
<PAGE>   1
===============================================================================

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                   FORM 10-Q


 (Mark One)

[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE 
     SECURITIES EXCHANGE ACT OF 1934

     For the quarterly period ended February 28, 1997 or
                                    -----------------

[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE 
     SECURITIES EXCHANGE ACT OF 1934

     For the transition period from                to
                                    --------------    ----------------

     Commission file number 1-11016


                                 ALLWASTE, INC.
             (Exact Name of Registrant as Specified in its Charter)


           DELAWARE                                           74-2427167
(State or Other Jurisdiction of                            (I.R.S. Employer
 Incorporation or Organization)                         Identification Number)

     5151 SAN FELIPE, SUITE 1600
           HOUSTON, TEXAS                                       77056-3609
(Address of Principal Executive Offices)                        (Zip Code)

                                 (713) 623-8777
              (Registrant's Telephone Number, Including Area Code)


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

      The number of shares of Common Stock of the Registrant, par value $.01
per share, outstanding at April 9, 1997 was 37,481,244.

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

<PAGE>   2
                                  REPORT INDEX



<TABLE>
<CAPTION>
PART AND ITEM NO.                                                                     PAGE NO.
-----------------                                                                     --------
<S>                                                                                      <C>
PART I - Financial Information

      Item 1 - Financial Statements

      General Information ...........................................................    1

      Condensed Consolidated Balance Sheets as of February 28, 1997 (unaudited)
          and August 31, 1996 .......................................................    2

      Condensed Consolidated Statements of Operations for the Six and Three Months
         Ended February 28, 1997 and February 29, 1996 (unaudited) ..................    3

      Condensed Consolidated Statements of Cash Flows for the Six Months
         Ended February 28, 1997 and February 29, 1996 (unaudited) ..................    4

      Notes to Condensed Consolidated Financial Statements (unaudited) ..............    5

      Item 2 - Management's Discussion and Analysis of Financial Condition
                   and Results of Operations ........................................    8

PART II - Other Information

      Item 2 - Changes in Securities ................................................   13

      Item 4 - Submission of Matters to a Vote of Security Holders ..................   13

      Item 6 - Exhibits and Reports on Form 8-K .....................................   14
</TABLE>
<PAGE>   3
                     PART I, ITEM 1 - FINANCIAL INFORMATION
                              GENERAL INFORMATION

        The condensed consolidated financial statements herein have been
prepared by the Company without audit, pursuant to the rules and regulations of
the Securities and Exchange Commission (the "SEC"). As applicable under such
regulations, certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted. The Company believes that the
presentation and disclosures herein are adequate to make the information not
misleading, and the financial statements reflect all elimination entries and
normal adjustments which are necessary for a fair statement of the results for
the six and three months ended February 28, 1997 and February 29, 1996.

        Operating results for interim periods are not necessarily indicative of
the results for full years. It is suggested that these condensed consolidated
financial statements be read in conjunction with the consolidated financial
statements for the fiscal year ended August 31, 1996 and the related notes
thereto included in the Company's Annual Report on Form 10-K filed with the
SEC.


                                      -1-
<PAGE>   4
                        ALLWASTE, INC. AND SUBSIDIARIES

                     CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (IN THOUSANDS)


<TABLE>
<CAPTION>
                                                                          February 28,  August 31,
                                                                             1997          1996
                                                                          ------------  ----------
                                                                          (Unaudited)    (Audited)
<S>                                                                        <C>          <C>      
                                     ASSETS
CURRENT ASSETS:
   Cash and cash equivalents                                               $     995    $   2,436
   Receivables, net                                                           75,297       75,114
   Prepaid expenses                                                            7,272        3,796
   Deferred income taxes and other assets                                      9,448       11,170
                                                                           ---------    ---------

    Total current assets                                                      93,012       92,516
                                                                           ---------    ---------

INVESTMENTS                                                                   17,034       11,030

PROPERTY AND EQUIPMENT, at cost                                              248,924      248,280
   Less -- Accumulated depreciation                                         (125,975)    (119,307)
                                                                           ---------    ---------
                                                                             122,949      128,973
                                                                           ---------    ---------

GOODWILL, net of accumulated amortization                                     86,145       88,032
NOTES RECEIVABLE                                                              12,248       13,517
OTHER ASSETS                                                                   3,190        3,119
                                                                           ---------    ---------

    Total assets                                                           $ 334,578    $ 337,187
                                                                           =========    =========

                      LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
   Accounts payable                                                        $  18,354    $  19,250
   Accrued liabilities:
    Income taxes payable                                                         457        5,383
    Other                                                                     36,607       42,892
   Current maturities of long-term and convertible subordinated debt           9,992        6,249
                                                                           ---------    ---------

    Total current liabilities                                                 65,410       73,774
                                                                           ---------    ---------

LONG-TERM DEBT, net of current maturities                                     98,066       87,971

CONVERTIBLE SUBORDINATED DEBT, net of current maturities                      32,339       33,924

DEFERRED INCOME TAXES AND OTHER LIABILITIES                                   12,463       10,572

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' EQUITY:
   Common Stock                                                                  399          398
   Additional paid-in capital                                                 56,090       55,699
   Retained earnings                                                          87,540       84,163
                                                                           ---------    ---------
                                                                             144,029      140,260
   Less:
    Treasury Stock                                                           (17,091)      (8,561)
    Unearned compensation related to outstanding restricted Common Stock        (638)        (753)
                                                                           ---------    ---------

      Total shareholders' equity                                             126,300      130,946
                                                                           ---------    ---------

      Total liabilities and shareholders' equity                           $ 334,578    $ 337,187
                                                                           =========    =========
</TABLE>


See Notes to Condensed Consolidated Financial Statements.


