##### 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 SECURITIESEXCHANGE ACT OF 1934For the quarterly period ended June 30, 2007ORo
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIESEXCHANGE 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  June 30, 2007 (unaudited) and December 31, 2006
    
    
    3Consolidated Statements of Income (Unaudited)  Six and three months ended June 30, 2007 and 2006
    
    
    4Consolidated Statements of Cash Flows (Unaudited)  Six months ended June 30, 2007 and 2006
    
    
    5Notes to Consolidated Financial Statements (Unaudited)
    
    
    6Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    16Item 3. Quantitative and Qualitative Disclosure About Market Risk
    
    
    26Item 4. Controls and Procedures
    
    
    26PART II. Other InformationItem 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    27Item 4. Submission of Matters to a Vote of Security Holders.
    
    
    27Item 6. Exhibits
    
    
    29EX-10.1 Director CompensationEX-10.2 Kotler Employment AgreementEX-10.3 Restricted Stock Unit AgreementEX-10.4 Restricted Stock Unit AgreementEX-10.5 Restricted Stock Unit AgreementEX-10.6 Amendment to Getman Employment AgreementEX-10.7 Amendment to Restricted Stock Unit AgreementEX-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
   
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##### Table of Contents



PART I   FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 
 AVATAR HOLDINGS INC. AND SUBSIDIARIES
 (Unaudited)June 30
    
    
    December 312007
    
    
    2006AssetsCash and cash equivalents
    
    $
    186,727
    
    
    $
    203,760Restricted cash
    
    
    4,063
    
    
    
    3,637Receivables, net
    
    
    6,552
    
    
    
    13,863Land and other inventories
    
    
    418,480
    
    
    
    443,825Property, plant and equipment, net
    
    
    80,249
    
    
    
    59,756Investment in unconsolidated joint ventures
    
    
    7,785
    
    
    
    7,583Prepaid expenses
    
    
    10,813
    
    
    
    10,066Other assets
    
    
    8,865
    
    
    
    8,487Deferred income taxes
    
    
    1,611
    
    
    
    95Total Assets
    
    $
    725,145
    
    
    $
    751,072Liabilities and Stockholders EquityLiabilitiesNotes, mortgage notes and other debt:Corporate
    
    $
    119,800
    
    
    $
    120,000Real estate
    
    
    16,551
    
    
    
    16,925Estimated development liability for sold land
    
    
    24,621
    
    
    
    24,693Accounts payable
    
    
    7,142
    
    
    
    22,053Accrued and other liabilities
    
    
    18,121
    
    
    
    43,694Customer deposits
    
    
    11,008
    
    
    
    18,351Total Liabilities
    
    
    197,243
    
    
    
    245,716Commitments and ContingenciesStockholders EquityCommon Stock, par value $1 per shareAuthorized: 50,000,000 sharesIssued: 10,828,346 shares at June 30, 2007
         10,725,559 shares at December 31, 2006
    
    
    10,828
    
    
    
    10,726Additional paid-in capital
    
    
    232,078
    
    
    
    226,013Retained earnings
    
    
    360,020
    
    
    
    343,641602,926
    
    
    
    580,380Treasury stock: at cost, 2,531,823 shares at June 30, 2007
and December 31, 2006
    
    
    (75,024
    )
    
    
    (75,024
    )Total Stockholders Equity
    
    
    527,902
    
    
    
    505,356Total Liabilities and Stockholders Equity
    
    $
    725,145
    
    
    $
    751,072
  3




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AVATAR HOLDINGS INC. AND SUBSIDIARIES
 Six Months
    
    
    Three Months2007
    
    
    2006
    
    
    2007
    
    
    2006RevenuesReal estate revenues
    
    $
    168,528
    
    
    $
    323,182
    
    
    $
    78,435
    
    
    $
    168,876Interest income
    
    
    4,237
    
    
    
    1,517
    
    
    
    2,021
    
    
    
    880Other
    
    
    935
    
    
    
