Annual Report (10-k)

Annual Report on Form 10-K

Great Northern Iron Ore Properties

December 31, 2014

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, 2014

Commission File Number 1-701

GREAT NORTHERN IRON ORE PROPERTIES

(Exact name of registrant as specified in its charter)

Minnesota		41-0788355
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification 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 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 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 12 months and (2) has been subject to such filing requirements for the past 90 days. Yes X No ____

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes X No ____

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. X

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

Large accelerated filer			Accelerated filer
Non-accelerated filer	X		Smaller reporting company

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

As of the last business day of the registrant’s most recently completed second fiscal quarter, that being June 30, 2014, the aggregate market value of the registrant’s certificates (shares) of beneficial interest held by non-affiliates of the registrant was $29,760,000 based on the closing sale price as reported on the New York Stock Exchange Euronext – 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, 2014, 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 in northeastern Minnesota. The Registrant is a conventional nonvoting 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 and matters affecting the Trust are under the jurisdiction of the Ramsey County District Court (“Court”) in Saint Paul, Minnesota. Income is primarily derived from royalties on iron ore minerals (taconite) mined by our lessees from these properties and minimum royalties. The Registrant is presently involved primarily 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 (“Trust Agreement”) state that the Trust shall continue for twenty years after the death of the last survivor of eighteen persons named in the Trust Agreement. The last survivor of these eighteen persons died on April 6, 1995. Accordingly, the Trust terminates twenty years from April 6, 1995, that being April 6, 2015.

Upon the termination date of the Trust on April 6, 2015, the certificates of beneficial interest (shares) in the Trust will cease to trade on the New York Stock Exchange and thereafter will represent only the right to receive certain distributions payable to the certificate holders of record at the time of the termination of the Trust. Upon Trust termination and after the wind-down process is completed, the Trust is obligated to distribute ratably to these certificate holders the net monies remaining in the hands of the Trustees (after paying and providing for all expenses and obligations incurred through the Trust’s termination and wind-down process), plus the balance in the Principal Charges account (this account is explained in the Trust’s Annual Report sent to all certificate holders every year), all of which are subject to the final accounting and approval of the Court. All other Trust property (most notably the Trust’s mineral properties and the active leases) must be conveyed and transferred to the reversioner (which, effective January 1, 2015, is Glacier Park Iron Ore Properties LLC, a wholly owned subsidiary of Glacier Park Company, which is a wholly owned subsidiary of ConocoPhillips Company), without further payment or remuneration to the certificate holders, under the terms of the Trust Agreement. The wind-down process of the Trust is anticipated to extend into the calendar year following its termination date in order to complete the various year-end audits, court and regulatory filings, tax returns, conveyances of non-cash properties to the reversioner, etc., relative thereto. Subject to the guidance and approval of the Court and assuming the wind-down process with the reversioner proceeds efficiently and that no other complications arise during this time period, we anticipate the wind-down process, final distribution and dissolution of the Trust will be completed by the end of 2016.

Item 1.

BUSINESS – continued

The Trust has previously provided information in its various Securities and Exchange Commission filings, including its Annual Report, about the final distribution payable to the certificate holders upon the Trust’s termination and after the wind-down process is completed. The exact final distribution, though not determinable at this time, will generally consist of the sum of the Trust’s net monies (essentially, total assets less liabilities and less properties) and the balance in the Principal Charges account, less any and all expenses and obligations incurred through the Trust’s termination and wind-down process. To offer a hypothetical example, without factoring in any expenses and obligations incurred through the Trust’s termination and wind-down process, and using the financial statement values as of December 31, 2014, the net monies were approximately $6,859,000 and the Principal Charges account balance was approximately $4,710,000, resulting in a final distribution payable of approximately $11,569,000, or about $7.71 per share. Upon the termination of the Trust, the certificates of beneficial interest (shares) would be cancelled and thereafter represent only the right to receive the final distribution. It is important to note, however, that the actual net monies on hand and the Principal Charges account balance will most likely fluctuate and will not be “final” until after the termination and wind-down process of the Trust is completed. The Trust offers this example to further inform investors about the conceptual nature of the final distribution and does not imply or guarantee a specific known final distribution amount.

The Trustees petitioned the Court for a hearing, which hearing occurred on October 7, 2014 and was continued on November 24, 2014, to address the matter of the Trust’s termination, including the scope of the Trustees’ duties, powers and authority during the wind-down period, their plan for termination and for guidance relative to the allocation of expenses. Please refer to “Item 3. Legal Proceedings” for additional information relative to the Court proceedings and matters concerning the termination of the Trust.

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 primarily involved with administering the leases on the properties. Since the mining companies insist on the flexibility to move from property to property (though not necessarily to another Trust property) as mining requirements dictate, such changes in production cannot be predicted or reduced to financial forecasts.

Although the Registrant owns in excess of 67,000 acres in varied fee (surface and/or mineral) and ownership percentage interests in northeastern Minnesota, our mineral interests on the Mesabi Iron Range formation represent 12,033 acres, including approximately 7,443 acres that 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

Item 1.

BUSINESS – continued

50% interest and 160 acres in tenancy in common with other fractional interests. Of said mineral interest total, 9,815 acres are under lease and 2,218 acres are unleased.

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.

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 proven and probable ore reserves of magnetic taconite under lease as of December 31, 2014, were equivalent to approximately 343,200,000 tons of pellets. These ore reserves are developed from exploration drilling (diamond drilling) analyses performed by our lessees (steel and mining companies), with our interaction and assistance, though they have never been audited by any external party as this is not a customary practice. Although the ore reserves generally are adjusted downward each year for taconite pellet shipments and/or lease expirations, they may also increase due to new leases entered into and/or amendments to existing leases that may provide for the development of additional reserves. In addition, reserve adjustments (positive or negative) are made from time to time when additional diamond drilling results in adjustments to the estimates. Refer to the table of current leases within this “Item 1. Business” section for additional reserve information.

Present taconite leases provide for minimum royalties aggregating approximately $5,961,000 for the year 2015 even if no taconite is mined. This entire amount is attributable to long-term taconite leases.

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

Item 1.

BUSINESS – continued

provisions and other matters. The Registrant’s non-taconite shipments have presently ceased as a source of income. The mining of taconite by lessees is the most important part of our present business. Future development depends, to a large part, on the demand for taconite from our properties by the steel and 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 absorption of minimum royalties collected.

Following is a summary of shipments by lessee (operating facility) for the years 2014, 2013 and 2012:

	Pellet Tons Shipped
	2014		2013		2012

Hibbing Taconite Company		2,880,435		2,954,715		3,211,256
U.S. Steel Corporation – Minntac		2,778,540		2,922,771		3,237,598
U.S. Steel Corporation – Keetac		508,755		578,561		911,602
		6,167,730		6,456,047		7,360,456

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 (“IRS”) on December 30, 1988. As of January 1, 1989, the Trust was no longer subject to federal and Minnesota corporate income taxes. For years 1989 and thereafter, certificate holders are taxed on their allocable share of the Trust’s taxable income whether or not the income is distributed. For certificate holder tax purposes, the Trust’s taxable 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 2015 to registered certificate holders of record with holdings on any of the four quarterly record dates during 2014. This information included the following:

•

Substitute Form 1099-MISC – This form reported the registered certificate holder’s 2014 allocable share of taxable income from the Trust, distributions declared and any taxes withheld. (Foreign registered certificate holders received a Form 1042-S.)

•

Trust Supplemental Statement – This statement reported the number of units (shares) held by the registered certificate holder on any of the four quarterly record dates in 2014.

Item 1.

BUSINESS – continued

•

Tax Return Guide – This guide instructed the certificate holders as to the preparation of their income tax returns with respect to taxable income allocated from the Trust and various deductions allowable.

At December 31, 2014, 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 primarily depends upon production by the steel and mining companies that lease our properties. We have no operations in foreign countries. Our customers’ (or lessees’) taconite facilities are all located in northeastern Minnesota, though the ownership interests and/or corporate headquarters are elsewhere, as explained in the footnotes to the table below.

The Registrant maintains a Web site, which can be found at www.gniop.com. Information about the Registrant posted on the Web site includes: General Trust information (including information about the termination of the Trust), Securities and Exchange Commission filings (Forms 10-K, Forms 10-Q, Forms 8-K), Annual Reports, Tax Return Guides, Quarterly Distribution Releases, Quarterly Earnings Releases, Court Hearings, Audit Committee Charter, Code of Ethics, Contact and other information. We will, upon request, be pleased to furnish to any certificate holder or investor, free of charge, a paper copy of any of the above documents for any recent year.

Item 1.

BUSINESS – continued

The table on the following page is a listing of the Registrant’s current leases, all associated with taconite mining facilities located on the Mesabi Iron Range in northeastern Minnesota near the cities of Hibbing and Virginia. The following footnotes pertain to said table:

(a)

Operator of lease is as follows: (1) U.S. Steel Corporation – Minntac (“Minntac”); (2) U.S. Steel Corporation – Keetac (“Keetac”); (3) Cliffs Mining Company – Hibbing Taconite Company (“Hibtac”); (4) Essar Steel Minnesota, LLC (“ESM”). The ownership interests and corporate headquarters for the above operators are as follows: Minntac and Keetac owned 100% by U.S. Steel Corporation (Pittsburgh, PA); Hibtac owned 62.3% by ArcelorMittal (Luxembourg), 23% by Cliffs Natural Resources Inc. (Cleveland, OH), and 14.7% by U.S. Steel Corporation (Pittsburgh, PA); and ESM owned 100% by Essar Steel Holdings Ltd. (Mauritius), a subsidiary of Essar Global Ltd. (Mumbai, India).

(b)

Represents leased mineral acres on iron formation.

(c)

Represents other leased surface acres on or off iron formation and/or mineral acres off iron formation.

(d)

Represents proven and probable magnetic taconite reserves in pellet tons (rounded to the nearest thousand) remaining as of the end of the fiscal year.

(e)

Lessee termination provision requires notice of: (1) 1 year; (2) 6 months.

Item 1.

