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



                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549

                                   FORM 10-Q
                                        
                  QUARTERLY REPORT UNDER SECTION 13 OR 15 (D)
                    OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTER ENDED JUNE 30, 1998                COMMISSION FILE NO. 0-16102


                     EASTERN ENVIRONMENTAL SERVICES, INC.
            (Exact name of Registrant as specified in its charter)


                                   DELAWARE
        (State or other jurisdiction of incorporation or organization)

                                  59-2840783
                     (I.R.S. Employer Identification No.)

            1000 CRAWFORD PLACE, SUITE 400, MOUNT LAUREL, NJ  08054
                   (Address of Principal Executive Offices)

       REGISTRANT'S TELEPHONE NO., INCLUDING AREA CODE:  (609) 235-6009


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


Indicate the number of shares outstanding of each of the issuer's classes of
Common Stock:

          As of August 11, 1998       36,129,103 Shares of Common Stock



================================================================================
<PAGE>
 
                     EASTERN ENVIRONMENTAL SERVICES, INC.

                                   FORM 10-Q
                          QUARTER ENDED JUNE 30, 1998



                                   CONTENTS

                                                                            PAGE

PART I - FINANCIAL INFORMATION

Item 1 - Financial Statements
 
   Condensed Consolidated Balance Sheets - June 30, 1998                     2
     and December 31, 1997 (Restated)
 
   Condensed Consolidated Statements of Operations for the three             4
     months ended June 30, 1998 and 1997 (Restated)
 
   Condensed Consolidated Statements of Operations for the six               5
     months ended June 30, 1998 and 1997 (Restated)
 
   Condensed Consolidated Statement of Stockholders' Equity                  6
     for the six months ended June 30, 1998
 
   Condensed Consolidated Statements of Cash Flows for the                   7
     six months ended June 30, 1998 and 1997 (Restated)
 
   Notes to Condensed Consolidated Financial Statements                      8
 
Item 2 - Management's Discussion and Analysis of                            13
         Financial Condition and Results of Operations
 
PART II - OTHER INFORMATION
 
Item 2 - Changes in Securities                                              18
Item 5 - Other Information                                                  18
Item 6 - Exhibits and Reports on Form 8-K                                   18

                                       1
<PAGE>
 
                        PART I - FINANCIAL INFORMATION
                          ITEM 1 FINANCIAL STATEMENTS

                     EASTERN ENVIRONMENTAL SERVICES, INC.

                     CONDENSED CONSOLIDATED BALANCE SHEETS
                                  (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                                    JUNE 30,       DECEMBER 31,
                                              ASSETS                                                  1998            1997
                                                                                                  -------------    ------------
                                                                                                                    (Restated)
<S>                                                                                               <C>              <C> 
Current assets:
   Cash and cash equivalents                                                                      $141,777,741     $  7,298,606
   Accounts receivable, less allowance for doubtful
     accounts of $4,231,000  and $4,335,000                                                         37,396,549       27,980,376
   Tax refund receivable                                                                             4,726,398        4,726,398
   Deferred income taxes                                                                             4,598,409        2,260,006
   Prepaid expenses and other current assets                                                         9,055,825        5,327,714
                                                                                                  ------------     ------------
 Total current assets                                                                              197,554,922       47,593,100
 
Property and equipment:
   Land                                                                                             14,054,991       12,526,002
   Landfill sites                                                                                  108,589,353       84,979,749
   Buildings and leasehold improvements                                                             19,935,431       13,074,520
   Vehicles                                                                                         63,143,439       53,332,816
   Machinery and equipment                                                                          47,791,381       34,245,731
   Furniture and fixtures                                                                            3,030,929        2,605,735
                                                                                                  ------------     ------------
 Total property and equipment                                                                      256,545,524      200,764,553
 Accumulated depreciation and amortization                                                          62,167,105       50,379,811
                                                                                                  ------------     ------------ 
                                                                                                   194,378,419      150,384,742 
 
 Excess cost over fair market value of net assets acquired,
   net of $3,346,824 and $2,264,824 accumulated amortization                                        96,442,890       67,522,005     

                                                                                                                                    

Other intangible assets, net of $4,286,000 and                                                                                     

   $3,545,000 accumulated amortization                                                             18,685,447       16,086,302     

                                                                                                                                    

Notes receivable from shareholders/officers                                                            442,402          432,902     

                                                                                                                                    

Other assets (including $3,335,000 and $3,248,000 of restricted 
   cash on deposit for landfill closure, insurance bonding and 
   debt service)                                                                                    10,909,023        3,521,649 
                                                                                                  ------------     ------------ 
TOTAL ASSETS                                                                                      $518,413,103     $285,540,700
                                                                                                  ============     ============
</TABLE>

                                       2
<PAGE>
 
<TABLE>
<CAPTION>
                                                              JUNE 30,          DECEMBER 31,
          LIABILITIES AND STOCKHOLDERS' EQUITY                  1998               1997
                                                            ----------          ------------  
                                                                                 (Restated)
<S>                                                         <C>                 <C>  
Current liabilities:
 Accounts payable                                           $ 21,869,812        $ 11,916,759   
 Accrued expenses and other current liabilities               20,131,752          16,049,049   
 Income taxes payable                                          4,574,028              97,323   
 Current portion of accrued landfill closure and other                                         
    environmental costs                                        2,381,369           2,278,000
 Current portion of long-term debt                             5,776,506           6,262,430   
 Current portion of capital lease obligations                    971,697           1,238,789   
 Notes payable to shareholders                                   706,474             873,871   
 Deferred revenue                                              4,756,087           4,248,990   
                                                            ------------        ------------  
Total current liabilities                                     61,167,725          42,965,211    
 
Deferred income taxes                                          8,256,883           3,927,658
Long-term debt, net of current portion                        47,936,382          69,064,830
Capital lease obligations, net of current portion                836,080           1,258,993
Accrued landfill closure and other environmental costs        17,770,846          11,772,644
Other liabilities                                             16,963,542          13,221,023
 
Stockholders' equity:
 Common stock, $.01 par value:
   Authorized shares - 150,000,000
   Issued and outstanding shares 36,135,274 and 26,762,963       361,353             267,629
 Additional paid-in capital                                  350,139,867         136,316,660
 Retained earnings                                            15,056,684           6,822,311 
                                                            ------------        ------------   
                                                             365,557,904         143,406,600
 Less treasury stock at cost - 39,100 common shares              (76,259)            (76,259)
                                                            ------------        ------------      
Total stockholders' equity                                   365,481,645         143,330,341 
                                                            ------------        ------------      
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                  $518,413,103        $285,540,700
                                                            ============        ============
</TABLE>

See accompanying notes.

                                       3
<PAGE>
 
                     EASTERN ENVIRONMENTAL SERVICES, INC.

