UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)

[X]

Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 –
For the Period Ended September 30, 2004

[ ]

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

Commission file number 1-701

GREAT NORTHERN IRON ORE PROPERTIES

(Exact name of registrant as specified in its charter)

Minnesota		41-0788355

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

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

(Address of principal executive office)		(Zip Code)

(651) 224-2385

(Registrant’s telephone number, including area code)

Not Applicable

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

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

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act). Yes X No

Number of shares of beneficial interest outstanding on September 30, 2004: 1,500,000

PART I. FINANCIAL INFORMATION
Item 1. Financial Statements

GREAT NORTHERN IRON ORE PROPERTIES
CONDENSED BALANCE SHEETS

	September 30 2004		December 31 2003
	(Unaudited)		(Note)
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	1,408,584	$	856,399
United States Treasury securities		3,661,943		3,746,640
Royalties receivable		3,198,650		2,243,423
Prepaid expenses		24,616		4,679

TOTAL CURRENT ASSETS		8,293,793		6,851,141
NONCURRENT ASSETS
United States Treasury securities		5,149,732		5,097,676
Prepaid pension expense		948,919		810,183

		6,098,651		5,907,859
PROPERTIES
Mineral lands		38,587,445		38,577,007
Less allowances for depletion and
amortization		34,237,915		34,081,765

		4,349,530		4,495,242
Building and equipment–at cost, less
allowances for accumulated depreciation
(9/30/04 – $205,458; 12/31/03 – $193,279)		143,779		159,347

		4,493,309		4,654,589

	$	18,885,753	$	17,413,589

LIABILITIES AND BENEFICIARIES’ EQUITY
CURRENT LIABILITIES
Accounts payable and accrued expenses	$	134,856	$	94,656
Distributions		3,150,000		2,550,000

TOTAL CURRENT LIABILITIES		3,284,856		2,644,656
NONCURRENT LIABILITIES		27,000		27,000
BENEFICIARIES’ EQUITY, including certificate
holders’ equity, represented by 1,500,000
shares of beneficial interest authorized
and outstanding, and reversionary interest		15,573,897		14,741,933

	$	18,885,753	$	17,413,589

Note: The balance sheet at December 31, 2003 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.

See notes to condensed financial statements.

GREAT NORTHERN IRON ORE PROPERTIES

CONDENSED STATEMENTS OF INCOME
(Unaudited)

	Three Months Ended						Nine Months Ended
	September 30						September 30
	2004			2003			2004			2003
Revenues:
Royalties	$	3,525,075		$	2,954,900		$	10,977,491		$	9,250,162
Interest and other income		108,513			76,756			235,009			303,101

		3,633,588			3,031,656			11,212,500			9,553,263
Costs and expenses		526,232			509,588			1,680,536			1,638,312

NET INCOME	$	3,107,356		$	2,522,068		$	9,531,964		$	7,914,951

Weighted-average shares outstanding		1,500,000			1,500,000			1,500,000			1,500,000
BASIC & DILUTED EARNINGS PER SHARE	$	2.07		$	1.68		$	6.35		$	5.28

Distributions declared per share	$	2.10	(1)	$	1.70	(2)	$	5.80	(3)	$	4.80	(4)
Distributions paid per share	$	1.90	(5)	$	1.60	(6)	$	5.40	(7)	$	4.60	(8)

)

$2.10

declared

9/17/2004

payable

10/29/2004

)

$1.70

declared

9/12/2003

paid

10/31/2003

)

$1.80

declared

3/15/2004

plus

$1.90

declared

6/14/2004 plus

$2.10

declared

9/17/2004

paid

4/30/2004

paid

7/30/2004

payable

10/29/2004

)

$1.50

declared

3/14/2003

plus

$1.60

declared

6/9/2003 plus

$1.70

declared

9/12/2003

paid

4/30/2003

paid

7/31/2003

paid

10/31/2003

)

$1.90

declared

6/14/2004

paid

7/30/2004

)

$1.60

declared

6/9/2003

paid

7/31/2003

)

$1.70

declared

12/19/2003

plus

$1.80

declared

3/15/2004 plus

$1.90

declared

6/14/2004

paid

1/30/2004

paid

4/30/2004

paid

7/30/2004

)

$1.50

declared

12/20/2002

plus

$1.50

declared

3/14/2003 plus

$1.60

declared

6/9/2003

paid

1/31/2003

paid

4/30/2003

paid

7/31/2003

See notes to condensed financial statements.

