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


         [X]      ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

                         SECURITIES EXCHANGE ACT OF 1934

                   For the fiscal year ended December 31, 2003

                                       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: 033-78954

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


                   Delaware                                     52-1862719
       (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]

     Indicate by check mark whether the registrant is an  accelerated  filer (as
defined in Rule 12b-2 of the Act). Yes__ No X


     As of March 25, 2004,  6,194,799  shares of the  Registrant's  common stock
were   outstanding.   There  were  143,907   shares  of  common  stock  held  by
non-affiliates of the Registrant.

<PAGE>



SAFE HARBOR STATEMENT - CAUTIONARY NOTICE REGARDING FORWARD-LOOKING STATEMENTS

     Some of the  statements  in this Form 10-K for the year ended  December 31,
2003 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").
These 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 these forward-looking  statements.  These
factors  include,  among others,  the  following:  substantial  leverage and our
ability to service debt;  changing market trends in the mobile office  industry;
general  economic and business  conditions  including a prolonged or substantial
recession;  our ability to finance fleet and branch  expansion and to locate and
finance acquisitions;  our ability to implement our business and growth strategy
and  maintain  and  enhance  our  competitive  strengths;  our ability 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 we nor any other person assumes  responsibility  for
the accuracy and completeness of these forward-looking statements. Consequently,
you should not place undue reliance on these forward-looking  statements,  which
speak only as of the date hereof. We undertake 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.





<PAGE>


                                     PART I
Item 1.  Business

General

     Scotsman  Holdings,  Inc.  (Holdings)  was  incorporated  under the laws of
Delaware in November 1993 for the purpose of acquiring Williams  Scotsman,  Inc.
("Scotsman,"   individually;   "the  Company"  or  "we"  collectively  with
Holdings).  Holdings  conducts  business solely as a holding  company.  Its only
significant  asset is the  capital  stock of  Scotsman.  Therefore,  Holdings is
dependent upon the cash flows of Scotsman for all of its cash needs.

     Scotsman was formed by the 1990 merger of Williams Mobile Offices, Inc.,
referred to as "Williams," and Scotsman Manufacturing,  Inc. Both companies were
founded  in the  mid-1940s.  At the  time of the  combination,  Williams  had 17
offices  located  in  13  Eastern  states  and  15,000  rental  units.  Scotsman
Manufacturing  had 11 offices  located in four  Western  states and 7,500 rental
units.  Both Williams and Scotsman  Manufacturing  had mobile office  leasing as
well as manufacturing and modular building operations. Subsequent to the merger,
we made the strategic  decision to close our manufacturing  facilities and focus
on core leasing activities.

     We are currently the second  largest lessor of mobile office units in North
America with units leased through a network of branch offices located throughout
the United  States and Canada.  Our mobile  office units  provide high  quality,
cost-effective  relocatable  space solutions to an estimated 24,000 customers in
450 industries, including construction, education, commercial and industrial and
government.  Our leasing  operations  have generated  recurring  revenues,  high
levels  of  repeat   business  and  an  average   existing   lease  duration  of
approximately 23 months. In addition to our core leasing operations, we sell new
and previously leased mobile office units and provide delivery, installation and
other ancillary products and services.

     Our mobile office fleet is generally  comprised of standardized,  versatile
products that can be configured  to meet a wide variety of customer  needs.  The
units are fitted with axles and hitches and are towed to various locations. Most
units are wood  frame  mounted on a steel  chassis,  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  generally  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 our mobile office units is approximately 9
years while the average age of the storage units is  approximately 11 years. The
average age of the total fleet is approximately 9 years.

     From 1997 to 2003, we increased  revenues at a compound annual growth rate,
or  "CAGR," of 10.8% to $437.8  million.  Over the same  period,  cash flow from
operating  activities increased at a CAGR of 14.8% to $74.3 million and Adjusted
EBITDA, as defined in Item 7 - Liquidity and Capital  Resources,  grew at a CAGR
of 8.6% to $151.5  million.  The number of lease  fleet units  increased  93% to
91,000 units.  We have achieved this growth by expanding our lease fleet through
factory  purchases and  acquisitions,  expanding our branch network,  increasing
ancillary high margin services and product lines and improving fleet management.

     Based on its experience, management believes that the North American mobile
office industry (excluding manufacturing  operations) exceeds $3.0 billion. This
is primarily  driven by positive  demographic  trends,  economic  expansion,  an

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<PAGE>

increase  in  the  number  of  applications  for  modular  space  and a  greater
recognition of the product's  positive  attributes.  By outsourcing  their space
needs, our customers are able to achieve flexibility,  preserve capital for core
operations, and convert fixed costs into variable costs.

Recapitalization

     In  December  1993,  Odyssey  Partners,  L.P.,  together  with  management,
acquired  all of the  common  stock of  Holdings,  Inc.,  which owns 100% of the
outstanding voting securities of Scotsman.

     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.  Pursuant  to the May  1997  recapitalization,  an
investor  group,  which  included  affiliates  of The Cypress  Group L.L.C.  and
Keystone,  Inc.,  acquired a  significant  equity stake in Holdings.  In related
transactions,  we purchased or repaid all of the  outstanding  indebtedness.  In
conjunction with the debt extinguishment, we recognized an extraordinary loss of
$13.7 million.  The transactions  described above are  collectively  referred to
herein as the "Recapitalization".

Expansion and Acquisitions

     Since the 1997  recapitalization,  Scotsman  has added  several  100% owned
subsidiaries,  including  Willscot  Equipment  LLC or  "Willscot",  Space Master
International,  Inc.,  or "SMI,"  Williams  Scotsman of Canada,  Inc., or "WSC,"
Evergreen Mobile Company,  or "Evergreen," and Truck and Trailer Sales, Inc., or
"TNT."  Willscot  was  created  in 1997 as part of the  recapitalization  of our
company  and WSC was  formed  in April  1998 to  begin  our  expansion  into the
Canadian marketplace.  We acquired SMI, a privately held Georgia corporation, on
September 1, 1998 for total consideration of $272.7 million adding approximately
12,800 units to our lease fleet. On February 1, 1999, we acquired  Evergreen,  a
privately held Washington corporation with a 2,000 unit mobile office fleet, for
$36.2  million.  TNT was  acquired in August of 2000 for $8.6  million and added
1,000 units to our lease fleet. SMI,  Evergreen and TNT currently have no assets
or operations.

     In addition,  we have completed  several asset  acquisitions  over the past
five years as a complement  to our internal  fleet growth and branch  expansion,
the most significant of which was Mckinney Mobile Modular, or "Mckinney," with a
fleet of 1,600 units. We purchased the sales and leasing business of Mckinney, a
privately  held   California   corporation,   on  February  1,  2001  for  total
consideration  of $26.1 million.  On July 31, 2002 we acquired the mobile office
and  storage   product  fleet  of  Northgate   Industries   Ltd.,  an  Edmonton,
Alberta-based  Canadian  company  that was  involved  in the  leasing  of mobile
offices to industrial  markets.  The transaction  added over 500 units for a net
purchase  price of $7.0 million.  On May 29, 2003 we purchased the mobile office
leasing fleet business of AFA Locations Inc, a Montreal-based  Canadian company.
The purchase price was $3.2 million and the transaction added  approximately 300
units.


Competitive Strengths

     Market Leadership.  We are one of two national  operators  competing in the
highly  fragmented  mobile  office  industry and believe our lease fleet is more
than three times  larger than that of our next  largest  competitor.  We are the
first or second  largest  provider of leased fleet units in most of our regional
markets.

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<PAGE>

     National Presence and Customer Diversity. Our national presence provides us
with the  benefits of (1)  customer  and  geographic  diversification,  (2) less
sensitivity to regional  economic  downturns,  (3) the ability to redeploy units
within our branch network to optimize utilization levels in response to regional
economic  downturns,  which  reduces  the need for new  unit  purchases  and (4)
economies of scale. We have an estimated 24,000 customers,  the largest of which
accounted for only 1.8% of 2003 revenues.

     Effective Fleet Management. Our lease fleet is actively managed to maximize
customer satisfaction,  optimize fleet utilization and improve fleet quality and
flexibility.    Our   proprietary   management   information   system   provides
comprehensive   fleet  statistics  and  lease   information  that  allow  us  to
effectively monitor and allocate our units through our branch network.

     We maintain a number of fleet  management  initiatives  designed to improve
operations  and  increase   profitability,   including  (1)  standardization  of
products,  (2) maintaining fleet quality, (3) portability of fleet and (4) fleet
pruning. These initiatives are outlined in more detail below:

     o    Emphasis on  Standardization  of Products.  We focus on  maintaining a
          standardized lease fleet through a combination of new fleet purchasing
          guidelines  and the  conversion  of any  non-standard  units into more
          standard  configurations.  Product standardization allows us to easily
          modify  our  structures  to meet  specific  customer  needs  and  thus
          increase utilization.  Conversions of existing units from non-standard
          to standardized units can be completed,  on average,  at less than the
          cost of purchasing new units. Overall, we believe that the majority of
          our fleet is comprised of standardized, highly versatile products.

     o    Fleet  Quality.  Because we believe  that rental  rates are based upon
          physical  condition rather than age, we monitor our fleet on a regular
          basis,  refurbishing units and conducting targeted sales programs,  as
          necessary.

     o    Portability  of Fleet and Fleet  Redeployment.  We  capitalize  on our
          nationwide  franchise  and  inventory  management  systems by actively
          redeploying  excess  fleet to areas of  higher  customer  demand.  The
          portability  and  standardized  nature of the units  allow  them to be
          relocated to surrounding  areas at relatively low cost,  thus allowing
          us to minimize capital  expenditures for new fleet purchases.  As part
          of our fleet purchasing and conversion  activities,  we generally have
          our units built or converted to meet industrialized building codes for
          use in several surrounding states, thus allowing them to be redeployed
          as necessary.

     o    Fleet  Pruning.  From time to time,  we will sell excess or idle units
          from our fleet.  Pruning  activities  allow us to manage fleet quality
          and composition.

     Dedicated  Marketing and Customer Service.  Through extensive marketing and
customer  service  programs,  we focus on  maintaining  and expanding  long-term
customer  relationships.  We also maintain a full-service national support staff
to prepare  units for lease and  maintain  units while on lease.  As a result of
this extensive customer service, our leasing operations have generated recurring
revenues due to high levels of repeat business.

     Experienced Management. Since 1997, the current management team has doubled
the size of our  fleet  and  increased  the  size of our  branch  network,  both
organically  and through  selective  strategic  acquisitions.  Management  holds
personal equity investments  equivalent to approximately a 12% share of Holdings
on a fully diluted basis. We believe that this represents a significant economic
commitment to and confidence in our company.

                                       4
<PAGE>

Operating Strategy

     Due to the local and  regional  nature  of our  business,  our goals are to
become the leader in each of the local markets in which we compete and to expand
our coverage to additional local markets. To achieve market leadership,  we have
implemented  a  strategy   which   emphasizes  (1)  superior   service,   (2)  a
well-maintained,  readily-available  and  versatile  lease fleet,  (3) effective
fleet  management  using  proprietary  information  systems,  and  (4)  targeted
marketing  through an experienced  and motivated sales force. We believe that we
are generally the first or second largest provider of relocatable  space in each
of our regional markets as measured by lease fleet size and revenues. Our branch
offices are distributed  throughout the United States and Canada and are located
in a majority of the major metropolitan areas.

     Given recent  economic  trends,  we  implemented a strategic  initiative to
dispose of selected  rental units in our lease fleet which we have determined no
longer merit  further  investment.  In  accordance  with  Statement of Financial
Accounting  Standards (SFAS) No. 144 - Accounting for the Impairment or Disposal
of Long Lived Assets, we plan to sell to one or more buyers  approximately 2,900
units  within a year of December 31, 2003,  the  effective  date of the disposal
initiative.

     Management's business and growth strategy includes the following:

     Fleet and  Branch  Expansion.  We plan to  continue  to  capitalize  on the
industry's  favorable long-term growth trends by increasing customer penetration
and fleet size in existing markets. In addition, we plan to open branches in new
markets where  positive  business  fundamentals  exist.  From January 1, 2000 to
December 31, 2003, we increased the number of units from approximately 79,600 to
91,000 as a result of  general  fleet  expansion  and to a much  lesser  extent,
through acquisitions.

     Selective Fleet  Acquisitions.  To complement our internal fleet and branch
expansion, we plan to continue to capitalize on the industry's fragmentation and
expand  our  geographic  coverage  by making  selective  acquisitions  of mobile
offices and storage  product  lease  fleets.  Typically,  there is a low cost of
integrating  acquired  fleets and  acquired  units  have  existing  leases  that
generate immediate revenues.  From January 1, 2000 to December 31, 2003, we made
five acquisitions of approximately  3,800 units for a total fleet purchase price
of  $39.6  million.   Units  added  through   acquisitions  have  accounted  for
approximately 14% of the value of our total fleet purchases during this period.


     Storage  and  Ancillary  Products.  We continue  to  diversify  our product
offerings and deliver  ancillary  products and services to leverage our existing
branch network.  Since January 1, 2000, we have grown our storage product fleet,
which provides  secured  storage space,  from 15,200 units to 20,200 at December
31,  2003.  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.


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<PAGE>
     Education Market Trends.  The education market accounted for  approximately
23% of our 2003  revenues.  We believe that the  education  market offers growth
opportunities  as a result of the  following:  (1) state and local  governmental
pressures  to  find  cost-effective  ways  to  expand  classroom  capacity,  (2)
increased interstate and intrastate migrations  necessitating rapid expansion of
education space and (3) the predicted growth of the school age population.


Recession Resistance

     Although a portion of our business is with customers in industries that are
cyclical  in  nature  and  subject  to change in  general  economic  conditions,
management  believes that certain  characteristics  of the mobile office leasing
industry  and our  operating  strategies  should help to mitigate the effects of
economic downturns.  These characteristics  include (1) our typical lease terms,
which  include  contractual  provisions  requiring  customers to retain units on
lease for, on average, 13 months, and have an average existing lease duration of
23 months,  (2) the flexibility and low cost offered to our customers by leasing
which may be an attractive alternative to capital purchases,  (3) our ability to
redeploy  units during  regional  recessions,  (4) the diversity of our industry
exposure and (5) the geographic balance of our operations.

Products

     Our  products  can be used to meet a  variety  of  customer  needs.  Sample
applications  include classrooms,  construction site offices,  sales offices and
special  events  headquarters.  Our mobile office fleet ranges from  single-unit
facilities to section modular  structures,  which combine two or more units into
one structure for applications that require more space. Units typically range in
size from 8 to 14 feet in width and 16 to 70 feet in  length  and are  generally
wood  frame  mounted on a steel  chassis,  constructed  using a steel  frame and
undercarriage  with an exterior of wood or  aluminum.  The units are fitted with
axles and  hitches  and are  towed to  various  locations.  Most  units  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 extremely durable and have an estimated  economic useful
life of generally  20 years.  During 2003,  the average  purchase  price for new
mobile  office units  (excluding  storage  products) was $14,200 and the average
mobile office unit was leased for approximately  $300 per month,  although rates
vary depending upon size, product type, features and geographic region. Products
have varying lease terms, with average contractual terms of 13 months.  However,
most customers retain the product for a longer period as evidenced by an average
existing lease duration of 23 months at December 31, 2003.


     Our specific product offerings are described below:

     Single-Wide  Mobile  Offices.  Single-wide  mobile  offices  are  the  most
functional and versatile  units in our lease fleet.  Units  typically have "open
interiors" which can be modified using movable  partitions.  Single-wide  mobile
offices include tile floors, air conditioning/heating  units, partitions and, if
requested, toilet facilities.

     Section Modulars.  Section modulars are two or more units combined into one
structure.  Interiors are  customized to match the customer  needs.  Examples of
section  modular units  include  hospital  diagnostic  annexes,  special  events
headquarters, golf pro shops and larger general commercial offices.

     Classrooms.  Classroom units are generally  standard single- or double-wide
units adapted specifically for use by school systems or universities.  Classroom
units usually feature  chalkboards  and teaching aids, air  conditioning/heating
units, windows along side-walls and, if requested, toilet facilities.

     Sales Offices.  Sales offices are marketed to businesses  that require site
located space for sales  presentations.  Exteriors are typically wood-sided with
some models offering recessed front entries.

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     Our "Executive Line" sales offices are larger,  more expensive  versions of
the standard sales office with more amenities.

     Storage  Products.  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.

Branch Network

     As a key element to our market leadership  strategy,  we maintain a network
of over 80 branch offices throughout the United States and Canada.  This network
enables us to increase our product  availability and customer service within our
regional and local markets. Customers benefit because they are provided with (1)
improved service availability,  (2) reduced time to occupancy, (3) better access
to sales  representatives,  (4) the ability to inspect units prior to rental and
(5) lower  freight costs which are  typically  paid by the customer.  We benefit
because  we are able to spread  regional  overhead  and  marketing  costs over a
larger  lease  base,  redeploy  units  within  our branch  network  to  optimize
utilization,  discourage  potential  competitors by providing ample local supply
and offer profitable  short-term leases which would not be profitable  without a
local market presence.

     Management  believes  geographic  diversification  of  our  branch  network
mitigates  economic and operating  risk. In 2003, the  Northeast,  Mid Atlantic,
Southeast, South Central, West, North Central and Canadian regions accounted for
20%, 14%, 20%, 10%, 20%, 11%, and 5% of our revenues, respectively.

     Our branches are generally headed by a dedicated branch manager. The branch
system is supervised by six U.S.  regional vice presidents and an executive vice
president  who  average 19 years of  industry  experience  and 12 years with our
company.  Management  believes it is important to encourage employees to achieve
revenue  and  profit  levels  and to  provide  a high  level of  service  to our
customers.  Approximately  30% of the regional  managers'  compensation is based
upon the financial performance of their branches and approximately 45% of branch
managers'  compensation  is tied  to  budgeted  Adjusted  EBITDA  levels.  Sales
representatives'  compensation  is  commission  driven  and  based on the  gross
profits of new business.

Operations

     Leasing.  Leasing  revenue is a function of average  monthly  rental  rate,
fleet size and  utilization.  We monitor fleet  utilization at each branch.  For
2003,  average  fleet  utilization  was 76.6%.  While we adjust  our  pricing to
respond  to local  competition  in our  markets,  we believe  that we  generally
achieve a rental rate equal to or above that of our  competitors  because of the
quality of our products and our high level of customer service.

     As part of our leasing  operations,  we sell used mobile  office units from
our lease  fleet  either at fair  market  value  or,  to a much  lesser  extent,
pursuant to pre-established  lease purchase options included in the terms of its
lease agreements.  Due in part to an active fleet maintenance program, our units
maintain a significant  percentage of their  original  value which  includes the
cost of the  units  as well as  costs of  significant  improvements  made to the
units.

     New Unit Sales. New unit sales include sales of  newly-manufactured  mobile
office units.  We do not  generally  purchase new units for resale until we have
obtained firm purchase  orders  (which are  generally  non-cancelable)  for such

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units. New mobile units are generally  purchased more heavily in the late spring
and  summer   months  due  to  seasonal   classroom  and   construction   market
requirements.

     Delivery and Installation. We provide delivery, site-work, installation and
other  services to our  customers  as part of our leasing and sales  operations.
Revenues   from   delivery,   site-work   and   installation   result  from  the
transportation of units to a customer's  location,  site-work  required prior to
installation  and  installation  of the mobile  units  which have been leased or
sold.  Typically  units are placed on temporary  foundations  constructed by our
service  technicians,  and service  personnel  will also  generally  install our
ancillary products. We also derive revenues from tearing down and removing units
once a lease expires.

     Other. We also derive revenue from the sale of other products and services,
including  rental of steps,  furniture and ramps;  sales of parts,  supplies and
security systems;  and charges for granting insurance waivers (i.e.,  charging a
fee to customers  who do not provide their own  insurance  certificate)  and for
damage billings.




Capital Expenditures and Acquisitions

     We  closely  monitor  fleet  capital  expenditures,   which  include  fleet
purchases and capitalizable costs of improvements to existing units.  Generally,
fleet purchases are controlled by field and corporate executives,  and must pass
our fleet purchasing  policy guidelines (which include ensuring that utilization
rates  and  unrentable   units  levels  are   acceptable,   that   redeployment,
refurbishment  and  conversion  options have been  evaluated,  and that specific
return on  investment  criteria  have been met).  We purchase our units  through
approximately  50 third-party  suppliers  (most suppliers have only one factory,
which  generally  serves a market within 300 to 400 miles),  with no significant
dependence  on  any  supplier.  The  top  three  suppliers  of  units  for  2003
represented  approximately 39% of all fleet purchases, and the top ten suppliers
represented approximately 73% of all fleet purchases. We believe that we have an
excellent working relationship with our suppliers.

     We believe  that our fleet  purchases  are  flexible and can be adjusted to
match business needs and prevailing economic conditions.  We are not "locked in"
to long-term  purchase  contracts with  manufacturers and can modify our capital
spending  activities to meet  customer  demand.  For example,  our fleet capital
expenditures   decreased   from   approximately   $105.5   million  in  2001  to
approximately  $40.8 million in 2002 and then increased to  approximately  $53.3
million in 2003.

     We supplement our fleet spending with acquisitions. Although the timing and
amount of  acquisitions  are  difficult  to predict,  management  considers  its
acquisition  strategy to be  opportunistic  and will  adjust its fleet  spending
patterns as acquisition opportunities become available.

Marketing

     In addition to opening new branches,  we use a number of marketing tools to
generate new  business  and  customers.  By  maintaining  a detailed and updated
customer and prospect tracking system,  marketing and sales personnel  generally
can  identify  when a  particular  customer or prospect  typically  utilizes our
products and may contact such customer or prospect regarding their future needs.

     Through our marketing and sales efforts we have  successfully  expanded the
uses for our products.  For example,  since 1993,  the number of industries  (as
measured by SIC code) that lease or purchase our products has increased from 360

                                       8
<PAGE>

to 450. Additionally, we expect to continue to increase our penetration of other
industries  that would benefit from the usage of our products.  See  "--Customer
Base."

     Developing  new  customers is an integral  part of the sales process and is
monitored  through  the use of  quarterly  goals for each  employee  with  sales
responsibility.  In  addition to our  prospect  tracking  databases,  we conduct
direct mail campaigns and are a heavy user of print  advertising,  including the
yellow  pages and customer  trade  publications.  We have  developed a toll-free
telephone  number  network so that our  customers  can call and speak to a sales
representative  in the  branch  location  nearest  the site  where  the call was
placed.  In addition,  we  participate  in numerous  regional and national trade
shows,   and  our  sales  personnel   participate  in  local  trade  groups  and
associations.


We also design marketing campaigns targeted at specific market niches.

     During  1996,  we began  developing  national  accounts.  To date,  we have
established  approximately  270  national  accounts and continue to pursue other
national account relationships.  The relationships are coordinated by a national
account manager and serviced by the branch network.  Due to our broad geographic
capabilities,  this program  allows us to further  differentiate  ourselves from
many of our  "mom-and-pop"  competitors  by  providing  consistent  service on a
national basis.

Customer Base

     We continually  seek to expand our customer base and the  applications  for
our products.  Our customer base is comprised of an estimated 24,000  companies,
which operate in approximately 450 industries,  a significant increase over 1993
levels of 7,700  customers in 360 industries.  We believe that the  construction
and education industries accounted for approximately 32% and 23%,  respectively,
of total revenues in 2003, and that no other industry accounted for more than 6%
of total revenues in 2003.  During 2003, no single  customer  accounted for more
than  2% of  our  total  revenues  and  our  top  ten  customers  accounted  for
approximately 7% of total revenues.

Our key customer industries as categorized by SIC Code are as follows:

     Commercial/Industrial  and  Other.  This  category  includes  a variety  of
industries  and product uses which help  diversify  our revenue  stream.  Common
examples   include:   entertainment,   recreation,   transportation   terminals,
recycling,  retail and fast food  establishments,  metal processing and refining
and disaster relief. Although there are a number of different industries in this
category,  we believe  that no single  industry  included in this  category  was
material to us in 2003.

     Construction.  We provide  office  and  storage  space to a broad  array of
contractors  associated  with both  residential  and  nonresidential  buildings,
commercial  offices  and  warehouses;   highway,   street,   bridge  and  tunnel
contractors; water, sewer, communication and power line contractors; and special
construction  trades,  including glass,  glazing and demolition.  We believe our
construction  customer base is  characterized  by a wide variety of contractors,
who are associated with original construction as well as capital improvements in
the commercial, institutional, residential and municipal arenas.

     Education.  Rapid and  unpredictable  shifts in  populations  within states
often  necessitate  quick  expansion of  education  facilities  particularly  in
elementary  and  secondary  schools.  State  and  local  governmental  budgetary
pressures  have made  mobile  offices,  especially  multi-sectional  offices,  a
convenient and  cost-effective  way to expand classroom,  laboratory and library
capacity.  Our quality  products are well suited for  educational  institutions,
which demand a high level of maintenance and service support.

                                       9
<PAGE>


     Professional  Services.  Customers in this category  include  professionals
from a broad array of industry  sectors  including  engineering,  architectural,
accounting, legal, insurance and sales.

     Health Care.  Health care customers are frequent  users of  multi-sectional
facilities as  administrative  offices,  waiting rooms, MRI and other diagnostic
annexes adjacent to existing hospitals.

     Utilities.  Mobile  offices  have  traditionally  been leased to  utilities
involved in electrical  service,  natural gas distribution  and production,  and
other energy-related  services.  Units are used as meeting rooms,  reception and
visitor  centers,   security  offices  and,  during  periods  of  utility  plant
reconstruction, as facilities to house the operations staff.

     Government.  Governmental users consist of federal,  state and local public
sector organizations such as the United States  Environmental  Protection Agency
and state highway administrations. We have enjoyed particular success in focused
niches such as prisons and jails,  courthouses,  national security buildings and
NASA  facilities.   Our  strategy  of  concentrated   regional  focus  has  been
particularly successful in gaining business from local governmental customers.

     Chemical and  Pharmaceutical.  Chemical and  pharmaceutical  companies have
been long-time users of temporary office space.  Mobile offices are particularly
well suited for  laboratory  usage  where space is needed for the  duration of a
specific project or for an off-site or isolated laboratory.


Fleet Management Information Systems

     Our fleet information  system is instrumental to our lease fleet management
and targeted  marketing efforts and allows  management to monitor  operations at
our branches on a daily,  weekly,  and monthly basis. Lease fleet information is
updated  daily at the  branch  level and  verified  through  a monthly  physical
inventory by branch personnel.  This provides  management with on-line access to
utilization, lease fleet unit levels and rental revenues by branch or geographic
region. In addition,  an electronic file for each unit showing its lease history
and current  location/status  is maintained in the  information  system.  Branch
salespeople   utilize   the  system  to  obtain   information   regarding   unit
availability. The database tracks individual units by serial number and provides
comprehensive information including cost, condition and other financial and unit
specific information.

Regulatory Matters

     We must comply with various federal, state and local environmental,  health
and safety laws and regulations in connection  with our  operations.  We believe
that we are in  substantial  compliance  with  these  laws and  regulations.  In
addition  to   compliance   costs,   we  may  incur  costs  related  to  alleged
environmental  damage associated with past or current properties owned or leased
by us. We believe that our liability, if any, for any environmental  remediation
will not have a material adverse effect on our financial condition.  However, we
can  not  be  certain  that  the  discovery  of  currently  unknown  matters  or
conditions,  new laws and regulations,  or stricter  interpretations of existing
environmental  laws will not have a material  adverse  effect on our business or
operations in the future.

     A portion of our units are subject to  regulation  in certain  states under
motor vehicle and similar  registrations  and certificate of title statutes.  We
believe that we have  complied in all material  respects  with all motor vehicle
                                       10
<PAGE>


registration  and similar  certificate  of title  statutes in states  where such
statutes  clearly apply to mobile office units.  We have not taken actions under
such statutes in states where it has been  determined  that such statutes do not
apply to mobile office units.  However,  in certain states, the applicability of
such statutes to our mobile  office units is not clear beyond doubt.  Due to the
difficulty,  expense and burden of complying with all possible motor vehicle and
certificate  of title  requirements  in such  states,  we do not take  action to
comply  with  every  possible  motor  vehicle  and  similar   registration   and
certificate  of  title   requirement  in  such   jurisdictions.   If  additional
registration and related  requirements are deemed to be necessary in such states
or if the laws in such  states or other  states  were to change to require us to
comply with such requirements, we could be subject to additional costs, fees and
taxes as well as  administrative  burdens in order to comply with such  statutes
and  requirements.  We do not  believe  the  effect of such  compliance  will be
material to our business and financial condition.

Competition

     Although our competition varies  significantly by market, the mobile office
industry,  in general, is highly  competitive.  We compete primarily in terms of
product availability, customer service and price. We believe that our reputation
for customer service and our ability to offer a wide selection of units suitable
for  various  uses at  competitive  prices  allows  us to  compete  effectively.
However,  our primary  competitor,  GE Capital Modular Space, is less leveraged,
has greater market share or product availability in some markets and has greater
financial resources and pricing flexibility than us.

