FORM 10-K
               SECURITIES AND EXCHANGE COMMISSION
                    Washington, D.C. 20549

X    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
     SECURITIES EXCHANGE ACT OF 1934
     For the fiscal year ended December 31, 1997
                         OR
     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
     SECURITIES EXCHANGE ACT OF 1934
     For the transition period from ___________ to ___________

                    Commission File No. 0-28652

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

          Delaware                           13-3858494
(State or other jurisdiction  (I.R.S. Employer Identification)
of incorporation or organization)

     745 McClintock Drive
          Suite 230
     Burr Ridge, Illinois                    60521
(Address of principal executive offices)     (Zip Code)

                         (630) 655-1105
     (Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:  None

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

               Common Stock, par value $.01 per share
                         (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 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.

Aggregate market value of voting stock held by non-affiliates of
registrant as of March 25, 1998:  $641,167,625

Number of shares of Common Stock outstanding as of March 25,
1998: 20,627,544

               DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant's definitive proxy statement pursuant
to Regulation 14A, which statement will be filed not later than
120 days after the end of the fiscal year covered by this Report,
are incorporated by reference in Part III hereof.

































               AMERICAN DISPOSAL SERVICES, INC.
                  ANNUAL REPORT ON FORM 10-K

                       TABLE OF CONTENTS

Item No.                                                    Page

PART I                                                      3
     1.   BUSINESS                                          3
     2.   PROPERTIES                                        20
     3.   LEGAL PROCEEDINGS                                 20
     4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY
          HOLDERS                                           20

PART II                                                     21
     5.   MARKET FOR REGISTRANT'S COMMON EQUITY AND
          RELATED STOCKHOLDER MATTERS.                      21
     6.   SELECTED CONSOLIDATED FINANCIAL DATA              22
     7.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
          CONDITION AND RESULTS OF OPERATIONS               23
     8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA       28
     9.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
          ACCOUNTING AND FINANCIAL DISCLOSURE               28

PART III                                                    29

PART IV                                                     30
     14.  EXHIBITS, FINANCIAL STATEMENTS, AND REPORTS
          ON FORM 8-K                                       30

SIGNATURES                                                  31

EXHIBIT INDEX                                               32
















                         PART I

ITEM 1.   BUSINESS


General

     American Disposal Services, Inc. (the "Company")  is a
regional, integrated, non-hazardous solid waste services company
that provides solid waste collection, transfer and disposal
services primarily in the Midwest and in the Northeast.  The
Company began its operations in the Midwest and currently has
operations in the following 12 states: Arkansas, Connecticut,
Illinois, Indiana, Kansas, Kentucky, Massachusetts, Missouri,
Ohio, Oklahoma, Pennsylvania and Rhode Island.  The Company owns
nine solid waste landfills and owns, operates or has exclusive
contracts to receive waste from 20 transfer stations.  The
Company's operations cover six primary operating regions and its
landfills and transfer stations are supported by 17 collection
divisions, which currently serve over 400,000 residential,
commercial and industrial customers.  The Company has adopted an
acquisition-based growth strategy and intends to continue its
expansion, generally in its existing and proximate markets. Since
January 1993, the Company has acquired 70 solid waste businesses,
including eight solid waste landfills and 66 solid waste
collection companies.

     The Company's operating program generally involves a
four-step process: (i) acquiring solid waste landfills in markets
that are within approximately 125 miles of significant
metropolitan centers; (ii) securing captive waste streams for its
landfills through the acquisition or development of transfer
stations serving those markets, through acquisitions of
collection companies and by entering into long-term contracts
directly with customers or collection companies; (iii) making
"tuck-in" acquisitions of collection companies to further
penetrate its target markets; and (iv) integrating these
businesses into the Company's operations to achieve operating
efficiencies and economies of scale. As part of its acquisition
program, the Company has, and in the future may, as specific
opportunities arise, evaluate and pursue acquisitions in the
solid waste collection and disposal industry that do not strictly
conform to the Company's four-step operating program.

     The Company's operating strategy emphasizes the integration
of its solid waste collection and disposal operations and the
internalization of waste collected.  One of the Company's goals
is to maximize the captive waste streams (which includes waste
from the Company's collection operations and third-party haulers
operating under long-term collection contracts) disposed of at
each of its landfills.  During the year ended December 31, 1997,
the Company's captive waste constituted an average of
approximately 73% of the solid waste disposed of at Company-owned
landfills.  In addition, approximately 81% of the total tonnage
collected by the Company during such period was disposed of at
Company-owned landfills.  The Company plans to continue to pursue
its acquisition-based growth strategy to maximize the
internalization of waste collected and expand its presence in its
existing and proximate markets.

Recent Developments

     Since the Company's offering of Common Stock consummated in
October 1997 (the "October Offering"), the Company has expanded
and strengthened its market presence in its six operating regions
through the acquisition of 15 solid waste businesses, which
collectively included one landfill, 15 collection companies,
three transfer stations and a contract to operate a fourth
transfer station.

     In the New England Region, which the Company entered in
September 1996, the Company continued to expand its presence
through five "tuck-in" acquisitions of collection operations.  In
the Illinois Region, the Company acquired selected assets from
John Sexton Contractors, Inc. (the "Sexton Acquisition").  The
Sexton Acquisition added a collection operation, two transfer
stations and one landfill to the Company's operations in the
Illinois Region.  In addition, the Company has completed two
collection company acquisitions in the Illinois Region, one as a
"tuck-in" to the Sexton Acquisition and one as a "tuck-in" to the
Company's existing Chicago operations.

     In January 1998, the Company completed the acquisition of
the R.C. Miller companies (the "R.C. Miller Acquisition"), which
provide solid waste collection, transfer and recycling services
in Canton, Ohio and surrounding counties.  The R.C. Miller
Acquisition further expands the Company's presence in the Ohio
Region and provides a geographical link between the Company's
Ohio and Western Pennsylvania Regions.  Subsequent to the R.C.
Miller Acquisition, the Company completed three "tuck-in"
acquisitions in the Ohio Region.

     In October 1997, the Company repaid its $60 million term
loan with a portion of the proceeds from the October Offering and
currently has a $140 million revolving credit facility (the
"Credit Facility").  At March 1, 1998, the outstanding debt under
the Credit Facility was $34.4 million, up from $19.7 million at
December 31, 1997, primarily as a result of recent acquisitions.

     Unless otherwise noted, all descriptions of the Company's
business in this Annual Report on Form 10-K are as of March 15,
1998.

Forward Looking Statements

     Certain information contained in this Annual Report on Form
10-K, including, without limitation, information appearing under
Item 1, "Business," and Item 7, "Management's Discussion and
Analysis of Financial Condition and Results of Operations," are
forward-looking statements (within the meaning of Section 27A of
the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934).  Factors set forth under Item 1, "Business
- Risk Factors," together with other factors that appear with the
forward-looking statements, or in the Company's other Securities
and Exchange Commission filings, could affect the Company's
actual results and could cause the Company's actual results to
differ materially from those expressed in any forward-looking
statements made by, or on behalf of, the Company in this Annual
Report on Form 10-K.

Industry Background

     In the United States, landfilling is at present the most
common means of disposing of non-hazardous municipal solid waste
("MSW"), which consists primarily of refuse and garbage from
households and commercial establishments.  The Company believes
that in recent years there has been a trend towards consolidation
of landfill ownership and that a similar trend is emerging in the
solid waste collection industry, which historically has been
characterized by numerous small companies.  The Company believes
that these trends will continue and are the result of several
factors:  (i) environmental regulations, including Subtitle D
Regulations and related state regulations and programs have
significantly increased the amount of capital and the technical
expertise required in order to own and operate a landfill; (ii) a
number of municipalities are electing to privatize the operations
of their municipal landfills as an alternative to funding the
changes to these landfills that are required in order to comply
with the Subtitle D Regulations and related state regulations and
programs; (iii) as a result of heightened sensitivity to
environmental concerns by many communities, it is becoming
increasingly desirable in many markets for collection companies
to provide waste reuse and reduction programs, such as recycling
and composting, in addition to conventional waste collection
services.  Due in part to these trends, the Company believes that
significant opportunities exist to expand and further integrate
its operations in each of its existing markets, as well as in new
markets that meet the Company's acquisition criteria.

Strategy

     The Company's objective is to build a large, profitable,
fully-integrated solid waste services company with an established
market presence in secondary markets.  The Company's strategy for
achieving this objective is to establish a market presence
generally anchored by its landfills; to increase volume in its
markets through "tuck-in" acquisitions of collection companies
and marketing to new customers; to provide a high level of
customer service; to implement selective price increases; and to
continue to implement strict cost controls and reduce corporate
overhead as a percentage of revenues.  The Company believes that
this strategy of building an integrated entity should provide it
with competitive cost advantages in its targeted regional
markets.  The Company's ability to implement its strategy is
enhanced by the experience of its senior managers and their
knowledge of the solid waste industry.  There can be no
assurance, however, that the Company will be successful in the
execution of its strategy.

     The Company targets acquisitions in geographic areas
characterized by one or more of the following criteria: (i) the
availability of permitted and underutilized landfill capacity
located outside of, but within 125 miles of, a significant
metropolitan center; (ii) the absence of a dominant competitor in
the area which would preclude the Company from implementing its
business strategy; (iii) anticipated economic and population
growth; and (iv) near- or medium- term scheduled closures of
competing landfills.

     The Company has adopted the following four-step operating
program in executing its business strategy:

          1.   Landfill Acquisitions.  Once the Company
          identifies an area that qualifies under its target
          market criteria, the Company seeks to establish a
          market presence, generally by acquiring one or more
          landfills in that area that can be accessed
          economically from the metropolitan center or from the
          regional market area, either through direct hauling or
          through strategically located transfer stations.  In
          evaluating a landfill acquisition, the Company
          considers, among others, the following factors: (i)
          current disposal costs together with transportation
          costs to the targeted landfill relative to
          transportation and disposal costs of potential
          competitors; (ii) expected landfill life; (iii)
          opportunities for landfill expansion; and (iv)
          projected short-term ability to secure a minimum of 500
          tons per day of disposal volume.

               2. Secure Captive Waste Volumes.  After the
          Company has acquired a landfill, it seeks to build a
          market presence and increase the utilization of the
          landfill by securing captive waste streams, which
          includes developing and acquiring transfer stations,
          entering into waste collection contracts and acquiring
          waste collection companies.  Generally, the Company
          pursues the acquisition of collection companies that:
          (i) have well-established residential or commercial
          collection routes and accounts; (ii) own and operate
          transfer stations; or (iii) do not own landfills and
          are vulnerable to volatile disposal pricing, which the
          Company believes it can minimize through landfill
          ownership.

               3. "Tuck-in" Acquisitions.  The Company acquires
          service rights, obligations, machinery and equipment in
          "tuck-in" acquisitions of collection companies to: (i)
          increase the waste stream directed to its landfills;
          (ii) maximize its market presence; and (iii) take
          advantage of economies of scale which should increase
          earnings and return on capital.

               4. Integration and Expansion of Operations.
          Immediately upon closing any acquisition, the Company
          integrates the acquired company into its operations by:
          (i) instituting strict cost control procedures; (ii)
          consolidating and rationalizing collection routes and
          pricing; (iii) implementing Company operating policies
          and procedures (including programs designed to improve
          employee productivity and equipment utilization); (iv)
          establishing a sales and marketing force; and (v)
          converting the acquired company to the Company's
          accounting, data processing and management reporting
          systems.  During the transition period following
          acquisitions, the Company retains the management of
          certain companies it acquires in order to benefit from
          management's local operating knowledge and the goodwill
          it has developed.  Additionally, on a selective basis,
          the Company seeks to expand the capacity of its
          landfills to accommodate increasing waste volumes and
          improve profitability.

     In addition, the Company may, as specific opportunities
arise, evaluate and pursue acquisitions in the solid waste
collection and disposal industry that do not strictly conform to
the Company's four-step operating program.

Acquisition Program

     The Company has assembled an experienced acquisition team
comprised of operations, environmental, engineering, legal,
financial and accounting personnel, each engaged in identifying
and evaluating acquisition opportunities in order to execute its
operating program.  The Company has established pre-acquisition
review procedures for acquisition candidates, including legal,
financial, engineering, operational and environmental reviews.
The environmental review includes, where appropriate,
investigation of geologic, hydrogeologic and other site
conditions, past and current operations (including types of waste
deposited), design and construction records, permits, regulatory
compliance history, regulatory agency records and available soil
sampling, groundwater and air monitoring results.  The Company
uses regional managers to assist in the acquisition process by
identifying suitable candidates and performing pre-acquisition
review and evaluation tasks.

     In considering whether to proceed with an acquisition, in
addition to determining whether the candidate meets the Company's
criteria described above, the Company evaluates a number of
factors, including: (i) the acquisition candidate's historical
and projected financial results; (ii) any expected synergies with
one or more of the Company's existing operations; (iii) the
proposed purchase price and the Company's expected resultant
internal rate of return on investment and the expected impact on
the Company's earnings per share; (iv) whether the candidate will
enhance the Company's ability to effect other acquisitions in the
vicinity; (v) the candidate's customer service reputation and
relationships with the local communities; (vi) the composition
and size of the candidate's customer base; (vii) the types of
services provided by the candidate; and (viii) whether the
candidate has definable and controllable liabilities, including
potential environmental liabilities.  The Company believes that
significant opportunities exist to acquire new landfills and to
develop its existing markets, and reviews acquisition
opportunities on an ongoing basis.

Completed Acquisitions

     The Company has completed 70 acquisitions of solid waste
companies in 12 states since January 1993, which are summarized
in the table below.


Company        Business       Principal Location  Date Acquired


MISSOURI REGION:

Wheatland      Landfill       Scammon, KS         January 1993

Pittsburg
Sanitation     Collection     Pittsburg, KS       January 1993

Ozark
Sanitation     Collection     Carthage, MO        January 1993


Trashmaster    Collection     Joplin, MO          January 1993

A-1 Trash
Service        Collection     Verona/Aurora, MO   April 1993

Tate's
Transfer       Transfer       Verona/Aurora, MO   April 1993
               Station

Renfro
Sanitation     Collection     Branson, MO         June 1993

B&B Trash      Collection     Pittsburg, KS       July 1993

B&B Refuse     Collection     Neosho, MO          December 1993

Apex Sanita-   Collection     Grove, OK and
tion                          Green Forest, AR    December 1993

Epps
Sanitation     Collection     Branson, MO         December 1993

Cummings
Sanitation     Collection     Nixa, MO            May 1994

Light Hauling  Collection     Branson, MO         August 1994

Poole's
Sanitation     Collection     Bentonville, AR     August 1994

Southwest
Waste          Collection     Springfield, MO     July 1996

Nesvold
Sanitation     Collection     Seneca, MO          December 1996

Sparky's Waste
Control        Collection     Springfield, MO     January 1997

Cupp Disposal  Collection     Joplin, MO          June 1997

Sunset         Landfill
Disposal/      Collection     Coffeyville, KS     August 1997
Resource and
Recovery

L. B. Smith    Collection     Springfield, MO     August 1997

Supreme
Sanitation     Collection     Pittsburg, KS       August 1997

Packman        Collection     Coffeyville, KS     January 1998

Freeman Waste
Management     Collection     Eureka Springs, AR  February 1998


ILLINOIS REGION:

Livingston     Landfill       Pontiac, IL         November 1995

Barbara
Companies      Landfill,      Chicago, IL         September 1997
               Collection,    Morris, IL
               MRF and Transfer
               Station

Sexton
Companies      Landfill,      Bloomington, IL
               Collection     Chicago, IL         November 1997
               and Transfer
               Stations

Harrell &
Daughters      Collection     Bloomington, IL     December 1997

Yellow Recycling
& Disposal     Collection     Lemont, IL          December 1997


SOUTHWESTERN INDIANA REGION:

WMX-Evansville Landfill,      Evansville, IN      April 1997
               Collection
               and Transfer
               Station

Action Trash &
Disposal       Collection     Vincennes, IN       July 1997

T&G Container  Collection and
               Transfer
               Station        Washington, IN      July 1997

Mother Earth   Collection,    Louisville, KY      August 1997
               Beneficial
               Reuse and
               Transfer Station

Earth First of
Kentuckiana    Collection     New Albany, IN      January 1998


OHIO REGION:

Wyandot        Landfill       Upper Sandusky, OH  August 1995

Environmental
Transportation
and Management Collection     Findlay, OH         May 1996


R&R Waste
Disposal       Collection     Findlay, OH         May 1996

Jerry's
Rubbish        Collection     Findlay, OH         June 1996

Seneca
Disposal       Collection     Tiffin, OH          June 1996

Ross Bros.
Waste &
Collection
and
Recycling      Transfer
               Station        Mt. Vernon, OH      September 1996

