GREAT NORTHERN IRON ORE PROPERTIES FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 2007

x Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 -
For the Period Ended September 30, 2007

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

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter periods that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

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

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

Number of shares of beneficial interest outstanding on September 30, 2007: 1,500,000

	September 30 2007		December 31 2006
ASSETS	(Unaudited)		(Note)
CURRENT ASSETS
Cash and cash equivalents	$	983,348	$	1,131,504
United States Treasury securities		4,110,231		5,086,107
Royalties receivable		4,887,857		4,444,446
Prepaid expenses		21,958		4,519
TOTAL CURRENT ASSETS		10,003,394		10,666,576

NONCURRENT ASSETS
United States Treasury securities		5,088,428		3,721,752

PROPERTIES
Mineral and surface lands		38,691,707		38,691,707
Less: Allowances for depletion and amortization		-34,885,060		-34,719,685
		3,806,647		3,972,022

Building and equipment		356,156		359,543
Less: Allowances for accumulated depreciation		-233,672		-209,817
		122,484		149,726
TOTAL PROPERTIES		3,929,131		4,121,748
TOTAL ASSETS	$	19,020,953	$	18,510,076

LIABILITIES AND BENEFICIARIES’ EQUITY
CURRENT LIABILITIES
Accounts payable and accrued expenses	$	140,267	$	84,418
Distributions		4,200,000		4,950,000
TOTAL CURRENT LIABILITIES		4,340,267		5,034,418

NONCURRENT LIABILITIES
Deferred compensation		77,000		77,000
Liability for pension benefits		1,135,522		1,237,412
TOTAL NONCURRENT LIABILITIES		1,212,522		1,314,412
TOTAL LIABILITIES		5,552,789		6,348,830


BENEFICIARIES’ EQUITY, including certificate holders’ equity, represented by 1,500,000 certificates (shares or units) of beneficial interest authorized and outstanding, and the reversionary interest		15,304,742		14,127,598
Accumulated other comprehensive loss		-1,836,578		-1,966,352
TOTAL BENEFICIARIES’ EQUITY		13,468,164		12,161,246
TOTAL LIABILITIES AND BENEFICIARIES’ EQUITY	$	19,020,953	$	18,510,076

Note: The balance sheet at December 31, 2006, has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.

	Three Months Ended September 30						Nine Months Ended September 30
	2007			2006			2007			2006
Revenues:
Royalties	$	5,119,516		$	4,298,949		$	13,432,024		$	11,902,756
Interest and other income		142,222			112,421			429,916			328,629
		5,261,738			4,411,370			13,861,940			12,231,385
Costs and expenses		642,093			678,145			2,034,796			2,100,973

NET INCOME	$	4,619,645		$	3,733,225		$	11,827,144		$	10,130,412

Weighted-average shares outstanding		1,500,000			1,500,000			1,500,000			1,500,000

BASIC & DILUTED EARNINGS PER SHARE	$	3.08		$	2.49		$	7.88		$	6.75

Distributions declared per share	$	2.80	(1)	$	2.80	(2)	$	7.10	(3)	$	7.00	(4)

(1)

2.80

declared

9/6/2007

payable

10/31/2007

(2)

2.80

declared

9/11/2006

paid

10/31/2006

(3)

2.00

declared

3/9/2007

plus

2.30

declared

6/19/2007

plus

2.80

declared

9/6/2007

paid

4/30/2007

paid

7/31/2007

payable

10/31/2007

(4)

2.00

declared

3/20/2006

plus

2.20

declared

6/12/2006

plus

2.80

declared

9/11/2006

paid

4/28/2006

paid

7/31/2006

paid

10/31/2006

	Nine Months Ended September 30
	2007		2006
Cash flows from operating activities:
Cash received from royalties and rents	$	13,091,528	$	11,775,208
Cash paid to suppliers and employees		-1,775,885		-1,857,785
Interest received		336,201		236,781
NET CASH PROVIDED BY OPERATING ACTIVITIES		11,651,844		10,154,204

Cash flows from investing activities:
U.S. Treasury securities purchased		-4,050,000		-3,850,000
U.S. Treasury securities matured		3,650,000		4,565,984
Net expenditures for building and equipment		0		-23,640
NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES		-400,000		692,344

Cash flows from financing activities:
Distributions paid		-11,400,000		-10,800,000
NET CASH USED IN FINANCING ACTIVITIES		-11,400,000		-10,800,000

Net (decrease) increase in cash and cash equivalents		-148,156		46,548

Cash and cash equivalents at beginning of year		1,131,504		774,916

CASH AND CASH EQUIVALENTS AT SEPTEMBER 30	$	983,348	$	821,464

Periods of Three and Nine Months ended September 30, 2007 and September 30, 2006

The accompanying unaudited condensed financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the periods stated above are not necessarily indicative of the results that may be expected for each respective full year. For further information, refer to the financial statements and footnotes included in the Great Northern Iron Ore Properties (“Trust”) Annual Report on Form 10-K for the year ended December 31, 2006.

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 September 30, 2007:

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.

