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Exhibit 99.1
 PRESS RELEASE
 SMITH INTERNATIONAL, INC.
 For Release
  Contact:
    
    Margaret K. DormanChief Financial Officer(281) 443-3370
 SMITH INTERNATIONAL, INC. REPORTS
FOURTH QUARTER EARNINGS OF 71 CENTS PER SHARE




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Non-GAAP Financial Measures. Supplementary Data
 Schedule II




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SMITH INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
 Three Months EndedDecember 31,
    
    September 30,2006
    
    2005
    
    2006Revenues
    
    $
    1,998,991
    
    
    $
    1,530,440
    
    
    $
    1,914,184Costs and expenses:Costs of revenues
    
    
    1,344,549
    
    
    
    1,054,456
    
    
    
    1,295,971Selling expenses
    
    
    266,807
    
    
    
    211,502
    
    
    
    253,569General and administrative expenses
    
    
    77,857
    
    
    
    68,890
    
    
    
    76,919Total costs and expenses
    
    
    1,689,213
    
    
    
    1,334,848
    
    
    
    1,626,459Operating income
    
    
    309,778
    
    
    
    195,592
    
    
    
    287,725Interest expense
    
    
    18,159
    
    
    
    12,113
    
    
    
    17,287Interest income
    
    
    (859
    )
    
    
    (549
    )
    
    
    (830
    )Income before income taxes and minority interests
    
    
    292,478
    
    
    
    184,028
    
    
    
    271,268Income tax provision
    
    
    94,502
    
    
    
    58,799
    
    
    
    88,600Minority interests
    
    
    54,944
    
    
    
    36,640
    
    
    
    49,743Net income
    
    $
    143,032
    
    
    $
    88,589
    
    
    $
    132,925Earnings per share:Basic
    
    $
    0.72
    
    
    $
    0.44
    
    
    $
    0.66Diluted
    
    $
    0.71
    
    
    $
    0.44
    
    
    $
    0.66Weighted average shares outstanding:Basic
    
    
    199,564
    
    
    
    200,427
    
    
    
    200,009Diluted
    
    
    201,381
    
    
    
    203,233
    
    
    
    201,811




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SMITH INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
 Year Ended December 31,2006
    
    2005Revenues
    
    $
    7,333,559
    
    
    $
    5,579,003Costs and expenses:Costs of revenues
    
    
    4,989,288
    
    
    
    3,893,865Selling expenses
    
    
    969,825
    
    
    
    786,668General and administrative expenses
    
    
    294,365
    
    
    
    227,909Total costs and expenses
    
    
    6,253,478
    
    
    
    4,908,442Operating income
    
    
    1,080,081
    
    
    
    670,561Interest expense
    
    
    62,967
    
    
    
    44,446Interest income
    
    
    (2,982
    )
    
    
    (1,692
    )Income before income taxes and minority interests
    
    
    1,020,096
    
    
    
    627,807Income tax provision
    
    
    326,674
    
    
    
    202,743Minority interests
    
    
    191,416
    
    
    
    122,759Net income
    
    $
    502,006
    
    
    $
    302,305Earnings per share:Basic
    
    $
    2.51
    
    
    $
    1.50Diluted
    
    $
    2.49
    
    
    $
    1.48Weighted average shares outstanding:Basic
    
    
    200,252
    
    
    
    201,651Diluted
    
    
    202,008
    
    
    
    204,522




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SMITH INTERNATIONAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
 December 31,
    
    December 31,2006
    
    2005Current Assets:Cash and cash equivalents
    
    $
    80,379
    
    
    $
    62,543Receivables, net
    
    
    1,592,230
    
    
    
    1,200,289Inventories, net
    
    
    1,457,371
    
    
    
    1,059,992Other current assets
    
    
    141,047
    
    
    
    114,407Total current assets
    
    
    3,271,027
    
    
    
    2,437,231Property, Plant and Equipment, net
    
    
    887,044
    
    
    
    665,389Goodwill and Other Assets
    
    
    1,177,404
    
    
    
    957,294Total Assets
    
    $
    5,335,475
    
    
    $
    4,059,914Current Liabilities:Short-term borrowings
    
    $
    287,704
    
    
    $
    133,650Accounts payable
    
    
    654,215
    
    
    
    479,206Other current liabilities
    
    
    437,549
    
    
    
    320,297Total current liabilities
    
    
    1,379,468
    
    
    
    933,153Long-Term Debt
    
    
    800,928
    
    
    
    610,857Other Long-Term Liabilities
    
    
    246,028
    
    
    
    194,691Minority Interests
    
    
    922,114
    
    
    
    742,708Stockholders Equity
    
    
    1,986,937
    
    
    
