Exhibit
    13.1
  Financial Overview
                    Account type

DescriptionConsumer

Visa, MasterCard and American Express credit cardsRetail

Private label cardsCommercial

Purchasing cards, corporate cards and fleet cards for employees;
    US General Services Administration purchasing and travel cards
    for government employees; American Express cardsGovernment services

Student loan processing accountsStored value

Prepaid cards, including loyalty incentive cards, health care
    cards, flexible spending cards and gift cardsDebit

On-line (PIN-based) and off-line (signature-based) accounts




---



##### 



Years Ended December 31,


Percent Change(in millions, except per share data and employees)

2009


2008


2007


2009 vs. 2008


2008 vs. 2007Revenues before reimbursable items

$
1,417.9



1,456.8



1,388.9



(2.7
)%


4.9
%Total revenues


1,688.1



1,721.6



1,662.5



(2.0
)


3.6Operating income


342.0



368.7



349.1



(7.2
)


5.6Net income attributable to TSYS


215.2



250.1



237.4



(13.9
)


5.3Basic
    EPS(1) :Income from continuing operations


1.12



1.26



1.19



(11.2
)


6.4Net income


1.09



1.26



1.20



(13.7
)


5.2Diluted
    EPS(1):Income from continuing operations


1.12



1.26



1.19



(11.3
)


6.1Net income


1.09



1.26



1.20



(13.7
)


5.3Cash flows from operating activities


423.1



352.8



334.9



19.9



5.4Other:AOF


344.8



352.5



375.5



(2.2
)


(6.1
)Cardholder transactions processed


7,272.9



7,694.1



9,508.5



(5.5
)


(19.1
)Average full-time equivalent employees (FTE)


7,898



7,691



6,799



2.7



13.1   (1)
    
    Basic and diluted EPS is computed
    based on the two-class method in accordance with the guidance
    under Accounting Standards Codification (ASC) 260. Refer to
    Note 27 in the consolidated financial statements for more
    information on earnings per share.    Corporate
  
    Sold TSYS Total Debt Management, Inc. (TDM), a wholly owned
    subsidiary involved in the late stage collection and bankruptcy
    management business.  North
    America
  
    Renewed a longstanding issuer processing relationship with Navy
    Federal Credit Union.
    Signed an agreement with Unicard México, a wholly owned
    subsidiary of Unibanco Brasil, and TSYS first TS2 card
    issuing client in Mexico.  International
  
    Signed a multi-year contract with Banco Carrefour S.A., to
    process its hybrid and private label card business in Brazil on
    the TS Prime multi-client payments processing platform.
    Reached an agreement with Travel Bank, Inc., a financial
    services company that is a part of the JTB Group, to process
    Japans first Visa branded Prepaid card.
    Began offering merchant payment services to PaySquare in the
    Benelux, which is TSYS first acquirer-processing client to
    go live in Europe.
    Announced China UnionPay Data Services Co., Ltd. (CUP Data)
    (TSYS joint venture with China UnionPay) signed processing
    agreements with China Postal Savings Bank, Chinas fifth
    largest bank, and Bank of East Asia, Hong Kongs largest
    local independent bank and the first foreign bank to launch a
    card program in China.
    Introduced its market-leading CentreSuite product to Europe.  Merchant
  
    Signed an agreement with Global Cash Access to use TSYS
    processing services to provide cash access services in over
    1,100 casinos to millions of gaming patrons.
    Acknowledged that Bank of America and other parties formed a new
    joint venture to provide merchant services. TSYS provides
    accounting, settlement, authorization and other services to Bank
    of America pursuant to a contract that will expire in April
    2010. Bank of America has indicated to TSYS that it is in the
    process of formulating its plans with respect to changes in its
    merchant processing relationship with TSYS but has not yet
    communicated to TSYS the timing or extent of the deconversion
    from TSYS systems.
    Announced an agreement to partner with mPay
    Gatewaytm

    and Nova Libra to provide
    point-of-sale
    payment solutions to healthcare providers and pharmacies.




---



##### 



Economic
    Conditions
      Financial Review
    Critical
    Accounting Policies and Estimates




---



##### 



Impact if Actual ResultsCritical Estimates

Assumptions and Judgment

Differ from AssumptionsACCOUNTS RECEIVABLEThe Company estimates the allowances for doubtful accounts.

When estimating the allowances for doubtful accounts, the
    Company takes into consideration such factors as its day-to-day
    knowledge of the financial position of specific clients, the
    industry and size of its clients, the overall composition of its
    accounts receivable aging, prior experience with specific
    customers of accounts receivable write-offs and prior history of
    allowances in proportion to the overall receivable balance. This
    analysis includes an ongoing and continuous communication with
    its largest clients and those clients with past due balances. A
    financial decline of any one of the Companys large clients
    could have a material adverse effect on collectibility of
    receivables and thus the adequacy of the allowance for doubtful
    accounts.

If the actual collectibility of clients accounts is not consistent with the Companys estimates, bad debt expense, which is recorded in other operating expenses, may be materially different than was initially recorded.The Companys experience and extensive data accumulated historically indicates that these estimates have proven reliable over time.The Company estimates allowances for billing adjustments for
    potential billing discrepancies.

When estimating the allowance for billing adjustments, the
    Company considers its overall history of billing adjustments, as
    well as its history with specific clients and known disputes.

If the actual adjustments to clients billing is not
    consistent with the Companys estimates, billing
    adjustments, which is recorded as a reduction of revenues in the
    Companys consolidated statements of income, may be
    materially different than was initially recorded.The Companys experience and extensive data accumulated
    historically indicates that these estimates have proven reliable
    over time.REVENUE RECOGNITIONThe Company estimates revenue for service billings not yet
    invoiced.

Since TSYS invoices clients for processing services monthly in
    arrears, the Company estimates revenues for one month of service
    billings not yet invoiced.

If actual client revenue billing is not consistent with the
    Companys estimates, processing revenues may be materially
    different than was initially recorded.The Companys experience and extensive data accumulated
    historically indicates that these estimates have proven reliable
    over time.




---



##### 



Impact if Actual ResultsCritical Estimates

Assumptions and Judgment

Differ from AssumptionsASSET IMPAIRMENTAnalysis of potential asset impairment involves various
    estimates and assumptions:Contract Acquisition CostsIn evaluating for recoverability, expected undiscounted net
    operating cash flows are estimated by management.

The Company evaluates the carrying value of contract acquisition costs associated with each customer for impairment on the basis of whether these costs are fully recoverable from either contractual minimum fees (conversion costs) or from expected undiscounted net operating cash flows of the related contract (cash incentives paid). The determination of expected undiscounted net operating cash flows requires management to make estimates.These costs may become impaired with the loss of a contract, the financial decline of a client, termination of conversion efforts after a contract is signed or diminished prospects for current clients.

If the actual cash flows are not consistent with the Companys estimates, a material impairment charge may result and net income may be materially different than was initially recorded.Note 9 in the consolidated financial statements contains a discussion of contract acquisition costs. The net carrying value of contract acquisition costs on the Companys Consolidated Balance Sheet as of December 31, 2009 was $128.0 million.Software Development CostsIn evaluating for recoverability, expected undiscounted net
    operating cash flows are estimated by management.

The Company evaluates the unamortized capitalized costs of
    software development as compared to the net realizable value of
    the software product, which is determined by expected
    undiscounted net operating cash flows. The amount by which the
    unamortized software development costs exceed the net realizable
    value is written off in the period that such determination is
    made.

If the actual cash flows are not consistent with the Companys estimates, a material write-off may result and net income may be materially different than was initially recorded.Note 8 in the consolidated financial statements contains a discussion of internally developed software costs. The net carrying value of internally developed software on the Companys Consolidated Balance Sheet as of December 31, 2009 was $79.3 million.




---



##### 



Impact if Actual ResultsCritical Estimates

Assumptions and Judgment

Differ from AssumptionsGoodwillIn evaluating for impairment, discounted net cash flows for
    future periods are estimated by management.

In accordance with the provisions of ASC 350, Intangibles  Goodwill and Other,(previously referred to as Statement of Financial Accounting Standards No. 142, Goodwill and Other Intangibles Assets), goodwill is required to be tested for impairment at least annually. The combination of the income approach utilizing the discounted cash flow (DCF) method and the market approach, utilizing readily available market valuation multiples, is used to estimate the fair value.Under the DCF method, the fair value of the asset reflects the present value of the projected earnings that will be generated by each asset after taking into account the revenues and expenses associated with the asset, the relative risk that the cash flows will occur, the contribution of other assets, and an appropriate discount rate to reflect the value of invested capital. Cash flows are estimated for future periods based on historical data and projections provided by management.

If the actual cash flows are not consistent with the Companys estimates, a material impairment charge may result and net income may be materially different than was initially recorded.Note 10 in the consolidated financial statements contains a discussion of goodwill. The net carrying value of goodwill on the Companys Consolidated Balance Sheet as of December 31, 2009 was $168.1 million.Long-lived Assets and IntangiblesIn evaluating for recoverability, expected undiscounted net
    operating cash flows are estimated by management.

The Company reviews long-lived assets, such as property and
    equipment and intangibles subject to amortization, including
    contract acquisition costs and certain computer software, for
    impairment whenever events or changes in circumstances indicate
    that the carrying amount of an asset may not be recoverable.
    Recoverability of assets to be held and used is measured by a
    comparison of the carrying amount of an asset to estimated
    undiscounted future cash flows expected to be generated by the
    asset.

