance
requirements  for  Pinewood.

Pinewood appealed the May 19, 1994, DHEC order and the opposing parties appealed
the May 19, 1994, DHEC Order and the September 15, 1995, DHEC declaratory ruling
and  the  appeals  were  consolidated in the South Carolina Circuit Court in the
case  captioned  Laidlaw  Environmental Services of South Carolina, Inc. et al.,
Petitioners  vs.  South  Carolina Department of Health and Environmental Control
and  South  Carolina  Board  of  Health and Environmental Control, Respondents -
Energy  Research   Foundation,  et  al.,   Intervenors,   Docket   Numbers  C/A
94-CP-43-175,  94-CP-43-178,  94-CP-40-1412  and  94-CP-40-1859.  The  opposing
parties  included  Citizens  Asking  for  a  Safe  Environment,  Energy Research
Foundation,  County  of  Sumter,  Sierra Club, County of Clarendon, Senator Phil
Leventis,  the  South  Carolina  Department  of  Natural Resources and the South
Carolina  Public  Service  Authority.

The  South  Carolina  Court  of  Appeals  issued  a  decision  on  April 4, 2000
(substituting  for  a  January  17, 2000 ruling) ruling that (1) the Regulations
were invalid due to insufficient public notice during the promulgation procedure
and  ordering  Pinewood  to immediately comply with the cash financial assurance
requirements of the May 19, 1994 Order; and (2) both non-hazardous and hazardous
waste  count  against  Pinewood's capacity from the beginning of waste disposal,
thereby  reducing  the  remaining  permitted  capacity.

On  June  13,  2000, the South Carolina Supreme Court denied Pinewood's petition
for  a  writ of certiorari.  On June 14, 2000, DHEC sent notice by letter to the
Pinewood  Facility directing that Pinewood cease accepting waste for disposal in
30 days and submit a closure plan.  DHEC based this directive on the decision of
the Court of Appeals that all non-hazardous waste disposed at Pinewood should be
counted  against  Pinewood's hazardous waste capacity limit and DHEC's resulting
conclusion  that  there  is  no  remaining  permitted  capacity  at  Pinewood.


                                      -19-
<PAGE>
On  June  22,  2000,  DHEC notified Pinewood that the Court of Appeals' decision
vacated  the Regulations and, therefore, Pinewood has the sole responsibility to
provide  cash  funding  into  the EIF in accordance with the May 19, 1994 Order.
The  DHEC notice also directed Pinewood to provide information to DHEC within 15
days  on how Pinewood would comply with the Order including payment into the GSX
Contribution Fund.  As of May 31, 2001, there was approximately $20.1 million in
the GSX Contribution Fund and approximately $14.4 million in the State Permitted
Sites Fund.  In 2001 dollars, the total EIF funding requirement is approximately
$150.1 million.  To comply with the financial assurance provisions of the Order,
Pinewood  would  have  to contribute the following payments (in 2001 dollars) as
follows  ($  in  thousands),  subject to the automatic stay provisions discussed
below:

          Amount due during fiscal year:
            2001                                    $ 95,515
            2002                                      14,450
            2003                                       5,652
                                                    --------
          Total                                     $115,617
                                                    ========

Additionally,  on  June  9, 2000 (on the same day, but after, Pinewood filed its
petition  for  bankruptcy protection in the United States District Court for the
District  of  Delaware),  DHEC  issued  an Emergency Order finding that Frontier
Insurance  Company  (the  issuer  of  the  bonds used by Pinewood to provide for
financial  assurance  for the costs of closure and post-closure, and third party
liability)  no  longer met regulatory standards for bond issuers.  Based on this
finding,  DHEC  ordered Pinewood to cease accepting waste for disposal by August
28,  2000, unless it could provide acceptable alternative financial assurance by
June  27,  2000.

On  July  7, 2000, in the legal action captioned:  In re: Safety-Kleen Corp., et
al. Debtor, Chapter 11 Cases, Delaware Bankruptcy Court, Case Nos. 00-203 (PJW),
Adversary  Proceeding No. 00-698-Safety-Kleen (Pinewood), Inc. v. State of South
Carolina,  et  al.,  District  of  South  Carolina  (MJP) Case No. 3:00-2243-10,
Pinewood commenced legal proceedings in the United States District Court for the
District of Delaware challenging DHEC's June 9, 2000, Emergency Order and DHEC's
June 14 and June 22, 2000 notice letters.  Pinewood sought to stay and/or enjoin
DHEC and the State of South Carolina from enforcement of these directives on the
grounds  that  the  actions of DHEC were invalid under various provisions of the
United  States  Constitution,  violated  the  automatic  stay  provision  of the
Bankruptcy  Code  and/or  should  be  enjoined under the equitable powers of the
Bankruptcy  Court.  As an alternative cause of action, Pinewood demanded that it
be  compensated  for  the taking of its property without just compensation under
provisions  of  the  Constitutions  of  the United States and the State of South
Carolina.

On  July 12, 2000, the Delaware U.S. District Court issued an Order transferring
the case to the United States District Court for the District of South Carolina.

On  August  25, 2000, the U.S. District Court for the District of South Carolina
issued  rulings  that  (1)  denied South Carolina's motion to dismiss Pinewood's
claims  upon  jurisdictional  grounds  and  certified the issue for an immediate
appeal  to  the  United States Court of Appeals for the Fourth Circuit; (2) held
that  the  June  9,  2000  Emergency  Order  was  subject  to the automatic stay
provisions  of  Section  362  of  the Bankruptcy Code; and (3) denied Pinewood's
motion  for  a  preliminary  injunction  with  respect to the June 14, 2000 DHEC
letter.

The State of South Carolina and Pinewood appealed the District Court's ruling to
the United States Court of Appeals for the Fourth Circuit.  No decision has been
issued  by  the  Court  of  Appeals.

On  September  25,  2000,  Pinewood  filed  a  request  with  DHEC  for a permit
modification  increasing  landfill  capacity.  Pinewood also filed a request for
temporary  authorization  from  DHEC  to continue waste disposal at the facility
pending  a  DHEC  decision  on  the  requested  permit  modification.

At  midnight  on  September  25,  2000, Pinewood suspended waste disposal in the
landfill  pending  action by DHEC and/or court decision allowing continued waste
disposal.  On  September  26, 2000, DHEC denied Pinewood's request for temporary
authorization  for  continued  waste  disposal  at  its  Pinewood  landfill.

The  Stock  Purchase  Agreement  among Rollins Environmental Services, Inc. (now
Safety-Kleen  Corp.)  and  Laidlaw Inc. and Laidlaw Transportation, Inc. ("LTI")
dated February 6, 1997, provides that Laidlaw Inc. shall maintain, solely at its
expense,  until  the  tenth anniversary of the Closing Date (May 15, 2007), such
financial  mechanism  as  may be permitted by the relevant environmental laws to
provide the required financial assurance for potential environmental cleanup and
restoration  at  the  Pinewood  facility.


                                      -20-
<PAGE>
VILLE  MERCIER  FACILITY

On  January  12,  1993,  Safety-Kleen Services (Mercier) Ltd. ("the Subsidiary")
filed  a  declaratory  judgement action (Safety-Kleen Services (Mercier) Ltd. v.
Attorney  General  of Quebec; Pierre Paradis, in his capacity as Minister of the
Environment  of  Quebec;  Ville  Mercier; and LaSalle Oil Carriers, Inc.) in the
Superior  Court  for  the  Province  of  Quebec, District of Montreal. The legal
proceeding  seeks  a  court  determination  of the liability associated with the
contamination of former lagoons that were located on the Company's Ville Mercier
property.  The  Subsidiary  asserts  that  it  has  no  responsibility  for  the
contamination  on  the  site.  The  Minister filed a Defense and Counterclaim in
which  it  asserts  that  the  Subsidiary  is responsible for the contamination,
should reimburse the Province of Quebec for past costs incurred in the amount of
CDN  $17.4 million, and should be responsible for future remediation costs.  The
legal  proceedings  are  in  the  discovery  stage.

The  contamination  on  the  Ville  Mercier facility dates back to 1968, when an
unrelated company owned the property.  In 1968, the Quebec government issued two
permits  to  the  unrelated  company to dump organic liquids into lagoons on the
Ville  Mercier property.  By 1972, groundwater contamination had been identified
and the Quebec government provided an alternate water supply to the municipality
of  Ville  Mercier.  Also in 1972, the permit authorizing the dumping of liquids
was  terminated  and  a  permit to operate an organic liquids incinerator on the
property was issued.  (The entity to which this permit was issued was indirectly
acquired  by  the  Company  in 1989.)  In 1973, the Quebec government contracted
with the incinerator operator to incinerate the pumpable liquids in the lagoons.
In  1980,  the  incinerator  operator  removed,  solidified  and disposed of the
non-pumpable  material  from  the  lagoons  in  a  secure cell and completed the
closure  of  the  lagoons  at  its  own expense.  In 1983, the Quebec government
constructed  and  continues  to  operate  a  groundwater  pumping  and treatment
facility  near  the  lagoons.

The  Company  believes  that the Subsidiary is not the party responsible for the
lagoon  and   groundwater  contamination  and  the  Subsidiary  has  denied  any
responsibility for the decontamination and restoration of the site.  In November
1992,  the  Minister  of  the Environment ordered the Subsidiary to take all the
necessary measures to excavate, eliminate or treat all of the contaminated soils
and  residues  and   to  recover  and  treat  all  of  the  contaminated  waters
resulting from the aforementioned measures. The Subsidiary  responded by letter,
reiterating  its  position  that  it had no responsibility for the contamination
associated with the discharges of wastes into the former Mercier lagoons between
1968  and  1972  and  proposing  to submit the question of responsibility to the
Courts for determination as expeditiously as possible through the cooperation of
the  parties'  respective  attorneys,  resulting  in  the  filing of the pending
action.

On  or  about February 9 and March 12, 1999, Ville Mercier and three neighboring
municipalities  filed  separate  legal  proceedings  against  the Subsidiary and
certain  related  companies together with certain former officers and directors,
as  well  as  against  the Government of Quebec.  (Ville Mercier v. Safety-Kleen
Services  (Mercier) Ltd., et. al.; Ville de Chateauguay v. Safety-Kleen Services
(Mercier)  Ltd.,  et.  al.; Municipality of Ste-Martine v. Safety-Kleen Services
(Mercier)  Ltd.,  et.  al.;  and St.Paul de Chateauguay v. Safety-Kleen Services
(Mercier)  Ltd.,  et.  al.)  The lawsuits assert that the defendants are jointly
and  severally  responsible  for the contamination of groundwater in the region,
which Plaintiffs claim was caused by contamination from the former Ville Mercier
lagoons, and which they claim caused each municipality to incur additional costs
to  supply  drinking water for their citizens since the 1970's and early 1980's.
The  four  municipalities  claim  a  total  of  CDN  $1,595,000  as  damages for
additional  costs to obtain drinking water supplies and seek an injunctive order
to  obligate  the  defendants  to  remediate the groundwater in the region.  The
Subsidiary  will continue to assert that it has no responsibility for the ground
water  contamination  in the region.  The legal proceedings are in the discovery
stage.

Pursuant  to  the  Stock  Purchase  Agreement,  Laidlaw  Inc.  and LTI agreed to
indemnify  and  hold  harmless  the Company and its subsidiaries for any damages
resulting  from the remediation of contaminated soils and water arising from the
former  lagoon  sites  and  the operation of the incinerator at Mercier, Quebec.
The  indemnification  is  only to the extent that the aggregate cash expenditure
with respect to such damages exceeds in the aggregate (i) $1 million during such
year  and  (ii) since May 15, 1997, an amount equal to the product of $1 million
times  the  number of years that have elapsed since May 15, 1997; however, there
shall  be  no  indemnification  for any cash expenditures incurred more than six
years  after  May  15,  1997.  As  of  September  14,  2001, the Company has not
incurred  expenses  for  which it would be entitled to indemnification under the
Stock  Purchase  Agreement.

MARINE  SHALE  PROCESSORS

Beginning  in  the  mid-1980's  and  continuing  until  July  1996, Marine Shale
Processors, Inc., located in Amelia, Louisiana ("Marine Shale"), operated a kiln
which incinerated waste producing a vitrified aggregate as a by-product.  Marine
Shale  contended  that  its operation recycled waste into a useful product, i.e.
vitrified  aggregate,  and  therefore,  was  exempt  from  RCRA  regulation  and
permitting  requirements  as  a  Hazardous Waste Incinerator.  The EPA contended
that Marine Shale was a "sham-recycler" subject to the regulation and permitting
requirements  as  a  Hazardous  Waste Incinerator under RCRA, that its vitrified
aggregate  by-product  is  a  hazardous waste, and that Marine Shale's continued
operation  without required permits was illegal.  Litigation between the EPA and
Marine  Shale  with respect to this issue began in 1990 and continued until July
1996  when  Marine  Shale  was ordered to shut down its operations by U.S. Fifth
Circuit  Court  of  Appeals.


                                      -21-
<PAGE>
During  the  course of its operation, Marine Shale produced thousands of tons of
aggregate,  some  of which was sold as fill material at various locations in the
vicinity  of  Amelia, Louisiana, but most of which is stockpiled on the premises
of  the  Marine  Shale Facility.  Moreover, as a result of past operations, soil
and  groundwater  contamination  may  exist  on  the  Marine  Shale  site.

In  November  1996, an option to buy Marine Shale was obtained by GTX, Inc. with
the  intent  to operate the facility as a permitted Hazardous Waste Incinerator.
Subsequently,  Marine  Shale,  GTX and the EPA reached a settlement, including a
required cleanup of the aggregate and the facility, and the Louisiana Department
of  Environmental  Quality  issued  a  draft  permit to GTX for operation of the
Marine  Shale facility as a RCRA-permitted Hazardous Waste Incinerator.  Appeals
were  taken  by  opposition parties and in October 1999, a Louisiana State Court
Judge  ruled  that  the  draft  permit was improperly issued.  GTX appealed this
decision  and  in  October  2000, the Appeals Court reversed the lower court and
affirmed  the  permit  issuance.  The  opposition parties filed applications for
Supervisory  Writs with the Louisiana Supreme Court, and these applications were
denied  in  April 2001.  There may be further legal challenges to the permit and
GTX  expects to spend more than $60 million updating the facility in a year long
project  prior  to  commercial  operation  of  the  facility.  Therefore,  it is
uncertain whether or when GTX will begin operation of the Marine Shale facility.

The  Company  was  one  of  the largest customers of Marine Shale.  In the event
Marine  Shale does not operate, the potential exists for an EPA action requiring
cleanup  of the Marine Shale site and the stockpiled aggregate under CERCLA.  In
this event, Safety-Kleen Corp. would be exposed to potential financial liability
for  remediation  costs  as  a  potentially  responsible  party  under  CERCLA.

The  Stock Purchase Agreement provides that Laidlaw Inc. and LTI shall indemnify
Safety-Kleen  Corp.  for  environmental  liability  arising  with respect to the
treatment  of waste at the Marine Shale facility. The indemnification is only to
the  extent  that  the  aggregate  cash expenditure with respect to such damages
exceeds in the aggregate (i) $1 million during such year; and (ii) since May 15,
1997,  an  amount  equal  to the product of $1 million times the number of years
that have elapsed since May 15, 1997; however, there shall be no indemnification
for  any  cash  expenditures  by Safety-Kleen Corp. incurred more than six years
after  May  15,  1997.  As  of  September 14, 2001, the Company has not incurred
expenses  for  which  it  would  be  entitled to indemnification under the Stock
Purchase  Agreement.

LAMBTON  HAZARDOUS  WASTE  LANDFILL,  ONTARIO,  CANADA

On September 3, 1999, The Company's Lambton hazardous waste landfill facility in
Ontario,  Canada, discovered an upwelling of water and natural gas in a disposal
cell  designated  as  Sub-cell 3. While in the course of trying to determine the
source  and cause of the upwelling, the Company informed the Ontario Ministry of
Environment  and  Energy  ("MOE")  of  the  situation.  On November 2, 1999, MOE
issued  a Field Order finding that the upward migration of water and methane gas
onto the landfill cell floor necessitated that the Company not utilize the newly
constructed Sub-cell 3 for waste disposal.   On December 14, 1999 the MOE issued
a  second Field Order requiring that Sub-cell 4, another newly constructed cell,
not  be  utilized  for  waste  disposal  after  MOE officials observed what they
believed  to  be  significant  gas  evolution  from the bottom of the cell.   On
December  21,  1999  independent  technical  experts  and  Company professionals
presented  to MOE testimony and a report addressing MOE concerns.  Following the
hearing  and  testimony, the MOE issued a third Field Order on December 24, 1999
revoking  the two previous orders and allowing the utilization of Sub-cell 4 for
waste  disposal  under  new  conditions  which  included  that,  (1) no waste in
Sub-cell  4  was  to  be  placed below an elevation of 182 meters above mean sea
level and (2) with respect to Sub-cell 3 the Company was to provide a report for
the  approval  of  the  Director  of  the  MOE  which would provide the plan for
identifying  potential  areas of gas and water venting, the proposed measures to
remediate all areas identified and further steps to protect the integrity of the
sub-cell.  In  accordance  with  the  third Field Order, the Company submitted a
report  to  the  MOE  in February 2000 outlining its plan for present and future
site  activities.  The  MOE  issued an Order approving the remediation plan.  In
accordance  with  the  approved plan, physical remediation began in spring 2001.
The  Order  requires  that  the plan be fully implemented by the end of December
2001.

RAYGAR  ENVIRONMENTAL  SYSTEMS  INTERNATIONAL  LITIGATION

On  August  7,  2000, RayGar Environmental Systems International, Inc. filed its
First  Amended Complaint in the United States District for the Southern District
of  Mississippi,  Hattiesburg  Division,  Civil  Action  No. 2:9CV376PG, against
Laidlaw  Inc.,  Laidlaw  Investments, Ltd., LTI, Laidlaw Environmental Services,
Inc.  (now  Safety-Kleen  Corp.),  LES,  Inc.  (a wholly owned subsidiary of the
Company  now  known  as  Safety-Kleen  Services,  Inc.),  Laidlaw  Environmental
Services  (U.S.),  Inc.  (a  wholly owned subsidiary of the Company now known as
Safety-Kleen  (U.S.),  Inc.),  Laidlaw  OSCO  Holdings,  Inc.  (a  wholly  owned
subsidiary  of  the  Company  now  known  as  Safety-Kleen OSCO Holdings, Inc.),
Laidlaw  International,  and  Safety-Kleen  Corp.  alleging a variety of Federal
antitrust  violations and state law business torts.  RayGar seeks damages it has
allegedly  sustained  as a result of the defendants' actions in an amount of not
less  than  $450  million  in actual compensatory damages and not less than $950
million  for  punitive  damages.


                                      -22-
<PAGE>
The  dispute arises from an unsuccessful effort pursuant to an agreement between
RayGar  and  a  Company  subsidiary,  to obtain RCRA and related permits for the
operation  of  a wastewater treatment facility in Pascagoula, Mississippi.  This
lawsuit  is  in  the  very  early  stages  of  discovery.  Laidlaw Inc., Laidlaw
Investments,  Ltd., LTI and Laidlaw International have filed a motion to dismiss
the Complaint for lack of personal jurisdiction and for failure to state a claim
upon  which  relief  can  be  granted.  The action has not proceeded against the
Company  and  its  subsidiaries due to the filing of their Chapter 11 bankruptcy
petitions  on  June  9,  2000.

FEDERATED  HOLDINGS,  INC.  LITIGATION

On  November  6,  2000,  Federated  Holdings, Inc. (FHI) filed a lawsuit against
Laidlaw  Inc.,  Laidlaw  Investments, Ltd., LTI, Laidlaw Environmental Services,
Inc.  (now  Safety-Kleen  Corp.),  LES,  Inc.  (a wholly owned subsidiary of the
Company  now  known  as Safety-Kleen Services, Inc. and successor in interest to
Laidlaw  Environmental  Services  (U.S.),  Inc.), Laidlaw OSCO Holdings, Inc. (a
wholly  owned subsidiary of the Company now known as Safety-Kleen OSCO Holdings,
Inc.),  Laidlaw  International,  and  Safety-Kleen  Corp.  in  the United States
District  Court  for the Southern District of Mississippi, Hattiesburg Division,
Civil  Action  No. 2:00CV286 alleging  a variety of Federal antitrust violations
and state law business torts.  FHI seeks damages it has allegedly sustained as a
result  of the Defendants' actions in an amount of not less than $200 million in
actual compensatory damages and not less than $250 million for punitive damages.

The  dispute arises from an unsuccessful effort pursuant to an agreement between
FHI  and  a  Company  subsidiary  to  obtain  RCRA  and  related permits for the
operation  of  a  hazardous waste landfill in Noxubee County, Mississippi.  This
lawsuit  is  in  the  very  early  stages  of  discovery.  Laidlaw Inc., Laidlaw
Investments,  Ltd., LTI and Laidlaw International have filed a motion to dismiss
the Complaint for lack of personal jurisdiction and for failure to state a claim
upon  which  relief  can  be  granted.  The action has not proceeded against the
Company  and  its  subsidiaries due to the filing of their Chapter 11 bankruptcy
petitions  on  June  9,  2000.

