Stuart Miller
Executive Chairman at Lennar
Great, and good morning, everyone. Thank you for joining. This morning, I'm here in Miami, joined by Diane Bessette, our Chief Financial Officer; David Collins, our Controller and Vice President; Bruce Gross, CEO of Lennar Financial Services; and of course, Alex, who you just heard from. We also have joining us Rick Beckwitt, who's in Colorado; and Jon Jaffe, who is actually here in Miami, but not in the office. As usual, I'm going to give a macro and strategic Lennar overview. After my introductory remarks, Rick is going to talk about market strength around the country, land and community count as well.
Jon will give an update on the supply chain, production and construction costs. And as usual, Diane will give detailed financial highlights and additional guidance. And then we'll answer as many questions as we can. And as usual, please limit to one question and one follow-up. So let me go ahead and begin and start by saying that our fourth quarter and full year 2021 reflect extraordinary focus and determination by Lennar's management and operating teams across the country.
While the housing market remains very strong in all of our major markets, the ability to actually execute and deliver results has been challenged and tested by the supply chain that is all but broken, the workforce that is short in numbers while driven to produce more, and the never-ending competition for scarce entitled land assets. Lennar's managers and operators have been absolute warriors recognizing that our customers need and want their homes and the burden of a strong, but stressed market simply can't stand in the way.
The proud associates of Lennar are pleased to report an excellent quarter and year of accomplishments in spite of the elusive garage doors and short supply, the unimaginable scarcity of paint, the cabinet deliveries postponed by labor shortage, the electric meters, the windows and the countless other stumbling blocks and obstacles that have presented intermittently to ensure chaos in a production cycle that is difficult even everything is going right. The supply chain affects both land and construction and that will continue into the first quarter of 2022 and beyond.
But as we enter the second half of the year, we expect that the supply chain disruption will be stabilized and mitigated by the greater number of starts that we have started, by the lessons learned and incorporated in our Builder of Choice relationships, and by the simplicity embedded in our Everything's Included offerings. And let me say that Kemp Gillis and his extraordinary purchasing team have done an amazing job of navigating this difficult landscape. I also want to warmly acknowledge Jon and Rick, our co-CEOs, who have chosen not to sit on high perch in difficult times but instead went to the problem and saw for themselves so they could be part of the solution.
Together, as partners, they visited each of our 38 divisions over a six-week period, met with our production and purchasing teams in the field, got a tangible feel for the most significant issues, and translated their visits into solutions. Time, focus, and attention problems are being solved, and that is simply the Lennar way. Even with the challenges in the market, in our fourth quarter, we delivered just under 18,000 homes, which is every single home that could be delivered as our customers expected in one of their home for the holidays.
We grew our deliveries 11% year-over-year, while our revenue from home sales grew 24% to almost $8.5 billion. And by remaining laser-focused on orderly targeted growth with our sales pace tightly matched with our pace of production, we drove a 300 basis point gross margin improvement to 28%. Alongside gross margin, we recorded a significant improvement in operating efficiency, as our SG&A decreased 150 basis points to 6%. We continue to limit our land -- excuse me, we continue to limit our sales pace, especially as cycle times expand in favor of a significantly benefited bottom line. Accordingly, our net new orders grew 2%, and they're expected to contract slightly in first quarter.
With our sales discipline, our net margin increased 460 basis points to a company all-time high of over 22% in our fourth quarter. This drove a 50%, after-tax and before mark-to-market items, bottom line improvement in net earnings to over $1.3 billion this year. So with our focus on bottom line over top line improvement, 24% revenue growth drove 50% bottom line growth. Additionally, our Financial Services group continued to perform exceptionally, adding $111 million of earnings, while supporting the closing of every possible home and making the closing process as joyful as possible in the current environment. With the strong performance of our core operating divisions, our balance sheet and returns continued to improve as well.
Even after the repurchase of 10 million shares of stock and the reduction of $850 million of debt in the quarter, we reported a cash balance of over $2.7 billion and an 18.3% debt to total cap ratio, while our return on equity grew almost 800 basis points year-over-year to 22.6%. All in all, our core operating numbers are very strong in the fourth quarter and we expect that strength to continue into 2022 and beyond. From a macro perspective, the housing market remains strong across the country. Demand has been consistently strong, while the supply of new and existing home remains limited.
Since new home construction cannot ramp quickly enough to fill the demand, short supply is likely to remain for some time to come. Even though home prices have moved much higher, overall affordability remains strong. Interest rates are still very attractive and personal savings for deposits are strong. Wages for the average family seem to be rising faster than monthly payments and those higher wages are starting to be reflected in government numbers and unfortunately, in inflation as well. The upward spiral of housing purchase is -- purchases is accelerating.
Millennials are forming families, apartment dwellers are purchasing first-time homes, first-time homes are selling at higher prices, and appreciated equity is enabling first-time move-ups. The move-up home is selling at strong pricing with increased equity, enabling customers to purchase an even larger home, all this while supply is limited for everyone and the iBuyer and single-family for rent participants are providing additional liquidity to the marketplace. Against this backdrop, and although there has been some turbulence through the year, 2021 has been an extraordinary strategic year for our company. We established a strategic plan that included cash flow generation and debt reduction in order to improve returns on capital and equity.