                                      -2-
<PAGE>   5
                        ALLWASTE, INC. AND SUBSIDIARIES

                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                  (UNAUDITED)
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)


<TABLE>
<CAPTION>
                                                      For the Six Months Ended  For the Three Months Ended
                                                      ------------------------- --------------------------
                                                      February 28, February 29, February 28, February 29,
                                                         1997         1996         1997         1996
                                                      ------------ ------------ ------------ -------------
<S>                                                    <C>          <C>          <C>          <C>      
REVENUES                                               $ 190,018    $ 188,076    $  89,111    $  88,278

COST OF OPERATIONS                                       142,454      141,664       68,003       69,451
                                                       ---------    ---------    ---------    ---------

     Gross profit                                         47,564       46,412       21,108       18,827

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES              37,006       40,341       17,869       19,552

INTEREST EXPENSE                                          (4,760)      (4,821)      (2,425)      (2,410)
INTEREST INCOME                                              480          493          220          234
OTHER INCOME (EXPENSE), net                                  843          728          839          528
                                                       ---------    ---------    ---------    ---------

     Income (loss) from continuing operations before
       income tax provision and minority interest          7,121        2,471        1,873       (2,373)

INCOME TAX BENEFIT (PROVISION)                            (3,240)      (1,137)        (826)         994
MINORITY INTEREST, net of taxes                             (101)          24         (122)          22
                                                       ---------    ---------    ---------    ---------

     Income (loss) from continuing operations              3,780        1,358          925       (1,357)

     Discontinued Operations
       Gain on sale of glass recycling operations,
         net of applicable income taxes                       --        3,764           --           --
                                                       ---------    ---------    ---------    ---------

         Net income (loss)                             $   3,780    $   5,122    $     925    $  (1,357)
                                                       =========    =========    =========    =========

NET INCOME (LOSS) PER COMMON SHARE:
     Continuing operations                             $     .10    $     .03    $     .03    $    (.03)
     Discontinued operations                                  --          .10           --           --
                                                       ---------    ---------    ---------    ---------
         Net income (loss) per common share            $     .10    $     .13    $     .03    $    (.03)
                                                       =========    =========    =========    =========

WEIGHTED AVERAGE NUMBER OF COMMON
       SHARES OUTSTANDING                                 37,049       39,361       36,613       39,237
                                                       =========    =========    =========    =========
</TABLE>


See Notes to Condensed Consolidated Financial Statements.


                                      -3-
<PAGE>   6

                        ALLWASTE, INC. AND SUBSIDIARIES

                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                           (UNAUDITED, IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                           For the Six Months Ended
                                                                           ------------------------
                                                                           February 28, February 29,
                                                                               1997        1996
                                                                           ------------ ------------
<S>                                                                          <C>         <C>     
CASH FLOWS FROM OPERATING ACTIVITIES:

    Net Income                                                               $  3,780    $  5,122

    Reconciliation of net income to cash provided by operating activities:
      Depreciation                                                             13,886      14,221
      Amortization                                                              1,482       1,440
      Gain on sale of glass recycling operations                                   --      (3,764)
      (Gain) loss on sale of property and equipment                               367        (556)
      Amortization of unearned compensation - restricted stock                    115          48
      Change in assets and liabilities, net of effect of acquisitions
        accounted for as purchases:
           Receivables, net                                                      (213)      3,741
           Prepaid expenses and other current assets                           (1,754)       (649)
           Notes receivable and other assets                                      950         116
           Accounts payable and accrued liabilities                           (11,574)    (14,558)
           Deferred income taxes and other liabilities                          1,856        (918)
                                                                             --------    --------

        Cash provided by operating activities                                   8,895       4,243
                                                                             --------    --------

CASH FLOWS FROM INVESTING ACTIVITIES:

    Proceeds from sale of glass recycling operations                               --      41,500
    Additions to property and equipment                                       (10,426)    (19,462)
    Purchase of long-term investment                                           (6,004)     (2,619)
    Proceeds from sale of property and equipment                                2,840       1,714
    Payments for acquisitions accounted for as purchases, net of
        cash acquired                                                              --      (1,034)
                                                                             --------    --------

        Cash provided by (used in) investing activities                       (13,590)     20,099
                                                                             --------    --------

CASH FLOWS FROM FINANCING ACTIVITIES:

    Proceeds from issuances of Common Stock                                       438         424
    Net increase (decrease) in revolving credit facility                       10,220     (22,185)
    Net increase (decrease) in other long term borrowings                       2,085        (930)
    Purchases of convertible subordinated debentures                              (17)         --
    Increases in Treasury Stock                                                (9,068)     (2,800)
                                                                             --------    --------

        Cash provided by (used in) financing activities                         3,658     (25,491)
                                                                             --------    --------

EFFECT OF EXCHANGE RATE CHANGES                                                  (404)       (255)
                                                                             --------    --------

DECREASE IN CASH AND CASH EQUIVALENTS                                          (1,441)     (1,404)
CASH AND CASH EQUIVALENTS, beginning of period                                  2,436       4,029
                                                                             --------    --------

CASH AND CASH EQUIVALENTS, end of period                                     $    995    $  2,625
                                                                             ========    ========
</TABLE>


See Notes to Condensed Consolidated Financial Statements.


                                      -4-
<PAGE>   7
                        ALLWASTE, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (UNAUDITED)

(1)    Significant Accounting Policies --

       The condensed consolidated financial statements include the accounts of
Allwaste, Inc. and its subsidiaries (the "Company"). There have been no
significant changes in the accounting policies of the Company during the
periods presented. For a description of these policies, see Note 1 of Notes to
Consolidated Financial Statements in the Company's Annual Report on Form 10-K
for the fiscal year ended August 31, 1996. Certain prior period amounts have
been reclassified to conform with the current period presentation.

(2)    Acquisitions and Investments --

       On January 31, 1997, the Company exercised warrants to purchase
additional shares of the Safe Seal Company, Inc. ("Safe Seal"). Consideration
for this increase in the investment from 10% to 36.5% included three
subordinated notes totaling $3.3 million and cash of $0.6 million. The Company
now owns 2,252,079 shares of common stock and 20,000 shares of redeemable Class
A preferred stock of Safe Seal for a total investment of $6.6 million. The
Company is in the process of determining the excess of its investment over the
fair market value of the underlying assets. Neither the excess of investment
over the fair market value of assets nor the corresponding amortization will be
material to the consolidated financial statements. The Company appropriately
changed its method of accounting for the investment from the cost method to the
equity method. The effect of this change on the Company's prior periods is
immaterial and accordingly has not been restated. The Company also guarantees
$14.8 million of indebtedness for Safe Seal and its affiliates.

(3)    Income Taxes --

       With respect to continuing operations, income tax provisions for interim
periods are estimated based on projections of the annual effective tax rates.
Certain assumptions have been made in this regard in estimating the effective
tax rate for fiscal 1997, the outcome of which may not be resolved until the
end of the fiscal year. The effective tax rate of 46% for the six months ended
February 28, 1997 reflects the estimated U.S. federal and state income taxes
and foreign taxes on the earnings of the Company's foreign subsidiaries.