    1,204
    
    
    
    799
    
    
    
    933Total revenues
    
    
    173,700
    
    
    
    325,903
    
    
    
    81,255
    
    
    
    170,689ExpensesReal estate expenses
    
    
    135,722
    
    
    
    234,434
    
    
    
    66,471
    
    
    
    119,372General and administrative expenses
    
    
    13,186
    
    
    
    13,771
    
    
    
    7,127
    
    
    
    7,199Total expenses
    
    
    148,908
    
    
    
    248,205
    
    
    
    73,598
    
    
    
    126,571Equity earnings (loss) from
unconsolidated joint ventures
    
    
    41
    
    
    
    1,720
    
    
    
    (2
    )
    
    
    90Income before income taxes
    
    
    24,833
    
    
    
    79,418
    
    
    
    7,655
    
    
    
    44,208Income tax expense
    
    
    (8,454
    )
    
    
    (27,599
    )
    
    
    (2,384
    )
    
    
    (17,025
    )Net income
    
    $
    16,379
    
    
    $
    51,819
    
    
    $
    5,271
    
    
    $
    27,183Basic Earnings Per Share
    
    $
    1.98
    
    
    $
    6.33
    
    
    $
    0.64
    
    
    $
    3.32Diluted Earnings Per Share
    
    $
    1.63
    
    
    $
    5.01
    
    
    $
    0.55
    
    
    $
    2.62
  4




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AVATAR HOLDINGS INC. AND SUBSIDIARIES
 2007
    
    
    2006OPERATING ACTIVITIESNet income
    
    $
    16,379
    
    
    $
    51,819Adjustments to reconcile net income to
net cash provided by operating activities:Depreciation and amortization
    
    
    1,762
    
    
    
    2,083Amortization of stock-based compensation
    
    
    2,431
    
    
    
    5,318Impairment of goodwill
    
    
    
    
    
    
    654Impairment of land and other inventories
    
    
    2,000
    
    
    
    Distributions (return) of earnings from an unconsolidated joint venture
    
    
    (55
    )
    
    
    29,132Equity earnings from unconsolidated joint ventures
    
    
    (41
    )
    
    
    (1,720
    )Deferred income taxes
    
    
    300
    
    
    
    (4,423
    )Excess income tax benefit from exercise of stock options and restricted stock units
    
    
    (1,816
    )
    
    
    (140
    )Changes in operating assets and liabilities:Restricted cash
    
    
    (426
    )
    
    
    (1,755
    )Receivables, net
    
    
    7,311
    
    
    
    2,904Land and other inventories
    
    
    13,300
    
    
    
    (76,322
    )Prepaid expenses
    
    
    (747
    )
    
    
    2,742Other assets
    
    
    (384
    )
    
    
    (107
    )Accounts payable and accrued and other liabilities
    
    
    (30,697
    )
    
    
    (10,968
    )Customer deposits
    
    
    (7,343
    )
    
    
    2,328Assets/liabilities of business transferred under contractual arrangements
    
    
    
    
    
    
    8,776NET CASH PROVIDED BY OPERATING ACTIVITIES
    
    
    1,974
    
    
    
    10,321INVESTING ACTIVITIESInvestment in property, plant and equipment
    
    
    (22,069
    )
    
    
    (4,489
    )Investment in unconsolidated joint ventures
    
    
    (106
    )
    
    
    (417
    )Return of advances from promissory note
    
    
    
    
    
    
    4,910Distribution of capital from an unconsolidated joint venture
    
    
    
    
    
    
    19,706NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES
    
    
    (22,175
    )
    
    
    19,710FINANCING ACTIVITIESPrincipal payments of real estate borrowings
    
    
    (374
    )
    
    
    (5,682
    )Proceeds from exercise of stock options
    
    
    2,100
    
    
    
    250Excess income tax benefit from exercise of stock options and restricted stock units
    
    
    1,816
    
    
    
