10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒      Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 - For the Quarterly Period Ended March 31, 2014

Or

☐      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 period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒   No ☐

Indicate by check mark whether the registrant has submitted electronically and posted to its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes ☒   No ☐

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

Large accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer	☐	Smaller reporting company	☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).

Yes ☐   No ☒

Number of shares of beneficial interest outstanding on March 31, 2014:             1,500,000

PART I. FINANCIAL INFORMATION

Item 1.  Financial Statements

GREAT NORTHERN IRON ORE PROPERTIES

CONDENSED BALANCE SHEETS

	March 31, 2014			December 31, 2013
ASSETS	(Unaudited)			(Note)
CURRENT ASSETS
Cash and cash equivalents	$	1,084,596		$	712,197
United States Treasury securities		8,243,190			5,468,675
Royalties receivable		4,032,700			4,448,907
Prepaid expenses		78,111			2,110
TOTAL CURRENT ASSETS		13,438,597			10,631,889
NONCURRENT ASSETS
United States Treasury securities		—			2,883,251
Prepaid pension costs		475,389			587,159
		475,389			3,470,410
PROPERTIES
Mineral and surface lands		39,479,708			39,479,708
Accumulated depletion and amortization		(38,766,577	)		(38,592,577	)
		713,131			887,131
Building and equipment		335,767			335,767
Accumulated depreciation		(277,727	)		(263,965	)
		58,040			71,802
TOTAL PROPERTIES		771,171			958,933
TOTAL ASSETS	$	14,685,157		$	15,061,232
LIABILITIES AND BENEFICIARIES’ EQUITY
CURRENT LIABILITIES
Accounts payable and accrued expenses	$	115,156		$	92,356
Distributions		3,375,000			3,975,000
TOTAL CURRENT LIABILITIES		3,490,156			4,067,356
NONCURRENT LIABILITIES
Deferred compensation		244,300			244,300
TOTAL LIABILITIES		3,734,456			4,311,656
BENEFICIARIES’ EQUITY
Certificate holders’ equity, represented by 1,500,000      certificates (shares or units) of beneficial interest      authorized and outstanding, and the reversionary interest		11,808,245			11,611,487
Accumulated other comprehensive loss		(857,544	)		(861,911	)
TOTAL BENEFICIARIES’ EQUITY		10,950,701			10,749,576
TOTAL LIABILITIES AND BENEFICIARIES’ EQUITY	$	14,685,157		$	15,061,232

Note: The balance sheet at December 31, 2013 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.

-1-

GREAT NORTHERN IRON ORE PROPERTIES

CONDENSED STATEMENTS OF INCOME

(Unaudited)

	Three Months Ended March 31
	2014			2013
REVENUES
Royalties	$	4,305,323		$	4,707,867
Interest and other income		281,821			26,313
		4,587,144			4,734,180
Costs and expenses		(1,015,386	)		(1,043,334	)
NET INCOME	$	3,571,758		$	3,690,846
Weighted-average shares outstanding		1,500,000			1,500,000
BASIC & DILUTED EARNINGS PER SHARE	$	2.38		$	2.46
Distributions declared per share	$	2.25	(1)	$	2.25	(2)

(1)	$	2.25	declared	3/14/2014
			payable	4/30/2014
(2)	$	2.25	declared	3/8/2013
			paid	4/30/2013

See notes to condensed financial statements.

-2-

GREAT NORTHERN IRON ORE PROPERTIES

CONDENSED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

	Three Months Ended March 31
	2014		2013
NET INCOME	$	3,571,758	$	3,690,846
Other comprehensive income:
Defined benefit pension plan:
Amortization of prior service      cost included in net periodic      pension cost		4,367		4,367
Amortization of net loss included      in net periodic pension cost		—		165,884
Total other comprehensive income		4,367		170,251
TOTAL COMPREHENSIVE INCOME	$	3,576,125	$	3,861,097

See notes to condensed financial statements.