       Deferred tax assets and liabilities are determined based on the
estimated future tax effects of differences between the financial statement and
tax bases of assets and liabilities. On the accompanying Condensed Consolidated
Balance Sheets, deferred tax assets and liabilities are netted within each tax
jurisdiction. The following table sets forth the gross deferred tax assets
(liabilities) recorded (in thousands):

<TABLE>
<CAPTION>
                                               February 28,  August 31,
                                                   1997        1996
                                               ------------  ----------
<S>                                              <C>         <C>     
          Current deferred tax assets            $  7,894    $  8,681
          Non-current deferred tax assets           3,448       3,383
          Valuation allowance                      (1,230)     (1,230)
                                                 --------    --------
               Total deferred tax assets           10,112      10,834
                                                 --------    --------

          Non-current deferred tax liabilities   $(15,113)   $(13,238)
                                                 --------    --------

          Net deferred tax liabilities           $ (5,001)   $ (2,404)
                                                 ========    ======== 
</TABLE>


                                      -5-
<PAGE>   8
       The components of the net deferred tax assets (liabilities) are as 
follows (in thousands):

<TABLE>
<CAPTION>
                                          February 28,  August 31,
                                              1997        1996
                                          ------------  ----------
<S>                                         <C>         <C>      
          Depreciation and amortization     $(17,256)   $(15,753)
          Financial reserves and accruals
            not yet deductible                12,255      13,349
                                            --------    --------

             Total                          $ (5,001)   $ (2,404)
                                            ========    ========
</TABLE>

4)     Net Income (Loss) Per Common Share --

       Net income (loss) per common share has been computed based on the
weighted average number of shares of Common Stock and Common Stock equivalents
outstanding. The calculation of fully-diluted net income per common share is
not materially different from the primary calculation. The following table
presents the primary weighted average number of shares outstanding for the six
and three months ended February 28, 1997 and February 29, 1996 (in thousands).

<TABLE>
<CAPTION>
                                              For the Six Months Ended  For the Three Months Ended
                                              ------------------------- --------------------------
                                              February 28, February 29, February 28, February 29,
                                                 1997         1996         1997         1996
                                              ------------ ------------ ------------ -------------
<S>                                               <C>          <C>          <C>          <C>   
Common shares outstanding, beginning
    of fiscal period                              39,799       39,609       39,799       39,609

    Weighted average number of common shares
       outstanding:

       Stock options, treasury stock method          219           95          370           --

       Purchased companies                            --           24           --           25

       Exercise of stock options                      12           78           22          117

       Treasury stock and other, net              (2,981)        (445)      (3,578)        (514)
                                                  ------       ------       ------       ------

    Total weighted average common shares
       outstanding                                37,049       39,361       36,613       39,237
                                                  ======       ======       ======       ======
</TABLE>

(5)    Long-Term Debt --

       The Company's long-term debt consists of a revolving credit agreement
with a group of banks. The agreement, as last amended in January 1997, provides
for an unsecured $160 million revolving line of credit to the Company through
January 31, 1999, at which time any outstanding borrowings convert to a term
loan due in equal quarterly installments through January 31, 2003. At April 9,
1997, after utilizing $32.4 million of the credit facility for letters of
credit to secure certain insurance obligations and performance bonds, available
borrowing capacity under this agreement was $30.3 million. Management believes
that the Company is in compliance with all applicable covenants under the
revolving credit agreement as of February 28, 1997. Borrowing availability is
subject to the Company maintaining certain minimum financial ratios as set
forth in the agreement.

(6)    Incentive Plans --

       On October 26, 1995, the Company's Board of Directors adopted a limited
single-purpose incentive plan for certain key employees. Pursuant to this plan,
each participating key employee that purchased shares of the Company's Common
Stock, based on a designated percentage of his annual salary, was granted a
number of shares of restricted Common Stock equal to two times the number of
the shares purchased and an option to purchase a number of shares of Common
Stock equal to four times the number of shares purchased. Shares of Common
Stock issued under this incentive plan were treasury shares. At February 28,
1997, 206,826 shares of restricted Common Stock and options to purchase 423,464
shares of Common Stock had been granted in 


                                      -6-
<PAGE>   9
connection with this incentive plan. The Company does not contemplate that any
additional restricted shares will be issued under the incentive plan or that
any options to purchase shares of Common Stock will be granted in connection
with the plan.

       The value of restricted shares awarded under this incentive plan through
February 28, 1997 was $0.9 million. These amounts were recorded as unearned
compensation related to outstanding restricted stock and are shown as a
separate component of Shareholders' Equity. Unearned compensation is being
amortized to expense over a four-year vesting period and amounted to $0.2
million and $0.1 million for the six and three months ended February 28, 1997,
respectively.

       Effective September 1, 1996, in connection with the implementation of
the Economic Value Added ("EVA(R)") integrated management system, the
Compensation Committee of the Board of Directors approved the adoption of the
Allwaste EVA Incentive Compensation Plan (the "EVA Plan"). The EVA Plan governs
incentive compensation available to the Company's executive officers and other
key employees. Under the EVA Plan, eligible participants are entitled to
receive incentive payments based on their meeting or exceeding certain
thresholds as established by the Compensation Committee in the case of
executive management and by executive management in the case of other
participants. A portion of each fiscal years awards (generally, one-third)
carry forward to the following year and are added to incentive awards earned
for that fiscal year.

(7)    Discontinued Operations --

       In September 1995, the Company sold its glass recycling operations to
Strategic Holdings, Inc. ("SHI"), a company formed by Equus II, Incorporated
("Equus"). In October 1996, the Company and Equus finalized an agreement with
respect to certain post-closing issues which were unresolved on the date of the
sales transaction. The total consideration, as adjusted, was $56.1 million,
including $41.5 million in cash, $8.0 million of redeemable Series A preferred
stock redeemable beginning in 2002, and a $6.6 million subordinated note
receivable due in 2002. The redeemable Series A preferred stock dividend is
$.065 per share for the period prior to September 1, 1996 and $.06 per share
thereafter. The subordinated note receivable interest rate is 11% for the
period prior to September 1, 1996 and 10.5% thereafter. The agreement also
provided that all dividends and interest due prior to August 31, 1997 will not
be paid when due, but "paid in kind" in the form of two 8.036% subordinated
notes issued September 30, 1996 and June 30, 1997 in the amounts of $1.3
million and $0.9 million, respectively. Principal on these two notes will be
due on November 30, 2002. At February 28, 1997, the Company had accrued $0.8
million for dividends and $1.1 million for interest which is reflected in other
income (expense) in the accompanying Consolidated Statements of Operations. The
Company also received warrants to purchase shares of SHI common stock,
providing the Company the right to own up to approximately 33% of the
outstanding stock of SHI. The Company may receive additional consideration in
the form of an adjustment to the purchase price in the event that Equus'
internal rate of return, as defined, exceeds certain predetermined targets. The
amount of such additional consideration, if any, is not presently determinable.
The Company recorded a gain on the sale of its glass recycling operations of
$3.8 million, net of applicable income taxes of $1.6 million, in the first
quarter of fiscal 1996.

