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

July 30, 2008

Date of Report (Date of Earliest Event Reported)

Total System Services, Inc.

(Exact Name of Registrant as Specified in its Charter)

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

One TSYS Way, Columbus, Georgia 31901

(Address of principal executive offices) (Zip Code)

(706) 649-2267

(Registrant’s telephone number, including area code)

1600 First Avenue, Columbus, Georgia 31901

(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:

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

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

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

o 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 July 30, 2008, Total System Services, Inc. (“Registrant”) issued a press release and will hold an investor call and webcast to disclose financial results for the quarter ended June 30, 2008. 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 July 30, 2008
99.2	Supplemental Information prepared for use with the press release

2

Signature

     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: July 30, 2008	By:	/s/ Kathleen Moates
		Kathleen Moates
		Senior Deputy General Counsel

3

EX-99.1

Exhibit 99.1

PRESS RELEASE

Total System Services, Inc.
One TSYS Way	+1.706.649.2307
P.O. Box 2567	+1.706.649.5740
Columbus, GA 31902-2567	www.tsys.com
For immediate release.
Contacts:

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

TSYS REPORTS RESULTS FOR SECOND QUARTER 2008

     Columbus, Ga., July 30, 2008 — TSYS today announced its financial results for the second quarter and the first six months of 2008.

     Basic earnings per share for the three months ended June 30, 2008 were $0.32, compared to $0.33 per share for the same period last year. Basic earnings per share for the six months ended June 30, 2008 were $0.61, compared to $0.63 per share for the same period last year. Excluding the one-time items related to the spin-off of TSYS by its former parent, Synovus Financial Corp., on a non-generally accepted accounting principles (non-GAAP) basis, earnings per share for the quarter were $0.33 and year to date were $0.64.

     Total revenues for the three months ended June 30, 2008 were $483.1 million, an increase of 5.0%, compared to $460.2 million for the same period in 2007. For the six months ended June 30, 2008, total revenues were $944.8 million, an increase of 6.2%, compared to $889.8 million for the same period in 2007. Year-to-date internal growth of existing electronic payment processing clients of 7% was impacted by price concessions and billing adjustments.

     Key financial drivers for the second quarter were:

• Electronic payment processing services revenue for the second quarter of 2008 was $242.4 million, a decrease of 1.0%, compared to $244.8 million for the same period last year, mainly the result of a decrease of 15.1% in accounts on file to 372.9 million at June 30, 2008. Sequentially, total consolidated accounts on file grew approximately 2.2%, or 7.9 million accounts, over the first quarter of 2008 and were up 4.4%, or 15.8 million accounts, since the end of third quarter of 2007, after the deconversion of a major client was completed in that quarter.

• Merchant acquiring services revenue for the second quarter of 2008 increased 2.0% over the same period in 2007, supported by 1.32 billion point-of-sale (POS) transactions, a 2% increase over the second quarter of 2007. Sequentially, merchant acquiring services revenues increased 6.3% over the first quarter of 2008, primarily driven by the increase in outgoing transactions and POS transactions increasing 7%.

• Other services revenue for the second quarter was $64.4 million, an increase of 16.9%, compared to $55.1 million for the same period last year, as a result of new call center business in the Global Services segment. Sequentially, other services revenue increased 12.8% over the first quarter of 2008.

Page 1 of 15

PRESS RELEASE

• Reimbursable items were $110.7 million, an increase of 15.3%, compared to $96.1 million for the same period last year. The increase relates to reimbursable court costs in our debt collection business.

     Operating income for the three months ended June 30, 2008 was $97.6 million, an increase of 1.8% over $95.9 million for the same period in 2007. For the six months ended June 30, 2008, operating income was $184.4 million, an increase of 1.6%, compared to $181.6 million for the same period in 2007.

• Excluding the one-time spin related costs, operating income on a non-GAAP basis for the second quarter of 2008 was $98.9 million, an increase of 3.1%, compared to $95.9 million in 2007. For the six months ended June 30, 2008, operating income on a non-GAAP basis was $192.6 million, an increase of 6.0%, compared to $181.6 million for the same period in 2007.

     Net income for the three months ended June 30, 2008 was $63.1 million, a decrease of 4.0%, compared to $65.7 million for the same period in 2007. For the six months ended June 30, 2008, net income was $119.7 million, a decrease of 2.7%, compared to $123.0 million for the same period in 2007. Net income for the three months and six months ended June 30, 2008, as compared to the same periods in 2007, was impacted by:

• The after-tax impact of the one-time spin related costs of $0.8 million for the three months and $5.8 million for the six months ended June 30, 2008, respectively, and

• A decrease in other income of approximately $5.4 million for the second quarter of 2008 and $10.1 million for the six months ended June 30, 2008 compared to the same periods last year, as a result of an increase in interest expense and a reduction in interest income.

