<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, 2000
                                       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, 2001, 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 88,000 units leased through 88 branch offices in 39 states and
Canada. The Company's fleet provides high quality, cost-effective relocatable
space solutions to over 25,000 customers in over 470 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 to meet projected customer requirements. The Company does not believe that
the loss of any one of its suppliers would have a material adverse effect on its
operations.



                                       1
<PAGE>

Forward Looking Statements

         Certain statements in this Form 10-K for the year ended December 31,
2000 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, you should not place undue reliance 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.

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").

                                       2
<PAGE>

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".

         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 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, 1998
to December 31, 2000, the Company increased its number of branches from 72 to 88
and the number of units from approximately 47,100 to 88,200 as a result of
acquisitions and general fleet expansion.

                                       3
<PAGE>

         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, 1998 to December 31,
2000, Scotsman made six acquisitions of approximately 19,200 units for a total
purchase price of $327.8 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 55% of the value of the Company's total fleet purchases during
this period (approximately 17% 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 grown its storage product fleet by
nearly 15,000 units, through direct purchases as well as eight acquisitions
which totaled approximately 5,900 storage units. Ancillary products and services
include: the rental of steps, furniture, ramps and security systems; sales of
parts and supplies; and charges for granting insurance waivers and for damage
billings.

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 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, 2000, the Company employed approximately 1,200 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

                                       4
<PAGE>

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 60% of its 88 branch locations and owns the balance.
Management believes that none of the Company's 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 2000, the Company paid dividends to Holdings totaling $55,000 for
normal operating expenses. The Company does not intend to pay any other
dividends except for the normal operating expenses of Holdings, but reserves the
right to do so. The Company's ability to pay dividends to Holdings is limited to
amounts for corporate and administrative expenses. (See Note 4 of Notes to the
Consolidated Financial Statements.)

     Pursuant to the Scotsman Holdings, Inc. Amended and Restated 1997 Employee
Stock Option Plan (the "1997 Plan"), options for the purchase of 46,100 shares
of Holdings' common stock were granted during 2000. No options were exercised
during 2000 and no shares of Holdings' common stock were issued during 2000 upon
the exercise of previously granted options.

                                       7
<PAGE>

Item 6.        Selected Historical Financial Data

The following tables summarize 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 has
been derived from the audited Financial Statements.

<TABLE>
<CAPTION>
                                                                      Year Ended December 31,
                                                      ---------------------------------------------------------
                                                      1996          1997           1998        1999        2000
                                                      ----          ----           ----        ----        ----
                                                       (Dollars in thousands, except per share amounts)
<S>                                                   <C>         <C>           <C>         <C>       <C>
Statement of Operations Data:
Revenues:
     Leasing                                          $104,438    $120,266      $152,221    $201,820   $220,547
     Sales:
         New units                                      28,042      41,926        46,448      73,001     73,291
         Rental equipment                               12,331      13,120        15,530      22,369     21,571
     Delivery and installation                          32,767      38,626        47,002      71,245     79,097
     Other                                              17,564      22,252        25,893      37,370     37,640
                                                      --------    --------        ------      ------     ------
         Total                                        $195,142    $236,190      $287,094    $405,805   $432,146
================================================================================================================

Gross profit:
     Leasing                                          $ 56,916    $ 71,237      $101,036    $136,543   $148,454
     Sales:
         New units                                       4,999       6,685         8,099      12,678     13,023
         Rental equipment                                2,618       3,521         3,730       5,133      5,266
     Delivery and installation                           7,520      10,914        12,083      18,886     19,427
     Other                                              13,590      15,480        20,393      29,949     31,057
                                                       -------      ------        ------      ------     ------
         Total                                        $ 85,643    $107,837      $145,341    $203,189   $217,227
================================================================================================================

Selling, general and administrative
     expenses                                         $ 42,260    $ 46,256      $ 58,099    $ 71,425   $ 76,817
Recapitalization expenses (1)                              ---       5,105           ---         ---        ---
Earnings from continuing
     operations before extraordinary item                9,195       5,979         3,791      17,307     16,119
Earnings from continuing
     operations before extraordinary
     item per common share                            $   2.77    $   1.80      $   1.14    $   5.21   $   4.86
                                                          ====        ====          ====        ====       ====
Dividends per common share                            $    .62    $  53.84      $   6.88    $    .02   $    .02
                                                           ===       =====          ====         ===        ===
Ratio of earnings to fixed charges (2)                     1.6x        1.2x          1.2x        1.4x       1.3x
================================================================================================================

EBITDA (3)                                            $ 75,371    $ 92,407      $117,572    $168,216   $177,609
================================================================================================================
</TABLE>

                                       8
<PAGE>

<TABLE>
<CAPTION>
                                                                     Year Ended December 31,
                                                     ----------------------------------------------------
                                                     1996        1997        1998       1999         2000
                                                     ----        ----        ----       ----         ----
                                                        (Dollars in thousands, except per share amounts)
<S>                                                <C>         <C>         <C>        <C>          <C>
Balance Sheet Data:
Rental equipment, net                               $356,183    $403,528    $640,634   $  726,924   $  799,994
Total assets                                         428,697     514,173     941,287    1,066,464    1,145,898
Long-term debt                                       268,753     533,304     845,447      915,823      959,110
Stockholder's equity (deficit)                        69,633    (111,564)    (63,258)     (44,107)     (28,021)
</TABLE>

          (1)     Recapitalization expenses recognized in the amount of $5.1
                  million 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.

          (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, and
                  non-cash compensation expense. 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, 2000 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."

     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 its 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 the Company's customers by leasing which may
be an attractive alternative to capital purchases, (iii) the Company's 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 approximately 31% of its 2000 revenues, experiences declines
in utilization rates, while other customer segments, including education which
represented approximately 20% of revenues in 2000, are more stable).

Results of Operations

                                       10
<PAGE>

     2000 Compared With 1999. Revenues in 2000 were $432.1 million, a $26.3
million or 6.5% increase from revenues of $405.8 million in 1999. The increase
resulted from a $18.7 million or 9.3% increase in leasing revenue and a $7.9
million or 11.0% increase in delivery and installation revenue. The increase in
leasing revenue is attributable to a 10.4% increase in the average lease fleet
to approximately 83,300 units for 2000, combined with a slight increase of $1 in
the average monthly rental rate, offset by a slight decrease in the average
fleet utilization of one percent to 84%. The increase in delivery and
installation revenue is attributable to the increase in leasing revenue as
described above.

