UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x   Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 - For the Period Ended June 30, 2008

Or

o   Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 - For the Transition Period From ________________________ to________________________

Commission file number 1-701

GREAT NORTHERN IRON ORE PROPERTIES

(Exact name of registrant as specified in its charter)

Minnesota	41-0788355
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)
W-1290 First National Bank Building 332 Minnesota Street Saint Paul, Minnesota	55101-1361
(Address of principal executive office)	(Zip Code)
(651) 224-2385
(Registrant’s telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter periods that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   Yes   xNo   o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer or a non-accelerated filer (as defined in Rule 12b-2 of the Act).

Large accelerated filer  o    Accelerated filer  x    Non-accelerated filer  o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).   Yes  o   No  x

Number of shares of beneficial interest outstanding on June 30, 2008:    1,500,000

PART I. FINANCIAL INFORMATION

Item 1.  Financial Statements

GREAT NORTHERN IRON ORE PROPERTIES

CONDENSED BALANCE SHEETS

	June 30 2008		December 31 2007
ASSETS	(Unaudited)		(Note)
CURRENT ASSETS
Cash and cash equivalents	$	983,039	$	979,175
United States Treasury securities		4,459,474		4,997,278
Royalties receivable		3,295,136		2,924,517
Prepaid expenses		34,902		4,519
TOTAL CURRENT ASSETS		8,772,551		8,905,489
NONCURRENT ASSETS
United States Treasury securities		2,498,528		4,755,295
PROPERTIES
Mineral and surface lands		38,691,707		38,691,707
Less: Allowances for depletion and amortization		-35,050,435		-34,940,185
		3,641,272		3,751,522
Building and equipment		311,342		313,891
Less: Allowances for accumulated depreciation		-212,134		-200,321
		99,208		113,570
TOTAL PROPERTIES		3,740,480		3,865,092
TOTAL ASSETS	$	15,011,559	$	17,525,876
LIABILITIES AND BENEFICIARIES' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued expenses	$	61,106	$	95,356
Distributions		3,150,000		4,350,000
TOTAL CURRENT LIABILITIES		3,211,106		4,445,356
NONCURRENT LIABILITIES
Deferred compensation		102,400		102,400
Liability for pension benefits		1,073,829		979,064
TOTAL NONCURRENT LIABILITIES		1,176,229		1,081,464
TOTAL LIABILITIES		4,387,335		5,526,820
BENEFICIARIES' EQUITY, including certificate holders' equity, represented by 1,500,000 certificates (shares or units) of beneficial interest authorized and outstanding, and the reversionary interest		12,141,867		13,580,035
Accumulated other comprehensive loss		-1,517,643		-1,580,979
TOTAL BENEFICIARIES' EQUITY		10,624,224		11,999,056
TOTAL LIABILITIES AND BENEFICIARIES' EQUITY	$	15,011,559	$	17,525,876

Note:  The balance sheet at December 31, 2007, has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.

See notes to condensed financial statements.

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GREAT NORTHERN IRON ORE PROPERTIES

CONDENSED STATEMENTS OF INCOME

(Unaudited)

	Three Months Ended June 30						Six Months Ended June 30
	2008			2007			2008			2007
Revenues:
Royalties	$	3,538,825		$	5,132,657		$	5,813,723		$	8,312,508
Interest and other income		99,312			115,411			244,211			287,694
		3,638,137			5,248,068			6,057,934			8,600,202
Costs and expenses		663,647			684,110			1,346,102			1,392,703
NET INCOME	$	2,974,490		$	4,563,958		$	4,711,832		$	7,207,499
Weighted-average shares outstanding		1,500,000			1,500,000			1,500,000			1,500,000
BASIC & DILUTED EARNINGS PER SHARE	$	1.98		$	3.04		$	3.14		$	4.80
Distributions declared per share	$	2.10	(1)	$	2.30	(2)	$	4.10	(3)	$	4.30	(4)

(1)	$2.10	declared	6/11/2008
		payable	7/31/2008
(2)	$2.30	declared	6/19/2007
		paid	7/31/2007
(3)	$2.00	declared	3/10/2008	plus	$2.10	declared	6/11/2008
		paid	4/30/2008			payable	7/31/2008
(4)	$2.00	declared	3/9/2007	plus	$2.30	declared	6/19/2007
		paid	4/30/2007			paid	7/31/2007

See notes to condensed financial statements.

