Exhibit 13



Annual Report to Certificate Holders



GREAT NORTHERN IRON

ORE PROPERTIES



________________



ONE-HUNDRED FIRST

ANNUAL REPORT OF THE TRUSTEES

TO CERTIFICATE HOLDERS



FOR

YEAR ENDED DECEMBER 31, 2007

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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



Website:www.gniop.com



________________



TRUSTEES
        OFFICERSJOSEPH S. MICALLEF   President of the Trustees ROGER W. STAEHLE* ROBERT A. STEIN* JOHN H. ROE, III* *Audit Committee
        JOSEPH S. MICALLEF   Chief Executive Officer THOMAS A. JANOCHOSKI   Chief Financial Officer   Vice President & Secretary

ROGER P. JOHNSON   Chief Engineer   Manager of Mines




________________





SHAREHOLDER RELATIONS DEPARTMENT, TRANSFER OFFICE

AND REGISTRAR



Wells Fargo Bank, N.A.

P.O. Box 64854

Saint Paul, Minnesota 55164-0854



Toll-free: 1-800-468-9716



MESABI IRON RANGE OFFICE



801 East Howard Street

Hibbing, Minnesota 55746-0429



(218) 262-3886

Fax (218) 262-4295

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GREAT NORTHERN IRON ORE PROPERTIES



SUMMARY OF OPERATIONS





Year Ended December 312007
        
        2006
        
        2005
        
        2004
        
        2003Shipments from our mines (pellet tons)
        
        
        8,136,429
        
        
        8,851,919
        
        
        8,673,198
        
        
        9,167,200
        
        
        9,772,338Royalties
        
        $
        16,586,881
        
        $
        17,045,244
        
        $
        17,998,451
        
        $
        14,141,775
        
        $
        11,800,870Other income
        
        $
        609,738
        
        $
        509,437
        
        $
        362,761
        
        $
        305,623
        
        $
        382,534Net income
        
        $
        14,452,437
        
        $
        14,773,035
        
        $
        15,720,620
        
        $
        12,242,010
        
        $
        9,967,544Total assets
        
        $
        17,525,876
        
        $
        18,510,076
        
        $
        19,455,519
        
        $
        18,407,999
        
        $
        17,413,589Average shares outstanding
        
        
        1,500,000
        
        
        1,500,000
        
        
        1,500,000
        
        
        1,500,000
        
        
        1,500,000Earnings per share, based on weighted-average shares outstanding during the year
        
        $
        9.63
        
        $
        9.85
        
        $
        10.48
        
        $
        8.16
        
        $
        6.65Declared distributions per share
        
        $
        10.00
        (1)
        $
        10.30
        (2)
        $
        10.40
        (3)
        $
        8.20
        (4)
        $
        6.50
        (5)




________________



(1) $2.00 pd 4/30/07; $2.30 pd 7/31/07; $2.80 pd 10/31/07; $2.90 pd 1/31/08

(2) $2.00 pd 4/28/06; $2.20 pd 7/31/06; $2.80 pd 10/31/06; $3.30 pd 1/31/07

(3) $2.20 pd 4/29/05; $2.40 pd 7/29/05; $2.80 pd 10/31/05; $3.00 pd 1/31/06

(4) $1.80 pd 4/30/04; $1.90 pd 7/30/04; $2.10 pd 10/29/04; $2.40 pd 1/31/05

(5) $1.50 pd 4/30/03; $1.60 pd 7/31/03; $1.70 pd 10/31/03; $1.70 pd 1/30/04



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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 in Saint Paul, Minnesota.



During 2007, 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 excess royalties (over the minimum royalty requirements) due on future taconite production, if any and when mined, against minimum royalties paid in prior periods. A Summary of Shipments is tabulated on the last page of this report.



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 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.



At the end 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 termination, the Trust is obligated to distribute ratably to these certificate holders the net monies remaining in the hands of the Trustees (after paying and providing for all expenses and obligations of the Trust), plus the balance in the Principal Charges account (see Note D to the Financial Statements). All other Trust property (most notably the Trusts mineral properties and the active leases) must be conveyed and transferred to the reversioner (currently Glacier Park Company, a wholly owned subsidiary of ConocoPhillips) under the terms of the Trust Agreement.



