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<TITLE>Filed by Bowne Pure Compliance</TITLE>
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<P style="font-size: 14pt" align="center"><B>UNITED STATES<BR>
SECURITIES AND EXCHANGE COMMISSION<BR>
<FONT
style="font-size: 12pt">Washington, D.C. 20549 </FONT></B>

<P style="font-size: 18pt" align="center"><B>FORM 8-K</B>

<P style="font-size: 12pt" align="center"><B>CURRENT REPORT<BR>
Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934</B>

<P style="font-size: 10pt" align="center"><B>Date of Report (Date of earliest event reported): December 24, 2008</B>

<P style="font-size: 24pt" align="center"><B>CRAY INC.<BR>
</B><FONT style="font-size: 10pt">(Exact name of registrant
as specified in its charter) </FONT>
<TABLE style="font-size: 10pt; text-align: center" cellspacing="0" cellpadding="0" width="100%" border="0">

 <TR>
  <TD width="32%">&nbsp;</TD>
  <TD width="1%">&nbsp;</TD>
  <TD width="33%">&nbsp;</TD>
  <TD width="1%">&nbsp;</TD>
  <TD width="32%">&nbsp;</TD>
 </TR>
 <TR valign="bottom">
  <TD style="border-bottom: #000000 1px solid"><B>Washington</B></TD>
  <TD>&nbsp;</TD>
  <TD style="border-bottom: #000000 1px solid"><B>0-26820</B></TD>
  <TD>&nbsp;</TD>
  <TD style="border-bottom: #000000 1px solid"><B>93-0962605</B></TD>
 </TR>
 <TR valign="top">
  <TD>(State or other Jurisdiction of Incorporation)</TD>
  <TD>&nbsp;</TD>
  <TD>(Commission File Number)</TD>
  <TD>&nbsp;</TD>
  <TD>(IRS Employer Identification No.)</TD>
 </TR>

</TABLE>
<TABLE style="font-size: 10pt; text-align: center" cellspacing="0" cellpadding="0" width="100%" border="0">

 <TR>
  <TD width="49%">&nbsp;</TD>
  <TD width="1%">&nbsp;</TD>
  <TD width="49%">&nbsp;</TD>
 </TR>
 <TR valign="bottom">
  <TD style="border-bottom: #000000 1px solid"><B>411 First Avenue South, Suite 600<BR>
Seattle, WA <BR>
</B></TD>
  <TD>&nbsp;</TD>
  <TD style="border-bottom: #000000 1px solid"><B>98104-2860&nbsp;</B></TD>
 </TR>
 <TR valign="top">
  <TD>(Address of Principal Executive Offices)</TD>
  <TD>&nbsp;</TD>
  <TD>(Zip Code)</TD>
 </TR>

</TABLE>


<P style="font-size: 10pt" align="center">Registrant&#8217;s telephone number, including area code: <B>(206)
701-2000</B><BR>
Registrant&#8217;s facsimile number, including area code: <B>(206)
701-2500</B>

<TABLE style="font-size: 10pt; text-align: center" cellspacing="0" cellpadding="0" width="30%" border="0">

 <TR>
  <TD width="100%">&nbsp;</TD>
 </TR>
 <TR>
  <TD style="border-bottom: #000000 1px solid" nowrap><B>None<BR>
</B></TD>
 </TR>
 <TR>
  <TD nowrap>(Former name or former address if changed since last report.)</TD>
 </TR>

</TABLE>


<P style="font-size: 10pt" align="left">Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

<P style="font-size: 10pt" align="left"><FONT face="Wingdings">o</FONT> Written communications pursuant to Rule 425
under the Securities Act (17 CFR 230.425)<BR>
<BR>
<FONT face="Wingdings">o</FONT> Soliciting material pursuant to Rule
14a-12 under the Exchange Act (17 CFR 240.14a-12)<BR>
<BR>
<FONT face="Wingdings">o</FONT> Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))<BR>
<BR>
<FONT
face="Wingdings">o</FONT> Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))<BR>


<DIV style="margin-top: 10pt; font-size: 1pt; width: 100%; border-bottom: black 1pt solid">&nbsp;</DIV>
<DIV style="font-size: 1pt; width: 100%; border-bottom: black 2pt solid">&nbsp;</DIV>
</DIV>

