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                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
 
                               ----------------
 
                                   FORM 10-K
 
[X]              ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D)
             OF THE SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
                FOR THE 1995 FISCAL YEAR ENDED DECEMBER 30, 1995
 
[_]         TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
               SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
                 FOR THE TRANSITION PERIOD FROM       TO
 
                         COMMISSION FILE NUMBER 1-8513
 
                             SAFETY-KLEEN(R) CORP.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
 
               WISCONSIN                               39-6090019
    (STATE OR OTHER JURISDICTION OF                 (I.R.S. EMPLOYER
     INCORPORATION OR ORGANIZATION)               IDENTIFICATION NO.)
 
1000 NORTH RANDALL ROAD,ELGIN, ILLINOIS                  60123
    (ADDRESS OF PRINCIPAL EXECUTIVE                    (ZIP CODE)
                OFFICES)
 
       REGISTRANT'S TELEPHONE NUMBER INCLUDING AREA CODE: (847) 697-8460
 
          SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
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<CAPTION>
                                                          NAME OF EACH EXCHANGE ON
             TITLE OF EACH CLASS                              WHICH REGISTERED
             -------------------                          ------------------------
<S>                                            <C>
        Common Stock, $.10 Par Value                      New York Stock Exchange
</TABLE>
 
          SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
                                      NONE
                                (TITLE OF CLASS)
 
  Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. YES X    NO
 
  Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]
 
  The aggregate market value of voting stock held by non-affiliates of the
registrant as of March 1, 1996 was approximately $0.7 billion.
 
  Shares of Common Stock outstanding at March 1, 1996, were 57,868,541.
 
                      DOCUMENTS INCORPORATED BY REFERENCE:
  PORTIONS OF THE REGISTRANT'S PROXY STATEMENT FOR THE ANNUAL MEETING OF
SHAREHOLDERS TO BE HELD ON MAY 10, 1996, ARE INCORPORATED BY REFERENCE IN PART
III, AND PORTIONS OF THE REGISTRANT'S ANNUAL REPORT TO SHAREHOLDERS FOR THE
YEAR ENDED DECEMBER 30, 1995, ARE INCORPORATED BY REFERENCE IN PARTS I AND II.
 
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                                     PART I
 
ITEM 1. BUSINESS
 
GENERAL
 
  Safety-Kleen is a business-to-business marketing and service company focusing
on the environmental needs of business through recycling and reuse of fluid
waste and other recoverable resources. It is a leading provider of services to
generators of spent solvents and other hazardous and non-hazardous liquid
wastes and byproducts, the world's largest provider of parts cleaner services
and one of the world's largest collectors and re-refiners of used oil. The
Company serves hundreds of thousands of customers in North America and Europe
through a network of 235 branch facilities.
 
  The Company operates in the continental U.S., Canada, the United Kingdom, the
Republic of Ireland, Puerto Rico, Belgium, France, Italy, Spain and Germany.
The Company has licensee operations in Japan and Korea. Safety-Kleen Corp. was
incorporated in July, 1963 under the laws of the State of Wisconsin. As used
herein, the terms "Company" or "Safety-Kleen" refer to Safety-Kleen Corp. and
its consolidated subsidiaries.
 
  The Company groups its services into three broad categories: Small Quantity
Generator ("SQG") Resource Recovery Services, Envirosystems Services, and Oil
Recovery Services. Each of the Company's services is discussed in greater
detail below and in "Management's Discussion and Analysis of Financial
Condition and Results of Operations" appearing on pages 23-27 of the Company's
Annual Report to Shareholders for the year ended December 30, 1995 (the "Annual
Report"), which is incorporated herein by reference.
 
SQG RESOURCE RECOVERY SERVICES
 
  The Company's SQG Resource Recovery Services are divided into
Automotive/Retail Repair Services, Industrial Services, Paint Refinishing
Services, Dry Cleaner Services and Imaging Services. Solvent recycling is an
integral part of the Company's SQG Resource Recovery Services. Most fluid
wastes collected by the Company as part of these services, except Imaging
Services, are either recycled for re-use in these services or processed into
waste-derived fuel for use in the cement manufacturing industry. Imaging
Services recovers the silver contained in the spent photochemical solutions it
collects from customers. These solutions are then further treated and processed
until they can be discharged as wastewater into publicly-owned treatment works
in compliance with applicable laws and regulations. Some wastewater is also
collected as part of the Company's Fluid Recovery Service.
 
  Automotive/Retail Repair Services. The primary component of the Company's
Automotive/ Retail Repair Services is its Parts Cleaner Service which enables
businesses (such as service stations, car and truck dealers, small engine
repair shops and fleet maintenance shops) to clean parts in a convenient, cost
effective, safe and environmentally sound manner. In this service, the
Company's service representative places parts cleaner equipment and solvent
with a customer, and, at regular service intervals, cleans and maintains the
equipment, delivers clean solvent for use in the degreasing process, and
removes the dirty solvent.
 
  Industrial Services. The Company markets both its Parts Cleaner Service and
its Fluid Recovery Service to industrial customers in the U.S. through its
Industrial Services specialists. The Company's Industrial Services furnish the
same high quality parts cleaner service that is provided to Automotive/Retail
Repair customers. The Company's Fluid Recovery Service consists of the
collection of a wide variety of waste solvents and other liquid and solid
containerized wastes generated by industrial customers in relatively small
quantities, averaging a few 55-gallon drums
 
                                       1
<PAGE>
 
per pickup. Depending upon the content, the material collected by the Company
in its Fluid Recovery Service is either processed into a waste-derived fuel for
use in the cement manufacturing industry, recycled into usable solvent or
disposed of through incineration.
 
  Automotive and Industrial Parts Cleaning Equipment Conversion. The Company
provides a choice of several models of parts cleaners to customers for their
use as part of the Parts Cleaner Service. The Company also provides service to
customers who own their own parts cleaner equipment. In total, at the end of
1995, the Company was providing services for approximately 493,000 parts
cleaners at customers in the United States, of which approximately 375,000 were
owned by the Company and approximately 118,000 were owned by customers.
 
  Prior to 1994, the Company's Model 16 and 30 parts cleaners were the most
prevalent parts cleaner models furnished by the Company. They consist of a red
sink atop a 16-gallon or 30-gallon drum of solvent, equipped with a submersible
pump and a spout through which the solvent flows.
 
