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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: 033-68444

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


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

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


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


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

Securities registered pursuant to Section 12(g) of the Act:
None
----
(Title of class)

Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No__

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

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

There are no shares of the Registrant's common stock held by non-affiliates
of the Registrant.

As of March 25, 2004, 3,320,000 shares of the Registrant's common stock
were outstanding.





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.








PART I
Item 1. Business

General

Our company 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
increase in the number of applications for modular space and a greater

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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 Scotsman Holdings, Inc., which owns 100% of
the outstanding voting securities of Williams Scotsman, Inc.

Pursuant to a recapitalization agreement, on May 22, 1997, our parent,
Scotsman Holdings, Inc. ("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, Holdings and Williams Scotsman, Inc.
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, we have 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.

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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.

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.

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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 our
parent company on a fully diluted basis. We believe that this represents a
significant economic commitment to and confidence in our company.


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.

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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.


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

6


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. 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,

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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
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.

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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
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.

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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.

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.

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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

11


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;

12


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;

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 and our subsidiaries 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

13


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:

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 our 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

14


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.


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 the outstanding common stock of Scotsman Holdings,
Inc., our parent company. Holdings in turn owns 100% of our 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.

15



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.














16




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.




















17





PART II

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

We are a 100% owned subsidiary of Scotsman Holdings, Inc., a Delaware
corporation. There is no established public trading market for Holdings' Common
Stock.

During 2003 and 2002, we paid dividends to Holdings of approximately
$55,000 and $133,000, respectively, for normal operating expenses. We do not
intend to pay any other dividends except for the normal operating expenses of
Holdings, but reserve the right to do so. Our ability to pay dividends to
Holdings is limited to amounts for corporate and administrative expenses. The
indentures governing our 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.)


















18








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,
-------------------------------------------------------


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 $ 71,425 $ 76,817 $ 82,516 $ 85,722 $ 76,241
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 32,020 31,076 40,271 23,392 (18,757)
Income tax expense (benefit) 14,713 14,957 17,605 8,157 (7,111)
------ ------ ------ ----- ------
Net income (loss) 17,307 16,119 22,666 15,235 (11,646)
====== ====== ====== ======= ======
Net income (loss) per common share $ 5.21 $ 4.86 $ 6.83 $ 4.59 $ (3.51)
==== ==== ==== ==== ====
Dividends per common share $ .02 $ .02 $ .02 $ .04 $ .02
=== === === ===== ====

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



19





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


Balance Sheet Data:
Rental equipment, net (1) $ 726,924 $799,994 $ 866,867 $828,927 $828,078
Total assets 1,066,464 1,145,898 1,244,984 1,229,765 1,205,111
Revolving credit facility &
long-term debt 915,823 959,110 1,022,972 984,345 962,178
Stockholder's (deficit) equity (44,107) (28,021) (6,741) 13,793 12,865


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 124 2,568 (570) (20,879) (18,757)
Income (loss) before income
taxes-previously reported 324 1,167 (433) N/A N/A
Net income (loss) 74 1,541 (342) (12,919) (11,646)
== ===== === ====== ======
Net income (loss)-previously
reported (2) $ 194 $ 701 $ (260) N/A N/A
=== === ===
Net income (loss) per
common share $ 0.02 $ 0.46 $ (0.10) $ (3.89) $ (3.51)

Net income (loss) per common
share-previously reported (2) $ 0.06 $ 0.21 $ (0.08) N/A N/A

Cash dividends per share $ -- $ .01 $ .01 $ -- $ .02
- ---------------------------------------------------------------------------------------------------------


(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 6,776 4,306 8,512 3,798 23,392
Net income $ 3,727 $ 2,896 $ 5,102 $ 3,510 $ 15,235
Net income per common share $ 1.12 $ 0.87 $ 1.54 $ 1.06 $ 4.59
Cash dividends per share $ 0.03 $ 0.01 $ -- $ -- $ 0.04
- ----------------------------------------------------------------------------------------------------------






20



(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 11 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












21



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


22


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
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.


23


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

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

24


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.


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 $76.2 million and
$85.7 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.


25


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.

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 11 to Notes to Consolidated Financial
Statements.

The income tax expense (benefit) decreased from an expense of $8.2 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 $85.7 million, a $3.2 million or 3.9% increase from 2001
expenses of $82.5 million. The overall increase in SG&A expense is due primarily

26


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.

The income tax expense decreased from $17.6 million in 2001 to $8.2 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 $59.6 million in 2001, $95.3 million in 2002 and $74.3 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 $21.7 million or 12.5% to $151.5 million
in 2003 compared to $173.2 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.



27



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 $151,535 $173,185
Decrease in net accounts receivable 9,167 10,387
Increase in accounts payable and
accrued expenses 2,742 1,302
Interest paid (74,608) (76,744)
(Increase) decrease in other assets (7,805) 433
Decrease in other liabilities (1,576) (7,492)
Gain on sale of rental equipment (4,373) (5,787)
(Gain) loss on sale of fixed assets (810) 50
---- -----
Cash flow from operating activities $ 74,272 $ 95,334
====== ======

Other Data:
Cash flow used in investing activities $(43,639) $(36,119)
====== ======
Cash flow used in financing activities $(30,620) $(59,350)
====== ======

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.











28





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 $63.2 million in 2001 was
primarily from borrowings, net of repayments, under our revolving credit
facility. Cash used in financing activities of $59.4 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.




29




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 our 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 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
we 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 our 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

30


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
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.
