-3-

GREAT NORTHERN IRON ORE PROPERTIES

CONDENSED STATEMENTS OF CASH FLOWS

(Unaudited)

	Three Months Ended March 31
	2014			2013
Cash flows from operating activities:
Cash received from royalties and rents	$	4,999,630		$	4,363,142
Cash paid to suppliers and employees		(764,688	)		(712,325	)
Interest received		12,457			28,176
NET CASH PROVIDED BY OPERATING ACTIVITIES		4,247,399			3,678,993
Cash flows from investing activities:
United States Treasury securities purchased		(2,725,000	)		(675,000	)
United States Treasury securities matured		2,825,000			5,225,000
NET CASH PROVIDED BY INVESTING ACTIVITIES		100,000			4,550,000
Cash flows from financing activities:
Distributions paid		(3,975,000	)		(7,875,000	)
NET CASH USED IN FINANCING ACTIVITIES		(3,975,000	)		(7,875,000	)
Net increase in cash and cash equivalents		372,399			353,993
Cash and cash equivalents at beginning of year		712,197			643,431
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	1,084,596		$	997,424

See notes to condensed financial statements.

-4-

GREAT NORTHERN IRON ORE PROPERTIES

NOTES TO CONDENSED FINANCIAL STATEMENTS

(Unaudited)

Periods of Three Months ended March 31, 2014 and March 31, 2013

Note 1 – BASIS OF PRESENTATION

The accompanying unaudited condensed financial statements have been prepared in accordance with U.S. 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 U.S. 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 (the “Trust”) Annual Report on Form 10-K for the year ended December 31, 2013.

Note 2 – SECURITIES

United States Treasury securities are classified as “held-to-maturity” securities and are carried at cost, adjusted for accrued interest and amortization of premium or discount. The aggregate fair values listed in the table below are based on quoted prices in active markets for identical assets (Level 1). Securities classified as current assets will mature within one year of the respective period ending date stated below. Securities classified as noncurrent assets will mature one to three years from the respective period ending date stated below. Following is an analysis of the securities as of the periods stated:

	Current						Noncurrent
	March 31, 2014			Dec. 31, 2013			March 31, 2014		Dec. 31, 2013
Aggregate fair value	$	8,237,423		$	5,457,842		$	—	$	2,880,219
Gross unrealized holding gains		(2,641	)		(1,279	)		—		(442	)
Gross unrealized holding losses		154			26			—		294
Amortized cost basis		8,234,936			5,456,589			—		2,880,071
Accrued interest		8,254			12,086			—		3,180
Amounts shown on balance sheets	$	8,243,190		$	5,468,675		$	—	$	2,883,251

Note 3 – PENSION PLAN

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

	Three Months Ended March 31
	2014			2013
Service cost	$	77,584		$	81,423
Interest cost		90,640			76,968
Expected return on assets		(56,454	)		(134,481	)
Amortization of net loss		—			165,884
Amortization of prior service cost		4,367			4,367
Net periodic pension cost	$	116,137		$	194,161

The Trust had previously disclosed in its Annual Report as of December 31, 2013, that the next contribution to the pension plan for the year 2014 is estimated to approximate $1,400,000, subject to the plan’s annual actuarial valuation performed as of the plan’s fiscal year end, March 31. No additional information is available at this time.

-5-

Note 4 – 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 U.S. 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 for the period ended as of:

	March 31, 2014
Attorneys’ fees and expenses	$	1,024,834
Costs of surface lands		6,606,815
Cumulative shipment credits		(2,487,466	)
Cumulative asset disposition credits		(372,124	)
Principal Charges account balance	$	4,772,059

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.

Note 5 – ACCUMULATED OTHER COMPREHENSIVE LOSS

A summary of the component items (all affecting the “Costs and expenses” line item within the Condensed Statements of Income) showing the reclassifications out of “Accumulated other comprehensive loss” (“AOCL”) is as follows:

	Amounts reclassified from AOCL Three Months Ended March 31
Component item	2014		2013
Amortization of defined benefit pension items:
Prior service cost	$	4,367	$	4,367
Net loss		—		165,884
Total	$	4,367	$	170,251

-6-

Note 5 – ACCUMULATED OTHER COMPREHENSIVE LOSS (Continued)

A summary of the changes in AOCL by component item is as follows:

