# EXHIBIT 13  ANNUAL REPORT TO CERTIFICATE HOLDERS

# GREAT NORTHERN IRON
ORE PROPERTIES

# __________________________

# NINETY-SEVENTH ANNUAL
REPORT OF THE TRUSTEES TO CERTIFICATE HOLDERS

# FOR YEAR ENDED
DECEMBER 31, 2003



---

GREAT NORTHERN IRON ORE
PROPERTIESW-1290 First National Bank Building
332 Minnesota Street Saint Paul,
Minnesota 55101-1361

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

__________________

TRUSTEES
     OFFICERSJOSEPH S. MICALLEF
     JOSEPH S. MICALLEFPresident of the Trustees
     Chief Executive OfficerROGER W. STAEHLE*
     THOMAS A. JANOCHOSKIAdjunct Professor
     Vice President and SecretaryUniversity of Minnesota
     Chief Financial OfficerROBERT A. STEIN*
     ROGER P. JOHNSONExecutive Director
     Manager of MinesAmerican Bar Association
     Chief EngineerJOHN H. ROE, III*Chairman of the BoardBemis Company, Inc.


*Audit Committee

_________________

# 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 31
|--------------------------------------------- | ----------------------
|
|Shipments from our mines (tons)               |                       
|Royalty income                                |                       
|Other income                                  |                       
|Net income                                    |                       
|Total assets                                  |                       
|Average shares outstanding                    |                       
|Earnings per share, based on weighted-average |                       
|shares outstanding during the year            |                       
|Declared distributions per share              |                       

________________________________________

|(1)  $1.50 pd 4/30/03; $1.60 pd 7/31/03; $1.70 pd 10/31/03; $1.70 pd 1/30/04
(2)  $1.10 pd 4/30/02; $1.40 pd 7/31/02; $1.40 pd 10/31/02; $1.50 pd 1/31/03
(3)  $1.40 pd 4/30/01; $1.50 pd 7/31/01; $1.50 pd 10/31/01; $1.60 pd 1/31/02
(4)  $1.10 pd 4/28/00; $1.50 pd 7/31/00; $1.80 pd 10/31/00; $2.40 pd 1/31/01
(5)  $1.40 pd 4/30/99; $1.50 pd 7/30/99; $1.60 pd 10/29/99; $1.60 pd 1/31/00
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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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
northern Minnesota. With the properties and offices all located in Minnesota, the Trust
is under the jurisdiction of the Ramsey County District Court in St. Paul, Minnesota.

The terms of the Great Northern Iron
Ore Properties Trust Agreement state that the Trust shall continue for twenty years after
the death of the last surviving of eighteen persons named therein. 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 (as explained in Note D of the Financial Statements) 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.

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

3

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leases have minimum royalty provisions
that require payment to the Trust for holding the leasehold interest. The leases are
generally very long-term in nature, and while they periodically are amended at the
request of a lessee, the Trust must adhere to the provisions throughout the term of the
lease.

Pursuant to a Court Order in 1988,
the Trustees filed an election under Section 646 of the Internal Revenue Code with the
Internal Revenue Service that allowed the Trust to be taxed as a grantor trust versus a
corporation. Accordingly, certificate holders (shareholders) are taxed on their allocable
share of the Trusts income whether or not the income is distributed.

Results of Operations: Royalty
income for 2003 was greater than that of 2002 primarily due to increased tonnage
mined from Trust lands. Royalty income for 2002 was less than that of 2001
primarily due to credit for previously paid minimum royalties being applied to taconite
production in 2002. Other income for 2003 was less than that of 2002, which
was less than that of 2001, mainly due to reduced yields on our funds held for
investment. Net income for 2003 was greater than that of 2002 primarily due
to increased Royalty income, offset in part by an increase in expenses caused mainly by
additional pension costs, Trustee compensation and shareholder relations expenditures.
Net income for 2002 was less than that of 2001 primarily due to reduced
Royalty income and Other income, as well as higher pension costs.