If the actual cash flows are not consistent with the
    Companys estimates, a material impairment charge may
    result and net income may be materially different than was
    initially recorded.




---



##### 



Impact if Actual ResultsCritical Estimates

Assumptions and Judgment

Differ from AssumptionsTRANSACTION PROCESSING PROVISIONSThe Company records estimates to accrue for contract
    contingencies (performance penalties) and processing errors.

A significant number of the Companys contracts with large
    clients contain service level agreements which can result in
    TSYS incurring performance penalties if contractually required
    service levels are not met. When estimating these accruals, the
    Company takes into consideration such factors as the prior
    history of performance penalties and processing errors incurred,
    actual contractual penalties inherent in the Companys
    contracts, progress towards milestones and known processing
    errors not covered by insurance.

If the actual performance penalties incurred are not consistent with the Companys estimates, performance penalties and processing errors, which is recorded in other operating expenses, may be materially different than was initially recorded.The Companys experience and extensive data accumulated historically indicates that these estimates have proven reliable over time.INCOME TAXESIn calculating its effective tax rate, the Company makes decisions regarding certain tax positions, including the timing and amount of deductions and allocations of income among various tax jurisdictions.The Company makes estimates as to the amount of deferred tax assets and liabilities and records valuation allowances to reduce its deferred tax assets to reflect the amount that is more likely than not to be realized.

The Company has various tax filing positions, including the timing and amount of deductions and credits, the establishment of reserves for audit matters and the allocation of income among various tax jurisdictions.The Company considers projected future taxable income and ongoing tax planning strategies in assessing the need for the valuation allowance.

Actual results may differ from the Companys estimates. If
    the Company realizes a deferred tax asset or the Company was
    unable to realize a net deferred tax asset, an adjustment to the
    deferred tax asset would increase or decrease earnings,
    respectively, in the period the difference is recognized.   Related Party
    Transactions




---



##### 



Off-Balance Sheet
    Arrangements
  OPERATING LEASES:
  Recent Accounting
    Pronouncements
  Accounting
    Standards Update
    2010-08,
    Technical Corrections to Various
    Topics
  2010-08, Technical Corrections to Various Topics, 2010-08 2010-08
  Accounting
    Standards Update
    2010-06,
    Fair Value Measurements and Disclosures (Topic 820):
    Improving Disclosures about Fair Value
    Measurements
  2010-06, Fair Value Measurements and Disclosures (Topic 820):
    Improving Disclosures about Fair Value Measurements 2010-06 2010-06
  Accounting
    Standards Update
    2010-05,
    Compensation  Stock Compensation (Topic 718):
    Escrowed Share Arrangements and the Presumption of
    Compensation
  2010-05, Compensation - Stock Compensation (Topic 718): Escrowed
    Share Arrangements and the Presumption of
    Compensation, 2010-05 2010-05
  Accounting
    Standards Update
    2010-04,
    Accounting for Various Topics  Technical
    Corrections to SEC Paragraphs
  2010-04, Accounting for Various Topics  Technical
    Corrections to SEC Paragraphs, 2010-04 2010-04
  Accounting
    Standards Update
    2010-02,
    Consolidation (Topic 810): Accounting and Reporting for
    Decreases in Ownership of a Subsidiary  a Scope
    Clarification
  2010-02, Consolidation (Topic 810): Accounting and Reporting for
    Decreases in Ownership of a Subsidiary  a Scope
    Clarification, decrease-in-ownership 810-10 2010-02 810-10
  Accounting
    Standards Update
    2010-01,
    Equity (Topic 505): Accounting for Distributions to
    Shareholders with Components of Stock and Cash (A Consensus of
    the FASB Emerging Issues Task Force)
  2010-01, Equity (Topic 505): Accounting for Distributions to
    Shareholders with Components of Stock and Cash (A Consensus of
    the FASB Emerging Issues Task Force), 2010-01 2010-01
  Accounting
    Standards Update
    2009-17,
    Improvements to Financial Reporting by Enterprises
    Involved With Variable Interest Entities
  2009-17, Improvements to Financial Reporting by Enterprises
    Involved With Variable Interest Entities, risks-and-rewards




---



##### 



Accounting
    Standards Update
    2009-14,
    Certain Revenue Arrangements that Include Software
    Elements
  2009-14, Certain Revenue Arrangements that Include Software
    Elements, 985-605, Software-Revenue Recognition, EITF 09-3, Revenue Arrangements that Include Software
    Elements. 2009-14 985-605 2009-14 2009-14
  Accounting
    Standards Update
    2009-13,
    Multiple Deliverable Revenue
    Arrangements
  2009-13, Multiple Deliverable Revenue Arrangements, Revenue Recognition, EITF 08-1, Revenue Arrangements with Multiple Deliverables. 2009-13 650-25 2009-13 2009-13
  Accounting
    Standards Codification 810,
    Consolidation
  Amendments to
    FASB Interpretation No. 46(R),




---



##### 



Percent ofTotal RevenuesYears Ended


Percent Change inDecember 31,


Dollar Amounts2009


2008


2007


2009 vs. 2008


2008 vs. 2007Revenues:Electronic payment processing services


56.1
%


57.8



57.7



(4.9
)%


3.7
%Merchant services


16.4



15.2



16.1



6.1



(2.4
)Other services


11.5



11.6



9.7



(2.8
)


24.0Reimbursable items


16.0



15.4



16.5



2.0



(3.2
)Total revenues


100.0



100.0



100.0



(2.0
)


3.6Expenses:Salaries and other personnel expenses


34.4



34.1



33.6



(0.8
)


4.8Net technology and facilities expenses


17.9



17.3



16.3



1.5



9.9Spin-related expenses






0.6



0.8



(100.0
)


(17.6
)Other operating expenses


11.4



11.2



11.8



(0.5
)


(1.5
)Reimbursable items


16.0



15.4



16.5



2.0



(3.2
)Total expenses


79.7



78.6



79.0



(0.5
)


3.0Operating income


20.3



21.4



21.0



(7.2
)


5.6Nonoperating (expenses) income


(0.2
)


0.3



1.4



nm



(76.0
)Income from continuing operations before income taxes and equity
    in income of equity investments


20.1



21.7



22.4



(9.6
)


0.3Income taxes


7.2



7.6



8.5



(7.6
)


(7.6
)Income from continuing operations before equity in income of
    equity investments


12.9



14.1



13.9



(10.6
)


5.3Equity in income of equity investments


0.4



0.4



0.3



(5.6
)


34.1Income from continuing operations, net of tax


13.3



14.5



14.2



(10.5
)


5.9(Loss) income from discontinued operations, net of tax


(0.3
)


0.1



0.2



nm



(63.3
)Net income


13.0



14.6



14.4



(12.9
)


5.1Net income attributable to noncontrolling interests


(0.2
)


(0.1
)


(0.1
)


nm



(20.2
)Net income attributable to TSYS


12.8



14.5



14.3



(13.9
)


5.3nm = not meaningful   Results of
    Operations
  Revenues




---



##### 



Major
    Customer
                   AOF Information (in
    millions)
  Percent Change2009

2008

2007

2009 vs. 2008

2008 vs. 2007At December 31,


344.8



352.5



375.5



(2.2
)%


(6.1
)%YTD Average


347.9



365.7



401.2



(4.9
)


(8.8
)   AOF by Portfolio
    Type (in
    millions)
  Percent ChangeAt December 31,

2009


%


2008


%


2007


%


2009 vs. 2008


2008 vs. 2007Consumer


187.8



54.5
%


205.8



58.4
%


201.5



53.7
%


(8.8
)%


2.2
%Retail


42.9



12.4



52.9



15.0



56.8



15.1



(18.9
)


(7.0
)Stored value


42.3



12.3



24.9



7.1



49.2



13.1



69.9



(49.4
)Commercial


41.1



11.9



42.8



12.1



39.0



10.4



(4.0
)


9.8Government services


25.5



7.4



21.2



6.0



23.7



6.3



20.7



(10.7
)Debit


5.2



1.5



4.9



1.4



5.3



1.4



4.5



(6.2
)Total


344.8



100.0
%


352.5



100.0
%


375.5



100.0
%


(2.2
)


(6.1
)   AOF by Geographic
    Area (in millions)
  Percent ChangeAt December 31,

2009


%


2008


%


2007


%


2009 vs. 2008


2008 vs. 2007U.S.


255.5



74.1
%


268.1



76.1
%


301.3



80.2
%


(4.7
)%


(11.0
)%Outside U.S.