Operating Segments

During the second quarter, TSYS renamed its reportable operating segments in a manner that reflects the way management views the business. The segments are now referred to as North American Services, Global Services and Merchant Services.

North American Services

For the second quarter of 2008, total revenues for the North American Services segment were $329.2 million, an increase of 1.2%, compared to $325.3 million for the same period last year. Year-to-date total revenues for the North American Services segment were $650.7 million, an increase of 2.9%, compared to $632.1 million for the same period last year.

     Key drivers for the North American Services segment include:

• At the end of June 2008, North American Services had 340.8 million accounts on file, a decrease of 18%, compared to 416.7 million accounts on file last year.

• For the second quarter of 2008, North American Services processed 1.7 billion transactions, a decrease of 34%, compared to 2.6 billion for the same period last year. Excluding the impact of deconverted clients in 2007, transactions processed increased 6%. Through the first six months of 2008, North American Services processed 3.3 billion transactions, a decrease of 34%, compared to 4.9 billion for

Page 2 of 15

PRESS RELEASE

the same period last year. Excluding the impact of deconverted clients in 2007, transactions processed increased 7%.

     In our North American Services segment, we had the following highlights:

• Renewed a long-term agreement with Target Corporation to service its REDcard portfolio.

• Renewed a multi-year agreement with Canadian Tire Financial Services, a division of Canadian Tire Corporation, Limited, to exclusively process its payment cards programs. Overall, TSYS renewed agreements with six clients, including four of its Top 20 processing clients, and all are signed through at least 2012.

• Signed a payments processing agreement with Globalcard, a Mexican-based credit card company dedicated to serving the unbanked market in Mexico, for the launch of its consumer credit card portfolio.

• Announced an agreement with PartnersFirst Affinity Services, a division of Torrey Pines Bank, to process its consumer credit card portfolio.

Global Services

For the second quarter of 2008, total revenues for the Global Services segment were $79.6 million, an increase of 31.9%, compared to $60.4 million for the same period last year. Year-to-date total revenues for the Global Services segment were $149.0 million, an increase of 28.9%, compared to $115.5 million for the same period last year. The increase is driven by growth in accounts and transactions processed.

     Key drivers for the Global Services segment include:

• At the end of June 2008, Global Services had 32.1 million accounts on file, an increase of 42%, compared to 22.5 million accounts on file last year.

• For the second quarter of 2008, Global Services processed 264.5 million transactions, an increase of 28%, compared to 207.2 million for the same period last year. Through the first six months of 2008, Global Services processed 481.9 million transactions, an increase of 20%, compared to 403.2 million for the same period last year.

• Sequential revenue and operating income of Global Services grew 14.7% and 57.7%, respectively, over the first quarter of 2008, as new client business converted in the first quarter began producing revenues. Operating income margin for the second quarter of 2008 increased to 15.3% from 11.0% in the first quarter of 2008.

Merchant Services

For the second quarter of 2008, total revenues for the Merchant Services segment were $74.3 million, a decrease of 0.2%, compared to $74.5 million for the same period last year. Year-to-date total revenues for the Merchant Services segment were $145.1 million, an increase of 2.1%, compared to $142.1 million for the same period last year.

     Key drivers for the Merchant Services segment include:

Page 3 of 15

PRESS RELEASE

• During the second quarter of 2008, Merchant Services processed 1.32 billion POS transactions, an increase of 2%, compared to 1.29 billion for the same period last year. Through the first six months of 2008, Merchant Services processed 2.53 billion POS transactions, an increase of 3%, compared to 2.45 billion for the same period last year.

     For the second quarter and first six months of 2008, Merchant Services segment results were impacted by price compression and deconversions. However, Merchant Services segment experienced solid growth in sequential POS and back-end volumes.

Overview and Outlook

Addressing the company’s second quarter and year to date results, Philip W. Tomlinson, chairman of the board and chief executive officer of TSYS said: “Given the economic environment that our clients are struggling with, we are extremely pleased with our quarterly consolidated total revenue growth of 5% over 2007, and our year to date growth of 6%.”

     “Our North American Services segment year to date total revenues growth of 2.9% and operating margin of 29.5%, as compared to 27.3% for the same period last year, reflects our ability to manage expenses in a slowing US economy. Our electronic payment processing business is very solid with many clients who are among the stalwarts of the US economy.”

