TSYS Reports 41.7% Increase in Net Income for First Quarter; After Lar

TSYS Reports 41.7% Increase in Net Income for First Quarter; After Largest Quarterly Increase in Five Years, Company Raises 2005 Earnings Guidance to 22-25%

    Business Editors

    COLUMBUS, Ga.--(BUSINESS WIRE)--April 19, 2005--TSYS(R) today announced that its financial results for the first quarter of 2005 had exceeded its earnings per share (EPS) expectations.
    Below is a summary of the results for the quarter ended March 31, 2005, as compared to the same period in 2004:

Three Months Ended ---------------------- March 31, ---------------------- (dollars in millions, Percent except earnings per share data) 2005 2004 Change ----------------------------------------------- ------- ------ ------- Revenues Before Reimbursables $280.4 224.6 24.8 Total Revenues 350.0 285.2 22.7 Operating Income 66.3 44.1 50.2 Net Income 46.1 32.6 41.7 Basic EPS 0.23 0.17 41.5 Diluted EPS 0.23 0.17 41.7

    "We are extremely pleased with the results for the first quarter of 2005 and believe this gives us a great start towards another record year," said Philip W. Tomlinson, chief executive officer. "The results for the quarter are above our expectations. TSYS' strength for the quarter included the consolidated results of Vital, strong growth in ancillary services and good expense controls. As a result, we are increasing our earnings guidance from 19-22% to 22-25% for the year."

    Highlights for the quarter include:

--	TSYS acquired the remaining 50% interest in Vital Processing Services, L.L.C., in Tempe, Arizona, from Visa U.S.A. and began consolidating its results on March 1, 2005.
--	TSYS signed a seven-year contract with ABN AMRO Bank, Barneveld, Netherlands, which represents the first processing agreement with a card issuer based in continental Europe. Additionally, TSYS will provide customer care services on behalf of ABN AMRO by managing a customer contact center in The Netherlands. The center will support full end-to-end customer service, including general customer service queries, application processing, chargebacks and dispute handling, fraud and collections.
--	TSYS and Bank of America agreed to add five years to the current agreement to provide exclusive processing services through 2014. The expanded relationship covers all consumer and commercial credit Visa and MasterCard accounts issued by Bank of America, as well as the recently acquired portfolio of FleetBoston Financial Corp., which was converted to TSYS in mid-March.
--	MBNA, based in Wilmington, Delaware, extended its existing seven-year relationship with TSYS for commercial-card processing services by an additional three years.
--	TSYS successfully implemented two retail gift card programs in Europe -- one for HMV, the largest retailer of music, DVD and games in the UK and another for Hunkemoller, a leading specialist retailer in The Netherlands, with outlets in Germany, Denmark, France, Luxembourg and Belgium.
--	TSYS announced that Answers, etc. will use TSYS Prepaid's platform to power the Zoomcard Prepaid MasterCard. The Zoomcard, issued by KeyBank, is accepted at more than 900,000 ATMs and more than 24 million merchant locations worldwide.
--	TSYS Prepaid announced it was sponsoring the creation of an industry-wide prepaid card trade association. The trade association will help advance the rapidly evolving prepaid market, focusing primarily on branded cards using open networks such as Visa, MasterCard as well as EFT and ATM networks.

    "The purchase of the remaining share of Vital is a significant strategic move for TSYS," said Tomlinson. "Vital is the second largest merchant processor in the United States, serving over 1 million merchant locations. This purchase positions TSYS to be a complete provider of value-based services at both ends of the payment chain. Expanding our role in the merchant services sector allows us to strengthen the relationships TSYS enjoys with some of the world's largest card issuers by placing them closer to the point of sale. In addition, Vital will provide an important outlet for the worldwide expansion of service offerings provided by TSYS and our other subsidiaries."
    "We expected to have a strong first quarter, but the results exceeded our expectations. We are very excited about our prospects for the remainder of 2005. As a result of the stellar performance in the first quarter, we are raising our earnings guidance to reflect our encouraged outlook for the year. Our conversion pipeline has approximately 34 million accounts, which are expected to be converted by the end of the third quarter. We believe we have built great momentum that will lead to a break-out year in 2005," said Tomlinson.
    TSYS now expects its net income growth to be in the range of 22-25% and revenue growth to be in the 30-33% range for 2005. TSYS' net income forecast is based on the following assumptions:

    1. Revenue before reimbursable items will increase 30-33% in 2005
    2. Vital Processing Services will add $225-235 million in annual revenue
    3. Accounts on file at the end of 2005 will be between 430 and 435 million
    4. No significant client losses or additions through 2005 (other than those previously announced)

    Conference Call

    TSYS will host its quarterly conference call at 8:30 a.m. EDT, April 20, 2005. The conference call can be accessed at www.tsys.com by clicking on the "Conference Call" icon on the homepage. The replay 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 regions. Based in Columbus, Ga., TSYS (NYSE: TSS) is closely 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.

    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 conversion of the accounts in its pipeline by the end of the third quarter of 2005 and TSYS' expected net income growth and revenue growth for 2005; and the assumptions underlying such statements, including, with respect to TSYS' expected increase in net income for 2005, an increase in revenues before reimbursable items of 30-33%; Vital Processing Services adding $225-$235 million in annual revenues; accounts on file at the end of 2005 will be between 430 to 435 million; and no significant client losses or additions through 2005, other than those previously announced. 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; Vital's addition to revenue is lower than anticipated; accounts on file at the end of 2005 are lower than anticipated; TSYS incurs expenses associated with the signing of a significant client; internal growth rates for TSYS' existing customers are lower than anticipated; TSYS does not convert clients' portfolios as scheduled; adverse developments with respect to foreign currency exchange rates; adverse developments with respect to entering into contracts with new clients and retaining current clients; the merger of TSYS clients with entities that are not TSYS clients or the sale of portfolios by TSYS clients to entities that are not TSYS clients; TSYS is unable to control expenses and increase market share; adverse developments with respect to the credit card industry in general; TSYS is unable to successfully manage any impact from slowing economic conditions or consumer spending; the impact of acquisitions, including their being more difficult to integrate than anticipated; the costs and effects of litigation, investigations or similar matters or adverse facts and developments relating thereto; the impact of changes in accounting principles; overall market conditions; no material breach of the security of any of our systems; and the impact on TSYS' business, as well as on the risks set forth above, of various domestic or international military or terrorist activities or conflicts. 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 its Annual Report on Form 10-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.

TSYS Financial Highlights (Unaudited) (In thousands, except per share data)

Three Months Ended March 31, --------------------------- Percentage 2005 2004 Change --------- -------- ----------

Revenues Electronic payment processing services $204,757 177,392 15.4 % Merchant services 27,105 6,364 325.9 Other services 48,514 40,848 18.8 --------- -------- Revenues before reimbursables 280,376 224,604 24.8 Reimbursable items 69,608 60,632 14.8 --------- -------- Total revenues 349,984 285,236 22.7 --------- --------

Expenses Employment expenses 97,517 87,862 11.0 Net occupancy & equipment expenses 65,393 58,049 12.7 Other operating expense 51,160 34,551 48.1 --------- -------- Expenses before reimbursables 214,070 180,462 18.6 Reimbursable items 69,608 60,632 14.8 --------- -------- Total operating expenses 283,678 241,094 17.7 --------- --------

Operating Income 66,306 44,142 50.2 --------- --------

Other Income: Interest income 1,219 505 141.6 Interest expense (70) (743) (90.6) Loss on foreign currency translation, net (333) (71) (370.7) --------- -------- Other Income (Expense) 816 (309) 363.9 --------- --------

Income before Income Taxes, Minority Interest and Equity in Income of Joint Ventures 67,122 43,833 53.1 Income Taxes 24,680 16,755 47.3 Minority Interest (69) (93) (25.2) Equity in Income of Joint Ventures 3,750 5,576 (32.7) --------- --------

