<PAGE>

                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549

                                   FORM 10-K

  (Mark One)
      [X]    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                        SECURITIES EXCHANGE ACT OF 1934
                  For the fiscal year ended December 31, 1999
                                       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:  033-68444

                            WILLIAMS SCOTSMAN, INC.
            (Exact name of Registrant as specified in its Charter)

                 Maryland                               52-0665775
     (State or other jurisdiction of                 (I.R.S. Employer
      incorporation or organization)                Identification No.)

          8211 Town Center Drive                           21236
            Baltimore, Maryland                         (Zip Code)
  (Address of principal executive offices)

Registrants' telephone number, including area code: (410) 931-6000
Securities registered pursuant to Section 12(b) of the Act:

       Title of each class             Name of each exchange on which registered
       -------------------             -----------------------------------------
               None                                           None
-----------------------------------  -------------------------------------------

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


                                     None
--------------------------------------------------------------------------------
                               (Title of class)

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

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

     The Registrant is a wholly-owned subsidiary of Scotsman Holdings, Inc., a
Delaware corporation. As of March 30, 2000, Scotsman Holdings, Inc. owned
3,320,000 shares of common stock ("Common Stock") of the Registrant.
<PAGE>

                                    PART I

Item 1.   Business

General

     Founded in 1946, Williams Scotsman, Inc. ("Scotsman" or the "Company") is
the second largest lessor of mobile office and storage units in the United
States with over 79,500 units leased through 83 branch offices in 39 states and
Canada. The Company's fleet provides high quality, cost-effective relocatable
space solutions to over 24,000 customers in 467 industries including
construction, education, healthcare and retail. In addition to its core leasing
operations, Scotsman sells new and previously leased mobile office units and
provides delivery, installation and other ancillary products and services.

     The Company's mobile office fleet is generally comprised of standardized,
versatile products that can be configured to meet a wide variety of customer
needs. Most units are fitted with axles and hitches and are towed to various
locations. Most units are wood frame construction, contain materials used in
conventional buildings, and are equipped with air conditioning and heating,
electrical outlets and, where necessary, plumbing facilities. Mobile office
units are durable and have an estimated useful life of 20 years. Storage
products are windowless and are typically used for secure storage space. There
are generally two types: ground-level entry storage containers and storage
trailers with axles and wheels. The basic storage unit features a roll-up or
swing door at one end. Units are made of heavy exterior metals for security and
water tightness. The average age of the Company's fleet of mobile office units
is approximately 7 years while the average age of the total fleet is
approximately 8 years.

     Based on its experience, management estimates that the U.S. mobile office
industry (excluding manufacturing operations) exceeds $2.5 billion and has been
growing in recent years. This growth has been primarily driven by population
shifts, demographic trends, economic expansion, and the increased demand for
outsourcing space needs (for example, school expansion programs, construction
starts, recreation and entertainment activities). By outsourcing their space
needs, the Company's customers are able to achieve flexibility, preserve capital
for core operations, and convert fixed costs into variable costs.

     The Company purchases its new mobile office units through third-party
suppliers and purchases storage units in the aftermarket directly from shipping
companies or through brokers. The Company believes there are numerous
manufacturers and suppliers of mobile office and storage units which supply
these products at competitive prices throughout the United States. The Company
anticipates being able to procure an adequate supply of product on acceptable
terms for its projected operational requirements. The Company does not believe
that the loss of any one of its suppliers would have a material adverse effect
on its operations.
<PAGE>

Forward Looking Statements

     Certain statements in this Form 10-K for the year ended December 31, 1999
constitute "forward-looking statements" within the meaning of Section 27A of the
Securities Act of 1933, as amended (the "Securities Act") and Section 21E of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). Such forward-
looking statements involve known and unknown risks, uncertainties and other
factors which may cause actual results to differ materially from future results
expressed or implied by such forward-looking statements. Such factors include,
among others, the following: substantial leverage and the ability to service
debt; changing market trends in the mobile office industry; general economic and
business conditions including a prolonged or substantial recession; the ability
to finance fleet and branch expansion, locate and finance acquisitions, and
integrate recently acquired businesses into the Company; the ability of the
Company to implement its business and growth strategy and maintain and enhance
its competitive strengths; the ability of the Company to obtain financing for
general corporate purposes; intense industry competition; availability of key
personnel; industry over-capacity; and changes in, or the failure to comply
with, government regulations. No assurance can be given as to future results and
neither the Company nor any other person assumes responsibility for the accuracy
and completeness of these forward-looking statements. Consequently undue
reliance should not be placed on such forward-looking statements, which speak
only as of the date hereof. The Company undertakes no obligation to publicly
release the result of any revision to these forward-looking statements that may
be made to reflect events or circumstances after the date hereof or to reflect
the occurrence of unanticipated events.

Acquisition of Evergreen Mobile Company

     On February 1, 1999, the Company acquired all of the outstanding stock of
Evergreen Mobile Company, a privately held Washington corporation ("Evergreen"),
at a net purchase price of $36.2 million, in a transaction accounted for under
the purchase method of accounting. At the time of the acquisition, Evergreen was
the largest mobile office dealer in the state of Washington with a fleet of
approximately 2,000 units. (See note 1 of the Notes to Consolidated Financial
Statements.) The acquisition was financed with borrowings under the Company's
amended credit facility.

                                       2
<PAGE>

Acquisition of Space Master International, Inc.

     On September 1, 1998, the Company acquired all of the outstanding stock of
Space Master International, Inc., a privately held Georgia corporation ("SMI"),
at a net purchase price of $272.7 million, in a transaction accounted for under
the purchase method of accounting. At the time of the acquisition, SMI was the
third largest company in the U.S. mobile office industry ranked by fleet size,
with a lease fleet of approximately 12,800 units through a network of 26
branches in 13 states, concentrated in the Southeast. (See note 1 of the Notes
to Consolidated Financial Statements.) The acquisition was financed in part with
borrowings under the Company's amended credit facility and in part with $64.6
million in equity contributed by the Company's parent, Scotsman Holdings, Inc.
("Holdings").

Recapitalization

     Pursuant to a recapitalization agreement, on May 22, 1997, Holdings (i)
repurchased 3,210,679 shares of its outstanding common stock for an aggregate of
approximately $293.8 million in cash and approximately $21.8 million in
promissory notes which were repaid in January 1998 and (ii) issued 1,475,410
shares of common stock for an aggregate of approximately $135.0 million in cash.
Such amounts have not been restated for the three-for-one stock split granted by
Holdings in December 1997. In related transactions, Holdings and the Company
purchased or repaid all of the outstanding indebtedness. In conjunction with the
debt extinguishment, the Company recognized an extraordinary loss of $13.7
million. The transactions described above are collectively referred to herein as
the "Recapitalization". (See note 1 of the Notes to the Consolidated Financial
Statements.)

     In connection with the Recapitalization, (i) the Company accelerated the
payment of deferred compensation under its long term incentive plan, (ii) all
outstanding stock options under Holdings' employee stock option plan vested and
became immediately exercisable and (iii) the Company canceled a portion of the
outstanding stock options. Accordingly, the Company recognized $5.1 million of
Recapitalization expenses including $2.5 million in connection with the
acceleration of deferred compensation and $2.6 million in connection with the
cancellation of the stock options.

     In order to finance the Recapitalization, the Company issued $400 million
in 9.875% senior notes due 2007 and entered into a $300 million revolving bank
facility. The Company paid a dividend of $178.7 million to Holdings to pay
Recapitalization expenses, to repurchase common stock and to purchase certain
notes.

Operating Strategy

     Due to the local and regional nature of its business, the Company's goals
are to become the leader in each of the local markets in which it competes and
to expand its coverage to additional

                                       3
<PAGE>

local markets. To achieve market leadership, the Company has implemented a
strategy which emphasizes (i) superior service, (ii) a well-maintained, readily-
available and versatile lease fleet, (iii) effective fleet management using
proprietary information systems, and (iv) targeted marketing through an
experienced and motivated sales force. The Company believes that it is generally
the first or second largest provider of relocatable space in each of its
regional markets as measured by lease fleet size and revenues. The Company's
branch offices are distributed throughout the United States and Canada and are
located in a majority of the major metropolitan areas.

     Management's business and growth strategy includes the following:

     Fleet and Branch Expansion. The Company plans to continue to capitalize on
the industry's favorable growth trends by increasing customer penetration and
fleet size in existing markets. In addition, the Company plans to open branches
in new markets where positive business fundamentals exist. From January 1, 1997
to December 31, 1999, the Company increased its number of branches from 56 to 83
and the number of units from approximately 40,600 to 79,500 as a result of
acquisitions and general fleet expansion. The Company plans to continue
expanding its network.

     Selective Fleet Acquisitions. To complement its fleet and branch expansion,
the Company plans to capitalize on the industry's fragmentation and expand its
geographic coverage by making selective acquisitions of mobile offices and
storage product lease fleets. From January 1, 1997 to December 31, 1999,
Scotsman made nine acquisitions of approximately 19,600 units for a total
purchase price of $325.9 million including the purchase of SMI in 1998, which
added approximately 12,800 mobile office units at a total purchase price of
$272.7 million. Units added through acquisitions have accounted for
approximately 46% of the value of the Company's total fleet purchases during
this period (approximately 15% excluding SMI).

     Ancillary Products and Services. The Company continues to identify new
applications for its existing products, diversify into new product offerings and
deliver ancillary products and services to leverage the Company's existing
branch network. For example, in 1996, the Company began focusing on the
expanding market for storage product units, which are used for secured storage
space. Since January 1, 1996, the Company has completed seven acquisitions
totaling approximately 5,200 storage units. Ancillary products and services
include the rental of steps, ramps and furniture.

                                       4
<PAGE>

Competition

     Although the Company's competition varies significantly by market, in
general the mobile office industry is highly competitive. The Company competes
primarily in terms of product availability, customer service and price. The
Company believes that its reputation for customer service and its ability to
offer a wide selection of units suitable for many varied uses at competitive
prices allow it to compete effectively. However, certain of the Company's
competitors are less leveraged, have greater market share or product
availability in a given market and have greater financial resources than the
Company.

Employees

     At December 31, 1999, the Company employed 1,020 persons. None of the
Company's employees are covered by a collective bargaining agreement. The
Company considers its relationship with its employees to be good.

Regulatory Matters

     The Company must comply with various federal, state and local
environmental, health and safety laws and regulations in connection with its
operations. The Company believes that it is in substantial compliance with these
laws and regulations. In addition to compliance costs, the Company may incur
costs related to alleged environmental damage associated with past or current
properties owned or leased by the Company. The Company believes that its
liability, if any, for any environmental remediation will not have a material
adverse effect on its financial condition.

     A portion of the Company's units is subject to regulation in certain states
under motor vehicle and similar registration and certificate of title statutes.
The Company believes that it has complied in all material respects with all
motor vehicle registration and similar certificate of title statutes in states
where such statutes clearly apply to mobile office units. If laws in other
states are changed to require registration, the Company could be subject to
additional costs, fees and taxes. The Company does not believe that these costs
would be material to its financial condition.

                                       5
<PAGE>

Item 2.   Properties

     The Company's headquarters is a three-story modular office structure
located on 3.1 acres in suburban Baltimore, Maryland. Additionally, the Company
leases approximately 74% of its 83 branch locations and owns the balance.
Management believes that none of the Company's owned or leased facilities,
individually, is material to the operations of the Company.

Item 3.   Legal Proceedings

     The Company is involved in certain legal actions arising in the ordinary
course of business. The Company believes that none of these actions, either
individually or in the aggregate, will have a material adverse effect on the
Company's business, results of operations or financial condition.

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

     None.

                                       6
<PAGE>

                                    PART II

Item 5.   Market for Registrant's Common Equity and Related Shareholder Matters

     The Company is a wholly-owned subsidiary of Scotsman Holdings, Inc., a
Delaware corporation. There is no established public trading market for
Holdings' Common Stock.

     During 1999, the Company paid dividends to Holdings totaling $55,000 for
normal operating expenses. The Company does not intend to pay any further
dividends in the foreseeable future, other than for the normal operating
expenses of Holdings, but reserves the right to do so.

     Pursuant to the Scotsman Holdings, Inc. Amended and Restated 1997 Employee
Stock Option Plan (the "1997 Plan"), options for 29,800 shares of Holdings'
common stock were granted during 1999. No options were exercised during 1999 and
no shares of Holdings' common stock were issued during 1999 upon the exercise of
previously granted options.

                                       7
<PAGE>

Item 6.   Selected Historical Financial Data

The following tables summarize certain selected historical financial data which
should be read in conjunction with "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and the Financial Statements
appearing elsewhere herein. The selected historical financial data set forth
below for the fiscal years ended December 31, 1995, 1996, 1997, 1998 and 1999
and as of the end of each of such periods have been derived from the audited
Financial Statements.