(8)    Subsequent Events --

       On March 6, 1997, the Company announced that a definitive agreement had
been reached to merge with Philip Environmental Inc. ("Philip"). The Agreement
is subject to stockholder approval, regulatory approvals and certain other
conditions. Upon receiving such approvals and the satisfaction of such
conditions, the Company will become an indirect wholly-owned subsidiary of
Philip. Under the terms of the agreement, each share of Allwaste Common Stock
will be exchanged for 0.611 shares of Philip common stock.

       Subsequent to February 28, 1997, the Company has issued 79,904 shares of
its Common Stock and 959,277 shares of treasury stock in exchange for $7.6
million of convertible subordinated notes which were issued as partial
consideration to former owners of certain acquired businesses. In addition, the
Company has issued 267,538 shares of its Common Stock on exercise of certain
stock options.


                                      -7-
<PAGE>   10
                        ALLWASTE, INC. AND SUBSIDIARIES
             PART I, ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

        For supplemental information, it is suggested that "Management's
Discussion and Analysis of Financial Condition and Results of Operations" be
read in conjunction with the corresponding section included in the Company's
Annual Report on Form 10-K for the fiscal year ended August 31, 1996.
Additionally, certain prior period amounts have been reclassified to conform
with the current period presentation.


RESULTS OF OPERATIONS

      Allwaste, Inc. provides integrated industrial and environmental services
and acts as an outsourcing provider of on-site facility processes and services,
primarily in the United States, Canada, Mexico, and Austria. With the
completion of the sale of the Company's glass recycling operations in September
1995, the Company combined the prior industry segments of environmental
services and container services into a single industrial services operation.

      Net income (loss) from continuing operations for the six and three months
ended February 28, 1997 was $3.8 million and $0.9 million, respectively,
compared with $1.4 million and ($1.4) million, respectively, for the same
periods in fiscal 1996. Net income (loss) per common share from continuing
operations was $.10 and $.03 for the six and three month periods ended February
28, 1997, respectively, and $.03 and ($.03), respectively, for the same prior
year periods.

      The Company's revenues for the six and three months ended February 28,
1997 increased to $190.0 million and $89.1 million, respectively, compared with
$188.1 million and $88.3 million, respectively, in the six and three months
ended February 29, 1996. The increases of 1% were predominately internally
generated. The Company's revenue growth was 4% for the six and three months
ended February 28, 1997, excluding certain less profitable scaffolding and
transportation services which were sold or purposefully downsized. The Company's
excavation/remediation activities benefited from a continued increase in pulp
and paper and quarry work through the second quarter of fiscal 1997. Increased
demand for services provided to the Canadian and United States auto industries,
increased demand for container services and continuing increased demand for the
Company's services by the offshore oil and gas exploration industry in the Gulf
of Mexico area also contributed to this growth. As part of its AllQuest program,
the Company has focused on developing new outsourcing and co-sourcing
opportunities which created revenue increases in the six and three month periods
ended February 28, 1997 of $2.4 million and $1.0 million, respectively. These
revenue increases were predominately offset by decreases in revenue generated by
the Company's operations that service the Pacific and Gulf coast refining and
petrochemical industries, which continue to be affected by indefinitely
postponed significant project work.

      Gross operating profit increased to $47.6 million and $21.1 million,
respectively, in the six and three months ended February 28, 1997, from $46.4
million and $18.8 million, respectively, in the six and three months ended
February 29, 1996. Gross operating profit, as a percentage of revenues,
remained constant at 25% for the first six months of fiscal 1997 compared with
the same prior year period and increased 3% to 24% in the second quarter of
fiscal 1997 compared to the second quarter of fiscal 1996. The Company
experienced increases in gross profit in a majority of its industry sectors.
This improvement was generally attributable to the implementation of cost
reduction initiatives adopted in the first half of fiscal 1996. This plan
focused on improvement of profitability, the creation of shareholder value and
enhanced efforts to provide more cost-effective, value-added service to the
Company's large industrial customer base. The Company's container services line
particularly benefited from its cost reduction initiatives implemented in the
second quarter of fiscal 1996. Gross operating profit, as a percentage of
revenues, was also improved by the contraction and/or divestiture of lower
margin businesses subsequent to the second quarter of fiscal 1996.

      Selling, general and administrative ("SG&A") expenses, as a percentage of
revenues, decreased 2% to 19% in the six months ended and 2% to 20% in the three
months ended February 28, 1997. SG&A expenditures decreased by $3.3 million and
$1.7 million for the six and three months ended February 28, 1997, respectively,
compared with the same periods in fiscal 1996. A significant portion of the
improvement was attributable to the cost reduction initiatives adopted in the
first half of fiscal 1996. The Company incurred severance costs related to this
plan of $1.1 million in the first half of 1996. Excluding the effect of these 


                                      -8-
<PAGE>   11

severance costs, SG&A expenditures decreased by $2.1 million in the first half
of fiscal 1997 and by $1.1 million in the second quarter of fiscal 1997
compared with the same prior year periods.

      Interest expense remained constant at $4.8 million and $2.4 million in
the six and three months ended February 28, 1997, respectively, compared with
the same periods in fiscal 1996.

      Interest income and other income (expense) net was $1.3 million and $1.1
million in the six and three months ended February 28, 1997, respectively,
compared with $1.2 million and $0.8 million in the six and three months ended
February 29, 1996, respectively. The income was primarily related to interest
and dividends of $0.4 million earned on the subordinated note receivable and
the preferred stock acquired in the sale of the Company's glass recycling
operations and the favorable settlement of a lawsuit relating to a previously
divested business offset by losses recognized on sales of property and
equipment.

      The Company's effective income tax rates for the six months ended
February 28, 1997 and February 29, 1996 were 46%. The effective tax rate was
higher than the statutory federal rate of 35% primarily due to the effect of
the nondeductibility of a portion of meal and entertainment expenses, the
nondeductible amortization of a portion of the Company's goodwill, state income
taxes and Canadian earnings which are taxed at a higher statutory rate.

LIQUIDITY AND CAPITAL RESOURCES

      At the end of the second quarter of fiscal 1996, the Company embarked on a
program to more strategically manage its capital resources. The program
culminated in the implementation of the Economic Value Added ("EVA(R)")
integrated management system in September 1996. The Company's EVA management
system recognizes enhanced capital management through a cost of capital charge
in its measurement of operating results.