    140Payment of withholding taxes related to restricted stock units withheld
    
    
    (374
    )
    
    
    NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES
    
    
    3,168
    
    
    
    (5,292
    )(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS
    
    
    (17,033
    )
    
    
    24,739Cash and cash equivalents at beginning of period
    
    
    203,760
    
    
    
    38,479CASH AND CASH EQUIVALENTS AT END OF PERIOD
    
    $
    186,727
    
    
    $
    63,218SUPPLEMENTAL 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)  June 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
  June 30,2007
    
    
    December 31,(Unaudited)
    
    
    2006Land developed and in process of development
    
    $
    245,945
    
    
    $
    220,403Land held for future development or sale
    
    
    95,824
    
    
    
    96,214Homes completed or under construction
    
    
    75,572
    
    
    
    126,482Other
    
    
    1,139
    
    
    
    726$
    418,480
    
    
    $
    443,825
   7




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Notes to Consolidated Financial Statements (dollars in thousands except share and per share data) (Unaudited)  continued
 Property, Plant and Equipment, net
  Goodwill and Indefinite-Lived Intangible Assets
 Goodwill and Intangible Assets
 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
 Warranty Costs
   Six Months
    
    
    Three Months2007
    
    
    2006
    
    
    2007
    
    
    2006Accrued warranty reserve, beginning of period
    
    $
    2,319
    
    
    $
    1,616
    
    
    $
    1,806
    
    
    $
    1,924Estimated warranty expense
    
    
    1,105
    
    
    
    1,830
    
    
    
    541
    
    
    
    881Amounts charged against warranty reserve
    
    
    (1,775
    )
    
    
    (1,572
    )
    
    
    (698
    )
    
    
    (931
    )Accrued warranty reserve, end of period
    
    $
    1,649
    
    
    $
    1,874
    
    
    $
    1,649
    
    
    $
    1,874
 Earnings Per Share
 Earnings Per Share.
   Six Months
    
    
    Three Months2007
    
    
    2006
    
    
    2007
    
    
    2006Numerator:Basic earnings per share  net income
    
    $
    16,379
    
    
    $
    51,819
    
    
    $
    5,271
    
    
    $
    27,183Interest on 4.50% Notes, net of tax
    
    
    1,629
    
    
    
    1,633
    
    
    
    813
    
    
    
    816Diluted earnings per share  net income
    
    $
    18,008
    
    
    $
    53,452
    
    
    $
    6,084
    
    
    $
    27,999Denominator:Basic weighted average shares outstanding
    
    
    8,255,859
    
    
    
    8,189,053
    
    
    
    8,297,456
    
    
    
    8,193,703Effect of dilutive restricted stock units
    
    
    472,641
    
    
    
    153,516
    
    
    
    471,383
    
    
    
    163,941Effect of dilutive employee stock options
    
    
    31,864
    
    
    
    37,824
    
    
    
    15,963
    
    
    
    38,081Effect of dilutive 4.50% Notes
    
    
    2,278,041
    
    
    
    2,280,068
    
    
    
    2,276,268
    
    
    
    2,280,068Diluted weighted average shares
outstanding
    
    
    11,038,405
    
    
    
    10,660,461
    
    
    
    11,061,070
    
    
    
    10,675,793
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Notes to Consolidated Financial Statements (dollars in thousands except share and per share data) (Unaudited)  continued
 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
  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),
  12




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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
 13




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Notes to Consolidated Financial Statements (dollars in thousands except share and per share data) (Unaudited)  continued
 Commitments and Contingencies
     14




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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
  Six Months
    
    
    Three Months2007
    
    
    2006
    
    
    2007
    
    
    2006Revenues:Segment revenuesPrimary residential
    
    $
    105,992
    
    
    $
    181,371
    
    
    $
    53,670
    
    
    $
    85,895Active adult
    
    
    51,742
    
    
    
    99,097
    
    
    
    20,432
    
    
    