<TABLE>
<CAPTION>
                                                       Year Ended December 31,
                                          -------------------------------------------------
                                            1995       1996      1997      1998      1999
                                          --------   --------  --------  --------  --------
                                           (Dollars in thousands, except per share amounts)
<S>                                       <C>        <C>       <C>       <C>       <C>
Statement of Operations Data:
Revenues:
  Leasing                                 $ 86,765   $104,438  $120,266  $152,221  $201,820
  Sales:
     New units                              23,126     28,042    41,926    46,448    73,001
     Rental equipment                        9,733     12,331    13,120    15,530    22,369
  Delivery and installation                 28,162     32,767    38,626    47,002    71,245
  Other                                     10,734     17,564    22,252    25,893    37,370
                                          --------   --------  --------  --------  --------
     Total                                $158,520   $195,142  $236,190  $287,094  $405,805
===========================================================================================

Gross profit:
  Leasing                                 $ 47,898   $ 56,916  $ 71,237  $101,036  $136,543
  Sales:
     New units                               3,853      4,999     6,685     8,099    12,678
     Rental equipment                        2,080      2,618     3,521     3,730     5,133
  Delivery and installation                  6,114      7,520    10,914    12,083    18,886
  Other                                      8,108     13,590    15,480    20,393    29,949
                                          --------   --------  --------  --------  --------
     Total                                $ 68,053   $ 85,643  $107,837  $145,341  $203,189
===========================================================================================

Selling, general and administrative
  expenses                                $ 36,295   $ 42,260  $ 46,256  $ 58,099  $ 71,425
Recapitalization expenses (1)                  ---        ---     5,105       ---       ---
Earnings from continuing
  operations before extraordinary item       4,559      9,195     5,979     3,791    17,307
Earnings from continuing
  operations before extraordinary
  item per common share                   $   1.37   $   2.77  $   1.80  $   1.14  $   5.21
                                          ========   ========  ========  ========  ========
Ratio of earnings to fixed charges (2)         1.3x       1.6x      1.2x      1.2x      1.4x
===========================================================================================

EBITDA (3)                                $ 56,550   $ 75,371  $ 92,407  $117,572  $168,216
===========================================================================================
</TABLE>

                                       8
<PAGE>

<TABLE>
<CAPTION>
                                                          Year Ended December 31,
                                        ---------------------------------------------------------------
                                           1995         1996         1997         1998          1999
                                        ----------   ----------   ----------   ----------    ----------
                                              (Dollars in thousands, except per share amounts)
<S>                                     <C>          <C>          <C>          <C>           <C>
Balance Sheet Data:
Rental equipment, net                   $  324,207   $  356,183   $  403,528   $  640,634    $  726,924
Total assets                               383,679      428,697      514,173      941,287     1,066,464
Long-term debt                             242,695      268,753      533,304      845,447       915,823
Stockholder's equity (deficit)              62,508       69,633     (111,564)     (63,258)      (44,107)
</TABLE>

          (1)  Recapitalization expenses represent costs incurred in connection
               with the recapitalization of Holdings in May 1997. These expenses
               include $2.5 million in connection with the acceleration of
               deferred compensation and $2.6 million in connection with the
               cancellation of the stock options. (See note 1 of Notes to
               Consolidated Financial Statements.)

          (2)  The ratio of earnings to fixed charges is computed by dividing
               fixed charges into earnings from continuing operations before
               income taxes and extraordinary items plus fixed charges. Fixed
               charges include interest, expensed or capitalized, including
               amortization of deferred financing costs and debt discount and
               the estimated interest component of rent expense.

          (3)  The Company defines EBITDA as net income before interest, taxes,
               depreciation, amortization, deferred compensation, non-cash
               compensation expense, recapitalization expenses, and
               extraordinary loss. EBITDA as defined by the Company does not
               represent cash flow from operations as defined by generally
               accepted accounting principles and should not be considered as an
               alternative to cash flow as a measure of liquidity, nor should it
               be considered as an alternative to net income as an indicator of
               the Company's operating performance.

                                       9
<PAGE>

Item 7.   Management's Discussion and Analysis of Financial Condition and
          Results of Operations

     The following discussion regarding the financial condition and results of
operations of the Company for the three years ended December 31, 1999 should be
read in conjunction with the more detailed information and Financial Statements
included elsewhere herein.  Certain statements in "Management's Discussion and
Analysis of Financial Condition and Results of Operations" are forward-looking
statements.  See "Forward-Looking Statements".

General

     On February 1, 1999, the Company acquired all of the outstanding stock of
Evergreen Mobile Company.  See "Acquisition of Evergreen Mobile Company."

     On September 1, 1998, the Company acquired all of the outstanding stock of
Space Master International, Inc.  See "Acquisition of Space Master
International, Inc."

     During 1997, the Company and Holdings completed a series of transactions
pursuant to a Recapitalization Agreement.  See "Recapitalization".

     The Company derives its revenues and earnings from the leasing and sale of
mobile office and storage units, delivery and installation of those units and
the provision of other ancillary products and services.  Leasing operations
account for a majority of the Company's revenues and gross profits.  Used mobile
office units are sold by the Company from its lease fleet in the ordinary course
of its business at either fair market value or, to a lesser extent, pursuant to
pre-established lease purchase options.  The sale of used units results in the
availability of the total cash proceeds and generally results in the reporting
of gross profit on such sales.

     New unit sales revenues are derived from the sale of new mobile offices,
similar to those units leased by the Company. Revenues from delivery and
installation result from activities related to the transportation and
installation of and site preparation for both leased and sold products. Other
revenues are derived from other products and services including: rental of
steps, furniture, ramps and security systems; sales of parts and supplies; and
charges for granting insurance waivers and for damage billings.

     Although a portion of the Company's business is with customers in
industries that are cyclical in nature and subject to changes in general
economic conditions, management believes that certain characteristics of the
mobile office leasing industry and Scotsman's operating strategies should help
to mitigate the effects of economic downturns. These characteristics include (i)
the Company's typical lease terms which include contractual provisions requiring
customers to retain units on lease for, on average, 12 months, (ii) the
flexibility and low cost offered to Scotsman's customers by leasing which may be
an attractive alternative to capital purchases, (iii) the Company's

                                       10
<PAGE>

ability to redeploy units during regional recessions and (iv) the diversity of
the Company's industry segments and the geographic balance of the Company's
operations (historically during economic slowdowns, the construction industry,
which represented 27% of its 1999 revenues, experiences declines in utilization
rates, while other customer segments including education, which represented 19%
of 1999 revenue, are more stable).

Results of Operations

     1999 Compared With 1998. Revenues in 1999 were $405.8 million, a $118.7
million or 41.3% increase from revenues of $287.1 million in 1998. The increase
resulted from a $49.6 million or 32.6% increase in leasing revenue, a $26.6
million or 57.2% increase in new sales revenue, a $24.2 million or 51.6%
increase in delivery and installation revenue, a $6.8 million or 44% increase in
used sales revenue and a $11.5 million or 44.3% increase in other revenue. The
increase in leasing revenue is attributable to a 32% increase in the average
lease fleet to approximately 75,500 units and an increase of $2 in the average
monthly rental rate, offset by a decrease in the average fleet utilization of
one percent to 85%. The increase in new and used sales revenue is primarily due
to the overall branch expansion that the Company has experienced over the last
several years. The increase in delivery and installation revenue is attributable
to the increases in the leasing and new unit sales revenue as described above.
Other revenue increased as a result of increases in the rental of steps, ramps
and furniture as well as miscellaneous revenue related to services provided for
customer owned units.

     Gross profit in 1999 was $203.2 million, a $57.8 million or 39.8% increase
from 1998 gross profit of $145.3 million. The increase resulted from a $35.5
million or 35.1% increase in leasing gross profit, a $4.6 million or 56.5%
increase in new sales gross profit, a $6.8 million or 56.3% increase in delivery
and installation gross profit and a $9.6 million or 46.9% increase in gross
profit from other revenues. The increase in leasing gross profit is a result in
the increase in leasing revenue described above combined with an increase in
leasing margins from 66.4 % in 1998 to 67.7% in 1999. Excluding depreciation and
amortization, leasing margins increased slightly from 84.5% in 1998 to 84.8% in
1999. The increase in gross profit from new sales and delivery and installation
are primarily due to the increases in revenue as discussed above. The increase
in gross profit from other revenue is primarily related to the overall revenue
increases noted above.

     Selling, general and administrative (SG&A) expenses increased by $13.3
million or 22.9% from 1998. The increase is the result of the growth experienced
by the Company, both in terms of fleet size and number of branches as compared
to 1998. The Company's branch network has expanded from 80 branches at December
31, 1998 to 83 branches at December 31, 1999, while the fleet has grown by
approximately 9,400 units from December 31, 1998. The overall increases in SG&A
expenses are due to increases in field related expenses, primarily payroll and
occupancy, incurred in connection with this branch expansion and fleet growth
and a full year impact of field related costs associated with the SMI
acquisition.

                                       11
<PAGE>

     Other depreciation and amortization increased from $9.6 million in 1998 to
$15.9 million in 1999, $3.9 million of which relates to the amortization of
goodwill and other intangible assets recorded in connection with both the
Evergreen and SMI acquisitions (see note 2 of Notes to the Consolidated
Financial Statements). The remaining increase relates to depreciation on
increased balances of property and equipment and inventories of steps and ramps
associated with the overall growth of the Company's branch network and leased
fleet as discussed above.

     Interest expense increased by 28.9% to $83.9 million in 1999 from $65.1
million in 1998. This increase is the result of the first full year effect of
borrowings to finance the purchase of SMI in September 1998 and the result of
financing the other fleet and branch growth, including the acquisition of
Evergreen.

     The difference between the Company's reported tax provision for the year
ended December 31, 1999 and the tax provision computed based on statutory rates
is primarily attributable to non-deductible goodwill amortization expense of
$5.1 million.

     1998 Compared With 1997. Revenues in 1998 were $287.1 million, a $50.9
million or 21.6% increase from revenues of $236.2 million in 1997. The increase
resulted from a $32.0 million or 26.6% increase in leasing revenue, a $2.4
million or 18.4% increase in used sales revenue, a $4.5 million or 10.8%
increase in new sales revenue, a $8.4 million or 21.7% increase in delivery and
installation revenue and a $3.6 million or 16.4% increase in other revenue. The
increase in leasing revenue is attributable to a 30% increase in the average
lease fleet to approximately 57,300 units, offset by a slight decrease in the
average fleet utilization of less than one percentage point to 86% and a
decrease of $4 in the average monthly rental rate. The decrease in the average
monthly rental rate is a result of modest rate increases in the Company's major
products offset by changes in fleet mix. The increase in new and used sales
revenue is primarily due to the overall branch expansion that the Company has
experienced over the last several years. The increase in delivery and
installation revenue is attributable to the increases in the leasing and new
unit sales revenue described above. Other revenue increased as a result of
increases in the rental of steps, ramps and furniture as well as miscellaneous
revenue related to services provided for customer-owned units.

     Gross profit in 1998 was $145.3 million, a $37.5 million or 34.8% increase
from 1997 gross profit of $107.8 million. This increase is primarily a result of
an increase in leasing gross profit of $29.8 million or 41.8%. The increase in
gross profit from leasing is a result of the increase in leasing revenue
described above combined with an increase in leasing margins from 59.2% in 1997
to 66.4% in 1998, primarily due to the change in the estimated residual value of
rental equipment effective October 1, 1997. (See note 2 of Notes to Consolidated
Financial Statements.) Excluding depreciation and amortization, leasing margins
were 84.5% for 1998, essentially unchanged from 84.6% in 1997.

     SG&A expenses increased by $11.8 million or 25.6% from 1997. Of this
increase, $2.7 million relates to a non-cash stock option expense accrual
recorded in accordance with variable plan

                                       12
<PAGE>

accounting. The remaining increase is the result of the growth experienced by
the Company, both in terms of fleet size and number of branches as compared to
1997. The Company's branch network has expanded from 72 branches at December 31,
1997 to 80 branches at December 31, 1998 while the fleet has grown by
approximately 23,100 units from December 31, 1997. The overall increases in SG&A
expenses are due to increases in field related expenses, primarily payroll and
occupancy, incurred in connection with this branch expansion and fleet growth.

     Other depreciation and amortization increased from $2.9 million in 1997 to
$9.6 million in 1998, $1.5 million of which relates to the amortization of
goodwill and other intangible assets recorded in connection with the SMI
acquisition (see note 2 of Notes to Consolidated Financial Statements). The
remaining increase relates to depreciation on increased balances of property and
equipment and inventories of steps and ramps associated with the overall growth
of the Company's branch network and lease fleet as discussed above .

     Interest expense increased by 49.2% to $65.1 million in 1998 from $43.6
million in 1997. This increase is a result of the full year effect of borrowings
to finance the Recapitalization and the purchase of SMI in September 1998, and
as a result of financing the other fleet and branch growth.

     The difference between the Company's reported tax provision in 1998 and the
tax provision computed based on U.S. statutory rates is primarily attributed to
a change in estimate associated with the Company's deferred tax asset valuation
allowance. During 1998, the Company recorded a charge to income tax expense of
$3.4 million relating to the establishment of a deferred tax asset valuation
allowance as a result of a change in management's tax planning strategies
associated with the recoverability of certain net operating loss carryforwards.
(See note 5 of Notes to Consolidated Financial Statements.) In addition, the
reported tax provision in 1998 reflects the impact of approximately $1.5 million
of non-deductible amortization of goodwill and other intangible assets primarily
associated with the SMI acquisition.

Liquidity and Capital Resources

     During 1997, 1998 and 1999, the Company's principal sources of funds
consisted of cash flow from operating and financing sources.  Cash flow from
operating activities of $32.5 million in 1997, $43.6 million in 1998 and $72.3
million in 1999 was largely generated by the rental of units from the Company's
lease fleet and sales of new mobile office units.

     The Company has increased its EBITDA and believes that EBITDA provides the
best indication of its financial performance and provides the best measure of
its ability to meet historical debt service requirements. The Company defines
EBITDA as net income before interest, taxes, depreciation, amortization,
deferred compensation, non-cash compensation expense, recapitalization expenses,
and extraordinary loss. EBITDA as defined by the Company does not represent cash
flow from operations as defined by generally accepted accounting principles and
should not be considered as an alternative to cash flow as a measure of
liquidity, nor should it be considered as an alternative

                                       13
<PAGE>

to net income as an indicator of the Company's operating performance. The
Company's EBITDA increased by $50.6 million or 43.1% to $168.2 million in 1999
compared to $117.6 million in 1998. This increase in EBITDA is a result of
increased leasing activity resulting from the overall increase in the number of
units in the fleet and an increase in average monthly rental rates, partially
offset by a slight decline in utilization, and increased SG&A expenses to
support the increased activities during 1999. In 1998, the Company's EBITDA
increased by $25.2 million or 27.2% to $117.6 million compared to $92.4 million
in 1997. This increase in EBITDA is a result of increased leasing activity
resulting from the overall increase in the number of units in the fleet and an
increase in average monthly rental rates, partially offset by a slight decline
in utilization, and increased SG&A expenses to support the increased activities
during 1998.

