10-K 1 grnorth030860_10k.txt GREAT NORTHERN IRON ORE PROPERTIES FORM 10K ANNUAL REPORT ON FORM 10-K GREAT NORTHERN IRON ORE PROPERTIES DECEMBER 31, 2002 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2002 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 No.) W-1290 First National Bank Building 332 Minnesota Street Saint Paul, Minnesota 55101-1361 ----------------------------------- ------------------- (Address of Principal Executive Offices) (Zip Code) Registrant's Telephone Number, Including Area Code 651 / 224-2385 -------------- Securities registered pursuant to Section 12(b) of the Act: Name of Each Exchange on Title of Each Class Which Registered ------------------- ------------------------ Trustees' Certificates of Beneficial Interest New York Stock Exchange Securities registered pursuant to Section 12(g) of the Act--None 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 twelve months and (2) has been subject to such filing requirements for the past 90 days. Yes _X_ No ___ Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. _X_ Indicate by check mark whether the Registrant is an accelerated filer (as defined in Rule 12b-2 of the Act). Yes _X_ No ___ The aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and ask price of such common equity, as of the last business day of the Registrant's most recently completed second fiscal quarter, that being June 30, 2002, was $99,000,000. The number of shares of beneficial interest outstanding as of the close of the period covered by this report: Trustees' Certificates of Beneficial Interest--1,500,000 -------------------------------------------------------- DOCUMENTS INCORPORATED BY REFERENCE Portions of the Annual Report to Certificate Holders for the year ended December 31, 2002 are incorporated by reference into Part II. PART I Item 1. BUSINESS The Registrant ("Trust") owns interests in fee, mineral and nonmineral lands on the Mesabi Iron Range of Minnesota. The Registrant is a conventional trust organized under the laws of the State of Michigan pursuant to a Trust Instrument dated December 7, 1906. Income is derived through royalties on iron ore minerals (principally taconite) taken from these properties by lessees. The Registrant is presently involved solely with the leasing and care of these properties. There have been no significant changes in these functions since the beginning of the fiscal year. 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 April 6, 1995. According to the terms of the Trust Agreement, the Trust now terminates twenty years from April 6, 1995, that being April 6, 2015. The termination of the Trust on April 6, 2015 means that there will be no trading of the Trust's 1,500,000 certificates of beneficial interest (shares) on the New York Stock Exchange beyond that date. At the end of the Trust, 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 (term beneficiaries), while all property other than monies shall be conveyed and transferred to the reversionary beneficiary (formerly Lake Superior Company, Limited), or its successors or assigns (Glacier Park Company, a wholly owned subsidiary of Burlington Resources, Inc.). In addition, by the terms of a District Court Order dated November 29, 1982, the reversioner, in effect, is required to pay the balance in the Principal Charges account (as explained in the footnotes of the Financial Statements) which primarily represents the costs of acquiring homes and land parcels on the iron formation that are necessary for the orderly mine development by United States Steel Corporation under its 1959 lease with the Trustees. This account balance, which may increase or decrease, will be added to the cash distributable to the certificate holders of record at the termination of the Trust. 1 Item 1. BUSINESS--Continued The raw materials essential to the business of the Registrant are the minerals contained in properties owned and leased by the Registrant. Since the Registrant leases its properties to mining interests which control the amount of ore production, the Registrant itself has no direct control over the tonnage mined from its properties but is solely involved with administering the leases on the properties. Since operating companies insist on freedom to move from property to property as mining requirements dictate, such changes in production cannot be precisely reduced to financial forecasts. Registrant owns mineral interests in 12,033 acres on the Mesabi Iron Formation, including approximately 7,443 acres which are wholly owned, 1,080 acres in which Registrant is a tenant in common with a 91% interest, 3,350 acres in tenancy in common with a 50% interest and 160 acres in tenancy in common with other fractional interests. Of said total, 7,152 acres are under lease and 4,881 acres are unleased. Registrant cannot estimate at this time any tonnage for nonmagnetic taconite because of lack of