GENERAL ELECTRIC CREDIT CORPORATION AND CONSOLIDATED AFFILIATES NOTES TO FINANCIAL STATEMENTS-(Continued) Experience of the Company has shown that a substantial portion of receivables will be paid prior to contractual maturity. Accordingly, the contractual maturities of receivables at December 31, 1975 shown in the immediately preceding table are not to be regarded as a forecast of future cash collections. During 1975 cash collections were $3,833.3 million ($2,016.1 million for the six months ended June 26, 1976) and the ratio of cash collections to average receivables for 1975 was 81.2%. Consumer and commercial and industrial transactions have taken a variety of forms, including time sales, revolving charge and credit, mortgages, installment loans, intermediate-term loans and leases. The Company's portfolio is composed of receivables, carried at the principal amount, on which charges are billed periodically and receivables acquired on a discount basis carried at gross book value which includes the finance charge. The annual rate of interest or finance charge on receivables outstanding, maturing after one year, ranges from 7% to, in some instances, 36%. Included in receivables are net lease receivables of $708.6 million at year end 1975 and $784.9 million at June 26, 1976. Net lease receivables include the remaining unpaid rentals plus residuals recognized to date, less principal and interest on notes and other instruments representing third party participation. Since the Company has no general obligation on notes and other instruments representing third party participation, such notes and other instruments have not been included in liabilities, but have been offset against the related receivables. The Company's share of rentals receivable is subordinate to the share of the other participants. The charge for participants' interest is deferred and amortized over the life of the lease against investment tax credits and other lease income. For statement purposes, unamortized participants' interest is netted against deferred income. The Company's interest in lease receivables is shown below: December 31, June 26, 1975 1976 (Amounts in millions) Total rentals receivable and recognized residual values................................................... $3,102.5 $3,342.3 Less participants' share of rentals................... 2,393.9 2,557.4 708.6 784.9 Deferred income.............................................. $(975.8) $(990.9) Less participants' unamortized interest.......... 1,078.5 1,120.9 Net............................................ 102.7 130.0 $ 811.3 $ 914.9 4. ALLOWANCE FOR LOSSES ON RECEIVABLESThe following table shows the activity in the allowance for losses on receivables from 1971 through 1975 and for the six months ended June 26, 1976: Additions charged (deductions Balance at Additions credited) to Balance at beginning of charged Accounts other end of Year ended period to earnings written off accounts period (Amounts in millions) December 31, 1971........................................................ $41.5 $40.4 $(22.8) $(2.9) $56.2 1972........................................................ 56.2 35.9 (21.6) (0.5) 70.0 1973........................................................ 70.0 28.1 (21.4) 76.7 1974........................................................ 76.7 45.9 (33.2) 3.3 92.7 1975........................................................ 92.7 85.9 (52.5) 126.1 Six months ended June26, 1976.......................................... 126.1 39.7 (21.1) 0.3 145.0 F-24 5. OTHER ASSETS at December 31, 1975 and June 26, 1976 are shown in the following table: December 31, June 26, 1975 1976 (Amounts in millions) Preferred stocks with mandatory redemption terms............................... $ 62.0 $ 62.0 Real estate properties acquired principally through foreclosure: Cost.................................................................................................... 26.7 45.0 Valuation allowance.................................................................. (8.3) (11.4) 18.4 33.6 --- Other assets and deferred charges............................................................ 37.9 42.2 Valuation allowance.................................................................. (8.2) (7.8) 29.7 34.4 - - $110.1 $130.0 6. NOTES PAYABLE at December 31, 1975 totaled $3,454.9 million, consisting of $3,200.5 million of senior debt and $254.4 million ($4.9 million due within one year) of subordinated debt. At June 26, 1976 notes payable totaled $3,610.3 million, consisting of $3,357.7 million of senior debt and $252.6 million (none due within one year) of subordinated debt. The composite interest rate was 6.74% during 1975 and 6.18% for the six months ended June 26, 1976. Notes payable within one year totaled $2,131.3 million at the end of 1975 and $2,058.2 million at June 26, 1976. The average daily balance was $2,011.9 million during 1975 and $2,053.5 million for the first six months of 1976. The January 3, 1975 balance of $2,321.1 million was the maximum balance for the year 1975 and the February 5, 1976 balance of $2,251.9 million was the maximum balance during the six months ended June 26, 1976. The average short-term interest rate, excluding the current portion of term notes, was 6.36% for the year 1975 and 5.30% for the six months ended June 26, 1976, representing total annualized short-term interest expense divided by the average daily balance. The December 31, 1975 and June 26, 1976 average interest rates for commercial paper were 5.58% and 5.43%, respectively, and for notes with trust departments of banks were 5.98% and 6.07%, respectively. Notes payable after one year were as follows: December 31, June 26, 1975 1976 (Amounts in millions) Senior: Notes(a)............................................................................................ $ 176.5 $ 203.0 6.625% notes, due 1977..................................................................... 75.0 75.0 7.125% notes, due 1978..................................................................... 75.0 75.0 4.625% notes, due 1978-82 ............................................................... 54.0 54.0 7.00% notes, due 1979....................................................................... 75.0 75.0 7.00% notes, due 1980....................................................................... 75.0 75.0 8.40% notes, due 1981....................................................................... 100.0 100.0 8.875% notes, due 1982..................................................................... 100.0 100.0 7.625% notes, due 1983-92 ............................................................... 50.0 50.0 8.65% notes, due 1984....................................................................... 100.0 100.0 8.60% notes, due 1985....................................................................... 125.0 125.0 8.25% notes, due 1986....................................................................... 200.0 Other notes, due 1977-90.................................................................. 68.6 67.5 Total senior................................................................................ 1,074.1 1,299.5 Subordinated: Notes, due 1978-79(b)..................................................................... 26.7 1.7 8.125% notes, due 1983-92 ............................................................... 75.0 75.0 8.75% notes, due 1986....................................................................... 28.0 4.75% notes, due 1987-88 ................................................................. 65.0 65.0 Other notes, due 1980-93.................................................................. 82.8 82.9 Total subordinated.................................................................... 249.5 252.6 Total notes payable after one year........................................... $1,323.6 $1,552.1 (a) These notes have a rolling 13-month maturity and bear interest based principally on the Company's 180-day open-market notes. (b) Prime interest rate plus premium of 3/8 of 1%. F-25 GENERAL ELECTRIC CREDIT CORPORATION AND CONSOLIDATED AFFILIATES NOTES TO FINANCIAL STATEMENTS-(Continued)