The exact final distribution, though not determinable at this time, will generally consist of the sum of the Trusts net monies (essentially, total assets less liabilities and properties) and the balance in the Principal Charges account, less any and all expenses and obligations of the Trust upon termination. To offer a hypothetical example, without factoring in any expenses and obligations of the Trust upon its termination, and using the financial statement values as of December 31, 2007, the net monies were approximately $8,134,000 and the Principal Charges account balance was approximately $5,037,000, resulting in a final distribution payable of approximately $13,171,000, or about $8.78 per share. After payment of this final



3

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distribution, the certificates of beneficial interest (shares) would be cancelled and have no further value. It is important to note, however, that the actual net monies on hand and the Principal Charges account balance will most likely fluctuate during the ensuing years and will not be final until after the termination and wind-down of the Trust. 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 Trust is solely involved with the leasing and care of its properties. The management of the Trust is vested in the Trustees. The Trustees have no duty to sell property unless required to do so to serve both the term beneficiaries and reversionary beneficiary impartially; and, if the need arises, the Trustees may petition the Court for further instructions defining what is required in a particular case to balance the interests of the certificate holders and reversioner. The major source of income to the Trust is earned royalties derived from taconite production from the Trusts properties by the Trusts lessees (customers) and minimum royalties, pursuant to mineral leases. Earned royalties are based on the taconite tonnage extracted (also referred to as produced or shipped) from the Trusts lands applied to a royalty rate as defined in the various specific and confidential
operating agreements (also referred to as leases) with the Trusts lessees. Certain leases have minimum royalty provisions that require 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 income whether or not the income is distributed.



The Trustees provided annual income tax information in January 2008 to certificate holders of record with holdings on any of the four quarterly record dates during 2007. This information included the following:



Substitute Form 1099-MISC This form reported the certificate holders 2007 allocable share of income from the Trust, distributions declared and any taxes withheld. (Foreign certificate holders received a Form 1042S.)



Trust Supplemental Statement This statement reported the number of units (shares) held by the certificate holder on any of the four quarterly record dates in 2007.



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



4

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Shares of beneficial interest in the Trust are traded on the New York Stock Exchange under the ticker symbol GNI (CUSIP No. 391064102). There were 1,286 certificate holders of record on December 31, 2007. The high and low prices for the quarterly periods commencing January 1, 2006, through December 31, 2007, inclusive, were as follows:



2007
        
        2006Quarter
        
        High
        
        Low
        
        High
        
        LowFirst
        
        $
        134.00
        
        $
        111.70
        
        $
        140.15
        
        $
        120.50Second
        
        
        120.12
        
        
        102.50
        
        
        141.00
        
        
        107.00Third
        
        
        120.00
        
        
        110.00
        
        
        124.60
        
        
        101.80Fourth
        
        
        136.00
        
        
        117.20
        
        
        124.50
        
        
        101.00




Results of Operations:  Royalties for 2007 were less than those of 2006 primarily due to reduced taconite mining on our lands, offset in part by an overall higher average earned royalty rate caused by escalation of producer price indices. Royalties for 2006 were less than those of 2005 primarily due to an overall lower average earned royalty rate, which was due to our lessees mining more from our partial fee interest lands resulting in royalties representative of our ownership interest. Other income for 2007 was greater than that of 2006, which was greater than that of 2005, primarily due to overall improved yields on our funds held for investment. Net income for 2007 was less than that of 2006, which was less than that of 2005, primarily due to the decreased Royalties (as explained above).



The Trustees declared four quarterly distributions in 2007 totaling $10.00 per share. The first, in the amount of $2.00 per share, was paid on April 30, 2007, to certificate holders of record on March 30, 2007; the second, in the amount of $2.30 per share, was paid on July 31, 2007, to certificate holders of record on June 29, 2007; the third, in the amount of $2.80 per share, was paid on October 31, 2007, to certificate holders of record on September 28, 2007; and the fourth, in the amount of $2.90 per share, was paid on January 31, 2008, to certificate holders of record on December 31, 2007.



The Trustees declared four quarterly distributions in 2006 totaling $10.30 per share. The first, in the amount of $2.00 per share, was paid on April 28, 2006, to certificate holders of record on March 31, 2006; the second, in the amount of $2.20 per share, was paid on July 31, 2006, to certificate holders of record on June 30, 2006; the third, in the amount of $2.80 per share, was paid on October 31, 2006, to certificate holders of record on September 29, 2006; and the fourth, in the amount of $3.30 per share, was paid on January 31, 2007, to certificate holders of record on December 29, 2006.



The Trustees intend to continue quarterly distributions and set the record date as of the last business day of each quarter. The next distribution will be paid in late April 2008 to certificate holders of record on March 31, 2008.



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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, 2007:



Payments Due by PeriodTotal
        
        Less than1 year
        
        1  3years
        
        3  5years
        
        More than5 yearsMinimum Pension Contributions(seeNoteE to the Financial Statements)
        
        $
        979,064
        
        $
        187,924
        
        $
        375,848
        
        $
        375,848
        
        $
        39,444Deferred Compensation
        
        
        102,400
        
        
        
        
        
        
        
        
        
        
        
        102,400St. Paul Office Leases(seeNoteG to the Financial Statements)
        
        
        30,912
        
        
        30,912
        
        
        
        
        
        
        
        
        




The Minimum Pension Contributions in the above table represent the current year minimum contribution required to fund the pension plan pursuant to ERISA regulations, which was extended to future years until the pension liability on the balance sheet is funded.



Critical Accounting Policies:Royaltiesfrom 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 excess royalties (over the minimum royalty requirements) on future taconite production. Minimum royalties, if not recovered before the termination of the lease, are forfeitable. In that event, no minimum royalties will be returned to the lessee.