	Three Months Ended March 31, 2014
Defined benefit pension items:	Prior Service Cost			Net Loss			Total
Balance at beginning of period	$	(17,467	)	$	(844,444	)	$	(861,911	)
Amounts reclassified from AOCL		4,367			—			4,367
Balance at end of period	$	(13,100	)	$	(844,444	)	$	(857,544	)

	Three Months Ended March 31, 2013
Defined benefit pension items:	Prior Service Cost			Net Loss			Total
Balance at beginning of period	$	(34,936	)	$	(2,387,173	)	$	(2,422,109	)
Amounts reclassified from AOCL		4,367			165,884			170,251
Balance at end of period	$	(30,569	)	$	(2,221,289	)	$	(2,251,858	)

-7-

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

Periods of Three Months ended March 31, 2014 and March 31, 2013

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. With the properties and offices all located in Minnesota, the Trust and matters affecting the Trust are under the jurisdiction of the Ramsey County District Court (the “Court”) in Saint Paul, Minnesota. 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.

Upon the termination date 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 Trust termination and after the wind-down process is completed, 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 incurred through the Trust’s termination and wind-down process), 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 of which are subject to the final accounting and approval of the Ramsey County District Court. 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 Company), without further payment or remuneration to the certificate holders, under the terms of the Trust Agreement. The wind-down process of the Trust is anticipated to extend into the calendar year following its termination date in order to complete the various year-end audits, court and regulatory filings, tax returns, conveyances of non-cash properties to the reversioner, etc., relative thereto. Subject to the guidance and approval of the Ramsey County District Court and assuming the wind-down process with the reversioner proceeds efficiently and that no other complications arise during this time period, we anticipate the wind-down process, final distribution and dissolution of the Trust will be completed by the end of 2016.

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 less properties) and the balance in the Principal Charges account, less any and all expenses and obligations incurred through the Trust’s termination and wind-down process. To offer a hypothetical example, without factoring in any expenses and obligations incurred through the Trust’s termination and wind-down process, and using the financial statement values as of December 31, 2013, the net monies were approximately $9,790,000 and the Principal Charges account balance was approximately $4,789,000, resulting in a final distribution payable of approximately $14,579,000, or about $9.72 per share. Upon the termination of the Trust, the certificates of beneficial interest (shares) would be cancelled and have no further value with the exception of the final distribution. 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 process of the Trust is completed. 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.

Results of Operations:

Royalties decreased $402,544 during the three months ended March 31, 2014, as compared to the same period in 2013, due mainly to a lower overall average earned royalty rate caused by our lessees mining more taconite from our partial fee interest lands resulting in royalties representative of our ownership interest, offset in part by overall increased taconite shipments from Trust lands and increased tailings revenues.

Interest and other income increased $255,508 during the three months ended March 31, 2014, as compared to the same period in 2013, due mainly to the higher aggregate (mineral rock) sales.

Costs and expenses decreased $27,948 during the three months ended March 31, 2014, as compared to the same period in 2013, due mainly to less net periodic pension cost associated with the Trust’s defined benefit pension plan, offset in part by increased legal expenditures related to Trust termination matters.

-8-

At their meeting held on March 14, 2014, the Trustees declared a distribution of $2.25 per share, amounting to $3,375,000 payable April 30, 2014, to certificate holders of record at the close of business on March 31, 2014. Following payment of this quarterly distribution, there will be four (4) more regular quarterly distributions declared (three in 2014 and one in 2015) before the termination date of the Trust on April 6, 2015. While there will be some income allocated to the second quarter of 2015 (representing six days of business), it is expected that this amount will be nominal and will likely be included with the final distribution to certificate holders. The final distribution to certificate holders of record as of April 6, 2015 will be made subsequent to the termination date and upon completion of the wind-down process. At their meeting held on March 8, 2013, the Trustees declared a distribution of $2.25 per share, amounting to $3,375,000 paid on April 30, 2013, to certificate holders of record at the close of business on March 28, 2013. 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 July 31, 2014 to certificate holders of record on June 30, 2014.

A mining agreement dated January 1, 1959, with U.S. Steel Corporation provides that one-half of annual earned royalty income, after satisfaction of minimum royalty payments, shall be applied, in lieu of royalty payments, 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 United States 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 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

- None

Item 1A.  Risk Factors

There are no material changes from the risk factors previously disclosed in the Trust’s Annual Report on Form 10-K for the year ended December 31, 2013.