  In 1993, the Company introduced a new parts cleaning machine in the United
States that was designed to replace most of its existing Model 16 and 30 parts
cleaners. This new parts cleaner was developed in response to customer desires
to minimize the amount of waste they generate and reduce their annual cost, and
was the result of extensive research and testing conducted by the Company. The
new parts cleaner utilizes a premium nonhazardous solvent and contains a
patented cyclonic separator which mechanically separates dirt particles from
the solvent during machine operation and traps them in a container for removal
during servicing. This system extends the solvent's useful life and reduces the
number of annual services required. With the new cyclonic parts cleaner
service, customers need service less frequently and generate less waste on an
annual basis, which reduces the cost of the parts cleaner service to Safety-
Kleen and also provides customers with the potential to reduce their cost.
 
  The Company began converting the Model 16 and 30 parts cleaners being used by
its domestic Automotive/Retail Repair and Industrial Services customers to the
new cyclonic technology in late 1993. In the United States, the Company had
placed approximately 162,000 cyclonic parts cleaners at customer locations, and
there were approximately 94,000 Model 16 and 30 parts cleaner machines
remaining in service at December 30, 1995. The Company does not expect to
convert a large portion of the remaining Model 16 and 30 parts cleaner machines
to the cyclonic technology. Accordingly, the Company has determined that it
will no longer focus sales and marketing efforts on actively converting
existing red units to the cyclonic machines. Instead, it will convert existing
red units in response to market demand.
 
  In conjunction with the Company's decision to convert its parts cleaning
equipment, the Company adopted a comprehensive restructuring plan during the
fourth interim period of 1993. For a discussion of this restructuring plan,
refer to "Management's Discussion and Analysis of Financial Condition and
Results of Operations--Restructuring and Special Charges" appearing on pages 26
and 27 of the Annual Report, which is incorporated herein by reference.
 
  Paint Refinishing Services. The Company's Paint Refinishing Services are
supplied to new and used car dealers, auto body repair and paint shops and
fiberglass product manufacturers. The Company provides a machine specially
designed to clean paint spray guns. Company representatives place a machine and
solvent with each customer, maintain the machine and regularly remove the
contaminated solvent and replace it with clean solvent. The Company either
recycles the contaminated solvent into clean solvent for reuse or blends it
into fuel used by cement kilns. Waste paint and paint booth filters are also
collected from these customers and blended into fuel for cement kilns. The
Company representatives also provide clean buffing pads and remove dirty pads
during regularly scheduled service calls. The dirty pads are washed, dried,
inspected and returned to the Company's distribution system.
 
                                       2
<PAGE>
 
  Dry Cleaner Services. The Company collects and recycles contaminated dry
cleaner wastes consisting primarily of used filter cartridges and sludge
containing perchloroethylene and mineral spirits.
 
  Imaging Services. Through this service, the Company provides health care,
printing, photoprocessing and other businesses with on-site and off-site
recycling of photochemical solutions, as well as film, plate and silver
recovery services.
 
ENVIROSYSTEMS SERVICES
 
  The Company's Envirosystems Services consist of the collection of waste
solvent and other waste fluids from customers which generate larger quantities
of such waste fluids. The fluids are typically shipped directly from the
customer to one of the Company's recycle centers or fuel blending facilities.
Depending on the content, material collected from Envirosystems Services are
recycled for reuse, processed into fuels for use in the cement manufacturing
industry or disposed of through incineration.
 
OIL RECOVERY SERVICES
 
  The Company collects used lubricating oils from automobile and truck dealers,
automotive garages, oil change outlets, service stations, industrial plants and
other businesses. The used oil is then transferred to a re-refining plant where
most of the product is converted into high-quality base lubricating oil. The
Company derives revenues both from fees it charges customers to haul away used
oil and from the sale of products it produces by processing the used oil. The
Company's extensive branch network enables it to collect waste oil in
sufficient volume to support oil re-refining operations, which produce
lubricating oil that can be sold at significantly higher prices than industrial
fuels. The Company operates oil re-refining plants in Ontario, Canada and East
Chicago, Indiana. The plants in Ontario and East Chicago have annual re-
refining capacities of 34 and 85 million gallons of used oil per year,
respectively. Waste oil collected in excess of the capacity of the Company's
re-refining facilities is either processed into industrial fuels or, to a small
extent, sold unprocessed for direct use as a fuel in certain industrial
applications for which such oil is suitable.
 
EUROPE
 
  Safety-Kleen has wholly-owned operations in seven countries in Western
Europe. The Company primarily provides its Automotive/Retail Repair and Paint
Refinishing Services in Europe. The Company also provides selected industrial
services in Germany and the United Kingdom.
 
PRIMARY RAW MATERIALS
 
  The primary hydrocarbon material used in the Company's Parts Cleaner Service
is a paraffinic hydro-treated petroleum fraction product that is purchased from
petroleum refiners and suppliers through short-term purchase orders. It is not
possible for the Company to accurately estimate the effect of possible future
petroleum product shortages on the Company's operations or those of its
customers. At the present time, the Company expects to be able to purchase
required quantities of such solvent at acceptable prices. For a discussion of
the effect of petroleum product price changes, refer to "Management's
Discussion and Analysis of Financial Condition and Results of Operations--
Effects of Petroleum Price Changes" appearing on page 24 of the Annual Report,
which is incorporated herein by reference.
 
  The Company purchases a wide variety of other products and raw materials and
has not experienced any major shortages in the past. The Company believes that
sufficient alternative sources are available should it become necessary to
replace its current sources of supply for these products and materials.
 
                                       3
<PAGE>
 
COMPETITIVE CONDITIONS
 
  The Company is the market leader in the United States in its Parts Cleaner,
Paint Refinishing, Dry Cleaner and Oil Recovery services. In these services,
the Company generally competes with local or smaller regional companies. In its
Fluid Recovery Service, the Company generally competes with many firms engaged
in the transportation, brokerage and/or disposal of hazardous wastes through
recycling, fuels programs or incineration. In its Envirosystems Services, the
Company competes with many recyclers of spent solvents, as well as many firms
engaged in hazardous waste disposal through fuels programs or incineration.
 
