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

October 9, 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)

(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))

TABLE OF CONTENTS

EX-99.1 PRESS RELEASE DATED OCTOBER 9, 2008

EX-99.2 SUPPLEMENTAL INFORMATION

Item 2.02

Results of Operations and Financial Condition.

On October 9, 2008, Total System Services, Inc. (“Registrant”) issued a press release and will hold an investor call and webcast on October 10, 2008 to disclose financial results for the quarter ended September 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 October 9, 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: October 9, 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.
Contact:

Shawn Roberts
TSYS Investor Relations
+1.706.644.6081
shawnroberts@tsys.com

TSYS REPORTS RESULTS FOR THIRD QUARTER 2008
Revenues Up 9.4%

Columbus, Ga., October 9, 2008 — TSYS today announced its financial results for the third quarter ended September 30, 2008. Total revenues grew 9.4% to $500.4 million compared to $457.6 million in the prior year. Earnings per share for the third quarter were $0.33.

          “In spite of the turbulent economic times, we had a good quarter, fueled by revenue growth in our North American and Global Services segments, and decided to release our earnings early,” said Philip W. Tomlinson, chairman and chief executive officer of TSYS. “While much depends on consumer confidence and, as always, the upcoming holiday shopping season, which we now believe will be slow, we are reaffirming our net income guidance of an increase of 5% to 7%,” added Tomlinson.

Key Segment Results for the Third Quarter

North American Services

• Increased revenues by 6.8%

• Signed a multi-year commercial and consumer credit card processing agreement with First Citizens Bank of Raleigh, North Carolina. TSYS also provides merchant acquiring services to First Citizens

• Signed a multi-year agreement with Banco Wal-Mart de México Adelante, S.A. to launch its consumer credit card that includes fraud detection and analytic services

• Signed an agreement with Metrofinanciera for the launch of a new credit card program in Mexico

• Announced a partnership with Paragon Benefits in the roll-out of the My Care Card^SM to provide an “off-the-shelf” card product for flexible benefit payment processing

Global Services

• Increased revenues by 31.9%

• Improved operating profit margin by 174 basis points to 19.0%

• Signed a multi-year agreement to service approximately 3 million private-label store accounts for Argos and Homebase retail brands that are part of Home Retail Group, the UK’s leading home and general goods retailer

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PRESS RELEASE

Merchant Services

• Generated an operating profit margin of 22.9%

• Increased point-of-sale transaction volumes by 2%

Conference Call

           TSYS will host its quarterly conference call at 8:00 a.m. EDT, Friday, October 10, 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 (NYSE:TSS) 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, debt management, healthcare, loyalty and prepaid services for financial institutions and retail companies in the Americas, EMEA and Asia-Pacific regions. For more information contact news@tsys.com or log on to www.tsys.com. TSYS routinely posts all important information on its web site.

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’ 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 potential and completed acquisitions, including the costs associated therewith and 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

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PRESS RELEASE

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 Third Quarter 2008 Earnings
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TSYS
Financial Highlights
(unaudited)
(in thousands, except per share data)

	Three Months Ended									Nine Months Ended
	September 30,									September 30,
							Percentage									Percentage
	2008			2007			Change			2008			2007			Change
Revenues
Electronic payment processing services*	$	250,066			240,608			3.9	%	$	733,765			715,417			2.6	%
Merchant acquiring services		64,540			65,163			(1.0	)		191,806			190,120			0.9
Other services*		68,193			53,251			28.1			189,645			161,190			17.7
Revenues before reimbursables		382,799			359,022			6.6			1,115,216			1,066,727			4.5
Reimbursable items		117,593			98,543			19.3			330,012			280,597			17.6
Total revenues		500,392			457,565			9.4			1,445,228			1,347,324			7.3
Expenses
Salaries & other personnel expense*		153,263			144,990			5.7			449,246			430,966			4.2
Net occupancy & equipment expense*		75,399			68,715			9.7			223,075			205,342			8.6
Spin related expenses*		1,719			1,692			1.6			9,869			1,692		nm
Other operating expenses*		56,510			52,406			7.8			152,696			155,913			(2.1	)
Expenses before reimbursable items		286,891			267,803			7.1			834,886			793,913			5.2
Reimbursable items		117,593			98,543			19.3			330,012			280,597			17.6
Total operating expenses		404,484			366,346			10.4			1,164,898			1,074,510			8.4
Operating income		95,908			91,219			5.1			280,330			272,814			2.8
Nonoperating income:
Interest income		2,572			6,983			(63.2	)		6,833			18,630			(63.3	)
Interest expense		(2,737	)		(916	)	nm				(8,964	)		(1,492	)	nm
Gain on foreign currency translation, net		1,092			905			20.7			3,233			744		nm
Other		(992	)		21		nm				(278	)		79		nm
Nonoperating income		(65	)		6,993			(100.9	)		824			17,961			(95.4	)
Income before income taxes, minority interest and equity in income of equity investments		95,843			98,212			(2.4	)		281,154			290,775			(3.3	)
Income taxes		34,229			30,947			10.6			101,386			101,442			(0.1	)
Income before minority interest and equity in income of equity investments		61,614			67,265			(8.4	)		179,768			189,333			(5.1	)
Minority interest		(374	)		(484	)		22.7			(1,322	)		(1,435	)		7.9
Equity in income of equity investments		2,834			2,021			40.2			5,326			3,865			37.8
Net income	$	64,074			68,802			(6.9)	%	$	183,772			191,763			(4.2)	%
Basic earnings per share	$	0.33			0.35			(6.5)	%	$	0.94			0.98			(4.0)	%
Diluted earnings per share	$	0.33			0.35			(6.6)	%	$	0.93			0.97			(4.1)	%
Dividend declared per share	$	0.07			0.07					$	0.21			0.21
Average common shares outstanding		196,000			196,740						196,342			196,641
Average common and common equivalent shares outstanding		196,450			197,089						196,971			197,070

