Level 3 securities are valued based upon unobservable inputs, reflecting our estimates of value based upon assumptions used by market participants. Securities are assigned to Level 3 in cases where non-binding broker quotes are significant to the valuation and there is a lack of transparency as to whether these quotes are based upon information that is observable in the marketplace. Fair value estimates for securities valued using unobservable inputs require significant judgment due to the illiquid nature of the market for these securities and represent the best estimate of the fair value that would occur in an orderly transaction between willing market participants at the measurement date under current market conditions. Fair value for these securities are generally determined using comparable securities or non-binding broker quotes received from outside broker dealers based upon security type and market conditions. Remaining securities, where a price is not available, are valued using an estimate of fair value based upon indicative market prices that include significant unobservable inputs not based upon, nor corroborated by, market information, including the utilization of discounted cash flow analyses which have been risk-adjusted to take into account illiquidity and other market factors. This category primarily consists of collateralized debt obligations priced using non-binding broker quotes.
Equity in earnings of limited partnerships increased by $6.1 million in 2015, compared to 2014, and decreased by
Other commitments include various agreements for services, including such things as computer software, telephones, copiers, and maintenance.
Class A and Class B basic earnings per share and Class B diluted earnings per share are calculated under the two-class method. The two-class method allocates earnings to each class of stock based upon its dividend rights. Class B shares are convertible into Class A shares at a conversion ratio of 2,400 to 1. See Note 11, "Capital Stock".
The following tables present our fair value measurements on a recurring basis by asset class and level of input:
Capitalized software costs include internal and external labor and overhead and are included in fixed assets in the Statements of Financial Position. Capitalization ceases and amortization begins when a computer software project is complete and ready for its intended use.
Pension plan costs represent the total cost before reimbursements to Indemnity from the Exchange and EFL.
for those who elected to defer receipt of some portion of their base salary. The deferred compensation plan for our outside directors allows participants to defer receipt of a portion of their director and meeting fees until a later date. Employees or outside directors participating in the respective plans select hypothetical investment funds for their deferrals which are credited with the hypothetical returns generated.
We lease certain office space from the Exchange including the home office and three field office facilities. Rent expenses under these leases totaled $6.5 million, $7.8 million and $5.9 million in 2015, 2014 and 2013, respectively. We also have a lease commitment with EFL for a branch office until 2018. Annual rentals paid to EFL under this lease totaled $0.4 million in 2015, 2014 and 2013.