BUSINESS – continued

Table of Registrant’s current leases:

Lease ^(a)	Mineral Acres ^(b)	Other Acres ^(c)	Total Number of Leased Acres	Magnetic Ore Reserves in Pellet Tons (000) ^(d)	GNIOP Mineral Interest	County Location	Term ^(e)

Bennett Annex ⁽²⁾	238	–	238	–	100%	St. Louis	01/01/1965 to 12/31/2039 ⁽¹⁾
Carmi-Enterprise ⁽²⁾	2,352	782	3,134	34,504	100	St. Louis and Itasca	01/01/2011 to 12/31/2057 ⁽²⁾
Gray Annex ⁽³⁾	40	–	40	–	50	St. Louis	01/01/1974 to 01/01/2049 ⁽¹⁾
Ontario 50% ⁽³⁾	1,317	80	1,397	15,167	50	St. Louis and Itasca	07/01/1978 to 12/31/2016 ⁽¹⁾
Ontario 100% ⁽³⁾	280	120	400	7,082	100	St. Louis and Itasca	07/01/1978 to 12/31/2016 ⁽¹⁾

Ontario #3 ⁽³⁾	40	40	80	457	25	St. Louis	01/02/1993 to 12/31/2016 ⁽¹⁾
Mahoning ⁽³⁾	940	40	980	34,903	100	St. Louis and Itasca	01/01/1979 to 12/31/2026 ⁽¹⁾
Russell Annex ⁽²⁾	200	–	200	210	50	Itasca	01/01/1966 to 12/31/2040 ⁽¹⁾
South Stevenson ⁽²⁾	180	–	180	17,637	100	St. Louis	04/01/1966 to 04/01/2041 ⁽¹⁾

Minntac ⁽¹⁾	1,525	200	1,725	144,206	100	St. Louis	01/01/1959 to 12/31/2057 ⁽²⁾
Atkins ⁽¹⁾	440	40	480	39,314	~91	St. Louis	08/01/1984 to 12/31/2033 ⁽²⁾
MSI (100%) ⁽⁴⁾	1,190	877	2,067	20,466	100	Itasca	11/29/2006 to 12/31/2036 ⁽²⁾
MSI BLGN ⁽⁴⁾	1,073	–	1,073	29,254	50	Itasca	11/29/2006 to 12/31/2036 ⁽²⁾
MSI 50% ⁽⁴⁾	–	80	80	–	50	Itasca	11/29/2006 to 12/31/2036 ⁽²⁾

Totals	9,815	2,259	12,074	343,200

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 Keetac, owned and operated by U.S. Steel Corporation; Hibtac, owned by ArcelorMittal, Cliffs Natural Resources Inc. and U.S. Steel Corporation, and operated by Cliffs Mining Company; and ESM, owned by Essar Steel Holdings Ltd., a subsidiary of Essar Global Ltd., which includes a new taconite mining plant currently being constructed by ESM. Because our revenues are primarily dependent upon a limited number of customers, 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, minimum royalties, ore body quality, metallurgical and geological characteristics, and location of our lands. Also sometimes affecting taconite production from our lands are extreme weather conditions and labor contracts at the mines. Though we are not a party to the labor contracts, all pertinent labor contracts affecting production from our lands run through August 31, 2015. Additionally, over the past few years, the domestic steel and taconite industries have also been influenced by the global markets. As a result, the future demand for domestic steel and taconite, which is now part of the global markets, is uncertain. While any cut in production by any of our lessees can adversely affect the Trust, continued receipt of minimum royalties do mitigate this effect, in part.

The Registrant’s royalty rates are generally 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 (the “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 that the Trust has remained in compliance with the provisions of Section 646 since its election in 1988.

The Trust terminates April 6, 2015.

As previously reported, the termination date of the Trust is April 6, 2015. Accordingly, we remind certificate holders that there is remaining only one more regular quarterly distribution, which will be declared in the first quarter of 2015. While there will be some income allocated to the second quarter of 2015 (representing six days of business through April 6, 2015), it is expected that this amount will be nominal and will likely be included with the final distribution to certificate holders of record as of the termination date of the Trust, which will be made subsequent to the Trust’s termination date and upon completion of the wind-down process and final accounting. The final distribution will generally consist of the sum of the Trust’s net monies (essentially, total assets less liabilities and less properties) remaining in the hands of the Trustees (after paying and providing for all expenses and obligations incurred through the Trust’s termination and wind-down process), and the balance in the Principal Charges account, all of which are subject to the final accounting and approval of the Ramsey County District Court. Upon Trust termination, the shares will be cancelled and thereafter represent only the right to receive the final distribution. All other Trust properties will be conveyed to the reversioner upon the completion of the wind-down process without further payment or remuneration to the certificate holders.

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 in northeastern Minnesota, many of which are leased to the steel and mining companies that mine the mineral lands for taconite ore. A list of the leased properties is shown in table format in “Item 1. Business” above. The leases provide the lessees exclusive mining rights during the term of such leases. Taconite deposits are substantial, and our ore reserves are deemed proven and probable. The properties have a reversionary interest as explained in “Item 1. Business” 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 the 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 Ramsey County District Court, Saint Paul, Minnesota, for further instructions defining what is required in a particular case to balance the interests of certificate holders and reversioner. Also, the Minnesota Supreme 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.

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. As of January 1, 1989, the Trust was no longer subject to federal and Minnesota corporate income taxes. For years 1989 and thereafter, certificate holders are taxed on their allocable share of the Trust’s taxable income whether or not the income is distributed. For certificate holder tax purposes, the Trust’s taxable income is determined on an annual basis, one-fourth then being allocated to each quarterly record date.

By a letter dated April 1, 2014, certificate holders of record as of December 31, 2013, and the reversioner were notified of a hearing on April 30, 2014, in Ramsey County District Court, Saint Paul, Minnesota, for the purpose of settling and allowing the Trust accounts for the year 2013. By Court Order signed and dated April 30, 2014, the 2013 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.

By a letter dated September 12, 2014, certificate holders of record as of September 8, 2014, and the reversioner were notified of a hearing on October 7, 2014, in Ramsey County District Court, Saint Paul, Minnesota, for the purpose of requesting from the Court instruction and guidance regarding the Trustees’ duties, powers and authority relative to operations of the Trust and the wind-down process subsequent to April 6, 2015, for approval of the Trustees’ Wind-Up Plan, and for instruction and guidance pertaining to the allocation of expenses of the Trust between the certificate holders and reversioner. The hearing was not completed on October 7, 2014 and the Court ordered a continuation of the hearing on November 24, 2014.

Item 3.

LEGAL PROCEEDINGS – continued

Pursuant to the Court’s Findings of Fact, Conclusions of Law and Order for Judgment filed on January 26, 2015 (“Court Order”), the Trustees’ Petition for Instructions was approved by the Court and, consistent with the Trust Agreement, the Trustees are to immediately proceed with winding up the affairs of the Trust upon its termination on April 6, 2015, and to undertake the tasks and actions outlined in the Trustees’ Wind-Up Plan. The Court further ordered that the Trustees will retain possession and control of the Trust’s cash and non-cash assets (and books and records related thereto), that they are authorized to enter into temporary employment agreements with the current Trust employees to assist the Trustees during the wind-down process, that the Trustees’ compensation shall continue during the wind-down period until discharged by the Court, and that the Trust’s termination and wind-up expenses and costs (including attorneys’ fees) incurred after December 2013 shall be allocated between the certificate holders and the reversioner depending on the nature of the expense and as set forth in the Court Order. Expenses incurred after December 2013 and before the Trust’s termination date that are allocated to the reversioner will be charged to the Principal Charges account as of April 6, 2015. Finally, the Court required an interim status report on November 15, 2015, an annual audit for the year 2015 and, as soon as practicable after the Court’s approval of the 2015 annual report, the Trustees shall have final audited financial statements prepared for filing with the Court for the approval of the Trustees’ final accounting and discharge. Final distributions and conveyances to the Trust’s beneficiaries shall be made upon the order of the Court. The Court Order is subject to any timely-filed appeal.

Copies of the Trust’s mailings and the Court Order regarding the hearings may be viewed on the Trust’s Web site at www.gniop.com, or may be requested by contacting the St. Paul office of the Trustees.

Item 4.

MINE SAFETY DISCLOSURES

Not applicable.

PART II

Item 5.

MARKET FOR REGISTRANT’S SHARES OF BENEFICIAL INTEREST, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Shares of Beneficial Interest, Market Prices and Distributions on pages 6 and 7 of the Annual Report to Certificate Holders for the year ended December 31, 2014, attached hereto as Exhibit 13, are incorporated herein by reference. There are no issuer purchases of equity securities. No performance graph is required, as the Registrant is a nonvoting trust and the Trustees are not elected by the certificate holders; therefore, the performance graph has been omitted.

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, 2014, 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 through 10, inclusive, of the Annual Report to Certificate Holders for the year ended December 31, 2014, 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, 2014, attached hereto as Exhibit 13, and are incorporated herein by reference:

Balance Sheets – December 31, 2014 and 2013

Statements of Beneficiaries’ Equity – Years ended December 31, 2014, 2013 and 2012

Statements of Income – Years ended December 31, 2014, 2013 and 2012

Statements of Comprehensive Income – Years ended December 31, 2014, 2013 and 2012

Statements of Cash Flows – Years ended December 31, 2014, 2013 and 2012

Notes to Financial Statements – December 31, 2014

Quarterly Results of Operations (Unaudited), as shown in “Note 10” of the Notes to the Financial Statements contained in the Annual Report to Certificate Holders for the year ended December 31, 2014, 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 11 of the Annual Report to Certificate Holders as of December 31, 2014, attached hereto as Exhibit 13, is incorporated herein by reference.

The Report of Ernst & Young LLP, Independent Registered Public Accounting Firm, on Internal Control over Financial Reporting on pages 28 and 29 of the Annual Report to Certificate Holders as of December 31, 2014, 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, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The Registrant, being a trust, has no directors as such. The management of the Trust is vested in the following Trustees (who are not employees of the Trust) and officers, as of December 31, 2014, whose terms of office are not fixed for a specified time:

Name and Position		Age	Years of Service in Position

Joseph S. Micallef	Trustee	81	38
	President of the Trustees and Chief Executive Officer		16
Roger W. Staehle ⁽¹⁾	Independent Trustee	81	33
Robert A. Stein ⁽²⁾	Independent Trustee	76	33
James E. Swearingen ⁽³⁾	Independent Trustee	71	5
Thomas A. Janochoski	Vice President & Secretary and Chief Financial Officer	56	23

The Board of Trustees meets quarterly throughout the year. There are no family relationships between any of the Trustees, officers or employees. The principal occupations and directorships of the Great Northern Iron Ore Properties Trustees and officers during the last five years are as follows:

	⁽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⁾	James E. Swearingen 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, EXECUTIVE OFFICERS AND CORPORATE
GOVERNANCE – continued

JOSEPH S. MICALLEF, President of the Trustees and Chief Executive Officer.

- Director, William Mitchell College of Law, Saint Paul, Minnesota.

Mr. Micallef has been a Trustee since 1976 and the President of the Trustees since 1999. Pursuant to the Trust Agreement, the President of the Trustees (aka Chairman of the Board) is also defined as the “active manager and executive officer in carrying on the business devolving on the trustees” (aka Chief Executive Officer). Mr. Micallef is a 1962 graduate of William Mitchell College of Law. His principal occupation for over 25 years was that of President and Chief Executive Officer of Fiduciary Counselling, Inc., whose principal business is to provide accounting, tax and investment services to individuals, trusts, partnerships, holding companies and foundations. He also serves on the William Mitchell College of Law Board of Directors as of 2009. Mr. Micallef is recognized for his considerable experience with trusts, estate planning and charitable foundations, and service on a number of foundation boards. His executive business experience and trust background are very relevant to our industry, thereby providing the Trust a valuable combined resource and leadership skill set.

ROGER W. STAEHLE, Trustee.

- Adjunct Professor, Institute of Technology, University of Minnesota, until 2012;

- Industrial Consultant in the field of Metallurgy.

Dr. Staehle has been a Trustee since 1982. He was the Dean of the Institute of Technology at the University of Minnesota from 1979 to 1983 as well as Professor of Chemical Engineering and Materials Science from 1979 to 1987. He was an Adjunct Professor in that department until 2012. Prior to the University of Minnesota, he was Professor of Metallurgical Engineering at Ohio State University from 1965 to 1979. His specialty is in the degradation and prediction of materials especially in nuclear energy applications. He was elected to the National Academy of Engineering in 1978 and is a Fellow of three technical societies. In addition, he was the International Nickel Professor of Corrosion Science and Engineering at Ohio State University. He is also an editor of over 20 books in his field. At Ohio State University an academic chair has been created in his honor. Dr. Staehle is recognized as a worldwide consultant to governments and industries on the safe and reliable performance of nuclear reactors. He is expert in metallurgy and minerals. His metallurgical and mineral background provides the Trust with a practical and operational viewpoint.