GREAT NORTHERN IRON ORE PROPERTIES

CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)

	Nine Months Ended
	September 30
	2004		2003
Cash flows from operating activities:
Cash received from royalties and rents	$	10,114,465	$	9,373,027
Cash paid to suppliers and employees		-1,615,662		-1,562,746
Interest received		140,011		216,408

NET CASH PROVIDED BY OPERATING ACTIVITIES		8,638,814		8,026,689
Cash flows from investing activities:
U.S. Treasury securities purchased		-2,700,000		-3,550,000
U.S. Treasury securities matured		2,725,000		2,900,000
Net expenditures for equipment		-11,629		-28,227

NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES		13,371		-678,227
Cash flows from financing activities:
Distributions paid		-8,100,000		-6,900,000

NET CASH USED IN FINANCING ACTIVITIES		-8,100,000		-6,900,000

Net increase in cash and cash equivalents		552,185		448,462
Cash and cash equivalents at beginning of year		856,399		663,230

CASH AND CASH EQUIVALENTS AT SEPTEMBER 30	$	1,408,584	$	1,111,692

See notes to condensed financial statements.

GREAT NORTHERN IRON ORE PROPERTIES

NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)

Periods of Three and Nine Months ended September 30, 2004 and September 30, 2003

Note A — BASIS OF PRESENTATION

The accompanying unaudited condensed financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the periods stated above are not necessarily indicative of the results that may be expected for each respective full year. For further information, refer to the financial statements and footnotes included in the Great Northern Iron Ore Properties (“Trust”) Annual Report on Form 10-K for the year ended December 31, 2003.

Note B — BENEFICIARIES’ EQUITY

Pursuant to the Court Order of November 29, 1982, the Trustees were directed to create and maintain an account designated as “Principal Charges.” This account constitutes a first and prior lien of certificate holders on any property transferable to the reversioner and reflects an allocation of beneficiaries’ equity between the certificate holders and the reversioner. This account is neither an asset nor a liability of the Trust. Rather, this account maintains and represents a balance which will be payable to the certificate holders 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 Instrument and the cost of surface lands acquired in accordance with provisions of a lease with United States Steel Corporation, net of an allowance to amortize the cost of the land based on actual shipments of taconite and net of a credit for disposition of tangible assets. Following is an analysis of this account as of September 30, 2004:

Attorneys’ fees and expenses	$	1,024,834
Cost of surface lands		5,713,703
Cumulative shipment credits		-1,287,068
Asset disposition credits		-57,950

Principal Charges account	$	5,393,519

Upon termination of the Trust, the Trustees shall either sell tangible assets or obtain a loan with tangible assets as security to provide monies for distribution to the certificate holders in the amount of the Principal Charges account balance.

Note C — PENSION PLAN

A summary of the components of net periodic pension cost, a noncash item, is as follows:

	Three Months Ended September 30				Nine Months Ended September 30
	2004		2003		2004		2003
Service cost	$	29,356	$	23,054	$	88,069	$	69,164
Interest cost		52,599		53,501		157,797		160,504
Expected return on assets		-75,805		-65,145		-227,414		-195,437
Net amortization		1,441		9,662		4,323		28,986

Net periodic pension cost	$	7,591	$	21,072	$	22,775	$	63,217

The plan’s annual actuarial valuation was performed as of the plan’s fiscal year-end March 31. The recommended contribution to the plan was $161,511, which contribution was made in August, 2004.

