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Investment in leases, financing receivables, net
 6 Months Ended
Jun. 30, 2022
Investments, All Other Investments [Abstract]  
Receivables Investment in leases, financing receivables, net
In connection with the Maryland Live! Lease that became effective on December 29, 2021 and the Pennsylvania Live! Master Lease that became effective March 1, 2022, the Company recorded an Investment in leases, financing receivables, net, as the sale lease back transactions were accounted for as failed sale leasebacks. The following is a summary of the balances of the Company's Investment in leases, financing receivables, net.


June 30,
2022		December 31,
2021
(in thousands)
Minimum lease payments receivable$6,740,133 $4,012,937 
Estimated residual values of lease property (unguaranteed)940,885 601,947 
Total7,681,018 4,614,884 
Less: Unearned income(5,769,275)(3,400,988)
Less: Allowance for credit losses(41,104)(12,226)
Investment in leases - financing receivables, net$1,870,639 $1,201,670 


The present value of the net investment in the lease payment receivable and unguaranteed residual value at June 30, 2022 was $1,862.8 million and $48.9 million compared to $1,178.0 million and $35.9 million at December 31, 2021.

At June 30, 2022, minimum lease payments owed to us for each of the five succeeding years under the Company's financing receivables was as follows (in thousands):
Year ending December 31,Future Minimum Lease Payments
2022 (remainder of year)$63,605 
2023127,222 
2024129,286 
2025131,532 
2026133,816 
Thereafter6,154,672 
Total$6,740,133 

The Company follows ASC 326 “Credit Losses” (“ASC 326”), which requires that the Company measure and record current expected credit losses (“CECL”), the scope of which includes our Investment in leases - financing receivables, net, which do not include any unfunded commitments. The Company has elected to use an econometric default and loss rate model to estimate the allowance for credit losses, or CECL allowance. This model requires us to calculate and input lease and
property-specific credit and performance metrics which in conjunction with forward-looking economic forecasts, project estimated credit losses over the life of the lease. The Company then records a CECL allowance based on the expected loss rate multiplied by the outstanding investment in lease balance.

Expected losses within our cash flows are determined by estimating the probability of default (“PD”) and loss given default (“LGD”) of our Investment in leases - financing receivables, net. We have engaged a nationally recognized data analytics firm to assist us with estimating both the PD and LGD. The PD and LGD are estimated during the initial term of the leases. The PD and LGD estimates for the lease term were developed using current financial condition forecasts. The PD and LGD predictive model was developed using the average historical default rates and historical loss rates, respectively, of over 100,000 commercial real estate loans dating back to 1998 that have similar credit profiles or characteristics to the real estate underlying the Company's financing receivables. Management will monitor the credit risk related to its financing receivable by obtaining the rent coverage on the lease on a periodic basis. The Company also monitors legislative changes to assess whether it would have an impact on the underlying performance of its tenant. We are unable to use our historical data to estimate losses as the Company has no loss history to date on its lease portfolio. Our tenants were current on all of their rental obligations as of June 30, 2022 and December 31, 2021.

The rollforward of the allowance for credit losses for the Company's financing receivables is illustrated below (in thousands):

Maryland Live! LeasePennsylvania Live! Master LeaseTotal
Balance at December 31, 2021$12,226 $— $12,226 
Change in allowance(5,621)32,277 26,656 
Ending balance at March 31, 20226,605 32,277 38,882 
Change in allowance1,783 439 2,222 
Ending balance at June 30, 2022
$8,388 $32,716 $41,104 

The amortized cost basis of the Company's investment in leases, financing receivables by year of origination is shown below as of June 30, 2022 (in thousands):

Origination year
20222021Total
Investment in leases, financing receivables$691,674 $1,220,069 $1,911,743 
Allowance for credit losses(32,716)(8,388)(41,104)
Amortized cost basis at June 30, 2022
$658,958 $1,211,681 $1,870,639 
Allowance as a percentage of outstanding financing receivable(4.73)%(0.69)%(2.15)%

During the six months ended June 30, 2022, the Company received an updated earnings forecast from its tenant on the Maryland Live! Casino & Hotel operations for 2022. This resulted in an improved rent coverage ratio in its reserve calculation which led to a reduction in the Maryland Live! Lease reserve at June 30, 2022. The reason for the higher allowance for credit losses as a percentage of the outstanding investment in leases for the Pennsylvania Live! Master Lease compared to the Maryland Live! Lease is primarily due to the significantly higher rent coverage ratio on the Maryland Live! Lease compared to the Pennsylvania Live! Master Lease. Future changes in economic probability factors and earnings assumptions at the underlying facilities may result in non-cash provisions or recoveries in future periods that could materially impact our results of operations.