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PROPERTY, PLANT AND EQUIPMENT | 12 Months Ended
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Dec. 31, 2018
Property, plant and equipment [abstract] |
PROPERTY, PLANT AND EQUIPMENT | PROPERTY, PLANT AND EQUIPMENT
US$ MILLIONS |  | Utility Assets |  | Transport Assets |  | Energy Assets |  | Data Infrastructure Assets |  | Total Assets
Gross Carrying Amount: |  |  |  |  |  |  |  |  |  |
Balance at January 1, 2017 |  | $ | 2,895 |  |  | $ | 2,362 |  |  | $ | 2,380 |  |  | $ | — |  |  | $ | 7,637 |
Additions, net of disposals |  | 349 |  |  | 104 |  |  | 95 |  |  | — |  |  | 548 |
Non-cash (disposals) additions |  | — |  |  | — |  |  | (14 | ) |  | — |  |  | (14 | )
Acquisitions through business combinations(1) |  | — |  |  | — |  |  | 100 |  |  | — |  |  | 100 |
Net foreign currency exchange differences |  | 227 |  |  | 191 |  |  | 68 |  |  | — |  |  | 486 |
Balance at December 31, 2017 |  | $ | 3,471 |  |  | $ | 2,657 |  |  | $ | 2,629 |  |  | $ | — |  |  | $ | 8,757 |
Additions, net of disposals |  | 441 |  |  | 77 |  |  | 140 |  |  | 4 |  |  | 662 |
Non-cash (disposals) additions |  | (19 | ) |  | (4 | ) |  | 6 |  |  | — |  |  | (17 | )
Acquisitions through business combinations(1) |  | 394 |  |  | — |  |  | 2,111 |  |  | 440 |  |  | 2,945 |
Net foreign currency exchange differences |  | (267 | ) |  | (245 | ) |  | (205 | ) |  | — |  |  | (717 | )
Balance at December 31, 2018 |  | $ | 4,020 |  |  | $ | 2,485 |  |  | $ | 4,681 |  |  | $ | 444 |  |  | $ | 11,630 |
Accumulated depreciation: |  |  |  |  |  |  |  |  |  |
Balance at January 1, 2017 |  | $ | (383 | ) |  | $ | (517 | ) |  | $ | (258 | ) |  | $ | — |  |  | $ | (1,158 | )
Depreciation expense |  | (118 | ) |  | (147 | ) |  | (117 | ) |  | — |  |  | (382 | )
Non-cash disposals |  | 19 |  |  | 21 |  |  | — |  |  | — |  |  | 40 |
Disposals |  | — |  |  | — |  |  | 5 |  |  | — |  |  | 5 |
Net foreign currency exchange differences |  | (28 | ) |  | (44 | ) |  | (13 | ) |  | — |  |  | (85 | )
Balance at December 31, 2017 |  | $ | (510 | ) |  | $ | (687 | ) |  | $ | (383 | ) |  | $ | — |  |  | $ | (1,580 | )
Depreciation expense |  | (149 | ) |  | (147 | ) |  | (134 | ) |  | — |  |  | (430 | )
Disposals |  | 7 |  |  | 22 |  |  | 8 |  |  | — |  |  | 37 |
Non-cash disposals |  | (2 | ) |  | — |  |  | (1 | ) |  | — |  |  | (3 | )
Net foreign currency exchange differences |  | 41 |  |  | 68 |  |  | 18 |  |  | — |  |  | 127 |
Balance at December 31, 2018 |  | $ | (613 | ) |  | $ | (744 | ) |  | $ | (492 | ) |  | $ | — |  |  | $ | (1,849 | )
Accumulated fair value adjustments: |  |  |  |  |  |  |  |  |  |
Balance at January 1, 2017 |  | $ | 1,043 |  |  | $ | 782 |  |  | $ | 352 |  |  | $ | — |  |  | $ | 2,177 |
Fair value adjustments |  | 137 |  |  | 24 |  |  | 257 |  |  | — |  |  | 418 |
Net foreign currency exchange differences |  | 78 |  |  | 67 |  |  | 20 |  |  | — |  |  | 165 |
Balance at December 31, 2017 |  | $ | 1,258 |  |  | $ | 873 |  |  | $ | 629 |  |  | $ | — |  |  | $ | 2,760 |
Fair value adjustments |  | 220 |  |  | 18 |  |  | 224 |  |  | — |  |  | 462 |
Net foreign currency exchange differences |  | (77 | ) |  | (81 | ) |  | (31 | ) |  | — |  |  | (189 | )
Balance at December 31, 2018 |  | $ | 1,401 |  |  | $ | 810 |  |  | $ | 822 |  |  | $ | — |  |  | $ | 3,033 |
Net book value: |  |  |  |  |  |  |  |  |  |
December 31, 2018 |  | $ | 4,808 |  |  | $ | 2,551 |  |  | $ | 5,011 |  |  | $ | 444 |  |  | $ | 12,814 |
December 31, 2017 |  | $ | 4,219 |  |  | $ | 2,843 |  |  | $ | 2,875 |  |  | $ | — |  |  | $ | 9,937 |
(1) | See Note 6, Acquisition of Businesses for additional information.
