ShortyStuff - Without knowing the specifics, what's probably going on here is "goodwill impairment". Roughly, goodwill is the difference between the purchase price of an acquisition and the value of its assets. When the company you buy owns software, the acquisition price can be nearly all goodwill. Under the old (GAAP) rules goodwill was depreciated like a piece of equipment, which was clearly wrong. Today, goodwill is written down if it is "impaired", meaning the acquisition is not as profitable as expected.
Just guessing again, SBC/ATT probably overpaid in 2000. Sterling's bread & butter then was EDI (electronic data interchange) software. In the late nineties, the big-3 car companies linked arms & demanded that suppliers (thousands of companies) communicate electronically. After Y2K, software sales tanked. A lot of goodwill in the tech sector was impaired and written down. Did that happen here? I don't know for a fact, but it would explain how ATT can post a $750mm gain while losing a couple billion bucks.
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