                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                  (UNAUDITED)

<TABLE>
<CAPTION>
                                                       THREE MONTHS ENDED     
                                                            JUNE 30,         
                                                  -----------------------------
                                                      1998             1997    
                                                  ------------     ------------
                                                                     (Restated)
<S>                                               <C>              <C>         
Revenues                                          $ 69,968,115     $ 53,150,048 
Cost of revenues                                    42,464,237       36,815,178 
Selling, general and administrative expenses         8,273,638        7,818,352 
Depreciation and amortization                        5,465,603        2,881,332 
Merger costs                                         2,056,000               -- 
                                                  ------------     ------------
                                                                               
Operating income                                    11,708,637        5,635,186 
                                                                               
Interest expense, net                                 (586,405)      (1,582,206)
Other income (expense)                                 474,369         (129,303)
                                                  ------------     ------------
Income before income taxes                          11,596,601        3,923,677
                                                                               
Income tax expense                                   5,134,000          634,305
                                                  ------------     ------------
                                                                               
Net income                                        $  6,462,601     $  3,289,372
                                                  ============     ============
                                                                               
Basic earnings per share                          $        .21     $        .17
                                                  ============     ============
                                                                               
Weighted average number of shares outstanding       30,638,660       19,601,272
                                                  ============     ============
                                                                               
Diluted earnings per share                        $        .20     $        .16
                                                  ============     ============
                                                                               
Weighted average number of shares outstanding       32,177,913       20,893,307
                                                  ============     ============ 
</TABLE>

See accompanying notes.

                                       4
<PAGE>
 
                     EASTERN ENVIRONMENTAL SERVICES, INC.

                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                  (UNAUDITED)

<TABLE>
<CAPTION>
                                                       SIX MONTHS ENDED       
                                                           JUNE 30,           
                                                ------------------------------
                                                    1998              1997    
                                                -------------     ------------ 
                                                                   (Restated)
<S>                                             <C>               <C>         
Revenues                                        $ 132,753,198     $ 94,593,966
Cost of revenues                                   81,958,945       64,659,393
Selling, general and administrative expenses       16,841,343       14,975,651
Depreciation and amortization                      10,017,363        5,311,776
Merger costs                                        3,816,000        1,480,452
                                                -------------     ------------ 
                                                                              
Operating income                                   20,119,547        8,166,694
                                                                              
Interest expense, net                              (1,932,546)      (2,870,245)
Other income                                          472,271          411,731 
                                                -------------     ------------ 
Income before income taxes                         18,659,272        5,708,180 
                                                                               
Income tax expense                                  9,909,172        1,102,730 
                                                -------------     ------------ 
                                                                               
Net income                                      $   8,750,100     $  4,605,450 
                                                =============     ============ 
                                                                               
Basic earnings per share                        $         .30     $        .24 
                                                =============     ============ 
                                                                               
Weighted average number of shares outstanding      28,820,261       19,065,147 
                                                =============     ============ 
                                                                               
Diluted earnings per share                      $         .29     $        .23 
                                                =============     ============ 
                                                                               
Weighted average number of shares outstanding      30,333,763       20,254,246 
                                                =============     ============ 
</TABLE>

See accompanying notes.

                                       5
<PAGE>
 
                     EASTERN ENVIRONMENTAL SERVICES, INC.

           CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
                                  (UNAUDITED)

<TABLE>
<CAPTION>
                                                        ADDITIONAL                                                    
                                          COMMON         PAID-IN            RETAINED         TREASURY                     
                                           STOCK         CAPITAL            EARNINGS          STOCK            TOTAL          
                                          ---------    -------------       ------------      -----------    -------------     
<S>                                       <C>          <C>                 <C>               <C>            <C>               
                                                                                                                              
Balance at                                                                                                                    
 December 31, 1997 (Restated)............  $267,629     $136,316,660        $ 6,822,311       $(76,259)      $143.330,341     
                                                                                                                              
Exercise of common stock                                                                                                      
 options and warrants....................     2,424          998,481                                            1,000,905     
                                                                                                                              
Proceeds from sale of 8,125,000                                                                                               
 shares of common stock, less                                                                                                 
 commissions and issuance expenses of                                                                                         
 $12,300,639.............................    81,250      201,914,986                                          201,996,236     
                                                                                                                              
Common stock issued in                                                                                                        
 purchase acquisitions...................     5,472        9,615,822                                            9,621,294     
                                                                                                                              
Common stock issued for acquisitions                                                                                          
accounted for as poolings of interest....     4,254          463,082                                              467,336     
                                                                                                                              
Transactions of pooled companies.........                                       660,298                           660,298     
                                                                                                                              
Dividends paid to former                                                                                                      
 stockholders of pooled companies........                                    (1,176,025)                       (1,176,025)    
                                                                                                                              
Common stock issued for land.............        56          104,944                                              105,000     
                                                                                                                              
Common stock issued to satisfy debt                                                                                           
 obligation..............................       268          725,892                                              726,160     
                                                                                                                              
Net income...............................                                     8,750,100                         8,750,100     
                                          ---------    -------------       ------------      ----------     -------------     
Balance at June 30, 1998................   $361,353     $350,139,867        $15,056,684       $(76,259)      $365,481,645     
                                          =========    =============       ============      ==========     =============      
</TABLE>

See accompanying notes.

                                       6
<PAGE>
 
                     EASTERN ENVIRONMENTAL SERVICES, INC.

                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                 SIX MONTHS ENDED
                                                                                      JUNE 30,
                                                                           ---------------------------
                                                                               1998            1997
                                                                           -----------     -----------
                                                                                            (Restated)
<S>                                                                      <C>             <C>
OPERATING ACTIVITIES
Net income                                                                $  8,750,100     $  4,605,450 
Adjustments to reconcile net income                                                                     
 to net cash provided by operating activities:                                                          
     Depreciation and amortization                                          10,017,363        5,311,776 
     Provision for losses on receivables                                     1,222,941          337,025 
     Landfill closure costs                                                    817,469          350,858 
     Non-cash compensation                                                          --           45,000 
     Deferred income taxes                                                   2,873,827          263,294 
     Gain on sale of property and equipment                                   (101,423)        (466,829)
     Changes in operating assets and liabilities:                                                       
       Accounts receivable                                                  (8,395,206)      (5,307,345)
       Accounts payable                                                      4,772,744          911,032 
       Accrued expenses                                                     (1,465,604)      (1,161,945)
       Income taxes                                                          3,877,108          882,380 
       Deferred revenue                                                        260,127        1,541,659 
       Prepaid expenses and other current assets                            (1,820,417)        (542,926)
       Other                                                                (6,580,734)        (348,620)
                                                                           ------------    ------------ 
Net cash provided by operating activities                                   14,228,295        6,420,809 
                                                                                                        
INVESTING ACTIVITIES                                                                                    
Acquisition of businesses, net of cash acquired                            (22,580,077)      (5,027,635)
Proceeds from sale of property and equipment                                   514,702          447,517 
Development of landfill sites                                              (13,123,782)      (3,790,328)
Purchase of property and equipment                                         (14,306,855)      (6,549,002)
Payments for intangibles                                                    (1,274,275)      (2,142,110)
Landfill closure and insurance bonding deposits                               (446,418)          84,908 
Other, net                                                                          --          473,305 
                                                                           ------------    ------------ 
Net cash used in investing activities                                      (51,216,705)     (16,503,345)
                                                                                                        
FINANCING ACTIVITIES                                                                                    
Proceeds from revolving line of credit, long-term debt                                                  
  and capital lease obligations                                             33,758,371       29,040,107 
Payments on revolving line of credit, long-term debt                                                    
  and capital lease obligations                                            (63,944,545)     (20,453,228)
Proceeds from issuance of common stock, net of expenses and commissions    202,997,141          164,810 
Net (payments) borrowings on note payable                                                               
  to shareholder                                                              (167,397)          59,407 
Cash dividends paid to former stockholders of                                                           
  pooled companies                                                          (1,176,025)        (683,595)
                                                                           ------------    ------------ 
Net cash provided by financing activities                                  171,467,545        8,127,501 
                                                                           ------------    ------------ 
Net increase (decrease) in cash and cash equivalents                       134,479,135       (1,955,035)
Cash and cash equivalents at beginning of period                             7,298,606        7,845,160 
                                                                           ------------    ------------ 
Cash and cash equivalents at end of period                                $141,777,741     $  5,890,125 
                                                                           ============    ============  
</TABLE>

See accompanying notes.