31




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-Holdings level $ 74,216 (a)
Plus: Administrative expense at Holdings level 56 (a)
------
Cash flow from operating activities
$ 74,272 (a)
======

Other Data:
Cash flow used in investing activities $ (43,639)
======
Cash flow used in financing activities $ (30,620)
======


(a) Note: In accordance with the provisions of the credit agreement, the
parent company's financial results are to be used in the calculation of the
covenant compliance ratios. Holdings financials include $56 of administrative
expenses incurred at the parent company level.














32





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

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.






33






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.





















34



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 our 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%







35






Item 8. Financial Statements and Supplementary Data


INDEX TO FINANCIAL STATEMENTS

Page

Report of Independent Auditors...............................................37

Consolidated Balance Sheets as of
December 31, 2003 and 2002............................................38

Consolidated Statements of Operations for
the years ended December 31, 2003, 2002 and 2001......................39

Consolidated Statements of Changes in
Stockholder's Equity/(Deficit) for
the years ended December 31, 2003, 2002 and 2001......................40

Consolidated Statements of Cash Flows for
the years ended December 31, 2003, 2002 and 2001...................41-42

Notes to Consolidated Financial Statements................................43-66


INDEX TO FINANCIAL STATEMENTS SCHEDULES



Schedule II - Valuation and Qualifying Accounts..............................92



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.








36





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




37





Williams Scotsman, Inc. and Subsidiaries
Consolidated Balance Sheets


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

(In thousands)
Assets


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.




38






Williams Scotsman, Inc. and Subsidiaries
Consolidated Statements of Operations


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


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.


39







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)


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.






40








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

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


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















41






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

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



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.








42




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.







43





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

44


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.



45




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


46



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.





47



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.



48



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.





49



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.






50





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---------


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:




---------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
======= ====== ======= ======



51


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







52




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 - Rescission 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
the 9.875% 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.



53




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.



54




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. 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.











55



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.








56



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


57



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



58


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



59


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.













60





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:


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



61





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:


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)
======= ====== ======= ========





62






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


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

63







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


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






64



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.



65




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













66





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.





67



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 the Company 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

68


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.


69


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.



70



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.


















71





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 (#)
---- -------------- --------- ------------------- ---------------------


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.





72






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


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.












73




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.







74




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.


75



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.









76



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




77




(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.


78


(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.


















79




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.





80




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.


81


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

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

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















82





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.





83





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, the Company 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)).



84


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)).


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)).


85


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)).

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.)


86


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 .


10.13 -- Scotsman Holdings 2003 Employee Stock Option Plan



87





21.1 -- Subsidiaries of Registrant: Willscot Equipment, LLC,
Space Master International, Inc., Evergreen Mobile
Company, Truck & Trailer Sales, Inc. and Williams
Scotsman of Canada, 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.

32.1 -- Certification pursuant to 18 U.S.C. Section 1350 as
adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002 for Gerard E. Holthaus, Chief Executive
Officer of the Company.

32.2 -- Certification pursuant to 18 U.S.C. Section 1350 as
adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002 for John C. Cantlin, Chief Financial
Officer of the Company.






88




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.





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




Dated: March 25, 2004



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


Dated: March 25, 2004







89




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







90





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.

























91




WILLIAMS SCOTSMAN, INC. AND SUBSIDIARIES

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





















92








EXHIBITS TO FORM 10-K
WILLIAMS SCOTSMAN, 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)).



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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)).


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)).


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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)).

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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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 .


10.13 -- Scotsman Holdings 2003 Employee Stock Option Plan



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21.1 -- Subsidiaries of Registrant: Willscot Equipment, LLC,
Space Master International, Inc., Evergreen Mobile
Company, Truck & Trailer Sales, Inc. and Williams
Scotsman of Canada, 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.

32.1 -- Certification pursuant to 18 U.S.C. Section 1350 as
adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002 for Gerard E. Holthaus, Chief Executive
Officer of the Company.

32.2 -- Certification pursuant to 18 U.S.C. Section 1350 as
adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002 for John C. Cantlin, Chief Financial
Officer of the Company.













97


Exhibit 10.12


THIRD AMENDMENT


THIRD AMENDMENT (this "Amendment"), dated as of December 22, 2003, among
SCOTSMAN HOLDINGS, INC., a Delaware corporation ("Holdings"), WILLIAMS SCOTSMAN,
INC., a Maryland corporation (the "Borrower"), the Lenders from time to time
party to the Credit Agreement referred to below (the "Lenders"), FLEET CAPITAL
CORPORATION and CONGRESS FINANCIAL CORPORATION, as Co-Syndication Agents, BANK
OF AMERICA, N.A. and GMAC COMMERCIAL FINANCE LLC, successor by merger to GMAC
BUSINESS CREDIT, LLC, as Co-Documentation Agents, and DEUTSCHE BANK TRUST
COMPANY AMERICAS (formerly known as BANKERS TRUST COMPANY), as Administrative
Agent. All capitalized terms used herein and not otherwise defined herein shall
have the respective meanings provided such terms in the Credit Agreement
referred to below.



