4. Income taxes

Our Provision for income taxes was $258 million and $239 million in the first quarters of 2017 and 2016, respectively. The increase was due to higher income before income taxes, partially offset by discrete tax items, which are primarily related to stock-based compensation. Our estimated annual effective tax rate is about 30 percent, which does not include discrete tax items. This differs from the 35 percent statutory corporate tax rate due to the effect of U.S. tax benefits and lower statutory tax rates applicable to our operations in many of the jurisdictions in which we operate. These lower non-U.S. tax rates are generally statutory in nature, without expiration and available to companies that operate in those taxing jurisdictions.

Provision for income taxes is based on the following:

	For Three Months Ended
	March 31,
	2017			2016
Taxes calculated using the estimated annual effective tax rate	$	382		$	281
Discrete tax items		(124	)		(42	)
Provision for income taxes	$	258		$	239

Estimated annual effective tax rate		30	%		30	%
Actual effective tax rate		21	%		25	%