-----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, OKVXh2l0zmRAKGfA1S+Zei/SEXzFVAEHQ/PlVdEzWreOp73mkVmGE1Mr/BRG5WJS waxvXa2bHJuWKO6/M00krg== 0000897101-06-000431.txt : 20070305 0000897101-06-000431.hdr.sgml : 20070305 20060224101627 ACCESSION NUMBER: 0000897101-06-000431 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 11 CONFORMED PERIOD OF REPORT: 20051231 FILED AS OF DATE: 20060224 DATE AS OF CHANGE: 20070131 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-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-00701 FILM NUMBER: 06641277 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-K 1 grnorth060629_10k.htm FORM 10-K DATED DECEMBER 31, 2005 Great Northern Iron Ore Properties Form 10-K dated December 31, 2005

Annual Report on Form 10-K

Great Northern Iron Ore Properties

December 31, 2005

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, 2005

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 Exchange Act:

Title of Each Class		Name of Each Exchange on Which Registered
Trustees’ Certificates of Beneficial Interest		New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Exchange Act—None

Indicate by check mark if the registrant is a well-known seasoned issuer (as defined in Rule 405 of the Securities Act). Yes o No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act. Yes o No x

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 o

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 a large accelerated filer, an accelerated filer or a non-accelerated filer (as defined in Rule 12b-2 of the Act).

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

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

As of the last business day of the registrant’s most recently completed second fiscal quarter, that being June 30, 2005, the aggregate market value of the registrant’s certificates (shares) of beneficial interest held by non-affiliates of the registrant was $158,250,000 based on the closing sale price as reported on the New York Stock Exchange – Composite Inter-Market Trading System.

The number of certificates (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, 2005, attached hereto as Exhibit 13, are incorporated by reference into Part II.

PART I

Item 1.

BUSINESS

The Registrant (“Trust” or “we” or “our” or “GNIOP”) owns interests in fee, both 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 Agreement dated December 7, 1906. Because the Trust properties and offices are all located in Minnesota, the Trust is under the jurisdiction of the Ramsey County District Court in Saint Paul, Minnesota. 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 persons named in the Trust Agreement. The last survivor of these eighteen named in the Trust Agreement died April 6, 1995. Accordingly, the Trust terminates twenty years from April 6, 1995.

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

Item 1.

BUSINESS – Continued

We have previously provided information in our various Securities and Exchange Commission (SEC) filings, including our Annual Report, about the final distribution payable to the certificate holders upon the Trust’s termination. The exact final distribution, though not determinable at this time, will generally consist of the sum of the Trust’s net monies (essentially, total assets less liabilities and properties) and the balance in the Principal Charges account, less any and all expenses and obligations of the Trust upon termination. To offer a hypothetical example, without factoring in any expenses and obligations of the Trust upon its termination, and using the financial statement values as of December 31, 2005, the net monies were approximately $10.5 million and the Principal Charges account balance was approximately $5.3 million, resulting in a final distribution payable of approximately $15.8 million, or about $10.53 per share. After payment of this final distribution, the certificates of beneficial interest (shares) would be cancelled and will have no further value. It is important to note, however, that the actual net monies on hand and the Principal Charges account balance will most likely fluctuate during the ensuing years and will not be “final” until after the termination and wind-down of the Trust. We offer this example to further inform investors about the conceptual nature of the final distribution and do not imply or guarantee a specific known final distribution amount.

The raw materials essential to the business of the Registrant are the minerals contained in properties owned and leased by the Registrant. Because we lease our properties to mining interests that control the amount of ore production, we do not have direct control over the tonnage mined from our properties; we are 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.

The 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 the 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.

The Registrant cannot estimate at this time any tonnage for nonmagnetic taconite because of lack of drilling, testing and any established large-scale commercial treatment method for Mesabi Iron Range nonmagnetic taconite. To give a better perspective on magnetic taconite, our engineers estimate that the magnetic taconite under lease as of December 31, 2005, was equivalent to approximately 329,708,000 tons of pellets.

Item 1.

BUSINESS – Continued

Present leases provide for minimum royalties aggregating approximately $3,670,000 for the year 2006 even if no taconite is mined. This entire 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.

There are other landowners on the Mesabi Iron Range, including mining companies and numerous other private fee owners. 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. However, the generally close proximity of our lands to the mining facilities tends to provide a competitive advantage to the Trust. In addition, other typical competitive factors include royalty rates, quality and geological characteristics of the ore bodies available, production guarantees granted to the fee owners, minimum royalty provisions and other matters. 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 our business. Future development depends, to a large part, on the demand for taconite from our 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 (operating facility) during 2005, 2004 and 2003:

	Tons Shipped
	2005	2004	2003
U.S. Steel Corporation – Minntac	5,335,518	4,958,405	6,153,688
Hibbing Taconite Company	2,715,470	3,782,956	3,538,467
U.S. Steel Corporation – Keetac	622,210	425,839	80,183

	8,673,198	9,167,200	9,772,338

Item 1.

BUSINESS – Continued

At December 31, 2005, the Registrant employed ten persons. We have been engaged in only one line of business, namely the leasing and maintenance of our mineral properties. Our business is not seasonal, but income depends upon production by mining companies which lease our properties. We have no operations in foreign countries and have 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.

The Trustees provided annual income tax information in January 2006 to certificate holders of record with holdings on any of the four quarterly record dates during 2005. This information included a:

Substitute Form 1099-MISC – This form reported one’s 2005 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 2005.

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 we do not make available through a website the annual, quarterly and other reports that we file with the SEC. We will furnish to investors free of charge, upon request, a paper copy of the reports that we file with the SEC. We will also furnish to investors free of charge, upon request, a paper copy of the Trust’s Code of Ethics, which has been signed and affirmed by all employees, Trustees and officers of the Trust. To request any of these documents, please contact the Trust office.

Item 1.

BUSINESS – Continued

The following is a listing of the Registrant’s current leases:

Lease	Number of Leased Acres	GNIOP Interest		County Location	Term	Lessee Termination 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 & Sect. 18 mines)	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/Theodore	200	50		Itasca	1/1/1966 to 12/31/2040	1 year

L & W/Leetonia	80	50		St. Louis	1/1/2005 to 12/31/2014	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
Atkins	160	91		St. Louis	8/1/1984 to 7/31/2009	6 months

Item 1A.

RISK FACTORS

Certain expectations and projections regarding future performance of the Registrant referenced in this report are forward-looking statements. These expectations and projections are based on currently available industry and financial data and may be subject to certain events and uncertainties beyond our control. We caution readers that in addition to factors described elsewhere in this report, the following factors and comments, among others, could cause our operations and financial results to differ materially from the expectations and projections contained in the forward-looking statements.

The Registrant is dependent on a limited number of customers.
Our lessees (customers) primarily include Minntac and Keewatin Taconite Company (“Keetac”), owned and operated by United States Steel Corporation, and Hibbing Taconite Company (“Hibtac”), owned by Mittal Steel USA, Cleveland Cliffs Inc. and Stelco, and operated by Cleveland Cliffs Inc. Because our revenues are primarily dependent upon a limited number of customers, there are associated inherent risks resulting therefrom. While the steel and taconite industries are generally having good years, any significant adverse event at any of our primary lessees, or the loss of any of our primary lessees, could materially adversely affect our future financial results.

The Registrant is subject to market forces beyond its control.
A decline in market demand for steel, and correspondingly taconite, could adversely affect our financial results. However, other related and sometimes compensating factors include our lessees’ operating levels, ore body quality, metallurgical and geological characteristics, proximity of our lands, extreme weather conditions and labor contracts at the mines. Though we are not a party to these labor contracts, all pertinent labor contracts affecting production from our lands have been ratified by the steelworkers and extend until mid-2008.

The Registrant’s royalty rates are typically tied to producer price indices.
Royalty rates can fluctuate due to the escalation and de-escalation of producer price indices as a result of provisions present in many of our leases. To the extent these indices decline (All Commodities or the Iron and Steel subgroup), royalty rates, and correspondingly royalty income, could be adversely affected. Conversely, higher producer price indices may increase royalty rates and royalty income.

Item 1A.

RISK FACTORS – Continued

The loss of grantor trust status would have adverse tax consequences.
Compliance with Section 646 of the Internal Revenue Code is integral to the level of distributions paid to the certificate holders. Should it be determined that we have violated the requirements of Section 646, the Trust would be taxed as a corporation versus a grantor trust. This would mean our income would be taxable upon our receipt and again upon receipt by the certificate holders. It is the Trustees’ opinion, based on independent tax firm reviews, that the Trust has remained in compliance with the provisions of Section 646 since its election in 1988.

Item 1B.

UNRESOLVED STAFF COMMENTS

None.

Item 2.

PROPERTIES

The Registrant owns interests in fee, both mineral and nonmineral lands, on the Mesabi Iron Range of Minnesota, most of which are leased to mining companies that 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 March 9, 2005, certificate holders of record as of December 31, 2004, and the reversioner were notified of a Hearing on June 1, 2005, in Ramsey County Courthouse, Saint Paul, Minnesota, for the purpose of settling and allowing the Trust accounts for the year 2004. By Court Order signed and dated June 1, 2005, the 2004 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 3.

LEGAL PROCEEDINGS – Continued

By a letter dated September 1, 2005, certificate holders of record as of June 30, 2005, and the reversioner were notified of a Hearing on October 19, 2005, in Ramsey County Courthouse, Saint Paul, Minnesota, for the purpose of requesting increases in Trustee compensation. By Court Order signed and dated October 20, 2005, the Court granted the requested fee increase of $10,000 per annum for each Trustee (including the President), effective July 1, 2005, and, further, granted the requested potential bonus increase of $10,000 per annum for the President of the Trustees, effective for the year 2005.

Item 4.

SUBMISSION OF MATTERS TO A VOTE OF CERTIFICATE HOLDERS

None.

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 8 of the Annual Report to Certificate Holders for the year ended December 31, 2005, attached hereto as Exhibit 13, are incorporated herein by reference.

Item 6.

SELECTED FINANCIAL DATA

Selected Financial Data (Summary of Operations) on page 2 of the Annual Report to Certificate Holders for the year ended December 31, 2005, attached hereto as Exhibit 13, is incorporated herein by reference.

Item 7.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Trustees’ & Management’s Discussion and Analysis of Financial Condition and Results of Operations on pages 3, 4, 5 and 6 of the Annual Report to Certificate Holders for the year ended December 31, 2005, attached hereto as Exhibit 13, are incorporated herein by reference.

Item 7A.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

None.

Item 8.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The following financial statements of the Registrant are included in the Annual Report to Certificate Holders for the year ended December 31, 2005, attached hereto as Exhibit 13, and are incorporated herein by reference:

Balance Sheets – December 31, 2005 and 2004.

Statements of Income – Years ended December 31, 2005, 2004 and 2003.

Statements of Beneficiaries’ Equity – Years ended December 31, 2005, 2004 and 2003.

Statements of Cash Flows – Years ended December 31, 2005, 2004 and 2003.

Notes to Financial Statements – December 31, 2005.

Quarterly Results of Operations on page 9 of the Annual Report to Certificate Holders for the year ended December 31, 2005, attached hereto as Exhibit 13, are incorporated herein by reference.

Item 9.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

Item 9A.

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 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 Securities and Exchange Commission rules and forms.

Management’s Report On Internal Control Over Financial Reporting on page 7 of the Annual Report to Certificate Holders for the year ended December 31, 2005, attached hereto as Exhibit 13, is incorporated herein by reference.

Item 9A.

CONTROLS AND PROCEDURES – Continued

The Report of Ernst & Young LLP, Independent Registered Public Accounting Firm, on Management’s Report On Internal Control Over Financial Reporting on pages 21 and 22 of the Annual Report to Certificate Holders for the year ended December 31, 2005, attached hereto as Exhibit 13, is incorporated herein by reference.

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 (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act).

Item 9B.

OTHER INFORMATION

None.

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:

Name and Position		Age	Years of Service in Position

Joseph S. Micallef	Trustee and President of the Trustees, Chief Executive Officer	72	29
Roger W. Staehle ⁽¹⁾	Independent Trustee	72	24
Robert A. Stein ⁽²⁾	Independent Trustee	67	24
John H. Roe, III ⁽³⁾	Independent Trustee	66	4
Thomas A. Janochoski	Vice President & Secretary, Chief Financial Officer	47	14

	_________________
	⁽¹⁾	Roger W. Staehle is an independent member, pursuant to NYSE standards, of the Trust’s Audit Committee.
	⁽²⁾	Robert A. Stein is an independent member, pursuant to NYSE standards, and the chairman of the Trust’s Audit Committee. He is deemed, for purposes thereto, to be a financial expert. He also presides at all non-management executive sessions.
	⁽³⁾	John H. Roe, III is an independent member, pursuant to NYSE standards, of the Trust’s Audit Committee. He is deemed, for purposes thereto, to be a financial expert.

Item 10.

DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT – Continued

The Board of Trustees meets quarterly throughout the year. The principal occupations of the Trustees and officers during the last five years were as follows:

JOSEPH S. MICALLEF

President of the Trustees and Chief Executive Officer, Great Northern Iron Ore Properties.

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 until May 5, 2005.

THOMAS A. JANOCHOSKI

Vice President & Secretary, Chief Financial Officer, Great Northern Iron Ore Properties.