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

- None

Item 3.  Defaults Upon Senior Securities

- None

Item 4.  Mine Safety Disclosures

- Not applicable

Item 5.  Other Information

- None

-9-

Item 6.  Exhibits

Exhibit No.	Document
- 31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Exchange Act, as amended, and Section 302 of the Sarbanes-Oxley Act of 2002
- 31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Exchange Act, as amended, and Section 302 of the Sarbanes-Oxley Act of 2002
- 32	Certifications of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished but not filed)
- 101.INS	XBRL Instance Document (Interactive Data File)
- 101.SCH	XBRL Taxonomy Extension Schema Document (Interactive Data File)
- 101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document (Interactive Data File)
- 101.DEF	XBRL Taxonomy Extension Definition Linkbase Document (Interactive Data File)
- 101.LAB	XBRL Taxonomy Extension Label Linkbase Document (Interactive Data File)
- 101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document (Interactive Data File)

- - - - - - - - - - - - - - - -

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:	April 29, 2014	By:	/s/  Joseph S. Micallef
		Joseph S. Micallef, Chief Executive Officer,
		Trustee and President of the Trustees
		(principal executive officer)

Date:	April 29, 2014	By:	/s/  Thomas A. Janochoski
		Thomas A. Janochoski, Chief Financial Officer,
		Vice President & Secretary
		(principal financial and accounting officer)

-10-

QUARTERLY REPORT ON FORM 10-Q

EXHIBIT INDEX

QUARTER ENDED: MARCH 31, 2014

GREAT NORTHERN IRON ORE PROPERTIES

W-1290 First National Bank Building

332 Minnesota Street

Saint Paul, Minnesota 55101-1361

Exhibit No.	Document
31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Exchange Act, as amended, and Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Exchange Act, as amended, and Section 302 of the Sarbanes-Oxley Act of 2002
32	Certifications of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished but not filed)
101.INS	XBRL Instance Document (Interactive Data File)
101.SCH	XBRL Taxonomy Extension Schema Document (Interactive Data File)
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document (Interactive Data File)
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document (Interactive Data File)
101.LAB	XBRL Taxonomy Extension Label Linkbase Document (Interactive Data File)
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document (Interactive Data File)

EX-31.1

Exhibit 31.1

Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Exchange Act, as
amended, and Section 302 of the Sarbanes-Oxley Act of 2002

I, Joseph S. Micallef, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Great Northern Iron Ore Properties;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors [or persons performing the equivalent functions]:

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

By:	/s/  Joseph S. Micallef	Date:	April 29, 2014
Joseph S. Micallef
Chief Executive Officer, Trustee and President of the Trustees (principal executive officer)

EX-31.2

Exhibit 31.2

Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Exchange Act, as
amended, and Section 302 of the Sarbanes-Oxley Act of 2002

I, Thomas A. Janochoski, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Great Northern Iron Ore Properties;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors [or persons performing the equivalent functions]:

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

By:	/s/  Thomas A. Janochoski	Date:	April 29, 2014
Thomas A. Janochoski
Chief Financial Officer, Vice President & Secretary (principal financial and accounting officer)

EX-32

Exhibit 32

Certifications of Chief Executive Officer and Chief Financial Officer pursuant to

18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(furnished but not filed)

In connection with this quarterly report of Great Northern Iron Ore Properties on Form 10-Q filed with the Securities and Exchange Commission, I, Joseph S. Micallef, President of the Trustees and Chief Executive Officer of Great Northern Iron Ore Properties, certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. 1350, that:

1. This Quarterly Report on Form 10-Q of Great Northern Iron Ore Properties for the quarter ended March 31, 2014 (the “Report”) fully complies with the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m); and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Great Northern Iron Ore Properties.

By:	/s/  Joseph S. Micallef	Date:	April 29, 2014
Joseph S. Micallef
Chief Executive Officer, Trustee and President of the Trustees (principal executive officer)

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Great Northern Iron Ore Properties and will be retained by Great Northern Iron Ore Properties and furnished to the Securities and Exchange Commission or its staff upon request.

