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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 
 FORM 11-K
 
 (Mark One)
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (NO
FEE REQUIRED)
 For the fiscal year ended December 31, 2006
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
(NO FEE REQUIRED)
 For the transition period from  to
 Commission File Number 1-8514
 A.
    
    Full title of the plan and the address of the plan, if different from that
of the issuer named below:
 GREYBULL RETIREMENT PLAN
 P.O. BOX 42842
 HOUSTON, TX 77242-2842
 B.
    
    Name of issuer of the securities held pursuant to the plan and the address
of its principal executive office:
 Smith International, Inc.
411 North Sam Houston Parkway, Suite 600
Houston, Texas 77060




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Index to Financial Statements and Supplementary Information
 PageReport of Independent Registered Public Accounting Firm
    
    
    3Financial Statements:Statements of Net Assets Available for Benefits
as of December 31, 2006 and 2005
    
    
    4Statement of Changes in Net Assets Available for
Benefits for the Year Ended December 31, 2006
    
    
    5Notes to Financial Statements
    
    
    6Supplemental Schedule:Form 5500, Schedule H, Part IV, Line 4i  Schedule of Assets (Held
at End of Year) December 31, 2006
    
    
    10Exhibit:23.1  Consent of Independent Registered Public Accounting Firm
    
    
    13
 2




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3




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2006
    
    
    2005ASSETS:Investments, at fair value
    
    $
    2,799,700
    
    
    $
    2,290,601Receivables-Company contributions
    
    
    16,285
    
    
    
    Participant contributions
    
    
    22,967
    
    
    
    Total receivables
    
    
    39,252
    
    
    
    NET ASSETS AVAILABLE FOR BENEFITS
    
    $
    2,838,952
    
    
    $
    2,290,601
  4




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ADDITIONS:Income -Interest and dividend income
    
    $
    169,087Net appreciation in fair value of investments (Note 6)
    
    
    166,939Net investment gain
    
    
    336,026Contributions-Company
    
    
    190,591Participant
    
    
    322,290Total contributions
    
    
    512,881Total additions
    
    
    848,907DEDUCTIONS:Benefits paid to participants
    
    
    288,716Administrative expenses
    
    
    11,840Total deductions
    
    
    300,556Net increase
    
    
    548,351NET ASSETS AVAILABLE FOR BENEFITS AT BEGINNING OF YEAR
    
    
    2,290,601NET ASSETS AVAILABLE FOR BENEFITS AT END OF YEAR
    
    $
    2,838,952
  5




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SUMMARY OF SIGNIFICANT PLAN PROVISIONS
  General and Eligibility
  Administration and Trustee
  Contributions
  Vesting
  Investment Options
  Administrative Expenses
  6




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Plan Termination
  Loans
  Withdrawals and Forfeitures
   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 Basis of Accounting
  Recent Accounting Pronouncements
   7




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Investment Valuation and Income Recognition
   Participant Account Valuation
   Use of Estimates
  FEDERAL INCOME TAX STATUS
  8




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RISKS AND UNCERTAINTIES
  2006
    
    2005Balanced Funds (Stocks and Bonds)
    
    
    74.4
    %
    
    
    73.2
    %Domestic Stock Funds
    
    
    14.5
    
    
    
    16.0Participant loans
    
    
    6.9
    
    
    
    5.7International Stock Funds
    
    
    1.7
    
    
    
    1.6Bond Funds
    
    
    1.0
    
    
    
    1.2Smith International, Inc. common stock
    
    
    0.8
    
    
    
    1.4Money Market Fund
    
    
    0.7
    
    
    
    0.9100.0
    %
    
    
    100.0
    %
 RELATED-PARTY TRANSACTIONS
  INVESTMENTS
  2006
    
    2005Vanguard Wellington Fund
    
    $
    1,897,680
    
    
    $
    1,592,384Participant loans
    
    
    195,438
    
    
    
    130,005Vanguard 500 Index Portfolio Fund
    
    
    179,345
    
    
    
    158,235Vanguard PRIMECAP Fund
    
    
    153,382
    
    
    
    153,223
  2006Equity funds
    
    $
    33,207Balanced funds
    
    
    129,923Smith International, Inc. common stock
    
    
    3,809$
    166,939
 9




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(a)
    
    (b)
    
    (c)
    
    (d)
    
    
    (e)Identity of Issue,
    
    Description of Investment, Including MaturityBorrower,
    
    Date, Rate of Interest,Lessor or Similar Party
    
    Collateral, Par or Maturity Value
    
    Cost
    
    Current Value*
    
    Vanguard Group
    
    Vanguard Wellington Fund
    
    
    **
        
    $
    1,897,680*
    
    The Plan
    
    Participant loans (highest and lowest
interest rates are 8.25% and 4.00%,
respectively)
    
    
    **
        
    
    195,438*
    
    Vanguard Group
    
    Vanguard 500 Index Portfolio Fund
    
    
    **
        
    
    179,345*
    
    Vanguard Group
    
    Vanguard PRIMECAP Fund
    
    
    **
        
    
    153,382*
    
    Vanguard Group
    
    Vanguard Target Retirement 2015 Fund
    
    
    **
        
    
    98,045*
    
    Vanguard Group
    
    Vanguard Target Retirement 2035 Fund
    
    
    **
        
    
    84,749*
    
    Vanguard Group
    
    Vanguard Windsor Fund
    
    
    **
        
    
    66,313*
    
    Vanguard Group
    
    Vanguard International Growth Fund
    
    
    **
        
    
    46,386*
    
    Vanguard Group
    
    Vanguard Long-Term Investment Grade
Fund
    
    
    **
        
    
    27,227*
    
    Smith International, Inc.
    
    Smith International, Inc. common stock
    
    
    **
        
    
    23,386*
    
    Vanguard Group
    
    Vanguard Prime Money Market Fund
    
    
    **
        
    
    20,620*
    
    Vanguard Group
    
    Vanguard Extended Market Index Fund
    
    
    **
        
    
    4,377*
    
    Vanguard Group
    
    Vanguard Retirement Savings Trust
    
    
    **
        
    
    1,112*
    
    Vanguard Group
    
    Vanguard Target Retirement 2045 Fund
    
    
    **
        
    
    1,077*
    
    Vanguard Group
    
    Vanguard Total Bond Market Index Fund
    
    
    **
        
    
    563Total investments
    
    
    
    
    
    $
    2,799,700
 
 *
    
    Party-in-interest.**
    
    Cost information is not required for participant-directed investments and, therefore, is not
included. 10




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SIGNATURES
  Dated: June 28, 2007
    
    GREYBULL RETIREMENT PLANBy:
    
    Administrative Committee for
the Greybull Retirement PlanBy:
    
    /s/ W. Frank Richter

W. Frank Richter, MemberBy:
    
    /s/ Malcolm W. Anderson

Malcolm W. Anderson, Member
 11




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EXHIBIT INDEX
 ExhibitNumber
    
    Description23.1
    
    Consent of Independent Registered Public Accounting Firm
 12