##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 
 x
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the quarterly period ended September 30, 2007ORo
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 Commission File Number 0-7616
 AVATAR HOLDINGS INC.
 (Exact name of registrant as specified in its charter)
 Delaware(State or other Jurisdiction of Incorporation or Organization)
    
    23-1739078(I.R.S. Employer Identification No.)
 201 Alhambra Circle, Coral Gables, Florida(Address of Principal Executive Offices)
    
    33134(Zip Code)
 Registrants telephone number, including area code (305) 442-7000
 
  x o
  Large accelerated filer o
    
    Accelerated filer x
    
    Non-accelerated filer     o
  o x




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##### 



AVATAR HOLDINGS INC. AND SUBSIDIARIES
 INDEX
 PAGEPART I. Financial InformationItem 1. Financial Statements:Consolidated Balance Sheets  September 30, 2007 (unaudited) and December 31, 2006
    
    
    3Consolidated Statements of Income (Unaudited)   Nine and three months ended September 30, 2007 and 2006
    
    
    4Consolidated Statements of Cash Flows (Unaudited)    Nine months ended September 30, 2007 and 2006
    
    
    5Notes to Consolidated Financial Statements (Unaudited)
    
    
    6Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    17Item 3. Quantitative and Qualitative Disclosure About Market Risk
    
    
    28Item 4. Controls and Procedures
    
    
    28PART II. Other InformationItem 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    29Item 6. Exhibits
    
    
    30EX-31.1 Section 302 Certification of CEOEX-31.2 Section 302 Certification of CFOEX-32.1 Section 906 Certification of CEOEX-32.2 Section 906 Certification of CFO
   
 2




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##### Table of Contents



PART I   FINANCIAL INFORMATION
 
 Item
1. Financial Statements
 
 AVATAR HOLDINGS INC. AND SUBSIDIARIES
 (Unaudited)September 30,
    
    
    December 31,2007
    
    
    2006AssetsCash and cash equivalents
    
    $
    192,030
    
    
    $
    203,760Restricted cash
    
    
    3,603
    
    
    
    3,637Receivables, net
    
    
    4,616
    
    
    
    13,863Land and other inventories
    
    
    416,045
    
    
    
    443,825Property and equipment, net
    
    
    84,846
    
    
    
    59,756Investment in unconsolidated joint ventures
    
    
    7,760
    
    
    
    7,583Prepaid expenses and other assets
    
    
    17,849
    
    
    
    18,553Deferred income taxes
    
    
    
    
    
    
    95Total Assets
    
    $
    726,749
    
    
    $
    751,072Liabilities and Stockholders EquityLiabilitiesAccounts payable
    
    $
    7,617
    
    
    $
    22,053Accrued and other liabilities
    
    
    21,728
    
    
    
    43,694Customer deposits
    
    
    8,765
    
    
    
    18,351Deferred income taxes
    
    
    300
    
    
    
    Estimated development liability for sold land
    
    
    22,016
    
    
    
    24,693Notes, mortgage notes and other debt:Corporate
    
    
    119,800
    
    
    
    120,000Real estate
    
    
    16,235
    
    
    
    16,925Total Liabilities
    
    
    196,461
    
    
    
    245,716Commitments and ContingenciesStockholders EquityCommon Stock, par value $1 per shareAuthorized: 50,000,000 sharesIssued:
10,837,540 shares at September 30, 2007
        10,725,559 shares at December 31, 2006
    
    
    10,838
    
    
    
    10,726Additional paid-in capital
    
    
    232,335
    
    
    
    226,013Retained earnings
    
    
    363,104
    
    
    
    343,641606,277
    
    
    
    580,380Treasury
stock: at cost, 2,551,232 shares at September 30, 2007
        
           at cost, 2,531,823 shares at December 31, 2006
    
    
    (75,989
    )
    
    
    (75,024
    )Total Stockholders Equity
    
    
    530,288
    
    
    