drilling, testing and of any established large-scale commercial treatment method for Mesabi Iron Range nonmagnetic taconite. To give a better perspective on magnetic taconite, Registrant's engineers estimate that the magnetic taconite under lease as of January 1, 2003 was equivalent to approximately 371,122,000 tons of pellets. Present leases provide for minimum royalties aggregating approximately $3,110,000 for the year 2003 even if no taconite is mined. All of this amount is attributable to long-term taconite leases. None of the Registrant's leases provide for any right of renewal by the lessees upon expiration, even though unmined minerals might remain. Any extension of any such terminating lease would have to be negotiated in the same manner as unleased properties. All leases granted by the Registrant, except some covering remnants of natural ore, have provisions for escalation of royalty rates. Most of the taconite royalty rates are escalated on the basis of the price of pellets, the iron content, the Producers Price Index (PPI) (All Commodities), the PPI (Iron and Steel subgroup) or certain combinations of the above. 2 Item 1. BUSINESS--Continued There are other landowners on the Mesabi Iron Range, many of whom are private fees. Accordingly, firm data on competitive conditions in the iron ore industry is not available. Iron ore is also available from a number of other sources. The Registrant's non-taconite shipments have ceased as a source of income because the ore deposits have, for practical purposes, been exhausted. The mining of taconite by lessees is the most important part of the Registrant's business. Future development depends, to a large part, on the demand for taconite from the Registrant's properties by mining companies. The Registrant's royalty income is dependent on the number of tons of taconite shipped from its properties by the lessees, royalty rates, minimum royalties collected and liquidation of minimum royalties collected. Following is a summary of shipments by lessee during 2002, 2001 and 2000: TONS SHIPPED ------------------------------------- 2002 2001 2000 ------------------------------------- United States Steel LLC 3,791,949 4,252,383 3,969,669 Hibbing Taconite Company 3,210,144 1,287,831 2,454,681 National Steel Corporation 92,353 137,458 483,468 Cleveland Cliffs Erie LLC -- -- 34,721 ------------------------------------- 7,094,446 5,677,672 6,942,539 ===================================== At December 31, 2002, the Registrant employed 11 persons. The Registrant has been engaged in only one line of business, namely the leasing and maintenance of its mineral properties. The business of the Registrant is not seasonal, but income depends upon production by mining companies which lease its properties. The Registrant has no operations in foreign countries and has no customers or lessees in foreign countries. As previously reported, Section 646 of the Tax Reform Act of 1986, as amended, provided a special elective provision under which the Trust was allowed to convert from taxation as a corporation to that of a grantor trust. Pursuant to an Order of the Ramsey County District Court, the Trustees filed the Section 646 election with the Internal Revenue Service on December 30, 1988. On January 1, 1989, the Trust became exempt from federal and Minnesota corporate income taxes. For years 1989 and thereafter, certificate holders are taxed on their allocable share of the Trust's income whether or not the income is distributed. For certificate holder tax purposes, the Trust's income is determined on an annual basis, one-fourth then being allocated to each quarterly record date. 3 Item 1. BUSINESS--Continued The Trustees provided annual tax information in January 2003 to certificate holders of record with holdings on any of the four quarterly record dates during 2002. This information included a: Substitute Form 1099-MISC - This form reported one's 2002 allocable share of income from the Trust, distributions declared and any taxes withheld. (Foreign certificate holders received a Form 1042S.) Trust Supplemental Statement - This statement reported the number of units (shares) held on any of the four quarterly record dates in 2002. Tax Return Guide - This guide instructed the certificate holders as to the preparation of their income tax returns with respect to income allocated from the Trust and various deductions allowable. The Registrant does not maintain a website and therefore the Registrant does not make available through a website the annual, quarterly and other reports that it files with the Securities and Exchange Commission (SEC). The Registrant will furnish to investors free of charge, upon request, a paper copy of the reports that it files with the SEC. 4 Item 1. BUSINESS--Continued The following is a listing of the Registrant's current leases:
LESSEE NUMBER OF LEASED GNIOP TERMINATION LEASE ACRES INTEREST COUNTY LOCATION TERM PROVISION ------------------------------------------------------------------------------------------------------------------------- Bennett Annex 237 100% St. Louis 1/1/1965 to 12/31/2039 1 year Carmi-Campbell 1,597 100 St. Louis 7/1/1959 to 12/31/2010 1 year Enterprise-Mississippi (incl. Miss. #3 mine) 776 100 St. Louis and Itasca 1/1/1961 to 12/31/2010 6 months Hanna Taconite #1 40 100 Itasca 4/1/1962 to 12/31/2010 6 months Gray Annex 40 50 St. Louis 1/1/1974 to 1/1/2049 1 year Ontario 50% 1,397 50 St. Louis and Itasca 7/1/1978 to 12/31/2016 1 year Ontario 100% 400 100 St. Louis and Itasca 7/1/1978 to 12/31/2016 1 year Ontario #3 80 25 St. Louis 1/2/1993 to 12/31/2016 1 year Mahoning 980 100 St. Louis and Itasca 1/1/1979 to 12/31/2026 1 year Russell Annex 120 50 Itasca 1/1/1966 to 12/31/2040 1 year South Stevenson 180 100 St. Louis 4/1/1966 to 4/1/2041 1 year Minntac 1,725 100 St. Louis 1/1/1959 to 12/31/2057 6 months Wentworth 160 100 St. Louis 7/1/1965 to 6/30/2040 1 year Atkins 160 91 St. Louis 8/1/1984 to 7/31/2009 6 months
5 Item 2. PROPERTIES The Registrant owns interests in fee, mineral and nonmineral lands on the Mesabi Iron Range of Minnesota, most of which are leased to mining companies which extract taconite. A list of the leased properties is shown in table format in Item 1 above. The leases provide the lessees exclusive mining rights during the term of such leases. Taconite deposits are substantial. The properties have a reversionary interest as explained in Item 1 above. Item 3. LEGAL PROCEEDINGS In proceedings commenced in 1972, the Minnesota Supreme Court determined that while by the terms of the Trust, the Trustees are given discretionary powers to convert Trust assets to cash and to distribute the proceeds to certificate holders, they are limited in their exercise of those powers by the legal duty imposed by well-established law of trusts to serve the interests of both term beneficiaries and the reversionary beneficiary with impartiality. Thus, the Trustees have no duty to exercise the powers of sale and distribution unless required to do so to serve both term and reversionary interests; and, if the need arises, the Trustees may petition the District Court of Ramsey County, Minnesota, for further instructions defining what is required in a particular case to balance the interests of certificate holders and reversioner. Also, the Court, in effect, held that the Trust is a conventional trust, rather than a business trust, and must operate within the framework of well-established trust law. By a letter dated April 1, 2002, certificate holders of record as of March 1, 2002 and the reversioner were notified of a Hearing on May 1, 2002 in Ramsey County Courthouse, Saint Paul, Minnesota for the purpose of settling and allowing the Trust accounts for the year 2001. By Court Order signed and dated May 1, 2002, the 2001 accounts were settled and allowed in all respects. By previous Orders, the Court settled and allowed the accounts of the Trustees for preceding years of the Trust. Item 4. SUBMISSION OF MATTERS TO A VOTE OF CERTIFICATE HOLDERS None. 6 PART II Item 5. MARKET FOR THE REGISTRANT'S SHARES OF BENEFICIAL INTEREST AND RELATED SECURITY HOLDER MATTERS Shares of Beneficial Interest, Market Prices and Distributions on page 3 of the Annual Report to Certificate Holders for the year ended December 31, 2002 are incorporated herein by reference. Item 6. SELECTED FINANCIAL DATA Selected Financial Data on page 2 of the Annual Report to Certificate Holders for the year ended December 31, 2002 is incorporated herein by reference. Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Management's Discussion and Analysis of Financial Condition and Results of Operations on page 2 of the Annual Report to Certificate Holders for the year ended December 31, 2002 are incorporated herein by reference. Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The following financial statements of the Registrant, included in the Annual Report to Certificate Holders for the year ended December 31, 2002, are incorporated herein by reference: Balance Sheets - December 31, 2002 and 2001. Statements of Income - Years ended December 31, 2002, 2001 and 2000. Statements of Beneficiaries' Equity - Years ended December 31, 2002, 2001 and 2000. Statements of Cash Flows - Years ended December 31, 2002, 2001 and 2000. Notes to Financial Statements - December 31, 2002. Quarterly Results of Operations on page 4 of the Annual Report to Certificate Holders for the year ended December 31, 2002 are incorporated herein by reference. Item 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None. 7 PART III Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT The Registrant, being a trust, has no directors as such. The management of the Trust is vested in the following Trustees and officers whose terms of office are not fixed for a specified