89.3



25.9



84.4



23.9



74.2



19.8



5.9



13.7Total


344.8



100.0
%


352.5



100.0
%


375.5



100.0
%


(2.2
)


(6.1
)   Note:




---



##### 



Activity in AOF (in
    millions)
  2008 to 2009


2007 to 2008


2006 to 2007Beginning balance


352.5



375.5



416.4Internal growth of existing clients


25.2



36.5



40.3New clients


28.1



22.7



24.2Purges/Sales


(34.1
)


(46.3
)


(11.8
)Deconversions


(26.9
)


(35.9
)


(93.6
)Ending balance


344.8



352.5



375.5   Electronic
    Payment Processing Services
              Merchant
    Services
  point-of-sale
  Other
    Services
    Reimbursable
    Items
  Revenue Recognition, No. 01-14, Income Statement Characterization of Reimbursements
    Received for Out-of-Pocket Expenses Incurred, out-of-pocket
  Operating
    Segments
      North America
    Services




---



##### 



Years Ended December 31,


Percent Change(in millions)

2009


2008


2007


2009 vs. 2008


2008 vs. 2007Total revenues

$
1,016.3



1,107.2



1,118.8



(8.2
)%


(1.0
)%Reimbursable items


160.3



189.4



203.2



(15.3
)


(6.8
)Operating income


234.5



265.9



253.9



(11.8
)


4.7Operating margin


23.1
%


24.0
%


22.7
%Key indicators:AOF


305.2



319.0



352.1



(4.3
)


(9.4
)Transactions


6,136.9



6,658.2



8,664.2



(7.8
)


(23.2
)     International
    Services
      Years Ended December 31,


Percent Change(in millions)

2009


2008


2007


2009 vs. 2008


2008 vs. 2007Total revenues

$
335.5



316.9



252.3



5.9
%


25.6
%Reimbursable items


15.1



11.2



10.3



34.8



8.8Operating income


43.2



48.4



44.1



(10.6
)


9.7Operating margin


12.9
%


15.3
%


17.5
%Key indicators:AOF


39.5



33.5



23.4



18.0



43.4Transactions


1,136.0



1,035.8



844.2



9.7



22.7       Merchant
    Services
      Years Ended December 31,


Percent Change(in millions)

2009


2008


2007


2009 vs. 2008


2008 vs. 2007Total revenues

$
336.2



297.6



291.3



13.0
%


2.2
%Reimbursable items


94.8



64.3



60.2



47.4



6.9Operating income


64.3



65.6



64.7



(2.0
)


1.4Operating margin


19.1
%


22.0
%


22.2
%Key indicator:Point-of-sale
    transactions


5,194.4



5,057.9



4,944.5



2.7



2.3     point-of-sale dial-up
    Operating
    Expenses




---



##### 



Salaries and
    Other Personnel Expense
    Compensation  Stock Compensation, Share-Based Payment
    (Revised)
      Employee Data:







Percent Change(FTE)

2009

2008

2007

2009 vs. 2008

2008 vs. 2007At December 31,


7,620



8,110



6,921



(6.0
)%


17.2
%YTD Average


7,898



7,691



6,799



2.7



13.1         Net Technology
    and Facilities Expense




---



##### 



Spin Related
    Expenses
    Other Operating
    Expenses
        Operating
    Income
    Nonoperating
    Income (Expense)
          U.S.-dollar




---



##### 



Income
    Taxes
      Income Taxes, Accounting for Income Taxes 
    Special Areas,
    Equity in Income
    of Equity Investments
    (Loss) Income
    from Discontinued Operations, net of tax
    Net
    Income
    Non-GAAP Financial
    Measures




---



##### 



Profit Margins
    and Reimbursable Items
      (in thousands)

2009


2008


2007Operating income

$
342,033



368,675



349,135Net income attributable to TSYS

$
215,213



250,100



237,443Total revenues

$
1,688,062



1,721,646



1,662,450Less reimbursable items


270,178



264,892



273,594Revenues before reimbursable items

$
1,417,884



1,456,754



1,388,856Operating margin (as reported)


20.3
%


21.4
%


21.0
%Net profit margin (as reported)


12.8
%


14.5
%


14.3
%Adjusted operating margin


24.1
%


25.3
%


25.1
%Adjusted net profit margin


15.2
%


17.2
%


17.1
%   Projected Outlook
    for 2010
    Financial Position,
    Liquidity and Capital Resources
    Cash Flows from
    Operating Activities
  Years Ended December 31,(in thousands)

2009


2008


2007Net income

$
219,176



251,676



239,419Depreciation and amortization


156,471



164,643



156,465Loss on disposal of subsidiary


5,713







Other noncash items and charges, net


21,346



6,452



(2,572
)Dividends from equity investments


4,942



6,421



2,994Net change in current and other assets and current and other
    liabilities


15,489



(76,357
)


(61,444
)Net cash provided by operating activities

$
423,137



352,835



334,862




---



##### 



Dividends
    Received from Equity Investments
    Cash Flows from
    Investing Activities
  Years Ended
    December 31,(in thousands)

2009


2008


2007Purchases of property and equipment, net

$
(34,017
)


(47,969
)


(55,274
)Additions to licensed computer software from vendors


(20,059
)


(31,499
)


(33,382
)Additions to internally developed computer software


(31,445
)


(21,777
)


(17,785
)Proceeds from disposition, net of expenses paid and cash disposed


1,979







Cash used in acquisitions and equity investments, net of cash
    acquired


(294
)


(50,017
)


(12,552
)Subsidiary repurchase of noncontrolling interest






(343
)


Additions to contract acquisition costs


(35,596
)


(41,456
)


(22,740
)Net cash used in investing activities

$
(119,432
)


(193,061
)


(141,733
)     Property and
    Equipment
    Licensed Computer
    Software from Vendors
    Internally
    Developed Computer Software Costs
      Cash Used in
    Acquisitions
    Contract
    Acquisition Costs




---



##### 



Cash Flows from
    Financing Activities
  (in thousands)

2009


2008


2007Proceeds from borrowings of long-term debt

$
5,334



18,575



263,946Principal payments on long-term debt borrowings and capital
    lease obligations


(18,869
)


(67,631
)


(4,816
)Dividends paid on common stock


(55,207
)


(55,449
)


(655,246
)Repurchase of common stock


(329
)


(35,698
)


Other


(227
)


117



19,412Net cash used in financing activities

$
(69,298
)


(140,086
)


(376,704
)     Stock Repurchase
    Plan
        Financing




---



##### 



Dividends
      Significant
    Noncash Transactions
      Additional Cash
    Flow Information
  Off-Balance Sheet
    Financing
      Contractual Cash ObligationsPayments Due By Period1 Year


2 - 3


4 - 5


After(in millions)

Total


or Less


Years


Years


5 YearsOperating leases

$
196.6



103.6



64.3



14.1



14.6Debt obligations


199.4



7.0



192.4







Capital lease obligations


19.0



6.2



10.6



2.2



Total contractual cash obligations

$
415.0



116.8



267.3



16.3



14.6   Income
    Taxes
  Income
    Taxes, Accounting for Uncertainty
    in Income Taxes, an Interpretation of FASB Statement
    No. 109,
  Foreign
    Exchange
    Impact of
    Inflation
    Working
    Capital
  and/or




---



##### 



Legal
    Proceedings
    Forward-Looking
    Statements
      
    movements in LIBOR are greater than expected and draws on the
    revolving credit facility are greater than expected;
    TSYS incurs expenses associated with the signing of a
    significant client;
    internal growth rates for TSYS existing clients are lower
    than anticipated whether as a result of unemployment rates, card
    delinquencies and charge off rates or otherwise;
    TSYS does not convert and deconvert 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;
    continued consolidation and turmoil in the financial services
    industry throughout 2010, 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 clients
    and the nationalization or seizure by banking regulators of TSYS
    clients;
    TSYS is unable to control expenses and increase market share,
    both domestically and internationally;




---



##### 




    adverse developments with respect to the credit card industry in
    general, including a decline in the use of credit cards as a
    payment mechanism;
    TSYS is unable to successfully manage any impact from slowing
    economic conditions or consumer spending;
    the impact of potential and completed acquisitions, including
    the costs associated therewith and 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 the application of
    and/or
    changes in accounting principles;
    TSYS inability to timely, successfully and
    cost-effectively improve and implement processing systems to
    provide new products, increased functionality and increased
    efficiencies;
    TSYS inability to anticipate and respond to technological
    changes, particularly with respect to
    e-commerce;
    changes occur in laws, regulations, credit card associations
    rules or other industry standards affecting TSYS business
    which require significant product redevelopment efforts or
    reduce the market for or value of its products;
    successfully managing the potential both for patent protection
    and patent liability in the context of rapidly developing legal
    framework for expansive patent protection;
    the material breach of security of any of our systems;
    overall market conditions;
    the loss of a major supplier;
    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;
    other risk factors described in the Risk Factors and
    other sections of TSYS Annual Report on
    Form 10-K
    for the fiscal year ended December 31, 2009 and other
    filings with the Securities and Exchange Commission; and
    TSYS ability to manage the foregoing and other risks.    Subsequent
    Events




---



##### 



Consolidated Balance
    Sheets
 December 31,(in thousands, except per share data)

2009


2008AssetsCurrent assets:Cash and cash equivalents (Note 5)

$
449,955



211,365Restricted cash


46,190



31,128Accounts receivable, net of allowance for doubtful accounts and
    billing adjustments of $6.8 million and $8.0 million
    at 2009 and 2008, respectively


231,325



246,767Deferred income tax assets (Note 20)


11,302



22,793Prepaid expenses and other current assets (Note 6)


72,124



88,612Current assets of discontinued operations






24,569Total current assets


810,896



625,234Property and equipment, net of accumulated depreciation and
    amortization (Notes 7 and 22)


289,198



291,341Computer software, net of accumulated amortization (Note 8)