Item 10.

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE
GOVERNANCE – continued

ROBERT A. STEIN, Trustee.

- Everett Fraser Professor of Law, University of Minnesota;

- Attorney of Counsel, Gray Plant Mooty Law Firm, Minneapolis, Minnesota.

Mr. Stein has been a Trustee since 1982. He was the Dean of the Law School of the University of Minnesota from 1979 to 1994, though he has been affiliated with the Law School since 1964. Beginning in 1994 and until October 2006, he also served as Executive Director and Chief Operating Officer of the American Bar Association. He now holds the Everett Fraser Professor of Law position with the Law School at the University of Minnesota. His legal career has concentrated on estates, trusts, property law, estate planning and fiduciary obligations. Mr. Stein is recognized as an authority on trusts and trust law and has authored numerous publications on these topics. He also serves as the Trust’s Audit Committee Chairman. His trust law expertise provides the Trust with valuable and pertinent knowledge, and will be increasingly important as the Trust winds down upon dissolution.

JAMES E. SWEARINGEN, Trustee.

- Director, PolyMet Mining Corporation until July 2010.

Mr. Swearingen has been a Trustee since 2009. Mr. Swearingen formerly managed the largest mining operation in North America, which is U.S. Steel’s Minntac taconite facility in northeastern Minnesota on the Mesabi Iron Range, serving as General Manager of its Minnesota Ore Operations. He has also previously served as the co-chair on the Governor’s Committee on Minnesota’s Mining Future, as a director of the Iron Mining Association of Minnesota, as a director of the American Iron Ore Association, as a director of PolyMet Mining Corporation, and as a consultant in the mining industry. He is currently an advisor to the University of Minnesota’s Natural Resource Research Institute. Mr. Swearingen is recognized for his considerable experience in the taconite mining industry. His mining management background provides the Trust with useful insight regarding mining operations, mining leases and overall mining and steel industry perspectives.

THOMAS A. JANOCHOSKI, Vice President & Secretary, Chief Financial Officer.

- Director and President, Iron Ore Lessors Association, Inc., Saint Paul, Minnesota.

Executive employees in addition to those listed above include Roger P. Johnson, Manager of Mines and Chief Engineer.

Item 10.

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE
GOVERNANCE – continued

Information Regarding Board of Trustees and Corporate Governance

As provided in the Trust Agreement, should a vacancy exist on the Board of Trustees, the remaining Trustees meet and jointly select another Trustee to fill the position. In the unlikely event there are no remaining Trustees, the Trust Agreement provides additional guidance to re-create a Board. Once appointed to the Board, the Trustees seek approval and confirmation from the Ramsey County District Court in Saint Paul, Minnesota. Accordingly, certificate holders of the Trust’s certificates of beneficial interest have no authority to elect Trustees or to nominate persons to serve on the Board. The Trust has no express diversity policy; however, the Trustees seek to maintain among the Board members experience in various disciplines relevant to the Trust’s business. The leadership structure of the Board of Trustees is established by the Trust Agreement, which combines the positions of the President of the Trustees and the Chief Executive Officer of the Trust. Mr. Micallef currently holds both of these positions. As Audit Committee Chairman, Mr. Stein currently serves as the Trust’s lead independent member and presides at all non-management executive sessions.

The Board of Trustees is responsible for oversight of the risks inherent in the Trust’s business. The Board regularly reviews information regarding the Trust’s liquidity and operations, as well as the risks associated with each. In addition, the Board receives regular reports from management on areas of material risk to the Trust, if any, including operational, financial, legal, regulatory, strategic and reputational risks. The Audit Committee oversees the Trust’s internal controls and financial accounts, and regularly assesses financial and accounting processes and risks.

In 2002, the Board of Trustees adopted a Code of Ethics that applies to all Trustees and employees. The Trustees intend to maintain the highest standards of ethical business practices and compliance with all laws and regulations applicable to the Trust’s business. The Code of Ethics is available within the Corporate Governance Disclosures section on the Trust’s Web site, which can be found at www.gniop.com.

Item 11.

EXECUTIVE COMPENSATION

Summary Compensation Table^(a)

Name and Principal Position	Year		Salary		Bonus		Pension Values^(b)		Total
Joseph S. Micallef		2014	$	200,000	$	100,000	$	—	$	300,000
President of the Trustees		2013		200,000		100,000		—		300,000
and Chief Executive Officer		2012		200,000		100,000		—		300,000

Thomas A. Janochoski		2014		175,033		10,000		604,349		789,382
Vice President & Secretary		2013		169,067		10,000		30,173		209,240
and Chief Financial Officer		2012		164,600		10,000		196,777		371,377

Notes: (a) There are no Stock Awards, Option Awards, Non-equity Incentive Plan Compensation or All Other Compensation and, accordingly, such columns in the table and any corresponding supplemental tables have been omitted. (b) Pension Values represent “Change in Pension Value and Nonqualified Deferred Compensation Earnings,” if applicable. The Pension Values increase in 2014 for the CFO was primarily caused by another year of credited service in the pension plan, the utilization of new mortality tables (as released in 2014 by the Society of Actuaries), and a reduced discount rate.

Compensation Discussion and Analysis

The Trust has only two executive officers, the President of the Trustees and Chief Executive Officer (“CEO”) and the Vice President & Secretary and Chief Financial Officer (“CFO”), as shown above in the Summary Compensation Table. No other Trust personnel receive compensation in excess of these named executives. The compensation for the Trust’s other directors (Trustees other than the CEO) is discussed and shown below under a separate table.

The compensation of the Trustees and CEO is established by the Trust Agreement (as modified by Court Orders). That is, the CEO does not participate in setting his own compensation. In addition, the Board of Trustees, as a whole, establishes and approves all compensation for all employees of the Trust (including that of the CFO) based on market data obtained from time to time, as deemed necessary.

Compensation Committee Report & Interlocks and Insider Participation

The Board of Trustees, as a whole, has reviewed and discussed this Compensation Discussion and Analysis (“CD&A”) with management and, based on such review and discussion, has recommended that the CD&A be included in the Registrant’s annual report. The Board of Trustees has not designated a separate compensation committee, and the Trustees take all actions with respect to risk oversight and compensation themselves due to their trustee fiduciary obligations pursuant to the Trust Agreement.

This report is respectfully submitted by Joseph S. Micallef, Roger W. Staehle, Robert A. Stein and James E. Swearingen, collectively, as the Board of Trustees of Great Northern Iron Ore Properties.

Item 11.

EXECUTIVE COMPENSATION – continued

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

The Trust Agreement (as modified by Court Orders, the last being effective January 1, 2012) provides for current annual compensation (salary) to the CEO of $200,000. The Trust Agreement (as modified by Court Orders, the last being effective January 1, 2012) also provides for current additional compensation (bonus) to the CEO equal to one percent (1%) of the excess of annual gross income of the Trust over $5,000,000, with a maximum bonus of $100,000.

The original 1906 Trust Agreement provided for compensation to the CEO of $25,000, plus additional compensation (bonus) equal to one percent (1%) of the excess of annual gross income of the Trust over $5,000,000, with a maximum bonus of $25,000. Between 1906 and 1982, the compensation of the CEO had never been adjusted. Because of the time-consuming legal proceedings that occurred in the 1970s and 1980s, and the fact that there had not been an increase in compensation since the inception of the Trust, the Trustees petitioned the Court for an increase in compensation to reflect, in part, their increased time commitments and inflation over the years.

By Court Order effective January 1, 1983, the CEO’s compensation was adjusted to $40,000, and the maximum bonus was adjusted to $35,000. Thereafter, because of increased duties under today’s regulatory environment and further inflation, the Trustees have, from time to time, petitioned the Court for additional compensation increases, essentially based on the increases in the Consumer Price Index since 1983. This petition process includes notification to all certificate holders of record and the reversioner, followed by a formal Court hearing and opportunity by certificate holders and reversioner to comment. The Court, taking into consideration any and all testimony and other materials filed, has approved of increases to the CEO’s compensation a total of eight different times since 1906, the last being effective January 1, 2012.

Because the compensation of the CEO is set forth by the Trust Agreement (as modified by Court Orders), there are no stock awards, option awards, non-equity incentive plan compensation, change in pension value and nonqualified deferred compensation earnings or all other compensation. Accordingly, such columns in the table and the corresponding supplemental tables have been omitted.

Item 11.

EXECUTIVE COMPENSATION – continued

Vice President & Secretary/Chief Financial Officer (CFO) Compensation

The Board of Trustees, as a whole, determines the compensation of all employees of the Trust, including that of the CFO. The objective for determining the compensation of the CFO is to provide a competitive salary based on market data obtained from time to time, as deemed necessary, representative of other chief financial officers’ responsibilities and pay scales within other similar-sized companies. To determine reasonable and competitive salary ranges for all employees of the Trust, including the CFO, the Trustees retained independent market research firms to obtain market data reflective of each specific position. Studies were performed and obtained in 1990 and updated again in 2001. With respect to the CFO’s base salary, the market salary averages and ranges obtained in the 2001 study reflected compensation paid to various chief financial officers in 47 different, similar-sized organizations (representing the lower twenty-five percent quartile of all companies sampled).

Since 2001, the Trustees have extrapolated the historical salary percentage increase that occurred between 1990 and 2001 forward to current year dollars or, if greater, adjusted the salary ranges based on the change in the Consumer Price Index since 2001. The Trustees intend to target the CFO’s base salary to fall within the range of this 2001 study, as extrapolated to current year dollars. The CFO’s base salary for 2014 falls within that range.

In addition to the CFO’s base salary, the Summary Compensation Table includes $0, $0 and $1,900 under the column heading “Salary” for nonqualified deferred compensation plan contributions accrued by the Trust for the benefit of the CFO for the years 2014, 2013 and 2012, respectively (as discussed and shown below under a separate table).

The CFO’s bonus compensation was established in 2001 to reward the CFO for any productive year by the Trust that effectively results in gross revenues in excess of $5,000,000, the same threshold used for the bonus calculation of the CEO. The CFO’s bonus compensation is equal to ten percent (10%) of the CEO’s bonus compensation, resulting in a current maximum annual bonus of $10,000.

The increase in the actuarial present value of accumulated benefits under the column heading “Pension Values” for the CFO within the Trust’s defined benefit pension plan (as discussed and shown below under a separate table) amounted to $597,867, $27,637 and $193,938 for the years 2014, 2013 and 2012, respectively. The Pension Values increase in 2014 was primarily caused by another year of credited service in the pension plan, the utilization of new mortality tables (as released in 2014 by the Society of Actuaries), and a reduced discount rate. The CFO participates in the pension plan, along with all other employees, on a nondiscriminatory basis.

Item 11.

EXECUTIVE COMPENSATION – continued

In addition to the CFO’s compensation attributed to the increase in the actuarial present value of accumulated benefits as stated above, the column heading “Pension Values” also includes $6,482, $2,536 and $2,839 of above-market returns pertaining to nonqualified deferred compensation earnings accrued by the Trust for the benefit of the CFO for the years 2014, 2013 and 2012, respectively, under the nonqualified deferred compensation plan (as discussed and shown below under a separate table).

The CFO does not receive any stock awards, option awards or non-equity incentive plan compensation. Accordingly, such columns in the table and the corresponding supplemental tables have been omitted. In addition, the CFO did not receive any other compensation that would require disclosure under the column heading “All Other Compensation.”