     Gross profit in 2000 was $217.2 million, a $14.0 million or 6.9% increase
from 1999 gross profit of $203.2 million. The increase primarily resulted from a
$11.9 million or 8.7% increase in leasing gross profit and to a minor extent
from a $1.1 million or 3.7% increase in gross profit from other revenue. The
increase in leasing gross profit is a result of the increase in leasing revenue
described above combined with stable leasing margins. Excluding depreciation and
amortization, leasing margins decreased slightly from 84.8% in 1999 to 84.0% in
2000. Although other revenue was essentially flat, the increase in related gross
profit was attributed to a favorable mix of higher margin ancillary products, as
1999 results included revenue associated with a large (lower margin) project to
relocate customer-owned units.

     Selling, general and administrative (SG&A) expenses increased by $5.4
million or 7.5% from 1999. The increase is the result of the growth experienced
by the Company, both in terms of number of branches and fleet size as compared
to 1999. The Company's branch network has expanded from 83 branches at December
31, 1999 to 88 branches at December 31, 2000, while the fleet has grown by
approximately 8,700 units from December 31, 1999. The increase in SG&A expenses
is due to an increase in field related expenses, primarily payroll and
occupancy, incurred in connection with this branch expansion and fleet growth.

     Interest expense increased by 9.5% to $91.9 million in 2000 from $83.9
million in 1999. This increase is a result of increased average borrowings of
approximately $38.9 million to finance fleet and branch growth in addition to
increases in interest rates on our variable bank debt. The effect of market rate
increases in 2000 was partially offset by a 25 basis point reduction in February
2000 on bank credit facility borrowings as the Company achieved a specified
leverage ratio threshold.

     The difference between the Company's reported tax provision for the year
ended December 31, 2000 and the tax provision computed based on statutory rates
is primarily attributable to non-deductible goodwill amortization expense of
$5.1 million.

     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

                                       11
<PAGE>

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.

     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.

     Other depreciation and amortization increased from $9.6 million in 1998 to
$15.9 million in 1999, $5.2 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
$5.2 million.

Liquidity and Capital Resources

                                       12
<PAGE>

     During 1998, 1999 and 2000, the Company's principal sources of funds
consisted of cash flow from operating and financing sources. Cash flow from
operating activities of $43.6 million in 1998, $72.3 million in 1999 and $87.0
million in 2000 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, and non-cash compensation expense. 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. The Company's EBITDA increased by $9.4 million or 5.6% to $177.6
million in 2000 compared to $168.2 million in 1999. This increase in EBITDA is a
result of increased leasing activity resulting from the overall growth in the
number of units in the fleet and a slight increase in average monthly rental
rates, partially offset by a slight decline in utilization and increased SG&A
expenses required to support the expanded activities during 2000. In 1999, the
Company's EBITDA increased by $50.6 million or 43.1% to $168.2 million 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.

     Cash flow used in investing activities was $390.4 million in 1998, $142.7
million in 1999 and $128.3 million in 2000. 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. These expenditures increased the size of the
rental fleet by approximately 23,100 units during 1998, 9,400 units during 1999
and 8,700 during 2000. This activity was in response to increased customer
demand and a continuation of the Company's fleet acquisition strategy and branch
expansion. The following table sets forth the Company's investment in its lease
fleet for the periods indicated.

<TABLE>
<CAPTION>
                                                                                    Year Ended December 31,
                                                                                    -----------------------
                                                                                    1998       1999    2000
                                                                                    ----       ----    ----
                                                                                     (Dollars in millions)
<S>                                                                             <C>         <C>        <C>
Gross capital expenditures for rental equipment:

      New units and betterments........................                         $  110.0    $  115.0   $  118.6
      Fleet acquisitions, excluding acquired businesses                              9.2          --        4.0
                                                                                  ------      ------     ------
                                                                                   119.2       115.0      122.6
Purchase price allocated to fleet of acquired businesses                           157.2        24.2        5.3
</TABLE>

                                       13
<PAGE>

<TABLE>
<S>                                                                             <C>         <C>        <C>
Proceeds from sale of used rental equipment.........................               (15.5)      (22.4)     (21.6)
                                                                                  ------      ------     ------

Net capital expenditures for rental equipment.......................            $  260.9    $  116.8   $  106.3
                                                                                ========    ========   ========
Lease fleet maintenance expenses included
       in the statement of operations...............................            $   23.4    $   30.5   $   35.1
                                                                                ========    ========   ========
</TABLE>

     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 1998, 1999 and 2000, 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 proceeds from sales of used units)
necessary to maintain its lease fleet and facilities at their current size and
condition is approximately $25 million.

     Other capital expenditures of $13.9 million, $13.9 million and $18.6
million in 1998, 1999 and 2000, respectively, consist of items not directly
related to the lease fleet, such as branch or headquarter's buildings, land,
equipment, leasehold improvements and management information systems.

     Cash provided by financing activities of $43.2 million in 2000 and $70.2
million in 1999 is comprised primarily of long-term borrowings. 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.

     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 $37.7 million at December 31, 2000. Borrowings under the line may be used
for working capital, acquisitions and general corporate purposes. At the
Company's option, the revolving credit loans may be maintained as (a) Base Rate
Loans which bear interest at the prime




                                       14
<PAGE>

rate plus 1% or (b) Eurodollar Loans which bear interest at the Eurodollar Rate
plus 2.25%. In February 2000, the applicable margin used to calculate such
interest rates was reduced to 0.75% for prime rate loans and 2.0% for Eurodollar
Rate loans as the Company met a specified leverage ratio threshold. 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, including restrictions on the amount of dividends that
Scotsman can pay to Holdings.

     Subsequent to December 31, 2000, the amended credit facility was further
amended to provide for revolver borrowings up to $600 million.

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

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. The price of used
units sold by the Company and the replacement cost of such units could also
increase in such an environment. The Company's standard lease 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.



                                       15
<PAGE>

Item 8.
                         INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                                                                                               Page
                                                                                                               ----
<S>                                                                                                           <C>
Report of Independent Auditors...................................................................................17

Consolidated Balance Sheets as of December 31, 2000 and 1999.....................................................18

Consolidated Statements of Operations for the years ended December 31, 2000,
         1999 and 1998...........................................................................................19

Consolidated Statements of Changes in Stockholder's Equity for the years
         ended December 31, 2000, 1999 and 1998..................................................................20

Consolidated Statements of Cash Flows for the years ended December 31, 2000,
         1999 and 1998........................................................................................21-22

Notes to Consolidated Financial Statements....................................................................23-37

                    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.

