8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

April 18, 2006

Date of Report

(Date of Earliest Event Reported)

Total System Services, Inc.

(Exact Name of Registrant as Specified in its Charter)

Georgia
(State of Incorporation) 1-10254
(Commission File Number) 58-1493818
(IRS Employer Identification No.)

1600 First Avenue, Columbus, Georgia 31901

(Address of principal executive offices) (Zip Code)

(706) 649-2267

(Registrant's telephone number, including area code)

________________________________________________

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02	Results of Operations and Financial Condition.
	On April 18, 2006, Total System Services, Inc. (“Registrant”) issued a press release and will hold an investor call and webcast on April 19, 2006 to disclose financial results for the quarter ended March 31, 2006. The press release and Supplemental Information for use at this investor call are attached hereto as Exhibits 99.1 and 99.2 and incorporated herein by reference. This information shall not be deemed to be filed for purposes of Section 18 of the Securities Exchange Act of 1934 or incorporated by reference into any document filed under the Securities Act of 1933 or the Securities Exchange Act of 1934 except as shall be expressly set forth by specific reference in such filing.
Item 7.01	Regulation FD Disclosure. See Item 2.02 above.
Item 9.01	Financial Statements and Exhibits.
	(d)	Exhibits
	Exhibit No.	Description
	99.1	Registrant's press release dated April 18, 2006
	99.2	Supplemental Information prepared for use with the press release

2

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, Registrant has caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	TOTAL SYSTEM SERVICES, INC. ("Registrant")
Dated: April 18, 2006	By:/s/ Kathleen Moates         Kathleen Moates     Senior Deputy General Counsel

3

EX-99.1

Exhibit 99.1

For Immediate Release

Contacts:

James B. Lipham Chief Financial Officer +1.706.649.2262 Shawn Roberts TSYS Investor Relations +1.706.644.6081 shawnroberts@tsys.com

TSYS Reports First Quarter 2006 Earnings Per Share of $0.26

Columbus, Ga., April 18, 2006— TSYS® today announced that its financial results for the first quarter of 2006 met the company’s earnings per share expectations.

“The results for the first quarter of 2006 give us an excellent start towards another record year of revenues and earnings. We have maintained our focus on delivering outstanding financial results, and we expect to fully achieve our goals for 2006,” said Philip W. Tomlinson, chairman and chief executive officer of TSYS.

(dollars in millions, except earnings per share data)	Three Months Ended
	March 31,
	2006	2005	Percent Change
Revenues Before Reimbursables	$329.6	280.4	17.5%
Total Revenues	412.3	350.0	17.8%
Operating Income	71.9	66.3	8.4%
Net Income	50.4	46.1	9.3%
Basic EPS	0.26	0.23	9.2%
Diluted EPS	0.26	0.23	9.2%

Recent Highlights

• Entered the healthcare payments market by signing a long-term agreement with Exante Bank, a wholly owned subsidiary of UnitedHealth Group, Inc., to provide a broad range of payment processing and related services

• Continued assisting CUP Data in expanding its client list and strategically positioning for long-term growth in the Chinese credit card market

• Renewed its multi-year agreement to provide CompuCredit Corp. of Atlanta, Ga., one of the nation's largest credit card providers, processing and related services for its portfolio of nearly 6 million cardholder accounts

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TSYS Reports Results For First Quarter 2006/Page 2 of 10 

“Our management team is doing an outstanding job of redeploying resources from accounts we are deconverting to those being converted. During the quarter, we lowered our consolidated headcount by 115 through attrition and we will continue to effectively manage all aspects of our cost structure going forward to minimize the impact of the loss of revenues associated with the deconversions,” said Tomlinson.

“TSYS and our affiliates in both the domestic and international markets, coupled with our industry-leading technology, are expected to continue bringing wins for our team. Our first full year of 100% ownership of Vital, now rebranded as TSYS Acquiring Solutions, continues to be a rewarding experience for us and enables TSYS to capture opportunities that were previously impossible under the joint venture structure. We look forward to another record year in 2006,” said Tomlinson.

As required by the adoption on January 1, 2006 of SFAS 123R, the company began recognizing stock option expense. The impact of expensing of stock options in the first quarter of 2006 was approximately $0.01 per share. Prior to the adoption, TSYS disclosed the impact of expensing stock options in its footnote disclosures. If TSYS had expensed stock options in 2005, net income for the first quarter of 2006 would have grown approximately 13%, and the full year 2006 earnings growth would be estimated at approximately 26% - 28%.