  The principal methods of competition for all of the Company's services are
price, quality, reliability of service rendered and technical proficiency in
handling hazardous wastes properly. Knowledgeable customers are interested in
the reputation and financial strength of the companies they use for management
of their hazardous wastes, because the original generators of hazardous waste
remain liable under federal and state environmental laws for improper disposal
of such wastes, even if they employ companies which have proper permits and
licenses. The Company believes that its technical proficiency, reputation and
financial strength are important considerations to its customers in selecting
and continuing to utilize the Company's services.
 
PATENTS
 
  The Company owns various patents covering certain of its cleaning units and
certain related accessories. The Company has an exclusive license to use a
patented cyclonic separator in parts cleaner applications. In the Company's
opinion, however, the continued conduct of its business operations does not
depend upon the existence of these patents.
 
EMPLOYEES
 
  At December 30, 1995, the Company had approximately 6,700 employees.
 
REGULATION
 
  Overview. Domestic and foreign governmental regulations applicable to the
Company's business govern, among other things: the handling of a number of
substances collected by the Company which are classified as hazardous or solid
wastes under these regulations; the operation of the facilities at which the
Company stores or processes the substances it collects; and the ultimate
disposal of waste the Company removes from the substances it collects. An
increase in governmental requirements for the treatment of any particular
material generally increases the value of the Company's services to its
customers, but may also increase the Company's costs.
 
  Various permits are generally required by federal and state environmental
agencies for the Company's branch, accumulation center, solvent recycling, fuel
blending and oil processing facilities. Most of these permits must be renewed
periodically and the governmental authorities involved have the power, under
various circumstances, to revoke, modify or deny issuance or renewal of these
permits. Zoning, land use and siting restrictions also apply to these
facilities. Regulations also govern matters such as the disposal of residual
chemical wastes, operating procedures, stormwater and wastewater discharges,
fire protection, worker and community right-to-know and emergency response
plans. Air and water pollution regulations govern certain operations at the
Company's facilities. Safety standards under the Occupational Safety and Health
Act in the United States and similar foreign laws are also applicable.
Governmental regulations also apply to the operation of vehicles used by the
Company to transport the substances it collects and distributes, including
licensing requirements for the vehicles and the drivers, vehicle safety
requirements, vehicle weight limitations, shipment manifesting and vehicle
placarding requirements. Governmental authorities have the power to enforce
compliance and violators are subject to civil and criminal penalties. Private
individuals may also have the right to sue to enforce compliance with certain
of the governmental requirements.
 
                                       4
<PAGE>
 
  Regulations similar to those in the United States apply to the Company's
Canadian operations. In general, environmental requirements are not as strict
in countries in which the Company operates outside North America, but there is
a general trend in Europe and other countries to strengthen environmental
requirements.
 
  The Company has an internal staff of lawyers, engineers, geologists,
hydrogeologists, chemists and other environmental and safety professionals
whose responsibility is to continuously improve the procedures and practices to
be followed by the Company to comply with various federal, state and local laws
and regulations involving the protection of the environment and worker health
and safety and to monitor compliance.
 
  Hazardous and Solid Waste Requirements. Safety-Kleen's services involve the
collection, transportation, storage, processing, recycling and disposal of
automotive and industrial hazardous and nonhazardous fluids. Substantially all
of these materials are regulated in the United States as "solid wastes" under
the Resource Conservation and Recovery Act of 1976 ("RCRA"). In addition to
being regulated as solid wastes, many of these materials are further regulated
as "hazardous wastes." Accordingly, the Company is subject to federal and state
regulations governing hazardous and solid wastes. RCRA established a national
program which classified various substances as "hazardous wastes," established
requirements for storage, treatment and disposal of hazardous wastes, and
imposed requirements for facilities used to store, treat or dispose of such
wastes. RCRA was amended in 1984 by the Hazardous and Solid Waste Amendments
("HSWA") which expanded the scope of RCRA to include businesses which generate
smaller quantities of waste materials (so-called "small quantity generators"),
expanded the substances classified as hazardous wastes by RCRA and prohibited
direct disposal of those wastes in landfills (thereby, in effect, requiring
that the wastes be recycled, treated, or destroyed).
 
  The Company's customers are increasingly attempting to avoid being subject to
hazardous waste regulations by replacing hazardous materials used in their
businesses with nonhazardous materials or otherwise reducing the amount of
hazardous waste they generate. Accordingly, the Company is collecting more
substances that are not regulated as hazardous wastes but may be regulated as
solid wastes.
 
  Hazardous and solid waste regulations impose requirements which must be met
by facilities used to store, treat and dispose of these wastes. Operators of
hazardous waste storage, disposal and treatment facilities, such as Safety-
Kleen, must obtain a RCRA permit from federal or authorized state governmental
authorities to operate those facilities. States may also require a solid waste
permit. The Company has over 100 RCRA-permitted facilities and is pursuing RCRA
permits at a small number of its other facilities. The Company does not intend
to pursue RCRA permits for its remaining facilities because it will be limiting
activities at these facilities to transfer operations.
 
  In September, 1992, the United States Environmental Protection Agency ("EPA")
finalized regulations that govern the management of used oils. Although used
oil is not classified as a hazardous waste under federal law, certain states do
regulate used oil as hazardous. The Company builds and operates its used oil
facilities to standards similar to those required for hazardous waste
facilities, and believes that its oil management standards are more protective
of human health and the environment than current federal standards.
 
  Materials collected by the Company's Envirosystems and Fluid Recovery
Services are primarily recycled for reuse or processed into waste-derived fuel
to be burned in kilns used in the production of cement. The majority of such
waste-derived fuel is supplied to cement kilns with which the Company has
exclusive supply contracts with respect to such fuel. Cement kilns are subject
to regulations which govern the burning of hazardous wastes in boilers and
industrial furnaces ("BIF regulations"). Facilities covered by the BIF
regulations were required to submit certifications of
 
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compliance by August 1, 1992 or to obtain approvals from the relevant
governmental authority to extend the deadline for submission of certification.
Every BIF facility that elects to continue to burn hazardous waste will also be
required to obtain a RCRA operating permit. All of the kilns with which the
Company has exclusive supply contracts have either obtained their compliance
certifications or are in the process of doing so pursuant to an authorized
extension. These kilns are also in the process of obtaining their RCRA
operating permits. None of the kilns utilized by the Company for disposition of
the waste it collects are owned by the Company. The Company is assisting the
kilns with which it has exclusive contracts in complying with such regulations.
 