Pension Plan Valuationsare 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. These assumptions reflect and incorporate the expected cash flow payouts of the pension



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plan given the determinate time frame to the termination of the Trust. Please refer to Note E to the Financial Statements for additional pension plan information.



ThePrincipal Charges accountrepresents a first and prior lien of certificate holders on any property transferable to the reversioner at the end of the Trust and reflects an allocation of beneficiaries equity between the certificate holders and the reversioner. This Court-ordered account is neither an asset nor a liability of the Trust. Rather, this account maintains and represents a balance that will be payable to the certificate holders of record from the reversioner at the end of the Trust. The account balance, as stated in Note D 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. 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slessees (customers)primarily include Minntac (Minntac) and Keewatin Taconite Company (Keetac), both owned and operated by U.S. Steel Corporation; Hibbing Taconite Company (Hibtac), owned by Arcelor-Mittal, Cleveland Cliffs Inc. and U.S. Steel Corporation, and operated by Cliffs Mining Company; and Minnesota Steel Industries LLC (MSI), owned by Essar Steel Holdings Ltd., a wholly owned subsidiary of Essar Global Ltd., with a new taconite mining and steelmaking facility anticipated to be constructed by MSI over the next few years, subject to the completion of financing. 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 inmarket demandfor 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 proximity 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, 2008. Should the steelworker labor contract negotiations not be favorably and timely resolved, it could result in a work stoppage that would likely adversely affect taconite production from Trust



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lands and reduce the Trusts royalties. 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.



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



Compliance with Section 646 of the Internal Revenue Code, as explained in Note F 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, based on independent tax firm reviews, the Trust has remained in compliance with the provisions of Section 646 since its election in 1988.



Theoutlookfor 2008 is that we expect it to be another good year for the Trust with strong production and earnings anticipated, subject to the favorable and timely resolution of the steelworker labor contract negotiations (which contracts are set to expire August 31, 2008).



________________



The Trust maintains a website, which can be found at:www.gniop.com. Information about the Trust posted on the website includes: General Trust information, Securities and Exchange Commission filings (Form 10-Ks, Form 10-Qs, Form 8-Ks), 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.



Respectfully submitted,



Joseph S. Micallef,President of the Trusteesand Chief Executive OfficerThomas A. Janochoski,Vice President & Secretaryand Chief Financial Officer
        Roger W. Staehle, TrusteeRobert A. Stein, TrusteeJohn H. Roe, III, TrusteeSaint Paul, MinnesotaFebruary 1, 2008






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MANAGEMENTS REPORT ON INTERNAL CONTROL OVER FINANCIALREPORTING



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, 2007. 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. Based on our assessment, we believe that, as of December 31, 2007, 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. Their report appears on pages 24 and 25.



Respectfully submitted,



Joseph S. Micallef,

Chief Executive Officer and

President of the Trustees




Thomas A. Janochoski,

Chief Financial Officer and

Vice President & Secretary




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GREAT NORTHERN IRON ORE PROPERTIES



BALANCE SHEETS



ASSETS



December 312007
        
        2006CURRENT ASSETSCash and cash equivalents
        
        $
        979,175
        
        $
        1,131,504United States Treasury securities(Note B)
        
        
        4,997,278
        
        
        5,086,107Royalties receivable
        
        
        2,924,517
        
        
        4,444,446Prepaid expenses
        
        
        4,519
        
        
        4,519TOTAL CURRENT ASSETS
        
        
        8,905,489
        
        
        10,666,576NONCURRENT ASSETSUnited States Treasury securities(Note B)
        
        
        4,755,295
        
        
        3,721,752PROPERTIESMineral and surface lands(Notes B and C)
        
        
        38,691,707
        
        
        38,691,707Accumulated depletion and amortization
        
        
        (34,940,185
        )
        
        (34,719,685
        )3,751,522
        
        
        3,972,022Building and equipment
        
        
        313,891
        
        
        359,543Accumulated depreciation
        
        
        (200,321
        )
        
        (209,817
        )113,570
        
        
        149,726TOTAL PROPERTIES
        
        
        3,865,092
        
        
        4,121,748TOTAL ASSETS
        
        $
        17,525,876
        
        $
        18,510,076LIABILITIES AND BENEFICIARIES EQUITYCURRENT LIABILITIESAccounts payable and accrued expenses
        
        $
        95,356
        
        $
        84,418Distributions
        
        
        4,350,000
        
        
        4,950,000TOTAL CURRENT LIABILITIES
        
        
        4,445,356
        
        
        5,034,418NONCURRENT LIABILITIESDeferred compensation
        
        
        102,400
        
        
        77,000Liability for pension benefits(Note E)
        
        
        979,064
        
        
        1,237,412TOTAL NONCURRENT LIABILITIES
        
        
        1,081,464
        
        
        1,314,412TOTAL LIABILITIES
        
        
        5,526,820
        
        
        6,348,830BENEFICIARIES EQUITYCertificate holders equity, represented by 1,500,000 certificates (shares or units) of beneficial interest authorized and outstanding, and the reversionary interest(Notes A and D)
        
        
        13,580,035
        
        
        14,127,598Accumulated other comprehensive loss(Note E)
        
        
        (1,580,979
        )
        
        (1,966,352
        )TOTAL BENEFICIARIES EQUITY
        
        
        11,999,056
        
        
        12,161,246TOTAL LIABILITIES AND BENEFICIARIES EQUITY
        
        $
        17,525,876
        
        $
        18,510,076




See accompanying notes.