     “Our Merchant Services segment, which is also primarily based in the US, grew its revenue 2.1% over the first six months of 2007. The takeaway from this segment is that it contributed significantly to operating income with its margins increasing 449 basis points over 2007’s to 29.4%. Sequentially, we have seen growth in transaction volumes of 7%.”

     “Our Global Services segment grew total revenues 28.9% over the first six months of 2007. In addition, its quarterly revenues were up 31.9% over 2007’s second quarter and sequentially over the first quarter of 2008 by 14.7%. As we expected, Global Services’ operating margins increased 428 basis points over the first quarter to 15.3% and we expect that margin to continue its improvement over the remainder of the year. Global Services remains a very strong driver of our revenue growth.”

     “On a consolidated basis, we include in our management review changes in revenues before reimbursables excluding those clients’ portfolios that deconverted year over year. On that basis, our quarterly revenues before reimbursables increased 9.2% over 2007’s second quarter and our year to date growth was 10.2%. Included in this press release is a table reconciling these non-GAAP metrics to our GAAP reported revenues before reimbursables. Consolidated operating income included $8.1 million of one-time spin expenses. Excluding these items, our operating income margin was 26.3% which was a 63 basis point increase over the first six months of 2007. These results are in line with expectations that our ability to manage expenses in relation to our top line growth is rigorous.”

     “At the mid-point of 2008, we have seen many of our clients’ financial results suffering as a result of the slowing economies around the world and the worst turmoil we have ever seen in the financial markets. This has obviously had a negative impact on their performance and expectations; and we are no exception.”

Page 4 of 15

PRESS RELEASE

     “Our analysis shows that we would have to grow consolidated revenues before reimbursables by 7.3% and total revenues by 11.7% over 2007’s second half results in order to achieve the low end of our guidance for 2008. We started 2008 with great enthusiasm and expectation that our historical trends of client activity would continue. It is now apparent that our clients’ activity is being hampered by the economic environment, which has greatly deteriorated since our original forecast. Our estimates for the remainder of 2008 have resulted in lowering our full year guidance for revenues before reimbursables to the 5% to 7% range versus our previous guidance of 8% to 10%. Total revenue guidance is now estimated at 6% to 8% versus previous guidance of 7% to 9%. Full year guidance for EPS is being reduced from 7% to 9% to the 5% to 7% range resulting in estimates on a GAAP basis of $1.27 to $1.29 and excluding one-time spin costs from $1.32 to $1.34.

     As previously discussed in our quarterly conference calls, there has been a significant shift to reimbursable revenues due to contract changes in our debt collection business. These revenues are now estimated to be in the $420 to $430 million range versus previous guidance of $391 to $399 million. We have included an updated table in this press release reflecting these adjustments to our guidance along with reconciliations to GAAP.”

     “We are enthusiastic about our future prospects and our ability to meet the challenges of these very stressful economic times. We continue to develop innovative products and state of the art technology for our clients that enhance their ability to get information faster, better and cheaper to use in the management of their portfolios. We don’t just do business with our clients, we partner with them.”

Projected Outlook for 2008

TSYS expects its 2008 net income to increase between 5-7%, as compared to 2007, based on the following assumptions:

1. Expenses associated with the spin-off, net of tax, will be $10 million. In 2008, expenses associated with the spin-off are classified under GAAP as operating expenses and income taxes. These estimates are subject to change as operating expenses include estimates of services being provided on an ongoing basis during the transition period after the spin-off. These items are summarized as follows with a comparison to 2007:

Page 5 of 15

PRESS RELEASE

	2008E			2007
Conversion of Synovus stock options to TSYS stock options	$	7			6
Other operating expenses		9			8
Total operating expenses	$	16			14
Tax impact*		(6	)		(2	)
Other operating expenses, net of tax impact	$	10			12
Income taxes related to deconsolidation		—			11
Total	$	10			23

* Certain expenses in a re-organization, such as the spin-off, are not deductible for tax purposes. A majority of the expenses in 2007 are not deductible. A smaller amount of non-deductible expenses is expected in 2008.

2.	There will be no significant movements in LIBOR and no significant draws on the $252 million revolving credit facility.
3.	Estimated total revenues will increase 6% to 8% in 2008. Excluding the revenues associated with deconverted portfolios and reimbursable items, estimated non-GAAP total revenues will increase in the range of 9% to 11% over 2007 levels.
4.	Anticipated growth levels in employment, equipment and other expenses, which are included in 2008 estimates, will be accomplished.
5.	There will be no significant movement in foreign currency exchange rates related to TSYS’ business.
6.	TSYS will not incur significant expenses associated with the conversion of new large clients or acquisitions, or any significant impairment of goodwill or other intangibles, and there will be no significant portfolio deconversions.