Liquidity: In
the interest of preservation of principal of Court-approved reserves and guided
by the restrictive provisions of Section 646 of the Tax Reform Act of 1986, as
amended, monies are invested primarily in United States Treasury securities with
maturity dates not to exceed three years and, along with cash flows from
operations, are deemed adequate to meet currently foreseeable liquidity needs.
The only contractual obligations are an operating lease for office facilities
(see Note G of the Financial Statements) and deferred compensation listed as
Noncurrent Liabilities in the Balance Sheet, both deemed to have a minimal
effect on future liquidity.

Critical Accounting
Policies: 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. Many of the leases provide for
escalation or de-escalation which, for the most part, is based on independent
Producer Price Indices as published by the Bureau of Labor Statistics. In
addition, a number of the Trusts leases have minimum royalty provisions
that require the lessee to pay the Trust a payment for holding the leasehold
interest, regardless of production. These minimum royalties can accumulate and
do provide the mining companies the ability to offset excess royalties (over the
minimum royalty requirements) on future taconite production. Minimum royalties,
if not recovered by the termination of the lease, are forfeitable. Therefore,
should a lease terminate, no minimum royalties will be returned to the lessee.

Pension Plan
Valuations are based on a number of assumptions used to determine the
benefit obligation and asset valuation. These assumptions are evaluated

4

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annually by management in
conjunction with outside actuaries. Assumptions affecting the pension plan valuations,
which include the discount rate, compensation increase level and expected long-term rate
of return, among other items, are not expected to have a significant impact on the Trusts
financial costs and cash flow. Please refer to Note E of the Financial Statements for
additional pension plan information.

The Principal Charges
account represents a first and prior lien of certificate holders on any
property transferable to the reversioner at the end of the Trust and reflects an
allocation of beneficiaries equity between the certificate holders and the
reversioner. This Court-ordered account is neither an asset nor a liability of
the Trust. Rather, this account maintains and represents a balance which will be
payable to the certificate holders of record from the reversioner at the end of
the Trust. The account balance, as stated in Note D of the Financial Statements,
primarily represents the costs of acquiring homes and surface lands in
accordance with provisions of a lease with United States Steel Corporation. This
account balance, which may increase or decrease, will be added to the cash
distributable to the certificate holders of record at the termination of the
Trust.

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

Lessees
(customers) of the Trust primarily include the Minntac and
Keewatin Taconite plants, owned and operated by United States Steel
Corporation, and the Hibbing Taconite plant, owned by International
Steel Group, Cleveland Cliffs Inc. and Stelco, and operated by Cleveland Cliffs
Inc. Because the Trusts revenues are primarily dependent upon a limited
number of customers, there are associated inherent risks resulting therefrom.
While the steel and taconite industries have gone through a period of
restructuring and consolidation, any significant 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.

Market
demand for steel, and correspondingly taconite, could also affect the
Trusts financial results. Other related factors, however, include our
lessees operating levels, ore body quality and geological characteristics,
proximity of the lands, extreme weather conditions and labor contracts at the
mines. The only pertinent labor contract that expires within the year (July 31,
2004) pertains to the employees at the Hibbing Taconite plant. Although no work
stoppage is anticipated, this contract negotiation remains an uncertainty.

Income tax provision
compliance with Section 646, as explained in Note F of the Financial
Statements, is integral to the level of distributions paid to the certificate

5

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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 as distributions. It is the Trustees opinion that the
Trust has remained in compliance with the provisions of Section 646 since its
election.

The outlook is that 2004 is expected to be another good year for the
Trust, but we do not think the Trust will achieve the earnings and record
production levels it attained in 2003.

6

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Letter to Certificate Holders:

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

During
2003, the major source of income to the Trust was royalty derived from taconite
production and minimum royalties. Certain leases provide the mining companies the ability
to offset excess royalties due on future production, if any and when mined, against
minimum royalties paid in prior periods. Accumulated minimum royalties amounted to
$3,874,635 on December 31, 2003. A Summary of Shipments is tabulated on the last page of
this report.