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GREAT NORTHERN IRON ORE PROPERTIES



STATEMENTS OF BENEFICIARIES EQUITY



CertificateHolders Equity
        
        AccumulatedOtherComprehensive(Loss) Income
        
        TotalBeneficiariesEquityBALANCE ATDECEMBER31, 2004
        
        $
        14,683,943
        
        $
        
        
        $
        14,683,943Net and comprehensive income for 2005
        
        
        15,720,620
        
        
        
        
        
        15,720,620Distributions declared for 2005 ($10.40 per share)
        
        
        (15,600,000
        )
        
        
        
        
        (15,600,000
        )BALANCE ATDECEMBER31, 2005
        
        
        14,804,563
        
        
        
        
        
        14,804,563Net and comprehensive income for 2006
        
        
        14,773,035
        
        
        
        
        
        14,773,035Defined Benefit Pension Plan  adjustment due to the adoption of SFAS No. 158(Note E):
        
        
        
        
        
        (1,966,352
        )
        
        (1,966,352
        )Distributions declared for 2006 ($10.30 per share)
        
        
        (15,450,000
        )
        
        
        
        
        (15,450,000
        )BALANCE ATDECEMBER31, 2006
        
        
        14,127,598
        
        
        (1,966,352
        )
        
        12,161,246Comprehensive income:Net income for 2007
        
        
        14,452,437
        
        
        
        
        
        14,452,437Other comprehensive income:Defined Benefit Pension Plan(NoteE):Net gain arising during period
        
        
        
        
        
        212,342
        
        
        212,342Amortization of net prior service cost
        
        
        
        
        
        17,469
        
        
        17,469Amortization of net loss
        
        
        
        
        
        155,562
        
        
        155,562Total other comprehensive income
        
        
        
        
        
        
        
        
        385,373Total comprehensive income
        
        
        
        
        
        
        
        
        14,837,810Distributions declared for 2007 ($10.00 per share)
        
        
        (15,000,000
        )
        
        
        
        
        (15,000,000
        )BALANCE ATDECEMBER31, 2007
        
        $
        13,580,035
        
        $
        (1,580,979
        )
        $
        11,999,056




See accompanying notes.



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GREAT NORTHERN IRON ORE PROPERTIES



STATEMENTS OF INCOME





Year Ended December 312007
        
        2006
        
        2005REVENUESRoyalties
        
        $
        16,586,881
        
        $
        17,045,244
        
        $
        17,998,451Interest earned
        
        
        450,928
        
        
        362,009
        
        
        252,037Rent and other income
        
        
        158,810
        
        
        147,428
        
        
        110,724TOTAL REVENUES
        
        
        17,196,619
        
        
        17,554,681
        
        
        18,361,212EXPENSESRoyalty disbursements
        
        
        4,623
        
        
        4,623
        
        
        4,623Real estate and payroll taxes
        
        
        149,219
        
        
        107,745
        
        
        139,090Inspection and care of properties
        
        
        548,865
        
        
        538,730
        
        
        531,830Administrative and general
        
        
        1,784,819
        
        
        1,872,969
        
        
        1,723,535Depreciation and amortization
        
        
        256,656
        
        
        257,579
        
        
        241,514TOTAL EXPENSES
        
        
        2,744,182
        
        
        2,781,646
        
        
        2,640,592NET INCOME
        
        $
        14,452,437
        
        $
        14,773,035
        
        $
        15,720,620BASIC AND DILUTED EARNINGS PER SHARE
        
        $
        9.63
        
        $
        9.85
        
        $
        10.48




See accompanying notes.