HUDSON  COUNTY  IMPROVEMENT  AUTHORITY  LITIGATION

In  July  1999,  Hudson  County Improvement Authority ("HCIA") filed suit in the
Superior  Court, Hudson County, New Jersey against SK Services (East), L.C. ("SK
Services  East")  (an  indirect  wholly  owned Company subsidiary), Safety-Kleen
Corp.,  American  Home Assurance Company, and Hackensack Meadowlands Development
Commission.  An  Amended  Complaint  was filed on August 18, 1999, in which HCIA
sought  damages  and injunctive relief evicting SK Services East from a 175 acre
site  in  Kearny, New Jersey owned by HCIA.  SK Services East had been using the
site  pursuant  to  an  Agreement and Lease dated as of February 2, 1997 for the
processing and disposal of processed dredge material.  HCIA alleged that certain
conditions  precedent  to SK Services East's right to continue operations at the
site  had  not  occurred,   that  as  a  result  the  Agreement  and  Lease  had
automatically  terminated,  that  SK Services East owed HCIA some $11 million in
back  rent, and that SK Services East was obligated to finish the remediation of
the  site  and  its  preparation  for  development as a commercial property.  In
January  2000,  the Court granted HCIA summary judgment on its motion to declare
the  Agreement  and  Lease  null  and  void  as  a  result of the failure of the
conditions  precedent.  This  ruling  effectively  terminated  the  relationship
between SK Services East and HCIA leaving only the issue of the determination of
the  rights  and  responsibilities  of  the  parties  in  the  unwinding  of the
relationship.  In  May  2000,  HCIA  filed for summary judgment seeking an order
declaring  that  SK Services East is obligated to complete all measures required
under  the  Remedial  Action  Work  Plan for the site.  SK Services East filed a
brief opposing the motion.  In June 2000, HCIA withdrew its pending motion, with
the  Court's  understanding  that  the motion could be re-filed if the automatic
stay  in  connection  with  the  Company's  Chapter  11 bankruptcy protection is
lifted.  On  July 11, 2001 the Bankruptcy Court entered an Order authorizing the
Company's  rejection of the executory contracts and the unexpired lease to which
SK  Services  East and HCIA were parties.  The Order does not limit, abridge, or
otherwise  effect  HCIA's  right  to assert and seek remedies regarding its pre-
and/or  postpetition  claims  against  the Company for damages and other relief.
Also  on  July 11, 2001 the Bankruptcy Court granted HCIA's motion to modify the
Bankruptcy  Code's  automatic stay, and entered an Order permitting the Superior
Court of New Jersey, Hudson County, to make its final determination regarding SK
Services  East  contractual  obligations  under  the  Agreement  and Lease.  The
Superior  Court  has  scheduled oral argument on this matter for September 2001.

ECDC  ENVIRONMENTAL,  L.C.  CLAIM

Certain subsidiaries of the Company entered into a long-term contract (the "4070
Contract")  with  General  Motors  Corporation ("GM") to manage certain GM waste
products.  One  requirement of the 4070 Contract was to provide a dedicated cell
for  GM  waste products at a landfill facility owned by ECDC Environmental, L.C.
("ECDC"),  which  was  then a Company subsidiary.  In November 1997, the Company
sold  its  interest  in  ECDC  to  an affiliate of Allied Waste Industries, Inc.
Pursuant  to  the  sale,  ECDC,  the  Company,  and certain Company subsidiaries
entered the GM Waste Disposal Agreement (the "WDA") governing the obligations of
the  parties  with  respect  to  the  continued  management  of  GM waste in the
dedicated  cell  at  the  ECDC  landfill.

By  letter  dated  May  15,  2000,  the  Company  was notified of GM's intent to
terminate the 4070 Contract for default, effective December 31, 2000.  Under the
WDA,  default  by  the  Company  and/or its subsidiaries under the 4070 Contract
would have obligated the Company and/or its affected subsidiaries to pay certain
costs,  rebates  and  damages  to  ECDC in accordance with the terms of the WDA.

The  Company  and  certain  of  its  wholly  owned subsidiaries, including those
subsidiaries  which  were  parties  to  the 4070 Contract and the WDA, filed for
protection  under  Chapter  11  of  the Bankruptcy Code.  In anticipation of the
Company's  rejection  of  the  4070  Contract  pursuant to 11 U.S.C. Sec.365, on


                                      -23-
<PAGE>
October  30,  2000,  ECDC  filed  a  claim for not less than approximately $11.0
million  plus  other  and unspecified additional damages for Company's breach of
the  4070  and  WDA  contracts.  Subsequently,  the Bankruptcy Court granted the
motion by the Company and certain of its subsidiaries, which were parties to the
4070  Contract  and  the  WDA,  to  reject  both  the 4070 Contract and the WDA,
effective  December  1,  2000.

BRYSON  ADAMS  LITIGATION

In  1996,  a  lawsuit  was filed in the federal court in Baton Rouge, Louisiana,
under  the  caption Carleton Gene Rineheart et al. v. CIBA-GEIGY Corporation, et
al.,  U.S.  District  Court  for  the  Middle District of Louisiana, CA #96-517,
Section  B(2).  In  October  1999,  a substantially similar lawsuit was filed in
state  court  in Lafayette Parish, Louisiana, under the caption of Bryson Adams,
et  al.  v.  Environmental  Purification  Advancement Corporation, et al., Civil
Action No. 994879, Fifteenth Judicial District Court, Parish of Lafayette, State
of  Louisiana.  In  December  2000, these two cases were consolidated with Adams
designated  as  the  lead case.  In this consolidated litigation, plaintiffs are
suing  for  alleged  personal  injury  and/or property damage arising out of the
operation  of  certain  waste  disposal facilities near Bayou Sorrel, Louisiana.
The  initial  Bryson Adams lawsuit was filed on behalf of 320 plaintiffs against
191  defendants.

A  Company  subsidiary  which owns and operates a hazardous waste deep injection
well  in  Bayou  Sorrel, Louisiana is named as a defendant.  A different Company
subsidiary  is also named as a defendant for its alleged role as a generator and
arranger for disposal or treatment of hazardous waste at certain of the disposal
facilities  which  are  named in the litigation.  It is alleged that the Company
subsidiary  was the operator of the injection well in question from 1974 through
the present.  In addition to the claims asserted by the plaintiffs, there is the
potential that the customers of the injection well, who are also defendants, may
assert  claims  for  indemnification  against  the  Company.  The action has not
proceeded against the Company subsidiaries due to the filing of their Chapter 11
Bankruptcy  petition  on  June  9,  2000.

FUSRAP  WASTE  DISPOSAL  AT  SAFETY-KLEEN  (BUTTONWILLOW),  INC.

Safety-Kleen (Buttonwillow), Inc., a subsidiary of the Company owns and operates
a  hazardous waste landfill in Kern County California. The facility accepted and
disposed  of construction debris that originated at a site in New York which was
part  of  the federal Formerly Utilized Sites Remediation Program (FUSRAP).  The
construction  debris  was  low-activity radioactive waste and was shipped to the
site  by  the  U.S.  Army  Corps of Engineers (USACE). FUSRAP was created in the
mid-1970s  in an attempt to manage various sites around the country contaminated
with  residual  radioactivity  from  activities  conducted  by the Atomic Energy
Commission  and  United  States  military  during  World  War II. The California
Department  of  Health  Services  (DHS)  has  claimed  that the facility did not
lawfully  accept  the  waste.  Both  DHS  and the Department of Toxic Substances
Control  (DTSC)  have  filed  claims  in  the  Company's  Bankruptcy proceedings
preserving  the  right  of  the  agencies  to seek penalties and possibly compel
removal  of  the  material should an ongoing investigation reveal the subsidiary
acted  improperly.  DHS  claimed  penalties  in  the  amount of $0.6 million and
potential  removal  costs  of  $15.5  million  should DHS have to oversee and/or
conduct  the  removal. The proof of claim filed by the DTSC was in the amount of
$15.0  million  for potential penalties plus an unspecified amount for any costs
the  DTSC  may  incur  should  the subsidiary be forced to remove the waste. The
subsidiary  and the USACE contend the material was properly disposed of and will
vigorously resist the imposition of any penalties or any efforts to require that
waste  be  removed.

NOTE  8-  SEGMENT  INFORMATION

Segment  information  has  been  prepared  in  accordance  with  SFAS  No.  131,
"Disclosures  about  Segments  of  an  Enterprise and Related Information."  The
accounting  policies  of  the  segments  are  the same as those described in the
summary  of  significant  accounting  policies.  Performance  of the segments is
evaluated  on  several  factors,  of  which  the  primary  financial  measure is
operating  income  before  depreciation and amortization and provision for early
facility closures  ("EBITDA").  Transactions  between the segments are accounted
for  at  the Company's estimate of fair value based on similar transactions with
outside  customers.  In  general,  SFAS  No. 131 requires that business entities
report selected information about operating segments in a manner consistent with
that  used  for  internal  management  reporting.

The  Company  is  organized  along  its  two  primary revenue producing business
activities  -  Branch Sales and Service and Chemical Services.  Branch Sales and
Service provides various services to both industrial and commercial customers as
well  as governmental entities.  These services include, but are not limited to,
parts  cleaner  services  and  hazardous  and  non-hazardous  waste  collection.
Chemical Services involves the treatment, recycling and destruction of hazardous
and  non-hazardous  waste at Company owned and operated facilities.  The Company
operates  thermal  destruction  incinerators, landfills and wastewater treatment
facilities.  Each  segment  is  managed independently from the other and reports
separately  to  senior  management.

The Company currently classifies as "Other" in its segment reporting the cost of
certain  Company-wide (corporate) functions and services consisting primarily of
legal,  finance and information technology.  In addition, this category includes
the incremental cost of the Company's efforts related to its internal accounting
review and the various investigations of its financial results.  As discussed in
Note  4,  other  components  of  income and expense directly attributable to the
Chapter  11  Cases  are classified as "Reorganization items" in the consolidated
statements  of  operations.


                                      -24-
<PAGE>
Management  believes  that the unaudited financial results for segment reporting
purposes  for  the  first three quarters of fiscal 2001 are reasonable and is in
accordance  with  SFAS  No.  131.

The  table below reflects selected segment information relating to the Company's
operations  ($  in  thousands):

<TABLE>
<CAPTION>
                                            BRANCH SALES    CHEMICAL
                                            AND SERVICE      SERVICES        OTHER         TOTAL
                                           --------------  ------------  -------------  ------------
<S>                                        <C>             <C>           <C>            <C>
     Nine Months Ended May 31, 2001
     ------------------------------
External revenue                           $     750,983   $    370,374  $         50   $  1,121,407
Intersegment revenue                               7,888         40,276       (48,164)            --
Depreciation and amortization                     79,823         22,653         1,927        104,403
Provision for early facility closures                 --         44,773            --         44,773
EBITDA                                            23,892         14,151       (48,838)       (10,795)


     Three Months Ended May 31, 2001
     -------------------------------
External revenue                           $     251,311   $    123,254  $         50   $    374,615
Intersegment revenue                               2,671         12,187       (14,858)            --
Depreciation and amortization                     26,441          6,835           584         33,860
Provision for early facility closures                 --             --            --             --
EBITDA                                            (2,525)         9,235       (18,737)       (12,027)


     Three Months Ended February 28, 2001
     ------------------------------------
External revenue                           $     245,480   $    124,395  $         --   $    369,875
Intersegment revenue                               2,497         11,774       (14,271)            --
Depreciation and amortization                     26,804          7,370           509         34,683
Provision for early facility closures                 --         35,297            --         35,297
EBITDA                                            13,394          6,489       (16,900)         2,983


     Three Months Ended November 30, 2000
     ------------------------------------
External revenue                           $     254,192   $    122,725  $         --   $    376,917
Intersegment revenue                               2,720         16,315       (19,035)            --
Depreciation and amortization                     26,578          8,448           834         35,860
Provision for early facility closures                 --          9,476            --          9,476
EBITDA                                            13,023         (1,573)      (13,201)        (1,751)
</TABLE>

External  revenue  and  intersegment  revenue  related  to products and services
within  the  Branch  Sales and Service segment is shown in the table below ($ in
thousands):

<TABLE>
<CAPTION>
                                                                        THREE MONTHS ENDED
                                              NINE MONTHS   ---------------------------------------------
                                                 ENDED         MAY 31,       FEBRUARY 28,   NOVEMBER 30,
                                             MAY 31, 2001        2001            2001           2000
                                             -------------  ---------------  -------------  -------------
<S>                                          <C>            <C>              <C>            <C>
Parts Cleaner Services                       $     246,548  $        80,039  $      83,096  $      83,413
Paint Refinishing Services                          44,102           14,628         14,168         15,306
Imaging Services                                    31,546           10,826         10,686         10,034
Dry Cleaner Services                                14,384            4,900          4,922          4,562
Vacuum Truck Services                               40,481           13,364         12,695         14,422
Integrated Customer Compliance Services             13,542            4,577          4,218          4,747
Industrial Waste Collection Services               168,518           57,079         55,792         55,647
Used Oil Collection Services                        48,275           15,974         14,737         17,564
Oil Re-Refining                                    114,225           38,786         35,970         39,469
Automotive Recovery Services                        20,266            7,072          6,814          6,380
Additional services                                 16,984            6,737          4,879          5,368
                                             -------------  ---------------  -------------  -------------
    Total external and intersegment revenue  $     758,871  $       253,982  $     247,977  $     256,912
                                             =============  ===============  =============  =============
</TABLE>


                                      -25-
<PAGE>
External  revenue  and  intersegment  revenue  related  to products and services
within  the  Chemical  Services  segment  is  shown  in  the  table  below ($ in
thousands):

<TABLE>
<CAPTION>
                                                                                 THREE MONTHS ENDED
                                                 NINE MONTHS      ------------------------------------------------
                                                    ENDED              MAY 31,       FEBRUARY 28,    NOVEMBER 30,
                                                 MAY 31, 2001           2001             2001            2000
                                             -------------------  ----------------  --------------  --------------
<S>                                          <C>                  <C>               <C>             <C>
Incineration                                 $          106,422   $        35,303   $      34,821   $      36,298
Landfill                                                 67,461            23,503          22,464          21,494
Service Center                                          200,805            65,701          67,031          68,073
Additional services                                      67,652            23,061          20,939          23,652
Transportation                                           33,347             7,784          11,240          14,323
Wastewater Treatment                                     30,200            10,158           9,682          10,360
                                             -------------------  ----------------  --------------  --------------
                                                        505,887           165,510         166,177         174,200
Less: Intrasegment revenue                              (95,237)          (30,069)        (30,008)        (35,160)
                                             -------------------  ----------------  --------------  --------------
    Total external and intersegment revenue  $          410,650   $       135,441   $     136,169   $     139,040
                                             ===================  ================  ==============  ==============
</TABLE>

The  table  below  provides  a  reconciliation  of  segment information to total
consolidated  information  ($  in  thousands):

<TABLE>
<CAPTION>
                                                                      THREE MONTHS ENDED
                                        NINE MONTHS    -------------------------------------------------
                                           ENDED            MAY 31,       FEBRUARY 28,     NOVEMBER 30,
                                        MAY 31, 2001         2001             2001            2000
                                       --------------  ---------------  ---------------  ---------------
<S>                                    <C>             <C>              <C>              <C>
EBITDA                                 $     (10,795)  $      (12,027)  $        2,983   $       (1,751)
Depreciation and amortization               (104,403)         (33,860)         (34,683)         (35,860)
Provision for early facility closures        (44,773)              --          (35,297)          (9,476)
                                       --------------  ---------------  ---------------  ---------------
    Operating loss                     $    (159,971)  $      (45,887)  $      (66,997)  $      (47,087)
                                       ==============  ===============  ===============  ===============
</TABLE>


NOTE  9  -  CONDENSED  COMBINED  FINANCIAL  STATEMENTS OF ENTITIES IN BANKRUPTCY

The  following  condensed  combined  financial  statements  are  presented  in
accordance  with  SOP  90-7:

<TABLE>
<CAPTION>
                            CONDENSED COMBINED CONSOLIDATING STATEMENT OF OPERATIONS
                                         NINE MONTHS ENDED MAY 31, 2001
                                                   (UNAUDITED)


                                               ENTITIES IN      ENTITIES NOT IN
                                              REORGANIZATION    REORGANIZATION                     CONSOLIDATED
In thousands                                   PROCEEDINGS        PROCEEDINGS      ELIMINATIONS       TOTALS
-------------------------------------------  ----------------  ----------------- ---------------   -------------
<S>                                          <C>               <C>                <C>             <C>
Revenues                                     $     1,036,581   $        153,245   $     (68,419)  $   1,121,407
Operating expenses                                 1,207,613            142,184         (68,419)      1,281,378
                                             ----------------  -----------------  --------------  --------------
Operating income (loss)                             (171,032)            11,061              --        (159,971)
Interest (expense) income, net                         1,150             (5,575)             --          (4,425)
Other income (expense)                                  (210)                99              --            (111)
Equity in earnings of associated companies             3,048                 --          (3,048)             --
                                             ----------------  -----------------  --------------  --------------
Income (loss) before reorganization items,
  income taxes and minority interests               (167,044)             5,585          (3,048)       (164,507)
Reorganization items                                 (24,681)                --              --         (24,681)
Income tax expense                                        --             (2,419)             --          (2,419)
                                             ----------------  -----------------  --------------  --------------
Income (loss) before minority interests             (191,725)             3,166          (3,048)       (191,607)
Minority interests                                        --               (118)             --            (118)
                                             ----------------  -----------------  --------------  --------------
Income (loss) before extraordinary item             (191,725)             3,048          (3,048)       (191,725)
Extraordinary item, net of tax
  (early extinguishment of debt)                       5,787                 --              --           5,787
                                             ----------------  -----------------  --------------  --------------
Net income (loss)                            $      (185,938)  $          3,048   $      (3,048)  $    (185,938)
                                             ================  =================  ==============  ==============
</TABLE>


                                      -26-
<PAGE>
<TABLE>
<CAPTION>
                             CONDENSED COMBINED CONSOLIDATING BALANCE SHEET
                                           AS OF MAY 31, 2001
                                              (UNAUDITED)


                                       ENTITIES IN     ENTITIES NOT IN
                                      REORGANIZATION    REORGANIZATION                    CONSOLIDATED
In thousands                           PROCEEDINGS       PROCEEDINGS      ELIMINATIONS       TOTALS
-----------------------------------  ----------------  ----------------  --------------  --------------
<S>                                  <C>               <C>               <C>             <C>
ASSETS:
Current assets                       $       441,237   $         88,732  $          --   $     529,969
Intercompany receivables                      78,531                 --        (78,531)             --
Property, plant and equipment, net           628,123            103,327             --         731,450
Investment in subsidiaries                     9,992                 --         (9,992)             --
Intangible assets, net                     1,670,395             71,927             --       1,742,322
Other assets                                  25,668              1,895             --          27,563
                                     ----------------  ----------------  --------------  --------------
                                     $     2,853,946   $        265,881  $     (88,523)  $   3,031,304
                                     ================  ================  ==============  ==============

LIABILITIES:
Current liabilities                  $       313,931   $         95,549  $          --   $     409,480
Intercompany payables                             --             78,531        (78,531)             --
Non-current liabilities                      366,593             81,538             --         448,131
Liabilities subject to compromise          2,474,719                 --             --       2,474,719
Minority interests                             1,144                271             --           1,415

STOCKHOLDERS' EQUITY (DEFICIT)              (302,441)             9,992         (9,992)       (302,441)
                                     ----------------  ----------------  --------------  --------------
                                     $     2,853,946   $        265,881  $     (88,523)  $   3,031,304
                                     ================  ================  ==============  ==============
</TABLE>


                                      -27-
<PAGE>
<TABLE>
<CAPTION>
                           CONDENSED COMBINED CONSOLIDATING STATEMENT OF CASH FLOWS
                                       NINE MONTHS ENDED MAY 31, 2001
                                                 (UNAUDITED)


                                                           ENTITIES IN      ENTITIES NOT IN
                                                          REORGANIZATION    REORGANIZATION     CONSOLIDATED
In thousands                                               PROCEEDINGS        PROCEEDINGS         TOTALS
-------------------------------------------------------  ----------------  -----------------  --------------
<S>                                                      <C>               <C>                <C>
Net cash provided by operating activities                $        44,713   $         32,371   $      77,084
                                                         ----------------  -----------------  --------------

Cash flows from investing activities:
   Proceeds from sales of property, plant and equipment            3,507                435           3,942
   Purchases of property, plant and equipment                    (39,902)            (4,981)        (44,883)
   Decrease in other assets                                        8,407                 --           8,407
                                                         ----------------  -----------------  --------------
Net cash used in investing activities                            (27,988)            (4,546)        (32,534)
                                                         ----------------  -----------------  --------------

Cash flows from financing activities:
   Principal payments on pre-petition debt                       (10,080)                --         (10,080)
   Change in intercompany accounts                                (4,847)             4,847              --
                                                         ----------------  -----------------  --------------
Net cash (used in) provided by financing activities              (14,927)             4,847         (10,080)
                                                         ----------------  -----------------  --------------

Effect of exchange rate changes on cash                           (1,907)               986            (921)
                                                         ----------------  -----------------  --------------
Net increase (decrease) in cash and cash equivalents                (109)            33,658          33,549
Cash and cash equivalents at:
   Beginning of period                                            74,234             10,048          84,282
                                                         ----------------  -----------------  --------------
   End of period                                         $        74,125   $         43,706   $     117,831
                                                         ================  =================  ==============
</TABLE>
<TABLE>
<CAPTION>
                            CONDENSED COMBINED CONSOLIDATING STATEMENT OF OPERATIONS
                                         THREE MONTHS ENDED MAY 31, 2001
                                                   (UNAUDITED)