- - - - - -

In connection with this quarterly report of Great Northern Iron Ore Properties on Form 10-Q filed with the Securities and Exchange Commission, I, Thomas A. Janochoski, Vice President & Secretary and Chief Financial Officer of Great Northern Iron Ore Properties, certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. 1350, that:

1. This Quarterly Report on Form 10-Q of Great Northern Iron Ore Properties for the quarter ended March 31, 2014 (the “Report”) fully complies with the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m); and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Great Northern Iron Ore Properties.

By:	/s/  Thomas A. Janochoski	Date:	April 29, 2014
Thomas A. Janochoski
Chief Financial Officer, Vice President & Secretary (principal financial and accounting officer)

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Great Northern Iron Ore Properties and will be retained by Great Northern Iron Ore Properties and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Securities

3 Months Ended

Mar. 31, 2014

Securities [Abstract]

Securities

Note 2 – SECURITIES

United States Treasury securities are classified as “held-to-maturity” securities and are carried at cost, adjusted for accrued interest and amortization of premium or discount.  The aggregate fair values listed in the table below are based on quoted prices in active markets for identical assets (Level 1).  Securities classified as current assets will mature within one year of the respective period ending date stated below.  Securities classified as noncurrent assets will mature one to three years from the respective period ending date stated below.  Following is an analysis of the securities as of the periods stated:

	Current				Noncurrent
	March 31, 2014		Dec. 31, 2013		March 31, 2014		Dec. 31, 2013
Aggregate fair value	$	8,237,423	$	5,457,842	$	-	$	2,880,219
Gross unrealized holding gains		(2,641)		(1,279)		-		(442)
Gross unrealized holding losses		154		26		-		294
Amortized cost basis		8,234,936		5,456,589		-		2,880,071
Accrued interest		8,254		12,086		-		3,180
Amounts shown on balance sheets	$	8,243,190	$	5,468,675	$	-	$	2,883,251

XML

Basis Of Presentation

3 Months Ended

Mar. 31, 2014

Basis Of Presentation [Abstract]

Basis Of Presentation

Note 1 – BASIS OF PRESENTATION

The accompanying unaudited condensed financial statements have been prepared in accordance with U.S. 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 U.S. 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 (the “Trust”) Annual Report on Form 10-K for the year ended December 31, 2013. 

XML

Condensed Balance Sheets (USD $)	Mar. 31, 2014	Dec. 31, 2013
CURRENT ASSETS
Cash and cash equivalents	$ 1,084,596	$ 712,197
United States Treasury securities	8,243,190	5,468,675
Royalties receivable	4,032,700	4,448,907
Prepaid expenses	78,111	2,110
TOTAL CURRENT ASSETS	13,438,597	10,631,889
NONCURRENT ASSETS
United States Treasury securities		2,883,251
Prepaid pension costs	475,389	587,159
NONCURRENT ASSETS	475,389	3,470,410
PROPERTIES
Mineral and surface lands	39,479,708	39,479,708
Accumulated depletion and amortization	(38,766,577)	(38,592,577)
Mineral and surface lands, net	713,131	887,131
Building and equipment	335,767	335,767
Accumulated depreciation	(277,727)	(263,965)
Building and equipment, net	58,040	71,802
TOTAL PROPERTIES	771,171	958,933
TOTAL ASSETS	14,685,157	15,061,232
CURRENT LIABILITIES
Accounts payable and accrued expenses	115,156	92,356
Distributions	3,375,000	3,975,000
TOTAL CURRENT LIABILITIES	3,490,156	4,067,356
NONCURRENT LIABILITIES
Deferred compensation	244,300	244,300
TOTAL LIABILITIES	3,734,456	4,311,656
BENEFICIARIES' EQUITY
Certificate holders' equity, represented by 1,500,000 certificates (shares or units) of beneficial interest authorized and outstanding, and the reversionary interest	11,808,245	11,611,487
Accumulated other comprehensive loss	(857,544)	(861,911)
TOTAL BENEFICIARIES' EQUITY	10,950,701	10,749,576
TOTAL LIABILITIES AND BENEFICIARIES' EQUITY	$ 14,685,157	$ 15,061,232