197,134



202,038Contract acquisition costs, net of accumulated amortization
    (Note 9)


128,038



131,568Goodwill (Note 10)


168,121



165,995Equity investments (Note 11)


75,495



74,012Other intangible assets, net of accumulated amortization
    (Note 12)


14,132



17,452Other assets


27,940



35,139Long-term assets of discontinued operations






7,245Total assets

$
1,710,954



1,550,024LiabilitiesCurrent liabilities:Accrued salaries and employee benefits

$
32,457



46,701Accounts payable


21,729



32,440Current portion of long-term debt (Note 13)


6,988



8,575Current portion of obligations under capital leases
    (Note 13)


6,289



6,344Other current liabilities (Note 14)


153,316



130,751Current liabilities of discontinued operations






10,993Total current liabilities


220,779



235,804Long-term debt, excluding current portion (Note 13)


192,367



196,295Deferred income tax liabilities (Note 20)


47,162



60,573Obligations under capital leases, excluding current portion
    (Note 13)


12,756



13,576Other long-term liabilities


48,443



40,709Long-term liabilities of discontinued operations






2,217Total liabilities


521,507



549,174EquityShareholders equity (Notes 15, 16, 17 and 18):Common stock  $0.10 par value. Authorized
    600,000 shares; 200,860 and 200,354 issued at 2009 and
    2008, respectively; 197,180 and 196,702 outstanding at 2009 and
    2008, respectively


20,086



20,036Additional paid-in capital


139,742



126,889Accumulated other comprehensive income (loss), net


5,673



(6,627
)Treasury stock (shares of 3,680 and 3,652 at 2009 and 2008,
    respectively)


(69,950
)


(69,641
)Retained earnings


1,080,250



920,292Total shareholders equity


1,175,801



990,949Noncontrolling interests in consolidated subsidiaries


13,646



9,901Total equity


1,189,447



1,000,850Commitments and contingencies (Note 19)Total liabilities and equity

$
1,710,954



1,550,024




---



##### 



Consolidated
    Statements of Income
  Years Ended December 31,(in thousands, except per share data)

2009


2008


2007Revenues:Electronic payment processing services (includes
    $5.6 million from related parties for 2007)

$
946,298



995,430



959,836Merchant services


277,434



261,537



267,844Other services (includes $9.0 million from related parties
    for 2007)


194,152



199,787



161,176Reimbursable items (includes $2.5 million from related
    parties for 2007)


270,178



264,892



273,594Total revenues (Notes 4 and 22)


1,688,062



1,721,646



1,662,450Expenses:Salaries and other personnel expenses (Notes 16 and 21)


581,650



586,295



559,336Net technology and facilities expenses


301,820



297,265



270,553Spin-related expenses (Note 25)






11,140



13,526Other operating expenses (includes $9.5 million to related
    parties for 2007)


192,381



193,379



196,306Reimbursable items


270,178



264,892



273,594Total expenses (Note 4)


1,346,029



1,352,971



1,313,315Operating income


342,033



368,675



349,135Nonoperating (expenses) income (includes $16.5 million from
    related parties for 2007) (Note 4)


(3,441
)


5,772



24,009Income from continuing operations before income taxes and equity
    in income of equity investments


338,592



374,447



373,144Income taxes (Note 20)


121,238



131,206



142,070Income from continuing operations before equity in income of
    equity investments


217,354



243,241



231,074Equity in income of equity investments (Note 11)


6,985



7,397



5,516Income from continuing operations, net of tax


224,339



250,638



236,590(Loss) income from discontinued operations, net of tax


(5,163
)


1,038



2,829Net income


219,176



251,676



239,419Net income attributable to noncontrolling interests


(3,963
)


(1,576
)


(1,976
)Net income attributable to TSYS

$
215,213



250,100



237,443Basic earnings per share (EPS)* (Note 27):Income from continuing operations

$
1.12



1.26



1.19(Loss) income from discontinued operations


(0.03
)


0.01



0.01Net income

$
1.09



1.26



1.20Diluted EPS*:Income from continuing operations

$
1.12



1.26



1.19(Loss) income from discontinued operations


(0.03
)


0.01



0.01Net income

$
1.09



1.26



1.20Amounts attributable to TSYS common shareholders:Income from continuing operations, net of tax

$
220,376



249,062



234,614(Loss) income from discontinued operations, net of tax


(5,163
)


1,038



2,829Net income

$
215,213



250,100



237,443     *
    
    Note: Basic and diluted EPS amounts
    for continuing operations and net income may not total due to
    rounding.




---



##### 



Consolidated
    Statements of Cash Flows
    Years Ended December 31,(in thousands)

2009


2008


2007Cash flows from operating activities:Net income

$
219,176



251,676



239,419Adjustments to reconcile net income to net cash provided by
    operating activities:Net loss (gain) on foreign currency translation


2,607



(10,481
)


(41
)Equity in income of equity investments, net of tax


(6,985
)


(7,397
)


(5,516
)Dividends received from equity investments (Note 4)


4,942



6,421



2,994Share-based compensation


16,128



24,733



18,620Excess tax benefit from share-based payment arrangements


(6
)


(90
)


(8,507
)Depreciation and amortization


156,471



164,643



156,465Amortization of debt issuance costs


154



154



Asset impairments










1,158Provisions for bad debt expenses and billing adjustments


6,381



618



1,231Charges for transaction processing provisions


6,556



3,172



35Deferred income tax (benefit) expense


(3,864
)


(4,439
)


(10,052
)Loss on disposal of equipment, net


375



182



500Loss on disposal of subsidiary


5,713







Changes in operating assets and liabilities:Accounts receivable


10,807



(15,490
)


(10,796
)Prepaid expenses, other current assets and other assets


27,893



(48,024
)


(14,870
)Accounts payable


(11,883
)


4,550



10,080Accrued salaries and employee benefits


(11,697
)


(25,267
)


4,445Other current liabilities and other liabilities


369



7,874



(50,303
)Net cash provided by operating activities


423,137



352,835



334,862Cash flows from investing activities:Purchases of property and equipment, net


(34,017
)


(47,969
)


(55,274
)Additions to licensed computer software from vendors


(20,059
)


(31,499
)


(33,382
)Additions to internally developed computer software


(31,445
)


(21,777
)


(17,785
)Proceeds from disposition, net of expenses paid and cash disposed


1,979







Cash used in acquisitions and equity investments, net of cash
    acquired


(294
)


(50,017
)


(12,552
)Subsidiary repurchase of minority interest






(343
)


Additions to contract acquisition costs


(35,596
)


(41,456
)


(22,740
)Net cash used in investing activities


(119,432
)


(193,061
)


(141,733
)Cash flows from financing activities:Proceeds from borrowings


5,334



18,575



263,946Excess tax benefit from share-based payment arrangements


6



90



8,507Principal payments on long-term debt borrowings and capital
    lease obligations


(18,869
)


(67,631
)


(4,816
)Dividends paid on common stock (includes $528.4 million to
    a related party for 2007) (Note 4)


(55,208
)


(55,449
)


(655,246
)Subsidiary dividends paid to noncontrolling shareholders


(235
)


(241
)


Proceeds from exercise of stock options


2



268



11,672Debt issuance costs










(767
)Repurchases of common stock


(328
)


(35,698
)


Net cash used in financing activities


(69,298
)


(140,086
)


(376,704
)Cash and cash equivalents:Effect of exchange rate changes on cash and cash equivalents


(4,470
)


(10,188
)


4,970Net increase (decrease) in cash and cash equivalents


229,937



9,500



(178,605
)Cash and cash equivalents at beginning of year


220,018



210,518



389,123Cash and cash equivalents at end of year

$
449,955



220,018



210,518Supplemental cash flow information:Cash paid for interest

$
3,368



11,299



2,670Cash paid for income taxes, net of refunds

$
104,004



151,165



176,141Significant noncash transactions (Note 23)




---



##### 



Consolidated
    Statements of Equity and
    Comprehensive Income
    TSYS ShareholdersAccumulatedAdditional


OtherCommon Stock


Paid-In


Comprehensive


Treasury


Retained


Noncontrolling


Total(in thousands, except per share data)

Shares


Dollars


Capital


Income (Loss)


Stock


Earnings


Interests


EquityBalance as of December 31, 2006


198,676


$
19,868


$
66,677


$
20,641


$
(35,233
)

$
1,145,407


$
6,229


$
1,223,589Cumulative effect of adoption of FIN 48 (Note 20)






















(1,969
)






(1,969
)Comprehensive income:Net income






















237,443



1,976



239,419Other comprehensive income, net of tax (Note 18):Foreign currency translation














7,632











375



8,007Change in accumulated OCI related to postretirement healthcare
    plans














49















49Other comprehensive income






























8,056Comprehensive income






























247,475Common stock issued from treasury shares for exercise of stock
    options (Note 17)










314







1,095











1,409Common stock issued for exercise of stock options (Note 16)


752



75



10,188



















10,263Common stock issued for nonvested awards (Note 16)


225



22



(22
)


















Common stock issued under commitment to charitable foundation


7



1



99



















100Difference in carrying value of asset transferred from related
    party










371



















371Share-based compensation (Note 16)










18,430



















18,430Cash dividends declared ($3.31 per share)






















(655,320
)






