WLFC 2026 年第 3 季法說會：營收創新高與投資組合成長

威利斯租賃金融公司 (Willis Lease Finance Corporation) (NASDAQ: WLFC) 公布 2026 財年第三季季度營收達創紀錄的 2.463 億美元，主要受惠於租賃租金收入增加以及 8,910 萬美元的設備銷售。由於維修準備金收入與資產出售收益較去年同期下降，稅前盈餘同比下滑。

重點速覽

• 2026 財年第三季營收創下 2.463 億美元的新高紀錄。稅前盈餘為 1,880 萬美元，歸屬於普通股股東的淨利為 1,020 萬美元，稀釋後每股盈餘 (EPS) 為 0.47 美元。
• 調整後 EBITDA 為 1.009 億美元，今年累計（年初至今）營業現金流成長 14% 至 2.39 億美元。
• 在投資組合成長與平均租賃費率上升的推動下，租賃租金收入年增 10.2%，創下 8,440 萬美元的新高。平均利用率從 86% 下降至 83.2%。
• 管理資產規模 (AUM) 從 2026 財年第二季的約 44 億美元及 2025 財年第三季的 37 億美元增加至約 49 億美元。資產負債表內的投資組合帳面價值達到 33 億美元，年增 14.2%。
• 維修準備金收入從 7,610 萬美元降至 3,930 萬美元，主因是長期維修準備金認列金額從 2,950 萬美元減少至 260 萬美元。管理層強調，在收入認列之前，相關現金收取仍在持續進行。
• 董事會將季度股利提高 12.8% 至每股 0.15 美元，並將股票回購授權額度擴大至 2 億美元，期限至 2031 年 12 月 31 日。

核心財務數據

業務與營運表現

租賃與投資組合成長

包含營業租賃持有設備、維修權益、應收票據及銷售型租賃投資在內的資產負債表投資組合，其帳面價值成長至 33 億美元。該投資組合較 2025 財年第三季成長 14.2%，同時平均租賃費率從 1.04% 上升至 1.06%。

平均利用率從去年同期的 86% 下降至 83.2%。管理層表示，舊款、現有技術與現代化發動機平台的市場需求整體保持一致，且年內租賃費率總體維持穩定。

WLFC 在本季透過 WNG 交易取得 12 架商用客機與 13 台飛機發動機。管理層警示，隨著特定資產轉入 Willis Aviation Capital，近期資產負債表的部分成長可能會出現暫時性回落。

以金額計算，包括 LEAP、GTF 和 GEnx 平台在內的現代技術發動機約占投資組合的 60%，高於去年同期的 54%。

資產管理與第三方資本

Willis Aviation Capital 的規模在 2026 財年第三季突破 15 億美元。管理層表示，涵蓋資產負債表、合資企業與全權委託基金在內的廣義平台中，公司擁有約 30 億美元的可部署資本。

公司的一般目標是將開發的新業務機會約三分之一分配給合資企業、三分之一分配給黑石 (Blackstone) 基金、三分之一納入自身資產負債表。隨著多數初期基金種子資金挹注完成，管理層預計新增業務將對資產負債表成長產生更直接的影響。

根據管理層說法，年初至今的投資收益以及基金管理與諮詢費收入，相較於 2026 年平均資產負債表投資額，創造了 32% 的報酬率。

設備銷售與服務

設備銷售總額為 8,910 萬美元，主要反映透過 Willis Mitsui 合資企業出售的 5 架飛機，以及 2 台發動機與 1 個機身。交易利潤為 620 萬美元，毛利率為 7%。

在發動機與飛機存放及維修業務帶動下，維修服務收入大增 208.5% 至 1,120 萬美元。該部門毛利出現負 170 萬美元，不過管理層表示，公司間內部服務亦支持了自持有與受託管理資產的獲利能力，且會在合併報表中銷除。

WLFC 購買了馬來西亞新建 Willis 發動機維修中心所需的土地，這是其全球第三座、也是亞洲首座維修中心。公司亦推進了在南佛羅里達州的園區計畫，該園區將整合公司總部、零組件營運、維護與修復業務以及發動機存放設施。

管理層展望

管理層未提供正式的營收或獲利指引。公司將年初至今 28% 的有效稅率視為對 2026 全年稅率的最佳估計。第三季 38% 的稅率包含一筆與佛羅里達州稅法修正相關的約 60 萬美元一次性費用。