                                               ENTITIES IN      ENTITIES NOT IN
                                              REORGANIZATION    REORGANIZATION                     CONSOLIDATED
In thousands                                  PROCEEDINGS        PROCEEDINGS      ELIMINATIONS       TOTALS
-------------------------------------------  ----------------  -----------------  --------------  --------------
<S>                                          <C>               <C>                <C>             <C>

Revenues                                     $       345,693   $         50,813   $     (21,891)  $     374,615
Operating expenses                                   397,971             44,422         (21,891)        420,502
                                             ----------------  -----------------  --------------  --------------
Operating income (loss)                              (52,278)             6,391              --         (45,887)
Interest (expense) income, net                           580             (1,455)             --            (875)
Other income (expense)                                   (49)               497              --             448
Equity in earnings of associated companies             3,373                 --          (3,373)             --
                                             ----------------  -----------------  --------------  --------------
Income (loss) before reorganization items,
  income taxes and minority interests                (48,374)             5,433          (3,373)        (46,314)
Reorganization items                                  (5,467)                --              --          (5,467)
Income tax expense                                        --             (2,041)             --          (2,041)
                                             ----------------  -----------------  --------------  --------------
Income (loss) before minority interests              (53,841)             3,392          (3,373)        (53,822)
Minority interests                                        (1)               (19)             --             (20)
Income (loss) before                         ----------------  -----------------  --------------  --------------
   extraordinary item                                (53,842)             3,373          (3,373)        (53,842)

Extraordinary item, net of tax
(early extinguishment of debt)                         3,309                 --              --           3,309
                                             ----------------  -----------------  --------------  --------------
Net income (loss)                            $       (50,533)  $          3,373   $      (3,373)  $     (50,533)
                                             ================  =================  ==============  ==============
</TABLE>


                                      -28-
<PAGE>
<TABLE>
<CAPTION>
                            CONDENSED COMBINED CONSOLIDATING STATEMENT OF OPERATIONS
                                      THREE MONTHS ENDED FEBRUARY 28, 2001
                                                   (UNAUDITED)


                                                ENTITIES IN      ENTITIES NOT IN
                                               REORGANIZATION    REORGANIZATION                     CONSOLIDATED
In thousands                                    PROCEEDINGS        PROCEEDINGS      ELIMINATIONS       TOTALS
-------------------------------------------  ----------------  -----------------  --------------  --------------
<S>                                          <C>               <C>                <C>             <C>
Revenues                                     $       341,345   $         49,054   $     (20,524)  $     369,875
Operating expenses                                   413,741             43,655         (20,524)        436,872
                                             ----------------  -----------------  --------------  --------------
Operating income (loss)                              (72,396)             5,399              --         (66,997)
Interest (expense) income, net                           375             (1,665)             --          (1,290)
Other income (expense)                                    21               (350)             --            (329)
Equity in earnings of associated companies             2,282                 --          (2,282)             --
                                             ----------------  -----------------  --------------  --------------
Income (loss) before reorganization items,
  income taxes and minority interests                (69,718)             3,384          (2,282)        (68,616)
Reorganization items                                  (9,814)                --              --          (9,814)
Income tax expense                                        --             (1,048)             --          (1,048)
                                             ----------------  -----------------  --------------  --------------
Income (loss) before minority interests              (79,532)             2,336          (2,282)        (79,478)
Minority interests                                         1                (54)             --             (53)
                                             ----------------  -----------------  --------------  --------------
Income (loss) before extraordinary item              (79,531)             2,282          (2,282)        (79,531)
Extraordinary item, net of tax (early
  extinguishment of debt)                              1,793                 --              --           1,793
                                             ----------------  -----------------  --------------  --------------
Net income (loss)                            $       (77,738)  $          2,282   $      (2,282)  $     (77,738)
                                             ================  =================  ==============  ==============
</TABLE>
<TABLE>
<CAPTION>
                             CONDENSED COMBINED CONSOLIDATING BALANCE SHEET
                                        AS OF FEBRUARY  28, 2001
                                              (UNAUDITED)


                                       ENTITIES IN     ENTITIES NOT IN
                                      REORGANIZATION    REORGANIZATION                    CONSOLIDATED
In thousands                           PROCEEDINGS       PROCEEDINGS      ELIMINATIONS       TOTALS
-----------------------------------  ----------------  ----------------  --------------  --------------
<S>                                  <C>               <C>               <C>             <C>
ASSETS:
Current assets                       $       468,624   $         79,001  $          --   $     547,625
Intercompany receivables                      74,440                 --        (74,440)             --
Property, plant and equipment, net           633,382            103,513             --         736,895
Investment in subsidiaries                     6,946                 --         (6,946)             --
Intangible assets, net                     1,686,511             73,763             --       1,760,274
Other assets                                  25,754              1,978             --          27,732
                                     ----------------  ----------------  --------------  --------------
                                     $     2,895,657   $        258,255  $     (81,386)  $   3,072,526
                                     ================  ================  ==============  ==============

LIABILITIES:
Current liabilities                  $       297,577   $         94,215  $          --   $     391,792
Intercompany payables                             --             74,440        (74,440)             --
Non-current liabilities                      368,573             82,403             --         450,976
Liabilities subject to compromise          2,480,096                 --             --       2,480,096
Minority interests                             1,144                251             --           1,395

STOCKHOLDERS' EQUITY (DEFICIT)              (251,733)             6,946         (6,946)       (251,733)
                                     ----------------  ----------------  --------------  --------------
                                     $     2,895,657   $        258,255  $     (81,386)  $   3,072,526
                                     ================  ================  ==============  ==============
</TABLE>


                                      -29-
<PAGE>
<TABLE>
<CAPTION>
                          CONDENSED COMBINED CONSOLIDATING STATEMENT OF CASH FLOWS
                                     SIX MONTHS ENDED FEBRUARY 28, 2001
                                                 (UNAUDITED)


                                                           ENTITIES IN      ENTITIES NOT IN
                                                          REORGANIZATION    REORGANIZATION     CONSOLIDATED
In thousands                                               PROCEEDINGS        PROCEEDINGS         TOTALS
-------------------------------------------------------  ----------------  ----------------  ---------------
<S>                                                      <C>               <C>                <C>
Net cash provided by operating activities                $        20,822   $         29,042   $      49,864
                                                         ----------------  -----------------  --------------

Cash flows from investing activities:
   Proceeds from sales of property, plant and equipment            2,774                447           3,221
   Purchases of property, plant and equipment                    (22,490)            (3,678)        (26,168)
   Decrease in other assets                                        9,168                 --           9,168
                                                         ----------------  -----------------  --------------
Net cash used in investing activities                            (10,548)            (3,231)        (13,779)
                                                         ----------------  -----------------  --------------

Cash flows from financing activities:
 Principal payments of pre-petition debt                         (10,080)                --         (10,080)
   Change in intercompany accounts                                  (921)               921              --
                                                         ----------------  -----------------  --------------
Net cash (used in) provided by financing activities              (11,001)               921         (10,080)
                                                         ----------------  -----------------  --------------

Effect of exchange rate changes on cash                           (1,580)               944            (636)
                                                         ----------------  -----------------  --------------
Net increase (decrease) in cash and cash equivalents              (2,307)            27,676          25,369
Cash and cash equivalents at:
   Beginning of period                                            74,234             10,048          84,282
                                                         ----------------  -----------------  --------------
   End of period                                         $        71,927   $         37,724   $     109,651
                                                         ================  =================  ==============
</TABLE>
<TABLE>
<CAPTION>
                            CONDENSED COMBINED CONSOLIDATING STATEMENT OF OPERATIONS
                                      THREE MONTHS ENDED NOVEMBER 30, 2000
                                                   (UNAUDITED)


                                               ENTITIES IN      ENTITIES NOT IN
                                              REORGANIZATION    REORGANIZATION                     CONSOLIDATED
In thousands                                   PROCEEDINGS        PROCEEDINGS      ELIMINATIONS       TOTALS
-------------------------------------------  ----------------  -----------------  --------------  --------------
<S>                                          <C>               <C>                <C>             <C>
Revenues                                     $       349,543   $         53,378   $     (26,004)  $     376,917
Operating expenses                                   395,901             54,107         (26,004)        424,004
                                             ----------------  -----------------  --------------  --------------
Operating loss                                       (46,358)              (729)             --         (47,087)
Interest (expense) income, net                           195             (2,455)             --          (2,260)
Other income (expense)                                  (182)               (48)             --            (230)
Equity in earnings of associated companies            (2,607)                --           2,607              --
                                             ----------------  -----------------  --------------  --------------
Income (loss) before reorganization items,
  income taxes and minority interests                (48,952)            (3,232)          2,607         (49,577)
Reorganization items                                  (9,400)                --              --          (9,400)
Income tax benefit                                        --                670              --             670
                                             ----------------  -----------------  --------------  --------------
Income (loss) before minority interest               (58,352)            (2,562)          2,607         (58,307)
Minority interests                                        --                (45)             --             (45)
                                             ----------------  -----------------  --------------  --------------
Income (loss) before extraordinary item              (58,352)            (2,607)          2,607         (58,352)
Extraordinary item, net of tax (early
  extinguishment of debt)                                685                 --              --             685
                                             ----------------  -----------------  --------------  --------------
Net income (loss)                            $       (57,667)  $         (2,607)  $       2,607   $     (57,667)
                                             ================  =================  ==============  ==============
</TABLE>


                                      -30-
<PAGE>
<TABLE>
<CAPTION>
                             CONDENSED COMBINED CONSOLIDATING BALANCE SHEET
                                        AS OF NOVEMBER 30, 2000
                                              (UNAUDITED)


                                       ENTITIES IN     ENTITIES NOT IN
                                      REORGANIZATION    REORGANIZATION                    CONSOLIDATED
In thousands                           PROCEEDINGS       PROCEEDINGS      ELIMINATIONS       TOTALS
-----------------------------------  ----------------  ----------------  -------------  ---------------
<S>                                  <C>               <C>               <C>             <C>
ASSETS:
Current assets                       $       495,320   $         71,411  $          --   $     566,731
Intercompany receivables                      70,455                 --        (70,455)             --
Property, plant and equipment, net           639,633            103,274             --         742,907
Investment in subsidiaries                     4,600                 --         (4,600)             --
Intangible assets, net                     1,703,059             74,834             --       1,777,893
Other assets                                  36,314              2,037             --          38,351
                                     ----------------  ----------------  --------------  --------------
                                     $     2,949,381   $        251,556  $     (75,055)  $   3,125,882
                                     ================  ================  ==============  ==============

LIABILITIES:
Current liabilities                  $       294,265   $         93,524  $          --   $     387,789
Intercompany payables                             --             70,455        (70,455)             --
Non-current liabilities                      336,037             82,780             --         418,817
Liabilities subject to compromise          2,492,216                 --             --       2,492,216
Minority interests                             1,144                197             --           1,341

STOCKHOLDERS' EQUITY (DEFICIT)              (174,281)             4,600         (4,600)       (174,281)
                                     ----------------  ----------------  -------------  ---------------
                                     $     2,949,381   $        251,556  $     (75,055)  $   3,125,882
                                     ================  ================  ==============  ==============
</TABLE>
<TABLE>
<CAPTION>
                          CONDENSED COMBINED CONSOLIDATING STATEMENT OF CASH FLOWS
                                    THREE MONTHS ENDED NOVEMBER 30, 2000
                                                 (UNAUDITED)


                                                           ENTITIES IN      ENTITIES NOT IN
                                                          REORGANIZATION    REORGANIZATION     CONSOLIDATED
 In thousands                                              PROCEEDINGS        PROCEEDINGS         TOTALS
-------------------------------------------------------  ----------------  -----------------  --------------
<S>                                                      <C>               <C>                <C>
Net cash provided by operating activities                $        21,918   $         14,553   $      36,471
                                                         ----------------  -----------------  --------------

Cash flows from investing activities:
   Proceeds from sales of property, plant and equipment            1,977                440           2,417
   Purchases of property, plant and equipment                     (6,801)            (3,068)         (9,869)
   Decrease in other assets                                         (615)                (1)           (616)
                                                         ----------------  -----------------  --------------
Net cash used in investing activities                             (5,439)            (2,629)         (8,068)
                                                         ----------------  -----------------  --------------

Cash flows from financing activities:
   Change in intercompany accounts                                 2,850             (2,850)             --
                                                         ----------------  -----------------  --------------
Net cash provided by (used in) financing activities                2,850             (2,850)             --
                                                         ----------------  -----------------  --------------

Effect of exchange rate changes on cash                           (1,643)             1,153            (490)
                                                         ----------------  -----------------  --------------
Net increase in cash and cash equivalents                         17,686             10,227          27,913
Cash and cash equivalents at:
   Beginning of period                                            74,234             10,048          84,282
                                                         ----------------  -----------------  --------------
   End of period                                         $        91,920   $         20,275   $     112,195
                                                         ================  =================  ==============
</TABLE>


                                      -31-
<PAGE>
NOTE  10  -  SUPPLEMENTAL  SCHEDULE  OF  CASH  FLOW  INFORMATION

The  supplemental cash flow disclosures and non-cash transactions are as follows
($  in  thousands):

<TABLE>
<CAPTION>
                                                            THREE MONTHS ENDED
                                      NINE MONTHS   --------------------------------------
                                         ENDED       MAY 31,   FEBRUARY 28,   NOVEMBER 30,
                                     MAY 31, 2001     2001        2001           2000
                                     -------------  --------  -------------  -------------
<S>                                  <C>            <C>       <C>            <C>
Supplemental cash flow information:
   Cash paid for income taxes        $       8,778  $  1,078  $       2,516  $       5,184
                                     =============  ========  =============  =============
</TABLE>


NOTE  11  -  SUMMARIZED  FINANCIAL  INFORMATION  OF  GUARANTOR/NON-GUARANTOR

In  connection  with  the  Safety-Kleen Acquisition, Safety-Kleen Services, Inc.
(formerly  known as LES, Inc.), a wholly owned subsidiary of the Company, issued
$325  million  of  9.25%  Senior  Subordinated Notes.  The Notes are jointly and
severally  guaranteed  by the Company and all wholly owned domestic subsidiaries
of the Company, including the wholly owned domestic subsidiaries of Safety-Kleen
Corp.,  on  a  full  and  unconditional  basis.  No  foreign  direct or indirect
subsidiary or non-wholly owned domestic subsidiary is an obligor or guarantor on
the  financing.  Separate  financial statements and other disclosures concerning
each  of  Safety-Kleen  Services,  Inc.  and  the  subsidiary guarantors are not
presented  because  management  believes  they  are  not  material to investors.
Summarized  financial  information  for  the  Company  and its subsidiaries on a
combined  basis  is  set  forth  below.

<TABLE>
<CAPTION>
                                 CONDENSED COMBINED CONSOLIDATING STATEMENT OF OPERATIONS
                                               NINE MONTHS ENDED MAY 31, 2001
                                                        (UNAUDITED)


                                                    SAFETY-KLEEN                  SUBSIDIARY
                                    SAFETY-KLEEN     SERVICES,      SUBSIDIARY       NON-                       CONSOLIDATED
In thousands                           CORP.            INC.        GUARANTORS    GUARANTORS    ELIMINATIONS       TOTALS
---------------------------------  --------------  --------------  ------------  ------------  --------------  --------------
<S>                                <C>             <C>             <C>           <C>           <C>             <C>

Revenues                           $          --   $          50   $ 1,036,531   $   153,245   $     (68,419)  $   1,121,407
Operating expenses                           100          56,227     1,148,509       144,961         (68,419)      1,281,378
                                   --------------  --------------  ------------  ------------  --------------  --------------
Operating income (loss)                     (100)        (56,177)     (111,978)        8,284              --        (159,971)
Interest (expense) income, net               155            (431)        1,426        (5,575)             --          (4,425)
Other income (expense)                        --              --          (210)           99              --            (111)
Equity in earnings of associated
  companies                             (185,961)       (106,048)           --            --         292,009              --
                                   --------------  --------------  ------------  ------------  --------------  --------------
Income (loss) before
  reorganization items, income
  taxes and minority interests          (185,906)       (162,656)     (110,762)        2,808         292,009        (164,507)
Reorganization items                         (32)        (23,305)       (1,344)           --              --         (24,681)
Income tax (expense) benefit                  --              --             4        (2,423)             --          (2,419)
                                   --------------  --------------  ------------  ------------  --------------  --------------
Income (loss) before minority
  interests                             (185,938)       (185,961)     (112,102)          385         292,009        (191,607)
Minority interests                            --              --            --          (118)             --            (118)
                                   --------------  --------------  ------------  ------------  --------------  --------------
Income (loss) before
  extraordinary item                    (185,938)       (185,961)     (112,102)          267         292,009        (191,725)
Extraordinary item, net of tax
(early extinguishment of debt)                --              --         5,787            --              --           5,787
                                   --------------  --------------  ------------  ------------  --------------  --------------
Net income (loss)                  $    (185,938)  $    (185,961)  $  (106,315)  $       267   $     292,009   $    (185,938)
                                   ==============  ==============  ============  ============  ==============  ==============
</TABLE>


                                      -32-
<PAGE>
<TABLE>
<CAPTION>
                                   CONDENSED COMBINED CONSOLIDATING STATEMENT OF OPERATIONS
                                               THREE MONTHS ENDED MAY 31, 2001
                                                         (UNAUDITED)


                                                    SAFETY-KLEEN                  SUBSIDIARY
                                    SAFETY-KLEEN     SERVICES,      SUBSIDIARY       NON-                       CONSOLIDATED
In thousands                           CORP.            INC.        GUARANTORS    GUARANTORS    ELIMINATIONS       TOTALS
---------------------------------  --------------  --------------  ------------  ------------  --------------  --------------
<S>                                <C>             <C>             <C>           <C>           <C>             <C>
Revenues                           $          --   $          50   $   345,643   $    50,813   $     (21,891)  $     374,615
Operating expenses                            14          19,555       377,658        45,166         (21,891)        420,502
                                   --------------  --------------  ------------  ------------  --------------  --------------
Operating income (loss)                      (14)        (19,505)      (32,015)        5,647              --         (45,887)
Interest (expense) income,
    net                                       (3)             85           498        (1,455)             --            (875)
Other income (expense)                        --              --           (49)          497              --             448
Equity in earnings of associated
  companies                              (50,523)        (25,905)           --            --          76,428              --
                                   --------------  --------------  ------------  ------------  --------------  --------------

Income (loss) before
  reorganization items, income
  taxes and minority interests           (50,540)        (45,325)      (31,566)        4,689          76,428         (46,314)
Reorganization items                           7          (5,198)         (276)           --              --          (5,467)
Income tax expense                            --              --            --        (2,041)             --          (2,041)
                                   --------------  --------------  ------------  ------------  --------------  --------------
Income (loss) before minority            (50,533)        (50,523)      (31,842)        2,648          76,428         (53,822)
  interests
Minority interests                            --              --            (1)          (19)             --             (20)
                                   --------------  --------------  ------------  ------------  --------------  --------------
Income (loss) before
  extraordinary item                     (50,533)        (50,523)      (31,843)        2,629          76,428         (53,842)
Extraordinary item, net of tax
  (early extinguishment of
  debt)                                       --              --         3,309            --              --           3,309
                                   --------------  --------------  ------------  ------------  --------------  --------------
Net income (loss)                  $     (50,533)  $     (50,523)  $   (28,534)  $     2,629   $      76,428   $     (50,533)
                                   ==============  ==============  ============  ============  ==============  ==============
</TABLE>


<TABLE>
<CAPTION>
                                    CONDENSED COMBINED CONSOLIDATING BALANCE SHEET
                                                  AS OF MAY 31, 2001
                                                     (UNAUDITED)


                                SAFETY-       SAFETY-KLEEN                SUBSIDIARY
                                 KLEEN         SERVICES,     SUBSIDIARY      NON-                       CONSOLIDATED
In thousands                     CORP.            INC.       GUARANTORS   GUARANTORS    ELIMINATIONS       TOTALS
---------------------------  --------------  --------------  -----------  -----------  --------------  --------------
<S>                          <C>             <C>             <C>          <C>          <C>             <C>
ASSETS:
Current assets               $          70   $     128,481   $   311,328  $    90,090  $          --   $     529,969
Intercompany receivables           375,910       2,269,770            --           --     (2,645,680)             --
Property, plant and
  equipment, net                        --          16,183       613,253      102,014             --         731,450
Investment in subsidiaries        (317,718)       (824,186)        3,814           --      1,138,090              --
Intangible assets, net               8,160          59,995     1,595,431       78,736             --       1,742,322
Other assets                            --             109        25,559        1,895             --          27,563
                             --------------  --------------  -----------  -----------  --------------  --------------
                             $      66,422   $   1,650,352   $ 2,549,385  $   272,735  $  (1,507,590)  $   3,031,304
                             ==============  ==============  ===========  ===========  ==============  ==============

LIABILITIES:
Current liabilities          $         351   $       5,888   $   307,725  $    95,516  $          --   $     409,480
Intercompany payables                   --              --     2,570,283       75,397     (2,645,680)             --
Non-current liabilities              2,551          41,486       322,956       81,138             --         448,131
Liabilities subject to
  compromise                       365,961       1,920,075       185,477        3,206             --       2,474,719
Minority interests                      --             621           523          271             --           1,415

STOCKHOLDERS'
  EQUITY (DEFICIT)                (302,441)       (317,718)     (837,579)      17,207      1,138,090        (302,441)
                             --------------  --------------  -----------  -----------  --------------  --------------
                             $      66,422   $   1,650,352   $ 2,549,385  $   272,735  $  (1,507,590)  $   3,031,304
                             ==============  ==============  ===========  ===========  ==============  ==============
</TABLE>