     Cash flow used in investing activities was $85.2 million in 1997, $390.4
million in 1998 and $142.7 million in 1999. The Company's primary capital
expenditures are for the discretionary purchase of new units for the lease fleet
and units purchased through acquisitions. The Company seeks to maintain its
lease fleet in good condition at all times and generally increases the size of
its lease fleet only in those local or regional markets experiencing economic
growth and established unit demand. During 1997, 1998 and 1999, the Company
significantly increased its net capital expenditures through purchases of new
units for the rental fleet, capital improvements and betterments for existing
units as well as the acquisition of existing rental fleets, including SMI. These
expenditures increased the size of the rental fleet by approximately 6,400 units
during 1997, 23,100 units during 1998 and 9,400 units during 1999. This
increased activity was in response to increased customer demand and a
continuation of the Company's fleet acquisition strategy. The following table
sets forth the Company's investment in its lease fleet for the periods
indicated.

<TABLE>
<CAPTION>
                                                                       Year Ended December 31,
                                                                      -------------------------
                                                                       1997      1998     1999
                                                                      ------    ------   ------
                                                                        (Dollars in millions)
     <S>                                                              <C>       <C>      <C>
     Gross capital expenditures for rental
      equipment:
           New units and betterments................................  $ 80.0    $110.0   $115.0
           Fleet acquisitions, excluding acquired businesses........     7.4       9.2       --
                                                                      ------    ------   ------
                                                                        87.4     119.2    115.0
     Purchase price allocated to fleet of acquired businesses.......      --     157.2     24.2
     Proceeds from sale of used rental equipment....................   (13.1)    (15.5)   (22.4)
                                                                      ------    ------   ------
     Net capital expenditures for rental
      Equipment.....................................................  $ 74.3    $260.9   $116.8
                                                                      ======    ======   ======

     Lease fleet maintenance expenses included
           in the statement of operations...........................  $ 18.3    $ 23.4   $ 30.5
                                                                      ======    ======   ======
</TABLE>

                                       14
<PAGE>

     The Company believes it can manage the capital requirements of its lease
fleet, and thus its cash flow, through the careful monitoring of its lease fleet
additions. During 1997, 1998 and 1999, the Company was able to sell used units
in the ordinary course of business (excluding units sold pursuant to purchase
options) at an average of more than 95% of their total capitalized cost and at a
premium to net book value. Such capitalized costs include the cost of the unit
as well as costs of significant improvements made to the unit. See further
explanation below and note (2) of Notes to Consolidated Financial Statements.
Historically, the Company has recognized net gains on the sale of used units.

     The Company's maintenance and refurbishment program is designed to maintain
the value of lease fleet units and realize rental rates and operating cash flows
from older units comparable to those from newer units. The sale of used units
helps preserve the overall quality of the Company's lease fleet and enhances
cash flow. Generally, costs of improvements and betterments aggregating less
than $1,000 per unit are expensed as incurred. Expenditures greater than $1,000
that significantly extend the economic useful life of a unit or that materially
alter a unit's configuration are capitalized. The Company estimates that the
current annual capital expenditures (net of costs to replace used units that are
sold) necessary to maintain its lease fleet and facilities at their current size
and condition is approximately $25 million.

     Other capital expenditures of $10.9 million, $13.9 million and $13.9
million in 1997, 1998 and 1999, respectively, consist of those capital
expenditures for items not directly related to the lease fleet, such as branch
or headquarters buildings and equipment, leasehold improvements and management
information systems.

     Cash provided by financing activities of $70.2 million in 1999 is comprised
primarily of long-term borrowings. In 1999 the Company paid dividends to
Holdings in the amount of $55,000 to fund normal operating expenses. Cash
provided by financing activities of $347.3 million in 1998 is comprised
primarily of long term borrowings and a capital contribution received from
Holdings to finance the Company's acquisition of SMI in September 1998. In 1998,
the Company paid dividends to Holdings in the amount of $22.8 million primarily
to effect the repayment of a promissory note of Holdings which was issued in
connection with the Recapitalization. Cash provided by financing activities of
$52.6 million in 1997 was primarily the result of a series of transactions
related to the Recapitalization in May 1997, and is comprised of net borrowings
from long term debt offset by dividends paid to Holdings primarily to effect the
repurchase of its common stock and purchase its Senior Notes.

     In connection with the acquisition of SMI, the Company entered into an
amended credit facility providing for revolver borrowings up to $540 million
(subject to the satisfaction of certain requirements including a borrowing base
test) and a $60 million term loan. Availability under the revolver is based on a
borrowing base calculation, which was amended effective September 15, 1999, and
was $74.0 million at December 31, 1999. Borrowings under the line may be used
for working capital, acquisitions and general corporate purposes. At the
Company's option, the

                                       15
<PAGE>

revolving credit loans may be maintained as (a) Base Rate Loans which bear
interest at the prime rate plus 1% or (b) Eurodollar Loans which bear interest
at the Eurodollar Rate plus 2.25%. Beginning in 1998, the applicable margin used
to calculate such interest rates may be reduced if the Company satisfies certain
leverage ratios. Terms of the revolver, which matures May 21, 2002, are
unchanged from the original credit agreement dated May 1997. The term loan,
which matures May 21, 2005, bears interest at a rate of either prime plus 2.0%
or the Eurodollar Rate plus 3.25%. Principal payments due on the term loan are
equal to 1% per year for the first four years, with equal quarterly installments
thereafter. The amended credit facility is guaranteed by Holdings and a
subsidiary of the Company and is secured by a first priority security interest
in substantially all the assets of the Company, Holdings and such subsidiary.
The amended credit facility contains certain covenants including restrictions
against mergers, acquisitions, and disposition of assets, voluntary prepayments
of debt, financial covenants and certain other covenants.

     The Company believes it will have, for the next 12 months, sufficient
liquidity under its revolving line of credit and from cash generated from
operations to meet its expected obligations as they arise.

Seasonality

     Although demand from certain of the Company's customers is somewhat
seasonal, the Company's operations as a whole are not seasonal to any
significant extent.

Inflation

     The Company believes that inflation has not had a material effect on its
results of operations. However, an inflationary environment could materially
increase interest rates on the Company's floating rate debt and the replacement
cost of units in the Company's lease fleet. The price of used units sold by the
Company could also increase in such an environment. The Company's standard 12-
month lease term generally provides for annual rental rate escalation at the
inflation rate as determined by the Consumer Price Index after the end of the
initial lease term. In addition, the Company may seek to limit its exposure to
interest rate fluctuations by utilizing certain hedging mechanisms, although it
is under no obligation to do so.

                                       16
<PAGE>

Item 8.

                         INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                                                            Page
                                                                            ----
<S>                                                                         <C>
Independent Auditor's Report..............................................     18

Consolidated Balance Sheets as of December 31, 1999 and 1998..............     19

Consolidated Statements of Operations for the years ended December 31,
     1999, 1998 and 1997..................................................     20

Consolidated Statements of Changes in Stockholder's Equity for the years
      ended December 31, 1999, 1998 and 1997..............................     21

Consolidated Statements of Cash Flows for the years ended December 31,
     1999, 1998 and 1997..................................................  22-23

Notes to Consolidated Financial Statements................................  24-38

                    INDEX TO FINANCIAL STATEMENTS SCHEDULES

Schedule II - Valuation and Qualifying Accounts...........................     59
</TABLE>


          All schedules not listed have been omitted either because they are not
required or, if required, the required information is included elsewhere in the
financial statements or notes thereto.

                                       17
<PAGE>

                        Report of Independent Auditors


Board of Directors
Williams Scotsman, Inc.

We have audited the accompanying consolidated balance sheets of Williams
Scotsman, Inc. and subsidiaries as of December 31, 1999 and 1998, and the
related consolidated statements of operations, stockholder's equity and cash
flows for each of the three years in the period ended December 31, 1999. Our
audits also included the financial statement schedules listed in the Index at
Item 14(a). These consolidated financial statements and schedules are the
responsibility of the Company's management.  Our responsibility is to express an
opinion on the consolidated 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.

In our opinion, the 1999 and 1998 consolidated financial statements referred to
above present fairly, in all material respects, the consolidated financial
position of Williams Scotsman, Inc. and subsidiaries at December 31, 1999 and
1998, and the consolidated results of their operations and their cash flows for
each of the three years in the period ended December 31, 1999, in conformity
with accounting principles generally accepted in the United States. Also, in our
opinion, the related financial statement schedules, when considered in relation
to the basic financial statements taken as a whole, present fairly in all
material respects the information set forth therein.

                                         Ernst & Young LLP


Baltimore, Maryland
January 28, 2000

                                       18
<PAGE>

                   Williams Scotsman, Inc. and Subsidiaries

                          Consolidated Balance Sheets



<TABLE>
<CAPTION>
                                                                       December 31,
                                                                 1999              1998
                                                          -----------------------------------
                                                                     (In thousands)
<S>                                                           <C>              <C>
Assets
Cash                                                            $      641         $      796
Trade accounts receivable, net of allowance for doubtful
 accounts of $1,058 in 1999 and $839 in 1998                        56,989             39,244
Prepaid expenses and other current assets                           17,484             13,976
Rental equipment, net of accumulated depreciation of
 $127,154 in 1999 and $102,614 in 1998                             726,924            640,634
Property and equipment, net                                         54,074             46,679
Deferred financing costs, net                                       20,339             25,161
Goodwill and other intangible assets, net                          172,273            159,817
Other assets                                                        17,740             14,980
                                                          -----------------------------------
                                                                $1,066,464         $  941,287
                                                          ===================================
Liabilities and stockholder's equity
Accounts payable                                                $   20,587         $   12,651
Accrued expenses                                                    31,847             26,208
Rents billed in advance                                             23,035             21,702
Long-term debt                                                     915,823            845,447
Deferred income taxes                                              119,279             98,537
                                                          -----------------------------------
 Total liabilities                                               1,110,571          1,004,545
                                                          -----------------------------------

Stockholder's equity:
 Common stock, $.01 par value.  Authorized 10,000,000
   shares; issued and outstanding 3,320,000 shares                      33                 33
 Additional paid-in capital                                        126,088            124,189
 Retained deficit                                                 (170,228)          (187,480)
                                                          -----------------------------------
Total stockholder's deficit                                        (44,107)           (63,258)
                                                          -----------------------------------
                                                                $1,066,464         $  941,287
                                                          ===================================
</TABLE>


See accompanying notes to consolidated financial statements.

                                       19
<PAGE>

                   Williams Scotsman, Inc. and Subsidiaries

                     Consolidated Statements of Operations



<TABLE>
<CAPTION>
                                                              Year ended December 31
                                                         1999           1998          1997
                                                  --------------------------------------------
                                                               (In thousands except
                                                                per share amounts)
<S>                                                 <C>             <C>           <C>
Revenues
Leasing                                                   $201,820      $152,221      $120,266
Sales:
   New units                                                73,001        46,448        41,926
   Rental equipment                                         22,369        15,530        13,120
Delivery and installation                                   71,245        47,002        38,626
Other                                                       37,370        25,893        22,252
                                                  --------------------------------------------
      Total revenues                                       405,805       287,094       236,190
                                                  --------------------------------------------

Cost of sales and services
Leasing:
   Depreciation and amortization                            34,553        27,605        30,459
   Other direct leasing costs                               30,724        23,580        18,570
Sales:
   New units                                                60,323        38,349        35,241
   Rental equipment                                         17,236        11,800         9,599
Delivery and installation                                   52,359        34,919        27,712
Other                                                        7,421         5,500         6,772
                                                  --------------------------------------------
      Total costs of sales and services                    202,616       141,753       128,353
                                                  --------------------------------------------
      Gross profit                                         203,189       145,341       107,837
                                                  --------------------------------------------

Selling, general and administrative expenses                71,425        58,099        46,256
Recapitalization expenses                                        -             -         5,105
Other depreciation and amortization                         15,866         9,623         2,900
Interest, including amortization of deferred
   financing costs of $4,913, $3,857, and $2,688            83,878        65,060        43,611
                                                  --------------------------------------------
      Total operating expenses                             171,169       132,782        97,872
                                                  --------------------------------------------

      Income before income taxes and
        extraordinary item                                  32,020        12,559         9,965

Income tax expense                                          14,713         8,768         3,986
                                                  --------------------------------------------
      Income before extraordinary item                      17,307         3,791         5,979
Extraordinary loss on extinguishment of debt, net
   of income taxes of $5,292                                     -             -         8,427
                                                  --------------------------------------------
      Net income (loss)                                   $ 17,307      $  3,791      $ (2,448)
                                                  ============================================

Earnings per common share:
      Income before extraordinary item                    $   5.21      $   1.14      $   1.80
      Extraordinary loss                                         -             -         (2.54)
                                                  --------------------------------------------
      Net income (loss)                                   $   5.21      $   1.14      $  (0.74)
                                                  ============================================
</TABLE>

See accompanying notes to consolidated financial statements.