The
Trustees declared four quarterly distributions in 2003 totaling $6.50 per share. The
first, in the amount of $1.50 per share, was paid on April 30, 2003 to certificate
holders of record on March 31, 2003; the second, in the amount of $1.60 per share, was
paid on July 31, 2003 to certificate holders of record on June 30, 2003; the third, in
the amount of $1.70 per share, was paid on October 31, 2003 to certificate holders of
record on September 30, 2003; and the fourth, in the amount of $1.70 per share, was paid
on January 30, 2004 to certificate holders of record on December 31, 2003.

The
Trustees declared four quarterly distributions in 2002 totaling $5.40 per share. The
first, in the amount of $1.10 per share, was paid on April 30, 2002 to certificate
holders of record on March 28, 2002; the second, in the amount of $1.40 per share, was
paid on July 31, 2002 to certificate holders of record on June 28, 2002; the third, in
the amount of $1.40 per share, was paid on October 31, 2002 to certificate holders of
record on September 30, 2002; and the fourth, in the amount of $1.50 per share, was paid
on January 31, 2003 to certificate holders of record on December 31, 2002.

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 2004
to certificate holders of record on March 31, 2004.

Shares
of beneficial interest in the Trust are traded on the New York Stock Exchange under the
ticker symbol GNI. There were 1,739 certificate holders of record on December
31, 2003. The high and low prices for the quarterly periods commencing January 1, 2002
through December 31, 2003 were as follows:

|       | 2003 |  | 2002 |      
|------ | ---- |  | ---- | -----
|
|First  |      |  | $    | 72.50
|Second |      |  |      | 80.75
|Third  |      |  |      | 87.25
|Fourth |      |  |      | 97.67

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The
following is a summary of quarterly results of operations (unaudited) for the years ended
December 31, 2003 and 2002 (in thousands of dollars, except per share amounts):

|                          | Quarter Ended
|------------------------- | -------------
|
|2003Royalty income        |              
|Interest and other income |              
|                          |              
|Gross income              |              
|Expenses                  |              
|                          |              
|Net income                |              
|                          |              
|Earnings per share        |              
|                          |              
|2002Royalty income        |              
|Interest and other income |              
|                          |              
|Gross income              |              
|Expenses                  |              
|                          |              
|Net income                |              
|                          |              
|Earnings per share        |              
|                          |              

As
previously reported, Section 646 of the Tax Reform Act of 1986, as amended, provided a
special elective provision under which the Trust was allowed to convert from taxation as
a corporation to that of a grantor trust. Pursuant to an Order of the Ramsey County
District Court, the Trustees filed the Section 646 election with the Internal Revenue
Service on December 30, 1988. 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.

A
Tax Return Guide was mailed in January 2004 to all record date certificate
holders shown on our stock transfer agents records during 2003. This guide was
intended to assist the investor in addressing many of the issues that arise in reporting
the Trust operations for federal and state income tax purposes due to Section 646.

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

| | Respectfully submitted,                                                                                
| | -------------------------------------------------------------------------------------------------------
| | Joseph S. Micallef                Roger W. Staehle
Robert A. Stein                     John H. Roe, III

Saint Paul, Minnesota
February 26, 2004

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# GREAT NORTHERN IRON ORE PROPERTIES

# STATEMENTS OF INCOME

|                                | Year Ended December 31
|------------------------------- | ----------------------
|
|REVENUES                        |                       
|Royalties                       |                       
|Interest earned                 |                       
|Rent and other                  |                       
|                                |                       
|                                |                       
|EXPENSES                        |                       
|Royalties                       |                       
|Real estate and payroll taxes   |                       
|Inspection and care of property |                       
|Administrative and general      |                       
|Provision for depreciation and  |                       
|amortization                    |                       
|                                |                       
|                                |                       
|                                |                       
|NET INCOME                      |                       
|                                |                       
|EARNINGS PER SHARE              |                       
|                                |                       

