AT&T announced a three-year capital allocation plan aimed at addressing concerns of an activist investor, under which the company said it will continue to sell off pieces of the business to get its balance sheet in shape.

Through 2022, the company pledged to make “no major acquisitions” and laid out a plan which it expects to drive “significant” growth in margins and earnings while allowing the company to invest in growth areas and continue to pay down debt. In 2020, the company said it expects to sell $5 billion to $10 billion of non-strategic assets to help pay down debt.

Meanwhile, for the third quarter of 2019, AT&T’s pay-TV business continued to be in free-fall, crimping revenue and hurting the bottom line. WarnerMedia revenue in the third quarter dropped 4.4% on a tough comparison with Warner Bros.’s stronger theatrical slate in the year-earlier period.

The telco said it expects chairman and CEO Randall Stephenson to remain chief executive through at least the end of 2020. In addition, the company said it will add one new director after its next regular board meeting who will be a “technology executive with experience executing strategic cost initiatives” followed by another director in 2020, which were among the concessions to assuage Elliott’s concerns.

Stephenson said AT&T’s board has not officially reached a decision about his retirement as CEO but noted he’s been in the role for 11 years and the board has been engaged in a leadership succession plan. Also, the role of chairman and CEO will be split after Stephenson exits as chief exec, another measure Elliott had called for.

“The objectives we have outlined today have been central to our plans for many months, even before we closed our acquisition of Time Warner,” Stephenson said in a statement. “But, as you would expect, our thinking has also benefited from our engagement with our owners, including Elliott Management. I’ve found our engagement with Elliott to be constructive and helpful, and I look forward to continuing those conversations.”

Last month, Elliott Management urged AT&T to refocus on its core business, criticizing its massive deals for Time Warner and DirecTV as inhibiting its financial performance.

In a statement Monday, Elliott Management’s Jesse Cohn and Marc Steinberg commended the AT&T plan, saying the new steps “will create substantial and enduring shareholder value at one of America’s greatest companies… It is clear to us that AT&T is committed to and accountable for creating shareholder value over the near- and long-term.”

Overall, AT&T’s consolidated revenue for the third quarter was $44.59 billion, below analyst consensus estimates of $45 billion and down 2.5% year over year. Net income dropped 18% to $3.95 billion; that translated into Q3 adjusted earnings per share of 94 cents (vs. consensus analyst estimates of EPS of 93 cents).

During the third quarter of 2019, AT&T dropped a net 1.16 million premium TV video subscribers, including at DirecTV, while its over-the-top AT&T TV Now service dropped 195,000 net customers, for a total net loss of 1.36 million video subs. The company attributed about 225,000 of those losses to programming blackouts. As of the end of the period, AT&T had 21.6 million total video customers, which included 1.1 million AT&T TV Now subscribers — down 3.6 million from 25.2 million a year earlier.

Stephenson suggested the rate of AT&T’s pay-TV losses peaked in Q3, noting that the third quarter is historically weak for the pay-TV business on the call with investors. He promised significant improvement in the pay-TV numbers for Q4 with subscriber trends getting better moving into next year. The DirecTV satellite business continues to provide strong free cash flow — of $4 billion per year — but Stephenson said the recently debuted internet-delivered AT&T TV service will become the standardized, primary go-to-market pay-television offering and HBO Max will “become the workhorse” for the video business.

In the video business, “we ultimately get down to where we have two products,” Stephenson said: traditional satellite TV and a streaming service premised on the HBO Max platform that at some point will expand beyond subscription VOD to eventually incorporate live programming.

Stephenson officially announced that AT&T is forecasting 50 million HBO Max subscribers in the U.S. by 2025. The company revealed that projection last week in a Reuters story, in which AT&T COO John Stankey also said HBO Max with be made free to the telco’s customers who have HBO.

WarnerMedia has set an HBO Max media day for Tuesday, Oct. 29, to announce new details of the forthcoming subscription streaming service set to debut next spring, which AT&T is banking to drive future financial growth.

WarnerMedia Q3 2019 operating revenue was $7.8 billion, down 4.4%, dragged down by a 10.4% decline at Warner Bros. with the company citing “a more favorable mix of box office releases in the prior comparable period” (which included “Aquaman” and “A Star Is Born”) as well as lower TV licensing. HBO revenue was up 10.6% to $1.8 billion, and Turner revenue of $3.0 billion was up 0.6%.

For 2020-22, AT&T projects consolidated revenue to grow between 1%-2% each year. For next year it projected adjusted earnings per share to be $3.60 to $3.70 per share and $4.50 to $4.80 by 2022. Those EPS targets factor in HBO Max investment of 15 cents-20 cents per share in 2020, decreasing to about 10 cents per share in both 2021 and 2022. In the next three years, AT&T said it would pay off all the debt it amassed through the $85 billion transaction for Time Warner.

On Sunday, AT&T announced a $1.1 billion deal to sell its majority stake in Central European Media Enterprises. As of Sept. 30, the telco’s long-term debt stood at $153.57 billion, down from $166.25 billion at the end of 2018.