    505,356Total Liabilities and Stockholders Equity
    
    $
    726,749
    
    
    $
    751,072
  3




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AVATAR HOLDINGS INC. AND SUBSIDIARIES
 Nine Months
    
    
    Three Months2007
    
    
    2006
    
    
    2007
    
    
    2006RevenuesReal estate revenues
    
    $
    222,951
    
    
    $
    480,547
    
    
    $
    54,423
    
    
    $
    157,365Interest income
    
    
    6,349
    
    
    
    2,131
    
    
    
    2,112
    
    
    
    614Other
    
    
    1,855
    
    
    
    1,537
    
    
    
    920
    
    
    
    333Total revenues
    
    
    231,155
    
    
    
    484,215
    
    
    
    57,455
    
    
    
    158,312ExpensesReal estate expenses
    
    
    181,353
    
    
    
    348,199
    
    
    
    45,631
    
    
    
    113,765General and administrative expenses
    
    
    18,401
    
    
    
    20,881
    
    
    
    5,215
    
    
    
    7,110Total expenses
    
    
    199,754
    
    
    
    369,080
    
    
    
    50,846
    
    
    
    120,875Equity in
earnings (loss) from unconsolidated joint ventures
    
    
    (14
    )
    
    
    1,885
    
    
    
    (55
    )
    
    
    165Income before income taxes
    
    
    31,387
    
    
    
    117,020
    
    
    
    6,554
    
    
    
    37,602Income tax expense
    
    
    (11,924
    )
    
    
    (42,348
    )
    
    
    (3,470
    )
    
    
    (14,749
    )Net income
    
    $
    19,463
    
    
    $
    74,672
    
    
    $
    3,084
    
    
    $
    22,853Basic Earnings Per Share
    
    $
    2.35
    
    
    $
    9.12
    
    
    $
    0.37
    
    
    $
    2.79Diluted Earnings Per Share
    
    $
    1.98
    
    
    $
    7.22
    
    
    $
    0.35
    
    
    $
    2.21
  4




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AVATAR HOLDINGS INC. AND SUBSIDIARIES
 2007
    
    
    2006OPERATING ACTIVITIESNet income
    
    $
    19,463
    
    
    $
    74,672Adjustments to reconcile net income to
net cash provided by (used in) operating activities:Depreciation and amortization
    
    
    2,744
    
    
    
    3,162Amortization of stock-based compensation
    
    
    2,802
    
    
    
    7,850Impairment of goodwill
    
    
    
    
    
    
    654Impairment of land and other inventories
    
    
    2,000
    
    
    
    Distributions (return) of earnings from an unconsolidated joint venture
    
    
    (55
    )
    
    
    29,315Equity in earnings from unconsolidated joint ventures
    
    
    14
    
    
    
    (1,885
    )Deferred income taxes
    
    
    2,292
    
    
    
    (4,486
    )Excess income tax benefit from exercise of stock options and restricted stock units
    
    
    (1,897
    )
    
    
    (140
    )Changes in operating assets and liabilities:Restricted cash
    
    
    34
    
    
    
    979Receivables, net
    
    
    9,247
    
    
    
    (3,502
    )Land and other inventories
    
    
    13,132
    
    
    
    (114,470
    )Prepaid expenses and other assets
    
    
    719
    
    
    
    3,296Accounts payable and accrued and other liabilities
    
    
    (26,667
    )
    
    
    (7,987
    )Customer deposits
    
    
    (9,586
    )
    
    
    (11,650
    )Assets/liabilities of business transferred under contractual arrangements
    
    
    
    
    
    
    8,776NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES
    
    
    14,242
    
    
    
    (15,416
    )INVESTING ACTIVITIESInvestment in property and equipment
    
    
    (27,598
    )
    
    
    (12,100
    )Investment in unconsolidated joint ventures
    
    
    (136
    )
    
    
    (790
    )Return of advances from promissory note
    
    
    
    
    
    
    4,910Distribution of capital from an unconsolidated joint venture
    
    
    