XML

Condensed Statements Of Comprehensive Income (USD $)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Condensed Statements Of Comprehensive Income [Abstract]
NET INCOME	$ 3,571,758	$ 3,690,846
Defined benefit pension plan:
Amortization of prior service cost included in net periodic pension cost	4,367	4,367
Amortization of net loss included in net periodic pension cost		165,884
Total other comprehensive income	4,367	170,251
TOTAL COMPREHENSIVE INCOME	$ 3,576,125	$ 3,861,097

XML

Accumulated Other Comprehensive Loss (Reclassifications Out of Accumulated Other Comprehensive Loss) (Details) (USD $)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Accumulated Other Comprehensive Loss [Abstract]
Prior service cost	$ 4,367	$ 4,367
Net Loss		165,884
Total	$ 4,367	$ 170,251

XML

Condensed Statements Of Cash Flows (USD $)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Cash flows from operating activities:
Cash received from royalties and rents	$ 4,999,630	$ 4,363,142
Cash paid to suppliers and employees	(764,688)	(712,325)
Interest received	12,457	28,176
NET CASH PROVIDED BY OPERATING ACTIVITIES	4,247,399	3,678,993
Cash flows from investing activities:
United States Treasury securities purchased	(2,725,000)	(675,000)
United States Treasury securities matured	2,825,000	5,225,000
NET CASH PROVIDED BY INVESTING ACTIVITIES	100,000	4,550,000
Cash flows from financing activities:
Distributions paid	(3,975,000)	(7,875,000)
NET CASH USED IN FINANCING ACTIVITIES	(3,975,000)	(7,875,000)
Net increase in cash and cash equivalents	372,399	353,993
Cash and cash equivalents at beginning of year	712,197	643,431
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$ 1,084,596	$ 997,424

XML

Condensed Balance Sheets (Parenthetical)	Mar. 31, 2014	Dec. 31, 2013
Condensed Balance Sheets [Abstract]
Beneficiaries' equity - authorized	1,500,000	1,500,000
Beneficiaries' equity - outstanding	1,500,000	1,500,000

XML

Securities (Narrative) (Details)	3 Months Ended
	Mar. 31, 2014
Current [Member]
Schedule of Held-to-maturity Securities [Line Items]
Assets maturity range	1 year
Maximum [Member] | Noncurrent [Member]
Schedule of Held-to-maturity Securities [Line Items]
Assets maturity range	3 years
Minimum [Member] | Noncurrent [Member]
Schedule of Held-to-maturity Securities [Line Items]
Assets maturity range	1 year

XML

Document And Entity Information	3 Months Ended
	Mar. 31, 2014
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2014
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q1
Trading Symbol	GNI
Entity Registrant Name	GREAT NORTHERN IRON ORE PROPERTIES
Entity Central Index Key	0000043410
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding	1,500,000

XML

Securities (Summary Of Securities) (Details) (USD $)	Mar. 31, 2014	Dec. 31, 2013
Current [Member]
Schedule of Held-to-maturity Securities [Line Items]
Aggregate fair value	$ 8,237,423	$ 5,457,842
Gross unrealized holding gains	(2,641)	(1,279)
Gross unrealized holding losses	154	26
Amortized cost basis	8,234,936	5,456,589
Accrued interest	8,254	12,086
Amounts shown on balance sheets	8,243,190	5,468,675
Noncurrent [Member]
Schedule of Held-to-maturity Securities [Line Items]
Aggregate fair value		2,880,219
Gross unrealized holding gains		(442)
Gross unrealized holding losses		294
Amortized cost basis		2,880,071
Accrued interest		3,180
Amounts shown on balance sheets		$ 2,883,251

XML

Condensed Statements Of Income (USD $)	3 Months Ended
	Mar. 31, 2014		Mar. 31, 2013
REVENUES
Royalties	$ 4,305,323		$ 4,707,867
Interest and other income	281,821		26,313
TOTAL REVENUES	4,587,144		4,734,180
Costs and expenses	(1,015,386)		(1,043,334)
NET INCOME	$ 3,571,758		$ 3,690,846
Weighted-average shares outstanding	1,500,000		1,500,000
BASIC & DILUTED EARNINGS PER SHARE	$ 2.38		$ 2.46
Distributions declared	$ 2.25	[1]	$ 2.25	[2]