  The United States EPA is developing regulations which will establish
management standards for cement kiln dust ("CKD"). The Company and the kilns to
which it sends waste-derived fuel have developed programs for analyzing and
characterizing CKD in anticipation of these new management standards; however,
at this time it is not clear what impact these CKD regulations will have on the
Company.
 
  Clean Air Act. The Clean Air Act was passed by Congress to control the
emissions of pollutants to the air, and requires permits to be obtained for
certain sources. In 1990, Congress amended the Clean Air Act to require further
reductions of air pollutants with specific targets for nonattainment areas in
order to meet certain ambient air quality standards. These amendments also
require the EPA to promulgate regulations which: (i) control emissions of 189
toxic air pollutants; (ii) create uniform operating permits for major
industrial facilities similar to RCRA operating permits; (iii) mandate the
phase-out of ozone depleting chemicals; and (iv) provide for enhanced
enforcement.
 
  The Clean Air Act required regulations which resulted in the reduction of
volatile organic compound ("VOC") emissions in order to meet certain ozone
attainment standards under the act. The Company has installed control
technology to meet its obligations under the act. Additional emission
reductions at the Company's recycle centers and branches could be required as
the Company completes its air permitting program. In addition, the United
States EPA is developing Maximum Achievable Control Technology ("MACT")
standards under the Clean Air Act which will impose restrictions on the
emission of certain toxic air pollutants. These standards could impact certain
of the Company's facilities and the cement kilns to which the Company sends its
waste-derived fuels.
 
  In order to comply with these regulations, the Company has instituted a
program to augment the air emission control equipment at its affected
facilities and to obtain operating permits, where required. The Company is also
working with the United States EPA and appropriate state and local agencies
regarding the regulation of its parts cleaner and paint spray gun cleaner
operations.
 
  CERCLA and Related Requirements. The Comprehensive Environmental Response,
Compensation and Liability Act of 1980 ("CERCLA") was originally enacted in
December, 1980, and amended in 1986 by the Superfund Amendments and
Reauthorization Act ("SARA"). CERCLA creates a fund of monies ("Superfund")
which can be used by the EPA and state governments to clean up hazardous waste
sites pending recovery of those costs from defined categories of "potentially
responsible parties" ("PRPs"). Most EPA cleanup efforts are at sites listed or
proposed for listing on the National Priorities List ("NPL"). Various states
have also enacted statutes which contain provisions substantially similar to
CERCLA.
 
  Generators and transporters of hazardous substances, as well as past and
present owners and operators of sites where there has been a release of
hazardous substances, are made strictly, jointly and severally liable for the
clean-up costs resulting from releases and threatened releases of CERCLA-
regulated "hazardous substances." Under CERCLA, these responsible parties can
be ordered to perform a clean-up, can be sued for costs associated with private
party or public agency clean-up, or can voluntarily settle with the government
concerning their liability for clean-up costs.
 
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<PAGE>
 
  A large portion of the materials collected by the Company are recycled or
converted into materials, such as industrial fuels, which may be used for
another purpose. The amount of material that the Company deposits at waste
sites is accordingly small in relation to the volume of materials collected by
the Company, and the Company is actively engaged in a waste minimization
program to reduce this small amount even further. The Company also sends some
of the materials it collects to selected third party facilities for further
treatment, processing and/or disposal. The Company audits each of these
facilities prior to shipping any materials to attempt to minimize its potential
superfund liability at these sites.
 
  Most of the Company's CERCLA responsibilities stem from certain historic
disposal practices in the 1970's. These practices were stopped in the mid-to-
late 1970's with the development of expanded recycling technology. The Company
has been a relatively small contributor in most waste disposal sites utilized
by the Company.
 
  Proceedings are currently pending involving several sites with respect to
which the Company has been notified by the EPA or the appropriate state agency
that the Company may be a PRP. The Company is participating in settlement
discussions with the parties and the government at these sites. The Company's
volumetric share of the total waste at a majority of these sites is among the
smallest of the PRPs and the Company has a larger volumetric share at a
minority of these sites. From time to time, the EPA requests information from
the Company to ascertain if it may be a PRP at other sites.
 
  Costs of Increasing Regulations and Higher Fees and Taxes. The Company
continues to be subject to legislation and regulations adopted by federal,
state and local authorities which may impose stricter operating and performance
standards and increased taxes, assessments and fees upon emission sources and
the generators, transporters and handlers of hazardous and nonhazardous waste.
Although historically the Company has been able to pass most of the costs
associated with such legislation and regulations on to its customers through
price increases, there can be no assurance it will be able to continue to do so
in the future.
 
  Capital and Certain Other Expenditures Related to the Environment. A portion
of the Company's capital expenditures are related to compliance with
environmental laws and regulations. The Company estimates capital spending of
approximately $9 million for the year 1996 and $18 million in the aggregate,
for the years 1997 through 2000 in order to comply with RCRA, the Clean Air Act
and other environmental laws and regulations currently in effect in conjunction
with the Company's existing business.
 
  In addition to these capital expenditures, the Company may incur costs in
connection with closure activities at certain of its sites. When the Company
discontinues using or, in certain cases, changes the use of a hazardous waste
management unit, formal closure procedures must be followed. These closure
procedures must be approved by federal or state environmental authorities. In
some cases, costs are incurred to complete remedial cleanup work at the site.
In addition, at certain of the Company's other operating sites, remedial
cleanup work is required as part of the RCRA Corrective Action Program or other
state and federal programs. As shown on the Company's Consolidated Balance
Sheet and more fully described in note 9 to the Consolidated Financial
Statements at pages 31 and 41-42, respectively, of the Annual Report, the
Company has accrued liabilities of approximately $54.3 million as of December
30, 1995 for remedial cleanup work, superfund site liability, closure
activities and certain other environmental expenses related to its operating
and previously closed sites.
 
