The Board of Directors for Merck has decided to invest 5% of 2018s retained earnings at the beginning of 2019 for a new pill press production line. The press will be depreciated over seven years with no salvage value. Total revenue is expected to increase by 3%. Merck has budgeted for a 30% income tax rate and a net income from noncontrolling interests of $15 million. All other numbers not related to this change have been budgeted to remain constant with 2018. What is the expected Return on Assets Ratio for 2019?

2018 42,294 2017 40,122 2016 39,807 $ $ $ Sales Costs, Expenses and Other Cost of sales Selling, general and administrative Research and development Restructuring costs Other (income) expense, net 10 14,030 10,017 10,261 651 189 35,148 13,509 10,102 9,752 632 (402) 33,593 8,701 2,508 6,193 (27) 6,220 2.34 2.32 Income Before Taxes Taxes on Income Net Income Less: Net (Loss) Income Attributable to Noncontrolling Interests Net Income Attributable to Merck & Co., Inc. Basic Earnings per Common Share Attributable to Merck & Co., Inc. Common Shareholders Earnings per Common Share Assuming Dilution Attributable to Merck & Co., Inc. Common Shareholders 1 2,912 10,074 10,339 776 (500) 33,601 6,521 4,103 2,418 24 2,394 0.88 0.87 4,659 $ $ $ $ $ $ $ $ 718 3,941 21 3,920 1.42 1.41 Consolidated Statement of Comprehensive Income Merck & Co., Inc. and Subsidiaries Years Ended December 31 ($ in millions) 2018 6,220 2017 2,394 2016 3,920 $ $ $ (66) Net Income Attributable to Merck & Co., Inc. Other Comprehensive (Loss) Income Net of Taxes: Net unrealized gain (loss) on derivatives, net of reclassifications Net unrealized loss on investments, net of reclassifications Benefit plan net (loss) gain and prior service (cost) credit, net of amortization Cumulative translation adjustment (44) 297 (10) (425) (223) (361) 5,859 (446) (58) 419 401 316 2,710 (799) (169) (1,078) 2,842 Comprehensive Income Attributable to Merck & Co., Inc. $ $ $ The accompanying notes are an integral part of these consolidated financial statements. 2018 2017 $ $ 7,965 899 6,092 2,406 7,071 6,873 Assets Current Assets Cash and cash equivalents Short-term investments Accounts receivable (net of allowance for doubtful accounts of $119 in 2018 and $159 in 2017) Inventories (excludes inventories of $1,417 in 2018 and $1,187 in 2017 classified in Other assets - see Note 7) Other current assets Total current assets Investments Property, Plant and Equipment (at cost) Land Buildings Machinery, equipment and office furnishings Construction in progress 5,440 4,500 25,875 6,233 5,096 4,299 24,766 12,125 Less: accumulated depreciation 333 11,486 14,441 3,355 29,615 16,324 13,291 18,253 11,431 7,554 82,637 365 11,726 14,649 2,301 29,041 16,602 12,439 18,284 14,183 6,075 87,872 Goodwill Other Intangibles, Net Other Assets $ $ $ $ Liabilities and Equity Current Liabilities Loans payable and current portion of long-term debt Trade accounts payable Accrued and other current liabilities Income taxes payable Dividends payable Total current liabilities Long-Term Debt Deferred Income Taxes Other Noncurrent Liabilities Merck & Co., Inc. Stockholders' Equity Common stock, $0.50 par value Authorized - 6,500,000,000 shares Issued - 3,577,103,522 shares in 2018 and 2017 Other paid-in capital Retained earnings Accumulated other comprehensive loss 5,308 3,318 10,151 1,971 1,458 22,206 19,806 1,702 12,041 3,057 3,102 10,427 708 1,320 18,614 21,353 2,219 1 1,117 1,788 38,808 42,579 (5,545) 77,630 1,788 39,902 41,350 (4,910) 78,130 Less treasury stock, at cost: 984,543,979 shares in 2018 and 880,491,914 shares in 2017 Total Merck & Co., Inc. stockholders' equity Noncontrolling Interests Total equity 50,929 26,701 181 26,882 82,637 43,794 34,336 2 33 3 4,569 87,872 $ $ The accompanying notes are an integral part of this consolidated financial statement. LIL MILLIONS CALEPL PLI SPILULUUIILS