                                       7
<PAGE>
 
                     EASTERN ENVIRONMENTAL SERVICES, INC.

             NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (UNAUDITED)

1.   BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION

The accompanying unaudited condensed consolidated financial statements include
the accounts of Eastern Environmental Services, Inc. and its wholly owned
subsidiaries (the "Company"). All significant intercompany accounts and
transactions have been eliminated in consolidation. These condensed consolidated
financial statements reflect all adjustments (consisting of normal recurring
accruals), which in the opinion of management, are necessary for a fair
presentation of results of operations for the interim periods presented. The
Company has restated the previously issued financial statements for the three
and six months ended June 30, 1997 to reflect the merger on June 26, 1998 with
All Waste Systems, Inc., ARB Enterprises, Inc., Northern Recycling, Inc., and
All Waste Recycling, Inc. (collectively, "All Waste" or the "All Waste
Companies") and the merger with Ulster County Sanitation, Inc., Ulster County
Rolloff, Inc., Art Sperl Disposal, L.L.C., Edgemere Development, Inc., and
Regional Recycling, Inc. (collectively, "Ulster" or the "Ulster Companies") on
June 26, 1998. Additionally, the balance sheet at December 31, 1997 has been
restated to reflect the All Waste and Ulster mergers. The results of operations
for the three and six month periods ended June 30, 1998 are not necessarily
indicative of the operating results for the full year. Certain information and
footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been condensed or
omitted. These interim financial statements should be read in conjunction with
the audited financial statements and notes contained in the Company's Annual
Report on Form 10-K for the year ended June 30, 1997 and the Company's
Transition Period Report on Form 10-K from July 1, 1997 to December 31, 1997.

On April 1, 1998, the Company's Board of Directors resolved to change the
Company's fiscal year end from June 30 to December 31; accordingly, the
condensed consolidated financial information included herein is for the three
month and six month periods ended June 30, 1998 and 1997. The Company filed a
transition report on Form 10-K for the period ended December 31, 1997.

2.   SIGNIFICANT ACCOUNTING POLICIES

In 1997, the Financial Accounting Standards Board issued Statement of Financial
Accounting Standards No. 128, Earnings Per Share ("Statement 128"). Statement
128 replaced the previously reported primary and fully diluted earnings per
share with basic and diluted earnings per share. Unlike primary earnings per
share, basic earnings per share excludes any dilutive effects of options,
warrants, and convertible securities. Diluted earnings per share is very similar
to the previously reported fully diluted earnings per share. All earnings per
share amounts for all periods have been presented, and where necessary, restated
to conform to the Statement 128 requirements.

In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 130, Reporting Comprehensive Income
("Statement 130"). Statement 130 establishes standards for reporting and
presentation of comprehensive income and its components. Comprehensive income is
defined as the change in equity of a business enterprise during a period from
transactions and other events and circumstances from nonowner sources and
includes all changes in equity during a period except those resulting from
investments by owners and distributions to owners. The Company adopted statement
130 effective January 1, 1998 and there was no effect on the Company's financial
statements upon adoption.

In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 131, Disclosures about Segments of an
Enterprise and Related Information ("Statement 131"). Statement 131 establishes
standards for reporting information about operating segments in annual financial
statements that requires that those enterprises report selected information
about operating segments in the interim financial reports issued to
shareholders. Statement 131 is effective for fiscal years beginning after
December 15, 1997. Adoption is not required for interim periods in the initial
year of application. The Company believes that the adoption of Statement 131
will not have a material effect on the Company's Financial Statements.

                                       8
<PAGE>
 
3.   BUSINESS COMBINATIONS

From July 2, 1996 to June 30, 1998, the Company expanded its waste collection
and hauling operations through the acquisition of 50 businesses. The aggregate
of these business acquisitions is significant to the company. Thirty-five of the
50 acquisitions completed were accounted for using the purchase method of
accounting. Accordingly, assets acquired and liabilities assumed have been
recorded at their estimated fair values at the dates of acquisition and their
results of operations are included in the accompanying condensed consolidated
statements of operations since the date of acquisition. The excess of purchase
price over the estimated fair market value of identifiable net assets acquired
is being amortized on a straight-line basis over forty years from the date of
acquisition. The purchase price allocations are based on preliminary estimates
as of the acquisition dates and are finalized within one year from the date of
acquisition.

ACQUISITIONS ACCOUNTED FOR UNDER THE PURCHASE METHOD

On January 1, 1998, the Company acquired substantially all the assets of Lake
Region Sanitation in exchange for cash consideration of $60,000. This
transaction has been accounted for using the purchase method of accounting.

On January 7, 1998, the Company acquired substantially all the assets of J.
Scerbo Company, Recycling Center of New Jersey, Golden Gate Carting Co., Inc.,
Haulaway, Inc., and S.R.S. Recycling in exchange for 112,437 unregistered shares
of the Company's common stock and approximately $4.3 million of cash. The assets
consisted primarily of vehicles, containers, and customer lists. These
transactions have been accounted for using the purchase method of accounting.

On January 16, 1998, the Company acquired substantially all the assets of
Minchoff Sanitation in exchange for cash consideration of $650,000. The assets
consisted primarily of vehicles, containers, and customer lists. This
transaction has been accounted for using the purchase method of accounting.

On February 12, 1998, the Company acquired Kelly Run Sanitation, Inc. ("Kelly
Run Landfill") from USA Waste Services, Inc. Consideration under the agreement
consisted of 250,000 unregistered shares of common stock of the Company in
exchange for all the issued and outstanding shares of Kelly Run Landfill. This
transaction has been accounted for using the purchase method of accounting.

On February 24, 1998, the Company acquired the assets of Red Ball Sanitation
Corp. in exchange for 130,000 unregistered shares of the Company's common stock
and cash consideration of $500,000. The assets consisted primarily of vehicles,
containers, and customer lists. This transaction has been accounted for using
the purchase method of accounting.

On May 26, 1998, the Company acquired substantially all the assets of Kimmins
Corp., Transcor Waste Services, Inc., and Kimmins Recycling Corp. (collectively,
"Kimmins") in exchange for cash of approximately $11.6 million. The assets
consisted primarily of vehicles, containers, and customer lists. This
transaction has been accounted for using the purchase method of accounting.

On June 26, 1998, the Company acquired substantially all the assets of Vonger
Sanitation in exchange for cash of $4.2 million, and assumed debt of $47,000.
This transaction has been accounted for using the purchase method of accounting.

From April 1, 1998 to June 30, 1998, the Company acquired the assets of eight
other "tuck-in" collection operations in separate transactions. Total
consideration under the agreements consisted of approximately $4.3 million of
cash, approximately 90,000 shares of the Company's common stock and the
assumption of $124,000 of debt. These eight transactions were accounted for
using the purchase method of accounting.

                                       9
<PAGE>
 
ACQUISITION ACCOUNTED FOR UNDER THE POOLING OF INTERESTS METHOD

On March 9, 1998, the Company completed its merger with Bluegrass and 198,224
unregistered shares of the Company's common stock were issued in exchange for
all the outstanding stock of Bluegrass. Bluegrass owns and operates a landfill
in Louisville, Kentucky. The transaction has been accounted for using the
pooling of interests method of accounting, and accordingly, the accompanying
financial statements include the accounts of Bluegrass for all periods
presented.

