DREAMWORKSANIMATIONSKG,INC. NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS—(Continued) 4. Film Inventories Thefollowing is an analysis of film inventories (in thousands): December31, 2003 2004 In development: Animated feature films ....................................... $31,633 $ 42,531 In production: Animated feature films ....................................... 299,213 254,940 Television series ............................................ 10,414 — In release, (net of amortization): Animated feature films ....................................... 86,203 221,048 Television series ............................................ — 1,407 Total film inventories ............................................ $427,463 $519,926 The Company anticipates that 94% of “in release” inventory as of December 31, 2004 will be amortized over the next three years. The Company further anticipates that 58% of “in release” inventory will be amortized during 2005. Interest capitalized to film inventories during the years ended December 31, 2003 and 2004 totaled $6.9 million, and $7.1 million, respectively. 5. Property, Plant and Equipment Property, plant and equipment are comprised of the following (in thousands): December31, 2003 2004 Leasehold improvements .......................................... $24,596 $ 28,592 Furniture and equipment .......................................... 7,934 8,871 Computer hardware and software ................................... 4,373 4,506 Equipment acquired under capital leases ............................. 6,982 6,982 Landandbuildings .............................................. 73,000 73,000 Total property, plant and equipment ................................. 116,885 121,951 Accumulated depreciation and amortization ........................... (27,108) (35,954) Property, plant and equipment, net .................................. $89,777 $ 85,997 For the years ended December 31, 2002, 2003, and 2004 the Company recorded depreciation and amortization expense (other than film amortization) of $3.1 million, $3.6 million, and $5.8 million, respectively in selling, general and administrative expenses. Accumulated depreciation and amortization includes depreciation of assets acquired under capital leases. On December 31, 2003, the Company adopted Interpretation 46, as revised, and has consolidated the special-purpose entity that acquired the Glendale animation campus, which increased property, plant and equipment as of December 31, 2003, and increased non-film depreciation and amortization after December 31, 2003 (see Note 6). 6. Financing Arrangements (a) Debt Allocated by DreamWorks Studios. Prior to the Separation, DreamWorks Studios historically allocated its debt and related interest to the Company based on the proportion of the Company’s capital invested 83