19  Notes to Consolidated Financial Statements (dollars in thousands, except per share data) - continued -  the results of operations of the acquired company subsequent to the date of acquisition is included in the Company’s consolidated financial statements.  On July 1, 2000, the Company acquired a one-third interest in Chroma Systems Partners ("Chroma"). Chroma performs dyeing and finishing processes on a contract basis for Fabrica and other carpet businesses. The initial investment in Chroma was $11,000 paid in cash on July 3, 2000. The acquisition of the Company’s interest in Chroma Systems Partners in 2000 is subject to an adjustment generally equal to the Company’s share of Chroma’s income or loss for the three years ending June 30, 2003, less $1,800. Such adjustment amounted to $544 in 2001 and $786 in 2000. The Company’s investment in Chroma secures the seller’s right to any contingent consideration that becomes due. Upon withdrawal of a partner from Chroma on September 30, 2000, the Company’s interest in Chroma increased to 50%, without further investment. At December 30, 2000, the carrying value of the Chroma investment was approximately $9,591 greater than the Company’s 50% interest in Chroma’s reported net assets. Such difference is being amortized on a straight-line basis over the estimated average economic life of the underlying assets (approximately 19 years) as a reduction to income from the investment. In 2001, the Company’s equity in the earnings and distri- butions received from Chroma were $556 and $1,141, respectively compared with $617 and $1,086, respectively in 2000. Purchases by the Company from Chroma were $5,400 in 2001 and $2,611 in 2000. In June 1999, the Company completed the sale of its discontinued textile knit fabric, apparel and specialty yarns (textile products) operations. Cash proceeds from disposal of the Company’s textile prod- ucts operations were $47,396 in 1999, excluding accounts receivable, accounts payable and accrued expenses retained by the Company. Additionally, the Company received an $8,000 note as part of the consideration from one of the purchasers in 1999. The face value of the note, as of December 29, 2001, is $8,910 as a result of unpaid interest which, under the agreement, converts to principal. The note matures in 2003, has a stated interest rate of 10.5% and is subordinated to the maker’s senior indebted- ness. The note is recorded in the Company's financial statements at its estimated fair value of $6,193 and is classified in other, non-current assets at December 29, 2001. The Company assesses the financial condition of the issuer periodically to determine the note's estimated fair value. Following is summary financial information for the Company’s discontinued textile products operations: NOTE C – DISCONTINUED OPERATIONS 2001 2000 1999  Net sales $ – $ – $  11,832 Estimated income on disposal: Before income taxes – $ 1,289 $ 7,855 Income tax provision  – 465 3,063 Net income  $  – $ 824 $ 4,792 The gains on disposal in 2000 and 1999 resulted from favorable adjustments to amounts accrued as of the end of the preceding year for exit costs and estimated future operating results. The textile products operations had operating income of $1,622 (net of tax) from the beginning of 1999 through the disposal date compared with an estimated loss for such period of $1,586 (net of tax). At December 29, 2001 and December 30, 2000, the remaining liabilities of the textile products operations consisted of accrued exit costs of $1,311 and $1,630 respectively and are included in accrued expenses in the Company's financial statements. No significant assets were remaining. THE DIXIE GROUP  / 2001 ANNUAL REPORT