We also articulated a drive and desire to have a strong focus on new technology-driven efficiencies in our core business, while we spin ancillary businesses and become a pure-play homebuilding company. Our 2021 performance reflects focus on these strategies and 2022 will be extension -- an extension of the same focus. In 2021, we generated almost $3 billion of homebuilding cash flow to enable a reduction of debt by $1.3 billion and a purchase of 14 million shares of stock for a 4.5% reduction in share count. Accordingly, our debt to total cap is below 20% and we have $2.7 billion of cash on hand.
Our total debt is $4.7 billion and will continue to be reduced. We also reduced our land holdings to three years as promised and increased our land controlled versus owned to 59%, exceeding our goal at the beginning of the year. We have almost certainly established Lennar as a technology-enabled and engaged company. We invested in numerous new technologies, while eight prior investments were either sold or went public, which resulted in significant extraordinary profit for the company this year. Perhaps more importantly, we have invested in companies that have enabled improvement in our core business, while we have benefited both through the investment and through incorporation in our core.
But this is just the beginning. We are working with numerous additional technology companies that are working to solve some of the most difficult problems facing our industry. As a case in point, we're working to solve the issues in supply chain, labor shortages and production using innovative technology in innovative ways. Many of you have read and commented on our investment in ICON, the 3D printing building company in Austin, Texas. We expect to start our first 3D printed community in Austin sometime in 2022 and hope to reduce labor, material and time as we help refine this structural production process.
Alongside ICON, we have invested in two additional innovative production companies called Veev and Cover, and they're engaged in innovative factory-based manufactured solutions to production. Both Veev and Cover are focused on a more comprehensive solution beyond just the structural components and encompass mechanical, electrical and plumbing solutions in the factory as well. These companies are working on each of the major components of the home and building better and more precise delivery systems that will reduce the need for labor and enhance precision and cycle time.
All of these companies are focused on the most frictional and problematic elements of the production process and driving towards solutions for the industry. Given today's supply chain and workforce constraints, we should all be interested, if not laser-focused, on the success of these critical solutions, Lennar most certainly is. And finally, 2021 has, in fact, been a year of focus on the strategy of becoming a pure-play homebuilding company. We have been hard at work refining our SpinCo that I've described in the past. As you can see from our balance sheet and cash flow, the case for SpinCo has become more compelling with each quarter's successes.
We have excess capacity and balance sheet to spin our well-established ancillary businesses, and we expect to complete a tax-free spin by the second or third quarter of 2022. To that end, in November, we took our first significant step to complete the spin by formally filing a request for a private letter ruling from the IRS. We are getting very close to being prepared with defined business lines, a refined business plan and a balance sheet. We expect to file our at-first confidential Form 10 by the end of January or beginning of February, at which time we expect to have a name other than SpinCo and a management team in place. Some have asked about the time we have taken to disclose greater detail.
The fact is we're building a durable and sustainable public company that has to hit the ground running on day one. To that end, Matt Zames, as senior advisor to the company, has been focusing on the configuration and execution of our SpinCo strategy. In addition to and supporting that, Jeff McCall and a sequestered team of senior internal leaders, have modeled various configuration with different asset composition that have focused on getting both the program and the story right for the public markets. We have concluded that the spin company will be an asset-light asset management business that will have a limited balance sheet.
Many of the assets that we targeted for spin originally will be either part of the limited balance sheet of SpinCo or will be monetized in the form of assets under management housed within the private equity verticals of SpinCo or have been or will be resolved or monetized in other ways. The monetization has been and will be completed over the next year or so, and the cash proceeds will be deployed in Lennar to fortify our balance sheet or to continue to buy back stock on an opportunistic basis, and when our stock is on sale, like today, we'll be purchasing. Three core verticals have been identified and business planned for the spin, and they are multifamily, single-family for rent, and land strategies.
Each of these verticals already have raised third-party capital and are active asset managers. LMC, our Multifamily platform, has approximately $9 billion of gross capital under management and is raising its third fund. LSFR, our growing single-family for rent platform, currently manages approximately $1.5 billion of equity already raised. And our land strategies platform is still being refined for SpinCo, and will provide more detail in the near future. The remaining Lennar Corporation will drive higher returns on our assets and equity base, and the spin will not result in a material reduction of either our bottom line or our earnings per share as we project them.
Bottom line, this was a year of hard work at Lennar in the face of many issues, and there were no feet up on the desk during the year. So let me wrap up and conclude by saying that we have simply never been better positioned financially, organizationally and technologically to thrive and grow in this evolving housing market. The market, in general, remains strong. While difficulties in the supply chain present challenges for Lennar and the industry, the housing market remains strong and supply of new and existing homes is very limited.
We remain focused on an orderly targeted growth strategy with our sales pace tightly matched with our pace of production. We focus on gross margin by selling in step with production, while controlling costs and reducing our SG&A, and therefore, driving our net margin. As we look to 2022, we see continued strength in the market and double-digit growth for Lennar. As we noted in our press release, we're projecting 12,500 deliveries at a 26.75% margin in the first quarter and 67,000 deliveries at a 27% to 27.5% margin for the year. At this pace, we will have a strong bottom line with a projected spin-off in the second or third quarter, 2022 will be another record year for Lennar.
And with that, let me turn it over to Rick.