D&L Hauling         Collection     Findlay, OH    October 1996

Rutledge Trucking   Collection     Delaware, OH   November 1996

Morrow Sanitary
Company             Collection     Mt. Gilead, OH November 1996

Bowers-Phase II     Collection
                    and Transfer
                    Station        Vickery, OH    December 1996

Cargo Services      Collection     Mt. Gilead, OH December 1996

Rumpke Waste
(routes)            Collection     Fostoria, OH   December 1996

Christiansen's      Collection     Sandusky, OH   May 1997

D&R Refuse          Collection     Kenton, OH     July 1997

Geyer Sanitation    Collection     Galion, OH     July 1997

Didions' Garbage
& Refuse            Collection     Bellevue, OH   January 1998

R.C. Miller         Collection     Canton, OH     January 1998
Enterprises         and Transfer
                    Station

McFarland Disposal  Collection     Ravenna, OH    February 1998

Owens Rubbish
Service             Collection     Akron, OH      February 1998


WESTERN PENNSYLVANIA REGION:

Clarion             Landfill and
                    Collection     Leeper, PA     June 1995

Mauthe Sanitation   Collection     Strattan-      March 1996
                                   ville, PA

Allied Waste Systems  Collection   Youngstown, OH February 1997

Horodyski           Collection     Warren, OH     April 1997


Township Garbage    Collection     Warren, OH     July 1997


NEW ENGLAND REGION:

T&J Trucking        Collection     Johnston, RI   September 1996

American Disposal
Services/N.E.E.D    Collection     Johnston, RI   September 1996

A-1 Container       Collection     Rehoboth, MA   January 1997

BFI-Derby District  Collection     Seymour, CT    May 1997
                    and Transfer
                    Station

Liberty Disposal    Collection     Providence, RI May 1997

A. Macera           Collection     Johnston, RI   August 1997

Macera Bros         Collection     Cranston, RI   August 1997
                    and Transfer
                    Station

R.D. Compactor      Collection     Providence, RI September 1997

Wasteline
Rubbish Disposal    Collection     Johnston, RI   October 1997

Bonollo Rubbish     Collection     Wrentham, MA   November 1997

One Way Waste
Systems             Collection     N. Attleboro,  December 1997
                                   MA

South County
Companies           Collection     N. Kingston, RI  January 1998
                    and Transfer
                    Station

Page Hauling        Collection     Warwick, RI    February 1998


     Missouri Region.  The Company established a market presence
in the Missouri Region in January 1993 with the acquisition of
its Wheatland landfill.  Since purchasing the Wheatland landfill,
the Company has acquired one transfer station and independently
developed three transfer stations.  The Company also has
exclusive contracts to accept waste from two other transfer
stations.  Additionally, the Company acquired 21 collection
companies, including the three operations purchased
simultaneously with the Wheatland landfill.  The collection
operations and transfer stations have been consolidated into
three divisions.  The Company has integrated acquired companies
by consolidating and rationalizing routes and pricing, reducing
overhead through consolidating an acquired company's operations,
implementing the Company's cost controls and operating
procedures, converting acquired companies to the Company's
management reporting systems and implementing a sales and
marketing team.  Since the acquisition of its Wheatland landfill,
the Company has increased the waste volume at its landfill by
approximately 1,000 tons per day.  Since the October Offering,
the Company has acquired two collection companies and developed
one transfer station within the region.  Such activity has
expanded the service area of the Company's operations in the
Missouri Region.

     Illinois Region.  The Company established a market presence
in north-central Illinois in November 1995 with the acquisition
of its Livingston landfill, which is located approximately 90
miles from downtown Chicago.  The acquisition of the Livingston
landfill was particularly attractive to the Company's management
because of the expected closing of two competing landfills that
accepted an aggregate of approximately 15,000 tons per day and
the management team's experience with the Chicago market.  Since
the acquisition of the Livingston landfill, one of the competing
landfills in the Chicago metropolitan area has closed and the
other is expected to close in 1998.  Since the acquisition of the
Livingston landfill, the Company has increased the waste volume
at this landfill by approximately 4,000 tons per day through
intensified sales and marketing efforts.  Approximately 71% of
the waste volume at the Livingston landfill is captive waste.
Since the October Offering, the Company has acquired three
collection operations, two transfer stations and a landfill in
the Illinois Region.

     Southwestern Indiana Region.  In April 1997, the Company
acquired the Blackfoot landfill, two collection companies, an
exclusive transfer station contract and a permit to develop a new
transfer station, all located in the southwestern Indiana Region
(which includes western Kentucky).  These acquisitions provided
the Company with the opportunity to enter the southwestern
Indiana Region and to secure a significant market share position
in that region through the acquisition of a single, fully
integrated solid waste management operation.  Since the October
Offering, the Company completed the acquisition of one collection
company within the Southwestern Indiana Region.

     Ohio Region.  The Company established a market presence in
north-central Ohio in August 1995 with the acquisition of its
Wyandot landfill, which is located within approximately 125 miles
of Cleveland, Ohio and within approximately 75 miles of Toledo
and Columbus, Ohio.  The Company has acquired 18 collection
companies and has acquired, developed or secured exclusive
contracts with five transfer stations in the Ohio Region.  Since
the acquisition of the Wyandot landfill, the Company has
increased the waste volume at this landfill by approximately 300
tons per day, primarily through the acquisition of collection
companies, new operating contracts with two transfer stations and
implementation of a new sales focus.  To further expand its
operations, the Company is seeking to increase capacity at the
Wyandot landfill.  In January 1998, the Company completed the
R.C. Miller Acquisition, which provides the Company with solid
waste collection, transfer and recycling services in Canton, Ohio
and the surrounding counties.  In connection with the R.C. Miller
Acquisition, the Company acquired a construction and demolition
landfill, which the Company is in the process of closing.  The
R.C. Miller Acquisition expands the Company's presence in the
Ohio Region and provides a geographical link between the
Company's Ohio and Western Pennsylvania Regions.  Furthermore,
since the October Offering, the Company has acquired three
additional collection companies in the region.

     Western Pennsylvania Region.  The Company entered the
western Pennsylvania Region in June 1995 with the acquisition of
its Clarion landfill and an affiliated collection company.  The
Clarion landfill is located within 80 miles of both Pittsburgh
and Erie, Pennsylvania.  Since the acquisition of the Clarion
landfill, the Company has increased volumes to this landfill by
approximately 300 tons per day to the maximum daily limit,
primarily through the acquisition of collection companies.

     New England Region.  The Company began operating in the New
England Region in September 1996 with the acquisition of two
collection companies in Rhode Island.  The Company was attracted
to the New England Region because it was largely an
unconsolidated market where no existing operator had a
competitive advantage since the State of Rhode Island owns and
operates the sole landfill in the state.  As a result, the
Company has focused its acquisition strategy on collection
companies.  Since the October Offering, the Company has acquired
five collection companies and a contract to operate one transfer
station in the region.  The Company believes that as a result of
its acquisitions in the region, it currently owns and operates
the largest collection operation in Rhode Island and has
strategically positioned itself to expand its market share in the
New England Region.

Operations

     The Company's waste management operations include the
ownership and operation of solid waste landfills, transfer
stations and waste collection services.  The Company believes
that all of its landfills and transfer stations comply with or
exceed the requirements mandated by the Subtitle D Regulations
and the applicable state regulations.  The Company regularly
monitors incoming waste at its landfills to determine if such
wastes are in compliance with its permits.

Landfills

     The Company currently owns nine landfill operations
permitted to receive solid waste.  These landfill operations are
located in Illinois, Indiana, Ohio, Pennsylvania, Kansas and
Oklahoma.

     Each of the Company's landfill operations is located on land
owned by the Company.  The permitted waste streams at each of
these landfills include both MSW and certain special waste (the
type of special waste varying from landfill to landfill).  During
the year ended December 31, 1997, the Company's captive waste
(including the Company's collection operations and third party
haulers operating under long-term contracts) constituted an
average of approximately 73% of the solid waste disposed of at
its landfills.

     The table and landfill descriptions below provide certain
additional information, as of December 31, 1997 regarding the
nine landfills that the Company owns and operates.


                                                  Approximate
                                               Unused Permitted
                         Approximate Acreage      Airspace(2)
Landfills      Location     Total  Permitted(1) (in millions of
                                                  cubic yards)

Wheatland   Scammon, KS       68        55             0.9

Resource
Recovery    Cherryvale, KS    282       37             2.2

Pittsburg
County      McAlester, OK     76        30             1.4

Livingston  Pontiac, IL       556       255            27.9

Environtech Morris, IL        326       78             5.9

McLean     Bloomington, IL    55        33             1.0

Blackfoot  Evansville, IN     379       166            17.8

Wyandot(3) Upper Sandusky, OH 344       87             5.7

Clarion   Leeper, PA          606       60             3.9

     Total                    2,692     801            66.7


(1)  Permitted acreage, as used in this table and in this Annual
     Report on Form 10-K, represents the portion of the total
     acreage on which disposal cells and supporting facilities
     have been constructed (including any that may have been
     filled or capped) or may be constructed based upon an
     approval issued by the state generally authorizing the
     development or siting of a landfill on the acreage.  Prior
     to actually constructing and/or operating each new disposal
     cell on the permitted acreage, it may be necessary,
     depending upon the regulatory requirements of the particular
     state, for the Company to obtain additional authorizations
     with respect to such cell.  The portion of total acreage
     that is not currently permitted acreage is not currently
     available for waste disposal.
(2)  Unused permitted airspace represents in cubic yards the
     estimated portion of the permitted acreage that has not yet
     been used for waste disposal but may be available for waste
     disposal after certain approvals are secured and, in some
     instances, new disposal cells are constructed.  Prior to
     actually constructing and/or operating a new disposal area
     or cell on permitted acreage, it may be necessary, depending
     upon the regulatory requirements of the particular state or
     locality, for the Company to obtain additional
     authorizations.
(3)  The Company has applied for a permit to increase the
     permitted acreage and permitted cubic airspace at the
     Wyandot landfill by approximately 98 acres and approximately
     19.1 million cubic yards, respectively.

     The Company monitors the available permitted in-place
disposal capacity at each of its landfills on an ongoing basis
and evaluates whether to seek to expand this capacity.  In making
this evaluation, the Company considers various factors, including
the volume of waste projected to be disposed of at the landfill,
the size of the unpermitted acreage included in the landfill, the
likelihood that the Company will be successful in obtaining the
necessary approvals and permits required for the expansion and
the costs that would be involved in developing the expanded
capacity.  The Company also considers on an ongoing basis the
extent to which it is advisable, in light of changing market
conditions and/or regulatory requirements, to seek to expand or
change the permitted waste streams at a particular landfill or to
seek other permit modifications.  Set forth below is certain
information concerning certain of the new permits, permit
modifications and approvals that the Company is currently seeking
to enable it to expand its disposal capacity.  There can be no
assurance that the Company will succeed in obtaining any of such
permits, permit modifications or approvals, or that additional
permits, permit modifications or approvals will not be required
or that additional requirements will not be imposed by regulatory
agencies.

     Wheatland.  The Wheatland landfill consists of approximately
68 acres.  Approximately 55 of the owned acres are permitted
acres and there are approximately 0.9 million cubic yards of
unused permitted airspace.  The Company anticipates that after a
planned expansion, the Wheatland landfill would have
approximately four years of total site life at current average
disposal levels (approximately 2.5 years if such expansion is not
approved by the Cherokee County Board of Commissioners).  In
addition, the Company has an option to purchase an undeveloped
parcel in Missouri, which has been granted a permit to develop a
landfill.

     Resource Recovery.  The Resource Recovery landfill consists
of approximately 282 acres, of which approximately 37 are
permitted.  There are approximately 2.2 million cubic yards of
unused permitted airspace.  The Resource Recovery landfill has
approximately 14 years of total site life at current average
disposal levels.

     Pittsburg County.  The Pittsburg County landfill consists of
approximately 76 acres, of which approximately 30 are permitted
acres.  There are approximately 1.4 million cubic yards of unused
permitted airspace.  The Pittsburg County landfill would have
approximately 40 years of total site life at current average
disposal levels.

     Livingston.  The Livingston landfill consists of
approximately 556 acres, of which approximately 255 are permitted
acres.  There are approximately 27.9 million cubic yards of
unused permitted airspace.  Previously, cells developed at the
Livingston landfill have been constructed with double composite
liner systems.  In September 1996, the Livingston landfill
received a permit to construct cells using a single liner
composite system.  The Livingston landfill has approximately 12.5
years of total site life at current average disposal levels,
which have increased substantially since its acquisition by the
Company.

     Environtech.  The Environtech landfill consists of
approximately 326 acres of which 78 acres have received local
siting approval and state permitting.  There are approximately
5.9 million cubic yards of unused airspace.  Environtech has
approximately 24 years of total site life at current average
disposal levels.

     McLean.  The McLean County landfill is located in
Bloomington, Illinois.  The landfill consists of approximately 55
acres, of which approximately 33 acres are approved for waste
disposal.  The current waste receipts are minimal due to this
landfill's proximity to the Livingston landfill.

     Blackfoot.  The Blackfoot landfill in Evansville, Indiana
consists of approximately 379 acres, of which approximately 166
are permitted acres.  The site has available capacity of
approximately 17.8 million cubic yards of airspace.  This
includes 0.5 million cubic yards of airspace which will be
approved as a minor modification to the existing permit, pursuant
to the applicable state regulations.  The Blackfoot landfill has
approximately 55 years of total site life at current average
disposal levels.

     Wyandot.  The Wyandot landfill consists of approximately 344
acres in three proximate locations, and the Company has an option
to purchase up to approximately 94 adjacent additional acres in
the vicinity.  Approximately 87 of the owned acres are permitted,
and there are approximately 5.7 million cubic yards of unused
permitted airspace.  Cells developed to date at the Wyandot
landfill have been constructed with double composite liner
systems.  The Company has applied for a permit from applicable
regulatory authorities to use a single composite liner in
constructing new cells, which the Company believes should reduce
cell development costs.  In addition, the Company has applied for
a permit from the Ohio Environmental Protection Agency to expand
its landfill capacity by using the valley between two of the
hills that are currently permitted for waste disposal, as well as
the option acreage.  The Company anticipates that if it exercised
its option, obtained the required permits and constructed the
additional landfill areas, the Wyandot landfill would have
approximately 46 years of total site life at current disposal
levels.  Currently, however, the Wyandot landfill has
approximately 10 years of total site life at current average
disposal levels.

     Clarion.  The Clarion landfill consists of approximately 606
acres, of which approximately 60 are permitted acres.  There are
approximately 3.9 million cubic yards of unused permitted
airspace.  Cells developed at the Clarion landfill have been, and
due to regulatory requirements will continue to be, constructed
with double liner systems.  The Clarion landfill has
approximately 10 years of total site life at current average
disposal levels.

Transfer Stations

     The Company has an active program to acquire, develop, own,
operate and contract to receive waste volumes from transfer
stations in markets which are proximate to its operations.  The
use of transfer stations reduces the Company's costs associated
with the transportation of its collected waste and also increases
the market area served by the Company's landfills.  Presently,
the Company owns, operates or has exclusive contracts to receive
waste from a total of 20 transfer stations, including six in the
Missouri Region, three in the Illinois Region, three in the
southwestern Indiana Region, five in the Ohio Region and three in
the New England Region.  Typically, the Company acquires transfer
stations that will service its Company-owned landfills and expand
its geographic service area.

Collection Operations

     The Company collects solid waste from over 400,000
residential, commercial and industrial customers through its own
collection operations and through brokerage arrangements with
other haulers.  The Company's collection operations are conducted
generally within a 50-mile radius of either its transfer stations
or landfills, which allows the Company to serve a geographic area
within a radius of approximately 125 miles from its landfills.
The Company also contracts with local generators of solid waste
and directs the waste to either its own landfill or to a
third-party landfill or for additional handling at one of its
transfer stations.  During the year ended December 31, 1997, the
Company's captive waste constituted an average of approximately
73% of the solid waste disposed of at Company-owned landfills.
In addition, approximately 81% of the total tonnage collected by
the Company was disposed of at Company-owned landfills.

     Fees for the Company's commercial and industrial collection
services are determined by such factors as collection frequency,
type of equipment and containers furnished, the type, volume and
weight of the waste collected, the distance to the disposal or
processing facility and the cost of disposal or processing.  A
majority of the Company's commercial and industrial waste
collection services are performed under contracts.  Substantially
all of the Company's municipal solid waste collection services
are performed under contracts with municipalities.  These
contracts grant the Company exclusive rights to service all or a
portion of the residential homes in a specified community or
provide a central repository for residential waste drop-off.  The
Company also provides subscription residential collection
services directly to households.

