Exhibit 13

Annual Report to Certificate Holders

GREAT NORTHERN IRON
ORE PROPERTIES

__________________

One Hundred Fourth
Annual Report of the Trustees
to Certificate Holders

for
Year Ended December 31, 2010

GREAT NORTHERN IRON ORE PROPERTIES

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

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

www.gniop.com

__________________

__________________

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

GREAT NORTHERN IRON ORE PROPERTIES

SUMMARY OF OPERATIONS

__________________

(1)  $2.00 pd 4/30/10; $2.75 pd 7/30/10; $3.75 pd 10/29/10; $3.75 pd 1/31/11

(2)  $1.80 pd 4/30/09; $1.80 pd 7/31/09; $1.80 pd 10/30/09; $2.60 pd 1/29/10

(3)  $2.00 pd 4/30/08; $2.10 pd 7/31/08; $3.10 pd 10/31/08; $4.50 pd 1/30/09

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

(5)  $2.00 pd 4/28/06; $2.20 pd 7/31/06; $2.80 pd 10/31/06; $3.30 pd 1/31/07

Trustees’ & Management’s Discussion and Analysis of Financial Condition
and Results of Operations

Overview:  Great Northern Iron Ore Properties (the Trust) is a conventional nonvoting trust organized under the laws of the State of Michigan pursuant to a Trust Agreement dated December 7, 1906.  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.

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

During 2010, the major source of income to the Trust was royalty income derived from taconite production and minimum royalties.  Certain leases provide the steel and mining companies the ability to offset royalties, over the minimum royalty requirements, due on future taconite production, if any and when mined, against unabsorbed minimum royalties paid in prior periods.  A “Summary of Shipments” is tabulated on the last page of this report.

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 Company) 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, 2010, the net monies were approximately $7,486,000 and the Principal Charges account balance was approximately $4,840,000, resulting in a final distribution payable of approximately $12,326,000, or about $8.22 per share.  After payment of this final 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 primarily involved with the leasing and care of its properties.  The management of the Trust is vested in the Trustees.  The Trustees have no duty to sell property unless required to do so to serve both the term beneficiaries and the reversionary beneficiary impartially; and, if the need arises, the Trustees may petition the Court for further instructions defining what is required in a particular case to balance the interests of the certificate holders and reversioner.  The major source of income to the Trust is earned royalties derived from taconite production from the Trust’s properties by the Trust’s lessees (customers) and minimum royalties, pursuant to mineral leases.  “Earned royalties” are based on the taconite tonnage 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 2011 to registered certificate holders of record with holdings on any of the four quarterly record dates during 2010.  This information included the following:

Substitute Form 1099-MISC — This form reported the registered certificate holder’s 2010 allocable share of income from the Trust, distributions declared and any taxes withheld. (Foreign registered certificate holders received a Form 1042-S.)

Trust Supplemental Statement — This statement reported the number of units (shares) held by the registered certificate holder on any of the four quarterly record dates in 2010.

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. 

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 1,053 registered certificate holders of record on December 31, 2010.  The high and low prices for the quarterly periods commencing January 1, 2009, through December 31, 2010, inclusive, were as follows:

Results of Operations:  Royalties for 2010 were greater than those of 2009 primarily due to increased taconite mining on our lands and an overall higher average earned royalty rate caused by escalation of producer price indices.  Royalties for 2009 were less than those of 2008 primarily due to reduced taconite mining on our lands and an overall lower average earned royalty rate caused by de-escalation of producer price indices, offset in part by higher net minimum royalties.  Other income for 2010 was less than that of 2009 primarily due to reduced yields on our investments.  Other income for 2009 was less than that of 2008 primarily due to the receipt of fees in 2008 associated with an agreement pertaining to the new Essar Steel Minnesota, LLC taconite mining and steelmaking facility to be constructed on the Mesabi Iron Range.  Expenses for 2010 were comparable to those of 2009, while Expenses for 2009 were greater than those of 2008 primarily due to a higher pension expense (see Note E to the Financial Statements).  Net income for 2010 was greater than that of 2009 primarily due to increased Royalties (as explained above).  Net income for 2009 was less than that of 2008 primarily due to decreased Royalties (as explained above).  The Liability for pension benefits as of December 31, 2010, was less than that as of December 31, 2009, which was less than that as of December 31, 2008, primarily due to improved returns on pension plan assets.  Please refer to Note E to the Financial Statements for additional pension plan information.

The Trustees declared four quarterly distributions in 2010 totaling $12.25 per share.  The first, in the amount of $2.00 per share, was paid on April 30, 2010, to certificate holders of record on March 31, 2010; the second, in the amount of $2.75 per share, was paid on July 30, 2010, to certificate holders of record on June 30, 2010; the third, in the amount of $3.75 per share, was paid on October 29, 2010, to certificate holders of record on September 30, 2010; and the fourth, in the amount of $3.75 per share, was paid on January 31, 2011, to certificate holders of record on December 31, 2010.