Employees

     As of December 31, 2003 we had approximately  1,150 employees.  None of our
employees are covered by a collective bargaining agreement.  Management believes
its  relationship  with our  employees is good.  We have never  experienced  any
material  labor  disruption  and are unaware of any efforts or plans to organize
our employees.

Risk Factors

Risks Relating to Our Indebtedness

Our  substantial debt could adversely affect our financial  health.
------------------------------------------------------------------
          We have a substantial amount of debt. As of December 31, 2003,  we had
          $962.2 million of indebtedness.

          Our substantial debt could have important consequences including:

     o    making our company more  vulnerable  to general  adverse  economic and
          industry conditions;

     o    limiting our ability to obtain additional financing for future working
          capital,  capital  expenditures,   strategic  acquisitions  and  other
          general corporate requirements;


     o    exposing us to interest rate fluctuations  because the interest on the
          debt under our credit facility is at variable rates;

     o    requiring us to dedicate a  substantial  portion of our cash flow from
          operations to payments on our debt,  thereby reducing the availability
          of our cash flow for operations and other purposes;

                                      11
<PAGE>

     o    limiting our  flexibility  in planning for, or reacting to, changes in
          our business; and

     o    placing us at a competitive  disadvantage  compared to any competitors
          that have less debt.


We may incur additional debt.
----------------------------
          We may be able to  incur substantial  additional  indebtedness  in the
          future. The terms of the indentures  governing our 9.875% senior notes
          due 2007 and our 10.0%  senior  secured  notes due 2008  (collectively
          referred to as the "Senior  Notes")  permit us to incur a  substantial
          amount  of  additional  debt  and  our  credit  facility  will  permit
          additional borrowings under certain circumstances.  As of December 31,
          2003, we had $231.4 million of additional  borrowing base (collateral)
          availability  under  our  credit  agreement.   However,   Consolidated
          Leverage ratio covenant restrictions limit our borrowing  availability
          under the credit  agreement  at December  31,  2003 to $57.9  million.
          Accordingly,  this additional  indebtedness,  if issued, could further
          exacerbate all the risks described above.


The indentures  governing  the  Senior  Notes  and  our credit facility  contain
various  covenants which limit the discretion of our management in operating our
business  and could  prevent us from  engaging  in some  beneficial  activities.
-------------------------------------------------------------------------------

     The   indentures   governing   the  Senior   Notes and our credit  facility
     contain  various   restrictive   covenants  that  limit  our   management's
     discretion in operating our business. In particular,  these agreements will
     limit our ability to, among other things:

          o    incur additional debt or guarantee obligations;

          o    grant liens on assets;

          o    make  restricted   payments   (including   paying  dividends  on,
               redeeming, repurchasing or retiring our capital stock);

          o    make investments or acquisitions;

          o    sell assets;

          o    engage in transactions with affiliates; and

          o    merge, consolidate or transfer substantially all of our assets.

     In  addition,  our  credit facility  also  requires  us to maintain certain
     financial ratios and limits our ability to make capital expenditures. If we
     fail to comply with the restrictions of the indentures governing the Senior
     Notes, our credit facility or any other subsequent financing agreements,  a
     default  may  allow  the  creditors,  if  the  agreements  so  provide,  to
     accelerate  the  related  debt  as  well  as any  other  debt  to  which  a
     cross-acceleration  or cross-default  provision applies.  In addition,  the
     lenders may be able to terminate any commitments they had made to supply us
     with further funds.


Our ability to service our debt requires a significant amount of cash.
---------------------------------------------------------------------
     To service our debt, we require a significant amount of cash.  Our  ability
     to generate  cash, make scheduled payments or to refinance our  obligations
     depends on our successful  financial and operating  performance.  We cannot
     assure you that our operating performance,  cash flow and capital resources
     will be sufficient for payment of our debt in the future. Our financial and
     operating  performance,   cash  flow  and  capital  resources  depend  upon
     prevailing economic conditions,  and certain financial,  business and other
     factors, many of which are beyond our control. These factors include, among
     others:

                                       12
<PAGE>

          o    economic and competitive  conditions  affecting the mobile office
               industry;

          o    operating  difficulties,  increased  operating  costs or  pricing
               pressures we may experience; and

          o    a decline in the resale value of our units.

     Our  estimated   debt  service   obligations  for  2004 are $85.4  million,
     based on (1) the projected average  outstanding balance of the Senior Notes
     for 2004, (2) an interest rate of approximately 5% on our projected average
     outstanding  variable  rate  debt  for  2004 and (3)  scheduled  term  loan
     repayments in 2004.  Our annual debt service  obligations  will increase by
     $2.6 million per year for each 1% increase in interest rates,  based on the
     balance of variable rate debt outstanding at December 31, 2003. If our cash
     flow and  capital  resources  are  insufficient  to fund  our debt  service
     obligations, we may be forced to reduce or delay capital investments,  sell
     material assets or operations, obtain additional capital or restructure our
     debt.  In the event that we are  required to dispose of material  assets or
     operations  or  restructure  our debt to meet our debt  service  and  other
     obligations,  we cannot assure you as to the terms of any such  transaction
     or how soon any such  transaction  could be  completed.  See  "Management's
     Discussion   and   Analysis   of   Financial   Condition   and  Results  of
     Operations--Liquidity and Capital Resources."



Risks Relating to Our Business

Elements of our business are sensitive to general economic conditions.
---------------------------------------------------------------------
     A  portion   of  our  revenues  are  derived  from  customers  who  are  in
     industries  and  businesses  that are  cyclical  in nature  and  subject to
     changes in general economic conditions,  such as the construction industry.
     In addition,  because we conduct our operations in a variety of markets, we
     are subject to economic  conditions in each of these  markets.  Although we
     believe   that   certain  of  our   operating   strategies   and   industry
     characteristics  may help to mitigate  the  effects of economic  downturns,
     general economic downturns or localized  downturns in markets where we have
     operations,  including any downturns in the  construction  industry,  could
     have  a  material  adverse  effect  on us  and  our  business,  results  of
     operations  and  financial  condition.  In  particular,  as a result of the
     recent recession and its impact on the construction industry, our financial
     results have been adversely impacted.  In addition,  at the present time we
     are unable to predict  what  long-term  effect,  if any,  recent  political
     events,  including  those relating to, or arising out of the growing threat
     of terrorism,  and their attendant  consequences will have on our business.
     Any of the  foregoing  economic or  political  events could have a material
     adverse effect on our results of operations and financial condition.


We  face  significant  competition  in  the  mobile  office  industry.
---------------------------------------------------------------------
     Although  our  competition  varies  significantly  by  market,  the  mobile
     office industry, in general, is highly competitive. We compete primarily in
     terms of product availability,  customer service and price. We believe that
     our  reputation  for  customer  service  and our  ability  to  offer a wide
     selection of units suitable for various uses at  competitive  prices allows
     us to compete  effectively.  However,  our primary  competitor,  GE Capital
     Modular  Space,  is less  leveraged,  has greater  market  share or product
     availability  in some  markets,  and has greater  financial  resources  and
     pricing flexibility than we do.

                                       13
<PAGE>

An investor group controls a majority of our board of directors.
---------------------------------------------------------------

     An  investor  group,  which  includes   affiliates  of  The  Cypress  Group
     L.L.C.,   and   Keystone,   Inc.,   beneficially   owns  in  the  aggregate
     approximately 82% of Holdings  outstanding  common stock.  Holdings in turn
     owns 100% of Scotsman's  outstanding  voting  securities.  As a result, the
     investor  group has the ability to control  our  management,  policies  and
     financing  decisions,  to elect a majority  of the  members of our board of
     directors  and to  control  the  vote  on all  matters  coming  before  our
     stockholders.


We may not be able to remarket units returning from leases.
----------------------------------------------------------
     Our  typical  lease   terms,   which   include    contractual   provisions
     requiring  customers to retain  units on lease for, on average,  13 months,
     actually have an average existing lease duration of 23 months.  Because our
     customers  generally rent our units for periods longer than the contractual
     lease terms, 60% of our leases are on a month-to-month  basis. In addition,
     22% of our leases have contractual  lease terms expiring within six months.
     Should a  significant  number of our leased  units be  returned  during any
     short period of time, a large supply of units would need to be  remarketed.
     Our failure to effectively  remarket a large influx of units returning from
     leases could have a material  adverse  effect on our financial  performance
     and our ability to continue expanding our fleet.


We are dependent on key personnel.
---------------------------------

     Our  continued  success will  depend  largely  on the efforts and abilities
     of our  executive  officers and certain other key  employees,  none of whom
     have employment  agreements with us. We do not maintain  insurance policies
     relating  to these  employees.  If, for any reason,  these  officers or key
     employees do not remain with us, our operations could be adversely affected
     until suitable replacements with appropriate experience can be found.


A write-off of all or a part of our goodwill would adversely affect our
operating results and net worth.
----------------------------------------------------------------------

     We   have  significant   intangible  assets   related  to  goodwill,  which
     represents the excess of the total purchase price of our acquisitions  over
     the fair value of the net assets acquired.  As of December 31, 2003, we had
     $169.9  million  of  unamortized  goodwill  on  our  balance  sheet,  which
     represented  14.1% of our total  assets.  Through  December  31,  2001,  we
     amortized  goodwill on a straight-line  basis over the estimated  period of
     future benefit of 20 to 40 years.  In July 2001,  the Financial  Accounting
     Standards Board (FASB) issued SFAS No. 142 - Goodwill and Other  Intangible
     Assets. SFAS No. 142 requires that, effective January 1, 2002, goodwill not
     be amortized but rather that it be reviewed annually for impairment. In the
     event impairment is identified,  a charge to earnings would be recorded. We
     determined  that  goodwill  was not  impaired  for the  fiscal  year  ended
     December 31,  2003.  Although it does not affect our cash flow, a write-off
     in future periods of all or a part of our goodwill would  adversely  affect
     our operating results and net worth.













                                       14
<PAGE>



Item 2.  Properties

     Our headquarters,  which we own, is a three-story  modular office structure
located on 3.1 acres in suburban Baltimore,  Maryland.  Our company is comprised
of 85  branches  located  throughout  the  United  States and  Canada.  We lease
approximately  71% of our branch  properties and we own the balance.  Management
believes that none of our branch  properties,  individually,  is material to our
operations.

Item 3.  Legal Proceedings

     We are involved in certain legal actions  arising in the ordinary course of
business.  We believe that none of these actions,  either individually or in the
aggregate,  will have a  material  adverse  effect on our  business,  results of
operations or financial condition.

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

         None.




















                                       15

<PAGE>



                                     PART II

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

     There is no established public trading market for Holdings' Common
Stock.

     During 2003 and 2002,  Scotsman paid dividends to Holdings of approximately
$55,000 and $133,000, respectively, for normal operating expenses. Scotsman does
not intend to pay any other dividends except for the normal  operating  expenses
of  Holdings,  but  reserves  the  right  to do so.  Scotsman's  ability  to pay
dividends  to Holdings is limited to amounts for  corporate  and  administrative
expenses.  The  indentures  governing the Senior Notes and our credit  agreement
contain  certain  restrictive  covenants  that,  among other  things,  limit the
payment of dividends  or the making of  distributions  on our equity  interests.
(See Note 5 of Notes to the Consolidated Financial Statements.)


















                                       16

<PAGE>
<TABLE>

<CAPTION>



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.

                                                                Year Ended December 31,
                                               -------------------------------------------------------
<S>                                            <C>            <C>         <C>        <C>        <C>

                                                  1999         2000        2001         2002       2003
                                                  ----         ----        ----         ----       ----
                                                 (Dollars in thousands, except per share amounts)
Statement of Operations Data:
Revenues:
     Leasing                                    $201,820     $220,547    $238,151    $227,106  $213,976
     Sales:
         New units                                73,001       73,291      91,114      98,927    71,635
         Rental equipment                         22,369       21,571      22,212      23,951    20,734
     Delivery and installation                    71,245       79,097      97,342     101,034    91,318
     Other                                        37,370       37,640      43,437      44,155    40,113
                                                 -------      -------     -------     -------   -------
         Total                                  $405,805     $432,146    $492,256    $495,173  $437,776
-------------------------------------------------------------------------------------------------------
Gross profit:
     Leasing                                    $136,543     $148,454    $153,281    $134,862  $117,015
     Sales:
         New units                                12,678       13,023      15,945      16,363    12,224
         Rental equipment                          5,133        5,266       5,326       5,787     4,373
     Delivery and installation                    18,886       19,427      19,003      16,494    12,462
     Other                                        29,949       31,057      35,063      34,254    31,839
                                                 -------       ------      ------     -------    ------
         Total                                  $203,189     $217,227    $228,618    $207,760  $177,913
-------------------------------------------------------------------------------------------------------

Selling, general and administrative
     expenses                                   $ 71,480    $  76,872    $ 82,573    $ 85,779  $ 76,297
Other depreciation and amortization               15,866       17,474      18,845      13,438    13,869
Interest                                          83,878       91,860      85,486      85,208    87,174
Held for sale impairment charge                      ---          ---         ---         ---    19,386
Casualty loss                                        ---          ---       1,500         ---       ---
                                                     ---          ---       -----         ---       ---

Income (loss) before income taxes                 31,965       31,021      40,214      23,335   (18,813)
Income tax expense (benefit)                      14,694       14,938      17,585       8,137    (7,131)
                                                  ------       ------      ------       -----     ------
Net income (loss)                               $ 17,271   $   16,083    $ 22,629    $ 15,198  $(11,682)
                                                  ======       ======      ======      ======    ======
Net income (loss) per common share-basic        $   2.79   $     2.60    $   3.65    $   2.45  $  (1.89)
                                                    ====         ====        ====        ====      ====
Net income (loss) per common share-
       assuming dilution                        $   2.64   $     2.46    $   3.46    $   2.32  $  (1.89)
                                                    ====         ====        ====        ====      ====

-------------------------------------------------------------------------------------------------------
</TABLE>


                                                             17
<PAGE>
<TABLE>
<CAPTION>


                                                                   As of December 31,
                                                                   -----------------
                                                  1999         2000        2001         2002         2003
                                                  ----         ----        ----         ----         ----
                                                                   (Dollars in thousands)
<S>                                          <C>           <C>        <C>          <C>          <C>

Balance Sheet Data:
Rental equipment, net (1)                   $  726,924     $799,994   $ 866,867     $828,927     $828,078
Total assets                                 1,066,467    1,145,901   1,244,986    1,229,767    1,205,111
Revolving credit facility &
long-term debt                                 915,823      959,110   1,022,972      984,345      962,178
Stockholder's (deficit) equity                 (38,683)     (22,578)     (1,279)      19,273       18,364


Selected Quarterly Financial Data (Unaudited):
(In thousands except per share data)                       Year ended December 31, 2003
--------------------------------------------------------------------------------------------------------
Quarter                                          First      Second       Third       Fourth        Year
--------------------------------------------------------------------------------------------------------

Revenues                                      $100,706     $107,828    $117,338     $111,904     $437,776
Gross profit                                    43,958       44,356      45,402       44,197      177,913
Held for sale charge                                --           --          --       19,386       19,386
Income (loss) before
    income  taxes                                  110        2,554        (584)     (20,893)     (18,813)
Income    (loss)    before   income
taxes-previously reported                          310        1,153        (447)         N/A          N/A
Net income (loss)                                   65        1,532        (352)     (12,927)     (11,682)
                                                    ==        =====         ===       ======       ======
Net    income     (loss)-previously
reported  (2)                                 $    185     $    692    $   (270)         N/A          N/A
                                                   ===          ===         ===
Net income (loss) per
       common share                           $   0.01     $   0.25    $  (0.06)     $ (2.09)   $   (1.89)

Net income (loss) per common
share-previously reported (2)                 $   0.03     $   0.11    $  (0.04)         N/A          N/A

Net income (loss) per
       common share-assuming dilution         $   0.01     $   0.23    $  (0.06)     $ (2.09)   $   (1.89)

Net income (loss) per common share-assuming
dilution-previously reported (2)              $   0.03     $   0.11    $  (0.04)         N/A          N/A
---------------------------------------------------------------------------------------------------------


(In thousands except per share data)                       Year ended December 31, 2002
---------------------------------------------------------------------------------------------------------
Quarter                                          First       Second       Third       Fourth        Year
---------------------------------------------------------------------------------------------------------
Revenues                                      $119,867     $116,097    $137,282     $121,927      $495,173
Gross profit                                    52,788       51,426      53,127       50,419       207,760
Income before income taxes                       6,762        4,292       8,498        3,783        23,335
Net income                                    $  3,718     $  2,887    $  5,093     $  3,500      $ 15,198
Net income per common share-basic             $   0.60     $   0.47    $   0.82     $   0.56      $   2.45
Net income per common share-assuming dilution $   0.57     $   0.44    $   0.78     $   0.53      $   2.32
----------------------------------------------------------------------------------------------------------



</TABLE>


                                                                18
<PAGE>


     (1) As of December 31, 2003 and 2002,  the net balance of rental  equipment
     excludes  certain  rental units,  which no longer merit further  investment
     pursuant to a strategic  disposal  initiative adopted in December 2003. The
     balance of these  excluded  held for sale units as of December 31, 2003 and
     2002 was $.4  million  and $21.2  million,  respectively.  The 2002  rental
     equipment balance presented in the balance sheet and herein was adjusted in
     accordance with SFAS No. 144 - Accounting for the Impairment or Disposal of
     Long-Lived Assets. See Note 10 to Consolidated Financial  Statements-Assets
     Held for Sale.

     (2) The first,  second and third  quarters of 2003 were adjusted to reflect
     the   adoption   of   SFAS   No.   148   -   Accounting   for   Stock-based
     Compensation-Transition  and  Disclosure,  effectively  adopted  January 1,
     2003.



                                              For the three months ended
                                              --------------------------
                                        March 31,    June 30,     September 30,
                                          2003         2003          2003
                                         --------    ---------    ------------
Quarterly compensation
expense-previously reported               $ 11        $1,694         $ --

Quarterly compensation
expense-restated for adoption
of SFAS 148                                293           137          211












                                       19
<PAGE>


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

     The following  discussion  regarding our financial condition and results of
operations  for the  three  years  ended  December  31,  2003  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  "Safe  Harbor  Statement   Cautionary   Notice  Regarding   Forward-Looking
Statements".

Critical Accounting Policies and Estimates

     General.  This  discussion  and  analysis of our  financial  condition  and
results of operations is based upon our consolidated financial statements, which
have been prepared in accordance with accounting  principles  generally accepted
in the United States. The preparation of these financial  statements requires us
to make  estimates  and  judgments  that affect the reported  amounts of assets,
liabilities,  revenues  and  expenses,  and  related  disclosure  of  contingent
liabilities.  (See Note 1 of the Notes to Consolidated Financial Statements.) On
an  on-going   basis,  we  evaluate   estimates,   including  those  related  to
depreciation  of rental  equipment,  bad debts,  contingencies  and  litigation,
intangible assets, stock-based compensation,  foreign currency translation,  and
income  taxes.  We base our estimates on  historical  experience  and on various
other  assumptions that are believed to be reasonable  under the  circumstances,
the  results  of which form the basis for making  judgments  about the  carrying
values of assets  and  liabilities  that are not  readily  apparent  from  other
sources.  Actual  results  may  differ  from  these  estimates  under  different
assumptions or conditions. We believe the following critical accounting policies
affect our more  significant  judgments and estimates used in the preparation of
the consolidated financial statements.

     Depreciation of rental  equipment.  We depreciate rental equipment over its
estimated  useful life,  after giving effect to an estimated  salvage value. The
useful life of our rental  equipment is determined  based on our estimate of the
period over which the asset will generate revenue  (generally 20 years), and the
residual  value  (typically  50% of original  cost) is  determined  based on our
estimate  of the  expected  value we could  realize  from the asset  after  this
period. The lives and residual values are subject to periodic evaluation and may
be affected by, among other  factors,  changes in building  codes,  legislation,
regulations,  local permitting and internal  factors which may include,  but are
not limited to, changes in equipment  specifications or maintenance policies. If
these estimates change in the future, we may be required to recognize  increased
or decreased depreciation expense for these assets.

     Allowance  for  doubtful   accounts.   We  are  required  to  estimate  the
collectibility of our trade  receivables.  Accordingly,  allowances for doubtful
accounts are maintained for estimated losses resulting from the inability of our
customers  to make  required  payments.  We  evaluate  a variety  of  factors in
assessing the ultimate  realization of these  receivables  including the current
credit-worthiness   of  customers.   The  allowance  for  doubtful  accounts  is
determined  based on  historical  collection  results,  days  sales  outstanding
trends, and an ongoing review of specific customers.  If the financial condition
of our  customers  were to  deteriorate,  resulting  in an  impairment  of their
ability to make payments,  additional  allowances may be required,  resulting in
decreased net income.

     Contingencies.  We are subject to proceedings,  lawsuits,  and other claims
related to environmental,  product and other matters, and are required to assess
the likelihood of any adverse  judgments or outcomes to these matters as well as
potential  ranges of probable  losses. A determination of the amount of reserves

                                       20
<PAGE>

required,  if any,  for  these  contingencies  is made  after  analysis  of each
individual  matter.  The  required  reserves may change in the future due to new
developments  in  each  matter  or  changes  in  approach  such as a  change  in
settlement strategy in dealing with these matters.

     Goodwill and Other Intangible  Impairment.  We have significant  intangible
assets related to goodwill and other acquired intangibles.  The determination of
whether or not these  assets are impaired  involves  significant  judgments.  We
periodically evaluate our goodwill, long lived assets, and intangible assets for
potential  impairment  indicators.  Our  judgment  regarding  the  existence  of
impairment   indicators  are  based  on  estimated  future  cash  flows,  market
conditions,   operational  performance,  and/or  legal  factors.  Based  on  our
valuations of goodwill  completed  during 2003, we determined  that goodwill was
not  impaired.  Future  changes  in  strategy  and/or  market  conditions  could
significantly  impact these judgments and require  adjustments to recorded asset
balances.  Had the determination been made that the goodwill asset was impaired,
the  value of this  asset  would  have  been  reduced  by an amount up to $169.9
million,  the amount of unamortized goodwill on our balance sheet as of December
31, 2003, resulting in a charge to operations.

     Income  Taxes.  We are  required  to estimate  income  taxes in each of the
jurisdictions  in which we  operate.  The  process  involves  estimating  actual
current tax expense along with assessing  temporary  differences  resulting from
differing treatment of items for book and tax purposes. These timing differences
result in  deferred  tax  assets  and  liabilities,  which are  included  in our
consolidated  balance  sheet.  We record a  valuation  allowance  to reduce  our
deferred  tax assets to the amount that is more likely than not to be  realized.
We have considered future taxable income and ongoing tax planning  strategies in
assessing the need for the valuation allowance.

     Foreign  Currency  Translation.  We use the exchange rate  effective at the
close  of  business  on  the  balance   sheet  date  to  translate  our  foreign
subsidiary's  balance  sheet and an  average  rate for the  reporting  period to
translate  the  results  of  operations.  The  cumulative  effect of  changes in
exchange  rates is recognized  in a separate  line in the equity  section of the
balance sheet.

     Stock-based  Compensation.  Prior to 2003, we accounted for our issuance of
stock options and any  modifications  thereof using variable plan accounting and
the intrinsic value method under  Accounting  Principles  Board Opinion No. 25 -
Accounting   for  Stock   Issued  to   Employees   (APB  No.  25)  and   related
interpretations.   Effective   January  1,  2003,  we  adopted  the  fair  value
recognition   provisions   of  SFAS  No.  123  -  Accounting   for   Stock-Based
Compensation.  We selected the modified prospective method of adoption described
in SFAS No. 148 - Accounting  for  Stock-Based  Compensation  -  Transition  and
Disclosure. Compensation cost recognized in 2003 is the same as that which would
have been recognized had the fair value method of SFAS No. 123 been applied from
its original effective date.


                                       21
<PAGE>

     Stock-based  Compensation  (continued).  In  accordance  with the  modified
prospective method of adoption,  results for prior years have not been restated.
The following  input variables were used to compute stock option fair values and
the related stock  compensation  expense using the Cox Ross Rubinstein  binomial
model in accordance with SFAS No. 148 adoption standards:

                                       2003              2002             2001
                                       ----              ----             ----
        Risk-free interest rate        2.97%             3.80%            4.50%
        Expected life in years         5.00              5.00             5.00
        Expected Volatility            45.2%             46.2%            51.6%
        Expected Dividends              0.0%              0.0%             0.0%

General

     Holdings is a holding  company  formed in November  1993,  and conducts its
business  solely  through  Scotsman,  its 100% owned  subsidiary.  We derive our
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,  which primarily comprise
the leasing of mobile  office  units and the sale of units from our lease fleet,
account for a majority of our revenues  and gross  profits.  Used mobile  office
units are sold from our lease fleet in the ordinary course of business at either
fair market  value or, to a lesser  extent,  pursuant to  pre-established  lease
purchase  options.  The sale of rental equipment  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 us.  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.

     During 2002 and 2003,  our business was adversely  impacted by overall soft
economic conditions,  which affected our construction  customers primarily,  and
state  budget  issues in certain  parts of the country  that have  affected  our
education  customers.  Although a portion of our  business is with  customers in
industries  such as these that are cyclical in nature and/or  subject to changes
in general economic conditions, management believes that certain characteristics
of the mobile office leasing industry and their operating strategies should help
to mitigate the effects of economic downturns. These characteristics include (i)
our typical lease terms which include contractual provisions requiring customers
to retain units on lease for, on average,  13 months,  (ii) the  flexibility and
low  cost  offered  to our  customers  by  leasing  which  may be an  attractive
alternative  to capital  purchases,  (iii) our ability to redeploy  units during
regional  recessions  and (iv) the  diversity of our  industry  segments and the
geographic balance of our operations.


     In the  ordinary  course  of  business,  we  acquire  leasing  and  related
businesses.  On May 29, 2003, we acquired the leasing  business of AFA Locations
Inc. On July 31, 2002, we acquired the leasing business of Northgate  Industries
Ltd. On February 1, 2001, we acquired the sales and leasing business of Mckinney
Mobile Modular. See Note 1 of the Notes to Consolidated Financial Statements.

                                       22
<PAGE>

Results of Operations

     2003  Compared  With 2002.  Revenues in 2003 were $437.8  million,  a $57.4
million or 11.6%  decrease from revenues of $495.2 million in 2002. The decrease
resulted from a $27.3 million or 27.6%  decrease in sales of new units,  a $13.1
million or 5.8% decrease in leasing revenue,  a $9.7 million or 9.6% decrease in
delivery and  installation  revenues,  a $4.0 million or 9.2%  decrease in other
revenues  and a $3.2  million or 13.4%  decrease  in sales of rental  equipment.
Sales of new units and delivery and installation  revenues decreases are largely
due to market  sluggishness  associated with the current economy and competitive
pricing  pressures.  In addition,  state budget  issues in certain  parts of the
country have affected  operating results for the year ended December 31, 2003 by
producing  delays  in  several  significant  modular  classroom  projects.   The
decreases in leasing  revenues are due to continued  soft  economic  conditions,
which resulted in competitive pricing pressures. The average monthly rental rate
decreased approximately 4.2% to $250 for the year ended December 31, 2003 versus
$261 for the year ended December 31, 2002. Average fleet utilization was 77% for
the year ended December 31, 2003,  which was relatively  flat as compared to the
same period in the prior year. The decrease in sales of rental equipment for the
year ended  December  31,  2003 is the result of the  non-recurrence  in 2003 of
several large classroom sales which occurred in the prior year. The decreases in
other revenue are the result of declines in sales and leasing revenue  mentioned
above.

     Gross profit in 2003 was $177.9 million,  a $29.8 million or 14.4% decrease
from 2002 gross profit of $207.8  million.  The decrease  resulted  from a $17.8
million or 13.2%  decrease  in leasing  gross  profit,  a $4.0  million or 24.4%
decrease in delivery  and  installation  gross  profit,  a $4.1 million or 25.2%
decrease in sales of new units, and a $1.4 million or 24.4% decrease in sales of
rental  equipment.  The  decrease  in  leasing  gross  profit is a result of the
decrease in leasing  revenue  described  above and a decline in leasing  margins
from  59.4% in 2002 to 54.6% in 2003.  The  decrease  in margin  percentage  was
attributable   to  the  decrease  in  leasing  revenue  coupled  with  increased
refurbishment  and  maintenance  expenses as compared to 2002.  The  decrease in
gross profit related to sales of new units, delivery and installation, and sales
of rental  equipment in 2003  resulted  from the decrease in revenues  described
above.

     Selling,  general and administrative expenses (SG&A) were $76.3 million and
$85.8 million for the years ended December 31, 2003 and 2002, respectively.  The
overall decrease in SG&A of $9.5 million or 11.1% was achieved by continuing our
cost control  initiatives,  primarily  reductions in personnel  related costs as
well as a $4.5 million decrease in non-cash stock compensation expense. In 2003,
we  adopted  the  provisions  of  SFAS  No.  148 -  Accounting  for  Stock-based
Compensation-Transition  and  Disclosure.  In accordance  with the provisions of
SFAS No. 148, we adopted the modified  prospective  provisions  of the standard,
effective  January 1, 2003.  Prior to adoption of SFAS No. 148, we accounted for
stock compensation  expense in accordance with APB No. 25 - Accounting for Stock
Issued to Employees. For the year ended December 31, 2003, and 2002, we recorded
stock compensation expense of $.8 million and $5.3 million, respectively.