time: YEARS OF NAME AND POSITION AGE SERVICE ----------------------------------------------------------------------------- Joseph S. Micallef President of the Trustees 69 26 years Roger W. Staehle Trustee 69 21 Robert A. Stein Trustee 64 21 John H. Roe, III Trustee 63 1 Thomas A. Janochoski Vice President and Secretary 44 11 The principal occupations of the Trustees and officers during the last five years were as follows: JOSEPH S. MICALLEF President and Chief Executive Officer, Great Northern Iron Ore Properties; Consultant and Director, Fiduciary Counselling, Inc., St. Paul, Minnesota until December 31, 1998. ROGER W. STAEHLE Adjunct Professor, Institute of Technology, University of Minnesota; Industrial Consultant. ROBERT A. STEIN Executive Director and Chief Operating Officer, American Bar Association. JOHN H. ROE, III Chairman of the Board, Bemis Company, Inc., Minneapolis, Minnesota; Chief Executive Officer, Bemis Company, Inc., Minneapolis, Minnesota until May 4, 2000. THOMAS A. JANOCHOSKI Vice President and Secretary, Chief Financial Officer, Great Northern Iron Ore Properties. 8 Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT--Continued Executive employees in addition to those listed above include Roger P. Johnson, Manager of Mines and Chief Engineer. There are no family relationships among any of the above persons. Item 11. EXECUTIVE COMPENSATION SUMMARY COMPENSATION TABLE
NAME AND ALL OTHER PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION ------------------------------------------------------------------------------------------- CEO/President of the Trustees: Joseph S. Micallef 2002 $100,000 $35,000 $ -- 2001 100,000 35,000 -- 2000 90,000 35,000 -- CFO/Vice President and Secretary: Thomas A. Janochoski 2002 102,533 3,500 5,000 2001 91,633 3,500 3,100 2000 87,000 -- --
CHIEF EXECUTIVE OFFICER (CEO)/PRESIDENT OF THE TRUSTEES COMPENSATION The Trust Agreement (as modified by Court Orders, the last being effective January 1, 2001) provides for annual compensation to the CEO/President of the Trustees of $100,000 and, in addition, a sum equal to 1% of the excess of gross income of the Trust over $5,000,000 for that year until his compensation shall reach $135,000. By Court Orders previous to 2001, annual compensation to the CEO/President of the Trustees for the year 2000 was set at $90,000 and, in addition, a sum equal to 1% of the excess of gross income of the Trust over $5,000,000 for that year until his compensation shall reach $125,000. TRUSTEE COMPENSATION (OTHER THAN THE CEO/PRESIDENT OF THE TRUSTEES) The Trust Agreement (as modified by Court Orders, the last being effective January 1, 2001) provides for annual compensation to each Trustee (other than the CEO/President of the Trustees) of $50,000. By Court Orders previous to 2001, annual compensation to each Trustee (other than the CEO/President of the Trustees) for the year 2000 was set at $40,000. 9 Item 11. EXECUTIVE COMPENSATION--Continued Because the compensation of the Trustees and CEO/President of the Trustees is established by the Trust Agreement (as modified by Court Orders), there is no compensation committee for the Trustees and, accordingly, there is no Trustee compensation committee report pertaining to their compensation. There are no other arrangements pursuant to which any Trustee was compensated for any services provided as a Trustee, including that of committee participation or special assignment. There are no options, stock appreciation rights, long-term performance-based incentive plans or retirement benefits applicable to any of the Trustees (including the CEO/President of the Trustees) and, accordingly, disclosure tables with respect to such items have been omitted. EXECUTIVE OFFICER COMPENSATION OF THE CHIEF FINANCIAL OFFICER (CFO)/ VICE PRESIDENT AND SECRETARY The Board of Trustees, as a whole, determines compensation of executive officers (other than the CEO/President of the Trustees). No compensation committee report exists as the Trust Agreement empowers and grants the Trustees authority to establish salaries for all employees of the Trust. The Trustees base employee salary compensation on market data obtained from time to time, as deemed necessary. The CFO's Bonus compensation is based on 10% of the CEO/President's Bonus compensation. All Other Compensation of the CFO represents an accrual and interest earnings established in a deferred compensation plan. The following table shows the CFO's estimated annual pension benefit payable upon retirement at various years of vested service as indicated: PENSION PLAN TABLE
