SEC Filings

10-Q
CRAY INC filed this Form 10-Q on 10/30/2018
Entire Document
 


The following table shows the components of the net investment in the sales-type lease as of September 30, 2018 and December 31, 2017 (in thousands):
 
 
September 30,
2018
 
December 31, 2017
Total minimum lease payments to be received
 
$
29,849

 
$
42,268

Less: executory costs
 
(3,487
)
 
(6,831
)
Net minimum lease payments receivable
 
26,362

 
35,437

Less: unearned income
 
(696
)
 
(1,386
)
Net investment in sales-type lease
 
25,666

 
34,051

Less: long-term investment in sales-type lease
 
(13,024
)
 
(23,367
)
Investment in sales-type lease included in accounts and other receivables
 
$
12,642

 
$
10,684

As of September 30, 2018, minimum lease payments for each of the succeeding three fiscal years are as follows (in thousands):
2018 (less than 1 year)
 
$
3,733

2019
 
14,932

2020
 
11,184

Total minimum lease payments to be received
 
$
29,849

Note 9— Inventory
Inventory consisted of the following (in thousands):
 
 
September 30,
2018
 
December 31, 2017
Components and subassemblies
 
$
47,384

 
$
37,219

Work in process
 
47,908

 
59,456

Finished goods
 
46,269

 
89,632

Total
 
$
141,561

 
$
186,307

Finished goods inventory of $45.7 million and $48.1 million was located at customer sites pending acceptance as of September 30, 2018 and December 31, 2017, respectively. At September 30, 2018, one customer accounted for $38.3 million of finished goods inventory, and at December 31, 2017, two customers accounted for $67.7 million of finished goods inventory.
The Company wrote off $0.3 million of excess and obsolete inventory during the three and nine months ended September 30, 2018. The Company did not write off any inventory during the three and nine months ended September 30, 2017.
Note 10— Customer Contract Liabilities
Liabilities from contracts with customers consisted of the following (in thousands):
 
 
September 30,
2018
 
December 31, 2017
Contract liability - product
 
$
9,315

 
$
22,245

Contract liability - service
 
79,636

 
96,496

Total contract liabilities
 
88,951

 
118,741

Less: long-term contract liabilities
 
(31,661
)
 
(38,622
)
Current contract liabilities
 
$
57,290

 
$
80,119

As of September 30, 2018 and December 31, 2017, the U.S. Government accounted for $30.1 million and $32.5 million, respectively, of total customer contract liabilities. As of September 30, 2018, one non-U.S. Government customer accounted for 10% of total customer contract liabilities. As of December 31, 2017, no non-U.S. Government customers accounted for more than 10% of total customer contract liabilities.
Note 11— Contingencies
The Company is subject to patent lawsuits brought by Raytheon Company, or Raytheon. The first suit was brought by Raytheon on September 25, 2015 in the Eastern District of Texas (Civil Action No. 2:15-cv-1554) asserting infringement of four

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