Net Income $ 46,123 32,561 41.7 % ========= ========

Basic Earnings Per Share $ 0.23 0.17 41.5 % ========= ========

Diluted Earnings Per Share $ 0.23 0.17 41.7 % ========= ========

Dividend Declared Per Share $ 0.04 0.02 ========= ========

Average Common Shares Outstanding 197,023 196,844 ========= ========

Average Common and Common Equivalent Shares Outstanding 197,230 197,214 ========= ========

Effective Tax Rate 35.1% 34.2% ========= ========

EFFECTIVE INCOME TAX RATE CALCULATION ----------------------------------------------------------------------

Income taxes (A) $ 24,680 16,755 ========= ========

Income before Income Taxes, Minority Interest and Equity in Income of Joint Ventures $ 67,122 43,833 Adjustments: Equity in Income of Vital 3,241 5,201 Minority Interest (69) (93) --------- -------- Adjusted Income before income taxes (B) $ 70,294 48,941 ========= ========

Effective Tax Rate (A/B) 35.1% 34.2% ========= ========

TSYS Reclassification of Revenue Categories (Unaudited) (In thousands)

Three Months Ended ---------------------------------------------------- March June September December 31, 30, 30, 31, YTD 2004 2004 2004 2004 2004 --------- -------- --------- -------- ----------- Revenues Electronic payment processing services $177,392 184,986 198,891 198,274 $ 759,543 Merchant services 6,364 6,876 6,518 6,411 26,169 Other services 40,848 41,828 43,007 45,224 170,907 --------- -------- --------- -------- ----------- Revenues before reimbursables 224,604 233,690 248,416 249,909 956,619 Reimbursable items 60,632 55,932 56,577 57,248 230,389 --------- -------- --------- -------- ----------- Total revenues $285,236 289,622 304,993 307,157 $1,187,008 ========= ======== ========= ======== ===========

Three Months Ended ---------------------------------------------------- March June September December 31, 30, 30, 31, YTD 2003 2003 2003 2003 2003 --------- -------- --------- -------- -----------

Revenues Electronic payment processing services $161,894 171,054 173,227 176,675 $ 682,850 Merchant services 5,932 6,251 6,220 6,563 24,966 Other services 25,053 25,755 30,927 38,750 120,485 --------- -------- --------- -------- ----------- Revenues before reimbursables 192,879 203,060 210,374 221,988 828,301 Reimbursable items 58,474 54,638 55,741 56,312 225,165 -------- -------- --------- -------- ---------- Total revenues $251,353 257,698 266,115 278,300 $1,053,466 ========= ======== ========= ======== ===========

TSYS Segment Breakdown (Unaudited) (In thousands)

Three Months Ended March 31, 2005 -------------------------------------------------- Domestic- International- based based Merchant support support Processing services services Services Consolidated ----------- -------------- ---------- ------------ Revenue before reimbursables $ 229,521 30,848 21,289 281,658 Intersegment revenue (1,282) - - (1,282) ----------- -------------- ---------- ------------ Revenues before reimbursables from external customers $ 228,239 30,848 21,289 280,376 =========== ============== ========== ============ Total revenue $ 290,527 36,614 24,826 351,967 Intersegment revenue (1,983) - - (1,983) ----------- -------------- ---------- ------------ Revenues from external customers $ 288,544 36,614 24,826 349,984 =========== ============== ========== ============ Depreciation and amortization $ 27,459 3,768 1,512 32,739 =========== ============== ========== ============ Segment operating income $ 60,413 2,841 3,052 66,306 =========== ============== ========== ============ Income tax expense $ 20,725 1,639 2,316 24,680 =========== ============== ========== ============ Equity in income of joint ventures $ - 509 3,241 3,750 =========== ============== ========== ============ Net Income $ 40,328 1,756 4,039 46,123 =========== ============== ========== ============ Identifiable assets 1,200,179 182,333 198,082 1,580,594 Intersegment assets (303,565) - - (303,565) ----------- -------------- ---------- ------------ Total assets 896,614 182,333 198,082 1,277,029 =========== ============== ========== ============