      Net cash provided by the Company's operating activities was $8.9 million
during the six months ended February 28, 1997, compared with $4.2 million for
the same prior year period. Overall, the improvement in cash provided by
operating activities was due to the increase in net income from continuing
operations and from a continuing focus on working capital management. For the
six months ended February 28, 1997, the Company had net income of $3.8 million,
which included $15.4 million in depreciation and amortization. For the same
period in fiscal 1996, net income was $5.1 million, which included $15.7
million in depreciation and amortization and a gain on the sale of the
Company's glass recycling operation of $3.8 million in the first quarter of
fiscal 1996.

      Net working capital was $27.6 million at February 28, 1997 compared with
$28.6 million at February 29, 1996. The Company's current ratio was 1.4 to 1
at February 28, 1997 and February 29, 1996.

      The Company used cash of $13.6 million in investing activities in the six
months ended February 28, 1997, compared with cash of $20.1 million provided in
the six months ended February 29, 1996. This use of cash was primarily
attributable to capital expenditures of $10.4 million compared with $19.5
million of capital expenditures in the same prior year period. The Company was
able to reduce its capital spending in the first half of fiscal 1997 primarily
due to increased monitoring of equipment utilization, transfers of
underutilized owned equipment from lower volume, lower margin locations to
higher volume, higher margin locations and the use of short-term equipment
rentals. Expenditures for the remainder of fiscal 1997 are anticipated to be
approximately $10.5 million. The Company's fiscal 1997 capital expenditure
program will be funded from cash flows from operating activities.

      The Company paid $2.6 million in the first quarter of 1996 to acquire a
10% interest in The Safe Seal Company, Inc. ("Safe Seal") which specializes in
valve repair and leak sealing. The Company increased its investment by an
additional $3.9 million in the second quarter of fiscal 1997, which consisted of
$0.6 million of cash and $3.3 million of subordinated notes, which increased its
interest in Safe Seal to 36.5%. The Company paid $1.7 million in the first
quarter of fiscal 1997 for an additional cash investment in the Company's
previously owned glass recycling operation.

      In the six months ended February 28, 1997, the Company provided cash from
financing activities of $3.7 million, compared with cash used of $25.5 million
in the same prior year period. The Company's total short-term and long-term
debt increased by $12.3 million to $140.4 million at February 28, 1997 from
$128.1 million at August 31, 1996. Included in the aforementioned long-term
debt, the Company's revolving credit facility increased by $10.2 million to
$98.0 million at February 28, 1997 from $87.8 million at August 31, 1996.
Significant factors contributing to these 


                                      -9-
<PAGE>   12
increases included a large tax payment attributable to the sale in fiscal 1995
of the Company's glass recycling division, $7.7 million used to repurchase
shares of the Company's Common Stock, the issuance of $3.3 million in
subordinated notes and $0.6 million in cash used to increase the Company's 
interest in Safe Seal.

      In July 1995, the Board of Directors authorized the Company to
repurchase, over a two year period, up to 5,000,000 shares of the Company's
Common Stock, either on the open market or in privately negotiated
transactions. During the six months ended February 28, 1997, the Company spent
$7.7 million to repurchase 1,649,500 shares of its Common Stock at an average
cost of $4.67 per share. Subsequent to February 28, 1997, the Company has
repurchased no additional shares of its Common Stock. As of February 28, 1997,
3,725,400 shares of Common Stock had been repurchased under the plan at an
average cost of $4.54 per share.

      The Company's long-term debt consists of a revolving credit agreement
with a group of banks. The agreement, as last amended in January 1997, provides
for an unsecured $160 million revolving line of credit to the Company through
January 31, 1999, at which time any outstanding borrowings convert to a term
loan due in equal quarterly installments through January 31, 2003. At April 9,
1997, after utilizing $32.3 million of the credit facility for letters of
credit to secure certain insurance obligations and performance bonds, available
borrowing capacity under this agreement was $30.3 million. Borrowing
availability is subject to the Company maintaining certain minimum financial
ratios as set forth in the agreement. The Company believes that its cash flow
provided by operating activities and available funds under its revolving credit
agreement are adequate to fund its financing needs.

     Management believes it has adequate capital resources available from
internally generated funds and from the Company's revolving credit agreement to
meet anticipated working capital needs, planned capital expenditures and to take
advantage of new opportunities requiring capital.


ENVIRONMENTAL PROCEEDINGS

      In November 1996, the West Virginia Division of Environmental Protection
(the "West Virginia DEP") issued a draft consent order against one of the
Company's subsidiaries, which order seeks to impose an aggregate of
approximately $229,000 in fines against the Company relating to a
transportation-related spill in West Virginia in November 1995. The Company
voluntarily remediated this spill in December 1995. The draft consent order
alleges that in remediating the spill, the Company did not comply with certain
technical West Virginia DEP remediation regulations relating to recordkeeping
and generator requirements. The Company believes that the West Virginia DEP
remediation regulations cited by the West Virginia DEP as the basis of this
draft consent order are not relevant in the context of an emergency spill
response. Therefore, the Company believes that it may be able to successfully
negotiate the imposition by the West Virginia DEP of significantly lower
penalties in the final consent order. The Company is actively negotiating the
draft consent order with the West Virginia DEP and does not believe that the
final consent order will have a material adverse effect on the Company's
results of operations or financial position.


FLUCTUATIONS IN RESULTS OF OPERATIONS

      Certain customers have varying levels of demand for the Company's
services based on the time of the year. Most of the Company's service lines
tend to be slowest in the winter (the Company's second fiscal quarter) and
summer (the Company's fourth fiscal quarter) months. Services provided to
electric utility customers are typically performed in the fall and spring when
demand for electricity is reduced and maintenance work can be performed more
efficiently. Likewise, services provided to refining and petrochemical
customers tend to be greater in the fall and spring when most planned
turnarounds at customer plants occur. In addition, the Company's acquisition
program can affect not only future results and rates of growth but also
previously reported results because of restatements if acquisitions are
accounted for as poolings-of-interests.

      The impact of inflation on the Company has been minimal.


                                     -10-
<PAGE>   13

OUTLOOK FOR 1997

       On March 6, 1997, the Company announced that a definitive agreement had
been reached to merge with Philip Environmental Inc. ("Philip"). The Agreement
is subject to stockholder approval, regulatory approvals and certain other
conditions. Upon receiving such approvals and the satisfaction of such
conditions, the Company will become an indirect wholly-owned subsidiary of
Philip. Under the terms of the agreement, each share of Allwaste Common Stock
will be exchanged for 0.611 shares of Philip common stock.