Accumulated Other Comprehensive Loss Other Paid-In Capital Common Stock Retained Earnings Treasury Stock Non- controlling Interests Total Balance January 1, 2016 $1,788 $ 40,222 $ $ (4,148) $ (38,534) $ $ 44,767 45,348 3,920 91 - Net income attributable to Merck & Co., Inc. 3,920 Other comprehensive loss, net of taxes (1,078) - Cash dividends declared on common stock ($1.85 per share) (5,135) Treasury stock shares purchased TILL (3,434) (1,078) (5,135) (3,434) 124 21 Acquisition of The Stay Well Company LLC Net income attributable to noncontrolling interests IIIII 124 21 (16) Distributions attributable to noncontrolling interests Share-based compensation plans and other Balance December 31, 2016 (16) 1,139 - - 1,788 (283) 39,939 - 44,133 2,394 1,422 (40,546) 220 40,308 - (5,226) - 316 Net income attributable to Merck & Co., Inc. - 2,394 Other comprehensive income, net of taxes - 316 Cash dividends declared on common stock ($1.89 per share) (5,177) - Treasury stock shares purchased (5,177) (4,014) (4,014) - Acquisition of Valle S.A. Net income attributable to noncontrolling interests 24 24 Distributions attributable to noncontrolling interests Share-based compensation plans and other (18) - (37) 39,902 729 - 41,350 (18) - 233 766 (43,794) Balance December 31, 2017 1,788 34,569 Net income attributable to Merck & Co., Inc. 6,220 (4,910) - (274) (361) 6,220 322 Adoption of new accounting standards (see Note 2) - 48 Other comprehensive loss, net of taxes (361) Cash dividends declared on common stock ($1.99 per share) (5,313) Treasury stock shares purchased IIIIII (5,313) (9,091) (1,000) (8,091) Net loss attributable to noncontrolling interests 11 (27) (25) Distributions attributable to noncontrolling interests Share-based compensation plans and other Balance December 31, 2018 (94) $ 38,808 862 - (5,545) (25) - 181 956 (50,929) $ 1,788 $ 42,579 $ S $ $ 26,882 The accompanying notes are an integral part of this consolidated financial statement. 2018 2017 2016 S 6,193 $ 2,418 $ 3,941 5,471 3,948 Cash Flows from Operating Activities Net income Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization Intangible asset impairment charges Charge for future payments related to collaboration license options Provisional charge for one-time transition tax related to the enactment of U.S. tax legislation Charge related to the settlement of worldwide Keytruda patent litigation Deferred income taxes Share-based compensation 4,519 296 650 - 4,676 646 500 5,347 (2,621) (509) 348 978 625 (1,521) 300 213 312 Other 190 (418) (911) 230 (341) 827 (266) (674) 10,922 297 (145) 254 (922) (3,291) (619) 206 278 (2,018) 124 (123) (1,087) ,451 (809) 237 10,376 6 Net changes in assets and liabilities: Accounts receivable Inventories Trade accounts payable Accrued and other current liabilities Income taxes payable Noncurrent liabilities Other Net Cash Provided by Operating Activities Cash Flows from Investing Activities Capital expenditures Purchases of securities and other investments Proceeds from sales of securities and other investments Acquisitions, net of cash acquired Other Net Cash Provided by (Used in) Investing Activities Cash Flows from Financing Activities Net change in short-term borrowings Payments on debt Proceeds from issuance of debt Purchases of treasury stock Dividends paid to stockholders Proceeds from exercise of stock options Other Net Cash Used in Financing Activities Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash Cash, Cash Equivalents and Restricted Cash at Beginning of Year (includes $4 million of restricted cash at January 1, 2018 included in Other Assets) Cash, Cash Equivalents and Restricted Cash at End of Year (includes $2 million of restricted cash at December 31, 2018 included in Other Assets) (2,615) (1.888) (1,888) (7,994) (10,739) 15,252 15,664 (431) (396) 10238 4,314 2,679 (1,614) (15,651) 14,353 (780) 482 (3,210) 5,124 (4,287) (26) (1,103) (9,091) (5,172) 591 (325) (13,160) (205) 1,871 (4,014) (5,167) 499 (195) (10,006) 457 (419) (2,386) 1,079 (3,434) (5,124) 939 (118) (9,044) (131) (2,009) 6,096 6,515 8,524 $ 7,967 $ 6,096 S 6,515 2018 42,294 2017 40,122 2016 39,807 $ $ $ Sales Costs, Expenses and Other Cost of sales Selling, general and administrative Research and development Restructuring costs Other (income) expense, net 10 14,030 10,017 10,261 651 189 35,148 13,509 10,102 9,752 632 (402) 33,593 8,701 2,508 6,193 (27) 6,220 2.34 2.32 Income Before Taxes Taxes on Income Net Income Less: Net (Loss) Income Attributable to Noncontrolling Interests Net Income Attributable to Merck & Co., Inc. Basic Earnings per Common Share Attributable to Merck & Co., Inc. Common Shareholders Earnings per Common Share Assuming Dilution Attributable to Merck & Co., Inc. Common Shareholders 1 2,912 10,074 10,339 776 (500) 33,601 6,521 4,103 2,418 24 2,394 0.88 0.87 4,659 $ $ $ $ $ $ $ $ 718 3,941 21 3,920 1.42 1.41 Consolidated Statement of Comprehensive Income Merck & Co., Inc. and Subsidiaries Years Ended December 31 ($ in millions) 2018 6,220 2017 2,394 2016 3,920 $ $ $ (66) Net Income Attributable to Merck & Co., Inc. Other Comprehensive (Loss) Income Net of Taxes: Net unrealized gain (loss) on derivatives, net of reclassifications Net unrealized loss on investments, net of reclassifications Benefit plan net (loss) gain and prior service (cost) credit, net of amortization Cumulative translation adjustment (44) 297 (10) (425) (223) (361) 5,859 (446) (58) 419 401 316 2,710 (799) (169) (1,078) 2,842 Comprehensive Income Attributable to Merck & Co., Inc. $ $ $ The accompanying notes are an integral part of these consolidated financial statements. 2018 2017 $ $ 7,965 899 6,092 2,406 7,071 6,873 Assets Current Assets Cash and cash equivalents Short-term investments Accounts receivable (net of allowance for doubtful accounts of $119 in 2018 and $159 in 2017) Inventories (excludes inventories of $1,417 in 2018 and $1,187 in 2017 classified in Other assets - see Note 7) Other current assets Total current assets Investments Property, Plant and Equipment (at cost) Land Buildings Machinery, equipment and office furnishings Construction in progress 5,440 4,500 25,875 6,233 5,096 4,299 24,766 12,125 Less: accumulated depreciation 333 11,486 14,441 3,355 29,615 16,324 13,291 18,253 11,431 7,554 82,637 365 11,726 14,649 2,301 29,041 16,602 12,439 18,284 14,183 6,075 87,872 Goodwill Other Intangibles, Net Other Assets $ $ $ $ Liabilities and Equity Current Liabilities Loans payable and current portion of long-term debt Trade accounts payable Accrued and other current liabilities Income taxes payable Dividends payable Total current liabilities Long-Term Debt Deferred Income Taxes Other Noncurrent Liabilities Merck & Co., Inc. Stockholders' Equity Common stock, $0.50 par value Authorized - 6,500,000,000 shares Issued - 3,577,103,522 shares in 2018 and 2017 Other paid-in capital Retained earnings Accumulated other comprehensive loss 5,308 3,318 10,151 1,971 1,458 22,206 19,806 1,702 12,041 3,057 3,102 10,427 708 1,320 18,614 21,353 2,219 1 1,117 1,788 38,808 42,579 (5,545) 77,630 1,788 39,902 41,350 (4,910) 78,130 Less treasury stock, at cost: 984,543,979 shares in 2018 and 880,491,914 shares in 2017 Total Merck & Co., Inc. stockholders' equity Noncontrolling Interests Total equity 50,929 26,701 181 26,882 82,637 43,794 34,336 2 33 3 4,569 87,872 $ $ The accompanying notes are an integral part of this consolidated financial statement. LIL MILLIONS CALEPL PLI SPILULUUIILS Accumulated Other Comprehensive Loss Other Paid-In Capital Common Stock Retained Earnings Treasury Stock Non- controlling Interests Total Balance January 1, 2016 $1,788 $ 40,222 $ $ (4,148) $ (38,534) $ $ 44,767 45,348 3,920 91 - Net income attributable to Merck & Co., Inc. 3,920 Other