     Interest  expense  increased  by 2.3% to $87.2  million  in 2003 from $85.2
million in 2002. This increase is the result of the accelerated  amortization by
$2.5 million of deferred  financing costs related to the partial  extinguishment
of commitments  under our credit agreement and the incremental  interest expense
incurred on the additional $150.0 million of 10.0% senior secured notes, the net
proceeds of which were used to pay off  portions of the term loan and  revolving
credit facility debt. These increases were partially offset by (a) a decrease of
approximately  10 basis points in effective  interest rates on our variable rate
debt for the year and (b) a $119.9  million  or 25.0%  decrease  in the  average
credit facility debt over 2002, primarily due to the financing described above.

                                       23
<PAGE>

     Given recent economic trends,  in the fourth quarter of 2003 we implemented
a strategic  initiative  to dispose of selected  rental units in our lease fleet
which  we  determined  no  longer  merit  further  investment.  A $19.4  million
impairment  charge was  recorded to reflect the  write-down  of these  assets to
their  estimated  fair  value  (less  costs  to  sell)  in  accordance  with the
provisions  of SFAS No.  144 . See Note 10 to  Notes to  Consolidated  Financial
Statements.

     The income tax expense (benefit)  decreased from an expense of $8.1 million
in 2002 to a benefit of $7.1 million in 2003,  primarily  due to the  impairment
charge  associated  with the strategic  initiative to dispose of certain  rental
units of $19.4  million,  which  reduced  income before taxes during the current
year.  The  effective  tax rate for 2003 was 37.9%,  up from 34.9% in 2002.  The
higher rate is  primarily  attributable  to  increases in the local tax rates in
2003 in the  Canadian  provinces  in which the  company  operates as well as the
reversal of certain valuation allowances in 2002.

     2002  Compared  With 2001.  Revenues  in 2002 were $495.2  million,  a $2.9
million or .6% increase  from revenues of $492.3  million in 2001.  The increase
resulted  from a $7.8  million or 8.6%  increase  in sales of new units,  a $3.7
million or 3.8%  increase  in delivery  and  installation  revenues,  and a $1.7
million or 7.8%  increase in sales of rental  equipment.  These  increases  were
substantially  offset by an $11.0 million or 4.6%  decrease in leasing  revenue.
The  decrease  in leasing  revenue is  attributable  to a decrease  of $2 in the
average monthly rental rate, and a decrease in the average fleet  utilization of
four percent to 78%. The decrease in the average monthly rental rate is a result
of  the  softening  economic  and  related  business  conditions  combined  with
competitive  pricing and  changes in fleet mix.  The  increases  in sales of new
units and rental  equipment,  and delivery and  installation  revenue are due to
several large school projects.

     Gross profit in 2002 was $207.8  million,  a $20.9 million or 9.1% decrease
from 2001 gross profit of $228.6 million. The decrease primarily resulted from a
$18.4 million or 12.0%  decrease in leasing gross profit,  and a $2.5 million or
13.2%  decrease in delivery  and  installation  gross  profit.  The  decrease in
leasing  gross profit is a result of the decrease in leasing  revenue  described
above and a decline in leasing margins from 64.4% in 2001 to 59.4% in 2002. This
margin  suppression was  attributable to a decline in average fleet  utilization
coupled with fleet quality improvement initiatives. The decrease in delivery and
installation  gross profit is attributable to continued  competitive  pressures,
and to a lesser extent, a higher mix of lower margin sales related projects.

     SG&A expenses were $85.8 million, a $3.2 million or 3.9% increase from 2001
expenses of $82.6 million. The overall increase in SG&A expense is due primarily
to increased noncash stock option compensation  expense, and increased insurance
and property costs,  partially offset by our continued cost control  initiatives
that commenced in the second half of 2001.

     Interest  expense  decreased  by .3% to $85.2  million  in 2002 from  $85.5
million in 2001. This decrease is the result of a decrease of approximately  155
basis points in effective interest rates on our variable rate debt for the year,
and a $128.7 million or 21.2% decrease in the average credit  facility debt over
2001  (primarily  due to the  2002  financing  transactions  described  herein),
partially  offset by (a) interest  expense on the  additional  $150.0 million of
Senior Notes and $182.0 million in additional  term loans and (b) the additional
amortization of deferred  financing fees,  resulting from the additional  $150.0
million of Senior Notes and the refinancing of our credit facility.


                                       24
<PAGE>
     The income tax expense decreased from $17.6 million in 2001 to $8.1 million
in 2002. The effective tax rate for 2002 was 34.9%, down from 43.7% in 2001. The
lower rate was  primarily  attributable  to the  elimination  of  non-deductible
goodwill amortization as well as the reversal of certain valuation allowances in
2002.


Liquidity and Capital Resources

     During 2001,  2002 and 2003,  our principal  sources of funds  consisted of
cash  flow from  operating  and  financing  sources.  Cash  flow from  operating
activities of $59.5 million in 2001,  $95.3 million in 2002 and $74.2 million in
2003 was largely generated by the rental of units from our lease fleet and sales
of new mobile office units.

     Our Adjusted  EBITDA  decreased by $21.6 million or 12.5% to $151.5 million
in 2003 compared to $173.1 million in 2002.  This decrease in Adjusted EBITDA is
primarily the result of the revenue declines described above. Adjusted EBITDA is
defined as earnings  before  deducting  interest,  income  taxes,  depreciation,
amortization and non-cash charges. In 2003, noncash charges consisted of a $19.4
million  impairment  charge of selected fleet assets and a $.8 million  non-cash
stock option compensation expense. In 2002, noncash charges consisted of noncash
stock option  compensation  expense of $5.3 million.  We utilize Adjusted EBITDA
when  interpreting  operating  trends  and  results  of  operations  of our core
business  operations.  Accordingly,  we believe that  Adjusted  EBITDA  provides
additional information with respect to our overall operating performance and our
ability to incur and service debt,  make capital  expenditures  and meet working
capital  requirements.  However,  Adjusted  EBITDA  should not be  considered in
isolation or as a substitute to cash flow from operations,  net income, or other
measures of performance, profitability, or liquidity prepared in accordance with
generally accepted accounting principles. Because Adjusted EBITDA excludes some,
but not all,  items that  affect net  income and may vary among  companies,  the
Adjusted  EBITDA  mentioned  above may not be  comparable  to  similarly  titled
measures of other companies.



                                       25
<PAGE>


     The table  below  reconciles  Adjusted  EBITDA to cash flow from  operating
activities,  the most  directly  comparable  GAAP  measure (in  thousands),  and
presents  our cash  flow  used in  investing  activities  and cash  flow used in
financing activities for the years ended December 31, 2003 and 2002:

                                                   2003                 2002
                                                   ----                 ----

        Adjusted EBITDA                          $151,479            $173,128
        Decrease in net accounts receivable         9,167              10,387
        Increase in accounts payable and
           accrued expenses                         2,742               1,308
        Interest paid                             (74,608)            (76,744)
        (Increase) decrease in other assets        (7,805)                433
        Decrease in other liabilities              (1,576)             (7,496)
        Gain on sale of rental equipment           (4,373)             (5,787)
        (Gain) loss on sale of fixed assets          (810)                 50
                                                     ----               -----
        Cash flow from operating activities      $ 74,216            $ 95,279
                                                   ======              ======

        Other Data:
        Cash flow used in investing activities   $(43,639)           $(36,119)
                                                   ======              ======
        Cash flow used in financing activities   $(30,566)           $(59,295)
                                                   ======              ======

     Cash flow used in investing  activities was $124.8  million in 2001,  $36.1
million in 2002 and $43.6 million in 2003. Our primary capital  expenditures are
for the  discretionary  purchase  of new  units  for the  lease  fleet and units
purchased  through  acquisitions.  We seek to  maintain  our lease fleet in good
condition  at all times and we  generally  increase  the size of our lease fleet
only in  those  local or  regional  markets  experiencing  economic  growth  and
established unit demand. Our fleet acquisition  strategy includes increasing our
fleet  size  in  accordance  with  customer  demand  and  the  related  business
conditions of the time.











                                       26

<PAGE>



The following table sets forth our investment in our lease fleet for the periods
indicated.

                                                      Year Ended December 31,
                                                  2001         2002        2003
                                                  ----         ----        ----
                                                      (Dollars in millions)
  Gross capital expenditures for rental
    equipment:
       New units and betterments............... $105.5        $40.8       $53.3
       Purchase price allocated to
         fleet of acquired businesses..........   21.4          6.3         2.6
                                                 -----         ----        ----
                                                 126.9         47.1        55.9
  Proceeds from sale of used rental equipment..  (22.2)       (24.0)      (20.7)
                                                 ------       ------      ------

  Net capital expenditures for rental
       equipment............................... $104.7        $23.1      $ 35.2
                                                 =====         ====        ====

  Lease fleet maintenance expenses included
         in the statement of operations..........$43.0        $46.3       $47.7
                                                  ====         ====        ====

     We believe we can manage the capital  requirements of our lease fleet,  and
thus our cash flow, through the careful monitoring of our lease fleet additions.

     Our 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 rental equipment
helps  preserve the overall  quality of our 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.

     Other capital expenditures of $15.4 million, $11.9 million and $7.6 million
in 2001, 2002 and 2003,  respectively,  consist of items not directly related to
the  lease  fleet,  such  as  branch  buildings,   land,  equipment,   leasehold
improvements and management information systems.

     Cash  provided  by  financing  activities  of  $63.3  million  in 2001  was
primarily  from  borrowings,  net of  repayments,  under  our  revolving  credit
facility.  Cash used in financing  activities of $59.3 million in 2002 and $30.6
million in 2003 was primarily associated with net repayments of borrowings under
our credit agreement. For 2002, cash used in financing activities included $20.3
million for  deferred  financing  fees  relating to the  issuance of  additional
9.875% senior notes and the new credit facility established in the first quarter
of that year.  For 2003,  $8.0 million in deferred  financing  fees was incurred
related to the issuance of 10.0% senior  secured  notes and the amendment of our
credit agreement in August 2003.




                                       27
<PAGE>



     At December 31, 2003 we had $548.8 million of 9.875% senior notes due 2007,
$263.4  million in term loan and revolving  facility debt and $150.0  million of
10.0% senior secured notes due August 2008.

     The $150.0  million of 10.0%  senior  secured  notes were  issued in August
2003. We used the net proceeds of $145.4 million  received from that offering to
repay $27.5 million of the term loan under our credit agreement and repay $117.9
million of borrowings  and  terminate  commitments  under our  revolving  credit
facility.   The  10.0%  senior  secured  notes  are  fully  and  unconditionally
guaranteed  on a senior  secured  second  lien  basis by  Scotsman's  100% owned
subsidiaries: Space Master International,  Inc., Evergreen Mobile Company, Truck
& Trailer Sales, Inc. and Williams  Scotsman of Canada,  Inc.  Willscot,  also a
100% owned subsidiary of Scotsman, has fully and unconditionally  guaranteed the
senior  secured notes on a subordinated  secured  second lien basis.  These 100%
owned subsidiaries of Scotsman act as joint and several guarantors of the senior
and senior  secured  notes.  See Note 1 for a description  of the  operations of
Willscot.

     In accordance  with SFAS No. 145 - Rescission of FASB Statements No. 4, 44,
and 64, Amendment of FASB Statement No. 13, and Technical Corrections, effective
for fiscal years  beginning  after May 15, 2002, $2.5 million of financing costs
relating to the partial  extinguishment  of debt under our credit  agreement  is
included in interest expense for the year ended December 31, 2003.

     The credit agreement contains  restrictions on the amount of dividends that
Scotsman  can pay to Holdings  and requires  compliance  with certain  financial
covenants including capital expenditures, an interest coverage ratio, a leverage
ratio and fleet  utilization  levels. In August 2003, we amended these financial
ratios by (1) increasing the permitted  maximum  leverage ratio,  (2) decreasing
the required  utilization rate, and (3) decreasing the minimum interest coverage
ratio.  These  steps are  geared  toward  improving  our  underlying  liquidity,
profitability,  and  performance.  The failure to maintain the  required  ratios
would result in us not being able to borrow under the credit  agreement  and, if
not cured within the grace periods,  would result in an default under the credit
agreement. We are currently in compliance with all financial covenants.

     The Company's total credit  facility  (including the term loan and revolver
commitment) was $550.0 million at December 31, 2003. Borrowing base (collateral)
availability  calculated  in  accordance  with the credit  agreement  under this
facility was $231.4  million at December 31, 2003.  Consolidated  Leverage Ratio
covenant restrictions further limited our borrowing availability at December 31,
2003 to $57.9 million. In order to meet our future cash requirements,  we intend
to use internally  generated funds and to borrow under our credit  facility.  We
believe we will have sufficient liquidity under our revolving line of credit and
from cash  generated  from  operations  to fund our  operations  for the next 12
months. Our credit facility expires December 2006 and the Senior Notes mature in
2007 and 2008. It is expected  that we will  refinance  outstanding  obligations
under these  agreements  prior to their  maturities.  Until such time, we expect
that  funds  from   operations  will  be  sufficient  to  satisfy  debt  service
requirements related to these obligations

     For the year ended  December 31,  2003,  our actual  Consolidated  Leverage
Ratio was 6.37 as compared to the maximum  covenant  requirement of 6.75 and our
actual Consolidated  Interest Coverage Ratio was 1.92 as compared to the minimum
covenant  requirement  of 1.70.  The  Consolidated  Interest  Coverage Ratio was
calculated by dividing  Consolidated EBITDA (as defined in our credit agreement)
of $150,725 for the twelve month period ended December 31, 2003 by cash interest
expense of $78,385 as defined in the credit agreement. The Consolidated Leverage
Ratio was calculated by dividing the December 31, 2003 consolidated debt balance
of $962,178 by  Consolidated  EBITDA for the twelve month period ended  December
31, 2003. For  Consolidated  Leverage Ratio  calculation  purposes  Consolidated

                                       28
<PAGE>
EBITDA for the twelve  months  ended  December 31, 2003 was  $151,129,  which in
accordance with the credit  agreement,  was adjusted to include $404 relating to
entities we acquired during the calculation period.

     Consolidated   EBITDA  as  defined  in  our  credit  agreement   represents
consolidated  net income  plus  consolidated  interest,  tax,  depreciation  and
amortization  expenses,  and excludes  gains and losses on sales of fixed assets
and any other non-cash  items. It is used in determining our compliance with the
financial  ratios required by our agreement.  Consolidated  EBITDA should not be
considered  in  isolation  or  as a  substitute  to  cash  flow  from  operating
activities,  net income or other measures of performance  prepared in accordance
with  generally  accepted  accounting  principles or as a measure of a company's
profitability or liquidity.

     Although not required by our credit agreement,  if cash flow from operating
activities,  the most directly  comparable GAAP measure to Consolidated  EBITDA,
were used in these  calculations  instead of Consolidated  EBITDA,  our leverage
ratio and interest coverage ratios would have been 12.96 and .95, respectively.
















                                       29
<PAGE>



     The table below reconciles Consolidated EBITDA,  calculated pursuant to the
credit  agreement,  for the twelve  months ended  December 31, 2003 to cash flow
from  operating  activities,  the most  directly  comparable  GAAP  measure  (in
thousands).



                                                   Twelve Months Ended
                                                    December 31, 2003
                                                   -------------------
Consolidated EBITDA                                     $ 151,129 (a)
Decrease in receivables, net                                9,167
Increase in accounts payable and
   accrued expenses                                         2,686
Interest paid                                             (74,608)
Decrease in other assets                                   (7,805)
Decrease in other liabilities                              (1,576)
Gain on sale of rental equipment                           (4,373)
Proforma EBITDA impact of acquisitions                       (404)
                                                              ---
Cash flow from operating activities                     $  74,216  (a)
                                                           ======

Other Data:
Cash flow used in investing activities                  $ (43,639)
                                                           ======
Cash flow used in financing activities                  $ (30,566)
                                                           ======


     (a) Note:  In  accordance  with the  provisions  of the  credit  agreement,
Holding's  financial  results are to be used in the  calculation of the covenant
compliance ratios.














                                       30
<PAGE>
<TABLE>
<CAPTION>


Summary tables of our significant contractual obligations are as follows:


                                                       Payments Due by Period
                                               Less than 1                                   After 5
  Contractual Obligations              Total       year       1 - 3 years    4 - 5 years      years
----------------------------------------------------------------------------------------------------
<S>                                <C>              <C>         <C>           <C>            <C>
Long term debt obligations (a)     $ 962,178       $2,121      $261,247       $698,810       $   --

Operating
leases (b)                            32,606       10,342        14,297          5,600        2,367

Sale and rental equipment
purchase obligations                  22,016       22,016            --             --           --
                                      ------       ------        ------         ------        -----
Total                                                                                                                  =
contractual
obligations                       $1,016,800      $34,479      $275,544       $704,410       $2,367
                                   =========       ======       =======        =======        =====




(a)      As more fully described in Note 5 to Consolidated Financial Statements, we have borrowed
         $54.9 million under the revolving credit facility as of December 31, 2003. We also have a
         $208.4 million term loan, $548.8 million and $150.0 million of 9.875% and 10.0% Senior
         Notes, respectively, outstanding as of December 31, 2003.

(b)      In accordance with SFAS No. 13 - Accounting  for Leases, operating lease obligations are
         not reflected in the balance sheet.  See Operating Leases  Item 8.  Financial Statements
         and Supplementary Data - Notes to Consolidated Financial Statements - Note 7 Commitments
         and Contingencies for additional information.



The amount of unused revolving credit line, which matures in accordance with the terms of our credit
facility agreement on December 31, 2006, was $287.1 million at December 31, 2003 and the amount of
standby letters of credit, which will expire in 2004, was $8.1 million at December 31, 2003.



</TABLE>


                                                 31


<PAGE>



Seasonality

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


Inflation

     We believe that  inflation has not had a material  effect on our results of
operations.  However,  an inflationary  environment  could  materially  increase
interest rates on our floating rate debt. The price of rental  equipment sold by
us and the  replacement  cost of  such  units  could  also  increase  in such an
environment.  Our  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,  we may seek to  limit  our
exposure to interest rate fluctuations by utilizing certain hedging  mechanisms,
although we are under no obligation to do so.





















                                       32
<PAGE>


Item 7a Quantitative and Qualitative Disclosures about Market Risk

     Market risk is the risk of loss to future earnings, to future values, or to
future  cash flows that may result  from the  changes in the price of  financial
instruments. The Company is exposed to financial market risks, including changes
in foreign currency exchange rates and interest rates.  Exposure to market risks
related  to  operating  activities  is managed  through  the  Company's  regular
operating and financing activities.

Foreign Currency Risk

     We are exposed to foreign currency  translation risks. We do not enter into
contracts or financial  instruments to manage this risk. The exposure related to
fluctuations  in the exchange  rates on the local  currency of  Scotsman's  100%
owned Canadian subsidiary, Williams Scotsman, Inc. of Canada, is not significant
to overall  operations.  The effect of  changes  in the  exchange  rate has been
separately identified in the cash flow statement.

Interest Rate Risk

     The Company's  revolving  credit  facility and term loan bears  interest at
variable  rates,  and the fair  value of this  instrument  is not  significantly
impacted by changes in market interest rates.

The table below provides information about the Company's financial instruments
that are sensitive to interest rate changes:

                             Year of Maturity at December 31, 2003
                                                                          Fair
                 2004     2005      2006       2007      2008    Total   Value $
                -----    -----     -----      -----     -----   -------  -------
Debt
Variable Rate  $2,121   $2,121  $259,126   $     --  $     --  $263,368 $263,368
Average
Interest Rate   4.24%    4.24%     4.29%         --        --

Fixed Rate         --       --        --    548,810   150,000   698,810  719,750
Average
Interest Rate      --       --        --      9.90%   10.000%







                                       33

<PAGE>




Item 8.  Financial Statements and Supplementary Data


         INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES

Financial Statements:
                                                                           Page

Scotsman Holdings, Inc. and Subsidiary:
     Report of Independent Auditors..........................................35
     Consolidated Balance Sheets as of December 31, 2003 and 2002............36
     Consolidated Statements of Operations for
          the years ended December 31, 2003, 2002 and 2001...................37
     Consolidated Statements of Changes in Stockholder's
          Equity/(Deficit) for the years ended
          December 31, 2003, 2002 and 2001...................................38
     Consolidated Statements of Cash Flows for
          the years ended December 31, 2003, 2002 and 2001................39-40
     Notes to Consolidated Financial Statements...........................41-61

Williams Scotsman, Inc. and Subsidiaries
     Report of Independent Auditors..........................................62
     Consolidated Balance Sheets as of December 31, 2003 and 2002............63
     Consolidated Statements of Operations for
         the years ended December 31, 2003, 2002 and 2001....................64
     Consolidated Statements of Changes in Stockholder's
         Equity/(Deficit) for the years ended
         December 31, 2003, 2002 and 2001....................................65
     Consolidated Statements of Cash Flows for
         the years ended December 31, 2003, 2002 and 2001.................66-67
     Notes to Consolidated Financial Statements...........................68-91

Financial Statement Schedules:
   Scotsman Holdings, Inc. and Subsidiary:
      Schedule I - Condensed Financial Information of Registrant.....   116-117
      Schedule II - Valuation and Qualifying Account .......................118


     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.








                                       34

<PAGE>

Report of Independent Auditors

Board of Directors
Scotsman Holdings, Inc.

     We have audited the  accompanying  consolidated  balance sheets of Scotsman
Holdings,  Inc. and Subsidiary as of December 31, 2003 and 2002, and the related
consolidated statements of operations, changes in stockholder's equity (deficit)
and cash flows for each of the three  years in the  period  ended  December  31,
2003. Our audits also included the financial  statement  schedules listed in the
Index at Item 8. These consolidated  financial  statements and schedules are the
responsibility of the Company's management.  Our responsibility is to express an
opinion on the  consolidated  financial  statements  and schedules  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 Scotsman
Holdings,   Inc.  and  Subsidiary  at  December  31,  2003  and  2002,  and  the
consolidated  results of their  operations  and their cash flows for each of the
three years in the period ended December 31, 2003, in conformity with accounting
principles  generally accepted in the United States.  Also, in our opinion,  the
related financial statement schedules,  when considered in relation to the basic
financial statements taken as a whole,  presents fairly in all material respects
the information set forth therein.

     As discussed  in Notes 1 and 4 to the  Consolidated  Financial  Statements,
effective  January 1, 2002 the  Company  changed  its method of  accounting  for
goodwill and other intangible assets.

     As discussed in Note 2 to the Consolidated Financial Statements,  effective
January 1, 2003 the Company  changed its method of  accounting  for  stock-based
compensation.

                                                           /s/ Ernst & Young LLP
Baltimore, Maryland

February 6, 2004




                                       35
<PAGE>
<TABLE>
<CAPTION>


                                        Scotsman Holdings, Inc. and Subsidiary
                                              Consolidated Balance Sheets


                                                                                        December 31
                                                                                  2003              2002
                                                                            ------------------------------

                                                                                   (In thousands)
Assets
<S>                                                                        <C>                <C>

Cash                                                                       $         387     $         429
Trade accounts receivable, net of allowance for doubtful accounts of
   $862 in 2003 and $1,071 in 2002                                                55,841            63,965
Prepaid expenses and other current assets                                         33,741            24,883
Rental equipment, net of accumulated depreciation of $224,794 in 2003
   and $195,874 in 2002                                                          828,078           828,927
Property and equipment, net                                                       80,750            80,249
Deferred financing costs, net                                                     22,868            23,616
Goodwill                                                                         169,913           168,931
Other intangible assets, net                                                       2,575             3,238
Other assets                                                                      10,958            35,529
                                                                            ----------------------------------
                                                                           $   1,205,111     $   1,229,767
                                                                            ==================================

Liabilities and stockholder's equity
Accounts payable                                                           $      29,505     $      23,257
Accrued expenses                                                                  29,377            29,160
Rents billed in advance                                                           18,295            18,773
Revolving credit facility                                                         54,940           197,691
Long-term debt, net                                                              907,238           786,654
Deferred income taxes                                                            147,392           154,959
                                                                            ----------------------------------
         Total liabilities                                                     1,186,747         1,210,494
                                                                            ----------------------------------

Stockholder's equity:
   Common stock, $.01 par value.  Authorized 10,000,000 shares; issued
     9,507,407 shares in 2003 and 2002                                                95                95
   Additional paid-in capital                                                    240,005           239,239
   Cumulative foreign currency translation adjustment                              8,621            (1,386)
   Retained earnings                                                              65,581            77,263
                                                                            ----------------------------------
                                                                                 314,302           315,211
Less treasury stock - 3,312,608 common shares in 2003
   and 2002, at cost                                                            (295,938)         (295,938)
                                                                            ----------------------------------
Total stockholder's equity                                                        18,364            19,273
                                                                            ----------------------------------

                                                                              $1,205,111     $   1,229,767
                                                                            ==================================
See accompanying notes.
</TABLE>



                                                      36

<PAGE>

<TABLE>
<CAPTION>

                     Scotsman Holdings, Inc. and Subsidiary
                      Consolidated Statements of Operations


                                                                              Year ended December 31
                                                                     2003            2002            2001
                                                                 ---------------------------------------------
                                                                            (In thousands except
                                                                              per share amounts)
Revenues
<S>                                                                  <C>               <C>          <C>

Leasing                                                              $213,976     $227,106     $238,151
Sales:
   New units                                                           71,635       98,927       91,114
   Rental equipment                                                    20,734       23,951       22,212
Delivery and installation                                              91,318      101,034       97,342
Other                                                                  40,113       44,155       43,437
                                                                 ----------------------------------------
         Total revenues                                               437,776      495,173      492,256
                                                                 ----------------------------------------


Cost of sales and services
Leasing:
   Depreciation and amortization                                       49,097       45,834       41,761
   Other direct leasing costs                                          47,864       46,410       43,109
Sales:
   New units                                                           59,411       82,564       75,169
   Rental equipment                                                    16,361       18,164       16,886
Delivery and installation                                              78,856       84,540       78,339
Other                                                                   8,274        9,901        8,374
                                                                 ----------------------------------------
         Total costs of sales and services                            259,863      287,413      263,638
                                                                 ----------------------------------------
         Gross profit                                                 177,913      207,760      228,618
                                                                 ----------------------------------------
Selling, general and administrative expenses                           76,297       85,779       82,573
Other depreciation and amortization                                    13,869       13,438       18,845
Interest, including amortization of deferred financing
   costs of $8,789, $7,948 and $5,269                                  87,174       85,208       85,486
Held for sale impairment charge                                        19,386           --           --
Non-cash charge for casualty loss                                          --           --        1,500
                                                                 ----------------------------------------
         Total operating expenses                                     196,726      184,425      188,404
                                                                 ----------------------------------------
        (Loss) income  before income taxes                            (18,813)      23,335       40,214
Income tax (benefit) expense                                           (7,131)       8,137       17,585
                                                                 ----------------------------------------
         Net (loss) income                                       $    (11,682)    $ 15,198     $ 22,629
                                                                 ========================================

(Loss) earnings per common share-basic                           $      (1.89)    $   2.45     $   3.65
                                                                 =========================================
(Loss) earnings per common share-assuming dilution               $      (1.89)    $   2.32     $   3.46
                                                                 =========================================

See accompanying notes.


                                                         37
</TABLE>

<PAGE>
<TABLE>
<CAPTION>


                                                Scotsman Holdings, Inc. and Subsidiary
                                 Consolidated Statements of Changes in Stockholder's Equity (Deficit)

                                                                                                Cumulative
                                                                                                 Foreign
                                                                   Additional                   Currency
                                              Common Stock          Paid-in        Retained    Translation      Treasury
                                           Shares      Amount       Capital        Earnings     Adjustment       Stock     Total
                                      --------------------------------------------------------------------------------------------
                                                                     (In thousands)
<S>                                         <C>         <C>        <C>           <C>                <C>        <C>        <C>

Balance at December 31, 2000                6,197       $95        $234,204      $   39,436        $(457)      $(295,856) $(22,578)
Foreign currency translation
   adjustment                                                                                     (1,048)              -    (1,048)
Non-cash stock option
   compensation expense                         -         -            (278)             -             -               -      (278)
Purchase of 75 shares of
   treasury stock                               -         -               -              -             -              (4)       (4)
Net income                                      -         -               -         22,629             -               -    22,629
                                      --------------------------------------------------------------------------------------------
Balance at December 31, 2001                6,197        95         233,926         62,065        (1,505)       (295,860)   (1,279)
Foreign currency translation
   adjustment                                   -         -               -              -           119               -       119
Non-cash stock option compensation
   expense                                      -         -           5,313              -             -               -     5,313
Purchase of 1,800 shares of
   treasury stock                              (2)        -               -              -             -             (78)      (78)
Net income                                      -         -               -         15,198             -               -    15,198
                                      --------------------------------------------------------------------------------------------
Balance at December 31, 2002                6,195        95         239,239         77,263        (1,386)       (295,938)   19,273
Foreign currency translation
   adjustment                                    -        -               -              -        10,007               -    10,007
Non-cash stock option compensation
   expense                                       -        -             766              -             -               -       766
Net loss                                         -        -               -        (11,682)            -               -   (11,682)
                                      --------------------------------------------------------------------------------------------
Balance at December 31, 2003                6,195     $  95       $ 240,005       $ 65,581     $   8,621       $(295,938)  $18,364
                                      ============================================================================================



See accompanying notes.

