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SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 Form 10-Q
 (MARK ONE)
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2007
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 FOR THE TRANSITION PERIOD FROM  TO .
 Commission File No. 333-75818
 Hanover Equipment Trust 2001B
  Delaware
(State or Other Jurisdiction of 
Incorporation or Organization)
    
    51-6523442
(I.R.S. Employer
Identification No.)c/o Wilmington Trust Company 
Rodney Square North 
1100 North Market Street 
Wilmington, Delaware
(Address of Principal Executive Offices)
    
    19890
(Zip Code)
 
 þ o
  o o þ
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TABLE OF CONTENTS
 PagePART I. FINANCIAL INFORMATION
    
    
    3Item 1. Financial Statements
    
    
    3Condensed Balance Sheets
    
    
    3Condensed Statements of Operations
    
    
    4Condensed Statements of Cash Flows
    
    
    5Notes to Condensed Financial Statements
    
    
    6Item 2. Managements Discussion and Analysis of Financial Condition and Results of
Operations
    
    
    10Item 3. Quantitative and Qualitative Disclosures about Market Risk
    
    
    15Item 4. Controls and Procedures
    
    
    15PART II. OTHER INFORMATION
    
    
    16Item 1A. Risk Factors
    
    
    16Item 6. Exhibits
    
    
    16SIGNATURES
    
    
    17Certification Pursuant to Rule 13a-14(a)Certification Pursuant to Section 1350
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PART I. FINANCIAL INFORMATION
 
 Item 1. Financial Statements
  
 
 June 30,
    
    
    December 31,2007
    
    
    2006(unaudited)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    
    
    
    $
    Accounts receivablerents
    
    
    7,429
    
    
    
    7,438Total current assets
    
    
    7,429
    
    
    
    7,438Rental equipment
    
    
    257,750
    
    
    
    257,750Total assets
    
    $
    265,179
    
    
    $
    265,188LIABILITIES AND CERTIFICATE HOLDERS EQUITYCurrent liabilities:Accrued liabilities
    
    $
    48
    
    
    $
    54Interest payable
    
    
    7,292
    
    
    
    7,292Equity certificate yield payable
    
    
    89
    
    
    
    92Total current liabilities
    
    
    7,429
    
    
    
    7,438Notes payable
    
    
    250,000
    
    
    
    250,000Total liabilities
    
    
    257,429
    
    
    
    257,438Commitments and contingencies (Note 5)Certificate holders equity:Equity certificates
    
    
    7,750
    
    
    
    7,750Accumulated trust earnings
    
    
    
    
    
    
    Certificate holders equity
    
    
    7,750
    
    
    
    7,750Total liabilities and certificate holders
equity
    
    $
    265,179
    
    
    $
    265,188
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Three Months Ended
    
    
    Six Months EndedJune 30,
    
    
    June 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Rental revenue
    
    $
    5,753
    
    
    $
    5,752
    
    
    $
    11,514
    
    
    $
    11,492Interest expense on rental
equipment
    
    
    5,469
    
    
    
    5,469
    
    
    
    10,938
    
    
    
    10,938Excess rental revenue over
interest expense on rental
equipment
    
    
    284
    
    
    
    283
    
    
    
    576
    
    
    
    554Operating expense
    
    
    16
    
    
    
    22
    
    
    
    43
    
    
    
    43Net income
    
    $
    268
    
    
    $
    261
    
    
    $
    533
    
    
    $
    511
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Six Months EndedJune 30,2007
    
    
    2006Cash flows from operating activities:Net income
    
    $
    533
    
    
    $
    511Changes in assets and liabilitiesAccounts receivablerents
    
    
    9
    
    
    
    11Accrued liabilities
    
    
    (6
    )
    
    
    (13
    )Net cash provided by operating
activities
    
    
    536
    
    
    
    509Cash flows from investing activities:Net cash used in investing activities
    
    
    
    
    
    
    Cash flows from financing activities:Equity certificates yield paid
    
    
    (536
    )
    
    
    (509
    )Net cash used in financing activities
    
    
    (536
    )
    
    
    (509
    )Net change in cash and cash equivalents
    
    
    
    
    
    
    Cash and cash equivalents at beginning of
period
    
    
    
    
    
    
    Cash and cash equivalents at end of
period
    
    $
    
    
    
    $
    
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1. Basis of Presentation
  Business
  Proposed Merger by Hanover
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2. Rental Equipment
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3. Notes Payable
  Senior Secured Notesfixed rate of 8.75% due September 1, 2011,
interest payable semi-annually on March 1 and September 1
    
    $
    250,000
    PercentageAfter Sept 1, 2006
    
    
    104.375
    %After Sept 1, 2007
    
    
    102.917
    %After Sept 1, 2008
    
    
    101.458
    %After Sept 1, 2009
    
    
    100.000
    %
  4. Equity Certificates
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5. Commitments and Contingencies
  6. Recent Accounting Pronouncements
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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
  