# STATEMENTS OF BENEFICIARIES EQUITY

|                                       | Year Ended December 31
|-------------------------------------- | ----------------------
|
|Balance at beginning of year           |                       
|Net income for the year                |                       
|                                       |                       
|                                       |                       
|Deduct declaration of distributions on |                       
|shares of beneficial interest, per     |                       
|share: 2003  $6.50; 2002  $5.40;     |                       
|2001  $6.00                           |                       
|                                       |                       
|Balance at end of year                 |                       
|                                       |                       

See accompanying notes.

9

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# GREAT NORTHERN IRON ORE PROPERTIES

# BALANCE SHEETS

# ASSETS

|                                               | December 31
|---------------------------------------------- | -----------
|
|CURRENT ASSETS                                 |            
|Cash and cash equivalents                      |            
|United States Treasury securities (Note B)     |            
|Royalties receivable                           |            
|Prepaid expenses                               |            
|                                               |            
|TOTAL CURRENT ASSETS                           |            
|NONCURRENT ASSETS                              |            
|United States Treasury securities (Note B)     |            
|Prepaid pension expense (Note E)               |            
|                                               |            
|                                               |            
|PROPERTIES                                     |            
|Mineral lands (Notes B and C)                  |            
|Less allowances for depletion and amortization |            
|                                               |            
|                                               |            
|Building and equipment  at cost, less         |            
|allowances for accumulated depreciation        |            
|(2003  $193,279; 2002  $197,020)             |            
|                                               |            
|                                               |            
|                                               |            
|                                               |            
|                                               |            

# LIABILITIES AND BENEFICIARIES EQUITY

|CURRENT LIABILITIES                                 |  |  |   |            |  |   |            | 
|--------------------------------------------------- |  |  | - | ---------- |  | - | ---------- | 
|Accounts payable and accrued expenses               |  |  | $ | 94,656     |  | $ | 85,574     | 
|Distributions                                       |  |  |   | 2,550,000  |  |   | 2,250,000  | 
|                                                    |  |  |   |            |  |  
|TOTAL CURRENT LIABILITIES                           |  |  |   | 2,644,656  |  |   | 2,335,574  | 
|NONCURRENT LIABILITIES                              |  |  |   | 27,000     |  |   | 13,700     | 
|BENEFICIARIES EQUITY, including certificate        |  | 
|holders equity, represented by 1,500,000 shares of |  | 
|beneficial interest authorized and outstanding, and |  | 
|reversionary interest (Notes A and D)               |  |  |   | 14,741,933 |  |   | 14,524,389 | 
|                                                    |  |  |   |            |  |  
|                                                    |  |  | $ | 17,413,589 |  | $ | 16,873,663 | 
|                                                    |  |  |   |            |  |  

See accompanying notes.

10

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# GREAT NORTHERN IRON ORE PROPERTIES

