TSYS (NYSE: TSS) today reported third quarter total revenues of $432.3 million, a 4.9% increase over the second quarter of 2009. Compared to last year, total revenues were down 1.6%, which included an unfavorable impact of $10.3 million from foreign currency exchange rates during the quarter. On a non-GAAP basis, total revenues on a constant currency basis would have been $442.6 million.

Basic earnings per share (EPS) were $0.28 for the third quarter of 2009 and EPS from continuing operations were $0.29. TSYS completed the sale of TSYS Total Debt Management, a subsidiary of TSYS, and recognized a one-time loss in discontinued operations of $3.3 million in the quarter, or approximately $0.01 per share.

Despite the headwinds of foreign currency exchange rates and upfront costs related to international expansion, TSYS’ third quarter operating margins excluding reimbursable items increased sequentially by 87 basis points, and income from continuing operations increased 10.1%. This was a result of expense management, new business added and a slight increase in transactions.

“For the second quarter in a row, we are pleased to report sequential quarterly growth across the board in revenues, operating income and net income despite the challenging economic environment,” said Philip W. Tomlinson, chairman of the board and chief executive officer of TSYS.

“Our balance sheet remains very strong with cash increasing $76 million in the quarter and $209 million year-to-date to $420 million. Our accumulation of cash during these tough economic times is part of our plan to build a large capital base to deploy in support of our strategic plans. We have been aggressively pursuing acquisition opportunities around the globe and are confident we will accomplish this very important part of our corporate strategy,” said Tomlinson.

TSYS reaffirms its previously released guidance for 2009 of declines in revenues of 5% to 3% and net income of 13% to 11%.

Non-GAAP Measures

TSYS has included a schedule with this release that provides revenues and operating results on a constant currency basis. This non-GAAP measure presents third quarter and year-to-date 2009 financial results using the previous year’s foreign currency exchange rates. On a year-to-date constant currency basis, TSYS’ International Services segment’s total revenues grew 20.7% as compared to a reported GAAP decline of 0.6%, and operating income declined 8.7% versus a GAAP-reported decline of 30.7%.

This release contains non-GAAP financial measures to describe TSYS’ performance. The reconciliation of those measures to the most directly comparable GAAP measures is included in the financial tables of this release.

The non-GAAP financial measures of constant currency presented by TSYS are utilized by management to better understand and assess TSYS’ operating results and financial performance. TSYS also uses the non-GAAP financial measures to evaluate and assess TSYS’ financial performance against budget, as well as to evaluate financial performance for executive and management compensation purposes.

TSYS believes that non-GAAP financial measures are important to enable investors to understand and evaluate its ongoing operating results. Accordingly, TSYS includes non-GAAP financial measures when reporting its financial results to shareholders and investors in order to provide them with an additional tool to evaluate TSYS’ ongoing business operations. TSYS believes that the non-GAAP financial measures are representative of comparative financial performance that reflects the economic substance of TSYS’ current and ongoing business operations.

Although non-GAAP financial measures are often used to measure TSYS’ operating results and assess its financial performance, they are not necessarily comparable to similarly titled captions of other companies due to potential inconsistencies in the method of calculation.

TSYS provides reconciliations for each of its non-GAAP financial measures with its most directly comparable GAAP financial measure, whenever it is used. This enables shareholders and potential investors to easily assess the impact of any differences between the measure TSYS is presenting and similarly titled captions of other companies.

TSYS believes that its use of non-GAAP financial measures provides investors with the same key financial performance indicators that are utilized by management to assess TSYS’ operating results, evaluate the business and make operational decisions on a prospective, going-forward basis. Hence, management provides disclosure of non-GAAP financial measures to give shareholders and potential investors an opportunity to see TSYS as viewed by management, to assess TSYS with some of the same tools that management utilizes internally and to be able to compare such information with prior periods. TSYS believes that the presentation of GAAP financial measures alone would not provide its shareholders and potential investors with the ability to appropriately analyze its ongoing operational results, and therefore expected future results. TSYS therefore believes that inclusion of non-GAAP financial measures provides investors with additional information to help them better understand its financial statements just as management utilizes these non-GAAP financial measures to better understand the business, manage budgets and allocate resources.

Conference Call

TSYS will host its quarterly conference call at 5:00 p.m. EDT on Tuesday, October 27. 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. A slide presentation to accompany the call will be available by clicking on the “Conference Call” icon on the homepage of tsys.com.

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, 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 2009, 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) movements in LIBOR are greater than expected and draws on the remaining balance of the credit facility are greater than expected; (2) TSYS incurs expenses associated with the signing of a significant client; (3) adverse developments with respect to foreign currency exchange rates; (4) adverse developments with respect to entering into contracts with new clients and retaining current clients; (5) continued consolidation and turmoil in the financial services industry throughout 2009, including the merger of TSYS clients with entities that are not TSYS processing clients, the sale of portfolios by TSYS clients to entities that are not TSYS processing clients and the seizure by banking regulators of TSYS clients; (6) additional significant one-time spin costs are incurred; (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; (9) the material breach of security of any of TSYS' systems; (10) the impact of acquisitions, including their being more difficult to integrate than anticipated; (11) changes occur in laws, rules, regulations, credit card association rules or other industry standards affecting TSYS’ business which require significant product development efforts or reduce the market demand for or value of its products; (12) adverse developments with respect to the credit card industry in general, including a decline in the use of credit cards as a payment mechanism; and (13) growth rates of TSYS’ existing clients are lower than anticipated whether as a result of unemployment rates, card delinquencies and charge-off rates or otherwise. 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.