Three Months Ended March 31, 2004 -------------------------------------------------- Domestic- International- based based Merchant support support Processing services services Services Consolidated ----------- -------------- ---------- ------------ Revenue before reimbursables 201,618 22,986 - 224,604 Intersegment revenue - - - - ----------- -------------- ---------- ------------

Revenues before reimbursables from external customers 201,618 22,986 - 224,604 =========== ============== ========== ============ Total revenue 260,620 24,618 - 285,238 Intersegment revenue (2) - - (2) ----------- -------------- ---------- ------------ Revenues from external customers 260,618 24,618 - 285,236 =========== ============== ========== ============ Depreciation and amortization 23,284 2,831 - 26,115 =========== ============== ========== ============ Segment operating income 39,573 4,569 - 44,142 =========== ============== ========== ============ Income tax expense 13,382 1,593 1,780 16,755 =========== ============== ========== ============ Equity in income of joint ventures - 375 5,201 5,576 =========== ============== ========== ============ Net Income 26,024 3,117 3,420 32,561 =========== ============== ========== ============ Identifiable assets Intersegment assets Total assets

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.

TSYS Reclassification of Segment Breakdown (Unaudited) (In thousands)

Three Months Ended March 31, 2004 ------------------------------------------------- Domestic- International- based based Merchant support support Processing services services Services Consolidated ----------- -------------- ---------- ------------ Revenue before reimbursables $ 201,618 22,986 - 224,604 Intersegment revenue - - - - ----------- -------------- ---------- ------------

Revenues before reimbursables from external customers $ 201,618 22,986 - 224,604 =========== ============== ========== ============ Total revenue $ 260,620 24,618 - 285,238 Intersegment revenue (2) - - (2) ----------- -------------- ---------- ------------ Revenues from external customers $ 260,618 24,618 - 285,236 =========== ============== ========== ============ Depreciation and amortization $ 23,284 2,831 - 26,115 =========== ============== ========== ============ Segment operating income $ 39,573 4,569 - 44,142 =========== ============== ========== ============ Income tax expense $ 13,382 1,593 1,780 16,755 =========== ============== ========== ============ Equity in income of joint ventures $ - 375 5,201 5,576 =========== ============== ========== ============ Net Income $ 26,024 3,117 3,420 32,561 =========== ============== ========== ============

Three Months Ended June 30, 2004 ------------------------------------------------- Domestic- International- based based Merchant support support Processing services services Services Consolidated ----------- -------------- ---------- ------------ Revenue before reimbursables 207,894 25,796 - 233,690 Intersegment revenue - - - - ---------- -------------- ---------- ------------

Revenues before reimbursables from external customers 207,894 25,796 - 233,690 =========== ============== ========== ============ Total revenue 262,113 27,511 - 289,624 Intersegment revenue (2) - - (2) ----------- -------------- ---------- ------------ Revenues from external customers 262,111 27,511 - 289,622 =========== ============== ========== ============ Depreciation and amortization 23,482 3,187 - 26,669 =========== ============== ========== ============ Segment operating income 40,498 6,774 - 47,272 =========== ============== ========== ============ Income tax expense 13,758 2,537 2,176 18,471 =========== ============== ========== ============ Equity in income of joint ventures - 318 6,366 6,684 =========== ============== ========== ============ Net Income 27,212 4,485 4,189 35,886 =========== ============== ========== ============

Three Months Ended Sept 30, 2004 ------------------------------------------------- Domestic- International- based based Merchant support support Processing services services Services Consolidated ----------- -------------- ---------- ------------ Revenue before reimbursables $ 218,530 29,886 - 248,416 Intersegment revenue - - - - ----------- -------------- ---------- ------------