</TABLE>




                                                                        38
<PAGE>

<TABLE>
<CAPTION>




                                       Scotsman Holdings, Inc. and Subsidiary
                                         Consolidated Statements of Cash Flows

                                                                                       Year ended December 31
                                                                            2003                2002                2001
                                                                         --------------------------------------------------
                                                                                             (In thousands)
Cash flows from operating activities
<S>                                                                     <C>                <C>                <C>

Net (loss) income                                                       $   (11,682)       $   15,198         $    22,629
Adjustments to reconcile net (loss) income to net cash provided by
   operating activities:
     Depreciation and amortization                                           71,755            66,614              65,875
     Amortization of bond discount                                              357               327                  --
     Provision for bad debts                                                  2,286             3,692               4,204
     Deferred income tax (benefit) expense                                   (7,640)            7,759              17,333
     Non-cash option compensation expense (income)                              766             5,313                (278)
     Non-cash held for sale impairment charge                                19,386                --                  --
     Gain on sale of rental equipment                                        (4,373)           (5,787)             (5,326)
     Gain (loss) on sale of fixed assets                                       (810)               50                 (30)
     Decrease (increase) in net trade accounts receivable                     6,881             6,695             (24,719)
     Increase (decrease) in accounts payable and accrued expenses,
       including casualty loss in 2001                                        6,161             2,103              (5,397)
     Other                                                                   (8,871)           (6,685)            (14,833)
                                                                         --------------------------------------------------
Net cash provided by operating activities                                    74,216            95,279              59,458
                                                                         --------------------------------------------------



</TABLE>











                                                       39

<PAGE>
<TABLE>
<CAPTION>


                                       Scotsman Holdings, Inc. and Subsidiary
                                 Consolidated Statements of Cash Flows (continued)

                                                                                       Year ended December 31,
                                                                              2003              2002             2001
                                                                          -----------------------------------------------
                                                                                            (in thousands)

<S>                                                                        <C>                <C>              <C>

Cash flows from investing activities
Rental equipment additions                                                  (53,307)          (40,814)        (105,509)
Proceeds from sales of rental equipment                                      20,734            23,951           22,212
Acquisition of businesses, net of cash acquired                              (3,434)           (7,308)         (26,114)
Purchase of property and equipment, net                                      (7,632)          (11,948)         (15,374)
                                                                          -----------------------------------------------
Net cash used in investing activities                                       (43,639)          (36,119)        (124,785)
                                                                          -----------------------------------------------

Cash flows from financing activities
Proceeds from debt                                                          597,378         1,123,473          547,129
Repayment of debt                                                          (619,903)       (1,162,427)        (483,267)
Increase in deferred financing costs                                         (8,041)          (20,263)            (557)
Payments to acquire treasury stock                                              (--)             (78)               (4)
                                                                          -----------------------------------------------
Net cash (used in) provided by financing activities                         (30,566)          (59,295)          63,301
                                                                          -----------------------------------------------
Effect of exchange rate changes                                                 (53)              (22)              63
                                                                          -----------------------------------------------

Net decrease in cash                                                            (42)             (157)          (1,963)

Cash at beginning of period                                                     429               586            2,549
                                                                          -----------------------------------------------
Cash at end of period                                                   $       387     $         429    $         586
                                                                          ===============================================


Supplemental cash flow information:
   Cash paid for income taxes                                           $       451     $         573    $         366
                                                                          ===============================================
   Cash paid for interest                                               $    74,608     $      76,744    $      89,351
                                                                          ===============================================

See accompanying notes.
</TABLE>







                                                        40

<PAGE>


                    Scotsman Holdings, Inc. and Subsidiary
                   Notes to Consolidated Financial Statements
                 (Dollars in thousands, except per share amounts)
                           December 31, 2003 and 2002

1.  Organization and Basis of Presentation

     Scotsman Holdings,  Inc.  (Holdings) was organized in November 1993 for the
purpose of acquiring  Williams  Scotsman  Inc.  (Scotsman).  The  operations  of
Holdings and its subsidiary  (collectively "the Company") consist of the leasing
and  sale  of  mobile  offices,   storage  products,   and  their  delivery  and
installation.  Included  in the  operations  of  Scotsman  are  its  100%  owned
subsidiaries,  Willscot  Equipment,  LLC  (Willscot),  and Williams  Scotsman of
Canada, Inc. Willscot, a special purpose subsidiary, was formed in May 1997; its
operations  are limited to the leasing of its mobile office units to the Company
under a master  lease.  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.  These  100%  owned
subsidiaries of Scotsman are guarantors of the Company's credit facility.

     The operations of the Company consist  primarily of the leasing and sale of
mobile offices,  modular  buildings and storage  products  (equipment) and their
delivery and installation throughout the United States and Canada.


Acquisition of AFA Locations Inc.

On May 29, 2003 the Company acquired AFA Locations Inc. (AFA), a privately-held,
Montreal,  Canadian-based  company  that was  involved  in the leasing of mobile
offices built by the manufacturing  operations of AFA's consolidated entity. The
purchase of the leasing  business  resulted in the acquisition of  approximately
300 units at a value of  approximately  $2.6  million and the  related  customer
base. The  transaction was accounted for under the purchase method of accounting
with a net  purchase  price of $3.2  million  and $.6 million of  goodwill.  The
acquisition was financed with borrowings under the Company's credit facility.







                                       41


<PAGE>


                    Scotsman Holdings, Inc. and Subsidiary
                   Notes to Consolidated Financial Statements

1.  Organization and Basis of Presentation (continued)

Acquisition of Northgate Industries Ltd

On July 31,  2002 the Company  acquired  the mobile  office and storage  product
fleet of Northgate Industries Ltd., an Edmonton,  Alberta-based Canadian company
that was involved in the leasing of mobile  offices to industrial  markets.  The
transaction was accounted for under the purchase method of accounting with a net
purchase price of $7.0 million being  allocated to the  identifiable  net assets
acquired of $6.6 million with the excess of $.4 million  representing  goodwill.
The purchase price  allocation was based upon estimates of the fair value of the
net assets acquired.  The acquisition,  which added over 500 units at a value of
approximately  $6.3 million,  was financed with  borrowings  under the Company's
credit facility.

Acquisition of Mckinney Mobile Modular

On February 1, 2001,  the Company  acquired the mobile  office sales and leasing
business of Mckinney  Mobile Modular,  a privately held  California  corporation
(Mckinney)  in  a  transaction  accounted  for  under  the  purchase  method  of
accounting.   Total   consideration   for  the   acquisition   of  Mckinney  was
approximately $26.1 million, including the repayment of existing indebtedness of
Mckinney.  The  purchase  price paid was  allocated to the  identifiable  assets
acquired of $21.6 million with the excess of $5.5 million representing  goodwill
and other  intangible  assets.  The purchase price allocation was based upon the
estimates of the fair value of the assets acquired. The acquisition, which added
over 1,600 units at a value of  approximately  $21.4 million,  was financed with
borrowings under the Company's then existing credit facility.

Recent Accounting Pronouncements

Stock-based  Compensation.  In December 2002, the Financial Accounting Standards
Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 148 -
Accounting for Stock-Based  Compensation - Transition and Disclosure,  effective
for fiscal years ending after December 15, 2002.  Effective January 1, 2003, the
Company  adopted the provisions  SFAS No. 148. See Note 2 Summary of Significant
Accounting  Policies - Stock-based  Compensation for further  discussion of SFAS
No. 148.


Goodwill and other intangible assets. In June 2001, the FASB issued SFAS No. 141
- Business Combinations, and SFAS No. 142 - Goodwill and Other Intangible Assets
.. SFAS No. 141 applies to all  business  combinations  with a closing date after
June 30, 2001. SFAS No. 141 also eliminates the  pooling-of-interests-method  of
accounting  and further  clarifies  the criteria for  recognition  of intangible
assets  separately from goodwill.  There was no material effect upon adoption of
SFAS No.  141,  which was  adopted on  December  1, 2001.  See Note 2 Summary of
Significant  Accounting  Policies-Goodwill  and   Other  Intangible  Assets  for

                                       42
<PAGE>

                    Scotsman Holdings, Inc. and Subsidiary
                   Notes to Consolidated Financial Statements

1.  Organization and Basis of Presentation (continued)

Recent Accounting Pronouncements (continued)

further discussion of SFAS No. 142,  which  was  adopted  on  January  1,  2002.
Also see Note 4, Goodwill and Other Intangible Assets.


2.  Summary of Significant Accounting Policies


(a)  Use of Estimates

     The  preparation   of   the   financial   statements   in  conformity  with
     accounting  principles  generally  accepted in the United  States  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)  Principles of Consolidation

     The   accompanying   consolidated    financial   statements   include   the
     accounts  of the  Company  and its  100%  owned  subsidiaries.  Significant
     intercompany   accounts   and   transactions   have  been   eliminated   in
     consolidation.

(c)  Accounts Receivable and Allowance for Doubtful Accounts

     The  Company's   accounts    receivable   consist  of   amounts   due  from
     customers throughout the United States and Canada.  Collateral is generally
     not  required.  The Company  provides an allowance  for  doubtful  accounts
     receivable  by a charge to  operations  in amounts  equal to the  estimated
     losses expected to be incurred in collection of the accounts. The estimated
     losses  are  based  on  historical   collection   experience,   days  sales
     outstanding  trends,  and an ongoing  review of  specific  customers  and a
     review of the current status of the existing receivables. Customer accounts
     are written off against the allowance for doubtful accounts when an account
     is determined to be uncollectible.



                                       43

<PAGE>


                    Scotsman Holdings, Inc. and Subsidiary
                   Notes to Consolidated Financial Statements

2.  Summary of Significant Accounting Policies (continued)

(d)       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 13 months at December 31, 2003. 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 generally
          of 10 to 20 years and an estimated residual value of typically 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.

(e)       Property and Equipment

          Property   and   equipment   is   stated  at   cost.  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.

(f)       Deferred Financing Costs

          Costs  of  obtaining   debt  are  amortized   using the  straight-line
          method which  approximates the effective interest rate method over the
          term of the debt.

(g)       Goodwill and Other Intangible Assets

          The   excess  of  cost  over  fair  values of net assets  acquired  in
          purchase  transactions  has been  recorded as goodwill.  In accordance
          with SFAS No. 142,  goodwill  (and  intangible  assets  deemed to have
          indefinite  lives) is no longer  amortized  but is  subject  to annual
          impairment  tests  in  accordance  with  the  Statement.  Prior to the
          adoption of this standard,  goodwill was amortized on a  straight-line
          basis over 20 to 40 years.  The Company  performed  the first of these
          required  tests during 2002 and  determined  that the  evaluation  for
          impairment  each year would be performed as of October 1. For 2003 and
          2002, goodwill was determined not to be impaired. On a periodic basis,
          the Company evaluates the carrying value of its intangible  assets  to


                                       44
<PAGE>


                    Scotsman Holdings, Inc. and Subsidiary
                   Notes to Consolidated Financial Statements

2.  Summary of Significant Accounting Policies (continued)


(g)       Goodwill and Other Intangible Assets (continued)

          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 Company over the remaining  amortization
          period,  the Company's  carrying  value of intangible  assets would be
          reduced by the  estimated  shortfall  of cash flows,  on a  discounted
          basis.  Intangible  assets with finite lives are amortized  over their
          estimated useful lives ranging from 24 to 228 months, with a remaining
          weighted average useful life of 110 months.

(h)       Stock-based Compensation

          Prior to  2003,  the  Company  accounted   for  its  issuance of stock
          options and any  modifications  thereof using variable plan accounting
          and the  intrinsic  value method  under  Accounting  Principles  Board
          Opinion No. 25 - Accounting  for Stock Issued to Employees (APB No.25)
          and related interpretations. Stock-based employee compensation expense
          (income)  for stock  options of $5,313 and $(278) was reflected in net
          income for the years ended  December 31, 2002 and 2001,  respectively.
          The 2002  compensation  expense resulted from a modification  made for
          the continuation of certain employees' options after their termination
          from the Company.

          Effective  January 1,  2003,  the   Company  adopted  the  fair  value
          recognition  provisions of SFAS No. 123 - Accounting  for  Stock-Based
          Compensation.  The Company selected the modified prospective method of
          adoption  described in SFAS No. 148.  Compensation  cost recognized in
          2003 of $766 is the same as that which would have been  recognized had
          the fair value  method of SFAS No. 123 been  applied from its original
          effective date. In accordance with the modified  prospective method of
          adoption, results for prior years have not been restated.





                                       45
<PAGE>


                    Scotsman Holdings, Inc. and Subsidiary
                   Notes to Consolidated Financial Statements

2.  Summary of Significant Accounting Policies (continued)

(h)       Stock-based Compensation (continued)

          Pro  forma   information   required   by   SFAS  No.   123   has  been
          determined  as if the Company had  accounted  for its  employee  stock
          options under the fair value method during each year  presented in the
          financial  statements.  The stock compensation expense for each period
          presented was determined  using a  straight-lined  attribution  method
          over the vesting period

                                                    Year Ended December 31,
                                                    ----------------------
                                                  2003       2002        2001
                                                  ----       ----        ----
          Net (loss) income, reported         $(11,682)   $15,198     $22,629
          Add: Stock compensation- net of tax
             reported                              476      3,460        (156)
          Deduct: Stock compensation-net of
          tax fair value-based                    (476)      (939)       (637)
                                                   ---        ---         ---
          Pro forma net (loss) income         $(11,682)   $17,719     $21,836
                                                ======     ======      ======
          (Loss) Earnings per share
           basic:
             Reported                         $ (1.89)    $  2.45      $ 3.65
                                                 ====        ====        ====
             Pro forma                        $ (1.89)    $  2.86      $ 3.52
                                                 ====        ====        ====

          (Loss) Earnings per share
           diluted:
             Reported                         $ (1.89)    $  2.32      $ 3.46
                                                 ====        ====        ====
             Pro forma                        $ (1.89)    $  2.71      $ 3.34
                                                 ====        ====        ====

          The  weighted  average  fair  value  of options granted in 2003, 2002,
          and 2001 were $20.77,  21.76, and 25.19,  respectively.  The following
          assumptions  were used to compute these fair values using the Cox Ross
          Rubinstein  binomial  model at grant date in accordance  with SFAS No.
          148 adoption standards:

                                       2003              2002             2001
                                       ----              ----             ----
          Risk-free interest rate      2.97%             3.80%            4.50%
          Expected life in years       5.00              5.00             5.00
          Volatility                   45.2%             46.2%            51.6%
          Dividend Yield                  0%                0%               0%

          During  2003,  a  modification  was  made  for  the   continuation  of
          certain  employees  options after their  termination from the Company.
          The weighted average of the fair value of their modified options, risk
          free interest rate at modification date,  expected life and volatility
          was $35.10, 2.06%, 3.81 years, and 45.3%, respectively.

          For  purposes  of  the  pro  forma  disclosures  above,  the estimated
          fair  values of options  granted  are  amortized  to expense  over the
          options' vesting period.



                                       46
<PAGE>


                    Scotsman Holdings, Inc. and Subsidiary
                   Notes to Consolidated Financial Statements

2.  Summary of Significant Accounting Policies (continued)

(i)       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.

(j)       Advertising costs

          Advertising  costs  are  expensed  as  incurred.  Advertising  expense
          for the years ended  December  31,  2003,  2002,  and 2001 was $3,935,
          $4,189, and $4,538,  respectively and is included in selling, general,
          and  administrative   expenses  in  the  consolidated   statements  of
          operations.

(k)       Earnings Per Share

          The following table sets forth the components of the  weighted-average
          shares  outstanding  for the  basic  and  diluted  earnings  per share
          computations:

                                                   December 31
                                      2003           2002            2001
                                    -----------------------------------------
          Weighted-average shares-
          basic                     6,194,799      6,195,184      6,196,623

          Effect of employee stock
          options                          --        347,776        338,068
                                    -----------------------------------------
          Weighted-average shares-
          diluted                   6,194,799      6,542,960      6,534,691
                                    =========================================


          Common stock equivalents of approximately 355,000 were  excluded  from
          the weighted average shares-diluted total for the year  ended December
          31, 2003 due to their anti-dilutive nature,  which  resulted  from the
          Company's net loss for such period.


                                       47
<PAGE>

                     Scotsman Holdings, Inc. and Subsidiary
                   Notes to Consolidated Financial Statements


(l)       Revenue Recognition

          The  Company's  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  and
          installed,  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.
          Where applicable,  the Company's revenue recognition policy takes into
          consideration  the guidance of Emerging Issues Task Force (EITF) Issue
          No.  00-21,  Revenue  Arrangements  with  Multiple  Deliverables.  The
          Company has  determined  that for the  majority of  arrangements  with
          multiple  deliverables,  the Company meets the criteria to account for
          these deliverables separately.


(m)       Foreign Currency Translation

          The  financial   statements  of   Scotsman's  foreign  subsidiary  for
          which  the  local  currency  is  the  functional   currency  has  been
          translated  into  U.S.  dollars  in  accordance  SFAS No. 52 - Foreign
          Currency Translation.  All balance sheet accounts have been translated
          using the exchange  rate in effect at the balance  sheet date.  Income
          statement  amounts  have been  translated  using the average  exchange
          rates during the year. The gains and losses resulting from the changes
          in  exchange  rates  from  year to year have  been  reported  in other
          comprehensive  income.  The effect on the  consolidated  statements of
          operations of all transaction  gains and losses is  insignificant  for
          all years presented.

(n)       Reclassifications

          Certain  prior  year  amounts  have  been  reclassified  to conform to
          current year  presentation.  Certain  amounts in the statement of cash
          flow have been  reclassified  to  reflect  the  effects  of changes in
          foreign currency exchange rates.


                                       48
<PAGE>
                                        Scotsman Holdings, Inc. and Subsidiary
                                      Notes to Consolidated Financial Statements

3.  Property and Equipment

Property and equipment consist of the following:
                                                     December 31
                                                2003                2002
                                          -----------------------------------

Land                                        $   19,286         $    19,441
Buildings and improvements                      33,231              33,145
Furniture and equipment                         73,373              65,515
                                          -----------------------------------
                                               125,890             118,101
Less accumulated depreciation                   45,140              37,852
                                          -----------------------------------
Net property and equipment                  $   80,750         $    80,249
                                          ===================================

<TABLE>
<CAPTION>
Depreciation  expense  related  to  property  and equipment was $8,229, $7,206, $7,942 for the years ended December
31,  2003,  2002,  and 2001, respectively.


4.  Goodwill and Other Intangible Assets

The  following  table  displays the  intangible  assets that continue to be subject to amortization and intangible
assets not subject to amortization:


                                --------- December 31, 2003 ---------        --------- December 31, 2002---------
<S>                              <C>           <C>               <C>         <C>         <C>                <C>

                                  Gross                           Net         Gross                         Net
                                 Carrying      Accumulated       Book       Carrying     Accumulated        Book
                                  Amount      Amortization       Value        Amount     Amortization       Value
                                 -------      ------------       -----        ------     ------------       -----
   Amortizable:
       Non-Compete
          Agreements              $3,514            $2,421      $1,093        $3,445           $1,795      $1,650
       Customer Base               2,000               518       1,482         2,000              412       1,588
                                   -----             -----       -----         -----            -----       -----
                                  $5,514            $2,939      $2,575        $5,445           $2,207      $3,238
                                  ======            ======       =====        ======            =====       =====
   Unamortizable:
        Goodwill                $185,500           $15,587    $169,913      $184,518          $15,587    $168,931
                                ========           =======     =======       =======           ======     =======


                                                             49
<PAGE>

                                       Scotsman Holdings, Inc. and Subsidiary
                                      Notes to Consolidated Financial Statements

Amortization expense for the year ended December 31, 2003 was $.7 million, which represents the amortization  related
to the identified intangible assets still required to be amortized under SFAS No. 142. These include covenants not to
compete and customer base, which are being amortized on a straight-line basis over periods of 24 to 228  months.  The
weighted average remaining life for these identified intangible assets is 110 months. Amortization  expense  relating
to these identified intangibles for each of the next five years is as follows:

                                    2004               $573
                                    2005                562
                                    2006                229
                                    2007                150
                                    2008                105
                              Thereafter                956

A summary of the changes in the carrying amount of goodwill for the years ended December 31, 2003  and  2002  is  as
follows:
<CAPTION>

<S>                                      <C>                <C>                     <C>                 <C>

                                         ---------December 31, 2003-----             -------December 31, 2002-------
                                         Gross Carrying     Accumulated             Gross Carrying      Accumulated
                                             Amount         Amortization                Amount          Amortization
                                         --------------     ------------             -------------      ------------
Beginning Balance                           $184,518         $ 15,587                  $183,965            $15,587

Net Goodwill Acquired                            982               --                       553                 --
                                             -------           ------                   -------             ------
Ending Balance                              $185,500         $ 15,587                  $184,518            $15,587
                                             =======           ======                   =======             ======

</TABLE>

                                                                 50
<PAGE>

                     Scotsman Holdings, Inc. and Subsidiary
                   Notes to Consolidated Financial Statements

4.  Goodwill and Other Intangible Assets (continued)

     As required  by SFAS No. 142,  the results of the prior years have not been
restated.  A reconciliation of net income as if SFAS No. 142 had been adopted as
of January 1, is  presented  below for the three years ended  December 31, 2003,
2002, and 2001, respectively.


                                             2003          2002          2001
                                             ----          ----          ----


          Reported net (loss) income      $(11,682)      $15,198       $22,629
          Add back:
          Goodwill and Other Intangible
          amortization (net of tax)             --            --         4,735
                                            ------        ------         -----
          Adjusted net (loss) income      $(11,682)      $15,198       $27,364
                                            ======        ======        ======

          Earnings per share basic:
          Reported net (loss) income      $  (1.89)      $  2.45       $  3.65
                                              ====          ====          ====
          Adjusted net (loss) income      $  (1.89)      $  2.45       $  4.42
                                              ====          ====          ====


          Earnings per share diluted:
          Reported net (loss) income      $  (1.89)      $  2.32       $  3.46
                                              ====          ====          ====
          Adjusted net (loss) income      $  (1.89)      $  2.32       $  4.19
                                              ====          ====          ====


5.  Revolving Credit Facility and Long-Term Debt

Debt consists of the following:
                                                        December 31
                                                   2003             2002
                                             ----------------------------------

Borrowings under revolving credit facility     $    54,940     $    197,691
Term loan                                          208,428          238,200
9.875% senior notes, due June 2007
    net of unamortized discount of $1,189
          in 2003 and $1,546 in 2002               548,810          548,454
10.0% senior secured notes due August 2008         150,000               --
                                             ----------------------------------
                                               $   962,178     $    984,345
                                             ==================================







                                       51

<PAGE>


                    Scotsman Holdings, Inc. and Subsidiary
                   Notes to Consolidated Financial Statements

5.  Revolving Credit Facility and Long-Term Debt (continued)

     In August 2003,  the Company  issued $150.0 million of 10.0% senior secured
notes due 2008.  The Company  used the net proceeds of $145.4  million  received
from that  offering  to repay  $27.5  million  of the term loan under its credit
agreement and repay $117.9 million of borrowings and terminate commitments under
its revolving  credit  facility.  In accordance with SFAS No. 145 - Recission of
FASB  Statements  No. 4, 44, and 64,  Amendment  of FASB  Statement  No. 13, and
Technical  Correction,  $1.5 million (net of tax of approximately $1 million) in
deferred  financing  costs  related  to the  extinguished  debt was  immediately
amortized  in 2003 and  included  in  interest  expense.  The impact of the debt
extinguishment  to earnings per basic share and  earnings per diluted  share was
$.25 and $.25, respectively, for 2003.


     The 10.0% senior secured notes are fully and unconditionally  guaranteed on
a senior  secured  second lien basis by the Company's  100% owned  subsidiaries:
Space Master  International,  Inc.,  Evergreen  Mobile Company,  Truck & Trailer
Sales, Inc. and Williams Scotsman of Canada,  Inc.  Willscot,  also a 100% owned
subsidiary  of Scotsman,  has fully and  unconditionally  guaranteed  the senior
secured  notes on a  subordinated  secured  second lien basis.  These 100% owned
subsidiaries  act as joint and several  guarantors of the senior  secured notes.
See Note 1  Organization  and Basis of  Presentation  for a  description  of the
operations of Willscot.  The 10.0% senior  secured notes are due August 15, 2008
with interest  payable  semi-annually on February 15 and August 15 of each year.
On August 15, 2006, the 10.0% senior secured notes will become redeemable at the
option of the  Company,  at a  redemption  price of 105.0%  during the  12-month
period beginning August 15, 2006 and 102.5% beginning August 15, 2007.

     In February 2002,  the Company  issued $150.0 million of additional  9.875%
senior  notes  under its  existing  indenture,  which were  issued at a price of
98.75%.  Net  proceeds  from the  issuance  were used to  permanently  repay the
outstanding  balance of the term loan  ($58,050  plus accrued  interest)  and to
reduce outstanding borrowings under the then existing revolving credit facility.
The Company's 9.875% senior notes are fully and unconditionally  guaranteed on a
senior  unsecured basis by the Company's 100% owned  subsidiaries,  Space Master
International,  Inc., Evergreen Mobile Company,  Truck & Trailer Sales, Inc. and
Williams  Scotsman  of  Canada,  Inc.  Willscot  has fully  and  unconditionally
guaranteed  the 9.875% senior notes on a  subordinated  basis.  These 100% owned
subsidiaries  (Guarantor  Subsidiaries),  act as joint and several guarantors of
the9.875%  senior  notes.  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 June 1,
2003, the 9.875% senior notes became redeemable at the option of the Company, at
a redemption price of 102.469% during the 12-month period beginning June 1, 2003
and 100% thereafter.



                                       52

<PAGE>


                    Scotsman Holdings, Inc. and Subsidiary
                   Notes to Consolidated Financial Statements

5.  Revolving Credit Facility and Long-Term Debt (continued)

     On March 26, 2002, the Company entered into a new credit facility,  the net
proceeds from which were used to refinance its existing  credit  facility.  This
credit agreement  provided for a $460.0 million  revolving  credit  facility,  a
$210.0  million term loan,  both  maturing on December  31,  2006,  and up to an
additional  $30.0 million in term or revolver  commitments.  In accordance  with
SFAS No. 145, $1.0 million (net of tax of approximately $.6 million) in deferred
financing costs related to this  refinancing  was amortized  immediately in 2002
and included in interest  expense,  resulting in an impact to earnings per basic
share and earnings per diluted share of $.24 and $.23, respectively.

     Interest on  borrowings  under the  revolver is payable at a rate of either
prime plus 1.75% or the Eurodollar rate plus 3.0%. The weighted average interest
rates of the  revolver  under  the  credit  agreement  were  4.50%  and 4.74% at
December  31, 2003 and 2002,  respectively.  Principal  payments due on the term
loan are equal to 1% per year payable  quarterly through September 30, 2006 with
the balance due on December 31, 2006.  Interest on the term loan is payable at a
rate of either prime plus 1.75% or the Eurodollar rate plus 3.00%.  The weighted
average  interest  rates of the term loan under the credit  agreement were 4.24%
and 4.75% at December 31, 2003 and 2002, respectively.

     Borrowings  under the new 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.   The  credit   agreement   contains
restrictions on the amount of dividends that the Company can pay to Holdings and
requires   compliance  with  certain  financial   covenants   including  capital
expenditures,  interest coverage,  and leverage and fleet utilization levels. In
August 2003, the Company  amended these  financial  ratios by (1) increasing the
permitted maximum leverage ratio, (2) decreasing the required  utilization rate,
and (3) decreasing the minimum interest  coverage ratio.  These steps are geared
toward  improving  the  company's  underlying  liquidity,   profitability,   and
performance.  The failure to maintain  the  required  ratios would result in the
Company not being able to borrow  under the credit  agreement  and, if not cured
within the grace periods,  would result in a default under the credit agreement.
The Company is currently in compliance with all financial covenants.

     The  Company's  unused line of  revolving  credit at December  31, 2003 was
$287.1  million.   Borrowing  base  (collateral)   availability   calculated  in
accordance  with the credit  agreement was $231.4  million at December 31, 2003;
however,  Consolidated  Leverage Ratio covenant restrictions further limited the
Company's borrowing availability at December 31, 2003 to $57.9 million. In order
to  meet  future  cash  requirements,  the  Company  intends  to use  internally
generated funds and to borrow under its credit facility. The Company believes it
will have sufficient  liquidity under its revolving line of credit and from cash
generated from operations to fund its operations for the next 12 months.



                                       53

<PAGE>


                    Scotsman Holdings, Inc. and Subsidiary
                   Notes to Consolidated Financial Statements

5.  Revolving Credit Facility and Long-Term Debt (continued)

At December 31, 2003 and 2002, the fair value of debt was approximately $983,118
and $944,641, respectively.