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 Principal Position	Year	Salary		Bonus		All Other Compensation
CEO/President of the Trustees:
Joseph S. Micallef	2005	$	155,000	$	60,000	$	—
	2004		150,000		50,000		—
	2003		150,000		50,000		—

CFO/Vice President & Secretary:
Thomas A. Janochoski	2005	$	129,667	$	6,000	$	8,200
	2004		123,133		5,000		6,800
	2003		113,433		5,000		6,100

Item 11.

EXECUTIVE COMPENSATION – Continued

Chief Executive Officer (CEO)/President of the Trustees Compensation

The Trust Agreement (as modified by Court Orders, the last being effective July 1, 2005) provides for annual compensation to the CEO/President of the Trustees of $160,000 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 total compensation shall reach $220,000. By Court Orders previous to 2005, annual compensation to the CEO/President of the Trustees for the years 2004 and 2003 was set at $150,000 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 total compensation shall reach $200,000.

Trustee Compensation (Other Than the CEO/President of the Trustees)

The Trust Agreement (as modified by Court Orders, the last being effective July 1, 2005) provides for annual compensation to each Trustee (other than the CEO/President of the Trustees) of $60,000. By Court Orders previous to 2005, annual compensation to each Trustee (other than the CEO/President of the Trustees) for the years 2004 and 2003 was set at $50,000.

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, nor is there a performance graph generated to link total return to executive 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 & 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.

Item 11.

EXECUTIVE COMPENSATION – Continued

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 for Highest 60 Months of Consecutive Service		Estimated Annual Pension Benefit Payable for Years of Vested Service Indicated
		15		20		25
$	110,000	$	37,100	$	49,500	$	82,500
	120,000		40,500		54,000		90,000
	130,000		43,900		58,500		97,500
	140,000		47,300		63,000		105,000
	150,000		50,600		67,500		112,500
	160,000		54,000		72,000		120,000
	170,000		57,400		76,500		127,500
	180,000		60,800		81,000		135,000
	190,000		64,100		85,500		142,500

The CFO’s estimated annual pension benefit payable upon retirement from the Trust’s defined benefit 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 16 years of vested service as of December 31, 2005. 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. These securities are traded on the New York Stock Exchange under the ticker symbol “GNI” (CUSIP No. 391064102). 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, 2005.

(b)

There were no securities owned by the Trustees or officers as of December 31, 2005.

Item 13.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

None.

Item 14.

PRINCIPAL ACCOUNTANT FEES AND SERVICES

All audit and non-audit services (printing and reproduction services) were preapproved by the Audit Committee. Estimated fees in 2005 for the annual audit services are $67,700, for audited-related services are $1,300, for tax services are $0 and for all other services are $2,750. Fees paid in 2004 for the annual audit services were $79,250, for audit-related services were $1,300, for tax services were $0 and for all other services were $2,750.

PART IV

Item 15.

EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a)

(1)

The following financial statements of Great Northern Iron Ore Properties are included in the Registrant’s Annual Report to Certificate Holders for the year ended December 31, 2005, attached hereto as Exhibit 13, and are incorporated by reference in Item 8:

Balance Sheets – December 31, 2005 and 2004.

Statements of Income – Years ended December 31, 2005, 2004 and 2003.

Statements of Beneficiaries’ Equity – Years ended December 31, 2005, 2004 and 2003.

Statements of Cash Flows – Years ended December 31, 2005, 2004 and 2003.

Notes to Financial Statements – December 31, 2005.

(2)

All Item 15(c) schedules for which provision is made in the applicable accounting regulation of the SEC are not required under the related instructions or are inapplicable and therefore have been omitted.

(3)

Listing of Exhibits – See the “Exhibit Index” immediately following the signature page.

(b)

Exhibits – The response to this portion of Item 15 is set forth above in Item 15(a)(3) of this report.

(c)

Financial Statement Schedules – The response to this portion of Item 15 is set forth above in Item 15(a)(2) of this report.

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		February 16, 2006

Joseph S. Micallef, Chief Executive Officer, Trustee and President of the Trustees		Date

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		February 16, 2006

Roger W. Staehle, Trustee		Date


/s/ Robert A. Stein		February 16, 2006

Robert A. Stein, Trustee		Date


/s/ John H. Roe, III		February 16, 2006

John H. Roe, III, Trustee		Date


/s/ Thomas A. Janochoski		February 16, 2006

Thomas A. Janochoski, Vice President &		Date
Secretary, Chief Financial Officer

ANNUAL REPORT ON FORM 10-K

EXHIBIT INDEX

YEAR ENDED DECEMBER 31, 2005

GREAT NORTHERN IRON ORE PROPERTIES

W-1290 First National Bank Building
332 Minnesota Street
Saint Paul, Minnesota 55101-1361

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 October 20, 2005

Exhibit 13 – Annual Report to Certificate Holders

Exhibit 23 – Consent of Independent Registered Public Accounting Firm

Exhibit 31.1 – Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Exhibit 31.2 – Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Exhibit 32 – Certifications of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished but not filed)

Exhibit 99(a) – Tax Return Guide

Exhibit 99(b) – Audit Committee Charter

Exhibit 99(c) – Report of Audit Committee

EX-10 3 grnorth060629_ex10.htm COURT ORDER ON TRUSTEE COMPENSATION Exhibit 10 to Great Northern Iron Ore Properties Form 10-K dated December 31, 2005

Exhibit 10

Court Order on Trustee Compensation dated October 20, 2005

STATE OF MINNESOTA	DISTRICT COURT
COUNTY OF RAMSEY	SECOND JUDICIAL COURT
	Court File No. C5-72-386008


In the Matter of the Trust known as Great Northern Iron Ore Properties	ORDER

This matter came on for hearing before Referee Dean Maus on October 19, 2005, upon the Petition for Instructions filed by Joseph S. Micallef, Roger W. Staehle, Robert A. Stein and John H. Roe III, the duly appointed and acting Trustees of the Trust known as Great Northern Iron Ore Properties.

Sue Ann Nelson of Fredrikson & Byron, P.A., appeared on behalf of the Trustees of the Trust known as Great Northern Iron Ore Properties.

The Court, having heard the arguments of counsel, and based upon the Petition, the affidavits filed in support of the Petition and the entire files and record herein,

IT IS HEREBY ORDERED:

1. Due, published and mailed notice of this hearing was given pursuant to the Court’s Order dated August 24, 2005, as more fully appears from the proof of publication and the Affidavits of Mailing contained in the file.

2. The requested increase in the compensation of the President of the Trust from $150,000 per annum to $160,000 per year and an increase in the bonus component from a maximum of $50,000 to a maximum of $60,000 per year (computed as 1% of the excess of the gross income of the Trust over $5 million for the year up to the maximum of $60,000), both effective as of July 1, 2005, with the $60,000 bonus component payable in full for 2005 subject to the formula calculation, is granted.

3. The requested increase in the compensation of the Trustees other than the President from $50,000 to $60,000 per year, effective as of July 1, 2005, is granted.


Order Recommended by:

/s/ Dean Maus	/s/ Margaret M. Marrinan

Dean Maus	Margaret M. Marrinan
District Court Referee	Judge of District Court
October 19, 2005	October 20, 2005

EX-13 4 grnorth060629_ex13.htm ANNUAL REPORT TO CERTIFICATE HOLDERS Exhibit 13 to Great Northern Iron Ore Properties Form 10-K dated December 31, 2005

Exhibit 13

Annual Report to Certificate Holders

GREAT NORTHERN IRON
ORE PROPERTIES

Ninety-Ninth
Annual Report of the Trustees
to Certificate Holders

for
Year Ended December 31, 2005

GREAT NORTHERN IRON ORE PROPERTIES

W-1290 First National Bank Building
332 Minnesota Street
Saint Paul, Minnesota 55101-1361

(651) 224-2385
Fax (651) 224-2387

	Trustees	Officers
	Joseph S. Micallef President of the Trustees Roger W. Staehle* Robert A. Stein* John H. Roe, III* *Audit Committee	Joseph S. Micallef Chief Executive Officer Thomas A. Janochoski Chief Financial Officer Vice President & Secretary Roger P. Johnson Chief Engineer Manager of Mines

Shareholder Relations Department, Transfer Office
and Registrar

Wells Fargo Bank, N.A.
P.O. Box 64854
Saint Paul, Minnesota 55164-0854

Toll-free: 1-800-468-9716

Mesabi Iron Range Office

801 East Howard Street
Hibbing, Minnesota 55746-0429

(218) 262-3886
Fax (218) 262-4295

GREAT NORTHERN IRON ORE PROPERTIES

SUMMARY OF OPERATIONS

	Year Ended December 31
	2005			2004			2003			2002			2001
Shipments from our mines (tons)		8,673,198			9,167,200			9,772,338			7,094,446			5,677,672
Royalty income	$	17,998,451		$	14,141,775		$	11,800,870		$	9,141,886		$	9,810,504
Other income	$	362,761		$	305,623		$	382,534		$	443,763		$	590,286
Net income	$	15,720,620		$	12,242,010		$	9,967,544		$	7,661,762		$	8,646,878
Total assets	$	19,455,519		$	18,407,999		$	17,413,589		$	16,873,663		$	17,455,283
Average shares outstanding		1,500,000			1,500,000			1,500,000			1,500,000			1,500,000
Earnings per share, based on weighted-average shares outstanding during the year	$	10.48		$	8.16		$	6.65		$	5.11		$	5.76
Declared distributions per share	$	10.40	⁽¹⁾	$	8.20	⁽²⁾	$	6.50	⁽³⁾	$	5.40	⁽⁴⁾	$	6.00	⁽⁵⁾

(1) $2.20 pd 4/29/05; $2.40 pd 7/29/05; $2.80 pd 10/31/05; $3.00 pd 1/31/06
(2) $1.80 pd 4/30/04; $1.90 pd 7/30/04; $2.10 pd 10/29/04; $2.40 pd 1/31/05
(3) $1.50 pd 4/30/03; $1.60 pd 7/31/03; $1.70 pd 10/31/03; $1.70 pd 1/30/04
(4) $1.10 pd 4/30/02; $1.40 pd 7/31/02; $1.40 pd 10/31/02; $1.50 pd 1/31/03
(5) $1.40 pd 4/30/01; $1.50 pd 7/31/01; $1.50 pd 10/31/01; $1.60 pd 1/31/02

Trustees’ & Management’s Discussion and Analysis of Financial Condition
and Results of Operations

Overview: Great Northern Iron Ore Properties (“Trust”) is a conventional nonvoting trust organized under the laws of the State of Michigan pursuant to a Trust Agreement dated December 7, 1906. The Trust owns interests in fee, both mineral and nonmineral lands, on the Mesabi Iron Range in northern Minnesota. With the properties and offices all located in Minnesota, the Trust is under the jurisdiction of the Ramsey County District Court in Saint Paul, Minnesota.

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

The exact final distribution, though not determinable at this time, will generally consist of the sum of the Trust’s net monies (essentially, total assets less liabilities and properties) and the balance in the Principal Charges account, less any and all expenses and obligations of the Trust upon termination. To offer a hypothetical example, without factoring in any expenses and obligations of the Trust upon its termination, and using the financial statement values as of December 31, 2005, the net monies were approximately $10.5 million and the Principal Charges account balance was approximately $5.3 million, resulting in a final distribution payable of approximately $15.8 million, or about $10.53 per share. After payment of this final distribution, the certificates of beneficial interest (shares) would be cancelled and will have no further value. It is important to note, however, that the actual net monies on hand and the Principal Charges account balance will most likely fluctuate during the ensuing years and will not be “final” until after the termination and wind-down of the Trust. We offer this example to further inform investors about the conceptual nature of the final distribution and do not imply or guarantee a specific known final distribution amount.

The Trust is solely involved with the leasing and care of its properties. The management of the Trust is vested in the Trustees. The Trustees have no duty to

sell property unless required to do so to serve both the term beneficiaries and reversionary beneficiary impartially; and, if the need arises, the Trustees may petition the Court for further instructions defining what is required in a particular case to balance the interests of the certificate holders and reversioner. The major source of income to the Trust is earned royalties derived from taconite production from the Trust’s properties by the Trust’s lessees (customers) and minimum royalties, pursuant to mineral leases. “Earned royalties” are based on the taconite tonnage extracted (also referred to as produced or shipped) from the Trust’s lands applied to a royalty rate as defined in the various specific and confidential operating agreements (also referred to as leases) with the Trust’s lessees. Certain leases have “minimum royalty” provisions that require payment to the Trust for holding the leasehold interest. The leases are generally very long-term in nature and, while they periodically are amended at the request of a lessee, the Trust is bound by the lease provisions throughout the term of the lease.

Pursuant to a Court Order in 1988, the Trustees filed an election under Section 646 of the Internal Revenue Code with the Internal Revenue Service that allowed the Trust to be taxed as a grantor trust versus a corporation. Accordingly, certificate holders (shareholders) are taxed on their allocable share of the Trust’s income whether or not the income is distributed. A Tax Return Guide is prepared by the Trust and mailed annually to investors, which is intended to assist them in their preparation of their income tax returns with respect to income allocated from the Trust.

