-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, IBTqvKAYwQt3aIa2mATv/m8dJKyB3LbmWdeKVGfCTKJkApHVaCAagb+sKd9SuGwL keGjUf7Jm44xY60H0um0+g== 0000897101-96-000163.txt : 19960422 0000897101-96-000163.hdr.sgml : 19960422 ACCESSION NUMBER: 0000897101-96-000163 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960419 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: GREAT NORTHERN IRON ORE PROPERTIES CENTRAL INDEX KEY: 0000043410 STANDARD INDUSTRIAL CLASSIFICATION: MINERAL ROYALTY TRADERS [6795] IRS NUMBER: 410788355 STATE OF INCORPORATION: MN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-00701 FILM NUMBER: 96548626 BUSINESS ADDRESS: STREET 1: W 1290 FIRST NATIONAL BANK BLDG STREET 2: 332 MINNESOTA ST CITY: SAINT PAUL STATE: MN ZIP: 55101-1361 BUSINESS PHONE: 6122242385 MAIL ADDRESS: STREET 1: W 1290 FIRST NATIONAL BANK BLDG STREET 2: 332 MINNESOTA STREET CITY: ST PAUL STATE: MN ZIP: 55101-1361 10-Q 1 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 March 31, 1996 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 (I.R.S. Employer incorporation or organization) Identification Number) W-1290 First National Bank Building 332 Minnesota Street Saint Paul, Minnesota 55101-1361 (Address of principal executive office) (Zip Code) (612) 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 X No Number of shares of beneficial interest outstanding on March 31, 1996: 1,500,000 PART I. FINANCIAL INFORMATION GREAT NORTHERN IRON ORE PROPERTIES CONDENSED BALANCE SHEETS
March 31 December 31 1996 1995 ------------- ------------- (Unaudited) (Note) ASSETS CURRENT ASSETS Cash and cash equivalents $ 626,232 $ 262,525 United States Treasury and other government securities (including accrued interest thereon) 5,090,064 4,603,942 Royalties receivable 2,206,228 2,314,340 Prepaid expenses 40,936 4,394 ----------- ----------- TOTAL CURRENT ASSETS 7,963,460 7,185,201 NONCURRENT ASSETS United States Treasury Notes 3,099,210 3,773,396 Prepaid pension expense 254,726 255,317 ----------- ----------- 3,353,936 4,028,713 PROPERTIES Mineral lands 37,625,536 37,625,536 Less allowances for depletion and amortization 32,624,791 32,587,321 ----------- ----------- 5,000,745 5,038,215 Building and equipment--at cost, less allowances for accumulated depreciation (3/31/96 - $121,758; 12/31/95 - $128,734) 94,593 83,297 ----------- ----------- 5,095,338 5,121,512 ----------- ----------- $16,412,734 $16,335,426 =========== =========== LIABILITIES AND BENEFICIARIES' EQUITY CURRENT LIABILITIES Accounts payable and accrued expenses $ 115,855 $ 112,519 Distributions 2,105,000 2,180,000 ----------- ----------- TOTAL CURRENT LIABILITIES 2,220,855 2,292,519 BENEFICIARIES' EQUITY, including certificate holders' equity, represented by 1,500,000 shares of beneficial interest authorized and outstanding, and reversionary interest 14,191,879 14,042,907 ----------- ----------- $16,412,734 $16,335,426 =========== ===========
Note: The balance sheet at December 31, 1995 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. GREAT NORTHERN IRON ORE PROPERTIES CONDENSED STATEMENTS OF INCOME (Unaudited) Three Months Ended ------------------------- March 31 ------------------------- 1996 1995 ----------- ----------- Income: Royalties $2,477,278 $1,935,460 Interest and other income 135,107 131,483 ---------- ---------- 2,612,385 2,066,943 Costs and expenses 438,413 383,726 ---------- ---------- NET INCOME $2,173,972 $1,683,217 ========== ========== Average shares outstanding 1,500,000 1,500,000 NET INCOME PER SHARE $ 1.45 $ 1.12 ========== ========== Distributions declared per share $ 1.35(1) $ 1.15(3) Distributions paid per share $ 1.40(2) $ 1.15(4) (1) $1.35 declared 3/18/96 payable 4/30/96 (2) $1.40 declared 12/14/95 paid 1/31/96 (3) $1.15 declared 3/17/95 paid 4/28/95 (4) $1.15 declared 12/16/94 paid 1/31/95 See notes to condensed financial statements. GREAT NORTHERN IRON ORE PROPERTIES CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) Three Months Ended ------------------------ March 31 ------------------------ 1996 1995 ----------- ----------- Cash flows from operating activities: Cash received from royalties and rents $2,593,806 $2,057,979 Cash paid to suppliers and employees -428,645 -373,259 Interest received 114,755 144,277 ---------- ---------- NET CASH PROVIDED BY OPERATING ACTIVITIES 2,279,916 1,828,997 Cash flows from investing activities: U.S. government securities purchased 0 -350,000 U.S. government securities matured 200,000 400,000 Net expenditures for equipment -16,209 -10,004 ---------- ---------- NET CASH PROVIDED BY INVESTING ACTIVITIES 183,791 39,996 Cash flows from financing