As a real estate investment trust (REIT), we generally are not subject to federal corporate income taxes on REIT taxable income that is distributed to shareholders. We are required to pay corporate income taxes on earnings of our wholly-owned Taxable REIT Subsidiaries (TRSs), which includes our Wood Products segment earnings and portions of our Timberlands and Real Estate & ENR segments' earnings.

The quarterly provision for income taxes is based on our current estimate of the annual effective tax rate and is adjusted for discrete taxable events that may occur during the quarter. Our 2019 estimated annual effective tax rate for our TRSs, excluding discrete items, is a 32.9 percent benefit. The estimated annual effective tax rate is a benefit due to a projected pretax loss at our TRSs and varies from the U.S. federal statutory tax rate of 21 percent, primarily due to state income tax benefits related to unitary state filings.

Significant discrete items excluded from the calculation of our effective tax rate include:

●	$109 million tax benefit related to the tax effects of the noncash pretax settlement charge recorded in connection with our U.S. pension plan. Refer to Note 7: Pension and Other Postretirement Benefit Plans for additional details.

●	$17 million tax expense related to the tax effects of an insurance recovery received in connection with prior product remediation efforts. Refer to Note 15: Product Remediation Recoveries, Net for additional details.