Results of Operations: “Royalty income” for 2005 was greater than that of 2004 primarily due to greater net minimum royalties and increases in our royalty rates due to escalation of producer price indices, offset in part by a decrease in tonnage mined from Trust lands. “Royalty income” for 2004 was greater than that of 2003 mainly due to increases in our royalty rates due to escalation of producer price indices. “Other income” for 2005 was greater than that of 2004 primarily due to an overall improved yield on our funds held for investment. “Other income” for 2004 was less than that of 2003 mainly due to an overall reduced yield on our funds held for investment. “Net income” for 2005 was the highest in the history of the Trust, greater than that of 2004, primarily due to increased Royalty income (as explained above), offset in part by additional pension costs associated with funding the plan and expensing these costs by the Trust’s termination date. “Net income” for 2004 was greater than that of 2003 mainly due to increased Royalty income (as explained above).

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. The only contractual obligations are operating leases for office facilities (see

Note G of the Financial Statements) and deferred compensation listed as Noncurrent Liabilities in the Balance Sheet, both deemed to have a minimal effect on future liquidity.

Critical Accounting Policies: Royalties from the Trust’s mineral leases are taken into income as earned. Tonnage extracted is agreed upon between Trust and lessee engineers based on various engineering methods. Many of the leases provide for escalation or de-escalation that, for the most part, is based on independent producer price indices as published by the U.S. Department of Labor — Bureau of Labor Statistics. In addition, a number of the Trust’s leases have minimum royalty provisions that require the lessee to pay the Trust a payment for holding the leasehold interest, regardless of production. These minimum royalties can accumulate and do provide the mining companies the ability to offset excess royalties (over the minimum royalty requirements) on future taconite production. Minimum royalties, if not recovered before the termination of the lease, are forfeitable. In that event, no minimum royalties will be returned to the lessee.

Pension Plan Valuations are based on a number of assumptions used to determine the benefit obligation and asset valuation. These assumptions are evaluated annually by the Trustees and management in conjunction with outside actuaries. Assumptions affecting the pension plan valuations include the discount rate, compensation increase level and expected long-term rate of return. These assumptions reflect and incorporate the expected cash flow payouts of the pension plan given the determinate time frame to the termination of the Trust. Please refer to Note E of the Financial Statements for additional pension plan information.

The Principal Charges account represents a first and prior lien of certificate holders on any property transferable to the reversioner at the end of the Trust and reflects an allocation of beneficiaries’ equity between the certificate holders and the reversioner. This Court-ordered 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 account balance, as stated in Note D of the Financial Statements, primarily represents the costs of acquiring homes and surface lands in accordance with provisions of a lease with United States Steel Corporation. 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.

Forward-Looking and Cautionary Statements: Certain expectations and projections regarding future performance of the Trust referenced in this report are forward-looking statements. These expectations and projections are based on currently available industry and financial data and may be subject to certain events and uncertainties beyond the Trust’s control. We caution readers that in addition to factors described elsewhere in this report, the following factors and comments, among others, could cause the Trust’s operations and financial results to differ materially from the expectations and projections contained in the forward-looking statements.

The Trust’s lessees (customers) primarily include Minntac and Keewatin Taconite Company (“Keetac”), owned and operated by United States Steel Corporation, and Hibbing Taconite Company (“Hibtac”), owned by Mittal Steel USA, Cleveland Cliffs Inc. and Stelco, and operated by Cleveland Cliffs Inc. Because the Trust’s revenues are primarily dependent upon a limited number of customers, there are associated inherent risks resulting therefrom. While the steel and taconite industries are generally having good years, any significant adverse event at any of the Trust’s primary lessees, or the loss of any of the Trust’s primary lessees, could materially adversely affect the Trust’s future financial results.

A decline in market demand for steel, and correspondingly taconite, could adversely affect the Trust’s financial results. However, other related and sometimes compensating factors include the Trust’s lessees’ operating levels, ore body quality, metallurgical and geological characteristics, proximity of Trust lands, extreme weather conditions and labor contracts at the mines. Though the Trust is not a party to these labor contracts, all pertinent labor contracts affecting production from Trust lands have been ratified by the steelworkers and extend until mid-2008.

Royalty rates can fluctuate due to the escalation and de-escalation of producer price indices as a result of provisions present in many of the Trust’s leases. To the extent these indices decline (All Commodities or the Iron and Steel subgroup), royalty rates, and correspondingly royalty income, could be adversely affected. Conversely, higher producer price indices may increase royalty rates and royalty income.

Compliance with Section 646 of the Internal Revenue Code, as explained in Note F of the Financial Statements, is integral to the level of distributions paid to the certificate holders. Should it be determined that the Trust violated the requirements of Section 646, it would be taxed as a corporation versus a grantor trust. This would mean the Trust’s income would be taxable upon receipt by the Trust and again upon receipt by the certificate holders. It is the Trustees’ opinion, based on independent tax firm reviews, that the Trust has remained in compliance with the provisions of Section 646 since its election in 1988.

The outlook for 2006 is that we expect taconite production from Trust lands to be lower than that of 2005, resulting in lower anticipated earnings than the record year of 2005. Nevertheless, we think historically that 2006 will be another good year for the Trust.

MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER
FINANCIAL REPORTING

The management of Great Northern Iron Ore Properties (“Trust”) is responsible for establishing and maintaining adequate internal control over financial reporting. The Trust’s internal control system was designed to provide reasonable assurance to the Trust’s management and Board of Trustees regarding the preparation and fair presentation of published financial statements. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

The Trust’s management assessed the effectiveness of the Trust’s internal control over financial reporting as of December 31, 2005. In making this assessment, it used the criteria set forth in a report by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) on Internal Control — Integrated Framework. Based on our assessment, we believe that, as of December 31, 2005, the Trust’s internal control over financial reporting is effective based on the COSO criteria.

The Trust’s Independent Registered Public Accounting Firm, Ernst & Young LLP, has issued an audit report on our assessment of the Trust’s internal control over financial reporting. Their report appears on pages 21 and 22.

	Respectfully submitted,

	Joseph S. Micallef,
	Chief Executive Officer
	and President of the Trustees

	Thomas A. Janochoski,
	Chief Financial Officer
	and Vice President & Secretary

Letter to Certificate Holders:

The Trustees of Great Northern Iron Ore Properties (“Trust”) own fee title to certain mineral and nonmineral lands situated on the Mesabi Iron Range of Minnesota. Many of these properties are leased to companies that mine the mineral lands for taconite iron ore. The Trust has no subsidiaries.

During 2005, the major source of income to the Trust was royalty income derived from taconite production and minimum royalties. Certain leases provide the mining companies the ability to offset excess royalties due on future production, if any and when mined, against minimum royalties paid in prior periods. Accumulated minimum royalties amounted to $3,288,083 on December 31, 2005. A “Summary of Shipments” is tabulated on the last page of this report.

The Trustees declared four quarterly distributions in 2005 totaling $10.40 per share. The first, in the amount of $2.20 per share, was paid on April 29, 2005, to certificate holders of record on March 31, 2005; the second, in the amount of $2.40 per share, was paid on July 29, 2005, to certificate holders of record on June 30, 2005; the third, in the amount of $2.80 per share, was paid on October 31, 2005, to certificate holders of record on September 30, 2005; and the fourth, in the amount of $3.00 per share, was paid on January 31, 2006, to certificate holders of record on December 30, 2005.

The Trustees declared four quarterly distributions in 2004 totaling $8.20 per share. The first, in the amount of $1.80 per share, was paid on April 30, 2004, to certificate holders of record on March 31, 2004; the second, in the amount of $1.90 per share, was paid on July 30, 2004, to certificate holders of record on June 30, 2004; the third, in the amount of $2.10 per share, was paid on October 29, 2004, to certificate holders of record on September 30, 2004; and the fourth, in the amount of $2.40 per share, was paid on January 31, 2005, to certificate holders of record on December 31, 2004.

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 April 2006 to certificate holders of record on March 31, 2006.

Shares of beneficial interest in the Trust are traded on the New York Stock Exchange under the ticker symbol “GNI” (CUSIP No. 391064102). There were 1,480 certificate holders of record on December 31, 2005. The high and low prices for the quarterly periods commencing January 1, 2004, through December 31, 2005, inclusive, were as follows:

	2005				2004
Quarter	High		Low		High		Low
First	$	142.09	$	101.00	$	98.50	$	84.00
Second		123.50		93.00		101.00		88.26
Third		124.50		101.00		120.00		96.03
Fourth		141.00		113.00		127.75		96.30

The following is a summary of quarterly results of operations (unaudited) for the years ended December 31, 2005 and 2004 (in thousands of dollars, except per share amounts):

	Quarter Ended
	March 31		June 30		Sept. 30		Dec. 31
2005
Royalty income	$	4,296	$	5,257	$	4,213	$	4,232
Interest and other income		95		72		90		106

Gross income		4,391		5,329		4,303		4,338
Expenses		646		675		622		697

Net income	$	3,745	$	4,654	$	3,681	$	3,641

Earnings per share	$	2.50	$	3.10	$	2.45	$	2.43

2004
Royalty income	$	3,467	$	3,985	$	3,525	$	3,165
Interest and other income		77		50		108		70

Gross income		3,544		4,035		3,633		3,235
Expenses		628		526		526		525

Net income	$	2,916	$	3,509	$	3,107	$	2,710

Earnings per share	$	1.94	$	2.34	$	2.07	$	1.81

A Tax Return Guide was mailed in January 2006 to all “record date” certificate holders shown on our stock transfer agent’s records during 2005. This guide was intended to assist the investor in addressing many of the issues that arise in reporting the Trust operations for federal and state income tax purposes due to Section 646.

We will, upon request, be happy to furnish certificate holders an Annual Report on Form 10-K and a Tax Return Guide for any recent year.

Respectfully submitted,

Joseph S. Micallef Roger W. Staehle
Robert A. Stein John H. Roe, III

Saint Paul, Minnesota
January 27, 2006

GREAT NORTHERN IRON ORE PROPERTIES

STATEMENTS OF INCOME

	Year Ended December 31
	2005		2004		2003
Revenues
Royalties	$	17,998,451	$	14,141,775	$	11,800,870
Interest earned		252,037		179,806		214,072
Rent and other		110,724		125,817		168,462

		18,361,212		14,447,398		12,183,404
Expenses
Royalties		4,623		4,623		4,623
Real estate and payroll taxes		139,090		129,744		140,840
Inspection and care of property		531,830		524,695		506,291
Administrative and general		1,723,535		1,302,100		1,317,476
Provision for depreciation and amortization		241,514		244,226		246,630

		2,640,592		2,205,388		2,215,860

Net Income	$	15,720,620	$	12,242,010	$	9,967,544

Earnings per Share	$	10.48	$	8.16	$	6.65



STATEMENTS OF BENEFICIARIES’ EQUITY

	Year Ended December 31

		2005		2004		2003

Balance at beginning of year	$	14,683,943	$	14,741,933	$	14,524,389
Net income for the year		15,720,620		12,242,010		9,967,544

		30,404,563		26,983,943		24,491,933
Deduct declaration of distributions on shares of beneficial interest, per share: 2005 — $10.40; 2004 — $8.20; 2003 — $6.50		15,600,000		12,300,000		9,750,000

Balance at end of year	$	14,804,563	$	14,683,943	$	14,741,933

See accompanying notes.

GREAT NORTHERN IRON ORE PROPERTIES

BALANCE SHEETS

ASSETS

	December 31
	2005		2004
Current Assets
Cash and cash equivalents	$	774,916	$	788,779
United States Treasury securities (Note B)		6,209,745		4,788,363
Royalties receivable		3,881,737		2,834,944
Prepaid expenses		2,110		2,760

Total Current Assets		10,868,508		8,414,846

Noncurrent Assets
United States Treasury securities (Note B)		3,391,684		4,619,534
Prepaid pension expense (Note E)		855,340		941,327

		4,247,024		5,560,861

Properties
Mineral and surface lands (Notes B and C)		38,691,707		38,587,307
Less allowances for depletion and amortization		34,499,185		34,289,965

		4,192,522		4,297,342
Building and equipment — at cost, less allowances for accumulated depreciation (2005 — $223,654; 2004 — $214,287)		147,465		134,950

		4,339,987		4,432,292

	$	19,455,519	$	18,407,999


LIABILITIES AND BENEFICIARIES’ EQUITY

Current Liabilities
Accounts payable and accrued expenses	$	90,156	$	81,756
Distributions		4,500,000		3,600,000

Total Current Liabilities		4,590,156		3,681,756

Noncurrent Liabilities		60,800		42,300

Beneficiaries’ Equity, including certificate holders’ equity, represented by 1,500,000 shares of beneficial interest authorized and outstanding, and reversionary interest (Notes A and D)		14,804,563		14,683,943

	$	19,455,519	$	18,407,999

See accompanying notes.

