The Company and approximately 50 of its vendors participate in cooperative advertising programs and other vendor marketing programs in which the vendors provide the Company with cash consideration in exchange for marketing and advertising the vendors’ products. The Company’s accounting for cooperative advertising arrangements and other vendor marketing programs results in a portion of the consideration received from the Company’s vendors reducing the product costs in inventory rather than as an offset to the Company’s marketing and advertising costs. The consideration serving as a reduction in inventory is recognized in cost of sales as inventory is sold. The amount of vendor allowances to be recorded as a reduction of inventory was determined by calculating the ratio of vendor allowances in excess of specific, incremental and identifiable advertising and promotional costs to merchandise purchases. The Company then applied this ratio to the value of inventory in determining the amount of vendor reimbursements to be recorded as a reduction to inventory reflected on the balance sheet.

The cooperative advertising programs and other vendor marketing programs generally cover a period from a few days up to a few weeks and include items such as product catalog advertising, in-store display promotions, Internet advertising, co-op print advertising, product training and promotion at the Company’s annual store managers conference. The allowance for each event is negotiated with the vendor and requires specific performance by the Company to be earned.

Specific, incremental and identifiable advertising and promotional costs were $90.4 million, $120.9 million and $122.1 million in the 53 week period ended February 2, 2013 and the 52 week periods ended January 28, 2012 and January 29, 2011, respectively. Vendor allowances received in excess of advertising expenses were recorded as a reduction of cost of sales of $134.8 million, $99.0 million and $83.7 million for the 53 week period ended February 2, 2013 and the 52 week periods ended January 28, 2012 and January 29, 2011, respectively. The amounts deferred as a reduction in inventory were $8.2 million and $0.8 million for the 53 weeks ended February 2, 2013 and the 52 weeks ended January 28, 2012, respectively. The amount recognized as income related to the capitalization of excess vendor allowances was $2.1 million for the 52 weeks ended January 29, 2011.