  Enforcement Actions. The Company's goal is to fully comply with all
environmental regulations and other governmental requirements. The Company has
instituted several programs to enhance compliance, including suspending site
operations if appropriate corrective actions are not taken to remedy potential
defects. The Company conducts regular audits of its facilities to assess
compliance
 
                                       7
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with federal and state environmental and safety laws and regulations. Any
potential deficiencies are identified and a corrective action plan is prepared
and implemented to eliminate the potential defect. In 1995 the Company
conducted over 460 such audits. The Company regularly conducts corporate
training courses and seminars focused on environmental control and safety
regulations, in addition to on-going weekly field training for its site
employees.
 
  In spite of the Company's goal to fully comply with all environmental
regulations, given the Company's extensive operations, the technical aspects of
the regulations and the varying interpretations of the requirements from
jurisdiction to jurisdiction, the Company may incur governmental fines and
penalties from time to time. In the majority of situations where proceedings
are commenced by governmental authorities, the matters involved relate to
alleged violations of permits or orders under which the Company operates, or
laws and regulations to which its operations are subject, and are the result of
varying interpretations of the applicable requirements. Generally, these
proceedings result from routine inspections conducted by federal and state
regulatory agencies. In 1991, throughout its United States facilities, 201
regulatory proceedings were brought by state or federal authorities against the
Company. The number of regulatory proceedings brought against the Company has
declined each year since then: There were 142 proceedings brought in 1992, 136
in 1993, 130 in 1994 and 90 in 1995. Administrative actions are counted in the
year notice of the violation is received by the Company, regardless of when the
inspection giving rise to the action was conducted. Some of the proceedings
brought in 1995 resulted from inspections performed in previous years. Of these
administrative actions in 1995, the majority of the alleged deficiencies
related to incomplete or incorrect manifests and other shipping documents and
alleged defects in site operating records, training record keeping and other
paperwork. The Company processed over one million manifests and completed
several million individual drum labels in 1995. Throughout its facility
network, the Company maintains over 200 sets of operating records and logs in
which millions of individual entries are made annually. A clerical error on a
manifest, drum label or site paperwork can result in a violation notice.
 
  From time to time, the Company becomes subject to proceedings in which
governmental authorities may seek fines and/or penalties from the Company which
exceed $100,000 in each case. Two such proceedings were pending against the
Company at December 30, 1995. In these cases, the governmental authorities
involved may allege, among other things, that at certain of the Company's
facilities, the Company is responsible for releases or threatened releases of
hazardous substances, that the Company engaged in soil excavation or clean-up
activities without obtaining requisite advance approvals and/or that the
Company committed certain manifesting, storage and/or waste handling
violations.
 
  Five such cases were settled during the first three quarters of 1995 and were
previously disclosed in the Company's quarterly reports on Form 10-Q. No such
cases were settled during the fourth quarter of 1995.
 
  The Company's practice is to attempt to negotiate resolution of claims
against the Company and its facilities. The Company has to date been able to
resolve cases on generally satisfactory terms. The Company is, however,
prepared to contest claims or remedies which the Company believes to be
inappropriate unless and until satisfactory settlement terms can be agreed
upon. The Company paid approximately $1 million in 1995 for environmental
fines, penalties and forfeitures.
 
  Potential Environmental Liabilities. Based on its past experience and its
knowledge of pending cases, the Company believes it is unlikely that the
Company's actual liability on cases now pending (including enforcement actions
of the type described above and CERCLA or state superfund cases) will be
materially adverse to the Company's financial condition. It should be noted,
however, that many environmental laws are written and enforced in a way in
which the potential liability can be large, and it is always possible that the
Company's actual liability in any particular case or claim
 
                                       8
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will prove to be larger than anticipated or accrued for by the Company. It is
also possible that expenses incurred in any particular reporting period for
remediation costs or for fines, penalties, or judgments could have a material
impact on the Company's results of operations for that period.
 
FINANCIAL INFORMATION RELATING TO FOREIGN AND DOMESTIC OPERATIONS AND INDUSTRY
SEGMENTS
 
  The Company operates primarily in one business segment: providing businesses
with environmentally safe and convenient solutions for managing fluid waste and
other recoverable resources. For a discussion of financial information relating
to foreign and domestic operations and industry segments refer to Note 3 to the
Consolidated Financial Statements appearing on page 35 of the Annual Report.
 
EXECUTIVE OFFICERS OF THE REGISTRANT
 
  The executive officers of the Company are:
 
<TABLE>
<CAPTION>
   NAME      AGE                             POSITION
   ----      ---                             --------
<S>          <C> <C>
Donald W.    65  Chairman of the Board
 Brinckman
John G.      55  President, Chief Executive Officer and Director
 Johnson
 Jr.
Hyman K.     41  Senior Vice President General Counsel
 Bielsky
Roy D.       47  Senior Vice President Business Management and Marketing
 Bullinger
Robert J.    58  Senior Vice President Human Resources
 Burian
Michael H.   48  Senior Vice President Marketing Services and Customer Care
 Carney
Joseph       50  Senior Vice President Operations, Oil Recovery and Envirosystems
 Chalhoub
David A.     55  Senior Vice President Sales and Service
 Dattilo
Scott E.     41  Senior Vice President Environment, Health and Safety
 Fore
F. Henry     42  Senior Vice President Corporate Development and Environment
 Habicht II
Robert W.    48  Senior Vice President Finance and Secretary
 Willmschen
 Jr.
Lawrence G.  53  Vice President Information Systems and Chief Information Officer
 Davenport
Clark J.     58  Vice President Manufacturing and Technical Services
 Rose
Laurence M.  50  Treasurer
 Rudnick
Clifford J.  44  Controller
 Schulz
</TABLE>
 
  Mr. Brinckman relinquished his post as Chief Executive Officer of the Company
as of December 31, 1994, a position he held since 1968. He served as President
of the Company from 1968 to August, 1990, and December, 1991 to May, 1993. Mr
Brinckman was appointed Chairman of the Company's Board of Directors in August,
1990. Mr. Brinckman is also a director of Johnson Worldwide Associates, Inc.,
Racine, Wisconsin, Paychex, Inc., Rochester, New York and Snap-On Incorporated,
Kenosha, Wisconsin. Mr. Brinckman is Chairman of the Executive Committee and is
a member of the Environmental Committee.
 