On March 31,1998, the Company completed its merger with the Ecology Companies
and 155,665 unregistered shares of the Company's common stock were issued in
exchange for all the outstanding stock of the Ecology Companies. The Ecology
Companies operate a hauling operation located in Lyndhurst, New Jersey. The
transaction has been accounted for using the pooling of interests method of
accounting, and accordingly, the accompanying financial statements include the
accounts of the Ecology Companies for all periods presented.

On March 31, 1998, the Company completed its merger with the Stamato Companies
and 1,386,344 shares of the Company's common stock were issued in exchange for
all the outstanding stock of the Stamato Companies. The Stamato Companies
provide municipal solid waste collection services in New Jersey. The transaction
has been accounted for using the pooling of interests method of accounting, and
accordingly, the accompanying financial statements include the accounts of the
Stamato Companies for all periods presented.

On June 26, 1998, the Company completed its merger with the All Waste Companies
and 1,696,058 shares of common stock of the Company were issued in exchange for
all outstanding shares of the All Waste Companies. The All Waste Companies
provide collection services to commercial and residential customers in southern
New York and operate a municipal solid waste transfer station in Goshen, New
York. The transaction has been accounted for using the pooling of interests
method of accounting; and accordingly, the accompanying consolidated financial
statements include the accounts of the All Waste Companies for all periods
presented.

Also on June 26, 1998, the Company completed its merger with the Ulster
Companies and 335,140 shares of common stock of the Company were issued in
exchange for all outstanding shares of the Ulster Companies. The Ulster
Companies provide collection services to commercial and residential customers in
southern New York and operate a municipal solid waste transfer station in
Kingston, New York. The transaction has been accounted for using the pooling of
interests method of accounting; and accordingly, the accompanying consolidated
financial statements include the accounts of the Ulster Companies for all
periods presented.

From April 1, 1998 to June 30, 1998, the Company completed merger transactions
with five additional companies and 425,478 shares of common stock of the Company
were issued in exchange for all outstanding shares of those companies. The
companies operate municipal solid waste collection and hauling operations in
eastern and central Pennsylvania and a municipal solid waste landfill in
southern Georgia. These transactions have been accounted for using the pooling
of interests method. Periods prior to the consummation of the mergers were not
restated to include the accounts and operations of these companies as combined
results are not materially different from the results as presented.

                                      10
<PAGE>
 
The combined and separate results of operations of the Company, Hamm's,
Bluegrass, Stamato, Ecology, All Waste and Ulster for the six months ended June
30, 1998 and 1997 were as follows:

<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30, 1998
 
                                          Revenues     Net Income
                                        ------------  ------------
<S>                                     <C>           <C>          
Eastern Environmental Services, Inc.    $ 80,461,661  $5,310,166
Hamm's                                     7,669,812   1,325,868   (1)
Bluegrass                                  1,002,627     298,476   (1)
Stamato                                   12,494,935     300,780   (1)
Ecology                                   14,227,463     817,604   (1)
All Waste                                 11,845,701     386,162   (1)
Ulster                                     5,050,999     311,044   (1)
                                        ------------  ------------ 
Combined                                $132,753,198  $8,750,100
                                        ============  ============
 
SIX MONTHS ENDED JUNE 30, 1997
 
                                          Revenues     Net Income
                                        ------------  ------------
Eastern Environmental Services, Inc.    $ 46,267,397  $2,709,591
Hamm's                                     7,979,678     199,803   (1)
Bluegrass                                  1,016,273     351,467   (1)
Stamato                                   11,938,386   1,192,932   (1)
Ecology                                   12,619,982     204,420   (1)
All Waste                                 10,135,992    (161,605)  (1)
Ulster                                     4,636,258     108,842   (1)
                                        ------------  ------------
Combined                                $ 94,593,966  $4,605,450
                                        ============  ============
</TABLE>

(1) Includes merger costs and related tax provision.

4.   USE OF ESTIMATES

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements. Actual results could
differ from those estimates. Such estimates include the Company's accounting for
closure and post-closure obligations; amortization of landfill development
costs; and estimates of reserves such as the allowance for doubtful accounts
receivable, and the Company's estimate of merger costs.

5.   INCOME TAXES

The Company recorded a tax provision of $9.9 million for the six months ended
June 30, 1998. This provision is comprised of $7.5 million of federal and state
taxes at statutory rates, and a $2.4 million one-time net tax expense related to
non-deductible merger costs, the establishment of deferred income tax
liabilities and the benefit of pre-pooling income taxed as S Corporations, for
pooled companies acquired during the six months ended June 30, 1998. The

                                      11
<PAGE>
 
tax provision at June 30, 1997 principally relates to the recording of deferred
income tax liabilities for pooled companies acquired during the six months ended
June 30, 1997 which were S Corporations prior to the date of the merger, as well
as the recording of federal and state liabilities for other pooled companies. An
effective tax rate lower than the federal and state statutory rate for the six
months ended June 30, 1997 is primarily due to the use of net operating loss
carryforwards and income from pooled companies which were taxed as S
Corporations.



6.    EARNINGS PER SHARE

The following table sets forth the computation of basic and diluted earnings per
share:

<TABLE>
<CAPTION>
                                                              3 Months Ended                    6 Months Ended                  
                                                       -----------------------------      ----------------------------          
<S>                                                    <C>                <C>             <C>            <C>                    
                                                           6/30/98          6/30/97         6/30/98         6/30/97                
                                                       ---------------    -----------     -----------    -------------          
Numerator:                                                                                                                      
 Net income                                              $ 6,462,601      $ 3,289,372     $ 8,750,100    $ 4,605,450            
                                                       ===============    ===========     ============   =============          
                                                                                                                                
Denominator:                                                                                                                    
 Denominator for basic earnings                                                                                                 
  per share - weighted average shares                     30,638,660       19,601,272      28,820,261     19,065,147            
 Effect of dilutive options and warrants                   1,539,253        1,292,035       1,513,502      1,189,099            
                                                       ---------------     -----------     -----------   -------------          
Denominator for diluted earnings per share                32,177,913       20,893,307      30,333,763     20,254,246            
                                                       ===============    ===========     ============   =============          
Basic earnings per share                                 $       .21      $       .17     $       .30    $       .24            
                                                       ===============    ===========     ============   =============          
Diluted earnings per share                               $       .20      $       .16     $       .29    $       .23            
                                                       ===============    ===========     ============   =============           
</TABLE>

7.   SUBSEQUENT EVENTS


On July 17, 1998, the Company acquired the City of Bethlehem Landfill (the
"Bethlehem Landfill") from the City of Bethlehem, Pennsylvania for an aggregate
purchase price of $26.1 million in cash.

On July 23, 1998, the Company acquired Atlantic Waste Disposal, Inc. ("AWD") and
Atlantic New York, Inc. ("Atlantic") from Brambles USA for an aggregate purchase
price of $91.0 million.  AWD owns a Subtitle D landfill in Waverly, Virginia,
and Atlantic is a Brooklyn, New York transfer station.  This transaction will be
accounted for using the purchase method of accounting.

Subsequent to June 30, 1998, the Company also acquired the assets of Berkely
Carting Corp.  Consideration under the agreements consisted of 34,980
shares of common stock of the Company in exchange for all the issued and
outstanding shares of Berkely Carting Corp.  This transaction will be accounted
for using the purchase method of accounting.