黑石基金擁有兩年的投資期，管理層預期將在該期限內妥善部署資本。部署節奏將取決於資產供應情況與價格，管理層並指出各季度間的收購步調可能分佈不均。

最新宣佈的每股 0.15 美元季度股利將於 2026 年 11 月 25 日發放給截至 2026 年 11 月 16 日登記在冊的股東。儘管董事會授權了最高 2 億美元的股票回購額度，但管理層表示目前尚無即刻進行回購的計畫。

風險與觀察重點

• 管理層指出，高油價、高利率與地緣政治風險是航空業面臨的壓力因素。
• 航空公司已討論停飛部分燃油效率較低的老舊飛機，不過管理層尚未觀察到退役數量有顯著增加。
• 由於飛行時數減少以及向現代化發動機過渡改變了投資組合結構，短期維修準備金收入有所下降。
• 長期維修準備金收入取決於租約到期與展延情況，導致認列時間點難以預測。第三季的租約展延量較前幾個季度高出約 10% 至 15%。
• 儘管營收強勁成長，第三季維修服務在毛利層面仍處於虧損狀態。
• 共有 3 台發動機發生減損，導致 450 萬美元的設備減記。

法人說明會問答焦點

發動機需求：管理層形容需求強勁，且舊型與新型發動機類型整體保持一致。個別平台各季度間可能有所波動，但平均租賃費率維持相對穩定。

資本部署：WLFC 計畫將新業務機會分配給合資企業、黑石基金與自身資產負債表。隨著基金種子注入階段大致完成，未來的業務開發應會更直接地促進資產負債表的成長。

維修準備金負債：負債上升部分原因在於收購的 WNG 資產附帶準備金。今年累計長期維修準備金提供的現金為 2,780 萬美元，去年同期則為 1,620 萬美元。當租期展延時，收入認列可能會遞延。

租賃結構：長短期租賃仍保持大致各半的比例。投資組合的平均租約期限約為兩年，不過長期合約超過該平均水準。

資本配置：管理層將比較買回普通股、折價回購可轉換債券以及收購額外航空資產的報酬率。債務回購將獨立於 2 億美元的股票回購授權之外。

資產價值：管理層表示，在更新年度估值時，預計評估市場價值與帳面價值之間的百分比差距不會出現重大改變，同時強調正式審查每年進行一次。

法人說明會完整逐字稿

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完整財報電話會議逐字稿

管理層陳述

Operator

We would like to remind you that during this conference call, management will be making forward-looking statements, including statements regarding our expectations related to financial guidance, outlook for the company and our expected investment and growth initiatives.

Please note these forward-looking statements are based on current expectations and assumptions with respect to risks and uncertainties.

These statements reflect WLFC's views only as of today. They should not be relied upon as representative of views as of any subsequent date, and WLFC undertakes no obligation to revise or publicly release the results of any revision to these forward-looking statements in the light of new information or future events.

These statements are subject to a variety of risks and uncertainties that could cause actual results to differ materially from expectations. For further discussion of the material risks and other important factors that could affect WLFC's financial results, please refer to its filings with the SEC, including, without limitation, WLFC's most recent quarterly reports on Form 10-Q, annual report on Form 10-K and other periodic reports, which are available on the Investor Relations section of WLFC's website at https://www.wlfc.global/investor-relations.

Austin Willis

Thank you, operator, and thank you all for joining us today to discuss Willis Lease Finance Corporation's Third Quarter 2026 Financial results.

On our call today, I'm joined by Scott Flaherty, our Chief Financial Officer. I'm pleased to announce another great quarter. We continue to deliver on our strategy to expand our platform with services, managed capital and balance sheet investment.

We grew our assets under management by 10% quarter-over-quarter and our on-balance sheet portfolio by 12% quarter-over-quarter. This was due in large part to the closing on the purchase of the WNG aircraft and engine leasing entities.

Our results reflect the strength of our core leasing business. As we add assets to the balance sheet, it has a clear, direct and positive impact to our earnings. By growing Willis Aviation Capital, we are investing in the future, driving long-term fees, carried interest and asset growth to run through our services businesses.

We continue to be selective in the types of transactions that we pursue. As we originate aircraft and engine investment opportunities, we allocate them across our different pools of capital, namely on our balance sheet and Willis Aviation Capital, which encompasses our 2 discretionary funds and our joint venture with Mitsui and CASC in China.