AVERAGE ANNUAL SALARY ESTIMATED ANNUAL PENSION BENEFIT PAYABLE FOR HIGHEST 60 MONTHS FOR YEARS OF VESTED SERVICE INDICATED OF CONSECUTIVE -------------------------------------------------------------------- SERVICE 10 15 20 25 ------------------------- -------------------------------------------------------------------- $ 85,000 $19,100 $28,700 $38,300 $63,800 90,000 20,300 30,400 40,500 67,500 95,000 21,400 32,100 42,800 71,300 100,000 22,500 33,800 45,000 75,000 105,000 23,600 35,400 47,300 78,800 110,000 24,800 37,100 49,500 82,500 115,000 25,900 38,800 51,800 86,300 120,000 27,000 40,500 54,000 90,000 125,000 28,100 42,200 56,300 93,800 130,000 29,300 43,900 58,500 97,500
10 Item 11. EXECUTIVE COMPENSATION--Continued The CFO's estimated annual pension benefit payable upon retirement from the Trust's defined Pension Plan is based on the highest 60 consecutive months average annual salary as disclosed in the Summary Compensation Table above, the years of vested service, a straight-life annuity and no offsets or deductions. The CFO is presently entitled to 13 years of vested service as of December 31, 2002. Upon the Trust termination on April 6, 2015, the CFO would be entitled to 25 years of vested service. Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT (a) The only authorized securities of the Registrant are Trustees' Certificates of Beneficial Interest. The holders of these securities do not have voting rights. There were no entities holding more than 5% of the Certificates of Beneficial Interest outstanding, of record and/or beneficially, as of December 31, 2002. (b) There were no securities owned by the Trustees or officers as of December 31, 2002. Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS None. Item 14. CONTROLS AND PROCEDURES Based on their most recent review, which was completed within 90 days of the filing of this report, the Trust's Chief Executive Officer and Chief Financial Officer have concluded that the Trust's disclosure controls and procedures are effective to ensure that information required to be disclosed by the Trust in the reports it files or submits under the Securities Exchange Act of 1934, as amended, is accumulated and communicated to the Trust's management, including its Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure and are effective to ensure that such information is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms. There were no significant changes in the Trust's internal controls or in other factors that could significantly affect those controls subsequent to the date of their evaluation. 11 PART IV Item 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K (a) (1) and (2) - The response to this portion of Item 15 is submitted as a separate section of this report. (3) Listing of Exhibits: Exhibit 3 - Copy of Trust Agreement and Rules and Regulations for Management of the Trust (filed as Exhibit A to Form 11 of Great Northern Iron Ore Properties filed on May 6, 1935 as published under date of March 30, 1935 and incorporated by reference) Exhibit 4 - Specimen of Securities Registered Hereunder (filed as Exhibit E to Form 11 of Great Northern Iron Ore Properties filed on May 6, 1935 as published under date of March 30, 1935 and incorporated by reference) Exhibit 10 - Court Order on Trustee Compensation dated May 16, 2001 Exhibit 13 - Annual Report to Certificate Holders Exhibit 23 - Consent of Independent Auditors Exhibit 99(a) - Tax Return Guide Exhibit 99(b) - Audit Committee Charter Exhibit 99(c) - Report of Audit Committee (b) Reports on Form 8-K - None. (c) Exhibits - The response to this portion of Item 15 is submitted as a separate section of this report. (d) Financial Statement Schedules - The response to this portion of Item 15 is submitted as a separate section of this report. 12 SIGNATURES ---------- Pursuant to the requirements of Section 13 or 15(d) 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) /s/ Joseph S. Micallef 2/14/03 ------------------------------------------- --------------- Joseph S. Micallef, Chief Executive Officer, Date Trustee and President of the Trustees Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated. /s/ Roger W. Staehle 2/14/03 ------------------------------------------- --------------- Roger W. Staehle, Trustee Date /s/ Robert A. Stein 2/14/03 ------------------------------------------- --------------- Robert A. Stein, Trustee Date /s/ John H. Roe, III 2/14/03 ------------------------------------------- --------------- John H. Roe, III, Trustee Date /s/ Thomas A. Janochoski 2/14/03 ------------------------------------------- --------------- Thomas A. Janochoski, Vice President and Date Secretary, Chief Financial Officer 13 CERTIFICATION PURSUANT TO THE SARBANES-OXLEY ACT OF 2002 -------------------------------------------------------- I, Joseph S. Micallef, President of the Trustees of Great Northern Iron Ore Properties and Chief Executive Officer, certify that: 1. This Annual Report fully complies with the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934 and that the information contained in this Annual Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant; 2. I have reviewed this Annual Report on Form 10-K of Great Northern Iron Ore Properties; 3. Based on my knowledge, this Annual 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 Annual Report; 4. Based on my knowledge, the financial statements, and other financial information included in this Annual 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 Annual Report; 5. 