Sales and Marketing

     The Company has a coordinated marketing strategy which is
formulated at the corporate level and implemented at the regional
level.  In addition to competitive pricing, the Company's
marketing strategy emphasizes quality service particularly with
respect to rapid turnaround time at its landfills.  Each manager
implements the Company's marketing strategy, which is overseen by
senior management.  Depending upon the size of the region and its
customer mix, each manager may focus on commercial, industrial,
residential or municipal accounts to a varying degree.  The
Company maintains periodic contact with all of its accounts to
increase customer retention.  Company salespersons call on
prospective customers in a specified geographic territory.

     Since the Company acquires its waste collection operations
primarily from entrepreneurs who generally do not have
independent sales forces, the Company often retains these
entrepreneurs during the transition period following the
acquisition of such operations to acquaint the Company's sales
force with the acquired companies' customer base.

     The Company has a diverse customer base, with no single
customer accounting for more than 10% of the Company's revenues
during the year ended December 31, 1997.  The Company does not
believe that the loss of any single customer would have a
material adverse effect on the Company's results of operations.

Competition

     The solid waste collection and disposal business is highly
competitive and requires substantial amounts of capital.  The
Company competes with numerous local and regional companies and,
in selected areas, with the large national waste management
companies.  The industry is led by several national waste
management companies, such as Waste Management, Inc.,
Browning-Ferris Industries, Inc., USA Waste Services, Inc.,
Republic Industries, Inc. and Allied Waste Industries, Inc., and
includes numerous local and regional companies of varying sizes
and competitive resources such as Casella Waste Systems, Inc.,
Eastern Environmental Services, Inc., Superior Services, Inc. and
Waste Industries, Inc.  The large national companies, as well as
a number of the regional companies, are significantly larger and
have greater financial resources than the Company.  The Company
also competes with those counties and municipalities that
maintain their own waste collection and disposal operations.
These counties and municipalities may have financial advantages
due to the availability to them of tax revenues and tax exempt
financing.  The Company competes primarily by charging
competitive prices and offering quality service.  Competitors may
reduce the price of their services in an effort to expand market
share or to win competitively bid municipal contracts.

     The solid waste collection and disposal industry is
currently undergoing significant consolidation, and the Company
encounters competition in its efforts to acquire landfills and
collection operations.  Accordingly, it may become uneconomical
for the Company to make further acquisitions or the Company may
be unable to locate or acquire suitable acquisition candidates at
price levels and on terms and conditions that the Company
considers appropriate, particularly in markets the Company does
not already serve.

     Competition in the disposal industry may also be affected by
the increasing national emphasis on recycling and other waste
reduction programs, which may reduce the volume of waste
deposited in landfills.

Liability Insurance and Bonding

     The Company carries a broad range of insurance for the
protection of its assets and operations that it believes is
customary to the waste management industry, including pollution
liability coverage.  Specifically, each of the Company's
landfills has pollution liability coverage of $10 million per
occurrence or $10 million in the aggregate subject to a $10,000
deductible.  Nevertheless, if the Company were to incur liability
for environmental damage which exceeds coverage limits or is not
covered by insurance, its business, financial condition and
results of operations could be materially adversely affected.

     The Company is required to post a performance bond or a bank
letter of credit or to provide other forms of financial assurance
in connection with closure and post-closure obligations with
respect to landfills and its other solid waste management
operations and may be required to provide such financial
assurance in connection with municipal residential collection
contracts.  As of December 31, 1997, the Company had outstanding
approximately $38.1 million of performance bonds.  If the Company
were unable to obtain surety bonds or letters of credit in
sufficient amounts, or to provide other required forms of
financial assurance, it would be unable to remain in compliance
with the Subtitle D Regulations or comparable state requirements
and, among other things, might be precluded from entering into
certain municipal collection contracts and obtaining or holding
landfill operating permits.

Employees

     At March 15, 1998, the Company employed approximately 1,314
employees, 78 of whom were managers or professionals, 1,045 of
whom were hourly paid employees involved in collection, transfer
and disposal operations, and 191 of whom were sales, clerical,
data processing or other administrative employees.  Certain of
the Company's employees at its Environtech and Livingston
landfills are represented by the International Brotherhood of
Operating Engineers and one of the Company's employees at its
City transfer station is represented by the International
Brotherhood of Teamsters.  The Company has no knowledge of any
other organizational efforts among its employees.  The Company
believes that its relations with its employees are good.

Risk Factors

Availability of Additional Acquisition Targets

     The Company's ongoing acquisition program is a key element
of its acquisition-based growth strategy for expanding its solid
waste management services.  Consequently, the future growth of
the Company depends in large part upon the successful
continuation of this acquisition program.  The Company may
encounter substantial competition in its efforts to acquire
landfills, transfer stations and collection companies.  There can
be no assurance that the Company will succeed in locating or
acquiring appropriate acquisition candidates at price levels and
on terms and conditions that the Company considers appropriate.

Integration of Acquisitions

     The financial position and results of operations of the
Company will depend to a large extent on the Company's ability to
integrate effectively the operations of the companies it has
acquired to date, and expects to acquire in the future, and to
realize expected efficiencies and economies of scale from such
acquisitions.  There can be no assurance that the Company's
efforts to integrate these operations will be effective, that
expected efficiencies and economies of scale will be realized or
that the Company will be able to successfully consolidate its
operations.  The failure to achieve any of these results could
have a material adverse effect on the Company's business,
financial condition and results of operations.

Ability to Manage Growth

     The Company's goal is to increase the scale of its
operations significantly through the acquisition of other solid
waste businesses and through internal growth.  Consequently, the
Company may experience periods of rapid growth with significantly
increased staffing level requirements.  Such growth could place a
significant strain on the Company's management and on its
operational, financial and other resources.  The Company's
ability to maintain and manage its growth effectively will
require it to expand its management information systems
capabilities and improve its operational and financial systems
and controls.  Moreover, the Company will need to attract, train,
motivate, retain and manage its senior managers, technical
professionals and other employees.  Any failure to expand its
management information system capabilities, to implement and
improve its operational and financial systems and controls or to
recruit appropriate additional personnel in an efficient manner
at a pace consistent with the Company's business growth could
have a material adverse effect on the Company's business,
financial condition and results of operations.

Highly Competitive Industry

     The solid waste collection and disposal business is highly
competitive and requires substantial amounts of capital.  The
Company competes with numerous solid waste management companies,
many of which are significantly larger and have greater financial
resources than the Company.  The Company also competes with those
counties, municipalities and solid waste districts that maintain
their own waste collection and disposal operations.  These
counties, municipalities and solid waste districts may have
financial advantages due to the availability to them of user
fees, charges or tax revenues and the greater availability to
them of tax-exempt financing.  In addition, competitors may
reduce the price of their services in an effort to expand market
share or to win competitively bid municipal contracts.  There can
be no assurance that the Company will be able to compete
successfully.

Funding of Future Capital Requirements; Prior Losses and Working
Capital Deficits

     The Company's acquisition-based growth strategy has resulted
in a steady increase in its capital requirements, and such
increase may continue in the future as the Company pursues its
strategy.  The Company recorded net losses to common stockholders
of approximately $3.7 million and $370,000 during the fiscal
years ended December 31, 1995 and 1996, respectively.  In
addition, the Company has incurred working capital deficits in
the past, and there can be no assurance that its available
working capital will be sufficient in the future as it pursues
its growth strategy.  Furthermore, in connection with a completed
acquisition, the Company may be obligated to make contingent cash
payments of up to approximately $37.5 million over the next nine
years if certain business development projects are achieved as a
result of that acquisition.  To the extent that internally
generated cash and cash available under the Credit Facility are
not sufficient to provide the cash required for future
operations, capital expenditures, acquisitions, earn-out and
contingent payments, debt repayment obligations and financial
assurance obligations, the Company will require additional equity
or debt financing in order to provide such cash.  There can be no
assurance, however, that such financing will be available or, if
available, will be on terms satisfactory to the Company.  Where
appropriate, the Company may seek to minimize the use of cash to
finance its acquisitions by using capital stock, assumption of
indebtedness or notes.  However, there can be no assurance the
owners of the businesses the Company may wish to acquire will be
willing to accept non-cash consideration in whole or in part.

Use of Leverage

     Historically, the Company has incurred significant debt
obligations in connection with financing its acquisitions and
business growth.  The Company has a $140 million Credit Facility
with a bank group led by ING (U.S.) Capital Corporation, as
administrative agent, Morgan Guaranty Trust Company of New York,
as syndication agent, Union Bank of California, N.A., as
documentation agent, BHF-Bank Aktiengesellschaft, as co-agent,
and Bank of America Illinois, as co-agent.  As of December 31,
1997, the Company's consolidated indebtedness was $23.1 million,
its consolidated total assets were $373.0 million and its
stockholders' equity was $297.4 million.  At March 1, 1998, the
Company's consolidated indebtedness had increased to
approximately $39.7 million.  The Company anticipates incurring
significant indebtedness in the future in order to fund all or a
portion of the purchase price of future acquisitions.  The
Company's ability to meet its debt service obligations will
depend upon its future performance, which, in turn, will be
subject to general economic conditions and to financial, business
and other factors affecting the operations of the Company, many
of which are beyond the Company's control.  If the Company fails
to generate sufficient cash flow to repay its debt, the Company
may be required to refinance all or a portion of its existing
debt or to obtain additional financing.  There can be no
assurance that such refinancing or any additional financing could
be obtained on terms favorable to the Company or at all.

Potential Liabilities Associated with Acquisitions

     The businesses acquired by the Company may have liabilities
that the Company did not discover or may have been unable to
discover during its pre-acquisition investigations, including
liabilities arising from environmental contamination or
non-compliance by prior owners with environmental laws or
regulatory requirements, and for which the Company, as a
successor owner or operator, may be responsible.  Any indemnities
or warranties, due to their limited scope, amount, or duration,
the financial limitations of the indemnitor or warrantor or other
reasons, may not fully cover such liabilities.

Dependence on Senior Management

     The Company is highly dependent on its senior management
team.  The loss of the services of any member of senior
management may have a material adverse effect on the Company's
business, financial condition and results of operations. In an
effort to minimize this risk, the Company has entered into
employment contracts with certain members of senior management.
The Company does not maintain "key man" life insurance with
respect to members of senior management except for a $2.0 million
policy maintained on the Company's President and Chief Executive
Officer.

Limitations on Internal Expansion

     The Company's operating program depends on its ability to
expand and develop its landfills, transfer stations and
collection operations.  The process of obtaining required permits
and approvals to operate or expand solid waste management
facilities, including landfills and transfer stations, has become
increasingly difficult and expensive, often taking several years,
requiring numerous hearings and compliance with zoning,
environmental and other regulatory requirements, and often being
subject to resistance from citizen or other groups.  There can be
no assurance that the Company will be successful in obtaining the
permits it requires or that such permits will not contain onerous
terms and conditions.  An inability to receive such permits and
approvals could have a material adverse effect on the Company's
business, financial condition and results of operations.  See "-
Extensive Environmental and Land Use Laws and Regulations."  In
some areas, suitable land may be unavailable for new landfill
sites.  There can be no assurance that the Company will be
successful in obtaining new landfill sites or expanding the
permitted capacity of its current landfills once its landfill
capacity has been consumed.  In such event, the Company could be
forced to dispose of collected waste at landfills operated by its
competitors, which could have a material adverse effect on the
Company's landfill revenues and collection expenses.

Dependence on Third Party Collection Operations

     A portion of the solid waste delivered to the Company's
landfills is delivered by third party collection companies under
informal arrangements or without long-term contracts.  If these
third parties discontinued their arrangements with the Company
and if the Company were unable to replace these third party
arrangements, the Company's business, financial condition and
results of operations might be materially adversely affected.

Extensive Environmental and Land Use Laws and Regulations

     The Company is subject to extensive and evolving
environmental and land use laws and regulations, which have
become increasingly stringent in recent years as a result of
greater public interest in protecting and cleaning up the
environment.  These laws and regulations affect the Company's
business in many ways, including as set forth below.

     Extensive Permitting Requirements.  In order to develop and
operate a landfill or other solid waste management facility, it
is necessary to obtain and maintain in effect one or more
facility permits and other governmental approvals, including
those related to zoning, environmental and land use.  In
addition, the Company may be required to obtain similar permits
and approvals in order to expand its existing landfill and solid
waste management operations.  These permits and approvals are
difficult and time consuming to obtain and are frequently subject
to community opposition, opposition by various local elected
officials or citizens and other uncertainties.  In addition,
after an operating permit for a landfill or other facility is
obtained, the permit may be subject to modification or revocation
by the issuing agency, and it may be necessary to obtain
periodically a renewal of the permit, which may reopen
opportunities for opposition to the permit.  Moreover, from time
to time, regulatory agencies may delay the review or grant of
these required permits or approvals or may modify the procedures
or increase the stringency of the standards applicable to its
review or grant of such permits or approvals.  In addition, the
Company may not be able to ensure that its landfill operations
are included and remain in the solid waste management plan of the
state or county in which such operations are conducted.  The
Company may also have difficulty obtaining host agreements with
counties or local communities, or existing host communities may
demand modifications of existing host agreements in connection
with planned expansions, either of which could adversely affect
the Company's operations and increase the Company's costs and
reduce its margins.  There can be no assurance that the Company
will be successful in obtaining and maintaining in effect the
permits and approvals required for the successful operation and
growth of its business, including permits or approvals required
for planned landfill expansions, and the failure by the Company
to obtain or maintain in effect a permit significant to its
business could materially adversely affect the Company's
business, financial condition and results of operations.

     Design, Operation and Closure Requirements.  The design,
operation and closure of landfills are subject to extensive
regulations.  These regulations include, among others, the
regulations (the "Subtitle D Regulations") establishing minimum
federal requirements adopted by the United States Environmental
Protection Agency (the "EPA") in October 1991 under Subtitle D of
the Resource Conservation and Recovery Act of 1976 ("RCRA").  The
Subtitle D Regulations generally became effective on October 9,
1993 (except for more stringent financial assurance requirements,
which became effective April 9, 1997).  The Subtitle D
Regulations require all states to adopt regulations regarding
landfill design, operation and closure requirements that are as
stringent as, or more stringent than, the Subtitle D Regulations.
All states in which the Company's landfills are located have in
place extensive landfill regulations consistent with the Subtitle
D requirements.  These federal and state regulations require the
Company to design the landfill in accordance with stringent
technical requirements, monitor groundwater, post financial
assurances, and fulfill landfill closure and post-closure
obligations.  These regulations could also require the Company to
undertake investigatory, remedial and monitoring activities, to
curtail operations or to close a landfill temporarily or
permanently.  Furthermore, future changes in these regulations
may require the Company to modify, supplement, or replace
equipment or facilities at costs which may be substantial.

     Legal and Administrative Proceedings.  In the ordinary
course of its business, the Company may become involved in a
variety of legal and administrative proceedings relating to land
use and environmental laws and regulations.  These may include
proceedings by federal, state or local agencies seeking to impose
flow control requirements, civil or criminal penalties on the
Company for violations of such laws and regulations, or to impose
liability on the Company under the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980 ("CERCLA") or
comparable state statutes, or to revoke or deny renewal of a
permit; actions brought by citizens' groups, adjacent landowners
or governmental entities opposing the issuance of a permit or
approval to the Company or alleging violations of the permits
pursuant to which the Company operates or laws or regulations to
which the Company is subject; and actions seeking to impose
liability on the Company for any environmental damage at its
landfill sites or that its landfills or other properties may have
caused to adjacent landowners or others, or at sites to which it
transported waste, including groundwater or soil contamination.
The Company could incur substantial legal expenses during the
course of the aforementioned proceedings, and the adverse outcome
of one or more of these proceedings could materially adversely
affect the Company's business, financial condition and results of
operations.

     During the ordinary course of its operations, the Company
has from time to time received, and expects that it may in the
future receive, citations or notices from governmental
authorities that its operations are not in compliance with its
permits or certain applicable environmental or land use laws and
regulations.  The Company generally seeks to work with the
authorities to resolve the issues raised by such citations or
notices.  There can be no assurance, however, that the Company
will always be successful in this regard, and the failure to
resolve a significant issue could result in one or more of the
adverse consequences to the Company described below under
"Potential Liabilities."

     Potential Liabilities.  There may be various adverse
consequences to the Company in the event that a facility owned or
operated by the Company (or a predecessor owner or operator whose
liabilities the Company may have acquired expressly or under
successor liability theories) causes environmental damage, in the
event that waste transported by the Company (or a predecessor)
causes environmental damage at another site, in the event that
the Company fails (or a predecessor failed) to comply with
applicable environmental and land use laws and regulations or the
terms of a permit or outstanding consent order or in the event
the Company's owned or operated facility or the soil or
groundwater thereunder is or becomes contaminated.  These may
include the imposition of substantial monetary penalties on the
Company; the issuance of an order requiring the curtailment or
termination of the operations involved or affected; the
revocation or denial of permits or other approvals necessary for
continued operation or landfill expansion; the imposition of
liability on the Company in respect of any environmental damage
(including groundwater or soil contamination) at its landfill
sites or that its landfills or other facilities or other
Company-owned or operated facilities caused to adjacent
landowners or others or environmental damage at another site
associated with waste transported by the Company; the imposition
of liability on the Company under CERCLA or under comparable
state laws; and criminal liability for the Company or its
officers.  Any of the foregoing could materially adversely affect
the Company's business, financial condition and results of
operations.