GREAT NORTHERN IRON ORE PROPERTIES

STATEMENTS OF CASH FLOWS

	Year Ended December 31
	2005			2004			2003
Operating Activities
Cash received from royalties and rents	$	16,957,982		$	13,665,771		$	12,361,792
Cash paid to suppliers and employees		(2,285,541	)		(2,087,987	)		(2,050,743	)
Interest received		202,093			188,621			272,497

Net Cash Provided by Operating Activities		14,874,534			11,766,405			10,583,546

Investing Activities
United States Treasury securities purchased		(5,232,326	)		(4,297,396	)		(5,075,000	)
United States Treasury securities matured		5,088,738			3,725,000			4,175,000
Net expenditures for building and equipment		(44,809	)		(11,629	)		(40,377	)

Net Cash Used in Investing Activities		(188,397	)		(584,025	)		(940,377	)

Financing Activities
Distributions paid		(14,700,000	)		(11,250,000	)		(9,450,000	)

Net Cash Used in Financing Activities		(14,700,000	)		(11,250,000	)		(9,450,000	)

Net (Decrease) Increase in Cash and Cash Equivalents		(13,863	)		(67,620	)		193,169

Cash and Cash Equivalents at Beginning of Year		788,779			856,399			663,230

Cash and Cash Equivalents at End of Year	$	774,916		$	788,779		$	856,399

Reconciliation of Net Income to Net Cash Provided by Operating Activities
Net income	$	15,720,620		$	12,242,010		$	9,967,544
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		241,514			244,226			246,630
Net (increase) decrease in assets:
Accrued interest		(49,944	)		8,815			58,425
Royalties receivable		(1,046,793	)		(591,521	)		392,460
Prepaid expenses		86,637			(129,225	)		(103,895	)
Surface lands		(104,400	)		(10,300	)		—
Net increase in liabilities:
Accrued liabilities		26,900			2,400			22,382

Net Cash Provided by Operating Activities	$	14,874,534		$	11,766,405		$	10,583,546

See accompanying notes.

GREAT NORTHERN IRON ORE PROPERTIES

NOTES TO FINANCIAL STATEMENTS

December 31, 2005

NOTE A — Business and Termination of the Trust and Legal Proceedings

Great Northern Iron Ore Properties (“Trust”) is presently involved solely with the leasing and maintenance of mineral and nonmineral lands owned by the Trust on the Mesabi Iron Range of Minnesota. Royalty income is derived from taconite production and minimums. Royalty income (which is not in direct ratio to tonnage shipped) from two significant operating lessees was as follows: 2005 — $11,930,000 and $6,068,000; 2004 — $8,942,000 and $5,197,000; and 2003 — $9,048,000 and $2,714,000.

At the end of the Trust, that being April 6, 2015, the certificates of beneficial interest (shares) in the Trust will cease to trade on the New York Stock Exchange and thereafter will represent only the right to receive certain distributions payable to the certificate holders of record at the time of the termination of the Trust. Upon termination, the Trust is obligated to distribute ratably to these certificate holders the net monies remaining in the hands of the Trustees (after paying and providing for all expenses and obligations of the Trust), plus the balance in the Principal Charges account (see Note D). All other Trust property (most notably the Trust’s mineral properties) must be conveyed and transferred to the reversioner under the terms of the Trust Agreement.

NOTE A — Business and Termination of the Trust and Legal Proceedings (continued)

The Trustees provided annual income tax information in January 2006 to certificate holders of record with holdings on any of the four quarterly record dates during 2005. This information included a:

Substitute Form 1099-MISC — This form reported one’s 2005 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 2005.

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.

NOTE B — Significant Accounting Policies

Cash and Cash Equivalents: For purposes of the statements of cash flows, the Trust considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents.

NOTE B — Significant Accounting Policies (continued)

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. Securities listed as noncurrent assets will mature in 2007. Following is an analysis of the securities as of December 31:

	Current						Noncurrent
	2005			2004			2005		2004
Aggregate fair value	$	6,124,740		$	4,754,254		$	3,316,594	$	4,566,156
Gross unrealized holding gains		(6,490	)		(1,882	)		—		—
Gross unrealized holding losses		47,423			20,872			32,736		33,258

Amortized cost basis		6,165,673			4,773,244			3,349,330		4,599,414
Accrued interest		44,072			15,119			42,354		20,120

	$	6,209,745		$	4,788,363		$	3,391,684	$	4,619,534

Mineral and Surface Lands: Mineral and surface lands are carried at amounts which represent, principally, either cost at acquisition or values on March 1, 1913. The value of the merchantable ore deposits was established on March 1, 1913, for federal income tax purposes. No value has been estimated or recorded for taconite deposits held on March 1, 1913, since they were not then thought to be merchantable. The cost of surface lands acquired to facilitate mining operations was amortized (noncash expense) in the amounts of $209,220, $208,200 and $208,200 for the years 2005, 2004 and 2003, respectively (see Note C).

Royalty Income: Royalties from mineral leases (with cancellation terms varying from six months to one year) are taken into income as earned. Certain leases provide the mining companies the ability to offset excess royalties due on future production, if any and when mined, against minimum royalties paid in prior periods. Accumulated minimum royalties amounted to $3,288,083 on December 31, 2005, and $2,496,209 on December 31, 2004.

Use of Estimates: The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

Earnings per Share: Earnings per share are determined by dividing net income for the period by the number of weighted-average shares of beneficial interest outstanding. Basic and diluted weighted-average shares outstanding were 1,500,000 as of December 31, 2005, 2004 and 2003.

NOTE C — Land Acquisition

A mining agreement dated January 1, 1959, with United States Steel Corporation provides that one-half of annual earned royalty income, after satisfaction of minimum royalty payments, shall be applied to reimburse the lessee for a portion of its cost of acquisition of surface lands overlying the leased mineral deposits, which surface lands are then conveyed to the Trustees (see Note B). 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.

NOTE D — Principal Charges Account

Pursuant to the Court Order of November 29, 1982, the Trustees were directed to create and maintain an account designated as “Principal Charges.” This account constitutes a first and prior lien of certificate holders on any property transferable to the reversioner and reflects an allocation of beneficiaries’ equity between the certificate holders and the reversioner. This account is neither an asset nor a liability of the Trust. Rather, this account maintains and represents a balance which will be payable to the certificate holders of record from the reversioner at the end of the Trust. The balance in this account consists of attorneys’ fees and expenses of counsel for adverse parties pursuant to the Court Order in connection with litigation commenced in 1972 relating to the Trustees’ powers and duties under the Trust Agreement and the costs of homes and surface lands acquired in accordance with provisions of a lease with United States Steel Corporation, net of an allowance to amortize the cost of the land based on actual shipments of taconite and net of a credit for disposition of tangible assets. Following is an analysis of this account as of December 31:

	2005			2004
Attorneys’ fees and expenses	$	1,024,834		$	1,024,834
Cost of surface lands		5,817,965			5,713,565
Cumulative shipment credits		(1,460,774	)		(1,304,692	)
Asset disposition credits		(57,950	)		(57,950	)

Principal Charges account	$	5,324,075		$	5,375,757

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 E — Pension Plan

The Trust has a noncontributory defined benefit plan which covers all employees. The Trustees are not eligible for pension benefits under the plan based on services as Trustees. A summary of the components of net periodic pension cost for 2005, 2004 and 2003 is as follows:

	2005			2004			2003
Service cost	$	214,125		$	117,426		$	92,219
Interest cost		282,728			210,396			214,006
Expected return on assets		(300,686	)		(303,219	)		(260,583	)
Net amortization		147,526			5,764			38,648

Net pension cost	$	343,693		$	30,367		$	84,290

Weighted-average assumptions used in the measurement of the benefit obligation as of December 31 and the net periodic pension cost for the years ended December 31 were:

	2005		2004
Discount rate for benefit obligation, pre-termination of Trust	5.75	%	5.75	%
Discount rate for benefit obligation, post-termination of Trust	4.75	%	5.75	%
Discount rate for net periodic pension cost	5.75	%	6.25	%
Rate of compensation increase	3.50	%	3.50	%
Expected long-term return on plan assets	7.50	%	7.50	%

The determination of the discount rate is based on a high quality bond yield curve that approximates the expected cash flow payouts of the plan, coupled with a comparison to the Moody’s Aa corporate bond rate. The determination of the rate of compensation increase is based on historical salary adjustment averages and the Trustees’ expectations of future increases. The determination of the expected long-term return on plan assets is based on historical returns of the various asset categories included in the plan’s portfolio and a consideration of the Trust’s termination date.

The following table sets forth the change in projected benefit obligation:

	2005			2004
Projected benefit obligation at January 1	$	3,946,433		$	3,487,979
Service cost		214,125			117,426
Interest cost		282,728			210,396
Actuarial loss		1,159,961			389,145
Plan amendment		157,219			—
Benefit payments		(256,599	)		(258,513	)

Projected benefit obligation at December 31	$	5,503,867		$	3,946,433

NOTE E — Pension Plan (continued)

The following table sets forth the change in the fair value of plan assets:

	2005			2004
Fair value of plan assets at January l	$	4,001,377		$	3,818,748
Contributions		257,706			161,511
Actual return on plan assets		153,233			279,631
Benefit payments		(256,599	)		(258,513	)

Fair value of plan assets at December 31	$	4,155,717		$	4,001,377

The future benefit payments from the plan for the years 2006 through 2010, inclusive, are estimated to be as follows:

2006	$	227,744
2007		205,520
2008		185,805
2009		168,325
2010		152,877

The future benefit payments from the plan for the period 2011 through 2015, inclusive, are estimated to be $1,119,957 in aggregate. The 2006 contribution to the plan is estimated to approximate $260,000; however, said amount will be recalculated upon the completion of the plan’s annual actuarial valuation performed as of the plan’s fiscal year-end, March 31.

The following table sets forth the plan’s funded status and amounts recognized in the balance sheets at December 31:

	2005			2004
Accumulated benefit obligation	$	4,031,851		$	2,982,757
Effect of future compensation increases		1,472,016			963,676

Projected benefit obligation		5,503,867			3,946,433
Fair value of plan assets		4,155,717			4,001,377

Plan assets (less than) in excess of benefit obligation		(1,348,150	)		54,944
Unrecognized net loss		2,046,271			886,383
Unrecognized prior service cost		157,219			—

Prepaid pension expense	$	855,340		$	941,327

NOTE E — Pension Plan (continued)

The following table sets forth the plan’s weighted-average asset allocations by category as of December 31:

	2005		2004
Equity securities	52	%	55	%
Debt securities	43	%	39	%
Other (cash, money market, accrued income)	5	%	6	%

	100	%	100	%

The investment policy of the plan is to have up to approximately 55% invested in an equity index fund and the remaining monies invested in fixed income (debt) securities and cash.

NOTE F — Income Taxes

The Trustees filed an election under Section 646 of the Tax Reform Act of 1986, as amended. As discussed in Note A, beginning in 1989 the Trust is no longer subject to federal or Minnesota corporate income taxes, provided the requirements of Section 646 are met. The principal requirements are:

	•	The Trust must be exclusively engaged in the leasing of mineral properties and activities incidental thereto.
	•	The Trust must not acquire any additional property other than permissible acquisitions as provided by Section 646.

If these requirements are violated, the Trust will be treated as a corporation for the taxable year in which the violation occurs and for all subsequent taxable years. Since the election of Section 646, the Trust has remained in compliance with these requirements.

NOTE G — Lease Commitments

The Trust leases office facilities in Saint Paul, Minnesota. These leases include various renewal options and exclude any contingent rental provisions. Rental expense for these operating leases amounted to $61,823 in each of the years 2005, 2004 and 2003.

REPORT OF ERNST & YOUNG LLP,

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM,

ON AUDIT OF FINANCIAL STATEMENTS

The Trustees
Great Northern Iron Ore Properties

We have audited the accompanying balance sheets of Great Northern Iron Ore Properties as of December 31, 2005 and 2004, and the related statements of income, beneficiaries’ equity and cash flows for each of the three years in the period ended December 31, 2005. These financial statements are the responsibility of the Trust’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Great Northern Iron Ore Properties at December 31, 2005 and 2004, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2005, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the effectiveness of Great Northern Iron Ore Properties’ internal control over financial reporting as of December 31, 2005, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated January 27, 2006, expressed an unqualified opinion thereon.

/s/ Ernst & Young LLP

Minneapolis, Minnesota
January 27, 2006

REPORT OF ERNST & YOUNG LLP,

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM,

ON MANAGEMENT’S REPORT ON

INTERNAL CONTROL OVER FINANCIAL REPORTING

The Trustees
Great Northern Iron Ore Properties

We have audited management’s assessment, included in the accompanying Management’s Report On Internal Control Over Financial Reporting, that Great Northern Iron Ore Properties maintained effective internal control over financial reporting as of December 31, 2005, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“the COSO criteria”). Great Northern Iron Ore Properties’ management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting. Our responsibility is to express an opinion on management’s assessment and an opinion on the effectiveness of Great Northern Iron Ore Properties’ internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, evaluating management’s assessment, testing and evaluating the design and operating effectiveness of internal control and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed 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. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company and (3) provide reasonable assurance regarding prevention or timely detection of

unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, management’s assessment that Great Northern Iron Ore Properties maintained effective internal control over financial reporting as of December 31, 2005, is fairly stated, in all material respects, based on the COSO criteria. Also, in our opinion, Great Northern Iron Ore Properties maintained, in all material respects, effective internal control over financial reporting as of December 31, 2005, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the 2005 financial statements of Great Northern Iron Ore Properties, and our report dated January 27, 2006, expressed an unqualified opinion thereon.