    
    
    
    19,973NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES
    
    
    (27,734
    )
    
    
    11,993FINANCING ACTIVITIESProceeds from revolving line of credit
    
    
    
    
    
    
    10,000Principal payments of real estate borrowings
    
    
    (690
    )
    
    
    (16,115
    )Proceeds from exercise of stock options
    
    
    2,100
    
    
    
    250Excess income tax benefit from exercise of stock options and restricted stock units
    
    
    1,897
    
    
    
    140Payment of withholding taxes related to restricted stock units withheld
    
    
    (580
    )
    
    
    Purchase of treasury stock
    
    
    (965
    )
    
    
    NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES
    
    
    1,762
    
    
    
    (5,725
    )DECREASE IN CASH AND CASH EQUIVALENTS
    
    
    (11,730
    )
    
    
    (9,148
    )Cash and cash equivalents at beginning of period
    
    
    203,760
    
    
    
    38,479CASH AND CASH EQUIVALENTS AT END OF PERIOD
    
    $
    192,030
    
    
    $
    29,331SUPPLEMENTAL DISCLOSURES OF NON-CASH FINANCING ACTIVITIESConversion of 4.50% Notes into Equity
    
    $
    200
    
    
    $
    
  5




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AVATAR HOLDINGS INC. AND SUBSIDIARIES  Notes to Consolidated Financial Statements (Unaudited)  September 30, 2007
(Dollars in thousands except share and per share data)
 Basis of Financial Statement Presentation and Summary of Significant Accounting Policies
     Reclassifications
  Impairment of Long-Lived Assets
 Accounting for
the Impairment or Disposal of Long-Lived Assets,
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Notes to Consolidated Financial Statements (dollars in thousands except share and per share
data) (Unaudited)  continued
 Impairment of Long-Lived Assets  continued
 Disclosure about
Segments of an Enterprise and Related Information.
 Land and Other Inventories
  September 30,2007
    
    
    December 31,(Unaudited)
    
    
    2006Land developed and in process of development
    
    $
    244,841
    
    
    $
    220,403Land held for future development or sale
    
    
    95,623
    
    
    
    96,214Homes completed or under construction
    
    
    74,552
    
    
    
    126,482Other
    
    
    1,029
    
    
    
    726$
    416,045
    
    
    $
    443,825
   7




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Notes to Consolidated Financial Statements (dollars in thousands except share and per share
data) (Unaudited)  continued
 Property and Equipment, net
     Notes, Mortgage Notes and Other Debt
   8




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Notes to Consolidated Financial Statements (dollars in thousands except share and per share
data) (Unaudited)  continued
 Notes, Mortgage Notes and Other Debt  continued
     9




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Notes to Consolidated Financial Statements (dollars in thousands except share and per share
data) (Unaudited)  continued
 Notes, Mortgage Notes and Other Debt  continued
   Warranty Costs
   Nine Months
    
    
    Three Months2007
    
    
    2006
    
    
    2007
    
    
    2006Accrued warranty reserve, beginning of period
    
    $
    2,319
    
    
    $
    1,616
    
    
    $
    1,649
    
    
    $
    1,874Estimated warranty expense
    
    
    1,458
    
    
    
    2,882
    
    
    
    353
    
    
    
    1,052Amounts charged against warranty reserve
    
    
    (2,589
    )
    
    
    (2,512
    )
    
    
    (814
    )
    
    
    (940
    )Accrued warranty reserve, end of period
    
    $
    1,188
    
    
    $
    1,986
    
    
    $
    1,188
    
    
    $
    1,986
 Earnings Per Share
 Earnings Per Share.
  10




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Notes to Consolidated Financial Statements (dollars in thousands except share and per share
data) (Unaudited)  continued
 Earnings Per Share  continued
  Nine Months
    