The partnership’s property, plant, and equipment is measured at fair value on a recurring basis with an effective date of revaluation for all asset classes of December 31, 2018 and 2017. Brookfield Infrastructure determined fair value under the income method. Assets under development were revalued where fair value could be reliably measured. The following table summarizes the valuation techniques and significant inputs for Brookfield Infrastructure’s property, plant and equipment assets, categorized by segment.
|  | Dec. 31, 2018 |  | Dec. 31, 2017
Segment |  | Valuation Technique |  | Discount Rate |  | Terminal Value Multiple |  | Investment Horizon |  | Valuation Technique |  | Discount Rate |  | Terminal Value Multiple |  | Investment Horizon
Utilities |  | Discounted cash flow model |  | 7% to 14% |  | 8x to 22x |  | 10 to 20 yrs |  | Discounted cash flow model |  | 7% to 12% |  | 7x to 21x |  | 10 to 20 yrs
Transport |  | Discounted cash flow model |  | 10% to 13% |  | 9x to 14x |  | 10 to 20 yrs |  | Discounted cash flow model |  | 10% to 15% |  | 9x to 14x |  | 10 to 20 yrs
Energy |  | Discounted cash flow model |  | 12% to 15% |  | 10x to 14x |  | 10 yrs |  | Discounted cash flow model |  | 12% to 15% |  | 8x to 13x |  | 10 yrs
Data Infrastructure |  | Discounted cash flow model |  | 13% to 15% |  | 10x to 11x |  | 10 yrs |  | N/A |  | N/A |  | N/A |  | N/A
An increase in the discount rate would lead to a decrease in the fair value of property, plant and equipment. Conversely, an increase to the terminal value multiple would increase the fair value of property, plant and equipment. Our partnership has classified all property, plant and equipment under level 3 of the fair value hierarchy. At December 31, 2018, Brookfield Infrastructure carried out an assessment of the fair value of its Utilities property, plant and equipment, resulting in a gain from revaluation of $220 million (2017: $137 million) which was recognized in revaluation surplus in the Consolidated Statements of Comprehensive Income. Key drivers behind the revaluation gain recorded include; growth in underlying cash flows at our U.K. regulated distribution business associated with new connections and smart meter adoptions made during the year and a modest increase in our terminal value assumption commensurate with observable market valuations for regulated utilities in mature geographies. At December 31, 2018, Brookfield Infrastructure carried out an assessment of the fair value of its Transport property, plant and equipment. A gain from revaluation of $18 million (2017: $24 million) was recognized in revaluation surplus in the Consolidated Statements of Comprehensive Income. Underlying valuation assumptions in the Transport segment remain relatively consistent with the prior year with the current year’s gain attributable to increasing cash flows. At December 31, 2018, Brookfield Infrastructure carried out an assessment of the fair value of its Energy property, plant and equipment. A gain from revaluation of $224 million (2017: $257 million) was recognized in revaluation surplus in the Consolidated Statements of Comprehensive Income. The revaluation gain was primarily associated with growth in underlying cash flows at our North American district energy operations associated with new customer connections during the last 12 months and a more robust pipeline of growth opportunities which resulted in an increase in our terminal value assumption to align our values with observable market transactions. The following table summarizes the carrying amount of property, plant and equipment that would have been recognized had assets been carried under the cost model.
US$ MILLIONS |  | Dec. 31, 2018 |  | Dec. 31, 2017
Utilities |  | $ | 3,407 |  |  | $ | 2,961 |
Transport |  | 1,741 |  |  | 1,970 |
Energy |  | 4,189 |  |  | 2,246 |
Data Infrastructure |  | 444 |  |  | — |

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