Today,
Crown Castle International Corporation announced that they were taking the
necessary steps to reorganize as a Real Estate Invest Trust (REIT) for tax
purpose. They are hoping to begin this status at the start of January 2014.
"We are delighted to announce this plan for conversion
because we believe REIT status is the optimal structure for our business given
the real estate nature of our assets," stated Ben Moreland, Crown
Castle's President and Chief Executive Officer. "We
believe a REIT structure will lower our weighted average cost of capital and
provide additional opportunities for creating long-term shareholder
value. Further, we expect our conversion to a REIT to have little to no
effect on our operations, and we intend to continue our focus on maximizing
long-term adjusted funds from operations per share through growth and
disciplined capital allocation."
In 2012 American Tower reorganized into a REIT and they have
been growing ever since. REITs have become a popular choice for many companies
due to the large tax benefits. “The law mandated
that real estate investment trusts pay out no less than 90% of their income to
their investors as taxable dividends. REITs in turn got to exempt that income from
corporate taxes,” Forbes explained.
Crown
Castle expects to operate in compliance with REIT standards by January 1, 2014.
The implementations to these steps will be subject to shareholder approval and
final board approval.
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