Page 6 of 15

PRESS RELEASE

     Presentation of revenues and earnings excluding the spin-related costs, revenues associated with deconverted portfolios, and reimbursable items are non-GAAP financial measures. The following table is a reconciliation of the range of changes from 2007 to 2008, comparing non-GAAP financial measures to GAAP financial measures for 2007 and estimated financial measures for 2008.

	Range of Guidance
	($ in millions)					08 vs. 07
	2008		2007			Percent
(Amounts in millions, except per share amounts; certain amounts have been adjusted due to rounding)	Forecast		Actual			Change
TOTAL REVENUES	$1,920 to $1,958		$	1,806		6% to 8%
Less: reimbursable items	($420 to $430)			($378	)
Revenues excluding reimbursable items	$1,500 to $1,528		$	1,428		5% to 7%
Less: revenues associated with deconverted portfolios		—		($55	)
Revenues excluding reimbursable items and revenues associated with deconverted portfolios	$1,500 to $1,528		$	1,373		9% to 11%
NET INCOME	$250 to $254		$	237		5% to 7%
Add: interest, taxes and other nonoperating items	$	142 to $146	$	117
OPERATING INCOME	$392 to $400		$	354		11% to 13%
Add: operating spin-related costs	$	16	$	14
Operating income, excluding spin-related expenses	$408 to $416		$	368		11% to 13%
Add: depreciation and amortization	$	151	$	152
EBITDA — earnings before interest, taxes, depreciation and amortization, excluding spin-related costs	$559 to $567		$	520		8% to 9%
NET INCOME	$250 to $254		$	237		5% to 7%
Add: spin-related costs, net of tax	$	10	$	23
Net income, excluding spin related expenses	$260 to $264		$	260		0% to 2%
EARNINGS PER SHARE (EPS) — BASIC	$1.27 to $1.29		$	1.21		5% to 7%
Add: spin-related costs, net of tax per share	$	0.05	$	0.11
EPS, excluding spin related expenses	$1.32 to $1.34		$	1.32		0% to 2%
Common shares outstanding		196.282		196.759

     TSYS believes the table above and the table on page 15 present meaningful information to assist investors in understanding the company’s changes in total revenues and net income from estimates in changes from 2007 to 2008 as a result of deconverted portfolios and spin-related costs as the non-GAAP financial measures exclude amounts that the company does not consider part of ongoing operating results. TSYS believes the information is useful for investors because it

Page 7 of 15

PRESS RELEASE

can provide a more complete understanding of TSYS’ underlying operational performance. The non-GAAP financial percentage changes should not be considered by themselves or as a substitute for the GAAP percentage changes year over year. The non-GAAP measures should be considered as an additional view of the way TSYS’ financial measures are affected by deconverted portfolios, reimbursable items and spin-related costs; and should be used in conjunction with all publicly filed financial statements and reports.

Conference Call

     TSYS will host its quarterly conference call at 5:00 p.m. EDT, Wednesday, July 30, 2008. The conference call can be accessed via simultaneous Internet broadcast at 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, healthcare, loyalty, prepaid services and debt management for financial institutions and retail companies in the Americas, EMEA and Asia-Pacific regions. For more information, contact news@tsys.com.

     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’ expectation that Global Services operating margins will continue to improve over the year, TSYS’ earnings forecast for 2008, and the assumptions underlying such statements. 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: (1) revenues that are lower than anticipated; (2) expenses associated with the spin-off are higher than expected; (3) movements in LIBOR are greater than expected and draws on the revolving credit facility are greater than expected; (4) TSYS incurs expenses associated with the signing of a significant client; (5) adverse developments with respect to foreign currency exchange rates; (6) adverse developments with respect to entering into contracts with new clients and retaining current clients; (7) TSYS is unable to control expenses and increase market share; (8) TSYS is unable to manage the impact of slowing economic conditions and consumer spending; and (9) the impact of acquisitions, including their being more difficult to integrate than 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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Page 8 of 15

EX-99.2

Exhibit 99.2

TSYS Announces Second Quarter 2008 Earnings
Page 9 of 15

TSYS
Financial Highlights
(unaudited)
(in thousands, except per share data)