# STATEMENTS OF CASH FLOWS

|                                            | Year Ended December 31
|------------------------------------------- | ----------------------
|
|OPERATING ACTIVITIES                        |                       
|Cash received from royalties and rents      |                       
|Cash paid to suppliers and employees        |                       
|Interest received                           |                       
|                                            |                       
|NET CASH PROVIDED BY                        |                       
|OPERATING ACTIVITIES                        |                       
|INVESTING ACTIVITIES                        |                       
|United States Treasury securities purchased |                       
|United States Treasury securities matured   |                       
|Net expenditures for equipment              |                       
|                                            |                       
|NET CASH (USED IN) PROVIDED BY              |                       
|INVESTING ACTIVITIES                        |                       
|FINANCING ACTIVITIES                        |                       
|Distributions paid                          |                       
|                                            |                       
|NET CASH USED IN                            |                       
|FINANCING ACTIVITIES                        |                       
|                                            |                       
|NET INCREASE (DECREASE) IN CASH             |                       
|AND CASH EQUIVALENTS                        |                       
|CASH AND CASH EQUIVALENTS                   |                       
|AT BEGINNING OF YEAR                        |                       
|                                            |                       
|CASH AND CASH EQUIVALENTS                   |                       
|AT END OF YEAR                              |                       
|                                            |                       
|RECONCILIATION OF NET INCOME TO NET         |                       
|CASH PROVIDED BY OPERATING ACTIVITIES       |                       
|Net income                                  |                       
|Adjustments to reconcile net income to net  |                       
|cash provided by operating activities:      |                       
|Depreciation and amortization               |                       
|Net decrease (increase) in assets:          |                       
|Accrued interest                            |                       
|Royalties receivable                        |                       
|Prepaid expenses                            |                       
|Net increase in liabilities:                |                       
|Accrued liabilities                         |                       
|                                            |                       
|NET CASH PROVIDED BY                        |                       
|OPERATING ACTIVITIES                        |                       
|                                            |                       

See accompanying notes.

11

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# GREAT NORTHERN IRON ORE PROPERTIES

# NOTES TO FINANCIAL STATEMENTS
December 31, 2003

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 lands owned by the Trust on the Mesabi Iron Range of
Minnesota. Royalty income is derived from taconite production and minimums. Royalty
income (which is not in direct ratio to tonnage shipped) from two significant operating
lessees was as follows: 2003  $9,048,000 and $2,714,000; 2002  $5,614,000 and
$3,398,000; and 2001  $6,422,000 and $3,157,000.

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
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 D) 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.

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

12

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

the District Court of Ramsey County,
Minnesota, for further instructions defining what is required in a particular case to
balance the interests of certificate holders and reversioner. Also, the Court, in effect,
held that the Trust is a conventional trust, rather than a business trust, and must
operate within the framework of well-established trust law.

By
a letter dated April 14, 2003, certificate holders of record as of March 3, 2003 and the
reversioner were notified of a Hearing on May 14, 2003 in Ramsey County Courthouse, Saint
Paul, Minnesota, for the purpose of settling and allowing the Trust accounts for the year
2002 and for the purpose of requesting a fee increase in the Presidents
compensation of $50,000 and an increase of the Presidents bonus of potentially
$15,000, effective January 1, 2003. By Court Order signed and dated May 14, 2003, the
2002 accounts were settled and allowed in all respects and the requested fee increases
for the President of the Trustees were granted, effective January 1, 2003. By previous
Orders, the Court settled and allowed the accounts of the Trustees for preceding years of
the Trust.

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

The
Trustees provided annual income tax information in January 2004 to certificate holders of
record with holdings on any of the four quarterly record dates during 2003. This
information included a:

| | Substitute Form 1099-MISC This form reported ones 2003 allocable share of income from the
Trust, distributions declared and any taxes withheld. (Foreign certificate
holders received a Form 1042S.)
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | Trust Supplemental
Statement This statement reported the number of units (shares) held
on any of the four quarterly record dates in 2003.
| | ------------------------------------------------------------------------------------------------------------------------------------------

| | 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.
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

13

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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 listed as noncurrent assets will mature in 2005 and 2006. Following
is an analysis of the securities as of December 31:

|                         | Current |  | Noncurrent
|------------------------ | ------- |  | ----------
|
|Aggregate fair value     |         |  | $         
|Gross unrealized holding |         | 
|gains                    |         |  |           
|Gross unrealized holding |         | 
|losses                   |         |  |           
|                         |         |  |           
|Amortized cost basis     |         |  |           
|Accrued interest         |         |  |           
|                         |         |  |           
|                         |         |  | $         
|                         |         |  |           

Mineral
Lands: Mineral lands, including surface lands, are carried at amounts which represent,
principally, either cost at acquisition or values on March 1, 1913. The value of the
merchantable ore deposits was established on March 1, 1913 for federal income tax
purposes. No value has been estimated or recorded for taconite deposits held on March 1,
1913 since they were not then thought to be merchantable. The cost of surface lands
acquired to facilitate mining operations was amortized (noncash expense) in the amount of
$208,200 for each of the years 2003, 2002 and 2001 (see Note C).

