<DOCUMENT>
<TYPE>10-K/A
<SEQUENCE>1
<FILENAME>doc1.txt
<TEXT>


                                  UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                   FORM 10-K/A
                                 AMENDMENT NO. 1

              ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE

                         SECURITIES EXCHANGE ACT OF 1934

                    For the Fiscal Year Ended August 31, 2000

                          Commission File Number 1-8368

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

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

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

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

        SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:  NONE


           SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
                               Title of each class
                          Common Stock Par Value $1.00
                         Rights to Purchase Common Stock

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


Indicate  by  check mark if disclosure of delinquent filers pursuant to Item 405
of  Regulation  S-K  is  not contained herein, and will not be contained, to the
best  of  the  registrant's  knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in  Part  III  of this Form 10-K or any
amendment  to  this  form  10-K.  [ ]

The  aggregate  market  value  of the common stock held by non-affiliates of the
registrant  was  $16,315,372  as  of  June 22, 2001.

The number of shares of the issuer's common stock outstanding was 100,783,596 as
of  June  22,  2001.


<PAGE>
<TABLE>
<CAPTION>
                                         TABLE OF CONTENTS
                                         -----------------


ITEM                                                                                          PAGE
----                                                                                          ----
                                             PART I
<S>                                                                                           <C>
1     Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .     1
2.    Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    16
3.    Legal Proceedings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    18
4.    Submission of Matters to a Vote of Security Holders. . . . . . . . . . . . . . . . . .    29

                                            PART II

5.     Market for Registrant's Common Equity and Related Stockholder Matters . . . . . . . .    30
6.     Selected Financial Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    30
7.     Management's Discussion and Analysis of Financial Condition and Results of Operations    31
7A.    Quantitative and Qualitative Disclosures About Market Risk. . . . . . . . . . . . . .    46
8.     Financial Statements and Supplementary Data . . . . . . . . . . . . . . . . . . . . .    47
9.     Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.    48

                                            PART III

10.    Directors and Executive Officers of the Registrant. . . . . . . . . . . . . . . . . .    48
11.    Executive Compensation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    52
12.    Security Ownership of Certain Beneficial Owners and Management. . . . . . . . . . . .    58
13.    Certain Relationships and Related Transactions. . . . . . . . . . . . . . . . . . . .    59

                                            PART IV

14.     Exhibits, Financial Statement Schedules and Reports on Form 8-K. . . . . . . . . . .   .61
</TABLE>


<PAGE>
                                     PART I
                                     ------

ITEM  1.   BUSINESS

                                     GENERAL

Safety-Kleen  Corp.  (the  "Registrant"  or  "Safety-Kleen")  and  subsidiaries
(collectively referred to as the "Company") provide a range of services designed
to  collect,  transport,  process,  recycle  or  dispose  of  hazardous  and
non-hazardous  industrial  and  commercial  waste  streams. The Company provides
these  services  in 50 states, seven Canadian provinces, Puerto Rico, Mexico and
Saudi  Arabia from approximately 380 collection, processing and other locations.

Safety-Kleen  was  incorporated  in  Delaware  in  1978. Its principal executive
office  is  located  at 1301 Gervais Street, Suite 300, Columbia, South Carolina
29201  and  its  telephone  number  is  803-933-4200.

                               RECENT DEVELOPMENTS

INVESTIGATION  OF  FINANCIAL  RESULTS

On  March  6,  2000,  the  Company  announced  that it had initiated an internal
investigation  of  its  previously reported financial results and certain of its
accounting  policies  and  practices following receipt by the Company's Board of
Directors  of  information  alleging possible accounting irregularities that may
have  affected  the  previously  reported financial results of the Company since
fiscal  year  1998.  The  internal  investigation  was  subsequently expanded to
include  fiscal  years  1998 and 1997.  The Board appointed a special committee,
consisting  of four directors who were then independent outside directors of the
Company,  to  conduct  the  internal  investigation  (the  "Special  Committee
(Investigation)").  The  Special Committee (Investigation) was later expanded to
five  directors,  with  the  addition  of  one  additional  independent  outside
director.  The  Special  Committee  (Investigation) engaged the law firm of Shaw
Pittman, and Shaw Pittman engaged the accounting firm of Arthur Andersen LLP, to
assist  with  the comprehensive investigation of these matters. The Board placed
Kenneth  W.  Winger,  the  Company's President and Chief Executive Officer and a
director,  Michael  J.  Bragagnolo, Executive Vice President and Chief Operating
Officer  and  Paul  R.  Humphreys,  Senior  Vice  President of Finance and Chief
Financial  Officer,  on  administrative  leave  on  March  5,  2000. The Company
accepted  the  resignations  of  Messrs.  Winger,  Bragagnolo, and Humphreys, as
officers, in mid-May 2000 and of Mr. Winger, as a director, on June 9, 2000, and
subsequently  terminated  the  employment of these individuals in July 2000. The
Special  Committee  (Investigation)  is  continuing  its  investigation.

On  March  8,  2000,  PricewaterhouseCoopers  LLP,  the  Company's  independent
accountants,  withdrew  its  audit  reports  covering  the  Company's  financial
statements for fiscal years 1999, 1998 and 1997.  On August 1, 2000, the Company
dismissed  PricewaterhouseCoopers LLP as its independent accountants and engaged
Arthur  Andersen  LLP  as  successor  independent  accountants.

As  discussed  in  greater  detail  in  Part  I,  Item 3 (Legal Proceedings), in
connection  with  the  events  giving rise to the investigation of the Company's
financial  results,  various  class  actions have been filed by and on behalf of
shareholders  and bondholders of the Company naming as defendants, among others,
the  Company,  Laidlaw Inc. ("Laidlaw"), and PricewaterhouseCoopers LLP, as well
as  current  and  former  officers and directors of the Company and Laidlaw.  As
discussed  below, due to the fact that the Company filed a Chapter 11 bankruptcy
petition  under  the Bankruptcy Code on June 9, 2000, all litigation against the
Company  is subject to an automatic stay.  As further discussed below, after the
Company  filed  its  Chapter  11 bankruptcy petition, amended consolidated class
action  complaints  have  been  filed  in  which  the Company was not named as a
defendant.  In  addition,  Safety-Kleen Corp. has received subpoenas relating to
investigations  by  the Securities and Exchange Commission and the United States
Attorney  for  the  Southern  District  of  New  York.

As  a  result  of  the  preliminary  findings  of the investigation, the Company
determined  to  restate its previously reported financial results for 1999, 1998
and  1997.  The  financial  information  contained  in this Form 10-K/A has been
restated to incorporate all related information obtained from the investigation.


                                        1
<PAGE>
BANKRUPTCY  PROCEEDINGS

As  discussed more fully in Part I, Item 3 (Legal Proceedings), on June 9, 2000,
Safety-Kleen  Corp.  and  73  of  its  wholly  owned  domestic  subsidiaries
(collectively,  the  "Debtors")  filed  a  voluntary petition for reorganization
under Chapter 11 of the United States Bankruptcy Code (the "Bankruptcy Code") in
the United States Bankruptcy Court for the District of Delaware (the "Bankruptcy
Court").  The  Debtors  remain  in possession of their properties and assets and
management  of the Company continues to operate the business of the Debtors as a
debtor-in-possession.  As  a  debtor-in-possession, the Company is authorized to
operate  the business of the Debtors, but may not engage in transactions outside
of  the  ordinary  course  of business without the approval, after notice and an
opportunity  for  a  hearing, of the Bankruptcy Court. Pursuant to the automatic
stay  provisions  of  the  Bankruptcy  Code, all actions to collect pre-petition
indebtedness  of  the  Debtors,  as well as other pending litigation against the
Debtors, are currently stayed and other pre-petition contractual obligations may
not  be  enforced against the Debtors. In addition, as debtor-in-possession, the
Debtors  have  the  right,  subject  to the approval of the Bankruptcy Court and
certain  other  conditions,  to  assume  or  reject  any  pre-petition executory
contracts  and  unexpired  leases.

The  Bankruptcy  Court has approved payment of certain pre-petition liabilities,
such  as  employee  wages  and  benefits.  In addition, the Bankruptcy Court has
allowed  for the retention of legal and financial professionals to advise in the
bankruptcy  proceedings.  In  June  2000,  the  Bankruptcy  Court  approved  the
Company's  request for an initial $40 million in debtor-in-possession financing.
In July 2000, the Bankruptcy Court approved the Company's request for a total of
$100  million  in  debtor-in-possession  financing.  As  of  June  28, 2001, the
Company  had  issued  a  $19 million letter of credit and had no cash borrowings
pursuant  to  this  financing.

The  Company  presently  intends  to  reorganize  the  Company's  business  and
restructure  the Company's liabilities through a plan or plans of reorganization
to be filed with the Bankruptcy Court.  The Company has retained Lazard Freres &
Co.  LLC, an investment bank, as corporate restructuring advisor to assist it in
planning  and  implementing  a  reorganization.

At the time it filed its Chapter 11 cases, the Company was in default on certain
of  its senior securities. The Company (i) had not made interest payments on the
$60 million Promissory Note dated May 15, 1997, from the Company to Westinghouse
Electric  Corporation  and  thereafter  assigned  by  Westinghouse  Electric
Corporation  to  Toronto  Dominion  (Texas)  Inc.  (the  "$60 million Promissory
Note"),  (ii)  had  not made interest payments on its $325 million 9 1/4 percent
Senior  Subordinated Notes due 2008, (iii) had not made interest payments on its
$225 million 9 1/4 percent Senior Notes due 2009 and (iv) had not made principal
and  interest  payments under its Amended and Restated Credit Agreement dated as
of  April  3,  1998,  among  Safety-Kleen Services, Inc. (formerly known as LES,
Inc.),  Safety-Kleen  Services  (Canada)  Ltd.  (formerly  known  as  Laidlaw
Environmental  Services  (Canada)  Ltd.), the Lenders, Toronto Dominion (Texas),
Inc.,  The  Toronto  Dominion  Bank,  TD Securities (USA) Inc., The Bank of Nova
Scotia,  NationsBank, N.A., The First National Bank of Chicago and Wachovia Bank
N.A. (the "Credit Facility"). In addition to the aforementioned defaults, filing
of  the  petition  for reorganization resulted in a default of certain covenants
under  the  above  described Credit Facility and the $60 million Promissory Note
and the Indenture of Trust dated as of July 1, 1997, between Tooele County, Utah
and  U.S.  Bank;  the  Indenture  of  Trust  dated  as  of July 1, 1997, between
California Pollution Control Financing Authority and U.S. Bank; the Indenture of
Trust dated as of August 1, 1995, between Tooele County, Utah and West One Bank;
the  Indenture  dated as of May 1, 1993, between Industrial Development Board of
the  Metropolitan  Government  of  Nashville and Davidson County (Tennessee) and
NationsBank  of  Tennessee, N.A.; the Indenture dated as of May 17, 1999 between
the Company and Cole Taylor Bank as successor trustee to the Bank of Nova Scotia
Trust  Company;  and  the  Indenture  dated  May 29, 1998 between LES, Inc., the
Company,  sub-guarantors  and  Norwest  Bank Minnesota, N.A. as successor to the
Bank  of  Nova  Scotia  Trust  Company  of  New  York,  as  Trustee.

NEW  MANAGEMENT  TEAM

From  March  6,  2000  through  May 22, 2000, David E. Thomas, Jr. and Grover C.
Wrenn,  outside  directors  of the Company, co-managed the Company on an interim
basis  as  its  most  senior executives.  On May 4, 2000, Mr. Thomas was elected
Chairman  of  the Board. On May 22, 2000, Mr. Thomas was elected Chief Executive
Officer  and  Mr.  Wrenn  was elected President and Chief Operating Officer.  On
August  17,  2000, Larry W. Singleton, previously unaffiliated with the Company,
was  appointed  Chief  Financial  Officer.

Under  current  management, the Company has secured authorization for up to $100
million  in  debtor-in-possession financing, sold idle or under-utilized Company
assets, reorganized the Company into two divisions (Chemical Services and Branch
Sales  and  Service),  improved  the  Company's  information  technology  and
transportation  management  systems,  outsourced operation of the Company's data
management  center,  filled  key  financial  accounting and reporting positions,
negotiated  an  agreement  with  federal  and  state  regulators under which the
Company secured additional time to replace financial assurance for its operating
facilities  which was provided through surety bonds issued by Frontier Insurance
Company  ("Frontier")  (see  the  detailed  discussion  in  "Financial Assurance
Matters"  below),  and  replaced  the  Company's  accounting  firm.  The Company
believes that, as a result of these initiatives, it has been able to retain most
of  its  customers,  avoid significant employee layoffs or facility closures and
maintain  normal  business  operations  without  making  cash  borrowings on its
debtor-in-possession  financing  (see  "Bankruptcy  Proceedings"  above  for
additional  detail).


                                        2
<PAGE>
Since  March 2000, four new independent outside directors have been named to the
Board  of  Directors  of  the  Company.  In  May  2000,  Kenneth K. Chalmers was
appointed  to  the  Board  of  Directors of the Company. In March 2001, Peter E.
Lengyel  and  David  W. Wallace were each appointed to the Board of Directors of
the  Company and in April 2001, Ronald A. Rittenmeyer was appointed to the Board
of Directors of the Company.  All additions filled vacant positions on the Board
and  currently  all  positions  on  the  Board  are  filled.


FINANCIAL  ASSURANCE  MATTERS

As  discussed  more  fully  in  Part  I,  Item  3 (Legal Proceedings), under the
Resource  Conservation  and  Recovery Act ("RCRA"), the Toxic Substances Control
Act  ("TSCA"),  and  analogous  state  statutes, owners and operators of certain
waste  management  facilities are subject to financial assurance requirements to
ensure  performance  of  their  closure,  post-closure,  and  corrective  action
obligations.  Safety-Kleen  and  certain  of  its  subsidiaries  as  owners  and
operators  of  RCRA  and  TSCA  waste management facilities are subject to these
financial  assurance  requirements.  Applicable  regulations  allow  owners  and
operators  to provide financial assurance through a surety bond from an approved
surety.  On  May 31, 2000, the United States Department of the Treasury declared
that  Frontier  Insurance  Company, from which Safety-Kleen and its subsidiaries
had  obtained  more  than  50  percent  of the required assurance in the form of
surety  bonds, was no longer qualified as an acceptable surety on federal bonds.

Accordingly,  effective May 31, 2000, Safety-Kleen and its affected subsidiaries
no  longer  had  compliant  financial  assurance  for  many  facilities.  Under
applicable regulations, Safety-Kleen and its affected subsidiaries were required
to obtain compliant financial assurance within 60 days and, in some states, more
quickly.  The Company and the United States Environmental Protection Agency (the
"EPA"),  acting  on  behalf  of  many,  but  not all, affected states engaged in
negotiations  resulting  in  the  entry  of  a Consent Agreement and Final Order
("CAFO").  Under  the  CAFO,  Safety-Kleen  and  its  affected subsidiaries were
initially  required  to  obtain  compliant  financial  assurance  no  later than
December  15,  2000;  pursuant  to  a  provision  in the CAFO, that deadline was
extended to February 28, 2001, and then to April 30, 2001. The Company has since
obtained  a further extension to July 31, 2001 for some facilities and September
30,  2001 for the remaining facilities. The Company will seek further extensions
if  necessary,  but  the  CAFO  does  not  require the EPA to grant such further
extensions.  There  can be no assurance that the Company will meet the deadlines
for  obtaining  compliant  financial  assurance.  If  Safety-Kleen's  affected
subsidiaries  are  unable  to  secure  compliant  financial  assurance  by  the
agreed-upon  deadlines,  the  CAFO  requires  Safety-Kleen  and  its  affected
subsidiaries  to  cease accepting waste and to initiate closure and post-closure
measures  in  accordance  with  their  permits  and applicable federal and state
requirements.  Pursuant  to  the  CAFO  the  Company's lenders and the unsecured
creditors  committee retain the right to oppose through the Bankruptcy Court any
efforts  by  the  EPA  to  require  the Company to initiate any such closure and
post-closure  measures.  Under  the  CAFO,  the  EPA  reserves  the  right,  in
consultation  with  an  affected  state,  to  determine in its discretion and in
accordance  with  applicable  law,  to modify these requirements. The Bankruptcy
Court  approved  the  CAFO on October 17, 2000 and the most recent extensions on
May  16, 2001. Certain, but not all, affected states are participants in the EPA
CAFO.  Safety-Kleen and its affected subsidiaries have oral or written extension
agreements  with  virtually  all  other affected states, and no state has sought
closure  of  a  facility  on  grounds  that  the  facility lacks valid financial
assurance.  The  State  of  Texas  recently  has  undertaken certain enforcement
activity  pertaining  to financial assurance. On June 20, 2001, Safety-Kleen and
its affected subsidiaries filed a motion in Bankruptcy Court seeking approval of
a  transaction  pursuant  to  which  it  will  replace Frontier at more than 100
facilities.  These  matters  are  described  in greater detail in Part I, Item 3
(Legal  Proceedings). Although the surety bonds issued by Frontier are no longer
qualified  as acceptable federal bonds, they remain in place and effective until
replaced  and  the  Company  continues  to  pay  the  premiums  on  the  bonds.

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


                                        3
<PAGE>
SALE  OF  EUROPEAN  OPERATIONS

On August 11, 2000, the Company completed the sale of its remaining 44% interest
in its European operations.  The Company received approximately $34.4 million in
cash  and,  subject  to  contingencies,  approximately  $1.3 million in deferred
payments.  From  these  proceeds  and  the proceeds of the sale of the Company's
Rosemount  facility,  approximately  $19.0  million  was  paid  to the Company's
pre-petition  lenders  in the Credit Facility as an adequate protection payment.
On  December  23,  1998,  the  Company had announced the recapitalization of its
European  operations  resulting  in  the  sale  of  56%  of the Company's equity
interest  in  those  operations.

MAJOR  SHAREHOLDER

As  of  August  31,  2000,  Laidlaw  beneficially  owned  43.5% of the Company's
outstanding  Common Stock.  Laidlaw announced publicly on September 13, 1999 its
intention to divest itself of all the Company's Common Stock it owned within six
to  twelve  months.  On  September  13,  1999,  the Company's Board of Directors
appointed  a  Special  Committee  ("Special  Committee  (Sale)")  made  up  of
independent  non-Laidlaw  directors  to consider the implications of and explore
strategic  alternatives  for the Company with respect to the announced change in
Laidlaw's  time horizon for divesting its common share ownership of the Company.
On  February  8,  2000,  the  Board of Directors disbanded the Special Committee
(Sale)  after  the  Special  Committee  (Sale)  determined  that  further action
regarding  a  potential  sale  of the Company was unwarranted at that time.  See
also  the  "Laidlaw  Inc.  Relationships"  discussion  in  Item  13 of Part III.

                               BUSINESS OPERATIONS

In  providing  industrial  waste  services,  the  Company has two divisions: (a)
Chemical  Services and (b) Branch Sales and Service.  Chemical Services provides
various  services  to  industrial  and  commercial  customers  and  governmental
entities,  mainly  in  the  United  States  and  Canada.  These services include
hazardous and non-hazardous waste collection, treatment, recycling, disposal and
destruction  of  hazardous and non-hazardous waste at Company owned and operated
facilities.  Branch  Sales and Service includes parts cleaner services and other
specialized  services  to  automotive  repair,  commercial  and  manufacturing
customers.  See  Note  23 to the Company's consolidated financial statements for
financial  information  about  industry  segments  and  geographical  regions.

                           CHEMICAL SERVICES DIVISION

The  Chemical Services Division operates approximately 110 primary and satellite
locations  from  which  it  provides waste management services in North America.
Operationally  the  Division  is  divided  into three geographic regions.  These
regions  are  the  Eastern  United  States,  Western  United States, and Eastern
Canada.

The services offered consist primarily of the collection, treatment and disposal
of  a  wide  variety  of liquid and solid wastes, hazardous or non-hazardous, in
drum, tanker or roll-off containers from customer locations.  Depending upon the
type  of  customer, the Company may make frequent pickups of large quantities or
may  pick  up  only  one  or  a  few  55-gallon  drums on a periodic basis.  The
Division's  network of 18 service centers primarily focuses on the collection of
the  smaller  waste streams whereas the larger customers typically ship directly
to  the end disposal sites with full truckloads of material.  Depending upon the
content,  the  material collected may be recycled into usable solvent, processed
into  a  waste-derived  fuel  for  use  in the cement manufacturing industry, or
disposed  of  through  processes  such  as  incineration, landfill or wastewater
treatment.

The  Company  provides  final treatment and disposal services designed to manage
hazardous  and  non-hazardous  wastes,  which  cannot  be otherwise economically
recycled  or reused.  Incineration, landfill and wastewater treatment facilities
provide  such  solutions  for  the  majority  of these industrial waste streams.
Additionally  the  division  provides  a  complement  of  other  services  and
technologies  for  more  specialized  or  economical  handling  of certain waste
streams.  These  services  include consulting services, industrial services, PCB
management,  and  transportation  services.

COLLECTION,  TREATMENT  AND  DISPOSAL  SERVICES

INCINERATION

The  Company  offers a wide range of technological capabilities and locations to
customers through its network of eight incineration facilities.  Incineration is
the  preferred  method  for the treatment of organic hazardous waste, because it
effectively destroys the contaminants at temperatures in excess of 2,000 degrees
Fahrenheit.  High temperature incineration effectively eliminates organic wastes
such  as  herbicides,  halogenated  solvents, pesticides, and pharmaceutical and
refinery  wastes,  regardless  of  whether  they  are gases, liquids, sludges or
solids.  Federal  and  state  incineration regulations require a destruction and
removal  efficiency  of  99.99%  for  most  organic  wastes  and  99.9999%  for
polychlorinated  bi-phenyls  ("PCBs")  and  dioxin.


                                        4
<PAGE>
In  the  United  States,  the  Company  operates four solids and liquids-capable
incineration  facilities  with  a combined annual capacity of over 250,000 tons,
one lower volume specialty incineration facility and one RCRA subpart X facility
permitted  to  burn  explosives.  The  Company also operates two hazardous waste
liquid  injection  incinerators  in  Canada.

The  Company's  incineration  facilities in Deer Park, Texas and Aragonite, Utah
are designed to process liquid organic wastes, sludges, solids, soil and debris.
The  Company has initiated closure activities at its Coffeyville, Kansas and the
Bridgeport,  New Jersey facilities due to underutilization.  Regulatory agencies
were  given notification of the Company's intent to close the facilities and the
Company  is proceeding with the closure process.  The Deer Park facility has two
kilns and a rotary reactor.  Additionally, the Deer Park facility has an on-site
landfill  for  the disposal of ash and other waste material produced as a result
of  the  incineration  process.  The  landfill  is  built  and permitted to RCRA
hazardous  waste  standards.

Incineration  facilities  in  Mercier,  Quebec  and  Sarnia,  Ontario are liquid
injection incinerators, designed primarily for the destruction of liquid organic
waste.  The  Mercier  facility  also  has a system to blend and destroy pumpable
sludges.  Typical  waste  streams include wastewater with low levels of organics
and  other  higher  concentration  organic  liquid  wastes  not  amenable  to
conventional  physical  or  chemical  waste  treatment.

All  of the Company's United States incineration facilities have received Part B
permits  under  RCRA. Part B permits are generally issued for periods of five or
ten  years,  after  which  the  permit  must  be  reviewed  by  state or federal
regulators or both before the permit can be renewed for additional terms. Except
as  discussed  in  Part  I, Item 3 (Legal Proceedings) with respect to financial
assurance matters and as discussed in "Recent Developments - Financial Assurance
Matters,"  management is not aware of any issues at any of the Company's thermal
treatment  sites  that  would preclude the renewal of any of its Part B permits.

During  fiscal  1997,  the  Company  closed  its  less  efficient  and redundant
incineration  facilities  at  Baton  Rouge,  Louisiana, and Clive, Utah.  During
fiscal  1998,  the  Company  closed  its incinerator at Roebuck, South Carolina,
further reducing excess capacity.  These three closures eliminated approximately
215,000  tons  of  practical  capacity from the off-site commercial incineration
market.  The industry's total off-site commercial incinerator practical capacity
was  estimated  at  1.0  million  tons  in  1999,  according  to  "EI  Digest."

LANDFILLS

The  Company  operates  ten  commercial  landfills located throughout the United
States and Canada. A total of eight landfills are designed and permitted for the
disposal  of  hazardous  wastes.  The  Company  also  owns  and  operates  a
non-commercial  landfill,  which only accepts waste from an on-site incinerator.
Two landfills are operated for non-hazardous industrial waste disposal and, to a
lesser extent, municipal solid waste.  As discussed in greater detail in Part I,
Item  3  (Legal  Proceedings), the Company's landfill located in Pinewood, South
Carolina  suspended  waste disposal on September 25, 2000, pending action by the
South  Carolina  Department  of  Health  and  Environmental Control and/or court
decision  allowing  continued  waste  disposal.

The  Company  operates  eight  commercial  hazardous  waste  landfills  in North
America.  Of these facilities, six are located in the United States, and two are
located  in  Canada.  As  of  August  31,  2000,  the useful economic lives (for
accounting purposes) of these landfills include approximately 20.1 million cubic
yards  of  remaining  capacity.  This  estimate  of the useful economic lives of
these  landfills  includes  permitted  airspace  and  unpermitted  airspace that
management  believes  to be probable of being permitted based on its analysis of
various  factors.  In  addition  to the capacity included in the useful economic
lives  of  these  landfills, there are approximately 32.8 million cubic yards of
additional  unpermitted  airspace  capacity  included in the footprints of these
landfills that may ultimately be permitted.  There can be no assurance that this
unpermitted  additional  capacity  will  be  permitted.

In the United States, the Company's hazardous waste landfills have been issued a
hazardous  waste  operating permit under the authority of  Subtitle C of RCRA (a
"Part B Permit").  The EPA's permitting process for RCRA Subtitle C landfills is
very  rigorous.  Before  a  permit  can  be  issued,  the applicant must provide
detailed  waste  analysis,  spill  prevention and control counter-measure plans,
detailed  design  specifications  (which  include  liner  design, leak detection
systems  and  rainwater  removal  systems),  groundwater  monitoring,  employee
training  and  geologic  and  hydrogeologic  investigations.  Furthermore,  the
applicant  must  post financial assurance instruments for landfill cell and site
closure and post-closure care.  All six of the Company's United States hazardous
waste  landfills  have  received  Part  B Permits and, except as described above
under  "Recent Developments  -  Financial  Assurance," meet or exceed Subtitle C
requirements.  These  permits  are  generally  issued for periods of five or ten
years, after which the permit must be reviewed by state or federal regulators or
both before the permit can be renewed for additional terms.  Except as discussed
in,  Part  I,  Item 3 (Legal Proceedings) with respect to the Company's landfill
located  in  Pinewood,  South  Carolina, and with respect to financial assurance
matters  discussed  above  under  "Recent  Developments  -  Financial  Assurance
Matters"  and Part I, Item 3 (Legal Proceedings), management is not aware of any
issues  at  any  of  the  Company's  United States sites that would preclude the
renewal  of its Part B landfill permits.  During fiscal year 2000, approximately
970,000 cubic yards of hazardous wastes were disposed of in all of the Company's
landfills  combined.


                                        5
<PAGE>
Except  as  discussed in Part I, Item 3  (Legal Proceedings) with respect to the
Company's  Lambton  landfill  located in Ontario, management is not aware of any
issues  at  any of the Company's Canadian landfill sites that would preclude the
renewal  of  their  landfill  operating  permits.

In  addition  to  its  hazardous  waste landfill sites, the Company operates two
non-hazardous  industrial  landfills  with  749,000  cubic  yards  of  remaining
permitted  capacity.  These  two facilities are located in the United States and
have  been  issued operating permits under the authority of  Subtitle D of RCRA.
Prior  to  issuance  of  a  permit,  the  Safety-Kleen  non-hazardous industrial
landfills  must  demonstrate  to  the  permitting agency and subsequently employ
operational  programs  protective of the integrity of the landfill, human health
and  the  surrounding  environment.  The  Company's  non-hazardous  landfill
facilities are permitted to accept commercial industrial waste, including wastes
from  foundries,  demolition  and  construction,  machine  shops,  automobile
manufacturing,  printing,  metal fabrications and recycling.  During fiscal year
2000, approximately 143,000 cubic yards of non-hazardous wastes were disposed of
in  these  landfills.

WASTE  WATER  TREATMENT

The  Company  offers  a  range of wastewater treatment technologies and customer
services.  Wastewater  treatment  is provided by five facilities and consists of
three  lines  of business: hazardous wastewater treatment, sludge de-watering or
drying  and  non-hazardous  wastewater  treatment.  These  services  include the
reduction,  treatment  and  disposal  of  both  hazardous  and  non-hazardous
wastewater,  sludges  and  solids  for both bulk and drummed waste.  The Company
removes  hazardous  components from hazardous industrial liquids  and chemically
or  physically  makes hazardous industrial liquids non-hazardous through various
treatment  technologies.  Specialized techniques reduce residues by recycling or
reusing spent products.  Batch treatment technologies also enable the Company to
handle  hard-to-treat  wastewater  streams.  Nonhazardous  waste  streams  are
biologically treated via land application, where nonhazardous waste, solids, and
liquids are combined to allow naturally occurring bacteria in soil to biodegrade
nonhazardous  waste streams.  The Company has initiated closure of its Hilliard,
Ohio  wastewater treatment facility and continued accepting waste from customers
until  February  16,  2001.  The  Hilliard  facility  will  continue  to process
inventories  over  the  next  few  months  as  part of its decommissioning plan.
During  fiscal  year  1997, the Company closed its wastewater treatment facility
located  in  Nashville,  Tennessee.

Aqueous  hazardous  waste  streams  are treated and disposed at a deep injection
well  located  in  Plaquemine,  Louisiana.

SERVICE  CENTERS

Waste  streams  collected  through  one  or more of Chemical Services Division's
offerings  may  be  routed  to one of the Company's 18 service centers where the
waste  is  temporarily  stored or consolidated with compatible waste streams for
more  efficient  transportation  to  final  recycling,  treatment  or  disposal
destinations.  A  majority of the Company's service centers in the United States
have  Part  B  permits under RCRA that, among other things, allow the Company to
store  waste  for  up  to  one  year  for bulking or transfer purposes.  Service
centers  are the largest source of waste streams for the Company's treatment and
disposal  facilities.

All  of  the  Division's service centers provide Lab Pack Services.  The primary
focus  of  Lab  Pack  Services  is  the  collection  and  proper  management  of
miscellaneous,  and  often  unidentified,  chemicals stored in small containers.
Because  the  list  of  Lab Pack chemicals removed from a particular site can be
extensive  and  vary widely in characteristics and quantities, the knowledge and
abilities  of  Company  field  chemists  are  often  required.

Most  of  the  Division's  service  centers provide In-Plant services.  In-Plant
Services  encompass  a  variety of services provided by Company personnel at the
generator's location.  In-Plant Services are customized to the specific needs of
the  customer.  With  Technical  Field  Services, the Company often prepares the
paperwork,  packages  the waste for shipment and provides for transportation and
disposal  management.

ADDITIONAL  SERVICES  OFFERED

Additional  services  provided  by  the  Chemical  Services  Division  include
consulting and industrial services, PCB management, and transportation services.

The  Division  provides  a  variety of consulting and industrial services, which
utilize  Safety-Kleen's  facilities,  specialized equipment and personnel.  Such
services  are  typically  customized  for  the  customer's  specific  project or
requirements.

The  Division  provides  PCB  management  services.  It  decontaminates
PCB-contaminated  oils  and  reclaims  metals  from  PCB-contaminated electrical
equipment.  The  Company  accomplishes  this recycling and reclamation through a
declorination  process  operated  from  six  facilities in Kansas, Pennsylvania,
Ohio,  and  Georgia.


                                        6
<PAGE>
The  Company's  transportation  operations  facilitate the movement of materials
among  its network of service centers and its treatment and disposal facilities.
Transportation  may  be  accomplished  by truck, rail, barge or a combination of
modes,  with  Company-owned  assets  or  in  conjunction  with  third-party
transporters.  Specially  designed  containment  systems,  vehicles  and  other
equipment  permitted for hazardous and industrial waste transport, together with
drivers  trained in transportation skills and waste handling procedures, provide
for  the  movement  of  customer  waste  streams.

                        BRANCH SALES AND SERVICE DIVISION

The  Branch Sales and Service Division provides its services primarily through a
network  of  approximately  180  branches  supported by 12 accumulation centers,
eight  solvent  recycling  plants,  seven  distribution  facilities,  three fuel
blending  facilities,  23 oil terminals, two oil re-refining plants and 44 other
miscellaneous  and  satellite locations.  The Division employs various recycling
processes, oil re-refining and waste-derived fuels blending for reuse as fuel in
cement  kilns  as  its  primary  processing  options.

The  Division  provides  specialized  services  to  its customers in the vehicle
repair,  manufacturing,  photo-processing,  medical  and  dry  cleaning markets.

EXCLUSIVE  DISTRIBUTION  AGREEMENT  WITH  SYSTEMONE(R)  TECHNOLOGIES,  INC.

A  subsidiary  of  the Company has signed an agreement to serve as the exclusive
distributor  of  the innovative line of parts cleaning equipment manufactured by
SystemOne(R)  Technologies, Inc. ("SystemOne(R)").  The Branch Sales and Service
locations  across North America began marketing SystemOne's(R) products in early
2001.  The multi-year agreement was approved by the Bankruptcy Court on December
15,  2000.

SystemOne(R)  designs  and manufactures a full range of parts cleaning equipment
for  use  in  automotive  and  industrial  markets.  These  products  feature
self-contained  solvent  recycling  technologies  that  provide customers with a
fresh supply of clean solvent on demand.  The SystemOne(R) product line includes
various-sized  models,  manual  and  automated,  with  applications  within both
automotive  and  industrial  markets.

LINES  OF  BUSINESS

The  largest  service  component of the Branch Sales and Service Division is its
Parts  Cleaner  Service.  Safety-Kleen  furnishes  Parts  Cleaner  Service  to
automobile  repair  stations,  car and truck dealers, small engine repair shops,
fleet  maintenance  shops  and  other  automotive,  retail repair and industrial
customers.  In  its  Parts Cleaner Service, the Company's service representative
installs  parts  cleaner  equipment  and  solvent  with a customer.  The service
representative  then  makes  service  calls  at  regular  intervals to clean and
maintain the equipment and to remove the dirty solvent and replace it with clean
solvent.  The  majority of the dirty solvent is recycled for reuse.  The Company
provides a choice of several models of parts cleaners to customers for their use
as  part of the Parts Cleaner Service and also provides service to customers who
own  their  own  parts  cleaner  equipment.  As  an alternative to solvent-based
systems, Safety-Kleen also offers a line of water-based cleaning systems through
its  Parts  Cleaner  Service.

Other  service  offerings  of  the  Branch  Sales and Service Division are Paint
Refinishing  Services,  Imaging  Services,  Dry  Cleaner  Services, Vacuum Truck
Services,  Integrated  Customer Compliance Services, Industrial Waste Collection
Services,  Used  Oil  Collection,  Re-Refining  Services,  Automotive  Recovery
Services  and  various  additional services.  These additional offerings utilize
the  same  facility  network and many of the same customer relationships as have
been  developed  for  the  traditional  Parts  Cleaner  Service.

The  Company's  Paint  Refinishing  Services  are  supplied  to new and used car
dealers,  auto body repair and paint shops and fiberglass product manufacturers.
Similar  to  the Parts Cleaner business, Company representatives place a machine
and  solvent  with  each customer, maintain the machine and regularly remove the
contaminated  solvent  and  replace  it  with clean solvent.  The Company either
recycles the contaminated solvent into clean solvent for reuse or blends it into
waste-derived  fuel used by cement kilns or incinerators.  Waste paint and paint
booth  filters  are  also  collected from these customers and blended for use as
fuel  at  cement  kilns  or  incinerators.  Company representatives also provide
clean  buffing  pads  and  remove  used  pads during regularly scheduled service
calls.  The used pads are washed, dried, inspected and returned to the Company's
distribution  system.

The  Company's  Imaging Service provides processing and silver recovery services
to  health care, printing, photo processing and other businesses and industries.
This  would  include  all  businesses  that  utilize  image capture, processing,
storage,  output,  or  delivery  of images.  Imaging Services recover the silver
contained  in  the  spent  photochemical  solutions  it collects from customers.
These  solutions  are  then  further  treated  and  processed  until they can be
discharged  as wastewater into publicly owned treatment works in compliance with
applicable  laws  and  regulations.  Silver  is also recovered from photographic
film  by  outside  processors.


                                        7
<PAGE>
Dry  Cleaner  Services  collect  and  recycle  contaminated  dry cleaning wastes
consisting  of used filter cartridges and sludge containing perchloroethylene or
mineral  spirits.  Whenever  possible,  chemicals are recycled and recovered for
reuse.

Vacuum  Truck  Services  use  specialized  vacuum trucks to remove residual oily
water  and sludge from underground oil/water separators found at many automotive
repair  shops  as  well  as  other  residual  fluids  found  at small industrial
locations. Collected oil is re-refined or reused as a waste-derived fuel source.

The  Division, through its 76% owned subsidiary 3E, provides Integrated Customer
Compliance  Services  to  its customers.  Service offerings in this area include
Material  Safety  Data  Sheets  ("MSDS")  Fax  on  Demand,  an  electronic  MSDS
management  program; Department of Transportation Shipping Paper Services, which
provides  appropriate  shipping papers for hazardous waste shipments; regulatory
training;  spill  and  poison control hotlines and on-site facility assessments.
Integrated  Customer  Compliance offers single services and bundled full service
programs  in  accordance  with  customer requests.  The Company has entered into
negotiations  to  sell  a  portion of its interest in 3E to a third-party buyer.

The  Division's  Industrial  Waste  Collection Services consist primarily of the
collection  of  a  wide  variety  of  liquid  and  solid  wastes,  hazardous  or
non-hazardous,  from  an  industrial  customer's  location.  Depending  upon the
content,  the  material  collected  by  the  Company may be recycled into usable
solvent, processed into a waste-derived fuel for use in the cement manufacturing
industry  or  disposed of through incineration, landfill or wastewater treatment
methods.

The  Division  also  provides Used Oil Collection and Re-Refining Services.  The
Company  collects  used  lubricating  oils  from  automobile  and truck dealers,
automotive  garages, oil change outlets, service stations, industrial plants and
other businesses.  The used oil is then transferred to a re-refining plant where
most  of  the  product  is  re-refined  into  high-quality  base  oil,  which is
manufactured  into a variety of finished high quality lubrication products.  The
Company  derives  revenue  both from fees it charges customers to haul away used
oil,  oily  water  and  glycol  and  from  the  sale  of products it produces by
processing  the  used oil.  The Company may also pay for higher quality used oil
where  competitive or market conditions warrant.  The Company's extensive branch
network  enables  it  to  collect  waste oil in sufficient volume to support oil
re-refining  operations,  which  produce  lubricating  oil  that  can be sold at
significantly  higher  prices  than  industrial  fuels. The Company operates oil
re-refining plants in Breslau, Ontario and East Chicago, Indiana.  The plants in
Breslau  and  East  Chicago  have  combined  annual  re-refining  capacities  of
approximately  135  million gallons of used oil per year.  Used oil collected in
excess  of  the  capacity  of  the  Company's  re-refining  facilities is either
processed into industrial waste-derived fuels or sold unprocessed for direct use
as  a  waste-derived  fuel  in  certain  industrial  applications.

Automotive  Recovery  Services  includes  the  collection  of  used oil filters,
gasoline  filters,  gasoline,  brake  fluid,  fluorescent bulbs, and other waste
materials  generated in the automotive market.  In addition, Automotive Recovery
Services  includes the sale and disposal of absorbent products in the automotive
market.  The  majority  of these products are fully recycled through internal or
external  processing  facilities.

Additional  services  provided  by the Branch Sales and Service Division include
tolling  operations  (where  a  customer's material is recycled and the recycled
product  is  returned to the customer).  The Division provides solvent and other
chemical  tolling  services  from  three  of its recycling plant locations.  The
pharmaceutical  industry  is  a  primary  customer  for  these  services.

                             COMPETITIVE CONDITIONS

The  hazardous  and  industrial  waste management industry, in which the Company
competes,  is  highly  competitive.  The sources of competition vary by locality
and  by  type  of service rendered, with competition coming from the other major
waste services companies and hundreds of privately owned firms which offer waste
services.  The  Company  also  competes  with  municipalities and larger plants,
which  provide  "on  site"  waste  services  for  their own waste materials.  In
addition,  the  Company  competes with many firms engaged in the transportation,
brokerage  and  disposal  of  hazardous  wastes through recycling, waste-derived
fuels  programs,  thermal  treatment  or  landfilling.  The principal methods of
competition for all of the Company's services are price, quality, reliability of
service  rendered and technical proficiency in handling industrial and hazardous
wastes  properly.

In  the  United States, the original generators of hazardous waste remain liable
under federal and state environmental laws for improper disposal of such wastes.
Even if waste generators employ companies that have proper permits and licenses,
knowledgeable  customers are interested in the reputation and financial strength
of the companies they use for management of their hazardous wastes.  The Company
believes  that  its  technical  proficiency  and  reputation  are  important
considerations  to  its  customers  in  selecting  and continuing to utilize the
Company's  services,  but  that its current bankruptcy proceedings may adversely
affect  some  of  its  customers'  perceptions  of  its  financial  strength.


                                        8
<PAGE>
Competitors operate large-scale commercial hazardous waste incinerators at eight
locations  throughout  North  America.  Other  companies  have  applied  for  or
received  permits  to  construct  and  operate  hazardous  waste  incinerators.
Competition  is  also encountered from certain cement kilns, which use hazardous
waste-derived  fuel  as  a  supplemental  fuel  source.  Generator-owned thermal
treatment  operations  and  mobile thermal treatment units also compete with the
Company's  fixed-location  facilities.

There  are 14 U.S. commercial hazardous waste landfills that are not operated by
the  Company.  Of  those  14,  ten  are  operated  by  Waste  Management  Inc.,
Envirosource  and  American Ecology and are spread throughout the United States.
Significant  competition exists for waste volumes generated by remedial cleanups
and  other  project-based  events.

The Branch Sales and Service Division of the Company is the market leader in the
United  States in its Parts Cleaner, Paint Refinishing and Dry Cleaner Services.
In  these  services,  the  Company  competes  with  local  or  smaller  regional
companies.

The Company is the market leader in North America in its Used Oil Collection and
Re-Refining  Services.  The price at which the Company sells its re-refined lube
oil  is  primarily  dictated  by  a  market dominated by large multinational oil
companies  and  has  been  positively  correlated  to  crude oil prices over the
long-term.  The  selling  price  of re-refined lube oil is also affected by lube
oil  refinery capacity changes in North America, which do not necessarily bear a
relationship  to  the  movement  of  crude  oil  price  changes.

                                    CUSTOMERS

The  Company  conducts  business  with  approximately  400,000 customer business
locations.  These  customers  represent diverse industries, including automotive
repair,  dry cleaning, photo imaging, automobile manufacturing and distribution,
chemical  and  petrochemical  manufacturing,  computer  and  micro-processor
manufacturing and primary metals, paper, furniture, aerospace and pharmaceutical
manufacturing.  No  one  customer  currently  accounts  for  more than 5% of the
Company's consolidated revenues.  The Company's customers are located throughout
the  United  States,  Canada,  Puerto  Rico,  Mexico  and  Saudi  Arabia.

The hazardous and industrial waste management business is cyclical to the extent
that  it is dependent upon a stream of waste from cyclical industries.  If those
cyclical  industries  slow significantly, the business that the Company receives
from  those  industries  is  likely  to  slow.

                                   SEASONALITY

Adverse  winter  weather  moderately  affects  some of the Company's operations,
primarily  in  the  Chemical  Services  Division, particularly during the second
fiscal  quarter.  The  main  reason  for this effect is reduced volumes of waste
being received at the Company's facilities and higher operating costs associated
with  operating in sub-freezing weather and high levels of snowfall.  The Branch
Sales  and Services Division is affected by fewer business days in the Company's
second  fiscal  quarter  due  to  holidays.

                                   REGULATION

HAZARDOUS  AND  SOLID  WASTE  REQUIREMENTS

The  Company's  services  involve  the  collection,  transportation,  storage,
processing,  recycling  and disposal of commercial, institutional and industrial
hazardous  and nonhazardous materials.  Substantially all of these materials are
regulated  in  the  United  States as "solid wastes" under RCRA.  In addition to
being  regulated  as solid wastes, many of these materials are further regulated
as  "hazardous  wastes."  Accordingly,  the Company is subject to federal, state
and  local  regulations governing hazardous and solid wastes. RCRA established a
national  program,  which  classified  various substances as "hazardous wastes,"
established requirements for storage, treatment and disposal of hazardous wastes
and  imposed requirements for facilities used to store, treat or dispose of such
wastes.  RCRA  was  amended  in 1984 by the Hazardous and Solid Waste Amendments
("HSWA")  which  expanded the scope of RCRA to include businesses which generate
smaller  quantities  of waste materials (so-called "small quantity generators"),
expanded  the  substances  classified as hazardous wastes by RCRA and prohibited
direct disposal of those wastes in landfills (thereby, in effect, requiring that
the  wastes  be  recycled,  treated  or  destroyed).

The  Company also operates a network of collection, treatment and field services
(remediation)  activities  throughout North America under TSCA.  TSCA operations
include  decommissioning  of  PCB  transformers  and articles, detoxification of
transformer  oils,  incineration of PCB liquids and solids, landfill disposal of
PCB  solids,  and  remediation of PCB contamination at customer sites.  In 1976,
TSCA  established a national program, which classified various substances as PCB
regulated  wastes  and  required minimum requirements for storage, treatment and
disposal  of  wastes.  Subsequently, the rules have been modified to enhance the
restrictions  regarding  management  of  TSCA  wastes.



                                        9
<PAGE>
Hazardous  and  solid waste regulations impose requirements which must be met by
facilities  used  to  store,  treat  and  dispose of these wastes.  Operators of
hazardous  waste  storage,  disposal  and  treatment  facilities,  such  as
Safety-Kleen,  must  obtain  a  RCRA  permit  from  federal  or authorized state
governmental  authorities to operate those facilities. States may also require a
solid  waste  permit.  The  Company  has  approximately  159  RCRA-permitted
facilities.

Except  as  described  above  under  "Chemical  Services  Division," and "Recent
Developments  -  Financial  Assurance  Matters,"  the Company believes that each
permit  will  be  renewed at the end of its existing term.  At the present time,
the  Company  does not intend to pursue RCRA permits for facilities which do not
currently  have  a RCRA permit and will limit the activities of those facilities
to  activities  that  are  not  regulated  by  RCRA.

The  EPA  has  promulgated  regulations that govern the management of used oils.
Although  used  oil  is  not  classified as a hazardous waste under federal law,
certain  states  do  regulate  used  oil  as  hazardous.  The  Company built and
operates  its  used  oil  facilities  to standards similar to those required for
hazardous  waste  facilities.

Materials collected by the Company through its Chemical Services Division may be
recycled for reuse, processed into waste-derived fuel to be burned in kilns used
in  the production of cement or incinerated in the Company's incinerators.  Much
of the waste-derived fuel is supplied to cement kilns with which the Company has
exclusive  supply contracts with respect to such fuel.  Cement kilns are subject
to  regulations,  which  govern  the  burning of hazardous wastes in boilers and
industrial  furnaces  ("Boiler  and  Industrial  Furnace  Regulations"  or  "BIF
regulations").  Since  1980,  under  the authority of RCRA, the EPA has required
incinerators  to  comply  with  provisions  that are similar to those in the BIF
regulations.  The  Company believes that all of the kilns with which the Company
has  exclusive  supply contracts and all of the Company's incinerators comply in
all  material  respects  with  the  applicable  regulation  requirements.  New
hazardous  waste  combustion  regulations enacted in September 1999 will replace
existing  boiler  and  industrial furnace regulations and commercial incinerator
regulations  (see  discussion  under  "Clean  Air  Act").

CLEAN  AIR  ACT

The  Clean Air Act was passed by Congress to control the emissions of pollutants
to  the air and requires permits to be obtained for certain sources of air toxic
emissions  or  criteria  pollutants, such as carbon monoxide.  In 1990, Congress
amended  the  Clean Air Act to require further reductions of air pollutants with
specific  targets  for non-attainment areas in order to meet certain ambient air
quality  standards.  These  amendments  also  require  the  EPA  to  promulgate
regulations  which:  (i) control emissions of 189 hazardous air pollutants; (ii)
create uniform operating permits for major industrial facilities similar to RCRA
operating permits;  (iii) mandate the phase-out of ozone depleting chemicals and
(iv)  provide  for  enhanced enforcement.  The Company believes each of its U.S.
operating  facilities  complies  in  all  material  respects with the applicable
requirements.

The  Clean  Air  Act  required  regulations,  which resulted in the reduction of
volatile  organic  compound  ("VOC")  emissions and emissions of nitrogen oxides
("NOx")  in  order  to  meet  certain  ozone attainment standards under the Act.
Additional emission reductions at the Company's incineration facilities, solvent
recycling  centers  and  branches could be required as the Company completes its
air  permitting  program  under  the  Act.

On  September  30,  1999, the EPA issued the final rules under the Clean Air Act
for  hazardous  waste  combustion  facilities.  These  rules  established  new
technology-based  (Maximum  Achievable  Control  Technology  or "MACT") emission
limits  and  operational  controls  on all new and existing incinerators, cement
kilns  and  light-weight aggregate kilns that burn hazardous waste-derived fuel.
These  rules  supersede  the  existing  RCRA  Subpart "O" and BIF permitting and
operating  regulations  that  have been in place since the late 1980's and early
1990's  respectively.  Existing  facilities  have  until  September 30, 2002, to
comply  with  the rule requirements unless a one-year extension is obtained from
the  EPA.

The  Company established a steering committee consisting of representatives from
the  Environmental  Compliance,  Engineering  and  Operations departments of the
Company  in  late  1999 to oversee implementation of the MACT provisions.  While
the  majority  of  the  implementation  work is being conducted at the operating
facilities,  the  steering committee is responsible for developing the corporate
strategy  for  achieving  compliance.  This includes coordination of engineering
design,  and  installation  of  emission  control  and  other process equipment,
establishing  compliance  milestones  and  ensuring  that  they  are  achieved,
coordination  of capital budget development and spending oversight, and insuring
that the facilities submit required reports and notices to regulatory officials.

During  fiscal  year  2000 the Company reviewed emission control alternatives at
the  Company's  five  U.S. incinerators as well as evaluated control systems and
other  aspects  of  facility operations that are impacted by the MACT rule.  The
Company also reviewed the other facilities regulated by MACT, e.g. cement kilns.
Each  incinerator  currently  meets  one  or  more  of  the  emission standards.
However,  additional  emission  abatement devices will be required at all of the
Company's  incinerators  to  ensure  compliance  with  all  of  the  standards.


                                       10
<PAGE>
The  Company  continues to evaluate control alternatives and determine what type
of  systems  to  install  at  each incinerator.  The Company conducted equipment
evaluation  tests  at the Bridgeport, New Jersey, Aragonite, Utah and Deer Park,
Texas  incinerators  during  the  second quarter of fiscal year 2001 in order to
gather information needed to make final system decisions and enable equipment to
be  properly  sized.  The  tests  at  the  Aragonite  facility  were designed to
determine  whether  the  incinerator  could meet the dioxin and mercury emission
standards  using powdered activated carbon. The facility is awaiting the results
of  the  tests.  Tests were curtailed at the Bridgeport facility upon a decision
to  cease operations at this site.  The Deer Park Facility has requested bids on
new  emission  control  equipment.  Since  the  Deer  Park,  Texas  Incineration
Facility  is  operating  in  a  Severe Ozone Non-Attainment Area, additional air
pollution  control  equipment  will have to be installed to control emissions of
Nitrogen  Oxides,  an  ozone  pre-cursor.

The  hearth  incinerator  located  at  the  Clarence, New York facility had been
exempt  from  regulation  under  RCRA but is now subject to the new Incineration
MACT  rules.  Safety-Kleen's  Engineering  group  is completing a full technical
review to determine what will be required to achieve compliance at the facility.
The  Clarence facility must also obtain a Clean Air Act Title V operating permit
for  which  it has been heretofore exempt.  The Company has submitted the permit
application  to  the  EPA.

The  Company  anticipates  that  the  Aragonite,  Utah  incinerator  will  be in
compliance with all aspects of the MACT rule by the September 30, 2002 deadline.
The  Company intends to fund the costs for these improvements from the Company's
available  cash,  operating  earnings, its debtor-in-possession financing or, in
subsequent  periods,  an  anticipated  new  working  capital borrowing facility.
Modifications  to  the  Deer  Park,  Texas  Incineration Facility will require a
one-year extension of time from the U.S. EPA and the Texas Department of Natural
Resources  and  Conservation  Commission ("TNRCC") to complete all permitting of
engineering  work.

TNRCC recently enacted new Clean Air Act Regulations dealing with the monitoring
and  control  of  emissions of NOx and VOCs.  These new regulations are required
because  of  a  recent  revision in the ozone non-attainment designation for the
Houston  Metropolitan  Area.  This  area  was  formerly  designated as a serious
non-attainment  area under the State Implementation Plan required by the Federal
Clean  Air  Act  Amendments.  Recent  air monitoring data has caused the Houston
Metropolitan Area to be re-classified as a severe non-attainment area.  This new
designation will require the Company's Deer Park, Texas incineration facility to
further  reduce  smoke  stack  emissions  of  Nitrogen  Oxides.  Nitrogen  Oxide
emissions contribute to the formation of ground-level ozone which can be harmful
to  human  health  and  the  environment.  The  Company  intends  to  enter into
negotiations  with  the  TNRCC  to implement necessary modifications to the Deer
Park  facility's  air  pollution  control system to accommodate the incineration
MACT  standards  and  new  Nitrogen  Oxide Emission reduction requirements.  The
Company intends to request a one-year extension to the MACT compliance deadlines
(September 30, 2002) to effect facility modifications to achieve compliance with
the  MACT  and  NOx  emissions  control  regulations.

The  EPA  continues  to  develop  regulations  that  would  establish management
standards  for  cement kiln dust ("CKD").  The Company and the kilns to which it
sends  waste-derived  fuel  have  developed  programs  for  analyzing  and
characterizing  CKD  in anticipation of these new management standards; however,
at  this time it is not clear what impact these CKD regulations will have on the
Company.

The South Coast Air Quality Management District ("SCAQMD"), the air district for
the  greater  Los  Angeles,  California  area,  has amended its rule setting the
allowable  VOC  content  of  materials  used  for  remote  reservoir  repair and
maintenance  cleaning.  The  amended  rule,  in  effect, banned remote reservoir
parts cleaning with solutions containing VOCs in excess of fifty grams per liter
as of January 1, 1999, except in certain applications.  Substantially all of the
Company's  parts  cleaners placed with SCAQMD customers prior to the adoption of
the  amended rule utilized solvents containing VOCs in excess of fifty grams per
liter.  The  Company  offers  aqueous parts cleaning systems which meet the 1999
SCAQMD  requirements  and  has worked with its SCAQMD customers to convert their
solvent  parts  cleaners  to  an  alternative  cleaning solvent or solution.  In
addition, the Company will continue to work actively with the SCAQMD to identify
appropriate  exemptions  and  develop  alternatives  to  the 1999 VOC limits for
materials  used  for  remote  reservoir  parts  cleaning.

On  April  28, 2001, the San Joaquin Air Quality Management District promulgated
regulations  similar  to  those  enacted by the SCAQMD.  The Company anticipates
that other air quality management districts in California will adopt similar VOC
control  regulations.  The Company has been able to obtain certain exemptions in
VOC  reduction  rules  promulgated  by  the  San  Francisco Bay Area air quality
management  district which allow small businesses to continue to utilize mineral
spirits  parts  washing equipment (otherwise known as "the one machine exemption
rule").  Other  geographical  areas  designated  by  the  U.S. EPA as Serious or
Severe Ozone Non-Attainment Areas may promulgate VOC reduction rules, similar to
the California Regulatory models, causing the Company to replace mineral spirits
parts  washing  machines  with  aqueous-based  systems.


                                       11
<PAGE>
CLEAN  WATER  ACT

The  Clean  Water  Act regulates the discharge of pollutants into surface waters
and  sewers  from  a  variety of sources, including disposal sites and treatment
facilities.  The  Company  is  required  to obtain discharge permits and conduct
sampling  and  monitoring  programs.  The Company believes each of its operating
facilities  complies  in all material respects with the applicable requirements.

CERCLA  AND  RELATED  REQUIREMENTS

The  Comprehensive  Environmental  Response,  Compensation  and Liability Act of
1980, as amended by the Superfund Amendments and Reauthorization Act ("CERCLA"),
creates  a  fund  of monies ("Superfund") which can be used by the EPA and state
governments  to  clean  up hazardous waste sites pending recovery of those costs
from defined categories of "potentially responsible parties" ("PRPs").  Most EPA
cleanup  efforts  are  at  sites  listed or proposed for listing on the National
Priorities  List  ("NPL").  Various  states  have  also  enacted  statutes which
contain  provisions  substantially  similar  to  CERCLA.

Generators and transporters of hazardous substances, as well as past and present
owners  and  operators  of  sites  where  there  has been a release of hazardous
substances, may be strictly, jointly and severally liable for the clean-up costs
resulting  from  releases and threatened releases of CERCLA-regulated "hazardous
substances."  Under  CERCLA, these responsible parties can be ordered to perform
a clean-up, can be sued for costs associated with private party or public agency
clean-up,  or  can  voluntarily  settle  with  the  government  concerning their
liability  for  clean-up  costs.

The Company audits facilities where it ships materials in an attempt to minimize
its  potential  Superfund  liability at these sites.  For a discussion regarding
the  Company's  current involvement as a PRP at CERCLA sites, see Part I, Item 3
(Legal  Proceedings).

               ENVIRONMENTAL LIABILITIES AND CAPITAL EXPENDITURES

A  portion  of the Company's capital expenditures are related to compliance with
environmental  laws  and  regulations.  The  Company employs a strategic capital
cost  planning and expenditure modeling process to determine short and long-term
capital  spending needs for compliance with local, state, federal and provincial
rules  and  regulations.  Each  year  the  model  is  revised  to  reflect  new
developments  in  the environmental regulatory arena (e.g. new Federal Clean Air
Act  Regulations  affecting Hazardous Waste Incineration facilities, or facility
specific  compliance  assurance  spending  needs).

In  addition  to  these  capital  expenditures,  the  Company may incur costs in
connection  with  closure  activities at certain of its sites.  When the Company
discontinues  using  or  changes  the  use of a hazardous waste management unit,
formal closure procedures must be followed, and such procedures must be approved
by  federal  or  state  environmental  authorities.  In  some  cases,  costs are
incurred  to  complete  remedial  clean-up  work  at  the site.  In addition, at
certain  of  the  Company's  other  operating  sites,  remedial clean-up work is
required  as  part  of  the  RCRA  Corrective  Action Program or other state and
federal  programs.

With respect to various operating facilities, the Company is required to provide
financial  assurance  with  respect  to certain statutorily required closure and
post-closure  obligations.  The  Company provides most of the required financial
assurance  through a combination of performance bonds and insurance policies, as
allowed  by  the  applicable  regulatory  authorities.  As discussed above under
"Recent  Developments  -  Financial  Assurance Matters," as of May 31, 2000, and
continuing through the date hereof, the Company and its affiliates no longer had
or have compliant financial assurance for many of their facilities and are using
their  best efforts to obtain compliant financial assurances as expeditiously as
possible.

                                    EMPLOYEES

As  of  May 1, 2001, the Company had 9,618 employees.  Approximately 4.8% of the
Company's  employees  are  represented  by various collective bargaining groups.
Management  believes  that  its  relations  with  its  employees  are  good.

                   FACTORS AFFECTING FUTURE OPERATING RESULTS

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


                                       12
<PAGE>
UNCERTAINTIES  RELATING  TO  THE  COMPANY'S  INTERNAL  CONTROLS

The  new  management  team  has  identified  numerous critical issues which will
require  resolution  prior  to  the  Company's emergence from its reorganization
proceedings.  In  addition  to  these  efforts,  and  as part of the restatement
process,  the  Company identified material deficiencies in many of its financial
systems,  processes  and  related  internal  controls  and  commenced efforts to
correct  these conditions.  During October 2000, Arthur Andersen LLP reported to
the  Audit  Committee  of  the  Board of Directors that the Company had material
weaknesses  in  its  internal  controls  and  that  these  conditions  would  be
considered in determining the nature, timing and extent of their audit tests for
fiscal  years  1997  through  2000.

The  Company continues the process of correcting these conditions by filling key
financial  accounting  and  reporting  positions  in  the  organization,  adding
information  technology  controls  and  improving  its  financial  systems  and
processes.  The  Company intends to continue to utilize substantial internal and
external  resources  to  supplement these initiatives until it is satisfied that
its  internal controls no longer contain material weaknesses. The Company cannot
estimate,  at  this  time,  how  long  it  will  take  to completely develop and
establish  an  adequate  internal  control  environment.

During  the last twelve months, the Company contracted with outside accountants,
including  accountants  from Arthur Andersen LLP, who provided significant hours
of  work  to  assist the Company's corporate and field accounting personnel with
the  analysis  and  financial reporting systems support necessary to prepare the
Company's  fiscal  1997  to  2000  consolidated  financial  statements and other
information  requirements  of  this  Form  10-K/A.  During this same period, the
Company  began  taking steps to develop a comprehensive program that, over time,
will  establish  a  satisfactory  system  of  internal controls and a timely and
reliable  financial reporting process.  As part of this program, a comprehensive
review  has begun of the process-flow and related controls surrounding all major
transaction cycles starting with the transaction's origination at both field and
corporate  locations.  As  discussed more fully in the notes to the consolidated
financial  statements, the Company has now identified and implemented accounting
policies  that  conform with generally accepted accounting principles for use in
its financial reporting.  In addition, the program will complete the development
and implementation of the required internal policies and processes regarding all
major  general  ledger accounts and related internal controls.  An evaluation of
the  Company's  system  needs, including among other things those related to its
general  ledger  and  financial  reporting,  is  in  progress.

During  this  period, the Company has hired a new Chief Financial Officer, a new
Corporate  Controller,  two  division  senior  financial  officers  and a senior
division  controller,  that  collectively  have  over  100  years  of  relevant
experience in directing, maintaining, monitoring, controlling, and preparing the
books and records and financial statements for major corporations.  In addition,
the Company has hired numerous other experienced accounting, financial reporting
and  management  personnel,  including  among  others,  two  senior  credit  and
collections  managers,  an  experienced  payroll manager and several experienced
corporate  accounting  and reporting department managers.  Many of the new hires
are  certified  public  accountants  and  most  have  experience  in  business
environments  involving  the  record  keeping  and internal control requirements
applicable  to  SEC  registrants.  These  individuals  will  serve  as  the core
financial leadership to complete the Company's program, including management and
oversight  of  the  Company's  accounting and finance staffing and organization.

Significant  additional  hours  of contract non-audit outside accounting will be
required  to  assist  the  Company in its preparation of the quarterly and other
financial reporting requirements for fiscal 2001.  A substantial portion of this
supplemental  effort has begun.  Accordingly, the Company will incur significant
costs  and  effort to close its books at each interim and annual period in order
to  produce  reliable  financial  statements.

UNCERTAINTIES  RELATING  TO  BANKRUPTCY  PROCEEDINGS

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

In  connection  with the development of plan of reorganization alternatives, the
Company  will  evaluate  any  and  all  proposals  to  maximize the value of the
Debtors.  In connection with a recent amendment to the DIP Facility, the Company
will  prepare  a  Chemical  Services  marketing  book  and begin distribution to
potential  acquirers or strategic partners by August 31, 2001.  No assurance can
be  given  as  to  the  probable  outcome  of  such  marketing  effort.


                                       13
<PAGE>
EFFECT  OF  LAIDLAW'S  FINANCIAL  SITUATION  ON  THE  COMPANY

On  May  18, 2000, Laidlaw announced that its Board of Directors had declared an
interest  payment  moratorium  on all advances under the Laidlaw syndicated bank
facility  and  on  all  outstanding public debt of Laidlaw and Laidlaw One, Inc.
Certain  debt  holders  included  in  the  moratorium  have commenced actions to
attempt  to  recover  amounts  alleged to be owed to them and other debt holders
subject to the moratorium may also commence similar actions.  The Company cannot
predict  the  impact, if any, this moratorium and any related circumstances will
have  on  the  Company's  ability  to  collect  upon  Laidlaw's indemnification,
guaranty  and  other contractual obligations to the Company, which are described
in  Item  13  of  Part  III  (Certain  Relationships  and Related Transactions).

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

LEVERAGE

The Company is currently in default under its senior debt obligations, which are
substantial.  During the pendency of its bankruptcy proceedings, the Company may
only obtain additional debt financing with the approval of the Bankruptcy Court,
and  has  already  obtained  $100 million in such debt financing.  To date there
have  been  no  cash  borrowings  against this Amended and Restated $100 million
Debtor-In-Possession  Credit  Agreement  among  Safety-Kleen Services, Inc., The
Several  Lenders  from  Time  to Time Parties thereto, Toronto Dominion (Texas),
Inc., as General Administrative Agent and Underwriter and The CIT Group/Business
Credit,  Inc. as Collateral Agent and Underwriter Initially dated as of June 11,
2000  Amended  and  Restated  as  of July 19, 2000  (the "DIP").  Two letters of
credit  aggregating  $19  million  have  been  issued  under the DIP.  The total
remaining  availability  under  the  DIP is $81 million, of which $16 million is
available  for  letters of credit and the balance of which is available in cash.
Depending  on  the  resolution  of  its  bankruptcy  proceedings and the plan of
reorganization  adopted,  the  Company  could  emerge  from  bankruptcy  highly
leveraged  with  substantial  debt  service  obligations.  Thus  the  Company is
particularly susceptible to adverse changes in its industry, the economy and the
financial  markets. In addition, the Company's ability to obtain additional debt
financing  may  be  limited  by  restrictive covenants under the terms of credit
agreements  and any other debt instruments.  Those limits on financing may limit
the  Company's  ability  to service its debt obligations through additional debt
financing  if  cash  flow  from  operations  is  insufficient  to  service  such
obligations.  Unless  extended,  the  DIP Facility will mature on the earlier of
January  31,  2002,  or  the  effective  date  of  a  plan  of  reorganization.