	Three Months Ended									Six Months Ended
	June 30,									June 30,
							Percentage									Percentage
	2008			2007			Change			2008			2007			Change
Revenues
Electronic payment processing services*	$	242,420			244,750			(1.0	)%	$	483,699			474,809			1.9	%
Merchant acquiring services		65,576			64,277			2.0			127,242			124,957			1.8
Other services*		64,379			55,067			16.9			121,475			107,939			12.5
Revenues before reimbursables		372,375			364,094			2.3			732,416			707,705			3.5
Reimbursable items		110,738			96,061			15.3			212,419			182,053			16.7
Total revenues		483,113			460,155			5.0			944,835			889,758			6.2
Expenses
Salaries & other personnel expense*		147,666			145,532			1.5			295,983			285,976			3.5
Net occupancy & equipment expense*		74,789			69,278			8.0			147,676			136,627			8.1
Spin related expenses*		1,255			—		nm				8,150			—		nm
Other operating expenses*		51,018			53,368			(4.4	)		96,186			103,507			(7.1	)
Expenses before reimbursable items		274,728			268,178			2.4			547,995			526,110			4.2
Reimbursable items		110,738			96,061			15.3			212,419			182,053			16.7
Total operating expenses		385,466			364,239			5.8			760,414			708,163			7.4
Operating income		97,647			95,916			1.8			184,421			181,595			1.6
Other income:
Interest income		1,698			6,159			(72.4	)		4,261			11,647			(63.4	)
Interest expense		(2,887	)		(366	)	nm				(6,227	)		(576	)	nm
Miscellaneous income		507			—		nm				507			—		nm
Gain (loss) on foreign currency translation, net		198			(845	)		123.4			2,141			(162	)	nm
Dividend income		72			44			63.6			207			58			256.9
Other income		(412	)		4,992			(108.3	)		889			10,967			(91.9	)
Income before income taxes, minority interest and equity in income of equity investments		97,235			100,908			(3.6	)		185,310			192,562			(3.8	)
Income taxes		34,122			35,603			(4.2	)		67,157			70,494			(4.7	)
Income before minority interest and equity in income of equity investments		63,113			65,305			(3.4	)		118,153			122,068			(3.2	)
Minority interest		(697	)		(602	)		(15.8	)		(947	)		(952	)		0.5
Equity in income of equity investments		668			985			(32.2	)		2,492			1,845			35.1
Net income	$	63,084			65,688			(4.0	)%	$	119,698			122,961			(2.7	)%
Basic earnings per share	$	0.32			0.33			(3.8	)%	$	0.61			0.63			(2.6	)%
Diluted earnings per share	$	0.32			0.33			(3.9	)%	$	0.61			0.62			(2.7	)%
Dividend declared per share	$	0.07			0.07					$	0.14			0.14
Average common shares outstanding		196,281			196,693						196,513			196,591
Average common and common equivalent shares outstanding		196,970			197,150						197,193			197,084

*	Certain amounts have been previously reclassed to conform with the presentation adopted in 2008.
nm = not meaningful

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TSYS Announces Second Quarter 2008 Earnings
Page 10 of 15

TSYS
Segment Breakdown
(unaudited)
(in thousands)

	Three Months Ended June 30, 2008															Three Months Ended June 30, 2007
	North American			Global			Merchant			Spin-Related						North American			Global			Merchant			Spin-Related
	Services			Services			Services			Costs			Consolidated			Services			Services			Services			Costs		Consolidated
Revenues before reimbursables	$	242,248			77,032			58,291			—			377,571			253,566			58,043			59,008			—		370,617
Intersegment revenues		(4,663	)		(286	)		(247	)		—			(5,196	)		(5,754	)		(372	)		(397	)		—		(6,523	)
Revenues before reimbursables from external customers	$	237,585			76,746			58,044			—			372,375			247,812			57,671			58,611			—		364,094
Total revenues	$	336,168			79,903			74,567			—			490,638			333,098			60,733			74,888			—		468,719
Intersegment revenues		(6,992	)		(286	)		(247	)		—			(7,525	)		(7,795	)		(372	)		(397	)		—		(8,564	)
Revenues from external customers	$	329,176			79,617			74,320			—			483,113			325,303			60,361			74,491			—		460,155
Depreciation and amortization	$	25,047			8,797			6,682			—			40,526			25,740			5,507			6,763			—		38,010
Intersegment expenses	$	2,673			(2,649	)		(7,514	)		—			(7,490	)		3,061			(3,726	)		(7,899	)		—		(8,564	)
Segment operating income	$	69,075			11,741			18,086			(1,255	)		97,647			69,578			10,048			16,290			—		95,916
Income before income taxes, minority interest and equity income of equity investments	$	69,343			10,867			18,280			(1,255	)		97,235			75,107			9,053			16,748			—		100,908
Income tax expense	$	23,634			4,299			6,637			(448	)		34,122			27,344			2,235			6,024			—		35,603
Equity in income of equity investments	$	366			302			—			—			668			824			161			—			—		985
Net Income	$	46,074			6,174			11,643			(807	)		63,084			48,587			6,377			10,724			—		65,688
Identifiable assets		1,326,230			354,861			181,556			—			1,862,647
Intersegment eliminations		(314,768	)		(1,716	)		(84	)		—			(316,568	)
Total assets		1,011,462			353,145			181,472			—			1,546,079