     CERCLA and analogous state laws impose retroactive strict
joint and several liability on various parties that are, or have
been, associated with a site from which there has been, or is
threatened, a release of any hazardous substance (as defined by
CERCLA) into the environment.  Liability under RCRA, CERCLA and
analogous state laws may include responsibility for costs of site
investigations, site cleanup, site monitoring, natural resources
damages and property damages.  Liabilities under RCRA, CERCLA and
analogous state laws can be very substantial and, if imposed upon
the Company, could materially adversely affect the Company's
business, financial condition and results of operations.

     In the ordinary course of its landfill and waste management
operations and in connection with its review of landfill and
other operations to be acquired, the Company has discovered at
one landfill, and may in the future discover at other landfills
or waste management facilities, indications of groundwater
contamination.  In such events, the Company would seek or be
required to determine the magnitude and source of the problem
and, if appropriate or required by applicable regulations, to
design and implement measures to remedy, or halt the spread of,
the contamination.  There can be no assurance, however, that
contamination discovered at a landfill or at other Company sites
will not result in one or more of the adverse consequences to the
Company described above.

     Type, Quantity and Source Limitations.  Certain permits and
approvals may limit the types of waste that may be accepted at a
landfill or the quantity of waste that may be accepted at a
landfill during a given time period.  In addition, certain
permits and approvals, as well as certain state and local
regulations, may limit a landfill to accepting waste that
originates from specified geographic areas or seek to restrict
the importation of out-of-state waste or otherwise discriminate
against out-of-state waste.  Generally, restrictions on the
importation of out-of-state waste have not withstood judicial
challenge.  However, from time to time federal legislation is
proposed which would allow individual states to prohibit the
disposal of out-of-state waste or to limit the amount of
out-of-state waste that could be imported for disposal and would
require states, under certain circumstances, to reduce the
amounts of waste exported to other states.  Although such
legislation has not yet been adopted by Congress, if this or
similar legislation is enacted, states in which the Company
operates landfills could act to limit or prohibit the importation
of out-of-state waste.  Such state actions could materially
adversely affect landfills within those states that receive a
significant portion of waste originating from out-of-state.

     In addition, certain states and localities may for economic
or other reasons restrict the exportation of waste from their
jurisdiction or require that a specified amount of waste be
disposed of at facilities within their jurisdiction.  In 1994,
the United States Supreme Court held unconstitutional, and
therefore invalid, a local ordinance that sought to impose flow
controls on taking waste out of the locality.  However, certain
state and local jurisdictions continue to seek to enforce such
restrictions and, in certain cases, the Company may elect not to
challenge such restrictions based upon various considerations.
In addition, the aforementioned proposed federal legislation, if
adopted, could allow states and localities to impose certain flow
control restrictions.  These restrictions could result in the
volume of waste going to landfills being reduced in certain
areas, which may materially adversely affect the Company's
ability to operate its landfills at their full capacity and/or
affect the prices that can be charged for landfill disposal
services.  These restrictions may also result in higher disposal
costs for the Company's collection operations.  If the Company
were unable to pass such higher costs through to its customers,
the Company's business, financial condition and results of
operations could be materially adversely affected.
Limits on Insurance Coverage

     There can be no assurance that the Company's pollution
liability insurance will provide sufficient coverage in the event
an environmental claim were made against the Company or that the
Company will be able to maintain in place such insurance at
reasonable costs.  An uninsured or underinsured claim of
sufficient magnitude could have a material adverse effect on the
Company's business, financial condition and results of
operations.

Incurrence of Charges Related to Capitalized Expenditures

     In accordance with generally accepted accounting principles,
the Company capitalizes certain expenditures and advances
relating to acquisitions, pending acquisitions and landfill
development and expansion projects.  Indirect acquisition costs,
such as executive salaries, general corporate overhead, public
affairs and other corporate services, are expensed as incurred.
The Company's policy is to charge against earnings any
unamortized capitalized expenditures and advances (net of any
portion thereof that the Company estimates will be recoverable,
through sale or otherwise) relating to any operation that is
permanently shut down, any pending acquisition that is not
consummated, and any landfill development or expansion project
that is not or not expected to be successfully completed.
Therefore, the Company may be required to incur a charge against
earnings in future periods, which charge, depending upon the
magnitude thereof, could materially adversely affect the
Company's business, financial condition and results of
operations.

Use of Alternatives to Landfill Disposal

     Alternatives to landfill disposal, such as recycling and
composting, are increasingly being used.  In addition,
incineration is an alternative to landfill disposal in certain of
the Company's markets.  There also has been an increasing trend
at the state and local levels to mandate recycling and waste
reduction at the source and to prohibit the disposal of certain
type of wastes, such as yard wastes, at landfills.  These
developments may result in the volume of waste going to landfills
being reduced in certain areas, which may affect the Company's
ability to operate its landfills at their full capacity or affect
the prices that can be charged for landfill disposal services.
For example, Illinois, Ohio and Pennsylvania, states in which the
Company operates landfills, have adopted bans on the disposal of
yard waste or leaves in landfills located in those states, and
all of the states in which the Company operates landfills have
adopted rules restricting or limiting disposal of tires at
landfills.  In addition, each of the states in which the Company
operates landfills has adopted plans or requirements which set
goals for specified percentages of certain solid waste items to
be recycled.  These recycling goals are being phased in over the
next few years.  These alternatives, if and when adopted and
implemented, may have a material adverse effect on the business,
financial condition and results of operations of the Company.

Ability to Meet Financial Assurance Obligations

     The Company is required to post a performance bond or a bank
letter of credit or to provide other forms of financial assurance
in connection with closure and post-closure obligations with
respect to landfills or its other solid waste management
operations and may be required to provide such financial
assurance in connection with municipal residential collection
contracts.  If the Company were unable to obtain surety bonds in
sufficient amounts, or to provide other required forms of
financial assurance, it would be unable to remain in compliance
with the Subtitle D Regulations or comparable state requirements
and, among other things, might be precluded from entering into
certain municipal collection contracts and obtaining or holding
landfill operating permits.

Seasonality

     The Company's revenues tend to be somewhat lower in the
winter 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 where the Company operates tends to decrease during the
winter months.  In addition, particularly harsh weather
conditions may delay the development of landfill capacity and
otherwise result in the temporary suspension of certain of the
Company's operations and could materially adversely affect the
Company's overall business, financial condition and results of
operations.

Anti-Takeover Provisions

     The Board of Directors may issue up to 5,000,000 shares of
Preferred Stock in the future without stockholder approval upon
such terms as the Board of Directors may determine.  The rights
of the holders of Common Stock will be subject to, and may be
adversely affected by, the rights of the holders of any Preferred
Stock that may be issued in the future.  The issuance of
Preferred Stock, while providing flexibility in connection with
possible acquisitions and other corporate purposes, could have
the effect of delaying or preventing a change in control of the
Company without further action by the stockholders.  The Company
has no present plans to issue any shares of Preferred Stock.  In
addition, the Company is subject to the anti-takeover provisions
of Section 203 of the Delaware General Corporation Law, which
prohibits the Company from engaging in a "business combination"
with an "interested stockholder" for a period of three years
after the date of the transaction in which the person became an
interested stockholder, unless the business combination is
approved in a prescribed manner.  The application of Section 203
also could have the effect of delaying or preventing a change of
control of the Company.

Absence of Dividends

     The Company has never declared or paid dividends on its
Common Stock and does not anticipate paying dividends in the
foreseeable future.

ITEM 2. PROPERTIES

     The principal fixed assets used by the Company in connection
with its landfill operations are its landfills which are
described under Item 1.  "Business-Operations-Landfills."  The
nine landfills currently owned by the Company are situated on
sites owned by the Company.

     The principal fixed assets used by the Company in its
collection operations and transfer stations are approximately 232
acres of land used for transfer stations and other facilities
related to collection operations (of which approximately 202
acres are owned and 30 acres are leased).

     The Company's corporate headquarters are located in Burr
Ridge, Illinois, where it leases approximately 8,000 square feet
of space.

ITEM 3.   LEGAL PROCEEDINGS

     In the normal course of its business and as a result of the
extensive governmental regulation of the waste industry, the
Company may periodically become subject to various judicial and
administrative proceedings involving federal, state or local
agencies.  In these proceedings, an agency may seek to impose
fines on the Company to revoke, or to deny renewal of, an
operating permit held by the Company.  From time to time, the
Company also may be subject to actions brought by citizens'
groups or adjacent landowners in connection with the permitting
and licensing of its landfills or transfer stations, or alleging
environmental damage or violations of the permits and licensees
pursuant to which the Company operates.

     In addition, the Company is or may become party to various
claims and suits pending for alleged damages to persons and
property, alleged violation of certain laws and for alleged
liabilities arising out of matters occurring during the normal
operation of the waste management business.  In the opinion of
management, the liability, if any, under these claims and suits
would not materially adversely affect the business, financial
condition or results of operations of the Company.

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

     There were no matters submitted to a vote of security
holders during the fourth quarter of 1997.
                         PART II


ITEM 5.   MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
          STOCKHOLDER MATTERS.

     The Common Stock of the Company has been quoted on the
Nasdaq National Market under the symbol ("ADSI") since July 26,
1996, the date of the commencement of the Company's initial
public offering.  The following table sets forth, for the periods
indicated, the high and low closing prices of the Common Stock as
reported on the Nasdaq National Market:



                                                  High    Low

1996
3rd Quarter. . . . . . . . . . . . . . . . . . . $18.25  $ 9.00
4th Quarter. . . . . . . . . . . . . . . . . . . $18.50  $15.50
1997
1st Quarter. . . . . . . . . . . . . . . . . . . $18.00  $16.50
2nd Quarter. . . . . . . . . . . . . . . . . . . $25.06  $16.38
3rd Quarter. . . . . . . . . . . . . . . . . . . $33.75  $21.00
4th Quarter. . . . . . . . . . . . . . . . . . . $37.50  $29.00

     On March 25, 1998, there were approximately 1,950 beneficial
owners of the Common Stock.

     The Company has never declared or paid any dividends on its
Common Stock, and neither ADS nor CDI has declared or paid any
dividends on its common stock.  The Company and its Board of
Directors currently intend to retain any earnings for use in the
operation and expansion of the Company's business and do not
anticipate paying any dividends on the Common Stock for the
foreseeable future.  The Credit Facility prohibits the payment of
cash dividends without prior bank approval.


ITEM 6.   SELECTED CONSOLIDATED FINANCIAL DATA

     The following table presents selected consolidated statement
of operations, balance sheet and other data of the Company for
the periods presented.  See the Notes to the Consolidated
Financial Statements included elsewhere herein for information
concerning the basis of presentation.  The following selected
consolidated financial data as of December 31, 1996 and 1997 and
for each of the three years in the period ended December 31, 1997
have been derived from the audited consolidated financial
statements of the Company included elsewhere in this Annual
Report on Form 10-K and should be read in conjunction with
"Management's Discussion and Analysis of Financial Condition and
Results of Operations."  The selected consolidated financial data
as of December 1993, 1994 and 1995 and for the years ended
December 31, 1993 and 1994 are derived from audited consolidated
financial statements that are not included herein.

                              Years Ended December 31,

               1993    1994       1995       1996         1997
               (Dollars in thousands, except per share amount)

Statement of Operations Data:

Revenues. . $ 7,730   $18,517   $ 30,004     $56,804    $121,363
Cost of
 operations.  5,750    12,647     17,286      30,376      65,947
Selling,
 general and
 administra-
 tive expense 1,646     4,910      5,882       8,328      16,821
Depreciation
 and amorti-
 zation
 expense. . .  1,166     3,226     6,308      12,334      21,975
               -----     -----     -----      ------      ------
Operating
 income. . . . (832)   (2,266)       528       5,766      16,620
Interest
 expense. . .  (417)   (1,497)    (3,030)     (5,745)     (6,223)
Interest
 income. . . .   35         2        189         260         201
Other income. .   -         -          -         179         274
                -----   ------     ------      ------      ------

Income (loss)
 before
 income
 taxes and
 extra-
 ordinary
 item. . . . (1,214)    (3,761)    (2,313)       460      10,872
Income tax
 benefit
 (expense). . . 391      1,372       (332)      (245)      3,531
              ------     -----      ------      -----     ------
Income (loss)
 before extra-
 ordinary
 item. . . . ..(832)    (2,389)    (2,645)       215       7,341
Extraordinary
 item-gain
 (loss) on
 early retire-
 ment of debt. . 74          -       (908)      (476)          -
                ----     ------     ------      -----      ------
Net income
 (loss). . . . (749)    (2,389)    (3,553)      (261)      7,341
Preferred
 stock dividend
 requirement.     -          -       (190)      (109)          -
               -----     ------     ------      -----      -----
Net income
 (loss) appli-
 cable to common
 stock-
 holders. . . $(749)   $(2,389)   $(3,743)    $ (370)    $ 7,341
              ======   ========   ========    =======    ========
Basic earnings
 per common
 share: (1)
 Income
 (loss) before
 extra-
 ordinary
 item . . . . $(.67)   $ (1.07)   $  (.85)      (.02)    $   .56
Extraordinary
 item . . . .   .06          -       (.27)      (.07)          -
              ------   --------   --------    -------    --------
Net income
 (loss) . . . $(.61)   $ (1.07)   $ (1.12)     $(.05)    $   .56
              ======   ========   ========    =======    ========
Weighted
 average
 common
 stock
 outstand-
 ing . .  1,219,042  2,224,205  3,340,512  7,063,928  13,177,346
          =========  ========= ========== ==========  ==========
Diluted
 earnings
 per
 common
 share:
 Income
 (loss)
 before
 extra-
 ordinary
 item. . . .  $(.67)   $ (1.07)    $ (.85)     $ .01      $  .53
Extraordinary
 item . . . .   .06        ---       (.27)      (.06)        ---
              ------   --------    -------     ------     ------
Net income
 (loss) . . .  (.61)   $ (1.07)   $ (1.12)     $(.05)     $  .53
              =======  ========    =======     ======     ======
Weighted
 average
 common stock
 and common
 stock
 equivalent
 shares
 out-
 stand-
 ing . .  1,219,042  2,224,205  3,340,512  7,465,050  13,822,337




                                        December 31,
                          1993    1994    1995     1996    1997
                                 (in thousands)

Balance Sheet Data:
Cash and cash
 equivalents . . . . . $ 2,134  $  548  $ 6,383  $ 2,301  $ 2,426
Working capital
 (deficit). . . . . . .    788  (2,237)  (8,819)   1,219      721
Property and equipment,
 net. . . . . . . . . . 15,156  17,062   81,250   93,692  174,340
Total assets. . . . . . 35,512  37,557  114,693  144,986  373,024
Long-term obligations,
 net of current portion 16,073  18,487   48,789   65,445   20,788
Redeemable preferred
 stock of subsidiary.      ---     ---    1,908      ---      ---
Total stockholders'
 equity. . . . . . .    12,531  12,132   33,855   58,097  297,375

(1) The Company adopted Statement of Financial Accounting
Standards (SFAS) No. 128, Earnings per Share, during the fourth
quarter of 1997.  SFAS No. 128 replaced the calculation of
primary and fully diluted earnings per common share with basic
and diluted earnings per common share.  Earnings (loss) per
common share amounts have been restated, where appropriate.



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

     The following discussion should be read in conjunction with
the "Selected Consolidated Financial Data," the Company's
Consolidated Financial Statements and the notes thereto included
elsewhere herein.

General

     Revenues.  The Company's revenues are attributable primarily
to fees charged to customers for waste collection, transfer and
disposal services.  The Company's collection services are
generally provided under direct agreements with its customers or
pursuant to contracts with municipalities.  Commercial and
municipal contract terms, where used, generally range from one to
five years and commonly have automatic renewal options.  A
relatively small portion of such agreements also provide for the
prepayment of certain fees, which fees are reflected as deferred
revenues.

     The table below shows, for the periods indicated, the
percentage of the Company's total revenues attributable to
services provided.  The Company's revenue derived from landfill
operations increased substantially with the acquisition of the
Clarion, Wyandot and Livingston landfills in separate closings in
June, August, and November 1995 (collectively, the "CDI
Acquisition").  Since the CDI Acquisition, the Company has
acquired proportionately more collection operations than landfill
operations, resulting in a decreasing overall percentage of
revenues attributable to landfill operations.