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

Periods of Three and Nine Months ended September 30, 2004 and September 30, 2003

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

The terms of the Great Northern Iron Ore Properties Trust Agreement, created December 7, 1906, state that the Trust shall continue for twenty years after the death of the last surviving of eighteen named in the Trust Agreement. The last survivor of these eighteen named in the Trust Agreement died April 6, 1995. Accordingly, the Trust now terminates twenty years from April 6, 1995, that being April 6, 2015. The termination of the Trust on April 6, 2015 means that there will be no trading of the Trust’s 1,500,000 certificates of beneficial interest (shares) on the New York Stock Exchange beyond that date.

At the end of the Trust, all monies remaining in the hands of the Trustees (after paying and providing for all expenses and obligations of the Trust) shall be distributed ratably among the certificate holders (term beneficiaries), while all property other than monies shall be conveyed and transferred to the reversionary beneficiary (formerly Lake Superior Company, Limited) or its successors or assigns (currently Glacier Park Company, a wholly owned subsidiary of Burlington Resources, Inc.). In addition, by the terms of a District Court Order dated November 29, 1982, the reversioner, in effect, is required to pay the balance in the Principal Charges account (see Note B above) which primarily represents the costs of acquiring homes and surface lands on the iron formation that are necessary for the orderly mine development by United States Steel Corporation under its 1959 lease with the Trustees. This account balance, which may increase or decrease, will be added to the cash distributable to the certificate holders of record at the termination of the Trust.

Results of Operations:

Royalties increased $1,727,329 and $570,175 during the nine months and three months ended September 30, 2004, respectively, as compared to the same periods in 2003, due mainly to improved royalty rates caused by the escalation of producer price indices, applied to tonnage mined from Trust lands.

Interest and other income decreased $68,092 during the nine months ended September 30, 2004, as compared to the same period in 2003, due mainly to reduced yields on our funds held for investment and condemnation proceeds received in 2003. Interest and other income increased $31,757 during the three months ended September 30, 2004, as compared to the same period in 2003, due mainly to improved timber revenues.

At their meeting held on September 17, 2004, the Trustees declared a third quarter distribution of $2.10 per share, amounting to $3,150,000 payable October 29, 2004 to certificate holders of record at the close of business on September 30, 2004. The Trustees have now declared three quarterly distributions in 2004. The first, in the amount of $1.80 per share, was paid on April 30, 2004 to certificate holders of record on March 31, 2004; the second, in the amount of $1.90 per share, was paid on July 30, 2004 to certificate holders of record on June 30, 2004; and the third, that being the current distribution. The first, second and third quarter 2003 distributions were $1.50, $1.60 and $1.70 per share, respectively. The Trustees intend to continue quarterly distributions and set the record date as of the last business day of each quarter. The next distribution will be paid in late January 2005 to certificate holders of record on December 31, 2004.

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

Liquidity:

In the interest of preservation of principal of Court-approved reserves and guided by the restrictive provisions of Section 646 of the Tax Reform Act of 1986, as amended, monies are invested primarily in U.S. 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.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

— None

Item 4. 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 and Exchange Act of 1934 (the “Exchange Act”)).

Based on this evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Trust’s disclosure controls and procedures are effective to ensure that information required to be disclosed by the Trust in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms. There was no change in the Trust’s internal control over financial reporting during the Trust’s most recently completed fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Trust’s internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

— None

Item 2. Changes in Securities and Use of Proceeds

— None

Item 3. Defaults Upon Senior Securities

— None

Item 4. Submission of Matters to a Vote of Certificate Holders

— None

Item 5. Other Information

— None

Item 6. Exhibits and Reports on Form 8-K

(a)

Exhibits:

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

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

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

(b)

Reports on Form 8-K – None


			GREAT NORTHERN IRON ORE PROPERTIES (Registrant)
Date	October 19, 2004	By		/s/ Joseph S. Micallef

			Joseph S. Micallef, President of the Trustees and Chief Executive Officer
Date	October 19, 2004	By		/s/ Thomas A. Janochoski

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