	Six Months Ended June 30, 2008															Six Months Ended June 30, 2007
	North American			Global			Merchant			Spin-Related						North American			Global			Merchant			Spin-Related
	Services			Services			Services			Costs			Consolidated			Services			Services			Services			Costs		Consolidated
Revenues before reimbursables	$	485,019			144,989			113,420			—			743,428			493,672			111,006			114,689			—		719,367
Intersegment revenues		(9,894	)		(689	)		(429	)		—			(11,012	)		(10,529	)		(595	)		(538	)		—		(11,662	)
Revenues before reimbursables from external customers	$	475,125			144,300			112,991			—			732,416			483,143			110,411			114,151			—		707,705
Total revenues	$	665,077			149,726			145,504			—			960,307			646,693			116,134			142,635			—		905,462
Intersegment revenues		(14,354	)		(689	)		(429	)		—			(15,472	)		(14,571	)		(595	)		(538	)		—		(15,704	)
Revenues from external customers	$	650,723			149,037			145,075			—			944,835			632,122			115,539			142,097			—		889,758
Depreciation and amortization	$	50,027			16,492			13,236			—			79,755			51,691			11,307			13,609			—		76,607
Intersegment expenses	$	5,447			(6,190	)		(14,694	)		—			(15,437	)		6,537			(6,965	)		(15,270	)		—		(15,698	)
Segment operating income	$	140,225			19,186			33,160			(8,150	)		184,421			132,059			21,160			28,376			—		181,595
Income before income taxes, minority interest and equity income of equity investments	$	140,178			19,618			33,664			(8,150	)		185,310			142,720			20,431			29,411			—		192,562
Income tax expense	$	50,271			7,212			12,045			(2,371	)		67,157			53,529			6,407			10,558			—		70,494
Equity in income of equity investments	$	916			1,576			—			—			2,492			1,742			103			—			—		1,845
Net Income	$	90,823			13,035			21,619			(5,779	)		119,698			90,933			13,175			18,853			—		122,961

Note: Revenues from North American 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 Global 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 Services include TSYS Acquiring’s merchant acquiring and related services.

Effective February 1, 2008, TSYS merged the operations of Golden Retriever LLC with TSYS Acquiring Solutions, LLC. As a result of the merger, the results of Golden Retriever for prior periods have been reclassified to reflect the move from North American Services to the Merchant Services segment.

Equity in income of equity investments for TSYS de México has been reclassified from Global Services to North American Services.

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TSYS Announces Second Quarter 2008 Earnings
Page 11 of 15

TSYS
Balance Sheet
(in thousands)

	June 30, 2008			Dec 31, 2007
	(unaudited)			(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	257,803			210,518
Restricted cash		25,315			29,688
Accounts receivable, net		267,678			256,970
Deferred income tax assets		30,707			17,152
Prepaid expenses and other current assets		72,635			72,250
Total current assets		654,138			586,578
Property and equipment, net		288,159			283,138
Computer software, net		189,616			205,830
Contract acquisition costs, net		159,468			151,599
Goodwill, net		143,172			142,545
Equity investments, net		85,377			80,905
Other intangible assets, net		12,567			13,462
Other assets		13,582			14,963
Total assets	$	1,546,079			1,479,020
Liabilities and Shareholders’ Equity
Current liabilities:
Current portion of notes payable	$	74,050			8,648
Accrued salaries and employee benefits		47,315			85,142
Accounts payable		40,277			41,817
Current portion of obligations under capital leases		3,686			3,080
Other current liabilities		141,020			135,108
Total current liabilities		306,348			273,795
Notes payable, excluding current portion		184,061			252,659
Deferred income tax liabilities		73,623			67,428
Obligations under capital leases, excluding current portion		7,963			3,934
Other long-term liabilities		31,005			28,151
Total liabilities		603,000			625,967
Minority interests in consolidated subsidiaries		9,801			8,580
Shareholders’ Equity:
Common stock		20,037			19,966
Additional paid-in capital		120,246			104,762
Accumulated other comprehensive income, net		33,076			28,322
Treasury stock		(57,566	)		(34,138	)
Retained earnings		817,485			725,561
Total shareholders’ equity		933,278			844,473
Total liabilities and shareholders’ equity	$	1,546,079			1,479,020

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TSYS Announces Second Quarter 2008 Earnings
Page 12 of 15

TSYS
Cash Flow
(unaudited)
(in thousands)