/s/ Ernst & Young LLP

Minneapolis, Minnesota
January 27, 2006

GREAT NORTHERN IRON ORE PROPERTIES

SUMMARY OF SHIPMENTS

					Full Tons Shipped
No.		Mine	Ownership Interest		2005		2004		2003		Total to January 1, 2006
	1.	Mahoning		100%		1,110,454		1,047,642		501,289		156,957,758
	2.	Ontario 100%		100%		919,954		1,391,614		680,184		11,739,986
	3.	Ontario 50%		50%		625,041		1,343,700		2,356,994		22,172,898
	4.	L & W/Leetonia		50%		60,021		—		—		8,825,656
	5.	Section 18		100%		46,053		29,645		3,612		27,997,159
	6.	Mississippi #3		100%		576,157		396,194		76,571		4,878,486
	7.	Minntac		100%		5,335,518		4,958,405		6,153,688		58,953,247

						8,673,198		9,167,200		9,772,338		291,525,190
		Shipments from inactive mines and those exhausted, surrendered or sold prior to this year				—		—		—		356,099,477

		Total				8,673,198		9,167,200		9,772,338		647,624,667

No.		Operating Interest
	1-4	Hibbing Taconite Company
	5-6	United States Steel Corporation — Keewatin Taconite Company
	7	United States Steel Corporation — Minntac

NOTES

GREAT NORTHERN IRON ORE PROPERTIES
W-1290 FIRST NATIONAL BANK BUILDING
332 MINNESOTA STREET
SAINT PAUL, MINNESOTA 55101-1361

FIRST CLASS
U.S. POSTAGE
PAID
PERMIT #43
MINNEAPOLIS, MN

FIRST CLASS MAIL

EX-23 5 grnorth060629_ex23.htm CONSENT OF ERNST & YOUNG LLP Exhibit 23 to Great Northern Iron Ore Properties Form 10-K dated December 31, 2005

Exhibit 23

Consent of Independent Registered
Public Accounting Firm

We consent to the incorporation by reference in this Annual Report (Form 10-K) of Great Northern Iron Ore Properties of our reports dated January 27, 2006, with respect to the financial statements of Great Northern Iron Ore Properties, Great Northern Iron Ore Properties management’s assessment of the effectiveness of internal control over financial reporting, and the effectiveness of internal control over financial reporting of Great Northern Iron Ore Properties, included in the 2005 Annual Report to Certificate Holders of Great Northern Iron Ore Properties.

/s/ Ernst & Young LLP

Minneapolis, Minnesota
January 27, 2006

EX-31.1 6 grnorth060629_ex31-1.htm CERTIFICATION OF CEO PURSUANT TO SECTION 302 Exhibit 31.1 to Great Northern Iron Ore Properties Form 10-K dated December 31, 2005

Exhibit 31.1

Certification of Chief Executive Officer pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002

I, Joseph S. Micallef, President of the Trustees and Chief Executive Officer of Great Northern Iron Ore Properties, certify that:

I have reviewed this Annual Report on Form 10-K of Great Northern Iron Ore Properties;

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;

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;

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 we have:

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 Annual Report is being prepared; and

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; and

evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this Annual Report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this Annual Report based on such evaluation; and

disclosed in this Annual Report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth quarter in the case of an Annual Report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting;

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 function):

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

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

Date:	February 16, 2006	By:	/s/ Joseph S. Micallef

			Joseph S. Micallef, President of the Trustees, Chief Executive Officer

EX-31.2 7 grnorth060629_ex31-2.htm CERTIFICATION OF CFO PURSUANT TO SECTION 302 Exhibit 31.2 to Great Northern Iron Ore Properties Form 10-K dated December 31, 2005

Exhibit 31.2

Certification of Chief Financial Officer pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002

I, Thomas A. Janochoski, Vice President & Secretary and Chief Financial Officer of Great Northern Iron Ore Properties, certify that:

I have reviewed this Annual Report on Form 10-K of Great Northern Iron Ore Properties;

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

Date:	February 16, 2006	By:	/s/ Thomas A. Janochoski

			Thomas A. Janochoski, Vice President & Secretary, Chief Financial Officer

EX-32 8 grnorth060629_ex32.htm CERTIFICATIONS OF CEO/CFO PURSUANT TO SECTION 906 Exhibit 32 to Great Northern Iron Ore Properties Form 10-K dated December 31, 2005

Exhibit 32

Certifications of Chief Executive Officer and Chief Financial Officer pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002 (furnished but not filed)

In connection with this Annual Report of Great Northern Iron Ore Properties on Form 10-K 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 that:

This Annual Report fully complies with the requirements of Section 13 or 15(d) of the Securities and Exchange Act of 1934; and

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

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.

Date:	February 16, 2006	By:	/s/ Joseph S. Micallef

			Joseph S. Micallef, President of the Trustees, Chief Executive Officer

In connection with this Annual Report of Great Northern Iron Ore Properties on Form 10-K 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 that:

This Annual Report fully complies with the requirements of Section 13 or 15(d) of the Securities and Exchange Act of 1934; and

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

Date:	February 16, 2006	By:	/s/ Thomas A. Janochoski

			Thomas A. Janochoski, Vice President & Secretary, Chief Financial Officer

EX-99.(A) 9 grnorth060629_ex99a.htm TAX RETURN GUIDE Exhibit 99(a) to Great Northern Iron Ore Properties Form 10-K dated December 31, 2005

Exhibit 99(a)

Tax Return Guide

GREAT NORTHERN IRON ORE PROPERTIES
W-1290 First National Bank Building
332 Minnesota Street
Saint Paul, MN 55101-1361
(651) 224-2385
FAX (651) 224-2387

2005 TAX RETURN GUIDE

Dear Unit Holder:

This “Tax Return Guide” has been prepared to assist the certificate holder in reporting the taxable income from Great Northern Iron Ore Properties (the “Trust”) as summarized on the Substitute Form 1099-MISC (or Form 1042S for foreign investors) and the Trust Supplemental Statement. This information is being mailed to all certificate holders shown on the record dates during 2005, as maintained by our transfer agent. If you use a professional tax advisor, it is essential that they have this Guide to prepare your income tax return.

This Guide is merely intended to assist the investor in addressing many of the issues that arise in reporting the Trust operations for federal and state income tax purposes. It is not intended to be all-inclusive or to render specific professional tax advice. If you are a foreign investor, we recommend you consult your tax advisor for proper income tax reporting due to the complexity of taxation of foreign investors. Should you have any questions about the information in this Guide or need further assistance in income tax return preparation, please consult your tax advisor.

“Street name” holders may also use this Guide to calculate their allocable share of Trust income and deductions if they know the number of units (shares) held on the record dates during the year. Nominees and brokers should refer to the section in this Guide entitled “Nominee Reporting Requirements” which provides guidance as to the preparation of Trust income tax information for their clients. Please contact the Trust office if you need a bulk supply of these Guides.

Finally, please note that this Guide provides information for both domestic and foreign investors. Certain sections in this Guide pertain only to a specific class of investors and are labeled as such. Please read this Guide thoroughly and complete the worksheets carefully.

Sincerely yours and for the Trustees,

/s/ Joseph S. Micallef

President

January 2006

page 2

TAX RETURN GUIDE

TABLE OF CONTENTS

			Page
Tax Matters Relating to Great Northern Iron Ore Properties
General Information				3 - 4
Information for Foreign Investors				4 - 5
Trust Income and Allocation				5
Presentation of Tax Data				5
Classification of Trust Income				5
Depletion				6
Basis				6
Certificate Amortization				6
Alternative Minimum Tax				6
State Taxation and Adjustments				7
Backup Withholding				7

Instruction Outline				8 - 9

Worksheet A – Unit Holders that held a constant number of units on each of the four quarterly record dates during the year
Schedule I Individual Taxpayers				10
Schedule II Corporate Taxpayers				10

Worksheet B – Unit Holders that purchased or sold units during the year
Schedule I Individual Taxpayers				11 - 12
Schedule II Corporate Taxpayers				13 - 14

Worksheet C – Year End Basis and Certificate Amortization Computations				15

Nominee Reporting Requirements				16

Attachment for Income Tax Return to Reconcile Substitute Form 1099-MISC or Form 1042S for Certificate Holders of Record
Schedule for Individual Foreign Investors – Form 1042S				S-F
Schedule for Individual Domestic Investors – Substitute Form 1099-MISC				S-D

page 3

TAX MATTERS RELATING TO GREAT NORTHERN IRON ORE PROPERTIES

General Information
Pursuant to an Election filed under Section 646 of the Tax Reform Act of 1986, as amended, the Trust is taxable as a grantor trust for the years after 1988. As an investor in a grantor trust, you are required to report your proportionate share of the Trust’s taxable income on your federal and state income tax returns.

If you utilize professional assistance in preparing your income tax return, it is essential that you provide your preparer with this Tax Return Guide, your Substitute Form 1099-MISC or Form 1042S (if applicable) and your Trust Supplemental Statement (if applicable).

This Tax Return Guide is used to calculate the various components of Trust income and deductions allocable to you. For the benefit of “street name” holders, this Guide is universal in that if you know the number of shares (units) held on the record dates during the year, you can calculate the proper amount of Trust income and deductions allocable to you, regardless of whether or not you received a Form 1099-MISC or Form 1042S from your broker.

This Guide is generally designed to instruct unit holders who utilize Form 1040 — U.S. Individual Income Tax Return or Form 1120 — U.S. Corporation Income Tax Return, which represents a vast majority of our certificate holders. Foreign investors generally would utilize Form 1040NR — U.S. Nonresident Alien Income Tax Return (Individuals) or Form 1120-F — U.S. Income Tax Return of a Foreign Corporation (Corporations). Please note that the tax return line instructions within this Guide do not apply to foreign investors. Because the reporting of income or deductions for foreign investors is dependent upon whether or not they are effectively connected with a United States trade or business, we strongly recommend foreign investors consult with their tax advisors for proper income tax return preparation.

The Substitute Form 1099-MISC has been prepared only for domestic certificate holders of record during the year (not “street name” holders). It is used to report the income allocable to the domestic investor (as reported to the Internal Revenue Service and the Minnesota Department of Revenue), distributions declared (not necessarily received within the year) and any taxes withheld. It should be emphasized that Box 1 on Substitute Form 1099-MISC contains distributions declared during the calendar year, not necessarily those actually received during the year. The following table is provided to help clarify the timing differences:

Distributions

Declared:	Paid:	Included (if applicable) in Box 1 of:
December 2004	January 2005	2004 Form 1099-MISC
March 2005	April 2005	2005 Form 1099-MISC
June 2005	July 2005	2005 Form 1099-MISC
September 2005	October 2005	2005 Form 1099-MISC
December 2005	January 2006	2005 Form 1099-MISC

The distributions reported on Form 1099-MISC do not constitute “qualified dividend income” as defined by the Jobs and Growth Tax Relief Reconciliation Act of 2003.

page 4

(General Information – continued)

Regardless of when distributions were declared or paid, taxable income is determined based upon your allocable share of the income of the Trust, not the distributions. Distributions need not normally be reported anywhere on your income tax return. If you are a “street name” holder and received a Form 1099-DIV from your broker, you should have the Form 1099-DIV voided and replaced with a Form 1099-MISC as prepared by the broker in accordance with the “Nominee Reporting Requirements” section of this Guide. Should your broker not void the Form 1099-DIV, it is suggested you list the distributions reported by your broker on Schedule B, Part II of Form 1040 (Individuals) and again as a negative amount (representing a nontaxable distribution) also on Schedule B, Part II of Form 1040 (Individuals), then report your proportionate share of the Trust’s income on your income tax return as computed by this Guide.

The Form 1042S has been prepared only for foreign certificate holders of record during the year (not “street name” holders). It is used to report the income allocable to the foreign investor (as reported to the Internal Revenue Service and the Minnesota Department of Revenue) and any taxes withheld. Regardless of when distributions were declared or paid, taxable income is determined based upon your allocable share of the income of the Trust, not the distributions. Distributions need not normally be reported anywhere on your income tax return.

The Trust Supplemental Statement shows only the shares (units) held on the various record dates during the year. It accompanies the Substitute Form 1099-MISC or Form 1042S and may be helpful as a reference in completing this Guide.

Information for Foreign Investors
Nonresident alien individuals or foreign corporations are generally subject to federal income tax at the rate of 30% (or lower treaty rate) on certain items of gross income, including royalties, from sources within the United States. All of the income of the Trust for this year was from sources within the United States. The income reported on Form 1042S includes interest income, rental income and gain from the sale of domestic iron ore. The enclosed worksheets will assist you in the proper breakdown and reporting of the income. The income tax withheld from your distributions is also shown on Form 1042S. You must file a United States federal income tax return if the tax was underwithheld or to claim a refund for any overwithheld tax.