Royalty
Income: Royalties from mineral leases (with cancellation terms varying from six months to
one year) are taken into income as earned. Certain leases provide the mining companies
the ability to offset excess royalties due on future production, if any and when mined,
against minimum royalties paid in prior periods. Accumulated minimum royalties amounted
to $3,874,635 on December 31, 2003 and $5,508,228 on December 31, 2002.

Use
of Estimates: The preparation of financial statements in conformity with accounting
principles generally accepted in the United States 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 is determined by dividing net income for the period by the
number of weighted-average shares of beneficial

14

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NOTE B  SIGNIFICANT ACCOUNTING POLICIES (continued)

interest outstanding. Basic and
diluted weighted-average shares outstanding were 1,500,000 as of December 31, 2003, 2002
and 2001.

NOTE C  LAND ACQUISITION

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

NOTE D  PRINCIPAL CHARGES ACCOUNT

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

|                             | 2003 |  | 2002
|---------------------------- | ---- |  | ----
|Attorneys fees and expenses |      |  | $   
|Cost of surface lands        |      |  |     
|Cumulative shipment credits  |      |  |     
|Asset disposition credits    |      |  |     
|                             |      |  |     
|Principal Charges account    |      |  | $   
|                             |      |  |     

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.

15

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NOTE E  PENSION PLAN

The
Trust has a noncontributory defined benefit plan which covers all employees. The Trustees
are not eligible for pension benefits under the plan based on services as Trustees. A
summary of the components of net periodic pension cost (benefit), a noncash item, for
2003, 2002 and 2001 is as follows:

|                           | 2003 |  | 2002 |          | 2001
|-------------------------- | ---- |  | ---- | -------- | ----
|Service cost               |      |  | $    | 92,219   |     
|Interest cost              |      |  |      | 214,006  |     
|Expected return on assets  |      |  |      | (260,583 | )   
|Net amortization           |      |  |      | 38,648   |     
|                           |      |  |      |          |     
|Net pension cost (benefit) |      |  | $    | 84,290   |     
|                           |      |  |      |          |     

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

|                                            | 2003 |  | 2002
|------------------------------------------- | ---- |  | ----
|Discount rate for benefit obligation        |      |  |     
|Discount rate for net periodic pension cost |      |  |     
|Rate of compensation increase               |      |  |     
|Expected long-term return on plan assets    |      |  |     

The
determination of the expected long-term return on plan assets is based on historical
returns.

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

|                                            | 2003 |  | 2002
|------------------------------------------- | ---- |  | ----
|Projected benefit obligation at January 1   |      |  | $   
|Contributions                               |      |  |     
|Service cost                                |      |  |     
|Interest cost                               |      |  |     
|Actuarial (gain) loss                       |      |  |     
|Benefit payments                            |      |  |     
|                                            |      |  |     
|Projected benefit obligation at December 31 |      |  | $   
|                                            |      |  |     

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

|                                         | 2003 |  | 2002
|---------------------------------------- | ---- |  | ----
|Fair value of plan assets at January 1   |      |  | $   
|Contributions                            |      |  |     
|Actual return (loss) on plan assets      |      |  |     
|Benefit payments                         |      |  |     
|                                         |      |  |     
|Fair value of plan assets at December 31 |      |  | $   
|                                         |      |  |     

The
future benefit payments for the plan are estimated to be $258,504 for each of the years
from 2004 through 2008, inclusive, and for the period from 2009

16

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NOTE E  PENSION PLAN
(continued)

through 2013, inclusive, are
estimated to be $1,328,055 in aggregate. The next contribution to the plan is estimated
to be $186,266; however, said amount will be recalculated upon the completion of the plans
annual actuarial valuation performed as of the plans fiscal year-end March 31.