[1] $2.25 declared 3/14/2014 payable 4/30/2014

[2] $2.25 declared 3/8/2013 paid 4/30/2013

XML

Accumulated Other Comprehensive Loss

3 Months Ended

Mar. 31, 2014

Accumulated Other Comprehensive Loss [Abstract]

Accumulated Other Comprehensive Loss

Note 5 – ACCUMULATED OTHER COMPREHENSIVE LOSS

A summary of the component items (all affecting the “Costs and expenses” line item within the Condensed Statements of Income) showing the reclassifications out of “Accumulated other comprehensive loss” (“AOCL”) is as follows:

	Amounts reclassified from AOCL
	Three Months Ended March 31
Component item	2014		2013
Amortization of defined benefit pension items:
Prior service cost	$	4,367	$	4,367
Net loss		-		165,884
Total	$	4,367	$	170,251

Note 5 – ACCUMULATED OTHER COMPREHENSIVE LOSS (Continued)

A summary of the changes in AOCL by component item is as follows:

	Three Months Ended March 31, 2014
Defined benefit pension items:	Prior Service Cost		Net Loss		Total
Balance at beginning of period	$	(17,467)	$	(844,444)	$	(861,911)
Amounts reclassified from AOCL		4,367		-		4,367
Balance at end of period	$	(13,100)	$	(844,444)	$	(857,544)
	Three Months Ended March 31, 2013
Defined benefit pension items:	Prior Service Cost		Net Loss		Total
Balance at beginning of period	$	(34,936)	$	(2,387,173)	$	(2,422,109)
Amounts reclassified from AOCL		4,367		165,884		170,251
Balance at end of period	$	(30,569)	$	(2,221,289)	$	(2,251,858)

XML

Beneficiaries' Equity

3 Months Ended

Mar. 31, 2014

Beneficiaries' Equity [Abstract]

Beneficiaries' Equity

Note 4 – 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 U.S. 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 for the period ended as of:

	March 31, 2014
Attorneys' fees and expenses	$	1,024,834
Costs of surface lands		6,606,815
Cumulative shipment credits		(2,487,466)
Cumulative asset disposition credits		(372,124)
Principal Charges account balance	$	4,772,059

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.

XML

Accumulated Other Comprehensive Loss (Summary Of Changes In Accumulated Other Comprehensive Loss) (Details) (USD $)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance at beginning of period	$ (861,911)	$ (2,422,109)
Amounts reclassified from AOCL	4,367	170,251
Balance at end of period	(857,544)	(2,251,858)
Prior Service Cost [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance at beginning of period	(17,467)	(34,936)
Amounts reclassified from AOCL	4,367	4,367
Balance at end of period	(13,100)	(30,569)
Net Loss [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance at beginning of period	(844,444)	(2,387,173)
Amounts reclassified from AOCL		165,884
Balance at end of period	$ (844,444)	$ (2,221,289)

XML

Pension Plan (Narrative) (Details) (USD $)	3 Months Ended
	Mar. 31, 2014
Pension Plan [Abstract]
Approximate contribution to the plan for 2014	$ 1,400,000

XML

Beneficiaries' Equity (Tables)

3 Months Ended

Mar. 31, 2014

Beneficiaries' Equity [Abstract]

Schedule Of Principal Charges

	March 31, 2014
Attorneys' fees and expenses	$	1,024,834
Costs of surface lands		6,606,815
Cumulative shipment credits		(2,487,466)
Cumulative asset disposition credits		(372,124)
Principal Charges account balance	$	4,772,059

XML

Securities (Tables)

3 Months Ended

Mar. 31, 2014

Securities [Abstract]

Summary Of Securities

	Current				Noncurrent
	March 31, 2014		Dec. 31, 2013		March 31, 2014		Dec. 31, 2013
Aggregate fair value	$	8,237,423	$	5,457,842	$	-	$	2,880,219
Gross unrealized holding gains		(2,641)		(1,279)		-		(442)
Gross unrealized holding losses		154		26		-		294
Amortized cost basis		8,234,936		5,456,589		-		2,880,071
Accrued interest		8,254		12,086		-		3,180
Amounts shown on balance sheets	$	8,243,190	$	5,468,675	$	-	$	2,883,251