<P style="font-size: 10pt" align="center">

<P style="display: none; font-size: 10pt" align="center">1
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<TR>
    <TD width="7%"></TD>
    <TD width="1%"></TD>
    <TD></TD>
</TR>
<TR valign="top">
    <TD nowrap align="left"><B>Item&nbsp;2.02</B></TD>
    <TD>&nbsp;</TD>
    <TD><B>Results of Operations and Financial Condition</B></TD>
</TR>
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt; margin-left: 8%">On January&nbsp;5, 2009, we issued a press release announcing that in late 2008 the Oak
Ridge National Laboratory and the U.S. Department of Energy had accepted our Cray
XT5 petaflops system installed at Oak Ridge National Laboratory. This acceptance is
expected to contribute approximately $100&nbsp;million of revenue to our fourth quarter
2008 and 2008 annual results. The press release also reported the passage of our fourth milestone under our DARPA Phase III contract in December&nbsp;2008,
the goodwill impairment discussed under Item&nbsp;2.06 below and the repurchase of our
3.0% Convertible Senior Subordinated Notes described under Item&nbsp;8.01 below.
</DIV>

<DIV align="left" style="margin-top: 10pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; background: transparent; color: #000000">
<TR>
    <TD width="7%"></TD>
    <TD width="1%"></TD>
    <TD></TD>
</TR>
<TR valign="top">
    <TD nowrap align="left"><B>Item&nbsp;2.06</B></TD>
    <TD>&nbsp;</TD>
    <TD><B>Material Impairments</B></TD>
</TR>
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt; margin-left: 8%">On December&nbsp;29, 2008, we determined that we are required to record a non&#151;cash
charge of approximately $55.4&nbsp;million for impairment of our goodwill, representing
all of our recorded goodwill as of November&nbsp;30, 2008. Our recorded goodwill
resulted from our acquisitions of the Cray Research business unit assets in 2000 and
of the OctigaBay Systems Corporation in 2004.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt; margin-left: 8%">Under Statement of Financial Accounting Standards No.&nbsp;142, <I>Goodwill and Other
Intangible Assets </I>(&#147;FAS No.&nbsp;142), goodwill is not amortized but is tested for
impairment at least annually and more frequently if triggering events occur. We have
one operating segment and reporting unit. Based on the low market price for our
common stock in the fourth quarter of 2008, which resulted in a market
capitalization below the value of our net assets (approximate to shareholders&#146;
equity), we determined that an indicator of potential impairment was present and,
following the two-step process prescribed in FAS No.&nbsp;142, subsequently determined
that the total balance of goodwill as of November&nbsp;30, 2008, was impaired.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt; margin-left: 8%">This non-cash charge will have no effect on our cash balances or cash flow from
operating activities, nor any effect on ongoing operations. The charge will be
recorded in our financial results for the fourth quarter of 2008 and will result in
a net loss for the quarter and year. We expect to release our 2008 results in the
first quarter of 2009.
</DIV>

<DIV align="left" style="margin-top: 10pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; background: transparent; color: #000000">
<TR>
    <TD width="7%"></TD>
    <TD width="1%"></TD>
    <TD></TD>
</TR>
<TR valign="top">
    <TD nowrap align="left"><B>Item&nbsp;8.01</B></TD>
    <TD>&nbsp;</TD>
    <TD><B>Other Events</B></TD>
</TR>
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt; margin-left: 8%">On December&nbsp;24, 2008, we repurchased an additional $6,000,000 in principal amount of
our 3.0% Convertible Senior Subordinated Notes due 2024 (the &#147;Notes&#148;) at a price
equal to 89% of par value plus accrued interest. The holders of the Notes have the
right to put the Notes to us on December&nbsp;1, 2009. After beginning the fourth quarter
of 2008 with $80,000,000 of Notes outstanding, we now have an aggregate principal
amount of $27,727,000 of Notes outstanding.
</DIV>
<P align="center" style="font-size: 10pt">2
<P align="center" style="font-size: 10pt">&nbsp;

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<DIV align="left" style="margin-top: 10pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; background: transparent; color: #000000">
<TR>
    <TD width="7%"></TD>
    <TD width="1%"></TD>
    <TD></TD>
</TR>
<TR valign="top">
    <TD nowrap align="left"><B>Item&nbsp;9.01</B></TD>
    <TD>&nbsp;</TD>
    <TD><B>Financial Statements and Exhibits</B></TD>
</TR>
</TABLE>
</DIV>

<DIV style="margin-top: 10pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(d)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Exhibits</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 10pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">99.1</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Press Release of Cray Inc., dated January&nbsp;5, 2009, relating to
the following late 2008 actions: acceptance of the Cray XT5 petaflops system by
Oak Ridge National Laboratory and the U.S. Department of Energy, the passing of
our fourth milestone under our DARPA Phase III contract, our non-cash goodwill
impairment, and our repurchase of $6,000,000 principal amount of Notes.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt; text-indent: 4%">The information in Exhibit&nbsp;99.1 attached hereto is furnished and shall not be deemed &#147;filed&#148;
for purposes of Section&nbsp;18 of the Securities Exchange Act of 1934, as amended (the &#147;Exchange Act&#148;),
nor shall such information be deemed incorporated by reference in any filing under the Securities
Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific
reference in such filing.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 10pt"><B>SIGNATURES</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 10pt">Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant caused this
report to be signed on its behalf by the undersigned thereunto duly authorized.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 10pt">January&nbsp;5, 2009
</DIV>