As we deploy capital into our different funds, we will see slower growth on our balance sheet for a period of time. Now that the seeding phase of our fund strategy is complete, we can focus more directly on building up our balance sheet, which you can see from our Q3 results reacts favorably to even modest amounts of growth.

In Q3, we took several meaningful steps forward. Beyond expanding our aircraft and engine portfolio, we announced plans to replicate our proven engine repair center model in Asia, building on the success of our operations in the U.K. and in the U.S.

We also advanced plans to expand our operations in South Florida with the acquisition of a new facility that will house and consolidate our parts business, WASI, and our MRO, WERC U.S., establish a new corporate headquarters and provide a controlled environment for storing and maintaining engines.

I will recap these updates in greater detail shortly. We are making these investments against the backdrop of strong underlying demand for our assets and services supported by persistent engine supply constraints and growing aftermarket maintenance requirements.

Financially, we ended the quarter with about $4.9 billion in assets under management, increasing this from roughly $3.7 billion in Q3 2025 and $4.4 billion in Q2 2026.

For the first time, we surpassed $3 billion in our on-balance sheet portfolio. For the quarter, we delivered earnings before tax of $19 million and adjusted EBITDA of $101 million. I'd also like to highlight our contribution margin, a key indicator of the strength of the leasing business.

Contribution margin is defined as lease rent revenue and interest income less interest expense and depreciation and amortization of assets held for lease. In Q3, it exceeded $25 million, representing 18% year-over-year growth and a record quarterly high.

This is driven largely by balance sheet growth, and it should be noted that some of this may be temporarily reversed as we take a selection of these assets we just purchased and move them from held for sale into Willis Aviation Capital.

Scott will provide more details in a few minutes. Before turning to our individual business segments, I'd like to spend a few minutes discussing market dynamics.

Fuel prices, high interest rates and geopolitical risks are challenging the aviation sector, yet we continue to see strong demand for our products and services. Having come back from a regional tour of Asia in late August, 2 things are clear. High fuel prices are influencing operators regionally and the growth that the region is experiencing is profound.

Based on our conversations with numerous airlines over the past few months, we aren't seeing a meaningful increase in retirements, but there is discussion about parking some aircraft. By and large, these are older, less fuel-efficient aircraft. You can see from our results that short-term maintenance reserves have decreased since April 2026.

This is partially driven by macro events that have resulted in less flying, but it is also a byproduct of modernizing our fleet, which is now nearly 60% modern technology like LEAP, GTF and GEnx engine platforms versus 54% 1 year ago.

Should high fuel prices and other factors continue to pressure airlines, we remain exceptionally well positioned to help provide liquidity to those airlines looking to shore up their balance sheets and to provide ConstantThrust-type solutions to airlines who would rather opt to lease in temporarily rather than pay expensive shop visits during times of tight liquidity.

Speaking of liquidity, we have a great deal of dry powder ready to deploy through our balance sheet and Willis Aviation Capital. Now let me turn to the Willis platform and our primary business segments, leasing, Willis Aviation Capital and Services.

Starting with leasing. Our leasing business is performing well as we have been focusing on reallocating assets to different pools of capital to execute our growth strategy across our balance sheet business and Willis Aviation Capital.

We saw solid utilization of our lease portfolio in Q3, averaging about 83%. In August, we announced the acquisition of 12 commercial aircraft and 13 aircraft engines.

This is a significant expansion of our portfolio that puts capital to work in assets fitting well within our existing business and reflects our continued focus on disciplined growth and long-term value creation.

Next, Willis Aviation Capital, or WAC, grew to over $1.5 billion in Q3 2026. As we stand today, we have roughly $1 billion of additional capital ready to deploy through our discretionary funds, which is in addition to the capital raised by our joint ventures and Willis Aviation Capital structure.

This liquidity, along with the undrawn revolver capacity and our low net leverage provides added flexibility that will allow us to execute our growth strategy. This model can meaningfully increase the scale of the Willis platform over time while generating additional asset management and services revenue. I'd like to point you to Slide 9 in our investor presentation, which shows our income from investments and fee-related earnings.

When you combine these 2 elements, you can see the return on equity that we generate by managing third-party capital is significant, and this is going to be a key driver for us as we grow. Finally, services.