  Mr. Johnson has been Chief Executive Officer of the Company since January 1,
1995. He was elected President and a director of the Company in May 1993. He
joined Safety-Kleen in January, 1993 as Assistant to the Chairman/CEO. Prior to
joining Safety-Kleen, Mr. Johnson was employed by ARCO since 1958. He served as
Senior Vice President of ARCO Chemical Company since 1986. In 1987, he became a
director and in 1988 was given the added responsibility of President of ARCO
Chemical Americas, a division of ARCO Chemical Company. He is also a director
of McWhorter Technologies, Carpentersville, Illinois.
 
                                       9
<PAGE>
 
  Mr. Bielsky was elected Senior Vice President General Counsel in May, 1993.
He was assigned the added responsibility of overseeing Human Resources and
Europe in July, 1995. Mr. Bielsky served as Assistant General Counsel-
Commercial since January, 1990, and as Associate Counsel since joining the
Company in 1987.
 
  Mr. Bullinger was named Senior Vice President Business Management and
Marketing in June 1994. He served as Vice President Sales--Central Division
since 1985 and as a Regional Manager since joining the Company in 1975.
 
  Mr. Burian was appointed Senior Vice President Human Resources in May, 1993.
He served as Senior Vice President Administration since August, 1990. Mr.
Burian joined the Company in July, 1986, as Vice President Personnel.
 
  Mr. Carney was named Senior Vice President Marketing Services and Customer
Care in June 1994. He served as Senior Vice President Marketing since August,
1990 and Vice President Marketing since May, 1987. He joined the Company in
1976, serving in various marketing positions until his appointment to Vice
President Marketing.
 
  Mr. Chalhoub was named Senior Vice President Operations, Oil Recovery and
Envirosystems in July, 1995. Prior to that, he served as Senior Vice President,
Oil Recovery Division since August, 1990. In August, 1991, Mr. Chalhoub was
assigned the additional responsibilities of overseeing the processing and
engineering departments. He was President of the Company's former subsidiary,
Breslube Holding Corp., since May, 1987.
 
  Mr. Dattilo was named Senior Vice President Sales and Service in August,
1990. He served as Vice President Corporate Branch Sales and Service since
January, 1980.
 
  Mr. Fore was elected Senior Vice President Environment, Health and Safety in
May, 1993. He served as Vice President Environment, Health and Safety since
August, 1987, and was previously Associate General Counsel since joining the
Company in 1985.
 
  Mr. Habicht joined the Company in March, 1993. He served as Senior Vice
President Strategic/Environmental Planning from March, 1993 to July, 1995. In
June, 1994, he assumed responsibility for Safety-Kleen Canada. In July, 1995,
he assumed responsibility for Environment, Health and Safety and Corporate
Accounts and became Senior Vice President of Corporate Development and
Environment. Prior to joining the Company, he served as Deputy Administrator of
the U.S. Environmental Protection Agency from 1989 to 1992.
 
  Mr. Willmschen was named Senior Vice President Finance in August, 1990. He
served as Vice President Finance and Secretary since February, 1982.
 
  Mr. Davenport joined the Company in June, 1995 as Vice President Information
Services and Chief Information Officer. Prior to joining Safety-Kleen, Mr.
Davenport was employed by JB Hunt Transport, Inc. since 1989 and served as
Senior Vice President Information Services for that company since 1992.
 
  Mr. Rose was named Vice President Manufacturing and Technical Services in
July, 1995. He served as Vice President Technical Services since August, 1989
and Manager of Recycle Center Operations since joining the Company in June,
1984.
 
  Mr. Rudnick joined the Company in September, 1979, and was appointed
Treasurer in January, 1980.
 
  Mr. Schulz was named Controller in December, 1994. He served as Controller
North American Operations and Assistant Controller Cost and Inventory since
1991 and 1987, respectively.
 
                                       10
<PAGE>
 
ITEM 2. PROPERTIES
 
  The Company owns 13 solvent recycling plants in the U.S., Canada, Puerto
Rico, the United Kingdom and Germany. In total, these plants have an annual
recycling capacity of 64 million gallons of parts cleaner solvents and 44
million gallons of halogenated, fluorinated and flammable solvents. The total
storage capacity of these plants is approximately 8.5 million gallons. In
addition, the Company owns 4 fuel blending facilities, located on leased land,
which have combined storage capacity of approximately 2.9 million gallons.
 
  The Company owns 2 oil re-refining plants with a combined annual re-refining
capacity of 119 million gallons. These plants are located in Ontario, Canada
and East Chicago, Indiana.
 
  The Company leases 5 distribution facilities and owns 3 distribution
facilities in the U.S., United Kingdom and Germany, averaging approximately
45,000 square feet. The Company has 18 accumulation centers across the U.S. Of
these, 13 are owned and 5 are leased. A typical accumulation center is
approximately 8,000 square feet. These centers serve branches by collecting
drums of waste from the Fluid Recovery Service, Dry Cleaner Service, Paint
Refinishing Service and other small quantity generator services. As truck load
quantities are collected, they are transported from the accumulation centers to
the recycling plants.
 
  In North America and Europe, the Company's sales and service representatives
operate out of 235 branch facilities. Of these, approximately 50% are leased
and 50% are owned. A typical branch is approximately 8,000 square feet.
 
  The Company owns a 106,000 square foot plant in New Berlin, Wisconsin, where
parts cleaner machines and buffing pads are manufactured.
 
  The Company owns a 285,000 square foot corporate headquarters building
located in Elgin, Illinois and a 66,000 square foot Technical Center located in
Elk Grove Village, Illinois. The Company also owns a 128,000 square foot office
building located in Elgin, Illinois, which is being marketed for sale or lease.
 
  The Company operates approximately 2,600 van-type vehicles, 270 straight
tanker-type service vehicles and 750 pieces of over-the-road equipment, most of
which are owned by the Company. The Company also leases approximately 565
railroad tanker cars.
 
ITEM 3. LEGAL PROCEEDINGS
 
  Reference is made to "Item 1. Business," subcaption "Regulation," for
information concerning certain environmental matters.
 
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
 
  No matters were submitted to a vote of security holders during the fourth
interim period of the fiscal year ended December 30, 1995.
 