Post-Employment Compensation

Pension Benefits Table

Name	Plan Name	Number of Years Credited Service		Present Value of Accumulated Benefit		Payments During Last Fiscal Year

Thomas A. Janochoski (CFO)	Defined Benefit Pension Plan		25	$	1,684,641	$	—

Only employees of the Trust (not Trustees) are eligible to participate in the Trust’s pension plan and, as such, post-employment compensation disclosure is not applicable for the CEO or the other Trustees. The CFO, as an employee of the Trust, does participate in the Trust’s defined benefit pension plan on a nondiscriminatory basis with the other employees of the Trust.

The Number of Years Credited Service reflects the years of credited service currently vested as of December 31, 2014. The normal retirement benefit is a straight life annuity as of the end of the Trust and is based on the highest sixty (60) consecutive months average salary (annualized), the years of credited service and three percent (3%) per year of credited service, as defined in the pension plan.

Item 11.

EXECUTIVE COMPENSATION – continued

The pension plan also provides for a $500/month supplemental bridge payment (a nondiscriminatory benefit) that begins as of the end of the Trust (due to an involuntary early retirement resulting from Trust termination) and continues until the earlier of the participant’s death or attainment of age 65. The early retirement age, as defined in the pension plan, is the earliest date that the participant could elect early retirement based on the participant’s years of credited service and the participant’s age, the sum of which must equal or exceed 62. The CFO is currently eligible to elect an early retirement benefit. The early retirement benefit is calculated similar to the normal retirement benefit, except the percentage used for years of credited service equals two and one-quarter percent (2 1/4%), and the benefit is reduced by 1/15 for each of the first five years preceding the normal retirement age of 65 and by 1/30 for each year before that until the early retirement age is reached, and the $500/month supplemental bridge payment is not applicable. However, if an employee is eligible for early retirement as of the end of the Trust, the employee’s benefit will be unreduced, similar to the calculation of the normal retirement benefit. Actuarial equivalent annuity options are also available to all participants in the pension plan in lieu of a straight life annuity.

Nonqualified Deferred Compensation Table

Name	Executive Contributions in the Last Fiscal Year		Registrant Contributions in the Last Fiscal Year		Aggregate Earnings in the Last Fiscal Year		Aggregate Withdrawals/ Distributions		Aggregate Balance at Last Fiscal Year-End

Thomas A. Janochoski (CFO)	$	—	$	—	$	10,500	$	—	$	118,800

The Trustees established a nonqualified deferred compensation plan for the CFO in 2001. The Registrant’s contributions to the deferred compensation plan for the CFO represent the difference between (i) what the CFO is limited to contributing to his account within a 401(k) Supplemental Retirement Plan (a plan provided on a nondiscriminatory basis to all employees, without company match or profit sharing) because of his “highly compensated employee” status as defined by IRS regulations, and (ii) the maximum amount other employees, subject to IRS thresholds, are permitted to contribute to their accounts.

Aggregate Earnings in the Last Fiscal Year represent interest earned on the Aggregate Balance at Last Fiscal Year-End within the deferred compensation plan. The interest percentage used to determine interest earned is the greater of five percent (5%) or the actual one-year current return achieved within the Trust’s defined benefit pension plan. The Aggregate Balance at Last Fiscal Year-End is distributable at the earliest of (i) the CFO’s termination of employment, (ii) the termination of the Trust (April 6, 2015), (iii) the CFO’s termination of employment due to disability, or (iv) the CFO’s death.

Item 11.

EXECUTIVE COMPENSATION – continued

Of the total $0 in Registrant Contributions in the Last Fiscal Year and total $10,500 in Aggregate Earnings in the Last Fiscal Year listed in the table above, $0 (deferred compensation) and $6,482 (above-market earnings), respectively, are included in the Summary Compensation Table under the respective column headings “Salary” and “Pension Values” for the year 2014. In addition, of the total $118,800 Aggregate Balance at Last Fiscal Year-End listed in the table above, $0 and $1,900 (deferred compensation) are included in the Summary Compensation Table under the column heading “Salary” for the years 2013 and 2012, respectively; and $2,536 and $2,839 (above-market earnings) are included in the Summary Compensation Table under the column heading “Pension Values” for the years 2013 and 2012, respectively.

Compensation of Directors/Trustees (Other Than the CEO)

Directors Compensation Table

Name	Current Fiscal Year Fees Earned or Paid in Cash

Roger W. Staehle, Trustee	$	80,000
Robert A. Stein, Trustee and Audit Committee Chair		85,000
James E. Swearingen, Trustee		80,000

The Trust Agreement (as modified by Court Orders, the last being effective January 1, 2012) provides for current annual compensation (fees) to each Trustee (other than the CEO) of $80,000. In addition and also pursuant to Court Order, the Trustee serving in the role of Audit Committee Chair receives an additional amount of $5,000 per year.

The original 1906 Trust Agreement provided for compensation of $10,000 to each of the other Trustees (other than the CEO). Between 1906 and 1982, the compensation of the Trustees (other than the CEO) had never been adjusted. Because of the time-consuming legal proceedings that occurred in the 1970s and 1980s, and the fact that there had not been an increase in compensation since the inception of the Trust, the Trustees petitioned the Court for an increase in compensation to reflect, in part, their increased time commitments and inflation over the years.

Item 11.

EXECUTIVE COMPENSATION – continued

By Court Order effective January 1, 1983, the Trustees’ (other than the CEO) compensation was adjusted to $20,000. Thereafter, because of increased duties under today’s regulatory environment and further inflation, the Trustees have, from time to time, petitioned the Court for additional compensation increases, essentially based on the increases in the Consumer Price Index since 1983. This petition process includes notification to all certificate holders of record and the reversioner, followed by a formal Court hearing and opportunity by certificate holders and reversioner to comment. The Court, taking into consideration any and all testimony and other materials filed, has approved of increases to the Trustees (other than the CEO) a total of seven different times since 1906, the last being effective January 1, 2012.

Because the compensation of the Trustees (other than the CEO) is set forth by the Trust Agreement (as modified by Court Orders), there are no stock awards, option awards, non-equity incentive plan compensation, change in pension value and nonqualified deferred compensation earnings or all other compensation. Accordingly, such columns in the table and the corresponding supplemental tables have been omitted.

Item 12.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

(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. The Trust is not aware of any entities holding more than 5% of the Certificates of Beneficial Interest outstanding, of record and/or beneficially, as of December 31, 2014.

(b)

There were no Certificates of Beneficial Interest of Great Northern Iron Ore Properties owned or pledged by the Trustees or officers of the Trust as of December 31, 2014.

Item 13.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

There are no certain relationships or related transactions requiring disclosure under this section. Director independence is set forth in “Item 10. Directors, Executive Officers and Corporate Governance” of this report.

Item 14.

PRINCIPAL ACCOUNTING FEES AND SERVICES

All audit and non-audit services (printing and reproduction services) were preapproved by the Audit Committee. Fees paid in 2014 for the annual audit services were $94,000, for audit-related services were $3,200, for tax services were $0 and for all other services were $0. Fees paid in 2013 for the annual audit services were $90,400, for audit-related services were $1,600, for tax services were $0 and for all other services were $3,000.

PART IV

Item 15.

EXHIBITS, FINANCIAL STATEMENT SCHEDULES

(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, 2014, attached hereto as Exhibit 13, and are incorporated by reference in Item 8:

		Balance Sheets – December 31, 2014 and 2013

		Statements of Beneficiaries’ Equity – Years ended December 31, 2014, 2013 and 2012

		Statements of Income – Years ended December 31, 2014, 2013 and 2012

		Statements of Comprehensive Income – Years ended December 31, 2014, 2013 and 2012

		Statements of Cash Flows – Years ended December 31, 2014, 2013 and 2012

		Notes to Financial Statements – December 31, 2014

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

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

Item 15.

EXHIBITS, FINANCIAL STATEMENT SCHEDULES – continued

(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 26, 2015
Joseph S. Micallef, Trustee and President of the Trustees, Chief Executive Officer		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.

Each person whose signature appears below constitutes Joseph S. Micallef and Thomas A. Janochoski as his true and lawful attorneys-in-fact and agents, each acting alone, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any or all amendments to this Annual Report on Form 10-K and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, each acting alone, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all said attorneys-in-fact and agents, or his substitute or substitutes, may lawfully do or cause to be done by virtue thereof.

Signature	Title	Date


/s/ Joseph S. Micallef	Chief Executive Officer, Trustee and President of the Trustees (principal executive officer)	February 26, 2015
Joseph S. Micallef

/s/ Roger W. Staehle	Trustee	February 26, 2015
Roger W. Staehle


/s/ Robert A. Stein	Trustee	February 26, 2015
Robert A. Stein


/s/ James E. Swearingen	Trustee	February 26, 2015
James E. Swearingen


/s/ Thomas A. Janochoski	Chief Financial Officer, Vice President & Secretary (principal financial and accounting officer)	February 26, 2015
Thomas A. Janochoski

ANNUAL REPORT ON FORM 10-K

EXHIBIT INDEX

YEAR ENDED DECEMBER 31, 2014

GREAT NORTHERN IRON ORE PROPERTIES

W-1290 First National Bank Building

332 Minnesota Street

Saint Paul, Minnesota 55101-1361

	Exhibit No.		Document
	3		Copy of Trust Agreement and Rules and Regulations for Management of the Trust (filed as Exhibit A to Great Northern Iron Ore Properties Form 11, filed on May 6, 1935, as published under date of March 30, 1935, and incorporated by reference)

	4		Specimen of Securities Registered Hereunder (filed as Exhibit E to Great Northern Iron Ore Properties Form 11, filed on May 6, 1935, as published under date of March 30, 1935, and incorporated by reference)

	10.1		Court Order on Trustees’ Compensation (and annual hearing of accounts), dated May 22, 2012, but effective January 1, 2012 (filed as Exhibit 10.1 to Great Northern Iron Ore Properties Form 8-K, filed on May 23, 2012, and incorporated by reference)

	10.2		U.S. Steel Corporation Minntac January 1, 1959 Lease and Operating Agreement and all subsequent amendments through September 12, 2003 (filed as Exhibit 10.2 to Great Northern Iron Ore Properties Form 10-Q, filed on July 24, 2008, and incorporated by reference, subject to a confidential treatment request as to certain portions of this exhibit that was filed separately with and granted by the Securities and Exchange Commission)

	10.3		Hibbing Taconite Company Mahoning January 1, 1979 Lease and Operating Agreement and all subsequent amendments through January 1, 2006 (filed as Exhibit 10.3 to Great Northern Iron Ore Properties Form 10-Q, filed on July 24, 2008, and incorporated by reference, subject to a confidential treatment request as to certain portions of this exhibit that was filed separately with and granted by the Securities and Exchange Commission)

EXHIBIT INDEX – continued

	Exhibit No.		Document
	13		Annual Report to Certificate Holders

	23		Consent of Independent Registered Public Accounting Firm

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

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

	32		Certifications of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (furnished but not filed)

	99		Report of Audit Committee

	99.1(a)		Press Release dated December 23, 2014, announcing Trustees’ Resolution adopted December 19, 2014, to terminate the Trust on April 6, 2015, pursuant to the terms of the Trust Agreement and, further, authorizing the delisting of the certificates of beneficial interest as of the same date (filed as Exhibit 99.1 to Great Northern Iron Ore Properties Form 8-K, filed on December 23, 2014, and incorporated by reference)

	99.1(b)		Court Order dated January 26, 2015, regarding the Trust’s termination date of April 6, 2015, and subsequent wind-down process (filed as Exhibit 99.1 to Great Northern Iron Ore Properties Form 8-K, filed on January 30, 2015, and incorporated by reference)

	101.INS		XBRL Instance Document (Interactive Data File)

	101.SCH		XBRL Taxonomy Extension Schema Document (Interactive Data File)

	101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document (Interactive Data File)

	101.DEF		XBRL Taxonomy Extension Definition Linkbase Document (Interactive Data File)

	101.LAB		XBRL Taxonomy Extension Label Linkbase Document (Interactive Data File)

	101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document (Interactive Data File)

Exhibit 13

GREAT NORTHERN IRON
ORE PROPERTIES

ONE HUNDRED EIGHTH
ANNUAL REPORT OF THE TRUSTEES
TO CERTIFICATE HOLDERS

FOR
YEAR ENDED DECEMBER 31, 2014

FOR INFORMATION ABOUT THE TERMINATION OF THE TRUST IN THE YEAR 2015,
PLEASE REFER TO PAGES 3, 4, 5, 9 & 10 OF THIS ANNUAL REPORT.