activities: Distributions paid -2,100,000 -1,725,000 ---------- ---------- NET CASH USED IN FINANCING ACTIVITIES -2,100,000 -1,725,000 ---------- ---------- Net increase in cash and cash equivalents 363,707 143,993 Cash and cash equivalents at beginning of year 262,525 111,862 ---------- ---------- CASH AND CASH EQUIVALENTS AT MARCH 31 $ 626,232 $ 255,855 ========== ========== See notes to condensed financial statements. GREAT NORTHERN IRON ORE PROPERTIES NOTES TO CONDENSED FINANCIAL STATEMENTS (Unaudited) Period of Three Months ended March 31, 1996 and March 31, 1995 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 (the "Trust") Annual Report on Form 10-K for the year ended December 31, 1995. 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 between the certificate holders and the reversioner, and reflects an allocation of beneficiaries' equity between the certificate holders and the reversioner. The balance in this account consists of attorneys' fees and expenses of counsel for adverse parties pursuant to court order in connection with litigation commenced in 1972 relating to the Trustees' powers and duties under the Trust Instrument and the cost of 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 March 31, 1996: March 31, 1996 ---------- Attorneys' fees and expenses $1,024,834 Cost of surface lands 4,751,794 Shipment credits (cumulative) -407,181 Asset disposition credits -18,500 ---------- Principal Charges account $5,350,947 ========== 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. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Periods of Three Months ended March 31, 1996 and March 31, 1995 The Trust owns interest in 12,033 acres on the Mesabi Iron Range Formation in northern 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. 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 surviving of eighteen named in the Trust Agreement. The last survivor of these eighteen named in the Trust Agreement died on April 6, 1995. According to the terms of the Trust Agreement, the Trust now terminates twenty years from April 6, 1995. At that time, all monies remaining in the hands of the Trustees (after paying and providing for all expenses and obligations of the Trust) shall be distributed ratably among the certificate holders, while all property other than monies shall be conveyed and transferred to the reversioner. Results of Operations: Royalty income increased $541,818 during the first three months of 1996 compared to the first three months of 1995 due mainly to increased taconite production from Trust lands and a higher average earned royalty rate thereon. Costs and expenses increased $54,687 during the first three months of 1996 compared to the first three months of 1995 due mostly to additional legal expenditures and an increased amortization rate applied to surface lands resulting from the fixed termination date of the Trust. At their meeting held on March 18, 1996, the Trustees declared a distribution of $1.35 per share, amounting to $2,025,000 payable April 30, 1996 to certificate holders of record at the close of business on March 29, 1996. At their meeting held on March 17, 1995, the Trustees declared a distribution of $1.15 per share, amounting to $1,725,000 paid on April 28, 1995 to certificate holders of record at the close of business on March 31, 1995. 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 July 1996 to certificate holders of record on June 28, 1996. 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 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. government 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. PART II. OTHER INFORMATION Item 1. Legal Proceedings None Item 6. Exhibits and Reports on Form 8-K (a) Exhibits - (27) Financial Data Schedule (only filed electronically via EDGAR) (b) Reports on Form 8-K - None 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 19, 1996 By /s/ Harry L. Holtz Harry L. Holtz President of the Trustees Chief Executive Officer Date April 19, 1996 By /s/ Thomas A. Janochoski Thomas A. Janochoski Vice President and Secretary Chief Financial Officer EX-27 2
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE GREAT NORTHERN IRON ORE PROPERTIES BALANCE SHEET AS OF MARCH 31, 1996 AND INCOME STATEMENT FOR THE THREE MONTHS ENDED MARCH 31, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 3-MOS DEC-31-1996 MAR-31-1996 626,232 8,189,274 2,206,228 0 0 7,963,460 37,841,887 32,746,549 16,412,734 2,220,855 0 0 0 0 14,191,879 16,412,734 2,477,278 2,612,385 0 0 438,413 0 0 2,173,972 0 2,173,972 0 0 0 2,173,972 1.45 0
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