With industry maintenance capacity constrained and shop visits taking longer, our services businesses continue to be a major strategic advantage and value creator for our own assets and those we manage. Just before our Q2 earnings call, we announced a long-term engine storage agreement with Pratt & Whitney to provide storage and lease return services for PW1100, PW1500, PW1900, PW4000 and V2500 engines. WLFC will support Pratt & Whitney's growing aftermarket storage requirements from its Florida, U.K. and Malaysia facilities.

Another exciting update from the third quarter was the purchase of land to build a new Willis Engine Repair Center, or WERC, in Malaysia.

This is our third WERC facility globally and our first in Asia. And like our facilities in Florida and the U.K., it will provide maintenance, repair and storage services for our engine portfolio and third-party assets.

Critically, this new facility allows us to get closer to our customers and partners across the Asia Pacific and will support our long-term growth across the region. As I mentioned earlier in my remarks, I recently spent 2 weeks traveling around Asia, meeting customers, partners and other stakeholders.

And a large takeaway was the level of activity and long-term confidence in aviation across the region. It's one of the world's fastest-growing aviation markets and as demand for engine maintenance continues to accelerate, we are confident that WERC in Malaysia will position Willis to capitalize on this long-term growth.

Our investment in the APAC region demonstrates the global scale of our ambition. And in Q3, we made similarly important investment in infrastructure here in South Florida with the purchase and sale agreement for a new campus that will bring our headquarters, spare parts business, maintenance and repair operations and engine storage together under one roof.

This is not only a reflection of our expanded operational footprint, but it will increase operational efficiency, promote faster decision-making process, support future customer demand and bring our people closer together.

South Florida has been an excellent home for our business, and we're proud to continue growing within the region. And to support further expansion of our global services platform, in September, we entered into a $35 million preferred stock purchase agreement with the Development Bank of Japan for our Series B preferred stock, taking us to $100 million total in Series B preferred stock.

This builds on our long-term partnership with DBJ and further diversifies the sources of capital to support growth. Finally, we recently announced an increase in our quarterly dividend to $0.15 per share, reflecting a 12.8% increase from our prior August distribution and our long-term confidence in our business.

We also announced that the Board has approved the renewal and increase of our share repurchase program under which the company may repurchase its common stock for an aggregate purchase price of up to $200 million through December 31, 2031.

While we do not have immediate plans to repurchase shares, we want the flexibility to act should the right opportunity present itself. As I've stated before, we view ourselves as a growth stock with numerous attractive opportunities to deploy capital. At the same time, we continue to evaluate ways to return capital to shareholders, including through accretive share repurchases that can deliver premium returns.

Overall, we have achieved another solid quarter, and we are confident in the progress we are making to scale our global platform, expand our portfolio and deliver long-term value for our shareholders.

With significant capital to deploy into attractive aviation assets and with strong demand across both our leasing and maintenance services, we believe WLFC is well positioned for the next phase of growth. With that, I would like to hand it over to Scott Flaherty, our CFO, to discuss our financial performance in greater depth.

Scott Flaherty

Thank you, Austin, and good morning, all. Q3 was a solid quarter for Willis Lease, producing multiple records for the business from core lease rent revenues through income received from our many investments.

As we focused the first half of the year on staging and seeding our funds and joint ventures, we have now shifted to growth across the platform. The third quarter's record $246.3 million of revenues produced $18.8 million of earnings before tax, or EBT, $10.2 million of net income attributable to common shareholders and $0.47 of diluted earnings per share, as well as $100.9 million of adjusted EBITDA.

Walking through the P&L, our quarterly top line was driven by record lease rent revenues of $84.4 million in the quarter. Lease rent revenues were up 10.2% year-over-year. Growth in lease rent revenues was driven by an increase in balance sheet portfolio, up 14.2% from Q3 2025, measured as equipment held for operating lease, maintenance rights, notes receivable and investment in sales-type leases, which at the end of the third quarter was $3.3 billion in book value.

Strength in lease rates as our average lease rate ticked up from 1.04% to 1.06% in the comparable year-over-year period, all of which was slightly offset by average utilization, which was down from 86% in Q3 of '25 to 83.2% in Q3 of '26.

Maintenance reserve revenues for the quarter were $39.3 million, down from $76.1 million in the prior comparable period. The majority of that decline was due to lower long-term maintenance reserves, which is associated with engines coming off long-term leases.