      The Company has clearly defined the industrial customer as the focus of
its business strategy. The Company's fiscal 1996 sale of its glass recycling
operations has allowed it to narrow its focus on providing services to the
industrial customer and provide additional capital for expansion of this core
business and developing opportunities independently or through partnering
arrangements in the areas of water and wastewater management, energy services,
contract labor services and, through its investment in The Safe Seal Company,
Inc., leak sealing and valve restoration services. The Company will continue to
evaluate its complement of services offered and allocate capital accordingly.

      The Company has historically focused on achieving growth through
acquisitions; however, in recent years, the Company has placed added emphasis
on increased internal growth. Although the Company will continue to focus on
internal growth, it does intend to evaluate acquisitions that fit its strategic
goals. The Company has focused on realizing increased internal growth primarily
by developing new outsourcing and co-sourcing opportunities with its customers
and expanding the number of service lines offered to customers by each of its
operating locations, providing solution-oriented and preventive services that
focus on improving customer efficiency and profitability, transferring
technology and knowledge among the Company's various operating locations,
implementing national marketing programs that target major industries served by
the Company, introducing services in new geographic areas and developing
services that address environmental concerns associated with new products. The
Company's ALLIES(R) program stresses collaboration between the Company and its
customers by focusing on creating flexible and innovative solutions to a
customer's problems and emphasizing the Company's services as an
economically-efficient outsourcing alternative that can maximize a customer's
competitive role in the emerging global market.

      The Company is also focusing on cost control and gross margin expansion
through fiscal 1997. The Company intends to implement selected price increases
when market conditions permit and as a by-product of value-added selling
efforts. The Company anticipates savings resulting from the cost reduction in
fiscal 1996 and ongoing cost-reduction initiatives to positively affect its
results of operations in fiscal 1997.

      A significant amount of the Company's revenues from its services are
generated on an as needed basis or from irregularly scheduled customer
turnarounds, outages and shutdowns. Although the Company may be chosen as the
vendor of choice, turnarounds, outages and shutdowns may, at the election of
the customers, be deferred or canceled without penalty. The Company is also
affected by business cycles experienced by its industrial customer bases and by
changes in environmental laws and regulations or by changes in the
interpretation or enforcement of such laws and regulations. The Company's
customers have a significant capacity in the short-term to defer industrial
cleaning, maintenance and disposal services. Deferrals can occur either due to
a reduction in maintenance or capital funds, customer budget restraints or,
conversely, increased demand for a customer's products that make it impractical
to perform cleaning and maintenance on anticipated schedules. These factors
make it difficult to predict, from quarter to quarter, the demand for the
Company's services.


NEW FINANCIAL ACCOUNTING STANDARDS

      In March 1995, the Financial Accounting Standards Board issued SFAS No.
121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed Of" which is effective for years beginning after December
15, 1995 (fiscal 1997 for the Company). This statement established criteria for
recognizing, measuring and disclosing impairments of long-lived assets,
identifiable intangibles and goodwill. The Company has adopted SFAS No. 121
effective in fiscal year 1997. Management does not expect that the adoption
will have a material effect on the Company's financial position or results of
operations.

      In October 1995, the Financial Accounting Standards Board issued SFAS No.
123, "Accounting for Stock-Based Compensation" which is effective for years
beginning after December 15, 1995 (fiscal 1997 for the Company). This statement
allows entities to choose between a new fair value based method of accounting
for employee stock options or 


                                     -11-
<PAGE>   14

similar equity instruments and the current intrinsic value-based method of
accounting prescribed by Accounting Principles Board Opinion No. 25. Entities
electing to remain with the accounting in APB Opinion No. 25 must make pro
forma disclosures of net income and earnings per share as if the fair value
method of accounting had been applied. The Company expects to continue
accounting for employee stock options and similar equity instruments in
accordance with APB Opinion No. 25. The pro forma effect for fiscal 1996 has
not yet been determined.

      In February 1997, the Financial Standards Accounting Board issued SFAS
No. 128, "Earnings per Share" which is effective for years ending after
December 15, 1997 (fiscal 1998 for the Company). This statement specifies the
computation, presentation, and disclosure requirements for earnings per share
("EPS") for entities with publicly held common stock or potential common stock
in order to simplify the computation of EPS and to make the U.S. standards
comparable to international EPS standards. The Company will adopt SFAS No. 128
in the first quarter of fiscal 1998. Upon adoption, all prior period earnings
per share data presented must be restated to conform with the new statement.
Management does not expect that the adoption will have a material effect on the
Company's EPS calculation.


DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS

      Certain sections of this Report, specifically the section captioned
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," may include "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995 relating to management's
current expectations regarding the future results of operations or financial
condition of the Company. These forward-looking statements may be identified by
the use of forward-looking terminology such as "may," "will," "believe,"
"anticipate," "should," or comparable terms or the negative thereof. These
statements are based solely on data currently available, which data is subject
to change as a result of changes in conditions and should not therefore be
viewed as assurance regarding the Company's future performance. These
statements involve risks and uncertainties that could cause the actual results
to differ materially from those described in the statements. In addition to the
risks and uncertainties specifically described in the section captioned
"Management's Discussion and Analysis of Financial Condition and Results of
Operations - Outlook for 1997," these forward-looking statements may also be
affected by the following risks and uncertainties: the effect of economic and
market conditions; the impact of costs, insurance recoveries and governmental,
judicial and other third party interpretation and determination in connection
with legal and environmental proceedings; and the impact of current, pending or
future legislation or regulations (collectively, the "Cautionary Statements").
Although the Company believes that the expectations reflected in any
forward-looking statements contained herein are reasonable, it can give no
assurance that such expectations will prove to have been correct. All
subsequent written and oral forward looking statements attributable to the
Company or persons acting on its behalf are expressly qualified in their
entirety by the Cautionary Statements contained herein.


                                     -12-
<PAGE>   15
                        ALLWASTE, INC. AND SUBSIDIARIES
                                    PART II

ITEM 2 - CHANGES IN SECURITIES

      The Company did not sell any unregistered securities during the second
quarter of fiscal 1997.

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

      On January 17, 1997, the Company held its annual meeting of stockholders.
At the meeting, the stockholders voted on the following matters:

      To elect three Class I directors of the Company to hold office until the
third succeeding annual meeting of stockholders after their election (the 2000
Annual Meeting) or until their successors have been duly elected and qualified.