(655,320
)Tax benefits associated with share based payment arrangements










8,705



















8,705Balance as of December 31, 2007


199,660



19,966



104,762



28,322



(34,138
)


725,561



8,580



853,053Comprehensive income:Net income






















250,100



1,576



251,676Other comprehensive (loss) income, net of tax (Note 18):Foreign currency translation














(35,060
)










(255
)


(35,315
)Change in accumulated OCI related to postretirement healthcare
    plans














111















111Other comprehensive (loss) income






























(35,204
)Comprehensive income






























216,472Common stock issued from treasury shares for exercise of stock
    options (Note 17)










30







195











225Common stock issued for exercise of stock options (Note 16)


2



1



42



















43Common stock issued for nonvested awards (Note 16)


692



69



(69
)


















Share-based compensation (Note 16)










24,584



















24,584Cash dividends declared ($0.28 per share)






















(55,369
)






(55,369
)Purchase of treasury shares (Note 17)


















(35,698
)










(35,698
)Pre-spin tax benefits adjustment










(1,820
)


















(1,820
)Tax shortfalls associated with share based payment arrangements










(640
)


















(640
)Balance as of December 31, 2008


200,354



20,036



126,889



(6,627
)


(69,641
)


920,292



9,901



1,000,850Comprehensive income:Net income






















215,213



3,963



219,176Other comprehensive (loss) income, net of tax
    (Note 18):Foreign currency translation














12,145











(218
)


11,927Change in accumulated OCI related to postretirement
    healthcare plans














155















155Other comprehensive income






























12,082Comprehensive income






























231,258Common stock issued from treasury shares for exercise of
    stock options (Note 17)










(17
)






19











2Common stock issued for nonvested awards (Note 16)


506



50



(50
)


















Share-based compensation (Note 16)










16,225



















16,225Cash dividends declared ($0.28 per share)






















(55,255
)






(55,255
)Purchase of treasury shares (Note 17)


















(328
)










(328
)Tax shortfalls associated with share based payment
    arrangements










(3,305
)


















(3,305
)Balance as of December 31, 2009


200,860


$
20,086


$
139,742


$
5,673


$
(69,950
)

$
1,080,250


$
13,646


$
1,189,447




---



##### 



Notes to
    Consolidated Financial Statements
  NOTE 1
    Basis of
    Presentation and Summary of Significant Accounting
    Policies  BUSINESS:
        PRINCIPLES OF CONSOLIDATION AND BASIS OF
    PRESENTATION: Consolidation, Consolidation of
    Variable Interest Entities,
  RISKS AND UNCERTAINTIES AND USE OF
    ESTIMATES: and/or
    CASH EQUIVALENTS:
  RESTRICTED CASH:
  ACCOUNTS RECEIVABLE:
  day-to-day




---



##### 



PROPERTY AND EQUIPMENT: Presentation of Financial
    Statements, ,
    Accounting for the Impairment or Disposal of Long-Lived
    Assets.
    LICENSED COMPUTER SOFTWARE: units-of-production
  ACQUISITION TECHNOLOGY INTANGIBLES: Intangibles  Goodwill
    and Other, Goodwill and Other Intangible
    Assets,
  SOFTWARE DEVELOPMENT COSTS: Software, Computer Software to be Sold, Leased or Otherwise
    Marketed,
  , 98-1, Accounting for the Costs of Computer Software Developed
    or Obtained for Internal Use.
  CONTRACT ACQUISITION COSTS: Revenue
    Recognition Revenue
    Recognition, Bulletin No. 90-1, Accounting for Separately Priced Extended Warranty and
    Product Maintenance Contracts. No. 01-9, Accounting for Consideration Given by a Vendor to a
    Customer (Including a Reseller of the Vendors Products).




---



##### 



EQUITY INVESTMENTS:
  GOODWILL:
    Investments 
    Equity Method and Joint Ventures, The Equity Method of Accounting for Investments in
    Common Stock,
    OTHER INTANGIBLE ASSETS:
  FAIR VALUES OF FINANCIAL INSTRUMENTS:
    IMPAIRMENT OF LONG-LIVED ASSETS:
  TRANSACTION PROCESSING PROVISIONS:




---



##### 



NONCONTROLLING INTEREST: Consolidation, Noncontrolling Interests in
    Consolidated Financial Statements - an amendment of
    ARB No. 51.
    FOREIGN CURRENCY TRANSLATION:
  COMPREHENSIVE INCOME: Comprehensive Income, Reporting
    Comprehensive Income,
  TREASURY STOCK:
  DERIVATIVE INSTRUMENTS AND HEDGING
    ACTIVITIES: Derivatives and
    Hedging, Accounting for Derivative
    Instruments and Hedging Activities. Accounting for
    Certain Derivative Instruments and Hedging Activities, an
    amendment of SFAS No. 133.
  REVENUE RECOGNITION:
  point-of-sale point-of-sale




---



##### 



EITF 00-21, Revenue Arrangements with Multiple Deliverables.
        REIMBURSABLE ITEMS: out-of-pocket No. 01-14, Income Statement Characterization of Reimbursements
    Received for Out-of-Pocket Expenses
    Incurred.
  COST OF SERVICES AND SELLING, GENERAL AND ADMINISTRATIVE
    EXPENSES:
    SHARE-BASED COMPENSATION: Compensation  Stock Compensation, Share-Based Payment (Revised).
  Accounting for
    Stock-Based Compensation,
      LEASES: and/or




---



##### 



Leases, Accounting for Leases,
      ADVERTISING:
  INCOME TAXES:
          Income Taxes, Accounting for Income
    Taxes  an Interpretation of FASB Statement 109,
  EARNINGS PER SHARE: Earnings
    Per Share, EITF 03-6-1, Determining Whether Instruments Granted in Share-Based
    Payment Transactions are Participating Securities. EITF 03-6, Participating Securities and the Two-Class Method
    under FASB Statement No. 128, Earnings per
    Share,




---



##### 



RECENT ACCOUNTING
    PRONOUNCEMENTS:
  Accounting
    Standards Update
    2010-01,
    Equity (Topic 505): Accounting for Distributions to
    Shareholders with Components of Stock and Cash (A Consensus of
    the FASB Emerging Issues Task Force)
  2010-01 2010-01), Equity (Topic 505): Accounting for Distributions to
    Shareholders with Components of Stock and Cash (A Consensus of
    the FASB Emerging Issues Task Force), 2010-01 2010-01
  NOTE 2
    Discontinued
    Operations    Presentation of Financial Statements Accounting for the Impairment or Disposal of Long-Lived
    Assets),
    (in millions)

2009

2008

2007Other services revenues

$
20.2



35.3



39.3Reimbursable items


150.3



181.7



104.1Total revenues

$
170.5



217.0



143.4Operating (loss) income

$
(2.9
)


1.5



5.2Income taxes

$
(1.0
)


0.6



1.9(Loss) income from discontinued operations, net of tax

$
(1.8
)


1.0



2.8Loss on disposition, net of tax


(3.4
)






Subtotal

$
(5.2
)


1.0



2.8     NOTE 3
    Fair Value
    Measurement  Fair Value Measurements and Disclosure, Fair Value Measurements,
        Financial Instruments, The Fair Value
    Option for Financial Assets and Financial Liabilities.




---



##### 



NOTE 4
    Relationships
    with Affiliated Companies              Statements of
    Income
      (in thousands)

2009


2008


2007Electronic payment processing services:TSYS de México

$
2



2



3CB&T










5,431Synovus and affiliates










124Total electronic payment processing services

$
2



2



5,558Other services:CB&T

$








7,158Synovus and affiliates










1,412Total other services

$








8,570Reimbursable items:TSYS de México

$
51



54



2CUP Data


75



44



88CB&T










2,067Synovus and affiliates










298Total reimbursable items

$
126



98



2,455




---



##### 



(in thousands)

2009


2008


2007Salaries and other personnel expense:Trustee fees paid to Synovus

$








1,138Total salaries and other personnel expense

$








1,138Net technology and facilities expense:Rent paid to CB&T by TSYS

$








119Rent paid to TSYS by CB&T










(39
)Rent paid to TSYS by Synovus










(1,165
)Total net technology and facilities expense

$








(1,085
)Other operating expenses:Processing support fees paid to TSYS de México

$
147



141



141Management fees paid to Synovus










8,890Misc. fees paid to Synovus










163Misc. fees paid to CB&T










259Banking service fees paid by TSYS to Synovus affiliate banks










12Data processing service fees paid to TSYS de México










1Total other operating expenses

$
147



141



9,466   Nonoperating
    Income
    Cash
    Flow
    Stock
    Options
          NOTE 5
    Cash and Cash
    Equivalents    (in thousands)

2009


2008Cash and cash equivalents in domestic accounts

$
403,421



149,047Cash and cash equivalents in foreign accounts


46,534



62,318Total

$
449,955



211,365




---



##### 



NOTE 6
    Prepaid Expenses
    and Other Current Assets    (in thousands)

2009


2008Prepaid expenses

$
14,071



14,079Supplies inventory


10,285



9,586Income taxes receivable


72



23,752Other


47,696



41,195Total

$
72,124



88,612   NOTE 7
    Property and
    Equipment, net    (in thousands)