The Trustees declared four quarterly distributions in 2009 totaling $8.00 per share.  The first, in the amount of $1.80 per share, was paid on April 30, 2009, to certificate holders of record on March 31, 2009; the second, in the amount of $1.80 per share, was paid on July 31, 2009, to certificate holders of record on June 30, 2009; the third, in the amount of $1.80 per share, was paid on October 30, 2009, to certificate holders of record on September 30, 2009; and the fourth, in the amount of $2.60 per share, was paid on January 29, 2010, to certificate holders of record on December 31, 2009.

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 2011 to certificate holders of record on March 31, 2011.

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, 2010:

Critical Accounting Policies:  Royalties from the Trust’s mineral leases are taken into income as earned.  Tonnage extracted is agreed upon between Trust and lessee engineers based on various engineering methods, which include truck counts, volumetric surveys and blast pattern estimates.  Many of the leases provide for escalation or de-escalation that, for the most part, is based on independent producer price indices as published by the U.S. Department of Labor — Bureau of Labor Statistics.  In addition, a number of the Trust’s leases have minimum royalty provisions that require the lessee to remit to the Trust current year rental or minimum royalty income for holding the leasehold interest, regardless of production.  These minimum royalties can accumulate and do allow the steel and mining companies the ability to offset royalties, over the minimum royalty requirements, due on future taconite production.  Minimum royalties, if not recovered before the termination of the lease, are forfeitable and are not refundable under any circumstance. 

Pension Plan Valuations are based on a number of assumptions used to determine the benefit obligation and net periodic pension cost.  These assumptions are evaluated annually by the Trustees and management in conjunction with outside actuaries.  Assumptions affecting the pension plan valuations include the discount rate, compensation increase level and expected long-term rate of return on plan assets.  These assumptions reflect and incorporate the expected cash flow payouts of the pension plan given the determinate time frame to the termination of the Trust.  Please refer to Note E to the Financial Statements for additional pension plan information.

The Principal Charges account represents a first and prior lien of certificate holders on any property transferable to the reversioner 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.

Recently Adopted Accounting Standards:

Fair Value Measurements: In January 2010, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2010-06, “Fair Value Measurements and Disclosures (Topic 820) - Improving Disclosures about Fair Value Measurements.”  This ASU requires some new disclosures and clarifies some existing disclosure requirements about fair value measurements as set forth in Accounting Standards Codification (“ASC”) Subtopic 820-10.  The FASB’s objective is to improve these disclosures and, thus, increase the transparency in financial reporting.  The Trust adopted the provisions of ASU No. 2010-06, effective January 1, 2010; however, the adoption of this ASU had no impact on the Trust’s financial statements.

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

The Trust’s lessees (customers) primarily include Minntac (“Minntac”) and Keetac (“Keetac”), both owned and operated by U.S. Steel Corporation; Hibbing Taconite Company (“Hibtac”), owned by Arcelor-Mittal, Cliffs Natural Resources Inc. and U.S. Steel Corporation, and operated by Cliffs Mining Company; and Essar Steel Minnesota, LLC (“ESM” or “MSI”), owned by Essar Steel Holdings Ltd., a subsidiary of Essar Global Ltd., with a new taconite mining and steelmaking facility to be constructed by ESM over the next few years.  Because the Trust’s revenues are primarily dependent upon a limited number of customers, any significant adverse event at any of the Trust’s primary lessees, or the loss of any of the Trust’s primary lessees, could materially adversely affect the Trust’s future financial results.

A decline in market demand for steel, and correspondingly taconite, could adversely affect the Trust’s financial results.  However, other related and sometimes compensating factors include the Trust’s lessees’ operating levels, minimum royalties, ore body quality, metallurgical and geological characteristics, and 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, 2012.  Additionally, over the past few years, the domestic steel and taconite industries have also been influenced by the global markets.  As a result, future demand for domestic steel and taconite, which is now part of the global markets, is uncertain.  While any cut in production by any of our lessees can adversely affect the Trust, continued receipt of minimum royalties do mitigate this effect, in part.

Royalty rates can fluctuate due to the escalation and de-escalation of producer price indices as a result of provisions present in many of the Trust’s leases.  To the extent these indices decline (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 the Trust has remained in compliance with the provisions of Section 646 since its election in 1988.

The outlook for 2011 is dependent, in part, upon the economy’s continued overall recovery.  Barring any unexpected production cutbacks from our lessees’ mining plans in 2011, we currently anticipate the results for the year 2011 to be comparable to those of 2010. 

Respectfully submitted,

MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER
FINANCIAL REPORTING

The management of Great Northern Iron Ore Properties (the 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, 2010.  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, 2010, 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 23 and 24.

GREAT NORTHERN IRON ORE PROPERTIES

BALANCE SHEETS

See accompanying notes.

GREAT NORTHERN IRON ORE PROPERTIES

STATEMENTS OF BENEFICIARIES’ EQUITY

See accompanying notes.

GREAT NORTHERN IRON ORE PROPERTIES

STATEMENTS OF INCOME

See accompanying notes.