                                  Years Ended December 31,
                              1995          1996         1997

Collection (1) . . . . .      55.3%         47.5%        55.6%
Transfer . . . . . . . .       5.0           2.1          5.8
Landfill (1) . . . . . .      39.0          49.9         37.9
Other. . . . . . . . . .       0.7           0.5          0.7
                             ------        ------       ------
    Total Revenues. . . .    100.0%        100.0%       100.0%
                             ======        ======       ======

_______________
(1) The portion of collection revenues attributable to disposal
charges for waste collected by the Company and disposed of at the
Company's landfills has been excluded from collection revenues
and included in landfill revenues.

     A component of the Company's business strategy is to
maximize internalization of waste it collects and thereby realize
higher margins from its operations. By disposing of waste at
Company-owned landfills, the Company retains the margin generated
through disposal operations that would otherwise be earned by
third-party landfills. During the year ended December 31, 1997,
the Company's captive waste (which includes waste from the
Company's collection operations and third-party haulers operating
under long-term collection contracts) constituted an average of
approximately 73% of the solid waste disposed of at its
landfills. In addition, approximately 81% of the total tonnage
collected by the Company was disposed of at Company-owned
landfills.

     Expenses.  Cost of operations include labor, maintenance and
repairs, equipment and facility rent, utilities and taxes, the
costs of ongoing environmental compliance, safety and insurance,
disposal costs and costs of independent haulers transporting
Company waste to disposal sites.  Disposal costs include certain
landfill taxes, host community fees, landfill site maintenance,
fuel and other equipment operating expenses and provision for
post-closure expenses, consisting of cap maintenance, groundwater
monitoring, methane gas control and recovery and leachate
treatment/disposal, anticipated to be incurred in the future.

     Selling, general and administrative ("SG&A") expenses
include management, clerical and administrative compensation,
overhead, sales costs, community relations expenses, provisions
for estimated uncollectible accounts receivable and unrealizable
acquisition costs and management fees paid to the Company's
principal stockholder (which terminated upon closing of the
Company's initial public offering in July 1996).

     Depreciation and amortization expense includes depreciation
of fixed assets, closure costs and amortization of landfill
airspace, goodwill, other intangibles and loan origination fees.
The amount of landfill amortization expense related to airspace
consumption can vary materially from landfill to landfill
depending upon the purchase price, landfill configuration and
cell development costs.

     Certain landfill development costs, such as engineering,
upgrading, construction, interest and permitting costs, are
capitalized and amortized based on airspace consumed.  All of the
Company's capitalized expenditures relating to cell development
and landfill expansion work are in connection with cells for
which the Company holds a permit for development.  The Company
believes that the costs associated with engineering, owning and
operating landfills will increase in the future as a result of
federal, state and local regulations and a growing community
awareness of the landfill permitting process.  Although there can
be no assurance, the Company believes that it will be able to
implement price increases sufficient to offset these increased
expenses. All indirect landfill development costs, such as
executive salaries, general corporate overhead, public affairs
and other corporate services, are expensed as incurred.

     The Company capitalizes engineering, legal, accounting and
other direct costs incurred in connection with potential
acquisitions, accounted for using the purchase method for
business combinations.  The Company, however, routinely evaluates
such capitalized costs and expenses those costs related to
acquisitions not likely to occur.  Indirect acquisition costs,
such as executive salaries, general corporate overhead and other
corporate services, are expensed as incurred.

     Accrued closure and post-closure costs represent an estimate
of the current value of the future obligations associated with
closure and post-closure monitoring of non-hazardous solid waste
landfills currently owned by the Company.  Site specific closure
and post-closure engineering cost estimates are prepared annually
for landfills owned by the Company.  Estimated costs are accrued
based on accepted tonnage as landfill airspace is consumed.  The
Company periodically updates its estimates of future closure and
post-closure costs.  These changes are accounted for on a
prospective basis.  The Company expects its closure and
post-closure costs per ton to decrease as it expands landfill
capacity and as such costs are amortized over greater airspace.

     The Company has estimated that, as of December 31, 1997,
closure costs expected to occur during the operating lives of
these facilities and expensed over these facilities' useful lives
will approximate $17.3 million.  In addition, the Company has
estimated that, as of December 31, 1997, total costs for
post-closure activities, including cap maintenance, groundwater
monitoring, methane gas control and recovery and leachate
treatment/disposal for up to 30 years after closure in certain
cases, will be approximately $54.4 million.  The accruals reflect
relatively young landfills with estimated remaining lives, based
on current waste flows, that range from approximately three to 50
years, and an estimated average remaining life of greater than 20
years.

     The Company is in the process of conducting a comprehensive
review of its computer systems to identify the systems that could
be affected by the Year 2000 issue and believes that the Year
2000 issue should not pose any significant operational problems
for the Company.  The Company does not expect that the
expenditures related to the Year 2000 issue will have a material
effect on its financial position or results of operations in any
year.

Results of Operations

     The following table sets forth items in the Company's
consolidated statement of operations as a percentage of revenues
for the periods indicated.

                                  Years Ended December 31,
                              1995          1996         1997

Revenues . . . . . . . . .   100.0%        100.0%       100.0%
Cost of operations . . . .    57.6          53.5         54.3
Selling, general and
  administrative expenses     19.6          14.6         13.9
Depreciation and
  amortization expense . .    21.0          21.7         18.1
                             ------        ------       ------
Operating income . . . . .     1.8          10.2         13.7
Interest expense, net. . .    (9.5)         (9.7)        (5.0)
Other income . . . . . . .       -           0.3          0.2
Income tax expense . . . .    (1.1)         (0.5)        (2.9)
Extraordinary loss, net
  of income tax . . . . .     (3.0)         (0.8)           -
                              -----         -----         ----
     Net income (loss) . .   (11.8)%        (0.5)%        6.0%
                             =======        ======        ====
EBITDA margin(1) . . . . .    22.8%         31.9%        31.8%


  (1) EBITDA margin represents EBITDA expressed as a percentage
of revenues.

Years Ended December 31, 1997 and 1996

     Revenues.   Revenues in 1997 increased $64.6 million to
$121.4 million from $56.8 million in 1996. Approximately $55.8
million of the increase is attributable to the effects of
companies acquired during 1996 and 1997. Approximately $8.8
million is attributable to increases in revenues in operations
owned more than twelve months.

     Cost of Operations.  Cost of operations in 1997 was $65.9
million compared to $30.4 million in 1996.  As a percentage of
revenues, cost of operations was 54.3% in 1997 compared to 53.5%
in 1996.  The increase in cost of operations as a percentage of
revenues is due to the impact of an increased number of
collection operations versus landfill operations in 1997 compared
to 1996.  Collection operations generally have higher operating
costs than landfill operations.

     Selling, General, and Administrative Expense.  SG&A expenses
increased to $16.8 million in 1997 compared to $8.3 million in
1996.  As a percentage of revenues, SG&A expenses decreased to
13.9% in 1997 from 14.6% in 1996. The decreases in SG&A expenses
as a percentage of revenues is due primarily to a significant
increase in revenue producing assets, while corporate and other
related administrative expenses increased moderately.

     Depreciation and Amortization Expense.  Depreciation and
amortization expense was $22.0 million in 1997 compared to $12.3
million in 1996.  The increase in depreciation and amortization
expense is due primarily to the Company's growth through
acquisitions.  As a percentage of revenues, depreciation and
amortization expense was 18.1% and 21.7% for 1997 and 1996,
respectively.  The decline in depreciation and amortization
expense as a percentage of revenues from 1996 to 1997 is due
primarily to the reduction in the relative concentration of
landfill assets, which typically have higher depreciation and
amortization expense than collection operations.

     Net Interest Expense.  Net interest expense was $6.0 million
in 1997 compared to $5.5 million in 1996, which reflects the
additional debt incurred to complete certain 1997 acquisitions.

     Income Taxes.  The Company recorded an income tax provision
of $3.5 million in 1997 compared to $245,000 in 1996, reflecting
the increased taxable income generated, partially offset by
utilization of net operating loss carryforwards.

Years Ended December 31, 1996 and 1995

     Revenues.  Revenues in 1996 were $56.8 million compared to
$30.0 million in 1995.  Approximately $17.1 million of the
increase was attributable to the impact of the full year
contribution from the CDI Acquisition.  In addition, the Company
completed 16 acquisitions in 1996, which accounted for
approximately $6.3 million of the increase in revenues.

     Cost of Operations.  Cost of operations in 1996 was $30.4
million compared to $17.3 million in 1995, an increase
corresponding primarily to the Company's revenue growth described
above.  As a percentage of revenues, cost of operations declined
to 53.5% in 1996 from 57.6% in 1995, due primarily to the
following factors.  The Company's proportion of landfill
operations, which generally have lower operating costs than
collection operations, has increased as a result of the full year
contribution of the CDI Acquisition.  In addition, operating cost
savings occurred as a result of the consolidation of the acquired
Missouri collection operations and the full year impact of the
new transfer stations opened in the Missouri region.

     Selling, General, and Administrative Expenses.  SG&A
expenses were $8.3 million in 1996 compared to $5.9 million in
1995.  The increase in the SG&A expenses resulted from the full
year impact of the CDI Acquisition as well as increased expenses
from the 16 acquisitions completed in 1996.  As a percentage of
revenues, SG&A expenses declined to 14.6% in 1996 from 19.6% in
1995.  The decrease in SG&A expense as a percentage of revenues
was due primarily to a significant increase in revenue, while
corporate and other related administrative expenses increased
moderately.  In 1996, the Company terminated a management
agreement with an affiliate of its principal shareholder,
pursuant to which a management fee of $466,000 was paid in 1996.

     Depreciation and Amortization Expense.  Depreciation and
amortization expense for 1996 was $12.3 million compared to $6.3
million in 1995.  The increase is due primarily to the CDI
Acquisition which significantly increased landfill airspace
amortization and provision for closure costs, and to a lesser
extent, the capital expenditures and goodwill associated with
acquisitions consummated in 1996.  As a percentage of revenues,
depreciation and amortization expense was 21.7% during 1996
versus 21.0% in 1995.  The relatively high percentages are
primarily due to the configuration of the Wheatland landfill in
1995 and the high concentration of the Company's assets in
landfills following the CDI Acquisition in 1996.  Depreciation
and amortization expense is expected to decline as a percentage
of revenues in future periods as the concentration of the
Company's assets in landfills diminishes due to the full year
impact of the 1996 collection company acquisitions and as the
Company reduces future cell development cost.  Net fixed assets
increased to $93.7 million in 1996 from $81.3 million in 1995 and
goodwill, net of accumulated amortization expense, increased to
$31.2 million in 1996 from $15.7 million in 1995.

     Net Interest Expense.  Net interest expense was $5.5 million
in 1996 compared to $2.8 million in 1995.  This
increase is attributable to the full year impact of additional
debt incurred to complete the CDI Acquisition and the 16
acquisitions completed in 1996.

     Income Taxes.  The Company recorded an income tax provision
of $245,000 and $332,000 for 1996 and 1995, respectively.  The
1996 provision reflects the Company having consolidated taxable
income of $460,000.  Although the Company recorded a net loss in
1995, the Company recorded an income tax provision because the
Company's subsidiaries were not then consolidated and CDI
reported a profit.

     Extraordinary Loss.  In 1996, the Company recognized an
extraordinary loss of $476,000, representing the write-off of
unamortized debt issuance costs in connection with the
refinancing of its prior credit facility.

Liquidity and Capital Resources

     Due to the capital intensive nature of the solid waste
industry and the Company's focus on an acquisition-based growth
strategy, the Company has used, and expects to continue using,
substantially all cash generated from operations to fund
acquisitions, capital expenditures and landfill development.
Historically, the Company has satisfied its acquisition, capital
expenditure and working capital needs primarily through equity
and bank financings.  There can be no assurance that such
financing will continue to be available.

     Net cash provided by operating activities for 1997 increased
to $31.1 million compared to $10.3 million for the same period in
1996.  The increase was primarily due to acquisition related
activities which resulted in an improvement in net income to $7.3
million in 1997 compared to a net loss of $0.3 million in the
prior year, an increase in depreciation and amortization of $9.6
million over the prior period, an increase in other long term
liabilities of $6.0 million, offset by an increase in accounts
receivable of $8.6 million.

     Net cash used in investing activities increased to $177.4
million in 1997 from $37.7 million in the prior year.  The
increase was due primarily to payments for acquisitions of $153.0
million completed in 1997 and an increase of $10.3 million in
capital expenditures for 1997 compared to 1996.  The Company's
capital expenditure requirements have increased significantly,
reflecting the Company's rapid growth by acquisition and
development of additional revenue producing assets, and will
increase further as the Company continues to pursue its
acquisition-based growth strategy.  During 1997, the Company
spent $24.3 million in capital expenditures, of which $10.3
million was for cell development.  In fiscal year 1998, the
Company expects to spend approximately $29 million for capital
expenditures on operations owned as of December 31, 1997, of
which approximately $9 million is anticipated to be used for cell
development.

     Net cash provided by financing activities totaled $146.4
million for 1997, compared to $23.2 million for 1996 reflecting
borrowings of $141.2 million in 1997 under the Company's then
existing term and revolving credit facilities to fund
acquisitions.  Repayments under the Company's Credit Facility
totaled $188.6 million, funded primarily by the net proceeds of
$194.0 million from offerings of Common Stock in May 1997 and in
October 1997.

     The Credit Facility provides the Company with a revolving
line of credit of $140 million to be used for acquisitions (of
which $20 million may be used for working capital and letter of
credit purposes).  The Credit Facility bears interest at rates
per annum equal to, at the Company's discretion, either: (i) the
higher of (a) the federal funds rate plus 0.5% and (b) the prime
rate, plus an applicable margin or (ii) the London Interbank
Offered Rate ("LIBOR"), plus an applicable margin, and matures in
2002.  As of March 1, 1998, the Company had borrowed $34.4
million under the Credit Facility.  As of such date, the interest
rates on the various loans under the Credit Facility ranged from
6.63% to 8.50% and the total unused availability under the Credit
Facility was approximately $105.6 million.

Inflation and Prevailing Economic Conditions

     To date, inflation has not had a significant impact on the
Company's operations.  Consistent with industry practice, most of
the Company's contracts provide for a pass through of certain
costs, including increases in landfill tipping fees and, in some
cases, fuel costs. The Company therefore believes it should be
able to implement price increases sufficient to offset most cost
increases resulting from inflation.  However, competitive factors
may require the Company to absorb at least a portion of these
cost increases, particularly during periods of high inflation.
The Company is unable to determine the future impact of a
sustained economic slowdown.

Seasonality

     The Company's revenues tend to be somewhat lower in the
winter 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 where the Company operates tends to decrease during the
winter months.  In addition, particularly harsh weather
conditions may delay the development of landfill capacity and
otherwise result in the temporary suspension of certain of the
Company's operations and could materially adversely affect the
Company's overall business, financial condition and results of
operations.


ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     See Item 14 of Part IV of this Report.


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

     None.














                              PART III

     The information required by Part III (Items 10 through 13)
is incorporated by reference to the captions "Principal
Stockholders," "Election of Directors," "Management" and "Certain
Transactions" in the Company's definitive Proxy Statement to be
filed pursuant to Regulation 14A within 120 days after the end of
the Company's fiscal year covered by this Report.









































                         PART IV

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

     (a) See Index to Financial Statements immediately following
Exhibit Index.  There are no schedules related to this item to
which references made in applicable regulations of the Securities
and Exchange Commission are required or are applicable, and
therefore all such schedules are omitted.

     (b) No reports on Form 8-K have been filed during the last
quarter of the Company's fiscal year ended December 31, 1997.

     (c) See Exhibit Index immediately following signature pages.

































                           SIGNATURES

     Pursuant to the requirements of Sections 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.


                              American Disposal Services, Inc.


                         By:  /s/ Richard De Young
                              Richard DeYoung
Date: March 25, 1998          President


     Pursuant to the requirements of the Securities Act of 1934,
this report has been signed below by the following persons on
behalf of the Registrant and in the capacities and on the dates
indicated.