Letter  of  credit  obligations at December 31, 2003 and 2002 were approximately
$8,098 and $5,172 million, respectively.

Maturities  of  long  term debt during the years subsequent to December 31, 2003
are as follows:

                                2004     $  2,121
                                2005        2,121
                                2006      259,126
                                2007      548,810
                                2008      150,000


     The individual  short-term  contracts of the revolving credit facility come
due in accordance with the terms of each contractual  borrowing under the credit
facility, which vary from 30 to 180 days. The Company intends to reborrow funds,
as deemed available in accordance with the covenants and  restrictions  outlined
in the Company's credit  agreement,  until the revolving credit facility expires
in June 2006.











                                       54

<PAGE>

                    Scotsman Holdings, Inc. and Subsidiary
                   Notes to Consolidated Financial Statements


6.   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:

                                                              December 31
                                                           2003          2002
                                                      -------------------------

Deferred tax liabilities:
   Cost basis in excess of tax basis of assets and
   accelerated tax depreciation:
        Rental equipment                               $256,329        $256,986
        Property and equipment                              737           1,042
       Other                                                977           2,582
                                                      -------------------------
           Total deferred tax liabilities               258,043         260,610
                                                      -------------------------
Deferred tax assets:
   Allowance for doubtful accounts                          338             423
   Rents billed in advance                                7,296           7,893
   Stock option compensation                              4,206           3,911
   Deferred compensation                                    521             537
   Net operating loss carryovers                        100,719          93,963
   Alternative minimum tax credit carryovers              1,759           1,759
   Other                                                    614             565
                                                      -------------------------
                                                        115,453         109,051
   Less:  valuation allowance                            (4,802)         (3,400)
                                                      -------------------------
         Total deferred tax assets                      110,651         105,651
                                                      -------------------------
Net deferred tax liabilities                           $147,392        $154,959
                                                      =========================

     At  December  31,  2003,  the  Company had net  operating  loss  carryovers
available  for  federal  and foreign  income tax  purposes  of $240,647  (net of
related  valuation  allowance).  These net operating loss  carryovers  expire at
various dates from 2004 to 2023. Also, alternative minimum tax credit carryovers
of approximately $1,759, are available without expiration limitations.

     During 2003, a valuation  allowance of $3,400 related to  precapitalization
loss carryover  limitations was reversed  pursuant to changes in IRS guidelines.
Also during 2003, a net operating loss of $774 expired. A valuation allowance of
$4,802  was  recorded  based  on the  potential  expiration  of  additional  net
operating loss carryovers.








                                       55
<PAGE>


                    Scotsman Holdings, Inc. and Subsidiary
                   Notes to Consolidated Financial Statements

6.  Income Taxes (continued)

Income tax expense (benefit) consists of the following:

                                                   Years ended December 31
                                               2003          2002          2001
                                             ----------------------------------

Current
    Federal                                   $     --    $      --    $     --
    State                                          400          292         210
    International                                  109           86          42
                                             ----------------------------------
                                              $    509    $     378    $    252
                                             ----------------------------------
Deferred
    Federal                                   $ (8,178)   $   6,459    $ 13,683
    State                                       (1,357)       1,078       2,278
    International                                1,895          222       1,372
                                             ----------------------------------
                                              $ (7,640)   $   7,759    $ 17,333
                                             ----------------------------------
Total income taxes                            $ (7,131)   $   8,137    $ 17,585
                                             ==================================

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:

                                                    Years ended December 31
                                                2003          2002         2001
                                               ---------------------------------

Income tax at statutory rate                  $ (6,585)     $  8,167     $14,076
State income taxes, net of federal tax            (654)          889       1,618
Amortization of intangible assets                   47            70       1,776
Other                                               61          (989)        115
                                               ---------------------------------
                                              $ (7,131)     $  8,137     $17,585
                                               =================================

     The components of (loss) income from consolidated  operations before income
taxes is as follows:


                                                Years ended December 31
                                                2003          2002         2001
                                       -----------------------------------------

United States                                 $(23,700)     $ 19,470     $37,876
International                                    4,887         3,865       2,338
                                       -----------------------------------------
                                              $(18,813)      $23,335     $40,214
                                       =========================================


                                       56
<PAGE>


                     Scotsman Holdings, Inc. and Subsidiary
                   Notes to Consolidated Financial Statements

7.  Commitments and Contingencies

     The Company is obligated under  noncancelable  operating  leases of certain
equipment, vehicles and parcels of land. At December 31, 2003 approximate future
minimum rental payments are as follows:

         2004                                                $10,342
         2005                                                  8,579
         2005                                                  5,718
         2006                                                  3,596
         2007                                                  2,004
         Thereafter                                            2,367
                                                               -----

         Total minimum future lease payments                 $32,606
                                                             =======

     Rent expense was $13,155, in 2003, $12,901, in 2002, and $11,490, in 2001.

     The Company is involved in various  lawsuits and claims  arising out of the
normal course of its business.  In addition,  the Company has insurance policies
to cover  general  liability and workers  compensation  related  claims.  In the
opinion  of  management,  the  ultimate  amount  of  liability  not  covered  by
insurance,  if  any,  under  pending  litigation  and  claims  will  not  have a
materially  adverse effect on the financial position or operating results of the
Company.

8. 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
up to the dollar  limit  described  in Section  402(g) of the Code  ($12,000  in
2003).  All  amounts  deferred  under this  salary  reduction  feature are fully
vested.  In accordance  with the Economic Growth and Tax Relief Act of 2001, the
Plan also allows employees over the age of 50 to contribute an additional $2,000
as a "catch-up contribution."

     The 401(k)  Plan has a  "matching"  contribution  feature  under  which the
Company may contribute a percentage of the amount deferred by each  participant,
excluding the "catch-up contribution." 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 $261 in 2003, $668 in 2002, and $587 in 2001. The
Company  temporarily  eliminated the 401(k) employer match in April 2003 as part
of a cost reduction  initiative.  No contributions have been made by the Company
under the profit-sharing feature. The Company has adopted a Deferred



                                       57
<PAGE>

                     Scotsman Holdings, Inc. and Subsidiary
                   Notes to Consolidated Financial Statements

8.   Employee Benefit Plans (continued)

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, 2003 and 2002, the total amount deferred
under  this  plan,   including  earnings,   was  approximately  $726  and  $649,
respectively.

     Holdings has adopted  stock  option plans for certain key  employees of the
Company.  In 2003 the Company  adopted the 2003 Employee  Stock Option Plan (the
"2003 plan") which  allowed for up to 230,000  options to be granted.  Under the
1997  Employee  Stock Option Plan (the "1997  Plan"),  up to 479,500  options to
purchase Holdings'  outstanding common stock could be granted. The 1997 plan was
subsequently  amended  and  restated in 1998 (the  "Amended  and  Restated  1997
Employee Stock Option Plan").  Prior to the 1997  recapitalization,  the Company
had adopted the 1994  Employee  Stock  Option Plan (the "1994 plan") for certain
key employees.  All options  outstanding under the 1994 plan became fully vested
in  conjunction  with the  recapitalization.  The three stock  option  plans are
referred to collectively as the "Stock Option Plans."

     The options under the Stock Option Plans 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 options were granted with an
exercise price equal to the fair value of the shares as of the date of grant.

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


                    2003                      2002                   2001
           ---------------------  ------------------------- --------------------
                       Weighted                 Weighted                Weighted
                        Average                  Average                 Average
                       Exercise                 Exercise                Exercise
            Options     Price      Options       Price      Options       Price
           ----------   ------    ----------     -----     ---------      -----
Beginning
  balance   1,118,990   $23.87     1,125,140     $23.87    1,120,540     $23.56

Granted       196,450    50.67         6,300      50.67       23,300      50.67
Canceled            -        -             -          -            -          -
Forfeited     (53,850)  (37.60)      (12,450)    (37.60)     (18,700)    (38.45)
           ----------   ------    -----------    ------    ---------      -----
Ending
  balance   1,261,590    23.87     1,118,990      23.87    1,125,140      23.87

Exercisable
  at end of
  year        979,963    20.69       986,500      20.69      975,506      20.26



                                       58
<PAGE>

                     Scotsman Holdings, Inc. and Subsidiary
                   Notes to Consolidated Financial Statements

8.   Employee Benefit Plans (continued)


Exercise prices for options outstanding as of December 31, 2003 are detailed in
the following table.


-------------------------------------------------------------------------------

                                                            Weighted Average
Exercise  Shares Outstanding at   Shares Exercisable at         Remaining
Price      December 31, 2003        December 31, 2003       Contractual Life
-------------------------------------------------------------------------------
$ 4.59            72,000                   72,000                 1.2 years
$ 9.60           274,650                  274,650                 2.2 years
$18.39           266,490                  266,490                 3.2 years
$30.50           322,150                  282,483                 4.0 years
$50.67           326,300                   84,340                 5.0 years
-------------------------------------------------------------------------------


     At December 31, 2003,  the Company had  approximately  1,341,000  shares of
common  stock  reserved  for the  exercise  of  outstanding  stock  options  and
additional  stock options  authorized  for granting  under existing stock option
plans.

9. Related Party Transactions

     During 2003,  2002 and 2001,  Scotsman paid  dividends of  approximately
$55, $133, and $60, respectively, to Holdings primarily to fund normal operating
expenses.











                                       59
<PAGE>


                     Scotsman Holdings, Inc. and Subsidiary
                   Notes to Consolidated Financial Statements



10. Assets Held for Sale

     Given  recent  economic  trends,   the  Company   implemented  a  strategic
initiative  to dispose of  selected  rental  units in its lease  fleet which the
Company has determined no longer merit further  investment.  In accordance  with
SFAS No. 144 - Accounting  for the  Impairment or Disposal of Long Lived Assets,
the Company plans to sell to one or more buyers approximately 2,900 units within
a year of December  31, 2003,  the  effective  date of the disposal  initiative.
Accordingly,  the  Company  recorded a $19.4  million  impairment  charge in the
fourth  quarter  of 2003 to  reflect  the  write-down  of these  assets to their
estimated  fair value (less costs to sell).  These units have been  removed from
the lease fleet  equipment and  classified  separately as "Held for Sale" assets
which are  included  in other  assets on the  consolidated  balance  sheet as of
December  31,  2003.  The  December 31, 2002 amount of "Held for Sale" units has
also been reclassed on the balance sheet for comparative  purposes in accordance
with SFAS No. 144.

     As of December  31,  2003 and 2002,  assets  classified  as "Held for Sale"
related to the strategic initiative were $394 and $21,160.

 11.  Sale of Finance Leases

     On June 27,  2003,  the  Company  completed  the sale of a  portion  of its
finance lease portfolio at  approximately  book value.  The total purchase price
was $4.6 million and the net proceeds from sale were used to pay down borrowings
under the  Company's  revolving  credit  facility.  The leases sold,  which were
deemed not to be a part of the  Company's  core  business,  will  continue to be
serviced by the Company on behalf of the buyer.

12.  Change in Accounting Estimate

     In October 2002, the Company changed its estimated  residual value from 50%
of  capitalized  costs to $1 for  certain  classroom  units.  Additionally,  the
remaining  estimated  useful life for a portion of these units was reduced to 45
months.  The effect of this change in  estimate  is an increase in  depreciation
expense  of  approximately  $2,400,  a decrease  in net income of $1,460,  and a
decrease in earnings per basic share and earnings per diluted  share of $.24 and
$.24, respectively, for the year ended December 31, 2003.




                                       60

<PAGE>


                    Scotsman Holdings, Inc. and Subsidiary
                   Notes to Consolidated Financial Statements


13.   Prepaid Expenses and Other Current Assets and Accrued Expenses

     Prepaid expenses and other current assets consists of the following as of
December 31:



                                                    2003                 2002
                                                    ----                 ----
Cost in excess of billings, net                 $ 11,827             $  6,323
Inventories                                       13,036               13,036
Prepaid expenses                                   8,878                5,524
                                                   -----               ------
Prepaid expenses and other current assets        $33,741             $ 24,883
                                                  ======               ======


Accrued expenses consists of the following as of December 31:

                                                    2003                 2002
                                                    ----                 ----
Payroll and employee benefits                  $   8,147            $   8,283
Accrued interest                                  11,454                8,226
Other liabilities                                  9,776               12,651
                                                   -----               ------
Accrued expenses                               $  29,377            $  29,160
                                                  ======               ======


                                       61
<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,  2003 and 2002,  and the
related consolidated  statements of operations,  changes in stockholder's equity
(deficit)  and cash  flows  for each of the  three  years  in the  period  ended
December 31, 2003.  Our audits also  included the financial  statement  schedule
listed in the Index at Item 8. 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 and schedule
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,  2003  and  2002,  and the
consolidated  results of their  operations  and their cash flows for each of the
three years in the period ended December 31, 2003, 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,  presents fairly in all material respects
the information set forth therein.

     As discussed  in Notes 1 and 4 to the  Consolidated  Financial  Statements,
effective  January 1, 2002 the  Company  changed  its method of  accounting  for
goodwill and other intangible assets.

     As discussed in Note 2 to the Consolidated Financial Statements,  effective
January 1, 2003 the Company  changed its method of  accounting  for  stock-based
compensation.

                                                           /s/ Ernst & Young LLP
Baltimore, Maryland

February 6, 2004




                                       62
<PAGE>
<TABLE>
<CAPTION>


                                       Williams Scotsman, Inc. and Subsidiaries
                                              Consolidated Balance Sheets


                                                                                        December 31
                                                                                  2003              2002
                                                                            ------------------------------

                                                                                   (In thousands)
Assets
<S>                                                                        <C>                <C>

Cash                                                                          $      387        $      427
Trade accounts receivable, net of allowance for doubtful accounts of
   $862 in 2003 and $1,071 in 2002                                                55,841            63,965
Prepaid expenses and other current assets                                         33,741            24,883
Rental equipment, net of accumulated depreciation of $224,794 in 2003
   and $195,874 in 2002                                                          828,078           828,927
Property and equipment, net                                                       80,750            80,249
Deferred financing costs, net                                                     22,868            23,616
Goodwill                                                                         169,913           168,931
Other intangible assets, net                                                       2,575             3,238
Other assets                                                                      10,958            35,529
                                                                            ----------------------------------
                                                                              $1,205,111        $1,229,765
                                                                            ==================================

Liabilities and stockholder's equity
Accounts payable                                                              $   29,505        $   23,257
Accrued expenses                                                                  29,365            29,146
Rents billed in advance                                                           18,295            18,773
Revolving credit facility                                                         54,940           197,691
Long-term debt, net                                                              907,238           786,654
Deferred income taxes                                                            152,903           160,451
                                                                            ----------------------------------
         Total liabilities                                                     1,192,246         1,215,972
                                                                            ----------------------------------

Stockholder's equity:
   Common stock, $.01 par value.  Authorized 10,000,000 shares; issued
     and outstanding 3,320,000 shares                                                 33                33
   Additional paid-in capital                                                    132,368           131,602
   Cumulative foreign currency translation adjustment                              8,621            (1,386)
   Retained deficit                                                             (128,157)         (116,456)
                                                                            ----------------------------------

Total stockholder's equity                                                        12,865            13,793
                                                                            ----------------------------------

                                                                              $1,205,111        $1,229,765
                                                                            ==================================
See accompanying notes.
</TABLE>



                                                      63

<PAGE>

<TABLE>
<CAPTION>

                    Williams Scotsman, Inc. and Subsidiaries
                      Consolidated Statements of Operations


                                                                              Year ended December 31
                                                                     2003            2002            2001
                                                                 ---------------------------------------------
                                                                            (In thousands except
                                                                              per share amounts)
Revenues
<S>                                                                  <C>               <C>          <C>

Leasing                                                              $213,976        $227,106     $238,151
Sales:
   New units                                                           71,635          98,927       91,114
   Rental equipment                                                    20,734          23,951       22,212
Delivery and installation                                              91,318         101,034       97,342
Other                                                                  40,113          44,155       43,437
                                                                 -------------------------------------------
         Total revenues                                               437,776         495,173      492,256
                                                                 -------------------------------------------


Cost of sales and services
Leasing:
   Depreciation and amortization                                       49,097          45,834       41,761
   Other direct leasing costs                                          47,864          46,410       43,109
Sales:
   New units                                                           59,411          82,564       75,169
   Rental equipment                                                    16,361          18,164       16,886
Delivery and installation                                              78,856          84,540       78,339
Other                                                                   8,274           9,901        8,374
                                                                 -------------------------------------------
         Total costs of sales and services                            259,863         287,413      263,638
                                                                 -------------------------------------------
         Gross profit                                                 177,913         207,760      228,618
                                                                 -------------------------------------------
Selling, general and administrative expenses                           76,241          85,722       82,516
Other depreciation and amortization                                    13,869          13,438       18,845
Interest, including amortization of deferred financing
   costs of $8,789, $7,948 and $5,269                                  87,174          85,208       85,486
Held for sale impairment charge                                        19,386              --           --
Non-cash charge for casualty loss                                          --              --        1,500
                                                                 -------------------------------------------
         Total operating expenses                                     196,670         184,368      188,347
                                                                 -------------------------------------------
        (Loss) income  before income taxes                            (18,757)         23,392       40,271
Income tax (benefit) expense                                           (7,111)          8,157       17,605
                                                                 -------------------------------------------
         Net (loss) income                                       $    (11,646)       $ 15,235     $ 22,666
                                                                 ===========================================

(Loss) earnings per common share                                 $      (3.51)       $   4.59     $   6.83
                                                                 ============================================

See accompanying notes.


                                                         64
</TABLE>

<PAGE>
<TABLE>
<CAPTION>


                                               Williams Scotsman, Inc. and Subsidiaries
                                 Consolidated Statements of Changes in Stockholder's Equity (Deficit)

                                                                                                   Cumulative
                                                                                                    Foreign
                                                                   Additional                       Currency
                                              Common Stock          Paid-in        Retained        Translation
                                           Shares      Amount       Capital        Deficit         Adjustment          Total
                                      -------------------------------------------------------------------------------------------
                                                                     (In thousands)
<S>                                         <C>         <C>        <C>           <C>                <C>                <C>

Balance at December 31, 2000                3,320       $33        $126,567      $(154,164)      $    (457)           $(28,021)
Foreign currency translation
   adjustment                                                                                       (1,048)             (1,048)
Non-cash stock option
   compensation expense                         -         -            (278)             -               -                (278)
Dividends to parent--$.02 per
   share                                        -         -               -            (60)              -                 (60)
Net income                                      -         -               -         22,666               -              22,666
                                      -------------------------------------------------------------------------------------------
Balance at December 31, 2001                3,320        33         126,289       (131,558)         (1,505)             (6,741)
Foreign currency translation
   adjustment                                   -         -               -              -             119                 119
Non-cash stock option compensation
   expense                                      -         -           5,313              -               -               5,313
Dividends to parent--$.04 per share
                                                -         -               -           (133)              -                (133)
Net income                                      -         -               -         15,235               -              15,235
                                      -------------------------------------------------------------------------------------------
Balance at December 31, 2002                3,320        33         131,602       (116,456)         (1,386)             13,793
Foreign currency translation
   adjustment                                    -        -               -              -          10,007              10,007
Non-cash stock option compensation
   expense                                       -        -             766              -               -                 766
Dividends to parent--$.02 per share
                                                 -        -               -            (55)              -                 (55)
Net loss                                         -        -               -        (11,646)              -             (11,646)
                                      -------------------------------------------------------------------------------------------
Balance at December 31, 2003                3,320     $  33       $ 132,368      $(128,157)      $   8,621             $12,865
                                      ===========================================================================================

See accompanying notes.

</TABLE>

                                                                        65
<PAGE>

<TABLE>
<CAPTION>




                                       Williams Scotsman, Inc. and Subsidiaries
                                         Consolidated Statements of Cash Flows

                                                                                       Year ended December 31
                                                                            2003                2002                2001
                                                                         --------------------------------------------------
                                                                                             (In thousands)
Cash flows from operating activities
<S>                                                                     <C>                <C>                <C>

Net (loss) income                                                       $   (11,646)       $   15,235         $    22,666
Adjustments to reconcile net (loss) income to net cash provided by
   operating activities:
     Depreciation and amortization                                           71,755            66,614              65,875
     Amortization of bond discount                                              357               327                  --
     Provision for bad debts                                                  2,286             3,692               4,204
     Deferred income tax (benefit) expense                                   (7,621)            7,781              17,353
     Non-cash option compensation expense (income)                              766             5,313                (278)
     Non-cash held for sale impairment charge                                19,386                --                  --
     Gain on sale of rental equipment                                        (4,373)           (5,787)             (5,326)
     Gain (loss) on sale of fixed assets                                       (810)               50                 (30)
     Decrease (increase) in net trade accounts receivable                     6,881             6,695             (24,719)
     Increase (decrease) in accounts payable and accrued expenses,
       including casualty loss in 2001                                        6,162             2,097              (5,397)
     Other                                                                   (8,871)           (6,683)            (14,833)
                                                                         --------------------------------------------------
Net cash provided by operating activities                                    74,272            95,334              59,515
                                                                         --------------------------------------------------



</TABLE>











                                                       66

<PAGE>
<TABLE>
<CAPTION>


                                       Williams Scotsman, Inc. and Subsidiaries
                                 Consolidated Statements of Cash Flows (continued)

                                                                                       Year ended December 31,
                                                                              2003              2002             2001
                                                                          -----------------------------------------------
                                                                                            (in thousands)

<S>                                                                        <C>                <C>              <C>

Cash flows from investing activities
Rental equipment additions                                                  (53,307)          (40,814)        (105,509)
Proceeds from sales of rental equipment                                      20,734            23,951           22,212
Acquisition of businesses, net of cash acquired                              (3,434)           (7,308)         (26,114)
Purchase of property and equipment, net                                      (7,632)          (11,948)         (15,374)
                                                                          -----------------------------------------------
Net cash used in investing activities                                       (43,639)          (36,119)        (124,785)
                                                                          -----------------------------------------------

Cash flows from financing activities
Proceeds from debt                                                          597,379         1,123,473          547,129
Repayment of debt                                                          (619,903)       (1,162,427)        (483,267)
Increase in deferred financing costs                                         (8,041)          (20,263)            (557)
Cash dividends paid                                                             (55)             (133)             (60)
                                                                          -----------------------------------------------
Net cash (used in) provided by financing activities                         (30,620)          (59,350)          63,245
                                                                          -----------------------------------------------
Effect of exchange rate changes                                                 (53)              (22)              63
                                                                          -----------------------------------------------

Net decrease in cash                                                            (40)             (157)          (1,962)

Cash at beginning of period                                                     427               584            2,546
                                                                          -----------------------------------------------
Cash at end of period                                                   $       387     $         427    $         584
                                                                          ===============================================


Supplemental cash flow information:
   Cash paid for income taxes                                           $       396     $         518    $         306
                                                                          ===============================================
   Cash paid for interest                                               $    74,608     $      76,744    $      89,351
                                                                          ===============================================

See accompanying notes.
</TABLE>







                                                        67

<PAGE>


                    Williams Scotsman, Inc. and Subsidiaries
                   Notes to Consolidated Financial Statements
                 (Dollars in thousands, except per share amounts)
                           December 31, 2003 and 2002

1.  Organization and Basis of Presentation

Williams  Scotsman,  Inc. (the  Company) is a 100% 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 its
100% owned  subsidiaries,  Willscot  Equipment,  LLC  (Willscot),  and  Williams
Scotsman of Canada, Inc. Willscot,  a special purpose subsidiary,  was formed in
May 1997;  its  operations are limited to the leasing of its mobile office units
to the Company under a master lease.  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.  These 100%
owned subsidiaries are guarantors of the Company's credit facility as more fully
discussed in Note 5.

The  operations  of the  Company  consist  primarily  of the leasing and sale of
mobile offices,  modular  buildings and storage  products  (equipment) and their
delivery and installation throughout the United States and Canada.

Acquisition of AFA Locations Inc.

On May 29, 2003 the Company acquired AFA Locations Inc. (AFA), a privately-held,
Montreal,  Canadian-based  company  that was  involved  in the leasing of mobile
offices built by the manufacturing  operations of AFA's consolidated entity. The
purchase of the leasing  business  resulted in the acquisition of  approximately
300 units at a value of  approximately  $2.6  million and the  related  customer
base. The  transaction was accounted for under the purchase method of accounting
with a net  purchase  price of $3.2  million  and $.6 million of  goodwill.  The
acquisition was financed with borrowings under the Company's credit facility.







                                       68


<PAGE>


                    Williams Scotsman, Inc. and Subsidiaries
                   Notes to Consolidated Financial Statements

1.  Organization and Basis of Presentation (continued)

Acquisition of Northgate Industries Ltd

On July 31,  2002 the Company  acquired  the mobile  office and storage  product
fleet of Northgate Industries Ltd., an Edmonton,  Alberta-based Canadian company
that was involved in the leasing of mobile  offices to industrial  markets.  The
transaction was accounted for under the purchase method of accounting with a net
purchase price of $7.0 million being  allocated to the  identifiable  net assets
acquired of $6.6 million with the excess of $.4 million  representing  goodwill.
The purchase price  allocation was based upon estimates of the fair value of the
net assets acquired.  The acquisition,  which added over 500 units at a value of
approximately  $6.3 million,  was financed with  borrowings  under the Company's
credit facility.

Acquisition of Mckinney Mobile Modular

On February 1, 2001,  the Company  acquired the mobile  office sales and leasing
business of Mckinney  Mobile Modular,  a privately held  California  corporation
(Mckinney)  in  a  transaction  accounted  for  under  the  purchase  method  of
accounting.   Total   consideration   for  the   acquisition   of  Mckinney  was
approximately $26.1 million, including the repayment of existing indebtedness of
Mckinney.  The  purchase  price paid was  allocated to the  identifiable  assets
acquired of $21.6 million with the excess of $5.5 million representing  goodwill
and other  intangible  assets.  The purchase price allocation was based upon the
estimates of the fair value of the assets acquired. The acquisition, which added
over 1,600 units at a value of  approximately  $21.4 million,  was financed with
borrowings under the Company's then existing credit facility.

Recent Accounting Pronouncements

Stock-based  Compensation.  In December 2002, the Financial Accounting Standards
Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 148 -
Accounting for Stock-Based  Compensation - Transition and Disclosure,  effective
for fiscal years ending after December 15, 2002.  Effective January 1, 2003, the
Company  adopted the provisions  SFAS No. 148. See Note 2 Summary of Significant
Accounting  Policies - Stock-based  Compensation for further  discussion of SFAS
No. 148.


Goodwill and other intangible assets. In June 2001, the FASB issued SFAS No. 141
- Business Combinations, and SFAS No. 142 - Goodwill and Other Intangible Assets
.. SFAS No. 141 applies to all  business  combinations  with a closing date after
June 30, 2001. SFAS No. 141 also eliminates the  pooling-of-interests-method  of
accounting  and further  clarifies  the criteria for  recognition  of intangible
assets  separately from goodwill.  There was no material effect upon adoption of
SFAS No.  141,  which was  adopted on  December  1, 2001.  See Note 2 Summary of
Significant  Accounting  Policies-Goodwill  and   Other  Intangible  Assets  for

                                       69
<PAGE>

                    Williams Scotsman, Inc. and Subsidiaries
                   Notes to Consolidated Financial Statements

1.  Organization and Basis of Presentation (continued)

Recent Accounting Pronouncements (continued)

further discussion of SFAS No. 142,  which  was  adopted  on  January  1,  2002.
Also see Note 4, Goodwill and Other Intangible Assets.


2.  Summary of Significant Accounting Policies


(a)  Use of Estimates

     The  preparation   of   the   financial   statements   in  conformity  with
     accounting  principles  generally  accepted in the United  States  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)  Principles of Consolidation

     The   accompanying   consolidated    financial   statements   include   the
     accounts  of the  Company  and its  100%  owned  subsidiaries.  Significant
     intercompany   accounts   and   transactions   have  been   eliminated   in
     consolidation.

(c)  Accounts Receivable and Allowance for Doubtful Accounts

     The  Company's   accounts    receivable   consist  of   amounts   due  from
     customers throughout the United States and Canada.  Collateral is generally
     not  required.  The Company  provides an allowance  for  doubtful  accounts
     receivable  by a charge to  operations  in amounts  equal to the  estimated
     losses expected to be incurred in collection of the accounts. The estimated
     losses  are  based  on  historical   collection   experience,   days  sales
     outstanding  trends,  and an ongoing  review of  specific  customers  and a
     review of the current status of the existing receivables. Customer accounts
     are written off against the allowance for doubtful accounts when an account
     is determined to be uncollectible.



                                       70

<PAGE>


                    Williams Scotsman, Inc. and Subsidiaries
                   Notes to Consolidated Financial Statements

2.  Summary of Significant Accounting Policies (continued)

(d)       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 13 months at December 31, 2003. 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 generally
          of 10 to 20 years and an estimated residual value of typically 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.

(e)       Property and Equipment

          Property   and   equipment   is   stated  at   cost.  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.