    51,246Commercial and industrial and other land sales
    
    
    9,049
    
    
    
    38,946
    
    
    
    3,489
    
    
    
    30,171Other operations
    
    
    1,862
    
    
    
    4,035
    
    
    
    874
    
    
    
    1,723168,645
    
    
    
    323,449
    
    
    
    78,465
    
    
    
    169,035Unallocated revenuesInterest income
    
    
    4,237
    
    
    
    1,517
    
    
    
    2,021
    
    
    
    880Other
    
    
    818
    
    
    
    937
    
    
    
    769
    
    
    
    774Total revenues
    
    $
    173,700
    
    
    $
    325,903
    
    
    $
    81,255
    
    
    $
    170,689Operating income:Segment operating incomePrimary residential
    
    $
    20,745
    
    
    $
    44,770
    
    
    $
    9,581
    
    
    $
    21,095Active adult
    
    
    8,606
    
    
    
    20,269
    
    
    
    1,677
    
    
    
    10,496Commercial and industrial and other land sales
    
    
    7,137
    
    
    
    28,189
    
    
    
    2,379
    
    
    
    20,219Other operations
    
    
    423
    
    
    
    1,764
    
    
    
    236
    
    
    
    66636,911
    
    
    
    94,992
    
    
    
    13,873
    
    
    
    52,476Unallocated income (expenses)Equity earnings (loss) from
unconsolidated joint ventures
    
    
    41
    
    
    
    1,720
    
    
    
    (2
    )
    
    
    90Interest income
    
    
    4,237
    
    
    
    1,517
    
    
    
    2,021
    
    
    
    880General and administrative expenses
    
    
    (13,186
    )
    
    
    (13,771
    )
    
    
    (7,127
    )
    
    
    (7,199
    )Other real estate expenses
    
    
    (3,170
    )
    
    
    (5,040
    )
    
    
    (1,110
    )
    
    
    (2,039
    )Income before income taxes
    
    $
    24,833
    
    
    $
    79,418
    
    
    $
    7,655
    
    
    $
    44,208
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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
      16




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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
    Six Months
    
    
    Three Months2007
    
    
    2006
    
    
    2007
    
    
    2006Operating income:Primary residentialRevenues
    
    $
    105,992
    
    
    $
    181,371
    
    
    $
    53,670
    
    
    $
    85,895Expenses
    
    
    85,247
    
    
    
    136,601
    
    
    
    44,089
    
    
    
    64,800Segment operating income
    
    
    20,745
    
    
    
    44,770
    
    
    
    9,581
    
    
    
    21,095Active adultRevenues
    
    
    51,742
    
    
    
    99,097
    
    
    
    20,432
    
    
    
    51,246Expenses
    
    
    43,136
    
    
    
    78,828
    
    
    
    18,755
    
    
    
    40,750Segment operating income
    
    
    8,606
    
    
    
    20,269
    
    
    
    1,677
    
    
    
    10,496Commercial and industrial and other land salesRevenues
    
    
    9,049
    
    
    
    38,946
    
    
    
    3,489
    
    
    
    30,171Expenses
    
    
    1,912
    
    
    
    10,757
    
    
    
    1,110
    
    
    
    9,952Segment operating income
    
    
    7,137
    
    
    
    28,189
    
    
    
    2,379
    
    
    
    20,219Other operationsRevenues
    
    
    1,862
    
    
    
    4,035
    
    
    
    874
    
    
    
    1,723Expenses
    
    
    1,439
    
    
    
    2,271
    
    
    
    638
    
    
    
    1,057Segment operating income
    
    
    423
    
    
    
    1,764
    
    
    
    236
    
    
    
    666Operating income
    
    
    36,911
    
    
    
    94,992
    
    
    
    13,873
    
    
    
    52,476Unallocated income (expenses):Equity earnings (loss) from
unconsolidated joint ventures
    
    
    41
    
    
    
    1,720
    
    
    
    (2
    )
    