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GREAT NORTHERN IRON ORE PROPERTIES

CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited)

	Six Months Ended June 30
	2008		2007
Cash flows from operating activities:
Cash received from royalties and rents	$	5,492,794	$	7,921,842
Cash paid to suppliers and employees		-1,128,022		-1,095,472
Interest received		189,092		216,684
NET CASH PROVIDED BY OPERATING ACTIVITIES		4,553,864		7,043,054
Cash flows from investing activities:
U.S. Treasury securities purchased		-700,000		-1,375,000
U.S. Treasury securities matured		3,500,000		1,800,000
NET CASH PROVIDED BY INVESTING ACTIVITIES		2,800,000		425,000
Cash flows from financing activities:
Distributions paid		-7,350,000		-7,950,000
NET CASH USED IN FINANCING ACTIVITIES		-7,350,000		-7,950,000
Net increase (decrease) in cash and cash equivalents		3,864		-481,946
Cash and cash equivalents at beginning of year		979,175		1,131,504
CASH AND CASH EQUIVALENTS AT JUNE 30	$	983,039	$	649,558

See notes to condensed financial statements.

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GREAT NORTHERN IRON ORE PROPERTIES

NOTES TO CONDENSED FINANCIAL STATEMENTS

(Unaudited)

Periods of Three and Six Months ended June 30, 2008 and June 30, 2007

Note A – BASIS OF PRESENTATION

The accompanying unaudited condensed financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the periods stated above are not necessarily indicative of the results that may be expected for each respective full year. For further information, refer to the financial statements and footnotes included in the Great Northern Iron Ore Properties (“Trust”) Annual Report on Form 10-K for the year ended December 31, 2007.

Note B – BENEFICIARIES’ EQUITY

Pursuant to the Court Order of November 29, 1982, the Trustees were directed to create and maintain an account designated as “Principal Charges.” This account constitutes a first and prior lien of certificate holders on any property transferable to the reversioner and reflects an allocation of beneficiaries’ equity between the certificate holders and the reversioner. This account is neither an asset nor a liability of the Trust. Rather, this account maintains and represents a balance which will be payable to the certificate holders of record from the reversioner at the end of the Trust. The balance in this account consists of attorneys’ fees and expenses of counsel for adverse parties pursuant to the Court Order in connection with litigation commenced in 1972 relating to the Trustees’ powers and duties under the Trust Agreement and the costs of homes and surface lands acquired in accordance with provisions of a lease with United States Steel Corporation, net of an allowance to amortize the cost of the land based on actual shipments of taconite and net of a credit for disposition of tangible assets. Following is an analysis of this account as of June 30, 2008:

Attorneys’ fees and expenses	$	1,024,834
Cost of surface lands		6,057,365
Cumulative shipment credits		-1,788,982
Cumulative asset disposition credits		-119,241
Principal Charges account balance	$	5,173,976

Upon termination of the Trust, the Trustees shall either sell tangible assets or obtain a loan with tangible assets as security to provide monies for distribution to the certificate holders in the amount of the Principal Charges account balance.

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Note C – PENSION PLAN

A summary of the components of net periodic pension cost is as follows:

	Three Months Ended June 30				Six Months Ended June 30
	2008		2007		2008		2007
Service cost	$	56,605	$	60,346	$	113,210	$	120,691
Interest cost		82,318		81,961		164,636		163,921
Expected return on assets		-91,540		-86,423		-183,081		-172,845
Amortization of net loss		27,300		38,890		54,601		77,781
Amortization of prior service cost		4,368		4,368		8,735		8,735
Net periodic pension cost	$	79,051	$	99,142	$	158,101	$	198,283

The plan’s annual actuarial valuation was performed as of the plan’s fiscal year-end March 31. The actuarially recommended contribution to the pension plan for 2008 was $412,422, which contribution is scheduled to be made in August or September of 2008.

Note D – COMPREHENSIVE INCOME

A summary of the components of comprehensive income is as follows:

	Three Months Ended June 30				Six Months Ended June 30
	2008		2007		2008		2007
Net income	$	2,974,490	$	4,563,958	$	4,711,832	$	7,207,499
Other comprehensive income:
Defined benefit pension plan, pursuant to SFAS No. 158 –
Amortization of net loss		27,300		38,890		54,601		77,781
Amortization of prior service cost		4,368		4,368		8,735		8,735
Total other comprehensive income		31,668		43,258		63,336		86,516
Total comprehensive income	$	3,006,158	$	4,607,216	$	4,775,168	$	7,294,015

Note E – NEW ACCOUNTING STANDARDS

During May 2008, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 162 “The Hierarchy of Generally Accepted Accounting Principles.” This Statement is intended to improve the financial reporting by identifying a consistent framework, or hierarchy, for selecting accounting principles to be used in preparing financial statements that are presented in conformity with United States generally accepted accounting principles. This Statement is not expected to have any impact on the Trust.