                                       16
<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, 2000 and 1999, 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, 2000. Our
audits also included the financial statement schedule listed in the Index at
Item 14(a). These consolidated financial statements and schedule 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 financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Williams Scotsman,
Inc. and subsidiaries at December 31, 2000 and 1999, and the consolidated
results of their operations and their cash flows for each of the three years in
the period ended December 31, 2000, in conformity with accounting principles
generally accepted in the United States. Also, in our opinion, the related
financial statement schedule, when considered in relation to the basic financial
statements taken as a whole, present fairly in all material respects the
information set forth therein.

/s/ Ernst & Young LLP
Baltimore, Maryland
February 2, 2001

                                       17
<PAGE>

                   Williams Scotsman, Inc. and Subsidiaries

                          Consolidated Balance Sheets

<TABLE>
<CAPTION>
                                                                                     December 31
                                                                               2000              1999
                                                                        -------------------------------
                                                                                   (In thousands)
<S>                                                                       <C>             <C>
Assets
Cash                                                                       $     2,546     $        641
Trade accounts receivable, net of allowance for doubtful
  accounts of $983 in 2000 and $1,058 in 1999                                   53,916           56,989
Prepaid expenses and other current assets                                       20,685           17,484
Rental equipment, net of accumulated depreciation of
  $155,434 in 2000 and $127,154 in 1999                                        799,994          726,924
Property and equipment, net                                                     64,766           54,074
Deferred financing costs, net                                                   15,408           20,339
Goodwill and other intangible assets, net                                      172,218          172,273
Other assets                                                                    16,365           17,740
                                                                        -------------------------------
                                                                           $ 1,145,898     $  1,066,464
                                                                        ===============================
Liabilities and stockholder's equity
Accounts payable and accrued expenses                                      $    54,735     $     52,434
Rents billed in advance                                                         24,757           23,035
Long-term debt                                                                 959,110          915,823
Deferred income taxes                                                          135,317          119,279
                                                                        -------------------------------
       Total liabilities                                                     1,173,919        1,110,571
                                                                        -------------------------------

Stockholder's equity (deficit):
  Common stock, $.01 par value.  Authorized 10,000,000
   shares; issued and outstanding 3,320,000 shares                                  33               33
  Additional paid-in capital                                                   126,567          126,088
  Cumulative foreign currency translation adjustment                              (457)               -
  Retained deficit                                                            (154,164)        (170,228)
                                                                         ------------------------------
Total stockholder's deficit                                                    (28,021)         (44,107)
                                                                         ------------------------------
                                                                           $ 1,145,898     $  1,066,464
                                                                         ==============================
</TABLE>

See accompanying notes.

                                       18
<PAGE>

                   Williams Scotsman, Inc. and Subsidiaries

                     Consolidated Statements of Operations

<TABLE>
<CAPTION>
                                                                           Year ended December 31
                                                                       2000            1999            1998
                                                              ----------------------------------------------
                                                                            (In thousands except
                                                                              per share amounts)
<S>                                                             <C>                 <C>            <C>
Revenues
Leasing                                                          $    220,547        $201,820       $152,221
Sales:
  New units                                                            73,291          73,001         46,448
  Rental equipment                                                     21,571          22,369         15,530
Delivery and installation                                              79,097          71,245         47,002
Other                                                                  37,640          37,370         25,893
                                                               ---------------------------------------------
       Total revenues                                                 432,146         405,805        287,094
                                                              ----------------------------------------------

Cost of sales and services
Leasing:
  Depreciation and amortization                                        36,720          34,553         27,605
  Other direct leasing costs                                           35,373          30,724         23,580
Sales:
  New units                                                            60,268          60,323         38,349
  Rental equipment                                                     16,305          17,236         11,800
Delivery and installation                                              59,670          52,359         34,919
Other                                                                   6,583           7,421          5,500
                                                              ----------------------------------------------
       Total costs of sales and services                              214,919         202,616        141,753
                                                              ----------------------------------------------
       Gross profit                                                   217,227         203,189        145,341
                                                              ----------------------------------------------

Selling, general and administrative expenses                           76,817          71,425         58,099
Other depreciation and amortization                                    17,474          15,866          9,623
Interest, including amortization of deferred
  financing costs of $4,931, $4,913 and $3,857                         91,860          83,878         65,060
                                                              ----------------------------------------------
       Total operating expenses                                       186,151         171,169        132,782
                                                              ----------------------------------------------


         Income before income taxes                                    31,076          32,020         12,559
Income tax expense                                                     14,957          14,713          8,768
                                                              ----------------------------------------------
         Net income                                              $     16,119        $ 17,307       $  3,791
                                                              ==============================================

Earnings per common share                                        $       4.86     $      5.21      $    1.14
                                                              ==============================================
</TABLE>


See accompanying notes.

                                       19
<PAGE>

                          Williams Scotsman, Inc. and Subsidiaries

                 Consolidated Statements of Changes in Stockholder's Equity

<TABLE>
<CAPTION>
                                                                 Additional                          Other
                                           Common Stock          Paid-in        Retained       Comprehensive
                                         Shares     Amount       Capital        Deficit            Income            Total
                                        -----------------------------------------------------------------------------------------
                                                               (In thousands)
<S>                                     <C>          <C>       <C>             <C>             <C>                   <C>
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)
Appreciation in value of stock options          -         -             479              -               -                 479
Dividends to parent--$.02 per share             -         -               -            (55)              -                 (55)
Foreign currency translation
   adjustment                                   -         -               -              -            (457)               (457)
Net income                                      -         -               -         16,119               -              16,119
                                        --------------------------------------------------------------------------------------

Balance at December 31, 2000                3,320     $  33       $ 126,567      $(154,164)       $   (457)           $(28,021)
                                        ======================================================================================
</TABLE>

See accompanying notes.