                                       20
<PAGE>

                   Williams Scotsman, Inc. and Subsidiaries

          Consolidated Statements of Changes in Stockholder's Equity



<TABLE>
<CAPTION>
                                                                Additional      Retained
                                         Common Stock            Paid-in        Earnings
                                     Shares        Amount        Capital        (Deficit)       Total
                                ------------------------------------------------------------------------
                                                              (In Thousands)
<S>                               <C>           <C>           <C>             <C>            <C>
Balance at December 31, 1996             3,320           $33        $ 56,844     $  12,756     $  69,633
Dividends to parent - $53.84
 per share                                   -             -               -      (178,749)     (178,749)
Net loss                                     -             -               -        (2,448)       (2,448)
                                ------------------------------------------------------------------------
Balance at December 31, 1997             3,320           $33        $ 56,844     $(168,441)    $(111,564)
Additional capital investment                -             -          64,620             -        64,620
Appreciation in value of stock
 options                                     -             -           2,725             -         2,725
Dividends to parent- $6.88 per
 share                                       -             -               -       (22,830)      (22,830)
Net income                                   -             -               -         3,791         3,791
                                ------------------------------------------------------------------------
Balance at December 31, 1998             3,320           $33        $124,189     $(187,480)    $ (63,258)
Appreciation in value of stock
 options                                     -             -           1,899             -         1,899
Dividends to parent- $.02 per
 share                                       -             -               -           (55)          (55)

Net income                                   -             -               -        17,307        17,307
                                ------------------------------------------------------------------------
Balance at December 31, 1999             3,320           $33        $126,088     $(170,228)    $ (44,107)
                                ========================================================================
</TABLE>


See accompanying notes to consolidated financial statements.

                                       21
<PAGE>

                   Williams Scotsman, Inc. and Subsidiaries

                     Consolidated Statements of Cash Flows

<TABLE>
<CAPTION>
                                                              Year ended December 31
                                                        1999           1998           1997
                                                  --------------------------------------------
                                                                  (In Thousands)
<S>                                                 <C>            <C>            <C>
Cash flows from  operating activities
Net income (loss)                                      $  17,307      $   3,791       $ (2,448)
Adjustments to reconcile net income to net cash
 provided by operating activities:
   Depreciation and amortization                          55,332         41,085         36,047
   Provision for bad debts                                 3,756          2,329          2,370
   Deferred income tax (benefit) expense                  13,837          8,618         (1,456)
   Non-cash option compensation expense                    1,899          2,725              -
   Provision for deferred compensation                         -              -            367
   Gain on sale of rental equipment                       (5,133)        (3,730)        (3,521)
   Increase in net trade accounts receivable             (18,058)       (10,918)        (4,762)
   Increase in other assets                                  (10)        (1,270)        (6,112)
   Increase (decrease) in accrued expenses                 2,873           (450)         4,644
   Extraordinary loss on extinguishment of debt                -              -         13,719
   Other                                                     535          1,438         (6,345)
                                                  --------------------------------------------
    Net cash provided by operating activities             72,338         43,618         32,503
                                                  --------------------------------------------

Cash flows from investing activities
Rental equipment additions                              (115,024)      (119,288)       (87,403)
Proceeds from sales of rental equipment                   22,369         15,530         13,120
Acquisition of businesses, net of cash acquired          (36,208)      (272,721)             -
Purchase of property and equipment, net                  (13,860)       (13,944)       (10,902)
Redemption of certificates of deposit                          -             13              -
                                                  --------------------------------------------
    Net cash used in investing activities              $(142,723)     $(390,410)      $(85,185)
                                                  ============================================
</TABLE>

                                       22
<PAGE>

                   Williams Scotsman, Inc. and Subsidiaries

               Consolidated Statements of Cash Flows (continued)



<TABLE>
<CAPTION>
                                                                 Year ended December 31
                                                           1999           1998           1997
                                                     --------------------------------------------
                                                                     (In Thousands)
<S>                                                    <C>            <C>            <C>
Cash flows from financing activities
Proceeds from long-term debt                              $ 483,525      $ 608,492      $ 797,084
Repayment of long-term debt                                (413,149)      (296,349)      (532,533)
Increase in deferred financing costs                            (91)        (6,639)       (24,247)
Equity contribution                                               -         64,620              -
Cash dividends paid                                             (55)       (22,830)      (178,749)
Premium paid on extinguishment of debt                            -              -         (8,917)
                                                     --------------------------------------------
     Net cash provided by financing activities               70,230        347,294         52,638
                                                     --------------------------------------------
Net (decrease) increase in cash                                (155)           502            (44)

Cash at beginning of period                                     796            294            338
                                                     --------------------------------------------
Cash at end of period                                     $     641      $     796      $     294
                                                     ============================================

Supplemental cash flow information:
Cash paid (refunds received) for income taxes             $     (10)     $     523      $     313
                                                     ============================================
Cash paid for interest                                    $  76,920      $  59,904      $  36,178
                                                     ============================================
</TABLE>


See accompanying notes to consolidated financial statements.

                                       23
<PAGE>

                   Williams Scotsman, Inc. and Subsidiaries

                  Notes to Consolidated Financial Statements

               (Dollars in thousands, except per share amounts)


1.  Organization and Basis of Presentation

Williams Scotsman, Inc. (the Company) is a wholly-owned subsidiary of Scotsman
Holdings, Inc. (Holdings), a corporation which was organized in November 1993
for the purpose of acquiring the Company.  The Company's operations include two
wholly owned subsidiaries, Willscot Equipment, LLC (Willscot) and Williams
Scotsman of Canada, Inc., whose operations have not been significant to date.
Willscot, a special purpose subsidiary, was formed in May 1997 and is a
guarantor of the Company's credit facility and acts as an unconditional and
joint and several subordinated guarantor of the 9.875% senior notes.  The
operations of Willscot are limited to the leasing of its mobile office units to
the Company under a master lease and issuing the guarantee.

The operations of the Company consist primarily of the leasing and sale of
mobile offices and storage products (equipment) and their delivery and
installation.

Acquisition of Evergreen Mobile Company

On February 1, 1999, the Company acquired all of the outstanding stock of
Evergreen Mobile Company, a privately held Washington corporation ("Evergreen"),
in a transaction accounted for under the purchase method of accounting.  Total
consideration for the acquisition of Evergreen was $36,208, including the
repayment of existing indebtedness of Evergreen.  The purchase price paid was
allocated to the net assets acquired of $19,686 with the excess of $16,522
representing goodwill and other intangible assets.  The purchase price
allocation was based upon the estimates of the fair value of the net assets
acquired.  These estimates may vary from actual amounts ultimately recorded.
The acquisition was financed with borrowings under the Company's amended credit
facility.

Acquisition of Space Master International, Inc.

On September 1, 1998, the Company acquired all of the outstanding stock of Space
Master International, Inc., a privately held Georgia corporation ("SMI"), in a
transaction accounted for under the purchase method of accounting.  Total
consideration for the acquisition of SMI was $272,721, including the repayment
of existing indebtedness of SMI.  The purchase price paid was allocated to the
net assets acquired of $111,568 with the excess of $161,153 representing
goodwill and other intangible assets.  The purchase price allocation was based
upon estimates of the fair value of the net assets acquired.  The acquisition
was financed in part with additional borrowings under the Company's amended
credit facility and in part with equity contributed by Scotsman Holdings, Inc.

                                       24
<PAGE>

                    Williams Scotsman, Inc. and Subsidiaries

            Notes to Consolidated Financial Statements (continued)



1.  Organization and Basis of Presentation (continued)

Acquisition of Space Master International, Inc. (continued)

The pro forma unaudited results of operations for the years ended December 31,
1998 and 1997, assuming consummation of the Acquisition as of January 1, 1997
are as follows:


                                                           1998         1997
                                                     -------------------------

     Total revenue                                        $345,609    $325,490
     Income before extraordinary item                        3,204       5,292
     Net income (loss)                                       3,204      (3,135)

     Net income (loss) per basic share                    $    .96    $   (.94)


Recapitalization

In 1997, pursuant to a recapitalization agreement, Holdings (i) repurchased
3,210,679 shares of its outstanding common stock for an aggregate of
approximately $293,777 in cash and approximately $21,834 in promissory notes due
January 1998 and (ii) issued 1,475,410 shares of common stock for an aggregate
of approximately $135,000 in cash. Such amounts have not been restated to
reflect the 3-for-1 stock split granted by Holdings in December, 1997. In
related transactions, (i) Holdings purchased outstanding notes ($194,252
aggregate principal amount) for approximately $212,454, including accrued
interest and fees, and (ii) the Company repaid all of its outstanding
indebtedness ($119,017) under its prior credit facility. In conjunction with the
debt extinguishment, the Company recognized an extraordinary loss of $13,719.

In connection with the recapitalization, (i) the Company accelerated the payment
of deferred compensation under its long term incentive plan, (ii) all
outstanding stock options under Holdings' employee stock option plan vested and
became immediately exercisable and (iii) the Company canceled a portion of the
outstanding stock options.  Accordingly, the Company recognized $5,105 of
recapitalization expenses including $2,489 in connection with the acceleration
of deferred compensation and $2,616 in connection with the cancellation of the
stock options.

In order to finance the recapitalization, the Company issued $400,000 in notes
and entered into a $300,000 revolving bank facility.  The Company paid a
dividend of $178,749 to Holdings to pay recapitalization expenses, to repurchase
common stock and to purchase certain notes.

                                       25
<PAGE>

                   Williams Scotsman, Inc. and Subsidiaries

            Notes to Consolidated Financial Statements (continued)



2.  Summary of Significant Accounting Policies

The accompanying consolidated financial statements include the accounts of the
Company and its wholly owned subsidiaries.  Significant intercompany accounts
and transactions have been eliminated in consolidation.

(a)  Use of Estimates

     The preparation of the financial statements in conformity with generally
     accepted accounting principles requires management to make estimates and
     assumptions that affect the amounts reported in the financial statements
     and accompanying notes. Actual results could differ from these estimates.

(b)  Leasing Operations

     Equipment is leased generally under operating leases and, occasionally,
     under sales-type lease arrangements. Operating lease terms generally range
     from 3 months to 60 months, and contractually averaged approximately 12
     months at December 31, 1999. Rents billed in advance are initially deferred
     and recognized as revenue over the term of the operating leases. Rental
     equipment is depreciated by the straight-line method using an estimated
     economic useful life of 10 to 20 years and an estimated residual value of
     50%.

     Effective October 1, 1997, the Company changed its estimated residual value
     from 20% to 50% to better reflect the estimated residual value of the
     equipment. The effect of this change in estimate is a decrease in
     depreciation expense of approximately $2,800, and an increase in net income
     of approximately $1,826, or $0.55 per share, (net of the related tax
     expense) for the year ended December 31, 1997.

     Costs of improvements and betterments are capitalized, whereas costs of
     replacement items, repairs and maintenance are expensed as incurred. Costs
     incurred for equipment to meet particular lease specifications are
     capitalized and depreciated over the lease term. However, costs aggregating
     less than $1 per unit are generally expensed as incurred.

                                       26
<PAGE>

                   Williams Scotsman, Inc. and Subsidiaries

            Notes to Consolidated Financial Statements (continued)



2.  Summary of Significant Accounting Policies (continued)

(c)  Deferred Financing Costs

     Costs of obtaining long-term debt are amortized using the straight-line
     method over the term of the debt.

(d)  Property and Equipment

     Depreciation is computed by the straight-line method over estimated useful
     lives ranging from 20 to 40 years for buildings and improvements and 3 to
     12 years for furniture and equipment. Maintenance and repairs are charged
     to expense as incurred.

(e)  Goodwill and Other Intangible Assets

     The excess of cost over fair values of net assets acquired in purchase
     transactions has been recorded as goodwill and is being amortized on a
     straight line basis over 20 to 40 years. Other identifiable intangibles
     acquired of $4,360 include assembled workforce, covenant not to compete and
     customer base which are being amortized on a straight line basis over
     periods of 21 to 228 months. As of December 31, 1999, 1998 and 1997,
     accumulated amortization of goodwill and other intangible assets was
     $6,817, $1,600, and $210, respectively.

     On a periodic basis, the Company evaluates the carrying value of its
     intangible assets to determine if the facts and circumstances suggest that
     intangible assets may be impaired. If this review indicates that intangible
     assets may not be recoverable, as determined by the undiscounted cash flow
     of the entity acquired over the remaining amortization period, the
     Company's carrying value of intangible assets is reduced by the estimated
     shortfall of cash flows.

(f)  Income Taxes

     Deferred tax assets and liabilities are recognized for the estimated future
     tax consequences attributable to differences between the financial
     statement carrying amounts of existing assets and liabilities and their
     respective tax bases. Deferred tax assets and liabilities are measured
     using enacted tax rates in effect for the year in which those temporary
     differences are expected to be recovered or settled. The effect on deferred
     tax assets and liabilities of a change in tax rates is recognized in income
     in the period that includes the enactment date.

                                       27
<PAGE>

                   Williams Scotsman, Inc. and Subsidiaries

            Notes to Consolidated Financial Statements (continued)



2.  Summary of Significant Accounting Policies (continued)

(g)  Earnings Per Share

     Earnings per share is computed based on weighted average number of common
     shares outstanding of 3,320,000 shares for 1999, 1998 and 1997.

(h)  Revenue Recognition

     The Company's current revenue recognition policy is to recognize rental
     income in the month earned, sales revenue at the time the units are
     delivered, and all other revenue when related services have been performed.

(i)  Reclassifications

     Certain prior year amounts have been reclassified to conform to current
     year presentation.

3.  Property and Equipment

Property and equipment consist of the following:


                                                  December 31
                                               1999          1998
                                             ------------------------

Land                                            $ 9,562       $ 6,988
Buildings and improvements                       24,369        18,942
Furniture and equipment                          36,406        30,429
                                             ------------------------
                                                 70,337        56,359
Less accumulated depreciation                    16,263         9,680
                                             ------------------------
Net property and equipment                      $54,074       $46,679
                                              =======================

                                       28
<PAGE>

                   Williams Scotsman, Inc. and Subsidiaries

            Notes to Consolidated Financial Statements (continued)



4.  Long-Term Debt

Long-term debt consists of the following:


                                                        December 31
                                                     1999          1998
                                                   ------------------------

Borrowings under revolving credit facility           $456,573      $385,597
Term loan                                              59,250        59,850
9.875% senior notes                                   400,000       400,000
                                                   ------------------------
                                                     $915,823      $845,447
                                                   ========================

In connection with the acquisition of SMI, the loan agreement for the credit
facility was amended to provide for a $540,000 revolving credit facility
maturing May 21, 2002 and a $60,000 term loan maturing May 21, 2005.
Availability under the revolver is based upon a borrowing base calculation,
which was amended effective September 15, 1999, and was $74,047 at December
31,1999.  Interest is payable at a rate of either prime plus 1.0% or the
Eurodollar rate plus 2.25%.  Such rates will vary based upon specified leverage
ratio thresholds.  The weighted average interest rate of the revolver under the
credit agreement was 8.33% at December 31, 1999.  Principal payments due on the
term loan are equal to 1% per year for the first four years, with equal
quarterly installments thereafter. Interest on the term loan is payable at a
rate of either prime plus 2.0% or the Eurodollar rate plus 3.25%.  The weighted
average interest rate of the term loan under the credit agreement was 9.38% at
December 31, 1999.