                                    PART II
 
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
 
  The "Market and Dividend Information" appearing on page 45 of the Annual
Report is incorporated herein by reference.
 
                                       11
<PAGE>
 
ITEM 6. SELECTED FINANCIAL DATA
 
  The "Selected Financial Data" appearing on page 28 of the Annual Report is
incorporated herein by reference.
 
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
      OF OPERATIONS
 
  "Management's Discussion and Analysis of Financial Condition and Results of
Operations" appearing on pages 23-27 of the Annual Report is incorporated
herein by reference.
 
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
 
  The "Report of Independent Public Accountants", Consolidated Financial
Statements and "Notes to Consolidated Financial Statements" appearing on pages
29-43 of the Annual Report are incorporated herein by reference.
 
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
      FINANCIAL DISCLOSURE
 
  None.
 
                                    PART III
 
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
 
  The information set forth under the heading "Executive Officers of the
Registrant" in Part I, Item 1 of this Annual Report on Form 10-K and under the
headings "PROPOSAL 1: ELECTION OF DIRECTORS" and "COMMON STOCK OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT" in the Company's definitive proxy
statement for the May 10, 1996 Annual Meeting of Shareholders (the "Proxy
Statement") is herein incorporated by reference.
 
ITEM 11. EXECUTIVE COMPENSATION
 
  The information set forth under the heading "EXECUTIVE COMPENSATION" in the
Proxy Statement is herein incorporated by reference.
 
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
 
  The information set forth under the heading "COMMON STOCK OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT" in the Proxy Statement is herein
incorporated by reference.
 
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
 
  The information set forth under the headings "EXECUTIVE COMPENSATION,"
"CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS," and "DIRECTORS' COMMITTEES,
MEETINGS AND COMPENSATION" in the Proxy Statement is herein incorporated by
reference.
 
                                    PART IV
 
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
 
  Item 14(a)1. List of Financial Statements.
 
    The following consolidated financial statements of the Company included
    on pages 29-43 of the Annual Report to Shareholders for the year ended
    December 30, 1995 are incorporated by reference:
 
    Consolidated Balance Sheets as of December 30, 1995 and December 31,
    1994.
 
    Consolidated Statements of Operations for the years ended December 30,
    1995, December 31, 1994 and January 1, 1994.
 
    Consolidated Statements of Cash Flows for the years ended December 30,
    1995, December 31, 1994 and January 1, 1994.
 
    Consolidated Statements of Shareholders' Equity for the years ended
    December 30, 1995, December 31, 1994 and January 1, 1994.
 
    Notes to Consolidated Financial Statements.
 
                                       12
<PAGE>
 
  Item 14(a)2. Financial Statement Schedules.
 
    The following Consolidated Financial Statement Schedules of Safety-
    Kleen Corp. and Subsidiaries are included in response to Item 14(d):
 
<TABLE>
<CAPTION>
                                                                            PAGE
                                                                            NO.
                                                                            ----
     <S>                                                                    <C>
     Report of Independent Public Accountants..............................  16
     Schedule II Allowance for Doubtful Accounts...........................  17
</TABLE>
 
    Schedules other than those listed above are omitted as the information
    is not required or not applicable, or the required information is shown
    in the financial statements or notes thereto.
 
  Item 14(a)3. List of Exhibits.
 
<TABLE>
<CAPTION>
     NUMBER                               DESCRIPTION
     ------                               -----------
     <C>       <S>
      3.1      Articles of Incorporation of the Registrant. (4)
      3.2      By-Laws of the Registrant. (7)
      4.1      Form of Rights Agreement, dated November 9, 1988, between
               Safety-Kleen Corp. and the First National Bank of Chicago. (1)
      4.2      Indenture Agreement dated August 15, 1989, between Safety-Kleen
               Corp. and the Chase Manhattan Bank, executed in connection with
               the Company's issuance and sale from time to time of up to $200
               million aggregate principal amount of Debt Securities. (2)
      4.2.1    Board of Directors' Resolution executed in connection with the
               issuance and sale of $100 million aggregate principal amount of
               9.25% Senior Notes due September 15, 1999. (2)
      4.2.2    Board of Directors' Resolution executed in connection with the
               future issuance and sale of up to $100 million aggregate
               principal amount of Series A Medium Term Notes. (2)
      4.3      Note Purchase Agreement dated as of January 15, 1995, between
               Safety-Kleen Corp. and certain Purchasers, executed in
               connection with the Company's issuance and sale of its 8.05%
               Senior Notes due January 30, 1998 in the aggregate principal
               amount of $50 million. (8)
     10.1      Safety-Kleen Corp. 1985 Stock Option Plan. (3)*
     10.2      Safety-Kleen Corp. 1988 Non-Qualified Stock Option Plan for
               Outside Directors. (1)*
     10.3      Form of Safety-Kleen Corp. Severance Agreement. (3)*
     10.3.1    Current Schedule of Participants to Safety-Kleen Corp. Severance
               Agreement.*
     10.4      Safety-Kleen Corp. 1993 Stock Option Plan. (5)*
     10.5      Safety-Kleen Corp. Excess Benefit Plan. (5)*
     10.6      Safety-Kleen 1995 Management Incentive Plan. (8)*
     10.7      Safety-Kleen 1996 Management Incentive Plan.*
</TABLE>
 
