udgment Case 16-6 Valuation allowance; disclosures; CVS Health LO16-4 Real World Financials CVS Health Corporation showed 2019 net income from continuing operations of $6,631 million. The following is an excerpt from a disclosure note to CVS Health's 2019 financial statements: (S in millions) Deferred income tax assets: Lease and rents Inventory 2019 2018 Employee benefits Bad debts and other allowances Retirement benefits Net operating loss and capital loss carryforwards Deferred income Insurance reserves Investments Other $ 267 $ 277 23 28 191 243 294 243 47 130 480 529 36 104 430 467 11 451 242 Investments Other Valuation allowance Total deferred income tax assets 11 451 242 (374) (520) $ 1,845 $ 1,754 Deferred income tax liabilities: Investments Depreciation and amortization Total deferred income tax liabilities Required: 1. Did CVS's valuation allowance increase or decrease during 2019? By how much? $ (289) (8,850) (9,431) $ (9.139) $ (9,431) 2. If CVS had not adjusted its valuation allowance during 2019 (the allowance remained the same), what would have been its income from continuing operations? 3. All else equal, would CVS need to assert that it would be more profitable or less profitable in future years in order to justify the change that occurred in its valuation allowance during 2019?