                                       20
<PAGE>

                    Williams Scotsman, Inc. and Subsidiaries

                      Consolidated Statements of Cash Flows

<TABLE>
<CAPTION>
                                                                             Year ended December 31
                                                                      2000            1999            1998
                                                                -------------------------------------------------
                                                                                 (In thousands)
<S>                                                               <C>             <C>            <C>
Cash flows from operating activities
Net income                                                         $    16,119     $    17,307    $      3,791
Adjustments to reconcile net income to net cash provided by
   operating activities:
     Depreciation and amortization                                      59,125          55,332          41,085
     Provision for bad debts                                             3,697           3,756           2,329
     Deferred income tax expense                                        14,703          13,837           8,618
     Non-cash option compensation expense                                  479           1,899           2,725
     Gain on sale of rental equipment                                   (5,266)         (5,133)         (3,730)
     Increase in net trade accounts receivable                            (337)        (18,058)        (10,918)
     Increase (decrease) in accounts payable and accrued
       expenses                                                          1,578           9,249          (1,225)
     Other                                                              (3,121)         (5,851)            943
                                                                ----------------------------------------------
Net cash provided by operating activities                               86,977          72,338          43,618
                                                                ----------------------------------------------

Cash flows from investing activities
Rental equipment additions                                            (122,617)       (115,024)       (119,288)
Proceeds from sales of rental equipment                                 21,571          22,369          15,530
Acquisition of businesses, net of cash acquired                         (8,687)        (36,208)       (272,721)
Purchase of property and equipment, net                                (18,571)        (13,860)        (13,944)
Redemption of certificates of deposit                                        -               -              13
                                                                ----------------------------------------------
Net cash used in investing activities                              $  (128,304)    $  (142,723)   $   (390,410)
                                                                ----------------------------------------------
</TABLE>

                                       21
<PAGE>

                   Williams Scotsman, Inc. and Subsidiaries

               Consolidated Statements of Cash Flows (continued)

<TABLE>
<CAPTION>
                                                                              Year ended December 31
                                                                       2000            1999            1998
                                                                 -------------------------------------------------
                                                                                  (In thousands)
<S>                                                               <C>             <C>             <C>
Cash flows from financing activities
Proceeds from long-term debt                                       $     493,748   $     483,525    $   608,492
Repayment of long-term debt                                             (450,461)       (413,149)      (296,349)
Increase in deferred financing costs                                           -             (91)        (6,639)
Equity contribution                                                            -               -         64,620
Cash dividends paid                                                          (55)            (55)       (22,830)
                                                                 ----------------------------------------------
Net cash provided by financing activities                                 43,232          70,230        347,294
                                                                 ----------------------------------------------
Net increase (decrease) in cash                                            1,905            (155)           502

Cash at beginning of period                                                  641             796            294
                                                                 ----------------------------------------------
Cash at end of period                                              $       2,546   $         641    $       796
                                                                 ==============================================

Supplemental cash flow information:

   Cash paid (refunds received) for income taxes                   $         196   $         (10)   $       523
                                                                 ==============================================
   Cash paid for interest                                          $      81,653   $      76,920    $    59,904
                                                                 ==============================================
</TABLE>

See accompanying notes.

                                       22
<PAGE>

                   Williams Scotsman, Inc. and Subsidiaries

                  Notes to Consolidated Financial Statements

               (Dollars in thousands, except per share amounts)
                          December 31, 2000 and 1999



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 a full and 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.

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 identifiable 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. 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 identifiable 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.

                                       23
<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 year ended December 31,
1998, assuming consummation of the acquisition as of January 1, 1998 is as
follows:

          Total revenue                                      $  345,609
          Net income                                         $    3,204
          Net income per basic share                         $      .96

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 $293,777 in cash and approximately $21,834 in promissory notes
which were repaid in January 1998 and (ii) issued 1,475,410 shares of common
stock for an aggregate of approximately $135,000 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 $13,719.

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.

In order to finance the Recapitalization, the Company issued $400,000 in 9.875%
senior notes due 2007 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.

                                       24
<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, 2000. 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%.

     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.

(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 15 to 40 years for buildings and improvements and 3 to
     10 years for furniture and equipment. Maintenance and repairs are charged
     to expense as incurred.

                                       25
<PAGE>

                   Williams Scotsman, Inc. and Subsidiaries

            Notes to Consolidated Financial Statements (continued)



2. Summary of Significant Accounting Policies (continued)

(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 $4,433 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, 2000, 1999 and 1998,
     accumulated amortization of goodwill and other intangible assets was
     $11,932, $6,817, and $1,600, 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, on a discounted basis.

(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.

(g)  Earnings Per Share

     Earnings per share is computed based on weighted average number of common
     shares outstanding of 3,320,000 shares for 2000, 1999 and 1998.

                                       26
<PAGE>

                   Williams Scotsman, Inc. and Subsidiaries

            Notes to Consolidated Financial Statements (continued)

2. Summary of Significant Accounting Policies (continued)

(h)  Revenue Recognition

     The Company's current revenue recognition policy is to recognize rental
     income ratably over the month on a daily basis. Billings for periods
     extending beyond the month end are recorded as deferred income. Sales
     revenue is recognized at the time the units are delivered, with the
     exception of long-term construction-type sales contracts for which revenue
     is recognized under the percentage of completion method. Under this method,
     income is recognized based on the incurred costs to date compared to
     estimated total costs. All other revenue is recognized 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
                                                      2000            1999
                                                   --------------------------

Land                                               $  13,089        $   9,562
Buildings and improvements                            28,464           24,369
Furniture and equipment                               47,106           36,406
                                                   --------------------------
                                                      88,659           70,337
Less accumulated depreciation                         23,893           16,263
                                                   --------------------------
Net property and equipment                         $  64,766        $  54,074
                                                   ==========================

                                       27
<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
                                                         2000            1999
                                                       -------------------------

Borrowings under revolving credit facility             $  500,460     $  456,573
Term loan                                                  58,650         59,250
9.875% senior notes                                       400,000        400,000
                                                       -------------------------
                                                       $  959,110     $  915,823
                                                       =========================

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 $37,712 at December 31,
2000. Interest is payable at a rate of either prime plus 1.0% or the Eurodollar
rate plus 2.25%. In February 2000, these rates were decreased to prime plus
0.75% and the Eurodollar Rate plus 2.0% as a result of the Company meeting a
specified leverage ratio threshold. The weighted average interest rates of the
revolver under the credit agreement were 8.85% and 8.33% at December 31, 2000
and 1999, respectively. 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 rates of the term loan
under the credit agreement were 10.06% and 9.38% at December 31, 2000 and 1999,
respectively. Subsequent to December 31, 2000, this credit facility was further
amended to provide for revolver borrowings up to $600,000.

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, including restrictions on the amount of
dividends that Scotsman can pay to Holdings, the credit facility loan agreement
requires compliance with certain financial covenants including capital
expenditures, interest coverage and fleet utilization levels.

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.

                                       28
<PAGE>

                   Williams Scotsman, Inc. and Subsidiaries

            Notes to Consolidated Financial Statements (continued)



4. Long-Term Debt (continued)

The notes are general unsecured obligations of the Company and are subordinated
in right of payment to all secured indebtedness. Additionally, the notes are
guaranteed by Willscot, the Company's wholly owned subsidiary. Such guaranty is
full and 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; pay dividends to Holdings; and merge with or acquire other
companies.