                                       13
<PAGE>
 
<TABLE>
<CAPTION>
     NUMBER                              DESCRIPTION
     ------                              -----------
     <C>       <S>
     10.8      Amended and Restated Credit Agreement dated March 25, 1994,
               among the Chase Manhattan Bank, N.A., the Northern Trust
               Company, the NBD Bank, N.A. and the First National Bank of
               Chicago. (8)
     10.9      Letter Agreement dated March 29, 1995 amending the Amended and
               Restated Credit Agreement dated March 25, 1994, among the Chase
               Manhattan Bank, N.A., the Northern Trust Company, the NBD Bank,
               N.A. and the First National Bank of Chicago.
     13        Annual Report to Shareholders for the year ended December 30,
               1995.
     21        Subsidiaries of the Registrant. (3)
     23        Consent of Experts.
     27        Financial Data Schedule. (EDGAR Filing Only)
     99.1      Press Release issued February 5, 1996 regarding 1995 results of
               operations.
</TABLE>
    -------------------------
    (1) Previously filed and incorporated herein by reference from
        Registrant's Current Report on Form 8-K, dated November 10, 1988.
    (2) Previously filed and incorporated herein by reference from
        Registrant's Quarterly Report on Form 10-Q for the twelve weeks
        ended September 9, 1989.
    (3) Previously filed and incorporated herein by reference from
        Registrant's Annual Report on Form 10-K for the fiscal year ended
        December 29, 1990.
    (4) Previously filed and incorporated herein by reference from
        Registrant's Annual Report on Form 10-K for the fiscal year ended
        December 28, 1991.
    (5) Previously filed and incorporated herein by reference from
        Registrant's Annual Report on Form 10-K for the fiscal year ended
        January 2, 1993.
    (6) Previously filed and incorporated herein by reference from
        Registrant's Annual Report on Form 10-K for the fiscal year ended
        January 1, 1994.
    (7) Previously filed and incorporated herein by reference from
        Registrant's Quarterly Report on Form 10-Q for the twelve weeks
        ended September 9, 1995.
    (8) Previously filed and incorporated herein by reference from
        Registrant's Annual Report on Form 10-K for the fiscal year ended
        December 31, 1994.
 
      *Indicates each management or compensatory plan or arrangement
      required to be filed as an exhibit to this form pursuant to Item
      14(c) of this report.
 
      (Copies of these exhibits can be obtained from the Company for its
      reasonable out-of-pocket expense for furnishing such copies.)
 
  Item 14(b). Reports on Form 8-K.
 
      The Company filed an optional report on Form 8-K on August 30, 1995
      pursuant to Item 5 to report that earnings in the third interim
      period would be adversely affected by higher waste processing and
      disposal costs.
 
                                       14
<PAGE>
 
                                   SIGNATURES
 
  PURSUANT TO THE REQUIREMENTS OF SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934, THE REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED
ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED.
 
                                          Safety-Kleen Corp.
 
        Date: March 27, 1996              By: /s/ Robert W. Willmschen, Jr.
-------------------------------------     -------------------------------------
                                            Senior Vice President Finance
                                              and Secretary
 
  Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant in the capacities and on the dates indicated.
 
<TABLE>
<CAPTION>
             SIGNATURE                           TITLE                    DATE
             ---------                           -----                    ----
<S>                                    <C>                           <C>
     /s/ Donald W. Brinckman           Chairman of the Board           March 27, 1996 
------------------------------------                                                 
        Donald W. Brinckman                                                          

      /s/ John G. Johnson, Jr.         President, Chief Executive                    
------------------------------------    Officer and Director           March 27, 1996
        John G. Johnson, Jr.                                                         
                                                                                     
   /s/ Robert W. Willmschen, Jr.       Senior Vice President                         
------------------------------------    Finance, Chief Financial                     
     Robert W. Willmschen, Jr.          Officer                        March 27, 1996
                                                                                     
                                                                                     
     /s/ Clifford J. Schulz            Controller, Chief Accounting                  
------------------------------------    Officer                        March 27, 1996
         Clifford J. Schulz                                                          
                                                                                     
       /s/ Richard T. Farmer           Director                        March 27, 1996
------------------------------------                                                 
         Richard T. Farmer                                                           

       /s/ Russell A. Gwillim          Director                        March 27, 1996
------------------------------------                                                 
         Russell A. Gwillim                                                          

       /s/ Edgar D. Jannotta           Director                        March 27, 1996
------------------------------------                                                 
         Edgar D. Jannotta                                                           

         /s/ Karl G. Otzen             Director                        March 27, 1996
------------------------------------                                                 
           Karl G. Otzen                                                             

        /s/ Paul D. Schrage            Director                        March 27, 1996
------------------------------------                                                 
          Paul D. Schrage                                                            

       /s/ Marcia E. Williams          Director                        March 27, 1996
------------------------------------                                                 
         Marcia E. Williams                                                          

         /s/ W. Gordon Wood            Director                        March 27, 1996 
------------------------------------ 
           W. Gordon Wood            
</TABLE>
 
                                       15
<PAGE>
 
 
                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
 
To the Board of Directors and
Shareholders of Safety-Kleen Corp.:
 
  We have audited in accordance with generally accepted auditing standards, the
consolidated financial statements included in the Safety-Kleen Corp. annual
report to shareholders incorporated by reference into this Form 10-K, and have
issued our report thereon dated February 5, 1996. Our audit was made for the
purpose of forming an opinion on the basic consolidated financial statements
taken as a whole. The Supplemental Schedule II is the responsibility of the
Company's management and is presented for purposes of complying with the
Securities and Exchange Commission's rules and is not part of the basic
consolidated financial statements. This schedule has been subjected to the
auditing procedures applied in the audit of the basic consolidated financial
statements and, in our opinion, fairly states in all material respects, the
financial data required to be set forth therein in relation to the basic
consolidated financial statements taken as a whole.
 
                                          /s/ Arthur Andersen LLP
 
Chicago, Illinois
February 5, 1996
 
                                       16
<PAGE>
 
                                                                     SCHEDULE II
 
                      SAFETY-KLEEN CORP. AND SUBSIDIARIES
 
                        ALLOWANCE FOR DOUBTFUL ACCOUNTS
 
                  FOR THE THREE YEARS ENDED DECEMBER 30, 1995
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
 
<TABLE>
<CAPTION>
                                                     FISCAL YEAR ENDED
                                            ------------------------------------
                                            DECEMBER 30, DECEMBER 31, JANUARY 1,
                                                1995         1994        1994
                                            ------------ ------------ ----------
                                                  (EXPRESSED IN THOUSANDS)
<S>                                         <C>          <C>          <C>
Balance at beginning of year...............   $ 8,868      $ 8,432     $ 7,399
Provision charged to operating expenses....     4,225        5,067       6,822
Write-offs net of recoveries...............    (5,124)      (4,631)     (5,789)
                                              -------      -------     -------
Balance at end of year.....................   $ 7,969      $ 8,868     $ 8,432
                                              =======      =======     =======
</TABLE>
 
 
 
 
 
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
 
                                       17
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