Also subsequent to June 30, 1998, the Company entered into a merger agreement
with the shareholders of the Savino Companies.  This transaction is subject to
customary due diligence procedures and certain federal and state regulatory
approvals.  Total consideration under the agreement consists of approximately
$15 million of common stock of the Company and the assumption of approximately
$14 million of debt in exchange for all issued and outstanding stock of the
Savino Companies.  The Savino Companies provide collection services to
commercial and residential customers in several northern New Jersey counties.
This transaction is expected to be accounted for as a pooling of interests.

                                       12
<PAGE>
 
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

     RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 1998 COMPARED TO
                      THE SIX MONTHS ENDED JUNE 30, 1997.
                                 

REVENUES

The Company is a non-hazardous solid waste management company specializing in
the collection, transportation, and disposal of residential, industrial,
commercial, and special waste, principally in the eastern United States. The
Company's revenues for the six months ended June 30, 1998 were comprised of
approximately 82% solid waste collection and transportation operations,
approximately 13% solid waste disposal operations, and approximately 5% other
waste management services.

The Company's solid waste collection operations earn revenues from fees
collected from residential, commercial, and industrial collection and transfer
station customers. Solid waste collection is provided under two primary types of
arrangements depending on the customers being served. Collection services for
commercial and industrial customers are generally performed under one to three
year service agreements. Collection services for residential customers generally
are performed under contracts with, or franchises granted by, municipalities or
regional authorities that grant the Company rights to service all or a portion
of the residents in their jurisdictions, except in rural areas where the Company
usually contracts directly with the customer. Such contracts or franchises
generally range in duration from one to three years. Recently, some
municipalities have bid their residential collection contracts based on the
volume of waste collected versus the number of households serviced. Residential
collection fees are either paid by the municipalities out of tax revenues or
service charges or paid directly by residents receiving the services.

As part of its solid waste collection operations, the Company's ten owned or
operated transfer stations receive solid waste collected primarily by its
various collection operations, compact the waste and transfer it to larger
vehicles for transport to landfills. This procedure reduces the Company's costs
by improving its use of collection personnel and equipment.

The Company's solid waste landfills earn revenues from disposal fees charged to
third parties and from disposal fees charged to the Company's collection and
transportation operations that dispose of solid waste at the Company's
landfills. These landfills receive solid waste from the Company's own collection
companies and transfer stations, as well as from independent collection
operators. For the six months ended June 30, 1998, approximately 53% of the
Company's volume of waste generated from its collection operations was delivered
for disposal at its own landfills, and approximately 40% of the Company's volume
received at its landfill disposal operations was delivered by the Company.

The Company's prices for solid waste collection, transportation, and disposal
services are typically determined by the volume, weight, or type of waste
collected, as well as other factors including the competitive pricing
environment. The Company's ability to pass on cost increases may be limited by
the terms of its contracts.

COST OF REVENUES

Cost of revenues consists primarily of tipping fees paid to third party
landfills, accruals for future landfill closure and post-closure costs, direct
labor and related taxes and benefits, subcontracted transportation and equipment
rental charges, maintenance and repairs of equipment and facilities,
environmental compliance costs and site maintenance costs for landfills, fuel,
and landfill assessment fees and taxes.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

                                       13
<PAGE>
 
Selling, general and administrative expenses consist primarily of management,
clerical and administrative salaries and costs and overhead, professional
services, facility rentals and associated costs, financial assurance bonding
premiums, and costs relating to marketing and sales.

The Company capitalizes direct incremental costs associated with purchase
acquisitions. Indirect development and acquisition costs, such as executive
salaries, corporate overhead, public relations, and other corporate services and
overhead are expensed as incurred. The Company also charges as an expense any
unamortized capitalized expenditures relating to proposed acquisitions that will
not be consummated.

At June 30, 1998, capitalized costs related directly to proposed acquisitions
that were not yet consummated were approximately $2.4 million.  The Company
periodically reviews the future realization of these capitalized project costs
and makes provisions against capitalized costs that are associated with projects
that are not likely to be completed.

DEPRECIATION AND AMORTIZATION

Depreciation and amortization consists primarily of depreciation of buildings,
vehicles, and machinery and equipment, amortization of capitalized direct
landfill development costs, and amortization expense related to intangible
assets including goodwill. Property and equipment is depreciated over the
estimated useful lives of the assets using the straight line method. Intangible
assets, including goodwill, are amortized over their useful lives using the
straight line method.

Certain direct engineering, legal, permitting, construction, and other costs
associated with expansion of landfills, together with related interest costs,
are capitalized and are amortized over the estimated useful life of the site
using the unit of production method as airspace is consumed. Successful
permitting of additional landfill disposal capacity improves the Company's
profitability by increasing the airspace over which the Company may amortize
capitalized costs of the landfill. At June 30, 1998, capitalized costs related
directly to the acquisition and expansion of existing and future landfills and
cell development were $108.6 million.

The Company's policy is to charge as an expense any unamortized capitalized
expenditures and advances relating to any landfill that is permanently closed or
any landfill expansion project that is abandoned.

MERGER COSTS

Merger costs include transaction related expenses, contractual costs, severance 
and other termination benefits and certain transition costs related to 
integrating operations incurred in connection with acquisitions accounted for 
under the pooling of interests method.

OTHER (EXPENSE) INCOME

Other income and expense, which includes gains and losses on the sale of
equipment, has not historically been material to the Company's results of
operations.

TAXES

The Company recorded a tax provision of $9.9 million for the six months ended
June 30, 1998. This provision is comprised of $7.5 million of federal and state
taxes at statutory rates, and a $2.4 million one-time net tax expense related to
non-deductible merger costs, the establishment of deferred income tax
liabilities and the benefit of pre-pooling income taxed as S Corporations for
pooled companies acquired during the six months ended June 30, 1998. The tax
provision at June 30, 1997 principally relates to the recording of deferred
income tax liabilities for pooled companies acquired during the six months ended
June 30, 1997 which were S Corporations prior to the date of the merger, as well
as the recording of federal and state liabilities for other pooled companies. An
effective tax rate lower than the federal and state statutory rate for the
six months ended June 30, 1997 is primarily due to the use of net operating loss
carryforwards and income from pooled companies which were taxed as S
Corporations.

                                       14
<PAGE>
 
The following table presents the percentage each item in the consolidated
statements of operations bears to total revenues

 .
<TABLE>
<CAPTION>
                                                                          
                                                            SIX MONTHS ENDED   
                                                                 JUNE 30,      
                                                          -------------------  
                                                             1998      1997    
                                                          -------------------  
                                                                    (RESTATED) 
             <S>                                          <C>       <C>     
             Revenues                                        100.0%      100.0%
                                                                               
             Cost of revenues                                 61.7        68.4 

             Selling, general and administrative expenses     12.7        15.8 
             
             Depreciation and amortization                     7.5         5.6 
             
             Merger costs                                      2.9         1.6 
                                                          ----------------------
                                                                               
             Operating income                                 15.2         8.6  
             
             Interest expense, net                            (1.5)       (3.0)
                                                                               
             Other income (expense)                            0.4         0.4 
                                                          ----------------------
                                                                                
             Income before income taxes                       14.1         6.0  
             
             Income tax expense                                7.5         1.1  
                                                          ----------------------
             Net income                                        6.6%        4.9%
</TABLE>                                                  ======================

Revenues for the six months ended June 30, 1998 were $132.8 million compared to
$94.6 million for the six months ended June 30, 1997, an increase of $38.2
million, or 40.4%. The principal factor affecting the increase in revenues was
the impact of acquisitions accounted for as purchases made in the past twelve
months, primarily consisting of Pappy, Inc., Pine Grove, Inc., Kelly Run
Sanitation, Inc. and several solid waste collection companies in the New York,
New Jersey and Florida markets, which contributed aggregate revenues of $35.6
million for the six months ended June 30, 1998 as compared to $5.3 million for
the six months ended June 30, 1997. The acquisitions accounted for as poolings
of interests (Super Kwik, Apex, Donno, Hamm's, Bluegrass, Stamato, Ecology, All
Waste and Ulster) contributed revenues of $82.1 million for the six months ended
June 30, 1998 compared to $74.8 million for the same period in 1997, an increase
of $7.3 million. An additional $5.9 million of revenue was generated in the six
months ended June 30, 1998 from two transfer stations which were not in
operation during the six months ended June 30, 1997.