W I T N E S S E T H:
- - - - - - - - - -


WHEREAS, Holdings, the Borrower, the Lenders and the Administrative Agent
are parties to a Credit Agreement, dated as of March 26, 2002 (as amended,
modified or supplemented through, but not including, the date hereof, the
"Credit Agreement"); and

WHEREAS, the parties hereto wish to amend the Credit Agreement on the terms
and subject to the conditions contained herein;

NOW, THEREFORE, it is agreed:

The definition of "Consolidated EBITDA" appearing in Section 1.1 of the
Credit Agreement is hereby amended by restating said definition in its entirety
as follows:

"Consolidated EBITDA" shall mean, in any fiscal period, Consolidated Net
Income (other than extraordinary items of Holdings, the Borrower and their
respective Subsidiaries for such period but including any Inventory or
Rental Equipment adjustments) for such period, (i) plus the amount of all
Consolidated Interest Expense, federal, state and local income or franchise
tax expense (in each case to the extent such tax expense is included in the
Borrower's Financial Statements as income tax expense), depreciation and
amortization, including amortization or write-off of any goodwill or other
intangibles for such period, (ii) less gains and plus losses attributable
to any fixed asset sales (other than Inventory and Rental Equipment,
provided that sales of Rental Equipment with respect to which write-offs,
write downs and/or reserves have (or had) been established as contemplated


98


in clause (iv) below shall reduce Consolidated EBITDA to the extent same
was added in calculating Consolidated Net Income) for such period, (iii)
plus the amortization of debt issuance costs for such period and (iv) plus
or minus (as the case may be) any other non-cash items for such period
(other than any write-off, write-down or reserve established by Holdings
against Accounts, Inventory and/or Rental Equipment, provided that an
amount of non-cash write-offs, write-downs and/or reserves not to exceed
$20,000,000 in the aggregate established by Holdings against certain Rental
Equipment on or prior to January 15, 2004 may be added to Consolidated
EBITDA for such period for the purpose of determining compliance with
Sections 8.9 and 8.10, but not for the purpose of determining the
Applicable Margin and the Applicable Unused Line Fee Percentage, to the
extent same was deducted in calculating Consolidated Net Income for such
period), all determined in accordance with GAAP, without duplication and
only to the extent added or deducted (as the case may be) in calculating
Consolidated Net Income for the respective period.

2.In order to induce the Lenders to enter into this Amendment, each of
Holdings and the Borrower hereby represents and warrants that, both before and
after giving effect to this Amendment, (x) no Default or Event of Default exists
on the Third Amendment Effective Date (as defined below) and (y) all of the
representations and warranties contained in the Credit Agreement and the other
Credit Documents shall be true and correct in all material respects on the date
hereof and on the Third Amendment Effective Date with the same effect as though
such representations and warranties had been made on and as of such date (it
being understood that any representation or warranty made as of a specific date
shall be true and correct in all material respects as of such specific date).

3.This Amendment is limited as specified and shall not constitute a
modification, acceptance or waiver of any other provision of the Credit
Agreement or any other Credit Document.

4.This Amendment may be executed in any number of counterparts and by the
different parties hereto on separate counterparts, each of which counterparts
when executed and delivered shall be an original, but all of which shall
together constitute one and the same instrument. A complete set of counterparts
shall be lodged with the Borrower and the Administrative Agent.

5.THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF
NEW YORK.

6.This Amendment shall become effective as of the date hereof on the date
(the "Third Amendment Effective Date") when each of Holdings, the Borrower and
the Required Lenders shall have signed a copy hereof and shall have delivered
(including by way of telecopier) the same to the Administrative Agent at the
Notice Office.


99



7.From and after the Third Amendment Effective Date, all references in the
Credit Agreement and each of the other Credit Documents to the Credit Agreement
shall be deemed to be references to the Credit Agreement as modified hereby. * *
*
































100




IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed by their respective authorized officers as of the day and year
first above written.


Address:
- -------
8211 Town Center Drive SCOTSMAN HOLDINGS, INC.
Baltimore, Maryland 21236
Attention: John Ross
Telephone: (410) 931-6000 By: John Cantlin
Facsimile: (410) 931-6117 ------------
Name: John Cantlin
Title: Senior Vice President and Chief
Financial Officer





WILLIAMS SCOTSMAN, INC.



By: John Cantlin
------------
Name: John Cantlin
Title: Senior Vice President and Chief
Financial Officer











101



DEUTSCHE BANK TRUST COMPANY
AMERICAS (formerly
known as Bankers Trust
Company), Individually
and as Administrative
Agent


By: Albert Fischetti
Name: Albert Fischetti
Title: Director


LaSalle Bank National
Association
By: John Mostofi
Name: John Mostofi
Title:Senior Vice President



HARBOUR TOWN FUNDING LLC

By: Ann E. Morris
Name: Ann E. Morris
Title: Asst. Vice President


Sankaty Advisors, LLC as
Collateral Manager for
Brant Point II CBO 2000-1
LTD., as Term Lender

By: Diane J. Exter
Name: Diane J. Exter
Title: Managing Director
Portfolio Manager


Sankaty Advisors, LLC as
Collateral Manager for
Great Point CLO 1999-1
LTD., as Term Lender

By: Diane J. Exter
Name: Diane J. Exter
Title: Managing Director
Portfolio Manager


102



Sankaty Advisors, LLC as
Collateral Manager for Race
Point CLO LTD., as Term
Lender

By: Diane J. Exter
Name: Diane J. Exter
Title: Managing Director
Portfolio Manager

Sankaty Advisors, LLC as
Collateral Manager for Race
Point IICLO LTD., as Term
Lender

By: Diane J. Exter
Name: Diane J. Exter
Title: Managing Director
Portfolio Manager


Sankaty Advisors, LLC as
Collateral Manager for
Castle Hill I- Ingots,LTD.,
as Term Lender

By: Diane J. Exter
Name: Diane J. Exter
Title: Managing Director
Portfolio Manager