At December 31, 2000 and 1999, the fair value of long-term debt was
approximately $883,110 and $895,823, respectively, based on the quoted market
price of the senior notes and the book value of the credit facility, which are
adjustable rate notes.

Letter of credit obligations at December 31, 2000 were $1,828.


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
                                                                                       2000            1999
                                                                                     ------------------------
<S>                                                                                  <C>            <C>
Deferred tax liabilities:
   Cost basis in excess of tax basis of assets and accelerated tax depreciation:

        Rental equipment                                                              $ 220,502     $ 181,786
        Property and equipment                                                            1,074         1,074
        Other                                                                             2,631         2,552
                                                                                     ------------------------
           Total deferred tax liabilities                                               224,207       185,412
                                                                                     ------------------------
Deferred tax assets:
   Allowance for doubtful accounts                                                          390           408
   Rents billed in advance                                                               10,127         9,279
   Net operating loss carryovers                                                         74,743        51,671
   Alternative minimum tax credit carryovers                                              1,759         1,759
   Investment tax credit carryovers                                                           -           860
   Other                                                                                  5,271         5,556
                                                                                     ------------------------
                                                                                         92,290        69,533
   Less:  valuation allowance                                                            (3,400)       (3,400)
                                                                                     ------------------------
           Total deferred tax assets                                                     88,890        66,133
                                                                                     ------------------------
Net deferred tax liabilities                                                          $ 135,317     $ 119,279
                                                                                     ========================
</TABLE>

                                       29
<PAGE>

                   Williams Scotsman, Inc. and Subsidiaries

            Notes to Consolidated Financial Statements (continued)

5.  Income Taxes (continued)

At December 31, 2000, the Company had net operating loss carryovers available
for federal income tax purposes of $184,951 (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 expire at
various dates from 2003 to 2020. Also, alternative minimum tax credit carryovers
of approximately $1,759 are available without expiration limitations. An
investment credit carryover of approximately $860 expired on December 31, 2000.
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 carryovers.

Income tax expense consists of the following:

<TABLE>
<CAPTION>
                                                                         Years ended December 31
                                                                      2000          1999          1998
                                                              -------------------------------------------
<S>                                                                <C>          <C>           <C>
Current                                                            $    254     $    876      $   150
Deferred                                                             14,703       13,837        8,618
                                                              -------------------------------------------
                                                                   $ 14,957     $ 14,713      $ 8,768
                                                              ===========================================

Federal                                                            $ 12,644     $ 12,615      $ 7,518
State                                                                 2,313        2,098        1,250
                                                              -------------------------------------------
                                                                   $ 14,957     $ 14,713      $ 8,768
                                                              ===========================================
</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
                                                                       2000         1999          1998
                                                                -------------------------------------------
<S>                                                                <C>             <C>           <C>
Income tax at statutory rate                                       $  10,876       $11,207       $4,396
State income taxes, net of federal tax benefit                         1,503         1,144          449
Amortization of goodwill and other intangible assets                   1,702         1,838          567
Increase in valuation allowance                                            -             -        3,400
Other                                                                    876           524          (44)
                                                                -------------------------------------------
                                                                   $  14,957       $14,713       $8,768
                                                                ===========================================
</TABLE>

                                       30
<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, 2000 approximate future
minimum rental payments are as follows:

         2001                                                        $ 7,657
         2002                                                          6,199
         2003                                                          4,282
         2004                                                          3,197
         2005                                                          2,667
         Thereafter                                                    3,568
                                                                     -------

         Total minimum future lease payments                         $27,570
                                                                     =======

Rent expense was $9,839 in 2000, $8,817 in 1999, and $6,708 in 1998.

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 ($10,500 in 2000). 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 $477 in 2000,
$395 in 1999, and $329 in 1998. No contributions have been made by the Company
under the profit-sharing feature.

                                       31
<PAGE>

                   Williams Scotsman, Inc. and Subsidiaries

            Notes to Consolidated Financial Statements (continued)

7.  Employee Benefit Plans (continued)

The Company has 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, 2000, the total
amount deferred under this plan, including earnings, was $1,715.

Holdings adopted a stock option plan for certain key employees of the Company.
The plan was subsequently amended and restated in 1998 (the "Amended and
Restated 1997 Employee Stock Option Plan"). Under the plan, 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 based on the Company meeting certain
financial goals over the same five periods. 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, 46,100 and 29,800 options were granted in 2000 and
1999, respectively. For those options in which both the grant date and the
measurement date were known, the Company recognized compensation expense in the
amount of $479, $1,899 and $2,725 in 2000, 1999, and 1998, respectively.

Prior to the Recapitalization, the Company had adopted a stock option plan for
certain key employees ("1994 Employee Stock Option Plan"). The options were
granted with an exercise price equal to the fair value of the shares as of the
date of grant. All options outstanding under this plan became fully vested in
conjunction with the recapitalization.

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 2000, 1999 and
1998: risk-free interest rate of 6.3%, 5.6%, and 5.5%, respectively; weighted
average expected life of the options of 5 years; and no dividends.

                                       32
<PAGE>

                    Williams Scotsman, Inc. and Subsidiaries

             Notes to Consolidated Financial Statements (continued)


7.  Employee Benefit Plans (continued)

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:

<TABLE>
<CAPTION>
                                                           2000               1999               1998
                                                     -------------------------------------------------------
<S>                                                      <C>                <C>                  <C>
Pro forma net income                                     $ 15,482           $ 16,946             $3,178
Pro forma earnings per share                             $   4.66           $   5.10             $ 0.96
</TABLE>

A summary of stock option activity and related information for the years ended
December 31 follows. Amounts have been restated for the three-for-one stock
split granted by Holdings in December 1997:

<TABLE>
<CAPTION>
                                            2000                      1999                    1998
                                  ----------------------------------------------------------------------------
                                                  Weighted                Weighted                 Weighted
                                                   Average                 Average                  Average
                                                  Exercise                Exercise                 Exercise
                                     Options        Price     Options       Price       Options      Price
                                  ----------------------------------------------------------------------------
<S>                                 <C>            <C>       <C>          <C>           <C>        <C>
Beginning balance                   1,107,840      $22.68    1,099,640      $22.12       998,790     $19.14
Granted                                46,100       50.67       29,800       50.67       112,550      44.12
Canceled                                    -           -            -           -             -          -
Forfeited                             (33,400)      31.77      (21,600)     (32.07)      (11,700)    (21.01)
                                  ----------------------------------------------------------------------------
Ending balance                      1,120,540       23.56    1,107,840       22.68     1,099,640     $22.12

Exercisable at end of year            871,030       18.54      950,165       19.94       949,525     $19.64

Weighted average minimum value
   of options granted during
   year                                            $19.45                   $12.08                   $10.36
</TABLE>

Exercise prices for options outstanding as of December 31, 2000 range from $4.59
to $50.67. The weighted-average remaining contractual life of those options is
6.31 years.