2009


2008Computer and other equipment

$
230,633



223,540Buildings and improvements


225,232



220,696Furniture and other equipment


112,636



116,430Land


16,882



16,556Other


12,926



774Total property and equipment


598,309



577,996Less accumulated depreciation and amortization


309,111



286,655Property and equipment, net

$
289,198



291,341       NOTE 8
    Computer
    Software, net    (in thousands)

2009


2008Licensed computer software

$
383,045



361,626Software development costs


240,992



208,968Acquisition technology intangibles


55,975



55,156Total computer software


680,012



625,750Less accumulated amortization:Licensed computer software


292,238



259,781Software development costs


161,682



142,202Acquisition technology intangibles


28,958



21,729Total accumulated amortization


482,878



423,712Computer software, net

$
197,134



202,038         WeightedAverageAmortizationAt December 31, 2009

Period (Yrs)Licensed computer software


7.0Software development costs


6.2Acquisition technology intangibles


7.8Total


6.8




---



##### 



Licensed


Software


AcquisitionComputer


Development


Technology(in thousands)

Software


Costs


Intangibles2010

$
30,432



24,804



6,4472011


23,450



20,475



5,9412012


20,660



15,748



5,2322013


12,988



11,209



3,3052014


3,061



7,034



2,920   NOTE 9
    Contract
    Acquisition Costs, net    (in thousands)

2009


2008Payments for processing rights, net

$
59,085



73,201Conversion costs, net


68,953



58,367Total

$
128,038



131,568           WeightedAverageAmortizationAt December 31, 2009

Period (Yrs)Payments for processing rights


9.4Conversion costs


6.6Total


8.2     Payments for

Conversion(in thousands)

Processing Rights

Costs2010

$
16,548



17,0652011


12,923



17,0682012


10,134



11,6842013


8,018



8,7482014


6,123



6,699   NOTE 10
    Goodwill




---



##### 



North America


International


Merchant(in thousands)

Services


Services


Services


ConsolidatedBalance as of December 31, 2007

$
72,698



37,747



32,100


$
142,545Acquisition of Infonox










28,395



28,395Transfer goodwill between segments


(2,084
)






2,084



Currency translation adjustments






(4,945
)






(4,945
)Balance as of December 31, 2008


70,614



32,802



62,579



165,995Infonox purchase price allocation adjustment










747



747Currency translation adjustments






1,379







1,379Balance as of December 31, 2009

$
70,614



34,181



63,326


$
168,121   NOTE 11  Equity
    Investments
           (in millions)

2009


2008CUP Data

$
68.0



65.9TSYS de México


7.5



8.1Total

$
75.5



74.0   NOTE 12
    Other Intangible
    Assets, net      2009Accumulated(in thousands)

Gross


Amortization


NetCustomer relationships

$
27,796



(14,151
)

$
13,645Covenants-not-to-compete


1,000



(775
)


225Trade name


2,084



(1,822
)


262Total

$
30,880



(16,748
)

$
14,132   2008Accumulated(in thousands)

Gross


Amortization


NetCustomer relationships

$
29,451



(13,113
)

$
16,338Covenants-not-to-compete


1,600



(1,075
)


525Trade name


2,046



(1,457
)


589Total

$
33,097



(15,645
)

$
17,452       WeightedAverageAmortizationAt December 31, 2009

Period (Yrs)Customer relationships


8.7Covenant-not-to-compete


2.8Trade name


2.8Total


8.1




---



##### 



(in thousands)2010

$
3,0982011


2,6062012


2,6062013


1,3562014


1,106   NOTE 13
    Long-term Debt
    and Capital Lease Obligations




---



##### 



(in thousands)

2009


2008LIBOR + 0.60%, unsecured term loan, due December 21, 2012,
    with principal to be paid at maturity

$
168,000



168,000LIBOR + 0.80%, unsecured term loan, due November 2, 2011,
    with principal paid at maturity


21,773



16,6023.95% note payable, due March 1, 2011, with monthly
    interest and principal payments


8,778



15,496LIBOR + 2.00%, unsecured term loan, due November 16, 2011,
    with quarterly interest payments and principal to be paid at
    maturity


804



2,914LIBOR + 2.00%, unsecured term loan, due April 30, 2009,
    with quarterly interest payments and principal to be paid at
    maturity






1,858Total debt


199,355



204,870Less current portion


6,988



8,575Noncurrent portion of long-term debt

$
192,367



196,295     (in thousands)2010

$
6,9882011


24,3672012


168,0002013


2014


     (in thousands)

2009


2008Capital lease obligations

$
19,045



19,920Less current portion


6,289



6,344Noncurrent portion of capital leases

$
12,756



13,576     (in thousands)2010

$
6,9902011


7,2152012


4,1942013


2,1902014


83Total minimum lease payments


20,672Less amount representing interest


1,627$
19,045   NOTE 14
    Other Current
    Liabilities    (in thousands)

2009


2008Client liabilities

$
45,824



30,723Accrued expenses


33,274



26,747Deferred revenues


31,243



22,619Dividends payable


13,828



13,779Transaction processing provisions


5,483



5,417Client postage deposits


3,736



3,772Accrued income taxes


252



2,808Other


19,676



24,886Total

$
153,316



130,751   NOTE 15
    Equity  DIVIDENDS:




---



##### 



EQUITY COMPENSATION PLANS:
  (a)


(b)


(c)Weighted-average


Number of securities remainingNumber of securities to be


exercise price of


available for future issuance(in thousands, except

issued upon exercise of


outstanding


under equity compensation plansper share data)

outstanding options, warrants


options, warrants


(excluding securities reflectedPlan Category

and rights


and rights


in column (a))Equity compensation plans approved by security holders


6,955
(1)

$
25.54



22,490
(2)Equity compensation plans not approved by security holders










Total


6,955


$
25.54



22,490   (1)
    
    Does not include an aggregate of
    171,467 shares of nonvested awards which will vest over the
    remaining years through 2012.(2)
    
    Includes 22,490,211 shares
    available for future grants under the Total System Services,
    Inc. 2000 Long-Term Incentive Plan, 2002 Long-Term Incentive
    Plan, 2007 Omnibus Plan and 2008 Omnibus Plan.    NOTE 16
    Share-Based
    Compensation  General
    Description of Share-Based Compensation Plans
          Long-Term
    Incentive Plans  Synovus




---



##### 



2007WeightedAverage(in thousands, except per share data)

Options


Exercise PriceOptions:Outstanding at beginning of year


6,045


$
26.48Granted


103



31.93Exercised


(690
)


20.77Net Synovus/TSYS employee transfers in and out


15



23.57Forfeited/canceled/converted to TSYS options


(5,473
)


27.29Outstanding at end of year





$
Options exercisable at year-end





$
Weighted average fair value of options granted during the year





$
7.22   Long-Term
    Incentive Plans  TSYS
        Share-Based
    Compensation
      Nonvested Awards:
 2009


2008


2007Number of shares


513,920



697,911



241,260Market value

$
6.8 million


$
15.3 million


$
7.6 million




---



##### 



2009


2008


2007Weighted





Weighted





WeightedAverage





Average





AverageNonvested shares




Grant-Date





Grant-Date





Grant-Date(in thousands, except per share data)

Shares


Fair Value


Shares


Fair Value


Shares


Fair ValueOutstanding at beginning of year


1,014


$
23.46



591


$
26.15



514


$
22.69Issued


514



13.28



698



21.89



241



31.37Vested


(414
)


23.77



(258
)


25.24



(148
)


22.63Forfeited/canceled


(30
)


20.34



(17
)


25.19



(16
)


26.37Outstanding at end of year


1,084


$
18.60



1,014


$
23.46



591


$
26.15         Number ofTotal Number of


Performance SharesYear of Initial Award

Shares Awarded


to be Vested2008


182,816



146,252



(2010-2014
)2005


126,087



25,215



(2010-2011
)     2009

2008

2007Weighted



Weighted



WeightedPerformance-based



Average



Average



AverageNonvested shares



Grant Date



Grant-Date



Grant-Date(in thousands, except per share data)

Shares

Fair Value

Shares

Fair Value

Shares

Fair ValueOutstanding at beginning of year


62


$
23.32



25


$
32.27



25


$
20.00Issued


62



13.69



62



23.32



25



32.27Vested


(62
)


23.32



(25
)


32.27



(25
)


20.00Forfeited/canceled






















Outstanding at end of year


62


$
13.69



62


$
23.32



25


$
32.27     Performance-Based Awards: Compensation  Stock Compensation, Share-Based Payment (Revised).




