When you hear the name Ryder, what comes to mind? Is it the 1983 movie A Christmas Story and Ralphie Parker's quest for a Red Ryder BB gun? Or, is it Winona Ryder shopping in Beverly Hills for a five-finger discount? How about the wide-open spaces of a golf course and the pursuit of the Ryder Cup?

For the IRS, it is Dow Jones Transportation Average component Ryder (NYSE:R) that's first in its thoughts.

After the market closed Friday, the company filed a Securities and Exchange Commission 8-K statement regarding the IRS audit of its tax returns from 1998 through 2000. If the IRS prevails, the company would owe taxes to the tune of $190 million -- equal to its reported net income over the last 12 months.

The bad news gets worse. There is another $50 million the tax man wants in interest so far. And, since it plans to fight the IRS, Ryder thinks it could be year-end 2006 before this matter is settled.

Ryder's stock, up more than 50% over the last 52 weeks, closed on Friday at $54.50 (near its 52-week high). Since then it has been all downhill (and not in low gear) to $46.36 at noon today -- a 15% whipping in fewer than two trading days.

Yesterday, the company announced an upbeat 2005 business plan that, so far, has not produced any traction to stop the stock's fall. Revenue is forecast to increase 4% and net earnings per share will rise a healthy 11% to 14%. But the company's EPS guidance of $3.20 to $3.30 in 2005 (the stock trades around 14 to 15 times these forward earnings) came in below analyst estimates.

Tax issues aside, Ryder has made tremendous strides. Debt to equity has slid from 275% in 2000 to an expected 122% in 2005. While trying to build free cash flow, the company cut capital expenditures, and it worked: Free cash flow went from a negative $270 million in 2000 to a peak of $366 million in 2002.

Capital expenditures are forecast to rise 40% next year to $1.4 billion as the company aggressively tries to build a better long-term future. The net result, though, is that free cash flow is expected to drop to a negative $10 million. That's a big drop from the $229 million in free cash flow projected for 2004, but it's an investment the company hopes will build free cash flow in the future.

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Fool contributor W.D. Crotty does not own stock in Ryder.