Sankaty Advisors, LLC as
Collateral Manager for
Castle Hill II- Ingots,
LTD., as Term Lender

By: Diane J. Exter
Name: Diane J. Exter
Title: Managing Director
Portfolio Manager


Sankaty Advisors, LLC as
Collateral Manager for
Castle Hill III- Ingots,
LTD., as Term Lender

By: Diane J. Exter
Name: Diane J. Exter
Title: Managing Director
Portfolio Manager


103




GMAC COMMERCIAL FINANCE
LLC, successor by merger
to GMAC BUSINESS CREDIT,LLC

By: Robert F. McIntyre
Name: Robert F. McIntyre
Title: Director


National City Commercial
Finance

By: Jason Hanes
Name: Jason Hanes
Title: AVP


Manufacturers and Traders
Trust Company

By: Anthony R. Raley, II
Name: Anthony R. Raley, II
Title:Relationship Manager


CONGRESS FINANCIAL
CORPORATION

By: James O'Connell
Name: James O'Connell
Title: Assistant Vice
President


COMERICA BANK

By: Jeffrey P. Bradley
Name: Jeffrey P. Bradley
Title: First Vice President



THE CIT GROUP/BUSINESS
CREDIT, INC.

By: Alan Strauss
Name: Alan Strauss
Title: Vice President


104



Bank of America, N. A.

By: James C. Smith
Name: James C. Smith
Title: Vice President



Whitehall Business Credit
Corporation

By: Joseph A. Klapkowski
Name: Joseph A. Klapkowski
Title: Authorized Signatory


OAK HILL SECURITIES FUND,
L.P., Lender

By: Oak Hill Securities
GenPar, L.P.
its General Partner

By: Oak Hill Securities
MGP, Inc.,
its General Partner

By: Scott D. Krase
Name: Scott D. Krase
Title: Vice President



OAK HILL SECURITIES
FUND II, L.P., Lender

By: Oak Hill Securities
GenPar II, L.P.
its General Partner

By: Oak Hill Securities
MGP II, Inc.,
its General Partner

By: Scott D. Krase
Name: Scott D. Krase
Title: Vice President


105




OAK HILL CREDIT PARTNERS I,
LIMITED Lender

By: Oak Hill CLO
Management I, LLC as
Investment Manager

By: Scott D. Krase
Name: Scott D. Krase
Title: Authorized Signatory


OAK HILL CREDIT PARTNERS
II, LIMITED Lender

By: Oak Hill CLO
Management II, LLC as
Investment Manager

By: Scott D. Krase
Name: Scott D. Krase
Title: Authorized Signatory


PEOPLE'S BANK


By: David K. Sherrill
Name: David K. Sherrill
Title:Vice President


Fleet Capital Corporation


By: David Fiorito
Name: David Fiorito
Title: SVP


Toronto Dominion (New York)
Inc.


By: Michelle Manning
Name: Michelle Manning
Title: Vice President

106




SIEMEN'S FINANCIAL
SERVICES, INC.


By: Frank Amodio
Name: Frank Amodio
Title: Vice President
- Credit





















107



Exhibit 10.13

SCOTSMAN HOLDINGS, INC.
2003 EMPLOYEE STOCK OPTION PLAN

Section 1. Purpose

The purpose of the Scotsman Holdings, Inc. 2003 Employee Stock Option Plan
(the "Plan") is to attract and retain outstanding individuals as Key Employees
of Scotsman Holdings, Inc. "(the "Company") and its Affiliates, as hereinafter
defined, and to motivate such individuals to achieve the long-term performance
goals of the Company by providing incentives to such individuals in the form of
stock ownership in the Company, on the terms and conditions set forth herein.

Section 2. Definitions

As used in the Plan and unless the context clearly indicates otherwise, the
following terms shall have the respective meanings set forth below:

(a) "Affiliate" shall mean any entity that, directly or indirectly, through
one or more intermediaries, controls, is controlled by, or is under common
control with, the Company.

(b) "Award" shall mean any Option granted under the Plan.

(c) "Award Agreement" shall mean any written agreement, contract or other
instrument of document evidencing any Award granted under the Plan.

(d) "Beneficiary" shall mean the person designated by the Participant, on a
form provided by the Company, to exercise the Participant's rights in accordance
with Section 7(i) of the Plan in the event of death, or, if no such person is
designated, the estate or personal representatives of such Participant.

(e) "Board of Directors" shall mean the Board of Directors of the Company.

(f) "Cause" shall mean such term as defined in a written employment
agreement with a Participant or, in all other cases, if the Committee
determines, in its sole discretion, that one or more of the following has
occurred: (i) any intentional or willful failure by a Participant to
substantially perform his or her employment duties which shall not have been
corrected within 30 days following written notice thereof, (ii) any engaging by
a Participant in misconduct which, in the reasonable judgment of the Committee,
is significantly injurious to the Company or any of its Affiliates, or (iii) a
Participant's conviction of or entry of a plea of nolo contendere in respect of
any felony, or of a misdemeanor which results in or is reasonably expected to
result in economic or reputational injury to the Company or any of its
Affiliates.

(g) "Code" shall mean the Internal Revenue Code of 1986, as amended.

(h) "Commission" shall mean the United States Securities and Exchange
Commission or any successor agency.


108


(i) "Committee" shall mean the Compensation Committee of the Board of
Directors. The Committee shall be composed of two or more directors.

(j) "Disability" shall mean a total and permanent disability within the
meaning of the Company's long-term disability plan, as amended from time to
time.