This was $2.6 million in the current quarter compared to $29.5 million as we only recognized long-term maintenance reserves on 3 engines in the third quarter of 2026. $36.8 million of these revenues were short-term maintenance reserves as compared to $46.6 million in the third quarter of 2025.

Short-term maintenance reserve revenues are a proxy for both the number of engines that we have on short-term lease conditions as well as the operating tempo of these engines. New tech engines, which make up a larger percentage of our portfolio, approximately 60% today, tend to be on long-term lease conditions.

So despite the fact that we receive maintenance reserve cash flows for the monthly utilization of these assets, we do not recognize the revenues generally until the end of lease. Looking at the long-term maintenance reserve cash receipts year-to-date 2026, we see that they are up 72% to $27.8 million compared to the first 9 months of 2025. Although this does not immediately hit our P&L, they provide significant cash flow to the business and are reflective of our growth in the new tech equipment.

Spare parts and equipment sales were $98.1 million in the quarter compared to $5.4 million in the comparable period in 2025. Spare parts sales were $9.1 million in Q3 ' 26, up 67.8% from $5.4 million in the comparable prior quarter. Gross margins on spare parts were 10%. Sales in the consolidated P&L do not reflect $3.5 million of intercompany sales that are transacted at cost and eliminated in consolidation, providing incremental value to the consolidated business and our lease portfolio.

Equipment sales in the third quarter of 2026 were $89.1 million, where there were no such sales in the prior comparable period. These Q3 2026 revenues primarily reflect the sale of 5 aircraft recently acquired through our Willis Mitsui joint venture, where the company effectively warehoused these assets to effect the sale.

Also included in these sales were 2 engines and 1 airframe. The trading profit on sale of this equipment was $6.2 million, representing a 7% gross margin. Gain on sale of lease equipment, a net revenue metric, was $5.5 million in the third quarter, resulting from the sale of 8 engines as well as other equipment compared to $16.1 million in the comparable prior period.

Q3 gains on sale represented a 17% gross margin on $32.1 million of gross sales. Gain on sale was lighter than the gains in the preceding quarter as Q2 was influenced by the seeding of our leasing fund portfolio. Maintenance services revenue, which represents engine and aircraft storage and repair service and revenues related to management of fixed-based operator services, increased by $7.6 million or 208.5% to $11.2 million in the third quarter of 2026.

This growth was predominantly related to growth in engine and aircraft storage and repair services. Gross margin was a negative $1.7 million for the quarter. Our maintenance services offerings enhance our ability to provide a differentiated offering and program solution to our customer base. Intercompany revenue for maintenance services are eliminated in consolidation and therefore, not reflected in our P&L but continue to increase the profitability of our owned and managed assets.

Management and advisory fees, the fees generated through our asset management efforts, were $4.5 million in the quarter, up 140%. On the expense side of the equation, depreciation and amortization expense increased by $2.7 million or 9% to $31.4 million in Q3 2026.

The increase is primarily due to an increase in the size of our lease portfolio and the timing of placing acquired engines on lease. Write-down of equipment was $4.5 million in the third quarter, reflecting the impairment of 3 engines.

These asset write-downs are generally associated with the evaluation of engines post lease return. G&A expenses decreased by $0.5 million to $48.7 million in the third quarter. The decrease was primarily driven by a reduction in personnel costs and expenses related to the ceased sustainable aviation fuel project, partially offset by increased outside professional and insurance costs.

Technical expense increased by $5.1 million to $13.5 million in the quarter as compared to $8.4 million in the prior comparable period due to an increased level of engine repair activity. Technical expense generally relates to unplanned maintenance, whereas engine performance restorations tend to be planned and capitalized events.

Net finance costs decreased $4.3 million or 11.7% to $32.8 million in the quarter. The decrease was primarily attributable to $2.4 million of lower costs associated with debt extinguishment as we had effectively completed the paydown of our WEST VII financing and a lower overall weighted average cost of debt capital, slightly offset by increased total leverage.

Income from operations was $11.5 million compared to $38 million in the prior comparable period. Income from investments was $7.3 million, up $2.1 million or 41% from the prior period. This income was driven by growth contributions from our Willis Mitsui joint venture as well as our other asset management businesses and slightly offset by declines through our smaller China-based joint venture.

When we analyze our year-to-date income from investments and fund management and advisory fees and compare that to our 2026 average balance sheet investments, we can see that these initiatives have generated a 32% ROI.