Borrowings under the credit facility are secured by a first priority lien on and
security interest in the Company's rental equipment, accounts receivable and
property and equipment.  In addition to the restrictions and limitations
described under the note agreement, the credit facility loan agreement requires
compliance with certain financial covenants including capital expenditures,
interest coverage and fleet utilization.

                                       29
<PAGE>

                   Williams Scotsman, Inc. and Subsidiaries

            Notes to Consolidated Financial Statements (continued)



4.  Long Term Debt (continued)

The 9.875% senior notes are due June 1, 2007 with interest payable semi-annually
on June 1 and December 1 of each year.  On or after June 1, 2002, the notes are
redeemable at the option of the Company, at redemption prices of 104.938% and
102.469% during the 12 month periods beginning June 1, 2002 and 2003,
respectively, and 100% thereafter.  Upon the occurrence of a change of control,
the notes may be redeemed as a whole at the option of the Company at a
redemption price of 100% plus the applicable premium as defined in the
agreement.  Additionally, on or prior to June 1, 2000, the Company, at its
option, may redeem up to $160,000 of notes, with the proceeds of a public equity
offering at a redemption price of 109.875%.

The notes are general unsecured obligations of the Company and are subordinated
in right of payment to all secured indebtedness, including the new revolving
credit facility.   Additionally, the notes are guaranteed by Willscot, the
Company's wholly-owned subsidiary. Such guaranty is unconditional and joint and
several. The note agreement limits or restricts the Company's ability to incur
additional indebtedness; make distributions of capital in an amount not to
exceed 50% of accumulated earnings, excluding the recapitalization-related
distribution; dispose of property; incur liens on property and merge with or
acquire other companies.

At December 31, 1999 and 1998, the fair value of long-term debt was
approximately $895,823 and $863,000, respectively, based on the quoted market
price of the senior notes and the book value of the revolving credit facilities,
which are adjustable rate notes.

Letter of credit obligations at December 31, 1999 were $4,448.

                                       30
<PAGE>

                   Williams Scotsman, Inc. and Subsidiaries

            Notes to Consolidated Financial Statements (continued)



5.  Income Taxes

Deferred income taxes related to temporary differences between the tax bases of
assets and liabilities and the respective amounts reported in the financial
statements are summarized as follows:

<TABLE>
<CAPTION>
                                                                        December 31
                                                                     1999          1998
                                                               ---------------------------
<S>                                                              <C>           <C>
Deferred tax liabilities:
Cost basis in excess of tax basis of assets and accelerated
 tax depreciation:
   Rental equipment                                                 $181,786      $155,812
   Property and equipment                                              1,074         1,074
   Other                                                               2,552         1,367
                                                               ---------------------------
           Total deferred tax liabilities                            185,412       158,253
                                                               ---------------------------
 Deferred tax assets:
 Allowance for doubtful accounts                                         408           315
 Rents billed in advance                                               9,279         8,063
 Net operating loss carryovers                                        51,671        48,131
 Alternative minimum tax credit carryovers                             1,759         1,465
 Investment tax credit carryovers                                        860           860
 Other                                                                 5,556         4,282
                                                               ---------------------------
                                                                      69,533        63,116
      Less:  valuation allowance                                      (3,400)       (3,400)
                                                               ---------------------------
      Total deferred tax assets                                       66,133        59,716
                                                               ===========================
Net deferred tax liabilities                                        $119,279      $ 98,537
                                                               ===========================
</TABLE>

At December 31, 1999, the Company had net operating loss carryovers available
for federal income tax purposes of $125,141 (net of related valuation
allowance), of which $80,186 (net of related valuation allowance) relates to
pre-recapitalization loss carryovers that are subject to certain limitations
under the Internal Revenue Code. These net operating loss carryovers and
investment tax credit carryovers of approximately $860 expire at various dates
from 2003 to 2019.  Also, alternative minimum tax credit carryovers of
approximately $1,759 are available without expiration limitations. During 1998,
the Company recorded a charge to income tax expense of $3,400, relating to the
establishment of a deferred tax asset valuation allowance as a result of a
change in management's tax planning strategies associated with the
recoverability of certain net operating loss carryforwards.

                                       31
<PAGE>

                   Williams Scotsman, Inc. and Subsidiaries

            Notes to Consolidated Financial Statements (continued)



5.  Income Taxes (continued)

The income tax expense (benefit) consists of the following:

<TABLE>
<CAPTION>
                                                            Years ended December 31
                                                        1999         1998          1997
                                                   ---------------------------------------
<S>                                                  <C>          <C>          <C>
Current                                                  $   876       $  150      $   150
Deferred                                                  13,837        8,618       (1,456)
                                                   ---------------------------------------
                                                         $14,713       $8,768      $(1,306)
                                                   =======================================

Federal                                                  $12,615       $7,518      $(1,325)
State                                                      2,098        1,250           19
                                                   ---------------------------------------
                                                         $14,713       $8,768      $(1,306)
                                                   =======================================
</TABLE>

The provision for income taxes is reconciled to the amount computed by applying
the Federal corporate tax rate of 35% to income before income taxes as follows:

<TABLE>
<CAPTION>
                                                             Years ended December 31
                                                        1999          1998          1997
                                                   ----------------------------------------
<S>                                                  <C>          <C>           <C>
Income tax at statutory rate                             $11,207       $4,396       $(1,314)
State income taxes, net of federal tax benefit             1,144          449            12
Amortization of goodwill and other intangible
 assets                                                    1,838          567             -
Increase in valuation allowance                                -        3,400             -
Other                                                        524          (44)           (4)
                                                   ----------------------------------------
                                                         $14,713       $8,768       $(1,306)
                                                   ========================================
</TABLE>

                                       32
<PAGE>

                   Williams Scotsman, Inc. and Subsidiaries

            Notes to Consolidated Financial Statements (continued)



6.  Commitments

The Company is obligated under noncancelable operating leases of certain
equipment, vehicles and parcels of land.  At December 31, 1999 approximate
future minimum rental payments are as follows:


     2000                                                     $ 3,878
     2001                                                       3,266
     2002                                                       2,175
     2003                                                       1,462
     2004                                                         981
     Thereafter                                                 2,764
                                                        -------------
                                                              $14,526
                                                        =============

Rent expense was $7,918 in 1999, $5,947 in 1998, and $4,231 in 1997.

7.  Employee Benefit Plans

The Company has adopted a defined contribution plan (the 401(k) Plan) which is
intended to satisfy the tax qualification requirements of Sections 401(a),
401(k), and 401(m) of the Internal Revenue Code of 1986 (the Code).  The 401(k)
Plan covers substantially all employees and permits participants to contribute
the lesser of (i) 15% of their annual compensation from the Company or (ii) the
dollar limit described in Section 402(g) of the Code ($10,000 in 1999).  All
amounts deferred under this salary reduction feature are fully vested.

The 401(k) Plan has a "matching" contribution feature under which the Company
may contribute a percentage of the amount deferred by each participant.  Such
percentage, if any, is determined by the Board of Directors at their discretion.
The Plan also has a "profit sharing" feature, under which the Company may
contribute, at its discretion, an additional amount allocable to the accounts of
active participants meeting the aforementioned eligibility requirements.
Contributions made by the Company on behalf of a 401(k) Plan participant vest
ratably during the first five years of employment and 100% thereafter. Matching
contributions by the Company to the 401(k) Plan were approximately $395 in 1999,
$329 in 1998, and $309 in 1997. No contributions have been made by the Company
under the profit sharing feature.

                                       33
<PAGE>

                   Williams Scotsman, Inc. and Subsidiaries

            Notes to Consolidated Financial Statements (continued)



7.  Employee Benefit Plans (continued)

During 1997 the Company adopted a Deferred Compensation Plan for Executives
which is meant to be an unfunded deferred compensation plan maintained for a
select group of management within the meaning of Sections 201(2), 301(a)(3) and
401(a)(1) of the Employee Retirement Income Security Act of 1974.  This plan
allows key employees to defer a specified amount of their compensation until
termination or upon the occurrence of other specified events.  Such amounts are
placed in the investment vehicles of the employee's choice.  As of December 31,
1999, the total amount deferred under this plan, including earnings, was $2,700.

In December 1997, the Company adopted a stock option plan for certain key
employees. The plan was subsequently amended and restated in 1998. Under the
plan, as amended, up to 479,500 options to purchase Holdings' outstanding common
stock may be granted.  The options are granted with an exercise price equal to
the fair value of the shares as of the date of grant.  Fifty percent of the
options granted vest ratably over five years, and fifty percent vest ratably
based on the Company meeting certain financial goals over the next five years.
All options expire 10 years from the date of grant.  The Company is accounting
for the options using the variable plan accounting.  Under this plan, 29,800 and
112,550 options were granted in 1999 and 1998, respectively.  For those options
in which both the grant date and the measurement date were known in 1999, the
Company recognized $1,899 of compensation expense, and $2,725 was recognized in
1998.  No compensation expense was recognized in 1997.

The Company also adopted a stock option plan for certain key employees in March
1995. The options were granted with an exercise price equal to the fair value of
the shares as of the date of grant.  The Company accounted for stock option
grants under this plan in accordance with APB Opinion No. 25, "Accounting for
Stock Issued to Employees", and, accordingly, recognizes no compensation expense
for the stock option grants.  All options outstanding under this plan became
fully vested in conjunction with the recapitalization.  In addition, employees
with these options were given the opportunity to cancel their options at a price
of $30.50 per option.  As a result, 128,400 of the outstanding options were
canceled in 1997.  The difference between the $30.50 and the option exercise
price has been recorded as recapitalization expense in the consolidated
statement of operations.

                                       34
<PAGE>

                   Williams Scotsman, Inc. and Subsidiaries

            Notes to Consolidated Financial Statements (continued)



7.  Employee Benefit Plans (continued)

Pro forma information regarding net income and earnings per share is required by
Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation," and has been determined as if the Company had accounted for its
employee stock options under the minimum value method of that Statement.  The
minimum value for these options was estimated at the date of grant by
calculating the excess of the fair value of the stock at the date of grant over
the present value of both the exercise price and the  expected  dividend
payments, each discounted at the risk free rate, over the expected exercise life
of the option.  The following weighted average assumptions were used for 1999,
1998 and 1997: risk-free interest rate of 5.6%, 5.5%, and 6%, respectively;
weighted average expected life of the options of 5 years; and no dividends.

For purposes of pro forma disclosures, the estimated minimum value of the
options is amortized to expense over the options' vesting period.  Note that the
effects of applying SFAS 123 for pro forma disclosure in the current year are
not necessarily representative of the effects on pro forma net income for future
years.  The Company's pro forma information follows:


                                               1999        1998         1997
                                            -----------------------------------

Pro forma net income (loss)                  $16,946      $3,178      $(4,360)
Pro forma earnings (loss) per share          $  5.10      $ 0.96      $ (1.31)

                                       35
<PAGE>

                   Williams Scotsman, Inc. and Subsidiaries

            Notes to Consolidated Financial Statements (continued)


7.  Employee Benefit Plans (continued)


A summary of stock option activity and related information for the years ended
December 31 follows:

<TABLE>
<CAPTION>
                                          1999                          1998                         1997
                                --------------------------------------------------------------------------------------
                                                 Weighted                      Weighted                     Weighted
                                                  Average                       Average                      Average
                                                 Exercise                      Exercise                     Exercise
                                   Options         Price       Options           Price      Options          Price
                                --------------------------------------------------------------------------------------
<S>                             <C>              <C>          <C>              <C>          <C>             <C>
Beginning balance                  1,099,640     $ 22.12        998,790        $ 19.14       453,150         $ 8.37
Granted                               29,800       50.67        112,550          44.12       675,540          24.73
Canceled                                   -           -              -              -      (128,400)         10.65
Forfeited                            (21,600)     (32.07)       (11,700)        (21.01)       (1,500)         18.39
                                --------------------------------------------------------------------------------------
Ending balance                     1,107,840       22.68      1,099,640        $ 22.12       998,790         $19.14

Exercisable at end of year           950,165       19.94        949,525        $ 19.64       716,610         $14.64

Weighted average minimum
 value of options granted
 during year                                     $ 12.08                       $ 10.36                       $ 6.25
</TABLE>

Exercise prices for options outstanding as of December 31, 1999 range from $4.59
to $50.67. The weighted-average remaining contractual life of those options is
7.19 years.

Prior to the recapitalization (described in Note 1), the Company had an
Incentive Compensation Plan (the Plan) that covered approximately 40 management
members. In connection with the Plan, the Company recorded $2,925 of management
incentive compensation in 1997, a portion of which was deferred. In 1997, as
part of the recapitalization, the Company accelerated the payment of deferred
compensation in the amount of $6,225 and the Plan was dissolved.