ENVIRONMENTAL  REGULATION  AND  LEGAL  PROCEEDINGS

The  Company's  operations  are  subject to certain federal, state, territorial,
provincial  and  local  requirements which regulate health, safety, environment,
zoning  and  land-use.  Operating  and  other permits are generally required for
incinerators,  landfills,  transfer  and  storage facilities, certain collection
vehicles,  storage  tanks and other facilities owned or operated by the Company,
and  these permits are subject to revocation, modification and renewal. Although
the  Company  believes  that  its  facilities  meet  federal,  state  and  local
requirements  in  all  material  respects,  subject  to the impact of the events
discussed above under "Financial Assurance Matters" and have all of the required
operating  and  other  permits, it may be necessary to expend considerable time,
effort  and  money  to  keep  existing or acquired facilities in compliance with
applicable  requirements,  including  new  regulations, and to maintain existing
permits  and  approvals  and  to  obtain  the permits and approvals necessary to
increase  their capacity. Applicable requirements are enforceable by injunctions
and  fines  or  penalties,  including  criminal penalties. These regulations are
administered by the EPA and various other federal, state and local environmental
and  health  and  safety  agencies  and  authorities, including the Occupational
Safety and Health Administration of the United States Department of Labor and by
similar  agencies  in  Canada  and  Mexico.

As  discussed in "Regulation - Clean Air Act," the Company's United States-based
hazardous waste incinerators must be in compliance with the EPA's MACT rules, by
September  30,  2002, or by September 30, 2003, should the U.S. EPA and/or state
regulatory  agency  agree  to a one-time/one-year compliance deadline extension.
The  Company's  mineral  spirits  solvent-based  parts  washer business could be
adversely  affected  by  volatile  organic  hydrocarbon  emission  restrictions,
imposed  upon  this segment of the Company's business, by local and/or State Air
Pollution Control Agencies, in ozone non-attainment areas, e.g. certain portions
of  California,  Houston,  Texas,  etc.


                                       14
<PAGE>
CERCLA  imposes liability for the cost of cleanup of sites from which there is a
release  or  threatened release of a hazardous substance into the environment on
generators  and  transporters as well as current and former owners and operators
of  such sites. Given the substantial costs involved in a CERCLA cleanup and the
difficulty  of  obtaining insurance for environmental impairment liability, such
liability  could  have  a  material  impact on the Company's business, financial
condition  and  future  prospects.

The  Company is required to provide certain financial assurances with respect to
certain  statutorily  required  closure,  post-closure  and  corrective  action
obligations related to various operating facilities.  These financial assurances
may take the form of insurance, guarantees, bonds, letters of credit or deposits
of  cash,  to  the  extent  acceptable  to  the United States, Canadian or other
foreign,  state,  territorial,  federal,  provincial  or local courts, executive
offices,  legislatures,  governmental  agencies  or  ministries,  commissions or
administrative,  regulatory  or self-regulatory authorities or instrumentalities
("Governmental Entities") requiring such assurances.  There is no guarantee that
the  Company  will  be able to provide the required financial assurances without
increased  cost, or at all.  In addition, the U.S. Treasury Department's May 31,
2000,  removal of Frontier from the Circular 570 list of acceptable sureties has
created  additional  uncertainties  for  the  Company.  Frontier provided surety
bonds  that  met  slightly  more  than  50%  of  the  Company's requirements for
financial  assurance.  As  discussed  more  fully  in  Part  I,  Item  3  (Legal
Proceedings),  the  Company has entered a consent agreement and final order with
the  EPA (on behalf of certain, but not all, affected states) and is required to
obtain  alternative financial assurance by July 31, 2001 for some facilities and
September  30,  2001,  for  the remaining facilities.  There can be no assurance
that  the  Company  will be able to obtain compliant financial assurance for its
facilities  for which Frontier previously provided assurance within the deadline
specified  by  the  consent  agreement  and  final order.  In the event that the
Company cannot obtain such assurance, the affected facilities may be required to
cease  accepting  waste  and  commence  closure and post-closure measures, which
would  adversely  affect  the  Company's  business.

In  addition to the costs of complying with environmental regulations, hazardous
waste  treatment  companies  generally  are involved in legal proceedings in the
ordinary course of business.  Alleged failure by the Company to comply with laws
and regulations may lead to the imposition of fines or the denial, revocation or
delay  of  the  renewal  of  permits  and licenses by Governmental Entities.  In
addition,  such  Governmental  Entities,  as well as surrounding landowners, may
claim  that  the  Company  is liable for environmental damages.  Citizens groups
have  become  increasingly active in challenging the grant or renewal of permits
and  licenses  for  hazardous waste facilities and responding to such challenges
has  further  increased the costs associated with establishing new facilities or
expanding  current  facilities.  A significant judgment against the Company, the
loss  of a significant permit or license or the imposition of a significant fine
could  have  a  material  adverse  effect  on  the Company's business and future
prospects.  The  Company  is  currently a party to various legal proceedings, as
well  as  environmental proceedings, which have arisen in the ordinary course of
its  business.

COMPETITIVE  ENVIRONMENT

The  Company  operates  in  highly  competitive  environments  with  substantial
capacity  in  some  of  the markets it serves.  In addition, the hazardous waste
industry  is changing as a result of rapid consolidation.  The future success of
the  Company  will  be  affected  by such changes, the nature of which cannot be
forecast  with certainty.  There can be no assurance that such developments will
not  create  additional  competitive  pressures  on  the  Company's  business.

INTERNATIONAL  OPERATIONS

The  Company  has business operations in the United States, Canada, Puerto Rico,
Mexico and Saudi Arabia. Certain risks are inherent in international operations,
including the risks of differing regulation, currency fluctuations and differing
tax  treatment.  The Company is subject to United States, Canadian, Puerto Rican
and Mexican based environmental and other regulations.  Also, the relative value
of  the  United  States  Dollar,  the Canadian Dollar and the Mexican Peso could
change.  The  impact  of  future  exchange  rate  fluctuations on the results of
operations  cannot  be  accurately  predicted.  The Company is subject to United
States,  Canadian,  Mexican  and  Puerto  Rican  tax  laws and regulations.  The
application  of  United  States, Canadian, Puerto Rican and Mexican tax laws and
regulations to Company and to intercompany relationships is subject to audit and
review by independent national tax authorities.  In addition, business practices
or  laws  in Canada, Puerto Rico and/or Mexico may impose costs, restrictions or
requirements  on  such  activities  that differ in significant respects from the
United  States  business  environment.

CYCLICAL  AND  SEASONAL  NATURE  OF  BUSINESS

The hazardous waste business is cyclical to the extent that it is dependent upon
a  stream  of waste from cyclical industries.  If those cyclical industries slow
significantly,  the  business that the Company receives from those industries is
likely  to  slow.  Also,  the  Company's  business  is somewhat seasonal in that
generally  less  waste  is  received  in  winter  months.


                                       15
<PAGE>
DIVIDENDS

The  Company  has  not paid cash dividends during the past four fiscal years and
does  not  presently  anticipate  paying  any cash dividends in the future.  The
Company's  existing  credit  facility, which has been approved by the Bankruptcy
Court,  precludes  the  payment  of  cash  dividends.

DISPOSAL  AND  OTHER  SUPPLY  ARRANGEMENTS

The  Company  has  a  contract,  which  expires  in  2005 with three cement kiln
facilities.  The  contract provides the Company with an outlet for a significant
portion  of its hazardous waste-derived fuel and provides the other party with a
fuel  source  to  operate  its  cement  kiln  facilities.

The  Company  owns  an  interest  in The ArmaKleen Company, a joint venture with
Church  and Dwight.  ArmaKleen is the sole source for certain cleaning chemistry
used  primarily  in  the  Company's Parts Cleaner Service business and also sold
directly  to  customers  as  an  industrial  cleaner.

The Company purchases certain of its oil additive supplies from a relatively few
providers.  The supplies are used in the Company's re-refining operations in the
formulation  of  its  various  lubrication  products.

While  the Company believes it has satisfactory relationships with each of these
vendors,  a  loss  of  any  of these relationships could have a material adverse
effect  on  the  future  results  of  operations.

ITEM  2.  PROPERTIES

The  following  descriptions  are  as  of August 31, 2000, except as noted.  The
Company  owns  or leases property in 45 states, seven Canadian provinces, Puerto
Rico,  Mexico and Saudi Arabia.  The Company's properties which are utilized are
sufficient  and  suitable  to  the  Company's  needs.

CHEMICAL  SERVICES

The  Company  owns ten hazardous and non-hazardous waste commercial landfills in
the  United States and Canada.  Nine of these facilities are currently accepting
waste.  The Company also owns and operates a non-commercial landfill, which only
accepts  waste  from  an  on-site  incinerator.

The  Company  owns  and  operates  in  the  U.S.,  four solid and liquid-capable
incineration  facilities  with  a combined annual capacity of over 250,000 tons,
one lower volume specialty incineration facility and one RCRA subpart X facility
permitted  to  burn  explosives.  The  Company also operates two hazardous waste
liquid  injection incinerators in Canada.  In fiscal 2001, the Company initiated
closure  activities  at  its  Coffeyville, Kansas and the Bridgeport, New Jersey
facilities.

The  Company  owns  four  and  leases one wastewater treatment facilities in the
United  States and Canada with a combined annual treatment capacity of more than
334  million  gallons.  The  Company has initiated closure of its Hilliard, Ohio
wastewater  treatment facility and began winding down daily treatment operations
on  February  1,  2001.

The Company owns 13 and leases five service centers across the United States and
Canada.  These locations accumulate shipments of waste.  As truckload quantities
are  collected,  they  are  transported  from  these locations to the treatment,
disposal  or  recycling  plants.

The  Company  owns  four  and  leases  two locations that operate waste transfer
stations  and transportation centers in the United States and Canada.  In fiscal
2001,  the  Company sold one of these transportation centers and closed another.

The  Company  provides  waste  management  consulting  services for governmental
entities  from  approximately  15 office locations in the United States, Canada,
Puerto  Rico,  and  Saudi  Arabia,  of  which  14  are  leased.

The  Company  provides  other consulting services from two owned and four leased
office  locations  across  the  United  States.

The  Company  has 12 additional locations for treatment and disposal services in
the  United  States  and  Canada, of which approximately half are leased.  These
operations  include battery disposal, PCB disposal, deep well injection and drum
processing.


                                       16
<PAGE>
The  Company  operates  approximately  30  satellite locations across the United
States  and  Canada,  of  which  approximately  half  are owned. These satellite
locations  support  one  or  more  of  its  landfills,  incinerators, wastewater
treatment,  service  centers, consulting, administrative, or other treatment and
disposal  facilities. These facilities range in size from 1,000 to 34,000 square
feet.

The  Company  owns  or  leases  approximately 15 properties, which are closed or
vacant.  Most  of  these  properties  were  previously  used  by the Company and
require  environmental remediation.  Some of these properties may either be sold
or  used  in  future  operations.

BRANCH  SALES  AND  SERVICE

The  Company  operates  12 accumulation centers in the United States and Canada.
Of  these,  three  are  leased.

The Company owns three and leases four distribution centers in the United States
and  Canada,  averaging  approximately  45,000  square  feet  each.

The  Company  owns  two  waste-derived fuel-blending facilities, both located on
leased  land, and has an exclusive supply arrangement for its waste-derived fuel
with a third facility.  These three facilities have combined storage capacity of
approximately  2.2  million  gallons.

The  Company  owns two oil re-refining plants with a combined annual re-refining
capacity  of  approximately  135  million  gallons.  These plants are located in
Breslau,  Ontario  and  East  Chicago,  Indiana.

The  Company  owns  13  and leases ten properties which provide oil recovery and
collection  services  in  the  United  States  and  Canada.

The Company owns eight solvent recycling plants in the United States, and Puerto
Rico.  The  Company  also  owns  a fuels blending recycle center in Kentucky and
leases  one  in  Quebec,  Canada.  In  total,  these  ten  plants have an annual
recycling  capacity  of  60  million  gallons  of  parts cleaner solvents and 32
million  gallons  of  halogenated, fluorinated and flammable solvents. The total
storage  capacity  of  these plants is approximately 9.2 million gallons of bulk
storage  and  2.2  million  gallons  in  drums.

The  Company  owns  a  29,500  square  foot  warehouse  in  Elgin,  Illinois.

The  Company  owns  a  72,500  square foot technical center located in Elk Grove
Village,  Illinois.

The  Company  owns  a  106,000  square foot plant in New Berlin, Wisconsin where
parts  cleaner  machines  are  assembled  and  buffing  pads  are  manufactured.

The  Company owns or leases approximately 42 additional locations, which provide
specialty  services,  such  as  silver  recovery,  imaging,  tank  farm,  and
maintenance,  administrative  offices,  satellite  locations,  and  other
miscellaneous  functions.

The  Branch  Sales  and  Service  Division's  sales  and service representatives
operate out of approximately 180 branch locations.  Of these, approximately half
are  leased.  12  of  the  Company's  branches share locations with accumulation
centers,  while  the  vast majority of the remaining branches each have separate
locations.  A  typical  branch  is  approximately  8,000  square  feet.

The  Company  owns  a  269,000 usable square foot administrative office building
located  in Elgin, Illinois.  The building was the former corporate headquarters
of Safety-Kleen Systems, Inc., a subsidiary of the Company.  The Company intends
to  sell  this  property.

The Company owns approximately 19 and leases 32 additional facilities, which are
closed  or  vacant.  Most  of  these  locations  were branch facilities, and the
Company  is  conducting  environment  remediation  activities.  Some  of  these
properties  may  either  be  sold  or  used  in  future  operations.

OTHER

The  Company  leases  a  combined  122,000  square feet of office space in three
locations  in  Columbia,  South  Carolina  for  its  corporate  headquarters.


                                       17
<PAGE>
ITEM  3.  LEGAL  PROCEEDINGS

CHAPTER  11  FILING

Safety-Kleen  Corp.  and  73  of  its  wholly  owned  domestic  subsidiaries
(collectively, the "Debtors") each filed a voluntary petition for reorganization
under  the  Bankruptcy  Code  on  June 9, 2000.  The petitions were filed in the
United  States  Bankruptcy  Court  for the District of Delaware Case No. 00-2303
(PJW).  Management  of  the  Company  continues  to  operate the business of the
Debtors as a debtor-in-possession under Sections 1107 and 1108 of the Bankruptcy
Code as described in Item 1 of Part I. In this proceeding, the Debtors intend to
propose  and  seek  confirmation  of  a plan or plans of reorganization.  Unless
lifted  by  the  order  of  the Bankruptcy Court, pursuant to the automatic stay
provision  of  Section  362  of  the  Bankruptcy  Code, all pending pre-petition
litigation  against  the  Debtors  is  currently  stayed.

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

As  of  May  18, 2001, proofs of claim in the approximate amount of $174 billion
have  been  filed  against  the  Debtors  by  among  others,  secured creditors,
unsecured  creditors  and security holders. The Company believes that the amount
of  these  claims  that are in excess of the $2.5 billion in accrued liabilities
recorded  in  the  Consolidated  Financial  Statements  as of August 31, 2000 as
"Liabilities  subject  to  compromise" are duplicative or without merit and will
not have a material effect on the Consolidated Financial Statements. The Company
is  in  the  process  of reviewing the proofs of claim, and once this process is
complete,  will  file  appropriate  objections  to  the claims in the Bankruptcy
Court.

ACTION  TO  AVOID  AND  RECOVER  TRANSFERS  TO  LAIDLAW  INC.

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

See  also  the  "Laidlaw  Inc. Relationships" discussion in Item 13 of Part III.

MATTERS  RELATED  TO  INVESTIGATION  OF  FINANCIAL  RESULTS

As  previously  reported  on  March  6,  2000, the Company announced that it had
initiated an internal investigation of its previously reported financial results
and  certain  of  its accounting policies and practices following receipt by the
Company's  Board  of  Directors  of  information  alleging  possible  accounting
irregularities  that may have affected the previously reported financial results
of  the  Company  since  fiscal  year  1998.  The  internal  investigation  was
subsequently  expanded  to  include  fiscal  years  1998  and  1997.  The  Board
appointed  a  special  committee,  consisting  of  four  directors who were then
independent  outside  directors of the Company, to conduct the Special Committee
(Investigation).  The  Special  Committee  (Investigation) was later expanded to
five  directors,  with  the  addition  of  one  additional  independent  outside
director.  The  Special  Committee  (Investigation)  engaged  the  law firm Shaw
Pittman,  and  Shaw  Pittman engaged the accounting firm Arthur Andersen LLP, to
assist  with the comprehensive investigation of these matters.  The Board placed
Kenneth  W.  Winger,  the  Company's President and Chief Executive Officer and a
director,  Michael  J.  Bragagnolo, Executive Vice President and Chief Operating
Officer,  and  Paul  R.  Humphreys,  Senior  Vice President of Finance and Chief
Financial  Officer,  on  administrative  leave  on  March  5, 2000.  The Company
accepted  the  resignations  of  Messrs.  Winger,  Bragagnolo, and Humphreys, as
officers, in mid-May 2000 and of Mr. Winger, as a director, on June 9, 2000, and
subsequently  terminated  the employment of these individuals in July 2000.  The
Special  Committee  (Investigation)  is  continuing  its  investigation.


                                       18
<PAGE>
Beginning  March  7,  2000,  various  Company  shareholders filed actions in the
United  States  District  Court  for  the  District  of South Carolina, Columbia
Division  (the  "South  Carolina  District Court"), on behalf of various alleged
classes  of  Company  shareholders  (the "Shareholder Class Actions"), asserting
federal  securities  fraud claims against the Company, Messrs. Winger, Humphreys
and  Bragagnolo  (who  are  referred  to  herein collectively as the "Individual
Defendants")  and in two cases James R. Bullock, former Chairman of the Board of
the  Company.  In  August  2000,  all  of  the  Shareholder  Class  Actions were
consolidated  into  two  actions that are discussed in detail below.  Due to the
fact  that  the  Company  filed  a  Chapter  11  bankruptcy  petition  under the
Bankruptcy  Code  on June 9, 2000, all litigation against the Company is subject
to  an  automatic  stay.

On  August  3,  2000,  the  South  Carolina  District  Court  approved  an Order
consolidating 19 of the Shareholder Class Actions and any other actions alleging
claims  on behalf of investors who acquired shares of the Company's common stock
in the time period November 13, 1997, through March 6, 2000, into one action, In
Re  Safety-Kleen  Corp.  Securities  Litigation, Civil Action No. 3:00-CV-736-17
(the  "Securities  Consolidated  Action"). Each of the Shareholder Class Actions
consolidated  into  the  Securities  Consolidated  Action  was dismissed without
prejudice.  A  Consolidated  Amended  Complaint  was filed in the South Carolina
District  Court  on  September  18,  2000. The Securities Consolidated Action is
brought  on  behalf  of  all  persons,  except defendants, who (i) purchased the
common  stock  of  Laidlaw Environmental Services, Inc. ("LESI") between July 9,
1997,  and  July  1, 1998, (ii) purchased the common stock of Safety-Kleen Corp.
between  July  1,  1998,  and  March  6,  2000,  or  (iii)  exchanged  shares of
Safety-Kleen  Corp.  common  stock for shares of the common stock of LESI in the
merger  of  LESI  and  Safety-Kleen  Corp.  In addition to naming the Individual
Defendants  and  Mr. Bullock, the Amended Complaint also named John R. Grainger,
Leslie  W. Haworth, John W. Rollins, Jr., David E. Thomas, Jr., Henry B. Tippie,
James  L. Wareham, Grover C. Wrenn and Henry H. Taylor, (all of whom are present
or  former  officers  or members of the Board of Directors of the Company and/or
Laidlaw  Inc.), PricewaterhouseCoopers LLP and Laidlaw Inc. as defendants to the
Securities Consolidated Action. By Order dated May 10, 2001, Henry H. Taylor was
Dismissed  Without  Prejudice as a defendant. The Consolidated Amended Complaint
alleges  that  the  defendants  disseminated  materially  false  and  misleading
information  and failed to disclose material facts with respect to the Company's
financial  condition and business prospects, thereby causing the market price of
Company securities to be artificially inflated during the relevant class periods
and  that the class members acquired Company securities during the class periods
at  artificially  inflated  prices  and  were  damaged thereby. The Consolidated
Amended  Complaint  asserts  various  violations  of  federal  securities  laws
including  violations  of  Sections  10(b),  14(a)  and  20(a) of the Securities
Exchange  Act  of  1934  and  Rule 10b-5 promulgated thereunder and Sections 11,
12(a)(2)  and  15  of  the  Securities  Act of 1933. The Securities Consolidated
Action  seeks to recover damages in an unspecified amount that the class members
allegedly  sustained  by  purchasing  shares  of  the  Company's common stock at
artificially inflated prices, as well as related relief. On January 8, 2001, the
South  Carolina  District  Court  issued  an  Order  amending the caption of the
Securities  Consolidated  Action  to In Re Safety-Kleen Corporation Stockholders
Litigation.

On  August  11,  2000,  the  South  Carolina  District  Court  approved an Order
consolidating the remaining two Shareholder Class Actions involving shareholders
who were former shareholders of Rollins Environmental Services, Inc. ("Rollins")
into  one action, In Re Safety-Kleen Corp. Security Litigation, Civil Action No.
3:00  1343-17  (the  "Rollins  Consolidated Action").  The two Shareholder Class
Actions consolidated into the Rollins Consolidated Action were dismissed without
prejudice.  On  October  2,  2000, a Consolidated Amended Class Action Complaint
for  Violations  of  Federal Securities Laws in the Security Consolidated Action
was  filed in South Carolina District Court.  The Rollins Consolidated Action is
brought  on  behalf  of  all  persons,  except  defendants, their affiliates and
certain  related  parties,  who  were  former  shareholders  of  Rollins and who
received  or  should  have  received the Proxy Statement (the "Proxy Statement")
issued to shareholders of Rollins to notify them of the special meeting that had
been  convened to vote on the reverse acquisition of Laidlaw Chem-Waste, Inc. by
Rollins  to  form LESI.  The Consolidated Amended Complaint named the Individual
Defendants,  Mr.  Bullock,  the Estate of John W. Rollins, Sr., John W. Rollins,
Jr.  and  Laidlaw  Inc.  as  defendants  in the Rollins Consolidated Action. The
Consolidated  Amended  Complaint  principally  alleges  that  the  defendants
disseminated  materially false and misleading information and failed to disclose
material  facts  with  respect to the Company's financial condition and business
prospects  in  connection  with  the Proxy Statement and, as a result, the class
members  were  denied  an opportunity to make an informed voting decision at the
special  meeting  for  approval  of  the  reverse  acquisition.  The  Rollins
Consolidated  Action  asserts  various  violations  of  federal  securities laws
including  violations of Sections 14(a) and 20 of the Securities Exchange Act of
1934  and  Rule  14a-9  promulgated thereunder.  The Rollins Consolidated Action
seeks  to  recover  damages  in  an  unspecified  amount  that the class members
allegedly  sustained  as  a  result of the reverse acquisition and the voting in
connection  therewith,  as well as related relief. On January 8, 2001, the South
Carolina  District  Court  issued  an  Order amending the caption of the Rollins
Consolidated  Action to In Re Safety-Kleen Rollins Shareholders Litigation.   In
a  hearing held on May 21, 2001 regarding the Motion to Dismiss the Consolidated
Amended  Complaint  by Defendants John W. Rollins, Jr. and the Estate of John W.
Rollins, Sr., the court indicated that it would dismiss John W. Rollins, Jr. and
the  Estate  of  John  W. Rollins, Sr. as defendants in the Rollins Consolidated
Action.  Counsel  to  Mr.  Rollins  and the Estate of Mr. Rollins will submit an
order  to  the  court  to  confirm  such  ruling.


                                       19
<PAGE>
In  addition to the above, two shareholder derivative lawsuits were filed in the
Delaware  Court  of  Chancery  for  New  Castle County on behalf of the Company,
against  certain of its directors and former directors (the "Delaware Derivative
Actions"):  (1)  Civil  Action No. 17923-NC on March 24, 2000, pending under the
caption  Peter  Frank  vs. Kenneth W. Winger, John W. Rollins, James R. Bullock,
David E. Thomas, Jr., Leslie W. Haworth, Henry B. Tippie, James L. Wareham, John
W.  Rollins,  Jr.,  Robert  W.  Luba and Grover C. Wren (sic),  and Safety-Kleen
Corp.  (Nominal  Defendant)  and (2) Civil Action No. 1974-NC on March 30, 2000,
pending  under  the  caption  Harbor Finance Partners, derivatively on behalf of
Safety-Kleen  Corp.,  against  James  R. Bullock, John W. Rollins, Sr., David E.
Thomas,  Jr.,  Kenneth  W.  Winger, Leslie W. Haworth, Henry B. Tippie, James L.
Wareham, John W. Rollins, Jr., Robert W. Luba, Peter N.T. Widdrington and Grover
C.  Wrenn,  Defendants and Safety-Kleen Corp. (Nominal Defendant).  The Delaware
Derivative  Actions  assert,  among  other  things, that the Defendants breached
their  fiduciary  obligations  to the Company and its shareholders by failing to
adequately  supervise  the  Company  and  to  monitor  its  internal  financial
administrative  policies,  procedures  and  controls  over an extended period of
time,  thereby  exposing  the  Company  to class action lawsuits and the loss of
goodwill  in  the  investment community, resulting in damages to the Company and
its shareholders.  These claims seek to recover damages on behalf of the Company
against  the  Director  Defendants  in  an unspecified amount as well as related
relief.

On  April  13, 2000, a class action captioned Muzinich & Co., Inc., individually
and  on  behalf of all others similarly situated, v. Safety-Kleen Corp., Kenneth
W.  Winger,  Michael  J.  Bragagnolo,  Paul  R.  Humphreys,  Laidlaw  Inc.  and
PricewaterhouseCoopers,  LLP, Civil Action No. 3:00-1145-17 (the "Muzinich Class
Action"),  was  filed  in  the  South Carolina District Court.  An Amended Class
Action  Complaint  for  violations  of  the federal securities laws was filed on
August  25,  2000  pursuant  to  an  August  3, 2000 Order of the South Carolina
District  Court  Judge.  The Company was not named as a defendant in the amended
complaint.  The  Muzinich Class Action was filed on behalf of a class comprising
all  persons  who  purchased  9.25%  Senior  Subordinated  Notes due 2008 of the
Company  during  the  period  from  October  23,  1998,  through  June  9, 2000.

On  July 18, 2000, a class action captioned American High-Income Trust and State
Street  Research  Income  Trust  suing  on  behalf  of themselves and all others
similarly  situated  v. Kenneth W. Winger, Laidlaw Inc., PricewaterhouseCoopers,
LLP,  TD Securities (USA) Inc., NationsBanc Montgomery Securities, Raymond James
&  Associates,  Inc.,  Arthur Andersen LLP, James R. Bullock, Paul R. Humphreys,
John  W.  Rollins, Sr., John W. Rollins, Jr., Leslie W. Haworth, Robert W. Luba,
David  E.  Thomas,  Jr.,  Henry  B.  Tippie,  James L. Wareham, Grover C. Wrenn,
Michael  J.  Bragagnolo  and  Henry  H.  Taylor,  Civil  Action  No. 00-661 (the
"American  High-Income  Trust  Class  Action"),  was  filed in the United States
District  Court  for  the  District of Delaware.  The American High-Income Trust
Class  Action  was  filed  on  behalf of all investors who purchased or acquired
certain  bonds  issued  by  the Company in initial offerings or on the secondary
market  from  April  17,  1998,  through March 6, 2000. On December 1, 2000, the
Judicial  Panel on Multidistrict Litigation transferred the American High-Income
Trust  Class  Action  to  the  South  Carolina District Court for coordinated or
consolidated  pretrial proceedings with the actions already pending in the South
Carolina  District Court.  On January 8, 2001, the South Carolina District Court
approved  an Order consolidating the American High-Income Trust Class Action and
the  Muzinich Class Action into one action, In Re Safety-Kleen Corp. Bondholders
Litigation,  Consolidated  Case  No. 3-00-1145 17 (the "Bondholders Consolidated
Action").  A Consolidated Class Action Complaint was filed in the South Carolina
District  Court  on  January  23, 2001.  Arthur Andersen LLP and Henry H. Taylor
were  not  named  as defendants in the Consolidated Class Action Complaint.  The
Bondholders  Consolidated  Action  is  brought  on  behalf  of  all  persons who
purchased  or  acquired  certain bonds issued by the Company, or its predecessor
LESI,  in  initial  offerings  or  on  the secondary market from April 17, 1998,
through  March  9,  2000.  The  Bondholders Consolidated Action alleges that the
Company  disseminated  materially  false and misleading financial statements and
that  the  class  members  purchased  the  bonds in reliance upon such financial
statements.  The  Bondholders  Consolidated  Action asserts, among other things,
various  violations  of federal securities laws including violations of Sections
11(a),  12(a)(2)  and  15  of the Securities Act of 1933, Sections 10(b), 18 and
20(a)  of  the  Securities Exchange Act of 1934 and Rule 10b-5 promulgated under
the  Securities Exchange Act of 1934.  The Bondholders Consolidated Action seeks
to  recover  damages  in  an unspecified amount that the class members allegedly
sustained,  as  well  as  related  relief.

In  addition, two class actions have been filed against Laidlaw Inc. and certain
of  its  directors  on  behalf  of  purchasers  of shares of the common stock of
Laidlaw  Inc.  and purchasers of bonds of Laidlaw Inc. during the period October
15,  1997,  through  and including March 13, 2000.  The shareholder class action
captioned  Meltzer  v. John R. Grainger, James R. Bullock, Leslie W. Haworth and
Laidlaw  Inc.,  Civil  Action  No.  3:00-CV-2518-17,  was  filed  with the South
Carolina  District  Court  on  August  14,  2000.  The  bondholder  class action
captioned  David I. L. Sunstein v. John R. Grainger, James R. Bullock, Leslie W.
Haworth and Laidlaw Inc., Civil Action No. 3:00-CV-855, was filed with the South
Carolina  District  Court  on  March  17,  2000.  The plaintiffs in both actions
allege,  among  other  things,  that  the  defendants  made false and misleading
statements and violated certain federal securities laws.  The plaintiffs in both
actions  seek  to  recover  damages in an unspecified amount that the applicable
class members allegedly sustained, as well as related relief.  Messrs. Grainger,
Bullock  and  Haworth  have  demanded  to be indemnified by the Company in these
actions.


                                       20
<PAGE>
On  September  23,  2000,  a  class action captioned John Hancock Life Insurance
Company,  New  York  Life  Insurance  Company,  Aid  Association  For Lutherans,
American  General  Annuity  Insurance  Company  and  The  Variable  Annuity Life
Insurance Company, On Behalf of Themselves and All Others Similarly Situated, v.
John  R.  Grainger,  James  R. Bullock, Ivan R. Cairns, Leslie W. Haworth, Peter
N.T.  Widdrington,  Wayne R. Bishop, William P. Cooper, Jack P. Edwards, William
A.  Farlinger,  Donald  M.  Green, Martha O. Hesse, Gordon R. Ritchie, Stella M.
Thompson, Laidlaw Inc., PricewaterhouseCoopers, LLP, Goldman, Sachs & Co., Bear,
Stearns  &  Co.,  Inc.,  Salomon  Smith  Barney,  Merrill Lynch & Co., Robertson
Stephens  &  Co.,  Banc One Corp., CIBC Oppenheimer, Banc of America Securities,
LLC  and  TD  Securities  (USA),  Inc.,  Civil Action No. 7233, was filed in the
United  States District Court for the Southern District of New York on behalf of
all  persons,  except  the defendants and certain related parties, who purchased
the  bonds  of  Laidlaw  Inc.  during  the period September 24, 1997 through and
including  May  12,  2000.  The  plaintiffs allege, among other things, that the
defendants  made  false  and  misleading statements and violated certain federal
securities  laws.  The  plaintiffs  seek  to  recover  damages in an unspecified
amount that the applicable class members allegedly sustained, as well as related
relief.  Mr.  Grainger  and  Mr.  Haworth have demanded to be indemnified by the
Company  in  this  action.

On  December  12,  2000,  a  class  action  captioned  Westdeutsche  Landesbank
Girozentrale,  New  York  Branch,  On  Behalf Of Itself And All Others Similarly
Situated,  v.  John  R.  Grainger,  James  R. Bullock, Ivan R. Cairns, Leslie W.
Haworth,  Peter  N.T.  Widdrington,  Wayne R. Bishop, William P. Cooper, Jack P.
Edwards,  William  A.  Farlinger,  Donald  M.  Green, Martha O. Hesse, Gordon R.
Ritchie,  Stella M. Thompson, Laidlaw Inc., PricewaterhouseCoopers LLP, Goldman,
Sachs  &  Co.,  Merrill  Lynch  & Co., Banc One Corp., CIBC Oppenheimer, Banc Of
America  Securities,  LLC  and TD Securities (USA), Inc., Civil Action No. 9486,
was  filed  in the United States District Court for the Southern District of New
York  on  behalf  of  all  persons,  except  the  defendants and certain related
parties,  who  purchased  call  options  or  sold  put  options or other similar
securities exercisable for the bonds of Laidlaw Inc. during the period September
24,  1997,  through  and  including  May 12, 2000.  The plaintiffs allege, among
other  things,  that  the  defendants  made  false and misleading statements and
violated  certain  federal  securities  laws.  The  plaintiffs  seek  to recover
damages  in  an  unspecified  amount that the applicable class members allegedly
sustained  as  well  as  related  relief.  Mr.  Grainger  has  demanded  to  be
indemnified  by  the  Company  in  this  action.

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

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

The  Company  is  cooperating  with  each  of  the  investigations.

FINANCIAL  ASSURANCE  ISSUES

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


                                       21
<PAGE>
On  June  6, 2000, the U.S. Treasury issued notification that Frontier no longer
qualified  as  an  acceptable  surety on Federal bonds and had been removed from
Circular  570 on May 31, 2000. Accordingly, effective May 31, 2000, Safety-Kleen
and its affiliates no longer had compliant financial assurance for many of their
facilities.  Under  applicable  regulations,  Safety-Kleen  and  its  affected
subsidiaries  were required to obtain compliant financial assurance within sixty
days,  and  in  some  states,  more quickly. Although the surety bonds issued by
Frontier  are  no  longer  qualified as acceptable federal bonds, they remain in
place and effective until replaced and the Company continues to pay the premiums
on  the  bonds.

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

The  Company and the EPA, acting on behalf of many, but not all affected states,
then  engaged  in  negotiations  resulting  in  the  entry  of a CAFO, which the
Bankruptcy Court approved on October 17, 2000. The main component of the CAFO is
a  compliance  schedule for Safety-Kleen and its affected subsidiaries to obtain
compliant  financial assurance for the facilities covered by the Frontier bonds.
The  CAFO also imposes a penalty on Safety-Kleen Services, Inc. which, as delays
have  ensued  in  the replacement of Frontier, and additional states have joined
the  CAFO (see discussion below), has grown to approximately $410,000. Under the
agreement,  Safety-Kleen  and  its affected subsidiaries were required to obtain
compliant  financial  assurance  as expeditiously as possible, but no later than
December  15,  2000.  The  EPA  reserved  discretion  to  extend the deadline to
February  28,  2001,  and  did  so.  The  Company  thereafter obtained a further
extension  through  April  30,  2001.  Since that date, the Company has obtained
further  extensions from the EPA, which the Bankruptcy Court approved on May 16,
2001,  as follows: until July 31, 2001 for certain sites and until September 30,
2001  for other sites where Frontier provides financial assurance coverage. Most
states  that  have  retained  primary jurisdiction on this issue (see discussion
below)  have  indicated that they will accept these same deadlines. However, the
Company  has  not  concluded  agreements  with all such states, and at least one
state,  Texas,  has  taken  certain  enforcement actions described below. If the
Company  cannot  obtain  financing  for  the  collateral necessary for obtaining
replacement financial assurance by July 31, 2001, for the designated facilities,
it  has  agreed  with  the  EPA  to  seek  Bankruptcy Court approval to use cash
collateral  (or other acceptable alternatives) for this purpose. The Company may
seek  further  extensions of time from the EPA and the states, but the CAFO does
not  obligate  the EPA and the states to grant such further extensions. Although
the  Company  has  obtained  a  proposal  for  the  replacement  of the Frontier
coverage,  there  can  be  no assurance that the Company will be able to replace
Frontier  on  a  schedule  acceptable  to  the  EPA  and  the  states.

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

Under  the  CAFO,  until  such  time  as  the  affected facilities have obtained
compliant financial assurance, Safety-Kleen and its affected facilities must not
seek  to  withdraw an existing irrevocable letter of credit, which is subject to
compromise  (see  Note  11 in the notes to consolidated financial statements) in
the  amount  of  $28.5  million  from  Toronto  Dominion Bank for the benefit of
Frontier  and  shall  take  all  steps  necessary  to  keep current the existing
Frontier  surety  bonds.

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

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


                                       22
<PAGE>
The  Company  and  the EPA contacted states in which affected company facilities
were  located  and  apprised  these  states  of the terms of the CAFO. As noted,
several  of  these states referred the affected facilities non-compliance to the
EPA for enforcement and joined in the CAFO. Certain other states (referred to in
the  CAFO as the "Parallel Action States") have entered parallel agreements with
Safety-Kleen  and  appropriate  subsidiaries.  Other states have entered or have
indicated  an  interest  to enter agreements with affected facilities with terms
similar  to the CAFO. If Safety-Kleen and/or its subsidiaries or affiliates were
unable  to  conclude  such  an  agreement  in  a  particular state and were thus
required  to  close facilities in such state, the impact on the Company could be
material,  depending  upon  the  particular  facility  involved.

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

The  State  of  Texas  had  set  May 31, 2001 as the deadline for replacement of
Frontier  coverage in that state. Safety-Kleen and its subsidiaries did not meet
that deadline. On June 1, 2001, the State of Texas notified Safety-Kleen and its
affected  subsidiaries that it intends to (i) seek substantial penalties for the
failure  to have compliant financial assurance; (ii) deny certain pending permit
renewal and modification applications; and (iii) revoke the registration of some
of  the  used  oil  facilities that Safety-Kleen and its subsidiaries operate in
Texas.  With  one  exception,  Safety-Kleen  and  its subsidiaries will have the
opportunity  to  assert  defenses to these actions in various administrative and
judicial  proceedings.  In the case of the exception, a permit modification, the
application  can  be  refiled  once  compliant  financial assurance is procured.
Safety-Kleen and its subsidiaries expect to obtain compliant financial assurance
at  most  or  all  of  their affected Texas facilities before the administrative
and/or  judicial  proceedings  conclude.

On  June 20,  2001, Safety-Kleen and its affected subsidiaries filed a motion in
Bankruptcy  Court  seeking  approval  of a transaction pursuant to which it will
replace  Frontier  at  more  than  100  facilities.

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

GENERAL

The Company's hazardous and industrial waste services are continuously regulated
by  federal,  state, provincial and local laws enacted to regulate the discharge
of materials into the environment or primarily for the purpose of protecting the
environment.  This inherent regulation of the Company necessarily results in its
frequently  becoming a party to judicial or administrative proceedings involving
all levels of governmental authorities and other interested parties.  The issues
that  are  involved generally relate to applications for permits and licenses by
the  Company and their conformity with legal requirements and alleged violations
of  existing permits and licenses.  At May 18, 2001, subsidiaries of the Company
were involved in eleven proceedings in which a governmental authority is a party
relating  primarily  to  activities  at  waste  treatment,  storage and disposal
facilities  where  the  Company believes sanctions involved in each instance may
exceed  $100,000.

In  the  United  States,  CERCLA  imposes financial liability on persons who are
responsible  for  the  release  of  hazardous  substances  into the environment.
Present  and  past  owners  and  operators  of  sites  which  release  hazardous
substances,  as  well  as generators, disposal arrangers and transporters of the
waste  material,  may  be strictly, jointly and severally liable for remediation
costs  and  natural  resources  damage.  At  August  31,  2000,  the Company had
identified  57  active  federal or state-run CERCLA sites where the Company is a
potentially responsible party.  The Company periodically reviews its status with
respect  to  each  location  and  the  extent of its alleged contribution to the
volume  of  waste at the location, the available evidence connecting the Company
to  that  location, and the financial soundness of other potentially responsible
parties  at  the  location.


                                       23
<PAGE>
PRODUCTS  LIABILITY  CASES

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

SAFETY-KLEEN  (PINEWOOD),  INC.

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

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

South  Carolina law requires that hazardous waste facilities provide evidence of
financial  assurance for potential environmental cleanup and restoration in form
and  amount  to be determined by DHEC.  The Order required Pinewood to establish
and  maintain  an  Environmental  Impairment  Fund ("EIF") in the amount of $133
million  in  1994  dollars  by July 1, 2004 as financial assurance for potential
environmental  cleanup  and  restoration  of  environmental  impairment  at  the
Pinewood Facility.  The total fund requirement amount is to be adjusted annually
by  the  Implicit  Price Deflator for the Gross National Product as published by
the  U.S.  Department  of  Commerce.  The  EIF  has two components:  (1) the GSX
Contribution  Fund,  which  was to be funded by Pinewood in annual cash payments
over  a ten year period; and (2) the State Permitted Sites Fund, a legislatively
created  fund  derived  from  fees  on  waste disposal at the Pinewood Facility.
Under the Order, at the end of the 100-year post-closure care period, funding of
the  GSX  Contribution  Fund  will  be  subject  to evaluation by an independent
arbitrator, who will determine what level of funding, if any, is still required.
The  Company  is  entitled  to seek recovery of any excess amount so determined.
Upon  termination  of the GSX Contribution Fund, any remaining trust asset would
revert to Pinewood.  In 1993 and 1994, Pinewood paid approximately $15.5 million
cash  into  the  GSX  Contribution  Fund, which has grown to approximately $19.1
million  as  of  August  31,  2000.

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

From June 1995, under authority of the Regulations, Pinewood submitted financial
assurance  for  potential  environmental  cleanup  and  restoration  by way of a
corporate  guaranty  by  Laidlaw Inc. or insurance.  Pinewood also left in place
the GSX Contribution Fund of approximately $20 million as of April 30, 2001.  On
September  15,  1995,  DHEC  issued  a  declaratory  ruling  finding  that  the
Regulations  were  applicable  to  the  financial  assurance  requirements  for
Pinewood.

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

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


                                       24
<PAGE>
On  June  13,  2000, the South Carolina Supreme Court denied Pinewood's petition
for  a  writ of certiorari.  On June 14, 2000, DHEC sent notice by letter to the
Pinewood  Facility directing that Pinewood cease accepting waste for disposal in
30 days and submit a closure plan.  DHEC based this directive on the decision of
the Court of Appeals that all non-hazardous waste disposed at Pinewood should be
counted  against  Pinewood's hazardous waste capacity limit and DHEC's resulting
conclusion  that  there  is  no  remaining  permitted  capacity  at  Pinewood.

On  June  22,  2000,  DHEC notified Pinewood that the Court of Appeals' decision
vacated  the Regulations and, therefore, Pinewood has the sole responsibility to
provide  cash  funding  into  the EIF in accordance with the May 19, 1994 Order.
The  DHEC notice also directed Pinewood to provide information to DHEC within 15
days  on how Pinewood would comply with the Order including payment into the GSX
Contribution Fund.  As of August 31, 2000, there was approximately $19.1 million
in  the  GSX  Contribution  Fund  and  approximately  $13.9 million in the State
Permitted  Sites  Fund.  In  2000  dollars, the total EIF funding requirement is
approximately $147.5 million.  To comply with the financial assurance provisions
of  the Order, Pinewood would have to contribute the following payments (in 2000
dollars)  as  follows ($ in thousands), subject to the automatic stay provisions
discussed  below:

                  Amount due during fiscal year:
                     2000                          $  82,087
                     2001                             14,450
                     2002                             14,450
                     2003                              3,523
                                                   ---------
                  Total                            $ 114,510
                                                   =========

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

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

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

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

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

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

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


                                       25
<PAGE>
The  Stock  Purchase  Agreement  among Rollins Environmental Services, Inc. (now
Safety-Kleen  Corp.)  and  Laidlaw Inc. and Laidlaw Transportation, Inc. ("LTI")
dated February 6, 1997, provides that Laidlaw Inc. shall maintain, solely at its
expense,  until  the  tenth anniversary of the Closing Date (May 15, 2007), such
financial  mechanism  as  may be permitted by the relevant environmental laws to
provide the required financial assurance for potential environmental cleanup and
restoration at the Pinewood facility.  See also the "Laidlaw Inc. Relationships"
discussion  in  Item  13  of  Part  III.

VILLE  MERCIER  FACILITY

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

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

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

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

Pursuant  to  the  Stock  Purchase  Agreement,  Laidlaw  Inc.  and LTI agreed to
indemnify  and  hold harmless  Saftey-Kleen and its subsidiaries for any damages
resulting  from the remediation of contaminated soils and water arising from the
former  lagoon  sites  and  the operation of the incinerator at Mercier, Quebec.
The  indemnification  is  only to the extent that the aggregate cash expenditure
with respect to such damages exceeds in the aggregate (i) $1 million during such
year  and  (ii) since May 15, 1997, an amount equal to the product of $1 million
times  the  number of years that have elapsed since May 15, 1997; however, there
shall  be  no  indemnification  for any cash expenditures incurred more than six
years  after  May  15,  1997.  As  of May 18, 2001, the Company has not incurred
expenses  for  which  it  would  be  entitled to indemnification under the Stock
Purchase  Agreement.  See  also  the  "Laidlaw Inc. Relationships" discussion in
Item  13  of  Part  III.


                                       26
<PAGE>
MARINE  SHALE  PROCESSORS

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

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

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

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

The  Stock Purchase Agreement provides that Laidlaw Inc. and LTI shall indemnify
Safety-Kleen  Corp.  for  environmental  liability  arising  with respect to the
treatment  of waste at the Marine Shale facility. The indemnification is only to
the  extent  that  the  aggregate  cash expenditure with respect to such damages
exceeds in the aggregate (i) $1 million during such year; and (ii) since May 15,
1997,  an  amount  equal  to the product of $1 million times the number of years
that have elapsed since May 15, 1997; however, there shall be no indemnification
for  any  cash  expenditures  by Safety-Kleen Corp. incurred more than six years
after  May  15, 1997.  As of May 18, 2001, the Company has not incurred expenses
for  which  it  would  be  entitled  to indemnification under the Stock Purchase
Agreement.  See  also  the "Laidlaw Inc. Relationships" discussion in Item 13 of
Part  III.

LAMBTON  HAZARDOUS  WASTE  LANDFILL

On September 3, 1999, the Company's Lambton hazardous waste landfill facility in
Ontario, Canada, discovered an upwelling of water and natural gas in Sub-cell 3,
a  newly constructed disposal cell within Cell 18. While in the course of trying
to  determine  the  source  and cause of the upwelling, the Company informed the
Ontario  Ministry  of  Environment and Energy ("MOE") of the situation.  The MOE
issued  two  Field  Orders prohibiting the Company from utilizing Sub-cell 3 and
Sub-cell  4  (another newly constructed cell within Cell 18) for waste disposal.
However, in December 1999, after reviewing testimony and a technical report from
independent  experts  and  Company professionals, the MOE revoked the two orders
and allowed the utilization of Sub-cell 4 for waste disposal so long as no waste
in  Sub-cell 4 was placed below an elevation of 182 meters above mean sea level.
With  respect  to Sub-cell 3, the MOE required that the Company submit a report,
for  MOE's approval, detailing a plan for identifying potential areas of gas and
water  venting,  the  proposed  measures  to remediate all areas identified, and
further steps to protect the integrity of Sub-cell 3.  The Company submitted the
required  report  to  the MOE in February 2000, outlining the Company's plan for
present  and future site activities.  The Company has received a letter from the
MOE  agreeing with the plan in principle; however, the local MOE office raised a
number  of  concerns to which the Company is preparing a response.  Although the
Company  is  currently  prohibited  from  utilizing  Sub-cell  3, the Company is
utilizing  the  remaining  portions  of  Cell  18  for  waste  disposal.


                                       27
<PAGE>
RAYGAR  ENVIRONMENTAL  SYSTEMS  INTERNATIONAL  LITIGATION

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

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

FEDERATED  HOLDINGS,  INC.  LITIGATION

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

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

HUDSON  COUNTY  IMPROVEMENT  AUTHORITY  LITIGATION

In  July  1999,  Hudson  County Improvement Authority ("HCIA") filed suit in the
Superior  Court, Hudson County, New Jersey against SK Services (East), L.C. ("SK
Services East") (an indirect wholly owned Safety-Kleen subsidiary), Safety-Kleen
Corp.,  American  Home Assurance Company, and Hackensack Meadowlands Development
Commission.  An  Amended  Complaint  was filed on August 18, 1999, in which HCIA
sought  damages  and injunctive relief evicting SK Services East from a 175 acre
site  in  Kearny,  New Jersey owned by HCIA. SK Services East had been using the
site  pursuant  to  an  Agreement and Lease dated as of February 2, 1997 for the
processing  and disposal of processed dredge material. HCIA alleged that certain
conditions  precedent  to SK Services East's right to continue operations at the
site  had  not  occurred,  that  as  a  result  the  Agreement  and  Lease  had
automatically  terminated,  that  SK Services East owed HCIA some $11 million in
back  rent, and that SK Services East was obligated to finish the remediation of
the  site  and  its  preparation  for  development  as a commercial property. In
January  2000,  the Court granted HCIA summary judgment on its motion to declare
the  Agreement  and  Lease  null  and  void  as  a  result of the failure of the
conditions  precedent.  This  ruling  effectively  terminated  the  relationship
between SK Services East and HCIA leaving only the issue of the determination of
the  rights  and  responsibilities  of  the  parties  in  the  unwinding  of the
relationship.  In  May  2000,  HCIA  filed for summary judgment seeking an order
declaring  that  SK Services East is obligated to complete all measures required
under the Remedial Action Work Plan for the site. SK Services East filed a brief
opposing  the  motion.  In June 2000, HCIA withdrew its pending motion, with the
Court's understanding that the motion could be re-filed if the automatic stay in
connection  with  the  Company's  Chapter  11  bankruptcy  protection is lifted.


                                       28
<PAGE>
ECDC  ENVIRONMENTAL,  L.C.  CLAIM

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

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

As  more thoroughly discussed in Part I, Item 3 (Legal Proceedings), "Chapter 11
Filing,"  Safety-Kleen  and  certain of its wholly owned subsidiaries, including
those  subsidiaries  which  were parties to the 4070 Contract and the WDA, filed
for  protection  under Chapter 11 of the Bankruptcy Code. In anticipation of the
Company's  rejection  of  the  4070  Contract  pursuant to 11 U.S.C. Sec.365, on
October  30,  2000,  ECDC filed a claim for not less than $11,027,600 plus other
and  unspecified additional damages for the Company's breach of the 4070 and WDA
contracts. Subsequently, the Bankruptcy Court granted the motion by Safety-Kleen
and certain of its subsidiaries, which were parties to the 4070 Contract and the
WDA,  to  reject both the 4070 Contract and the WDA, effective December 1, 2000.

BRYSON  ADAMS  LITIGATION

In  1996,  a  lawsuit  was filed in the federal court in Baton Rouge, Louisiana,
under  the  caption Carleton Gene Rineheart et al. v. CIBA-GEIGY Corporation, et
al.,  U.S.  District  Court  for  the  Middle District of Louisiana, CA #96-517,
Section  B(2).  In  October  1999,  a substantially similar lawsuit was filed in
state  court  in Lafayette Parish, Louisiana, under the caption of Bryson Adams,
et  al.  v.  Environmental  Purification  Advancement Corporation, et al., Civil
Action No. 994879, Fifteenth Judicial District Court, Parish of Lafayette, State
of  Louisiana.  In  December  2000, these two cases were consolidated with Adams
designated  as  the  lead case.  In this consolidated litigation, plaintiffs are
suing  for  alleged  personal  injury  and/or property damage arising out of the
operation  of  certain  waste  disposal facilities near Bayou Sorrel, Louisiana.
The  initial  Bryson Adams lawsuit was filed on behalf of 320 plaintiffs against
191  defendants.  On  May  24, 2001, new information revealed that approximately
1,150  plaintiffs  are  now  involved  in  the  litigation.

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

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

No  matters  were submitted to the stockholders of the Company during the fourth
quarter  of  2000.


                                       29
<PAGE>
                                     PART II
                                     -------

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

The Company's common stock (the "Common Stock") was traded on the New York Stock
Exchange  under the ticker symbol SK until it was suspended from trading in June
2000.  The Common Stock was thereafter delisted from the New York Stock Exchange
on July 28, 2000. As of June 15, 2000, the Common Stock began trading on the OTC
Bulletin  Board  under the ticker symbol SKLNQ. The approximate number of record
holders  of  Common  Stock as of August 31, 2000 was 4,870.  The following table
shows the high and low sales prices for the Common Stock for each full quarterly
period  within  the  two most recent fiscal years that the shares were traded on
the  New  York  Stock  Exchange,  and the high and low bid prices for the Common
Stock for each quarterly period within the two most recent fiscal years that the
shares  were  traded  on  the  OTC  Bulletin  Board.

          FISCAL YEAR ENDED AUGUST 31, 2000       HIGH    LOW
                                                 ------  ------
          Fourth Quarter                         $ 0.75  $ 0.06
          Third Quarter                            5.06    0.56
          Second Quarter                          12.50    4.87
          First Quarter                           14.12   10.62

          FISCAL YEAR ENDED AUGUST 31, 1999
          Fourth Quarter                         $19.37  $11.56
          Third Quarter                           17.37   11.37
          Second Quarter                          16.62   11.81
          First Quarter                           14.50    7.50

Stock  prices are adjusted to reflect a 1-for-4 reverse split effective November
30,  1998.

The  Company  has  not  paid  dividends during the reported periods and does not
intend  to  pay  dividends  in  the  foreseeable  future.

ITEM  6.     SELECTED  FINANCIAL  DATA

The  following  selected  financial  information  as of and for the fiscal years
ended  August  31,  2000, 1999, 1998 and 1997, are derived from the Consolidated
Financial  Statements  of the Company.  The Consolidated Financial Statements of
the  Company  as of and for the years ended August 31, 2000, 1999, 1998 and 1997
have  been  audited by Arthur Andersen LLP, independent public accountants.  The
Company's financial statements for fiscal years ending August 31, 1999, 1998 and
1997,  have  been  restated.  Substantial  time, effort and expense was required
over  a  twelve-month  period  to  review,  assess, reconcile, prepare and audit
financial  statements for fiscal 2000, fiscal 1999, fiscal 1998 and fiscal 1997.
The  Company  believes  it  would  require an unreasonable effort and expense to
conduct  a  similar  process  to restate fiscal year 1996.  Therefore, financial
data  for  fiscal year 1996 has not been restated or presented and should not be
relied  upon.  For  a  further  discussion of the restatement, see "Management's
Discussion  and  Analysis  of  Financial  Condition and Results of Operations --
Investigation  of  Financial  Results;  Restatement  of  Consolidated  Financial
Statements"  and  Note  2  of  the  notes  to Consolidated Financial Statements.

The information set forth below should be read in conjunction with "Management's
Discussion  and  Analysis  of Financial Condition and Results of Operations" and
the  Company's consolidated financial statements and the notes thereto, included
elsewhere  in  this  Report.


                                       30
<PAGE>
<TABLE>
<CAPTION>
                                                                                          RESTATED
                                                                             -------------------------------------
Year Ended August 31,                                           -----------
($in thousands, except per share amounts)                          2000         1999         1998         1997
--------------------------------------------------------------  -----------  -----------  -----------  -----------
<S>                                                             <C>          <C>          <C>          <C>
Revenues                                                        $1,586,273   $1,624,038   $1,172,731   $  641,945
Operating (loss) income                                           (620,170)       6,876       (2,223)    (294,749)
Loss before reorganization items, income taxes and minority
interests                                                         (759,073)    (185,272)    (123,535)    (341,220)
Loss per share before extraordinary items - Basic
and diluted                                                          (8.27)       (2.52)       (1.35)       (8.74)
Total assets                                                     3,131,868    3,635,314    3,869,475    1,513,741
Long-term debt, including current portion                           65,421    2,095,016    1,990,806      588,687
Liabilities subject to compromise                                2,500,973           --           --           --
Dividends per common share                                              --           --           --           --
Weighted average common stock outstanding - Basic and diluted      100,725       88,537       62,322       34,508
</TABLE>

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

The  following  discussion  and  analysis should be read in conjunction with the
Company's Consolidated Financial Statements, related notes thereto and the other
information  included  elsewhere  herein.

This  Management's Discussion and Analysis was prepared by the Company's current
management,  many  of whom joined the Company after March 6, 2000.  In preparing
this  Management's Discussion and Analysis as well as other portions of the Form
10-K/A,  current  management did not have access to former senior management and
numerous  other  accounting  personnel  because  such persons either declined to
cooperate  or  determined  to  furnish  only  limited  information.

BUSINESS,  ORGANIZATION  AND  BANKRUPTCY

Safety-Kleen Corp. was incorporated in Delaware in 1978 as Rollins Environmental
Services,  Inc.,  later changed its name to Laidlaw Environmental Services, Inc.
("LESI")  and  subsequently  changed  its name to Safety-Kleen Corp. Through its
Chemical Services and Branch Sales and Service Divisions, the Company provides a
range of services designed to collect, transport, process, recycle or dispose of
hazardous and non-hazardous industrial and commercial waste streams. The Company
provides  these  services  in  50 states, seven Canadian provinces, Puerto Rico,
Mexico  and Saudi Arabia from approximately 380 collection, processing and other
locations.

On  May  15,  1997,  pursuant  to  a  stock  purchase  agreement  among  Rollins
Environmental  Services,  Inc. ("Rollins"), Laidlaw Inc., a Canadian corporation
("Laidlaw"),  and  its subsidiary, Laidlaw Transportation Inc., Rollins acquired
the  hazardous  and  industrial  waste  operations  of  Laidlaw  (the  "Rollins
Acquisition").  The  business  combination  was  accounted  for  as  a  reverse
acquisition using the purchase method of accounting. Coincident with the closing
of  the  Rollins  Acquisition, the continuing legal entity changed its name from
Rollins  Environmental Services, Inc. to Laidlaw Environmental Services, Inc. As
a  result  of  the  Rollins  Acquisition, Laidlaw owned 67% of the issued common
shares  of  LESI.  The  results of operations of Rollins have been included from
the  date  of acquisition in the accompanying Consolidated Financial Statements.

In  May  1998,  LESI  completed  the hostile takeover of the former Safety-Kleen
Corp.  ("Old  Safety-Kleen").  Effective July 1, 1998, LESI began doing business
as Safety-Kleen Corp. and its stock began trading on the New York Stock Exchange
under  the name Safety-Kleen Corp. and the ticker symbol SK.  The acquisition of
Old  Safety-Kleen  has  been  accounted  for  under  the  purchase  method  and
accordingly,  the  accompanying  Consolidated  Financial  Statements include the
results  of  operations  of  Old  Safety-Kleen  from  the  date  of acquisition.

Subsequent  to  the  acquisition  of  Old Safety-Kleen, former senior management
released  financial  and other information between May 1998 and March 2000 which
represented  that  significant  benefits,  including  material  cost savings and
operating  efficiencies,  were  being  realized  from  the  merger, and that the
consolidated  results,  including  operating  cash  flows  were  increasing as a
consequence.  As  determined  after March 6, 2000, however, this information was
not  accurate  and  the true results had not been provided during this period to
the  Company's  Board  of  Directors,  security  holders,  creditors, employees,
numerous  members  of  management  or  others.  See  "Investigation of Financial
Results;  Restatement  of  Consolidated  Financial Statements" discussion below.


                                       31
<PAGE>
Current  management  believes  that  the  Company  experienced  substantial
difficulties in the integration of the operations of Old Safety-Kleen with those
of  LESI  following  the acquisition by LESI in 1998.  The implementation of the
Company's  post-acquisition  strategy  to  combine  key  elements  of  the  more
decentralized  LESI business structure with that of the strongly centralized Old
Safety-Kleen  business,  particularly  in  the United States, adversely affected
post-acquisition  operations  and cash flows. Changing the existing regionalized
LESI pricing structure to the more uniform national pricing structure of the Old
Safety-Kleen business resulted in a reduction of the overall pricing realized by
the  Company.  Converting several of LESI's service centers from  profit centers
with  one  manager to cost centers with two managers during fiscal 1999 and 2000
resulted  in  poor cost and pricing controls.  Transferring the Old Safety-Kleen
industrial  waste  collection business to a co-managed waste collection offering
diluted  pricing and negatively impacted customer service.  Requiring the use of
company  owned waste disposal facilities, even when lower-cost, external options
were  available,  resulted  in  higher  overall  operating  costs.

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

On  June  9,  2000,  the  Safety-Kleen Corp. and 73 of its domestic subsidiaries
(collectively, the "Debtors") filed voluntary petitions for relief (the "Chapter
11  Cases")  under  Chapter  11  of the United States Bankruptcy Code, 11 U.S.C.
Sec.Sec.  101-1330,  as  amended  (the  "Bankruptcy  Code") in the United States
Bankruptcy  Court  for  the  District  of Delaware (the "Bankruptcy Court"). The
Chapter  11  Cases are being jointly administered, for procedural purposes only,
before  the  Bankruptcy  Court  under  Case  No. 00-2303(PJW). Excluded from the
filing were certain of the Safety-Kleen's non-wholly owned domestic subsidiaries
and  all  of  the  Safety-Kleen's  indirect  Canadian subsidiaries. The issue of
substantive  consolidation of the Debtors has not been addressed. Unless Debtors
are substantively consolidated under a confirmed plan of reorganization, payment
of  pre-petition  claims of each Debtor may substantially differ from payment of
pre-petition  claims  of  other  Debtors.

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

Currently,  it  is  not  possible to predict the length of time the Company will
operate  under  the  protection  of  Chapter  11,  the outcome of the Chapter 11
proceedings  in general, or the effect of the proceedings on the business of the
Company or on the interests of the various creditors and security holders. Under
the  Bankruptcy  Code,  post-petition  liabilities  and pre-petition liabilities
subject  to  compromise  must  be  satisfied before shareholders can receive any
distribution.  The  ultimate  recovery  to  shareholders,  if  any,  will not be
determined until the end of the case when the fair value of the  Debtors' assets
is  compared to the liabilities and claims against the Debtors.  There can be no
assurance  as to what value, if any, will be ascribed to the common stock in the
bankruptcy  proceedings.

As  part  of the Chapter 11 proceedings, in connection with the development of a
plan of reorganization, the Company, from time to time, has and will continue to
evaluate  alternative  strategies,  including  any and all proposals designed to
maximize the value of the Debtors.  In connection with a recent amendment to the
DIP  Facility,  the  Company will prepare a Chemical Services marketing book and
begin  distribution  to  potential acquirors or strategic partners by August 31,
2001.  The  Company's  corporate restructuring advisor, Lazard Freres & Co. LLC,
will  assist  in  this  effort.

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

The  Company's  Consolidated  Financial Statements have been prepared on a going
concern  basis  which  contemplates  continuity  of  operations,  realization of
assets,  and  liquidation  of liabilities in the ordinary course of business and
does  not  reflect  adjustments  that  might result if the Debtors are unable to
continue  as  going  concerns.  The  Debtors'  significant  losses,  deficit  in
stockholders'  equity and their Chapter 11 filings, as well as issues related to
financial  assurance  requirements  discussed  in  Note  12  to  the  Company's
Consolidated  Financial  Statements,  raise  significant uncertainties about the
Company's  ability  to continue as a going concern, especially under its current
structure.  The  Debtors  intend  to  file  a  plan  of  reorganization with the
Bankruptcy  Court.  Continuing on a going concern basis is dependent upon, among
other  things, the Debtors' formulation of an acceptable plan of reorganization,
the success of future business operations, and the generation of sufficient cash
from  operations  and  financing  sources  to meet the Debtors' obligations. The
Consolidated  Financial  Statements do not reflect:  (i) the realizable value of


                                       32
<PAGE>
assets on a liquidation basis or their availability to satisfy liabilities; (ii)
aggregate  pre-petition  liability  amounts  that  may  be allowed for claims or
contingencies,  or  their status or priority; (iii) the effect of any changes to
the  Debtors'  capital  structure  or in the Debtors' business operations as the
result  of  an  approved  plan  of  reorganization;  or  (iv) adjustments to the
carrying  value  of  assets  (including  goodwill  and  other  intangibles)  or
liability  amounts  that  may  be  necessary  as  the  result  of actions by the
Bankruptcy  Court.

The  Company's  Consolidated  Financial  Statements  as of  August 31, 2000 have
been  presented  in  conformity  with  the  AICPA's  Statement of Position 90-7,
"Financial  Reporting  By  Entities  In  Reorganization  Under  the  Bankruptcy
Code,"  issued  November  19,  1990  ("SOP  90-7").  The  Statement  requires  a
segregation  of  liabilities subject to compromise by the Bankruptcy Court as of
the  bankruptcy  filing  date  and identification of all transactions and events
that  are  directly associated with the reorganization of the Company.  See Part
I,  Item.  1  - Business and Notes 1, 8, 11 and 24 to the Company's Consolidated
Financial  Statements.