XML

Pension Plan (Tables)

3 Months Ended

Mar. 31, 2014

Pension Plan [Abstract]

Summary Of Net Periodic Pension Cost

	Three Months Ended March 31
	2014		2013
Service cost	$	77,584	$	81,423
Interest cost		90,640		76,968
Expected return on assets		(56,454)		(134,481)
Amortization of net loss		-		165,884
Amortization of prior service cost		4,367		4,367
Net periodic pension cost	$	116,137	$	194,161

XML

Accumulated Other Comprehensive Loss (Tables)

3 Months Ended

Mar. 31, 2014

Accumulated Other Comprehensive Loss [Abstract]

Reclassifications Out of Accumulated Other Comprehensive Loss

	Amounts reclassified from AOCL
	Three Months Ended March 31
Component item	2014		2013
Amortization of defined benefit pension items:
Prior service cost	$	4,367	$	4,367
Net loss		-		165,884
Total	$	4,367	$	170,251

Summary Of Changes In Accumulated Other Comprehensive Loss

	Three Months Ended March 31, 2014
Defined benefit pension items:	Prior Service Cost		Net Loss		Total
Balance at beginning of period	$	(17,467)	$	(844,444)	$	(861,911)
Amounts reclassified from AOCL		4,367		-		4,367
Balance at end of period	$	(13,100)	$	(844,444)	$	(857,544)
	Three Months Ended March 31, 2013
Defined benefit pension items:	Prior Service Cost		Net Loss		Total
Balance at beginning of period	$	(34,936)	$	(2,387,173)	$	(2,422,109)
Amounts reclassified from AOCL		4,367		165,884		170,251
Balance at end of period	$	(30,569)	$	(2,221,289)	$	(2,251,858)

XML

Beneficiaries' Equity (Details) (USD $)	Mar. 31, 2014
Beneficiaries' Equity [Abstract]
Attorneys' fees and expenses	$ 1,024,834
Costs of surface lands	6,606,815
Cumulative shipment credits	(2,487,466)
Cumulative asset disposition credits	(372,124)
Principal Charges account balance	$ 4,772,059

XML

Condensed Statements Of Income (Parenthetical) (USD $)	3 Months Ended
	Mar. 31, 2014		Mar. 31, 2013
Distributions declared	$ 2.25	[1]	$ 2.25	[2]
Dividends Declared, 3/14/2014 [Member]
Distributions declared	$ 2.25
Distributions date declared	Mar. 14, 2014
Distributions date payable	Apr. 30, 2014
Dividends Declared, 3/8/2013 [Member]
Distributions declared			$ 2.25
Distributions date declared			Mar. 08, 2013
Distributions date paid			Apr. 30, 2013

[1] $2.25 declared 3/14/2014 payable 4/30/2014

[2] $2.25 declared 3/8/2013 paid 4/30/2013

XML

Pension Plan

3 Months Ended

Mar. 31, 2014

Pension Plan [Abstract]

Pension Plan

Note 3 – PENSION PLAN

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

	Three Months Ended March 31
	2014		2013
Service cost	$	77,584	$	81,423
Interest cost		90,640		76,968
Expected return on assets		(56,454)		(134,481)
Amortization of net loss		-		165,884
Amortization of prior service cost		4,367		4,367
Net periodic pension cost	$	116,137	$	194,161

The Trust had previously disclosed in its Annual Report as of December 31, 2013, that the next contribution to the pension plan for the year 2014 is estimated to approximate $1,400,000,  subject to the plan’s annual actuarial valuation performed as of the plan’s fiscal year end, March 31.  No additional information is available at this time. 

XML

Pension Plan (Summary Of Net Periodic Pension Cost) (Details) (USD $)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Pension Plan [Abstract]
Service cost	$ 77,584	$ 81,423
Interest cost	90,640	76,968
Expected return on assets	(56,454)	(134,481)
Amortization of net loss		165,884
Amortization of prior service cost	4,367	4,367
Net periodic pension cost	$ 116,137	$ 194,161