(f)       Deferred Financing Costs

          Costs  of  obtaining   debt  are  amortized   using the  straight-line
          method which  approximates the effective interest rate method over the
          term of the debt.

(g)       Goodwill and Other Intangible Assets

          The   excess  of  cost  over  fair  values of net assets  acquired  in
          purchase  transactions  has been  recorded as goodwill.  In accordance
          with SFAS No. 142,  goodwill  (and  intangible  assets  deemed to have
          indefinite  lives) is no longer  amortized  but is  subject  to annual
          impairment  tests  in  accordance  with  the  Statement.  Prior to the
          adoption of this standard,  goodwill was amortized on a  straight-line
          basis over 20 to 40 years.  The Company  performed  the first of these
          required  tests during 2002 and  determined  that the  evaluation  for
          impairment  each year would be performed as of October 1. For 2003 and
          2002, goodwill was determined not to be impaired. On a periodic basis,
          the Company evaluates the carrying value of its intangible  assets  to


                                       71
<PAGE>


                    Williams Scotsman, Inc. and Subsidiaries
                   Notes to Consolidated Financial Statements

2.  Summary of Significant Accounting Policies (continued)


(g)       Goodwill and Other Intangible Assets (continued)

          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 Company over the remaining  amortization
          period,  the Company's  carrying  value of intangible  assets would be
          reduced by the  estimated  shortfall  of cash flows,  on a  discounted
          basis.  Intangible  assets with finite lives are amortized  over their
          estimated useful lives ranging from 24 to 228 months, with a remaining
          weighted average useful life of 110 months.

(h)       Stock-based Compensation

          Prior to  2003,  the  Company  accounted   for  its  issuance of stock
          options and any  modifications  thereof using variable plan accounting
          and the  intrinsic  value method  under  Accounting  Principles  Board
          Opinion No. 25 - Accounting  for Stock Issued to Employees (APB No.25)
          and related interpretations. Stock-based employee compensation expense
          (income)  for stock  options of $5,313 and $(278) was reflected in net
          income for the years ended  December 31, 2002 and 2001,  respectively.
          The 2002  compensation  expense resulted from a modification  made for
          the continuation of certain employees' options after their termination
          from the Company.

          Effective  January 1,  2003,  the   Company  adopted  the  fair  value
          recognition  provisions of SFAS No. 123 - Accounting  for  Stock-Based
          Compensation.  The Company selected the modified prospective method of
          adoption  described in SFAS No. 148.  Compensation  cost recognized in
          2003 of $766 is the same as that which would have been  recognized had
          the fair value  method of SFAS No. 123 been  applied from its original
          effective date. In accordance with the modified  prospective method of
          adoption, results for prior years have not been restated.





                                       72
<PAGE>


                    Williams Scotsman, Inc. and Subsidiaries
                   Notes to Consolidated Financial Statements

2.  Summary of Significant Accounting Policies (continued)

(h)       Stock-based Compensation (continued)

          Pro  forma   information   required   by   SFAS  No.   123   has  been
          determined  as if the Company had  accounted  for its  employee  stock
          options under the fair value method during each year  presented in the
          financial  statements.  The stock compensation expense for each period
          presented was determined  using a  straight-lined  attribution  method
          over the vesting period

                                                    Year Ended December 31,
                                                    ----------------------
                                                  2003       2002        2001
                                                  ----       ----        ----
          Net (loss) income, reported         $(11,646)   $15,235     $22,666
          Add: Stock compensation- net of tax
             reported                              476      3,460        (156)
          Deduct: Stock compensation-net of
          tax fair value-based                    (476)      (939)       (637)
                                                   ---        ---         ---
          Pro forma net (loss) income         $(11,646)   $17,756     $21,873
                                                 ======     ======      ======
          (Loss) Earnings per share:
             Reported                         $ (3.51)    $ 4.59      $ 6.83
                                                 ====       ====        ====
          Pro forma                           $ (3.51)    $ 5.35      $ 6.59
                                                 ====       ====        ====

          The  weighted  average  fair  value  of options granted in 2003, 2002,
          and 2001 were $20.77,  21.76, and 25.19,  respectively.  The following
          assumptions  were used to compute these fair values using the Cox Ross
          Rubinstein  binomial  model at grant date in accordance  with SFAS No.
          148 adoption standards:

                                       2003              2002             2001
                                       ----              ----             ----
          Risk-free interest rate      2.97%             3.80%            4.50%
          Expected life in years       5.00              5.00             5.00
          Volatility                   45.2%             46.2%            51.6%
          Dividend Yield                  0%                0%               0%

          During  2003,  a  modification  was  made  for  the   continuation  of
          certain  employees  options after their  termination from the Company.
          The weighted average of the fair value of their modified options, risk
          free interest rate at modification date,  expected life and volatility
          was $35.10, 2.06%, 3.81 years, and 45.3%, respectively.

          For  purposes  of  the  pro  forma  disclosures  above,  the estimated
          fair  values of options  granted  are  amortized  to expense  over the
          options' vesting period.



                                       73
<PAGE>


                    Williams Scotsman, Inc. and Subsidiaries
                   Notes to Consolidated Financial Statements

2.  Summary of Significant Accounting Policies (continued)

(i)       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.

(j)       Advertising costs

          Advertising  costs  are  expensed  as  incurred.  Advertising  expense
          for the years ended  December  31,  2003,  2002,  and 2001 was $3,935,
          $4,189, and $4,538,  respectively and is included in selling, general,
          and  administrative   expenses  in  the  consolidated   statements  of
          operations.

(k)       Earnings Per Share

          Earnings  per  share  is  computed based on weighted average number of
          common shares outstanding of 3,320,000 shares for 2003, 2002 and 2001.

(l)       Revenue Recognition

          The  Company's  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  and
          installed,  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.
          Where applicable,  the Company's revenue recognition policy takes into
          consideration  the guidance of Emerging Issues Task Force (EITF) Issue
          No.  00-21,  Revenue  Arrangements  with  Multiple  Deliverables.  The
          Company has  determined  that for the  majority of  arrangements  with
          multiple  deliverables,  the Company meets the criteria to account for
          these deliverables separately.





                                       74
<PAGE>


                    Williams Scotsman, Inc. and Subsidiaries
                   Notes to Consolidated Financial Statements

2.  Summary of Significant Accounting Policies (continued)

(m)       Foreign Currency Translation

          The  financial   statements  of  the  Company's foreign subsidiary for
          which  the  local  currency  is  the  functional   currency  has  been
          translated  into  U.S.  dollars  in  accordance  SFAS No. 52 - Foreign
          Currency Translation.  All balance sheet accounts have been translated
          using the exchange  rate in effect at the balance  sheet date.  Income
          statement  amounts  have been  translated  using the average  exchange
          rates during the year. The gains and losses resulting from the changes
          in  exchange  rates  from  year to year have  been  reported  in other
          comprehensive  income.  The effect on the  consolidated  statements of
          operations of all transaction  gains and losses is  insignificant  for
          all years presented.

(n)       Reclassifications

          Certain  prior  year  amounts  have  been  reclassified  to conform to
          current year  presentation.  Certain  amounts in the statement of cash
          flow have been  reclassified  to  reflect  the  effects  of changes in
          foreign currency exchange rates.


3.  Property and Equipment

Property and equipment consist of the following:
                                                     December 31
                                                2003                2002
                                          -----------------------------------

Land                                        $   19,286         $    19,441
Buildings and improvements                      33,231              33,145
Furniture and equipment                         73,373              65,515
                                          -----------------------------------
                                               125,890             118,101
Less accumulated depreciation                   45,140              37,852
                                          -----------------------------------
Net property and equipment                  $   80,750         $    80,249
                                          ===================================

Depreciation  expense  related  to  property  and  equipment was $8,229, $7,206,
$7,942 for the years ended  December  31,  2003,  2002,  and 2001, respectively.






                                       75
<PAGE>
<TABLE>
<CAPTION>


                                        Williams Scotsman, Inc. and Subsidiaries
                                       Notes to Consolidated Financial Statements

4.  Goodwill and Other Intangible Assets

The  following  table  displays the  intangible  assets that continue to be subject to amortization and intangible
assets not subject to amortization:


                                --------- December 31, 2003 ---------        --------- December 31, 2002---------
<S>                              <C>           <C>               <C>         <C>         <C>                <C>

                                  Gross                           Net         Gross                         Net
                                 Carrying      Accumulated       Book       Carrying     Accumulated        Book
                                  Amount      Amortization       Value        Amount     Amortization       Value
                                 -------      ------------       -----        ------     ------------       -----
   Amortizable:
       Non-Compete
          Agreements              $3,514            $2,421      $1,093        $3,445           $1,795      $1,650
       Customer Base               2,000               518       1,482         2,000              412       1,588
                                   -----             -----       -----         -----            -----       -----
                                  $5,514            $2,939      $2,575        $5,445           $2,207      $3,238
                                  ======            ======       =====        ======            =====       =====
   Unamortizable:
        Goodwill                $185,500           $15,587    $169,913      $184,518          $15,587    $168,931
                                ========           =======     =======       =======           ======     =======

Amortization expense for the year ended December 31, 2003 was $.7 million, which represents the amortization  related
to the identified intangible assets still required to be amortized under SFAS No. 142. These include covenants not to
compete and customer base, which are being amortized on a straight-line basis over periods of 24 to 228  months.  The
weighted average remaining life for these identified intangible assets is 110 months. Amortization  expense  relating
to these identified intangibles for each of the next five years is as follows:

                                    2004               $573
                                    2005                562
                                    2006                229
                                    2007                150
                                    2008                105
                              Thereafter                956

A summary of the changes in the carrying amount of goodwill for the years ended December 31, 2003  and  2002  is  as
follows:
<CAPTION>

<S>                                      <C>                <C>                     <C>                 <C>

                                         ---------December 31, 2003-----             -------December 31, 2002-------
                                         Gross Carrying     Accumulated             Gross Carrying      Accumulated
                                             Amount         Amortization                Amount          Amortization
                                         --------------     ------------             -------------      ------------
Beginning Balance                           $184,518         $ 15,587                  $183,965            $15,587

Net Goodwill Acquired                            982               --                       553                 --
                                             -------           ------                   -------             ------
Ending Balance                              $185,500         $ 15,587                  $184,518            $15,587
                                             =======           ======                   =======             ======

</TABLE>

                                                                 76
<PAGE>

                    Williams Scotsman, Inc. and Subsidiaries
                   Notes to Consolidated Financial Statements

4.  Goodwill and Other Intangible Assets (continued)

     As required  by SFAS No. 142,  the results of the prior years have not been
restated.  A reconciliation of net income as if SFAS No. 142 had been adopted as
of January 1, is  presented  below for the three years ended  December 31, 2003,
2002, and 2001, respectively.


                                             2003          2002          2001
                                             ----          ----          ----


          Reported net (loss) income      $(11,646)      $15,235       $22,666
          Add back:
          Goodwill and Other Intangible
          amortization (net of tax)             --            --         4,735
                                            ------        ------         -----
          Adjusted net (loss) income      $(11,646)      $15,235       $27,401
                                            ======        ======        ======

          Earnings per share:
          Reported net (loss) income      $  (3.51)      $  4.59       $  6.83
                                              ====          ====          ====
          Adjusted net (loss) income      $  (3.51)      $  4.59       $  8.25
                                              ====          ====          ====


5.  Revolving Credit Facility and Long-Term Debt

Debt consists of the following:
                                                        December 31
                                                   2003             2002
                                             ----------------------------------

Borrowings under revolving credit facility     $    54,940     $    197,691
Term loan                                          208,428          238,200
9.875% senior notes, due June 2007
    net of unamortized discount of $1,189
          in 2003 and $1,546 in 2002               548,810          548,454
10.0% senior secured notes due August 2008         150,000               --
                                             ----------------------------------
                                               $   962,178     $    984,345
                                             ==================================







                                       77

<PAGE>


                    Williams Scotsman, Inc. and Subsidiaries
                   Notes to Consolidated Financial Statements

5.  Revolving Credit Facility and Long-Term Debt (continued)

     In August 2003,  the Company  issued $150.0 million of 10.0% senior secured
notes due 2008.  The Company  used the net proceeds of $145.4  million  received
from that  offering  to repay  $27.5  million  of the term loan under its credit
agreement and repay $117.9 million of borrowings and terminate commitments under
its revolving  credit  facility.  In accordance with SFAS No. 145 - Recission of
FASB  Statements  No. 4, 44, and 64,  Amendment  of FASB  Statement  No. 13, and
Technical  Correction,  $1.5 million (net of tax of approximately $1 million) in
deferred  financing  costs  related  to the  extinguished  debt was  immediately
amortized  in 2003 and  included  in  interest  expense.  The impact of the debt
extinguishment to earnings per share was $.45 for 2003.

     The 10.0% senior secured notes are fully and unconditionally  guaranteed on
a senior  secured  second lien basis by the Company's  100% owned  subsidiaries:
Space Master  International,  Inc.,  Evergreen  Mobile Company,  Truck & Trailer
Sales, Inc. and Williams Scotsman of Canada,  Inc.  Willscot,  also a 100% owned
subsidiary, has fully and unconditionally guaranteed the senior secured notes on
a subordinated  secured second lien basis.  These 100% owned subsidiaries act as
joint  and  several   guarantors  of  the  senior  secured  notes.  See  Note  1
Organization  and Basis of  Presentation  for a description of the operations of
Willscot.  The 10.0% senior  secured notes are due August 15, 2008 with interest
payable  semi-annually  on February 15 and August 15 of each year. On August 15,
2006, the 10.0% senior secured notes will become redeemable at the option of the
Company,  at a redemption  price of 105.0% during the 12-month period  beginning
August 15, 2006 and 102.5% beginning August 15, 2007.

     In February 2002,  the Company  issued $150.0 million of additional  9.875%
senior  notes  under its  existing  indenture,  which were  issued at a price of
98.75%.  Net  proceeds  from the  issuance  were used to  permanently  repay the
outstanding  balance of the term loan  ($58,050  plus accrued  interest)  and to
reduce outstanding borrowings under the then existing revolving credit facility.
The Company's 9.875% senior notes are fully and unconditionally  guaranteed on a
senior  unsecured basis by the Company's 100% owned  subsidiaries,  Space Master
International,  Inc., Evergreen Mobile Company,  Truck & Trailer Sales, Inc. and
Williams  Scotsman  of  Canada,  Inc.  Willscot  has fully  and  unconditionally
guaranteed  the 9.875% senior notes on a  subordinated  basis.  These 100% owned
subsidiaries  (Guarantor  Subsidiaries),  act as joint and several guarantors of
the9.875%  senior  notes.  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 June 1,
2003, the 9.875% senior notes became redeemable at the option of the Company, at
a redemption price of 102.469% during the 12-month period beginning June 1, 2003
and 100% thereafter.



                                       78

<PAGE>


                    Williams Scotsman, Inc. and Subsidiaries
                   Notes to Consolidated Financial Statements

5.  Revolving Credit Facility and Long-Term Debt (continued)

     On March 26, 2002, the Company entered into a new credit facility,  the net
proceeds from which were used to refinance its existing  credit  facility.  This
credit agreement  provided for a $460.0 million  revolving  credit  facility,  a
$210.0  million term loan,  both  maturing on December  31,  2006,  and up to an
additional  $30.0 million in term or revolver  commitments.  In accordance  with
SFAS No. 145, $1.0 million (net of tax of approximately $.6 million) in deferred
financing costs related to this  refinancing  was amortized  immediately in 2002
and included in interest  expense,  resulting in an impact to earnings per share
of $.30.

     Interest on  borrowings  under the  revolver is payable at a rate of either
prime plus 1.75% or the Eurodollar rate plus 3.0%. The weighted average interest
rates of the  revolver  under  the  credit  agreement  were  4.50%  and 4.74% at
December  31, 2003 and 2002,  respectively.  Principal  payments due on the term
loan are equal to 1% per year payable  quarterly through September 30, 2006 with
the balance due on December 31, 2006.  Interest on the term loan is payable at a
rate of either prime plus 1.75% or the Eurodollar rate plus 3.00%.  The weighted
average  interest  rates of the term loan under the credit  agreement were 4.24%
and 4.75% at December 31, 2003 and 2002, respectively.

     Borrowings  under the new 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.   The  credit   agreement   contains
restrictions on the amount of dividends that the Company can pay to Holdings and
requires   compliance  with  certain  financial   covenants   including  capital
expenditures,  interest coverage,  and leverage and fleet utilization levels. In
August 2003, the Company  amended these  financial  ratios by (1) increasing the
permitted maximum leverage ratio, (2) decreasing the required  utilization rate,
and (3) decreasing the minimum interest  coverage ratio.  These steps are geared
toward  improving  the  company's  underlying  liquidity,   profitability,   and
performance.  The failure to maintain  the  required  ratios would result in the
Company not being able to borrow  under the credit  agreement  and, if not cured
within the grace periods,  would result in a default under the credit agreement.
The Company is currently in compliance with all financial covenants.

     The  Company's  unused line of  revolving  credit at December  31, 2003 was
$287.1  million.   Borrowing  base  (collateral)   availability   calculated  in
accordance  with the credit  agreement was $231.4  million at December 31, 2003;
however,  Consolidated  Leverage Ratio covenant restrictions further limited the
Company's borrowing availability at December 31, 2003 to $57.9 million. In order
to  meet  future  cash  requirements,  the  Company  intends  to use  internally
generated funds and to borrow under its credit facility. The Company believes it
will have sufficient  liquidity under its revolving line of credit and from cash
generated from operations to fund its operations for the next 12 months.



                                       79

<PAGE>


                    Williams Scotsman, Inc. and Subsidiaries
                   Notes to Consolidated Financial Statements

5.  Revolving Credit Facility and Long-Term Debt (continued)

At December 31, 2003 and 2002, the fair value of debt was approximately $983,118
and $944,641, respectively.

Letter  of  credit  obligations at December 31, 2003 and 2002 were approximately
$8,098 and $5,172 million, respectively.

Maturities  of  long  term debt during the years subsequent to December 31, 2003
are as follows:

                                2004     $  2,121
                                2005        2,121
                                2006      259,126
                                2007      548,810
                                2008      150,000


     The individual  short-term  contracts of the revolving credit facility come
due in accordance with the terms of each contractual  borrowing under the credit
facility, which vary from 30 to 180 days. The Company intends to reborrow funds,
as deemed available in accordance with the covenants and  restrictions  outlined
in the Company's credit  agreement,  until the revolving credit facility expires
in June 2006.











                                       80

<PAGE>

                    Williams Scotsman, Inc. and Subsidiaries
                   Notes to Consolidated Financial Statements


6.   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:

                                                              December 31
                                                           2003          2002
                                                      -------------------------

Deferred tax liabilities:
   Cost basis in excess of tax basis of assets and
   accelerated tax depreciation:
        Rental equipment                               $256,329        $256,986
        Property and equipment                              737           1,042
       Other                                                977           2,582
                                                      -------------------------
           Total deferred tax liabilities               258,043         260,610
                                                      -------------------------
Deferred tax assets:
   Allowance for doubtful accounts                          338             423
   Rents billed in advance                                7,296           7,893
   Stock option compensation                              4,206           3,911
   Deferred compensation                                    521             537
   Net operating loss carryovers                         95,207          88,471
   Alternative minimum tax credit carryovers              1,759           1,759
   Other                                                    615             565
                                                      -------------------------
                                                        109,942         103,559
   Less:  valuation allowance                            (4,802)         (3,400)
                                                      -------------------------
         Total deferred tax assets                      105,140         100,159
                                                      -------------------------
Net deferred tax liabilities                           $152,903        $160,451
                                                      =========================

     At  December  31,  2003,  the  Company had net  operating  loss  carryovers
available  for  federal  and foreign  income tax  purposes  of $235,136  (net of
related  valuation  allowance).  These net operating loss  carryovers  expire at
various dates from 2004 to 2023. Also, alternative minimum tax credit carryovers
of approximately $1,759, are available without expiration limitations.

     During 2003, a valuation  allowance of $3,400 related to  precapitalization
loss carryover  limitations was reversed  pursuant to changes in IRS guidelines.
Also during 2003, a net operating loss of $774 expired. A valuation allowance of
$4,802  was  recorded  based  on the  potential  expiration  of  additional  net
operating loss carryovers.








                                       81
<PAGE>


                    Williams Scotsman, Inc. and Subsidiaries
                   Notes to Consolidated Financial Statements

6.  Income Taxes (continued)

Income tax expense (benefit) consists of the following:

                                                   Years ended December 31
                                               2003          2002          2001
                                             ----------------------------------

Current
    Federal                                   $     --    $      --    $     --
    State                                          400          290         210
    International                                  110           86          42
                                             ----------------------------------
                                              $    510    $     376    $    252
                                             ----------------------------------
Deferred
    Federal                                   $ (8,159)   $   6,481    $ 13,703
    State                                       (1,357)       1,078       2,278
    International                                1,895          222       1,372
                                             ----------------------------------
                                              $ (7,621)   $   7,781    $ 17,353
                                             ----------------------------------
Total income taxes                            $ (7,111)   $   8,157    $ 17,605
                                             ==================================

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:

                                                    Years ended December 31
                                                2003          2002         2001
                                               ---------------------------------

Income tax at statutory rate                  $( 6,565)     $  8,187     $14,096
State income taxes, net of federal tax            (654)          889       1,618
Amortization of intangible assets                   47            70       1,776
Other                                               61          (989)        115
                                               ---------------------------------
                                              $ (7,111)     $  8,157     $17,605
                                               =================================

     The components of (loss) income from consolidated  operations before income
taxes is as follows:


                                                Years ended December 31
                                                2003          2002         2001
                                       -----------------------------------------

United States                                 $(23,644)     $ 19,527     $37,933
International                                    4,887         3,865       2,338
                                       -----------------------------------------
                                              $(18,757)      $23,392     $40,271
                                       =========================================


                                       82
<PAGE>


                    Williams Scotsman, Inc. and Subsidiaries
                   Notes to Consolidated Financial Statements

7.  Commitments and Contingencies

     The Company is obligated under  noncancelable  operating  leases of certain
equipment, vehicles and parcels of land. At December 31, 2003 approximate future
minimum rental payments are as follows:

         2004                                                $10,342
         2005                                                  8,579
         2005                                                  5,718
         2006                                                  3,596
         2007                                                  2,004
         Thereafter                                            2,367
                                                               -----

         Total minimum future lease payments                 $32,606
                                                             =======

     Rent expense was $13,155, in 2003, $12,901, in 2002, and $11,490, in 2001.

     The Company is involved in various  lawsuits and claims  arising out of the
normal course of its business.  In addition,  the Company has insurance policies
to cover  general  liability and workers  compensation  related  claims.  In the
opinion  of  management,  the  ultimate  amount  of  liability  not  covered  by
insurance,  if  any,  under  pending  litigation  and  claims  will  not  have a
materially  adverse effect on the financial position or operating results of the
Company.

8. 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
up to the dollar  limit  described  in Section  402(g) of the Code  ($12,000  in
2003).  All  amounts  deferred  under this  salary  reduction  feature are fully
vested.  In accordance  with the Economic Growth and Tax Relief Act of 2001, the
Plan also allows employees over the age of 50 to contribute an additional $2,000
as a "catch-up contribution."

     The 401(k)  Plan has a  "matching"  contribution  feature  under  which the
Company may contribute a percentage of the amount deferred by each  participant,
excluding the "catch-up contribution." 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 $261 in 2003, $668 in 2002, and $587 in 2001. The
Company  temporarily  eliminated the 401(k) employer match in April 2003 as part
of a cost reduction  initiative.  No contributions have been made by the Company
under the profit-sharing feature. The Company has adopted a Deferred



                                       83
<PAGE>

                    Williams Scotsman, Inc. and Subsidiaries
                   Notes to Consolidated Financial Statements

8.   Employee Benefit Plans (continued)

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, 2003 and 2002, the total amount deferred
under  this  plan,   including  earnings,   was  approximately  $726  and  $649,
respectively.

     Holdings has adopted  stock  option plans for certain key  employees of the
Company.  In 2003 the Company  adopted the 2003 Employee  Stock Option Plan (the
"2003 plan") which  allowed for up to 230,000  options to be granted.  Under the
1997  Employee  Stock Option Plan (the "1997  Plan"),  up to 479,500  options to
purchase Holdings'  outstanding common stock could be granted. The 1997 plan was
subsequently  amended  and  restated in 1998 (the  "Amended  and  Restated  1997
Employee Stock Option Plan").  Prior to the 1997  recapitalization,  the Company
had adopted the 1994  Employee  Stock  Option Plan (the "1994 plan") for certain
key employees.  All options  outstanding under the 1994 plan became fully vested
in  conjunction  with the  recapitalization.  The three stock  option  plans are
referred to collectively as the "Stock Option Plans."

     The options under the Stock Option Plans 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 options were granted with an
exercise price equal to the fair value of the shares as of the date of grant.

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


                    2003                      2002                   2001
           ---------------------  ------------------------- --------------------
                       Weighted                 Weighted                Weighted
                        Average                  Average                 Average
                       Exercise                 Exercise                Exercise
            Options     Price      Options       Price      Options       Price
           ----------   ------    ----------     -----     ---------      -----
Beginning
  balance   1,118,990   $23.87     1,125,140     $23.87    1,120,540     $23.56

Granted       196,450    50.67         6,300      50.67       23,300      50.67
Canceled            -        -             -          -            -          -
Forfeited     (53,850)  (37.60)      (12,450)    (37.60)     (18,700)    (38.45)
           ----------   ------    -----------    ------    ---------      -----
Ending
  balance   1,261,590    23.87     1,118,990      23.87    1,125,140      23.87

Exercisable
  at end of
  year        979,963    20.69       986,500      20.69      975,506      20.26



                                       84
<PAGE>

                    Williams Scotsman, Inc. and Subsidiaries
                   Notes to Consolidated Financial Statements

8.   Employee Benefit Plans (continued)


Exercise prices for options outstanding as of December 31, 2003 are detailed in
the following table.


-------------------------------------------------------------------------------

                                                            Weighted Average
Exercise  Shares Outstanding at   Shares Exercisable at         Remaining
Price      December 31, 2003        December 31, 2003       Contractual Life
-------------------------------------------------------------------------------
$ 4.59            72,000                   72,000                 1.2 years
$ 9.60           274,650                  274,650                 2.2 years
$18.39           266,490                  266,490                 3.2 years
$30.50           322,150                  282,483                 4.0 years
$50.67           326,300                   84,340                 5.0 years
-------------------------------------------------------------------------------


     At December 31, 2003,  the Company had  approximately  1,341,000  shares of
common  stock  reserved  for the  exercise  of  outstanding  stock  options  and
additional  stock options  authorized  for granting  under existing stock option
plans.













                                       85
<PAGE>
<TABLE>
<CAPTION>


                                         Williams Scotsman, Inc. and Subsidiaries
                                        Notes to Consolidated Financial Statements

9.  Supplemental Condensed Consolidating Financial Information

     The  9.875%  senior  notes are fully and  unconditionally  guaranteed  on a senior  unsecured basis   by
the Company's 100% owned  subsidiaries,  Space Master International,  Inc., Evergreen Mobile Company,   Truck
& Trailer Sales, Inc. and Williams  Scotsman  of   Canada,  Inc.   Willscot  has  fully  and  unconditionally
guaranteed  the 9.875% senior notes on a  subordinated  basis.  The  10.0%  senior  secured  notes are  fully
and  unconditionally  guaranteed  on a  senior  secured  second  lien  basis  by  the  Company's  100%  owned
subsidiaries.  Willscot,  also a 100% owned subsidiary, has fully and unconditionally  guaranteed  the  10.0%
senior secured  notes on a   subordinated   secured   second  lien  basis.   These  100%  owned  subsidiaries
(Guarantor  Subsidiaries),   act  as  joint  and  several  guarantors  of  the   Senior  Notes.  See  Note  1
Organization  and Basis of  Presentation  for a description of the  operations  of  Willscot.   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 presents condensed  consolidating   financial   information  for   the  Company  and   the
Guarantor Subsidiaries. Under the provisions of the previous credit  facility, Williams Scotsman of   Canada,
Inc.  was not  considered a guarantor subsidiary, and therefore, its net assets and  operations were properly
excluded from the condensed financial information of the guarantor  subsidiaries  during  the  period  ending
December 31, 2001. In order to conform to current year presentation,  all  of  the  100%  owned  subsidiaries
have been  reclassified as Guarantor  Subsidiaries for 2001. Space  Master   International,  Inc.,  Evergreen
Mobile  Company  and  Truck &  Trailer  Sales,  Inc.  do not have any assets or operations.