                                       33
<PAGE>

                   Williams Scotsman, Inc. and Subsidiaries

            Notes to Consolidated Financial Statements (continued)

8.  Supplemental Condensed Consolidating Financial Information

The 9.875% senior notes issued by the Company are guaranteed by its wholly owned
subsidiary, Willscot, which acts as a full and unconditional, and joint and
several subordinated guarantor of the notes. See Note 1 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. The following
summarizes condensed consolidating financial information for the Company
(Parent) and Willscot (Guarantor Subsidiary).


<TABLE>
<CAPTION>
                                                                 As of December 31, 2000
                                             ---------------------------------------------------------------
                                                               Guarantor
                                                   Parent      Subsidiary    Eliminations     Consolidated
                                             ---------------- ------------- --------------- -----------------
Balance Sheet
 Assets:
<S>                                          <C>               <C>           <C>            <C>
    Rental equipment, at cost                    $    263,768   $  691,660    $        -     $   955,428
    Less accumulated depreciation                      57,390       98,044                       155,434
                                                 ------------   ----------    ----------     -----------
    Net rental equipment                              206,378      593,616             -         799,994

    Property and equipment, net                        64,766                                     64,766
    Investment in Willscot                            293,837                   (293,837)              -
    Other assets                                      577,832        4,057      (300,751)        281,138
                                                 ------------   ----------    ----------     -----------

Total assets                                     $  1,142,813   $  597,673    $ (594,588)    $ 1,145,898
                                                 ============   ==========    ==========     ===========

 Liabilities:
     Accounts payable and accrued expenses       $    51,650    $    3,085    $        -     $    54,735

    Long-term debt                                    959,110                                    959,110
    Other liabilities                                 160,074      300,751      (300,751)        160,074
                                                 ------------   ----------    ----------     -----------
    Total liabilities                               1,170,834      303,836      (300,751)      1,173,919
                                                 ------------   ----------    ----------     -----------
 Equity (deficit):                                    (28,021)     293,837      (293,837)        (28,021)
                                                 ------------   ----------    ----------     -----------
 Total liabilities and stockholder's equity
(deficit):                                       $  1,142,813   $  597,673    $ (594,588)    $ 1,145,898
                                                 ============   ==========    ==========     ===========
</TABLE>

                                       34
<PAGE>

                    Williams Scotsman, Inc. and Subsidiaries

             Notes to Consolidated Financial Statements (continued)




8.  Supplemental Condensed Consolidating Financial Information (continued)


<TABLE>
<CAPTION>

                                                                     As of December 31, 1999
                                                 --------------------------------------------------------------
                                                               Guarantor
                                                   Parent      Subsidiary   Eliminations      Consolidated
                                                 ------------ ------------- --------------- -----------------
Balance Sheet
 Assets:
<S>                                             <C>           <C>         <C>                 <C>
    Rental equipment, at cost                     $   231,552    $ 622,526    $        -     $   854,078
    Less accumulated depreciation                      49,100       78,054             -         127,154
                                                 ------------ ------------  ------------    ------------
    Net rental equipment                              182,452      544,472             -         726,924

    Property and equipment, net                        54,074                                     54,074
    Investment in Willscot                            293,837                   (293,837)              -
    Other assets                                      531,039        4,894      (250,467)        285,466
                                                 ------------ ------------  ------------    ------------
Total assets                                      $ 1,061,402    $ 549,366    $ (544,304)    $ 1,066,464
                                                 ============ ============  ============    ============

 Liabilities:
    Accounts payable and accrued expenses         $    47,372    $   5,062    $        -      $   52,434
    Long-term debt                                    915,823                                    915,823
    Other liabilities                                 142,314      250,467      (250,467)        142,314
                                                 ------------ ------------  ------------    ------------
    Total liabilities                               1,105,509      255,529      (250,467)      1,110,571
                                                 ------------ ------------  ------------    ------------

 Equity (deficit):                                    (44,107)     293,837      (293,837)        (44,107)
                                                 ------------ ------------  ------------    ------------
Total liabilities and stockholder's equity
(deficit):                                        $ 1,061,402    $ 549,366     $(544,304)     $1,066,464
                                                 ============ ============  ============    ============
</TABLE>


<TABLE>
<CAPTION>

                                                          For the Year Ended December 31, 2000
                                                 ------------------------------------------------------------
                                                               Guarantor
                                                    Parent     Subsidiary    Eliminations     Consolidated
                                                 ------------ ------------- --------------- -----------------
Results of Operations
<S>                                             <C>           <C>           <C>              <C>
Total revenues                                      $381,430     $ 66,190      $(15,474)         $432,146

Gross profit                                         173,751       43,476            --           217,227

Other expenses                                       158,149       43,476       (15,474)          186,151

Net income                                          $ 16,119     $     --      $     --          $ 16,119
</TABLE>

                                       35
<PAGE>

                    Williams Scotsman, Inc. and Subsidiaries

             Notes to Consolidated Financial Statements (continued)

8.  Supplemental Condensed Consolidating Financial Information (continued)


<TABLE>
<CAPTION>
                                                         For the Year Ended December 31, 1999
                                               -------------------------------------------------------------
                                                              Guarantor
                                                  Parent      Subsidiary    Eliminations     Consolidated
                                               ------------- ------------- --------------- -----------------
Results of Operations
<S>                                            <C>            <C>          <C>             <C>
Total revenues                                    $362,123      $ 60,476       $(16,794)        $405,805


Gross profit                                       162,788        40,401             --          203,189

Other expenses                                     147,562        40,401        (16,794)         171,169

Net income                                        $ 17,307      $     --       $     --         $ 17,307

</TABLE>

<TABLE>
<CAPTION>
                                                         For the Year Ended December 31, 1998
                                             --------------------------------------------------------------
                                                              Guarantor
                                                  Parent      Subsidiary    Eliminations     Consolidated
                                               ------------- ------------- --------------- -----------------
Results of Operations
<S>                                           <C>            <C>           <C>               <C>
Total revenues                                     $266,477       $ 41,717       $(21,100)         $287,094