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

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TSYS Announces Third Quarter 2008 Earnings
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TSYS
Segment Breakdown
(unaudited)
(in thousands)

	Three Months Ended September 30, 2008															Three Months Ended September 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	$	245,172			85,118			58,357			—			388,647			242,574			64,148			59,471			—			366,193
Intersegment revenues		(5,205	)		(351	)		(292	)		—			(5,848	)		(6,960	)		(106	)		(105	)		—			(7,171	)
Revenues before reimbursables from external customers	$	239,967			84,767			58,065			—			382,799			235,614			64,042			59,366			—			359,022
Total revenues	$	345,881			88,090			74,613			—			508,584			323,973			66,779			76,185			—			466,937
Intersegment revenues		(7,549	)		(351	)		(292	)		—			(8,192	)		(9,162	)		(106	)		(104	)		—			(9,372	)
Revenues from external customers	$	338,332			87,739			74,321			—			500,392			314,811			66,673			76,081			—			457,565
Depreciation and amortization	$	23,967			9,658			6,783			—			40,408			24,581			6,455			6,570			—			37,606
Intersegment expenses	$	2,494			(3,012	)		(7,638	)		—			(8,156	)		3,515			(4,996	)		(7,892	)		—			(9,373	)
Segment operating income	$	63,786			16,751			17,090			(1,719	)		95,908			62,415			11,542			18,954			(1,692	)		91,219
Income before income taxes, minority interest and equity income of equity investments		62,948			17,370			17,244			(1,719	)		95,843			68,514			12,130			19,260			(1,692	)		98,212
Income tax expense	$	22,742			6,014			6,089			(616	)		34,229			19,999			4,033			6,915			—			30,947
Equity in income of equity investments	$	670			2,164			—			—			2,834			1,027			994			—			—			2,021
Net Income	$	40,876			13,146			11,155			(1,103	)		64,074			49,541			8,607			12,346			(1,692	)		68,802
Identifiable assets		1,378,606			360,002			169,389			—			1,907,997
Intersegment eliminations		(320,524	)		(960	)		(16	)		—			(321,500	)
Total assets		1,058,082			359,042			169,373			—			1,586,497

	Nine Months Ended September 30, 2008															Nine Months Ended September 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	$	730,192			230,107			171,777			—			1,132,076			736,246			175,154			174,160			—			1,085,560
Intersegment revenues		(15,099	)		(1,040	)		(721	)		—			(16,860	)		(17,490	)		(701	)		(642	)		—			(18,833	)
Revenues before reimbursables from external customers	$	715,093			229,067			171,056			—			1,115,216			718,756			174,453			173,518			—			1,066,727
Total revenues	$	1,010,958			237,816			220,117			—			1,468,891			970,666			182,913			218,821			—			1,372,400
Intersegment revenues		(21,902	)		(1,040	)		(721	)		—			(23,663	)		(23,733	)		(701	)		(642	)		—			(25,076	)
Revenues from external customers	$	989,056			236,776			219,396			—			1,445,228			946,933			182,212			218,179			—			1,347,324
Depreciation and amortization	$	73,994			26,150			20,019			—			120,163			76,272			17,762			20,179			—			114,213
Intersegment expenses	$	7,941			(9,201	)		(22,332	)		—			(23,592	)		10,052			(11,961	)		(23,162	)		—			(25,071	)
Segment operating income	$	204,012			35,937			50,250			(9,869	)		280,330			194,474			32,702			47,330			(1,692	)		272,814
Income before income taxes, minority interest and equity income of equity investments		203,126			36,989			50,908			(9,869	)		281,154			211,234			32,562			48,671			(1,692	)		290,775
Income tax expense	$	73,013			13,226			18,134			(2,987	)		101,386			73,529			10,441			17,472			—			101,442
Equity in income of equity investments	$	1,586			3,740			—			—			5,326			2,768			1,097			—			—			3,865
Net Income	$	131,700			26,180			32,774			(6,882	)		183,772			140,474			21,782			31,199			(1,692	)		191,763

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 Mexico has been reclassified from Global Services to North American Services.