    
    Three Months2007
    
    
    2006
    
    
    2007
    
    
    2006Numerator:Basic earnings per share  net income
    
    $
    19,463
    
    
    $
    74,672
    
    
    $
    3,084
    
    
    $
    22,853Interest on 4.50% Notes, net of tax
    
    
    2,444
    
    
    
    2,449
    
    
    
    815
    
    
    
    816Diluted earnings per share  net income
    
    $
    21,907
    
    
    $
    77,121
    
    
    $
    3,899
    
    
    $
    23,669Denominator:Basic weighted average shares outstanding
    
    
    8,272,476
    
    
    
    8,191,684
    
    
    
    8,305,170
    
    
    
    8,196,861Effect of dilutive restricted stock units
    
    
    499,534
    
    
    
    172,084
    
    
    
    553,320
    
    
    
    209,223Effect of dilutive employee stock options
    
    
    26,369
    
    
    
    37,642
    
    
    
    15,378
    
    
    
    37,277Effect of dilutive 4.50% Notes
    
    
    2,277,450
    
    
    
    2,280,068
    
    
    
    2,276,268
    
    
    
    2,280,068Diluted weighted average shares
outstanding
    
    
    11,075,829
    
    
    
    10,681,478
    
    
    
    11,150,136
    
    
    
    10,723,429
 Repurchase and Exchange of Common Stock
  Comprehensive Income
  Share-Based Payments and Other Executive Compensation
   11




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Notes to Consolidated Financial Statements (dollars in thousands except share and per share
data) (Unaudited)  continued
 Share-Based Payments and Other Executive Compensation  continued
    12




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Notes to Consolidated Financial Statements (dollars in thousands except share and per share
data) (Unaudited)  continued
 Income Taxes
    Accounting for
Uncertainty in Income Taxes, an interpretation of FASB Statement No. 109 Accounting for Income Taxes
   Investments in Unconsolidated Joint Ventures
 Consolidation of Variable Interest Entities),
  13




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Notes to Consolidated Financial Statements (dollars in thousands except share and per share
data) (Unaudited)  continued
 Investments in Unconsolidated Joint Ventures  continued
    Recently Issued Accounting Pronouncements
 Fair Value Measurements
 Applicability of
the Assessment of a Buyers Continuing Investment under FASB Statement No. 66, Accounting for Sales
of Real Estate, for Sales of Condominiums
 The Fair Value Option for Financial Assets
and Financial Liabilities
 14




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Notes to Consolidated Financial Statements (dollars in thousands except share and per share
data) (Unaudited)  continued
 Estimated Development Liability for Sold Land
  September 30,2007
    
    
    December 31,(Unaudited)
    
    
    2006Gross estimated unexpended costs
    
    $
    27,947
    
    
    $
    31,045Less costs relating to unsold homesites
    
    
    (5,931
    )
    
    
    (6,352
    )Estimated development liability for sold land
    
    $
    22,016
    
    
    $
    24,693
  Commitments and Contingencies
   15




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Notes to Consolidated Financial Statements (dollars in thousands except share and per share
data) (Unaudited)  continued
 Financial Information Relating To Reportable Segments
  Nine Months
    
    
    Three Months2007
    
    
    2006
    
    
    2007
    
    
    2006Revenues:Segment revenuesPrimary residential
    
    $
    134,762
    
    
    $
    274,081
    
    
    $
    28,770
    
    
    $
    92,710Active adult
    
    
    66,636
    
    
    
    156,601
    
    
    
    14,894
    
    
    
    57,504Commercial and industrial and other land sales
    
    
    19,136
    
    
    
    44,810
    
    
    
    10,087
    
    
    
    5,863Other operations
    
    
    2,558
    
    
    
    5,447
    
    
    
    696
    
    
    
    1,412223,092
    
    
    
    480,939
    
    
    
    54,447
    
    
    
    157,489Unallocated revenuesInterest income
    
    
    6,349
    
    
    
    2,131
    
    
    
    2,112
    
    
    
    614Other
    
    
    1,714
    
    
    
    1,145
    
    
    