Gross profit                                        117,936         27,405             --           145,341

Other expenses                                      126,477         27,405        (21,100)          132,782

Net income                                         $  3,791       $     --       $     --          $  3,791
</TABLE>

<TABLE>
<CAPTION>

                                                         For the Year Ended December 31, 2000
                                             --------------------------------------------------------------
                                                              Guarantor
                                                  Parent      Subsidiary    Eliminations     Consolidated
                                               ------------- ------------- --------------- -----------------
Cash Flows
<S>                                            <C>           <C>           <C>              <C>
Cash provided by operating activities             $  65,403      $  21,574     $      --         $  86,977


Cash used in investing activities                   (56,446)       (71,858)           --          (128,304)

Cash (used in) provided by financing
      activities                                     (7,052)        50,284                          43,232
                                                  ---------      ---------     ---------         ---------

Net change in cash                                    1,905             --                           1,905
Cash at beginning of period                             641             --                             641
                                                  ---------      ---------     ---------         ---------

 Cash at end of period                            $   2,546      $      --     $      --         $   2,546
                                                  =========      =========     =========         =========
</TABLE>

                    Williams Scotsman, Inc. and Subsidiaries

                                       36
<PAGE>

            Notes to Consolidated Financial Statements (continued)

8.  Supplemental Condensed Consolidating Financial Information (continued)

<TABLE>
<CAPTION>
                                                         For the Year Ended December 31, 1999
                                               -----------------------------------------------------------
                                                              Guarantor
                                                  Parent      Subsidiary    Eliminations     Consolidated
                                               -----------------------------------------------------------
<S>                                            <C>            <C>           <C>              <C>
Cash Flows
    Cash provided by operating activities        $   50,291    $  22,047      $       -       $     72,338
    Cash used in investing activities               (61,417)     (81,306)             -           (142,723)
    Cash provided by financing activities            10,971       59,259              -             70,230
                                               -----------------------------------------------------------

    Net change in cash                                 (155)           -              -               (155)
    Cash at beginning of period                         796            -              -                796
                                               -----------------------------------------------------------

    Cash at end of period                        $      641    $       -      $       -       $        641
                                               ===========================================================

<CAPTION>
                                                         For the Year Ended December 31, 1998
                                               -----------------------------------------------------------
                                                              Guarantor
                                                  Parent      Subsidiary    Eliminations     Consolidated
                                               -----------------------------------------------------------
<S>                                            <C>            <C>           <C>              <C>
Cash Flows
    Cash provided by operating activities        $   29,638    $  13,980      $       -       $     43,618
    Cash used in investing activities              (185,222)    (205,188)             -           (390,410)
    Cash provided by financing activities           156,086      191,208              -            347,294
                                               -----------------------------------------------------------
    Net change in cash                                  502            -              -                502
    Cash at beginning of period                         294            -              -                294
                                               -----------------------------------------------------------

    Cash at end of period                        $      796     $      -      $       -       $        796
                                               ===========================================================
</TABLE>

9.  Related Party Transactions

During 2000 and 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.

                                       37
<PAGE>

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

         None.

                                       38
<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.......................  60     Director and Chairman Emeritus of the Board
Gerard E. Holthaus.....................  51     President and Chief Executive Officer; Director and
                                                Chairman of the Board
James N. Alexander.....................  41     Director
Daniel L. Doctoroff....................  42     Director
Michael F. Finley......................  38     Director
Brian Kwait............................  39     Director
James L. Singleton.....................  45     Director
David P. Spalding......................  46     Director
J. Collier Beall.......................  53     Senior Vice President and Southern Division Manager
Joseph F. Donegan......................  50     Senior Vice President and Northern Division Manager
Gerard E. Keefe........................  44     Senior Vice President and Chief Financial Officer
William G. Gessner.....................  42     Vice President-Operations and Information Services
Katherine K. Giannelli.................  40     Vice President-Management Information
Robert W. Hansen.......................  44     Vice President and Western Regional Manager
William C. LeBuhn......................  38     Vice President-Marketing and Human Resources
John B. Ross...........................  51     Vice President and Corporate Counsel
William J. Wyatt.......................  61     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 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. Gossett also serves on the Board of
Directors of Nanofab Inc., DeCorp Inc. and several charitable and

                                       39
<PAGE>

educational institutions.

         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 Meristar Hotels & Resorts, Inc. and Meristar Hospitality Corp.

         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. 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 Velocita Corp. 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

                                       40
<PAGE>

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., HomeRuns. Com, 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 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. 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, 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 Senior Manager.

         Mr. Gessner served as Director of Information Services when he joined
the Company in July 1996. He was Vice President of Information Services from
November 1998 until September 2000 when his role expanded to Vice President of
Operations and Information Services. Mr. Gessner's responsibilities include
overall management of the Company's operations as well as 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 of Management Information since
December, 1999. Her responsibilities are primarily the development and
dissemination of key business information to Company management. For the nine
years prior to her holding her current position,, she was the Controller of the
Company. 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.

                                       41
<PAGE>

         Mr. Hansen has been Vice President and Regional Manager with
responsibility for Sales and Operations on the west coast 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.

                                       42
<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 2000.

<TABLE>
<CAPTION>
                                                                                                  Long Term
                                                                                                 Compensation
                                                                                                    Awards
                                                                                                    ------
                                                                                 Annual           Securities       All Other
                                                                              Compensation        Underlying     Compensation
                                                                              ------------
                                                                Year        Salary     Bonus      Options(1)         $ (2)
                                                                ----        ------     -----      ----------     ------------
<S>                                                             <C>        <C>       <C>          <C>            <C>
Gerard E. Holthaus
President and Chief Executive Officer.......................    2000       $413,600  $103,500           --          $9,433
                                                                1999        371,292   112,500           --           9,183
                                                                1998        274,213   105,000       25,000           8,986

Joseph F. Donegan
Senior Vice President and Northern Division Manager.........    2000        260,609    33,750           --           4,625
                                                                1999        247,387    36,000           --           4,149
                                                                1998        199,064    30,000        7,000           3,346

J. Collier Beall
Senior Vice President and Southern Division Manager.........    2000        258,837    33,750           --           2,637
                                                                1999        244,432    36,000           --           2,270
                                                                1998        216,502    30,000        7,000           3,481

Gerard E. Keefe
Senior Vice President and Chief Financial Officer...........    2000        159,675    40,500           --           4,125
                                                                1999        149,387    45,000           --           3,825
                                                                1998        132,314    40,000        7,000           3,425

Robert W. Hansen
Vice President and Regional Manager.........................    2000        154,447    10,800           --           2,375
                                                                1999        143,880    15,300           --           2,305
                                                                1998        147,580    16,000        2,500           2,240
</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 employer match under the 401(k) plan and a disability
         insurance premium for Mr. Holthaus of $4,058, $4,058 and $3,861 in
         2000, 1999 and 1998, respectively.