GREAT NORTHERN IRON ORE PROPERTIES

STATEMENTS OF CASH FLOWS

See accompanying notes.

GREAT NORTHERN IRON ORE PROPERTIES

NOTES TO FINANCIAL STATEMENTS
December 31, 2010

NOTE A — Business And Termination of the Trust and Legal Proceedings

Great Northern Iron Ore Properties (the 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: 2010 — $10,073,000 and $9,167,000; 2009 — $7,677,000 and $6,569,000; and 2008 — $11,384,000 and $8,443,000.

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 Company) 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, 2010, the net monies were approximately $7,486,000 and the Principal Charges account balance was approximately $4,840,000, resulting in a final distribution payable of approximately $12,326,000, or about $8.22 per share.  After payment of this final 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.

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

NOTE A — Business and Termination of the Trust and Legal Proceedings (continued)

exercise of those powers by the legal duty imposed by well-established law of trusts to serve the interests of both the term beneficiaries and the reversionary beneficiary with impartiality.  Thus, the Trustees have no duty to exercise the powers of sale and distribution unless required to do so to serve both term and reversionary interests; and, if the need arises, the Trustees may petition the District Court of Ramsey County, Saint Paul, Minnesota, for further instructions defining what is required in a particular case to balance the interests of certificate holders and reversioner.  Also, the 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 March 24, 2010, certificate holders of record as of December 31, 2009, and the reversioner were notified of a hearing on May 5, 2010, in Ramsey County District Court, Saint Paul, Minnesota, for the purpose of settling and allowing the Trust accounts for the year 2009.  By Court Order signed and dated May 5, 2010, the 2009 accounts were settled and allowed in all respects. By previous Orders, the Court settled and allowed the accounts of the Trustees for preceding years of the Trust.

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:  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.  The aggregate fair values listed in the table below are based on quoted prices in active markets for identical assets (Level 1).  Securities recognized as noncurrent assets will mature in 2012.  Following is an analysis of the securities as of December 31:

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, net of accumulated amortization.  The value of the merchantable ore deposits was established on March 1, 1913, for federal income tax purposes.  No value has been estimated or recorded for taconite deposits held on March 1, 1913, since they were not then thought to be merchantable; however, they presently represent all the mining activity on the Trust’s properties.  There presently is no cost depletion, as no natural ore mining from mineral lands is occurring.  Given that the focus of the mining industry is essentially now taconite mining versus natural ore mining, the asset class “Mineral and surface lands” was reevaluated and, beginning in 2008, the cost of the mineral lands is being amortized on a straight-line basis over the remaining term of the Trust.  The straight-line method of amortization bears close resemblance to the units-of-production method over the remaining term of the Trust and, accordingly, is deemed a reasonable, systematic and rational method to associate expense with the revenues generated from taconite mining.  Mineral land amortization amounted to $294,000 in each of the years 2010, 2009 and 2008.  Nonmineral lands are also included in this category; however, they represent negligible amounts.

In addition, surface lands are acquired from time to time to facilitate mining operations (see Note C).  These surface lands are being amortized on a straight-line basis over the remaining term of the Trust based on the values as of the beginning of each fiscal year.  Surface lands remaining to be amortized amounted to $1,533,635, $1,754,327 and $1,598,627 as of January 1, 2010, 2009 and 2008, respectively.  Surface land amortization amounted to $291,600, $280,692 and $220,500 for the years 2010, 2009 and 2008, respectively.

Royalties:  Royalties from mineral leases (with cancellation terms varying from six months to one year) are taken into income as earned.  Earned royalties are based on the taconite tonnage extracted (also referred to as produced or shipped) from the Trust’s lands applied to a royalty rate as defined in the various specific and confidential operating agreements (also referred to as leases).  Minimum royalties, if required, are current year’s rental or minimum royalty income from the lessees to the Trust for holding the leasehold interest.  Certain leases provide the steel and mining companies the ability to offset royalties, over the minimum royalty requirements, due on future taconite production, if any and when mined, against unabsorbed minimum royalties paid in prior periods.  Accumulated minimum royalties in excess of tons extracted to date amounted to $5,070,772 on December 31, 2010, and $3,356,736 on December 31, 2009.

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, 2010, 2009 and 2008.

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, in exchange for royalty payments, to reimburse the lessee for a portion of its cost of acquisition of surface lands overlying the leased mineral deposits, which surface lands are then conveyed to the Trustees (see Note B).  The costs of surface lands acquired to facilitate the mining operations amounted to $0, $60,000 and $376,200 for the years 2010, 2009 and 2008, 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:

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

NOTE 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 their services as Trustees.  The pension accounting guidance requires employers with pension plans to recognize the funded (or unfunded) status of a plan on the face of the balance sheet.  The funded status is determined by comparing the pension plan assets at fair value to the projected (future) benefit obligation.

A summary of the components of net periodic pension cost and other amounts recognized in other comprehensive income for 2010, 2009 and 2008 is as follows:

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:

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 Long-term Corporate Aa Bond Yield.  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.

NOTE E — Pension Plan (continued)

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