(k) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.

(l) "Fair Market Value" shall mean the average of the highest and lowest
selling prices of the Shares as reported on the NASDAQ National Market or such
national securities exchange as may be designated by the Committee or, in the
event that the Shares are not listed for trading on a national securities
exchange or the NASDAQ National Market, the average of the highest and lowest
quoted bid prices of the Shares as reported by the National Association of
Securities Dealers Automated Quotation System ("Nasdaq") or, if not listed on
Nasdaq, the fair market value of the Shares as determined in good faith by the
Board of Directors or the Committee, in any such case as of the valuation date.
For purposes of the Plan, the determination of the Board of Directors or the
Committee of the Fair Market Value of the Shares shall be conclusive.

(m) "Incentive Stock Option" shall mean a stock option granted under
Section 7(a) of the Plan that is intended to meet the requirements of Section
422 of the Code or any successor provision thereto.

(n) "Key Employee" shall mean any officer or other employee of the Company
or any Affiliate who is described in Section 6 of the Plan.

(o) "Non-Qualified Stock Option" shall mean a stock option granted under
Section 7(a) of the Plan that is not intended to be an Incentive Stock Option.

(p) "Option" shall mean an Incentive Stock Option or a Non-Qualified Stock
Option.

(q) "Participant" shall mean a Key Employee who is designated to be granted
or has received an Award under the Plan.

(r) "Person" shall mean any individual, corporation, partnership, limited
liability company, association, joint-stock company, trust, unincorporated
organization or government or political subdivision thereof.


(s) "Retirement" shall mean termination of a Participant's employment with
the Company or any Affiliate at his or her "normal retirement date" as defined
in the Williams Scotsman Inc. 401(k) plan or any successor plan.

(t) "Rule 16b-3" shall mean Rule 16b-3 promulgated by the Commission under
the Exchange Act or any successor rule or regulation thereto.

109



(u) "Shares" shall mean shares of the common stock of the Company and such
other securities or property as may become the subject of Awards pursuant to an
adjustment made under Section 8 of the Plan.

(v) "Termination" shall mean any resignation or discharge from employment
with the Company or any Affiliate, except in the event of Disability, Retirement
or death.

Section 3. Effective Date; Stockholder Approval; Termination

(a) Effective Date and Stockholder Approval. Subject to the approval of the
Plan by the stockholders of the Company, the Plan shall be effective as of
January 2nd, 2003.

(b) Termination. No award shall be granted under the Plan after January
2nd, 2013; provided however, that any Award granted on or before January 2nd,
2013 may extend beyond such date unless expressly provided otherwise herein on
in the applicable Award Agreement; provided further, to the extent set forth in
Section 8 hereof, the authority of the Committee to amend, alter, adjust,
suspend, discontinue or terminate any Award, or to waive any conditions or
restrictions with respect to any Award, and the authority of the Board of
Directors to amend the Plan, shall extend beyond such date.

Section 4. Administration

(a) The Plan shall be administered by the Committee; provided, however,
that if at any time the Committee shall not be in existence, the functions of
the Committee as specified in the Plan shall be exercised by the Board of
Directors. Subject to the terms of the Plan and applicable law, the Committee
shall have full power and authority with respect to the Plan, including, without
limitation, the power to:

(i) designate Participants;

(ii) determine the types of Awards to be granted to each Participant under
the Plan;

(iii) determine the number of Shares to be covered by Awards;

(iv) determine the terms and conditions of any Award;

(v) determine whether, to what extent, under what circumstances and the
method by which Awards may be settled or exercised in cash, Shares, other
securities, other Awards or other property, or canceled, forfeited or suspended;

(vi) determine whether, to what extend and under what circumstances cash,
Shares, other securities, other Awards, other property and other amounts payable
with respect to an Award shall be deferred either automatically or at the
election of the holder thereof or of the Committee;

(vii) interpret and administer the Plan and any instrument or agreement
relating to, and any Award made under, the Plan (including, without limitation,
any Award Agreement);

110


(viii) establish, amend, suspend and waive such rules and regulations and
appoint such agents as it shall deem appropriate for the proper administration
of the Plan; and

(ix) make any other determination and take any other action that the
Committee deems necessary or desirable for the administration of the Plan.

Unless otherwise expressly provided in the Plan, all designations,
determinations, interpretations and other decisions under or with respect to the
Plan, or any Award, shall be within the sole discretion of the Committee, may be
made at any time and shall be final, conclusive and binding upon all Persons,
including the Company, any Affiliate, any Participant, any holder or Beneficiary
of any Award, any stockholder and any employee of the Company or any Affiliate.

(b) The Committee shall have the authority to require, in its discretion,
as a condition for the granting of any Award, that the Participant agree (i) not
to sell or otherwise dispose of Shares acquired pursuant to the exercise of such
Award for a period of six months following the date of the acquisition of such
Award and (ii) to certain covenants concerning confidential information relating
to the Company and its Affiliates and the ownership and protection of certain
intellectual property developed during such Participant's period of employment.

(c) The Committee may establish performance standards for determining the
periods which Awards shall be exercisable, including without limitation
standards based on the earnings or cash flows of the Company and its Affiliates
for various fiscal periods. The Committee shall define such performance criteria
and, from time to time, the Committee in its sole discretion may make
adjustments to such performance criteria for any fiscal period so that
extraordinary or unusual charges or credits, acquisitions, mergers,
consolidations, and other corporate transactions do not distort the operation of
the performance standards.