Signature                Title                    Date

/s/  David C. Stoller
     David C. Stoller    Chairman and Director
                         (principal executive
                          officer)                March 25, 1998

/s/  Richard De Young
     Richard De Young    President and Director   March 25, 1998

/s/  Stephen P. Lavey
     Stephen P. Lavey    Chief Financial Officer
                         (principal financial
                          officer)                March 25, 1998

/s/  Lawrence R. Conrath, Sr.
     Lawrence R. Conrath, Sr. Vice President and
                              Controller (principal
                              accounting officer) March 25, 1998

/s/  Merril M. Halpern
     Merril M. Halpern   Director                 March 25, 1998





/s/  A. Lawrence Fagan
     A. Lawrence Fagan   Director                 March 25, 1998

/s/  Richard T. Henshaw, III
     Richard T. Henshaw, III  Director            March 25, 1998

/s/  G. T. Blankenship
     G. T. Blankenship   Director                 March 25, 1998

/s/  Norman Steisel
     Norman Steisel      Director                 March 25, 1998






































                         EXHIBIT INDEX

Exhibit No.    Description of Exhibits

     3.1       Restated Certificate of Incorporation of the
               Company (1)

     3.2       Amendment to Restated Certificate of Incorporation
               dated May 30, 1996 (1)

     3.3       Amendment to Restated Certificate of Incorporation
               dated October 7, 1997

     3.4       By-laws of the Company (1)

     10.1      Second Amended and Restated Credit Agreement dated
               as of May 22, 1997 among the Company, ING (U.S.)
               Capital Corporation, as administrative agent,
               Morgan Guaranty Trust Company of New York, as
               syndication agent, and the other financial
               institutions party thereto (2)

     10.2      Registration Rights Agreement dated as of January
               1, 1997 among the Company and certain of its
               stockholders(1)

     10.3      Employment Agreement dated as of January 1, 1998
               between the Company and Richard De Young

     10.4      Employment Agreement dated as of January 1, 1998
               between the Company and John J. McDonnell

     10.5      Employment Agreement dated as of January 1, 1998
               between the Company and Richard T. Kogler

     10.6      Employment Agreement dated as of January 1, 1998
               between the Company and Ann L. Straw

     10.7      Employment Agreement dated as of January 1, 1998
               between the Company and Lawrence R. Conrath, Sr.

     10.8      Employment Agreement dated as of January 1, 1998
               between the Company and Mary T. Ryan

     10.9      Employment Agreement dated as of January 1, 1998
               between the Company and Stephen P. Lavey

     10.10     American Disposal Services, Inc. 1996 Stock Option
               Plan (1)

     10.11     Form of Indemnification Agreement between the
               Company and its directors (1)

     10.12     Form of Indemnification Agreement between the
               Company and its executive officers (1)

     10.13     Form of Indemnification Agreement between the
               Company and its directors and executive officers
               (1)

     10.14     Form of Tax-Sharing Agreement between the Company
               and its executive officers (1)

     10.15     Agreement dated as of September 9, 1997 among the
               Company and the Stockholders of Illinois Bulk
               Handlers, Inc., Shred-All Recycling Systems, Inc.,
               Fred B. Barbara Trucking Co., Inc. and
               Environtech, Inc.

     21.1      Subsidiaries of the Company

     23.1      Consent of Independent Accountants

     27.1      Financial Data Schedule

_________________________
(1) Previously filed as an exhibit to the Company's Registration
Statement on Form S-1 (333-4889).

(2) Previously filed as an exhibit to the Company's Current
Report on Form 8-K, dated May 15, 1997.















                    INDEX TO FINANCIAL STATEMENTS


                                                            Page

American Disposal Services, Inc. and Subsidiaries:
  Consolidated Financial Statements
  Report of Independent Auditors . . . . . . . . . . .      F-2
  Consolidated Balance Sheets at December 31, 1997 and
    1996. . . . . . . . . . . . . . . . . . . . . . . .     F-3
  Consolidated Statements of Operations for the years
    ended December 31, 1997, 1996 and 1995 . . . . . .      F-4
  Consolidated Statements of Stockholders' Equity for
    the years ended December 31, 1997, 1996 and 1995 . .    F-5
  Consolidated Statements of Cash Flows for the years
    ended December 31, 1997, 1996 and 1995 . . . . . . .    F-6
  Notes to Consolidated Financial Statements . . . . . .    F-7
































                    REPORT OF INDEPENDENT AUDITORS


The Board of Directors
American Disposal Services, Inc.

     We have audited the accompanying consolidated balance sheets
of American Disposal Services, Inc. as of December 31, 1997 and
1996, and the related consolidated statements of operations,
stockholders' equity, and cash flows for each of the three years
in the period ended December 31, 1997.  These financial
statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial
statements based on our audits.

     We conducted our audits in accordance with generally
accepted auditing standards.  Those standards require that we
plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements.  An audit also includes assessing the accounting
principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our
opinion.

     In our opinion, the financial statements referred to above
present fairly, in all material respects, the consolidated
financial position of American Disposal Services, Inc. at
December 31, 1997 and 1996, and the consolidated results of its
operations and its cash flows for each of the three years in the
period ended December 31, 1997, in conformity with generally
accepted accounting principles.

                                   Ernst & Young LLP

Chicago, Illinois
February 24, 1998









AMERICAN DISPOSAL SERVICES, INC.

                    CONSOLIDATED BALANCE SHEETS
                      (Dollars in Thousands)


                                                 December 31,
                                                1997       1996
                              ASSETS
Current assets:
  Cash and cash equivalents. . . . . . . .   $ 2,426    $ 2,301
  Restricted cash held in escrow . . . . .       337          -
  Trade receivables-net of allowance
    of $1,326 and $473. . . . . . . . . .     23,052      9,741
  Prepaid expenses . . . . . . . . . . . .     1,348      1,248
  Other current assets . . . . . . . . . .    1,347         354
                                             -------     ------
     Total current assets. . . . . . . . .    28,510     13,664

Property and equipment, net. . . . . . . .   174,340     93,692
Other assets:
  Cost over fair value of net assets of
    acquired businesses, net of
    accumulated amortization of $3,635
    and $1,374. . . . . . . . . . . . . .    157,304     31,237
  Other intangible assets, net of
    accumulated amortization of $631
    and $439. . . . . . . . . . . . . . .      2,045      1,610
  Debt issuance costs, net of accumulated
    amortization of $696 and $204. . . . .     2,922      2,392
  Other. . . . . . . . . . . . . . . . . .     7,903      2,411
                                            --------   --------
                                            $373,024   $144,986
                                            ========   ========
     LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Accounts payable . . . . . . . . . . . .  $  6,361   $  3,359
  Accrued liabilities:
     Consideration held back for certain
       acquisitions. . . . . . . . . . . .     4,910      1,369
     Wages, salaries, and other
       compensation . . . . . . . . . . .      2,665        240
     Other accrued liabilities . . . . . .     5,708      2,640
  Deferred revenues. . . . . . . . . . . .     5,785      2,245
  Current portion of long-term debt and
    capital lease obligations. . . . . . .     2,360      2,572
                                              ------     ------
        Total current liabilities . . . .     27,789     12,425
Long-term debt and capital lease
  obligations, net of current portion  . .    20,788     65,445
Accrued environmental and landfill
  costs . . . . . . . . . . . . . . . . .     12,450      7,603
Deferred income taxes. . . . . . . . . . .     2,577      1,416
Other long-term liabilities. . . . . . . .    12,045          -
Stockholders' equity:
Preferred stock, $0.01 par value;
  5,000,000 shares authorized; none
  issued and outstanding in 1997 and
  1996. . . . . . . . . . . . . . . . . .          -          -
Common stock, $0.01 par value;
  60,000,000 shares authorized; shares
  issued and outstanding 1997-19,323,
  100 and 1996-8,872,381. . . . . . . . . .      193         89
Warrants outstanding . . . . . . . . . . . .       -        107
Additional paid-in capital . . . . . . . . . 298,110     66,170
Accumulated deficit. . . . . . . . . . . . .    (928)    (8,269)
                                             -------     ------
                                             297,375     58,097
                                             -------     ------
                                            $373,024   $144,986
                                            ========   ========


                         See accompanying notes.








               AMERICAN DISPOSAL SERVICES, INC.

            CONSOLIDATED STATEMENTS OF OPERATIONS
        (Dollars in Thousands, Except per Share Data)

                                     Years Ended December 31,
                                     1997       1996      1995
Revenues                           $121,363   $56,804   $30,004
Cost of operations . . . . . . .     65,947    30,376    17,286
Selling, general, and
  administrative expenses. . . .     16,821     8,328     5,882
Depreciation and amortization. .     21,975    12,334     6,308
                                    -------   -------    ------
Operating income . . . . . . . .     16,620     5,766       528
Interest expense . . . . . . . . .   (6,223)   (5,745)   (3,030)
Interest income. . . . . . . . . .      201       260       189
Other income . . . . . . . . . . .      274       179         -
Income (loss) before income
  taxes                              ------    ------    ------
  and extraordinary item . . . . .   10,872       460    (2,313)
Income tax expense . . . . . . . .    3,531       245       332
                                     ------    ------    ------
Income (loss) before
  extraordinary item. . . . . . . .   7,341       215    (2,645)
Extraordinary item-loss on
  early retirement of debt. . . .         -      (476)     (908)
                                    -------    ------   -------
Net income (loss). . . . . . . . .    7,341      (261)   (3,553)
Preferred stock dividend . . . . .        -      (109)     (190)
                                    -------   -------    ------
Net income (loss) applicable
  to common stockholders.  . . . .  $ 7,341   $  (370) $ (3,743)
                                    =======   =======  ========
Basic earnings per common share:
   Income (loss) before
     extraordinary item .  . . . .  $  0.56   $  0.02  $  (0.85)
   Extraordinary item. . . . . . .        -     (0.07)    (0.27)
                                    -------   -------    ------
   Net income (loss) . . . . . . .  $  0.56   $ (0.05) $  (1.12)
                                    =======   =======  ========
Diluted earnings per common share:
   Income (loss) before
     extraordinary item .  . . . .   $  0.53   $  0.01  $  (0.85)
   Extraordinary item. . . . . . .        -     (0.06)    (0.27)
                                    -------   -------    ------
   Net income (loss) . . . . . . .  $  0.53   $ (0.05) $  (1.12)
                                    =======   =======  ========

                         See accompanying notes.















                  AMERICAN DISPOSAL SERVICES, INC.

          CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

   (Dollars in Thousands)

                                       Addi-             Total
                                      tional    Accu-    Stock
                          Warrants    Paid-in  mulated  holder's
            Common Stock  Outstanding Capital  Deficit   Equity
           Shares  Amount
Balance
at Decem-
ber 31,
1994     2,382,345  $ 24    $ 107     $16,157  $(4,156)  $12,132
Issuance
of
common
stock,
net of
issuance
costs    3,280,520    33        -      25,433        -    25,466
Divi-
dends on
prefer-
red stock       -      -        -           -     (190)     (190)
Net loss        -      -        -           -    (3553)    (3553)
        ---------  -----   ------      ------   -------   -------
Balance
at De-
cember
31,
1995    5,662,865     57      107      41,590   (7,899)   33,855
Issuance
of
common
stock,
net of
issuance
costs   3,162,500     32        -      24,573        -    24,605
Exercise
of
common
stock
warrants
and
options    47,016      -        -           7        -         7
Dividends
on pre-
ferred
stock           -      -        -           -     (109)     (109)
Net loss        -      -        -           -     (261)     (261)
          ------- ------    -----      ------   -------    ------
Balance
at
December
31,
1996    8,872,381     89      107      66,170   (8,269)   58,097
Issuance
of
common
stock,
net of
issuance
costs   8,925,000     89        -     193,870        -   193,959
Stock
issued
for
ac-
quisi-
tions   1,416,912     14        -      37,067       -     37,081
Exercise
of
common
stock,
warrants
and
options   108,807      1     (107)        647       -        541
Tax
benefit
from
exercise
of stock
options         -      -        -         356       -        356
Net income      -      -        -           -   7,341      7,341
          -------  -----    -----       -----  ------     ------
Balance
at
December
31,
1997   19,323,100  $ 193    $   -    $298,110   $(928)  $297,375
       ==========  =====    ======   ========  =======  ========

                      See accompanying notes


               AMERICAN DISPOSAL SERVICES, INC.
             CONSOLIDATED STATEMENTS OF CASH FLOWS
                  (Dollars in Thousands)


                                    Years Ended December 31,
                                    1997     1996      1995

Operating activities
Net income (loss)                   $7,341   $(261)    $(3,553)
Adjustments to reconcile net income (loss)
  to net cash provided by operating
  activities:
     Extraordinary item, net            -      476         908
     Depreciation and amortization  21,975   12,334      6,308
     Provision for environmental
     and landfill costs                597      571        292
     Deferred income taxes             600      176         47
     Gain on sale of fixed assets     (212)     (98)         -
     Changes in operating assets and
       liabilities, net of effects
       from acquisitions:
          Trade receivables         (8,630)  (2,600)      (340)
          Prepaid expenses and
          other assets              (6,187)  (1,071)      (161)
          Accounts payable, accrued
            liabilities and accrued
            environmental and
            landfill costs           7,287      153      1,846
          Deferred revenue           2,310      656        254
          Other long-term
          liabilities                6,045        -          -
                                   -------   ------    -------
Net cash provided by operating
     activities                     31,126   10,336      5,601
Investing activities
Capital expenditures               (24,320) (14,003)    (6,173)
Cost of acquisitions              (153,048) (23,660)   (62,201)
                                  --------  --------   --------
Net cash used in investing
  activities                      (177,368) (37,663)    (68,374)
Financing activities
Net proceeds from issuances
  of common stock                  193,959   24,605      25,466
Exercise of common stock options       541        7           -
Tax benefit associated with
  stock options                        356        -           -
Proceeds from issuances from
  long-term debt                   141,177   66,950      32,568
Debt issuance costs                 (1,022)  (2,596)       (946)
Repayments of indebtedness        (188,644) (51,162)     (2,698)
Redemption of preferred stock            -   (1,950)          -
Net proceeds from issuance of
preferred stock                          -        -       1,908
Preferred stock dividend                 -     (109)       (190)


Proceeds from (payment of) note
  payable to stockholders                -  (12,500)     12,500
                                   -------- --------    -------
Net cash provided by financing
  activities                        146,367  23,245      68,608
                                   -------- --------    -------
Net increase (decrease) in cash
  and cash equivalents                  125  (4,082)      5,835
Cash and cash equivalents, at
  beginning of year                   2,301   6,383         548
                                   -------- ---------   --------
Cash and cash equivalents, at        $2,426  $2,301      $6,383
  end of year                      ======== ========     =======
Noncash activities
Issuance of common stock for
certain acquisitions                $37,081 $    -       $    -
Issuance of notes payable for
certain acquisitions                  2,598      -            -
Consideration held back or held
  in escrow for certain
  acquisitions                       10,910   1,369           -
Supplemental cash flow information
Cash paid for interest              $ 6,814  $6,222      $2,515
Cash (refunds) paid for
  income taxes                        2,260    (159)        478

                    See accompanying notes












               AMERICAN DISPOSAL SERVICES, INC.
          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
               December 31, 1997, 1996 and 1995

1.   Formation and Basis of Presentation

     ADS, Inc. (ADS) was organized January 15, 1991, to acquire,
develop, and operate non-hazardous municipal solid waste
disposal, collection, and transfer operations and provide
non-hazardous solid waste disposal management services to
commercial, industrial, and residential customers. During 1993,
an affiliate of Charterhouse Equity Partners, L.P. (CEP)
purchased a controlling interest in ADS.

     County Disposal, Inc. (County) was incorporated by
Charterhouse Equity Partners II, L.P. (CEPII) on April 27, 1995,
for the purpose of acquiring certain net assets of Envirite
Corporation (Envirite).  On April 28, 1995 Envirite and County
entered into an Asset Purchase Agreement whereby County agreed to
purchase from Envirite certain landfill facilities and waste
transportation and collection equipment located in Livingston
County, Illinois, and Wyandot County, Ohio; all of the issued and
outstanding capital stock of County Environmental Services, Inc.,
a wholly-owned subsidiary of Envirite, which owned and operated a
landfill facility and waste transportation and collection
equipment located in Clarion County, Pennsylvania; and certain
related assets and assumption of certain liabilities.

     Effective January 1, 1996, the stockholders of ADS and
County exchanged their shares for shares of a newly created
holding company by the name of American Disposal Services, Inc.
(the Company).  This share exchange (the Exchange) qualifies as a
transfer of companies under common control as affiliates of
Charterhouse Group International, Inc. are the general partners
and in control of CEP and CEPII and, accordingly, the transaction
has been accounted for at historical cost in a manner similar to
pooling of interests accounting. The financial statements have
been prepared as if this Exchange had occurred as of December 31,
1994.

     In July 1996, the Company issued 3,162,500 shares of common
stock at $9.00 per share in its initial public offering.
Proceeds from the offering, net of underwriting commissions and
related expenses, were $24.6 million.  In April 1997, the Company
issued 4,600,000 shares of common stock at $16.50 per share in a
public offering. Proceeds from the offering, net of underwriting
commissions and related expenses, were $70.1 million.  The
proceeds from each of these offerings were used to finance
acquisitions and pay down a portion of the debt facility.