INVESTIGATION  OF  FINANCIAL  RESULTS;  RESTATEMENT  OF  CONSOLIDATED  FINANCIAL
STATEMENTS

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

This  review  and  investigation resulted in restatements to fiscal 1997 through
1999  which  reduced  by  approximately $567 million the Company's  consolidated
stockholders'  equity  as  of  August  31,  1999  as  previously reported in the
Consolidated  Financial Statements.  In addition, significant adjustments to the
accounting  records  related  to  fiscal  year  2000 were made.  The Company has
expended  substantial  resources  in connection with the restatement efforts and
has  (i) conducted a comprehensive internal accounting review and determined the
nature,  amount,  and applicable fiscal year of the resulting adjustments,  (ii)
prepared  the  Consolidated Financial Statements and all related disclosures and
information required for this Form 10-K/A and (iii) assisted its new independent
auditors  with  their  audits so that they could report on these periods.  While
the  investigations  have not yet been completed, current management believes it
has  considered  all  relevant  facts  and  circumstances in connection with the
preparation  of  its  fiscal 1997 through 2000 financial statements and believes
that  further  material  adjustments  are  unlikely.

See  Part  I,  Item  1.  Business,  "Investigation  of  Financial Results", "New
Management Team", "Uncertainties Related to the Company's Internal Controls" and
Part  I,  Item  3.  Legal Proceedings, "Matters Relating to the Investigation of
Financial Results"; See Notes 2 and 12 to the Consolidated Financial Statements.

RESULTS  OF  OPERATIONS

From  March  6,  2000  through  May 22, 2000, David E. Thomas, Jr. and Grover C.
Wrenn,  who  before  March  6,  2000  were  outside  directors  of  the Company,
co-managed  the  Company  on an interim basis as its most senior executives.  On
May  4, 2000, Mr. Thomas was elected Chairman of the Board. On May 22, 2000, Mr.
Thomas  was  elected Chief Executive Officer and Mr. Wrenn was elected President
and Chief Operating Officer.  On August 17, 2000, Larry W. Singleton, previously
unaffiliated  with  the  Company,  was  appointed  Chief  Financial  Officer.

Since  March 2000, four new independent outside directors have been named to the
Board  of  Directors  of  the  Company.  In  May  2000,  Kenneth K. Chalmers was
appointed  to  the  Board  of  Directors of the Company. In March 2001, Peter E.
Lengyel  and  David  W. Wallace were each appointed to the Board of Directors of
the  Company and in April 2001, Ronald A. Rittenmeyer was appointed to the Board
of Directors of the Company.  All additions filled vacant positions on the Board
and  currently  all  positions  on  the  Board  are  filled.

Under  current  management,  the Company has (i) secured authorization for up to
$100  million  in  debtor-in-possession  financing,  (ii)  begun selling idle or
under-utilized  Company assets, (iii) reorganized the Company into two divisions
(Chemical  Services  and Branch Sales and Service), including intiating steps to
restore  key  elements  of  each  division's  pre-acquisition  strategies  and
structure, (iv) strengthened the Company's personnel and organization, (v) begun
strengthening  the  Company's  operating  and  financial  systems  and controls,
including  improvements  to  the  Company's  information  technology  and
transportation  management  systems,  (vi) outsourced operation of the Company's
data  management  center,  (vii)  negotiated an agreement with federal and state
regulators  under which the Company secured additional time to replace financial
assurance  for  its  operating facilities which is provided through surety bonds
issued  by  Frontier  Insurance  Company  ("Frontier"),  and  (viii)  replaced
PricewaterhouseCoopers LLP, the Company's former independent public accountants,


                                       33
<PAGE>
with  Arthur  Andersen  LLP.  The  Company  believes  that, as a result of these
initiatives,  it  has  been  able  to retain substantially all of its customers,
avoid  significant  employee  layoffs  or  facility closures and maintain normal
business  operations  without,  through  the  date  of  this filing, making cash
borrowings  on  its  debtor-in-possession  financing.

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

FISCAL  2000  OPERATIONS
------------------------

The  Company's  operating  loss  of  approximately  $620  million in fiscal 2000
includes  the  effect of several significant expenses resulting from a number of
unusual  events.

As  a  result  of  the  Chapter 11 filing, the Company performed a comprehensive
review  of  the  recoverability  of  its  long-lived assets, including goodwill.
Management  prepared and evaluated estimates of expected future cash flows based
on  assumptions  consistent  with the most likely future operations considering,
among  other  things, the Company's current strategies and financial position at
this  stage  of  the  reorganization process.  As a result of this comprehensive
review,  the  Company  recorded  asset  impairment  losses of approximately $368
million,  primarily  related  to various Chemical Services operations.  As noted
above,  the  Consolidated  Financial  Statements  do  not  reflect  all  of  the
adjustments  to  the  carrying  value  of  assets  (including goodwill and other
intangibles) or liability amounts that may be necessary as the result of actions
by  the  Bankruptcy  Court,  including  the  effects  of  a  confirmed  plan  of
reorganization.

The  Company  recorded  charges  to  earnings  for its estimate of uncollectible
accounts receivable of approximately $76 million, $11 million, $3 million and $7
million  during  fiscal  2000,  1999,  1998 and 1997, respectively.  The Company
believes that the charge in fiscal 2000, which represents a significant increase
from  the  prior  years,  primarily  resulted  from  the  business  system  and
integration  difficulties  discussed  above,  which  began  in  fiscal  1999 and
continued  throughout  fiscal 2000. As discussed below, subsequent to August 31,
2000,  accounts receivable aging has improved due to expanded collection efforts
and  certain  system  and  process  improvements,  including  cash  application
procedures.  The  Company  is continuing to develop and implement strategies for
further  improvements.

As  more  fully  discussed  in  Part  I,  Item  1.  - Business and Item 3. Legal
Proceedings  and  Notes  10,  11  and 12 to the Company's Consolidated Financial
Statements,  a  charge  to earnings of approximately $33 million with respect to
estimated  additional  accrued liabilities for the Pinewood landfill closure and
post-closure  cost  targets  was  recorded.  This  charge was in addition to any
related  asset  impairment  loss  discussed above and substantially exceeded the
amount  that  would  normally  be  charged  to  earnings based on waste actually
disposed  at  the  site  during  the  fiscal  period.  Pinewood  suspended waste
disposal  in  September  2000 while certain litigation involving the facility is
pending.

During  fiscal  2000,  the  Branch Sales and Service Division recorded unusually
large  charges  to earnings of approximately $25 million to adjust for its parts
cleaner  equipment  and  the  effect  of  increasing  its reserve for excess and
obsolete  inventory.

During  fiscal  2000, the Company incurred approximately $7 million of legal and
professional  costs  associated  with  the investigation and restatements of its
Consolidated  Financial  Statements.  Starting  in  September  2000,  the  audit
process  and the Company's use of outside accountants and other professionals to
provide  significant  non-audit  assistance to the Company's corporate and field
accounting  personnel  increased  significantly.  Additional  external  costs in
excess  of $35 million related to these matters have been incurred during fiscal
2001  primarily  due  to  the extensive audit and involvement of Arthur Andersen
LLP.  The  Company  expects  these costs to continue throughout the remainder of
fiscal 2001 and for an indefinite period thereafter although at a somewhat lower
level  since the restatement audit is complete.  The Company expects these costs
to  be  further  reduced  when  its  internal  controls  and  processes  are
satisfactorily  improved.  In  addition,  these  costs  should decrease when the
litigation  and  various  investigations  related  to  its  previously  reported
financial results are resolved.  These costs are classified as "Selling, general
and  administrative  expense"  in  the  Company's  consolidated  statement  of
operations.


                                       34
<PAGE>
FISCAL  2000  COMPARED  TO  FISCAL  1999
----------------------------------------

CONSOLIDATED  OPERATING  INCOME  (LOSS)

Consolidated  operating  loss  before  depreciation and amortization expense and
asset impairment losses ("EBITDA") totaled approximately ($88) million in fiscal
2000  versus  EBITDA  of approximately $175 million in fiscal 1999, a decline of
$263 million.  Of this decrease, consolidated revenue decreased by approximately
$38  million,  consolidated  operating  expenses increased by approximately $148
million  and consolidated selling, general and administrative expenses increased
by  approximately  $77 million.  Depreciation and amortization expense increased
by  approximately  $8  million.  Impairment  and  other  charges  increased  by
approximately  $357  million.

REVENUE

The decrease in revenue of approximately $38 million was comprised of a decrease
of  approximately $72 million in the Chemical Services Division partially offset
by  an  increase  of  approximately  $32 million in the Branch Sales and Service
Division  and  an  increase  of  approximately  $2 million in the Other segment.

The Chemical Services decrease of approximately $72 million was comprised of (i)
approximately  $20  million  less revenue in fiscal 2000 from the curtailment of
the  Division's  harbor  dredging  operations, (ii) approximately $20 million of
lower  landfill  revenues,  almost  half  of  which  is  related to the Pinewood
facility  which  suspended  waste  disposal while certain litigation is pending,
(iii)  approximately $18 million less revenue in 2000 due to curtailments in the
operation  of  seven  other  transportation  and  specialty facilities, and (iv)
approximately  $14  million  in  other  revenue  reductions.
The Branch Sales and Service increase of approximately $32 million was comprised
of  an increase in the Division's North American operations of $72 million and a
decrease  in  its  European operations of approximately $40 million (on December
23,  1998, the Company announced the recapitalization of its European operations
resulting  in  the  sale  of  56%  of  the  Company's  equity  interest in those
operations.  See  equity in earnings of associated company below).  The increase
of  $72  million for the North American operations is primarily due to increases
in  the  oil  collection,  re-refining  and  automobile  recovery business which
benefited from (i) approximately $27 million of higher sales attributable to the
acquisition  of  the  First  Recovery  business  on  September  1,  1999,  (ii)
approximately  $37  million  of  higher  revenue  at its used oil re-refineries,
resulting  primarily from higher prices attributable to an increase in crude oil
commodity  pricing  and from an increase in sales volumes from the East Chicago,
Indiana  site,  which  was  temporarily  idled during approximately six weeks of
fiscal 1999 while it corrected a remediation issue and (iii) approximately an $8
million  net revenue increase in certain other lines of business.  Revenues from
the  parts cleaner services line of business declined, continuing a trend, which
the Company believes results from sales to a maturing market.  Revenues in other
lines  of  business  in  the  Division  had  relatively  unchanged  results.

OPERATING  EXPENSES

The  increase  in operating expenses of approximately $148 million was primarily
attributable  to  Branch  Sales  and  Service.

Chemical  Services  operating  expenses  increased substantially as a percent of
revenue  in  fiscal  2000.  This increase was largely due to (i) lower operating
margins  at  the Pinewood facility which, as discussed above, accrued for all of
its  remaining  site  closure  and  post-closure  cost  targets  in  view of the
accounting  associated  with  the  assumption  that  there  will probably not be
significant  additional  waste disposal activity  at the facility and (ii) lower
margins  at  the  harbor  dredging  operations as a result of declining revenues
while  many  operating  expenses  continued.

Branch  Sales  and  Service  operating  expenses  increased primarily due to (i)
approximately  $25  million of unusually large charges to earnings to adjust for
amounts  related to its parts cleaner equipment and the effect of increasing its
reserve  for  obsolete inventory, (ii) approximately $20 million of higher costs
associated  with  the  oil  re-refinery  business  consistent  with  the  higher
commodity  pricing  and volumes discussed above, (iii) approximately $20 million
of higher costs due to the First Recovery acquisition, (iv) other increases such
as  disposal costs resulting from the requirement to use internal waste disposal
facilities  during  part  of  fiscal 2000, even when lower-cost external options
were  available,  (v)  higher  fuel  and maintenance costs due to the age of the
transportation fleet and increased fuel prices, and (vi) higher labor and fringe
benefit  costs.  These  increases  were  reduced  by  approximately  $25 million
related  to the European operations, which were no longer consolidated in fiscal
2000.

SELLING,  GENERAL  AND  ADMINISTRATIVE  EXPENSES

The  increase  in  selling, general and administrative expenses of approximately
$77  million  is  primarily  due  to approximately $65 million of additional bad
debts  expense,  approximately  $7  million  related  to the internal accounting
review, related audits and the various investigations of the Company's financial
results  and  approximately  $5  million  of  other  increased  expenses.


                                       35
<PAGE>
DEPRECIATION  AND  AMORTIZATION  EXPENSE

Depreciation  and  amortization  expense  increased  by approximately $8 million
primarily  due  to  a  change  in  the estimated lives in 2000 of certain of the
equipment  at  customers  in  the  Branch  Sales  and  Service  Division.

IMPAIRMENT  AND  OTHER  CHARGES

2000  impairment charges of approximately $368 million were primarily related to
the  Bankruptcy  filing  in  June  2000  and  consists  of  the  following ($ in
millions):


        Service centers and landfills related to Western operations      $118
        Other landfills and incinerators                                  119
        Harbor facility - closed                                           23
        Pinewood                                                           16
        Other facilities                                                   92
           Totals                                                        $368
                                                                         ====

The  amounts  shown as related to Western operations relates to facilities which
are  located  in the Western area of the United States.  Their markets have been
adversely affected by competitive conditions, including over supply of available
services, which have limited the Company's ability to increase prices to recover
increased  costs,  including  those  related  to  new environmental regulations.

Included  in  other  landfills and incinerators is an incinerator constructed to
burn  contaminated  soils.  Although  significant  revenue resulted from unusual
events  in 1999 and 2000, the general level of demand for these services has and
is  expected to continue to decline.  In addition, new environmental regulations
are projected to significantly increase capital expenditures and operating costs
in the future.  Also included in other landfills and incinerators is a landfill,
which  has  been  the  primary  disposal site for the soil burned at the Company
owned  incinerator.  The  projected  declines  in  volumes  generated  at  the
incinerator  are projected to have an adverse effect on volumes at the landfill.

As  discussed in Note 12, the Pinewood facility has been the subject of lengthy,
complex  and  protracted  legal proceedings.  The Company recorded an impairment
charge  related  to  Pinewood  in  1997  as a result of the projected effects of
adverse legal developments in that year.  On the basis of the additional adverse
outcomes  of  these  proceedings,  the  Company  has  concluded that it would be
imprudent  to assume that this facility will be able to generate any significant
future  revenue.  Accordingly,  an  additional  charge has been recorded for the
impairment  of  the  remaining  net  book  value of fixed assets at the Pinewood
facility.  Appropriate  reserves  for closure and post-closure costs at Pinewood
have  been  fully  provided  and  included  in  operating  costs.

CONSOLIDATED  INTEREST  EXPENSE

Interest  expense during fiscal 2000 of approximately $142 million decreased $44
million  from  approximately  $186 million during fiscal 1999.  Interest expense
decreased  primarily  because  contractual interest expense of approximately $60
million on pre-petition domestic funded debt attributable to the period from the
date  of  filing  to  August  31,  2000 has not been accrued in the Consolidated
Financial  Statements in accordance with SOP 90-7.  Prior to the date of filing,
the  additional  borrowings  incurred under the Senior Credit Facility needed to
fund the Company's negative cash flow from operations through that date resulted
in  additional  interest  expense  over  fiscal  1999.

CONSOLIDATED  DERIVATIVE  GAINS  (LOSSES)

The  net  market value of certain derivative contracts used for trading purposes
increased  $.7  million  during  2000  compared  with a decline of  $5.9 million
during  1999.  There  are  no  outstanding  derivative contacts as of August 31,
2000.  See  Note 2 to the Consolidated Financial Statements regarding the impact
of accounting for derivative transactions on the restatement of the 1997 through
1999  Consolidated  Financial  Statements.

CONSOLIDATED  EQUITY  IN  EARNINGS  OF  ASSOCIATED  COMPANIES

On August 11, 2000, the Company completed the sale of its remaining 44% interest
in  its  European operations.  The Company received approximately $34 million in
cash  and,  subject  to  contingencies,  approximately  $1  million  in deferred
payments.    From  these  proceeds and the proceeds of the sale of the Company's
Rosemount  facility,  approximately  $19  million  was  paid  to  the  Company's
pre-petition  lenders  in  the Credit Facility as an adequate protection payment
related  to  the security interest in both of these assets held by such lenders.
These  payments  are  classified  as  a reduction in the "Liabilities Subject to
Compromise"  associated  with  these  lenders  in  the  Consolidated  Financial
Statements  at  August  31,  2000.


                                       36
<PAGE>
Equity  in  associated companies during fiscal 2000 reflects the Company's share
of  the  results of operations attributable to the Company's 44% interest in its
European  operations from September 1, 1999 to August 11, 2000, the date of sale
of  the  Company's  remaining  interest.

On December 23, 1998, the Company announced the recapitalization of its European
operations  resulting  in  the  sale  of 56% of the Company's equity interest in
those  operations. Equity in associated companies during fiscal 1999 reflect the
Company's  share  attributable  to  the  Company's remaining 44% interest in the
results  of  its  European  operations.

CONSOLIDATED  REORGANIZATION  ITEMS

Reorganization  items  as  reported in the accompanying fiscal 2000 statement of
operations are comprised of income, expense and loss items that were realized or
incurred  by  the  Debtors  as  a  direct  result  of  the Company's decision to
reorganize  under  Chapter  11.  Reorganization  items  were  as  follows  ($ in
thousands):

Write-off of deferred financing costs related to pre-petition domestic
borrowings                                                              $41,533
Professional  fees  directly  related  to  the  filing                   15,297
Amortization  of  DIP  financing  costs                                     498
Losses  on  early  termination  of  qualifying  hedge  contracts          3,400
Rejected  operating  leases                                                 532
Interest  earned  on  cash  accumulated  during  Chapter  11               (337)
                                                                        --------
                                                                        $60,923
                                                                        ========

CONSOLIDATED  INCOME  TAXES

At  August  31,  2000, the Company had net operating loss carryforwards for U.S.
federal  income tax purposes of approximately $802 million expiring in the years
2006  through  2020.  The  Company cannot currently conclude that it will likely
realize  all  the  benefits  of  these  loss  carryforwards  and  an appropriate
valuation  allowance  has  been  established.  The income tax provision reflects
state  and  foreign  taxes  payable  of approximately $5 million, plus other net
deferred  tax expenses of approximately $8 million.  Implementation of a plan of
reorganization  will  likely reduce the availability of some or all of these net
operating  loss  carryforwards.

FISCAL  1999  COMPARED  TO  FISCAL  1998
----------------------------------------

CONSOLIDATED  OPERATING  INCOME  (LOSS)

EBITDA  totaled  approximately  $175  million  in  fiscal  1999 versus EBITDA of
approximately  $169  million  in  fiscal  1998,  an increase of approximately $6
million.  Of this increase, consolidated revenue increased by approximately $451
million, consolidated operating expenses increased by approximately $381 million
and  consolidated  selling,  general  and  administrative  expenses increased by
approximately  $64  million.  Depreciation and amortization expense increased by
approximately  $51  million.  Impairment  and  other  charges  decreased  by
approximately  $54  million.

REVENUE

The  increase  in  revenue  is  primarily due to the inclusion of the results of
operations  of the Old Safety-Kleen purchased in April 1998 for twelve months in
fiscal  1999  and  five  months  in  fiscal  1998.

OPERATING  EXPENSE

The  increase  in  operating  expense  is  primarily due to the inclusion of the
results  of  operations of the Old Safety-Kleen business purchased in April 1998
for  twelve  months  in  fiscal  1999  and  five  months  in  fiscal  1998.

SELLING,  GENERAL  AND  ADMINISTRATIVE  EXPENSE

The  increase in selling, general and administrative expense is primarily due to
the  inclusion  of  the  results  of operations of the Old Safety-Kleen business
purchased  in  April  1998  for  twelve months in fiscal 1999 and five months in
fiscal  1998.


                                       37
<PAGE>
DEPRECIATION  AND  AMORTIZATION  EXPENSE

The  increase  in  depreciation and amortization expense is primarily due to the
inclusion  of  the  results  of  operations of the Old Safety-Kleen purchased in
April  1998  for  twelve  months  in fiscal 1999 and five months in fiscal 1998.

IMPAIRMENT  AND  OTHER  CHARGES

1999  impairment  charges of approximately $11 million were primarily related to
decisions  made  by  management as a result of changes in business conditions or
legal  issues.  This  amount  represents  the  write-down of property, plant and
equipment.

CONSOLIDATED  INTEREST  EXPENSE

Interest  expense during fiscal 1999 of approximately $186 million increased $66
million  from approximately $120 million during fiscal 1998 primarily due to the
incremental  debt  required  to  finance the acquisition of the Old Safety-Kleen
business  being  outstanding  for a full year in fiscal 1999 as compared to five
months  in  fiscal  1998.

CONSOLIDATED  DERIVATIVE  GAINS  (LOSSES)

The  net  market value of certain derivative contracts used for trading purposes
declined by $5.9 million during 1999 and $1.2 million during 1998. See Note 2 to
the  Consolidated  Financial  Statements  regarding the impact of accounting for
derivative transactions on the restatement of the 1997 through 1999 Consolidated
Financial  Statements.

CONSOLIDATED  EQUITY  IN  EARNINGS  OF  ASSOCIATED  COMPANIES

On December 23, 1998, the Company announced the recapitalization of its European
operations  resulting  in  the  sale  of 56% of the Company's equity interest in
those operations. Equity in associated companies during fiscal 1999 reflects the
Company's  share  attributable  to  the  Company's remaining 44% interest in the
results  of  its  European  operations.

CONSOLIDATED  INCOME  TAXES

The  income  tax  provision  reflects  state  and  foreign  taxes  payable  of
approximately $10 million, plus other net deferred tax expenses of approximately
$29  million.

FISCAL  1998  COMPARED  TO  FISCAL  1997
----------------------------------------

CONSOLIDATED  OPERATING  INCOME  (LOSS)

EBITDA  totaled  approximately  $169  million  in  fiscal  1998 versus EBITDA of
approximately  $26  million  in  fiscal  1997, an increase of approximately $143
million.  Of this increase, consolidated revenue increased by approximately $531
million, consolidated operating expenses increased by approximately $330 million
and  consolidated  selling,  general  and  administrative  expenses increased by
approximately  $58 million.  Depreciation and amortization expenses increased by
approximately  $39  million.  Impairment  and  other  charges  decreased  by
approximately  $188  million.

REVENUE

The  increase  in  revenue  is  primarily due to the inclusion of the results of
operation  of  the  Old  Safety-Kleen  business  purchased in April 1998 and the
inclusion  of  the results of operation of the Rollins business purchased in May
1997  for  twelve  months  in  fiscal 1998 and three and a half months in fiscal
1997.

OPERATING  EXPENSE

The  increase  in  operating  expense  is  primarily due to the inclusion of the
results  of  operation  of the Old Safety-Kleen business purchased in April 1998
and  the inclusion of the results of operation of the Rollins business purchased
in  May  1997  for  twelve  months in fiscal 1998 and three and a half months in
fiscal  1997.

SELLING,  GENERAL  AND  ADMINISTRATIVE  EXPENSE

The  increase in selling, general and administrative expense is primarily due to
the  inclusion  of  the  results  of  operation of the Old Safety-Kleen business
purchased  in  April  1998  and the inclusion of the results of operation of the
Rollins  business  purchased  in  May  1997 for twelve months in fiscal 1998 and
three  and  a  half  months  in  fiscal  1997.


                                       38
<PAGE>
DEPRECIATION  AND  AMORTIZATION  EXPENSE

The  increase  in  depreciation and amortization expense is primarily due to the
inclusion of the results of operation of the Old Safety-Kleen business purchased
in  April  1998  and  the  inclusion  of the results of operation of the Rollins
business  purchased in May 1997 for twelve months in fiscal 1998 and three and a
half  months  in  fiscal  1997.

IMPAIRMENT  AND  OTHER  CHARGES

1998 impairment charges of approximately $65 million were related to the effects
of  acquisitions  and  other  factors.

The  impairment and other charges in 1998 resulting from effects of acquisitions
relate primarily to decisions to close additional Company facilities in response
to  effects  of  the  Rollins Acquisition which were not identified in 1997.  Of
this  amount,  approximately  $28 million represents the write-down of property,
plant  and  equipment, intangible and other assets and approximately $14 million
represents  the  establishment  of  closure  and post-closure reserves and other
liabilities.  Approximately  $37 million of these charges relates to the closure
of  the  Roebuck,  South  Carolina  incineration  facility.

The  impairment and other charges in 1998 resulting from other factors relate to
decisions  made  by  management as a result of changes in business conditions or
legal  issues.  Of  this  amount,  approximately  $16  million  represents  the
write-down  of  property,  plant  and equipment, intangible and other assets and
approximately  $7  million  represents  the  establishment  of  closure  and
post-closure  reserves  and  other  liabilities.

CONSOLIDATED  INTEREST  EXPENSE

Interest  expense during fiscal 1998 of approximately $120 million increased $75
million  from  approximately $45 million during fiscal 1997 primarily due to the
incremental  debt  required  to  finance the acquisition of the Old Safety-Kleen
business  beginning  in  April 1998 and the incremental debt required to finance
the  Rollins  transaction  in May 1997, which was outstanding for a full year in
fiscal  1998.

CONSOLIDATED  DERIVATIVE  GAINS  (LOSSES)

The  net  market value of certain derivative contracts used for trading purposes
declined  by  approximately  $1.2  million  during  fiscal 1998 and $1.4 million
during  fiscal  1997.  See  Note  2  to  the  Consolidated  Financial Statements
regarding  the  impact  of  accounting  for  derivative  transactions  on  the
restatement  of  the  1997  through  1999  Consolidated  Financial  Statements.

CONSOLIDATED  INCOME  TAXES

The  income  tax  provision  reflects  state  and  foreign  taxes  payable  of
approximately  $6  million, plus other net deferred tax credits of approximately
$45  million.

LIQUIDITY  AND  CAPITAL  RESOURCES

BANKRUPTCY

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

CASH  AND  CASH  EQUIVALENTS

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


                                       39
<PAGE>
Subsequent to August 31, 2000 and through the date of this filing, the Company's
cash balances increased.  As of the date of this filing, the total cash balances
were  in excess of $75 million for the Company's United States operations and in
excess of $35 million (USD) for the Company's Canadian operations.  In addition,
as  of  the  date  of  this  filing and as described below, the Company  has $81
million  of  remaining cash borrowing availability of which up to $16 million of
letter  of credit availability remains under the terms of its DIP Facility.  The
Company  currently  plans to use a substantial portion of this liquidity to meet
its  operating,  capital  expenditure,  financial  assurance  and  environmental
liability  requirements.  The  Company has begun to negotiate an increase in the
availability  under  the  DIP  Facility to accommodate expected letter of credit
needs  related  to financial assurance requirements.  While the Company believes
it  has  sufficient  cash  and credit to meet its current operating, capital and
environmental liability requirements, there may be additional financing required
to  meet  all of the Company's needs and there can be no assurance that any such
additional  financing  will  be  obtained.

CASH  FLOWS  FROM  OPERATIONS

During  fiscal  2000,  net cash used by operations was approximately $59 million
compared  to net cash provided by operations of approximately $19 million in the
prior  year resulting in a decrease in cash flow from operations of $78 million.
This  decrease  is  largely attributable to the period from September 1, 1999 to
the  date  of  the  Chapter  11  filing,  June 9, 2000.  During this period, the
Company  experienced increased operating costs and a continuing deterioration in
the  accounts receivable aging due to the Company's billing and cash application
system  and process difficulties.  Between the date of the Chapter 11 filing and
August  31,  2000,  the  Company  generated  positive  cash flow from operations
largely  due  to the effect of the bankruptcy restrictions on the payment of the
Company's  pre-petition  trade  liabilities  and debt service, while the Company
established  new  post-petition  trade  credit.

Since August 31, 2000, the Company believes its consolidated net cash flows from
operations  have  improved  because  of  increased collections of trade accounts
receivable  due  to  expanded  collection efforts and certain system and process
improvements,  including cash application procedures.  However, consolidated net
cash  flows  from  operations  subsequent to August 31, 2000 will (i) not likely
continue  to  benefit from significant new post-petition trade credit, (ii) need
to  accommodate  substantially  increased  costs  to  replace  certain financial
assurance  programs,  (iii)  need  to fund the significant professional fees and
other costs directly related to the Chapter 11 filing, the investigations of its
previously  reported  financial  results, the internal accounting review and the
related  audits,  (iv) could be effected by the potential loss of "event-based"
business  in  the  Chemical  Services  Division  and  (v)  need to fund the cash
requirements  for  the  deactivation  and  closure  of  certain  facilities.

CASH  FLOWS  FROM  INVESTING  ACTIVITIES

The  Company  operates  in  an  industry  that  requires a high level of capital
investment.  The  Company's  capital investment requirements primarily relate to
(i)  trucks  and  other  vehicles,  (ii)  equipment  at customer locations (iii)
computer  related  technology,  (iv)  equipment at waste collection and disposal
facilities,  and  (v)  construction  and  expansion  of  its  landfill  sites.

Capital  expenditures,  excluding  business  acquisitions,  decreased  to
approximately  $53  million  in  fiscal  2000  from approximately $72 million in
fiscal 1999 primarily due to the deferral of non-essential capital expenditures.
In  fiscal  2001,  the  Company  will  continue  to  defer non-essential capital
expenditures.  In  fiscal  2002  and  beyond,  the  Company  expects  capital
expenditure  requirements  to significantly increase over the spending levels of
fiscal  2000  and  2001,  primarily  due  to  a  return to more normal operating
requirements  and  the  need  to  comply  with  new  regulatory requirements for
incinerators.  In  addition,  the  Company  expects  to  upgrade  certain of the
Company's  Branch  Sales  and  Service  transportation fleet and oil re-refining
facilities  in  fiscal  2001  and  beyond.

DIP  FACILITY

On July 19, 2000, the Bankruptcy Court granted final approval of a one-year $100
million  Revolving  Credit  Term Loan and Guaranty Agreement underwritten by the
Toronto Dominion Bank as general administrative agent and the CIT Group, Inc. as
collateral  agent  (the  "DIP Facility") with sublimits for letters of credit of
$35  million.  Unless  extended  again,  the  DIP  Facility has been amended  to
expire  on  the earlier of January 31, 2002 or the effective date of the plan of
reorganization.

Proceeds from the DIP Facility may be used to fund post-petition working capital
and for other general corporate purposes during the term of the DIP Facility and
to  pay  certain  pre-petition claims, including those of critical vendors.  The
$35 million sublimit on letters of credit is further stratified into $15 million
available  for  auto  liability,  general  liability  and  workers' compensation
insurance  for  fiscal  year  2001;  $15 million for bonding; and $5 million for
limited  corporate  purposes.  When certain prospective financial information is
available,  the  Company has agreed to discuss modifications to the DIP Facility
to  include  financial covenants, including capital expenditure limitations.  As
of  the  date of this filing, no amounts have been drawn on the DIP Facility and
$19  million of letters of credit have been issued.  The Debtors are jointly and
severally  liable  under  the  DIP  Facility.


                                       40
<PAGE>
The DIP Facility benefits from superpriority claims status as provided for under
the  Bankruptcy Code. Under the Bankruptcy Code, a superpriority claim is senior
to  unsecured pre-petition claims and all other administrative expenses incurred
in  a  Chapter  11  case.    As  security, the DIP Facility lenders were granted
certain  priority,  perfected liens on certain of the Debtors' assets.  Pursuant
to the final order approving the DIP Facility, such liens are not subordinate to
or  pari  passu  with any other lien or security interest.  Borrowings under the
DIP  Facility  are  priced  at  LIBOR  plus 3% or prime plus 1% depending on the
nature  of the borrowings.  Letters of credit are priced at 3% per annum (plus a
fronting  fee  of  0.25%  to  the  Agent) on the outstanding face amount of each
letter  of  credit.  In addition, the Company pays a commitment fee of 0.50% per
annum  on  the  unused  amount  of the DIP Facility, payable monthly in arrears.
Subsequent  to  August  31,  2000,  the  Company  failed  to comply with certain
affirmative  covenants,  primarily  related  to  providing  audited  financial
statements  by  specified  dates,  for which waivers of non-compliance have been
received  as  of June 22, 2001.  As of the date of this filing the Company is in
compliance  with  the  terms  of  the  DIP  Facility.

As  part  of the Chapter 11 proceedings, in connection with the development of a
plan of reorganization, the Company, from time to time, has and will continue to
evaluate  alternative  strategies,  including  any and all proposals designed to
maximize  the value of the Debtors. In connection with a recent amendment to the
DIP  Facility,  the  Company will prepare a Chemical Services marketing book and
will  begin  distribution to potential acquirors or strategic partners by August
31,  2001.  The  Company's  corporate restructuring advisor, Lazard Freres & Co.
LLC,  will  assist  in  this  effort.

FINANCIAL  ASSURANCE

As  more fully described below and in Part I, Item 1. - Business, the Company no
longer  has  compliant  financial  assurance  for  many of its facilities and is
required  pursuant  to  the  provisions  of  the  CAFO  to obtain such financial
assurances  with respect to certain facilities by July 31, 2001 and by September
30, 2001 for the remaining facilities.  The Company is currently negotiating the
terms  of  such  financial  assurance with various providers.  The terms of such
financial assurance will likely include the requirement for the Company to issue
letters  of credit to secure a substantial portion of the necessary coverage and
will  likely consume a substantial portion of the current availability under the
DIP  Facility.  The  Company  is currently assessing any necessary amendments to
its  current DIP Facility that will be required.  There is no assurance that the
Company  will  obtain the required amendments to the DIP Facility.   On June 15,
2001,  the  Company  was  notified that Toronto Dominion (Texas), Inc., also the
general  administrative agent of the DIP Facility, was authorized to issue up to
$30  million  of  letters  of credit towards the amount required by the Debtors'
effort  to  replace  Frontier  Insurance  Company as a provider of environmental
financial  assurance  with  respect  to certain of the Company's facilities.  In
addition  to  this amount, the Company believes that it will need to arrange for
additional  letters  of  credit to support its financial assurance requirements.
On  June  20,  2001, the Company and its affected subsidiaries filed a motion in
Bankruptcy  Court  seeking  approval  of  a  transaction that will result in the
replacement  of  Frontier  at  100  facilities.

INFLATION  AND  COMMODITY  PRICE  RISKS

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

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

RECENT  ACCOUNTING  DEVELOPMENTS

In  February  2001, the Financial Accounting Standards Board ("FASB") released a
revised  exposure  draft  for  a  proposed  SFAS,  "Business  Combinations  and
Intangible  Assets  -  Accounting  for Goodwill."  The proposed standards would,
among  other  requirements,  (i)  prohibit  the  use of the pooling-of-interests
method  of  accounting for business combinations, (ii) require that goodwill not
be  amortized in any circumstance, and (iii) require that goodwill be tested for
impairment  annually  or when events or circumstances occur between annual tests
indicating  that  goodwill  of a reporting unit might be impaired.  The proposed
standards  would establish a new method of testing goodwill for impairment.  The
FASB  has  recently  set  transition  provisions and the FASB plans to issue the
final  standards in July 2001.  The proposed standards would take full effect in
fiscal  2003.  The  provisions  of  any  final standards could differ from those
reflected  in  the  exposure  draft;  as a result, the actual application of any
final standard could result in different effects than those described above. The
Company  has  not  tested  goodwill for impairment under the proposed standards.


                                       41
<PAGE>
FACTORS  THAT  MAY  AFFECT  FUTURE  RESULTS

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

UNCERTAINTIES  RELATING  TO  THE  COMPANY'S  INTERNAL  CONTROLS

The current management team has identified numerous issues that will be critical
to  a  successful  reorganization.  In addition to these efforts, and as part of
the  comprehensive  internal  review  of  its  accounting  records  conducted in
connection  with  the  restatement  process,  the  Company  identified  material
deficiencies  in  many  of its financial systems, processes and related internal
controls  and commenced a long-term program to correct these conditions.  During
October  2000,  Arthur Andersen LLP reported to the Audit Committee of the Board
of  Directors  that  the Company had certain material weaknesses in its internal
controls  and  that  these  conditions  would  be  considered in determining the
nature,  timing  and  extent  of their audit tests for fiscal years 1997 through
2000.

During  the last twelve months, the Company contracted with outside accountants,
including  accountants  from  Arthur  Andersen  LLP,  and other professionals to
provide  significant  non-audit  assistance to the Company's corporate and field
accounting  personnel with the account analysis, financial reporting systems and
project  management  support  necessary  to prepare the Company's fiscal 1997 to
2000  Consolidated  Financial  Statements,  related  disclosures  and  other
information  requirements  of  this  Form  10-K/A.  During this same period, the
Company  began  taking steps to develop a comprehensive program that, over time,
will  establish  a  satisfactory  system  of  internal controls and a timely and
reliable  financial reporting process.  As part of this program, a comprehensive
review  has begun of the process-flow and related controls surrounding all major
transaction cycles starting with the transaction's origination at both field and
corporate  locations.  As  discussed more fully in the notes to the Consolidated
Financial  Statements, the Company has now identified and implemented accounting
policies  that  current  Company  management  and  the Company's new independent
public accountants believe conform with generally accepted accounting principles
for  use in its financial reporting.  In addition, the program will complete the
development  and  implementation of the required internal policies and processes
regarding  all  major general ledger accounts and related internal controls.  An
evaluation  of  the  Company's system needs, including among other things, those
related  to  its  general  ledger  and  financial  reporting,  is  in  progress.

During  this  period, the Company has hired a new Chief Financial Officer, a new
Corporate  Controller,  two  division  senior  financial  officers  and a senior
division  controller,  that  collectively  have  over  100  years  of  relevant
experience in directing, maintaining, monitoring, controlling, and preparing the
books and records and financial statements for major corporations.  In addition,
the  Company  has  hired  numerous  other  experienced  accounting,  financial
reporting,  information  technology  and  management  personnel, including among
others,  two  senior  credit  and  collections  managers,  a  senior information
technology  manager,  an  experienced  payroll  manager  and several experienced
corporate  accounting  and reporting department managers.  Many of the new hires
are  certified  public  accountants  and  most  have  experience  in  business
environments  involving  the  record  keeping  and internal control requirements
applicable  to  SEC  registrants.  These  individuals  will  serve  as  the core
financial leadership to complete the Company's program, including management and
oversight  of  the  Company's  accounting and finance staffing and organization.

The  Company  will  continue  to  utilize  substantial internal and supplemental
external  resources  until  it is satisfied that its internal controls no longer
contain  material  weaknesses and it is capable of preparing timely and reliable
financial reporting.  Significant additional hours of contract non-audit outside
accounting  consultants  will  be  required  to  assist  the  Company  in  its
preparation  of  the  quarterly  and  other financial reporting requirements for
fiscal  2001.  The  Company  is  currently in the process of updating its fiscal
2001  general  ledger  system  for  the  voluminous  number of adjusting journal
entries  resulting  from its internal accounting review through August 31, 2000.
In  addition  to  updating  its  general  ledgers,  the Company is reviewing its
accounting  records  for  the first three quarters of fiscal 2001, including the
effects  of applying any changes to its accounting policies from the fiscal 1997
to  2000  review  to  its  current  results.  A  substantial  portion  of  this
supplemental  effort has begun.  Accordingly, the Company will incur significant
costs  and  require extraordinary efforts to close its books at each interim and
annual  period  in  order  to  produce  reliable  financial  statements.

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


                                       42
<PAGE>
UNCERTAINTIES  RELATING  TO  BANKRUPTCY  PROCEEDINGS

The  Company's  future  results  are  dependent  upon  the  Company successfully
confirming  and  implementing a plan of reorganization.  The Company has not yet
submitted  such  a  plan  to a Bankruptcy Court for approval and cannot make any
assurance  that  it will be able to obtain any such approval in a timely manner.
Failure  to  obtain  this approval in a timely manner could adversely affect the
Company's  operating  results,  as  the Company's ability to obtain financing to
fund  its  operations  and  its  relations  with  its customers may be harmed by
protracted  bankruptcy proceedings.  Furthermore, the Company cannot predict the
ultimate  amount of all settlement terms for the liabilities of the Company that
will  be  subject  to  a  plan of reorganization.  As of May 18, 2001, proofs of
claim  in  the  approximate  amount  of $174 billion have been filed against the
Company  and  its  affiliates  by  among  others,  secured  creditors, unsecured
creditors  and  security holders.  The Company believes that the amount of these
claims that are in excess of the $2.5 billion in accrued liabilities recorded in
the  Consolidated  Financial  Statements  as  of August 31, 2000 as "Liabilities
subject  to  compromise"  are  duplicative  or without merit and will not have a
material effect on the Consolidated Financial Statements.  The Company is in the
process of reviewing the proofs of claim and once this process is complete, will
file  appropriate objections to the claims in the Bankruptcy Court.  Once a plan
of  reorganization  is approved and implemented, the Company's operating results
may  be adversely affected by the possible reluctance of prospective lenders and
customers  to  do  business with a company that recently emerged from bankruptcy
proceedings.  The  Company  believes  that its revenue since the date of filing,
particularly  with  respect  to  "event-based" business in the Chemical Services
Division  which  generally  requires  bonding  not  currently  available  to the
Company,  is  being  adversely  impacted  by  the  Chapter  11  Cases.

EFFECT  OF  LAIDLAW'S  FINANCIAL  SITUATION  ON  THE  COMPANY

On  May  18, 2000, Laidlaw announced that its Board of Directors had declared an
interest  payment  moratorium  on all advances under the Laidlaw syndicated bank
facility  and  on  all  outstanding public debt of Laidlaw and Laidlaw One, Inc.
Certain  debt  holders  included  in  the  moratorium  have commenced actions to
attempt  to  recover  amounts  alleged to be owed to them and other debt holders
subject  to the moratorium may also commence similar actions. The Company cannot
predict  the  impact, if any, this moratorium and any related circumstances will
have  on  the  Company's  ability  to  collect  upon  Laidlaw's indemnification,
guaranty  and  other contractual obligations to the Company, which are described
in  Item  13  of  Part  III  (Certain  Relationships  and Related Transactions).

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

LEVERAGE

The Company is currently in default under its senior debt obligations, which are
substantial.  During the pendency of its bankruptcy proceedings, the Company may
only obtain additional debt financing with the approval of the Bankruptcy Court,
and  has  already  obtained  $100 million in such debt financing through the DIP
Facility  discussed  above.  To date, there have been no cash borrowings against
this  $100  million  facility.  As  of  the  date of this filing, two letters of
credit  in  the  aggregate  amount  of $19 million has been issued under the DIP
Facility.  The  total  remaining  credit available under the DIP Facility is $81
million,  of  which $16 million is available for letters of credit. Depending on
the  resolution  of  its  bankruptcy  proceedings and the plan of reorganization
adopted,  the  Company  could  emerge  from  bankruptcy  highly  leveraged  with
substantial debt service obligations, including, as discussed above, obligations
or  commitments  regarding financial assurance requirements. Thus the Company is
particularly susceptible to adverse changes in its industry, the economy and the
financial  markets. In addition, the Company's ability to obtain additional debt
financing  may  be  limited  by  restrictive covenants under the terms of credit
agreements  and  any  other  debt  instruments.  Those  limits  on financing may
restrict  the  Company's  ability  to  service  its  debt  obligations  through
additional  debt  financing  if  cash  flow  from  operations is insufficient to
service  such  obligations.  Unless  amended,  the  DIP Facility, matures on the
earlier  of January 31, 2002, or the effective date of a plan of reorganization.


                                       43
<PAGE>
ENVIRONMENTAL  REGULATION  AND  LEGAL  PROCEEDINGS

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

As  discussed in "Regulation - Clean Air Act," the Company's United States-based
hazardous  waste  incinerators  must  be in compliance with EPA's MACT and other
compliance  rules  by  September  30, 2002, or by September 30, 2003, should the
U.S.  EPA and/or state regulatory agency agree to a one-time/one-year compliance
deadline  extension.  These costs, primarily capital expenditures, are currently
estimated  to  be  at  least  $23  million.

The  Company's  mineral  spirits  solvent-based  parts  washer business could be
adversely  affected  by  volatile  organic  hydrocarbon  emission  restrictions,
imposed  upon  this  segment of the Company's business by local and/or state Air
Pollution  Control  Agencies,  in  ozone  non-attainment  areas, such as certain
portions  of  California,  Houston,  Texas  and  similar  areas.

CERCLA  imposes liability for the cost of cleanup of sites from which there is a
release  or  threatened release of a hazardous substance into the environment on
generators  and  transporters as well as current and former owners and operators
of  such  sites. Substantial costs are involved in a CERCLA cleanup and there is
difficulty in obtaining insurance for environmental impairment liability.  As is
discussed in Part I, Item 1. Business and item 3. Legal Proceedings, the Company
currently  has  exposure  relating  to  certain  specific  CERCLA matters.  Such
liability  for  these  specific and other currently unknown matters could have a
material  impact  on  the  Company's  business,  financial  condition and future
prospects.

The  Company is required to provide certain financial assurances with respect to
certain  statutorily  required  closure,  post-closure  and  corrective  action
obligations  related to various operating facilities. These financial assurances
may take the form of insurance, guarantees, bonds, letters of credit or deposits
of  cash,  to  the  extent  acceptable  to  the United States, Canadian or other
foreign,  state,  territorial,  federal,  provincial  or local courts, executive
offices,  legislatures,  governmental  agencies  or  ministries,  commissions or
administrative,  regulatory  or self-regulatory authorities or instrumentalities
("Governmental  Entities") requiring such assurances. There is no guarantee that
the  Company  will  be  able  to  provide  the required financial assurances. In
addition,  the  U.S. Treasury Department's May 31, 2000 removal of Frontier from
the  Circular  570  list  of  acceptable  sureties  has  created  additional
uncertainties  for the Company. Frontier provided surety bonds that met slightly
more than 50% of the Company's requirements for financial assurance. The Company
has  entered a consent agreement and final order with the EPA and is required to
obtain  alternative financial assurance by July 31, 2001 for some facilities and
September  30, 2001 for the remaining facilities. There can be no assurance that
the  Company  will  be  able  to  obtain  compliant  financial assurance for its
facilities  for which Frontier previously provided assurance within the deadline
specified  by  the  consent  agreement  and  final  order. In the event that the
Company cannot obtain such assurance, the affected facilities may be required to
cease  accepting  waste  and  commence  closure and post-closure measures, which
would  adversely  affect  the  Company's business. On June 1, 2001, the State of
Texas notified Safety-Kleen and its affected subsidiaries that it intends to (i)
seek  substantial  penalties  for  the  failure  to  have  compliant  financial
assurance,  (ii)  deny  certain  pending  permit  renewal  and  modification
applications,  and  (iii)  revoke  the  registration  of  some  of  the used oil
facilities  that  Safety-Kleen  and  its subsidiaries operate in Texas. With one
exception, Safety-Kleen and its subsidiaries will have the opportunity to assert
defenses to these actions in various administrative and judicial proceedings. In
the case of the exception, a permit modification, the application can be refiled
once  compliant  financial  assurance  is  obtained.  Safety-Kleen  and  its
subsidiaries  expect  to  obtain compliant financial assurance at most or all of
their  Texas  facilities  before  the administrative and/or judicial proceedings
conclude.  On  June  15,  2001,  the  Company was notified that Toronto Dominion
(Texas),  Inc.,  also  the general administrative agent of the DIP Facility, was
authorized  to  issue  up to $30 million of letters of credit towards the amount
required  by  the  Debtors'  effort  to  replace Frontier Insurance Company as a
provider  of  environmental  financial  assurance with respect to certain of the
Company's  facilities.  In addition to this amount, the Company believes that it
will  need  to arrange for additional letters of credit to support its financial
assurance  requirements.  On  June  20,  2001,  Safety-Kleen  and  its  affected
subsidiaries  filed  a  motion  in  Bankruptcy  Court  seeking  approval  of  a
transaction  that  will  result  in  replacement  of Frontier at 100 facilities.


                                       44
<PAGE>
A  subsidiary  of  Safety-Kleen  owns and operates a hazardous waste landfill in
South  Carolina.  South  Carolina  law  requires that hazardous waste facilities
provide  evidence of financial assurance for potential environmental cleanup and
restoration in form and amount to be determined by the South Carolina Department
of  Health  and  Environmental Control.  The subsidiary is currently required to
establish  and  maintain  a cash trust fund as financial assurance for potential
environmental  cleanup  and  restoration  and to accumulate $133 million in 1994
dollars  by  2004,  to  be  funded  by  annual cash payments. To comply with the
financial  assurance  requirements  of the governing regulations, the subsidiary
would  have to presently pay approximately $82 million cash  into the trust fund
and  fund the balance with cash over the next four years. The Company is a party
to  litigation  concerning  the  enforcement  of  this requirement. In addition,
pending the outcome of this litigation, the Company has suspended waste disposal
at  this  facility.  For  a  more  detailed discussion see Part I, Item 3 "Legal
Proceedings  -  Safety-Kleen  (Pinewood),  Inc."  and  Note  12 to the Company's
Consolidated  Financial  Statements.

In  addition to the costs of complying with environmental regulations, hazardous
waste  treatment  companies  generally  are involved in legal proceedings in the
ordinary  course of business. Alleged failure by the Company to comply with laws
and regulations may lead to the imposition of fines or the denial, revocation or
delay  of  the  renewal  of  permits  and  licenses by governmental entities. In
addition, such Governmental Entities as well as surrounding landowners may claim
that  the  Company  is  liable  for  environmental damages. Citizens groups have
become  increasingly  active  in challenging the grant or renewal of permits and
licenses  for  hazardous  waste facilities and responding to such challenges has
further  increased  the  costs  associated  with  establishing new facilities or
expanding  current  facilities.  A significant judgment against the Company, the
loss  of a significant permit or license or the imposition of a significant fine
could  have  a  material  adverse  effect  on  the Company's business and future
prospects.  The  Company  is  currently a party to various legal proceedings, as
well  as  environmental proceedings, which have arisen in the ordinary course of
its  business.

The  Company  is  a  party  to  environmental  and  other litigation, claims and
administrative  proceedings  arising out of its operations.  For a more detailed
discussion,  see  Part  I,  Item  3 "Legal Proceedings - Ville Mercier Facility,
Marine  Shale Processors, Lambton Hazardous Waste Landfill, RayGar Environmental
Systems  International  Litigation,  Federated Holdings, Inc. Litigation, Hudson
County  Improvement Authority Litigation, ECDC Environmental, L.C. Claim, Bryson
Adams  Litigation"  and  Note  12  to  the  Company's  Consolidated  Financial
Statements.  The  Company  is  unable  to predict the outcome or impact of these
matters and there can be no assurance that they will not have a material adverse
effect  on  the  Company  and  its  operations.

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

DISPOSAL  AND  OTHER  SUPPLY  ARRANGEMENTS

The  Company  has  a  contract  that  expires  in  2005  with  three cement kiln
facilities.  The  contract provides the Company with an outlet for a significant
portion  of its hazardous waste-derived fuel and provides the other party with a
fuel  source  to  operate  its  cement  kiln  facilities.

The  Company  owns  an  interest  in The ArmaKleen Company, a joint venture with
Church  and Dwight.  ArmaKleen is the sole source for certain cleaning chemistry
used  primarily  in  the  Company's Parts Cleaner Service business and also sold
directly  to  customers  as  an  industrial  cleaner.

The Company purchases certain of its oil additive supplies from a relatively few
providers.  The supplies are used in the Company's re-refining operations in the
formulation  of  its  various  lubrication  products.

While  the Company believes it has satisfactory relationships with each of these
vendors,  a  loss  of  any  of these relationships could have a material adverse
effect  on  the  future  results  of  operations.

MATTERS  RELATED  TO  INVESTIGATION  OF  FINANCIAL  RESULTS

As  discussed  in  greater detail in Part I, Item 3 "Legal Proceedings - Matters
Related  to  Investigation  of  Financial  Results" and Note 12 to the Company's
Consolidated  Financial  Statements,  the  Company  is a party to various claims
filed  by  shareholders  and  bondholders  of  the  Company on behalf of various
alleged  classes  of  Company  shareholders  and  bondholders, asserting federal
securities  law  claims  against  the  Company  and  certain  present and former
officers  and  directors  of the Company and Laidlaw Inc.  These actions against
the  Company  are  subject to an automatic stay under the Bankruptcy Code during
the  pendency  of  the  Company's  bankruptcy  proceedings.

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


                                       45
<PAGE>
In  addition  to  the  above,  two shareholder derivative lawsuits were filed on
behalf  of  the  Company  against  certain of its directors and former directors
alleging  breach  of  state law fiduciary duties by the defendants. These claims
seek to recover damages on behalf of the Company against the director defendants
in an unspecified amount as well as related relief. These actions are subject to
an automatic stay under the Bankruptcy Code during the pendency of the Company's
bankruptcy  proceedings.

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


ITEM  7A.     QUANTITATIVE  AND  QUALITATIVE  DISCLOSURES  ABOUT  MARKET  RISK

In  the  normal  course  of  business,  the  Company  is  exposed to market risk
including  changes  in  interest  rate  risk  and  currency  exchange  rates.

Interest Rate Risk - At August 31, 2000, the Company had fixed and variable rate
debt denominated in U.S. dollars, and variable rate debt denominated in Canadian
dollars.  Due to the uncertainty resulting from the Bankruptcy filings discussed
in  Item 1, the fair value of the Company's long-term debt as of August 31, 2000
is  not  determinable.  The  following table details the original maturities (at
book  value) and interest rate indices (including the default rate on the Senior
Credit  Facility)  for  all variable rate debt as of August 31, 2000, segregated
between  debt  subject  to  compromise and debt not subject to compromise  ($ in
millions):

<TABLE>
<CAPTION>
                                                     2001    2002    2003    2004    2005   THEREAFTER    TOTAL
                                                    ------  ------  ------  ------  ------  -----------  --------
<S>                                                 <C>     <C>     <C>     <C>     <C>     <C>          <C>
Subject to compromise
---------------------
Senior Credit Facility dated April 3, 1998 ($U.S.)
     Tranche A (Prime Rate + 3.375%)                $120.1  $ 84.3  $ 84.2  $ 63.2  $   --  $        --  $  351.8
     Tranche B (Prime Rate + 3.75%)                    6.0     4.0     4.0    97.0   282.0           --     393.0
     Tranche C (Prime Rate + 5.00%)                    6.0     4.0     4.0     4.0    96.0        279.0     393.0
Revolving credit (Prime Rate + 3.375%)                  --      --      --   340.0      --           --     340.0
                                                    ------  ------  ------  ------  ------  -----------  --------
Subtotal domestic credit facility                    132.1    92.3    92.2   504.2   378.0        279.0   1,477.8
Promissory note dated May 15, 1997
    (6 month LIBOR )                                  10.0    10.0    40.0      --      --           --      60.0
                                                    ------  ------  ------  ------  ------  -----------  --------
Subtotal variable rate indebtedness subject to
Compromise(1)                                        142.1   102.3   132.2   504.2   378.0        279.0   1,537.8
                                                    ------  ------  ------  ------  ------  -----------  --------
Not subject to compromise
-------------------------
Canadian tranche of April 3, 1998, senior credit
Facility(2,3)                                         16.6    11.5    11.5     8.7      --           --      48.3
Canadian demand note(2)                               17.1      --      --      --      --           --      17.1
                                                    ------  ------  ------  ------  ------  -----------  --------
Subtotal Canadian denominated variable rate debt      33.7    11.5    11.5     8.7      --           --      65.4
                                                    ------  ------  ------  ------  ------  -----------  --------
Consolidated variable rate debt                     $175.8  $113.8  $143.7  $512.9  $378.0  $     279.0  $1,603.2
                                                    ======  ======  ======  ======  ======  ===========  ========
</TABLE>

1    All  debt  subject  to compromise is classified as such in the consolidated
     balance  sheet.  See  Note  8  to  the  consolidated  financial statements.

2    The  floating  interest  on  these  borrowings is based on Canadian prime +
     1.375  percent or the Canadian Bankers Acceptance rate + 2.375 percent. The
     interest  rate  applied  is  at  the  Company's  discretion.

3    The  Canadian  tranche  of the senior credit facility, while not subject to
     compromise, was in default at August 31, 2000, and is classified as current
     debt  in  the  consolidated  balance  sheet.


                                       46
<PAGE>
The  following  table  details the rates and maturities for all fixed rate debt,
all  of  which  is subject to compromise, as of August 31, 2000 ($ in millions):

<TABLE>
<CAPTION>
                                                           2001   2002   2003   2004   2005   THEREAFTER   TOTAL
                                                           -----  -----  -----  -----  -----  -----------  ------
<S>                                                        <C>    <C>    <C>    <C>    <C>    <C>          <C>
9.25% Senior Subordinated Notes due 2008                   $  --  $  --  $  --  $  --  $  --  $     325.0  $325.0
9.25% Senior Notes due 2009                                   --     --     --     --     --        225.0   225.0
Industrial revenue bonds with rates ranging from 6.0% to
7.75%                                                         --     --   15.7    2.0    2.0         71.2    90.9
Capital leases                                               0.6    0.6    0.6    0.6    0.5          5.2     8.1
Other                                                        2.8    0.5     --     --     --           --     3.3
                                                           -----  -----  -----  -----  -----  -----------  ------
Total fixed rate debt                                      $ 3.4  $ 1.1  $16.3  $ 2.6  $ 2.5  $     626.4  $652.3
                                                           =====  =====  =====  =====  =====  ===========  ======
</TABLE>

The  Company's  Senior Credit Facility dated April 3, 1998, included provisions,
which  expired  March  31,  2000,  requiring the Company to obtain interest rate
protection  for  a  notional amount equal to at least 40 percent of Consolidated
Total Funded Debt bearing variable interest.  The Company entered into pay fixed
swaps,  in  part,  to  satisfy this provision of the agreement.  As discussed in
Note  14  of  the  notes  to  the consolidated financial statements, the Company
entered  into  a number of other derivative transactions including interest rate
swaps,  swaptions, bond indexed equity swaps, and forward start swaps which were
used  for  trading  purposes.  As of August 31, 1999, 1998 and 1997, the Company
had derivative contracts outstanding with notional amounts of $2.2 billion, $968
million  and  $170 million, respectively.  In March 2000, the Company's existing
derivative  contracts,  including  those  entered  into to satisfy interest rate
protection  requirements,  were  involuntarily  terminated  as  a  result  of
cross-default  provisions  between  the Company's Senior Credit Facility and its
International  Swap  Dealers Association Master Agreements.  The notional amount
of  these contracts was $2.0 billion.  As of August 31, 2000, the Company had no
derivative  transactions  outstanding.  See Note 14 of notes to the consolidated
financial  statements  for  detail  of  the  Company's past derivative activity.

In June 2000, the Company entered into a $40 million debtor-in-possession credit
agreement.  In  July  2000,  the  Company  increased  the  amount  that could be
borrowed  under  that arrangement, including letters of credit, to $100 million.
As  of August 31, 2000, no amounts had been drawn under this agreement and $15.0
million  of  letters  of  credit  had  been  issued.  Any  borrowings under this
agreement  will  bear  interest  at LIBOR plus 3 percent or Prime plus 1 percent
depending  on  the  nature  of  the  borrowings.  See  Note  8  of  notes to the
consolidated  financial  statements  for  further  discussion  of  the
debtor-in-possession  credit  agreement.

Currency  Exchange  Rate  Risk  -  The Company's operations in Canada expose the
Company to currency exchange rate risks.  However, that risk is mitigated by the
fact that only approximately 11% percent of the Company's revenues are generated
in  Canada.  In  addition,  the  Canadian  assets are partially hedged naturally
through  Canadian  denominated debt.  Currently, the Company does not enter into
any  hedging  arrangements to reduce this exposure.  The Company is not aware of
any facts or circumstances that would significantly impact such exposures in the
near-term.  If,  however,  there  was a sustained decline of the Canadian dollar
versus  the  U.S.  dollar,  then  the consolidated financial statements could be
adversely  affected.

ITEM  8.      FINANCIAL  STATEMENTS  AND  SUPPLEMENTARY  DATA

     See  the  Consolidated  Financial  Statements  of  Safety-Kleen  Corp.  and
subsidiaries included herein and listed on the Index to Financial Statements set
forth  in  Item  14  (a)  of  this  Form  10-K/A  report.

QUARTERLY  FINANCIAL  INFORMATION  (UNAUDITED)

During the last twelve months, the Company contracted with outside accountants ,
including  accountants  from  Arthur  Andersen  LLP,  and other professionals to
provide  significant  non-audit  assistance to the Company's corporate and field
accounting  personnel with the account analysis, financial reporting systems and
project  management  support  necessary  to prepare the Company's fiscal 1997 to
2000  Consolidated  Financial  Statements,  related  disclosures  and  other
information  requirements  of  this  Form  10-K/A.  This  effort  included  a
comprehensive  review  of  substantially  all  of the accounts and resulted in a
large  number  of  adjustments  affecting  each  of the respective periods.  The
impact  of  these adjustments on the annual financial statements is described in
Note 2 of the Consolidated Financial Statements.  While the Company believes the
adjustments  have  been  reflected  in the appropriate annual fiscal period, the
Company has not undertaken the extraordinary effort and additional time and cost
required  to  apply  all  of  the  adjustments to the appropriate interim fiscal
quarter.  Therefore, the quarterly financial information required by Item 302 of
Regulation  S-K  has  not  been  included  in  this  filing.  See "Uncertainties
Relating  to  the  Company's  Internal  Controls"  include  herein.


                                       47
<PAGE>
ITEM  9.      CHANGES  IN  AND  DISAGREEMENT  WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL  DISCLOSURE

     See  the Current Report on Form 8-K filed by the Company on August 8, 2000.

                                    PART III
                                    --------

ITEM  10.   DIRECTORS  AND  EXECUTIVE  OFFICERS  OF  THE  REGISTRANT

<TABLE>
<CAPTION>
                      EXECUTIVE OFFICERS OF THE REGISTRANT

     The  following sets forth certain information with respect to the executive
officers  of  the  Company:

Name                  Age                        Position Held
--------------------  ---  ----------------------------------------------------------
<S>                   <C>  <C>
David E. Thomas, Jr.   43  Chief Executive Officer and Chairman of the Board
Grover C. Wrenn        58  President and Chief Operating Officer
Larry W. Singleton     50  Senior Vice President, Finance and Chief Financial Officer
Henry H. Taylor        57  Senior Vice President, General Counsel and Secretary
David M. Sprinkle      47  President Chemical Services Division
Roy D. Bullinger       52  President Branch Sales and Service Division
</TABLE>

David  E.  Thomas  was  elected  Chairman of the Board on May 4, 2000, and Chief
Executive Officer on May 22, 2000. Mr. Thomas had been acting as Chief Executive
Officer  since  March  6,  2000.  Prior  to that time, Mr. Thomas was the Senior
Managing  Director and the Head of the Investment Banking Group of Raymond James
& Associates, Inc., an investment banking firm, since July 1996; from 1991 until
July  1996,  he  was a Managing Director of Raymond James.  Mr. Thomas also is a
director of Reynolds, Smith and Hills, Inc., an engineering company.  Mr. Thomas
has  been  a director of the Company since June 1997. Mr. Thomas was a member of
the  Human Resources and Compensation Committee from June 24, 1997, until August
24,  2000.  Mr. Thomas was the Chairman of the Executive Committee from February
2000 until May 2000, when the Committee was dissolved and has served as Chairman
of  the  Special  Committee  (Investigation)  since its formation in March 2000.

Grover  C.  Wrenn  was  elected President and Chief Operating Officer on May 22,
2000.  He  had  been acting as President and Chief Operating Officer since March
6,  2000.  Prior  to  that  time,  Mr.  Wrenn  was President and Chief Executive
Officer  of  Accent  Health,  Inc., a health care information and media company,
since  June  1996;  from  April  1995 through December 1996, Mr. Wrenn was Chief
Executive  Officer  of  Strategic  Diagnostics  Inc.  (listed  on  NASDAQ: SDIX)
formerly EnSys Environmental Products, Inc.; and from 1991 through March 1995 he
was  President  and Chief Executive Officer of Applied Bioscience International.
Mr.  Wrenn  is a director of Strategic Diagnostics, Inc. and a Trustee of Eckerd
College.  Mr.  Wrenn  has  been  a director of the Company since June 1997.  Mr.
Wrenn  was a member of the Special Committee relating to the sale of the Company
(the "Special Committee (Sale)" from September 1999 until February 2000 when the
Committee  was  dissolved,  and  is  currently  the Vice Chairman of the Special
Committee  (Investigation).