(d) No member of the Committee shall be liable for any action or
determination made in good faith, and the members of the Committee shall be
entitled to indemnification and reimbursement in the manner provided in the
Company's Certificate of Incorporation and Bylaws, as amended from time to time.

(e) The Committee may designate persons other than its members to carry out
its responsibilities under such conditions or limitations as it may set, except
that the Committee may not delegate: (i) its authority with regard to Awards
(including decisions concerning the timing, pricing, and amount of Awards)
granted to Key Employees who are officers or directors for purposes of Section
16(b) of the Exchange Act; or (ii) its authority pursuant to Section 8 to amend
the Plan.

Section 5. Grants of Awards; Shares Available for Award

(a) The Committee may, from time to time, grant Awards to one or more Key
Employees; provided, however, that:


111


(i) subject to any adjustment pursuant to Section 8, the aggregate number
is of Shares available with respect to which Awards may be granted under the
Plan shall be equal to the sum of (A) 230,000 and (B) any Shares available for
future awards under the Scotsman Holdings, Inc. 1997 Employee Stock Option Plan
(the "1997 Plan") as of the Effective Date; and (C) any Shares that are
represented under the 1997 Plan which are forfeited, expire or are cancelled
without delivery of shares or which result in the forfeiture of shares back to
the Company;

(ii) to the extent that any Shares covered by an Award granted under the
Plan, or to which any Award relates, are forfeited, or if an Award otherwise
terminates, expires or is canceled prior to the delivery of all of the Shares or
of other consideration issuable or payable pursuant to such Award, then the
number of Shares counted against the number of Shares available under the Plan
in connection with the grant of such Award, to the extent of any such
forfeiture, termination, expiration or cancellation, shall be available for
granting of Awards under the Plan;

(iii) Shares which have been issued, or any other shares of the capital
stock of the Company, which a Participant tenders to the Company in satisfaction
of income and payroll tax withholding obligations or in satisfaction of the
exercise price of any Award shall be available for granting of Awards under the
Plan;

(iv) notwithstanding anything herein to the contrary, the Committee may
limit the application of Sections 5(a)(ii) and 5(a)(iii) in any manner that it
considers necessary or appropriate to ensure that the Plan complies with the
requirements of Rule 16b-3 under the Exchange Act or any successor provision;
and

(v) notwithstanding anything herein to the contrary, any Shares ceasing to
be subject to an Award due to the exercise of an Award shall no longer be
available for granting of Awards under the Plan.

(b) For purpose of this Section 5, any Shares delivered by the Company
pursuant to an Award may consist, in whole or in part, of authorized and
unissued Shares or of treasury shares. In determining the size of any Award, the
Committee may take into account a Participant's responsibility level,
performance, potential, cash, compensation level, the Fair Market Value of the
Shares at the time of the Award and such other considerations as it deems
appropriate.

Section 6. Eligibility

Any Key Employee, including any executive officer or employee-director of
the Company or any Affiliate, who is not a member of the Committee and who, in
the opinion of the Committee, contributes to the continued growth, development
and financial success of the Company or an Affiliate shall be eligible to be
designated as a Participant.

Section 7. Awards

(a) Type of Options. The Committee is hereby authorized to grant Awards to

112


Participants in the form of either Non-Qualified Stock Options or Incentive
Stock Options with the terms and conditions set forth in this Section 7 and with
such additional terms and conditions, in either case not inconsistent with the
provisions of the Plan, as the Committee shall determine.

(b) Limitations on Incentive Stock Options.

(i) In the event the Committee grants Incentive Stock Options, the
aggregate Fair Market Value (determined at the time the Incentive Stock Options
are granted) of the Shares underlying any such Incentive Stock Options, together
with the shares underlying any incentive stock options (as defined in Section
422 of the Code) under any other plans of the Company or any Affiliate, which
shall be first exercisable by any one Participant shall not, during any calendar
year, exceed $100,000 or such other limitation as may be provided in the Code.

(ii) The grant of Incentive Stock options hereunder shall be subject to
guidelines adopted by the Committee with respect to the timing and size of
Incentive Stock Options.

(iii) The terms of any Incentive Stock Option arranged under the Plan shall
comply in all respects with the provisions of Section 422 of the Code, or any
successor provision thereto, and any regulations promulgated thereunder.

(c) Exercise Price. The exercise price per Share purchasable under an
Option shall be determined by the Committee; provided, however, that in the case
of an Incentive Stock Option, such exercise price shall not be less than the
Fair Market Value of a Share on the date of a grant of the Option (or, if the
Committee so determines, in the case of any Option granted in tandem with or in
substitution for another Award or any outstanding award granted under any other
plan of the Company, on the date of grant of such other Award or award).

(d) Option Term. The term of each Option shall be fixed by the Committee;
provided, however, that in no event shall the term of an Incentive Stock Option
exceed a period of ten years from the date of its grant.

(e) Exercisability and Method of Exercise. Except for such limitations as
may be set forth herein, an Option shall become exercisable in such manner and
within such period of periods and in such installments as shall be determined by
the Committee and set forth in the Award Agreement evidencing the Option. The
Committee also shall determine the method or methods by which, and the form or
forms in which, payment of the exercise price with respect to any Option may be
made or deemed to have been made.

(f) Code Section 162(m) Requirements. The Committee in its sole discretion
shall determine whether Awards made pursuant to the Plan shall be designed to
meet the requirements of performance-based compensation within the meaning of
Section 162(m) of the Code and any regulations issued thereunder.

