Today we reported 2010 second quarter net income of $21.5 million or $0.46 per diluted share. This includes a net benefit of $3.3 million or $0.07 per diluted share, related to the favorable resolution of the litigation matter and a tax accrual reversal, partially offset by the negative impact from fair value adjustments, related to certain interest rate swaps at our European rail affiliate AAE Cargo.The breakdown of these items is as follows. The benefit from litigation is $4.1 million or $0.09 per diluted share. The benefit from the tax accrual reversal is $3.7 million or $0.08 per diluted share and the negative impact from the AAE interest rate swaps is 4.5 million or $0.10 per diluted share. This compares to 2009 second quarter net income of $12.7 million or $0.27 per diluted share which includes the negative impact of $6.7 million or $0.14 per diluted share from the AAE interest rate swaps. Year-to-date 2010, we reported net income of $40.2 million for $0.86 per diluted share. The year-to-date results include a net benefit of $2.5 million or $0.05 per diluted share, related to the affirmation tax and litigation matter and the interest rates swap at AAE. Year-to-date 2009 we reported net income of $40.3 million or $0.83 per diluted share including a negative impact of $18.3 million or $0.37 per diluted share from the fair value adjustments of the AAE interest swap. As noted in the press release our operating results are consistent with our expectations at the beginning of the year. The North American rail market remains challenging. We continue to see some signs of improvements although they are inconsistent. GATX's North American fleet utilization increased to 96.5% during the second quarter due primarily to increased fleet activity. The pricing environment remains aggressive as renewal rates were well below expiring rates. GATX's lease price index was negative 18.6% for the quarter and the average renewal term remained relatively short at 36 months.
In specialty asset remarketing income improved during the second quarter reflective of a more active secondary market. Our marine joint ventures continue to face challenges as the markets in which they operate remain under pressure. American Steamship Company has seen a significant increase in customer demand from the level of experience in 2009.This is particularly true in ASC's largest segment Iron ore shipments as the steel industry has brought more capacity online this year. While ASC's shipping volume has been higher than anticipated, we could see some softening in the demand for Iron Ore in the second half of the year. As we noted in the press release we continue to expect our full year of 2010 earnings to be in the previously announced range of a $1.50 to $1.70 per diluted share this guidance excludes the AAE fair value adjustments as well as the adjustments related to litigation and tax matters. So with that overview, let's go to your questions. William? Question-and-Answer Session Operator And we'll take our first question. First question comes from John Hecht of JMP, SEC. John Hecht - JMP Securities Good morning, guys and thanks for taking my questions. First question is what drove the loss in the affiliate earnings in the rail division during the quarter? Bob Lyon That was the AAE hedge. That's where the hedge followed through. John Hecht - JMP Securities And what was excluding the hedge what is the normalized rate of recurring rate of earnings, what would it have been I guess? Bob Lyon Actually in the quarter it would have been about breakeven, a little slightly positive during the quarter. In the first quarter it was higher than that, due to some stronger affirmations at AAE and we often had within one of our North American, joint ventures we had been marketing that 50 was attributing positively in the first quarter. Read the rest of this transcript for free on seekingalpha.com