                                       36
<PAGE>

                    Williams Scotsman, Inc. and Subsidiaries

             Notes to Consolidated Financial Statements (continued)


8.  Summarized Financial Information of Subsidiaries

The 9.875% senior notes issued by the Company are guaranteed by its wholly owned
subsidiary, Willscot. See Note 2 for a description of the operations of this
subsidiary. Additionally, Willscot has entered into a management agreement with
the Company whereby it pays a fee to the Company in an amount equal to the
rental and other income (net of depreciation expense) it earns from the Company.
Therefore, Willscot earns no net income. Full separate financial statements of
the guarantor subsidiaries have not been included because management has
determined they are not material to investors. Summarized financial statements
of those subsidiaries as of December 31, 1999 and 1998 and for the years ended
December 31, 1999, 1998 and 1997 are as follows:

                                                    1999           1998
                                                  -----------------------
          Balance Sheet
          -------------
          Assets:
            Rental equipment, at cost             $622,526       $543,561
            Less accumulated depreciation           78,054         60,320
                                                  -----------------------
           Net rental equipment                    544,472        483,241

            Other assets                             4,894          4,285
                                                  -----------------------
            Total assets                          $549,366       $487,526
                                                  =======================


          Total liabilities and stockholder's
            equity
                                                  $549,366       $487,526
                                                  =======================

                                                    1999         1998      1997
                                                  ------------------------------
          Statement of Operations
          -----------------------
           Revenue:
            Leasing                               $ 60,018   $ 41,428   $ 21,932
            Other                                      458        289        509
                                                  ------------------------------
                                                    60,476     41,717     22,441
           Expenses:
            Selling, general and administrative     16,794     21,100     11,999
            Depreciation                            20,075     14,312      9,895
            Interest                                23,607      6,305        547
                                                  ------------------------------

                                                    60,476     41,717     22,441
                                                  ------------------------------
          Net income                              $      -   $      -   $      -
                                                  ==============================

                                       37
<PAGE>

                   Williams Scotsman, Inc. and Subsidiaries

            Notes to Consolidated Financial Statements (continued)


9.  Related Party Transactions

During 1999, the Company paid dividends of $55 to Holdings primarily to fund
normal operating expenses. In 1998, the Company paid dividends of $22,830 to
Holdings primarily to facilitate Holdings repaying a promissory note including
accrued interest, which arose in connection with the recapitalization agreement.
The Company obtained additional borrowings under its credit facility to fund the
dividends.

                                       38
<PAGE>

Item 9.   Changes in and Disagreements With Accountants on Accounting and
          Financial Disclosure

     None.

                                       39
<PAGE>

PART III

Item 10.  Directors and Executive Officers of the Registrant

Directors and Officers

     The Company's directors and executive officers are as follows:

<TABLE>
<CAPTION>
Name                               Age                      Position
----                               ---                      --------
<S>                                <C>     <C>
Barry P.  Gossett................   59     Director and Chairman Emeritus of the Board
Gerard E. Holthaus...............   50     President and Chief Executive Officer; Director
                                           and Chairman of the Board
James N. Alexander...............   40     Director
Daniel L. Doctoroff..............   41     Director
Michael F. Finley................   37     Director
Robert B. Henske.................   38     Director
Brian Kwait......................   38     Director
James L. Singleton...............   44     Director
David P. Spalding................   45     Director
J. Collier Beall.................   52     Senior Vice President and Southern Division Manager
Joseph F. Donegan................   49     Senior Vice President and Northern Division Manager
Gerard E. Keefe..................   43     Senior Vice President and Chief Financial Officer
William G. Gessner...............   41     Vice President-Information Services
Katherine K. Giannelli...........   39     Vice President and Controller
Robert W. Hansen.................   43     Vice President and Western Regional Manager
William C. LeBuhn................   37     Vice President-Marketing and Human Resources
John B. Ross.....................   51     Vice President and Corporate Counsel
William J. Wyatt.................   60     Vice President-Marketing and Sales Support
</TABLE>

_____________

     The directors are elected annually and serve until their successors are
duly elected and qualified. No director of the Company receives any fee for
attendance at Board of Directors meetings or meetings of Committees of the Board
of Directors. Outside directors are reimbursed for their expenses for any
meeting attended.

     Executive officers of the Company are elected by the Board of Directors and
serve at the discretion of the Board of Directors.

     Mr. Gossett is Chairman Emeritus of the Board. He is currently a partner in
Pascal Turner Partners, a real estate investment firm. He formerly served as
Chairman of the Board from October 1995 to April 1999 and Chief Executive
Officer of the Company from October 1995 to April 1997. Prior to this, he served
as President and Chief Executive Officer of the Company from 1990 to October
1995. Mr. Gossett has been a director and employee of the Company or its
predecessor for

                                       40
<PAGE>

over thirty years. Before joining the Company, Mr. Gossett was a partner at
Buchanan and Company, a Washington, D.C. accounting firm. Mr. Gossett was one of
the founders of the Modular Building Institute, an industry trade group which
represents member companies.

     Mr. Holthaus was elected Chairman of the Board in April 1999 and has been
President and Chief Executive Officer of the Company since April 1997. He has
been with the Company since June 1994, and served as President and Chief
Operating Officer from October 1995 to April 1997 and was Executive Vice
President and Chief Financial Officer prior thereto. He has served as a director
since June 1994. Before joining the Company, Mr. Holthaus served as Senior Vice
President of MNC Financial, Inc. from April 1988 to June 1994. From 1971 to
1988, Mr. Holthaus was associated with the accounting firm of Ernst and Young
(Baltimore), where he served as a partner from 1982 to 1988. He also serves on
the Board of Directors of Grove Worldwide, LLC, The Baltimore Life Companies and
Avatech Solutions.

     Mr. Alexander was elected as a director of the Company in May 1997. Mr.
Alexander has been a Partner of Oak Hill Capital Management, Inc., which
provides investment advisory services to Oak Hill Capital Partners, L.P., since
February 1999. He has been Chief Financial Officer of Keystone since January
2000 and a Vice President of Keystone since August 1995. Prior to joining
Keystone, he worked at Goldman, Sachs & Co. where he was a Vice President in the
Fixed Income Division from August 1993 to July 1995. Mr. Alexander is also a
director FEP Capital Holdings, L.P., Oak Hill Strategic Partners, L.P., 230 Park
Investors, L.L.C. and 237 Park Investors, L. L. C.

     Mr. Doctoroff was elected as a director of the Company in May 1997. Mr.
Doctoroff has been a Managing Partner of Oak Hill Capital Management, Inc.,
which provides investment advisory services to Oak Hill Capital Partners, L.P.,
since February 1999. Mr. Doctoroff has been a Vice President of Keystone since
October 1992, a Managing Director of Oak Hill Partners, Inc. and its
predecessor, which provides investment advisory services to Acadia Partners,
L.P., since August 1987, Vice President and Director of Acadia MGP, Inc., a
corporate general partner of Acadia since March 1992, and a managing partner of
Insurance Partners Advisors, L.P., which provides investment advisory services
to Insurance Partners, L.P., since February 1994. Mr. Doctoroff is also a
director of American Capital Access Corporation, Bell & Howell Company, Meristar
Hotels & Resorts, Inc., Meristar Hospitality Corp. and Epix, Inc.

     Mr. Finley was elected as a director of the Company in May 1997. Mr. Finley
has been a Managing Director of Cypress since 1998 and has been a member of
Cypress since its formation in April 1994. Prior to joining Cypress, he was a
Vice President in the Merchant Banking Group at Lehman Brothers Inc.

     Mr. Henske was elected as a director of the Company in May 1997. Mr. Henske
has been a Partner of Oak Hill Capital Management, Inc., which provides
investment advisory services to Oak Hill Capital Partners, L.P., since February
1999, and a Vice President of Keystone since January

                                       41
<PAGE>

1997. From January 1996 to December 1996, he was Executive Vice President and
Chief Financial Officer and a director of American Savings Bank, F.A., a
federally-chartered thrift. Mr. Henske is also a director of Grove Worldwide,
LLC and Reliant Building Products, Inc.

     Mr. Kwait was elected as a director of the Company in September 1998 and
also served in that capacity from December 1993 through May 1997. Mr. Kwait is a
Member and Managing Principal of Odyssey Investment Partners, LLC since April
1997 and was a Principal of Odyssey Partners, LP from August 1989 to March 1997.
Mr. Kwait is also a director of Payroll Transfers, Inc., PF.Net Holdings, LTD
and IWO Holdings, Inc.

     Mr. Singleton was elected as a director of the Company in May 1997. Mr.
Singleton has been a Vice Chairman of Cypress since its formation in April 1994.
Prior to joining Cypress, he was a Managing Director in the Merchant Banking
Group at Lehman Brothers Inc. Mr. Singleton is also a director of Cinemark USA,
Inc., ClubCorp, Inc., Danka Business Systems PLC, Genesis Health Ventures, Inc.,
L.P. Thebault Company and WESCO International, Inc.

     Mr. Spalding was elected as a director of the Company in May 1997. Mr.
Spalding has been Vice Chairman of Cypress since its formation in April 1994.
Prior to joining Cypress, he was a Managing Director in the Merchant Banking
Group at Lehman Brothers Inc. Mr. Spalding is also a director of AMTROL Inc.,
Frank's Nursery & Crafts, and Lear Corporation.

     Mr. Beall has been Senior Vice President and Southern Division Manager of
the Company since September 1996 and was the Southeast Region Manager prior
thereto. Mr. Beall's responsibilities include the implementation of corporate
policies, attainment of branch profitability, fleet utilization management and
development of personnel. Prior to joining the Company in 1977, Mr. Beall was a
Regional Manager for Modular Sales and Leasing Company based in Georgia.

     Mr. Donegan has been Senior Vice President and Northern Division Manager of
the Company since September 1996 and served as the Northeast Region Manager
prior thereto. Mr. Donegan's responsibilities include the implementation of
corporate policies, attainment of branch profitability, fleet utilization
management and development of personnel. Mr. Donegan has over 20 years of
experience within the industry. From 1991 through May 1994, Mr. Donegan held
similar positions with Space Master Buildings, Kullman Industries and Bennett
Mobile Offices.

     Mr. Keefe has been Senior Vice President and Chief Financial Officer of the
Company since April 1997. He formerly served as Vice President, Fleet and
Finance with responsibilities including overall fleet management and purchasing,
treasury functions, planning and budgeting from February 1995 to April 1997.
Prior to joining the Company, Mr. Keefe was with The Ryland Group, a national
homebuilder headquartered in Columbia, Maryland, from 1993 to 1995. From 1991 to
1993, he was a management consultant serving the manufacturing, distribution and
financial services industries, and from 1977 to 1991, he was with Ernst & Young,
(Baltimore), most recently as a

                                       42
<PAGE>

Senior Manager.

     Mr. Gessner has been Vice President of Information Services since November
1998 and served as Director of Information Services since joining the Company in
July 1996. Mr. Gessner's responsibilities include overall management of the
Company's business information systems and technology initiatives. Prior to
joining the Company, Mr. Gessner was Director of Corporate Information Systems
at ARINC, Incorporated, an engineering services and telecommunications company
in Annapolis, Maryland, from 1988 to 1996.

     Ms. Giannelli has been Vice President and  Controller of the Company  with
responsibilities for the Company's accounting department including regulatory
reporting since 1990.  Prior to joining the Company, Ms. Giannelli was a Senior
Manager of KPMG Peat Marwick in Baltimore, Maryland where she had been employed
from 1982 to 1990.

     Mr. Hansen has been Vice President and Regional Manager with responsibility
for Sales and Operations in 10 Western States since 1994. His duties include
attainment of branch profitability, fleet management, development of personnel
and implementation of corporate policy in his region. Prior to joining the
Company in 1983, Mr. Hansen was General Manager of Duracite Mfg., a cabinetwork
and construction firm in the San Francisco Bay Area.

     Mr. LeBuhn joined Williams Scotsman as the Vice President of Human
Resources in January 1994. In July of 1999, he assumed responsibility for the
Company's marketing initiatives. While still involved in the Human Resource
related programs, Mr. LeBuhn's primary responsibilities now include the overall
strategic marketing plans for Williams Scotsman. Prior to joining the Company,
Mr. LeBuhn was HR Manager for Sherwin-Williams' Eastern Division from 1992 to
January 1994, Director of HR for Consolidated International Insurance Group,
Inc. from 1988 to 1992, and HR Officer for Meridian Bancorp from 1984 - 1988.

     Mr. Ross has been Vice President and Corporate Counsel for the Company
since February 1995. Prior to joining the Company, Mr. Ross was Corporate
Counsel for MNC Leasing Corporation from 1983 to 1991 and Special Assets Counsel
for MNC Financial, Inc. from 1991 to 1993. Prior to joining MNC Leasing
Corporation and during the period from 1993 to 1995, he was engaged in the
private practice of law in both North Carolina and Maryland, respectively.

     Mr. Wyatt has been Vice President, Marketing and Sales Support since 1996.
He was Director of Sales and Marketing for the Company from 1990 to 1996 and was
National Sales Manager from 1988 to 1990. Before joining the Company, Mr. Wyatt
operated W. J. Wyatt and Company, Inc., a consulting firm providing sales
development, market planning, convention and meeting management and publishing
services.

                                       43
<PAGE>

Item 11.

Executive Compensation

                          Summary Compensation Table

     The following table sets forth certain information concerning the
compensation paid or accrued for the last three completed fiscal years of the
five highest paid officers of the Company (the "Named Executive Officers") who
received total compensation in excess of $100,000 during 1999.