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Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations

Periods of Three and Six Months ended June 30, 2008 and June 30, 2007

The Trust owns interest in 12,033 acres on the Mesabi Iron Range Formation in northeastern Minnesota, most of which are under lease to major iron ore producing companies. Due to the Trustees’ election pursuant to Section 646 of the Tax Reform Act of 1986, as amended, commencing with year 1989 the Trust is not subject to federal and Minnesota corporate income taxes. The Trust is now a grantor trust. Shares of beneficial interest in the Trust are traded on the New York Stock Exchange under the ticker symbol “GNI” (CUSIP No. 391064102).

The terms of the Great Northern Iron Ore Properties Trust Agreement, created December 7, 1906, state that the Trust shall continue for twenty years after the death of the last survivor of eighteen persons named in the Trust Agreement. The last survivor of these eighteen persons died on April 6, 1995. Accordingly, the Trust terminates twenty years from April 6, 1995, that being April 6, 2015.

At the end of the Trust on April 6, 2015, the certificates of beneficial interest (shares) in the Trust will cease to trade on the New York Stock Exchange and thereafter will represent only the right to receive certain distributions payable to the certificate holders of record at the time of the termination of the Trust. Upon termination, the Trust is obligated to distribute ratably to these certificate holders the net monies remaining in the hands of the Trustees (after paying and providing for all expenses and obligations of the Trust), plus the balance in the Principal Charges account (this account is explained in the Trust’s Annual Report sent to all certificate holders every year). All other Trust property (most notably the Trust’s mineral properties and the active leases) must be conveyed and transferred to the reversioner (currently Glacier Park Company, a wholly owned subsidiary of ConocoPhillips) under the terms of the Trust Agreement.

We have previously provided information in our various Securities and Exchange Commission filings, including our Annual Report, about the final distribution payable to the certificate holders upon the Trust’s termination. The exact final distribution, though not determinable at this time, will generally consist of the sum of the Trust’s net monies (essentially, total assets less liabilities and properties) and the balance in the Principal Charges account, less any and all expenses and obligations of the Trust upon termination. To offer a hypothetical example, without factoring in any expenses and obligations of the Trust upon its termination, and using the financial statement values as of December 31, 2007, the net monies were approximately $8,134,000 and the Principal Charges account balance was approximately $5,037,000, resulting in a final distribution payable of approximately $13,171,000, or about $8.78 per share. After payment of this final distribution, the certificates of beneficial interest (shares) would be cancelled and have no further value. It is important to note, however, that the actual net monies on hand and the Principal Charges account balance will most likely fluctuate during the ensuing years and will not be “final” until after the termination and wind-down of the Trust. The Trust offers this example to further inform investors about the conceptual nature of the final distribution and does not imply or guarantee a specific known final distribution amount.

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Results of Operations:

Royalties decreased $2,498,785 and $1,593,832 during the six months and three months ended June 30, 2008, respectively, as compared to the same periods in 2007, due mainly to reduced mining on Trust lands caused by unusually high water conditions in the mining pits that are hampering our lessees’ mining operations.

Interest and other income decreased $43,483 and $16,099 during the six months and three months ended June 30, 2008, respectively, as compared to the same periods in 2007, due mainly to reduced yields on the Trust’s investments.

Costs and expenses decreased $46,601 and $20,463 during the six months and three months ended June 30, 2008, respectively, as compared to the same periods in 2007, due mainly to reduced net periodic pension cost pertaining to the Trust’s pension plan.

At their meeting held on June 11, 2008, the Trustees declared a distribution of $2.10 per share, amounting to $3,150,000 payable July 31, 2008, to certificate holders of record at the close of business on June 30, 2008. The Trustees have now declared two quarterly distributions in 2008. The first, in the amount of $2.00 per share, was paid on April 30, 2008 to certificate holders of record on March 31, 2008; and the second, that being the current distribution. The first and second quarter 2007 distributions were $2.00 and $2.30 per share, respectively. The Trustees intend to continue quarterly distributions and set the record date as of the last business day of each quarter. The next distribution will be paid in late October 2008 to certificate holders of record on September 30, 2008.

A mining agreement dated January 1, 1959, with United States Steel Corporation provides that one-half of annual earned royalty income, after satisfaction of minimum royalty payments, shall be applied to reimburse the lessee for a portion of its cost of acquisition of surface lands overlying the leased mineral deposits, which surface lands are then conveyed to the Trustees. There are surface lands yet to be purchased, the costs of which are yet unknown and will not be known until the actual purchases are made.