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

www.gniop.com


	TRUSTEES	OFFICERS

	JOSEPH S. MICALLEF	JOSEPH S. MICALLEF
	President of the Trustees	Chief Executive Officer

	ROGER W. STAEHLE*	THOMAS A. JANOCHOSKI
		Chief Financial Officer
	ROBERT A. STEIN*	Vice President & Secretary

	JAMES E. SWEARINGEN*	ROGER P. JOHNSON
		Chief Engineer
	*Audit Committee	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: (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
	2014			2013			2012			2011			2010
Shipments from our mines (pellet tons)		6,167,730			6,456,047			7,360,456			7,920,323			7,301,034
Royalties	$	17,599,465		$	18,842,746		$	24,020,334		$	26,614,880		$	20,633,285
Expenses	$	4,836,723		$	4,160,675		$	4,087,619		$	3,690,728		$	3,396,964
Net income	$	13,123,533		$	14,790,714		$	20,068,433		$	23,047,811		$	17,468,842
Total assets	$	11,604,642		$	15,061,232		$	19,118,714		$	20,914,912		$	17,383,092
Liability for pension benefits (Prepaid pension costs) (see Note 7 to the Financial Statements)	$	978,566		$	(587,159	)	$	1,511,694		$	1,642,113		$	1,349,314
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	$	8.75		$	9.86		$	13.38		$	15.37		$	11.65
Distributions declared per share	$	9.35	⁽¹⁾	$	10.00	⁽²⁾	$	14.00	⁽³⁾	$	15.00	⁽⁴⁾	$	12.25	⁽⁵⁾


(1)	$2.25 paid 4/30/2014; $2.50 paid 7/31/2014; $2.60 paid 10/31/2014; $2.00 paid 1/30/2015
(2)	$2.25 paid 4/30/2013; $2.50 paid 7/31/2013; $2.60 paid 10/31/2013; $2.65 paid 1/31/2014
(3)	$2.25 paid 4/30/2012; $3.00 paid 7/31/2012; $3.50 paid 10/31/2012; $5.25 paid 1/31/2013
(4)	$2.25 paid 4/29/2011; $3.00 paid 7/29/2011; $4.00 paid 10/31/2011; $5.75 paid 1/31/2012
(5)	$2.00 paid 4/30/2010; $2.75 paid 7/30/2010; $3.75 paid 10/29/2010; $3.75 paid 1/31/2011

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 northeastern Minnesota. Many of these properties are leased to steel and mining companies that mine the mineral lands for taconite iron ore. The Trust has no subsidiaries. With the properties and offices all located in Minnesota, the Trust and matters affecting the Trust are under the jurisdiction of the Ramsey County District Court (“Court”) in Saint Paul, Minnesota.

The Trust maintains a Web site, which can be found at www.gniop.com. Information about the Trust posted on the Web site includes: General Trust information (including information about the termination of the Trust), Securities and Exchange Commission filings (Forms 10-K, Forms 10-Q, Forms 8-K), Annual Reports, Tax Return Guides, Quarterly Distribution Releases, Quarterly Earnings Releases, Court Hearings, Audit Committee Charter, Code of Ethics, Contact and other information. We will, upon request, be pleased to furnish to any certificate holder or investor, free of charge, a paper copy of any of the above documents for any recent year.

During 2014, the major source of income to the Trust was royalty income derived from taconite production and minimum royalties. Certain leases provide the steel and mining companies the ability to offset royalties, over the minimum royalty requirements, due on future taconite production, if any and when mined, against unabsorbed minimum royalties paid in prior periods. A “Summary of Shipments” is tabulated on the last page of this report.

Upon the termination date of the Trust on April 6, 2015, the certificates of beneficial interest (shares) in the Trust will cease to trade on the NewYork Stock Exchange and thereafter will represent only the right to receive certain distributions payable to the certificate holders of record at the time of the termination of the Trust. Upon Trust termination and after the wind-down process is completed, the Trust is obligated to distribute ratably to these certificate holders the net monies remaining in the hands of the Trustees (after paying and providing for all expenses and obligations incurred through the Trust’s termination and wind-down process), plus the balance in the Principal Charges account (see Note 6 to the Financial Statements), all of which are subject to the final accounting and approval of the Court. All other Trust property (most notably the Trust’s mineral properties and the active leases) must be conveyed and transferred to the reversioner (which, effective January 1, 2015, is Glacier Park Iron Ore Properties LLC, a wholly owned subsidiary of Glacier Park Company, which is a wholly owned subsidiary of ConocoPhillips Company), without further payment or remuneration to the certificate holders, under the terms of the Trust Agreement. The wind-down process of the Trust is anticipated to extend into the calendar year following its

termination date in order to complete the various year-end audits, court and regulatory filings, tax returns, conveyances of non-cash properties to the reversioner, etc., relative thereto. Subject to the guidance and approval of the Court and assuming the wind-down process with the reversioner proceeds efficiently and that no other complications arise during this time period, we anticipate the wind-down process, final distribution and dissolution of the Trust will be completed by the end of 2016.

The exact final distribution, though not determinable at this time, will generally consist of the sum of the Trust’s net monies (essentially, total assets less liabilities and less properties) and the balance in the Principal Charges account, less any and all expenses and obligations incurred through the Trust’s termination and wind-down process. To offer a hypothetical example, without factoring in any expenses and obligations incurred through the Trust’s termination and wind-down process, and using the financial statement values as of December 31, 2014, the net monies were approximately $6,859,000 and the Principal Charges account balance was approximately $4,710,000, resulting in a final distribution payable of approximately $11,569,000, or about $7.71 per share. Upon the termination of the Trust, the certificates of beneficial interest (shares) would be cancelled and thereafter represent only the right to receive the final distribution. It is important to note, however, that the actual net monies on hand and the Principal Charges account balance will most likely fluctuate and will not be “final” until after the termination and wind-down process of the Trust is completed. The Trust offers this example to further inform investors about the conceptual nature of the final distribution and does not imply or guarantee a specific known final distribution amount.

to the Principal Charges account as of April 6, 2015. Finally, the Court required an interim status report on November 15, 2015, an annual audit for the year 2015 and, as soon as practicable after the Court’s approval of the 2015 annual report, the Trustees shall have final audited financial statements prepared for filing with the Court for the approval of the Trustees’ final accounting and discharge. Final distributions and conveyances to the Trust’s beneficiaries shall be made upon the order of the Court. The Court Order is subject to any timely-filed appeal.

The Trust is primarily 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 the 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 mined (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 the lessee to remit to the Trust current year rental or minimum royalty income 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 Tax Reform Act of 1986, as amended, 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 taxable income whether or not the income is distributed.


	•	Substitute Form 1099-MISC — This form reported the registered certificate holder’s 2014 allocable share of taxable income from the Trust, distributions declared and any taxes withheld. (Foreign registered certificate holders received a Form 1042-S.)

	•	Trust Supplemental Statement — This statement reported the number of units (shares) held by the registered certificate holder on any of the four quarterly record dates in 2014.

	•	Tax Return Guide — This guide instructed the certificate holders as to the preparation of their income tax returns with respect to taxable income allocated from the Trust and various deductions allowable.

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 744 registered certificate holder of record accounts on December 31, 2014. The high and low sales prices for the quarterly periods commencing January 1, 2013, through December 31, 2014, inclusive, were as follows:


	2014				2013
Quarter	High		Low		High		Low
First	$	69.72	$	18.76	$	82.00	$	66.20
Second		24.98		16.80		74.01		61.50
Third		29.29		18.06		76.74		67.00
Fourth		24.98		13.77		75.49		67.41

Results of Operations: Royalties for 2014 were less than those of 2013 by approximately $1.2 million primarily due to a lower overall average earned royalty rate caused by a higher ratio of mining from our partial fee interest lands versus our full fee interest lands, which accounted for approximately $1.7 million of this total change, decreased taconite mining on our lands, which accounted for approximately $0.7 million of this total change, offset in part by greater net minimum royalties received, which accounted for approximately $0.6 million of this total change and increased tailings revenues, which also accounted for approximately $0.6 million of this total change. Expenses for 2014 were greater than those of 2013 by approximately $0.7 million primarily due to greater legal expenditures associated with termination matters of the Trust, which accounted for approximately $0.8 million of this total change, and increased staff compensation, which accounted for approximately $0.1 million of this total change, offset in part by reduced pension expense pertaining to the defined benefit pension plan, which accounted for approximately $0.3 million of this total change. Regarding pension expense, in addition to the higher discount rate effective for 2014, the Trust was not required to amortize unrecognized net loss into pension expense in 2014 pursuant to the pension accounting rules since the remaining unrecognized net loss at the beginning of the year was less than ten percent of the greater of the projected benefit obligation or the fair market value of plan assets (known as the corridor for delayed recognition). Net income for 2014 was less than that of 2013 by approximately $1.7 million primarily due to fluctuations in Royalties and Expenses as explained above. The Prepaid pension costs as of December 31, 2013, was eliminated and replaced with Liability for pension benefits as of December 31, 2014, which was a total change from that as of December 31, 2013, of approximately $1.6 million primarily due to the utilization of the new mortality tables released in 2014 by the Society of Actuaries, and a reduced discount rate applicable to the benefit obligation, offset in part by the pension contribution made to the plan. Please refer to Note 7 to the Financial Statements for additional pension plan information.

Royalties for 2013 were less than those of 2012 by approximately $5.2 million primarily due to decreased taconite mining on our lands, which accounted for approximately $2.7 million of this total change, and a lower overall average earned royalty rate caused by lower producer price indices that impact our royalty rates, which also accounted for approximately $2.7 million of this total change, offset in part by increased tailings revenues, which accounted for approximately $0.2 million of this total change. Expenses for 2013 were greater than those of 2012 by approximately $0.1 million primarily due to higher pension

expense pertaining to the defined benefit pension plan primarily due to a reduced discount rate effective for 2013. Please refer to Note 7 to the Financial Statements for additional pension plan information. Net income for 2013 was less than that of 2012 by approximately $5.3 million primarily due to fluctuations in Royalties as explained above.

Distributions are mainly a function of Net income and will fluctuate based on income earned, which is primarily dependent on fluctuations in Royalties received from taconite mining on our lands under the control of the mining companies (lessees).