Earnings before tax, or EBT, of $18.8 million for the quarter as compared to EBT of $43.2 million for the prior comparable period. Income tax expense was $7.1 million for the quarter, reflecting a 38% effective tax rate. Our third quarter effective tax rate includes a onetime charge of approximately $0.6 million or 3 percentage points, reflecting the impact of Florida's 2026 legislative decision not to adopt certain federal tax law changes under the One Big Beautiful Bill and the resulting updates to our current and deferred tax estimates.

As this adjustment relates to prior year tax positions, we do not expect it to recur. We would expect that our year-to-date 28% ETR to be the best estimate for a full year ETR. The company produced $10.2 million of net income attributable to common shareholders, which factors in GAAP taxes, net income attributable to our noncontrolling interest and the cost of our preferred equity.

Diluted weighted average income per share was $0.47 in the third quarter of 2026. Adjusted EBITDA for the third quarter of 2026 was $100.9 million. We believe that our adjusted EBITDA reflects the normalized cash flow generation capability of the Willis enterprise. Our adjusted EBITDA makes adjustments to our net income attributable to common shareholders for income tax expense, interest expense, preferred stock dividends and costs, the loss on debt extinguishment, depreciation and amortization expense, stock-based compensation expense, write-down of equipment, acquisition financing and divestitures-related expenses and other discrete gains and expenses.

Net cash provided by operating activities year-to-date was $239 million, up 14% compared to Q3 year-to-date 2025. Fluxes with the prior period predominantly related to changes in net income, net of tax effects, the cash tax effects, losses on debt extinguishment, the noncash effects of impairment on equipment, the prior year gain on sale of our WAML business to Willis Mitsui and a period-over-period $44 million increase in cash provided by changes in assets and liabilities.

On the financing and capital structure side of the business, the company, in July, effected a 3-for-1 common stock split effective July 21, 2026, to provide for more liquidity in our common shares.

On September 29, we closed a private placement of $35 million of Series B Preferred stock with our partner, the Development Bank of Japan, increasing their par investment in our preferred shares to $100 million.

The incremental $35 million investment carries an 8.09% dividend. On October 28, the Board of Directors approved the expansion and extension of our share repurchase program. The program was increased to $200 million in total size and extended through December 31, 2031.

In August, we paid our ninth consecutive regular quarterly dividend, which was $0.133 per share. Subsequent to quarter end, our Board of Directors has declared our 10th consecutive recurring quarterly dividend at a rate of $0.15 per share, reflecting a 12.8% increase from our prior dividend.

This dividend will be payable on November 25 to holders at November 16, 2026.

Our recurring dividend provides shareholders with a moderate current cash yield on their investment while not degrading the strong cash flow of our business and speaks to the health of the business and its underlying cash flow generation.

With respect to leverage, as defined as total debt obligations, net of cash and restricted cash to equity, inclusive of preferred stock, our leverage was 2.88x at the end of the third quarter of 2026.

Our leverage and capital availability across the entire Willis platform provides us the flexibility to access market opportunities as they become available. With that, I will hand the call back to Austin.

Austin Willis

Thank you, Scott. As you can see, we are delivering on our strategy to supplement our on-balance sheet leasing business with asset management. While this strategy moderates on-balance sheet growth as we deploy third-party capital, it is consistent with our long-term strategy, and we expect it to ultimately deliver premium returns. With that, I'd like to open up the call for Q&A.

Operator

[Operator Instructions] We'll take our first question from Angelina Zhao with Deutsche Bank.

分析師問答

Yongqi Zhao

This is Angelina Zhao on for Shannon. So my first question is this quarter saw a solid increase in lease revenue. What are you seeing in terms of demand across your engine portfolio by engine types?

Austin Willis

Thanks, Angelina. We're seeing pretty consistent demand across our portfolio, both in the legacy or current tech as well as the more modern tech.

We generally don't break it down engine by engine. But I can tell you that it still remains robust. There's always fluctuations. You might have a 5B or a 7B high one quarter and a little bit lower the next quarter, and the same goes for GTF or LEAPs.

So we continue to see fluctuations, but demand remains pretty consistent. Lease rates have remained on average pretty flat for the majority of the year for most of the engine types. So some going up a little bit and some going down a little bit.

Yongqi Zhao

Got it. And I have another question. So you called out focusing on growing the Willis platform, including your balance sheet.