    1,578,505Total Liabilities and Stockholders Equity
    
    $
    5,335,475
    
    
    $
    4,059,914




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SMITH INTERNATIONAL, INC.
SUPPLEMENTARY DATA  SCHEDULE I
 Three Months Ended
    
    Year EndedDecember 31,
    
    September 30,
    
    December 31,2006
    
    2005
    
    2006
    
    2006
    
    2005REVENUE DATAUnited States
    
    $
    921,326
    
    
    $
    693,403
    
    
    $
    905,002
    
    
    $
    3,384,729
    
    
    $
    2,520,706Canada
    
    
    222,284
    
    
    
    217,168
    
    
    
    221,953
    
    
    
    891,288
    
    
    
    713,565North America
    
    
    1,143,610
    
    
    
    910,571
    
    
    
    1,126,955
    
    
    
    4,276,017
    
    
    
    3,234,271Latin America
    
    
    144,804
    
    
    
    113,247
    
    
    
    139,872
    
    
    
    543,844
    
    
    
    452,349Europe/Africa
    
    
    457,876
    
    
    
    322,334
    
    
    
    418,845
    
    
    
    1,605,559
    
    
    
    1,188,038Middle East/Asia
    
    
    252,701
    
    
    
    184,288
    
    
    
    228,512
    
    
    
    908,139
    
    
    
    704,345Non-North America
    
    
    855,381
    
    
    
    619,869
    
    
    
    787,229
    
    
    
    3,057,542
    
    
    
    2,344,732Total
    
    $
    1,998,991
    
    
    $
    1,530,440
    
    
    $
    1,914,184
    
    
    $
    7,333,559
    
    
    $
    5,579,003SEGMENT DATARevenues:M-I SWACO
    
    $
    979,520
    
    
    $
    726,385
    
    
    $
    942,191
    
    
    $
    3,573,395
    
    
    $
    2,682,511Smith Technologies
    
    
    218,270
    
    
    
    167,465
    
    
    
    205,448
    
    
    
    790,131
    
    
    
    601,821Smith Services
    
    
    288,302
    
    
    
    195,547
    
    
    
    265,295
    
    
    
    1,024,212
    
    
    
    694,667Oilfield Products and Services
    
    
    1,486,092
    
    
    
    1,089,397
    
    
    
    1,412,934
    
    
    
    5,387,738
    
    
    
    3,978,999Wilson
    
    
    512,899
    
    
    
    441,043
    
    
    
    501,250
    
    
    
    1,945,821
    
    
    
    1,600,004Total
    
    $
    1,998,991
    
    
    $
    1,530,440
    
    
    $
    1,914,184
    
    
    $
    7,333,559
    
    
    $
    5,579,003Operating Income:Oilfield Products and Services
    
    $
    289,842
    
    
    $
    178,897
    
    
    $
    270,710
    
    
    $
    1,012,295
    
    
    $
    625,384Distribution
    
    
    28,239
    
    
    
    23,187
    
    
    
    25,359
    
    
    
    101,830
    
    
    
    64,714General corporate
    
    
    (8,303
    )
    
    
    (6,492
    )
    
    
    (8,344
    )
    
    
    (34,044
    )
    
    
    (19,537
    )Total
    
    $
    309,778
    
    
    $
    195,592
    
    
    $
    287,725
    
    
    $
    1,080,081
    
    
    $
    670,561OTHER DATAOperating Income(a):Smith ownership interest
    
    $
    241,869
    
    
    $
    150,532
    
    
    $
    225,315
    
    
    $
    839,992
    
    
    $
    515,923Minority partner ownership interest
    
    
    67,909
    
    
    
    45,060
    
    
    
    62,410
    
    
    
    240,089
    
    
    
    154,638Total
    
    $
    309,778
    
    
    $
    195,592
    
    
    $
    287,725
    
    
    $
    1,080,081
    
    
    $
    670,561Depreciation and
Amortization(a):Smith ownership interest
    
    $
    32,885
    
    
    $
    24,053
    
    
    $
    28,953
    
    
    $
    114,939
    
    
    $
    90,596Minority partner ownership interest
    
    
    10,562
    
    
    
    7,114
    
    
    
    9,359
    
    
    
    35,445
    
    
    
    27,126Total
    
    $
    43,447
    
    
    $
    31,167
    
    
    $
    38,312
    
    
    $
    150,384
    
    
    $
    117,722Gross Capital Spending(a):Smith ownership interest
    
    $
    78,978
    
    
    $
    44,912
    
    
    $
    61,015
    
    
    $
    224,422
    
    
    $
    129,853Minority partner ownership interest
    
    
    30,668
    
    
    