      The proposal received the affirmative vote required for approval. The
number of votes cast for, against and withheld, as well as the number of
abstentions and broker non-votes, as to the proposal were as follows:

<TABLE>
<CAPTION>
                              Affirmative   Negative                  Votes      Broker
Proposal                         Votes       Votes     Abstentions   Withheld   Non-Votes
--------                      -----------   --------   -----------   --------   ---------
1.  Election of Directors

<S>                            <C>            <C>          <C>        <C>         <C>   
       Michael A. Baker        29,688,353     N/A          N/A        724,237     None

       R. L. Nelson, Jr.       29,642,303     N/A          N/A        770,287     None

       Frank A. Rossi          29,678,353     N/A          N/A        737,237     None
</TABLE>

      In addition to the three directors listed in Proposal 1 who were elected
at the 1997 Annual Meeting, the following directors' terms of office continued
after the meeting and will continue through the annual meeting of stockholders
as indicated:

<TABLE>
<CAPTION>
                                                     Term through
      Name                                        Annual Meeting of
      ----                                        -----------------
<S>                                                     <C> 
      Robert L. Knauss                                  1998

      T. Michael Young                                  1998

      Robert M. Chiste                                  1998

      Thomas J. Tierney                                 1999

      William E. Haynes                                 1999

      John U. Clarke                                    1999
</TABLE>


                                     -13-
<PAGE>   16

ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K


(a)   Exhibits.

      Exhibit
        No.    Description
        ---    -----------

       3.1  -- Amended and Restated Certificate of Incorporation of
               Allwaste, Inc. ("Allwaste"), effective February 22, 1990.
               (Exhibit 3.1 to the Allwaste Quarterly Report on Form 10-Q (File
               No. 0-15217) for the fiscal quarter ended February 28, 1990 is
               hereby incorporated by reference.)

       3.2  -- Corrected Bylaws of Allwaste (Exhibit 3.2 to the Allwaste
               Annual Report on Form 10-K (File No. 1-11008) for the fiscal
               year ended August 31, 1992, filed November 27, 1992 (the "1992
               10-K"), is hereby incorporated by reference.)

       3.3  -- Certificate of Designation of Series One Junior Participating
               Preferred Stock of Allwaste, Inc., effective November 19, 1996.
               (Exhibit 3.3 to the Allwaste Annual Report on Form 10-K for the
               fiscal year ended August 31, 1996 (the "1996 10-K") is hereby
               incorporated by reference.)

       4.1  -- Specimen Common Stock certificate (Exhibit 4.1 to the
               Allwaste Quarterly Report on Form 10-Q (File No. 1-11016) for
               the fiscal quarter ended February 29, 1996 (the "February 10-Q")
               is hereby incorporated by reference.)

       4.2  -- Specimen debenture certificate (Exhibit 4.2 to the 1992 10-K
               is hereby incorporated by reference.)

       4.3  -- Form of Indenture between Allwaste and Texas Commerce Trust
               Company of New York dated June 1, 1989, relating to certain
               debentures of Allwaste. (Exhibit 4.1 to the Allwaste Quarterly
               Report on Form 10-Q (File No. 0-15217) for the fiscal quarter
               ended May 31, 1989 is hereby incorporated by reference.)

       4.4  -- Stockholder Rights Agreement dated August 5, 1996, between
               Allwaste and American Stock Transfer & Trust Company as Rights
               Agent. (Exhibit 1 to the Allwaste, Inc. Registration Statement
               on Form 8-A, filed November 14, 1996, is hereby incorporated by
               reference.)

       10.1 -- Employment Agreement dated October 23, 1986, between R.L.
               Nelson, Jr. and Allwaste. (Exhibit 10.1 to the Allwaste Annual
               Report on Form 10-K (File No. 1-11008) for the fiscal year ended
               August 31, 1994, filed November 29, 1994 (the "1994 10-K"), is
               hereby incorporated by reference.)

       10.2 -- Employment Agreement dated October 17, 1994, between Robert
               M. Chiste and Allwaste. (Exhibit 10.6 to the 1994 10-K is hereby
               incorporated by reference.)

       10.3 -- Allwaste Amended and Restated 1989 Replacement Non-Qualified
               Stock Option Plan. (Exhibit A to the Allwaste proxy statement
               relating to its 1995 annual meeting of stockholders, filed
               December 20, 1994, is hereby incorporated by reference.)

       10.4 -- Allwaste, Inc. Target 2000: One, Two, Four Plan. (Exhibit
               10.4 to the Allwaste Quarterly Report on Form 10-Q (File No.
               1-11008) for the fiscal quarter ended February 29, 1996 (the
               "February 10-Q") is hereby incorporated by reference.)

       10.5 -- Allwaste Employee Retirement Plan. (Exhibit 4.3 to the
               Post-Effective Amendment No. 1 to Registration Statement on Form
               S-8 (File No. 33-37684), filed August 7, 1995, is hereby
               incorporated by reference.)


                                     -14-
<PAGE>   17

       10.6 -- Credit Agreement dated as of November 30, 1993, as amended,
               by and among Allwaste, the financial institutions signatory
               thereto, and Texas Commerce Bank National Association, a
               national banking association, as Agent. (Exhibit 10.10 to the
               1994 10-K is hereby incorporated by reference.)

       10.7 -- Agreement and First Amendment to Credit Agreement dated
               January 21, 1994, by and among Allwaste, the financial
               institutions signatory thereto, and Texas Commerce Bank National
               Association, a national banking association, as Agent. (Exhibit
               10.7 to the February 10-Q is hereby incorporated by reference.)

       10.8 -- Agreement and Second Amendment to Credit Agreement dated
               March 20, 1994, by and among Allwaste, the financial
               institutions signatory thereto, and Texas Commerce Bank National
               Association, a national banking association, as Agent. (Exhibit
               10.8 to the February 10-Q is hereby incorporated by reference.)

       10.9 -- Agreement and Third Amendment to Credit Agreement dated May
               31, 1994, by and among Allwaste, the financial institutions
               signatory thereto, and Texas Commerce Bank National Association,
               a national banking association, as Agent. (Exhibit 10.9 to the
               February 10-Q is hereby incorporated by reference.)

      10.10 -- Agreement and Fourth Amendment to Credit Agreement dated
               October 18, 1994, by and among Allwaste, the financial
               institutions signatory thereto, and Texas Commerce Bank National
               Association, a national banking association, as Agent. (Exhibit
               10.10 to the February 10-Q is hereby incorporated by reference.)