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-14 and 15d-14) for the Registrant and we have: a) designed such disclosure controls and procedures 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 Annual Report is being prepared; b) evaluated the effectiveness of the Registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this Annual Report ("Evaluation Date"); and c) presented in this Annual Report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 14 6. The Registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the Registrant's auditors and the audit committee of the Registrant's board of directors (or persons performing the equivalent function): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the Registrant's ability to record, process, summarize and report financial data and have identified for the Registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal controls; and 7. The Registrant's other certifying officers and I have indicated in this Annual Report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: February 14, 2003 By: /s/ Joseph S. Micallef ----------------- --------------------------------------------- Joseph S. Micallef, President of the Trustees and Chief Executive Officer 15 CERTIFICATION PURSUANT TO THE SARBANES-OXLEY ACT OF 2002 -------------------------------------------------------- I, Thomas A. Janochoski, Vice President and Secretary to the Trustees of Great Northern Iron Ore Properties and Chief Financial Officer, certify that: 1. This Annual Report fully complies with the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934 and that the information contained in this Annual Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant; 2. I have reviewed this Annual Report on Form 10-K of Great Northern Iron Ore Properties; 3. Based on my knowledge, this Annual 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 Annual Report; 4. Based on my knowledge, the financial statements, and other financial information included in this Annual 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 Annual Report; 5. 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-14 and 15d-14) for the Registrant and we have: a) designed such disclosure controls and procedures 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 Annual Report is being prepared; b) evaluated the effectiveness of the Registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this Annual Report ("Evaluation Date"); and c) presented in this Annual Report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 16 6. The Registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the Registrant's auditors and the audit committee of the Registrant's board of directors (or persons performing the equivalent function): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the Registrant's ability to record, process, summarize and report financial data and have identified for the Registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal controls; and 7. The Registrant's other certifying officers and I have indicated in this Annual Report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: February 14, 2003 By: /s/ Thomas A. Janochoski ----------------- --------------------------------------------- Thomas A. Janochoski, Vice President and Secretary, Chief Financial Officer 17 ANNUAL REPORT ON FORM 10-K ITEM 15(a)(1) and (2) and ITEM 15(d) LIST OF FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES FINANCIAL STATEMENT SCHEDULES YEAR ENDED DECEMBER 31, 2002 GREAT NORTHERN IRON ORE PROPERTIES W-1290 First National Bank Building 332 Minnesota Street Saint Paul, Minnesota 55101-1361 FORM 10-K--Item 15(a)(1) and (2) GREAT NORTHERN IRON ORE PROPERTIES LIST OF FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES The following financial statements of Great Northern Iron Ore Properties, included in the Registrant's Annual Report to Certificate Holders for the year ended December 31, 2002, are incorporated by reference in Item 8: Balance Sheets - December 31, 2002 and 2001 Statements of Income - Years ended December 31, 2002, 2001 and 2000 Statements of Beneficiaries' Equity - Years ended December 31, 2002, 2001 and 2000 Statements of Cash Flows - Years ended December 31, 2002, 2001 and 2000 Notes to Financial Statements - December 31, 2002 All Item 15(d) schedules for which provision is made in the applicable accounting regulation of the Securities and Exchange Commission are not required under the related instructions or are inapplicable and therefore have been omitted. 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