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GREAT NORTHERN IRON ORE PROPERTIES



STATEMENTS OF CASH FLOWS



Year Ended December 312007
        
        2006
        
        2005OPERATING ACTIVITIESCash received from royalties and rents
        
        $
        18,265,620
        
        $
        16,629,963
        
        $
        16,957,982Cash paid to suppliers and employees
        
        
        (2,324,163
        )
        
        (2,389,614
        )
        
        (2,285,541
        )Interest received
        
        
        506,214
        
        
        314,595
        
        
        202,093NET CASH PROVIDED BY OPERATING ACTIVITIES
        
        
        16,447,671
        
        
        14,554,944
        
        
        14,874,534INVESTING ACTIVITIESUnited States Treasury securities purchased
        
        
        (6,000,000
        )
        
        (5,325,000
        )
        
        (5,232,326
        )United States Treasury securities matured
        
        
        5,000,000
        
        
        6,165,984
        
        
        5,088,738Expenditures for building and equipment
        
        
        
        
        
        (39,340
        )
        
        (44,809
        )NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES
        
        
        (1,000,000
        )
        
        801,644
        
        
        (188,397
        )FINANCING ACTIVITIESDistributions paid
        
        
        (15,600,000
        )
        
        (15,000,000
        )
        
        (14,700,000
        )NET CASH USED IN FINANCING ACTIVITIES
        
        
        (15,600,000
        )
        
        (15,000,000
        )
        
        (14,700,000
        )NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS
        
        
        (152,329
        )
        
        356,588
        
        
        (13,863
        )CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR
        
        
        1,131,504
        
        
        774,916
        
        
        788,779CASH AND CASH EQUIVALENTS AT END OF YEAR
        
        $
        979,175
        
        $
        1,131,504
        
        $
        774,916RECONCILIATION OF NET INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIESNet income
        
        $
        14,452,437
        
        $
        14,773,035
        
        $
        15,720,620Adjustments to reconcile net income to net cash provided by operating activities:Depreciation and amortization
        
        
        256,656
        
        
        257,579
        
        
        241,514Pension amortization(Note E)
        
        
        385,373
        
        
        
        
        
        Net decrease (increase) in assets:Accrued interest
        
        
        55,286
        
        
        (47,414
        )
        
        (49,944
        )Royalties receivable
        
        
        1,519,929
        
        
        (562,709
        )
        
        (1,046,793
        )Prepaid expenses
        
        
        
        
        
        123,991
        
        
        86,637Surface lands
        
        
        
        
        
        
        
        
        (104,400
        )Net increase (decrease) in liabilities:Accounts payable and accrued expenses
        
        
        10,938
        
        
        (5,738
        )
        
        8,400Deferred compensation
        
        
        25,400
        
        
        16,200
        
        
        18,500Liability for pension benefits
        
        
        (258,348
        )
        
        
        
        
        NET CASH PROVIDED BY OPERATING ACTIVITIES
        
        $
        16,447,671
        
        $
        14,554,944
        
        $
        14,874,534




See accompanying notes.



13

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GREAT NORTHERN IRON ORE PROPERTIES



NOTES TO FINANCIAL STATEMENTS

December 31, 2007



NOTE A  BUSINESS AND TERMINATION OF THE TRUST AND LEGAL PROCEEDINGS



Great Northern Iron Ore Properties (Trust) is presently involved solely with the leasing and maintenance of mineral and nonmineral lands owned by the Trust on the Mesabi Iron Range in northeastern 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 as follows: 2007  $11,993,000 and $4,363,000; 2006  $11,588,000 and $4,963,000; and 2005  $11,930,000 and $6,068,000.



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 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.



At the end 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 termination, the Trust is obligated to distribute ratably to these certificate holders the net monies remaining in the hands of the Trustees (after paying and providing for all expenses and obligations of the Trust), plus the balance in the Principal Charges account (see Note D). All other Trust property (most notably the Trusts mineral properties and the active leases) must be conveyed and transferred to the reversioner (currently Glacier Park Company, a wholly owned subsidiary of ConocoPhillips) under the terms of the Trust Agreement.



In proceedings commenced in 1972, the Minnesota Supreme Court determined that while by the terms of the Trust, the Trustees are given discretionary powers to convert Trust assets to cash and to distribute the proceeds to certificate holders, they are limited in their exercise of those powers by the legal duty imposed by well-established law of trusts to serve the interests of both term beneficiaries and the reversionary beneficiary with impartiality. Thus, the Trustees have no duty to exercise the powers of sale and distribution unless required to do so to serve both term and reversionary interests; and, if the need arises, the Trustees may petition the District Court of Ramsey County, Minnesota, for further instructions defining what is required in a particular case to balance the interests of certificate holders and reversioner. Also, the Court, in effect, held that the Trust is a
conventional trust, rather than a business trust, and must operate within the framework of well-established trust law.



14

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NOTE A  BUSINESS AND TERMINATION OF THE TRUST AND LEGAL PROCEEDINGS (continued)



By a letter dated April 4, 2007, certificate holders of record as of December 29, 2006, and the reversioner were notified of a hearing on May 9, 2007, in Ramsey County Courthouse, Saint Paul, Minnesota, for the purpose of settling and allowing the Trust accounts for the year 2006, and also for the purpose of petitioning the Court for instructions regarding the New York Stock Exchange (NYSE) mandated participation in a Direct Registration System (DRS), which requires book entry registration (by default) of all certificates of beneficial interest. By Court Order signed and dated May 9, 2007, the 2006 accounts were settled and allowed in all respects; and in addition, the Court ordered that the Trustees compliance with the NYSEs DRS mandate will not be in violation of any of the Trust Agreements provisions. By previous Orders, the
Court settled and allowed the accounts of the Trustees for preceding years of the Trust.