    896
    
    
    
    209Total revenues
    
    $
    231,155
    
    
    $
    484,215
    
    
    $
    57,455
    
    
    $
    158,312Operating income:Segment operating incomePrimary residential
    
    $
    21,988
    
    
    $
    70,680
    
    
    $
    1,243
    
    
    $
    25,910Active adult
    
    
    9,335
    
    
    
    34,179
    
    
    
    729
    
    
    
    13,910Commercial and industrial and other land sales
    
    
    16,116
    
    
    
    33,676
    
    
    
    8,979
    
    
    
    5,487Other operations
    
    
    634
    
    
    
    2,224
    
    
    
    211
    
    
    
    46048,073
    
    
    
    140,759
    
    
    
    11,162
    
    
    
    45,767Unallocated income (expenses)Equity in
earnings (loss) from unconsolidated joint ventures
    
    
    (14
    )
    
    
    1,885
    
    
    
    (55
    )
    
    
    165Interest income
    
    
    6,349
    
    
    
    2,131
    
    
    
    2,112
    
    
    
    614General and administrative expenses
    
    
    (18,401
    )
    
    
    (20,881
    )
    
    
    (5,215
    )
    
    
    (7,110
    )Other real estate expenses
    
    
    (4,620
    )
    
    
    (6,874
    )
    
    
    (1,450
    )
    
    
    (1,834
    )Income before income taxes
    
    $
    31,387
    
    
    $
    117,020
    
    
    $
    6,554
    
    
    $
    37,602
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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
(dollars in thousands except share and per share data)
    EXECUTIVE SUMMARY
   17




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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
(dollars in thousands except share and per share data)  continued
 EXECUTIVE
SUMMARY continued
    18




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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
(dollars in thousands except share and per share data)  continued
 RESULTS OF OPERATIONS
  Nine Months
    
    
    Three Months2007
    
    
    2006
    
    
    2007
    
    
    2006Operating
income:Primary residentialRevenues
    
    $
    134,762
    
    
    $
    274,081
    
    
    $
    28,770
    
    
    $
    92,710Expenses
    
    
    112,774
    
    
    
    203,401
    
    
    
    27,527
    
    
    
    66,800Segment operating income
    
    
    21,988
    
    
    
    70,680
    
    
    
    1,243
    
    
    
    25,910Active adultRevenues
    
    
    66,636
    
    
    
    156,601
    
    
    
    14,894
    
    
    
    57,504Expenses
    
    
    57,301
    
    
    
    122,422
    
    
    
    14,165
    
    
    
    43,594Segment operating income
    
    
    9,335
    
    
    
    34,179
    
    
    
    729
    
    
    
    13,910Commercial and industrial and other land salesRevenues
    
    
    19,136
    
    
    
    44,810
    
    
    
    10,087
    
    
    
    5,863Expenses
    
    
    3,020
    
    
    
    11,134
    
    
    
    1,108
    
    
    
    376Segment operating income
    
    
    16,116
    
    
    
    33,676
    
    
    
    8,979
    
    
    
    5,487Other operationsRevenues
    
    
    2,558
    
    
    
    5,447
    
    
    
    696
    
    
    
    1,412Expenses
    
    
    1,924
    
    
    
    3,223
    
    
    
    485
    
    
    
    952Segment operating income
    
    
    634
    
    
    
    2,224
    
    
    
    211
    
    
    
    460Operating income
    
    
    48,073
    
    
    
    140,759
    
    
    
    11,162
    
    
    
    45,767Unallocated income (expenses):Equity in
earnings (loss) from unconsolidated joint ventures
    
    
    (14
    )
    
    
    1,885
    
    
    
    (55
    )
    
    
    165Interest income
    
    
    6,349
    
    
    
    2,131
    
    
    
    2,112
    
    
    
    614General and administrative expenses
    
    
    (18,401
    )
    
    
    (20,881
    )
    
    
    (5,215
    )
    