(g) Termination of Employment. The Agreement relating to an Award will set

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forth provisions governing the disposition of an Award in the event of the
Retirement, Disability, death or other termination of a Participant's
employment.

(h) Election to Recognize Income. If a Participant makes an election in a
timely manner pursuant to Section 83(b) of the Code to recognize income for tax
purposes when an Award is first made, the Participant shall notify the Company
within ten days of the making of such election.

(i) General.

(i) Award Agreements. Each Award granted under the Plan shall be evidence
by an award Agreement in such form as shall have been approved by the Committee.

(ii) Awards May Be Granted Separately or Together. Awards may be granted
either alone or in addition to, in tandem with, or in substitution for any other
Award or any award granted under any other plan of the Company or any Affiliate.
Awards granted in addition to or in tandem with other Awards, or in addition to
or in tandem with awards granted under any other plan of the Company or any
Affiliates, may be granted either at the same time as or at a different time
from the grant of such other Awards or awards.

(iii) Limits on Transfer of Awards. Except as otherwise provided by the
Committee in its discretion, no Award, and no right under any such Award, shall
be assignable, alienable, saleable or transferable by a Participant otherwise
than by will or by the laws of descent and distribution or pursuant to a
qualified domestic relations order as defined in the Code or Title I of the
Employee Retirement Income Security Act of 1974, as amended; provided, however,
that if so determined by the Committee, a Participant may, in the manner
established by the Committee, designate a Beneficiary to exercise the rights of
the Participant, and to receive any property distributable with respect to any
Award upon the death of the Participant. Each Award, and each right under any
Award, shall be exercisable, during the Participant's lifetime, only by the
Participant, or, if permissible under applicable law, by the Participant's
guardian or legal representative. No Award and no right under any such Award,
may be pledged, alienated, attached or otherwise encumbered, and any purported
pledge, alienation, attachment or encumbrance thereof shall be void and
unenforceable against the Company or any Affiliate.

(iv) Share Certificates and Representation by Participants. All
certificates for Shares delivered under the Plan pursuant to any Award or the
exercise thereof shall be subject to such stop transfer orders and other
restrictions as the Committee may deem advisable under the Plan or the rules,
regulations and other requirements of the Commission, any stock exchange or
other market upon which such Shares or other securities are then listed or
traded, and any applicable federal or state securities laws, and the Committee
may cause a legend or legends to be inscribed upon any such certificate(s) to
make appropriate reference to such restrictions. The Committee may require each
Participant or other Person who acquires Shares or other securities under the
Plan to represent to the Company in writing that such Participant or other
Person is acquiring the Shares or other securities for investment and without a
view to the distribution thereof.

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Section 8. Amendment and Termination; Adjustments; Corrections

(a) Amendments to the Plan. The Committee may, at any time or from time to
time, amend, alter, suspend, discontinue or terminate the Plan in whole or in
part; provided, however, that no amendment, alteration, suspension,
discontinuation or termination of the Plan shall in any manner (except as
otherwise provided in this Section 8) adversely affect the rights of any
Participant under any Award granted and then outstanding under the Plan, without
the consent of the respective Participant; provided further, that any amendment
which under the requirements of applicable law or stock exchange or Nasdaq rule
or policy must be approved by the stockholders of the Company shall not be
effective unless and until such stockholder approval has been obtained in
compliance with such law, rule or policy. No termination or amendment of the
Plan may, without the consent of the Participant to whom an Award has been
granted, materially adversely affect the rights of such Participant under such
Award.

(b) Certain Adjustments of Awards.

(i) In the event the Company or any Affiliate shall assume outstanding
employee awards or the right or obligation to make such awards in connection
with the acquisition of another business or business entity, the Committee may
make such adjustments in the terms of Awards, not inconsistent with the terms of
the Plan, as it shall deem appropriate in order to achieve reasonable
comparability or other equitable relationship between the assumed awards and the
Awards granted under the Plan, as so adjusted.

(ii) In the event that the Committee shall determine that any dividend or
other distribution (whether in the form of cash, Shares, other securities or
other property), combination, repurchase or exchange of Shares or other
securities of the Company, or other similar corporate transaction, change in
applicable laws, regulations or financial accounting principles or other event
affects the Shares, such that an adjustment is determined by the Committee to be
appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan, then the
Committee may, in such manner as it may deem equitable, adjust any or all of:
(A) the number and type of Shares (or other securities or property) which
thereafter may be made the subject of Awards under the Plan; (B) the number and
type of Shares (or other securities or property) subject to outstanding Awards;
and (C) the grant, purchase or exercise price with respect to any Award, or, if
deemed appropriate, make provision for a cash payment to the holder of an
outstanding Award; provided, however, in each case, that with respect to Awards
of Incentive Stock Options, no such adjustment shall be authorized to the extent
that such adjustment would cause the Plan to violate Section 422(b)(1) of the
Code or any successor provision thereto; provided further, that the number of
Shares subject to any Award denominated in Shares shall always be a whole
number. The foregoing adjustments shall be determined by the Committee in its
sole discretion.

(c) Correction of Defects, Omissions and Inconsistencies. The Committee may
correct any defect, supply any omission or reconcile any inconsistency in any
Award or Award Agreement in the manner and to the extent it shall deem desirable
to carry out the purposes of the Plan.

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Section 9. General Provisions

(a) No Rights to Awards. No Key Employee, Participant or other Person shall
have any claim to be granted any Award under the Plan, and there is no
obligation for uniformity of treatment of Key Employees, Participants or holders
or Beneficiaries of Awards under the Plan. The terms and conditions of Awards
need not be the same with respect to each Participant.