In general, if a nonresident alien individual or foreign corporation is engaged in a trade or business in the United States and/or the nonresident alien individual or foreign corporation determines that the Trust income is effectively connected with the conduct of a trade or business in the United States, then the Trust income is taxable at the graduated tax rates applicable to individuals or corporations. Furthermore, a unit holder may elect to treat the income (which constitutes income from real property) as effectively connected with the conduct of a trade or business in the United States under Sections 871(d) or 882(d) of the Internal Revenue Code, or pursuant to any similar provisions of applicable treaties. A unit holder whose Trust income is effectively connected with a United States trade or business or who elects to treat it as such is entitled to claim a depletion deduction, to the extent allowed by law, and a certificate amortization deduction with respect to such income. A United States federal income tax return must be filed to claim these deductions.

page 5

(Information for Foreign Investors – continued)

A unit holder whose Trust income is effectively connected with a United States trade or business, or who elects to treat it as such, is entitled to claim exemption from the 30% (or lower treaty rate) withholding tax. Such exemption is claimed for a calendar year by filing, in duplicate, with the Trust, Form W-8ECI, “Certificate of Foreign Person’s Claim for Exemption From Withholding on Income Effectively Connected With the Conduct of a Trade or Business in the United States” (or a substitute statement containing the information under Internal Revenue Code Regulation Section 1.1441-4). The Form W-8ECI should be received by the Trust sufficiently in advance of the distribution to which it is intended to apply. A separate Form W-8ECI (or substitute statement) must be filed with the Trust for each calendar year in order to claim an exemption from withholding for that year’s income.

Under the Foreign Investment in Real Property Tax Act (FIRPTA), the units are treated as United States real property interests. Thus, gain or loss from the sale or exchange of the units will be regarded as arising from the sale or exchange of property effectively connected with the conduct of a United States trade or business. Therefore, any sale of units during the year must be reported in the United States and the appropriate taxes paid, if any. The gain or loss on the sale of a unit is calculated by deducting the adjusted basis of the unit from the unit selling price. The format of Worksheet C may be used to calculate your adjusted basis. Include only those record dates before the sale date and ignore the certificate amortization deduction calculation.

Because the taxation of foreign investors is a complex area, we recommend you consult your tax advisor.

Trust Income and Allocation
The Trust determines and reports its taxable income on a calendar year basis utilizing the accrual method of accounting. Shareholders (unit holders) of record at the end of each quarter are allocated a share of the Trust’s quarterly income. There were four equal income allocations during the year to holders of record as of the last business day of each calendar quarter. If you are an investor with a taxable year other than a calendar year, you should report your share of income for those record dates that coincide with your taxable year using Worksheet B.

Presentation of Tax Data
Worksheets are provided to assist the investor in calculating their allocable share of Trust income and deductions. You should prepare either Worksheet A if you held the same number of units on each of the four quarterly record dates during the year OR Worksheet B if you purchased or sold any units during the year. If you own units in several blocks or the number of units which you own changed during the year, you need to reproduce the necessary copies of these worksheets and complete a separate worksheet for each block of units acquired on a different date, at a different price or held for a different time period in order to maintain your basis individually.

Classification of Trust Income
By a provision of the Internal Revenue Code, the iron ore royalty income earned by the Trust is treated as gain from the sale or exchange of assets used in a trade or business under Code Section 1231, thereby qualifying for capital gain treatment. With respect to the Tax Reform Act of 1986, the Trustees believe that the Trust does not engage in an activity which would be considered a trade or business under the passive activity rules of the Internal Revenue Code. Accordingly, such income may not be used to offset a unit holder’s losses from passive activities.

page 6

Depletion
There was no income derived from ore properties having a cost basis during the year. Consequently, a cost depletion deduction is not allowable.

A percentage depletion deduction is only allowable under Section 631 for any tax year in which the capital gain tax rate equals or exceeds the maximum ordinary income tax rate. Accordingly, the percentage depletion deduction is not available for individuals since the maximum ordinary income tax rate exceeds the capital gain tax rate. The percentage depletion deduction continues to remain available to domestic corporate taxpayers. It also remains available to foreign corporate taxpayers if the income from the Trust is effectively connected with the conduct of a trade or business in the United States or if you elect to treat the income as effectively connected. The corporate tax worksheets provide the factor to calculate the percentage depletion deduction that is already reduced 20% as provided by Section 291.

Basis
Basis is increased by your allocable share of Trust income and is reduced by distributions and certificate amortization (if any). Investors should use the format of Worksheet C to compute their year end basis annually. Basis should never be less than zero. To the extent that distributions exceed your basis, the excess distribution should be treated as capital gain. Certificate amortization would no longer be available. This computation Worksheet C is also included to assist the investor in computing gain or loss upon the sale of any portion of the investor’s interest. If you sold some or all of your units prior to the end of the year, you should use the format of Worksheet C to calculate your adjusted basis through the date of certificate disposition. Do not calculate a certificate amortization deduction on any units disposed of during the year.

Certificate Amortization
Certificate holders were previously informed that amortizing the cost of Trust certificates is allowable beginning October 2, 1978, or date of purchase, whichever is later. Certificate amortization is a deduction for income tax purposes for domestic investors if the certificates were held as of the end of the year. If you are a foreign investor and the income from the Trust is effectively connected with the conduct of a trade or business in the United States or if you elect to treat the income as effectively connected, you are also entitled to a certificate amortization deduction if the certificates were held as of the end of the year. The certificate amortization deduction is not permitted for any person who holds a reversionary interest or is related to, pursuant to Section 267, a person who holds a reversionary interest. Amortization of your interest should be calculated based upon the number of days you owned the interest during the year in relation to the number of days until the Trust will terminate on April 6, 2015. See Worksheet C for the suggested calculation formula to compute your certificate amortization, if allowed. If you did not hold any units at the end of the year, ignore the certificate amortization deduction calculation.

Alternative Minimum Tax
For purposes of the Alternative Minimum Tax, the tax preference item for percentage depletion is only applicable to corporate investors since no deduction is available to individuals. The entire corporate percentage depletion deduction is considered a tax preference item and should be included on Form 4626 — Alternative Minimum Tax-Corporations. Please follow the form’s instructions to determine if an additional tax liability is generated.

page 7

State Taxation and Adjustments
Unit holders who meet Minnesota’s minimum filing requirements will have to report their allocable share of the Trust’s income to the State of Minnesota. A Minnesota resident’s federal income will include their share of the Trust’s income. Nonresident unit holders will have to file a Minnesota income tax return to report Minnesota source income if their total Minnesota source income, including their allocable share of the Trust’s income, was at least $8,200 (minimum threshold for a single taxpayer under age 65).

The Trustees have consistently taken the position that Minnesota will tax income allocated to you provided you meet the minimum filing requirement. The state in which you are located, if other than Minnesota, may also attempt to tax this income. Generally, if your state of residency taxes this income based on your residency, that state may provide a credit for Minnesota taxes paid. Given the broad range of state tax implications, we strongly recommend that you consult your tax advisor in order to determine the state tax implications of an allocation of income.

Individual taxpayers are allowed a subtraction for their allocable share of the Trust’s U.S. interest income on their Minnesota income tax return. Use the worksheets to calculate this amount and include with any other subtractions on the Minnesota Individual Income Tax Return.

Corporate taxpayers are not allowed a percentage depletion deduction for Minnesota. Therefore, the calculated percentage depletion deduction (if claimed on the federal return) must be shown as an addition to Minnesota income.

If you are not required to file a Minnesota income tax return, you may ignore the “State of Minnesota Tax Return” line reference numbers in the worksheets. However, to the extent that other states have similar adjustments as explained above, the worksheets may be helpful in calculating these amounts. Many other states do allow for the subtraction of U.S. interest income and, as stated above, also allow their residents a credit for taxes paid to another state.

Backup Withholding
Federal income tax must be withheld at the rate of 28% by the payer if the payee fails to furnish his or her taxpayer identification number (TIN) or if the payer is notified by the Internal Revenue Service that the payee has furnished an incorrect TIN. A certificate holder will avoid backup withholding by furnishing his or her correct TIN to the Trust’s disbursing agent: Wells Fargo Bank, N.A., Shareowner Services, P.O. Box 64854, St. Paul, MN 55164-0854 (Telephone number: 1-800-468-9716).

page 8

INSTRUCTION OUTLINE
Your Substitute Form 1099-MISC or Form 1042S (if applicable) provides your aggregate share of the Trust’s taxable income before deductions for the calendar year. For tax reporting purposes, the income should be separated into its various components. If you are a “street name” holder and did not receive a Form 1099-MISC or Form 1042S, you should request such a form from your broker (not Great Northern Iron Ore Properties); however this Guide can be used to calculate your allocable share of income without having these forms if you know the number of shares held on the various record dates. The worksheets that follow will assist you in completing your income tax return with respect to the Trust’s income and deductions.

Please note that if you own units in several blocks or the number of units which you own changed during the year, you need to reproduce the necessary copies of these worksheets and complete a separate worksheet for each block of units acquired on a different date, at a different price or held for a different time period in order to maintain your basis individually.

STEP 1

Before you begin, you will likely need a minimum of the following federal income tax return forms:

Individual Domestic Investors
Form 1040 – U.S. Individual Income Tax Return
Schedule B (Form 1040) – Interest and Ordinary Dividends
Schedule D (Form 1040) – Capital Gains and Losses
Schedule E (Form 1040) – Supplemental Income and Loss
Form 4797 – Sales of Business Property

Corporate Domestic Investors
Form 1120 – U.S. Corporation Income Tax Return
Schedule D (Form 1120) – Capital Gains and Losses
Form 4797 – Sales of Business Property
Form 4626 –Alternative Minimum Tax-Corporations

Individual Foreign Investors
Form 1040NR – U.S. Nonresident Alien Income Tax Return

Corporate Foreign Investors
Form 1120-F – U.S. Income Tax Return of a Foreign Corporation

Various state income tax return forms may also be required depending on the investor’s tax status and domicile.

STEP 2

Determine which worksheet to use. Investors who held a constant number of units on each of the four quarterly record dates during the year should use Worksheet A. All others should use Worksheet B.

STEP 3

Complete Worksheet A or B (but not both). The Trust Supplemental Statement received (if applicable) will provide the shares (units) held on the various record dates during the year. The worksheet is designed to reconcile to your Substitute Form 1099-MISC or Form 1042S for calendar year taxpayers of record.

page 9

(INSTRUCTION OUTLINE – continued)

STEP 4

If you held units of interest at the end of the year, complete Worksheet C. If you did not hold units of interest at the end of the year, you need not complete Worksheet C as your basis should be zero and the certificate amortization deduction calculation is irrelevant. However, you may wish to use the format of Worksheet C to calculate your basis through the date of certificate disposition.

STEP 5

If you are a domestic investor, enter the amounts calculated on Worksheet A or Worksheet B onto the appropriate income tax return lines as indicated on the worksheets. If you are a foreign investor, reporting of the calculated amounts is dependent upon whether the income is effectively or not effectively connected with a United States trade or business. As this determination is dependent upon your specific activities in the United States, we recommend you consult your tax advisor for proper reporting before entering the amounts calculated on Worksheet A or Worksheet B onto your income tax return.

STEP 6

Individual domestic investors of record should complete Schedule S-D with the amounts calculated from Worksheet A or Worksheet B (lines 1, 2 & 3). This schedule provides a reconciliation of the reported income to Substitute Form 1099-MISC (which was sent to the Internal Revenue Service and the Minnesota Department of Revenue).

Individual foreign investors of record should complete Schedule S-F with the amounts calculated from Worksheet A or Worksheet B (lines 1, 2 & 3). This schedule provides a reconciliation of the reported income to Form 1042S (which was sent to the Internal Revenue Service and the Minnesota Department of Revenue). Foreign investors must also indicate where the income was listed on their income tax return as determined in Step 5 above.

STEP 7

Certificate holders of record should attach either Schedule S-D or S-F, as appropriate, to your income tax return.

STEP 8

Retain this Guide, Substitute Form 1099-MISC or Form 1042S (if applicable) and the Trust Supplemental Statement (if applicable) with your permanent records as it contains basis and other important information which may be needed in future years.

page 10

WORKSHEET A

CALCULATION OF TAXABLE INCOME FOR UNIT HOLDERS THAT HELD A CONSTANT NUMBER OF UNITS
ON EACH OF THE FOUR QUARTERLY RECORD DATES DURING THE YEAR

*Please note that the income tax return lines referenced below pertain only to domestic investors.
If you are a foreign investor, the reporting of this income is dependent upon whether the income
is effectively or not effectively connected with a United States trade or business. As this determination is
dependent upon your specific activities in the United States, we recommend you consult your tax advisor
for the proper reporting of this income before entering the amounts calculated onto your income
tax return Form 1040NR (Individuals) or Form 1120-F (Corporations).