Section 646 of the Tax Reform Act of 1986, as amended, provided a special elective provision under which the Trust was allowed to convert from taxation as a corporation to that of a grantor trust. Pursuant to an Order of the Ramsey County District Court, the Trustees filed the Section 646 election with the Internal Revenue Service on December 30, 1988. On January 1, 1989, the Trust became exempt from federal and Minnesota corporate income taxes. For years 1989 and thereafter, certificate holders are taxed on their allocable share of the Trusts income whether or not the income is distributed. For certificate holder tax purposes, the Trusts income is determined on an annual basis, one-fourth then being allocated to each quarterly record date.



NOTE B  SIGNIFICANT ACCOUNTING POLICIES



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



Securities:United States Treasury securities are classified as held-to-maturity securities and are carried at cost, adjusted for accrued interest and amortization of premium or discount. Securities recognized as noncurrent assets will mature in 2009. Following is an analysis of the securities as of December 31:



Current
        
        Noncurrent2007
        
        2006
        
        2007
        
        2006Aggregate fair value
        
        $
        4,999,493
        
        $
        4,986,641
        
        $
        4,784,008
        
        $
        3,668,765Gross unrealized holding gains
        
        
        (27,140
        )
        
        
        
        
        (81,397
        )
        
        (3,232
        )Gross unrealized holding losses
        
        
        
        
        
        20,034
        
        
        
        
        
        10,794Amortized cost basis
        
        
        4,972,353
        
        
        5,006,675
        
        
        4,702,611
        
        
        3,676,327Accrued interest
        
        
        24,925
        
        
        79,432
        
        
        52,684
        
        
        45,425Amounts shown on balance sheets
        
        $
        4,997,278
        
        $
        5,086,107
        
        $
        4,755,295
        
        $
        3,721,752






15

---

NOTE B  SIGNIFICANT ACCOUNTING POLICIES (continued)



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. The value of the merchantable ore deposits was established on March 1, 1913, for federal income tax purposes. There presently is no cost depletion, as no natural ore mining from mineral lands is occurring. 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. In addition, surface lands are acquired from time to time to facilitate mining operations (see Note C). These surface lands are being amortized over the remaining life of the Trust based on the values as of the beginning of each fiscal
year. Surface lands remaining to be amortized amounted to $1,819,127, $2,039,627 and $2,144,447 as of January 1, 2007, 2006 and 2005, respectively. Said amortization amounted to $220,500, $220,500 and $209,220 for the years 2007, 2006 and 2005, 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 excess royalties (over the minimum royalty requirements) due on future taconite production, if any and when mined, against minimum royalties paid in prior periods. Accumulated minimum royalties in excess of tons
extracted to date amounted to $3,253,541 on December 31, 2007, and $3,306,198 on December 31, 2006.



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, 2007, 2006 and 2005.



16

---

NOTE C  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 to reimburse the lessee for a portion of its cost of acquisition of surface lands overlying the leased mineral deposits, which surface lands are then conveyed to the Trustees (see Note B). The costs of surface lands acquired to facilitate the mining operations amounted to $-0-, $-0- and $104,400 for the years 2007, 2006 and 2005, 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 D  PRINCIPAL CHARGES ACCOUNT



Pursuant to the Court Order of November 29, 1982, the Trustees were directed to create and maintain an account designated as Principal Charges. This account constitutes a first and prior lien of certificate holders on any property transferable to the reversioner and reflects an allocation of beneficiaries equity between the certificate holders and the reversioner. This account is neither an asset nor a liability of the Trust. Rather, this account maintains and represents a balance 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 as of December 31:



2007
        
        2006Attorneys fees and expenses
        
        $
        1,024,834
        
        $
        1,024,834Costs of surface lands
        
        
        5,817,965
        
        
        5,817,965Cumulative shipment credits
        
        
        (1,686,628
        )
        
        (1,577,250
        )Cumulative asset disposition credits
        
        
        (119,241
        )
        
        (97,881
        )Principal Charges account balance
        
        $
        5,036,930
        
        $
        5,167,668




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.