                                      -33-
<PAGE>
<TABLE>
<CAPTION>
                            CONDENSED COMBINED CONSOLIDATING STATEMENT OF CASH FLOWS
                                         NINE MONTHS ENDED MAY 31, 2001
                                                   (UNAUDITED)


                                            SAFETY-
                                             KLEEN                    SUBSIDIARY
                           SAFETY-KLEEN    SERVICES,    SUBSIDIARY       NON-                      CONSOLIDATED
In thousands                  CORP.          INC.       GUARANTORS    GUARANTORS   ELIMINATIONS       TOTALS
------------------------  --------------  -----------  ------------  ------------  -------------  --------------
<S>                       <C>             <C>          <C>           <C>           <C>            <C>

Net cash provided by
  (used in) operating
  activities              $      58,314   $ (337,016)  $   320,059   $    35,727   $          --  $      77,084
                          --------------  -----------  ------------  ------------  -------------  --------------
Cash flows from
  investing activities:

Proceeds from sales of
  property, plant and
  equipment                          --           --         3,507           435              --          3,942
Purchases of property,
  plant and equipment                --       (1,111)      (38,369)       (5,403)             --        (44,883)
Decrease (increase) in
  other assets                      375       (4,996)       13,028            --              --          8,407
                          --------------  -----------  ------------  ------------  -------------  --------------
Net cash provided by
  (used in) investing
  activities                        375       (6,107)      (21,834)       (4,968)             --        (32,534)
                          --------------  -----------  ------------  ------------  -------------  --------------
Cash flows from
  financing activities:
Principal payments on
  pre-petition debt                  --           --       (10,080)           --              --        (10,080)
Change in intercompany
  accounts                      (58,871)     346,408      (289,450)        1,913              --             --
                          --------------  -----------  ------------  ------------  -------------  --------------
Net cash (used in)
  provided by financing
  activities                    (58,871)     346,408      (299,530)        1,913              --        (10,080)
                          --------------  -----------  ------------  ------------  -------------  --------------
Effect of exchange rate
  changes on cash                (1,908)          --            --           987              --           (921)
                          --------------  -----------  ------------  ------------  -------------  --------------
Net increase (decrease)
  in cash and cash
  equivalents                    (2,090)       3,285        (1,305)       33,659              --         33,549
Cash and cash
  equivalents at:
Beginning of period               2,153       63,880         8,201        10,048              --         84,282
                          --------------  -----------  ------------  ------------  -------------  --------------
End of period             $          63   $   67,165   $     6,896   $    43,707   $          --  $     117,831
                          ==============  ===========  ============  ============  =============  ==============
</TABLE>


                                      -34-
<PAGE>
<TABLE>
<CAPTION>
                              CONDENSED  COMBINED  CONSOLIDATING  STATEMENT  OF  OPERATIONS
                                       THREE  MONTHS  ENDED  FEBRUARY  28,  2001
                                                    (UNAUDITED)


                                                       SAFETY-KLEEN                  SUBSIDIARY
                                       SAFETY-KLEEN     SERVICES,      SUBSIDIARY       NON-                       CONSOLIDATED
In thousands                              CORP.            INC.        GUARANTORS    GUARANTORS    ELIMINATIONS       TOTALS
------------------------------------  --------------  --------------  ------------  ------------  --------------  --------------
<S>                                   <C>             <C>             <C>           <C>           <C>             <C>

Revenues                              $          --   $          --   $   341,345   $    49,054   $     (20,524)  $     369,875
Operating expenses                               14          22,920       390,019        44,443         (20,524)        436,872
                                      --------------  --------------  ------------  ------------  --------------  --------------
Operating income (loss)                         (14)        (22,920)      (48,674)        4,611              --         (66,997)
Interest (expense) income, net                   31              15           329        (1,665)             --          (1,290)
Other income (expense)                           --              --            21          (350)             --            (329)
Equity in earnings of associated
  companies                                 (77,755)        (45,301)           --            --         123,056              --
                                      --------------  --------------  ------------  ------------  --------------  --------------
Income (loss) before reorganization
  items, income taxes and minority
  interests                                 (77,738)        (68,206)      (48,324)        2,596         123,056         (68,616)
Reorganization items                             --          (9,549)         (265)           --              --          (9,814)
Income tax (expense) benefit                     --              --             4        (1,052)             --          (1,048)
Income (loss) before minority         --------------  --------------  ------------  ------------  --------------  --------------
  interests                                 (77,738)        (77,755)      (48,585)        1,544         123,056         (79,478)
Minority interests                               --              --             1           (54)             --             (53)
                                      --------------  --------------  ------------  ------------  --------------  --------------
Income (loss) before extraordinary
  item                                      (77,738)        (77,755)      (48,584)        1,490         123,056         (79,531)
Extraordinary item, net of tax
  (early extinguishment of debt)                 --              --         1,793            --              --           1,793
                                      --------------  --------------  ------------  ------------  --------------  --------------
Net income (loss)                     $     (77,738)  $     (77,755)  $   (46,791)  $     1,490   $     123,056   $     (77,738)
                                      ==============  ==============  ============  ============  ==============  ==============
</TABLE>

<TABLE>
<CAPTION>
                                  CONDENSED COMBINED CONSOLIDATING BALANCE SHEET
                                              AS OF FEBRUARY 28, 2001
                                                    (UNAUDITED)


                              SAFETY-     SAFETY-KLEEN                 SUBSIDIARY
                               KLEEN       SERVICES,      SUBSIDIARY      NON-                       CONSOLIDATED
In thousands                   CORP.          INC.        GUARANTORS   GUARANTORS    ELIMINATIONS       TOTALS
---------------------------  ----------  --------------  ------------  -----------  --------------  --------------
<S>                          <C>         <C>             <C>           <C>          <C>             <C>
ASSETS:
Current assets               $      23   $     120,463   $   346,775   $    80,364  $          --   $     547,625
Intercompany receivables       375,956       2,302,525            --            --     (2,678,481)             --
Property, plant and
  equipment, net                    --          17,165       616,868       102,862             --         736,895

Investment in subsidiaries    (267,021)       (798,107)        4,475            --      1,060,653              --
Intangible assets, net           8,160          60,008     1,611,280        80,826             --       1,760,274
Other assets                        --           1,108        24,646         1,978             --          27,732
                             ----------  --------------  ------------  -----------  --------------  --------------
                             $ 117,118   $   1,703,162   $ 2,604,044   $   266,030  $  (1,617,828)  $   3,072,526
                             ==========  ==============  ============  ===========  ==============  ==============

LIABILITIES:
Current liabilities          $     341   $       8,695   $   288,661   $    94,095  $          --   $     391,792
Intercompany payables               --              --     2,607,056        71,425     (2,678,481)             --
Non-current liabilities          2,549          41,550       324,873        82,004                        450,976
Liabilities subject to
  compromise                   365,961       1,919,317       191,468         3,350             --       2,480,096
Minority interests                  --             621           523           251             --           1,395

STOCKHOLDERS'
  EQUITY (DEFICIT)            (251,733)       (267,021)     (808,537)       14,905      1,060,653        (251,733)
                             ----------  --------------  ------------  -----------  --------------  --------------
                             $ 117,118   $   1,703,162   $ 2,604,044   $   266,030  $  (1,617,828)  $   3,072,526
                             ==========  ==============  ============  ===========  ==============  ==============
</TABLE>


                                      -35-
<PAGE>
<TABLE>
<CAPTION>
                                CONDENSED COMBINED CONSOLIDATING STATEMENT OF CASH FLOWS
                                           SIX MONTHS ENDED FEBRUARY 28, 2001
                                                       (UNAUDITED)


                                                SAFETY-KLEEN                  SUBSIDIARY
                                SAFETY-KLEEN     SERVICES,      SUBSIDIARY       NON-                      CONSOLIDATED
In thousands                       CORP.            INC.        GUARANTORS    GUARANTORS   ELIMINATIONS       TOTALS
-----------------------------  --------------  --------------  ------------  ------------  -------------  --------------
<S>                            <C>             <C>             <C>           <C>           <C>            <C>
Net cash provided by
  (used in) operating
  activities                   $      58,314   $    (300,239)  $   259,510   $    32,279   $          --  $      49,864
                               --------------  --------------  ------------  ------------  -------------  --------------
Cash flows from
  investing activities:

Proceeds from sales of
  property, plant and
  equipment                               --              --         2,774           447              --          3,221
Purchases of property,
  plant and equipment                     --            (808)      (21,260)       (4,100)             --        (26,168)
Decrease  (increase) in other
  assets                                 223          (4,996)       13,941            --              --          9,168
                               --------------  --------------  ------------  ------------  -------------  ---------------

Net cash provided by (used
  in) investing activities               223          (5,804)       (4,545)       (3,653)             --        (13,779)
                               --------------  --------------  ------------  ------------  -------------  --------------
Cash flows from financing
  activities:
Principal payments on pre-
  petition debt                           --              --       (10,080)           --              --        (10,080)
Change in intercompany
  accounts                           (59,091)        312,953      (251,968)       (1,894)             --             --
                               --------------  --------------  ------------  ------------  -------------  --------------
Net cash (used in) provided
  by financing activities            (59,091)        312,953      (262,048)       (1,894)             --        (10,080)
                               --------------  --------------  ------------  ------------  -------------  --------------
Effect of exchange rate
  changes on cash                     (1,581)             --            --           945              --           (636)
                               --------------  --------------  ------------  ------------  -------------  --------------
Net increase (decrease) in
  cash and cash
  equivalents                         (2,135)          6,910        (7,083)       27,677              --         25,369
Cash and cash equivalents at:
Beginning of period                    2,153          63,880         8,201        10,048              --         84,282
                               --------------  --------------  ------------  ------------  -------------  --------------
End of period                  $          18   $      70,790   $     1,118   $    37,725   $          --  $     109,651
                               ==============  ==============  ============  ============  =============  ==============
</TABLE>


<TABLE>
<CAPTION>
                                    CONDENSED COMBINED CONSOLIDATING STATEMENT OF OPERATIONS
                                              THREE MONTHS ENDED NOVEMBER 30, 2000
                                                          (UNAUDITED)


                                                      SAFETY-KLEEN                  SUBSIDIARY
                                      SAFETY-KLEEN     SERVICES,      SUBSIDIARY       NON-                       CONSOLIDATED
In thousands                             CORP.            INC.        GUARANTORS    GUARANTORS    ELIMINATIONS       TOTALS
-----------------------------------  --------------  --------------  ------------  ------------  --------------  --------------
<S>                                  <C>             <C>             <C>           <C>           <C>             <C>

Revenues                             $          --   $          --   $   349,543   $    53,378   $     (26,004)  $     376,917
Operating expenses                              72          13,752       380,832        55,352         (26,004)        424,004
                                     --------------  --------------  ------------  ------------  --------------  --------------
Operating loss                                 (72)        (13,752)      (31,289)       (1,974)             --         (47,087)
Interest (expense) income, net                 127            (531)          599        (2,455)             --          (2,260)
Other expense                                   --              --          (182)          (48)             --            (230)
Equity in earnings of associated
  companies                                (57,683)        (34,842)           --            --          92,525              --
                                     --------------  --------------  ------------  ------------  --------------  --------------
Income (loss) before
  reorganization items, income
  taxes and minority interests             (57,628)        (49,125)      (30,872)       (4,477)         92,525         (49,577)
Reorganization items                           (39)         (8,558)         (803)           --              --          (9,400)
Income tax benefit                              --              --            --           670              --             670
                                     --------------  --------------  ------------  ------------  --------------  --------------
Income (loss) before minority
  interests                                (57,667)        (57,683)      (31,675)       (3,807)         92,525         (58,307)
Minority interests                              --              --            --           (45)             --             (45)
                                     --------------  --------------  ------------  ------------  --------------  --------------
Income (loss) before extraordinary
  item                                     (57,667)        (57,683)      (31,675)       (3,852)         92,525         (58,352)
Extraordinary item, net of tax
  (early extinguishment of debt)                --              --           685            --              --             685
                                     --------------  --------------  ------------  ------------  --------------  --------------
Net income (loss)                    $     (57,667)  $     (57,683)  $   (30,990)  $    (3,852)  $      92,525   $     (57,667)
                                     ==============  ==============  ============  ============  ==============  ==============
</TABLE>


                                      -36-
<PAGE>
<TABLE>
<CAPTION>
                                    CONDENSED COMBINED CONSOLIDATING BALANCE SHEET
                                                AS OF NOVEMBER 30, 2000
                                                      (UNAUDITED)


                                              SAFETY-KLEEN                 SUBSIDIARY
                              SAFETY-KLEEN     SERVICES,      SUBSIDIARY      NON-                       CONSOLIDATED
In thousands                     CORP.            INC.        GUARANTORS   GUARANTORS    ELIMINATIONS       TOTALS
---------------------------  --------------  --------------  ------------  -----------  --------------  --------------
<S>                          <C>             <C>             <C>           <C>          <C>             <C>
ASSETS:
Current assets               $       4,303   $     154,886   $   334,767   $    72,775  $          --   $     566,731
Intercompany receivables           371,433       2,297,468            --            --     (2,668,901)             --
Property, plant and
  equipment, net                        --          17,026       623,238       102,643             --         742,907

Investment in subsidiaries        (189,552)       (753,092)        5,046            --        937,598              --
Intangible assets, net               8,160          60,060     1,627,486        82,187             --       1,777,893
Other assets                            --           2,108        34,206         2,037             --          38,351
                             --------------  --------------  ------------  -----------  --------------  --------------
                             $     194,344   $   1,778,456   $ 2,624,743   $   259,642  $  (1,731,303)  $   3,125,882
                             ==============  ==============  ============  ===========  ==============  ==============

LIABILITIES:
Current liabilities          $         117   $       6,349   $   287,932   $    93,391  $          --   $     387,789
Intercompany payables                   --              --     2,602,032        66,869     (2,668,901)             --
Non-current liabilities              2,547          41,581       292,309        82,380             --         418,817
Long-term debt                          --              --            --            --             --              --
Liabilities subject to
  compromise                       365,961       1,919,457       203,344         3,454             --       2,492,216
Minority interests                      --             621           523           197             --           1,341

STOCKHOLDERS'
  EQUITY (DEFICIT)                (174,281)       (189,552)     (761,397)       13,351        937,598        (174,281)
                             --------------  --------------  ------------  -----------  --------------  --------------
                             $     194,344   $   1,778,456   $ 2,624,743   $   259,642  $  (1,731,303)  $   3,125,882
                             ==============  ==============  ============  ===========  ==============  ==============
</TABLE>


                                      -37-
<PAGE>
<TABLE>
<CAPTION>
                              CONDENSED COMBINED CONSOLIDATING STATEMENT OF CASH FLOWS
                                        THREE MONTHS ENDED NOVEMBER 30, 2000
                                                    (UNAUDITED)


                                           SAFETY-KLEEN                  SUBSIDIARY
                           SAFETY-KLEEN     SERVICES,      SUBSIDIARY       NON-                      CONSOLIDATED
In thousands                  CORP.            INC.        GUARANTORS    GUARANTORS   ELIMINATIONS       TOTALS
------------------------  --------------  --------------  ------------  ------------  -------------  --------------
<S>                       <C>             <C>             <C>           <C>           <C>            <C>
Net cash provided by
  (used in) operating
  activities              $      58,310   $    (274,058)  $   234,182   $    18,037   $          --  $      36,471
                          --------------  --------------  ------------  ------------  -------------  --------------
Cash flows from
investing activities:

Proceeds from sales of
  property, plant and
  equipment                          --              --         1,977           440              --          2,417
Purchases of property,
  plant and equipment                --            (201)       (6,502)       (3,166)             --         (9,869)
Decrease (increase) in
  other assets                       --          (4,996)        4,381            (1)             --           (616)
                          --------------  --------------  ------------  ------------  -------------  --------------
Net cash used in
  investing activities               --          (5,197)         (144)       (2,727)             --         (8,068)
                          --------------  --------------  ------------  ------------  -------------  --------------
Cash flows from
  financing activities:
Change in intercompany
  accounts                      (54,282)        318,051      (257,533)       (6,236)             --             --
                          --------------  --------------  ------------  ------------  -------------  --------------
Net cash (used in)
  provided by
  financing activities          (54,282)        318,051      (257,533)       (6,236)             --             --
                          --------------  --------------  ------------  ------------  -------------  --------------
Effect of exchange rate
  changes on cash                (1,644)             --            --         1,154              --           (490)
                          --------------  --------------  ------------  ------------  -------------  --------------
Net increase (decrease)
  in cash and cash
  equivalents                     2,384          38,796       (23,495)       10,228              --         27,913
Cash and cash
  equivalents at:
Beginning of period               2,153          63,880         8,201        10,048              --         84,282
                          --------------  --------------  ------------  ------------  -------------  --------------
End of period             $       4,537   $     102,676   $   (15,294)  $    20,276   $          --  $     112,195
                          ==============  ==============  ============  ============  =============  ==============
</TABLE>


                                      -38-
<PAGE>
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF  OPERATIONS

The  following  discussion  and  analysis  provides information which management
believes  is  relevant  to  an  assessment  and  understanding  of the Company's
consolidated  results  of  operations  and  financial  condition.  The following
discussion  and  analysis  should  be  read  in  conjunction  with the Company's
unaudited  Consolidated Financial Statements and related notes thereto contained
in  Part I of the report on Form 10-Q, as amended, and with the Company's Annual
Report  on Form 10-K, as amended, for the fiscal year ended August 31, 2000, and
the  other  information  included  elsewhere  herein.

                      BUSINESS, ORGANIZATION AND BANKRUPTCY

Safety-Kleen  Corp.  (the "Registrant" or "Safety-Kleen") (collectively referred
to with its subsidiaries as the "Company"), was incorporated in Delaware in 1978
as  Rollins  Environmental Services, Inc. ("Rollins"), later changed its name to
Laidlaw  Environmental Services, Inc. ("LESI") and subsequently changed its name
to  Safety-Kleen  Corp.  Through  its  Chemical  Services  and  Branch Sales and
Service divisions, the Company provides a range of services designed to collect,
transport, process, recycle or dispose of hazardous and non-hazardous industrial
and  commercial waste streams. The Company provides these services in 50 states,
seven   Canadian   provinces,  Puerto  Rico,  Mexico   and  Saudi  Arabia  from
approximately  375  collection,  processing  and  other  locations.

Current  management  believes  that  the  Company  experienced  substantial
difficulties in the integration of the operations of Old Safety-Kleen with those
of  LESI  following  the  acquisition  of Old Safety-Kleen by LESI in 1998.  The
implementation  of  the  Company's  post-acquisition  strategy  to  combine  key
elements  of  the  more  decentralized  LESI business structure with that of the
strongly  centralized  Old  Safety-Kleen  business,  particularly  in the United
States, adversely affected post-acquisition operations and cash flows.  Changing
the  existing  regionalized  LESI pricing structure to the more uniform national
pricing  structure  of  the Old Safety-Kleen business resulted in a reduction of
the  overall  pricing  realized  by  the  Company.  Converting several of LESI's
service  centers  from  profit centers with one manager to cost centers with two
managers during fiscal 1999 and 2000 resulted in poor cost and pricing controls.
Transferring  the  Old  Safety-Kleen  industrial  waste collection business to a
co-managed  waste-collection  offering  diluted  pricing and negatively impacted
customer service.  Requiring the use of Company owned waste disposal facilities,
even  when  lower-cost,  external  options  were  available,  resulted in higher
overall  operating  costs.

Current  management  believes  that  the  loss  of  key  employees  of  the  Old
Safety-Kleen  business  due to post-acquisition strategies and the relocation of
Old  Safety-Kleen's  corporate  office  from  Elgin, Illinois to Columbia, South
Carolina  resulted  in  a significant loss of institutional knowledge concerning
historical  business  practices  of  the Old Safety-Kleen business.  Many of the
internal  accounting  and operational information systems and processes that had
historically  been  used  to monitor and manage the costs and performance of the
Old  Safety-Kleen  business were discontinued shortly after the acquisition and,
to  date,  have  not  been  satisfactorily  replaced.  In  addition, significant
difficulties  in  relocating  and  converting  the  Old  Safety-Kleen's accounts
receivable  and cash application functions to the LESI headquarters in Columbia,
South Carolina and, subsequently, converting to new accounts receivable software
resulted in significant problems regarding customer billing, dispute resolution,
cash  application and, ultimately, cash realization.  See "Uncertainties Related
To  The  Company's  Internal  Controls"  below.

On  June  9,  2000,  Safety-Kleen  Corp.  and  73  of  its domestic subsidiaries
(collectively, the "Debtors") filed voluntary petitions for relief (the "Chapter
11  Cases")  under  Chapter  11  of the United States Bankruptcy Code, 11 U.S.C.
Sec.Sec.  101-1330,  as  amended  (the  "Bankruptcy  Code") in the United States
Bankruptcy  Court  for  the  District of Delaware (the "Bankruptcy Court").  The
Chapter  11  Cases are being jointly administered, for procedural purposes only,
before  the  Bankruptcy  Court  under  Case  No. 00-2303(PJW). Excluded from the
filing were certain of Safety-Kleen's non-wholly owned domestic subsidiaries and
all  Safety-Kleen's  indirect  Canadian  subsidiaries.

The Company has incurred and will continue to incur significant costs associated
with the reorganization.  The amount of these costs, which are being expensed as
incurred,  is  expected to significantly affect future results until the Company
emerges  from  its  reorganization  under  the  Chapter  11  proceedings.