     In October 1997, the Company completed a public offering of
6,837,000 shares of common stock at $30.50 per share.  Of the
6,837,000 shares, 4,325,000 shares were issued and sold by the
Company and 2,512,000 shares were sold by selling stockholders.
Proceeds to the Company from the offering, net of underwriting
commissions and related expenses, were $123.8 million.
Immediately following the offering, the Company had 19,129,542
shares of common stock issued and outstanding.  The offering
proceeds were used to finance acquisitions and pay down a portion
of the debt facility.

2.   Summary of Significant Accounting Policies

Principles of Consolidation

     The consolidated financial statements include the accounts
of the Company and its subsidiaries. All significant intercompany
balances and transactions have been eliminated.

Concentration of Credit Risk

     Financial instruments that potentially subject the Company
to concentration of credit risks consist primarily of trade
receivables. Credit risk on trade receivables is minimized as a
result of the large and diverse nature of the Company's customer
base.  No single group or customer represents greater than 10% of
total accounts receivable.  The Company maintains an allowance
for losses based on the expected collectibility of accounts
receivable.  Credit losses have been within managements
expectations.

Fair Value of Financial Instruments

     Trade receivables, trade payables, and debt obligations are
carried at cost which approximates fair value.

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 and accompanying notes.  Actual
results could differ from those estimates.


Reclassifications

     Certain reclassifications have been made to prior year's
financial statements to conform with the 1997 presentation.


Cash and Cash Equivalents

     Cash and cash equivalents represent cash in banks and liquid
investments with original maturities of three months or less.

Restricted Cash Held in Escrow

     Cash held in escrow represents cash held in banks restricted
to fund obligations incurred in acquiring businesses.  These
obligations are expected to be funded in 1998.

Property and Equipment

     Property and equipment are recorded at cost.  Depreciation
of equipment, which includes amortization of equipment
capitalized under lease obligations, is computed using the
straight-line method over the estimated useful lives of the
respective assets assuming no salvage values as follows:


          Vehicles and equipment . . . . . . 3 to 12 years
          Buildings. . . . . . . . . . . . . 25 to 30 years

     Expenditures for major renewals are capitalized, and
expenditures for routine maintenance and repairs are charged
to expense as incurred.

     Capitalized landfill costs include expenditures for land and
related airspace, permitting costs, preparation costs, and
capitalized interest.  Landfill permitting and preparation costs
represent only direct costs related to these activities,
including legal, engineering, construction of landfill
improvements, cell development costs, and the direct costs of
Company personnel dedicated for these purposes.  Preparation
costs for individual secure land disposal cells are recorded in
property and equipment and amortized as the airspace is filled.
Amortization rates are based on accounting estimates by
management determined primarily from the results of engineering
studies of the total estimated preparation cost expected to be
incurred over the life of the related landfill.  Landfill costs
capitalized in 1997, 1996 and 1995 include capitalized interest
of approximately $639,000, $481,000, and $0, respectively.

Intangible Assets

     The cost over fair value of net assets of acquired
businesses represents long-lived intangible assets including
routes, tradenames and goodwill and is amortized on a
straight-line method over periods not exceeding 40 years.  Other
intangible assets, substantially all of which are covenants not
to compete and customer lists, are amortized on the straight-line
method over their estimated lives, typically no more than 8
years. Amortization expense for fiscal years 1997, 1996, and 1995
related to intangible assets was approximately $3.0 million, $1.0
million, and $1.4 million, respectively.  In 1995, the Company
determined not to enforce certain covenants not to compete which
arose from 1993 transactions. The net book value of such
covenants of $505,000 was fully written-off and included in 1995
amortization expense.

     The Company continually evaluates the value and future
benefits of its intangibles. The Company assesses recoverability
from future operations using income from operations of the
related acquired business as a measure.  Under this approach, the
carrying value would be reduced if it becomes probable that the
Company's best estimate for expected future cash flows of the
related business would be less than the carrying amount of the
intangible over the remaining amortization period. For the three
year period ended December 31, 1997, there were no adjustments to
the carrying amounts of intangibles resulting from these
evaluations.

Deferred Acquisition Costs

     The Company capitalizes engineering, legal, accounting, and
other direct costs paid to outside parties that are incurred in
connection with potential acquisitions.  The Company, however,
routinely evaluates such capitalized costs and charges to expense
those relating to abandoned acquisition candidates.  Indirect
acquisition costs, such as executive salaries, general corporate
overhead, and other corporate services are expensed as incurred.
Net deferred acquisition costs, included in other intangible
assets, were approximately $478,000 and $545,000 at December 31,
1997 and 1996, respectively.

Accrued Environmental and Landfill Costs

     Accrued environmental and landfill costs represent landfill
accruals which are provided for environmental compliance costs
and closure and post-closure costs.  These accruals are based on
accounting estimates by management determined primarily from the
results of engineering studies and reviews and on interpretation
of the technical standards of the Environmental Protection
Agency's Subtitle D regulations, or the approved state
counterpart, and recently promulgated air emissions standards
under the Clean Air Act, as they apply on a state-by-state basis.
The Company typically provides accruals for these costs as
permitted airspace of such facilities is consumed.  Closure and
post-closure monitoring and maintenance costs represent the costs
related to cash expenditures yet to be incurred when a landfill
facility ceases to accept waste and closes.  Certain of these
accrued environmental and landfill costs, principally capping,
leachate collection and removal, and methane gas control and
recovery, are operating and maintenance costs to be incurred
during the 30-year period after the facility closes, but are
accrued during the operating life of the site in accordance with
the landfill operation requirements of Subtitle D and the EPA's
recently promulgated air emissions standards.  An environmental
and landfill cost accrual is provided as a liability assumed for
purchased landfill operations based on permitted airspace
consumed prior to the acquisition date and is included in the
purchase price allocation (see Note 3).  The Company has
estimated that, as of December 31, 1997, post-closure expenses,
including cap maintenance, groundwater monitoring, methane gas
control and recovery and leachate treatment/disposal for up to 30
years after closure in certain cases, will approximate $17.3
million. In addition, the Company has estimated that, as of
December 31, 1997, closure costs expected to occur during the
operating lives of these facilities will approximate $54.4
million.  These accruals are reviewed by management periodically
and revised prospectively for any significant changes in future
cost estimates.

Income Taxes

     Deferred tax assets and liabilities are determined based on
differences between financial reporting and tax bases of assets
and liabilities and are measured using the enacted tax rates and
laws that will be in effect when the differences are expected to
reverse.

Revenue Recognition

     Landfill revenues are recorded at the date of actual waste
disposal.  Revenues billed prior to the performance of services
are deferred and recorded as income in the period in which the
related services are rendered, generally over a three-month
period.

Advertising Costs

     Advertising costs are expensed as incurred. Advertising
costs for fiscal years 1997, 1996 and 1995 were approximately
$438,000, $181,000 and $84,000, respectively.

Earnings Per Share

     In 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 128,
"Earnings per Share" (SFAS 128), which replaced the calculation
of primary and fully diluted earnings per common share with basic
and diluted earnings per common share.  Unlike primary earnings
per common share, basic earnings per common share excludes any
dilutive effects of options, warrants and convertible securities.
All earnings (loss) per common share amounts for all periods have
been presented, and where appropriate, restated to conform to the
SFAS 128 requirements (see Note 12).  In restating earnings
(loss) per common share to comply with the SFAS 128 requirements,
the Company applied the recently issued Staff Accounting Bulletin
No. 98 (SAB 98).  As a result of applying the provisions of SAB
98, the Company has restated 1995 loss per common share to
exclude the anti-dilutive effect of options and warrants granted
within one year of the Company's initial public offering and with
exercise prices below the initial public offering price of $9.00
per common share.

Employee Stock Options

     The Company typically grants stock options for a fixed
number of shares to employees with an exercise price equal to the
fair value of the shares at the date of grant.  The Company
accounts for such stock option grants in accordance with
Accounting Principles Board Opinion No. 25 "Accounting for Stock
Options Issued to Employees" (APB 25), and, accordingly,
typically recognizes no compensation expense for these stock
option grants.

Impact of Recently Issued Accounting Standards

     In October 1996, the Accounting Standards Executive
Committee of the American Institute of Certified Public
Accountants issued Statement of Position ("SOP") 96-1,
"Environmental Remediation Liabilities."  The SOP is effective
for fiscal years beginning after December 15, 1996, and provides
that environmental remediation liabilities should be accrued when
the criteria of FAS 5, "Accounting for Contingencies," are met.
Included in the SOP are benchmarks to aid in the determination of
when such criteria are met and environmental liabilities should
be recognized.  The adoption of SOP 96-1 did not have a material
effect on the Company's consolidated financial position, results
of operation, or cash flows.

     In June 1997, the FASB issued SFAS No. 130, "Reporting
Comprehensive Income." SFAS No. 130 establishes standards for
reporting and display of comprehensive income and its components
in the financial statements. SFAS No. 130 is effective for fiscal
years beginning after December 15, 1997. The adoption of SFAS No.
130 will have no impact on the Company's consolidated financial
position, results of operations, or cash flows.

     In June 1997, the FASB issued SFAS No. 131, "Disclosures
about Segments of an Enterprise and Related Information."  SFAS
No. 131 establishes standards for the way that public business
enterprises report information about operating segments in annual
financial statements and requires that those enterprises report
selected  information about operating segments in interim
financial reports issued to stockholders.  It also establishes
standards for related disclosures about products and services,
geographic areas, and major customers. SFAS No. 131 is effective
for financial statements for fiscal years beginning after
December 15, 1997. The Company has evaluated the disclosure
requirements of SFAS No. 131 and believes that its adoption will
have no material impact on its future disclosure requirements.

3.   Acquisitions

     The acquisitions below have been accounted for using the
purchase method of accounting and, accordingly, the results of
their operations have been included in the Company's results of
operations from their respective acquisition dates.  The purchase
prices have been allocated to the assets acquired and liabilities
assumed based on their fair values at their respective
acquisition dates with the residual allocated to cost over fair
value of net assets acquired.

     During 1997 the Company acquired 28 non-hazardous solid
waste businesses, consisting of 28 collection operations, seven
transfer stations, four landfills, and two beneficial reuse
facilities. During 1996, the Company acquired sixteen
non-hazardous solid waste businesses, consisting of 16 collection
operations and two transfer stations.  As described in Note 1,
the Company acquired three non-hazardous solid waste landfills
and a solid waste collection operation (the Envirite Acquisition)
during 1995.

     The Company has not completed its valuation of certain of
its 1997 purchases and the purchase price allocations are subject
to change when additional information concerning asset and
liability valuations is completed.

     The purchase prices allocated to the net assets acquired are
as follows (in thousands):


                                           December 31,
                                   1997       1996      1995
Property and equipment             $74,472    $8,425  $62,288
Accounts receivable and inventory    4,781       810    3,363
Other assets                         1,480       785    1,664
Cost over fair value of net assets
acquired. . .                      128,328    15,642    3,060
Total liabilities assumed           (5,424)     (633)  (8,174)
                                   -------   --------  -------
Total purchase price              $203,637   $25,029  $62,201
                                   =======   =======  =======

     The Company has entered into certain acquisition agreements
that include consideration that is issuable upon the resolution
of certain contingent incentives available to the former owners
of the acquired businesses.  These contingencies are not recorded
as liabilities or shown as outstanding securities unless the
outcome of the contingency is determinable beyond reasonable
doubt.  The resolution of these contingencies could result in
additional payments in cash or shares of Company common stock
(see Note 12) through September 10, 2006. The additional cash
payments are not expected to exceed $37,500,000.

     The pro forma unaudited results of operations for the years
ended December 31, 1997 and 1996, assuming each acquisition above
and the public offerings (see Note 1) had occurred on January 1,
1996, are as follows (in thousands, except per share data):

                                           Years Ended
                                           December 31,

                                          1997         1996
Revenues                                $160,869     $142,380
Operating income                          24,424       18,269
Income before extraordinary item          15,272       11,319
Net income applicable to common
stockholders                              15,272       10,843
Pro forma basic earnings per common
share:
Income before extraordinary item        $   0.80     $   0.64
Extraordinary item                             -        (0.03)
                                        --------     --------
Net income                              $   0.80     $   0.61
                                        ========     ========
Pro forma weighted average common
stock outstanding                     19,188,674   17,653,952
                                      ==========   ==========
Pro forma diluted earnings
per common share:
     Income before extraordinary item       0.77    $    0.63
     Extraordinary item                        -        (0.03)
                                         -------    ---------
     Net income                           $ 0.77    $    0.60
                                         =======    =========
Pro forma weighted average common
stock and common stock equivalent
shares outstanding                    19,833,665   18,021,839
                                      ==========   ==========

     The pro forma results do not purport to be indicative of the
results of operations which actually would have resulted had the
acquisitions occurred on January 1, 1996 nor are they necessarily
indicative of future operating results.

4.   Property and Equipment

     Property and equipment are summarized as follows (in
thousands):

                                          December 31,
                                        1997       1996
Land . . . . . . . . . . . . . . . .$ 18,229   $  5,417
Landfills. . . . . . . . . . . . . . 120,949     78,547
Buildings. . . . . . . . . . . . . .  16,014      3,285
Vehicles and equipment . . . . . . .  52,903     23,977
                                     -------    -------
                                     208,095    111,226
Less: Accumulated depreciation and
amortization. . . . . . .            (33,755)   (17,534)
                                     -------    --------
                                   $ 174,340   $ 93,692
                                   ========    ========



5.   Obligations

                                               December 31,
                                           1997        1996
Long-term debt:
     Acquisition loan, ING Capital
     Corporation                         $ 19,666    $ 41,506
     Term loan, ING Capital
     Corporation                                -      24,750
     Other borrowings, with interest
     rates ranging from 6.0% to 11.0%       3,171       1,101
Capital lease obligations:
     Capital lease obligations with interest
     and principal due monthly through
     1999, at various interest rates ranging
     from 9.50% to 9.75%, secured by
     equipment                                311         660
                                        ---------    --------
                                           23,148      68,017
Less: Current portion                       2,360       2,572
                                        ---------    --------
Long-term obligations, net of
current portion                          $ 20,788    $ 65,445
                                        =========    ========


     In May 1997, the Company increased the amount of its
revolving credit and term loan facility (the "Credit Facility")
with ING (U.S.) Capital Corporation from $125 million to $200
million.  At that time, the Credit Facility provided the Company
with a term loan of $60 million and a revolving credit facility
of $140 million to be used for acquisitions (of which $20 million
could be used for working capital and letter of credit purposes).
In October 1997, the Company repaid its $60 million term loan
with the proceeds of a public offering, and at December 31, 1997
maintains its $140 million revolving credit facility.  The
various loans and lines of credit under the Credit Facility bear
interest at rates per annum equal to, at the Company's
discretion, either: (i) the prime rate, plus an applicable
margin; or (ii) the London Interbank Offered Rate ("LIBOR"), plus
an applicable margin, and mature in 2002.  As of December 31,
1997, the interest rates on the acquisition loan under the Credit
Facility ranged from 7.00% to 8.50%.  The Credit Facility is
secured by substantially all of the assets of the Company. The
Company's ability to use the acquisition facility is based upon a
number of covenants, including the maintenance of specified debt
to equity and fixed charge coverage ratios.  At December 31, 1997
the Company was in compliance with the terms of these covenants.
In connection with refinancings during 1996 and 1995, the Company
recognized an extraordinary loss, net of income tax benefit, of
$476,000 and $908,000, respectively, representing unamortized
deferred debt issuance costs related to refinanced obligations.

     At December 31, 1997, maturities of obligations (excluding
capital lease obligations) are as follows (in thousands):


1998 . . . . . . . . . . . . . . . . . . . . . . . . $  2,160
1999 . . . . . . . . . . . . . . . . . . . . . . . .      601
2000 . . . . . . . . . . . . . . . . . . . . . . . .      180
2001 . . . . . . . . . . . . . . . . . . . . . . . .      191
2002 and thereafter. . . . . . . . . . . . . . . . .   19,705
                                                       ------
                                                      $22,837
                                                      =======
6.   Income Taxes

     Deferred income taxes reflect the net tax effects of
temporary differences between the amount of assets and
liabilities for financial reporting and income tax purposes.
Significant components of the Company's deferred tax assets and
liabilities were as follows (in thousands):


                                             December 31,
                                             1997     1996

Deferred tax assets arising from:
Net operating loss carryforwards        $  3,999   $  2,938
Closure and post-closure costs . . .         240        421
Amortization of intangibles. . . . .       1,059        881
Other. . . . . . . . . . . . . . . .         561         26
                                        --------   --------
Total deferred tax assets. . . . . . . .   5,859      4,266
Valuation allowance. . . . . . . . . . . (1,776)    (2,280)
                                        --------   --------
Net deferred tax assets. . . . . . . .  $  4,083   $  1,986
                                        ========   ========
Deferred tax liabilities arising from:
Property and equipment . . . . . . . .  $  4,414   $  2,855
Amortization of intangibles and landfill   1,184        472
Other. . . . . . . . . . . . . . . . . .     501         75
                                        --------   --------
Total deferred tax liabilities . . . .  $  6,099   $  3,402
                                        ========   ========
Net deferred tax liability . . . . . .  $  2,016   $  1,416
                                        ========   ========

     At December 31, 1997, the Company had net operating loss
(NOL) carryforwards of approximately $10.5 million for federal
income tax purposes that expire in years 2006 to 2011.  The
utilization of the NOL carryforwards is limited by future taxable
earnings generated at the subsidiary level.  The Company recorded
a valuation allowance to reflect uncertainty as to the
utilization of such NOL carryforwards for financial reporting
purposes.  The maximum annual utilization of such NOL
carryforwards are limited under the Internal Revenue Code as a
result of changes in ownership that have occurred.