Cost of revenues for the six months ended June 30, 1998, were $82.0 million
compared to $64.7 million for the six months ended June 30, 1997, an increase of
$17.3 million. Cost of revenues as a percentage of revenues for the six months
ended June 30, 1998, was 61.7 % compared to 68.4% for the same period in 1997.
This decrease in percentage was primarily due to (1) the acquisition by the
Company of five landfills, which operate at higher margins than the Company's
other operations, (2) economies of scale relating to the Company's increase in
size over the period, and (3) operating efficiencies.

Selling, general, and administrative expenses for the six months ended June 30,
1998, were $16.8 million compared to $15.0 million for the six months ended June
30, 1997, an increase of $1.8 million or 12.0%. These expenses as a percentage
of revenues for the six months ended June 30, 1998, were 12.7 % compared to
15.8% for the same period in 1997. The decrease as a percentage of revenues
reflects the elimination of redundant overhead as acquisitions in certain
geographic areas are consolidated, as well as certain cost controls placed on
previously private pooled companies. This decrease was partially offset by the
increased infrastructure, including accounting, finance, legal and
administration, necessary to integrate the acquisitions consummated.

Depreciation and amortization totaled $10.0 million, or 7.5 % of revenues, for
the six months ended June 30, 1998, versus $5.3 million, or 5.6% of revenues,
for the same period in 1997. This increase was primarily due to increased
depreciation and landfill amortization as a result of businesses and assets
acquired as well as amortization of goodwill and other intangibles associated
with the acquisitions.

                                       15
<PAGE>
 
Merger costs incurred during the six months ended June 30, 1998, were $3.8
million, related to the acquisitions of Bluegrass, Ecology, Stamato, All Waste,
and Ulster as well as four collection operations in eastern and central
Pennsylvania and the southern Georgia landfill. These acquisitions were
accounted for as poolings of interests. Merger costs for the same period in 1997
were $1.5 million and related to the acquisitions of Donno and Apex, and
included an adjustment related to Super Kwik. The Company determined that
certain transition merger costs, principally related to bringing acquired assets
into conformity with corporate safety and operational standards are more
appropriately recorded as merger costs when incurred. The Company restated the
first quarter of 1998 to reduce merger costs for the six month period ended
June 30, 1998 by approximately $2.2 million before income taxes, which increased
net income reported for the six months ended June 30, 1998 by approximately $1.3
million. The Company expects to incur and record merger costs of similar amounts
relating to these activities in future periods.

The Company recorded a tax provision of $9.9 million for the six months ended
June 30, 1998. This provision is comprised of $7.5 million of federal and state
taxes at statutory rates, and a $2.4 million one-time net tax expense related to
non-deductible merger costs, the establishment of deferred income tax
liabilities and the benefit of pre-pooling income taxed as S Corporations for
pooled companies acquired during the six months ended June 30, 1998. The tax
provision at June 30, 1997 principally relates to the recording of deferred
income tax liabilities for pooled companies acquired during the six months ended
June 30, 1997 which were S Corporations prior to the date of the merger, as well
as the recording of federal and state liabilities for other pooled companies. An
effective tax rate lower than the federal and state statutory rate for the
six months ended June 30, 1997 is primarily due to the use of net operating loss
carryforwards and income from pooled companies which were taxed as S
Corporations.

RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED JUNE 30, 1998 COMPARED TO
THE THREE MONTHS ENDED JUNE 30, 1997

As a result of the factors discussed above, the results of operations for the
three months ended June 30, 1998 compared to the three months ended June 30,
1997, reflects an increase in revenues of $16.8 million.   Additionally, net
income for the three months ended June 30, 1998 was $6.5 million as compared to
$3.3 million for the same period in 1997.

LIQUIDITY AND CAPITAL RESOURCES

The Company's business requires substantial amounts of capital. The Company's
capital requirements include acquisitions, equipment purchases, and capital
expenditures for cell construction and expansion of its landfills. The Company
plans to meet these capital needs from various financing sources, including
borrowings, internally generated funds, and the issuance of common stock.

As of June 30, 1998, the Company had working capital of $136, including cash
and cash equivalents of $142 million.  For the six months ended June 30, 1998,
net cash provided by operations was approximately $14.2 million, net cash
provided by financing activities was approximately $171.5 million and net cash
used in investing activities was approximately $51.2 million resulting in an
increase in cash and cash equivalents of $134.5 million during this period.
Capital expended during the period, included: (1) $22.6 million relating to
acquisitions, (2) $14.3 million for the purchase of operating equipment and real
estate, and (3) $13.1 million related to the permitting and development of
landfill space.

In October 1997, the Company amended its revolving credit facility with
BankBoston, N.A.  to provide for borrowings up to $150 million.  The facility is
available for repayment of debt, funding of acquisitions, working capital, and
for up to $50 million in letters of credit. As of August 11, 1998, approximately
$18.1 million in letters of credit were outstanding under the Credit Facility.
Also, at August 11, 1998, there were $20  million of borrowings under the Credit
Facility.

At the Company's option, the interest rate on any loan under the Credit Facility
may be based on an adjusted prime rate or Eurodollar rate, as defined in the
loan agreement.  On August 11, 1998, the applicable interest rate was 6.375%.
The facility expires on October 2002. The Credit Facility requires the payment
of a commitment fee, payable in arrears, based in part on the unused balance and
provides for certain restrictions on, among other things, the ability of the
Company to incur borrowings, sell assets, acquire assets, make capital
expenditures or pay cash dividends. The facility also requires the maintenance
of certain financial ratios, including interest coverage ratios and balance
sheet and cash flow leverage ratios, and requires profitable operations. The
facility is collateralized by all the stock of the Company's subsidiaries,
whether now owned or hereafter acquired.

In June 1998, the Company completed its registration and sale of 8,625,000
shares, at $26.375 per share, which

                                       16
<PAGE>
 
included the sale of 500,000 shares by selling shareholders and the sale by the
Company of 1,125,000 shares to cover overallotments. Net proceeds to the
Company, after deduction of fees and related costs, were approximately
$202,000,000. The net proceeds of the offering were used to reduce outstanding
debt under the Company's Revolving Credit Agreement by $52 million with the
remainder to be used for future acquisitions, capital expenditures and working
capital. The Company has invested the unused net proceeds in short-term interest
bearing securities.