                                      -39-
<PAGE>
The  Company's  Consolidated  Financial Statements have been prepared on a going
concern  basis  which  contemplates  continuity  of  operations,  realization of
assets, and payment of liabilities in the ordinary course of business and do not
reflect  adjustments  that might result if the Debtors are unable to continue as
going  concerns.  The  Debtors'  history  of  significant  losses,  deficit  in
stockholders'  equity and their Chapter 11 filings, as well as issues related to
compliance  with  debt  covenants  and  financial  assurance  requirements raise
substantial  doubt  about  the Company's ability to continue as a going concern.
The Debtors intend to file a plan or plans of reorganization with the Bankruptcy
Court.  Continuing as a going concern is dependent upon, among other things, the
Debtors' formulation of a plan or plans of reorganization, the success of future
business  operations,  and the generation of sufficient cash from operations and
financing  sources to meet the Debtors' obligations.  The Consolidated Financial
Statements  do  not reflect: (a) the realizable value of assets on a liquidation
basis  or their availability to satisfy liabilities;  (b) aggregate pre-petition
liability amounts that may be allowed for unrecorded claims or contingencies, or
their status or priority;  (c) the effect of any changes to the Debtors' capital
structure  or  in  the Debtors' business operations as the result of an approved
plan  or  plans  of  reorganization; or (d) adjustments to the carrying value of
assets  (including goodwill and other intangibles) or liability amounts that may
be  necessary  as  the  result  of  actions  by  the  Bankruptcy  Court.

The  Company's   Consolidated  Financial   Statements  have  been  presented  in
conformity  with the AICPA's Statement of Position 90-7, "Financial Reporting By
Entities  In  Reorganization  Under  the  Bankruptcy  Code,"  ("SOP 90-7").  The
statement  requires  a  segregation  of liabilities subject to compromise by the
Bankruptcy  Court  as  of  the  bankruptcy filing date and identification of all
transactions  and events that are directly associated with the reorganization of
the  Company.

                                  OTHER MATTERS

On September 5, 2001, the Bankruptcy Court entered an order approving employment
and  indemnification  agreements  with  Ronald  A.  Rittenmeyer,  who  had  been
appointed  to  the Board of Directors of the Company in April 2001.  At the same
time,  the  Bankruptcy  Court  approved  termination  and  consulting agreements
with David  E. Thomas,  Jr. and  Grover  C.  Wrenn.  Under  the  employment  and
indemnification  agreements,  Mr. Rittenmeyer will become Chairman of the Board,
President  and  Chief  Executive  Officer of the Company and Messrs.  Thomas and
Wrenn  will  be appointed non-executive Vice Chairmen of the Board of Directors.
Messrs.  Thomas  and Wrenn co-managed the Company on an interim basis from March
6,  2000 through May 22, 2000, before being elected as Company officers.  On May
4,  2000,  Mr.  Thomas  was elected Chairman of the Board.  On May 22, 2000, Mr.
Thomas  was  elected Chief Executive Officer and Mr. Wrenn was elected President
and Chief Operating Officer.  On August 17, 2000, Larry W. Singleton, previously
unaffiliated  with  the  Company,  was  appointed  Chief  Financial  Officer.

In  addition  to  Mr.  Rittenmeyer, three new independent outside directors have
been  named  to the Board of Directors of the Company since March 2000.  Kenneth
K.  Chalmers was appointed in May 2000 and Peter E. Lengyel and David W. Wallace
were  each  appointed  in  March  2001.

     INVESTIGATION OF FINANCIAL RESULTS; PREVIOUS RESTATEMENT OF CONSOLIDATED
                              FINANCIAL STATEMENTS

On  March  6,  2000,  the  Company  announced  that it had initiated an internal
investigation  of  its  previously reported financial results and certain of its
accounting  policies  and  practices.  This  investigation  followed  receipt of
information  by the Company's Board of Directors, on February 24, 2000, alleging
possible  accounting  irregularities  that  may  have  affected  the  previously
reported  financial  results  of  the  Company.  The  Company  conducted  a
comprehensive  internal review of its accounting records for fiscal 1997 to 2000
and  engaged  Arthur  Andersen LLP as its new independent public accountants to,
among  other  things,  conduct  an audit of the Company's consolidated financial
statements  for  the  same  periods.  In addition, the Company is the subject of
ongoing  investigations  by  the  Securities and Exchange Commission and a grand
jury  sitting  in  the United States District Court for the Southern District of
New  York  relating  to the same matters. The Company has responded to subpoenas
issued  by  the  Securities  and  Exchange  Commission and the grand jury and is
cooperating  with  each  of  the  investigations.

The  Board  appointed a special committee, consisting of four directors who were
then  independent  outside  directors  of  the  Company, to conduct the internal
investigation  (the "Special Committee (Investigation)").  The Special Committee
(Investigation)  was  later expanded to five directors, with the addition of one
additional  independent  outside  director.  On September 13, 2001, the Board of
Directors  dissolved  the  Special Committee (Investigation) and established the
Special  Committee  (Conflicts of Interest in Litigation). The Special Committee
(Conflicts  of  Interest  in  Litigation) is authorized to manage all litigation
involving the Company and a member of the Board of Directors.  The new committee
is comprised of Ronald A. Rittenmeyer, Kenneth K. Chalmers, Peter E. Lengyel and
David W. Wallace, each of whom was appointed to the Board subsequent to March 6,
2000  and  is  not  personally  involved  in  such  litigation.  (see  NOTE  7 -
COMMITMENTS AND CONTINGENCIES, PART I, Item 1, "Matters Related to Investigation
of  Financial  Results").


                                      -40-
<PAGE>
                   FISCAL 2000 QUARTERLY FINANCIAL INFORMATION

As  previously  reported  in the Company's Form 10-K/A for the year ended August
31,  2000,  the  Company  contracted  with outside accountants, including Arthur
Andersen  LLP,  and  with  other  professionals to provide significant non-audit
assistance  to  the  Company's  corporate and field accounting personnel.  These
professionals  assisted  with  the  account  analysis,  development of financial
reporting  systems  and  project  management support, all which was necessary to
prepare  the  Company's  fiscal  1997 to 2000 Consolidated Financial Statements,
related  disclosures,  and  its fiscal 2000 Form 10-K/A.  This effort included a
comprehensive  review  of substantially all the accounts and resulted in a large
number  of  adjustments affecting each of the respective periods.  The impact of
these  adjustments  on the annual financial statements is described in Note 2 of
the  fiscal  2000  Consolidated  Financial  Statements.

As  disclosed  in  the  Form  10-K/A filed on July 9, 2001 and referenced in the
auditors'  report,  the  quarterly financial information required by Item 302 of
Regulation  S-K  was  not included in the Form 10-K/A.  The Company believes the
adjustments  to  the financial statements have been reflected in the appropriate
annual  fiscal  period,  however,  the Company did not spend additional time and
money  to undertake the extraordinary effort to apply all the adjustments to the
appropriate  interim fiscal quarter. Moreover, the Company has not undertaken to
spend  additional  time and money preparing such quarterly information since the
filing  of  the  Form  10-K/A so comparative quarterly financial information for
fiscal  2000, as required by Rule 10-01 of Regulation S-X, has not been included
in  this  Form  10-Q/A.

RESULTS  OF  OPERATIONS

During  the third quarter of fiscal 2000, the Company reorganized its operations
along  the  lines  of  its  two  primary  business  activities-Chemical Services
and  Branch   Sales  and  Service.   The  Chemical  Services  Division  involves
the  collection,  treatment,   transportation  and  disposal  of  hazardous  and
non-hazardous  waste.  The  Company  disposes  of  waste  primarily  through its
network  of thermal destruction incinerators, landfills and wastewater treatment
facilities,  in  certain  instances  after  accumulating  and  treating waste at
Company-owned  service  centers.  The Branch Sales and Service Division provides
parts  cleaner  services and other services to automotive repair, commercial and
manufacturing  customers.  These other services include, but are not limited to,
hazardous and non-hazardous waste collection, treatment, recycling and disposal.
The  Chemical  Services  and  Branch  Sales  and  Service  Divisions are managed
independently  and,  effective  with  the  aforementioned  executive  management
transition,  each reports separately to Mr. Rittenmeyer.  The Company eliminates
intersegment  and  intrasegment  revenue  in  presenting  consolidated financial
results.  The  majority  of  intersegment  revenue  eliminations  relate  to the
Chemical  Services  Division, which bills for the waste streams it receives from
the  Branch  Sales  and  Service  Division.


                                      -41-
<PAGE>
Set  forth  below  are  certain  operating  items  expressed  as a percentage of
revenues:

<TABLE>
<CAPTION>
                                                                           THREE MONTHS ENDED
                                                   NINE MONTHS   ------------------------------------------
                                                      ENDED        MAY 31,     FEBRUARY 28,   NOVEMBER 30,
                                                  MAY 31, 2001       2001          2001           2000
                                                  -------------  ------------  -------------  -------------
<S>                                               <C>            <C>           <C>            <C>
Revenues                                                 100.0%        100.0%         100.0%         100.0%
                                                  -------------  ------------  -------------  -------------
Expenses:
    Operating                                            83.1          84.9           81.1           83.3
    Depreciation and amortization                         9.3           9.0            9.4            9.5
    Selling, general and administrative                  17.9          18.3           18.1           17.2
    Provision for early facility closures                 4.0           0.0            9.5            2.5
                                                  -------------  ------------  -------------  -------------
                                                        114.3         112.2          118.1          112.5
                                                  -------------  ------------  -------------  -------------
Operating loss                                          (14.3)        (12.2)         (18.1)         (12.5)
Interest expense, net                                    (0.4)         (0.2)          (0.3)          (0.6)
Other income (expense)                                    0.0           0.1           (0.1)          (0.1)
                                                  -------------  ------------  -------------  -------------
Loss before reorganization items, income taxes
  and minority interests                                (14.7)        (12.3)         (18.5)         (13.2)
Reorganization items                                     (2.2)         (1.5)          (2.7)          (2.5)
                                                  -------------  ------------  -------------  -------------
Loss before income taxes and minority interests         (16.9)        (13.8)         (21.2)         (15.7)
Income tax (expense) benefit                             (0.2)         (0.5)          (0.3)           0.2
                                                  -------------  ------------  -------------  -------------
Loss before minority interests                          (17.1)        (14.3)         (21.5)         (15.5)
Minority interests                                        0.0           0.0            0.0            0.0
                                                  -------------  ------------  -------------  -------------
Loss before extraordinary item                          (17.1)        (14.3)         (21.5)         (15.5)
Extraordinary item, net of tax (early
  extinguishment of debt)                                 0.5           0.9            0.5            0.2
                                                  -------------  ------------  -------------  -------------
Net loss                                                (16.6)%       (13.4)%        (21.0)%        (15.3)%
                                                  =============  ============  =============  =============
</TABLE>


                                      -42-
<PAGE>
          FISCAL 2001 OPERATIONS FOR THE NINE MONTHS ENDED MAY 31, 2001
          -------------------------------------------------------------

As  discussed further in the quarter to quarter comparisons below, the Company's
revenues  during each of the three quarters during the nine months ended May 31,
2001  were  comparable  considering seasonal fluctuations typically experienced.
The  fluctuations  for  the  Chemical  Services  and  Branch  Sales  and Service
Divisions  are  generally  consistent  with  the  consolidated  trends.

The Company's operating loss of $160.0 million for the nine months ended May 31,
2001 includes the effect of several significant expenses resulting from a number
of  unusual  events.

During  the  first  six  months  of  fiscal 2001, the Chemical Services Division
decided to cease operations at two incinerators, a wastewater treatment facility
and  a  transportation  facility.  As  a  result  of these closures, the Company
recorded  a  "Provision  for  early  facility  closures"  of  $44.8  million.

During  the  nine  months ended May 31, 2001, the Company incurred approximately
$42.1  million  of auditing, non-audit contract accounting assistance, legal and
other  professional  costs  associated  primarily  with  (i)  the investigation,
restatement  and audits of its Consolidated Financial Statements for fiscal 1997
through  2000;  (ii)  a  comprehensive  review of all its major fiscal year 2001
general  ledger  accounts;  (iii)  the preparation of its unaudited Consolidated
Financial  Statements  for the first nine months of fiscal 2001 and related Form
10-Q/A;  (iv)  other  finance  and  accounting  services; and (v) litigation and
compliance matters and expenses related to the various investigations concerning
the Company's previously reported financial results.  These costs are classified
as  "Selling,  general and administrative" expense in the Company's consolidated
statements  of  operations.

The  Company  expects  (i)  the legal costs described above to decrease when the
aforementioned  matters  are  resolved,  and  (ii)  the  auditing  and non-audit
contract  accounting  costs  to continue throughout the remainder of fiscal 2001
and  for  an  indefinite  period thereafter, although at a somewhat lower level,
since the restatement and audit for fiscal years 1997 through 2000 was completed
in  July  2001.  The  Company expects these costs to be further reduced when its
internal  controls and processes are satisfactorily improved. See "Uncertainties
Relating  to  the  Company's  Internal  Controls"  below.

In  preparing the unaudited Consolidated Financial Statements for the first nine
months  of  fiscal  2001,  the  Company recorded certain adjustments relating to
periods prior to fiscal 2001, which have been reflected in the operating results
for the three months ended November 30, 2000. These adjustments, which increased
the  net  loss  by  approximately  $11  million,  related  primarily  to certain
environmental, severance and other benefits liabilities, revenue and capitalized
interest.  The Company does not believe the adjustments are material to revenue,
operating  loss or net loss for fiscal 2000 and prior, or to the expected fiscal
year  2001  annual  results.


                                      -43-
<PAGE>
THREE MONTHS ENDED MAY 31, 2001 COMPARED TO THE THREE MONTHS ENDED FEBRUARY 28,
-------------------------------------------------------------------------------
                                      2001
                                      ----

REVENUES

Consolidated  revenues  increased  $4.7  million to $374.6 million for the three
months ended May 31, 2001, compared to $369.9 million for the three months ended
February  28, 2001, with the following increase or decrease by business segment:
Chemical  Services  decreased  0.5% ($0.7 million); and Branch Sales and Service
increased  2.4%  ($6.0  million).  The  elimination  of  intersegment  revenue
increased  $0.6 million for the three months ended May 31, 2001, compared to the
three  months  ended  February  28,  2001.

Chemical  Services  combined  external  and  intersegment revenues for the three
months ended May 31, 2001 were $135.5 million compared to $136.2 million for the
three  months  ended  February  28,  2001.  The  revenue  decline  from facility
closures  in  the third quarter was modest due to the timing of the closures and
the  Company's  ability  to  retain  portions of the business.  This decline was
mostly  offset  by  increased  waste  activity  typically experienced during the
warmer  season.  Chemical  Services intersegment revenues were $12.2 million and
$11.8  million  for  the  three months ended May 31, 2001 and February 28, 2001,
respectively.

The Branch Sales and Service combined external and intersegment revenues for the
three  months ended May 31, 2001, were $254.0 million compared to $248.0 million
for the three months ended February 28, 2001. The increase in revenues from used
oil  collection  services,  oil  re-refining  sales, industrial waste collection
services  and additional services was partially offset by a decrease in revenues
from parts cleaner services. Used oil collections are typically lower during the
second  quarter  due  to  customer  requirements.  A  shift  to a higher revenue
product  mix and improved pricing favorably impacted the oil re-refining revenue
in  the  three  months  ended  May 31, 2001.  The revenues from industrial waste
collection services benefited from a non-recurring project related to wastewater
transportation.  The decline in revenues from parts cleaner services continues a
trend  that the Company believes results from sales to a maturing market. Branch
Sales  and  Service intersegment revenues were $2.7 million and $2.5 million for
the  three  months  ended  May  31,  2001  and  February 28, 2001, respectively.

OPERATING  EXPENSES

Consolidated  operating  expenses  for  the three months ended May 31, 2001 were
$318.0  million  compared  to $300.0 million for the three months ended February
28,  2001  with the following increase or decrease by business segment: Chemical
Services  decreased  4.6%  ($5.1 million); Branch Sales and Service increased by
11.5%  ($23.0  million);  and  corporate  increased  by  $0.7  million.

Chemical  Services  combined  external  and intersegment operating expenses were
$105.6  million  (78.0%  of  revenues)  for the three months ended May 31, 2001,
compared  to  $110.7  million  (81.3%  of  revenues)  for the three months ended
February  28,  2001.   Costs  incurred   in  the  third  quarter  for  scheduled
incinerator overhauls were lower than such costs incurred in the second quarter.
In  addition,  third  quarter  utility  costs  were lower than such costs in the
second  quarter  because,   during  the  third  quarter,  higher  quantities  of
fuel-blended  waste were incinerated, the residue from which reduces the need to
purchase  natural  gas.

Branch  Sales  and Service combined external and intersegment operating expenses
were  $223.0 million (87.8% of revenues) for the three months ended May 31, 2001
compared  to  $200.0  million  (80.7%  of  revenues)  for the three months ended
February 28, 2001. The increase in operating expenses was primarily attributable
to  (i)  higher  non-cash charges related to disposal of drums and equipment and
related  reserve  adjustments;  (ii)  higher operating labor costs due to annual
base  compensation  adjustments  and  higher  commissions  related to the higher
revenue; (iii) higher cost of materials in oil re-refining resulting from rising
prices and the cost of producing the higher revenue product mix discussed above;
and  (iv)  higher  fuel  costs  related to operating the internal transportation
fleet.

Corporate  operating expenses of $4.3 million for the three months ended May 31,
2001,  were  essentially unchanged compared to $3.6 million for the three months
ended  February  28, 2001. These expenses consist primarily of taxes (other than
taxes  on  earnings),  rental  payments  and  other  operating  expenses.

DEPRECIATION  AND  AMORTIZATION  EXPENSE

Consolidated  depreciation  and  amortization  expense  of $33.9 million for the
three  months  ended  May  31, 2001, was essentially unchanged compared to $34.7
million  for  the  three  months  ended  February  28,  2001.

SELLING,  GENERAL  AND  ADMINISTRATIVE  EXPENSES

Consolidated  selling,  general and administrative expenses of $68.7 million for
the  three  months  ended  May  31, 2001, were essentially unchanged compared to
$66.8  million  for  the three months ended February 28, 2001.  This increase of
$1.9  million includes an increase in professional fees (as more fully discussed
above)  and  certain  other  corporate  costs.


                                      -44-
<PAGE>
PROVISION  FOR  EARLY  FACILITY  CLOSURES

As  described  above,  the Company decided to cease operations at several of its
locations  during  fiscal 2001.  The charge of $35.3 million in the three months
ended  February  28,  2001,  represents the estimated closure/post-closure costs
associated  with  the  cessation of operations at the Bridgeport incinerator and
Hilliard  wastewater  treatment  facilities.

INTEREST  EXPENSE,  NET

Consolidated  interest  expense  was $0.9 million and $1.3 million for the three
months ended May 31, 2001 and February 28, 2001, respectively.  Interest expense
principally  represents  the interest on the Canadian portion of the outstanding
balance  of  the Company's Credit Facility, for which the interest rate is based
on  the  Canadian Prime Rate or Canadian Bankers Acceptance, both being variable
in  nature.  In  accordance with SOP 90-7, interest on the domestic pre-petition
debt has not been accrued for financial statement purposes since the date of the
Chapter  11  filing.  Contractual  interest  expense  of $60.3 million and $63.8
million  for  the  three  months  ended  May  31,  2001  and  February 28, 2001,
respectively,  has  not  been accrued in the accompanying Consolidated Financial
Statements.  No  interest payments have been made on either Canadian or domestic
debt  for  the  three  months  ending  May  31,  2001,  and  February  28, 2001.

REORGANIZATION  ITEMS

Consolidated  reorganization  items as reported in the accompanying consolidated
statements  of  operations  are  comprised of income and expense items that were
realized or incurred by the Debtors as a direct result of the Company's decision
to  reorganize  under  Chapter 11 (See Note 4 of Notes to Consolidated Financial
Statements).  Reorganization items were  $5.5 million for the three months ended
May  31,  2001 compared to  $9.8 million for the three months ended February 28,
2001. Most of this change is due to a decrease in professional services directly
related  to  the  Chapter  11  filing.

INCOME  TAXES

The  consolidated  income  tax  provision reflects foreign taxes payable of $2.1
million  for the three months ended May 31, 2001 and  $0.5 million for the three
months  ended  February 28, 2001, plus net deferred tax expense of  $0.6 million
for  the  three  months  ended  February  28,  2001.

EXTRAORDINARY  ITEMS  (EARLY  EXTINGUISHMENT  OF  DEBT)

The  Company,  pursuant  to  Bankruptcy  Court  approval,  has  settled  certain
pre-petition  trade  accounts  payable  claims  during  the first nine months of
fiscal  2001.  Under  the  terms  of these settlements, the Company paid certain
vendors  less  than  the  amount  recorded in the Company's financial records as
being  owed to the vendors as of the date of the Chapter 11 filing.  The Company
has reported the resulting gain from the early extinguishment of this debt as an
extraordinary  item.  The  consolidated gains from these settlements amounted to
$3.3  million  and  $1.8  million  for  the  three months ended May 31, 2001 and
February  28,  2001,  respectively.  No  income  tax  provision  or benefit with
respect  to  these  items  is  required.