TSYS expects to be at the high end of its previously announced earnings growth guidance of 21%-23% based on the following assumptions:

1. Total revenues will increase 6% - 8%

2. Accounts on file at the end of 2006 will be approximately 395 million to 405 million

3. Deconversion of Citigroup’s Sears portfolio as scheduled in May 2006

4. Deconversion of Bank of America’s consumer portfolio as scheduled in October 2006, with a one-time contract-termination payment of approximately $69 million and an acceleration of amortization of approximately $7 million in contract-acquisition costs

5. Recognition of revenues and expenses associated with the Capital One agreement beginning in the fourth quarter of 2006

Conference Call

TSYS will host its quarterly conference call at 8:30 a.m. EST, April 19, 2006. The conference call can be accessed via simultaneous Internet broadcast at www.tsys.com by clicking on the “Conference Call” icon on the homepage. The replay will be archived for 12 months and will be available approximately 30 minutes after the completion of the call.

About TSYS

TSYS (www.tsys.com) is one of the world’s largest companies for outsourced payment services, offering a broad range of issuer- and acquirer-processing technologies that support consumer-finance, credit, debit and prepaid services for financial institutions and retail companies in North America, Europe and the Asia-Pacific. Based in Columbus, Ga., TSYS (NYSE: TSS) is 80-percent held by Synovus Financial Corp. (NYSE: SNV), one of FORTUNE magazine’s “Most Admired Companies” and a member of its “100 Best Companies to Work For” Hall of Fame. For more information, contact news@tsys.com.

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TSYS Reports Results For First Quarter 2006/Page 3 of 10

This press release contains statements that constitute “forward-looking statements” within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934 as amended by the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, among others, statements regarding TSYS’ expected earnings growth for 2006, and the assumptions underlying such statements, including, with respect to TSYS’ expected increase in earnings for 2006, an increase in revenues of 6% to 8%, accounts on file at the end of 2006 will be approximately 395 million to 405 million, deconversion of Citigroup’s Sears portfolio as scheduled in May 2006, deconversion of Bank of America’s consumer portfolio as scheduled in October 2006 with a one-time termination payment of $69 million and an acceleration of amortization of approximately $7 million in contract-acquisition costs and recognition of revenues and expenses associated with the Capital One agreement beginning in the fourth quarter of 2006. These statements are based on the current beliefs and expectations of TSYS’ management and are subject to significant risks and uncertainties. Actual results may differ materially from those contemplated by the forward-looking statements. A number of important factors could cause actual results to differ materially from those contemplated by our forward-looking statements in this press release. Many of these factors are beyond TSYS’ ability to control or predict. These factors include, but are not limited to, revenues that are lower than anticipated; accounts on file at the end of 2006 are lower than anticipated; TSYS does not convert and deconvert clients’ portfolios as scheduled; Bank of America does not deconvert as scheduled, amortization of related contract acquisition costs is not accelerated as anticipated and the termination fee is not in the amount anticipated; and TSYS does not begin recognizing revenues and expenses associated with the Capital One agreement beginning in the fourth quarter of 2006 as anticipated. Additional factors that could cause actual results to differ materially from those contemplated in this release can be found in TSYS’ filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. We believe these forward-looking statements are reasonable; however, undue reliance should not be placed on any forward-looking statements, which are based on current expectations. We do not assume any obligation to update any forward-looking statements as a result of new information, future developments or otherwise.