    
    90Interest income
    
    
    4,237
    
    
    
    1,517
    
    
    
    2,021
    
    
    
    880General and administrative expenses
    
    
    (13,186
    )
    
    
    (13,771
    )
    
    
    (7,127
    )
    
    
    (7,199
    )Other real estate expenses
    
    
    (3,170
    )
    
    
    (5,040
    )
    
    
    (1,110
    )
    
    
    (2,039
    )Income before income taxes
    
    
    24,833
    
    
    
    79,418
    
    
    
    7,655
    
    
    
    44,208Income tax expense
    
    
    (8,454
    )
    
    
    (27,599
    )
    
    
    (2,384
    )
    
    
    (17,025
    )Net income
    
    $
    16,379
    
    
    $
    51,819
    
    
    $
    5,271
    
    
    $
    27,183
 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
 RESULTS OF OPERATIONS
  Six Months
    
    
    Three Months2007
    
    
    2006
    
    
    2007
    
    
    2006Units closedNumber of units
    
    
    452
    
    
    
    972
    
    
    
    222
    
    
    
    456Aggregate dollar volume
    
    $
    149,738
    
    
    $
    272,732
    
    
    $
    70,136
    
    
    $
    134,204Average price per unit
    
    $
    331
    
    
    $
    281
    
    
    $
    316
    
    
    $
    294Contracts signed, net of cancellationsNumber of units
    
    
    269
    
    
    
    670
    
    
    
    127
    
    
    
    242Aggregate dollar volume
    
    $
    65,020
    
    
    $
    239,597
    
    
    $
    26,929
    
    
    $
    83,074Average price per unit
    
    $
    242
    
    
    $
    358
    
    
    $
    212
    
    
    $
    343Backlog at June 30Number of units
    
    
    366
    
    
    
    1,763Aggregate dollar volume
    
    $
    104,574
    
    
    $
    601,345Average price per unit
    
    $
    286
    
    
    $
    341
    Accounting for the Impairment or Disposal of Long-Lived
Assets,
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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
 Disclosure
about Segments of an Enterprise and Related Information.
     19




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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
       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
 LIQUIDITY AND CAPITAL RESOURCES
      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
 LIQUIDITY AND CAPITAL RESOURCES  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
 LIQUIDITY AND CAPITAL RESOURCES  continued
       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
  CRITICAL ACCOUNTING POLICIES AND ESTIMATES
 Accounting for
Uncertainty in Income Taxes, an interpretation of FASB Statement No. 109 Accounting for Income Taxes"
    24




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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
 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
 FORWARD  LOOKING STATEMENTS
  25




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Item 3. Quantitative and Qualitative Disclosure About Market Risk
  
 Item 4. Controls and Procedures
   26




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##### Table of Contents



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)April 1, 2007 to April 30, 2007
    
    
    
    
    
    $
    
    
    
    
    
    
    
    $
    15,829May 1, 2007 to May 31, 2007
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    15,829June 1, 2007 to June 30, 2007
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    15,829Total
    
    
    
    
    
    $
    
    
    
    
    
 
 (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. As of June 30, 2007, the remaining authorization for purchase of shares of
Avatars common stock and 4.50% notes was $15,829. During the three months ended June 30,
2007, Avatar did not repurchase shares of its common stock and/or 4.50% Notes. 
 Item 4. Submission of Matters to a Vote of Security Holders
  27




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Item 4. Submission of Matters to a Vote of Security Holders  continued
 ELECTION OF DIRECTORS
 Name
    
    Votes FOR
    
    
    WITHHELDPaul D. Barnett
    
    
    7,210,419
    
    
    
    21,107Eduardo A. Brea
    
    
    7,216,207
    
    
    
    15,319Milton H. Dresner
    
    
    7,206,169
    
    
    
    25,357Roger W. Einiger
    
    
    7,216,207
    
    
    
    15,319Gerald D. Kelfer
    
    
    7,212,360
    
    
    
