The following discussion should be read in conjunction with our consolidated financial statements and the notes thereto included in this Quarterly Report on Form 10-Q.

Statements contained in this Quarterly Report on Form 10-Q, which are not historical in nature, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended (the "Act") and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). These forward-looking statements include, without limitation, statements in Item 2, Management's Discussion and Analysis of Financial Condition and Results of Operations, regarding matters which are not historical fact, including our intent, belief or current expectations of our company or our officers with respect to, among other things, trends in the travel industry, business and growth strategies, use of technology, ability to integrate acquired businesses, future actions, future performance or results of operations, and the outcome of contingencies such as legal proceedings.

Forward-looking statements involve certain risks and uncertainties that could cause actual results to differ materially from anticipated results. These risks and uncertainties include factors affecting the travel and education industry generally, competition, dependence on key personnel and vendor relationships, our ability to successfully integrate the operations of existing or acquired companies, and a variety of factors such as conflict in the Middle East, periods of international unrest, the outbreak of disease, changes in the direct-mail environment, protection of intellectual rights, unidentified taxation exposure, recession, weather conditions and concerns for passenger safety that could cause a decline in travel demand, as well as the risk factors, and other factors as may be identified from time to time in our Securities and Exchange Commission filings or in our press releases. For a more complete discussion of these risks, please refer to Item 1A Risk Factors disclosure in our Annual Report on Form 10-K filed on March 12, 2009 and those factors set forth under Part II, Item 1A Risk Factors set forth in this Quarterly Report on Form 10-Q. All forward-looking statements are expressly qualified in their entirety by these factors and all related cautionary statements. We do not undertake any obligation to update any forward-looking statements.

Executive Overview

We are a leading educational company that (1) organizes and promotes worldwide travel programs for students, athletes and professionals and (2) provides over 8 million pages of online research content. People to People Ambassador Programs provide worldwide travel programs for youth, student leaders and professionals. Youth travel programs provide opportunities for grade school, middle school and high school students to learn about the history, government, economy and culture of the foreign and domestic destinations they visit as well as for middle and high school athletes to participate in international sports challenges. Our student leader programs provide educational opportunities for middle school and high school students to learn leadership, government, college admissions and community involvement skills at domestic destinations. Our professional programs emphasize meetings and seminars between delegates and persons in similar professions abroad. Discovery Student Adventures provide adventure based travel packages for students, kindergarten through twelfth grade, to destinations outside of North America. The BookRag's website, www.bookrags.com, is an educational website that attracts millions of users and advertisers each month. Students and teachers are able to "research anything" through over 8 million pages of content, including BookRags-created material, licensed material, user-generated content, and other third party content. This acquisition aligns with our mission of bridging cultural and political borders through education, is a thriving young business and is a complementary revenue stream to the seasonal nature of the student travel industry. Its key website metrics, including but not limited to, monthly page views, website visitors, and unique users, have had year on year double digit growth rates. This acquisition was made for the purpose of owning a business that attracts millions of similar customers and has experience and expertise in internet growth, yet we do not expect this business to perform at the level of our travel programs. We expect BookRags to continue to be profitable as it is still in the growth phase; however, we believe its revenues and earnings will be negatively impacted by the current economic conditions, but not to the extent of our educational travel business.

Because our operating results depend primarily on income from our travel programs, acquisition and retention costs influence our operating results. Additionally, the level of expenses required to promote and operate our programs will impact our operating results. The seasonality of our business is always a consideration. The majority of our travel programs occur in June and July of each year, complimented by the majority of content sales expected to occur during the school year, primarily September to June. We have historically earned more than 80 percent of our annual revenues in the second and third quarters, which we anticipate will continue for the foreseeable future. Historically these seasonal revenues have more than offset operating losses incurred during the rest of the year.

For 2009, our focus is targeted at the following: increase net enrollments, improve margin through effective program cost management, maximize utilization of cash, develop our websites, improve brand recognition, investigate growth opportunities, manage expenses, and increase efficiency through improved business processes and automation. We will continue to seek opportunities to improve our performance and add complementary revenue streams, such as the contract we signed with Discovery Education, Inc. during the first quarter of 2009. Please see "2009 Net Enrollments" below for further discussion on our 2009 outlook on delegate registrations.