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EX-99.2

Exhibit 99.2

TSYS Announces Earnings for 2006
Page 4 of 10
TSYS
Financial Highlights
(Unaudited)
(In thousands, except per share data)
		Three months ended
		March 31,
				Percentage
		2006	2005	Change
Revenues
Electronic payment processing services	$	221,061	204,756	8.0	%
Merchant services		63,949	27,105	135.9
Other services		44,542	48,514	(8.2)
Revenues before reimbursables		329,552	280,375	17.5
Reimbursable items		82,738	69,608	18.9
Total revenues		412,290	349,983	17.8
Expenses
Employment expenses		119,966	96,978	23.7
Net occupancy & equipment expenses		75,350	66,068	14.0
Other operating expense		62,379	51,023	22.3
Expenses before reimbursables		257,695	214,069	20.4
Reimbursable items		82,738	69,608	18.9
Total operating expenses		340,433	283,677	20.0
Operating Income		71,857	66,306	8.4
Other Income:
Interest income		2,508	1,219	105.7
Interest expense		(44)	(70)	(36.5)
Gain (loss) on foreign currency translation, net		276	(333)	(183.0)
Other Income		2,740	816	nm
Income before Income Taxes, Minority Interest
and Equity in Income of Joint Ventures		74,597	67,122	11.1
Income Taxes		24,965	24,680	1.2
Minority Interest		(91)	(69)	31.2
Equity in Income of Joint Ventures		852	3,750	(77.3)
Net Income	$	50,393	46,123	9.3	%
Basic Earnings Per Share	$	0.26	0.23	9.2	%
Diluted Earnings Per Share	$	0.26	0.23	9.2	%
Dividend Declared Per Share	$	0.06	0.04
Average Common Shares Outstanding		197,086	197,023
Average Common and Common
Equivalent Shares Outstanding		197,326	197,233
nm = not meaningful
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TSYS Announces Earnings for 2006
Page 5 of 10
TSYS
Segment Breakdown
(Unaudited)
(In thousands)
			Three Months Ended March 31, 2006				Three Months Ended March 31, 2005
			Domestic- based support services	International- based support services	Merchant processing services	Consolidated	Domestic- based support services	International- based support services	Merchant processing services	Consolidated
Revenues before reimbursables		$	244,443	30,713	58,862	334,018	230,012	30,847	20,798	281,657
Intersegment revenues			(4,434)	-	(32)	(4,466)	(1,282)	-	-	(1,282)
Revenues before reimbursables
from external customers		$	240,009	30,713	58,830	329,552	228,730	30,847	20,798	280,375
Total revenues		$	312,830	36,246	70,332	419,408	291,017	36,614	24,335	351,966
Intersegment revenues			(7,086)	-	(32)	(7,118)	(1,983)	-	-	(1,983)
Revenues from external customers		$	305,744	36,246	70,300	412,290	289,034	36,614	24,335	349,983
Intersegment expenses		$	8,690	(7,575)	(8,219)	(7,104)	8,525	(8,155)	(2,353)	(1,983)
Segment operating income		$	60,966	879	10,012	71,857	60,492	2,841	2,973	66,306
Income before income taxes, minority interest
and equity income of joint ventures			63,479	728	10,390	74,597	61,597	2,492	3,033	67,122
Income tax expense		$	20,471	567	3,927	24,965	20,726	1,639	2,315	24,680
Equity in income of joint ventures		$	-	852	-	852	-	509	3,241	3,750
Net Income		$	42,819	1,111	6,463	50,393	40,406	1,756	3,961	46,123
Identifiable assets			1,323,429	171,529	234,653	1,729,611
Intersegment eliminations			(310,706)	(22)	(10)	(310,738)
Total assets			1,012,723	171,507	234,643	1,418,873
Note:	Revenues for domestic-based services include electronic payment processing services and other services provided from the United States to clients domiciled in the United States or other countries.Revenues from international-based services include electronic payment processing services and other services provided from outside the United States to clients based mainly outside the United States. Revenues from merchant processing services include Vital's merchant processing and related services.
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TSYS Announces Earnings for 2006
Page 6 of 10
TSYS
Segment Breakdown
(Unaudited)
(In thousands)
			Domestic-based Support Services				Merchant Processing Services
			Three Months Ended				Three Months Ended
			Jun 30, 2005	Sep 30, 2005	Dec 31, 2005	YTD	Jun 30, 2005	Sep 30, 2005	Dec 31, 2005	YTD
Revenues before reimbursables		$	241,119	245,118	248,081	964,330	63,313	69,517	61,927	215,555
Intersegment revenues			(3,812)	(3,883)	(4,878)	(13,855)	(31)	(41)	(31)	(103)
Revenues before reimbursables
from external customers		$	237,307	241,235	243,203	950,475	63,282	69,476	61,896	215,452
Total revenues		$	306,835	309,706	317,124	1,224,682	74,552	81,132	73,579	253,598
Intersegment revenues			(6,241)	(6,689)	(7,317)	(22,230)	(31)	(41)	(31)	(103)
Revenues from external customers		$	300,594	303,017	309,807	1,202,452	74,521	81,091	73,548	253,495
Intersegment expenses		$	10,709	5,627	9,733	34,594	(7,605)	(8,064)	(7,668)	(25,690)
Segment operating income		$	63,417	52,360	58,919	235,188	13,764	13,836	11,996	42,569