                                       43
<PAGE>

              Aggregated Option Exercises in Last Fiscal Year and
                         Fiscal Year-End Option Values



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.

<TABLE>
<CAPTION>
                                               Number of Securities
                                              Underlying Unexercised                      Value of Unexercised
                                                    Options at                            In-the-Money Options
                                                Fiscal Year End (1)                       At Fiscal Year End ($)
Name                                       Exercisable/Unexercisable (2)               Exercisable/Unexercisable(3)
-----------------------                    -----------------------------               ----------------------------
<S>                                        <C>                                         <C>
Gerard E. Holthaus....................           245,290 / 49,200                          8,402,747 / 1,030,919

Joseph F. Donegan ....................            90,700 / 18,200                            3,069,574 / 381,356

J. Collier Beall......................            89,650 / 18,200                            3,020,367 / 381,356

Gerard E. Keefe.......................            78,700 / 16,200                            2,599,970 / 339,449

Robert W. Hansen......................             42,850 / 5,500                            1,544,587 / 115,245
</TABLE>



_____________

(1)    No options were exercised by the Named Executive Officers during fiscal
       2000.
(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 same five periods. All other options became fully vested
       in conjunction with the Recapitalization.
(3)    Based on the estimated fair market value at December 31, 2000.

                                       44
<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 2000,
46,100 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 same five periods. 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 90 days 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 ($10,500 in 2000). All
amounts deferred by a participant 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 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

                                       45
<PAGE>

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 2000, the Company made matching contributions to the 401(k) Plan
participants in an aggregate amount of $477,283.

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, 2000, the total amount deferred under this Plan, including
earnings, was $1,714,740.

Compensation Committee Interlocks and Insider Participation

         During 2000, 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.

                                       46
<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.

<TABLE>
<CAPTION>
                                                                      Shares of
Name                                                                Common Stock                      Percentage
----                                                                ------------                      ----------
<S>                                                                 <C>                               <C>
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)       ......................................           ---                            ---
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)..................................       283,390                           4.40
Joseph F. Donegan (10)(11)(12)...................................        93,250                           1.48
J. Collier Beall (10)(11)(12)....................................        95,200                           1.51
Gerard E. Keefe(10)(11)(12)......................................        80,200                           1.28
Robert W. Hansen (10)(11)(12)....................................        49,000                           0.79

All executive officers and directors as a group..................       932,422                          13.44
</TABLE>

(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

                                       47
<PAGE>

       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.

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

(9)    Such person's address is c/o Pascal-Turner Partners, 3300 Eastern
       Boulevard, Baltimore, Maryland 21220-2825.

                                       48
<PAGE>

(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 245,290, 89,650, 90,700, 78,700, 42,850, and 741,490 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.

                                       49
<PAGE>

Item 13.  Certain Relationships and Related Transactions

The Recapitalization

      Holdings, the Odyssey Investor 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.


Investor Stockholders Agreement

                                       50
<PAGE>

         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 the Odyssey Investor 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.
         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

                                       51
<PAGE>

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 2000, 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, 2000. Mr. Gossett
currently serves as Chairman Emeritus of the Company's Board of Directors.

                                       52
<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 2000.

              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-l, 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 to the annual
                    report on Form 10-K of Williams Scotsman, Inc. (Commission
                    Act File No.: 33-68444) for the year ended

                                       53
<PAGE>

                      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 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)).

                                       54
<PAGE>

         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).

         10.10 --      Third Amendment to Credit Agreement dated as of January
                       26, 2001. (Incorporated by Reference to Exhibit 99.1 of
                       the Company's Form 8-K dated February 12, 2001).

         12.1  --      Statement regarding computation of ratios.

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

                                       55
<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 30, 2001

         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.

<TABLE>
<CAPTION>
         Name                       Capacity                                    Date
         ----                       --------                                    ----
<S>                                 <C>                                         <C>
/s/ Gerard E. Holthaus              Chairman, President, Chief                  March 30, 2001
--------------------------
Gerard E. Holthaus                  Executive Officer and Director

/s/ Gerard E. Keefe                 Senior Vice President and                   March 30, 2001
--------------------------
Gerard E. Keefe                     Chief Financial Officer

/s/ Glenn A. Schultz                Controller                                  March 30, 2001
--------------------------
Glenn A. Schultz

/s/ Barry P. Gossett                Chairman Emeritus of the                    March 30, 2001
--------------------------
Barry P. Gossett                    Board

/s/ James N. Alexander              Director                                    March 30, 2001
--------------------------
James N. Alexander

/s/ Daniel L. Doctoroff             Director                                    March 30, 2001
--------------------------
Daniel L. Doctoroff

/s/ Michael F. Finley               Director                                    March 30, 2001
--------------------------
Michael F. Finley

/s/ Brian Kwait                     Director                                    March 30, 2001
--------------------------
Brian Kwait

/s/ James L. Singleton              Director                                    March 30, 2001
--------------------------
James L. Singleton

/s/ David P. Spalding               Director                                    March 30, 2001
--------------------------
David P. Spalding
</TABLE>
<PAGE>

<PAGE>

                   WILLIAMS SCOTSMAN, INC. AND SUBSIDIARIES

                Schedule II - Valuation and Qualifying Accounts

<TABLE>
<CAPTION>
                                                                        Year ended December 31,
                                                                ---------------------------------------
                                                                2000              1999             1998
                                                                ----              ----             ----
                                                                            (In thousands)
<S>                                                             <C>              <C>             <C>
Allowance for Doubtful Accounts:
     Balance at beginning of the period                         $ 1,058          $   839         $   253
     Provision charged to expense                                 3,697            3,756           2,329
     Acquired allowance                                               -              115           1,262
     Accounts receivable written-off, net
        of recoveries                                            (3,772)          (3,652)         (3,005)
                                                                 -------         --------        -------

     Balance at end of the period                               $   983          $ 1,058         $   839
                                                                =======          =======         =======
</TABLE>

                                      60