<TABLE>
<CAPTION>
                                                                                 Long Term Compensation
                                                                                 ----------------------
                                                                                   Awards       Payouts
                                                                   Annual        ----------    ---------
                                                                Compensation     Securities       LTIP       All Other
                                                             ------------------  Underlying     Payouts    Compensation
                                                       Year  Salary    Bonus     Options(1)       $(2)        (3)
                                                       ----  --------  --------  ----------    ---------   ------------
<S>                                                    <C>   <C>       <C>       <C>           <C>         <C>
Gerard E. Holthaus
President and Chief Executive Officer................  1999  $371,292  $112,500          --           --          9,183
                                                       1998   274,213   105,000      25,000           --          5,125
                                                       1997   241,520    99,750     165,090      910,254          4,875

Joseph F. Donegan
Senior Vice President and Northern Division Manager..  1999   247,387    36,000          --           --          4,149
                                                       1998   199,064    30,000       7,000           --          3,346
                                                       1997   189,734    26,250      65,000      360,854          3,000

J. Collier Beall
Senior Vice President and Southern Division Manager..  1999   244,432    36,000          --           --          2,270
                                                       1998   216,502    30,000       7,000           --          3,481
                                                       1997   212,610    26,250      65,000      377,750          3,250

Gerard E. Keefe
Senior Vice President and Chief Financial Officer....  1999   149,387    45,000          --           --          3,825
                                                       1998   132,314    40,000       7,000           --          3,425
                                                       1997   117,025    36,750      25,000      330,442          3,250

Robert W. Hansen
Vice President and Regional Manager..................  1999   143,880    15,300          --           --          2,305
                                                       1998   147,580    16,000       2,500           --          2,240
                                                       1997   157,130    15,750      25,000      256,788          2,125
 </TABLE>

(1)  Represents options granted to purchase shares of Holdings pursuant to the
     1997 Plan for options granted in 1998 and the 1997 and 1994 Plans for
     options granted in 1997.

(2)  Represents accelerated payments made under the Long Term Incentive Plan
     which was terminated in May 1997 as a result of the Recapitalization.

(3)  Represents employer match under the 401(k) plan and a disability insurance
     premium of $4,058 for Mr. Holthaus.

                                       44
<PAGE>

              Aggregated Option Exercises in Last Fiscal Year and
                       Fiscal Year-End Option Values (1)

The following table contains information covering the number and value of
unexercised stock options held by the Named Executive Officers at the end of the
fiscal year.  No stock options were granted to the Named Executive Officers in
1999.

<TABLE>
<CAPTION>
                                   Number of Securities
                                  Underlying Unexercised          Value of Unexercised
                                        Options at                In-the-Money Options
                                   Fiscal Year End (#)           At Fiscal Year End ($)
Name                          Exercisable/Unexercisable (2)   Exercisable/Unexercisable(3)
-----------                   ------------------------------  ----------------------------
<S>                           <C>                             <C>
Gerard E. Holthaus.........             234,240/60,250             7,836,375/862,268

Joseph F. Donegan..........              85,450/22,400             2,823,043/352,975

J. Collier Beall...........              86,500/22,400             2,871,427/352,975

Gerard E. Keefe............              75,000/19,900             2,421,312/302,550

Robert W. Hansen...........               41,600/6,750             1,470,668/100,850
</TABLE>

_________________

(1)  No options were exercised by the Named Executive Officers during fiscal
     1999.
(2)  For options granted under the 1997 Plan, 50% vest ratably over five years
     and 50% vest ratably based on the Company meeting certain financial targets
     over the next five years. All other options became fully vested in
     conjunction with the Recapitalization.
(3)  Based on the estimated fair market value at December 31, 1999.

                                       45
<PAGE>

Scotsman Holdings, Inc. 1994 Employee Stock Option Plan

     In March 1995, a stock option plan was adopted for certain key employees.
All options outstanding under this plan became fully vested in conjunction with
the Recapitalization. The options are exercisable for a period of 10 years from
date of grant.

Scotsman Holdings, Inc. Amended and Restated 1997 Employee Stock Option Plan

     In December 1997, a stock option plan was adopted for certain key
employees, which was amended and restated in December 1998. Under the plan, up
to 479,500 options to purchase Holdings' common stock may be granted. In 1999,
29,800 options were granted under this plan at an offer price of $50.67 per
share. Fifty percent of the options granted vest ratably over five years and
fifty percent vest ratably based on the Company meeting certain financial
targets over the next five years. All options expire 10 years from the date of
grant.

401(k)/Defined Contribution Plan

     On May 1, 1993, the Company adopted a defined contribution plan (the
"401(k) Plan") which is intended to satisfy the tax qualification requirements
of Sections 401(a), 401(k), and 401(m) of the Internal Revenue Code of 1986, as
amended (the "Code"). Each employee of the Company who completes one hour of
service with the Company is eligible to participate in the salary reduction
feature of the 401(k) Plan. The 401(k) Plan permits participants to contribute
the lesser of (i) 15% of their annual compensation from the Company or (ii) the
dollar limit described in Section 402(g) of the Code ($10,000 in 1999). All
amounts deferred under the 401(k) Plan's salary reduction feature by a
participant are fully vested.

     The 401(k) Plan has a "matching" contribution feature under which the
Company may contribute a percentage of the amount deferred by each participant
who makes salary reduction deferrals to the 401(k) Plan, has been employed for
12 consecutive months by the Company, completes 1,000 hours of service with the
Company during the Plan year and is employed by the Company on the last day of
the year. This percentage, if any, is determined by the Board of Directors at
their discretion and is communicated to 401(k) Plan participants during the year
for which the matching contribution will be made. Matching contributions made on
behalf of a 401(k) Plan participant are subject to a deferred vesting schedule
based on the number of years a participant has been employed by the Company. A
participant becomes 20%, 40%, 60%, 80% and 100% vested in the matching
contributions made to the 401(k) Plan on his or her behalf after completion of
1, 2, 3, 4 and 5 years of service with the Company, respectively.

     The 401(k) Plan also has a "profit sharing" feature, under which the
Company may contribute, in its discretion, an additional amount which is
allocated to the accounts of active participants who have

                                       46
<PAGE>

been employed for 12 consecutive months by the Company, who have completed 1,000
hours of service during the Plan Year and who are employed on the last day of
the year, based on such participants' compensation for the year. The vesting
schedule for these contributions is identical to that for matching
contributions.

     A participant's 401(k) Plan benefits generally are payable upon the
participant's death, disability, retirement, or other termination of employment.
Payments under the 401(k) Plan are made in a lump sum.

     In 1999, the Company made matching contributions to the 401(k) Plan
participants in an aggregate amount of $394,694.

Deferred Compensation Plan for Executives

     During 1997, the Company adopted a deferred compensation plan for
executives (the "Plan") which is meant to be an unfunded deferred compensation
plan maintained for a select group of management within the meaning of Sections
201(2), 301(a)(3) and 401 (a)(1) of the Employee Retirement Income Security Act
of 1974. The Plan allows key employees to defer a specified amount of their
compensation until termination or upon the occurrence of other specified events.
Such amounts are placed in the investment vehicles of the employee's choice. As
of December 31, 1999, the total amount deferred under this Plan, including
earnings, was $2,699,629.

Compensation Committee Interlocks and Insider Participation

     During 1999, the Compensation Committee was comprised of two outside
directors: Daniel L. Doctoroff and David P. Spalding. No member of the Committee
has any interlocking or insider relationship with the Company which is required
to be reported under the applicable rules and regulations of the Securities and
Exchange Commission.

                                       47
<PAGE>

Item 12.  Security Ownership of Certain Beneficial Owners and Management

     All of the issued and outstanding shares of Common Stock of the Company are
owned by Holdings. The following table sets forth certain information regarding
the beneficial ownership of Holdings' Common Stock by (i) all persons owning of
record or beneficially to the knowledge of the Company 5% or more of the issued
and outstanding Holdings Common Stock, (ii) each director individually, (iii)
each executive officer named in the Summary Compensation Table, and (iv) all
executive officers and directors as a group.

                                                    Shares of
Name                                               Common Stock  Percentage
----                                               ------------  ----------
Cypress Merchant Banking Partners L.P.(1)(2)(3)
  c/o The Cypress Group L.L.C.
  65 East 55th Street
     New York, NY 10022..........................     2,431,523       39.24%

Cypress Offshore Partners L.P.(1)(2)(3)
  Bank of Bermuda (Cayman) Limited
  P.O. Box 513 G.T.
  Third Floor
  British American Tower
  George Town, Grand Cayman
  Cayman Islands, B.W.I..........................       125,939        2.03

Scotsman Partners, L.P.(2)(3)(4)
  201 Main Street
  Fort Worth, TX 76102...........................     2,557,462       41.27

Odyssey Investment Partners Fund, LP(3)(5)
  280 Park Avenue
  New York, NY 10017.............................       716,536       11.56

James N. Alexander(6)............................            --          --
Daniel L. Doctoroff(6)...........................            --          --
Michael F. Finley(7).............................            --          --
Robert B. Henske(6)..............................            --          --
Brian Kwait(8)...................................            --          --
James L. Singleton(7)............................            --          --
David P. Spalding(7).............................            --          --
Barry P. Gossett (3)(9)..........................       124,407        2.01
Gerard E. Holthaus (10)(11)(12)..................       272,340        4.23
Joseph F. Donegan (10)(11)(12)...................        89,050        1.42
J. Collier Beall (10)(11)(12)....................        91,000        1.45
Gerard E. Keefe(10)(11)(12)......................        76,500        1.22
Robert W. Hansen (10)(11)(12)....................        47,750        0.77

All executive officers and directors as a group..       907,072       13.12

                                       48
<PAGE>

(1)  Cypress Merchant Banking Partners L.P. and Cypress Offshore Partners L.P.
     are controlled by The Cypress Group L.L.C. or affiliates thereof. Certain
     executives of The Cypress Group L.L.C., including Messrs. Jeffrey Hughes,
     James Singleton, David Spalding and James Stern, may be deemed to share
     beneficial ownership of the shares shown as beneficially owned by Cypress
     Merchant Banking Partners L.P. and Cypress Offshore Partners L.P. Each of
     such individuals disclaims beneficial ownership of such shares.

(2)  Does not include shares beneficially owned by members of management, as to
     which the Investor Group (as defined herein) has an irrevocable proxy.

(3)  Under the Investor Stockholders Agreement (as defined herein), the Cypress
     Stockholders (as defined herein), Scotsman Partners, L.P., and Odyssey
     Investment Group (as defined herein) have agreed to vote their shares for
     certain nominees for director and other matters and the Cypress
     Stockholders, Scotsman Partners, L.P., Odyssey Investment Group and Mr.
     Gossett have agreed to restrict the transfer of their shares subject to
     certain exceptions. See "Certain Relationships and Related Transactions--
     Investor Stockholders Agreement."

(4)  The shares of Holdings Common Stock beneficially owned by Scotsman
     Partners, L.P. may be deemed to be owned by J. Taylor Crandall, Group 31,
     Inc. ("Group 31") and Arbor Scotsman, L.P. ("AS"). Mr. Crandall is the sole
     stockholder of Group 31, which is the general partner of AS, which, in
     turn, is the general partner of Scotsman Partners, L.P. Group 31 and AS
     disclaim such beneficial ownership. The address of Mr. Crandall, Group 31
     and AS is the same as Scotsman Partners. Mr. Crandall is a Managing Partner
     of Oak Hill Capital Management, Inc.

(5)  Includes 1,461 shares that are beneficially owned by Odyssey Coinvestors,
     LLC, an affiliate of Odyssey Investment Partners, LLC (together, "Odyssey
     Investor Group"). The General Partner of Odyssey Investment Partners Fund,
     LP is Odyssey Capital Partners, LLC a Delaware limited liability company
     (the "General Partner of Odyssey") and the Managing Member of Odyssey
     Coinvestors, LLC is Odyssey Investment Partners, LLC, a Delaware limited
     liability company. Paul D. Barnett, Stephen Berger, William Hopkins, Brian
     Kwait and Muzzi Mirza are Managing Members of Odyssey Capital Partners, LLC
     and Odyssey Investment Partners, LLC, and, therefore, may each be deemed to
     share voting and investment power with respect to 716,536 shares and votes
     deemed to be owned by the General Partner of Odyssey and Odyssey Investment
     Partners, LLC. Each Messrs. Barnett, Berger, Hopkins, Kwait and Mirza
     disclaims beneficial ownership of such shares.

(6)  Such person's address is c/o Scotsman Partners, L.P.

(7)  Such person's address is c/o Cypress Merchant Banking Partners L.P.

                                       49
<PAGE>

(8)  Such person's address is c/o Odyssey Investment Partners Fund, LP.

(9)  Such person's address is c/o Pascal-Turner Partners, 7939 Honeygo Blvd,
     Unit #112, Baltimore, MD 21236.

(10) Such person's address is the address of the Company's principal executive
     offices.

(11) Each member of management is a party to the Stockholders' Agreement whereby
     he or she has agreed to limit the transferability of his or her shares.
     See "Certain Relationships and Related Transactions--Stockholders'
     Agreement."

(12) Includes 234,240, 85,450, 86,500, 75,000, 41,600, and 716,140 shares held
     as options by Messrs. Holthaus, Donegan, Beall, Keefe and Hansen and all
     executive officers as a group, respectively, which are exercisable within
     60 days.

                                       50
<PAGE>

Item 13.  Certain Relationships and Related Transactions

The Recapitalization

     Holdings, Odyssey Investment Group, certain other existing stockholders of
Holdings, certain partnerships affiliated with The Cypress Group L.L.C. and
Scotsman Partners, L.P. are parties to a Recapitalization Agreement dated April
11, 1997 pursuant to which the Recapitalization occurred. See
"Recapitalization".

