The Company owns several administrative facilities in southern Nevada totalling approximately 406,000 square feet. Such facilities include an approximate 134,000 square foot six-story home office building and an approximate 43,000 square foot two-story corporate administrative headquarters. These buildings are subject to liens securing an $800,000 loan balance from Bank of America. Also included in this total is a 198,000 square foot six-story administrative headquarters building which became fully occupied in 1998. This building was financed in January 1998 and is subject to a $13.4 million loan balance. The Company also owns several clinical facilities in the southern Nevada area totalling approximately 396,000 square feet and consisting primarily of nine medical clinics and two surgery centers. The Company leases additional office and clinical space in Nevada totalling approximately 145,000 and 86,000 square feet, respectively.
Net cash used for investing activities during 1998 included $40.7 million in capital expenditures for construction costs associated with office facilities, furniture and equipment for the newly constructed six-story administrative headquarters building, continued implementation of three new computer systems, computer and medical equipment, other capital needs to support the Company's growth, and a $24.2 million net increase in investments. In addition, approximately $111.4 million of cash was used to purchase the Dallas, Texas operations of Kaiser Foundation Health Plan.
The costs of the project and the dates on which the Company plans to complete the necessary Year 2000 modifications are based on management's best estimates, which were derived utilizing numerous assumptions of future events including the continued availability of certain resources and other factors. However, there can be no guarantee that these estimates will be achieved and actual results could differ materially from those plans. Specific factors that might cause such material differences include, but are not limited to, the availability and cost of personnel trained in this area, the ability to locate and correct all relevant computer codes, the ability of the Company's significant suppliers, customers and others with which it conducts business, including federal and state governmental agencies, to identify and resolve their own Year 2000 issues and similar uncertainties.
Medical Claims Payable and Military Health Care Payable. Medical claims payable and Military health care payable include the estimated cost for unpaid claims for which health care services have been provided to enrollees and TRICARE eligibles and a provision of the estimated costs for claims that have been incurred but have not been reported.
Concentration of Credit Risk. The Company's financial instruments that are exposed to credit risk consist primarily of investments and accounts receivable. The Company maintains cash and cash equivalents, and short- and long-term investments with various financial institutions. These financial institutions are located in many different regions, and company policy is designed to limit exposure with any one institution.
The following table summarizes the Company's short-term, long-term and restricted investments as of December 31, 1997:
A summary of the provision for income taxes for the years ended December 31, 1998, 1997, and 1996 is as follows:
Rent expense totaled $8,763,000, $5,827,000 and $4,945,000 in 1998, 1997 and 1996, respectively.
During 1995, as part of the Company's clinical expansion and growth efforts, the Company acquired a medical facility in Mohave County, Arizona, across the border from Laughlin, Nevada. This medical facility included a 12-bed hospital. During 1996 the Company implemented a plan to exit the hospital business and has actively pursued buyers for this business. As a result of this plan, the Company recorded a charge of $3.8 million, $2.9 million after tax, in the fourth quarter of 1996, primarily to recognize the estimated costs to dispose of the hospital. As of December 31, 1998, the Company has been unable to reach an agreement to sell the hospital.