Liquidity:

In the interest of preservation of principal of Court-approved reserves and guided by the restrictive provisions of Section 646 of the Tax Reform Act of 1986, as amended, monies are invested primarily in U.S. Treasury securities with maturity dates not to exceed three years and, along with cash flows from operations, are deemed adequate to meet currently foreseeable liquidity needs.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

– None

Item 4.  Controls and Procedures

As of the end of the period covered by this report, the Trust conducted an evaluation, under the supervision and with the participation of the Chief Executive Officer and Chief Financial Officer, of the Trust’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934 (the “Exchange Act”)). Based on this evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Trust’s disclosure controls and procedures are effective to ensure that information required to be disclosed by the

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Trust in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms. There was no change in the Trust’s internal control over financial reporting during the Trust’s most recently completed fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Trust’s internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1.  Legal Proceedings

On May 7, 2008, a Ramsey County District Court Judge presided over a hearing, the purpose of which was to review and approve the accounts of the Trustees for the calendar year 2007, and also for the purpose of considering requested increases in compensation for the Trustees of Great Northern Iron Ore Properties. By Court Order dated May 12, 2008, the Court approved of the accounts of the Trustees for the calendar year 2007 and, further, granted the requested fee increases in Trustee compensation, effective July 1, 2008. Said increases amounted to $20,000 per year to the President’s base salary compensation, $20,000 per year to the President’s bonus compensation (subject to the bonus formula calculation), and a $10,000 per year increase in compensation to each of the Trustees other than the President.

Item 1A.  Risk Factors

There are no material changes from the risk factors previously disclosed in the Trust’s December 31, 2007 Annual Report on Form 10-K.

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds

– None

Item 3.  Defaults Upon Senior Securities

– None

Item 4.  Submission of Matters to a Vote of Certificate Holders

– None

Item 5.  Other Information

– None

Item 6.  Exhibits

Exhibit No.	Document
– 10.1	Court Order on Trustees’ Compensation (and annual hearing of accounts), dated May 12, 2008, but effective July 1, 2008 (filed as Exhibit 10.1 to Form 8-K of Great Northern Iron Ore Properties filed on May 12, 2008, and incorporated by reference)
– 10.2*	U.S. Steel Corporation Minntac January 1, 1959 Lease and Operating Agreement and all subsequent amendments through September 12, 2003
– 10.3*	Hibbing Taconite Company Mahoning January 1, 1979 Lease and Operating Agreement and all subsequent amendments through January 1, 2006

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Exhibit No.	Document
– 31.1	Certification of Chief Executive Officer pursuant to Section 302 of Sarbanes-Oxley Act of 2002
– 31.2	Certification of Chief Financial Officer pursuant to Section 302 of Sarbanes-Oxley Act of 2002
– 32.1	Certifications of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of Sarbanes-Oxley Act of 2002 (Furnished but not filed)

________

* Indicates confidential treatment request as to certain portions of this exhibit that has been filed separately with the Securities and Exchange Commission.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

			GREAT NORTHERN IRON ORE PROPERTIES (Registrant)
Date	July 24, 2008	By	/s/ Joseph S. Micallef
			Joseph S. Micallef, President of the Trustees and Chief Executive Officer

Date	July 24, 2008	By	/s/ Thomas A. Janochoski
			Thomas A. Janochoski, Vice President & Secretary and Chief Financial Officer

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QUARTERLY REPORT ON FORM 10-Q

EXHIBIT INDEX

QUARTER ENDED JUNE 30, 2008

GREAT NORTHERN IRON ORE PROPERTIES

W-1290 First National Bank Building

332 Minnesota Street

Saint Paul, Minnesota 55101-1361

Exhibit No.	Document
– 10.1	Court Order on Trustees’ Compensation (and annual hearing of accounts), dated May 12, 2008, but effective July 1, 2008 (filed as Exhibit 10.1 to Form 8-K of Great Northern Iron Ore Properties filed on May 12, 2008, and incorporated by reference)
– 10.2*	U.S. Steel Corporation Minntac January 1, 1959 Lease and Operating Agreement and all subsequent amendments through September 12, 2003
– 10.3*	Hibbing Taconite Company Mahoning January 1, 1979 Lease and Operating Agreement and all subsequent amendments through January 1, 2006
– 31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
– 31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
– 32.1	Certifications of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of Sarbanes-Oxley Act of 2002 (Furnished but not filed)

________

* Indicates confidential treatment request as to certain portions of this exhibit that has been filed separately with the Securities and Exchange Commission.