Larry  W.  Singleton,  a  CPA,  became Senior Vice President and Chief Financial
Officer  on  August  17, 2000.  Mr. Singleton is a restructuring advisor who has
served  in  various management and consulting roles to numerous companies during
the  last  17  years.  From  February  2000  through January 2001, Mr. Singleton
served  as  an  investment  committee  member to Revitalizacni Agentura, a.s., a
subsidiary  of  the  Czech  Republic's national bank, formed to assist the Czech
government  in restructuring numerous industrial companies.  Since May 1998, Mr.
Singleton  has  been  a  consultant  to minority shareholders of A. Duda & Sons,
Inc.,  a  privately  owned diversified agribusiness and real estate company.  In
1998  and  2000,  Mr.  Singleton served as an arbitrator in litigation involving
contract disputes.  From February 1999 to July 2000, Mr. Singleton served as the
Executive  Vice  President  of  Gulf  States  Steel,  Inc.  of  Alabama, a fully
integrated  steel mill where he assisted with Chapter 11 reorganization efforts,
including  arranging  pre-filing  debtor-in-possession  financing and developing
various  business  plans.  During  1998, Mr. Singleton served as a member of the
Board  of  Directors of Alliance Entertainment Corp., a wholesale distributor of
pre-recorded  music,  where  he  joined  the  Board  after Chapter 11 filing and
assisted  with  reorganization  efforts.  From  1996 through 1998, Mr. Singleton
served  as  Chief  Executive  Officer,  President  and  Treasurer  of New Energy
Corporation  of  Indiana,  an ethanol production facility where he assisted with
the restructuring of the company without a bankruptcy filing.  From 1995 through
1996,  Mr. Singleton served as a consultant to Apollo Management, L.P., where he
assisted  in  the  financial  evaluation and due diligence efforts in connection
with  the  proposed  acquisition  of  a  European-based  multinational  security
services  company.  During 1995, Mr. Singleton served as a consultant and acting
Chief  Financial Officer of Wellstream Company, L.P., a manufacturer of flexible


                                       48
<PAGE>
pipe  for  the  oil  and  gas industry where he assisted with the evaluation and
ultimate sale of the company.  From 1992 through 1995, Mr. Singleton served as a
member of the Board of Directors, and previously, as Chief Financial Officer, of
Alert  Centre,  Inc., a security services company where he assisted with Chapter
11  reorganization  efforts.

Henry  H.  Taylor became Senior Vice President, General Counsel and Secretary of
the  Company  on  January  9,  2001.  He  had  served as Vice President, General
Counsel  and  Secretary  of the Company since May 15, 1997.  From September 1995
until  May  1997,  Mr.  Taylor  served as Vice President of Legal and Regulatory
Affairs  and  Secretary  of  Laidlaw  Environmental  Services,  Inc.

David  M. Sprinkle became President Chemical Services Division of the Company in
May  2000.  Mr.  Sprinkle  has  been  employed  by  the  Company  or  one of its
subsidiaries  for  more  than  five  years.  Since  August 1, 1995, prior to his
promotion  to  President  Chemical  Services  Division,  he  served  in  various
capacities  including,  as  Senior  Vice  President  of  Operations, Senior Vice
President  of  the  Eastern  Division,  Senior  Vice  President  of the Southern
Division  and  Senior  Vice  President  of  Sales  and  Services.

Roy  D.  Bullinger  became President of Branch Sales and Service Division of the
Company  in  May 2000.  Mr. Bullinger has been employed by the Company or one of
its  subsidiaries for more than five years.  Prior to his promotion to President
of  Branch Sales and Service Division, Mr. Bullinger held the position of Senior
Vice  President  Business  Management.

<TABLE>
<CAPTION>
                                    DIRECTORS OF THE REGISTRANT

CLASS I DIRECTORS - TERMS  TO  EXPIRE  AT  THE  2000  ANNUAL  MEETING.


Name, Present Position(s) and              Age        Principal Occupation or Employment During the Last Five Years,
Term With the Company                                               Directorships of Public Companies
-----------------------------------------  ---  --------------------------------------------------------------------------
<S>                                        <C>  <C>

Henry B. Tippie                             74  For more than five years, Mr. Tippie was Chairman of the Board and
Director of the Company since 1982              President of Tippie Services, a management services company. From
                                                April 2000 until February 26, 2001, he was Chairman of the Board of
                                                Rollins Truck Leasing Corp.  For more than five years prior, he was
                                                Chairman of the Executive Committee and Vice Chairman of the Board
                                                of Rollins Truck Leasing Corp.  Mr. Tippie also is a director of Matlack
                                                Systems, Inc., RPC, Inc., Marine Products Corporation and Rollins Inc.
                                                and he is the Chairman of the Board of Dover Downs Entertainment,
                                                Inc.  Mr. Tippie is the Chairman of the Audit Committee. Mr. Tippie was
                                                a member of Special Committee (Sale) from September 1999 until its
                                                dissolution in February 2000 and is currently a Member of the Special
                                                Committee (Investigation) of the Board.

James L. Wareham                            62  Mr. Wareham has been President of AK Steel Corporation, a steel
Director of the Company since June 1997         manufacturing company, since March 1997.  From 1993 until 1996, he
                                                was President of Wheeling-Pittsburgh Steel Corporation.  Mr. Wareham
                                                is a member of the Audit Committee and the Human Resources and
                                                Compensation Committee.

Peter E. Lengyel                            61  Since 1998, Mr. Lengyel has been a private investor. For more than
Director of the Company since March 2001        three years prior to that, he held Senior Executive positions at Bankers
                                                Trust Company, including Managing Director and Partner and Executive
                                                Vice President and Partner.


                                       49
<PAGE>
CLASS II DIRECTORS - TERMS TO EXPIRE AT THE 2001 ANNUAL MEETING.

Name, Present Position(s) and Term with    Age  Principal Occupation or Employment During the Last Five Years,
the Company                                     Directorships of Public Companies
-----------------------------------------  ---  --------------------------------------------------------------------------

John W. Rollins, Jr.                        58  From January 2000 through February 26, 2001, Mr. Rollins served as
Director of the Company since 1982              President and Chief Executive Officer and a director of Rollins Truck
                                                Leasing Corp.  Prior to January 2000, Mr. Rollins was  President and
                                                Chief Operating Officer and a director of Rollins Truck Leasing Corp for
                                                more than five years.  Mr. Rollins has also served as Chairman of the
                                                Board of Matlack Systems, Inc. for more than five years.  Mr. Rollins
                                                was Senior Vice Chairman of the Board of the Company from 1988 until
                                                May 15, 1997.  Mr. Rollins also is a director of Dover Downs
                                                Entertainment, Inc.  Mr. Rollins is a member of the Human Resources
                                                and Compensation Committee and served as its Chairman from
                                                October 5, 1999 until May 30, 2001.


Robert W. Luba                              59  Mr. Luba has been President of Luba Financial Inc. for
Director of the Company since March 1999        more than five years.  Mr. Luba is also a Director of Luba
                                                Financial Inc., ATS Automation Tooling Systems, Inc.,
                                                Franco-Nevada Mining Corporation, AIM Canada Group
                                                of Mutual Funds, Greenfield B.V., MDS Inc., Diabetogen
                                                Biosciences Inc., and Vincor International Inc.  Until
                                                December 2000, Mr. Luba was a Director of Working
                                                Ventures Canadian Fund Inc.  Mr. Luba is a member of
                                                the Audit Committee and the Human Resources and
                                                Compensation Committee.  Since May 30, 2001, Mr.
                                                Luba has been the Chairman of the Human Resources and
                                                Compensation Committee.  Mr. Luba was a member of
                                                Special Committee (Sale) from September 1999 until its
                                                dissolution in February 2000 and is currently a Member of
                                                the Special Committee (Investigation) of the Board.

Grover C. Wrenn                                 See "Executive Officers of the Registrant" above.
Director of the Company since July 1997


CLASS III DIRECTORS - TERMS  TO EXPIRE AT THE 2002 ANNUAL MEETING.

Name, Present Position(s) and              Age  Principal Occupation or Employment During the Last Five Years,
Term With the Company                           Directorships of Public Companies
-----------------------------------------  ---  --------------------------------------------------------------------------
David E. Thomas                                 See "Executive Officers of the Registrant" above.
Director of the Company since June 1997

Kenneth K. Chalmers                         71  Since 1997, Mr. Chalmers has been a business consultant and director of
Director of the Company since May 4, 2000       various organizations.  From 1994 to 1998, he served as a Trustee of First
                                                Union Real Estate Equity and Mortgage Investments. He is a member of
                                                the Board of Directors of Learning Insights, Inc., a publisher of
                                                interactive multimedia training and reference products.  From 1997 to
                                                1998, he was a director of Profile Systems, LLC, a provider of wireless
                                                data communications services.  He is an Advisory Board Member of
                                                Magnify, Inc. and Advisor to Paradigm Capital Ltd.  Mr. Chalmers also
                                                serves as a Director of Catholic Health Partners and Chairman of its
                                                Finance/Audit Committee.  He is Vice Chairman and Member of the
                                                Executive Committee of Catholic Heath Partners Foundation and Member
                                                of the Alumni Advisory Board of the Kellogg Graduate School of
                                                Management, Northwestern University.  Mr. Chalmers is a member of the
                                                Special Committee (Investigation) of the Board.


                                       50
<PAGE>
David W. Wallace                            77  Mr. Wallace served as the Chairman of the Board and CEO of Lone Star
Director of the Company since March 2001        Industries from January 1990 until November 1999.  Currently, he is
                                                President and a Trustee of the Robert R. Young Foundation and a
                                                member of the Board of Governors of The New York Hospital. He is also
                                                a member of the Board of Greenwich Hospital.  Mr. Wallace became a
                                                member of the Human Resources and Compensation Committee on May
                                                30, 2001.

Ronald A. Rittenmeyer                       53  Since January 1, 2001, Mr. Rittenmeyer has been the Plan Administrator
Director of the Company since April 17,         for AFD Fund. From February 14, 2000, through January 1, 2001, he was
2001                                            President and CEO and a member of the Board of AmeriServe, where he
                                                assisted in the restructuring of the Company which filed for protection
                                                under Chapter 11 of the Bankruptcy Code on January 31, 2000. From
                                                September 1998 through February 2000, he was Chairman, President and
                                                CEO of RailTex, Inc.  From March 1997 through August 1998, he was
                                                President and COO of Ryder TRS. From January 1997 through March
                                                1997, he was a Principal of Jay Alix and Associates, and from November
                                                1995 through November 1996, he was President and COO of Merisel.
                                                Mr. Rittenmeyer also serves as a trustee of Greenhill School in Dallas,
                                                Texas, and the Wyoming Seminary Prep School in Kingston,
                                                Pennsylvania.  Mr. Rittenmeyer became a member of the Human
                                                Resources and Compensation Committee on May 30, 2001.
</TABLE>

INVOLVEMENT  IN  CERTAIN  LEGAL  PROCEEDINGS

The  executive  officers  of the Company are also officers of one or more of the
subsidiaries  of  the  Company.  Safety-Kleen  Corp.  and 73 of its subsidiaries
simultaneously  filed  for protection under Chapter 11 of the Bankruptcy Code as
more specifically described in Part I, Item 3 (Legal Proceedings) of this Report
on  Form  10-K/A.  All  of the executive officers of the Company are or were, at
the  time  of  the  bankruptcy  filings,  officers  of  at  least  one  of these
subsidiaries  with  the exception of Mr. Singleton who was not an officer of the
Company  or  any  of  its  subsidiaries  at  the time of the bankruptcy filings.

From February 1999 until July 2000, Mr. Singleton was employed as Executive Vice
President  of  Gulf States Steel, Inc. of Alabama to assist in the restructuring
of  Gulf  States  which  filed for protection under Chapter 11 of the Bankruptcy
Code  after  arranging  for  debtor-in-possession  financing.

             SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Pursuant  to  Section  16  of the Securities Exchange Act of 1934, directors and
executive  officers  of  the Company and beneficial owners of 10% or more of the
Common  Stock  are  required  to  file  reports with the Securities and Exchange
Commission  indicating  their  holdings of and transactions in the Common Stock.
To  the  Company's  knowledge,  based  solely  on a review of the copies of such
reports  furnished  to  the  Company  and  written representations that no other
reports  were  required,  all  such  persons  have complied with all such filing
requirements  with respect to fiscal year ended August 31, 2000, except that the
following  former officers or directors, Paul Humphreys, Kenneth Winger, Michael
Bragagnolo,  James  R.  Bullock,  Peter Widdrington and John R. Grainger did not
provide  the Company with a copy of a Form 5 for the year ended August 31, 2000,
and  made  no  representation to the Company that such filing was not necessary.


                                       51
<PAGE>
ITEM  11.   EXECUTIVE  COMPENSATION

                   COMPENSATION OF EXECUTIVE OFFICERS AND DIRECTORS

COMPENSATION  OF  EXECUTIVE  OFFICERS

The  following  table  sets forth the compensation paid to the Company's current
and  former  Chief  Executive  Officer,  each  of  its  four  other  most highly
compensated  executive officers who were serving as executive officers on August
31, 2000, and two additional individuals who were no longer serving as executive
officers  on  August  31,  2000  (the  "Named Executive Officers"), for services
rendered  to  the  Company  during  fiscal years ended August 31, 2000, 1999 and
1998.

<TABLE>
<CAPTION>
                                          SUMMARY COMPENSATION TABLE

                                                                   Long-term Compensation
                                          Annual Compensation             Awards
                                     ----------------------------  ----------------------
               (a)                    (b)      (c)         (d)              (g)                    (j)
                                            ----------             Securities Underlying        All Other
Name and Principal Position           FY    Salary($)   Bonus($)        Options (#)        Compensation($)(2)
-----------------------------------  -----  ----------  ---------  ----------------------  -------------------
<S>                                  <C>    <C>         <C>        <C>                     <C>
David E. Thomas, Jr.                  2000  $  400,286       0(3)                       0  $           171,250
Chairman of the Board, Chief
Executive Officer and Director (1)    1999          --        --                       --                   --

                                      1998          --        --                       --                   --
Grover C. Wrenn                       2000  $  365,671  $ 50,000                        0  $           197,735
President and Chief Operating
Officer (1)                           1999          --        --                       --                   --

                                      1998          --        --                       --                   --
Henry H. Taylor                       2000  $  197,000  $ 50,000                        0  $            15,244
Senior Vice President and General
Counsel and Secretary                 1999  $  191,654  $ 66,882                   10,000  $            24,277

                                      1998  $  173,750  $ 74,799                    5,000  $            14,558
David M. Sprinkle                     2000  $  248,115  $100,000                        0  $            19,455
President Chemical Services
Division                              1999          --        --                       --                   --

                                      1998          --        --                       --                   --
Roy D. Bullinger                      2000  $  205,769  $110,000                        0  $            35,089
President Branch Sales and Service
Division                              1999          --        --                       --                   --

                                      1998          --        --                       --                   --
Kenneth W. Winger                     2000  $  478,154         0                        0  $            29,739
Former President, Chief Executive
Officer and Director (4)              1999  $  504,180  $293,033                   62,500  $            24,041

                                      1998  $  441,667  $325,000                   62,500  $            17,943
Michael J. Bragagnolo,                2000  $  311,000         0                        0  $            20,255
Former Executive Vice President
and Chief Operating Officer  (5)      1999  $  302,590  $150,835                   37,500  $            22,132

                                      1998  $  273,750  $168,356                   37,500  $            16,848
Paul R. Humphreys  (4)                2000  $  240,000         0                        0  $            17,092
Former Senior Vice President of
Finance and Chief Financial           1999  $  252,500  $100,880                   30,000  $            22,114
Officer
                                      1998  $  220,333  $108,404                   15,000  $            14,602
</TABLE>


                                       52
<PAGE>
(1)  Prior  to  becoming  employees,  Messrs. Thomas and Wrenn were non-employee
     directors  of  the  Company and as such qualified for non-employee director
     compensation. During fiscal year 2000, Mr. Thomas earned $63,370 total cash
     compensation for service as a nonemployee director. This amount is included
     in  his total other compensation. During fiscal year 2000, Mr. Wrenn earned
     $87,000 total cash compensation for service as a nonemployee director. This
     amount  is  included  in  his total other compensation. Messrs. Thomas' and
     Wrenn's  employment  agreements  provide  that  the effective date of their
     employment  with  the  Company  was  March  6,  2000.

(2)  Amounts  shown  for  2000  consist  of (i) Mr. Thomas: premiums on life and
     accidental  death  insurance  policies  of $775, living expenses of $8,845,
     professional  fees  in the amount of $2,760, transportation expenses in the
     amount  of  $95,225  and  Club  dues in the amount of $275; (ii) Mr. Wrenn:
     premiums  on  life  and accidental death insurance policies of $759, living
     expenses  of  $9,056, transportation expenses in the amount of $100,100 and
     Club dues in the amount of $820; (iii) for Mr. Taylor: premiums on life and
     accidental  death  insurance policies of $762, Company contributions to and
     other  allocations  under  the  Safety-Kleen Corp. 401(k) Savings Plan (the
     "401(k)  Plan")  of $3,712, a $9,000 automobile allowance, and club dues in
     the  amount  of  $1,770; (iv) Mr. Sprinkle: premiums on life and accidental
     death  insurance  policies  of  $964,  Company  contributions  to and other
     allocations under the 401(k) Plan of $7,649, a $9,000 automobile allowance,
     and  club dues in the amount of $1,842; (v) Mr. Bullinger: premiums on life
     and  accidental  death insurance policies of $793, Company contributions to
     and  other allocations under the 401(k) Plan of $7,745, a $2,077 automobile
     allowance,  relocation  expenses  of $23,674 and club dues in the amount of
     $800;  (vi) for Mr. Winger: premiums on life and accidental death insurance
     policies of $1,837, Company contribution to and other allocations under the
     401(k)  Plan  of  $7,043, an $11,077 automobile allowance, club dues in the
     amount  of  $480, and personal use of the Company airplane in the amount of
     $9,302;  (vii)  for  Mr.  Bragagnolo: premiums on life and accidental death
     insurance  policies  of  $1,203,  Company  contributions  to  and  other
     allocations under the 401(k) Plan of $7,649, a $10,380 automobile allowance
     and  club  dues  in  the  amount  of  $1,023; and (viii) for Mr. Humphreys:
     premiums  on  life and accidental death insurance policies of $922, Company
     contributions  to and other allocations under the 401(k) Plan of $7,043, an
     $8,308  automobile  allowance  and  club  dues  in  the  amount  of  $819.

     Amounts  shown  for  1999  consist  of (i) for Mr. Winger: premiums on life
     insurance policies of $1,935, Company contribution to and other allocations
     under  the 401(k) Plan of $10,644 and an $11,462 automobile allowance; (ii)
     for  Mr. Bragagnolo: premiums on life insurance policies of $1,179, Company
     contributions to and other allocations under the 401(k) Plan of $11,039 and
     a  $9,914  automobile  allowance; (iii) for Mr. Humphreys: premiums on life
     insurance  policies of $984, Company contributions to and other allocations
     under  the  401(k)  Plan of $11,134, preparation of personal tax returns of
     $1,400  and  an  $8,596  automobile  allowance;  and  (iv)  for Mr. Taylor:
     premiums  on  life insurance policies of $747, Company contributions to and
     other allocations under the 401(k) Plan of $9,934, professional services of
     $4,950  and  an  $8,596  automobile  allowance.

(3)  Mr.  Thomas  voluntarily waived his participation in fiscal year 2000 bonus
     plan.

(4)  Resigned  as  an  executive  officer  in  May  2000. The Company terminated
     employment  of  Messrs.  Winger  and  Humphreys  on  July  27,  2000.

(5)  Resigned  as  an  executive  officer  in  May  2000. The Company terminated
     employment  of  Mr.  Bragagnolo on July 27, 2000, which became effective on
     August  26,  2000.


                                       53
<PAGE>
<TABLE>
<CAPTION>
          AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION VALUES(1)

         (a)                             (d)                                (e)
                           NUMBER OF SECURITIES UNDERLYING   VALUE OF UNEXERCISED IN-THE-MONEY
                          UNEXERCISED OPTIONS AT FY-END (#)        OPTIONS AT FY-END ($)
NAME                          EXERCISABLE/UNEXERCISABLE          EXERCISABLE/UNEXERCISABLE
------------------------  ---------------------------------  ----------------------------------
<S>                       <C>                                <C>
David E. Thomas, Jr. (2)                       5,000/10,000                                 0/0
Grover C. Wrenn (2)                            5,000/10,000                                 0/0
Henry H. Taylor                                7,000/13,000                                 0/0
David M. Sprinkle                             18,000/27,000                                 0/0
Roy D. Bullinger                               9,000/21,000                                 0/0
Kenneth W. Winger                            75,000/112,500                                 0/0
Michael J. Bragagnolo                         45,000/67,500                                 0/0
Paul R. Humphreys                             21,000/39,000                                 0/0
</TABLE>

(1)  There  were  no  Option  Grants  in  Fiscal  Year  2000.

(2)  The  Options listed in column (d) above represent options issued to Messrs.
     Thomas  and  Wrenn  under  the  Director  Stock  Option Plan when they were
     non-employee  directors  of  the  Company.

DEFINED  BENEFIT  PLANS

Effective  as  of October 14, 1997, the Company adopted a Supplemental Executive
Retirement  Plan  (the  "SERP")  for  certain  eligible employees.  A SERP is an
unfunded  plan  which provides for benefit payments in addition to those payable
under  a  qualified  retirement  plan.

The  following table shows the estimated annual benefits payable upon retirement
at  normal  retirement  date  under  the  SERP.

                  SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN TABLE

FINAL AVERAGE PAY                  SERVICE YEARS
------------------  -------------------------------------------
                      15       20       25       30       35
                    -------  -------  -------  -------  -------

250,000              45,000   60,000   75,000   90,000  105,000
300,000              56,250   75,000   93,750  112,500  131,250
350,000              66,750   89,000  111,250  133,500  155,750
400,000              78,000  104,000  130,000  156,000  182,000
450,000              89,250  119,000  148,750  178,500  208,250
500,000             100,500  134,000  167,500  201,000  235,500
550,000             111,750  149,000  186,250  223,500  260,750
600,000             123,000  164,000  205,000  246,000  287,000
650,000             134,250  179,000  223,750  268,500  313,250
700,000             145,500  194,000  242,500  291,000  339,500
750,000             156,750  209,000  261,250  313,500  365,750
800,000             168,000  224,000  280,000  336,000  392,000
850,000             179,250  239,000  298,750  358,500  418,250
900,000             190,500  254,000  317,500  381,000  445,500
950,000             201,750  269,000  336,250  403,500  470,750
1,000,000           213,000  284,000  355,000  426,000  497,000

For  the  Company's  current  executive  officers, the compensation shown in the
columns  labeled  "Salary"  and  "Bonus"  of  the  Summary Compensation Table is
covered  by  the  SERP.  As of August 31, 2000, Messrs. Taylor and Sprinkle  had
five years of credited service under the SERP and Mr. Bullinger had two years of
credited  service under the SERP.  Benefits under the SERP are computed based on
a straight-life annuity.  The amounts in this table are subject to deduction for
a  portion  of  Social  Security  benefits.


                                       54
<PAGE>
EMPLOYMENT  CONTRACTS  CHANGE  IN  CONTROL  ARRANGEMENTS

The  Company  has  entered  into  an  Employment  Agreement with each of Messrs.
Thomas,  Wrenn  and  Singleton.

The  Employment Agreement with Mr. Thomas (the "Thomas Agreement") provides that
for  the  term of the Thomas Agreement (March 6, 2000, through March 6, 2002) he
shall  serve  as  the  Chairman of the Board of Directors of the Company and the
Chief  Executive  Officer  of  the  Company.  During  the  term  of  the  Thomas
Agreement, Mr. Thomas shall receive an annual base salary of $800,000 reduced by
the  aggregate  amount of compensation received from Raymond James & Associates,
Inc. attributable to services performed during the period subsequent to March 6,
2000.  If  Mr.  Thomas  is  employed  by  the  Company  on  the  date  a plan of
reorganization  for the Company is consummated in connection with any Chapter 11
bankruptcy  or similar proceeding or on the date of the consummation of the sale
of  substantially  all of the assets of the Company, then within 15 days of such
consummation or sale, the Company shall pay to Mr. Thomas a bonus of $1,500,000.
Mr.  Thomas  is  also  eligible  to  receive  discretionary  bonuses  as  may be
determined  by the Human Resources and Compensation Committee of the Board.  The
Thomas  Agreement also provides that Mr. Thomas shall be entitled to participate
in  all  applicable  fringe  benefit  and  perquisite  programs  and savings and
retirement  plans (other than the SERP), practices, policies and programs of the
Company  to  the  same extent such benefits were provided to the Chief Executive
Officer  immediately prior to March 6, 2000, or are otherwise generally provided
to  other  senior executives of the Company.  The Thomas Agreement also provides
for  indemnification,  reimbursement  of  legal  fees  in  connection  with  the
preparation  of the Thomas Agreement, up to $3,500 per month for living expenses
and  $25,000  per year for taxation on transportation.  If the employment of Mr.
Thomas  is  terminated  by the Company other than for "Cause" (as defined in the
Thomas Agreement), death or disability or expiration of the Thomas Agreement, or
if  Mr.  Thomas  terminates  his employment for "Good Reason" (as defined in the
Thomas  Agreement),  the  Company  shall pay an amount equal to Mr. Thomas' then
current annual base Salary (without giving effect to reductions thereto) and any
unpaid  amounts  of the then current annual base salary and other amounts earned
through  the  date  of  termination.  If  such  termination  is  other  than the
expiration  of the Term, during the second year following termination Mr. Thomas
shall  also  receive  monthly  payments equal to 1/12 of the then current annual
base salary (which amount shall be reduced by the amount of any salary earned by
Mr.  Thomas  during  such  month).  The Company shall also pay or provide to Mr.
Thomas,  on  or  following  such  a  termination, any earned and unpaid bonuses,
previously  deferred  compensation  and benefits payable to Mr. Thomas under the
terms  of  the Company's qualified pension plans.  For a period not to exceed 18
months  following  the  date of termination or the expiration of the term of the
Thomas  Agreement,  and only until Mr. Thomas obtains full replacement coverage,
the Company shall reimburse  Mr. Thomas for the cost of any premiums paid by Mr.
Thomas pursuant to his (or any of his eligible dependent's) election to have the
Company  provide  "continuation coverage" under the Company's group health plan.

The  Employment  Agreement  with Mr. Wrenn (the "Wrenn Agreement") provides that
for  the  term  of  the Wrenn Agreement (March 6, 2000 through March 6, 2002) he
shall  serve  the President and Chief Operating Officer  of the Company.  During
the term of the Wrenn Agreement Mr. Wrenn shall receive an annual base salary of
$650,000.  If  Mr.  Wrenn  is  employed  by  the  Company  on the date a plan of
reorganization  for the Company is consummated in connection with any Chapter 11
bankruptcy  or similar proceeding or on the date of the consummation of the sale
of  substantially  all of the assets of the Company, then within fifteen days of
such  consummation  or  sale,  the  Company  shall  pay  to Mr. Wrenn a bonus of
$1,250,000.  Mr.  Wrenn is also eligible to receive discretionary bonuses as may
be  determined  by  the Human Resources and Compensation Committee of the Board.
The  Wrenn  Agreement  also  provides  that  Mr.  Wrenn  shall  be  entitled  to
participate in all applicable fringe benefit and perquisite programs and savings
and  retirement plans (other than the SERP), practices, policies and programs of
the  Company  to  the  same  extent  such  benefits  were  provided to the Chief
Operating  Officer immediately prior to March 6, 2000 or are otherwise generally
provided  to  other  senior executives of the Company.  The Wrenn Agreement also
provides for indemnification, reimbursement of legal fees in connection with the
preparation  of  the Wrenn Agreement, up to $3,500 per month for living expenses
plus  $25,000 per year for taxation on transportation.  If the employment of Mr.
Wrenn  is  terminated  by  the Company other than for "Cause" (as defined in the
Wrenn  Agreement),  death or disability or expiration of the Wrenn Agreement, or
if  Mr.  Wrenn  terminates  his  employment for "Good Reason" (as defined in the
Wrenn  Agreement),  the  Company  shall  pay an amount equal to Mr. Wrenn's then
current annual base salary (without giving effect to reductions thereto) and any
unpaid  amounts  of  the annual base salary and other amounts earned through the
date  of  termination.  If  such termination is other than the expiration of the
Term,  during the second year following termination Mr. Wrenn shall also receive
monthly  payments  equal  to  1/12 of the then current annual base salary (which
amount  shall  be reduced by the amount of any salary earned by Mr. Wrenn during
such  month).  The  Company  shall  also  pay  or  provide  to  Mr. Wrenn, on or
following such a termination, any earned and unpaid bonuses, previously deferred
compensation  and benefits payable to Mr. Wrenn under the terms of the Company's
qualified  pension  plans.  For  a  period not to exceed 18 months following the
date  of  termination  or the expiration of the term of the Wrenn Agreement, and
only  until  Mr.  Wrenn  obtains  full  replacement  coverage, the Company shall
reimburse  Mr.  Wrenn for the cost of any premiums paid by Mr. Wrenn pursuant to
his  (or  any  of his eligible dependent's) election to have the Company provide
"continuation  coverage"  under  the  Company's  group  health  plan.


                                       55
<PAGE>
The Employment Agreement with Mr. Singleton (the "Singleton Agreement") provides
that  for  the  term of the Singleton Agreement (July 17, 2000, through July 17,
2002) he shall serve as the Senior Vice President and Chief Financial Officer of
the  Company.  During  the  term of the Singleton Agreement, Mr. Singleton shall
receive  an annual base salary of $600,000.  If Mr. Singleton is employed by the
Company  on  the date a plan of reorganization for the Company is consummated in
connection  with  any Chapter 11 bankruptcy or similar proceeding or on the date
of  the  consummation  of  the  sale  of  substantially all of the assets of the
Company,  then  within  fifteen  days  of such consummation or sale, the Company
shall  pay to Mr. Singleton a bonus of $500,000.  Mr. Singleton is also eligible
to receive discretionary bonuses as may be determined by the Board of Directors.
The  Singleton  Agreement  also provides that Mr. Singleton shall be entitled to
participate in all applicable fringe benefit and perquisite programs and savings
and  retirement plans (other than the SERP), practices, policies and programs of
the  Company  to  the  same  extent  such  benefits  were  provided to the Chief
Financial  Officer  of  the  Company  immediately  prior  to March 6, 2000.  The
Singleton  Agreement  also  provides for indemnification, up to $3,500 per month
for  living  expenses,  $25,000  per  year  for  taxation on transportation, and
$100,000  for  relocation  expenses.  If  the  employment  of  Mr.  Singleton is
terminated  by  the  Company other than for "Cause" (as defined in the Singleton
Agreement),  death  or disability, or if Mr. Singleton terminates his employment
for  "Good Reason," (as defined in the Singleton Agreement), or if the Singleton
Agreement  is not renewed upon expiration of the term, the Company shall pay Mr.
Singleton $500,000 not later than thirty days following the date of termination.

Each  of  the other three named executive officers, Messrs. Taylor, Sprinkle and
Bullinger,  has entered into a Senior Executive Change of Control Agreement with
the  Company.  The  Senior  Executive Change of Control Agreements supersede any
prior  agreement  between  the  executive officer and the Company which provides
benefits upon a change in control of the Company and further provide that if the
officer's  employment  is  terminated  as  a result of a "Change in Control" (as
defined  in the Agreements), he will receive his then current annual base salary
for  three years plus a guaranteed bonus of 40% of salary for Mr. Taylor, 50% of
salary  for Mr. Sprinkle and 50% of salary for Mr. Bullinger.  In addition, each
Executive Officer would receive three years continuation of disability, life and
health  insurance  and  other fringe benefits and perquisites in accordance with
the  most  favorable  Plans  applicable  to peer executives of the Company.  The
Agreements  provide  that  the  executive  officer  shall be entitled to accrued
benefits  under  the  SERP  or  any such successor plan, irrespective of whether
vested  and  without any reduction for early retirement, early payout and social
security  benefits  and  taking  into  account for benefit accrual purposes, the
executive  officer's  entire  period  of  service  with  the  Company  and  its
affiliates.  All  of the Agreements provide that for purposes of determining the
pension  entitlement under the SERP each Executive Officer would fully vest with
three  additional  years.  The  Agreements further provide that the Company will
pay a lump-sum cash payment equal to the spread (fair market value over exercise
price)  of  all  outstanding options granted whether vested or not vested on the
date  of  termination  following  a  Change  in  Control.

The  Company also had Termination of Employment and Change in Control Agreements
with  Messrs.  Winger, Bragagnolo and Humphreys. The Agreements provided that if
the  officer's  employment was terminated as a result of a change in control, he
would  receive  a  lump  sum payment equal to (i) three times his highest annual
salary  and  bonus  during the previous three fiscal years plus (ii) three times
the  cash  equivalent  value  of the perquisites in effect as of the date of the
change  in  control.  In  addition,  each  employee  would  receive  three years
continuation  of  disability,  life and health insurance.  All of the Agreements
provided that for purposes of determining the pension entitlement under the SERP
each  officer  would  fully  vest  with  three additional years.  The agreements
further  provide that all stock options granted to such persons would fully vest
and  lapse  if not exercised within 90 days following the employment termination
date.  These  Agreements  were  terminated upon the termination of employment of
these  former  officers and no payments were made to these former officers under
the  Agreements.

SEVERANCE  PLAN  AND  RETENTION  PLAN

Messrs.  Taylor,  Sprinkle  and Bullinger are currently the only Named Executive
Officers  eligible to participate in the Senior Executive Retention Plan and the
Senior  Executive  Severance Plan.  The Senior Executive Severance Plan provides
that  if  the  officer  is  terminated  by the Company without "Cause" or by the
Senior  Executive for "Good Reason" (as such terms are defined in the Plan) they
shall  be  entitled  to two years base salary and benefits, 30% of which will be
paid  to  the officer upon termination.  If the officer remains unemployed after
7.2  months,  the  officer  will return to normal payroll until such time as the
officer  is  employed, subject to a maximum severance and benefit payment of the
remaining  16.8  months.  The  officer will be entitled to outplacement benefits
with  a  cap  of  $25,000.

The  Senior  Executive  Retention  Plan provides that if the officer is actively
employed  by the Company or its subsidiaries from the date of September 8, 2000,
through  December  31,  2001  (the  "Retention Period"), (except in the event of
death,  permanent disability, or a termination without "Cause" or by the officer
for  "Good  Reason"  (as such terms are defined in the Plan), the officer or the
officer's  estate  will  receive a prorated portion of the full award based upon
the  number  of  days  during the Retention Period that the officer was actively
employed) then the officer will receive a retention award equal to 52.89% of the
officer's  annual  base  salary  amount  as  of  September  8,  2000.


                                       56
<PAGE>
COMPENSATION  OF  DIRECTORS

During  fiscal  year  2000, each director who was not an employee of the Company
was  paid an annual retainer of $10,000 (the "Annual Retainer").  Currently each
director that is not an employee of the Company is to be paid an annual retainer
of  $20,000  plus $750 for each Board of Directors meeting attended plus expense
reimbursement.  A  non-employee  Chairman  of  the  Board  is paid an additional
$12,000  annually  and  non-employee  Committee  Chairmen,  unless  otherwise
specified,  are  paid an additional $4,000 annually. Non-employee directors were
paid  $750  for  each  meeting  that  they  attended  of the Human Resources and
Compensation  Committee  and  the Audit Committee.  During fiscal year 2000, the
directors  on  the Special Committee (Sale) and the Executive Committee, both of
which are no longer active committees, were paid $750 per meeting attended.  The
Chairman  of  the  Special  Committee  (Sale) was paid $1,000 for each committee
meeting which he attended and each non-employee director who was a member of the
Special Committee (Sale) received $20,000 additional remuneration.  Non-employee
directors  who  are  members  of  the  Special Committee (Investigation) receive
$1,000 for each meeting that they attend.  The Chairman and Vice Chairman of the
Special  Committee  (Investigation) received $50,000 additional remuneration and
the  other  members  of  the  Special Committee (Investigation) received $25,000
additional  remuneration.

Prior  to fiscal year 2000, pursuant to the Company's Nonemployee Director Stock
plan,  50%  of the Annual Retainer for each nonemployee director, as well as 50%
of  the  additional  annual  amount  paid to Chairman of the Board and Committee
Chairman  were  paid  in  shares of Common Stock.  Shares issued under this Plan
were  subject  to  a  one  year  vesting period.  On January 4, 2000, as partial
consideration  to  nonemployee  directors  for  the  period December 1, 1998, to
November 30, 1999, 5,621 shares of Common Stock were issued under this Plan.  No
other  shares  of  Common  Stock  will  be  issued  under  this  Plan as partial
consideration  for  the remainder of fiscal year 2000. In addition, the Plan was
terminated  on  September  1,  2000.

The  Company  also  maintains  a  Directors Stock Option Plan.  Under such Plan,
options  become  exercisable  at  the rate of 20% per year, on or about one year
after the date of grant, with all options becoming fully vested on or about five
years  after  the date of grant. There were no grants of options under this Plan
in  fiscal  year  2000.

Directors who are also employees of the Company receive no separate compensation
for  serving  as  directors.

           COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

COMMITTEE  MEMBERS

During  fiscal  year ended August 31, 2000, the Human Resources and Compensation
Committee  held  primary  responsibility  for determining executive compensation
levels.  Robert  W.  Luba-Chairman  of the Committee, James L. Wareham, David W.
Wallace,  Ronald  A.  Rittenmeyer  and  John  W.  Rollins, Jr. (Messrs. Luba and
Wareham  began serving on this Committee on August 24, 2000, and Messrs. Wallace
and Rittenmeyer began serving on this committee on May 30, 2001) are the members
of  the  Human  Resources and Compensation Committee. David E. Thomas, Jr. was a
member  of this Committee until the date that he became Chairman of the Board of
Directors.  John  W. Rollins, Jr. served as Chairman of this committee until May
30,  2001.  Certain matters relating to executive compensation are determined by
the  Board  of  Directors  as  a  whole.

RAYMOND  JAMES  &  ASSOCIATES,  INC.

Mr. Thomas was Senior Managing Director and Head of the Investment Banking Group
of  Raymond  James  &  Associates, Inc. During fiscal year 2000, Raymond James &
Associates,  Inc.  had acted as financial advisor and in other capacities to the
Company  for  various matters, including acquisitions, divestitures and security
offerings,  and  it  is  not expected to continue to act in such capacity in the
future,  unless  otherwise approved by the Board of Directors and the Bankruptcy
Court.  Mr. Thomas had entered into an agreement with Raymond James & Associates
for  a leave of absence from his employment with them.  The agreement expired on
November  15,  2000.  In  December 2000, the agreement was extended to expire in
May  2001  and  in  June 2001, the agreement was extended to expire in  December
2001.

ROLLINS  TRUCK  LEASING  CORP.

Until  February  26,  2001, Mr. Tippie was Chairman of the Board and Chairman of
the  Executive  Committee  of Rollins Truck Leasing Corp. and until February 26,
2001,  Mr.  Rollins  was  President and Chief Executive Officer of Rollins Truck
Leasing  Corp.  During  fiscal year 2000, the Company paid Rollins Truck Leasing
Corp. approximately $1.2 million for truck rentals.  Rollins Truck Leasing Corp.
also  purchases  certain  supplies  from  the  Company.  During fiscal year 2000
Rollins  Truck  Leasing  paid  approximately  $344,000  to the Company for these
supplies.  In  addition,  the Company has guaranteed approximately $5,400,000 in
lease  payments  for  vehicles  leased  by  Rollins  Truck  Leasing  Corp.  to a
subcontractor  of  the  Company.


                                       57
<PAGE>
MATLACK  SYSTEMS,  INC.

Mr.  Tippie  is  a  director  and  shareholder  of Matlack Systems, Inc. and Mr.
Rollins, Jr. is Chairman of the Board and a shareholder of Matlack Systems, Inc.
During  fiscal  year  2000, the Company paid Matlack Systems, Inc. approximately
$378,000  on  account  of  transportation  services.  Matlack Systems, Inc. also
purchased  supplies  and/or services from the Company.  During fiscal year 2000,
Matlack  Systems,  Inc.  paid  the  Company  approximately  $615,000.

ITEM  12.   SECURITY  OWNERSHIP  OF  CERTAIN  BENEFICIAL  OWNERS  AND MANAGEMENT

BENEFICIAL  OWNERS  OF  FIVE  PERCENT  OR  MORE  OF  THE  COMMON  STOCK

The  following  table sets forth the only stockholder which, to the knowledge of
management of the Company, was a beneficial owner of five percent or more of the
outstanding  shares  of  Common Stock as of April 30, 2001. The shareholdings of
Laidlaw  Inc.  reported  are  based  on  information  provided  by the Company's
transfer  agent  and  confirmation  with  Laidlaw  Inc.

                          AMOUNT AND NATURE OF
NAME                      BENEFICIAL OWNERSHIP  PERCENT OF CLASS
------------------------  --------------------  ----------------

Laidlaw Inc. (1)           43,846,287            43.5%
3221 North Service Road
Burlington, Ontario
CANADA  L7R3Y8

(1)  All  of  the shares of Common Stock shown as owned by Laidlaw Inc. are held
     of record by Laidlaw Finance (Barbados) Ltd. except for 31 shares which are
     held  by Laidlaw Transportation, Ltd. and 2,000,000 shares held by American
     National  Insurance.

STOCK  OWNERSHIP  OF  THE  COMPANY'S  DIRECTORS, NOMINEES AND EXECUTIVE OFFICERS

Except  as  otherwise noted, the following table sets forth, except as otherwise
noted  below,  as  of  May  31,  2001,  the  number  of  shares  of Common Stock
beneficially  owned  by  (i)  each  of  the  Company's directors, (ii) the Named
Executive Officers and (iii) all directors and executive officers of the Company
as  a group.  Except as indicated below, each person identified in the following
table  has  sole  voting  and investment power with respect to the shares shown.
Shares  shown  may  include  options exercisable as of May 31, 2001 or within 60
days  of  such  date.

                                AMOUNT AND NATURE OF   PERCENT OF CLASS
NAME                                 OWNERSHIP        BENEFICIALLY OWNED
------------------------------  --------------------  ------------------

Kenneth K. Chalmers                               --                   *
Peter E. Lengyel                                  --                   *
Robert W. Luba  (1)                            8,430                   *
Ronald A. Rittenmeyer                             --                   *
John W. Rollins, Jr. (2), (3)                 50,918                   *
David E. Thomas, Jr. (2)                       9,363                   *
Henry B. Tippie (2), (4)                     334,458                   *
David W. Wallace                                  --                   *
James L. Wareham (2)                           9,613                   *
Grover C. Wrenn (2)                           13,113                   *
Roy D. Bullinger (5)                          17,500                   *
David M. Sprinkle (6)                         27,000                   *
Henry H. Taylor (7), (8)                      12,338                   *
Kenneth W. Winger (9)                         62,500                   *
Michael J. Bragagnolo (9)                     37,500                   *
Paul R. Humphreys (9)                         30,000                   *

All directors and
executive officers as a group
(14 persons)(10)                             482,733                   *


                                       58
<PAGE>
*    Signifies  less  than  1%

(1)  Includes  3,000  shares  issuable  upon exercise of options pursuant to the
     Directors  Stock  Option  Plan.

(2)  Includes  8,000  shares  issuable  upon exercise of options pursuant to the
     Directors  Stock  Option  Plan.

(3)  Does  not  include  1,547  shares  owned  by Mr. Rollins' wife, as to which
     shares  Mr.  Rollins  disclaims  any  beneficial  ownership.

(4)  Does  not  include  195,644 shares held by Mr. Tippie as Co-Trustee, all of
     which  he  disclaims  any beneficial ownership of; Includes 7,500 shares in
     which  a wholly owned corporation over which he has sole voting power has a
     beneficial  partnership  interest  of  75 shares and voting rights on 7,500
     shares.  Does  not  include  5,750 shares owned by Mr. Tippie's wife, as to
     which  shares  Mr.  Tippie  disclaims  any  beneficial  ownership. Does not
     include  757,000  shares  owned  by  the Estate of John W. Rollins, Sr. for
     which  Mr.  Tippie  is  the  Executor.  Mr. Tippie disclaims any beneficial
     ownership  interest  with  respect  to  those  shares.

(5)  Includes  15,000  shares  issuable upon exercise of options pursuant to the
     1997  Stock  Option  Plan.

(6)  Represents  shares  issuable  upon exercise of options pursuant to the 1997
     Stock  Option  Plan.

(7)  Includes  11,000  shares  issuable upon exercise of options pursuant to the
     1997  Stock  Option  Plan.

(8)  Includes holdings of Common Stock held through the Company's 401(k) Plan as
     of  August  31,  2000.

(9)  Shares  shown  are  reported on Forms 4 and 5 filed with the Securities and
     Exchange  Commission.  The  date of the most recent filings are October 12,
     1999  for  Mr.  Winger,  October 5, 1999 for Mr. Bragagnolo and October 13,
     1999  for  Mr.  Humphreys.

(10) Excludes  Messrs.  Winger,  Bragagnolo  and Humphreys, whose employment was
     terminated  by  the  Company  in July 2000. Includes 96,000 shares issuable
     upon  exercise  of  options.

ITEM  13.  CERTAIN  RELATIONSHIPS  AND  RELATED  TRANSACTIONS

In  addition  to  the  transactions  described  below  see also the transactions
described  in  "Compensation  Committee Interlocks and Insider Participation" in
Item  11  of  Part  III.

LAIDLAW  INC.  RELATIONSHIPS

General.  Laidlaw  Inc.  now beneficially owns 43.5% of the Common Stock. In the
--------
ordinary  course  of business, the Company or its affiliates and Laidlaw Inc. or
affiliates  of Laidlaw Inc. have entered from time to time into various business
transactions  and  agreements.  The  following  is  a  summary  of  the material
agreements,  arrangements and transactions between the Company or its affiliates
and  Laidlaw  Inc.  or  its  affiliates  since  September  1,  1999.

Laidlaw  Inc.  Indemnities.  Pursuant  to  the  terms  of  the  Stock  Purchase
---------------------------
Agreement,  Laidlaw  Inc.  and LTI agreed to jointly and severally indemnify and
hold  harmless,  subject  to certain limitations, the Company and its affiliates
from  and  against  any  and  all  Damages  (as  defined  in  the Stock Purchase
Agreement)  suffered  by the Company resulting from or in respect of (i) various
tax  obligations  and  liabilities, (ii) pre-closing insurance claims, (iii) any
breach  or  default  in  the  performance  by  Laidlaw  Inc. or LTI of (a) their
covenants  and  agreements in the Stock Purchase Agreement to be performed on or
after  May  15,  1997 (the "Closing Date") or (b) any representation or warranty
which  survives the Closing Date (to the extent that damages therefrom exceed $2
million)  and (iv) any environmental liability or environmental claim arising as
a  result  of any act or omission by Laidlaw Inc. or LTI, including any release,
occurring  prior  to  the Closing Date, but only to the extent such liability or
claim  (a)  was  known  to  Laidlaw  Inc.  or  certain of its affiliates and not
disclosed  in  writing  to  the  Company  or  (b) relates to the Marine Shale or
Mercier,  Quebec  facilities  and  exceeds  (x)  an aggregate of $1 million in a
particular  year  and (y) an aggregate since the Closing of $1 million times the
number  of  years elapsed since the Closing Date, but only to the extent of cash
expenditures  incurred  within  six  years  after  the  Closing  Date.

On May 18, 2000, Laidlaw Inc. announced that its Board of Directors had declared
an interest payment moratorium on all advances under the Laidlaw Inc. syndicated
bank  facility  and  on  all outstanding public debt of Laidlaw Inc. and Laidlaw
One, Inc. Certain debt holders included in the moratorium have commenced actions
to attempt to recover amounts alleged to be owing to them and other debt holders
subject to the moratorium may also commence similar actions.  The Company cannot
predict  the  impact, if any, this moratorium and any related circumstances will
have  on  the  Company's ability to collect upon Laidlaw Inc.'s indemnification,
guaranty  and  other  contractual  obligations  to  the  Company.


                                       59
<PAGE>
On  June  28,  2001, Laidlaw Inc. and five of its subsidiary holding companies -
Laidlaw  Investments  Ltd.,  Laidlaw  International Finance Corporation, Laidlaw
One,  Inc.,  Laidlaw  Transportation,  Inc. and Laidlaw USA, Inc. (collectively,
"Laidlaw")  filed voluntary petitions for reorganization under Chapter 11 of the
Bankruptcy  Code  in the United States Bankruptcy Court for the Western District
of  New  York.  On the same day, Laidlaw Inc. and Laidlaw Investments Ltd. filed
cases  under  the  Canada  Companies'  Creditors  Arrangement  Act (CCAA) in the
Ontario Superior Court of Justice in Toronto, Ontario.  As a result of Laidlaw's
filings, claims and causes of action the Company may have against Laidlaw may be
subject  to  compromise in Laidlaw's Chapter 11 proceedings or CCAA proceedings.

Laidlaw  Inc.  Guaranties.  Prior to the Closing Date, Laidlaw Inc. entered into
--------------------------
on  behalf  of  the  Company  certain guaranties, performance guaranties, bonds,
performance  bonds,  suretyship  arrangements, surety bonds, credits, letters of
credit,  reimbursement agreements and other undertakings, deposit commitments or
arrangements  by  which Laidlaw Inc. may be primarily, secondarily, contingently
or  conditionally  liable  for  or in respect of (or which create, constitute or
evidence  a  lien  or  encumbrance on any of the assets or properties of Laidlaw
Inc.  which  secure the payment or performance of) a present or future liability
or  obligation  of  the  Company (each a "Laidlaw Guaranty" and collectively the
"Laidlaw  Guaranties").  Pursuant  to the terms of the Stock Purchase Agreement,
the Company agreed to use its best efforts to cause Laidlaw Inc. to be fully and
finally  released  and  discharged  from  all further liability or obligation in
respect  of all Laidlaw Guaranties within six months following the Closing Date.
As  of  August  31,  2000,  Laidlaw  Inc.  had been discharged from most of such
obligations.

Financial  assurance  is  required  for  the  cost  of clean-up or environmental
impairment  restoration,  if  any  should  be incurred, following closure of the
hazardous  waste  management facility operated by the Company in Pinewood, South
Carolina.  Prior  to  the  Closing  Date,  Laidlaw  Inc.  provided its corporate
guaranty  to  satisfy, in part, this financial assurance. Insurance coverage has
been  substituted  for  the  Laidlaw  Inc.  corporate guaranty under the present
financial  assurance  submittal.

Laidlaw  Service  Arrangements.  Laidlaw  Inc.  and its affiliates have provided
-------------------------------
certain  financial  and management services to the Company and its subsidiaries.
Such  services  have  included  providing  general  liability  and  workers'
compensation insurance. Each of the service arrangements has been on arms-length
terms  comparable  to those available in transactions with unaffiliated parties.
During  fiscal  year  ended  August  31,  2000,  the  Company  paid Laidlaw Inc.
approximately  $14.8  million  on  account  of such services.  All such services
discontinued  on  August  31,  2000.

Other.  In  September  2000,  the Company transferred ownership of a residential
------
property  in  Oakville,  Ontario, to the spouse of Kenneth W. Winger, the former
president  and  chief  executive officer of the Company and a former director of
the  Company,  for  $444,000.  Laidlaw had originally purchased this property in
1995  from Mr. Winger's spouse for the same amount pursuant to an agreement with
Mr.  Winger  in  connection  with his relocation to the Company's South Carolina
offices.  The  property  had  been  held  by  Safety-Kleen  Ltd. as successor in
interest  to Laidlaw Environmental Services Ltd.  Based on a broker's opinion of
value,  the Company believes that the price paid by Mr. Winger's spouse was fair
to  the  Company,  taking  into  account the additional expense that the Company
would  have  had to incur to sell the property to a third party.  Mr. Winger and
his  spouse  released the Company from further obligations and liability arising
under  an  agreement  executed  in March 2000 between the Company and Mr. Winger
concerning  the  transfer  of  the  property  and  the payment by the Company of
certain  relocation  expenses.


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<PAGE>
                                     PART IV
                                     -------

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

(a)  The  following  documents  are  filed  as  part  of  this  report:

     (1)  Financial  statements  and  the  notes  thereto:
                                                                           PAGE
                                                                          NUMBER

Report  of  Independent  Public  Accountants . . . . . . . . . . . . . . . F-1

Consolidated  Statements  of  Operations  for  the  Years  Ended
    August  31,  2000,  1999,  1998  and  1997 . . . . . . . . . . . . . . F-2

Consolidated Balance Sheets as of August 31, 2000, 1999, 1998 and 1997 . . F-3

Consolidated  Statements  of  Cash  Flows  for  the  Years  Ended
    August  31,  2000,  1999,  1998  and  1997 . . . . . . . . . . . . . . F-4

Consolidated Statements of Changes in Stockholders' Equity (Deficit)
    and Other Comprehensive Income (Loss) for the Years Ended
    August  31,  2000,  1999,  1998  and  1997 . . . . . . . . . . . . . . F-5

Notes  to  Consolidated  Financial  Statements . . . . . . . . . . . . . . F-7

     (2)  Financial  statement  schedule required to be filed by Item 8 of this
form:

Report of Independent Public Accountants on Financial Statement Schedule . S-1

Schedule II -- Valuation and Qualifying Accounts for the Fiscal Years Ended
  August  31,  2000,  1999,  1998  and  1997 . . . . . . . . . . . . . . . S-2


All  other  schedules  have  been  omitted  since  they  are inapplicable or not
required,  or  the  information has been included in the financial statements or
the  notes  thereto.

      (3)  Exhibits:

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

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

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

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

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

(4)(d)   Indenture dated as of May 17, 1999, between the Company and the Bank of
Nova Scotia Trust Company of New York, as trustee filed as Exhibit (4)(b) to the
Registrant's  Form S-4 Registration Statement No. 333-82689 filed July 12, 1999,
and  incorporated  herein  by  reference.


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<PAGE>
(4)(e)  Amended  and  Restated  Credit Agreement among Laidlaw Chem-Waste, Inc.,
Laidlaw Environmental Services (Canada) Ltd., Toronto Dominion (Texas) Inc., The
Toronto-Dominion  Bank,  TD  Securities  (USA)  Inc.,  The  Bank of Nova Scotia,
NationsBank,  N.A.  and The First National Bank of Chicago and NationsBank, N.A.
as  Syndication  Agent  dated  as of April 3, 1998, filed as Exhibit 4(f) to the
Registrant's Form 10-Q for the quarter ended February 28, 1999, and incorporated
herein  by  reference.

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

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

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

(4)(i)  Second  Amendment  to the Amended and Restated Credit Agreement dated as
of  November 20, 1998, among Safety-Kleen Services, Inc. (formerly known as LES,
Inc.),  Safety-Kleen  Services  (Canada)  Ltd.  (formerly  known  as  Laidlaw
Environmental  Services  (Canada)  Ltd.), the Lenders, Toronto Dominion (Texas),
Inc.,  The  Toronto  Dominion  Bank,  TD Securities (USA) Inc., The Bank of Nova
Scotia,  NationsBank, N.A., The First National Bank of Chicago and Wachovia Bank
N.A.,  filed  as  Exhibit  (4)(j)  to the Registrant's Form 10-Q for the quarter
ended  February  28,  1999  and  incorporated  herein  by  reference.

(4)(j)  Waiver  and Third Amendment to the Amended and Restated Credit Agreement
dated  as  of  May 6, 1999, among Safety-Kleen Services, Inc. (formerly known as
LES,  Inc.),  Safety-Kleen  Services  (Canada)  Ltd.  (formerly known as Laidlaw
Environmental  Services  (Canada)  Ltd.), the Lenders, Toronto Dominion (Texas),
Inc.,  The  Toronto  Dominion  Bank,  TD Securities (USA) Inc., The Bank of Nova
Scotia,  NationsBank, N.A., The First National Bank of Chicago and Wachovia Bank
N.A. filed as Exhibit (4)(l) to the Registrant's Form S-4 Registration Statement
No.  333-82689  filed  July  12,  1999,  and  incorporated  herein by reference.

(4)(k)  Fourth Amendment dated as of March 13, 2000, to the Amended and Restated
Credit  Agreement  dated  as  of  May 6, 1999, among Safety-Kleen Services, Inc.
(formerly  known  as  LES,  Inc.), Safety-Kleen Services (Canada) Ltd. (formerly
known  as  Laidlaw  Environmental  Services (Canada) Ltd.), the Lenders, Toronto
Dominion (Texas), Inc., The Toronto Dominion Bank, TD Securities (USA) Inc., The
Bank  of  Nova Scotia, NationsBank, N.A., The First National Bank of Chicago and
Wachovia Bank N.A. filed as Exhibit (4)(l) to the Registrant's Form 10-Q for the
quarter  ended  May  31,  2000  and  incorporated  herein  by  reference.

(4)(l)  Consent  dated  as  of March 16, 2000 to the Amended and Restated Credit
Agreement  dated  as of May 6, 1999, among Safety-Kleen Services, Inc. (formerly
known  as  LES,  Inc.),  Safety-Kleen  Services (Canada) Ltd. (formerly known as
Laidlaw  Environmental  Services  (Canada)  Ltd.), the Lenders, Toronto Dominion
(Texas),  Inc., The Toronto Dominion Bank, TD Securities (USA) Inc., The Bank of
Nova  Scotia, NationsBank, N.A., The First National Bank of Chicago and Wachovia
Bank  N.A. filed as Exhibit (4)(m) to the Registrant's Form 10-Q for the quarter
ended  May  31,  2000  and  incorporated  herein  by  reference.

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


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

(4)(o)  Second  Amendment  and  Waiver,  dated  as  of February 28, 2001, to the
Amended  and  Restated  Debtor-in-Possession Credit Agreement among Safety-Kleen
Services,  Inc.,  The  Several  Lenders  from  Time to  Time  Parties  thereto,
Toronto-Dominion  (Texas),  Inc. as General Administrative Agent and Underwriter
and  The  CIT  Group/Business  Credit,  Inc. as Collateral Agent and Underwriter
Initially  dated  as of June 11, 2000, Amended and Restated as of July 19, 2000.

(4)(p)  Third  Amendment  and Waiver, dated as of March 28, 2001, to the Amended
and  Restated Debtor-in-Possession Credit Agreement among Safety-Kleen Services,
Inc.,  The  Several Lenders  from Time to Time Parties thereto, Toronto-Dominion
(Texas),  Inc.  as  General  Administrative  Agent  and  Underwriter and The CIT
Group/Business  Credit, Inc. as Collateral Agent and Underwriter Initially dated
as  of  June  11,  2000,  Amended  and  Restated  as  of  July  19,  2000.

(4)(q)  Fourth  Amendment and Waiver, dated as of April 30, 2001, to the Amended
and  Restated Debtor-in-Possession Credit Agreement among Safety-Kleen Services,
Inc.,  The Several  Lenders  from Time to Time Parties thereto, Toronto-Dominion
(Texas),  Inc.  as  General  Administrative  Agent  and  Underwriter and The CIT
Group/Business  Credit, Inc. as Collateral Agent and Underwriter Initially dated
as  of  June  11,  2000,  Amended  and  Restated  as  of  July  19,  2000.
(4)(r)  Letter Agreement among Toronto Dominion (Texas), Inc., as administrative
agent,  the  Company  and  Safety-Kleen  Systems,  Inc. dated December 12, 2000,
relating  to  the  Amended  and Restated Marketing and Distribution Agreement by
Safety-Kleen  Systems,  Inc.  and System One Technologies Inc., filed as Exhibit
(4)(o)  to  the  Registrant's Form 10-Q for the quarter ended February 28, 2001,
and  incorporated  herein  by  reference.

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

(4)(t)  Indenture  dated  as  of May 1, 1993, between the Industrial Development
Board  of  the  Metropolitan  Government  of  Nashville  and  Davidson  County
(Tennessee)  and  NationsBank  of  Tennessee, N.A., filed as Exhibit 4(f) to the
Registrant's  Form  10-Q  for  the  quarter ended May 31, 1997, and incorporated
herein  by  reference.

(4)(u)  Indenture  of  Trust  dated as of August 1, 1995, between Tooele County,
Utah  and  West  One  Bank,  Utah,  now known as U.S. Bank, as Trustee, filed as
Exhibit  4(h)  to the Registrant's form 10-Q for the quarter ended May 31, 1997,
and  incorporated  herein  by  reference.

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

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

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

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

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

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


                                       63
<PAGE>
(4)(bb)  First  Amendment  to  Rights  Agreement,  dated  as  of March 17, 2000,
between  the  Company and EquiServe Trust Company, N.A. filed as Exhibit 99.1 to
the  Company's  Current  Report  on  Form  8-K  filed  on  March  17,  2000, and
incorporated  herein  by  reference.
(4)(cc)  Letter  Agreement,  dated  October  12,  1999,  between the Company and
Laidlaw  Inc.  filed as Exhibit 99.2 to the Company's Current Report on Form 8-K
filed  on  March  17,  2000,  and  incorporated  herein  by  reference.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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


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

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

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

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

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

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

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

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

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

(21)     Subsidiaries  of  Registrant  filed as Exhibit (21) to the Registrant's
Form  10-K  for  the  year  ended  August 31, 2000, and  incorporated  herein by
reference.

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

(99.2)   Amended  Consent  Agreement  and Amended Final Order by and between the
United States Environmental Protection Agency and Safety-Kleen Corp. and certain
of  its  United  States  subsidiaries  and  affiliates as approved by the United
States  Bankruptcy  Court  on  May  16,  2001.

(b)     Reports  on  Form  8-K.

i.   The  Company  filed  a  Current  Report  on Form 8-K on June 6, 2000, which
     contained Item 5 related to the Company announcing that the Company did not
     make  debt payments, the sale of the Elgin property was terminated and that
     the  Company  was  seeking  new  financial  assurance  surety  bonds.

ii.  The  Company  filed  a  Current  Report  on Form 8-K on June 9, 2000, which
     contained  Item  5 related to the Company announcing a clarification of its
     June  6,  2000,  press  release.

iii. The  Company  filed  a  Current  Report on Form 8-K on June 19, 2000, which
     contained  Item  3  and  Item  5  related  to  the  Company  announcing the
     resignation  of  Kenneth  W. Winger as a Director of the Company as well as
     the  fact  that filing for protection under the U.S. Bankruptcy Code was an
     event  of  default  under  the  Company's  four  Industrial  Revenue Bonds.

The Company filed a Current Report on Form 8-K on July 20, 2000, which contained
Item  5  related  to the Company announcing finalization of debtor-in-possession
financing.

iv.  The  Company  filed  a  Current Report on Form 8-K on August 8, 2000, which
     contained  Item  4.

v.   The  Company  filed  a Current Report on Form 8-K on August 18, 2000, which
     contained Item 5 related to the Company announcing the appointment of Larry
     W.  Singleton  as  the  new  Chief  Financial  Officer  of  the  Company.


                                       65
<PAGE>
vi.  The  Company  filed  a Current Report on Form 8-K on August 29, 2000, which
     contained Item 5 related to the Company announcing that SK Europe, Inc., an
     indirect  subsidiary  of  the Registrant had sold its remaining interest in
     Safety-Kleen  Europe  Limited.


                                       66
<PAGE>
                                   SIGNATURES

Pursuant  to  the requirements of Section 13 or 15(d) of the Securities Exchange
Act  of  1934,  the  Registrant  has  duly caused this amendment to report to be
signed  on  its  behalf  by  the  undersigned,  thereunto  duly  authorized.

DATE:  July 5, 2001                   SAFETY-KLEEN  CORP.

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

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


                                       67
<PAGE>
<TABLE>
<CAPTION>
                                        EXHIBIT INDEX

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

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

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

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

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

 (4)(d)  Indenture dated as of May 17, 1999, between the Company and the Bank of Nova
         Scotia Trust Company of New York, as trustee filed as Exhibit (4)(b) to the
         Registrant's Form S-4 Registration Statement No. 333-82689 filed July 12, 1999, and
         incorporated herein by reference.

 (4)(e)  Amended and Restated Credit Agreement among Laidlaw Chem-Waste, Inc., Laidlaw
         Environmental Services (Canada) Ltd., Toronto Dominion (Texas) Inc., The Toronto-
         Dominion Bank, TD Securities (USA) Inc., The Bank of Nova Scotia, NationsBank,
         N.A. and The First National Bank of Chicago and NationsBank, N.A. as Syndication
         Agent dated as of April 3, 1998, filed as Exhibit 4(f) to the Registrant's Form 10-Q for
         the quarter ended February 28, 1999, and incorporated herein by reference.

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

 (4)(g)  Waiver and First Amendment  to the Amended and Restated Credit Agreement dated
         as of May 15, 1998, among LES, Inc., Laidlaw Environmental Services (Canada) Ltd.,
         the Lenders, Toronto Dominion (Texas), Inc., The Toronto Dominion Bank, TD


                                       68
<PAGE>
         Securities (USA) Inc., The Bank of Nova Scotia, NationsBank, N.A., The First
          National Bank of Chicago and Wachovia Bank filed as Exhibit 4(f) to a subsidiary of
         the Registrant's Form S-4 Registration Statement No. 333-57587  filed June 24, 1998,
         and incorporated herein by reference.

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

 (4)(i)  Second Amendment  to the Amended and Restated Credit Agreement dated as of
         November 20, 1998, among Safety-Kleen Services, Inc. (formerly known as LES,
         Inc.), Safety-Kleen Services (Canada) Ltd. (formerly known as Laidlaw Environmental
         Services (Canada) Ltd.), the Lenders, Toronto Dominion (Texas), Inc., The Toronto
         Dominion Bank, TD Securities (USA) Inc., The Bank of Nova Scotia, NationsBank,
         N.A., The First National Bank of Chicago and Wachovia Bank N.A., filed as Exhibit
         (4)(j) to the Registrant's Form 10-Q for the quarter ended February 28, 1999 and
         incorporated herein by reference.

 (4)(j)  Waiver and Third Amendment to the Amended and Restated Credit Agreement dated
         as of May 6, 1999, among Safety-Kleen Services, Inc. (formerly known as LES, Inc.),
         Safety-Kleen Services (Canada) Ltd. (formerly known as Laidlaw Environmental
         Services (Canada) Ltd.), the Lenders, Toronto Dominion (Texas), Inc., The Toronto
         Dominion Bank, TD Securities (USA) Inc., The Bank of Nova Scotia, NationsBank,
         N.A., The First National Bank of Chicago and Wachovia Bank N.A. filed as Exhibit
         (4)(l) to the Registrant's Form S-4 Registration Statement No. 333-82689 filed July 12,
         1999, and incorporated herein by reference.