	Six Months Ended June 30,
	2008			2007
Cash flows from operating activities:
Net income	$	119,698			122,961
Adjustments to reconcile net income to net cash provided by operating activities:
Minority interests in consolidated subsidiaries’ net income		947			952
Equity in income of equity investments		(2,492	)		(1,845	)
Dividends received from equity investments		3,248			2,994
(Gain) loss on currency translation adjustments, net		(2,141	)		162
Depreciation and amortization		79,755			76,607
Amortization of debt issuance costs		77			—
Share-based compensation		15,675			6,596
Excess tax benefit from share-based payment arrangements		(81	)		(3,869	)
Asset impairments		—			620
Provisions for bad debt expense and billing adjustments		3,201			148
Charges for transaction processing provisions		(541	)		437
Deferred income tax benefit		(9,016	)		(2,760	)
Loss on disposal of equipment, net		159			23
(Increase) decrease in:
Accounts receivable		(14,130	)		(6,150	)
Prepaid expenses, other current assets and other long-term assets		870			(8,921	)
Increase (decrease) in:
Accounts payable		686			(814	)
Accrued salaries and employee benefits		(37,814	)		(31,870	)
Other current liabilities and other long-term liabilities		16,666			(35,765	)
Net cash provided by operating activities		174,767			119,506
Cash flows from investing activities:
Purchases of property and equipment, net		(26,296	)		(21,438	)
Additions to licensed computer software from vendors		(8,598	)		(4,810	)
Additions to internally developed computer software		(8,332	)		(7,458	)
Cash used in acquisitions and equity investments		(295	)		(472	)
Additions to contract acquisition costs		(28,417	)		(9,542	)
Net cash used in investing activities		(71,938	)		(43,720	)
Cash flows from financing activities:
Proceeds from borrowings of long-term debt		2,506			6,805
Principal payments on long-term debt borrowings and capital lease obligations		(6,870	)		(1,744	)
Proceeds from exercise of stock options		251			5,112
Excess tax benefit from share-based payment arrangements		81			3,869
Repurchase of common stock		(23,594	)		—
Subsidiary dividends paid to noncontrolling shareholders		(241	)		—
Dividends paid on common stock		(27,768	)		(27,598	)
Net cash used in financing activities		(55,635	)		(13,556	)
Effect of exchange rate changes on cash and cash equivalents		91			841
Net increase in cash and cash equivalents		47,285			63,071
Cash and cash equivalents at beginning of year		210,518			389,123
Cash and cash equivalents at end of period	$	257,803			452,194

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TSYS Announces Second Quarter 2008 Earnings
Page 13 of 15

Geographic Area Data:

The following geographic area data represents revenues for the three months ended June 30 based on where the client is domiciled:

	Three Months Ended June 30,
(dollars in millions):	2008		%			2007		%			% Chg
United States	$	365.4		75.6	%	$	362.5		78.8	%		0.8	%
Europe		68.3		14.1			49.1		10.7			39.1
Canada		31.3		6.5			30.8		6.7			1.5
Japan		8.1		1.7			6.1		1.3			34.2
Mexico		4.0		0.8			3.3		0.7			21.2
Other		6.0		1.3			8.4		1.8			(28.7	)
	$	483.1		100.0	%	$	460.2		100.0	%		5.0	%

The following geographic area data represents revenues for the six months ended June 30 based on where the client is domiciled:

	Six Months Ended June 30,
(dollars in millions):	2008		%			2007		%			% Chg
United States	$	719.5		76.2	%	$	700.2		78.7	%		2.8	%
Europe		127.2		13.5			95.0		10.7			33.9
Canada		62.9		6.7			60.8		6.8			3.4
Japan		15.6		1.6			11.4		1.3			36.9
Mexico		7.7		0.8			6.5		0.7			17.8
Other		11.9		1.2			15.9		1.8			(24.4	)
	$	944.8		100.0	%	$	889.8		100.0	%		6.2	%

Geographic Area Revenue by Operating Segment:

The following table reconciles revenues by geography to revenues by reporting segment for the three months ended June 30:

	Three Months Ended June 30,
	North American				Global				Merchant
	Services				Services				Services
(dollars in millions):	2008		2007		2008		2007		2008		2007
United States	$	291.4		288.2		—		0.2		74.0		74.1
Europe		0.2		0.4		68.1		48.7		—		—
Canada		31.1		30.7		—		—		0.2		0.1
Japan		—		—		8.1		6.1		—		—
Mexico		4.0		3.3		—		—		—		—
Other		2.5		2.7		3.4		5.4		0.1		0.3
	$	329.2		325.3		79.6		60.4		74.3		74.5