And with remaining capital available across the Liberty Mutual and Blackstone strategies, how should we think about the pace of deployment from here and the mix of incremental asset growth between the balance sheet and the managed third-party capital?

Austin Willis

Sure. So we have in round terms, about $3 billion in capital that we can deploy or dry powder, so to speak.

We tend to think about our origination opportunities in terms of 1/3, 1/3, 1/3. We try to allocate about 1/3 between our joint ventures, 1/3 between our fund with Blackstone and 1/3 on balance sheet. The first half of the year, we really focused on seeding the Blackstone and Liberty Mutual funds.

So that was both trying to originate from the market, but also taking assets from our own balance sheet and putting them into those funds. So that slowed our pace of growth on balance sheet somewhat while we did that. We've done the majority of that seeding now. So as we originate, it's going to have a more direct impact to our on-balance sheet growth as we also grow the other pockets of capital as well. And that's sort of what I was trying to allude to in my prepared remarks.

Operator

We will take our next question from Will Waller with M3F.

William Waller

Great quarter operationally. From my perspective, this is probably one of the strongest quarters I've seen in the history of Willis. So great job.

On the maintenance reserve liability, in the press release, you discussed the timing of recognition of long-term maintenance revenue -- long-term maintenance reserve revenue. I track the build of that through the balance sheet liability, which increased to $201.7 million at September 30, up from $129.3 million at June 30.

I don't recall ever seeing a growth of that magnitude while only $2.6 million was recognized as long-term maintenance revenue during the quarter. Could you walk us through kind of the primary drivers of that liability increase and specifically, how much of that came from net collections of reimbursable reserves versus any amounts that were assumed in acquisitions or other portfolio activity?

Austin Willis

So I will just say one quick thing, and then I'll hand it over to Scott. We did have the highest number of lease extensions in the third quarter that we saw in over a year and higher than -- 2026 to date has been higher than 2025, but a little bit lower than '24.

And as you know, lease extensions do play a role in rev rec with respect to long-term reserves. So I wanted to quickly mention that, but I'll hand it over to Scott, who's going to be able to give you a more concise answer.

Scott Flaherty

Sure. Thanks, Austin. And thanks, Will. Thanks for the comments on the quarter. So yes, you're talking about a couple of things, Will, that have happened.

Obviously, we were acquisitive in the quarter. And Austin, I think, discussed the WNG transaction.

So some of the assets we brought over did come with reserves, right? So that's going to adjust -- that will have an effect on our pro forma balance sheet. But then -- and you'll see this when we come out later today with our 10-Q. Then if you just look on our cash flow statement and you look at the net cash provided by maintenance reserves, right? And the maintenance reserves are going to be associated with those long term -- with the long-term leases was $27.8 million compared to -- year-to-date compared to $16.2 million year-to-date in the prior year.

So what we are seeing, right, is that shift or the mix shift slightly to newer tech assets, which tend to be on a longer-term lease.

And whereas you might not see that in the P&L, long-term MR, you definitely see it on a cash basis.

William Waller

Okay. That makes sense. And Austin, you mentioned that the kind of lease extension rate is a bit elevated. Do you guys have any sense of what percentage of long-term leases are being extended that would then obviously defer the recognition of some of that maintenance reserve revenue on the long-term leases?

Austin Willis

I don't have those numbers handy right now. But I will say that, generally speaking, the lease extensions were, I'd say, 10% to 15% higher than they had been in previous quarters.

And I wouldn't attribute that to anything in particular other than just the normal fluctuations in our business.

William Waller

Yes, probably shows that there's good demand. Nobody wants to -- a lot of airlines don't want to return engines, which I'd say is probably a positive trend.

And then on the -- you kind of mentioned that a lot of these are new generation engines. I think you gave the statistic that 60% of your portfolio is now sort of the new tech engines. Is that by number or by dollar amount that's carried on your balance sheet of your equipment? Is it by number of engines or by dollar amount of engines that 60% is new tech engines?

Austin Willis

That's by dollar amount.

William Waller

Okay. Great quarter. And if there's no other questions, I might ask one more, but I'll drop back into the queue.

Operator

We'll take our next question from Buckley Capital.

Unknown Analyst

Congrats on the quarter. I think Will asked the majority of my questions. I guess I just want to make sure I understand sort of how much of that balance sheet increase related to maintenance reserves was acquisitions versus organic?