Results of Operations

The following table sets forth the consolidated financial results and change in
dollars and percentages for the periods indicated:

Comparison of the Three Months Ended March 31, 2009 to the Three Months Ended
March 31, 2008

                                                 Three Months Ended March 31,
                                        2009         2008       $ Change       % Change
Total revenue                         $ 10,006     $  7,880     $   2,126             27 %
Cost of goods sold                       4,725        4,410           315              7 %
Gross margin                             5,281        3,470         1,811             52 %
Selling and marketing                    8,872        9,364          (492 )           (5 %)
General and administrative expenses      3,369        3,018           351             12 %
Operating income                        (6,960 )     (8,912 )       1,952             22 %
Other income (expense)                    (447 )        903        (1,350 )         (150 %)
Income before tax                       (7,407 )     (8,009 )         602              8 %
Income tax benefit                       2,153        2,535          (382 )          (15 %)
Net loss                              $ (5,254 )   $ (5,474 )   $     220             (4 %)

During the quarter ended March 31, 2009, we traveled 3,492 delegates, an increase of 4 percent from 3,365 delegates during the comparable 2008 quarter. In the first quarter of 2009, total revenue increased $2.1 million to $10.0 million from $7.9 million in the first quarter of 2008. Gross margin increased to $5.3 million in the first quarter of 2009 compared to $3.5 million in the first quarter in 2008. The increase in revenue and gross margin is primarily due to the addition of online content and advertising sales from BookRags which we acquired in May 2008 and an increase in the number of delegates traveling with us at lower costs per delegate compared to the first quarter of 2008. First quarter revenue and gross margin in 2009 include $0.9 million and $0.8 million, respectively, from BookRags.

Selling and marketing expenses were $8.9 million and $9.4 million during the first quarters of 2009 and 2008, respectively. The $0.5 million decrease was primarily due to a $0.4 million reduction in marketing activities for our current and future travel programs and a $0.1 million decline in personnel expenses because of the 16% reduction of employees in January of 2009. General and administrative expenses were $3.4 million and $3.0 million during the first quarters of 2009 and 2008, respectively. The $0.4 million increase was due to a $0.4 million increase in legal and professional fees and a $0.1 million increase in depreciation on new technology assets, which was offset by a $0.3 million decline in personnel expenses because of the 20% reduction of employees in January of 2009.

The income tax benefit has been recorded based on a 33 percent estimated annual effective income tax rate, applied to the pre-tax income for the quarters ended March 31, 2009 and 2008. During the quarter ended March 31, 2009, an adjustment was recorded for uncertain tax positions reducing the overall rate to 29 percent. The difference from the statutory rate of 35 percent is primarily due to tax exempt interest income earned in the periods.

Results of Operations by Segment

With the acquisition of BookRags, Inc. on May 15, 2008, the Company changed from having one reporting segment to having two reporting segments, consisting of (1) Travel Programs and Other, which provides educational travel services to students, professionals and athletes through multiple itineraries within five travel program types, and (2) BookRags, an internet research site housing content sales and advertising revenue.

Our travel programs' gross margin is comprised of gross receipts less direct program costs, including accommodation, transportation, speakers, facilitators, and event costs. BookRags' gross margin is comprised of content, subscription, and advertising revenues via www.bookrags.com, less commissions and amortization of intangible assets directly associated with sales.

Segment results of operations for the quarter ended March 31, 2009 are as follows (in thousands):

                                                      March 31, 2009

                                            Travel
                                       Programs & Other       BookRags       Total
Total revenue                         $            9,133     $      873     $ 10,006
Cost of goods sold                                 4,627             98        4,725
Gross margin                                       4,506            775        5,281
Selling and marketing                              8,663            209        8,872
General and administrative expenses                3,308             61       3,3 69
Operating income                                  (7,465 )          505       (6,960 )
Other income                                        (447 )            -         (447 )
Income before tax                                 (7,912 )          505       (7,407 )
Income tax benefit (provision)                     2,320           (167 )      2,153
Net income (loss)                     $           (5,593 )   $      339     $ (5,254 )

See 'Results of Operations' above for a discussion of year over year variances for Travel Programs and details regarding the portion that was contributed by BookRags. Since BookRags was acquired on May 15, 2008, no prior year amounts are available to compare to the current year.

Any intercompany sales or services provided that exist, which are rare, are eliminated. Intercompany expenses paid for by Ambassadors Programs on behalf of BookRags are recorded as intercompany receivables and payables and eliminated upon consolidation.

Key Performance Non-GAAP Financial Indicators

We analyze our performance on a net income, cash flow and liquidity basis in accordance with generally accepted accounting principles ("GAAP") as well as on a non-GAAP operating, cash flow and liquidity

basis referred to below as "non-GAAP operating results" or "non-GAAP cash flows and liquidity measures." These measures and related discussions are presented as supplementary information in this analysis to enhance the readers' understanding of, and highlight trends in, our core financial results. Any non-GAAP financial measure used by us should not be considered in isolation or as a substitute for measures of performance or liquidity prepared in accordance with GAAP.