comprehensive loss, net of taxes (1,078) - Cash dividends declared on common stock ($1.85 per share) (5,135) Treasury stock shares purchased TILL (3,434) (1,078) (5,135) (3,434) 124 21 Acquisition of The Stay Well Company LLC Net income attributable to noncontrolling interests IIIII 124 21 (16) Distributions attributable to noncontrolling interests Share-based compensation plans and other Balance December 31, 2016 (16) 1,139 - - 1,788 (283) 39,939 - 44,133 2,394 1,422 (40,546) 220 40,308 - (5,226) - 316 Net income attributable to Merck & Co., Inc. - 2,394 Other comprehensive income, net of taxes - 316 Cash dividends declared on common stock ($1.89 per share) (5,177) - Treasury stock shares purchased (5,177) (4,014) (4,014) - Acquisition of Valle S.A. Net income attributable to noncontrolling interests 24 24 Distributions attributable to noncontrolling interests Share-based compensation plans and other (18) - (37) 39,902 729 - 41,350 (18) - 233 766 (43,794) Balance December 31, 2017 1,788 34,569 Net income attributable to Merck & Co., Inc. 6,220 (4,910) - (274) (361) 6,220 322 Adoption of new accounting standards (see Note 2) - 48 Other comprehensive loss, net of taxes (361) Cash dividends declared on common stock ($1.99 per share) (5,313) Treasury stock shares purchased IIIIII (5,313) (9,091) (1,000) (8,091) Net loss attributable to noncontrolling interests 11 (27) (25) Distributions attributable to noncontrolling interests Share-based compensation plans and other Balance December 31, 2018 (94) $ 38,808 862 - (5,545) (25) - 181 956 (50,929) $ 1,788 $ 42,579 $ S $ $ 26,882 The accompanying notes are an integral part of this consolidated financial statement. 2018 2017 2016 S 6,193 $ 2,418 $ 3,941 5,471 3,948 Cash Flows from Operating Activities Net income Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization Intangible asset impairment charges Charge for future payments related to collaboration license options Provisional charge for one-time transition tax related to the enactment of U.S. tax legislation Charge related to the settlement of worldwide Keytruda patent litigation Deferred income taxes Share-based compensation 4,519 296 650 - 4,676 646 500 5,347 (2,621) (509) 348 978 625 (1,521) 300 213 312 Other 190 (418) (911) 230 (341) 827 (266) (674) 10,922 297 (145) 254 (922) (3,291) (619) 206 278 (2,018) 124 (123) (1,087) ,451 (809) 237 10,376 6 Net changes in assets and liabilities: Accounts receivable Inventories Trade accounts payable Accrued and other current liabilities Income taxes payable Noncurrent liabilities Other Net Cash Provided by Operating Activities Cash Flows from Investing Activities Capital expenditures Purchases of securities and other investments Proceeds from sales of securities and other investments Acquisitions, net of cash acquired Other Net Cash Provided by (Used in) Investing Activities Cash Flows from Financing Activities Net change in short-term borrowings Payments on debt Proceeds from issuance of debt Purchases of treasury stock Dividends paid to stockholders Proceeds from exercise of stock options Other Net Cash Used in Financing Activities Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash Net Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash Cash, Cash Equivalents and Restricted Cash at Beginning of Year (includes $4 million of restricted cash at January 1, 2018 included in Other Assets) Cash, Cash Equivalents and Restricted Cash at End of Year (includes $2 million of restricted cash at December 31, 2018 included in Other Assets) (2,615) (1.888) (1,888) (7,994) (10,739) 15,252 15,664 (431) (396) 10238 4,314 2,679 (1,614) (15,651) 14,353 (780) 482 (3,210) 5,124 (4,287) (26) (1,103) (9,091) (5,172) 591 (325) (13,160) (205) 1,871 (4,014) (5,167) 499 (195) (10,006) 457 (419) (2,386) 1,079 (3,434) (5,124) 939 (118) (9,044) (131) (2,009) 6,096 6,515 8,524 $ 7,967 $ 6,096 S 6,515