                                      -45-
<PAGE>
THREE MONTHS ENDED FEBRUARY 28, 2001 COMPARED TO THE THREE MONTHS ENDED NOVEMBER
--------------------------------------------------------------------------------
                                    30, 2000
                                    --------

REVENUES

Consolidated  revenues  decreased  $7.0  million to $369.9 million for the three
months  ended  February 28, 2001 compared to $376.9 million for the three months
ended  November  30,  2000,  with  the  following  decrease by business segment:
Chemical  Services  decreased  2.0% ($2.8 million); and Branch Sales and Service
decreased 3.5% ($8.9 million). The elimination of intersegment revenue decreased
$4.7  million for the three months ended February 28, 2001 compared to the three
months  ended  November  30,  2000.

Chemical  Services  combined  external  and  intersegment revenues for the three
months  ended  February 28, 2001, were $136.2 million compared to $139.0 million
for  the  three  months  ended  November  30,  2000.  This  decline  was  mainly
attributable  to the rejection by the Company, in its Chapter 11 proceedings, of
a  major  transportation  contract and the seasonal decrease typically occurring
during  the  colder months.  Chemical Services' intersegment revenues were $11.8
million  and  $16.3  million  for  the  three months ended February 28, 2001 and
November  30,  2000,  respectively.

Branch  Sales  and  Service  combined external and intersegment revenues for the
three  months  ended  February  28, 2001, were $248.0 million compared to $256.9
million  for  the three months ended November 30, 2000. The decrease in revenues
was  primarily  in used oil collection and oil re-refining, which was the result
of  lower volumes of used oil collected and sold as fuel or re-refined oil.  The
used oil collection business typically has lower collections during that time of
year  due to customer requirements.  Oil re-refining revenues were higher in the
first quarter due to an effort to sell existing inventories in an environment of
rising  commodity  pricing.  Branch Sales and Service intersegment revenues were
$2.5  million  and $2.7 million for the three months ended February 28, 2001 and
November  30,  2000,  respectively.

OPERATING  EXPENSES

Consolidated  operating  expenses  for  the three months ended February 28, 2001
were  $300.0  million  compared  to  $313.8  million  for the three months ended
November  30,  2000 with the following increase or decrease by business segment:
Chemical  Services  decreased  9.3%  ($11.4  million);  Branch Sales and Service
decreased  3.8% ($8.0 million); and corporate increased by 33.3% ($0.9 million).

Chemical  Services  combined  external  and intersegment operating expenses were
$110.7 million (81.3% of revenues) for the three months ended February 28, 2001,
compared  to  $122.1  million  (87.8%  of  revenue)  for  the three months ended
November 30, 2000.  This decrease is primarily due to the effect of recording in
the  first quarter certain adjustments relating to periods prior to fiscal 2001,
primarily  for  the  correction  of  certain environmental liabilities.  No such
charges  were  recorded  in  the  second  quarter.

Branch  Sales  and Service combined external and intersegment operating expenses
were  $200.0 million (80.7% of revenues) for the three months ended February 28,
2001  compared  to $208.0 million (80.9% of revenues) for the three months ended
November  30,  2000.  The decrease is primarily due to lower non-cash charges in
the  second  quarter  related  to  disposal  of  drums  and  equipment.

Corporate operating expenses of $3.6 million for the three months ended February
28,  2001,  were  essentially  unchanged  compared to $2.7 million for the three
months  ended  November  30,  2000.  These  expenses consist primarily of taxes,
(other  than  taxes  on earnings), rental payments and other operating expenses.

DEPRECIATION  AND  AMORTIZATION  EXPENSE

Consolidated  depreciation  and  amortization  expense  of $34.7 million for the
three  months  ended  February  28,  2001, was essentially unchanged compared to
$35.9  million  for  the  three  months  ended  November  30,  2000.

SELLING,  GENERAL  AND  ADMINISTRATIVE  EXPENSES

Consolidated selling, general and administrative expenses were $66.8 million for
the three months ended February 28, 2001 compared to $64.9 million for the three
months ended November 30, 2000.  This increase of $1.9 million results primarily
from  an  increase  in  professional  fees.


                                      -46-
<PAGE>
PROVISION  FOR  EARLY  FACILITY  CLOSURES

During  the  three  months ended February 28, 2001, the Company decided to cease
operations  at  its  Bridgeport  incinerator  and  Hilliard wastewater treatment
facilities.  The  charge of $35.3 million in the three months ended February 28,
2001,  represents  the  estimated closure/post-closure costs associated with the
cessation  of  operations  at its Bridgeport incinerator and Hilliard wastewater
treatment  facilities.   During  the  three  months  ended  November  30,  2000,
the  Company  ceased  operations  at  its  Coffeyville  incinerator  and  Burton
transportation  facilities,  which  resulted in a charge of $9.5 million for the
associated  closure/post-closure  costs.

INTEREST  EXPENSE,  NET

Consolidated  interest  expense  was $1.3 million and $2.3 million for the three
months  ended  February  28, 2001 and November 30, 2000, respectively.  Interest
expense  principally  represents  the  interest  on  the Canadian portion of the
outstanding  balance  of  the  Company's Credit Facility, for which the interest
rate  is  based  on the Canadian Prime Rate or Canadian Bankers Acceptance, both
being variable in nature.  In accordance with SOP 90-7, interest on the domestic
pre-petition  debt  has  not been accrued for financial statement purposes since
the  date  of  the  Chapter  11  filing.  Contractual interest expense of  $63.8
million  and  $65.6  million  for  the  three months ended February 28, 2001 and
November  30,  2000,  respectively,  has  not  been  accrued in the accompanying
Consolidated  Financial  Statements.  No  interest  payments  have  been made on
either  Canadian or domestic debt for the three months ending February 28, 2001,
and  November  30,  2000.

REORGANIZATION  ITEMS

Consolidated  reorganization  items as reported in the accompanying consolidated
statement  of  operations  are  comprised of income, expense and loss items that
were  realized  or  incurred  by the Debtors as a direct result of the Company's
decision  to  reorganize  under Chapter 11. (See Note 4 of Notes to Consolidated
Financial  Statements).  Reorganization  items  were  $9.8 million for the three
months  ended  February  28, 2001, compared to $9.4 million for the three months
ended  November  30,  2000.

INCOME  TAXES

The  consolidated  income  tax  provision reflects foreign taxes payable of $0.5
million  and $1.4 million, plus other net deferred tax expenses of  $0.6 million
and  net  deferred  tax  benefits  of  $2.0  million  for the three months ended
February  28,  2001  and  November  30,  2000,  respectively.

EXTRAORDINARY  ITEMS  (EARLY  EXTINGUISHMENT  OF  DEBT)

The  Company,  pursuant  to  Bankruptcy  Court  approval,  has  settled  certain
pre-petition  trade  accounts  payable  claims  during  the first nine months of
fiscal  2001.  Under  the  terms  of these settlements, the Company paid certain
vendors  less  than  the  amount  recorded in the Company's financial records as
being  owed to the vendors as of the date of the Chapter 11 filing.  The Company
has reported the resulting gain from the early extinguishment of this debt as an
extraordinary  item.  The  consolidated gains from these settlements amounted to
$1.8  million  and $0.7 million for the three months ended February 28, 2001 and
November  30,  2000,  respectively.  No  income  tax  provision  or benefit with
respect  to  these  items  is  required.


                                      -47-
<PAGE>
                         LIQUIDITY AND CAPITAL RESOURCES

BANKRUPTCY

The  matters  described under this caption "Liquidity and Capital Resources", to
the  extent  that  they  relate  to  future  events  or  expectations,  may  be
significantly  affected  by  the Chapter 11 proceedings.  These proceedings will
involve,  or  result  in, (i) various  restrictions on the Company's activities;
(ii)  limitations  on  financing;  (iii)  the  need  to  obtain Bankruptcy Court
approval  for  various  matters;  and  (iv) uncertainty as to relationships with
vendors,  suppliers,  customers  and others with whom the Company may conduct or
seek  to  conduct  business.

CASH  AND  CASH  EQUIVALENTS

The  Company's  primary  sources  of  liquidity  are cash flows from operations,
existing  cash, proceeds from the sale of non-core assets and businesses and the
DIP  Facility.

As  of  August  31,  2001  and as described below, the Company has approximately
$41.0  million  of  remaining  cash  borrowing availability of which up to $26.0
million  of  letter  of  credit  availability remains under the terms of its DIP
Facility.  The  Company  currently  plans  to  use a substantial portion of this
liquidity  to  meet  its operating, capital expenditure, financial assurance and
environmental  liability  requirements.  The  Company  has begun to negotiate an
increase  in  the  availability  under  the DIP Facility to accommodate expected
letter  of  credit  needs related to financial assurance requirements. While the
Company  believes  it  has  sufficient  cash  and  credit  to  meet  its current
operating,  capital  expenditure and environmental liability requirements, there
will  likely be additional financing required to meet all of the Company's needs
(including  financing assurance requirements) and there can be no assurance that
any  such  additional  financing  will  be  obtained.

CASH  FLOWS  FROM  OPERATIONS

During  the  first  three  fiscal quarters of 2001, cash increased $33.5 million
compared  to  the  balance  at  August  31,  2000.  This  increase is attributed
primarily  to (i) improvements in its accounts receivable aging; (ii) the timing
of  payments  on  certain accrued liabilities such as professional fees, payroll
and related costs, property taxes and other operating items; and (iii) continued
suspension  of  interest  payments  on  pre-petition  and  Canadian  debt.

Consolidated  net  cash flow from operations subsequent to May 31, 2001 (i) will
need  to  accommodate substantially increased costs to replace certain financial
assurance  programs;  (ii)  will  need  to  fund  the  payment  of  the  accrued
liabilities  noted  above  as  they  become  due; (iii) could be affected by the
potential  loss of "event-based" business in the Chemical Services Division; and
(iv) will need to fund the cash requirements for the deactivation and closure of
certain  facilities.

CASH  FLOWS  FROM  INVESTING  ACTIVITIES

The  Company  operates  in  an  industry  that  requires a high level of capital
investment.  The  Company's  capital investment requirements primarily relate to
(i)  trucks  and  other  vehicles;  (ii)  equipment at customer locations; (iii)
computer  related  technology;  (iv)  equipment at waste collection and disposal
facilities;  and  (v) construction and expansion of its landfill sites.  Capital
expenditures  through May 31, 2001 totaled $44.9 million.  During the first nine
months  of fiscal 2001, the Company deferred non-essential capital expenditures.
However,  in  fiscal  2002  and  beyond, the Company expects capital expenditure
requirements  to significantly increase over the spending levels of fiscal 2001,
primarily  due to a return to more normal operating requirements and the need to
comply  with  new  regulatory  requirements  for incinerators.  In addition, the
Company  expects  to  upgrade  certain of the Company's Branch Sales and Service
transportation  fleet  and oil re-refining facilities in fiscal 2001 and beyond.


                                      -48-
<PAGE>
EBITDA  ANALYSIS

Management  evaluates  the Company's performance using several factors, of which
the  primary  financial  measure  is  operating  income  before depreciation and
amortization  and  the provision for early facility closures ("EBITDA").  EBITDA
is  adjusted  by  adding  back  certain  other non-cash charges which management
believes  are  similar   to   depreciation  and   amortization.   This  adjusted
EBITDA   measure  is  used  by  the  Company  to  plan  for  its  environmental,
capital  expenditure  and  other  requirements. Further adjustments are made for
significant  items  that,  in  management's  opinion, are unusual and affect the
applicable  period.

A summary of quarterly EBITDA reflecting these additional management adjustments
is  as  follows  (in  thousands):

<TABLE>
<CAPTION>
                                                                                     THREE MONTHS ENDED
                                                                        --------------------------------------------
                                                    NINE MONTHS ENDED      MAY 31,     FEBRUARY 28,    NOVEMBER 30,
                                                      MAY 31, 2001          2001           2001            2000
                                                   -------------------  -------------  -------------  --------------
<S>                                                <C>                  <C>            <C>            <C>
EBITDA                                             $          (10,795)  $    (12,027)  $       2,983  $      (1,751)

Loss on disposal of equipment (non-cash)                       15,802          6,134           4,207          5,461
Provision for environmental liabilities (non-cash)             19,162          4,205           3,942         11,015
                                                   -------------------  -------------  -------------  --------------

Adjusted EBITDA                                                24,169         (1,688)         11,132         14,725

Unusual items:
    Accounting, legal, consulting and other costs              42,150         15,186          14,649         12,315
                                                   -------------------  -------------  -------------  --------------

Adjusted EBITDA after unusual items                $           66,319   $     13,498   $      25,781  $      27,040
                                                   ===================  =============  =============  ==============
</TABLE>

Capital expenditures were $44.9 million and environmental spending totaled $14.9
million  for  the  nine  months  ended  May  31,  2001.

DIP  FACILITY

On  July  19,  2000,  the  Bankruptcy Court granted final approval of a one-year
$100.0  million Revolving Credit, Term Loan, and Guaranty Agreement underwritten
by  the Toronto Dominion Bank as general administrative agent and the CIT Group,
Inc.  as  collateral  agent  (the  "DIP Facility") with sublimits for letters of
credit  of $35.0 million.  The actual amount available under the DIP Facility is
subject  to  a  borrowing  base computation.  Subsequently, the DIP Facility has
been  amended  on  six occasions.  The fifth amendment and agreement dated as of
August  6, 2001, increased the sublimits for letters of credit to $75.0 million.
Unless  amended,  the DIP Facility matures on the earlier of January 31, 2002 or
the  effective  date  of  the  plan  of  reorganization.

Proceeds from the DIP Facility may be used to fund post-petition working capital
and for other general corporate purposes during the term of the DIP Facility and
to  pay  certain  pre-petition claims, including those of critical vendors.  The
$75.0  million  sublimit  on  letters  of  credit  is  further  stratified  into
$40.0  million  available  for  auto  liability,  general liability and worker's
compensation  insurance  for  fiscal  years  2001  and  2002;  $15.0 million for
performance  bonding;  and $30.0 million for additional financial assurance with
respect  to  certain  facilities.

By  October  15,  2001,  the  Company has agreed to discuss modifications to the
DIP  Facility  to  include  financial  covenants,  including capital expenditure
limitations.  As  of  September  10,  2001, no amounts had been drawn on the DIP
Facility  and  approximately $49.0 million of letters of credit had been issued.
In addition, the Company had approximately $41.0 million available under the DIP
Facility.  The  Company has agreed to increase, in stages, the amounts currently
posted by an additional $11.0 million through January 1, 2002.  In addition, the
Company  has  agreed to post an additional $15.0 million of letters of credit by
September  30,  2001  with respect to existing financial assurance arrangements.
The Company is currently negotiating an increase in the DIP Facility in order to
accommodate  these  and  other  letter  of credit requirements.  The Debtors are
jointly  and  severally  liable  under  the  DIP  Facility.

The DIP Facility benefits from superpriority claims status as provided for under
the  Bankruptcy Code.  A superpriority claim is senior to unsecured pre-petition
claims  and  all  other  administrative  expenses incurred in a Chapter 11 case.
As  security,  the DIP Facility lenders were granted certain priority, perfected
liens  on certain of the Debtors' assets.  Pursuant to the final order approving
the DIP Facility, such liens are not subordinate to or pari passu with any other
lien  or  security  interest.  Pursuant  to  an agreement with the Company's new
Chief  Executive  Officer,  obligations  under  his employment contract with the
Company  are  generally  pari  passu  with  liens  pursuant to the DIP Facility.


                                      -49-
<PAGE>
Borrowings  under  the DIP Facility are priced at LIBOR plus 3% or prime plus 1%
depending  on  the nature of the borrowings.  Letters of credit are priced at 3%
per  annum  (plus  a fronting fee of 0.25% to the Agent) on the outstanding face
amount of each letter of credit.  In addition, the Company pays a commitment fee
of  0.50% per annum on the unused amount of the DIP Facility, payable monthly in
arrears.

Subsequent  to  August  31,  2000,  the  Company  failed  to comply with certain
affirmative  covenants  within  its DIP Facility, primarily related to providing
audited   financial   statements  by  specified  dates,  for  which  waivers  of
non-compliance  were  received.  In  addition,  subsequent  to May 31, 2001, the
Company   failed   to   provide  certain  preliminary  plan   of  reorganization
information,  for  which   waivers  of  non-compliance  have  been  received.

FINANCIAL  ASSURANCE

On August 7, 2001, the Company obtained the collateral necessary to enable it to
replace  Frontier  Insurance  Company ("Frontier") surety bonds at more than 100
facilities,  pursuant  to  Bankruptcy  Court approval obtained on July 11, 2001.
Several  states  already have approved the replacement insurance policies, which
Indian  Harbor Insurance Company has issued, and in those states the Company now
has financial assurance coverage that complies with applicable law.  The Company
expects  the  remaining affected states and the EPA to approve the Indian Harbor
policies  in  the  near  future.

The  Company  understands  that,  on  August  27,  2001,  Frontier  entered  a
rehabilitation  proceeding  that  the  New York Superintendent of Insurance will
administer  pursuant  to  New York law.  The Company further understands that in
such  a  proceeding,  the  Superintendent  takes  possession  of the property of
Frontier  and  conducts  its  business.  Because  Frontier  continues to provide
substantial  amounts  of financial assurance coverage at various facilities that
the  Company  and its subsidiaries own and operate, the Company is investigating
the  extent  to  which,  if  at all, the New York rehabilitation proceeding will
impact  the  rights  of  the  Company or the states or EPA with respect to these
financial  assurance  surety  bonds.   The  Company has not been notified of any
change  in  the  validity  of  such  bonds.

The  State  of  Texas  had  set  May 31, 2001 as the deadline for replacement of
Frontier  coverage in that state.  The Company and its subsidiaries did not meet
that deadline.  On June 1, 2001, the State of Texas notified the Company and its
affected subsidiaries that it intended to (i) seek substantial penalties for the
failure  to have compliant financial assurance; (ii) deny certain pending permit
renewal and modification applications; and (iii) revoke the registration of some
of  the  used  oil  facilities  that the Company and its subsidiaries operate in
Texas.  On August 21, 2001, the Bankruptcy Court approved a settlement agreement
between  the Company and certain of its subsidiaries and the State of Texas with
respect  to  financial  assurance  (and  other  matters)  in  that state. Having
obtained  Court  approval, the Company is implementing that settlement agreement
and  now  has compliant financial assurance where required at all the facilities
that  it  or its subsidiaries own and/or operate in Texas.  The Company, through
one  of  its subsidiaries, has paid a penalty of $1.5 million in connection with
such  settlement  agreement.

As  described  in greater detail in NOTE 7 - COMMITMENTS AND CONTINGENCIES, PART
I,  Item  1,  "Financial  Assurance  Issues",  in  the accompanying Consolidated
Financial  Statements,  the  Company currently is subject to a Consent Agreement
and  Final  Order  with  EPA  (and  similar  agreements in certain other states)
requiring  the replacement of Frontier at additional facilities on September 30,
2001,  although  the EPA staff has agreed to an extended deadline of October 18,
2001.  The  Company  anticipates  seeking  Court approval for the replacement of
Frontier  at  some  of  these  facilities and is seeking additional time (beyond
October  18,  2001)  from  EPA  and  the  affected states for the replacement of
Frontier  at  other  facilities, many of which already are closed.  Negotiations
regarding  the  Company's  request  are  underway.  If these negotiations do not
succeed,  the active facilities for which Frontier continues to provide coverage
(located  primarily  in  Utah  and  Colorado)  may  be required to close and the
Company  may  be  subject  to  further  penalties.

                       INFLATION AND COMMODITY PRICE RISKS

During  the periods presented herein, the Company's business has not been and is
not  expected  in  the  near  future  to be significantly affected by inflation.

The  Company  operates  a large fleet of vehicles in order to transport products
and  waste  streams.  The  Company  also purchases petroleum and petroleum waste
products  for  processing  in  its oil re-refining operations.  As a result, the
Company  is exposed to fluctuations in both revenues and expenses as a result of
potential changes in the price of petroleum products.  The Company believes that
its  oil  business  creates  a  partial hedge against the risk of increased fuel
expense  that  might  result  from  an  increase in petroleum prices.  While the
Company  does not use derivative contracts to hedge its petroleum price risk, it
does  enter  into  volume  discount arrangements to purchase fuel for its fleet.


                                      -50-
<PAGE>
                     FACTORS THAT MAY AFFECT FUTURE RESULTS

The  provisions  of  the  Private  Securities Litigation Reform Act of 1995 (the
"Act")  provide  companies  with  a  "safe  harbor"  when making forward-looking
statements.  This  "safe  harbor"  encourages  companies  to provide prospective
information about their companies without fear of litigation. The Company wishes
to  take  advantage  of the "safe harbor" provisions of the Act and is including
this  section  in   its  Quarterly  Report  on   Form  10-Q/A  in  order  to  do
so. Statements  that  are  not  historical  facts,  including  statements  about
management's  expectations  for fiscal year 2001 and beyond, are forward-looking
statements and involve various risks and uncertainties. Factors that could cause
the Company's actual results to differ materially from management's projections,
forecasts,  estimates  and  expectations  include,  but  are not limited to, the
following:

UNCERTAINTIES  RELATING  TO  THE  COMPANY'S  INTERNAL  CONTROLS

The Company has identified numerous issues that will be critical to a successful
reorganization.  In  addition to these efforts, and as part of the comprehensive
internal  review  of  its  accounting  records  conducted in connection with the
restatement process, the Company identified material deficiencies in many of its
financial  systems,  processes  and  related  internal  controls and commenced a
long-term  program  to  correct  these  conditions.

