The inventory increase was partially due to purchasing raw materials and building inventories at the
Inventory also increased in part due to the purchase of beryllium feedstock during the second quarter 2013 that is being used to augment production from the new beryllium plant in order to meet the sales demand. Beryllium metal products typically have a long processing cycle. We use the last-in, first-out (LIFO) method for valuing a large portion of our domestic inventories. By so doing, the most recent cost of various raw materials, including gold, copper and nickel, is charged to cost of sales in the current period. The older, and often lower, costs are used to value the inventory on hand. Therefore, current changes in the cost of raw materials subject to the LIFO valuation method have only a minimal impact on changes in the inventory carrying value. 27 -------------------------------------------------------------------------------- Gold prices and the prices of other metals were lower in the third quarter 2013 than the year-end 2012 levels. These lower prices were charged to cost of sales, matching the pass-through prices charged to the customers, and did not have a significant impact on the inventory carrying value. Capital expenditures for the first nine months of 2013 and 2012 are summarized as follows: Nine Months Ended Sept. 27, Sept. 28, (Millions) 2013 2012 Capital expenditures
$ 19.8 $ 25.3Mine development 4.4 5.0 Subtotal 24.2 30.3 Reimbursement for spending under government contract - 1.0 Net spending $ 24.2 $ 29.3The multi-year $104.9 millionTitle III contract with the U.S. Department of Defensefor the design and development of a new facility for the production of primary beryllium was largely completed during 2012 and, therefore, there was no additional spending under the contract or any reimbursements received during the first nine months of 2013. We spent an additional $1.6 millionoutside of the Title III contract during the first nine months of 2013 on the beryllium facility to improve the performance of specific pieces of equipment and the related infrastructure. Spending on major projects in the first nine months of 2013 included the large optics initiative at the Westford, Massachusettsfacility, new vertical casting equipment to increase the capacity to manufacture ToughMetŪ products at our Lorain, Ohiofacility, upgrades to the rolling equipment at the Reading, Pennsylvaniaoperations to allow for improved quality of thin gauge strip product, upgrades to the strip and bulk product processing equipment at the Elmorefacility and an upgrade and expansion of the welding line capabilities at the Lincoln, Rhode Islandoperations. Capital spending in the first nine months of 2013 also included various information technology projects.