(b) Withholding. No later than the date as of which an amount first becomes
includable in the gross income of a Participant for federal income tax purposes
with respect to any Award under the Plan, the Participant shall pay to the
Company, or make arrangements satisfactory to the Company regarding the payment
of, any federal, state, local or foreign taxes of any kind required by law to be
withheld with respect to such amount. Unless otherwise determined by the
Committee, withholding obligations arising with respect to Awards under the Plan
may be settled with Shares, including Shares that are received upon exercise of
the Award that gives rise to the withholding requirement. The obligations of the
Company under the Plan shall be conditioned on such payment or arrangements, and
the Company and any Affiliate shall, to the extent permitted by law, have the
right to deduct any such taxes from any payment otherwise due to the
Participant. The Committee may establish such procedures as it deems appropriate
for the settling of withholding obligations with Shares, including, without
limitation, the establishment of such procedures as may be necessary to satisfy
the requirements of Rule 16b-3.

(c) Acceleration. Except as otherwise provided hereunder, the Committee
may, in its discretion, accelerate the time at which an outstanding Award
granted hereunder may be exercised.

(d) No Right to Employment. The grant of an Award shall not be construed as
giving a Participant the right to be retained in the employ of the Company or
any Affiliate. Further, the Company or any Affiliate may at any time dismiss a
Participant from employment, free from any liability or any claim under the
Plan, unless otherwise expressly provided in the Plan or in any Award Agreement.

(e) Unfunded Status of the Plan. Unless otherwise determined by the
Committee, the Plan shall be unfunded and shall not create (or be construed to
create) a trust or a separate fund or funds. The Plan shall not establish any
fiduciary relationship between the Company and any Participant or other Person.
To the extent any Person holds any right by virtue of the grant of an Award
under the Plan, such right (unless otherwise determined by the Committee) shall
be no greater than the right of an unsecured general creditor of the Company.

(f) Government and Other Regulations. The obligation of the Company to make
payment of Awards in Shares or otherwise shall be subject to all applicable
laws, rules and regulations, and to such approvals by any government agencies as
may be required. If Shares awarded hereunder may in certain circumstances be
exempt from registration under the Securities Act of 1933, as amended, the
Company may restrict their transfer in such manner as it deems advisable to
ensure such exempt status.

(g) No Restriction on Right of Company to Effect Corporate Changes. The
Plan shall not affect in any way the right or power of the Company or its
stockholders to make or authorize any or all adjustments, recapitalizations,

116


reorganizations or other changes in the Company's capital structure or its
business, or any merger or consolidation of the Company, or any issue of stock
or options, warrants or rights to purchase stock or of bonds, debentures,
preferred or prior preference stocks whose rights are superior to or affect the
Shares or the rights thereof or which are convertible into or exchangeable for
the Shares, or dissolution or liquidation of the Company, or any sale or
transfer of all or any part of its assets or business, or any other corporate
act or proceeding, whether of a similar character or otherwise.

(h) Governing Law. The validity, construction and effect of the Plan, and
any rules and regulations to the Plan, shall be determined in accordance with
the laws of the State of Maryland exclusive of its conflicts of law provisions,
and applicable Federal law.

(i) Severability. If any provision of the Plan, any Award Agreement or any
Award is or becomes or is deemed to be invalid, illegal or unenforceable in any
jurisdiction, or as to any Person or Award, or would disqualify the Plan, any
Award Agreement or any Award under any law deemed applicable by the Committee,
such provision shall be construed or deemed amended to conform to applicable
laws, or, if it cannot be so construed or deemed amended without, in the
determination of the Committee, materially altering the intent of the Plan, the
Award Agreement or the Award, such provision shall be stricken as to such
jurisdiction, Person or Award, and the remainder of the Plan, such Award
Agreement and such Award shall remain in full force and effect.

(j) No Fractional Shares. No fractional Shares shall be issued or delivered
pursuant to the Plan, any Award Agreement or any Award, and the Committee shall
determine whether cash, other securities or other property shall be paid or
transferred in lieu of any fractional Shares, or whether such fractional Shares
or any rights thereto shall be canceled, terminate or otherwise eliminated.

(k) Headings. Headings are given to the sections and subsections of the
Plan solely as a convenience to facilitate reference. Such headings shall not be
deemed in any way material or relevant to the construction of interpretation of
the Plan or any provision thereof.









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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 Williams Scotsman, 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;




118




(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



119




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 Williams Scotsman, 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;





120





(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










121




Exhibit 32.1

Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002 for Gerard E. Holthaus, Chief
Executive Officer of the Company.

In connection with the annual Report of Williams Scotsman, Inc. (the
"Company") on Form 10-K for the year ending December 31, 2003 as filed with
the Securities and Exchange Commission on the date hereof (the "Report"),
I, Gerard E. Holthaus, Chief Executive Officer of the Company certify to my
knowledge, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or
15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and result of operations of the
Company.


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

March 25, 2004












122


Exhibit 32.2

Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002 for John C. Cantlin, Chief
Financial Officer of the Company.

In connection with the annual report of Williams Scotsman, Inc. (the
"Company") on Form 10-K for the year ended December 31, 2003 as filed with
the Securities and Exchange Commission on the date hereof (the "Report"),
I, John C. Cantlin, Chief Financial Officer of the Company certify to my
knowledge, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or
15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and result of operations of the
Company.


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

March 25, 2004



















123