    
    Hanover and HCLP operate in a highly competitive industry that includes competition among the various providers of contract compression services;
    
    reduced profit margins or the loss of market share resulting from competition, including pricing pressure in Hanovers and HCLPs businesses;
    
    the introduction of competing technologies by Hanover and HCLPs competitors;
    
    a prolonged substantial reduction in oil and natural gas prices, which would cause a decline in the demand for HCLPs compression and oil and natural
gas production equipment;
    
    governmental safety, health and environmental regulations which could require Hanover and HCLP to make significant expenditures;
    
    currency fluctuations (in countries including but not limited to Italy, Argentina and Venezuela) and changes in interest rates;
    
    adverse results in litigation or regulatory proceedings to which Hanover and/or HCLP is a party;
    
    inability of Hanover or HCLP to comply with the financial and other covenants in or defaults under, their debt agreements and the agreements related
to their compression equipment lease obligations which if not cured or waived could have a material adverse effect on Hanover and/or HCLP and the
decreased financial flexibility associated with Hanovers and HCLPs substantial debt;
    
    Hanovers and/or HCLPs inability to implement certain business objectives including international expansion;
    
    Hanovers and/or HCLPs inability to timely and cost-effectively execute projects in international operating environments, which includes certain
inherent risks in their international business activities including the following:
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
    
    unexpected changes in regulatory requirements,
    
    tariffs and other trade barriers that may restrict their ability to enter into new markets,
    
    governmental actions that result in the deprivation of contract rights,
    
    changes in political and economic conditions in the countries in which they operate, including
civil uprisings, riots, kidnappings and terrorist acts, particularly with respect to their
operations in Nigeria,
    
    potentially adverse tax consequences,
    
    restrictions on repatriation of earnings or expropriation of property without fair compensation,
    
    difficulties in establishing new international offices and risks inherent in establishing new
relationships in foreign countries, and
    
    the burden of complying with the various laws and regulations in the countries in which they
operate;
 
    
    Hanovers and/or HCLPs ability to manage business effectively will be weakened if key personnel are lost;
    
    liability for acquired facilities in the past which could subject Hanover and/or HCLP to future environmental liabilities;
    
    Hanovers or HCLPs inability to generate the substantial amount of capital needed to expand their compressor rental fleet and their complimentary
businesses;
    
    Hanover and HCLP have a substantial amount of debt, including under their compression equipment lease obligations, that could limit their ability to
fund future growth and operations and increase their exposure during adverse economic conditions and as a result of having a significant amount of
leverage as compared to their total capitalization which could result in a change made in their credit rating or other adverse consequences if
Hanover and HCLP do not decrease their leverage;
    
    Hanovers or HCLPs inability to renew its short-term leases of equipment with its customers so as to fully recoup the cost of the equipment;
    
    Hanover or HCLPs inability to generate the significant amount of cash needed to service their debt, to fund working capital and to pay their debts
when they become due;
    
    Hanovers or HCLPs future ability to refinance existing or incur additional indebtedness to fund Hanovers and HCLPs businesses;
    
    losses incurred by Hanover and HCLP due to inherent risks associated with their natural gas operations, including equipment defects, malfunctions and
failures and natural disasters;
    
    war, social unrest, terrorist attacks, and/or the responses thereto;
    
    Hanovers and/or HCLPs inability to successfully integrate acquired businesses;
    
    risks associated with any significant failure or malfunction of Hanover and HCLPs enterprise resource planning system;
    
    Hanovers and/or HCLPs inability to reduce debt relative to their total capitalization;
    
    changes in federal bankruptcy or tax laws, comparable state laws or accounting principles; and
    
    Hanovers ability to consummate the proposed merger with Universal Compression Holding, Inc.
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GENERAL
    Proposed Merger by Hanover
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RESULTS OF OPERATIONS
 THREE MONTHS ENDED JUNE 30, 2007 COMPARED TO THREE MONTHS ENDED JUNE 30, 2006
 Revenues
   Expenses
  SIX MONTHS ENDED JUNE 30, 2007 COMPARED TO SIX MONTHS ENDED JUNE 30, 2006
 Revenues
  Expenses
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LIQUIDITY AND CAPITAL RESOURCES
    RECENT ACCOUNTING PRONOUNCEMENTS
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Item 3. Quantitative and Qualitative Disclosures about Market Risk
  
 Item 4. Controls and Procedures
 Changes in Internal Control over Financial Reporting
  Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures
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PART II. OTHER INFORMATION
 
 Item 1A. Risk Factors
  
 Item 6: Exhibits
  31.1
    
    Certification pursuant to Rule 13a-14(a)/ 15d-14(a) of the Securities Exchange Act of 1934. *32.1
    
    Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
SarbanesOxley Act of 2002. **
 
 *
    
    Filed herewith.**
    
    Furnished herewith. 16




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SIGNATURES
   Hanover Equipment Trust 2001B
By: Wilmington Trust Company,
not in its individual capacity but
solely as Trustee for the Hanover
Equipment Trust 2001B
 /s/ DAVID A. VANASKEY, JR.Name:
    David A. Vanaskey, Jr.Title:
    Vice President  17




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EXHIBIT INDEX
 31.1
    
    Certification pursuant to Rule 13a-14(a)/ 15d-14(a) of the Securities Exchange Act of 1934. *32.1
    
    Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002. **
 
 *
    
    Filed herewith.**
    
    Furnished herewith. 18