It was May 2, 2012, and Susan Smith at GBR Capital, a hedge fund based in New York, was thinking about how she should vote her fund's shares at Canadian Pacific's (CP's) upcoming annual shareholders' meeting in two weeks in Calgary, Alberta. CP had built the country's first transcontinental railroad in the 19th century. Its board of directors was the target of a proxy battle for control of the firm initiated by Pershing Square Capital Management, L.P. (Pershing Square) in March 2012. Both CP and Pershing Square had made presentations to proxy advisors Glass Lewis and Institutional Shareholder Services (ISS). Proxy advisors provided voting recommendations to clients such as private funds and institutional investors. As part of their analysis, the proxy advisors received information from management and from the dissident shareholder, Pershing Square. Due to the lack of voting direction by management and CP's high level of institutional ownership, Smith believed that the recommendations of proxy advisors would be key in the proxy contest, but she also needed to perform her own analysis of the intrinsic value of CP shares under the scenario of the status quo with CP's current management and strategy in place versus a potential shakeup, as suggested by Pershing Square. One statement in Pershing Square's dissident presentation, which had been sent out on January 24, 2012, stood out for Smith: "Canadian Pacific is 70 per cent the size of Canadian National, yet has an enterprise value 40 per cent as large, due to its inferior profitability and asset utilization." CLASS I NORTH AMERICAN RAILROADS Railroad companies were ranked by revenues, with Class I railroads being the biggest and Class III railroads the smallest. In the United States, a Class I railroad had at least US$250 million in sales; in Canada, a Class I railroad had at least CA$250 million in sales.'