Executive Summary

Executive Summary

In 1902, 20 year old Herman C. Smith opens a blacksmith shop in California. His primary customers were oil drillers and they needed their drill bits sharpened and oil drill tools repaired. This service kept Smith busy and provided him with a steady source of cash. This continued service developed a relationship between the oil drillers and Smith. These turn of events gradually lead Smith into a new business direction and created the roots for Smith International. Smith International, Inc. is a business leader in supplying products and services to the gas, petrochemical, and oil industries. Smith International, Inc. performs through four company units: M-I, Wilson, Smith Services and Smith Bits. M-I specializes in drilling systems and fluids. It also handles equipment that manages pressures, waste and control solids. Wilson is a wholesaler of products mostly used by mining and petroleum industries. In this field and others, it also provides supply chain management services. Smith supplies products and services that pertain to fishing, completion and drilling to the gas and oil drilling industries. Smith Bits designs, produces, and markets top of the line drill bits used by the oil and natural gas wells. These units are global in 400 locations, making most of its revenue outside of America. Smith International, Inc. has had many increases and decreases in all areas of its financial matters within the 2008 Annual Report. This is mainly due to Smith’s huge buy-out of 11 company units. Here are Smith’s financial information for the two most recent annual reporting periods of 2008 and 2007.

The primary responsibility for the Company’s financial reporting and internal operating controls are vested in senior management is overseen by the Board of Directors. The Audit Committee appointed by the board assists in overseeing (1) the integrity of the financial statement of the company, (2) the compliance by the company with legal and regulatory requirements,...