Scott Flaherty

So the amount of the increase that was related to cash flow for -- on a year-to-date, like I said, was $27.8 million, right? And the rest -- so on a year-to-date basis, so looking back and the rest was related to acquisition.

Unknown Analyst

Got it. And then any commentary you guys have on like the pacing of how the Blackstone portfolio will kind of build over time?

Austin Willis

Yes. I mean it's going to be consistent with our general origination. And I'll say we've been pretty judicious about what we bought over the past year. It's going to come down to where the market opportunities play out in 2027.

I think there's a view that there may be more opportunities to acquire attractive assets at good values. And should that manifest itself, and I think we'll deploy pretty quickly. But these also do tend to be lumpy. So I know that's not a very precise answer for you.

But we have -- I believe it's 2 years for the investment phase of the funds, and our expectation is to deploy the capital well inside of that.

Unknown Analyst

Got it. And then I guess just last thing, is there any commentary you can have on kind of when the balance sheet item will be released into the income statement? Like will that happen in the next 12 months? Or any specificity you can provide would be helpful.

Scott Flaherty

You're talking about the specific.

Unknown Analyst

Maintenance reserves...

Scott Flaherty

No, it's hard for us to do that for a lot of the reasons that we're talking about. The assets get extended on lease.

But it's just -- it's over time, it does get recognized, right? I mean it's really all timing, right? The cash flow is happening on a current basis.

Most of the engines that we have that are on long-term lease are going to be paying current MRs. So the cash flow is being realized in real time. But over time, the long-term MR will be realized.

But it's really hard for us to say exactly when it is because the various terms of the lease. We look at our average portfolio is approximately 2 years, but the longer-term leases are obviously longer than that, and they'll be realized over that period.

Operator

[Operator Instructions] We'll go back to Will Waller with M3F.

William Waller

Yes. As it relates to the $200 million share repurchase authorization, when you look at the convertible debt, how do you look at buying back common stock versus potentially buying back that convertible debt? And would that -- if you did go back into the markets and buy some of the debt that you recently issued, would that go against that repurchase authorization that you just authorized? Or would that be something you could do outside of that?

Scott Flaherty

Yes. So good question. It's 2 different things, right? The convertible bond is not part of a share repurchase program.

So can we go out and buy debt in the open market and retire at a discount? Yes, we can. And that would not go against the $200 million program that we have on the share repurchase side.

But as always, we kind of look where we get the most bang for the buck for how we spend our dollars and how we allocate our capital. And does it make sense to buy a share back or does it make sense to buy debt back in the open market? I mean, we've done all of these things in the past or does it make sense to put the next dollar into a new asset?

We kind of evaluate all these things on a case-by-case basis to where we're going to generate the best returns for the business.

William Waller

Okay. That makes sense. And then I think at the end of last year, you had about appraisals were kind of showing the current market value of engines. I think we're about $700 million above what was -- what they're carried out on the balance sheet.

Does it feel like to you guys, and I know you only get appraisals done once a year, I think, on those, but with all the changes that have gone on with your portfolio with sales and so on, do you have any sense of what that gain might be today, the unrealized gain?

Scott Flaherty

Sure. Yes. So well, as you know, we do this once a year. So -- and definitely, I want to encourage you to stay tuned for when we do it, when we tell you next year.

But I wouldn't expect there to be any material difference in kind of percentages, right? We haven't seen material movements. And our portfolio is material enough that it doesn't change over any specific quarter. So I would expect to have consistent percentages that we've had in the past there.

William Waller

Great. That's good to hear. And it seems like the stock trades at such a discount to sort of what the intrinsic value of the equity and the value of the engines you have that would make great sense if you buy back stock or buy back some of the debt.

So glad to see the authorization and hope to see that you act on it. And then one last question, just kind of circling back to the topic I asked about before on long-term maintenance revenues and so on. Do you know roughly what percentage of your leases are long term versus short term? I know historically, it's kind of 50-50, but just kind of curious what that is these days.

Austin Willis

Yes. That really hasn't changed very much, Will. It's still roughly 50-50.

Operator

With no additional questions in the queue at this time, I'd like to turn the call back over to Austin Willis for any additional or closing remarks.

Austin Willis

Thank you, operator. We appreciate everybody giving us their time today, and we look forward to speaking to you again in the new year.

Operator

That will conclude today's call. We appreciate your participation.