Core Scientific, Inc./tx

4. PROPERTY, PLANT AND EQUIPMENT

The following table presents the composition of property, plant and equipment, net at the dates indicated (in thousands):

(1)Estimated useful life of improvements. Land is not depreciated.

Depreciation expense for the three and nine months ended September 30, 2026 was $17.9 million and $49.5 million, respectively, compared to $16.1 million and $54.3 million for the three and nine months ended September 30, 2025, respectively. During the nine months ended September 30, 2026, $646.5 million of construction in progress was placed into service, primarily reflecting the commissioning of colocation infrastructure at the Company’s data center facilities.

The following table presents the composition of property, plant and equipment, net that is subject to operating leases with customers and is included in the total property, plant and equipment, net presented above, at the dates indicated (in thousands):

Depreciation expense for assets leased to customers was $8.2 million and $15.7 million for the three and nine months ended September 30, 2026, respectively, andimmaterial for the three and nine months ended September 30, 2025, and is included in the total depreciation expense above.

During the nine months ended September 30, 2026, the Company recognized impairment charges of $266.5 million on its mining-related property, plant and equipment, consisting of $151.6 million related to mining equipment and $114.9 million related to mining infrastructure, all of which were recognized during the three months ended March 31, 2026. No impairment charges were recognized during the three months ended September 30, 2026 or during the three and nine months ended September 30, 2025.

The Company identified indicators of impairment of its mining equipment and mining infrastructure asset groups during the three months ended March 31, 2026, including declines in bitcoin prices, declines in bitcoin hashprice, and significant decreases in secondary market values for digital asset mining equipment. In accordance with ASC Topic 360-10, the Company performed a recoverability assessment of its mining-related asset groups. The undiscounted future cash flows for each asset group were less than its carrying amount, indicating the assets were not recoverable.

The Company measured the fair value of its mining equipment using a market approach based on observable secondary market pricing data for similar assets, classified as Level 2 within the fair value hierarchy. The Company measured the fair value of its mining infrastructure assets using an income approach based on a discounted cash flow analysis reflecting the estimated future cash flows a market participant would expect from operating the assets as mining hosting facilities, classified as Level 3 within the fair value hierarchy.

Assets Held for Sale

During the three months ended June 30, 2026, the Company classified certain undeployed mining equipment and certain electrical equipment that the Company no longer intends to use in its operations as held for sale. During the three months ended September 30, 2026, the Company classified additional mining, electrical and HPC equipment as held for sale. Upon classification, depreciation ceased and the assets were measured to fair value less cost to sell. Certain assets classified as held for sale during the three months ended June 30, 2026 were sold during the three months ended September 30, 2026 for proceeds approximating their carrying amounts, and no gain or loss was recognized. The measurement and subsequent remeasurement of assets held for sale resulted in a net loss of $1.5 million and $21.0 million for the three and nine months ended September 30, 2026, respectively, which was recognized within "Loss on remeasurement of assets held for sale, net" in the condensed consolidated statements of operations. The assets remaining classified as held for sale had a carrying value of $29.7 million, representing fair value less cost to sell as of September 30, 2026, and are included within "Other current assets" in the condensed consolidated balance sheets. The Company expects the sales to be completed within one year from the date of initial classification. See Note 9 — Fair Value Measurements for further detail on the fair value measurement of assets held for sale.