    17,288
    
    
    
    23,844
    
    
    
    84,048
    
    
    
    47,992Total
    
    $
    109,646
    
    
    $
    62,200
    
    
    $
    84,859
    
    
    $
    308,470
    
    
    $
    177,845Net Capital Spending(a) (b):Smith ownership interest
    
    $
    69,540
    
    
    $
    39,480
    
    
    $
    51,879
    
    
    $
    191,423
    
    
    $
    105,459Minority partner ownership interest
    
    
    30,012
    
    
    
    16,671
    
    
    
    23,138
    
    
    
    81,304
    
    
    
    45,960Total
    
    $
    99,552
    
    
    $
    56,151
    
    
    $
    75,017
    
    
    $
    272,727
    
    
    $
    151,419
 NOTE (a):
    
    The Company derives a significant portion of its revenues and earnings from M-I SWACO and other joint venture
operations. Consolidated operating income, depreciation and amortization and capital spending amounts have been separated
between the Companys portion and the minority partners portion in order to aid in analyzing the Companys financial results.NOTE (b):
    
    Net capital spending reflects the impact of proceeds from lost-in-hole and fixed asset equipment sales.




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SMITH INTERNATIONAL, INC.
SUPPLEMENTARY DATA  SCHEDULE II
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
 Three Months EndedDecember 31,
    
    September 30,
    
    December 31,
    
    Year Ended December 31,2006
    
    2006
    
    2005
    
    2006
    
    2005Consolidated Operating Income:GAAP consolidated operating income
    
    $
    309,778
    
    
    $
    287,725
    
    
    $
    195,592
    
    
    $
    1,080,081
    
    
    $
    670,561Litigation-related charges(a)
    
    
    
    
    
    
    
    
    
    
    5,640
    
    
    
    
    
    
    
    5,640Gain on sale of equity interest in Sandvik-Smith and other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,770
    )Hurricane-related costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,917Non-GAAP consolidated operating income
    
    $
    309,778
    
    
    $
    287,725
    
    
    $
    201,232
    
    
    $
    1,080,081
    
    
    $
    673,348Oilfield Operating Income:GAAP Oilfield operating income
    
    $
    289,842
    
    
    $
    270,710
    
    
    $
    178,897
    
    
    $
    1,012,295
    
    
    $
    625,384Litigation-related charges(a)
    
    
    
    
    
    
    
    
    
    
    5,640
    
    
    
    
    
    
    
    5,640Gain on sale of equity interest in Sandvik-Smith and other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,770
    )Hurricane-related costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,170Non-GAAP Oilfield operating income
    
    $
    289,842
    
    
    $
    270,710
    
    
    $
    184,537
    
    
    $
    1,012,295
    
    
    $
    627,424Distribution Operating Income:GAAP Distribution operating income
    
    $
    28,239
    
    
    $
    25,359
    
    
    $
    23,187
    
    
    $
    101,830
    
    
    $
    64,714Hurricane-related costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    747Non-GAAP Distribution operating income
    
    $
    28,239
    
    
    $
    25,359
    
    
    $
    23,187
    
    
    $
    101,830
    
    
    $
    65,461Consolidated Net Income:GAAP consolidated net income
    
    $
    143,032
    
    
    $
    132,925
    
    
    $
    88,589
    
    
    $
    502,006
    
    
    $
    302,305Litigation-related charges, net of tax(a)
    
    
    
    
    
    
    
    
    
    
    3,666
    
    
    
    
    
    
    
    3,666Gain on sale of equity interest in Sandvik-Smith and other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,401
    )Hurricane-related costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,880Settlement of U.S. tax audit
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,348
    )
    
    
    Non-GAAP consolidated net income
    
    $
    143,032
    
    
    $
    132,925
    
    
    $
    92,255
    
    
    $
    497,658
    
    
    $
    303,450Diluted Earnings per Share:GAAP diluted earnings per share
    
    $
    0.71
    
    
    $
    0.66
    
    
    $
    0.44
    
    
    $
    2.49
    
    
    $
    1.48Litigation-related charges, net of tax(a)
    
    
    
    
    
    
    
    
    
    
    0.01
    
    
    
    
    
    
    
    0.01Gain on sale of equity interest in Sandvik-Smith and other
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (0.02
    )Hurricane-related costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.01Settlement of U.S. tax audit
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (0.02
    )
    
    
    Non-GAAP diluted earnings per share
    
    $
    0.71
    
    
    $
    0.66
    
    
    $
    0.45
    
    
    $
    2.47
    
    
    $
    1.48
 NOTE (a):
    
    These amounts are related to the settlement of drill bit patent litigation.