---



##### 



Fair ValueMonth

Primary

Secondary



Estimated



Retirement

Grant Date TermsAuthorized

Measure

Measure

Method

Valuation

Amortized through

Provision

DeterminedJanuary 2009

2009 EPS Growth

Three-year Total Shareholder Return

Monte Carlo simulation

$4.0 million

December 2011

Age 62 with 15 years of service, or age 65

January 2010(2009-2011)







regardless of serviceMarch 2008

2008 EPS Growth

Three-year Total Shareholder Return 
    (2008-2010)

Monte Carlo simulation

$1.0 million

December 2010

Age 62 with 15 years of service, or age 65
    regardless of service

January 2009       Stock Option
    Awards
    2009

2008Number of options granted


1,047,949



771,892Weighted average exercise price

$
13.11


$
23.15Risk-free interest rate


3.19
%


3.42
%Expected volatility


42.00
%


36.57
%Expected term (years)


8.6



8.7Dividend yield


2.14
%


1.21
%Weighted average fair value

$
5.31


$
9.73




---



##### 



2009


2008


2007Weighted





Weighted





Weighted(in thousands,




Average





Average





Averageexcept per share data)

Options


Exercise Price


Options


Exercise Price


Options


Exercise PriceOptions:Outstanding at beginning of year


6,185


$
27.59



5,439


$
28.20



1,066


$
15.53Granted


1,048



13.11



771



23.15



5,195



28.55Exercised


(1
)


1.83



(14
)


18.62



(822
)


13.99Forfeited/canceled


(277
)


24.36



(11
)


28.40







Outstanding at end of year


6,955


$
25.54



6,185


$
27.59



5,439


$
28.20Options exercisable at year-end


5,357


$
28.15



5,250


$
28.14



2,015


$
24.72Weighted average fair value of options granted during the year





$
5.31






$
9.73






$
4.31     (in thousands,except per share data)Outstanding


ExercisableNumber Outstanding


Range of


Number Exercisable


Range ofat December 31, 2009


Exercise Prices


at December 31, 2009


Exercise Prices1,418



$13.11 - 19.64



370



$13.11 - 19.64974



20.10 - 25.81



457



20.10 - 25.811,051



26.85 - 27.69



1,051



26.85 - 27.69502



28.02 - 29.18



502



28.02 - 29.183,010



30.29 - 33.36



2,977



30.29 - 33.36Total
    6,955



Weighted
    Average$           25.54



Total
    5,357



Weighted Average
    $           28.15   Outstanding


ExercisableAverage remaining contractual life (in years)


4.2



2.9Aggregate intrinsic value (in thousands)

$
(57,514
)

$
(58,281
)   Options Exercised

Intrinsic Value2009


1,205



$14,3002008


14,399



$64,0002007


821,525



$13.3 million




---



##### 



NOTE 17
    Treasury
    Stock    Number ofTreasury

Treasury(in thousands)

Shares

Shares CostDecember 31, 2009


3,680


$
69,950December 31, 2008


3,652



69,641December 31, 2007


1,695



34,138   Stock Repurchase
    Plan
          MaximumNumber ofTotal Number of


Shares ThatCumulative Shares Purchased


May Yet BeTotal Number





as Part of Publicly


Purchasedof Shares


Average Price


Announced Plans


Under the Plans(in thousands, except per share data)

Purchased


Paid per Share


or Programs


or ProgramsOctober 2009





$




3,072



6,928November 2009










3,072



6,928December 2009










3,072



6,928Total





$
   Shares Issued for
    Options Exercised
    2009

2008

2007Issued from treasury


1,205



12,198



69,325Newly issued






2,201



752,200   Treasury
    Shares




---



##### 



NOTE 18
    Other
    Comprehensive Income (Loss)      Compensation  Retirement
    Benefits, Employers Accounting for
    Defined Benefit Pension and Other Postretirement Plans.
    Beginning


Pretax





Net-of-Tax


Ending(in thousands)

Balance


amount


Tax effect


Amount


BalanceDecember 31, 2006

$
5,685



19,121



4,165



14,956


$
20,641Foreign currency translation adjustments

$
21,570



9,456



1,824



7,632


$
29,202Change in accumulated OCI related to postretirement healthcare
    plans


(929
)


76



27



49



(880
)December 31, 2007

$
20,641



9,532



1,851



7,681


$
28,322Foreign currency translation adjustments

$
29,202



(43,315
)


(8,255
)


(35,060
)

$
(5,858
)Change in accumulated OCI related to postretirement healthcare
    plans


(880
)


194



83



111



(769
)December 31, 2008

$
28,322



(43,121
)


(8,172
)


(34,949
)

$
(6,627
)Foreign currency translation adjustments

$
(5,858
)


14,140



1,995



12,145


$
6,287Change in accumulated OCI related to postretirement
    healthcare plans


(769
)


235



80



155



(614
)December 31, 2009

$
(6,627
)


14,375



2,075



12,300


$
5,673   Income
    Taxes, Accounting for Income Taxes  Special
    Areas,
  NOTE 19
    Commitments and
    Contingencies  LEASE COMMITMENTS:




---



##### 



(in thousands)2010

$
87,8092011


48,0042012


16,3002013


8,8332014


5,272Thereafter


14,641Total future minimum lease payments

$
180,859       CONTRACTUAL COMMITMENTS:
  CONTINGENCIES: Contingencies, Accounting for Contingencies.
  GUARANTEES AND INDEMNIFICATIONS:
    NOTE 20
    Income
    Taxes      Years Ended December 31,(in thousands)

2009


2008


2007Current income tax expense (benefit):Federal


$114,716



125,743



151,552State


4,311



4,678



(3,010
)Foreign


6,185



5,075



3,326Total current income tax expense


125,212



135,496



151,868Deferred income tax expense (benefit):Federal


(4,237
)


(3,469
)


(11,683
)State


947



(390
)


1,607Foreign


(684
)


(431
)


278Total deferred income tax benefit


(3,974
)


(4,290
)


(9,798
)Total income tax expense


$121,238



131,206



142,070




---



##### 



Years Ended December 31,(in thousands)

2009


2008


2007Computed expected income tax expense


$118,507



131,057



130,302Increase (decrease) in income tax expense resulting from:Noncontrolling interests in income of consolidated subsidiaries
    and equity in income of equity investments


1,695



1,806



1,421State income tax expense (benefit), net of federal income tax
    effect


3,418



2,787



(918
)Increase (decrease) in valuation allowance


(6,159
)


5,006



2,003Tax credits


(4,299
)


(4,131
)


(5,290
)Federal income tax expense resulting from ASC 740 Election


9,844







Federal income tax expense resulting from deconsolidation










10,369Permanent differences and other, net


(1,768
)


(5,319
)


4,183Total income tax expense


$121,238



131,206



142,070     At December 31,(in thousands)

2009


2008Deferred income tax assets:Net operating loss and income tax credit carryforwards

$
18,653



8,207Allowances for doubtful accounts and billing adjustments


2,114



2,686Deferred revenue


14,857



3,434Other, net


29,610



48,104Total deferred income tax assets


65,234



62,431Less valuation allowance for deferred income tax assets


(12,870
)


(19,029
)Net deferred income tax assets


52,364



43,402Deferred income tax liabilities:Excess tax over financial statement depreciation


(36,223
)


(26,655
)Computer software development costs


(39,150
)


(39,655
)Purchase accounting adjustments


(1,672
)


(1,953
)Foreign currency translation


(4,851
)


(2,856
)Other, net


(6,328
)


(10,068
)Total deferred income tax liabilities


(88,224
)


(81,187
)Net deferred income tax liabilities

$
(35,860
)


(37,785
)Total net deferred tax assets (liabilities):Current

$
11,302



22,793Noncurrent


(47,162
)


(60,573
)Net deferred income tax liability

$
(35,860
)


(37,780
)




---



##### 



non-U.S. subsidiaries non-U.S. earnings non-U.S. tax non-U.S. countries.
    Income
    Taxes, Accounting for Uncertainty
    in Income Taxes, an Interpretation of FASB Statement
    No. 109,
  (1)
  Year EndedDecember 31,(in millions)

2009Beginning balance

$
4.4Current activity:Additions based on tax positions related to current year


0.1Additions for tax positions of prior years


2.5Reductions for tax positions of prior years


(2.0
)Settlements


Net, current activity


0.6Ending balance

$
5.0   (1)
    
    Unrecognized state tax benefits are
    not adjusted for the federal tax impact.    NOTE 21
    Employee Benefit
    Plans




---



##### 



MONEY PURCHASE PLAN:
  U.S.-based
  PROFIT SHARING PLAN:
  401(K) PLAN:
    (in thousands)

2009


2008


2007Money Purchase Plan

$
21,985



21,613



18,699Profit Sharing Plan






4,473



17,546401(k) Plan


318



656



1,007   STOCK PURCHASE PLAN:
  (in thousands)2009

$
3,7782008


5,8912007


5,451   POSTRETIREMENT MEDICAL BENEFITS PLAN:
  NOTE 22
    Segment
    Reporting, including Geographic Area Data and Major
    Customers  Segment Reporting, Disclosures about
    Segments of an Enterprise and Related Information.