<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">Cray Inc.<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">/s/ Kenneth W. Johnson
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">Kenneth W. Johnson&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">Senior Vice President and General Counsel&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>

<P align="center" style="font-size: 10pt">3
<P align="center" style="font-size: 10pt">&nbsp;

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Filed by Bowne Pure Compliance
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Date of Report (Date of earliest event reported): December 24, 2008
CRAY INC.
(Exact name of registrant
as specified in its charter)
Washington
0-26820
93-0962605
(State or other Jurisdiction of Incorporation)
(Commission File Number)
(IRS Employer Identification No.)
411 First Avenue South, Suite 600
Seattle, WA
98104-2860
(Address of Principal Executive Offices)
(Zip Code)
Registrant's telephone number, including area code:
(206)
701-2000
Registrant's facsimile number, including area code:
(206)
701-2500
None
(Former name or former address if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o
Written communications pursuant to Rule 425
under the Securities Act (17 CFR 230.425)
o
Soliciting material pursuant to Rule
14a-12 under the Exchange Act (17 CFR 240.14a-12)
o
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item 2.02
Results of Operations and Financial Condition
On January 5, 2009, we issued a press release announcing that in late 2008 the Oak
Ridge National Laboratory and the U.S. Department of Energy had accepted our Cray
XT5 petaflops system installed at Oak Ridge National Laboratory. This acceptance is
expected to contribute approximately $100 million of revenue to our fourth quarter
2008 and 2008 annual results. The press release also reported the passage of our fourth milestone under our DARPA Phase III contract in December 2008,
the goodwill impairment discussed under Item 2.06 below and the repurchase of our
3.0% Convertible Senior Subordinated Notes described under Item 8.01 below.
Item 2.06
Material Impairments
On December 29, 2008, we determined that we are required to record a non—cash
charge of approximately $55.4 million for impairment of our goodwill, representing
all of our recorded goodwill as of November 30, 2008. Our recorded goodwill
resulted from our acquisitions of the Cray Research business unit assets in 2000 and
of the OctigaBay Systems Corporation in 2004.
Under Statement of Financial Accounting Standards No. 142,
Goodwill and Other
Intangible Assets
("FAS No. 142), goodwill is not amortized but is tested for
impairment at least annually and more frequently if triggering events occur. We have
one operating segment and reporting unit. Based on the low market price for our
common stock in the fourth quarter of 2008, which resulted in a market
capitalization below the value of our net assets (approximate to shareholders'
equity), we determined that an indicator of potential impairment was present and,
following the two-step process prescribed in FAS No. 142, subsequently determined
that the total balance of goodwill as of November 30, 2008, was impaired.
This non-cash charge will have no effect on our cash balances or cash flow from
operating activities, nor any effect on ongoing operations. The charge will be
recorded in our financial results for the fourth quarter of 2008 and will result in
a net loss for the quarter and year. We expect to release our 2008 results in the
first quarter of 2009.
Item 8.01
Other Events
On December 24, 2008, we repurchased an additional $6,000,000 in principal amount of
our 3.0% Convertible Senior Subordinated Notes due 2024 (the "Notes") at a price
equal to 89% of par value plus accrued interest. The holders of the Notes have the
right to put the Notes to us on December 1, 2009. After beginning the fourth quarter
of 2008 with $80,000,000 of Notes outstanding, we now have an aggregate principal
amount of $27,727,000 of Notes outstanding.
2
Item 9.01
Financial Statements and Exhibits
(d)
Exhibits
99.1
Press Release of Cray Inc., dated January 5, 2009, relating to
the following late 2008 actions: acceptance of the Cray XT5 petaflops system by
Oak Ridge National Laboratory and the U.S. Department of Energy, the passing of
our fourth milestone under our DARPA Phase III contract, our non-cash goodwill
impairment, and our repurchase of $6,000,000 principal amount of Notes.
The information in Exhibit 99.1 attached hereto is furnished and shall not be deemed "filed"
for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
nor shall such information be deemed incorporated by reference in any filing under the Securities
Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific
reference in such filing.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant caused this
report to be signed on its behalf by the undersigned thereunto duly authorized.
January 5, 2009
Cray Inc.
By:
/s/ Kenneth W. Johnson
Kenneth W. Johnson
Senior Vice President and General Counsel
3