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

|                                                        | 2003 |  | 2002
|------------------------------------------------------- | ---- |  | ----
|Accumulated benefit obligation                          |      |  | $   
|Effect of future compensation increases                 |      |  |     
|                                                        |      |  |     
|Projected benefit obligation                            |      |  |     
|Fair value of plan assets                               |      |  |     
|                                                        |      |  |     
|Plan assets in excess of (less than) benefit obligation |      |  |     
|Unrecognized net loss                                   |      |  |     
|Unrecognized prior service cost                         |      |  |     
|                                                        |      |  |     
|Prepaid pension expense                                 |      |  | $   
|                                                        |      |  |     

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

|                                           | 2003 |  | 2002
|------------------------------------------ | ---- |  | ----
|Equity securities                          |      |  |     
|Debt securities                            |      |  |     
|Other (cash, money market, accrued income) |      |  |     
|                                           |      |  |     
|                                           |      |  |     
|                                           |      |  |     

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

NOTE F  INCOME TAXES

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

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

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

17

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NOTE F  INCOME TAXES
(continued)

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

NOTE G  LEASE COMMITMENTS

The
Trust leases office facilities in Saint Paul, Minnesota. These leases include various
renewal options and exclude any contingent rental provisions. Rental expense for these
operating leases amounted to $61,823, $61,823 and $60,455 for the years 2003, 2002 and
2001, respectively.

18

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# REPORT OF ERNST &YOUNG
LLP,

# INDEPENDENT AUDITORS

The Trustees Great Northern Iron Ore
Properties

We
have audited the accompanying balance sheets of Great Northern Iron Ore Properties as of
December 31, 2003 and 2002, and the related statements of income, beneficiaries equity
and cash flows for each of the three years in the period ended December 31, 2003. 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 auditing standards generally accepted in the
United States. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.

In
our opinion, the financial statements referred to above present fairly, in all material
respects, the financial position of Great Northern Iron Ore Properties at December 31,
2003 and 2002, and the results of its operations and its cash flows for each of the three
years in the period ended December 31, 2003, in conformity with accounting principles
generally accepted in the United States.

/s/ Ernst & Young LLP

Minneapolis, Minnesota
January 30, 2004

19

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# GREAT NORTHERN IRON
ORE PROPERTIES

# SUMMARY OF SHIPMENTS

|  |  |  | Full Tons Shipped                                                                        
|- |  |  | -----------------------------------------------------------------------------------------
|
|1 |  |  | Mahoning                                                                                 
|2 |  |  | Ontario 100%                                                                             
|3 |  |  | Ontario 50%                                                                              
|4 |  |  | Section 18                                                                               
|5 |  |  | Russell Annex                                                                            
|6 |  |  | Mississippi #3                                                                           
|7 |  |  | Minntac                                                                                  
|  |  |  |                                                                                          
|  |  |  |                                                                                          
|  |  |  | Shipments from inactive mines and those  exhausted, surrenderedor sold prior to this year
|  |  |  |                                                                                          
|  |  |  | TOTAL                                                                                    
|  |  |  |                                                                                          

|No. |  | Operating Interest                                                                          
|--- |  | --------------------------------------------------------------------------------------------
|1-3 |  | Hibbing Taconite Company                                                                    
|4-6 |  | National Steel Corporation up until May 20, 2003; thereafter United States Steel Corporation
|7   |  | United States Steel Corporation                                                             

20

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|GREAT NORTHERN IRON ORE PROPERTIES W-1290 FIRST NATIONAL BANK BUILDING 332 MINNESOTA STREET SAINT PAUL, MINNESOTA 55101-1361 |  | FIRST CLASS U.S. POSTAGE PAIDPERMIT #43 MINNEAPOLIS, MN
|---------------------------------------------------------------------------------------------------------------------------- |  | -------------------------------------------------------

FIRST CLASS MAIL

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