Revenues before reimbursables from external customers $ 218,530 29,886 - 248,416 =========== ============== ========== ============ Total revenue $ 273,496 31,499 - 304,995 Intersegment revenue (2) - - (2) ----------- -------------- ---------- ------------ Revenues from external customers $ 273,494 31,499 - 304,993 =========== ============== ========== ============ Depreciation and amortization $ 23,188 3,549 - 26,737 =========== ============== ========== ============ Segment operating income $ 45,328 6,667 - 51,995 =========== ============== ========== ============ Income tax expense $ 14,737 3,469 2,203 20,409 =========== ============== ========== ============ Equity in income of joint ventures $ - 549 6,369 6,918 =========== ============== ========== ============ Net Income $ 29,959 5,015 4,167 39,141 =========== ============== ========== ============

Three Months Ended Dec 31, 2004 ------------------------------------------------- Domestic- International- based based Merchant support support Processing services services Services Consolidated ----------- -------------- ---------- ------------ Revenue before reimbursables 220,325 29,584 - 249,909 Intersegment revenue - - - - ----------- -------------- ---------- ------------

Revenues before reimbursables from external customers 220,325 29,584 - 249,909 =========== ============== ========== ============ Total revenue 275,736 31,424 - 307,160 Intersegment revenue (3) - - (3) ----------- -------------- ---------- ------------ Revenues from external customers 275,733 31,424 - 307,157 =========== ============== ========== ============ Depreciation and amortization 25,477 3,590 - 29,067 =========== ============== ========== ============ Segment operating income 70,668 (11,863) - 58,805 =========== ============== ========== ============ Income tax expense 24,658 (4,452) 1,369 21,575 =========== ============== ========== ============ Equity in income of joint ventures - 495 4,063 4,558 =========== ============== ========== ============ Net Income 48,771 (8,495) 2,694 42,970 =========== ============== ========== ============

Twelve Months Ended Dec 31, 2004 ------------------------------------------------- Domestic- International- based based Merchant support support Processing services services Services Consolidated ----------- -------------- ---------- ------------ Revenue before reimbursables $ 848,367 108,252 - 956,619 Intersegment revenue - - - - ----------- -------------- ---------- ------------

Revenues before reimbursables from external customers $ 848,367 108,252 - 956,619 =========== ============== ========== ============ Total revenue $1,071,965 115,052 - 1,187,017 Intersegment revenue (9) - - (9) ----------- -------------- ---------- ------------ Revenues from external customers $1,071,956 115,052 - 1,187,008 =========== ============== ========== ============ Depreciation and amortization $ 95,431 13,157 - 108,588 =========== ============== ========== ============ Segment operating income $ 196,067 6,147 - 202,214 =========== ============== ========== ============ Income tax expense $ 66,535 3,147 7,528 77,210 =========== ============== ========== ============ Equity in income of joint ventures $ - 1,737 21,999 23,736 =========== ============== ========== ============ Net Income $ 131,966 4,122 14,470 150,558 =========== ============== ========== ============

TSYS Reclassification of Segment Breakdown (Unaudited) (In thousands)

Three Months Ended March 31, 2003 ------------------------------------------------- Domestic- International- based based Merchant support support Processing services services Services Consolidated ----------- -------------- ---------- ------------ Revenue before reimbursables $ 175,637 17,242 - 192,879 Intersegment revenue - - - - ----------- -------------- ---------- ------------

Revenues before reimbursables from external customers $ 175,637 17,242 - 192,879 =========== ============== ========== ============ Total revenue $ 233,119 18,235 - 251,354 Intersegment revenue (1) - - (1) ----------- -------------- ---------- ------------ Revenues from external customers $ 233,118 18,235 - 251,353 =========== ============== ========== ============ Depreciation and amortization $ 19,619 2,483 - 22,102 =========== ============== ========== ============ Segment operating income $ 41,036 2,132 - 43,168 =========== ============== ========== ============ Income tax expense $ 13,616 597 1,301 15,514 =========== ============== ========== ============ Equity in income of joint ventures $ - 247 3,941 4,188 =========== ============== ========== ============ Net Income $ 27,724 1,371 2,641 31,736 =========== ============== ========== ============

