Information about the benefit obligation, assets and funded status of the Company’s defined benefit pension plans is as follows: The fair values of the Company’s long-term debt were estimated using discounted cash flow analysis based on incremental borrowing rates for similar types of borrowing arrangements. All of the Company’s financial instruments are held or issued for purposes other than trading. The carry- ing amounts and estimated fair values of the Company’s financial instruments are summarized as follows: (dollars in thousands, except per share data) - continued -  NOTE G – FAIR VALUE OF FINANCIAL INSTRUMENTS Notes to Consolidated Financial Statements NOTE H – PENSION PLANS 2001 2000 Change in benefit obligation:  Benefit obligation at beginning of year  $ 6,606 $ 6,999  Service cost  103 92 Interest cost  407 437  Actuarial loss  239 230 Benefits paid (549) (1,152) Benefit obligation at end of year  6,806  6,606  Change in plan assets:  Fair value of plan assets at beginning of year  2,984 4,070 Actual return on plan assets  (457) (259) Employer contribution  386 324  Benefits paid  (549) (1,151) Fair value of plan assets at end of year  2,364 2,984 Funded status  (4,442) (3,622) Unrecognized actuarial loss  2,139 893  Net amount recognized  $ (2,303) $ (2,729) Amounts recognized in the statement of financial  position consist of:  Accrued liability  $ (4,442) $ (3,622) Accumulated other comprehensive income  2,139 893 Net amount recognized  $ (2,303) $ (2,729) Weighted-average assumptions as of year-end:  Discount rate  6.08% 6.06% Expected return on plan assets  7.50% 8.50% 2001 2000 CARRYING CARRYING AMOUNT FAIR VALUE AMOUNT FAIR VALUE Financial assets Cash and cash equivalents $ 1,412 $ 1,412 $ 2,591 $ 2,591 Notes receivable (including current portion) 9,841 9,841 6,860 6,860  Escrow funds 251 251 253 253  Financial liabilities Long-term debt (including current portion) 168,246 161,051  201,517 190,102  Interest rate swap (4,028) (4,028) – (1,485) 22  THE DIXIE GROUP  / 2001 ANNUAL REPORT