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Crown Castle plans to convert to a REIT

HOUSTON (AP) -- Crown Castle International Corp., which owns wireless towers and antennas, said Monday that it plans to convert its business to a real estate investment trust to gain tax advantages.

The Houston-based company expects to operate as a REIT starting Jan. 1.

The company, which operates more than 30,000 wireless communication sites in the U.S. and 1,700 sites in Australia, needs approval from the Internal Revenue Service, its board and shareholders.

A REIT is a company that owns real estate that produces income. Converting to a REIT allows a company to deduct dividends paid to its shareholders from its corporate taxable income. REITs must distribute at least 90 percent of their taxable income to shareholders annually. If a REIT pays 100 percent of its taxable income to shareholders, it will owe no corporate tax. Investors buy shares of REITs for the dividends and so they can have money in real estate without being landlords.

The company said it needs to make changes to its company structure to comply with REIT rules, but the conversion would have little effect on its operations.

"We believe a REIT structure will lower our weighted average cost of capital and provide additional opportunities for creating long-term shareholder value," said Ben Moreland, Crown Castle's president and CEO, in a statement.

Crown Castle doesn't plan to make any dividend distributions before the REIT conversion.

Shares of the Houston-based company rose $1.84, or 2.6 percent, to $72.39 in afternoon trading Monday.