The Trustees declared four quarterly distributions in 2014 totaling $9.35 per share. The first, in the amount of $2.25 per share, was paid on April 30, 2014, to certificate holders of record on March 31, 2014; the second, in the amount of $2.50 per share, was paid on July 31, 2014, to certificate holders of record on June 30, 2014; the third, in the amount of $2.60 per share, was paid on October 31, 2014, to certificate holders of record on September 30, 2014; and the fourth, in the amount of $2.00 per share, was paid on January 30, 2015, to certificate holders of record on December 31, 2014.

The Trustees declared four quarterly distributions in 2013 totaling $10.00 per share. The first, in the amount of $2.25 per share, was paid on April 30, 2013, to certificate holders of record on March 28, 2013; the second, in the amount of $2.50 per share, was paid on July 31, 2013, to certificate holders of record on June 28, 2013; the third, in the amount of $2.60 per share, was paid on October 31, 2013, to certificate holders of record on September 30, 2013; and the fourth, in the amount of $2.65 per share, was paid on January 31, 2014, to certificate holders of record on December 31, 2013.

The next quarterly distribution will be paid April 30, 2015, to certificate holders of record on March 31, 2015, which will represent the final quarterly distribution to certificate holders for the last full quarter of business prior to the termination date of the Trust.

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 following is a table of the Trust’s contractual obligations as of December 31, 2014, which are all expected to be settled within the next year:


	Payments Due by Period
	Total		Less than 1 year		1 – 3 years		3 – 5 years		More than 5 years
Deferred compensation	$	270,300	$	270,300	$	—	$	—	$	—
Future pension contributions (see Note 7 to the Financial Statements)		978,566		978,566		—		—		—
St. Paul office leases (see Note 9 to the Financial Statements)		31,597		31,597		—		—		—

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, which include truck counts, volumetric surveys and blast pattern estimates. 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 remit to the Trust current year rental or minimum royalty income for holding the leasehold interest, regardless of production. These minimum royalties can accumulate and do allow the steel and mining companies the ability to offset royalties, over the minimum royalty requirements, due on future taconite production. Minimum royalties, if not recovered before the termination of the lease, are forfeitable and are not refundable under any circumstance.

Pension plan valuations are based on a number of assumptions used to determine the benefit obligation and net periodic pension cost. 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 on plan assets. As of the end of 2014, the Trustees also incorporated the new mortality tables recently released by the Society of Actuaries. 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 7 to 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 after 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 that will be payable to the certificate holders of record from the reversioner after the end of the Trust. The account balance, as stated in Note 6 to the Financial Statements, primarily represents the costs of acquiring homes and surface lands in accordance with provisions of a lease with U.S. Steel Corporation, as well as Court-ordered attorneys’ fees and expenses. 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 (“Minntac”) and Keetac (“Keetac”), both owned and operated by U.S. Steel Corporation; Hibbing Taconite Company (“Hibtac”), owned by ArcelorMittal, Cliffs Natural Resources Inc. and U.S. Steel

Corporation, and operated by Cliffs Mining Company; and Essar Steel Minnesota, LLC (“ESM”), owned by Essar Steel Holdings Ltd., a subsidiary of Essar Global Ltd., which includes a new taconite mining plant currently being constructed by ESM. Because the Trust’s revenues are primarily dependent upon a limited number of customers, 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, minimum royalties, ore body quality, metallurgical and geological characteristics, and location of Trust lands. Also sometimes affecting taconite production from Trust lands are extreme weather conditions and labor contracts at the mines. Though the Trust is not a party to the labor contracts, all pertinent labor contracts affecting production from Trust lands run through August 31, 2015. Additionally, over the past few years, the domestic steel and taconite industries have also been influenced by the global markets. As a result, future demand for domestic steel and taconite, which is now part of the global markets, is uncertain. While any cut in production by any of our lessees can adversely affect the Trust, continued receipt of minimum royalties do mitigate this effect, in part.

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 (the “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 8 to 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 that the Trust has remained in compliance with the provisions of Section 646 since its election in 1988.

As previously reported, the termination date of the Trust is April 6, 2015. Accordingly, we remind certificate holders that there is remaining only one more regular quarterly distribution, which will be declared in the first quarter of 2015. While there will be some income allocated to the second quarter of 2015 (representing six days of business through April 6, 2015), it is expected that this amount will be nominal and will likely be included with the final distribution to certificate holders of record as of the termination date of the Trust, which will be made subsequent to the Trust’s termination date and upon completion of the wind-down process and final accounting. The final distribution will generally consist of the sum of the Trust’s net monies (essentially, total assets less liabilities and less properties) remaining in the hands of the Trustees (after paying and providing for all expenses and obligations incurred through the Trust’s termination and wind-down process), and the balance in the Principal Charges account, all of which are subject to the final accounting and approval of the Ramsey County District Court. Upon Trust termination, the

shares will be cancelled and thereafter represent only the right to receive the final distribution. All other Trust properties will be conveyed to the reversioner upon the completion of the wind-down process without further payment or remuneration to the certificate holders.


Respectfully submitted,

Joseph S. Micallef,	Roger W. Staehle, Trustee
President of the Trustees	Robert A. Stein, Trustee
and Chief Executive Officer	James E. Swearingen, Trustee

Thomas A. Janochoski,
Vice President & Secretary	Saint Paul, Minnesota
and Chief Financial Officer	February 26, 2015

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, 2014. In making this assessment, it used the criteria set forth in a report by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) titled Internal Control – Integrated Framework (1992 framework). Based on our assessment, we believe that, as of December 31, 2014, 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 the Trust’s internal control over financial reporting. This report appears on pages 28 and 29.


	Respectfully submitted,

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

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

GREAT NORTHERN IRON ORE PROPERTIES

BALANCE SHEETS

ASSETS


	December 31
	2014			2013
CURRENT ASSETS
Cash and cash equivalents	$	899,283		$	712,197
United States Treasury securities (Note 4)		7,535,178			5,468,675
Royalties receivable		2,959,038			4,448,907
Prepaid expenses		2,110			2,110
TOTAL CURRENT ASSETS		11,395,609			10,631,889
NONCURRENT ASSETS
United States Treasury securities (Note 4)		—			2,883,251
Prepaid pension costs (Note 7)		—			587,159
		—			3,470,410
PROPERTIES
Mineral and surface lands (Notes 4 and 5)		39,479,708			39,479,708
Accumulated depletion and amortization		(39,288,577	)		(38,592,577	)
		191,131			887,131

Building and equipment		335,767			335,767
Accumulated depreciation		(317,865	)		(263,965	)
		17,902			71,802
TOTAL PROPERTIES		209,033			958,933
TOTAL ASSETS	$	11,604,642		$	15,061,232

LIABILITIES AND BENEFICIARIES’ EQUITY
CURRENT LIABILITIES
Accounts payable and accrued expenses	$	287,934		$	92,356
Deferred compensation		270,300			—
Distributions		3,000,000			3,975,000
TOTAL CURRENT LIABILITIES		3,558,234			4,067,356
NONCURRENT LIABILITIES
Deferred compensation		—			244,300
Liability for pension benefits (Note 7)		978,566			—
TOTAL NONCURRENT LIABILITIES		978,566			244,300
TOTAL LIABILITIES		4,536,800			4,311,656
BENEFICIARIES’ EQUITY
Certificate holders’ equity, represented by 1,500,000 certificates (shares or units) of beneficial interest authorized and outstanding, and the reversionary interest (Notes 2 and 6)		10,710,020			11,611,487
Accumulated other comprehensive loss (Notes 7 and 11)		(3,642,178	)		(861,911	)
TOTAL BENEFICIARIES’ EQUITY		7,067,842			10,749,576
TOTAL LIABILITIES AND BENEFICIARIES’ EQUITY	$	11,604,642		$	15,061,232

See accompanying notes.

GREAT NORTHERN IRON ORE PROPERTIES

STATEMENTS OF BENEFICIARIES’ EQUITY


	Certificate Holders’ Equity			Accumulated Other Comprehensive (Loss) Income			Total Beneficiaries’ Equity
BALANCE AT JANUARY 1, 2012	$	12,752,340		$	(2,442,997	)	$	10,309,343

For year 2012:
Net income		20,068,433			—			20,068,433
Other comprehensive income		—			20,888			20,888
Distributions declared ($14.00 per share)		(21,000,000	)		—			(21,000,000	)

BALANCE AT DECEMBER 31, 2012		11,820,773			(2,422,109	)		9,398,664

For year 2013:
Net income		14,790,714			—			14,790,714
Other comprehensive income		—			1,560,198			1,560,198
Distributions declared ($10.00 per share)		(15,000,000	)		—			(15,000,000	)

BALANCE AT DECEMBER 31, 2013		11,611,487			(861,911	)		10,749,576

For year 2014:
Net income		13,123,533			—			13,123,533
Other comprehensive loss		—			(2,780,267	)		(2,780,267	)
Distributions declared ($9.35 per share)		(14,025,000	)		—			(14,025,000	)

BALANCE AT DECEMBER 31, 2014	$	10,710,020		$	(3,642,178	)	$	7,067,842

See accompanying notes.

GREAT NORTHERN IRON ORE PROPERTIES

STATEMENTS OF INCOME


	Year Ended December 31
	2014		2013		2012
REVENUES
Royalties	$	17,599,465	$	18,842,746	$	24,020,334
Interest earned		12,730		20,952		36,750
Rent and other income		348,061		87,691		98,968
TOTAL REVENUES		17,960,256		18,951,389		24,156,052

EXPENSES
Royalty costs		4,623		4,623		4,623
Real estate and payroll taxes		158,569		147,406		167,249
Inspection and care of properties		678,657		648,738		629,108
Administrative and general		3,244,974		2,615,837		2,554,260
Depreciation and amortization		749,900		744,071		732,379
TOTAL EXPENSES		4,836,723		4,160,675		4,087,619
NET INCOME	$	13,123,533	$	14,790,714	$	20,068,433

WEIGHTED-AVERAGE SHARES OUTSTANDING		1,500,000		1,500,000		1,500,000

BASIC & DILUTED EARNINGS PER SHARE	$	8.75	$	9.86	$	13.38

See accompanying notes.

GREAT NORTHERN IRON ORE PROPERTIES

STATEMENTS OF COMPREHENSIVE INCOME


	Year Ended December 31
	2014			2013		2012
NET INCOME	$	13,123,533		$	14,790,714	$	20,068,433
OTHER COMPREHENSIVE (LOSS) INCOME:
Defined benefit pension plan (Notes 7 and 11):
Net (loss) gain arising during period		(2,797,734	)		879,193		(488,972	)
Amortization of prior service cost included in net periodic pension cost		17,467			17,469		17,469
Amortization of net loss included in net periodic pension cost		—			663,536		492,391
TOTAL OTHER COMPREHENSIVE (LOSS) INCOME		(2,780,267	)		1,560,198		20,888
TOTAL COMPREHENSIVE INCOME	$	10,343,266		$	16,350,912	$	20,089,321

See accompanying notes.