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TSYS Announces Third Quarter 2008 Earnings
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TSYS
Balance Sheet
(in thousands)

	Sept 30, 2008			Dec 31, 2007
	(unaudited)			(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	309,004			210,518
Restricted cash		19,453			29,688
Accounts receivable, net		260,843			256,970
Deferred income tax assets		36,457			17,152
Prepaid expenses and other current assets		68,875			72,250
Total current assets		694,632			586,578
Property and equipment, net		283,400			283,138
Computer software, net		193,083			205,830
Contract acquisition costs, net		150,845			151,599
Goodwill, net		141,688			142,545
Equity investments, net		85,187			80,905
Other intangible assets, net		11,599			13,462
Other assets		26,063			14,963
Total assets	$	1,586,497			1,479,020
Liabilities and Shareholders’ Equity
Current liabilities:
Current portion of notes payable	$	70,184			8,648
Accrued salaries and employee benefits		51,244			85,142
Accounts payable		36,504			41,817
Current portion of obligations under capital leases		4,030			3,080
Other current liabilities		144,025			135,108
Total current liabilities		305,987			273,795
Notes payable, excluding current portion		182,148			252,659
Deferred income tax liabilities		72,782			67,428
Obligations under capital leases, excluding current portion		7,062			3,934
Other long-term liabilities		27,707			28,151
Total liabilities		595,686			625,967
Minority interests in consolidated subsidiaries		9,554			8,580
Shareholders’ Equity:
Common stock		20,036			19,966
Additional paid-in capital		125,801			104,762
Accumulated other comprehensive income, net		25,235			28,322
Treasury stock		(57,554	)		(34,138	)
Retained earnings		867,739			725,561
Total shareholders’ equity		981,257			844,473
Total liabilities and shareholders’ equity	$	1,586,497			1,479,020

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TSYS Announces Third Quarter 2008 Earnings
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TSYS
Cash Flow
(unaudited)
(in thousands)

	Nine Months Ended September 30,
	2008			2007
Cash flows from operating activities:
Net income	$	183,772			191,763
Adjustments to reconcile net income to net cash provided by operating activities:
Minority interests in consolidated subsidiaries’ net income		1,322			1,435
Equity in income of equity investments		(5,326	)		(3,865	)
Dividends received from equity investments		6,421			2,994
Gain on currency translation adjustments, net		(3,233	)		(744	)
Depreciation and amortization		120,163			114,213
Amortization of debt issuance costs		115			—
Share-based compensation		21,260			9,881
Excess tax benefit from share-based payment arrangements		(82	)		(4,022	)
Asset impairments		—			1,158
Provisions for bad debt expense and billing adjustments		2,779			1,612
Charges for transaction processing provisions		1,415			531
Deferred income tax benefit		(12,471	)		(6,828	)
Loss on disposal of equipment, net		180			497
(Increase) decrease in:
Accounts receivable		(10,701	)		(5,627	)
Prepaid expenses, other current assets and other long-term assets		(10,539	)		(1,041	)
Increase (decrease) in:
Accounts payable		(1,150	)		6,148
Accrued salaries and employee benefits		(33,770	)		(9,341	)
Other current liabilities and other long-term liabilities		23,428			(51,286	)
Net cash provided by operating activities		283,583			247,478
Cash flows from investing activities:
Purchases of property and equipment, net		(35,502	)		(36,420	)
Additions to licensed computer software from vendors		(22,797	)		(8,194	)
Additions to internally developed computer software		(14,976	)		(11,749	)
Cash used in acquisitions and equity investments		(1,459	)		(472	)
Additions to contract acquisition costs		(34,612	)		(20,878	)
Net cash used in investing activities		(109,346	)		(77,713	)
Cash flows from financing activities:
Proceeds from borrowings of long-term debt		2,506			73,968
Principal payments on long-term debt borrowings and capital lease obligations		(11,501	)		(3,893	)
Proceeds from exercise of stock options		266			5,258
Excess tax benefit from share-based payment arrangements		82			4,022
Repurchase of common stock		(23,594	)		—
Subsidiary dividends paid to noncontrolling shareholders		(241	)		—
Subsidiary repurchase of minority interest		(343	)		—
Dividends paid on common stock		(41,358	)		(41,425	)
Net cash used in financing activities		(74,183	)		37,930
Effect of exchange rate changes on cash and cash equivalents		(1,568	)		(3,984	)
Net increase in cash and cash equivalents		98,486			203,711
Cash and cash equivalents at beginning of year		210,518			389,123
Cash and cash equivalents at end of period	$	309,004			592,834

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