2009 Net Enrollments

Net enrollments consist of all individuals traveled year to date plus those actively enrolled for future travel. As of April 20, 2009, we had 35,500 net enrolled participants for our 2009 travel programs, compared to 45,674 net enrolled participants as of the same date last year for our 2008 travel programs. The decrease in net enrollments for our 2009 programs, which we believe is primarily caused by current economic conditions, a decline in consumer confidence and an increase in the unemployment rate, will negatively impact 2009 earnings. We have taken, and will continue to take, measures to mitigate these negative impacts, such as but not limited to increased retention efforts toward 2009 travel, and continuing to implement our expense management plan, which included a reduction in workforce of approximately 17 percent in January of 2009. However, there can be no assurances that any of these measures will have any success, and if so, to what extent.

Deployable Cash

Deployable cash is a non-GAAP liquidity measure. Deployable cash is calculated as the sum of cash, cash equivalents, short-term available-for-sale securities and prepaid program costs and expenses less the sum of accounts payable, accrued expenses and other short-term liabilities (excluding deferred taxes), participant deposits and the current portion of long-term capital lease. We believe the deployable cash measurement is useful in understanding cash available to deploy for current and future business opportunities. See the 'Liquidity' section below for explanations of cash sources and uses.

Deployable Cash Reconciliation (in thousands)
                                                                     March 31,
                                                                2009            2008

Cash, cash equivalents and short-term available-for-sale
securities                                                     $ 107,977     $  115,567
Prepaid program cost and expenses                                 14,866         20,626
Less: Participants' deposits                                     (95,968 )     (103,913 )
Less: Accounts payable/accruals/other liabilities                 (5,376 )       (5,146 )
Deployable cash                                                $  21,499     $   27,134

Free Cash Flow

Free cash flow is a non-GAAP cash flow measure. Free cash flow is calculated as
cash flow from operations less purchase of property, equipment and intangibles.
Management believes this non-GAAP measure is useful to investors in
understanding the cash generated within the current period for future use in
operations. Free cash flow per share is calculated as free cash flow divided by
weighted average shares outstanding at year end.

Free Cash Flow Reconciliation (in thousands except per share data)
                                                                     March 31,
                                                                 2009         2008
            Cash flow from operations as reported              $ 36,296     $ 38,045
            Purchase of property, equipment and intangibles      (1,524 )     (1,781 )
            Free cash flow                                     $ 34,772     $ 36,264
            Weighted average shares outstanding at quarter end   18,619       18,955
            Free cash flow per share                           $   1.87     $   1.91

Liquidity

At March 31, 2009, we had $108.0 million of cash, cash equivalents and short-term available-for-sale securities, including program participant funds of $96.0 million. At March 31, 2008, we had $115.6 million of cash, cash equivalents and short-term available-for-sale securities, including program participant funds of $103.9 million. Overall, cash, cash equivalents, short-term available-for-sale securities and participant deposits in 2009 are lower than 2008 due to the decrease in delegates traveling with us on 2009 programs compared to the delegates traveling with us on 2008 programs.

Net cash provided by operations for the three months ended March 31, 2009 and 2008 was $36.3 million and $38.0 million, respectively. The decreased cash flow from operations was primarily related to $9.4 million reduced participant deposits partially offset by $6.0 million less in prepaid program costs for future travel programs and a $1.0 million loss on foreign currency contracts.

Net cash provided by investing activities was $2.3 million for the three months ended March 31, 2009 and cash used in investing activities was $7.3 million for the three months ended March 31, 2008. The increase was primarily related to $9.3 million cash provided by the sale of available-for-sale securities and a $0.4 million decrease in purchases of property and equipment from 2008.

Net cash used in financing activities for the three months ended March 31, 2009 and 2008 was $1.4 million and $6.0 million, respectively. The net change in financing activities is primarily related to the change in stock repurchases and dividends payments. We repurchased $0.4 million of our Common Stock or approximately 57,000 shares during the first quearter of 2009 in comparison to $3.8 million of stock repurchases or approximately 221,000 shares during the first quarter of 2008. During the first quarters of 2009 and 2008, we paid $1.1 million and $2.2 million, respectively, in cash dividends to our shareholders.

Capital Resources

Our business is not capital intensive. However, we do retain funds for operating purposes in order to conduct sales and marketing efforts for future programs.

