NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Other Current Liabilities Fair Value of Financial Instruments Capital Leases Sale-Leaseback Transaction The fair values of the interest rate swaps are included in “other liabilities” in the accompanying consolidated balance sheets. The $10,000 and $5,000 interest rate swaps expired during fiscal 2004. On September 30, 1999, the Company sold certain retail store leasehold improvements to an unrelated third party and leased them back for a period of seven years. This transaction is being accounted for as a financing arrangement. In 2004, the Company exercised the right to purchase the leasehold improvements at September 30, 2005. In order to exercise this right, the Company’s lease obligation increased by $200. The total amount of the Included in property, plant and equipment at January 29, 2005 and January 31, 2004 are leased furniture and fixtures and transportation vehicles, excluding sale- leaseback assets, with a cost of $4,465 and $5,641, respectively. Accumulated depreciation on these assets totaled $2,964 and $3,370 at January 29, 2005 and January 31, 2004, respectively. Other current liabilities as of January 29, 2005  and January 31, 2004 consist of accrued expenses for  the following: lease obligation, including this $200, at January 29, 2005 was $11,735. The lease agreement includes financial covenants that are not more restrictive than those of existing loan agreements. As part of the transaction, the Company received proceeds of $20,880, net of financing costs, and an $8,120 11% note receivable, which matures in September 2005 and is included in “other assets, net.” The future minimum lease payments related to the capital lease obligation are included in the schedule above. The carrying values of cash and cash equivalents, short-term investments, prepaid expenses, other current assets, accounts payable and other current liabilities approximate fair value because of the short maturity of these instruments. The carrying values of other liabilities, excluding interest rate swaps, approximate fair value because they are recorded using discounted future cash flows or quoted market rates. The carrying value of the Company’s variable-rate and fixed-rate long-term debt approximates its fair value. The fair value is estimated by discounting the future cash flows of each instrument at rates offered for similar debt instruments of comparable maturities. It is not practicable to estimate the fair value of our outstanding commitments for letters of credit and surety bonds without unreasonable cost. The fair value of the interest rate swaps (see Note 6) are the estimated amounts the Company would pay to terminate the agreements as of the reporting date. The fair value of the liabilities associated with interest rate swaps at January 29, 2005 and January 31, 2004, are as follows: The present value of future minimum capital lease payments as of January 29, 2005 is as follows: 2005 $13,081  2006 279  2007 183  2008 115  2009 51  Total minimum lease payments 13,709  Less: amount representing interest (at an average rate of approximately 10.9%) 963  Present value of net minimum capital lease payments 12,746  Less current installments of obligations under  capital leases 12,212  Obligations under capital leases, excluding current installments $ 534  36 DOLLAR TREE STORES, INC. • 2004 ANNUAL REPORT January 29, January 31, 2005  2004  $25,000 interest rate swap $ 655 $1,767  $19,000 interest rate swap 893 1,687  $10,000 interest rate swap — 183  $5,000 interest rate swap — 81  $1,548  $3,718  January 29, January 31, 2005 2004 Compensation and benefits $ 23,384 $25,435  Taxes (other than income taxes) 11,992 10,450  Insurance 29,112 25,398  Other 40,791 28,676  Total other current liabilities $105,279 $89,959 