Acquisitions and development activity increased our investment properties by $7.4 billion. Acquisitions included logistics and  distribution properties in the UK and the southwestern U.S. The company also purchased, together with fund partners, a large  portfolio of office properties in Los Angeles. We sold 56 properties during the year, which decreased investment properties  by $1.9 billion and crystallized $244 million of valuation gains. The prior year included $107 million of losses on non-core  asset sales. Fair value changes increased carrying values by $1,031 million (2012 – $1,276 million), as discussed on page 23. The fair value of investment properties is generally determined by discounting the expected future cash flows of the properties,  generally over a term of 10 years using discount and terminal capitalization rates reflective of the characteristics, location  and market of each property. The key valuation metrics of our investment properties are presented in the following table on  a weighted average basis, disaggregated into the principal operations of our property segment for analysis purposes. The  valuations are most sensitive to changes in discount rates and terminal capitalization rates. It is important to note that changes  in cash flows and discount/terminal capitalization rates are usually inversely correlated as the circumstances that typically  give rise to increased interest rates (i.e., strong economic growth, inflation) usually give rise to increased cash flows although  timing may vary.  The following table presents the major components of the year-over-year variances for our property, plant and equipment  (“PP&E”), disaggregated by operating platform for analysis purposes: We carry PP&E in our renewable energy operations and a significant portion of the PP&E within our infrastructure operations  at fair value and revalue these assets at the end of each fiscal year. The following table presents the major contributors to the year-over-year variances for our investment properties: Investment Properties  Property, Plant and Equipment AS ATAND FOR THE YEARS ENDED DECEMBER 31 (MILLIONS) 2013 2012 Balance, beginning of year  $ 33,161 $ 28,366 Acquisitions and additions  7,365 4,508 Dispositions  (1,908) (1,136) Fair value changes  1,031 1,276 Foreign currency translation  (1,313) 147 Net increase  5,175 4,795 Balance, end of year  $ 38,336 $   33,161 Office Retail  Multifamily,  Industrial and Other Weighted Average AS AT DECEMBER 31 2013 2012 2013 2012 2013 2012 2013 2012 Discount rate  7.4% 7.6% 9.2% 8.7% 8.6% 8.8% 7.7% 7.8% Terminal capitalization rate  6.3% 6.5% 7.6% 7.5% 7.5% 8.1% 6.6% 6.8% Investment horizon (years)  11 11 10 10 10 10 11 11 Renewable Energy Infrastructure Property Other  Total AS ATAND FOR THE YEARS ENDED DECEMBER 31 (MILLIONS) 2013 2012 2013 2012 2013 2012 2013 2012 2013 2012 Balance, beginning of year  $16,532 $14,727 $ 8,736 $ 4,702 $ 2,968 $ 640 $ 2,912 $ 2,796 $31,148 $22,865 Acquisitions and additions  1,606 1,530 533 3,472 153 2,490 656 469 2,948 7,961 Dispositions  (28) (20) (654) (48) (16) — (336) (64) (1,034) (132) Fair value changes  (150) 830 691 707 166 4 (94) (58) 613 1,483 Depreciation  (551) (489) (286) (201) (130) (166) (217) (283) (1,184) (1,139) Foreign currency translation  (798) (46) (456) 104  (99) — (119) 52 (1,472) 110 Net increase (decrease)  79 1,805 (172) 4,034 74 2,328 (110) 116 (129) 8,283 Balance, end of year  $16,611 $16,532 $ 8,564 $ 8,736 $ 3,042 $ 2,968 $ 2,802 $ 2,912 $31,019 $31,148 2013 ANNUAL REPORT 27