                                                                      As of December 31, 2003
                                                                      -----------------------
                                                                  Guarantor
                                                       Parent   Subsidiaries   Eliminations      Consolidated
                                                  ------------- -------------- ------------- ----------------
Balance Sheet
 Assets:
<S>                                                   <C>            <C>       <C>                 <C>

    Rental equipment, at cost                         $285,649      $767,223      $       -        $1,052,872
    Less accumulated depreciation                       59,237       165,557              -           224,794
                                                       -------       -------   ------------         ---------
    Net rental equipment                               226,412       601,666              -           828,078

    Property and equipment, net                         79,217         1,533              -            80,750
    Investment in Willscot                             546,750             -       (546,750)                -
    Other assets                                       328,802         9,461        (41,980)          296,283
                                                     ---------       -------        --------        ---------

Total assets                                        $1,181,181      $612,660      $(588,730)       $1,205,111
                                                     =========      ========        =======         =========

 Liabilities:
    Accounts payable and accrued expenses               55,528         3,342              -            58,870
    Long-term debt and revolving credit facility       962,178             -              -           962,178
    Other liabilities                                  171,197        41,981        (41,980)          171,198
                                                       -------        ------         ------         ---------
    Total liabilities                                1,188,903        45,323        (41,980)        1,192,246


 Equity:                                                (7,722)      567,337       (546,750)           12,865
                                                     ---------       -------        -------         ---------
Total liabilities and stockholder's equity          $1,181,181      $612,660      $(588,730)       $1,205,111
                                                     =========       =======        =======         =========

</TABLE>

                                                        86

<PAGE>
<TABLE>
<CAPTION>

                                      Williams Scotsman, Inc. and Subsidiaries
                                     Notes to Consolidated Financial Statements


9.  Supplemental Condensed Consolidating Financial Information (continued)

                                                                      As of December 31, 2002
                                                                      -----------------------
                                                                  Guarantor
                                                       Parent   Subsidiaries    Eliminations      Consolidated
                                                 -------------- --------------- -------------  ---------------
Balance Sheet
 Assets:
<S>                                                 <C>              <C>        <C>               <C>

    Rental equipment, at cost                        $322,546       $702,255       $       -       $1,024,801

    Less accumulated depreciation                      68,061        127,813               -          195,874
                                                      -------        -------         -------          -------
    Net rental equipment                              254,485        574,442               -          828,927

    Property and equipment, net                        79,293            956               -           80,249

    Investment in subsidiaries                        560,576              -        (560,576)               -
    Other assets                                      328,291         29,679         (37,381)         320,589
                                                    ---------         ------         -------        ---------
Total assets                                       $1,222,645       $605,077       $(597,957)      $1,229,765
                                                    =========        =======         =======        =========


 Liabilities:
    Accounts payable and accrued expenses              51,080          1,323               -           52,403
    Long-term debt and revolving credit
    facility                                          984,345              -               -          984,345
    Other liabilities                                 179,224         37,381         (37,381)         179,224
                                                    ---------         ------         --------       ---------
    Total liabilities                               1,214,649         38,704         (37,381)       1,215,972

 Equity (deficit):                                      7,996        566,373        (560,576)          13,793
                                                    ---------        -------        ---------       ---------
Total liabilities and stockholder's
 equity (deficit):                                $ 1,222,645       $605,077       $(597,957)      $1,229,765
                                                    =========        =======         =======        =========
(deficit):




                                                          For the Year Ended December 31, 2003
                                                          ------------------------------------
                                                                  Guarantor
                                                      Parent    Subsidiaries   Eliminations      Consolidated
                                                   ------------ -------------- -------------   --------------
Results of Operations
Total revenues                                     $  415,548        $92,772       $ (70,544)      $  437,776

Gross profit                                          169,161         54,216         (45,464)         177,913

Other expenses                                        185,589         49,434         (45,464)         189,559
                                                      -------         ------          ------          -------
Net (loss) income                                  $  (16,428)       $ 4,782       $       -       $  (11,646)
                                                      =======         ======         =======          ========




</TABLE>
                                                                 87
<PAGE>
<TABLE>
<CAPTION>



                                      Williams Scotsman, Inc. and Subsidiaries
                                     Notes to Consolidated Financial Statements


9.  Supplemental Condensed Consolidating Financial Information (continued)

                                                         For the Year Ended December 31, 2002
                                                         ------------------------------------
                                                                  Guarantor
                                                      Parent    Subsidiaries   Eliminations      Consolidated
                                                     --------   ------------   ------------      -------------
    Results of Operations
<S>                                                 <C>         <C>            <C>               <C>

    Total revenues                                  $477,595       $ 90,496       $ (72,918)         $495,173

    Gross profit                                     201,329         53,035         (46,604)          207,760

    Other expenses                                   189,865         49,264         (46,604)          192,525
                                                     -------         ------          ------           -------
    Net income                                      $ 11,464       $  3,771       $       -          $ 15,235
                                                     =======         ======          ======           =======


                                                         For the Year Ended December 31, 2001
                                                         ------------------------------------
                                                                 Guarantor
                                                      Parent   Subsidiaries    Eliminations      Consolidated
                                                      ------   ------------    ---------------   ------------
    Results of Operations
    Total revenues                                  $482,010       $ 83,944       $ (73,698)         $492,256

    Gross profit                                     224,615         51,984         (47,981)          228,618

    Other expenses                                   204,245         49,688         (47,981)          205,952
                                                     -------         ------          ------           -------
    Net income                                      $ 20,370       $  2,296       $       -          $ 22,666
                                                     =======         ======          ======           =======


                                                         For the Year Ended December 31, 2003
                                                         ------------------------------------
                                                                Guarantor
                                                      Parent   Subsidiaries    Eliminations      Consolidated
                                                      ------   ------------    ------------      ------------
    Cash Flows
    Cash provided by operating activities           $ 38,820       $ 35,452       $       -          $ 74,272

    Cash used in investing activities                 (7,108)       (36,531)              -           (43,639)

    Cash used in financing activities                (30,620)             -               -           (30,620)

    Effect of change in translation rates                (84)            31               -               (53)
                                                      ------         ------          ------            ------
    Net change in cash                                 1,008         (1,048)              -               (40)
    (Overdraft)/cash at beginning of period             (622)         1,049               -               427
                                                      ------         ------          ------            ------
    Cash at end of period                           $    386       $      1       $                  $    387
                                                      ======         ======          ======            ======

                                                               88
</TABLE>
<PAGE>
<TABLE>
<CAPTION>



                                            Williams Scotsman, Inc. and Subsidiaries
                                           Notes to Consolidated Financial Statements


9.  Supplemental Condensed Consolidating Financial Information (continued)

                                                               For the Year Ended December 31, 2002
                                                               ------------------------------------
                                                                 Guarantor
                                                      Parent   Subsidiaries    Eliminations      Consolidated
                                                      ------   ------------    ------------      ------------
    Cash Flows
<S>                                                  <C>       <C>             <C>               <C>

    Cash provided by operating activities            $61,629       $ 33,705        $     -           $ 95,334
                                                                                         -
    Cash used in investing activities                 (2,336)       (33,783)             -            (36,119)

    Cash used in financing  activities               (59,350)             -              -            (59,350)

    Effect of change in exchange rates                   (29)             7              -                (22)
                                                      ------          -----         ------             ------
    Net change in cash                                   (86)           (71)             -               (157)

    (Overdraft)/cash at beginning of period             (535)         1,119              -                584
                                                      -------         -----         ------             ------
    (Overdraft)/cash at end of period                $  (621)     $   1,048        $     -           $    427
                                                      =======         =====         ======             ======


                                                              For the Year Ended December 31, 2001
                                                              ------------------------------------
                                                                 Guarantor
                                                      Parent   Subsidiaries    Eliminations      Consolidated
                                                      ------   ------------    ------------      ------------
    Cash Flows
    Cash provided by operating activities            $36,641      $  22,874        $     -            $59,515

    Cash used in investing activities               (101,164)       (23,621)             -           (124,785)

    Cash provided by financing activities             63,245              -              -             63,245

    Effect of change in exchange rates                   129            (66)             -                 63
                                                      ------         ------         ------             ------
    Net change in cash                                (1,149)          (813)             -             (1,962)
    Cash at beginning of period                          614          1,932              -              2,546
                                                      ------         ------         ------             ------
    (Overdraft)/cash at end of period                 $ (535)     $   1,119        $     -            $   584
                                                      ======         ======         ======             ======


</TABLE>



                                                                   89
<PAGE>


                    Williams Scotsman, Inc. and Subsidiaries
                   Notes to Consolidated Financial Statements

10. Related Party Transactions

     During 2003,  2002 and 2001,  the Company paid  dividends of  approximately
$55, $133, and $60, respectively, to Holdings primarily to fund normal operating
expenses.

11. Assets Held for Sale

     Given  recent  economic  trends,   the  Company   implemented  a  strategic
initiative  to dispose of  selected  rental  units in its lease  fleet which the
Company has determined no longer merit further  investment.  In accordance  with
SFAS No. 144 - Accounting  for the  Impairment or Disposal of Long Lived Assets,
the Company plans to sell to one or more buyers approximately 2,900 units within
a year of December  31, 2003,  the  effective  date of the disposal  initiative.
Accordingly,  the  Company  recorded a $19.4  million  impairment  charge in the
fourth  quarter  of 2003 to  reflect  the  write-down  of these  assets to their
estimated  fair value (less costs to sell).  These units have been  removed from
the lease fleet  equipment and  classified  separately as "Held for Sale" assets
which are  included  in other  assets on the  consolidated  balance  sheet as of
December  31,  2003.  The  December 31, 2002 amount of "Held for Sale" units has
also been reclassed on the balance sheet for comparative  purposes in accordance
with SFAS No. 144.

     As of December  31,  2003 and 2002,  assets  classified  as "Held for Sale"
related to the strategic initiative were $394 and $21,160.

 12.  Sale of Finance Leases

     On June 27,  2003,  the  Company  completed  the sale of a  portion  of its
finance lease portfolio at  approximately  book value.  The total purchase price
was $4.6 million and the net proceeds from sale were used to pay down borrowings
under the  Company's  revolving  credit  facility.  The leases sold,  which were
deemed not to be a part of the  Company's  core  business,  will  continue to be
serviced by the Company on behalf of the buyer.

13.  Change in Accounting Estimate

     In October 2002, the Company changed its estimated  residual value from 50%
of  capitalized  costs to $1 for  certain  classroom  units.  Additionally,  the
remaining  estimated  useful life for a portion of these units was reduced to 45
months.  The effect of this change in  estimate  is an increase in  depreciation
expense of  approximately  $2,400 and a decrease in net income of $1,460 or $.44
per share, for the year ended December 31, 2003, respectively.



                                       90

<PAGE>


                    Williams Scotsman, Inc. and Subsidiaries
                   Notes to Consolidated Financial Statements


14.   Prepaid Expenses and Other Current Assets and Accrued Expenses

     Prepaid expenses and other current assets consists of the following as of
December 31:



                                                    2003                 2002
                                                    ----                 ----
Cost in excess of billings, net                 $ 11,827             $  6,323
Inventories                                       13,036               13,036
Prepaid expenses                                   8,878                5,524
                                                   -----               ------
Prepaid expenses and other current assets        $33,741             $ 24,883
                                                  ======               ======


Accrued expenses consists of the following as of December 31:

                                                    2003                 2002
                                                    ----                 ----
Payroll and employee benefits                  $   8,147            $   8,283
Accrued interest                                  11,454                8,226
Other liabilities                                  9,764               12,637
                                                   -----               ------
Accrued expenses                               $  29,365            $  29,146
                                                  ======               ======













                                       91


<PAGE>


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

         Not applicable.



Item 9A. Controls and Procedures

(a)       Disclosure controls and procedures.

          Our  Chief   Executive   Officer  and  Chief  Financial  Officer  have
          concluded,  based on  their  evaluation,  as of the end of the  period
          covered by this report,  that our  disclosure  controls and procedures
          (as defined in the  Securities  Exchange Act of 1934 Rules 13a - 15(e)
          and 15d - 15(e)) are (1) effective to ensure that material information
          required to be  disclosed  by us in reports  filed or  submitted by us
          under the  Securities  Exchange Act of 1934, as amended,  is recorded,
          processed,  summarized and reported within the time periods  specified
          in the SEC's rules and forms, and (2) designed to ensure that material
          information  required  to  be  disclosed  by  us in  such  reports  is
          accumulated,  organized and communicated to our management,  including
          our  Chief  Executive   Officer  and  Chief  Financial   Officer,   as
          appropriate, to allow timely decisions regarding required disclosure.


(b)       Changes in internal control over financial reporting.

          There has been  no  change  in  the  Company's  internal  control over
          financial reporting (as defined in the Securities Exchange Act of 1934
          Rules  13a-15(f) and 15d-15(f)) that occurred during the fourth fiscal
          quarter  that has  materially  affected,  or is  reasonably  likely to
          materially  affect,  the  Company's  internal  control over  financial
          reporting.


     It should be noted that any system of controls,  however well  designed and
operated,  can provide only  reasonable,  and not absolute,  assurance  that the
objectives  of the system  will be met. In  addition,  the design of any control
system is based in part upon certain  assumptions about the likelihood of future
events.  Because of these and other  inherent  limitations  of control  systems,
there is only  reasonable  assurance that our controls will succeed in achieving
their stated goals under all potential future conditions.





                                       92
<PAGE>


PART III

Item 10. Directors and Executive Officers of the Registrant

Directors and Officers

         Our directors and executive officers are as follows:

Name                     Age     Position
Gerard E. Holthaus......  54     President and Chief Executive Officer; Director
                                 and Chairman of the Board
James N. Alexander......  44     Director
Michael F. Finley.......  42     Director
Steven B. Gruber........  46     Director
Brian Kwait.............  42     Director
David P. Spalding.......  49     Director
Joseph F. Donegan.......  53     Executive Vice President - U.S. Field
                                 Operations
John C. Cantlin.........  55     Senior Vice President and Chief Financial
                                 Officer
William C. LeBuhn.......  41     Senior Vice President and Chief Administrative
                                 Officer
Dean T. Fisher..........  57     Vice President - Operations
Sonney Taragin..........  50     Vice President - Information Services
John B. Ross............  55     Vice President and General Counsel
Joseph J. Vecchiolla....  44     Vice President, Marketing and Corporate
                                 Communications

     The directors  are elected  annually and serve until their  successors  are
duly  elected  and  qualified.  No director  of  Holdings  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 Holdings are elected by the Board of Directors and
serve at the discretion of the Board of Directors.

     Gerard E. Holthaus was elected  Chairman of the Board in April 1999 and has
been our  President  and Chief  Executive  Officer since April 1997. He has been
with our 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 to that. He has served as a director  since June
1994.  Before joining our 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 The Baltimore Life Companies.

     James N.  Alexander  was  elected as a director of Holdings in May 1997.
Mr. Alexander has been a Managing Partner of Oak Hill Investment  Management and
its predecessors  (see Item 12 Security  Ownership of Certain  Beneficial Owners
and  Management)  since June  2001,  a Partner of Oak Hill Capital  Management
since  February  1999,  and a Vice President of Keystone Inc. since August 1995.
Mr. Alexander serves on the Board of Directors of 230 Park Investors,  L.L.C. He

                                       93
<PAGE>

previously worked at Goldman,  Sachs & Co., where he was a Vice President in the
fixed income division from August 1993 to July 1995.

     Michael F. Finley was  elected as a director  of Holdings 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.  Mr. Finley is also a director of
Communications & Power Industries,  Inc. Prior to joining Cypress, he was a Vice
President in the Merchant Banking Group at Lehman Brothers Inc.

     Steven B. Gruber was  elected as a director  of Holdings in February  2002.
From  February 1999 to present,  Mr.  Gruber has been a Managing  Partner of Oak
Hill Capital  Management,  Inc., the manager of Oak Hill Capital Partners,  L.P.
From March 1992 to present he has been a Managing Director of Oak Hill Partners,
Inc.  From  February  1994 to  present,  Mr.  Gruber has also been an officer of
Insurance Partners Advisors,  L.P., an investment advisor to Insurance Partners,
L.P.  From  October 1992 to present,  he has been a Vice  President of Keystone,
Inc. Mr. Gruber is also a director of American Skiing Company, Travel Centers of
America, Inc. and several private companies,  related to Keystone,  Inc. and Oak
Hill Capital Partners L.P.

     Brian Kwait was elected as a director  of  Holdings 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.

     David P.  Spalding  was elected as a director of Holdings 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.,
Lear Corporation, and Republic National Cabinet Corporation.

     Joseph  F.  Donegan  has  been  Executive  Vice  President  of  U.S.  Field
Operations  since May 2001. He was Senior Vice  President and Northern  Division
Manager of our company since  September 1996 and served as the Northeast  Region
Manager prior to that. Mr. Donegan's responsibilities include the implementation
of corporate  policies,  attainment of branch  profitability,  fleet utilization
management  and  development  of personnel  for the entire  United States branch
network.  Mr.  Donegan has 29 years of experience  within the  industry,  and 20
years with  Williams  Scotsman.  From 1991  through May 1994,  Mr.  Donegan held
similar positions with Bennett Mobile Offices and Space Master Buildings.

     John C. Cantlin has been Senior Vice President and Chief Financial  Officer
since  February  2003.  Prior to joining our Company,  he consulted for Citicorp
Venture  Capital and  American  Industrial  Partners  (AIP) from January 2002 to
January 2003. He served as Chief Financial  Officer and Executive Vice President
of RBX Corporation,  a portfolio company of AIP, from September 1997 to December
2001.  He brings 30 years of financial  management  and  operations  experience,
including international  experience, to our Company and has held other executive
positions at Stockham  Valves from 1990 to 1997,  Plastiline,  Inc. from 1988 to
1990 and several divisions of FMC Corporation from 1979 to 1988.


                                       94
<PAGE>

     William C. LeBuhn has been Senior Vice  President and Chief  Administrative
Officer since March 2002 with  responsibilities for Marketing,  Human Resources,
Legal and Information  Systems. He formerly served as Vice President - Marketing
and Human  Resources  from July 1999 to March 2002,  and was Vice  President  of
Human  Resources  from  January  1994  to  July  1999.  Mr.   LeBuhn's   primary
responsibilities  include the strategic  direction and  coordination of multiple
business  units.  Prior to joining our  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 to 1988.

     Dean T. Fisher has been Vice  President of  Operations  since October 2001.
His operational responsibilities include credit, invoicing, document compliance,
cash posting, collections and recovery. Prior to joining our company, Mr. Fisher
was Senior Vice President,  Division Head of Global  Customer  Services for VISA
International,  a major credit card processing company,  from 1997 to 2001. From
1986 to 1997,  he was with  some of the  predecessors  to Bank of  America  as a
Senior Vice President.  From 1977 to 1986, he was with a predecessor  company of
Key Corp., a financial institution.

     Sonney  Taragin has been Vice  President  of  Information  Services for the
Company  since  February  2004  with  responsibilities   including  the  overall
management  of  the  Company's  business   information  systems  and  technology
initiatives.  Prior to joining the Company, Mr. Taragin served as Vice President
of Technology  and  Professional  Services for PEAK  Technologies  from May 1999
through  2003.  From  December  1996 to May  1999,  Mr.  Taragin  served as Vice
President of Technology at Caliber Technology Network, a joint venture of Sylvan
Learning Systems and MCI. Mr. Taragin has also held IT/IS  management  positions
for Johns Hopkins Hospital and Toyota.

     John B. Ross has been Vice  President  and General  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 North Carolina and Maryland, respectively.

     Joseph J.  Vecchiolla  has been Vice  President of Marketing  and Corporate
Communications  since June  2002.  His  responsibilities  include  global  brand
management, business development,  advertising,  marketing and public relations.
Prior to joining Williams Scotsman, Mr. Vecchiolla served as President and Chief
Executive  Officer of Bradley Media Group from April 1997 to May 2002. He brings
20 years of management,  business operations,  sales and marketing experience to
Williams  Scotsman and has held  executive  positions at  Management  Consulting
Associates  from 1994 to 1997 and J.V.  Motor  Lines from 1983 to 1994.  He also
serves on the board of directors of The Modular Building Institute.



                                       95
<PAGE>


Audit Committee Financial Expert

     The Audit Committee (the "Committee"), which comprises members of the Board
of Directors  (the  "Board"),  is designated to oversee the financial  reporting
process of the Board. The Board has determined that David Spalding,  a member of
the Committee,  qualifies as an audit committee  financial  expert as defined by
SEC rules.  Mr. Spalding is not independent of the Company.  Because the Company
is not listed on an exchange,  the Company has chosen to use the  definition  of
"independence"  for audit committee members as such term is used by the New York
Stock Exchange listing standards.


Code of Ethics

     We have  adopted  a Code of Ethics  that  applies  to our  chief  executive
officer,  chief financial  officer,  controller,  and persons performing similar
functions.  Copies of the Code of Ethics are available free of charge by writing
to John Ross,  Vice  President  and General  Counsel at 8211 Town Center  Drive,
Baltimore, MD 21236.


















                                       96
<PAGE>
<TABLE>
<CAPTION>


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 our Chief Executive Officer and our four next highly compensated executive officers (the "Named
Executive Officers") during 2003.




                                                                Annual
                                                             Compensation                    All Other        Securities Underlying
                                                    Year       Salary ($)   Bonus ($)    Compensation ($)(1)        Options (#)
                                                    ----   --------------   ---------    -------------------  ---------------------
<S>                                                 <C>         <C>          <C>          <C>                  <C>

Gerard E. Holthaus
President and Chief Executive Officer               2003        $461,784     $     --          $6,275                 54,000
                                                    2002         452,692     $116,250          $9,183                     --
                                                    2001         439,177     $139,500          $9,433                     --

Joseph F. Donegan
Executive Vice President-U.S.
  Field Operations                                  2003         331,573           --           1,651                 20,000
                                                    2002         321,490       37,500           3,885                     --
                                                    2001         305,245       45,000           5,375                     --

John C. Cantlin
Senior Vice President
and Chief Financial Officer                         2003         298,584           --             606                 20,000
                                                    2002              --           --              --                     --
                                                    2001              --           --              --                     --

William C. Lebuhn
Senior Vice President
and Chief Administrative Officer                    2003         165,178           --           1.363                 13,000
                                                    2002         159,423       42,750           4,111                     --
                                                    2001         144,073       43,200           1,938                     --

Joseph J. Vecchiolla
Vice President-Marketing
and Corporate Communications                        2003         153,057           --             587                  5,000
                                                    2002          91,119           --             760                  5,000
                                                    2001              --           --              --                     --



(1)    Represents  employer match under the 401(k) plan and for Mr. Holthaus, the amounts include a disability insurance premium of
       $4,058 in each of 2003, 2002 and 2001.

</TABLE>



                                                                       97
<PAGE>
<TABLE>
<CAPTION>



                                           Option Grants in Last Fiscal Year


The following table contains information covering the number and value of stock options of Scotsman Holdings
Inc. granted to the Named Executive Officers during the last fiscal year ended December 31, 2003.


                        Number of     Percent of total
                        securities    options granted to                                     Grant date
                        underlying    employees in                                           present value
Name                    options       fiscal year         Exercise price    Expiration date  of options (1)
                        ------------- ------------------- --------------    ---------------  --------------
<S>                     <C>           <C>                 <C>               <C>              <C>

Gerard E. Holthaus          54,000         27%               $50.67         January 1, 2013      $1,121,580

Joseph F. Donegan           20,000         10%                50.67         January 1, 2013         415,400

John C. Cantlin             20,000         10%                50.67         January 1, 2013         415,400

William Lebuhn              13,000          7%                50.67         January 1, 2013         270,010

Joseph J. Vecchiolla         5,000          3%                50.67         January 1, 2013         103,850





(1)      The grant date present value of options was calculated using the Cox Ross Rubinstein binomial model
         valuation method with the following assumptions:

o        an expected volatility of 45.2%

o        a risk free rate of return of 2.97%

o        a dividend yield of 0%, and

o        an expected life of 5 years.



</TABLE>








                                                   98
<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 of Scotsman Holdings Inc. held by the Named Executive
Officers at the end of the fiscal year.


                    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)
-----------------------------------------------------------------------------

Gerard E. Holthaus......   280,913 / 48,600            $7,821,998 / $--

Joseph F. Donegan ......   103,775 / 18,600             2,842,436 /  --

John C. Cantlin.........     2,000 / 18,000                    -- /  --

William C. LeBuhn.......    94,650 / 11,700             2,743,905 /  --

Joseph J. Vecchiolla....      1,000 / 9,000                    -- /  --



(1)      No options were exercised by the Named Executive Officers during fiscal
         2003.

(2)      For options granted under the 1997 Plan, 50% vest ratably over five
         years and 50% vest ratably based on us 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 stock value at December 31, 2003.







                                       99

<PAGE>


Scotsman Holdings, Inc. 1994 Employee Stock Option Plan

     In March  1995,  a stock  option  plan was  adopted  for certain of our key
employees.  All options  outstanding  under the 1994 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 of our key
employees, which was amended and restated in December 1998. Under the 1997 plan,
up to 479,500 options to purchase Holdings' common stock may be granted.

Scotsman Holdings, Inc. 2003 Employee Stock Option Plan

     In December 2002 and January 2003, 6,300 and 196,450 options, respectively,
were  granted  under the 2003 plan at an offer price of $50.67 per share.  Under
the 2003 plan, up to 230,000 options to purchase  Holdings'  common stock may be
granted.  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, we 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  of our  employees  is  eligible  to  participate  in the  salary
reduction  feature of the 401(k) Plan. The 401(k) Plan permits  participants  to
contribute  up to the  dollar  limit  described  in  Section  402(g) of the Code
($12,000 in 2003).  In accordance with the Economic Growth and Tax Relief Act of
2001,  the  Plan  also  allows  employees  over the age of 50 to  contribute  an
additional  $2,000.  This is known as the "catch-up  contribution."  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 we may
contribute a percentage  of the amount  deferred by each  participant  who makes
salary reduction deferrals to the 401(k) Plan, and is employed by us 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. This matching
percentage is not applied to "catch-up  contributions" deferred by participants.
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 us. 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 us,  respectively.  The
Company  temporarily  eliminated the 401(k) employer match in April 2003 as part
of a cost reduction initiative.


                                       100

<PAGE>

     The 401(k)  Plan also has a "profit  sharing"  feature,  under which we may
contribute,  at our 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  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 2003, we made matching  contributions to the 401(k) Plan participants in
an aggregate amount of $261,017.

Deferred Compensation Plan for Executives

     During 1997, we 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, 2003, the total amount  deferred under this Plan,  including  earnings,  was
$726,412.

Compensation Committee Interlocks and Insider Participation

     During  2003,  the  Compensation  Committee  was  comprised  of two outside
directors:  David P.  Spalding and Steven B. Gruber.  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.









                                       101
<PAGE>


Item 12. Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters

     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 as of December 31, 2003 by
(i) all persons owning of record or beneficially to the knowledge of the Company
5% or more of the  issued  and  outstanding  Holdings  Common  Stock,  (ii) each
director  individually,  (iii)  each  executive  officer  named  in the  Summary
Compensation Table, and (iv) all executive officers and directors as a group.


                                                    Shares of
Name                                               Common Stock      Percentage
----                                               ------------      ----------
Cypress Merchant Banking Partners L.P.(1)(2)(3)
     c/o The Cypress Group L.L.C.
     65 East 55th Street
         New York, NY 10022         .............    2,431,523            39.25%

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            41.28

Odyssey Investment Partners Fund, LP(3)(5)
     280 Park Avenue
     New York, NY 10017    ......................      716,536            11.57

James N. Alexander(6)      ......................          ---              ---
Michael F. Finley(7)       ......................          ---              ---
Steven B. Gruber(6)        ......................          ---              ---
Brian Kwait(8)...................................          ---              ---
David P. Spalding(7).............................          ---              ---
Gerard E. Holthaus (9)(10)(11)...................      319,013             4.93
Joseph F. Donegan (9)(10)(11)....................      107,375             1.70
William C. LeBuhn (9)(10)(11)....................       97,650             1.55
John C. Cantlin (9)(10)(11)......................        2,000              .03
Joseph J. Vecchiolla (9)(10)(11).................        1,000              .02

All executive officers and directors
        as a group (11) (13 persons).............      596,113             8.84




                                       102
<PAGE>



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

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

                    (3)  Under the Investor  Stockholders  Agreement (as defined
                         herein),  the Cypress Stockholders (as defined herein),
                         Scotsman  Partners,  L.P., and Odyssey Investment Group
                         (as defined  herein)  have agreed to vote their  shares
                         for certain nominees for director and other matters and
                         the Cypress Stockholders,  Scotsman Partners, L.P., and
                         Odyssey  Investment  Group 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  the  address  of  the
                         Company's principal executive offices.


                    (10) 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."

                    (11) Includes  280,913,  103,775,  94,650,  2,000, and 1,000
                         shares  held as options by Messrs.  Holthaus,  Donegan,
                         LeBuhn,  Cantlin,  and  Vecchiolla,  respectively.  All
                         executive  officers as a group includes  549,913 shares
                         held as options.


                                       103
<PAGE>



                      Equity Compensation Plan Information

                                                            Number of securities
                Number of securities    Weighted-average    remaining available
                to be issued upon       exercise price      for future issuance
                exercise of             of outstanding      under equity
Plan Category   outstanding options     options             compensation plans
--------------------------------------------------------------------------------
Equity
compensation
plans approved
by security
holders               1,261,590              $23.87               27,250

Equity
compensation
plans approved
by security
holders                 N/A                    N/A                  N/A














                                      104
<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  "Business -
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, 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.





