NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS – (Continued)
Purchase Price Allocation
The final purchase price allocation is as follows (in thousands):
Certain Verizon Data Center Assets
Cash and cash equivalents
Other current assets
Property, plant, and equipment
Intangible assets (1)
Total assets acquired
Accounts payable and accrued liabilities
Other current liabilities
Capital lease and other financing obligations
Deferred tax liabilities
Net assets acquired
The nature of the intangible assets acquired is customer relationships with an estimated useful life of 15 years. Included in this amount is a customer relationship intangible asset for Verizon totaling $245.3 million. Pursuant to the acquisition agreement, the Company formalized agreements to provide pre-existing space and services to Verizon at the acquired data centers.
The fair value of customer relationships was estimated by applying an income approach. The Company applied discount rates ranging from 7.7% to 12.2%, which reflected the nature of the assets as they relate to the risk and uncertainty of the estimated future operating cash flows. Other assumptions used to estimate the fair value of customer relationships include projected revenue growth, customer attrition rates, sales and marketing expenses and operating margins. The fair value measurements were based on significant inputs that are not observable in the market and thus represent Level 3 measurements as defined in the accounting standard for fair value measurements.
The fair value of property, plant and equipment was estimated by applying the cost approach, with the exception of land which was estimated by applying the market approach. The cost approach is to use the replacement or reproduction cost as an indicator of fair value. The assumptions of the cost approach include replacement cost new, physical deterioration, functional and economic obsolescence, economic useful life, remaining useful life, age and effective age.
Goodwill is attributable to the workforce of the acquired business and the projected revenue increase expected to arise from future customers after the Verizon Data Center Acquisition. Goodwill is expected to be deductible for U.S. tax purposes and is attributable to the Company's Americas region. For the three months ended September 30, 2018 and 2017, the Company's results of operations included the Verizon Data Center Acquisition's revenues of $133.3 million and $137.0 million, respectively, and net income from operations of $35.1 million and $29.2 million, respectively. For the nine months ended September 30, 2018 and 2017, Verizon Data Center Acquisition's revenues were $401.5 million and $223.7 million, respectively, and net income from operations were $105.2 million and $56.3 million, respectively.
Other 2017 Acquisitions
In addition to the Verizon Data Center Acquisition, the Company also acquired Itconic and Zenium's data center business during 2017. Acquisition costs incurred for these acquisitions during the three and nine months ended September 30, 2018 were not significant to the Company's condensed consolidated statements of operations.
On October 9, 2017, the Company completed the acquisition of Itconic for a cash purchase price of €220.5 million or $259.1 million at the exchange rate in effect on October 9, 2017. Itconic was a data center provider in Spain and Portugal, and also included CloudMas, an Itconic subsidiary which was focused on supporting enterprise adoption and use of cloud services. Itconic’s operating results have been reported in the EMEA region following the date of acquisition.