---



##### 



2009 vs. 2008


2008 vs. 2007(in thousands)










Change


ChangeOperating Segments

2009


2008


2007


$


%


$


%Revenues before reimbursable itemsNorth America Services

$
880,668



938,442



939,148



(57,774
)


(6.2
)%

$
(706
)


(0.1
)%International Services


322,697



307,361



243,226



15,336



5.0
%


64,135



26.4
%Merchant Services


242,841



234,467



231,947



8,374



3.6
%


2,520



1.1
%Intersegment revenues


(28,322
)


(23,516
)


(25,465
)


(4,806
)


20.4
%


1,949



(7.7
)%Revenues before reimbursable items from external customers

$
1,417,884



1,456,754



1,388,856



(38,870
)


(2.7
)%

$
67,898



4.9
%Total revenuesNorth America Services

$
1,048,932



1,136,901



1,150,711



(87,969
)


(7.7
)%

$
(13,810
)


(1.2
)%International Services


337,757



318,534



253,497



19,223



6.0
%


65,037



25.7
%Merchant Services


337,635



298,792



292,118



38,843



13.0
%


6,674



2.3
%Intersegment revenues


(36,262
)


(32,581
)


(33,876
)


(3,681
)


11.3
%


1,295



(3.8
)%Revenues from external customers

$
1,688,062



1,721,646



1,662,450



(33,584
)


(2.0
)%

$
59,196



3.6
%Depreciation and amortizationNorth America Services

$
86,730



97,006



101,130



(10,276
)


(10.6
)%

$
(4,124
)


(4.1
)%International Services


36,328



33,490



24,213



2,838



8.5
%


9,277



38.3
%Merchant Services


32,864



27,797



26,680



5,067



18.2
%


1,117



4.2
%Total depreciation and amortization

$
155,922



158,293



152,023



(2,371
)


(1.5
)%

$
6,270



4.1
%Segment operating incomeNorth America Services

$
234,512



265,858



253,880



(31,346
)


(11.8
)%

$
11,978



4.7
%International Services


43,238



48,362



44,083



(5,124
)


(10.6
)%


4,279



9.7
%Merchant Services


64,283



65,595



64,698



(1,312
)


(2.0
)%


897



1.4
%Spin-related costs






(11,140
)


(13,526
)


11,140



(100.0
)%


2,386



(17.6
)%Operating income

$
342,033



368,675



349,135



(26,642
)


(7.2
)%

$
19,540



5.6
%Total assetsNorth America Services

$
1,535,129



1,415,960



1,271,177



119,169



8.4
%

$
144,783



11.4
%International Services


379,606



324,313



319,279



55,293



17.0
%


5,034



1.6
%Merchant Services


215,855



212,779



197,230



3,076



1.4
%


15,549



7.9
%Intersegment assets


(419,636
)


(403,028
)


(308,605
)


(16,608
)


4.1
%


(94,423
)


30.6
%Total assets

$
1,710,954



1,550,024



1,479,081



160,930



10.4
%

$
70,943



4.8
%




---



##### 



GEOGRAPHIC AREA DATA:
  AtDecember 31,(in millions)

2009


2008United States

$
203.6



227.1Europe


60.7



54.1Japan


6.4



3.5Other


18.5



6.6Totals

$
289.2



291.3     (in millions)

2009


%


2008


%


2007


%United States

$
1,194.4



70.7


$
1,253.0



72.8


$
1,256.9



75.6Europe


269.4



16.0



269.1



15.6



211.8



12.7Canada


139.7



8.3



127.1



7.4



126.8



7.6Japan


48.9



2.9



33.9



2.0



24.5



1.5Mexico


8.2



0.5



13.4



0.8



14.0



0.9Other


27.5



1.6



25.1



1.4



28.5



1.7Totals

$
1,688.1



100.0


$
1,721.6



100.0


$
1,662.5



100.0   GEOGRAPHIC AREA REVENUE BY OPERATING
    SEGMENT:
  North America Services


International Services


Merchant Services(in millions)

2009


2008


2007


2009


2008


2007


2009


2008


2007United States

$
859.5



956.6



969.8


$
0.1



0.2



0.5


$
334.8



296.2



286.6Europe


0.9



0.9



1.7



268.5



268.2



210.1











Canada


139.1



126.5



126.2















0.6



0.6



0.6Japan














48.9



33.9



24.5











Mexico


8.2



13.4



14.0























Other


9.6



9.7



10.5



17.1



14.6



17.2



0.8



0.8



0.8Totals

$
1,017.3



1,107.1



1,122.2


$
334.6



316.9



252.3


$
336.2



297.6



288.0   MAJOR CUSTOMER:
  NOTE 23
    Supplemental Cash
    Flow Information   Nonvested Share
    Awards
    2009

2008

2007Number of shares

513,920

697,911

241,260Market value

$6.8 million

$15.3 million

$7.6 million




---



##### 



Equipment and Software Acquired Under Capital Lease
    Obligations
    NOTE 24
    Acquisitions  Infonox on the
    Web
      (in thousands)Cash and cash equivalents

$
899Intangible assets


21,500Goodwill


29,142Other assets


3,222Total assets acquired


54,763Other liabilities


4,190Total liabilities assumed


4,190Net assets acquired

$
50,573     NOTE 25
    Synovus Spin-off
    of TSYS              (in millions)

2008


2007Incremental value of converting Synovus stock options to TSYS
    stock options

$
7



6Other operating expenses


4



8Total operating expenses


11



14Tax impact*


(3
)


(2
)Total operating expenses, net of tax impact


8



12Income taxes related to deconsolidation






11Total

$
8



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.




---



##### 



NOTE 26
    Collaborative
    Arrangement  Collaborative Arrangements, No. 07-1, Accounting for Collaborative Arrangements.
       December 31, 2008


December 31, 2007As


Effect of





As


Effect ofPreviously


Adoption of


Currently


Previously


Adoption of


Currently(in thousands)

Reported


ASC 808


Reported


Reported


ASC 808


ReportedTechnology and facilities expense

$




705


$
705


$




59


$
59Other operating expenses






1,326



1,326







120



120Total operating expenses

$




2,031


$
2,031


$




179


$
179Operating profit

$




(2,031
)

$
(2,031
)

$




(179
)

$
(179
)Equity in income of equity investments, net of tax

$
(2,031
)


2,031






$
(179
)


179



Net income

$
(2,031
)





$
(2,031
)

$
(179
)





$
(179
)   NOTE 27
    Earnings Per
    Share    December 31, 2009


December 31, 2008


December 31, 2007Common


Participating


Common


Participating


Common


Participating(in thousands, except per share data)

Stock


Securities


Stock


Securities


Stock


SecuritiesBasic EPS:Net income

$
215,213







250,100







237,443Less income allocated to nonvested awards


(1,644
)


1,644



(2,069
)


2,069



(873
)


873Net income allocated to common stock for EPS calculation(a)

$
213,569



1,644



248,031



2,069



236,570



873Average common shares outstanding(b)


195,623



1,511



196,106



1,640



196,759



729Basic EPS(a)/(b)

$
1.09



1.09



1.26



1.26



1.20



1.20Diluted EPS:Net income

$
215,213







250,100







237,443Less income allocated to nonvested awards


(1,644
)


1,644



(2,069
)


2,069



(873
)


873Net income allocated to common stock for EPS calculation(c)

$
213,569



1,644



248,031



2,069



236,570



873Average common shares outstanding


195,623



1,511



196,106



1,640



196,759



729Increase due to assumed issuance of shares related to common
    equivalent shares outstanding


63







20







192Average common and common equivalent shares outstanding(d)


195,686



1,511



196,126



1,640



196,951



729Diluted EPS(c)/(d)

$
1.09



1.09



1.26



1.26



1.20



1.20




---



##### 



NOTE 28
    Subsequent
    Events




---



##### 



Report of
    Independent Registered Public Accounting Firm
             Internal Control 
    Integrated Framework
  
  Atlanta, Georgia
 March 1, 2010




---



##### 



Managements
    Report on Internal Control Over Financial Reporting
   Rule 13a-15(f)
    Internal
    Control  Integrated Framework
      -s- Philip W. Tomlinson

-s- James B. LiphamPhilip W. Tomlinson
    Chairman of the Board &
    Chief Executive Officer

James B. Lipham
    Senior Executive Vice President &
    Chief Financial Officer




---



##### 



Report of
    Independent Registered Public Accounting Firm
     Internal Control 
    Integrated Framework
        Internal Control  Integrated
    Framework
    
  Atlanta, Georgia
 March 1, 2010




---



##### 



Quarterly Financial
    Data (Unaudited), Stock Price, Dividend Information
        First


Second


Third


Fourth(in thousands, except per share data)

Quarter


Quarter


Quarter


Quarter2009

Revenues

$
408,933



411,993



432,296



434,840Operating income


78,115



82,779



87,855



93,284Net income attributable to TSYS


46,526



53,447



55,026



60,214Basic earnings per share


0.24



0.27



0.28



0.31Diluted earnings per share


0.24



0.27



0.28



0.31Cash dividends declared


0.07



0.07



0.07



0.07Stock prices:High


15.07



14.79



16.43



17.71Low


11.33



12.20



12.61



14.76Close


13.81



13.39



16.11



17.272008

Revenues

$
419,826



429,630



439,446



432,744Operating income


86,096



96,848



95,290



90,441Net income attributable to TSYS


56,614



63,084



64,074



66,328Basic earnings per share


0.29



0.32



0.32



0.34Diluted earnings per share


0.29



0.32



0.32



0.34Cash dividends declared


0.07



0.07



0.07



0.07Stock prices:High


29.50



26.62



23.15



16.47Low


18.76



22.14



14.30



10.36Close


23.66



22.22



16.40



14.00




---



##### 



STOCK PERFORMANCE
    GRAPH
    COMPARISON OF
    FIVE YEAR CUMULATIVE TOTAL RETURN
    AMONG TSYS, THE S&P 500 INDEX
    AND THE S&P SYSTEMS SOFTWARE INDEX
  
  2004


2005


2006


2007


2008


2009TSYS


$
100



$
82



$
111



$
133



$
68



$
85S&P 500


$
100



$
105



$
121



$
128



$
81



$
102S&P SS


$
100



$
96



$
113



$
135



$
84



$
128