How Much Have Companies Benefited From Lower Interest Expense?

In an attempt to quantify the extent to which lower interest rates have helped corporate America, below is a chart of the total interest expense of S&P 500 companies for the last 10 years.  On an aggregate level, interest expense is below where it was in 2005, and as a percent of EBIT it is the lowest it has been in 10 years.  The lower interest costs are a result of both lower rates and deleveraging.  Total debt of S&P 500 companies is down from $7.4T to $6.7T since 2010.

Lower interest expense has added $157B in earnings before tax to S&P 500 companies.  If you assume a 35% tax rate and a market multiple of 14x earnings, the lower interest expense has added approximately $1.4T in market cap to the S&P 500–about 10% of the total market cap of $13.2T.