Renewable Energy Infrastructure 28 BROOKFIELD ASSET MANAGEMENT  Renewable energy PP&E increased slightly to $16.6 billion during 2013. Acquisition and development activity added $1.6 billion  of assets during the year (2012 – $1.5 billion), which was offset by $551 million of depreciation, a $150 million fair value  reduction and a decrease of $798 million due to the impact of lower currency exchange rates on our Brazilian and Canadian  operations. We acquired additional hydroelectric facilities in Tennessee, New England and Brazil and completed the development of wind  energy facilities in Brazil. We also acquired the remaining 50% of a joint venture and commenced consolidating the PP&E  within the venture, which was previously included in investments.  In 2012 we acquired nearly 1,000 megawatts of renewable power facilities capacity through our institutional funds including two  large-scale hydroelectric portfolios valued at $1.4 billion.  We discuss fair value changes on pages 25 and 26. The key valuation metrics of our hydro and wind generating facilities at the end of 2013 and 2012 are summarized below. The  valuations are impacted primarily by the discount rate and long-term power prices. Discount rates are based on our after-tax cost  of capital and are adjusted to reflect whether revenues are subject to long-term contracts or spot market pricing. Projected cash  flows are based on in-place contracts and expected market prices for non-contracted power. Forward market prices are used for  the first four years, during which time there is adequate liquidity to permit appropriate price discovery, and thereafter prices are  determined using internal projections that reflect our view of future market capacity, cost of capital, costs of fuel for competing  forms of generation and competitive attributes of renewable energy. A 100 basis-point change in the discount and terminal  capitalization rates and a 5% change in long-term power prices will impact the value of our common equity by $1.8 billion and  $0.5 billion, respectively. Our generation facilities in Brazil are held under concessions and authorizations which have a fixed maturity date and  accordingly, we do not ascribe a terminal value to these assets under IFRS, although we believe that we will be able to renew  these concessions upon maturity. Infrastructure PP&E decreased slightly to $8.6 billion during 2013. During the year we sold our Pacific Northwest timberlands  and the associated production assets which reduced PP&E by $654 million after having increased by $3.4 billion during 2012.  Fair value changes increased the carrying values by $691 million during 2013 (2012 – $707 million), as discussed on pages  25 and 26. During 2012 we completed the acquisition of a UK regulated distribution business and a Chilean toll road which  contributed towards a $3.5 billion increase in PP&E. The decline in the exchange rates for the Australian and Brazilian currency  contributed to a $456 million decrease due to foreign currency translation. We revalue our infrastructure assets on an annual basis using discounted cash flow models, which includes estimates of  forecasted revenues, operating costs, maintenance and other capital expenditures. Discount rates are selected for each asset  giving consideration to the assets revenue streams and geography where they are located.  The key valuation metrics of our utilities, transport and energy operations are summarized below: Utilities Transport Energy Dec. 31, 2013 Dec. 31, 2012 Dec. 31, 2013 Dec. 31, 2012 Dec. 31, 2013 Dec. 31, 2012 Discount rate 8% – 13% 8% – 13% 11% – 12% 11% – 12% 15% – 16% 12% – 15% Terminal capitalization multiples  10x – 16x 9x – 17x 7x – 11x 8x – 11x 8x – 12x 7x – 8x Investment horizon (years)  10 – 20 10 – 20 10 – 11 10 – 11 10 – 11 10 – 11 United States Canada Brazil Dec. 31, 2013 Dec. 31, 2012 Dec. 31, 2013 Dec. 31, 2012 Dec. 31, 2013 Dec. 31, 2012 Discount rate Contracted  5.8% 5.2% 5.1% 4.7% 9.1% 8.6% Uncontracted  7.6% 7.0% 6.9% 6.5% 10.4% 9.9% Terminal capitalization rate  7.1% 7.0% 6.4% 6.5% n/a n/a Exit date  2033 2032 2033 2032 2029 2029