                                       105

<PAGE>


Investor Stockholders Agreement

     On May 22, 1997, Holdings, certain partnerships affiliated with The Cypress
Group, L.L.C. (the "Cypress Stockholders") and Scotsman Partners, L.P. (together
with the Cypress  Stockholders and, including their permitted  transferees,  the
"Investor Stockholders") and the Odyssey Investor Group, 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  of  Holdings  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 of Holdings 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  any  directors  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
Stockholder  pursuant to which a selling Stockholder would be required to permit


                                       106
<PAGE>

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.















                                       107


<PAGE>


Item 14.  Principal Accountant Fees and Services

     Audit Fees

     The aggregate audit fees billed for professional services rendered by Ernst
& Young LLP for the  audit of the  Company's  annual  financial  statements  and
financial  statements  included in the Company's  Quarterly Reports on Form 10-Q
for the years ended December 31, 2003 and 2002 were  approximately  $298,000 and
approximately $250,000, respectively.


     Tax Fees

     The  aggregate  fees billed for all tax services  rendered by Ernst & Young
LLP for the years ended December 31, 2003 and 2002 were  approximately  $92,000,
and $201,000, respectively. Tax services principally include tax compliance, tax
advice and planning  (including  foreign tax  services,  as well as tax planning
strategies for the preservation of net operating loss carryforwards).

     Audit Related Fees

     The aggregate audit related fees billed for professional  services rendered
by Ernst & Young  LLP for the  audit of the  Company's  401K  plan for the years
ended December 31, 2003 and 2002 were $11,000 and $10,000, respectively.


     All Other Fees

     None.


     Pre-Approval Policies and Procedures


     The Audit  Committee  has adopted the  following  guidelines  regarding the
engagement  of the  Company's  independent  auditor to perform  services for the
Company.  For audit services (including audits of the Company's employee benefit
plan),  the  independent  auditor will provide the Committee  with an engagement
letter each year prior to commencement of the audit services outlining the scope
of the audit  services  proposed to be performed  during the fiscal year. If the
terms of the engagement  letter are agreed to by the  Committee,  the engagement
letter will be formally accepted.  Non-audit services will require  pre-approval
from the Audit Committee.





                                       108


<PAGE>


PART IV

Item 15. 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.

                         On November 6, 2003, Williams Scotsman furnished a Form
                         8-K  under  Item  12  relating  to  the  press  release
                         announcing its results of operations for the three  and
                         nine months ended September 30, 2003.


                    (c)  Exhibits

   Exhibit Number

         2.1  --         Recapitalization  Agreement,  dated  as  of  April  11,
                         1997.  (Incorporated  by  reference to Exhibit 2 of the
                         Company's 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 the
                         Company's 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 the  Company's  Form  8-K  dated  November  27,
                         1996).

         3.2  --         By-laws of Williams  Scotsman,  Inc.  (Incorporated  by
                         reference to Exhibit 3.2 of the Company's  Registration
                         Statement on Form S-l by the Company)  (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  the
                         Company's  Registration  Statement on Form S-4 filed on
                         September 25, 1997 by the Company) (Commission File No.
                         333-30753).

         4.1.1 --        First Supplemental Indenture,  dated as of September
                         1, 1998  (incorporated by reference to Exhibit 4.1.1 of
                         Williams Scotsman's  Registration Statement on Form S-4
                         (file no. 333-86482)).




         4.1.2 --        Second Supplemental Indenture,  dated as of February
                         4, 1999  (incorporated by reference to Exhibit 4.1.2 of
                         Williams Scotsman's  Registration Statement on Form S-4
                         (file no. 333-86482)).

         4.1.3 --        Third Supplemental  Indenture,  dated as of June 29,
                         2001  (incorporated  by reference  to Exhibit  4.1.3 of
                         Williams Scotsman's  Registration Statement on Form S-4
                         (file no. 333-86482)).

                                       109
<PAGE>


         4.1.4 --        Fourth Supplemental Indenture, dated as of March 26,
                         2002  (incorporated  by reference  to Exhibit  4.1.4 of
                         Williams Scotsman's  Registration Statement on Form S-4
                         (file no. 333-86482)).


         4.2  --         Registration  Rights Agreement,  dated as of August 18,
                         2003, among the Company, the Guarantors named there in,
                         the  Subordinated  Guarantor named therein and Deutsche
                         Bank Securities  Inc., Bank of America  Securities LLC,
                         CIBC World Market Corp. and Fleet Securities,  Inc., as
                         initial   purchasers   (incorporated  by  reference  to
                         Exhibit 4.2 to the Form S-4 filed on October 3, 2003 by
                         the Company (Commission file no. 333-109448)).

          4.3  --        Indenture,  dated  as of  August  18,  2003  among  the
                         Company, the Guarantors named therein, the Subordinated
                         Guarantor  named  therein  and the U.S.  Bank  National
                         Association as trustee, including exhibits thereto, the
                         form of the initial  note and the form of the  exchange
                         note  (incorporated  by reference to Exhibit 4.3 to the
                         Form  S-4  filed  on  October  3,  2003 by the  Company
                         (Commission file no. 333-109448)).

         4.4  --         Amended and Restated U.S.  Pledge  Agreement,  dated as
                         of March 26, 2002 and amended and restated as of August
                         18, 2003, among Scotsman  Holdings,  Inc., the Company,
                         the   Guarantors   named  therein,   the   Subordinated
                         Guarantor named therein and Deutsche Bank Trust Company
                         Americas,   and  acknowledged  by  U.S.  Bank  National
                         Association as the trustee  (incorporated  by reference
                         to Exhibit 4.4 to the Form S-4 filed on October 3, 2003
                         by the Company (Commission file no. 333-109448)).

         4.5  --         Amended and Restated U.S. Security Agreement,  dated as
                         of March 26,  2002,  and  amended  and  restated  as of
                         August 18, 2003,  among  Scotsman  Holdings,  Inc., the
                         Company,  the Guarantors named therein,  the Collateral
                         Agent and acknowledged by the Trustee  (incorporated by
                         reference  to  Exhibit  4.5 to the  Form  S-4  filed on
                         October  3, 2003 by the  Company  (Commission  file no.
                         333-109448)).

         4.6  --         Canadian Security  Agreement among Williams Scotsman of
                         Canada,  Deutsche Bank Trust Company  America,  Truck &
                         Trailer Sales,  Inc.,  Evergreen  Mobile Company and BT
                         Commercial  Corporation  (incorporated  by reference to
                         Exhibit 4.6 to the Form S-4 filed on October 3, 2003 by
                         the Company (Commission file no. 333-109448)).




         4.7  --         Intercreditor   Agreement  among  Deutsche  Bank  Trust
                         Company  Americas and U.S.  Bank  National  Association
                         (incorporated  by  reference to Exhibit 4.7 to the Form
                         S-4 filed on October 3, 2003 by the Company (Commission
                         file no. 333-109448)).

         10.1  --        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 the  Company's  Registration  Statement on Form
                         S-4 (Commission File No.333-30753)).

                                       110
<PAGE>

         10.2  --        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.)

         10.3  --        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 annual report on Form 10-K for the year ended
                         December 31, 1998.)

         10.4  --        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)).

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

         10.6  --        Scotsman  Holdings,  Inc.  Amended and Restated  1997
                         Employee Stock Option Plan.  (Incorporated by reference
                         to Exhibit 10.7 of the Company's  annual report on Form
                         10-K for the year ended December 31, 1998.)



         10.7  --        Credit Agreement,  dated as of March 26, 2002, by and
                         among Scotsman Holdings, Inc., Williams Scotsman, Inc.,
                         various financial  institutions named therein,  Bankers
                         Trust Company,  as administrative  agent, Fleet Capital
                         Corporation  and  Congress  Financial   Corporation  as
                         Co-Syndication  Agents, Bank of America,  N.A. and GMAC
                         Business Credit,  LLC as  Co-Documentation  Agents, and
                         Deutsche  Banc Alex.  Brown Inc. as Sole Lead  Arranger
                         and Sole Book  Manager.  (Incorporated  by reference to
                         Exhibit 10.1 to the Company's Registration Statement on
                         Form S-4 (Commission File No. 333-86482)).

         10.8  --        First  Amendment  dated as of  February  27,  2003 to
                         Credit   Agreement   dated  as  of  March   26,   2002.
                         (Incorporated  by  reference  to  Exhibit  10.12 of the
                         Company's annual report on Form 10-K for the year ended
                         December 31, 2002.)

         10.9  --        Severance Agreement and General Release for Gerard E.
                         Keefe dated October 11, 2002 (Incorporated by reference
                         to Exhibit 10.13 of the Company's annual report on Form
                         10-K for the year ended December 31, 2002.)


                                       111
<PAGE>

         10.10 --        Severance  Agreement  and  General  Release  for J.
                         Collier  Beall  dated  June  3,   2002(Incorporated  by
                         reference  to  Exhibit  10.14 of the  Company's  annual
                         report on Form  10-K for the year  ended  December  31,
                         2002.)

         10.11 --        Second  Amendment dated as of August 11, 2003, among
                         Scotsman Holdings,  Inc., the Company, the lenders from
                         time to time party to the credit agreement and Deutsche
                         Bank Trust Company Americas,  as  Administrative  Agent
                         (incorporated  by  reference  to  Exhibit  10.1  of the
                         Company's  Current  report on Form 8-K dated August 27,
                         2003)

         10.12 --        Third Amendment dated as of December 22, 2003, among
                         Scotsman Holdings,  Inc., the Company, the lenders from
                         time to time party to the credit agreement and Deutsche
                         Bank Trust Company Americas, as Administrative Agent .
                         (Incorporated by reference to Exhibit 10.12 of Williams
                         Scotsman Inc.'s annual report on Form 10-k dated March,
                         24, 2004.)

         10.13 --        Scotsman Holdings 2003 Employee Stock Option Plan
                         (Incorporated by reference to Exhibit 10.13 of Williams
                         Scotsman Inc.'s annual report on Form 10-k dated March,
                         24, 2004.)

         21.1  --        Subsidiaries of Registrant:  Williams Scotsman Inc.

         31.1  --        Certification   pursuant  to  Section  302  of  the
                         Sarbanes-Oxley  Act of 2002  for  Gerard  E.  Holthaus,
                         Chief Executive Officer of the Company.


         31.2  --        Certification   pursuant  to  Section  302  of  the
                         Sarbanes-Oxley  Act of 2002 for John C. Cantlin,  Chief
                         Financial Officer of the Company.








                                       112
<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 report to be signed on
its behalf by the undersigned, thereunto duly authorized.





                                                         SCOTSMAN HOLDINGS, INC.
                                                      By: /s/ Gerard E. Holthaus
                                                      --------------------------
                                                      Gerard E. Holthaus
                                                      Chief Executive Officer




         Dated:  March 25, 2004



                                                         SCOTSMAN HOLDINGS, INC.
                                                         By: /s/ John C. Cantlin
                                                         -----------------------
                                                         John Cantlin
                                                         Chief Financial Officer


         Dated: March 25, 2004







                                       113
<PAGE>



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

         Name                    Capacity                         Date
---------------------------      -------------------------------  --------------
/s/ Gerard E. Holthaus           Chairman, President, Chief       March 25, 2004
----------------------
Gerard E. Holthaus               Executive Officer and Director
                                 (principal executive officer)

/s/ John C. Cantlin              Chief Financial Officer          March 25, 2004
---------------------------
John C. Cantlin                  (principal financial and
                                  accounting officer)


/s/ James N. Alexander           Director                         March 25, 2004
-------------------------
James N. Alexander

/s/ Michael F. Finley            Director                         March 25, 2004
----------------------------
Michael F. Finley


/s/ Steven B. Gruber             Director                         March 25, 2004
---------------------------
Steven B. Gruber

/s/ Brian Kwait                  Director                         March 25, 2004
------------------------------
Brian Kwait

/s/ David P. Spalding            Director                         March 25, 2004
---------------------------
David P. Spalding







                                       114
<PAGE>




Supplemental Information to Be Furnished With Reports Filed Pursuant to Section
15(d) of the Act by Registrants Which Have Not Registered Securities Pursuant to
Section 12 of the Act:

No annual report of proxy material for the fiscal year ended December 31, 2003
has been, nor will be, sent to security holders.

























                                       115
<PAGE>


                     SCOTSMAN HOLDINGS, INC. AND SUBSIDIARY

           Schedule I - Condensed Financial Information of Registrant


Condensed Balance Sheets                               December 31,
                                                 -------------------------
                                                  2003                2002
                                                  ----                ----
                                                        (in thousands)

                  Assets
         Cash                                   $    --         $        2
         Investment in subsidiary                (4,591)             7,110
         Deferred income taxes                    5,512              5,492
                                                  -----             ------
                                                $   921         $   12,604
                                                  =====             ======

Liabilities and Stockholders' Equity
         Accrued expenses                       $    13         $       14

         Stockholders' deficit:
                  Common stock                       95                 95
                  Additional paid-in capital    229,101            229,101
                  Retained earnings              67,650             79,332
                                                -------            -------
                                                296,846            308,528
                  Treasury stock               (295,938)          (295,938)
                                                -------            -------
                                                    908             12,590
                                                -------            -------
                                               $    921         $   12,604
                                                =======            =======


Condensed Statements of Operations                     Year Ended December 31,
                                              ---------------------------------
                                              2003          2002           2001
                                              ----          ----           ----
                                                       (In thousands)

         Revenue                            $   --       $    --      $      --

         Selling, general and
           administrative expenses              56            57             57
         Interest                               --            --             --
                                             -----        ------         ------
                                                56            57             57

                  Loss before income taxes     (56)          (57)           (57)
         Income tax benefit                     20            20             20

                  Loss before equity in
                   earnings of subsidiary   ------        ------         ------
                   and extraordinary item      (36)          (37)           (37)

         Equity in (loss) earnings
                of subsidiary              (11,646)       15,235         22,666
                                            ------        ------         ------
                  Net (loss) income       $(11,682)      $15,198      $  22,629
                                            ======        ======         ======



                                      116
<PAGE>



                     SCOTSMAN HOLDINGS, INC. AND SUBSIDIARY

      Schedule I - Condensed Financial Information of Registrant, Continued




Statement of Cash Flows                              Year Ended December 31,
                                                -------------------------------
                                                 2003         2002         2001
                                                 ----         ----         ----
                                                        (in thousands)
Cash flows from operating activities:
         Net (loss) income                    $(11,682)     $15,198     $22,629
         Adjustments to reconcile net
          income to net cash provided
          by (used in) operating activities:
            Deferred income tax benefit            (20)         (20)        (20)
            Undistributed loss
               (earnings) of subsidiary         11,646      (15,235)    (22,666)
            Other                                   (1)           2          --

         Net cash used in operating             -------      ------      ------
           activities                               (57)        (55)        (57)
                                                -------      ------      ------

Cash flows from financing activities:
         Dividends received from
           subsidiary                                55         133          60
         Payments to acquire treasury
           stock                                    (--)        (78)         (4)

         Net cash provided by                    ------      ------      ------
              financing activities                   55          55          56
                                                 ------      ------      ------
         Net decrease in cash                        (2)        (--)         (1)
         Cash at beginning of period                  2           2           3
                                                 ------      ------      ------
         Cash at end of period                 $     --     $     2     $     2
                                                 ======      ======      ======

                                      117
<PAGE>



                    SCOTSMAN HOLDINGS, INC. AND SUBSIDIARY

                 Schedule II - Valuation and Qualifying Accounts



                                                Year ended December 31,
                                             ----------------------------
                                             2003        2002        2001
                                             ----        ----        ----
                                                    (In thousands)
Allowance for Doubtful Accounts:
     Balance at beginning of the period    $1,071       $1,298     $  983
     Provision charged to expense           2,286        3,692      4,204
     Accounts receivable written-off, net
        of recoveries                      (2,495)      (3,919)    (3,889)
                                            -----        -----      -----

     Balance at end of the period          $  862       $1,071     $1,298
                                            =====        =====      =====





















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<PAGE>



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


     Exhibit No.         Description of Document

         2.1  --         Recapitalization  Agreement,  dated  as  of  April  11,
                         1997.  (Incorporated  by  reference to Exhibit 2 of the
                         Company's 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 the
                         Company's 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 the  Company's  Form  8-K  dated  November  27,
                         1996).

         3.2  --         By-laws of Williams  Scotsman,  Inc.  (Incorporated  by
                         reference to Exhibit 3.2 of the Company's  Registration
                         Statement on Form S-l by the Company)  (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  the
                         Company's  Registration  Statement on Form S-4 filed on
                         September 25, 1997 by the Company) (Commission File No.
                         333-30753).

         4.1.1 --        First Supplemental Indenture,  dated as of September
                         1, 1998  (incorporated by reference to Exhibit 4.1.1 of
                         Williams Scotsman's  Registration Statement on Form S-4
                         (file no. 333-86482)).





         4.1.2 --        Second Supplemental Indenture,  dated as of February
                         4, 1999  (incorporated by reference to Exhibit 4.1.2 of
                         Williams Scotsman's  Registration Statement on Form S-4
                         (file no. 333-86482)).

         4.1.3 --        Third Supplemental  Indenture,  dated as of June 29,
                         2001  (incorporated  by reference  to Exhibit  4.1.3 of
                         Williams Scotsman's  Registration Statement on Form S-4
                         (file no. 333-86482)).

         4.1.4 --        Fourth Supplemental Indenture, dated as of March 26,
                         2002  (incorporated  by reference  to Exhibit  4.1.4 of
                         Williams Scotsman's  Registration Statement on Form S-4
                         (file no. 333-86482)).


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<PAGE>

         4.2  --         Registration  Rights Agreement,  dated as of August 18,
                         2003, among the Company, the Guarantors named there in,
                         the  Subordinated  Guarantor named therein and Deutsche
                         Bank Securities  Inc., Bank of America  Securities LLC,
                         CIBC World Market Corp. and Fleet Securities,  Inc., as
                         initial   purchasers   (incorporated  by  reference  to
                         Exhibit 4.2 to the Form S-4 filed on October 3, 2003 by
                         the Company (Commission file no. 333-109448)).

          4.3  --        Indenture,  dated  as of  August  18,  2003  among  the
                         Company, the Guarantors named therein, the Subordinated
                         Guarantor  named  therein  and the U.S.  Bank  National
                         Association as trustee, including exhibits thereto, the
                         form of the initial  note and the form of the  exchange
                         note  (incorporated  by reference to Exhibit 4.3 to the
                         Form  S-4  filed  on  October  3,  2003 by the  Company
                         (Commission file no. 333-109448)).

         4.4  --         Amended and Restated U.S.  Pledge  Agreement,  dated as
                         of March 26, 2002 and amended and restated as of August
                         18, 2003, among Scotsman  Holdings,  Inc., the Company,
                         the   Guarantors   named  therein,   the   Subordinated
                         Guarantor named therein and Deutsche Bank Trust Company
                         Americas,   and  acknowledged  by  U.S.  Bank  National
                         Association as the trustee  (incorporated  by reference
                         to Exhibit 4.4 to the Form S-4 filed on October 3, 2003
                         by the Company (Commission file no. 333-109448)).

         4.5  --         Amended and Restated U.S. Security Agreement,  dated as
                         of March 26,  2002,  and  amended  and  restated  as of
                         August 18, 2003,  among  Scotsman  Holdings,  Inc., the
                         Company,  the Guarantors named therein,  the Collateral
                         Agent and acknowledged by the Trustee  (incorporated by
                         reference  to  Exhibit  4.5 to the  Form  S-4  filed on
                         October  3, 2003 by the  Company  (Commission  file no.
                         333-109448)).

         4.6  --         Canadian Security  Agreement among Williams Scotsman of
                         Canada,  Deutsche Bank Trust Company  America,  Truck &
                         Trailer Sales,  Inc.,  Evergreen  Mobile Company and BT
                         Commercial  Corporation  (incorporated  by reference to
                         Exhibit 4.6 to the Form S-4 filed on October 3, 2003 by
                         the Company (Commission file no. 333-109448)).


         4.7  --         Intercreditor   Agreement  among  Deutsche  Bank  Trust
                         Company  Americas and U.S.  Bank  National  Association
                         (incorporated  by  reference to Exhibit 4.7 to the Form
                         S-4 filed on October 3, 2003 by the Company (Commission
                         file no. 333-109448)).


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<PAGE>

         10.1  --        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 the  Company's  Registration  Statement on Form
                         S-4 (Commission File No.333-30753)).

         10.2  --        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.)

         10.3  --        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 annual report on Form 10-K for the year ended
                         December 31, 1998.)

         10.4  --        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)).

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

         10.6  --        Scotsman  Holdings,  Inc.  Amended and Restated  1997
                         Employee Stock Option Plan.  (Incorporated by reference
                         to Exhibit 10.7 of the Company's  annual report on Form
                         10-K for the year ended December 31, 1998.)


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<PAGE>

         10.7  --        Credit Agreement,  dated as of March 26, 2002, by and
                         among Scotsman Holdings, Inc., Williams Scotsman, Inc.,
                         various financial  institutions named therein,  Bankers
                         Trust Company,  as administrative  agent, Fleet Capital
                         Corporation  and  Congress  Financial   Corporation  as
                         Co-Syndication  Agents, Bank of America,  N.A. and GMAC
                         Business Credit,  LLC as  Co-Documentation  Agents, and
                         Deutsche  Banc Alex.  Brown Inc. as Sole Lead  Arranger
                         and Sole Book  Manager.  (Incorporated  by reference to
                         Exhibit 10.1 to the Company's Registration Statement on
                         Form S-4 (Commission File No. 333-86482)).

         10.8  --        First  Amendment  dated as of  February  27,  2003 to
                         Credit   Agreement   dated  as  of  March   26,   2002.
                         (Incorporated  by  reference  to  Exhibit  10.12 of the
                         Company's annual report on Form 10-K for the year ended
                         December 31, 2002.)

         10.9  --        Severance Agreement and General Release for Gerard E.
                         Keefe dated October 11, 2002 (Incorporated by reference
                         to Exhibit 10.13 of the Company's annual report on Form
                         10-K for the year ended December 31, 2002.)

         10.10 --        Severance  Agreement  and  General  Release  for J.
                         Collier  Beall  dated  June  3,   2002(Incorporated  by
                         reference  to  Exhibit  10.14 of the  Company's  annual
                         report on Form  10-K for the year  ended  December  31,
                         2002.)

         10.11 --        Second  Amendment dated as of August 11, 2003, among
                         Scotsman Holdings,  Inc., the Company, the lenders from
                         time to time party to the credit agreement and Deutsche
                         Bank Trust Company Americas,  as  Administrative  Agent
                         (incorporated  by  reference  to  Exhibit  10.1  of the
                         Company's  Current  report on Form 8-K dated August 27,
                         2003)

         10.12 --        Third Amendment dated as of December 22, 2003, among
                         Scotsman Holdings,  Inc., the Company, the lenders from
                         time to time party to the credit agreement and Deutsche
                         Bank Trust Company Americas, as Administrative Agent .
                         (Incorporated by reference to Exhibit 10.12 of Williams
                         Scotsman Inc.'s annual report on Form 10-k dated March,
                         24, 2004.)

         10.13 --        Scotsman Holdings 2003 Employee Stock Option Plan
                         (Incorporated by reference to Exhibit 10.13 of Williams
                         Scotsman Inc.'s annual report on Form 10-k dated March,
                         24, 2004.)



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<PAGE>



         21.1  --        Subsidiaries of Registrant:  Williams Scotsman Inc.

         31.1  --        Certification   pursuant  to  Section  302  of  the
                         Sarbanes-Oxley  Act of 2002  for  Gerard  E.  Holthaus,
                         Chief Executive Officer of the Company.


         31.2  --        Certification   pursuant  to  Section  302  of  the
                         Sarbanes-Oxley  Act of 2002 for John C. Cantlin,  Chief
                         Financial Officer of the Company.















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<PAGE>



                                                                  Exhibit 31.1
                                 CERTIFICATIONS

         I, Gerard E. Holthaus, Chief Executive Officer, certify, that:

                           (1) I have reviewed this annual report on Form 10-K
                               of Scotsman Holdings, Inc.;

                           (2) Based on my knowledge, this annual report does
                               not contain any untrue statement of a material
                               fact or omit to state a material fact necessary
                               to make the statements made, in light of the
                               circumstances under which such statements were
                               made, not misleading with respect to the period
                               covered by this annual report;

                           (3) Based on my knowledge, the financial statements,
                               and other financial information included in this
                               annual report, fairly present in all material
                               respects the financial condition, results of
                               operations and cash flows of the registrant as
                               of, and for, the periods presented in this annual
                               report;

                           (4) The registrant's other certifying officer and I
                               are responsible for establishing and maintaining
                               disclosure controls and procedures (as defined in
                               Exchange Act Rules 13a-15(e) and 15d-15(e)) for
                               the registrant and have:

                                     a)  Designed such disclosure controls and
                                         procedures, or caused such disclosure
                                         controls and procedures to be designed
                                         under our supervision, to ensure that
                                         material information relating to the
                                         registrant, including its consolidated
                                         subsidiaries, is made known to us by
                                         others within those entities,
                                         particularly during the period in which
                                         this report is being prepared;

                                     b)  Evaluated the effectiveness of the
                                         registrant's disclosure controls and
                                         procedures and presented in this report
                                         our conclusions about the effectiveness
                                         of the disclosure controls and
                                         procedures, as of the end of the period
                                         covered by this report based on such
                                         evaluation; and

                                     c)  Disclosed in this report any change in
                                         the registrant's internal control over
                                         financial reporting that occurred
                                         during the registrant's most recent
                                         fiscal quarter (the registrant's fourth
                                         fiscal quarter in the case of an annual
                                         report) that has materially affected,
                                         or is reasonably likely to materially
                                         affect, the registrant's internal
                                         control over financial reporting;




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<PAGE>



                           (5) The registrant's other certifying officer and I
                               have disclosed, based on our most recent
                               evaluation of internal control over financial
                               reporting, to the registrant's auditors and the
                               audit committee of registrant's board of
                               directors (or persons performing the equivalent
                               function):

                                     a) All significant deficiencies and
                                        material weaknesses in the design or
                                        operation of internal control over
                                        financial reporting which are reasonably
                                        likely to adversely affect the
                                        registrant's ability to record, process,
                                        summarize and report financial
                                        information; and

                                     b) Any fraud, whether or not material, that
                                        involves management or other employees
                                        who have a significant role in the
                                        registrant's internal control over
                                        financial reporting.




         /s/ Gerard E. Holthaus
         Gerard E. Holthaus
         Chief Executive Officer

         March 25, 2004



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<PAGE>


                                                                  Exhibit 31.2
                                 CERTIFICATIONS


         I, John C. Cantlin, Chief Financial Officer, certify, that:

                           (1) I have reviewed this annual report on Form 10-K
                               of Scotsman Holdings, Inc.;

                           (2) Based on my knowledge, this annual report does
                               not contain any untrue statement of a material
                               fact or omit to state a material fact necessary
                               to make the statements made, in light of the
                               circumstances under which such statements were
                               made, not misleading with respect to the period
                               covered by this annual report;

                           (3) Based on my knowledge, the financial statements,
                               and other financial information included in this
                               annual report, fairly present in all material
                               respects the financial condition, results of
                               operations and cash flows of the registrant as
                               of, and for, the periods presented in this annual
                               report;

                           (4) The registrant's other certifying officer and I
                               are responsible for establishing and maintaining
                               disclosure controls and procedures (as defined in
                               Exchange Act Rules 13a-15(e) and 15d-15(e)) for
                               the registrant and have:

                                     a)  Designed such disclosure controls and
                                         procedures, or caused such disclosure
                                         controls and procedures to be designed
                                         under our supervision, to ensure that
                                         material information relating to the
                                         registrant, including its consolidated
                                         subsidiaries, is made known to us by
                                         others within those entities,
                                         particularly during the period in which
                                         this report is being prepared;

                                     b)  Evaluated the effectiveness of the
                                         registrant's disclosure controls and
                                         procedures and presented in this report
                                         our conclusions about the effectiveness
                                         of the disclosure controls and
                                         procedures, as of the end of the period
                                         covered by this report based on such
                                         evaluation; and

                                     c)  Disclosed in this report any change in
                                         the registrant's internal control over
                                         financial reporting that occurred
                                         during the registrant's most recent
                                         fiscal quarter (the registrant's fourth
                                         fiscal quarter in the case of an annual
                                         report) that has materially affected,
                                         or is reasonably likely to materially
                                         affect, the registrant's internal
                                         control over financial reporting;





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<PAGE>



                           (5) The registrant's other certifying officer and I
                               have disclosed, based on our most recent
                               evaluation of internal control over financial
                               reporting, to the registrant's auditors and the
                               audit committee of registrant's board of
                               directors (or persons performing the equivalent
                               function):

                                     a) All significant deficiencies and
                                        material weaknesses in the design or
                                        operation of internal control over
                                        financial reporting which are reasonably
                                        likely to adversely affect the
                                        registrant's ability to record, process,
                                        summarize and report financial
                                        information; and

                                     b) Any fraud, whether or not material, that
                                        involves management or other employees
                                        who have a significant role in the
                                        registrant's internal control over
                                        financial reporting.


         /s/ John C. Cantlin
         ------------------------
         John C. Cantlin
         Chief Financial Officer

         March 25, 2004










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