GREAT NORTHERN IRON ORE PROPERTIES

STATEMENTS OF CASH FLOWS


	Year Ended December 31
	2014			2013			2012
OPERATING ACTIVITIES
Cash received from royalties and rents	$	19,437,395		$	18,551,641		$	27,961,480
Cash paid to suppliers and employees		(5,079,787	)		(3,951,959	)		(3,469,871	)
Interest received		29,478			67,290			55,865
NET CASH PROVIDED BY OPERATING ACTIVITIES		14,387,086			14,666,972			24,547,474

INVESTING ACTIVITIES
United States Treasury securities purchased		(6,250,000	)		(5,275,000	)		(10,550,000	)
United States Treasury securities matured		7,050,000			9,600,000			7,675,000
Expenditures for building and equipment		—			(23,206	)		(29,990	)
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES		800,000			4,301,794			(2,904,990	)

FINANCING ACTIVITIES
Distributions paid		(15,000,000	)		(18,900,000	)		(21,750,000	)
NET CASH USED IN FINANCING ACTIVITIES		(15,000,000	)		(18,900,000	)		(21,750,000	)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		187,086			68,766			(107,516	)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR		712,197			643,431			750,947
CASH AND CASH EQUIVALENTS AT END OF YEAR	$	899,283		$	712,197		$	643,431

RECONCILIATION OF NET INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES
Net income	$	13,123,533		$	14,790,714		$	20,068,433
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		749,900			744,071			732,379
Net periodic pension cost (Note 7)		464,549			776,646			690,387
Pension contribution (Note 7)		(1,679,091	)		(1,315,301	)		(799,918	)
Net decrease (increase) in assets:
Accrued interest		16,748			46,338			19,115
Royalties receivable		1,489,869			(378,796	)		3,842,178
Net increase (decrease) in liabilities:
Accounts payable and accrued expenses		195,578			(11,900	)		(24,600	)
Deferred compensation		26,000			15,200			19,500
NET CASH PROVIDED BY OPERATING ACTIVITIES	$	14,387,086		$	14,666,972		$	24,547,474

See accompanying notes.

GREAT NORTHERN IRON ORE PROPERTIES

NOTES TO FINANCIAL STATEMENTS
December 31, 2014

NOTE 1 – BUSINESS AND NATURE OF OPERATIONS

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 in northeastern Minnesota. The Trust is a conventional nonvoting 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 and matters affecting the Trust are under the jurisdiction of the Ramsey County District Court (“Court”) in Saint Paul, Minnesota. Royalties are derived from taconite production and minimums. Royalties (which are not in direct ratio to tonnage shipped) from two significant operating lessees were approximately as follows: 2014 — $9,633,000 and $5,358,000; 2013 — $10,198,000 and $6,638,000; and 2012 — $11,469,000 and $10,625,000.

NOTE 2 – TRUST TERMINATION

Upon the termination date of the Trust on April 6, 2015, the certificates of beneficial interest (shares) in the Trust will cease to trade on the New York Stock Exchange and thereafter will represent only the right to receive certain distributions payable to the certificate holders of record at the time of the termination of the Trust. Upon Trust termination and after the wind-down process is completed, the Trust is obligated to distribute ratably to these certificate holders the net monies remaining in the hands of the Trustees (after paying and providing for all expenses and obligations incurred through the Trust’s termination and wind-down process), plus the balance in the Principal Charges account (see Note 6), all of which are subject to the final accounting and approval of the Court. All other Trust property (most notably the Trust’s mineral properties and the active leases) must be conveyed and transferred to the reversioner (which, effective January 1, 2015, is Glacier Park Iron Ore Properties LLC, a wholly owned subsidiary of Glacier Park Company, which is a wholly owned subsidiary of ConocoPhillips Company), without further payment or remuneration to the certificate holders, under the terms of the Trust Agreement. The wind-down process of the Trust is anticipated to extend into the calendar year following its termination date in order to complete the various year-end audits, court and regulatory filings, tax returns, conveyances of non-cash properties to the reversioner, etc., relative thereto. Subject to the guidance and approval of the Court and assuming the wind-down process with the reversioner proceeds efficiently and that no other complications arise during this time period, we anticipate the wind-down process, final distribution and dissolution of the Trust will be completed by the end of 2016.

NOTE 2 – TRUST TERMINATION (CONTINUED)

The Trustees petitioned the Court for a hearing, which hearing occurred on October 7, 2014 and was continued on November 24, 2014, to address the matter of the Trust’s termination, including the scope of the Trustees’ duties, powers and authority during the wind-down period, their plan for termination and for guidance relative to the allocation of expenses. Please refer to Note 3 for additional information relative to the Court proceedings and matters concerning the termination of the Trust.

NOTE 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 the 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 Ramsey County District Court, Saint Paul, Minnesota, for further instructions defining what is required in a particular case to balance the interests of certificate holders and reversioner. Also, the Minnesota Supreme 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.

NOTE 3 – LEGAL PROCEEDINGS (CONTINUED)

NOTE 4 – SIGNIFICANT ACCOUNTING POLICIES

Cash and Cash Equivalents: The Trust considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents.

NOTE 4 – 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. The aggregate fair values listed in the table below are based on quoted prices in active markets for identical assets (Level 1). Following is a summary of the securities as of December 31:


	Current						Noncurrent
	2014			2013			2014		2013
Aggregate fair value	$	7,528,592		$	5,457,842		$	—	$	2,880,219
Gross unrealized holding gains		(747	)		(1,279	)		—		(442	)
Gross unrealized holding losses		161			26			—		294
Amortized cost basis		7,528,006			5,456,589			—		2,880,071
Accrued interest		7,172			12,086			—		3,180
Amounts shown on balance sheets	$	7,535,178		$	5,468,675		$	—	$	2,883,251

Mineral and Surface Lands: Mineral and surface lands are carried at amounts that represent, principally, either costs at acquisition or values on March 1, 1913, net of accumulated amortization. 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; however, they presently represent all the mining activity on the Trust’s properties. Mineral lands are being amortized on the straight-line method over the remaining term of the Trust. The straight-line method of amortization bears close resemblance to the units-of-production method over the remaining term of the Trust and, accordingly, is deemed a reasonable, systematic and rational method to associate expense with the revenues generated from taconite mining. Mineral land amortization amounted to $295,200, $294,000 and $295,200 for the years 2014, 2013 and 2012, respectively. Nonmineral lands are also included in this category; however, they represent negligible amounts.

In addition, surface lands are acquired from time to time to facilitate mining operations (see Note 5). These surface lands are being amortized on a straight-line basis over the remaining term of the Trust based on the values as of the beginning of each fiscal year. Surface lands remaining to be amortized amounted to $500,285, $901,085 and $1,301,885 as of January 1, 2014, 2013 and 2012, respectively. Surface land amortization amounted to $400,800, $400,800 and $400,800 for the years 2014, 2013 and 2012, respectively.

Royalties: Royalties from mineral leases (with cancellation terms varying from six months to one year) are taken into income as earned. 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). Minimum royalties, if required, are current year’s rental or minimum royalty income from the lessees to the Trust for holding the leasehold interest. Certain leases provide the steel and mining companies the ability to offset royalties, over the minimum royalty requirements, due on future taconite production, if any and when mined, against unabsorbed minimum royalties paid in prior periods. Accumulated minimum royalties from mineral leases in excess of tons extracted to date amounted to $13,040,552 and $11,050,845 as of December 31, 2014 and 2013, respectively.

NOTE 4 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

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, 2014, 2013 and 2012.

NOTE 5 – LAND ACQUISITION

A mining agreement dated January 1, 1959, with U.S. Steel Corporation provides that one-half of annual earned royalties, after satisfaction of minimum royalty payments, shall be applied, in lieu of royalty payments, to reimburse the lessee for a portion of its cost of acquisition of surface lands overlying the leased mineral deposits, which surface lands are then conveyed to the Trustees (see Note 4). The costs of surface lands acquired to facilitate the mining operations amounted to $0, $0 and $0 for the years 2014, 2013 and 2012, respectively. 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 6 – 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 that will be payable to the certificate holders of record from the reversioner at the end of the Trust. The balance in this account consists of attorneys’ fees and expenses of counsel for adverse parties pursuant to the Court Order in connection with litigation commenced in 1972 relating to the Trustees’ powers and duties under the Trust Agreement and the costs of homes and surface lands acquired in accordance with provisions of a lease with U.S. Steel Corporation, net of an allowance to amortize the cost of the land based on actual shipments of taconite and net of a credit for disposition of tangible assets.

Following is an analysis of this account for the years ended as of:


	2014			2013
Attorneys’ fees and expenses	$	1,024,834		$	1,024,834
Costs of surface lands		6,606,815			6,606,815
Cumulative shipment credits		(2,549,174	)		(2,471,015	)
Cumulative asset disposition credits		(372,124	)		(372,124	)
Principal Charges account balance	$	4,710,351		$	4,788,510

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. Pursuant to the Court Order

NOTE 6 – PRINCIPAL CHARGES ACCOUNT (CONTINUED)

of January 26, 2015 (See Note 3), expenses incurred after December 2013 and before the Trust's termination date that are allocated to the reversioner will be charged to the Principal Charges account as of April 6, 2015. The above analysis does not yet reflect this adjustment as the expenses will not be known and finalized until after the termination date of the Trust.

NOTE 7 – PENSION PLAN

The Trust has a noncontributory defined benefit pension plan that covers all employees. The Trustees are not eligible for pension benefits under the plan based on their services as Trustees. Although the termination date of the Trust is April 6, 2015, there has been no pension plan curtailment or settlement that would require the immediate recognition of certain amounts in other comprehensive income/loss as of December 31, 2014 or 2013. Immediate recognition of such amounts from accumulated other comprehensive income/loss will occur in the period that the pension plan is settled. The pension plan is expected to remain under the control of the Trustees until sometime in 2016, due to the length of time necessary to administer to the various tasks required to terminate a pension plan, including regulatory filings, securing an annuity provider to continue the benefits to retirees, etc. The pension accounting guidance requires employers with pension plans to recognize the funded (or unfunded) status of a plan on the face of the balance sheet. The funded status is determined by comparing the pension plan assets at fair value to the projected (future) benefit obligation.

A summary of the components of net periodic pension cost and other amounts recognized in other comprehensive income is as follows:


Net Periodic Pension Cost	2014			2013			2012
Service cost	$	310,335		$	325,693		$	306,799
Interest cost		362,561			307,871			322,198
Expected return on assets		(225,814	)		(537,923	)		(448,470	)
Amortization of net loss		—			663,536			492,391
Amortization of prior service cost		17,467			17,469			17,469
Net periodic pension cost		464,549			776,646			690,387


Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income
Net loss (gain) arising during the period		2,797,734			(879,193	)		488,972
Amortization of net loss included in net periodic pension cost		—			(663,536	)		(492,391	)
Amortization of prior service cost included in net periodic pension cost		(17,467	)		(17,469	)		(17,469	)
Total loss (gain) recognized in other comprehensive income		2,780,267			(1,560,198	)		(20,888	)
Total recognized in net periodic pension cost and other comprehensive income	$	3,244,816		$	(783,552	)	$	669,499

NOTE 7 – PENSION PLAN (CONTINUED)

A summary of the weighted-average assumptions used in the measurement of the benefit obligation and the net periodic pension cost is as follows:


	2014		2013
Discount rate for benefit obligation		3.50%		4.25%
Discount rate for net periodic pension cost		4.25%		3.50%
Rate of compensation increase		3.50%		3.50%
Expected long-term return on plan assets		2.80%		2.30%

The determination of the discount rate is based on the Citigroup pension yield curve that approximates the expected cash flow payouts of the plan, coupled with a consideration of the Moody’s Long-term Corporate Aa Bond Yield. The determination of the rate of compensation increase is based on historical salary adjustment averages. The determination of the expected long-term return on plan assets is based on a revised investment policy effective in 2014 that recognizes exposure to equities given the termination of the Trust on April 6, 2015, and also with consideration to the period of time expected following the termination date of the Trust to administer to all the tasks required to terminate the pension plan.