    19,166Joshua Nash
    
    
    7,215,902
    
    
    
    15,624Kenneth T. Rosen
    
    
    7,041,077
    
    
    
    190,449Joel M. Simon
    
    
    7,215,823
    
    
    
    15,703Fred Stanton Smith
    
    
    7,191,532
    
    
    
    39,994Beth A. Stewart
    
    
    7,215,785
    
    
    
    15,741
 APPOINTMENT OF AUDITORS
 Shares Voted
    
    Shares Voted
    
    Shares
    
    BrokerFOR
    
    AGAINST
    
    ABSTAINED
    
    NON-VOTES7,212,453
    
    2,062
    
    17,011
    
    0
 AMENDMENT TO THE AMENDED AND RESTATED 1997 INCENTIVE AND CAPITAL ACCUMULATION PLAN(2005
RESTATEMENT)
 Shares Voted
    
    Shares Voted
    
    Shares
    
    BrokerFOR
    
    AGAINST
    
    ABSTAINED
    
    NON-VOTES5,335,574
    
    1,082,224
    
    26,523
    
    0
 28




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##### Table of Contents



Item 6. Exhibits
 10.1
    
    Director Compensation (filed herewith).10.2
    
    Employment Agreement, dated June 26, 2007, between Avatar Holdings
Inc. and Randy Kotler (filed herewith).10.3
    
    Restricted Stock Unit Agreement (2,500 units @ $79.89), dated June
26, 2007, between Avatar Holdings Inc. and Randy Kotler (filed
herewith).10.4
    
    Restricted Stock Unit Agreement (2,500 units @ $83.89), dated June
26, 2007, between Avatar Holdings Inc. and Randy Kotler (filed
herewith).10.5
    
    Restricted Stock Unit Agreement (2,500 units @ $88.08), dated June
26, 2007, between Avatar Holdings Inc. and Randy Kotler (filed
herewith).10.6
    
    Amendment to the Amended and Restated Employment Agreement, dated
June 29, 2007, between Avatar Holdings Inc. and Dennis J. Getman
(filed herewith). Portions of this exhibit have been omitted pursuant
to a request for confidential treatment.10.7
    
    Amendment to the Restricted Stock Unit Agreement, dated as of July
26, 2007, between Avatar Holdings Inc. and Charles L. McNairy (filed
herewith).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).
 29




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##### Table of Contents



SIGNATURES
  AVATAR HOLDINGS INC.Date: August 9, 2007
    By:
    /s/ Randy L. KotlerRandy L. KotlerExecutive Vice President and Chief Financial Officer Date: August 9, 2007
    By:
    /s/ Michael P. RamaMichael P. RamaController and Chief Accounting Officer 30




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##### Table of Contents



Exhibit Index
 10.1
    
    Director Compensation (filed herewith).10.2
    
    Employment Agreement, dated June 26, 2007, between Avatar Holdings
Inc. and Randy Kotler (filed herewith).10.3
    
    Restricted Stock Unit Agreement (2,500 units @ $79.89), dated June
26, 2007, between Avatar Holdings Inc. and Randy Kotler (filed
herewith).10.4
    
    Restricted Stock Unit Agreement (2,500 units @ $83.89), dated June
26, 2007, between Avatar Holdings Inc. and Randy Kotler (filed
herewith).10.5
    
    Restricted Stock Unit Agreement (2,500 units @ $88.08), dated June
26, 2007, between Avatar Holdings Inc. and Randy Kotler (filed
herewith).10.6
    
    Amendment to the Amended and Restated Employment Agreement, dated
June 29, 2007, between Avatar Holdings Inc. and Dennis J. Getman
(filed herewith). Portions of this exhibit have been omitted pursuant
to a request for confidential treatment.10.7
    
    Amendment to the Restricted Stock Unit Agreement, dated as of July
26, 2007, between Avatar Holdings Inc. and Charles L. McNairy (filed
herewith).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).