 (4)(k)  Fourth Amendment dated as of March 13, 2000, to the Amended and Restated Credit
         Agreement dated as of May 6, 1999, among Safety-Kleen Services, Inc. (formerly
         known as LES, Inc.), Safety-Kleen Services (Canada) Ltd. (formerly known as
         Laidlaw Environmental Services (Canada) Ltd.), the Lenders, Toronto Dominion
         (Texas), Inc., The Toronto Dominion Bank, TD Securities (USA) Inc., The Bank of
         Nova Scotia, NationsBank, N.A., The First National Bank of Chicago and Wachovia
         Bank N.A. filed as Exhibit (4)(l) to the Registrant's Form 10-Q for the quarter ended
         May 31, 2000 and incorporated herein by reference.

 (4)(l)  Consent dated as of March 16, 2000 to the Amended and Restated Credit Agreement
         dated as of May 6, 1999, among Safety-Kleen Services, Inc. (formerly known as LES,
         Inc.), Safety-Kleen Services (Canada) Ltd. (formerly known as Laidlaw Environmental
         Services (Canada) Ltd.), the Lenders, Toronto Dominion (Texas), Inc., The Toronto
         Dominion Bank, TD Securities (USA) Inc., The Bank of Nova Scotia, NationsBank,
         N.A., The First National Bank of Chicago and Wachovia Bank N.A. filed as Exhibit
         (4)(m) to the Registrant's Form 10-Q for the quarter ended May 31, 2000 and
         incorporated herein by reference.

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


                                       69
<PAGE>
 (4)(n)  First Amendment, dated as of October 31, 2000, to the Amended and Restated
         100,000,000 Debtor-In-Possession Credit Agreement among Safety-Kleen Services,
         Inc., The Several Lenders from Time to Time Parties thereto, Toronto Dominion
         (Texas), Inc., as General Administrative Agent and Underwriter and The CIT
         Group/Business Credit, Inc. as Collateral Agent and Underwriter Initially dated as of
         June 11, 2000, Amended and Restated as of July 19, 2000, filed as Exhibit (4)(n) to the
         Registrant's Form 10-Q for the quarter ended November 30, 2000, and incorporated
         herein by reference.

 (4)(o)  Second Amendment and Waiver, dated as of February 28, 2001, to the Amended and
         Restated Debtor-in-Possession Credit Agreement among Safety-Kleen Services, Inc.,
         The Several Lenders from Time to Time Parties thereto, Toronto-Dominion (Texas),
         Inc. as General Administrative Agent and Underwriter and The CIT Group/Business
         Credit, Inc. as Collateral Agent and Underwriter Initially dated as of June 11, 2000,
         Amended and Restated as of July 19, 2000.

 (4)(p)  Third Amendment and Waiver, dated as of March 28, 2001, to the Amended and
         Restated Debtor-in-Possession Credit Agreement among Safety-Kleen Services, Inc.,
         The Several Lenders from Time to Time Parties thereto, Toronto-Dominion (Texas),
         Inc. as General Administrative Agent and Underwriter and The CIT Group/Business
         Credit, Inc. as Collateral Agent and Underwriter Initially dated as of June 11, 2000,
         Amended and Restated as of July 19, 2000.

 (4)(q)  Fourth Amendment and Waiver, dated as of April 30, 2001, to the Amended and
         Restated Debtor-in-Possession Credit Agreement among Safety-Kleen Services, Inc.,
         The Several Lenders from Time to Time Parties thereto, Toronto-Dominion (Texas),
         Inc. as General Administrative Agent and Underwriter and The CIT Group/Business
         Credit, Inc. as Collateral Agent and Underwriter Initially dated as of June 11, 2000,
         Amended and Restated as of July 19, 2000.

 (4)(r)  Letter Agreement among Toronto Dominion (Texas), Inc., as administrative agent, the
         Company and Safety-Kleen Systems, Inc. dated December 12, 2000, relating to the
         Amended and Restated Marketing and Distribution Agreement by Safety-Kleen
         Systems, Inc. and System One Technologies Inc., filed as Exhibit (4)(o) to the
         Registrant's Form 10-Q for the quarter ended February 28, 2001, and incorporated
         herein by reference.

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

 (4)(t)  Indenture dated as of May 1, 1993, between the Industrial Development Board of the
         Metropolitan Government of Nashville and Davidson County (Tennessee) and
         NationsBank of Tennessee, N.A., filed as Exhibit 4(f) to the Registrant's Form 10-Q
         for the quarter ended May 31, 1997, and incorporated herein by reference.

 (4)(u)  Indenture of Trust dated as of August 1, 1995, between Tooele County, Utah and West
         One Bank, Utah, now known as U.S. Bank, as Trustee, filed as Exhibit 4(h) to the
         Registrant's form 10-Q for the quarter ended May 31, 1997, and incorporated herein by
         reference.

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


                                       70
<PAGE>
 (4)(w)  Indenture of Trust dated as of July 1, 1997, between California Pollution Control
         Financing Authority and U.S. Bank, a national banking association, as Trustee, filed as
         Exhibit 4(k) to the Registrant's Form 10-Q for the quarter ended May 31, 1997, and
         incorporated herein by reference.

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

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

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

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

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

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

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

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

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

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


                                       71
<PAGE>
(10)(d)  Agreement for the sale and purchase of shares and loan stock hold by SK Europe, Inc.
         in Safety-Kleen Europe Limited between Safety-Kleen Europe Limited and SK
         Europe, Inc. and the Company and The Electra Subscribers and Electra European Fund
         LP dated as of July 6, 2000, Company filed as Exhibit (10)(d) to the Registrant's Form
         10-K for the year ended August 31, 2000, and incorporated herein by reference.

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

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

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

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

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

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

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

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

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

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

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

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


                                       72
<PAGE>
(10)(q)  Form of Senior Executive Change of Control Agreement filed as Exhibit (10)(q) to the
         Registrant's Form 10-K for the year ended August 31, 2000, and incorporated herein
         by reference.

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

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

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

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

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

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

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

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

(21)     Subsidiaries of Registrant filed as Exhibit (21) to the Registrant's Form 10-K for the
         year ended August 31, 2000, and incorporated herein by reference.

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

(99.2)   Amended Consent Agreement and Amended Final Order by and between the United
         States Environmental Protection Agency and Safety-Kleen Corp. and certain of its
         United States subsidiaries and affiliates as approved by the United States Bankruptcy
         Court on May 16, 2001.
</TABLE>


                                       73
<PAGE>

                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To  Safety-Kleen  Corp.:

We  have  audited  the  accompanying consolidated balance sheets of Safety-Kleen
Corp. and subsidiaries (the "Company"), a Delaware corporation, as of August 31,
2000,  1999,  1998  and  1997,  and  the  related  consolidated  statements  of
operations,  changes  in  stockholders' equity (deficit) and other comprehensive
income  (loss)  and  cash flows for the years then ended (1999, 1998 and 1997 as
restated  -  see  Note 2).  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 auditing standards generally accepted
in the United States. 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.

As  discussed  in  Item  8  of  this  Form 10-K/A, the Company has not presented
quarterly financial data that the Securities and Exchange Commission requires to
supplement, although not required to be part of, the basic financial statements.

In  our opinion, the consolidated financial statements referred to above present
fairly,  in  all material respects, the financial position of Safety-Kleen Corp.
and  subsidiaries as of August 31, 2000, 1999, 1998 and 1997, and the results of
its  operations  and its cash flows for the years then ended, in conformity with
accounting  principles  generally  accepted  in  the  United  States.

The  accompanying  consolidated financial statements have been prepared assuming
that  the Company will continue as a going concern.  The Company has experienced
significant  losses  in  the  last  four  fiscal  years  and  has  a  deficit in
stockholders'  equity  of  $115.0  million  at August 31, 2000.  In addition, as
discussed  in  Notes  1  and  3  to  the  financial statements, on June 9, 2000,
Safety-Kleen  Corp.  and  certain  of  its  subsidiaries  each filed a voluntary
petition  for  relief  under Chapter 11 of the United States Bankruptcy Code and
continue  to  operate  their  respective  businesses  as  debtors-in-possession.
Management's  plans  in  regard to these matters, including its intent to file a
plan  of  reorganization  acceptable  to  the Bankruptcy Court and the Company's
creditors,  are  also  described  in Notes 1 and 3. These matters, among others,
raise  substantial  doubt  about  the  Company's  ability to continue as a going
concern.  In the event a plan of reorganization is accepted, continuation of the
business  thereafter is dependent on the Company's ability to achieve successful
future  operations.  The  accompanying  consolidated financial statements do not
include  any  adjustments  relating  to the recoverability and classification of
recorded  asset  amounts  or  the amounts and classification of liabilities that
might  be necessary should the Company be unable to continue as a going concern.


/S/ ARTHUR  ANDERSEN  LLP

Columbia,  South  Carolina
  May  18,  2001  (except  with  respect  to  the
  matters  discussed  in  Note  26,  as
  to  which  the  date  is  June  28,  2001)


                                      F-1
<PAGE>
<TABLE>
<CAPTION>
                                               SAFETY-KLEEN CORP.
                                   (DEBTOR-IN-POSSESSION AS OF JUNE 9, 2000)
                                     CONSOLIDATED STATEMENTS OF OPERATIONS
                                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
                                                                            YEAR ENDED AUGUST 31,
                                                              -------------------------------------------------
                                                                                         RESTATED
                                                                           ------------------------------------
                                                                 2000         1999         1998         1997
                                                              -----------  -----------  -----------  ----------
<S>                                                           <C>          <C>          <C>          <C>
Revenues                                                      $1,586,273   $1,624,038   $1,172,731   $ 641,945
                                                              -----------  -----------  -----------  ----------
Expenses:
    Operating                                                  1,394,584    1,246,942      865,373     536,206
    Depreciation and amortization                                164,680      156,966      106,260      66,935
    Selling, general and administrative                          279,386      201,967      138,439      80,069
    Impairment and other charges                                 367,793       11,287       64,882     253,484
                                                              -----------  -----------  -----------  ----------
                                                               2,206,443    1,617,162    1,174,954     936,694
                                                              -----------  -----------  -----------  ----------
Operating (loss) income                                         (620,170)       6,876       (2,223)   (294,749)
Interest expense, net (excluding contractual interest of
  $60,000 in 2000)                                              (141,879)    (186,180)    (120,270)    (45,185)
Other income (expense)                                               494       (1,308)         163          64
Derivative gains (losses)                                            713       (5,923)      (1,205)     (1,350)
Equity in earnings of associated companies                         1,769        1,263           --          --
                                                              -----------  -----------  -----------  ----------
Loss before reorganization items, income taxes and minority
  interests                                                     (759,073)    (185,272)    (123,535)   (341,220)
Reorganization items                                             (60,923)          --           --          --
                                                              -----------  -----------  -----------  ----------
Loss before income taxes and minority interests                 (819,996)    (185,272)    (123,535)   (341,220)
Income tax (expense) benefit                                     (13,023)     (39,094)      39,431      39,795
                                                              -----------  -----------  -----------  ----------
Loss before minority interests                                  (833,019)    (224,366)     (84,104)   (301,425)
Minority interests                                                  (172)       1,211         (324)       (119)
                                                              -----------  -----------  -----------  ----------
Loss before extraordinary items                                 (833,191)    (223,155)     (84,428)   (301,544)
Extraordinary losses                                                  --           --      (18,783)         --
                                                              -----------  -----------  -----------  ----------
Net loss                                                      $ (833,191)  $ (223,155)  $ (103,211)  $(301,544)
                                                              ===========  ===========  ===========  ==========

Basic and diluted loss per share:
    Loss before extraordinary items                           $    (8.27)  $    (2.52)  $    (1.35)  $   (8.74)
    Extraordinary losses                                              --           --        (0.30)         --
                                                              -----------  -----------  -----------  ----------
    Net loss                                                  $    (8.27)  $    (2.52)  $    (1.65)  $   (8.74)
                                                              ===========  ===========  ===========  ==========
Weighted average common stock outstanding - basic and
  diluted                                                        100,725       88,537       62,322      34,508
                                                              ===========  ===========  ===========  ==========
</TABLE>

          See accompanying Notes to Consolidated Financial Statements.


                                      F-2
<PAGE>
<TABLE>
<CAPTION>
                                               SAFETY-KLEEN CORP.
                                   (DEBTOR-IN-POSSESSION AS OF JUNE 9, 2000)
                                          CONSOLIDATED BALANCE SHEETS
                                  (IN THOUSANDS, EXCEPT FOR PAR VALUE AMOUNT)

                                                                              AUGUST  31,
                                                            ---------------------------------------------------
                                                                                        RESTATED
                                                                          -------------------------------------
                                                                2000         1999         1998         1997
                                                            ------------  -----------  -----------  -----------
<S>                                                         <C>           <C>          <C>          <C>
ASSETS:
  Current assets
    Cash and cash equivalents                               $    84,282   $   10,072   $   15,323   $   25,734
    Accounts receivable, net                                    307,342      291,726      278,484      163,852
    Inventories and supplies                                     51,914       55,098       58,888        7,502
    Deferred tax asset                                           28,554       46,342       51,545        8,977
    Income taxes recoverable                                         --           --       38,505        1,794
    Other current assets                                         49,731       44,950       46,255       14,031
                                                            ------------  -----------  -----------  -----------
      Total current assets                                      521,823      448,188      489,000      221,890
                                                            ------------  -----------  -----------  -----------
  Property, plant and equipment, net                            772,875    1,135,128    1,218,462      703,783
  Intangible assets, net                                      1,798,285    1,922,207    2,072,471      499,115
  Other assets                                                   38,885      129,791       89,542       88,953
                                                            ------------  -----------  -----------  -----------
                                                            $ 3,131,868   $3,635,314   $3,869,475   $1,513,741
                                                            ============  ===========  ===========  ===========

LIABILITIES:
  Current liabilities
    Accounts payable                                        $    65,838   $  131,835   $   95,822   $   48,588
    Current portion of environmental liabilities                 41,122       39,204       45,434       27,376
    Income taxes payable                                         24,534       11,732        3,947           --
    Unearned revenue                                             90,953       92,792       87,801       24,452
    Accrued other liabilities                                    69,211      124,107      163,829       53,753
    Derivative liabilities                                           --       48,414        2,037        1,275
    Current portion of subordinated convertible debenture            --           --      350,000      350,000
    Current portion of long-term debt                            65,421    2,070,224    1,975,106      572,987
                                                            ------------  -----------  -----------  -----------
      Total current liabilities                                 357,079    2,518,308    2,723,976    1,078,431
                                                            ------------  -----------  -----------  -----------
  Environmental liabilities                                     285,634      262,462      240,533      199,326
  Long-term debt                                                     --       24,792       15,700       15,700
  Deferred income taxes                                          92,659      103,373      109,145       46,282
  Other long-term liabilities                                     9,197        9,754       12,872           --
  Liabilities subject to compromise                           2,500,973           --           --           --
  Minority interests                                              1,296        1,124        1,681         (483)

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY (DEFICIT):
  Common stock, par value $1.00 per share; authorized
    250,000; issued and outstanding 100,784 - 2000;
    100,636 - 1999; 87,746 - 1998; 45,109 - 1997                100,784      100,636       87,746       45,109
Additional paid-in-capital                                    1,359,972    1,359,948    1,200,047      538,026
Accumulated other comprehensive income (loss)                    (6,666)      (9,214)      (9,511)         853
Accumulated deficit                                          (1,569,060)    (735,869)    (512,714)    (409,503)
                                                            ------------  -----------  -----------  -----------
Total stockholders' equity (deficit)                           (114,970)     715,501      765,568      174,485
                                                            ------------  -----------  -----------  -----------
                                                            $ 3,131,868   $3,635,314   $3,869,475   $1,513,741
                                                            ============  ===========  ===========  ===========
</TABLE>

          See accompanying Notes to Consolidated Financial Statements.


                                      F-3
<PAGE>
<TABLE>
<CAPTION>
                                               SAFETY-KLEEN CORP.
                                    (DEBTOR-IN-POSSESSION AS OF JUNE 9, 2000)
                                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                 (IN THOUSANDS)

                                                                                         RESTATED
                                                                            ------------------------------------
                                                                   2000        1999         1998         1997
                                                                ----------  ----------  ------------  ----------
<S>                                                             <C>         <C>         <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss                                                      $(833,191)  $(223,155)  $  (103,211)  $(301,544)
  Adjustments to reconcile net loss to net cash
    Provided by (used in) continuing operations:
      Extraordinary loss                                               --          --        18,783          --
      Non-cash reorganization items                                54,167          --            --          --
      Equity in undistributed earnings of associated companies     (1,769)     (1,263)           --          --
      Impairment and other charges                                367,793      11,287        64,882     253,484
      Depreciation and amortization                               164,680     156,966       106,260      66,935
      Derivative (gain) loss                                         (713)      5,923         1,205       1,350
      Loss on sale of investment                                    4,969          --            --          --
      Loss (gain) on sale of equipment                             43,813      27,921          (722)         61
      Deferred income taxes                                         8,252      28,448       (45,200)    (39,258)
      Change in accounts receivable, net                           (9,913)    (37,323)       11,565      15,577
      Change in accounts payable                                   47,248      45,099      (234,598)    (47,990)
      Change in income taxes payable                               (8,840)     61,163        12,878      33,966
      Change in accrued other liabilities                          70,377     (29,056)       17,265      13,629
      Change in environmental liabilities                          31,408      (2,197)      (33,358)    (12,665)
      Change in unearned revenue                                   (1,914)      4,778        63,777      11,611
      Change in other, net                                          4,746     (30,057)      (14,334)     (1,568)
                                                                ----------  ----------  ------------  ----------
Net cash (used in) provided by operating activities               (58,887)     18,534      (134,808)     (6,412)
                                                                ----------  ----------  ------------  ----------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Net cash (expended) acquired on acquisition of businesses       (27,072)    (14,904)   (1,099,350)     15,433
  Proceeds from sales of property, plant and equipment              9,998       5,982        12,522       1,728
  Purchases of property, plant and equipment                      (53,098)    (71,827)      (27,996)    (31,950)
  Decrease (increase) in long-term investments                     43,364       1,783        13,907      (7,498)
  Proceeds from sale of business                                       --     129,124        33,675          --
                                                                ----------  ----------  ------------  ----------
Net cash (used in) provided by investing activities               (26,808)     50,158    (1,067,242)    (22,287)
                                                                ----------  ----------  ------------  ----------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Issuance of common stock on exercise of options                      26         212           509         155
  Borrowings of long-term debt                                    252,697     236,910     1,858,513     435,518
  Repayments of long-term debt                                    (67,154)   (377,425)     (609,563)    (33,057)
  Bank financing fees                                              (4,047)    (10,303)      (51,532)    (19,504)
  Bank overdraft                                                  (45,244)     39,773        (5,393)     10,864
  Change in derivative liabilities                                 21,759      40,454          (443)        (75)
  Payments to Laidlaw Inc.                                             --          --            --    (349,116)
  Advances from Laidlaw Inc.                                           --          --            --       7,562
  Change in other, net                                                146          --            --          --
                                                                ----------  ----------  ------------  ----------
Net cash provided by (used in) financing activities               158,183     (70,379)    1,192,091      52,347
                                                                ----------  ----------  ------------  ----------
Effect of exchange rate changes on cash                             1,722      (3,564)         (452)      2,086
                                                                ----------  ----------  ------------  ----------
Net increase (decrease) in cash and cash equivalents               74,210      (5,251)      (10,411)     25,734
Cash and cash equivalents at:
  Beginning of year                                                10,072      15,323        25,734          --
                                                                ----------  ----------  ------------  ----------
  End of year                                                   $  84,282   $  10,072   $    15,323   $  25,734
                                                                ==========  ==========  ============  ==========
</TABLE>

          See accompanying Notes to Consolidated Financial Statements.


                                      F-4
<PAGE>
<TABLE>
<CAPTION>
                                                       SAFETY-KLEEN CORP.
                                           (DEBTOR-IN-POSSESSION AS OF JUNE 9, 2000)
                              CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
                                              AND OTHER COMPREHENSIVE INCOME (LOSS)
                                                         (IN THOUSANDS)

                                                                                   ACCUMULATED
                                          CURRENT YEAR                                OTHER         COMMON STOCK     ADDITIONAL
                                          COMPREHENSIVE               ACCUMULATED  COMPREHENSIVE   ---------------    PAID-IN-
                                          (LOSS) INCOME      TOTAL      DEFICIT    INCOME (LOSS)   SHARES  AMOUNT     CAPITAL
                                         ---------------  -----------  ----------  --------------  ------  -------  -----------
<S>                                      <C>              <C>          <C>         <C>             <C>     <C>      <C>
BALANCE AT AUGUST 31, 1996, AS
  PREVIOUSLY REPORTED                    $           --   $1,094,777   $ (53,532)  $          --   30,000  $30,000  $1,118,309
    Adjustments (see Note 2)                       (144)     (54,571)    (54,427)           (144)      --       --          --
                                         ---------------  -----------  ----------  --------------  ------  -------  -----------
BALANCE AT AUGUST 31, 1996
  (RESTATED)                                       (144)   1,040,206    (107,959)           (144)  30,000   30,000   1,118,309
Comprehensive loss:
  Net loss                                     (301,544)    (301,544)   (301,544)             --       --       --          --
  Other comprehensive income
   (loss), net of income taxes
    Foreign currency translation
      adjustments                                 1,033        1,033          --           1,033       --       --          --
    Unrealized loss on marketable
      securities                                    (36)         (36)         --             (36)      --       --          --
                                         ---------------
    Total comprehensive loss             $     (300,547)
                                         ===============
Net additional investment by
  Laidlaw Inc.                                                 7,562          --              --       --       --       7,562
Issuance of subordinated convertible
  debenture to Laidlaw Inc.                                 (332,500)         --              --       --       --    (332,500)
Cash paid to Laidlaw Inc.                                   (349,116)         --              --       --       --    (349,116)
Issuance of shares on acquisition                            166,034          --              --   15,094   15,094     150,940
Exercise of stock options                                        155          --              --       15       15         140
Transfer of subsidiary (see Note 20)
  to Laidlaw Inc.                                            (57,309)         --              --       --       --     (57,309)
                                                          -----------  ----------  --------------  ------  -------  -----------
BALANCE AT AUGUST 31, 1997
  (RESTATED)                                                 174,485    (409,503)            853   45,109   45,109     538,026
Comprehensive loss:
  Net loss                                     (103,211)    (103,211)   (103,211)             --       --       --          --
  Other comprehensive income
   (loss), net of income taxes
    Foreign currency translation
      adjustments                               (10,538)     (10,538)         --         (10,538)      --       --          --
    Unrealized gain on marketable
      securities                                    174          174          --             174       --       --          --
                                         ---------------
    Total comprehensive loss             $     (113,575)
                                         ===============
Issuance of shares on acquisition                            686,649          --              --   41,615   41,615     645,034
Exercise of stock options                                        509          --              --       42       42         467
Issuance of shares in payment for
  interest on subordinated
  convertible debenture                                       17,500          --              --      980      980      16,520
                                                          -----------  ----------  --------------  ------  -------  -----------
BALANCE AT AUGUST 31, 1998
    (RESTATED)                                               765,568    (512,714)         (9,511)  87,746   87,746   1,200,047
                                                          -----------  ----------  --------------  ------  -------  -----------
</TABLE>

          See accompanying Notes to Consolidated Financial Statements.


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

                                                                                    ACCUMULATED
                                        CURRENT YEAR                                   OTHER         COMMON STOCK    ADDITIONAL
                                        COMPREHENSIVE               ACCUMULATED    COMPREHENSIVE   ---------------    PAID-IN-
                                        (LOSS) INCOME      TOTAL      DEFICIT      INCOME (LOSS)   SHARES  AMOUNT     CAPITAL
                                       ---------------  ----------  ------------  --------------  -------  --------  ----------
<S>                                    <C>              <C>         <C>           <C>             <C>      <C>       <C>
BALANCE AT AUGUST 31, 1998
  (RESTATED)                                            $ 765,568   $  (512,714)  $      (9,511)   87,746  $ 87,746  $1,200,047
Comprehensive loss:
  Net loss                             $     (223,155)   (223,155)     (223,155)             --        --        --          --
  Other comprehensive income
   (loss), net of income taxes
    Foreign currency translation
      adjustments                                 582         582            --             582        --        --          --
    Unrealized loss on marketable
      securities                                 (285)       (285)           --            (285)       --        --          --
                                       ---------------
Total comprehensive loss               $     (222,858)
                                       ===============
Issuance of shares in payment for
  directors' fees                                              93            --              --         6         6          87
Issuance of shares for repurchase of
  subordinated convertible
  debenture                                               150,000            --              --    11,321    11,321     138,679
Issuance of shares in payment for
  interest on subordinated
  convertible debenture                                    22,486            --              --     1,545     1,545      20,941
Exercise of stock options                                     212            --              --        18        18         194
                                                        ----------  ------------  --------------  -------  --------  ----------
BALANCE AT AUGUST 31, 1999
  (RESTATED)                                              715,501      (735,869)         (9,214)  100,636   100,636   1,359,948
Comprehensive loss:
  Net loss                                   (833,191)   (833,191)     (833,191)             --        --        --          --
  Other comprehensive income
   (loss), net of income taxes
    Foreign currency translation
      adjustments                               2,571       2,571            --           2,571        --        --          --
    Unrealized loss on marketable
      securities                                  (23)        (23)           --             (23)       --        --          --
                                       ---------------
Total comprehensive loss               $     (830,643)
                                       ===============
Issuance of shares to non-employees                           146            --              --       146       146          --
Exercise of stock options                                      26            --              --         2         2          24
                                                        ----------  ------------  --------------  -------  --------  ----------
BALANCE AT AUGUST 31, 2000                              $(114,970)  $(1,569,060)  $      (6,666)  100,784  $100,784  $1,359,972
                                                        ==========  ============  ==============  =======  ========  ==========
</TABLE>

          See accompanying Notes to Consolidated Financial Statements.


                                      F-6
<PAGE>
                               SAFETY-KLEEN CORP.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.  BUSINESS,  ORGANIZATION  AND  BANKRUPTCY

BUSINESS  AND  ORGANIZATION

Safety-Kleen  Corp.  (the "Registrant" or "Safety-Kleen") (collectively referred
to,  with  its  subsidiaries, as the "Company"), was incorporated in Delaware in
1978  as  Rollins Environmental Services, Inc. ("Rollins") and later changed its
name  to  Laidlaw Environmental Services, Inc. ("LESI") and subsequently changed
its name to Safety-Kleen Corp. The Company provides a range of services designed
to  collect,  transport,  process,  recycle  or  dispose  of  hazardous  and
non-hazardous  industrial  and  commercial  waste  streams. The Company provides
these  services  in 50 states, seven Canadian provinces, Puerto Rico, Mexico and
Saudi  Arabia from approximately 380 collection, processing and other locations.

As  discussed  further  in Note 4, on May 15, 1997, pursuant to a stock purchase
agreement  among  Rollins, Laidlaw Inc., a Canadian corporation ("Laidlaw"), and
its  subsidiary,  Laidlaw  Transportation  Inc.  ("LTI"),  Rollins  acquired the
hazardous  and  industrial  waste  operations  of  Laidlaw  (the  "Rollins
Acquisition").  As a result of the Rollins Acquisition, Laidlaw owned 67% of the
issued  common  shares  of  LESI.  Accordingly,  the  business  combination  was
accounted  for as a reverse acquisition using the purchase method of accounting,
with  Rollins  being treated as the acquired company.  The results of operations
of  Rollins  have been included from the date of acquisition in the accompanying
consolidated  financial  statements.  Coincident with the closing of the Rollins
Acquisition,  the  continuing  legal  entity  changed  its  name  from  Rollins
Environmental  Services,  Inc.  to  Laidlaw  Environmental  Services,  Inc.

On May 26, 1998, LESI completed the acquisition of the former Safety-Kleen Corp.
("Old  Safety-Kleen").  Effective  July  1,  1998,  LESI began doing business as
Safety-Kleen  Corp.  and  its stock began trading on the New York Stock Exchange
under  the name Safety-Kleen Corp. and the ticker symbol SK.  The acquisition of
Old  Safety-Kleen  has  been  accounted  for  under  the  purchase  method  and
accordingly,  the  accompanying  consolidated  financial  statements include the
results  of  operations  of  Old  Safety-Kleen  from  the  date  of acquisition.

BANKRUPTCY

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

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

Shortly  after  the  commencement of the Chapter 11 Cases, on June 13, 2000, the
Bankruptcy  Court granted interim approval for the Debtors to obtain $40 million
debtor-in-possession  financing.  Subsequently, on July 19, 2000, the Bankruptcy
Court  granted  final  approval to a $100 million debtor-in-possession financing
facility  for the Debtors.  Pursuant to the automatic stay provisions of Section
362  of  the  Bankruptcy  Code, actions to collect pre-petition indebtedness and
virtually  all  litigation  against  the  Debtors  that was, or could have been,
brought  prior to the commencement of the Chapter 11 Cases are stayed, and other
contractual  obligations  of  the  Debtors may not be enforced against them.  In
addition,  under  Section 365 of the Bankruptcy Code, subject to the approval of
the  Bankruptcy  Court, the Debtors may assume or reject executory contracts and
unexpired leases.  Parties affected by these rejections may file proofs of claim
with  the Bankruptcy Court in accordance with the reorganization process.  These
claims  for  damages  resulting  from  the  rejection  of executory contracts or
unexpired  leases  will  be subject to separate bar dates, generally thirty days
after  entry  of  the order approving the rejection.  At various times since the
commencement  of  the  Chapter  11  Cases, the Bankruptcy Court has approved the
Debtors'  requests  to  reject  certain  contracts  or  leases  that were deemed
burdensome  or  of  no  further  value  to the Company.  As of May 18, 2001, the
Debtors  had  not  yet  completed  their  review of all contracts and leases for
assumption or rejection, but ultimately will assume or reject all such contracts
and leases.  The Debtors have until the confirmation of a plan of reorganization
to  assume or reject executory contracts and  certain leases.  However, pursuant
to  an  order  entered by the Bankruptcy Court on May 16, 2001, the Debtors have
until the earlier of the confirmation of a plan of reorganization or February 9,
2002,  to  assume  or  reject  nonresidential real property leases.  The Debtors
cannot presently determine or reasonably predict the ultimate liability that may
result  from  rejecting such contracts or leases or from the filing of rejection
damage  claims,  but  such  rejections  could  result  in additional liabilities
subject  to  compromise  (see  Note  11).


                                      F-7
<PAGE>
The consummation of a plan or plans of reorganization is the principal objective
of  the  Chapter  11  Cases.  A  plan of reorganization sets forth the means for
satisfying  claims  against  and  interests  in  the  Company  and  its  Debtor
subsidiaries,  including  the  liabilities  subject  to  compromise.  Generally,
pre-petition liabilities are subject to settlement under such a plan or plans of
reorganization,  which  must  be  voted upon by creditors and equity holders and
approved by the Bankruptcy Court.  The Debtors have retained Lazard Freres & Co.
LLC,  an  investment  bank, as corporate restructuring advisor to assist them in
formulating  and  negotiating  a plan or plans of reorganization for the Company
and  its  Debtor  subsidiaries.  Although  the  Debtors  expect  to  file  a
reorganization  plan  or  plans  in  2001,  there  can  be  no  assurance that a
reorganization plan or plans will be proposed by the Debtors or confirmed by the
Bankruptcy  Court,  or  that  any  such  plan  or  plans  will  be  consummated.

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

Confirmation  of  a  plan of reorganization is subject to certain findings being
made  by the Bankruptcy Court, all of which are required by the Bankruptcy Code.
Subject  to certain exceptions set forth in the Bankruptcy Code, confirmation of
a  plan  of reorganization requires the approval of the Bankruptcy Court and the
affirmative  vote  of  each  impaired  class  of  creditors  and equity security
holders.  The  Bankruptcy  Court  may  confirm  a  plan  notwithstanding  the
non-acceptance  of the plan by an impaired class of creditors or equity security
holders  if  certain  requirements  of  the  Bankruptcy  Code  are  met.

On  or  about  September  8,  2000,  the Debtors filed with the Bankruptcy Court
unaudited  schedules  of  assets  and  liabilities  and  statements of financial
affairs  setting  forth,  among  other things, the assets and liabilities of the
Debtors  as shown by their books and records, subject to certain disclaimers and
notes  filed  in connection therewith.  Certain of the schedules have since been
amended and all of the schedules and statements of financial affairs are subject
to  further amendment or modification.  On August 11, 2000, the Bankruptcy Court
established  October  31,  2000, as the deadline for creditors to file proofs of
claim with respect to their asserted pre-petition claims against the Debtors. In
addition,  pursuant  to  the  Bankruptcy  Code,  the  deadline  for governmental
entities to file proofs of claim was December 6, 2000.  There may be significant
differences  between  the  amounts recorded in the Debtors' unaudited schedules,
the  accompanying  consolidated  financial statements and the amounts claimed by
their  creditors.  Such  differences  will  be  investigated  and  resolved  in
connection  with  the Debtors' claims resolution process. In light of the number
of creditors of the Debtors, the claims resolution process may take considerable
time to complete.  Accordingly, the ultimate number and amount of allowed claims
is  not presently known and, because the settlement terms of such allowed claims
is  subject  to a confirmed plan of reorganization, the ultimate resolution with
respect  to  allowed  claims  is  not  presently  ascertainable  (see  Note 12).

From time to time during the Chapter 11 Cases, the Bankruptcy Court has approved
the Debtors' payment of various pre-petition liabilities, such as employee wages
and  benefits, certain expenses and litigation fees incurred by certain officers
and  employees  in  connection  with  shareholder  litigation  and  governmental
investigations (as described in Note 12), and certain Superfund liabilities.  In
addition,  the  Bankruptcy  Court  has  authorized the Debtors to maintain their
existing  employee  benefit  programs.  Funds  of  qualified  pension  plans and
savings  plans  are  in  trusts  and  protected  under federal regulations.  All
required  contributions  are  current  in  the  respective  plans.

Reorganization  items  as  reported in the accompanying fiscal 2000 statement of
operations are comprised of income, expense and loss items that were realized or
incurred  by  the  Debtors  as  a  direct  result  of  the Company's decision to
reorganize under Chapter 11.  During fiscal year 2000, reorganization items were
as  follows  ($  in  thousands):

Write-off of deferred financing costs related to pre-petition
domestic borrowings                                                     $41,533
Professional fees directly related to the filing                         15,297
Amortization of DIP financing costs                                         498
Losses on early termination of qualifying hedge contracts                 3,400
Rejected operating leases                                                   532
Interest earned on cash accumulated during Chapter 11                      (337)
                                                                        --------
                                                                        $60,923
                                                                        ========

Professional fees included within reorganization items exclude professional fees
incurred  in conjunction with the Company's investigation and restatement of its
consolidated  financial  statements  described  in  Note  2.

The  net  cash  payments  made  during  fiscal  year  2000  with  respect to the
reorganization  items  listed  above  were  $6.7  million.


                                      F-8
<PAGE>
2.  RESTATEMENT  OF  FINANCIAL  STATEMENTS

As more fully discussed in Note 12, on March 6, 2000, the Company announced that
it  had initiated an internal investigation ("the Company Investigation") of its
previously reported financial results and certain of its accounting policies and
practices.  This  investigation  followed  receipt  by  the  Company's  Board of
Directors  of  information  alleging possible accounting irregularities that may
have  affected  the  previously  reported  financial  results  of  the  Company.
Following  this  announcement,  PricewaterhouseCoopers  LLP,  the  Company's
independent  accountants  at  that  time,  notified  the  Company  that  it  was
withdrawing  its  previously issued audit reports on the fiscal years 1999, 1998
and  1997  consolidated  financial  statements.   On  September  14,  2000,  the
Bankruptcy Court approved the Company's motion to engage Arthur Andersen LLP (i)
to  act  as  its independent public accountants, (ii) to conduct an audit of the
Company's  consolidated  financial statements with respect to fiscal years 2000,
1999, 1998, and 1997, (iii) to continue assisting with the Company Investigation
and  (iv)  to  provide  other services.  The Company has restated its previously
reported  consolidated  financial  statements  for each of the three years ended
August  31,  1999,  1998  and  1997.  Except  as  otherwise  stated  herein, all
information presented in the consolidated financial statements and related notes
includes  all  such  restatements.

Numerous  class  action  lawsuits,  and  two derivative lawsuits have been filed
against  the  Company, and among others, certain current and former officers and
directors  of the Company, asserting various claims under the federal securities
laws  and certain state statutory and common laws.  As discussed in Note 12, the
Company  is  aware  that the Securities and Exchange Commission and a grand jury
convened  by  the  United  States Attorney for the Southern District of New York
have  undertaken  formal  investigations  with respect to alleged irregularities
relative  to  the  Company's  previously  issued  financial  statements.  These
investigations  have  not been completed, and the Company is currently unable to
predict  the  outcome  of  these  investigations.

The  Company  incurred  approximately  $7.4  million  of  legal and professional
related  costs  in  fiscal  year  2000  associated  with  the  investigation and
restatement  of  its consolidated financial statements.  These amounts have been
included  in  selling,  general  and  administrative expenses in the fiscal 2000
consolidated  statement  of operations.  Additionally, significant related costs
are  expected  to  be  incurred  in  fiscal  2001.

Following are the primary categories of restatement adjustments to the Company's
previously  reported  operating  results
($  in  thousands):

<TABLE>
<CAPTION>
                                                         YEARS ENDED AUGUST 31,
                                                     -------------------------------
                                                       1999       1998       1997       TOTAL
                                                     ---------  ---------  ---------  ---------
<S>                                                  <C>        <C>        <C>        <C>
Purchase accounting related items                    $ 67,939   $ 85,058   $ 17,658   $170,655
Landfill accounting and environmental liabilities      55,062     (3,576)     6,988     58,474
Harbor dredging operations                             42,387     10,637         --     53,024
Derivative transactions                                45,587      2,499      1,275     49,361
Capitalized costs                                      31,842      1,241         --     33,083
Revenue recognition                                    27,376     (7,499)    13,111     32,988
Restructuring and other charges                            --         --    (27,237)   (27,237)
Additional asset adjustments                           58,171     48,024     13,183    119,378
Additional liability adjustments                       23,138     15,596     10,140     48,874
                                                     ---------  ---------  ---------  ---------
      Total pretax adjustments                        351,502    151,980     35,118    538,600
Tax effects of the above items and other income tax
   reserve adjustments                                (39,471)   (48,564)    82,994     (5,041)
                                                     ---------  ---------  ---------  ---------
      Increase in net loss                           $312,031   $103,416   $118,112   $533,559
                                                     =========  =========  =========  =========
</TABLE>

In  addition,  the  cumulative  after-tax  effect  of  these restatements on the
periods  prior to September 1, 1996, aggregated $54.6 million, primarily related
to the cumulative effect of errors in accounting for landfills and environmental
liabilities,  revenue recognition and income tax reserve adjustments of the same
type  as  described  below,  which  have  been reflected as a charge to retained
earnings  as  of September 1, 1996, in the consolidated statements of changes in
equity  (deficit)  and  other  comprehensive  income  (loss).

Accounting Principles Board ("APB") Opinion No. 20, "Accounting Changes" defines
errors  in  financial  statements  as  those  that,  "  result from mathematical
mistakes,  mistakes in the application of accounting principles, or oversight or
misuse  of  facts  that  existed  at  the  time  the  financial  statements were
prepared."  Descriptions  of the major components of the restatement adjustments
reflecting  correction of errors pursuant to APB Opinion No. 20 for fiscal years
1999,  1998  and  1997  are  as  follows:


                                      F-9
<PAGE>
Purchase  accounting  related  items
------------------------------------
The  Company  determined  that  it had improperly accounted for its acquisitions
between September 1, 1996, and August 31, 1999, primarily related to the Rollins
Acquisition  and  the  Old  Safety-Kleen  Acquisition.  A substantial portion of
these  errors  were  the  result  of  the inappropriate establishment and use of
certain  reserves  in  accounting  for  these  acquisitions.  Corrections  of
previously  recorded  reserves  related  primarily  to estimated liabilities for
legal,  severance,  environmental  and  future  maintenance  costs.

Less  significantly  there were also errors in the valuation of certain acquired
intangible  assets and related deferred tax liabilities.  These errors primarily
consisted  of  overstatements  of  values  assigned to permits and corresponding
understatements  of  values  assigned to goodwill in connection with the Rollins
Acquisition  in  1997  and the acquisition of Old Safety Kleen in 1998 (see Note
4).  The  correction  of  the previously recorded asset amounts also resulted in
adjustments  to  amortization  expense.

In addition, as required by Statement of Financial Accounting Standards ("SFAS")
No.  109,  "Accounting  for Income Taxes," the Company had recorded deferred tax
liabilities  for  the  tax  effect  of  values  assigned  to  permits  with  a
corresponding  increase  in recorded goodwill.  The reduction in recorded permit
values  described  in  the  previous  paragraph  required  a  reduction of these
deferred  tax liabilities to amounts calculated using the correct permit values.
As  described below, this reduction in deferred tax liabilities created the need
for  additional  tax  valuation  reserves  in  1997  and  1999.

Landfill  accounting  and  environmental  liabilities
-----------------------------------------------------
The  Company determined that the landfill accounting model used in preparing its
previously issued financial statements included errors relating to (i) estimates
of  the  probable  capacities  of  the  Company's landfills (also referred to as
"airspace")  to  be  used  in accounting for the costs of those properties, (ii)
estimates  of  landfill  final  closure  and  post-closure  costs,  (iii)  the
misapplication  of  certain  landfill  amortization  and accrual rates, (iv) the
improper  capitalization  and/or  deferral  of  certain  costs,  and  (v)  other
mathematical  and  clerical  errors.

The  Company  also  concluded  that  it  had  improperly determined and recorded
accruals  for environmental remediation, Superfund obligations, and non-landfill
closure  and  post-closure  obligations.  These  included  errors related to the
reconciliation  of  the  Company's estimates of these obligations to the amounts
included  in  its  previously  reported  financial  statements.

Harbor  dredging  operations
----------------------------
In  its  previously issued financial statements, the Company improperly recorded
revenues for governmental contract claims  which have not been collected and for
other  contingent  revenues.  To  a  lesser extent, the Company also capitalized
certain  operating  costs,  improperly recorded purchase accounting reserves for
operating  inefficiencies  and  contingencies  and  did not appropriately accrue
various  costs  related  to  its  harbor  dredging  operation.

Derivative  transactions
------------------------
During  the  restatement  period,  the  Company  failed to record on the balance
sheet,  at  fair value, certain derivative transactions that did not qualify for
hedge  accounting.  In  addition,  the  Company  received cash to modify certain
existing  derivative instruments or to enter into new instruments that contained
off-market  terms.  Rather  than  record  this  cash as a borrowing, the Company
either  improperly  recognized  the  cash  received  as  income  immediately  or
improperly  credited  various balance sheet accounts, which were then improperly
used  to  increase  income  over a period of time.  Finally, the Company did not
properly account for the early termination or modification of certain derivative
contracts.

Capitalized  costs
------------------
The  Company  determined  that  certain  costs and expenses related to software,
repair  and  maintenance,  marketing,  startup  losses,  vehicle fuel and tires,
inventory  and  consulting  fees  were  improperly  capitalized  or  deferred.

Revenue  recognition
--------------------
The  Company  determined  that,  for  waste  collection and disposal activities,
revenue  should  be recognized at the time of disposal of the waste, and for the
parts  cleaner  and  related  operations,  revenue should be recognized over the
service  interval.  During  the  restatement  years,  the  Company  previously
recognized  revenue  at the time of collection for certain operations (including
an  accrual  for  the  cost to dispose), and at the time of disposal for certain
other  operations.  The  Company  made  adjustments  to  consistently  apply the
appropriate  revenue  recognition  policy  in accordance with generally accepted
accounting  principles,  including  the  reversal of revenue accrued improperly.

Restructuring  and  other  charges
----------------------------------
The  Company recorded and classified certain costs and expenses as restructuring
and other charges in 1997 and 1998.  Included in these amounts were accruals for
severance and exit costs as defined in Emerging Issues Task Force ("EITF") 94-3,
"Liability Recognition for Certain Employee Termination Benefits and Other Costs
to Exit an Activity (including Certain Costs Incurred in a Restructuring)."  The
Company has determined it had not committed to restructuring plans which met the
requirements  of  this standard. Accordingly, certain of these charges have been
reversed.


                                      F-10
<PAGE>
The  remaining  components  of  the  previously reported restructuring and other
charges  represent  proper  costs and expense in the periods previously reported
but  have  been  reclassified  to  other income statement captions, primarily to
impairments  and  other  charges  (see  Note  17),  and  to  operating expenses.

Additional  asset  adjustments
------------------------------
During  the  restatement  period,  the  Company  failed  to  record  adjustments
necessary  to  reconcile  cash, inventories and property, plant and equipment to
supporting records and/or physical counts.  The Company also improperly recorded
amortization  of  permits  and deferred losses related to disposals of property,
plant  and  equipment.  In  addition,  the  Company  recorded  inappropriate
receivables  related  to  unearned  interest and finance charges on accounts and
notes  receivable  and  provided  inadequate  allowances  for doubtful accounts.
Additionally,  the  Company  inappropriately  capitalized  various  expenses  as
prepaid  or  deferred  costs  and  failed  to  appropriately recognize equity in
earnings related to investments in affiliates.  Finally, adjustments for certain
asset impairments resulting from the Company's decisions to sell, close or alter
the  use of various facilities were not appropriately recorded in its previously
issued  financial  statements.

Additional  liability  adjustments
----------------------------------
The  Company  determined  that  during  the  restatement  period,  it  had
inappropriately  reversed  or  recorded  charges  against certain liabilities or
inadequately  provided  for  various  accrued  liabilities,  including vacation,
medical  costs,  legal actions against the Company, incentive programs and sales
commissions.

Income  tax  adjustments
------------------------
The restatements of pre-tax income and the reduction of deferred tax liabilities
recorded  in  connection  with acquisitions described above required appropriate
adjustments to income tax provisions based on statutory tax provisions.  In 1997
and  1999, the results of these adjustments was to create net deferred tax asset
balances in certain taxing jurisdictions.  The uncertainty of the realization of
these  assets  required  an  increase  in  the tax valuation allowances in those
years.

SFAS  No.  109  requires  that valuation allowances that were established by the
acquirer  prior  to the acquisition, which are no longer required as a result of
the  attributes  of  the  acquired  company,  be reversed in connection with the
initial  purchase  price  allocation.

In  connection with the allocation of the purchase price of the Old Safety-Kleen
acquisition,  the  Company  determined  that  it  should  be able to realize the
benefits of deferred tax assets for which a valuation allowance of approximately
$96.2  million had been previously established.  This reduction in the valuation
allowance  was  accounted for as a reduction of the goodwill recorded in the Old
Safety  Kleen  acquisition  in  1998.

Reclassifications
-----------------
Certain  reclassifications of previously reported amounts which did not directly
affect  net  income  have been made to the consolidated financial statements and
are  included  in  the  adjustments  shown  in  the  accompanying tables.  These
principally  consist  of:

-    Asset impairments, which were previously reported as restructuring charges,
     are  reflected  separately  as  asset  impairments  in  the  consolidated
     statements  of  operations.

-    The  restated balances of non-landfill permit values have been reclassified
     to noncurrent intangible assets. These balances were previously included in
     property,  plant  and  equipment.

-    As  a  result  of  financial  covenant violations, substantially all of the
     Company's  long-term debt has been classified as current liabilities in the
     restated  consolidated  balance  sheets.

The  effect  of  these  restatement  adjustments  and  reclassifications  on the
previously  reported  1999,  1998 and 1997 consolidated statements of operations
and  consolidated  balance  sheets  is  shown  in  the  following  tables:


                                      F-11
<PAGE>
<TABLE>
<CAPTION>
                            CONSOLIDATED STATEMENT OF OPERATIONS
                            ------------------------------------

                                                       YEAR ENDED AUGUST 31, 1999
                                             ----------------------------------------------
                                              AS PREVIOUSLY
In thousands, except per share data             REPORTED       RESTATEMENTS    AS RESTATED
-------------------------------------------  ---------------  --------------  -------------
<S>                                          <C>              <C>             <C>
Revenues                                     $    1,685,948   $     (61,910)  $  1,624,038
Expenses:
  Operating                                       1,070,666         176,276      1,246,942
  Depreciation and amortization                     136,002          20,964        156,966
  Selling, general and administrative               134,497          67,470        201,967
  Impairment and other charges                           --          11,287         11,287
                                             ---------------  --------------  -------------
                                                  1,341,165         275,997      1,617,162
                                             ---------------  --------------  -------------
Operating income (loss)                             344,783        (337,907)         6,876
Interest expense, net                              (172,028)        (14,152)      (186,180)
Other income (expense)                                5,803          (7,111)        (1,308)
Derivative losses                                        --          (5,923)        (5,923)
Equity in earnings of associated companies            2,708          (1,445)         1,263
                                             ---------------  --------------  -------------
Income (loss) before income taxes                   181,266        (366,538)      (185,272)
Income tax expense                                  (78,565)         39,471        (39,094)
                                             ---------------  --------------  -------------
Income (loss) before minority interest              102,701        (327,067)      (224,366)
Minority interest                                     1,211              --          1,211
                                             ---------------  --------------  -------------
Income (loss) before extraordinary loss             103,912        (327,067)      (223,155)
Extraordinary loss                                  (15,036)         15,036             --
                                             ---------------  --------------  -------------
Net income (loss)                            $       88,876   $    (312,031)  $   (223,155)
                                             ===============  ==============  =============

Earnings per share - Basic
  Income (loss) before extraordinary loss    $         1.17                   $      (2.52)
  Extraordinary loss                                  (0.17)                            --
                                             ---------------                  -------------
  Net income (loss)                          $         1.00                   $      (2.52)
                                             ===============                  =============

Earnings per share - Diluted
  Income (loss) before extraordinary loss    $         1.03                            N/A
  Extraordinary loss                                  (0.13)                           N/A
                                             ---------------                  -------------
  Net income (loss)                          $         0.90                            N/A
                                             ===============                  =============

Weighted average common stock outstanding
  Basic                                              88,537                         88,537
  Diluted                                           111,645                            N/A
                                             ===============                  =============
</TABLE>


                                      F-12
<PAGE>
<TABLE>
<CAPTION>
                                  CONSOLIDATED BALANCE SHEET
                                  --------------------------

                                                            AS OF AUGUST 31, 1999
                                                ----------------------------------------------
                                                 AS PREVIOUSLY
In thousands                                       REPORTED       RESTATEMENTS    AS RESTATED
---------------------------------------------   ---------------  --------------  -------------
<S>                                             <C>              <C>             <C>
ASSETS:
Current assets:
  Cash and cash equivalents                     $        9,173   $         899   $     10,072
  Accounts receivable, net                             395,009        (103,283)       291,726
  Inventories and supplies                              60,567          (5,469)        55,098
  Deferred tax assets                                   58,641         (12,299)        46,342
  Other current assets                                  64,307         (19,357)        44,950
                                                ---------------  --------------  -------------
     Total current assets                              587,697        (139,509)       448,188
                                                ---------------  --------------  -------------
Long-term investments                                   76,739         (76,739)            --
Property, plant and equipment, net                   2,572,020      (1,436,892)     1,135,128
Intangible assets, net                               1,098,731         823,476      1,922,207
Other assets                                            31,617          98,174        129,791
                                                ---------------  --------------  -------------
                                                $    4,366,804   $    (731,490)  $  3,635,314
                                                ===============  ==============  =============

LIABILITIES:
Current liabilities:
  Accounts payable                              $      172,838   $     (41,003)  $    131,835
  Current portion of environmental liabilities              --          39,204         39,204
  Income taxes payable                                      --          11,732         11,732
  Unearned revenue                                          --          92,792         92,792
  Accrued other liabilities                            163,818         (39,711)       124,107
  Derivative liabilities                                    --          48,414         48,414
  Current portion of long-term debt                     85,063       1,985,161      2,070,224
                                                ---------------  --------------  -------------
     Total current liabilities                         421,719       2,096,589      2,518,308
                                                ---------------  --------------  -------------
Environmental liabilities                              224,090          38,372        262,462
Long-term debt                                       1,882,371      (1,857,579)        24,792
Deferred income taxes                                  556,372        (452,999)       103,373
Other long-term liabilities                                 --           9,754          9,754
Minority interest                                           --           1,124          1,124
STOCKHOLDERS' EQUITY:
  Common stock                                         100,636              --        100,636
  Additional paid-in-capital                         1,342,448          17,500      1,359,948
  Accumulated other comprehensive loss                 (12,949)          3,735         (9,214)
  Accumulated deficit                                 (147,883)       (587,986)      (735,869)
                                                ---------------  --------------  -------------
     Total stockholders' equity                      1,282,252        (566,751)       715,501
                                                ---------------  --------------  -------------
                                                $    4,366,804   $    (731,490)  $  3,635,314
                                                ===============  ==============  =============
</TABLE>


                                      F-13
<PAGE>
<TABLE>
<CAPTION>
                               CONSOLIDATED STATEMENT OF OPERATIONS
                               ------------------------------------

                                                               YEAR ENDED AUGUST 31, 1998
                                                    ----------------------------------------------
                                                     AS PREVIOUSLY
In thousands, except per share data                     REPORTED      RESTATEMENTS    AS RESTATED
--------------------------------------------------  ---------------  --------------  -------------
<S>                                                 <C>              <C>             <C>
Revenues                                            $    1,185,473   $     (12,742)  $  1,172,731
Expenses:
  Operating                                                797,382          67,991        865,373
  Depreciation and amortization                             93,051          13,209        106,260
  Selling, general and administrative                      108,817          29,622        138,439
  Impairment and other charges                                  --          64,882         64,882
  Restructuring and other charges                           65,831         (65,831)            --
                                                    ---------------  --------------  -------------
                                                         1,065,081         109,873      1,174,954
                                                    ---------------  --------------  -------------
Operating income (loss)                                    120,392        (122,615)        (2,223)

Interest expense, net                                     (107,697)        (12,573)      (120,270)
Other income (expense)                                       7,657          (7,494)           163
Derivative losses                                               --          (1,205)        (1,205)
                                                    ---------------  --------------  -------------
Income (loss) before income taxes                           20,352        (143,887)      (123,535)
Income tax (expense) benefit                                (9,133)         48,564         39,431
                                                    ---------------  --------------  -------------
Income (loss) before minority interest                      11,219         (95,323)       (84,104)
Minority interest                                              269            (593)          (324)
                                                    ---------------  --------------  -------------
Income (loss) before extraordinary loss                     11,488         (95,916)       (84,428)
Extraordinary loss, net of income taxes                    (11,283)         (7,500)       (18,783)
                                                    ---------------  --------------  -------------
Net income (loss)                                   $          205   $    (103,416)  $   (103,211)
                                                    ===============  ==============  =============

Earnings per share - basic and diluted
  Income (loss) before extraordinary loss           $         0.18                   $      (1.35)
  Extraordinary loss                                         (0.18)                         (0.30)
                                                    ---------------                  -------------
  Net income (loss)                                 $           --                   $      (1.65)
                                                    ===============                  =============
Weighted average common stock outstanding - basic
  and diluted                                               62,322                         62,322
                                                    ===============                  =============
</TABLE>


                                      F-14
<PAGE>
<TABLE>
<CAPTION>
                                  CONSOLIDATED BALANCE SHEET
                                  --------------------------

                                                            AS OF AUGUST 31, 1998
                                                ----------------------------------------------
                                                AS PREVIOUSLY
In thousands                                       REPORTED       RESTATEMENTS    AS RESTATED
----------------------------------------------  ---------------  --------------  -------------
<S>                                             <C>              <C>             <C>
ASSETS:
Current assets:
  Cash and cash equivalents                     $       16,333   $      (1,010)  $     15,323
  Accounts receivable, net                             320,048         (41,564)       278,484
  Inventories and supplies                              53,759           5,129         58,888
  Deferred tax assets                                   69,426         (17,881)        51,545
  Income taxes recoverable                              37,495           1,010         38,505
  Other current assets                                  45,273             982         46,255
                                                ---------------  --------------  -------------
     Total current assets                              542,334         (53,334)       489,000
                                                ---------------  --------------  -------------
Long-term investments                                   35,926         (35,926)            --
Property, plant and equipment, net                   2,850,502      (1,632,040)     1,218,462
Intangible assets, net                               1,023,154       1,049,317      2,072,471
Other assets                                            16,979          72,563         89,542
                                                ---------------  --------------  -------------
                                                $    4,468,895   $    (599,420)  $  3,869,475
                                                ===============  ==============  =============

LIABILITIES:
Current liabilities:
  Accounts payable                              $      128,560   $     (32,738)  $     95,822
  Current portion of environmental liabilities              --          45,434         45,434
  Income taxes payable                                      --           3,947          3,947
  Unearned revenue                                          --          87,801         87,801
  Accrued other liabilities                            219,352         (55,523)       163,829
  Derivative liabilities                                    --           2,037          2,037
  Current portion of subordinated convertible
    debenture                                               --         350,000        350,000
  Current portion of long-term debt                     77,004       1,898,102      1,975,106
                                                ---------------  --------------  -------------
     Total current liabilities                         424,916       2,299,060      2,723,976
                                                ---------------  --------------  -------------
Environmental liabilities                              259,459         (18,926)       240,533
Long-term debt                                       1,853,164      (1,837,464)        15,700
Subordinated convertible debenture                     350,000        (350,000)            --
Deferred income taxes                                  566,650        (457,505)       109,145
Other long-term liabilities                                 --          12,872         12,872
Minority interest                                           --           1,681          1,681
STOCKHOLDERS' EQUITY:
  Common stock                                          87,746              --         87,746
  Additional paid-in-capital                         1,182,547          17,500      1,200,047
  Accumulated other comprehensive loss                 (18,828)          9,317         (9,511)
  Accumulated deficit                                 (236,759)       (275,955)      (512,714)
                                                ---------------  --------------  -------------
     Total stockholders' equity                      1,014,706        (249,138)       765,568
                                                ---------------  --------------  -------------
                                                $    4,468,895   $    (599,420)  $  3,869,475
                                                ===============  ==============  =============
</TABLE>


                                      F-15
<PAGE>
<TABLE>
<CAPTION>
                             CONSOLIDATED STATEMENT OF OPERATIONS
                             ------------------------------------

                                                          YEAR ENDED AUGUST 31, 1997
                                                ----------------------------------------------
                                                 AS PREVIOUSLY
In thousands, except per share data                REPORTED       RESTATEMENTS    AS RESTATED
----------------------------------------------  ---------------  --------------  -------------
<S>                                             <C>              <C>             <C>
Revenues                                        $      678,619   $     (36,674)  $    641,945
Expenses:
  Operating                                            485,062          51,144        536,206
  Depreciation and amortization                         53,506          13,429         66,935
  Selling, general and administrative                   73,068           7,001         80,069
  Impairment and other charges                              --         253,484        253,484
  Restructuring and other charges                      331,697        (331,697)            --
                                                ---------------  --------------  -------------
                                                       943,333          (6,639)       936,694
                                                ---------------  --------------  -------------
Operating loss                                        (264,714)        (30,035)      (294,749)

Interest expense, net                                  (44,273)           (912)       (45,185)
Other income (expense)                                   2,865          (2,801)            64
Derivative losses                                           --          (1,350)        (1,350)
                                                ---------------  --------------  -------------
Loss from continuing operations before income
  tax benefit                                         (306,122)        (35,098)      (341,220)
Income tax benefit                                     122,789         (82,994)        39,795
                                                ---------------  --------------  -------------
Loss from operations before minority interest         (183,333)       (118,092)      (301,425)
Minority interest                                         (119)             --           (119)
Income from discontinued operations, net of
  income taxes                                              20             (20)            --
                                                ---------------  --------------  -------------
Net loss                                        $     (183,432)  $    (118,112)  $   (301,544)
                                                ===============  ==============  =============

Earnings per share - Basic and diluted:
  Continuing operations                         $        (5.32)                  $      (8.74)
  Discontinued operations                                   --                             --
                                                ---------------                  -------------
  Net loss                                      $        (5.32)                  $      (8.74)
                                                ===============                  =============
Weighted average common stock outstanding -
  basic and diluted                                     34,508                         34,508
                                                ===============                  =============
</TABLE>


                                      F-16
<PAGE>
<TABLE>
<CAPTION>
                                  CONSOLIDATED BALANCE SHEET
                                  --------------------------

                                                              AS OF AUGUST 31, 1997
                                                ----------------------------------------------
                                                 AS PREVIOUSLY
In thousands                                       REPORTED       RESTATEMENTS    AS RESTATED
----------------------------------------------  ---------------  --------------  -------------
<S>                                             <C>              <C>             <C>
ASSETS:
Current assets:
  Cash and cash equivalents                     $       11,160   $      14,574   $     25,734
  Accounts receivable, net                             210,914         (47,062)       163,852
  Inventories and supplies                               7,927            (425)         7,502
  Deferred tax asset                                    13,027          (4,050)         8,977
  Income taxes recoverable                                  --           1,794          1,794
  Other current assets                                   8,512           5,519         14,031
                                                ---------------  --------------  -------------
     Total current assets                              251,540         (29,650)       221,890
                                                ---------------  --------------  -------------
Long-term investments                                   51,909         (51,909)            --
Property, plant and equipment, net                   1,236,569        (532,786)       703,783
Intangible assets, net                                  70,527         428,588        499,115
Other assets                                               333          88,620         88,953
                                                ---------------  --------------  -------------
                                                $    1,610,878   $     (97,137)  $  1,513,741
                                                ===============  ==============  =============

LIABILITIES
Current liabilities:
  Accounts payable                              $       48,148   $         440   $     48,588
  Current portion of environmental liabilities              --          27,376         27,376
  Unearned revenue                                          --          24,452         24,452
  Accrued other liabilities                            115,211         (61,458)        53,753
  Derivative liabilities                                    --           1,275          1,275
  Current portion of subordinated convertible
    debenture                                               --         350,000        350,000
  Current portion of long-term debt                     12,086         560,901        572,987
                                                ---------------  --------------  -------------
     Total current liabilities                         175,445         902,986      1,078,431
                                                ---------------  --------------  -------------
Environmental liabilities                              179,668          19,658        199,326
Long-term debt                                         528,010        (512,310)        15,700
Subordinated convertible debenture                     350,000        (350,000)            --
Deferred income taxes                                   49,790          (3,508)        46,282
Minority interest                                           --            (483)          (483)
STOCKHOLDERS' EQUITY:
  Common stock                                          45,109              --         45,109
  Additional paid-in-capital                           520,526          17,500        538,026
  Accumulated other comprehensive loss                    (706)          1,559            853
  Accumulated deficit                                 (236,964)       (172,539)      (409,503)
                                                ---------------  --------------  -------------
     Total stockholders' equity                        327,965        (153,480)       174,485
                                                ---------------  --------------  -------------
                                                $    1,610,878   $     (97,137)  $  1,513,741
                                                ===============  ==============  =============
</TABLE>


                                      F-17
<PAGE>
3.  BASIS  OF  PRESENTATION  AND  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES

A  summary  of the basis of presentation and the significant accounting policies
followed  in  the  preparation  of these consolidated financial statements is as
follows:

BASIS  OF  PRESENTATION

The accompanying consolidated financial statements have been prepared on a going
concern  basis  which  contemplates  continuity  of  operations,  realization of
assets, and payment of liabilities in the ordinary course of business and do not
reflect  adjustments  that might result if the Debtors are unable to continue as
going concerns. The Debtors' significant losses, deficit in stockholders' equity
and  their Chapter 11 filings, as well as issues related to compliance with debt
covenants  and  financial  assurance  requirements  discussed in Notes 8 and 12,
raise  substantial  doubt  about  the  Company's  ability to continue as a going
concern.  The  Debtors intend to file a plan or plans of reorganization with the
Bankruptcy  Court.  Continuing as a going concern is dependent upon, among other
things,  the  Debtors'  formulation  of a plan of reorganization, the success of
future  business  operations,  and  the  generation  of  sufficient  cash  from
operations  and  financing  sources  to  meet  the  Debtors'  obligations.  The
consolidated  financial  statements do not reflect:  (a) the realizable value of
assets on a liquidation basis or their availability to satisfy liabilities;  (b)
aggregate  pre-petition  liability  amounts  that  may be allowed for unrecorded
claims  or  contingencies,  or  their status or priority;  (c) the effect of any
changes to the Debtors' capital structure or in the Debtors' business operations
as  the  result of an approved plan of reorganization; or (d) adjustments to the
carrying  value  of  assets  (including  goodwill  and  other  intangibles)  or
liability  amounts  that  may  be  necessary  as  the  result  of actions by the
Bankruptcy  Court.

The Company's financial statements as of August 31, 2000, have been presented in
conformity  with the AICPA's Statement of Position 90-7, "Financial Reporting By
Entities  In  Reorganization  Under  the  Bankruptcy  Code,"  ("SOP 90-7").  The
statement  requires  a  segregation  of liabilities subject to compromise by the
Bankruptcy  Court  as  of  the  bankruptcy filing date and identification of all
transactions  and events that are directly associated with the reorganization of
the  Company.

CONSOLIDATION

The  accompanying  consolidated financial statements include the accounts of the
Company  and  all  of  its majority-owned subsidiary companies.  All significant
intercompany  balances  and  transactions have been eliminated in consolidation.

CASH  AND  CASH  EQUIVALENTS

Cash  and  cash  equivalents  consist  of  cash  on deposit and term deposits in
investments  with initial maturities of three months or less.  These investments
are  stated  at  cost,  which  approximates  market  value.