Three Months Ended June 30, 2003 -------------------------------------------------- Domestic- International- based based Merchant support support Processing services services Services Consolidated ----------- -------------- ---------- ------------ Revenue before reimbursables 184,194 18,866 - 203,060 Intersegment revenue - - - - ----------- -------------- ---------- ------------

Revenues before reimbursables from external customers 184,194 18,866 - 203,060 ========== ============== ========== ============ Total revenue 237,849 19,852 - 257,701 Intersegment revenue (2) - - (2) ---------- -------------- ---------- ------------ Revenues from external customers 237,847 19,852 - 257,699 =========== ============== ========== ============ Depreciation and amortization 20,958 2,537 - 23,495 =========== ============== ========== ============ Segment operating income 41,015 3,740 - 44,755 =========== ============== ========== ============ Income tax expense 15,220 1,309 1,580 18,109 =========== ============== ========== ============ Equity in income of joint ventures - 250 4,550 4,800 =========== ============== ========== ============ Net Income 28,702 2,634 2,970 34,306 =========== ============== ========== ============

Three Months Ended Sept 30, 2003 -------------------------------------------------- Domestic- International- based based Merchant support support Processing services services Services Consolidated ----------- -------------- ---------- ------------ Revenue before reimbursables $ 191,435 18,940 - 210,375 Intersegment revenue (1) - - (1) ----------- -------------- ---------- ------------

Revenues before reimbursables from external customers $ 191,434 18,940 - 210,374 =========== ============== ========== ============ Total revenue $ 246,192 19,925 - 266,117 Intersegment revenue (2) - - (2) ----------- -------------- ---------- ------------ Revenues from external customers $ 246,190 19,925 - 266,115 =========== ============== ========== ============ Depreciation and amortization $ 22,328 3,132 - 25,460 =========== ============== ========== ============ Segment operating income $ 47,075 1,824 - 48,899 =========== ============== ========== ============ Income tax expense $ 15,428 879 1,202 17,509 =========== ============== ========== ============ Equity in income of joint ventures $ - 301 3,621 3,922 =========== ============== ========== ============ Net Income $ 32,201 893 2,418 35,512 =========== ============== ========== ============

Three Months Ended Dec 31, 2003 ------------------------------------- ------------ Merchant Domestic- International- Processing based based support support Services Consolidated services services ----------- -------------- ---------- ------------ Revenue before reimbursables 200,977 21,078 - 222,055 Intersegment revenue (67) - - (67) ----------- -------------- ---------- ------------

Revenues before reimbursables from external customers 200,910 21,078 - 221,988 =========== ============== ========== ============ Total revenue 256,092 22,276 - 278,368 Intersegment revenue (69) - - (69) ----------- -------------- ---------- ------------ Revenues from external customers 256,023 22,276 - 278,299 =========== ============== ========== ============ Depreciation and amortization 24,650 2,708 - 27,358 =========== ============== ========== ============ Segment operating income 50,454 3,303 - 53,757 =========== ============== ========== ============ Income tax expense 16,914 1,293 1,529 19,736 =========== ============== ========== ============ Equity in income of joint ventures - 346 4,554 4,900 =========== ============== ========== ============ Net Income 34,177 2,215 3,027 39,419 =========== ============== ========== ============

Twelve Months Ended Dec 31, 2003 -------------------------------------------------- Domestic- International- based based Merchant support support Processing services services Services Consolidated ----------- -------------- ---------- ------------ Revenue before reimbursables $ 752,243 76,126 - 828,369 Intersegment revenue (68) - - (68) ----------- -------------- ---------- ------------