A summary of the changes in projected benefit obligation is as follows:


	2014			2013
Projected benefit obligation at beginning of year	$	8,678,194		$	8,942,161
Service cost		310,335			325,693
Interest cost		362,561			307,871
Actuarial loss (gain)		2,910,925			(624,138	)
Benefit payments		(274,527	)		(273,393	)
Projected benefit obligation at end of year	$	11,987,488		$	8,678,194

A summary of the changes in the fair value of plan assets is as follows:


	2014			2013
Fair value of plan assets at beginning of year	$	9,265,353		$	7,430,467
Contributions by the Trust		1,679,091			1,315,301
Actual return on plan assets		339,005			792,978
Benefit payments		(274,527	)		(273,393	)
Fair value of plan assets at end of year	$	11,008,922		$	9,265,353

A summary of the plan’s funded (unfunded) status and amounts recognized in the balance sheets shown as “Prepaid pension costs” or “Liability for pension benefits” is as follows:


	2014			2013
Accumulated benefit obligation at end of year	$	9,684,899		$	6,737,531
Effect of future compensation increases and scheduled benefit adjustment		2,302,589			1,940,663
Projected benefit obligation at end of year		11,987,488			8,678,194
Fair value of plan assets at end of year		11,008,922			9,265,353
Funded (unfunded) status at end of year	$	(978,566	)	$	587,159

NOTE 7 – PENSION PLAN (CONTINUED)

A summary of the amounts recognized in the balance sheets shown as “Accumulated other comprehensive loss” is as follows:


	2014		2013
Net loss	$	3,642,178	$	844,444
Prior service cost		—		17,467
Accumulated other comprehensive loss	$	3,642,178	$	861,911

The net loss and prior service cost amounts that will be amortized from “Accumulated other comprehensive loss” into net periodic pension cost in 2015 are estimated to be $2,443,429 and $0, respectively.

A summary of the estimated future benefit payments from the plan for the next ten year period is as follows:


Period	Amount
2015	$	668,589
2016		850,240
2017		831,922
2018		810,249
2019		783,267
2020 - 2024		3,555,152

The 2015 contribution to the plan is estimated to approximate $978,566, representing the maximum contribution that is recommended pursuant to the Trust’s annual actuarial valuation. However, the actual 2015 contribution will not be determined and finalized until after the completion of the plan’s annual actuarial valuation, which is performed as of the plan’s fiscal year end, March 31.

The investment policy of the plan was revised in 2014 to recognize exposure to equities given the termination date of the Trust on April 6, 2015, and also with consideration to the period of time expected following the termination date of the Trust to administer to all the tasks required to terminate the pension plan. A sliding scale was adopted that adjusts the plan portfolio maximum equities allocation over the course of the next year. As of December 31, 2014, said policy permits up to approximately 21% of the plan portfolio invested in equity securities (via the S&P 500 Exchange Traded Fund) and the remaining monies invested in fixed income (debt) securities and cash. The equity portfolio strategy is to generate appreciation and growth in the plan’s overall value over the long-term with its benchmark being the S&P 500 Index. The debt portfolio strategy is to generate income for the payment of benefits, as well as investment diversification with its benchmark being the Barclays Capital Government/Credit Index. The cash portfolio strategy is to provide liquidity for the payment of benefits to current retirees. The fair value measurements are based on quoted prices in active markets for identical assets (Level 1).

A summary of the plan’s weighted-average asset allocations by category is as follows:


	2014					2013
	Fair Value		%			Fair Value		%
Equity securities	$	2,272,943		21	%	$	3,441,055		37	%
Debt securities – corporate issues		8,267,454		75			4,817,000		52
Debt securities – U.S. government issues		334,175		3			931,384		10
Cash (money market, accrued income)		134,350		1			75,914		1
Total	$	11,008,922		100	%	$	9,265,353		100	%

NOTE 8 – INCOME TAXES

The Trustees filed an election under Section 646 of the Tax Reform Act of 1986, as amended. As discussed in Note 3, 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 9 – LEASE COMMITMENTS

The Trust leases office facilities in Saint Paul, Minnesota. These leases include one-hundred-eighty-day cancellation clauses, contain various renewal options and exclude any contingent rental provisions. Rental expense for these operating leases amounted to $55,856, $62,603 and $62,056 for the years 2014, 2013 and 2012, respectively.

NOTE 10 – QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

A summary of (unaudited) quarterly results of operations (in thousands of dollars, except per share amounts) is as follows:


	Quarter Ended
	March 31		June 30		Sept. 30		Dec. 31
2014
Royalties	$	4,305	$	5,318	$	5,017	$	2,959
Interest and other income		282		12		44		23
Total revenues		4,587		5,330		5,061		2,982
Expenses		1,015		1,088		1,117		1,616
Net income	$	3,572	$	4,242	$	3,944	$	1,366
Earnings per share	$	2.38	$	2.83	$	2.63	$	0.91

2013
Royalties	$	4,708	$	5,009	$	4,404	$	4,722
Interest and other income		26		20		35		27
Total revenues		4,734		5,029		4,439		4,749
Expenses		1,043		1,011		1,035		1,071
Net income	$	3,691	$	4,018	$	3,404	$	3,678
Earnings per share	$	2.46	$	2.68	$	2.27	$	2.45

NOTE 11 – ACCUMULATED OTHER COMPREHENSIVE LOSS

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


	Amounts reclassified from AOCL
Component item	2014		2013		2012
Amortization of defined benefit pension items:
Prior service cost	$	17,467	$	17,469	$	17,469
Net loss		—		663,536		492,391
Total	$	17,467	$	681,005	$	509,860

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


Defined benefit pension items	Prior Service Cost			Net Loss			Total
BALANCE AT JANUARY 1, 2012	$	(52,405	)	$	(2,390,592	)	$	(2,442,997	)
Net loss arising during period before reclassifications		—			(488,972	)		(488,972	)
Amounts reclassified from AOCL		17,469			492,391			509,860
Other comprehensive income		17,469			3,419			20,888
BALANCE AT DECEMBER 31, 2012		(34,936	)		(2,387,173	)		(2,422,109	)
Net gain arising during period before reclassifications		—			879,193			879,193
Amounts reclassified from AOCL		17,469			663,536			681,005
Other comprehensive income		17,469			1,542,729			1,560,198
BALANCE AT DECEMBER 31, 2013		(17,467	)		(844,444	)		(861,911	)
Net loss arising during period before reclassifications		—			(2,797,734	)		(2,797,734	)
Amounts reclassified from AOCL		17,467			—			17,467
Other comprehensive income (loss)		17,467			(2,797,734	)		(2,780,267	)
BALANCE AT DECEMBER 31, 2014	$	—		$	(3,642,178	)	$	(3,642,178	)

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 (the Trust) as of December 31, 2014 and 2013, and the related statements of beneficiaries’ equity, income, comprehensive income and cash flows for each of the three years in the period ended December 31, 2014. 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 the Trust at December 31, 2014 and 2013, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2014, in conformity with U.S. generally accepted accounting principles.

As discussed in Note 2 to the financial statements, upon termination of the Trust on April 6, 2015, the certificates of beneficial interest (shares) in the Trust will be cancelled and the certificate holders’ remaining interest will be limited to the final distribution.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Great Northern Iron Ore Properties’ internal control over financial reporting as of December 31, 2014, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (1992 framework), and our report dated February 26, 2015, expressed an unqualified opinion thereon.


	/s/ Ernst & Young LLP

Minneapolis, Minnesota
February 26, 2015

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

The Trustees
Great Northern Iron Ore Properties

We have audited Great Northern Iron Ore Properties’ (the Trust) internal control over financial reporting as of December 31, 2014, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (1992 framework) (the COSO criteria). The Trust’s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Trust’s 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, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, 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, the Trust maintained, in all material respects, effective internal control over financial reporting as of December 31, 2014, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the 2014 financial statements of Great Northern Iron Ore Properties, and our report dated February 26, 2015, expressed an unqualified opinion thereon.

/s/ Ernst & Young LLP

Minneapolis, Minnesota

February 26, 2015

GREAT NORTHERN IRON ORE PROPERTIES

SUMMARY OF SHIPMENTS


				Full Tons Shipped
No.	Mine	Ownership Interest		2014		2013		2012		Cumulative Total to January 1, 2015
1.	Mahoning		100%		—		340,210		74,680		165,933,796
2.	Ontario 100%		100%		300,217		1,398,182		2,410,684		20,283,973
3.	Ontario 50%		50%		2,580,218		1,149,166		725,892		31,072,036
4.	Carmi-Enterprise		100%		353,075		144,381		638,284		83,972,347
5.	Russell Annex		50%		155,680		434,180		273,318		4,452,324
6.	Minntac		100%		2,778,540		2,922,771		3,237,598		90,596,674
					6,167,730		6,388,890		7,360,456		396,311,150
	Shipments from inactive mines and those exhausted, surrendered or sold prior to this year				—		67,157		—		316,756,763
	TOTAL				6,167,730		6,456,047		7,360,456		713,067,913


No.		Operating Interest
1-3		Cliffs Natural Resources — Hibbing Taconite Company
4-5		U.S. Steel Corporation — Keetac
6		U.S. Steel Corporation — Minntac


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

FIRST CLASS MAIL

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 February 26, 2015, with respect to the financial statements of Great Northern Iron Ore Properties, and the effectiveness of internal control over financial reporting of Great Northern Iron Ore Properties, included in the 2014 Annual Report to Certificate Holders of Great Northern Iron Ore Properties.

/s/ Ernst & Young LLP

Minneapolis, Minnesota

February 26, 2015

Exhibit 31.1

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

I, Joseph S. Micallef, certify that:

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

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

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

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 report is being prepared;

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;

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

disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (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; and

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 control over financial reporting.

Date:	February 26, 2015		By:	/s/ Joseph S. Micallef
				Joseph S. Micallef, Chief Executive Officer, Trustee and President of the Trustees (principal executive officer)

Exhibit 31.2

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

I, Thomas A. Janochoski, certify that:

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 control over financial reporting.

Date:	February 26, 2015		By:	/s/ Thomas A. Janochoski
				Thomas A. Janochoski, Chief Financial Officer, Vice President & Secretary (principal financial and accounting officer)

Exhibit 32

Certifications of Chief Executive Officer and Chief Financial Officer
pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 (furnished but not filed)

In connection with this 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, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. 1350, that:

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

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

Date:

February 26, 2015

By:

/s/ Joseph S. Micallef

Joseph S. Micallef, Chief Executive Officer,
Trustee and President of the Trustees
(principal executive officer)

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

----------

In connection with this 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, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. 1350, that:

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 26, 2015		By:	/s/ Thomas A. Janochoski
				Thomas A. Janochoski, Chief Financial Officer, Vice President & Secretary (principal financial and accounting officer)

Exhibit 99

Report of Audit Committee

GREAT NORTHERN IRON ORE PROPERTIES

Report of Audit Committee

Year Ended December 31, 2014

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 of the financial statements of the Trust for the year 2014. All audit and non-audit services (printing and reproduction services) were preapproved by the Audit Committee. Fees paid in 2014 for the annual audit services were $94,000, for audit-related services were $3,200, for tax services were $0 and for all other services were $0. Fees paid in 2013 for the annual audit services were $90,400, for audit-related services were $1,600, for tax services were $0 and for all other services were $3,000.

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, 2014, for filing with the Securities and Exchange Commission.

Respectfully submitted,

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

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

/s/ James E. Swearingen
James E. Swearingen, Audit Committee Member	Dated:	February 26, 2015

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