To date the Company has required substantial amounts of capital and it expects
to continue to expend substantial amounts to support its acquisition program and
the expansion of its disposal and transportation operations. The Company
estimates aggregate capital expenditures, exclusive of acquisitions of
businesses, of approximately $35 million for the year ending December 31, 1998.
The Company has addressed its capital needs through private and public offerings
of Common Stock and by establishing a revolving credit facility. The Company
believes that the revolving credit facility and the funds expected to be
generated from operations, and net proceeds from possible future equity
offerings will provide adequate cash to fund the Company's working capital and
other cash needs for the foreseeable future.

The Company has financial obligations related to closure and post-closure
monitoring and maintenance of the Company's landfills. While the exact amount of
future closure and post-closure obligations cannot be determined, the Company
estimates that the costs of final closure of the currently permitted and
operating areas at the Company's landfills will be approximately $29.3 million,
of which $9.5 million has been accrued as of June 30, 1998. The Company makes
an accrual for these costs based on consumed airspace in relation to
Management's estimate of total available airspace of the landfills. In addition,
the Company has accrued $6.1 million for post-closure obligations as of June
30, 1998.

The Company maintains a bonding facility pursuant to certain statutory
requirements regarding financial assurance for the closure and post-closure
monitoring cost requirements for its Kentucky, West Virginia, Pennsylvania, and
Maryland disposal facilities. Bonds outstanding at June 30, 1998 were $2.2
million for the Kentucky landfills, $214,000 for the West Virginia landfill,
$11.7 million for the Pennsylvania landfills, $220,000 for the Maryland
landfill, and $1.8 million for the Illinois landfill. The bonds are
collateralized by irrevocable letters of credit and trust fund deposits.
Additionally, the Company has on deposit $2.0 million as financial assurance for
landfill closure and post-closure obligations for closed disposal areas. The
trust fund and the certificates of deposit are restricted from current
operations and are included within other noncurrent assets. Additionally, the
Georgia landfill has insurance coverage of $1.1 million in effect for closure
and post closure assurance. The Company's Kentucky landfill bonding requirement
will increase by $3.0 million for closure and $300,000 for post-closure of the
expansion area permitted October 14, 1996 (reissued February 26, 1997). The
Company anticipates that the West Virginia bonding requirements will
substantially increase when West Virginia's solid waste program is approved by
the federal government. Financial assurance requirements could increase to
approximately $3.1 million for closure and $3.7 million for post-closure
monitoring and care. In connection with the Illinois landfill, which the Company
has exercised an option to acquire, the Company has agreed to indemnify a surety
providing financial assurance for closure and post-closure care requirements for
an unlined landfill located adjacent to the Illinois landfill in the amount of
$646,000 in the event the owner of the adjacent landfill defaults on its closure
and/or post-closure care obligations. Additional collateral requirements may be
imposed upon the Company as a result of additional landfill acquisitions or
changes in current regulations which may adversely effect its profitability. The
Company anticipates providing financial assurance incrementally, as permitted by
regulations, over the life of a facility as disposal cells are constructed and
certified for acceptance of waste.

SEASONALITY AND INFLATION

The Company's revenues tend to be somewhat higher in the spring and summer
months. This is primarily attributable to the fact that (i) the volume of waste
relating to construction and demolition activities tends to increase in the
spring and summer months and (ii) the volume of industrial and residential waste
in the regions in which the Company operates tends to decrease during the winter
months. In addition, particularly harsh weather conditions may affect the
Company's operations by interfering with collection, transportation, and
disposal operations, delaying the

                                       17
<PAGE>
 
development of landfill capacity, and/or reducing the volume of waste generated
by the Company's customers.

The Company believes that inflation and changing prices have not had, and are
not expected to have, any material adverse effect on its results of operations
in the near future.

PART II
OTHER INFORMATION

ITEM 2.  CHANGES IN SECURITIES

  (C)      Private Placements:

         On May 14, 1998, the Company acquired through a subsidiary corporation
         the stock of Middle Island Enterprises, Inc. in exchange for 6,863
         unregistered share of the Company's common stock, par value $.01 per
         share, and $225,000 of cash.

         On May 28, 1998, the Company acquired the assets of Sunrise Sanitation,
         Inc. in exchange for 9,852 unregistered shares of the Company's common
         stock, par value $.01 per share, and $50,000 of cash. An additional
         issuance of the Company's common stock of up to $175,000 of
         consideration may be issuable pending the resolution of certain
         contingencies.

         On May 29, 1998, a subsidiary of the Company completed its merger with
         Holgate Brothers, Inc. with 77,296 unregistered shares of the Company's
         common stock, par value $.01 per share, issued in exchange for all
         issued and outstanding shares of Holgate.

         On June 1, 1998, a subsidiary of the Company completed its merger with
         Fidati Refuse Removal, Inc. with 95,345 unregistered shares of the
         Company's common stock, par value $.01 per share, issued in exchange
         for all issued and outstanding shares of Fidati.

         On June 1, 1998, the Company acquired the assets of Manfredi Brothers,
         Inc. J. Marmo Carting Corp. and V&S Carting Corp. in exchange for
         37,877 unregistered shares of the Company's common stock, par value
         $.01 per share. An additional issuance of the Company's common stock of
         up to 25,251 shares may be issuable pending the resolution of certain
         contingencies.

         On June 16, 1998, the Company acquired the stock of Peerless Waste
         Industries, Inc. with 90,357 unregistered shares of the Company's
         common stock, par value $.01 per share, issued in exchange for all
         issued and outstanding shares of Peerless.

         On June 30, 1998, the Company acquired the stock of Summit Transport
         Group, Inc. and Summit Environmental Group, Inc. with 95,000
         unregistered shares of the Company's common stock, par value $.01 per
         share, issued in exchange for all issued and outstanding shares of
         the two companies.

         Under the private placements described above, the Company has agreed
         under certain circumstances to register certain of the shares for the
         above transactions, except for Bluegrass and Kelly Run Sanitation,
         Inc., for resale under the Securities Act of 1933 (the "Act"). The sale
         of the Shares was exempt from the registration provisions of the Act
         pursuant to Section 4(2) of the Act and/or Regulation D promulgated
         under the Act for transactions not involving a public offering, based
         on the fact that the private placements were made to accredited
         investors who had access to financial and other relevant data
         concerning the Company, its financial condition, business and assets.
         The securities sold in the private placements may not be reoffered or
         resold absent registration under the Act or available exemptions from
         such registration requirements.

ITEM 5.  OTHER INFORMATION

         As a result of the Company's change in its fiscal year end from June 30
         to December 31, the Company anticipates that its next Annual Meeting of
         Stockholders will be held on or about May 24, 1999 (the "1999 Annual
         Meeting").

         The deadline for submission of proposals by stockholders pursuant to
         Rule 14a-8 under the Securities Exchange Act of 1934, as amended (the
         "Act"), for inclusion in the proxy statement for the 1999 Annual
         Meeting is December 21, 1998. Any proposals submitted other than
         pursuant to Rule 14a-8 of the Act must be received by the Company no
         later than March 8, 1999 or such proposals will be considered untimely,
         and the Company may confer discretionary voting with respect to such
         matters in its proxy for the 1999 Annual Meeting.



ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

     (a)   Exhibits:

                                       18
<PAGE>
 
          *3.1    Certificate of Incorporation, as amended, of the Company.
                  (Exhibit 3.1 to the Company's Transition Report on Form 10-K
                  for the period July 1, 1997 to December 31, 1997 (the
                  "December 1997 Form 10-K").

          *3.2    By-laws, as amended, of the Company (Exhibit 3.2 to the
                  December 1997 Form 10-K).