The following table reconciles revenues by geography to revenues by reporting segment for the six months ended June 30:

	Six Months Ended June 30,
	North American				Global				Merchant
	Services				Services				Services
(dollars in millions):	2008		2007		2008		2007		2008		2007
United States	$	575.0		558.6		0.1		0.2		144.4		141.4
Europe		0.5		0.9		126.7		94.1		—		—
Canada		62.6		60.5		—		—		0.3		0.3
Japan		—		—		15.6		11.4		—		—
Mexico		7.7		6.5		—		—		—		—
Other		4.9		5.6		6.6		9.9		0.4		0.4
	$	650.7		632.1		149.0		115.6		145.1		142.1

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TSYS Announces Second Quarter 2008 Earnings
Page 14 of 15

Supplemental Information:

	Accounts on File at June 30,
(in millions)	2008		%			2007		%			% Change
Consumer		211.9		56.8	%		277.0		63.1	%		(23.5	)%
Retail		58.6		15.7			57.3		13.0			2.2
Commercial		41.7		11.2			35.0		8.0			19.3
Government services		24.5		6.6			21.9		5.0			11.8
Stored Value		31.2		8.4			42.9		9.8			(27.2	)
Debit		5.0		1.3			5.1		1.1			(1.5	)
		372.9		100.0	%		439.2		100.0	%		(15.1	)%

(in millions)	June 30, 2008		June 30, 2007		% Change
QTD Average Accounts on File		371.6		433.6		(14.3	)%
YTD Average Accounts on File		370.9		426.0		(12.9	)

	Accounts on File at June 30,
(in millions)	2008		%			2007		%			% Change
Domestic		289.0		77.5	%		368.0		83.8	%		(21.5	)%
International		83.9		22.5			71.2		16.2			17.8
		372.9		100.0	%		439.2		100.0	%		(15.1	)%

Note: The accounts on file between domestic and international is based on the geographic domicile of processing clients.

	June 2007 to			June 2006 to
Growth in Accounts on File (in millions):	June 2008			June 2007
Beginning balance		439.2			366.5
Change in accounts on file due to:
Internal growth of existing clients		39.5			33.1
New clients		30.1			105.5
Purges/Sales		(13.3	)		(14.0	)
Deconversions		(122.6	)		(51.9	)
Ending balance		372.9			439.2

Number of Employees (FTEs):	2008		2007
At June 30,		7,582		6,773
Quarterly average for period ended June 30,		7,572		6,783
YTD average for period ended June 30,		7,388		6,755

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TSYS Announces Second Quarter 2008 Earnings
Page 15 of 15

RECONCILIATION OF GAAP TO NON-GAAP

	Three Months Ended June 30,									Six Months Ended June 30,
(in thousands, except per share)	2008			2007			% Change			2008			2007			% Change
REVENUES
Revenues before reimbursables	$	372,375			364,094			2.3	%	$	732,416			707,705			3.5	%
Deduct: revenues associated with deconverted portfolios		(4,965	)		(27,518	)					(9,706	)		(51,681	)
Revenues before reimbursables, excluding revenues associated with deconverted portfolios	$	367,410			336,576			9.2	%	$	722,710			656,024			10.2	%
OPERATING INCOME
Operating income	$	97,647			95,916			1.8	%	$	184,421			181,595			1.6	%
Add: spin-related costs		1,255			—						8,150			—
Operating income, excluding spin-related expenses	$	98,902			95,916			3.1	%	$	192,571			181,595			6.0	%
Revenues before reimbursables	$	372,375			364,094					$	732,416			707,705
Total revenues	$	483,113			460,155					$	944,835			889,758
Operating margin, as reported		20.2	%		20.8	%					19.5	%		20.4	%
Operating margin, excluding reimbursables		26.2	%		26.3	%					25.2	%		25.7	%
Operating margin, excluding reimbursables and spin-related expenses		26.6	%		26.3	%					26.3	%		25.7	%
NET INCOME
Net income	$	63,084			65,688			(4.0	)%	$	119,698			122,961			(2.7	)%
Add: spin-related costs, net of tax		807			—						5,778			—
Net income, excluding spin-related expenses	$	63,891			65,688			(2.7	)%	$	125,476			122,961			2.0	%
Common shares outstanding		196,281			196,693						196,513			196,591
EARNINGS PER SHARE (EPS) — Basic
Basic earnings per share	$	0.32			0.33			(3.8	)%	$	0.61			0.63			(2.6	)%
Add: spin-related costs, net of tax per share		0.01			—						0.03			—
Basic EPS, excluding spin-related expenses	$	0.33			0.33			(2.5	)%	$	0.64			0.63			2.1	%

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