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United Rentals

UNITED RENTALS NORTH AMERICA INC filed this Form S-4/A on 11/02/2017
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Risks Relating to Our Indebtedness

Our significant indebtedness exposes us to various risks.

        At September 30, 2017, our total indebtedness was $8.4 billion. Our significant indebtedness could adversely affect our business, results of operations and financial condition in a number of ways by, among other things:

    increasing our vulnerability to, and limiting our flexibility to plan for, or react to, adverse economic, industry or competitive developments;

    making it more difficult to pay or refinance our debts as they become due during periods of adverse economic, financial market or industry conditions;

    requiring us to devote a substantial portion of our cash flow to debt service, reducing the funds available for other purposes, including funding working capital, capital expenditures, acquisitions, execution of our growth strategy and other general corporate purposes, or otherwise constraining our financial flexibility;

    restricting our ability to move operating cash flows to Holdings. URNA's payment capacity is restricted under the covenants in the indentures governing its outstanding indebtedness;

    affecting our ability to obtain additional financing for working capital, acquisitions or other purposes, particularly since substantially all of our assets are subject to security interests relating to existing indebtedness;

    decreasing our profitability or cash flow;

    causing us to be less able to take advantage of significant business opportunities, such as acquisition opportunities, and to react to changes in market or industry conditions;

    causing us to be disadvantaged compared to competitors with less debt and lower debt service requirements;

    resulting in a downgrade in our credit rating or the credit ratings of any of the indebtedness of our subsidiaries, which could increase the cost of further borrowings;

    requiring our debt to become due and payable upon a change in control; and

    limiting our ability to borrow additional monies in the future to fund working capital, capital expenditures and other general corporate purposes.

        A portion of our indebtedness bears interest at variable rates that are linked to changing market interest rates. As a result, an increase in market interest rates would increase our interest expense and our debt service obligations. At September 30, 2017, we had $1.1 billion of indebtedness that bears interest at variable rates, representing 13 percent of our total indebtedness.

To service our indebtedness, we will require a significant amount of cash and our ability to generate cash depends on many factors beyond our control.

        We depend on cash on hand and cash flows from operations to make scheduled debt payments. To a significant extent, our ability to do so is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control. We may not be able to generate sufficient cash flow from operations to repay our indebtedness when it becomes due and to meet our other cash needs. If we are unable to service our indebtedness and fund our operations, we will have to adopt an alternative strategy that may include:

    reducing or delaying capital expenditures;

    limiting our growth;