    
    (7,110
    )Other real estate expenses
    
    
    (4,620
    )
    
    
    (6,874
    )
    
    
    (1,450
    )
    
    
    (1,834
    )Income before income taxes
    
    
    31,387
    
    
    
    117,020
    
    
    
    6,554
    
    
    
    37,602Income tax expense
    
    
    (11,924
    )
    
    
    (42,348
    )
    
    
    (3,470
    )
    
    
    (14,749
    )Net income
    
    $
    19,463
    
    
    $
    74,672
    
    
    $
    3,084
    
    
    $
    22,853
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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
(dollars in thousands except share and per share data)  continued
 RESULTS
OF OPERATIONS continued
  Nine Months
    
    
    Three Months2007
    
    
    2006
    
    
    2007
    
    
    2006ClosingsNumber of units
    
    
    603
    
    
    
    1,449
    
    
    
    151
    
    
    
    477Revenues
    
    $
    189,990
    
    
    $
    418,511
    
    
    $
    40,252
    
    
    $
    145,779Average price per unit
    
    $
    315
    
    
    $
    289
    
    
    $
    267
    
    
    $
    306Contracts signed, net of cancellationsNumber of units
    
    
    346
    
    
    
    737
    
    
    
    77
    
    
    
    67Dollar value
    
    $
    82,084
    
    
    $
    260,720
    
    
    $
    17,064
    
    
    $
    21,123Average price per unit
    
    $
    237
    
    
    $
    354
    
    
    $
    222
    
    
    $
    315Backlog at September 30Number of units
    
    
    292
    
    
    
    1,353Dollar value
    
    $
    81,386
    
    
    $
    476,689Average price per unit
    
    $
    279
    
    
    $
    352
     20




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Item 2. Managements Discussion and Analysis of Financial Condition and
Results of Operations (dollars in thousands except share and per
share data)  continued
 RESULTS
OF OPERATIONS continued
 Accounting for the Impairment or Disposal of Long-Lived
Assets, Disclosure about Segments of an Enterprise and Related Information.
    21




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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
(dollars in thousands except share and per share data)  continued
 RESULTS
OF OPERATIONS continued
      22




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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
(dollars in thousands except share and per share data)  continued
 RESULTS
OF OPERATIONS continued
   LIQUIDITY AND CAPITAL RESOURCES
    23




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Item 2. Managements Discussion and Analysis of Financial Condition and Results of
Operations (dollars in thousands except share and per share data)
 continued
 LIQUIDITY AND CAPITAL RESOURCES  continued
      24




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##### Table of Contents



Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
(dollars in thousands except share and per share data)  continued
 LIQUIDITY AND CAPITAL RESOURCES  continued
     25




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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
(dollars in thousands except share and per share data)  continued
 LIQUIDITY AND CAPITAL RESOURCES  continued
         26




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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
(dollars in thousands except share and per share data)  continued
 CRITICAL ACCOUNTING POLICIES AND ESTIMATES
 Accounting for
Uncertainty in Income Taxes, an interpretation of FASB Statement No. 109 Accounting for Income Taxes
    RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
 Fair Value Measurements
 Applicability of
the Assessment of a Buyers Continuing Investment under FASB Statement No. 66, Accounting for Sales
of Real Estate, for Sales of Condominiums
 The Fair Value Option for Financial Assets
and Financial Liabilities
 27




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##### Table of Contents



Item 3. Quantitative and Qualitative Disclosure About Market Risk
  
 Item 4. Controls and Procedures
   28




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PART II  OTHER INFORMATION
 
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds (dollars in
thousands except share and per share data)
 Repurchases of Equity Securities
  Total Numberof Shares
    
    
    MaximumPurchased as
    
    
    Amount ThatPart of a
    
    
    May Yet BeTotal
    
    
    Average
    
    
    Publicly
    
    
    PurchasedNumber
    
    
    Price
    
    
    Announced
    
    
    Under theof Shares
    
    
    Paid Per
    
    
    Plan or
    
    
    Plan orPeriod
    
    Purchased
    
    
    Share
    
    
    Program (1)
    
