Consolidated Statements of Operations

	SMITH INTERNATIONAL, INC. CONSOLIDATED STATEMENTS OF OPERATIONS
1996 ANNUAL REPORT

For the Years Ended December 31, (In thousands, except per share data)	1996	1995	1994

Revenues	$1,156,658	$ 874,544	$ 653,901

Costs and Expenses:
Costs of revenues	764,596	582,004	432,627
Selling expenses	194,875	158,300	116,151
General and administrative expenses	64,667	47,992	45, 019

Total costs and expenses	1,024,138	788,296	593,797

Income before interest and taxes	132,520	86,248	60,104

Interest expense	18,654	14,101	10,014
Interest income	(2,209)	(1,863)	(1,442)

Income before income taxes and minority interests	116,075	74,010	51,532

Income tax provision	26,798	12,609	6,815

Income before minority interests	89,277	61,401	44,717

Minority interests	24,833	15,809	8,838

Net income	$ 64,444	$ 45,592	$ 35,879

Earnings Per Share	$ 1.62	$ 1.16	$ 0.92

Average common and common equivalent shares outstanding	39,880	39,383	39,065