          *10.80  Agreement for the Sale and Purchase of Stock of Atlantic Waste
                  Disposal, Inc. dated March 25, 1998, by and among Atlantic
                  Waste Disposal, Inc., Brambles Waste Services, Inc., Atlantic
                  Transportation Services, Inc., Atlantic Collection, Inc.,
                  Resource Products, Inc. and the Registrant. (Exhibit 10.1 to
                  the Company's Current Report on Form 8-K dated April 20, 1998
                  (the "April 20, 1998 Form 8-K")).

          *10.81  Agreement for the Sale and Purchase of Stock of Atlantic New
                  York, Inc. dated March 25, 1998, by and among Atlantic Waste
                  Disposal, Inc., Brambles Waste Services, Inc., Atlantic New
                  York, Inc. and the Registrant. (Exhibit 10.2 to the April 20,
                  1998 Form 8-K).

          *10.82  Stock Purchase Agreement dated June 8, 1998, by and between
                  Eastern Environmental Services, Inc. and the shareholders of
                  All Waste Systems, Inc., ARB Enterprises, Inc., Northern
                  Recycling, Inc., and All Waste Recycling, Inc. (Exhibit 10.1
                  to the Company's Current Report on Form 8-K dated June 26,
                  1998).

          *10.83  Stock Purchase Agreement dated June 8, 1998, by and between
                  Eastern Environmental Services, Inc. and the shareholders of
                  Ulster County Sanitation, Inc., Ulster County Rolloff, Inc.,
                  Art Sperl Disposal, L.L.C., Edgemere Development, Inc., and
                  Regional Recycling, Inc. (Exhibit 10.1 to the Company's
                  Current Report on Form 8-K dated June 26, 1998).

           10.84  Employment Agreement between the Company and Gregory M.
                  Krzemien dated May 15, 1998. /(1)/
               
           10.85  Employment Agreement between the Company and Matthew Paolino
                  dated June 1, 1998 /(1)/.

           27     Financial Data Schedules (Electronic filed only).

                  *       Incorporated by reference.
                  /(1)/   Indicates a management contract or compensation plan
                          or arrangement.

     (b)  Current Reports on Form 8-K or 8-K/A:

          On April 8, 1998, the Company filed a report on Form 8-K/A dated March
          9, 1998, under Item 7 to provide audited financial statements of the
          businesses acquired for the year ended December 31, 1997 and unaudited
          pro forma financial information for the year ended June 30, 1997 and
          the six months ended December 31, 1997 with respect to its acquisition
          of Bluegrass Containment, Inc.

          On April 14, 1998, the Company filed a report on Form 8-K dated April
          1, 1998, under Item 8 to report that at a meeting of the Board of
          Directors of the Registrant held April 1, 1998, the Board of Directors
          resolved to change the Registrant's fiscal year end from June 30 to
          December 31.

          On April 24, 1998, the Company filed a report on Form 8-K/A dated
          March 31, 1998 under Item 7 to provide audited financial statements of
          the businesses acquired for the two years ended December 31, 1997 and
          unaudited pro forma financial information for the year ended June 30,
          1997 and the six months ended December 31, 1997 with respect to its
          acquisition of the Stamato Companies.

          On April 27, 1997, the Company filed a report on Form 8-K/A dated
          February 12, 1998 under Item 7 to report that historical financial
          statements of the businesses acquired and pro forma financial
          information of the Company were not required due to the Kelly Run
          Landfill purchase transaction being below the financial statement
          filing requirements as per applicable regulations under the Securities
          and Exchange Act of 1934.

          On April 29, 1998, the Company filed a report on Form 8-K dated April
          24, 1998 under Item 5 to

                                       19
<PAGE>
 
          file audited supplemental consolidated financial statements and
          selected consolidated financial data (supplemental) and Management's
          Discussion and Analysis of Financial Condition and Results of
          Operations (supplemental), which reflects the acquisition of Bluegrass
          Containment, Inc. on March 9, 1998, the Stamato Companies on March 31,
          1998 and the Ecology Companies on March 31, 1998.

          On April 30, 1998, the Company filed a report on Form 8-K dated April
          20, 1998 under Item 2 to report the pending acquisition of Atlantic
          Waste Disposal, Inc. Financial statements of Atlantic Waste Disposal,
          Inc. and pro forma financial information of the Company required under
          "Item 7: Financial Statements and Exhibits" were filed on Form 8-K/A
          on May 20, 1998.

          On May 8, 1998, the Company filed a report on Form 8-K dated May 1,
          1998 under Item 5 to report that the Board of Directors unanimously
          approved an amendment to the Company's by-laws increasing the size of
          the Board of Directors from three to five directors and that the
          vacancies were filled by Matthew J. Paolino and Constantine N.
          Papadakis.

          On May 20, 1998 the Company filed a report on Form 8-K/A dated April
          20, 1998 under Item 7 to provide unaudited financial statements of the
          businesses acquired for the three months ended March 31, 1998 and 1997
          and unaudited pro forma information for the three months ended March
          31, 1998  with respect to its acquisition of Atlantic Waste Disposal,
          Inc.

          On May 20, 1998, the Company filed a report on Form 8-K dated May 20,
          1998 under Item 5 to file restated historical financial statements for
          the three years ended June 30, 1997 including notes thereto, the
          selected consolidated financial data and the information contained
          under Management's Discussion and Analysis and Condition and Results
          of Operations to reflect the mergers with Bluegrass Containment, Inc.,
          the Stamato Companies and the Ecology Companies, each of which was
          accounted for as a pooling of interests.

          On May 27, 1998, the Company filed a report on Form 8-K dated May 7,
          1998 under Item 5 to report that on May 20, 1998, an Underwriting
          Agreement was executed by the Registrant, certain stockholders of the
          Registrant and Smith Barney, Inc. CIBC Oppenheimer Corp., Merrill
          Lynch, Pierce Fenner and Smith, Incorporated and Pacific Growth
          Equities, Inc. as representatives of the several underwriters named
          therein, relating to the public offering of 7,000,000 shares of the
          Registrant's common stock par value $.01 per share plus an additional
          1,125,000 shares of common stock to cover over-allotments to be issued
          and sold by the Registrant and 500,000 shares of common stock to be
          sold by certain stockholders.

          On July 13, 1998, the Company filed a report on Form 8-K dated June
          26, 1998 under Item 2 to report the acquisition of the All Waste
          Companies.

          On July 13, 1998, the Company filed a report on Form 8-K dated June
          26, 1998 under Item 2 to report the acquisition of the Ulster
          Companies.

                                       20
<PAGE>
 
        SIGNATURES

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



            EASTERN ENVIRONMENTAL SERVICES, INC.
 
            BY:   /s/ Louis D. Paolino, Jr.
                 -----------------------------------
                 Louis D. Paolino, Jr., Chairman
 
            BY:   /s/ Gregory M. Krzemien
                 -----------------------------------
                 Gregory M. Krzemien, Chief Financial Officer
 
            BY:   /s/ Ronald R. Pirollo
                 -----------------------------------
                 Ronald R. Pirollo, Controller (Principal Accounting Officer)

DATE: August 14, 1998

                                       21
<PAGE>
 
                                 EXHIBIT INDEX

EXHIBIT NO.       DESCRIPTION
-----------       -----------

10.84  Employment Agreement between the Company and Gregory M. Krzemien dated
       May 15, 1998.

10.85  Employment Agreement between the Company and Matthew Paolino dated June
       1, 1998

27     Financial Data Schedules (Electronic filed only).

                                       22