SCHEDULE I: INDIVIDUAL TAXPAYERS: YEAR: 2005

Income or Deduction	Per Unit	No. of Units	Total	Where to Report on Form 1040*


1) Interest Income	0.168024	X =	$	Schedule B, Part I, Line 1

2) Rental Income	0.073816	X =	$	Schedule E, Part I, Line 3

3) Gain from Sale of Iron Ore, Section 1231	10.329828	X =	$	Form 4797, Part I, Line 2, Columns d & g

Record Holders Proof Reconciliation:
Sum of lines 1, 2 & 3 should equal Substitute Form 1099-MISC Box 2 or Form 1042S (if applicable):			$

4) Certificate Amortization Deduction as calculated from Worksheet C:			$	Schedule D, Part II, Line 8, Columns e & f (in brackets)

STATE TAX ADJUSTMENT: Subtract U.S. Interest	0.155860	X =	$ ( )	Form M-1, Line 7 (For filing a State of Minnesota Tax Return)

SCHEDULE II: CORPORATE TAXPAYERS:

Income or Deduction	Per Unit	No. of Units	Total	Where to Report on Form 1120*


1) Interest Income	0.168024	X =	$	Line 5

2) Rental Income	0.073816	X =	$	Line 6

3) Gain from Sale of Iron Ore, Section 1231	10.329828	X =	$	Form 4797, Part I, Line 2, Column d

Record Holders Proof Reconciliation:
Sum of lines 1, 2 & 3 should equal Substitute Form 1099-MISC Box 2 or Form 1042S (if applicable):			$

4) Percentage Depletion Deduction	1.439876	X =	$	Form 4797, Part I, Line 2, Column f

5) AMT Preference Item: Percentage Depletion	1.439876	X =	$	Form 4626, Line 2(l)

6) Certificate Amortization Deduction as calculated from Worksheet C:			$	Schedule D, Part II, Line 6, Columns e & f (in brackets)

STATE TAX ADJUSTMENT: Add Percentage Depletion	1.439876	X =	$	Form M4-I, Line 2(h) (For filing a State of Minnesota Tax Return)

page 11

WORKSHEET B

CALCULATION OF TAXABLE INCOME FOR UNIT HOLDERS
THAT PURCHASED OR SOLD UNITS DURING THE YEAR

SCHEDULE I: INDIVIDUAL TAXPAYERS: YEAR: 2005

First Quarter – March 31, 2005

Income or Deduction	Per Unit	No. of Units	Total	Where to Report on Form 1040*


1) Interest Income	0.042006	X =	$

2) Rental Income	0.018454	X =	$

3) Gain from Sale of Iron Ore, Section 1231	2.582457	X =	$	NOTE:
				SEE GRAND TOTAL RECONCILIATION
STATE TAX ADJUSTMENT: Subtract U.S. Interest	0.038965	X =	$ ( )	NEXT PAGE

Second Quarter – June 30, 2005

Income or Deduction	Per Unit	No. of Units	Total	Where to Report on Form 1040*


1) Interest Income	0.042006	X =	$

2) Rental Income	0.018454	X =	$

3) Gain from Sale of Iron Ore, Section 1231	2.582457	X =	$	NOTE:
				SEE GRAND TOTAL RECONCILIATION
STATE TAX ADJUSTMENT: Subtract U.S. Interest	0.038965	X =	$ ( )	NEXT PAGE

page 12

(Individual continued)
Third Quarter – September 30, 2005

Income or Deduction	Per Unit	No. of Units	Total	Where to Report on Form 1040*


1) Interest Income	0.042006	X =	$

2) Rental Income	0.018454	X =	$

3) Gain from Sale of Iron Ore, Section 1231	2.582457	X =	$	NOTE:
				SEE GRAND TOTAL RECONCILIATION
STATE TAX ADJUSTMENT: Subtract U.S. Interest	0.038965	X =	$ ( )	BELOW

Fourth Quarter – December 30, 2005

Income or Deduction	Per Unit	No. of Units	Total	Where to Report on Form 1040*


1) Interest Income	0.042006	X =	$

2) Rental Income	0.018454	X =	$

3) Gain from Sale of Iron Ore, Section 1231	2.582457	X =	$	NOTE:
				SEE GRAND TOTAL RECONCILIATION
STATE TAX ADJUSTMENT: Subtract U.S. Interest	0.038965	X =	$ ( )	BELOW

GRAND TOTAL RECONCILIATION OF ABOVE RECORD DATES FOR
WORKSHEET B (Sum of respective total lines above):

	Total	Where to Report on Form 1040*


1) Interest Income	$	Schedule B, Part I, Line 1

2) Rental Income	$	Schedule E, Part I, Line 3

3) Gain from Sale of Iron Ore, Section 1231	$	Form 4797, Part I, Line 2, Columns d & g

Record Holders Proof Reconciliation:
Sum of lines 1, 2 & 3 should equal Substitute Form 1099-MISC Box 2 or Form 1042S (if applicable)	$

4) Certificate Amortization Deduction as calculated from Worksheet C:	$	Schedule D, Part II, Line 8, Columns e & f (in brackets)

STATE TAX ADJUSTMENT: Subtract U.S. Interest	$ ( )	Form M-1, Line 7 (For filing a State of Minnesota Tax Return)

page 13

SCHEDULE II: CORPORATE TAXPAYERS: YEAR: 2005

First Quarter – March 31, 2005

Income or Deduction	Per Unit	No. of Units	Total	Where to Report on Form 1120*


1) Interest Income	0.042006	X =	$

2) Rental Income	0.018454	X =	$

3) Gain from Sale of Iron Ore, Section 1231	2.582457	X =	$	NOTE:
				SEE GRAND TOTAL RECONCILIATION
4) Percentage Depletion Deduction	0.359969	X =	$	NEXT PAGE

5) AMT Preference Item: Percentage Depletion	0.359969	X =	$

STATE TAX ADJUSTMENT: Add Percentage Depletion	0.359969	X =	$

Second Quarter – June 30, 2005

Income or Deduction	Per Unit	No. of Units	Total	Where to Report on Form 1120*


1) Interest Income	0.042006	X =	$

2) Rental Income	0.018454	X =	$

3) Gain from Sale of Iron Ore, Section 1231	2.582457	X =	$	NOTE:
				SEE GRAND TOTAL RECONCILIATION
4) Percentage Depletion Deduction	0.359969	X =	$	NEXT PAGE

5) AMT Preference Item: Percentage Depletion	0.359969	X =	$

STATE TAX ADJUSTMENT: Add Percentage Depletion	0.359969	X =	$

page 14

(Corporate continued)
Third Quarter – September 30, 2005

Income or Deduction	Per Unit	No. of Units	Total	Where to Report on Form 1120*


1) Interest Income	0.042006	X =	$

2) Rental Income	0.018454	X =	$

3) Gain from Sale of Iron Ore, Section 1231	2.582457	X =	$	NOTE:
				SEE GRAND TOTAL RECONCILIATION
4) Percentage Depletion Deduction	0.359969	X =	$	BELOW

5) AMT Preference Item: Percentage Depletion	0.359969	X =	$

STATE TAX ADJUSTMENT: Add Percentage Depletion	0.359969	X =	$

Fourth Quarter –- December 30, 2005

Income or Deduction	Per Unit	No. of Units	Total	Where to Report on Form 1120*


1) Interest Income	0.042006	X =	$

2) Rental Income	0.018454	X =	$

3) Gain from Sale of Iron Ore, Section 1231	2.582457	X =	$	NOTE:
				SEE GRAND TOTAL RECONCILIATION
4) Percentage Depletion Deduction	0.359969	X =	$	BELOW

5) AMT Preference Item: Percentage Depletion	0.359969	X =	$

STATE TAX ADJUSTMENT: Add Percentage Depletion	0.359969	X =	$

GRAND TOTAL RECONCILIATION OF ABOVE RECORD DATES FOR
WORKSHEET B (Sum of respective total lines above):

	Total	Where to Report on Form 1120*


1) Interest Income	$	Line 5

2) Rental Income	$	Line 6

3) Gain from Sale of Iron Ore, Section 1231	$	Form 4797, Part I, Line 2, Column d

Record Holders Proof Reconciliation:
Sum of lines 1, 2 & 3 should equal Substitute Form 1099-MISC Box 2 or Form 1042S (if applicable)	$

4) Percentage Depletion Deduction	$	Form 4797, Part I, Line 2, Column f

5) AMT Preference Item: Percentage Depletion	$	Form 4626, Line 2(l)

6) Certificate Amortization Deduction from Worksheet C	$	Schedule D, Part II, Line 6, Columns e & f (in brackets)

STATE TAX ADJUSTMENT: Add Percentage Depletion	$	Form M4-I, Line 2(h) (For filing a State of Minnesota Tax Return)

page 15

WORKSHEET C

YEAR END BASIS AND CERTIFICATE AMORTIZATION COMPUTATIONS

Please note that a separate worksheet must be maintained for each unit or block of units
purchased on a particular date in order to accurately compute the basis in such units.

Items Affecting Basis	Cost or Other Basis Per Unit	No. of Units	Total


Basis: Beginning of the year or date of purchase, as applicable	$	X =	$

Plus: Income (Sum of Interest Income, Rental Income & Section 1231 Gain)			$	(from Substitute Form 1099-MISC Box 2 or Form 1042S or Worksheet A or B as calculated)

Less: Distributions received pertaining to –
First Quarter – March 31, 2005	2.20	X =	$ ( )	(if applicable)

Second Quarter – June 30, 2005	2.40	X =	$ ( )	(if applicable)

Third Quarter – September 30, 2005	2.80	X =	$ ( )	(if applicable)

Fourth Quarter – December 30, 2005	3.00	X =	$ ( )	(if applicable)

Subtotal: (Beginning Basis plus Income less Distributions)			$

Certificate Amortization Deduction Calculation, if you held your shares as of year end (Note: Use only one calculation below for each unit or block of units to determine your deduction, if allowed):

If you owned shares for the entire year and held them as of year-end, use this Annual Rate:		0.097385

OR
If you purchased shares during the year and held them as of year-end, compute your Partial Rate as follows:
Number of Days shares were owned during the year:	(a)

Number of Days remaining to the Trust as of end of the year:	(b) 3383

Total Number of Days to amortize certificate [Add (a) + (b)]:	(c)

Partial Rate equals (a) divided by (c):

Applicable Certificate Amortization % Rate (either Annual or Partial Rate from above):		X		(Annual or Partial Rate)

Certificate Amortization Deduction (Subtotal times Cert. Amort. Rate):		=	$ ( )	(to Worksheet A or B, as appropriate)

Adjusted Basis at year end (Subtotal less Certificate Amortization Deduction):			$	(needed for next year)

Units (Shares) held at year end: 2005				(needed for next year)

Adjusted Basis per Unit (Share) at year end (Adjusted Basis divided by Units):			$	(needed for next year)

page 16

NOMINEE REPORTING REQUIREMENTS: YEAR: 2005

If your federal ID number is shown on Form 1099-MISC or Form 1042S, and two or more recipients are shown or the form includes amounts belonging to another person, you are considered a nominee recipient. You must file Form 1099-MISC or Form 1042S, as appropriate, for each of the other owners showing the income allocable to each. File Form(s) 1099-MISC with Form 1096 (Annual Summary and Transmittal of U.S. Information Returns) at the Internal Revenue Service Center for your area. On Forms 1099-MISC and 1042S, you should be listed as the payer and the other owner(s) should be listed as the recipient. A husband or wife is not required to file a nominee return to show payments for the other. To prepare a Form 1099-MISC or Form 1042S for each recipient, you must know the number of units (shares) held by the recipient on each of the Trust's four record dates. The record dates and income factors needed to calculate income allocable to each recipient are listed below. You should multiply the units held on each record date times the applicable income factor, adding the results together and reporting the grand total on Form 1099-MISC Box 2 or Form 1042S to each recipient. When completed, all income in the Nominee’s Form 1099-MISC or Form 1042S should be accounted for and each recipient should receive a Form 1099-MISC or Form 1042S, a copy of this Guide and a summary of the recipient’s holdings on each of the record dates below. These same instructions apply to brokerage firms as to their preparation of a Form 1099-MISC or Form 1042S for their clients holding interests in the Trust in “street name.”

RECORD DATES:	INCOME FACTORS:		TAXPAYER ID NUMBER:
First Quarter – March 31, 2005		2.642917		41-0788355
Second Quarter – June 30, 2005		2.642917
Third Quarter – September 30, 2005		2.642917
Fourth Quarter – December 30, 2005		2.642917

		10.571668

S-F

NAME_________________________________ SOCIAL SECURITY #________________________________

Attachment – Schedule Reconciling Form 1042S to Individual Income Tax Return
for Certificate Holders of Record

				Where found on Form 1040NR

1)	Interest Income	+	$	on

2)	Rental Income	+		on

3)	Gain from Sale of Iron Ore,
	Section 1231	+		on

EQUALS: Form 1042S		=	$

GREAT NORTHERN IRON ORE PROPERTIES

S-D

NAME_________________________________ SOCIAL SECURITY #________________________________

Attachment – Schedule Reconciling Substitute Form 1099-MISC to Individual Income Tax Return
for Certificate Holders of Record

				Where found on Form 1040

1)	Interest Income	+	$	Schedule B, Part I, Line 1

2)	Rental Income	+		Schedule E, Part I, Line 3

3)	Gain from Sale of Iron Ore,
	Section 1231	+		Form 4797, Part I, Line 2, Column d

EQUALS: Substitute Form 1099-MISC Box 2		=	$

GREAT NORTHERN IRON ORE PROPERTIES

EX-99.(B) 10 grnorth060629_ex99b.htm AUDIT COMMITTEE CHARTER Exhibit 99(b) to Great Northern Iron Ore Properties Form 10-K dated December 31, 2005

Exhibit 99(b)

Audit Committee Charter

GREAT NORTHERN IRON ORE PROPERTIES
AUDIT COMMITTEE CHARTER

Organization

This Charter governs the operations of the Audit Committee. The Audit Committee shall review and reassess the Charter at least annually and obtain the approval of the Board of Trustees. The Audit Committee shall be appointed by the Board of Trustees and shall consist of at least three Trustees, each of whom are independent of management and the Trust. Members of the Audit Committee shall be considered independent as long as they do not accept any consulting, advisory or other compensatory fee from the Trust and are not an affiliated person of the Trust, and meet the independence requirements of the stock exchange listing standards. All Audit Committee members shall be financially literate and at least one member shall be an “audit committee financial expert,” as defined by Securities and Exchange Commission (SEC) regulations.