RESTRICTED  FUNDS  HELD  BY  TRUSTEES

Restricted  funds  held  by trustees are included in other noncurrent assets and
consist  principally  of  financial assurance funds deposited in connection with
landfill  final  closure  and  post-closure  obligations  and  amounts  held for
landfill  and other construction arising from industrial revenue financings, and
amounts held to establish a GSX Contribution Fund for the Pinewood facility (see
Note  12).  These amounts are principally invested in fixed income securities of
federal,  state  and  local  governmental  entities  and financial institutions.
Realized  investment  earnings  and trust expenses are recorded currently in the
consolidated  statements  of  operations.

The  Company  considers  its  landfill  closure,  post-closure, construction and
escrow  investments  totaling  $12.4  million,  $13.0 million, $12.4 million and
$26.2  million at August 31, 2000, 1999, 1998 and 1997, respectively, to be held
to  maturity.  At August 31, 2000, 1999, 1998 and 1997, the aggregate fair value
of  these investments approximates their net book value and substantially all of
these  investments  mature  within  one  year. The GSX Contribution Fund for the
Pinewood facility totaling $19.1 million, $18.3 million, $18.0 million and $17.2
million  at August 31, 2000, 1999, 1998 and 1997, respectively, has been treated
as  if  it were available for sale (see Note 12).  Accordingly, unrealized gains
and  losses  resulting from changes between the cost basis and fair value of the
securities  in  this  fund  are  recorded  as adjustments to other comprehensive
income  (loss).

Additionally,  the  remaining cash proceeds of $15.0 million at August 31, 2000,
resulting from the Company's fiscal year 2000 disposition of its 44% interest in
Safety-Kleen  Europe  Limited  (see Note 5) and its Rosemount facility have been
restricted  by  order  of  the  Bankruptcy  Court,  for  use in securing certain
insurance  coverages  previously  provided  by  Laidlaw,  as well as reimbursing
certain  costs  of the agent for the pre-petition lenders.  As a result of these
restrictions,  the  proceeds  have  been included in other current assets in the
accompanying  August  31,  2000,  consolidated  balance  sheet.


                                      F-18
<PAGE>
INVENTORIES  AND  SUPPLIES

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

INVESTMENTS  IN  AFFILIATES

Investments in affiliates, over which the Company has significant influence, are
accounted  for  by  the  equity  method  and  included  in  other  assets in the
accompanying  consolidated  balance sheets.  Equity earnings are recorded to the
extent  that  any increase in the carrying value is determined to be realizable.

PROPERTY,  PLANT  AND  EQUIPMENT

Property,  plant  and  equipment  is  recorded  at cost.  Expenditures for major
renewals  and  improvements which extend the life or usefulness of the asset are
capitalized. Items of an ordinary repair or maintenance nature, as well as major
maintenance  activities  at  incinerators,  are  charged  directly  to operating
expense  as  incurred.  The  Company  capitalizes  environmentally  related
expenditures  which  extend  the  life  of  the  related property or mitigate or
prevent  future  environmental  contamination.  The following table presents the
net  property,  plant  and equipment of the Company as of August 31, 2000, 1999,
1998  and  1997  ($  in  thousands):

<TABLE>
<CAPTION>
                                                                                            RANGE OF
                                                                                        ESTIMATED USEFUL
                                      2000         1999         1998         1997            LIVES
                                   -----------  -----------  -----------  -----------  ------------------
<S>                                <C>          <C>          <C>          <C>          <C>
Land                               $   80,007   $   97,664   $  102,265   $   44,936                  N/A
Landfill sites and improvements       191,607      442,259      421,736      478,012          0-127 years
Buildings                             238,599      344,847      363,197      152,609          20-40 years
Machinery and equipment               530,482      593,333      596,038      312,714           3-40 years
                                                                                         Lesser of useful
Leasehold improvements                 19,437       21,583       31,903        7,709   life or lease term
Construction in process                11,551       27,119        5,711       14,854                  N/A
                                   -----------  -----------  -----------  -----------
  Total property, plant and
    equipment                       1,071,683    1,526,805    1,520,850    1,010,834
Less - Accumulated depreciation
  and amortization                   (298,808)    (391,677)    (302,388)    (307,051)
                                   -----------  -----------  -----------  -----------
Net property, plant and equipment  $  772,875   $1,135,128   $1,218,462   $  703,783
                                   ===========  ===========  ===========  ===========
</TABLE>

Machinery  and  equipment  includes  the  cost  of  equipment  at, or placed at,
customer  locations  having a net book value of $77.4 million, $98.3 million and
$87.3 million at August 31, 2000, 1999, and 1998, respectively.  The Company had
no  equipment  at,  or  placed  at,  customer  locations  at  August  31,  1997.
Depreciation  commences  when  the  units  are placed in service at the customer
location.

During  the construction and development period of an asset, the costs incurred,
including  applicable interest costs, are classified as construction-in-process.
Once an asset has been completed and placed in service, it is transferred to the
appropriate  category  and  depreciation  commences.  In  addition,  the Company
capitalizes  applicable  interest  costs  associated  with  partially  developed
landfill  sites,  which  are  included in land, landfill sites and improvements.
During  fiscal  years  2000,  1999, 1998 and 1997, the Company capitalized total
interest  costs  of  $1.2  million, $2.4 million, $1.8 million and $3.1 million,
respectively.

Leasehold  improvements  are  capitalized  and amortized over the shorter of the
improvement  life  or  the  remaining  term  of  the  lease.  Depreciation  and
amortization of other property, plant and equipment is provided substantially on
a  straight-line  basis  over  the  estimated  useful  lives.

Depreciation  and  amortization expense related to property, plant and equipment
was  $91.3  million  in  2000,  $82.7 million in 1999, $66.4 million in 1998 and
$52.8  million  in  1997.

Included  within  property,  plant  and  equipment  is  an administrative office
building,  with  a net book value of approximately $17.0 million, including land
and  related  improvements,  which  was  held  for  sale  as of August 31, 2000.


                                      F-19
<PAGE>
INTANGIBLE  ASSETS

The Company evaluates the excess of the purchase price over the amounts assigned
to  tangible assets and liabilities (excess purchase price) associated with each
of  its acquisitions to value the identifiable intangible assets. Any portion of
the  excess  purchase  price  that  cannot  be  separately identified represents
goodwill.  The  Company  evaluates  the  estimated economic lives of each asset,
including  goodwill,  and  has  amortized  the  asset  over  that  life.
The  following  table presents the intangible assets of the Company as of August
31,  2000,  1999,  1998  and  1997  ($  in  thousands):

<TABLE>
<CAPTION>
                                   2000         1999         1998        1997
                                -----------  -----------  -----------  ---------
<S>                             <C>          <C>          <C>          <C>
Customer list                   $  220,000   $  220,000   $  220,000   $     --
Software                            50,000       50,000       50,000         --
Permits, non-landfill              384,010      397,940      433,762    377,247
Goodwill                         1,352,993    1,402,438    1,460,028    182,632
                                -----------  -----------  -----------  ---------
  Total intangible assets        2,007,003    2,070,378    2,163,790    559,879
Less: accumulated amortization    (208,718)    (148,171)     (91,319)   (60,764)
                                -----------  -----------  -----------  ---------
Intangible assets, net          $1,798,285   $1,922,207   $2,072,471   $499,115
                                ===========  ===========  ===========  =========
</TABLE>

Customer  list
--------------
The  Company  has  evaluated  the  value  associated  with the customer lists of
acquired  companies.  The value is based on a number of significant assumptions,
including:  category  of  customer, estimated duration of customer relationship,
and  projected  margins  from  existing customers.  Based on its evaluation, the
Company  believes  the acquired customer lists have estimated lives ranging from
11  to  30  years,  which  it  used  to amortize these assets.  The amortization
expense associated with customer lists was $12.7 million in 2000 and 1999,  $5.3
million  in  1998  and  $0  in  1997.

Software
--------
The  Company  has  evaluated  the value associated with the software of acquired
companies.  The value is based on a number of significant assumptions, primarily
the  cost  to  replace the existing software.  The Company believes the acquired
software  has  an estimated life of 5 years, which it has used to amortize these
assets.  The  amortization expense associated with software was $10.0 million in
2000  and  1999,  $4.2  million  in  1998  and  $0  in  1997.

Permits
-------
The  Company  has  reflected  the  excess  of  the  fair  value  of non-landfill
facilities  over  the  tangible  assets  acquired  as  permits.  The Company has
determined  the value of acquired permits based on either a discounted cash flow
or  other  appraisal  method.  The Company has evaluated and determined that the
acquired  non-landfill  permits  have  estimated  economic lives in excess of 40
years,  but  believes  40 years is appropriate for amortization of these assets.
Accordingly,  the Company is amortizing the value of permits over a period of 40
years.  The  amortization expense associated with non-landfill permits was $12.2
million in 2000, $12.2 million in 1999, $12.2 million in 1998, and $10.8 million
in  1997.

Goodwill
--------
The remaining excess purchase price, following the allocation to permits and the
identified  intangible  assets discussed above, has been classified as goodwill.
The  Company  considers  legal,  contractual,  regulatory,  obsolescence  and
competitive  factors  in  determining the useful life and amortization period of
this  intangible  asset.  The  Company believes the goodwill associated with the
acquired  companies  has  estimated  lives  ranging  from  40  years  to  an
undeterminable  life.  As  such,  the Company has amortized the goodwill over 40
years.  The  amortization  expense associated with goodwill was $38.5 million in
2000,  $39.4  million  in  1999, $18.2 million in 1998 and $3.3 million in 1997.

Goodwill is reviewed for impairment when events or circumstances indicate it may
not  be  recoverable.  If it is determined that goodwill may be impaired and the
estimated  undiscounted future cash flows, excluding interest, of the underlying
business  are  less than the carrying amount of the goodwill, then an impairment
loss  is recognized.  The impairment loss is based on the difference between the
fair  value  of  the underlying business and the carrying amount.  The method of
determining  fair  value differs based on the nature of the underlying business.


                                      F-20
<PAGE>
IMPAIRMENT  OF  LONG-LIVED  ASSETS

The  Company  periodically  evaluates  whether  events  and  circumstances  have
occurred that indicate that the remaining useful life of any of the tangible and
intangible  assets  may warrant revision or that the remaining balance might not
be  recoverable.  When  factors indicate that the tangible and intangible assets
should be evaluated for possible impairment, the Company uses an estimate of the
future  undiscounted  cash flows generated by the underlying assets to determine
if  a  write-down is required.  If a write-down is required, the Company adjusts
the  book  value  of  the  underlying  goodwill  and  then the book value of the
impaired  long-lived assets to their estimated fair values.  The related charges
are  recorded  in  impairment and other charges in the accompanying consolidated
statements  of  operations  (see  Note  17).

DEFERRED  FINANCING  COSTS

Deferred financing costs of $4.3 million, $48.4 million, $45.5 million and $19.1
million  are amortized over the life of the related debt instrument and included
in  other assets as of August 31, 2000, 1999, 1998 and 1997, respectively.  As a
result  of  the  bankruptcy filing discussed in Note 1, financing costs of $41.5
million  related  to  pre-petition  debt  were  expensed  in fiscal year 2000 as
reorganization  items.

LANDFILL  ACCOUNTING  AND  ENVIRONMENTAL  LIABILITIES

Environmental  liabilities  include  accruals for the estimates of the Company's
obligations  associated  with:

-    Regulatory  mandated  landfill cell closure, final closure and post-closure
     activities.  The  Company  accrues  cell closure costs over the life of the
     cell, and accrues final closure and post-closure costs over the life of the
     landfill,  as  capacity  is  consumed.

-    Regulatory  mandated  closure  and  post-closure  activities for facilities
     other than landfills, such as incinerators. The Company accrues these costs
     when management commits to a definitive plan of closure with respect to the
     facility.

-    Costs  associated  with  remedial  environmental  matters  at the Company's
     facilities.  The  Company  accrues for these costs on a site-by-site basis,
     when  management  deems  such  obligations  to  be  probable and reasonably
     estimable.

-    Sites named on the United States Environmental Protection Agency's National
     Priorities  List  (Superfund)  with which the Company or one or more of its
     subsidiaries  is  allegedly  connected.  The  Company typically accrues its
     estimate  of  its  obligations  related  to  these  sites no later than the
     completion  of  the  Remedial  Investigation  and/or  Feasibility  Study.

Accruals  are  adjusted  if,  and  as,  further  information  relative  to  its
obligations  develop  or  circumstances  change.  Changes  in estimated landfill
closure  and  post-closure liabilities are recognized prospectively.  Changes in
the  Company's estimates of its obligations relative to non-landfill closure and
post-closure activities, remedial situations and Superfund sites are recorded in
the  period  in  which  the  estimates  change.

In  conjunction  with  the  acquisitions  of certain facilities, the Company has
obtained  varying  amounts  and  types  of  indemnification  from  potential
environmental liabilities existing at the time of acquisition.  Such indemnities
typically cover all or a portion of the costs associated with the remediation of
such  pre-existing environmental liabilities, and may be for a limited period of
time.  No  liabilities  are  recorded  at the acquisition date if it is probable
that  the  indemnifying  party  has  the intent and financial ability to perform
under  those  indemnities.  Indemnifications contractually required from Laidlaw
Inc.  have  not  been  considered  in  the  determination  of  the  Company's
environmental  liabilities  (see  Note  21).

Site  costs  --  Site  costs  include  the  costs  of landfill site acquisition,
-----------
permitting,  preparation  and  improvement.  These amounts are recorded at cost,
which  includes  capitalized  interest,  as  applicable.  Site  costs,  net  of
amortization,  are  included  in  management's estimate of the costs required to
complete  construction  of  the landfill to determine the amount to be amortized
over  the  remaining  estimated useful economic life of a site.  Amortization of
site costs is recorded on a units-of-consumption basis, such that the site costs
should  be completely amortized at the date the landfill ceases accepting waste.


                                      F-21
<PAGE>
Final  closure  and  post-closure obligations -- Final closure costs include the
---------------------------------------------
costs  required  to cap the final cell of the landfill and the costs required to
dismantle  certain  structures  and  other  landfill improvements.  In addition,
final closure costs include regulatory mandated groundwater monitoring, leachate
management, financial assurance and other costs incurred in the closure process.
Post-closure  costs  include  substantially  all  costs  that are required to be
incurred  subsequent  to  the  closure of the landfill, including, among others,
groundwater  monitoring,  leachate  management,  and  financial  assurance.
Regulatory  post-closure  periods  are  generally  a  period  of  30 years after
landfill closure, but may be as long as 100 years after landfill closure.  Final
closure  and  post-closure  obligations  are  discounted.  Final  closure  and
post-closure  obligations are accrued on a units-of-consumption basis, such that
the  present  value of the final closure and post-closure obligations is accrued
at  the  date  the  landfill  discontinues  accepting  waste.

Landfill  capacity -- Landfill capacity, which is the basis for the amortization
------------------
of site costs and for the accrual of final closure and post-closure obligations,
represents  total  permitted airspace, plus unpermitted airspace that management
believes  is  probable  of  ultimately  being  permitted  based  on  established
criteria.  The  Company  applies  a comprehensive set of criteria for evaluating
the  probability of obtaining a permit for future expansion airspace at existing
sites,  which  provides management a sufficient basis to evaluate the likelihood
of  success  of  unpermitted  expansions.  Those  criteria  are  as  follows:

-    Personnel are actively working to obtain the permit or permit modifications
     (land  use,  state  and  federal)  necessary  for  expansion of an existing
     landfill,  and  progress  is  being  made  on  the  project;

-    At  the  time  the  expansion  is included in the Company's estimate of the
     landfill's useful economic life, it is probable that the required approvals
     will  be received within the normal application and processing time periods
     for  approvals  in  the  jurisdiction in which the landfill is located. The
     Company  expects to submit the application within the next year and expects
     to  receive  all  necessary  approvals to accept waste within the next five
     years;

-    The owner of the landfill or the Company has a legal right to use or obtain
     land  associated  with  the  expansion  plan;

-    There  are  no  significant  known political, technical, legal, or business
     restrictions  or  issues  that  could impair the success of such expansion;

-    A  financial  feasibility  analysis  has  been  completed,  and the results
     demonstrate  that  the  expansion  has a positive financial and operational
     impact  such  that  management  is committed to pursuing the expansion; and

-    Additional  airspace  and  related  additional costs, including permitting,
     final  closure  and  post-closure  costs,  have been estimated based on the
     conceptual  design  of  the  proposed  expansion.

Exceptions  to  the  criteria  set  forth  above  may  be  approved  through  a
landfill-specific  approval process that includes an approval from the Company's
Chief Financial Officer and prompt review by the Audit Committee of the Board of
Directors.  As  of  August  31,  2000,  1999,  1998  and  1997,  there  were two
unpermitted  expansions  included  in  the  Company's landfill accounting model,
which  together represented approximately 1% of the Company's remaining airspace
at  these  dates.  Neither  of  these  expansions  represented exceptions to the
Company's  established  criteria.

As  of  August 31, 2000, the Company has 11 active landfill sites (including the
Pinewood  Facility that has no remaining airspace, (see Note 12), as well as the
Company's  non commercial landfill), which have estimated remaining lives (based
on  anticipated  waste  volumes) and net property, plant and equipment values as
follows  ($  in  thousands):

    Remaining lives                         Net property, plant
       (years)           Number of sites    and equipment values
---------------------  ------------------  ----------------------
         0-5                   4                   $38,618
         6-10                  1                        --
        11-20                  3                    41,975
        21-40                 --                        --
        40 +                   3                    16,953
                           --------                -------
                              11                   $97,546
                           ========                =======


                                      F-22
<PAGE>
Amortization  of  cell construction costs/accrual of cell closure obligations --
-----------------------------------------------------------------------------
Landfills  are  typically  comprised of a number of cells, which are constructed
within  a  defined  acreage  (or  footprint).  The  cells are typically discrete
units, which require both separate construction and separate capping and closure
procedures.  Cell  construction  costs  are  the  costs required to excavate and
construct  the  landfill  cell.  These  costs  are  typically  amortized  on  a
units-of-consumption  basis,  such  that  they are completely amortized when the
specific  cell  ceases accepting waste.  Cell closure costs, which are the costs
required  to  construct  the  cell  cap,  are accrued over the life of the cell.
Those costs are typically accrued on a units-of-consumption basis, such that the
total  amount required to cap the cell is accrued when that specific cell ceases
accepting  waste.   In  some  instances,  the  Company  has  landfills  that are
engineered  and  constructed  as  "progressive trenches."  In progressive trench
landfills,  a  number  of  contiguous cells form a progressive trench.  In those
instances,  the  Company  amortizes  cell  construction  costs, and accrues cell
closure  obligations,  over the airspace within the entire trench, such that the
cell construction costs will be fully amortized, and the cell closure costs will
be  fully accrued, when that specific progressive trench ceases accepting waste.

Discounting  of  long-term  environmental related liabilities -- Costs of future
-------------------------------------------------------------
expenditures for landfill final closure and post-closure are discounted based on
management's  expectations  of  when  it will incur the expenditure.  Generally,
remediation  obligations  are  not  discounted.  However,  in limited instances,
certain  remediation obligations are discounted if they are closely connected to
the regulatory post-closure obligations and/or the amount and timing of the cash
payments  are  fixed and reliably determinable.  The interest accretion relative
to  these  discounted  liabilities  is  reflected  in  operating  expenses.

CREDIT  CONCENTRATION

Concentration  of  credit  risks  in  accounts receivable are limited due to the
large  number  of  customers  comprising  the Company's customer base throughout
North  America.  The  Company  performs  periodic  credit  evaluations  of  its
customers.  The  Company establishes an allowance for doubtful accounts based on
the  credit risk applicable to particular customers, historical trends and other
relevant  information.

DERIVATIVES  AND  OTHER  FINANCIAL  INSTRUMENTS

Certain  of the Company's debt agreements required the use of interest rate swap
agreements  to  minimize  the  impact  of interest rate fluctuations on floating
interest rate long-term borrowings.  As such, the Company entered into pay-fixed
swap  agreements which will hedge the exposures from floating rate cash flows on
debt, ranging up to ten years in the future through the termination of the swap.
These  swaps  are  accounted  for  as  qualifying hedges as described below.  In
addition, the Company also utilized a receive fixed swap as a hedge against fair
value  changes  of fixed rate long-term debt.  The Company has also entered into
derivative contracts for trading purposes (mark-to-market contracts) and certain
of  these  produced  immediate  cash  flow.  The  following  is a summary of the
derivatives  that  the  Company  has  used and the related accounting treatment.

Qualifying  hedges  --  Instruments used as hedges must be effective at managing
------------------
the  risk  associated with the exposure being hedged and must be designated as a
hedge  at the inception of the contract.  Accordingly, changes in fair values or
cash  flows  of  these  hedge  instruments must have a high degree of offsetting
effect  on  changes in fair values or cash flows of the underlying hedged items.
Interest  rate  swaps  that  meet  these  criteria  are  accounted for under the
deferral or accrual method.  If a derivative does not meet these criteria, or if
the  designated  hedged  item  ceases  to  exist,  then the Company subsequently
accounts  for  the  derivative  at  its  fair  value,  with  gains  or losses on
derivative  contracts  recognized  through  earnings.  During  the  restatement
period,  it  was  not  always  possible to obtain documentation to support hedge
accounting.  Therefore,  the  following  criteria  were  used  to identify those
derivative instruments to which hedge accounting (i.e. accrual accounting) would
be  applied.
-    The derivative's notional must not exceed the aggregate principal of hedged
     debt  outstanding.
-    At-market  interest  rate swaps are accounted for as an individual contract
     such  that  the  swap  is entirely treated as a hedge or entirely marked to
     fair  value.
-    At-market  swap  maturities  (plus  extensions) must be no greater than ten
     years.
-    The  floating  rate  on  the  hedged debt and floating leg of the at-market
     interest  rate swap must reset to market at least every six months based on
     a  LIBOR  index.

Swap  termination/amortization  --  If  a terminated interest rate swap received
------------------------------
hedge  accounting  before termination, the fair value at the termination date is
deferred as a component of the hedged item and amortized over the remaining swap
life  if either the debt remains outstanding or it is probable that the existing
debt  will  be replaced.  Otherwise, the fair value at the termination date will
be  reported in earnings at that date.  If the terminated swap was already being
reported  at  fair  value,  then the change in fair value of the terminated swap
since  the  previous  reporting  period  is  recorded  in  earnings.

Swap  modification  --  A  modification  of  an  existing  interest rate swap is
------------------
considered  a  termination  of  the  existing  swap  and  the execution of a new
interest  rate  swap.


                                      F-23
<PAGE>
Mark-to-market  contracts  --  All  noninterest  rate  swap  derivatives  (e.g.,
-------------------------
futures,  forwards  and  options  primarily  based  on  interest rates, but that
include  other  underlyings),  as  well  as  interest rate swaps not meeting the
qualifying  hedge  requirements  discussed  above,  are  measured  at fair value
through  earnings  from  inception  to  maturity.

Written  options  other  than termination/extension clauses -- All interest rate
-----------------------------------------------------------
swaps  with written option components attributable to terms other than permanent
terminations  or extensions are considered written options in their entirety and
are  measured  at  fair  value  through  earnings  from  inception  to maturity.

Off-market  swaps  --  Certain  interest rate swaps have terms at inception that
-----------------
deviate  from  market,  which  causes  its  fair  value to not equal zero at the
inception  of  the  contract.  For these instruments, the Company segregates the
contract  between a fixed-rate borrowing and an at-market swap. The borrowing is
repaid  through allocating a portion of the settlement payments under the actual
swap.  The  portion  of  the  contract settlements that generates the cash flows
arising  from  the  off-market  terms  is  recorded  as  interest  expense and a
reduction  of the fixed-rate borrowing using the effective interest method.  The
remaining  cash  flows  are reported as an at-market swap, which is treated as a
qualifying  hedge  if  it  meets  the  criteria  described  above,  or  as  a
mark-to-market  contract  if  it  does  not  meet  the  criteria.

Financial  statement  presentation  --  The fair value of derivative instruments
----------------------------------
accounted  for  as mark-to-market contracts are included in other current assets
for  those  with  a  positive fair value, or in derivative liabilities for those
with  a  negative  fair  value.  The  net  book  value  of amortizing fixed-rate
borrowings  that  result  from  off-market  swaps  are  included  in  derivative
liabilities.  At  August  31,  2000, all derivative liabilities were included in
liabilities  subject  to  compromise.  Interest  income and expense that results
from  the settlement of all interest rate swap transactions, as well as interest
expense  on  any  segregated fixed-rate borrowings is recorded in the applicable
interest  income  or  expense  caption in the consolidated statements of income.
Gains  and losses on transactions not receiving hedge accounting are recorded in
derivative  gains  (losses).

REVENUE  RECOGNITION

The  Company  recognizes  revenue  upon  disposal  for  its waste collection and
disposal  activities,  and  over  the applicable service intervals for its parts
cleaner  and  related businesses. Consulting services revenue is recognized when
services  are performed.  Unearned revenue has been recorded for services billed
but  not  earned  in the accompanying consolidated balance sheets.  Direct costs
associated  with  the handling and transportation of waste prior to disposal and
other  variable  direct  costs  associated  with the Company's parts cleaner and
related businesses are capitalized as a component of other current assets in the
accompanying consolidated balance sheets and recognized when the related revenue
is  recognized.

STOCK-BASED  COMPENSATION

As  permitted  by SFAS No. 123, the Company has elected to apply APB Opinion No.
25  in accounting for its stock option plans.  Accordingly, no compensation cost
has been recognized because the option exercise price of all options granted was
equal to the market price of the underlying stock on the date of the grant.  The
Company  has  provided  the  pro  forma  disclosure of the fair value of options
granted  as  required  by  SFAS  No.  123  (see  Note  16).

INCOME  TAXES

Deferred  income  taxes  reflect  the  tax  consequences  on  future  years  of
differences  between the tax bases of assets and liabilities and their financial
reporting  amounts.  Future  tax  benefits,  such  as  net  operating  loss
carryforwards, are recognized to the extent that realization of such benefits is
more  likely  than  not.  Prior  to May 15, 1997, the Company filed consolidated
U.S.  income  tax  returns  with  Laidlaw,  the  former  parent  company.

FOREIGN  CURRENCY

The  functional  currency  of  each  foreign  subsidiary is its respective local
currency.  Assets and liabilities are translated to U.S. Dollars at the exchange
rate  in  effect  at the balance sheet date and revenue and expenses at weighted
monthly  average  exchange  rates  for  the  year.  Gains  and  losses  from the
translation  of  the  financial statements of the foreign subsidiaries into U.S.
dollars  are  included in stockholders' equity (deficit) as a component of other
comprehensive  income  (loss).

Gains  and losses resulting from foreign currency transactions are recognized in
other  income  (expense).  The  Company  recognized a gain from foreign currency
transactions  of  $0.4  million in fiscal 2000, a loss of $1.3 million in fiscal
1999, a loss of $3.0 million in fiscal 1998 and a gain of $0.1 million in fiscal
1997.  Recorded  balances  that  are  denominated  in  a currency other than the
functional  currency  are adjusted to the functional currency using the exchange
rate  at  the  balance  sheet  date.


                                      F-24
<PAGE>
OTHER  COMPREHENSIVE  INCOME  (LOSS)

During  fiscal  year  1999,  the  Company  adopted  SFAS  No.  130,  "Reporting
Comprehensive  Income."  Comprehensive  income  (loss) for all periods presented
consists  of  net  income  (loss),  foreign currency translation adjustments and
unrealized  gains  and  losses  on  investments classified as available for sale
under  SFAS  No.  115,  "Accounting  for  Certain Investments in Debt and Equity
Securities."  Adoption  of this standard required additional disclosures and had
no  effect  on  the  Company's  results  of  operations, cash flows or financial
position.

Accumulated  other  comprehensive  income  (loss)  consists  of  the  following
components  ($  in  thousands):

<TABLE>
<CAPTION>
                                      FOREIGN CURRENCY    UNREALIZED (LOSS)/GAIN    ACCUMULATED OTHER
                                        TRANSLATION           ON MARKETABLE           COMPREHENSIVE
                                         ADJUSTMENT             SECURITIES            INCOME (LOSS)
                                     ------------------  ------------------------  -------------------
<S>                                  <C>                 <C>                       <C>
Balance at August 31, 1996           $              --   $                  (144)  $             (144)
  Other comprehensive income (loss)              1,033                       (36)                 997
                                     ------------------  ------------------------  -------------------
Balance at August 31, 1997                       1,033                      (180)                 853
  Other comprehensive income (loss)            (10,538)                      174              (10,364)
                                     ------------------  ------------------------  -------------------
Balance at August 31, 1998                      (9,505)                       (6)              (9,511)
  Other comprehensive income (loss)                582                      (285)                 297
                                     ------------------  ------------------------  -------------------
Balance at August 31, 1999                      (8,923)                     (291)              (9,214)
  Other comprehensive income (loss)              2,571                       (23)               2,548
                                     ------------------  ------------------------  -------------------
Balance at August 31, 2000           $          (6,352)  $                  (314)  $           (6,666)
                                     ==================  ========================  ===================
</TABLE>

EARNINGS  (LOSS)  PER  SHARE

Basic  earnings  per  share  excludes  any  dilutive  effects  of  options  and
convertible securities.  Basic earnings per share is computed using the weighted
average  number  of common shares outstanding during the year.  Diluted earnings
per  share  is  computed  using the weighted average number of common and common
stock equivalent shares outstanding during the period.  Common equivalent shares
are  excluded  from  the  computation  if their effect is antidilutive.  For all
periods  presented,  the  effect  of  the  Company's  common  stock  options and
subordinated  convertible  debenture are excluded from the dilutive earnings per
share  calculation  since  inclusion  of  such  items would be antidilutive.  At
August 31, 2000, there were 1,046,863 options to purchase shares of common stock
at  a  weighted  average exercise price of $13.844 per share, which could dilute
basic  earnings  per  share  in  the  future.

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  reported  amounts  of  assets  and  liabilities  and  disclosure of
contingent  assets  and  liabilities at the date of the financial statements and
the  reported  amounts  of  revenue  and  expenses  during the reporting period.
Specifically, with regard to landfill accounting, the Company uses a significant
number of engineering and accounting estimates in estimating the useful economic
lives  of  its  landfills  and  projecting future development, final closure and
post-closure  costs,  environmental  remediation  and  Superfund  costs,  future
operational  plans  and  projected  waste  volumes.  Actual results could differ
materially  from  those  estimates.

RECENT  ACCOUNTING  DEVELOPMENTS

In  February  2001, the Financial Accounting Standards Board ("FASB") released a
revised  exposure  draft  for  a  proposed  SFAS,  "Business  Combinations  and
Intangible  Assets  -  Accounting  for Goodwill."  The proposed standards would,
among other requirements (1) prohibit the use of the pooling-of-interests method
of  accounting  for  business  combinations,  (2)  require  that goodwill not be
amortized  in  any  circumstance,  and  (3)  require that goodwill be tested for
impairment  annually  or when events or circumstances occur between annual tests
indicating  that  goodwill  of a reporting unit might be impaired.  The proposed
standards  would establish a new method of testing goodwill for impairment.  The
FASB  has  recently  set  transition  provisions and the FASB plans to issue the
final  standards in July 2001.  The proposed standards would take full effect no
later than fiscal 2003.  The provisions of any final standards could differ from
those  reflected  in  the exposure draft; as a result, the actual application of
any final standard could result in different effects than those described above.
The Company has not tested goodwill for impairment under the proposed standards.


                                      F-25
<PAGE>
In  1998,  the  FASB issued SFAS No. 133, "Accounting for Derivative Instruments
and  Hedging  Activities."  SFAS  No.  133  establishes accounting and reporting
standards  requiring that every derivative instrument be recorded on the balance
sheet as either an asset or liability measured at its fair value.  The statement
requires  that changes in the derivative's fair value be recognized currently in
earnings  unless specific hedge accounting criteria are met.  Special accounting
for  qualifying  hedges allows a derivative's gains and losses to offset related
results  on the hedged item in the income statement, and requires that a company
must  formally  document, designate and assess the effectiveness of transactions
that  receive  hedge  accounting.  In  June  1999, the FASB issued SFAS No. 137,
which  deferred  the  effective  date  of SFAS No. 133 to fiscal years beginning
after  June 15, 2000.  In June 2000, the FASB issued SFAS No. 138, which amended
certain  guidance  within  SFAS  No.  133.  The Company adopted SFAS No. 133, as
amended,  on September 1, 2000 and concluded that the adoption of this statement
did  not  materially  impact  the  company's  financial  position,  results  of
operations,  or  cash  flows.

4.  BUSINESS  COMBINATIONS

ROLLINS  ENVIRONMENTAL

On  February  6,  1997,  Rollins  entered  into  a stock purchase agreement with
Laidlaw to acquire the hazardous and industrial waste operations of Laidlaw (the
"Accounting  Acquirer").  At  the  Rollins  Acquisition closing on May 15, 1997,
Rollins issued 30 million common shares (as adjusted for a 1 for 4 reverse stock
split  effective  November  30,  1998)  and  a  $350  million  5%  subordinated
convertible debenture, and paid $349.1 million in cash ($400 million, less $50.9
million  of  Laidlaw  debt  assumed)  to  Laidlaw  to  consummate  the  Rollins
Acquisition.  Concurrent  with  the  closing  of  the  Rollins  Acquisition, the
continuing  legal  entity  changed its name from Rollins Environmental Services,
Inc.  to LESI.  As a result of the Rollins Acquisition, Laidlaw owned 67% of the
issued  common  shares  of  LESI  and  had control of LESI's Board of Directors.
Also,  LESI's  management  became  senior  management  of the continuing entity.
Accordingly, the business combination was accounted for as a reverse acquisition
using  the  purchase  method  of  accounting  and  LESI  adopted  the Accounting
Acquirer's  fiscal  year-end of August 31.  The historical financial information
included  in  these  consolidated financial statements is that of the Accounting
Acquirer.  The results of operations of Rollins have been included from the date
of  acquisition,  May  15,  1997.

The  reverse  acquisition purchase price is the fair market value of the Rollins
common  shares outstanding at the time the terms of the Rollins Acquisition were
agreed  to  and  announced.  This  amount  was  calculated  by applying Rollins'
February  6, 1997, closing market price per share on the New York Stock Exchange
of $2.75 to its 60,375,811 common shares outstanding on that date which resulted
in  a  reverse acquisition purchase price of approximately $166.0 million.  LESI
determined  that  the  appropriate  date  to  calculate  the reverse acquisition
purchase  price  was  the date of signing the stock purchase agreement since, at
that date, the terms of the Rollins Acquisition had been agreed to and announced
and  the  only remaining conditions to complete the Rollins Acquisition involved
stockholder  and  regulatory  approvals.

The  following  table  reflects  the  fair  value  of  the  assets  acquired and
liabilities  assumed  in  the  Rollins  Acquisition
($  in  thousands):

        Fair  value  of  net  assets  acquired:
          Property, plant and equipment                                $164,928
          Intangible assets - permits                                    56,965
          Intangible assets - goodwill                                  109,438
          Environmental liabilities assumed                             (77,723)
          Deferred tax assets, net                                        6,869
          Debt                                                         (112,628)
          Other assets and liabilities, net                              18,185
                                                                       ---------
        Reverse acquisition purchase price                             $166,034
                                                                       =========

The  amounts  above  include  certain  immaterial  adjustments  to the initially
allocated  fair  values, which were recorded in the third quarter of fiscal year
1998.

The  fair  value  of  permits  reflected  above  was  calculated  at the date of
acquisition  as the excess of discounted estimated future cash flows for each of
the  acquired  permitted  facilities  over  the fair value of tangible assets at
those  facilities.  Management  believes  there  were  no  other  identifiable
intangible assets acquired in the Rollins Acquisition.  No independent appraisal
of tangible fixed assets acquired in the Rollins Acquisition was performed.  The
fair value of tangible fixed assets was estimated to equal the net book value of
these  assets  as  of  the  date  of  the  acquisition,  less  certain  specific
write-downs  related  to  assets  disposed.

The  permits  and  goodwill  resulting  from  the  Rollins Acquisition are being
amortized  on  a  straight-line  basis  over  a  period  of  40  years.


                                      F-26
<PAGE>
SAFETY-KLEEN  CORP.

On  April  3,  1998, the Company acquired 93% of the outstanding common stock of
Safety-Kleen Corp. ("Old Safety-Kleen") in a tender offer bringing the Company's
total  ownership  to  94%.  Under  the terms of the offer, the Company exchanged
$18.30  and  2.8  common  shares of LESI's stock for each Old Safety-Kleen share
tendered.  On  May  26,  1998,  the  Company  completed  the  acquisition of Old
Safety-Kleen  ("Safety-Kleen  Acquisition").  The  total  purchase price for Old
Safety-Kleen  was  approximately  $1.8  billion,  including (i) cash paid to Old
Safety-Kleen  shareholders  of  approximately  $1.1 billion; (ii) the fair value
associated  with  166.5  million  shares  of  the  Company's  common  stock,  of
approximately  $686.6  million,  based  on the computed average closing price of
$4.125;  and  (iii)  transaction  costs of $13.7 million directly related to the
acquisition.  The  cash  paid  was  financed from the proceeds of a $2.2 billion
Senior  Credit  Facility  (see  Note  8).

The  Safety  Kleen  Acquisition has been accounted for under the purchase method
and,  accordingly,  the accompanying financial statements include the results of
operations  of  Old  Safety-Kleen from the date of the acquisition of the 93% of
Old  Safety-Kleen  common stock.  The excess of the purchase price over the fair
value  of  the assets and liabilities acquired was recorded as goodwill which is
being  amortized  over  a  period  of  40  years.

The following table reflects the allocation of fair value to the assets acquired
and  liabilities  assumed  in the Old Safety-Kleen Acquisition ($ in thousands):

          Fair value of net assets acquired:
            Property, plant and equipment         $  631,688
            Intangible assets - permits               75,000
            Intangible assets - software              50,000
            Intangible assets - customer list        220,000
            Intangible assets - goodwill           1,346,977
            Liabilities triggered by acquisition    (165,900)
            Environmental liabilities assumed        (89,807)
            Debt                                    (217,858)
            Deferred tax liabilities, net            (34,694)
            Other assets and liabilities, net        (14,064)
                                                  -----------
          Purchase price                          $1,801,342
                                                  ===========

Identifiable  intangible  asset values were established by independent appraisal
based on discounted projected future earnings and are being amortized over their
economic  lives,  as  follows:  5 years for software, 40 years for permits and a
range  of  11  to  30  years  for  customer  lists.

Included  in  liabilities triggered by the acquisition are a fee associated with
Old Safety-Kleen's termination of a merger agreement with another company, stock
option  redemptions,  and  change  in control payments, all of which represented
liabilities  of  Old  Safety-Kleen  at  the  date  of  acquisition.

During  the  second  quarter  of  fiscal year 1999, the Company removed from the
consolidated  financial  statements  approximately $117.9 million of goodwill in
connection  with  the  sale  and deconsolidation of the European operations (see
Note  5).  During  the  third  quarter of fiscal year 1999, the Company recorded
adjustments  to the initially allocated fair values, primarily related to legal,
environmental,  and  tax exposures and adjustments related to the carrying value
of certain assets, resulting in a net increase to goodwill of $52.2 million.  In
fiscal  2000,  additional  goodwill of $19.0 million was recorded related to the
recognition  of tax contingencies existing at the date of acquisition.  Both the
third  quarter  fiscal 1999 and the fiscal 2000 adjustments are reflected in the
amounts  presented  above.  Also,  as  discussed  in  Note 2, valuation reserves
related to the acquirer's deferred tax assets were reversed upon the acquisition
of  Old  Safety-Kleen.  The  resulting  $96.2  million reduction in goodwill and
deferred  taxes  has  been  reflected  in  the  amounts  disclosed  above.

The  supplemental  unaudited  pro forma consolidated information set forth below
presents  the  Company's results of operations on a basis which assumes that the
Rollins Acquisition and the Safety-Kleen Acquisition were closed on September 1,
1996.

<TABLE>
<CAPTION>
                                                                 1998          1997
                                                             ------------  ------------
<S>                                                          <C>           <C>
                                                              (unaudited)   (unaudited)
Revenues                                                     $ 1,742,239   $ 1,769,054
Loss before extraordinary items                                 (116,680)     (404,472)
Net loss                                                        (135,463)     (404,472)
Basic and diluted loss per share before extraordinary items  $     (1.34)  $     (4.66)
Basic and diluted loss per share                             $     (1.56)  $     (4.66)
</TABLE>


                                      F-27
<PAGE>
The  supplemental  unaudited  pro  forma results of operations are presented for
informational  purposes  only and are not intended to reflect the future results
of  operations  of the Company or what the results of operations would have been
had  the  Company owned and operated these businesses as of the beginning of the
periods  presented.

OTHER  ACQUISITIONS

During  fiscal  years  2000,  1999 and 1998, the Company completed various other
acquisitions of stock and assets.  All of these acquisitions have been accounted
for  under  the  purchase  method  of  accounting.  The Company has reported the
results  of  operations  for  each  of these acquired companies from the date of
acquisition.  The  Company  has not included these acquisitions in the pro forma
financial  information  presented  above  as  the results from the operations of
these  acquired  companies  and  assets  are  not material.  The following table
summarizes  these  acquisitions:

                                                2000      1999     1998
                                              ---------  -------  -------
     Number of acquisitions                          3         7        1
                                              =========  =======  =======

     Total purchase price paid                $ 25,513   $13,910  $16,000
     Less: net (assets) liabilities acquired   (18,917)    3,118    5,062
     Goodwill recorded                        $  6,596   $17,028  $21,062
                                              =========  =======  =======

Goodwill  on  these  acquisitions  is  amortized  over  40  years.

5.  SALE  OF  EUROPEAN  OPERATIONS

On December 23, 1998, the Company announced the recapitalization of its European
operations and the formation of a new entity, Safety-Kleen Europe, Limited.  The
recapitalization  was  based  on  a  total  enterprise  value of $190.0 million,
including investments in Safety-Kleen Europe, Limited by Electra Fleming and the
senior  management  group  of Safety-Kleen Europe, Limited.  In exchange for the
contribution  of  the  European  operations  of  Old  Safety-Kleen,  the Company
received  a  44%  equity  interest  in  Safety-Kleen  Europe, Limited and $154.0
million  in  gross  cash  proceeds, including $22.0 million related to dividends
previously  declared.  Electra  Fleming,  a  third party, purchased a 44% equity
interest,  and  the senior management group acquired a 12% equity interest (on a
fully-diluted  basis).  The  proceeds  from  the  sale  were  used  to  pay down
borrowings  under  the  revolver  tranche  of  the  Senior Credit Facility.  The
allocation  of  fair  value  of  net  assets  assumed  in  the  Old Safety Kleen
Acquisition  was revised to reflect the enterprise value based on the sale price
of  the  Company's  56%  equity interest in Safety Kleen Europe, resulting in no
gain  or  loss  on  the  transaction.

On August 11, 2000, SK Europe, Inc., an indirect subsidiary of the Company, sold
its  remaining  44%  interest in Safety-Kleen Europe Limited to Electra European
Fund  LP.  The  Company  received  $34.4  million in cash and subject to certain
contingencies, an additional $1.3 million in deferred payments.  The transaction
resulted  in  a  loss before taxes of $5.3 million, including the recognition of
$4.0  million  of  cumulative  foreign  currency  losses.

Effective  December  23,  1998, the Company ceased to consolidate the results of
the  European  operations  and began to account for the investment by the equity
method.

6.  ACCOUNTS  RECEIVABLE

Accounts  receivable  at  August  31, 2000, 1999, 1998 and 1997 consisted of the
following  ($  in  thousands):

<TABLE>
<CAPTION>
                                   2000       1999       1998       1997
                                 ---------  ---------  ---------  ---------
<S>                              <C>        <C>        <C>        <C>
Trade accounts receivable        $376,423   $283,270   $269,625   $166,049
Allowance for doubtful accounts   (85,253)   (20,074)   (10,940)    (7,308)
Other                              16,172     28,530     19,799      5,111
                                 ---------  ---------  ---------  ---------
                                 $307,342   $291,726   $278,484   $163,852
                                 =========  =========  =========  =========
</TABLE>


                                      F-28
<PAGE>
7.  ACCRUED  OTHER  LIABILITIES

Accrued  other  liabilities at August 31, 2000, 1999, 1998 and 1997 consisted of
the  following  ($  in  thousands):

<TABLE>
<CAPTION>
                                2000      1999      1998     1997
                               -------  --------  --------  -------
<S>                            <C>      <C>       <C>       <C>
Accrued interest payable       $ 2,062  $ 24,758  $ 30,901  $12,206
Accrued salaries and benefits   33,110    37,222    47,247   21,137
Accrued legal                    1,041     8,684     5,628    1,775
Accrued insurance                7,903    14,335    18,278    6,127
Other                           25,095    39,108    61,775   12,508
                               -------  --------  --------  -------
  Total                        $69,211  $124,107  $163,829  $53,753
                               =======  ========  ========  =======
</TABLE>

8.  LONG-TERM  DEBT

Long-term  debt  at  August  31,  2000,  1999,  1998  and  1997 consisted of the
following  ($  in  thousands):

<TABLE>
<CAPTION>
                                                           2000          1999          1998         1997
                                                       ------------  ------------  ------------  ----------
<S>                                                    <C>           <C>           <C>           <C>
Debtor-in-Possession Credit Agreement                  $        --   $        --   $        --   $      --
                                                       ------------  ------------  ------------  ----------
Other Domestic Borrowings:
  Senior Credit Facility
    Term Loans                                           1,137,750     1,171,250     1,238,250     315,000
    Revolver                                               340,000       113,000       208,000          --
  Senior Subordinated Notes, due June 1, 2008,
    with an interest rate of 9.25%                         325,000       325,000       325,000          --
  Senior Notes, due May 15, 2009, with an interest
    rate of 9.25%                                          225,000       225,000            --          --
  Promissory note, due May 2003, with an interest
    rate of 5.245%                                          60,000        60,000        60,000      60,000
  Industrial revenue bonds, due 2003-2027, with
    fixed interest rates from 6.0% to 7.75%                 90,900        90,900        90,900     141,900
Capital leases                                               8,092         8,349            --          --
Short-term borrowings                                           --        24,739         3,971          --
Other                                                        3,333         3,018         2,675         967
                                                       ------------  ------------  ------------  ----------
                                                         2,190,075     2,021,256     1,928,796     517,867
                                                       ------------  ------------  ------------  ----------
Canadian Borrowings
--------------------
Senior Credit Facility                                      48,269        53,245        60,504      59,956
Canadian Operating Facility                                 17,152        20,515         1,506      10,864
                                                       ------------  ------------  ------------  ----------
                                                            65,421        73,760        62,010      70,820
                                                       ------------  ------------  ------------  ----------
  Total debt                                             2,255,496     2,095,016     1,990,806     588,687
Less: Current portion not subject to compromise            (65,421)   (2,070,224)   (1,975,106)   (572,987)
Less: Liabilities subject to compromise (see Note 11)   (2,190,075)           --            --          --
                                                       ------------  ------------  ------------  ----------
  Long-term debt                                       $        --   $    24,792   $    15,700   $  15,700
                                                       ============  ============  ============  ==========
</TABLE>


DEBTOR-IN-POSSESSION  (DIP)  CREDIT  AGREEMENT

On  July  19,  2000,  the  Bankruptcy Court granted final approval of a one-year
$100.0  million Revolving Credit, Term Loan, and Guaranty Agreement underwritten
by  the Toronto Dominion Bank as general administrative agent and the CIT Group,
Inc.  as  collateral  agent  (the  "DIP Facility") with sublimits for letters of
credit  of  $35.0  million.

Proceeds  from the DIP Facility may be used to fund postpetition working capital
and for other general corporate purposes during the term of the DIP Facility and
to  pay  pre-petition claims of critical vendors.  The $35.0 million sublimit on
letters  of  credit  is further stratified into $15.0 million available for auto
liability,  general  liability  and  workman's compensation insurance for fiscal
year  2001;  $15.0  million  for bonding; and $5.0 million for limited corporate
purposes.  The Debtor and the Creditor have agreed to modify the DIP Facility to
include  financial  covenants, including capital expenditure limitations.  As of
August 31, 2000, no amounts had been drawn on the DIP Facility and $15.0 million
of  letters  of  credit  had been issued.  The Debtors are jointly and severally
liable  under  the  DIP  Facility.


                                      F-29
<PAGE>
The DIP Facility benefits from superpriority claims status as provided for under
the Bankruptcy Code.  Under the Bankruptcy Code, a superpriority claim is senior
to  unsecured pre-petition claims and all other administrative expenses incurred
in  a  Chapter  11  case.    As  security, the DIP Facility lenders were granted
certain  priority,  perfected liens on certain of the Debtors' assets.  Pursuant
to the final order approving the DIP Facility, such liens are not subordinate to
or  pari  passu  with any other lien or security interest.  Borrowings under the
DIP  Facility  are  priced  at  LIBOR  plus 3% or prime plus 1% depending on the
nature  of the borrowings.  Letters of credit are priced at 3% per annum (plus a
fronting  fee  of  0.25%  to  the  Agent) on the outstanding face amount of each
Letter  of  credit.  In addition, the Company pays a commitment fee of 0.50% per
annum on the unused amount of the DIP Facility, payable monthly in arrears.  The
DIP  Facility  matures on the earlier of January 31, 2002, or the effective date
of  a  plan  of  reorganization.

See  Note  26  for  discussion  of  non-compliance  waivers  related  to certain
affirmative  covenants  within  the  DIP  Facility.

OTHER  DOMESTIC  BORROWINGS

Senior  Credit  Facility  -- In April 1998, the Company repaid its then existing
------------------------
bank  credit facility and established a $2.2 billion Senior Credit Facility (the
"Senior Credit Facility") pursuant to a credit agreement between the Company and
a  syndicate of banks and other financial institutions.  In connection with this
refinancing, the Company recognized an extraordinary loss in fiscal year 1998 of
approximately  $18.8  million related to the write-off of previous deferred debt
issuance  costs  and repayment penalties.  In June 1998, the availability of the
Senior Credit Facility was permanently reduced by $325 million to $1.875 billion
by  the  subsequent  issuance  of the Senior Subordinated Notes described below.
The  Senior  Credit Facility consists of five parts: (i) a $550 million six-year
Senior  Secured  Revolving  Credit Facility with a $200 million letter of credit
sublimit  and  $400  million  sublimit  for  loans (the "Revolver"), (ii) a $455
million  six-year  Senior  Secured  Amortizing  Term  Loan,  (iii) a $70 million
six-year  Senior  Secured  Amortizing  Term  Loan, (iv) a $400 million minimally
amortizing  seven-year Senior Secured Term Loan and (v) a $400 million minimally
amortizing  eight-year  Senior Secured Term Loan.  The term loans referred to in
clauses  (ii),  (iii),  (iv)  and (v) are collectively referred to herein as the
"Term  Loans."

Interest  costs  on  the Senior Credit Facility are reset periodically, at least
annually,  and vary depending on the particular facility and whether the Company
chooses  to  borrow  under  Eurodollar  or non-Eurodollar loans.  Interest rates
applicable  to the Senior Credit Facility ranged from 7.56% to 12.88%, including
a  2%  default  premium,  effective  June  1,  2000.

As  of  August  31,  2000, the Term Loans have been drawn in full and borrowings
outstanding  under  the Revolver total $340 million. In addition, there were $84
million  of  letters  of  credit  issued  under the terms of the Revolver.  As a
result of the Debtors' Chapter 11 filings, all additional availability under the
Revolver has been terminated, although the letters of credit remain outstanding.

Domestic borrowings of Safety-Kleen Services, Inc. (formerly known as LES, Inc.)
(the "Domestic Borrower") under the Senior Credit Facility are collateralized by
substantially  all  of  the  non-hazardous tangible and intangible assets of the
domestic subsidiaries of the Domestic Borrower, plus 65% of the capital stock of
the  Company's  primary  Canadian  subsidiaries,  Safety-Kleen (Canada) Inc. and
Safety-Kleen  Ltd. (the "Canadian Borrower").  In addition, substantially all of
the  capital  stock  of  the  Domestic Borrower and its wholly-or majority-owned
domestic  subsidiaries is pledged to the Domestic Senior Credit Facility lenders
(the  "Domestic  Lenders")  and  such  domestic  subsidiaries  guarantee  the
obligations  of  the  Domestic  Borrower  to  the  Domestic  Lenders.

Senior  Subordinated  Notes  -- On May 29, 1998, The Domestic Borrower, a wholly
---------------------------
owned  subsidiary  of the Company, issued $325 million 9.25% Senior Subordinated
Notes  due  2008 (the "1998 Notes") in a Rule 144A offering.  In accordance with
an  Exchange  and  Registration  Rights  Agreement  entered  at  the time of the
issuance  of the 1998 Notes, the Company filed a registration statement with the
Securities  and  Exchange  Commission  on  June  24, 1998, pursuant to which the
Company  exchanged  the 1998 Notes for notes of the Company with terms identical
to  the  1998  Notes.  Net  proceeds  from the sale of the 1998 Notes, after the
underwriting  fees  and  other expenses, were approximately $316.8 million.  The
proceeds  were  used  to repay a portion of the borrowings outstanding under the
Senior  Credit  Facility.

The  1998  Notes  mature  on June 1, 2008.  Interest is payable semiannually, on
December  1 and June 1.  The 1998 Notes will be redeemable, in whole or in part,
at  the option of the Company, at any time prior to June 1, 2003 at a redemption
price equal to the greater of (i) 100% of the principal amount of the 1998 Notes
or (ii) the sum of the present values of 104.625% of the principal amount of the
1998  Notes  and  the  scheduled  payments  of  interest  through  June 1, 2003,
discounted  to  redemption  date on a semi-annual basis at the Adjusted Treasury
Rate,  as  defined,  plus  50  basis  points,  together  with accrued and unpaid
interest, if any. The 1998 Notes will be redeemable, in whole or in part, at the
option  of  the  Company at any time on or after June 1, 2003 at 104.625% of the
principal  amount declining ratably in annual increments to par on or after June
1,  2006.  In  addition, prior to June 1, 2001, the Company may redeem up to 35%
of  the  original  aggregate  principal  amount  of  the 1998 Notes with the net
proceeds  of  one or more public equity offerings at a redemption price equal to
109.25%  of  the  principal  amount,  plus  accrued and unpaid interest.  Upon a
change  in control of the Company, each holder of the 1998 Notes may require the
Company to repurchase all or a portion of the holder's 1998 Notes at 101% of the
principal  amount,  plus  accrued  interest.


                                      F-30
<PAGE>
The  1998  Notes  are  general  unsecured  obligations of the Domestic Borrower,
subordinated in right of payment to all existing and future senior indebtedness,
as  defined, of the Domestic Borrower.  The 1998 Notes will rank senior in right
of  payment to all existing and future subordinated indebtedness of the Domestic
Borrower,  if  any.  The  payment  of  the 1998 Notes are guaranteed on a senior
subordinated  basis  by  Safety-Kleen  Corp.  and  are  jointly  and  severally
guaranteed  on  a  senior  subordinated  basis by the Domestic Borrower's wholly
owned  domestic  subsidiaries.  No  foreign  direct  or  indirect  subsidiary or
non-wholly  owned  domestic  subsidiary  is  an  obligor  or  guarantor  on  the
financing.

Senior  Notes  --  On May 17, 1999, the Company issued $225 million 9.25% Senior
-------------
Notes  due  2009  (the  "1999  Notes")  in  a  Rule  144A  offering  which  were
subsequently  exchanged  for  substantially  identical  notes  in  an  offering
registered with the SEC in September 1999.  Net proceeds, after the underwriting
fees  and  other  expenses,  were  approximately  $219  million and were used to
finance  the  cash  portion  of  the  purchase  price  for the repurchase of the
pay-in-kind  debenture  ("PIK Debenture") (see Note 9), for expenses relating to
the  repurchase  and  for  general  corporate  purposes.

The  1999  Notes  mature on May 15, 2009, with interest payable semi-annually on
May 15 and November 15.  The 1999 Notes will be redeemable, in whole or in part,
at  the option of the Company, at any time and from time to time at a redemption
price  as  defined  in  the indenture.  Upon a change in control of the Company,
each  holder  of  the  1999 Notes may require the Company to repurchase all or a
portion  of  such  holder's  1999 Notes at 101% of the principal amount thereof,
plus  accrued  interest.

The  1999  Notes  are  unsecured  and  rank equally with all existing and future
senior  indebtedness  and  senior  to  all  existing  and  future  subordinated
indebtedness.  The  Notes  are  not  guaranteed  by  the Company's subsidiaries.

The  Senior Credit Facility, the 1998 Notes and the 1999 Notes contain negative,
affirmative  and  financial  covenants  including  covenants  restricting  debt,
guarantees,  liens,  mergers  and  consolidations, sales of assets, transactions
with affiliates, the issuance of stock to third parties and payment of dividends
and  establishing  a total leverage ratio test, a fixed charge coverage test, an
interest  coverage  ratio  test and a maximum contingent obligation to operating
cash flow ratio test.  As a result of the Chapter 11 Filing, the Company was not
in compliance with the covenants at August 31, 2000, and accordingly, the entire
portion  of  domestic  borrowings  was  classified  as  liabilities  subject  to
compromise.  As  a  result of violations of certain affirmative and/or financial
covenants, as well as certain cross default provisions, substantially all of the
Company's  long-term  debt,  is  classified  as  a  current  liability  in  the
accompanying  consolidated  balance sheets as of August 31, 1999, 1998 and 1997,
respectively.

Other  Borrowings  -- The $60.0 million promissory note and $25.7 million of the
Industrial  revenue  bonds are guaranteed by Laidlaw (see Note 21) and the bonds
are  secured  by  the  properties  financed.

As  of  August  31,  1999  and  1998,  respectively, Bank of America provided an
unsecured  operating line of credit with outstanding borrowings of approximately
$24.7  million  and  $4.0  million.

In  connection  with  the acquisition of Old Safety-Kleen and in accordance with
the  terms  of the notes due to the change of control of the issuer, the Company
repurchased  during  fiscal 1998 substantially all of the outstanding 9.25% $100
million  Notes  of Old Safety-Kleen due September 15, 1999, pursuant to a tender
offer  to  the  note  holders  at  a  price  of  approximately  105%.

CANADIAN  BORROWINGS

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

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


                                      F-31
<PAGE>
Borrowings  by  the  Canadian  Borrower under the Senior Credit Facility and the
Canadian  Operating  Facility  are  collateralized  by  substantially all of the
tangible  personal  property  of  the Company's Canadian subsidiaries and by the
guarantees  of the Domestic Borrower's domestic, wholly-owned and majority-owned
subsidiaries.  Additionally,  35%  of  the common stock of Safety-Kleen (Canada)
Inc.  and  of  the  Canadian Borrower is pledged in favor of the Canadian Senior
Credit  Facility  Lenders  and  the  Canadian  Operating  Facility  Lenders.

INTEREST  EXPENSE

The  Company  has  entered  into interest rate swap agreements to alter interest
rate  exposures  (see  Note  14).  Interest expense incurred under the Company's
credit  facilities  and  other  borrowings  was  $141.9 million, $186.2 million,
$120.3  million  and $45.2 million (net of interest income of $3.6 million, $7.6
million, $10.2 million and $4.4 million) for fiscal years ended August 31, 2000,
1999,  1998  and  1997, respectively (excluding contractual interest on domestic
borrowings  of  $60.0 million after the June 9, 2000 bankruptcy filing (see Note
1).

9.  SUBORDINATED  CONVERTIBLE  DEBENTURE

On  May  15, 1997, the Company issued a $350 million 5% subordinated convertible
PIK  Debenture  due May 15, 2009, to Laidlaw, in partial payment for the Rollins
Acquisition  described  in  Note  4.

Interest  on  the PIK Debenture was payable semiannually, on November 15 and May
15  until  maturity.  Interest  payments  due  during  the first two years after
issuance  of  the PIK Debenture were required to be satisfied by the issuance of
the  Company's  common shares, based on the market price of the common shares at
the  time  the  interest  payments were due.  At the Company's option, any other
interest or principal payments, other than optional early redemption, could have
been  satisfied  by issuing common shares, based on the market price at the time
such  payments are due.  During fiscal years ended August 31, 1999 and 1998, the
Company  issued  to Laidlaw, in satisfaction of interest payments due, 1,545,399
common  shares  and  980,103  common  shares,  respectively.

On  August 27, 1999, the Company repurchased the PIK Debentures for an aggregate
purchase  price comprised of (i) $200 million in cash, (ii) 11,320,755 shares of
common stock and (iii) 376,858 shares of common stock in satisfaction of accrued
and  unpaid  interest  on  the  PIK Debenture to the date of purchase.  The cash
portion  of  the purchase price was financed with the issuance of the 1999 Notes
(see  Note  8).

As  a result of violations of certain affirmative and/or financial covenants, as
well  as  certain cross default provisions, the PIK Debenture is classified as a
current  liability  in the accompanying consolidated balance sheets as of August
31,  1998  and  1997,  respectively.

As  discussed  in  Note 12, the Company filed an action against Laidlaw Inc. and
its  affiliate  companies Laidlaw Transportation, Inc. and Laidlaw International
Finance  Corporation  to  recover  funds  related  to  the repurchase of the PIK
Debentures  of  over  $200  million.

10.  CLOSURE,  POST-CLOSURE  AND  ENVIRONMENTAL  REMEDIATION  LIABILITIES

The  Company  records environmentally related accruals for both its landfill and
non-landfill  operations.  Refer  to  Note  3  for  further  discussion  of  the
Company's  methodology  for  estimating  and  recording  these  accruals.

Final closure and post-closure liabilities -- The Company has material financial
------------------------------------------
commitments  for  the  costs  associated  with requirements of the United States
Environmental  Protection  Agency  (the  "EPA"),  and  the comparable regulatory
agency  in  Canada  for  the  final  closure  and post-closure activities at the
majority  of  its  facilities.  In  the  United  States,  the  final closure and
post-closure  requirements  are  established under the standards of the EPA, and
are  implemented  and applied on a state-by-state basis.  Estimates for the cost
of  these  activities  are developed by the Company's engineers, accountants and
external  consultants,  based  on  an  evaluation  of  site-specific  facts  and
circumstances,  including  the  Company's  interpretation  of current regulatory
requirements  and proposed regulatory changes.  Such estimates may change in the
future  because  of  permit  modifications  and/or  changes  in  legislation  or
regulations.  Final closure and post-closure plans are established in accordance
with  the  individual  site  permit  requirements.  Post-closure  periods  are
generally  expected  to  be for a period of 30 years after landfill closure, but
may  extend  to a period of 100 years after landfill closure.  See Note 12 for a
discussion  of  the  Pinewood  facility.

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


                                      F-32
<PAGE>
Remedial  liabilities,  including  Superfund  liabilities  --  The  Company
---------------------------------------------------------
periodically  evaluates  potential remedial liabilities at sites that it owns or
operates  and  at  sites  to  which  it  has  transported  or disposed of waste,
including  approximately 57 Superfund sites as of August 31, 2000.  The majority
of  the  issues at Superfund sites relates to allegations that its subsidiaries,
or  their  predecessors,  transported waste to the facilities in question, often
prior  to  the  acquisition  of  such  subsidiaries by the Company.  The Company
periodically  reviews  and  evaluates  sites  requiring  remediation,  including
Superfund  sites,  giving  consideration  to  the nature (i.e., owner, operator,
transporter  or  generator)  and  the  extent  (i.e., amount and nature of waste
hauled  to  the  location,  number of years of site operations or other relevant
factors)  of  the  Company's  alleged  connection  with the site, the regulatory
context  surrounding  the site, the accuracy and strength of evidence connecting
the  Company  to  the  location, the number, connection and financial ability of
other  named  and  unnamed  potentially  responsible  parties and the nature and
estimated  cost  of  the  likely remedy.  Where the Company concludes that it is
probable  that a liability has been incurred, provision is made in the financial
statements,  based  upon  management's  judgment  and  prior experience, for the
Company's  best estimate of the liability.  Such estimates, which are inherently
subject  to  change, are subsequently revised if and when additional information
becomes  available.

Revisions  to  remediation reserve requirements may result in upward or downward
adjustments to income from operations in any given period.  The Company believes
that its extensive experience in the environmental services business, as well as
its  involvement  with  a large number of sites, provides a reasonable basis for
estimating  its  aggregate  liability.  It  is  reasonably  possible  that
technological,  regulatory  or  enforcement  developments,  the  results  of
environmental  studies  or  other  factors  could  necessitate  the recording of
additional  liabilities  and/or  the  revision of currently recorded liabilities
that could be material.  The impact of such future events cannot be estimated at
the  current  time.

Discounted  environmental  liabilities  --  In  instances  in  which the Company
--------------------------------------
believes  that  both  the amount of a particular environmental liability and the
timing  of  the payments are fixed or reliably determinable, its cost in current
dollars  is inflated using estimates of future inflation rates (2.9%, 3.6%, 3.6%
and  3.6%  at  August  31,  2000,  1999,  1998 and 1997, respectively) until the
expected  time  of payment, then discounted to its present value using risk-free
discount  rates  (5.8%,  8.5%,  8.5% and 8.5% at August 31, 2000, 1999, 1998 and
1997,  respectively).  The  portion  of  the  Company's  recorded  environmental
liabilities  (including  closure, post-closure and remedial obligations) that is
not  inflated  or  discounted  was approximately $236.0 million, $233.5 million,
$223.5  million  and  $152.8  million  at  August 31, 2000, 1999, 1998 and 1997,
respectively.  Had  the Company not discounted any portion of its liability, the
amount  recorded  would  have  been increased by approximately $132.1 million at
August  31,  2000.  The  Company  estimates  it  will  provide $223.4 million in
additional  environmental reserves (including the inflation and discount factors
referred  to  above)  over  the  remaining site lives of its facilities based on
current  estimated  costs.

