NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) NOTE 2 – BALANCE SHEET COMPONENTS Intangibles, Net  Goodwill Property, Plant and Equipment, Net Non-Competition Agreements Favorable Lease Rights DOLLAR TREE STORES, INC. • 2004 ANNUAL REPORT 35 In 2004 and 2002, the Company acquired favorable lease rights for operating leases for retail locations from third parties. In addition, in 2003, the Company acquired favorable lease rights in its acquisition of Greenbacks, Inc. (see Note 10). The Company’s favorable lease rights are amortized on a straight-line basis to rent expense over the remaining initial lease terms, which expire at various The Company issued stock options to certain former shareholders of an acquired entity in exchange for non- competition agreements and a consulting agreement. These assets are being amortized over the legal term of the individual agreements. A portion of these agreements was amortized over five years and as of January 29, 2005, these are fully amortized. One remaining agreement is being amortized over a 10-year period. In addition, in 2003, the Company entered into non-competition agreements with former executives of Greenbacks, Inc. which are being amortized over five years (see Note 10). Property, plant and equipment, net, as of January 29, 2005 and January 31, 2004 consists of the following: In accordance with SFAS No. 142, goodwill is no longer being amortized, but is tested at least annually for impairment. In addition, goodwill will be tested on an interim basis if an event or circumstance indicates that it is more likely than not that an impairment loss has been incurred. The Company performed its annual impairment testing in November 2004 and determined that no impairment loss existed. Intangibles, net, as of January 29, 2005 and January 31, 2004 consist of the following: computed by dividing net income by the weighted average number of shares and dilutive potential shares outstanding. Dilutive potential shares include all outstanding stock options and unvested restricted stock after applying the treasury stock method. dates through 2016. Amortization expense related to the non-competition agreements and favorable lease rights was $1,551, $1,300, $40 and $746 for the years ended January 29, 2005 and January 31, 2004, the one-month period ended February 1, 2003 and the year ended December 31, 2002, respectively. Estimated annual amortization expense for the next five years follows: 2005 - $2,617; 2006 - $2,508; 2007 - $2,470; 2008 - $1,253; and 2009 - $477. January 29, January 31, 2005 2004  Non-competition agreements $ 6,398 $ 6,398 Accumulated amortization (3,475) (2,685) Non-competition agreements, net 2,923 3,713 Favorable lease rights 9,034 2,189 Accumulated amortization (1,567) (806) Favorable lease rights, net 7,467 1,383 Goodwill 130,271 130,271 Accumulated amortization (11,629) (11,629) Goodwill, net 118,642 118,642 Total intangibles, net $ 129,032 $123,738 January 29, January 31, 2005 2004  Land $ 28,867 $ 16,807 Buildings 171,980 105,558  Improvements 348,561 288,189  Furniture, fixtures and equipment 549,051 441,259  Transportation vehicles 1,868 3,492  Construction in progress 20,352 107,703  Total property, plant and  equipment 1,120,679 963,008  Less: accumulated depreciation  and amortization 435,293 328,581  Total property, plant and  equipment, net $ 685,386 $634,427 