Stockholders' Agreement

     Cypress Merchant Banking Partners, L.P., Cypress Offshore Partners, L.P.,
Scotsman Partners, L.P. (collectively the "Investor Group"), the Management
Stockholders and Holdings are parties to a Management Stockholders' and
Optionholders' Agreement dated as of September 14, 1998 (the "Stockholders'
Agreement"), which contains certain rights and restrictions with respect to the
transfer of each Management Stockholder's shares of Common Stock. The
Stockholders' Agreement prohibits the transfer of any shares of Common Stock by
Management Stockholders (other than sales required in connection with the
disposition of all shares of Common Stock owned by the Investor Group and its
affiliates) until the earlier of twelve months after an initial public offering
of the equity of Holdings for designated officers (and sixty days after an
initial public offering for non-designated officers) or the day after the
Investor Group and its affiliates have disposed of more than 33-1/3% of the
shares of Common Stock originally acquired by the Investor Group, and
thereafter, the aggregate number of shares which may be transferred by each
Management Stockholder in any calendar year (other than certain required sales)
may not exceed 25% of the number of shares acquired pursuant to the Subscription
Agreement between Holdings and such Management Stockholder plus the number of
any shares acquired pursuant to the exercise of stock purchase options. In
addition, the Stockholders' Agreement restricts the transfer of shares of Common
Stock by each Management Stockholder for a period of five years from the date of
purchase of such shares, except certain permitted transfers and transfers
pursuant to an effective registration statement or in accordance with Rule 144
under the Securities Act. Upon the expiration of such five-year period, subject
to the foregoing restrictions, each Management Stockholder may transfer his
shares after giving to the Investor Group and Holdings, respectively, a right of
first refusal to purchase such shares.

     Each Management Stockholder has the right (and in limited circumstances the
obligation) to sell his shares in connection with certain dispositions of shares
by the Investor Group and the right to cause his shares to be included in
certain registrations of Common Stock on behalf of the Investor Group. In
addition, upon termination of any Management Stockholder's employment, Holdings
may elect to require such Management Stockholder to sell to Holdings all of his
shares.

                                       51
<PAGE>

Investor Stockholders Agreement

     On May 22, 1997, Holdings, certain partnerships affiliated with The Cypress
Group, L.L.C. (the "Cypress Stockholders") and Scotsman Partners, L.P.
(collectively, including their permitted transferees, the "Investor
Stockholders") and Odyssey Investment Group, Barry P. Gossett, BT Investment
Partners, Inc. and certain other stockholders (together with their permitted
transferees and the Investor Stockholders, the "Stockholders") entered into an
investor stockholders agreement, which was subsequently amended on September 1,
1998 (the "Investor Stockholders Agreement").

     Under the terms of the Investor Stockholders Agreement, unless otherwise
agreed to by the Investor Stockholders, the board of directors of Holdings (the
"Board of Directors") will consist of nine directors: three persons nominated by
the Cypress Stockholders, three persons nominated by Scotsman Partners, one
person nominated by Odyssey Investment Group, the Chairman of the Board of
Directors and the President of Holdings. Each of Cypress Stockholders, Scotsman
Partners and Odyssey Investment Group is entitled to remove and replace any or
all of their respective designees on the Board of Directors and each is entitled
to remove the director or directors who are the Chairman of the Board and the
President of Holdings in accordance with the provisions of the Investor
Stockholders Agreement. If the Holdings Common Stock held by either the Cypress
Stockholders or Scotsman Partners is reduced to an amount less than 20% of the
outstanding Holdings Common Stock, but 5% or more of the outstanding Holdings
Common Stock, the Cypress Stockholders or Scotsman Partners, as the case may be,
will be entitled to designate one director. Each of the Cypress Stockholders or
Scotsman Partners will lose the right to designate one director when the Cypress
Stockholders or Scotsman Partners, as the case may be, no longer holds at least
5% of the outstanding Holdings Common Stock. From and after the date that
Odyssey Investment Group owns less than 5% of the outstanding Holdings Common
Stock, it will no longer be entitled to designate any director for election or
removal. If any of Cypress Stockholders, Scotsman Partners and Odyssey
Investment Group is entitled to designate a lesser number of directors pursuant
to the Investor Stockholders Agreement, then they will vote their shares to
cause the number of the entire Board of Directors to be reduced by the number of
directors they are no longer entitled to designate.

     Under the Investor Stockholders Agreement, until such time as either the
Cypress Stockholders or the Scotsman Partners is no longer entitled to designate
three directors, without the approval of a majority of the directors designated
by each of the Cypress Stockholders and Scotsman Partners, respectively,
Holdings will not take certain actions (including mergers, consolidations, sales
of all or substantially all assets, electing or removing the Chairman or
President of Holdings, issuing securities, incurring certain indebtedness,
making certain acquisitions, approving operating and capital budgets and other
major transactions).

     Under the Investor Stockholders Agreement, prior to the consummation of an
initial public offering of Holdings Common Stock (an "IPO"), each Stockholder
will have the right to acquire shares of Holdings Common Stock in connection
with certain new issuances of Holdings Common Stock, on the same terms and
conditions, for the amount necessary to allow the participating Stockholder to
maintain its percentage holding of the outstanding Holdings Common Stock.

                                       52
<PAGE>

     The Investor Stockholders Agreement contains provisions limiting the
ability of Stockholders to transfer their shares in certain circumstances. Among
other provisions, the Investor Stockholders Agreement includes (i) rights of
first offer in favor of the Investor Stockholders with respect to proposed
transfers of shares to a third party and (ii) tag-along rights in favor of each
Stockholder pursuant to which a selling Stockholder would be required to permit
the other Stockholders to participate on a proportional basis in a transfer of
shares to a third party. Also, if one or more Stockholders holding at least 60%
of the outstanding Holdings Common Stock determine to sell shares to a third
party, in certain circumstances such Stockholders have the right to require the
other Stockholders to sell their shares to such third party.

     Under the Investor Stockholders Agreement, the Stockholders have the right
to require the Company to register their shares of Holdings Common Stock under
the Securities Act in certain circumstances, including upon a demand of certain
of the Stockholders.

     The Investor Stockholders Agreement (other than the registration rights
provisions) will terminate (unless earlier terminated as specified in the
Investor Stockholders Agreement) upon the earlier of (i) May 22, 2007 and (ii)
completion of an IPO.

Employment Arrangement

     During 1999, Mr. Gossett was engaged by the Company to assist with mergers
and acquisitions, real estate project management, strategic initiatives and
other general business services. As compensation for these services, Mr. Gossett
received $120,000 for the year ended December 31, 1999. Mr. Gossett currently
serves as Chairman Emeritus of the Company's Board of Directors.

                                       53
<PAGE>

                                    PART IV

Item 14.  Exhibits, Financial Statement Schedules and Reports on Form 8-K.

     (a)  Financial Statements and Financial Statement Schedules (1) and (2).
          See Index to Financial Statements and Supplemental Schedules at Item 8
          of this Annual Report on Form 10-K.

     (b)  Reports on Form 8-K filed in the fourth quarter of 1999.

          None.

     (c)  Exhibits

 Exhibit Number
 --------------

     2.1 --    Recapitalization Agreement, dated as of April 11, 1997.
               (Incorporated by reference to Exhibit 2 of Form 8-K dated
               May 22, 1997.)

     2.2 --    Stock Purchase Agreement, dated as of July 23, 1998.
               (Incorporated by reference to Exhibit 2 of Form 8-K dated
               September 1, 1998.)

     3.1 --    Certificate of Incorporation of Williams Scotsman, Inc., as
               amended. (Incorporated by reference to Exhibit 3(i) of Form
               8-K dated November 27, 1996).

     3.2 --    By-laws of Williams Scotsman, Inc. (Incorporated by
               reference to Exhibit 3.2 of Registration Statement on Form S-
               1, Commission File No. 33-68444).

     4.1 --    Indenture dated as of May 15, 1997 among Williams Scotsman,
               Inc., Mobile Field Office Company, Willscot Equipment, LLC
               and The Bank of New York, as trustee. (Incorporated by
               reference to Exhibit 4.1 of Registration Statement on Form S-
               4, Commission File No. 333-30753).

    10.1 --    Credit Agreement, dated as of May 22, 1997 and Amended and
               Restated as of September 1, 1998, by and among Williams
               Scotsman, Inc., Scotsman Holdings, Inc. each of the
               financial institutions named therein, Bankers Trust Company,
               as issuing bank and BT Commercial Corporation, as agent.
               (Incorporated by reference to Exhibit 10.1

                                       54
<PAGE>

               to the annual report on Form 10-K of Williams Scotsman, Inc.
               (Commission Act File No.: 33-68444) for the year ended
               December 31, 1998 (the Company's 1998 Form 10-K)).

    10.2 --    Investor Stockholders Agreement, dated as of May 22, 1997,
               among Scotsman Partners, L.P., Cypress Merchant Banking
               Partners, L.P., Cypress Offshore Partners, L.P., Odyssey
               Partners, L.P., Barry P. Gossett, BT Investment Partners,
               Inc. and certain other stockholders. (Incorporated by
               reference to Exhibit 10.3 of Registration Statement on Form
               S-4, Commission File No.333-30753).

    10.3 --    Amendment No. 1 to Investor Stockholders Agreement, dated as
               of September 1, 1998, among Scotsman Partners, L.P. Cypress
               Merchant Banking Partners, L.P., Cypress Offshore Partners,
               L.P., Odyssey Partners, L.P., Barry P. Gossett, BT
               Investment Partners, Inc. and certain other stockholders.
               (Incorporated by reference to Exhibit 10.3 of the Company's
               1998 Form 10-K.)

    10.4 --    Management Stockholders' and Optionholders' Agreement, dated
               as of September 14, 1998, among Scotsman Partners, L.P.,
               Cypress Merchant Banking Partners, L.P., Cypress Offshore
               Partners, L.P., and certain management stockholders of
               Holdings. (Incorporated by reference to Exhibit 10.4 of the
               Company's 1998 Form 10-K.)

    10.5 --    Scotsman Holdings, Inc. Employee Stock Purchase Plan.
               (Incorporated by reference to Exhibit 10.8 of Registration
               Statement on Form S-1 of Scotsman Holdings, Inc. Commission
               File No.:33-68444).

    10.6 --    Scotsman Holdings, Inc. 1994 Employee Stock Option Plan.
               (Incorporated by reference to Exhibit 10.11 of the Company's
               Form 10-K for the year ended December 31, 1994).

    10.7 --    Scotsman Holdings, Inc. Amended and Restated 1997 Employee
               Stock Option Plan. (Incorporated by reference to Exhibit
               10.7 of the Company's 1998 Form 10-K.)

    10.8 --    First Amendment to Credit Agreement dated as of July 7,
               1999. (Incorporated by reference to Exhibit 10.8 to the
               quarterly report on

                                       55
<PAGE>

               Form 10-Q of Williams Scotsman, Inc. (Commission Act File
               No.: 33-68444) for the quarter ended September 30, 1999 (the
               Company's 1999 3Q 10-Q)).

    10.9 --    Second Amendment to Credit Agreement dated as of September
               15, 1999. (Incorporated by reference to Exhibit 10.9 to the
               Company's 1999 3Q 10-Q).

    12.1 --    Statement regarding computation of ratios.

    21.1 --    Subsidiaries of Registrant: Willscot Equipment, LLC, and
               Space Master International, Inc.

      27 --    Financial Data Schedule

                                       56
<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 be signed
on its behalf by the undersigned, thereunto duly authorized.

                                   WILLIAMS SCOTSMAN, INC.

                                   By:  /s/ Gerard E. Keefe
                                        -------------------
                                        Gerard E. Keefe
                                        Senior Vice President and
                                        Chief Financial Officer
Dated: March __, 2000

     KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Gerard E. Keefe, his or her attorney-in-fact,
with the power of substitution, for him or her in any and all capacities, to
sign any amendments to this Report, and to file the same with exhibits thereto
and other documents in connection therewith, with the Securities and Exchange
Commission, hereby ratifying and confirming all that each of said attorney-in-
fact, or his substitute or substitutes, may do or cause to be done by virtue
hereof.

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


          Name                          Capacity                  Date
          ----                          --------                  ----

/s/ Gerard E. Holthaus        Chairman, President, Chief      March __, 2000
----------------------------
Gerard E. Holthaus            Executive Officer and Director


/s/ Gerard E. Keefe           Senior Vice President and       March __, 2000
----------------------------
Gerard E. Keefe               Chief Financial Officer


/s/ Katherine K. Giannelli    Vice President and Controller   March __, 2000
----------------------------
Katherine K. Giannelli


/s/ Barry P. Gossett          Chairman Emeritus of the        March __, 2000
----------------------------
Barry P. Gossett              Board


/s/ James N. Alexander        Director                        March __, 2000
----------------------------
James N. Alexander


/s/ Daniel L. Doctoroff       Director                        March __, 2000
----------------------------
Daniel L. Doctoroff

                                       57
<PAGE>

          Name                          Capacity                  Date
          ----                          --------                  ----

/s/ Michael F. Finley         Director                        March __, 2000
----------------------------
Michael F. Finley


/s/ Robert B, Henske          Director                        March __, 2000
----------------------------
Robert B. Henske


/s/ Brian Kwait               Director                        March __, 2000
----------------------------
Brian Kwait


/s/ James L. Singleton        Director                        March __, 2000
----------------------------
James L. Singleton


/s/ David P. Spalding         Director                        March __, 2000
----------------------------
David P. Spalding

                                       58
<PAGE>

                   WILLIAMS SCOTSMAN, INC. AND SUBSIDIARIES

                Schedule II - Valuation and Qualifying Accounts


                                               Year ended December 31,
                                             ---------------------------
                                              1999       1998     1997
                                              ----       ----     ----
                                                  (In thousands)

Allowance for Doubtful Accounts:
  Balance at beginning of the period         $   839   $   253   $   258
  Provision charged to expense                 3,756     2,329     2,370
  Acquired allowance                             115     1,262       ---
  Accounts receivable written-off             (3,651)   (3,005)   (2,375)
                                             -------   -------   -------

  Balance at end of the period               $ 1,059   $   839   $   253
                                             =======   =======   =======

                                       59
<PAGE>

                             EXHIBITS TO FORM 10-K
                            WILLIAMS SCOTSMAN, INC.
                                 EXHIBIT INDEX


                                                           Sequentially
                                                             Numbered
Exhibit No.    Description of Document                         Page
-----------    -----------------------                     ------------

12.1     --    Statement regarding computation of ratios.            63

27       --    Financial Data Schedule                               64

                                       60