Net interest expense for the nine months ended September 30, 2017, was $42.6 million, up from $32.2 million in the prior-year period. Nearly half of this increase was due to a higher effective interest rate on our debt. An increase in average outstanding year-to-date borrowings, driven by acquisition-related payment activity and partially offset by improved operating performance this year, also contributed to the increase in net interest expense.
Equity Earnings from Real Estate Ventures
For the three and nine months ended September 30, 2017, we recognized equity earnings of $12.6 million and $32.7 million, respectively, as compared with $5.5 million and $27.7 million during the three and nine months ended September 30, 2016, respectively. Substantially all of the activity in each period was attributable to LaSalle; refer to the LaSalle segment results discussion for additional details.
Provision for Income Taxes
The provision for income taxes was $28.2 million and $57.3 million for the third quarter and first nine months of 2017, respectively, which represented an effective tax rate of 24.4% in both periods, consistent with the effective tax rate for the year ended December 31, 2016.
Net Income and Adjusted EBITDA
Net income attributable to common shareholders for the third quarter and first nine months of 2017 was $86.6 million and $175.6 million, respectively, compared with $48.0 million and $152.5 million in the respective prior-year periods. Net income margin attributable to common shareholders was 4.4% in the third quarter of 2017, up from 2.8% in the third quarter of 2016. Adjusted EBITDA was $167.9 million and $400.0 million for the third quarter and first nine months of 2017, respectively, up 31% and 6%, from the respective prior-year periods. Adjusted EBITDA margin, calculated on a fee-revenue basis, for the third quarter of 2017 was 10.3% in USD and local currency as compared with 8.8% for the prior-year quarter. Our results reflected the increased performance across all segments, with notable contributions from transactional businesses and LaSalle incentive fees, along with management initiatives to contain controllable expenses.
Segment Operating Results
We manage and report our operations as four business segments:
The three geographic regions of RES including:
(2) EMEA, and
(3) Asia Pacific;
(4) LaSalle, which offers investment management services on a global basis.
Each geographic region offers our full range of real estate services, including tenant representation and agency leasing, capital markets and hotels, property management, facility management, project and development services, and advisory, consulting and valuation services. We consider "property management" to be services provided to non-occupying property investors and "facility management" to be services provided to owner-occupiers. LaSalle provides investment management services to institutional investors and high-net-worth individuals.
For segment reporting, gross contract costs and Net non-cash MSR and mortgage banking derivative activity are both excluded from revenue in determining "fee revenue". Gross contract costs are excluded from operating expenses in determining "fee-based operating expenses." In addition, our measure of segment results also excludes Restructuring and acquisition charges.