Purpose

The Audit Committee shall provide assistance to the Board of Trustees in fulfilling their oversight responsibility to the certificate holders, potential certificate holders, the investment community and others relating to the integrity of the Trust’s financial statements, the financial reporting process, the systems of internal accounting and financial controls, the performance of the Trust’s internal audit function and independent auditors, the independent auditor’s qualifications and independence, and the Trust’s compliance with ethics policies and legal and regulatory requirements. In so doing, it is the responsibility of the Audit Committee to maintain free and open communication between the Audit Committee, independent auditors, the internal audit function and management of the Trust.

In discharging its oversight role, the Audit Committee is empowered to investigate any matter brought to its attention with full access to all books, records, facilities and personnel of the Trust and the authority to engage independent counsel or other advisors as it determines necessary to carry out its duties.

Duties and Responsibilities

The primary responsibility of the Audit Committee is to oversee the Trust’s financial reporting process on behalf of the Board of Trustees and report the results of the Audit Committee’s activities to the Board of Trustees. Management is responsible for preparation, presentation and integrity of the Trust’s financial statements and for the appropriateness of the accounting principles and reporting policies that are used by the Trust. The independent auditors are responsible for auditing the Trust’s financial statements and for reviewing the Trust’s unaudited interim financial statements.

Audit Committee Charter (continued)

The Audit Committee, in carrying out its responsibilities, believes its policies and procedures should remain flexible in order to best react to changing conditions and circumstances. The Audit Committee should take the appropriate actions to set the overall corporate “tone” for quality financial reporting, sound business risk practices and ethical behavior. The following shall be the principal duties and responsibilities of the Audit Committee. These are set forth as a guide with the understanding that the Audit Committee may supplement them as appropriate.

The Audit Committee shall be directly responsible for the appointment and termination, compensation and oversight of the work of the independent auditors, including resolution of disagreements between management and the auditor regarding financial reporting. The Audit Committee shall preapprove all audit, non-audit, tax and other services provided by the independent auditors and shall not engage the independent auditors to perform the specific non-audit services proscribed by law or regulation. The Audit Committee may delegate preapproval authority to a member of the Audit Committee. The decisions of any Audit Committee member to whom preapproval authority is delegated must be presented to the full Audit Committee at its next scheduled meeting.

At least annually, the Audit Committee shall obtain and review a report by the independent auditors describing:

•	The accounting firm’s internal quality control procedures.

•

Any material issues raised by the most recent internal quality control review, or peer review, of the accounting firm, or by any inquiry or investigation by governmental or professional authorities, within the preceding five years, respecting one or more independent audits carried out by the accounting firm and any steps taken to deal with any such issues.

•	All relationships between the independent auditor and the Trust (to assess the auditor’s independence).

In addition, the Audit Committee shall set clear hiring policies for employees or former employees of the independent auditors that meet the SEC regulations and stock exchange listing standards.

The Audit Committee shall discuss with the internal audit function and the independent auditors the overall scope and plans for their respective audits, including the adequacy of staffing and compensation. Also, the Audit Committee shall discuss with management, the internal audit function and the independent auditors the adequacy and effectiveness of the accounting and financial controls, including the Trust’s policies and procedures to assess, monitor and manage business risk, and legal and ethical compliance programs (e.g., Trust’s Code of Ethics).

Audit Committee Charter (continued)

The Audit Committee shall meet separately periodically with management, the internal audit function and the independent auditors to discuss issues and concerns warranting Audit Committee attention. The Audit Committee shall provide sufficient opportunity for the internal audit function and the independent auditors to meet privately with the members of the Audit Committee. The Audit Committee shall review with the independent auditors any audit problems or difficulties and management’s response.

The Audit Committee shall receive regular reports from the independent auditors on the critical policies and practices of the Trust and all alternative treatments of financial information within generally accepted accounting principles that have been discussed with management.

The Audit Committee shall review the interim financial statements and disclosures under Management’s Discussion and Analysis of Financial Condition and Results of Operations with management and the independent auditors prior to the filing of the Trust’s Quarterly Report on Form 10-Q. Also, the Audit Committee shall discuss the results of the quarterly review and any other matters required to be communicated to the Audit Committee by the independent auditors under generally accepted auditing standards. The Audit Committee shall review and discuss earnings press releases. The chair of the Audit Committee may represent the entire Audit Committee for the purposes of this review.

The Audit Committee shall review with management and the independent auditors the financial statements and disclosures under Trustees’ & Management’s Discussion and Analysis of Financial Condition and Results of Operations to be included in the Trust’s Annual Report on Form 10-K (or the Annual Report to Certificate Holders if distributed prior to the filing of Form 10-K), including their judgment about the quality, not just the acceptability, of accounting principles, the reasonableness of significant judgments and the clarity of the disclosures in the financial statements. Also, the Audit Committee shall discuss the results of the annual audit and any other matters required to be communicated to the Audit Committee by the independent auditors under generally accepted auditing standards.

The Audit Committee shall establish procedures for the receipt, retention and treatment of complaints received by the issuer regarding accounting, internal accounting controls or auditing matters and the confidential, anonymous submission by employees of the issuer of concerns regarding questionable accounting or auditing matters.

The Audit Committee shall receive corporate attorneys’ reports of evidence of a material violation of securities laws or breaches of fiduciary duty.

Audit Committee Charter (continued)

The Audit Committee shall review management’s assertions related to its assessment of the effectiveness of internal controls as of the end of the most recent fiscal year and the independent auditors’ report on such assertions.

The Audit Committee shall prepare its report to be included in the Trust’s Annual Report on Form 10-K (as an exhibit), as required by SEC regulations.

The Audit Committee shall perform an evaluation of its performance at least annually to determine whether it is functioning effectively.

EX-99.(C) 11 grnorth060629_ex99c.htm REPORT OF AUDIT COMMITTEE Exhibit 99(c) to Great Northern Iron Ore Properties Form 10-K dated December 31, 2005

Exhibit 99(c)

Report of Audit Committee

GREAT NORTHERN IRON ORE PROPERTIES
Report of Audit Committee
Year ended December 31, 2005

The Audit Committee oversees the Trust’s financial reporting process on behalf of the Board of Trustees. Management has the primary responsibility for the financial statements and the reporting process including the systems of internal controls. In fulfilling its oversight responsibilities, the Audit Committee reviewed the audited financial statements in the Annual Report with management including a discussion of the quality, not just the acceptability, of the accounting principles, the reasonableness of significant judgments and the clarity of disclosures in the financial statements.

The Audit Committee reviewed with the independent auditors, who are responsible for expressing an opinion on the conformity of those audited financial statements with accounting principles generally accepted in the United States, their judgments as to the quality, not just the acceptability, of the Trust’s accounting principles and such other matters as are required to be discussed with the Audit Committee under auditing standards generally accepted in the United States. In addition, the Audit Committee has discussed with the independent auditors the auditors’ independence from management and the Trust including the matters in the written disclosures required by the Independence Standards Board.

The Audit Committee discussed with the Trust’s independent auditors the overall scope and plans for their audit. The Audit Committee met with the independent auditors, with and without management present, to discuss the results of their examination, their evaluation of the Trust’s internal controls and the overall quality of the Trust’s financial reporting.

The Board of Trustees accepted the Audit Committee’s reappointment of Ernst & Young LLP as independent auditors to the financial statements of the Trust for the year 2005. All audit and non-audit services (printing and reproduction services) were preapproved by the Audit Committee. Estimated fees in 2005 for the annual audit services are $67,700, for audited-related services are $1,300, for tax services are $0 and for all other services are $2,750. Fees paid in 2004 for the annual audit services were $79,250, for audit-related services were $1,300, for tax services were $0 and for all other services were $2,750.

In reliance on the reviews and discussions referred to above, the Audit Committee recommended to the Board of Trustees that the audited financial statements be included in the Annual Report on Form 10-K for the year ended December 31, 2005, for filing with the Securities and Exchange Commission.

Report of Audit Committee (continued)

Respectfully submitted,

/s/ Robert A. Stein
Robert A. Stein, Audit Committee Chairman

/s/ Roger W. Staehle
Roger W. Staehle, Audit Committee Member

/s/ John H. Roe, III
John H. Roe, III, Audit Committee Member	Dated: February 16, 2006

COVER 12 filename12.htm Cover Letter to Great Northern Iron Ore Properties Form 10-K dated December 31, 2005

GREAT NORTHERN IRON ORE PROPERTIES
W-1290 First National Bank Building
332 Minnesota Street
Saint Paul, MN 55101-1361
(651) 224-2385
FAX (651) 224-2387

February 24, 2006

Securities and Exchange Commission
100 F Street, N.E.
Washington, DC 20549

Attention:

Filing Desk, Stop 1-4
CIK #0000043410

Gentlemen:

Commission File No. 1-701

Following is our “Annual Report on Form 10-K” for the year ended December 31, 2005, including Financial Statements and Exhibits, consistent with those of the prior year.

Yours very truly,

/s/ Thomas A. Janochoski

Vice President and Secretary

-----END PRIVACY-ENHANCED MESSAGE-----

Annual Report on Form 10-K

Great Northern Iron Ore Properties

December 31, 2005

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, 2005

Commission File Number 1-701

GREAT NORTHERN IRONORE PROPERTIES

Ninety-NinthAnnual Report of the Trusteesto Certificate HoldersforYear Ended December 31, 2005

GREAT NORTHERN IRON ORE PROPERTIES

GREAT NORTHERN IRON ORE PROPERTIES SUMMARY OF OPERATIONS

Trustees’ & Management’s Discussion and Analysis of Financial Condition and Results of Operations

MANAGEMENT’S REPORT ON INTERNAL CONTROL OVERFINANCIAL REPORTING

GREAT NORTHERN IRON ORE PROPERTIES STATEMENTS OF INCOME

GREAT NORTHERN IRON ORE PROPERTIES BALANCE SHEETS ASSETS

GREAT NORTHERN IRON ORE PROPERTIES STATEMENTS OF CASH FLOWS

GREAT NORTHERN IRON ORE PROPERTIES NOTES TO FINANCIAL STATEMENTS December 31, 2005

REPORT OF ERNST & YOUNG LLP, INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM, ON AUDIT OF FINANCIAL STATEMENTS

REPORT OF ERNST & YOUNG LLP, INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM, ON MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

GREAT NORTHERN IRON ORE PROPERTIES SUMMARY OF SHIPMENTS

NOTES

WORKSHEET A

CALCULATION OF TAXABLE INCOME FOR UNIT HOLDERS THAT HELD A CONSTANT NUMBER OF UNITS ON EACH OF THE FOUR QUARTERLY RECORD DATES DURING THE YEAR

SCHEDULE I: INDIVIDUAL TAXPAYERS: YEAR: 2005

WORKSHEET B

CALCULATION OF TAXABLE INCOME FOR UNIT HOLDERS THAT PURCHASED OR SOLD UNITS DURING THE YEAR

SCHEDULE I: INDIVIDUAL TAXPAYERS: YEAR: 2005

SCHEDULE II: CORPORATE TAXPAYERS: YEAR: 2005

WORKSHEET C

YEAR END BASIS AND CERTIFICATE AMORTIZATION COMPUTATIONS

NOMINEE REPORTING REQUIREMENTS: YEAR: 2005

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

GREAT NORTHERN IRON
ORE PROPERTIES

Ninety-Ninth
Annual Report of the Trustees
to Certificate Holders

for
Year Ended December 31, 2005

GREAT NORTHERN IRON ORE PROPERTIES

SUMMARY OF OPERATIONS

Trustees’ & Management’s Discussion and Analysis of Financial Condition
and Results of Operations

MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER
FINANCIAL REPORTING

GREAT NORTHERN IRON ORE PROPERTIES

STATEMENTS OF INCOME

GREAT NORTHERN IRON ORE PROPERTIES

BALANCE SHEETS

ASSETS

GREAT NORTHERN IRON ORE PROPERTIES

STATEMENTS OF CASH FLOWS

GREAT NORTHERN IRON ORE PROPERTIES

NOTES TO FINANCIAL STATEMENTS

December 31, 2005

REPORT OF ERNST & YOUNG LLP,

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM,

ON AUDIT OF FINANCIAL STATEMENTS

REPORT OF ERNST & YOUNG LLP,

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM,

ON MANAGEMENT’S REPORT ON

INTERNAL CONTROL OVER FINANCIAL REPORTING

GREAT NORTHERN IRON ORE PROPERTIES

SUMMARY OF SHIPMENTS

CALCULATION OF TAXABLE INCOME FOR UNIT HOLDERS THAT HELD A CONSTANT NUMBER OF UNITS
ON EACH OF THE FOUR QUARTERLY RECORD DATES DURING THE YEAR

CALCULATION OF TAXABLE INCOME FOR UNIT HOLDERS
THAT PURCHASED OR SOLD UNITS DURING THE YEAR