4. Derivative Instruments

The interest rate caps and collars are accounted for as cash flow hedges because they are expected to be highly effective in hedging variable rate interest payments. Changes in the fair value of the cash flow hedges are reported as a component of AOCI. As of August 3, 2024, AOCI included unrealized losses of $6.4 million ($4.9 million, net of tax). As of February 3, 2024, AOCI included unrealized losses of $2.2 million ($1.7 million, net of tax). Approximately $1.1 million and $2.3 million of pre-tax gains deferred in AOCI were reclassified to interest expense during the thirteen and twenty-six week periods ended August 3, 2024, respectively. Approximately $0.5 million and $1.1 million of pre-tax losses deferred in AOCI were reclassified to interest expense during the thirteen and twenty-six week periods ended July 29, 2023, respectively. The Company currently estimates that $1.8 million of losses related to trade date costs on its cash flow hedges that are currently deferred in AOCI will be reclassified to interest expense in the consolidated statement of operations within the next twelve months. This estimate could vary based on actual amounts as a result of changes in market conditions.