Income before income taxes, minority interest and
equity income of joint ventures			64,527	54,340	61,226	241,690	13,927	14,083	12,221	43,264
Income tax expense		$	21,897	18,389	19,860	80,872	5,404	5,161	4,608	17,488
Equity in income of joint ventures		$	-	-	-	-	-	-	-	3,241
Net Income		$	42,430	35,755	42,290	160,881	8,549	8,949	7,613	29,072
Note:	Effective January 1, 2006, Golden Retriever Systems L.L.C. became a wholly owned subsidiary of Enhancement Services Corporation. Also effective January 1, 2006, Merlin Solutions L.L.C. became a wholly owned subsidiary of TSYS. Both entities were previously wholly owned subsidiaries of Vital Processing Services, L.L.C. and were reported under the Merchant Processing Services Support Services segment. Effective January 1, 2006, the financial results of the two entities are included in the Domestic-based Support Services Segment. The results for previous periods have been restated to reflect the change.
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TSYS Announces Earnings for 2006
Page 7 of 10
TSYS
Balance Sheet
(Unaudited)
(In thousands)
		Mar 2006	Dec 2005
Assets
Current assets:
Cash and cash equivalents	$	242,857	237,569
Restricted cash		31,596	29,688
Accounts receivable, net		206,619	184,532
Deferred income tax assets		17,524	15,264
Prepaid expenses and other current assets		43,816	45,236
Total current assets		542,412	512,289
Computer software, net		253,852	267,988
Property and equipment, net		263,646	267,979
Contract acquisition costs, net		162,129	163,861
Goodwill, net		113,173	112,865
Equity investments, net		43,865	42,731
Other intangible assets, net		12,721	13,580
Other assets		27,075	29,604
Total assets	$	1,418,873	1,410,897
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable	$	37,904	29,464
Accrued salaries and employee benefits		39,465	84,348
Current portion of obligations under capital leases		2,208	2,078
Other current liabilities		164,466	161,122
Total current liabilities		244,043	277,012
Deferred income tax liabilities		90,869	89,478
Obligations under capital leases excluding current portion		3,028	3,555
Other long-term liabilities		23,192	24,398
Total liabilities		361,132	394,443
Minority interest in consolidated subsidiary		3,743	3,682
Shareholders' Equity:
Common stock		19,813	19,797
Additional paid-in capital		52,917	50,666
Treasury stock		(12,841)	(12,841)
Accumulated other comprehensive income		6,097	5,685
Retained earnings		988,012	949,465
Total shareholders' equity		1,053,998	1,012,772
Total liabilities and shareholders' equity	$	1,418,873	1,410,897
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TSYS Announces Earnings for 2006
Page 8 of 10
TSYS
Cash Flow
(Unaudited)
(In thousands)
		Three Months Ended March 31,
		2006	2005
Cash flows from operating activities:
Net income	$	50,393	46,123
Adjustments to reconcile net income to net cash provided by
operating activities:
Minority interests in consolidated subsidiaries' net income		91	69
Equity in income of joint ventures		(852)	(3,750)
Loss (gain) on currency translation adjustments, net		(276)	333
Depreciation and amortization		43,161	32,461
Share-based compensation		2,267	278
Impairment of developed software		-	3,137
Charges for (recoveries of) bad debt expense and billing
adjustments		567	679
Charges for transaction processing provisions		5,411	3,109
Deferred income tax (benefit) expense		(5,069)	10,566
Loss on disposal of equipment, net		92	323
(Increase) decrease in:
Accounts receivable		(22,684)	(15,398)
Prepaid expenses and other assets		4,405	2,932
Increase (decrease) in:
Accounts payable		8,718	(53,610)
Accrued salaries and employee benefits		(44,884)	(32,546)
Other liabilities		(2,955)	(39,241)
Net cash provided by operating activities		38,385	(44,535)
Cash flows from investing activities:
Purchase of property and equipment, net		(5,786)	(10,702)
Additions to licensed computer software from vendors		(1,816)	(3,694)
Additions to internally developed computer software		(3,733)	(2,884)
Cash acquired in acquisition		-	38,799
Cash used in acquisitions		-	(95,782)
Contract acquisition costs		(9,554)	(5,442)
Net cash used in investing activities		(20,889)	(79,705)
Cash flows from financing activities:
Proceeds from borrowings of long-term debt		-	14,125
Principal payments on long-term debt borrowings		-	(13,154)
Principal payments on capital lease obligations and software obligations		(402)	(550)
Dividends paid on common stock		(11,837)	(7,874)
Net cash used in financing activities		(12,239)	(7,453)
Effect of foreign currency translation on cash and cash equivalents		31	(2,197)
Net increase in cash and cash equivalents		5,288	(133,890)
Cash and cash equivalents at beginning of year		237,569	231,806
Cash and cash equivalents at end of period	$	242,857	97,916

