HT1329 Create New Version selection grayed out, what is wrong?

I have adjusted the preferences to MP3 but when I select a specific song to create a new version, the options are grayed out.  What else do I need to do in order to convert my previously purchased songs to MP3 so that I can play in my car.

Where is the song you are trying to convert located? Is it of kind Protected AAC?
tt2

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