The  Company  has recorded liabilities for closure, post-closure and remediation
obligations  as  of  August  31,  2000,  1999,  1998  and  1997 as follows ($ in
thousands):

<TABLE>
<CAPTION>
                                                     2000      1999      1998      1997
                                                   --------  --------  --------  --------
<S>                                                <C>       <C>       <C>       <C>
Current portion of environmental liabilities       $ 41,122  $ 39,204  $ 45,434  $ 27,376
Non-current portion of environmental liabilities    285,634   262,462   240,533   199,326
Liabilities subject to compromise (see Note 11)       9,579        --        --        --
                                                   --------  --------  --------  --------
    Total                                          $336,335  $301,666  $285,967  $226,702
                                                   ========  ========  ========  ========
</TABLE>


                                      F-33
<PAGE>
In  the  following table reserves for environmental matters are classified as of
each  balance  sheet  date  based  on  their  classification at August 31, 2000.
Reserves  for closure, post-closure and remediation as of August 31, 2000, 1999,
1998  and  1997  respectively  are  as  follows  ($  in  thousands):

<TABLE>
<CAPTION>
                                               2000      1999      1998      1997
                                             --------  --------  --------  --------
<S>                                          <C>       <C>       <C>       <C>
Landfill facilities:
  Cell closure                               $ 26,028  $ 27,716  $ 26,843  $ 30,328
  Final closure                                17,732    12,635    10,814     9,314
  Post-closure                                 59,198    30,384    25,627    22,635
  Remediation                                  21,562    15,863    10,164    14,553
                                             --------  --------  --------  --------
                                              124,520    86,598    73,448    76,830
                                             --------  --------  --------  --------
Non-landfill facilities:
  Remediation, closure and post-closure for
    closed sites                               92,735   100,824   113,997    92,402
  Remediation (including Superfund) for
    open sites                                119,080   114,244    98,522    57,470
                                             --------  --------  --------  --------
                                              211,815   215,068   212,519   149,872
                                             --------  --------  --------  --------
                                             $336,335  $301,666  $285,967  $226,702
                                             ========  ========  ========  ========
</TABLE>

All  of  the  landfill  facilities  included in the table above are active as of
August  31,  2000,  except that the estimated remaining airspace at the Pinewood
facility  was  reduced to zero in 2000.  Total closure and post-closure reserves
related to the Pinewood facility were $44.6 million, $11.8 million, $9.5 million
and  $8.6  million as of August 31, 2000, 1999, 1998 and 1997, respectively.  At
August  31,  2000, the Company has recorded approximately $400,000 for all known
remediation  matters  at  Pinewood.  The South Carolina Department of Health and
Environmental Control has required that an Environmental Impairment Fund ("EIF")
be  established  for  any  potential  environmental  cleanup  and restoration of
environmental  impairment  at  the Pinewood facility (see Notes 3 and 12).  With
respect  to  the EIF funding requirement, no environmental liabilities have been
identified  which  require  accrual.

Anticipated payments (based on current estimated costs) of closure, post-closure
and  remediation  liabilities for each of the next five years and thereafter are
as  follows  ($  in  thousands):

Year Ended August 31,
  2001                                                    $  41,122
  2002                                                       39,897
  2003                                                       32,765
  2004                                                       30,138
    2005                                                     17,890
  Thereafter                                                397,946
                                                          ----------
    Subtotal                                                559,758
    Less: Reserves to be provided (including discount of
             $132.1 million) over remaining site lives     (223,423)
                                                          ----------
       Total                                              $ 336,335
                                                          ==========

11.  LIABILITIES  SUBJECT  TO  COMPROMISE

The  principal  categories  of  claims  classified  as  liabilities  subject  to
compromise  under reorganization proceedings are identified  below.  All amounts
below  may be subject to future adjustment depending on Bankruptcy Court action,
further  developments  with  respect  to  disputed  claims,  or  other  events,
including  the  reconciliation  of  claims  filed  with  the bankruptcy court to
amounts  included  in  the  Company's  records  (see  Note  12).  Additional
pre-petition  claims  may arise from rejection of additional executory contracts
or  unexpired  leases by the Company.  Under a confirmed plan of reorganization,
all  pre-petition  claims  may  be paid and discharged at amounts  substantially
less  than  their  allowed  amounts.


                                      F-34
<PAGE>
Recorded  liabilities  --  On a consolidated basis, recorded liabilities subject
---------------------
to  compromise  under Chapter 11 proceedings as of August 31, 2000, consisted of
the  following  ($  in  thousands):

          Accrued litigation                          $   19,891
          Derivative liabilities                          69,461
          Trade accounts payable                         126,454
          Accrued insurance liability                     18,019
          Environmental liabilities                        9,579
          Accrued interest                                67,147
          Senior Credit Facility:
              Term loans                               1,137,750
              Revolver                                   340,000
              Adequate protection payments               (18,950)
          Senior Subordinated Notes                      325,000
          Senior Notes                                   225,000
          Promissory note                                 60,000
          Industrial revenue bonds                        90,900
          Other                                           30,722
                                                      -----------
                                                      $2,500,973
                                                      ===========

As a result of the bankruptcy filing, principal and interest payments may not be
made  on  pre-petition  debt  without  Bankruptcy  Court  approval  or  until  a
reorganization  plan defining the repayment terms has been confirmed.  The total
interest  on  pre-petition debt that was not paid or charged to earnings for the
period  from  June 9, 2000, to August 31, 2000, was $60.0 million. Such interest
is  not  being  accrued  since  it is not probable that it will be treated as an
allowed  claim.  The Bankruptcy Code generally disallows the payment of interest
that  accrues  postpetition  with  respect  to unsecured or undersecured claims.

Contingent  liabilities  --  Contingent  liabilities as of the Chapter 11 filing
-----------------------
date  are  also  subject  to  compromise.  At  August  31, 2000, the Company was
contingently  liable  to  banks,  financial  institutions  and  others  for
approximately $90 million for outstanding letters of credit and $22.6 million of
performance  bonds  securing performance of sales contracts and other guarantees
in  the  ordinary  course  of  business.

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

12.  COMMITMENTS  AND  CONTINGENCIES

LEASE  COMMITMENTS

The Company enters into operating and capital leases primarily for real property
and  vehicles  under  various  terms  and conditions.   As discussed in Note 11,
commitments  related  to  operating and capital leases are subject to compromise
and  additional  claims  may  arise from the rejection of unexpired leases.  The
following  table presents the contractually stated minimum future lease payments
($  in  thousands):

<TABLE>
<CAPTION>
                                                           CAPITAL   OPERATING
Year Ended August 31,                                      LEASES      LEASES
                                                          ---------  ----------
<S>                                                       <C>        <C>
  2001                                                    $    926   $   49,011
  2002                                                         926       36,876
  2003                                                         926       29,725
  2004                                                         926       14,640
  2005                                                         926        8,523
  Thereafter                                                 7,714       20,444
                                                          ---------  ----------
    Total minimum payments                                  12,344   $  159,219
                                                                     ==========
  Less: Amount representing interest                        (4,252)
                                                          ---------
  Obligations under capital leases subject to compromise  $  8,092
                                                          =========
</TABLE>

Amortization  expense  of property, plant and equipment under capital leases was
$845,000  in  2000  and  $599,000  in  1999.


                                      F-35
<PAGE>
Assets  recorded  under capitalized lease agreements included in property, plant
and  equipment  consist  of  the following as of August 31, 2000, 1999, 1998 and
1997  ($  in  thousands):

                                     2000     1999     1998   1997
                                   --------  -------  -----  -----
Property under capital leases      $ 8,450   $8,450   $  --  $  --
Accumulated amortization            (1,444)    (599)     --     --
                                   --------  -------  -----  -----
Net property under capital leases  $ 7,006   $7,851   $  --  $  --
                                   ========  =======  =====  =====

A  significant  amount of the assets recorded under capital leases at August 31,
2000  and  1999,  related  to  an  aircraft  which was returned to the lessor in
September  2000.

Rent  expense for all operating leases amounted to $56.4 million, $62.2 million,
$43.6  million  and  $36.8  million  in 2000, 1999, 1998 and 1997, respectively.

LIABILITY  INSURANCE

The  Company,  through  premiums  paid to Laidlaw (see Note 21), carried general
liability,  vehicle  liability,  employment  practices  liability,  pollution
liability,  directors  and  officers  liability,  worker's  compensation  and
employer's liability coverage, as well as umbrella liability policies to provide
excess  coverage over the underlying limits contained in these primary policies.
The  Company  also carried property insurance.  Effective September 1, 2000, the
Company  obtained  its  insurance  requirements  from  a  third-party  insurance
company.

The  Company's  insurance  programs  for  certain  workers compensation, general
liability  (including  product liability) and vehicle liability are self-insured
up  to  certain  limits.  All  employee-related  health  care benefits are fully
self-insured.  Claims  in  excess  of  these  self-insurance  levels  are  fully
insured.  For  self-insured  workers  compensation, general (including product),
property,  and  auto liability, the Company estimates these liabilities based on
actuarially  determined  estimates  of the incurred but not reported claims plus
any  portion  of incurred but not paid claims and premiums.  These estimates are
generally  within  a  range  of  potential  ultimate outcomes.  For self-insured
medical  liabilities,  the  Company's liabilities include both an accrual for an
estimate  of  the  incurred  but  not  reported  claims that is calculated using
historical  claims  data and an accrual for the incurred but not paid claims and
premiums.

The  Company's liabilities for unpaid and incurred but not reported claims as of
August  31,  2000, 1999, 1998 and 1997, were $35.1 million, $24.1 million, $31.2
million  and  $6.1  million,  respectively,  under  its  current risk management
program.  Certain  product  and  workers'  compensation  liabilities  have  been
classified  as  long-term liabilities based upon actuarial projections of future
claims  payments.  These  liabilities as of August 31, 2000, 1999, 1998 and 1997
were  $9.2  million,  $9.8  million,  $12.9  million  and  $0, respectively.  In
addition,  $18.0  million  of  the  $35.1 million self-insured liabilities as of
August  31, 2000 are subject to compromise.  While the ultimate amount of claims
incurred are dependent on future developments, in management's opinion, recorded
reserves  are  adequate  to  cover the future payment of claims.  However, it is
reasonably  possible  that  recorded  reserves  may not be adequate to cover the
future  payment of claims.  Adjustments, if any, to estimates recorded resulting
from  ultimate  claim payments will be reflected in results of operations in the
periods  in  which  such  adjustments  are  known.

EMPLOYMENT  AGREEMENTS

The  Company  is  party  to  employment agreements with certain executives which
provide  for  compensation  and  certain  other  benefits.  The  agreements also
provide  for  severance  payments  under  certain  circumstances.

FINANCIAL  ASSURANCE  OBLIGATIONS

As  of  August  31, 2000, the Company provided financial assurances by insurance
policies  and  performance  bonds  to  the  applicable  regulatory  authorities,
totaling  approximately  $500  million, in connection with closure, post-closure
and  corrective  action  requirements  of  certain  facility  operating permits.
Letters  of  credit  of  approximately  $44  million  are  held  to meet various
financial  assurance  requirements.  Restricted assets of $31.5 million are held
in  trust  for  landfill closure, post-closure and environmental impairment (see
Note  3).  Insurance  policies with limits of approximately $92 million are held
to  cover  any  bodily  injury  or  property  damage  to third parties caused by
accidental  occurences  at  certain  of  the  Company's  facilities.


                                      F-36
<PAGE>
LEGAL  PROCEEDINGS

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

The Company has claims where management has assessed that an unfavorable outcome
is probable.  The aggregate estimated potential loss on these claims ranges from
approximately  $20.0  million to approximately $71.1 million and the Company has
recorded  reserves  of  approximately  $26.6 million, including $19.9 subject to
compromise,  representing  its  best  estimate  of  losses  to  be  incurred.

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

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

CHAPTER  11  FILING

Safety-Kleen  Corp.  and  73  of  its  wholly  owned  domestic  subsidiaries
(collectively, the "Debtors") each filed a voluntary petition for reorganization
under  the  Bankruptcy  Code  on  June 9, 2000.  The petitions were filed in the
United  States  Bankruptcy  Court for the District of Delaware [Case No. 00-2303
(PJW)].  Management  of  the  Company  continues  to operate the business of the
Debtors as a debtor-in-possession under Sections 1107 and 1108 of the Bankruptcy
Code.  In  this  proceeding, the Debtors intend to propose and seek confirmation
of  a plan or plans of reorganization.  Pursuant to the automatic stay provision
of  Section  362  of  the  Bankruptcy  Code,  virtually all pending pre-petition
litigation  against  the  Debtors  is  currently  stayed.

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

As  of  May  18, 2001, proofs of claim in the approximate amount of $174 billion
have  been filed against the Company and its affiliates by among others, secured
creditors,  unsecured creditors and security holders.  The Company believes that
the  amount  of  these  claims that are in excess of the $2.5 billion in accrued
liabilities  recorded  in the Consolidated Financial Statements as of August 31,
2000 as "Liabilities subject to compromise" are duplicative or without merit and
will  not  have a material effect on the Consolidated Financial Statements.  The
Company is in the process of reviewing the proofs of claim and once this process
is  complete,  will  file appropriate objections to the claims in the Bankruptcy
Court.

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

ACTION  TO  AVOID  AND  RECOVER  TRANSFERS  TO  LAIDLAW  INC.

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


                                      F-37
<PAGE>
MATTERS  RELATED  TO  INVESTIGATION  OF  FINANCIAL  RESULTS

As  previously  reported  on  March  6,  2000, the Company announced that it had
initiated an internal investigation of its previously reported financial results
and  certain  of  its accounting policies and practices following receipt by the
Company's  Board  of  Directors  of  information  alleging  possible  accounting
irregularities  that may have affected the previously reported financial results
of  the  Company  since  fiscal  year  1998.  The  internal  investigation  was
subsequently  expanded  to  include  fiscal  years  1998  and  1997.  The  Board
appointed  a  special  committee,  consisting  of  four  directors who were then
independent  outside  directors  of  the  Company,  to  conduct  the  internal
investigation (the "Special Committee  (Investigation)").  The Special Committee
(Investigation)  was  later expanded to five directors, with the addition of one
additional  independent outside director.  The Special Committee (Investigation)
engaged  the law firm Shaw Pittman, and Shaw Pittman engaged the accounting firm
Arthur  Andersen  LLP,  to  assist with the comprehensive investigation of these
matters.  The  Board placed Kenneth W. Winger, the Company's President and Chief
Executive  Officer  and  a  director,  Michael  J.  Bragagnolo,  Executive  Vice
President  and  Chief  Operating  Officer,  and  Paul  R. Humphreys, Senior Vice
President  of  Finance  and  Chief Financial Officer, on administrative leave on
March  5,  2000.  The  Company  accepted  the  resignations  of  Messrs. Winger,
Bragagnolo,  and Humphreys, as officers, in mid-May 2000 and of Mr. Winger, as a
director,  on  June 9, 2000, and subsequently terminated the employment of these
individuals  in  July 2000.  The Special Committee (Investigation) is continuing
its  investigation.

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

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

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

The  Company  is  cooperating  with  each  of  the  investigations.

FINANCIAL  ASSURANCE  ISSUES

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

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


                                      F-38
<PAGE>
Immediately  following  the  June  6, 2000, announcement that Frontier no longer
qualified  as  an  approved  surety, the Company notified the EPA of its lack of
certified  financial  statements  for  fiscal  years 1999, 1998 and 1997 and the
difficulties  that  certain  alleged  accounting  irregularities would cause the
Company in attempting to obtain compliant financial assurance for its facilities
previously  covered  by  the  Frontier  bonds.  The  Company  and  the  EPA also
contacted states in which the non-compliant facilities were located and apprised
such  states  of  these  facts.

The  Company and the EPA, acting on behalf of many, but not all affected states,
then  engaged  in negotiations resulting in the entry of a Consent Agreement and
Final  Order  ("CAFO"), which the Bankruptcy Court approved on October 17, 2000.
The main component of the CAFO is a compliance schedule for Safety-Kleen and its
affected subsidiaries to obtain compliant financial assurance for the facilities
covered  by the Frontier bonds.  The CAFO also imposes a penalty on Safety-Kleen
Services,  Inc. which, as delays have ensued in the replacement of Frontier, and
additional  states  have  joined  the  CAFO (see discussion below), has grown to
approximately  $410,000.  Under  the  agreement,  Safety-Kleen  and its affected
subsidiaries  were  required  to  obtain  compliant  financial  assurance  as
expeditiously as possible, but no later than December 15, 2000. The EPA reserved
discretion to extend the deadline to February 28, 2001, and did so.  The Company
thereafter  obtained  a  further  extension  through April 30, 2001.  Since that
date,  the  Company  has  obtained  further  extensions  from the EPA, which the
Bankruptcy  Court  approved on May 16, 2001, as follows: until July 31, 2001 for
certain  sites  and  until  September  30,  2001  for other sites where Frontier
provides  financial  assurance coverage.  Most states that have retained primary
jurisdiction  on this issue (see discussion below) have indicated that they will
accept  these same deadlines.  However, the Company has not concluded agreements
with  all  such  states,  and  at  least  one  state,  Texas,  has taken certain
enforcement actions described below.  If the Company cannot obtain financing for
the  collateral  necessary for obtaining replacement financial assurance by July
31,  2001,  for  the  designated  facilities, it has agreed with the EPA to seek
Bankruptcy  Court  approval  to  use  cash  collateral  (or  other  acceptable
alternatives) for this purpose.  The Company may seek further extensions of time
from  the  EPA  and  the  states, but the CAFO does not obligate the EPA and the
states  to  grant  such further extensions.  Although the Company has obtained a
proposal for the replacement of the Frontier coverage, there can be no assurance
that  the  Company  will be able to replace Frontier on a schedule acceptable to
the  EPA  and  the  states.

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

Under  the  CAFO,  until  such  time  as  the  affected facilities have obtained
compliant financial assurance, Safety-Kleen and its affected facilities must not
seek  to  withdraw an existing irrevocable letter of credit, which is subject to
compromise  (see  Note 11), in the amount of $28.5 million from Toronto Dominion
Bank  for  the  benefit  of  Frontier and shall take all steps necessary to keep
current  the  existing  Frontier  surety  bonds.

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

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

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


                                      F-39
<PAGE>
The  State  of  South Carolina has indicated that it will not be a Participating
State  or  a  Parallel  Action  State  for  facilities  owned  or  operated  by
Safety-Kleen  (Pinewood),  Inc.  (see  discussion  below).

The  State  of  Texas  had  set  May 31, 2001 as the deadline for replacement of
Frontier  coverage in that state. Safety-Kleen and its subsidiaries did not meet
that deadline. On June 1, 2001, the State of Texas notified Safety-Kleen and its
affected  subsidiaries that it intends to (i) seek substantial penalties for the
failure  to have compliant financial assurance; (ii) deny certain pending permit
renewal and modification applications; and (iii) revoke the registration of some
of  the  used  oil  facilities that Safety-Kleen and its subsidiaries operate in
Texas.  With  one  exception,  Safety-Kleen  and  its subsidiaries will have the
opportunity  to  assert  defenses to these actions in various administrative and
judicial  proceedings.  In the case of the exception, a permit modification, the
application  can  be  refiled  once  compliant  financial assurance is procured.
Safety-Kleen and its subsidiaries expect to obtain compliant financial assurance
at  most  or  all  of  their affected Texas facilities before the administrative
and/or  judicial  proceedings  conclude.

On  June 20,  2001, Safety-Kleen and its affected subsidiaries filed a motion in
Bankruptcy  Court  seeking  approval  of a transaction pursuant to which it will
replace  Frontier  at  more  than  100  facilities.

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

GENERAL

The Company's hazardous and industrial waste services are continuously regulated
by  federal,  state, provincial and local laws enacted to regulate the discharge
of materials into the environment or primarily for the purpose of protecting the
environment.  This inherent regulation of the Company necessarily results in its
frequently  becoming a party to judicial or administrative proceedings involving
all levels of governmental authorities and other interested parties.  The issues
that  are  involved generally relate to applications for permits and licenses by
the  Company and their conformity with legal requirements and alleged violations
of  existing permits and licenses.  At May 18, 2001, subsidiaries of the Company
were involved in eleven proceedings in which a governmental authority is a party
relating  primarily  to  activities  at  waste  treatment,  storage and disposal
facilities  where  the  Company believes sanctions involved in each instance may
exceed  $100,000.

In  the  United  States,  CERCLA  imposes financial liability on persons who are
responsible  for  the  release  of  hazardous  substances  into the environment.
Present  and  past  owners  and  operators  of  sites  which  release  hazardous
substances,  as  well  as generators, disposal arrangers and transporters of the
waste  material,  may  be strictly, jointly and severally liable for remediation
costs  and  natural  resources  damage.  At  August  31,  2000,  the Company had
identified  57  active  federal  or state-run CERCLA (Superfund) sites where the
Company  is  a  potentially responsible party ("PRP").  The Company periodically
reviews  its  status with respect to each location and the extent of its alleged
contribution  to  the  volume  of  waste at the location, the available evidence
connecting  the  Company  to that location, and the financial soundness of other
PRPs  at  the  location.

PRODUCTS  LIABILITY  CASES

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


                                      F-40
<PAGE>
SAFETY-KLEEN  (PINEWOOD),  INC.

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

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

South  Carolina law requires that hazardous waste facilities provide evidence of
financial  assurance for potential environmental cleanup and restoration in form
and  amount  to be determined by DHEC.  The Order required Pinewood to establish
and  maintain  an  Environmental  Impairment  Fund ("EIF") in the amount of $133
million  in  1994  dollars  by July 1, 2004 as financial assurance for potential
environmental  cleanup  and  restoration  of  environmental  impairment  at  the
Pinewood Facility.  The total fund requirement amount is to be adjusted annually
by  the  Implicit  Price Deflator for the Gross National Product as published by
the  U.S.  Department  of  Commerce.  The  EIF  has two components:  (1) the GSX
Contribution  Fund,  which  was to be funded by Pinewood in annual cash payments
over  a ten year period; and (2) the State Permitted Sites Fund, a legislatively
created  fund  derived  from  fees  on  waste disposal at the Pinewood Facility.
Under the Order, at the end of the 100-year post-closure care period, funding of
the  GSX  Contribution  Fund  will  be  subject  to evaluation by an independent
arbitrator, who will determine what level of funding, if any, is still required.
The  Company  is  entitled  to seek recovery of any excess amount so determined.
Upon  termination of the GSX Contribution Fund, any remaining trust assets would
revert to Pinewood.  In 1993 and 1994, Pinewood paid approximately $15.5 million
cash  into  the  GSX  Contribution  Fund, which has grown to approximately $19.1
million  as  of  August  31,  2000.

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

From June 1995, under authority of the Regulations, Pinewood submitted financial
assurance  for  potential  environmental  cleanup  and  restoration  by way of a
corporate  guaranty  by  Laidlaw Inc. or insurance.  Pinewood also left in place
the GSX Contribution Fund of approximately $20 million as of April 30, 2001.  On
September  15,  1995,  DHEC  issued  a  declaratory  ruling  finding  that  the
Regulations  were  applicable  to  the  financial  assurance  requirements  for
Pinewood.

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

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

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


                                      F-41
<PAGE>
On  June  22,  2000,  DHEC notified Pinewood that the Court of Appeals' decision
vacated  the Regulations and, therefore, Pinewood has the sole responsibility to
provide  cash  funding  into  the EIF in accordance with the May 19, 1994 Order.
The  DHEC notice also directed Pinewood to provide information to DHEC within 15
days  on how Pinewood would comply with the Order including payment into the GSX
Contribution Fund.  As of August 31, 2000, there was approximately $19.1 million
in  the  GSX  Contribution  Fund  and  approximately  $13.9 million in the State
Permitted  Sites  Fund.  In  2000  dollars, the total EIF funding requirement is
approximately $147.5 million.  To comply with the financial assurance provisions
of  the Order, Pinewood would have to contribute the following payments (in 2000
dollars)  as  follows ($ in thousands), subject to the automatic stay provisions
discussed  below:

          Amount due during fiscal year:
            2000                                    $ 82,087
            2001                                      14,450
            2002                                      14,450
            2003                                       3,523
                                                    --------
          Total                                     $114,510
                                                    ========

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

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

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

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

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

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

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

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


                                      F-42
<PAGE>
VILLE  MERCIER  FACILITY

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

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

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

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

Pursuant  to  the  Stock  Purchase  Agreement,  Laidlaw  Inc.  and LTI agreed to
indemnify  and  hold  harmless  the Company and its subsidiaries for any damages
resulting  from the remediation of contaminated soils and water arising from the
former  lagoon  sites  and  the operation of the incinerator at Mercier, Quebec.
The  indemnification  is  only to the extent that the aggregate cash expenditure
with respect to such damages exceeds in the aggregate (i) $1 million during such
year  and  (ii) since May 15, 1997, an amount equal to the product of $1 million
times  the  number of years that have elapsed since May 15, 1997; however, there
shall  be  no  indemnification  for any cash expenditures incurred more than six
years  after  May  15,  1997.  As  of May 18, 2001, the Company has not incurred
expenses  for  which  it  would  be  entitled to indemnification under the Stock
Purchase  Agreement.


                                      F-43
<PAGE>
MARINE  SHALE  PROCESSORS

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

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

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

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

The  Stock Purchase Agreement provides that Laidlaw Inc. and LTI shall indemnify
Safety-Kleen  Corp.  for  environmental  liability  arising  with respect to the
treatment  of waste at the Marine Shale facility. The indemnification is only to
the  extent  that  the  aggregate  cash expenditure with respect to such damages
exceeds in the aggregate (i) $1 million during such year; and (ii) since May 15,
1997,  an  amount  equal  to the product of $1 million times the number of years
that have elapsed since May 15, 1997; however, there shall be no indemnification
for  any  cash  expenditures  by Safety-Kleen Corp. incurred more than six years
after  May  15, 1997.  As of May 18, 2001, the Company has not incurred expenses
for  which  it  would  be  entitled  to indemnification under the Stock Purchase
Agreement.

LAMBTON  HAZARDOUS  WASTE  LANDFILL

On September 3, 1999, the Company's Lambton hazardous waste landfill facility in
Ontario  Canada, discovered an upwelling of water and natural gas in Sub-cell 3,
a  newly constructed disposal cell within Cell 18. While in the course of trying
to  determine  the  source  and cause of the upwelling, the Company informed the
Ontario  Ministry  of  Environment and Energy ("MOE") of the situation.  The MOE
issued  two  Field Orders  prohibiting the Company from utilizing Sub-cell 3 and
Sub-cell  4  (another newly constructed cell within Cell 18) for waste disposal.
However, in December 1999, after reviewing testimony and a technical report from
independent  experts  and  Company professionals, the MOE revoked the two orders
and allowed the utilization of Sub-cell 4 for waste disposal so long as no waste
in  Sub-cell 4 was placed below an elevation of 182 meters above mean sea level.
With  respect  to Sub-cell 3, the MOE required that the Company submit a report,
for  MOE's approval, detailing a plan for identifying potential areas of gas and
water  venting,  the  proposed  measures  to remediate all areas identified, and
further steps to protect the integrity of Sub-cell 3.  The Company submitted the
required  report  to  the MOE in February 2000, outlining the Company's plan for
present  and future site activities.  The Company has received a letter from the
MOE  agreeing with the plan in principal; however, the local MOE office raised a
number  of  concerns to which the Company is preparing a response.  Although the
Company  is  currently  prohibited  from  utilizing  Sub-cell  3, the Company is
utilizing  the  remaining  portions  of  Cell  18  for  waste  disposal.


                                      F-44
<PAGE>
RAYGAR  ENVIRONMENTAL  SYSTEMS  INTERNATIONAL  LITIGATION

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

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

FEDERATED  HOLDINGS,  INC.  LITIGATION

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

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

HUDSON  COUNTY  IMPROVEMENT  AUTHORITY  LITIGATION

In  July  1999,  Hudson  County Improvement Authority ("HCIA") filed suit in the
Superior  Court, Hudson County, New Jersey against SK Services (East), L.C. ("SK
Services  East")  (an  indirect  wholly  owned Company subsidiary), Safety-Kleen
Corp.,  American  Home Assurance Company, and Hackensack Meadowlands Development
Commission.  An  Amended  Complaint  was filed on August 18, 1999, in which HCIA
sought  damages  and injunctive relief evicting SK Services East from a 175 acre
site  in  Kearny, New Jersey owned by HCIA.  SK Services East had been using the
site  pursuant  to  an  Agreement and Lease dated as of February 2, 1997 for the
processing and disposal of processed dredge material.  HCIA alleged that certain
conditions  precedent  to SK Services East's right to continue operations at the
site  had  not  occurred,  that  as  a  result  the  Agreement  and  Lease  had
automatically  terminated,  that  SK Services East owed HCIA some $11 million in
back  rent, and that SK Services East was obligated to finish the remediation of
the  site  and  its  preparation  for  development as a commercial property.  In
January  2000,  the Court granted HCIA summary judgment on its motion to declare
the  Agreement  and  Lease  null  and  void  as  a  result of the failure of the
conditions  precedent.  This  ruling  effectively  terminated  the  relationship
between SK Services East and HCIA leaving only the issue of the determination of
the  rights  and  responsibilities  of  the  parties  in  the  unwinding  of the
relationship.  In  May  2000,  HCIA  filed for summary judgment seeking an order
declaring  that  SK Services East is obligated to complete all measures required
under  the  Remedial  Action  Work  Plan for the site.  SK Services East filed a
brief opposing the motion.  In June 2000, HCIA withdrew its pending motion, with
the  Court's  understanding  that  the motion could be re-filed if the automatic
stay  in  connection  with  the  Company's  Chapter  11 bankruptcy protection is
lifted.


                                      F-45
<PAGE>
ECDC  ENVIRONMENTAL,  L.C.  CLAIM

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

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

Safety-Kleen  and  certain  of  its  wholly  owned subsidiaries, including those
subsidiaries  which  were  parties  to  the 4070 Contract and the WDA, filed for
protection  under  Chapter  11  of  the  Bankruptcy Code. In anticipation of the
Company's  rejection  of  the  4070  Contract  pursuant to 11 U.S.C. Sec.365, on
October  30,  2000,  ECDC filed a claim for not less than $11,027,600 plus other
and  unspecified  additional  damages  for  Company's breach of the 4070 and WDA
contracts. Subsequently, the Bankruptcy Court granted the motion by Safety-Kleen
and certain of its subsidiaries, which were parties to the 4070 Contract and the
WDA,  to  reject both the 4070 Contract and the WDA, effective December 1, 2000.

BRYSON  ADAMS  LITIGATION

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

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


                                      F-46
<PAGE>
13.  DISCLOSURE ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS

Carrying  amounts  reported in the consolidated balance sheets for cash and cash
equivalents, accounts receivable, accounts payable and accrued other liabilities
approximate  fair  value  due  to  the  short-term  nature of these instruments.

The  following  table  details  the  total  fair  value  of all of the Company's
derivative  contracts  ($  in  thousands):

<TABLE>
<CAPTION>
                                                             AS OF AUGUST 31,
                         -----------------------------------------------------------------------------------------
                                 2000                  1999                   1998                   1997
                         --------------------  ---------------------  ---------------------  ---------------------
                         Positive   Negative   Positive    Negative   Positive    Negative   Positive    Negative
                         ---------  ---------  ---------  ----------  ---------  ----------  ---------  ----------
<S>                      <C>        <C>        <C>        <C>         <C>        <C>         <C>        <C>
Interest rate swaps      $      --  $      --  $  17,646  $ (29,885)  $   1,073  $ (12,598)  $     256  $      --
Interest rate swaptions         --         --         --    (25,904)         --         --          --         --
Bond indexed equity
swaps                           --         --         --     (1,819)        460         --          --     (1,275)
Forward start swaps             --         --         --     (1,311)         --         --          --         --
                         ---------  ---------  ---------  ----------  ---------  ----------  ---------  ----------
Total fair value         $      --  $      --  $  17,646  $ (58,919)  $   1,533  $ (12,598)  $     256  $  (1,275)
                         =========  =========  =========  ==========  =========  ==========  =========  ==========
</TABLE>

Long-term investments - The fair value approximates carrying value (see Note 3).

Long-term  debt  -  Due to the uncertainty resulting from the Bankruptcy filings
discussed in Note 1, the fair value of the Company's long-term debt as of August
31, 2000 is not determinable.  The fair value of the Company's long-term debt at
August  31,  1999,  1998  and  1997,  is  also  not  determinable.

The  estimated  fair value of the PIK Debenture is based on quoted market prices
of the Company's stock, along with present value calculations, which use current
rates  for similar debt with the same remaining maturity.  The Company estimates
that  the  fair  value  of  the PIK Debenture at August 31, 1998, and August 31,
1997,  was  $350.5  million  and  $493.6  million,  respectively.

Fair  value  estimates  are  made  at a specific point in time based on relevant
market  information  about  the  financial  instruments.  These  estimates  are
subjective  in  nature  and  involve  uncertainties  and  matters of significant
judgement  and  therefore,  cannot  be  determined  with  precision.  Changes in
assumptions  could  significantly  affect  these  estimates.

14.  FINANCIAL  INSTRUMENTS  AND  RISK  MANAGEMENT

Derivatives  and  risk  management
----------------------------------

From  time to time during the fiscal years ended August 31, 2000, 1999, 1998 and
1997,  the Company entered into derivative contracts which include swaps, option
contracts,  and  forward  agreements  or combinations thereof.  As of August 31,
2000,  the  Company had no derivative contracts outstanding.  During March 2000,
the  Company's  existing derivative contracts were involuntarily terminated from
cross-default  provisions  between the Company's Senior Credit Facility, and its
International  Swap  Dealers Association Master Agreements.  As a consequence of
these  terminations  the Company has a net derivative liability of $69.5 million
which  is  reflected  in  its  financial  statements  in  liabilities subject to
compromise  (see  Note 11) and which ranks pari passu with amounts due under the
Senior  Credit  Facility.

The  Company  also entered into a variety of derivatives including interest rate
swaps,  options,  swaptions  and forward agreements which were not designated as
hedges or were ineffective throughout the hedge period.  Such instruments do not
qualify  for hedge accounting treatment.  These transactions often took the form
of  financing  arrangements  whereby  the  Company received cash proceeds at the
outset  of  the  contract  in  exchange  for  an  obligation  to  exchange  swap
settlements  in  the  future at off-market terms.  The fair market value of such
instruments  which  fail to qualify for hedge accounting treatment are reflected
as assets or liabilities, with the periodic change in market value recognized in
earnings  in  the  Company's  financial  statements.


                                      F-47
<PAGE>
As  of  August  31,  1999,  1998,  and  1997 the Company had notional derivative
amounts  outstanding  as  follows  ($  in  thousands):

<TABLE>
<CAPTION>
                                                AS OF AUGUST 31,
                                        ------------------------------
                                           1999       1998      1997
                                        ----------  --------  --------
<S>                                     <C>         <C>       <C>
Qualifying hedges - interest rate swap  $  903,000  $913,000  $160,000
                                        ----------  --------  --------

Trading purpose derivatives
  Interest rate swaps                      520,000    50,000        --
  Interest rate swaptions                  675,000        --        --
  Bond indexed equity swaps                  4,700     4,700    10,000
  Forward start swaps                       50,000        --        --
                                        ----------  --------  --------
                                         1,249,700    54,700    10,000
                                        ----------  --------  --------
Total notional value                    $2,152,700  $967,700  $170,000
                                        ==========  ========  ========
</TABLE>

Credit  risk  arises  from  the possible inability of counterparties to meet the
terms  of  their  contracts  on a net basis.  All of the Company's interest rate
swap  agreements  (which were terminated as of March 17, 2000) were entered into
with  major  financial  institutions, which were expected to fully perform under
the terms of the agreements.  The Company's credit exposure on swaps was related
not  to the notional balances of the interest rate swaps, but to the current and
potential  replacement  costs  of  all  profitable contracts at year-end. Credit
exposure  varied  with  the  market  value  of  the  swaps.

Derivative  financial  instrument  fair  values  represent  an  approximation of
amounts  the  Company  would  have  paid  to  or received from counterparties to
terminate its positions prior to maturity, and are based on capital market rates
prevailing  at  August  31,  2000,  1999,  1998  and  1997.

The  following  tables summarizes the interest rate swaps used by the Company ($
in  thousands):

<TABLE>
<CAPTION>

QUALIFYING HEDGES                                              AUGUST 31,
                                          -------------------------------------------------
                                                1999             1998             1997
                                          ---------------  ---------------  ---------------
<S>                                       <C>              <C>              <C>
Notional amounts                          $      903,000   $      913,000   $      160,000
Range of expirations (years)                0.01 to 9.75      0.5 to 10.0       1.5 to 2.5
Weighted average years until expiration              5.2              5.2              1.9
Fixed rate (pay fixed swaps)                        5.75%            5.74%            6.02%
Fixed rate (pay floating swaps)                     6.04%              --               --
Fair value                                $       (1,367)  $      (11,214)  $          256


NON-HEDGING INTEREST RATE SWAPS                                AUGUST 31,
                                          -------------------------------------------------
                                                1999             1998             1997
                                          ---------------  ---------------  ---------------
Notional amounts                          $      520,000   $       50,000   $           --
Range of expirations (years)                3.75 to 29.9             29.8               --
Weighted average years until expiration            10.25             29.8               --
Fixed rate (pay fixed swap)                         6.18%            5.97%              --
Fixed rate (pay floating swap)                      6.21%              --               --
Fair value                                $      (10,872)  $         (311)  $           --


SWAPTIONS                                                      AUGUST 31,
                                          -------------------------------------------------
                                                1999             1998             1997
                                          ---------------  ---------------  ---------------
Notional amounts                          $      675,000   $           --   $           --
Range of expirations (years)                 0.5 to 5.75               --               --
Weighted average years until expiration             3.27               --               --
Fixed rate (pay fixed swap)                         7.98%              --               --
Fixed rate (pay floating swap)                      7.16%              --               --
Fair value                                $      (25,904)  $           --   $           --


                                      F-48
<PAGE>
BOND INDEX EQUITY HEDGE                                        AUGUST 31,
                                          -------------------------------------------------
                                                1999             1998             1997
                                          ---------------  ---------------  ---------------
Notional amounts                          $        4,700   $        4,700   $       10,000
Range of expirations (years)                        0.33             0.33             0.33
Weighted average years until expiration             0.33             0.33             0.33
Equity Index                                     S&P 500          S&P 500          S&P 500
Bond Index                                 U.S. Treasury    U.S. Treasury   U.S. Treasury
Fair value                                $       (1,819)  $          460   $       (1,275)


FORWARD START SWAP                                             AUGUST 31,
                                          -------------------------------------------------
                                                    1999         1998             1997
                                          ---------------  ---------------  ---------------

Notional amounts                          $       50,000   $           --   $           --
Range of expirations (years)                        8.75               --               --
Weighted average years until expiration             8.75               --               --
Fixed rate (pay fixed swap)                           --               --               --
Fixed rate (pay floating swap)                      6.15%              --               --
Fair value                                $       (1,331)  $           --   $           --
</TABLE>

The  floating  legs  of all interest rate swaps are based on 3-month and 6-month
LIBOR.

As  of  August  31,  1999, 1998 and 1997, the Company had net deferred losses of
$804,000,  $0,  and  $0,  respectively, associated with the early termination of
qualifying  hedge  contracts.  These amounts were recorded as a component of the
current  portion  of long-term debt and were being amortized to interest expense
using  the  effective  interest  rate  method.  As of the bankruptcy filing date
(June  9,  2000),  the  Company had $3.4 million in such deferred losses, all of
which  was  charged  to reorganization items for the year ended August 31, 2000.

The  following  table  summarizes  the  net  gains and (losses) on the Company's
derivative  contracts  used  for  trading  purposes
($  in  thousands):

<TABLE>
<CAPTION>
                               FOR THE YEARS ENDED AUGUST 31,
                           --------------------------------------
                             2000      1999      1998      1997
                           --------  --------  --------  --------
<S>                        <C>       <C>       <C>       <C>
Interest rate swaps        $(4,697)  $ 5,855   $  (432)  $    --
Interest rate swaptions      7,235    (8,578)       --        --
Bond forward agreements     (1,407)     (921)   (1,884)       --
Bond indexed equity swaps     (418)   (2,279)    1,111    (1,350)
                           --------  --------  --------  --------
Total                      $   713   $(5,923)  $(1,205)  $(1,350)
                           ========  ========  ========  ========
</TABLE>


                                      F-49
<PAGE>
The  following  table  summarizes  the  fair  value  of the Company's derivative
contracts  used  for  trading  purposes  for  the  years  ended  August 31 ($ in
thousands):

<TABLE>
<CAPTION>
                                              2000                                                 1999
                            --------------------------------------------  ------------------------------------------------
                                              GROSS           GROSS                           GROSS        GROSS NEGATIVE
                              AVERAGE     POSITIVE FAIR   NEGATIVE FAIR    AVERAGE FAIR   POSITIVE FAIR      FAIR VALUE
                             FAIR VALUE       VALUE           VALUE           VALUE           VALUE
                            ------------  --------------  --------------  --------------  --------------  ----------------
<S>                         <C>           <C>             <C>             <C>             <C>             <C>
Interest rate swaps         $    (1,311)  $           --  $           --  $        (345)  $        3,020  $       (13,893)
Interest rate swaptions          (2,967)              --              --         (2,802)              --          (25,904)
Bond forward agreements              --               --              --             --               --               --
Bond indexed equity swaps        (1,102)              --              --           (599)              --           (1,819)
Forward start swaps              (2,716)              --              --           (196)              --           (1,331)
                            ------------  --------------  --------------  --------------  --------------  ----------------
Total                       $    (8,096)  $           --  $           --  $      (3,942)  $        3,020  $       (42,947)
                            ============  ==============  ==============  ==============  ==============  ================
</TABLE>
<TABLE>
<CAPTION>
                                             1998                                              1997
                           ---------------------------------------------  ------------------------------------------------
                                             GROSS            GROSS                           GROSS        GROSS NEGATIVE
                             AVERAGE     POSITIVE FAIR    NEGATIVE FAIR    AVERAGE FAIR   POSITIVE FAIR      FAIR VALUE
                            FAIR VALUE       VALUE            VALUE           VALUE           VALUE
                           ------------  --------------  ---------------  --------------  --------------  ----------------
<S>                        <C>           <C>             <C>              <C>             <C>             <C>
Interest rate swaps        $       476   $           --  $         (311)  $          --   $           --  $            --
Interest rate swaptions             --               --              --              --               --               --
Bond forward agreements           (727)              --              --              --               --               --
Bond indexed equity swaps         (607)             460              --          (1,069)              --           (1,275)
Forward starting swaps              --               --              --              --               --               --
                           ------------  --------------  ---------------  --------------  --------------  ----------------
Total                      $      (858)  $          460  $         (311)  $      (1,069)  $           --  $        (1,275)
                           ============  ==============  ===============  ==============  ==============  ================
</TABLE>

In  addition  to  the  derivatives  used  for  qualifying hedges and for trading
purposes  described  above, the Company has segregated from derivative contracts
entered  into or modified at off-market terms, $16.1 million, $8.5 million, $2.2
million  and  $0  million  of  amortizing fixed-rate borrowings as of August 31,
2000,  1999,  1998  and  1997,  respectively.  These  amounts  are  included  in
liabilities  subject  to  compromise  as  of  August 31, 2000, and in derivative
liabilities  as  of August 31, 1999, 1998 and 1997.  The Company also classified
$53.4  million in terminated derivatives as liabilities subject to compromise as
of  August  31,  2000  (see  Note  11).

15.  STOCKHOLDERS'  EQUITY

The Company is authorized to issue 250 million shares of its $1 par value common
stock and one million shares of its $1 par value preferred stock.  The terms and
conditions  of  each  issue  of  preferred  stock are determined by the Board of
Directors.  No  preferred  stock  has  been  issued.

Prior  period  shares  issued  and  outstanding,  weighted  average common stock
outstanding and basic and diluted income per share have been restated to reflect
a  one-for-four  reverse  stock  split  which  became  effective at the close of
business  November  30, 1998.  In connection with the one-for-four reverse stock
split,  the  number of common shares available for issuance was reduced from 750
million  to  250  million.


                                      F-50
<PAGE>
16.  STOCK  OPTION  PLANS

The  Company  has  the  following  stock  option  plans:

     1.   The  1982  Stock  Option  Plan  of  the  former  Rollins Environmental
          Services,  Inc.
     2.   The  1993  Stock  Option  Plan  of  the  former  Rollins Environmental
          Services,  Inc.
     3.   The  1997  Directors  Stock  Option  Plan
     4.   The  1997  Stock  Option  Plan

All  outstanding employee stock options granted by the former Rollins were fully
vested  on  May  15,  1997,  in  accordance with the terms of the Stock Purchase
Agreement  referred  to  in  Note  4.

Option  activity  for  the  years  ended  August  31  is  as  follows:

<TABLE>
<CAPTION>
                                             2000                            1999
                                  -----------------------------  -----------------------------
                                              Weighted Average               Weighted Average
                                    Shares     Exercise Price      Shares     Exercise Price
                                  ----------  -----------------  ----------  -----------------
<S>                               <C>         <C>                <C>         <C>
Outstanding at beginning of year  1,200,988   $          13.901    754,250   $          14.844
Granted                                  --                  --    538,625   $          13.250
Exercised                            (2,000)  $          12.750    (18,250)  $          11.613
Expired or canceled                (152,125)  $          14.307    (73,637)  $          19.125
                                  ----------                     ----------
Outstanding at end of year        1,046,863   $          13.844  1,200,988   $          13.901
                                  ==========                     ==========
Options available for grant       2,087,427                        635,302
Options exercisable                 388,200   $          13.953    202,113   $          14.439


                                              1998                            1997
                                  -----------------------------  -----------------------------
                                              Weighted Average               Weighted Average
                                    Shares    Exercise Price       Shares    Exercise Price
                                  ----------  -----------------  ----------  -----------------
Outstanding at beginning of year    510,461   $          16.005         --                  --
Vested upon change in control            --                  --    276,639   $          20.197
Granted                             396,563   $          15.351    296,875   $          12.752
Exercised                           (42,225)  $          12.054    (14,875)  $          10.450
Expired or canceled                (110,549)  $          23.088    (48,178)  $          21.734
                                  ----------                     ----------
Outstanding at end of year          754,250   $          14.844    510,461   $          16.005
                                  ==========                     ==========
Options available for grant       1,100,289                      1,386,303
Options exercisable                 132,562   $          16.921    213,586   $          20.530
</TABLE>
<TABLE>
<CAPTION>
                               2000                                 1999
                -----------------------------------  -----------------------------------
                              Weighted                             Weighted
                               Average    Weighted                  Average    Weighted
Range of                      Remaining    Average                 Remaining    Average
Exercise          Options    Contractual  Exercise     Options    Contractual  Exercise
Price           Outstanding     Life        Price    Outstanding     Life        Price
--------------  -----------  -----------  ---------  -----------  -----------  ---------
<S>             <C>          <C>          <C>        <C>          <C>          <C>

$10.50-$11.50        6,750   3.26 Years  $  11.500        6,750   4.26 years  $  11.500
$12.75-$15.75    1,027,063   5.23 Years  $  13.773    1,178,688   8.51 years  $  13.794
$16.50-$23.00       13,050   1.69 Years  $  20.655       13,050   2.69 years  $  20.655
$30.00-$35.50           --           --         --        2,500   0.25 years  $  35.500
               -----------                          -----------
$10.50-$35.50    1,046,863   5.17 Years  $  13.844    1,200,988   8.41 years  $  13.901
               ===========                          ===========
</TABLE>


                                      F-51
<PAGE>
<TABLE>
<CAPTION>
                                 1998                                  1997
                  ----------------------------------  ------------------------------------
                                Weighted                             Weighted
                                 Average    Weighted                  Average    Weighted
                                Remaining    Average                 Remaining    Average
Range of            Options    Contractual  Exercise     Options    Contractual  Exercise
Exercise Price    Outstanding     Life        Price    Outstanding     Life        Price
----------------  -----------  -----------  --------  -----------  -----------  ----------
<S>               <C>          <C>          <C>        <C>          <C>          <C>
$10.50-$11.50         20,500   5.55 years   $  11.159       59,875   5.98 years  $  11.383
$12.75-$15.75        678,438   9.08 years   $  14.263      303,175   9.78 years  $  12.807
$16.50-$23.00         37,200   4.12 years   $  18.998       88,200   4.76 years  $  19.347
$30.00-$35.50         16,987   0.32 years   $  31.133       56,961   1.15 years  $  31.497
$44.50-$49.00          1,125   1.47 years   $  49.000        2,250   2.43 years  $  46.750
$10.50-$49.00        754,250   8.53 years   $  14.844      510,461   7.47 years  $  16.005
                  ===========                           ===========
</TABLE>

Effective  July  9,  1997,  the  directors  of the Company set aside 1.5 million
shares of its $1 par value common stock for issuance under The 1997 Stock Option
Plan. Effective October 5, 1999, the number of shares set aside was increased by
10 million shares.  All options under this plan are for a term of ten years from
the date of grant and become exercisable with respect to 20% of the total number
of shares subject to the option, approximately one year after the date of grant,
and  with  respect  to  an  additional  20%  at  the end of each 12-month period
thereafter  on  a  cumulative  basis during the succeeding four years.  The plan
provides  for  the  granting  of  stock  options to certain senior employees and
officers  of  the  Company  at  the  discretion  of the Board of Directors.  All
options  are subject to certain conditions of service.  Options for 274,375 were
granted  during  fiscal  year  1997 at an exercise price of $12.75.  Options for
351,563  shares  were granted during fiscal year 1998 at exercise prices ranging
from  $15.25  to  $15.75.  Options for 471,125 shares were granted during fiscal
year 1999 at an exercise price of $13.25.  No options were granted during fiscal
year  2000.

Effective July 9, 1997, the directors of the Company set aside 135,000 shares of
its $1 par value common stock for issuance under The 1997 Directors Stock Option
Plan.  Effective  October  5, 1999, the number of shares set aside was increased
by 300,000 shares.  All options under this plan are for a term of ten years from
the date of grant and become exercisable with respect to 20% of the total number
of shares subject to the option, approximately one year after the date of grant,
and  with  respect  to  an  additional  20%  at  the end of each 12-month period
thereafter  on a cumulative basis during the succeeding four years.  All options
are  subject  to  certain  conditions of service. Options for 22,500 shares were
granted  during  fiscal  year  1997 at an exercise price of $12.75.  Options for
45,000  shares  were  granted  during  fiscal  year 1998 at an exercise price of
$15.25.  Options  for  67,500  shares were granted during fiscal year 1999 at an
exercise  price  of  $13.25.  No  options  were granted during fiscal year 2000.

In  accordance  with the disclosure requirements of SFAS No. 123, the fair value
of  each  option  grant  during 1999, 1998 and 1997 has been estimated as of the
date  of  grant  using the Black-Scholes option pricing model with the following
weighted  average  assumptions:

                                             AUGUST 31,
                             ---------------------------------------
                                 1999         1998          1997
                             -----------   -----------   -----------
Risk-free interest rate        5.3%          5.5%          6.2%
Expected life                  7.0 years     7.0 years     7.0 years
Dividend rate                  0.0%          0.0%          0.0%
Expected volatility           60.8%         64.0%         19.4%

As  required  by  SFAS  No.  123,  the  Company has determined that the weighted
average  estimated  fair  values of options granted during fiscal 1999, 1998 and
1997  were  $8.22,  $7.30  and $10.14 per share, respectively.  Had compensation
cost  for  these  plans  been determined based on the Black-Scholes value at the
grant  dates  for awards as prescribed by SFAS No. 123, pro forma net income and
earnings  per share would have been as follows ($ in thousands, except per share
data):

                                           YEAR ENDED AUGUST 31,
                                 2000        1999        1998        1997
                              ----------  ----------  ----------  ----------
Net income (loss):
  As reported                 $(833,191)  $(223,155)  $(103,211)  $(301,544)
  Pro forma                    (835,157)   (225,121)   (104,392)   (302,146)
Net income (loss) per share:
  As reported                 $   (8.27)  $   (2.52)  $   (1.65)  $   (8.74)
  Pro forma                       (8.29)      (2.54)      (1.68)      (8.76)


                                      F-52
<PAGE>
17.  IMPAIRMENT  AND  OTHER  CHARGES

The  accompanying  consolidated  statements  of operations reflect an element of
operating expenses described as Impairments and Other Expenses. Included in this
caption  are  provisions for impairments of assets determined in accordance with
SFAS  No.  121  "Accounting  for  the  Impairment  of  Long-Lived Assets and for
Long-Lived  Assets  to  be  Disposed  Of" and related provisions for closure and
post-closure  reserves  and other liabilities for facilities to be closed, where
appropriate.

SFAS  No.  121  requires  the  assessment  of  long-lived  assets for impairment
whenever events ("triggering events") occur which may indicate that those assets
have  become  impaired.  Triggering  events  may  be events which directly cause
impairment (e.g., decisions to close facilities or the effects of new government
regulations)  or  may  be  indicators of the existence of other direct causes of
impairment  (e.g.,  continuing  or increasing losses, declining customer demand,
etc.).

The  Company  identified  the acquisition of Rollins in 1997 and Safety-Kleen in
1998  as  triggering  events  since  they  required a review and modification of
operating  plans,  which  resulted  in  the  closure or change in use of several
facilities  of  the  acquiring  company.  Other  impairments were related to the
effect  of  changes  in  management's  overall  strategy  and business decisions
regarding  the  use  of  certain  facilities.  As indicated below, the Company's
filing  for Chapter 11 Bankruptcy protection in June 2000 created the need for a
complete  review  and  reassessment of the future cash flows of its assets which
resulted  in  decisions  to  close  or  dispose  of  certain  facilities.  This
reassessment  identified  certain  impairments  resulting  from  projections  of
recurring operating losses at specific locations, extensive increases in capital
required  to  keep  locations  operational or from deterioration in the business
conditions  resulting  from increased competition and environmental regulations.

The Company believes that the Bankruptcy filing in June 2000 and the events that
led  up to it constitute triggering events. In connection with its comprehensive
review of its operations, the Company evaluated the recoverability of long-lived
assets  at  August  31, 2000, by reference to estimated future cash flows.  As a
result,  the  Company  identified certain impairments that have been recorded in
fiscal year 2000.  Impairments which could be specifically related to decisions,
projections,  or  recoverability  analyses  which  indicate that the impairments
occurred  during  the  restatement  periods  have  been reflected in those prior
periods.

The  following table summarizes the impairment and other charges recorded by the
Company  during  fiscal  years  2000, 1999, 1998 and 1997 categorized by type of
triggering  event  ($  in  thousands):

<TABLE>
<CAPTION>
                                          2000     1999     1998      1997
                                        --------  -------  -------  --------
<S>                                     <C>       <C>      <C>      <C>
Resulting from effects of acquisitions  $      0  $     0  $41,498  $189,202
Resulting from other factors             367,793   11,287   23,384    64,282
Total                                   $367,793  $11,287  $64,882  $253,484
                                        ========  =======  =======  ========
</TABLE>

Fair  values  for  impaired  assets were determined for landfills, incinerators,
wastewater  treatment  and other facilities, primarily based on future cash flow
projections  discounted  using rates appropriate for the risks involved with the
identified  assets.  For those facilities that were to be sold, management based
fair  value  on  their  best  estimate  of  sales  value  less  cost  to  sell.

1997
----
The  impairment  and  other  charges  in  1997 relate primarily to the Company's
decisions  to  close  certain  of  its  facilities  which  were determined to be
redundant  with facilities acquired in the Rollins Acquisition.  Of this amount,
approximately  $166.0  million  represents the write-down of property, plant and
equipment,  intangible  and  other  assets  and  approximately  $23.2  million
represents  the  establishment  of  closure  and post-closure reserves and other
liabilities, related to facilities closed in 1997.  Approximately $151.9 million
of  these  charges  relates  to  the  closure  of  the  Clive, Utah incineration
facility.

The  impairment  and  other  charges in 1997 resulting from other factors relate
primarily  to  decisions  made  by management as a result of changes in business
conditions  or  legal  issues.  Of  this  amount,  approximately  $59.2  million
represents the write-down of property, plant and equipment, intangible and other
assets  and  approximately  $5.1 million represents the establishment of closure
and  post-closure reserves and other liabilities.  Included in the write-down of
property,  plant  and equipment is an impairment charge of $21.4 million related
to  Pinewood,  which  was  recorded  to recognize the substantial curtailment of
activities  at  that location which resulted from the legal actions discussed in
Note  12.

The  amounts  recorded  for  impairments in 1997 relate to facilities which were
either  closed  in  1997  or substantially curtailed in 1997 and formally closed
shortly  thereafter.  None  of  these  facilities generated significant revenues
after  1997.


                                      F-53
<PAGE>
1998
----
The  impairment and other charges in 1998 resulting from effects of acquisitions
relate primarily to decisions to close additional Company facilities in response
to  effects  of  the  Rollins Acquisition which were not identified in 1997.  Of
this  amount, approximately $27.9 million represents the write-down of property,
plant and equipment, intangible and other assets and approximately $13.6 million
represents  the  establishment  of  closure  and post-closure reserves and other
liabilities. Approximately $37.0 million of these charges relates to the closure
of  the  Roebuck,  South  Carolina  incineration  facility.

The  impairment and other charges in 1998 resulting from other factors relate to
decisions  made  by  management as a result of changes in business conditions or
legal  issues.  Of  this  amount,  approximately  $16.7  million  represents the
write-down  of  property,  plant  and equipment, intangible and other assets and
approximately  $6.7  million  represents  the  establishment  of  closure  and
post-closure  reserves  and  other  liabilities.

The  amounts  recorded  for  impairments in 1998 relate to facilities which were
either  closed  in  1998  or substantially curtailed in 1998 and formally closed
shortly  thereafter.  None  of  these  facilities generated significant revenues
after  1998.

1999
----
The  impairment and other charges in 1999 resulting from other factors relate to
decisions  made  by  management as a result of changes in business conditions or
legal  issues.  This  amount  represents  the  write-down of property, plant and
equipment.

2000
----
The  components  of  the  2000 charges consist of the following ($ in millions):

     Service centers and landfills related to Western operations  $118.4
     Other landfills and incinerators                              118.6
     Harbor facility - closed                                       22.6
     Pinewood                                                       15.7
     Other facilities                                               92.5
         Totals                                                   $367.8
                                                                  ======

The  amounts  shown as related to Western operations relates to facilities which
are  located  in the Western area of the United States.  Their markets have been
adversely affected by competitive conditions, including over supply of available
services, which have limited the Company's ability to increase prices to recover
increased  costs,  including  those  related  to  new environmental regulations.

Included  in  other  landfills and incinerators is an incinerator constructed to
burn  contaminated  soils.  Although  significant  revenue resulted from unusual
events  in 1999 and 2000, the general level of demand for these services has and
is  expected to continue to decline.  In addition, new environmental regulations
are projected to significantly increase capital expenditures and operating costs
in  the  future.  Also  included in this amount is a landfill which has been the
primary  disposal  site  for  the soil burned at this Company owned incinerator.
The  projected declines in volumes generated at the incinerator are projected to
have  a  continuing  adverse  effect  on  volumes  at  the  landfill.

As  discussed in Note 12, the Pinewood facility has been the subject of lengthy,
complex  and  protracted  legal  proceedings.  As  discussed  above, the Company
recorded  an  impairment  charge  related to Pinewood in 1997 as a result of the
projected  effects  of adverse legal developments in that year.  On the basis of
the  additional adverse outcomes of these proceedings, the Company has concluded
that it would be imprudent to assume that this facility will be able to generate
any  significant  future  revenue.  Accordingly,  an  additional charge has been
recorded  for  the impairment of the remaining net book value of fixed assets at
the  Pinewood facility.  Appropriate reserves for closure and post-closure costs
at  Pinewood  have  been  fully  provided  and  included  in  operating  costs.


                                      F-54
<PAGE>
18.  EMPLOYEE BENEFIT PLANS

Defined  benefit  plans
-----------------------

As  of  August  31,  2000,  the  Company  did not sponsor any significant active
defined  benefit  pension  plans.  For plans terminated during fiscal year 2000,
all  accumulated  benefits  have  been  distributed  to  plan  participants.

Upon  completion  of  the  Rollins  Acquisition,  the Plan Sponsor, Safety-Kleen
Services, Inc. requested permission from all interested parties to terminate the
Rollins  Environmental  Services,  Inc.  Pension  Plan.  The  labor  union
organizations  representing  the  Rollins  employees  declined  to  grant  their
permission.  The  Company formed  a "mirror image" plan, a plan identical in all
respects,  to  the  then  existing  Rollins Environmental Services, Inc. Pension
Plan.  The  mirror  image  plan  was  named  the LES Union Pension Plan, and the
union-represented participants and their related accumulated benefit obligations
were  transferred  to the new plan.  Accumulated plan benefits were not affected
by  the  transfer.  Participants  without  union  affiliations  remained  in the
Rollins  Environmental  Service, Inc. Pension Plan which was formally terminated
in  July  1997  and  the  final  settlement  was  paid  in  September  1998.

In  January  1998,  certain  union  organizations  granted  their  permission to
terminate  the  newly  formed  LES Union Pension Plan and, during July 1998, the
Application  for  Determination  Upon  Termination  was  filed with the Internal
Revenue Service.  The final settlement payout for the LES Union Pension Plan was
in  May 1999.  All remaining participants represented by union organizations not
granting termination permission were transferred to another "mirror image" plan,
the  Deer  Park  Union Pension Plan, effective February 1, 1998.  In March 1999,
management  obtained  the remaining union organizations' permission to terminate
the  Deer Park Union Pension Plan.  Plan assets were distributed to participants
in  March  2000.

During  the Safety-Kleen Acquisition, the Company acquired three defined benefit
plans.  The  Safety-Kleen  Corp. Sales Employees' Pension Plan (Sales Plan) is a
noncontributory  defined  benefit  pension  plan that originally covered certain
U.S.  employees  of  Old  Safety-Kleen,  including  branch  managers  and  sales
representatives.  Other  salaried employees, excluding branch managers and sales
representatives,  were  covered  under  the  Salaried  Employee's  Pension  Plan
(Salaried  Plan).  Hourly-paid  employees  were  covered  under  the Hourly-Paid
Employees'  Pension Plan (Hourly Plan).  On July 10, 1998, the Company announced
its  intention  to discontinue benefit accrual and to terminate all three plans.
Effective  September  30,  1998,  the  Salaried  Plan  and  Hourly  Plan,  (the
Transferring  Plans),  were  merged  into  the  Sales Plan.  Upon merging of the
plans, the Sales Plan received the Transferring Plans' interest in the assets of
the  trust  fund  and  assumed  the  Transferring  Plans'  accumulated  benefit
obligation.  After  the  merger,  the  Transferring  Plans ceased to exist.  The
effective  date  of  the  Sales  Plan  termination  was  December  24, 1999, and
accumulated  benefits  were  distributed  to  participants  on  March  31, 2000.

Changes in the projected benefit obligations and pension plan assets relating to
the  Company's  defined  benefit pension plans as of August 31, 2000, 1999, 1998
and  1997,  are  set  forth  in  the  following  table  ($  in  thousands):

<TABLE>
<CAPTION>
                                                  2000       1999       1998       1997
                                                ---------  ---------  ---------  --------
<S>                                             <C>        <C>        <C>        <C>
Change in benefit obligation
----------------------------
Net benefit obligation at beginning of year     $ 90,641   $109,723   $ 22,428   $    --
Net obligations acquired                              --         --     83,105    22,234
Service cost                                          --         60      2,027        91
Interest cost                                         --        102      2,844       121
Curtailment gain                                      --       (776)      (652)       --
Settlement loss                                    3,415      8,322         --        --
Benefits paid                                    (94,056)   (26,790)       (29)      (18)
                                                ---------  ---------  ---------  --------
Net benefit obligation at end of year           $     --   $ 90,641   $109,723   $22,428
                                                =========  =========  =========  ========

Change in plan assets
---------------------
Fair value of plan assets at beginning of year  $ 92,635   $110,887   $ 21,588   $    --
Net plan assets acquired                              --         --     85,643    21,157
Actual return on plan assets                       1,808      3,329      3,685       449
Contributions                                         --      5,209         --        --
Benefits paid                                    (94,056)   (26,790)       (29)      (18)
                                                ---------  ---------  ---------  --------
Fair value of plan assets at end of year        $    387   $ 92,635   $110,887   $21,588
                                                ---------  ---------  ---------  --------

Funded (unfunded) status                        $    387   $  1,994   $  1,164   $  (840)
Unrecognized net actuarial gain                       --         --       (312)     (311)
                                                ---------  ---------  ---------  --------
Accrued benefit (liability) surplus             $    387   $  1,994   $    852   $(1,151)
                                                =========  =========  =========  ========
</TABLE>


                                      F-55
<PAGE>
Net periodic pension costs for the Company's defined benefit pension plans as of
August 31, 2000, 1999, 1998 and 1997, are set forth in the following table ($ in
thousands):

<TABLE>
<CAPTION>
                                          2000    1999     1998     1997
                                          -----  ------  --------  ------
<S>                                       <C>    <C>     <C>       <C>
Components of net periodic benefit cost:
  Service cost                            $  --  $  60   $ 2,027   $  91
  Interest cost                              --    102     2,844     121
  Expected return on plan assets             --   (110)   (3,685)   (138)
                                          -----  ------  --------  ------
Net periodic benefit cost                 $  --  $  52   $ 1,186   $  74
                                          -----  ------  --------  ------
</TABLE>

In  fiscal  1998,  actuarial assumptions used to determine the projected benefit
obligation  and  the  expected  net  periodic  pension  costs were 7.25% for the
discount  rate,  10%  for  the expected rate of return on assets, and 4% for the
rate  of  increase  in  compensation  levels.