     Significant components of income tax expense were as follows
(in thousands):

                                   Years Ended December 31,
                                   1997      1996      1995
Current:
Federal . . . . . . . . . . . . . .$2,793    $  99     $ 141
State . . . . . . . . . . . . . . .   138      (30)      144
                                   ------    ------    ------
                                    2,931       69       285

Deferred:
Federal . . . . . . . . . . . . . .   553      146        38
State . . . . . . . . . . . . . . .    47       30         9
                                   ------    ------    ------
                                      600      176        47
                                   ------    ------    -------
Total provision. . . . . . . . . . $3,531     $245       $332
                                   ======    ======    =======

     A reconciliation from the statutory income tax rate to the
effective income tax rate was as follows:

                                        Years Ended December 31,
                                        1997     1996     1995
Federal statutory income tax rate. . .  35.0%    34.0%   (34.0)%
Effect of:
State taxes, net of federal tax effect   1.1       -       3.1
Nondeductible goodwill. . . . . . . .    1.9     15.5       -
Net operating loss with no benefit. .     -        -      39.6
Utilization of net operating loss
carryforward. . . . .                   (5.0)       -       -
Other, net. . . . . . . . . . . .  . .  (0.5)     3.8      1.6
                                        -----    -----    -----
Effective tax rate . . . . . . . . . .  32.5%    53.3%    10.3%
                                        =====    =====    =====


7.   Related Party Transactions

     The Company had entered into a management agreement with a
stockholder for certain services to be rendered to the Company in
exchange for annual management fees.  The management agreement
was terminated in connection with the initial public offering
during July 1996.  Management fees of approximately $466,000 and
$659,000 were incurred in 1996 and 1995, respectively.  At
December 31, 1995, the Company had a $12,500,000 unsecured note
payable outstanding to a stockholder, which was issued on
November 16, 1995 and was due November 16, 1996, bearing an
annual interest rate of prime plus 3%.  The Company repaid the
note payable to the stockholder in May 1996.  Interest expense
relating to this note payable was approximately $621,000 and
$180,000 in 1996 and 1995, respectively.

8.   Commitments and Contingencies

Environmental and Regulatory Requirements

     The business and activities of the Company are, and may
become more, extensively regulated by, among others, the federal
Environmental Protection Agency, the Department of
Transportation, the Interstate Commerce Commission, and various
state and local environmental and transportation regulatory
authorities.  The Company is subject to various statutes and
regulations which include, but are not limited to, the Resource
Conservation and Recovery Act of 1976, the Federal Water
Pollution Control Act, the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, the Clean Air Act, and
numerous state and local laws and regulations.  The full impact
of these laws and regulations and the possible adoption of new
statutes and regulations with respect to the Company's facilities
and operations is uncertain and could have material adverse
effects on the Company's business, results of operations, and
financial condition in that the Company:  (i) could be required
to incur additional expenses in compliance efforts, (ii) might be
unable to comply, forcing the Company to cease operations, and
(iii) could incur additional liability for past operation(s) of
acquired assets. These regulations may also impose restrictions
on the Company's operations, such as limiting the expansion of
disposal facilities, limiting or banning the disposal of
out-of-state waste or certain other categories of waste, or
mandating the disposal of local refuse.

     Although the Company believes it is in substantial
compliance with current regulatory requirements, because of
heightened political and public concern over environmental
issues, companies in the waste disposal industry, including the
Company, may become subject to judicial and administrative
proceedings involving federal, state, or local agencies in the
normal course of business.

     The Company has obtained some levels of pollution liability
insurance covering certain claims for sudden or gradual onset
environmental damage at its landfill sites.  The Company carries
a comprehensive general liability insurance policy which
management considers adequate to protect its assets and
operations from other risks.

     The Company also may be subject to claims for personal
injury or property damage arising out of motor vehicle accidents
involving its trucks. The Company currently carries insurance
with policy limits which management believes to be sufficient to
cover these risks. If the Company were to incur liabilities
outside of or in excess of its insurance limits, its financial
condition could be adversely affected.

     In connection with the Company's existing landfills, the
Company has obtained financial assurance bonds for approximately
$26.9 million at December 31, 1997, from a financial institution
to provide financial assurance that closure and postclosure
expenses will be met in the event that the Company is not able to
fulfill its closure and postclosure obligations.

Contingent Payments Related to Acquisitions

     The Company has entered into certain acquisition agreements
that include consideration that is issuable upon the resolution
of certain contingent incentives available to the former owners
of the acquired businesses.  See Note 3 and Note 12 for further
discussion.

Future Minimum Lease Payments

     At December 31, 1997, future minimum lease payments under
noncancelable lease obligations are as follows (in thousands):

                                        Capital   Operating
                                        Leases    Leases
1998 . . . . . . . . . . . . . . . . . $  224     $  2,012
1999 . . . . . . . . . . . . . . . . .    111        1,521
2000 . . . . . . . . . . . . . . . . .     -         1,335
2001 . . . . . . . . . . . . . . . . .     -         1,295
2002 and thereafter. . . . . . . . . .     -         6,262
                                        -----      -------
Total minimum payments . . . . . . . .    335      $12,425
                                                   =======
Less: Amount representing interest . .     24
                                        -----
Present value of net minimum lease
payments. . . . . . . . .               $ 311
                                        ======
     Rental expense in 1997, 1996, and 1995 was approximately
$1.8 million, $1.3 million and $793,000, respectively.

9.   Retirement Plan

     Effective January 1, 1996, the Company established a defined
contribution retirement savings plan covering substantially all
employees of the Company.  Each participant may elect to defer a
portion of annual compensation subject to certain limitations.
The Company matches up to 50% of the first $1,000 of participant
contributions to the plan.  The Company's contributions for the
years ended December 31, 1997 and 1996 were approximately
$129,000 and $94,000, respectively.


10.  Redeemable Preferred Stock

     On March 28, 1995, the Company issued 1,950 of its Series A
Preferred Stock and 46,550 warrants to purchase shares of common
stock of the Company, for $1,950,000.  The holder of the warrants
had the right to purchase one common share for each warrant held
at the exercise price of $.10 per share on or before December 31,
2002.  The Company redeemed the outstanding preferred stock in
May 1996, and paid any accrued dividends related to the preferred
stock. The warrants were exercised in 1996.


11.  Stockholders' Equity

Stock Options

     The Company's Board of Directors adopted the American
Disposal Services, Inc. 1996 Stock Option Plan effective January
1, 1996. The plan permits grants of options up to an aggregate of
1,600,000 shares of common stock to employees and certain
consultants of the Company, on such terms as the Company's
compensation committee (or a stock option subcommittee thereof)
determines. During 1997, the Company's stockholders approved an
increase in the aggregate number of shares available for grant
under the plan from 1,100,000 shares to 1,600,000 shares.
Options granted under the plan as of January 1, 1996 replaced
existing stock options granted by ADS and County in connection
with the Exchange. The stock options vest over three and five
year periods and are exercisable over a ten year period from the
original grant dates. All vesting is subject to acceleration
under specified circumstances.

     Options to purchase an aggregate of 63,601 shares were
granted outside the plan to a former employee and were fully
vested as of January 1, 1996. Such shares have an exercise price
of $7.17 per share, increasing at 25% per annum from the date of
original grant of the ADS stock options they replace.


     A summary of stock option information follows:

                    1997                1996           1995
                   -------             -------        -------
                       Weighted          Weighted        Weighted
                        Average          Average          Average
                       Exercise          Exercise        Exercise
              Options    Price  Options   Price   Options  Price

Outstanding at
  beginning
  of year      934,914  $ 7.47  869,617  $ 7.36   186,444  $ 7.17
Granted        476,735   21.29   68,270    9.00   683,173    7.41
Exercised      (49,793)  10.86     (467)   7.17         0       -
Forfeited       (9,286)  12.98   (2,506)   7.64         0       -
              --------  ------  -------  -------  ------- -------
Outstanding  1,352,570  $12.58  934,914  $ 7.47   869,617  $ 7.36
at end of    =========  ======  =======  ======   ======= =======
year

Exercisable at
end of year    620,585          434,553           105,223
Available
future grant   260,771          228,220           293,984
Weighted
average
value of
options
granted
during
the year                $10.75           $ 4.33            $ 1.88

      Options outstanding and exercisable as of December 31, 1997
by price range:

                              Outstanding           Exercisable
                         ---------------------   ----------------
                              Weighted  Weighted         Weighted
                              Average   Average           Average
                             Remaining  Exercise         Exercise
                 Shares   Life in Years  Price   Shares   Price
Range of Exercise
Prices
$ 7.17-$ 9.00    858,205      7.4       $ 7.48   596,653  $ 7.42
$17.25-$17.50    282,431      9.2       $17.36         -       -
$21.67-$29.63    211,934      9.2       $26.84    23,932  $22.97

     The Company has elected to follow APB 25 and related
Interpretations in accounting for its employee stock options
because, as discussed below, the alternative fair value
accounting provided for under Statement of Financial Accounting
Standards No. 123, "Accounting for Stock-Based Compensation"
(SFAS 123), requires use of option valuation models that were not
developed for use in valuing stock options.  Under APB 25,
because the exercise price of the Company's employee stock
options equals the market price of the underlying stock on the
date of grant, no compensation expense is recognized.

     Disclosure of pro forma information regarding net income
(loss) and net income (loss) per common share is required by SFAS
123, and has been determined as if the Company had accounted for
its stock options granted in 1997, 1996, and 1995 using SFAS 123.
The options granted in 1997 and 1996 were valued using the
Black-Scholes option pricing model.  The options granted in 1995,
as a non-public company, were valued using the minimum value
method.  The Black-Scholes option valuation model requires the
input of highly subjective assumptions and, because changes in
the subjective input assumptions can materially affect the fair
value estimate, in management's opinion, the model cannot
necessarily provide a single measure of the fair value of its
stock options. The following assumptions were
utilized in the valuation:


                                          December 31,
                                     1997    1996      1995
Risk-free interest rate:           6.31%     6.65%     5.85%
Expected dividend yield.           0%        0%        0%
Expected stock price volatility    48.9%     44.4%     n/a
Expected life of options           5 years   5 years   5 years

     Had compensation cost for the Company' stock options granted
in 1997 and 1996 been determined based on the fair value at the
dates of grants, the Company's net income (loss) and net income
(loss) per common share would have been as follows on a pro forma
basis (in thousands, except per share data):


                                   Years Ended December 31,
                                   1997      1996      1995
Net income (loss) applicable to
common stockholders    As reported $7,341   $(370)  $(3,743)
                         Pro Forma  5,998    (687)   (3,807)
Basic earnings (loss)per
common share           As reported   0.56   (0.05)    (1.12)
                         Pro Forma   0.46   (0.10)    (1.14)
Diluted earnings (loss) per
common share           As reported   0.53   (0.05)    (1.12)
                         Pro Forma   0.43   (0.09)    (1.14)

     The pro forma effect for 1997, 1996, and 1995 is not
representative of the pro forma effect in future years as the pro
forma disclosures reflect only the fair value of stock options
granted in 1997, 1996, and 1995 and do not reflect the fair value
of outstanding options granted prior to 1995.

Stock Warrants

     In connection with obtaining various credit agreements, the
Company issued warrants to purchase 168,905 shares of common
stock with exercise prices ranging from $4.72 to $7.41 per share.
The Company recorded the fair value of the warrants as a
component of equity and recognized debt issuance cost of
$106,666.  The warrants expire 10 years from date of issuance.
On November 13, 1997 warrant certificates representing 26,137
shares with an exercise price of $7.17 per share and 45,193
shares with an exercise price of $4.72 per share were exercised
on a cashless basis.  On January 9, 1998 warrant certificates
representing 48,787 shares with an exercise price of $7.41 per
share were exercised on a cashless basis.

Preferred Stock

     In connection with the Exchange, 5,000,000 shares of new
preferred stock of the Company were authorized with none issued
at December 31, 1997 and 1996.


12.  Earnings Per Share

     The following table sets forth the computation of earnings
(loss) per common share (in thousands, except per share data):


                                   Years Ended December 31,
                                   1997      1996      1995
Numerator:
Net income (loss) applicable to
  common stockholders            $  7,341   $   (370) $ (3,743)
                                 ========   ========= =========
Denominator:
Denominator for basic earnings per
common share-weighted-average
shares                         13,177,346  7,063,928 3,340,512
Effect of dilutive securities:
Stock options and warrants        644,991    401,122         -
                               ----------  ---------  --------
Denominator for diluted earnings
per common share-adjusted
weighted-average shares and
assumed conversions            13,822,337  7,465,050 3,340,512
                               ----------  ---------  ---------
Basic earnings per common share  $   0.56  $  ( 0.05) $  (1.12)
Diluted earnings per common share    0.53      (0.05)    (1.12)

     Options to purchase 171,500, 13,502, and 3,000 shares of
common stock at $27.13, $29.63, and $29.00, respectively, were
outstanding during 1997, but were not included in the computation
of diluted earnings per common share because the options'
exercise price was greater than the average market price of the
common shares and, therefore, the effect would be antidilutive.

     Under one of the Company's acquisition agreements, if
certain revenue goals are met by the former owner of the acquired
business, the Company is obligated to deliver up to 115,000
additional shares of common stock to the former owner.  No
portion of the 115,000 additional shares are included in the
computation of diluted earnings per common share in 1997 because
none of the revenue goals have been met as of December 31, 1997.
Under another acquisition agreement, if certain contracts are
obtained or waste volume goals are met by the former owner of the
acquired business, the Company is obligated to deliver additional
shares of stock to the former owner.  As the amount of shares are
to be determined using a future share price, it is not possible
to estimate the amount of shares that could be delivered by the
Company.  The value of additional shares to be issued is not
expected to exceed $12,500,000.  No additional shares are
included in the computation of diluted earnings per common share
in 1997 because the contracts have not been obtained and waste
volume goals have not been met as of December 31, 1997.

     Subsequent to December 31, 1997, the Company has issued
1,304,444 additional shares of common stock in conjunction with
subsequent acquisitions and the exercise of warrants and stock
options.

13.  Subsequent Events

     Subsequent to December 31, 1997, the Company has acquired
twelve solid waste companies.  On January 5, 1998, the Company
acquired all of the outstanding stock of R.C. Miller Enterprises,
Inc. (R.C. Miller).  The Company's acquisition of R.C. Miller
represents the substantial majority of the net assets of
companies acquired subsequent to December 31, 1997.

     Selected quarterly financial data for 1997 and 1996 is as
follows (in thousands, except per share data):

                    First     Second    Third     Fourth
                    Quarter   Quarter   Quarter   Quarter   Total
     1997
Net Sales           $18,511   $27,763   $35,373   $39,716  21,363
Gross Profit          8,619    12,575    16,039    18,183  55,416
Net income              446   1,236       2,515     3,144   7,341
Basic earnings per
  common share         0.05     0.11       0.18      0.17    0.56
Diluted earnings per
  common share         0.05     0.10       0.17      0.17    0.53

     1996
Net Sales           $11,724   $13,453   $15,122   $16,505 $56,804
Gross Profit          5,616     6,391     7,022     7,399  26,428
Net income (loss)
  before
  extraordinary
  item                (479)      (199)      227       557    106
Net income (loss)
applicable to
common stockholders   (479)      (675)      227       557   (370)
Basic earnings (loss)
  per common share
  before
  extraordinary
  item               (0.08)     (0.04)     0.03      0.06   0.02


Diluted earnings
 (loss) per common
  share before
  extraordinary
  item               (0.08)     (0.04)     0.03      0.06   0.01
Basic and diluted
  earnings (loss)
  per common share   (0.08)     (0.12)     0.03      0.06  (0.05)

Note:

     Earnings per common share have been restated to comply with
SFAS No. 128.  The earnings per common share computation for the
year is a separate, annual calculation.  Accordingly, the sum of
the quarterly earnings per common share amounts do not
necessarily equal the earnings per common share amounts for the
year.