During the first nine months of fiscal 2001, the Company contracted with outside
accountants,  including  Arthur Andersen LLP, and other professionals to provide
significant non-audit assistance to the Company's corporate and field accounting
personnel.  These  professionals assisted with the account analysis, development
of  financial  reporting  systems  and project management support, all which was
necessary  to  prepare  the Company's Consolidated Financial Statements, related
disclosures  and  other  information requirements of this Form 10-Q/A and fiscal
2000  Form  10-K/A.  During  this same period, the Company began taking steps to
develop  a  comprehensive program that, over time, will establish a satisfactory
system  of  internal  controls  and  a  timely  and reliable financial reporting
process.

The  Company  will  continue  to  utilize  substantial internal and supplemental
external  resources  until  it is satisfied that its internal controls no longer
contain  material  weaknesses and it is capable of preparing timely and reliable
financial reporting.  In closing its books and records through May 31, 2001, the
Company  has  posted  to its general ledger system the large number of adjusting
journal entries resulting from its internal accounting review through August 31,
2000.  In  addition to updating its general ledger, the Company has reviewed its
accounting  records  for  the  first  nine  months of fiscal 2001, including the
effects  of applying any changes to its accounting policies from the fiscal 1997
to 2000 review, to its current results. The Company will incur significant costs
and  require extraordinary efforts to close its books at each interim and annual
period  in  order  to  produce  reliable  financial  statements.

The  Company continues the process of correcting these conditions by filling key
financial  accounting  and  reporting  positions  in  the  organization,  adding
information  technology  controls  and  improving  its  financial  systems  and
processes.  The  Company cannot estimate, at this time, how long it will take to
completely  develop  and  establish  an  adequate  internal control environment.

UNCERTAINTIES  RELATING  TO  BANKRUPTCY  PROCEEDINGS

The  Company's  future  results  are  dependent  upon the Company's successfully
confirming  and implementing a plan or plans of reorganization.  The Company has
not  yet  submitted  a  plan  or  plans to the Bankruptcy Court for approval and
cannot  make any assurance that it will be able to obtain any such approval in a
timely  manner.  Failure  to  obtain  this  approval  in  a  timely manner could
adversely  affect  the  Company's  operating  results,  its  ability  to  obtain
financing  to  fund  its  operations and its relations with its customers may be
harmed  by  protracted  bankruptcy proceedings.  Furthermore, the Company cannot
predict  the  ultimate amount of all settlement terms for the liabilities of the
Company  that  will  be  subject  to  a  plan  of  reorganization.

As  of  August  31,  2001,  proofs  of claim in the approximate amount of $174.0
billion have been filed against the Company and its affiliates by, among others,
secured  creditors,  unsecured  creditors  and  security  holders.  The  Company
believes  that the amount of these claims that are in excess of the $2.5 billion
recorded as "Liabilities subject to compromise" in the accompanying Consolidated
Financial  Statements  as  of  May 31, 2001 are duplicative or without merit and
will  not  have  a material effect on the Consolidated Financial Statements. The
Company is in the process of reviewing the proofs of claim and once this process
is  complete,  will  file appropriate objections to the claims in the Bankruptcy
Court.  As  of  August  31,  2001,  the  Company  believes  it  has  identified
approximately  $170.8  billion  of  such claims which are duplicative or without
merit.

Once  a  plan  or  plans  of  reorganization  is  approved  and implemented, the
Company's operating results may be adversely affected by the possible reluctance
of prospective lenders and customers to do business with a Company that recently
emerged  from  bankruptcy  proceedings.  The  Company  believes that its revenue
since  the  date  of  the  filing  is being adversely impacted by the Chapter 11
cases,  particularly  with  respect  to  "event-based"  business in the Chemical
Services  Division.


                                      -51-
<PAGE>
EFFECT  OF  LAIDLAW'S  FINANCIAL  SITUATION  ON  THE  COMPANY

On  June  28,  2001,  Laidlaw Inc. and five of its subsidiary holding companies,
Laidlaw  Investments  Ltd.,  Laidlaw  International Finance Corporation, Laidlaw
One,  Inc.,  Laidlaw  Transportation,  Inc. and Laidlaw USA, Inc. (collectively,
"Laidlaw")  filed voluntary petitions for reorganization under Chapter 11 of the
Bankruptcy  Code  in the United States Bankruptcy Court for the Western District
of  New York.   On the same day, Laidlaw Inc. and Laidlaw Investments Ltd. filed
cases  under  the  Canada  Companies'  Creditors  Arrangement  Act (CCAA) in the
Ontario Superior Court of Justice in Toronto, Ontario.  As a result of Laidlaw's
filings, claims and causes of action the Company may have against Laidlaw may be
subject  to  compromise  in  Laidlaw's  Chapter  11  or  CCAA  proceedings.

The  Company  is  unable  to  predict the outcome or impact of these matters and
there  can  be no assurance that they will not have a material adverse effect on
the  Company  and  its  operations.

LEVERAGE

The Company is currently in default under its senior debt obligations, which are
substantial.  During the pendency of its bankruptcy proceedings, the Company may
only obtain additional debt financing with the approval of the Bankruptcy Court,
and  has  already obtained $100.0 million in such debt financing through the DIP
Facility  discussed  above.  To date, there have been no cash borrowings against
this  $100.0  million DIP Facility.  As of September 10, 2001, letters of credit
in  the  aggregate  amount of approximately $49.0 million have been issued under
the  DIP  Facility.  The  total remaining availability under the DIP Facility is
approximately  $41.0  million,  of  which  up  to $26.0 million is available for
letters of credit. Depending on the resolution of its bankruptcy proceedings and
the  plan  or  plans  of  reorganization  adopted,   the  Company  could  emerge
from  bankruptcy  highly  leveraged  with  substantial debt service obligations,
including,  as  discussed  above, obligations or commitments regarding financial
assurance  requirements. Thus the Company is particularly susceptible to adverse
changes in its industry, the economy and the financial markets. In addition, the
Company's  ability  to  obtain  additional  debt  financing  may  be  limited by
restrictive  covenants  under  the terms of credit agreements and any other debt
instruments.  Those  limits  on  financing may restrict the Company's ability to
service its debt obligations through additional debt financing if cash flow from
operations  is insufficient to service such obligations. Unless amended, the DIP
Facility  matures on the earlier of January 31, 2002, or the effective date of a
plan  of  reorganization.

ENVIRONMENTAL  REGULATION  AND  LEGAL  PROCEEDINGS

The  Company's  operations  are  subject  to  certain  federal, state, and local
requirements,  which  regulate health, safety, environment, zoning and land-use.
Operating  and other permits are generally required for incinerators, landfills,
transfer  and storage facilities, certain collection vehicles, storage tanks and
other facilities owned or operated by the Company, and these permits are subject
to  revocation, modification and renewal. Although the Company believes that its
facilities  meet  federal, state and local requirements in all material respects
(except  for  financial  assurance  matters  described  below)  and have all the
required operating and other permits, it may be necessary to expend considerable
time,  effort  and  money  to keep existing or acquired facilities in compliance
with  applicable  requirements,  including  new  regulations,  and  to  maintain
existing permits and approvals and to obtain the permits and approvals necessary
to  increase  their  capacity.

The  Company is required to provide certain financial assurances with respect to
certain  statutorily  required  closure,  post-closure  and  corrective  action
obligations  related to various operating facilities. These financial assurances
may take the form of insurance, guarantees, bonds, letters of credit or deposits
of  cash,  to  the  extent  acceptable  to  the United States, Canadian or other
foreign,  state,  territorial,  federal,  provincial  or local courts, executive
offices,  legislatures,  governmental  agencies  or  ministries,  commissions or
administrative,  regulatory  or self-regulatory authorities or instrumentalities
("Governmental  Entities") requiring such assurances. There is no guarantee that
the  Company  will  be  able  to  provide  the  required  financial  assurances.

The  Company  is  a  party  to  environmental  and  other litigation, claims and
administrative proceedings arising from its operations. The Company is unable to
predict  the  outcome  or  impact of these matters and there can be no assurance
that  they  will  not  have  a  material  adverse  effect on the Company and its
operations.

The  Company  believes  that many of the claims and litigation matters described
above  are subject to resolution in its Bankruptcy proceedings.  The outcomes of
such  proceedings  are  unknown  and  subject  to  a  number of uncertainties as
described  above.

MATTERS  RELATED  TO  INVESTIGATION  OF  FINANCIAL  RESULTS

The  Company  is a party to various claims filed by shareholders and bondholders
of  the Company on behalf of various alleged classes of Company shareholders and
bondholders,  asserting  federal  securities  law claims against the Company and
certain  present  and  former  officers and directors of the Company and Laidlaw
Inc.  These  actions  against the Company are subject to an automatic stay under
the Bankruptcy Code during the pendency of the Company's bankruptcy proceedings.


                                      -52-
<PAGE>
The  Company  is  the  subject  of  ongoing investigations by the Securities and
Exchange Commission and a grand jury sitting in the United States District Court
for  the Southern District of New York relating to the same matters. The Company
has  responded to subpoenas issued by the Securities and Exchange Commission and
the  grand  jury  and  is  cooperating  with  each  of  the  investigations.

In  addition  to  the  above,  two shareholder derivative lawsuits were filed on
behalf  of  the  Company  against  certain of its directors and former directors
alleging  breach  of  state law fiduciary duties by the defendants. These claims
seek to recover damages on behalf of the Company against the director defendants
in an unspecified amount as well as related relief. These actions are subject to
an automatic stay under the Bankruptcy Code during the pendency of the Company's
bankruptcy  proceedings.

The  Company  is  unable  to  predict the outcome or impact of these matters and
there  can  be no assurance that they will not have a material adverse effect on
the  Company  and  its  operations.

REVIEW  FOR  IMPAIRMENTS

During  the  fourth  quarter of fiscal 2001, the Company completed its operating
budget  for  the  fiscal year 2002 and updated its five-year plan for the fiscal
years 2002 to 2006.  The Company is in the process of updating its comprehensive
assessment  for  impairment  of  its  long-lived  assets  based, in part, on the
completed  budget and plans.  If additional impairment charges are required once
this  assessment  is  complete,  these  charges  will  be recorded in the fourth
quarter  of  fiscal  2001.

ITEM  3.  QUANTITATIVE  AND  QUALITATIVE  DISCLOSURES  ABOUT  MARKET  RICK

For  the  nine months ended May 31, 2001, there have been no material changes in
the  Company's market risk. Information relating to the Company's market risk at
August  31, 2000 is included in the Company's Annual Report on Form 10-K/A filed
on  July  9,  2001.


                                      -53-
<PAGE>
                           PART II - OTHER INFORMATION

ITEM  1.  LEGAL  PROCEEDINGS.

Except  as  herein  set  forth,  there have been no additional significant legal
proceedings  or  any  material  changes  in  the legal proceedings other than as
reported  in  PART  II,  Item  3  of the Company's Report on Form 10-K/A for the
twelve  months  ended  August  31,  2000  filed  July  9,  2001.


CHAPTER  11  FILING

On September 5, 2001, the Bankruptcy Court entered an order approving employment
and  indemnification  agreements  with  Ronald  A.  Rittenmeyer,  who  had  been
appointed  to  the  Board of Directors of the Company in April 2001. At the same
time,  the  Bankruptcy  Court  approved  termination  and  consulting agreements
with  David  E.  Thomas,  Jr.  and  Grover  C.  Wrenn.  Under the employment and
indemnification  agreements,  Mr. Rittenmeyer will become Chairman of the Board,
President  and  Chief  Executive  Officer  of the Company and Messrs. Thomas and
Wrenn  will  remain on the Board of Directors as non-executive Vice Chairmen and
will  be available to consult with the Board of Directors and Mr. Rittenmeyer as
needed  on  specific  issues.

On  August  21,  2001, the Bankruptcy Court entered an Order approving a Consent
Agreement  between  the  Company  and  certain of its subsidiaries and the Texas
Natural  Resources Conservation Commission (the "Texas Consent Agreement").  The
Texas  Consent  Agreement  is  a  parallel  agreement  as is contemplated in the
Amended  Consent  Agreement  between the Environmental Protection Agency and the
Company  and  certain  of its subsidiaries previously approved by the Bankruptcy
Court and Texas is a parallel action state as is contemplated in that agreement.
The  Texas  Consent  Agreement represents a comprehensive settlement between the
Debtors  and  the  Texas  Natural  Resources  Commission  (the "TNRCC") settling
various  environmental  claims  and civil administrative actions asserted by the
TNRCC.  In connection with the Texas Consent Agreement, the Company, through one
of  its  subsidiaries,  has paid an administrative penalty in the amount of $1.5
million  in  settlement  of various violations related to the failure to provide
compliant  financial  assurance  for  alleged  hazardous waste violations in the
State  of  Texas.

On  August  21,  2001,  the  Bankruptcy  Court  approved a motion permitting the
Company  to continue to advance certain legal defense costs to certain employees
in  connection  with  the  investigations  being conducted by the Securities and
Exchange  Commission  and  the  U.S.  Attorney's  Office.

MATTERS  RELATED  TO  INVESTIGATION  OF  FINANCIAL  RESULTS

On  September  13,  2001, the Board of Directors dissolved the Special Committee
(Investigation)  and established the Special Committee (Conflicts of Interest in
Litigation).  The  Special  Committee  (Conflicts  of Interest in Litigation) is
authorized  to  manage  all litigation involving the Company and a member of the
Board  of  Directors.  The  new committee is comprised of Ronald A. Rittenmeyer,
Kenneth  K.  Chalmers,  Peter  E. Lengyel and David W. Wallace, each of whom was
appointed  to  the  Board  subsequent  to  March  6,  2000 and is not personally
involved  in  such  litigation.

On  March  5,  2001, a class action captioned Eaton Vance Distributors, Inc., T.
Rowe  Price  Associates, Inc., Delaware Investment Advisors, John Hancock Funds,
Inc.,  and  Putnam Investments, Inc., v. Kenneth W. Winger, Laidlaw Inc. John R.
Grainger,  James  R.  Bullock,  Paul  R.  Humphreys,  John Rollins, Sr., John W.
Rollins, Jr., Leslie W. Haworth, David E. Thomas, Jr., Henry B. Tippie, James L.
Wareham,  Grover  C.  Wrenn, Michael J. Bragagnolo and Henry H. Taylor, Case No.
01AS01376, was filed in the Superior Court of the State of California, County of
Sacramento.  The  plaintiffs  purchased  or acquired certain bonds issued by the
California  Pollution Control Financing Authority on July 1, 1997, secured by an
indenture  agreement with Laidlaw Environmental Services, Inc. and its successor
Safety-Kleen  Corp.,  in  their  initial  offering on July 1, 1997, and retained
through  March  6,  2000.  The  bonds  were entitled Pollution Control Refunding
Revenue Bonds due July 1, 2007.  The plaintiffs allege, among other things, that
the  defendants  made  written  or oral communications containing material false
statements  or  omissions  and violated certain state securities laws and common
law.  The  plaintiffs  seek  to  recover  compensatory  damages in the amount of
approximately  $21.7 million and punitive damages in the amount of approximately
$65.2  million,  as well as related relief.  Although the Company is not a party
to  this action, certain of the individual defendants, who are present or former
officers  or directors of the Company, may make demands to be indemnified by the
Company  in  connection  with  the  action.  A motion to quash the complaint, on
behalf  of David E. Thomas, John W. Rollins, Jr., the Estate of John W. Rollins,
Sr.,  James L. Wareham, Grover C. Wrenn, and Henry B. Tippie was filed on August
27,  2001. On behalf of Mr. Taylor, a motion to quash service of the summons was
filed  on  September  4,  2001.


                                      -54-
<PAGE>
FINANCIAL  ASSURANCE  ISSUES

On August 7, 2001, the Company obtained the letter of credit necessary to enable
it  to replace Frontier Insurance Company ("Frontier") surety bonds at more than
100 facilities, pursuant to Bankruptcy Court approval obtained on July 11, 2001.
Several  states  already have approved the replacement insurance policies, which
Indian  Harbor Insurance Company has issued, and in those states the Company now
has financial assurance coverage that complies with applicable law.  The Company
expects  the  remaining  affected  states  and  the  United States Environmental
Protection  Agency  ("EPA")  to  approve  the Indian Harbor policies in the near
future.

The  Company  understands  that,  on  August  27,  2001,  Frontier  entered  a
rehabilitation  proceeding  that  the  New York Superintendent of Insurance will
administer  pursuant  to  New York law.  The Company further understands that in
such  a  proceeding,  the  Superintendent  takes  possession  of the property of
Frontier  and  conducts  its  business.  Because  Frontier  continues to provide
substantial  amounts  of financial assurance coverage at various facilities that
the  Company  and its subsidiaries own and operate, the Company is investigating
the  extent  to  which,  if  at all, the New York rehabilitation proceeding will
impact  the  rights  of  the  Company or the states or EPA with respect to these
financial  assurance  surety  bonds.  The  Company  has not been notified of any
change  in  the  validity  of  such  bonds.

As noted above under Chapter 11 Filing, on August 21, 2001, the Bankruptcy Court
approved  the  settlement  agreement  between  the  Company  and  certain of its
subsidiaries  and  the  State  of Texas with respect to financial assurance (and
other  matters)  in that state.  Having now obtained Court approval, the Company
is  implementing  that  settlement  agreement  and  now  has compliant financial
assurance  where  required at all the facilities that it or its subsidiaries own
and  operate  in  Texas.

As described in greater detail in the Company's Annual Report on Form 10-K/A for
the  fiscal  year  ended  August 31, 2000, the Company currently is subject to a
Consent  Agreement  and  Final Order with EPA (and similar agreements in certain
other  states) requiring the replacement of Frontier at additional facilities on
September 30, 2001, although the EPA staff has agreed to an extended deadline of
October  18,  2001.  The  Company  anticipates  seeking  Court  approval for the
replacement  of  Frontier  at some of these facilities and is seeking additional
time  (beyond  October  18,  2001)  from  EPA  and  the  affected states for the
replacement  of  Frontier  at  other  facilities,  many  of  which  already  are
closed.  Negotiations  regarding  the  Company's  request are underway. If these
negotiations  do not succeed, the active facilities for which Frontier continues
to  provide coverage (located primarily in Utah and Colorado) may be required to
close  and  the  Company  also  may  be  subject  to  further  penalties.

GENERAL

The Company's hazardous and industrial waste services are continuously regulated
by  federal,  state, provincial and local laws enacted to regulate the discharge
of materials into the environment or primarily for the purpose of protecting the
environment.  This inherent regulation of the Company necessarily 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 violations
of  existing  permits  and licenses.  At September 14, 2001, subsidiaries of the
Company were involved in nine proceedings in which a governmental authority is a
party  relating primarily to activities at waste treatment, storage and disposal
facilities  where  the  Company believes sanctions involved in each instance may
exceed  $100,000.

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, disposal arrangers and transporters of the
waste  material,  may  be strictly, jointly and severally liable for remediation
costs  and  natural  resources  damage.  At  September 10, 2001, the Company had
identified  60  active  federal or state-run CERCLA sites where the Company is a
potentially responsible party.  The Company periodically 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 financial soundness of other potentially responsible
parties  at  the  location.


                                      -55-
<PAGE>
Lambton  Hazardous  Waste  Landfill,  Ontario,  Canada
------------------------------------------------------

On September 3, 1999, The Company's Lambton hazardous waste landfill facility in
Ontario,  Canada, discovered an upwelling of water and natural gas in a disposal
cell  designated  as  Sub-cell 3. While in the course of trying to determine the
source  and cause of the upwelling, the Company informed the Ontario Ministry of
Environment  and  Energy  ("MOE")  of  the  situation.  On November 2, 1999, MOE
issued  a Field Order finding that the upward migration of water and methane gas
onto the landfill cell floor necessitated that the Company not utilize the newly
constructed Sub-cell 3 for waste disposal.   On December 14, 1999 the MOE issued
a  second Field Order requiring that Sub-cell 4, another newly constructed cell,
not  be  utilized  for  waste  disposal  after  MOE officials observed what they
believed  to  be  significant  gas  evolution  from the bottom of the cell.   On
December  21,  1999  independent  technical  experts  and  Company professionals
presented  to MOE testimony and a report addressing MOE concerns.  Following the
hearing  and  testimony, the MOE issued a third Field Order on December 24, 1999
revoking  the two previous orders and allowing the utilization of Sub-cell 4 for
waste  disposal  under  new  conditions  which  included  that,  (1) no waste in
Sub-cell  4  was  to  be  placed below an elevation of 182 meters above mean sea
level and (2) with respect to Sub-cell 3 the Company was to provide a report for
the  approval  of  the  Director  of  the  MOE  which would provide the plan for
identifying  potential  areas of gas and water venting, the proposed measures to
remediate all areas identified and further steps to protect the integrity of the
sub-cell.  In  accordance  with  the  third Field Order, the Company submitted a
report  to  the  MOE  in February 2000 outlining its plan for present and future
site  activities.  The  MOE  issued an Order approving the remediation plan.  In
accordance  with  the  approved plan, physical remediation began in spring 2001.
The  Order  requires  that  the plan be fully implemented by the end of December
2001.

Hudson  County  Improvement  Authority  Litigation
--------------------------------------------------

On July 11, 2001 the Bankruptcy Court entered an Order authorizing the Company's
rejection  of  the  executory  contracts  and  the  unexpired  lease to which SK
Services  East  and  HCIA  were  parties.  The Order does not limit, abridge, or
otherwise  effect  HCIA's  right  to assert and seek remedies regarding its pre-
and/or  postpetition  claims  against  the Company for damages and other relief.
Also  on  July 11, 2001 the Bankruptcy Court granted HCIA's motion to modify the
Bankruptcy  Code's  automatic stay, and entered an Order permitting the Superior
Court of New Jersey, Hudson County, to make its final determination regarding SK
Services  East  contractual  obligations  under  the  Agreement  and Lease.  The
Superior  Court  has  scheduled oral argument on this matter for September 2001.