The  projected  benefit  obligations,  accumulated benefits obligations and fair
value  of  plan  assets  applicable  to  pension  plans with accumulated benefit
obligations  in  excess  of plan assets and plan assets in excess of accumulated
benefit  obligations  were  as  follows  ($  in  thousands):

<TABLE>
<CAPTION>
                                             2000    1999     1998     1997
                                             -----  -------  -------  -------
<S>                                          <C>    <C>      <C>      <C>
Overfunded plans
----------------
Aggregate benefit obligation                 $  --  $75,347  $74,818  $    --
Aggregate fair value of plan assets            387   81,572   81,069       --
                                             -----  -------  -------  -------
Excess of aggregate plan assets over
                                             =====
  aggregate benefit obligation               $ 387  $ 6,225  $ 6,251  $    --
                                             =====  =======  =======  =======

Underfunded plans
-----------------
Aggregate benefit obligation                 $  --  $15,294  $34,905  $22,428
Aggregate fair value of plan assets             --   11,063   29,506   21,277
                                             -----  -------  -------  -------
Excess of aggregate benefit obligation plan
                                             =====
  assets over aggregate plan assets          $  --  $ 4,231  $ 5,399  $ 1,151
                                             =====  =======  =======  =======
</TABLE>

Defined  contribution  plan
---------------------------

The  Company  offers to all eligible employees the opportunity to participate in
the  Company's  defined contribution employee benefit plan ("Safety-Kleen 401(k)
Plan").  Employees are allowed to contribute up to 15% of their annual salary to
the plan, and the Company will make matching contributions limited to 75% of the
first  6%  of  an  employee's  eligible  compensation  as  well as discretionary
contributions  as  determined  by  the Board of Directors. Employer contribution
expense  for fiscal years ending August 31, 2000, 1999, 1998 and 1997, was $11.8
million,  $11.8  million,  $6.9  million  and  $3.1  million,  respectively.

The  Company  provides  medical benefits to approximately 70 former employees of
Old  Safety-Kleen.  At  the  date  of the Safety-Kleen Acquisition, the plan was
frozen  and subsequently terminated.  The Company currently provides benefits to
those  remaining  participants  as  required  by  the  provisions  of  COBRA.

Deferred  compensation
----------------------

As  part of the acquisition of Old Safety-Kleen, the Company acquired a deferred
compensation  plan  and an excess benefit plan that had been terminated prior to
the  acquisition.  Final  payouts  on these plans had been made as of August 31,
1998.

19.  INCOME  TAXES

For  financial  reporting  purposes,  income  (loss)  before  income  taxes  and
extraordinary  item,  showing domestic and foreign sources, was as follows ($ in
thousands):

<TABLE>
<CAPTION>
                                           YEAR ENDED AUGUST 31,
                              ----------------------------------------------
                                 2000        1999        1998        1997
                              ----------  ----------  ----------  ----------
<S>                           <C>         <C>         <C>         <C>
Domestic                      $(814,878)  $(197,253)  $(138,745)  $(347,658)
Foreign                          (5,290)     13,192      14,886       6,319
                              ----------  ----------  ----------  ----------
Loss before income taxes and
  Extraordinary item          $(820,168)  $(184,061)  $(123,859)  $(341,339)
                              ==========  ==========  ==========  ==========
</TABLE>


                                      F-56
<PAGE>
Prior  to  May 15, 1997, the Company filed consolidated tax returns with Laidlaw
(see Note 3).  The income tax expense (benefit) before extraordinary items is as
follows  ($  in  thousands):

<TABLE>
<CAPTION>
                                       YEAR ENDED AUGUST 31,
                              --------------------------------------
                                2000     1999      1998       1997
                              -------  -------  ---------  ---------
<S>                           <C>      <C>      <C>        <C>
Current:
  Federal                     $    --  $    --  $     --   $     --
  State                           594      915       699        415
  Foreign                       4,177    9,731     5,070       (952)
Deferred:
  Federal                       6,029   24,274   (47,272)   (44,791)
  State                           689    2,774    (5,402)    (5,119)
  Foreign                       1,534    1,400     7,474     10,652
                              -------           ---------
Income tax expense (benefit)  $13,023  $39,094  $(39,431)  $(39,795)
                              =======           =========
</TABLE>

A  reconciliation of the income tax expense (benefit) calculated by applying the
domestic statutory federal income tax rate to the loss before income taxes is as
follows  ($  in  thousands):

<TABLE>
<CAPTION>
                                                           YEAR ENDED AUGUST 31,
                                                    ----------------------------------
                                                     2000     1999     1998     1997
                                                    -------  -------  -------  -------
<S>                                                 <C>      <C>      <C>      <C>
Federal income tax expense (benefit) at statutory
  rate                                              (35.0)%  (35.0)%  (35.0)%  (35.0)%
State income tax expense (benefit)                   (3.6)%   (0.3)%   (2.1)%   (2.8)%
Change in valuation allowance                         36.2%    39.3%     3.5%    19.9%
Foreign country rate differential                      0.1%     0.5%     1.0%     0.2%
Undistributed Canadian earnings                        1.5%     0.0%     0.0%     0.0%
Goodwill                                               4.5%     7.6%     6.3%     1.7%
Other                                                (2.1)%     9.1%   (5.5)%     4.3%
                                                    -------  -------  -------  -------
Income tax expense (benefit)                           1.6%    21.2%  (31.8)%  (11.7)%
                                                    =======  =======  =======  =======
</TABLE>

Deferred tax assets and liabilities consisted of the following ($ in thousands):

<TABLE>
<CAPTION>
                                                               AUGUST 31,
                                           -----------------------------------------------
                                              2000        1999        1998        1997
                                           ----------  ----------  ----------  -----------
<S>                                        <C>         <C>         <C>         <C>
Deferred tax assets:
  Allowance for uncollectable invoices     $  34,010   $   7,640   $   3,299   $   2,681
  Deferred revenue                            47,180      46,550      39,928      24,459
  Accrued liabilities                        161,255     136,193     130,674      88,281
  Tax attribute carryovers                   330,194     167,125     125,545      69,739
  Interest                                    16,710       1,114      16,650      16,820
  Other                                        4,862       8,428       7,294         468
                                           ----------  ----------  ----------  -----------
    Total gross deferred tax assets          594,211     367,050     323,390     202,448
    Less -Valuation allowance               (386,095)    (89,210)    (23,466)    (96,204)
                                           ----------  ----------  ----------  -----------
                                           ----------  ----------  ----------  -----------
Deferred tax liabilities:
  Excess of tax over book depreciation      (213,172)   (290,286)   (297,644)   (114,307)
  Other                                      (59,049)    (44,585)    (59,880)    (29,242)
                                           ----------  ----------  ----------  -----------
    Total gross deferred tax liabilities    (272,221)   (334,871)   (357,524)   (143,549)
                                           ----------  ----------  ----------  -----------
Net deferred tax assets (liabilities)      $ (64,105)  $ (57,031)  $ (57,600)  $ (37,305)
                                           ==========  ==========  ==========  ===========
</TABLE>


                                      F-57
<PAGE>
As  of  August 31, 2000 the Company has net operating loss ("NOL") carryforwards
for  U.S.  federal  income  taxes  of approximately $802 million expiring in the
years  2006  to  2020  and capital loss carryforwards of $24 million expiring in
2005.  Such  NOLs  are  subject  to  limitations  of  both  Treasury  Regulation
1.1502-21  and  Internal  Revenue  Code  "IRC"  Section 382. At August 31, 2000,
interest carryovers of approximately $15.5 million limited by IRC Section 163(j)
are  available  against U.S. federal tax without expiration.  The carryovers are
based  on  tax returns as currently filed and are subject to change based on the
Company's  detailed  review  and analysis of all restatement adjustments for tax
purposes,  as  it is not practicable to determine the impact or related interest
and penalties, if any, of the restatement adjustments on amended returns at this
time.  The  Company's  tax  returns are subject to periodic audit by the various
jurisdictions  in  which  it  operates.  These audits, including those currently
underway,  can  result  in  adjustments of taxes due or adjustments of the NOLs,
which  are  available  to  offset  future  taxable  income.

Valuation  allowances  have  been established for uncertainties in realizing the
benefit  of  certain  tax  loss  carryforwards and other deferred tax assets. In
assessing  the  realizability  of  carryforwards  and other deferred tax assets,
management considers whether it is more likely than not that some portion or all
of  the  deferred tax assets will be realized. The Company adjusts the valuation
allowance  in  the  period management determines it is more likely than not that
deferred  tax  assets  will  or  will  not  be  realized.

Until  May  1997,  the Company was included in the consolidated U.S. tax returns
filed  by Laidlaw.  As such, the Company is jointly and severally liable for any
taxes  due  with  respect  to  those returns.  Accordingly, the Company could be
responsible for taxes relating to adjustments to the 1997 and prior consolidated
tax  returns  of  Laidlaw.

20.  DISCONTINUED  OPERATIONS

On May 1, 1997, in contemplation of the Rollins Acquisition described in Note 4,
the  Company  transferred,  in a non-cash transaction, JTM Industries, Inc., its
coal  combustion by-products management operations, to Laidlaw.  No gain or loss
was  recognized on this transfer.  These operations were retained by Laidlaw and
are  not  part  of  the  Company's  ongoing operations. Accordingly, the Company
classified  these  operations  as  discontinued.  Revenue  for  the discontinued
operations  for  1997  was  $41.5  million,  and  the  associated net income was
insignificant.

21.  RELATED  PARTY  TRANSACTIONS

LAIDLAW  INC.

Prior  to  May  15,  1997,  Laidlaw  charged  a management fee to the Company as
reimbursement  for  the  costs  of  services  provided to the Company, including
treasury, taxation and insurance.  Fees paid to Laidlaw were $2.6 million during
fiscal  year  1997.  Interest expense in fiscal year 1997 includes $24.0 million
allocated  from  Laidlaw.

Insurance  premiums  paid  to  Laidlaw,  including  those  related  to  workers'
compensation,  general and auto liability, totaled $14.8 million, $21.5 million,
$11.3  million  and  $7.2  million  in  fiscal  years 2000, 1999, 1998 and 1997,
respectively.  Rates  paid under insurance contracts are determined on a similar
basis  as  those  charged  under  similar  contracts  with third-party insurers.

On  May  15,  1997, pursuant to the Rollins Acquisition described in Note 4, the
Company issued a $350 million 5% subordinated convertible, PIK Debenture due May
15,  2009,  and paid $349.1 million in cash to Laidlaw.  On August 27, 1999, the
Company  repurchased  the  PIK  Debenture  for  (i)  $200  million in cash, (ii)
11,320,755  shares  of  common stock and (iii) 376,858 shares of common stock in
satisfaction  of accrued and unpaid interest on the PIK Debenture since the date
of  purchase  (see Note 9).  As discussed in Note 12, the Company has filed suit
against  Laidlaw  to  recover  the  $200  million  cash  payment.

Pursuant  to  the Rollins Acquisition, Laidlaw and Laidlaw Transportation, Inc.,
and  indirect  wholly  owned  subsidiaries  of  Laidlaw,  agreed  to jointly and
severally  indemnify  the Company for certain obligations and liabilities.  Also
pursuant  to  the  acquisition,  the  Company  agreed  to  jointly and severally
indemnify  Laidlaw and Laidlaw Transportation, Inc., for certain obligations and
liabilities.  Additionally,  certain  other guaranties have been entered into by
Laidlaw  on  behalf  of  the  Company  (Notes  3,  4  and  12).

On  November 7, 2000, Laidlaw Inc., filed a proof of claim of not less than $6.5
billion  against  the  Company  (see  Note  12).

Certain  directors  or  officers  of  the  Company  also  served as directors or
officers of Laidlaw during fiscal years 2000, 1999, 1998 and 1997.  As of August
31,  2000,  no  directors  or  officers  of  the  Company served as directors or
officers  of  Laidlaw.


                                      F-58
<PAGE>
SAFETY-KLEEN  EUROPE

During  portions  of  fiscal  years 2000 and 1999, the Company accounted for its
investment  in  Safety-Kleen  Europe, Inc. under the equity method.  During this
period,  the  Company  provided  Safety-Kleen  Europe,  Inc.  with  information
technology  services, inventory and reimbursement of certain building rents.  In
fiscal  2000  and  1999,  the  Company  invoiced  Safety-Kleen Europe, Inc. $1.9
million  and $1.3 million, respectively, for information technology services and
inventory.  Also during this period, the Company reimbursed Safety-Kleen Europe,
Inc.  $1.1  million  and $0.1 million in fiscal 2000 and 1999, respectively, for
building  rents  and  software.

RAYMOND  JAMES  &  ASSOCIATES

The  Company's  current Chairman and CEO was previously Senior Managing Director
and  Head  of  the  Investment Banking Group of Raymond James & Associates, Inc.
("Raymond  James")  and  a  member  of  the  Company's  Board of Directors until
becoming  Chairman  of  the  Company  in  May  2000.  Raymond James has acted as
financial  advisor  and  in other capacities to the Company for various matters,
including acquisitions, divestitures and securities offerings.  The Company paid
approximately  $2.8 million and $1.0 million to Raymond James for these services
in  fiscal  years  1999  and  1998,  respectively, and has accrued approximately
$350,000  in  fiscal  year  2000  for  consulting  services  performed.

ROLLINS  TRUCK  LEASING  CORP.

Until  February  26,  2001,  a  member  of  the Company's Board of Directors was
Chairman  of  the  Board of Directors and Chairman of the Executive Committee of
Rollins  Truck  Leasing Corp. and until February 26, 2001, another member of the
Company's  Board  of  Directors  was  President  and  Chief Executive Officer of
Rollins  Truck Leasing Corp.  During fiscal years 2000, 1999, 1998 and 1997, the
Company  paid  Rollins  Truck  Leasing  Corp.  approximately  $1.2 million, $2.7
million,  $1.5  million  and  $2.6  million,  respectively,  on account of truck
rentals.  Rollins  Truck  Leasing Corp. also purchased certain supplies from the
Company.  During  fiscal  year  2000,  Rollins  Truck Leasing paid approximately
$344,000  to  the  Company  for  these  supplies.  In  addition, the Company has
guaranteed  approximately  $5.4 million in lease payments for vehicles leased by
Rollins  Truck  Leasing  Corp.  to  a  subcontractor  of  the  Company.

MATLACK  SYSTEMS,  INC.

A  member  of  the Company's Board of Directors is a director and shareholder of
Matlack  Systems, Inc. and another member of the Company's Board of Directors is
Chairman  of the Board and a shareholder of Matlack Systems, Inc.  During fiscal
year  2000,  the  Company  paid Matlack Systems, Inc. approximately $378,000 for
transportation  services.  During  fiscal  year 2000, Matlack Systems, Inc. also
purchased  supplies  and  services  from  the Company of approximately $615,000.

OTHER

In  September  2000, the Company transferred ownership of a residential property
in  Oakville,  Ontario, to the spouse of Kenneth W. Winger, the former president
and chief executive officer of the Company and a former director of the Company,
for  $444,000.  Laidlaw  had originally purchased this property in 1995 from Mr.
Winger's  spouse for the same amount pursuant to an agreement with Mr. Winger in
connection  with  his  relocation to the Company's South Carolina offices.   The
property  had been held by Safety-Kleen Ltd. as successor in interest to Laidlaw
Environmental  Services  Ltd.  Based on a broker's opinion of value, the Company
believes  that  the  price  paid by Mr. Winger's spouse was fair to the Company,
taking  into  account  the additional expense that the Company would have had to
incur to sell the property to a third party.  Mr. Winger and his spouse released
the  Company  from  further obligations and liability arising under an agreement
executed  in  March  2000  between  the  Company  and  Mr. Winger concerning the
transfer  of  the  property and the payment by the Company of certain relocation
expenses.


                                      F-59
<PAGE>
22.  SUPPLEMENTAL  SCHEDULE  OF  CASH  FLOW  INFORMATION

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

<TABLE>
<CAPTION>
                                                             YEAR ENDED AUGUST 31,
                                                 ---------------------------------------------
                                                   2000        1999        1998        1997
                                                 ---------  ---------  ------------  ---------
<S>                                              <C>        <C>        <C>           <C>
Supplemental cash flow information:
  Cash paid during the year for:
    Interest                                     $ 90,370   $186,517   $    95,508   $ 42,497
                                                 =========  =========  ============  =========
    Income taxes paid (refunded)                 $ 10,525   $(22,529)  $     1,253   $     --
                                                 =========  =========  ============  =========

Non-cash investing and financing activities:
  Business combinations:
    Fair value of assets acquired                $ 48,990   $ 46,132   $ 2,677,499   $402,680
    Fair value of liabilities assumed             (21,918)   (31,228)     (891,500)  (252,079)
    Less, cash (paid) acquired, net               (27,072)   (14,904)   (1,099,350)    15,433
                                                 ---------  ---------  ------------  ---------
    Fair value of stock issued on acquisition    $     --   $     --   $   686,649   $166,034
                                                 =========  =========  ============  =========
  Issuance of subordinated convertible
   debenture to Laidlaw Inc.                     $     --   $     --   $        --   $332,500
                                                 =========  =========  ============  =========
  Issuance of common stock to satisfy interest
    payment due on subordinated convertible      $     --   $ 22,486   $    17,500   $     --
   debenture                                     =========  =========  ============  =========
  Issuance of common stock as consideration
   for repurchase of subordinated convertible    $     --   $150,000   $        --   $     --
   debenture                                     =========  =========  ============  =========
  Non-cash transactions arising from sale of
   business:
      Promissory notes receivable                $     --   $     --   $     8,000   $     --
      Reduction of debt                                --         --        40,814         --
      Equity investment recorded as long-term
       investment                                      --     37,782            --         --
                                                 =========  =========  ============  =========
      Fair value of subsidiary transferred to
       Laidlaw Inc.                              $     --   $     --   $        --   $ 57,309
                                                 =========  =========  ============  =========
</TABLE>

23.  SEGMENT  AND  GEOGRAPHIC  INFORMATION

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

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

The Company currently classifies as "Other" in its segment reporting the cost of
certain  Company-wide  functions  and  services  consisting  primarily of legal,
finance  and  information  technology.  In  addition, this category includes the
incremental  cost  of  the  Company's efforts related to its internal accounting
review for fiscal 1997 through 2000, the audits of these periods and the various
investigations  of  its  financial  results.  As  discussed  in  Note  1,  other
components  of  income, expense and loss directly attributable to the Chapter 11
Cases  are classified as "Reorganization items" in the consolidated statement of
operations.


                                      F-60
<PAGE>
In fiscal 1997 through 1999, the Company's general ledger and system of internal
financial  reporting  was aligned to report the financial results of its various
segments  and  lines  of  business based on the operational organization then in
place.  The  Company  changed  its  system  of internal financial reporting as a
result  of  the  reorganization of its operations in the third quarter of fiscal
2000.  Substantial efforts were made to conform the prior year' reporting to the
fiscal  2000 organization and new reporting structure.  In connection with these
efforts,  Management  restated  segment  results  to  reflect  service  centers'
operations  as  profit  centers.  In  addition,  Management  reviewed  certain
Company-wide  selling,  general  and  administrative  expenses  and attempted to
allocate  these  expenses  consistently  from  year  to year among the segments.
Management  believes  that  the financial results for segment reporting purposes
during  fiscal 1997 through fiscal 2000 are reasonable and is in accordance with
SFAS  No.  131.

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

<TABLE>
<CAPTION>
                                  BRANCH SALES    CHEMICAL
                                  AND SERVICE     SERVICES      OTHER       TOTAL
                                 --------------  -----------  ---------  -----------
<S>                              <C>             <C>          <C>        <C>
FISCAL YEAR 2000:
  Outside revenue                $     986,627   $  599,022   $    624   $1,586,273
  Intersegment revenue                   3,443       55,964    (59,407)          --
  Depreciation and amortization        104,985       57,552      2,143      164,680
  Impairment and other charges          18,688      349,105         --      367,793
  EBITDA                               (34,266)     (12,836)   (40,595)     (87,697)
  Total assets                       2,318,784      499,990    313,094    3,131,868

FISCAL YEAR 1999:
  Outside revenue                      954,421      671,436     (1,819)   1,624,038
  Intersegment revenue                   1,540       49,722    (51,262)          --
  Depreciation and amortization        100,226       55,212      1,528      156,966
  Impairment and other charges              --       11,287         --       11,287
  EBITDA                               111,406      106,933    (43,210)     175,129
  Total assets                       2,335,797    1,009,616    289,901    3,635,314

FISCAL YEAR 1998:
  Outside revenue                      433,937      736,307      2,487    1,172,731
  Intersegment revenue                    (144)       3,397     (3,253)          --
  Depreciation and amortization         46,930       55,581      3,749      106,260
  Impairment and other charges              --       64,882         --       64,882
  EBITDA                                81,423      143,284    (55,788)     168,919
  Total assets                       2,558,808    1,042,049    268,618    3,869,475

FISCAL YEAR 1997:
  Outside revenue                           --      644,813     (2,868)     641,945
  Intersegment revenue                      --          273       (273)          --
  Depreciation and amortization             --       65,567      1,368       66,935
  Impairment and other charges              --      253,484         --      253,484
  EBITDA                                    --       37,781    (12,111)      25,670
  Total assets                              --    1,359,172    154,569    1,513,741
</TABLE>


                                      F-61
<PAGE>
Outside revenue and intersegment revenue related to products and services within
the  Branch  Sales  and  Service  segment  is  shown  in  the  table  below
($  in  thousands):

<TABLE>
<CAPTION>
                                              2000      1999      1998    1997
                                            --------  --------  --------  -----
<S>                                         <C>       <C>       <C>       <C>
Parts Cleaner Service                       $341,303  $370,028  $176,728  $  --
Paint Refinishing Services                    60,629    66,281    34,480     --
Imaging Services                              42,984    43,509    15,432     --
Dry Cleaner Services                          20,038    19,940     8,617     --
Vacuum Truck Services                         46,603    36,411    12,533     --
Integrated Customer Compliance Services       13,163     9,305     4,139     --
Industrial Waste Collection Services         214,246   224,144    96,729     --
Used Oil Collection Services                  69,771    57,162    23,082     --
Oil Re-Refining                              135,068    90,884    41,190     --
Automotive Recovery Services                  25,017    18,937     8,237     --
Additional services                           21,248    19,360    12,626     --
                                            --------  --------  --------  -----
    Total outside and intersegment revenue  $990,070  $955,961  $433,793  $  --
                                            ========  ========  ========  =====
</TABLE>

Outside revenue and intersegment revenue related to products and services within
the  Chemical  Services  segment  is  shown in the table below ($ in thousands):

<TABLE>
<CAPTION>
                                               2000        1999        1998        1997
                                            ----------  ----------  ----------  ----------
<S>                                         <C>         <C>         <C>         <C>
Incineration                                $ 149,952   $ 152,921   $ 166,691   $  74,318
Landfill                                      117,720     136,543     124,249     138,636
Wastewater Treatment                           58,500      49,325      33,221      28,411
Service Center                                296,165     335,758     328,678     291,624
Additional services                           102,297     101,614     144,437     140,222
Transportation                                 62,921      89,152     101,235     117,746
                                            ----------  ----------  ----------  ----------
                                              787,555     865,313     898,511     790,957
Less: Intrasegment revenue                   (132,569)   (144,155)   (158,807)   (145,871)
                                            ----------  ----------  ----------  ----------
    Total outside and intersegment revenue  $ 654,986   $ 721,158   $ 739,704   $ 645,086
                                            ==========  ==========  ==========  ==========
</TABLE>

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

<TABLE>
<CAPTION>
                                            YEAR ENDED AUGUST 31,
                               ----------------------------------------------
                                  2000        1999        1998        1997
                               ----------  ----------  ----------  ----------
<S>                            <C>         <C>         <C>         <C>
EBITDA                         $ (87,697)  $ 175,129   $ 168,919   $  25,670
Depreciation and amortization   (164,680)   (156,966)   (106,260)    (66,935)
Impairment and other charges    (367,793)    (11,287)    (64,882)   (253,484)
                               ----------  ----------  ----------  ----------
  Operating (loss) income      $(620,170)  $   6,876   $  (2,223)  $(294,749)
                               ==========  ==========  ==========  ==========
</TABLE>

Information  concerning  principal  geographic  areas  is  as  follows  ($  in
thousands):

<TABLE>
<CAPTION>
                                     UNITED STATES  CANADA   EUROPE    TOTAL
                                     -------------  -------  ------  ---------
<S>                                  <C>            <C>      <C>     <C>
FISCAL YEAR 2000:
  Outside revenue                        1,410,394  175,879      --  1,586,273
  Net property, plant and equipment        665,756  107,119      --    772,875
FISCAL YEAR 1999 :
  Outside revenue                        1,419,921  163,887  40,230  1,624,038
  Net property, plant and equipment      1,016,889  118,239      --  1,135,128
FISCAL YEAR 1998:
  Outside revenue                        1,001,375  124,432  46,924  1,172,731
  Net property, plant and equipment      1,039,985  116,089  62,388  1,218,462
FISCAL YEAR 1997:
  Outside revenue                          544,261   97,684      --    641,945
  Net property, plant and equipment        618,662   85,121      --    703,783
</TABLE>


                                      F-62
<PAGE>
24.  CONDENSED  COMBINED  FINANCIAL  STATEMENTS  OF  ENTITIES  IN  BANKRUPTCY

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

<TABLE>
<CAPTION>
                            CONDENSED COMBINED CONSOLIDATING STATEMENT OF OPERATIONS
                                           YEAR ENDED AUGUST 31, 2000

                                               ENTITIES IN      ENTITIES NOT IN
                                              REORGANIZATION    REORGANIZATION                     CONSOLIDATED
In thousands                                   PROCEEDINGS        PROCEEDINGS      ELIMINATIONS       TOTALS
-------------------------------------------  ----------------  -----------------  --------------  --------------
<S>                                          <C>               <C>                <C>             <C>
Revenues                                     $     1,368,792   $        241,971   $     (24,490)  $   1,586,273
Operating expenses                                 1,980,491            250,442         (24,490)      2,206,443
                                             ----------------  -----------------  --------------  --------------
Operating loss                                      (611,699)            (8,471)             --        (620,170)
Interest expense, net                               (136,425)            (5,454)             --        (141,879)
Other income (expense)                                 1,286                (79)             --           1,207
Equity in earnings of associated companies           (18,152)                --          19,921           1,769
                                             ----------------  -----------------  --------------  --------------
Loss before reorganization items, income
  taxes and minority interests                      (764,990)           (14,004)         19,921        (759,073)
Reorganization items                                 (60,923)                --              --         (60,923)
Income tax expense                                    (7,279)            (5,744)             --         (13,023)
                                             ----------------  -----------------  --------------  --------------
Loss before minority interest                       (833,192)           (19,748)         19,921        (833,019)
Minority interests                                         1               (173)             --            (172)
                                             ----------------  -----------------  --------------  --------------
Net loss                                     $      (833,191)  $        (19,921)  $      19,921   $    (833,191)
                                             ================  =================  ==============  ==============
</TABLE>
<TABLE>
<CAPTION>
                             CONDENSED COMBINED CONSOLIDATING BALANCE SHEET
                                       YEAR ENDED AUGUST 31, 2000

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

ASSETS:
Current assets                       $       443,563   $         78,260  $          --   $     521,823
Intercompany receivables                      57,370                 --        (57,370)             --
Property, plant and equipment, net           662,288            110,587             --         772,875
Investment in subsidiaries                     8,954                 --         (8,954)             --
Intangible assets, net                     1,735,390             62,895             --       1,798,285
Other assets                                  36,698              2,187             --          38,885
                                     ----------------  ----------------  --------------  --------------
                                     $     2,944,263   $        253,929  $     (66,324)  $   3,131,868
                                     ================  ================  ==============  ==============

LIABILITIES:
Current liabilities                  $       257,499   $         99,580  $          --   $     357,079
Intercompany payables                             --             57,370        (57,370)             --
Non-current liabilities                      299,617             87,873             --         387,490
Long-term debt                                    --                 --             --              --
Liabilities subject to compromise          2,500,973                 --             --       2,500,973
Minority interests                             1,144                152             --           1,296

STOCKHOLDERS' EQUITY (DEFICIT)              (114,970)             8,954         (8,954)       (114,970)
                                     ----------------  ----------------  --------------  --------------
                                     $     2,944,263   $        253,929  $     (66,324)  $   3,131,868
                                     ================  ================  ==============  ==============
</TABLE>


                                      F-63
<PAGE>
<TABLE>
<CAPTION>
                            CONDENSED COMBINED CONSOLIDATING STATEMENT OF CASH FLOWS
                                           YEAR ENDED AUGUST 31, 2000

                                                              ENTITIES IN      ENTITIES NOT IN
                                                             REORGANIZATION    REORGANIZATION     CONSOLIDATED
In thousands                                                  PROCEEDINGS        PROCEEDINGS         TOTALS
----------------------------------------------------------  ----------------  -----------------  --------------
<S>                                                         <C>               <C>                <C>
Net cash provided by (used in) operating activities         $       (61,419)  $          2,532   $     (58,887)
                                                            ----------------  -----------------  --------------

Cash flows from investing activities:
   Cash expended on acquisition of businesses                       (15,152)           (11,920)        (27,072)
   Proceeds from sales of property, plant and equipment               9,794                204           9,998
   Purchases of property, plant and equipment                       (43,692)            (9,406)        (53,098)
   Decrease (increase) in long-term investments                      48,339             (4,975)         43,364
   Proceeds from sale of business                                        --                 --              --
   Change in other, net                                                  --                 --              --
                                                            ----------------  -----------------  --------------
Net cash provided by (used in) investing activities                    (711)           (26,097)        (26,808)

Cash flows from financing activities:
   Issuance of common stock upon exercise of stock options               26                 --              26
   Borrowings of long-term debt                                     235,545             17,152         252,697
   Repayments of long-term debt                                     (60,933)            (6,221)        (67,154)
   Bank financing fees and expenses                                  (4,047)                --          (4,047)
   Bank overdraft                                                   (24,739)           (20,505)        (45,244)
   Change in derivative liabilities                                  21,759                 --          21,759
   Change in intercompany accounts                                  (39,054)            39,054              --
   Change in other, net                                                 146                 --             146
                                                            ----------------  -----------------  --------------
Net cash provided by (used in) financing activities                 128,703             29,480         158,183

Effect of exchange rate changes on cash                                  --              1,722           1,722
                                                            ----------------  -----------------  --------------
Net increase (decrease) in cash and cash equivalents                 66,573              7,637          74,210
Cash and cash equivalents at:
   Beginning of year                                                  7,661              2,411          10,072
                                                            ----------------  -----------------  --------------
   End of year                                              $        74,234   $         10,048   $      84,282
                                                            ================  =================  ==============
</TABLE>


25.  SUMMARIZED  FINANCIAL  INFORMATION  OF  GUARANTOR/NON-GUARANTOR

In  connection  with  the  Safety-Kleen Acquisition, Safety-Kleen Services, Inc.
(formerly  known as LES, Inc.), a wholly owned subsidiary of the Company, issued
$325  million  of  9.25%  Senior Subordinated Notes (see Note 8).  The Notes are
jointly  and  severally  guaranteed by the Company and all wholly owned domestic
subsidiaries of the Company, including the wholly owned domestic subsidiaries of
Safety-Kleen  Corp.,  on  a  full and unconditional basis.  No foreign direct or
indirect  subsidiary  or  non-wholly  owned domestic subsidiary is an obligor or
guarantor on the financing.  Separate financial statements and other disclosures
concerning each of Safety-Kleen Services, Inc. and the subsidiary guarantors are
not  presented  because  management believes they are not material to investors.
Summarized  financial  information  for  the  Company  and its subsidiaries on a
combined  basis  is  set  forth  below.


                                      F-64
<PAGE>
<TABLE>
<CAPTION>
                                CONDENSED COMBINED CONSOLIDATING STATEMENT OF OPERATIONS
                                               YEAR ENDED AUGUST 31, 2000


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

Revenues                     $          --   $       5,233   $ 1,516,202   $   241,971   $    (177,133)  $   1,586,273
Operating expenses                    (323)        107,990     2,014,995       260,914        (177,133)      2,206,443
                             --------------  --------------  ------------  ------------  --------------  --------------
Operating income (loss)                323        (102,757)     (498,793)      (18,943)             --        (620,170)
Interest (expense) income,
  net                              (28,110)        126,346      (235,129)       (4,986)             --        (141,879)
Other income                            --             713           573           (79)             --           1,207
Equity in earnings of
  associated companies            (805,146)       (831,906)           --            --       1,638,821           1,769
                             --------------  --------------  ------------  ------------  --------------  --------------
Loss before reorganization
  items, income taxes and
  minority interests              (832,933)       (807,604)     (733,349)      (24,008)      1,638,821        (759,073)
Reorganization items                    --              --       (60,923)           --              --         (60,923)
Income tax (expense)
benefit                               (258)          2,458        (9,479)       (5,744)             --         (13,023)
                             --------------  --------------  ------------  ------------  --------------  --------------
Loss before minority
  interests                       (833,191)       (805,146)     (803,751)      (29,752)      1,638,821        (833,019)
Minority interests                      --              --             1          (173)             --            (172)
                             --------------  --------------  ------------  ------------  --------------  --------------
Net loss                     $    (833,191)  $    (805,146)  $  (803,750)  $   (29,925)  $   1,638,821   $    (833,191)
                             ==============  ==============  ============  ============  ==============  ==============
</TABLE>
<TABLE>
<CAPTION>
                                   CONDENSED COMBINED CONSOLIDATING BALANCE SHEET
                                                   AUGUST 31, 2000


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

ASSETS:
Current assets             $      42,657   $      30,555   $   368,903   $    79,708  $          --   $     521,823
Intercompany receivables         280,765       2,752,517            --            --     (3,033,282)             --
Property, plant and
  equipment, net                      --          27,730       634,918       110,227             --         772,875
Investment in
  subsidiaries                   (87,323)       (812,211)        4,356            --        895,178              --
Intangible assets, net                --          58,565     1,669,182        70,538             --       1,798,285
Other assets                          --           3,107        33,591         2,187             --          38,885
                           --------------  --------------  ------------  -----------  --------------  -------------
                           $     236,099   $   2,060,263   $ 2,710,950   $   262,660  $  (2,138,104)  $   3,131,868
                           ==============  ==============  ============  ===========  ==============  ==============

LIABILITIES:
Current liabilities        $      22,946   $      27,803   $   208,120   $    98,210  $          --   $     357,079
Intercompany payables                 --              --     2,976,112        57,170     (3,033,282)             --
Non-current liabilities          (22,081)        258,314        63,784        87,473             --         387,490
Long-term debt                        --              --            --            --             --              --
Liabilities subject to
  compromise                     350,204       1,860,848       289,216           705             --       2,500,973
Minority interests                    --             621           523           152             --           1,296

STOCKHOLDERS'
  EQUITY (DEFICIT)              (114,970)        (87,323)     (826,805)       18,950        895,178        (114,970)
                           --------------  --------------  ------------  -----------  --------------  -------------
                           $     236,099   $   2,060,263   $ 2,710,950   $   262,660  $  (2,138,104)  $   3,131,868
                           ==============  ==============  ============  ===========  ==============  ==============
</TABLE>


                                      F-65
<PAGE>
<TABLE>
<CAPTION>
                              CONDENSED COMBINED CONSOLIDATING STATEMENT OF CASH FLOWS
                                             YEAR ENDED AUGUST 31, 2000


                                           SAFETY-KLEEN                  SUBSIDIARY
                           SAFETY-KLEEN     SERVICES,      SUBSIDIARY       NON-                      CONSOLIDATED
In thousands                  CORP.            INC.        GUARANTORS    GUARANTORS   ELIMINATIONS       TOTALS
------------------------  --------------  --------------  ------------  ------------  -------------  --------------
<S>                       <C>             <C>             <C>           <C>           <C>            <C>
Net cash provided by
  (used in) operating
 Activities               $      14,313   $     143,263   $  (214,846)  $    (1,617)  $          --  $     (58,887)
                          --------------  --------------  ------------  ------------  -------------  --------------
Cash flows from
 Investing activities:

Cash expended on
  acquisition of
  businesses                         --              --       (15,152)      (11,920)             --        (27,072)
Proceeds from sales of
  property, plant and
  equipment                          --             106         9,688           204              --          9,998
Purchases of property,
  plant and equipment                --          (9,314)      (34,377)       (9,407)             --        (53,098)
Decrease  (increase) in
  long-term                          --          10,460        37,879        (4,975)             --         43,364
  investments
Net cash provided by
  (used in) investing
  activities                         --           1,252        (1,962)      (26,098)             --        (26,808)
                          --------------  --------------  ------------  ------------  -------------  --------------
Cash flows from
  financing activities:
Issuance of common
  stock on exercise of
  options                            26              --            --            --              --             26
Borrowings of long-term
  debt                               --         227,000         8,545        17,152              --        252,697
Repayments of long-
  term debt                          --         (54,129)       (6,804)       (6,221)             --        (67,154)
Bank financing fees                (222)             --        (3,825)           --              --         (4,047)
Bank overdraft                       --         (24,739)           --       (20,505)             --        (45,244)
Change in derivative
  liabilities                        --          21,759            --            --              --         21,759
Change in other, net                146              --            --            --              --            146
Change in intercompany
  accounts                      (34,605)       (223,339)      214,741        43,203              --             --
                          --------------  --------------  ------------  ------------  -------------  --------------
Net cash provided by            (34,655)                                     33,629
  (used in) financing
  activities                                    (53,448)      212,657                            --        158,183
                          --------------  --------------  ------------  ------------  -------------  --------------
Effect of exchange rate              --                                       1,722
  changes on cash                                    --            --                            --          1,722
                          --------------  --------------  ------------  ------------  -------------  --------------
Net increase (decrease)
  in cash and cash
  equivalents                   (20,342)         91,067        (4,151)        7,636              --         74,210
Cash and cash
  equivalents at:
Beginning of year                22,495         (27,187)       12,352         2,412              --         10,072
                          --------------  --------------  ------------  ------------  -------------  --------------
End of year               $       2,153   $      63,880   $     8,201   $    10,048   $          --  $      84,282
                          ==============  ==============  ============  ============  =============  ==============
</TABLE>


                                      F-66
<PAGE>
<TABLE>
<CAPTION>
                                CONDENSED COMBINED CONSOLIDATING STATEMENT OF OPERATIONS
                                               YEAR ENDED AUGUST 31, 1999


                                              SAFETY-KLEEN                  SUBSIDIARY
                              SAFETY-KLEEN     SERVICES,      SUBSIDIARY       NON-                       CONSOLIDATED
In thousands                     CORP.            INC.        GUARANTORS    GUARANTORS    ELIMINATIONS       TOTALS
---------------------------  --------------  --------------  ------------  ------------  --------------  --------------
<S>                          <C>             <C>             <C>           <C>           <C>             <C>
Revenues                     $          --   $         403   $ 1,524,512   $   243,339   $    (144,216)  $   1,624,038
Operating expenses                  14,677          47,750     1,474,720       224,231        (144,216)      1,617,162
                             --------------  --------------  ------------  ------------  --------------  --------------
Operating income (loss)            (14,677)        (47,347)       49,792        19,108              --           6,876
Interest (expense) income,
  net                              (19,604)         81,224      (243,986)       (3,814)             --        (186,180)
Other income (expense)                  --          (5,923)            9        (1,317)             --          (7,231)
Equity in earnings of
  associated companies            (181,962)       (222,247)        1,263            --         404,209           1,263
                             --------------  --------------  ------------  ------------  --------------  --------------
Loss before income taxes
  and minority interests          (216,243)       (194,293)     (192,922)       13,977         404,209        (185,272)
Income tax (expense)
  benefit                           (6,912)         12,331       (33,382)      (11,131)             --         (39,094)
                             --------------  --------------  ------------  ------------  --------------  --------------
Income (loss) before
  minority interests              (223,155)       (181,962)     (226,304)        2,846         404,209        (224,366)
Minority interests                      --              --         1,197            14              --           1,211
                             --------------  --------------  ------------  ------------  --------------  --------------
Net income (loss)            $    (223,155)  $    (181,962)  $  (225,107)  $     2,860   $     404,209   $    (223,155)
                             ==============  ==============  ============  ============  ==============  ==============
</TABLE>
<TABLE>
<CAPTION>
                                   CONDENSED COMBINED CONSOLIDATING BALANCE SHEET
                                                  AUGUST 31, 1999


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

ASSETS:
Current assets            $      60,108   $     (20,124)  $   347,049   $    61,155   $          --   $     448,188
Intercompany receivables        245,803       2,342,495            --            --      (2,588,298)             --
Property, plant and
  equipment, net                     --          16,835       996,841       121,452              --       1,135,128
Investment in
  subsidiaries                  715,632         150,261       (17,026)           --        (848,867)             --
Intangible assets, net               --         107,853     1,733,326        81,028              --       1,922,207
Other assets                     (9,050)         51,498        84,932         2,411              --         129,791
                          --------------  --------------  ------------  ------------  --------------  -------------
                          $   1,012,493   $   2,648,818   $ 3,145,122   $   266,046   $  (3,437,165)  $   3,635,314
                          ==============  ==============  ============  ============  ==============  =============

LIABILITIES:
Current liabilities       $     362,919   $   1,667,461   $   377,627   $   110,301   $          --   $   2,518,308
Intercompany payables                --              --     2,542,606        45,692      (2,588,298)             --
Non-current liabilities         (65,927)        265,104        80,988        95,424              --         375,589
Long-term debt                       --              --        24,741            51              --          24,792
Minority interests                   --             621           524           (21)             --           1,124

STOCKHOLDERS'
  EQUITY                        715,501         715,632       118,636        14,599        (848,867)        715,501
                          --------------  --------------  ------------  ------------  --------------  -------------
                          $   1,012,493   $   2,648,818   $ 3,145,122   $   266,046   $  (3,437,165)  $   3,635,314
                          ==============  ==============  ============  ============  ==============  =============
</TABLE>


                                      F-67
<PAGE>
<TABLE>
<CAPTION>
                             CONDENSED COMBINED CONSOLIDATING STATEMENT OF CASH FLOWS
                                            YEAR ENDED AUGUST 31, 1999


                                           SAFETY-KLEEN                  SUBSIDIARY
                           SAFETY-KLEEN     SERVICES,      SUBSIDIARY       NON-      ELIMINATION    CONSOLIDATED
In thousands                  CORP.            INC.        GUARANTORS    GUARANTORS     ENTRIES         TOTALS
------------------------  --------------  --------------  ------------  ------------  ------------  --------------
<S>                       <C>             <C>             <C>           <C>           <C>           <C>
Net cash provided by
  (used in) operating
  activities              $      28,982   $     277,722   $  (341,114)  $    52,944   $         --  $      18,534
                          --------------  --------------  ------------  ------------  ------------  --------------
Cash flows from
 investing activities:
Cash expended on
  acquisition of
  businesses                         --              --       (14,904)           --             --        (14,904)
Proceeds from sales of
  property, plant and
  equipment                          --             725         5,051           206             --          5,982
Purchases of property,
  plant and equipment                --         (17,965)      (40,263)      (13,599)            --        (71,827)
Decrease  (increase) in
  long-term investments              --         (10,460)      (25,823)       38,066             --          1,783
Proceeds from sale of
  business                           --              --       129,124            --             --        129,124
                          --------------  --------------  ------------  ------------  ------------  --------------
Net cash provided by
  (used in) investing
  activities                         --         (27,700)       53,185        24,673             --         50,158
                          --------------  --------------  ------------  ------------  ------------  --------------
Cash flows from
  financing activities:
Issuance of common
  stock on exercise of
  options                           212              --            --            --             --            212
Borrowings of long-term
  debt                          225,000           1,460        10,450            --             --        236,910
Repayment of long-term
  debt                         (200,000)       (164,678)       (2,128)      (10,619)            --       (377,425)
Bank financing fees              (5,936)         (4,367)           --            --             --        (10,303)
Bank overdraft                       --          20,767            --        19,006             --         39,773
Change in derivative
  liabilities                        --          42,492        (2,038)           --             --         40,454
Change in intercompany
  accounts                      (25,763)       (172,883)      291,266       (92,620)            --             --
                          --------------  --------------  ------------  ------------  ------------  --------------
Net cash provided by
  (used in) financing
  activities                     (6,487)       (277,209)      297,550       (84,233)            --        (70,379)
                          --------------  --------------  ------------  ------------  ------------  --------------
Effect of exchange rate
  changes on cash                    --              --            --        (3,564)            --         (3,564)
                          --------------  --------------  ------------  ------------  ------------  --------------
Net increase (decrease)
  in cash and cash
  equivalents                    22,495         (27,187)        9,621       (10,180)            --         (5,251)
Cash and cash
  equivalents at:
Beginning of year                    --              --         2,731        12,592             --         15,323
                          --------------  --------------  ------------  ------------  ------------  --------------
End of year               $      22,495   $     (27,187)  $    12,352   $     2,412   $         --  $      10,072
                          ==============  ==============  ============  ============  ============  ==============
</TABLE>


                                      F-68
<PAGE>
<TABLE>
<CAPTION>
                                CONDENSED COMBINED CONSOLIDATING STATEMENT OF OPERATIONS
                                               YEAR ENDED AUGUST 31, 1998


                                              SAFETY-KLEEN                  SUBSIDIARY
                              SAFETY-KLEEN     SERVICES,      SUBSIDIARY       NON-                       CONSOLIDATED
In thousands                     CORP.            INC.        GUARANTORS    GUARANTORS    ELIMINATIONS       TOTALS
---------------------------  --------------  --------------  ------------  ------------  --------------  --------------
<S>                          <C>             <C>             <C>           <C>           <C>             <C>
Revenues                     $          --   $          --   $ 1,076,612   $   218,731   $    (122,612)  $   1,172,731
Operating expenses                   7,535          (1,091)    1,107,289       183,833        (122,612)      1,174,954
                             --------------  --------------  ------------  ------------  --------------  --------------
Operating income (loss)             (7,535)          1,091       (30,677)       34,898              --          (2,223)
Interest (expense) income,
  net                              (38,156)         47,620      (114,670)      (15,064)             --        (120,270)
Other income (expense)                  --          (3,157)        1,950           165              --          (1,042)
Equity in earnings of
  associated companies             (72,890)       (107,441)           --            --         180,331              --
                             --------------  --------------  ------------  ------------  --------------  --------------
Loss before income taxes
  and minority interests          (118,581)        (61,887)     (143,397)       19,999         180,331        (123,535)
Income tax (expense)
benefit                             15,370              --        38,139       (14,078)             --          39,431
                             --------------  --------------  ------------  ------------  --------------  --------------
Loss before minority
  interests                       (103,211)        (61,887)     (105,258)        5,921         180,331         (84,104)
Minority interests                      --              --          (572)          248              --            (324)
                             --------------  --------------  ------------  ------------  --------------  --------------
Loss before extraordinary
  items                           (103,211)        (61,887)     (105,830)        6,169         180,331         (84,428)
Extraordinary losses                    --         (11,003)       (3,873)       (3,907)             --         (18,783)
                             --------------  --------------  ------------  ------------  --------------  --------------
Net loss                     $    (103,211)  $     (72,890)  $  (109,703)  $     2,262   $     180,331   $    (103,211)
                             ==============  ==============  ============  ============  ==============  ==============
</TABLE>
<TABLE>
<CAPTION>
                                 CONDENSED COMBINED CONSOLIDATING BALANCE SHEET
                                                 AUGUST 31, 1998


                                          SAFETY-KLEEN                SUBSIDIARY
                           SAFETY-KLEEN     SERVICES,    SUBSIDIARY      NON-                      CONSOLIDATED
In thousands                  CORP.           INC.       GUARANTORS   GUARANTORS    ELIMINATIONS      TOTALS
------------------------  --------------  -------------  -----------  -----------  --------------  -------------
<S>                       <C>             <C>            <C>          <C>          <C>             <C>
ASSETS:
Current assets            $     102,678   $          --  $   265,446  $   120,876  $          --   $     489,000
Intercompany receivables        277,396         768,746           --           --     (1,046,142)             --
Property, plant and
  equipment, net                     --              --    1,030,515      187,947             --       1,218,462
Investment in
  subsidiaries                  839,941       1,710,115       25,603           --     (2,575,659)             --
Intangible assets, net               --         106,203    1,759,676      206,592             --       2,072,471
Other assets                        443          43,519       42,774        2,806             --          89,542
                          --------------  -------------  -----------  -----------  --------------  -------------
                          $   1,220,458   $   2,628,583  $ 3,124,014  $   518,221  $  (3,621,801)  $   3,869,475
                          ==============  =============  ===========  ===========  ==============  =============

LIABILITIES:
Current liabilities       $     509,162   $   1,787,335  $   306,529  $   120,950  $          --   $   2,723,976
Intercompany payables                --              --      964,381       81,761     (1,046,142)             --
Non-current liabilities         (54,272)          1,307      297,155      118,360             --         362,550
Long-term debt                       --              --       15,645           55             --          15,700
Minority interests                   --              --        1,681           --             --           1,681

STOCKHOLDERS'
  EQUITY                        765,568         839,941    1,538,623      197,095     (2,575,659)        765,568
                          --------------  -------------  -----------  -----------  --------------  -------------
                          $   1,220,458   $   2,628,583  $ 3,124,014  $   518,221  $  (3,621,801)  $   3,869,475
                          ==============  =============  ===========  ===========  ==============  =============
</TABLE>


                                      F-69
<PAGE>
<TABLE>
<CAPTION>
                               CONDENSED COMBINED CONSOLIDATING STATEMENT OF CASH FLOWS
                                              YEAR ENDED AUGUST 31, 1998


                                             SAFETY-KLEEN                  SUBSIDIARY
                             SAFETY-KLEEN     SERVICES,      SUBSIDIARY       NON-                      CONSOLIDATED
In thousands                    CORP.            INC.        GUARANTORS    GUARANTORS   ELIMINATIONS       TOTALS
--------------------------  --------------  --------------  ------------  ------------  -------------  --------------
<S>                         <C>             <C>             <C>           <C>           <C>            <C>
Net cash provided by
  (used in) operating
  activities                $    (142,547)  $      85,160   $   (80,173)  $     2,752   $          --  $    (134,808)
                            --------------  --------------  ------------  ------------  -------------  --------------
Cash flows from
 investing activities:
Cash expended on
  acquisition of
  businesses                           --              --    (1,099,350)           --              --     (1,099,350)
Proceeds from sales of
  property, plant and
  equipment                            --              --        11,926           596              --         12,522
Purchases of property,
  plant and equipment                  --              --       (28,767)          771              --        (27,996)
Decrease  (increase) in
  long-term investments            20,000              --       (11,504)        5,411              --         13,907
Proceeds from sale of
  business                             --              --        33,675            --              --         33,675
                            --------------  --------------  ------------  ------------  -------------  --------------
Net cash provided by
  (used in) investing
  activities                       20,000              --    (1,094,020)        6,778              --     (1,067,242)
                            --------------  --------------  ------------  ------------  -------------  --------------
Cash flows from financing
  activities:
Issuance of common stock
  on exercise of options              509              --            --            --              --            509
Borrowings of long-term
  debt                                 --       1,787,112         2,074        69,327              --      1,858,513
Repayments of long-term
  debt                                 --        (330,862)     (218,436)      (60,265)             --       (609,563)
Bank financing fees                  (253)        (49,567)           --        (1,712)             --        (51,532)
Bank overdraft                         --              --         3,971        (9,364)             --         (5,393)
Change in derivative
  liabilities                          --              --          (443)           --              --           (443)
Change in intercompany
  accounts                        108,638      (1,491,843)    1,378,872         4,333              --             --
                            --------------  --------------  ------------  ------------  -------------  --------------
Net cash provided by
  (used in) financing
  activities                      108,894         (85,160)    1,166,038         2,319              --      1,192,091
                            --------------  --------------  ------------  ------------  -------------  --------------
Effect of exchange rate
  changes on cash                      --              --            --          (452)             --           (452)
                            --------------  --------------  ------------  ------------  -------------  --------------
Net increase (decrease) in
  cash and cash
  equivalents                     (13,653)             --        (8,155)       11,397              --        (10,411)
Cash and cash equivalents
  at:
Beginning of year                  13,653   $          --        10,886         1,195              --         25,734
                            --------------  --------------  ------------  ------------  -------------  --------------
End of year                 $          --   $          --   $     2,731   $    12,592   $          --  $      15,323
                            ==============  ==============  ============  ============  =============  ==============
</TABLE>


                                      F-70
<PAGE>
<TABLE>
<CAPTION>
                               CONDENSED COMBINED CONSOLIDATING STATEMENT OF OPERATIONS
                                              YEAR ENDED AUGUST 31, 1997

                                              SAFETY-KLEEN                  SUBSIDIARY
                              SAFETY-KLEEN     SERVICES,      SUBSIDIARY       NON-      ELIMINATION    CONSOLIDATED
In thousands                     CORP.            INC.        GUARANTORS    GUARANTORS     ENTRIES         TOTALS
---------------------------  --------------  --------------  ------------  ------------  ------------  --------------
<S>                          <C>             <C>             <C>           <C>           <C>           <C>
Revenues                     $          --   $          --   $   515,415   $   126,530   $         --  $     641,945
Operating expenses                   4,035             912       811,850       119,897             --        936,694
                             --------------  --------------  ------------  ------------  ------------  --------------
Operating income (loss)             (4,035)           (912)     (296,435)        6,633             --       (294,749)
Interest (expense) income,                                                                         --
  net                               29,497          (2,363)      (64,645)       (7,674)                      (45,185)
Other income (expense)                  --              --        (1,350)           64             --         (1,286)
Equity in earnings of
  associated companies            (323,325)       (320,050)           --            --        643,375             --
                             --------------  --------------  ------------  ------------  ------------  --------------
Loss before income taxes
  and minority interests          (297,863)       (323,325)     (362,430)         (977)       643,375       (341,220)
Income tax (expense)
  benefit                           (3,681)             --        52,394        (8,918)            --         39,795
                             --------------  --------------  ------------  ------------  ------------  --------------
Income (loss) before
  minority interests              (301,544)       (323,325)     (310,036)       (9,895)       643,375       (301,425)
Minority interests                      --              --           (72)          (47)            --           (119)
                             --------------  --------------  ------------  ------------  ------------  --------------
Net income (loss)            $    (301,544)  $    (323,325)  $  (310,108)  $    (9,942)  $    643,375  $    (301,544)
                             ==============  ==============  ============  ============  ============  ==============
</TABLE>
<TABLE>
<CAPTION>
                                   CONDENSED COMBINED CONSOLIDATING BALANCE SHEET
                                                   AUGUST 31, 1997


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

ASSETS:
Current assets             $      26,000   $      13,027   $   120,205   $    62,658  $          --   $     221,890
Intercompany receivables         680,662         359,527            --            --     (1,040,189)             --
Property, plant and
  equipment, net                      --              --       539,080       164,703             --         703,783
Investment in
  subsidiaries                   (54,042)       (235,981)           --            --        290,023              --
Intangible assets, net                --         112,968       294,651        91,496             --         499,115
Other assets                      20,235          14,918        34,776        19,024             --          88,953
                           --------------  --------------  ------------  -----------  --------------  --------------
                           $     672,855   $     264,459   $   988,712   $   337,881  $    (750,166)  $   1,513,741
                           ==============  ==============  ============  ===========  ==============  ==============

LIABILITIES:
Current liabilities        $     494,239   $     317,538   $   126,195   $   140,459  $          --   $   1,078,431
Intercompany payables                 --              --     1,009,646        30,543     (1,040,189)             --
Non-current liabilities            4,131             963       175,316        65,198             --         245,608
Long-term debt                        --              --        15,700            --             --          15,700
Minority interests                    --              --          (483)           --             --            (483)

STOCKHOLDERS'
  EQUITY (DEFICIT)               174,485         (54,042)     (337,662)      101,681        290,023         174,485
                           --------------  --------------  ------------  -----------  --------------  --------------
                           $     672,855   $     264,459   $   988,712   $   337,881  $    (750,166)  $   1,513,741
                           ==============  ==============  ============  ===========  ==============  ==============
</TABLE>


                                      F-71
<PAGE>
<TABLE>
<CAPTION>
                                CONDENSED COMBINED CONSOLIDATING STATEMENT OF CASH FLOWS
                                               YEAR ENDED AUGUST 31, 1997


                                                SAFETY-KLEEN                  SUBSIDIARY
                                SAFETY-KLEEN     SERVICES,      SUBSIDIARY       NON-      ELIMINATION    CONSOLIDATED
In thousands                       CORP.            INC.        GUARANTORS    GUARANTORS     ENTRIES         TOTALS
-----------------------------  --------------  --------------  ------------  ------------  ------------  --------------
<S>                            <C>             <C>             <C>           <C>           <C>           <C>
Net cash provided by (used
  in) operating activities:    $      50,107   $       1,459   $  (150,705)  $    92,727   $         --  $      (6,412)
                               --------------  --------------  ------------  ------------  ------------  --------------
Cash flows from investing
  activities:

Cash acquired on acquisition
  of businesses                       15,433              --            --            --             --         15,433
Proceeds from sales of
  property, plant and
  equipment                               --              --         1,561           167             --          1,728
Purchases of property, plant
  and equipment                           --              --       (31,534)         (416)            --        (31,950)
Decrease  (increase) in
  long-term investments                 (504)             --         2,973        (9,967)            --         (7,498)
                               --------------  --------------  ------------  ------------  ------------  --------------
Net cash provided by (used
  in) investing activities            14,929              --       (27,000)      (10,216)            --        (22,287)
                               --------------  --------------  ------------  ------------  ------------  --------------
Cash flows from financing
  activities:
Issuance of common stock on
  exercise of options
                                         155              --            --            --             --            155
Borrowings of long-term
  debt                                19,500         315,000            --       101,018             --        435,518
Repayments of long-term
  debt                                (4,282)             --        (3,982)      (24,793)            --        (33,057)
Bank financing fees                     (238)        (15,695)       (1,092)       (2,479)            --        (19,504)
Bank overdraft                            --              --            --        10,864             --         10,864
Change in derivative
  liabilities                             --              --           (75)           --             --            (75)
Payments to Laidlaw Inc.
                                    (349,116)             --            --            --             --       (349,116)
Advances from Laidlaw Inc.
                                          --              --         7,562            --             --          7,562
Change in intercompany
  accounts                           282,740        (300,802)      188,675      (170,613)            --             --
                               --------------  --------------  ------------  ------------  ------------  --------------
Net cash provided by (used
  in) financing activities
                                     (51,241)         (1,497)      191,088       (86,003)            --         52,347
                               --------------  --------------  ------------  ------------  ------------  --------------
Effect of exchange rate
  changes on cash                       (142)             38          (927)        3,117             --          2,086
                               --------------  --------------  ------------  ------------  ------------  --------------
Net increase (decrease) in
  cash and cash
  equivalents                         13,653              --        12,456          (375)            --         25,734
Cash and cash equivalents at:
Beginning of year                         --              --        (1,570)        1,570             --             --
                               --------------  --------------  ------------  ------------  ------------  --------------
End of year                    $      13,653   $          --   $    10,886   $     1,195   $         --  $      25,734
                               ==============  ==============  ============  ============  ============  ==============
</TABLE>


                                      F-72
<PAGE>
26.  SUBSEQUENT  EVENTS

Subsequent  to  August  31,  2000,  the Company committed to a plan to close two
incinerators,  a  wastewater treatment facility and a transportation facility in
the  Chemical  Services  Division.  In  connection  therewith,  the Company will
record  closure  and  post  closure  obligations of approximately $56 million in
fiscal year 2001.  Anticipated payments related to these obligations for each of
the  next  five years and thereafter are; $10.0 million in 2001; $9.0 million in
2002; $2.0 million in 2003; $1.0 million in 2004; $1.0 million in 2005 and $33.0
million  thereafter.

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

A  subsidiary  of  the Company has signed an agreement to serve as the exclusive
distributor  of  the innovative line of parts cleaning equipment manufactured by
SystemOne(R)  Technologies,  Inc. ("SystemOne(R)"). The Branch Sales and Service
locations  across North America began marketing SystemOne's(R) products in early
2001.  The multi-year agreement was approved by the Bankruptcy Court on December
15,  2000.  As  of  May  18, 2001, the Company has purchased approximately 3,750
units of which approximately 750 are in the field under rental agreements, 1,000
are in the field under free trial and 2,000 are in inventory or at SystemOne(R).

The  Company  has committed to replace certain equipment in the Branch Sales and
Services  Division  fleet,  including  135  parts washer trucks, 10 oil services
trucks,  57  fluid  recovery  service  trucks,  90 branch industrial vans and 15
over-the-road  tractors.  The  total  cost  of  the  replacements  in  2001  is
approximately  $14.9  million  and approximately $3.0 million of this commitment
has  been  disbursed  as  of  May  18,  2001.

The Company has entered into an outsourcing arrangement with Acxiom to outsource
support,  operation  of  the mainframe and server and to integrate the mainframe
and  server  platforms from the closed SK Elgin data center to Acxiom's facility
in  Downers  Grove,  Illinois.  The term of the agreement is for five years from
the  date of integration, and the cost is approximately $585,000 per month for a
total  commitment  of  approximately  $35  million  over  the  five-year period.

Effective  May  30,  2001,  the  Company  entered  into an agreement with Unisys
Corporation  and  certain  of  its  affiliates to provide outsourced information
technology  support  functions  related to personal computer and related network
needs.  The agreement provides for a transition fee of approximately $650,000 as
well  as a monthly fee estimated at approximately $500,000 based on, among other
things,  the  actual  number  of  workstations,  laptops  and  servers  used.

Pursuant  to  the  Maximum  Achievable  Control  Technology  (MACT)  compliance
standards  for  incinerator  emissions,  and the new federal standards targeting
states  that have high levels of Nitrogen Oxides (NOx), the Company plans to add
new air pollution abatement equipment with a cost of approximately $23.2 million
over  a  three-year  period.  The  Company  has  already  committed  to purchase
approximately  $8.7  million  of  this  equipment.

The  Company  has  entered  into  Bankruptcy  Court  approved settlements to pay
approximately  $8.3  million  in  respect  of  approximately  $15.0  million  of
pre-petition  liabilities  related  to  certain critical transportation vendors.

Subsequent  to  August  31,  2000,  the  Company  failed  to comply with certain
affirmative  covenants  within  its DIP Facility, primarily related to providing
audited  financial  statements  by  specified  dates,  for  which  waivers  of
non-compliance  have been received. In connection with a recent amendment to the
DIP  facility,  the  Company will prepare a Chemical Services marketing book and
begin  distribution  to  potential acquirers or strategic partners by August 31,
2001.  No  assurances  can be given as to the probable outcome of such marketing
effort.


                                      F-73
<PAGE>

    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS ON FINANCIAL STATEMENT SCHEDULE

To  Safety-Kleen  Corp.:

We have audited, in accordance with auditing standards generally accepted in the
United  States,  the consolidated financial statements of Safety-Kleen Corp. and
subsidiaries  included  in  this Form 10-K/A, and have issued our report thereon
dated  May 18, 2001 (except with respect to the matters discussed in Note 26, as
to  which  the  date is June 28, 2001).  Our audits were made for the purpose of
forming an opinion on those statements taken as a whole.  The schedule listed in
Item  14  of  this Form 10-K/A is the responsibility of the Company's management
and  is  presented  for  purposes  of complying with the Securities and Exchange
Commission's  rules  and  is  not  part of the basic financial statements.  This
schedule  has been subjected to the auditing procedures applied in the audits of
the  basic  financial  statements  and,  in  our  opinion,  fairly states in all
material  respects  the  financial  data  required  to  be  set forth therein in
relation  to  the  basic  financial  statements  taken  as  a  whole.



/S/ ARTHUR  ANDERSEN  LLP

Columbia, South Carolina
  May 18, 2001


                                      S-1
<PAGE>
<TABLE>
<CAPTION>
                                                 SAFETY-KLEEN CORP.
                                   SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
                           FOR THE FISCAL YEARS ENDED AUGUST 31, 2000, 1999, 1998 AND 1997


                                                   ADDITIONS    CHARGE TO
                                    BALANCE AT     RESULTING      COSTS        CHARGED                      BALANCE
                                     BEGINNING       FROM          AND        TO OTHER                       AT END
DESCRIPTION                           OF YEAR    ACQUISITIONS    EXPENSES   ACCOUNTS (A)   DEDUCTIONS (B)   OF YEAR
----------------------------------  -----------  -------------  ----------  -------------  --------------  ---------
<S>                                 <C>          <C>            <C>         <C>            <C>              <C>
Fiscal year ended August 31, 2000:
  Allowance for doubtful accounts   $    20,074  $          --  $   74,337  $       (855)  $       (8,303)  $ 85,253
Fiscal year ended August 31, 1999:
  Allowance for doubtful accounts   $    10,940  $          --  $   14,177  $      4,151   $       (9,194)  $ 20,074
Fiscal year ended August 31, 1998:
  Allowance for doubtful accounts   $     7,308  $       7,977  $    2,536  $      6,002   $      (12,883)  $ 10,940
Fiscal year ended August 31, 1997:
  Allowance for doubtful accounts   $     4,983  $       2,243  $    6,803  $     (3,979)  $       (2,742)  $  7,308
<FN>
(a)  Reclassifications  to/from  other  accounts
(b)  Uncollectible  amounts  written  off.
</TABLE>


                                      F-75
<PAGE>
</TEXT>
</DOCUMENT>