Revenues before reimbursables from external customers $ 752,175 76,126 - 828,301 =========== ============== ========== ============ Total revenue $ 973,252 80,288 - 1,053,540 Intersegment revenue (74) - - (74) ----------- -------------- ---------- ------------ Revenues from external customers $ 973,178 80,288 - 1,053,466 =========== ============== ========== ============ Depreciation and amortization $ 87,555 10,860 - 98,415 =========== ============== ========== ============ Segment operating income $ 179,580 10,999 - 190,579 =========== ============== ========== ============ Income tax expense $ 61,178 4,078 5,612 70,868 =========== ============== ========== ============ Equity in income of joint ventures $ - 1,144 16,666 17,810 =========== ============== ========== ============ Net Income $ 122,804 7,113 11,056 140,973 =========== ============== ========== ============

TSYS Balance Sheet (Unaudited) (In thousands)

March 31, December 31, 2005 2004 ------------ ------------ Assets Current assets: Cash and cash equivalents $ 97,916 231,806 Restricted cash 29,107 24,993 Accounts receivable, net 192,008 144,827 Deferred income tax assets 8,757 10,791 Prepaid expenses and other current assets 43,053 35,739 ------------ ------------ Total current assets 370,841 448,156 Property and equipment, net 274,704 263,584 Computer software, net 294,663 268,647 Contract acquisition costs, net 164,360 132,428 Equity investments, net 4,987 54,400 Goodwill, net 113,548 70,561 Other intangible assets, net 16,176 4,692 Other assets 37,750 39,475 ------------ ------------ Total assets $ 1,277,029 1,281,943 ============ ============

Liabilities and Shareholders' Equity Current liabilities: Accounts payable $ 39,370 75,188 Accrued salaries and employee benefits 30,434 46,725 Current portion of debt and obligations under capital leases 1,930 1,828 Other current liabilities 156,932 154,162 ------------ ------------ Total current liabilities 228,666 277,903 Obligations under capital leases excluding current portion 3,891 4,508 Long-term debt 1,317 - Deferred income tax liabilities 138,323 131,106 ------------ ------------ Total liabilities 372,197 413,517 ------------ ------------ Minority interests in consolidated subsidiaries 3,850 3,814 ------------ ------------ Shareholders' Equity: Common stock 19,781 19,759 Additional paid-in capital 45,262 44,732 Accumulated other comprehensive income 12,950 15,373 Treasury stock (13,573) (13,573) Retained earnings 836,562 798,321 ------------ ------------ Total shareholders' equity 900,982 864,612 ------------ ------------ Total liabilities and shareholders' equity $ 1,277,029 1,281,943 ============ ============

TSYS Cash Flow (Unaudited) (In thousands)

Three Months Ended March 31: ------------------------- 2005 2004 ------------ -----------

Cash flows from operating activities: Net income $ 46,123 32,561 Adjustments to reconcile net income to net cash provided by operating activities: Minority interests in consolidated subsidiaries' net income 69 93 Equity in income of joint ventures (3,750) (5,576) Loss on currency translation adjustments, net 333 71 Depreciation and amortization 32,739 26,115 Impairment of developed software 3,137 - (Recoveries of) charges for bad debt expense and billing adjustments 679 (704) Charges for transaction processing provisions 3,109 925 Deferred income tax expense (benefit) 10,566 (2,460) Loss on disposal of equipment, net 323 38 (Increase) decrease in: Accounts receivable (15,398) (12,112) Prepaid expenses and other assets 2,932 (15,013) Increase (decrease) in: Accounts payable (53,610) 2,019 Accrued salaries and employee benefits (32,546) (18,116) Billings in excess of costs and profits on uncompleted contracts - (6,749) Other current liabilities (39,241) 42,867 ------------ ----------- Net cash provided by operating activities (44,535) 43,959 ------------ -----------

Cash flows from investing activities: Purchase of property and equipment, net (10,702) (19,535) Additions to licensed computer software from vendors (5,869) (7,370) Additions to internally developed computer software (709) (1,982) Cash acquired in acquisition 38,799 - Cash used in acquisition (95,782) - Dividends received from joint ventures - 15,000 Contract acquisition costs (5,442) (1,857) ------------ ----------- Net cash used in investing activities (79,705) (15,744) ------------ -----------