FUSRAP  Waste  Disposal  at  Safety-Kleen  (Buttonwillow),  Inc.
----------------------------------------------------------------

Safety-Kleen  (Buttonwillow),  Inc.,  a  subsidiary  of  the  Company,  owns and
operates  a  hazardous  waste  landfill  in Kern County California. The facility
accepted  and  disposed  of construction debris that originated at a site in New
York  which  was part of the federal Formerly Utilized Sites Remediation Program
(FUSRAP).  The  construction  debris  was low-activity radioactive waste and was
shipped  to  the  site  by  the U.S. Army Corps of Engineers (USACE). FUSRAP was
created  in  the  mid-1970s  in  an  attempt  to manage various sites around the
country  contaminated  with  residual radioactivity from activities conducted by
the Atomic Energy Commission and United States military during World War II. The
California Department of Health Services (DHS) has claimed that the facility did
not  lawfully accept the waste.  Both DHS and the Department of Toxic Substances
Control  (DTSC)  have  filed  claims  in  the  Company's  Bankruptcy proceedings
preserving  the  right  of  the  agencies  to seek penalties and possibly compel
removal  of  the  material should an ongoing investigation reveal the subsidiary
acted  improperly.  DHS  claimed  penalties  in  the  amount of $0.6 million and
potential  removal  costs  of  $15.5  million  should DHS have to oversee and/or
conduct  the  removal. The proof of claim filed by the DTSC was in the amount of
$15.0  million  for potential penalties plus an unspecified amount for any costs
the  DTSC  may  incur  should  the subsidiary be forced to remove the waste. The
subsidiary  and the USACE contend the material was properly disposed of and will
vigorously resist the imposition of any penalties or any efforts to require that
waste  be  removed.


                                      -56-
<PAGE>
ITEM  6.  EXHIBITS  AND  REPORTS  ON  FORM  8-K.

     (a)     Exhibits:

(3)(a)  Restated  Certificate of Incorporation of the Company dated May 13, 1997
and Amendment to Certificate of Incorporation dated May 15, 1997, Certificate of
Correction  Filed  to  Correct  a  Certain  Error  in  the  Restated and Amended
Certificate  of Incorporation of the Company dated October 15, 1997, Certificate
of  Amendment  to the Restated Certificate of Incorporation of the Company dated
November  25,  1998, and Certificate of Amendment to the Restated Certificate of
Incorporation  of  the  Company  dated  November  30, 1998, all filed as Exhibit
(3)(a)  to  the  Registrant's  Form 10-Q for the three months ended February 28,
2001,  and  incorporated  herein  by  reference.

(3)(b) Amended and Restated Bylaws of the Company filed as Exhibit (3)(b) to the
Registrant's  Form  10-K  for  the  year  ended August 31, 2000 and incorporated
herein  by  reference.

(4)(a) 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)(b)  First  Supplemental  Indenture  effective  as of November 15, 1998 among
Safety-Kleen Services, Inc. the Registrant, SK Europe, Inc. and The Bank of Nova
Scotia  Trust  Company  of  New  York, as trustee filed as Exhibit (4)(f) to the
Registrant's  Form  S-4 Registration Statement No. 333-82689 filed July 12, 1999
and  incorporated  herein  by  reference.

(4)(c)  Second  Supplemental  Indenture  effective  as  of  May  7,  1999  among
Safety-Kleen  Services, Inc. the Company, SK Services, L.C., SK Services (East),
L.C.  and The Bank of Nova Scotia Trust Company of New York, as trustee filed as
Exhibit  (4)(d)  to  the  Company's  Form  10-K  filed  October  29,  1999  and
incorporated  herein  by  reference.

(4)(d)  Indenture  dated  as of May 17, 1999 between the Company 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. 333-82689 filed July 12, 1999
and  incorporated  herein  by  reference.

(4)(e)  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(f) to the
Registrant's  Form  10-Q  for  the  three  months  ended  February  28, 1999 and
incorporated  herein  by  reference.

(4)(f)  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)(g)  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)(h)  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)(i)  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
N.A., filed as Exhibit (4)(j) to the Registrant's Form 10-Q for the three months
ended  February  28,  1999  and  incorporated  herein  by  reference.


                                      -57-
<PAGE>
(4)(j)  Waiver  and Third Amendment to the Amended and Restated Credit Agreement
dated  as  of  May  6, 1999 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
N.A. filed as Exhibit (4)(l) to the Registrant's Form S-4 Registration Statement
No.  333-82689  filed  July  12,  1999  and  incorporated  herein  by reference.

(4)(k)  Fourth  Amendment dated as of March 13, 2000 to the Amended and Restated
Credit  Agreement  dated  as  of  May  6, 1999 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 N.A. filed as Exhibit (4)(l) to the Registrant's Form 10-Q for the
three  months  ended  May  31,  2000  and  incorporated  herein  by  reference.

(4)(l)  Consent  dated  as  of March 16, 2000 to the Amended and Restated Credit
Agreement  dated  as  of May 6, 1999 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  N.A.  filed  as Exhibit (4)(m) to the Registrant's Form 10-Q for the three
months  ended  May  31,  2000  and  incorporated  herein  by  reference.

(4)(m)  Amended  and Restated $100,000,000 Debtor In Possession Credit Agreement
among Safety-Kleen Services, Inc., The Several Lenders from Time to Time Parties
thereto,  Toronto  Dominion  (Texas),  Inc., as General Administrative Agent and
Underwriter  and  The  CIT  Group/Business  Credit, Inc. as Collateral Agent and
Underwriter  Initially dated as of June 11, 2000 Amended and Restated as of July
19,  2000  Company filed as Exhibit (4)(m) to the Registrant's Form 10-K for the
year  ended  August  31,  2000  and  incorporated  herein  by  reference.

(4)(n)  First  Amendment,  dated  as  of  October  31,  2000, to the Amended and
Restated  $100,000,000  Debtor In Possession Credit Agreement among Safety-Kleen
Services,  Inc.,  The Several Lenders from Time to Time Parties thereto, Toronto
Dominion  (Texas), Inc., as General Administrative Agent and Underwriter and The
CIT  Group/Business  Credit,  Inc. as Collateral Agent and Underwriter Initially
dated  as  of  June  11, 2000 Amended and Restated as of July 19, 2000, filed as
Exhibit (4)(n) to the Registrant's Form 10-Q for the three months ended November
30,  2000  and  incorporated  herein  by  reference.

(4)(o)  Second  Amendment  and  Waiver,  dated  as  of February 28, 2001, to the
Amended  and  Restated  Debtor-in-Possession Credit Agreement among Safety-Kleen
Services,  Inc.,  The  Several  Lenders  from  Time  to  Time  Parties  thereto,
Toronto-Dominion  (Texas),  Inc. as General Administrative Agent and Underwriter
and  The  CIT  Group/Business  Credit,  Inc. as Collateral Agent and Underwriter
Initially  dated  as of June 11, 2000, Amended and Restated as of July 19, 2000,
filed  as  Exhibit  (4)(o)  to  the  Registrant's Form 10-K/A for the year ended
August  31,  2000,  filed  on July 9, 2001 and incorporated herein by reference.

 (4)(p)  Third  Amendment and Waiver, dated as of March 28, 2001, to the Amended
and  Restated Debtor-in-Possession Credit Agreement among Safety-Kleen Services,
Inc.,  The  Several  Lenders from Time to Time Parties thereto, Toronto-Dominion
(Texas),  Inc.  as  General  Administrative  Agent  and  Underwriter and The CIT
Group/Business  Credit, Inc. as Collateral Agent and Underwriter Initially dated
as  of June 11, 2000, Amended and Restated as of July 19, 2000, filed as Exhibit
(4)(p) to the Registrant's Form 10-K/A for the year ended August 31, 2000, filed
on  July  9,  2001  and  incorporated  herein  by  reference.

(4)(q)  Fourth  Amendment and Waiver, dated as of April 30, 2001, to the Amended
and  Restated Debtor-in-Possession Credit Agreement among Safety-Kleen Services,
Inc.,  The  Several  Lenders from Time to Time Parties thereto, Toronto-Dominion
(Texas),  Inc.  as  General  Administrative  Agent  and  Underwriter and The CIT
Group/Business  Credit, Inc. as Collateral Agent and Underwriter Initially dated
as  of June 11, 2000, Amended and Restated as of July 19, 2000, filed as Exhibit
(4)(q) to the Registrant's Form 10-K/A for the year ended August 31, 2000, filed
on  July  9,  2001  and  incorporated  herein  by  reference.

(4)(r)  Fifth  Amendment  and  Agreement,  dated  as  of August 6, 2001,  to the
Amended  and  Restated  Debtor-in-Possession Credit Agreement among Safety-Kleen
Services,  Inc.,  The  Several  Lenders  from  Time  to  Time  Parties  thereto,
Toronto-Dominion  (Texas),  Inc. as General Administrative Agent and Underwriter
and  The  CIT  Group/Business  Credit,  Inc. as Collateral Agent and Underwriter
Initially  dated  as of June 11, 2000, Amended and Restated as of July 19, 2000.

(4)(s)   Sixth Waiver dated as of September 4, 2001, to the Amended and Restated
Debtor-in-Possession  Credit  Agreement  among  Safety-Kleen Services, Inc., The
Several  Lenders  from  Time  to Time Parties thereto, Toronto-Dominion (Texas),
Inc.  as General Administrative Agent and Underwriter and The CIT Group/Business
Credit,  Inc. as Collateral Agent and Underwriter Initially dated as of June 11,
2000,  Amended  and  Restated  as  of  July  19,  2000.


                                      -58-
<PAGE>
(4)(t)  Letter Agreement among Toronto Dominion (Texas), Inc., as administrative
agent,  the  Company  and  Safety-Kleen  Systems,  Inc.  dated December 12, 2000
relating  to  the  Amended  and Restated Marketing and Distribution Agreement by
Safety-Kleen  Systems,  Inc.  and System One Technologies Inc., filed as Exhibit
(4)(o)  to  the  Registrant's  Form 10-Q for the three months ended February 28,
2001,  and  incorporated  herein  by  reference.

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

(4)(v)  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 three months ended May 31, 1997 and incorporated
herein  by  reference.

(4)(w)  Indenture  of  Trust  dated  as of August 1, 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 three months ended May 31,
1997  and  incorporated  herein  by  reference.

(4)(x)  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  three months ended May 31, 1997 and
incorporated  herein  by  reference.

(4)(y)  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 three
months  ended  May  31,  1997  and  incorporated  herein  by  reference.

(4)(z)  Promissory  Note  dated May 15, 1997 for $60,000,000 from the Company to
Westinghouse  Electric  Corporation,  filed  as Exhibit 4(n) to the Registrant's
Form  10-Q  for  the  three months ended May 31, 1997 and incorporated herein by
reference.

(4)(aa)  Letter  dated  May  7,  1999  from  Toronto-Dominion  (Texas)  Inc. (as
assignee  of Westinghouse Electric Corporation) and agreed to by the Company and
Laidlaw  Inc.  amending  the terms of the Promissory Note dated May 15, 1997 (as
referenced  in  Exhibit (4)(z)) filed as Exhibit (4)(u) to the Registrant's Form
S-4  Registration  Statement  No. 333-82689 filed July 12, 1999 and incorporated
herein  by  reference.

(4)(bb)  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)(z)) from Company to Westinghouse Electric Corporation,
filed  as  Exhibit 4(o) to the Registrant's Form 10-Q for the three months ended
May  31,  1997  and  incorporated  herein  by  reference.

(4)(cc)  Rights  Agreement  dated as of October 15, 1999 between the Company and
EquiServe  Trust  Company,  N.A.,  as Rights Agent, filed as Exhibit (c)1 to the
Company's  Current Report on Form 8-K filed on October 15, 1999 and incorporated
herein  by reference.

(4)(dd)  First  Amendment  to  Rights  Agreement,  dated  as  of March 17, 2000,
between  the  Company and EquiServe Trust Company, N.A. filed as Exhibit 99.1 to
the  Company's  Current  Report  on  Form  8-K  filed  on  March  17,  2000  and
incorporated  herein  by  reference.

(4)(ee)  Letter  Agreement,  dated  October  12,  1999,  between the Company and
Laidlaw  Inc.  filed as Exhibit 99.2 to the Company's Current Report on Form 8-K
filed  on  March  17,  2000  and  incorporated  herein  by  reference.

(4)(ff)  Other  instruments defining the rights of holders of nonregistered debt
of  the  Company  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  Company  and its subsidiaries.  The Company 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.


                                      -59-
<PAGE>
(10)(c)  Second  Amendment to Stock Purchase Agreement (as referenced in Exhibit
(10)(b)  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  three  months  ended  May  31, 1997 and
incorporated  herein  by  reference.

(10)(d)  Agreement for the sale and purchase of shares and loan stock held by SK
Europe,  Inc. in Safety-Kleen Europe Limited between Safety-Kleen Europe Limited
and  SK  Europe,  Inc.  and  the Company and The Electra Subscribers and Electra
European  Fund  LP  dated as of July 6, 2000 Company filed as Exhibit (10)(d) to
the  Registrant's  Form 10-K for the year ended August 31, 2000 and incorporated
herein  by  reference.

(10)(e)  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.

(10)(f)  Rollins  Environmental  Services,  Inc. 1993 Stock Option Plan filed as
Exhibit (10)(e) to the Registrant's Current Form 10-Q for the three months ended
May  31,  2000  and  incorporated  herein  by  reference.

(10)(g)  The  Company'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.

(10)(h)  First  Amendment  to Company's 1997 Stock Option Plan, filed as Exhibit
(10)(g)  to the Company's Form 10-Q for the three months ended November 30, 1999
and  incorporated  herein  by  reference.

(10)(i)  The Company'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)(j)  First  Amendment  to  Company's  Director's  Stock Option Plan filed as
Exhibit  (10)(i)  to the Company's Form 10-Q for the three months ended November
30,  1999  and  incorporated  herein  by  reference.

(10)(k)  Stock  Purchase  Agreement  dated  February  6, 1997 among the Company,
Laidlaw  Inc., and Laidlaw Transportation, Inc. filed as Exhibit A to Annex A to
the  Definitive  Proxy  Statement  on  Form  DEF  14A  filed  on May 1, 1997 and
incorporated  herein  by  reference.

(10)(l)  Executive  Bonus  Plan  for fiscal year 2000 filed as Appendix C to the
Definitive  Proxy  Statement  on  Form  DEF  14A  filed  on October 29, 1999 and
incorporated  herein  by  reference.

(10)(m)  The  Company's  U.S.  Supplemental  Executive  Retirement Plan filed as
Exhibit 10(g) to the Company's Form 10-Q for the three months ended November 30,
1997  and  incorporated  herein  by  reference.

(10)(n)  Employment  Agreement  by and between Company and Grover C. Wrenn dated
as of August 23, 2000 filed as Exhibit (10)(n) to the Registrant's Form 10-K for
the  year  ended  August  31,  2000  and  incorporated  herein  by  reference.

(10)(o)  Employment  Termination And Consulting Agreement dated as of August 15,
2001  between  Safety-Kleen  Corp.  and  Grover  C.  Wrenn.

(10)(p)  Employment  Agreement  by  and between Company and David E. Thomas, Jr.
dated  as  of  August 23, 2000 filed as Exhibit (10)(o) to the Registrant's Form
10-K  for  the  year ended August 31, 2000 and incorporated herein by reference.

(10)(q)  Employment  Termination And Consulting Agreement dated as of August 15,
2001  between  Safety-Kleen  Corp.  and  David  E.  Thomas,  Jr.

(10)(r)  Employment  Agreement  by  and  between  Company and Larry W. Singleton
dated as of July 17, 2000 filed as Exhibit (10)(p) to the Registrant's Form 10-K
for  the  year  ended  August  31,  2000  and  incorporated herein by reference.

(10)(s)  Employment  Agreement  by  and between Safety-Kleen Corp. and Ronald A.
Rittenmeyer,  dated  as  of  August  8,  2001.

(10)(t)  Company Indemnification Agreement delivered to Ronald A. Rittenmeyer by
Safety-Kleen  Corp.,  effective  as  of  August  8,  2001.

(10)(u)  Form  of  Senior Executive Change of Control Agreement filed as Exhibit
(10)(q)  to  the  Registrant's  Form 10-K for the year ended August 31, 2000 and
incorporated  herein  by  reference.

(10)(v)  Senior  Executive  Retention  Plan  filed  as  Exhibit  (10)(r)  to the
Registrant's  Form  10-K  for  the  year  ended August 31, 2000 and incorporated
herein  by  reference.

(10)(w)  Senior  Executive  Severance  Plan  filed  as  Exhibit  (10)(s)  to the
Registrant's  Form  10-K  for  the  year  ended August 31, 2000 and incorporated
herein  by  reference.


                                      -60-
<PAGE>
(10)(x)  Executive  Retention  Plan filed as Exhibit (10)(t) to the Registrant's
Form  10-K  for  the  year  ended  August  31,  2000  and incorporated herein by
reference.

(10)(y)  Executive  Severance  Plan filed as Exhibit (10)(u) to the Registrant's
Form  10-K  for  the  year  ended  August  31,  2000  and incorporated herein by
reference.

(10)(z)  Key Manager Retention Plan filed as Exhibit (10)(v) to the Registrant's
Form  10-K  for  the  year  ended  August  31,  2000  and incorporated herein by
reference.

(10)(aa)  Key  Manager  Severance  Plan  filed  as  Exhibit  (10)(w)  to  the
Registrant's  Form  10-K  for  the  year  ended August 31, 2000 and incorporated
herein  by  reference.

(10)(bb)  Letter  Agreement  dated  March 16, 2000 between Jay Alix & Associates
and  the  Company  filed  as  Exhibit (10)(x) to the Company's Form 10-Q for the
three  months  ended  May  31,  2000  and  incorporated  herein  by  reference.

(10)(cc)  Second  Amended  and  Restated  Marketing  and Distribution Agreement,
dated  as  of  March  8,  2001  by  and  between SystemOne Technologies Inc. and
Safety-Kleen  Systems,  Inc.,  a  subsidiary of the Registrant, filed as Exhibit
10.16 to SystemOne Technologies Inc. Form 10-KSB for the year ended December 31,
2000  and  incorporated  herein  by  reference.

(99.1)  Consent  Agreement  and  Final  Order  by  and between the United States
Environmental Protection Agency and Safety-Kleen Corp. and certain of its United
States  subsidiaries  and affiliates filed as Exhibit (99.1) to the Registrant's
Form  10-K  for  the  year  ended  August  31,  2000  and incorporated herein by
reference.

(99.2)  Amended  Consent  Agreement  and  Final  Order by and between the United
States Environmental Protection Agency and Safety-Kleen Corp. and certain of its
United  States  subsidiaries  and  affiliates  as  approved by the United States
Bankruptcy  Court  on  May 16, 2001, filed as Exhibit (99.2) to the Registrant's
Form  10-K/A  for  the  year  ended  August  31, 2000, filed on July 9, 2001 and
incorporated  herein  by  reference.

(b)  Reports  on  Form  8-K:

i.   The Company filed a Current Report on Form 8-K on September 15, 2000, which
     contained Item 5 related to an updated report concerning the Pinewood legal
     proceeding.

ii.  The  Company  filed a Current Report on Form 8-K on October 11, 2000, which
     contained Item 5 related to an updated report concerning the Pinewood legal
     proceeding.

iii. The  Company filed a Current Report on Form 8-K on November 14, 2000, which
     contained Item 5 related to a press release announcing that Safety-Kleen to
     launch  SystemOne  Product  line  for  2001.

iv.  The  Company filed a Current Report on Form 8-K on December 11, 2000, which
     contained  Item  5  related to a press release announcing that Safety-Kleen
     had  reached  an  agreement  with  Indian  Harbor  Insurance Co. to provide
     approximately  $143  million  worth of closure, post-closure and corrective
     action  financial  assurance  for  Safety-Kleen  facilities.

v.   The  Company  filed a Current Report on Form 8-K on February 2, 2001, which
     contained  Item  5 related to three press releases announcing the cessation
     of  operations  at  the  Company's  Hilliard,  Ohio  Wastewater  Treatment
     Facility,  the  Company's  change  in operations at its Coffeyville, Kansas
     facility  and  the  closure  of  the  Company's  Bridgeport,  New  Jersey
     incineration  facility.

vi.  The  Company  filed  a  Current Report on Form 8-K on March 23, 2001, which
     contained  Items  5  and  7  related  to  a  press  release  announcing the
     appointment  of two new directors to the Company's Board of Directors.

vii. The  Company  filed  a  Current  Report  on  Form 8-K on May 3, 2001, which
     contained  Items  5  and  7  related  to  a  press  release  announcing the
     appointment  of  one  new  director  to  the  Company's Board of Directors.


                                      -61-
<PAGE>
                                   SIGNATURES

Pursuant  to  the  requirements  of  the  Securities  Exchange  Act of 1934, the
Registrant  has  duly caused this amendment to report to be signed on its behalf
by  the  undersigned,  thereunto  duly  authorized.

DATE:  September 21, 2001                SAFETY-KLEEN  CORP.

                                         ---------------------------------
                                         (Registrant)


                                         /s/ Larry  W.  Singleton
                                         ---------------------------------
                                         Larry  W.  Singleton
                                         Chief  Financial  Officer


                                      -62-
<PAGE>