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

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		—