253/264 Notes to the 2017 consolidated financial statements for contingent losses when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. An unfavorable outcome to any legal matter, if material, could have an adverse effect on the Group’s operations or its financial position, liquidity, or results of operations. Since July 2017, six lawsuits alleging unlawful reproduction and distribution of musical compositions have been filed against the Group in (i) the U.S. District Court for the Middle District of Tennessee (Bluewater Music Services Corporation v. Spotify USA Inc. , No. 3:17­cv­01051; Gaudio et al. v. Spotify USA Inc. , No. 3:17­cv­01052; Robertson et al. v. Spotify USA Inc. , No. 3:17­cv­01616; and A4V Digital, Inc. et al. v. Spotify USA Inc. , 3:17­cv­01256), (ii) in the U.S. District Court for the Southern District of Florida (Watson Music Group, LLC v. Spotify USA Inc. , No. 0:17­cv­62374), and (iii) the U.S. District Court for the Central District of California (Wixen Music Publishing Inc. v. Spotify USA, Inc. , 2:17­cv­09288) (alleging that Spotify has infringed the copyrights in over 10,000 musical compositions). The complaints seek an award of damages, including the maximum statutory damages allowed under U.S. copyright law of $150,000 per work infringed. The Group intends to vigorously defend the claims. 24. Related party transactions Key management compensation Key management includes members of the Company’s executive committee and the board of directors. The compensation paid or payable to key management for Board and employee services includes their participation in share­based compensation arrangements. The disclosure amounts are based on the expense recognized in the consolidated statement of operations in the respective year. 2015 2016 2017 (in € millions) Key management compensation Short term employee benefits 15 4 4 Share­based payments 10 18 17 Post­employment benefits — 1 — Termination benefits — 1 1 25 24 22 As noted in Note 16, the Company issued warrants to acquire ordinary shares to certain members of key management of the Group. On April 1, 2016, the Group issued and sold the Convertible Notes to, among others, Rivers Cross Trust, an entity wholly owned by Mr. McCarthy, the Group’s Chief Financial Officer. The original principal amount purchased by Rivers Cross Trust was approximately US$0.2 million. In January 2018, the Convertible Notes, plus accrued interest, were exchanged for ordinary shares. Refer to Note 26. The Group recognized partner revenues from its associate in Soundtrack Your Brand Sweden AB of €1 million, €2 million, and €3 million during years ended December 31, 2015, 2016 and 2017, respectively. F­60