Cash flows from financing activities: Purchases of common stock - (1,189) 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 (550) (41,589) Dividends paid on common stock (7,874) (3,936) Proceeds from exercise of stock options - 1,142 ------------ ----------- Net cash used in financing activities (7,453) (45,572) ------------ ----------- Effect of foreign currency translation on cash and cash equivalents (2,197) 742 ------------ ----------- Net decrease in cash and cash equivalents (133,890) (16,615) Cash and cash equivalents at beginning of year 231,806 122,874 ------------ ----------- Cash and cash equivalents at end of period $ 97,916 106,259 ============ ===========

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, ----------------------------- 2005 % 2004 % ----------------------------- (dollars in millions): United States $290.0 82.9% 237.0 83.1% Europe 33.0 9.4 21.3 7.5 Canada* 21.0 6.0 19.7 6.9 Japan 3.7 1.0 3.5 1.2 Mexico 1.7 0.5 3.0 1.1 Other 0.6 0.2 0.7 0.2 ----------------------------- $350.0 100.0 % 285.2 100.0% =============================

Geographic Area Revenue by Operating Segment: The following tables reconcile segment revenues to revenues by reporting segment for the three months ended March 31:

Three Months Ended March 31, ------------------------------------------ Domestic- International- based based Merchant support support processing services services services ------------------------------------------ (dollars in millions): 2005 2004 2005 2004 2005 2004 ------------------------------------------ United States $265.3 237.1 - - 24.7 - Europe 0.1 0.1 32.9 21.1 - - Canada* 21.0 19.7 - - - - Japan - - 3.7 3.5 - - Mexico 1.7 3.0 - - - - Other 0.5 0.7 - - 0.1 - ------------------------------------------ $288.6 260.6 36.6 24.6 24.8 - ==========================================

* These revenues include those generated from the Caribbean accounts owned by a Canadian institution.

Supplemental Information: Accounts on File at March 31: ----------------------------------- 2005 % 2004 % % Change ------ ----------------------------- (in millions): Consumer 213.4 57.6% 147.0 52.4% 45.2% Retail 94.1 25.4 86.8 31.0 8.5 Commercial 26.8 7.2 22.2 7.9 21.0 Government services/EBT 16.7 4.5 14.2 5.1 17.5 Stored Value 12.6 3.4 4.0 1.4 219.2 Debit 7.0 1.9 6.2 2.2 11.0 ------ ------------------- 370.6 100.0 %280.4 100.0% 32.2 ====== ===================

March 31, March 31, 2005 2004 ------------- ------------ YTD Average Accounts on File (in millions) 362.9 278.2

Accounts on File at March 31: ----------------------------------- 2005 % 2004 % % Change ------ ----------------------------- (in millions): Domestic 319.7 86.3% 235.4 84.0% 35.8% International 50.9 13.7 45.0 16.0 13.2 ------ ------------------- 370.6 100.0% 280.4 100.0% 32.2 ====== ===================

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): -----------------------------------------

March 2004 March 2003 to March 2005 to March 2004 ----------------------------------- Beginning balance 280.4 254.2 Change in accounts on file due to: Internal growth of existing clients 34.0 28.9 New clients 62.5 13.2 Purges/Sales (5.1) (12.1) Deconversions (1.2) (3.8) ------ ------ Ending balance 370.6 280.4 ====== ======

Number of Employees (FTEs): 2005 2004 --------------------------------- ------ ------ At March 31, 6,417 5,530 YTD average for period ended March 31, 5,863 5,612

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CONTACT: TSYS, Columbus James B. Lipham, +1.706.649.2262 or TSYS Investor Relations Leo S. Berard, +1.706.649.5220 leoberard@tsys.com

KEYWORD: GEORGIA INDUSTRY KEYWORD: BANKING SOFTWARE EARNINGS CONFERENCE CALLS SOURCE: TSYS

Copyright Business Wire 2005