      10.11 -- Agreement and Fifth Amendment to Credit Agreement dated
               August 31, 1995, by and among Allwaste, the financial
               institutions signatory thereto, and Texas Commerce Bank National
               Association, a national banking association, as Agent. (Exhibit
               10.11 to the February 10-Q is hereby incorporated by reference.)

      10.12 -- First Amendment to Employment Agreement dated as of October
               26, 1995, between Robert M. Chiste and Allwaste. (Exhibit 10.6
               to the Allwaste Annual Report on Form 10-K (File No. 1-11016)
               for the fiscal year ended August 31, 1995, filed November 30,
               1995 (the "1995 Form 10-K"), is hereby incorporated by
               reference.)

      10.13 -- Agreement and Sixth Amendment to Credit Agreement dated
               February 29, 1996, by and among Allwaste, the financial
               institutions signatory thereto, and Texas Commerce Bank National
               Association, a national banking association, as Agent. (Exhibit
               10.13 to the Allwaste Quarterly Report on Form 10-Q (File No.
               1-11016) for the fiscal quarter ended May 31, 1996 (the "May
               10-Q") is hereby incorporated by reference.)

      10.14 -- Agreement and Seventh Amendment to Credit Agreement dated
               August 1, 1996, by and among Allwaste, the financial
               institutions signatory thereto, and Texas Commerce Bank National
               Association, a national banking association, as Agent. (Exhibit
               10.14 to the 1996 10-K is hereby incorporated by reference.)

      10.15 -- First Amendment to Employment Agreement dated November 11,
               1996, between R. L. Nelson, Jr. and Allwaste. (Exhibit 10.15 to
               the 1996 10-K is hereby incorporated by reference.)

      10.16 -- Second Amendment to Employment Agreement dated October 25,
               1996, between Robert M. Chiste and Allwaste. (Exhibit 10.16 to
               the 1996 10-K is hereby incorporated by reference.)

      10.17 -- First Amendment to Employment Agreement dated November 11,
               1996, between William L. Fiedler and Allwaste. (Exhibit 10.17 to
               the 1996 10-K is hereby incorporated by reference.)


                                     -15-
<PAGE>   18

      10.18 -- Employment Agreement dated November 11, 1996, between David
               E. Fanta and Allwaste. (Exhibit 10.18 to the 1996 10-K is hereby
               incorporated by reference.)

      10.19 -- Employment Agreement dated November 11, 1996, between T.
               Wayne Wren, Jr. and Allwaste. (Exhibit 10.19 to the 1996 10-K is
               hereby incorporated by reference.)

      10.20 -- Employment Agreement dated November 11, 1996, between James
               E. Rief and Allwaste. (Exhibit 10.20 to the 1996 10-K is hereby
               incorporated by reference.)

      10.21 -- Employment Agreement dated November 11, 1996, between
               Michael W. Ramirez and Allwaste. (Exhibit 10.21 to the 1996 10-K
               is hereby incorporated by reference.)

      10.22 -- Executive Severance Agreement dated November 11, 1996,
               between R. L. Nelson, Jr. and Allwaste. (Exhibit 10.22 to the
               1996 10-K is hereby incorporated by reference.)

      10.23 -- Executive Severance Agreement dated November 11, 1996,
               between Robert M. Chiste and Allwaste. (Exhibit 10.23 to the
               1996 10-K is hereby incorporated by reference.)

      10.24 -- Executive Severance Agreement dated November 11, 1996,
               between David E. Fanta and Allwaste. (Exhibit 10.24 to the 1996
               10-K is hereby incorporated by reference.)

      10.25 -- Executive Severance Agreement dated November 11, 1996,
               between T. Wayne Wren, Jr. and Allwaste. (Exhibit 10.25 to the
               1996 10-K is hereby incorporated by reference.)

      10.26 -- Executive Severance Agreement dated November 11, 1996,
               between James E. Rief and Allwaste. (Exhibit 10.26 to the 1996
               10-K is hereby incorporated by reference.)

      10.27 -- Executive Severance Agreement dated November 11, 1996,
               between William L. Fiedler and Allwaste. (Exhibit 10.27 to the
               1996 10-K is hereby incorporated by reference.)

      10.28 -- Executive Severance Agreement dated November 11, 1996,
               between Michael W. Ramirez and Allwaste. (Exhibit 10.28 to the
               1996 10-K is hereby incorporated by reference.)

      10.29 -- 1996 Interim Management Bonus Plan. (Exhibit 10.29 to the
               1996 10-K is hereby incorporated by reference.)

      10.30 -- Third Amendment to Employment Agreement dated November 11,
               1996, between Robert M. Chiste and Allwaste. (Exhibit 10.30 to
               the 1996 10-K is hereby incorporated by reference.)

      10.31 -- Allwaste EVA Incentive Compensation Plan. (Exhibit 10.31 to
               the 1996 10-K is hereby incorporated by reference.)

      10.32 -- Agreement and Eighth Amendment to Credit Agreement dated
               December 1, 1996, by and among Allwaste, the financial
               institutions signatory thereto, and Texas Commerce Bank National
               Association, a national banking association, as Agent. (Filed
               herewith.)

      10.33 -- Non-Employee Director Restricted Stock Plan. (Filed herewith.)

      10.34 -- Interim Deferred Compensation Plan. (Filed herewith.)

       27.1 -- Financial Data Schedule. (Filed herewith.)

      (b) Reports on Form 8-K.

      Allwaste, Inc. (the "Company") Current Report on Form 8-K dated March 6,
1997, filed April 4, 1997, related to the proposed merger of Philip/Atlas
Merger Corp., an indirect wholly-owned subsidiary of Philip Environmental Inc.
and the Company.


                                     -16-
<PAGE>   19

                                   SIGNATURE


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

                                       ALLWASTE, INC.


Dated: April 11, 1997                  By:
                                           ----------------------------------
                                           T. Wayne Wren, Jr.
                                           Senior Vice President - Chief 
                                             Financial Officer and Treasurer

                                     -17-
<PAGE>   20
                               INDEX TO EXHIBITS
                               -----------------

      EXHIBIT
      NUMBER                         DESCRIPTION
      ------                         -----------
      10.32 -- Agreement and Eighth Amendment to Credit Agreement dated
               December 1, 1996, by and among Allwaste, the financial
               institutions signatory thereto, and Texas Commerce Bank National
               Association, a national banking association, as Agent. (Filed
               herewith.)

      10.33 -- Non-Employee Director Restricted Stock Plan. (Filed herewith.)

      10.34 -- Interim Deferred Compensation Plan. (Filed herewith.)

       27.1 -- Financial Data Schedule. (Filed herewith.)