During the first quarter of 2009, we had an unused line of credit in the amount of $20.0 million. The line of credit covenants include deployable cash greater than zero, tangible net worth greater than $40.0 million and net income after taxes for the current and previous three quarters of greater than $4.0 million. At March 31, 2009, we were in compliance with all covenants. Additionally, we have no plans to draw any of these funds in the immediate future.

We continue to consider acquisitions of educational, travel and youth businesses that may require the use of cash and cash equivalents. No such acquisitions are currently pending and no assurance can be given that definitive agreements for any such acquisitions will be entered into, or, if they are entered into, that they will be on terms favorable to us.

We do not have any material capital expenditure commitments for 2009, not already presented within our March 31, 2009 financial statements. We believe that existing cash and cash equivalents and cash flows from operations will be sufficient to fund our anticipated operating needs and capital expenditures through 2009. For a more complete discussion of these and other contractual factors, please refer to our consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K filed on March 12, 2009.

Interest Rate Risk

We classify our marketable debt investments as available-for-sale securities, which are carried at fair value. Estimated fair value has been determined based upon quoted prices in active markets for identical assets (level 1). Unrealized gains and losses on available-for-sale securities are excluded from operations and reported as accumulated other comprehensive income, net of deferred income taxes. Realized gains and losses on the sale of available-for-sale securities are recognized on a specific identification basis in the statement of operations in the period the investments are sold.

We evaluate investment securities for other-than-temporary declines in fair value on a quarterly basis. If the fair value of investment securities falls below their amortized cost and the decline is deemed to be other-than-temporary, the securities will be written down to current market value, resulting in a loss recorded in the statement of operations. There were no investment securities that management identified to be other-than-temporarily impaired during the quarter ended March 31, 2009 because any decline in fair value was attributable to changes in interest rates and not credit quality, and because we have the ability and intent to hold these investments until a recovery in market price occurs, or until maturity. Realized losses could occur in future periods due to a change in our intent to hold the investments to maturity, a change in our assessment of credit risk, or a change in regulatory or accounting requirements. Significant increases or decreases in the aggregate fair value of our available for-sale securities may affect our liquidity and capital resources, although we believe the credit ratings of investments held substantiate this risk as low.

On March 31, 2009 and December 31, 2008, we held $65.6 million and $69.5 million, respectively, of short-term and long-term available-for-sale securities, consisting primarily of municipal bonds, variable rate demand notes ("VRDN"), and auction rate securities ("ARS"). Of the total balance, $63.8 million and $67.4 million at March 31, 2009 and December 31, 2008, respectively, were in high-quality, tax-exempt municipal obligations. The remaining $1.8 million and $2.1 million were in high quality ARS. The credit markets are experiencing significant uncertainty, and some of this uncertainty has impacted and may continue to impact the markets where our auction rate securities would be offered. During the first quarter of 2009, two of three ARS that originally failed to be re-offered in 2008, representing principal of $1.6 million, were unsuccessfully re-offered at the current auction. The third ARS that originally failed to be re-offered in 2008, representing principal of $0.5 million, is expected to go to auction in the second quarter of 2009. Due to the longer term nature of the next auctions and the continued uncertainty in the financial markets, these ARS values have been classified as long-term assets.

In determining whether the current financial crisis will have an impact on the fair value of these investments, we considered the individual ratings of each bond and ARS held. With regards to bonds we considered the following: the underlying rating of the issuer irrespective of the insurance; the performance of the issuer; the term of the bond; the quality of bond insurance provided by the rating of the bond insurer; and the fair value as of each reporting date. With regards to ARS, we considered the underlying credit quality of student loan portfolios and federal government backing of its collateral as a basis of its valuation. Based on these considerations, we determined that there was not any other than temporary impairment of these investments at the reporting dates. At the reporting dates and into the future we recognize that these investments are subject to general credit, liquidity, market and interest rate risks, which have been accentuated by the current global financial crisis. The fair value of these investments accordingly will continue to change, and we will continue to evaluate their carrying values.

Foreign Currency Exchange Rate Risk

The majority of our travel programs take place outside of the United States and most foreign suppliers require payment in currency other than the U.S. dollar. Accordingly, we are exposed to foreign currency risk relative to changes in foreign currency exchange rates between those currencies and the U.S. dollar. Our processes include a program to provide a hedge against certain of these foreign currency risks, and we use forward contracts that allow us to acquire the foreign currency at a fixed price for a specified period of time. All of the derivatives are cash flow hedges and the majority of the contracts qualify for cash flow hedge accounting under SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities ("SFAS 133").