Randall Stephenson, Chairman and CEO, AT&T

AT&T announced a three-year strategic plan it says will significantly grow EBITDA margins and earnings per share, allow it to invest in growth areas, and pay down debt.

Under the plan, the company said it would add two new board members, sell off up to $10 billion worth of non-core businesses next year, and pay off all its debt from the purchase of Time Warner.

“The strategic investments we’ve made over the last several years have given us the essential elements to meet growing demand for content and connectivity,” chairman and chief executive officer Randall Stephenson.

AT&T said it expected Stephenson would continue as CEO at least through next year, though in its letter, Elliott Management said AT&T would evaluate all possible candidates for the position and separate the chairman and CEO position.

The three-year financial guidance calls for 1% to 2% per year consolidated revenue growth and an adjusted EBITDA margin of 35% by 2022, 200 bps higher than 2019 levels.

The company reported earnings of 94 cents per share for the third quarter, above analyst estimates of 93 cents per share.

The announcement comes as AT&T has faced pressure from activist investor Elliott Management, which released its own statement saying it supported the “multi-faceted approach to shareholder value creation.”

“We have closely evaluated the company’s three-year plan and support the steps toward a faster-growing, more profitable, focused, and shareholder-friendly company,” Elliott partner Jesse Cohn and associate portfolio manager Marc Steinberg said.

Elliott said it manages funds that collectively own $3.4 billion in the telecom giant.

AT&T had $153.5 billion in debt at the end of the third quarter. It sold Central European Media Enterprises over the weekend for about $2.1 billion and said it expects to generate $14 billion through asset sales and other initiatives by the end of the year.

AT&T shares were up more than 4% in midday trading.

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