Cat GOVERNMENT

Cray announces acceptance of 'Jaguar'

DARPA Milestone Passed, Goodwill Impairment Recorded and Additional Notes Repurchased -- Cray today announced it received official notification of acceptance in late 2008 from Oak Ridge National Laboratory (ORNL) and the U.S. Department of Energy for the recently installed petaflops (quadrillion mathematical calculations per second) supercomputer. This system is expected to contribute approximately $100 million in revenue to the fourth quarter of 2008.

The latest upgrade to the Cray XT5 "Jaguar" supercomputer at ORNL has increased the system's computing power to a peak of 1.64 petaflops, making Jaguar the world's first petaflops system dedicated to open research. Scientists have already used the newly upgraded Jaguar to complete an unprecedented superconductivity calculation that achieved a sustained performance of more than 1.3 petaflops.

The project to build a petaflops machine was completed on time, on budget and exceeding the original scope. The Jaguar petaflops system is unique in the balance it represents among speed, power, and other elements essential to scientific discovery. Several design choices make it an excellent machine for computational sciences -- including unique Cray ECOphlex liquid cooling, more memory by almost a factor of three than any other machine, more I/O bandwidth, and the high-speed Cray SeaStar network developed specifically for very-high-performance computing.

"We are extremely pleased to announce the acceptance of 'Jaguar,' the first system in the world to achieve sustained petaflops performance on a real-world application," said Cray CEO, Peter Ungaro. "Thanks to the hard work and dedication of many people across Oak Ridge, the U.S. Department of Energy and Cray, the scientific community now has access to one of the most powerful computing systems in the world, leveraging unique Cray technology to open new possibilities for discovery and major scientific breakthroughs."

During the fourth quarter of 2008, as anticipated, the Company was also notified that it passed Milestone 4 in the amended agreement covering Phase III of the Defense Advanced Research Projects Agency's ("DARPA") High Productivity Computing Systems program.

 

Also in the fourth quarter of 2008, the company determined that due to the fourth quarter decline in Cray's common stock price, the market capitalization has been below the "net assets" (approximate to shareholders' equity) of the company. As a consequence and with further analysis, it was determined that Cray's Goodwill was fully impaired, resulting in a non-cash write-down of the November 30, 2008 Goodwill balance of approximately $55.4 million. The non-cash Goodwill write-down will have a negative financial impact that will result in a net loss rather than achieving the expected profit in both the fourth quarter and full year 2008. The Goodwill write-down will have no effect on Cray's cash balances or cash flow from operating activities, nor any effect on ongoing operations.

On December 24, 2008, the company repurchased a further $6,000,000 in principal amount of its 3.0% Convertible Senior Subordinated Notes due 2024 ("Notes"), expected to be put to the company in December 2009, for 89.0% of par value plus accrued interest. After beginning the fourth quarter of 2008 with $80,000,000 in Notes, this latest purchase reduced the total outstanding Notes to $27,727,000.

Cray Wins $52 Million SuperComputer Contract

Tyler O'Neal, Staff Editor GOVERNMENT

The system at Department of Energy's Berkeley Lab Will Be One of World's Fastest -- Cray and the U.S. Department of Energy (DOE) Office of Science announced today that Cray has won the contract to install a next-generation supercomputer at the DOE's National Energy Research Scientific Computing Center (NERSC). The systems and multi-year services contract, valued at over $52 million, includes delivery of a Cray massively parallel processor supercomputer, code-named "Hood."

The contract also provides options for future upgrades that would quadruple the size of the system and eventually boost performance to one petaflops (1,000 trillion floating-point operations per second) and beyond. A successor to the massively parallel Cray XT3 supercomputer, the Hood system installed at NERSC will be among the world's fastest general-purpose systems. It will deliver the sustained performance of at least 16 trillion calculations per second -- with a theoretical peak speed of 100 trillion calculations per second -- when running a suite of diverse scientific applications at scale. The system uses thousands of AMD Opteron processors running tuned, lightweight operating system kernels and interfaced to Cray's unique SeaStar network.

Cray will begin shipping the new supercomputer to the NERSC facility at the Lawrence Berkeley National Laboratory later this year, with completion of the installation anticipated in the first half of 2007 and acceptance in mid-2007. As part of a competitive procurement process, NERSC evaluated systems from a number of vendors using the NERSC Sustained System Performance (SSP) metric. The SSP metric, developed by NERSC, measures sustained performance on a set of codes designed to accurately represent the challenging computing environment at the Center.

"While the theoretical peak speed of supercomputers may be good for bragging rights, it's not an accurate indicator of how the machine will perform when running actual research codes," said Horst Simon, director of the NERSC Division at Berkeley Lab. "To better gauge how well a system will meet the needs of our 2,500 users, we developed SSP. According to this test, the new system will deliver over 16 teraflops on a sustained basis." "The Cray proposal was selected because its price/performance was substantially better than other proposals we received, as determined by NERSC's comprehensive evaluation criteria of more than 40 measures," said Bill Kramer, general manager of the NERSC Center.

"We are excited that NERSC will again be home to a large Cray supercomputer," said Cray President and CEO Peter Ungaro. "We are proud to have been selected by NERSC in a challenging and competitive evaluation process using a measurement that emulates real-world conditions, rather than a simplistic peak-performance measurement. NERSC joins a growing number of major high-performance computing centers that have selected Cray systems which exemplify our vision of Adaptive Supercomputing by handling scientific applications of ever-increasing complexity and scaling to the highest performance levels."

The Hood supercomputer at NERSC will consist of over 19,000 AMD Opteron 2.6-gigahertz processor cores, with two cores per socket making up one node. Each node has 4 gigabytes (4 billion bytes) of memory and a dedicated SeaStar connection to the internal network. The full system will consist of over 100 cabinets with 39 terabytes (39 trillion bytes) of aggregate memory capacity.

"AMD and Cray continue to collaborate on innovative ways to leverage Direct Connect Architecture and HyperTransport™ technology," said Marty Seyer, senior vice president, Commercial Segment, AMD. "This innovation, along with Cray's supercomputing expertise and focus on scalable system architectures, has yet again resulted in a significant win. This is confirmation that customers believe that the design and performance of the AMD Opteron processor combined with Cray's superior system architecture provides a winning combination."

In keeping with NERSC's tradition of naming supercomputers after world-class scientists, the new system will be called "Franklin" in honor of Benjamin Franklin, America's first scientist. This year is the 300th anniversary of Franklin's birth. "Ben Franklin's scientific achievements included fundamental advances in electricity, thermodynamics, energy efficiency, material science, geophysics, climate, ocean currents, weather, materials science, population growth, medicine and health, and many other areas," said NERSC's Bill Kramer. "In the tradition of Franklin, we expect this system to make contributions to the science of the same high order."

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