17

---

NOTE E  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 services as Trustees. During September 2006, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 158, Employers Accounting for Defined Benefit Pension and Other Postretirement Plans (SFAS No. 158), which the Trust adopted for its year ended December 31, 2006. SFAS No. 158 required 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 for 2007, 2006 and 2005 is as follows:



Net Periodic Pension Cost
        
        2007
        
        2006
        
        2005Service cost
        
        $
        241,382
        
        $
        235,525
        
        $
        214,125Interest cost
        
        
        327,841
        
        
        309,600
        
        
        282,728Expected return on assets
        
        
        (345,689
        )
        
        (312,379
        )
        
        (300,686
        )Amortization of net loss
        
        
        155,562
        
        
        166,209
        
        
        147,526Amortization of prior service cost
        
        
        17,469
        
        
        17,469
        
        
        Net periodic pension cost
        
        
        396,565
        
        
        416,424
        
        
        343,693Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive IncomeNet gain arising during the period
        
        
        (212,342
        )
        
        
        
        
        Amortization of net loss
        
        
        (155,562
        )
        
        
        
        
        Amortization of prior service cost
        
        
        (17,469
        )
        
        
        
        
        Total recognized in other comprehensive income
        
        
        (385,373
        )
        
        
        
        
        Total recognized in net periodic pension cost and other comprehensive income
        
        $
        11,192
        
        $
        416,424
        
        $
        343,693




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



2007
        
        2006Discount rate for benefit obligation
        
        
        5.10%
        
        
        5.10%Discount rate for net periodic pension cost
        
        
        5.75%
        
        
        5.75%Rate of compensation increase
        
        
        3.50%
        
        
        3.50%Expected long-term return on plan assets
        
        
        7.50%
        
        
        7.50%






18

---

NOTE E  PENSION PLAN (continued)



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



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



2007
        
        2006Projected benefit obligation at beginning of year
        
        $
        5,821,095
        
        $
        5,503,867Service cost
        
        
        241,382
        
        
        235,525Interest cost
        
        
        327,841
        
        
        309,600Actuarial (gain) loss
        
        
        (286,785
        )
        
        24,874Benefit payments
        
        
        (252,771
        )
        
        (252,771
        )Projected benefit obligation at end of year
        
        $
        5,850,762
        
        $
        5,821,095




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



2007
        
        2006Fair value of plan assets at beginning of year
        
        $
        4,583,683
        
        $
        4,155,717Contributions by the Trust
        
        
        269,540
        
        
        290,024Actual return on plan assets
        
        
        271,246
        
        
        390,713Benefit payments
        
        
        (252,771
        )
        
        (252,771
        )Fair value of plan assets at end of year
        
        $
        4,871,698
        
        $
        4,583,683




The following table sets forth the plans funded status and amounts recognized in the balance sheets shown as liability for pension benefits as of December 31:



2007
        
        2006Accumulated benefit obligation at end of year
        
        $
        4,329,575
        
        $
        4,198,608Effect of future compensation increases
        
        
        1,521,187
        
        
        1,622,487Projected benefit obligation at end of year
        
        
        5,850,762
        
        
        5,821,095Fair value of plan assets at end of year
        
        
        4,871,698
        
        
        4,583,683Unfunded status at end of year
        
        $
        979,064
        
        $
        1,237,412






19

---

NOTE E  PENSION PLAN (continued)



The following table sets forth the amounts recognized in accumulated other comprehensive loss as of December 31:



2007
        
        2006Net loss
        
        $
        1,458,698
        
        $
        1,826,602Prior service cost
        
        
        122,281
        
        
        139,750Accumulated other comprehensive loss
        
        $
        1,580,979
        
        $
        1,966,352




The net loss and prior service cost amounts that will be amortized from accumulated other comprehensive loss into net periodic pension cost in 2008 are estimated to be $109,203 and $17,469, respectively.



The future benefit payments from the plan are estimated to be $248,599 for 2008, $239,221 for 2009, $229,249 for 2010, $218,696 for 2011, and $207,587 for 2012. The future benefit payments from the plan for the period 2013 through 2017, inclusive, are estimated to be $1,747,871, in aggregate. The 2008 contribution to the plan is estimated to approximate $270,000, representing the maximum tax-deductible contribution that is recommended pursuant to the Trusts annual actuarial valuation. However, the actual 2008 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 following table sets forth the plans weighted-average asset allocations by category as of December 31:



2007
        
        2006Equity securities
        
        
        50
        %
        
        52
        %Fixed income securities
        
        
        45
        %
        
        43
        %Cash (money market, accrued income)
        
        
        5
        %
        
        5
        %Total
        
        
        100
        %
        
        100
        %




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



20

---

NOTE F  INCOME TAXES



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




        The Trust must be exclusively engaged in the leasing of mineral properties and activities incidental thereto.





        The Trust must not acquire any additional property other than permissible acquisitions as provided by Section 646.




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



NOTE G  LEASE COMMITMENTS



The Trust leases office facilities in Saint Paul, Minnesota. These leases include one-hundred eighty day cancellation clauses, contain various renewal options and exclude any contingent rental provisions. Rental expense for these operating leases amounted to $61,823 in each of the years 2007, 2006 and 2005.