	Three Months Ended September 30				Nine Months Ended September 30
	2007		2006		2007		2006
Service cost	$	60,345	$	58,881	$	181,036	$	176,644
Interest cost		81,960		77,400		245,881		232,200
Expected return on assets		-86,422		-78,094		-259,267		-234,284
Amortization of net loss		38,891		41,552		116,672		124,657
Amortization of prior service cost		4,367		4,367		13,102		13,101
Net periodic pension cost	$	99,141	$	104,106	$	297,424	$	312,318

The plan’s annual actuarial valuation was performed as of the plan’s fiscal year-end March 31. The actuarially recommended contribution to the pension plan for 2007 was $269,540, which contribution was made in August, 2007.

	Three Months Ended September 30				Nine Months Ended September 30
	2007		2006		2007		2006
Net income	$	4,619,645	$	3,733,225	$	11,827,144	$	10,130,412
Other comprehensive income:
Defined benefit pension plan, pursuant to SFAS No. 158, which was adopted effective as of December, 2006 -
Amortization of net loss		38,891		—		116,672		—
Amortization of prior service cost		4,367		—		13,102		—
Total other comprehensive income		43,258		—		129,774		—
Total comprehensive income	$	4,662,903	$	3,733,225	$	11,956,918	$	10,130,412

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

Periods of Three and Nine Months ended September 30, 2007 and September 30, 2006

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

The terms of the Great Northern Iron Ore Properties Trust Agreement, created December 7, 1906, state that the Trust shall continue for twenty years after the death of the last 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 under the terms of the Trust Agreement.

We have previously provided information in our various Securities and Exchange Commission filings, including our Annual Report, about the final distribution payable to the certificate holders upon the Trust’s termination. The exact final distribution, though not determinable at this time, will generally consist of the sum of the Trust’s net monies (essentially, total assets less liabilities and properties) and the balance in the Principal Charges account, less any and all expenses and obligations of the Trust upon termination. To offer a hypothetical example, without factoring in any expenses and obligations of the Trust upon its termination, and using the financial statement values as of December 31, 2006, the net monies were approximately $8.0 million and the Principal Charges account balance was approximately $5.2 million, resulting in a final distribution payable of approximately $13.2 million, or about $8.80 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.

Royalties increased $1,529,268 and $820,567 during the nine months and three months ended September 30, 2007, respectively, as compared to the same periods in 2006, due mainly to overall higher average earned royalty rates on taconite production from Trust lands.

Interest and other income increased $101,287 and $29,801 during the nine months and three months ended September 30, 2007, respectively, as compared to the same periods in 2006, due mainly to improved yields on the Trust’s investments.

Costs and expenses decreased $66,177 and $36,052 during the nine months and three months ended September 30, 2007, respectively, as compared to the same periods in 2006, due mainly to reduced legal and accounting expenditures, which were due, in part, to efficiencies achieved relating to the audit and testing of the Trust’s internal controls.

At their meeting held on September 6, 2007, the Trustees declared a distribution of $2.80 per share, amounting to $4,200,000 payable October 31, 2007, to certificate holders of record at the close of business on September 28, 2007. The Trustees have now declared three quarterly distributions in 2007. The first, in the amount of $2.00 per share, was paid on April 30, 2007 to certificate holders of record on March 30, 2007; the second, in the amount of $2.30 per share, was paid on July 31, 2007 to certificate holders of record on June 29, 2007; and the third, that being the current distribution. The first, second and third quarter 2006 distributions were $2.00, $2.20 and $2.80 per share, respectively. The Trustees intend to continue quarterly distributions and set the record date as of the last business day of each quarter. The next distribution will be paid in late January 2008 to certificate holders of record on December 31, 2007.

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

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

As of the end of the period covered by this report, the Trust conducted an evaluation, under the supervision and with the participation of the Chief Executive Officer and Chief Financial Officer, of the Trust’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934 (the “Exchange Act”)). Based on this evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Trust’s disclosure controls and procedures are effective to ensure that information required to be disclosed by the Trust in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms. There was no change in the Trust’s internal control over financial reporting during the Trust’s most recently completed fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Trust’s internal control over financial reporting.

There are no material changes from the risk factors previously disclosed in the Trust’s December 31, 2006 Annual Report on Form 10-K.

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

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

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

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

Minnesota	41-0788355
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)

W-1290 First National Bank Building 332 Minnesota Street Saint Paul, Minnesota	55101-1361
(Address of principal executive office)	(Zip Code)

Attorneys’ fees and expenses	$	1,024,834
Cost of surface lands		5,817,965
Cumulative shipment credits		-1,670,687
Cumulative asset disposition credits		-111,581

Principal Charges account balance	$	5,060,531

		GREAT NORTHERN IRON ORE PROPERTIES (Registrant)
Date	October 25, 2007	By	/s/ Joseph S. Micallef
			Joseph S. Micallef, President of the Trustees and Chief Executive Officer


Date	October 25, 2007	By	/s/ Thomas A. Janochoski
			Thomas A. Janochoski, Vice President & Secretary and Chief Financial Officer