    
    Program (1)July 1, 2007 to July 31, 2007
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    15,829August 1, 2007 to August 31, 2007
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    15,829September 1, 2007 to September 30, 2007
    
    
    19,409
    
    
    $
    49.73
    
    
    
    
    
    
    $
    14,864Total
    
    
    19,409
    
    
    $
    49.73
    
    
    
    
 
 (1)
    
    On March 20, 2003, Avatars Board of Directors authorized the expenditure of up to $30,000 to
purchase, from time to time, shares of Avatars common stock and/or 7% Convertible
Subordinated Notes due April 2005 (which were subsequently called for redemption), in the open
market, through privately negotiated transactions or otherwise, depending on market and
business conditions and other factors. On June 29, 2005, Avatars Board of Directors amended
the March 20, 2003 repurchase authorization to include the 4.50% Notes in addition to shares
of common stock. During the three months ended September 30, 2007, Avatar repurchased $965 of
our common stock representing 19,409 shares of our common stock. During the three months ended
September 30, 2007, Avatar did not repurchase any of the 4.50% Notes. As of September 30,
2007, the remaining authorization for purchase of shares of Avatars common stock and 4.50%
notes was $14,864. 29




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##### Table of Contents



Item 6. Exhibits
 10.1
    
    Third Amendment to Credit Agreement and Consent and Waiver, dated as
of August 14, 2007, by and among Avatar Properties Inc. (as
Borrower), Avatar Holdings Inc. (as Guarantor), Wachovia Bank,
National Association (as Lender and as Administrative Agent acting on
behalf of the Lenders), Guaranty Bank (as Lender), and Franklin Bank,
SSB (as Lender) (filed as Exhibit 10.1 to Form 8-K dated August 20,
2007 (File No. 0-7616), and incorporated herein by reference).31.1
    
    Certification of Chief Executive Officer pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002 (filed herewith).31.2
    
    Certification of Chief Financial Officer pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002 (filed herewith).32.1
    
    Certification of Chief Executive Officer required by 18 U.S.C.
Section 1350 (as adopted by Section 906 of the Sarbanes-Oxley Act of
2002) (furnished herewith).32.2
    
    Certification of Chief Financial Officer required by 18 U.S.C.
Section 1350 (as adopted by Section 906 of the Sarbanes-Oxley Act of
2002) (furnished herewith).
 30




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SIGNATURES
  AVATAR HOLDINGS INC.Date:      November 8, 2007
    By:
    /s/ Randy L. KotlerRandy L. KotlerExecutive Vice President, Chief
Financial Officer and Treasurer Date:      November 8, 2007
    By:
    /s/ Michael P. RamaMichael P. RamaController and Chief Accounting Officer 31




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##### Table of Contents



Exhibit Index
 10.1
    
    Third Amendment to Credit Agreement and Consent and Waiver, dated as
of August 14, 2007, by and among Avatar Properties Inc. (as
Borrower), Avatar Holdings Inc. (as Guarantor), Wachovia Bank,
National Association (as Lender and as Administrative Agent acting on
behalf of the Lenders), Guaranty Bank (as Lender), and Franklin Bank,
SSB (as Lender) (filed as Exhibit 10.1 to Form 8-K dated August 20,
2007 (File No. 0-7616), and incorporated herein by reference).31.1
    
    Certification of Chief Executive Officer pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002 (filed herewith).31.2
    
    Certification of Chief Financial Officer pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002 (filed herewith).32.1
    
    Certification of Chief Executive Officer required by 18 U.S.C.
Section 1350 (as adopted by Section 906 of the Sarbanes-Oxley Act of
2002) (furnished herewith).32.2
    
    Certification of Chief Financial Officer required by 18 U.S.C.
Section 1350 (as adopted by Section 906 of the Sarbanes-Oxley Act of
2002) (furnished herewith).