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TSYS Announces Earnings for 2006
Page 9 of 10
Geographic Area Data:
The following geographic area data represents revenues for the three months ended March 31 based on where the client
is domiciled:
		Three Months Ended March 31,
(dollars in millions):		2006	%			2005	%		% Chg
United States	$	349.8	84.8	%	$	290.0	82.9	%	20.7	%
Europe		32.5	7.9			33.0	9.4		(1.5)
Canada		22.1	5.4			21.0	6.0		5.2
Japan		3.9	0.9			3.7	1.1		4.0
Mexico		2.5	0.6			1.7	0.4		48.3
Other		1.5	0.4			0.6	0.2		138.0
	$	412.3	100.0	%	$	350.0	100.0	%	17.8	%

Geographic Area Revenue by Operating Segment:
The following table reconciles segment revenues to revenues by reporting segment for the three months ended March 31:
		Three Months Ended March 31,
		Domestic-based		International-based		Merchant processing
		support services		support services		services
(dollars in millions):		2006	2005	2006	2005	2006	2005
United States	$	279.8	265.7	-	-	70.0	24.2
Europe		0.1	0.1	32.4	33.0	-	-
Canada		22.0	21.0	-	-	0.1	-
Japan		-	-	3.9	3.7	-	-
Mexico		2.5	1.7	-	-	-	-
Other		1.3	0.5	-	-	0.2	0.1
	$	305.7	289.0	36.3	36.7	70.3	24.3
Geographic area revenue by operating segment has been restated in 2005 to reflect the changes in operating segment.
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TSYS Announces Earnings for 2006
Page 10 of 10
Supplemental Information:
	Accounts on File at March 31,
(in millions)	2006	%		2005	%		% Change
Consumer	272.5	61.8	%	213.4	57.6	%	27.7	%
Retail	94.7	21.5		94.1	25.4		0.6
Commercial	31.2	7.1		26.8	7.2		16.4
Government services/EBT	19.2	4.4		16.7	4.5		14.8
Stored Value	14.9	3.4		12.6	3.4		18.0
Debit	7.9	1.8		7.0	1.9		13.2
	440.4	100.0	%	370.6	100.0	%	18.8	%
(in millions)	Mar 31, 2006			Mar 31, 2005			% Change
YTD Average Accounts on File	439.3			362.9			21.0	%
	Accounts on File at March 31,
(in millions)	2006	%		2005	%		% Change
Domestic	383.5	87.1	%	319.7	86.3	%	20.0	%
International	56.9	12.9		50.9	13.7		11.7
	440.4	100.0	%	370.6	100.0	%	18.8	%
Note: The accounts on file between domestic and international is based on the geographic domicile of processing clients.

Growth in Accounts on File (in millions):
	Mar 2005 to Mar 2006	Mar 2004 to Mar 2005
Beginning balance	370.6	280.4
Change in accounts on file due to:
Internal growth of existing clients	44.1	34.0
New clients	39.3	62.5
Purges/Sales	(12.3)	(5.1)
Deconversions	(1.3)	(1.2)
Ending balance	440.4	370.6
Number of Employees (FTEs):	2006	2005
At March 31,	6,583	6,421
YTD average for period ended March 31,	6,644	5,867
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