21

---

NOTE H  QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)



The following is a summary of quarterly results of operations (unaudited) for the years ended December 31, 2007 and 2006 (in thousands of dollars, except per share amounts):



Quarter EndedMarch 31
        
        June 30
        
        Sept. 30
        
        Dec. 312007Royalties
        
        $
        3,180
        
        $
        5,132
        
        $
        5,120
        
        $
        3,155Interest and other income
        
        
        172
        
        
        116
        
        
        142
        
        
        180Total Revenues
        
        
        3,352
        
        
        5,248
        
        
        5,262
        
        
        3,335Expenses
        
        
        709
        
        
        684
        
        
        642
        
        
        710Net income
        
        $
        2,643
        
        $
        4,564
        
        $
        4,620
        
        $
        2,625Earnings per share
        
        $
        1.76
        
        $
        3.04
        
        $
        3.08
        
        $
        1.752006Royalties
        
        $
        3,593
        
        $
        4,011
        
        $
        4,299
        
        $
        5,142Interest and other income
        
        
        118
        
        
        98
        
        
        112
        
        
        182Total Revenues
        
        
        3,711
        
        
        4,109
        
        
        4,411
        
        
        5,324Expenses
        
        
        738
        
        
        685
        
        
        678
        
        
        681Net income
        
        $
        2,973
        
        $
        3,424
        
        $
        3,733
        
        $
        4,643Earnings per share
        
        $
        1.98
        
        $
        2.28
        
        $
        2.49
        
        $
        3.10






22

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REPORT OF ERNST & YOUNG LLP,

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM,

ON AUDIT OF FINANCIAL STATEMENTS



The Trustees

Great Northern Iron Ore Properties



We have audited the accompanying balance sheets of Great Northern Iron Ore Properties as of December 31, 2007 and 2006, and the related statements of beneficiaries equity, income and cash flows for each of the three years in the period ended December 31, 2007. These financial statements are the responsibility of the Trusts management. Our responsibility is to express an opinion on these financial statements based on our audits.



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



In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Great Northern Iron Ore Properties as of December 31, 2007 and 2006, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2007, in conformity with U.S. generally accepted accounting principles.



We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the effectiveness of Great Northern Iron Ore Properties internal control over financial reporting as of December 31, 2007, based on criteria established in Internal Control  Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 1, 2008, expressed an unqualified opinion thereon.



/s/ Ernst & Young LLP



Minneapolis, Minnesota

February 1, 2008



23

---

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 internal control over financial reporting as of December 31, 2007, based on criteria established in Internal Control  Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO criteria). Great Northern Iron Ore Properties management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Managements Report On Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the effectiveness of Great Northern Iron Ore Properties internal control over financial reporting based on our audit.



We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, 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.



24

---

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, Great Northern Iron Ore Properties maintained, in all material respects, effective internal control over financial reporting as of December 31, 2007, based on the COSO criteria.



We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the 2007 financial statements of Great Northern Iron Ore Properties, and our report dated February 1, 2008, expressed an unqualified opinion thereon.



/s/ Ernst & Young LLP



Minneapolis, Minnesota

February 1, 2008



25

---

GREAT NORTHERN IRON ORE PROPERTIES



SUMMARY OF SHIPMENTS



Full Tons ShippedNo.
        
        Mine
        
        OwnershipInterest
        
        2007
        
        2006
        
        2005
        
        Total toJanuary 1,20081.
        
        Mahoning
        
        100%
        
        1,014,294
        
        1,199,898
        
        1,110,454
        
        159,171,9502.
        
        Ontario 100%/Stevenson Townsite
        
        100%
        
        
        
        58
        
        919,954
        
        11,740,0443.
        
        Ontario 50%
        
        50%
        
        1,200,775
        
        927,331
        
        625,041
        
        24,301,0044.
        
        L&W/Leetonia
        
        50%/~51%
        
        548,650
        
        1,165,912
        
        60,021
        
        10,540,2185.
        
        Section 18 (Miss.-Ent.)
        
        100%
        
        
        
        
        
        46,053
        
        27,997,1596.
        
        Mississippi #3 (Miss.-Ent.)
        
        100%
        
        801,717
        
        857,856
        
        576,157
        
        6,538,0597.
        
        Stevenson (Miss.-Ent.)
        
        100%
        
        154,856
        
        
        
        
        
        35,246,4188.
        
        Minntac
        
        100%
        
        4,416,137
        
        4,700,864
        
        5,335,518
        
        68,070,2488,136,429
        
        8,851,919
        
        8,673,198
        
        343,605,100Shipments from inactive mines and those exhausted, surrendered or sold prior to this year
        
        
        
        
        
        
        
        
        
        321,007,915TOTAL
        
        
        
        8,136,429
        
        8,851,919
        
        8,673,198
        
        664,613,015




No.
        
        Operating Interest1-4
        
        Cliffs Mining Company  Hibbing Taconite Company5-7
        
        U.S. Steel Corporation  Keewatin Taconite Company8
        
        U.S. Steel Corporation  Minntac






26

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NOTES

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NOTES

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GREAT NORTHERN IRON ORE PROPERTIESW-1290 FIRST NATIONAL BANK BUILDING332 MINNESOTA STREETSAINT PAUL, MINNESOTA 55101-1361
        
        FIRST CLASSU.S. POSTAGEPAIDPERMIT #43MINNEAPOLIS, MN








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